Industrial Alliance Insurance and Financial Services Inc. v. Morrissette et al.
[Indexed as: Industrial Alliance Insurance and Financial Services Inc. v. Morrissette]
Ontario Reports
Ontario Superior Court of Justice
Gomery J.
August 26, 2020
152 O.R. (3d) 498 | 2020 ONSC 5177
Case Summary
Civil procedure — Vexatious litigants — Respondent acting for policyholder to claim an insurance benefit and submitting invoice to applicant insurer — Applicant refusing to pay and respondent commencing actions in Ontario and Quebec all advancing essentially the same allegations — Respondent also filing or threating to file complaints with Law Society — Respondent and his sole proprietorship declared vexatious litigants.
The respondent was retained by the estate of a policyholder with respect to a claim for a benefit under a life insurance policy. The applicant denied the claim. The respondent submitted an invoice to the applicant for fees in relation to his work for the estate, claiming that the applicant's representatives implicitly undertook to compensate him for his spent in negotiations. The applicant refused to pay the invoice, resulting in the respondent commencing four different lawsuits in Ontario and Quebec against the applicant, its employees and directors. The central allegations in all four suits were substantially the same. Three of the suits had already been dismissed and the respondent had not appealed any of the dismissal orders. The respondent also commenced other legal proceedings involving the applicant's representatives, and filed complaints or threatened to file complaints with the Law Society of Ontario. The applicant applied for a declaration that the respondent and his sole proprietorship were vexatious litigants.
Held, the application should be allowed.
Declaring the respondents to be vexatious litigants was the only reasonable measure to safeguard the justice system. The first action, brought in Quebec, was found to have been an abuse of process. It followed that the three subsequent lawsuits, all advancing the same claim, were also abusive. The actions and complaints to the Law Society were brought for purposes other than the assertion of legitimate rights. Forum shopping and using abusive language were other examples of vexatious conduct that had been demonstrated. The only kind of conduct typical of vexatious litigants not engaged in by the respondents was persistent appeal of orders. Other steps taken to dissuade the respondents from their conduct, such as costs and detailed written reasons, had been ineffective.
Lang Michener et al. and Fabian et al. (1987), 59 O.R. (2d) 353, [1987] O.J. No. 355, 1987 CanLII 172, 37 D.L.R. (4th) 685 (H.C.J.), apld
Other cases referred to
Carleton Condominium Corp. No. 166 v. Sennek, [2018] O.J. No. 668, 2018 ONCA 118; GoodLife Fitness Centres Inc. v. Hicks, [2019] O.J. No. 4344, 2019 ONSC 4942 (S.C.J.); Van Sluytman v. Orillia Soldiers' Memorial Hospital, [2018] O.J. No. 204, 2018 ONCA 32, 26 C.P.C. (8th) 130
Statutes referred to
Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140 [as am.]
APPLICATION to have respondents declared vexatious litigants. [page499]
Stephen Cavanagh, for applicant.
Maurice Morrisette, for respondents.
GOMERY J.: —
1Industrial Alliance Insurance and Financial Services Inc. ("Industrial" or the "Applicant") applies for a declaration that Maurice Morrissette and MP Services (collectively, "Morrissette" or the "Respondents") are vexatious litigants and orders that would, among other things, require them to obtain leave before commencing any more legal proceedings. Morrissette opposes the application.
2For the reasons set out below, I am granting the application.
Background
3Over the past two years, Morrissette has begun four different lawsuits in Ontario and Quebec against Industrial, its employees and directors.1 These lawsuits all arise from interactions between Morrissette and Industrial's representatives in early 2018. Morrissette was retained by the estate of a policyholder with respect to a claim for a benefit under a life insurance policy. Despite Morrissette's attempts to persuade Industrial to pay the benefit, Industrial denied the claim. In June 2018, Morrissette submitted an invoice to Industrial for fees in relation to his work for the estate. Industrial refused to pay the invoice. This refusal prompted Morrissette to sue.
4In each of the four lawsuits, and in oral and written submissions on this application, Morrissette alleges that he is entitled to recover fees from Industrial because, in accepting to meet with him, Industrial's representatives implicitly undertook to compensate him for the time he spent in connection with their negotiations. The central allegations in all four lawsuits are substantially identical.
5Three of the lawsuits have been dismissed. Morrissette has not appealed any of the dismissal orders.
6A lawsuit before the Small Claims Court in Quebec City was dismissed on July 23, 2019 on the basis that Morrissette had no cause of action against Industrial. In her seven-page decision [page500] granting the defendants' motion to strike, Justice Vaillant concluded that there was no evidence that Industrial had made any verbal or written undertaking to pay Morrissette's fees. She further found that Morrissette's lawsuit was an abuse of procedure because there was no legal basis for the claim and, in particular, no legal or factual foundation for any claim against employees, officers and directors named as co-defendants in the lawsuit.
7Morrissette's lawsuit before the Small Claims Court in Ottawa against Industrial and the same individual co-defendants was dismissed on October 11, 2019. Industrial had accepted Morrissette's offer to discontinue the claim but subsequently refused to sign the paperwork required to obtain a consent dismissal. Industrial brought a motion to enforce the parties' agreement, which Deputy Judge Bansie granted. Deputy Judge Bansie also ordered Morrissette to pay $400 in costs.
8On October 15, 2019, Morrissette began a third lawsuit, again in the Small Claims Court in Ottawa. Industrial, the only defendant named in this action, moved to dismiss it on December 20, 2019. Morrissette did not attend the motion or file any material. Deputy Judge Bansie held that res judicata applied to the claim and dismissed it. He awarded Industrial further costs of $1000, and ordered that "all costs awards shall be paid by Jan. 24, 2020".
9On December 24, 2019, Morrissette filed a notice of motion seeking to set aside the dismissal of his second Ottawa Small Claims action. At the hearing of this motion before Deputy Judge Witteveen on January 31, 2020, Morrissette advised the court that he no longer sought to challenge the dismissal but took issue with the costs award. Deputy Judge Witteveen held that the costs award was reasonable and dismissed Morrissette's motion.
10Finally, on December 29, 2019, Morrissette commenced a fourth action in Small Claims Court in Toronto. This action was not served on Industrial until mid-March 2020. Industrial has filed a statement of defence but had not taken steps to seek a dismissal when the court's operations were suspended due to the COVID-19 pandemic.
11In addition to the four lawsuits against Industrial and its representatives, Morrissette has commenced other legal proceedings involving Industrial's representatives, and he has filed complaints or threatened to file complaints against lawyers and others.
12In November 2019, Morrissette sued Richard Kluska, the insurance agent who originally sold the insurance policy at issue in the estate's claim against Industrial. In this proceeding before the Small Claims Court in Ottawa, Morrissette seeks "consulting [page501] fees" based on "the same facts and circumstances set out in the claim against Industrial Alliance". In February 2020, Morrissette issued summonses to two employees of Industrial, ostensibly so that they could give evidence in court on March 11, 2020 in the Kluska action. When Industrial's lawyer attended in the courthouse on March 11, she discovered that the proceeding that day was a settlement conference, not a hearing, and there was accordingly no basis for the summonses.
13Finally, in April 2020, Morrissette filed complaints with the Law Society of Ontario against the lawyers who represented Industrial in the Ontario actions. The Law Society closed its files after a short investigation. Morrissette has also threatened to file complaints against Industrial's in-house legal counsel and against Kluska, and to commence other legal proceedings.
Legal Principles on a Vexatious Litigant Application
14Section 140 of the Courts of Justice Act, R.S.O. 1990, c. C.43 allows a court to declare that a party is a vexatious litigant:
Vexatious proceedings
140(1) Where a judge of the Superior Court of Justice is satisfied, on application, that a person has persistently and without reasonable grounds,
(a) instituted vexatious proceedings in any court; or
(b) conducted a proceeding in any court in a vexatious manner,
the judge may order that,
(c) no further proceeding be instituted by the person in any court; or
(d) a proceeding previously instituted by the person in any court not be continued,
except by leave of a judge of the Superior Court of Justice.
15A person who is declared a vexatious litigant under s. 140 is not denied any further access to justice. They are, however, deprived of the ability to sue or continue a lawsuit unless they can first convince a judge that the proceeding has merit. A s. 140 order therefore represents an exceptional restriction on the usual freedoms enjoyed by citizens in this country. It is a restriction that should only be made in the face of persuasive evidence of vexatious conduct, and its terms should be limited to what is necessary to protect those affected by the conduct.
16In determining whether the respondent is vexatious, the leading authority is Lang Michener and Fabian (1987), 59 O.R. (2d) 353, [1987] O.J. No. 355, 1987 CanLII 172. At pp. 358-59, Henry J. identified the hallmarks of vexatious proceedings. They can be summarized as follows: [page502]
(i) the respondent has brought one or more actions to determine an issue which has already been determined by a court of competent jurisdiction;
(ii) it is obvious that the respondent's action cannot succeed, or the action would lead to no possible good, or no reasonable person can reasonably expect to obtain relief;
(iii) actions are brought by the respondent for an improper purpose, including "the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights";
(iv) grounds and issues raised are rolled forward by the respondent into subsequent actions and repeated and supplemented, often with actions brought against the lawyers who have acted for or against the litigant in earlier proceedings;
(v) the respondent has failed to pay the costs of past unsuccessful proceedings; and
(vi) the respondent has persistently taken unsuccessful appeals from judicial decisions.
17Justice Henry further observed that, "in determining whether proceedings are vexatious, the court must look at the whole history of the matter and not just whether there was originally a good cause of action": Re Lang Michener, at p. 358.
18Re Lang Michener has been repeatedly endorsed by the Court of Appeal for Ontario, most recently in Van Sluytman v. Orillia Soldiers' Memorial Hospital, [2018] O.J. No. 204, 2018 ONCA 32, at para. 23, leave to appeal to S.C.C. refused, 38057 (November 1, 2018); and Carleton Condominium Corp. No. 166 v. Sennek, [2018] O.J. No. 668, 2018 ONCA 118, at para. 6.
Application of these principles
19In her 2019 decision in GoodLife Fitness Centres Inc. v. Hicks, [2019] O.J. No. 4344, 2019 ONSC 4942, at para. 53, Corthorn J. held that there are two issues to be determined on a s. 140 application:
(1) Are the respondents vexatious litigants?
(2) If so, what reasonable measures are needed to protect the administration of justice from the respondents' vexatious conduct? [page503]
(1) Is Morrissette a vexatious litigant?
20Morrissette's actions over the past two years present a textbook example of the conduct of a vexatious litigant. He has engaged in almost all of the behaviour identified in Re Lang Michener as giving rise to a s. 140 order:
-- Morrissette brought or continued three actions to determine an issue -- his entitlement to judgment on the invoice he presented to Industrial in June 2018 -- after this issue was determined by the Court of Quebec, a court of competent jurisdiction.
-- It is obvious that Morrissette's pending action before the Toronto Small Claims Court cannot succeed, and no reasonable person could expect that it would succeed, given the dismissal of substantially identical claims by other courts.
-- In her decision in the Quebec action, Vaillant J. found that Morrissette's action was an abuse of process. It follows that the three other lawsuits that Morrissette has pursued since then, all advancing the same claim, are also abusive. I further find that these actions and the complaints to the Law Society were brought "for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights": Re Lang Michener, at p. 358.
-- The grounds and issues in each lawsuit have been rolled forward by Morrissette into subsequent actions and supplemented with the action against Kluska and with complaints against two Ontario lawyers who act for Industrial.
-- Although he paid the $1000 in costs ordered against in him December 2019, Morrissette has not paid the other $400 in costs awarded to Industrial in October 2019, despite a further order by Bansie J. in December that Morrissette must pay "all" costs awards by January 24, 2020.
21The only kind of conduct typical of vexatious litigants that Morrissette has not engaged in is the persistent appeal of orders against him. His systematic filing of a substantially identical lawsuit each time an action is dismissed, however, effectively amounts to the same thing.
22I further find that Morrissette has engaged in other conduct that is vexatious, notably,
-- forum shopping in Quebec and Ontario; [page504]
-- improperly summonsing Industrial's employees to a hearing that was not set to occur in the Kluska action;
-- filing unfounded complaints against Industrial's lawyers, and threatening to file complaints against Industrial's in-house legal counsel; and
-- using abusive language in his communications with Industrial's lawyers and representatives.
23During the hearing on this application, Mr. Morrissette insisted that he had not behaved inappropriately. He insisted that, by agreeing to speak with him in 2018, Industrial necessarily undertook to pay for his time. He further insisted that he had the right to a hearing of his claim against Industrial on its merits. Based on these arguments, Mr. Morrissette maintained that it was not him but rather Industrial who has engaged in vexatious conduct, by repeatedly seeking to dismiss his lawsuits on technical grounds. In his view, this has been part of a stratagem to prevent him from having the opportunity to cross-examine the representatives of Industrial with whom he met in early 2018.
24Mr. Morrissette is wrong in thinking that every person who starts a lawsuit is entitled to a full trial. The rules of procedure in Ontario and Quebec permit a defendant to seek the early dismissal of a claim that clearly has no chance of success. Industrial has every right to use these rules to avoid the ongoing costs of defending clearly unmeritorious legal proceedings. Seeking the dismissal of a case before a trial is neither sneaky nor inappropriate; nor does it suggest that Industrial or its employees have something to hide.
25Justice Vaillant concluded in July 2019 that Morrissette did not have a viable claim against Industrial, its employees and directors. In fact, she went further, ruling that Morrissette was so reckless in commencing the action that it amounted to an abuse of process. This judgment was not appealed. As Bansie D.J. ruled in the second Ottawa Small Claims action, the conclusion that Morrissette does not have a valid claim against Industrial is res judicata.
26Mr. Morrissette does not have the right to try over and over again to find a court that will give him a different answer, or to use the threat of a series of lawsuits as a tactic to try to get a settlement from Industrial. Engaging in such conduct is vexatious.
27The first part of the test under s. 140 is therefore satisfied. [page505]
(2) What reasonable measures are needed to protect the administration of justice from Morrissette's conduct?
28I conclude that, in this case, the only reasonable measure that will safeguard the justice system is an order declaring Morrissette a vexatious litigant.
29I reach this conclusion because all other steps taken to dissuade Morrissette from his conduct have not had the desired effect.
30Costs are one mechanism that courts use to sanction litigants who file unmeritorious claims. This tool has not worked in this case. When Bansie D.J. ordered Morrissette to pay $400 costs on the dismissal of his first Ottawa Small Claims Court action, Morrissette started a new proceeding on the very next business day. When this new action was dismissed in December 2019, Morrissette was ordered to pay a further $1000 in costs. This order likewise did not prevent him from starting a fourth action a few days later. In the meantime, Morrissette has not paid the first cost order (although he has paid the second one).
31Detailed written reasons are another tool that judges use to try to dissuade litigants from inappropriate conduct. This too has not worked to curb Morrissette's behaviour. Given Vaillant J.'s decision in July 2019, Mr. Morrissette should have reasonably understood that he has no claim against Industrial or its representatives. The decision is thoughtful, thorough and written in plain language. Unfortunately, it had no effect.
32Finally, judges can speak directly to self-represented parties during settlement conferences and hearings to assist them in understanding the procedural and substantive hurdles that they must overcome to succeed in their claim. I do not have transcripts of the proceedings before other judges who have presided in Morrissette's actions. Based on their endorsements, however, I am absolutely confident that none of them encouraged Mr. Morrissette to persist in his claim against Industrial. Nonetheless, Mr. Morrissette is convinced that at least one deputy judge, and possibly two, encouraged him to proceed. He hears only what he wants to hear.
33In these circumstances, I see no way, short of an order under s. 140, to prevent Morrissette from continuing to exhaust the resources of our justice system with plainly unmeritorious claims, from requiring Industrial and other defendants to spend money and time defending claims that they should not have to defend, and from forcing lawyers to participate in investigations of spurious complaints against them. As mentioned earlier in these reasons, the order will not bar Morrissette's access to [page506] justice. It will, however, prevent him from continuing to abuse that access.
34I am therefore granting the application and issuing the order proposed by Industrial.
35Industrial shall submit an order for my signature with the terms proposed at the end of its written argument. It does not need to seek or obtain Mr. Morrissette's consent to the proposed order.
36Industrial is entitled to its costs on this application. If the parties cannot settle the issue of costs, Industrial shall have until September 11, 2020 to serve and file written submissions on costs, not longer than three pages in length, as well as a draft bill of costs. Morrissette shall have until September 25, 2020 to serve and file responding submissions, not longer than three pages in length. All materials shall be served by email and filed by e-mail at to ottawa.scj.courts @Ontario.ca.
Application allowed.
End of Document