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July 20, 2015 - By Victor Yee

Dealing with Vexations Litigants in Condominiums

Condominium corporations sometimes find themselves confronted with a particular unit owner who vigorously and repeatedly pursues his/her rights under the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”). Such a unit owner may be honestly seeking to exercise the fullest extent of the rights afforded to him/her under the Act. However, it can also be the case where a particular unit owner may be intent on usurping the time, energy, and resources of the Board of Directors and property management. The courts have developed several tools to deal with these types of vexatious litigants.

How the Courts have Traditionally Dealt with Vexatious Litigants

A condominium corporation which believes it is party to a frivolous lawsuit may make a separate court application to the judge of the Superior Court to bar the plaintiff unit owner from commencing or continuing any civil lawsuits in Ontario against the condominium corporation, except upon approval by the court before doing so. The Ontario Rules of Civil Procedure also allows a defendant to make a motion for the court to stay or dismiss the plaintiff’s claim as frivolous, vexatious, or is otherwise an abuse of the court process, or strike out all or part of a plaintiff’s pleading documents on the grounds that such pleadings are scandalous, frivolous, vexatious, or an abuse of process. However, in response to the condominium corporation’s application, the unit owner may bring his/her own evidence, cross-examine the condominium corporation’s witnesses, summon third party witnesses, bring motions, and/or seek to appeal a court’s finding that they are a “vexatious litigant”. The risk therefore in the traditional approach is the possible protracting of the litigation even further.

The new Rule 2.1 of the Rules of Civil Procedure

On July 1, 2014, a new rule was implemented in Ontario to help the courts deal with vexatious litigants.

Rule 2.1 of the Rules of Civil Procedure gives the judicial system a summary process to stay or dismiss proceedings that appear on its face to be frivolous, vexatious, or an abuse of court – without the need for the parties to appear in court on a separate motion to be heard on evidence.

Under Subrule 2.1.02(7), the courthouse registrar must notify a judge if it becomes aware that a proceeding could be subject to such a stay or dismissal. Under Subrule 2.1.02(6), a party to a frivolous, vexatious, or abusive proceeding may file its own request with the registrar to notify the court. Either way, the registrar then brings the proceeding to the attention of a judge, who may order the plaintiff to file written submissions within 15 days and no more than 10 pages in length, as to why the judge should not stay or dismiss their claim. Within 10 days after that, the respondent may file its own written submissions, also no more than 10 pages in length, to support the stay or dismissal.

Judges now have even greater powers to ensure that the courts hear only bona fide disputes, thus reducing the judicial and administrative resources wasted on plaintiffs who use lawsuits solely as bargaining leverage or to siphon the defendant’s resources.

How the Courts have Applied the new Rule 2.1

In the recent case of Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497, Justice Fred Myers of the Ontario Superior Court of Justice held that there should be a reason for the court to invoke Rule 2.1. Myers J. stated at paragraph 12:

“For example, there may be reason to fear that a normal motion process would be misused by the target or, in many cases, the substance may be so clearly frivolous as to make proceeding on regular notice an utter waste for time, money, and resources for all involved.”

Justice Myers listed a number of “hallmarks of querulous litigant behavior” at paragraph 15:

Form

Content

At the same time however, Justice Myers was careful to note that even a vexatious litigant can sometimes have a legitimate claim worthy of proceeding through the courts, especially where the litigant is simply unable to properly communicate the real issue at the heart of the dispute. At paragraph 18, Myers J. held that in considering the invocation of Rule 2.1, “Care should be taken to allow generously for drafting deficiencies and recognizing that there may be a core complaint which is quite properly recognized as legitimate”.

In the subsequent case of Markowa v. Adamson Cosmetic Facial Surgery Inc., 2014 ONSC 6664, also decided in November 2014 by Justice Myers, the Court held that although the plaintiff Ms. Markowa wrote well using the language and form of the law, in contrast to the plaintiff in Gao, her pleadings were, like Mr. Gao’s, essentially re-litigating claims that had already been decided by a previous Court. Accordingly, in both Gao and Markowa, Myers J. dismissed the plaintiffs’ claims pursuant to the new Rule 2.1 not only on their form but also on their merits – or lack thereof.

What does this new Rule mean for Condominium Corporations?

Prior to the enactment of Rule 2.1, a Board of Directors faced with a unit owner who brings repeated and/or baseless claims against the condominium corporation had little recourse other than to defend the lawsuit and commence a separate vexatious litigant application, or seek to strike out the unit owner’s pleadings as vexatious under Rule 21.01(3)(d). Alternatively, the condominium corporation could move for summary judgment under Rule 20 or Rule 21 if, respectively, a genuine issue requiring trial is absent or where the pleadings disclose no reasonable cause of action. But given the amount of unintelligible pleadings and re-litigation attempts that condominium corporations face at trial levels of court, these traditional procedures still invariably divert the communal finances of the condominium corporation away from pressing issues such as maintenance and repairs.

With the enactment of Rule 2.1, when confronted with a unit owner’s frivolous or vexatious claim, legal counsel for condominium corporations is now able to send a letter to the courthouse registrar asking the registrar to activate this summary procedure. If the unit owner chooses to file 10-pages-or-less of written material as to why their claim should not be dismissed, legal counsel for the Corporation may file 10-pages-or-less of written reply. Within a month or two after being notified by the registrar, a judge will have handed down a ruling on whether the unit owner’s claim should proceed or not. No oral hearing or in-court appearance is required from any of the parties, further saving the condominium corporation time and legal fees.

At the end of the day, it must be remembered that condominium corporations are solely funded by the contributions of homeowners. Every dollar the condominium corporation spends on legal counsel necessarily means either increased common expenses in the future or the forbearance of certain communal undertakings. These non-profit organizations are significantly hampered when the actions of a particularly vexatious unit owner overshadows the collective wellbeing of their neighbours. At least until the implementation of the Condominium Authority Tribunal under Bill 106, the Protecting Condominium Owners Act, 2015 which is currently before the Ontario Legislature, the new Rule 2.1 provides a more cost-effective tool for condominium corporations to nip these types of wasteful lawsuits in the bud; ultimately benefiting the collective community, the vexatious litigant, the judicial system and access to justice at large. 

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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