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CIVIL PROCEDURE - Parties - Vexatious litigants

Thursday, June 11, 2020 @ 9:13 AM  

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Appeal by the defendant from vexatious litigant order made against him. The appellant, an undischarged bankrupt and self-represented litigant, was pursued by investors trying to trace their lost funds given to the appellant in an investment scheme. The investors brought an application under the Judicature Act for sanctions against the appellant for his contempt of a production order, including an order declaring the appellant to be a vexatious litigant. The case management judge found the procedure under the Judicature Act obsolete and relied on the inherent power of the superior courts to prevent abuses of their processes. He found many indicia of vexatious activity, including some that did not appear to be within the parameters of the Judicature Act. He granted a vexatious litigant order significantly wider than the one applied for. The case management judge next considered the appropriate sanction to impose on the appellant for his contempt of prior court orders. He found this was one of the exceptional cases where incarceration was required to meet the objectives of deterrence and denunciation and imposed a sentence of 30 days’ imprisonment.

HELD: Appeal allowed. It was an error for the courts to assert an aspect of the inherent jurisdiction that conflicted with the wording in the Judicature Act or that took priority over the statutory regime. The courts could not refuse to apply statutes based on a bald declaration of obsolescence. Legislation must be interpreted and applied in its present context, but legislation did not become obsolete unless and until the legislature repealed it. The inherent jurisdiction should be invoked when the statutory process was proven to be inadequate in the particular case, not routinely based on a perception that the inherent jurisdiction approach was preferable. In this case there was no justification for the court to mechanically divert the application brought under the Judicature Act to be considered under the court’s inherent jurisdiction. A vexatious litigant order precluding new proceedings appeared out of context for a defendant, and the order could not reasonably prevent him from defending the allegations of contempt against him. This was a case of complex litigation involving a difficult litigant which was already in case management. The issues should have been dealt with in case management. A blanket vexatious litigant order did not address the problem in a proportionate or effective way and was not an effective or appropriate remedy for contempt. The case management judge should have granted a carefully crafted case management order, and possibly a litigation plan instead of a boilerplate vexatious litigant order. Even if the vexatious litigant order was appropriate, the conditions imposed were unreasonable. The sanction must be set aside because of the failure to give the appellant a fair hearing as the case management judge concluded that an oral hearing was not needed to resolve the credibility issue, because he was not going to believe the appellant anyway.

Jonsson v. Lymer, [2020] A.J. No. 509, Alberta Court of Appeal, F.F. Slatter, M.B. Bielby and B.L. Veldhuis JJ.A., May 1, 2020. Digest No. TLD-June82020008