Action in Superior Under 35k

Canaccede Credit LP v. Schulz-Hallihan, 2021 ONSC 4851 (CanLII)

[33] The doctrine of abuse of process is a broad and remedial common law principle. It is one which can take many forms. It was developed by the courts to protect the integrity of the adjudicative process: Intact Insurance v. Federation Insurance Co. of Canada, 2017 ONCA 73, at para. 20.

[34] The doctrine arises from the court’s inherent jurisdiction. As Arbour J, writing for the majority of the Supreme Court of Canada (LeBel J. and Deschamps J. concurring), stated in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, 2003 CarswellOnt 4328 (“CUPE”):

35 Judges have an inherent and residual discretion to prevent an abuse of the court’s process. This concept of abuse of process was described at common law as proceedings “unfair to the point that they are contrary to the interest of justice” (R. v. Power, 1994 CanLII 126 (SCC), [1994] 1 S.C.R. 601 (S.C.C.), at p. 616), and as “oppressive treatment” (R. v. Conway, 1989 CanLII 66 (SCC), [1989] 1 S.C.R. 1659 (S.C.C.), at p. 1667). McLachlin J. (as she then was) expressed it this way in R. v. Scott, 1990 CanLII 27 (SCC), [1990] 3 S.C.R. 979 (S.C.C.), at p. 1007:

. . . abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principles of justice underlying the community’s sense of fair play and decency. The concepts of oppressiveness and vexatiousness underline the interest of the accused in a fair trial. But the doctrine evokes as well the public interest in a fair and just trial process and the proper administration of justice.

[35] The doctrine of abuse of process is one which may be engaged to prevent injustice through legal process. Its breadth and flexibility does not require the breach of a statute or a rule. As Goudge J.A. of the Court of Appeal for Ontario wrote in a dissent in Canam Enterprises Inc. v. Coles (2000), 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), reversed 2002 SCC 63 (CanLII), [2002] 3 S.C.R. 307, which was ultimately adopted by the majority of the Supreme Court of Canada in the same case:

[55] The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. See House of Spring Gardens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).

[36] The doctrine of abuse of process is primarily focused on preserving the integrity of the administration of justice rather than protecting the interests of individual litigants. As Arbour J. wrote at para. 43 of CUPE :

In all of its applications, the primary focus of the doctrine of abuse of process is the integrity of the adjudicative functions of courts. Whether it serves to disentitle the Crown from proceeding because of undue delays (see Blencoe, supra), or whether it prevents a civil party from using the courts for an improper purpose (see McIlkenny [H.L.], supra, and Demeter, supra)[1] the focus is less on the interest of parties and more on the integrity of judicial decision making as a branch of the administration of justice.

[37] It is also important to note, as the court did in CUPE at para. 51, that “[r]ather than focus on the motive or status of the parties, the doctrine of abuse of process concentrates on the integrity of the adjudicative process.”

[38] In Sangale v. Abdalla, 2013 ONSC 5655, Kiteley J. was faced with a situation somewhat analogous to the one before me: forum shopping. A wife who had commenced a divorce and custody application in Kenya (where her children and husband resided), brought another application for similar relief in Ontario. In response to the husband's motion for summary judgment, the wife withdrew portions of her Kenyan application. Kiteley J. was not persuaded by the wife’s tactics. She wrote:

26 To allow the Applicant to achieve a tactical advantage by use of a strategy that can only be described as forum shopping to defeat this motion brought by the Respondent is inconsistent with the objectives of public policy against multiple proceedings and undermines the integrity of the adjudicative process and constitutes an abuse of process.

[39] In V.F. v. Halton Children's Aid Society, 2016 ONCJ 111, while sitting in the Ontario Court of Justice, I found that a child protection proceeding commenced in that court by an allegedly alienated child was, in the circumstances, an abuse of process. The child protection proceeding was commenced in the face of an impending Superior Court custody and access trial between her parents. If allowed to proceed, the custody and access proceeding would have been stayed by operation of the governing statute at the time, the Child and Family Services Act. I found that the child protection proceeding was commenced by the child, under the control of her mother, for the collateral purpose of derailing the custody and access proceedings. She did so at a time that the mother faced the prospect of losing custody of the parties’ children. I made that abuse of process finding even though the Child and Family Services Act allowed a child to commence a protection proceeding.

[40] In Mayer v. 13143122 Ontario Inc., 2002 CanLII 49412 (ON SC), [2002] O.J. No. 457 (S.C.), Cullity J. made a finding that a subrogated insurer’s claim against a defendant was an abuse of process. He made that finding because the insured had already sued for the portion of their loss that had not been covered by the insurer. Cullity J.’s decision was not based on the breach of any statute or term of the insurance contract. As he wrote at para. 5:

5 Counsel were agreed that there are no statutory provisions, or terms of the policy, that bear on the issue in the motion. In consequence, the question whether I have a discretion -- and, if so, how it should be exercised -- must be considered against the backdrop of the rules of common law and the principles of equity that govern an insurer's right of subrogation.

[41] In Paul Revere Insurance Company v. Herbin, 1996 CarswellNS 101, [1996] N.S.J. No. 88 (N.S. S.C.), Saunders J. of the Nova Scotia Supreme Court relied upon his inherent jurisdiction to prevent an abuse of process in ruling that a case must be heard in Nova Scotia’s Supreme Court rather than its Small Claims Court. Herbin arose from the termination of disability benefits that paid the insured $1,550 monthly benefits to age 65, if qualified. Mr. Herbin sued for the Small Claims Court limit of $5,000. He left open the idea of further suits against the insurer for the same disability benefits in subsequent months, as his claims for unpaid benefits again accrued.

[42] Saunders J. was concerned that the insured could sue the insurer each month for unpaid benefits, in order to stay within the Small Claims Court limit. Theoretically, the insured could have brought 69 separate claims against insurer for benefits under the policy. That could lead to inconsistent results before different adjudicators. The total claims in the Small Claims Court could have reached $500,000. Saunders J. found that the process of the Small Claims Court, with no rights of production and discovery, was not equipped for such a claim or set of claims. Considering the risk of serial claims in a court ill-equipped to deal with a case such as the one before him. Saunders J. required the entirety of the claim to be heard in the Nova Scotia Supreme Court.

[43] Herbin can be seen as offering the inverse mirror image of this case, where the wrong court is the superior one. Particularly apposite to the issues before this court, Saunders J. did not find that Mr. Herbin breached any statute or rule. Rather he relied on his superior court’s inherent jurisdiction, writing:

26 This court has the inherent jurisdiction to protect its own integrity and prevent an abuse of process. For all of the reasons stated, I would grant the relief sought by the applicant, Paul Revere Insurance Company, that is to say, the Small Claims Court action taken by Mr. Herbin is an abuse of process and his claim will be stayed. It should be commenced in the Supreme Court.