


COURT OF APPEAL FOR ONTARIO

CITATION: Lukezic v. Royal Bank of Canada, 2012 ONCA
    350

DATE: 20120528

DOCKET: C54312

Laskin, Rosenberg and Goudge JJ.A.

BETWEEN

James Joseph Lukezic, Walker Hall Winery Ltd.

Plaintiffs (Appellants)

and

Royal Bank of Canada

Defendant (Respondent)

James Joseph Lukezic, appearing in person

Milton A. Davis and Brendan Hughes, for the respondent

Heard: April 11, 2012

On appeal from the judgment of Justice Glen A. Hainey of
    the Superior Court of Justice, dated September 9, 2011, with reasons reported
    at 2011 ONSC 5263.

Goudge
    J.A.:

[1]

The appellants commenced this action against the respondent on April 4,
    2011.  The action arose out of the appellant companys commercial relationship
    with the respondent.  The respondent immediately brought a motion in the action
    for various forms of relief.

[2]

On May 16, 2011, Hainey J. allowed the motion and issued an order
    dismissing the appellants action as disclosing no reasonable cause of action,
    and declaring the appellant Lukezic a vexatious litigant pursuant to s. 140(1)
    of the
Courts of Justice Act
, R.S.O. 1990, c. C.43.

[3]

Both appellants appeal from the first part of that order, and the
    appellant Lukezic appeals from the second part of the order.  There are thus
    two issues in this appeal.

[4]

This court did not call on the respondent on the first issue.  I would
    dismiss the appeal from the dismissal of the action.  I agree with the motion
    judge that the appellants statement of claim is virtually the same as their
    statement of claim in a prior action against the respondent, which was also
    struck out.  It asserts a claim which relates entirely to the appellant Walker
    Hall Winery Ltd.  That company is in receivership and the appellant Lukezic has
    no authority to bring a claim on its behalf without leave, which he does not
    have.  The appeal from this part of the order is therefore dismissed.

[5]

The appellant Lukezic also challenges that part of the order of the
    motion judge declaring him a vexatious litigant.  He does not argue any error
    in the reasoning of the motion judge in making that order.  Nor in my view
    could he do so.  The reasons of the motion judge are compelling.

[6]

Rather, he argues that s. 140(1) of the
Courts of Justice Act
requires that an application must be brought to obtain this relief.  The court
    cannot grant the order when it is sought by a motion in an action.

[7]

While this argument does not appear to have been made to the motion
    judge, I would give effect to it.  Since the vexatious litigant order was
    sought in this case by way of motion in an action, the motion judge did not
    have jurisdiction to grant that relief.

[8]

Section 140(1) of the
Courts of Justice Act
reads as follows:

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.

[9]

The issue of whether a vexatious litigant order can be made only on
    application, rather than by motion in an action was before this court in
Kallaba
    v. Bylykbashi
(2006), 265 D.L.R. (4
th
) 320 (Ont. C.A.).  In
    that case my colleagues Cronk J.A. and Juriansz J.A. held that they need not
    decide the issue.  They set aside a vexatious litigant order that had been
    obtained against the appellant on motion, concluding that even if the motion
    judge had jurisdiction to make the order, the appellant had not been accorded a
    fair hearing when the order was made.

[10]

However,
    my colleague Lang J.A. addressed the issue squarely.  In detailed reasons, she
    set aside the vexatious litigant order because it was made on a motion in an
    action, not by way of application.  She found that the order was therefore made
    without jurisdiction.

[11]

I
    agree with Lang J.A.

[12]

My
    colleague concluded that the proper interpretation of s. 140(1) requires that
    an application be brought to obtain this relief.  It cannot be obtained by way
    of motion in an action.  She offered four reasons for this conclusion, all set
    in the context of the reality that, as the majority said in that case, a
    vexatious litigant order is an extraordinary remedy that alters a persons
    right to access the courts.

[13]

In
    summary, Lang J.A. emphasized that the
Courts of Justice Act
is
    designed to advance access to justice which is, as she says, a fundamental
    pillar of the rule of law.  Section 140(1) runs contrary to that important goal
    by denying access to individuals with carefully specified characteristics.  In
    that sense, it is an exception to the thrust of the legislation and therefore
    should be construed strictly.

[14]

Second,
    Lang J.A. looked to the legislative history of s. 140(1) to support her
    conclusion.  The first and only previous legislative incarnation permitting
    this relief was the
Vexatious Proceedings Act
, R.S.O. 1980, c. 523. 
    It required an originating notice which was clearly different from an
    interlocutory motion.

[15]

Third,
    Lang J.A. found that the plain reading of s. 140(1) compels the same answer. 
    The relief must be sought on application.  Section 1 of the
Courts of
    Justice Act
defines application as a civil proceeding that is commenced
    by notice of application or by application.  This is different from a motion
    in an action.

[16]

Finally,
    Lang J.A. found that an application provides the procedure best suited to the
    determination of whether a litigant is vexatious.  In large measure this is because
    of the due process protections which that procedure accords to the person
    targeted, such as personal service, adjudication by a judge, a directed trial
    of an issue if necessary, and the right of appeal without the need for leave.

[17]

I
    agree with this reasoning.  As a consequence, I would allow the appeal from
    that part of the order of the motion judge and would dismiss the respondents
    claim for an order that the appellant Lukezic is a vexatious litigant.

[18]

Since
    success is divided, and the appellant Lukezic is self-represented, I would not
    award any costs of this appeal.

Released: May 28, 2012 (J.L.)

S.T. Goudge J.A.

I agree J.I. Laskin J.A.

I agree M. Rosenberg J.A.


