



COURT OF APPEAL FOR ONTARIO

CITATION:

Aurora (Town) v. Lepp, 2020
    ONCA 528

DATE: 20200825

DOCKET: C67682

Huscroft, Zarnett and Coroza
    JJ.A.

BETWEEN

The Corporation of the Town of Aurora

Applicant
    (Appellant)

and

Robert
    Lepp

Respondent (Respondent)

Charles A.
    Painter, for the appellant

Robert
    Lepp, acting in person

Heard: July 22,
    2020 by video conference

On appeal from the judgment of Justice Mark L. Edwards of the Superior
    Court of Justice, dated October 17, 2019, with reasons reported at 2019 ONSC
    6041, and from the costs order, dated December 11, 2019.

REASONS FOR DECISION

A.

OVERVIEW

[1]

In December of 2018, Robert Lepp, the
    respondent, issued a 27-page Statement of Claim in the Superior Court of
    Justice against several parties including the appellant, the Corporation of the
    Town of Aurora (Aurora). In that claim, Mr. Lepp asserted (among other
    things) that numerous parties, including Aurora, had committed the torts of
    false arrest, false imprisonment, misfeasance in public office, and malicious
    prosecution. In addition to the Superior Court claim, Mr. Lepp had also
    initiated several other claims in the Small Claims Court.

[2]

Aurora brought an application before the Superior
    Court of Justice seeking that Mr. Lepp be declared a vexatious litigant
    pursuant to s. 140(1) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43 (the 
CJA
). Aurora also brought a motion to have Mr. Lepps claim
    dismissed under r. 2.1.01 of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194 (the 
Rules
), as being a proceeding that appears on
    its face to be frivolous or vexatious or otherwise an abuse of the process of
    the court."

B.

THE APPLICATION JUDGES DECISION

[3]

The application judge heard the matters together.
    On October 17, 2019, he provided written reasons dismissing Auroras
request
to declare Mr. Lepp a vexatious litigant and
    refusing to dismiss the entire action under r. 2.1.01. The application judge
    permitted Mr. Lepps action to continue, but he streamlined the claim by
    striking out many paragraphs without leave to amend. In the end, the
    application judge concluded that the claim contained the necessary components of
    false arrest, false imprisonment, and misfeasance in public office, such that,
    it could proceed.

[4]

The application judge seized himself of the
    matter in order to case manage the action. He imposed several conditions on Mr.
    Lepp. Of significance, he prohibited Mr. Lepp from initiating any further
    motion, action or proceeding against Aurora, its elected officials, employees,
    former employees or legal counsel, without first obtaining leave of the court.

[5]

Both parties sought their costs on the
    application and the motion. The application judge encouraged the parties to
    come to an agreement as to costs. The parties could not reach an agreement.
    After reviewing their submissions, the application judge viewed success as
    divided and held that neither party was entitled to costs.

C.

ISSUES ON APPEAL

(1)

Auroras Submissions

[6]

On appeal, Aurora argues that the application
    judge erred by:

(1)

failing to declare Mr. Lepp a vexatious litigant pursuant s. 140(1)
    of the
CJA
;

(2)

failing to dismiss Mr. Lepps claim under r. 2.1.01 of the
Rules
;

(3)

displaying a reasonable apprehension of bias during the hearing; and

(4)

failing to order that Aurora should receive full indemnity costs in
    the amount of $30,668.07.

[7]

Aurora also brings a motion to adduce fresh
    evidence. The fresh evidence consists of an affidavit that summarizes several
    events that occurred after the application was heard. These events include
    negative findings against Mr. Lepp made by several judges in unrelated
    proceedings and a finding of contempt made by the application judge.

(2)

Mr. Lepps Submissions

[8]

In response, Mr. Lepp contends that the
    application judge did not make any of the alleged errors. He denies that he is
    a vexatious litigant and he takes a very different view of the events that are
    summarized in Auroras fresh evidence affidavit. He asserts that many of the
    claims made against him in the affidavit are false.

[9]

Mr. Lepp has also brought his own fresh evidence
    application. In his application, he seeks to adduce evidence that one of the
    parties he has sued (an employee of Aurora) was previously married to the
    Deputy Chief of the York Regional Police and that this relationship influenced
    the police to arrest him.

[10]

For the following reasons, we dismiss Auroras
    appeal with respect to the application judges refusal to declare Mr. Lepp a
    vexatious litigant and his refusal to dismiss the entire action under r. 2.1.01.
    We also dismiss both motions to adduce fresh evidence. However, we grant leave
    to appeal costs. We agree with Auroras submission that the application judge
    erred in depriving Aurora of costs on the basis that success was divided.
    Aurora achieved overall success in the court below and should have received its
    costs.

D.

ANALYSIS

(1)

Vexatious Litigant Designation  s. 140(1) of
    the
CJA

[11]

Courts have a broad discretion to control their processes
    and to make appropriate orders where vexatious proceedings have been instituted
    or proceedings have been conducted in a vexatious manner:
Peoples Trust Co.
    v. Atas
, 2019 ONCA 359, at para. 5. Section 140(1) provides a process that
    can bar a party from commencing or continuing litigation except upon obtaining
    leave of the court. Section 140(1) reads as follows:

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.

[12]

Auroras primary submission on this appeal is
    that the trial judge erred in refusing to make the s.140(1) designation by focusing
    exclusively on whether there was a tenable cause of action in Mr. Lepps
    statement of claim. That focus, Aurora argues, led the application judge to
    ignore the troubling and vexatious conduct of Mr. Lepp in other proceedings and
    to erroneously characterize the other Small Claims Court proceedings as duplicative
    of the statement of claim, when, in fact, they were different claims, unrelated
    to the claim before the application judge.

[13]

We do not accept Auroras argument for several
    reasons.

[14]

First, the application judge properly focused on
    the Statement of Claim in his written reasons because one of the essential
    aspects of Auroras argument was that Mr. Lepps action was vexatious and
    abusive. Therefore, in assessing whether Mr. Lepp had instituted a vexatious
    proceeding against Aurora under s. 140(1)(a) of the
CJA
, the
    application judge was required to examine the claim and determine whether the
    pleadings were vexatious.

[15]

Second, although the judge may have mistakenly
    referred to the Small Claims Court proceedings as duplicative of the claim
    before the court, this error is of no moment. The application judge turned his
    mind to these proceedings, at para. 44 of the reasons, and noted that Mr.
    Lepp agreed that they should be dismissed. Whether the claims related to
    different matters or the same matter is irrelevant. After securing an
    undertaking that Mr. Lepp would abandon those proceedings, the application
    judge noted that Mr. Lepp would only have one claim left against Aurora in the
    Superior Court. Indeed, the application judge imposed a condition on Mr. Lepp
    that his proceeding could not continue in the Superior Court until he fulfilled
    his undertaking that the actions in the Small Claims Court would be disposed of
    by way of a dismissal order and that any costs awarded in that court against
    him shall be paid prior to his continuing with the action.

[16]

Finally, contrary to Auroras submission, the
    application judge did not ignore Mr. Lepps conduct in the proceeding. The
    application judge noted that Mr. Lepp had conducted himself in a troubling
    matter and indicated that this type of conduct would not be tolerated by the
    court.

[17]

Rather than designating Mr. Lepp a vexatious
    litigant under s. 140(1) of the
CJA
, the application judge concluded
    that aggressive case management of the proceeding would achieve the most
    expeditious, just, and least expensive determination of the merits of the
    litigation. He explicitly stated his intention to ensure that Mr. Lepp
    conducted himself throughout the ongoing litigation in a manner that is
    consistent with how civil litigation should be conducted. We see no basis to
    interfere with his decision.

(2)

Rule 2.1.01 Motion

[18]

Having dismissed Auroras application under s. 140(1)
    to designate Mr. Lepp as a vexatious litigant, we also see no basis to
    interfere with the decision to permit Mr. Lepps action to proceed, albeit in a
    streamlined form. Aurora sought to terminate the entire action by resorting to
    r. 2.1.01, on the basis that the entire claim was frivolous, vexatious, or an
    abuse of process.

[19]

This court has held that the use of r. 2.1 is
    not for close calls and should be limited to the clearest of cases where the
    abusive nature of the proceeding is apparent on the face of the pleading and
    there is a basis in the pleadings to support the resort to the attenuated
    process:
Scaduto v. The Law Society of Upper Canada
, 2015 ONCA 733,
    343 O.A.C. 87, at paras. 7-9, leave to appeal refused, [2015] S.C.C.A. No. 488.
    This court has also stressed that judges should be cautious about allowing
    parties to have recourse to r. 2.1, except where it is plain and obvious on
    the face of the pleading that the action is frivolous, vexatious or an abuse
    of process:
Khan v. Law Society of Ontario
, 2020 ONCA 320, at para. 15.

[20]

The application judge carefully examined Mr.
    Lepps claim. He recognized that although some of the allegations and pleadings
    were outrageous and should be struck, there were pleadings with respect to the
    torts of false arrest, false imprisonment, and misfeasance in public office
    that a court could recognize as legitimate, even if Mr. Lepps conduct was
    troubling. In our view, the application judge properly took a cautious approach
    and we see no error in his decision to permit Mr. Lepps action to proceed to
    the extent he did.

(3)

Reasonable Apprehension of Bias

[21]

Aurora claims that the application judge
    displayed a reasonable apprehension of bias by refusing to designate Mr. Lepp as
    a vexatious litigant and not awarding Aurora costs. We reject this submission
    as devoid of merit. Allegations of judicial bias should not be made lightly.
    The application judge, like all judges, benefits from a strong presumption of
    judicial fairness, impartiality, and integrity that is not easily displaced:
Neufeld
    v. Neufeld
, 2020 ONCA 395, citing
R. v. S.(R.D.)
, [1997] 3
    S.C.R. 484, at paras. 31-32. There is nothing in the record that can be seen as
    evidence of prejudgment or bias on his part.

(4)

Costs

[22]

In his written reasons, the application judge
    encouraged the parties to resolve the issues of costs given what some might
    perceive as a measure of divided success. The parties could not agree, and they
    filed submissions.

[23]

After reviewing the costs submissions, the
    application judge subsequently released a very brief endorsement. In that
    endorsement, the application judge reiterated that success was divided, and he
    awarded no costs to either party.

[24]

With respect, the application judge erred in denying
    Aurora costs on the basis that success was divided. Although Mr. Lepps action
    was permitted to proceed and he was not declared a vexatious litigant, the
    application judge disregarded Auroras overall success: see
Wesbell Networks
    Inc. v. Bell Canada,
2015 ONCA 33, at para. 21. The practical effect of
    the application judges decision is that Mr. Lepps claim has been trimmed down
    considerably and there is a condition that restricts him from initiating any
    further motion, action, or proceeding against Aurora, its elected officials,
    employees, former employees, or legal counsel, without first obtaining leave of
    this court. Although it did not obtain the designation it sought under s. 140(1),
    Aurora was, nevertheless, the more successful party because it obtained
    aggressive case management of a pared-down claim as well as an order restricting
    further litigation. Therefore, Aurora was entitled to its costs of the application.

[25]

We will now consider the appropriate scale of
    costs. In its costs submissions, Aurora had requested full indemnity costs in
    the amount of $30,668.07. Aurora argued that Mr. Lepps conduct was so
    reprehensible and outrageous that it justified a departure from the general rule
    that partial indemnity costs are awarded to the successful party. We disagree. We
    see no basis to depart from the general rule. Although Aurora had greater
    success given the orders obtained, we note that the application judge did not
    ultimately grant the s. 140(1) designation or the r. 2.1.01 motion in its
    entirety.

[26]

Having reviewed the costs outlines and the
    factors set out in r. 57 of the
Rules
, we fix the costs below at
    $15,000, inclusive of fees, disbursements, and applicable taxes.

(5)

Fresh Evidence

[27]

During the hearing of this appeal, the parties
    advised the court that they had agreed not to object to the respective motions
    to adduce fresh evidence. However, the admissibility of fresh evidence is a
    matter for the panel hearing the appeal.

[28]

Under s. 134(4)(b) of the
CJA
, this
    court may, in a proper case  receive further evidence. In
Ojeikere v.
    Ojeikere
, 2018 ONCA 372, 140 O.R. (3d) 561, at para. 46, Laskin J.A. noted
    that, in civil cases, this court has used two separate tests to determine the
    admissibility of fresh evidence, although they are not materially different: (1)
    the test in
Palmer v. The Queen
, [1980] 1 S.C.R. 759 (typically used
    in criminal appeals); and (2) the test established in
Sengmueller v.
Sengmueller
(1994), 17 O.R. (3d) 208 (C.A.).

[29]

The evidence proposed by both parties does not
    meet either test and we are not persuaded that the proposed evidence from
    either party should be received. Therefore, both motions to introduce fresh
    evidence are dismissed.

[30]

Auroras motion to adduce fresh evidence relates
    to events that occurred after the hearing of the application and motion below.
    The fresh evidence consists of an affidavit that summarizes court proceedings
    and events that portray Mr. Lepp in a negative light. For example, it appears
    that Mr. Lepp filed a motion against Aurora, contrary to the order of the
    application judge, because legal counsel for Aurora did not pass along his messages
    to employees. The fresh evidence also reveals that the application judge has
    subsequently found Mr. Lepp in contempt for violating a condition prohibiting
    him from contacting the Superior Court until the resolution of this appeal.

[31]

Given the nature of the fresh evidence, we are
    not persuaded that this proposed evidence would have affected the result (
Palmer
,
    at p. 775) or would likely be conclusive of an issue in the appeal (
Sengmueller
,

at
    pp. 210-11
). As we have noted above, the application judge was
    clearly alive to Mr. Lepps troubling conduct and his tendency to abuse the
    court process. The application judge attempted to achieve an appropriate
    balance at controlling Mr. Lepps conduct and permitting him access to justice
    by allowing a streamlined version of his claim to proceed.

[32]

The fresh evidence would not have changed his
    approach.

[33]

We also dismiss Mr. Lepps motion to have the
    panel consider fresh evidence that he has discovered. Specifically, that one of
    Auroras employees may have been married to the Deputy Chief of the York
    Regional Police and that this relationship influenced the police to arrest him.
    The evidence is not relevant or germane to the issues that the application judge
    had to consider.

E.

DISPOSITION

[34]

Claims relating to vexatious litigants are not
    easy to resolve. In our view, the application judge struck the appropriate
    balance. Auroras appeal in relation to the s. 140(1) application and r. 2.1.01
    motion is dismissed. We grant Aurora leave to appeal the decision on costs, and
    Aurora is entitled to its costs below on a partial indemnity basis. We fix
    those costs at $15,000, inclusive of fees, disbursements, and applicable taxes.

[35]

The parties also made submissions as to costs of
    this appeal. Aurora claims $5,000 for costs on the appeal and Mr. Lepp claims
    $10,000. In our view, success is divided. Mr. Lepp is successful on the
    substantive appeal. However, Aurora has succeeded on its costs appeal.
    Therefore, we award no costs for the appeal.

[36]

Before leaving this matter, we encourage Mr.
    Lepp to focus his attention on the claim that is before the court in Newmarket.
    As we have noted, the application judge imposed a number of conditions on Mr.
    Lepp to ensure that the action moves forward in an orderly fashion. Mr. Lepp
    would be well advised to take advantage of the application judges decision to
    case manage this proceeding and to ensure that the matter proceeds to finality.

Grant
    Huscroft J.A.

B.
    Zarnett J.A.

S. Coroza
    J.A.


