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Abuse of Process - Civil Court Delay. Storoszko & Associates v. 1489767 Ontario Limited
In Storoszko & Associates v. 1489767 Ontario Limited (Ont CA, 2024) the Court of Appeal considered an appellate motion to dismiss an appeal, such appeal being brought against dismissed R59.06 set aside motion, which was in turn moved to vary a (default) mortgage action.
Here, the court cites the making of a 'procedural morass' (and delay) as factors in finding an abuse of process:[5] However, this court will not permit its process to be used and abused as an instrument for prolonging a procedural morass. We asked counsel to address whether the appeal should be summarily dismissed as an abuse of this court’s process. Counsel for Mr. Hughes argued, among other things, that the bankruptcy court sanctioned this process and therefore it cannot be an abuse of process. We do not accept his arguments.
[6] The context is notable. Sitting as a bankruptcy court judge on a 9:30 a.m. appointment on May 3, 2021, Patillo J. gave this direction: “Adjourned to a date to be set by counsel for scheduling following completion of a motion that is set to be heard in Brampton on June 22/21.” The motion Patillo J. was referring to was brought almost three years after Mr. Hughes was initially noted in default and led to the order under appeal. The motion judge found that Mr. Hughes provided no explanation for this lengthy delay and dismissed the motion in part on that basis. Mr. Hughes now seeks to delay further by appealing that order instead of addressing the matter in bankruptcy court. The delay resulting from these machinations has been considerable and does no credit to the civil justice system.
[7] In addition to the delay, this appeal also raises concerns of prejudice to Storoszko and judicial economy. The motion judge’s findings on these points in his discussion of r. 19.08 are pertinent. On the issue of prejudice, the motion judge found that allowing the motion to vary the judgment would prejudice Storoszko because it would be forced to undertake two procedures in the same underlying dispute – the r. 19.08 motion and then the bankruptcy proceeding. He also found that sanctioning duplicative processes would negatively affect the integrity of the administration of justice. We agree.
[8] Even if Mr. Hughes is completely successful in his challenges to the amounts charged as shortfalls in the mortgage action, we understand that his liabilities will still exceed his assets and a date in bankruptcy court seems inevitable. On that basis, the proper venue for addressing a dispute about the final debt is the bankruptcy court, where Mr. Hughes will have the ability to have his challenges addressed. An appeal will simply add cost, complexity, and delay.
[9] To repeat for emphasis, this court will not permit its process to be used and abused as an instrument for prolonging a procedural morass. As this court explained in Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, at para 27, “Although a statutory court, this court has implicit powers that derive from its power to control its own process”: citing R. v. Cunningham, 2010 SCC 10, [2010] 1 S.C.R. 331, at para. 19; Marché D’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, 87 O.R. (3d) 660, at para. 24; and R. v. Church of Scientology (1986), 1986 CanLII 4633 (ON CA), 25 C.C.C. (3d) 149 (Ont. C.A.), at pp. 150-151. The court’s powers extend to “all powers that are reasonably necessary to accomplish its mandate” or, stated differently, “the powers necessary to perform its intended functions”: R. v. 974649 Ontario Inc., 2001 SCC 81, [2001] 3 S.C.R. 575, at para. 70.
[10] We dismiss the appeal summarily as an abuse of this court’s process, without prejudice to Mr. Hughes’ right to contest before the bankruptcy court the amounts owing under the mortgage that gave rise to the judgment under appeal. . 1734934 Ontario Inc. v. Tortoise Restaurant Group Inc.
In 1734934 Ontario Inc. v. Tortoise Restaurant Group Inc. (Ont CA, 2022) the Court of Appeal heard an appeal of a Superior Court motion judge, which in turn had set aside a master's procedural order to add a party and amend a Claim. The progress of the case through the court was characterized as "nothing short of disgraceful", and - apparently due to this - the appealed rulings were denied on 'abuse of process' grounds. Reliance on 'abuse of process' seems to have been used by the two appeal courts courts due to (the otherwise generosity of) R26.01 ["On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment."].
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