Big Bear Hills Inc. v. Bennett Jones Alberta Limited Liability Partnership, 2010 ABQB 764

Court of Queen ’ s Bench of Alberta Citation: Big Bear Hills Inc. v. Bennett Jones Alberta Limited Liability Partnership, 2010 ABQB 764 Date: 20101208 Docket: 1001 04991 Registry: Calgary Between: Big Bear Hills Inc. and Leonard James Chomistek Plaintiffs (Respondents) - and - Bennett Jones Alberta Limited Liability Partnership, John Francis Cordeau, Michael Patrick Theroux, Walker Welsh Macleod, John Scott Ladd Bodie, Andrew Peter Wilson and Justin Roy Lambert Defendants (Applicants) _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.P.

Marceau _______________________________________________________ Index paragraph number I. Introduction 1 II. Background 4

III. The Test 8 IV. Nature of the Actions 12 V. Analysis of Each Cause of Action and Conclusion on Each 13 1. The Tort of Defamation, Both Libel and Slander 13 (

a) Is it plain and obvious that the action for defamation cannot succeed? 22 2. The Tort of Conspiracy to Commit the Tort of Unlawful Interference With the Contractual and Commercial Interests of BBH and Chomistek 26 (

a) Is it plain and obvious that the action for conspiracy cannot succeed? 36 Question #1: Is there some evidence that the Defendant law firm acted lawfully or unlawfully with the predominant purpose of injuring the Plaintiffs? 39 i. The Statement of Claim by GVR 41 ii. Representations made to the DAB 43 iii. Representations made in applying for the injunction 46 iv. Police enforcement clause 52 v. Tax benefits 53 Question #2: Is there some evidence that the Defendant law firm acted unlawfully? 57 i. Letters from the Defendant law firm threatening legal action and cancelling the lease for breach of contract 59 ii.

Issuing the Statement of Claim, GVR v. BBH and Chomistek 60 iii. Obtaining the injunction 61

iv. Pursuing the action 65 v. False representations made to the DAB and the AEAB 66 (

b) Is it plain and obvious that the actions for unlawful interference and for abuse of process cannot succeed? 68 (

i) The tort of unlawful interference with the contractual and commercial interests of BBH and Chomistek 69 (ii) The tort of abuse of process by pursuing the action not for the purposes indicated in the Statement of Claim in that action but for the ulterior motive of interfering with the rights of BBH and Chomistek 70 (iii) The tort of abuse of process by making false statements to the Court in the Griffin action and at further Court proceedings, as well as at hearings of the AEAB and the DAB 70 VI. Conclusion 72 I. Introduction [ 1 ] The Defendants have applied under Rule 129 of the Alberta Rules of Court , Alta.

Reg. 390/1968, for an order striking the within action. [ 2 ] The application was heard by me on October 20, 2010. The new Alberta Rules of Court , Alta. Reg. 124/2010, came into force on November 1, 2010. Rule 15.12 of the new Rules provides: 15.12 Where these rules impose a new test, provide new criteria or provide an additional ground for making an application in an existing proceeding, these rules apply in respect of the application if the application was made but has not been heard prior to the coming into force of these rules.

Assuming, without deciding that the new rules for striking an action impose a new test or criteria, the new Rules cannot apply to this application, as it was heard before the new Rules came into effect. [ 3 ] Therefore, Rule 129 of the previous Rules applies. Rule 129 reads: 129.

(1) The court may at any stage of the proceedings order to be struck out or amended any pleading in the action, on the ground that (

a) it discloses no cause of action or defence, as the case may be, or (

b) it is scandalous, frivolous or vexatious, or (

c) it may prejudice, embarrass or delay the fair trial of the action, or (

d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly.

(2) No evidence shall be admissible on an application under clause (

a) of subrule (1).

(3) This Rule, so far as applicable, applies to an originating notice and a petition. II. Background [ 4 ] The Plaintiff corporation, Big Bear Hills Inc., (“BBH”) as lessee/operator and Griffin Valley Ranches Ltd. (“Griffin”) as owner, entered into a lease which allowed BBH to extract and sell peat moss from some of the lands owned by Griffin. There was a royalty arrangement. Griffin issued a Statement of Claim on March 2, 2007 against BBH and Leonard James Chomistek (“Chomistek”) claiming breach of the lease/royalty contract.

Griffin employed the law firm of Bennett Jones LLP (“BJ”) to issue the Statement of Claim and prosecute the action. It is alleged by the Plaintiffs in this action, BBH and its shareholder/owner (Chomistek) that the individual Defendants, except Walker Welsh MacLeod (“MacLeod”) (a student-at-law) are lawyers in the BJ firm who worked as a team in prosecuting the action against BBH and Chomistek. He referred to them as the GVR team. The action against BBH and Chomistek (0701 02977, Judicial District of Calgary) was filed on March 2, 2007 and on April 2, 2008, MacLeod appeared before Justice E.A.

Hughes of this Court and obtained an ex parte order, inter alia , restraining BBH, Chomistek, their employees, servants and agents from entering, attending on or being within 500 metres of certain properties which I understand are the properties covered by the lease contract. The order further restricts the Defendants from interfering with the operations of Griffin and restrains them from harassing or contacting Griffin or its directors.

There was also a police enforcement clause. [ 5 ] Subsequent to this order, lawyers or students from BJ represented Griffin in dealing with reclamation of the peat mine site before quasi-judicial bodies, being the Development Appeal Board of the Municipal District of Rocky View No. 44 (the “DAB”) and the Alberta Environmental Appeal Board (the “AEAB”). [ 6 ] Verbal representations made by Chomistek and addressed in the main by a lengthy affidavit sworn by Chomistek lead me to conclude that the action by Griffin against BBH and Chomistek has not gone to trial and has not been resolved.

After being served with the Statement of Claim, Chomistek and BBH retained a lawyer who communicated with BJ but on the day before the ex parte order was

obtained, that law firm advised BJ that it no longer acted for BBH and Chomistek. Since then, Chomistek has represented himself and BBH in the Griffin action and this action was filed by Chomistek in his personal capacity and as a representative of BBH. [ 7 ] The motion to dismiss this action was filed on September 22, 2010. On September 29, 2010, Chomistek issued a Notice of Motion in this action seeking to adjourn the motion to strike. On the same day, Chomistek filed a Notice of Motion seeking the appointment of a case manager.

On October 5, 2010, Chomistek issued a Notice of Motion seeking an order consolidating both actions and a declaration that the individual Defendants are in civil contempt. On October 10, 2010, Madam Justice Kent of this Court ordered that the motion to strike be adjourned for a special application on October 20, 2010 and on that day I permitted Chomistek to file a lengthy affidavit and to argue that the action should not be struck based on his pleadings and the facts alleged in his affidavit. III.

The Test [ 8 ] The principles governing an application to strike for failure to disclose a cause of action have been set out in various authorities. First, the Court must assume the allegations of fact made by the Plaintiff are true. Having done that, the Court must then examine the allegations of fact to determine whether a cause of action exists: Tottrup v. Lund (2000), 2000 ABCA 121 (CanLII) , 186 D.L.R. (4 th ) 226 at paragraphs. 8 and 11 , Alta. C.A. [ 9 ] Hunt v.

Carey Canada Inc. , 1990 CanLII 90 (SCC) , [1990] 2 S.C.R. 959 at paragraph 36 sets out the “plain and obvious test” for Rule 129(1)(a): Thus, the test in Canada governing the application of provisions like Rule 19(24)(

a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgment seat”.

Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff’s statement of claim be struck out under Rule 19(24)(a). [ 10 ] As set out by Moen J. in paragraphs 17-19 of Intraquest Ltd. v.

Peters , 2008 ABQB 786 , the plain and obvious rule can also be applied to any of the other sections in Rule 129 : 17 The test for striking any action under any of the paragraphs (

a) to (

d) of Rule 129 is that it is "plain and obvious" or "beyond doubt" that the action cannot succeed : Del Bianco v. 935074 Alberta Ltd., 2007 ABQB 150 (Alta. Q.B.) (at para. 8 citing Hunt v. T & N plc, 1990 CanLII 90 (SCC) , [1990] 2 S.C.R. 959 (S.C.C.) at para. 30 , and Cerny v. Canadian Industries Ltd. (1972), 1972 CanLII 976 (AB CA) , 30 D.L.R. (3d) 462 (Alta. C.A.)). The Defendants say that this test must be applied to an analysis of the Statement of Claim in light of the facts alleged in the affidavits before the Court.

The Defendants argue that allowing an action that "cannot succeed" to proceed would amount to an abuse of process : Del Bianco at para. 24 . [emphasis added] 18 The Plaintiffs agree that this is the test to be applied. 19 A law suit may be struck when it is hopeless in point of fact and beyond doubt that it is hopeless: German v. Major (1985), 1985 ABCA 176 (CanLII) , 39 Alta. L.R. (2d) 270, 62 A.R. 2 (Alta. C.A.) at para 8 ; Estrin v. Law Society (Alberta) (1995), 1995 ABCA 429 (CanLII) , 35 Alta. L.R. (3d) 153, 174 A.R. 379 (Alta. C.A.) (paras. 11-13 ). [ 11 ] Evidence is not allowed on a Rule 129(1)(

a) application, but it is allowed for applications under Rule 129(1)(b)-(d): Hunt Oil Company of Canada, Inc. v. Galleon Energy Inc. , 2010 ABQB 212 at 52 . IV. Nature of the Actions

[ 12 ] While the acts of BJ and their lawyers complained of cannot easily be characterized as distinct causes of action based on the somewhat confusing pleadings, I believe the causes of action alleged are: 1. The tort of defamation, both slander and libel. 2. The tort of conspiracy to commit the tort of unlawful interference with the contractual and commercial interests of BBH and Chomistek. Included as sub-heads under this general heading are : (

a) the tort of unlawful interference with the contractual and commercial interests of BBH and Chomistek; (

b) the tort of abuse of process by pursuing the action not for the purposes indicated in the Statement of Claim in that action but for the ulterior motive of interfering with the rights of BBH and Chomistek, and (

c) the tort of abuse of process by making false statements to the Court in the Griffin action and at further Court proceedings as well as at hearings of the AEAB and the DAB. V. Analysis of Each Cause of Action and Conclusion on Each 1. The Tort of Defamation, Both Libel and Slander [ 13 ] In the particulars of the Amended Statement of Claim at paragraphs 13 and 14, BBH and Chomistek allege: The GVR team (meaning BJ) used slanderous conduct during and after the DAB hearing.

Then there is an allegation that during this time and after “numerous phone calls took place to citizens of the Cochrane community, spreading the creation slander about fraud and corruption of the BBH as the peat company and of Chomistek’s involvement therein.” [ 14 ] It is not clear from this allegation that the phone calls were those of the BJ law firm. Obviously, what was said at the DAB hearing was an occasion of absolute privilege but if the members of the law firm then phoned individual citizens, repeating the defamatory statements, then the privilege might not apply.

I am satisfied the authorship of those telephone calls cannot be brought home to the law firm. I repeatedly asked Mr. Chomistek whether his complaints against the lawyers of defamatory statements were made outside of the legal proceedings or the quasi-legal proceedings before the DAB and the AEAB and it was clear his complaints are about defamatory statements made in pleadings or submissions (oral or written), to these judicial or quasi-judicial bodies. [ 15 ] At paragraph 3(

c) of the Amended Statement of Claim, BBH and Chomistek complain that the DAB published defamatory statements on the web. Obviously, this is not the law firm publishing statements. Then, there is an allegation at paragraph 13(c)(i): “Talking to our closest neighbour Ralph and Kathy Stachuk about Leonard. We stated we thought he shot our dog.” I do not understand who is supposed to have talked to the neighbour and whose dog may have been shot. [ 16 ] Paragraph 3(

d) commences: “On April 2, 2008 the Court of Queen’s Bench application for injunction ex parte . The Team’s statements are as follows:” “The Team” refers to the law firm’s GVR team which is the team of individuals in BJ who worked on behalf of Griffin. The allegations of falsehoods and defamatory statements allegedly made include allegations of attempting to kill Griffin’s livestock, cutting wires on Griffin’s property, and leaving derogatory voice mail messages on Griffin’s home answering machine accessible by Griffin’s young children, false allegations by Griffin to the RCMP, and falsely stating to the Court that the mining of peat

moss is governed by the M.D. of Rocky View. The list goes on, but the allegations all relate to what was said to Justice Hughes when the ex parte order was obtained on April 2, 2008. [ 17 ] Paragraph 14 of the Amended Statement of Claim alleges that on April 2, 2008 “the Court of Queen’s Bench published defamatory statements; injunction ex parte ”.

I do not see the filing of the order as publication taking the statements or the paragraphs of the order outside the occasion of absolute privilege. [ 18 ] Then in paragraph 14 the complaint is that defamatory statements are on file with the RCMP, the Alberta Environment Appeal Board and the Alberta Solicitor General Correction Services. [ 19 ] Paragraph 15 of the Amended Statement of Claim commences: “15.

The readers of the GVR Lawyer Team’s creation and persons who were privy to the Defendants’ slanderous statements number in the hundreds and include:” [ 20 ] There follows the names of many persons but nowhere is there an allegation that the GVR team published anything to these persons but rather that they were “privy” to the slanderous statements. [ 21 ] I conclude that at no point in the Amended Statement of Claim or in his affidavit does Chomistek attribute any written or oral representations of a defamatory nature to having been made or published by the BJ law firm except in court proceedings and quasi- judicial proceedings or in furtherance of these proceedings where the defence to the action is that the occasions are absolutely privileged. (

a) Is it plain and obvious that the action for defamation cannot succeed? [ 22 ] Raymond E. Brown in his text The Law of Defamation in Canada , Volume 2, Carswell, 1999 at 12.4 states: An absolute privilege or immunity attaches to those communications which take place during, incidental to, and in the processing and furtherance of, judicial or quasi-judicial proceedings.

No action for libel or slander will lie for words spoken or written during the ordinary course of those proceedings. - - - Where the absolute immunity prevails, it makes no difference that the words may be totally and knowingly false and spoken mala fide and with actual malice, without justification or excuse, or that they may be irrelevant to all the issues in the judicial proceeding. It does not matter why the proceedings were begun or that the judicial process is being abused, or that the tribunal itself is alleged to have acted in a manner that is discriminatory or unfair towards one of the parties.

The immunity is not confirmed to defamatory statements or actions; “it attaches to anything said or done by anybody in the course of judicial proceedings whatever the nature of the claim made in respect of such behavior or statement”. It is the occasion, not the communication, that is privileged. The privilege belongs to the occasion and attaches by reason of that setting, whether published in the context of a civil or criminal proceeding.

Once the occasion is recognized as privileged, no cause of action can be maintained for libel and slander by a plaintiff for words that are published reflecting upon his or her reputation, no matter what form that cause of action may take, except where it involves an action for malicious prosecution or abuse of process, or a prosecution for perjury or contempt proceedings. The communication is protected whether the person defamed is a party to or participant in the proceedings, or even a complete stranger to them.

If the tribunal is performing a judicial function, the absolute privilege attaches even if the defamatory statement is made in Chambers in a closed proceeding or in ex parte application. - - - [footnotes omitted] [ 23 ] This Court has affirmed the principle that statements made in furtherance of legal proceedings are absolutely privileged: Simons v. Carr & Co. (1996), 1996 CanLII 10417 (AB KB) , 189 A.R. 87 (Q.B.) . At paragraph 40, Nash J. ruled:

In conclusion, I am satisfied beyond a reasonable doubt, that there has been no cause of action disclosed. Even assuming that the words are defamatory and have been published, they are protected by absolute privilege. [ 24 ] Finally, our Court of Appeal has clearly affirmed this absolute privilege in Prefontaine v. Veale , 2003 ABCA 367 at paragraph 10 : [10] The concept of absolute privilege in the context of judicial proceedings is well accepted in Canadian law.

An absolute privilege will attach to communications which take place during, incidental to, and in the processing and furtherance of judicial or quasi-judicial proceedings . When this immunity prevails, it makes no difference that the communications were false and spoken mala fides and with malice. It is the occasion, not the communication, that is privileged. Poland v. Maitland (1994), 27 C.P.C. (3d) 334 at 337 (N.W.T.S.C.) ; see also Reagan v. Guardian Life Ins. Co., 140 Tex. 105, 166 S.W. 2d 909 at 913 (1942).

Once the occasion is recognized, no cause of action for slander can be maintained except where it takes the form of an action for malicious prosecution or abuse of process : R.E.

Brown, The Law of Defamation in Canada, 2nd ed. (Scarborough: Carswell, 1999) at p. 12-31. [Emphasis in original] The reports against the appellant were made “in the context of the ongoing litigation” and so “the communication with the authorities enjoy[ed] absolute privilege as being incidental to, and in the furtherance of, judicial proceedings” (paragraph 12). [ 25 ] I conclude that all of the representations, whether oral or written, of the lawyers for Griffin were made in furtherance of either judicial proceedings or quasi-judicial proceedings, i.e. the Court of Queen’s Bench, the Alberta Court of Appeal, the DAB, and the AEAB.

I assume the allegations are untrue and I assume they caused harm as alleged, but they are statements which are absolutely privileged. The pleadings in defamation disclose no reasonable cause of action and will be struck under Rule 129(1)(a). 2. The Tort of Conspiracy to Commit the Tort of Unlawful Interference With the Contractual and Commercial Interests of BBH and Chomistek [ 26 ] The tort of unlawful interference with the contractual and commercial interests of a person, including a corporation as described by Lewis W. Klar et al., is set out at paragraphs 81 and 82 of Polar Ice Express Inc. v.

Arctic Glacier Inc. , 2007 ABQB 717 , affirmed 2009 ABCA 20 . [81] The tort of unlawful interference with economic interests is defined by Lewis N.

Klar et al. in Remedies in Tort (Calgary: Carswell Legal Publication (Western), 1987) at pp. 24-60.6, to 24-60.7, para. 47 as: “There exists a tort of uncertain ambit which consists of one person using unlawful means with the object and effect of causing damage to another.” Characterized by some as the “wider principle” of which the nominate torts of inducing breach of contract, interference with employment relations, intimidation and conspiracy are “but instances” and by others as “no more than a rationalization of the specific cases”, this action’s exact place in and effect on the general field of economic torts is uncertain: “Why have specific nominate torts when you can lump practically all of the factual situations into a tort of unlawfully interfering with economic interest?

Is that, after all, not the gist of every action in the area of economic torts?” [citation omitted.] [82] To establish this tort, the plaintiff must prove that: (1) the defendant had an intention to injure it; (2) the means employed by the defendant to accomplish this were unlawful; and (3) the plaintiff suffered economic loss or a related injury as a result: Remedies in Tort at p. 24-60.9, para. 50. [ 27 ] The tort of conspiracy to interfere requires, in addition to the elements above, the additional element of agreement between at least A and B to do so.

In this case, Chomistek alleges the agreement is among the named lawyers (and student-at-law) at the BJ law firm. At page 25 of Hunt v. Carey Canada Inc. , supra , Wilson J. wrote: In the last decade the tort of conspiracy has received a considerable amount of attention. In England, for example, both the House of Lords and the Court of Appeal have recently had occasion to review the tort in some detail. These decisions have made clear that the tort

of conspiracy may apply in at least two situations: (

i) where the defendants agree to use lawful means to harm the plaintiff and (ii) where the defendants use unlawful means to harm the plaintiff. The law with respect to the first situation is not in doubt: If A and B agree to commit acts which would be lawful if done by either of them alone but which are done in combination and cause damage to C, no tortious conspiracy actionable at the suit of C exists unless the predominant purpose of A and B in making the agreement and carrying out the acts which cause the damage is to injure C and not to protect the lawful commercial interests of A and B .

This proposition is established by five decisions at the highest level: Mogul Steamship Co. Ltd. v. McGregor, Gow & Co. [1892] A.C. 25 ; Quinn v. Leathem , [1901] A.C. 495 ; Sorrell v. Smith , [1925] A.C. 700 ; Crofter Hand Woven Harris Tweed Co. Ltd. v. Veitch , [1942] A.C. 435 and Lonrho Ltd. v. Shell Petroleum Co. Ltd. (No. 2) , [1982] A.C. 173 . [See: Metall und Rohstoff A.G. v.

Donaldson , Lufkin & Jenrette Inc. , [1989] 3 W.L.R. 563 , at p. 593, per Slade L.J.] [Emphasis added.] Courts in England have, however, encountered greater difficulty in stating with precision the applicable principles governing situations in which unlawful means are employed. In particular, they have struggled to decide whether the plaintiff must establish, not just that the defendants used means that were unlawful and resulted in harm to the plaintiff, but also that the defendants actually intended to harm the plaintiff. [ 28 ] After considering Lonrho Ltd. v. Shell Petroleum Co.

Ltd. (No. 2) , [1982] A.C. 173 (H.L.) , Wilson J. concluded on the law of England: Thus, regardless of whether the alleged conspirators used lawful or unlawful means, the law in England required the plaintiff to establish that the defendants entered into the agreement with the predominant purpose of injuring the plaintiff. [ 29 ] In describing the difference between Canadian law and the English Courts, Wilson J. quoted with approval from Fridman, The Law of Torts in Canada , Vol. 2 (2 nd ed.) (Toronto: Carswell, 2002) at page 265: The difference between the English and Canadian formulations of the tort of conspiracy lies in the way the intent of the defendants is expressed.

The language of Lord Diplock seems to indicate that the necessary intent should be actual. That of Estey J. suggests that it may be possible for a court to infer an intent to injure from the circumstances even if the defendants deny they acted with any such intent. [ 30 ] Then, to summarize the law in Canada, Wilson J. approved the observations of Fridman at pages 265 and 266: In modern Canada, therefore, conspiracy as a tort comprehends three distinct situations.

In the first place there will be an actionable conspiracy if two or more persons agree and combine to act unlawfully with the predominating purpose of injuring the plaintiff. Second, there will be an actionable conspiracy if the defendants combine to act lawfully with the predominating purpose of injuring the plaintiff.

Third, an actionable conspiracy will exist if defendants combine to act unlawfully, their conduct is directed towards the plaintiff (or the plaintiff and others), and the likelihood of injury to the plaintiff is known to the defendants or should have been known to them in the circumstances. [ 31 ] It appears that Chomistek was well aware of the Hunt v.

Carey case when he framed the pleading, stating at paragraph 9 of the Statement of Claim: In or about 2007 the said individual Defendants Theroux, Macleod and Wilson worked as a team, Theroux being the principal and guiding mind of the Team, which they called themselves the “GVR Lawyer Team” (the “GVR Lawyer Team”) and that team maliciously conspired to, with the predominant intent and purpose, to damage the reputation of the Plaintiffs to shut down the activities of the BBH peat site and to unlawfully interfere with and to harm the personal and business interests of the Plaintiffs in the Peat Farming Community, in Cochrane, Alberta and elsewhere, through repeated acts of defamation, disparagement and assault as set forth below. [ 32 ] The allegation in the Statement of Claim that the lawyers of the BJ law firm conspired, with the predominant intent and

[ 32 ] The allegation in the Statement of Claim that the lawyers of the BJ law firm conspired, with the predominant intent and purpose to damage the reputation of the Plaintiffs, to shut down the activities of the BBh peat site and to harm the personal and business interests of the Plaintiffs in the peat farming community is an allegation which, if proved, would result in a successful outcome at trial for the Plaintiffs. In other words, this allegation does plead a cause of action. While there is no allegation that the conspiracy is to act unlawfully, this requirement is not necessary.

At pages 265 and 266, Fridman ( supra ) states: “Secondly there will be an actionable conspiracy if the defendants combine to act lawfully with the predominating purpose of injuring the Plaintiff.” [ 33 ] To strike an action under Rule 129(1)(a), the Court must assume that the allegations in the statement of claim are true, and then consider whether it is plain and obvious that the action cannot succeed. In the present case, on a prima facie level, the allegations in the Statement of Claim meet the test for conspiracy, so it may not be plain and obvious that the action must fail under Rule 129(1)(a).

However, when considering whether the action should be struck under Rule 129(1)(

b) or (d), the Court may consider evidence that is presented to determine whether it is plain and obvious that the action cannot succeed, in which case it should be struck as frivolous, vexatious, and an abuse of process. [ 34 ] In deciding whether it is plain and obvious that the action must fail, I must not evaluate the evidence, rather I must decide whether there is any evidence which could support the Plaintiffs’ allegations: Pauk v. Catholic Parish of Saint Nykolaja of Greek Ruthenian Rite to Rome , 2008 ABCA 16 at paragraphs 4-6 . [ 35 ] To prove this aspect of the claim, the Plaintiffs must prove either: (

a) a conspiracy (combining to act), (

b) by lawful means, and (

c) with the predominant purpose of injuring the Plaintiffs; or: (

a) a conspiracy – (combining to act), (

b) to act unlawfully, and (

c) with the predominating purpose of injuring the Plaintiffs; or: (

a) a conspiracy – (combining to act), (

b) to act unlawfully, (

c) their conduct is directed toward the Plaintiffs, and (

d) the likelihood of injury to the Plaintiffs is or should have been known to the Defendants

(

a) Is it plain and obvious that the action for conspiracy cannot succeed? [ 36 ] The fact that more than one lawyer was involved in representing the interests of GVR in issuing a Statement of Claim, in representing GVR before the municipal DAB and before the AEAB leads to an inference that they “combined” so there is some evidence of a conspiracy. [ 37 ] There is a difference in what must be proved to establish the tort when the conspiracy is by lawful, as opposed to unlawful, means. In the case of “lawful means”, BBH and Chomistek must prove that the “predominating purpose was to injure the Plaintiffs” (i.e.

BBH and Chomistek). If it is by unlawful means, then the tort is established if “the predominating purpose was to injure the Plaintiffs” or “their conduct is directed towards the Plaintiffs and the likelihood of injury to the Plaintiffs is or should have been known to the Defendants”. It is my opinion that the issuance of the Statement of Claim, obtaining the injunction and pursuing the action for damages are acts directed at the Defendants and it is obvious that the Defendant law firm knew such actions could injure the Plaintiffs.

This leaves two questions to ask and if either is answered in the affirmative, then the application to strike the entire Statement of Claim must fail because there is some evidence of the tort of conspiracy: Question #1: Is there some evidence that the Defendant law firm acted lawfully or unlawfully with the predominant purpose of injuring the Plaintiffs? Question #2: Is there some evidence that the Defendant law firm acted unlawfully? [ 38 ] I will deal with each of the questions.

Question #1 : Is there some evidence that the Defendant law firm acted lawfully or unlawfully with the predominant purpose of injuring the Plaintiffs? [ 39 ] The main actions of the Defendant law firm are commencing the action in court, obtaining the injunction, and prosecuting the action, as well as dealing with the municipal DAB and the AEAB on the question principally of ensuring their client GVR reclaimed the mining site to the satisfaction of these Boards. [ 40 ] I will deal with the arguments of the Plaintiffs and Chomistek’s affidavit to determine whether there was some evidence that the Defendant law firm’s main purpose was not to pursue GVR’s legitimate claims for relief, but rather its main purpose was to injure the Plaintiffs. i.

The Statement of Claim by GVR [ 41 ] The Statement of Claim by GVR against BBH and Chomistek on its face is simply an action for breach of contract and the prayer for relief seeks damages against BBH, including an accounting. Against Chomistek alone, the prayer for relief is for damages for unlawful interference with GVR’s economic and contractual relations and damages for the taking of the GVR tools. [ 42 ] On its face, the GVR Statement of Claim alleges facts which, if proved, would support the relief claimed. The allegations cannot be characterized as frivolous or vexatious.

The Statement of Claim is not evidence that the Defendant law firm acted for any purpose other than to pursue GVR’s legitimate interests. It is not evidence of an ulterior predominant purpose of injuring the Plaintiffs. ii. Representations made to the DAB

[ 43 ] The Plaintiffs and Chomistek allege that the Defendant law firm made false statements to the DAB. Paragraph 13 of their Amended Statement of Claim in this action commences with the words: 13. The particulars of the creations of the GVR Lawyer Teams were used as slanderous conduct include but are not limited to the following. [ 44 ] The subparagraphs a),

b) and

c) relate to occurrences at the municipal DAB hearing of February 27, 2008 and other occurrences “during this time period and after”. Paragraph d) relates to the application for the injunction on April 2, 2008. I will deal with a),

b) and

c) first, then with

d) in the next section. Those paragraphs read as follows:

a) In or about February 27, 2008, at the Municipal District of Rockyview Number 44 (the “MD”) during and after the Development Appeal Board (“DAB”) hearing;

b) Further, during this time period and after, numerous phone calls took place to citizens of the Cochrane Community spreading the creation slander about the fraud and corruption of the BBH as a peat company and of Chomistek involvement therein;

c) After February 27, 2008 the DAB published defamatory statements on the web; (

i) Talking to our closest neighbor Ralph & Kathy Stachuck about Leonard. We stated we thought he shot out dog.

d) On April 2, 2008 the Court of Queen’s Bench application for injunction ex parte . The Team’s statements are as follows: (

i) the affidavit I had correlated yesterday; he was no longer retained in this matter; had no instructions to appear today; I attempted to contact Mr.

Larson as well; was not yet in the office; We’ve actually we appeared; the motion was served yesterday; interference by the defendants with my client’s; property rights and an interference with their business operation; interference includes attempting to kill my client’s livestock; that interference includes cutting wire lines on my client’s property; it includes leaving derogatory voice mail messages on my client’s home answering machine that are accessible to my client’s young children; ultimately involves making false accusations about my clients to the R.C.M.P. all of that is documented in the affidavit; good news for you, My Lady, at least today, our notice of motion was not served until yesterday; they have some fear for their personal safety and for the safety of their property; Mr.

McKenzie telling me that he was no longer retained; I can’t contact Mr. Chomistek directly while he’s still on the record; Mr. Griffin deposes to some of the fears, mainly relating to trespass, conversion and nuisance, which comprise over 2500 acres of property, it’s a significant body of property, companies own the property being joined adjoin one another, It’s like a quilt almost; There’s been no discoveries; no My Lady, and the rule number again in regards to seeking to add parties? Mr.

Macleod: The rule is ‘132’ My Lady, “...for the purpose of determining the real question in issue between the parties.”; The mining of peat moss is governed by the Municipal District of Rocky View, Griffin Valley secured a permit to allow for the mining of those peat moss reserves, was the owner of that property, a failure to provide documentation, wrongful use of my client’s property and equipment and mining of peat; Mr.

Chomistek personally interfered with my client’s business; correspondence from my office advising that the lease agreement was terminated; advised to stay off my client’s property, Big Bear Hills simply disregarded that correspondence; see a long skinny building on that separate parcel, and there were multiple incidences relating to that barn, other property and ultimately extends to the whole ranching operation’ As I said at the outset, My Lady, the mining of peat is regulated by the Municipal District of Rockyview, reclamation and restoration of the property would be completed by December 31 of 2007, he continues to mine peat, my client received correspondence from the Municipal District indicating that the mining of peat was to cease by October 15 th and the reclamation was to be completed by December 31, the appeal board has in fact imposed specific obligations relating to that, client is now obligated to effect the reclamation, in this - this was after the issuance of the S.D.A.B. appeal board order, already stated publically his intention, about their fear for their safety, detained by a police officer, and subsequently arrested and brought before a justice of the Court of Queen’s Bench to show cause why he should not be further detained, in terms of restraining orders. [ 45 ] I have read the 226-paragraph affidavit of Chomistek and I am unable to find that the Defendant law firm made representations to the municipal DAB which were to their knowledge false or not in accordance with what their client had told them.

Chomistek claims the representations were false. This dispute on the facts is part of the ongoing litigation between GVR against BBH and Chomistek.

iii. Representations made in applying for the injunction [ 46 ] Paragraph 13(

d) is a resumé of the transcript of what was said to the Justice who granted the ex parte injunction order of April 2, 2008. At that hearing many statements were made by the student-at-law, MacLeod, which Chomistek says are false. [ 47 ] At page 3, lines 5 to 18 of the transcript, MacLeod says to the Court: MR. MacLEOD: The motion was served yesterday, My Lady. In a nutshell, there’s three reasons why I’m seeking an abridgment of time.

The first reason is that there’s been an ongoing interference by the defendants with my client’s property rights and an interference with their business operation, Griffin Valley Ranch.

That interference includes attempting to kill my client’s livestock; that interference includes cutting wire lines on my client’s property; it includes leaving derogatory voice mail message on my client’s home answering machine that are accessible by my client’s young children; and it ultimately involves making false accusations about my clients to the R.C.M.P. [ 48 ] Except for the statements made by MacLeod about BBH’s lawyer not being retained and the effort to contact another lawyer, Mr.

Larson, who might be acting for BBH, the statements made by MacLeod to the Court were said by MacLeod to be documented in the affidavit of Griffin. [ 49 ] In his own affidavit, Chomistek does not dispute that these allegations were in the affidavit of Griffin. He either denies the allegations or puts a different spin on them.

What is absent is any real allegation that the statements were made without an honest belief that the facts were true. [ 50 ] Chomistek also makes a specific allegation that when MacLeod told the hearing Justice that “The mining of peat moss is governed by the Municipal District of Rockyview”, he was misleading the Court because it was regulated by the Environmental Protection Act .

However, it appears from the affidavit of Chomistek that in fact both the M.D. and authorities acting under the Environmental Protection Act , such as inspectors of the AEAB, have roles to play in regulating the mining of peat moss. [ 51 ] Chomistek in his affidavit quotes at length from the Code of Professional Conduct of the Law Society of Alberta (“the Code ”). He alleges in his affidavit that members of the Defendant law firm failed to be candid with the Court and failed to inform the Court of all material facts and the law.

If Chomistek is able to demonstrate that the facts represented were known to the law firm to be false or even that the statements were made very negligently, this might be evidence which could lead to an inference of impropriety on the part of the law firm. However, with respect to facts, it is clear to me that the facts stated by the lawyers were the facts as they appeared to know them. Therefore, there is no evidence that the lawyers were acting with the predominant purpose of injuring the Plaintiffs. iv.

Police enforcement clause [ 52 ] Chomistek refers to the fact there is a police enforcement clause in the order of April 2, 2008. This is quite standard where there are allegations of threats of personal harm and damage to property. No inference can be made that in asking for a police enforcement clause the Defendant law firm was acting in any way except in the legitimate interests of their client without any particular colourable intent to injure the Plaintiffs. v. Tax benefits [ 53 ] Chomistek’s affidavit goes on at length to try to establish that for tax purposes GVR wished to roll the property subject to the

BBH lease into a trust. In the affidavit, he alleges that to do so required that the property be free of the lease encumbrance which seems to be a caveat. The reasoning then is that since the Defendant law firm also represents GVR in this tax planning, the cancellation of the lease was done not because of the alleged breaches of the lease contract by BBH, but rather for tax planning purposes. Chomistek notes that to prove this he needs “more evidence”. I find the suggestion that a tax rollover would require cancellation of the lease to be a somewhat farfetched concept.

Given the degree of animosity between the parties and the bitter dispute over the lease, I do not find that this allegation assists the Plaintiffs in proving that the Defendant law firm acted for GVR with a predominate purpose of injuring the Plaintiffs. [ 54 ] I conclude that whether the Defendant law firm is acting lawfully or unlawfully, there is no credible evidence that the Defendant law firm or its individual member Defendants acted contrary to the interests of the Plaintiffs with the predominant purpose of injuring the Plaintiffs.

It seems to me that Chomistek has not appreciated the distinction between the role of a lawyer and his client. He seems to hold the view that if a lawyer relies on false facts in the client’s affidavit, then an inference of impropriety can be made against the lawyer. In fact, it is only inappropriate conduct if the lawyer knows of the falsehood and relies upon the falsehood in the court proceedings. This constitutes a breach of the lawyer’s public duty and could be some evidence of an unlawful act and some evidence that could lead to the inference that the action is brought for reasons other than those pled.

Our Court of Appeal in Martel v. Andrew , 2005 ABCA 63 at paragraph 3 stated: We agree. Doubtless a lawyer owes a duty to the court not to offer into evidence an affidavit that he knows to be false or misleading. However, that does not mean that a lawyer must believe what his client swears to; still less does it mean that a lawyer has a duty to investigate to determine whether or not what his client states to be true is, in fact, true or false. Further, the duty to the court is a public duty and owed as an officer of the court to the court and not a private duty owed to the opposite side in the lawsuit.

There is ample authority that the duties that a lawyer owes to the opposing party are viewed very restrictively: German v. Major (1985), 1985 ABCA 176 (CanLII) , 62 A.R. 2 (C.A.) . There are good policy reasons for this in the adversarial system.

If it were otherwise, the conflicting duties owed by a lawyer would make the adversarial system impossible. [ 55 ] Chomistek’s affidavit rambles on about all of the falsehoods the law firm has relied upon in pleadings, Griffin’s affidavit, and the appearances before the Boards, but nowhere is there evidence that any member of the BJ law firm knew or believed that the facts they alleged were untrue. [ 56 ] I conclude that whether the Defendant law firm is acting lawfully or unlawfully, there is no credible evidence that the Defendant law firm or its individual member Defendants acted contrary to the interests of the Plaintiffs with the predominant purpose of injuring the Plaintiffs.

That does not, however, resolve the application as if there is evidence the Defendant law firm acted unlawfully, then the application should not succeed. Question #2: Is there some evidence that the Defendant law firm acted unlawfully? [ 57 ] The pleadings ramble on, alleging conduct of the Defendant law firm ranging from obtaining the order without notice, to claiming “a cover up of a lifetime of fraudulent misrepresentation, negligent misrepresentation, breach of trust and fiduciary duty or knowing assistance or participation in the same, unjust enrichment, conspiracy, conversion,”.

It also alleges breaches of the Criminal Code , the Income Tax Act , the Business Corporations Act and the Family Relief Act . [ 58 ] When all is considered, including both the allegations in the Statement of Claim and the affidavit evidence of Chomistek, the unlawful acts which are alleged come down to this: i. Letters from the Defendant law firm threatening legal action and cancelling the lease for breach of contract, ii. Issuing the Statement of Claim, GVR v. BBH and Chomistek , iii. Obtaining the injunction,

iv. Pursuing the action, v. False representations made to the DAB and the AEAB. i. Letters from the Defendant law firm threatening legal action and cancelling the lease for breach of contract [ 59 ] There is no evidence that any of the letters written to BBH threatening legal action or cancelling the lease were written other than to assert the apparently legitimate rights of GVR. ii. Issuing the Statement of Claim, GVR v. BBH and Chomistek [ 60 ] The same is true of the issuance of the Statement of Claim.

It is noteworthy that in the affidavit used to obtain the injunction, Griffin swore to facts supporting the Statement of Claim. There is no evidence that issuing the Statement of Claim was an unlawful act. iii. Obtaining the injunction [ 61 ] Obtaining the injunction ex parte appears to be the act which most damaged the Plaintiffs because by barring the Plaintiffs from entry on the GVR lands, the Plaintiffs’ mining and removal of peat moss ceased.

The question is whether that injunction was obtained unlawfully. [ 62 ] The complaint that the injunction was obtained without notice to the Plaintiffs can only be attacked if the Court was misled. There does not seem to be any dispute that proper service was effected on the law firm that was on record, having filed a Statement of Defence. There seems to be no dispute that Mr. MacKenzie told MacLeod that he, Mr. MacKenzie, was no longer retained and would not attend court. There is no evidence that MacLeod misled the Court in saying the allegations were supported by affidavit.

I have dealt previously with the allegation that the Court was misled when MacLeod said the mining of peat moss was governed by the M.D. of Rocky View, when it was also governed by the provisions of the Environmental Protection Act . It would not have mattered to the hearing Justice that both authorities were involved.

What was important was that an authority that had jurisdiction to do so had ordered the cessation of mining and reclamation of the site and BBH was in breach of that direction. [ 63 ] What is also significant about the order is that it was regular on its face as it was granted upon the filing of an undertaking as to damages and it provided in paragraph 12: “Any party shall have leave to apply to amend, vary, or strike out the within order”. [ 64 ] If the order was improperly obtained in April 2008, the Plaintiffs in that action have had two and one-half years to have it set aside, yet Chomistek advised me in court that no application had been made to set it aside.

There is no evidence of impropriety or unlawful conduct of the Defendant law firm in obtaining the injunction. iv. Pursuing the action [ 65 ] Chomistek, in his affidavit, made reference to the transcript of examinations for discovery of Griffin but the excerpts do not provide evidence of unlawful acts on the part of the Defendant law firm. I have not been provided with any evidence that the Defendant law firm is doing anything unlawful in pursuing the claim. v. False representations made to the DAB and the AEAB [ 66 ] Finally, it is alleged that false representations were made to the DAB and the AEAB.

The Plaintiffs seem to have attended

hearings of these Boards and were even represented by counsel, at least before the DAB. That was the time to challenge the false representations. No evidence has been led that either Board found the Defendant law firm had made allegations which were proven to be false, let alone that they were false to the knowledge of the law firm. [ 67 ] In conclusion, I find there is no evidence that the Defendant law firm has acted unlawfully. (

b) Is it plain and obvious that the actions for unlawful interference and for abuse of process cannot succeed? [ 68 ] I will now deal with the sub-headings under the general heading of conspiracy as set out in paragraph 10 of this judgment: (

i) The tort of unlawful interference with the contractual and commercial interests of BBH and Chomistek [ 69 ] It follows from my findings under the heading of conspiracy that I find there is no evidence that supports an inference of “unlawful interference”. (ii) The tort of abuse of process by pursuing the action not for the purposes indicated in the Statement of Claim in that action but for the ulterior motive of interfering with the rights of BBH and Chomistek (iii) The tort of abuse of process by making false statements to the Court in the Griffin action and at further Court proceedings, as well as at hearings of the AEAB and the DAB [ 70 ] In Rocky Mountain Rail Society v.

H & D Hobby Distributing Ltd. , 27 Alta. L.R. (3d) 424 , 1995 CanLII 9029 (AB Q.B.) (oral reasons) Fruman J. (as she then was) wrote at paragraphs 13, 14 and 15 of her judgment: [13] The tort of abuse of process clearly exists in our law, but as I read the case law, most of which derives from Ontario, it is narrow in scope. The process of the court must be used for an improper purpose and there must be a definite act or threat in furtherance of such purpose. ( Atland Containers Ltd. v. Macs Corp. (1974), 1974 CanLII 864 (ON SC) , 7 O.R. (2d) 107 (H.C.) .) A definition is provided by Henry J. in Tsiopoulos v.

Commercial Union Assurance Co. (1986), 1986 CanLII 2531 (ON SC) , 57 O.R. (2d) 117 (H.C.) , at pp. 119-20 : It is well settled law that there is at law a tort known as abuse of process. This cause of action arises when the processes of law are used for an ulterior or collateral purpose. It is defined as the misusing of the process of the courts to coerce someone in some way entirely outside the ambit of the legal claim upon which the court is asked to adjudicate.

It occurs when the process of the court is used for an improper purpose and where there is a definite act or threat in furtherance of such purpose . . . [14] This is also cited with approval in Teledata Comunications Inc. v. Westburne Industrial Enterprises Ltd. (1990), 1990 CanLII 6887 (ON SC) , 71 O.R. (2d) 466 (H.C.) . At p. 469, Eberle J. states: What lies at the heart of the cause of action is

an act, or threat of

an act, outside the ambit of the action. The essence of the action

therefore is the use of legal process to gain an end which the legal process does not entitle the plaintiff to obtain. [15] At pp. 468-69, Eberle J. concludes that bringing an action, even if it is factually groundless and accompanied with wrongful motives for bringing the action, is not sufficient to constitute the tort of abuse of process.

He confirms at p. 470 that the basis on which our system of litigation operates is that: “The law allows every person to employ its process for the purpose of asserting his rights without subjecting him to any liability other than the liability to pay the costs of the proceedings if unsuccessful.” [ 71 ] I have found there is no evidence the Defendant law firm was pursuing the action for the predominant purpose of hurting the Plaintiffs. The evidence of Chomistek does not lead to the inference the legal process was used “to gain an end which the legal process does not entitle the plaintiff to obtain”.

The injunction and the damages being claimed are within the ambit of the litigation in the action by GVR against BBH and Chomistek. The actions of the law firm before the DAB and AEAB are all seeking relief or direction within the ambit of those actions. I found no evidence of the tort of abuse of process before the Courts or before the quasi-judicial tribunals. VI. Conclusion [ 72 ] The pleadings in defamation disclose no reasonable cause of action and will be struck under Rule 129(1)(a).

Further, because there is no evidence supporting any of the other alleged causes of action in the Plaintiffs’ Statement of Claim, it is plain and obvious that the action will not succeed.

Therefore, I conclude that this action is vexatious and frivolous and is also an abuse of the court process. [ 73 ] Chomistek, in argument, stated that he wished to obtain information about the tax rollover of GVR to a trust, presumably in order to argue that the action of GVR in terminating the lease and ejecting BBH and Chomistek was not brought because of a breach of contract but because GVR wanted to remove the caveat which interferes somehow with the rollover. He was met with the claim that that information was subject to solicitor/client privilege.

His view was that by suing the law firm, claiming conspiracy and abuse of process, he would be able to see the documents which he could not obtain in the GVR v. BBH action. To commence an action to assist in obtaining documents privileged in another action is an abuse of the process of the Court. [ 74 ] I am cognizant of the fact that when the defendant in an ongoing lawsuit decides to bring an action against the opposing lawyers, the plaintiff in the first action usually suffers in two ways.

First, the plaintiff’s lawyers will usually be placed in a conflict of interest and must cease to act which means that the plaintiff in that action no longer has his first choice of lawyers to represent him. Second, a new law firm is engaged at considerable expense to familiarize themselves with the action, to bring themselves up to speed.

Because of this, the Court should carefully scrutinize the evidence to determine whether even though, as here, the pleadings plead causes of action, it is plain and obvious the action cannot succeed. [ 75 ] I am satisfied that the action in this case cannot succeed. [ 76 ] Accordingly, the application is allowed and the Statement of Claim in its entirety is struck out as being frivolous, vexatious and an abuse of process. [ 77 ] The parties may speak to costs by arranging a time and date within two months. Heard on the 20 th day of October, 2010.

Dated at the City of Edmonton, Alberta, this 3rd day of December, 2010.

R.P. Marceau J.C.Q.B.A. Appearances: Leonard James Chomistek appeared on his own behalf Raymond S. Wong Field LLP for the Defendants (Applicants)