644036 Alberta Ltd. Respondent / Plaintiff - v. -, 2014 ABQB 681

Court of Queen ’ s Bench of Alberta Citation: 644036 Alberta Ltd v Morbank Financial Inc, 2014 ABQB 681 Date: 20141110 Docket: 1303 16409 Registry: Edmonton Between: 644036 Alberta Ltd. Respondent / Plaintiff - and - Morbank Financial Inc., John Tiberio, Tony Tiberio, Gail Morgan, John Morgan, 1405462 Alberta Ltd., 1364915 Alberta Ltd., and Paragon Capital Corporation Ltd. Applicants / Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice B.A. Browne _______________________________________________________ I.

Introduction [ 1 ] On Nov. 19, 2013 644036 Alberta Ltd. [“644” or the “Plaintiff”] issued a Statement of Claim against Morbank Financial Inc. [“Morbank”], John Tiberio, Tony Tiberio, Gail Morgan, John Morgan, 1405462 Alberta Ltd. [“140”], 13664915 Alberta Ltd. [“136”],

and Paragon Capital Corporation Ltd. [together: the “Defendants”], alleging that the Defendants had conspired to sell a foreclosed property owned by 644 at an artificially reduced price. [ 2 ] William Grantmyre [“Grantmyre”] at all points has represented 644 in this lawsuit [the “644 Action”]. Grantmyre is the sole director and (indirect) shareholder of 644. He is not a lawyer. [ 3 ] The Defendants deny the alleged conspiracy and fraud, and now apply to have: 1. the Plaintiff’s action struck per Alberta Rules of Court , Alta Reg 124/2010, Rule 3.68 [the “ Rules ”, or individually a “ Rule ”], or 2. for the court to order

summary judgment against the Plaintiff per Rule 7.3, and 3. for a declaration that William Grantmyre is a vexatious litigant per Judicature Act, RSA 2000, c J-2, s 23.1 and is restricted from engaging in further litigation directed to any of the Defendants. [ 4 ] In the event I do not terminate the 644 Action, the Defendants also seek a direction that 644 be represented by legal counsel per Legal Profession Act , RSA 2000, c L-8, s 106(1), and a security for cost payment into court by Grantmyre personally ( Rule 4.22). II.

Preliminary Issue – Related Pleadings [ 5 ] The Defendants seek leave to file pleadings from other related proceedings, per Rule 6.11. 644 argues these materials should be excluded; as they are an attempt at delay. I disagree with the Plaintiff, 644, and grant leave to have these materials available for the purpose of this application. [ 6 ] The 644 Action is directly based on the events that occurred during the foreclosure of land owned by 644. That, however, is not the only litigation which is relevant for this application.

Many of the same corporations and individuals who were named in the 644 foreclosure are also named in several other actions in Alberta and British Columbia. [ 7 ] These ‘related’ proceedings are relevant to place the 644 Action in its proper context. I will first review the foreclosure and its relationship to the 644 Action, then summarize relevant events and judicial conclusions in the ‘related’ actions. A. The Grande Prairie Land Foreclosure [ 8 ] The fulcrum of this dispute is the foreclosure of property [the “Land”] located in Grande Prairie. The Land was owned by 644.

In 2005, 644 mortgaged the Land to Morbank. Morbank foreclosed on the Land in 2007. Grantmyre claims the mortgage was terminated without explanation however the documentary record indicates Morbank offered to renew the financing in a letter dated Jan. 10, 2007. That offer was not accepted. [ 9 ] The foreclosure that followed was a protracted process: Feb. 2007 : the mortgage was not renewed. May 25, 2007 : Master Laycock ordered a judicial sale of the Land for $7,881,418.20. At that point the outstanding debt was $4,558,282.10. The Land was appraised as worth $5,864,957.36.

August 24, 2007 : Master Alberstat authorized sale of a portion of the Land for $1,391,846.00 but that transaction did not close. Sept. 10, 2007 : An offer of $6,522,000.00 was accepted but that transaction did not close. The deposit of $200,000.00 was forfeited to Morbank. April 1, 2008 : Morbank applied for foreclosure or possession of the Land, or a reduction in the list price. Master Hanebury ordered the Land relisted for 45 days at the new appraised value: $5,709,000.00. June 10, 2008 : Master Alberstat ordered sale of the Land for $5,131,226.00. This sale also did not close.

The $200,000.00 deposit was forfeited to Morbank. Aug. 18, 2008 : Master Prowse ordered sale of the Land via sealed bid. Sept. 19, 2008 : Only one offer was received from 140 for $4,500,000.00. When 644 failed to repay the mortgage debt by Oct. 15, 2008 the land was sold to 140. [ 10 ] This left a debt of $1,035,175.37, and on Jan. 16, 2009 Master Alberstat ordered

summary judgment against 644, 1224420 Alberta Ltd., Roger Field, Eric Burton, and Robert Murray, jointly and severally, for that amount. [ 11 ] Importantly, 644 and its co-defendants resisted this application with evidence in two affidavits. Roger Field [“Field”], an architect, deposed he was president, shareholder and director of 644. In general the Field affidavit challenged various calculations on the outstanding debt. However the second affidavit of Robert William Stewart Murray goes further, and alleges that: 1. 140 and Morbank have acted in a manner to prejudice 644 (para 7); 2. 140 has interfered with the foreclosure process (para 8); 3. a conflict of interest exists (para 8); and

4. 140 had failed to provide deposits to Morbank (para 23). [ 12 ] The unsuccessful purchases of August 24, 2007, Sept. 10, 2007, and June 10, 2008 were made by entities controlled or assisted by individuals associated with Grantmyre. [ 13 ] 140 was owned by John Morgan. Morbank loaned $3.3 million of the Land purchase price to 140. The remaining $1.2 million of the purchase prices was loaned to 140 from 1365915 Alberta Ltd. [“136”], a company related to 140.

Morbank advanced 136 the $1.2 million via a loan secured against land owned by 136 that had an appraised value of $4.7 million. [ 14 ] 140 subsequently defaulted on its loan to Morbank, and Morbank then took possession of the Land. [ 15 ] The Land foreclosure is the 644 Action and other related proceedings. In a nutshell, the Plaintiff argues the final result was planned. Morbank wanted to obtain the Land at a low price to maximize the potential proceeds of selling the subdivided land for development.

It therefore conspired with the other Defendants to meet that objective by terminating the 644 mortgage, and when the land was foreclosed then funded the Morgans’ corporations’ (140 and 136) bid to purchase of the Land. 644 alleges the 140 purchase was also planned with the intention that it fail. Morbank knew that 140 would in turn default on its loan, permitting direct possession by Morbank. [ 16 ] This scheme allegedly injured the Plaintiff. It left 644 and others who had guaranteed 644 with an outstanding debt that remains to this day.

Grantmyre argues a higher sale price was possible, except for interference by the Defendants. That would have cleared 644’s debts. Those debts only exist because of the artificially low sale price that was the result of the Defendants’ scheme. [ 17 ] The Defendants argue this is incorrect, that all transactions were at arms-length, and persons involved with Grantmyre had many opportunities to purchase the Land but failed to finance those transactions. The allegations of conspiracy are unfounded. Gail Morgan is an uninvolved third party.

The foreclosure procedure was transparent, carefully supervised by the Courts, and had a fair result. B. The Field Bankruptcy [ 18 ] In December 2005 Field guaranteed the 644 mortgage from Morbank. This was one of a number of debts owed or guaranteed by Field. In 2012 Morbank applied to have Field declared bankrupt. [ 19 ] Field resisted the bankruptcy. He was assisted in court by Grantmyre (644 Bench Brief, at p 8). They argued essentially the same conspiracy concerning the 644 Land foreclosure as is advanced in the 644 Action.

Allegedly, Morbank’s scheme to undervalue the Land drove Field into bankruptcy. [ 20 ] On March 15, 2013 Burrows J issued a judgment ordering Field into bankruptcy: Field (Re) , 2013 ABQB 163 , 3 CBR (6th) 142.

In that decision Justice Burrows makes the following conclusions: 1. the foreclosure on the Land was judicially monitored and approved (para 8); 2. several accepted though unsuccessful offers were made to purchase the land, including one where Field was involved (para 8); 3. the company that purchased the land (140) was at arms-length to Morbank (para 8); 4. the financial arrangements for the 140 purchase were disclosed to Field and the Court (para 8); and 5. Gail Morgan was entirely uninvolved with the Land, 140, and the foreclosure (para 8). [ 21 ] Justice Burrows concludes at para 9: Mr.

Tiberio characterizes Mr. Field's allegation that Morbank executed a plan to defraud Mr. Field and his associates as absolutely ridiculous. The evidence he presents in his affidavit clearly demonstrates that characterization to be correct. [ 22 ] Justice Burrows declined to order solicitor client costs because (para 21): ... Mr. Field's allegations were so clearly without merit that they cannot have caused the serious sting which in the proper case justifies the order of aggravated costs.

In my view a costs award which recognizes the large amount of the unpaid debt, the extra effort that Morbank was required to make to respond to Mr. Field's allegations, and the two adjournments of the application granted to Mr. Field, will be sufficient. ... [ 23 ] Field subsequently appealed but his appeal was struck when he failed to file the appeal record on time. Field then applied to restore his appeal. Grantmyre and a Doris Giesbrecht [“Giesbrecht”] assisted at the hearing (paras 2-4). Watson JA rejected that application in a decision reported as Morbank Financial Inc. v Field , 2014 ABCA 3 , 566 AR 280.

Field argued the Land foreclosure purchase was the result of a conspiracy and fraud (paras 11, 15), and that the proceedings before Justice Burrows were unfair (paras 15- 16). Field’s late filing was the product of an innocent miscalculation: para 19. [ 24 ] Justice Watson concluded the appeal disclosed no reversible error (para 22) and instead that it was a collateral attack against at least one prior decision of the Court of Queen’s Bench (para 22). [ 25 ] Field subsequently applied in Masters Chambers to annul the bankruptcy per Bankruptcy and Insolvency Act , RSC 1985, c B- 3, s 181.

He was represented at a March 6, 2014 hearing by Grantmyre. Grantmyre in this proceeding argued that Morbank’s material in the Burrows J proceeding was a “bad faith filing” (transcript, p 13), and that Morbank had engaged in a litigation strategy intended to intimidate (transcript, p 14). Master Schlosser rejected that application.

[ 26 ] Field then appealed but that appeal was struck on Oct. 9, 2014. C. Queen’s Bench Action 1303-02584 [ 27 ] On Feb. 20, 2013 Field sued Morbank and John and Tony Tiberio, alleging (among other things) that he was injured by a conspiracy between those parties and Gail and John Morgan to fraudulently obtain title to the 644 Land.

Field seeks reversal of the foreclosure, return of the Land, and $7.5 million in damages, along with unspecified lost profits. [ 28 ] Morbank filed a Statement of Defence on March 13, 2013 which denied those allegations. [ 29 ] There is no indication whether Grantmyre is or is not involved in this litigation. D. The B.C. Actions [ 30 ] After the Land foreclosure Morbank attempted to collect the remaining outstanding debt from 644 and its guarantors. One debtor was Eric Alan Burton [“Burton”].

Morbank’s collection efforts led to a number of interrelated reported British Columbia judgments: Morbank Financial Inc. v 0476047 B.C. Ltd. , 2013 BCSC 2008 ; Morbank Financial Ltd. v 0476047 B.C. Ltd. , 2014 BCSC 592 ; Morbank Financial Inc. v 0476047 B.C.

Ltd. , 2014 BCCA 147 , 354 BCAC 101; Morbank Financial Inc. v 0476047 , 2014 BCCA 265 , 354 BCAC 101; First West Credit Union v Giesbrecht , 2013 BCSC 564 , 47 BCLR (5th) 418, reversed 2013 BCCA 531 , 348 BCAC 27; First West Credit Union v Giesbrecht , 2014 BCSC 736 , 45 RPR (5th) 146; First West Credit Union v Giesbrecht , 2014 BCSC 1446 . [ 31 ] This litigation was the result of a series of transactions and corporate arrangements. The parties involved gave sharply different, conflicting versions of what transpired. Justice Saunders in Morbank v 04767679 B.C.

Ltd. (25 February 2014), Vancouver CA041544; CA041400 (BCCA) at para 2 described the litigation as a “factually complicated ... tangled tale” where “[s]omething has gone sadly and, perhaps badly, amiss”. [ 32 ] Burton owned a corporation, 0476047 B.C. Ltd. [“047”] that owned four pieces of real property in Fort St. John. After the 644 Land foreclosure Burton ceased acting as director for 047 and other directors were appointed, including Grantmyre. The new directors issued shares that diluted Burton’s interest to under one percent of 047.

The new directors also transferred the properties owned by 047 to Giesbrecht in exchange for a $2.1 million promissory note. [ 33 ] Giesbrecht then mortgaged the Fort St. John properties for $1.6 million and defaulted on that mortgage. This led to foreclosure proceedings against the former 047 properties, these are the First West Credit Union v Giesbrecht judgments listed above.

Various inconsistent explanations were offered for the fate of the $1.6 million raised via the Giesbrecht mortgage. [ 34 ] Morbank applied to have the 047 properties returned to that corporation and Burton reinstated as the sole shareholder and director. Burton agreed. The other defendants (including Grantmyre, Giesbrecht, and Field) resisted. Funt J in Morbank Financial Inc. v 0476047 B.C.

Ltd. , 2013 BCSC 2008 struck out the other defendants’ pleadings and granted Morbank’s application. [ 35 ] Justice Funt offers an unflattering evaluation of the resisting defendants and their litigation conduct: 1. they had not been honest with the court: para 16; 2. they had not complied with document production ordered by the court: para 25; 3. Grantmyre’s testimony is characterized as “incomplete and contumacious”: para 34.

The defendants’ repeated and ongoing failure to abide by court orders and the Rules of Court was so egregious that Justice Funt conclude the appropriate response was to take the “draconian” step of striking out their defences: paras 63-64. [ 36 ] Funt J subsequently ordered the resisting defendants pay Morbank $263,390.00 in costs: Morbank Financial Ltd. v 0476047 B.C. Ltd. , 2014 BCSC 592 .

This was a lump sum, an appropriate step where a party has exhibited disdain for court orders and rules: paras 6-7. [ 37 ] Field, Giesbrecht, and Grantmyre appealed to the British Columbia Court of Appeal. [ 38 ] At that court Grantmyre denied a stay of the order to strike by Saunders JA: Morbank v 04767679 B.C. Ltd. (25 February 2014), Vancouver CA041544; CA041400 (BCCA). Justice Saunders concluded the trial judge had provided ample basis for the admittedly draconian remedy ordered, and further “Mr. Grantmyre has not identified any visible ground of appeal ...”: para 25.

Justice Saunders concluded that Grantmyre was not honest with the Court. He provided a spurious explanation of 047’s ownership structure: para 29. Grantmyre also created the false impression that Morbank’s counsel had misinformed another judge: para 30. Saunders JA concludes at para 30: “I simply cannot believe anything Mr.

Grantmyre has told me.” [ 39 ] Morbank subsequently was granted an order that the appeal would only proceed if Grantmyre, Giesbrecht, and Field posted security for costs of the appeal ($6,500.00) and for the as of yet unpaid trial costs: Morbank Financial Inc. v 0476047 , 2014 BCCA 265 , 354 BCAC 101. Grantmyre alleged the trial decision was tainted by Morbank misleading the court: para 29. Grantmyre had failed to pay court costs: para 30. [ 40 ] Justice Stromberg-Stein concluded at para 33: ...

The appellants have demonstrated a persistent pattern of failing to comply with court orders, whether they be for disclosure or costs. They have provided little to no evidence of their financial circumstances, attempting to rely solely on bald statements. They have

demonstrated little credibility in past proceedings. ... [41] In three separate decisions judges of the British Columbia Court of Appeal concluded that the appeal by Grantmyre, Field andGiesbrecht had “little to no merit” and is “unlikely to succeed”: Morbank Financial Inc. v 0476047 B.C. Ltd., 2014 BCCA 265 at para33, 354 BCAC 101, see also Morbank Financial Inc. v 0476047 B.C. Ltd., 2014 BCCA 147 at paras 16-17, 354 BCAC 101; Morbank v04767679 B.C. Ltd. (25 February 2014), Vancouver CA041544; CA041400 (BCCA) at para 25. [42] Grantmyre represented himself throughout the Morbank Financial Inc. v 0476047 B.C.

Ltd., proceedings, and in certain ofthe First West Credit Union v Giesbrecht appeared on behalf of 047, though it was not a party to the proceedings. E. The Vahalla Foreclosure [43] A second property owned by 644 was the subject of a foreclosure action by Morbank: Morbank Financial Inc. v RogerField, 644035 Alberta Ltd., Eric Burton and Robert Murray: Alberta Court of Queen’s Bench docket #0701-03827. Morbank applied tohave the property in question sold per an offer for $850,000.00.

That application was granted by Master Hanebury on Feb. 22, 2012. [44] This led to a succession of unsuccessful appeals, first at Queen’s Bench (April 20, 2012), then separate appeals to the AlbertaCourt of Appeal by Field and Grantmyre (on behalf of 644). No steps were taken after the appeal notices were filed and the appeals wereultimately struck on Jan. 9, 2013 (Field) and Sept. 18, 2013 (Grantmyre and 644). Grantmyre in his written brief acknowledges hedirected 644 in this proceeding (Bench Brief, at p 8). IV.

Rules 3.68 and 7.3 [45] The Defendants seek to have this action terminated via two different but functionally related provisions: 3.68(1) If the circumstances warrant and a condition under subrule (2) applies, the Court may order one or more of the following: (

a) that all or any part of a claim or defence be struck out; (

b) that a commencement document or pleading be amended or set aside; (

c) that judgment or an order be entered; (

d) that an action, an application or a proceeding be stayed.

(2) The conditions for the order are one or more of the following: (

a) the Court has no jurisdiction; (

b) a commencement document or pleading discloses no reasonable claim or defence to a claim; (

c) a commencement document or pleading is frivolous, irrelevant or improper; (

d) a commencement document or pleading constitutes an abuse of process; (

e) an irregularity in a commencement document or pleading is so prejudicial to the claim that it is sufficient to defeat the claim. ... 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the followinggrounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded. [46] The legal tests for these two provisions is not in dispute. Hunt v Carey Canada Inc., (SCC), [1990] 2 SCR959, 74 DLR (4th) 321 indicates an action or defence may be struck under Rule 3.68 where it is plain and obvious, or beyond reasonabledoubt, that the action cannot succeed.

Pleadings should be considered in a broad and liberal manner: Tottrup v Lund, 2000 ABCA 121,at para 8, 186 DLR (4th) 226. [47] A frivolous plea is one so palpably bad that the Court needs no real argument to be convinced of that fact: Haljan v SerdahelyEstate, 2008 ABQB 472 at para 21, 453 AR 337.

A pleading is frivolous if its substance indicates bad faith or is factually hopeless:Donaldson v Farrell, 2011 ABQB 11 at para 20. [48] A court may strike a proceeding that is an abuse of process on that basis: Reece v Edmonton (City), 2011 ABCA 238 at para14, 335 DLR (4th) 600. “Vexatious” litigation may be struck under either Rule 3.682(

c) or (

d) as “vexatious” is synonymous withimpropriety and abuse of process: Wong v Leung, 2011 ABQB 688 at para 33, 530 AR 82; Mcmeekin v Alberta (Attorney General),2012 ABQB 144 at para 11, 537 AR 136. [49] Rule 7.3(1) applies the same legal test as Alberta Rules of Court, Alta Reg 390/1968, Rule 159(b): Manufacturers Life

Insurance Co. v Executive Centre at Manulife Place Inc., 2011 ABQB 189 at para 11, 48 Alta LR (5th) 178; Encana Corp. v ARCResources Ltd., 2011 ABQB 431 at para 7. The necessary threshold is described in Canada (Attorney General) v Lameman;Papaschase Indian Band No. 136 (Descendents of) v Canada (Attorney General); Papaschase Indian Band No. 136 v Canada(Attorney General), 2008 SCC 14 at para 11, [2008] 1 SCR 372: … the bar on a motion for

summary judgment is high. The defendant who seeks

summary dismissal bears the evidentiary burden ofshowing that there is "no genuine issue of material fact requiring trial" ... The defendant must prove this; it cannot rely on mereallegations or the pleadings ... If the defendant does prove this, the plaintiff must either refute or counter the defendant's evidence, or risksummary dismissal ... Each side must "put its best foot forward" with respect to the existence or non-existence of material issues to betried ... The chambers judge may make inferences of fact based on the undisputed facts before the court, as long as the inferences arestrongly supported by the facts ... [Emphasis added.] [50] In a

summary judgment application evidence may be entered in affidavit form or by other evidence: Rule, 7.3(2). Recently theSupreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87 emphasized an enhanced role for proceedings of thiskind as the modern reality of civil litigation places a focus on early resolution of issues in dispute by preliminary procedures rather thanat trial. This “shift of culture” is necessary for proportionate, timely and affordable litigation: para 28.

In Windsor v Canadian PacificRailway Ltd., 2014 ABCA 108 at paras 13-16, 371 DLR (4th) 339, Slatter JA concluded the approach in Hryniak v Mauldin is equallyvalid in Alberta. V Vexatious Litigation A. The Law [51] The Defendants argue that the 644 Action is an example of vexatious, abusive litigation. That satisfies the both the specificcriteria to terminate litigation via of Rule 3.68, and possibly that of Rule 7.3(1)(b).

The court also has a separate inherent jurisdiction toprevent abuse by control of court processes to strike out vexatious and abusive litigation: Mcmeekin v Alberta (Attorney General), 2012ABQB 144 at para 14, 537 AR 136, citing Mazhero v Yukon (Ombudsman), 2001 YKSC 520 at para 47; Canam Enterprises Inc vColes (2000), (ON CA), 51 OR (3d) 481 (Ont CA) at paras 55-56, affirmed 2002 SCC 63, [2002] 3 SCR 307. [52] The court’s authority to control abuse of its processes is a flexible, functional tool.

Slatter JA in Reece v Edmonton (City) atpara 16 expressed that principle in this manner: Abuse of process is a compendious principle that the courts use to control misuses of the judicial system. Abuses of process can arise inmany different contexts, and there is no universal test or statement of law that encompasses all of the examples.

See also R v Scott, (SCC), [1990] 3 SCR 979 at 1007, 116 NR 361; Onischuk v Alberta, 2013 ABQB 89 at para 35, 555AR 330; Stout v Track, 2013 ABQB 751, 95 Alta LR (5th) 32. [53] A vexatious proceeding is one where “... the litigant's mental state goes beyond simple animus against the other side, and risesto a situation where the litigant actually is attempting to abuse or misuse the legal process.”: Jamieson v Denman, 2004 ABQB 593, 2004 ABQB at para 127, 365 AR 201. [54] A litigant’s entire court history is relevant, including litigation in other jurisdictions: McMeekin v Alberta (Attorney General),2012 ABQB 456, 543 AR 132; Curle v Curle, 2014 ONSC 1077 at para 24; Fearn v Canada Customs, 2014 ABQB 114, 94 Alta LR(5th) 318.

That includes conduct both inside and outside the courtroom: Bishop v Bishop, 2011 ONCA 211 at para 9, leave denied[2011] SCCA No 239. [55] It is irrelevant that litigation may have commenced with what appeared to be a good cause of action: Dykun v Odishaw, 2000ABQB 548 at para 42, 267 AR 318, affirmed 2001 ABCA 204, 286 AR 392, leave denied [2001] SCCA No 442; Del Bianco v 935074Alberta Ltd., 2007 ABQB 150 at para 39, 156 ACWS (3d) 786. [56] A person is presumed to intend the natural consequences of their acts (Starr v Houlden, (SCC), [1990] 1SCR 1366, 68 DLR (4th) 641), so repeated misconduct is a presumptive indication that a litigant does not intend to follow court rules andprocedure (McMeekin v Alberta (Attorney General), 2012 ABQB 456 at para 119, 543 AR 132). [57] Characteristics or indicia of vexatious litigation are identified by legislation (Judicature Act, RSA 2000, c J-2, ss 23-23.1) andin the common law.

Michalyshyn J in Chutskoff v Bonora, 2014 ABQB 389 at para 92 surveyed these indications of court abuse andidentified eleven general categories with many specific examples: 1. collateral attacks, 2. hopeless proceedings, 3. escalating proceedings, 4. bringing proceedings for improper purposes, 5. initiating “busybody” lawsuits to enforce alleged rights of third parties, 6. failure to honour court-ordered obligations, 7. persistently taking unsuccessful appeals from judicial decisions,

8. persistently engaging in inappropriate courtroom behaviour, 9. unsubstantiated allegations of conspiracy, fraud, and misconduct, 10. scandalous or inflammatory language in pleadings or before the court, and 11. advancing Organized Pseudolegal Commercial Argument [“OPCA”] strategies. [ 58 ] This list is non-exhaustive. Any of these indicia are a basis to conclude litigation is vexatious. B. Vexatious Aspects of the 644 Action [ 59 ] The 644 Action record and the other related litigation provides many examples of vexatious litigation indicia. 1.

Collateral Attack [ 60 ] The decision of a court may not be reviewed or varied by another court except in the proper procedural context, such as an appeal. Any attempt to litigate outside of that context is a “collateral attack”. That term was recently explained by Justice Abella in British Columbia (Workers’ Compensation Board) v Figliola , 2011 SCC 52 at para 28 , [2011] 3 SCR 422: The rule against collateral attack similarly attempts to protect the fairness and integrity of the justice system by preventing duplicative proceedings.

It prevents a party from using an institutional detour to attack the validity of an order by seeking a different result from a different forum, rather than through the designated appellate or judicial review route … [Emphasis added.] [ 61 ] In Chutskoff v Bonora Michalyshyn J at para 92 describes the collateral attack category of vexatious conduct in this manner: collateral attack:

a) bringing proceedings to determine an issue that has already been determined by a court of competent jurisdiction ...

b) using previously raised grounds and issues improperly in subsequent proceedings ...

c) conducting a proceeding to circumvent the effect of a court order ... [Citations omitted.] [ 62 ] The 644 Action is based on a number of key allegations: 1. there was a conspiracy between Morbank, 140, and its principles, and this means the Land purchase by 140 was not by an arms- length third party; 2. the conspiracy was intended to sabotage purchase or retention of the Land by Grantmyre and his associates; 3. the intended effect of the conspiracy was to obtain the Land at an artificially reduced price to maximize the profit obtained by Morbank when it took control of and developed the Land. [ 63 ] Each of these claims has been previously considered and rejected in other court proceedings.

The Jan. 16, 2009

summary judgment decision of Master Alberstat was made despite a variation of this allegation in the Murray affidavit. A more mature version of the alleged conspiracy and fraud was explicitly rejected by Justice Burrows in Field (Re) , as “absolutely ridiculous”. Justice Watson subsequently in Morbank Financial Inc. v Field , at para 22 concluded that the Field bankruptcy litigation was in effect a collateral attack on at least one Queen’s Bench decision. [ 64 ] This alone is grounds to conclude that the 644 Action is a vexatious proceeding. 644 is attempting to re-litigate issues that were already decided.

I note that there is a particularly obnoxious aspect to this re-litigation in that 644 has advanced a claim against Gail Morgan after a court has ruled she is an uninvolved, innocent third party: Field (Re) : para 8 . These repeated attempts to re-argue an alleged conspiracy resemble the conduct of the vexatious litigant in Chustkoff v Bonora who returned, again and again, to the same conspiratorial allegations of fraud in multiple proceedings. [ 65 ] A collateral attack is an abuse of process: Toronto (City) v C.U.P.E. , 2003 SCC 63 at para 22 , [2003] 3 SCR 77.

This conclusion alone meets the criteria to strike this action under Rule 3.68(2)(d). 644 cannot prove the alleged wrongdoing and claim against the Defendants as the basis for its allegations has already been rejected. 2. Hopeless Proceeding [ 66 ] Chustkoff v Bonora at para 92 describes the characteristics of a hopeless and vexatious proceeding: hopeless proceedings:

a) bringing proceedings that cannot succeed or that have no reasonable expectation to provide relief ...

b) seeking forms of relief that cannot be obtained ...

c) seeking relief that is unwarranted or grossly disproportionate to any plausible remedy ...

d) advancing excessive cost claims ...

e) advancing incomprehensible arguments and allegations ... [Citations omitted.] [ 67 ] The 644 Action is a hopeless proceeding because it is a collateral attack. The court may not return to and reconsider conclusions made in other unappealed proceedings. This is also a basis to order

summary judgment against the Plaintiff per Rule 7.3(1) (a) 3. Failure to Honour Court-Ordered Obligations [ 68 ] Another potential relevant factor is if a litigant has a history of not abiding with court-ordered obligations ( Chutskoff v Bonora , at para 92 ): failure to honour court-ordered obligations:

a) failing to pay costs ...

b) a failure to abide by court orders ...

c) misconduct that is intended to or has the effect of circumventing the operation of court orders ... [Citations omitted.] [ 69 ] To date the 644 Action does not include any of these features. Nevertheless, I may look to other litigation to better evaluate whether the 644 Action is or is not vexatious: McMeekin v Alberta (Attorney General) , 2012 ABQB 456 ; Curle v Curle ; Fearn v Canada Customs . [ 70 ] Grantmyre personally has a history of failing to pay court costs: Morbank Financial Inc. v 0476047 , 2014 BCCA 265 at para 30 , 354 BCAC 101.

Justice Funt concluded Grantmyre intentionally refused or evaded his legal and court obligations: Morbank Financial Inc. v 0476047 B.C. Ltd. , 2013 BCSC 2008 at paras. 25 , 63-64. Justice Saunders similarly criticized Grantmyre for his in- court conduct: Morbank v 04767679 B.C.

Ltd. (25 February 2014), Vancouver CA041544; CA041400 (BCCA) at para 30. [ 71 ] Alone these incidents are not a sufficient basis for me to conclude that the 644 Action is vexatious, however I consider Grantmyre’s misconduct in other trial and appeal proceedings to be an ‘aggravating circumstance’ that reinforce my conclusion that the 644 Action is vexatious as it is a hopeless, collateral attack on the conclusions of other unappealed court decisions. 4.

Unsubstantiated Allegations of Fraud and Conspiracy [ 72 ] The 644 Action alleges that, despite the close court supervision, the conclusion of the Land foreclosure proceeding is a fraud. This was a scheme designed to purchase the Land for an artificially reduced price with the goal of providing Morbank a kind of double- recovery.

It could re-sell the Land for a greater profit, while collecting more of the mortgage deficit from the persons who guaranteed 644’s debt. [ 73 ] Allegations of conspiracy, fraud, and misconduct are a basis by which courts have concluded litigation is vexatious, as reviewed in Chustkoff v Bonora at para 92: unsubstantiated allegations of conspiracy, fraud, and misconduct, including:

a) claims of judge and lawyer deception, fraud, perjury, conspiracy, tampering of records and transcripts, and other conspiratorial misconduct made without the positive evidence ... legally required to support such allegations ...

b) sensational claims of conspiracies and intimidation, harassment and racial bias ...

c) pleadings that are “replete with extreme and unsubstantiated allegations, and often refer to far-flung conspiracies involving large numbers of individuals and institutions”, “where the allegations may be unfounded in fact or merely speculative, but the language is vitriolic, offensive and defamatory” ... [Citations omitted.] [ 74 ] Justice Burrows reviewed essentially the same documentary record is before the court in this application and concluded that there is no evidence of collusion to support the alleged conspiracy: Field (Re) , at para 9 . I agree.

The 644 foreclosure is an arms-length transaction. [ 75 ] Grantmyre’s associates had the opportunity to bid on the property and obtain financing to acquire the Land. That they failed to do so does not imply a conspiracy among the Defendants so much as it does that the land was not worth the purchase price, let alone the $14 million appraisal initially advanced. It is not as if Morbank was the only potential source for funds. [ 76 ] The fact that Morbank financed the 140 purchase is irrelevant. The sale of the Land was the result of a sealed bid process where there was only one bid.

If the Land had a substantially different value or was attractive to buyers then other bidders would have appeared and purchased the Land instead of 140. [ 77 ] As Justice Burrows observed, these allegations are “absolutely ridiculous” (para 9), and are “clearly without merit” (para 21).

That implies that the defence to the Field Bankruptcy, and the Action 1303-02584, and the 644 Action lawsuits were undertaken for some other, improper purpose. This is a further basis to conclude litigation is vexatious: Chutskoff v Bonora at para 92 . I conclude that the baseless allegations of fraud and conspiracy, coupled with the emergence of this factor in three otherwise apparently hopeless actions, indicates that the Field Bankruptcy, Action 1303-02584, and the 644 Action were advanced for an improper purpose.

Reviewing the various kinds of improper purposes surveyed in Chutskoff v Bonora at para 92 , it is plausible that Grantmyre and his associates may have had several of these objectives in mind. [ 78 ] In any case, this combination of unsubstantiated conspiracy and fraud, and improper litigation purpose is another separate basis to conclude the 644 Action is vexatious. 5. Persistent, Unsuccessful Appeals [ 79 ] A further and obvious feature of the litigation related to the 644 Action is appeals to almost every step.

This is another basis to conclude a proceeding is vexatious ( Chutskoff v Bonora , at para 92 ): persistently taking unsuccessful appeals from judicial decisions ... spurious appeals intended to incur cost and cause delay are an aggravating factor ... [Citations omitted.] [ 80 ] The Land foreclosure, and related legal proceedings are replete with abandoned or unsuccessful appeals. The Field Bankruptcy decision was challenged in two separate ways. For the purposes of this analysis I consider the application to annul the bankruptcy a kind of appeal.

Two proceedings at the Court of Appeal were struck. [ 81 ] 644 under Grantmyre’s direction engaged in unsuccessful and abandoned appeals in the Valhalla foreclosure proceeding. [ 82 ] I also conclude that futile procedural applications on appeal fall into this category when they are intended to delay the effect of a trial judgment. Justice Saunders decision to refuse a pre-appeal stay in Morbank v 04767679 B.C.

Ltd. (25 February 2014), Vancouver CA041544; CA041400 (BCCA) is relevant, particularly in light of her conclusion that one reason for that result was that Grantmyre is simply a liar. [ 83 ] All three British Columbia Court of Appeal justices who commented on the strength of the appeal of Justice Funt’s decision indicated the case advanced was weak. Justice Saunders at para 25 concluded that there appeared to be no basis at all for the appeal: “Mr.

Grantmyre has not identified any visible ground of appeal ...”. [ 84 ] Similarly, Justice Watson in Morbank Financial Inc. v Field at para 22 concluded that the appeal appeared futile. The argument Field advanced was nothing more than a collateral attack, and therefore doomed to fail. [ 85 ] Spurious appeals intended to incur cost and cause delay are an aggravating factor: McMeekin v Alberta (Attorney General) , 2012 ABQB 625 at paras 38 , 41, 543 AR 11.

Once more, there seems to be no rational, or at least proper, explanation for this aggressive appeal strategy other than Grantmyre and his associates have some illegitimate, inappropriate purpose. While the 644 Action is associated with litigation that indicates an inappropriate, improper, and futile appeal strategy, I do not conclude that this alone is a basis to conclude the 644 Action is vexatious. That said, the surrounding strategy of improper and futile appeal is another ‘aggravating’ factor that favours prompt termination of this litigation. 6.

Conclusion [ 86 ] I have identified several separate bases to conclude the 644 Action is an example of vexatious litigation: Rule 3.68 . I have also concluded there are grounds here for

summary judgment in favour of the Defendants: Rule 7.3. When those are combined, along with the associated litigation history of failure to obey court orders and obligations, and Grantmyre’s aggressive appeal strategy, I have no question the 644 Action should and must be terminated immediately. [ 87 ] This is clearly an example of vexatious litigation. The question that remains, however, is whether the person behind this litigation should also be declared a vexatious litigant. C.

Vexatious Litigant Status [ 88 ] The Judicature Act , s 23.1 permits a court to restrict the capacity of a person from engaging in or continuing litigation where that person has engaged in vexatious legal proceedings: 23.1(1) Where on application or on its own motion, with notice to the Minister of Justice and Solicitor General, a Court is satisfied that a person is instituting vexatious proceedings in the Court or is conducting a proceeding in a vexatious manner, the Court may order that (

a) the person shall not institute a further proceeding or institute proceedings on behalf of any other person, or (

b) a proceeding instituted by the person may not be continued, without leave of the Court. [ 89 ] Notice was given to the government actors identified in Judicature Act , s 23.1(3). Neither opted to participate in the April 29, 2014 hearing. [ 90 ] Grantmyre identifies himself as the sole directing mind and as an owner of 644. He represents 644 in court, personally. I have no difficulty concluding that the 644 Action is, in fact, Grantmyre’s personal litigation. He is in control. [ 91 ] I have previously identified three distinct factors that alone potentially warrant my declaring the person behind the 644 Action as a vexatious litigant. These combine with an alarming litigation history.

[92] Grantmyre personally does not follow court orders and rules: Morbank Financial Inc. v 0476047 B.C. Ltd., 2013 BCSC 2008at paras 25, 63-64; Morbank Financial Inc. v 0476047, 2014 BCCA 265 at para 30, 354 BCAC 101. [93] Courts have concluded Grantmyre is not honest and forthright both as a witness and as a self-represented litigant: MorbankFinancial Inc. v 0476047 B.C. Ltd., 2013 BCSC 2008; Morbank v 04767679 B.C. Ltd. (25 February 2014), Vancouver CA041544;CA041400 (BCCA) at paras 29-30. [94] He obviously is not alone in his litigation misconduct.

His collaborators Field and Giesbrecht have also been the subjects ofcourt criticism. However, the existence of these collaborators does not diminish Grantmyre’s personal responsibility, or the potentialneed to have his litigation activities restricted to prevent further abuse of court processes. While he arguably is ‘one of the pack’ in theBritish Columbia litigation and the Field Bankruptcy, here the 644 Action is his responsibility, alone. And as I have concluded above,that lawsuit was not advanced for a proper, legal purpose. [95] I therefore declare William Grantmyre a vexatious litigant and order: 1.

William Grantmyre is prohibited from commencing, or attempting to commence, or continuing any appeal, action, application orproceeding in the Court of Appeal, the Court of Queen’s Bench or the Provincial Court of Alberta, on his own behalf or on behalf of anyother person or estate without an order of a judge of the court in which the proceeding is conducted. 2. The presiding judge may at any time direct that notice of the application to commence or continue an appeal, action, applicationor proceeding be given to any other person. 3.

William Grantmyre must describe himself in the application and any pleadings by his full name, and not by using initials or apseudonym. 4. An application to commence any appeal, action, application or proceeding must be accompanied by an affidavit: (

i) attaching a copy of the order declaring William Grantmyre to be a vexatious litigant, (ii) attaching a copy of the appeal, pleading, application or process the appellant proposes to issue or file, (iii) deposing fully and completely to the facts and circumstances surrounding the proposed claim or proceeding, so as to demonstratethat the proceeding is not an abuse of process, and that there are reasonable grounds for it, (iv) indicating whether William Grantmyre has ever sued some or all of the defendants or respondents previously in any jurisdictionor court, and if so providing full particulars, (

v) undertaking that, if leave is granted, the authorized appeal, pleading, application or process, the order granting leave to proceed,and the affidavit in support of the order will promptly be served on the defendants or respondents, and (vi) undertaking to diligently prosecute the proceeding. 5. The application shall be made in open court before a regularly assigned duty or chambers judge (not in private chambers), andshall be recorded. Leave to commence proceedings may be given on conditions, including the posting of security for costs.

Anapplication that is dismissed may not be made again before another judge unless William Grantmyre discloses in writing to the secondjudge that the application has previously been dismissed. 6. An application to vary or set aside this vexatious litigant order must be made on notice to the Attorney General, and any otherperson as directed by the Court. [96] This order is not restricted to the individuals and entities involved, directly or indirectly, with the 644 Action.

I have not optedfor a more restricted vexatious litigant order because Grantmyre has proven willing and able to insinuate himself into other people’slitigation. He represents others and advances inappropriate, futile, and vexatious arguments. [97] While it is possible that Grantmyre’s abusive and vexatious activities may be restricted to the 644 Action Defendants Iconclude that the breadth of his litigation activities to date in Alberta and British Columbia warrant this more general response.

I note, inparticular, that Grantmyre has attempted to appear in the First West Credit Union v Giesbrecht hearings even though he is not a party.‘Busybody’ activities are another characteristic of vexatious litigation: Wong v Giannacopoulos, 2011 ABCA 206 at para 4, 510 AR234, leave refused 2011 ABCA 277, 515 AR 58 and in this case indicate a wider net should be cast to constrain this particular vexatiouslitigant. [98] This order takes effect immediately. D.

Other Remedies [99] The Defendants in the alternative sought that Grantmyre personally post security for costs if the 644 Action were continued.Since I have terminated that lawsuit this remedy is unnecessary, but in light of Grantmyre’s litigation history I would have made thisorder as well. [100] The Defendants also seek an order prohibiting Grantmyre from personally representing 644 in other legal proceedings and argue644 must be represented by a lawyer. I agree this is appropriate.

While the Legal Profession Act, s 106(1) prohibits representation in thiscourt by non-lawyers, it is well-established that the inherent jurisdiction of the superior courts provides a discretion to permitrepresentation by non-lawyers: R v Crooks, 2011 ABCA 239 at para 9. One relevant factor is what kind of advocacy or representation isinvolved (Professional Sign Crafters

(1988) Ltd. v Wedekind (1994), (AB KB), 19 Alta. LR (3d) 53 at para. 8 (Alta

QB)): In order to place the issues in perspective it is important to distinguish between the inherent discretion of a superior Court to permit a non-lawyer to appear physically in Court or before a judge as a representative or advocate of another person (the ‘right of audience’), and the right of an individual to represent another person in respect of legal matters generally, that is, the right to practice law. [ 101 ] In R v Crook Justice Berger stresses at para 10 that the critical question is ... whether it can be said that the act done by the non-lawyer is one that should only be performed by members of the legal profession such that the public may be adequately protected from acts of unqualified persons ... (citing Pacer Enterprises Ltd. v Cummings , 2004 ABCA 28 at para 15 , 346 AR 16; Balogun v Pandher , 2009 ABCA 409 at para 18 , 469 AR 187). [ 102 ] When framed in that manner there really is no question that Grantmyre is not a suitable litigation representative.

His role in this proceeding was that of a lawyer. He advanced and argued legal arguments on behalf of 644. His client’s action was vexatious and an abuse of process. Grantmyre has a history of inappropriate in-court and litigation conduct. The public should be protected by refusing to allow Grantmyre to represent 644, a person who is not merely unqualified, but active misuses the courts. VI. Conclusion [ 103 ] The 644 Action is struck out entirely as vexatious litigation.

I order that William Grantmyre is a vexatious litigant, and is restricted from filing or continuing actions in all Alberta Courts. [ 104 ] The Defendants were entirely successful and are therefore entitled to costs. The parties may appear before me if they are unable to agree on the appropriate amount. Heard on the 29 th day of April, 2014. Dated at the City of Edmonton, Alberta this 10 th day of November, 2014. B.A. Browne J.C.Q.B.A. Appearances: William Grantmyre for the Respondent / Plaintiff Robyn Gurofsky Borden Ladner Gervais LLP for the Applicants / Defendants