Toma v Alberta (Service), 2021 ABQB 110

Court of Queen’s Bench of Alberta Citation: Toma v Alberta (Service), 2021 ABQB 110 Date: 20210211 Docket: 2103 00149 Registry: Edmonton Between: Bernard Toma and Lorna Toma Plaintiffs - and - Service Alberta, Consumer Investigation Unit, Laura Aydin, Bradley Siddell, Zeljko Kukolic, Darrelle Gabinet, Jessica Fortin, Jessica Littlewood, Brian Malkinson, Dale Menzak, Jessi Arsenault, Jackie Armstrong-Homeniuk, Nate Glubish, Hanna Storvold, Associates, Subcontractors Defendants _______________________________________________________ Memorandum of Decision of Associate Chief Justice K.G. Nielsen _______________________________________________________ I. Introduction

[ 1 ] On January 14, 2021 Bernard and Lorna Toma (the Tomas) filed a Statement of Claim naming as Defendants: 1) Service Alberta; 2) the Service Alberta Consumer Investigation Unit; 3) certain persons employed with Service Alberta:

a) employees in the Consumer Investigation Unit (Laura Aydin, Bradley Siddell, Zeljko Kukolic),

b) Service Alberta FOIP services personnel (Darrelle Gabinet, Jessica Fortin),

c) a “Service Alberta Ministerial Assistant with Children’s Services” (Hannah Storvold), 4) four current or former members of the Alberta Legislature, two of whom are or were the Minister of Service Alberta (Jessica Littlewood, Brian Malkinson, Jackie Armstrong-Homeniuk, Nate Glubish); 5) Jessie Arsenault, who is identified as a “Constituency Assistant” for the Fort Saskatchewan MLA’s office; 6) the former president of the Auctioneer’s Association of Alberta (Dale Menzak); and 7) “Defendants’ Associates and Sub-Contractors identities were not known at the time of the filing”. [ 2 ] The Statement of Claim does not lay out the events that are the basis for the Tomas’ claim.

Drawing inferences from the pleadings, it appears that certain unspecified property of the Tomas was sold in an auction conducted by the Northstar Group of Companies (Northstar).

The Tomas allege misconduct occurred during that auction, including that the Tomas’ property was auctioned at discounted prices so as to favour employees, associates, family members, friends, and “regular auction patrons”, and that Northstar breached a reserve bid arrangement with Lorna Toma concerning “household merchandise”. [ 3 ] The Tomas’ Statement of Claim does not name Northstar as a Defendant, nor does it advance claims that directly relate to the allegedly illegal auction.

Instead, it appears that after the auction the Tomas initiated a complaint about the auction with the Service Alberta Consumer Investigation Unit. The Tomas’ Statement of Claim alleges improper conduct related to that investigation in 24 paragraphs, each of which make parallel allegations against all of the Defendants, for example: 19. One or more of the Defendants were made well aware of the fact by the Plaintiff (Mr.

Bernie Toma) both verbally and in written form that the Northstar Group of Companies, their officers, their associates, and their employees worked in association with Provincial Government Departments and Provincial Government Subsidiaries under the jurisdiction of and supervised by Service Alberta and its Subsidiaries which created an unjust conflict of interest situation. ... 22.

One or more of the Defendants knowingly and intentionally ignored the Plaintiffs' evidence that the Northstar Group of Companies, their work associates, and their employees did engage in unfair business practices encompassing fraudulent actions, misrepresentations, and oppressive or unconscionable acts and practices by way of business against the Plaintiffs. ... 30.

One or more of the Defendants knowingly and intentionally ignored the Plaintiffs' evidence that the Northstar Group of Companies, their work associates, and their employees knowingly and intentionally breached the contract they entered into with the Plaintiff Lorna Toma, for the purchase of the Plaintiffs, merchandise at the predetermined reserved price. ... 33.

One or more of the Defendants knowingly and intentionally failed to perform their Fiduciary Duties and Obligations pertaining to the handling of the investigation into the unfair business practices pertaining to the Northstar Group of Companies, their work associates, and their employees. ... 36.

One or more of the Defendants knowingly and intentionally published and distributed fraudulent statements relating to the investigation and the findings of the Northstar Group of Companies, their work associates, and their employees actions and business practices, their mandate of service, and their jurisdiction relating to their mandated investigational jurisdiction. ... 38.

One or more of the Defendants knowingly and intentionally used their position of authority in an attempt to discredit the Plaintiffs’ evidence of Unfair Business Practices relating to the Northstar Group of Companies. their work associates, and their employees. ... 41. One or more of the Defendants knowingly and intentionally as a result of their actions and inactions through their refusal to enforce legislation pursuant to The Consumer Protection Act ( CPA ), Unfair Business Practices have created an irreversible betrayal of trust relating to Public Safety concerns of the Plaintiffs and Society as a whole.

(Sic.) [ 4 ] The Statement of Claim then concludes: 42.

As a result of one or more of the Defendants failer to enforce legislation in pursuant to The Consumer Protection Act ( CPA ), Unfair Business Practices they have caused and have allowed the Northstar Group of Companies, their work associates, and their employees to cause the Plaintiffs' to suffer irreversible long term financial harm. undue mental stress and hardship. (Sic.) [ 5 ] The remedies the Tomas seek include: 1) declarations that the Defendants knowingly and intentionally oppressed the Tomas, and breached their “Fiduciary Duties and Obligations to the Plaintiffs and Society as a whole”; 2) the Court order accounting and document disclosure, and identification of “Associates and Sub-Contractors” and corporate officers involved with Northstar; 3) $25,000,000 “... for the undue suffering, irreversible long term financial and mental harm, undue stress and hardship caused to and upon the Plaintiffs by Defendants actions and inactions”; and 4) an order that the Court: ... appoint an independent impartial watchdog committee to review and enforce all recommendations set out by said independent impartial watchdog committee upon any and all investigations carried out by Service Alberta and the Consumer Investigation Unit (CIU), its associates, sub-contractors and employees. [ 6 ] The Tomas’ Statement of Claim was referred to me by the Clerk of the Court as an Apparently Vexatious Application or Proceeding (AVAP) pursuant to Civil Practice Note No. 7 (CPN7), paragraph 5.

I am the judge assigned to review the AVAPs filed in Edmonton at the Court of Queen’s Bench. CPN7 is reviewable on-line at https://www.albertacourts.ca/qb/areas-of-law/civil/practice- notes. [ 7 ] I have reviewed the Tomas’ Statement of Claim and conclude it is an AVAP because this filing has elements that Courts identify as characteristics of hopeless and abusive proceedings. On that basis, I conclude the Tomas’ Statement of Claim should be subject to a CPN7 show-cause document-based review under r 3.68 of the Alberta Rules of Court , AR 124/2010 .

That means I have decided that the Tomas must file a Written Submission setting out why the Statement of Claim should not be struck out because it is significantly deficient. II. CPN7 [ 8 ] The Court implemented CPN7 to better manage litigation that, on its face, appears to be unmeritorious, has no chance of success, or is otherwise abusive and vexatious.

CPN7 is intended to provide litigants with a timely, proportionate, and cost-effective response: Unrau v National Dental Examining Boar d , 2018 ABQB 874 ( Unrau #1 ). [ 9 ] If, on initial review by the Court, an AVAP appears to have no merit, have no prospect of success, or is otherwise abusive and vexatious, then the Court issues a first written decision that identifies the apparent issue or issues that may be a basis to strike out the AVAP under r 3.68 of the Alberta Rules of Court . [ 10 ] The party who filed the AVAP is then given an opportunity to, within 14 days, provide to the Court a Written Submission of up to a total of 10 pages in length that responds to, and demonstrates why, the AVAP is a legitimate action and should be permitted to continue.

The Written Submission must be clearly addressed “To the Attention of” the Justice who initiates the CPN7 process, and must also be served on the other parties to the litigation. [ 11 ] CPN7 is not to be used for “close calls”. The Court only intervenes when the defect(

s) in question are “apparent on the face of the pleading”, and the suspect pleadings are “clearer cases of abuse”: Unrau #1 at paras 22 and 24 . [ 12 ] The Court only considers restricted forms of evidence when it conducts a CPN7 review because this process has a very narrow focus and operates to examine a single document and its content: Ubah v Canadian Natural Resources Limited , 2019 ABQB 347 at paras 24-48 ( Ubah #2 ). There are exceptions to that rule.

For example, the Court may examine other documents in the same proceeding that are related to the suspect filing ( Ubah #2 at para 35 ), or documents and records that are evidence that the AVAP is an attempt to litigate an issue that has already been decided or closed ( Ubah #2 at para 45 ). III. Analysis [ 13 ] The Tomas’ Statement of Claim exhibits a number of potential issues. A. Inadequate Pleadings [ 14 ] A Statement of Claim sets the issues to which the opposing party must respond, and alerts that party of the case it must meet: Whiten v Pilot Insurance Co , 2002 SCC 18 at para 87 .

Proper pleadings require more than simply bare assertions, or “bald allegations”

of wrongdoing: GH v Alcock, 2013 ABCA 24 at para 58; Mancuso v Canada (National Health and Welfare), 2015 FCA 227 at paras16-20.

Pleadings must provide a basis for the Court and other litigants to make a meaningful response, and indicate to the respondingparties the “... who, when, where, how and what gave rise to its liability.”: Mancuso v Canada (National Health and Welfare) at para19. [15] Inadequate pleadings abuse the court’s process because a Defendant cannot defend against unclear and non-specific claimsand the Court cannot control the proceedings, identify the proposed argument, or make findings on the relevant facts: Unrau v NationalDental Examining Board, 2019 ABQB 283 at para 629 (Unrau #2). [16] The Tomas’ Statement of Claim does not appear to meet the minimum criteria for a valid action.

The overall basis for theTomas’ claim is unclear beyond that the Tomas are both dissatisfied with the outcome of an auction conducted by Northstar, and then, itwould seem, with how various governmental and non-governmental actors responded to the Tomas’ complaints about that auction. [17] The Statement of Claim says little beyond that, and so leaves questions such as when was the auction? What property wassold? What was the reserve bid arrangement? How were certain auction sales concealed? The Statement of Claim says Northstar and itsemployees “... kept a duplicate copy of records ...”.

Why is that relevant and how does that lead to liability from the Defendants? [18] The Tomas say Northstar’s employees provided a “fraudulent incomplete Statement of Sales”. How was that documentfraudulent? The Defendants allegedly “published and distributed fraudulent statements”. What were they? I note that r 13.7 of theAlberta Rules of Court requires that particulars must be pled when a party alleges breach of trust, fraud, or misrepresentation. [19] The Tomas say that the Defendants have a fiduciary duty to them in relation to oversight of the Northstar auction, but provideno basis for why that would be.

For example, what is the basis to allege the president of the Auctioneers Association of Alberta has afiduciary relationship with the Tomas? A fiduciary relationship requires “... an undertaking of loyalty ... to act in the beneficiary’sinterests.”: Galambos v Perez, 2009 SCC 48 at para 69. How do any of the Defendants meet that criterion? [20] The Tomas do not identify any particular individual with the alleged misconduct. There is no linkage of how particularDefendants are implicated in the many alleged wrongdoings.

For example, how did several current and former Members of the AlbertaLegislature use “... their position of authority in an attempt to discredit the Plaintiffs’ evidence ...”? [21] GH v Alcock at para 58 states: ... it is not sufficient for a statement of claim to merely make bald allegations that recite the basic elements of the tort in very generalterms but fails to provide material facts sufficient to demonstrate an intentional wrongdoing by a specific public officer aimed at thosewho complain of the officer’s conduct. ...

The Tomas’ Statement of Claim is not only difficult to understand, but it does not appear to meet these criteria.

It does not provide the“who, when, where, how and what” for the alleged “knowing and intentional” misconduct, as required by GH v Alcock. [22] Instead, it appears that most, if not all, of the Tomas’s allegations of wrongdoing are bald allegations, and therefore do notprovide a basis for the Court and Defendants to make a meaningful response, and the Statement of Claim is a potential abuse of processfor that reason. [23] I therefore request that the Tomas indicate how the Statement of Claim provides an adequate basis for the Court and theDefendants to make a meaningful response. B.

Impossible and/or Excessive Remedies [24] The Tomas’ Statement of Claim appears to seek impossible and/or excessive remedies. The Tomas seeks $25,000,000 indamages, and additional unspecified punitive damages. Some of those damages are allegedly for “irreversible long term financial ...harm”. No basis for a large current and/or future financial injury is indicated in the Statement of Claim. At most, the Statement of Claimalleges that the Tomas did not recover the auction proceeds that should have been received.

However, no information to establishmillions of dollars in losses is provided in the Statement of Claim. [25] An unspecified portion of the $25,000,000 is general damages for “... undue suffering, irreversible mental harm, undue stressand hardship ...”. The maximum amount of general damages that may be claimed for pain and suffering was set in Andrews v Grand &Toy Alberta Ltd, (SCC), [1978] 2 SCR 229, 83 DLR (3d) 452 at $100,000. That was for a young adult whose injuries ledto near total disability.

After inflation, the Andrews v Grand & Toy Alberta Ltd general damages cap is now about $365,000.$25,000,000 is a claim of over 34 times the maximum permitted by the Supreme Court of Canada for two claimants. [26] Furthermore, the Tomas’ general damages claim is not linked to any alleged factual basis. There is no indication that theTomas have suffered any injuries that would warrant a damages cap quantum, let alone $25,000,000.

I therefore request the Tomasindicate the legal basis for their $25,000,000 claim and how the Statement of Claim pleads the relevant facts to establish that legal basis. [27] Further, the Tomas seek that the Court create a “independent impartial watchdog committee” to oversee operations of ServiceAlberta and the Consumer Investigation Unit. This appears to be an impossible remedy given the authority of this Court. I thereforerequest that the Tomas indicate how the Court, rather than the Legislature, has the jurisdiction to create a new administrative tribunal. C.

Alternative Remedy [28] As I understand the Tomas’ complaint, they alleged that government actors did something wrong in relation to a ConsumerInvestigation Unit investigation of the Northstar auction. It is an abuse of process to pursue judicial proceedings without first exhausting

the administrative regime: Al-Ghamdi v Alberta , 2017 ABQB 684 at paras 126-128 , aff’d 2020 ABCA 81 . [ 29 ] The Tomas could have conducted a judicial review at this Court to challenge the decision of Service Alberta to not pursue an investigation of Northstar, and/or to have ordered steps under the Consumer Protection Act , RSA 2000, c C-26.3 in response to the Tomas’ complaint against Northstar. [ 30 ] I therefore request the Tomas to indicate why the Statement of Claim is not an abuse of process since the Tomas did not exhaust their judicial review administrative law alternative to obtain the investigation and sanctions to Northstar that they now complain about.

IV. Conclusion [ 31 ] The Tomas’ Statement of Claim appears to be suitable AVAP candidate for review pursuant to CPN7. The Court seeks responses from the Tomas to the following questions: 1) How does the Statement of Claim provide an adequate basis for the Court and the Defendants to make a meaningful response? 2) How does the Statement of Claim not seek disproportionate or impossible remedies? 3) Why is the Statement of Claim not an abuse of the Court given the Tomas did not exhaust their alternative remedy or remedies? [ 32 ] CPN7 now advances to its second step.

This step consists entirely of written submissions; there will be no Court appearances or oral argument. The next steps are: 1) The Tomas have 14 days to provide a Written Submission of no more than a total of 10 pages, to be filed and served, as described in para 3(

b) of CPN7. The Written Submission must be clearly addressed “To the Attention of Associate Chief Justice K.G. Nielsen”. 2) If this Court receives no Written Submission by that deadline, the Court will make its final decision on whether the Statement of Claim should be struck out in whole or in part under r 3.68 of the Alberta Rules of Court (see CPN7, para 3(c)). 3) If the Tomas provide and serve a Written Submission, then the Defendants each have seven days to provide a Written Reply of up to 10 pages in length (see CPN7, para 3(d)).

The Written Replies must be clearly addressed “To the Attention of Associate Chief Justice K.G. Nielsen”. 4) After the Court receives the Tomas’ Written Submission and the Defendants’ Written Replies, if any, the Court will make its final decision on whether the Statement of Claim should be struck out in whole or in part, under r 3.68 of the Alberta Rules of Court (see CPN7, para 3(e)). [ 33 ] The Court will prepare and serve an Interim Order staying this action (see CPN7, para 7). The Tomas’ approval of that Order is not required, pursuant to r 9.4(2)(

c) of the Alberta Rules of Court . Dated at the City of Edmonton, Alberta thi s 11 th day of February, 2021. K.G. Nielsen A.C.J.C.Q.B.A. Appearances: None