master schlosser

3.68: Court options to deal with significant deficiencies
5.33: Confidentiality and use of information
6.11: Evidence at application hearings
7.3: Summary Judgment (Application and decision)
13.18: Types of affidavit

Case Summary

Three of the Defendants applied under Rule 3.68 to strike the Plaintiff’s Amended Statement of Claim in which the Plaintiff alleged harassment and retribution. Master Schlosser observed that the Defendants should have relied on Rule 7.3 and the relevant authorities under that Rule to seek Summary Judgment, instead of Rule 3.68 which requires the Court to proceed on the assumption that all allegations in the Statement of Claim are true, however “preposterous”. Further, the tests for Rules 3.68 and 7.3 are different: a Rule 3.68 Application requires the Court to identify a “fatal flaw in the lawsuit” to the “plain and obvious” or “beyond a reasonable doubt” standard; whereas, a Rule 7.3 Application requires the Court to decide whether a “fair and just determination” can be made on the record. As a result, Rule 3.68 is often not the optimal choice for Applicants, and as Rule 3.68 typically prompts an amendment, authorities have suggested that “more money is wasted on this rule than any other.”

Master Schlosser concluded, pursuant to Rule 3.68(2)(a), that the Court had the jurisdiction to adjudicate the claims in this Action. Master Schlosser considered the Defendants’ Rule 3.68 Application in detail, and reviewed Rule 3.68(2)(b), which requires the Court to consider whether the lawsuit disclosed no reasonable claim. Master Schlosser noted that pursuant to Rule 3.68(3), the parties may not submit evidence, and the Court must proceed on the basis that facts alleged in the Amended Statement of Claim are either true or capable of being proven. In this case, the Court was unable to conclude that it was beyond doubt that the Plaintiff’s Amended Statement of Claim disclosed no reasonable claim. Unlike Rule 3.68(2)(b), the other portions of Rule 3.68 permit the use of evidence. Master Schlosser reviewed the parties’ Affidavits and held that none of the evidence in the Defendants’ Affidavit was admissible. Mater Schlosser stated that, since a Rule 3.68 Application is a “final application,” the evidence must be first-hand, pursuant to the technical rules under Rule 13.18(3). Further, Rule 5.33 prevents “evidence taken in one lawsuit from being used in another.” Although Rule 6.11(1)(f) may permit the use of an Affidavit sworn in an earlier Action, this use requires notice of intention to the other side and leave of the Court. As a result, there was very little admissible evidence in the Application other than the Plaintiff’s Affidavits.

Master Schlosser also considered Rule 3.68(2)(c) and Rule 3.68(2)(d), noting that the Rules ask whether the commencement document is “frivolous, irrelevant or improper,” or whether it “constitutes an abuse of process.” The Court noted that the Defendants’ authorities that “bore the hallmarks of vexatious litigation” were not on point, and that “vexatious” was no longer part of the current Rule 3.68. The Court commented that the definitions in older case law tend to be circular in the context of Rule 3.68, and opined that “the Courts should be slow and cautious about labelling litigants or branding claims as preposterous”, and unless a claim is obviously and prima facie inadequate, “the Court owes litigants a duty to explain why a claim cannot succeed and should be dismissed summarily”.

The Court held that much of the Plaintiff’s Amended Statement of Claim was irrelevant or improper. Master Schlosser attempted to review the Amended Statement of Claim to potentially edit and remove improper materials to salvage the claim, but this proved to be impossible in this case, and the Court noted that even the Plaintiff’s Affidavit disclosed the fact that she too believed her Claim to be hopeless and unprovable. Master Schlosser held that maintaining an Action that a claimant knows cannot be proven “is improper or frivolous for the purpose of Rule 3.68(2)(c)”. The Application was allowed, and the Plaintiff’s lawsuit was struck.

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