Wright v. Urbanek

Wright v. Urbanek Collection Decisions of the Court of Appeal Date 2019-10-17 Neutral citation 2019 ONCA 823 Docket numbers C66581 Judges Hoy, Alexandra; van Rensburg, Katherine; Roberts, Lois B. Subject Family Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Wright v. Urbanek, 2019 ONCA 823 DATE: 20191017 DOCKET: C66581 Hoy A.C.J.O., van Rensburg and Roberts JJ.A. BETWEEN John (Jack) Wright Plaintiff (Appellant) and Anne Urbanek on her own behalf and as Trustee of the Wright Family Trust; as Trustee for the A. Urbanek Family Trust and as Estate Trustee for the Estate of Anne Wright, Jacqueline Strauss on her own behalf and as Trustee of the Wright Family Trust; as Trustee for the J. Strauss Family Trust and as Estate Trustee for the Estate of Anne Wright, Anjay Limited, Michael Tibollo, Nina Deluca Ford and Jean Carberry Defendants (Respondents) Gregory M. Sidlofsky and Matthew M.A. Stroh, for the appellant Andrew Finkelstein, for the respondents Heard: October 8, 2019 On appeal from the order of Justice Michael A. Penny of the Superior Court of Justice, dated January 15, 2019. REASONS FOR DECISION [1] The appellant appeals the order of the motion judge striking his statement of claim and dismissing his action against only the respondents, on the basis that it was res judicata, a collateral attack on the order of Conway J., dated October 7, 2016, and an abuse of process. The respondents are the appellant’s daughters and Anjay Limited. [2] In his action, the appellant sought to challenge the validity of a family trust that was established in connection with an estate freeze involving Anjay Limited that the appellant and his late wife instituted in 2007. He argues that the motion judge erred in law, and unreasonably extended the application of the principles of res judicata, collateral attack and abuse of process, by considering that the appellant could have raised the issue of the validity of the family trust in response to his daughters’ oppression application. That application resulted in the order of Conway J., which, among other things, ordered that the appellant be removed as a trustee of the family trust and as an officer and director of Anjay, the preference shares of Anjay issued to him on the estate freeze be redeemed, and the shareholder loan he made to Anjay be repaid. [3] In the alternative, the appellant argues that the motion judge erred in principle in refusing to exercise his discretion to nonetheless allow his claim to proceed because the appellant “has lost substantially all of his assets as a result of an estate freeze that he never understood or agreed to”. [4] We are not persuaded that there is any basis for this court to interfere with the motion judge’s order. [5] As the motion judge noted: Four days after [the appellant] lost the daughters’ oppression application, he commenced the Action. Contrary to the position that he asserted in the daughters’ oppression action, (which was a fight about how many preference shares in Anjay he held, whether he should be removed as trustee of the [family trust] and as a director and officer of Anjay and whether his preference shares in Anjay should or should not be redeemed), in the Action [the appellant] now alleges that the [family trust] is void and that he holds 100% of the common shares of Anjay and holds no preference shares. [6] The motion judge found that the appellant, having lost the daughters’ oppression application, sought to advance “a new and inconsistent theory”. He observed that, in the oppression application, “[i]t was entirely open to [the appellant] to advance the position that he did not own any preference shares because the [family trust] was not valid”. [7] As the motion judge observed, the appellant also asserted, in an application he commenced in August of 2016 alleging that his daughters had acted in a manner that was oppressive, that he owned preference shares of Anjay and was not a beneficiary of the family trust. That application was initially adjourned and has since been the subject of a motion to strike that was granted, which the respondent has separately appealed. [8] The doctrine of abuse of process arises out of the court’s inherent jurisdiction to prevent misuse of the court’s procedure in a way that would bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 35. One circumstance in which abuse of process has been applied is to strike out an action where the litigation before the court is in essence an attempt to relitigate a matter the court has already decided: see Behn v. Moulton Contracting Ltd., 2013 SCC 26, [2013] 2 S.C.R. 227, at paras. 39-41; Toronto (City) v. C.U.P.E., Local 79, at paras. 35-38. [9] The cause of action challenging the validity of the family trust was known to the appellant and could have been pursued by him on the oppression application. Indeed, in their reply factum on the daughters’ oppression application, the daughters noted that the appellant seemed to be questioning the validity of the family trust in his factum and responded to that assertion. The appellant ultimately did not pursue the issue before Conway J. [10] Had he done so, and satisfied Conway J. that the family trust was invalid, the result of the daughters’ oppression application would clearly have been different. If the family trust were invalid and the appellant owned no preference shares, Conway J. would not have ordered the redemption of the appellant’s preference shares. It is unclear what, if any, oppression remedy Conway J. would have ordered. [11] A challenge to the validity of the family trust would interfere with the implementation of Conway J.’s order, which was upheld on appeal. Raising the issue now is tantamount to relitigating the daughters’ oppression application, which has already been decided. To do so would be to misuse the court’s procedures in a way that would bring the administration of justice into disrepute. [12] The doctrine of abuse of process alone warranted striking the appellant’s claim and dismissing his action. Further, there is no basis on which to interfere with the motion judge’s decision not to exercise his residual discretion to nonetheless allow the appellant’s action to proceed against the respondents. In response to his argument that he never understood or agreed to the estate freeze, we note that the motion judge did not strike the action as against the various professional advisors who were retained to implement the estate freeze in 2007. [13] Given this conclusion, it is unnecessary for us to address the appellant’s other arguments. [14] The appeal is dismissed. The respondents are entitled to their costs of the appeal, fixed, as agreed, in the amount of $7,500, including HST and disbursements. “Alexandra Hoy A.C.J.O.” “K. van Rensburg J.A.” “L.B. Roberts J.A.”