Executive Summary: Key Legal and Evidentiary Issues

• The Court stayed the appeal because 5448124 Manitoba Ltd., a corporation, was not represented by a lawyer, in accordance with the common law rule.

• No exceptional circumstances were proven to justify allowing Mr. Knight, a non-lawyer, to represent the corporation in the appeal.

• The appeal sought to challenge an order striking the plaintiff’s claim and declaring Mr. Knight and Ms. Simes vexatious litigants, issues already determined in previous unappealed or struck proceedings.

• Mr. Knight and Ms. Simes were previously declared vexatious litigants for commencing repetitive actions challenging the validity of a 2015 mortgage.

• The Court found no sufficient evidence of the plaintiff’s impecuniosity to excuse legal representation.

• Mr. Knight's prior conduct, including filing multiple dismissed or struck claims and being a key witness, weighed against granting him leave to represent the corporation.

Background and procedural history
In 2015, 5448124 Manitoba Ltd. borrowed $9,425,000 from Cameron Stephens Financial Corporation (CSFC) to refinance a loan on an apartment building. The loan was secured by a mortgage and a personal guarantee executed by Mr. Knight and Ms. Simes. After the plaintiff defaulted on the mortgage, CSFC applied for the appointment of a receiver, and a receivership order was granted on October 16, 2015. At that time, the plaintiff did not challenge the validity of the mortgage.

CSFC subsequently issued a statement of claim to enforce the guarantee against Mr. Knight and Ms. Simes. A motion judge granted summary judgment in CSFC’s favour, upheld the validity of the mortgage, and rejected allegations by Mr. Knight and Ms. Simes that the mortgage was forged. Neither the plaintiff nor the individual guarantors appealed these decisions.

In 2021, Mr. Knight and Ms. Simes filed new claims against CSFC and its legal counsel. The same motion judge again granted summary judgment, reaffirming that the validity of the mortgage had already been conclusively determined. Appeals by Mr. Knight and Ms. Simes were later struck after they breached consent orders requiring them to post security for costs. They also failed in subsequent motions for extensions of time to appeal.

Between late 2023 and mid-2024, Mr. Knight, Ms. Simes, and the plaintiff filed six new statements of claim, again disputing the mortgage and enforcement steps taken after the original default. One of these new actions—filed by 5448124 Manitoba Ltd. against CSFC and Peter Ginakes—is the subject of this appeal. On November 8, 2024, the motion judge struck each of the six actions and declared Mr. Knight and Ms. Simes vexatious litigants in relation to matters connected to the mortgage and the plaintiff’s default. Only the order related to the plaintiff's claim was appealed.

Legal principles and policy considerations
In deciding the motion, the Court of Appeal reaffirmed the common law rule that corporations must be represented by a lawyer in appeal hearings, absent exceptional circumstances. This principle was most recently set out in 7602678 Manitoba Ltd v 6399500 Manitoba Ltd, 2024 MBCA 59. The Court reviewed factors such as the plaintiff’s financial capacity, the complexity of the legal issues, Mr. Knight’s competence and conduct, and proportionality concerns.

The Court found that the plaintiff had not provided sufficient evidence of impecuniosity. The only financial information submitted was Mr. Knight’s 2023 tax return showing $29,490 in self-employed income, CPP benefits and pension income totalling $21,168.72, and Ms. Simes’ notices of assessment for 2021 and 2023 showing total incomes of $48,622 and $5,735. No corporate financial statements, bank records, or current financial data for the plaintiff were provided.

The Court noted that Mr. Knight’s legal documents were difficult to understand and filled with allegations against former counsel and judicial officers, including claims of incompetence, criminal behavior, forgery, and collusion. The Court found his involvement "demonstrably unhelpful" and that he was a key witness in the proceedings. His history of unsuccessful litigation and being declared a vexatious litigant weighed heavily against granting him leave to represent the corporation.

Outcome of the decision
The Court stayed the appeal and ordered that no further court documents be filed on behalf of the plaintiff until it retains legal counsel who undertakes to appear before the Court. The plaintiff was given until May 8, 2025, to retain a lawyer, failing which the appeal would be deemed abandoned. The defendants were awarded tariff costs for the motion. No amount was stated.