Executive Summary: Key Legal and Evidentiary Issues

• Persistent relitigation of issues concerning the Burnell and Ness properties despite prior court decisions.

• Failure to disclose relevant documents and comply with court orders, including the 2015 order and practice directions.

• Challenges regarding the standing of corporate plaintiffs and Knight’s authority to represent them in appeals.

• Repeated collateral attacks on previous judgments, including allegations of forgery and fraudulent amendments to mortgage documents.

• Court’s inability to dismiss appeals as an abuse of process at the chambers stage due to jurisdictional limits.

• Orders issued for security for costs and restrictions on future filings to address vexatious litigation.

Background and facts of the case

Russ Knight, on his own behalf and through several corporations he controls, initiated litigation against Lake St. Martin First Nation (LSM) concerning two properties: the Burnell Street apartment building and the Ness Avenue former school building. In September 2018, Knight and three corporate plaintiffs (5750351 Manitoba Ltd., 4711824 Manitoba Ltd., and Hudson Bay Traders Ltd.) commenced an action against LSM, claiming over $20 million in damages for unpaid rent and utilities and alleging unjust enrichment (the 2018 action). In September 2022, 5750351 Manitoba Ltd. and 10046552 Manitoba Ltd. commenced another action against LSM, claiming over $1 million for alleged breach of a twenty-year lease agreement for the Ness property (the 2022 action). Both actions were consolidated in April 2024, with trial set for January 8, 2024.

On the first day of trial, Knight disclosed several documents he had not previously produced, including rent rolls, tenancy agreements, and rental unit condition reports. The trial was adjourned to allow LSM to review these documents. It was also discovered that Knight had not complied with a 2015 order involving Cameron Stephens Financial Corporation (CSFC), which required notice to or consent of the receiver before commencing litigation regarding the Burnell property. CSFC had not been notified of the proceedings. The trial was adjourned again, and CSFC and the receiver were notified.

At a mid-trial conference on March 8, 2024, it was confirmed that a discharge of the 2015 order had been filed on March 6, 2024, but CSFC maintained its priority claim regarding any damages. LSM’s counsel also noted that Knight had not complied with the Court of King’s Bench Practice Direction requiring disclosure of related proceedings. Knight had ongoing related litigation alleging forgery and fraudulent amendments to mortgage documents.

Procedural history and motions

In April 2024, LSM brought a motion for costs based on Knight’s litigation conduct, including a request for throwaway costs and security for costs. On August 22, 2024, the trial judge ordered the plaintiffs to pay a previous costs award of $8,841.93 and throwaway costs of $88,340.87, which were paid by 10046552 Manitoba Ltd. Each plaintiff was also ordered to post security for costs of $21,000, which was paid into court for all plaintiffs by counsel for 10046552 Manitoba Ltd.

On March 17, 2025, the trial judge heard LSM’s motion to strike 5750351 Manitoba Ltd. as a plaintiff in the 2022 action, finding that 5750351 Manitoba Ltd. had no legal interest in the Ness property. The judge ordered 5750351 Manitoba Ltd. struck as a plaintiff from the 2022 action without leave to re-file or amend the pleading and struck certain paragraphs of the statement of claim. Knight appealed this decision (File No. AI25-30-10219).

Knight also brought a motion for nunc pro tunc (retroactive) relief to validate paragraphs of the statement of claim regarding the Burnell property, which had been commenced in violation of the 2015 order. The trial judge denied this relief and struck the relevant paragraphs without the right to re-file or amend. Knight appealed this decision (File No. AI25-30-10217).

Other related proceedings included actions brought by Knight and his corporations against CSFC, lawyers, and law firms, all of which were dismissed, often with findings of vexatious litigation and orders that Knight and others not commence further proceedings without leave of the court. Knight has been a party to over seventy matters in the Court of King’s Bench and at least eight appeals in the Manitoba Court of Appeal since 1995.

Discussion of policy terms and relevant legal principles

The court applied section 31.1 of The Court of Appeal Act, CCSM c C240, to determine whether Knight should be declared a vexatious litigant. The court reviewed the factors for vexatious proceedings, including relitigation of settled issues, improper purposes, and failure to pay costs. The court noted that Knight’s claims regarding the properties had been repeatedly determined by courts in Manitoba, often by default or summary judgment or by being struck.

The court also considered section 31.3 of the Act regarding abuse of process but found that, as a chambers judge, it lacked jurisdiction to dismiss the appeals as an abuse of process. Section 31 of the Act was applied to order security for costs, with the court setting the amount at $3,000 per appeal.

Outcome and ruling

The Manitoba Court of Appeal granted LSM’s motions in part. Knight was declared a vexatious litigant and prohibited from initiating further appeals or filings in connection with the properties without leave of a judge of the Court. Knight was required to pay all outstanding costs awards before seeking such leave. The registry was authorized to reject non-compliant filings and report violations. Security for costs was set at $3,000 for each appeal (total $6,000), to be paid by October 15, 2025, failing which the appeals would be struck without further order. The request to dismiss the appeals outright was denied due to jurisdictional limits. LSM was awarded tariff costs for the present motions. The underlying litigation remains pending, and no specific monetary award was granted in this decision beyond the security for costs and tariff costs.