Executive Summary: Key Legal and Evidentiary Issues

• Defendants ASM Mortgages Inc. and Jeffrey Beleskey brought a joint motion under Rule 21.01(3)(d) to strike the Plaintiffs' claim as frivolous, vexatious, and an abuse of process.
   
• Plaintiff Karen Hortensius opposed the motion and cross-moved for leave to serve and file a fresh as amended statement of claim.
   
• Multiple overlapping proceedings arising from the mortgage default and subsequent enforcement formed the backdrop to the motion.
   
• Res judicata and abuse of process principles were central to the court's analysis of whether the claim could proceed.
   
• The rule against suing an adverse party's lawyer barred the claim against Mr. Beleskey, who had acted as counsel for ASM.
   
• No monetary damages were claimed or determined in this decision, as the Plaintiffs sought only a certificate of pending litigation, mediation, and unspecified damages to be assessed later.
   

Facts of the case

The Plaintiffs, Karen Hortensius and Bradley Crnkovich, defaulted on a mortgage over a property at 37 Yeoger Drive, Port McNicoll, Ontario on or about April 10, 2023. After ASM Mortgages Inc. discovered renovation work at the property in October 2023, it obtained an ex parte injunction restraining further alterations, which was renewed in November 2023. ASM commenced a mortgage enforcement action in December 2023 seeking payment and possession of the property. Both Plaintiffs were subsequently noted in default in that action, and Ms. Hortensius was found in contempt of the injunction order. A later motion to set aside that contempt finding was dismissed in October 2024, with the court finding the Plaintiffs had admitted their default and had no defence. ASM obtained default judgment in January 2025 and a writ of possession approximately three months later. The Plaintiffs then commenced the present action, and in May 2025 a motion for a certificate of pending litigation was dismissed as without merit. The property was ultimately sold under power of sale to Jenna Ladouceur on November 19, 2025. Further motions brought by the Plaintiffs seeking damages, contempt findings against the Defendants, and return of the property were dismissed in January 2026.

Policy and legislative provisions at issue

The motion turned on Rule 21.01(3)(d) of the Rules of Civil Procedure, which permits a defendant to move to have an action stayed or dismissed on the ground that it is frivolous, vexatious, or otherwise an abuse of the court's process. Unlike motions under Rule 21.01(1)(a) and (b), a motion under Rule 21.01(3) permits the court to consider evidence without leave or consent of the parties. The court also applied the doctrine of res judicata, which precludes relitigation of issues finally determined on their merits, and the broader abuse of process jurisdiction described in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63. In addition, the well-established rule against suing an adverse party's lawyer, discussed in Chuvalo v. Worsoff, 2022 ONSC 4079, and the narrow exceptions to that rule set out in 9383859 Canada Ltd. v. Saeed, 2020 ONSC 4883, and 2116656 Ontario Inc. v. Grant and LLF Lawyers LLP, 2019 ONSC 114, were directly at issue in assessing the claim against Mr. Beleskey.

Reasoning and analysis

Justice McCarthy found that the claim against Mr. Beleskey disclosed no reasonable cause of action, since as counsel for the opposing party ASM in the earlier proceedings, he owed no duty of care to the Plaintiffs, and the pleading contained no material facts capable of establishing the narrow exceptions to that principle. Turning to ASM, the court held it was plain and obvious that the claim could not succeed because the mortgage default, injunction, default judgment, writ of possession, and sale of the property had all been finally determined in earlier proceedings, and the Plaintiffs no longer held any legal or equitable interest in the property. Attempts to challenge or undo those outcomes amounted to impermissible collateral attacks and abuse of process. Since the claims against Mr. Beleskey and ASM were struck as disclosing a radical defect, the court applied the principle from Roche v. McLeod Law Firm, 2018 ONSC 2760, that leave to amend should be denied where no amendment could cure the defect. The proposed 150-page amended claim was found to raise the same previously determined issues and was, at its core, an equally flagrant abuse of process. Regarding the Plaintiffs' cross-motion, the court found the relief sought against ASM and against the proposed new defendant, Ms. Ladouceur, to be inappropriate or unavailable, particularly since Ms. Ladouceur had not been served with the motion.

Ruling and overall outcome

The Defendants' motion was allowed. The Plaintiffs' claims against ASM Mortgages Inc. and Jeffrey Beleskey were struck in their entirety without leave to amend, making the Defendants the successful parties on the motion. The Plaintiffs' cross-motion was dismissed, save for the issue of an accounting for the proceeds of sale of the property, which was adjourned to a case conference along with the status of the claim against the remnant defendant, Scott Green. No monetary damages were awarded, granted, or ordered in this decision; the issue of costs arising from the motion was left to be addressed by the parties or at the scheduled case conference.