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Can an owners’ corporation recover its legal costs from vexatious litigants?

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[Jimmy-T]

We should probably start by defining what a vexatious litigant is. Some people use litigation to achieve resolution to a dispute, and that’s the purpose of litigation. It isn’t actually to run the theatrics of a hearing. It’s to achieve a desired outcome, resolution of a dispute between two people. Settlement during litigation typically leads to a finite resolution of that dispute.

However, when people can’t finalise a resolution between themselves and they go to a hearing, they may find themselves in a situation where they get a decision that they don’t agree with.

And everyone has a right of appeal against that decision. And if they don’t like the appeal decision, they might appeal that further and they might appeal that further and they might lose three or four appeals.

But that’s not necessarily a vexatious litigant. That’s just a litigant who is running appeals, who is not happy with the legal outcome in their case.

But if you have a person who, who just is triggering litigation or triggering mediation and withdrawing it before the hearing and just causing angst for people by having to deal with the pressures of litigation. If there’s no merit behind their or substance behind their allegations, and this has occurred several times, then you have a vexatious litigant. In essence, it’s somebody who’s using litigation to pressure people for an unjust result.

So a vexatious litigant is somebody who’s hassling people through litigation that has no merit of success and the Supreme Court can decree that person to be a vexatious litigant. There have been strata vexatious litigants who have been taken to the Supreme Court and had been ordered that they can’t commence any litigation regarding a certain type of dispute in a certain type of owners corporation without the consent of the court. And that’s the benefit of going all that way to record the person as a vexatious litigant.

At the tribunal level, if it decides the case had no merit or was hopeless, and the litigant was warned about that, the respondents (defendants) can get a cost order, meaning the person who persisted in the case has to pay both sides’ legal costs. So anyone running a case that has no chance of success, and they know it,  is exposed to paying the owner’s corporation’s litigation costs.

NB: The above response has been edited from a transcript of the webinar.

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