Docket: T-1098-24
Citation: 2025 FC 621
Ottawa, Ontario, April 3, 2025
PRESENT: The Honourable Madam Justice McVeigh
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BETWEEN: |
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ATTORNEY GENERAL OF CANADA |
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Applicant |
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and |
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LILIANA KOSTIC |
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Respondent |
JUDGMENT AND REASONS
I. Overview
[1] The Attorney General of Canada brings this Application under section 40 of the Federal Courts Act, RSC, 1985, c F-7, seeking an order declaring the self-represented Respondent, Liliana Kostic, to be a vexatious litigant and imposing restrictions on her access to this Court.
[2] Ms. Kostic is deeply invested in her litigation. At the hearing, she argued against this Application with considerable emotion and intensity.
[3] I note that the merits of Ms. Kostic’s disputes with the Attorney General and other persons are not at issue in this Application. Rather, the Application concerns Ms. Kostic’s conduct during litigation before this Court.
[4] In my view, Ms. Kostic’s litigation conduct is vexatious. For the reasons that follow, I will grant the Application.
II. Facts
[5] The vexatious litigant issues raised stem from nearly two decades of litigation before the Federal Court and Federal Court of Appeal [collectively, the Federal Courts], and the trial and appellate courts in Alberta. Ms. Kostic’s extensive litigation history originates from the termination of her employment by the Piikani Nation in Alberta.
[6] In 2004, Ms. Kostic was engaged by the Piikani Nation to manage funds paid by Canada and Alberta under a 2002 settlement agreement [the Settlement Agreement]. Under the Settlement Agreement, $63.4 million was placed into a Piikani Nation trust account as compensation for a portion of Piikani Nation lands that were flooded during the development of a hydroelectric power plant.
[7] The Piikani Nation selected Ms. Kostic to serve in a trust advisory role. She continued in this role until 2006, when the Piikani Nation terminated her employment.
[8] In November 2006, the Piikani Nation filed an action against Ms. Kostic in the Alberta Court of Queen’s Bench (now the Alberta Court of King’s Bench). The claim alleged, among other things, that Ms. Kostic had been negligent and had breached her fiduciary duties to the Piikani Nation (Action No. 0601-13081). This action remains ongoing.
[9] Following the commencement of Action No. 0601-13081, Ms. Kostic initiated several claims against the Piikani Nation and other parties, including in the following actions:
- a third-party claim in Action No. 0601-13081;
- a wrongful dismissal claim against the Piikani Nation (Action No. 0801-05039);
- a negligence claim against legal counsel (Action No. 1501-11111);
- two indemnity claims against CIBC Trust Company (Action Nos. 1601-01693 and 1701-01341); and
- a counterclaim against multiple parties (Action No. 2101-06345).
[10] In short, the two initial actions – Action Nos. 0601-13081 and 0801-05039 – have “grown to over 30 actions in Alberta involving similar parties and similar issues, although neither the Nation nor Ms. Kostic are parties in all of them”
(Piikani Nation v Kostic, 2024 ABKB 137 at para 8 [Piikani 2024]).
[11] In Piikani Nation v Kostic, 2018 ABCA 234 [Piikani 2018] – a decision dismissing six of Ms. Kostic’s appeals of case management orders – the Alberta Court of Appeal summarized the history of Ms. Kostic’s Alberta litigation up until that point:
[2] Pursuant to a 2002 Settlement Agreement, the Piikani Nation agreed to allow a portion of its lands to be used for the development of the Oldman River Dam, which included a hydro-electric power plant. In exchange, the Piikani Nation received $64.3M that was settled in the Piikani Trust. The Settlement Agreement contemplated, among other things, that the trustee of the Piikani Trust could invest the funds. Piikani Investment Corporation (which later filed a proposal in bankruptcy through the Grant Thornton Group as trustee) was designated as the beneficiary of the Piikani Trust, as the Piikani Nation’s investment vehicle. The trust funds were to be invested through “Institutional Investment Counsellors”. The CIBC Trust Corporation was selected as the investment trustee.
[3] The trust agreement between the Piikani Nation and CIBC Trust conferred upon the Piikani Nation the power to appoint not only the broker (the “Institutional Investment Counsellor”) but also such additional advisors as the Piikani Nation directed the investment counsellor to retain.
[4] The appellant, Ms. Kostic, was the advisor selected by the Piikani Nation, and the Piikani Nation covenanted with Ms. Kostic that it would direct whichever investment counsellor was appointed to retain her. At first the Piikani Nation retained CIBC Wood Gundy as the institutional investment counsellor, and directed it to hire Ms. Kostic as the advisor. When Ms. Kostic changed employers, Raymond James was retained as the institutional investment counsellor, and it was directed to hire her to be the advisor: see Kostic v Piikani Nation, 2017 ABCA 53 at paras. 5-12, 48 Alta LR (6th) 310.
[5] In November of 2006, the Piikani Nation gave notice to Ms. Kostic of termination of their business agreement. The Piikani Nation and Piikani Investment Corporation commenced QB Action #0601 13081 against Ms. Kostic, Raymond James, some band councillors, and others alleging negligence, breach of fiduciary duty and conspiracy (the “Negligence Action”). This action alleges irregularities in the appointment of Raymond James and other dealings with the trust funds, that Ms. Kostic and Raymond James were not qualified to be appointed, and that the trust funds were placed in unauthorized investments. In a third party notice in this action, Ms. Kostic claims indemnity from CIBC World Markets Inc.
[6] The Negligence Action specifically pleads “fraud” and other misconduct on the part of Ms. Kostic and some band councillors. Particulars of those allegations included the use of “Swift Transfers” and “blocking of accounts,” alleged to be part of a conspiracy to misapply funds in the Piikani Trust. Ms. Kostic pressed the Piikani Nation to produce evidence in support of these allegations, and any resulting damage. The Piikani Nation maintains that it never alleged that “blocked accounts” were created, but that CIBC had “blocked some existing accounts”. The blocking had effectively prevented any damage arising from any “Swift Transfers.” As a result, the events surrounding the Swift Transfers were reduced from an independent cause of action to alleged particulars of other pleaded misconduct.
[7] Ms. Kostic commenced another action, QB Action #0801 05039, against the Piikani Nation for wrongful termination of their business agreement, claiming financial losses as a result of being denied the opportunity to earn commissions as an investment advisor (the “Wrongful Termination Action”). She also claimed to have suffered a stroke as a result of certain embezzlement allegations made against her upon her termination.
[8] Ms. Kostic later commenced QB Action #1601 01693 against Canadian Imperial Bank of Commerce, CIBC World Markets Inc. and CIBC Trust Corporation claiming, among other things, full indemnity in the Negligence Action (the “Indemnity Action”).
[9] Due to the complexity and intensity of the litigation, a case management judge was appointed. He formulated and amended a detailed litigation plan. One feature of the litigation plan was that no applications could be brought unless they were pre-screened by the case management judge, and “leave” to bring that application was granted (see the order of June 22, 2016, EKE 1701-0063AC A480). The present six appeals arise from the case management process.
[10] As a part of the litigation plan, the case plan, the case management judge had directed that no new claims could be brought without prior approval. Because of concerns about a limitation period, Ms. Kostic commenced, without prior approval, QB Action #1701 01341 against CIBC Trust Corporation. It claimed that CIBC Trust was complicit in the termination of her agreement with the Piikani Nation, and that it had played a part in commissioning the Navigant Report that resulted from an investigation into the affairs of the Piikani Trust. The claim was for damages for interference with economic relations through knowingly making false allegations of embezzlement and other misconduct. This action also seeks production of the Navigant Report, which is subject to a claim of litigation privilege (see infra, paras. 48-56). Her subsequent request for approval to bring that action was denied: Piikani Nation v Raymond James Ltd., 2017 ABQB 140 at para. 30 (see infra, paras. 57-61).
[12] While the Court of Appeal articulated useful background information, I again note that it is not the merits of Ms. Kostic’s underlying litigation that is at issue in this Application.
[13] In 2013, an Alberta Court of Queen’s Bench case management judge implemented a litigation plan requiring parties to seek leave before filing applications for several connected actions (Piikani 2018 at para 31; Piikani 2024 at paras 9-11). According to the Alberta Court of Appeal, the case management judge sought “to control the proliferation of applications being brought, and to manage the order in which issues would be dealt with”
(Piikani 2018 at para 31). The case management judge denied several of Ms. Kostic’s leave applications, resulting in the appeals in Piikani 2018.
[14] In 2020, while litigation remained active in the Alberta courts, Ms. Kostic turned to the Federal Courts. Between 2020 and 2023, Ms. Kostic initiated one action (T-680-20), two applications (T-348-21 and T-713-22), and two appeals (A-116-23 and A-272-23). She has been involved in at least eight other judicial review applications initiated by other applicants (T-1344-20, T-1224-21, T-1850-21, T-714-22, T-2317-22, T-267-23, T-319-23, and T-320-23), as well as two further appeals (A-115-22 and A-117-23).
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Issues
[15] Should this Court declare Ms. Kostic a vexatious litigant?
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Law
[16] Section 40 of the Federal Courts Act (see Appendix A) empowers the Federal Court to declare a litigant vexatious, considering concerns such as the litigant’s “duplicative proceedings; frivolous litigation; the style and manner of their litigation; their motivations, intentions, attitudes, and capabilities while litigating; or a combination of these examples”
(Canada (Attorney General) v Azubuike, 2024 FC 1233 at para 7). The aim of such declaration is to prevent litigants from wasting finite judicial resources and inflicting harm on parties or the Court (Canada v Olumide, 2017 FCA 42 at paras 19, 22 [Olumide]).
[17] According to the Federal Court of Appeal, the threshold for a declaration of vexatiousness is based on the purpose for that declaration: “the Federal Courts are community property that exists to serve everyone, not a private resource that can be commandeered in damaging ways to advance the interests of one”
(Olumide at para 17; Simon v Canada (Attorney General), 2019 FCA 28 at paras 8-9 [Simon]). Therefore, “those who misuse unrestricted access in a damaging way must be restrained”
(Olumide at para 18).
[18] Careful not to restrict the parameters of a vexatious litigant with a precise definition, Justice Stratas explained that “[v]exatiousness comes in all shapes and sizes”
(see Olumide at para 32). Importantly, the “hallmarks”
or “badges”
of vexatiousness are non-binding (Olumide at para 34). Broadly, litigants may be harmful to the court system, or they may be ungovernable (Simon at paras 14-15). The practical question is whether these qualities rise to a level justifying a leave-granting process for the litigant’s proceedings (Simon at paras 16, 18).
[19] Further, given that the issue in a vexatious litigant application is a question of “regulation, not whether the litigant’s access to court should be forever banned,”
an exhaustive account of the litigant’s history is unnecessary; “focused, well-chosen evidence”
will suffice (Olumide at para 36). However, the applicant bears the burden of proof to adduce such evidence (Olumide at para 38).
[20] Finally, I note the Federal Court of Appeal’s guidance that the Court’s reasons need not be lengthy.
(Olumide at paras 39-40).
V. Evidence and Procedural History
[21] This Application is supported by the affidavit of Leah Goulet, affirmed on May 1, 2024, along with appended documentary evidence related to several court proceedings. The Attorney General’s evidence provides a detailed account of Ms. Kostic’s judicial history at both the federal and provincial levels and the Attorney General’s consent, though only an unsigned version of the consent was provided in the materials.
[22] In response, on August 12, 2024, Ms. Kostic submitted a 45-page document titled “Written Submissions,”
which includes 10 pages of argument requesting an extension of time and the admission of new evidence. The latter requests were rejected in the Motion to Strike Decision (defined and discussed below).
[23] Previous filings from the Attorney General indicate that Ms. Kostic initially submitted a 10,839-page responding record. The Registry did not accept this evidence for filing. Apart from the evidence related to her two motions to strike and stay this Application, Ms. Kostic has yet to file any compliant evidence or written submissions in response to the Application. Her written argument was only obtained because of the Court’s request to the Registry.
[24] Ms. Kostic has been an active litigant in this proceeding itself, not just in other related matters. She has made three separate attempts to delay or strike this Application.
[25] On May 22, 2024, Ms. Kostic filed a motion to stay [the Motion to Stay]. Justice Strickland dismissed the Motion to Stay in a detailed ruling on August 8, 2024 (Attorney General of Canada v Kostic, 2024 FC 1238 (unpublished) [the Motion to Stay Decision]).
[26] Subsequently, and after an unsuccessful attempt to suspend the timelines for this Application or obtain case management, Ms. Kostic filed a motion to strike [the Motion to Strike]. On November 6, 2024, Associate Judge Ring reaffirmed Justice Strickland’s directive that the Application should “proceed with due dispatch.”
On January 21, 2025, she issued reasons dismissing the Motion to Strike (Canada (Attorney General) v Kostic, 2025 FC 125 [the Motion to Strike Decision]). This included dismissing Ms. Kostic’s requests for orders:
(b) striking the First Goulet Affidavit and compelling Canada to produce a proper affiant, such as the Minister of Justice or its designated Officer, and allowing for time for the cross-examination of a “valid affiant”; (c) granting leave to Ms. Kostic to include additional evidence and affidavits in her Respondent’s Record, and an extension of time for her to file her Respondent’s Record with “complete and comprehensive Affidavits”; and (e) compelling witnesses and cross-examination or viva voce testimony “including Testimony from the Honourable CMJ King’s Bench Justice”…
(Motion to Strike Decision at para 15)
[27] Associate Judge Ring noted that Ms. Kostic failed to file and serve a compliant responding record for the Application. Ms. Kostic’s responding record included her affidavit dated June 27, 2024, but also additional affidavits that were not served within the required timeframe. This appears to refer to the 10,839-page responding record that the Attorney General reported receiving from Ms. Kostic.
[28] In her detailed and well-reasoned Motion to Strike Decision, Associate Judge Ring ordered that:
2. Ms. Kostic is granted an extension of time to January 31, 2025 to serve and file an amended version of the Respondent’s Record that she served upon Canada on August 12, 2024 but which was not accepted for filing.
3. The only affidavit that Ms. Kostic may include in the Amended Respondent’s Record is her Affidavit sworn on June 27, 2024 and served on Canada that same day. The Amended Respondent’s Record shall also include the version of Ms. Kostic’s Memorandum of Fact and Law that was included in her Respondent’s Record served on Canada on August 12, 2024.
[Emphasis added]
[29] Despite this direction, Ms. Kostic’s materials remain non-compliant with both Associate Judge Ring’s order and the Federal Courts Rules, SOR/98-106. Ms. Kostic has not appealed the order but has asserted that Associate Judge Ring was biased, that her record is compliant, and that the volume of her materials is due to her desire to ensure that the Court had access to all relevant information.
[30] Considering Associate Judge Ring’s decision, this Court will consider only the evidence contained in Ms. Kostic’s June 27, 2024, affidavit. However, her materials are repetitive and disorganized, making it difficult to distinguish between the appendices to the June 27 affidavit and the 23 additional volumes submitted as part of her “amended”
record. Accordingly, the review below adopts a generous interpretation of what documents are properly before the Court.
VI. Submissions of the Parties
[31] Several allegations have been made against the Attorney General’s counsel and counsel in other proceedings (see, for example, paragraph 74 below). I wish to be firm in my finding that there is no evidence to support any of these claims. Such spurious, unfounded, and inappropriate accusations will be treated as relevant considerations in the section 40 analysis. Additionally, there is no basis for the allegations made against the associate judges or judges of this Court who have issued orders or decisions unfavourable to Ms. Kostic.
A. The Attorney General’s Argument
[32] The Attorney General applies the indicia identified by the Federal Court as characterizing a vexatious litigant (see Mazhero v Fox, 2011 FC 392 at para 40, citing Wilson v Canada (Revenue), 2006 FC 1535 at paras 30-31). Their analysis of Ms. Kostic’s litigation conduct is summarized as follows:
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The propensity to re-litigate matters that have already been determined: After the Alberta courts denied Ms. Kostic leave to bring claims against eight lawyers who acted against her in Alberta litigation, she proceeded to name those same lawyers in T-680-20. Further, she has repeatedly sought Federal Court enforcement of an alleged indemnity agreement raised in the Alberta courts for years.
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The initiation of frivolous actions or motions: T-680-20 rests on bare allegations of wrongdoing against 46 defendants; T-348-21 is a collateral attack on the Alberta litigation against Ms. Kostic; and T-713-22 seeks to improperly use the judicial review process to install Ms. Kostic’s supporters as Piikani Nation Chief and Council. In response to the defendants’ motions and attempts at case management in these proceedings, the Attorney General explains that Ms. Kostic has filed massive motion records and unsuccessful appeals of procedural decisions at every step.
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The making of unsubstantiated allegations of impropriety against the opposite party, legal counsel, or the court: The Attorney General cites examples of Ms. Kostic accusing the Federal Court of “bias,”
“predetermining … issues,”
“favouritism,”
applying “different set[s] of rules,”
“mistreatment,”
and bringing “the administration of Justice into disrepute.”
Ms. Kostic has frequently asserted extreme claims against opposite parties and their counsel; for instance, by stating in an adjournment hearing for T-680-20 that counsel and the defendants “are guilty of fraud and crime”
and “getting away with murder.”
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The refusal or failure to abide by rules or orders of the court: For example, after failing in her attempt to intervene in T-1344-20, Ms. Kostic filed two motion records in that same proceeding. Additionally, Ms. Kostic improperly named herself as a party.
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The failure, or refusal, to pay costs in earlier proceedings: The Attorney General states that “Ms. Kostic has failed to pay any of this Court’s costs orders”
[emphasis added].
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The failure to pursue the litigation on a timely basis: The Attorney General asserts that Ms. Kostic “has been litigating in the Alberta courts, and now in this Court, for almost two decades without any meaningful progress or success.”
[33] According to the Attorney General, Ms. Kostic has displayed all factors associated with a vexatious litigant. They contend that she is ungovernable and harmful to the functioning of the court system. Therefore, “[a] vexatious litigant order is necessary to restore order and establish meaningful controls on Ms. Kostic’s ability to pursue proceedings in this Court.”
B. Ms. Kostic’s Arguments
[34] Ms. Kostic advanced a wide range of arguments in her written materials and oral submissions before the Court. The following summarizes the main points she raised.
(1) Written Argument
[35] Ms. Kostic opposes the Attorney General’s requested order and “concurrently”
seeks “a judicial investigation”
pursuant to the Inquiries Act, RSC 1985, c I-1 for the “final determination of the missing trust funds.”
[36] She maintains that she has not abused this Court’s process, arguing that “nothing was ever determined on the merits.”
She further asserts that her Federal Court proceedings concern issues falling exclusively within federal jurisdiction.
[37] Ms. Kostic places significant reliance on a June 2024 case management conference before Justice Graesser of the Alberta Court of King’s Bench [the June 2024 CMC]. She repeatedly references the June 2024 CMC to support various claims, including that the case management judge: “declined KB jurisdiction sending her back to the federal court”
; “Denied a 3rd vexatious leave request against Kostic”
; scheduled her trial against her former counsel; alluded to her impending success in Alberta Action No. 0801-05039; recognized that the Piikani Nation made “false submissions”
; and “reaffirmed”
that her application in Federal Court proceeding T-348-21 was in the “correct form.”
[38] I note that in the Motion to Strike Decision, Associate Judge Ring determined that this evidence was not properly before the Court (Motion to Strike Decision at para 55). In any event, I do not interpret the transcript from the June 2024 CMC to support Ms. Kostic’s inferences about what the case management judge found.
[39] Ms. Kostic claims that the Attorney General – not she – is vexatious. She accuses the Attorney General of bad faith and committing an abuse of process. She levels similar allegations against parties in other proceedings, including the Piikani Nation, her former lawyers, CIBC, and others. She emphasizes that she has been self-represented “since 2017 due to circumstances beyond her control”
and asserts that her “extensive litigation efforts”
are responses to what she describes as “two decades of abuse and procedural interference.”
[40] While acknowledging that the Alberta courts imposed a leave requirement in 2013, Ms. Kostic highlights that this measure applied to all parties and claims that she complied with it, “while others obstructed this process.”
She references the recent decision in Piikani v McMullen, 2024 ABKB 414, in which the Alberta Court of King’s Bench found that counsel for the Piikani Nation, Ms. Hanert, placed her firm in a conflict of interest. Ms. Kostic extrapolates this finding to support of a number of broader claims against Ms. Hanert.
[41] In addition to defending the present Application and seeking a judicial investigation, Ms. Kostic alleges that the “AGC and its agents have breached their duty of care towards Kostic.”
She seeks damages for alleged misrepresentation, retaliation, and harassment.
(2) Oral Argument
[42] During the hearing, Ms. Kostic argued that the Attorney General relied on false and selectively chosen evidence. She urged the Court to consider her full litigation history rather than the “cherry-picked”
narrative advanced by the Attorney General. She claimed that several of her attempted appeals were “lost in the abyss,”
and contrasted her treatment to the Court’s more favourable approach towards Ms. Hanert. Specifically, she stated that Associate Judge Molgat accepted Ms. Hanert’s letters to the Court but required Ms. Kostic to file formal motions.
[43] The central theme of Ms. Kostic’s oral argument was that this Application is flawed because the Attorney General’s examples of vexatiousness ignore the underlying merits of her legal proceedings. Ms. Kostic repeatedly returned to the substance of her actions and applications before this Court and the Alberta courts to describe her 20 years of litigation as an earnest effort to have her evidence considered.
[44] Ms. Kostic stated that the emotional toll of defending herself has caused her to experience PTSD and other health issues. She recounted that by the time her appeal of Associate Judge Molgat’s decision (unreported) was scheduled, she was mentally unwell and submitted a letter identifying her certified disability status to seek an adjournment. She emphasized that she has not caused delays before this Court.
[45] Acknowledging that her language may at times be “off-the-cuff”
and open to misinterpretation, Ms. Kostic asserted that her statements were not meant to be offensive and were grounded in substantive concerns. She argued that as a self-represented litigant with a certified disability, she should not be penalized for minor errors. She highlighted her long-standing advocacy for Aboriginal stakeholders and purported recognition by the Government of Canada for her advocacy, truth, and justice.
[46] Ms. Kostic characterized herself as a whistleblower, claiming to have provided police with evidence of bribes and extortion by Ms. Hanert and others. She stated that she recently obtained new evidence that could vindicate her in these proceedings.
[47] Regarding unpaid costs orders against her, Ms. Kostic acknowledged the outstanding amounts but argued that this should be irrelevant. She believes that if she succeeds in her Alberta litigation concerning an alleged indemnity agreement, these costs will be offset even if she is unsuccessful at the Federal Court.
[48] Ms. Kostic highlighted that her judicial history originated with her as the defendant, such that she should not be faulted for defending herself. Referencing, the June 2024 CMC (defined above), she maintained that she did not know the particulars of the case against her until after the Alberta Court of King’s Bench admonished the Piikani Nation, the Attorney General, and other parties during that case management conference.
[49] Ms. Kostic characterized the June 2024 CMC as “monumental,”
asserting that it marked the first time a court acknowledged she was not responsible for the missing Piikani Nation funds. She argued that this finding and other comments support the merit of her claims and undercut the allegation that she is vexatious. She asserted that Justice Graesser’s comments confirm the Federal Court’s jurisdiction over her claims and that he even offered to testify on her behalf.
[50] The Court clarified during the hearing that it is for the Federal Court – not the Alberta courts – to determine its own jurisdiction. Further, an Alberta court’s decision not to address certain matters does not establish that Ms. Kostic’s claims fall within the Federal Court’s jurisdiction, nor does the June 2024 CMC demonstrate a determination on the merits of her actions.
[51] Ms. Kostic relied on the Alberta Court of Appeal’s recent decision in Piikani Nation v Kostic, 2025 ABCA 7. In that case, Justice Antonio found that Ms. Kostic did not require permission to appeal a case management judge’s decision because the Alberta courts had never declared her a vexatious litigant under Rule 14.5(1)(i) of the Alberta Rules of Court, Alta Reg 124/2010. Justice Antonio clarified that the litigation plan implemented by the Alberta Court of Queen’s bench in 2013 (discussed in paragraph 13 above) was a case management order, not a vexatious litigant order.
[52] According to Ms. Kostic, Justice Antonio addressed the record’s factual inaccuracies and reminded the parties of their duty of candour. She argued that this decision demonstrates the absence of evidence to support a vexatious litigant order.
[53] Ms. Kostic further submitted that the Attorney General and their counsel presented false evidence and that various judges who ruled against her were biased. However, she stated that she did not view the Court in this case as biased, noting that she had no prior knowledge of me.
[54] Ms. Kostic alleged that Associate Judge Ring disregarded relevant facts and predetermined the Motion to Strike, while cherry-picking evidence. She criticized Justice Strickland’s Motion to Stay Decision as inconsistent with Justice Antonio’s ruling. She also claimed a conflict of interest involving Associate Judge Coughlan and Mr. Milne, counsel for the Attorney General, giving rise to a reasonable apprehension of bias. She argued that self-represented litigants should receive additional support to ensure their claims are heard on the merits, and she did not receive equal treatment compared to opposing counsel.
[55] In closing, Ms. Kostic emphasized the personal cost of nearly two decades of litigation, asserting that she has had to put her life on hold to defend herself. She stated she deserves whistleblower protection and that her advocacy has been silenced by the courts, including through restrictions on raising constitutional issues. Finally, she argued that being labeled a vexatious litigant would damage her credibility in her ongoing Alberta proceedings and violate her right to dignity and protection under the Canadian Human Rights Act, RSC 1985, c H-6.
VII. Analysis
A. The Attorney General’s Consent
[56] As a prerequisite matter, the Court must confirm, in accordance with subsection 40(2), that the Attorney General has consented to the bringing of this vexatious litigant application (Simon at paras 6-7).
[57] During oral argument, Ms. Kostic challenged the validity of the Acting Assistant Deputy Attorney General’s consent filed in the Application Record. She noted that the consent is dated January 18, 2024, whereas the Notice of Application was filed later, on May 3, 2024. In her view, this raises uncertainty as to whether the consent pertains to the present Application or a different proceeding. She further argued that the consent is deficient because the Attorney General neither appeared at the hearing nor personally presented argument or gave evidence under oath.
[58] I am satisfied that the Attorney General has properly provided consent in this case. Jurisprudence confirms that the Acting Assistant Deputy Attorney General is authorized to provide such consent on behalf of the Attorney General, as a departmental officer appropriately designated for this purpose (Coote v Lawyers' Professional Indemnity Company (Lawpro), 2014 FCA 98 at para 11).
[59] Although the consent predates the filing of the Application, I am not persuaded that this renders the Application invalid. Subsection 40(2) indicates that the Attorney General’s consent must be obtained prior to filing: “An application under subsection (1) may be made only with the consent of the Attorney General of Canada…”
The same provision grants the Attorney General the right to be heard on the application, but it does not impose an obligation to personally appear before the Court or to swear evidence in the record. The Attorney General was represented by the Department of Justice Canada . While unfortunate that the consent filed in the materials was unsigned this must have been a clerical error. The Application would not proceed without the Attorney General’s consent of which they would have signed. This argument has no merit.
B. Ms. Kostic’s Litigation History
[60] Considering the history of Ms. Kostic’s litigation conduct, I agree with the Attorney General that virtually all the hallmarks of a vexatious litigant are evident in Ms. Kostic’s case.
[61] Before this Court and others, Ms. Kostic has advanced serious claims against a broad host of parties. Her claims include conspiracy, deceit, fraud, knowing assistance, and misfeasance. Broadly, Ms. Kostic maintains that she is a victim of conspiratorial claims aimed “to scapegoat Kostic and unlawfully benefit from the misdirection of funds that benefit multiple parties including the AGC in breach of the [Settlement Agreement] to Kostic and a vast percentage of innocent Piikani Beneficiaries including Canadian Taxpayers.”
[62] In her written submissions for this Application, Ms. Kostic argues that “[s]he has diligently worked to trace over $50 million in missing funds, proving significant breaches of trust by the 2003 federal board, AGC, Gowling, CIBC, Blakes, and others”
and that “[t]hese parties have repeatedly made false allegations against her to deflect responsibility.”
Similar allegations from her are prevalent across her other Federal Court proceedings. Associate Judge Ring noted that “[m]ost of these proceedings have been struck, dismissed, or removed from the Court record. In files T-680-20 and T-713-22, costs were awarded against Ms. Kostic, which have not been paid”
(Motion to Strike Decision at para 5).
(1) Federal Court Litigation Conduct
[63] Ms. Kostic’s litigation history before this Court demonstrates a pattern of unnecessary and repetitive claims; unsubstantiated and scandalous arguments; and irrelevant and excessively voluminous materials. Below are some illustrative examples, though this list is not exhaustive.
[64] T-680-20, A-116-23, A-262-23: In June 2020, Ms. Kostic filed a 192-page Statement of Claim in T-680-20, which was amended twice and named over 50 defendants, many of whom Ms. Kostic unsuccessfully sought leave to pursue in Alberta. The claim advanced at least 25 causes of action, sought over 185 declarations, and frequently relied on hostile and scandalous language to assert unsubstantiated allegations of wrongdoing. Ms. Kostic requested $25 million in damages “jointly and severally from each of the Defendants,”
which, as Justice Aylen noted, amounts to potential damages exceeding $1 billion. Ms. Kostic also asked the Court to decide on matters concerning the Alberta Action No. 0601-13081.
[65] The Court ultimately struck Ms. Kostic’s Amended Statement of Claim without leave to amend and ordered her to pay costs of $10,000 to each group of defendants. Justice Aylen found that many of Ms. Kostic’s submissions were “not responsive to the issues raised on these motions”
; “she refers to various legal principles, but she has not made any submissions identifying where the constituent elements of each cause of action are made out in her pleading”
; she attempted to amend her pleadings a third time; she did not identify any basis as to how the Federal Court had jurisdiction over the matter; she asserted that her claims were not advanced in Alberta; and Ms. Kostic warned that she “could simply start another action weekly.”
[66] Justice Aylen dismissed all of Ms. Kostic’s claims under the motion to strike standard, finding it “plain and obvious”
that Ms. Kostic’s claims would not succeed. Justice Aylen described the action as “flagrantly abusive,”
“a prime example of a vexatious claim,”
“scandalous,”
and that Ms. Kostic failed to “plead any reasonable cause of action.”
For instance: “Ms. Kostic improperly seeks to re-litigate claims and issues that have already been decided by, or are currently before, the Alberta Court of King’s Bench.”
Ms. Kostic’s action was “a blatant attempt”
to circumvent her obligation to seek leave in Alberta. Further, many named defendants were omitted in the text of the statement of claim and no material facts pleaded established any connection to those parties. Ultimately, the Court determined: “it would be manifestly unfair to the parties involved and other participants vying for scarce judicial resources to permit this proceeding to continue.”
[67] On appeal, the Federal Court of Appeal commented on Ms. Kostic’s unsubstantiated claims and noted that her notice of appeal was “not in proper form, including because it purports to address other decisions beyond the decision under appeal and seeks relief that cannot be granted.”
Further, it was “78 pages in length, well beyond the 10-page limit.”
Although the Court did not summarily dismiss the matter, Ms. Kostic has failed to perfect the appeal.
[68] I need not exhaustively repeat in these reasons the nature and scope of Ms. Kostic’s conduct in her numerous other proceedings before this Court. However, I make some brief further observations solely for the purpose of demonstrating the pattern of Ms. Kostic’s vexatious litigation conduct at the Federal Court:
- T-1344-20: In December 2020, Ms. Kostic applied to intervene in a judicial review of a decision to convene the Piikani Removal Appeal Board [the RAB]. Despite lacking standing, Ms. Kostic wrote to the Court, filed multiple motion records, and improperly named herself as a party to the proceeding.
- T-348-21: In February 2021, Ms. Kostic – along with another individual Janet Potts – applied for judicial review of the same RAB decision. They sought several declarations and orders, most of which had no relationship to the decision at issue and once again concerned Alberta Action No. 0601-1308. An amended notice of application was rejected for filing with the caution that Ms. Kostic and Ms. Potts needed to obtain leave and appoint counsel. The applicants have not further pursued T-348-21.
- T-1224-21: In March 2022, Ms. Kostic sought to intervene in a related RAB decision. Her letter seeking intervention was rejected by Associate Judge Coughlan who warned that the Court would not
“entertain requests for interlocutory relief by way of an exchange of correspondence.”
Ms. Kostic’s motion record was dismissed for lack of standing.
- T-1850-21: In December 2021, Dianna North Peigan applied for judicial review of a Piikani Nation Council decision. The application named many of the same parties sued by Ms. Kostic in T-680-20, outlined serious allegations against them, and sought relief related to T-680-20. Ms. Kostic was not a party to this proceeding but became actively involved by distributing materials to other parties. She also raised this mater as a reason to stay other proceedings, including T-680-20.
- T-713-22, T-714-22: In April 2022, Ms. Kostic and Glenda Pard initiated identical judicial review applications, again related to the Piikani Nation’s councillors. Ms. Pard agreed to have her application dismissed by consent. Ms. Kostic continued with T-713-22. She unsuccessfully appealed the Court’s order authorizing the respondents to bring a motion to strike. Associate Judge Coughlan struck Ms. Kostic’s application, finding that the application was moot, Ms. Kostic lacked standing, and the application was an abuse of process
“clearly bereft of any possibility of success”
(Kostic v Canada, 2023 FC 1077 at paras 29-31). The Associate Judge ordered enhanced costs in a single lump sum of $7,500 in any event of the cause because Ms. Kostic had “[pleaded] in such a high-handed manner”
with “wholesale allegations of impropriety”
(Kostic v Canada, 2023 FC 1077 at paras 58-61). Ms. Kostic attempted to appeal the striking decision and requested other relief, including removal of the case management judge because of bias. Justice McHaffie rejected the filing, noting that Ms. Kostic “has previously filed non-compliant motion records of a similar nature, despite directions and orders of the Court.”
- T-2317-22: Although not listed as a party, the telephone number listed in this application challenging a Piikani Nation bylaw is Ms. Kostic’s personal cell phone.
- T-267-23, T-319-23, T-320-23: In February 2023, three applicant groups challenged an election for Chief and Council of Piikani Nation. Ms. Kostic improperly involved herself by being copied on email correspondence and sending letters to the Court on behalf of the applicants. Notably, she requested that all communication be sent to her and sought to involve herself as a party
“if she deems it required.”
On October 23, 2023, Associate Judge Coughlan directed that the applicant groups “cannot be represented by Ms. Kostic and no further materials tendered by Ms. Kostic will be accepted for filing.”
[69] The Attorney General highlights that Ms. Kostic has failed to attend for cross-examination as scheduled and breached Court orders. In respect to the latter, she failed to deliver transcripts of her cross-examination of the defendant Dale McMullen (see Kostic v Canada, 2023 FC 509 at para 47), filed motion records without standing, and failed to pay multiple costs orders, including the $5,000 awarded against her in the Motion to Strike Decision.
[70] Further, I take note of the numerous lengthy and unresponsive materials that Ms. Kostic has submitted to this Court, frequently accompanied by requests to extend timeliness, admit new evidence, or amend her pleadings. For instance, for the motion to strike in T-680-20, Ms. Kostic submitted a 629-page responding affidavit, which was rejected for filing by the Court because it was “not apparent…to what motion it responds.”
(2) Alberta Litigation Conduct
[71] In addition to the examples at this Court, there are numerous instances of Ms. Kostic being admonished by the courts in Alberta for engaging in vexatious and abusive behaviour. While not determinative, I find the Alberta courts’ observations further illustrative.
[72] In Piikani 2018 (discussed above), the Alberta Court of Appeal found that Ms. Kostic was effectively asking the Court to usurp the role of the case management judge from which she appealed several orders: “Instead of following that procedure, Ms. Kostic launched this appeal, in which she asks three judges of this Court to do the same thing”
(Piikani 2018 at para 47 [emphasis in original]). The Court of Appeal referenced the case management judge’s findings that Ms. Kostic’s “‘serial summary judgment applications’… amounted to an abuse of process”
and that she was attempting to re-litigate issues (Piikani 2018 at paras 47, 68). The Court determined that Ms. Kostic’s appeals created “extra expense, delay and consumption of court resources”
by pursuing collateral issues not aimed at advancing the litigation but imposing “sanctions”
for perceived breaches of the litigation plan (Piikani 2018 at paras 23, 47).
[73] Additionally, Ms. Kostic was found in contempt by an Alberta case management judge for failing to provide the financial information required to enforce costs awards made against her (Piikani Nation v Raymond James Ltd, 2020 ABCA 41 at paras 4-5).
(3) Vexatious Litigant Application Litigation Conduct
[74] Finally, Ms. Kostic’s conduct in this proceeding alone provides sufficient grounds to grant this Application. For example, in her written submissions, she makes numerous scandalous allegations against the Attorney General and parties involved in other proceedings. These allegations are irrelevant to the present Application, lack evidentiary support and context, and are not cited to the record. They include broad and sweeping accusations concerning the merits of her litigation in Alberta, such as:
Mr. Hawkes, in breach of his professional obligations, used his personal relationship with a former Chief Justice to control and obstruct Kostic’s proceedings, concealing trust fraud and misdirecting trust funds.
…
The ulterior motives behind these proceedings were to scapegoat Kostic and unlawfully benefit from the misdirection of funds that benefit multiple parties including the AGC…
…
The AGC and its joint actors have orchestrated a series of manufactured events to misrepresent Lili Kostic's pursuit for truth and justice.
…
The apparent misappropriation of over 8.5 million in trust funds, coupled with undisclosed claims and misdirection orchestrated by AGC’s agent Gowling, point to a systemic effort to conceal financial improprieties and hinder Kostic’s pursuit of justice. The involvement of the JSS firm in expending $22 million to pursue the missing $30 million raises further suspicions of complicity in this scheme to obstruct inquiries and cover up financial misconduct.
…
AGC’s actions… intentionally targeted Ms. Kostic to deflect blame.
…
In a word was removed and ensured that she enters without any fair hearing, without a right of reply, without evidence, without the right to be heard breaching audi alterum Partem, disregards and removes entirely protections owed to her under her certified disability rights and conventions [CRPD and Disability Act] and a law of Canada, violates human right protections and other rights and offends his own professional obligations presenting false, misleading, distorted cherry picked version of facts omitting highly probative true facts, under his own submissions acting as evidence.
…
AGC has repeatedly misled the court by presenting false facts…
[75] A similar narrative is reflected in Ms. Kostic’s arguments for the Motion to Stay and the Motion to Strike. Both Justice Strickland and Associate Judge Ring commented on the improper scope of her argument and the nature of her requested relief.
[76] For example, before Justice Strickland, Ms. Kostic requested orders prohibiting certain counsel from acting in this or any other proceeding and compelling the production of financial records (Motion to Stay Decision at paras 20, 23). She argued the concept of “agent indemnity”
and sought to apply it to other matters before this Court and the courts in Alberta (Motion to Stay Decision at para 48). Justice Strickland noted that the case management judge in Alberta had determined that Ms. Kostic’s arguments necessitated a trial in Alberta (Motion to Stay Decision at para 67). Justice Strickland concluded her review of Ms. Kostic’s submissions by summarizing the vexatious behaviour she observed:
Ms. Kostic has been prolific in her filings in this Court. These filings, like her motion in this matter, tend to be extremely lengthy and to include voluminous materials that are largely unrelated to the subject matter of the proceeding at hand. They tend to make broad allegations of wrongdoing by the responding parties, their counsel, the AGC, the Court and others. I would add that they also typically consume considerable resources of the generally multiple responding parties and of the Court. Ms. Kostic’s conduct of this stay motion is representative of these concerns. Without some form of control over her filings, it is probable that this course of conduct will continue.
(Motion to Stay Decision at para 68)
[77] Despite the direction that it was “in the public interest that the Vexatious Litigant Application proceed with due dispatch”
(Motion to Stay Decision at para 81), Ms. Kostic proceeded to bring a further motion – this time to strike. In that Decision, Associate Judge Ring commented: “
Ms. Kostic’s written submissions comprise 164 single-spaced paragraphs and include wide-ranging assertions that are seemingly unconnected to the present motion, and relate instead to the merits of various proceedings that are or were before the courts”
(Motion to Strike Decision at para 14).
[78] Associate Judge Ring rejected each of Ms. Kostic’s arguments, including her “bald allegation”
that this Application is “wholly lacking merit”
(Motion to Strike Decision at para 32). Ms. Kostic “filed voluminous and unwieldy motion materials,”
which were “riddled with abusive and unsubstantiated allegations”
(Motion to Strike Decision at para 72). As the Associate Judge further observed, the Federal Courts have consistently “rejected Ms. Kostic’s repeated requests for stays of proceedings, characterized her pleadings as vexatious, scandalous, and high-handed, found her proceedings to be abusive, imposed controls on her ability to file documents, and awarded enhanced costs against her to address and deter her litigation behaviour”
(Motion to Strike Decision at para 30, citing Kostic v Canada, 2023 FC 306; Kostic v Canada, 2023 FC 508 Kostic v Canada, 2023 FC 1077; Attorney General of Canada v Kostic, 2024 FC 1238).
C. Ms. Kostic is a Vexatious Litigant
[79] In response to the above, Ms. Kostic continues to advocate for her position in other proceedings, attempts to introduce new claims against the Attorney General, and, during the hearing, sought to deflect blame onto opposing counsel and various members of the Court.
[80] However, as Associate Judge Ring correctly observed in the Motion to Strike Decision, the argument that Ms. Kostic’s claims are meritorious misses the point. Vexatious litigant proceedings are separate proceedings concerning the conduct of the litigant (Motion to Strike Decision at para 31, citing Canada v Nourhaghighi, 2014 FC 254 at para 60. See also Motion to Strike Decision at paras 55, 65). Despite this, Ms. Kostic has continued to disregard the Court’s direction. It is well-established that the perceived merits of a litigant’s related proceedings – or their belief in the righteousness of their claims – do not excuse conduct that is otherwise vexatious (Feeney v Canada, 2022 FCA 190 at para 25; Olumide at para 33).
[81] Ms. Kostic is clearly frustrated and believes that the Federal Court is the proper forum to address her grievances. For example, she asserts:
the CMJ June direction reaffirmed certain of her claims belong exclusively to the Federal Court. The certain claims being the unaccounted-for missing trust funds, the proof of claim fraud with Kostic’s unsigned proof of claim, defamatory declarations and most importantly the 783 thousand dollars unlawfully taken by the Piikani Federal Board and the losses attached to the funds that Kostic’s exclusive 5-year agreement to mange the portfolio under terms promised in it attached to the CIBC WG and RJL account agreement for Securities compliance. All her income losses attached to the funds that never reached her, went missing then more were misdirected, blaming her for all the missing Trust funds since after her termination, which now is the only court that will be able to determine those losses inter alia.
[82] If Ms. Kostic wishes to pursue these claims, she may do so by seeking leave from the Federal Court. However, this Application – through which the Attorney General highlights her litigation conduct in support of a vexatious litigant order – is not the appropriate forum to argue the merits of substantive claims or to seek judicial investigation under the Inquiries Act.
[83] While Ms. Kostic argues that “[v]exatious litigants… rarely obtain future access to the courts as their requests for leave are 9 out 10 times denied,”
this point is irrelevant to the present Application. Should Ms. Kostic seek leave to commence proceedings in this Court in the future, the applicable standard is relatively low: “[l]eave will be granted if the issue raised in a proceeding is bona fide and not doomed to fail”
(Simon at para 12). In Olumide, Justice Stratas also emphasized that “care must be taken not to exaggerate”
the effect of section 40 (Olumide at para 27).
[84] Ms. Kostic has apologized for some of her past conduct, writing: “Kostic sincerely apologies to the court or any party if any of the technical or other errors made by her have caused problems. None of her actions or filings were or intended to offend the rules or Court.”
Countless times during the hearing, she reminded the Court that she is self-represented and no longer has access to counsel. Therefore, as a non-lawyer, she may make mistakes.
[85] In response, I would note that she appears to have more courtroom experience than many trained litigators. She is articulate and passionate about her cause, yet she has been repeatedly warned about her court conduct. Good intentions do not excuse repeated breaches of court rules or orders – especially when those breaches become abusive and ungovernable.
[86] In numerous decisions of this Court and the Alberta courts, Ms. Kostic has been admonished for initiating frivolous proceedings described as scandalous, vexatious, and abusive. She frequently relitigates issues, seeks relief beyond which she is entitled to, and routinely appeals unfavourable decisions. When those appeals are dismissed, she often initiates new proceedings and recycles the same arguments.
[87] Ms. Kostic has involved herself in matters where she lacks standing. She advances arguments that are confusing and difficult to decipher, often accompanied by unsupported allegations against the courts and opposing parties. She ignores court orders, timelines, and procedural rules, despite warnings. As outlined in the affidavit of Ms. Goulet, as of May 1, 2024, Ms. Kostic has not paid any of the costs ordered against her. These facts underscore that Ms. Kostic continues to file proceedings without any apparent regard for the public resources required to respond to her vexatious litigation.
[88] As Justice Stratas explained, “[a] litigant’s misbehaviour in just a single proceeding can result in section 40 remedies”
even though – in that context – the typical powers to regulate litigants and their proceedings are usually sufficient (Olumide para 24). However, where such misconduct is, or is likely to be, repeated in multiple proceedings, “section 40 remedies become live”
(Olumide at para 24). I find that Ms. Kostic’s vexatious behaviour is evident in multiple proceedings.
[89] I declare Ms. Kostic a vexatious litigant pursuant to section 40 of the Federal Courts Act.
VIII. Relief and Costs
[90] The Attorney General asks this Court to impose a leave requirement for:
[91] In her written materials, Ms. Kostic asks for “advanced costs under public interest.”
[92] However, at the hearing, Ms. Kostic submitted that she was not seeking costs. Instead, she argued that if she were unsuccessful, the Attorney General should not be awarded costs, as they were simply doing their job. She emphasized that costs are not intended to be punitive and should not stifle her rights. Imposing costs on her, she argued, would unethically silence her pursuit of fundamental justice.
[93] The Attorney General sought lump sum costs of $10,000.00, or alternatively, $5,220.00 inclusive costs. $5,220.00 at the midpoint of Column III under Tariff B of the Federal Courts Rules and supported by the significant work required in responding to two of Ms. Kostic’s unsuccessful motions, as well as reviewing her extensive Application record of over 5,000 pages and a 3,800-page condensed book. The Applicant further argued that Ms. Kostic’s conduct throughout the Application was improper, vexatious, and unnecessary.
[94] I will grant the Attorney General the relief as requested. I find their request for costs at the midpoint of Column III to be reasonable and award $5,220.00 inclusive to be payable forthwith.
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