Cause of action estoppel

The doctrine of cause of action estoppel is based on the premise that, where the legal rights or liabilities of the parties have been determined in a prior action, they should not be re-litigated. Cause of action estoppel applies not only to points on which the court has pronounced but to every point which properly belonged to the subject of the litigation: Murphy v. National Bank of Canada 2012 ONSC 1360.  Broadly put, if there is a final decision respecting an issue between parties that decision governs.

 

There has been little consideration of cause of action estoppel at the appeal level since 2010.  The few cases that do exist merely mention the doctrine.  Nevertheless, the cases that have been decided recently are helpful.  So, Miel Abitémis Inc. v. Lofthouse, 2011 CarswellOnt 8806 holds:

 

19          These arguments appear to be compelling on the surface. They arise from the fundamentals of the doctrine of res judicata. The doctrine is an equitable doctrine based on an estoppel preventing a claim or a defence dealt with in an earlier proceeding from being raised in a subsequent proceeding. The party seeking to do so is either estopped from doing so on the basis of the fact that that issue was litigated in an earlier proceeding (issue estoppel) or, as submitted in the present case, the cause itself was or should have been determined in an earlier proceeding (cause of action estoppel). Either way, the premise is that if the merits of the matter have been determined in an earlier proceeding, the same issues cannot then be litigated between the same parties in a subsequent proceeding. Mr. Duchesne states that because this is a default judgment, there has been no determination of the issues raised in the counterclaim on the merits, and as such, the doctrine of res judicata cannot apply.

 

20          There are, however, cases that state that even if a party fails to plead matters in default proceedings, cause of action estoppel may prevent subsequent litigation of issues which "properly belonged" to the previous litigation. In those earlier proceedings, "a defendant... must put forward all defences which will defeat the plaintiff's action; the defendant who does not will be barred from raising them subsequently." This is to prevent the fragmentation of litigation and so long as the same parties have or could have litigated a case arising out of the same set of facts, it cannot be recast under a different cause.

 

To similar effect is Elguindy v. Warkworth Institution, 2011 ONSC 4670

 

 

26          Cause of action estoppel precludes a party from bringing an action against another when the same cause of action has been determined in earlier proceedings by a court of competent jurisdiction.[FN21] The leading modern case on cause of action estoppel remains the decision of the Supreme Court in Doering v. Grandview (Town) (1975), [1976] 2 S.C.R. 621 (S.C.C.), which adopted the following oft-quoted passage from Henderson v. Henderson (1843), 3 Hare 100 (Eng. V.-C.), at 114 :

 

In trying this question I believe I state the rule of the court correctly when I say that, where a given matter becomes a subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which was not brought forward, only because they have, from negligence, inadvertence or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, in which the parties, exercising reasonable diligence, might have brought forward at the time.

 

            …

28          Thus, cause of action estoppel will bar a party from asserting not only issues that were raised before the court on the previous proceeding, but also issues that could have been decided had they been brought before that court.[FN23]

 

29          Furthermore, a party may not simply reframe its case, predicated on the same set of facts in order to avoid the operation of the doctrine of cause of action estoppel. In Las Vegas Strip Ltd. v. Toronto (City) (1996), 30 O.R. (3d) 286 (Ont. Gen. Div.) at para. 24; affirmed (1997), 32 O.R. (3d) 651 (Ont. C.A.), Sharpe, J. held that "the authorities establish that a litigant cannot establish a new and fresh cause of action by advancing a new legal theory in support of a claim based upon essentially the same facts".

 

 

If a decision was rendered that decided an issue between that parties finally by a court or tribunal of competent jurisdiction,  then the estoppel will apply.  This is made clear from the decision of the Court in Jain v. Valani,  2011 ONSC 1156, 81 M.P.L.R. (4th) 66 citing Minott (a case I argued):

 

 

20          In Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321, [1999] O.J. No. 5 (Ont. C.A.), the Court of Appeal, per Laskin J., described the principles underlying the doctrine of issue estoppel, at 329:

 

Issue estoppel prevents the relitigation of an issue that a court or tribunal has decided in a previous proceeding. In this sense issue estoppel forms part of the broader principle of res judicata. Res judicata itself is a form of estoppel and embraces both cause of action estoppel and issue estoppel. Cause of action estoppel prevents a party from relitigating a claim that was decided or could have been raised in an earlier proceeding. No question of cause of action estoppel arises in this case. Issue estoppel is narrower than cause of action estoppel. It prevents a party from relitigating an issue already decided in an earlier proceeding, even if the causes of action in the two proceedings differ.

 

The overall goal of the doctrine of res judicata, and therefore of both cause of action estoppel and issue estoppel, is judicial finality. "The doctrine prevents an encore, and reflects the law's refusal to tolerate needless litigation." The policy considerations underlying issues estoppel were discussed in the leading Canadian case on the subject, Angle v. M.N.R. [at 267, S.C.R.].

 

The basis of issue estoppel as well as of cause of action estoppel has been variously explained; for example, that it is "founded on considerations of justice and good sense" (see New Brunswick Railway Co. v. British and French Trust Corp. Ltd., [1939] A.C. 1 at p. 19); that it is "founded upon the twin principles so frequently expressed in Latin that there should be an end to litigation and justice demands that the same party shall not be harassed twice for the same cause" (Carl Zeiss case, [1967] 1 A.C. 853, per Lord Upjohn at p. 946, per Lord Guest at p. 933); that it is founded on "the general interest of the community in the termination of disputes, and in the finality and conclusiveness of judicial decisions; and... the right of the individual to be protected from vexatious multiplication of suits and prosecutions..." (Spencer Bower and Turner, Res Judicata, 2nd ed. (1969), p. 10).

 

Issue estoppel has pervasive application and extends not just to decisions made by courts but, as this court's judgment in Rasanen affirms, also to decisions made by administrative tribunals. Whether the previous proceeding was before a court or an administrative tribunal, the requirements for the application of issue estoppel are the same

 

 

More generally, Canadian courts have adopted a flexible approach to avoiding the re-litigation of matters already decided.  So, even if the technical requirements of res judicata or cause of action estoppel do not apply the Court may invoke abuse of process to stay a proceeding:

 

 

Kang v. Sun Life Assurance Co. of Canada, 2011 ONSC 6335

 

 

66          Turning to the doctrine of abuse of process, The court has an inherent and broad jurisdiction to prevent the misuse of its process that would be manifestly unfair to a party to the litigation or would in some other way bring the administration of justice into disrepute: Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77 (S.C.C.); Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (Ont. C.A.) at paras. 55-56, per Goudge J.A., dissenting, approved [2002] 3 S.C.R. 307 (S.C.C.).

 

67          In Toronto (City) v. C.U.P.E., Local 79, supra, the Supreme Court of Canada applied the abuse of process doctrine in circumstances where the technical requirements of the doctrines of cause of action estoppel, issue estoppel, or collateral attack were not satisfied.