Some recent cases on issue estoppel

Wolfe v. Pickar, 2011 ONCA 347 (per Goudge J.A., Gillese and Watt JJ.A. concurring) held that in determining whether the doctrine of issue estoppel applied, the Court of Appeal follows the framework established by the Supreme Court of Canada in Danyluk v. Ainsworth, [2001] 2 S.C.R. 460: (1) the same question has been decided; (2) the judicial decision which is said to create the estoppel was final; and, (3) the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.

Wolfe remains the law. Some passages from cases following Wolfe that have applied the law are set out below but none of them change or vary the law in any material way.

Jafarzadehahmadsargoorabi v. Sabet, 2011 ONSC 5827

[16] In Danyluk v. Ainsworth Technologies Inc. [1], Binnie, J., writing for the Supreme Court of Canada, adopted the following definition of issue estoppel:

When a question is litigated, the judgment of the Court is a final determination as between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a Court of competent jurisdiction as a ground of recovery, or as an answer to a claim set up, cannot be re-tried in a subsequent suit between the same parties and their privies, though for a different cause of action.

[17] At page 477 of the decision[2], Binnie, J. set out the three following requirements for the application of the doctrine of issue estoppel:

i. the same question has been decided;

ii. the judicial decision which is said to create the estoppel was final; and,

iii. the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

Williams v. Corporation of the City of Toronto, 2011 ONSC 2832

[136] Moreover, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460 at para. 19 (S.C.C.) adds an element of discretion to the determination of whether there is an estoppel.

[137] In Danyluk, the Supreme Court of Canada held that where a party establishes the pre-conditions for an issue estoppel, a court must still determine whether, as a matter of discretion, issue estoppel ought to be applied. The court should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice.

Trainor v. Canada Customs and Revenue Agency, 2011 ONSC 3424

[3] Justice Binnie, in the case of Danyluk v. Ainsworth Technologies Inc. 2001 SCC 44 (CanLII), [2001], 2 S.C.R. 460, clarified the law in this area and outlined a two step test to achieve a balance between the public interest in finality and the public/private interest to see justice done on the facts of a particular case which demonstrate a need for special consideration.

[4] The first step is to decide whether the conditions for res judicata / issue estoppel are established, namely:

1. The same question has been decided.

2. The judicial decision said to create the estoppel was final.

3. The parties to the judicial decision are the same as those in the proceeding where the estoppel is raised.

Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2011 ONSC 4277

II. Issue estoppel

[16] The doctrine of issue estoppel prevents a party from re-litigating an issue already decided in an earlier proceeding. In Danyluk v Ainsworth Technologies Inc, 2001 SCC 44 (CanLII), 2001 SCC 44, the Supreme Court of Canada described the policy underlying that doctrine as follows:

An issue, once decided, should not generally be re-litigated to benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause.

Canwest Publishing Inc., 2011 ONSC 4518

(b) Issue Estoppel

[26] The Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc.[3] established the three preconditions to the operation of issue estoppel:

(i) the same question has been decided;

(ii) the judicial decision which is said to create the estoppel was final; and

(iii) the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

[27] Even if the three preconditions are met, a court must still decide whether, as a matter of discretion, issue estoppel ought to be applied.

[28] With reference to administrative decisions, Binnie J. in Danyluk wrote that the objective is to balance fairness to the parties with the protection of the administrative decision-making process, whose integrity would be undermined by too readily permitting collateral attack or relitigation of issues once decided.

Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2011 ONSC 4277

[17] In that decision, the preconditions to the operation of issue estoppel were confirmed to be as follows: (i) the same question was decided in an earlier judicial decision, (ii) the earlier decision was final, and (iii) the parties (or their privies) were the same in both proceedings. The Court went on to find that even if these preconditions are met, the Court must still determine whether, as a matter of discretion, issue estoppel ought to be applied, taking into account the entirety of the circumstances to consider whether application of issue estoppel in the particular case would work an injustice.

2011680 Ontario Inc. v. 968831 Ontario Inc., 2011 ONSC 4595

[57] Beginning with the principle of issue estoppel. Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460 (S.C.C.) is a leading case on issue estoppel. In this case, the Supreme Court of Canada held that where a party establishes the pre-conditions for an issue estoppel, a court must still determine whether, as a matter of discretion, issue estoppel ought to be applied. The court should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice.

Allarco Entertainment 2008 Inc. v. Rogers Communications Inc., 2011 ONSC 5623

[186] Issue estoppel prevents a litigant from re-litigating an issue that has been decided by a court in a previous proceeding between the same parties or their privies. The four requirements for an issue estoppel are: (1) the same issue must be involved in the initial and subsequent litigation; (2) the issue must have been actually litigated and determined in the first suit and its determination must have been necessary or fundamental to the result in the litigation; (3) the decision on the issue in question must have been final; and (4) the litigants must be a party or a privy of a party in the first suit: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460.

[187] In my opinion, the technical requirements for an issue estoppel are not made out in the case at bar, which brings me to the second reason for not treating the decision of the CRTC as a binding determination.

[188] Danyluk v. Ainsworth Technologies Inc., supra, adds an element of discretion to the determination of whether there is an issue estoppel. In this case, the Supreme Court of Canada held that where a party establishes the pre-conditions for an issue estoppel, a court must still determine whether, as a matter of discretion, issue estoppel ought to be applied. The court should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice.

Turner v. York University, 2011 ONSC 6151

[61] The principle of res judicata has been recognized as a fundamental doctrine of the justice system. As Binnie J. stated in Danyluk v. Ainsworth Technologies Inc. 2001 SCC 44 (CanLII), 2001 SCC 44 at para. 18.:

The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. ... An issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.

[62] Issue estoppel, a branch of res judicata, prevents parties or their privies from re-litigating those points that have been settled by the court. In Angle v. Canada (Minister of National Revenue - M.N.R.), 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248 at 254 Dickson J., identified three criteria that must be met in order for issue estoppel to apply:

... (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. ....

969625 Ontario Limited et al., v. Goldstone Resources Inc., 2012 ONSC 1134 (CanLII)

[16] The Supreme Court of Canada in Angle v. MNR, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248 at p. 254 defined the requirements of issue estoppel as:

1. That the same question has been decided;

2. That the judicial decision which is said to create the estoppel was final; and

3. That the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

[17] In a later decision, the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460 at para. 33 on the application of issue estoppel said:

Issue Estoppel: A two-step analysis

33. The rules governing issue estoppel should not be mechanically applied. The underlying purpose is to balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case. ...the first step is to determine whether the moving party has established the pre-conditions to the operation of issue estoppel set out by Dickson J. in Angle. If successful, the court must still determine whether, as a matter of discretion, issue estoppel ought to be applied.