Issue Estoppel

Metropolitan Toronto Condominium Corporation No. 1352 v. Newport Beach Development Inc., 2012 ONCA 850 has a useful discussion of when issue estoppel applies in the context of an administrative tribunal decision:

 [32] Issue estoppel and collateral attack are two doctrines intended to prevent abuse of the process of decision making. Issue estoppel prevents a party from re-litigating in one forum an issue already decided in another forum. It rests on the idea that a litigant should be able to rely on the decision of an authoritative adjudicator being final and binding on the other party: see British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52, [2011] 3 S.C.R. 422, at para. 1.

 [33] As I’ve explained above, Metro 1352 has sued Newport for negligence, breach of contract and breach of fiduciary duty, as well as for breach of the statutory warranties. Section 13(6) of the Act provides that the statutory warranties are in addition to any other rights a homeowner may have. Therefore, subject to Newport’s argument on s. 23 of the purchase agreements, Metro 1352 is entitled to pursue its common law causes of action in the Superior Court. The narrow question Newport’s appeal raises is whether issue estoppel forecloses a civil action on the statutory warranties or whether applying issue estoppel would work an injustice.

 [34] It is now well accepted that a decision made by an administrative tribunal or officer can give rise to issue estoppel: see Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460; British Columbia (Workers’ Compensation Board) v. Figliola, at para. 27. Tarion, though a private corporation, was established under a statute to administer a legislative regime. The decision of a Tarion field claim representative, acting as an administrative officer, may therefore be subject to the operation of issue estoppel.

 [35] However, as Binnie J. emphasized in Danyluk, at para. 33, the underlying purpose of issue estoppel is to balance the public interest in the finality of litigation against the public interest in ensuring justice is done in a particular case. This balancing requires the court to undertake a two-step analysis. At the first step, the court determines whether the moving party – here Newport – has established the preconditions to the application of issue estoppel. If it has, at the second step, the court determines, in its discretion, whether issue estoppel ought to be applied or whether applying it would work an injustice.

 [36] The preconditions for applying issue estoppel are well-established: see Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; Danyluk, at paras. 35-61. To apply issue estoppel to Metro 1352’s civil action, Newport had to establish that:

 · Tarion decided the same question or issues now raised in the action;
 · Tarion’s decisions were judicial decisions;
 · Tarion’s decisions were final decisions; and,
 · The parties or their privies to Tarion’s decisions were the same persons as the parties or their privies to the civil action.

 [37] The motion judge held that Newport had not made out the preconditions for issue estoppel because Tarion’s decisions were neither judicial decisions nor final decisions. Both Newport and Tarion submit that the motion judge erred in her holding. They contend that Tarion decisions are judicial decisions and final decisions for the purpose of applying issue estoppel.