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Equity - Issue Estoppel

Victoria University (Board of Regents) v. GE Canada Real (Ont CA, 2016)

In this case the Court of Appeal canvasses principles applicable to the application of issue estoppel:
(2) Issue Estoppel

[95] Under the heading of issue estoppel, I will first describe the applicable legal principles. Then I will address Revenue Properties #1 analysis of the freehold/leasehold distinction and the treatment accorded that issue by the Appeal Judge and the Majority. Next, I will consider whether the Appeal Judge was correct in concluding that the Majority erred in departing from Revenue Properties #1 by considering a potential freehold condominium project in the FMV. Lastly, I will address the treatment accorded to special circumstances.

(a) Legal Principles

[96] As Binnie J. explained in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460, at para. 25, the three preconditions to the operation of issue estoppel are the following:
(1) that the same question is being decided;

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

(3) that the parties to the judicial decision are the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
[97] One of the key objectives of issue estoppel is judicial finality: “[t]he doctrine prevents an encore, and reflects the law’s refusal to tolerate needless litigation” (per Laskin J.A. in Minott, quoting from Holmstead and Watson, Ontario Civil Procedure, loose-leaf, vol. II, at s. 21. § 17[3]). More recently, the Supreme Court discussed issue estoppel in Penner v. Niagara (Regional Police Services Board), 2013 SCC 19 (CanLII), [2013] 2 S.C.R. 125, stating as follows, at para. 29:
The one relevant [doctrine] on this appeal is the doctrine of issue estoppel. It balances judicial finality and economy and other considerations such as fairness to the parties. It holds that a party may not relitigate an issue that was finally decided in prior judicial proceedings between the same parties or those who stand in their place. However, even if these elements are present, the court retains discretion to not apply issue estoppel when its application would work an injustice.
[98] However, as noted by Laskin J.A. in Minott, at p. 340, courts have not mechanically applied the doctrine every time the preconditions for its application have been satisfied:
That the courts have always exercised this discretion is apparent from the authorities. For example, courts have refused to apply issue estoppel in "special circumstances", which include a change in the law or the availability of further relevant material. If the decision of a court on a point of law in an earlier proceeding is shown to be wrong by a later judicial decision, issue estoppel will not prevent relitigating that issue in subsequent proceedings.

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