Simon's Megalomaniacal Legal Resources

Estoppel - Issue Estoppel (4)

. Halton (Regional Municipality) v. Canadian National Railway Company

In Halton (Regional Municipality) v. Canadian National Railway Company (Ont CA, 2024) the Court of Appeal considered (and dismissed) appeals of denials of injunction and declaration applications by several local municipalities against CN, this with respect to the construction of a huge rail intermodal hub near Milton. The primary issue was the extent to which this federal project required provincial and municipal authorizations in the face of the doctrine of 'interjurisdictional immunity'.

Here the court considers an issue estoppel concern:

[83] The application judge did not err by “ignoring” the stay motion judge’s conclusion that Halton’s application was not “premature” or “too hypothetical or lacking a concrete factual foundation”. The underlying principles of res judicata, issue estoppel and abuse of process that Halton is invoking do not apply. Issue estoppel, the branch of res judicata designed to prevent re-litigation of issues previously decided in another court proceeding, requires the issue to be the same as the one that was decided in the prior decision: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 23; Catalyst Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, (2019) 145 O.R. (3d) 759, at para. 25. To determine whether the issue is the same, a court is to ask whether “on careful analysis ... the answer to the specific question in the earlier proceeding can be said to determine the issue in the subsequent proceeding”: Heynen v. Frito Lay Canada Ltd. (1999), 1999 CanLII 1386 (ON CA), 45 O.R. (3d) 776 (C.A.), at para. 20; Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141, 457 D.L.R. (4th) 530, at para. 59. The stay motion judge’s decision that the application before her was not premature or too hypothetical does not determine whether the application before the application judge was too hypothetical or premature because the applications sought different relief, and the positions of the parties had evolved. The issue the stay motion judge resolved was whether the declarations Halton sought in its initial, narrower application were too premature or too hypothetical on the record before her to permit that application to proceed to a hearing, on the premise that CN was claiming absolute immunity as a federal undertaking from all provincial legislation.[4] In contrast, the application judge’s task was to determine if, on the factual record before him, the much broader declarations sought in the second revised application were premature or too hypothetical to adjudicate after the hearing, where CN was not claiming absolute immunity as a federal undertaking from all provincial legislation.

. Canada v. Greenwood

In Canada v. Greenwood (Fed CA, 2023) the Federal Court of Appeal considered issue estoppel, here in a class action certification context:

(1) Issue estoppel

[35] Issue estoppel is a common law doctrine that provides that once a judicial proceeding finally decides an issue, neither party can re-litigate that issue. The doctrine rests on the finality principle. As aptly summarized by the Ontario Court of Appeal in Smith Estate v National Money Mart Company, 2008 ONCA 746, 303 DLR (4th) 175 at para. 33: “[o]nce a point has been decided, the winning litigant is entitled to rely on the result, to be assured of peace and to be able to plan the future on the basis of the court’s decision.” The doctrine also exists to preserve scare judicial resources and prevent parties from exposure to additional legal costs, as well as to reduce the risk of undue litigation (Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125 at para. 28).

[36] It is well established that issue estoppel emerges in the presence of three preconditions (Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460 at para. 25 (Danyluk)):

(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 or their privies.

[37] Furthermore, even if all the preconditions are established, a judge will retain a broad discretion to refuse to apply the doctrine of issue estoppel if its application were to create an injustice (Danyluk at para. 33):

The first step is to determine whether the moving party … has established the preconditions to the operation of issue estoppel ... If successful, the court must still determine whether, as a matter of discretion, issue estoppel ought to be applied ... [emphasis in original]

[38] In the present case, and I agree with the appellant on this point, the certification judge conflated whether the issue at hand was finally resolved with whether the entirety of the claim was finally determined. She did so in a cursory manner, without reference to the relevant case law.

[39] Indeed, there are decisions stating that the doctrine of issue estoppel applies to interlocutory orders (Hawley v. North Shore Mercantile Corp., 2009 ONCA 679, 99 O.R. (3d) 142 at para. 26, leave to appeal to SCC refused, 33440 (April 22 2010), citing Fidelitas Shipping Co. v. V/O Exportchieb, [1965] 2 All E.R. 4 at 10 (CA UK); see also R. v. Duhamel, 1981 ABCA 295 at para. 14, aff’d 1984 CanLII 126 (SCC), [1984] 2 S.C.R. 555). More particularly, in the context of class proceedings, a number of decisions confirm that issue estoppel applies to class certification motions with the understanding that judges retain discretion not to apply it when they are of the view it would lead to an injustice (see Risorto v. State Farm Mutual Automobile Insurance Co., [2009] O.J. No. 820, 72 C.C.L.I. (4th) 60 at para. 49; Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2014 BCSC 1280, 376 D.L.R. (4th) 302 at paras 28–30, 60, 78 (Pro-Sys); Turner v. York University, 2011 ONSC 6151, 209 A.C.W.S. (3d) 228 at paras 63–65; Corless v. Bell Mobility Inc., 2023 ONSC 6227 at paras 51–58 (Corless); Fanshawe College of Applied Arts and Technology v. LG Philips LCD Co., 2016 ONSC 3958, 270 A.C.W.S. (3d) 23 at paras 43–53).

[40] While certification orders do not dispose of the entire proceeding, they may yield final rulings on issues going to the merits of the case, such as class definitions and common questions. As it was put by our Court in Apotex Inc. v. Merck & Co. (C.A.), 2002 FCA 210, [2003] 1 F.C. 242 at para. 27:

The decision which is said to give rise to the estoppel need not be a decision which determines the entire subject-matter of the litigation. The test for issue estoppel is a substantive issue test where the decision affects substantive rights of the parties with respect to a matter bearing on the merits of the cause of action.

[41] Accordingly, certification orders issued in the context of class proceedings may be subject to issue estoppel. Although Rule 334.19 contemplates the possibility of amending a certification order, it does not displace the doctrine of issue estoppel that exists to prevent re-litigation. Both the rule and the doctrine have to be taken into account and the judge’s discretion has to be exercised consequently and appropriately (Pro-Sys at para. 28). Any other approach would undermine judicial economy (which the doctrine of issue estoppel fundamentally seeks to protect) by allowing litigants to repeatedly and endlessly re-open certification orders.

[42] That being said, there are circumstances where the doctrine of issue estoppel can be set aside, namely in the event of an appeal, a material change in circumstances, or new evidence (Donald J. Lange, The Doctrine of Res Judicata in Canada, 5th ed. (Toronto: LexisNexis, 2021) at 328).

. Canadian Imperial Bank of Commerce v. Canada

In Canadian Imperial Bank of Commerce v. Canada (Fed CA, 2023) the Federal Court of Appeal considered (and necessarily endorsed by their dismissal of the appeal) a Tax Court's contrast between the doctrines of issue estoppel and abuse of process:

[19] The Tax Court Judge cited the three requirements for issue estoppel as set out by the Supreme Court of Canada in Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248:

[22] ... (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 ...

[20] The Tax Court Judge noted, in paragraph 28 of his reasons, that once the three requirements are satisfied, the Court retains the discretion to not apply issue estoppel:

Essentially, the court's exercise of discretion either to apply or not to apply issue estoppel with respect to a given case, once all three formal requirements are satisfied, must be guided by the underlying policy concerns of res judicata and good sense.

[21] The Tax Court Judge noted that cause of action estoppel, issue estoppel and abuse of process are all concerned with similar policy principles. Abuse of process is more flexible as it does not have the same specific requirements as cause of action estoppel or issue estoppel.

[22] For the doctrine of abuse of process, the Tax Court Judge cited, at paragraph 30 of his reasons, the following summary of the decision of the Supreme Court in Toronto (City) v. Canadian Union of Public Employees, Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 in Donald J. Lange, The Doctrine of Res Judicata in Canada, 5th ed (Markham: LexisNexis Canada Inc., 2021), c. 1 at §4 (Lexis e-book):

[30] Lange summarizes the Supreme Court of Canada's analysis in Toronto (City) regarding the abuse of process doctrine as follows:

1. The doctrine is not encumbered by the specific requirements of res judicata.

2. The proper focus for the application of the doctrine is the integrity of the judicial decision-making process.

3. Relitigation may be necessary to enhance the credibility and effectiveness of judicial decision-making when, for example, there are special circumstances.

4. The interests of the parties, who may be twice vexed by relitigation, are not a decisive factor.

5. The motive of a party in relitigating a previous court decision for a purpose other than undermining the validity of the decision is of little import in the application of the doctrine.

6. The status of a party, as a plaintiff of defendant, in the relitigation proceeding is not a relevant factor.

7. The discretionary factors that are considered in the operation of the doctrine of issue estoppel are equally applicable to the doctrine of abuse of process by relitigation.

[23] The Tax Court Judge also noted:

[31] Citing Justice McLachlin (as she then was) in R v Scott, [1990 CanLII 27 (SCC), [1990] 3 S.C.R. 979] the Supreme Court of Canada states in Toronto (City) that “abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principles of justice underlying the community's sense of fair play and decency.”