Introduction

All forms and attempts at relitigating matters that have already been determined are considered an abuse of process. The doctrine applies to any attempt to challenge a previous and final judicial determination. It is a very flexible doctrine and is unencumbered by the requierments on parties that exist under the concepts of issue and action estoppel.

What is Issue Estoppel and Cause of Action Estoppel?

Issue estoppel prevents relitigation of the material facts that the cause of action in the previous action considered. It must be kept in mind that different causes of action may have one or more material facts in common. Where new causes of action are raised in a new action but founded on the same facts as pleaded in the first action, the new issue or question must be necessarily bound up with the determination made in the prior proceeding before issue estoppel will apply.

Cause of action estoppel prevents the relitigation of claims that have already been decided. For it to apply, the basis of the cause of action in the subsequent action was either previously argued or could have been argued in the prior action if the plaintiff had exercised reasonable diligence. The court then is empowered to prevent any relitigation when an issue or point is raised in the second proceeding which properly belonged to the subject of the previous litigation.

Issue Estoppel

The requirements at law to establish issue estoppel were set out by the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc (2001). They are as follows:

1. The same question has been decided;
2. The judicial decision said to give rise to the estoppel is final; and,
3. The parties to the judicial decision or their privies were the same persons as the parties to the proceeding in which the estoppel is raised.

Even where all three elements are proven the court retains a residual discretion not to apply issue estoppel when its application would result in an injustice.

Cause of Action Estoppel

It is not enough to show that the cause of action could have been argued in the prior proceeding in order to establish cause of action estoppel. An additional step is needed, being that the cause of action in question properly belonged to the subject of the prior action and should have been raised in that action. Equally, as is needed in issue estoppel, the previous decision must be final, and the parties to that decision must have been the same persons or their privies to the parties in the second proceeding.

Should the Issue have been Raised Before?

The factors to answer this question were set out by the Nova Scotia Court of Appeal in Hogue v. Montreal Trust Co. of Canada (1997) where leave to appeal to the Supreme Court of Canada was refused. They are as follows:

1. Whether the second proceeding is a collateral attack against the earlier decision;
2. Whether the second proceeding relies on evidence that could have been discovered in the past proceeding with reasonable diligence;
3. Whether the second proceeding relies on a new legal theory that could have been advanced in the past proceeding.

Further, the law does not permit the manipulation of the underlying facts to advance a new legal theory or the same loss being advanced on a different cause of action.

At Milosevic & Associates, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial litigation matters ranging from straightforward contract and partnership disputes to complex multi-party commercial claims including dealing with claims of loss from real estate transactions. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself.  Call us at 416-916-1387 or contact us online to schedule a consultation.