Wednesday, 12 October 2011

BCCA: Admission of Court Records and Res Judicata

The decision in Petrelli v. Lindell Beach Holiday Resort Ltd., 2011 BCCA 367, came out in early September, but I believe deserves a very honourable mention even more than a month after the fact.

Purchasers of a "holiday home" in the defendant's trailer park were successful in their suit to rescind the contract on the basis that municipal bylaws prohibited the use of the trailer park for holiday homes.  Their friends, the plaintiffs, then also brought an action for the same relief.  This time, the defendants raised new defences, which the defendants sought to strike on the basis of res judicata.  Overturning the chambers judge's ruling, the court of appeal allowed the action to proceed on the basis that the same defences were not raised in the first action, and the precondition of mutuality was not met.

In the course of this rather compact judgment (only 88 paragraphs), Groberman J.A. addressed and conveniently summarized a number of important issues regarding admissibility of court records from other proceedings, issue estoppel, cause of action estoppel, and abuse of process.

Admissibility of Court Records

Groberman J.A. rejected the defendant's argument that court can take judicial notice of its own records, including pleadings from other proceedings.  However, he confirmed that such documents are admissible without formal proof, and without being attached to affidavits, but as long as "at least some step (however informal)" is made to make them part of the evidence.

[36]           It is well established, however, that proof in accordance with s. 26 [of the Evidence Act] is not needed in order for a court to make use of its own records. Courts have long accepted that they are entitled to look at their own records even if those records have not been formally proven and entered in evidence:  ... In R. v. Hunt ... the Ontario Court of Appeal stated the general proposition that “[t]he Court has at all times the power to look at its own records and take notice of their contents”.

[37]           Such documents do not have to be attached to affidavits, or presented to the court in the same way that most documentary evidence is presented. In R. v. Truong, 2008 BCSC 1151, 2008 BCSC 1151 at para. 57, Smart J. described the situation as follows:
[57]     It has been said that documents do not walk into a courtroom unaccompanied. Usually, this is true. Documents are typically introduced into evidence through the evidence of a witness or by affidavit evidence pursuant to a statutory provision. See for example s. 29 and s. 30 of the Canada Evidence Act. However, documents in the court's own files are an exception to this usual rule.
[38]           I have no doubt that the parties could have asked the chambers judge to look at the pleadings in the Bahry action without attaching those pleadings to affidavits, and without proving them in accordance with s. 26 of the Evidence Act. Further, in keeping with cases such as Lewis and Hunt, it seems to me that the judge, with notice to the parties, was entitled to examine the pleadings in Bahry even without them having invited him to do so.
[44]           In the case before us, neither party drew the judge’s attention to the statement of defence in the Bahry action, nor did the judge indicate an intention to examine it. In the circumstances, I am of the view that it did not become evidence in this case. I do not agree with the defendant’s assertion that this Court may take “judicial notice” of the pleadings in the Bahry action without some step (however informal) having been taken to make them part of the evidence in the court below.
Mere admission into evidence says nothing regarding the purpose for which the records may be used.  This, of course, is still subject to the usual evidentiary rules.

Issue Estoppel

Groberman J.A. cited a convenient summary of the conditions for issue estoppel and found that, although the SCC did tentatively extend the doctrine of abuse of process beyond the mutuality requirement (which was not met in this case), that didn't apply in the instant case because the issue in the second action was not before the court in the first action:
[63]           In order to analyze the argument, it is helpful to begin with the doctrine of issue estoppel, which holds that where a court has finally determined an issue between two parties, the determination cannot be questioned in subsequent proceedings. The requirements for issue estoppel were conveniently listed in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44:
[25]      The preconditions to the operation of issue estoppel were set out by Dickson J. in Angle [Angle v. Minister of National Revenue, 1974 CanLII 168, [1975] 2 S.C.R. 248] at 254:
(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 proceddings in which the estoppel is raised or their privies.
[65]           The plaintiffs argue, however, that a court has discretion to prevent a party from relitigating an issue even where the condition of mutuality is not present. They say that this discretion arises out of the flexible doctrine of abuse of process discussed in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63.
[68]           The Court did, however, find that the inherent discretion of courts to prevent an abuse of their processes could be used to preclude relitigation of an issue.
[74]           Given that it is clear that the issue of legal non-conforming use was not before the court in Bahry, it is unnecessary to examine this question further. The doctrine of abuse of process by relitigation, to the extent that it is analogous to issue estoppel, simply does not arise in this case.

Cause of Action Estoppel and Abuse of Process

Dismissing the issue estoppel argument, Groberman J.A. summarized and discussed the second branch of res judicata, cause of action estoppel, and found that the expansive principles elucidated by the SCC in Toronto, were not applicable to this doctrine:

[78]           The distinction between the two branches of res judicata was briefly noted by Dickson J. in Angle at 254:
[Res judicata] has two species. The first, “cause of action estoppel”, precludes a person from bringing an action against another when that same cause of action has been determined in earlier proceedings by a court of competent jurisdiction … The second species of estoppel per rem judicatam is known as “issue estoppel”, a phrase coined by Higgins J. of the High Court of Australia in Hoystead v. Federal Commissioner of Taxation (1921), 29 C.L.R. 537, at p. 561:
I fully recognize the distinction between the doctrine of res judicata where another action is brought for the same cause of action as has been the subject of previous adjudication, and the doctrine of estoppel where, the cause of action being different, some point or issue of fact has already been decided (I may call it “issue-estoppel”).
[80]           The two branches of res judicata have much in common. As Lord Keith of Kinkel said in Arnold v. National Westminster Bank Plc., [1991] 2 A.C. 93 at 110, “[e]stoppel per rem judicatam, whether cause of action estoppel or issue estoppel, is essentially concerned with preventing abuse of process”.

[81]           That said, there is a subtle difference in focus between the two branches of res judicata. Cause of action estoppel is focussed primarily on fairness to litigants. The idea behind it is that a party should not be “twice vexed” with litigation, and should be entitled to deal with the entirety of the opposite party’s case within a single piece of litigation. Issue estoppel, on the other hand, as discussed in Toronto v. C.U.P.E., is primarily concerned with the integrity of the judicial system – the efficiency of the trial process and the authority and credibility of judicial findings.

[82]           In identifying the primary focus of each branch of res judicata, I do not suggest that there is no overlap between them. Some cases involving issue estoppel will raise concerns about fairness to litigants, and some cases of cause of action estoppel will raise concerns about the integrity of the judicial system. My point is merely that, because the primary focus of each branch of res judicata is different, it is not appropriate to assume that what is said about one branch applies equally to the other.

[87]           I do not suggest that these various examples of conduct that might amount to an abuse of process are exhaustive. In a case such as the present, however, where the principles set out in Toronto v. C.U.P.E. are not directly applicable, the court must examine the situation carefully to determine whether there is anything about it that constitutes an abuse. I am unable to find anything of that sort in this case.