The Evolving Question of Res Judicata: Penner v. Niagara (Regional Police Services Board)
The ancient principle of res judicata states that an issue that has already been decided in a previous case should not be brought for trial again. To do so wastes resources, and may bring the administration of justice into disrepute. Even in earlier times, the doctrine was not always easy to apply. The devil is in the details in deciding whether the issue is really the same.
An additional layer of complexity has been added due to the proliferation of quasi-judicial tribunals. The quality of these tribunals varies. Is it unfair to the party who lost if she is barred from having the matter tried in a real court? The Supreme Court of Canada (SCC) has gone back and forth on this question. In its latest case, Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, the court was deeply divided, in a 4 to 3 decision. The justices on the minority side in Penner protest that it is inconsistent with a decision the Court made two years ago.
Issue Estoppel in Danyluk and Figliola
To understand Penner, two previous decisions on issue estoppel in the context of administrative tribunals need to be reviewed. The first of these is Danyluk v. Ainsworth Technologies, 2001 SCC 44.
Ms. Danyluk claimed to be shortchanged by her former employer for $300,000 in commissions. She filed a claim with an Employment Standards Act (ESA) officer, who ruled against her. When she sued in court, the employer argued that it was res judicata because of the ESA decision. The SCC admitted that the situation met the three necessary conditions for issue estoppel: 1) the same question was dealt with; 2) the ESA ruling was a final judicial decision; and 3) the same parties or their privies were involved. The SCC acknowledged the general need for finality and affirmed its strong commitment to the principle of res judicata. However, in some circumstances, there is a need for discretion to avoid unfairness, and this was one of them. A unanimous Court allowed her appeal.
A more recent case is British Columbia v. Figliola, 2011 SCC 52. Its significance was emphasized by the minority in Penner, who saw it as rendering Danyluk obsolete. By contrast, the majority did not refer to Figliola by name at all, and simply asserted that Danyluk “has not been overtaken by this Court’s subsequent jurisprudence” (para 33).
Figliola has been covered in detail in a previous article at TheCourt. It concerned plaintiffs who felt their claim for chronic pain was not treated properly by the British Columbia Workers’ Compensation Board (WCB). Failing to gain satisfaction there, they took their complaints to a different administrative agency, the Human Rights Tribunal (HRT). The HRT was willing to claim authority over the matter, and ruled in their favour. This turf war between the two administrative tribunals ultimately led to the SCC, which found that the HRT had violated the principle of res judicata by asserting authority over a matter that had already been appropriately dealt with by the WCB.
The Penner Decision
This brings us to the latest decision, Penner v. Niagara (Regional Police Services Board). The colourful background details and the decision on the matter by the Ontario Court of Appeal were previously reported at TheCourt.
Mr. Penner was arrested and manhandled by two police officers, on the grounds that he was being disruptive while a spectator in court. He launched two different actions in response to this. One was a civil action for damages by statement of claim at the Superior Court. The other was a complaint to the Police Services Board, which led to a disciplinary hearing against the officers before a tribunal of the type specified in the Police Services Act (PSA). Mr. Penner was allowed to participate as a complainant at this tribunal, but he was not represented by counsel. This process (and the subsequent appeals) concluded with the officers being exonerated on the charge of unlawful arrest.
Mr. Penner abandoned the attempt to have the officers punished, but wanted to pursue his civil claim. In response, the police defendants applied to have the action dismissed on the grounds of issue estoppel, arguing that the same issues had already been decided in their favour at the disciplinary hearings under the PSA. The motions judge granted their motion. On appeal, the Ontario Court of Appeal found that the motions judge had not followed the proper procedure with respect to considering discretion, but agreed that discretion was not warranted in this case. Penner’s appeal was dismissed.
The Flexible Confines of Res Judicata
Res judicata, for all that it is an important and frequently encountered doctrine, is not well defined. In Ontario’s Rules of Civil Procedure, it is not mentioned explicitly, and is considered to be subsumed under Rule 21.01(b), “discloses no reasonable cause of action.” The rules of res judicata derive entirely from judicial precedent. Even if the usual criteria for res judicata are satisfied, the court has a residual discretion to refuse to apply it if it would be unjust to do so. (This makes it sound like a rule of equity, but was applied in the common law courts as well when the two were separate.) This element of discretion was highlighted by the SCC in Danyluk, and emphasized again in Penner, where the majority (led by Justices Cromwell and Karakatsanis) allowed Penner’s appeal:
“The flexible approach to issue estoppel provides the court with the discretion to refuse to apply issue estoppel if it will work an injustice, even where the preconditions for its application have been met. However, in our respectful view, the Court of Appeal erred in its analysis of the significant differences between the purpose and scope of the two proceedings, and failed to consider the reasonable expectations of the parties about the impact of the proceedings on their broader legal rights” (para 8).
The majority insisted that they were not calling into question the validity of the PSA process or suggesting that it was inferior to the court process. Rather, they emphasized the different purposes of the PSA process and the civil action. The PSA was a police disciplinary matter in which Penner could not gain any financial compensation, and therefore he did not have an incentive to put his best foot forward. (This distinguishes it from the situation in Figliola, although the majority did not refer to it.)
The standard of proof required to convict an officer under the PSA is quite high, bearing a resemblance to the criminal standard, rather than the balance of probabilities used in a civil trial. On public policy grounds, the majority argued that it would be undesirable to discourage citizens from making PSA complaints, for fear that it would later bar them from taking a civil action.
The Future of Issue Estoppel
Anybody looking for a clear or concrete rule about issue estoppel will not find it in the majority’s decision. The bottom line is that these judgments are subjective and must be made on a case by case basis:
“The list of factors in Danyluk merely indicates some circumstances that may be relevant in a particular case to determine whether, on the whole, it is fair to apply issue estoppel. The list is not exhaustive. It is neither a checklist nor an invitation to engage in a mechanical analysis” (para 38).
“In Danyluk, the prior proceeding was found to be unfair, which is one of the grounds for barring issues estoppel. However, even where the prior proceedings were conducted fairly and properly having regard to their purposes, it may nonetheless be unfair to use the results of that process to preclude the subsequent claim” (para 39).
They did emphasize the desirability of limiting actions, and that the fairness exception should only apply in the most serious and exceptional cases:
“Fairness, in this second sense, is a much more nuanced enquiry…. In order to establish unfairness in the second sense we have described, such differences must be significant and assessed in light of this Court’s recognition that finality is an objective that is also important in the administrative law context…. [I]f courts routinely declined to apply issue estoppel because the procedural protections in the administrative proceedings do not match those available in the courts, issue estoppel would become the exception rather than the rule.”
That appears to be exactly what the vocal minority was most worried about, led by Justice Abella. While they laid out a number of legal arguments, the strongest argument for the minority is simply a policy-based one:
“The justice system faces important difficulties in respect of access to civil and criminal justice. To hold that the traditional model of civil and criminal justice is the golden standard against which the fairness of administrative justice is to be measured clearly does not meet the needs of the times from a policy perspective” (para 77).
“The ‘twin principles’ which underlie the doctrine of issue estoppel — ‘that there should be an end to litigation and … that the same party shall not be harassed twice for the same cause’ … — are core principles which focus on achieving fairness and preventing injustice by preserving the finality of litigation. This, as the majority said in Figliola, is the case whether we are dealing with courts or administrative tribunals. Our colleagues’ approach undermines these principles and risks transforming issue estoppel into a free-floating inquiry into ‘fairness’ and ‘injustice'” (para 78).
Ironically, Justice Abella’s argument relied heavily on obiter comments supporting the principle of res judicata made by Justice Binnie in Danyluk. Given that Justice Binnie was delivering a unanimous decision that ruled against issue estoppel in that case, I would respectfully submit that she has taken those comments out of context.
This is one of those cases of a split decision where one can sympathize with both sides. The SCC is not absolutely bound by its own previous decisions, but it avoids departing from them unless there is a compelling reason. The majority has made a plausible argument that their decision in Penner is consistent with previous decisions. The minority over-emphasized the decision in Figliola, which can be distinguished. However, on the facts and merits of the case at bar, the minority has made a plausible argument that allowing the appeal was unwarranted and will only increase confusion about the application of issue estoppel.