Court Of Appeal Weighs In On The Legal Doctrine Of Res Judicata

In Singh v. McHatten, the Plaintiff commenced an action against the Defendant in Provincial Court with respect to the issue of liability only. The Court found in favor of the Plaintiff, who then commenced an action in Supreme Court for personal injury damages. ICBC’S lawyer argued that the case should be dismissed, however the Court disagreed, holding that it was only the issue of liability that had previously been decided.

 

[29]           The defendants contend that the criteria are met for both issue estoppel and cause of action estoppel. The plaintiff’s claims in both his Small Claims action and this action arise out of the same accident. Judge MacGregor found that the defendant driver Mr. McHatten was responsible for the accident and awarded damages. The damages may not have been as significant as if Mr. Singh had advanced a claim for damages for personal injury, but he was obliged to bring all matters before the court at that time.

 

[30]           The plaintiff argues that the facts of the case concern cause of action estoppel and the fourth criteria has not been met. The transcript of the proceedings in Small Claims Court show that the only issue considered was liability and the issue of damages was to be dealt with at a later date. Moreover, at the time the Small Claims action was commenced in September 2006, less than two months after the accident, it was far too early for an assessment of any personal injury damages, and any damages may be beyond the monetary limit of Small Claims Court. Alternatively, based on the rule in Henderson there are special circumstances that exist and the court should exercise its discretion and decline to apply the plea of res judicata.

 

[31]            In my view the cause of action in the prior Small Claims action is distinct from the cause of action in this Court. While the Notice of Claim filed by the plaintiff in Small Claims Court claimed “vehicle damage & repair costs”, it is clear on a review of the transcript of the proceedings that the plaintiff’s vehicle had been repaired by ICBC; he was not seeking damages for repair costs because ICBC had paid the repair costs. The primary issue was ICBC’s determination that the plaintiff was wholly at fault for the accident and the plaintiff’s increased insurance premiums. Counsel for the plaintiff made it clear that the claim for personal injuries and damages would be dealt with later, and that was understood by counsel for ICBC. On that basis neither the third nor the fourth criteria for cause of action estoppel, or the first criteria for issue estoppel have been met.

 

[32]           The facts of this case are similar to the facts in Innes v. Bui and Evans v. Campbell. Whether issue estoppel or cause of action estoppel is applicable, at the end of the day the court must determine whether it should exercise its discretion to bar the action by reason of res judicata or whether there are exceptional or special circumstances that should apply.

 

[33]           I find that all of the criteria necessary for cause of action estoppel or issue estoppel have not been met. If I am wrong, there are special circumstances not to apply res judicata for to do so would cause a real injustice to the plaintiff. The plaintiff has not had his day in court on his claim for damages for personal injuries arising out of the accident. It may be that the issue of liability is res judicata, but the application was not argued on that basis. Rather, it is argued that the plaintiff should have brought his claim for personal injuries at the same time he brought his action in Small Claims Court. In certain circumstances that may be correct but only if the claim can be brought within the monetary limit of Small Claims Court. However, the fact remains that the plaintiff’s claim for damages for personal injuries has never been before a court and considered. To dismiss the plaintiff’s claim at this stage of the litigation would be denying the plaintiff an opportunity to be heard on that issue and unjust.

 

[34]           The application is dismissed with costs.

 

The British Columbia Court of Appeal, however, reversed this decision of the British Columbia Supreme Court. The Court stated that a separate claim against ICBC for breach of contract or breach of statutory duty (for example, to revisit their original position on liability for the purposes of insurance premiums and a return of a deductible) will not prevent a Plaintiff from commencing another claim for injuries against the offending motorist. However, if the original action is commenced against the offending motorist for damages for increased premiums, then a later action for other damages such as injuries would be estopped (not allowed to occur).

 

[3]             The judge dismissed the application on the finding that the causes of action were not the same.  She held that although nominally the defendants were the same, the real dispute in Small Claims Court was between the respondent and the Insurance Corporation of British Columbia (“ICBC”) over ICBC’s attribution of fault in the accident having implications for future insurance premiums and recovery of the deductible on the respondent’s collision repairs.  She distinguished this suit from the Supreme Court action, which is a claim for personal injury damages.

 

[4]             The judge held in the alternative that if the elements of cause of action estoppel were present, she would exercise her discretion against applying the doctrine on the basis that otherwise the respondent would be denied his day in court.

 

[5]             The appellants say the judge erred in confusing the respondent’s motivation for bringing the first proceeding with the cause of action supporting it and in failing to identify any valid special circumstance justifying the refusal to give effect to cause of action estoppel.

 

[6]             I respectfully agree with these contentions.  I would allow the appeal and dismiss the action.

 

[19]         The other flaw in the judge’s reasoning lies in her equating the respondent’s motivation in bringing the first action with a cause of action.  The causes of action in the two proceedings are undeniably the same:  damages for negligence.  In order to achieve the respondent’s goal of reversing ICBC’s fault determination and to recover the deductible, it was necessary for the respondent to sue the driver and owner/lessor and prove all the elements of negligence:  duty of care, standard of care, causation and loss.  He would have to repeat the same process in the Supreme Court action in order to recover personal injury damages.

 

[20]         The respondent could have sued ICBC in Small Claims Court without attracting an estoppel defence in the later proceeding.  Those were the circumstances of Innes v. Bui, 2010 BCCA 322.

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