court of appeal for ontario - academicfreedom.ca

[201] If I am wrong in my analysis of issue estoppel, I exercise that judicial discretion that the Supreme
Court of Canada set out in Danyluk, supra, in the circumstances of this case.
[202] It is the position of the corporate Defendants and the Trust that the issues were previously litigated and
that the same facts have been raised before me. They say that these equitable doctrines are there to ensure
that there is an end to litigation. The corporate Defendants and the Trust were never part of the earlier
action. The action was that of Katana, and I have set out the issues, which MacKenzie J. said were before
him involving Hilltop and DiBattista. None of those issues were before me. In the opening of these
Reasons, I have listed the issues as set out in the various pleadings. None of those were before MacKenzie J.
Katana, of course, is involved in both proceedings, given the nature of the proceedings. Kikas is a key
player in both, and while there is an evidentiary overlap, the cases make it clear that this is not sufficient to
bring res judicata and issue estoppel into play. The Judgment of MacKenzie J. had nothing to do with the
fraudulent conveyance issues. The Judgment of MacKenzie J. had nothing to do with the Trust and its
interplay in the action before me. There was no finding in the earlier action, that Katana was Valleywood's
agent or that he beneficially owns a substantial portion of it. The Wilson lands, in the action before me,
came up in a totally different context, being that of their transfer by assignment from Hilltop to West
Mayfield.
[203] In my view, the Plaintiffs have not set up the same proceeding or the same issues in a different guise.
The privies in the two cases are clearly different with the exception of DiBattista and Hilltop and Katana.
Although the Defendants tried to argue that the Plaintiffs were really re-arguing the issue of breach of
contract again, I do not see this as the case before me. Nor were the issues raised in the various
Counterclaims ones that were before MacKenzie J. I cannot see where Hilltop and DiBattista could have
earlier raised the issues of fraudulent conveyance the Trust being a sham, in the earlier action. The Trust
was unknown in the earlier action.
[204] Abuse of process is a more general term than issue estoppel, and it is a discretionary principle that is
not limited by any set number of categories. Molloy J. in Kenderry-Esprit (Receiver of) v. Burgess,
MacDonald, Martin & Younger, (2001) 53 O.R. (3d) 208 applies the principle set out by the Finlayson, J.A.,
writing for the majority in Canam Enterprises Inc. v. Coles, (2000), 51 O.R. (3d) 481 [2000] O.J. No.46067
(C.A.) at para. 31 [p.490 O.R.]:
Abuse of process is a discretionary principle that is not limited by any set number of categories.
It is an intangible principle that is used to bar proceedings that are inconsistent with the
objectives of public policy. The doctrine can be relied upon by persons who were not parties to
the previous litigation but who claim that if they were going to be sued they should have been
sued in the previous litigation.
[205] The Court looks at whether the same evidence is needed to support the issues on both cases. It looks
to see if a defendant had been named in the earlier proceeding, and had been able to defend the main action,
that defendant would have been able to address the issues. It is the position of Valleywood, that its
components Snelcrest, Mellow and #797, should not have been sued in the action before me. They say that
if DiBattista and Hilltop wanted to go after Valleywood to collect on the Judgment of MacKenzie J.,
Valleywood and its components should have been added as parties to DiBattista’s Counterclaim. While
hindsight, after the Trial before MacKenzie, J. is helpful, it is not the case when one examines what the
earlier action was all about and who the privies were. Katana, was the plaintiff in that action, not
Valleywood. He distanced himself, in all documentation in that case, from Valleywood, to protect the
Wilson lands and the agreement in his name. If he was to have a counterclaim against him, he wanted it to
be personally against him. This happened in other times in the many lawsuits brought by Katana relating to
the Valleywood lands. The other actions have been noted by me earlier in these Reasons.
[206] In Toronto (City) v. C.U.P.E., Local 79, [2000] 187 D.L.R. (4 th ) 323 (Ont. Div. Ct.) the Court looked
at what amounted to abuse of process. The Court quoted at pp.338 and 339 the Judgment of Lord Denning
in Eagle, Star and British Dominion Insurance Co. v. Heller, 140 S.E. 314 (1927) at p.239, where he said that
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2003 CanLII 45839 (ON SC)