Danyluk v. Ainsworth Technologies Inc. et al., 2001 SCC 44

• Judge: McLachlin, C.J.C., Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ.
• Court: Supreme Court (Canada)
• Case Date: July 12, 2001
• Jurisdiction: Canada (Federal)
• Citations: 2001 SCC 44;(2001), 149 O.A.C. 1 (SCC);[2001] 2 SCR 460;54 OR (3d) 214;201 DLR (4th) 193;272 NR 1;34 Admin LR (3d) 163;[2001] CarswellOnt 2434;JE 2001-1439;[2001] SCJ No 46 (QL);106 ACWS (3d) 460;10 CCEL (3d) 1;149 OAC 1;[2001] ACS no 46;7 CPC (5th) 199

Danyluk v. Ainsworth Tech. Inc. (2001), 149 O.A.C. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2001] O.A.C. TBEd. JL.035

Mary Danyluk (appellant) v. Ainsworth Technologies Inc., Ainsworth Electric Co. Limited, F. Jack Purchase, Paul S. Gooderham, Jack A. Taylor, Ross A. Pool, Donald W. Roberts, Timothy I. Pryor, Clifford J. Ainsworth, John F. Ainsworth, Kenneth D. Ainsworth, Melville O'Donohue, Donald J. Hawthorne, William I. Welsh and Joseph McBride Watson (respondents)

(27118; 2001 SCC 44)

Indexed As: Danyluk v. Ainsworth Technologies Inc. et al.

Supreme Court of Canada

McLachlin, C.J.C., Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ.

July 12, 2001.

Summary:

An employee filed a complaint with the Ministry of Labour, Employment Standards Branch, respecting unpaid wages, including a large commission. An employment standards officer determined that the employee was not entitled to the commission. Rather than appeal this finding within the administrative structure, the employee brought a civil action against the employer for wrongful dismissal, claiming unpaid wages and the commission. The employer submitted that the civil action was barred by issue estoppel.

The Ontario Court (General Division) held that issue estoppel applied. The court struck the claims for unpaid wages and the commission, allowing only the wrongful dismissal claim to proceed. The employee appealed, submitting that the employment standards officer's decision was neither judicial nor final, and that she was denied natural justice by the officer.

The Ontario Court of Appeal, in a judgment reported 116 O.A.C. 225, dismissed the appeal. The employee appealed.

The Supreme Court of Canada allowed the appeal. The circumstances warranted the exercise of the court's discretion not to apply the doctrine of issue estoppel.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - The Supreme Court of Canada stated that the purpose of issue estoppel was to balance the public interest in finality of litigation with the public interest in ensuring that justice was done on the facts of a particular case - Once a party established the preconditions to the application of issue estoppel, the court still was required to determine whether, as a matter of discretion, issue estoppel ought to be applied - In the context of whether issue estoppel should be applied to an administrative decision, the factors to be considered in the exercise of that discretion included (1) the wording of the statute from which the power to issue administrative orders derived; (2) the purpose of the statute; (3) the availability of an appeal; (4) the procedural safeguards in the administrative process; (5) the expertise of the administrative decision-maker; (6) the circumstances giving rise to the prior administrative proceedings; and (7) the interests of justice - See paragraphs 18 to 81.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - An employee filed a complaint under the Labour Standards Act for unpaid wages and commissions - An employment standards officer dismissed the claim - The employee, rather than appealing under the Act, chose to pursue a wrongful dismissal action claiming unpaid wages and commissions - The employer submitted that issue estoppel precluded the employee from claiming wages and commissions in a civil action - The officer's decision was made without giving the employee notice and an opportunity to be heard (i.e. breach of natural justice) - The Supreme Court of Canada held that a decision made contrary to the principles of natural justice was capable of supporting issue estoppel - In this case, the preconditions to issue estoppel were met (same question decided, final judicial decision and same parties or privies) - However, the courts retained a discretion to not apply issue estoppel - The court set out the factors to be considered in exercising that discretion and held that the discretion should have been exercised in favour of not applying issue estoppel - See paragraphs 62 to 81.

Estoppel - Topic 388

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Decisions of administrative tribunals - [See first Estoppel - Topic 386 ].

Estoppel - Topic 388

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Decisions of administrative tribunals - At issue was whether issue estoppel precluded an unsuccessful party from relitigating in the courts what was already unsuccessfully litigated before an administrative tribunal - The Supreme Court of Canada stated that "once it is determined that the decision-maker was capable of receiving and exercising adjudicative authority and that the particular decision was one that was required to be made in a judicial manner, the decision does not cease to have that character ('judicial') because the decision-maker erred in carrying out his or her functions. ... an administrative decision which is made without jurisdiction from the outset cannot form the basis of an estoppel. The conditions precedent to the adjudicative jurisdiction must be satisfied. Where arguments can be made that an administrative officer or tribunal initially possessed the jurisdiction to make a decision in a judicial manner but erred in the exercise of that jurisdiction, the resulting decision is nevertheless capable of forming the basis of an estoppel. Alleged errors in carrying out the mandate are matters to be considered by the court in the exercise of its discretion." - See paragraphs 47, 51.

Master and Servant - Topic 8323

Employment and labour standards - Enforcement - Civil actions - [See second Estoppel - Topic 386 ].

Cases Noticed:

Rasanen v. Rosemount Investments Ltd. (1994), 68 O.A.C. 284; 17 O.R.(3d) 267 (C.A.), refd to. [para. 9].

Downing v. Graydon (1978), 21 O.R.(2d) 292 (C.A.), refd to. [para. 12].

Farwell v. R. (1893), 22 S.C.R. 553, refd to. [para. 20].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 20].

R. v. Wilson, [1983] 2 S.C.R. 594; 51 N.R. 321; 26 Man.R.(2d) 194, refd to. [para. 20].

R. v. Litchfield, [1993] 4 S.C.R. 333; 161 N.R. 161; 145 A.R. 321; 55 W.A.C. 321, refd to. [para. 20].

R. v. Sarson (J.A.), [1996] 2 S.C.R. 223; 197 N.R. 125; 91 O.A.C. 124, refd to. [para. 20].

Robinson v. McQuaid (1854), 1 P.E.I.R. 103 (S.C.), refd to. [para. 22].

Bell v. Miller (1862), 9 Gr. 385 (U.C. Ch.), refd to. [para. 22].

Raison v. Fenwick (1982), 120 D.L.R.(3d) 622 (B.C.C.A.), refd to. [para. 22].

Wong v. Shell Canada Ltd. (1995), 174 A.R. 287; 102 W.A.C. 287; 15 C.C.E.L.(2d) 182 (C.A.), refd to. [para. 22].

Machin v. Tomlinson (2000), 138 O.A.C. 363; 194 D.L.R.(4th) 326 (C.A.), refd to. [para. 22].

Hamelin v. Davis et al. (1996), 70 B.C.A.C. 81; 115 W.A.C. 81; 18 B.C.L.R.(3d) 85 (C.A.), refd to. [para. 22].

Thrasyvoulou, Oliver et al. v. Secretary of State for the Environment (U.K.) et al., [1990] 2 A.C. 273; 109 N.R. 197 (H.L.), refd to. [para. 22].

R. v. Consolidated Maybrun Mines Ltd. et al., [1998] 1 S.C.R. 706; 225 N.R. 41; 108 O.A.C. 161, refd to. [para. 22].

McIntosh v. Parent, [1924] 4 D.L.R. 420 (Ont. C.A.), refd to. [para. 24].

British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 107 B.C.A.C. 191; 174 W.A.C. 191; 50 B.C.L.R.(3d) 1 (C.A.), refd to. [para. 33].

Schweneke v. Ontario (Minister of Education) et al. (2000), 130 O.A.C. 93; 47 O.R.(3d) 97 (C.A.), refd to. [para. 33].

Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (1999), 176 N.S.R.(2d) 173; 538 A.P.R. 173 (C.A.), refd to. [para. 33].

Guay v. Lafleur, [1965] S.C.R. 12, refd to. [para. 40].

Thoday v. Thoday, [1964] P. 181 (C.A.), refd to. [para. 40].

Machado v. Pratt & Whitney Canada Inc. (1995), 12 C.C.E.L.(2d) 132 (Ont. Gen. Div.), refd to. [para. 45].

Randhawa v. Everest & Jennings Canadian Ltd. (1996), 7 O.T.C. 28; 22 C.C.E.L.(2d) 19 (Gen. Div.), refd to. [para. 45].

Heynen v. Frito-Lay Canada Ltd. et al. (1997), 50 O.T.C. 179; 32 C.C.E.L.(2d) 183 (Gen. Div.), refd to. [para. 45].

Perez v. GE Capital Technology Management Services Canada Inc., [1999] O.T.C. Uned. 673; 47 C.C.E.L.(2d) 145 (Sup. Ct.), refd to. [para. 45].

Munyal v. Sears Canada Inc. (1997), 29 C.C.E.L.(2d) 58 (Ont. Gen. Div.), refd to. [para. 45].

Alderman v. North Shore Studio Management Ltd., [1997] B.C.T.C. Uned. 384; [1997] 5 W.W.R. 535 (S.C.), refd to. [para. 46].

R. v. Nat Bell Liquors Ltd., [1922] 2 A.C. 128 (H.L.), refd to. [para. 47].

Harelkin v. University of Regina, [1979] 2 S.C.R. 561; 26 N.R. 364, refd to. [para. 47].

Poucher v. Wilkins (1915), 33 O.L.R. 125 (C.A.), refd to. [para. 54].

Minott v. O'Shanter Development Co. (1999), 117 O.A.C. 1; 42 O.R.(3d) 321 (C.A.), refd to. [para. 59].

Saskatoon Credit Union Ltd. v. Central Park Ent. Ltd. (1988), 22 B.C.L.R.(2d) 89 (S.C.), refd to. [para. 59].

Naken et al. v. General Motors of Canada Ltd., [1983] 1 S.C.R. 72; 46 N.R. 139, refd to. [para. 62].

Arnold et al. v. National Westminster Bank plc, [1991] 3 All E.R. 41; 142 N.R. 31 (H.L.), refd to. [para. 64].

Susan Shoe Industries Ltd. v. Ontario (Minister of Labour) et al. (1994), 70 O.A.C. 347; 18 O.R.(3d) 660 (C.A.), refd to. [para. 74].

Iron et al. v. Saskatchewan (Minister of the Environment and Public Safety) et al., [1993] 6 W.W.R. 1; 109 Sask.R. 49; 42 W.A.C. 49 (C.A.), refd to. [para. 80].

Statutes Noticed:

Employment Standards Act, R.S.O. 1990, c. E-14, sect. 1, sect. 6(1), sect. 6(2), sect. 65(1), sect. 65(7), sect. 67(1), sect. 67(2), sect. 67(3), sect. 67(5), sect. 67(7), sect. 68(1), sect. 68(3), sect. 68(7) [para. 17].

Authors and Works Noticed:

American Law Institute, Restatement of the Law (2d) (1983), vol. 2, s. 83(2)(e) [para. 71].

Bower, George Spencer, Turner, Alexander Kingcome, and Handley, K.R., Doctrine of Res Judicata (3rd Ed. 1996), pp. 18, 19, 20, para. 20 [para. 35].

Brown, Donald J.M., and Evans, John M., Judicial Review of Administrative Action in Canada (1998) (Looseleaf Updated 2001, Release 2), vol. 1, para. 7:1310, p. 7-7 [para. 41].

Handley, K.R., Res Judicata: General Principles and Recent Developments (1999), 18 Aust. Bar Rev. 214, p. 215 [para. 36].

Holmestead, George Smith, and Watson, Garry D., Ontario Civil Procedure (Looseleaf) (Supp.), vol. 3, pp. 21, s. 17 et seq. [para. 20]; 21, s. 24 [para. 59].

Lange, Donald J., Doctrine of Res Judicata in Canada (2000), p. 94 et seq. [para. 22].

Sopinka, John, Lederman, Sydney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), p. 1088 [para. 60].

Watson, Garry D., Duplicative Litigation: Issue Estoppel, Abuse of Process and the Death of Mutuality (1990), 69 Can. Bar Rev. 623, generally [para. 59].

Counsel:

Howard A. Levitt and J. Michael Mulroy, for the appellant.

John E. Brooks and Rita M. Samson, for the respondents.

Solicitors of Record:

Lang Michener, Toronto, Ontario, for the appellant.

Genest Murray Desbrisay Lamek, Toronto, Ontario, for the respondent.

This appeal was heard on October 31, 2000, before McLachlin, C.J.C., Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada.

On July 12, 2001, Binnie, J., delivered the following judgment in both official languages for the Supreme Court of Canada.