Hoque v. Montreal Trust Co. of Canada et al., (1997) 162 N.S.R.(2d) 321 (CA)

• Judge: Freeman, Roscoe and Cromwell, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: October 02, 1997
• Jurisdiction: Nova Scotia
• Citations: (1997), 162 N.S.R.(2d) 321 (CA);1997 CanLII 1465 (NS CA);[1997] NSJ No 430 (QL);162 NSR (2d) 321;485 APR 321;75 ACWS (3d) 541

Hoque v. Montreal Trust (1997), 162 N.S.R.(2d) 321 (CA);

    485 A.P.R. 321

MLB headnote and full text

Temp. Cite: [1997] N.S.R.(2d) TBEd. NO.006

Montreal Trust Company of Canada and Gary Graham (appellants) v. Khandker Shamsul Hoque (respondent)

(C.A. 137284)

Indexed As: Hoque v. Montreal Trust Co. of Canada et al.

Nova Scotia Court of Appeal

Freeman, Roscoe and Cromwell, JJ.A.

October 27, 1997.

Summary:

Montreal Trust obtained final foreclosure orders by default against Hoque, who had made an assignment in bankruptcy. After discharge, Hoque sued Montreal Trust and an employee for breach of fiduciary duty, breach of contract, tortious interference with business relations, trespass and conversion in relation to the mortgages and related agree­ments. Montreal Trust applied to dismiss Hoque's action on the basis of res judicata.

The Nova Scotia Supreme Court, in a decision not reported in this series of reports, dismissed Montreal Trust's application. Montreal Trust applied for leave to appeal, and if granted, an order dismissing Hoque's action as res judicata.

The Nova Scotia Court of Appeal granted leave to appeal, allowed the appeal, set aside the Chamber judge's order and struck out Hoque's statement of claim. However, the court found that two aspects of the statement of claim were not barred by res judicata or issue estoppel and granted Hoque leave to amend his statement of claim accordingly.

Estoppel - Topic 379

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Cause of action - Montreal Trust sued Hoque concerning mortgages and obtained final foreclosure orders by default - Hoque later sued Montreal Trust and an employee for breach of fiduciary duty, breach of contract, tortious interference with business relations, trespass and conversion in rela­tion to the mortgages and related agree­ments - The Nova Scotia Court of Appeal held that Hoque could not allege in the action anything which was inconsistent with the final orders of foreclosure - All the allegations in Hoque's statement of claim were barred by the principle of cause of action estoppel with the exception two claims - See paragraphs 69 to 86.

Estoppel - Topic 379

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Cause of action - Montreal Trust obtained final foreclosure orders by default against Hoque, who had made an assign­ment in bankruptcy - After discharge, Hoque sued Montreal Trust and an employee making allegations which could have been raised in the foreclosure actions - A Chambers judge denied Montreal Trust's application to dismiss the action on the basis of res judicata holding that it would be unfair for Hoque to be denied the opportunity to have his allegations determined on their merits - The Nova Scotia Court of Appeal held that, to the extent that there might exist some measure of judicial discretion to apply res judicata with some flexibility, the Chambers judge erred in principle in exercising it in this case - He gave insufficient weight to the strong policy in favour of the finality of court orders and the underlying scheme and objectives of the Bankruptcy and Insolvency Act - See paragraphs 76 to 78 and 86.

Estoppel - Topic 379

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Cause of action - The Nova Scotia Court of Appeal reviewed the scope of cause of action estoppel and held that "[t]he better principle is that those issues which the parties had the opportunity to raise and, in all the circumstances, should have raised, will be barred. In determining whether the matter should have been raised, a court will consider whether the proceeding con­stitutes a collateral attack on the earlier findings, whether it simply asserts a new legal conception of facts previously liti­gated, whether it relies on 'new' evidence that could have been dis­covered in the earlier proceeding with reasonable dili­gence, whether the two proceedings relate to separate and distinct causes of action and whether, in all the circumstances, the second proceeding constitutes an abuse of process." - See paragraphs 24 to 37.

Estoppel - Topic 379

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Cause of action - The Nova Scotia Court of Appeal stated that "[a]t the core of cause of action estoppel is the notion that final judgments are conclusive as to all of the essential findings necessary to support them. This is seen in the cases concerned with collateral attack, supra, and is reflected in the restrictive approach to res judicata founded on default judgments." - See paragraph 68.

Estoppel - Topic 381

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - In civil proceedings - [See first Estoppel - Topic 379 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See first Estoppel - Topic 379 ].

Estoppel - Topic 387

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Matters or claims available in prior pro­ceedings - [See first Estoppel - Topic 379 ].

Estoppel - Topic 399

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Application where prior judgment obtained by default - The Nova Scotia Court of Appeal stated that there was authority for the view that res judicata should be applied in a more limited way when the judgment giving rise to the plea was obtained on default - The court rejected an argument that this principle applied only to issue estoppel - See para­graphs 38 to 41.

Cases Noticed:

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397; 47 D.L.R.(3d) 544, refd to. [para. 20].

Henderson v. Henderson, [1843-60] All E.R. 378, refd to. [para. 24].

Fenerty v. Halifax (City) (1920), 50 D.L.R. 435 (N.S.S.C. en banco), refd to. [para. 24].

420093 B.C. Ltd. v. Bank of Montreal (1995), 174 A.R. 214; 102 W.A.C. 214; 128 D.L.R.(4th) 488 (C.A.), refd to. [para. 24].

Connelly v. Director of Public Prosecu­tions, [1964] 2 All E.R. 401 (H.L.), refd to. [para. 26].

Arnold v. National Westminster Bank, [1991] 3 All E.R. 41 (H.L.), refd to. [para. 27].

Yat Tung Investment Co. v. Dao Heng Bank Ltd., [1975] A.C. 581 (P.C.), refd to. [para. 27].

Brown v. Marwieh (1995), 145 N.S.R.(2d) 220; 418 A.P.R. 220 (C.A.), refd to. [para. 29].

Doering v. Grandview (Town), [1976] 2 S.C.R. 621; 7 N.R. 299, refd to. [para. 31].

Morgan Power Apparatus Ltd. v. Flanders Installations Ltd. (1972), 27 D.L.R.(3d) 249 (B.C.C.A.), refd to. [para. 33].

Bank of Montreal v. Prescott et al. (1994), 51 B.C.A.C. 157; 84 W.A.C. 157; 1 B.C.L.R.(3d) 304 (C.A.), refd to. [para. 36].

New Brunswick Railway v. British and French Trust Corp., [1939] A.C. 1 (H.L.), refd to. [para. 40].

Bayhold Financial Corp. v. Clarkson Co. and Scouler (1990), 99 N.S.R.(2d) 91; 270 A.P.R. 91 (T.D.), refd to. [para. 43].

Malik v. Principal Savings & Trust Co. (1985), 63 A.R. 109 (Q.B.), refd to. [para. 46].

Hall v. Hall (1958), 15 D.L.R.(2d) 638 (Alta. C.A.), refd to. [para. 46].

Ranch des Prairies Ltée (Prairie Ranch Ltd.) and Denis v. Bank of Montreal et al. (1988), 53 Man.R.(2d) 308; 69 C.B.R. 180 (C.A.), refd to. [para. 49].

Adams-Mood v. Toronto-Dominion Bank (1996), 159 N.S.R.(2d) 150; 468 A.P.R. 150 (S.C.), refd to. [para. 51].

Miscouche Sales and Services Ltd. et al. v. Massey Ferguson Industries Ltd. et al. (1992), 105 Nfld. & P.E.I.R. 91; 331 A.P.R. 91 (P.E.I.T.D.), refd to. [para. 52].

Bank of British Columbia v. Singh (1987), 17 B.C.L.R.(2d) 256 (S.C.), revd. (1990), 51 B.C.L.R.(2d) 273 (C.A.), refd to. [para. 54].

ABN Bank Canada v. NsC Diesel Power Inc. (1992), 112 N.S.R.(2d) 289; 307 A.P.R. 289 (C.A.), refd to. [para. 79].

Authors and Works Noticed:

Cross, Rupert, and Tapper, Colin, Cross on Evidence (8th Ed. 1995), generally [para. 39].

Fleming, James, Hayward, Geoffrey C., and Leubdsorf, John, Civil Procedure (4th Ed. 1992), p. 581 [para. 67].

Houlden, Lloyd W., and Morawetz, Carl H., Bankruptcy and Insolvency Law of Canada (3rd Ed.), pp. 1-3 [para. 78].

Sopinka, John, Lederman, Sydney N., and Bryant, Alan W., The Law of Evidence in Canada (1991), p. 997 [para. 21].

Counsel:

Alan V. Parish, Q.C., and Peter Doig, for the appellant;

Raymond F. Wagner, for the respondent.

This appeal was heard on October 2, 1997, before Freeman, Roscoe and Cromwell, JJ.A., of the Nova Scotia Court of Appeal. On October 27, 1997, Cromwell, J.A., delivered the judgment for the court.