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Civil Litigation Cases - Pleadings - Res Judicata. Patrick Street Holdings Ltd. v. 11368 NL Inc.
In Patrick Street Holdings Ltd. v. 11368 NL Inc. (SCC, 2026) the Supreme Court of Canada considered 'cause of action estoppel'.
Here the court considers principles of pleading res judicata:(1) Governing Principles
[46] Since the late 1800s, courts have shifted away from the “technical and complex” rules that historically applied to pleadings, under which parties had to plead a specific form of common law action, each with its own pleading rules (L. S. Abrams and K. P. McGuinness, Canadian Civil Procedure Law (2nd ed. 2010), at §10.15). Canadian provinces abolished this form of pleading in favour of “fact pleading” toward the end of the 19th century (J. A. Jolowicz, “‘General ideas’ and the reform of civil procedure” (1983), 3 Legal Stud. 295, at p. 301; see also Abrams and McGuinness, at §10.15). This shift removed the “straight-jacket” of the forms of action approach to pleadings (Jolowicz, at p. 301).
[47] Modern pleadings must contain a statement of the material facts on which a party relies to make out its claim for relief, rather than precisely identify all causes of action or rules of law pleaded (Jolowicz, at p. 301; see also Alberta Rules of Court, Alta. Reg. 124/2010, r. 13.6(2)(a); Court of King’s Bench Rules, Man. Reg. 553/88, r. 25.06; Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 25.06; Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D, r. 14.03; Rules of Court, N.B. Reg. 82-73, r. 27.06(1)). This approach to pleadings is functional and favours the substance of what is pleaded over its form (Jolowicz, at p. 301). In this way, pleadings serve to define the points at issue in a proceeding and to give “opposing parties fair notice of the case to meet” (Lax Kw’alaams Indian Band v. Canada (Attorney General), 2011 SCC 56, [2011] 3 S.C.R. 535, at para. 43). The overarching consideration when determining whether a matter has been properly pleaded is thus functional and seeks to ensure that parties are not taken by surprise.
[48] There is an obligation to plead res judicata. One of this Court’s first affirmations of this obligation arose in Davies, where this Court remarked that: .... the plea [of estoppel] should contain suitable averments of what was the precise matter in contestation in such interpleader issue and of what is the precise matter in contestation in the present action so as to raise for adjudication the question of estoppel relied upon by the defendant. [p. 317]
A few years later, in Cooper, this Court reiterated the obligation to plead res judicata, remarking that “res judicata as a defence, or as a reply to a counter claim, must be specially pleaded” (p. 620). [49] The obligation to plead res judicata flows from the principles of civil litigation outlined above. The pleading obligation consists in a requirement to plead the material facts giving rise to the claim of estoppel. A party need not explicitly reference the term “res judicata”. While evidentiary rules, like other rules of law, are generally not pleaded, the requirement to plead res judicata is grounded in the need to ensure that a responding party has notice of the case it must meet and is not taken by surprise by another party’s reliance on the doctrine. The pleading requirement is functional and grounded in the notion of procedural fairness, irrespective of the procedural vehicle — action or application — in which res judicata arises. The inquiry into whether res judicata was properly pleaded should thus remain focused on whether the pleadings were procedurally fair for the parties involved (Anderson v. Township of Ameliasburg (1931), 1931 CanLII 783 (ON CA), 66 O.L.R. 583, at p. 584).
[50] Just as in Davies and Cooper, cases in which the obligation to plead res judicata was considered have generally focused on the applicability of this obligation to defendants to an action or respondents to an application (see, e.g., Baxter v. Derkasz (1929), 1929 CanLII 153 (SK CA), 2 D.L.R. 443 (Sask. C.A.), at p. 449; Bailey v. Guaranty Trust Co. of Canada, 1987 ABCA 95, 39 D.L.R. (4th) 111, at p. 121; Dhillon v. Dhillon, 2006 BCCA 524, 232 B.C.A.C. 249, at para. 21; Canada v. MacDonald, 2021 FCA 6, 456 D.L.R. (4th) 536, at para. 30). There is good reason for this. A defendant or respondent will in most cases become aware of the need to plead res judicata when it receives the plaintiff’s or applicant’s pleadings. Upon receipt of these pleadings, the defendant or respondent will be in a position to plead res judicata in response to the claim alleged against it.
[51] This is not to say that a plaintiff or applicant never has an obligation to plead res judicata. However, and in contrast to a defendant or respondent, a plaintiff or applicant bringing an action or application is not expected to know what defences a defendant or respondent will raise, and whether those defences will give rise to a claim that res judicata applies, when it files its originating process. Typically, “the facts that are pleaded by a party must be material at the time when they are pleaded, which means that a plaintiff should not anticipate possible defences in [the] statement of claim” (Abrams and McGuinness, at §10.17 (emphasis added)).
[52] For this reason, the obligation to plead res judicata has been characterized as an obligation to plead it where there is an opportunity to do so (Brown v. Yates (1877), 1 O.A.R. 367 (Ont. C.A.); Miller v. Weldon (1870), 1870 CanLII 19 (NB SC), 13 N.B.R. 188 (S.C.); Mann v. Mann (1974), 1973 CanLII 652 (ON SC), 1 O.R. (2d) 416 (H.C.J.)). This characterization is particularly important in the context of applications, some of which may not involve a formal exchange of pleadings between the parties and a formal submission of pleadings to the court. In contexts where the parties do not provide written pleadings, or where each party submits only one pleading to the court before the matter is heard, a plaintiff or applicant may not have an opportunity to plead res judicata until the hearing takes place. In such circumstances, the question then becomes whether it raised res judicata at the earliest opportunity, even if the only opportunity to do so was at the hearing of the application.
[53] As a matter of evidence, parties pleading res judicata should put both the decision from the prior proceeding, along with any pleadings exchanged, before the court in the subsequent proceeding in which res judicata is raised. Both the formal judgment and the pleadings may be relevant indicia of the subject matter of a judicial decision and may assist in illuminating the nature of the cause of action for the purposes of cause of action estoppel (Handley, at p. 106). Further, the fact that a party has put the formal judgment or the pleadings before the subsequent court may support a conclusion that a party pleaded res judicata.
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