The Works: Res Judicata, Collateral Attack and Abuse of Process – Reasons for Dismissal
The Ontario Court of Appeal recently upheld a motion judge’s decision striking a Statement of Claim and dismissing an action on the basis that it was (i) res judicata, (ii) a collateral attack on a previous order of the Court and (iii) an abuse of process.
The Appellant in the matter of Wright v Urbanek, 2019 ONCA 823, sought to challenge the validity of a family trust that was established in connection with an estate freeze involving a company that the Appellant and his late wife instituted in 2007.
The action was commenced by the Appellant four days after losing his daughter’s oppression application which resulted in his removal as trustee of the family trust and as director and officer of the company.
The motions judge found that having lost the oppression application, the Appellant sought to advance “a new and inconsistent theory” which could have been sought as part of the application itself.
The Court of Appeal agreed with the motions judge such that the cause of action challenging the validity of the family trust was known to the appellant and could have been pursued in the oppression application. In fact, the Appellant seemed to be questioning the validity of the family trust in his factum and did not ultimately pursue this theory in the application.
The Court of Appeal held that a challenge to the validity of the family trust would now interfere with the implementation of the Order in respect of the application which was upheld on appeal. It was further held that raising this issue would essentially involve re-litigating the application and would be a “misuse of the court’s procedures in a way that would bring the administration of justice into disrepute”.
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