2015 NLCA 17, 2015 NLCA 17

Date: 201504 13 Docket: 13/60 Citation: Eimskip, USA, Icelandic Steamship Inc. v. The Icelandic Steamship Company Limited , 2015 NLCA 17 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: EIMSKIP, USA, ICELANDIC STEAMSHIP INC. FIRST APPELLANT AND: THE ICELANDIC STEAMSHIP COMPANY LIMITED SECOND APPELLANT AND: HARBOUR GRACE CS INC. THIRD APPELLANT AND: NORDICA FOODS A/S FIRST RESPONDENT AND: NORDICA FISHERY (UK) LIMITED SECOND RESPONDENT AND: ARGENTIA FREEZERS & TERMINALS LIMITED THIRD RESPONDENT

Coram: Green C.J.N.L., White and Hoegg JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 1999 01 0167 Appeal Heard: April 17 and 24, 2014 Decision Filed: April 13, 2015 Reasons for Decision by Hoegg J.A. Concurred in by Green C.J.N.L. and White J.A. Counsel for Appellants: M. John Mate Counsel for First and Second Respondents: David G.L. Buffett Q.C. and Olga McWilliam Benson Counsel for Third Respondent: Peter D.

Shea Hoegg J.A.: INTRODUCTION [ 1 ] This appeal concerns the nature and scope of the exercise of judicial discretion not to apply the doctrine of issue estoppel when the legal preconditions to its application are met. BACKGROUND [ 2 ] The parties to this appeal are Eimskip, USA, Icelandic Steamship Inc., The Icelandic Steamship Company Ltd., and Harbour Grace C.S. Inc. (hereinafter referred to jointly as Eimskip); Nordica Foods A/S and Nordica Fishery (UK) Limited (hereinafter referred to jointly as Nordica); and Argentia Freezers & Terminals Limited.

Argentia Freezers & Terminals Limited appeared in support of Eimskip’s position but did not actively participate in the appeal. [ 3 ] In 1997, Nordica was involved in buying and selling shrimp in Newfoundland and Labrador. Eimskip was engaged by Nordica as a ship’s agent for services in respect of the handling and selling of Nordica’s shrimp. [ 4 ] In 1999, Nordica filed suit against Eimskip (the Canadian suit) alleging that on October 14, 1997 Eimskip took control of cargoes of Nordica’s shrimp which were in cold storage in Argentia and Harbour Grace, Newfoundland and Labrador.

Nordica alleges that the shrimp cargoes were illegally commandeered by Eimskip, that Eimskip’s actions caused Nordica to lose its customer base and fishing vessels, and that Eimskip effectively “blockaded” Nordica from engaging in further commercial activities relating to its shrimp business. Nordica also alleges that Eimskip’s actions caused serious financial trouble for Nordica which led Nordica into an unconscionable business agreement with a third party and ultimately led to the bankruptcy of Nordica Foods A/S.

Nordica seeks special damages and damages for economic loss totaling more than $15,000,000. [ 5 ] Eimskip filed its defence on October 1, 1999, pleading that its actions respecting the commandeering of the shrimp cargoes were legal and taken pursuant to an agreement with Nordica made in June 1997. [ 6 ] A few days before filing its defence to the Canadian suit, Eimskip filed a complaint about Nordica with a Conciliation Board in Norway.

This process ultimately led to Eimskip filing a court action in Norway’s Sunnmøre District Court (the Norwegian suit) for the recovery of approximately $1,000,000 CAD that it alleged Nordica still owed them. Nordica defended the Norwegian suit, arguing that the basis for it was exactly the same as the basis for the Canadian suit, and that the Norwegian suit should be dismissed in favour of the Canadian suit which had been filed first.

Nordica maintained that any monies determined to be owed by Nordica to Eimskip would be more than offset by the damages Nordica was seeking in the Canadian suit. [ 7 ] Subsequent filings in the Sunnmøre District Court show that Nordica argued throughout the litigation that the Norwegian suit be dismissed because it was “completely congruent” with the Canadian suit. They also show that the Norwegian suit arose directly from the same facts on which the Canadian suit was based, and that the bases for the two disputes were exactly the same.

Nordica maintained that the damages claimed by Eimskip in the Norwegian suit, which Nordica specifically denied, would be, if awarded, more than offset by the damages claimed by Nordica in the Canadian suit.

[ 8 ] Nordica and Eimskip agreed that there was no substantive difference between Norwegian and Canadian law applicable to the issues between them in the Norwegian suit, and they accepted that the Sunnmøre District Court could apply Norwegian law. Both parties were represented by counsel throughout the conduct of the Norwegian litigation. [ 9 ] On June 27, 2003, after a three-day trial, the Sunnmøre District Court determined that Nordica owed Eimskip approximately $1,000,000 in Canadian funds.

The Sunnmøre District Court decision also found that 1) Eimskip had the legal right to take control of the two shrimp cargoes on October 14, 1997, 2) Nordica and Eimskip had agreed in June of 1997 that Eimskip could take control of Nordica’s shrimp if Nordica did not honour the repayment terms respecting its debt to Eimskip, and 3) Nordica’s allegations respecting the legality of the alleged blockade were not supported by the evidence. [ 10 ] Nordica appealed the Sunnmøre District Court decision to the Frostating Appeals Court in Norway but withdrew the appeal in early 2004.

Nordica has not paid Eimskip on the Sunnmøre District Court judgment. [ 11 ] On March 25, 2004, Eimskip initiated bankruptcy proceedings against Nordica Foods A/S in Norway which were not successful. However, Storebrand Bank, another creditor of Nordica Foods A/S, succeeded in having Nordica Foods A/S finally declared insolvent and bankrupt on March 10, 2006. [ 12 ] Meanwhile, the record reveals that very little had transpired with respect to the Canadian suit. Pleadings closed on October 1, 1999.

Nordica was ordered to post $10,000 as security for costs on May 25, 2000, and lists of documents had been exchanged by August 10, 2001. In March 2002, discoveries of Nordica’s principal and representatives from Argentia Freezers took place. Nothing else happened until February 27, 2004, when Nordica issued Interrogatories to Eimskip, to which Eimskip replied on May 5, 2004. In 2005, Nordica applied to amend its pleadings and was partially successful but did not file an order to that effect at that time.

Over three years of inactivity followed, although Nordica did file Notices of Intention to Proceed in May 2007 and December 2008. Eimskip took the next step by serving a Notice to Admit on Nordica during 2008, to which Nordica promptly replied. Nordica applied to the Court respecting matters related to the discovery of Eimskip’s principal in July 2009, and that discovery took place on November 24, 2009 without adjudication of the application.

During 2010, Nordica filed a Supplementary List of Documents and a trial record, and on February 4, 2011, Nordica filed an application for a pretrial conference. [ 13 ] Nordica’s application for a pretrial conference seems to have impressed on Eimskip that Nordica was serious about prosecuting the Canadian suit. Eimskip immediately filed a

Summary Trial application challenging Nordica’s capacity to carry on with the Canadian suit given Nordica Foods A/S’s bankrupt status. On February 17, 2011, a judge of the Trial Division granted Nordica’s application for a pretrial conference. Although Eimskip’s application for

summary trial was set for the same date, it had escaped the Court’s notice, so it was adjourned. On June 17, 2011, another judge conducted the pretrial conference and ordered that a settlement conference take place.

On July 15, 2011, Eimskip filed an application for further security for costs and on July 22, 2011, Nordica was granted leave to file its Amended Statement of Claim that had been ordered in 2005. [ 14 ] On November 14, 2011, Eimskip filed an interlocutory application seeking dismissal of the Canadian suit on the basis of res judicata or alternatively that issue estoppel be applied to prevent re-litigation of the legality of Eimskip’s alleged blockade actions.

Eimskip alleged that the Sunnmøre District Court had already determined that Eimskip’s commandeering of the shrimp cargoes had been legal and that Nordica’s allegations respecting the alleged blockade were not supported by the evidence. [ 15 ] On December 2, 2011, Nordica was ordered to post an additional $135,000 in security for costs and the Canadian suit was stayed until March 22, 2012, when the additional monies were paid into court. On May 22, 2013, a year and a half after it was filed, Eimskip’s issue estoppel application was heard.

The Application Judge’s Decision [ 16 ] The application judge determined that the doctrine of issue estoppel was of potential application to the Canadian suit. He considered the three pre-conditions for invoking the doctrine as set out by Dickson J. in Angle v. Canada (Minister of National Revenue - M.N.R.) , [1975] 25 C.R. 248 at page 254 and found them to be met.

The judge found that Nordica’s defence and position throughout the Norwegian litigation were that Eimskip’s alleged blockade actions respecting Nordica’s commercial shrimp business were illegal and that if Nordica was found to owe monies to Eimskip they should be set-off against the damages claimed by Nordica in the Canadian suit.

The judge found that Nordica’s position had thus required Eimskip to fully defend the legality of its alleged blockade actions in the Norwegian suit, and as such, Nordica had placed the issue “squarely before the Sunnmøre District Court,” and that the issue had been decided in Eimskip’s favour and had been fundamental to the Sunnmøre District Court’s decision. [ 17 ] The judge also found that the Sunnmøre District Court was a court of competent jurisdiction and that its decision in the Norwegian suit was a final and judicial one that was valid and enforceable in Canada pursuant to the principles set out in Beals v.

Saldanha , 2003 SCC 72 , [2003] 3 S.C.R. 416. He noted that the parties had acknowledged that the decision of the Sunnmøre District Court was a final judicial decision.

Finally, the judge found that the parties shared a sufficient community of interest so as to be considered the same parties or privies for the purpose of issue estoppel, noting that the Sunnmøre District Court found they had all been participants in the June 27, 1997 meeting at which the debt repayment plan between Eimskip and Nordica authorizing the detention of Nordica’s shrimp had been agreed and recorded. [ 18 ] Although he concluded that all of the pre-conditions necessary to establish issue estoppel were met, the judge nevertheless exercised his discretion not to apply issue estoppel to Nordica’s Canadian suit on the basis that to do so would be unfair.

The Appeal [ 19 ] Eimskip appeals the judge’s discretionary decision, saying that he improperly exercised his discretion by declining to apply issue estoppel in respect of the legality of Eimskip’s alleged blockade actions in the Canadian suit. Eimskip argues that the judge erred in so deciding by misdirecting himself on the law respecting the discretion available to him and who bore the burden of proving that the doctrine ought not to be applied. Eimskip also argues that the judge considered irrelevant factors and that he misapprehended the procedural history of the litigation.

Leave to Appeal [20] The order under appeal resulted from an interlocutory application filed by Eimskip. The judge denied the relief sought byEimskip and dismissed its application. All of the issues in the Canadian suit were thus permitted to be tried in the normal course. Giventhat no issue raised in the suit was prevented from being retried, no aspect of the judge’s order can be said to be final.

As the appeal isan interlocutory order, leave to appeal is required (rule 57.02(4) of the Rules of the Supreme Court, 1986). [21] Leave to appeal an interlocutory order involves “a balancing of the impact on the efficient operation of the trial process if theappeal were to be dealt with immediately, against whether it would be unjust to require the appellant to await the outcome of trial beforeappealing” (Langor v. Spurrell (1997), (NL CA), 157 Nfld. & P.E.I.R. 301 (Nlfd. C.A.), paragraph 23).

In weighingthese two positions, the Court must consider the factors set out in rule 57.02(4) of the Rules of the Supreme Court, 1986: (

a) there is a conflicting decision by another judge or court upon a question involved in the proposed appeal and, in the opinion of theCourt, it is desirable that leave to appeal be granted, (

b) the Court doubts the correctness of the order in question, (

c) the Court considers that the appeal involves matters of such importance that leave to appeal should be granted, (

d) the Court considers that the nature of the issue is such that any appeal on that issue following final judgment would be of nopractical effect, or (

e) the Court is of the view that the interests of justice require that leave be granted. [22] Eimskip submits that leave should be granted on the basis of factors (a), (b), (

d) and (

e) of the rule. Nordica says that none ofthe rule 57.02(4) factors apply, and submits that the judge had a broad discretion not to apply issue estoppel to the Canadian suit. Nordica relies on Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460 and this Court’s recent decision inGuardian Insurance Company of Canada v. Roman Catholic Episcopal Corp. of St.

John’s, 2013 NLCA 62, 343 Nfld. & P.E.I.R. 68 tosupport its position that the judge had the discretion not to apply issue estoppel so leave should not be granted. [23] While both Danyluk and Guardian support a court’s ability to exercise discretion not to apply issue estoppel in certain situations,it is important to recognize that the circumstances of each of those cases are quite different from those of this case. Danyluk involvedwhether the determination of an issue by an employment standards tribunal ought to apply in a plaintiff’s wrongful dismissal action.

TheSupreme Court’s discretionary decision not to apply issue estoppel in that case was informed by the fact that the proposed application ofthe doctrine was from a tribunal to a court, and the “structures, mandates and procedures” of administrative tribunals called for a court tohave the discretion not to apply the doctrine when these factors were in play (Danyluk at paragraph 62). In Guardian, the Court wasdealing with new evidence as a circumstance justifying a decision not to apply issue estoppel.

As Green C.J.N.L. explained in Guardian,new evidence may operate more as a recognized exception to application of the doctrine, like fraud, rather than as a factor going to theexercise of a Court’s discretion (see paragraphs 52, 86 and 91). As well, the issue in Guardian concerned a trial judge exercising hisdiscretion to apply issue estoppel even though a recognized exception for not applying the doctrine (discovery of new evidence) waspresent. This is different than the usual situation which involves a court exercising discretion not to apply the doctrine when the pre-conditions are met.

Accordingly, it cannot be said that Danyluk or Guardian stand for the availability of a free-standing discretion not toapply the doctrine. [24] The fact that the interlocutory decision for which leave to appeal is sought is a discretionary decision is relevant in consideringwhether to grant leave. The hurdle to overcome in such circumstances is higher, as Cameron J.A. found in Rolls Royce Corp. v.Universal Helicopters Newfoundland Ltd., 2009 NLCA 58, 290 Nfld.& P.E.I.R. 204, paragraph 24.

However, it is overstating the caseto say that leave to appeal is not available because the decision in question results from the exercise of discretion. Most interlocutorydecisions are discretionary, and while the hurdle is higher, a court is often justified in granting leave. [25] Each of the grounds Eimskip argues to support its position can be said to lend some measure of support for granting leave.

However, factors (d) – that an appeal of the judge’s decision not to apply issue estoppel would be of no practical effect following finaljudgment on the Canadian suit – and (e) – that the interests of justice require it – are sufficient to warrant leave being granted. [26] The object of Eimskip’s issue estoppel application was to prevent retrying the issue respecting the legality of Eimskip’sblockade actions. The judge’s decision permitted retrial of this issue to take place. An appeal of the judge’s decision after trial would beuseless because retrial of the issue would have already taken place.

It would therefore be of no practical effect for Eimskip to await adecision on the merits of the Canadian suit before appealing. As well, retrial of the legality of Eimskip’s blockade actions, afundamental issue in the Canadian suit, would involve the expenditure of significant public and private resources and the possibility thatNordica’s posted security for costs would not cover a costs order against it if Eimskip were to prevail at trial.

In these circumstances, theinterests of justice support leave being granted. [27] Accordingly, I am of the view that the impact on the efficient operation of the trial process occasioned by hearing the appealnow is justified. Leave to appeal should be granted. ISSUE [28] At issue is whether the application judge correctly exercised his discretion not to apply issue estoppel to the legality ofEimskip’s alleged blockade actions in the Canadian suit. The law respecting the nature and breadth of a court’s discretion not to applythe doctrine is therefore engaged.

Standard of Review [29] Appeal of a lower court’s discretionary decision involves considering whether the lower court has misdirected itself, is so

clearly wrong that an injustice results, or has given no or insufficient weight to relevant considerations (see Penner v. Niagara (RegionalPolice Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, paragraph 27). Reversal of a lower court’s discretionary decision can alsooccur if the lower court exceeded its jurisdiction, failed to apply or misapplied an applicable principle, or made a palpable and overridingerror in its appreciation of the facts (Langor v. Spurrell, paragraph 33). Jurisprudence [30] Issue estoppel, a subspecies of res judicata, is a legal doctrine designed to promote finality in litigation.

Its purpose is toprevent a party from being twice vexed in respect of the same issue and also to prevent collateral attacks on standing judicial orders (seeDanyluk, paragraphs 18-24). [31] Issue estoppel prevents re-argument or retrial of a factual issue even when that factual issue presents in a different proceedingfrom the previously decided action. Lord Denning explains it well in Fidelitas Shipping Co. Ltd. v.

V/O Exportschleb, [1965] 2 All E.R.4 (C.A.) at pages 8-9: The law, as I understand it, is this: if one party brings an action against another for a particular cause and judgment is given on it, there isa strict rule of law that he cannot bring another action against the same party for the same cause. Transit in rem judicatam; see King v.Hoare.

But within one cause of action, there may be several issues raised which are necessary for the determination of the whole case.The rule then is that, once an issue has been raised and distinctly determined between the parties, then, as a general rule, neither partycan be allowed to fight that issue all over again. The same issue cannot be raised by either of them again in the same or subsequentproceedings except in special circumstances. … (Emphasis added.) The Supreme Court of Canada endorsed the above in Grandview (Town) v.

Doering, (SCC), [1976] 2 S.C.R. 621 at page637. (See also Guardian at paragraphs 40 to 47, wherein Green C.J.N.L. explains the distinctions between and applications of thedoctrines of res judicata, cause of action estoppel and issue estoppel.) [32] In Penner, the Supreme Court explains why judicial finality is so important: [28] Relitigation of an issue wastes resources, makes it risky for parties to rely on the results of their prior litigation, unfairly exposesparties to additional costs, raises the spectre of inconsistent adjudicative determinations and, where the initial decision maker is in theadministrative law field, may undermine the legislature’s intent in setting up the administrative scheme. [33] Penner involved potential application of the doctrine in a tribunal-to-court situation.

The issue was whether the determinationof a police disciplinary hearing that there had been no police misconduct ought to be applied to the complainant’s civil suit.

In holdingthat the doctrine should not apply in that case, the Supreme Court stated that a court has the residual discretion to allow re-litigation of anissue when to preclude it would “work an injustice” (Penner at paragraph 29). [34] In Danyluk, Binnie J. reiterated the pre-conditions to the operation of the doctrine which had been set out by Dickson J. inAngle: [25] … (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which theestoppel is raised or their privies.

Justice Binnie went on to explain that even when these pre-conditions are established, a court has a residual discretion not to apply thedoctrine: [33] The rules governing issue estoppel should not be mechanically applied.

The underlying purpose is to balance the public interest inthe finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case. (There are correspondingprivate interests.) The first step is to determine whether the moving party (in this case the respondent) has established the preconditionsto the operation of issue estoppel set out by Dickson J. in Angle, supra. If successful, the court must still determine whether, as a matterof discretion, issue estoppel ought to be applied: British Columbia (Minister of Forests) v.

Bugbusters Pest Management Inc. (1998), (BC CA), 50 B.C.L.R. (3d) 1 (C.A.), at para. 32; Schweneke v. Ontario (2000), (ON CA), 47 O.R.(3d) 97 (C.A.), at paras. 38-39; Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (1999), 1999 NSCA 77, 176 N.S.R. (2d) 173 (C.A.), at para. 56. [35] In Schweneke v. The Queen in Right of Ontario (2000), (ON CA), 47 O.R. (3d) 97 (C.A.), the Ontario Courtof Appeal applied the “work an injustice” test to the proposed application of the doctrine from a tribunal to a court situation.

Schwenekeinvolved whether the previous finding of an employment tribunal would be applied to a wrongful dismissal court action. The appellatecourt upheld the trial court’s decision to apply issue estoppel to the court action, saying at paragraphs 40 and 41: [40] In our view, it is not enough that a party resisting issue estoppel demonstrate that the process leading to the finding did not providethe full panoply of procedural protections available in civil litigation.

The party must go further and show that in the circumstances of theparticular case shortcomings in the procedures of the tribunal, whose finding is relied on in support of an issue estoppel claim, were suchthat it would be unjust to give effect to that finding in subsequent civil litigation. [41] Nor, in our opinion can a party seeking to invoke the discretion rely on general fairness concerns which exist whenever the finding

relied on emanates from a tribunal whose procedures are

summary and whose tasks are narrower than those used and performed by thecourts. The party must demonstrate how unfairness actually occurred in the circumstances of the specific case. [36] In Apotex Inc. v. Merck & Co., 2002 FCA 210, [2003] 1 F.C. 242, a patent case involving a court-to-court application of issueestoppel, the Federal Court of Appeal also applied the “work an injustice” test.

In concluding that application of the doctrine in that casewould not work an injustice, the appellate court stated that relaxation of the application of issue estoppel should occur in only “theclearest of cases” and noted that the exercise of discretion not to apply the doctrine must be very limited, as was stated by the SupremeCourt at page 101 of General Motors of Canada Ltd. v.

Naken, (SCC), [1983] 1 S.C.R. 72. [37] The “work an injustice” test for the exercise of discretion not to apply the doctrine was described as “the fairness exception” byGreen C.J.N.L. in Guardian, wherein he explained that the breadth of discretion a court could exercise in tribunal-to-court situations wasgreater than in court-to-court situations due to “the enormous range and diversity of structures, mandates and procedures ofadministrative decision-makers” which Binnie J. observed in Danyluk at paragraph 62. [38] This Court considered application of cause of action estoppel, another subspecies of res judicata designed to achieve the sameobjectives as issue estoppel and in respect of which there is a discretion not to apply the doctrine on the basis of fairness, in Furlong v.Avalon Bookkeeping Services Ltd., 2004 NLCA 46, 239 Nfld. & P.E.I.R. 197.

Furlong involved whether a trial judge had properlyexercised his discretion not to apply cause of action estoppel to a plaintiff’s Supreme Court action for personal injury damages arisingfrom a motor vehicle accident. The Provincial Court had previously determined liability for the motor vehicle accident in a small claimsaction between the same parties.

In holding that the doctrine ought to have been applied by the Supreme Court to the plaintiff’s injurysuit, Roberts, J.A. of this Court addressed the “fairness issue” at paragraph 42: [42] The potential injustice consideration … only becomes relevant, in the context of court proceedings, where, having exercised duediligence, a party has not received a full and fair hearing. … [39] At this point it is worth noting that the element of unfairness inherent in precluding re-litigation of the merits of an issue is notin itself a legitimate factor in considering whether discretion not to apply the doctrine has been properly exercised.

It is an acceptedcasualty of the application of res judicata, which applies equally to issue estoppel, that harsh results may follow (Apotex, paragraph 48and In Re Provincial Court Judges, (SCC), [1998] 1 S.C.R. 3, page 14). [40] In

summary, the jurisprudence shows that a court has a residual discretion not to apply issue estoppel on the basis of fairnesswhen the pre-conditions for its application are met. However, the exercise of this discretion is circumscribed because of the law’s stronginterest in the finality of litigation. As well, it can be reasonably inferred from the case law that the discretion not to apply the doctrine isbroader in tribunal-to-court situations than it is in court-to-court situations.

In this province, the discretion not to apply the res judicatadoctrines in court-to-court situations has been limited to cases where the resisting party did not receive a full and fair hearing in theearlier litigation (Furlong). However, the statement of principle from the Supreme Court in Penner that a court may decline to apply thedoctrine where to do so would work an injustice, in my view, permits a court to exercise its discretion not to apply the doctrine in bothtribunal-to-court and court-to-court situations when actual injustice can be demonstrated.

Application of the Law to this Case [41] Neither Eimskip nor Nordica challenges the judge’s findings that the pre-conditions to the application of issue estoppel to theCanadian suit are established. I agree, for the reasons stated by the judge. I also note that the facts and circumstances of this case accordwith the principles set out in Carl-Zeiss-Sifting v. Rayner & Keeler, Ltd., [1966] 2 All E.R. 536, which dealt specifically with theapplication of issue estoppel based on a foreign judgment.

However, for the reasons that follow, I cannot agree that the judge properlyexercised his discretion in declining to apply issue estoppel to the Canadian suit. [42] The judge summarized his reasons for not applying issue estoppel at paragraph 92 of his decision: [92] I am satisfied based on the lengthy procedural history of the within action, particularly since the decision in Norway, the fact thatthe plaintiffs are now literally on the eve of a trial date, the plaintiff’s recent posting of the significant sum of $135,000 as security forcosts, their continued intention to have their claim litigated in this Court as communicated during the proceedings in Norway and by notfiling a counterclaim in that jurisdiction, that it would be unfair to use the results of the action in Norway to preclude the within action.

Iwould therefore exercise my discretion not to apply issue estoppel to the plaintiff’s claim in this instance. [43] The five reasons for the judge’s decision are: 1) The lengthy procedural history of the litigation, particularly since the decision in Norway; 2) The parties were on the eve of trial; 3) Nordica had professed its intention to continue with its Canadian suit; 4) Nordica had posted significant security for costs; and 5) Nordica did not file a counterclaim in the Norwegian suit. [44] Eimskip proposes that the Sunnmøre District Court’s finding that Eimskip’s alleged blockade actions were legal be applied toNordica’s suit in the Supreme Court of Newfoundland and Labrador.

It was conceded by all parties that this is a court-to-courtapplication. Accordingly, it does not engage fairness considerations related to the “structures, mandates and procedures” (Danyluk) or“purposes and procedures” (Penner) of administrative tribunals. Burden of Proof

[ 45 ] The burden of establishing that a court should exercise its discretion not to apply issue estoppel rests on the resisting party. This principle was established in Grandview (Town) and is well explained by the Ontario Court of Appeal in Schweneke at paragraph 39 : [39] The discretion to refuse to give effect to issue estoppel becomes relevant only where the three prerequisites to the operation of the doctrine exist. The party relying on the doctrine has the burden of establishing those prerequisites .

The exercise of the discretion is necessarily case specific and depends on the entirety of the circumstances. In exercising the discretion the court must ask — is there something in the circumstances of this case such that the usual operation of the doctrine of issue estoppel would work an injustice?

The party seeking to invoke the discretion has the burden of demonstrating that injustice . (Emphasis added.) [ 46 ] Nordica therefore had the burden of showing how application of issue estoppel to the Canadian suit would be unfair. [ 47 ] In his decision, the application judge made no reference to the fact that the onus was on Nordica to establish unfairness if issue estoppel were applied to its suit. While omitting to refer to onus in a judgment is not fatal to a decision, it may indicate a failure to appreciate which party has the onus of proof, and therefore affect a court’s analysis of the presenting issues.

In this case, the main issue before the judge was whether Nordica established that application of the doctrine would be unfair. Delay [ 48 ] The first two reasons given by the judge for exercising his discretion not to apply issue estoppel (lengthy procedural history and the stage of the litigation) essentially relate to the same point: delay. [ 49 ] Eimskip did not bring its issue estoppel application until several years after it knew the final outcome of the Norwegian suit. It therefore had been open to Eimskip to apply for issue estoppel since the Frostating Court of Appeals order was filed in February 2004.

I also note that Eimskip had been aware of the bankruptcy of Nordica Foods A/S since 2006. [ 50 ] While the judge did not state how the timing of Eimskip’s application worked an unfairness on Nordica, he implied that because Eimskip did not apply for issue estoppel in 2004, Nordica was somehow lulled into a false sense of security that Eimskip would not seek to invoke the doctrine, causing Nordica to continue to prosecute the Canadian suit, as the procedural history of the litigation demonstrated. [ 51 ] Nordica is the plaintiff in the Canadian suit.

Nordica commenced the suit and, as the plaintiff, had the primary obligation to prosecute it. [ 52 ] The record shows that Nordica did very little to advance the prosecution of its suit during the 12 years of its life preceding Eimskip’s issue estoppel application. Nordica filed two applications (one of which was never adjudicated), one set of Interrogatories, a reply to Interrogatories filed by Eimskip, and conducted one discovery (of Eimskip’s principal).

These procedures are normal and expected in the conduct of litigation and, in my view, cannot be said to have been undertaken as a result of Nordica having a false sense of security about its suit. [ 53 ] Both Nordica and Eimskip are sophisticated commercial entities. Nordica, like any plaintiff, had to know all along that Eimskip, like any defendant, could apply for issue estoppel, or seize any other opportunity to have Nordica’s action reduced, struck, dismissed or stayed.

Nordica was as aware as Eimskip that the legality of Eimskip’s alleged blockade actions had been decided in the Norwegian litigation and that the decision was made at Nordica’s invitation and request. Nordica was also aware that the finality of the Sunnmøre Court’s decision was confirmed by Nordica withdrawing its appeal in the Frostating Appeals Court. In these circumstances, Nordica must be taken to have known its legal position with respect to the risk that issue estoppel could be applied to the Canadian suit ever since Nordica filed its defence to the Norwegian suit.

That risk increased once the Sunnmøre District Court decided the Norwegian suit, and increased again after Nordica withdrew its appeal in the Frostating Appeals Court. The only reasonable conclusion is that Nordica made a strategic decision to put the legality of Eimskip’s alleged blockade actions before the Sunnmøre District Court, and knew or ought to have known that a decision respecting the issue, if not in Nordica’s favour, might have application to the Canadian suit.

The application of issue estoppel following this sequence of events cannot be said to work an injustice on Nordica. [ 54 ] The application judge described the timing of Eimskip’s issue estoppel application as “on the eve of trial.” I do not agree with this characterization. Eimskip’s issue estoppel application was filed in November 2011, before the pretrial conference took place. According to the record, the matter was placed on the pretrial list due to its age and on the understanding that further applications and pretrial work had to be undertaken before a trial would take place.

No settlement conference or trial date had been set. While the case was aged, it was still a good distance from trial in November 2011 when Eimskip applied for issue estoppel, and the fact that the application was not heard and decided until 2013 was in large part due to Nordica’s delays in posting the additional security for costs and filing translated documents. More important, though, is that the purpose of Eimskip’s issue estoppel application was to avoid re- litigation of the legality of Eimskip’s blockade actions at trial .

While I would not want to be taken as encouraging filing an issue estoppel application the week before a scheduled trial, as long as an application is made and decided before trial, the policy objectives of the doctrine will be vindicated. [ 55 ] In any event, Eimskip maintained that it had legitimate reason for not filing its issue estoppel application sooner, saying that it had every reason to believe that Nordica would not be pursuing the Canadian suit.

Eimskip argues that Nordica’s lack of action respecting the suit, the bankruptcy of Nordica Foods A/S and the indications from Nordica’s trustee and creditors that they were not interested in pursuing the Canadian suit all served to signal to Eimskip that Nordica was not pursuing its Canadian suit. As noted above, the record discloses that Nordica took little meaningful action to prosecute its Canadian claim, and this generally supports the notion that Nordica was not serious about pursuing its Canadian suit.

While it is not necessary for Eimskip to excuse the timing of its application, I have no hesitation in accepting that Eimskip believed that Nordica would not be prosecuting its Canadian suit. In the above circumstances, Nordica’s delay in advancing the Canadian suit could well have lulled Eimskip into believing that Nordica was not serious about the Canadian suit, and could explain in some measure why Eimskip did not make its application earlier.

[ 56 ] To my mind, an assertion of unfairness as a result of the timing of Eimskip’s application would require Nordica to show how the timing actually worked an injustice on Nordica or how Nordica was actually prejudiced by the timing. Timing, late or not, without more, does not establish injustice and did not in this case. The ordinary litigation procedures Nordica took to prosecute its claim can hardly constitute unfairness.

In the result, Nordica, as the resisting party, did not demonstrate, and I am unable to see, how injustice was worked on it as a result of the timing of Eimskip’s application. [ 57 ] Accordingly, the timing of Eimskip’s res judicata application was not a relevant factor on which the judge could decline to apply the doctrine of issue estoppel to the Canadian suit.

Nordica’s Posting of Security for Costs and Declared Intentions to Proceed with the Canadian Suit [ 58 ] Nordica’s posting of additional security for costs shortly before Eimskip filed its issue estoppel application also does not demonstrate unfairness to Nordica. The ordering of security for costs is meant to address the risk that a prevailing litigant will not be able to recover its awarded costs from the losing litigant after trial. Nordica’s posting of the additional security was simple compliance with a court order made after a full and fair hearing in the normal course of litigation.

It says no more than that Nordica wished to proceed with its suit and was prepared to post the required security in order to do so. Likewise, Nordica’s filing of Notices of Intention to Proceed and its stated desire to proceed with its Canadian suit during the Norwegian litigation are no more than assertions that Nordica wished to continue with the Canadian suit. The filing of a Notice of Intention to Proceed is a normal litigation procedure when there has been prolonged inactivity on a suit. The law does not permit re-litigation of an issue simply because a party declares it wants to do so.

The Notices and other declarations of intention to proceed with its suit cannot be said to have caused prejudice to or worked an injustice on Nordica and are not legitimate factors for consideration in the exercise of discretion not to apply the doctrine. No Counterclaim in the Norwegian Suit [ 59 ] As well, the fact that Nordica did not file a counterclaim to Eimskip’s Norwegian suit, as opposed to the set-off which it did claim, does not justify not applying the doctrine.

A litigant’s failure to plead all damages or claim all available relief in an action does not preclude application of issue estoppel ( Naken , page 101 and Cliffs over Maple Bay (Re) , 2011 BCCA 180 , paragraphs 37-38 ). [ 60 ] What is at stake in an issue estoppel application is whether the previous determination of an issue should apply to a case, not whether every possible remedy was claimed in the previous suit. If a previous decision on an issue is applied to subsequent proceedings, whatever consequences flow from determination of that issue flow from it.

It does not matter that a different remedy is sought in the later proceeding than what was sought in the earlier one, as Furlong instructs. Neglect, oversight or even mistake do not operate to foreclose application of issue estoppel. Again, Nordica must live with the consequences of its strategic decision to put the legality of Eimskip’s blockade actions before the Sunnmøre Court for determination. [ 61 ] Accordingly, the application judge erred by failing to require Nordica to show how it would suffer unfairness if the judge were to apply issue estoppel to the Canadian suit.

Instead, he appears to have placed the burden on Eimskip to justify why it did not apply for issue estoppel sooner. In his analysis, the judge misapprehended the effect of the timing of Eimskip’s application, Nordica’s declared intentions to proceed with its suit, Nordica’s posting of security for costs and the age and history of the litigation, and found unfairness where none existed. Accordingly, the judge erred in principle in his approach to the application of the discretion. [ 62 ] In the result, I would reverse the judge’s decision.

The doctrine of issue estoppel must apply to the Canadian suit in that the determinations of the Sunnmøre District Court respecting the legality of Eimskip’s blockade actions that 1) Eimskip had the legal right to take control of the two shrimp cargoes on October 14, 1997, 2) Nordica and Eimskip had agreed in June of 1997 that Eimskip could take control of Nordica’s shrimp if Nordica did not honour the repayment terms respecting its debt to Eimskip, and 3) Nordica’s allegations respecting the legality of the alleged blockade were not supported by the evidence, are final determinations in Nordica’s Canadian suit.

The parties have leave to seek further directions in the event of matters arising in this regard. Costs [ 63 ] I would award Eimskip its costs on scale 3 in this Court and the court below. ______________________________ L. R. Hoegg J.A. I Concur: _________________________________ J. D. Green C.J.N.L. I Concur: _________________________________ C. W. White J.A.