Kasperson v. Halifax (Regional Municipality), 2012 NSCA 110

NOVA SCOTIA COURT OF APPEAL Citation: Kasperson v. Halifax (Regional Municipality) , 2012 NSCA 110 Date: 20121101 Docket: CA 355412 Registry: Halifax Between: Paul Eric Kasperson and Deborah Diane Kasperson Appellants and Halifax Regional Municipality Respondent and Ray Cox Jr., doing business in the name and style of Ray Cox Construction, and Ray Cox Construction Second Respondents (Third Party ) Judge: The Honourable Justice Duncan R. Beveridge Appeal Heard: April 30, 2012 Subject: Practice and Procedure: the applicability of the doctrine of res judicata ; and the Tortfeasors Act , R.S.N.S. 1989, c. 471.

Summary: The appellants were sued in Small Claims Court for unpaid wages due to a carpenter, Ray Cox Jr. The appellants counterclaimed for damages caused by Mr. Cox in how their heating system was installed. The adjudicator found that wages were owed by the appellants but the amount was offset by a damage award of $25,000 in favour of the appellants. The net judgment in favour of the appellants was not satisfied. The appellants sued HRM in the Supreme Court alleging negligence in how building inspections were conducted, and consequent damage.

HRM denied any liability and also issued a third party claim against Ray Cox Jr. seeking contribution or indemnity. Both HRM and Ray Cox Jr. were successful on a motion for

summary judgment on the basis that cause of action estoppel precluded the suit by the appellants against HRM and HRM ’ s third party claim against Ray Cox Jr. The motions judge concluded that issue estoppel did not apply. In addition, the motions judge concluded that the judgment in favour of the appellants prevented their claim on the basis of the Tortfeasors Act .

Issues: Did the motions judge err in law in his analysis and conclusion with respect to the principles of res judicata and the import of the Tortfeasors Act ? Result: The motions judge was correct to conclude that issue estoppel did not preclude the action by the appellants. However, he did err in law in granting the motion for

summary judgment on the basis of either cause of action estoppel or the Tortfeasors Act . HRM and Ray Cox Jr. were concurrent tortfeasors. As such, the appellants had a separate cause of action against each, and the common law in no way precluded them from suing them one after the other. In doing so, the Tortfeasors Act does limit the appellants ’ potential judgment against HRM for the flawed heating system to the amount of damages awarded by the Small Claims Court.

That Act also limits the total recovery for such claims to that amount, but since the appellants have not been paid there is no impediment to their claim against HRM. This information sheet does not form part of the court ’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 25 pages. NOVA SCOTIA COURT OF APPEAL Citation: Kasperson v.

Halifax (Regional Municipality) 2012 NSCA 110 Date: 20121101 Docket: CA 355412 Registry: Halifax Between: Paul Eric Kasperson and Deborah Diane Kasperson Appellants and Halifax Regional Municipality Respondent and Ray Cox Jr., doing business in the name and style of Ray Cox Construction, and Ray Cox Construction Second Respondents (Third Party) Judges: Fichaud, Beveridge and Farrar, JJ.A.

Appeal Heard: April 30, 2012, in Halifax, Nova Scotia Held: Appeal allowed and the motion for

summary judgment is dismissed with costs to the appellants in the amount of $2,500, inclusive of disbursements, per reasons for judgment of Beveridge, J.A.; Fichaud and Farrar, JJ.A. concurring. Counsel: Peter M.

Landry and Graham McGillivray, Law Student, for the appellants Franco Tarulli, for the respondent, Halifax Regional Municipality Emad Al-Sharief and Noémi Westergard, Articled Clerk, for the second respondents Reasons for judgment : INTRODUCTION [ 1 ] A motions judge concluded that the appellant ’ s claim against the respondent Halifax Regional Municipality could not succeed due to a previous claim the appellants had pursued in Small Claims Court against the respondent Ray Cox Jr. The judge issued an order dismissing all claims. The appellants appeal.

For the reasons that follow, I agree that the motions judge erred in law. I would allow the appeal and permit the appellants ’ claim against HRM and the Respondent ’ s third party claim against Ray Cox Jr. to proceed to trial. [ 2 ] To understand what led the motions judge to stop these lawsuits I need to tell you what happened. FACTS [ 3 ] The appellants are husband and wife. They had a dream, a home overlooking Porter ’ s Lake. They thought they had hired Ray Cox to build their home. There was no written contract. Things did not proceed well. The appellants fired Mr. Cox in the fall of 2004.

They knew there were problems with the home, but the appellants took no action. [ 4 ] Mr. Cox was first out of the litigation gate. Almost two years after being fired, Cox sued the appellants on August 22, 2006 in Small Claims Court. He claimed he was owed $14,438.25 for unpaid wages. The appellants were represented by counsel. She filed a defence on their behalf disputing any agreement to pay Cox an hourly wage. They plead that Cox owed them a duty of care as the builder of their home, and he was negligent in the performance of his duties. Particulars were given.

In addition, a counterclaim was advanced by the appellants for the cost they incurred in repairing work they say was negligently performed by Cox or by subtrades under his supervision. The counterclaim was said to exceed the $25,000 monetary limit of the Small Claims Court. [ 5 ] The hearing of the small claims court claims was initially set for November 7, 2006. Counsel for the Kaspersons asked the adjudicator to stay or dismiss the proceedings. In support of the request, a letter dated November 6, 2006 was submitted to the adjudicator. The letter was from Peter Landry of Landry, McGillivray.

It was addressed to the Kaspersons. This new lawyer confirmed that his firm had started drafting a statement of claim to commence an action in the Supreme Court of Nova Scotia against the Halifax Regional Municipality (HRM) and Ray Cox Jr. An opinion was expressed that it would be in the interests of justice that the litigation with respect to Ray Cox Jr. and HRM should be heard all at once in the Supreme Court. He said he expected the potential recovery would exceed the monetary limit of the Small Claims Court. [ 6 ] The adjudicator declined to stay or dismiss the small claims proceedings.

He acknowledged that the Small Claims Court would have no jurisdiction to deal with a claim where the issues in dispute were before another court ( s. 15 of the Small Claims Court Act , R.S.N.S. 1989, c. 430). Because there was only a potential claim in the Supreme Court, he refused the requested relief. However, he did grant an adjournment of one month to permit the appellants to muster expert evidence.

[ 7 ] Since no lawsuit in the Supreme Court was commenced, the hearing in small claims court proceeded on December 6, 2006. There is no need to recite the evidence adduced. The adjudicator reserved his decision. It was released January 22, 2007 ( 2007 NSSM 8 ). He concluded that Ray Cox Construction was simply a business name of Ray Cox Jr. As a result there was only one claimant and defendant by counterclaim. The adjudicator found that Cox was not the builder of the house, but supplied carpentry services at an hourly rate.

He went on to find that Cox was owed $14,438.25 on the basis of 837 hours at $15.00 per hour plus 15% HST. [ 8 ] Although the Kaspersons ’ counterclaim advanced a litany of complaints about the work done by Cox, they withdrew all of their grievances except for heating and plumbing issues. Their principal complaint was the flawed in-floor heating system. The evidence led by the Kaspersons was that it would cost over $100,000 to fix the heating system to what should have been installed. This led the adjudicator to find this evidence to be of no use to him in affixing damages.

Instead he provided for an allowance or setoff of $7,000, leaving an order for judgment in favour of Ray Cox Jr. of $7,538.25. [ 9 ] The Kaspersons appealed to the Nova Scotia Supreme Court. Apparently, the complaint was that the damage award for the counterclaim was marred by legal error. In an unreported decision, a judge of the Supreme Court agreed. A new hearing was held before a different adjudicator.

On October 29, 2007, the adjudicator determined that on any appropriate approach the damages traceable to the deficient heating system exceeded $25,000, and hence assessed damages on the counterclaim to be that amount ( 2007 NSSM 63 ). This meant a judgment in favour of the Kaspersons of $10,561.75 ($25,000 less $14,438.25). [ 10 ] In the meantime, the Kaspersons sued HRM in Supreme Court. The action was commenced March 19, 2007.

The appellants claimed HRM owed them a duty to use reasonable care in the inspections carried out to ensure the home was being built according to HRM ’ s building bylaws; HRM had failed to do so and damage resulted. Particulars of the damage were costs incurred to repair floor joists and roof trusses; repairs to remedy ill fitting windows, and loss of value due to construction of a basement not in accordance with the plans submitted. [ 11 ] HRM filed a defence dated June 8, 2007. It denied any responsibility and said the Kaspersons were the authors of their own misfortune.

In addition, they plead that res judicata applied on the basis that “ this matter ” had been already dealt with in Small Claims Court. A more detailed defence was filed by HRM on January 8, 2008. It elaborated on the general themes set out in its initial defence, and plead that any alleged loss was caused by the negligence or breach of contract by Ray Cox Jr.

HRM sought and obtained leave of the Court on January 14, 2008 to issue a third party claim against Ray Cox Jr. [ 12 ] Within two weeks HRM issued a Originating Notice (Third Party) against Ray Cox Jr. alleging that all loss or damage claimed by the Kaspersons were the result of Cox ’ s negligence. Contribution and indemnity were claimed. [ 13 ] Ray Cox Jr. filed his defence on April 16, 2008. He denied any wrongdoing and said that the Kaspersons or others were at fault for any deficiencies. Furthermore, any deficiencies by Mr.

Cox had already been raised by the Kaspersons in the small claims court proceedings; therefore, any issues of deficient work by him were res judicata . [ 14 ] HRM brought a motion for relief under CPR 13.04 “

Summary judgment on evidence ” on the basis that because of the earlier action by the Kaspersons in Small Claims Court, there would be no genuine issue for trial since the claim against HRM was barred by the principle of res judicata . Ray Cox Jr. supported HRM ’ s motion for

summary judgment on two grounds. The first was the appellants were estopped because of the claim they had pursued in Small Claims Court. The second was there was no genuine issue for trial since damages would be limited to $25,000, which amount had “ already been granted ” . [ 15 ] The appellants resisted

summary judgment arguing that their claim against HRM was in negligence, while their claim in small claims court against Ray Cox Jr. was in contract, and their claim was against an entirely different party. [ 16 ] The judge who heard HRM ’ s motion for

summary judgment was the Honourable Justice Arthur J. LeBlanc. His decision is reported as 2011 NSSC 65 . The motions judge carefully set out the history of the proceedings involving the parties and identified the issues he needed to address as:

(1) The determination of the appropriate test for a

summary judgment application claiming that an action should be dismissed because it

is res judicata ;

(2) Whether there is no genuine issue for trial because the matter is res judicata ;

(3) If the action is res judicata , whether the Court should exercise its discretion to let the action proceed;

(4) If the action is not res judicata , whether there is no genuine issue for trial because the action is limited by the Tortfeasors Act , R.S.N.S. 1989, c. 471. [ 17 ] In a

summary way, the motions judge concluded that if res judicata applied, then there was no genuine issue for trial. He found that issue estoppel did not apply, but cause of action estoppel did. He was not satisfied there were any special circumstances that would justify a refusal to apply the doctrine of res judicata to prevent a re-litigation of the appellants ’ claims. Lastly, he concluded that by virtue of s. 3 (

b) of the Tortfeasors Act, R.S.N.S. 1989, c. 471 the damage award in favour of the appellants was a full discharge of the claim against Ray Cox Jr. [ 18 ] An order was duly taken out dismissing the appellants ’ claim against HRM along with the claim by HRM against Ray Cox Jr., with costs payable to each of the successful parties by the appellants. [ 19 ] In this Court, the appellants advanced five grounds of appeal.

They are: 1The learned Chambers Judge erred in applying judicial doctrines, meant to serve the ends of Justice, in a mechanical fashion; And this worked an injustice on the appellants. 2The learned Chambers Judge erred when coming to the conclusion that the same facts as established by the Small Claims Court, in a separate and earlier action in court between the Appellants as Defendants and the second Respondents as Claimants were the same facts as might be found in the instant case at the full trial of the matter. 3The learned Chambers Judge erred, in applying the tests for cause of action estoppel, in that there was no evidence before him of the necessary "material facts," and which were judicially required before applying the equitable doctrine of cause of action estoppel. 4The learned Chambers Judge erred in misconstruing the concept of "privity." 5The learned Chambers Judge did not stand back, and, taking into account the entirety of the circumstances, consider whether the application of estoppel in the instant case would work an injustice, particularly in view of the fact that claims that the Appellants/Plaintiffs made against the Respondent/Defendant, have never been properly considered and adjudicated. [ 20 ] The respondent HRM filed a Notice of Contention asking that the judgment under appeal should be affirmed for the reasons of the motions judge and because, as set out in Danyluk v.

Ainsworth Technologies Inc ., 2001 SCC 44 , the doctrine of res judicata applied to bar the appellants ’ claim. ISSUES [ 21 ] As I see it, to come to grips with the issues decided by the learned motions judge, I need to consider the following: 1.Does cause of action estoppel apply to preclude the appellants ’ claim against HRM?

2.What legal consequences flow from the earlier small claims court proceedings? 3.Does issue estoppel apply to preclude the appellants’ claim against HRM or HRM’s third party claim against Ray Cox Jr.? DISCUSSION Cause of Action Estoppel [22] There can be little doubt that the doctrine of res judicata presents difficult terrain to traverse. However, with all due respect tothe parties and to the motions judge, they have misconceived how and in what circumstances the doctrine operates. It is not, as theappellants suggest, an equitable doctrine, but one of common law.

It may have its roots in the Roman law (Danyluk, supra, para. 20) butas noted by Henry Campbell Black, M.A., The Law On Judgments, Vol. II (West Publishing Company, St. Paul, Minn., 1902) pp. 759-760 it is a fundamental organizing concept for every society governed by the rule of law: That the solemn and deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or state of facts, should beregarded as a final and conclusive determination of the question litigated, and should forever set the controversy at rest, is a rule commonto all civilized systems of jurisprudence.

But it is more than a mere rule of law. It is more even than an important principle of publicpolicy. It is not too much to say that this maxim is a fundamental concept in the organization of every jural society. [23] Res judicata tries to ensure finality of litigation by stopping parties from resurrecting disputes that have already been finallylitigated. There are two ways res judicata can be established. The first is cause of action estoppel.

This precludes a person or theirprivies from bringing an action against another party when the same cause of action has already been finally adjudicated upon in earlierproceedings by a court of competent jurisdiction. The second is issue estoppel. This precludes re-litigation by a party of issues that acourt has decided in an earlier proceeding. The classic statement of the difference is by Lord Diplock in Thoday v. Thoday, [1964] 1 AllE.R. 341, at p. 352: I do not think that any estoppel in its common law concept arises in the present case.

The particular type of estoppel relied on by thehusband is estoppel per rem judicatam. This is a generic term which in modern law includes two species. The first species, which I willcall “cause of action estoppel”, is that which prevents a party to an action from asserting or denying, as against the other party, theexistence of a particular cause of action, the non-existence or existence of which has been determined by a court of competentjurisdiction in previous litigation between the same parties.

If the cause of action was determined to exist, ie., judgment was given on it,it is said to be merged in the judgment, or, for those who prefer Latin, transit in rem judicatam. If it was determined not to exist, theunsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. This is simply an application of the rule ofpublic policy expressed in the Latin maxim, “nemo debet bis vexari pro una et eadem causa”. In this application of the maxim, causabears its literal Latin meaning.

The second species, which I will call “issue estoppel”, is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Suchcauses of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order toestablish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two ormore different causes of action.

If in litigation on one such cause of action any of such separate issues whether a particular condition hasbeen fulfilled is determined by a court of competent jurisdiction, either on evidence or on admission by a party to the litigation, neitherparty can, in subsequent litigation between them on any cause of action which depends on the fulfilment of the identical condition, assertthat the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court inthe first litigation determined that it was. [24] At times, certain fact situations make it difficult to identify when the doctrine applies.

For example, in Grandview v. Doering, (SCC), [1976] 2 S.C.R. 621, the Supreme Court of Canada in a five-four split applied the doctrine of cause of actionestoppel to preclude the plaintiff from again suing Grandview for damage claimed to have been caused in how it constructed andoperated a dam. A previous claim alleged that flooding was caused by a town dam. The plaintiff lost. The second action allegeddamage was caused by the same dam, but asserted it was caused by a different mechanism.

That is, the artificially high water levelsmaintained by the dam caused water to enter the aquifer with the consequence of saturating the plaintiff’s land. The majority found thatthe second action was merely an attempt by the plaintiff to claim for the same damage by alleging a different theory espoused by a newexpert.

[25] Hewak C.J.Q.B. (albeit in obiter) in Bjarnarson v. Manitoba (Government of), (MB KB), [1987] 4 W.W.R.645, [1987] M.J. No. 277, summarized succinctly the four criteria he took from the decision of the Supreme Court in Grandview asfollows; The Supreme Court of Canada in the case of Town of Grandview v. Doering (1975), (SCC), 61 D.L.R. (3d) 455,identified four criteria that must be present before the doctrine of cause of action estoppel would apply: 1. There must be a final decision of a court of competent jurisdiction in the prior action; 2.

The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action [mutuality]; 3. The cause of action in the prior action must not be separate and distinct; and 4. The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties hadexercised reasonable diligence. [26] Another useful

summary of the requirements is that by O’Leary JA in 420093 B.C. Ltd. v. Bank of Montreal, (AB CA), [1995] A.J. No. 862, where he wrote: 18A prior judicial decision will not raise an estoppel by res judicata, either issue estoppel or cause of action estoppel, unless (

i) it was afinal decision pronounced by a court of competent jurisdiction over the parties and the subject-matter; (ii) the decision was, or involved,a determination of the same issue or cause of action as that sought to be controverted or advanced in the present litigation; and (iii) theparties to the prior judicial proceeding or their privies are the same persons as the parties to the present action or their privies. [27] There is no need to go through all of these criteria one by one.

I have no hesitation in saying that if the appellants sought to sueRay Cox Jr. in the Supreme Court, they could not do so for a variety of reasons, not the least of which is that any such action would beestopped by the judgment rendered in the small claims court. But I fail to see how they are estopped from proceeding against HRM. The cause of action against HRM is not the same cause of action or claim they pursued against Ray Cox Jr. in small claims court. I willexplain further. [28] At common law there are fundamental differences between concurrent and joint tortfeasors.

Where a plaintiff is injured by twoor more defendants who act jointly to cause damage to a plaintiff, the plaintiff has but one cause of action. If he sued one or more tojudgment, the cause of action was merged. Subject to very limited exceptions, if a plaintiff settles with one joint tortfeasor he is debarredfrom proceeding against other joint tortfeasors (see the discussion of this rule in Joint Tortfeasors & the Common Law “Release BarRule”, Law Reform Commission of Nova Scotia, July 2002). [29] This is not so for a plaintiff who has been damaged by the acts or omissions of concurrent or several tortfeasors.

Not only wasthere no bar from proceeding against them one after the other as the plaintiff had a separate cause of action against each, but the law wasthat such tortfeasors could not be sued in the same action (Sandler v.

The Great Western Railway Co., [1896] A.C. 450; see also, OntarioLaw Reform Commission, Report on Contribution Among Wrongdoers and Contributory Negligence (Ministry of the Attorney General,1988) at p. 11). [30] There may have been ways to overcome such a restriction, but in any event the rules of court were amended to permit thejoinder of several or concurrent tortfeasors as co-defendants (Glanville L. Williams, Joint Torts and Contributory Negligence: A Study ofConcurrent Fault in Great Britain, Ireland and the Common-law Dominions (London: Stevens & Sons Ltd., 1951) p. 51).

Needless tosay, the Nova Scotia Civil Procedure Rules now, and for some considerable period of time, permit the joinder of different causes ofactions against different defendants (see Nova Scotia Civil Procedure Rule 35, formerly Rule 5, Nova Scotia Civil Procedure Rules

(1972)). [31] The different approach for claims against joint and concurrent tortfeasors is succinctly summarized by G. H. Fridman, Q.C.,The Law of Torts in Canada, 3rd ed. (Toronto: Carswell, 2010), p. 860, as follows: At common law, if the wrongdoers were joint tortfeasors an action brought by the plaintiff against one effectively barred the plaintifffrom bringing a subsequent action against any other. As Clute J. said in Sheppard Publishing Co. v.

Press Publishing Ltd., if one of thejoint tortfeasors were sued and judgment recovered against him, that was a bar to the further action against his joint tortfeasors. Therationale of the rule was that there was a single cause of action against joint tortfeasors and this merged in the judgment. If thewrongdoers were several tortfeasors, however, there was no single cause of action.

Hence, where the several tortfeasors were guilty ofconcurrent acts which caused the plaintiff's loss, the plaintiff could proceed against one and recover from the other the balance of anyloss the plaintiff was unable to secure when judgment was executed against the other. [32] The consequences of this difference was aptly described by Lambert J.A. in Copperview Haven Ltd. v. Waverley Park EstatesLtd., (BC CA), [1984] 4 W.W.R. 673 at 679, [1984] B.C.J.

No. 1672: 32This argument rests on the old common law position with respect to true joint tort feasors, such joint tort feasors as a servant and amaster who is vicariously liable for his acts, or joint tort feasors such as people who embark on a common course and common action todo damage.

There may, of course, be other examples of true joint tort feasors. 33The principle, of course, was that if a judgment was given against one joint tort feasor, or settlement was reached with one joint tortfeasor, all of the other joint tort feasors were thereby released because the cause of action had merged in the judgment and there was noexisting cause of action to continue. The rule never applied to concurrent tort feasors, against whom there were completely distinctcauses of action, even in cases where they may have caused the same damage.

See also The Koursk, [1924] P. 140 (C.A.). [33] The learned motions judge concluded that if HRM and Ray Cox Jr. breached a duty of care to the appellants they would beliable as concurrent tortfeasors. He reasoned: [23]Assuming without deciding that the third parties and HRM breached their respective duties, the result is the commission ofindependent torts that work[ed] together because [to cause] the common head of damages. As a result, HRM and the third parties areallegedly concurrent tortfeasors.

Several concurrent tortfeasors are independent tortfeasors whose acts contribute to a single damage.According to the text, Williams, Joint Torts and Contributory Negligence, concurrent torts are characterized by “the logicalimpossibility of apportioning the damage among the different tortfeasors”. In this case, if it were established that the residence was notbuilt to Code by the third parties, and that a reasonable inspection by HRM would have caught deficiencies, it would not be possible toapportion the damages between the third parties and HRM.

Consequently, the tortfeasors would be concurrent tortfeasors. [34] The parties take no issue with this conclusion. I respectfully agree with the motions judge. The classic definition of thedifference between joint and concurrent tortfeasors is by Professor Williams, ibid, at para. 1: The term ‘joint tortfeasor’ is, in essence, well understood. Two or more tortfeasors are joint tortfeasors (

a) where one is the principal ofor vicariously responsible for the other, or (

b) where a duty imposed jointly upon them is not performed, or (

c) where there is concertedaction between them to a common end. Except in the case of nonfeasance in breach of a joint duty, parties cannot be joint tortfeasorsunless they have mentally combined together for some purpose. Where tortfeasors are not joint they are necessarily ‘several,’ ‘separate,’ or ‘independent.’ Several (i.e. separate or independent)tortfeasors are of two kinds: several tortfeasors whose acts combine to produce the same damage, and several tortfeasors whose actscause different damage. The latter are outside the scope of this work, except in so far as reference to them is necessary in order to throwinto relief the rules relating to the former.

[ 35 ] There may well be valid reasons to encourage a plaintiff to sue all of the potential co-defendants in one proceeding, but where there is more than one cause of action, the failure to do so is not necessarily fatal to bringing a subsequent action. It promotes judicial economy, reduces the risk of conflicting determinations, and the potential for unfortunate consequences for plaintiffs. But since the cause of action is separate as against each concurrent tortfeasor, cause of action estoppel has no application. There is no need to enter into a discussion whether HRM and Ray Cox Jr. were privies.

Other legal consequences [ 36 ] That is not to say that the small claims court proceedings may not have consequences for the litigation between the Kaspersons, HRM and the third party Ray Cox Jr. Legislative reform in the United Kingdom, Canada, and in many commonwealth jurisdictions changed the common law in some profound ways. In Nova Scotia, the legislative initiative was the Tortfeasors Act , S.N.S. 1945, c. 19 (now R.S.N.S. 1989, c. 471). It adopted the language of the English Statute Law Reform (Married Women and Tortfeasors) Act , 1935 (25 & 26 Geo. 5, c. 30).

It provides: 3 Where damage is suffered by any person as a result of a tort, whether a crime or not, (a)judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage; (b)if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, parent or child, of that person, against tortfeasors liable in respect of the damage, whether as joint tortfeasors or otherwise, the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given, and in any of those actions other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the judge presiding at the trial or the court on appeal is of the opinion that there was reasonable ground for bringing the action; (

c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this

Section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought. [ 37 ] I need not canvass all of the impact and complexity of these and other related provisions. For the purposes of this appeal, it is sufficient to note that s. 3 (

a) only changed the law vis-à-vis joint tortfeasors as there was no rule precluding successive actions against concurrent tortfeasors. [ 38 ] Significantly, s. 3(

b) mandates that a plaintiff is bound by the calculation of damage caused by the tortfeasors in the judgment first given. At common law, the plaintiff could, in a second action, obtain a larger judgment than in a prior proceeding (see Williams, ibid , at p. 39). This provision also discourages the bringing of successive actions by removing the normal entitlement to costs “ unless the judge presiding at the trial or the court on appeal is of the opinion that there was reasonable ground for bringing the action ” . [ 39 ] Lastly, s. 3(

c) directs that any tortfeasor may sue to recover contribution who is, or would be if sued been liable in respect to the same damage. The amount of the recovery is to be determined by the trial judge or appeal court as is “ just and equitable ” having regard to the extent of that person ’ s responsibility for the damage (s. 4). [ 40 ] The appellants sued Ray Cox Jr. by counterclaim in small claims court.

Initially, the claim was for “ substandard or incorrect installation of the dining room floor, locks, trim, doorways, front entrance, fireplace, basement, furnace, hot water tank, air ventilation system, oil tank, electrical, windows, door openings and plumbing ” . Before the conclusion of the small claims court hearing, the appellants amended their counterclaim by withdrawing all complaints against Ray Cox Jr. except for heating and plumbing issues. By doing so, in my opinion, they would not have escaped the consequences of res judicata by cause of action estoppel.

All of their complaints about negligence by Ray Cox Jr. in how he built or supervised others in the construction of their home belonged in that proceeding. The appellants are estopped from again suing Mr. Cox for any alleged deficiencies in what he did or failed to do. This

result from the common law is reinforced by the provisions of the Small Claims Court Act which says: 30An order in an action brought for the balance of an account, or for a part of a claim where the residue is abandoned to bring the claimwithin the jurisdiction of an adjudicator, is a full discharge of all demands in respect of the account for the balance of which such claimwas brought or for the whole claim, as the case may be. [41] Since the heating and plumbing claim alone exceeded $25,000, it could be argued that the appellants did not abandon theirclaim for deficiencies beyond the heating and plumbing for the purpose of bringing their claim within the jurisdiction of the adjudicator.

However, the purpose of such a provision is to ensure that a party does not split its case. If they do and nonetheless proceed to utilize theinformal and speedy access to adjudication provided by the Act, the order they receive for their claim may be a full discharge of theirwhole claim against a defendant. [42] In any event, the appellants have not sued Ray Cox Jr. They have set their sights on HRM, claiming it was negligent incarrying out building inspections during construction. As I have already explained, in my opinion, the common law does not precludethis suit against HRM.

Neither, in my opinion do the provisions of the Tortfeasors Act. [43] It is important to keep in mind what cause of action is being litigated. It is a claim that HRM was negligent. HRM is notasserting any cause of action against Ray Cox Jr. At common law, a tortfeasor sued by a plaintiff had absolutely no right of recoveryagainst other potential defendants (see Ontario Law Reform Commission, Report on Contribution Among Wrongdoers and ContributoryNegligence (1988) p. 51). In Parkland (County of) v.

Stetar et al., (SCC), [1975] 2 S.C.R. 884, Dickson J., as he thenwas, for the Court referred with approval to the judgment by Lord Denning M.R. in Hart v. Hall and Pickles Ltd., [1968] 3 All E.R. 291where he said (p. 897): This point depends on the

interpretation of the Act of 1935. Before that Act when there were separate tortfeasors causing one damage,the plaintiff could sue them each in turn till he got the total amount of his damages: and neither of the tortfeasors had any right ofcontribution from the other. Now this statute gives a right of contribution. Section 6(1) provides that: “Where damage is suffered by any person as a result of a tort . . . (

c) any tortfeasor liable in respect of that damage may recovercontribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage . . .” [44] Dickson J. concluded the law was the same in Canada. He wrote: It is contended that it is unjust to require Stetar to pay in full the claims of the Poiriers and Car Rentals when they, by their delay, havemade it impossible for Stetar to recover contribution from the county.

It is fundamental, however, to tort law that a plaintiff can proceedagainst any one of a number of joint or several tort-feasors; there is no duty upon him to sue all those whom he believes contributed to hishurt. He may elect to recover the full amount of his damage from a tort-feasor only partly to blame and that tort-feasor, prior toenactment of s. 4(1)(

c) of The Tort-Feasors Act, had no right to contribution from any other person: Merryweather v. Nixan [(1799), 8T.R. 186, 101 E.R. 1337]. Section 4(1)(

c) and its counterpart in other jurisdictions have ameliorated the common law in that the right tocontribution has now been recognized; however, even in those cases in which for some reason the right to contribution does not exist, thevictim retains the right of full recovery from the tort-feasor whom he has sued. I am accordingly of the view that Stetar has noenforceable claim for contribution against the county in respect of any amount paid by Stetar to Poirier and Car Rentals in the first actionand to Mrs.

Poirier and children in the second action. [45] The right of contribution being asserted by HRM against Ray Cox Jr. is not a claim for damages (Baker v. Gray Coach LinesLtd. et al., (ON CA), [1949] 2 D.L.R. 238 (Ont.C.A.); Ukrainian (Fort William) Credit Union Ltd. (In Liquidation) v.Nesbitt, Burns Ltd., (ON CA), [1997] 152 D.L.R. (4th) 640, [1997] O.J. No. 4282 (Ont.C.A.)).

It is a statutory claimbased on principles of restitution – a remedy against the unjust enrichment of one tortfeasor at the expense of another (see DavidChiefetz, Apportionment of Fault in Tort (Aurora: Canada Law Book, 1981) pp. 8-10; Ontario Law Reform Commission, Report onContribution Among Wrongdoers and Contributory Negligence (Toronto, Ont.: Ontario Ministry of the Attorney General, 1988) pp. 49-55). [46] The motions judge appears to have concluded that the Tortfeasors Act precluded the appellants from suing HRM, and HRMfrom seeking contribution, if it was liable.

This aspect of his decision is somewhat unclear. The formal Order, from which the appeal is

taken, says that the appellants ’ claim against HRM is dismissed. With respect, for reasons already outlined earlier, he was in error in this conclusion. In my opinion, there is also nothing in the Tortfeasors Act that precludes the claim by the appellants against HRM. I will elaborate. [ 47 ] The motions judge acknowledged that at common law, and under the applicable legislation in Nova Scotia, successive actions against concurrent tortfeasors are permissible. He wrote as follows: [51]I believe as well that s. 3 (

b) of the Tortfeasors Act limits the plaintiffs’ potential recovery spare [ sic ] $25,000. Under the common law, successive actions against tortfeasors are permissible unless satisfaction has been obtained from one of the concurrent tortfeasors. In Williams, Joint Tortfeasors , at p. 33, the author states: Satisfaction by any of the concurrent tortfeasors discharges the others. Satisfaction means payment of damages, whether after judgment, by way of accord and satisfaction, or the rendering of any agreed substitution therefor.

If the payment is of damages, it must be of the full damages agreed by the plaintiff or a judge by the court as the damages due to him; otherwise it will only be satisfaction pro tanto . [ 48 ] I agree entirely with these observations. The motions judge referred to s. 3 (

b) of the Tortfeasors Act that limits a plaintiff to recovery of the amount of damages awarded in the judgment first given. He also referred to s. 30 of the Small Claims Court Act (para. 55) and observed that this

section does not bar successive actions against concurrent tortfeasors. The motions judge then concluded: [56]In the matter before me, the plaintiffs decided to counterclaim in the Small Claims Court for the limit of $25,000 against the third parties. The result is that the damages awarded are a full discharge of the claim against the third party even though the plaintiffs’ full claim for damages is significantly higher than this amount. [ 49 ] There are two problems with this reasoning. The first is the judgment against Ray Cox Jr. for $25,000 does not discharge HRM ’ s potential liability.

It is the payment by a defendant to a plaintiff in an amount that fully satisfies his loss that precludes any further recovery by a plaintiff. That amount may be set by judgment or by accord and satisfaction. That is why in the quote cited by the motions judge, Professor Williams says: Satisfaction by any of the concurrent tortfeasors discharges the others. Satisfaction means payment of damages, whether after judgment, by way of accord and satisfaction, or the rendering of any agreed substitution therefor.

If the payment is of damages, it must be of the full damages agreed by the plaintiff or a judge by the court as the damages due to him; otherwise it will only be satisfaction pro tanto. [emphasis added] [ 50 ] Pro tanto means “ for so much ” or “ to such an extent ” (Daphne Dukelow, The Dictionary of Canadian Law (Scarborough: Thomson Canada, 1991) at 837). The record before the motions judge was that the judgment in favour of the appellants was not satisfied in full.

The original amount in the statutory limit for the small claims court of $25,000 was paid down or partially satisfied by the offsetting liability of the appellants to Ray Cox Jr. of $14,438.25, leaving an outstanding unpaid judgment in favour of the appellants of $10,561.75. Attempts to execute on the judgment have been unsuccessful.

The full amount of $10,561.75 remains unpaid. [ 51 ] There is no juridical reason preventing the appellants from trying to establish that HRM ’ s negligent conduct was also a cause of the damage they suffered by reason of the faulty heating/plumbing system installed or supervised by Ray Cox Jr.

As between HRM and Ray Cox Jr. or others, a judge may well order contribution by Cox or others who may become parties by apportionment under the Contributory Negligence Act , R.S.N.S. 1989 c. 95 or s. 4 of the Tortfeasors Act . [ 52 ] I also observe that the judgment first given is in relation to a claim that Ray Cox Jr. was negligent with respect to the installation of the heating and plumbing in the house.

The motions judge would be quite correct in saying that the appellants are limited in pursuing a claim against HRM for its putative liability for the heating and plumbing systems up to the amount of the damages first awarded that remains unsatisfied. However, as the pleadings presently stand, no claim has been advanced by the appellants against HRM for its putative failure to properly inspect vis-à-vis the heating and plumbing systems. [ 53 ] The second problem is that no judgment was ever given in the small claims court for any other claimed deficiencies said to

have been caused by the acts or omissions of Ray Cox Jr., let alone by any others that were involved in building the appellants ’ home. The motions judge appeared to recognize part of this important distinction when, in his concluding paragraphs, he said: [60]Therefore, as against HRM and the third parties either as joint or concurrent tortfeasors, the proceeding is dismissed. This result does not affect any potential concurrent liability of HRM with parties other than the named third parties. [ 54 ] Yet, the order issued by the motions judge dismissed the appellants ’ claim against HRM.

With respect, this was in error. It is not at all clear in the appellants ’ statement of claim which contractors they say were responsible for their home being built to the standards mandated by the National Building Code. The appellants ’ claim damages to cover the cost of repair to the floor joists and roof trusses, out of pocket expenses and expected costs to effect repairs to windows. There is also a claim for loss of value to their home.

HRM, in its latest defence, disputes any of the claimed deficiencies would have been discoverable by HRM in the exercise of reasonable care, and that the appellants were guilty of contributory negligence. They also plead that any damage suffered by the appellants was caused by the negligence or breach of contract by Ray Cox Jr.

This led HRM to secure the permission of the Court to add Ray Cox Jr. as a third party, and to seek contribution and indemnity from him. [ 55 ] The defence by Ray Cox Jr. to the third party claim, apart from a general denial of any deficient work, asserts that the work by him was done under the supervision and direction of the appellants, and that Mr.

Cox never completed his work on the home, and to the extent there was any deficiencies, they were as a consequence of the appellants ’ failure to supervise and inspect the work of others who completed the home. [ 56 ] I fail to see how the previous proceedings in small claims court preclude the appellants from seeking recovery from HRM for damages they say were caused by its breach of duty of care. If, as HRM alleges, the problems or deficiencies were caused wholly or in part by the fault of Ray Cox Jr., HRM is at liberty to seek its statutory right of contribution from Mr. Cox. This they have done.

Cause of action estoppel has no application, nor is there any other legal impediment to these proceedings. Issue Estoppel [ 57 ] This leaves to be considered the Notice of Contention by the respondent Ray Cox Jr. The Notice contends the motions judge erred in concluding that issue estoppel did not preclude the appellants ’ claim. The notice reads as follows: This Respondent contends that the judgment under appeal should be affirmed for the Reasons set out by the Honourable Justice Arthur J.

LeBlanc on February 11, 2011, and in addition, upon the following grounds: a.The doctrine of res judicata applies so as to bar the Plaintiffs’/ Appellants’ claim for the reasons set out in Danyluk v. Ainsworth Technologies Inc. , 2001, SCC 44 , because: i.The litigation before this Honourable Court involves the same question as that before the Small Claims Court; ii.The litigation before the Small Claims Court was final; and iii.The litigation involved privies to the same parties before each Court. [ 58 ] With respect, the motions judge correctly determined that issue estoppel had no application.

Since the respondent Cox (joined by HRM in his argument) references Danyluk , supra , it is appropriate to start with that decision. [ 59 ] In that case, the appellant said she had been fired from her position as an employee with the respondent. She claimed that her

[59] In that case, the appellant said she had been fired from her position as an employee with the respondent. She claimed that heremployer owed her approximately $300,000 in unpaid commissions. Negotiations failed. She applied under the Employment StandardsAct of Ontario for her unpaid wages and commissions. The employment standards officer investigated her complaint. While theinvestigation was outstanding, the appellant also started an action for wrongful dismissal that included a claim for unpaid wages andcommissions. The respondent provided documents and a response to the employment standards officer.

These were never shown to theappellant. She had no opportunity to meet the case of her employer. The officer dismissed the claim for unpaid commissions. Theappellant did not pursue the statutory appeal route. The Ontario Court of Appeal held that the appellant's action for unpaid commissionswas barred by issue estoppel. Binnie J., for a unanimous court, disagreed. [60] For reasons that are not clear, the respondent did not suggest that the appellant’s claim was barred by cause of action estoppel. It only advanced the argument the claim was precluded by issue estoppel.

That is, in the court action, the appellant claimed entitlementto $300,000 in unpaid commissions, but that issue was decided against her in the Employment Standards Act proceeding.

Binnie J. setout the well known preconditions for issue estoppel: 25The preconditions to the operation of issue estoppel were set out by Dickson J. in Angle, supra, at p. 254: (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 the estoppel israised or their privies. [61] It is of course not just any question that must have been already decided.

As Lord Diplock said in Thoday, supra (p. 352): But “issue estoppel” must not be confused with “fact estoppel”, which, although a species of estoppel in pais, is not a species of estoppelper rem judicatam.

The determination by a court of competent jurisdiction of the existence or non-existence of a fact, the existence ofwhich is not of itself a condition the fulfilment of which is necessary to the cause of action which is being litigated before that court, butwhich is only relevant to proving the fulfilment of such a condition, does not estop at any rate per rem judicatam either party insubsequent litigation from asserting the existence or non-existence of the same fact contrary to the determination of the first court.

Itmay not always be easy to draw the line between facts which give rise to “issue estoppel” and those which do not, but the distinction isimportant and must be borne in mind. Fortunately, it does not arise in the present case. [62] In Angle v. M.N.R., (SCC), [1975] 2 S.C.R. 248, Dickson J., as he then was, took the three preconditions forissue estoppel from the judgment of Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853.

JusticeDickson was also careful to emphasize that it is not every question decided that may be said to be estopped: It will not suffice if the question arose collaterally or incidentally in the earlier proceedings or is one which must be inferred by argumentfrom the judgment. . . . The question out of which the estoppel is said to arise must have been “fundamental to the decision arrived at” inthe earlier proceedings. . . . The authors of Spencer Bower and Turner, Doctrine of Res Judicata, 2d ed. (1969), pp. 181, 182, quoted byMegarry J. in Spens v. I.R.C., [[1970] 3 All.

E.R. 295] at p. 301, set forth in these words the nature of the enquiry which must be made: ...whether the determination on which it is sought to found the estoppel is “so fundamental” to the substantive decision that the lattercannot stand without the former. Nothing less than this will do. [63] Justice Binnie, in Danyluk, supra, adopted the requirement that for issue estoppel the previous question resolved must havebeen fundamental or necessarily determined in the earlier proceedings. [64] Binnie J. concluded that all three conditions for issue estoppel had been met (paras. 54-61).

However, the appellant argued thatthe court should exercise its discretion to refuse to apply the doctrine. Binnie J. agreed that a court has such a discretion and it is to beexercised to ensure that the proper operation of issue estoppel is not at the cost of real justice in a particular case.

[ 65 ] He set out seven factors that were relevant to the exercise of the court ’ s discretion in the context of the issue having been resolved in a prior earlier administrative tribunal proceeding. Binnie J. reflected that the final and most important factor was to consider if, given the entirety of the circumstances, the application of the doctrine would work an injustice. There had been a blatant denial of procedural fairness in the Employment Standards Act proceedings leading to the determination that the appellant was not entitled to any unpaid commissions.

Binnie J. found it would work an injustice, in light of what he termed “ the stubborn fact ” the appellant ’ s claim for commissions worth $300,000 had never been properly considered and adjudicated. [ 66 ] I fail to see how this case is of any assistance to the respondents. No issue was identified before the motions judge, or in this Court, that had earlier been determined against the appellants that would preclude their success in an action against HRM for negligence.

It may well be different if the adjudicator in the small claims court proceeding had found no negligence by Cox in the installation of the heating/plumbing system, and then the appellants sought to sue HRM for failing to properly inspect and discover the same alleged deficiency. Another example would be if the appellants had claimed in the small claims court proceeding that Ray Cox Jr. had been negligent by not building their home to the standards of the National Building Code, and the adjudicator had found otherwise.

The doctrine of issue estoppel (subject to arguments about mutuality [1] ) may well then preclude the appellants from again suing not just Cox (in addition to cause of action estoppel), but also HRM and any other defendants on the basis that their home was not built to the standards mandated by the National Building Code. [ 67 ] The learned motions judge dealt with issue estoppel as follows: [28]The questions that were before the Small Claims Court were whether the third parties were the plaintiffs’ builder and whether the third parties were negligent in constructing the plaintiffs’ home.

The Small Claims Court determined that the third parties were not the plaintiffs’ builder, that the third parties were not a general contractor, and that the plaintiffs contracted directly with the various sub-contractors. The Small Claims Court also determined that the third parties were negligent in installing the plaintiffs’ in-floor heating system.

However, the Court did not determine whether the third parties were negligent in other aspects of the construction of the plaintiffs’ home because the plaintiffs amended their statement of claim and abandoned any and all other allegations of negligence. [29]There are additional questions that were not before the Small Claims Court, either explicitly or implicitly.

The Small Claims Court was not asked to consider whether some contractors, other than third parties, were liable in contract or tort; the Small Claims Court was not asked to determine whether the plaintiffs' home was inconsistent with the Codes; the Small Claims Court was not asked to consider whether HRM conducted negligent inspections of the building process; and the Small Claims Court was not asked to consider whether reasonable building inspections would have discovered the deficiencies the plaintiffs allege exist.

In short, the questions that were before the Small Claims Court, and that were finally decided by that Court, are not the same questions as are raised by the present action; therefore, the first precondition for establishing issue estoppel is not met. Given this finding, it is unnecessary to address the mutuality precondition of issue estoppel. [ 68 ] I see no error in how the motions judge disposed of this aspect of the motion. I would therefore dismiss the ground raised by the respondents in the Notice of Contention.

SUMMARY AND CONCLUSION [ 69 ] A small claims court adjudicator found that Ray Cox Jr. was at fault in the installation of the in-floor heating system and awarded a net judgment in favour of the appellants of $14,438.25. This judgment has not been satisfied. If it is satisfied, then the appellants ’ claim against any tortfeasor is spent with respect to the acts or omissions that caused damage to the appellants by reason of the flawed heating system. [ 70 ] The claim by the appellants against HRM is on the basis that their home was not built according to the applicable building Codes.

If HRM did not exercise reasonable care in their inspections to ensure compliance with those Codes, it may be liable and have to pay damages. Of course, there has been no determination the appellants ’ home was not built to Code and if it was not, that HRM were in any way at fault. [ 71 ] However, if the negligence of Ray Cox Jr. caused or contributed to the substandard construction and HRM did not exercise reasonable care in carrying out its inspections and had they done so, damage could have been avoided, then HRM and Cox are

concurrent tortfeasors. The appellants at common law have a separate cause of action against each. Therefore, cause of action estoppel is not applicable. In addition, there was no question, fundamental or otherwise, determined in the appellants ’ successful action against Ray Cox Jr. in the small claims court proceedings that precludes their claim against HRM. Therefore issue estoppel is also not applicable.

The law may encourage, but does not require the appellants as plaintiffs to join in one action every defendant that could be liable as a joint or concurrent tortfeasor. [ 72 ] If persons other than Ray Cox Jr. were at fault in the substandard construction of the appellants ’ home and HRM did not exercise reasonable care in carrying out its inspections and had they done so, damage could have been avoided, then HRM and those others are concurrent tortfeasors. Each is liable to pay damages to the appellants for the harm caused.

Res judicata in any of its forms has no application to such a cause of action. [ 73 ] Of course, even if fault is established at trial, the requirement to pay any damages to the appellants is subject to HRM ’ s claim that the appellants were entirely or partially at fault. It relies on the Contributory Negligence Act to apportion that fault. HRM also relies on the Tortfeasors Act to claim contribution against Ray Cox Jr. in an amount the court finds “ just and equitable ” having regard to the extent of Cox ’ s responsibility for the damage ( s.4 ).

If Cox has no exigible assets a judgment for contribution may not be worth much. [ 74 ] As a consequence, the motions judge erred in law in finding cause of action estoppel precluded the appellants ’ claim against HRM and HRM ’ s statutory claim for contribution against Ray Cox Jr. He also erred in law in concluding that in these circumstances the Tortfeasors Act precluded the appellants ’ claim. I would allow the appeal and dismiss the motion for

summary judgment, with costs to the appellants in the amount of $2,500 inclusive of disbursements payable by the respondents in one bill. I would also reverse the order for costs in favour of the respondents on the motion, and direct that costs on the motion be costs in the cause. Beveridge, J.A. Concurred in: Fichaud, J.A. Farrar, J.A. [1] M. J. Herman and G. F. Hayden, Jr., “Issue Estoppel: Mutuality of Parties Reconsidered” (1986), 64 Can. Bar Rev. 437; G. D. Watson, “Duplicative Litigation: Issue Estoppel, Abuse of Process and the Death of Mutuality” (1990), 69 Can. Bar Rev. 623.