In Desmarais v. Eat Your Cake Personal Health Delivery Inc., 2022 BCSC 1566, the plaintiff was a former employee, who had been dismissed for cause, brought a successful employment standards complaint with respect to the dismissal. He also brought a wrongful dismissal action, defended on the basis of just cause. The plaintiff sought to have the defence struck as res judicata pursuant to Rule 9-5(1)(b) and (d). The complaint and civil action were commenced contemporaneously. Both parties had counsel although the defendant elected not to be fully represented for the employment standard process and elected to represent himself with the assistance of counsel for economic reasons and the small amount at stake in the complaint. The Court did not have much sympathy for the argument.
The Court noted that the leading case on whether a determination of an issue by an administrative tribunal is binding in civil litigation is Danyluk v. Ainsworth Technologies Inc. 2001 SCC 44 (CanLII), which sets out a two stage approach to consider when an administrative determination creates issue estoppel, whether the pre-conditions for issue estoppel are present: a) The same question that is before the court has been decided by the tribunal; b) The tribunal decision was of a judicial nature and was final; and c) The parties before the tribunal are the same as the parties before the court.
At the second stage, the Court considers whether to exercise its discretion based on a number of non-exhaustive factors:a) The wording of the statute from which the power to issue the administrative order derives; b) The purpose of the legislation; c) The availability of an appeal; d) The safeguards available to the parties in the administrative procedure; e) The expertise of the administrative decision-maker; f) The circumstances giving rise to the prior administrative proceedings; and g) The potential injustice of applying the doctrine of issue estoppel.
The Court concluded:
[64] The objective at this stage is to ensure that the operation of issue estoppel promotes the orderly administration of justice, but not at the cost of real injustice in the individual case.
[65] In considering the seven Danyluk factors, in my view the decisive issues are:
- The determination by the delegate that the plaintiff was terminated without cause was focused on discrete issues that could be assessed by reviewing documents;
- The critical information lay primarily within the knowledge and or control of the defendant;
- The defendant was provided ample opportunities to provide information, respond to information provided to the delegate by the plaintiff and related parties, and respond to the delegate’s preliminary findings; and
- The defendant was unable to point to any identifiable injustice arising from the process.
[66] In weighing the Danyluk factors I am satisfied that I should exercise my discretion to apply issue estoppel.
The critical issue is whether the absence of identified prejudice is sufficient to overcome the precedents set by Goodkey v. Dynamic Concrete Pumping Inc., 2003 BCSC 546 and Read v. Rimex Supply Ltd., 2021 BCSC 2157.