Supreme Court Applies Cause of Action Estoppel to Prevent Relitigation

SUPREME COURT OF CANADA Citation: [COMPANY]. v. [COMPANY]., 2026 SCC 15 Appeal Heard: October 15, 2025 Judgment Rendered: May 8, 2026 Docket: 41296 Between: [COMPANY] Appellant and [COMPANY]. Respondent Coram: Wagner C.J. and Karakatsanis, [NAME], Rowe, Martin, [NAME], O’Bonsawin and Moreau JJ. Reasons for Judgment: (paras. 1 to 141) Wagner C.J. (Rowe, [NAME], O’Bonsawin and Moreau JJ. concurring) Dissenting Reasons : (paras. 142 to 172) Martin J. (Karakatsanis J. concurring) Dissenting Reasons: (paras. 173 to 257) [NAME] J. Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports . [COMPANY]                                                                    Appellant v. [COMPANY].                                                                                                Respondent Indexed as: [COMPANY]. v. [COMPANY]. 2026 SCC 15 File No.: 41296. 2025: October 15; 2026: May 8. Present: Wagner C.J. and Karakatsanis, [NAME], Rowe, Martin, [NAME], O’Bonsawin and Moreau JJ. on appeal from the court of appeal of [NAME] and labrador Civil procedure — [NAME] of action estoppel — Company defaulting on mortgage — [NAME] purchasing [NAME] under [NAME] of sale proceeds prepared by [NAME] providing for payment of its mortgage ahead of other encumbrances — Accounting challenged by two encumbrancers — Application judge excluding [NAME]’s mortgage from accounting — Company bringing subsequent application for payment of residue from sale proceeds on basis of application judge’s previous decision on accounting — [NAME] arguing that application judge in first proceeding had not definitively determined that it was not [NAME] to payment of its mortgage — [NAME] barred by operation of cause of action estoppel from arguing in second proceeding that it is [NAME] to payment of its mortgage — Whether party has obligation to plead cause of action estoppel at first instance in order to rely on doctrine. [COMPANY]. owned [NAME] that was encumbered by numerous mortgages and other claims. In 2016, [NAME] defaulted on a mortgage held by [COMPANY]. [NAME] commenced [NAME] proceedings, which were suspended when [NAME] agreed to provide [NAME] with a new [NAME] of $4 million on the [NAME]. Several weeks later, [NAME] reactivated [NAME] proceedings under the defaulted mortgage and purchased the [NAME]. As the [NAME] prepared an accounting regarding the sale, in which it set out allocations to pay out several of the mortgages on the [NAME] that it or its affiliates held, including $4 million to pay out its new [NAME]. There were insufficient proceeds to pay out other encumbrancers’ claims that ranked after the $4 million mortgage. In 2016, two encumbrancers commenced applications to challenge [NAME]’s accounting, and sought orders directing [NAME] to pay out their claims (“2016 applications”). [NAME], as [NAME], and [NAME], as [NAME], were listed as respondents. The application judge granted the applications. He reviewed the claims [NAME] included in and excluded from its accounting and reduced the amount [NAME] claimed on several mortgages, excluded the $4 million mortgage from the accounting, and ordered [NAME] to pay out the two encumbrancers’ claims. [ADDRESS] of Appeal dismissed [NAME]’s appeal. In 2019, [NAME] filed an application seeking an order to be paid the residue of the proceeds from the sale of the [NAME] (“2019 application”). In response, [NAME] asserted that, while the $4 million mortgage was disallowed from the accounting in the 2016 applications, it remained a valid contract between [NAME] and [NAME]. Further, [NAME] argued that the 2016 applications did not deal with the situation as between [NAME] and [NAME]. The same application judge rejected [NAME]’s argument, relying on his decision in the 2016 applications to do so, and ordered that the residue of the sale proceeds be paid to [NAME]. [ADDRESS] of Appeal upheld this decision, finding that the doctrine of [NAME] had been properly raised by [NAME] before the application judge and that this doctrine, along with the doctrine of abuse of process by relitigation, applied so as to bar [NAME] from relitigating its claim under the $4 million mortgage. Held (Karakatsanis, [NAME] JJ. dissenting): The appeal should be dismissed. Per Wagner C.J. and Rowe, [NAME], O’Bonsawin and Moreau JJ.: There is a long-recognized obligation on parties to plead and raise [NAME] at first instance. [NAME] satisfied this obligation by properly pleading this doctrine in its written submissions and raising it before the application judge in 2019. Cause of action estoppel precludes [NAME] from challenging the application judge’s original decision on its accounting by arguing its claim for entitlement to payment under the $4 million mortgage. The cause of action at issue in the 2016 applications concerned the need to determine the validity, value, and priority of encumbrances on the [NAME] through a judicial accounting. This is the same cause of action that was at issue in 2019.

Accordingly, [NAME]’s failure in 2016 to advance all reasonably available arguments in defence of its claim to be paid from the sale proceeds is fatal to its ability to raise those arguments in 2019. [NAME] is one of several common law doctrines — along with abuse of process by relitigation — that exist to prevent abuse of the judicial decision-making process. The doctrine provides that a dispute, once decided finally between parties, is not subject to relitigation by those parties. There are two branches of [NAME] : cause of action estoppel and issue estoppel. Cause of action estoppel bars the relitigation of a cause of action by either party, whereas issue estoppel precludes a litigant from rearguing an issue that was fundamental to the decision arrived at in a prior proceeding. The doctrine of [NAME] is founded on two overarching principles of public policy: a litigant’s interest in fairness, and society’s interest in the conclusion of disputes and the finality of judicial decisions. With respect to fairness, [NAME] seeks to prevent the economic and psychological hardship resulting from a litigant being twice vexed in the same cause: it is both unreasonable and unjust to permit a claim to be litigated afresh between parties to a dispute where the claim has been finally decided in a prior proceeding. With respect to finality, [NAME] plays an important societal function by limiting the ability of parties to reopen disputes. Finality is critical not only for the certainty of the parties, but also for the integrity of the judicial process, and [NAME] thus also serves to maintain respect for and public confidence in the administration of justice by guarding against inconsistent results and inconclusive proceedings and by preventing duplicative litigation that drains resources. There is an obligation to plead [NAME] in order to rely on the doctrine. The obligation consists of a requirement to plead the material facts giving rise to the claim of estoppel. It is functional and grounded in the need to ensure that a responding party has notice of the case it must meet and is not taken by surprise by another party’s reliance on the doctrine. A party need not explicitly reference the term “ [NAME] ”; the inquiry into whether [NAME] was properly pleaded should be focused on whether the pleadings were procedurally fair. In contexts where the parties do not provide written pleadings, or where each party submits only one pleading to the court before the matter is heard, a [NAME] may not have an opportunity to plead [NAME] until the hearing takes place. For this reason, the obligation to plead [NAME] has been characterized as an obligation to plead it where there is an opportunity to do so. As a matter of evidence, both the judgment and the pleadings may be relevant indicia of the subject matter of a judicial decision and may assist in illuminating the nature of the cause of action for the purposes of estoppel. In the instant case, [NAME] met its obligation to plead the material facts giving rise to [NAME] in its 2019 application. It reproduced the application judge’s list of the claims he retained and those he excluded from [NAME]’s initial accounting in the 2016 applications decision, along with their priority; it pleaded that [NAME]’s appeal from that decision had been dismissed; and it also appended the 2016 applications decisions of both the application judge and the Court of Appeal to its pleadings. [NAME] also raised [NAME] in oral submissions before the application judge, asserting several times that the matter [NAME] sought to relitigate had already been decided. Further, [NAME]’s pleadings in the context of the 2019 application reflect that it was aware of [NAME]’s position and understood its argument. The implication of [NAME]’s submissions was that the application judge had not exhaustively reviewed its accounting in the 2016 applications decision, and that the $4 million mortgage remained a valid contract; yet this is essentially a reassertion of its claim for payment under that mortgage. As well, during the 2019 application hearing, [NAME]’s submissions directly addressed what was argued and what was decided in the 2016 applications. [NAME]’s assertion that [NAME] did not raise [NAME] because the 2019 application was not decided on that basis should be rejected, as it improperly treats the basis of a decision as being dispositive of the question of whether a particular matter was raised by the parties. How an application was decided and whether a matter was raised are distinct questions. [NAME] pleaded and raised [NAME] at first instance, it is necessary to determine whether [NAME] is barred by cause of action estoppel from rearguing its claim under the $4 million mortgage. There are four requirements for establishing cause of action estoppel: there must be a final decision of a court of competent jurisdiction in a prior action; the parties to the subsequent litigation must have been parties to the prior action; the cause of action in the prior action must not be separate and distinct from the cause of action in the subsequent proceeding; and the basis of the cause of action and of the subsequent action must have been argued or could have been argued in the prior action, if the parties had exercised reasonable diligence. The first and second prongs of the test have already been addressed in other jurisprudence. With respect to the third prong, a cause of action has been defined as a set of facts that provides the basis for an action or as a factual situation entitling a person to relief; thus, determining whether a cause of action raised in a prior proceeding is separate and distinct from the cause of action in the subsequent proceeding necessarily requires an assessment and comparison of the facts in the two actions. With respect to the fourth prong, cause of action estoppel furthers the principle of finality by ensuring that all legal theories arising out of the same facts are put forward in one proceeding; any theory that properly belonged to the first action and that was or could, with reasonable diligence, have been raised at that point is captured by cause of action estoppel. In cases where a party has established all elements of the test for cause of action estoppel, courts maintain a narrow discretion to decline to apply estoppel where doing so would cause an injustice — for instance, where procedural unfairness tainted the first proceeding. [NAME] is meant to promote the orderly administration of justice but not at the cost of real injustice in a particular case. The underlying purpose of the doctrine is to balance the public interest in the finality of litigation with the public interest in ensuring that justice is done. In particular, prudence may be required where the decision said to give rise to [NAME] was rendered in the context of summary procedures, especially where the initial application addressed only a discrete element of a larger dispute, or where a matter was not within the contemplation of the parties at the time of the initial application. Such situations may present appropriate cases for courts to exercise discretion and decline to apply estoppel, although this discretion should be exercised only exceptionally. Ultimately, courts are well suited to recognize other situations where it may be appropriate to exercise discretion and decline to apply the doctrine. The majority of the Court of Appeal was correct in concluding that cause of action estoppel applies in the instant case. The first requirement of the test is met: the application judge’s decision on the 2016 applications is final, because it was upheld on appeal, and leave to appeal the decision of the Court of Appeal was not sought. The second requirement is also clearly met: [NAME] and [NAME] were parties in both the prior and subsequent litigation, notwithstanding that [NAME] was a respondent in both sets of applications in 2016 and 2019, whereas [NAME] was a respondent in one and an applicant in the other — the position of the parties on the record in the two cases is irrelevant. The third requirement for cause of action estoppel is also satisfied. In the 2016 proceedings, the encumbrancers needed to demonstrate the validity, value, and priority of their claims, and [NAME] needed to demonstrate that various claims were properly included in and excluded from its accounting.

Accordingly, the validity, value , and priority of the registered claims on the [NAME] formed the subject matter of the 2016 applications. The application judge’s reasons substantiate this, and his conclusions were challenged and confirmed on appeal. In the 2019 application, [NAME] again needed to demonstrate the validity, value, and priority of claims included in its accounting, such that there would not be sufficient proceeds to pay out [NAME]’s residue. The causes of action in the two sets of proceedings — establishing the validity, value, and priority of the encumbrances on the [NAME] — were identical, and thus not separate and distinct. The final prong of the test is also met: [NAME] could have argued the basis of its defence to the 2019 application in its defence to the 2016 applications. The basis of [NAME] is the theory supporting its accounting and its claim for entitlement to payment under the $4 million mortgage, which was based on evidence that was before the application judge in 2016. This is not an appropriate case in which to exercise discretion and decline to apply cause of action estoppel. In 2016, all parties presented arguments respecting the validity, value, and priority of the encumbrances on the [NAME]. [NAME] was well aware that its claim under the $4 million mortgage was challenged by the other parties, and it had the opportunity in 2016 to fully litigate the matter. Its failure to exercise reasonable diligence and present all arguments supporting that entitlement claim in the 2016 proceedings, and then again on appeal, is not evidence of any procedural unfairness. As well, this is not a case where the initial applications dealt only with small parts of a larger picture; the 2016 applications were commenced to address, and did address, the correctness of [NAME]’s accounting. As such, the validity, the value, and the priority of the included claims were within the initial contemplation of the parties. In light of the conclusion that cause of action estoppel applies in the instant case so as to bar [NAME]’s claim, and because this conclusion is dispositive of the present appeal, it is unnecessary to address the applicability of issue estoppel and abuse of process by relitigation. [NAME] JJ. (dissenting): The appeal should be allowed. There is no reason to establish a special or specific bright-line rule barring a party from raising [NAME] for the first time on appeal. In the instant case, [NAME] did not argue or raise [NAME] before the application judge, but it may do so on appeal. However, even if the test for [NAME] were satisfied, discretion should be exercised to allow [NAME]’s claim to proceed on its merits and the matter should be remitted back to the application judge for decision. It has never been held that [NAME] can be raised only at first instance; the jurisprudence does not provide an answer to this question. Affording appellate courts the discretion to allow parties to raise it for the first time on appeal, when necessary, would harmonize the law of [NAME] with the broader jurisprudence on civil procedure and promote the policy rationales of finality and fairness underpinning the doctrine. It would promote finality by putting an immediate end to duplicative proceedings, preventing inconsistent results, and halting any further use of resources. It can also promote fairness by vindicating the right of all litigants to not be vexed twice, and can provide flexibility to ensure justice is done in each case. To raise [NAME] for the first time on appeal, a party must meet the test that applies whenever a party seeks to raise any new legal issue on appeal: an appellate court may consider a new issue of law on appeal where it is able to do so without procedural prejudice to the opposing party and where refusal to do so would risk an injustice. Applying that test in the instant case, [NAME] should be allowed to raise [NAME] on appeal. There is little risk of procedural prejudice to [NAME], since it did not object to the Court of Appeal considering [NAME] . As well, refusing to consider [NAME] on appeal would risk an injustice and undercut the policy reasons for the doctrine, it would permit [NAME] to potentially undermine a final decision of a court, and it would risk undermining [NAME]’s right not to be repeatedly vexed by the same legal arguments. However, even if [NAME] did apply, discretion should be exercised to let [NAME]’s claim proceed on its merits. A fair and just conclusion on what was decided on the 2019 application cannot be reached with confidence. The lack of clarity in the record calls into question the fairness of applying [NAME] to end [NAME]’s ability to claim and prove any entitlement to funds that it may be owed. The 2016 applications represented a priority dispute between two encumbrancers, on the one hand, and [NAME] on the other; [NAME] brought no claim in those proceedings. As such, [NAME] had no reason to foresee that the 2016 applications would be completely dispositive of its claim for entitlement to its $4 million mortgage, or would permanently disqualify that claim. Thus, relying on [NAME] to bar [NAME]’s claim would be an improper mechanical application of the doctrine. [NAME] J. (dissenting): T he appeal should be allowed and [NAME]’s claim should be remitted for decision on its merits. If [NAME] is not raised at first instance, it cannot be raised for the first time on appeal. In the instant case, [NAME] was not pleaded, raised, or decided in the 2019 application; as a result, [NAME] was estopped from arguing this issue on appeal. In addition, [NAME] and abuse of process by relitigation have no application to [NAME]’s alleged entitlement under the $4 million mortgage. Finally, even if [NAME] were estopped from bringing its claim, discretion should be exercised so as to not apply these doctrines. [NAME] and abuse of process by relitigation are doctrines that protect the administration of justice, safeguard the finality of decisions and promote fairness between the parties by ensuring that, once matters are finally adjudicated by a court, they are not relitigated. If found to apply, [NAME] and abuse of process by relitigation allow courts to dispose of a case or issue without assessing its merits. These doctrines emerge from two primary concerns: finality and fairness. The finality of decisions is essential, as relitigating issues outside the appeal process opens up the possibility of inconsistent findings of fact and the inconsistent application of the law to these facts. Fairness is no less important, as no one should be twice vexed by the same cause or issue; [NAME] should be able to move on, and not expend time, energy, and money to rehash completed disputes. These doctrines are essential, but their application is not without risk. When the matter disposed of was previously within the contemplation of the parties as being before the court for decision, applying these doctrines supports the administration of justice. If, however, the matter was not so decided or the parties were unclear about what was to be decided, a finding of [NAME] or abuse of process can result in a grievous injustice. This risk is heightened in the context of summary proceedings such as applications, which are often conducted quickly, with minimal pleadings, without discovery, and on a primarily paper record. Courts must neither lose sight of the importance of ensuring justice in each case nor forget that, in certain circumstances, relitigation may benefit the administration of justice. The public interest in the finality of litigation must be balanced with the public interest in justice. Finding that [NAME] applies where the matter said to be estopped was not in the contemplation of the parties in the prior proceeding could discourage the use of efficient legal procedures. At the same time, not finding that [NAME] applies where the matter was fully contemplated and decided upon could encourage the use of unnecessary and cumbersome actions. Courts must be cautious, closely scrutinizing the causes of action in both proceedings. A party seeking to raise [NAME] must do so in its pleadings. If this is not possible, [NAME] must be raised at the earliest opportunity, even if this is at the hearing itself. In the absence of a sufficient pleading or raising of [NAME] , it is deemed to be waived. There is a related obligation to raise [NAME] at first instance; if the doctrine must be pleaded or raised as soon as possible, it follows that it must be raised at first instance, and cannot be raised for the first time on appeal. There are several policy reasons for this. First, raising [NAME] only on appeal leaves the appellate court to decide the factually anchored requirements of [NAME] without the benefit of lower court findings. Second, if [NAME] is not raised at first instance in the subsequent proceeding, the parties once more present their case in full and a judge once more decides the case on its merits — thus, a party who was vexed once is vexed again. Third, if [NAME] is raised for the first time on appeal and found to apply, then the judicial resources expended in deciding the merits at first instance are wasted. Fourth, not raising [NAME] at first instance ignores a binding court decision, thus flouting the administration of justice and risking inconsistent findings of fact and law. As such, fairness and finality are undermined when [NAME] is only raised on appeal. These negative consequences are best avoided by refusing to allow parties to raise [NAME] late, when it could and should have been raised as soon as possible. In the present case, [NAME] was not raised in due time, as [NAME] did not plead or properly raise it in the 2019 application. Neither the pleadings, nor the hearing transcript, nor the application judge’s reasons suggest that the issue was raised and decided then. These documents note the prior decision on the 2016 applications, but they do not contain any reference to [NAME] or to the relevant tests or case law, nor any analysis of the similarities or differences between the 2016 and 2019 applications; nor do they suggest that [NAME]’s claim should not be addressed because it is barred by estoppel. Rather, the 2019 application documents indicate that [NAME]’s claim was being argued on its merits and that it was being decided on substantially the same basis as in the 2016 applications. As well, the application judge’s reasons for decision in the 2019 application strongly suggest that he did not decide the matter based on [NAME] , and that [NAME] had not been raised. Instead, he was addressing [NAME]’s alleged entitlement on its merits and merely using the rationale he provided in the 2016 applications as the basis for his decision. Even if [NAME] was raised in the decision on the 2019 application, there would be no way to determine whether the application judge’s analysis was based on issue estoppel, cause of action estoppel, or abuse of process by relitigation, as he provided no analysis of these doctrines nor any of the necessary factual and legal determinations. Having not been raised or decided at first instance, [NAME] cannot be raised on appeal. It was thus an error of law for the Court of Appeal to address [NAME] ; [NAME] is barred from raising it on appeal, and [NAME]’s claim should be addressed on its merits. In addition, [NAME]’s other arguments must also fail. First, cause of action estoppel does not apply, as the cause of action underlying [NAME]’s claim under the $4 million mortgage is separate and distinct from the causes of action brought by the encumbrancers in 2016 and by [NAME] in 2019, based on t he material facts and relationships in each proceeding. In addition, it is unclear whether cause of action estoppel could apply at all, since [NAME] only advanced a claim for payment for the first time in the 2019 application; it cannot be estopped from bringing forward a cause of action when it has never brought that claim before. Second, issue estoppel does not apply either, since [NAME]’s claim was not adjudicated in the 2016 applications; and, even it had been, that adjudication would not have been essential or necessary to decide the encumbrancers’ claims. Third, because there has been no relitigation of its claim, [NAME]’s actions do not amount to abuse of process by relitigation, a doctrine which should be applied sparingly and only in the clearest of cases; in the present case, there is no basis for concluding that judicial economy, consistency, finality, or the integrity of the administration of justice would be harmed. Cause of action estoppel, like issue estoppel and abuse of process by relitigation, is discretionary — even where its test is met, a judge retains the discretion to not apply it. This provides courts with the flexibility necessary to ensure that justice is done in each case, as there may be instances where relitigation will enhance, rather than impeach, the integrity of the judicial system, where the bar against relitigation would create unfairness. However, the discretion is not unlimited; it must be constrained, understood narrowly, and used only in rare cases. It is necessarily case specific and depends on the circumstances and realities of each case. In the instant case, even if cause of action estoppel, issue estoppel, or abuse of process by relitigation had applied, discretion should be exercised so as to not apply any of those doctrines. A lack of clarity surrounding what was decided in the 2016 and 2019 applications increases the potential for injustice, raises questions of procedural fairness, and raises a significant doubt as to the justice of barring [NAME]’s claim. There would also be an apparent windfall for [NAME]: if [NAME]’s claim were barred, not only would it receive nothing for its $4 million mortgage, but [NAME] would gain $4 million. Balancing the public interest in finality with the public interest in justice justifies allowing [NAME]’s claim to proceed on its merits. Cases Cited By Wagner C.J. Distinguished: [COMPANY]. v. [COMPANY]. (No. 2) (1992), 6 O.R. (3d) 506; considered: [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460; Grandview v. Doering , [1976] 2 [NAME].R. 621; Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313; General Motors of Canada Ltd. v. Naken , [1983] 1 [NAME].R. 72; referred to: Davies v. McMillan (1892), [NAME] 306; Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611; [COMPANY]. v. 2009861 [COMPANY]. (1994), 119 [NAME]. (4th) 713; [NAME]) v. [NAME]., Local 79 , 2003 SCC 63, [2003] 3 [NAME].R. 77; [NAME] v. [COMPANY]. , 1997 NSCA 153, 162 N.S.R. (2d) 321; Angle v. M.N.R. , [1975] 2 [NAME].R. 248; [NAME] v. Commissioner of Taxation , [1926] A.C. 155 ; [NAME] v. [NAME] (1920), 50 [NAME]. 435; [NAME] v. [NAME] (Regional Police Services Board) , 2013 SCC 19, [2013] 2 [NAME].R. 125; New Brunswick Ry. Co. v. British and French Trust Corporation , [1939] A.C. 1; [NAME]) v. [NAME] , 2011 SCC 52, [2011] 3 [NAME].R. 422; [NAME] ([NAME]) v. [NAME] (1998), 41 O.R. (3d) 257, leave to appeal refused, [1999] 1 [NAME].R. xiv; Ontario v. [NAME]. , 2003 SCC 64, [2003] 3 [NAME].R. 149 ; Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 ; [NAME] v. Canada (Attorney General) , 2011 SCC 56, [2011] 3 [NAME].R. 535; [NAME] v. [NAME] (1931), 66 O.L.R. 583 ; Baxter v. Derkasz (1929), 2 [NAME]. 443; [NAME] v. [COMPANY] , 1987 ABCA 95 , 39 [NAME]. (4th) 111 ; [NAME] , 2006 BCCA 524, 232 [COMPANY]A.C. 249; Canada v. [NAME] , 2021 FCA 6 , 456 [NAME]. (4th) 536; Brown v. Yates (1877), 1 O.A.R. 367; Miller v. Weldon (1871), 13 N.B.R. 188; Mann v. Mann (1974), 1 O.R. (2d) 416; Farwell v. The Queen (1894), 22 [NAME].R. 553 ; Phosphate Sewage Company v. Molleson (1879), 4 App. Cas. 801; [NAME] Co., Ltd. v. V/O Exportchleb , [1965] 2 All E.R. 4; [NAME] v. Government of Manitoba (1987), 38 [NAME]. (4th) 32; [COMPANY]. v. [NAME] , 2008 MBCA 24, 290 [NAME]. (4th) 712 ; [COMPANY]., Re , 2011 BCCA 180, 17 [NAME]. (5th) 60; [NAME] v. [NAME]) , 2012 NSCA 110, 357 [NAME]. (4th) 275 ; [NAME] v. [COMPANY]. , 2004 NLCA 46, 243 [NAME]. (4th) 153; [COMPANY]. v. [COMPANY]. , 2014 ABCA 320, 5 Alta. L.R. (6th) 268; [NAME] v. [COMPANY]. ([COMPANY]) , 2021 ONCA 141, 457 [NAME]. (4th) 530 ; [NAME] v. Canada , 2003 SCC 9, [2003] 1 [NAME].R. 94; Letang v. Cooper , [1964] 2 All E.R. 929; Cahoon v. Franks , [1967] [NAME].R. 455; Air Canada v. McDonnell Douglas Corp. , [1989] 1 [NAME].R. 1554; Poucher v. Wilkins (1915), 33 O.L.R. 125; [NAME] v. [COMPANY]. , 1999 ABCA 231, 176 [NAME]. (4th) 309; [COMPANY]. v. [COMPANY] , 2023 BCCA 393, 488 [NAME]. (4th) 110 ; Lehndorff Management Ltd. v. L.R.S. Development Enterprises Ltd. (1980), 19 [NAME]. 59 ; [NAME] v. [NAME] , 2018 BCCA 177, 13 [NAME]. (6th) 350; [COMPANY]. v. [COMPANY]. , 2019 ONCA 354, 145 O.R. (3d) 759; [NAME] v. [NAME] , 2013 NLCA 62, 343 Nfld. & P.E.I.R. 68; [NAME] v. [COMPANY] , 2025 ONCA 830; [COMPANY]. v. [COMPANY]. , 2008 BCSC 756, 294 [NAME]. (4th) 290 ; [NAME], Executrix of the will of [NAME] v. [NAME] , 2003 BCSC 937; 420093 [COMPANY]. v. Bank of Montreal , 1995 ABCA 328, 128 [NAME]. (4th) 488; Hall v. Hall and Hall’s Feed & Grain Ltd. (1958), 15 [NAME]. (2d) 638; [NAME] v. [NAME] , 2013 BCCA 76, 356 [NAME]. (4th) 634; [COMPANY]. v. Kellogg Co. of [COMPANY]. , [1939] [NAME].R. 329; [NAME] v. [COMPANY]. (No. 2) , [1967] 1 A.C. 853; Arnold v. National Westminster Bank Plc. , [1991] 2 A.C. 93; [NAME] v. [NAME]. (a firm) , [2002] 2 A.C. 1; [NAME] v. [COMPANY] ., 2003 BCSC 1718, 38 C.C.P.B. 16 , rev’d 2004 BCCA 142, 237 [NAME]. (4th) 260 ; Young v. Young , [1993] 4 [NAME].R. 3; [NAME] v. [COMPANY] of Upper Canada , 2018 SCC 27, [2018] 1 [NAME].R. 772; Schwisberg v. Perry Krieger & Associates (1997), 33 O.R. (3d) 256. By Martin J. (dissenting) [COMPANY]. v. [NAME] & [COMPANY]. , 2002 SCC 19 , [2002] 1 [NAME].R. 678; [NAME] , 2015 SCC 41, [2015] 3 [NAME].R. 3; [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460; [NAME]) v. [NAME] , 2011 SCC 52 , [2011] 3 [NAME].R. 422 ; [NAME] , 2006 BCCA 524, 232 [COMPANY]A.C. 249; Davies v. McMillan (1892), [NAME] 306; Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611; [COMPANY]. v. [COMPANY]. , 2006 FCA 323, [2007] 3 F.C.R. 588; [COMPANY]. v. [NAME] , 2015 NSCA 13, 355 N.S.R. (2d) 324; [NAME] v. Her Majesty the Queen in Right of the Province of Manitoba , 2019 MBCA 78, [2019] 8 W.W.R. 567; [NAME]) v. [NAME]., Local 79 , 2003 SCC 63, [2003] 3 [NAME].R. 77; Angle v. M.N.R. , [1975] 2 [NAME].R. 248; [NAME] v. [NAME] (Regional Police Services Board) , 2013 SCC 19 , [2013] 2 [NAME].R. 125 . By [NAME] J. (dissenting) [NAME]) v. [NAME] , 2011 SCC 52, [2011] 3 [NAME].R. 422; [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460; [NAME] v. [COMPANY]. , 1997 NSCA 153, 162 N.S.R. (2d) 321; [NAME] v. [COMPANY]. , 2011 BCCA 367, 340 [NAME]. (4th) 733; [NAME]) v. [NAME]., Local 79 , 2003 SCC 63, [2003] 3 [NAME].R. 77; [NAME] v. [NAME] , 2025 SKCA 45; [NAME] v. [NAME] , 2006 BCSC 795, 27 E.T.R. (3d) 82; [COMPANY]. v. [NAME] , 2008 NBQB 190, 332 N.B.R. (2d) 234; Cameron v. Hull (1913), 9 [NAME]. 843; Re Knowles , [1938] 3 [NAME]. 178; Hammill Estate v. McDonell (1994), 3 E.T.R. (2d) 300; [NAME] v. [COMPANY]. , 2003 BCSC 1718, 38 C.C.P.B. 16, rev’d 2004 BCCA 142, 237 [NAME]. (4th) 260; Davies v. McMillan (1892), [NAME] 306; Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611; Miller v. Weldon (1870), 13 N.B.R. 188; Brown v. Yates (1877), 1 O.A.R. 367; Feversham v. Emerson (1855) , 11 Ex. 385, 156 E.R. 881 ; [COMPANY]. v. [COMPANY]. , 2006 FCA 323, [2007] 3 F.C.R. 588; [NAME] v. [NAME] , 2016 BCCA 424, 62 B.L.R. (5th) 196; [NAME] v. [COMPANY] , 1987 ABCA 95, 39 [NAME]. (4th) 111; [NAME] , 2006 BCCA 524 , 232 [COMPANY]A.C. 249 ; Canada v. [NAME] , 2021 FCA 6, 456 [NAME]. (4th) 536; Mann v. Mann (1974), 1 O.R. (2d) 416; [COMPANY]. v. [NAME] , 2015 NSCA 13 , 355 N.S.R. (2d) 324 ; [NAME] v. Her Majesty the Queen in Right of the Province of Manitoba , 2019 MBCA 78 , [2019] 8 W.W.R. 567 ; R. v. [NAME] , 2002 SCC 26, [2002] 1 [NAME].R. 869; [COMPANY]. v. [COMPANY]. , 2019 ONCA 354, 145 O.R. (3d) 759; [COMPANY]. v. [NAME] , 2008 MBCA 24, 290 [NAME]. (4th) 712; [NAME] v. [COMPANY]. , 2017 ONCA 369; Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313; Grandview v. Doering , [1976] 2 [NAME].R. 621; [COMPANY]., Re , 2011 BCCA 180, 17 [NAME]. (5th) 60; [NAME] v. [COMPANY]. , 2004 NLCA 46, 243 [NAME]. (4th) 153; [COMPANY]. v. [COMPANY]. , 2014 ABCA 320, 5 Alta. L.R. (6th) 268; [NAME] v. [COMPANY]. ([COMPANY]) , 2021 ONCA 141, 457 [NAME]. (4th) 530; Lehndorff Management Ltd. v. L.R.S. Development Enterprises Ltd. (1980), 19 [NAME]. 59 ; [COMPANY] v. [NAME] , 2015 SCC 60, [2015] 3 [NAME].R. 801; [NAME] v. Canada , 2003 SCC 9, [2003] 1 [NAME].R. 94; Air Canada v. McDonnell Douglas Corp. , [1989] 1 [NAME].R. 1554; Hall v. Hall and Hall’s Feed & Grain Ltd. (1958), 15 [NAME]. (2d) 638; Smode v. Deveaux (1996), 216 A.R. 20; McIntosh v. Parent , [1924] 4 [NAME]. 420; Angle v. M.N.R. , [1975] 2 [NAME].R. 248; [NAME] v. [NAME] , 2006 NLCA 3, 253 Nfld. & P.E.I.R. 1; Fieldbloom v. Olympic Sport Togs Ltd. (1955), 63 Man. R. 47; Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481; General Motors of Canada Ltd. v. Naken , [1983] 1 [NAME].R. 72; [NAME]) v. Canadian Union of Public Employees, Local 79 (2001), 55 O.R. (3d) 541; Schweneke v. Ontario (2000), 47 O.R. (3d) 97; Ontario (Attorney General) v. Bear Island Foundation (1999), 126 O.A.C. 385; 574095 [COMPANY]. v. [NAME]. , 2003 ABCA 34, 10 Alta. L.R. (4th) 23; [NAME] v. [NAME] , 2007 BCCA 547, 288 [NAME]. (4th) 380; [NAME] v. [NAME] , 2009 NSCA 107, 282 N.S.R. (2d) 376; [NAME] v. [NAME] , 2012 BCCA 286, 33 [NAME]. (5th) 251; [NAME] v. [NAME] , 2008 BCCA 223, 80 [NAME]. (4th) 290; [NAME] v. Co‑operators [COMPANY] , 2006 NBCA 54 , 298 N.B.R. (2d) 44 ; [NAME]) v. Canadian Union of Public Employees, Local 1188 , 2007 NBCA 18, 313 N.B.R. (2d) 147. [COMPANY] of Court , Alta. Reg. 124/2010, r. 13.6(2)(a). Conveyancing Act , R.S.N.L. 1990, c. C-34, ss. 2, 5, 10, 11, 14. Court of King’s Bench Rules , Man. Reg. 553/88 , r. 25.06. Mechanics’ Lien Act , R.S.N.L. 1990, c. M-3. Rules of Civil Procedure , R.R.O. 1990, Reg. 194, r. 25.06 . Rules of Court , N.B. Reg. 82-73, r. 27.06(1). Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D, r. 14.03. [NAME]., and [NAME]. Canadian Civil Procedure Law , 2nd ed. Markham, Ont.: LexisNexis, 2010. [NAME]. Estoppels and the Substantive Law , 4th ed. Calcutta: Butterworth, 1915. [NAME]. [NAME]: Tools for Plaintiffs and Defendants . Connecticut: [NAME], 1988. [NAME] and [NAME]: [NAME] , 5th ed. London: LexisNexis, 2019. [NAME], W. S. A History of English Law , vol. IX, 3rd ed. London: [NAME]., 1944. [NAME], J. A. “‘General ideas’ and the reform of civil procedure” (1983), 3 Legal Stud. 295. [NAME], Donald J. The Doctrine of [NAME] in Canada , 5th ed. Toronto: LexisNexis, 2021. [NAME], Sidney N., [NAME] and [NAME]. [NAME]: The Law of Evidence in Canada , 6th ed. Toronto: LexisNexis, 2022. [NAME], Adrian. [NAME] on Civil Procedure: Principles of Practice , 3rd ed. London: [NAME], 2013. APPEAL from a judgment of the [NAME] of Appeal (Hoegg, [NAME] JJ.A.), 2024 NLCA 11 , [2024] N.J. No. 85 (Lexis), 2024 CarswellNfld 102 (WL), affirming a decision of [NAME]. , 2020 NLSC 99, [2020] N.J. No. 152 (Lexis), 2020 CarswellNfld 180 (WL). Appeal dismissed, Karakatsanis, [NAME] JJ. dissenting. [NAME] and [NAME] , K.C. , for the appellant. [NAME] , for the respondent. The judgment of Wagner C.J. and Rowe, [NAME], O’Bonsawin and Moreau JJ. was delivered by The Chief Justice — I.                Overview [ 1 ]                              This appeal affords an opportunity to examine the contours of cause of action estoppel. Cause of action estoppel prevents the relitigation of a cause of action that was or should have been argued in a prior proceeding. This doctrine has individual and societal purposes; it guards against abuse of the judicial decision-making process and protects parties from duplicative litigation ( [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460, at para. 20). In these ways, cause of action estoppel plays a vital role in the Canadian legal system. [ 2 ]                              In this case, cause of action estoppel arises in the context of several interrelated proceedings dealing with the proceeds from the exercise of a [NAME] under a defaulted mortgage. The main question before us is whether the appellant, [COMPANY], is barred by operation of cause of action estoppel from arguing that it is [NAME] to be paid $4 million out of the proceeds from the [NAME] of a [NAME] encumbered by several mortgages and other claims. [NAME] claims that this amount is payable under a mortgage it held on the [NAME]. A preliminary question relates to the obligation to plead cause of action estoppel at first instance. [ 3 ]                              In 2016, two parties holding encumbrances on the [NAME] applied for a review of [NAME]’s accounting of the sale proceeds (“2016 applications”). The application judge rendered a decision in 2017, in which he excluded several claims from the accounting, notably a $4 million mortgage held by [NAME]. In 2019, the [NAME] of the [NAME] sold under the [NAME], the respondent, [COMPANY]., brought an application seeking an order that an unrelated encumbrance be paid out and that [NAME] receive the surplus from the sale proceeds (“2019 application”). [NAME] argued that the application judge in 2017 had not definitively determined that it was not [NAME] to payment from the sale proceeds under the $4 million mortgage. [ 4 ]                              The same application judge rejected [NAME]’s argument and relied on his findings from 2017 to do so. A majority of the [NAME] of Appeal upheld his decision, finding that the doctrine of [NAME] had been properly raised before the application judge and that the same doctrine, along with the doctrine of abuse of process by relitigation, applied to bar [NAME] from relitigating its claim for entitlement to payment from the sale proceeds under the $4 million mortgage. [ 5 ]                              In my view, the majority of the Court of Appeal was correct to uphold the application judge’s decision on the 2019 application. [ADDRESS] has long recognized an obligation on parties to plead and raise [NAME] at first instance ( Davies v. McMillan (1892), [NAME] 306 ([NAME].C.), at p. 317; Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611, at p. 620). [NAME] satisfied this obligation, properly pleading [NAME] in its written submissions and raising the doctrine before the application judge in 2019. [ 6 ]                              Moreover, the majority of the Court of Appeal was correct to conclude that cause of action estoppel precludes [NAME] from challenging the application judge’s original decision on [NAME]’s accounting by raising a new argument to support its claim for entitlement to payment under the $4 million mortgage. The cause of action at issue in the 2016 proceedings concerned the need to determine the validity, value, and priority of encumbrances on the [NAME] through a judicial accounting. This is the same cause of action that was at issue in [NAME]’s 2019 application.

Accordingly, [NAME]’s failure in 2016 to advance all reasonably available arguments in defence of its claim for entitlement to be paid from the sale proceeds is fatal to its ability to raise those arguments in defence of this position in 2019. [ 7 ]                              Because cause of action estoppel provides a full answer to this appeal, it is unnecessary to address [NAME]’s arguments respecting the applicability of issue estoppel and abuse of process by relitigation to the facts of this case. I would accordingly dismiss the appeal.

II.             Relevant Statutory Provisions [ 8 ]                              The [NAME] Act , R.S.N.L. 1990, c. C-34, provides the statutory backdrop to the proceedings in this case. Section 5 of the Conveyancing Act permits [NAME] to sell a [NAME] under a [NAME] where the mortgage money has become due: 5. (1) [NAME], where the mortgage is made by deed, shall have the following powers to the same extent as if they had been conferred by the mortgage deed: (a) a power, where the mortgage money, whether principal or interest, has become due, to sell or to concur with another person in selling the [NAME] , or a part of the [NAME], either subject to prior charges or not, and either together or in lots by public auction or by private contract, subject to the conditions respecting title, or evidence of title or other matter, that the [NAME] thinks appropriate, with power to vary a contract for sale, and to buy in at an auction, or to rescind a contract for sale, and to resell without being answerable for a loss occasioned by the resale; [ 9 ]                              Section 14 of the Conveyancing Act provides direction on the order in which the proceeds of a [NAME] are to be distributed. Of particular relevance to this appeal is s. 14(3), which provides that the residue of money received pursuant to a [NAME] shall be paid to the [NAME]: (3) The money that is received by the [NAME] arising from the sale, after the discharge of prior encumbrances to which the sale is not made subject, shall be held by him or her in trust to be applied (a) 1st, in payment of all costs, charges and expenses properly incurred as incident to the sale or an attempted sale, or otherwise; (b) secondly, in discharge of the mortgage money, interest and costs, and other money due under the mortgage; and (c) the residue of the money received shall be paid to the [NAME] , or authorized to give receipts for the proceeds of the sale of the [NAME]. [ 10 ]                          Section 10 provides that, after a [NAME] has been exercised, the [NAME] must prepare an accounting of the sale of the [NAME]: 10. [NAME] shall prepare an accounting of the sale of a [NAME] , whether by way of public auction or public tender or at a sale by private contract, including a copy of the appraisal of the [NAME] and shall send a copy to the [NAME] and another registered encumbrancer or guarantor within 30 days from the date of the completion of the sale. An accounting provides a breakdown of the money received from the [NAME]. It demonstrates how the sale proceeds were distributed and whether there were proceeds remaining after payments were made. As section 10 of the Conveyancing Act indicates, a copy of the accounting must be sent to the [NAME] as well as to any other registered encumbrancers on the [NAME]. [ 11 ]                          A [NAME] or other registered encumbrancer who is dissatisfied with the accounting the [NAME] prepared may apply to a judge for relief under s. 11 of the Conveyancing Act :

11. A [NAME] and another registered encumbrancer or guarantor who is dissatisfied with an accounting given by [NAME] under section 10 may apply to a judge for whatever relief that the judge may think appropriate in the circumstances to grant.

III.          Background [ 12 ]                          [NAME] owned [NAME] in a real estate development called [NAME]. Its [NAME] was encumbered by numerous mortgages and other claims, a few of which bear mentioning: (a)    A company called [COMPANY]. held a mechanic’s lien worth roughly $705,000 from work done on the [NAME]; (b)    An individual named [NAME] held two collateral mortgages collectively worth $225,000 on the [NAME]; and (c)    An individual named [NAME] held a mortgage worth $150,000 on the [NAME]. [ 13 ]                          [NAME] or a person affiliated with [NAME] claimed other encumbrances on [NAME]’s [NAME], including five “directions to pay”, directing a total of over $1.1 million to be paid to [NAME] or its affiliates from the proceeds of any sale of the [NAME]. [NAME] or an affiliate of [NAME] also held several mortgages on the [NAME]. [ 14 ]                          Among these mortgages was one granted by [NAME] to provide collateral security for an amount of $1.875 million that [NAME] had advanced to [NAME]. In early 2016, [NAME] defaulted on this mortgage. [NAME] commenced [NAME] proceedings under s. 5 of the Conveyancing Act , but later reached an agreement with [NAME] to suspend the proceedings. Under this agreement, [NAME] would provide [NAME] with a [NAME] “to the limit of” $4 million on the [NAME] (A.R., vol. II, at p. 415). This mortgage secured [NAME]’s guarantee of an unrelated mortgage worth roughly $10 million over other properties, which was also held by [NAME] and its affiliates. [ 15 ]                          Several weeks after this agreement was reached, [NAME] reactivated the [NAME] proceedings under the $1.875 million mortgage. At a public auction conducted pursuant to the [NAME] purchased the [NAME]. As the [NAME] of the [NAME] was required by s. 10 of the Conveyancing Act to prepare an accounting regarding the sale and to provide a copy to all registered encumbrancers on the [NAME] and to [NAME] as the [NAME] of the $1.875 million mortgage. [ 16 ]                          In its accounting, [NAME] included allocations to pay out several of the mortgages it or its affiliates held on the [NAME], along with allocations for the five directions to pay. It also included $4 million to pay out the $4 million mortgage.

Accordingly, there were insufficient proceeds to pay out the encumbrancers’ claims that ranked after the $4 million mortgage in [NAME]’s accounting. In particular, the claims held by [NAME], and [NAME] could not be paid out. For the same reason, there was no residue. [ 17 ]                          [NAME] and [NAME] commenced applications under s. 11 of the Conveyancing Act , challenging [NAME]’s accounting and seeking orders directing [NAME] to pay out their claims.

IV.          Judicial History [ 18 ]                          [NAME]’s accounting, [NAME] and [NAME] commenced applications under s. 11 of the Conveyancing Act . [NAME] and [NAME] argued that their claims ranked higher in priority than other claims [NAME] planned to pay out from the sale proceeds and sought orders directing [NAME] to pay out their claims. [NAME], the [NAME], and [NAME], the [NAME], were both listed as respondents to these applications. A.            Supreme Court of [NAME], 2017 NLTD(G) 167, 79 C.L.R. (4th) 127 ([NAME].) [ 19 ]                          The application judge granted [NAME] and [NAME]’s applications. In reaching this decision, the judge reviewed [NAME]’s accounting, including the validity, the value, and the priority of the claims [NAME] included in and excluded from the accounting. The application judge reduced the amount [NAME] claimed on several mortgages it or its affiliates held. He excluded all five directions to pay from the accounting, finding that they were not “encumbrances” as defined in s. 2 of the Conveyancing Act . He also excluded the $4 million mortgage from the accounting. According to the application judge, the $4 million mortgage acted as collateral security for up to $4 million for [NAME]’s guarantee of the $10 million mortgage, meaning that a lesser amount of money could actually be owing under the $4 million mortgage. Given that [NAME] failed to complete any analysis of the amount, if any, owing under the mortgage, it could not pay itself out from the sale proceeds under this mortgage . [ 20 ]                          After the application judge excluded these claims from [NAME]’s accounting, there were sufficient funds to pay out [NAME] and [NAME]’s claims. He ordered [NAME] to pay out [NAME] claim and [NAME]’s two collateral mortgages. He also made an order for costs. B.             Court of Appeal of [NAME], 2019 NLCA 69, 94 C.L.R. (4th) 230 (White, [NAME] JJ.A.) [ 21 ]                          [NAME] appealed the application judge’s decision and challenged the exclusion of the $4 million mortgage from its accounting. [NAME] relied on the [COMPANY] of Appeal’s decision in [COMPANY]. v. 2009861 [COMPANY]. (1994), 119 [NAME]. (4th) 713, to argue that a [NAME] (like the $4 million mortgage) could be a valid claim [NAME] to priority in the distribution of the proceeds from a [NAME]. On this basis, it argued that the application judge should not have excluded the $4 million mortgage from the accounting. [ 22 ]                          A panel comprising Justices White, [NAME] unanimously dismissed [NAME]’s appeal. The court rejected [NAME]’s argument, noting that the facts of [COMPANY] were distinct given that the parties in that case had agreed on the amount owing under the [NAME]. In this case, the court observed that the registration cost of the mortgage was “not determinative of the amount actually owing under” it (para. 62).

Accordingly, it affirmed the application judge’s conclusion that the amount owing under the mortgage was not established and that the mortgage should be disallowed from the accounting. Leave was not sought to appeal this decision. C.             Supreme Court of [NAME], 2020 NLSC 99 ([NAME].) [ 23 ]                          Following the 2019 appeal, [NAME] filed an interlocutory application in the same action as the first two applications filed by [NAME] and [NAME] asked the court to order [NAME] to pay [NAME] the amount owing under her mortgage, plus interest, and sought an order for the residue of the sale proceeds. In its application, it reproduced the 2017 decision on [NAME]’s accounting, asserting that since there were no further encumbrances on [NAME]’s [NAME] after [NAME]’s, it was [NAME] to the remaining balance of the sale proceeds. In response, [NAME] acknowledged that the $4 million mortgage was disallowed by the application judge’s decision on its accounting, but asserted that it remained a valid contract between [NAME] and [NAME]. Further, it argued that the application judge in 2017 and the Court of Appeal in 2019 did not deal with the “situation” between [NAME] and [NAME]. [ 24 ]                          The application judge reaffirmed the conclusion he reached in the 2017 decision — that the $4 million mortgage should be disallowed from [NAME]’s accounting. He noted that the Court of Appeal had accepted his conclusion in the 2019 appeal, and he confirmed that he had been “shown nothing to cause [him] to change [his] mind on [the] issue” (para. 25). [ 25 ]                          The application judge went on to order that sale proceeds in the amount owing under [NAME]’s mortgage be paid to [NAME] and that the residue of the proceeds be paid to [NAME]. D.            Court of Appeal of [NAME], 2024 NLCA 11 ([NAME] JJ.A., Hoegg J.A. Dissenting) [ 26 ]                          [NAME] appealed. Previously, [NAME] had argued that a [NAME] could be a valid claim [NAME] to priority in distributing the proceeds from the [NAME]. On this basis, given that its $4 million mortgage was a valid [NAME], it was [NAME] to include the value of the mortgage in its accounting. [ 27 ]                          [NAME] advanced a new argument before the Court of Appeal supporting why it was [NAME] to have the $4 million mortgage paid out from the sale proceeds: that the sale of the [NAME] under the [NAME] was a “legal action” under clause (h) of the $4 million mortgage document, the relevant portions of which state: . . . in the event of any legal action being taken against the said lands and premises such that the security given herein may be put in jeopardy . . . then, and in every such case, the entire principal sum and all other monies outstanding under the documents evidencing the indebtedness and hereunder shall, at the option of the [NAME], become immediately due and payable . . . . (A.R., vol. II, at p. 417) [ 28 ]                          [NAME] argued that the sale of the [NAME] constituted a legal action jeopardizing the security that [NAME] had provided to [NAME] and thus constituted a default under clause (h), rendering the $4 million payable by [NAME] to [NAME]. To support the argument that the full $4 million under the mortgage was owed, [NAME] pointed to unchallenged affidavit evidence that was before the application judge in 2016 establishing that the amount outstanding on the loan that [NAME] guaranteed was well over $4 million and thus that the full amount of the $4 million mortgage guaranteeing that amount was owed. [ 29 ]                          A majority of the court dismissed the appeal. In separate reasons, [NAME] held that the doctrines of [NAME] and abuse of process by relitigation were fatal to the success of [NAME]’s appeal. Both found that the doctrines of cause of action estoppel, issue estoppel, and abuse of process by relitigation applied to prevent [NAME] from rearguing its claim for entitlement to payment from the sale proceeds under the $4 million mortgage. Neither would have exercised discretion to decline to apply these doctrines. Further, both held that [NAME] had properly pleaded and raised cause of action estoppel and issue estoppel before the application judge. [ 30 ]                          Justice Hoegg dissented, finding that the application judge had erred in not finding that the $4 million mortgage became payable, in full, upon the sale of the [NAME]. She further held that issue estoppel and abuse of process by relitigation could not be raised for the first time on appeal and that neither doctrine was met even if they could have been raised. Even if the preconditions to establish the applicability of the doctrines were met, Justice Hoegg would have exercised her discretion to decline their application. She did not address whether cause of action estoppel applied to bar [NAME] from rearguing its claim for entitlement to payment from the sale proceeds under the $4 million mortgage.

V.            Issues [ 31 ]                          The main issue in this appeal is whether [NAME] is barred from relitigating its claim for entitlement to payment from the sale proceeds under the $4 million mortgage. This raises three questions. First, did [NAME] properly plead [NAME] in 2019? Second, did [NAME] properly raise [NAME] before the application judge in 2019? Third, was [NAME] barred by cause of action estoppel, issue estoppel, or abuse of process by relitigation from arguing that it was [NAME] to payment under the $4 million mortgage before the application judge in 2019? I will address each question in turn.

VI.          Analysis [ 32 ]                          [NAME] is one of several common law doctrines — including the doctrine of collateral attack and the doctrine of abuse of process by relitigation — that exist to prevent abuse of the judicial decision-making process ( [NAME] , at para. 20; [NAME]) v. [NAME]., Local 79 , 2003 SCC 63, [2003] 3 [NAME].R. 77, at para. 22). The doctrine provides that a dispute, once decided finally between parties, is not subject to relitigation by those parties ( [NAME] , at para. 20; [NAME] v. [COMPANY]. , 1997 NSCA 153, 162 N.S.R. (2d) 321, at para. 21). [ 33 ]                          There are two branches of [NAME] : cause of action estoppel and issue estoppel ( Angle v. M.N.R. , [1975] 2 [NAME].R. 248, at p. 254; [NAME]) , at para. 23). Cause of action estoppel bars the relitigation of a cause of action by either party, whereas issue estoppel precludes a litigant from rearguing an issue that was “fundamental to the decision arrived at” in a prior proceeding ( [NAME] , at p. 255, citing [NAME] v. Commissioner of Taxation , [1926] A.C. 155 (P.C.), at p. 165). [ 34 ]                          [NAME] is and has long been a rule of evidence ([NAME] and [NAME]: The Law of Evidence in Canada (6th ed. 2022), at ¶19.86). Historically, when [NAME] became part of English law in the 12th century, it was referred to as estoppel by matter of record — that is, estoppel arising from the written record of a court ( [NAME] ; [NAME], A History of English Law (3rd ed. 1944), vol. IX, at p. 147; [NAME]: Tools for Plaintiffs and Defendants (1988), at p. 7). Matters “solemnly recorded” by the court had to be “accepted as proof, so that no averment to contradict them [could] be received” ([NAME], at p. 147). In this sense, estoppel by matter of record permitted the admission of a court’s decision as proof of the findings contained therein (p. 147). A plea of estoppel involved producing the decision said to give rise to the estoppel in the subsequent proceeding to allow a court to conclude that the matters at issue in the prior proceeding were the same matters at issue in that proceeding ([NAME], Estoppels and the Substantive Law (4th ed. 1915), at p. 460). [ 35 ]                          While now referred to as [NAME] , the doctrine remains a rule of evidence that applies to estop a party from introducing evidence to contradict a result that has been decided in a prior proceeding ([NAME], at ¶19.86). [ 36 ]                          [NAME] is a rule of evidence, it is designed to advance the interests of justice ( [NAME] , at para. 19). The doctrine is founded on two overarching principles of public policy: a litigant’s interest in fairness, and society’s interest in the conclusion of disputes and the finality of judicial decisions ( [NAME]) , at para. 38; Grandview v. Doering , [1976] 2 [NAME].R. 621, at p. 636, citing [NAME] v. [NAME] (1920), 50 [NAME]. 435 (N.S.[NAME].), at pp. 437-38; [NAME] and [NAME]: [NAME] (5th ed. 2019), at p. 4). [ 37 ]                          With respect to the first principle, [NAME] seeks to prevent the economic and psychological hardship resulting from a litigant being “twice vexed in the same cause” ( [NAME]) , at para. 50, citing G. D. Watson, “Duplicative Litigation: Issue Estoppel, Abuse of Process and the Death of Mutuality” (1990), 69 Can. Bar Rev. 623, at p. 633; see also [NAME] v. [NAME] (Regional Police Services Board) , 2013 SCC 19, [2013] 2 [NAME].R. 125, at para. 28). It is both unreasonable and unjust to permit a claim to be litigated afresh between parties to a dispute where the claim has been finally decided in a prior proceeding ([NAME], at p. 4, citing New Brunswick Ry. Co. v. British and French Trust Corporation , [1939] A.C. 1 ([NAME].)). In this way, [NAME] focuses on the interests of the parties ( [NAME]) , at para. 32). [ 38 ]                          In addition to the individual focus of [NAME] , the doctrine plays an important societal function. Our legal system places a high value on the finality of judicial decisions, an objective achieved by limiting the ability of parties to reopen disputes ( [NAME] , at para. 18; [NAME]) v. [NAME] , 2011 SCC 52, [2011] 3 [NAME].R. 422, at para. 34; [NAME] ([NAME]) v. [NAME] (1998), 41 O.R. (3d) 257 (C.A.), leave to appeal refused, [1999] 1 [NAME].R. xiv). Finality is critical not only for the certainty of the parties, but also for the integrity of the judicial process ( [NAME] , at para. 77). [NAME] also serves to maintain respect for and public confidence in the administration of justice by guarding against inconsistent results and inconclusive proceedings ( [NAME] , at para. 18). Indeed, [NAME] gives judicial decisions an authority they would not have if they were subject to constant reassessment and variation ( [NAME] ). [ 39 ]                          To advance the objective of finality, [NAME] “requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so” ( [NAME] , at para. 18). As I will explain below, in the context of cause of action estoppel, [NAME] requires a litigant to have advanced all arguments at the first proceeding that it could have had it exercised reasonable diligence. In this sense, a litigant is [NAME] only to one kick at the can (para. 18). [ 40 ]                          Importantly, [NAME] advances the objective of finality regardless of the correctness in law or fact of the prior decision that gives rise to the estoppel ([NAME], at p. 6). This gives effect to the principle that a judicial decision made by a competent court is final and conclusive unless corrected on appeal (p. 6). For this reason, the correctness of a prior decision is not a relevant factor in determining whether [NAME] applies to bar relitigation. [ 41 ]                          While not its primary purpose, [NAME] performs an additional societal function in facilitating access to justice. It does so by preventing duplicative litigation that drains court resources and the resources of the litigants ( [NAME] , at para. 18). [ 42 ]                          Closely related to the doctrine of [NAME] is the doctrine of abuse of process by relitigation. [NAME] and abuse of process by relitigation advance the policy grounds of finality and fairness ( [NAME]) , at para. 38). However, abuse of process “transcends the interests of litigants and focuses on the integrity of the entire system” ( Ontario v. [NAME]. , 2003 SCC 64, [2003] 3 [NAME].R. 149, at para. 12). [ 43 ]                          The doctrine of abuse of process derives from a court’s inherent jurisdiction to manage its own procedures, and it applies based on a judge’s appreciation of the impact of relitigation on the repute of the administration of justice. Abuse of process by relitigation is often invoked where the strict preconditions to apply one of the branches of [NAME] are not met, but where permitting relitigation of an issue or cause of action would nonetheless constitute a misuse of a court’s procedures ( [NAME]) , at para. 37). In this sense, while abuse of process is “unencumbered” by the technical requirements of [NAME] , it should be applied as a last resort to protect the repute of the administration of justice (para. 37, citing Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting). It is “only when the rules of [NAME] run out that it is useful to turn to” the doctrine of abuse of process ([NAME] on Civil Procedure: Principles of Practice (3rd ed. 2013), at p. 1244). [ 44 ]                          These principles provide context for the following analysis of the three issues on appeal. I will treat the first and second issues together, before proceeding to address the third. A.            [NAME] and [NAME] at First Instance [ 45 ]                          The first question before us is whether [NAME] pleaded [NAME] before the application judge in 2019. This involves assessing whether [NAME] pleaded the necessary facts in its written submissions to support a claim of [NAME] . [NAME] argues that [NAME] did not plead [NAME] . It suggests that this is contrary to the well-founded obligation to plead [NAME] at first instance. In contrast, [NAME] submits that it satisfactorily pleaded [NAME] before the application judge. On the second question, [NAME] argues similarly that [NAME] did not raise [NAME] before the application judge at the 2019 hearing, instead doing so for the first time before the Court of Appeal. For the reasons I set out below, I do not accept [NAME]’s submissions. I am satisfied that [NAME] pleaded and raised [NAME] before the application judge in 2019. I thus find it unnecessary to address the question that divides my colleagues, [NAME], as to whether [NAME] can be raised for the first time on appeal. (1)           Governing Principles [ 46 ]                          Since the late 1800s, courts have shifted away from the “technical and complex” rules that historically applied to pleadings, under which parties had to plead a specific form of common law action, each with its own pleading rules ([NAME] and [NAME], Canadian Civil Procedure Law (2nd ed. 2010), at §10.15). Canadian provinces abolished this form of pleading in favour of “fact pleading” toward the end of the 19th century ([NAME], “‘General ideas’ and the reform of civil procedure” (1983), 3 Legal Stud . 295, at p. 301; see also [NAME], at §10.15). This shift removed the “straight-jacket” of the forms of action approach to pleadings ([NAME], at p. 301). [ 47 ]                          Modern pleadings must contain a statement of the material facts on which a party relies to make out its claim for relief, rather than precisely identify all causes of action or rules of law pleaded ([NAME], at p. 301; see also [COMPANY] of Court , Alta. Reg. 124/2010, r. 13.6(2)(a); Court of King’s Bench Rules , Man. Reg. 553/88, r. 25.06; Rules of Civil Procedure , R.R.O. 1990, Reg. 194, r. 25.06; Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D, r. 14.03; Rules of Court , N.B. Reg. 82-73, r. 27.06(1)). This approach to pleadings is functional and favours the substance of what is pleaded over its form ([NAME], at p. 301). In this way, pleadings serve to define the points at issue in a proceeding and to give “opposing parties fair notice of the case to meet” ( [NAME] v. Canada (Attorney General) , 2011 SCC 56, [2011] 3 [NAME].R. 535, at para. 43). The overarching consideration when determining whether a matter has been properly pleaded is thus functional and seeks to ensure that parties are not taken by surprise. [ 48 ]                          There is an obligation to plead [NAME] . One of this Court’s first affirmations of this obligation arose in [NAME] , where this Court remarked that: . . . the plea [of estoppel] should contain suitable averments of what was the precise matter in contestation in such interpleader issue and of what is the precise matter in contestation in the present action so as to raise for adjudication the question of estoppel relied upon by the defendant. [p. 317] A few years later, in [NAME] , this Court reiterated the obligation to plead [NAME] , remarking that “ [NAME] as a defence, or as a reply to a counter claim, must be specially pleaded” (p. 620). [ 49 ]                          The obligation to plead [NAME] flows from the principles of civil litigation outlined above. The pleading obligation consists in a requirement to plead the material facts giving rise to the claim of estoppel. A party need not explicitly reference the term “ [NAME] ”. While evidentiary rules, like other rules of law, are generally not pleaded, the requirement to plead [NAME] is grounded in the need to ensure that a responding party has notice of the case it must meet and is not taken by surprise by another party’s reliance on the doctrine. The pleading requirement is functional and grounded in the notion of procedural fairness, irrespective of the procedural vehicle — action or application — in which [NAME] arises. The inquiry into whether [NAME] was properly pleaded should thus remain focused on whether the pleadings were procedurally fair for the parties involved ( [NAME] v. [NAME] (1931), 66 O.L.R. 583, at p. 584). [ 50 ]                          Just as in [NAME] , cases in which the obligation to plead [NAME] was considered have generally focused on the applicability of this obligation to defendants to an action or respondents to an application (see, e.g., Baxter v. Derkasz (1929), 2 [NAME]. 443 ([NAME].), at p. 449; [NAME] v. [COMPANY] , 1987 ABCA 95, 39 [NAME]. (4th) 111, at p. 121; [NAME] , 2006 BCCA 524, 232 [COMPANY]A.C. 249, at para. 21; Canada v. [NAME] , 2021 FCA 6, 456 [NAME]. (4th) 536, at para. 30). There is good reason for this. A [NAME] will in most cases become aware of the need to plead [NAME] when it receives the plaintiff’s or applicant’s pleadings. Upon receipt of these pleadings, the [NAME] will be in a position to plead [NAME] in response to the claim alleged against it. [ 51 ]                           This is not to say that a [NAME] never has an obligation to plead [NAME] . However, and in contrast to a [NAME], a [NAME] bringing an action or application is not expected to know what defences a [NAME] will raise, and whether those defences will give rise to a claim that [NAME] applies, when it files its originating process. Typically, “the facts that are pleaded by a party must be material at the time when they are pleaded, which means that a plaintiff should not anticipate possible defences in [the] statement of claim ” ([NAME], at §10.17 (emphasis added)). [ 52 ]                          For this reason, the obligation to plead [NAME] has been characterized as an obligation to plead it where there is an opportunity to do so ( Brown v. Yates (1877), 1 O.A.R. 367 (Ont. C.A.); Miller v. Weldon (1870), 13 N.B.R. 188 ([NAME].); Mann v. Mann (1974), 1 O.R. (2d) 416 (H.C.J.)). This characterization is particularly important in the context of applications, some of which may not involve a formal exchange of pleadings between the parties and a formal submission of pleadings to the court. In contexts where the parties do not provide written pleadings, or where each party submits only one pleading to the court before the matter is heard, a [NAME] may not have an opportunity to plead [NAME] until the hearing takes place. In such circumstances, the question then becomes whether it raised [NAME] at the earliest opportunity, even if the only opportunity to do so was at the hearing of the application. [ 53 ]                          As a matter of evidence, parties pleading [NAME] should put both the decision from the prior proceeding, along with any pleadings exchanged, before the court in the subsequent proceeding in which [NAME] is raised. Both the formal judgment and the pleadings may be relevant indicia of the subject matter of a judicial decision and may assist in illuminating the nature of the cause of action for the purposes of cause of action estoppel ([NAME], at p. 106). Further, the fact that a party has put the formal judgment or the pleadings before the subsequent court may support a conclusion that a party pleaded [NAME] . (2)           Application to This Case [ 54 ]                          Applying the principles discussed above to this case, I am satisfied that [NAME] pleaded [NAME] in its 2019 application. [ 55 ]                          This appeal arises from an interlocutory application filed in the actions that [NAME] and [NAME] commenced under s. 11 of the Conveyancing Act . [NAME] and [NAME] exchanged only one set of pleadings. As the applicant, [NAME] would not have been required to anticipate in its pleadings what [NAME] would respond to its application. Nevertheless, a review of [NAME]’s application reveals that it pleaded the material facts giving rise to its claim that [NAME] applied. In its application, it reproduced the application judge’s decision on which claims he retained (and, necessarily, those he excluded) from [NAME]’s initial accounting, along with their priority (A.R., vol. II, at p. 7). It pleaded that [NAME]’s appeal from this accounting had been dismissed (p. 8). In addition, [NAME] appended both the 2017 decision of the application judge and the 2019 decision of the Court of Appeal to its pleadings (p. 5). These facts were sufficient to give rise to the plea of [NAME] . [ 56 ]                          Further, [NAME] must have understood [NAME]’s argument — that the claims [NAME] to be paid from the sale proceeds had already been decided — because it argued several times in its written response to [NAME] that the application judge and the Court of Appeal “did not deal with the situation between” [NAME] and [NAME], and it reproduced excerpts of both decisions in support of this position (A.R., vol. II, at pp. 63-64). It continued, arguing that the application judge “did not deal” with the mortgage granted to [NAME] in the 2017 decision because there was no information before him about that mortgage (p. 65). The implication of this submission was that [NAME] did not apply because the application judge had not exhaustively reviewed the accounting in the 2017 decision. [NAME] also argued that the $4 million mortgage remained “a valid contract and agreement” between itself and [NAME] (p. 61). This argument is essentially a reassertion of its claim for entitlement to payment under the $4 million mortgage. [ 57 ]                          I am unpersuaded by the suggestion that [NAME] must not have pleaded [NAME] because it did not reference the doctrine by name. As discussed above, the obligation to plead [NAME] is functional. Parties must plead facts and are not required to precisely identify causes of action or rules of law. For this reason, the failure to explicitly reference the terms “ [NAME] ” or “estoppel” is not fatal to [NAME]’s position that it properly pleaded the necessary facts in 2019 to raise the doctrine. [ 58 ]                          In sum, I am satisfied that [NAME] met its obligation to plead the material facts giving rise to [NAME] . [NAME]’s pleadings reflect that it was aware of [NAME]’s position. [ 59 ]                          I turn now to the second question. In addition to arguing that [NAME] did not properly plead [NAME] argues that [NAME] impermissibly raised [NAME] for the first time in 2024, before the [NAME] of Appeal. I reject this submission. The transcript of the hearing of the 2019 application reveals that [NAME] raised [NAME] in oral submissions before the application judge. [ 60 ]                          [NAME] asserted several times during the oral hearing that the matter [NAME] sought to relitigate had already been decided: As you noted, Justice, this is an application by [NAME] . . . for confirmation of monies owed to the . . . [NAME] from the [NAME] proceeds and, Justice, you heard this matter previously, so I’m not going to belabour the facts. You’ve heard them all; you’ve decided on them. . . . Our position with respect to that is that you considered these arguments at trial already, the Court of Appeal has also heard these arguments and agreed with you that [the $4 million] mortgage . . . should not be considered in account whatsoever. . . . You have already ruled on this matter before and the Court of Appeal ruled on it as well. These arguments were made in front of the Court of Appeal. (A.R., vol. II, at pp. 518, 523 and 534) [ 61 ]                          During the hearing, the application judge asked [NAME] to respond to these submissions, and [NAME] did so (A.R., vol. II, at p. 530). It argued that the application judge, in his 2017 decision, had found only that the $4 million mortgage lost priority to [NAME] and [NAME]’s claims (p. 530). As [NAME] explained: We weren’t talking about the relationship between [NAME] and [COMPANY]; we talking [ sic ] about their priorities of the [NAME], the — and the [NAME] mortgages. That’s what we were talking [ sic ]. Now, that issue of the obligations and the contracts that were entered into between [NAME] and [COMPANY] was not the issue. There was no decision saying that these agreements were not effective and that [NAME] didn’t owe the money. (p. 530) These submissions are quite clearly directed at addressing what was argued in the 2016 proceedings and what was decided in the 2017 decision arising from those proceedings. [ 62 ]                          In support of its assertion that [NAME] did not raise [NAME] argues that the 2019 application was not decided on the basis of the doctrine. In my view, this submission improperly treats the basis on which the application judge decided the 2019 application as being dispositive of the question of whether a particular matter was raised by the parties. How an application was decided and whether a matter was raised are distinct questions. As I have set out above, I am satisfied, based on my review of the transcript of the hearing of the application, that the doctrine was raised by [NAME] and discussed by both parties at the hearing. [ 63 ]                          For these reasons, I do not accept [NAME]’s argument that [NAME] raised [NAME] for the first time on appeal. B.             Cause of Action Estoppel Applies to [NAME] From Relitigating Its Claim for Entitlement to Payment Under the $4 Million Mortgage [ 64 ]                          Having concluded that [NAME] raised [NAME] at first instance, I turn now to the third question on appeal: whether [NAME] is barred by [NAME] or the doctrine of abuse of process by relitigation from rearguing its claim for entitlement to payment from the sale proceeds under the $4 million mortgage. A majority of the Court of Appeal found that the doctrines of cause of action estoppel, issue estoppel, and abuse of process all applied to prevent [NAME] from relitigating its claim for entitlement to payment under the $4 million mortgage. [ 65 ]                          As I explain below, I agree with the conclusion of the majority of the Court of Appeal that cause of action estoppel applies in this case. In light of this conclusion, it is unnecessary to address the applicability of the other two doctrines that [NAME] raises on appeal. As discussed above, cause of action estoppel and issue estoppel are two branches of the overarching doctrine of [NAME] ; where one provides a full answer, addressing the other is unnecessary. While the majority of the Court of Appeal also applied the doctrine of abuse of process by relitigation, I decline to do so, noting as I did above that the doctrine should be applied sparingly and is relevant only where the technical requirements of [NAME] are not made out. (1)           Governing Principles [ 66 ]                          The seminal case on cause of action estoppel is the English decision of Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313. In an oft-cited passage, Vice Chancellor Wigram of the [ADDRESS] of Chancery explained that: . . . where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case . . . The plea of [NAME] applies , except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of the litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time . (Emphasis added; p. 319.) This description of [NAME] — as barring the relitigation of points raised in a prior proceeding, along with points that the parties might have raised had they exercised reasonable diligence — formed the basis of the doctrine of cause of action estoppel when it was first applied by this Court in Farwell v. The Queen (1894), 22 [NAME].R. 553, at p. 558: Where the parties (themselves or privies) are the same, and the cause of action is the same, the estoppel extends to all matters which were, or might properly have been, brought into litigation . [Emphasis added.] [ 67 ]                          The leading authority from this Court on cause of action estoppel is the case of [NAME] . In 1969, [NAME] sued [NAME] of [NAME] in nuisance. In this first action, [NAME] alleged that the municipality’s replacement of a dam raised river water levels, causing the river to flood his land. [NAME] was [NAME] in this action. Nine months later, he commenced a new action in nuisance, alleging that the dam caused his land to become saturated with water through an underground aquifer. This theory was based on an expert opinion [NAME] sought after the dismissal of the first action. [ 68 ]                          Writing for a majority of this Court, Justice Ritchie held that [NAME]’s second claim was barred by cause of action estoppel. Justice Ritchie concluded that the facts [NAME] alleged as constituting the tortious conduct in the second action existed when the first action went to trial. The only change between the first and second action was the expert opinion about the flow of water from the dam through the aquifer. However, Justice Ritchie found that the aquifer theory of liability properly belonged to the first action. Justice Ritchie drew on several English authorities in reaching this conclusion, ultimately endorsing the rule in [NAME] that cause of action estoppel applies not only to matters which were brought forward in the prior proceeding, but also to matters which properly belonged to that proceeding (see [NAME] ; New Brunswick Ry. ; Phosphate Sewage Company v. Molleson (1879), 4 App. Cas. 801 ([NAME].); [NAME] Co., Ltd. v. V/O Exportchleb , [1965] 2 All E.R. 4 (C.A.)). [ 69 ]                          The rule flowing from [NAME] is that cause of action estoppel bars the relitigation of a cause of action that is not separate and distinct from one raised in a prior proceeding. The estoppel bars both matters raised in the prior proceeding and matters that properly formed part of the proceeding and which the parties might have brought forward at the time had they exercised reasonable diligence. The breadth of cause of action estoppel reflects that the doctrine is geared toward preventing litigation in installments ([NAME], at ¶19.116). [ 70 ]                          With these principles in mind, I turn now to the relevant considerations when determining whether litigation of a matter is barred by cause of action estoppel. [ADDRESS]’s decision in [NAME] did not formalize a test, but courts interpreting the decision have gleaned four requirements from Justice Ritchie’s analysis ( [NAME] v. Government of Manitoba (1987), 38 [NAME]. (4th) 32 (Man. K.B.), at p. 34; see also [COMPANY]. v. [NAME] , 2008 MBCA 24, 290 [NAME]. (4th) 712; [COMPANY]., Re , 2011 BCCA 180, 17 [NAME]. (5th) 60; [NAME] v. [NAME]) , 2012 NSCA 110, 357 [NAME]. (4th) 275; [NAME] v. [COMPANY]. , 2004 NLCA 46, 243 [NAME]. (4th) 153; [COMPANY]. v. [COMPANY]. , 2014 ABCA 320, 5 Alta. L.R. (6th) 268; [NAME] v. [COMPANY]. ([COMPANY]) , 2021 ONCA 141, 457 [NAME]. (4th) 530). As outlined in [NAME], at ¶19.116, the four requirements for establishing cause of action estoppel are: There is a final decision of a court of competent jurisdiction in a prior action; The parties to the subsequent litigation were parties to, or in privy with the parties to the prior action; The cause of action in the prior action is not separate and distinct; and The basis of the cause of action and the subsequent action were argued or could have been argued in the prior action, if the parties had exercised reasonable diligence. The first and second prongs of the test are common to cause of action estoppel and issue estoppel and have thus been addressed in other jurisprudence of this Court (see [NAME]) ; [NAME] ; [NAME] ). The latter two prongs merit additional explanation. (a)            Defining a “Cause of Action” [ 71 ]                          A cause of action has been variously defined as a set of facts that provides the basis for an action or as a factual situation entitling a person to relief ( [NAME] v. Canada , 2003 SCC 9, [2003] 1 [NAME].R. 94, at para. 27, citing Letang v. Cooper , [1964] 2 All E.R. 929 (C.A.); Cahoon v. Franks , [1967] [NAME].R. 455, at p. 459; Air Canada v. McDonnell Douglas Corp. , [1989] 1 [NAME].R. 1554, at p. 1564). In [NAME] , this Court defined a cause of action as “every fact which it would be necessary for the plaintiff to prove, if disputed, in order to support his or her right to the judgment of the court” (para. 54, citing Poucher v. Wilkins (1915), 33 O.L.R. 125 (C.A.)). [ 72 ]                          Thus, determining whether a cause of action raised in a prior proceeding is “separate and distinct” necessarily requires an assessment and comparison of the facts in the first action and the subsequent action, given that these facts “form the ‘cause’ of the ‘action’” ( [COMPANY]. , at para. 23, citing [NAME] v. [COMPANY]. , 1999 ABCA 231, 176 [NAME]. (4th) 309, at para. 27). [ 73 ]                          Cause of action estoppel bars subsequent proceedings covering the same subject matter and arising out of the same relationship between the parties, even if the subsequent action is based on a different legal description or conception of the issues ( [COMPANY]. v. [COMPANY] , 2023 BCCA 393, 488 [NAME]. (4th) 110, at para. 27, citing Lehndorff Management Ltd. v. L.R.S. Development Enterprises Ltd. (1980), 19 [NAME]. 59 (C.A.); [NAME] v. [NAME] , 2018 BCCA 177, 13 [NAME]. (6th) 350, at para. 9). Cause of action estoppel can arise anytime a substantive claim is granted or refused ([NAME], at p. 98). [ 74 ]                          The basis of a cause of action can be understood as the theory that explains how the cause of action — that is, the set of facts — entitles a party to relief ([NAME], at ¶19.120; see also [COMPANY]. v. [COMPANY]. , 2019 ONCA 354, 145 O.R. (3d) 759). In this way, cause of action estoppel furthers the principle of finality by ensuring that all legal theories arising out of the same facts are put forward in one proceeding. Any theory that properly belonged to the first action and that was or could, with reasonable diligence, have been raised at that point is captured by cause of action estoppel ([NAME], at ¶19.116). [ 75 ]                          As the fourth prong of the test was initially conceptualized, cause of action estoppel would bar the relitigation of any matters that were raised or could have been raised with reasonable diligence in the prior proceeding. Generally, courts have applied this prong of the test as written (see, e.g., [NAME] ; [NAME] ; [COMPANY]. ; [COMPANY]. ). However, in [NAME] , Justice Cromwell (as he then was) suggested that the word “could” was too broad, writing that “[t]he better principle is that those issues which the parties had the opportunity to raise and, in all the circumstances, should have raised, will be barred” (para. 37 (emphasis in original)). [ 76 ]                          In my respectful view, the reasonable diligence qualifier is sufficient to ensure that litigants are not held to an unrealistic standard and ultimately barred from raising an argument in a second proceeding that they could not have reasonably been expected to raise in the prior proceeding. For example, as I explain below, the reasonable diligence qualifier will preclude the application of cause of action estoppel where circumstances such as fraud, dishonesty, or the discovery of new evidence explain why a party did not raise a matter in a first proceeding. [ 77 ]                          In summary, then, the test for cause of action estoppel is as follows: (a)    There is a final decision of a court of competent jurisdiction in the prior action; (b)    The parties to the subsequent litigation were parties to or in privy with parties to the prior action; (c)    The cause of action in the prior action is not separate and distinct; and (d)    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 had exercised reasonable diligence. (b)           Discretion [ 78 ]                          In cases where a party has established all elements of the test for applying cause of action estoppel, there remains the question of whether a court has discretion to decline to apply the doctrine. In the court below, Justice Butler held that there is discretion to not apply cause of action estoppel (para. 122). [NAME], concurring in the result, was more equivocal about the existence of discretion, but concluded regardless that this case did not present an appropriate context in which to exercise it (paras. 370-73). [ 79 ]                          As I alluded to above, the fourth prong of the test for cause of action estoppel guards against the application of the doctrine in cases where a party could not reasonably have advanced a particular theory, for instance, because new evidence did not exist or could not reasonably have been discovered at the time of the first proceeding. With that said, I accept that courts maintain a narrow discretion to decline to apply cause of action estoppel where the formal prerequisites are made out but where applying it would nonetheless cause an injustice. [ 80 ]                          [NAME] is meant to “promot[e] the orderly administration of justice but not at the cost of real injustice in the particular case” ( [NAME] , at para. 67). With this in mind, this Court has previously addressed the circumstances in which, notwithstanding that the preconditions to apply issue estoppel are made out, the doctrine should not be applied. In [NAME] , this Court cautioned against applying issue estoppel “mechanically”, explaining that the underlying purpose of the doctrine is to “balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case” (para. 33). To this end, this Court held that issue estoppel requires a two-step analysis: first, a court must ask whether the test for issue estoppel is satisfied, and then it must assess whether the estoppel ought to apply (see para. 33). [ADDRESS] went on to set out a non-exhaustive series of factors governing the exercise of discretion as it applies to issue estoppel where the prior decision was made by an administrative tribunal (see para. 67 et seq.). [ 81 ]                          [ADDRESS]’s jurisprudence does not provide as clear an answer to the question of whether there is a discretion to not apply cause of action estoppel in the context of court proceedings. In [NAME] , Justice Ritchie cited a passage from New Brunswick Ry. , at pp. 20-21, explaining when “exceptional circumstances” may warrant not applying cause of action estoppel (p. 639): In my view not all estoppels are “odious”; but the adjective might well be applicable if a defendant, particularly if he is sued for a small sum in a country distant from his own, is held to be estopped not merely in respect of the actual judgment obtained against him, but from defending himself against a claim for a much larger sum on the ground that one of the issues in the first action (issues which he never saw, though they were doubtless filed) had decided as a matter of inference his only defence in the second action. On the facts of [NAME] , Justice Ritchie held that there were no “exceptional circumstances” because the question of whether [NAME] of [NAME]’s maintenance of the dam caused flooding on [NAME]’s land was “thoroughly explored” in the first proceeding (p. 639). [ 82 ]                          While this passage from [NAME] would seem to support the existence of discretion to not apply cause of action estoppel, Justice Ritchie did not specify whether the circumstances identified by the House of Lords in New Brunswick Ry. represented a situation where cause of action estoppel did not apply by virtue of the exercise of discretion, or where it did not apply because its prerequisites were simply not made out. [ 83 ]                          Several appellate courts have interpreted [NAME] as supporting the latter possibility (see, e.g., [NAME] v. [NAME] , 2013 NLCA 62, 343 Nfld. & P.E.I.R. 68, at para. 56; [NAME] , at paras. 40-44). To the description of “exceptional circumstances” in [NAME] that justify not applying cause of action estoppel, these courts have added situations where fraud or dishonesty tainted the first proceeding, or where new evidence was discovered following the first proceeding ( [NAME] , at para. 52; see also [COMPANY]. , at para. 33). However, these courts explained that these considerations were not exceptions to cause of action estoppel and instead “define[d] the parameters for its operation” ( [NAME] , at para. 56). In other words, cause of action estoppel simply does not apply in these circumstances — not because a judge has exercised discretion to not apply the doctrine, but because the doctrine’s prerequisites are not made out. [ 84 ]                          In addition to [NAME] , this Court’s decision in General Motors of Canada Ltd. v. Naken , [1983] 1 [NAME].R. 72, at p. 101, rendered almost a decade later, is often cited as an authority for the existence of discretion. In [NAME] , Justice Binnie relied on the decision to conclude that there was “no doubt” that discretion existed to not apply issue estoppel (para. 62). Ultimately, though, [NAME] was not a case about issue estoppel or cause of action estoppel. The question on appeal was whether an action against a car manufacturer could proceed as a class action under the rules of practice in place at that time for the Supreme Court of Ontario. Discussing the implications of allowing the action to proceed as a class action, this Court remarked on the possibility that [NAME] could be raised to affect the rights of other individuals who sustained injuries from the car in question. In this context, this Court stated that “there is a discretion in the courts where the defence of [NAME] is raised”, but it cautioned that such discretion was “very limited in application” (p. 101 (emphasis added)). [ 85 ]                          Some appellate and trial courts have since relied on [NAME] and [NAME] for the proposition that there is discretion to decline to apply cause of action estoppel ( [NAME] v. [COMPANY] , 2025 ONCA 830, at para. 33, fn. 8, and paras. 45 and 53; [COMPANY]. , at para. 52; [COMPANY]. v. [COMPANY]. , 2008 BCSC 756, 294 [NAME]. (4th) 290, at para. 56; [NAME], Executrix of the will of [NAME] v. [NAME] , 2003 BCSC 937, at para. 29). [ 86 ]                          In the years after [NAME] and [NAME] were decided, trial and appellate courts formalized a test for cause of action estoppel. As discussed above, the fourth prong of this test asks whether a party should have argued the basis for a cause of action at the first proceeding. In my view, this prong of the test guards against the application of cause of action estoppel in circumstances like those identified by appellate courts — that is, where the first proceeding was tainted by fraud or dishonesty, or where new evidence was discovered after the first proceeding. These are non-exhaustive examples of situations where the fourth prong of the test for cause of action estoppel may not be met. [ 87 ]                          With that being said, I accept that courts maintain a limited discretion to decline to apply cause of action estoppel where the preconditions to apply the doctrine are met but where applying it would nonetheless cause an injustice. For instance, it might be appropriate to decline to apply cause of action estoppel if the stakes in the first proceeding were “too minor to generate a full and robust response” ( [NAME]) , at para. 53). It might also be appropriate to decline to apply estoppel where procedural unfairness tainted the first proceeding ( [NAME] , at para. 42). [ 88 ]                          My colleague [NAME] points to the importance of exercising caution when applying [NAME] in the context of applications. I agree that prudence may be required where the decision said to give rise to [NAME] was rendered in the context of summary procedures. Courts must exercise caution to ensure that parties had a full opportunity to argue the issues in the prior proceeding. Particular caution may be required where the initial application addressed only a discrete element of a larger dispute, or where a matter was not within the contemplation of the parties at the time of the initial application. These situations may present appropriate cases for courts to exercise discretion to decline to apply estoppel if the preconditions to apply the doctrine are otherwise made out. Ultimately, courts are well suited to recognize other situations where it may be appropriate to exercise discretion and decline to apply the doctrine. [ 89 ]                          As this Court observed in [NAME] , the discretion to decline to apply [NAME] is “limited in application” (p. 101). To this, I would add that the discretion to decline to apply cause of action estoppel should be exercised only exceptionally and is narrower than the discretion to decline to apply issue estoppel. This is justified for two reasons. First, the considerations that might justify exercising the discretion to decline to apply issue estoppel are often captured by the fourth prong of the test for cause of action estoppel, leaving only narrow circumstances where the preconditions to apply cause of action estoppel are met but where applying the doctrine would nevertheless be unjust. Indeed, the test for issue estoppel does not incorporate a similar consideration. Second, cause of action estoppel is a more encompassing doctrine than issue estoppel because it precludes the relitigation of an entire cause of action instead of a single issue. For this reason, greater harm is done to the public policy principles of fairness and finality that underlie [NAME] when a court permits the relitigation of a cause of action, as opposed to a single issue. [ 90 ]                          To be clear, my comments above centre on the applicability of cause of action estoppel in the context of court proceedings. As this Court recognized in [NAME] , the operation of [NAME] in the administrative context differs from its operation in the context of court proceedings because of the “enormous range and diversity of the structures, mandates and procedures of administrative decision makers” (para. 62).

Accordingly, [NAME] recognized that the discretion to decline to apply issue estoppel is “necessarily broader” when the proceeding giving rise to the estoppel is administrative, and it outlined a series of factors to guide the exercise of discretion. [ 91 ]                          In this case, cause of action estoppel arises in the context of two interrelated sets of court proceedings. In the absence of a relevant factual backdrop like that which existed in [NAME] , this is not an appropriate case in which to consider how the exercise of discretion to decline to apply cause of action estoppel operates in the administrative context. (c)            Reciprocity [ 92 ]                          Despite what the name “cause of action estoppel” suggests, the doctrine applies equally to the party defending against an action as it does to the party advancing it. Put differently, cause of action estoppel can apply to bar either a claim or a defence from being raised in a subsequent proceeding where it was raised or could have been raised in the prior proceeding. [ 93 ]                          Support for the reciprocal nature of cause of action estoppel is long-standing and well-founded. In [NAME] , an English decision this Court referenced affirmatively in [NAME] , the Court of Appeal described cause of action estoppel in terms that make this clear: . . . there may be several points available which go to aid one party or the other in his efforts to secure a determination of the issue in his favour . The rule then is that each party must use reasonable diligence to bring forward every point which he thinks would help him . If he omits to raise any particular point . . . he may find himself shut out from raising that point again, at any rate in any case where the self-same issue rises in the same or subsequent proceedings. [Emphasis added; p. 9.] [ 94 ]                          The reciprocity of cause of action estoppel is also uncontroversial in Canadian authorities. Justice Cromwell described cause of action estoppel as requiring parties to “bring forward all of the claims and defences with respect to the cause of action at issue” ( [NAME] , at para. 21 (emphasis added)). Similarly, in 420093 [COMPANY]. v. Bank of Montreal , 1995 ABCA 328, 128 [NAME]. (4th) 488, at p. 494, the [COMPANY] of Appeal explained that cause of action estoppel “applies equally to a defendant who must put forward all defences which will defeat the plaintiffs action, and the defendant who does not will be debarred from raising them subsequently” (see also Hall v. Hall and Hall’s Feed & Grain Ltd. (1958), 15 [NAME]. (2d) 638 ([NAME].), at p. 645; [NAME] v. [NAME] , 2013 BCCA 76, 356 [NAME]. (4th) 634, at para. 16). [ 95 ]                          Accordingly, under the fourth prong of the test, a [NAME] who does not raise all theories arising from the cause of action — that is, the set of facts — that it should have in order to demonstrate its entitlement to relief may be estopped from raising them in a subsequent proceeding. There is a reciprocal obligation on a defendant or responding party, who may be barred by cause of action estoppel where that party fails in the first proceeding to raise all theories that could defeat the [NAME]’s claim. (2)           Application to This Case [ 96 ]                          With these principles in mind, I now turn to the question of whether cause of action estoppel applies to bar [NAME] from rearguing its claim for entitlement to payment under the $4 million mortgage. (a)            The 2017 Decision, as Upheld on Appeal, Is a Final Decision of a Court of Competent Jurisdiction [ 97 ]                          The first part of the test for cause of action estoppel asks whether the decision said to create the estoppel is final. A judgment is final even if it could have been appealed but was not, provided that the court issuing the judgment could not reconsider it after it was rendered ([NAME], at ¶19.102). [ 98 ]                          [NAME] does not dispute that this requirement is met. The application judge’s 2017 decision is final, because it was upheld on appeal in 2019. Leave was not sought to appeal the decision of the [NAME] of Appeal. (b)           The Parties to the 2019 Application Were Parties to the 2016 Applications [ 99 ]                          This requirement, dealing with mutuality, asks whether the parties to the decision said to create the estoppel were the same as the parties in the present litigation. In my view, this requirement is clearly met. The parties to the 2016 applications were [NAME] and [NAME], as applicants, and [NAME] and [NAME], as respondents. The parties to the 2019 application were [NAME], as an applicant, and [NAME], as a respondent. [NAME] and [NAME] were thus parties in both the prior and subsequent litigation. [ 100 ]                      Mutuality exists notwithstanding that [NAME] was a respondent in both sets of applications, whereas [NAME] was a respondent in one and an applicant in the other. Provided that both parties in the subsequent litigation were parties in the previous litigation, “[t]he position of the parties on the record in the two cases is irrelevant” ([NAME], at p. 130; see also [COMPANY]. v. Kellogg Co. of [COMPANY]. , [1939] [NAME].R. 329). [ 101 ]                      On appeal, [NAME] argues that [NAME] had “limited participation” in the 2016 applications and subsequent appeal. Similarly, in the context of her analysis of issue estoppel, the dissenting justice in the Court of Appeal acknowledged that [NAME] and [NAME] were both involved in the 2016 and 2019 applications, but held that [NAME]’s “roles were different” (para. 636). [ 102 ]                      In my respectful view, these perspectives are misplaced. The primary concern at this stage of the test is ensuring that a party is not bound to an outcome it did not have a reasonable chance to advocate for in the same capacity as the one in which it is estopped. It is true that the mutuality requirement will not be met where parties or their privies brought or defended a previous proceeding in respect of a different right, which may arise where a party brings a first action as a personal representative and is then subsequently sued in its personal capacity ([NAME], at ¶19.137). However, [NAME] and [NAME] appeared in their own capacity in both sets of proceedings. I thus conclude that the mutuality requirement is met in this case. (c)            The Cause of Action in the 2019 Application Is Not Separate and Distinct From the Cause of Action in the 2016 Applications [ 103 ]                      The third requirement to establish cause of action estoppel is that the cause of action in the prior proceeding not be separate and distinct from the cause of action in the subsequent proceeding. Recall that a cause of action is a set of facts providing the basis for an action, or a factual situation entitling a person to relief. Cause of action estoppel applies where the subsequent action arises out of the same relationship between the parties and the same subject matter as the initial litigation. It is thus necessary to closely examine the factual basis for [NAME] and [NAME]’s applications in 2016, along with the relationship between [NAME] and [NAME] at that stage. [ 104 ]                      After the [NAME] was sold under the [NAME] was statutorily obliged under s. 10 of the Conveyancing Act to provide an accounting to [NAME], the [NAME] of the [NAME], and to all persons with registered encumbrances on the [NAME]. In this accounting, [NAME] listed the claims on the [NAME] it intended to pay out from the proceeds of the sale. More specifically, [NAME] included five directions to pay that it or its affiliates held, along with several mortgages it or its affiliates held, including the $4 million mortgage. In light of its plan to pay out these claims, [NAME] maintained that there were not sufficient sale proceeds to pay out other claims on the [NAME], including [NAME] mechanic’s lien and [NAME]’s two collateral mortgages. [ 105 ]                      The 2016 proceedings were commenced by [NAME] and [NAME] as applications under s. 11 of the Conveyancing Act to challenge [NAME]’s accounting. More specifically, [NAME] and [NAME] sought an order that [NAME] be directed to pay out their claims — a mechanic’s lien and two collateral mortgages, respectively — from the proceeds of the sale of the [NAME]. [ 106 ]                      In order to have their claims included in the accounting and paid from the sale proceeds, [NAME] and [NAME] needed to demonstrate the validity and value of their claims and either that their claims ranked in priority to other claims [NAME] included in its accounting or that other claims [NAME] included were invalid. This was because there were not enough proceeds from the sale of the [NAME] to pay out all of the claims registered on the [NAME]. [ 107 ]                      Conversely, to prevent [NAME] and [NAME]’s claims from being paid out to the detriment of some or all of the claims [NAME] included in its accounting, [NAME] needed to demonstrate that the claims it included in its accounting were properly valued and properly included because of their validity and priority and that the claims it excluded were also properly excluded, either because of their invalidity or lack of priority.

Accordingly, the validity, value, and priority of the registered claims on the [NAME] formed the subject matter of the 2016 applications, providing the basis for [NAME] and [NAME]’s claims and for [NAME]. [ 108 ]                      My colleague [NAME] suggests that the relationships between the parties in the 2016 and 2019 applications were distinct. However, and with great respect to her contrary view, I am concerned that she favours the formal titles applying to the parties over the nature of how they were connected in the two sets of applications. Importantly, [NAME] and [NAME] were adverse in interest in both sets of applications, even if they occupied formally different roles in the 2016 and 2019 applications. It was in [NAME]’s interest to defend the claims it set out in its accounting because it or one of its affiliates held most of these claims. Among these were the five directions to pay, along with several mortgages, including the $4 million mortgage. Thus, [NAME] was not a passive observer or limited participant in the 2016 applications — its interest in payment under the $4 million mortgage was engaged by [NAME] and [NAME]’s claims, and by its defence to them. Conversely, as the [NAME] and thus the party potentially [NAME] to the sale proceeds under s. 14(3) of the Conveyancing Act upon the satisfaction of all other encumbrances, it was in [NAME]’s interest to argue the opposite — that [NAME]’s claims were invalid — in order to maximize the residue of sale proceeds to which it could be [NAME] after the other claims were paid out. [ 109 ]                      The 2019 application arose out of the same facts and subject matter, and the relationship between [NAME] and [NAME] was unchanged. In 2019, [NAME] sought an order that [NAME] pay out [NAME]’s mortgage and that [NAME] pay the residual sale proceeds to [NAME]. To defend against this application, [NAME] again needed to defend its accounting, demonstrating the validity, value, and priority of the claims it included therein, such that there would not be sufficient proceeds to pay out [NAME]’s claim and [NAME]’s residue. [NAME] and [NAME] were again adverse in interest. [ 110 ]                      The causes of action in the two sets of proceedings — establishing the validity, value, and priority of the encumbrances on the [NAME] — were identical. So too was what [NAME] needed to demonstrate in order to defend against [NAME] and [NAME]’s claims and, subsequently, [NAME]’s claim. [ 111 ]                      By 2019, when [NAME] brought its application, these matters had been decided by the application judge in 2017. His reasons in 2017 indicate that the 2016 applications required him to “examine the priorities between the various charges affecting” the [NAME] (para. 3 (emphasis added)). To this end, in order to determine whether [NAME] and [NAME] were [NAME] to have their claims paid out from the sale proceeds, the application judge undertook a full review of the accounting, examining the validity, value, and priority of not only [NAME] and [NAME]’s claims, but also of the other claims [NAME] included. In doing so, the application judge made a series of findings. He concluded that [NAME] mechanic’s lien and [NAME]’s collateral mortgages were valid encumbrances on the [NAME] and that the order in which they would be paid out would depend on their order of registration. He excluded the five directions to pay from [NAME]’s accounting, having found that they were not “encumbrances” as defined in the Conveyancing Act (para. 54). He reduced the amounts [NAME] could claim on several mortgages it or its affiliates held. Finally, the application judge excluded [NAME]’s $4 million mortgage from the accounting. He concluded that [NAME] had given [NAME] a mortgage of “up to” $4 million, and he accepted [NAME]’s argument that [NAME] failed to prove the amount actually owing under the mortgage: In [NAME]’s estimation, no money or a lesser amount than $4,000,000.00 may actually be owing under the mortgage. [COMPANY]. says [COMPANY] should have done a proper analysis if it wished to include any amount from this mortgage to be paid from the [NAME] proceedings. I accept this analysis and make no allowance for this mortgage in the accounting. [Emphasis added; para. 62.] [ 112 ]                      At the end of his reasons, the application judge set out in a table the complete list of claims he determined were valid, their value, and the priority in which they would be paid out from the sale proceeds. The directions to pay and the $4 million mortgage were not included in this table. Having completed a full accounting of the claims on the [NAME], the application judge could conclude that there were sufficient proceeds to pay out [NAME] and [NAME]’s claims. He accordingly ordered that [NAME] pay out both of them from the proceeds. In short, the application judge’s reasons were focused on not only the priorities between the charges on [NAME], but also their value and validity. [ 113 ]                      Importantly, the application judge’s conclusions to this effect were challenged and confirmed on appeal. [ADDRESS] of Appeal held, in its 2019 decision, that the effect of the application judge’s decision in 2017 was to exclude the $4 million mortgage from the accounting, observing that “the Applications Judge did not find that there was sufficient evidence to conclude that [NAME] as guarantor was liable to make payment at the time of the sale” (para. 62). [ 114 ]                      In bringing an application in 2019 for payment under [NAME]’s mortgage and for the residue of the sale proceeds, [NAME] could rely entirely on the application judge’s 2017 determination of the validity, value, and priority of the encumbrances on the [NAME] and on the fact that this determination was upheld on appeal. Similarly, in arguing in the 2019 application that it was [NAME] to payment under the $4 million mortgage, [NAME] was in substance relitigating the same cause of action as that in the 2016 applications that were decided against it. This further demonstrates that the causes of action in the 2016 and 2019 applications were not separate and distinct. To the extent [NAME] disagreed with the application judge’s decision to exclude the $4 million mortgage from the accounting, the proper forum for [NAME] to challenge this decision was on appeal, in 2019. [ 115 ]                      In summary, the proceedings in 2016 and in 2019 both required a judicial determination of the validity, value, and priority of the encumbrances on the [NAME]. In both sets of applications, the material facts [NAME] needed to establish to defend against the claim were the same. And in both sets of applications, [NAME] and [NAME] were adverse in interest. The subject matter of the proceedings and the relationship between the parties were the same in the 2016 and 2019 applications. [ 116 ]                      On appeal to this Court, [NAME] argues that the cause of action in the two sets of proceedings was not the same. It submits that the cause of action in 2016 was a claim for relief by [NAME] and [NAME] and that the application judge’s decision merely resulted in [NAME] losing priority to [NAME] and [NAME]’s claims because of an insufficient accounting of the amount owing under the $4 million mortgage. [NAME] argues that in 2019, [NAME] could not simply rely on a finding that the amount owing under the $4 million mortgage was unknown — it had to establish that the amount owing under the mortgage was nil. [ 117 ]                      I do not accept this argument for two reasons. First, the argument proceeds on an overly narrow view of the meaning of a cause of action — one that focuses on the order or relief granted at the end of a judgment as opposed to the substance of what [NAME] needed to establish and the parties in whose presence it did so. As I have explained above, cause of action estoppel focuses on the material facts the parties needed to prove in order to establish or defend against a claim. It is helpful to recall that [NAME] and [NAME]’s applications were brought because of their disagreements with [NAME]’s accounting. While the order they sought was for them to be paid from the sale proceeds, their claims were grounded in s. 11 of the Conveyancing Act , which provides that “[a] [NAME] and another registered encumbrancer or guarantor who is dissatisfied with an accounting given by [NAME] under section 10 may apply to a judge for . . . relief”. Thus, for both [NAME] and [NAME], and for [NAME], the applications involved demonstrating the validity and value of their claims and the priority of their claims relative to others included in or excluded from the initial accounting. This was the cause of action at issue in the 2016 proceedings, and the application judge’s decision settled both the priority and the amounts of the charges on [NAME]. Come 2019, [NAME]’s claim for relief and [NAME] rested upon the same determinations. [ 118 ]                      Further to this point, I would note the importance of finality in the context of a judicial accounting. English courts have found that a judicial accounting creates cause of action estoppel for all persons party to the accounting (see, e.g., [NAME] ; [NAME] v. [COMPANY]. (No. 2) , [1967] 1 A.C. 853 ([NAME].); Arnold v. National Westminster Bank Plc. , [1991] 2 A.C. 93 ([NAME].); [NAME] v. [NAME]. (a firm) , [2002] 2 A.C. 1 ([NAME].); see also [NAME], at pp. 104-5). A judicial accounting requires the “netting off of all relevant claims” ([NAME], at p. 104). The finality of such an accounting, once completed, is critical to ensuring that parties can rely on the validity, value, and priority of claims established therein in paying out those claims. In this case, allowing [NAME] to relitigate aspects of the application judge’s initial accounting would risk upending the judge’s determination of priorities. At a minimum, this could produce inconsistent judicial findings. At worst, it could result in a conflict in the paying out of claims, given that some parties have already been paid out in reliance on the accounting in the 2017 decision. [ 119 ]                      Second, I cannot accept that [NAME] was unable to rely on the application judge’s finding that the amount owing under the $4 million mortgage was unknown, because the application judge’s finding went much further than [NAME] suggests. The application judge’s reasons are unambiguous that the $4 million mortgage did not merely “lose priority” vis-à-vis [NAME] and [NAME]’s claims — it was disallowed from the accounting. At para. 62 of the application judge’s reasons, the judge stated explicitly that he made “no allowance for this mortgage in the accounting”. One paragraph later, in a table setting out “the allowances for the accounting from the [NAME] proceedings”, the $4 million mortgage is not listed (para. 63). Then, the Court of Appeal confirmed in 2019 that “[t]he Applications Judge disallowed this mortgage entirely from the accounting” (para. 55). [ 120 ]                      The question of whether the application judge was correct to disallow the mortgage from the accounting was the subject of [NAME]’s [NAME] appeal of the application judge’s decision. [NAME] was thus [NAME] to rely on this finding — it had nothing further to prove in order to be [NAME] to the relief it sought. [ 121 ]                      My colleague [NAME] acknowledges that the application judge addressed the $4 million mortgage in his 2017 decision but suggests that the 2016 and 2019 applications dealt with distinct causes of action because [NAME] did not “claim” its entitlement until 2019. [ 122 ]                      With great respect, I am of a different view. [NAME]’s claim for entitlement under the $4 million mortgage was necessarily put in issue by [NAME] and [NAME]’s applications in 2016 and thus was properly part of those proceedings. [NAME] sought to establish that same entitlement in 2019. In both sets of proceedings, [NAME] appeared in a responding role and sought to rely on the same entitlement to answer each claim. [ 123 ]                      For this same reason, I reject [NAME]’s concern that the cause of action estoppel analysis does “not easily fit” this case given that [NAME] has not advanced a claim itself (A.F., at para. 122). Cause of action estoppel can apply both to a plaintiff bringing a claim and to a respondent defending against one. (d)           The Basis of the Cause of Action in the 2019 Application Was Argued or Could Have Been Argued in the 2016 Applications if [NAME] Diligence [ 124 ]                      The final prong of the test asks whether the basis of the cause of action in the 2019 application was or should have been argued in 2016. As discussed above, this prong of the test is designed to prevent litigation in installments, whereby one party withholds a theory from the first action and attempts to use it to ground the second. In my view, this requirement is met. [NAME] should have argued the basis of its defence to the 2019 application in 2016. [ 125 ]                      The basis of a cause of action can be understood as the theory explaining how the cause of action — that is, the set of facts — entitles a party to relief. In this case, the basis of [NAME] is the theory supporting its accounting (and, thus, its claim for entitlement to payment under the $4 million mortgage). [ 126 ]                      In order to demonstrate an entitlement to be paid under the $4 million mortgage, [NAME] needed to show the amount owing under it, along with the mortgage’s validity and priority. Thus, the basis of the cause of action encompassed the arguments [NAME] raised or should have raised in order to show the validity, value, and priority of the $4 million mortgage. [ 127 ]                      In proceedings arising from the 2019 application, the basis for [NAME] was that a clause in the $4 million mortgage document providing for various instances of default was triggered when the [NAME] was sold. In its view, this resulted in the mortgage becoming due immediately upon the exercise of the [NAME]. Along with this, it pointed to unchallenged affidavit evidence that was before the application judge in 2016 establishing that the amount outstanding on the loan [NAME] guaranteed was well over $4 million and thus that the full amount of the $4 million mortgage guaranteeing that amount was owed. This is the theory [NAME] advanced to support its defence to [NAME]’s application. [ 128 ]                      [NAME] did not advance this argument in 2016 in response to [NAME] and [NAME]’s applications. However, [NAME] should have done so. The argument was based in part on the text of the mortgage document and in part on unchallenged affidavit evidence — both of which were before the application judge in 2016. Properly characterized, [NAME]’s argument was not advanced to support a new cause of action, but rather represented a different theory that was properly part of the 2016 proceedings. (e)            Discretion [ 129 ]                      I am similarly satisfied that this is not an appropriate case in which to exercise discretion to not apply cause of action estoppel. In the 2016 proceedings, all parties presented arguments respecting the validity, value, and priority of the encumbrances on the [NAME], including specifically the $4 million mortgage. [NAME] was well aware that its claim for entitlement to payment under the $4 million mortgage was challenged by the other parties to the 2016 applications. It had the opportunity in 2016 to fully litigate the matter. Its failure to exercise reasonable diligence and present all arguments supporting that entitlement claim in the 2016 proceedings, and then again on the appeal of the decision arising from those proceedings, is not a consequence of any deprivation of procedural fairness. And the correctness of the application judge’s decision on the 2016 applications is not a relevant consideration in determining whether to exercise discretion to allow relitigation. [ 130 ]                      I very respectfully part ways with my colleagues when it comes to their view that this case raises concerns about applying [NAME] in the context of applications. It is useful to recall that the 2016 applications were commenced under s. 11 of the Conveyancing Act — a provision that allows an encumbrancer to challenge [NAME]’s accounting of the proceeds from a [NAME]. Here, [NAME] and [NAME]’s applications challenging [NAME]’s accounting put into issue the entirety of the accounting. This included the validity, value, and priority of each of the claims therein. For this reason, the case before us is not one where the initial applications dealt only with “small parts of a larger picture” ( [NAME] v. [COMPANY] ., 2003 BCSC 1718, 38 C.C.P.B. 16, at para. 36, rev’d on other grounds 2004 BCCA 142, 237 [NAME]. (4th) 260) . Instead, the 2016 applications were commenced to address — and indeed did address — the correctness of [NAME]’s accounting of the sale proceeds. I thus do not accept that the validity, the value, and the priority of the claims included in the accounting were not within the initial contemplation of the parties when a judicial assessment of these matters is precisely the reason the present application was commenced. [ 131 ]                      My colleague Justice Martin states that exercising discretion in this case is appropriate because the claims on [NAME] held by [NAME] and its affiliates totalled over $13 million, whereas the claims held by other parties amounted to just over $1 million. On this basis, she states that, even if the other individuals were [NAME] in proving the validity, value, and priority of their claims, [NAME] could nonetheless have expected to receive the entire remaining balance, which would have been enough to cover the $4 million mortgage (Justice Martin reasons, at para. 170). [ 132 ]                      I cannot agree. My colleague seems to presume the validity of all of the encumbrances held by [NAME] and its affiliates and relies on that presumed validity to conclude that [NAME] could have expected at the outset of the 2016 applications to receive payment under the $4 million mortgage (and thus did not need to defend this claim). But [NAME] could not simply assert unproven claims on [NAME] in its accounting and rely on the fact that these claims totalled more than $4 million to avoid defending the $4 million mortgage. Quite the contrary. The validity and value of each individual encumbrance needed to be proven by [NAME] before it could expect to receive any of the sale proceeds. In the event [NAME] failed to defend the validity and value of its claims, s. 14(3)(c) of the Conveyancing Act directs that the residual sale proceeds be paid to the [NAME] — in this case, [NAME]. [ 133 ]                      It thus does not matter what amount of the sale proceeds was theoretically tied up in the claims [NAME] asserted in its accounting. At the outset of the 2016 applications, it had not proven any of these claims. And because there were insufficient sale proceeds to pay out all of the encumbrances on [NAME], the validity, the value, and the priority of each encumbrance on [NAME] — including the $4 million mortgage — were put into issue during the 2016 applications. (f)             Conclusion [ 134 ]                      In summary, cause of action estoppel applies in this case. My conclusion that cause of action estoppel applies is dispositive of this appeal. In view of this, I find it unnecessary to go on to consider the applicability of issue estoppel, along with the question of whether [NAME]’s efforts at relitigation constitute an abuse of process.

VII.       Disposition and Costs [ 135 ]                      Before this Court, and for the first time in these proceedings, [NAME] sought an order for solicitor-client costs, to be paid personally by [NAME]. [NAME] argued that because [NAME] facilitated its litigation of the same matter on four previous occasions, its counsel should share responsibility for indemnifying [NAME]. [ 136 ]                      Costs on a solicitor-client basis are generally awarded only in the most exceptional circumstances, where there is “reprehensible, scandalous or outrageous conduct on the part of one of the parties” ( Young v. Young , [1993] 4 [NAME].R. 3, at p. 134). Furthermore, courts must be exceedingly cautious in awarding costs personally against counsel. Lawyers have professional and ethical obligations to keep strictly confidential the instructions they receive from their client. They have further professional and ethical obligations to zealously and courageously advance arguments on behalf of their client where they believe such an argument will help their client’s case (pp. 135-36; see also [NAME] v. [COMPANY] of Upper Canada , 2018 SCC 27, [2018] 1 [NAME].R. 772, at para. 73). [ 137 ]                      Ordering costs personally against counsel raises concern that fear of an adverse costs order or the ability to defend against it could come into tension with these obligations ( Young , at p. 136). For this reason, costs should be ordered personally against counsel only exceptionally, where “repetitive and irrelevant material, and excessive motions and applications, characterized the proceedings in which they were involved, and that the lawyer acted in bad faith in encouraging this abuse and delay” (pp. 135-36; see also Schwisberg v. Perry Krieger & Associates (1997), 33 O.R. (3d) 256 (C.A.), at p. 260). [ 138 ]                      In arguing that [NAME] should personally bear [NAME]’s costs, [NAME] relies on a 1992 decision of the Ontario Superior Court of Justice, [COMPANY]. v. [COMPANY]. (No. 2) (1992), 6 O.R. (3d) 506, where solicitor-client costs were ordered to be paid on a joint and several basis by the plaintiffs and their solicitor. The facts in [COMPANY]. were exceptional. Counsel for the plaintiffs drafted a 25-page statement of claim containing allegations of conduct that, if proven, would constitute crimes. [ADDRESS] also found as fact that counsel knew advancing certain claims would run contrary to the doctrine of [NAME] . Even after making these findings, the court did not go so far as to order solicitor-client costs to be borne solely by the plaintiffs’ counsel. [ 139 ]                      In this case, there is no basis for an order of solicitor-client costs. Nothing in [NAME]’s conduct as a litigant can be said to rise to the level of “reprehensible, scandalous or outrageous conduct”. In my view, it is not enough that [NAME] has attempted to relitigate its claim for entitlement to payment under the $4 million mortgage despite the same cause of action having already been argued in 2016. If it were enough, solicitor-client costs would arise in every case where [NAME] was found to apply. This cannot be the case; something more is required. [ 140 ]                      Neither is there any basis to order costs payable by [NAME] personally. Such an order requires a finding that counsel acted in bad faith. The trial judge made no such finding, and there is nothing on the record before this Court that supports such a finding. It also bears repeating that [NAME] has only now argued for costs to be payable on a solicitor-client basis and, similarly, has only now requested costs payable by [NAME] personally. In the courts below, [NAME] was content to receive costs on a party-and-party basis payable by [NAME], as is standard. The conduct with which [NAME] takes issue — the relitigation of [NAME]’s claim for entitlement to the $4 million mortgage — first occurred in 2019, when [NAME] advanced the argument before the application judge. It is telling that [NAME] took no issue with counsel’s conduct in the courts below.

For these reasons, I cannot accept that a personal costs order is appropriate in this case. [ 141 ]                      I would thus dismiss the appeal, with costs payable by [NAME] to [NAME] on a party-and-party basis. The reasons of Karakatsanis and Martin JJ. were delivered by Martin J. — I.                Introduction [ 142 ]                      I write separately to address the issue of public importance put forward in the leave application to this Court: whether a party can raise [NAME] for the first time on appeal. [ 143 ]                      Chief Justice Wagner does not expressly address this issue because he is satisfied that [COMPANY]. argued [NAME] at first instance. That said, his conclusion that a litigant is required to advance all arguments at the first proceeding suggests that a party may not be able to raise it for the first time before an appellate court (see paras. 5, 39 and 45-53). [NAME], by contrast, concludes that [NAME] was not argued before the application judge and, as a matter of law, it cannot be raised for the first time on appeal (see paras. 197-214). [ 144 ]                      In my view, [NAME] did not argue or raise [NAME] before the application judge, but it may do so on appeal. The question of whether a party may raise [NAME] for the first time on appeal is a novel legal issue that has not yet been decided by this Court. Nevertheless, there is no reason for the Court to establish a special or specific bright-line rule barring a party from raising [NAME] for the first time on appeal. [ 145 ]                      [ADDRESS] has established a general standard to determine when a party can raise a new legal argument, which can — and should — be adopted in the present context. That standard allows a court of appeal “to consider a new issue of law on the appeal where it is able to do so without procedural prejudice to the opposing party and where the refusal to do so would risk an injustice” ( [COMPANY]. v. [NAME] & [COMPANY]. , 2002 SCC 19, [2002] 1 [NAME].R. 678, at para. 33; see also [NAME] , 2015 SCC 41, [2015] 3 [NAME].R. 3 , at para. 22). Allowing parties to raise [NAME] for the first time on appeal conforms with the modern approach to civil procedure, promotes the rationales underpinning the doctrine, and provides sufficient flexibility to do justice in individual cases. [ 146 ]                      Applying the [NAME]/[NAME] test, I would permit [NAME] to raise [NAME] for the first time on appeal. [COMPANY] would not face any prejudice by allowing [NAME] to argue [NAME] before this Court, and failing to permit this argument on appeal would risk an injustice. [ 147 ]                      Considering the substance of the [NAME] issue, I would allow the appeal. I take no position on whether the requirements of the estoppel doctrines were made out in this case. Even if the tests for [NAME] were satisfied, I would exercise my discretion to allow [NAME]’s claim to proceed on its merits and remit the matter back to the Supreme Court of [NAME]. II.             [NAME] Was Not Raised by [NAME] at First Instance [ 148 ]                      This case centers around a complex mortgage dispute involving a number of securities; multiple interested parties; various transactions; a series of different legal proceedings, with separate pleadings, transcripts, decisions; and the distribution of the proceeds of sale of a [NAME]. It is in this context that we must determine what was argued in the courts below. [ 149 ]                      I agree with the Chief Justice that there is a difference between pleading the material facts underlying an issue and arguing or raising that issue (paras. 35 and 49). I also agree that there were sufficient facts before the application judge to deal with the issue of [NAME] . I am not satisfied, however, that the doctrine of [NAME] was argued or raised sufficiently before the application judge. [ 150 ]                      [NAME] nor the application judge in the hearing of the 2019 application or the reasons for judgment, respectively, made any reference to [NAME] ; asserted that [NAME] should be estopped from proceeding with the claim on its merits; raised any caselaw related to [NAME] ; implicitly or explicitly drew attention to any of elements of the tests for [NAME] ; or mentioned whether [NAME] was relying on cause of action estoppel, issue estoppel, or abuse of process by relitigation. [ 151 ]                      The silence of the application judge’s reasons on these legal issues is important. A judge’s decision, absent a claim of insufficiency of reasons, is usually a prime indicator of what was raised and argued in any particular case. One of the rationales for a judge’s duty to give reasons is to ensure that the judge consciously engages with what was argued and applies the appropriate legal standard. [ 152 ]                      The fact that [NAME] and the application judge may have thought the issue was decided in the first proceedings cannot alone ground support for a finding of [NAME] . This doctrine does more than ask whether an issue was previously decided. Indeed, “estoppel is a doctrine of public policy that is designed to advance the interests of justice” ( [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460, at para. 19; [NAME]) v. [NAME] , 2011 SCC 52 , [2011] 3 [NAME].R. 422 , at para. 27). Without considering the established elements of the tests for [NAME] or deciding whether to use the court’s discretion to estop the proceedings, a judge cannot properly consider whether the application of the doctrine would further the interests of justice. [ 153 ]                      On my reading, the application judge’s reasons for his decision on the 2019 application suggest that he was directly addressing [NAME]’s alleged entitlement to the $4 million and using his decision on the 2016 applications as prima facie evidence to decide that question (see, by analogy, [NAME] , 2006 BCCA 524 , 232 [COMPANY]A.C. 249 , at para. 22, citing [NAME], The Doctrine of [NAME] in Canada (2nd ed. 2004), at p. 11). Nothing in the application judge’s decision on the 2019 application indicates that he was estopping or precluding [NAME] from raising the question. This is clear from his comment at para. 23 of his decision on the 2019 application where, after explaining the basis for his decision on the 2016 applications, he states: “I have been shown nothing to cause me to change my mind on this issue . . .” ( 2020 NLSC 99) . The application judge was not saying that [NAME] was estopped from raising the issue; he was simply saying that there was no new evidence to decide it differently. [ 154 ]                      Even if [NAME]’s argument is accepted, there would be no way to determine whether the application judge’s analysis is rooted in issue estoppel, cause of action estoppel, or abuse of process by relitigation. Such a result would preclude any meaningful appellate review and provide limited clarity on the basis for the decision. III.          [NAME] for the First Time on Appeal A.            The Jurisprudence Does Not Provide an Answer to This Question [ 155 ]                      [ADDRESS] has never held that [NAME] can be raised only at first instance. My colleagues cite two decisions of this Court to suggest otherwise ( Davies v. McMillan (1892), [NAME] 306; Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611). In [NAME] , Gwynne J., for the majority, stated at p. 317 that “it would be necessary that the plea [of estoppel] should contain suitable averments of what was the precise matter in contestation in such interpleader issue and of what is the precise matter in contestation in the present action”. And in [NAME] , at p. 620, Strong C.J. explained that “[u]nder the system of pleading introduced by the Judicature Act, it has been decided that [NAME] as a defence, or as a reply to a counter claim, must be specially pleaded.” These statements speak to how [NAME] should be pleaded but say nothing about whether it can be raised for the first time on appeal. [ 156 ]                      [ADDRESS] should be wary when relying on 19th century jurisprudence on civil procedure. As aptly pointed out by the Chief Justice, the rules of civil procedure have changed completely since the late 1800s (see para 46). In [NAME] , the Court was interpreting Ontario’s Judicature Act , which is no longer in force and has been overtaken by the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, and the Courts of Justice Act , R.S.O. 1990, c. C.43. The Rules of Civil Procedure , like other provincial rules of civil procedure, have established a complete code governing pleadings which replaced the older common law requirements applying to specific types of claims. [ 157 ]                      The appellate jurisprudence is also unclear on this point. Some provincial appellate courts have held that a party cannot raise [NAME] on appeal if they did not raise it at first instance ( [NAME] , at para. 21; [COMPANY]. v. [COMPANY]. , 2006 FCA 323, [2007] 3 F.C.R. 588 , at paras. 87-90; [COMPANY]. v. [NAME] , 2015 NSCA 13 , 355 N.S.R. (2d) 324 , at paras. 41-44). However, in [NAME] v. Her Majesty the Queen in Right of the Province of Manitoba , 2019 MBCA 78 , [2019] 8 W.W.R. 567 , the [ADDRESS] of Appeal rejected an absolute rule barring parties from raising [NAME] for the first time on appeal and instead relied on the test from [NAME] and [NAME] to decide the issue (paras. 16 and 22). [ 158 ]                      [NAME] can be raised for the first time on appeal is therefore a novel issue before this Court that must be determined according to first principles. B.             The Appropriate Test to Determine if a Party [NAME] for the First Time on Appeal [ 159 ]                      To raise [NAME] for the first time on appeal, a party must meet the test that applies whenever someone seeks to raise any new legal issue on appeal. Under that test, a court of appeal may “consider a new issue of law on the appeal where it is able to do so without procedural prejudice to the opposing party and where the refusal to do so would risk an injustice” ( [NAME] , at para. 33; [NAME] , at para. 22). [ 160 ]                      There are a number of reasons to afford appellate courts the discretion to allow parties to raise [NAME] for the first time on appeal. [ 161 ]                      First, recognizing a party’s ability to raise [NAME] for the first time on appeal would harmonize the law of [NAME] with the broader jurisprudence on civil procedure. In general, we should strive to ensure consistency in our caselaw, such that each element fits together in a coherent whole. Under Canadian civil procedure, when the requisite standards are met, parties may raise new issues on appeal. There is no reason to apply a special and specific standard to [NAME] . The [NAME] / [NAME] test is of general application and was designed to set out the standard for when new legal arguments can be made on appeal. Its internal criteria, being the absence of prejudice to the opposing party and the absence of any risk of injustice, further the same type of fairness and flexibility that [NAME] seeks to promote. [ 162 ]                      Second, the policy rationales underpinning [NAME] can also be achieved on appeal. My colleague [NAME] J. suggests that these rationales weigh in favour of preventing parties from raising [NAME] on appeal if it was not argued at first instance. That may sometimes be the case, but both rationales may also cut in the other direction. Permitting a party to raise [NAME] for the first time on appeal can promote finality because the court can put an immediate end to duplicative proceedings, prevent inconsistent results from taking effect, and halt any further use of resources (see [NAME] , at para. 18). And, applying [NAME] on appeal can promote fairness by vindicating one’s right to not be vexed twice, particularly where the second proceeding below should never have occurred ( [NAME]) v. [NAME]., Local 79 , 2003 SCC 63 , [2003] 3 [NAME].R. 77 , at para. 38; Angle v. M.N.R. , [1975] 2 [NAME].R. 248, at p. 267; [NAME] , at para. 18). The fact that the policy rationales underpinning [NAME] can be either hindered or furthered when the doctrine is raised on appeal indicates that appellate courts should retain a discretion to permit parties to do so when necessary. [ 163 ]                      Third, and relatedly, the discretion to hear an issue for the first time on appeal and the residual discretion to apply or not apply [NAME] provide appellate courts with sufficient flexibility to ensure that the interests of justice are advanced. A court will, at both stages, consider the litigant’s interest in fairness and society’s interest in the finality of disputes. A flexible approach to determining whether to consider a question for the first time on appeal — like the one set out in [NAME] and [NAME] — allows an appellate court to account for any unfairness at both the lower court and appellate levels. C.             [NAME] for the First Time on Appeal [ 164 ]                      Applying the test from [NAME] and [NAME] , I would allow [NAME] to raise [NAME] for the first time on appeal in this case. This conclusion brings little risk of procedural prejudice to [NAME]. Both parties made submissions on [NAME] in the Court of Appeal and [NAME] did not object to that court considering the doctrine. [ 165 ]                      Additionally, refusing to consider [NAME] would risk an injustice and could undercut the policy reasons for the doctrine. If we assume that [NAME]’s arguments have merit, then failing to consider [NAME] would permit [NAME] to potentially undermine a final decision of a court. Moreover, it risks undermining [NAME]’s right not to be repeatedly vexed by the same legal arguments. This is particularly true in this case, where [NAME] was the applicant, and did not know how [NAME] would defend against the application. [ 166 ]                      The fact that refusing to consider [NAME] could produce these unjust results obliges the Court to consider the claim of [NAME] on appeal and on its merits. IV.          [ADDRESS] Exercise its Discretion to Let the Claim Proceed on its Merits [ 167 ]                      I agree with my colleague [NAME] J. that, even if the estoppel doctrines applied, this Court should allow the claim to proceed on its merits. [ 168 ]                      [NAME] is a doctrine rooted in fairness, justice, and finality ( [NAME] , at paras. 19 and 33; [NAME] v. [NAME] (Regional Police Services Board) , 2013 SCC 19, [2013] 2 [NAME].R. 125, at para 69). In order to have finality in the administration of justice, judges must be confident that they are, on a balance of probabilities, promoting fairness when they estop proceedings. [ 169 ]                      I am not confident that I can reach a fair and just conclusion on what was decided with respect to the 2019 application. Getting to that conclusion would require relying on counsel’s dissection of the pleadings, parsing of the record, or invocation of various snippets of the judgments. The lack of clarity in that reasoning process calls into question the fairness of applying [NAME] to end [NAME]’s ability to claim and prove any entitlement to funds that it may be owed. [ 170 ]                      Using a broader lens to look at these proceedings brings to light the potential injustice in applying [NAME] in this case. The 2016 applications represented a priority dispute between [COMPANY]. and [NAME], on the one hand, and [NAME] on the other. [NAME] brought no claim in those proceedings that it was [NAME] to the remaining funds. In turn, [NAME] had no reason to foresee that the applications would be completely dispositive of its claim for entitlement to its $4 million mortgage. This is all the more true given that [NAME] or a person affiliated with [NAME] claimed more than 12 different encumbrances, totalling over $13 million, over [NAME]. The encumbrances held by other individuals, by contrast, amounted to just over $1 million. That means that, even if these other individuals were entirely [NAME] in the priority dispute, [NAME] (or someone affiliated with [NAME]) could have expected to receive the entire remaining balance. And, as a result, there would have been more than enough to cover the $4 million mortgage. Granted, [NAME] likely had incentive to maximize its profits and seek payment for each of their encumbrances. But it had little reason to think that the result of the 2016 applications would permanently disqualify its claim for entitlement to all of the remaining funds, and that those funds would instead be directed to [NAME]. [ 171 ]                      I am therefore concerned that relying on [NAME] here would be the sort of “mechanical” application that Binnie J. warned against in [NAME] (see paras. 1 and 33). I would exercise this Court’s residual discretion to not apply [NAME] .

V.            Disposition [ 172 ]                      For the above reasons, I would allow the appeal. I would permit [NAME]’s claim to proceed on the merits and remit the matter back to the Supreme Court of [NAME]. The following are the reasons delivered by [NAME] J. — I.                Overview [ 173 ]                      This appeal concerns cause of action estoppel, issue estoppel, and abuse of process by relitigation. It engages not only how these doctrines apply to a series of applications, but also when cause of action estoppel and issue estoppel must be raised in a proceeding and whether cause of action estoppel is subject to judicial discretion. [ 174 ]                      Cause of action estoppel and issue estoppel are two species of [NAME] , a common law rule developed to protect the administration of justice by safeguarding the finality of decisions and promoting fairness between the parties. Cause of action estoppel and issue estoppel do so by ensuring that, once causes of action or issues are finally adjudicated by a court of competent jurisdiction, they are not relitigated. These doctrines are essential, but their application is not without risk. Courts have long expressed the need for caution when applying these doctrines to summary proceedings, like applications. Courts have rightly recognized the injustice that may arise when a summary proceeding — that was meant to address a narrow issue — is later used to bar redress in a subsequent proceeding for matters that the parties, and perhaps the court, did not contemplate as being decided in the first proceeding. [ 175 ]                      This appeal provides our Court with the opportunity to affirm this prudential stance. In 2016, [COMPANY] exercised its rights as [NAME] to force the sale of a [NAME] in St. [NAME]’s, [NAME], owned by [COMPANY]. called [NAME]. Pursuant to its statutory obligations, [NAME] provided an accounting of how it proposed to distribute the proceeds from the sale to all encumbrancers registered on [NAME]. That accounting initially indicated that there were insufficient funds to pay four charges on the [NAME]: a mechanics’ lien held by J‑[COMPANY].; two collateral mortgages held by [NAME]; and a [NAME] held by [NAME] worth up to $4 million (“[NAME]”). [ 176 ]                      In response, [NAME] and [NAME] each brought respective applications requesting a better accounting and the payment of their charges in priority to [NAME] (“2016 applications”). The application judge determined that [NAME] and [NAME]’s charges ranked in priority to the [NAME] and ordered them to be paid. In the process, he found that several charges in the accounting were invalid and excluded them. He also made “no allowance for” the [NAME] in the accounting because [NAME] “failed to complete any analysis of the actual amount, if any, owing under the mortgage” (2017 NLTD(G) 167, 79 C.L.R. (4th) 127, at paras. 61‑62). He found that, after making no allowance for [NAME]’s mortgage and paying [NAME] and [NAME], there remained a $4.2 million surplus from the [NAME]. He made no order with respect to the distribution of this surplus. [ 177 ]                      In 2019, [NAME] brought an interlocutory application against [NAME], requesting that it be paid the $4.2 million surplus from the [NAME] (“2019 application”). [NAME] argued that no such payout was warranted because, while it was determined that [NAME]’s encumbrance did not have priority in the 2016 applications, $4 million of the surplus was nonetheless owed to it under its [NAME]. The application judge ruled that the whole of the surplus was to be paid to [NAME] once another encumbrancer, [NAME], was paid out (2020 NLSC 99). [ 178 ]                      [NAME] appealed this decision. In the Court of Appeal and before our Court, [NAME] has argued that the 2016 applications bar [NAME] from claiming that it is [NAME] to payment under the [NAME]. In particular, [NAME]’s claim for entitlement is said to be barred by cause of action estoppel, issue estoppel, and abuse of process by relitigation. [NAME] disagrees. It argues that [NAME] cannot raise [NAME] for the first time on appeal and before our Court because it failed to do so at first instance. It also disputes that the doctrines raised by [NAME] apply to its claim for entitlement. [ 179 ]                      I agree with [NAME]. As the Chief Justice rightly affirms, a party seeking to raise [NAME] must do so in its pleadings or, if that is not possible, it must do so at the earliest opportunity. [NAME] must be raised at the earliest opportunity, I find that it cannot be raised for the first time on appeal. Failure to raise [NAME] as required may result in it being waived. In the present case, I find that [NAME] was not raised in due time. Therefore, it was an error of law for the Court of Appeal to address [NAME] , and [NAME] is barred from raising it on appeal. [ 180 ]                      I also agree with [NAME] that [NAME] and abuse of process by relitigation have no application to its alleged entitlement under the [NAME]. Cause of action estoppel prevents the relitigation of claims that have already been decided. It does not apply here because [NAME]’s claim under its [NAME] is separate and distinct from what was claimed by [NAME] and [NAME] in the 2016 applications. Issue estoppel bars reconsideration of an issue, fact or question that was necessary to adjudicate an earlier proceeding. It does not apply because it was not necessary for the application judge to determine whether the [NAME] was payable in order to adjudicate the claimed priority and right to payment of [NAME] and [NAME] based on their encumbrances. Finally, because there has been no relitigation of its claim for entitlement, [NAME]’s actions do not amount to abuse of process by relitigation. [NAME] is therefore not barred from raising its claim. [ 181 ]                      In dealing with these issues, our Court must also address whether a judge has the discretion to not apply cause of action estoppel once its elements have been made out. Like the Chief Justice and Martin J., I would find that such a discretion exists. The policy rationale for cause of action estoppel and issue estoppel, the existence of discretion in closely related doctrines, and the weight of the case law all favour such a discretion. Though I find that [NAME] is not estopped from bringing its claim, if it had been, I would have found that applying cause of action estoppel, issue estoppel, or abuse of process by relitigation would lead to injustice. Therefore, like my colleague Martin J., I would not have applied them in the circumstances. [ 182 ]                      In light of the foregoing, I would allow the appeal and remit the matter of [NAME]’s claim for entitlement under its [NAME] for decision.

II.             Issues [ 183 ]                      The primary issue before our Court is whether [NAME] is barred from litigating its claim for entitlement to payment of its [NAME] from [NAME]’s sale proceeds because of the 2016 applications. I address this question by assessing the following: 1.              [NAME] properly raise [NAME] in the 2019 application? 2.              Does cause of action estoppel bar [NAME] from arguing its claim for entitlement to payment under its [NAME]? 3.              Does issue estoppel bar [NAME] from arguing its claim for entitlement to payment under its [NAME]? 4.              Does abuse of process by relitigation bar [NAME] from arguing its claim for entitlement to payment under its [NAME]? 5.              If [NAME]’s claim is barred by cause of action estoppel, issue estoppel, or abuse of process by relitigation, should the Court exercise its discretion to not apply these doctrines? III.          Analysis [ 184 ]                      If found to apply, [NAME] and abuse of process by relitigation allow a court to dispose of a case or issue without assessing its merits. When the matter disposed of was indeed previously within the contemplation of the parties as being before the court for decision, the application of these doctrines supports the administration of justice. If, however, the matter was not so decided or the parties were unclear about what was to be decided, a finding of [NAME] or abuse of process can result in a grievous injustice. This potential for injustice is heightened in the context of summary proceedings, which are meant to address discrete legal issues with efficiency and speed, rather than resolve a broader dispute in its entirety. [ 185 ]                      Cause of action estoppel, issue estoppel, and abuse of process by relitigation emerge from two primary concerns: finality and fairness ( [NAME]) v. [NAME] , 2011 SCC 52, [2011] 3 [NAME].R. 422, at para. 34). The finality of decisions is essential. Relitigating issues outside of the formal appeal process opens up the possibility of inconsistent findings of fact and the inconsistent application of the law to these facts ( [NAME] v. [COMPANY]. , 2001 SCC 44, [2001] 2 [NAME].R. 460, at para. 18). It undermines the authority of decisions which, once rendered and not appealed, are to be fully binding on the parties ( [NAME] , at para. 34). Unwarranted relitigation diminishes the credibility and authority of judgments — their moral force — while also wasting scarce judicial resources through the duplication of court efforts ( [NAME] v. [COMPANY]. , 1997 NSCA 153, 162 N.S.R. (2d) 321, at paras. 67 and 77; [NAME] v. [COMPANY]. , 2011 BCCA 367, 340 [NAME]. (4th) 733, at para. 71). [ 186 ]                      Fairness is no less important. No one should be “twice vexed” by the same cause or issue ( [NAME]) v. [NAME]., Local 79 , 2003 SCC 63, [2003] 3 [NAME].R. 77, at para. 50; [NAME] v. [NAME] , 2025 SKCA 45, at para. 16). [NAME] parties should be able to continue with their lives, secure in the knowledge that the litigation is over. [NAME] parties should be able to move on from the litigation without the temptation to, as is often said, have another “kick at the can”. Parties should not have to expend time, energy, and money to rehash completed litigation. [ 187 ]                      However, in safeguarding the interests of both society and litigants in the finality of judicial decisions, courts must neither lose sight of the importance of ensuring justice in each case nor forget that, in certain circumstances, relitigation may benefit the administration of justice ( [NAME]) , at para. 52; see also paras. 53‑55). This is reflected in our Court’s assertion in [NAME] that the purpose of issue estoppel — closely related to cause of action estoppel — is to “balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case” (para. 33). I take Cromwell J.A. (as he then was) to have made this same point in an often‑cited [NAME] appeal: This appeal involves the interplay between two fundamental legal principles: first, that the courts should be reluctant to deprive a litigant of the opportunity to have his or her case adjudicated on the merits; and, second, that a party should not, to use the language of some of the older authorities, be twice vexed for the same cause. Distilled to its simplest form, the issue in this appeal is how these two important principles should be applied to the particular facts of this case. ( [NAME] , at para.

19) These dynamics are always engaged when a court considers [NAME] . The present appeal is no different. [ 188 ]                      In the context of the matter before our Court, fairness to the parties and the need to scrutinize finality are of particular importance. Much of the jurisprudence on [NAME] concerns successive actions relating to the same causes of action or issues. Actions are comprehensive proceedings that address in depth the causes of action or issues in dispute. They involve formal pleadings, robust rules of discovery, and the procedural clarification of controversies over time. By contrast, applications are comparatively summary proceedings. They are often conducted quickly, with minimal formal pleadings, without discovery obligations, and on a primarily paper record. They often deal only with discrete elements of a larger dispute.

Accordingly, there is a greater potential that an earlier application may be used to improperly bar later redress for matters that the parties or the court did not contemplate as being finally decided. [ 189 ]                      Responding to these distinctions, courts “have always exercised a degree of caution when applying the doctrine of [NAME] to decisions reached in applications” ( [NAME] v. [NAME] , 2006 BCSC 795, 27 E.T.R. (3d) 82, at para. 66; [COMPANY]. v. [NAME] , 2008 NBQB 190, 332 N.B.R. (2d) 234, at para. 31; see also D. [NAME], The Doctrine of [NAME] in Canada (5th ed. 2021), at pp. 365‑67). This need for attentiveness to the narrow context of applications has been recognized for over a century. [ 190 ]                      In Cameron v. Hull (1913), 9 [NAME]. 843, the High Court of Ontario addressed whether a claim for the specific performance of a purchase and sale had been “definitely and finally settled by the dismissal” of a prior application (p. 844). The High Court found that [NAME] did not apply, in part because the prior application was a statutory summary proceeding that afforded “a convenient and inexpensive way of getting the opinion of the Court on isolated points arising out of or connected with the contract” in question (p. 845). The prior application did not address the whole matter, but rather left the broader dispute as “a matter for decision in an action for specific performance” (p. 845 (emphasis added)). [ 191 ]                      In Re Knowles , [1938] 3 [NAME]. 178, the Court of Appeal for Ontario addressed whether an initial application made to determine certain rights associated with the administration of a will barred a later challenge to the lawfulness of a testamentary transfer based on that same will. [NAME] was found by the application judge to apply, and this finding was affirmed by the Court of Appeal because the issue in question was “so distinctly raised” and “so distinctly dealt with” in the prior application that it had to be barred (p. 184). While the estoppel was clear in the particular circumstances, the Court of Appeal affirmed: But in the case of vague applications instituted by way of originating notice, this doctrine of estoppel ought to be applied with extreme caution , particularly where the application is brought by executors and trustees for advice, so that questions which were not specifically in issue and are not definitely raised and were not really in the contemplation of the parties, may not be held thereafter to be concluded . [Emphasis added; pp. 184‑85.] (See also Hammill Estate v. McDonell (1994), 3 E.T.R. (2d) 300 (Ont. Ct. J. (Gen. Div.)), at para. 35.) [ 192 ]                      More recently, in [NAME] v. [COMPANY]. , 2003 BCSC 1718, 38 C.C.P.B. 16, rev’d on other grounds 2004 BCCA 142, 237 [NAME]. (4th) 260, the defendants applied to reopen an order to correct an alleged miscalculation. The plaintiffs contended that the application to reopen was barred by [NAME] because the defendants had unsuccessfully sought to fix the issue earlier under the slip rule. While the court’s comments address [NAME] in the context of interlocutory applications, they have value for all applications. The court noted the following, at para. 36: The court has some discretion, however, with respect to the application of the doctrine [of [NAME] ], and will generally apply it less stringently to interlocutory orders than to final orders. In particular, the rule in Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313 (Eng. V.‑C.) that a party must bring forward “its full case” at one time is of limited application to interlocutory applications. Judicial efficiency, one of the foundations of the doctrine of [NAME] , will often be well served by allowing interlocutory applications to deal with only small parts of a larger picture. [ 193 ]                      Finally, in [NAME] , the court found that a prior application under the Business Corporations Act , S.N.B. 1981, c. B‑9.1, did not bar a later action despite both having involved the alleged wrongful termination of the same [NAME] manager. Both the application and the action alleged a breach of “good faith”, but the specific duty under the Business Corporations Act in the application was different from the relevant duties under the management contract in the action. Finding this difference sufficient to overcome [NAME] , the court warned that an “ over simplification of the ‘essence’ of both proceedings creates the real risk of missing important distinctions between the two” (para. 5 (emphasis added)). It stated further that applications “should be encouraged and ordinarily be capable of being pursued without fear that such may result in all claims related to the subject being barred on the basis of [NAME]” (para. 30). The court noted the following: The ill sought to be avoided by the principle of [NAME] must be weighed against the advantage or desirability of a party first pursuing any summary proceedings available . . . . It could not have been intended that a party, by choosing to proceed by way of a statutory summary proceeding in respect of some of his rights, thereby has to abandon all other rights. The ability to claim in respect of the broader rights and duties should not be lost in this manner. [para. 35] [ 194 ]                      The policy reasons underpinning these expressions of caution are clear. Finding that [NAME] applies where the matter said to be estopped was not in the contemplation of all of the parties in the prior summary proceeding could discourage the use of efficient, narrow legal mechanisms meant to target specific issues. At the same time, not finding that [NAME] applies where the matter said to be estopped was fully contemplated and decided upon could encourage the use of unnecessary and cumbersome actions in the hope of ensuring finality. To strike the right balance, courts must be cautious, closely scrutinizing the causes of action or issues raised and argued in the first proceeding and in the proceeding that is said to be barred by estoppel. Courts must avoid oversimplifying the “essence” of the proceedings and must instead be attentive to their distinctions. A.            [NAME] Was Not Adequately Raised in the 2019 Application, and [NAME] Is Now Estopped From Raising It [ 195 ]                      The majority of the Court of Appeal found that the issue of [NAME] was properly before them and decided the appeal on that basis, without addressing the merits of [NAME]’s claim. [NAME] argues that this was in error. It argues that [NAME] must be raised at the first opportunity and that delay gives rise to a cross‑estoppel. It asserts that [NAME] did not plead or otherwise raise [NAME] at first instance. Consequently, [NAME] was barred from raising [NAME] before the Court of Appeal and is similarly barred from raising this issue before our Court . [NAME] contends that failure to plead [NAME] at the first opportunity does not preclude estoppel arguments on appeal and that, even if such a rule existed, it raised [NAME] appropriately and [NAME] was the basis of the decision in the 2019 application. [ 196 ]                      I fully agree with the Chief Justice that a party seeking to raise [NAME] must do so at the earliest opportunity. If [NAME] is not raised as soon as possible — ideally in the party’s pleadings — the party is barred from raising it later on. [NAME] must be raised at the earliest opportunity, I find that it cannot be raised for the first time on appeal . Finding otherwise would run counter to clear appellate jurisprudence and undermine the policy benefits that the doctrine of [NAME] seeks to achieve. Though I agree with the Chief Justice on the law, I agree with [NAME] and my colleague Martin J. that the issue of [NAME] was not pleaded, raised, or decided in the 2019 application. As a result, [NAME] was estopped from arguing cause of action estoppel or issue estoppel on appeal and is estopped from doing so before our Court. (1)           [NAME] Be Raised as Soon as Possible and Cannot Be Raised for the First Time on Appeal [ 197 ]                      The rule that [NAME] must be pleaded is long‑standing. [NAME] (1892) , [NAME] 306 , our Court stated that estoppel must be pleaded and that pleas of estoppel should contain descriptions of both the precise matter contested in the prior decision and the precise matter contested in the legal proceeding where estoppel is claimed (pp. 316‑17). In Cooper v. The Molsons Bank (1896), 26 [NAME].R. 611, at p. 620, our Court again recognized that [NAME] must be pleaded in actions: Under the system of pleading introduced by the Judicature Act, it has been decided that [NAME] as a defence, or as a reply to a counter claim, must be specifically pleaded. [ 198 ]                      While these and other cases focus on the need for [NAME] to be pleaded, courts have a similarly long history of being sensitive to whether there was a sufficient opportunity to plead [NAME] in practice . In Miller v. Weldon (1870), 13 N.B.R. 188, at p. 193, the New Brunswick Supreme Court dismissed a claim for estoppel, stating the following: “Estoppel by record and by deed must, in order to make them binding, be pleaded if there be an opportunity ; otherwise the party omitting to plead waives the estoppel” (emphasis added). In Brown v. Yates (1877), 1 O.A.R. 367, at p. 374, the Court of Appeal for Ontario found that “ the rule is now too well established to be disturbed” that “where the party claiming [an estoppel’s] benefit has not chosen to plead it, although there was an opportunity , he is deemed to have waived the absolute estoppel . . ., and to leave the judgment as evidence only for the jury” (emphasis added). [NAME] cited Feversham v. Emerson (1855) , 11 Ex. 385, 156 E.R. 881, which stated that the “rule is established by a series of cases, that, if a party means to insist on an estoppel, he must plead it” and that it is “perfectly well‑settled law,  —  and does not now admit of the least question . . .  —  that if a party does not take the first opportunity which the pleadings afford him of relying on an estoppel, he leaves the matter at large” (p. 884 (emphasis added)). [ 199 ]                      While this rule is old, with respect, I cannot agree with my colleague Martin J. that it is anachronistic. Instead, it has repeatedly been applied by appellate courts within the modern context of civil procedure ( [COMPANY]. v. [COMPANY]. , 2006 FCA 323, [2007] 3 F.C.R. 588, at paras. 87‑90; [NAME] v. [NAME] , 2016 BCCA 424, 62 B.L.R. (5th) 196, at para. 33; [NAME] v. [COMPANY] , 1987 ABCA 95, 39 [NAME]. (4th) 111, at para. 32; [NAME] , 2006 BCCA 524, 232 [COMPANY]A.C. 249, at para. 21; Canada v. [NAME] , 2021 FCA 6, 456 [NAME]. (4th) 536, at para. 30; Mann v. Mann (1974), 1 O.R. (2d) 416). T he same understanding is widely found in scholarly writings on [NAME] , which hold that [NAME] must be pleaded or raised at the earliest opportunity ([NAME], at pp. 13‑17; [NAME] and [NAME]: [NAME] , at pp. 263 and 276; [NAME], and [NAME]: The Law of Evidence in Canada (6th ed. 2022), at ¶19.150). [ 200 ]                      With such case law in mind, I agree with the Chief Justice that [NAME] must be pleaded if possible. I also agree that if it is not possible to plead it, [NAME] must be raised at the earliest opportunity, even if the only opportunity is at the hearing (para. 52). In the absence of a sufficient pleading or raising of [NAME] , it is deemed to be waived. [ 201 ]                      I also find, contrary to my colleague Martin J., that there is a related obligation to raise [NAME] at first instance rather than for the first time on appeal. This rule necessarily emerges from the requirement that [NAME] must be pleaded or raised as soon as possible — if [NAME] must be pleaded or otherwise raised as soon as possible, it follows that it must be raised at first instance. It is also affirmed by appellate jurisprudence and reinforced by the policy reasons underlying the doctrine itself. [ 202 ]                      Appellate case law across the country is clear on the need to raise [NAME] at first instance and on the effect of failing to do so. In [NAME] , the [NAME] of Appeal held that “[t]he appellants cannot now raise [NAME] in this appeal, having not pleaded it or formally applied to raise it at trial” (para. 21). [NAME] , the [COMPANY] of Appeal affirmed in [COMPANY]. v. [NAME] , 2015 NSCA 13, 355 N.S.R. (2d) 324, that “if [NAME] is not pleaded it should not be raised as a ground on appeal” (para. 42). Similarly, in [NAME] v. Her Majesty the Queen in Right of the Province of Manitoba , 2019 MBCA 78, [2019] 8 W.W.R. 567, the [ADDRESS] of Appeal dismissed an appeal on the ground of [NAME] in part because “it was raised for the first time on appeal” and because the [NAME] test raised factual issues that were not determined at first instance by the applicable tribunal (para. 22; see also para. 21). While the court in [NAME] engaged with the general test for raising a new issue on appeal, it neither commented on nor rejected the rule that [NAME] must be raised at first instance. Moreover, this rule has also been affirmed in secondary sources. Once more, [NAME]’s The Doctrine of [NAME] in Canada and [NAME]’s [NAME] both agree that [NAME] must be pleaded or raised at first instance ([NAME], at pp.  13‑17 ; [NAME], at p. 263). [ 203 ]                      The policy reasons for this requirement are compelling. First, raising [NAME] only on appeal leaves the appellate court to decide the factually anchored requirements of [NAME] without the benefit of lower court findings. Second, if [NAME] is not raised at first instance, the parties in the lower court once more present their case in full and a judge once more decides the case on its merits — a party who was vexed once is vexed again. Third, if [NAME] is raised for the first time on appeal and found to apply, then the judicial resources expended in deciding the merits at first instance are wholly wasted. Fourth, not raising [NAME] at first instance ignores the binding decision of a court of competent jurisdiction — flouting the administration of justice and opening up the possibility of inconsistent findings of fact and law. [ 204 ]                      In short, fairness and finality are both undermined when [NAME] is raised for the first time on appeal. My colleague Martin J. argues that this may only “sometimes be the case” and that “both rationales may also cut in the other direction” (para. 162). With respect, in light of the policy arguments noted above, I must disagree. [NAME] to be raised for the first time on appeal always means that a party has been twice vexed, judicial resources have been wasted, inconsistent findings have become possible, and the interests of justice have been frustrated. While it could be argued that considering [NAME] on appeal may promote finality and fairness going forward in certain cases, that consideration would likely occur only after the bulk of judicial resources have already been wasted and the parties have gone through the more expensive and time‑consuming part of the relitigation. Moreover, such consideration on appeal will still leave an appellate court to engage with factual and legal issues in the absence of findings below. These negative consequences are best avoided by adhering to the rules of [NAME] that have been in place for over a century, rather than allowing parties to raise an issue late that could and should have been raised at first instance and as soon as possible. These impacts are especially unacceptable because there is rarely any reason to justify not raising this doctrine at first instance, particularly when counsel is involved. [ 205 ]                      In light of the logical inconsistency between requiring [NAME] to be pleaded or raised at the earliest opportunity and allowing it to be raised on appeal, the clarity of the case law and secondary sources, and the policy reasons supporting [NAME] being raised at first instance, I find that it cannot be raised on appeal. (2)           [NAME] Was Not Raised at First Instance and Cannot Be Argued on Appeal [ 206 ]                      On the basis of these rules, [NAME] argues that [NAME] did not plead or properly raise [NAME] in the 2019 application and therefore is estopped from raising it on appeal. [NAME] argues that [NAME] was sufficiently raised at first instance and therefore has not been waived. I agree with [NAME]. Like my colleague Martin J., I find that neither the application, nor the hearing transcript, nor the application judge’s reasons suggest that the issue of [NAME] was raised and decided in the 2019 application. While these sources contain a discussion of the prior decision, they do not raise [NAME]. However, I must part ways with Martin J. on the implications of [NAME] not having been properly raised. I find that, having not been raised or decided at first instance, the issue of [NAME] cannot be raised on appeal. Therefore, [NAME]’s claim must be allowed to proceed. [ 207 ]                      In support of its argument that [NAME] was sufficiently raised, [NAME] notes the following statements made by its counsel at the hearing of the 2019 application: As you noted Justice, this is an application by [NAME] . . . for confirmation of monies owed to the . . . [NAME] from the [NAME] proceeds and, Justice, you heard this matter previously so I’m not going to belabour the facts. You’ve heard them all; you’ve decided on them. . . . . . . . . . Our position with respect to that is that you considered these arguments at trial already, the Court of Appeal has also heard these arguments and agreed with you that [the [NAME]] . . . should not be considered in account whatsoever. . . . Again, those arguments were made at both levels of court and did not hold any water . . . . . . . You have already ruled on this matter before, and the Court of Appeal ruled on it as well. These arguments were made in front of the Court of Appeal. . . . [W]hat [[NAME] is] essentially asking you to do is now reverse your position on that [[NAME]] to say, yes, there was sufficient evidence to determine what was owing under the mortgage. . . . There has been no new evidence to establish what’s owing under that mortgage . . . . (A.R., vol. II, at pp. 518, 523 and 534) [ 208 ]                      [NAME] also points to several passages in the reasons for decision on the 2019 application . It emphasizes the following statement by the application judge, referencing his reasons for decision on the 2016 applications: “I deducted the $4,000,000 that [COMPANY] claimed . . . because [COMPANY] provided no analysis of what amount, if any, may have been owing to it under the [NAME]” (para. 24). [NAME] also raises this statement from the application judge’s reasons for decision on the 2019 application: “I have been shown nothing to cause me to change my mind on this issue; and I accept White J.A.’s affirmation of the conclusion I stated on the $4,000,000 mortgage amount in the reasons I filed on the Originating Application” (para. 25). [ 209 ]                      With respect, none of the above speaks to [NAME]. The application documents and hearing transcript note the prior decision, but neither contains any reference to issue estoppel or cause of action estoppel, [NAME] more broadly, or the relevant tests or case law. Neither includes any analysis of the similarities or differences between the 2016 and 2019 applications. Neither suggests that the merits of [NAME]’s claim should not be addressed because it is barred by estoppel. Rather, the 2019 application documents and hearing transcript indicate that [NAME]’s claim for entitlement was being argued on its merits and that it was being decided on substantially the same basis as in the 2016 applications. [ 210 ]                      While I agree with the Chief Justice that the questions of how an application is decided and whether a matter is raised are distinct (para. 62), this does not mean that the reasons for decision lack utility. Rather, the reasons for decision provide useful indications of what was before the court. The reasons for decision in the 2019 application strongly suggest that the application judge did not decide the matter based on [NAME] and that [NAME] had not been raised. [ 211 ]                      Like the application documents and hearing transcript, the application judge’s reasons give no indication that [NAME] was before him. Instead, the excerpts indicate that the issue of [NAME]’s claim for entitlement was argued and decided on the same evidence as in the 2016 applications. The reasons suggest that the application judge was addressing [NAME]’s alleged entitlement on its merits and using the rationale he provided in the 2016 applications as the basis for his decision. As characterized by Hoegg J.A. in dissent, the application judge made a “simple transfer of his reasons for decision [on the 2016 applications] to his decision [on the 2019 application]” (2024 NLCA 11, at para. 647). [ 212 ]                      Indeed, the alternative would cast the integrity of the application judge’s reasons into doubt. Without considering the tests for [NAME] , a judge cannot properly consider whether applying it would further the interests of justice. Even if I accepted that [NAME] was raised in the decision , there would be no way to determine whether the application judge’s analysis was based on issue estoppel, cause of action estoppel, or abuse of process by relitigation. He provided no analysis of any of the doctrines nor any of the factual and legal determinations necessary to apply them. Such a result would preclude meaningful appellate review and is itself unacceptable ( R. v. [NAME] , 2002 SCC 26, [2002] 1 [NAME].R. 869, at para. 28). [ 213 ]                      In the absence of any tangible suggestion that the issue of [NAME] was raised or decided, and keeping in mind the caution needed when dealing with this doctrine in the context of applications, I am of the view that the 2019 application is best understood as concerning whether the application judge should rely on his prior analysis. This explains the lack of any discussion relating to [NAME] and makes sense of the application judge’s statement that, in the 2019 application, he had been shown nothing to change his mind. [ 214 ]                      Nothing in the 2019 application, hearing transcript, or decision is sufficient to show that [NAME] was raised and adjudicated. Having not raised [NAME] at first instance, [NAME] cannot argue it on appeal. [NAME]’s claim for entitlement under its [NAME] should have been addressed on its merits by the Court of Appeal. However, for the sake of completeness, I address [NAME]’s arguments on cause of action estoppel, issue estoppel, and abuse of process by relitigation below. B.             Cause of Action Estoppel Does Not [NAME]’s Claim [ 215 ]                      Despite the foregoing, the majority of the Court of Appeal found that cause of action estoppel applied to prevent [NAME] from claiming payment of its [NAME] from the proceeds of the [NAME]. Justice Hoegg, dissenting, did not address cause of action estoppel. Against the majority’s view, [NAME] argues that cause of action estoppel has no application, in part because the causes of action in 2016 were separate and distinct from the claim it seeks to bring. [NAME], by contrast, urges our Court to find that the causes of action in 2016 encompassed, and therefore bar, [NAME]’s claim. For the reasons below, I agree with [NAME]. Cause of action estoppel does not apply — the cause of action underlying [NAME]’s claim is separate and distinct from the causes of action brought by [NAME] and [NAME] in 2016. (1)           The Test for Cause of Action Estoppel [ 216 ]                      Cause of action estoppel works to prevent the relitigation of claims that have been previously decided ( [COMPANY]. v. [COMPANY]. , 2019 ONCA 354, 145 O.R. (3d) 759, at para. 49; [COMPANY]. v. [NAME] , 2008 MBCA 24 , 290 [NAME]. (4th) 712 , at para. 37). It bars both the relitigation of the same cause of action and the raising of any point in subsequent proceedings that “could and should have been decided” in the prior proceeding ( [NAME] v. [COMPANY]. , 2017 ONCA 369, at para. 128; see also [NAME] , at para. 50, citing [NAME] , at para. 37; Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313, at p. 319). [ 217 ]                      I agree with the Chief Justice’s description of the test for cause of action estoppel (para. 70). That test reflects our Court’s decision in Grandview v. Doering , [1976] 2 [NAME].R. 621, and various summaries provided in the jurisprudence ( [NAME] , at para. 38; [COMPANY]., Re , 2011 BCCA 180, 17 [NAME]. (5th) 60, at para. 28; [NAME] , at para. 25; [NAME] v. [COMPANY]. , 2004 NLCA 46, 243 [NAME]. (4th) 153; [COMPANY]. v. [COMPANY]. , 2014 ABCA 320, 5 Alta. L.R. (6th) 268; [NAME] v. [COMPANY]. ([COMPANY]) , 2021 ONCA 141, 457 [NAME]. (4th) 530). I repeat it here for convenience: (1)           There is a final decision of a court of competent jurisdiction in a prior action; (2)           The parties to the subsequent litigation were parties to, or in privy with parties to the prior action; (3)           The cause of action in the prior action is not separate and distinct; and (4)           The basis of the cause of action and the subsequent action were argued or could have been argued in the prior action, if the parties had exercised reasonable diligence. In the context of this case, both the third element of the test and the definition of cause of action require more discussion. [ 218 ]                      For cause of action estoppel to apply, the implicated causes of action must not be “separate and distinct”. Only subsequent proceedings that arise “out of the same relationship, and the same subject matter, as the adjudicated action” are barred ( Lehndorff Management Ltd. v. L.R.S. Development Enterprises Ltd. (1980), 19 [NAME]. 59, at pp. 64‑65). It applies even if the relationship between the parties and the subject matter are the same but the claim is “based upon a different legal conception of the relationship between the parties” (pp. 64‑65). Cause of action estoppel is not defeated by manipulating the underlying facts to advance a new legal theory ( [NAME] , para. 58). [ 219 ]                      This third element relies on a proper understanding of “cause of action”. This term of art has been defined many times. In [NAME] , Binnie J. held that a cause of action comprises “every fact which it would be necessary for the plaintiff to prove, if disputed, in order to support his or her right to the judgment of the court” (para. 54; see also [COMPANY] v. [NAME] , 2015 SCC 60, [2015] 3 [NAME].R. 801, at paras. 51 and 191; [NAME] v. Canada , 2003 SCC 9, [2003] 1 [NAME].R. 94, at para. 27). To similar effect, in Air Canada v. McDonnell Douglas Corp. , [1989] 1 [NAME].R. 1554, at p. 1564, our Court found that a cause of action “comprises certain facts which, if proven, establish a plaintiff's right to the remedy sought from the defendant”. [ 220 ]                      However, the brevity of these definitions belies the complex nature of causes of action. They are not simply sets of facts, nor are they abstract legal theories. Rather, a cause of action is a set of material facts that allow a particular person to bring a claim for legal redress against another particular person . This is why the third element of the test for cause of action estoppel queries both the factual matrix and the relationships that ground a claim that is based on those facts. It also helps to explain the source of the “illusive nature of a separate and distinct cause of action” ([NAME], at p. 155). [ 221 ]                      This composite structure also explains why causes of action may share some material facts while still being separate and distinct. As affirmed by the majority of the [COMPANY], Appellate Division, in Hall v. Hall and Hall’s Feed & Grain Ltd. (1958), 15 [NAME]. (2d) 638, at p. 646 , “if there are facts which are common to several causes of action, an inquiry into these facts in one cause of action does not prevent an examination of the same facts where another cause of action is set up, provided that this cause of action is separate and distinct” (cited affirmatively in Sherwood Steel , at para. 24, and Smode v. Deveaux (1996), 216 A.R. 20 (C.A.), at para. 2; see also [NAME] , at pp. 635‑36). Or, as our Court noted in [NAME] : “It is apparent that different causes of action may have one or more material facts in common” (para. 54). (2)           [NAME]’s Claim of Entitlement Is Not Barred by Cause of Action Estoppel [ 222 ]                      [NAME] argues that [NAME]’s claim for entitlement under its [NAME] is barred because the cause of action in the 2016 applications required establishing the value, validity, and priority of the encumbrances on [NAME], including the [NAME]. It argues that this cause of action subsumed [NAME]’s claim in the 2019 application. I cannot accede to [NAME]’s argument. The causes of action brought by [NAME] and [NAME] in 2016 are not the same as either [NAME]’s cause of action in its 2019 application or [NAME]’s claim under its [NAME]. Therefore, [NAME] is not estopped from bringing forward its claim for entitlement. [ 223 ]                      Indeed, focusing on the material facts and the relationships at the core of the proceedings in 2016 and 2019 demonstrates their many distinctions. In the 2016 applications , [NAME] and [NAME] sought payment of their charges on [NAME], in priority to [NAME]. To establish their right to such payment, [NAME] and [NAME] had to prove the material facts associated with the validity of their charges on [NAME] and the amounts to which they were [NAME] under those charges. Those facts emerged from [NAME] lien and [NAME]’s mortgage documents registered on [NAME]. The respective relationships that gave rise to these claims were that of [NAME] as lienholder and [NAME] as lienee, and [NAME] as [NAME] and [NAME] as [NAME]. [NAME] was a respondent in the 2016 applications, its involvement was based only on its status as the [NAME] who triggered the [NAME]. It had no other relationship with [NAME] or [NAME]’s claims for payment. Of course, given the [NAME] context, [NAME] and [NAME] had to address whether their charges were to be paid out in priority to [NAME]. [ 224 ]                      In the 2019 application, [NAME] claimed that it was owed the surplus from the [NAME]. To prove a right to this remedy, it had to show that all valid charges on [NAME] had been paid out and that it was the [NAME] under the Conveyancing Act , R.S.N.L. 1990, c. C‑34. The relationships implicated in this claim were those between [NAME] and all of the various encumbrancers on [NAME]. For its part, [NAME] claimed its own right to payment from the [NAME] proceeds based on its [NAME]. That right derived from the material facts demonstrating the validity of and the amount owing under its [NAME] and the relationship between [NAME] as [NAME] and [NAME] as [NAME]. [ 225 ]                      The above summary indicates that the material facts and the relationships that formed the causes of action in the 2016 and 2019 applications were separate and distinct. In 2016, [NAME] and [NAME] claimed priority and a right to payment based on their registered encumbrances and their relationships with [NAME]. In 2019, [NAME] claimed the surplus from the [NAME] and [NAME] claimed a right to payment against [NAME] based on its [NAME]. Each claim for a remedy relied on distinct material facts consisting of disparate underlying transactions and registered documents and a different relationship with [NAME]. These relationships were not merely formal titles; they were the very bases on which each claim rested. Without them, none of the claims or applications could have been brought. Any apparent overlap amongst these causes of action pertains only to the issue of priority that arose in the [NAME] context. In short, the claims are separate and distinct, and there is no cause of action estoppel. [ 226 ]                      In response, [NAME] argues that both proceedings are best understood as establishing the value, validity, and priority of the encumbrances on [NAME]. I disagree. This characterization is based on the fact that the 2016 applications emerged from challenges to [NAME]’s accounting of the proceeds of sale. While the accounting was certainly part of the dispute between the parties, this characterization is too broad and risks conflating the mechanism by which the claims were brought with the essence of the claims, and therefore the causes of action themselves. [ 227 ]                      Indeed, the application judge saw the task before him as focusing only on the priority and payment of [NAME] and [NAME]’s claims. In his reasons for decision on the 2016 applications, he noted that [NAME] and [NAME] each claimed that “their charges on the [NAME] properties rank in priority to some other charges on the [NAME]” (para. 3). The issue he saw himself as resolving was how the “[NAME] lien and the [NAME] mortgages rank amongst the various charges affecting the [NAME] properties” (para. 4). In accord with this issue statement, his order addressed only the priority and payment of [NAME] and [NAME]’s claims and the awarding of costs (para. 68). It made no mention of the validity or invalidity of [NAME]’s claim for entitlement under its [NAME]. While the application judge noted that his task required him to examine the “various charges affecting” [NAME], that examination was explicitly focused on “the priorities between the various charges”, not a full resolution of the value, validity, priority, and payment of each charge (para. 3 (emphasis added)). [ 228 ]                      The application judge’s understanding of the narrow issue before him in the 2016 applications is reflected in the jurisprudence he assessed and applied. He dealt extensively with case law and statutes relating to priorities. He discussed the Mechanics’ Lien Act , R.S.N.L. 1990, c. M‑3 (paras. 5‑11), and case law concerning the priority of mechanics’ liens relative to mortgages. He addressed jurisprudence on the validity and priority of collateral mortgages relative to both mechanics’ liens and regular mortgages (paras. 32‑42). He did not, by contrast, cite anything relating to mortgage law, the law of guarantees, or the interpretation of contracts or mortgages. [ 229 ]                      Moreover, while he discussed other encumbrances on [NAME] by virtue of their relationship to the priorities of [NAME] and [NAME]’s encumbrances and the broader context of the accounting, the application judge did not exhaustively adjudicate all the encumbrances on [NAME]. He made no order with respect to [NAME] and its entitlement to any residue, nor did he otherwise indicate what was to occur with the $4.2 million left over from the [NAME]. For example, the application judge’s final table summarizing the charges made no mention of any entitlement to the surplus — further suggesting that he was not seized of what would happen with the proceeds from the [NAME] beyond the payments to [NAME] and [NAME]. This is reinforced by the fact that, though he affirmed them in his reasons, the application judge made no order with respect to: (1) [NAME]’s mortgages; (2) two mechanic’s liens held by persons other than [NAME]; or (3) five mortgages held by [NAME] or its affiliates. If this was meant to be a comprehensive determination as to the distribution of the proceeds of sale, it fell far short. This further confirms that the accounting was the trigger for [NAME] and [NAME]’s applications in 2016 rather than the cause of action underpinning those applications. [ 230 ]                      [NAME] uses the Court of Appeal’s reasons with respect to the 2016 applications to support the argument that [NAME] is to receive nothing for its [NAME]. With respect, those reasons have little relevance and offer no clear support for [NAME]’s argument. The question before our Court is what was decided in the 2016 and 2019 applications, not what was stated on appeal. [ADDRESS] of Appeal merely affirmed the decision of the application judge on the 2016 applications. As discussed above, that decision was narrow and concerned only the determination of priority and payment of [NAME] and [NAME]’s charges. [ADDRESS] of Appeal’s conclusion that it would “uphold the decision of the Applications Judge in finding that there should be no payment under the $4,000,000 mortgage in priority to the [NAME] lien or the [NAME] mortgages” supports this (2019 NLCA 69, 94 C.L.R. (4th) 230, at para. 63 (emphasis added)). [ 231 ]                      In closing, I would add that it is unclear whether cause of action estoppel should apply when the allegedly estopped party never brought forward its claim — i.e., its cause of action — at all. Recall that a cause of action constitutes the material facts and the relationships that ground a “plaintiff's right to the remedy sought from the defendant”. A cause of action is a claim brought by a particular plaintiff against a particular defendant. [NAME] did not bring such a claim. [NAME] was not a “plaintiff” seeking payment from [NAME] as “defendant” in the 2016 applications. Nor is this a case of litigation by installment, where [NAME] effectively seeks to rechallenge the priority and payment of [NAME] and [NAME]’s encumbrances by raising a new defence or claim that it could have raised previously. Rather, [NAME] accepts those payments and the ruling on priority and now advances a claim for its own payment for the first time. The application judge’s discussion of the [NAME] was not a consequence of [NAME] claiming its entitlement. Instead, it emerged in response to challenges that [NAME] and [NAME] levied against the priority of the [NAME]. [ 232 ]                      In this context, I agree with [NAME] that the idea that it should be estopped from bringing forward a cause of action when it has never brought that claim forward at all does “not easily fit” into the cause of action estoppel analysis (A.F., at para. 122). Rather, the question of whether [NAME]’s claim was “necessarily put in issue” by its response to [NAME] and [NAME]’s claims and is therefore barred falls to be addressed in issue estoppel — not cause of action estoppel (Wagner C.J.’s reasons, at para. 122). C.             Issue Estoppel Does Not [NAME]’s Claim [ 233 ]                      The majority of the Court of Appeal held, with respect to the 2019 application, that [NAME]’s claim was barred by issue estoppel. Hoegg J.A. dissented, finding that issue estoppel did not apply, that none of its elements were met, and that even if it did apply she would exercise her discretion not to bar [NAME]’s claim. Before our Court, [NAME] argues that the majority erred in the application of issue estoppel, and [NAME] argues that it applies to bar [NAME]’s claim. I agree with [NAME]. Issue estoppel does not apply in the present circumstances. I come to this conclusion because it was not necessary for the application judge to adjudicate the issue of [NAME]’s claim for entitlement to come to his decision on the 2016 applications. (1)           The Test for Issue Estoppel [ 234 ]                      [ADDRESS] discussed issue estoppel at length in [NAME] . Justice Binnie, writing for a unanimous Court, affirmed (at para. 24) the following description of this doctrine provided by Middleton J.A. in McIntosh v. Parent , [1924] 4 [NAME]. 420 (Ont. [NAME]. (App. Div.)), at p. 422: When a question is litigated, the judgment of the Court is a final determination as between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a Court of competent jurisdiction as a ground of recovery, or as an answer to a claim set up, cannot be re‑tried in a subsequent suit between the same parties or their privies, though for a different cause of action. The right, question, or fact, once determined, must, as between them, be taken to be conclusively established so long as the judgment remains. [ 235 ]                      Of importance for this appeal, issue estoppel does not apply if the allegedly barred question “arose collaterally or incidentally in the earlier proceedings or is one which must be inferred by argument from the judgment” ( [NAME] , at para. 24, quoting Angle v. M.N.R. , [1975] 2 [NAME].R. 248, at p. 255). Rather, to be barred by estoppel, the question or issue must have been “fundamental to the decision arrived at” in the earlier proceedings; it must have been “necessarily (even if not explicitly) determined in the earlier proceedings” (para. 24). In other words, issue estoppel “extends to the issues of fact, law, and mixed fact and law that are necessarily bound up with the determination of that ‘issue’ in the prior proceeding” (para. 54). (2)           [NAME]’s Claim of Entitlement Is Not Barred by Issue Estoppel [ 236 ]                      [NAME] argues that the question of “whether [NAME], in distributing the sale proceeds from the sale of [NAME], was permitted [to] keep $4 million itself or whether this had to be provided to other parties” was conclusively determined in the 2016 applications and was therefore barred by estoppel in the 2019 application (R.F., at para. 34). I disagree. This question was not decided in the 2016 applications and, even if it had been, it was not essential or necessary for the court’s adjudication of the applications before it. Therefore, there is no issue estoppel. [ 237 ]                      First, [NAME]’s claim for entitlement under its [NAME] was not adjudicated in the 2016 applications. As noted above, the claim in the 2016 applications concerned the priority and payment of [NAME] and [NAME]’s encumbrances. In that context, [NAME] defended the relative priority of its [NAME] against [NAME] and [NAME]’s arguments that their charges ranked above its encumbrance. [NAME] was [NAME], and the application judge determined that the charges of [NAME] and [NAME] ranked higher in priority. [ 238 ]                      Indeed, the application judge did not expressly rule on [NAME]’s mortgage in his decision on the 2016 applications. He said that he made “ no allowance for this mortgage in the accounting ” (para. 62). But that statement must be read alongside the purpose of the 2016 applications — to determine priority and payment for [NAME] and [NAME]. This understanding was confirmed on appeal, where the Court of Appeal agreed, in its decision on the 2016 applications, “that there should be no payment under the $4,000,000 mortgage in priority to the [NAME] lien or the [NAME] mortgages” (para. 63 (emphasis added)). This ruling makes sense given that the application judge’s finding was not based on the invalidity of the mortgage but rather on a lack of analysis as to its precise value. Because the application judge did not address whether [NAME] was ever [NAME] to payment under its [NAME], this issue is not estopped by the 2016 applications. [ 239 ]                      Second, even if it is assumed that [NAME]’s claim for entitlement was conclusively adjudicated, that adjudication would not have been essential or necessary to decide [NAME] and [NAME]’s claims, and therefore it is not barred by estoppel. In the 2016 applications, the court had to decide whether [NAME] and [NAME]’s charges should be paid from the [NAME] in priority to [NAME]’s claim for entitlement. [NAME]’s claim was not necessary or fundamental to this determination. [ 240 ]                      Once certain charges, like the directions to pay, were removed by the application judge, there was enough money from the proceeds of sale to pay for the claims of [NAME], and [NAME]. The application judge’s findings on this matter are clear: even after [NAME] and [NAME]’s encumbrances were paid out, there remained roughly $4.2 million in surplus from the proceeds of the [NAME]. There were, therefore, sufficient funds from the [NAME] to pay [NAME], and [NAME]. Once this determination was made, there was no need to determine whether the [NAME] was to be paid out from the proceeds of sale. There was no conflict between the payments sought by [NAME] and [NAME] through their 2016 applications and the entitlement of [NAME] under the [NAME] that would make a final determination of [NAME]’s payment essential or necessary. Because of this, any decision relating to the [NAME] was incidental and not binding with respect to [NAME]’s claim. [ 241 ]                      Even had there been insufficient funds to pay [NAME], and [NAME]’s claim for entitlement would still not have been a necessary issue for the application judge. The 2016 applications concerned the priority and payment of [NAME] and [NAME]’s encumbrances. Determining the payment of [NAME] and [NAME]’s encumbrances implicated the relative priority of the [NAME], but not its value or payment, once the [NAME] was found to rank lower than the other charges. Simply put, the question of [NAME]’s entitlement under its [NAME] — rather than the mere priority of that mortgage — was not essential or necessary to determine the 2016 applications. The issue of [NAME]’s entitlement, therefore, is not barred by estoppel. D.            Abuse of Process by Relitigation Does Not [NAME]’s Claim [ 242 ]                      [NAME] , because abuse of process by relitigation concerns the inherent right of courts to protect their processes, there is no requirement that abuse of process by relitigation must have been raised at first instance ( [NAME]) , at para. 37; [NAME] v. [NAME] , 2006 NLCA 3, 253 Nfld. & P.E.I.R. 1, at para. 50; Fieldbloom v. Olympic Sport Togs Ltd. (1955), 63 Man. R. 47 (C.A.)). It is therefore properly before our Court and was properly before the Court of Appeal. To that effect, [NAME] argues that, even if [NAME] does not apply, abuse of process by relitigation operates so as to bar [NAME]’s claim. Again, I cannot accede to this argument. For much of the same reasons discussed above, there has simply been no relitigation. [ 243 ]                      Abuse of process engages the inherent power of the court to prevent the misuse of its procedure in a way that would bring the administration of justice into disrepute ( [NAME]) , at para. 37, citing Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting). It has been applied to “preclude relitigation in circumstances where the strict requirements of issue estoppel . . . are not met, but where allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice” (para. 37). While abuse of process does not have the specific requirements of [NAME] , that does not mean the doctrine should be too readily applied (see paras. 37, 42 and 51). A finding of abuse of process gives rise to extraordinary remedies that should be applied sparingly and only in the clearest cases ( [NAME] , at para. 56; [NAME], at p. 200). [ 244 ]                      Abuse of process by relitigation has no application in this case. As I have found above, there has been no relitigation. Without relitigation, there is no basis for concluding that judicial economy, consistency, finality, or the integrity of the administration of justice would be harmed by allowing [NAME]’s claim to proceed. This doctrine is applied by courts to protect their proceedings from abusive conduct, not to correct confusion and misunderstanding about what was decided between parties. This is not one of the clearest cases where the doctrine of abuse of process should be applied. E.             Cause of Action Estoppel, Like Issue Estoppel and Abuse of Process by Relitigation, Is Discretionary, and I Would Not Apply Any of These Doctrines in the Circumstances [ 245 ]                      I agree with the Chief Justice and Martin J. that cause of action estoppel is discretionary — even when its test is met, a judge retains the discretion to not bar the matter in question. This provides courts with the flexibility necessary to ensure that justice is done in each case and aligns cause of action estoppel with the discretion provided under the related doctrines of issue estoppel and abuse of process by relitigation. Like my colleague Martin J., I find that in the case at hand, if cause of action estoppel, issue estoppel, or abuse of process by relitigation had applied, I would have exercised my discretion to not apply any of those doctrines. This case has been defined by ambiguity and confusion. On the basis of this confusion, a valid $4 million mortgage has been rendered worthless to [NAME], though [NAME] retained both the initial benefit for which it granted the mortgage and now the monies meant to secure that mortgage. This confusion and injustice weigh heavily against barring [NAME]’s claim. (1)           There Is Discretion to Not Apply Cause of Action Estoppel [ 246 ]                      Alongside the reasons noted by the Chief Justice and Martin J., I find that both the treatment of discretion under related doctrines and the weight of appellate case law favour the recognition of a discretion to not apply cause of action estoppel. However, that discretion must be understood narrowly and should be used only in rare cases. [ 247 ]                      While our Court has not expressly confirmed judicial discretion in the context of cause of action estoppel, it has clearly affirmed judicial discretion under the closely related doctrines of issue estoppel and abuse of process by relitigation, both of which are similarly built upon the pillars of finality and fairness (see [NAME] , at para. 33). In [NAME] , our Court affirmed judicial discretion in the context of issue estoppel (see paras. 63‑64). It advised courts assessing whether to apply issue estoppel to “stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice” (para. 80). In [NAME]) , at para. 52 , our Court cited [NAME] , at para. 80, and found that there is judicial discretion with respect to abuse of process. In so finding, our Court noted that there “may be instances where relitigation will enhance, rather than impeach, the integrity of the judicial system” (para. 52), alluding to “many circumstances in which the bar against relitigation, either through the doctrine of [NAME] or that of abuse of process, would create unfairness” (para. 53). [ 248 ]                      While our Court has said little about cause of action estoppel, judicial discretion in this context has been affirmed by appellate courts in Ontario, [NAME], [COMPANY], Manitoba, New Brunswick, and [COMPANY], often relying on the decisions or rationale in [NAME] , General Motors of Canada Ltd. v. Naken , [1983] 1 [NAME].R. 72 , or [NAME]) ( [NAME]) v. Canadian Union of Public Employees, Local 79 (2001), 55 O.R. (3d) 541 (C.A.), at para. 95; Schweneke v. Ontario (2000), 47 O.R. (3d) 97 (C.A.); Ontario (Attorney General) v. Bear Island Foundation (1999), 126 O.A.C. 385, at paras. 31‑32; 574095 [COMPANY]. v. [NAME]. , 2003 ABCA 34, 10 Alta. L.R. (4th) 23, at para. 37; [NAME] , at para. 52; [NAME] v. [NAME] , 2007 BCCA 547, 288 [NAME]. (4th) 380, at paras. 51, 57 and 66; [NAME] v. [NAME] , 2009 NSCA 107, 282 N.S.R. (2d) 376, at paras. 45‑47; [NAME] v. [NAME] , 2012 BCCA 286, 33 [NAME]. (5th) 251, at para. 24, citing [NAME] v. [NAME] , 2008 BCCA 223, 80 [NAME]. (4th) 290, at para. 16; [NAME] v. Co‑operators [COMPANY] , 2006 NBCA 54, 298 N.B.R. (2d) 44, at para. 23; [NAME]) v. Canadian Union of Public Employees, Local 1188 , 2007 NBCA 18, 313 N.B.R. (2d) 147, at para. 33). [ 249 ]                      However, the discretion with respect to cause of action estoppel is not unlimited. Rather, as this Court held in [NAME] and [NAME] , it must be constrained. In [NAME] , at para. 63, our Court described the basis of this discretion in part by quoting from the Court of Appeal for Ontario’s decision in [NAME] , at paras. 38 and 43: 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 discretion must respond to the realities of each case and not to abstract concerns that arise in virtually every case where the finding relied on to support the doctrine was made by a tribunal and not a court. I adopt the same understanding in the context of cause of action estoppel. However, I agree with the Chief Justice that the discretion under cause of action estoppel is somewhat narrower given the breadth of the fourth element of its test, which will likely capture issues that would motivate the use of discretion under issue estoppel (para. 89). (2)           Had I Found That [NAME]’s Claim Was Barred, I Would Have Exercised My Discretion to Let It Proceed [ 250 ]                      Like my colleague Martin J., had I found that cause of action estoppel, issue estoppel, or abuse of process by relitigation applied, I would nonetheless have exercised my discretion to not bar [NAME]’s claim. Keeping in mind the caution that the use of [NAME] in the context of applications requires, and considering the entirety of the circumstances, I would have found that barring [NAME]’s claim would work an injustice. I would therefore have refused to apply any form of estoppel. [ 251 ]                      This case has been rife with uncertainty and ambiguity over what was actually raised and decided in the 2016 and 2019 applications. Each party’s characterizations of what was decided are widely divergent and the record is, at best, unclear. A lack of clarity surrounding what was in the contemplation of the parties as being decided previously increases the potential for injustice and raises questions akin to issues of procedural fairness. Indeed, all of the signs suggest that the final determination of [NAME]’s claim for entitlement was not in the contemplation of [NAME]. The 2016 applications sought only the priority and payment of [NAME] and [NAME]’s encumbrances, not a final determination of all issues relating to the accounting. The application judge characterized the issue before him as one of priority and payment, not all encumbrancers were present, and the payment of all encumbrances was not sought. In this setting, it is difficult to see how [NAME] could have contemplated that the value and validity of all encumbrances on [NAME], including its own, were going to be conclusively determined. [ 252 ]                      This confusion supported what appears to be a windfall for [NAME]. Hoegg J.A.’s dissent in the Court of Appeal’s decision on the 2019 application provided an extensive analysis to ground her finding that [NAME] is [NAME] to be paid from the proceeds of sale of [NAME] under its [NAME]. I will not repeat that analysis. However, she noted that [NAME] attained considerable benefit from the [NAME] and if [NAME]’s claim were barred, not only would [NAME] receive nothing for its mortgage, but also [NAME] would gain $4 million. In the context of the uncertainty noted above, Hoegg J.A.’s reasons raise a significant doubt as to the justice of [NAME] receiving nothing from its mortgage while [NAME] received its initial benefit and the collateral that secured that benefit. [ 253 ]                      Balancing the public interest in the finality of litigation with the public interest in ensuring that justice is done in each case justifies allowing [NAME]’s claim to proceed on its merits.

IV.          Conclusion and Disposition [ 254 ]                      [NAME] and abuse of process by relitigation are essential doctrines for protecting the administration of justice and ensuring fairness for litigants. Yet if applied without due attentiveness, they may rob litigants of their cherished ability to have their cases heard on the merits — upsetting the balance between fairness and finality. In the context of summary proceedings, such as applications, this potential for injustice is significantly amplified. Inattentiveness to this context would discourage litigants from using summary proceedings, which save time, money, and judicial resources. Balance and caution are essential. [ 255 ]                      The case at bar demonstrates this imperative. Confusion and ambiguity over both what was to be decided in the applications below and what was actually decided by the court has led to claims that an admittedly valid $4 million mortgage, provided as collateral security between two sophisticated businesses, is all but worthless. This has occurred despite there being little substantive analysis regarding the actual terms of that mortgage. As a result of this confusion and ambiguity, arguments of [NAME] were addressed on appeal when they were not raised at first instance, and an alleged entitlement that was never properly before a court of competent jurisdiction for determination was deemed to be barred by estoppel. The merits of [NAME]’s claim should be heard in an application that is actually devoted to hearing them. [ 256 ]                      However, the record before our Court is insufficient to deal with [NAME]’s claim for entitlement. This question received little comment at first instance and was not addressed by the majority of the Court of Appeal. It was only lightly argued before our Court. As a result, I would allow the appeal and remit the matter back for a hearing of [NAME]’s claim on the merits. [ 257 ]                      As a final note, I agree with the Chief Justice that this is not the kind of case where an elevated costs award or an award against [NAME]’s solicitors is appropriate. Even had I found that this matter was barred by estoppel and constituted an abuse of process, I would not have made such an order. At best, this dispute can be characterized as being the result of confusion, not bad faith or sharp practice. Appeal dismissed with costs, Karakatsanis , [NAME] JJ. dissenting. Solicitors for the appellant: [redacted] Solicitors for the respondent: [redacted]