Res Judicata Prevents Landlord From Suing For Lost Rent feature image

Res Judicata Prevents Landlord From Suing For Lost Rent

While going to court is not often an enjoyable experience (after all, you go to court to conclude legal disagreements), there can be peace in knowing that once a trial has concluded it can usually mean the ordeal is behind you. In the courts, this right to conclude legal matters is protected by the doctrine of res judicata, which is Latin for “a matter settled.” Res judicata can take two forms. The first is that a matter that has been decided by a court cannot be tried again in the hopes of receiving a different verdict (this is not the same as an appeal, though). The second application of the doctrine prevents a legal matter from being parsed out into smaller issues that are then tried separately. Instead, all relevant issues about a matter should be heard together. A recent decision from the Provincial Court of Alberta looks at res judicata and how it is applied.

Rental arrears and missing items from an apartment

The matter first arrived before the courts in a trial held on April 23, 2017. The plaintiff had sued the defendant for rental arrears related to a residential apartment the defendant rented from the plaintiff. The plaintiff also alleged the defendant took a dishwasher and blinds/drapes that belonged to the plaintiff. Meanwhile, the defendant had counterclaimed for the loss of personal property as well.

The plaintiff was not successful at the 2017 trial because the property being rented was owned by a corporation, but the plaintiff (who was an officer of the corporation) sued in his own name. Because the wrong plaintiff was listed, and the plaintiff was not actually the landlord, the matter was dismissed.

This time around, the plaintiff filed the lawsuit under the corporation’s name. This time around, the court had to determine if the doctrine of res judicata applied.

In order to determine if an issue has been properly concluded by the courts and have res judicata applied, four criteria must first be satisfied.

Was there a final decision of a court of competent jurisdiction in the prior action?

The court was satisfied that the April 2017 decision was a final decision on both the claim and the counterclaim.

Were the parties to the subsequent litigation parties to or a privy with the parties to the prior action?

The individual representing the plaintiff was the plaintiff in the 2017 action, though this time he represented his numbered company. The original trial judge dismissed the action on the basis that the wrong party was listed as the plaintiff.

However, the court noted that the answer to this question turns on whether the corporation was “a privy with” the individual. A ‘privy” is someone who has a right to participate with a party or a participatory interest in the outcome. The court found that the corporation had a participatory interest in the outcome of the 2017 action. However, the corporation chose not to become involved.

Was the cause of action in the prior action separate and distinct?

This 2019 claims for relief stem from the same facts as the 2017 claims. While the 2019 claim included additional damages, the fact that they originated from the same set of facts is enough to satisfy this criteria.

Was the basis of the cause of action and the subsequent action argued or could it have been argued in the prior action if the parties had exercised reasonable diligence?

The court also found this criteria to be satisfied, stating the plaintiff’s cause of action and the defendant’s cause of action were both argued in 2017, and that the additional claims could have been argued there as well.

As a result of all four criteria being met, the court declared a mistrial on the basis that the doctrine of res judicata was applicable to the action. Both claims were dismissed, but the defendant was awarded costs.

The Advocacy Team at HMC Lawyers has over 130 years of combined experience advising clients and litigating on their behalf. We assist our clients, helping them avoid costly mistakes like those experienced by the plaintiff involved in the case discussed today.

Our lawyers know that strategic action at an early stage can help settle matters early and expeditiously, and help prevent prolonged and expensive litigation. We work closely with clients to help them make good business decisions when facing a legal dispute.

To make an appointment with one of our lawyers about a commercial or business litigation matter, contact us online or call 1-800-480-3534.

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