After being arrested for being obstreperous in an Ontario courtroom, Keith Penner filed a complaint against the two police officers who had arrested him, as well as a civil action against them, their chief of police and the regional police services board. The disciplinary proceedings found there was no misconduct on the part of the two cops, and the defendants in the civil action moved to have it dismissed on the grounds that the discipline hearing had fully resolved the issues underlying Penner's claim. The motion judge dismissed many of the latter's claim on the grounds of issue estoppel, and the Ontario Court of Appeal agreed: it would not work an injustice to bar Penner's civil claims on the basis that allowing the case to proceed would be to relitigate issues already dealt with in the discipline hearing.

The case went up to the Supreme Court of Canada, which divided on the issue of the effect of applying issue estoppel as a bar to civil claims: Penner v Niagara (Regional Police Services Board), 2013 SCC 19. The majority concluded that while there is (and should not be) a general rule precluding the application of issue estoppel to police discipline proceedings, courts have the discretion to refuse to apply it when it would work an injustice. For the majority, the Court of Appeal was wrong to conclude that the parties expected the discipline hearing to limit Penner's 'broader legal rights' in pursuing a civil action and it was unfair to allow an internal police process (presided over by the police chief's designate) to exonerate his boss in a parallel civil proceeding. In dissent, LeBel, Abella and Rothstein JJ thought that differences in purpose and procedure between administrative and court proceedings should not be used as an excuse to override the principle of finality which issue estoppel is intended to promote.

http://www.canlii.org/en/ca/scc/doc/2013/2013scc19/2013scc19.html