The High Court has dismissed a summary judgment application against an assignee, in which the applicant sought to use summary judgment granted in Canada as grounds for issue estoppels.
The Claimant, Seven, was part of the Hoffman group of companies. In 1999 members of the Hoffman group had contracted in the US with members of the Canwest group of companies to make films. As part of that agreement Canwest assigned certain copyrights.
Hoffman and Canwest subsequently fell out and court proceedings began. In 2005, while proceedings were ongoing, Canwest assigned its rights in the films to a UK company called Content. That assignment included the provision of an indemnity by Canwest to Content against any future action that Hoffman might take against it.
In 2011 a Canadian court gave summary judgment against Canwest. Subsequently, Seven brought proceedings against Content stating that, as Canwest’s assignee, it was bound by the Canadian judgment. Seven then brought summary judgment proceedings based on the Canadian Judgment.
Seven argued that because the matter had already been decided by the Canadian courts, the doctrine of foreign issue estoppel barred Content’s defence to its action. The High Court disagreed, it accepted that the Canadian court was a ‘competent court’ from which issue estoppel could arise; however, Content still had an arguable case that in Canada the judgment against Canwest would not suffice as res judicata (i.e. a binding final decision) against Content.
For Seven to have been successful it would also have to prove privity of existed title between Content and the Canwest group companies against whom the judgment had been given. Seven argued that issue estoppel should be governed by equitable principles and that only ‘equity’s darling’ (i.e. a bona fide purchaser without notice) could be assigned a title free of existing litigation – as otherwise one could simply assign a title to avoid being bound by the outcome of current litigation.
The Court disagreed. An assignee could simply be joined in the existing litigation to avoid the consequences Seven had described. Furthermore, fairness requires that to be bound by a judgment, a person must be party to the proceedings. There are very few and narrow exceptions to this rule. Hoffman could have joined Content in Canadian proceedings but had not done so, and it was not Content’s duty to intervene. Consequently, the Canadian judgment could not bind Content.
Finally, Seven failed to satisfy that the legal issues under the issue estoppel it sought were identical. The summary judgment application related to issues of US copyright; however, the UK proceedings involved the assignment of copyright and issues of whether that assignment was valid. Furthermore, because Content had raised a triable defence, and there was the interplay of US, UK and Canadian proceedings, there could be no identity of issues resolvable at summary judgment.