



COURT OF APPEAL FOR ONTARIO

CITATION: The Catalyst
    Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354

DATE: 20190502

DOCKET: C65431

Tulloch, Benotto and
    Huscroft JJ.A.

BETWEEN

The Catalyst Capital
    Group Inc.

Plaintiff (Appellant)

and

VimpelCom Ltd.
,
Globalive
    Capital Inc.
,
UBS Securities Canada Inc.,

Tennenbaum Capital
    Partners LLC
,
64NM Holdings GP LLC
,
64NM Holdings LP
,
LG
    Capital Investors LLC
,
Serruya Private Equity Inc.,

Novus
    Wireless

Communications Inc.,

West Face Capital Inc.
and
    Mid-Bowline Group Corp.

Defendants (
Respondents)

John E. Callaghan, Benjamin Na, Matthew Karabus, and
    David C. Moore, for the appellant

Orestes Pasparakis and Danny Urquhart, for the
    respondent VimpelCom Ltd.

James D.G. Douglas, Caitlin R. Sainsbury, and Graham
    Splawski, for the respondent Globalive Capital Inc.

Daniel S. Murdoch, for the respondent UBS Securities
    Canada Inc.

Michael Barrack, Kiran Patel, and Daniel Szirmak, for
    the respondents Tennenbaum Capital Partners LLC, 64NM Holdings GP LLC, 64NM
    Holdings LP and LG Capital Investors LLC

Lucas Lung, for the respondent Serruya Private Equity
    Inc.

Geoff R. Hall, for the respondent Novus Wireless
    Communications Inc.

Kent Thomson and Matthew Milne-Smith, for the
    respondent West Face Capital Inc.

Heard: February 19 and 20, 2019

On appeal from the judgment of Justice Glenn A. Hainey
    of the Superior Court of Justice, dated April 18, 2018, with reasons reported
    at 2018 ONSC 2471.

Tulloch J.A.:

OVERVIEW

[1]

This case
arises
    out of the failed attempt by the appellant, The Catalyst Capital Group Inc. (Catalyst),
    to purchase WIND Mobile Corp. (Wind). After its attempt to purchase Wind
    failed, Catalyst sued the respondents claiming more than $1 billion in damages.
    The motions judge dismissed the action on the basis of issue estoppel, cause of
    action estoppel, and abuse of process.

[2]

Catalyst appeals. For the reasons that follow, I would
    dismiss the appeal.

FACTS

(1)

Background

[3]

Wind is a Canadian telecommunications provider. From 2011 to 2014, it
    was owned by the respondents VimpelCom Ltd. (VimpelCom) and Globalive Capital
    Inc. (Globalive). VimpelCom held the majority of the total equity and Globalive
    held the majority of the voting equity.

[4]

In 2013, VimpelCom announced its intention to sell its interest in Wind.
    Catalyst began negotiating with VimpelCom to purchase that interest. The
    respondent UBS Securities Canada Inc. (UBS) advised VimpelCom in these
    negotiations.

[5]

The negotiations proceeded over many months and gave rise to two
    agreements. On March 22, 2014, Catalyst and VimpelCom negotiated a
    Confidentiality Agreement providing that the existence and content of their
    negotiations were confidential. On July 23, 2014, Catalyst and VimpelCom signed
    an Exclusivity Agreement pursuant to which VimpelCom could negotiate only with
    Catalyst and could not solicit other bids. The exclusivity period under this
    agreement expired on August 18, 2014.

[6]

By August 11, 2014, a deal seemed imminent. However, on this date,
    VimpelCom advised Catalyst that it wanted a $5 million to $20 million break fee
    and insisted on shortening the regulatory approval period for the deal from
    three months to two months. Catalyst refused to agree to these demands and
    ceased negotiations. The negotiations between Catalyst and VimpelCom proved
    unsuccessful. The exclusivity period expired on August 18, 2014 without a deal.

[7]

After the exclusivity period expired, a group of purchasers (the Consortium)
    successfully purchased VimpelComs interest in Wind. The Consortium concluded
    the deal within a month of the exclusivity periods expiry. The Consortium had
    made an unsolicited purchase proposal to VimpelCom on August 6, 2014. VimpelCom
    did not respond to the proposal until the exclusivity period under its
    Exclusivity Agreement with Catalyst expired. The members of the Consortium
    included the respondents West Face Capital Inc. (West Face), Tennenbaum
    Capital Partners LLC (Tennenbaum), 64NM Holdings LP (64NM LP), 64NM
    Holdings GP LLC (64NM GP), LG Capital Investors LLC (LG), Serruya Private
    Equity Inc., and Novus Wireless Communications Inc. Globalive was not initially
    part of the Consortium but joined the Consortium following the expiry of the
    exclusivity period on August 18, 2014.

(2)

Commencement of the

Moyse
Action

[8]

Brandon
Moyse (Moyse)
,
a junior analyst at Catalyst, left Catalyst and began working for West Face
    during the course of Catalysts negotiations with VimpelCom. He resigned from
    Catalyst after the signing of the Confidentiality Agreement but before the
    conclusion of the Exclusivity Agreement. Catalyst commenced an action against Moyse
    and West Face (the 
Moyse
Action) to enforce the non-competition clause in Moyses employment contract
    with Catalyst prior to the failure of Catalysts bid to acquire Wind.

[9]

Following the Consortiums purchase of VimpelComs interest in Wind,
    Catalyst broadened the scope of the

Moyse
Action. It amended its statement of claim to allege that Moyse had communicated
    confidential information to West Face about Catalysts acquisition strategy
    with respect to Wind. Catalyst alleged that West Face used the confidential
    information it received from Moyse to successfully acquire Wind from VimpelCom.
    The amendments included a claim for a constructive trust over West Faces
    interest in Wind.

(3)

Plan of Arrangement Proceedings

[10]

Not
    long after acquiring Wind, the Consortium agreed to sell the company to Shaw
    Communications in December 2015. The sale proceeded by a plan of arrangement
    under s. 182 of the
Business Corporations Act
, R.S.O. 1990, c. B.16, to
    enable Shaw to obtain clear title to Winds shares notwithstanding Catalysts
    constructive trust claim. Catalyst opposed the plan because it would release
    the constructive trust claim.

[11]

In
    his decision on the plan of arrangement, reported as
Re Mid-Bowline Group
    Corp
., 2016 ONSC 669, Newbould J. made several adverse findings against
    Catalyst:

1)

Catalyst deliberately
    delayed its claim against West Face to prevent it from selling its shares
    (para. 33);

2)

Catalyst knew the
    facts underlying its claim for inducing breach of contract in March 2015 but
    only mentioned this claim for the first time in oral argument at the plan of arrangement
    hearing in January 2016 (paras. 52, 56);

3)

Catalyst acted in bad
    faith by choosing to lie in the weeds until the hearing of the plan of
    arrangement application and then springing the new theory of inducing breach
    of contract (para. 59).

[12]

Newbould
    J. did permit Catalyst to pursue a mini-trial of its constructive trust claim
    in the plan of arrangement proceedings. However, he declined to permit Catalyst
    to advance its claim for inducing breach of contract in this mini-trial.
    Catalyst ultimately declined to pursue a mini-trial, and Newbould J. approved
    the plan of arrangement on February 3, 2016.

[13]

In
    early February 2016, following the revelation of Catalysts intention to bring
    a claim for inducing breach of contract, counsel for West Face explicitly
    invited Catalyst to amend its pleadings in the Moyse Action to include such a
    claim if Catalyst in fact intended to pursue it. Catalyst declined to do so.
    The parties to the
Moyse
Action
    proceeded to schedule trial dates for June 2016.

(4)

Commencement of Current Action

[14]

Five
    days before the trial in the

Moyse

Action was to begin, Catalyst issued its statement of claim against West
    Face and the other respondents to the current action (the Current Action)
    alleging breach of contract, breach of confidence, conspiracy, and inducing
    breach of contract. Counsel for West Face immediately wrote to Catalysts
    counsel, asserting that the Current Action was litigation by installment and an
    abuse of process. Catalyst did not take any steps in response to this protest
    and instead proceeded to trial in the Moyse Action.

(5)

Decisions in the

Moyse
Action

[15]

In
    reasons reported at 2016 ONSC 5271, 35 C.C.E.L. (4th) 242 (
Moyse
Trial Reasons), Newbould J. found
    that Catalyst had failed to make out each of the three elements of the breach
    of confidence claim. First, Moyse did not communicate any confidential
    information about Catalysts acquisition strategy to West Face. Second, West
    Face made no use of such information in acquiring Wind. Third, even if West
    Face made use of Catalysts confidential information, Catalyst suffered no
    detriment.

[16]

Newbould
    J.s findings on the detriment requirement of the breach of confidence cause of
    action are most relevant to this appeal. First, Newbould J. found that it was
    Catalysts failure to agree to the break fee that VimpelCom requested that
    caused Catalyst to cease negotiations with VimpelCom: para. 130. Second,
    Newbould J. found that there was no chance that Catalyst could have closed
    the deal with VimpelCom because Catalyst insisted on making the deal
    conditional on receiving regulatory concessions from Industry Canada, a
    condition VimpelCom was unwilling to agree to: para. 131.

[17]

In
    reasons reported at 2018 ONCA 283, 130 O.R. (3d) 675 (Moyse ONCA Reasons),
    this court dismissed Catalysts appeal. This court rejected Catalysts attack
    on Newbould J.s factual findings. Contrary to Catalysts submissions, this
    court found that Catalyst was free to amend its pleadings in the
Moyse
Action to include a claim for
    inducing breach of contract but elected not to do so: para. 40. Similarly, this
    court noted that evidence pertaining to the dealings between VimpelCom, on the
    one side, and West Face and the Consortium on the other was relevant to
    Catalysts claim and West Faces defence that it pursued its own strategies to
    purchase the Wind shares. The court noted that Catalyst did not object to any
    of this evidence at trial: paras. 41-42. The Supreme Court dismissed Catalysts
    application for leave to appeal: [2018] S.C.C.A. No. 295.

(6)

Decision of the Motions Judge: 2018 ONSC 2471

[18]

The
    respondents in the Current Action moved to dismiss Catalysts claims. Following
    this courts dismissal of Catalysts appeal in the
Moyse
Action, the motions judge released comprehensive
    reasons dismissing Catalysts claim (Motions Reasons). The motions judge dismissed
    the claim on the basis of issue estoppel and cause of action estoppel against
    VimpelCom and Globalive, as well as against Tennenbaum, 64NM LP, 64NM GP, and
    LG (the US Investors). While Globalive and the US Investors were not parties
    to the
Moyse
Action, the
    motions judge found that they were privies of West Face. The motions judge also
    dismissed Catalysts claim against all respondents as an abuse of process.
    Finally, the motions judge struck Catalysts claim of breach of contract
    against Globalive and UBS without leave to amend.

[19]

First,
    the motions judge applied issue estoppel to dismiss the claim against
    VimpelCom, Globalive, and the US Investors because he found that Catalyst was
    trying to re-litigate the issue of why Catalyst failed to acquire Wind from
    VimpelCom. For the motions judge, Catalysts claim was premised on a new theory
    that the Consortium conspired to induce VimpelCom to insist on a break fee
    condition that it knew Catalyst would reject. Newbould J., however, had found
    that Catalyst had no chance of concluding the deal. He found that there was no
    evidence that the Consortiums bid played any part in VimpelComs decision to
    request a break fee, and that it was VimpelComs refusal to agree to making the
    purchase conditional on receiving regulatory concessions that made a deal
    impossible. Thus, for Catalyst to succeed in the Current Action, the court
    would have to make a finding inconsistent with that of Newbould J. The motions
    judge declined to exercise his residual discretion not to apply issue estoppel
    because Catalyst was not entitled to a second bite at the cherry: para. 75.

[20]

Second,
    the motions judge applied cause of action estoppel to dismiss the claim against
    VimpelCom, Globalive, and the US Investors because he concluded that Catalysts
    claims in the
Moyse
Action and the
    Current Action arose from the same set of facts. The motions judge identified
    those facts as Catalysts failure to acquire Wind and Winds subsequent
    acquisition by the Consortium. Newbould J. determined this issue against
    Catalyst in the

Moyse
Action. While Catalyst advanced a new theory of liability in the Current
    Action, it could have and should have advanced this theory in the
Moyse

Action. Newbould J.s ruling
    in the plan of arrangement proceedings did not bar it from doing so.

[21]

Third,
    the motions judge dismissed Catalysts claims against all the respondents as an
    abuse of process because he found that Catalyst was attempting to re-litigate
    why its bid failed. He stressed two factors: first, Catalyst could have
    advanced its claims from the Current Action in the
Moyse

Action; and second, for Catalyst to succeed
    in the Current Action, the court would have to make factual findings
    inconsistent with those of Newbould J.

[22]

Finally,
    the motions judge struck Catalysts claim for breach of contract against
    Globalive and UBS without leave to amend. He found that Catalyst had failed to
    plead the required elements of a breach of contract claim because it failed to
    plead that Globalive and UBS were parties to the Exclusivity Agreement and the
    Confidentiality Agreement. He declined leave to amend because Catalyst had many
    opportunities to properly plead its breach of contract claim and no amendment
    could produce a viable cause of action.

ISSUES

[23]

The
    following issues arise on this appeal:

1)

Did the motions judge
    err in dismissing the Current Action on the ground of issue estoppel?

2)

Did the motions judge
    err in dismissing the Current Action on the ground of cause of action estoppel?

3)

Did the motions judge
    err in dismissing the Current Action as an abuse of process?

4)

Did the motions judge
    err in striking Catalysts pleadings of breach of contract against UBS and
    Globalive without leave to amend?

ANALYSIS

Standard of Review

[24]

This
    court owes deference to the motions judges application of the tests for issue
    estoppel, cause of action estoppel, and abuse of process. As the Supreme Court
    held in
Penner v. Niagara (Regional Police Services Board),
2013 SCC
    19, [2013] 2 S.C.R. 125, at para. 27, the decision to apply issue estoppel is
    discretionary. Accordingly, an appellate court should intervene only if the
    motions judge misdirected himself, came to a decision that is so clearly wrong
    as to be an injustice, or gave no or insufficient weight to relevant
    considerations. This same standard of review applies to the application of the
    tests for cause of action estoppel and abuse of process:
Law Society of
    Manitoba v. Mackinnon
, 2014 MBCA 28, 370 D.L.R. (4th) 385, at para. 31;
Burcevski
    v. Ambrozic
, 2011 ABCA 178, 505 A.R. 359, at paras. 7-9, leave to appeal
    refused, [2011] S.C.C.A. No. 388. I agree with the respondents that Catalyst
    has not pointed to an extricable error of law that would justify applying the correctness
    standard.

(1)

Did the motions judge err in dismissing the Current Action on the ground
    of issue estoppel?

(a)

The
    Law

[25]

In
Danyluk v. Ainsworth Technologies Inc.
, 2001 SCC 44, [2001] 2 S.C.R.
    460, at para. 25, the Supreme Court outlined the three requirements for issue
    estoppel:

1)

The same question has
    been decided;

2)

The judicial decision
    said to give rise to the estoppel is final; and

3)

The parties to the
    judicial decision or their privies were the same persons as the parties to the
    proceeding in which the estoppel is raised or their privies.

Even if all three requirements are met, however, the
    court still has a residual discretion not to apply issue estoppel when its
    application would work an injustice:
Danyluk
, at paras. 62-63.

[26]

The
    second and third of these requirements were not seriously contested in this
    court. Catalysts only argument on the third requirement is that parties can
    only be privies if the same question is involved in both proceedings. Catalyst
    does not argue that, should this court find that the same question is involved
    in both proceedings, the US Investors and Globalive were insufficiently
    connected to West Face to be its privies. Accordingly, the focus of these
    reasons is on the first requirement, that the question decided in the two
    proceedings be the same, as well as on the residual discretion.

[27]

Different
    causes of action may have one or more material facts in common. Issue estoppel
    prevents re-litigation of the material facts that the cause of action in the
    prior action embraces:
Danyluk
, at para. 54. However, the question out
    of which the estoppel arises must be fundamental to the decision arrived at
    in the prior proceedings:
Angle v. M.N.R.
, [1975] 2 S.C.R. 248, at p.
    255. Accordingly, the question must be necessarily bound up with the
    determination of the issue in the prior proceeding for issue estoppel to apply:
Danyluk
, at paras. 24, 54.

[28]

Catalyst
    argues that the motions judge erred in applying issue estoppel for the
    following reasons:

1)

Newbould J.s findings
    in the Moyse Action were obiter and collateral to his decision;

2)

Newbould J.s findings
    are merely overlapping facts and are incidental to Catalysts claims in the Current
    Action;

3)

Catalyst may be
    entitled to a remedy without any inconsistent findings; and

4)

The exercise of
    residual discretion favours not applying issue estoppel.

[29]

I
    disagree and would reject this ground of appeal.

(b)

Newbould
    J.s Findings Are Not Obiter

[30]

Catalyst
    submits that Newbould J.s findings are in obiter and collateral because they
    were not necessary to his decision. For Catalyst, the central issue in the
Moyse

Action was whether Moyse
    passed confidential information to West Face and since Newbould J. found that Moyse
    had not, his other findings were collateral.

[31]

I
    would reject this submission. Catalysts submission is premised on the
    assumption that the only fundamental issue in the
Moyse

Action was whether Moyse passed confidential
    information to West Face. However, to succeed in its breach of confidence
    claim, Catalyst was also required to prove that West Face used confidential
    information in its bid for Wind and that this misuse caused detriment to
    Catalyst:

Moyse

ONCA
    Reasons, at para. 8.

[32]

Canadian
    courts have consistently rejected the argument that a judicial finding is merely
    dictum or collateral because there was another sufficient basis for the judges
    decision. In
Stuart v. Bank of Montreal
(1909), 41 S.C.R. 516, the
    Supreme Court rejected the argument that a judicial finding that is a distinct
    and sufficient ground for its decision [is] a mere dictum because there is
    another ground upon which, standing alone, the case might have been
    determined: p. 534, per Duff J. (Fitzpatrick C.J. concurring), pp. 539-540,
    per Anglin J., quoting
New South Wales Taxation Commissioners v. Palmer
,
    [1907] A.C. 179 (P.C.), at p. 184. More recently, the Federal Court of Appeal
    held that a judges finding on one necessary element of a claim gave rise to
    issue estoppel even though the judge had earlier in his reasons reached a
    conclusion on another element that was sufficient to dispose of the claim:
Pharmascience
    Inc. v. Canada (Health)
, 2007 FCA 140, 282 D.L.R. (4th) 145, at paras.
    34-35.

[33]

As
    West Face submits, accepting Catalysts argument would lead to absurd
    consequences, because it would make the applicability of issue estoppel
    dependent on the order in which the court chooses to address issues in its
    reasons. Baron Bramwells statement in
Membery v. The Great Western Railway
    Co.
(1889), 14 App. Cas. 179 (H.L.), at p. 187, cited in
Stuart
by
    Anglin J. at p. 539, provides a complete answer to Catalysts argument:

Of course it is in a sense not
    necessary that I should express an opinion on this as the ground I have first mentioned,
    in my opinion, disposes of the case. But if, instead of mentioning that ground
    first, I had mentioned the one I am now dealing with, it would, on the same
    reasoning, be unnecessary to mention that. What I am saying is not obiter, not
    a needless expression of opinion on a matter not relevant to the decision.
    There are two answers to the plaintiff; and I decide against him on both; on
    one as much as on the other.

(c)

Newbould
    J.s Findings Are Central to the Current Action

[34]

Catalyst
    further submits that Newbould J.s findings are merely overlapping facts such
    that the same question was not determined. For Catalyst, the Moyse Action was
    about confidential information that Moyse received and transmitted. In
    contrast, Catalyst submits that this action concerns the transmission of
    confidential information by VimpelCom and/or UBS to the Consortium in breach of
    the Confidentiality Agreement and the Exclusivity Agreement. As a result, it
    follows that Newbould J.s finding that even if Moyse did pass on confidential
    information to West Face, and such confidential information did not cause
    detriment to Catalyst, it does not mean that confidential information that
    VimpelCom and/or UBS leaked to the Consortium did not cause detriment to
    Catalyst.

[35]

I
    do not accept this argument. It is facially appealing. However, it is premised
    on a misunderstanding of what the parties put at issue in the
Moyse

Action.

[36]

The
Moyse

Action necessarily
    concerned the overall conduct of West Face and the other Consortium members. As
    Catalyst had no direct evidence that
Moyse
gave West Face confidential information, it submitted that the court should
    infer from all the evidence that he did so:
Moyse
Trial Reasons, at para. 7. As Newbould J. recognized, this
    required the court to examine West Faces overall course of conduct to
    determine if there was a transfer of Catalysts confidential information or if there
    were other explanations for West Faces conduct
:
Moyse

Trial Reasons, at paras.
    72-73. Therefore, whether West Face received any confidential information in
    breach of the Confidentiality Agreement and the Exclusivity Agreement, and
    whether West Faces use of confidential information caused any detriment to
    Catalyst, were live issues at trial.

[37]

Newbould
    J. was thus required to analyze whether the conduct of West Face and other
    Consortium members was consistent with the use of confidential information and
    whether there was any evidence that the use of confidential information caused
    Catalyst a detriment. He was entitled to draw inferences from the evidence as
    to what would likely have happened but for a misuse of confidential information:
Cadbury Schweppes Inc. v. FBI Foods Ltd.
, [1999] 1 S.C.R. 142, at
    para. 73. As the motions judge noted, West Face invited Newbould J. to make
    findings of fact that Catalyst failed to acquire Wind because it refused
    VimpelComs demand for a break fee and because it would have been unable to
    obtain regulatory concessions. Catalyst did not object to any of these proposed
    findings of fact as being outside of the scope of the Moyse Action: Motions
    Reasons, at para. 40. In fact, Catalyst elicited considerable evidence on the
    dealings between VimpelCom and UBS, and the Consortium, and urged Newbould J.
    to make certain findings in respect of these dealings:
Moyse
ONCA Reasons, at para. 42. Catalyst
    cannot now complain that it was improper for Newbould J. to make contrary
    findings or that those contrary findings were not essential to his decision.

[38]

I
    thus do not accept Catalysts argument that Newbould J.s findings on detriment
    were restricted to detriment from confidential information transmitted by
Moyse
. Perhaps this would have been the
    case had Catalyst litigated the
Moyse

Action differently or had it produced direct evidence of leaks of
    confidential information by Moyse. However, Catalyst chose to put at issue not
    only the Consortiums entire conduct, but also the reasons why Catalyst failed
    to acquire Wind and whether misuse of confidential information by the
    Consortium had anything to do with that failure. As this court found, Newbould
    J. did not overstep his bounds in finding against Catalyst on these issues:
Moyse
ONCA Reasons, at paras. 39-42.

(d)

Newbould
    J.s Findings Would Bar Catalyst from Establishing Liability

[39]

Catalyst
    submits that Newbould J.s findings about why it failed to acquire Wind would
    not bar it from gaining a remedy for its claims. Catalyst argues that, even
    accepting Newbould J.s findings, it is nonetheless entitled to recovery. I
    would reject this submission.

[40]

In
    its argument, Catalyst focuses in particular on its claims against West Face,
    Globalive, and the US Investors for breach of confidence and inducing breach of
    contract. Relying on certain statements in
Cadbury Schweppes
that
    establish that the court has jurisdiction to grant a remedy dictated by the
    facts of the case rather than strict doctrinal considerations, Catalyst submits
    that it may be entitled to equitable remedies such as an accounting of profits
    even if it suffered no financial loss.

[41]

However,
    the jurisprudence is clear that a claimant must prove detriment to establish
    liability for breach of confidence, inducing breach of contract, and
    conspiracy:
Lysko v. Braley
(2006), 79 O.R. (3d) 721 (C.A.), at paras.
    17-19;
Persaud v. Telus Corporation
, 2017 ONCA 479, at para. 26;
Cement
    LaFarge v. B.C. Lightweight Aggregate
, [1983] 1 S.C.R. 452, at pp.
    471-472. There is no contradiction between this requirement to prove detriment
    and the passages from
Cadbury Schweppes
that Catalyst points to.
Lysko
explicitly accepted that
Cadbury Schweppes
adopted a broad definition
    of detriment but confirmed the requirement: paras. 18-19. Accordingly, Newbould
    J.s findings would bar Catalyst from establishing the liability of West Face,
    Globalive, and the US Investors for breach of confidence, inducing breach of
    contract, and conspiracy.

[42]

Nor
    do I accept that the fact that detriment is not required to establish liability
    for breach of contract changes my analysis. Catalyst did not plead breach of
    contract against West Face or the US Investors. Admittedly, Catalyst did plead
    breach of contract against Globalive. However, as I will explain later in these
    reasons, the motions judge correctly struck Catalysts pleading of breach of
    contract against Globalive as disclosing no reasonable cause of action without
    leave to amend. Accordingly, Catalyst was required to prove detriment for each
    of the causes of action it validly pled against West Face, Globalive, and the
    US Investors.

[43]

Moreover,
    I do not place weight on the availability of alternative remedies. Catalyst did
    not plead any of the alternative remedies such as an accounting for profits
    that it now refers to on appeal. Instead, it repeatedly pled that the breach of
    confidence and inducement of breach of contract caused it to fail to acquire
    Wind. This is a precise inconsistency with Newbould J.s findings.

[44]

These
    inconsistencies also lead me to reject Catalysts submission that the fact that
    it has pled different causes of action in the Current Action means issue
    estoppel cannot apply. Issue estoppel applies precisely when there are
    different causes of action as long as those causes of action have a material
    fact in common:
Danyluk
, at para. 54. For instance, in
Danyluk
,
    the claim to unpaid commissions was a material fact in both the administrative
    proceeding under the
Employment Standards Act
, R.S.O. 1990, c. E.14,
    and the civil claim for wrongful dismissal: para. 55. In the present case, the
    motions judge correctly identified that the need to prove detriment, namely
    that the respondents conduct caused Catalyst to fail to acquire Wind, was a
    material fact common to the relevant causes of action Catalyst asserted in both
    actions.

[45]

Lastly,
    I do not accept that issue estoppel cannot apply even in the face of Newbould
    J.s findings because those findings simply overlap with the issues in the
    Current Action and are not fundamental to his decision. Comparing the present
    case with the Supreme Courts decision in
Angle

illustrates
    that Newbould J.s findings were not merely overlapping.
Angle
was a
    case involving merely overlapping facts. There, Dickson J. concluded that a
    finding that a shareholder was not under an obligation to pay a corporation for
    a benefit was not legally indispensable to the judgment in the prior tax
    proceeding as this indebtedness was only relevant to a subsidiary issue. There
    was no necessary inconsistency between the shareholder being obligated to pay
    the corporation and the decision that the shareholder had received a taxable
    benefit: pp. 255-256. In contrast, here Newbould J.s finding that there was no
    chance Catalyst could have successfully concluded a deal with VimpelCom made it
    impossible for Catalyst to succeed on its breach of confidence claim in the
Moyse

Action. This finding
    similarly makes it impossible for Catalyst to succeed on its claims in the
    Current Action against West Face, Globalive, and the US Investors for breach of
    confidence, inducing breach of contract, and conspiracy without a court having
    to make inconsistent findings, as proof of loss is an element of those claims.

(e)

Residual
    Discretion

[46]

Catalyst
    argues that the motions judge erred in not exercising his residual discretion
    to permit Catalysts action to proceed. Relying on
Danyluk
, Catalyst
    argues that the motions judges analysis was cursory and that he erred in
    principle by failing to address the factors for and against the exercise of the
    discretion. Catalyst submits that applying issue estoppel results in an injustice
    to Catalyst because there has been no discovery of VimpelCom or UBS regarding
    the circumstances surrounding the sale of VimpelComs shares of Wind.

[47]

I
    would not accept this argument. The court does have residual discretion, but
    its exercise is more limited in nature in this case because the Moyse Action
    was a court proceeding, not an administrative proceeding as in
Danyluk
:
Danyluk
, at para. 62. The passage in the motions judges reasons where
    he explicitly referred to residual discretion was brief. However, his conclusion,
    at para. 75, that Catalyst failed to put its best foot forward and is not
    entitled to a second bite at the cherry was reasonable. It must be read in
    light of the motions judges extensive reasons addressing Catalysts failure to
    advance its current claims in the
Moyse

Action and its attempt to re-litigate Newbould J.s findings in the

Moyse

Action.

[48]

Finally,
    I am not convinced that the application of issue estoppel in these
    circumstances would work an injustice. In
Danyluk
, the court found
    such an injustice because the appellants claim to employment commissions was
    never properly adjudicated due to procedural unfairness in the administrative
    proceedings the appellant pursued before commencing a civil action: para. 80.
    In contrast, in this case, Catalyst received a procedurally fair trial, the
    result of which this court upheld on appeal. While issue estoppel bars Catalyst
    from eliciting evidence and advancing new theories of liability against West
    Face, this is not a manifest injustice since Catalyst could have elicited that
    evidence and advanced those theories in the
Moyse

Action.

(2)

Did the motions judge err in dismissing the Current Action on the ground
    of cause of action estoppel?

(a)

The
    Law

[49]

The
    purpose of cause of action estoppel is to prevent the re-litigation of claims
    that have already been decided. As expressed by Vice Chancellor Wigram in
Henderson
    v. Henderson
(1843), 67 E.R. 313, at p. 319, it requires parties to bring
    forward their whole case. The court thus has the power to prevent parties from
    re-litigating matters by advancing a point in subsequent proceedings which
    properly belonged to the subject of the [previous] litigation.

[50]

For
    cause of action estoppel to apply, the basis of the cause of action and the
    subsequent action either must have been argued or could have been argued in the
    prior action if the party in question had exercised reasonable diligence:
Grandview
    v. Doering
, [1976] 2 S.C.R. 621, at p. 638. That said, I accept Catalysts
    submission that it is not enough that the cause of action could have been
    argued in the prior proceeding. It is also necessary that the cause of action
    properly belonged to the subject of the prior action and should have been
    brought forward in that action:
Hoque v. Montreal Trust Co. of Canada
,
    1997 NSCA 153, 162 N.S.R. (2d) 321, at para. 37, leave to appeal refused,
    [1997] S.C.C.A. No. 656;
Pennyfeather v. Timminco Ltd.
, 2017 ONCA 369,
    at para. 128, leave to appeal refused, [2017] S.C.C.A. No. 279.

[51]

Like
    issue estoppel, cause of action estoppel also requires a final judicial
    decision and that the parties to that decision were the same persons or the
    privies to the parties to the present proceeding:
Pennyfeather
, at
    para. 128;
Canam Enterprises Inc. v. Coles
(2000), 51 O.R. (3d) 481
    (C.A.), at para. 21, revd on other grounds, 2002 SCC 63, [2002] 3 S.C.R. 307.
    As these requirements were not seriously contested before us, I will not
    discuss them further.

(b)

Catalyst
    Could Have Brought Forward its Claims in the
Moyse
Action

[52]

Catalyst
    submits that cause of action estoppel should not apply because it could not have
    brought forward its current claims in the
Moyse

Action. In particular, Catalyst argues that it was barred from advancing
    its claim for inducing breach of contract in the Moyse Action. Newbould J.,
    however, found that Catalyst was aware of its claim for inducing breach of
    contract by March 2015 and that it chose to lie in the weeds rather than
    assert its claim:
Mid-Bowline
, at para. 59. Catalyst never took steps
    to amend its pleadings in the
Moyse

Action to add a claim for inducing breach of contract in the
Moyse
Action even though West Face
    explicitly invited it to four months prior to the trial. This case is thus analogous
    to
Martin v. Goldfarb
, [2006] O.T.C. 629 (S.C.), where Perell J.
    applied cause of action estoppel against corporate claims when the individual
    plaintiff had the opportunity to join the corporate claims to a previous
    individual action but failed to do so: at paras. 70, 78-79.

[53]

Furthermore,
    I would reject Catalysts argument that the possibility that new evidence would
    be obtained from VimpelCom and UBS regarding the sale of Wind in the Current
    Action means that cause of action estoppel should not apply. New evidence is
    only a basis to re-open litigation if it would entirely chang[e] the case and
    the party could not have reasonably ascertained it through reasonable
    diligence:
Grandview
, at pp. 636-637. Even assuming that the new
    evidence was so important as to entirely change the case, Catalyst could have
    ascertained this evidence through reasonable diligence in the
Moyse

Action. Catalyst knew of
    the facts underlying its claim for inducing breach of contract by March 2015.
    It thus had ample time to elicit this evidence at the trial of the
Moyse
Action. In
Grandview
, the
    plaintiff learned of a new theory of liability only following the trial of the
    first action, and the majority of the Supreme Court still applied cause of
    action estoppel: pp. 632-633. Here, the case for applying cause of action
    estoppel is even more compelling, as Catalyst was aware of its new theory of
    liability more than a year prior to the trial of the
Moyse
Action.

(c)

Catalyst
    Should Have Brought Forward its Claims in the Moyse Action

[54]

Catalysts
    central argument on cause of action estoppel is that it was appropriate for
    Catalyst to advance its current claims in a new action rather than amending its
    pleadings in the

Moyse

Action. Catalyst submits that the focus of the
Moyse
Action was the leak of confidential information by Moyse.
    In contrast, the Current Action focuses on breaches of the Exclusivity and
    Confidentiality Agreements that West Face allegedly induced. The Current Action
    thus involves separate and distinct causes of action that flow from distinct
    legal relationships. Catalyst submits that the factors
Hoque
outlined to
    guide the courts determination of whether a party should have raised a matter
    in a prior proceeding show that Catalyst should not have advanced its current
    claims in the
Moyse

Action.

[55]

I
    do not agree. In
Hoque
, at para. 37, Cromwell J.A. (as he was then) outlined
    several factors that are relevant to whether a matter should have been raised
    in a prior proceeding. These include the following:

1)

Whether the second
    proceeding is a collateral attack against the earlier judgment;

2)

Whether the second
    proceeding relies on evidence that could have been discovered in the past
    proceeding with reasonable diligence; and

3)

Whether the second
    proceeding relies on a new legal theory that could have been advanced in the
    past proceeding.

[56]

These
    three factors weigh against Catalyst in this case. As I have already found, the
    Current Action would require the court to make findings inconsistent with those
    of Newbould J. in order for Catalyst to establish liability for conspiracy,
    breach of confidence, and inducing breach of contract. It thus involves a
    collateral attack against Newbould J.s trial decision. Moreover, as I have previously
    stated, the new evidence that Catalyst points to could have been discovered in
    the
Moyse

Action
    through reasonable diligence.

[57]

The
    same is true of Catalysts new legal theory that Globalive and UBS communicated
    confidential information to the Consortium and the Consortium used this
    information to induce VimpelCom to breach the Exclusivity and Confidentiality
    Agreements. I agree with Catalyst that its legal theory of causation in the
    Current Action is distinct from its theory of causation in the
Moyse
Action. However, I accept West
    Faces submission that this is analogous with
Grandview
, where the
    majority of the Supreme Court applied cause of action estoppel. In
Grandview
,
    the subject matter of both actions was that water flowed from the defendants
    land onto the plaintiffs. Only the theory as to which way the water reached
    the plaintiffs land changed between the two actions. Similarly, in this case,
    the subject matter of both the
Moyse

Action and the Current Action is the flow of confidential information to
    West Face. While Catalyst does have a different legal theory in this action,
    that theory only outlines a different means by which confidential information
    flowed to and was used by West Face.

[58]

Nor
    am I persuaded that the different legal claims Catalyst has advanced in this
    action bar the operation of cause of action estoppel. I acknowledge that the
    existence of a separate and distinct cause of action is a factor that might
    weigh against applying cause of action estoppel:
Hoque
, at para. 37.
    However, as Sharpe J. (as he was then) held in
Las Vegas Strip Ltd. v.
    Toronto (City)

(1996), 30 O.R. (3d) 286 (Gen. Div.), at p. 297,
    affd (1997), 32 O.R. (3d) 651 (C.A.), the law does not permit the manipulation
    of the underlying facts to advance a new legal theory. Similarly, this court
    has held that cause of action estoppel bars a subsequent lawsuit relating to
    the same loss being advanced on a
different cause of
    action
:
Lawyers Professional Indemnity Co. v. Rodriguez
, 2018
    ONCA 171, 139 O.R. (3d) 641, at para. 47, leave to appeal refused, [2018]
    S.C.C.A. No. 128 (Emphasis added).

[59]

I
    find that Sharpe J.s decision in
Las Vegas Strip
is analogous and
    confirms that cause of action estoppel should apply even though Catalyst has
    advanced distinct legal claims in the Current Action. In
Las Vegas Strip
,
    a strip club unsuccessfully argued that its operation was a legal
    non-conforming use under a municipal bylaw in a prior proceeding. The strip
    club then commenced a subsequent proceeding alleging that the bylaw was invalid
    on municipal law and
Charter

grounds. Sharpe J. acknowledged
    that the strip club had raised new legal arguments in the second proceeding:
    p. 298. However, he found that it was barred from doing so because the prior
    proceedings put squarely in issue the same matter central to the second
    proceeding, namely the strip clubs legal right to operate. The strip club was
    free to raise the municipal law and
Charter
arguments in the prior
    proceeding but elected not to do so: pp. 295-296. This court affirmed Sharpe
    J.s decision on the same basis: p. 651.

[60]

Similarly,
    in this case Catalyst was free to raise its inducing breach of contract and
    conspiracy claims in the
Moyse

Action but elected not to do so. I acknowledge, as Sharpe J. did, that
    Catalyst has raised new legal arguments. However, the motions judge reasonably
    concluded, at para. 78 of his reasons, that these new legal arguments arose
    from the same set of facts, namely Catalysts failure to acquire Wind and its
    acquisition by the Consortium. Catalysts current claims certainly sought to
    add certain facts related to VimpelCom and UBSs conduct and to subtract other
    facts related to Moyses conduct. However, as Sharpe J. held in
Las Vegas
    Strip
, attempting to add or subtract facts does not change the reality that
    the underlying subject matter is the same and all of the facts were available
    in the earlier action: p. 297.

(3)

Did the motions judge err in dismissing the Current Action as an abuse
    of process?

(a)

The
    Law

[61]

It
    is well-recognized that the re-litigation of issues that have been before the
    courts in a previous proceeding will create an abuse of process. As stated by
    the Supreme Court of Canada in
Toronto (City) v. C.U.P.E., Local 79
,
    2003 SCC 63, [2003] 3 S.C.R. 77, at para. 52:

[F]rom the systems point of view, relitigation
    carries serious detrimental effects and should be avoided
unless
the circumstances dictate that relitigation is in fact necessary to
    enhance the credibility and the effectiveness of the adjudicative process as a
    whole.

[62]

The
    abuse of process doctrine applies to prevent the attempt to impeach a judicial
    finding by re-litigation in a different forum:
C.U.P.E.
, at para. 46. It
    is a flexible doctrine unencumbered by the mutuality of parties requirement
    that applies to issue estoppel and cause of action estoppel:
C.U.P.E.,
at para. 37. While abuse of process does include a finality requirement, that
    requirement is met in this case because the Supreme Court dismissed Catalysts
    application for leave to appeal from this courts decision in the Moyse Action.

[63]

The
    need to protect the integrity of the adjudicative functions of courts compels a
    bar against re-litigation:
C.U.P.E
.
, at para. 43. If
    re-litigation leads to the same result, there will be a waste of judicial
    resources, and if it leads to a different result, the inconsistency will
    undermine the credibility of the judicial process:
C.U.P.E.
, at para.
    51. The law thus seeks to avoid re-litigation primarily for two reasons: first,
    to prevent overlap and wasting judicial resources; and second, to avoid the
    risk of inconsistent findings:
Petrelli v. Lindell Beach Holiday Resort
    Ltd.
, 2011 BCCA 367, 24 B.C.L.R. (5th) 4, at para. 71; see also
C.U.P.E.
,
    at para. 51; Donald J. Lange,
The Doctrine of Res Judicata in Canada
,
    4th ed. (Markham, ON: LexisNexis Canada Inc., 2015), pp. 217-218.

(b)

The Current
    Action is an Abuse of Process

[64]

The
    motions judge rightly concluded that Catalysts Current Action was an abuse of
    process as against all respondents because the Current Action is an attempt to
    re-litigate the findings in the
Moyse
Action.

[65]

Both
    of the concerns underlying the abuse of process doctrine are present here. Catalysts
    claim is abusive both because: (a) it directly overlaps with the issues that
    were before the court in the
Moyse

Action; and (b) it can
only
be successful if the court rejects the
    findings made by Newbould J. For the reasons already outlined under issue
    estoppel and cause of action estoppel, Catalyst is trying to re-litigate
    Newbould J.s factual finding that Catalysts own actions caused its failure to
    acquire Wind. This is an abuse of process.

[66]

Moreover,
    Catalysts behaviour exhibits classic signs of re-litigation. Newbould J. found
    that Catalyst chose to lie in the weeds for strategic reasons and then to
    spring a new theory at the last moment:

Mid-Bowline Group
, at
    para. 59. Catalyst filed its statement of claim in the Current Action mere days
    before the trial of the
Moyse
Action. This is analogous to
Bear v. Merck Frosst Canada & Co.
,
    2011 SKCA 152, 345 D.L.R. (4th) 152,

where a law firm directed the
    commencement of a new class action merely a day after it exhausted its appeal
    processes of the dismissal of the previous class action. In that case, the
    Saskatchewan Court of Appeal found that there was nothing in the second class
    action that could not have been advanced in the first class action and that the
    law firm was attempting to litigate by installment: paras. 76-78.
    Accordingly, the court found that the new class action was an abuse of process.

[67]

Catalysts
    submission that abuse of process is not intended to prevent the raising of a
    separate cause of action in a subsequent action should be rejected. As
    previously discussed, Catalyst could have raised the claims it advances in the
    Current Action in the
Moyse

Action.
    It elected not to. As this court recently held, abuse of process applies where
    issues could have been determined but were not:
Winter v. Sherman Estate
,
    2018 ONCA 703, 42 E.T.R. (4th) 181, at para. 7. Moreover, it also applies to
    prevent re-litigation of previously decided facts:
Winter
, at para. 8.
    As previously stated, for Catalyst to succeed in the Current Action, a court
    would have to reach different factual findings from those of Newbould J. on the
    reasons why Catalyst failed to acquire Wind.

[68]

Moreover,
    none of the factors the Supreme Court outlined in
C.U.P.E.
that would
    permit re-litigation apply in this case. The Supreme Court stated, at para. 52,
    that it might be appropriate to permit re-litigation in the following
    circumstances:

1)

When the first
    proceeding is tainted by fraud or dishonesty;

2)

When fresh, new
    evidence, previously unavailable, conclusively impeaches the original results;
    or

3)

When fairness dictates
    that the original result should not be binding in the new context.

[69]

Catalyst
    does not allege that the first proceeding is tainted by fraud or dishonesty. To
    the extent that there is a possibility that new evidence from VimpelCom and UBS
    regarding the sale of Wind might impeach the original results, this evidence
    was not previously unavailable and could have been adduced by Catalyst at the
    trial of the
Moyse

Action.
    As for the fairness factor, the Supreme Court clarified that this would apply
    if the stakes in the original proceeding were too minor to give a party an
    adequate incentive to litigate:
C.U.P.E.
, at para. 53. However, the
    financial stakes in the
Moyse

Action were not minor and Catalyst robustly litigated that proceeding.

[70]

Catalysts
    reliance on Goudge J.A.s dissenting reasons in
Canam
, which the
    Supreme Court subsequently upheld, is misplaced.
Canam
is
    distinguishable on the facts because it concerned a claim that a party could
    not have raised in prior proceedings, not one which a party could have raised
    but chose not to. In
Canam
, a purchaser first sued the vendor in
    contract. The court found that there had been a misrepresentation by the vendors
    realtors but dismissed the purchasers claim because of the doctrine of merger.
    The purchaser then sued its lawyer in tort for professional negligence. The
    lawyer commenced third party proceedings against the realtors in which he
    sought to add them as joint tortfeasors for their misrepresentations to the
    purchaser. As neither the lawyer nor the realtor were parties to the purchasers
    original contractual action against the vendor, Goudge J.A. found that the
    lawyer was not attempting to re-litigate a claim because he had not and could
    not have raised this issue previously: para. 58. In contrast, in this case
    Catalyst could have raised its claims in the Current Action but elected not to
    do so.

(4)

Did the motions judge err in striking Catalysts pleadings of breach of
    contract against UBS and Globalive without leave to amend?

[71]

The
    motions judge struck Catalysts pleadings of breach of contract against UBS and
    Globalive without leave to amend. Catalyst makes two submissions. First, it
    argues that the motions judge erred in striking the pleadings because Catalyst
    did plead all elements of privity of contract against both Globalive and UBS.
    Second, Catalyst submits that the motions judge should have granted leave to
    amend because an amendment could have cured any deficiencies without
    incompensable prejudice to the respondents.

[72]

I
    do not agree.

[73]

First,
    the motions judge correctly concluded that the pleadings did not disclose a
    reasonable cause of action because they failed to plead privity of contract. A
    claim for breach of contract must contain sufficient particulars to identify
    the parties to the contract:
McCarthy Corporation PLC v. KPMG LLP
,
    [2007] O.J. No. 32 (S.C.), at para. 26. Similarly, it is trite law that,
    subject to certain exceptions that are not applicable here, a non-party to a
    contract cannot be sued for breach of contract:
Greenwood Shopping Plaza
    Ltd. v. Beattie
, [1980] 2 S.C.R. 228, at pp. 236-238.

[74]

As
    the motions judge found, Catalyst failed to plead that either Globalive or UBS
    were parties to the Exclusivity Agreement or the Confidentiality Agreement. Catalysts
    statement of claim listed the parties to each agreement without including
    either Globalive or UBS. While Catalyst did plead that UBS was bound by these
    agreements, the motions judge correctly concluded that as a matter of law UBS
    could not be bound to an agreement to which it was not a party in these
    circumstances. With respect to Globalive, the motions judge found that the claim
    must also fail. Catalysts theory is that Globalive is vicariously liable for
    the actions of its principal, Anthony Lacavera (Lacavera), who Catalyst in
    turn pleads was bound not to undermine the Exclusivity Agreement. However,
    Catalyst pleads that Lacavera was not a party to the Exclusivity Agreement, so
    this claim similarly fails.

[75]

Second,
    the motions judges decision to deny leave to amend was reasonable. The
    decision whether or not to grant leave to amend is a discretionary decision
    entitled to deference:
RWDI Air Inc. v. N-SCI Technologies Inc.
, 2015
    ONCA 817, at para. 14. The motions judge denied leave to amend both pleadings because
    Catalyst had many opportunities to properly plead its breach of contract claims
    and since the absence of any contract between Catalyst and Globalive or UBS
    meant that no amendments could make the pleading legally tenable. Both of these
    findings are consistent with jurisprudence establishing that a court may deny
    leave to amend where a party has had many opportunities to properly plead the
    claims and where amendments could not make the pleadings legally tenable: see
Cavanaugh
    v. Grenville Christian College
, 2013 ONCA 139, 360 D.L.R. (4th) 670, at
    paras. 82-83;
RWDI
, at para. 14.

CONCLUSION

[76]

In
    all the circumstances, I would dismiss the appeal.

[77]

With
    respect to the issue of costs, the parties agreed that should the disposition
    of this appeal be in favour of the respondents, then they should be awarded
    their costs collectively fixed in the amount of $300,000. Accordingly, costs are
    hereby awarded to the respondents collectively, fixed in the mount of $300,000,
    inclusive of all taxes and disbursements.

Released: M.H.T. May 2, 2019

M. Tulloch J.A.

I agree. M.L. Benotto
    J.A.

I agree. Grant
    Huscroft J.A.


