Words and Phrases - "res judicata"

On the taxpayer’s appeal in the Tax Court (“TCC”), regarding the recognition of income account losses, being allowed, he was awarded costs on the usual scale, and then successfully brought a motion to increase such costs award based on a settlement offer that he had made, which costs award was appealed by the Crown but with such appeal subject to a stay order. The TCC judgment on the loss recognition issue was then reversed in the Federal Court of Appeal (“FCA”), whose award of costs on the usual scale to the Crown was left undisturbed as a result of the taxpayer’s appeal to the Supreme Court (the “SCC”) being dismissed.

Now before the FCA was the Crown's appeal of the enhanced costs award in the TCC proceedings because the Crown's settlement offer, that it had made, was not accepted. Stratas JA found that the Crown’s appeal should be dismissed for two reasons:

• Since the SCC dismissed the appeal from the FCA judgment, it left that judgment to stand, including its award of costs for the TCC proceedings. Since the entitlement for costs in the TCC proceedings had been decided, it could not now be relitigated in the current appeal by virtue of the res judicata doctrine.
• Since the TCC’s enhanced cost order (under Rule 147(7)) was wholly contingent on the order it made in the underlying action, when the FCA "issued a judgment allowing the Crown’s appeal and setting aside the Tax Court’s judgment (including its costs award), the entire basis for the Tax Court’s Rule 147(7) order in the second matter fell away, with the result that it no longer had legal effect” (para. 10). Thus, the FCA judgment “rendered both the Tax Court’s judgment (including its costs award) and the Tax Court’s Rule 147(7) order a nullity” (para. 11).