The appellants agreed to purchase a property, but the transaction failed to close after the respondent registered a certificate of pending litigation (CPL) against title, claiming a right of first refusal.
A motion to discharge the CPL was dismissed on the basis that there was a triable issue.
The appellants subsequently sued the respondent for damages under s. 103(4) of the Courts of Justice Act for registering the CPL without a reasonable claim.
The trial judge dismissed the action, holding that the previous order refusing to discharge the CPL was a decision in rem and rendered the issue res judicata.
The Court of Appeal allowed the appeal, finding that a motion to discharge a CPL only determines whether there is a triable issue, not the ultimate merits of the claim, and therefore cannot support a plea of res judicata.