The defendants brought a motion to dismiss the plaintiff's action for negligence and breach of contract, arguing that it was barred by the principles of res judicata, collateral attack, and/or abuse of process.
This argument was based on a prior Small Claims Court default judgment obtained by one of the defendants against the plaintiff for unpaid invoices.
The court dismissed the defendants' motion, finding that section 107 of the Courts of Justice Act prevented the application of res judicata in these coincident actions.
Furthermore, the court determined that the parties were not identical in both proceedings, and the issues in the Superior Court action (negligence and breach of contract) were distinct from the Small Claims Court action (unpaid invoices) and not fundamental to the default judgment.
The court also concluded that the action was neither a collateral attack on the Small Claims Court judgment nor an abuse of process, as the Ontario Racing Commission investigation was not a prior legal proceeding.