The trusts of the late Sam Cohen reported in Re Newton Trust 2013 BCSC 1665 involved an issue relating to the collateral attack rule.
One of the trustees sought $800,000 in past fees for periods covered in previous passing of accounts.
Various legal issues such as res judicata were discussed , as well as the “Collateral attack rule”.
67] In essence, the real question that I must determine is whether a party can bring a second action in relation to a previous proceeding he commenced that challenges the constitutional basis for that action.
 Mr. MacKenzie has attempted to frame this claim as an entirely new proceeding on the basis of the substantive issues he raises in the petitions. However, he expressly asks this Court to set aside the impugned judgment of Registrar Blok. These circumstances raise the question of whether the collateral attack rule is engaged.
 In Wilson v. The Queen,  2 S.C.R. 594 at 599, Mr. Justice McIntyre described the rule of collateral attack:
It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. It is also well settled in the authorities that such an order may not be attacked collaterally—and a collateral attack may be described as an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment. Where appeals have been exhausted and other means of direct attack upon a judgment or order, such as proceedings by prerogative writs or proceedings for judicial review, have been unavailing, the only recourse open to one who seeks to set aside a court order is an action for review in the High Court where grounds for such a proceeding exist. Without attempting a complete list, such grounds would include fraud or the discovery of new evidence.
 In Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62 at para. 60, the Court affirmed this description of collateral attack and reviewed the principles underpinning the rule:
 The rule is a judicial creation (which must therefore yield to a contrary legislative enactment) based on general considerations related to the administration of justice, as explained in Garland v. Consumers’ Gas Co., 2004 SCC 25,  1 S.C.R. 629, at para. 72:
The fundamental policy behind the rule against collateral attack is to “maintain the rule of law and to preserve the repute of the administration of justice” (R. v. Litchfield,  4 S.C.R. 333, at p. 349). The idea is that if a party could avoid the consequences of an order issued against it by going to another forum, this would undermine the integrity of the justice system. Consequently, the doctrine is intended to prevent a party from circumventing the effect of a decision rendered against it. [Emphasis added.]
 In R. v. Litchfield,  4 S.C.R. 333, the criminal case referred to in Garland, the Court declined to apply the rule against collateral attack. In Garland itself, class action plaintiffs brought a claim against a gas company seeking restitution on the grounds of unjust enrichment of late payment penalties previously approved by the Ontario Energy Board. In its defence, the gas company argued that the claim for restitution was a collateral attack on the Board’s order. The defence failed.
 As noted by Madam Justice Arbour, writing for the majority in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, the focus of the collateral attack rule is on attacking the order itself and its legal effect (para. 34).
 In her summary of the law of collateral attack, Arbour J. referred to R. v. Sarson,  2 S.C.R. 223, which is also raised in the applicant’s arguments in this case. The circumstances in that case are relevant to this application. Mr. Justice Sopinka, writing for the majority, held that a prisoner’s habeas corpus attack on his criminal conviction pursuant to a law later declared unconstitutional must fail under the rule of collateral attack and the doctrine of res judicata. The offender’s conviction was a matter of settled law as a judgment of a court of competent jurisdiction. Citing from Professor Hogg, Sopinka J. noted that only an absence of jurisdiction, rendering a decision a nullity, would expose a judicial decision to collateral attack (para. 35).
 Counsel for Mr. MacKenzie argues that the rule of collateral attack does not apply as it first requires that the impugned order be made by a court of competent jurisdiction. He says that Registrar Blok was not of competent jurisdiction to grant his order. Therefore, collateral attack cannot be raised.
 Donald Lange’s text The Doctrine of Res Judicata in Canada, 3rded. (Markham: LexisNexis, 2010) states at 464 – 465:
There are two kinds of lack of jurisdiction for the purpose of a judgment. An important distinction must be made between a judgment rendered where there is no jurisdiction, in and of itself, and a judgment rendered where there is no jurisdiction although jurisdiction is assumed to exist because of a set of facts which are assumed to exist. The former is a nullity and assailable in a subsequent proceeding as a defence to an estoppel argument. It is not viewed as a collateral attack on the judgment. The latter is only assailable by way of appeal. If it is attacked in a subsequent proceeding, it is viewed as a collateral attack on the judgment.
 As stated by the Manitoba Court of Appeal in Volhoffer v. Volhoffer,  3 D.L.R. 552 (M.B.C.A.) at 556 – 557:
From these authorities, the law would appear to be that, if a tribunal which has jurisdiction over a subject-matter, provided a given state of facts exists, makes an order in respect of that subject-matter in the absence of the existence of that state of facts, and, therefore, without jurisdiction, such order must be treated as valid and binding until it is reversed upon an appeal, and, generally speaking, it cannot be attacked in a collateral proceeding. But where the tribunal has not been given any jurisdiction over the subject-matter, no matter what state of facts may exist, an order made in respect of it is a nullity, and need not be appealed against, and its invalidity may be set up as an answer in any proceeding taken under it.
 I also note the British Columbia Court of Appeal’s findings in R. v. J.L.S., 2002 BCCA 174:
 The appellant argues that just as the Provincial Court has no power to issue injunctions, the Youth Court has no power to place young persons on recognizances.
 As counsel for the respondent has pointed out, the distinction between errors of law or fact on the one hand and errors of jurisdiction on the other is sometimes difficult to draw but, in the context of the rule against collateral attack, the distinction may be drawn by asking whether the judge who had the order under attack had the general power to make the type of order in question, even if he or she arguably should not have made the order in the particular circumstances of the case under consideration. If the question is framed that way, Mr. Ehrcke argued, then the issue is not whether Judge Lemiski should have placed the appellant on the recognizance nor whether he erred in law in doing so. Instead, the question is whether he lacked the power to place young persons on recognizances at all.
 While a Youth Court judge cannot order a young person to enter into a recognizance under s. 810 of the Criminal Code, Youth Court judges do have the power to place young persons on recognizances. Clearly they do so in the context of bail applications and s. 49 of the Young Offenders Act makes explicit reference to “a recognizance binding a young person”. In my view, the recognizance order made by Judge Lemiski falls into the category of an erroneous exercise of jurisdiction and, as such, would be immune from collateral attack. The proper forum in which to attack the order placing the young person on a recognizance was an appeal from the original order, not in proceedings commenced for breach of recognizance.
 As the order was immune from collateral attack, the appeal from Mr. Justice Romilly’s order must be dismissed.
 If Mr. MacKenzie was concerned about the jurisdiction of Registrar Blok, he could have raised that issue at the hearing of the matter or upon appeal. I agree with the submission of the applicant that he could have discovered this challenge by exercising reasonable diligence.
 It is inappropriate for this Court to allow a proceeding to continue on the basis the litigant has now come up with a constitutional argument six years later that attacks the legal basis of the original judgment, which obviously did not fall in his favour. He has squandered his right to appeal the decision for want of prosecution. That was the proper avenue for challenging Registrar Blok’s decision.
 It is also well established under the doctrine of res judicata that the courts will not permit the same parties to open the same subject of litigation in respect of a matter which the parties, exercising reasonable diligence, might have brought forward at the time. As stated by Madam Justice Newbury in Cliffs Over Maple Bay (Re), 2011 BCCA 180 at para. 28:
Although grounded in the same basic considerations, each form involves, or has traditionally involved, criteria that have been expressed in slightly different terms. The traditional criteria for cause of action estoppel, confirmed in Canada in Angle, supra, were summarized by Chief Justice Hewak in Bjarnarson v. Manitoba (1987) 38 D.L.R. (4th) 32 (Man. Q.B.) at 34, aff’d. (1987) 45 D.L.R. (4th) 766 (Man. C.A.), as taken from Grandview v. Doering  2 S.C.R. 621:
1. There must be a final decision of a court of competent jurisdiction in the prior action [the requirement of “finality”];
2. The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action [the requirement of “mutuality”];
3. The cause of action and the prior action must not be separate and distinct; and
4. The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence. [At para. 6; emphasis added.]
It is perhaps unnecessary to state that the doctrine contemplates two “causes” – the first having ended in a final judgment that bars a “second claim for the same cause”: see Mohl v. University of British Columbia, 2006 BCCA 70 at paras. 23-4. In this context, “cause of action” does not refer to the name or classification given to the wrong or remedy, but to a factual situation which entitles one to a remedy: see also Lange at 147; Comeau v. Breau (1994) 145 N.B.R. (2d) 329 (C.A.) at para. 18; and Letang v. Cooper  1 Q.B. 222 (C.A.) at 242-43.
 In Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund, 1999 NSCA 77 Mr. Justice Cromwell declined to strike out the action at the preliminary stage because he was concerned that it was far from clear, based on the incomplete record, if the matter was a collateral attack (para. 60). That is not a concern for me: I have the full factual record before me.