Maryland Casualty Co. v. Roy Fourrures Inc., [1974] SCR 52

Supreme Court of Canada

Maryland Casualty Co. v. Roy Fourrures Inc., [1974] S.C.R. 52

Date: 1973-04-02

Maryland Casualty Co. (Defendant) Appellant;

and

Roland Roy Fourrures Inc. (Plaintiff) Respondent.

1973: February 15, 16; 1973: April 2.

Present: Fauteux C.J. and Abbott, Ritchie, Spence and Pigeon JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC

Appeal—Question of fact—Important witness not taken into consideration—Inaccurate deposition not always perjury—Arson not established.

The two suits brought by the respondent against the appellant under two fire insurance policies were dismissed on the grounds that respondent Roland Roy himself caused the fire, made false statements to the company investigators and perjured himself at his examination on discovery. These decisions were reversed by the Court of Appeal. Hence the appeals to this Court.

Held: The appeals should be dismissed.

It is settled law that where a judgment upon facts has been rendered by a Court of first instance, and a first Court of Appeal has reversed that judgment, a second Court of Appeal should interfere with the judgment of the first appeal Court, only if clearly satisfied that it is erroneous, either on account of the grounds on which its intervention is based or on its assessment of the evidence of the record.

In the case at bar the Court of Appeal correctly noted the absence of any reference by the trial judge to the testimony of respondent’s counsel, who attended the examination on discovery of Roland Roy, and was informed by him immediately afterwards of his doubt concerning the accuracy of the deposition he had just made. The trial judge should not have tolerated the participation of this counsel in the trial, but he was not thereby excused from the obligation of taking this testimony into consideration before finding that Roland Roy was guilty of perjury, not of a misunderstanding. Even if an important statement of a witness is incorrect, this does not imply that all his testimony must be dismissed and he is a criminal guilty of perjury.

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With regards to the proof submitted, it is insufficient to establish, even in a civil case, arson and perjury, in view of the absence of inquiry into the cause of fire, the real possibility of accident and the reasonable explanations given by Roy.

Concerning the false statements, the trial judge refused to accept Roy’s explanations because he believed him guilty of perjury, which conclusion was not justified under the circumstances.

The Court of Appeal has therefore given good grounds for its decision to intervene in order to review the evidence submitted in the case at bar and it has not been shown that its reassessment of the evidence is erroneous.

APPEALS from judgments of the Court of Queen’s Bench, Appeal Side, Province of Quebec[1], reversing two decisions of the Superior Court. Appeals dismissed.

Jacques de Billy, Q.C., for the defendant, appellant.

Roland Fradette, Q.C., and François Lamarre, for the plaintiff, respondent.

The judgment of the Court was delivered by

PIGEON J.—This appeal is against two decisions of the Court of Appeal of the Province of Quebec, which reversed the judgments given by the Superior Court and condemned appellant to pay, under two fire insurance policies, $10,000 in one case and $71,952.27 in the other. The two suits were dismissed at first instance on the grounds that Roland Roy, the president and principal shareholder of respondent, himself intentionally caused the fire, then committed fraud by making false statements to the company investigators and perjuring himself at his examination on discovery.

The dual trial resulted in a lengthy hearing: the depositions cover 3,000 pages in the typed record of the Court of Appeal, which we have permitted the parties to use as such in this Court in order to save them additional expense. In

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addition, more than 350 exhibits were submitted, a large number of which were omitted by mutual agreement. The trial judgment is extremely elaborate, running to 250 pages. The reasons stated in the Court of Appeal, on the other hand, are a model of conciseness.

Needless to say, at the hearing before this Court appellant’s counsel relied heavily on the point that in the final analysis, the question is simply one of fact in which the decision rests on credibility of witnesses. He therefore urged us to hold that the Court of Appeal ought not to have intervened to vary the judgment rendered by the judge who had the decided advantage, in weighing the facts and the question of credibility, of having heard the witnesses and viewed their reactions himself. In Hood v. Hood[2], Laskin J. has recently reviewed our decisions on this point. The last case he referred to is Dorval v. Bouvier[3]. Here is what Fauteux J., as he then was, said on behalf of the majority in that case (pp. 293-294):

[TRANSLATION] …On account of the privileged position of the judge who presides at the trial, who sees and hears the parties and the witnesses, and judges their behaviour, it is a well-established principle that his opinion must be treated with the greatest respect by the Court of Appeal, and that the duty of the latter is not to re-try the case or to substitute its view of the evidence for that of the trial judge, unless there is a manifest error in the reasons or findings of the judgment under appeal. However, as Brossard J. noted after citing the comments of Casey J.A. in Gagnon v. Gauthier, [1958] Q.B. 401, these reasons must be in sufficiently explicit terms to enable an appellate court to weigh their merits from a legal standpoint. Indeed, if the reasons given do not possess this quality, or if they do but are invalid, the Court must necessarily intervene and proceed with an examination of the record, and form its own opinion on the evidence in the record…

As to the principle which must guide a second court of appeal called upon to review the judgment of a first court of appeal, this has also long been estab-

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lished. It is stated in Demers v. The Montreal Steam Laundry Company (1897), 27 S.C.R. 537, at 538:

…it is settled law upon which we have often acted here, that where a judgment upon facts has been rendered by a court of first instance, and a first court of appeal has reversed that judgment, a second court of appeal should interfere with the judgment of the first appeal, only if clearly satisfied that it is erroneous; Symington v. Symington, L.R.2 H.L. Sc.415.

This is the rule followed by this Court, and recently applied again in Pelletier v. Shykofsky, [1957] S.C.R. 635. Accordingly, to intervene in this case we must be clearly satisfied that the judgment of the Court of Appeal is erroneous, either on account of the grounds on which its intervention is based or of its assessment of the evidence on the record.

The first question is, therefore, whether the intervention of the Court of Appeal was adequately justified. The Chief Justice added the following to the reasons stated by his brother Casey J.A.:

[TRANSLATION] With respect for the contrary opinion, I am firmly convinced that it was through inadvertence that Roland Roy, at his examination on discovery, made no mention of his visit to Chicoutimi late in the evening of July 14, 1963. Apart from the fact that only a complete imbecile would think he could conceal something he had proclaimed for all to hear during the fire, there is a circumstance which the trial judge does not mention and which appears to me of prime importance: immediately after his examination on discovery Roy told his lawyer of his doubts concerning the accuracy of his deposition. A party who has knowingly concealed the truth does not immediately inform his lawyer of his perjury.

In my view these observations are fully in accordance with the principles stated above. In order for the Court to give the findings of the trial judge their proper weight, he must be sufficiently explicit. In the case at bar the Court of Appeal correctly noted a serious oversight: the absence of any reference to the testimony of respondent’s counsel, who attended the examination on discovery of Roland Roy, and was informed by him immediately afterwards of his doubt concerning the accuracy of the deposition he had just made. In the circumstances his counsel’s testimony was of vital importance, as

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the inaccuracy of Roland Roy’s deposition at his examination on discovery had been raised in a special allegation by amendment to the plea, and the answer to the amended plea stated:

[TRANSLATION] 4. When one of defendant’s counsels then asked him if he had not come to Chicoutimi he did not see the difference between the preceding question, in which he was asked whether he had not come to his store, and that in which he was asked if he had not come to Chicoutimi, and this was the reason he, mistakenly, answered the second question in the negative;

5. Roland Roy realized the difference between the two questions immediately after the examination ended, as he was leaving the courthouse, and told his counsel, who informed him he could always correct in due time the error he had made;

It was undoubtedly a serious error not to inform the opposite party immediately of the inaccuracy of an answer given at the examination on discovery, but this mistake did not turn a misunderstanding into perjury. It did however place counsel under an obligation to testify in order to establish that it was in fact a misunderstanding and not perjury. Counsel for the appellant was correct in saying that counsel in question ought to have refrained from taking any part in the trial, not even to evidence pertaining to other points in the case. Nor should the judge have tolerated such participation. But he was not thereby excused from the obligation of taking this testimony into consideration before finding, as he did, that Roland Roy was guilty of perjury, not of a misunderstanding. In order to test the soundness of this finding the Court of Appeal had to know what the trial judge thought of the testimony given by counsel. Did he dismiss it because he regarded it as irregular? Did he refuse to accept it because he thought it was not sincere? What the Chief Justice of Quebec says indicates clearly that so far as he was concerned he rejected the latter alternative, and I do not see how we could disagree with him in this respect.

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This first conclusion assumes particular importance in view of the approach taken to the case by the trial judge, which is set out by Casey J.A. who quotes him as follows:

[TRANSLATION] That truth is a whole, a single block, and that if Roland Roy was not believed, if the Court felt sure he had misled it regarding this nocturnal visit, then and in such case the whole structure collapsed, as many other explanations would not the more be believed and accordingly swelled or added to the weight of the evidence against him.

In my view the Court of Appeal correctly criticized this approach. Undoubtedly, when it is shown that an important statement of a witness is incorrect his credibility is seriously affected, but to conclude that all his testimony must be dismissed and he is necessarily a criminal guilty of perjury and arson is quite a different matter.

In his reasons Casey J.A. cites certain passages from the decision of this Court in London Life Insurance Co. v. Lang Shirt Co. Ltd.[4]. The Court of Appeal of Ontario had set aside a judgment at trial involving, as a defence against actions based on insurance policies, a finding of criminal conduct, suicide, based, as in the present case, on circumstantial evidence. This Court refused to intervene, holding that in order to do so more than suspicious circumstances would be needed. As Casey J.A. himself recognizes, subsequent decisions, in particular Rousseau v. Bennett[5], have clearly indicated that this does not imply the introduction in such cases of the rule followed in criminal proceedings, namely that the guilt of the accused must always be established beyond reasonable doubt. I do not feel counsel for the appellant is right in his contention that Casey J.A. made the mistake here of applying the criminal law rule. It is quite true that he took the liberty of expressing a doubt on the wisdom of this distinction, but he cannot be blamed for so doing. In the final analysis, however, he relied on the accepted rule, as appears from the following passage of

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his reasons:

One may well ask why, as it is sometimes suggested, this difference in quantum should exist; why it should be possible in a civil case to stigmatise a person with the commission of a crime on evidence that falling short of the reasonable doubt standard would not justify a conviction in the criminal courts. And I do not think that the answer is to be found in the fact that such a conclusion in the civil courts does not expose the person to the sanctions of the criminal law. But be that as it may, the fact that there was no inquiry into the cause of the fire, that the possibility of accident was very real, and that the explanations given by Roy were not unreasonable, convince me that the evidence submitted falls far short of what is needed to establish even in a civil case the arson and perjury found by the trial judge.

Turning now to the false statements allegedly made to a company investigator, one Gallagher, Casey J.A. concluded that the trial judge had refused to accept Roland Roy’s explanations, essentially because he believed him guilty of perjury on the point previously mentioned. Once the Court of Appeal rejected the principle adopted by the trial judge, nothing prevented it from reaching this conclusion.

On the whole, I feel the Court of Appeal has given good grounds for its decision to intervene in order to review the evidence submitted in the case at bar, and in my view it has not been shown that its reassessment of the evidence is erroneous.

I therefore conclude that the two appeals should be dismissed with costs against the appellant, respondent should, however, recover only one counsel fee for both cases, which really are one.

Appeals dismissed with costs.

Solicitors for the defendant, appellant: Gagnon, de Billy, Cantin, Dionne & Martin, Quebec.

Solicitors for the plaintiff, respondent: Fradette, Bergeron, Cain, Lamarre, Bouchard & Wells, Chicoutimi.