Hoyt et al. v. Grand Lake Development Corp. et al., [1977] 2 SCR 907

Supreme Court of Canada

Hoyt et al. v. Grand Lake Development Corp. et al., [1977] 2 S.C.R. 907

Date: 1977-06-14

Calvin J. Hoyt et al. Appellants;

and

Grand Lake Development Corporation et al. Respondents.

1977: May 19; 1977: June 14.

Present: Laskin C.J. and Judson, Ritchie, Pigeon and Dickson JJ.

ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION

Appeal—Reversal of finding of fact of trial judge—Strong justification required.

Damages—Lack of proof as to amount of damages—Dismissal of action inappropriate—Proper course to remit to trial judge to hear further evidence.

A company incorporated by appellant C.J. Hoyt to engage in coal-mining operations in Minto, N.B., ceased these operations as a result of a government decision to phase out strip mining in that area. The N.B. government incorporated Grand Lake Development Corporation to effect the change and this company settled the Hoyt Company’s outstanding liabilities, in the amount of $60,000, and purchased a dragline having only scrap value for the sum of $2,300. The remainder of the Hoyt Company’s equipment, which had been moved by Hoyt in January 1968 to a property where one Harold Knox continued to carry on mining operations and which by October 1972 had disappeared, was the subject of Hoyt’s claim for $71,432 by reason of the conversion of the property by the respondents. While Hoyt had appeared to show little or no interest in this property, from 1968 to 1972 he continued to pursue officials of the government in the hope that he might obtain some compensation for it. Despite a dearth of evidence it did appear that salvage operations had been carried on in the area where the equipment was stored and some of the equipment might have been used in these operations or sold for scrap.

The trial judge dismissed the claim on the ground that the property had been abandoned and that the evidence could not sustain a finding of conversion. The Appeal Division reversed these findings at trial, however concluded that the appeal should be dismissed because it was impossible to establish the amount of damages on the evidence before it.

Held: The appeal should be dismissed.

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There was nothing to suggest that the trial judge failed to use or misused the advantage which he had of having seen and heard the witnesses. The action should be dismissed for the reasons given by the trial judge. Moreover the finding of the Appeal Division as to conversion been upheld, the conclusion that the appeal should be dismissed because of lack of proof as to the amount of damages would not have been appropriate; the proper course would have been to remit the case to the trial judge to hear further evidence and to assess the damages.

S.S. Hontestroom v. S.S. Sagaporack, [1927] A.C. 37; Prudential Trust Company v. Forseth, [1960] S.C.R. 210; Sparks and Fairfax v. Thompson, [1975] 1 S.C.R. 618 referred to.

APPEAL from a judgment of the Supreme Court of New Brunswick, Appeal Division, dismissing, for different reasons, an appeal from a judgment of Barry J. at trial dismissing a claim for damages. Appeal dismissed, findings at trial restored.

Ronald J. Ashfield and Mark C. Paul-Elias, for the appellants.

David R. Clark, for the respondents.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of the Appeal Division of the Supreme Court of New Brunswick dismissing an appeal from the judgment rendered at trial by Mr. Justice Barry whereby he had dismissed the appellants’ claim in the amount of $71,432 allegedly sustained by the appellants by reason of the conversion of their property by the respondents.

The trial judge dismissed the appellants’ claim on the ground that the property in question had been abandoned and that the evidence could not sustain a finding of conversion by the respondents or either of them. The Appeal Division, on the other hand, found that the property had not been abandoned but had been converted by the respondent, N.B. Coal Limited, which company appears to have acted in conjunction with, if not on behalf of, the other respondent, Grand Lake Development Corporation, a crown corporation established by act of the Legislature of New Brunswick. The Appeal Division, however, concluded that:

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It is not possible to establish the plaintiffs’ damages and as the court cannot do so arbitrarily, it follows that the appeal must be dismissed.

This litigation stems from the fact that C.J. Hoyt Limited, which had been incorporated by the appellant, C.J. Hoyt, to engage in coal mining operations in Minto, N.B., ceased those operations as a result of a government decision to phase out strip mining in that area. The New Brunswick Government incorporated the Grand Lake Development Corporation to effect this change and this company did in fact settle the Hoyt Company’s outstanding liabilities in the amount of $60,000, and purchased a dragline having only scrap value for the sum of $2,300. The remainder of the Hoyt equipment which the appellants claim to have been converted was moved by Hoyt to a property known as the King property where one Harold Knox was continuing to carry on mining operations. This equipment was left on that property in January of 1968 and according to the evidence of the appellant Hoyt, he did not even go back to look at it until October of 1972, by which time it had disappeared.

There is a dearth of evidence as to what became of this property although it does appear that salvage operations under the direction of one Mills of N.B. Coal Limited were being carried on in the area where it was stored and some of the equipment in question might have been used in these operations or sold for scrap, but the trial judge was far from satisfied that this amounted to evidence of conversion by either or both of the respondents. On the other hand, Mr. Justice Barry found that the attitude of Hoyt in showing no interest in his property for 4½ years was tantamount to his having abandoned it, although during that period it does appear that he continued to pursue officials of the government hoping that in time a decision might be made to award him some compensation for his equipment.

If Hoyt and his company in fact abandoned the property on the King site as the learned trial judge found, it would follow that there could be no action for its conversion and this appeal would accordingly fail. But even if the Appeal Division’s

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finding that the property was not abandoned could be sustained, the burden would still rest upon the appellants to satisfy the court on the balance of probabilities that there was sufficient evidence to justify a finding of conversion by the respondents. In this regard the learned trial judge made the following finding:

Now, the claim is, first for converting, but there isn’t any evidence to satisfy me that either of the two defendants… converted the property to their use although there is an inference that it may have been used by somebody there or sold as scrap.

And he concluded his reasons for judgment with the following paragraph:

As far as I am concerned there is no evidence to satisfy me of conversion. There is evidence that the equipment was abandoned by Mr. Hoyt at the site and he just kept after the government officials hoping that in due course they would pay him, but they havent’t done so and now we are in court.

Mr. Justice Ryan, however, in the course of the reasons for judgment which he rendered on behalf of the Appeal Division, having determined that there was no evidence of abandonment, went on to hold, after reviewing the judgment at trial:

The finding, however, of there being no evidence of conversion is in my opinion against the weight of evidence.

These are crucial findings of fact which must be based on the Appellate Division’s assessment of the evidence and the probabilities to which it gave rise, and as they constitute a clear reversal of the conclusions reached by an experienced trial judge who had of course had the advantage of seeing and hearing the witnesses, I think this to be a case to which the language employed by Lord Sumner in S.S. Hontestroom v. S.S. Sagaporack[1], is applicable. This language was adopted by Mr. Justice Martland in this Court in the case of Prudential Trust Company v. Forseth[2]. In the passage in question, Lord Sumner described the respective

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roles of the trial judge and of the court of appeal in the following language:

None the less, not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. (The italics are my own.)

See also Sparks and Fairfax v. Thompson[3], at p. 626.

In reversing the trial judge’s finding that there was no evidence, the Appeal Division appears to have relied in great degree on excerpts from the evidence of Roy Mills as to the disposal of certain equipment similar in kind to the appellants. With all respect, I am bound to say that I find these passages to be more than confusing and indeed there does not appear to be any firm basis for concluding that Mills was referring to the Hoyt equipment. His reference is to “equipment that was located on Harold Knox’ property in the Minto area” and it is clear from his other evidence and that of Knox that there was much equipment left on this property which belonged to various different companies. It is to be noted that the first answer quoted by Mr. Justice Ryan does not appear to have been made in response to the question which precedes it in the quotation.

After his reference to the evidence of Mills, Mr. Justice Ryan observed:

No doubt when the equipment was disposed of as described by Mills he was not aware that some of it was the property of the plaintiff. Nevertheless, such disposal constituted a conversion of equipment, unless it was abandoned as found by the trial judge.

In my respectful opinion these quotations do not lead to the conclusion that the appellants’ property was converted by the respondents or either of them, and the following series of questions and

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answers given by C.J. Hoyt himself in cross-examination appear to me to indicate that the lack of knowledge as to what happened to the equipment was shared by him:

Q. No, I’m not asking for your assumptions or your conclusion. I am asking about what you know directly.

A. I wasn’t there when the equipment was removed, I was going to school in Edmundston.

Q. I take it your answer is you don’t know what happened to the equipment?

THE COURT: Of personal knowledge.

MR. CLARK: Of personal knowledge.

A. I have an idea what happened to the equipment all right, but I don’t know of personal knowledge.

In this sequence Mr. Hoyt was clearly referring to the equipment listed in Schedule A to the Statement of Claim. On this basis the learned trial judge was in my opinion amply justified in concluding that there was no evidence to satisfy him of conversion.

In my view there is nothing in the present case to suggest that the learned trial judge in making the findings which he did, failed to use or palpably misused the advantage which he had of having seen and heard the witnesses, and I therefore conclude that this action should be dismissed for the reasons which he has stated.

As I have indicated, the Appeal Division, having found that the equipment was converted by the respondents, went on to conclude that there was no evidence upon which it was possible to establish the value of the equipment at the time of conversion and that as this was the proper measure of damage, the appeal should be dismissed for lack of proof.

There was some evidence, to which Mr. Justice Ryan himself refers, as to the value of the used equipment allegedly converted, and even if I agreed with the finding as to conversion made by the Appeal Division, it does not follow, in my view, that the appeal would have to be dismissed because that Court found it impossible to establish the amount of damage on the evidence before it. With all respect, I would have thought that the

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proper course under such circumstances would have been to remit the case to the trial judge to hear further evidence and to assess the damages.

As I have indicated, however, no question of assessment of damages arises in my view of this case and for these reasons, as well as for those stated by Mr. Justice Barry at trial, I would dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitor for the appellants: Mark C. Paul-Elias, Fredericton.

Solicitor for the respondents: David R. Clark, Fredericton.