N.V. Bocimar S.A. v. Century Insurance Co., [1987] 1 S.C.R. 1247

Century Insurance Company of Canada Appellant

v.

N.V. Bocimar S.A. Respondent

indexed as: n.v. bocimar s.a. v. century insurance co. of canada

File No.: 18972.

1987: April 9, 10; 1987: June 25.

Present: Beetz, Lamer, Wilson, Le Dain and La Forest JJ.

on appeal from the federal court of appeal

Courts ‑‑ Appellate review ‑‑ Facts ‑‑ Court of Appeal interfering with findings of fact of trial judge ‑‑ Documentary evidence and expert testimony ‑‑ Court of Appeal rejecting expert testimony on basis of difference of view as to some of facts on which expert testimony based ‑‑ Whether Court of Appeal erred.

This appeal was from a judgment of the Federal Court of Appeal allowing an appeal from a judgment of the Trial Division, which dismissed the action of the respondent ship‑owner against the appellant insurer for general average contribution by the cargo owners in respect of expenses as a result of a fire at sea on the ground that the ship‑owner had not exercised due diligence to make the ship seaworthy. The Court of Appeal took the position, because of the nature of the evidence, which consisted of expert testimony and documentary evidence, that it was "almost in the position of conducting the trial de novo and making [its] own assessment of the evidence." At issue here was whether or not the Court of Appeal erred in interfering with findings of fact of the trial judge.

Held (Lamer J. dissenting): The appeal should be allowed.

Per Beetz, Wilson, Le Dain and La Forest JJ.: The limits to the scope of appellate review of the findings of fact by a trial court also apply to the review of the findings of a trial court based on expert testimony. The Court of Appeal appears to have taken the position that it could assess the weight of the evidence in support of the facts on which the expert witnesses expressed an opinion because the evidence of those facts was before the trial court in a documentary form. The findings of the trial judge were similar to the assumed facts and the opinions in the affidavits of the expert witnesses. In coming to a different conclusion, on a balance of probabilities, from that of the trial judge with respect to some of those facts, the Court of Appeal in effect rejected the expert testimony which was based in part on those facts. It erred in doing so for it had not heard the expert witnesses and was not in a position to determine what their testimony would have been had the factual basis for their testimony been qualified to the extent it considered necessary.

Per Lamer J. (dissenting): It has been established that the finding of a court of appeal would be open to review by this Court if this Court were of the opinion that the Court of Appeal was either wrong in assuming a fact finding function or, if not wrong in that regard, clearly wrong as regards the findings they then made. The requirements of this rule were not met here. The judge on appeal was not clearly wrong when he set out his reasons for interfering with the trial judge's findings indicating what evidence, in his opinion, the trial judge either failed to consider or misapprehended in making his findings of fact. The substituted findings of fact were not clearly wrong.

The appeal should be allowed, but for the sole purpose of remitting matters to the Court of Appeal to permit the adduction of expert evidence on the facts as found.

Cases Cited

By Le Dain J.

Applied: Stein v. The Ship "Kathy K", 1975 146 (SCC), [1976] 2 S.C.R. 802; Joseph Brant Memorial Hospital v. Koziol, 1977 6 (SCC), [1978] 1 S.C.R. 491; Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 11 (SCC), [1980] 2 S.C.R. 78; Joyce v. Yeomans, [1981] 2 All E.R. 21.

By Lamer J. (dissenting)

Dorval v. Bouvier, 1968 3 (CSC), [1968] S.C.R. 288; Demers v. Montreal Steam Laundry Co. (1897), 1897 57 (SCC), 27 S.C.R. 537; Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 11 (SCC), [1980] 2 S.C.R. 78.

APPEAL from a judgment of the Federal Court of Appeal (1984), 1984 5958 (FCA), 53 N.R. 383, allowing an appeal from a judgment of Addy J. Appeal allowed, Lamer J. dissenting.

George R. Strathy and Kristine A. Connidis, for the appellant.

Vincent Prager and Laurent Fortier, for the respondent.

The judgment of Beetz, Wilson, Le Dain and La Forest JJ. was delivered by

1. Le Dain J.‑‑This appeal is from a judgment of the Federal Court of Appeal allowing an appeal from a judgment of the Trial Division, which dismissed the action of the respondent ship‑owner against the appellant insurer for general average contribution by the cargo owners in respect of expenses incurred as a result of a fire at sea, on the ground that the ship‑owner had not exercised due diligence to make the ship seaworthy. The judgment of the Court of Appeal, in which the facts and the issues are fully set out and need not be repeated here, is reported at (1984), 1984 5958 (FCA), 53 N.R. 383. The Court of Appeal awarded the respondent the sum of $1,161,230.80, based on the conversion rate for Belgian francs on the date of the alleged breach. There are two grounds of appeal: (a) that the Court of Appeal erred in interfering with findings of fact of the trial judge; and (b) if not, the Court should not have applied the breach‑date rule for conversion but rather one which would have reflected the decline in the value of the Belgian franc in relation to the Canadian dollar between the date of breach and the date of judgment.

2. With great respect, I am of the opinion that the appeal should be allowed on the first ground. The Court of Appeal took the position that because of the nature of the evidence in this case, which consisted of expert testimony and documentary evidence, the Court, to use its own words, was "almost in the position of conducting the trial de novo and making our own assessment of the evidence." I cannot agree. The limits to the scope of appellate review of the findings of fact by a trial court, which were affirmed by this Court in Stein v. The Ship "Kathy K", 1975 146 (SCC), [1976] 2 S.C.R. 802, and other decisions, also apply in my opinion to the review of the findings of a trial court based on expert testimony, as indicated in Joseph Brant Memorial Hospital v. Koziol, 1977 6 (SCC), [1978] 1 S.C.R. 491; Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 11 (SCC), [1980] 2 S.C.R. 78; and Joyce v. Yeomans, [1981] 2 All E.R. 21 (C.A.)

3. The Court of Appeal appears to have taken the position that it could assess the weight of the evidence in support of the facts on which the expert witnesses expressed an opinion because the evidence of those facts was before the trial court in a documentary form. The findings of the trial judge were similar to the assumed facts and the opinions in the affidavits of the expert witnesses. In coming to a different conclusion, on a balance of probabilities, from that of the trial judge with respect to some of those facts, the Court of Appeal in effect rejected the expert testimony which was based in part on those facts. It did so without having heard the expert witnesses and without being in a position to determine what their testimony would have been had the factual basis for their testimony been qualified to the extent considered necessary by the Court of Appeal. In doing so, the Court of Appeal, in my respectful opinion, erred.

4. For these reasons I would allow the appeal, set aside the judgment of the Federal Court of Appeal and restore the judgment of the Trial Division, with costs in this Court and in the Court of Appeal.

The following are the reasons delivered by

5. Lamer J. (dissenting)‑‑Appellant's complaint is that the Federal Court of Appeal could not, on the facts of this case, substitute its own findings of fact for some of those made by the trial judge. If Dorval v. Bouvier, 1968 3 (CSC), [1968] S.C.R. 288, is still good law, and I think it is, we should as a second appellate court bear in mind the rule we laid down long ago in Demers v. Montreal Steam Laundry Co. (1897), 1897 57 (SCC), 27 S.C.R. 537 and reiterated in Dorval, supra, at p. 294, that:

...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.

6. Giving meaning to "erroneous", Fauteux J. (as he then was) said that the finding of a court of appeal would be open to review by this Court if this Court were of the opinion that the Court of Appeal was either wrong in assuming a fact finding function or, if not wrong in that regard, clearly wrong as regards the findings they then made. The rule as regards the criterion of intervention by a Court of Appeal in facts found below where credibility of witnesses is not involved was stated in its most modern form in Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 11 (SCC), [1980] 2 S.C.R. 78, at pp. 84‑85, where Laskin C.J. said:

It would, of course, be open to an appellate court, where credibility of a witness was not in issue, to review findings of fact by a trial judge if they were based on a failure to consider relevant evidence or on a misapprehension of the evidence. An appeal, however, is not a complete rehearing. A majority of this Court held in Métivier v. Cadorette, at p. 382, that it was wrong for an appellate court to set aside a trial judgment where the only point at issue was the interpretation of the evidence as a whole. Powell v. Streatham Manor Nursing Home was relied on in the Métivier case (as it was in Prudential Insurance Co. Ltd. v. Forseth) as emphasizing the advantages of a trial judge, who sees and hears the witnesses, in coming to a conclusion on the acceptability of evidence and on the findings to which the accepted evidence leads. However clear cut the principles may be, governing the right of an appellate court to interfere with the findings of fact by a trial judge, their application may involve a difference of opinion as to whether interference is warranted in a particular case: see Hood v. Hood.

7. In this case Hugessen J., in appeal, set out in his judgment his reasons for interfering with the trial judge's findings indicating what evidence, in his opinion, the trial judge either failed to consider or misapprehended in making his findings of fact. Upon a reading of both judgments and of the evidence, I cannot say that he clearly was wrong. As regards the findings he substituted for those of the trial judge, while I might not have necessarily made the same, possibly even preferring those of Addy J., I am, however, unable to say that Hugessen J.'s findings of fact are clearly wrong. This being so, I cannot bring myself within the rule laid down in Bouvier, supra. The appellant's first ground of appeal should therefore fail. I should however add, with respect, that the Federal Court of Appeal's disposition of the appeal might operate unfairly. Having changed the factual underpinnings upon which the experts gave their opinions, the Court was quite right to set aside those opinions. But in so doing, they should have afforded the parties, especially the party who called those witnesses, an opportunity to adduce expert evidence based on the facts as found. While a party who has the carriage of a case should not, under normal circumstances, have the opportunity to retry part of the case because of a reversal of a finding of fact, the situation is somewhat different with respect to expert evidence based on a given state of facts. I would therefore allow this appeal, but for the sole purpose of remitting matters to the Court of Appeal to permit the adduction of expert evidence and then final disposition. Because my colleagues, in allowing this appeal, needed not and did not address the issue of "currency conversion", I find no useful purpose enuring to appellant in my addressing that point.

Appeal allowed with costs, Lamer J. dissenting.

Solicitors for the appellant: Wright & McTaggart, Toronto.

Solicitors for the respondent: Stikeman & Elliott, Ottawa.