Porto Seguro Companhia De Seguros Gerais v. Belcan S.A., [1997] 3 S.C.R. 1278

Porto Seguro Companhia De Seguros Gerais Appellant

v.

Belcan S.A., Fednav Limited, Ubem S.A., the Owners and All Others Interested in the Vessel Federal Danube and the Vessel Federal Danube Respondents

Indexed as: Porto Seguro Companhia De Seguros Gerais v. Belcan S.A.

File No.: 25340.

1997: October 14; 1997: December 18.

Present: L’Heureux‑Dubé, Sopinka,^* Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

on appeal from the federal court of appeal

Maritime law ‑‑ Procedure ‑‑ Expert evidence ‑‑ Assessors ‑‑ Insurer bringing action against owners of ship involved in collision ‑‑ Trial judge refusing to permit expert evidence because assessors had been appointed to assist her ‑‑ Whether rule against expert evidence where judge sits with assessors in admiralty cases violates audi alteram partem principle ‑‑ Whether rule should be revised.

A vessel loaded with cargo collided with an anchored ship in the St. Lawrence Seaway. The collision allowed water to enter the holds and damage the cargo of the first vessel. The appellant, the insurer of the cargo, made good the loss. Its action against the owners of the anchored ship was dismissed. The appellant appealed on the ground that the trial was unfair because the trial judge refused to hear the evidence of three expert witnesses it sought to call and because the advice that the two assessors appointed to sit with the trial judge gave her was not disclosed. The trial judge was following settled Federal Court practice in refusing to permit expert evidence where assessors have been appointed to assist the judge in maritime matters. The Federal Court of Appeal dismissed the appellant’s appeal.

Held: The appeal should be allowed and a new trial ordered.

The rule against expert evidence where assessors sit with a judge is based on a long line of English and Canadian jurisprudence and finds its origin in English practice. As it is a rule about how the trial should be conducted, it is one of procedure. There is a strong argument that the statutory provisions incorporating English admiralty law into Canadian law distinguish between substantive and procedural law and did not carry forward English procedural law, notwithstanding the transitional provisions in the 1970 Federal Court Act. Moreover, even if English practices and procedures in admiralty were held to be incorporated by statute into Canadian law, a mutable common law rule is not transformed into an immutable statutory rule simply because it has been made applicable in Canada by statute. Regardless of how the rule here at issue was incorporated into Canadian common law, Canadian courts possess the same power to modify the rule as they would to modify a Canadian common law rule of practice.

Courts may change common law rules where this is necessary to achieve justice and fairness by bringing the law into harmony with social, moral and economic changes in society, and where the change will not have complex and unforeseeable consequences. A major change is likely to have wide and unforeseeable ramifications that are better left to the legislature or Parliament, while incremental changes are more likely to have confined and foreseeable ramifications. Changes to rules of court procedure are more easily made than changes to the substantive law, since court procedures fall directly within the domain and expertise of the courts, which are in a good position to know what changes are required to make the court system fairer and what the consequences of the changes will be. A change in the rule against expert evidence where a judge sits with assessors in admiralty cases is required for reasons of justice and fairness. The rule violates the audi alteram partem principle and is out of step with modern trial practice, which permits expert evidence on matters of opinion at issue on a trial. Abolishing the prohibition on expert evidence will not have adverse and unforeseeable consequences, such that its reform is better left to Parliament.

Assessors should be permitted to assist judges in understanding technical evidence. They may go further and advise the judge on matters of fact in dispute between the parties, but only on condition of disclosure and a right of response sufficient to comply with the requirements of natural justice. In all cases, the parties are entitled to call expert evidence subject to common law exclusionary rules, the limits and procedures set out in the Evidence Act and the rules of practice. These propositions are stated as general guidelines; it may be necessary or useful for the judge in a particular case, upon consultation with the parties, to vary how assessors are used and what procedures should be followed, depending on the nature of the trial and the issues to be determined. What is essential is that the principles of natural justice that protect a fair trial should in all cases be preserved. In this case the trial judge declined to hear expert evidence and made no disclosure of the questions she asked the assessors and the responses she received. The result was a trial that violated the principles of natural justice. Since the violations may have affected the outcome, the appellant is entitled to a new trial.

Cases Cited

Not followed: Egmont Towing & Sorting Ltd. v. The Ship “Telendos” (1982), 43 N.R. 147; referred to: “Neptun” (Owners) v. Humber Conservancy Board (1937), 59 Ll.L.R. 158; The “Antares II” and “Victory”, [1996] 2 Lloyd’s Rep. 482; Oy Nokia Ab v. The Ship “Martha Russ”, [1973] F.C. 394; Antares Shipping Corp. v. The Ship “Capricorn”, 1977 CanLII 3162 (FCA), [1977] 2 F.C. 274; ITO‑‑International Terminal Operators Ltd. v. Miida Electronics Inc., 1986 CanLII 91 (SCC), [1986] 1 S.C.R. 752; Watkins v. Olafson, 1989 CanLII 36 (SCC), [1989] 2 S.C.R. 750; R. v. Salituro, 1991 CanLII 17 (SCC), [1991] 3 S.C.R. 654; Winnipeg Child and Family Services (Northwest Area) v. G. (D.F.), 1997 CanLII 336 (SCC), [1997] 3 S.C.R. 925; Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., 1997 CanLII 307 (SCC), [1997] 3 S.C.R. 1210; R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9; Owners of S.S. Australia v. Owners of Cargo of S.S. Nautilus, [1927] A.C. 145; Owners of the Ship “Sun Diamond” v. The Ship “Erawan” (1975), 1975 CanLII 1099 (FC), 55 D.L.R. (3d) 138.

Statutes and Regulations Cited

Admiralty Act, R.S.C. 1970, c. A‑1, s. 18(1), (7).

Alberta Rules of Court, r. 235.

British Columbia Rules of Court, r. 39(28).

Canada Evidence Act, R.S.C., 1985, c. C‑5, s. 7.

Civil Evidence Act 1972 (U.K.), 1972, c. 30.

Exchequer Court Act, R.S.C. 1970, c. E‑11, s. 35.

Federal Court Act, R.S.C. 1970, c. 10 (2nd Supp.), s. 62(6).

Federal Court Act, R.S.C., 1985, c. F‑7, ss. 2 “Canadian maritime law”, 42.

Federal Court Rules, C.R.C. 1978, c. 663, rr. 482 [am. SOR/90‑846, s. 18], 492.

New Brunswick Rules of Court, r. 54.11.

Nova Scotia Civil Procedure Rules, r. 28.03(2).

APPEAL from a judgment of the Federal Court of Appeal, 1996 CanLII 4040 (FCA), [1996] 2 F.C. 751, 195 N.R. 241, affirming a decision of the Trial Division (1994), 82 F.T.R. 127, dismissing the appellant’s action. Appeal allowed.

George J. Pollack and Andrew Ness, for the appellant.

Richard Gaudreau and Yves Derôme, for the respondents.

The judgment of the Court was delivered by

1 McLachlin J. -- On December 11, 1984, the MV Beograd, loaded with pinto beans en route to Brazil, collided with an anchored ship, the MV Federal Danube, in the St. Lawrence Seaway. The collision allowed water to enter the holds and damage the cargo of the MV Beograd. Porto Seguro, the insurer of the cargo, made good the loss. Porto Seguro then sued the owners of the two vessels to recover its loss. Before trial, it discontinued its action against the owners of the MV Beograd. Porto Seguro’s action against the anchored ship, the MV Federal Danube, was dismissed: (1994), 82 F.T.R. 127.

2 Porto Seguro appealed the dismissal of its action against the MV Federal Danube on the ground that it did not receive a fair trial. The trial was unfair, it submits, because the trial judge refused to hear the evidence of three expert witnesses Porto Seguro sought to call and because the advice that the two assessors appointed to sit with the trial judge gave her was not disclosed. The Federal Court of Appeal dismissed the appeal, MacGuigan J.A. dissenting: 1996 CanLII 4040 (FCA), [1996] 2 F.C. 751, 195 N.R. 241. Porto Seguro now appeals to this Court.

3 The trial judge was following settled Federal Court practice in refusing to permit expert evidence where assessors have been appointed to assist the judge in maritime matters. The issue is whether that practice is compatible with a fair trial or natural justice. If not, a new trial must be ordered.

Relevant Statutory Provisions

4 The following statutory provisions are relevant to the disposition of the case at bar.

Admiralty Act, R.S.C. 1970, c. A-1

18. (1) The jurisdiction of the Court on its Admiralty side extends to and shall be exercised in respect of all navigable waters, tidal and non-tidal, whether naturally navigable or artificially made so, and although such waters are within the body of a county or other judicial district, and, generally, such jurisdiction shall, subject to this Act, be over the like places, persons, matters and things as the Admiralty jurisdiction now possessed by the High Court of Justice in England, whether existing by virtue of any statute or otherwise, and be exercised by the Court in like manner and to as full an extent as by such High Court.

(7) The jurisdiction of the Court on its Admiralty side shall, so far as regards procedure and practice, be exercised in the manner provided by this Act or by general rules and orders, and where no special provision is contained in this Act or in general rules and orders with reference thereto any such jurisdiction shall be exercised as nearly as may be in the same manner as that in which it may now be exercised by the Court.

Exchequer Court Act, R.S.C. 1970, c. E-11

35. The practice and procedure in suits, actions and matters in the Exchequer Court, shall, so far as they are applicable, and unless it is otherwise provided for by this Act, or by general rules made in pursuance of this Act, be regulated by the practice and procedure in similar suits, actions and matters in Her Majesty’s High Court of Justice in England on the 1st day of January 1928.

Federal Court Act, R.S.C. 1970, c. 10 (2nd Supp.)

62. ...

(6) All provisions of law and rules and orders regulating the practice and procedure in the Exchequer Court of Canada existing and in force on the 1st day of June 1971 shall, to the extent that they are not inconsistent with the provisions of this Act, remain in force until altered or rescinded or otherwise determined.

Federal Court Act, R.S.C., 1985, c. F-7

2. In this Act,

“Canadian maritime law” means the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act, chapter A-1 of the Revised Statutes of Canada, 1970, or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters, as that law has been altered by this Act or any other Act of Parliament;

42. Canadian maritime law as it was immediately before June 1, 1971 continues subject to such changes therein as may be made by this Act or any other Act of Parliament.

Federal Court Rules, C.R.C. 1978, c. 663

Rule 482. (1) No evidence in chief of an expert witness shall be received at the trial (unless the Court otherwise orders in a particular case) in respect of any issue unless

(a) that issue has been defined by the pleadings or by agreement of the parties filed under Rule 485;

(b) an affidavit setting out the proposed evidence has been filed and a copy of it served on all other parties at least 30 days before the commencement of the trial; and

(c) the expert witness is available at the trial for cross‑examination.

(2) Subject to compliance with paragraph (1), evidence in chief of an expert witness may be tendered at the trial by

(a) the reading of the whole of the affidavit referred to in paragraph (1), or such part thereof as the party decides to use at the trial, into evidence by the witness (unless the Court, with the consent of all parties, permits it to be taken as read); and

(b) if the party so elects, verbal testimony by the witness

(i) explaining or demonstrating what is in the affidavit or the part thereof that has been so put into evidence, as the case may be, and

(ii) otherwise, by special leave of the Court subject to such terms if any as seem just.

Rule 492. (1) The Court may, if it thinks it expedient so to do, call in the aid of one or more assessors, specially qualified, and hear and determine a matter, wholly or partially, with the assistance of such assessor or assessors.

Canada Evidence Act, R.S.C., 1985, c. C‑5

7. Where, in any trial or other proceeding, criminal or civil, it is intended by the prosecution or the defence, or by any party, to examine as witnesses professional or other experts entitled according to the law or practice to give opinion evidence, not more than five of such witnesses may be called on either side without the leave of the court or judge or person presiding.

The Rule

5 The Federal Court Rules provide for assessors to be appointed to assist the trial judge: Rule 492. They also provide for expert evidence: Rule 482. They are silent, however, on whether expert evidence may be called in cases where assessors have been appointed. The practice of disallowing such evidence is based not on the wording of the rules, but on a long line of English and Canadian jurisprudence.

6 The rule against expert evidence where assessors sit with a judge finds its origin in English practice. The practice was for the judge to sit with two Elder Brethren of Trinity House, who would give their advice on technical matters of navigation and seamanship. That advice, although not binding, was usually followed. In such cases, expert evidence was not permitted.

7 This rule has been affirmed in Canada, most recently in Egmont Towing & Sorting Ltd. v. The Ship “Telendos” (1982), 43 N.R. 147. As noted at p. 155 of the Federal Court of Appeal decision, the trial judge in that case had refused to accept expert evidence on the ground that “when the court is assisted by nautical assessors, whose duty it is to advise on matters of nautical skills and knowledge, the evidence of witnesses tendered for expert testimony on those very matters is not to be received”. The Federal Court of Appeal upheld this ruling. Thurlow C.J. opined, at p. 165, that “whatever its faults, the system will not be improved by departing from the rule that expert evidence is not admissible on matter[s] within the expertise of the assessors”. He agreed, however, that certain “features of the system may indicate that the system itself is anomalous and capable of being unfair. If so, that may be a matter for the legislature or perhaps for consideration and review at the highest judicial level if and when an appropriate case for such a review arises”. That time has now come.

8 The rule was originally applied to issues of navigation and seamanship. However, it appears to have been extended to any matters on which the assessors have expertise. The justification for the rule is that it is the task of the assessors to assist the judge on technical matters involving special expertise. To permit expert evidence on the same matters would render the assessors redundant, it is argued. It has also been suggested that the use of assessors instead of expert witnesses promotes shorter, less expensive litigation: The Telendos, supra.

9 The rule is not absolute. Even in England, judges sitting with assessors have sometimes permitted expert evidence. This may happen where the expertise of the witnesses surpasses that of the assessors (“Neptun” (Owners) v. Humber Conservancy Board (1937), 59 Ll.L.R. 158 (Adm.), at p. 167), or where the parties have prepared their case on the basis of an exchange of experts’ reports (The “Antares II” and “Victory”, [1996] 2 Lloyd’s Rep. 482 (Q.B. (Adm. Ct.)), at pp. 491-93). Departure from the rule in England is assisted since 1972 by the Civil Evidence Act (U.K.), 1972, c. 30, which makes expert evidence admissible: The Victory, supra.

Is the Rule a Procedural Rule or a Legal Rule?

10 The Federal Court of Appeal took different views of the status of the rule. The majority, per Pratte J.A., treated it as a substantive legal rule. MacGuigan J.A., dissenting, argued that it is a mere rule of procedure, or adjectival law. This is important, because rules of procedure are less strictly applied and more easily changed than rules of substantive law, and because of the argument that Canada incorporated the English substantive law on maritime matters, but not necessarily its procedural law.

11 In my view, the rule is one of procedure. It is a rule about how the trial should be conducted, not about the issues at stake between the parties in the action. As procedural law, it can be made by judicial order and regulation, as opposed to laws passed in the legislature.

12 The Federal Court has held the Admiralty rules, including the rule here at issue, to be procedural. In Oy Nokia Ab v. The Ship “Martha Russ”, [1973] F.C. 394 (T.D.), at p. 402, Collier J. stated: “The Admiralty Rules were not, in my view, substantive law administered by the Exchequer Court, but adjective law, a code of procedure to regulate the mode in which successive steps in Admiralty litigation were taken”. The Federal Court of Appeal, per Le Dain J.A., took the same view in Antares Shipping Corp. v. The Ship “Capricorn”, 1977 CanLII 3162 (FCA), [1977] 2 F.C. 274, at pp. 277-78. I agree.

The Status of the Rule in Canada

13 The respondents argue that the rule against expert evidence where the judge sits with assessors has been adopted into Canadian maritime law by statute. Pratte J.A., for the majority in the Federal Court of Appeal, accepted this argument and seems to have found that it precluded the judiciary from making changes to the rule. With respect, I cannot agree.

14 The argument goes as follows. Section 42 of the present Federal Court Act, R.S.C., 1985, c. F-7, provides that “Canadian maritime law as it was immediately before June 1, 1971 continues subject to such changes therein as may be made by this Act or any other Act of Parliament”. “Canadian maritime law” is defined in s. 2 as “the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act, chapter A-1 of the Revised Statutes of Canada, 1970...”. The law administered by the Exchequer Court of Canada was English admiralty law. In addition, the transitional provisions of the Exchequer Court Act, R.S.C. 1970, c. E-11, and of the Federal Court Act, S.C. 1970-71-72, c. 1 (consolidated in R.S.C. 1970, c. 10 (2nd Supp.)), provided for continuance of English practices and procedures in all matters before the Exchequer Court and the Federal Court unless stated otherwise. It follows, the argument concludes, that the Federal Court of Canada is compelled to apply English rules of evidence and procedure.

15 In my view, this argument cannot be accepted. First, there is a strong argument that the statutory provisions incorporating English admiralty law distinguish between substantive and procedural law and did not carry forward English procedural law, notwithstanding the transitional provisions in the 1970 Federal Court Act. Second, even if this view were wrong and English practices and procedures in Admiralty were held to be incorporated by statute into Canadian law, the assumption is mistaken that a mutable common law rule is transformed into an immutable statutory rule simply because it has been made applicable in Canada by statute.

16 The Federal Court’s jurisdiction over maritime matters may be traced to the Admiralty Act, R.S.C. 1970, c. A-1, s. 18, which conferred jurisdiction on its predecessor, the Exchequer Court. Section 18 of the Admiralty Act distinguished between substantive law and procedural practices. Section 18(1) conferred on the Exchequer Court the admiralty “jurisdiction now possessed by the High Court of Justice in England”, to “be exercised by the Court in like manner and to as full an extent as by such High Court”. This provision addresses what powers the Court possessed and what substantive law it should apply.

17 Section 18(7), by contrast, addressed procedure. It provided that the jurisdiction conferred by s. 18(1) should be exercised “so far as regards procedure and practice ... in the manner provided by this Act or by general rules and orders”. It went on to state that “where no special provision is contained in this Act or in general rules and orders with reference thereto any such jurisdiction shall be exercised as nearly as may be in the same manner as that in which it may now be exercised by the Court”. Unlike s. 18(1), s. 18(7) makes no mention of carrying over English rules of practice and procedure. Rather, the intention of Parliament appears to have been that the practices and procedures that governed other proceedings in the Exchequer Court should apply.

18 This, however, is not the end of the matter. Section 35 of the Exchequer Court Act stated that unless otherwise provided in the Act or rules, the Court’s procedures would be regulated by the practice and procedure in similar matters in the High Court of England. This provision was carried forward in the transitional provision of the 1970 Federal Court Act, s. 62(6), designed to provide continuity in the transition of jurisdiction from the Exchequer Court to the Federal Court. Although not appearing in the 1985 consolidation of the Federal Court Act, the transitional provision has not been repealed and arguably still has legal force.

19 But the transitional provision which may be argued to make Exchequer Court practice and hence the practice of the High Court of England applicable does not stand alone. The same statute that included the general transitional provision providing continuity between practice in the Exchequer Court and the Federal Court spoke explicitly to what maritime jurisdiction the Federal Court would possess. Section 42 provided that “Canadian maritime law as it was immediately before the 1st day of June 1971 continues subject to such changes therein as may be made by this or any other Act”. Section 2 of the Act defined “Canadian maritime law” as “the law that was administered by the Exchequer Court of Canada on its Admiralty side”.

20 The Federal Court of Canada has on two occasions defined “Canadian maritime law” as excluding procedural practices, concluding that the maritime practices and procedures of England were not statutorily transferred to Canada as part of its jurisdiction. In The Martha Russ, supra, Collier J. stated, at pp. 401-2, that “the law administered by the Exchequer Court on its Admiralty side means the substantive law found in the Admiralty Act and other statutes, including English statutes, whereby jurisdiction over various types of claims was set out. The Admiralty Rules were not, in my view, substantive law administered by the Exchequer Court . . .”. Similarly, in The Capricorn, supra, Le Dain J.A. stated, at p. 278, for the Federal Court of Appeal: “‘Canadian maritime law’, as defined by the Act, would not appear to contemplate matters of practice and procedure provided for by Rules and orders”.

21 There is much to be said for this interpretation and the view that, notwithstanding the transitional provision in the Federal Court Act, admiralty rules of procedure, as distinguished from substantive law, have not been statutorily transferred to the Federal Court. It accords with the apparent intention of Parliament, expressed in s. 18 of the Admiralty Act and ss. 42 and 2 of the Federal Court Act, that even in the Exchequer Court, the rules of practice and procedure on admiralty matters should be those administered generally by that Court and not those of England. Opposed to this is the general provision of s. 35 of the Exchequer Court Act providing for adoption of English practices and procedures where the rules and Act are silent.

22 Arguably, the best way to resolve the apparent desire of Parliament that Canadian procedures apply in admiralty matters with the general transitional provision that, when not provided to the contrary, English procedural rules should apply is to conclude that Parliament, through s. 18 of the Admiralty Act and ss. 42 and 2 of the Federal Court Act, has indeed provided to the contrary. It has done this by distinguishing, where Admiralty is concerned, between substantive law on the one hand and procedural rules and practices on the other hand, and by providing that for procedural rules and practices the general practices of the court should prevail. In this way, the transitional provision is read down as not pertaining to admiralty law, which is governed exclusively by s. 42 of the Federal Court Act.

23 However, even if the transitional provision of the 1970 Federal Court Act, by reference to s. 35 of the earlier Exchequer Court Act, was found to transfer English practices and procedures to the Federal Court, this would not lead to the conclusion that the English practices and procedures thus incorporated are cast in statutory stone, losing their character of common law rules subject to judicial alteration. This point was made succinctly by MacGuigan J.A. in his dissenting reasons in the case at bar (at p. 780 F.C.):

Moreover, as judge-made law the English rule can have no greater status than the rule in Telendos itself. Section 42 of the Act provides merely for legal continuity. It does not purport to transform English judge-made law into Canadian statutory law, but to incorporate it as if it were Canadian judge-made law. It is therefore subject to subsequent judicial overruling.

24 Where a statute incorporates English common law into Canadian law, it incorporates it as Canadian common law. It does not change its character from common law to statutory law, rendering it untouchable by the courts that created it. This Court has long taken the view that courts can continue to modify and expand common law rules introduced by statute. As McIntyre J. stated in ITO--International Terminal Operators Ltd. v. Miida Electronics Inc., 1986 CanLII 91 (SCC), [1986] 1 S.C.R. 752, at p. 776:

Canadian maritime law, as a body of substantive law, encompasses the principles of English maritime law as they were developed and applied in the Admiralty Court of England.... Thus, the body of admiralty law, which was adopted from England as Canadian maritime law, encompassed both specialized rules and principles of admiralty and the rules and principles adopted from the common law and applied in admiralty cases as these rules and principles have been, and continue to be, modified and expanded in Canadian jurisprudence. [Emphasis added.]

25 I conclude that, regardless of how the rule here at issue was incorporated into Canadian common law, Canadian courts possess the same power to modify the rule as they would to modify a Canadian common law rule of practice. Two related questions remain. First, considering that the rule forbidding expert evidence where a judge sits with assessors in an admiralty case forms part of the common law of Canada, should this Court alter the rule? Second, if it should alter the rule, what should the revised practice be?

The Principles Governing Judicial Alteration of Rules of Procedure

26 Courts may change common law rules where this is necessary to achieve justice and fairness by bringing the law into harmony with social, moral and economic changes in society, and where the change will not have complex and unforeseeable consequences: Watkins v. Olafson, 1989 CanLII 36 (SCC), [1989] 2 S.C.R. 750; R. v. Salituro, 1991 CanLII 17 (SCC), [1991] 3 S.C.R. 654, at pp. 665-66; Winnipeg Child and Family Services (Northwest Area) v. G. (D.F), 1997 CanLII 336 (SCC), [1997] 3 S.C.R. 925; Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., 1997 CanLII 307 (SCC), [1997] 3 S.C.R. 1210. The magnitude of the change may fall to be considered under the last rubric; a major change is likely to have wide and unforeseeable ramifications that are better left to the legislature or Parliament (see Winnipeg Child and Family Services, supra), while incremental changes are more likely to have confined and foreseeable ramifications. The nature of the rule may also fall to be considered. Changes to rules of court procedure are more easily made than changes to the substantive law, since court procedures fall directly within the domain and expertise of the courts, which are in a good position to know what changes are required to make the court system fairer and what the consequences of the changes will be.

Should the Rule Against Expert Evidence Where a Judge Sits with Assessors in Admiralty Be Changed?

27 The principles discussed thus far establish that it is open to this Court to change the procedural rule barring expert evidence in cases where judges sit with assessors in Admiralty, if it is established that the change is required for reasons of justice or fairness and that the change will not have complex and unforeseeable consequences. The remaining question is whether these conditions are met.

28 The first issue is whether the change is required for reasons of justice or fairness, or, to paraphrase the words of Iacobucci J. in Salituro, supra, to bring the rule at issue into harmony with the needs of the modern trial process. In my view, it is.

29 The rule against expert evidence where a judge sits with assessors in admiralty cases suffers from four defects. First, the prohibition on expert evidence violates the principle of natural justice of the right to be heard, audi alteram partem. This principle confers the right on every party to litigation to bring forth evidence on all material points. Trial judges possess a discretion to limit evidence or exclude evidence where its relevance is outweighed by the prejudice it may cause to the trial process. But the principle that every litigant has a right to be heard goes against the exclusion of an entire category of evidence. To say that a litigant cannot call any expert evidence on matters that are at issue in the litigation is to deny the litigant’s fundamental right to be heard.

30 The rule against expert evidence in cases with assessors is out of step with modern trial practice, which permits expert evidence on matters of opinion at issue on a trial. Section 7 of the Canada Evidence Act, R.S.C., 1985, c. C-5, confirms this practice, imposing limits only on the number of expert witnesses each side may call. Rule 482 sets detailed procedures to be followed in calling expert evidence. I agree with MacGuigan J.A. that the clear implication of these provisions is that, if the designated procedures are followed and conditions met, a party is entitled to call expert evidence at trial, subject to the common law restrictions on expert evidence as defined in R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9. Against this background, the rule against expert evidence in admiralty cases where assessors are used stands as an anomaly.

31 The rule’s variance with the principles of natural justice and the modern rules of evidence and trial procedure establish that the first requirement for changing it is met. This brings us to the second requirement. The issue is whether abolishing the prohibition on expert evidence will have adverse and unforeseeable consequences, such that its reform is better left to Parliament.

32 The respondents argue that to permit expert evidence is inconsistent with the practice of judges sitting with assessors in admiralty cases. The practice, they argue, is based on the assumption that the assessors will assist the trial judge in the determination of technical issues. There thus is no need for expert witnesses. Alternatively, if expert witnesses are called, nothing remains for the assessors. In other words, to permit expert evidence in assessor-assisted cases would amount to tampering with a practice and upsetting the balance upon which it is premised.

33 This argument brings me to the second problem with the traditional rule: its foundation on the mistaken premise that assessors will be masters of all matters of expertise that arise in the trial. The assumption that assessors are capable of dealing with all matters of opinion that arise in admiralty cases was challenged by Viscount Dunedin in England in 1926 in Owners of S.S. Australia v. Owners of Cargo of S.S. Nautilus, [1927] A.C. 145 (H.L.), at p. 150:

I cannot forget that when assessors were introduced, ships were sailing ships, and the navigation of a sailing ship is an art which the landsman cannot be expected to understand without much explanation. In these modern times it seems to me that it is much oftener a question of common sense in the application of the rules to avoid collision than a question of seamanship in the true sense of the word. So that, speaking for myself, except for the purposes of explanation, I shall always ask an assessor as little as possible. Certainly to find, as we have found not only in this case but in several cases which have lately occupied your Lordships’ attention, that the different assessors are at variance is much more of a hindrance than an assistance.

Collier J. quoted this passage with approval and confirmed its logic in the Canadian context in Owners of the Ship “Sun Diamond” v. The Ship “Erawan” (1975), 1975 CanLII 1099 (FC), 55 D.L.R. (3d) 138 (F.C.T.D.), at p. 145:

In these still more modern times, with considerable technological and scientific advances in the design and equipment of vessels, a qualified assessor, no matter how knowledgeable, cannot have had expert experience in all matters that today may be canvassed and scrutinized in maritime collision litigation. As one small example, some modern vessels are equipped with course recorders. I have had experience with nautical assessors, very able ones, who, understandably, have had no personal experience with the operation of such devices or of the interpretation of what they purport to record. Should expert evidence on a technical matter such as that be barred from the Court, merely because assessors (who may know nothing of that field) are present?

If this was true in 1975, how much stronger must be the case for no longer relying exclusively on assessors for expertise in 1997, when vessels are operated by complex computerized navigational devices, often individualized to the ship in which they are found?

34 To reject the rule that assessors serve as the sole source of expertise in admiralty trials is not to entirely preclude the use of assessors. As Collier J. noted, in The Sun Diamond, at p. 145:

In Courts other than those hearing Admiralty causes, expert evidence is admitted even if the Judge has the assistance of an assessor. I refer to the Nord-Deutsche case ... and to a very lengthy trial in British Columbia (396 days) where an assessor (a qualified engineer) sat with the trial Judge, and where a huge volume of expert testimony was heard on a number of issues.

In many provinces, assessors may be appointed to assist a judge on cases involving technical evidence, without curtailment of the right of parties to call expert evidence: British Columbia Rules of Court, Rule 39(28); Nova Scotia Civil Procedure Rules, Rule 28.03(2); Alberta Rules of Court, Rule 235; and New Brunswick Rules of Court, Rule 54.11. Such assessors function to assist the trial judge in understanding and explaining the technical evidence that the parties have put before the court. The parties are not precluded from calling expert evidence and the trial judge retains the sole responsibility for making the necessary findings of fact and applying the law to them. In this way, assessors may be of assistance to judges in complex, technical cases without trenching on the rules of natural justice. In addition, there may be cases where it is useful to employ a limited version of the old admiralty rule of appointing assessors to assist the judge with findings of fact and fact-related opinions. This option would remain available subject to precautions to avoid breach of the principles of natural justice.

35 This brings me to the third flaw in the present rule -- the fact that it does not permit disclosure to the parties of what passes between the judge and the assessor. Such disclosure may not be required where the assessor functions only to assist the judge in understanding technical evidence, particularly if expert evidence has been introduced on the issue in question. Where assessors venture opinions on factual matters at issue between the parties, however, natural justice requires more. It may be necessary to require the disclosure of questions put by the judge to the assessors and their responses, as proposed by Collier J. in The Sun Diamond, at pp. 139-40:

At some stage before the evidence had been completed, I met with counsel and discussed with them the use to be made of the assessors at this trial. I suggested there be changes made from what seems to have been the customary practice in the Trial Division of this Court, and in the Admiralty Side of its predecessor, the Exchequer Court of Canada. I proposed that counsel, at the conclusion of the evidence and before argument, should draft what I termed “formal” questions which they felt ought to be submitted for answer or opinion by the assessors. I would also prepare questions, if I thought them necessary or desirable, to be put to the assessors. Submissions would then be heard as to the propriety and desirability, or otherwise, of the various proposed questions, as well as to their content. The trial Judge (myself) would, of course, be the ultimate arbiter as to what questions, if any, would be put, and as to their form and content.

All this was to be done before argument so that counsel (if they saw fit) could, in the course of argument, make representations as to the answers or opinions that ought to be given. The formal questions and the answers would then be set out in the reasons for judgment. It was implicit in the arrangement made that the time-honoured rule would apply: the Court is not bound in any way to accept or act upon the answers or opinions given; it must make up its own mind, including decisions on matters of navigation, seamanship, and nautical skill.

When the evidence in this trial had been completed, there was a further discussion in respect of the above arrangement. I indicated, for myself, I had no proposed questions to put to the assessors, but I invited counsel to submit for discussion any questions they might have. Both counsel advised they did not intend to suggest any questions.

I, therefore, did not, at any time, seek opinions or formal advice from the two captains.

36 This, as I conceive it, is the modern conception of how assessors may aid a trial judge. There is no longer any justification for assessors to advise judges on matters of fault without disclosure to, and opportunity for comment by, the parties. Nor is there justification for preventing the parties from calling expert witnesses. The case for reform of the rule on both counts is strong.

37 Finally, this leads to the fourth reason for amending the rule: excluding expert evidence when an assessor assists the judge may create the impression that it is the assessor, and not the judge, who is deciding important questions of fact. (See, for example, Lord Sumner’s discussion of the problem in The Australia, supra, at pp. 151-53.) Allowing expert evidence and providing transparency in the interaction between judge and assessor works to ensure that the judge does not abdicate his or her role in favour of the assessor.

38 It remains to consider whether abolishing the prohibition on expert evidence will have adverse and unforeseeable consequences, such that its reform is better left to Parliament, as was the case in Winnipeg Child and Family Services, supra. The answer is no. The prohibition is an anachronism. The rule, as noted, was abandoned in England under the new Civil Evidence Act of 1972. In Canada, it has been replaced in non-admiralty jurisdictions by a procedure conforming to modern concepts of justice; assessors may be appointed to assist judges in understanding technical matters but they do not function to decide the issues between the parties and their appointment does not preclude expert evidence. These models permit us to predict that the proposed changes would function efficiently and would not introduce new, unforeseeable problems.

39 To replace the old anachronistic rule at Admiralty by its more modern counterpart is only to bring admiralty practice into harmony with practices elsewhere and the needs of the modern judicial process. The rule is, moreover, a procedural rule, fashioned by judges of a long-ago era for long-ago times. It is open to judges of the modern era to adapt the procedure to meet the needs of modern times. Finally, the change is hardly radical; the rule can be adapted in a way which preserves its basic function -- the provision of expert assistance to the judge -- while eliminating ancillary features that conflict with the modern trial process.

40 I conclude that the old admiralty rule appointing assessors to assist the judge in making findings of fault to the exclusion of expert evidence should be revised. First, assessors should be permitted to assist judges in understanding technical evidence. Second, assessors may go further and advise the judge on matters of fact in dispute between the parties, but only on condition of disclosure and a right of response sufficient to comply with the requirements of natural justice. In all cases, the parties are entitled to call expert evidence subject to the limits and procedures set out in the Evidence Act and the rules of practice. I state these propositions as general guidelines, aware that it may be necessary or useful for the judge in a particular case, upon consultation with the parties, to vary how assessors are used and what procedures should be followed, depending on the nature of the trial and the issues to be determined. The essential is that the principles of natural justice that protect a fair trial should in all cases be preserved.

Application of the Law to the Case at Bar

41 The trial judge, bound as she was by The Telendos, declined to hear expert evidence and made no disclosure of the questions she asked the assessors and the responses she received. The result was a trial that violated the principles of natural justice. The violations may have affected the outcome. For example, on the critical finding as to how the MV Beograd was navigating prior to the collision, the trial judge notes, after reviewing the defendant’s evidence: “This was not contradicted by any evidence presented by the plaintiffs” (p. 137). As MacGuigan J.A. points out, the reason that the appellant did not present any contradictory evidence was that it was prevented from doing so by the application of The Telendos rule. It follows that the appellant is entitled to a new trial.

42 I would allow the appeal and order a new trial. The appellant is entitled to costs of the appeal in this Court and in the Federal Court of Appeal.

Appeal allowed with costs.

Solicitors for the appellant: Sproule, Castonguay, Pollack, Montréal.

Solicitors for the respondents: Langlois Robert, Québec.

^* Sopinka J. took no part in the judgment.