Hill v. Hill et al., 2016 ABCA 49

• Judge: Paperny, O'Ferrall and Veldhuis, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: January 12, 2016
• Citations: 2016 ABCA 49;(2016), 612 A.R. 213

Hill v. Hill (2016), 612 A.R. 213; 662 W.A.C. 213 (CA)

MLB headnote and full text

Temp. Cite: [2016] A.R. TBEd. MR.005

Daniel Walter Hill (respondent/plaintiff) v. Paul James Hill, Richard P. Rendek and Rand Flynn (appellants/defendants)

(1501-0174-AC)

Daniel Walter Hill (respondent/plaintiff) v. Famhill Investments Limited and Harvard Developments Inc. (appellants/defendants)

(1501-0175-AC; 2016 ABCA 49)

Indexed As: Hill v. Hill et al.

Alberta Court of Appeal

Paperny, O'Ferrall and Veldhuis, JJ.A.

February 25, 2016.

Summary:

The plaintiff sued his brother Paul Hill, the trustees of the Hill Family Trust created in 1975, and others, claiming a one-quarter interest in the trust's assets (the "2005 Action").

The Alberta Court of Queen's Bench, in a decision reported at (2012), 540 A.R. 158, dismissed the action. The plaintiff appealed the decision.

The Alberta Court of Queen's Bench, in a decision reported at (2012), 543 A.R. 1, awarded the defendants costs of the proceedings based on four times Schedule C, Column 5, with the exception of 29 half days after the plaintiff had essentially closed his case and discontinued a number of claims. The plaintiff appealed the costs award.

The Alberta Court of Appeal, in a decision reported at (2013), 553 A.R. 16; 583 W.A.C. 16, dismissed the appeal of the decision on the merits. The plaintiff applied for leave to appeal the decision.

The Alberta Court of Appeal, in a decision reported at (2013), 561 A.R. 50; 594 W.A.C. 50, determined the costs appeal.

The Supreme Court of Canada, in a decision reported at (2013), 467 N.R. 397, denied leave to appeal the Court of Appeal decision on the merits.

The Alberta Court of Appeal, in a decision reported at (2013), 561 A.R. 60; 594 W.A.C. 60, determined the costs of the appeal on the merits. The defendants commenced proceedings in the United Kingdom in the High Court of Justice in bankruptcy to enforce their judgments against the plaintiff's estate. In 2014, the plaintiff initiated a second Court of Queen's Bench action seeking to set aside the judgment in the 2005 Action (the "2014 Action"). The 2014 Action was advanced on the basis that new evidence was discovered after the conclusion of the 2005 Action. The plaintiff claimed that the new evidence was "practically conclusive" of the matter. The defendants applied to strike the plaintiff's statement of claim on the basis that the 2014 action was res judicata, an abuse of process, and frivolous and vexatious.

The Alberta Court of Queen's Bench, in a decision reported at [2015] A.R. Uned. 459, refused to strike the 2014 Action. Although the court was satisfied that the 2014 Action was prima facie res judicata, it found that the new evidence had a reasonable probability of being found "practically conclusive" of the matter. The defendants appealed and sought a stay. The parties agreed to an expedited appeal schedule.

The Alberta Court of Appeal, per Rowbotham, J.A., in a decision reported at (2015), 606 A.R. 305; 652 W.A.C. 305, granted a stay until the hearing of the appeal.

The Alberta Court of Appeal allowed the appeal.

Estoppel - Topic 398

Estoppel by record - Res judicata as a bar to subsequent proceedings - Exceptions - Special circumstances - The Alberta Court of Appeal stated that "One special circumstance that can operate as an exception to res judicata is where a judgment is obtained through fraud. Another is the discovery of new evidence, not available at trial, that impeaches the result of the case. These are narrow exceptions with very high degrees of proof required to ensure that relitigation will be permitted only in rare circumstances. As noted by LeBel J, relitigation is available only where necessary to enhance the credibility, effectiveness and integrity of the administration of justice: Toronto(City) v CUPE, Local 79, 2003 SCC 63 at para 52, [2003] 3 SCR 77 ..." - See paragraph 29.

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - [See Estoppel - Topic 398 and Estoppel - Topic 1104 ].

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - At issue was when a final decision, arrived at after a full trial and after all avenues of appeal had been exhausted, could be set aside on the basis of newly discovered evidence - The Alberta Court of Appeal stated that "To override the imperative of finality, it must be demonstrated that the evidentiary foundation of the original judgment is most likely wrong and that the new evidence would have changed the result had it been adduced at trial. It is not a question of whether the new evidence, alone or along with other evidence, might have had some impact on the outcome. The evidence must be incontrovertible and must conclusively impeach the original result. This high standard indicates the rarity of a circumstance in which new evidence alone will constitute an exception to res judicata. It is even more rare when a final judgment is sought to be set aside." - See paragraphs 41 and 42.

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - At issue was when a final decision, arrived at after a full trial and after all avenues of appeal had been exhausted, could be set aside on the basis of newly discovered evidence - The Alberta Court of Appeal stated that "The Supreme Court of Canada has consistently recognized that courts retain a discretion to set aside a judgment on the basis of new evidence that is sufficiently compelling to undermine the verdict. While the courts have been more willing to invoke that discretion in cases where a concern about fraud or perjury has arisen, it is still available where newly obtained and incontrovertible evidence shows that there has been a fundamental miscarriage of justice, and that the judgment is clearly wrong." - See paragraph 44.

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - The Alberta Court of Appeal held that the "new evidence" exception to res judicata could be expressed as follows: first, the new evidence must not have been discoverable with reasonable diligence prior to trial; and second, the new evidence must be so material that it would have changed the result had it been adduced at trial - The court stated that "In practical terms, the process of considering the materiality requirement demands a careful examination of the new evidence, the trial decision, and any appeal therefrom. The court must first determine whether the new evidence itself is incontrovertible, whether it is capable of being denied or disputed, and whether it is unassailable both in terms of what it is and what it is adduced for. The court must review the foundation of the trial decision, the key findings of the trial judge, the analysis of the evidence and the basis upon which evidence was accepted or rejected. Only then should the court turn to the new evidence and place it in context to determine whether, had it been before the trial judge, that evidence would have led to a different result. This exercise does not involve re-weighing the evidence at trial together with the proposed new evidence. It involves looking at the verdict as a whole, having regard to all the findings, to determine whether the new evidence would change the result; not whether a particular finding or a discrete aspect of the case might change, but the ultimate verdict itself. The test is not whether a new trial judge, engaging in a de novo weighing of all of the evidence, could have come to a different conclusion. The new evidence must be incontrovertible, and must, on its face, give rise to the conclusion that the result would have been different had it been adduced at trial." - See paragraphs 30, 45 and 46.

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - In 2014, the plaintiff initiated a Court of Queen's Bench action seeking to set aside the judgment in a 2005 Action based on the same facts - The 2014 Action was advanced on the basis that new evidence had been discovered after the conclusion of the 2005 Action which was "practically conclusive" of the matter - The defendants applied to strike the plaintiff's statement of claim on the basis that the 2014 action was res judicata, an abuse of process, and frivolous and vexatious - A chambers judge refused to strike the 2014 Action - Although the judge was satisfied that the 2014 Action was prima facie res judicata, he found that the new evidence had a reasonable probability of being found "practically conclusive" of the matter - The defendants appealed - The Alberta Court of Appeal allowed the appeal - The chambers judge found that the plaintiff had satisfied the requirement that the new evidence, documents relating to CRTC applications, could not have been obtained by reasonable diligence before trial because the plaintiff had been told, both by the defendants and the CRTC, that they had been destroyed - Accordingly, the judge held that there was little else that could reasonably have been done to locate the documents before trial, and they were only discovered by good fortune once the plaintiff retained new counsel - The court stated that it would not have come to the same conclusion on this matter of mixed fact and law, but the deferential review standard did not permit it to interfere on this point - However, the judge erred in law by mischaracterizing the test for the new evidence exception and in finding that the evidence was material - The court stated that "The 'practically conclusive' requirement is in reference to the trial as a whole, meaning that the new evidence must 'conclusively establish the plaintiff's case.' It is not sufficient for it to be 'practically conclusive' of a collateral issue considered at trial. Where an existing judgment is sought to be set aside on the basis of new evidence, the materiality of that evidence must be determined in light of the basis on which the trial judge came to his decision." - The court found that, for many reasons, the new evidence failed to meet the materiality requirement of the new evidence exception to res judicata - It would not have led to a different result had it been before the trial judge - See paragraphs 50 to 71.

Estoppel - Topic 426

Estoppel by record (res judicata) - Matters precluding estoppel - Fraud, dishonesty or new evidence - In 2014, the plaintiff initiated a Court of Queen's Bench action seeking to set aside the judgment in a 2005 Action based on the same facts - In the 2005 Action, the plaintiff claimed that he was a one-quarter shareholder of Famhill Investments Ltd. (Famhill), and had been since 1976 - Specifically, he claimed that he and three of his four siblings were appointed as equal beneficiaries of a trust, settled by his father, which held shares of Famhill - The 2014 Action was advanced on the basis that new evidence had been discovered after the conclusion of the 2005 Action which was "practically conclusive" of the matter - The defendants applied to strike the plaintiff's statement of claim on the basis that the 2014 action was res judicata, an abuse of process, and frivolous and vexatious - A chambers judge refused to strike the 2014 Action - Although the judge was satisfied that the 2014 Action was prima facie res judicata, he found that the new evidence, documents relating to CRTC applications, had a reasonable probability of being found "practically conclusive" of the matter - On appeal, the Alberta Court of Appeal agreed with the chambers judge's conclusion that there was nothing to suggest newly discovered fraud - While some of the plaintiff's brother's evidence as to what documents were sent to the CRTC was incorrect, had the fraud exception been the only argument put forth, the chambers judge would have dismissed the action as being res judicata - The court agreed that there was no evidence of fraud or perjury on the record - The inconsistencies advanced by the plaintiff to suggest that perjured evidence had been given by his brother were evidence of nothing more than that, inconsistencies - Nothing had been raised on appeal to indicate fraudulent behaviour, aside from some potentially inconsistent or incorrect testimony - See paragraphs 75 to 78.

Estoppel - Topic 1104

Estoppel in pais (by conduct) - Representation by statement - Representations which do not found estoppel - In 2014, the plaintiff initiated a Court of Queen's Bench action seeking to set aside the judgment in a 2005 Action based on the same facts - In the 2005 Action, the plaintiff claimed that he was a one-quarter shareholder of Famhill Investments Ltd. (Famhill), and had been since 1976 - Specifically, he claimed that he and three of his four siblings were appointed as equal beneficiaries of a trust, settled by his father, which held shares of Famhill - The 2014 Action was advanced on the basis that new evidence had been discovered after the conclusion of the 2005 Action which was "practically conclusive" of the matter - The defendants applied to strike the plaintiff's statement of claim on the basis that the 2014 action was res judicata, an abuse of process, and frivolous and vexatious - A chambers judge refused to strike the 2014 Action - Although the judge was satisfied that the 2014 Action was prima facie res judicata, he found that the new evidence, documents relating to CRTC applications, had a reasonable probability of being found "practically conclusive" of the matter - The defendants appealed - The Alberta Court of Appeal allowed the appeal - The court rejected the plaintiff's argument, inter alia, that the defendants should be "estopped" from denying the "representation in the new evidence" - "First, it is far from clear that the CRTC filing is a representation that can be relied on by the plaintiff, a third party. Moreover, the argument depends upon an impermissible re-weighing of the evidence given at trial. There is mixed evidence as to whether the appointment of the shares was necessary, or in fact even helpful, in obtaining the CRTC license. In order for the new evidence to give rise to an estoppel, it would require the re-consideration and re-weighing of all of the evidence on this point. Since the narrow exception to res judicata under which the plaintiffs bring this action would not permit such a re-weighing, the estoppel argument must fail. I further note that the estoppel argument would also have to overcome the fact that the holding out in this case was by Harvard, a subsidiary of a corporation held by the trust, not by the trustees themselves. I do not consider that in such circumstances an estoppel could arise that would bind the trust and require the trustees to appoint trust property." - See paragraphs 72 to 74.

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 22].

Ambrozic v. Burcevski et al. (2008), 433 A.R. 25; 429 W.A.C. 25; 2008 ABCA 194, refd to. [para. 22].

MTS Allstream Inc. v. Telus Communications Co. (2009), 469 A.R. 14; 470 W.A.C. 14; 2009 ABCA 372, refd to. [para. 23].

Ambrozic v. Burcevski et al. (2011), 505 A.R. 359; 522 W.A.C. 359; 2011 ABCA 178, refd to. [para. 24].

Henderson v Henderson (1843), 3 Hare 100 (H.C.J.), refd to. [para. 28].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 29].

Varette v Sainsbury, [1928] S.C.R. 72; [1928] 1 D.L.R. 273, refd to. [para. 33].

Doering v. Grandview (Town) (1975), 7 N.R. 299; 61 D.L.R.(3d) 455 (S.C.C.), refd to. [para. 34].

Phosphate Sewage Co. v. Molleson (1879), 4 App. Cas. 801 (H.L.), refd to. [para. 34].

Kaliel v Aherne, [1946] 1 W.W.R. 461; [1946] 2 D.L.R. 388, refd to. [para. 38].

Ambrozic v. Burcevski et al. (2010), 491 A.R. 245; 2010 ABQB 570, disagreed with [para. 38].

Wavel Ventures Corp. et al. v. Constantini (1996), 187 A.R. 371; 127 W.A.C. 371; 1996 ABCA 415, refd to. [para. 39].

Royal Trust Co. v. Jones, [1962] S.C.R. 132; 31 D.L.R.(2d) 292, refd to. [para. 42].

DK Investments Ltd. v. SWS Investments Ltd. (1990), 44 B.C.L.R.(2d) 1; 20 A.C.W.S.(3d) 5 (C.A.), refd to. [para. 42].

Glatt v Glatt, [1935] 4 D.L.R. 99; [1935] O.R. 41 (SC), revs'd on other grounds [1936] 1 D.L.R. 387; [1936] O.R. 75 (C.A.), refd to. [para. 42].

Revane v. Homersham (2006), 220 B.C.A.C. 292; 362 W.A.C. 292; 53 B.C.L.R.(4th) 76; 2006 BCCA 8, disagreed with [para. 43].

Arnold et al. v. National Westminster Bank plc, [1991] 2 A.C. 93 (H.L.), refd to. [para. 43].

Counsel:

C.J. Popowich and R. Jadusingh, for the respondent;

M.O. Laprairie, Q.C., and J.R. Wildeman, for the appellants, Paul James Hill, Richard P. Rendek and Rand Flynn;

F.R. Foran, Q.C., and J.G. Hopkins, for the appellants, Famhill Investments Limited and Harvard Developments Inc.

This appeal was heard on January 12, 2016, by Paperny, O'Ferrall and Veldhuis, JJ.A., of the Alberta Court of Appeal. On February 25, 2016, Paperny, J.A., delivered the following reasons for judgment reserved for the court.