COURT OF
APPEAL FOR BRITISH COLUMBIA

Citation:

Nathanson,
  Schachter & Thompson LLP v. Boss Power Corp.,

2016 BCCA 1

Date: 20160104

Docket: CA42816

Between:

Nathanson, Schachter & Thompson
LLP

Respondent

(Lawyers)

And

Boss Power Corp. and Blizzard Uranium
Corp.

Appellants

(Clients)

Before:

The
  Honourable Mr. Justice Donald

The
  Honourable Mr. Justice Chiasson

The
  Honourable Mr. Justice Goepel

On appeal from:  An order of the Supreme Court of British
Columbia, dated
May 1, 2015 (
Nathanson, Schachter & Thompson LLP v. Boss Power
Corp.
,
2015 BCSC 702, Vancouver Docket S148084).

Counsel for
  the Appellants:

D.B. Kirkham, Q.C. and P.A. Brackstone

Counsel for
  the Respondent:

I.G. Nathanson, Q.C. and J.K.
  Lockhart

Place and
  Date of Hearing:

Vancouver, British Columbia

October 6, 2015

Place and
  Date of Judgment:

Vancouver, British Columbia

January 4, 2016

Written
  Reasons by:

The
  Honourable Mr. Justice Chiasson

Concurred
  in by:

The
  Honourable Mr. Justice Donald

The
  Honourable Mr. Justice Goepel

Summary:

The appellants included mineral claims owned beneficially
by a shareholder in the settlement of litigation with the Province of British
Columbia.  The appellant shareholder and his associates (the Beruschi Group)
took the position that the respondent, which acted for the appellants,
improperly included the claims.  This resulted in a lengthy and protracted
dispute, the resolution of which included the assignment to the Beruschi Group
of all of the appellants rights against the respondent, including the right to
seek a review of its accounts.  The application for a review was made out of
time.  An application to extend time was made by the Beruschi Group.  The
chambers judge held that the assignment was champertous.  The appellants
challenge this finding on appeal.  An issue arose whether the right to seek a
review is assignable.  The respondent asserts that the Beruschi Group does not
have standing to pursue a review and that the assignment was champertous.  It
also contends that there are no special circumstances that would warrant
extending the time for a review.  Held: appeal allowed.  The Legal
Profession Act does not oust the inherent jurisdiction of the court to review
the accounts of lawyers.  It is an implied term of the retainer contract that
accounts can be reviewed.  The right to a review is a chose in action that is
assignable.  The Beruschi Group has standing to seek a review.  The assignment
was not champertous because the Beruschi Group had a pre-existing commercial
interest in seeking a review.  In the circumstances of this case, there are
special circumstances that warrant an extension of time.

Reasons for Judgment of the Honourable
Mr. Justice Chiasson:

Introduction

[1]

This appeal
concerns provisions of the
Legal Profession Act
, S.B.C. 1998, c. 9 [the
Act
], the inherent jurisdiction of the court to review the accounts of
lawyers and the assignability of the right to have an account reviewed.  The
relevant provisions of the
Act
are:

70
(1)   Subject to subsection (11),
the person charged or a person who has agreed to indemnify that person may
obtain an appointment to have a bill reviewed before

(a)  12 months after the
bill was delivered under section 69, or

(b)  3 months after the
bill was paid,

whichever
occurs first.

[Under the
definitions in s. 64,
person charged
includes a person who has
agreed to pay for legal services, whether or not the services were provided on
the persons behalf.]

(5)
The following people may obtain an appointment on behalf of a lawyer to have a
bill reviewed:

(c)
the lawyers assignee;

(11)  In
either of the following circumstances, the lawyers bill must not be reviewed
unless the court finds that special circumstances justify a review of the bill
and orders that the bill be reviewed by the registrar:

(a)
 the lawyer has sued and obtained judgment for the amount of the bill;

(b)  application
for the review was not made within the time allowed in subsection (1).

Background

[2]

The appellant,
Blizzard Uranium Corp., is a wholly owned subsidiary of the appellant Boss Power
Corp. (Boss).  Mr. Anthony Beruschi owned approximately 33 per cent
of the shares of Boss.  I shall refer to him and his companies as the Beruschi
Group.

[3]

Boss and Blizzard
Uranium owned various uranium claims in the Province of British Columbia.  In
2008, the Province established a mineral reserve for uranium which effectively
expropriated the appellants claims.

[4]

In October 2008,
the appellants retained the respondent law firm to sue the Province.  In March
2011, acting on instructions from the president and chief executive officer of
Boss, counsel amended the appellants notice of civil claim to include B Claims.
These claims were held by Blizzard Uranium in trust for the Beruschi Group.  It
is counsels position that he did not know this.  The Beruschi Group asserts
that it did not consent to the inclusion of the B Claims and did not know
they were included.

[5]

In October 2011,
counsel negotiated a settlement with the Province whereby the appellants would
transfer all of the claims referred to in the notice of civil claim to the
Province on payment of $30 million.  On learning this, the Beruschi Group
objected and refused to authorize transfer of the B Claims.  The
appellants were unable to complete the settlement transaction.

[6]

The Beruschi Group
took the position that the respondent had acted negligently by including the B Claims
in the litigation.  It also asserted that the majority of the board of
directors of Boss were in breach of fiduciary duty.  A lengthy and protracted
battle ensued which included arbitration, a contested proxy dispute, court
applications in connection with that dispute, and other court applications.
The respondent acted for the appellant with respect to matters concerning the
Province and other issues.  The Beruschi Group objected to this.

[7]

The appellants and
the Beruschi group reached a settlement which was reflected in a letter
agreement dated March 28, 2014.  It contained a number of provisions
relevant to this appeal:

1.       the Beruschi Group would
transfer the B Claims to the Province and would receive $3,600,000 as an
initial payment;

2.       Boss would receive
$2,500,000 with the balance of the Provinces settlement funds deposited in
escrow;

3.       a new subsidiary of Boss,
which became Blizzard Finance Corp., would be incorporated;

4.       Boss would be reorganized
pursuant to a plan of arrangement under the
Business Corporations Act
,
S.B.C. 2002, c. 57;

5.       Boss was to assign any and
all of Bosss potential causes of action against, and rights to, claim
compensation of any kind whatsoever from the respondent to Blizzard Finance;
Blizzard Finance also was assigned Bosss rights to dispute and recover
payments made by Boss on [the respondents] accounts;

6.       Boss
was to pay the respondents accounts issued in connection with the prosecution
and settlement of the action against the Province.

[8]

It was envisioned
that the steps and documents required to effect the settlement would be taken
soon after March 2014, but there was delay.

[9]

The parties
entered into an Arrangement Agreement dated November 21, 2014.  It recited
the agreement to assign Bosss rights against the respondent and attached a
plan of arrangement and assignment.  The plan of arrangement was approved by
the Court on January 22, 2015.  In Article 2, the plan stated that it
was made pursuant to, is subject to the provisions of and forms part of, the
Arrangement Agreement  The assignment was dated January 23, 2015.  It
referred to the March 2014 letter agreement.

[10]

An issue arose at
the hearing of the appeal concerning the timing of the assignment relative to
the approval of the plan of arrangement.  Having reviewed the documents, I am
satisfied that nothing turns on this point.

[11]

On March 27,
2014, a draft of the letter agreement was sent to the respondent.  Its final
bill was sent on May 30, 2014 and was paid from the settlement proceeds on
June 3, 2014.  It is common ground that the management of Boss did not
dispute the amount of the respondents accounts.

[12]

In September 2014,
after the three-month period specified for seeking a review, the Beruschi Group
became aware that the respondents bill had been paid and asked Boss to take
out an appointment to review the respondents accounts pursuant to the
provisions of the March 2014 letter agreement.  The appellants did so.

[13]

The respondent
took the position that the appointment was out of time.  Although the plan of
arrangement had not yet been approved, on December 30, 2014, the Registrar
directed that Blizzard Finance apply for an extension of time pursuant to
s. 70(11) of the
Act
.  It did so.

[14]

On May 1,
2015, Mr. Justice McEwan dismissed the application to extend time.

Trial Reasons

[15]

The judge began by
setting out ss. 70(1) and (11).  He then discussed the background of
the dispute between the appellants and the Beruschi Group which culminated in the
March 2014 letter agreement.  He stated:

[11]      Something
called a letter agreement dated March 28, 2014 was sent to the lawyers.  It
stated an
intention
that Boss Power would assign to the new company
(Blizzard) any of its right to claim compensation against the lawyers in
negligence, breach of contract, breach of fiduciary duty, and breach of trust.

[16]

Boss was obliged
to pay the respondents accounts.

[17]

The judge
described the initiation of the review proceedings as follows:

[14]      On
September 4, 2014, a lawyer named Paul Brackstone, counsel for Mr. Beruschi,
an anticipated shareholder of Blizzard, asked whether the lawyers had billed
Boss Power and whether the bill had been paid. On October 30, 2014 an
appointment to review the bill was filed by Boss Power.

[15]      Blizzard
took an assignment of the rights under the appointment on January 23, 2015,
when its agreement with Boss Power concluded.

[18]

The judge referred
to a number of authorities addressing the special circumstances requirement in
s. 70(11).  He stated:

[18]      There
are a number of judicial pronouncements to the effect that the threshold is not
high (see:
Bull Housser & Tupper v. GPF Holdings Corp.
, [1998]
B.C.J. No. 2773 (S.C.) at para. 15), and that the determination of
proof of special circumstances requires a balancing of the degrees of
prejudice to either party, leading, in the end, to a question of whether it is right
and reasonable to make the order. In
Thornett v. Bull, Housser & Tupper
(1998), 34 C.P.C. 4th 180 (B.C.S.C.), this court, per Hutchinson J.
observed:

[7]        There
is no formula established by the case law to determine when special
circumstances arise. Each case must stand on its own circumstances and the
court must decide in each case whether the circumstances are such that it is
right and reasonable that the bill should be taxed, even though it has been
paid and the time for taxing the bill has elapsed [authorities omitted].

[19]

The judge observed
at para. 20 that the size of the bill may be a special circumstance.  He
recapitulated the position of Blizzard Finance:

[21]      Blizzard
submits, in summary, that if no special circumstances order is made, it will be
prejudiced because it will have lost a right to review a bill it had no
capacity to challenge within the time limit stipulated in s. 70(1) of the
Legal
Profession Act
. It submits that, on the other hand, the lawyers will not be
prejudiced if a special circumstances order is made, because they knew an
assignment was intended and were in a position to prepare themselves for
Blizzards challenge.

[20]

The respondent
relied on the payment of the accounts without protest by the appellants.  It
asserted that Blizzard Finance had no standing to pursue a review and that the
assignment was champertous.  The judge turned to the law of champerty, stating:

[27]      Champerty
is a species of maintenance. In
Thomson v. Wishart
(1910) 16 C.C.C. 447
the Manitoba Court of Appeal defined maintenance as follows:

Maintenance,
which includes champerty, is defined as the act of assisting the plaintiff in
any legal proceeding in which the person giving the assistance has no valuable
interest, or in which he acts from any improper motive: Stephen Dig.,
art. 141.

* * *

Although
maintenance and champerty were once crimes, and are still sometimes classed as
such, they are now obsolete as crimes and are only invoked in respect of the
invalidity or illegality of contracts that may involve one or other of them.

[28]      In
Silverado
Oilfield Ventures Ltd. v. Davidson
, [2014] 6 W.W.R. 295 (ABQB) [
Silverado
],
the court observed:

25        As
noted in
McIntyre Estate v. Ontario (Attorney General)
(2002), 61 OR
(3d) 257 (CA) at para 32, the fundamental aim of the law of champerty and
maintenance is the protection of the administration of justice from abuse. It
is a principle of public policy.

26        Maintenance
is directed against those who become involved with the litigation of others in
which the maintainer has no interest and for an improper motive, which may
include but is not limited to officious intermeddling or stirring up strife.
Champerty is an egregious form of maintenance where the maintainer shares in
the profits of the litigation. Without maintenance, there can be no champerty.
There is no maintenance if the alleged maintainer has a justifying motive or
excuse:
McIntyre Estate
at paras 26, 27, 28 and 34.

27
Fredrickson
v. Insurance Corp of British Columbia
(1986), 3 BCLR (2d) 145 (CA), affd
[1988] 1 SCR 1089 [
Fredrickson
], remains the leading case in Canada with
respect to the rule against champerty and maintenance. Justice McLachlin (as
she then was) referred to the general rule that a bare cause of action in tort
is not assignable, noting that the exact ambit of the rule is elusive. She
commented at para 23 that the rule is subject to a number of exceptions,
and in each case:

...
the court must ask itself whether the assignment can fairly be seen as prompted
by a desire to advance the cause of justice rather than as intermeddling for
some collateral reason ...

[29]      In
Fredrickson
, referred to in
Silverado
, a party who was found liable
for damages in excess of the limits of his automobile insurance assigned his
right to sue the insurer to the plaintiff to recover the excess. McLachlin J.A.
(as she then was) noted:

While
the entire transaction must be looked to, the essential question to be
considered in determining whether the assignment smacks of maintenance or
champerty is whether the assignee possessed the requisite financial interest at
the time of the assignment. In my view, the fact that at some earlier date the
interests of the assignee and the assignor were opposed, does not negate the
fact that when the assignment here in question was made, Miss Nielsen had
a very real financial interest in obtaining it. She had a judgment. The cause
of action of which she took an assignment represented her only means of
obtaining satisfaction of that judgment. Her interest in the cause of action
assigned is not created by the assignment, in which case it might well be
champertous, but antedated and existed independently of the assignment. The
assignee, in pursuing the assigned cause of action, does not seek to make a
profit, but only to recover the amount of her judgment. Moreover, she is not a
stranger to the action assigned. She was involved in the proceedings which give
rise to it.

[30]      McLachlin J.A.
also noted that the rule was similar for contract cases:

The rule
precluding the assignment of mere rights of action in contract is based on the
rule against maintenance and champerty. As in the case of causes of action in
tort, where the assignee possesses a sufficient pre-existing interest in the
cause of action assigned, the suggestion of maintenance is negated and the
assignment is valid.

[21]

The judge commented
on the assignment agreement:

[33]      The
assignment agreement purports to assign to Blizzard any rights Boss Power may
have had against the lawyers for their part in the inclusion of the B claims
in the original settlement. Since at least March 28, 2014 the
intention
of Boss Power and Blizzard to conclude an agreement assigning Blizzard the
right to claim compensation against the lawyers for negligence, breach of
trust, breach of contracts, and breach of fiduciary duty was known to the
lawyers. The effect of the assignment, from Blizzards perspective, is that it
acquired the right to sue the lawyers for Boss Powers loss of the $3.6 million
paid to Mr. Beruschi, and to tax their fees. [Emphasis in original.]

[34]      Blizzards
claim is that its dissident position within Boss Power, followed by the
assignment, gives it a sufficient interest to bring the matter to the attention
of the court. They submit furthermore that the amount of the bill relative to
the hourly value of the work is on its face so disproportionate that the courts
supervisory jurisdiction under the
Legal Profession Act
ought to be
engaged, and that the court ought to find that special circumstances have
been established.

[22]

The judge rejected
this contention.  He stated:

[35]       that
dissent within Boss Power as to the value of the lawyers services is not a financial
interest as described in the case law. Collective entities like corporations
deal with other entities and individuals through authorized representatives.
The lawyers were not obliged to poll dissenting members to satisfy themselves
that they were dealing with the entity lawfully. In this case the evidence is,
at most, that the lawyers had been made aware that there was dissatisfaction
within
Boss Power respecting the settlement. There is nothing that undermines the
normal inference that the lawyers, in discussing their account and the
disbursement of funds with Boss Power, dealt with representatives authorized to
deal with them, nor is there anything to suggest that the passage of three
months without protest by those representatives was indicative of anything
other than that Boss Power was satisfied with the account. Had the dissidents
become the authorized representatives of the company before three months had
elapsed, matters might have been different, but they never acquired that
standing.

[36]      The
effect of Blizzards submission is that an interest they were unable to advance
within the company by gaining control of Boss Power, and with it, the authority
to deal directly with Boss Powers lawyers, may be asserted from outside by
means of an assignment to an entity that did not exist until several months
after Boss Power had paid the bill. That is to argue that a financial interest
the Blizzard dissidents could not assert within Boss Power, owing to the manner
in which corporate entities operate at law, materialized upon assignment to a
corporate entity they did control. This clearly offends the rule that for such
an assignment to be valid, the assignee must possess a sufficient pre-existing
interest in the cause of action assigned. Here, the interest only came about,
if at all, upon the assignment. The transaction therefore offends the rule
against maintenance.

[37]      If
I am wrong about that, or if the issue remains in doubt, the question, in any
event, is what interest, relative to the bill, was actually assigned. Boss
Power assigned an interest it did not assert in time, and had no apparent
interest in pursuing on its own behalf. At most Boss Power assigned the
opportunity to a legal stranger to assert the chance afforded by s. 20(11)
of the
Legal Profession Act
to persuade the court that special
circumstances justified a review.

[23]

The judge
continued:

[39]       Boss
Power never complained about the bill. All it has done is facilitate Blizzards
opportunity to advance a claim if it can, as an incident of extricating itself
from an unhappy internal dispute. Blizzard had no pre-existing financial
interest: all it had was the prospect of making a grievance out of something
that was not a grievance to the party who paid the bill.

[40]      The
foundation of that grievance is principally that the size of the bill,
particularly when compared to the hourly rate value of the work, should be a
matter of interest to the court as it was in
Doig
[
Doig v. Davidson
Muir
, 48 B.C.L.R. (3d) 53 (C.A.)]. Were this a case as between the lawyers
and a client, or between the lawyers and a person who had actually paid the
lawyers bill, this might be more persuasive. As I have noted, however,
Blizzard was neither a person charged nor a person who had agreed to
indemnify Boss Power and thus falls outside the class of entities who may
apply to tax a lawyers bill before three months has elapsed.

[42]      The
Blizzard dissidents unhappiness with the settlement was not a pre‑existing
interest in the requisite legal sense, and the purported assignment is,
accordingly, a species of maintenance.

[43]      It
is also offensive on the grounds that the assignment is an attempt to assert an
interest in the bill not shared by the assignor. Boss Power had no interest in
challenging the bill, except as a bargaining chip in its dealing with the
Blizzard dissidents. This is surely improper.

[24]

The judge
considered that the assignment was of an abstract grievance because the
appellants did not dispute the respondents accounts.  He added that the size
of the bill alone would not have moved him to find special circumstances.

Positions of the Parties

[25]

The appellants
assert that the judge erred in finding that the assignment was champertous and in
suggesting that there were not special circumstances justifying an extension
of time to review the account.

[26]

The respondent contends
that Blizzard Finance does not have standing to pursue a review of its
accounts.  It states that the judge correctly concluded that the assignment was
champertous and that the assertions of the appellants are not special
circumstances as required by s. 70(11) of the
Act
.

Discussion

Assignment

[27]

In their factum,
the appellants state:

51.       The
right of a client to require the assessment of the account of a lawyer is a
chose in action and is assignable.

[28]

In support of this
assertion, they rely on
Cem Ali (Re)
, 2011 BCSC 822, where Mr. Justice
Burnyeat observed at para. 40:

The
right of a client to require the assessment of the account of a lawyer is a
chose [in] action arising either by way of the contract between the client and
lawyer or by way of the statutory provisions created by the
Legal Profession
Act
.

Consideration
of the provisions of the
Act
engages the issue of standing, but the
first issue is the assignability of the right to an assessment as an implied contractual
term.

[29]

The
Act
does
not provide for the assignment of a clients right to an assessment.  In the
absence of an express contractual provision providing for assignment, the right
to assign the right to an assessment must be an implied contractual term.  It
is said to flow from the courts inherent jurisdiction to review lawyers
accounts.

[30]

In their reply
factum at para. 24, the appellants assert:

There is no reason in public policy or
otherwise why an assignment of a right to review should be treated any
differently than the assignment of a cause of action in negligence.

The
difference may be s. 70 of the
Act
.

[31]

Causes of action
against lawyers for negligence are not dealt with in the
Act
.  The
common law or contractual right to do so is not affected by the legislation.  The
assessment of lawyers bills is addressed in the legislation.  The question is
whether the
Act
provides a code for dealing with assessments so as to
exclude the inherent jurisdiction of the court to do so.

[32]

In
Harrington
(Guardian ad litem of) v. Royal Inland Hospital
(1995), 14 B.C.L.R. (3d)
201 (C.A.),

writing for a majority of this Court, Mr. Justice Hinds
observed:

[192]    In
my view there is no distinction between the inherent jurisdiction of a judge of
a superior court to review a solicitors bill of costs and the inherent
jurisdiction to review the reasonableness of a solicitors fee arising out of a
contingency fee agreement. That prevails whether or not the contingency fee
agreement has been approved in principle by a previous court order, or whether
or not the contingency fee agreement involves an infant.

[33]

Hinds J.A.
set out the relevant provisions of the
Act
and then stated:

[196]    In my
view, the inherent jurisdiction of the court was not curtailed by the statutory
enactments contained in s. 71(1), (2), (3) and (4) and s. 78(8) and (9)
of the
Legal Profession Act
.

[197]    The
second basis for jurisdiction in the circumstances of this case is the parens
patriae inherent jurisdiction of the court to protect the welfare of infants.

[198]    In
Deans
v. Armstrong
[(1983), 46 B.C.L.R. 273 (S.C.)] the Chief Justice had
directed that a substantial contingency fee sought by a solicitor who had
negotiated a large structured settlement for an infant plaintiff be referred to
the registrar for taxation. On taxation the Master (acting on behalf of the
registrar) reduced the amount of the fee. The solicitor appealed the taxation
and in the course of his decision with respect to the appeal McKenzie J.
considered the jurisdictional basis for the reference by the Chief Justice. At
pp. 278-279 he said this:

By
what authority did the Chief Justice refer this matter to the district
registrar for taxation...

I
do not think there is any mystery about the authority to refer, and I infer
that the reference was made under this courts inherent jurisdiction.
Wallace J. examined this jurisdiction in relation to legal bills in
Ladner
Downs v. Thauberger
, [1983] 5 W.W.R. 522 (B.C.S.C.). At p. 532 he
said:

He
also adopted the statement of I.H. Jacob in his work The Inherent
Jurisdiction of the Court (1970), at p. 23:

The
inherent jurisdiction of the court may be invoked in an apparently
inexhaustible variety of circumstances and may be exercised in different ways.

One
such way is, of course, the parens patriae inherent jurisdiction of the court
to guard the welfare of infants as expounded in
Wellesley v. Beaufort (Duke)
(1827), 2 Russ. 1 at 18, 38 E.R. 236, affirmed by the House of Lords
in 2 Bli. N.S. 124, 4 E.R. 1078.

My
conclusions up to this point are that the Chief Justice referred this matter to
the registrar for taxation for two basic reasons  because the fee was
extraordinarily large, and because an infant was involved. He did so under the
courts inherent jurisdiction.

[199]    I
conclude that because the plaintiff in this case was an infant the court had,
under its parens patriae inherent jurisdiction, the right to review the
contingency fee agreement. Moreover, it had jurisdiction to determine the
reasonableness of the contingency fee and the amount thereof to which the
solicitor was entitled.

[34]

Mr. Justice Finch
(as he then was) agreed with the reasoning of Hinds J.A.

[35]

In
Barnard,
Robertson, Heisterman & Tait (Re)
(1926), 37 B.C.R. 161, [1926] 3
D.L.R. 113 (C.A.) [
Barnard, Robertson
], two of five members of this
Court suggested that a limitation provision in the
Legal Professions Act
,
R.S.B.C. 1924, c. 136, barred an application for the delivery of a
solicitors bill of costs for taxation.  The other judge who was considered to
be in the majority did not comment on the issue.  The relevant sections of the
legislation stated:

100.     Notwithstanding
any law or usage to the contrary, any barrister or solicitor in the Province
may contract, either under seal or otherwise, with any person as to the
remuneration to be paid him for services rendered or to be rendered to such
person in lieu of or in addition to the costs which are allowed to said
barrister or solicitor, and the contract entered into may provide that the
barrister or solicitor is to receive a portion of the proceeds of the
subject-matter of the action or suit in which the barrister or solicitor is or
is to be employed, or a portion of the moneys or property as to which the
barrister or solicitor may be retained whether an action or suit is brought for
the same or a defence entered or not, and such remuneration may also be in the
way of commission or percentage on the amount recovered or defended against, or
on the value of property about which any action, suit, or transaction is
concerned.

101.     At
any time within three months after the making of the contract, the person who
has so contracted with a barrister or solicitor, or the representative of such
person, may apply by motion or petition to a Judge of the Supreme Court; and if
the Judge does not consider the contract fair and reasonable, he shall have
power either to modify the contract or to order the contract to be cancelled,
and the costs, fees, charges, and disbursements in respect of the business done
to be taxed in the same manner as if no such contract had been made.

[36]

Referring to
Barnard,
Robertson
in
Monteith v. Calladine
(1964), 47 D.L.R. (2d) 332
at 336, 49 W.W.R. 641 (B.C.C.A.), Davey J.A. stated:

Under
Re Solicitors
[
Barnard, Robertson
], the failure to move within
the stipulated time bars not only the statutory right of review but also the
inherent jurisdiction of the Court, although if the matter had been at large, I
should have preferred the conclusion of Martin and Galliher, JJ.A., that
the limitation does not touch the inherent jurisdiction of the Court.

[37]

Neither of these
cases was referred to in
Harrington
, but it would appear that from at
least 1926 it has been considered that the law in this Province is that a limitation
provision in the
Act
does oust the inherent jurisdiction of the court to
review contracts between clients and lawyers providing for the remuneration to
be paid to the lawyer.  In my view, while that does not resolve the question
whether s. 70 has ousted the courts inherent jurisdiction to assess lawyers
accounts, it provides an example of the possible effect of legislation on the
inherent jurisdiction of the court.

[38]

Both
Barnard,
Robertson
and
Monteith
concerned the review of agreements, which were
dealt with then and in the present legislation separate from provisions dealing
with taxing lawyers accounts.  It also is instructive to consider what was
addressed by the members of this Court in
Barnard, Robertson
.

[39]

The headnote of
the case in the British Columbia Reports states:

Per
MACDONALD, C.J.A., McPHILLIPS
and MACDONALD JJ.A.: That the application for an order for delivery of a
bill for taxation should be dismissed not only on the ground that the
application was not made within three months as required by section 101 of
the Legal Professions Act but also on the general law applicable to the facts
disclosed even if the section should not be regarded as a bar.

[40]

The Chief Justice
allowed the appeal because the proceeding was not taken within the delay
mentioned in section 101 of the Legal Professions Act.  He did not refer
to the judgment of Mr. Justice MacDonald.  Mr. Justice McPhillips
stated simply that he allowed the appeal.  Mr. Justice Martin, with whom
Mr. Justice Galliher agreed, also allowed the appeal, largely relying on
the inherent jurisdiction of the court to review the accounts of lawyers.

[41]

MacDonald J.A.
stated at 178:

on the facts disclosed in the material filed, this section [s. 101], once
the agreement is produced, effectively bars the application.

He continued:

As,
however, two of my brothers take a contrary view in respect to section 101
creating a bar and the matters involved are of some importance I will deal with
the question on the merits apart altogether from the view expressed in regard
to the limitations imposed by said section.

[42]

MacDonald J.A.
did so and rejected the clients position on the merits.  He concluded at 183:

the application for an order for the delivery of a bill and for taxation should
have been dismissed, not only on the ground that the application was not made
within the three months referred to in section 101 of our Legal Professions
Act, but also on the general law applicable to the facts disclosed even if said
section should not be regarded as a bar.
Pro forma
the appeal should be
allowed as, with deference, the proper course was not pursued below.

[43]

Harrington
concerned the approval of an infant
settlement.  In dissenting reasons, Madam Justice Southin observed that the
application that led to the orders under appeal was not to determine the fees
but simply to authorize payment in accordance with the agreement which had
received the approval of the court.

[44]

In
Harrington
,
Southin J.A. relied on
Harrison v. Tew
, [1990] 2 A.C. 523, [1990] 1
All E.R. 321 (H.L.), and distinguished the analysis of Wallace J. in
Ladner
Downs
on the basis that it had been overtaken by
Harrison
.  She
concluded that:

[143]
the sections of the
Legal Profession Act
now in force clearly provide a
code by which legal fees are to be assessed.  There is no longer an inherent
jurisdiction.

[45]

The majority in
Harrington
clearly was aware of the analysis undertaken by Southin J.A.  It preferred
the approach of Wallace J. and specifically held that the inherent
jurisdiction of the court to assess a lawyers bill was not ousted by the
legislation.

[46]

The applicable
legislation in
Harrington
is analogous to the legislation applicable to
the present appeal.  Although the circumstances in
Harrington
differ
from those in the present case, both Southin J.A. and the majority were
considering whether the legislation was a complete code that ousted the
inherent jurisdiction of the court.  The majority held that it did not.  In my
view, it is not open to a division of this Court to reach a contrary conclusion.

[47]

There being an
inherent jurisdiction in the court to order the review of a lawyers account,
subject perhaps to express contractual terms excluding such review, a term not
contained in the agreement in issue on this appeal, it is an implied term of
retainer contracts that they are subject to the courts inherent review
jurisdiction.  That jurisdiction has not been taken away by the
Act
.  I accept
that the right to review is a
chose in action
and is assignable.

Standing

[48]

The respondent contends
that the appellants do not have standing to seek an assessment because they
were not charged with paying the account.  They rely on the wording of s. 70(1)
that gives the right of review to the person charged.  As noted, pursuant to
s. 64, person charged includes a person who has agreed to pay for legal
services, whether or not the services were provided on the persons behalf.

[49]

The appellants note
that the definition is inclusive.  That is, person charged is greater than
stated in the definition.  I see merit in this contention.  The definition
first appeared in the
Legal Profession Act
, S.B.C. 1987, c. 25,
s. 69.  It was almost identical to the definition provided in the 1998
statute.

[50]

Clearly, the
appellants were persons charged.  They had a right of review.  I have held
that the assignment of that right was valid based on an implied term in the
retainer contract flowing from the inherent jurisdiction to assess all retainer
contracts, perhaps subject only to an agreed, enforceable contractual provision
to the contrary.

[51]

In the absence of
language expressly excluding that implied right to assign, I am not
prepared to conclude that the omission of assignees in ss. 70(1)
and 64 of the
Act
, excludes assignees.  I am aware that the lawyers
assignee is included in the entities that can seek a review on behalf of a
lawyer provided in s. 70(5), but I do not consider that to affect the
reach of s. 70(1).

[52]

As the respondents
assert, the limitation on assigning the right to assess a lawyers account is
champerty.  I now turn to that issue.

Champerty

[53]

I state at the
outset that this appeal does not concern the merits of the dispute between the Beruschi
Group and the respondent.  The issue is whether the assignment to the Beruschi
Group of the appellants rights to seek a review was champertous.

[54]

In my view, the
judge correctly dealt with the law of champerty.  The law does not countenance
trading in causes of action.  The assignee must have a commercial interest in
the cause of action.  The commercial interest must pre‑exist the
assignment.

[55]

At the core of the
analysis in this appeal is whether the Beruschi Group had a pre‑existing
commercial interest in the right of the appellants to seek a review of the
respondents accounts.  In my view it did.

[56]

The judge and the
respondent focus on the internal management of Boss and the fact that it did
not contest the respondents accounts.  At one level, the dispute was between
the majority shareholders, who controlled Boss, and the minority Beruschi
Group.  Some of the lengthy battle after the settlement of the action against the
Province was fought on the corporate battlefield, but the underlying dispute involved
the inclusion of the B Claims in the settlement and the respondents
involvement in that process.

[57]

The corporate
maneuvers served the objectives of the Beruschi Group in pursuance of that
dispute, but they were merely part of the battle.  Mr. Beruschi gave
examples of the proceedings that were taken over the years.  They included an
application by Boss for an order imposing aspects of the settlement on the Beruschi
Group, an application by the Province to interplead the settlement funds, and
to require the abandonment of the B Claims or rescission of the settlement.

[58]

In my opinion, the
judge and the respondent understate the import of the letter agreement.  It
reflected the resolution of a long, protracted battle between the appellants
and the Beruschi Group.  Part of that battle concerned the unhappiness of the Beruschi
Group with the inclusion by the respondent of the B Claims in the
pleadings.

[59]

The letter
agreement was sent to the Beruschi Group.  It stated:

the
parties agree this letter agreementsets out their agreement on the terms and
conditions upon which, and the manner in which, Boss and the Beruschi Parties
will settle the Disputes.

Representatives
of Boss and the Beruschi Group signed the letter agreement signifying their acceptance
of the terms contained herein

[60]

Those terms
included: payment to the Beruschi Group of $3,600,000; payment to Boss of
$2,500,000; the incorporation of Blizzard Finance; negotiating and entering
into a plan of arrangement agreement; court approval of a plan of arrangement;
and the formal assignment of the appellants rights against the respondent.
All of these terms were fulfilled.  In my view, the fact that fulfillment took
place over a number of months does not undermine the substance of the
settlement and the fact that assignment of the appellants rights against the
respondent was an integral part of it.

[61]

Of specific note
in the context of this appeal was the specific assignment of Bosss rights to
dispute and recover payments made by Boss on [the respondents] accounts.  The
letter agreement also assigned the right to make claim[s] Boss may have against
[the respondent] in connection with [the respondents] representation of Boss,
including the inclusion of the B Claims in the Blizzard Settlement.

[62]

In my view, the
letter agreement did not merely express an
intention
that Boss Power
would assign.  It was an agreement to do so; an agreement with consideration,
signed by the parties that reflected the settlement of a long and protracted
dispute.

[63]

The respondents
position does not take into account the longstanding position of the Beruschi
Group that the appellants should not have included the B Claims in the
settlement with the Province and its contention that the respondent was
complicit in this.  It long objected to the respondent continuing to act for
the appellants in the matter.  The alleged conduct of the respondent was
wrapped into the overall dispute the Beruschi Group had with the appellants.
In my view, the Beruschi Group had a pre-existing commercial interest in having
the accounts of the respondent reviewed.

[64]

I conclude that
the obligation of Boss to pay the respondents accounts as expressed in the
letter agreement to be of no moment.  That simply set the stage for a review.
The appellants had no quarrel with the respondent, but they knew that the Beruschi
Group clearly did so.  The settlement letter left the Beruschi Group to deal
with the issue.

Special Circumstances

[65]

The fact that the
respondents accounts were paid by the appellants without protest is not a
determining factor.  Boss was obliged to do so by the terms of the settlement letter.

[66]

The Beruschi Group
did not know that the respondents account was paid until September 2014.  On
September 4, 2014, a lawyer acting for the group asked whether the
respondent has issued accounts for its services and whether those accounts
have been paid.  He repeated the inquiry on September 19, 2014.  On
September 22, 2014, he was informed that accounts had been issued and
paid.  On September 23, 2014, the lawyer asked when the accounts had been
paid and on September 24, 2014, he was informed that the accounts were
paid on June 9, 2014 (in fact, the accounts had been paid on June 3, 2014).
By this time, the three-month period specified for seeking a review had
expired.

[67]

On September 26,
2014, Mr. Beruschi told the appellants to take out an appointment to
review the accounts and that an extension of time would be sought on the basis
of special circumstances.  He stated that in due course Blizzard Finance would
take over conduct of the review proceeding.

[68]

An exchange
between lawyers representing the appellants and the Beruschi Group followed, concerning
the form and content of the appointment.  It was filed on October 20,
2014.

[69]

In large part,
this accounted for the failure of the review application to be filed in time.
The respondent contends that the Beruschi Group should have included a
provision in the letter agreement requiring the appellants to advise it if the
accounts were paid.  I question this.  The appellants knew they were
obliged to pay the accounts and knew that the Beruschi Group intended to
challenge them.  Arguably, they should have advised the Beruschi Group when the
accounts were paid so as not to jeopardize the effectiveness of the assignment
to which they agreed.

[70]

In my view, it is
of some significance that the respondent knew of the assignment of Bosss right
to challenge its accounts as of March 27, 2014.  The respondents account
was sent to Boss on May 30, 2014 and paid from trust funds held by the
respondent on June 3, 2014.  The Beruschi Group did not know this until the
latter part of September 2014.  It then acted.  The delay by the Beruschi Group
is explained.  There is no legal prejudice to the respondent.

[71]

The judge noted
that if the issue were between the appellants and the respondent, the size of
the bill might be more persuasive as a special circumstance.  The bill for fees
was $800,000; unbilled time was approximately $320,000.  In my view, the size
of the account is a relevant factor.

[72]

The respondent
contends that the court can look to only the circumstances of the appellants
when considering whether special circumstances exist.  In my view, this is too
narrow an approach on the facts of this case.  It risks putting form over
substance.

[73]

The party of
interest is the Beruschi Group.  Because of the failure of the appellants to
advise that the respondent had issued an account, and the account was paid,
until after the required three-month period had elapsed, the Beruschi Group is
deprived of the right assigned to it unless the time is extended.  The Beruschi
Group did not delay once it knew the true state of affairs.  In my view, on the
facts of this case, there are special circumstances that warrant extending the
time.

Conclusion

[74]

In my view, the
court retains inherent jurisdiction to direct the review of lawyers accounts.
It is an implied term of the retainer contract that accounts can be reviewed.
The right to a review is a
chose in action
that is assignable.

[75]

The Beruschi Group
had a financial interest in the conduct and accounts of the respondent that pre-existed
the settlement letter.  By that letter, the appellants contracted to assign
their right to review the respondents accounts to Blizzard Finance.  Those
rights ultimately were assigned to Blizzard Finance.

[76]

Blizzard Finance has
standing as assignee to seek a review of the respondents accounts.

[77]

The assignment of
the appellants right to seek a review of the respondents accounts was not
champertous.

[78]

Special
circumstances exist to extend the time for bringing an application to review
the accounts.

[79]

I would allow this
appeal and direct that the Registrar review the respondents accounts.

[80]

The appellants ask
that this Court order that the review be postponed pending a determination of
the claim of negligence against the respondent.  I would not make that
order and leave it to the Registrar to proceed as is considered appropriate in
the circumstances.

The Honourable Mr. Justice Chiasson

I agree:

The Honourable Mr. Justice
Donald

I agree:

The Honourable Mr. Justice
Goepel


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Ma v. Nutriview Systems Inc.,

2016 BCCA 4

Date: 20160105

Docket: CA41850

Between:

Harry Ma

Respondent

(Plaintiff)

Nutriview Systems
Inc. and
Brian Thurston

Appellants

(Defendants)

Before:

The Honourable Madam Justice Newbury

The Honourable Madam Justice Bennett

The Honourable Madam Justice Fenlon

On appeal from:  An
order of the Supreme Court of British Columbia, dated
April 28, 2014 (
Ma v. Nutriview Systems Inc.
, 2014 BCSC 725,
Vancouver Docket No. S111643).

Counsel for the Appellants:

C.E. Hunter

Counsel for the Respondent:

N.S. Ganapathi
A. Kurt, A/S

Place and Date of Hearing:

Vancouver, British
  Columbia

December 14, 2015

Place and Date of Judgment:

Vancouver, British
  Columbia

January 5, 2016

Dissenting Reasons by:

The Honourable Madam Justice Newbury

Written Reasons by:

The Honourable Madam Justice Bennett (Page 19, para. 38)

Concurred in by:

The Honourable Madam Justice Fenlon

Summary:

Mr. Thurston

and
Nutriview
Systems Inc.
appeal an order finding Mr. Thurston
made fraudulent misrepresentations to induce Mr. Ma (respondent) to
contract. The trial judge found Mr. Ma credible and Mr. Thurston not.
After trial, a witness filed an affidavit stating Mr. Ma offered him a
bribe for favourable testimony, he ultimately gave only truthful testimony he
would have given anyway, and he accepted cash from the respondent after trial.
The appellants argue (1) the trial judge engaged in impermissible propensity
reasoning with respect to Mr. Thurston and (2) sought to admit the
witnesses recent allegations as fresh evidence. Held: Appeal dismissed. The
trial judge did not engage in propensity reasoning. The witnesss affidavit
does not meet the test for admission of fresh evidence. Although satisfying the
other criteria to varying degrees, it is not credible enough to be reasonably
capable of belief. Madam Justice Newbury dissenting, would have admitted the
fresh evidence in the interests of justice and ordered a new trial.

Dissenting Reasons for
Judgment of the Honourable Madam Justice Newbury:

[1]

This appeal was brought on one question of fact alone  whether the
trial judge erred in finding that a contract for the purchase by the plaintiff Mr. Ma
of the right to conduct the Nutriview vending machine business in certain
school districts was induced by a misrepresentation made by the defendant Mr. Thurston,
the principal of the defendant Nutriview Systems Inc. The misrepresentation was
that the company would buy back the franchise rights, no questions asked,
for the full purchase price, if Mr. Ma was dissatisfied with his deal. This
finding was reached after an 11-day trial in which the plaintiff had alleged
breach of contract, breach of the
Sale of Goods Act
, breach of fiduciary
duty, and negligent and fraudulent misrepresentation on the part of the
defendants, and the defendants had counterclaimed for damages for breach of
contract.

[2]

The trial judge issued lengthy reasons (indexed as 2014 BCSC 725) in
which he rejected almost all of plaintiffs claims. He did find, however, that Mr. Thurston
had:

made promises and
representations knowing they were not true in order to induce the plaintiff to
enter this improvident contract. Thus, this is a promise which Mr. Thurston
made and which he had no intention of keeping. As such  this is a
fraudulent misrepresentation. [At para. 202.]

Finding that Mr. Ma had been induced to enter into the
agreement by the guarantee, and that he had elected to void the contract
within the first year of the transaction, the trial judge ruled that he was
entitled to rescission. The Court ordered that Mr. Thurston and Nutriview
were jointly and severally liable to repay the plaintiff the original purchase
price for the franchise, namely $435,093.75. The defendants counterclaim was
dismissed.

[3]

There is no doubt that the trial was fact-intensive, and depended to a
large degree on credibility findings. On the whole, the Court favoured Mr. Mas
testimony over that of Mr. Thurston. The latter (who acquired the business
one day before selling it to Mr. Ma) was found to be a shrewd businessman.
He had worked in the past as a motivational speaker. In his negotiations with Mr. Ma,
he had painted a rosy picture for Mr. Ma of a high potential of success
and profits: remote monitoring, corporate sponsorship, advertising from
sponsors, preferential pricing. (Para. 67.) None of these materialized. Mr. Ma,
on the other hand, was not experienced in business, was only 22 years old, and
had used money from his parents to buy the franchise. Although the Court did
not accede to Mr. Mas suggestion that he had difficulty with English, it
accepted his testimony that only one of the nine documents Mr. Thurston
said he had provided to Mr. Ma as Schedule B to the agreement, had been
provided. Mr. Mas denial was found to be more consistent with all the
circumstances than the confident assertion of Mr. Thurston.
(Para. 97.)

[4]

The buy-back guarantee was not reflected in the written purchase agreement,
and indeed the document stated that the purchase price was non-refundable. It
also contained an entire agreement clause and provided in para. 13.7
that:

It is expressly understood and
agreed that Nutriview Systems Inc. has made no representations, inducements,
warranties, or promises whether direct, indirect, has [sic] collateral, oral or
otherwise, concerning this Agreement, the matters contained herein, or
concerning any other matter which are not embodies [sic] herein.

[5]

Mr. Ma testified that although he had been told by a friend that
the guarantee should be reflected in the agreement, he had not wanted to offend
Mr. Thurston by insisting on it. The trial judge observed:

I also find as fact that Mr. Thurston
discouraged Mr. Ma from seeking the advice of a lawyer. The Franchise
Agreement is completely one-sided. Mr. Thurston made several promises that
are not contained in the document. I conclude that it is far more likely than
not that Mr. Thurston told Mr. Ma not to waste money on a lawyer.

Mr. Thurstons advice in
this regard was cynical and manipulative. Mr. Thurston was taking
advantage of Mr. Mas naiveté. A reasonable person in Mr. Mas
position would see the advice for what it was: the mere fact that Mr. Thurston
advised him not to see a lawyer would be a cogent reason for Mr. Ma to
seek independent legal advice.

Mr. Ma was entering into
the largest financial transaction of his young life. He had only met Mr. Thurston
a couple of weeks earlier. Of course he should have sought legal advice.

But Mr. Ma did not see it
that way. He believed and trusted Mr. Thurston and let this trust
overwhelm his common sense. [At paras. 77-80.]

[6]

The trial judge noted that clauses such as para. 13.7 of the
agreement are normally construed to exclude all liability for misrepresentation
except
where the misrepresentation is one of a fraudulent character
rendering the contract of sale voidable: see
Peters v. Parkway Mercury
Sales Ltd.
(1975) 10 N.B.R. (2d) 703 (C.A.), cited in
Leimbigler v.
Rabbiosi
[1983] B.C.J. No. 843 (Co. Ct.). See also
1018429

Ontario
Inc. v. FEA Investments Ltd.
(1999) 179 D.L.R (4th) 268 (Ont. C.A.); and
D.L.G.
& Associates Ltd. v. Minto Properties Inc.
2014 ONSC 7287, in which
disclaimer and exculpatory clauses generally were found not to be effective in
the face of fraudulent misrepresentations; and
Sanghera v. Danger Figure
Centre (Burnaby) Ltd.
2007 BCSC 1308 at para. 15,
per
Garson J.
(as she then was). The trial judge found in the case at bar that Mr. Thurston
had had no intention of honouring the buy-back guarantee, and that it was
therefore a fraudulent misrepresentation. (Paras. 191-208).

[7]

Ms. Hunter on behalf of the defendants did not take issue with the law
on this point, or with the high standard of review that must be met by a
litigant who alleges errors of fact on the part of the court below. As is well
known, the appellant must show that the trial judge made a palpable and
overriding error:
Housen v. Nikolaisen
2002 SCC 33 at para. 10.
Instead, counsel argued that the trial judge had engaged in a forbidden chain
of propensity reasoning in finding that Mr. Thurston had made the
misrepresentation with no intention of living up to it. The defendants relied in
particular on the trial judges reasoning at paras. 66-9 of his reasons,
where he quoted the well-known passage from
Faryna v. Chorny
[1952] 2
D.L.R. 354 (B.C.C.A.) concerning credibility:

The credibility of interested
witnesses, particularly in cases of conflict of evidence, cannot be gauged
solely by the test of whether the personal demeanour of the particular witness
carried conviction of the truth.
The test must reasonably subject his story
to an examination of its consistency, with the probabilities that surround the
currently existing conditions
. In short, the real test of the truth of the
story of a witness in such a case must be
its harmony with the preponderance
of the probabilities which a practical and informed person would readily
recognize as reasonable in that place and in those conditions
. Only thus
can a Court satisfactorily appraise the testimony of quick-minded experienced
and confident witnesses, and of those shrewd persons adept in the half-lie and
of long and successful experience in combining skillful exaggeration with
partial expression of the truth. [At 357; emphasis added.]

The trial
judge then continued:

Mr. Thurston
shrewdly painted a rosy picture for Mr. Ma of a high potential of success
and profits: remote monitoring, corporate sponsorship, advertising from
sponsors, preferential pricing. Yet he appeared to be sufficiently
sophisticated to understand that if he made promises to Mr. Ma, omitted
them from the contractual document, then included an entire agreement clause
in the contract, his promises were unenforceable
.

Thus,
it is entirely consistent with Mr. Thurstons
approach to these negotiations for Mr. Thurston to make a promise of a
money back guarantee
. He obviously knew that such a promise would give
comfort to Mr. Ma.

In the words of
Faryna v.
Chorny
, Mr. Mas evidence is entirely consistent with the
probabilities surrounding the existing conditions
. [At paras. 67-69;
emphasis added.]

[8]

In the defendants submission, this reasoning was prohibited by the
principle that character evidence may not be used as circumstantial proof of
conduct. (Ms. Hunter did not assert that this was an extricable error of
law, although the point was arguable.)  Counsel referred us to
R. v. Handy
2002
SCC 56. In that case, a court of appeal had overturned the respondents conviction
on a charge of sexual assault causing bodily harm. His defence had been that
the sex was consensual. The Crown had introduced evidence from his former wife
regarding seven prior incidents to show that he had a propensity to inflect
painful sex and that when aroused, he would not take no for an answer.

[9]

The Court characterized the case as a contest over the admissibility of
similar fact evidence (see para. 27), but also addressed the use of
character evidence as circumstantial proof of conduct. At para. 31, Binnie
J. stated for the Court:

The respondent is clearly correct
in saying that evidence of misconduct beyond what is alleged in the indictment
which does no more than blacken his character is inadmissible. Nobody is
charged with having a general disposition or propensity for theft or violence
or whatever. The exclusion thus generally prohibits character evidence to be
used as circumstantial proof of conduct, i.e., to allow an inference from the similar
facts that the accused has the propensity or disposition to do the type of
acts charged and is therefore guilty of the offence. The danger is that the
jury might be confused by the multiplicity of incidents and put more weight
than is logically justified on the ex-wife's testimony (reasoning prejudice)
or by convicting based on bad personhood (moral prejudice): Great Britain Law
Commission, Consultation Paper No. 141,
Evidence in Criminal
Proceedings: Previous Misconduct of a Defendant
(1996), at s. 7.2. [At
para. 31.]

[10]

An exception to the general non-admissibility of character or propensity
evidence occurs, of course, where evidence of
previous misconduct
[is]
so highly relevant and cogent that its probative value in the search for truth
outweighs any potential for misuse. (At para. 41; my emphasis.) Binnie J.
explained in
Handy
:

Canadian case law recognizes that
as the similar facts become more focussed and specific to circumstances
similar to the charge (i.e., more situation specific), the probative value of
propensity, thus circumscribed, becomes more cogent. As the differences and
variables that distinguish the earlier similar facts from the subject matter
of the charge in this type of case are reduced, the cogency of the desired
inferences is thought to increase. Ultimately the policy premise of the general
exclusionary rule (prejudice exceeds probative value) ceases to be true. [At para. 48.]

In
Handy
itself, the Supreme Court found that the evidence
of similar facts was not sufficiently cogent as to outweigh its prejudicial
effect, and affirmed its exclusion.

[11]

Propensity evidence, or reasoning, was discussed by Charron J.A. (as
she then was) in
R. v. L.B.
(1997) 35 O.R. (3d) 35 (C.A.), which was
cited with approval in
Handy
. She observed that:

propensity reasoning in and of itself is not prohibited.
Indeed, it is usually inevitable, given the nature of the evidence and the reason
for its admission. Therefore, the trier of fact is entitled to infer from the
evidence of prior misconduct  that he is
more likely to be
in
possession of the narcotics in question and therefore guilty of the offence
with which he is charged.

It is this propensity reasoning that is based solely on
the general bad character of the accused, as revealed through this evidence of
discreditable conduct, which is prohibited
. Consider, for example, if Lepage
had been charged with trafficking in a narcotic as a result of a sale of a
piece of cocaine to a police agent, and the sole issue at trial was
identification. Evidence that Lepage was a major dealer in drugs, without more
would have probative value, but only to show that he is the type of person who
could well have been selling the narcotics as alleged. In this example, there
is nothing about the evidence of prior discreditable conduct that connects it
to the sole issue in the case, identification. The risk of prejudice, in the
sense described above, would be substantial. There would be a real risk that
the trier of fact who learns that the accused is a major drug dealer may view
him as a bad man, one who deserves punishment regardless of his guilt of the
instant offence and may be less critical of the evidence presently marshaled
against him.
No matter what probative value can be attached to the fact
that he is a major dealer in drugs, the evidence would not be admissible since
it is not connected to an issue in the case other than the accused's general disposition
to commit the type of offence with which he is charged
. If, on the other
hand, the sale of the cocaine to the police agent had been carried out in
unusual circumstances which bore some distinctive features and the evidence of
prior drug dealings bore many of the same features, a connection may well be
made to the issue of identification, and the evidence could be admitted if its
probative value exceeded its prejudicial effect

.         .         .

Therefore, in assessing this
aspect of the probative value of the evidence,
it is important to
circumscribe the meaning of disposition or propensity
much in the same
way as the notion of prejudice described above.
The forbidden line of
reasoning is that which leads to the conclusion that the accused committed the
offence with which he is charged based, not on the strength of the evidence
which has a connection to the issues in the case, but rather, on the strength
of the evidence that he is a bad person who would have a tendency to commit
this offence
. [At 57-8; emphasis added.]

[12]

I fail to see the relevance of the principles discussed in
Handy
and
L.B.
to the case at bar. The trial judge was not presented here with
similar fact evidence, nor with the prejudicial effect of prior conduct tending
to support a general disposition or propensity for fraud. He considered the
evidence of Mr. Thurstons representations that had led Mr. Ma to
sign the agreement and found they were consistent with Mr. Thurstons
promising a money-back guarantee orally, but not in the written document. All
of the evidence was of a piece: its consistency with the probabilities that
surrounded the  existing conditions was carefully examined. (
Faryna v.
Chorny.
) Mr. Thurston was found to have had acted in a particular way
in
his negotiations with Mr. Ma
 not to have had a
pre-existing
tendency
to do so, or to have done something similar on a
previous
occasion.

[13]

The defendants advanced other arguments in their factum as to why, in their
opinion, the preponderance of evidence should have led objectively to the
rejection of Mr. Mas evidence of a guarantee, but none of these reaches
the standard of palpable and overriding error that is required to justify appellate
interference. I would therefore not accede to the arguments made by the
defendants on their main appeal.

Fresh Evidence

[14]

The appeal is complicated, however, by an application for the admission
of fresh evidence made on behalf of the defendants. The evidence consists of
two affidavits, one of Mr. Kara and one of Mr. Thurston.

[15]

Mr. Kara appeared as a witness for the plaintiff on the first day
of trial in connection with an application to adjourn; he was later called by
the defendants in the trial proper. His testimony on the first day was limited
to whether he had given Mr. Thurston a letter received from a school
district, and need not concern us.

[16]

When he was called by the defendants in the trial proper, Mr. Kara
told the Court he had first met Mr. Thurston in early 2010 when Mr. Kara
had seen an ad for the sale of a route of vending machines that sold health
foods. When he learned that the price was in the hundreds of thousands of
dollars, he told Mr. Thurston he could not afford it, and wished him luck
in finding someone else.

[17]

Mr. Kara testified that in March 2011, he received a call from Mr. Thurston
inquiring whether he was still interested. Mr. Thurston needed someone
right away because the previous operator (Mr. Ma) of the franchise had stepped
out or walked away from his contracts. Mr. Thurston said he would split
the profit 50/50 to the end of the school year, i.e., from March to the end of
June 2011, and Mr. Kara agreed to give it a try. He said he was required
to pay the commissions to the schools going forward, but had discovered that school
commissions had not been paid from the previous September. He paid them himself
for the period from September to March 2011, and said he ended up paying about
$6,700.

[18]

Once he had worked to the end of June, Mr. Kara wanted to continue
with the business. He worked out an arrangement with Mr. Thurston under
which Mr. Kara paid Mr. Thurston a flat amount every month of $2,000,
paid all the expenses and kept the remaining profits. He was generally
successful and was able to get back a couple of schools that had ceased dealing
with Nutriview. Mr. Kara was taken through various spreadsheets he had
sent to Mr. Thurston monthly, showing revenues and sales from the vending
machines. They showed average monthly revenues of about $15,000.

[19]

Mr. Kara was not cross-examined at trial by opposing counsel.

[20]

Mr. Karas fresh evidence (if such it be) consists of an
affidavit sworn on December 1, 2015. I set out below the paragraphs that
are relevant to the defendants application:

3.      When I
commenced work on the route, I learned that Harry Ma had not paid commissions
to the schools that the schools believed were owed to them. I made some
payments to the schools on account of the debt that I believed was owed to the
schools by Mr. Ma.

.         .         .

5.      Sometime
later, I believe still in 2012, I received a phone call from Mr. Ma while
I was shopping at Walmart. Mr. Ma asked me how it was going with Nutriview
and I gave Mr. Ma some information about current income levels for the
route. I asked Mr. Ma about the commissions that were outstanding to the
schools and he told me he was sorting through the issue with Mr. Thurston.

6.      I did
not speak to Harry Ma again until the spring of 2013. I received a call from Mr. Ma
in around March 2013, approximately 4 weeks before the date set for trial in
Ma
v. Nutriview Systems
. I was at Centennial High School when I received the
call and I believe it was either right before or right after spring break. I
was near the vending machines when Mr. Ma called. I recall that it was
somewhat noisy where I was so I walked away to a quieter place so that I would
be able to hear Mr. Ma clearly on the phone.

7.      During
that call Mr. Ma said that he would be sending me a subpoena to give
evidence at the trial and asked for my address for the subpoena.

8.      Mr. Ma
then asked me how much I was out from the time I took on the route.
I told
him I believed I was out $25,000 - $35,000. Mr. Ma then said words to the
effect that he would make me whole if I gave testimony in the trial that was
favourable to him
.

9.      Mr. Ma
told me that the favourable testimony he needed related to three topics. First,
I had to give information about the business income each month. Mr. Ma
asked me what the income was and when I gave him the number, which was over
$15,000/month, he said that for my testimony to be
favourable I would need
to say that the income was lower than it actually was.

10.    Second,
Mr. Ma said that he needed me to give evidence about the split between Mr. Thurston
and me. The true state of affairs was that for the three months the split was
50/50 and thereafter Mr. Thurston allowed me to pay less than 50% to him.
Mr. Ma
wanted me to say that the split was 50/50.

11.    Third, Mr. Ma
wanted me to give evidence about whether Mr. Thurston had received a copy
of a letter from Summit Middle School that was sent to me. I told Mr. Ma
that I believed I had given the letter to Mr. Thurston. Mr. Ma said
that it was important that the letter was sent to Mr. Thurston.

12.    Mr. Ma
told me that if I gave the favourable evidence he had requested that
he
expected he would win the trial and he would then pay $30,000 to me.

13.    At this
point in the conversation, Mr. Ma said words to the effect Mr. Ganapathi,
is that alright? I knew at that time that Mr. Mas lawyer was named Mr. Ganapathi
and assumed based on this comment that Mr. Ma was with Mr. Ganapathi
during the call. I had the impression that he may have been calling from Mr. Ganapathis
office. After Mr. Ma asked if it was alright, I heard a person who I
assumed was Mr. Ganapathi respond that it was fine.

14.    I told Mr. Ma
that I could not go into court lying. Mr. Ma responded with words to the
effect that the evidence had to look like it was going his way.
I told Mr. Ma
that I accepted his offer and that I would provide the testimony he requested.
From my perspective, the evidence I would provide would be truthful in any
event.

15.    After
the call with Mr. Ma, I prepared a spreadsheet showing the revenue on the
route during the period I had been working on it that I sent to Bob Cooper, Mr. Thurstons
then lawyer. During the trial, I gave evidence about the revenue for the route.
The spreadsheet that I had prepared for Mr. Cooper was introduced into
evidence. The spreadsheets showed the correct revenue numbers. The numbers were
lower in some months than they could have been because of the delay in getting
the vending machines operational after Mr. Mas sudden departure; because
a number of schools ended their contracts after Mr. Mas sudden departure;
and because I was dealing with my own medical issues.

16.    In
respect of the split with Mr. Thurston, I gave evidence that the split was
50/50 and that later I was paying Mr. Thurston $2,000 per month.
This
evidence is true
.

17.    Finally,
I was also asked about the letter from Summit Middle School. My evidence was
that I believed I had given a copy of the letter to Mr. Thurston
consistent with my belief today.

18.    After
the judgment was released in 2014, I received another call from Mr. Ma. He
told me that he had won the trial and that he would be giving me the money as
we had agreed. He told me he would put the money in an envelope and put it
through the mail slot on my front door.

19.    A few
days later,
I received a plain white envelope containing ten thousand
dollars ($10,000) in hundred dollar bills through my mail slot
. The
envelope contained no note or identifying information. I assumed it was from Mr. Ma
based on our conversation.

20.    When I
received the money I was surprised by the amount as Mr. Ma had promised to
make me whole by paying thirty thousand dollars. I tried at one point to call Mr. Ma
to ask him why the amount was lower but I got his voicemail and did not want to
leave a message about this. I did not try to contact him again and have had no
further contact with Mr. Ma since I received the money through my mailbox
slot.

21.    I did
not tell Mr. Thurston until recently that I had received money from Mr. Ma
that he linked to the testimony I was to give a trial.

22.    I have received independent
legal advice in connection with this affidavit. For the past few weeks, I have
been dealing with medical issues that have delayed the commissioning of this
affidavit. [Emphasis added.]

No documentary evidence  e.g., a bank deposit receipt  was
appended that might corroborate Mr. Karas receipt of $10,000 in cash.

[21]

For his part, Mr. Thurston in his affidavit sworn December 8,
2015, stated that at the time of trial he was not aware of the allegations set
out above, but that he was told of them by Mr. Kara in late spring or
early summer 2015. Mr. Thurston further deposed:

7.     Mr. Kara told me that
the reason he had not told me about Mr. Mas offer of money for favourable
testimony during the trial, but was telling me now, was that he had seen the
negative effect the trial judgment had had on me and was feeling bad about his
evidence and wanted to make things right.

[22]

In response, Mr. Ma filed a very brief affidavit in which he stated
at paragraph 2:

I have read the Affidavit of
Ashik Kara sworn on December 1, 2015.
I deny the accuracy of the statements
made by Mr. Kara
and contained in paragraphs 8, 9, 10, 12, 13, 14 18, 19
and 20 of his Affidavit.

There was no evidence that criminal charges had been
sought or laid against Mr. Ma or Mr. Kara, or that Mr. Kara
sought at any point to collect the rest of his fee from Mr. Ma.

[23]

Mr. Ganapathi did not file an affidavit, despite the fact he was
implicated in Mr. Karas affidavit. He confirmed to us that he did not
wish to retain counsel in this matter.

R. v. Palmer

[24]

Counsel agree that the seminal case on the admissibility of fresh
evidence on an appeal is the decision of the Supreme Court of Canada in
R.
v. Palmer
[1980] 1 S.C.R. 759. Mr. Palmer had been convicted of
conspiring to traffic in heroin, along with three other co-accused and alleged
co-conspirators. An important witness against him had been a Mr. Ford, who
was an admitted heroin trafficker and disreputable character with a criminal
record. The Court recounted:

His evidence was accepted by the
trial judge and clearly played a significant part in the result. After the
trial, Ford, in a series of declarations, asserted that his trial evidence was
untrue, that it had been fabricated in its entirety, and that he had been
influenced by threats and inducements, including the promise of payments of
money, by the police. When this material came into the hands of the legal
advisers of the appellants, they applied in the Court of Appeal, to adduce this
new evidence in affidavit form. [At 762.]

The application was dismissed by this court and the
appellants then appealed to the Supreme Court.

[25]

The Crown filed extensive material in response, consisting of affidavit
evidence from Crown counsel and various police officers denying any
impropriety. The police did acknowledge that they had made an arrangement with Mr. Ford
under which he would give evidence against Mr. Palmer and his brother, and
the police would pay maintenance to him of $1,200 per month until the trial
was over, and would thereafter make arrangements for the maintenance and
relocation of Mr. Ford and his family, and their protection. (At 773.)
Just before the trial, Mr. Ford seemed to have changed his mind and
demanded a cash payment of around $50,000 in return for his testimony. After
some negotiations, the Crown said it was prepared to pay only $25,000 which
would have been in lieu of all maintenance, moving and relocation expenses.
Ford accepted the cheque for $25,000 but in the Crowns submission, became
dissatisfied and, no doubt influenced by fear as well, changed his story.

[26]

In a well-known passage, Mr. Justice McIntyre speaking for the Court,
noted the broad discretion given to appellate courts by s. 610(1)(d) of
the
Criminal Code
, and the factors that are to be considered in
exercising that discretion. In his words:

... The overriding consideration must be in
the words of the enactment the interests of justice and
it would not serve
the interests of justice to permit any witness by simply repudiating or
changing his trial evidence to reopen trials at will to the general detriment
of the administration of justice
. Applications of this nature have been
frequent and courts of appeal in various provinces have pronounced upon
themsee for example
Regina v. Stewart; Regina v. Foster; Regina v. McDonald;
Regina v. Demeter.
From these and other cases, many of which are referred
to in the above authorities, the following principles have emerged:

(1) The evidence
should generally not be admitted if, by due diligence, it could have been
adduced at trial provided that this general principle will not be applied as
strictly in a criminal case as in civil cases: see
McMartin v. The Queen.

(2) The evidence
must be relevant in the sense that it bears upon a decisive or potentially
decisive issue in the trial.

(3) The evidence
must be credible in the sense that it is reasonably capable of belief, and

(4) It must be
such that if believed it could reasonably, when taken with the other evidence
adduced at trial, be expected to have affected the result.

The leading case
on the application of s. 610(1) of the
Criminal Code is McMartin v. The
Queen, supra.
Ritchie J., for the Court, made it clear that while the rules
applicable to the introduction of new evidence in the Court of Appeal in civil
cases should not be applied with the same force in criminal matters, it was not
in the best interests of justice that evidence should be so admitted as a
matter of course. Special grounds must be shown to justify the exercise of this
power by the appellate court.  [At 775-6; emphasis added.]

[27]

The Court in
Palmer
reasoned that because the evidence sought to
be admitted had not been available at trial and bore on a decisive issue, the only
questions to be determined were whether the evidence might reasonably have been
believed by the trier of fact, and if so whether it might, taken with the other
evidence adduced, have affected the result. (At 776-7.) The Court ruled that
the court below had been fully justified in finding that the evidence
tendered as to the validity of Fords trial evidence [was] wholly unworthy of
belief. As well, it agreed that the responsive evidence filed by the Crown with
respect to the arrangements with Mr. Ford confirmed the version of the
agreement which Mr. Ford himself had described at trial. (At 778.) This
courts rejection of his new evidence was said to be amply justified and in
the result, the appeal was dismissed.

[28]

Although the
Palmer
criteria have been described using different
words by Canadian courts (see, e.g.,
Cory v. Marsh
[1993] 77 B.C.L.R.
(2d) 248 (C.A.) at para. 28), the four criteria generally continue to be
the starting point both in criminal cases and in civil cases, where they are
said to be applied more strictly than in criminal cases. More recent authorities
have clarified that even if the
Palmer
criteria are not met, a court of
appeal has the discretion to admit fresh evidence if it is in the interests of
justice to do so. As stated in
Golder Associates v. North Coast Wind Energy
Corp.
2010 BCCA 263:

In my view, the
Palmer
criteria
reflect the caution with which the admission of fresh evidence must be
considered, but they are not absolute. The source of the criminal law
admissibility of such evidence is the present s. 683(1)(d) of the
Criminal
Code
, R.S.C. 1985, c. C-46, which provides for the admission of
evidence in the interests of justice. That, I think, must be the overarching
consideration in civil as well as criminal appeals. [At para. 37.]

(See also

Petrelli v. Lindell Beach Holiday Resort
Ltd.
2011 BCCA 367 at para. 50).

The Case at Bar

[29]

Counsel for the defendants argues that each of the criteria is met in
this case  that the evidence was not discoverable by due diligence; that
evidence that a party was prepared to bribe a witness is relevant and admissible
both as an admission by conduct that the respondent did not believe he had a
good case and on the issue of the credibility of the parties where the case
fell to be decided on such credibility (citing
Greenwood v. Fitts
(1961)
29 D.L.R. (2d) 260 (B.C.C.A.), at 268-70). In Ms. Hunters submission, Mr. Karas
evidence is credible or at least reasonably capable of belief and could
reasonably be expected to have altered the trial judges perception of the
relative credibility of Messrs. Ma and Thurston. As well, Ms. Hunter
contends that in light of the serious nature of the evidence and the taint it
casts on Mr. Mas actions as a litigant, it is in the interests of justice
that the evidence be admitted and the allegations of bribery be fully explored
at a new trial.

[30]

Mr. Ganapathi for the plaintiff takes issue with each of these
submissions except for the discoverability criterion. He argues that Mr. Karas
affidavit is clearly false (citing the difference between the $25,000 figure
mentioned at para. 8 of Mr. Karas affidavit, and the $6,700 figure
he testified to at trial); and that the evidence had no bearing on the
contract between Ma and Thurston and is fabricated evidence intended to
mislead this court. He submits that none of the three items which Mr. Kara
says he was asked to testify to by Mr. Ma formed part of the trial judges
critical reasoning; and that the events about which Mr. Kara testified at
trial occurred well after Mr. Ma purported to rescind the agreement. Thus,
Mr. Ganapathi contends, the fresh evidence is not relevant in the sense
that it bears upon a decisive issue in the trial and would not have affected
the result.

[31]

The application of the three latter
Palmer
criteria in this case
is problematic. As far as the due diligence test is concerned, I agree with
counsel that the alleged bribery of a witness was not reasonably discoverable
by the defendants or their counsel. As Ms. Hunter submits, there was
nothing in Mr. Karas evidence that should have alerted the defendants or counsel
at trial to question Mr. Kara concerning his relationship with Mr. Ma.

[32]

As for the relevance of the evidence, it is relevant at least to Mr. Mas
credibility. This, however, could be said of any dishonest conduct on the part
of a witness arising after trial. I doubt that this degree of relevance was
intended to satisfy the second criterion in most instances. It is not possible,
moreover, for us to say the evidence was wholly credible (see
Cory v.
Marsh
), although it
may
be reasonably capable of belief. On this
point, I note that Mr. Mas affidavit denying the accuracy of the
statements made by Mr. Kara is not worded in the direct fashion one might
expect. Mr. Ma did not depose, for example, that Mr. Karas evidence
was totally false or entirely without foundation. Thus a doubt arises as to
whether in Mr. Mas mind, there was
some
basis for Mr. Karas
allegations.

[33]

The final question is whether if believed, Mr. Karas evidence
could reasonably be expected to have affected the result in this trial. This
question overlaps with the issue of relevance, and one is driven to the same
conclusion on both issues  that although Mr. Karas evidence was not
relied upon by the trial judge in his reasoning and the three points referred
to in his affidavit had no apparent bearing on the judges conclusions, the
judge might have viewed Mr. Mas credibility differently had he known
about and accepted the evidence of the alleged bribe. The judge referred to Mr. Ma
as gullible and naïve (para. 1), while he described Mr. Thurston as
cynical and manipulative. (Para. 78.) It is possible the judge would reach a
different conclusion on credibility, and even on the question of the existence
of the buy-back guarantee, had he had evidence of the alleged bribe and seen the
relevant parties cross-examined thereon.

[34]

Judged on the four
Palmer
criteria, this case would not normally
satisfy the stricter approach taken in civil cases to the admissibility of
fresh evidence. At the end of the day, then, the issue in my view comes down to
the interests of justice. It is seldom that this court hears of allegations of
bribery of witnesses or suborning perjury. In this sense the case is exceptional.
With some reluctance, I conclude that the interests of justice would not be
served if we were to turn a blind eye to an allegation of this kind  even
though the alleged bribe took place after the events in question and even
though the parties can ill afford another trial of this matter.

[35]

The case seems to me somewhat analogous to
Greenwood v. Fitts
,
supra
.
There this court ruled that the plaintiffs at trial were entitled to adduce
fresh evidence consisting of testimony that the defendant had said he would
perjure himself and induce others to do so if the plaintiff brought the action.
All three judges gave separate reasons, but those of Tysoe J.A. are perhaps the
most cogent for purposes of this case. He quoted the remarks of Cockburn, C.J.
in
Moriarty et al. v. London, Chatham & Dover R. Co.
(1870) L.R. 5
Q.B. 314 as follows:

The conduct of a party to a cause
may be of the highest importance in determining whether the cause of action in
which he is plaintiff, or the ground of defence, if he is defendant, is honest
and just; just as it is evidence against a prisoner that he has said one thing
at one time and another at another, as shewing that the recourse to falsehood
leads fairly to an inference of guilt. Anything from which such an inference
can be drawn is cogent and important evidence with a view to the issue.
So,
if you can shew that a plaintiff has been suborning false testimony, and has
endeavoured to have recourse to perjury, it is strong evidence that he knew
perfectly well his cause was an unrighteous one. I do not say that it is
conclusive; I fully agree that it should be put to the jury
, with the
intimation that it does not always follow, because a man, not sure he shall be
able to succeed by righteous means, has recourse to means of a different
character, that that which he desires, namely, the gaining of the victory, is
not his due, or that he has not good ground for believing that justice entitles
him to it. It does not necessarily follow that he has not a good cause of
action, any more than a prisoner's making a false statement to increase his
appearance of innocence is necessarily a proof of his guilt; but
it is
always evidence which ought to be submitted to the consideration of the
tribunal which has to judge of the facts; and therefore I think that the
evidence was admissible, inasmuch as it went to shew that the plaintiff thought
he had a bad case
. [At 319 of
Moriarty
; emphasis added.]

Tysoe J.A. went on to state that since it was possible
the evidence would have affected the trial judges opinion of the credibility
of the parties, and the case fell to be decided on such credibility, he could
come to no other conclusion than that there must be a new trial.

[36]

I know of no reason why, 145 years after
Moriarty
was decided,
this court should be content to adopt any less stringent standard of propriety
in ensuring that the interests of justice are served. In my respectful view,
this court is bound to apply the same reasoning in this case.

[37]

I would allow the admission of the fresh evidence in its entirety, allow
the appeal, and order a new trial.

The
Honourable Madam Justice Newbury

Reasons
for Judgment of the Honourable Madam Justice Bennett:

[38]

I have had the opportunity to read the draft
reasons for judgment of Madam Justice Newbury. I agree with her analysis and
result with respect to the main grounds of appeal. I also agree with her
analysis of the law in relation to the test for the admission of fresh evidence
on appeal. We differ on whether Mr. Kara is credible, and whether the
affidavit evidence should be admitted.

[39]

I agree that where there are allegations that a
plaintiff has suborned false testimony, the interests of justice require a new
trial. I am not, however, satisfied that the evidence of Mr. Kara reaches
the degree of credibility to require a new trial.

[40]

I accord with Newbury J.A.s observation that
one would have expected Mr. Ma to swear an affidavit denying the
allegations, rather than deny the accuracy of the paragraphs in question.
Furthermore, in my view, Mr. Ganapathi should have withdrawn as counsel
and filed an affidavit since he was clearly implicated in the allegation by Mr. Kara.

[41]

Having made those observations, I turn to the
context of the allegation of bribery and why I do not think it has the force of
credibility necessary to require a new trial. First, as pointed out by Newbury
J.A., the money owing to Mr. Kara according to his trial testimony was far
less than what he says he was offered by Mr. Ma to make him whole.

[42]

More importantly, Mr. Mas conduct at trial
does not support any suggestion that Mr. Kara was bribed to give
favourable testimony on behalf of Mr. Ma. Mr. Ma did not call Mr. Kara
as a witness, except for the adjournment request as noted by Newbury J.A. Mr. Karas
evidence was not relevant to an issue engaged in the case; this alone would not
be sufficient to exclude the evidence, but it is one factor in assessing the
credibility of the allegation of bribery. When he did testify, Mr. Mas
counsel did not cross-examine Mr. Kara. There is no other evidence
supporting Mr. Karas allegation.

[43]

In my respectful view, the evidence does not
meet the credibility test in
Palmer
, in that it is not reasonably
capable of belief. It does not accord with the known, objective facts. It makes
no sense in the context of the trial evidence and the conduct of Mr. Ma
during the course of the trial.

[44]

Therefore, I would not admit the fresh evidence, and would
dismiss the appeal.

The Honourable Madam Justice Bennett

I agree:

The Honourable Madam Justice
Fenlon