



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Lam v. Chiu,









2014 BCCA 32




Date: 20140129

Docket:  CA040615

Between:

Miguel Lam

Respondent

(Plaintiff)

And

May Mee Ling Chiu

Appellant

(Defendant)






Before:



The Honourable Madam Justice Newbury

The Honourable Mr. Justice Frankel

The Honourable Madam Justice Bennett




On appeal from:  An
order of the Supreme Court of British Columbia, dated July 25, 2013 (
Lam
v. Chiu
, 2013 BCSC 34, Vancouver Docket No. S118154).




Counsel for the Appellant:



W.J. McMillan and
  D.M. Field





Counsel for the Respondent:



E.G. Wong





Place and Date of Hearing:



Vancouver, British
  Columbia

October 17, 2013





Place and Date of Judgment:



Vancouver, British
  Columbia

January 29, 2014









Written Reasons by:





The Honourable Mr. Justice Frankel





Concurred in by:





The Honourable Madam Justice Newbury





The Honourable Madam Justice Bennett








Summary:

Appeal by C. from a judgment
based on her failure to repay an undocumented loan for $100,000.00 in cash.  C.
denied the existence of the loan.  The trial judge accepted the evidence of J.
and L. that the loan was made from a large amount of cash J. kept in L.s safe. 
When C. refused to repay the loan, it was repaid by L. who took an assignment from
J.  L. then sued C.

On appeal, C. argued that
the trial judge: (a) erred in admitting notes L. testified he made to keep
track of the money in the safe; (b) failed to consider or misapprehended
evidence; (c) failed to properly assess the credibility of J. and L.; and (d)
failed to provide sufficient reasons.  Held:  Appeal dismissed.

Having failed to object to
the admissibility of the notes at trial, C. was not entitled to do so on
appeal.  The trial judge neither failed to consider nor misapprehended any
evidence.  It was open to the judge to make the credibility findings she did. 
She provided sufficient reasons for those findings.

Reasons for Judgment of the Honourable
Mr. Justice Frankel:

Introduction

[1]

This appeal concerns an undocumented loan between strangers for
$100,000.00 in cash.  It is an example of how at times the truth can be
stranger than fiction.

[2]

May Mee Ling Chiu appeals from a judgment in favour of Miguel Lam, based
on a finding that she borrowed money from Alan Johnson.  When Ms. Chui did
not repay the loan, Mr. Johnson assigned it to Mr. Lam, who then sued
Ms. Chiu.

[3]

The loan was arranged by Mr. Lam at a time when he and Ms. Chiu
were involved in a romantic relationship.  The circumstances of the loan can be
described as unusual, in part because Ms. Chiu was not asked to
acknowledge it in writing and because the funds came from a much larger amount
of cash Mr. Johnson kept in the safe at Mr. Lams pharmacy.  Mr. Johnson
and Ms. Chiu did not know each other.

[4]

The central issue at trial was credibility.  Mr. Lam and Mr. Johnson
gave evidence concerning cash being kept in the safe.  Both testified the loan
was made to Ms. Chiu and later repaid by Mr. Lam (in cash).  Ms. Chiu
testified she did not know Mr. Johnson kept money in Mr. Lams safe
and denied the existence of the loan.  The trial judge, Madam Justice Gray of
the Supreme Court of British Columbia, rejected Ms. Chius evidence. 
Although the evidence of Mr. Lam and Mr. Johnson was not without
difficulties, the judge was satisfied, on a balance of probabilities, that the
loan had been made.

[5]

Ms. Chiu seeks a new trial on the basis that the trial judge erred
in several respects.  She says the judge wrongly relied on a prior consistent
statement of Mr. Lams, being notes he testified he made to keep track of
the money he was holding for Mr. Johnson.  Ms. Chiu also says the
judge failed to consider or misapprehended evidence, failed to properly assess
the credibility of Mr. Lam and Mr. Johnson, and failed to provide
sufficient reasons for her decision.

[6]

For the reasons that follow, I would dismiss this appeal.

Factual
Background

[7]

What follows is a general outline of the case.  Other aspects will be
discussed in relation to the grounds of appeal.

[8]

Mr. Johnson became a customer at Mr. Lams pharmacy in 1998.  Over
the years, a friendship developed between them.

[9]

In 2006, Mr. Johnson asked Mr. Lam if he could store cash in
the pharmacys safe.  Mr. Lam agreed, on the basis that he would not be
responsible if any of the money were stolen.  Mr. Johnson testified that
the cash came from his savings and an automobile accident settlement of
approximately $65,000.00.  The cash had been in a safety deposit box at a bank
before Mr. Johnson took it to the pharmacy.  Mr. Johnson moved the
money in part so his then girlfriend would not find out about the settlement
proceeds and because he was concerned that having a large amount of money would
affect his entitlement to government benefits.

[10]

Mr. Johnson brought cash to the pharmacy, usually in $5,000.00
bundles.  Mr. Lam kept a running total of the money he kept in the safe
for Mr. Johnson on pieces of scrap paper.

[11]

Ms. Chiu (a divorcee) is a little older than Mr. Lam (a
widower).  They met in December 2007, started dating in early 2008, and, in the
spring of 2008, became engaged to be married.  Before meeting Mr. Lam, Ms. Chiu
successfully speculated in real estate.  She owns Ultimate 24K Gold Co. Ltd.
(Ultimate), a retail jewellery store which she opened in 1992.  (As discussed
later in these reasons, there was confusion in the evidence as to when Ms. Chiu
and Mr. Lam met.  This resulted in a successful mid-trial application by Mr. Lam
to amend his pleadings with respect to when the loan was made.)

[12]

Mr. Lam testified Ms. Chiu was present in the pharmacy on at
least one occasion when Mr. Johnson brought in cash and that he explained
to her the arrangement he had with Mr. Johnson.  Ms. Chiu denied
knowing Mr. Johnson kept cash in the safe.

[13]

According to Mr. Lam, in the spring or summer of 2008 Ms. Chiu
asked him if Mr. Johnson would lend her $100,000.00, to be repaid in one
year with 10% interest, as she needed money to restock her store.  She said she
would be attending an annual jewellery show in Hong Kong that September.

[14]

Mr. Lam approached Mr. Johnson, who agreed to loan the money
to Ms. Chiu.  Mr. Johnson testified he did not ask Ms. Chiu to
sign any document evincing the loan as he and Mr. Lam were friends and Mr. Lam
had agreed to repay the money if Ms. Chiu did not.  Mr. Lam said he
took the $100,000.00 from the safe in August 2008, and delivered it to Ms. Chiu
in a paper bag.  Ms. Chiu denied receiving the money.

[15]

Ms. Chiu testified she attended the jewellery show in Hong Kong where
she purchased only some figurines.  She also visited her mother.

[16]

According to Mr. Lam, in early August 2009 he asked Ms. Chiu
about repaying the loan.  Mr. Lam testified Ms. Chiu asked for a
further six months to pay.  Mr. Johnson testified that Mr. Lam told
him Ms. Chiu wanted a further six weeks.

[17]

In late 2009 the relationship between Mr. Lam and Ms. Chiu
began to fall apart; they became upset with each other for various reasons. 
Eventually, their relationship ended.

[18]

Mr. Johnson testified he expressed his concern about the non-repayment
of the loan to Mr. Lam.  They both said that Mr. Lam repaid the loan,
in cash, in December 2009.

[19]

Mr. Johnson assigned the loan to Mr. Lam in early 2010.  They
signed a written assignment in January 2010 which reads (in part):

A.         The Assignor
[Mr. Johnson] agreed, in or about August 2007, to lend $100,000 in cash to
Ms. May Mee Ling Chiu, borrowing either on her own behalf or as an agent
for Ultimate 24K Gold Co. Ltd (Ms. Chiu and Ultimate collectively
being the Borrower); and

B.         The Borrower
and the Assignee [Mr. Lam] were to be jointly liable to repay to the Assignor,
within one year, $100,000 together with an additional $10,000 in interest (the
Contract); and

C.        Following default under the Contract
by the Borrower, the Assignee paid $100,000 to the Assignor in or about
December 2009[.]

[20]

Mr. Lam testified that his efforts to have Ms. Chiu repay the
loan failed.  On August 15, 2010, after Mr. Lam and Ms. Chiu had
been estranged for several months, he went to her store and, using a pen video
camera, secretly recorded their conversation.  The trial judge found what
Ms. Chiu said during this conversation to be equivocal with respect to
the existence of the loan.

[21]

On August 16, 2010, Mr. Lam commenced an action against
Ms. Chiu.

[22]

On March 10, 2011, Mr. Johnson swore an affidavit setting out
the circumstances in which the loan was made and repaid.  It is inconsistent
with the evidence he gave at the trial in a number of respects.  In particular,
Mr. Johnson deposed that the loan was made in 2007.  When confronted with
the inconsistencies he said he was unhappy about having to swear the affidavit
and read it quickly, without paying attention to details.

The
Pleadings with Respect to When the Loan was Made

[23]

Mr. Lams original notice of civil claim filed August 16,
2010, alleged that on or about August 2007 he agreed to loan Ms. Chiu
$100,000.00 (at 10% interest) with repayment to begin in August 2008.  It was
further alleged the loan was to be paid in full by August 2009, and that
although Mr. Lam had demanded repayment, Ms. Chiu had neglected or
refused to pay.

[24]

In her response to civil claim, filed September 3, 2010, Ms. Chiu
generally denied the facts set out in Mr. Lams notice.

[25]

On February 9, 2011, Mr. Lam filed an amended notice of civil
claim in which he alleged that on or about August 2007 he agreed to help Ms. Chiu
obtain a $100,000.00 loan from a friend/customer named Allan, whose last
name he wished to keep confidential.  The notice further alleged that Allan
lent the money to Ms. Chiu who did not repay it; and that Mr. Lam
repaid it, without interest, in the fall of 2009.

[26]

In her amended response, filed on February 25, 2011, Ms. Chiu denied
having borrowed money from either Mr. Lam or Allan.

[27]

On November 7, 2011, Mr. Lam filed a further amended notice of
civil claim, in which he alleged that on or about August 2007 he agreed to
facilitate Ms. Chiu or Ultimate borrowing $100,000.00 from Mr. Johnson. 
It was further alleged that Mr. Lam repaid the loan, without interest, in
the fall of 2009, and that Mr. Johnson assigned to Mr. Lam any and
all causes of action against [Ms. Chiu] and Ultimate.

[28]

Ms. Chiu filed a further amended response on December 2, 2011,
in which she denied having borrowed money from either Mr. Lam or Mr. Johnson.

[29]

The trial commenced on January 23, 2012.  Mr. Lam was the
first witness.  His testimony was based on a chronology in which he and Ms. Chiu
started dating in early 2007.

[30]

After Mr. Lam completed his evidence the trial judge allowed his
counsel to call Ms. Chiu as an adverse witness:
Lam v. Chiu
, 2012
BCSC 441, 30 C.P.C. (7th) 403.  Ms. Chiu initially testified she met Mr. Lam
in early 2007, which was consistent with her evidence on discovery.

[31]

During Ms. Chius testimony documents were produced concerning her
purchase of a condominium in October 2007.  As that purchase took place before
she met Mr. Lam, she realized she had been mistaken in her previous
testimony as to when certain events occurred.  In particular, based on the
condominium purchase, she now testified they started dating in early 2008, not in
early 2007.  This occurred on the ninth day of the trial.

[32]

After Ms. Chiu completed her evidence the trial judge adjourned the
matter for approximately two months for the calling of further witnesses. 
Before that occurred, Mr. Lam applied to amend his pleadings based on his
having met Ms. Chiu in 2006 or 2007.  The trial judge granted that
application:
Lam v. Chiu
, 2012 BCSC 677, 98 C.B.R. (5th) 153.  The
judge ordered Ms. Chiu to produce further documents and to attend further
examinations for discovery.

[33]

Mr. Lam filed an amended notice of civil claim on April 30,
2012, alleging that the loan was made in 2007 or 2008.

[34]

When the trial resumed, both Mr. Lam and Ms. Chiu were
recalled.  Mr. Lam testified that some of the dates he had given in his
previous testimony were incorrect because, at the time he testified, he
mistakenly believed he first met Ms. Chiu in December of 2006 and that
they had started dating early in 2007.  He said he now realized they met in
December 2007 and that the loan was made in August 2008.  He said that the date
of the loan set out in the assignment was wrong because he gave the wrong date
to the lawyer who prepared it.  Ms. Chiu was examined with respect to her
financial circumstances and those of her company, particularly after September
2008.

[35]

Mr. Johnson was called as a witness by Mr. Lam after the
pleadings were amended.

Trial
Judges Reasons

[36]

The primary issue for the trial judge was credibility.  She reviewed the
evidence of Mr. Lam, Mr. Johnson, and Ms. Chiu in some detail. 
In the end, she was satisfied as to the existence of the loan.  She concluded
the portion of her reasons headed Credibility and Factual Conclusions as
follows:

[84]      Overall, I found Mr. Lams evidence on the key
matters to be credible and consistent with the relevant documents. His answers
were careful but responsive and complete.  His answers did not appear to be
tailored, and did not go as far as one would expect a story to go if it were
fabricated.

[85]      [Mr. Johnson]s evidence is not conclusive on
the question of whether Ms. Chiu borrowed the funds, because [Mr. Johnson]
did not deal directly with Ms. Chiu about the making of the alleged loan. 
It would be possible at least theoretically for Mr. Lam to have lied to [Mr. Johnson]
about Ms. Chius request for the loan.  However, it is improbable that Mr. Lam
would have wanted to borrow money from [Mr. Johnson] and fabricated the
explanation that it was for Ms. Chiu.  At the time of the alleged loan, Mr. Lam
and Ms. Chiu were engaged to marry.  The evidence suggests that Mr. Lam
was in a strong financial situation, and there was no reason for Mr. Lam
to wish to borrow funds personally and pretend that they were for Ms. Chiu.
As a result, there would not have been any reason for Mr. Lam to have
concocted a story that Ms. Chiu wanted to borrow money.

[86]      [Mr. Johnson]s evidence supports Mr. Lams
evidence that Mr. Lam was keeping cash for [Mr. Johnson] at the
pharmacy, that Mr. Lam asked for the loan saying that it was for Ms. Chiu,
that there was a delay in repayment, and that Mr. Lam ultimately paid [Mr. Johnson]
$100,000.

[87]      On
balance, I considered [Mr. Johnson]s evidence to be unreliable concerning
details, but generally reliable about the most significant events.  It is
improbable that [Mr. Johnson] would invent the story about storing money
at the pharmacy because it is an unusual story, because there is an explanation
based on his illness, and because the Scrap Ledger Notes provide some support.

[88]      As
stated, Ms. Chius evidence was difficult to assess because she testified
as an adverse party witness and through an interpreter. I found her evidence to
be incomplete and unsatisfactory regarding her own and Ultimates financial
circumstances.

[89]      The most compelling evidence on the overall
question of credibility is the evidence of [Mr. Johnson], which supports Mr. Lams
evidence, and the evidence of the improvement in Ultimates financial
circumstances following the making of the alleged loan. It is improbable that [Mr. Johnson]
and Mr. Lam concocted the story about Mr. Lam storing money for [Mr. Johnson]
because it is an unusual story, and because the Scrap Ledger Notes are more
likely to have been created at the times [Mr. Johnson] deposited money
than later for the purposes of supporting a concocted story. It is improbable
that Mr. Lam would have borrowed money personally from [Mr. Johnson]
because Mr. Lam did not appear to have any need for money at the relevant
time.  It is more probable that Ms. Chiu borrowed the money.  Ultimate had
been losing money, giving Ms. Chiu a reason to borrow cash.  Ms. Chiu
continues to believe that Mr. Lam treated her badly and owes her something
for what he got from her during the relationship, which gives her a motive to
retain the borrowed funds.

[90]      On the balance of
probabilities, I prefer Mr. Lams evidence except on details like dates,
and conclude that in August 2008, Ms. Chiu asked Mr. Lam to arrange
the loan for her and received the $100,000 loan funds in cash.  I also accept
the evidence of Mr. Lam and [Mr. Johnson] that Mr. Lam repaid
the principal amount of $100,000 in late 2009, and that [Mr. Johnson] did
not require any payment of interest.

Grounds
of Appeal

[37]

In her factum, Ms. Chiu raises the following grounds of appeal:

The trial judge erred in law by relying on a prior consistent
statement for the truth of its contents.

The trial judge erred in law by failing to consider relevant
evidence.

The trial judge erred in failing to properly assess the
credibility of Mr. Lam and [Mr. Johnson].

The trial judge misapprehended the evidence on the 2009
Financial Statements.

The trial judge failed to provide
sufficient reasons for judgment.

Analysis

Prior
Inconsistent Statement/Scrap Ledger Notes

[38]

This ground relates to the admissibility of what the trial judge
referred to as Scrap Ledger Notes, being notes Mr. Lam testified he made
to record the movement of money in and out of the safe.

[39]

During examination in-chief, Mr. Lam gave the following answer when
asked how he kept track of Mr. Johnsons money:

I kept track of the money in a
piece of paper.  Whenever he brought the money, I would add it up.  Whenever he
requested some money back, I would subtract it.

[40]

Mr. Lam identified two pieces of paper as being ones on which he
had recorded money received from and returned to Mr. Johnson.  Both were portions
of invoices for purchases for his pharmacy, one dated May 9, 2008, the
other June 11, 2009.  On the back of each, Mr. Lam had written a plus
or minus amount beside which he wrote the current balance.  In some cases the
date of a transaction was also recorded.

[41]

With reference to the notes, Mr. Lam stated:

A          Okay.  It shows here that in December 2007 I
facilitated to the loan of a hundred thousand dollars to May.  And there is
another notation from Allan on the -- in the middle top of the page which shows
that he had $95,000 with me at the pharmacy at the moment.  The total amount
$195,000 is the hundred thousand dollars from the loan plus the 95,000 that was
stored at the pharmacy at that time.  As he kept bringing money, $5,000, I
would just add it up from 195 - to $200,000, and it went on all the way until December
17th when I repaid the hundred thousand dollars loan to him, and I gave him the
$75,000 I was storing in the pharmacy.

Q         Mr. Lam, what is that at the end?

A          At the end
theres a circle with a slash.  It just means that -- that Allan didn't have
any more money stored in the pharmacy, and I have given the hundred thousand
dollars to him.

[42]

At this point, Mr. Lams counsel asked that the notes be marked as
an exhibit.  In response to a question from the trial judge, Ms. Chius
counsel stated he had no objection and asked that the originals, as opposed to
copies, be marked.  This was done.

[43]

Mr. Lam went on to testify, in-chief, that there had been similar
pieces of paper that he had discarded when there was no longer room for a new
entry.  He said that when he ran out of room he would write the then current
balance on the top of a new piece of paper and throw the old one away.

[44]

Ms. Chius counsel used this exhibit in cross-examining Mr. Lam
and Mr. Johnson.  For example, when Mr. Lam was questioned about the
notation (Given to May Chiu) Owe 100,000, at the top of the first piece of
paper, he said it was not made at the time of the loan and that he could not
recall when he made it.  Mr. Johnson was questioned about the notation
Sept 2007 in his handwriting which appears under (Given to May Chiu) Owe
100,000.  He could not recall when or why he made it.

[45]

Ms. Chiu now objects to the notes becoming evidence at trial.  She
submits their admission offends the rule that generally prohibits the
introduction of a prior consistent statement:  see
R. v. Stirling
, 2008
SCC 10 at paras. 5  7, [2008] 1 S.C.R. 272;
R. v. Dinardo
, 2008
SCC 24 at paras. 36, 37, [2008] 1 S.C.R. 788.

[46]

In my view, it is too late for Ms. Chiu to raise this objection. 
It is clear from the trial record that her counsel affirmatively chose not to
object to the notes becoming evidence.  Further, I do not accept Ms. Chius
submission that after the amendment to Mr. Lams pleadings was permitted
it was too late to object.  She suggests, albeit indirectly, that if the
original pleadings had alleged a loan in 2008, then an objection would have been
made when the exhibit was tendered.  However, if the amendment changed her
position with regard to her trial strategy and the admissibility of the notes, then
it was open to her to apply to the trial judge to exclude the notes or declare
a mistrial.  Ms. Chiu did neither.  Rather, after the pleadings were
amended she continued to use the notes in cross-examination and, in closing
submissions, relied on answers given by Mr. Lam and Mr. Johnson
concerning some of the notations in challenging their credibility.

[47]

If a party objects to the admissibility of evidence, then that objection
should be made in a timely manner, namely at the time the evidence is tendered. 
This is particularly so in civil cases.  As Chief Justice Macdonald stated in
Hall
v. Geiger
, [1930] 3 D.L.R. 644 at 644 (B.C.C.A.), The Court assumes that
where no objection is taken to evidence, it is not regarded as of any prejudice
to the defendant, the person who might have taken the objection.  See also:
McBryde
v. Womack
, 2013 BCCA 260 at paras. 52  57, 44 B.C.L.R. (5th) 209;
Bransford
v. Yilmazcan
, 2010 BCCA 271 at para. 24, 320 D.L.R. (4th) 535;
Mallet
v. Alberta (Motor Vehicle Accident Claims Act, Administrator)
, 2002 ABCA
297 at paras. 62  65, 15 Alta. L.R. (4th) 231.  Indeed, this Courts
jurisprudence reflects a reluctance to permit a party to raise an objection to
a jury charge in a civil case for the first time on appeal:
Basra v. Gill
(1995), 99 B.C.L.R. (2d) 9 at para. 15 (C.A.), leave refd [1995] 2
S.C.R. v.

[48]

Another consideration is that had a timely objection been taken, Mr. Lam
might have been able to establish a basis for admitting the notes.  In his
factum, Mr. Lam advances several such arguments to which Ms. Chiu has
filed a reply.  However, because of the position taken by Ms. Chiu at
trial, this Court does not have available the record necessary to deal with all
of those arguments.  The following statement by Mr. Justice Doherty in
R.
v. Bero
(2000), 151 C.C.C. (3d) 545 (Ont. C.A.), is equally apt in civil
cases:

[12]      It would be wrong for
this court to undertake the analysis required to decide whether the evidence
was admissible based on a record in which none of the relevant considerations
were explored because the defence chose not to litigate the admissibility of
the evidence at trial.  Absent any suggestion of ineffective representation at
trial, or some other adequate explanation for the absence of any objection to
admissibility at trial, I would not give effect to an argument that comes down
to the contention that an accused should receive a new trial on the ground that
had he chosen to challenge the admissibility of evidence at trial he might have
been successful.

[49]

I would not accede to this ground of appeal.

Misapprehension
of Financial Statements

[50]

Mr. Lam tendered financial statements for Ms. Chius company,
Ultimate, through her as an adverse witness.  Those statements had been
prepared by an accountant from information provided by Ms. Chiu.

[51]

Ms. Chiu was examined extensively about the changes in the
companys financial position from 2007 through 2009.  The unaudited financial
statements for the year ending December 31, 2009, were of some
significance to the trial judge.  Ms. Chiu contends the judge
misapprehended that evidence and, as a result, improperly drew inferences
adverse to her.

[52]

In discussing the financial statements, the trial judge said this:

[57]      Ultimates unaudited financial statements show inventory
purchases in 2009 of about $159,000, being about $100,000 more than the
inventory purchases recorded for 2008.  They show inventory at the end of 2009
of about $186,000, which is similar to the year end of 2008 which was reported
at $188,000.  The bank loans (including overdraft) at the end of 2009 have been
reduced by about $12,000 from 2008 (leaving a $1,000 balance), and the amount
due to the shareholder at the end of 2009 has been reduced by about $30,000 to
about $275,000.  This represents an improvement of about $42,000, which is more
than the reported operating profit of only about $23,000.
The financial
statements do not explain how Ultimate was able to reduce these other figures
by a total of about $19,000 more than the operating profit.

[58]      The operating profit appears in the financial
statements to be the result primarily of the reduction in expenses in 2009 of
about $53,000 compared to 2008.  The reduction results primarily from two line
items.  The advertising and promotion expenses in 2009 are reported as about
$20,000 less than 2008, and the management wages in 2009 as about $31,000 less.

[59]
The discrepancy between the operating profit of
about $23,000 and the reduction in liabilities of about $42,000 is consistent
with Ultimate having the benefit of cash which is not reported in the financial
statements
, although it could also relate to errors such as misreporting of
inventory.

[Emphasis added.]

[53]

The trial judge referred to the financial statements in assessing Ms. Chius
credibility:

[83]      I considered the following regarding Ms. Chius
evidence:

. . .

b)   Ultimates
financial statements show operating losses in 2007 and 2008.  Ultimates
customers might have been more attracted to new inventory, and so new inventory
might have led to increased sales.  Ultimates financial statements show both a
significant increase in purchases of inventory in 2008 and 2009, and a profit
in 2009 of about $23,000.  The operating profit is insufficient to explain the
reduction in liabilities of about $42,000.
The financial statements do not
fully explain Ultimates financial position, and that is consistent with cash
transactions failing to appear in Ultimates books.
Ultimate bought a
significant amount of inventory on a consignment basis, such that Ultimate paid
for the inventory only if Ultimate sold the inventory.  However, Ultimate did
not need to purchase all inventory in this way.  As a result, it is plausible
that Ultimate needed funds to purchase more inventory and that Ms. Chiu
wanted funds to do so, even if Ultimate paid most of its suppliers over time;

c)   Ms. Chius
personal living expenses significantly exceed the salary she takes from
Ultimate.  Some of Ultimates business transactions are in cash.  As a result,
it is plausible that she is frequently involved in cash transactions, and mixes
up Ultimates cash with her own;

d)   Ultimates
financial statements show an increase in inventory purchases in 2009 compared
to 2008 of about $100,000
.  While the financial documentation did not show Ultimate
receiving those funds, neither was there any explanation of the source of the
additional $100,000 in inventory purchases.
Ms. Chiu testified that
she received periodic sums of cash from her children and ex-husband, but she
called these sums pocket money and suggested that they were relatively
modest;

e)   Ultimates
financial records were confusing and incomplete, and Ms. Chiu did not
appear to understand them.  However, Ultimate is a relatively small business,
and Ms. Chiu relied on someone else to maintain the financial records;

f)
Ms. Chius
evidence about inventory purchases at particular times was inconsistent and
confusing.
However, she has operated Ultimate for about twenty years.  It
is not surprising that it would be difficult for her to remember particular
years and particular purchases;

g)   Around the
time of the alleged loan, Ms. Chiu took advances from a line of credit. 
This would not likely have been necessary if Ms. Chiu had received
$100,000 from [Mr. Johnson] or Mr. Lam, and therefore supports Ms. Chius
denial of the making of the loan.  However, she may have chosen to keep her
cash transactions separate from banking transactions;

h)   There is
no record of a deposit in the range of $100,000 into any account of Ms. Chius
or Ultimates around the time of the alleged loan.  However, it appears that Ms. Chiu
often deals in cash;

. . .

m)  Ms. Chiu
and Ultimate made significant document disclosure, but there were problems with
it, including the production of documents during trial, the creation of
documents during trial, and the production of a portion of a bank statement
regarding her older sisters account.  While this could be an attempt to
suppress evidence, it appeared to be related to Ms. Chius lack of
sophistication about the court process and business documents.

[Emphasis added.]

[54]

Ms. Chiu submits that the trial judge misread the 2009 financial
statements, particularly in respect to the apparent improvement in Ultimates
financial position in 2009.  She says that as she did not prepare those statements
or the documents on which they were based, she could not give reliable evidence
as to their contents.  She also notes that no other witness gave evidence with
respect to the statements.

[55]

Ms. Chiu contends that in finding there had been an unexplained
improvement in Ultimates financial position in 2009, the trial judge failed to
have regard to such things as the reductions in the expenses from 2008 to 2009 for
advertising and promotion, and management wages.  She says that it is not clear
whether the statements were prepared on a cash or accrual basis.  In effect,
she argues that nothing in the financial statements supports an inference there
was an injection of cash into her business in 2009.

[56]

I am unable to accept Ms. Chius submission.  To begin, it is clear
from para. 58 of the trial judges reasons that she was aware of the
decrease in the expenses for advertising and promotion, and management wages.

[57]

The trial judge was also aware that the financial statements were
unaudited and did not fully explain Ultimates financial position. 
Nevertheless, she was entitled to draw reasonable inferences from the evidence
before her.  On its face, the 2009 statements evinced an improvement in
Ultimates financial picture for which Ms. Chiu could not fully account.  As
well, Ms. Chiu did not call evidence to address issues arising from the
financial statements.

[58]

In my view, the trial judge did not misapprehend the financial
statements and made no palpable and overriding error in the inferences she
drew.  Accordingly, I would not accede to this ground of appeal.

Failure to
Consider All Relevant Evidence/Assessment of Credibility

[59]

These two grounds are intertwined and can be dealt with together.

[60]

Ms. Chiu submits that the trial judge failed to address a number of
inconsistencies in the evidence of Mr. Lam and Mr. Johnson and did
not meaningfully address their credibility.  Citing this Courts judgment in
Mariano
v. Campbell
, 2010 BCCA 410 at para. 50, 9 B.C.L.R. (5th) 318, Ms. Chiu
says that the judge did not seize the substance of the critical issues.  I disagree.

[61]

The critical factual issue for the trial judge was whether the loan had
been proven on a balance of probabilities.  The narrative of events concerning
the making and repayment of the loan related by Mr. Lam and Mr. Johnson
was, as the judge aptly described it, unusual and improbable.  Ms. Chiu
denied the existence of the loan.  The testimony given by each of them was fraught
with inconsistencies.

[62]

To determine whether there was a loan, the trial judge had to deal with
credibility; what she stated in para. 2 of her reasons as being the
primary issue in this case.  Later, she described the question of what
evidence to accept as being particularly difficult:  para. 77.

[63]

As I have already mentioned, the trial judge reviewed the evidence of
each witness in some detail.  She noted inconsistencies and contradictions,
some of which she found more troubling than others.  In the end she rejected
the evidence of Ms. Chiu and accepted the evidence of Mr. Lam and Mr. Johnson,
not in its entirety, but with respect to the significant events.

[64]

It cannot be denied that trial judges are best placed to determine
issues of credibility; they occupy a singular perch in that regard:
R. v.
C.L.Y.
, 2008 SCC 2 at para. 21, [2008] 1 S.C.R. 5.  As Mr. Justice
Dickson (as he then was) stated in dissent in
Taylor v. Asody
, [1975] 2
S.C.R. 414 at 423, a trial judge has

the great advantage of seeing and
hearing the witnesses, of observing demeanour, noting nuances of expression,
detecting dissimulation.  These are aids to judgment which cannot be reflected
in the written record of a case and are, therefore, aids denied to an appellate
court.

[65]

More recently, in
F.H. v. McDougall
, 2008 SCC 53, [2008] 3 S.C.R.
41, Mr. Justice Rothstein stated:

[70]

The trial judge was not obliged to find that
F.H. was not credible or that his evidence at trial was unreliable because of
inconsistency between his trial evidence and the evidence he gave on prior
occasions.
Where a trial judge demonstrates that she is alive to the
inconsistencies but still concludes that the witness was nonetheless credible,
in the absence of palpable and overriding error, there is no basis for
interference by the appellate court.

[71]      All of this is not to say that the concerns
expressed by Rowles J.A. were unfounded.  There are troubling aspects of F.H.'s
evidence.  However, the trial judge was not oblivious to the inconsistencies in
his evidence. The events occurred more than 30 years before the trial.
Where
the trial judge refers to the inconsistencies and deals expressly with a number
of them, it must be assumed that she took them into account in assessing the balance
of probabilities.
Notwithstanding its own misgivings, it was not for the
Court of Appeal to second guess the trial judge in the absence of finding a
palpable and overriding error.

[72]      With respect, I cannot interpret the reasons of the
majority of the Court of Appeal other than that it disagreed with the trial
judges credibility assessment of F.H. in light of the inconsistencies in his
evidence and the lack of support from the surrounding circumstances.  Assessing
credibility is clearly in the bailiwick of the trial judge and thus heightened
deference must be accorded to the trial judge on matters of credibility.  As
explained by Bastarache and Abella JJ. in
R. v. Gagnon
, [2006] 1 S.C.R.
621, 2006 SCC 17 at para. 20:

Assessing credibility is not a science.  It is very
difficult for a trial judge to articulate with precision the complex
intermingling of impressions that emerge after watching and listening to
witnesses and attempting to reconcile the various versions of events.  That is
why this Court decided, most recently in [
H.L. v. Canada (Attorney General
,
2005 SCC 25, [2005] 1 S.C.R. 401], that in the absence of a palpable and
overriding error by the trial judge, his or her perceptions should be respected.

[Emphasis added.]

[66]

Further, as stated by Chief Justice McLachlin in
R. v. R.E.M.
,
2008 SCC 51 at para. 64, [2008] 3 S.C.R. 3, a trial judge is not obliged
to discuss all of the evidence on any given point, provided the reasons show
that he or she grappled with the substance of the live issues on the trial.

[67]

In my view, the trial judges reasons reflect that she did grapple
with the credibility of each witness.  That she did not discuss every matter
that could possibly be said to relate to the credibility of Mr. Lam or Mr. Johnson
does not mean she misapprehended or ignored aspects of the evidence.

[68]

Ms. Chiu also submits that the trial judge erred in her credibility
findings by failing to appreciate the inherent improbabilities in Mr. Lams
story, and by improperly [relying] on the unusualness of [Mr. Lams]
story as evidence of his and [Mr. Johnsons] credibility.  Once again, I disagree.

[69]

The trial judge considered the circumstances as related by Mr. Lam
and Mr. Johnson to be unusual.  Immediately before discussing their
evidence and that of Ms. Chiu she said this:

[78]      The fact of Mr. Lam
keeping cash for [Mr. Johnson] at the pharmacy is unusual, as is a cash
loan of $100,000 and the absence of any documentation of the loan at the time
it was allegedly made.  The evidence of Mr. Lam, Ms. Chiu, and [Mr. Johnson]
was that they all often engage in cash transactions, which is unusual and makes
it more difficult to determine what conduct is most probable in this case.

[70]

Ms. Chius position was (and remains) that Mr. Lam and Mr. Johnson
concocted their evidence of an undocumented cash loan so that they could, by
means of a lawsuit, cheat her out of $100,000.00.  In my view, it was open to
the trial judge to consider,
as but one factor in her analysis
, the
improbability that two persons intent on cheating another would set about to do
so in such an unusual way:  see paras. 84  90 of the trial judges
reasons set out in para. 36 above.

[71]

I would not accede to these grounds of appeal.

Failure to
Provide Sufficient Reasons

[72]

Ms. Chiu submits that the trial judges reasons were not
responsive to the issues and the parties key arguments.  In her factum she
says that:

It is not possible for this court
to discern how the trial judge arrived at her assessment of the facts nor is it
evident the trial judge recognized and dealt with the most significant
contradictions in, and confusing elements of, the evidence.

[73]

This ground can be dealt with summarily.  It is but a variation of the grounds
challenging the trial judges credibility findings which I have already
rejected.

[74]

In
Shannon v. Shannon
, 2011 BCCA 397, 22 B.C.L.R. (5th) 296,
Madam Justice Smith reviewed the authorities dealing with a trial judges
obligation to provide reasons that explain the result, tell the losing party
why he or she lost, provide a basis for appeal, and satisfy the public that
justice has been done.  In the course of that discussion, Smith J.A. stated:

[5]        The function of reasons for judgment is to explain
what
the trial judge has decided and
why
he or she reached that
decision:
R. v. Morrissey
(1995), 22 O.R. (3d) 514 (C.A.) at p. 525;
and
[
R. v. R.E.M.
2008 SCC 51 [2008] 3 S.C.R. 3] at para. 17.
 Reasons for judgment should demonstrate a logical connection between the
what  the verdict [the decision]  and the why  the basis for the verdict
[the decision], when they are read as a whole in the context of the evidence
and the live issues at trial, and the submissions of counsel:
R.E.M.
at
paras. 16 and 17.  Reasons for judgment do not require a judge to show
how
his or her decision was reached by expound[ing] on evidence which is
uncontroversial, or detail[ing] his or her finding on each piece of evidence or
controverted fact, so long as the findings linking the evidence to the verdict
can be logically discerned (
R.E.M.
at para. 20).

[Emphasis in original.]

[75]

In the present case, the reasons given by the trial judge explained both
what she found and why she found it.  Accordingly, this ground also fails.

Disposition

[76]

I would dismiss this appeal.

The
Honourable Mr. Justice Frankel

I AGREE:

The Honourable Madam Justice
Newbury

I AGREE:

The Honourable Madam Justice
Bennett


