



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


