Mar 1, 2016

ABCA SUMMARY: Hill v Hill

Hill v Hill, 2016 ABCA 49 (CanLII)

On appeal, is the issue of when a final decision, arrived at after trial and appeal, can be set aside based on the new evidence exception to res judicata.

Facts: The Plaintiff, Daniel Hill, initiated an action claiming that he was a ¼ shareholder of Farmhill Investments Ltd. More specifically, he alleged that he and his siblings were appointed as equal beneficiaries of a trust, settled by his father, which held these shares. At trial, there was no evidence proving that Daniel Hill was registered or appointed as a shareholder and his action was unsuccessful. The Court of Appeal upheld the decision, and leave to the Supreme Court was denied.

Two years later, Daniel Hill initiated a second action, seeking to set aside the earlier judgment on the basis that new evidence had been discovered, which illustrated that the first decision was clearly wrong.

In response, the appellants brought an application to strike the second Statement of Claim, on the basis that it was frivolous and vexatious, an abuse of process, and was barred by res judicata. The chambers judge dismissed their application, and this appeal stems from that.

Analysis: The issue here, is what the test is for the new evidence exception to res judicata, and whether that test was applied properly by the chambers judge. These questions are to be reviewed on the standard of correctness.

The grounds for permitting relitigation are narrow in scope and direction, and are only to be found when there are the most of compelling circumstances that relitigation is necessary to prevent a substantial miscarriage of justice. To be successful in establishing the new evidence exception to res judicata, the plaintiff must show that the new evidence could not have been discoverable with reasonable diligence prior to trial, and that the new evidence is so material that it would have changed the result of the action had it be adduced at trial.

There is a high threshold in terms of establishing relevance and materiality of new evidence. Generally, the plaintiff must show that they could not have obtained this evidence by reasonable diligence before trial, and that if this evidence had been adduced, it would have been practically conclusive. The new evidence must entirely change the aspect of the case and conclusively impeach the original results. The test demands careful examination of the new evidence, the trial decision, and any appeals. In doing so, the Court must determine whether the evidence is incontrovertible and whether it is unassailable in terms of what it is and what it is adduced to support.

At chambers, the chambers judge noted that the test was for the plaintiff to show with “reasonable probability” that it would prove at trial that the new evidence could not have been obtained with reasonable diligence, and that if adduced, it would be practically conclusive. This was incorrect, however, as the evidence must, if proven, impeach the result of the first action.

The Court noted that the chambers judge made a number of errors in interpreting and applying the second branch of the test, and more specifically, in its requirement that the evidence be “practically conclusive”. At chambers, both parties put forward different interpretations of “practically conclusive” and although the chambers judge noted this, the less stringent interpretation was applied. The chambers judge then went on to apply this standard, noting that the evidence contradicted a number of findings made by the trial judge. Upon review, however, the Court noted that there is only one test for materiality. In essence, the evidence must “entirely change the aspect of the case”. This refers to the trial as a whole, not just a collateral issue considered at trial. The chambers judge, therefore, erred in law by mischaracterizing the test for the new evidence exception.

In reviewing the evidence presented, the Court determined that it did not conclusively impeach the result of the first trial and that it could not be said to change the aspect of the case. It did not impact the verdict reached at trial, and was not only dubious in relevance, but was not incontrovertible. As such, the new evidence failed to meet the materiality requirement of the test and the Statement of Claim was struck.

Conclusion: To be successful in raising the new evidence exception to res judicata, a party must show that the new evidence could not have been obtained with reasonable diligence prior to trial, and that the new evidence would entirely change the verdict of the case at trial.