Housen v. Nikolaisen

Housen v. Nikolaisen
Collection
Supreme Court Judgments
Date
2002-03-28
Neutral citation
2002 SCC 33
Report
[2002] 2 SCR 235
Case number
27826
Judges
McLachlin, Beverley; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; Iacobucci, Frank; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil; Arbour, Louise; LeBel, Louis
On appeal from
Saskatchewan
Subjects
Appeal
Municipal law
Torts
Notes
SCC Case Information: 27826
Decision Content
Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33
Paul Housen Appellant
v.
Rural Municipality of Shellbrook No. 493 Respondent
Indexed as: Housen v. Nikolaisen
Neutral citation: 2002 SCC 33.
File No.: 27826.
2001: October 2; 2002: March 28.
Present: McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel JJ.
on appeal from the court of appeal for saskatchewan
Torts -- Motor vehicles -- Highways -- Negligence -- Liability of rural municipality for failing to post warning signs on local access road -- Passenger sustaining injuries in motor vehicle accident on rural road -- Trial judge apportioning part of liability to rural municipality -- Whether Court of Appeal properly overturning trial judge’s finding of negligence -- The Rural Municipality Act, 1989, S.S. 1989‑90, c. R‑26.1, s. 192.
Municipal law -- Negligence -- Liability of rural municipality for failing to post warning signs on local access road -- Passenger sustaining injuries in motor vehicle accident on rural road -- Trial judge apportioning part of liability to rural municipality -- Whether Court of Appeal properly overturning trial judge’s finding of negligence -- The Rural Municipality Act, 1989, S.S. 1989‑90, c. R‑26.1, s. 192.
Appeals -- Courts -- Standard of appellate review -- Whether Court of Appeal properly overturning trial judge’s finding of negligence -- Standard of review for questions of mixed fact and law.
The appellant was a passenger in a vehicle operated by N on a rural road in the respondent municipality. N failed to negotiate a sharp curve on the road and lost control of his vehicle. The appellant was rendered a quadriplegic as a result of the injuries he sustained in the accident. Damages were agreed upon prior to trial in the amount of $2.5 million, but at issue were the respective liabilities, if any, of the municipality, N and the appellant. On the day before the accident, N had attended a party at the T residence not far from the scene of the accident. He continued drinking through the night at another party where he met up with the appellant. The two men drove back to the T residence in the morning where N continued drinking until a couple of hours before he and the appellant drove off in N’s truck. N was unfamiliar with the road, but had travelled on it three times in the 24 hours preceding the accident, on his way to and from the T residence. Visibility approaching the area of the accident was limited due to the radius of the curve and the uncleared brush growing up to the edge of the road. A light rain was falling as N turned onto the road from the T property. The truck fishtailed a few times before approaching the sharp curve where the accident occurred. Expert testimony revealed that N was travelling at a speed of between 53 and 65 km/hr when the vehicle entered the curved portion of the road, slightly above the speed at which the curve could be safely negotiated under the conditions prevalent at the time of the accident.
The road was maintained by the municipality and was categorized as a non‑designated local access road. On such non‑designated roads, the municipality makes the decision to post signs if it becomes aware of a hazard, or if there are several accidents at one spot. The municipality had not posted signs on any portion of the road. Between 1978 and 1987, three other accidents were reported in the area to the east of the site of the appellant’s accident. The trial judge held that the appellant was 15 percent contributorily negligent in failing to take reasonable precautions for his own safety in accepting a ride from N, and apportioned the remaining joint and several liability 50 percent to N and 35 percent to the municipality. The Court of Appeal overturned the trial judge’s finding that the municipality was negligent.
Held (Gonthier, Bastarache, Binnie and LeBel JJ. dissenting): The appeal should be allowed and the judgment of the trial judge restored.
Per McLachlin C.J. and L’Heureux‑Dubé, Iacobucci, Major and Arbour JJ.: Since an appeal is not a re‑trial of a case, consideration must be given to the standard of review applicable to questions that arise on appeal. The standard of review on pure questions of law is one of correctness, and an appellate court is thus free to replace the opinion of the trial judge with its own. Appellate courts require a broad scope of review with respect to matters of law because their primary role is to delineate and refine legal rules and ensure their universal application.
The standard of review for findings of fact is such that they cannot be reversed unless the trial judge has made a “palpable and overriding error”. A palpable error is one that is plainly seen. The reasons for deferring to a trial judge’s findings of fact can be grouped into three basic principles. First, given the scarcity of judicial resources, setting limits on the scope of judicial review in turn limits the number, length and cost of appeals. Secondly, the principle of deference promotes the autonomy and integrity of the trial proceedings. Finally, this principle recognizes the expertise of trial judges and their advantageous position to make factual findings, owing to their extensive exposure to the evidence and the benefit of hearing the testimony viva voce. The same degree of deference must be paid to inferences of fact, since many of the reasons for showing deference to the factual findings of the trial judge apply equally to all factual conclusions. The standard of review for inferences of fact is not to verify that the inference can reasonably be supported by the findings of fact of the trial judge, but whether the trial judge made a palpable and overriding error in coming to a factual conclusion based on accepted facts, a stricter standard. Making a factual conclusion of any kind is inextricably linked with assigning weight to evidence, and thus attracts a deferential standard of review. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference‑drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion.
Questions of mixed fact and law involve the application of a legal standard to a set of facts. Where the question of mixed fact and law at issue is a finding of negligence, it should be deferred to by appellate courts, in the absence of a legal or palpable and overriding error. Requiring a standard of “palpable and overriding error” for findings of negligence made by either a trial judge or a jury reinforces the proper relationship between the appellate and trial court levels and accords with the established standard of review applicable to a finding of negligence by a jury. Where the issue on appeal involves the trial judge’s interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error. A determination of whether or not the standard of care was met by the defendant involves the application of a legal standard to a set of facts, a question of mixed fact and law, and is thus subject to a standard of palpable and overriding error, unless it is clear that the trial judge made some extricable error in principle with respect to the characterization of the standard or its application, in which case the error may amount to an error of law, subject to a standard of correctness.
Here, the municipality’s standard of care was to maintain the road in such a reasonable state of repair that those requiring to use it could, exercising ordinary care, travel upon it with safety. The trial judge applied the correct test in determining that the municipality did not meet this standard of care, and her decision should not be overturned absent palpable and overriding error. The trial judge kept the conduct of the ordinary motorist in mind because she stated the correct test at the outset, and discussed implicitly and explicitly the conduct of a reasonable motorist approaching the curve. Further, her apportionment of negligence indicates that she assessed N’s conduct against the standard of the ordinary driver as does her use of the term “hidden hazard” and her consideration of the speed at which motorists should have approached the curve.
The Court of Appeal’s finding of a palpable and overriding error by the trial judge was based on the erroneous presumption that she accepted 80km/h as the speed at which an ordinary motorist would approach the curve, when in fact she found that a motorist exercising ordinary care could approach the curve at greater than the speed at which it would be safe to negotiate it. This finding was based on the trial judge’s reasonable and practical assessment of the evidence as a whole, and is far from reaching the level of palpable and overriding error.
The trial judge did not err in finding that the municipality knew or ought to have known of the disrepair of the road. Because the hazard in this case was a permanent feature of the road, it was open to the trial judge to draw the inference that a prudent municipal councillor ought to be aware of it. Once this inference has been drawn, then unless the municipality can rebut the inference by showing that it took reasonable steps to prevent such a hazard from continuing, the inference will be left undisturbed. Prior accidents on the road do not provide a direct basis for finding that the municipality had knowledge of the particular hazard, but this factor, together with knowledge of the type of drivers using this road, should have caused the municipality to investigate the road which would have resulted in actual knowledge. To require the plaintiff to provide concrete proof of the municipality’s knowledge of the state of disrepair of its roads is to set an impossibly high burden on the plaintiff. Such information was within the particular sphere of knowledge of the municipality, and it was reasonable for the trial judge to draw an inference of knowledge from her finding that there was an ongoing state of disrepair.
The trial judge’s conclusion on the cause of the accident was a finding of fact subject to the palpable and overriding error standard of review. The abstract nature of the inquiry as to whether N would have seen a sign had one been posted before the curve supports deference to the factual findings of the trial judge. The trial judge’s factual findings on causation were reasonable and thus should not have been interfered with by the Court of Appeal.
Per Gonthier, Bastarache, Binnie and LeBel JJ. (dissenting): A trial judge’s findings of fact will not be overturned absent palpable and overriding error principally in recognition that only the trial judge observes witnesses and hears testimony first hand and is therefore better able to choose between competing versions of events. The process of fact‑finding involves not only the determination of the factual nexus of the case but also requires the judge to draw inferences from facts. Although the standard of review is identical for both findings of fact and inferences of fact, an analytical distinction must be drawn between the two. Inferences can be rejected for reasons other than that the inference‑drawing process is deficient. An inference can be clearly wrong where the factual basis upon which it relies is deficient or where the legal standard to which the facts are applied is misconstrued. The question of whether the conduct of the defendant has met the appropriate standard of care in the law of negligence is a question of mixed fact and law. Once the facts have been established, the determination of whether or not the standard of care was met will in most cases be reviewable on a standard of correctness since the trial judge must appreciate the facts within the context of the appropriate standard of care, a question of law within the purview of both the trial and appellate courts.
A question of mixed fact and law in this case was whether the municipality knew or should have known of the alleged danger. The trial judge must approach this question having regard to the duties of the ordinary, reasonable and prudent municipal councillor. Even if the trial judge correctly identifies this as the applicable legal standard, he or she may still err in assessing the facts through the lens of that legal standard, a process which invokes a policy‑making component. For example, the trial judge must consider whether the fact that accidents had previously occurred on different portions of the road would alert the ordinary, reasonable and prudent municipal councillor to the existence of a hazard. The trial judge must also consider whether the councillor would have been alerted to the previous accident by an accident‑reporting system, a normative issue reviewable on a standard of correctness. Not all matters of mixed fact and law are reviewable according to the standard of correctness, but neither should they be accorded deference in every case.
Section 192 of the Rural Municipality Act, 1989, requires the trial judge to examine whether the portion of the road on which the accident occurred posed a hazard to the reasonable driver exercising ordinary care. Here, the trial judge failed to ask whether a reasonable driver exercising ordinary care would have been able to safely drive the portion of the road on which the accident occurred. This amounted to an error of law. The duty of the municipality is to keep the road in such a reasonable state of repair that those required to use it may, exercising ordinary care, travel upon it with safety. The duty is a limited one as the municipality is not an insurer of travellers using its streets. Although the trial judge found that the portion of the road where the accident occurred presented drivers with a hidden hazard, there is nothing to indicate that she considered whether or not that portion of the road would pose a risk to the reasonable driver exercising ordinary care. Where an error of law has been found, the appellate court has jurisdiction to take the factual findings of the trial judge as they are and to reassess these findings in the context of the appropriate legal test. Here, the portion of the road on which the accident occurred did not pose a risk to a reasonable driver exercising ordinary care because the condition of the road in general signalled to the reasonable driver that caution was needed.
The trial judge made both errors of law and palpable and overriding errors of fact in determining that the municipality should have known of the alleged state of disrepair. She made no finding that the municipality had actual knowledge of the alleged state of disrepair, but rather imputed knowledge to it on the basis that it should have known of the danger. As a matter of law, the trial judge must approach the question of whether knowledge should be imputed to the municipality with regard to the duties of the ordinary, reasonable and prudent municipal councillor. The question is then answered through the trial judge’s assessment of the facts of the case. The trial judge erred in law by approaching the question of knowledge from the perspective of an expert rather than from that of a prudent municipal councillor and by failing to appreciate that the onus of proving that the municipality knew or should have known of the disrepair remained on the plaintiff throughout. She made palpable and overriding errors in fact by drawing the unreasonable inference that the municipality should have known that the portion of the road on which the accident occurred was dangerous from evidence that accidents had occurred on other parts of the road. As the municipality had not received any complaints from motorists respecting the absence of signs on the road, the lack of super‑elevation on the curves, or the presence of vegetation along the sides of the road, it had no particular reason to inspect that segment of the road for the presence of hazards. The question of the municipality’s knowledge is inextricably linked to the standard of care. A municipality can only be expected to have knowledge of those hazards which pose a risk to the reasonable driver exercising ordinary care, since these are the only hazards for which there is a duty to repair. Here, the municipality cannot have been expected to have knowledge of the hazard that existed at the site of the accident, since the hazard did not pose a risk to the reasonable driver. Implicit in the trial judge’s reasons was the expectation that the municipality should have known about the accidents through an accident reporting system, a palpable error, absent any evidence of what might have been a reasonable system.
With respect to her conclusions on causation, which are conclusions on matters of fact, the trial judge ignored evidence that N had swerved on the first curve he negotiated prior to the accident, and that he had driven on the road three times in the 18 to 20 hours preceding the accident. She further ignored the significance of the testimony of the forensic alcohol specialist which pointed overwhelmingly to alcohol as the causal factor which led to the accident, and erroneously relied on one statement by him to support her conclusion that a driver at N’s level of impairment would have reacted to a warning sign. The finding that the outcome would have been different had N been forewarned of the curve ignores the fact that he already knew the curve was there. The fact that the trial judge referred to some evidence to support her findings on causation does not insulate them from review by this Court. An appellate court is entitled to assess whether or not it was clearly wrong for the trial judge to rely on some evidence when other evidence points overwhelmingly to the opposite conclusion.
Whatever the approach to the issue of the duty of care, it is only reasonable to expect a municipality to foresee accidents which occur as a result of the conditions of the road, and not, as in this case, as a result of the condition of the driver. To expand the repair obligation of municipalities to require them to take into account the actions of unreasonable or careless drivers when discharging this duty would signify a drastic and unworkable change to the current standard.
Cases Cited
By Iacobucci and Major JJ.
Applied: Schwartz v. Canada, [1996] 1 S.C.R. 254; Toneguzzo‑Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114; Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, 2001 SCC 60; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; Stein v. The Ship “Kathy K”, [1976] 2 S.C.R. 802; Geffen v. Goodman Estate, [1991] 2 S.C.R. 353; Jaegli Enterprises Ltd. v. Taylor, [1981] 2 S.C.R. 2; McCannell v. McLean, [1937] S.C.R. 341; Partridge v. Rural Municipality of Langenburg, [1929] 3 W.W.R. 555; considered: Galaske v. O’Donnell, [1994] 1 S.C.R. 670; referred to: Gottardo Properties (Dome) Inc. v. Toronto (City) (1998), 162 D.L.R. (4th) 574; Underwood v. Ocean City Realty Ltd. (1987), 12 B.C.L.R. (2d) 199; Woods Manufacturing Co. v. The King, [1951] S.C.R. 504; Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298, 2000 SCC 12; Ryan v. Victoria (City), [1999] 1 S.C.R. 201; Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504; Anderson v. Bessemer City, 470 U.S. 564 (1985); Schreiber Brothers Ltd. v. Currie Products Ltd., [1980] 2 S.C.R. 78; Palsky v. Humphrey, [1964] S.C.R. 580; Hodgkinson v. Simms, [1994] 3 S.C.R. 377; Dube v. Labar, [1986] 1 S.C.R. 649; C.N.R. v. Muller, [1934] 1 D.L.R. 768; St‑Jean v. Mercier, [2002] 1 S.C.R. 491, 2002 SCC 15; Rhône (The) v. Peter A.B. Widener (The), [1993] 1 S.C.R. 497; Cork v. Kirby MacLean, Ltd., [1952] 2 All E.R. 402; Matthews v. MacLaren (1969), 4 D.L.R. (3d) 557.
By Bastarache J. (dissenting)
Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; Stein v. The Ship “Kathy K”, [1976] 2 S.C.R. 802; Toneguzzo‑Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114; Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487; Partridge v. Rural Municipality of Langenburg, [1929] 3 W.W.R. 555; Fafard v. City of Quebec (1917), 39 D.L.R. 717; Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, 2001 SCC 60; Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2; Swinamer v. Nova Scotia (Attorney General), [1994] 1 S.C.R. 445; Jaegli Enterprises Ltd. v. Taylor, [1981] 2 S.C.R. 2, rev’g (1980), 112 D.L.R. (3d) 297 (sub nom. Taylor v. The Queen in Right of British Columbia), rev’g (1978), 95 D.L.R. (3d) 82; Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 S.C.R. 420; Ryan v. Victoria (City), [1999] 1 S.C.R. 201; Schwartz v. Canada, [1996] 1 S.C.R. 254; Joseph Brant Memorial Hospital v. Koziol, [1978] 1 S.C.R. 491; Williams v. Town of North Battleford (1911), 4 Sask. L.R. 75; Shupe v. Rural Municipality of Pleasantdale, [1932] 1 W.W.R. 627; Galbiati v. City of Regina, [1972] 2 W.W.R. 40; Just v. British Columbia, [1989] 2 S.C.R. 1228; Geffen v. Goodman Estate, [1991] 2 S.C.R. 353; Moge v. Moge, [1992] 3 S.C.R. 813; R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606; Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485 (1984); St‑Jean v. Mercier, [2002] 1 S.C.R. 491, 2002 SCC 15; Schreiber Products Ltd. v. Currie Brothers Ltd., [1980] 2 S.C.R. 78; Levey v. Rural Municipality of Rodgers, No. 133, [1921] 3 W.W.R. 764; Diebel Estate v. Pinto Creek No. 75 (Rural Municipality) (1996), 149 Sask. R. 68; R. v. Jennings, [1966] S.C.R. 532; County of Parkland No. 31 v. Stetar, [1975] 2 S.C.R. 884; Nelson v. Waverley (Rural Municipality) (1988), 65 Sask. R. 260.
Statutes and Regulations Cited
Criminal Code , R.S.C. 1985, c. C‑46 .
Highway Traffic Act, S.S. 1986, c. H‑3.1, ss. 33(1), 44(1).
Rural Municipality Act, 1989, S.S. 1989‑90, c. R‑26.1, s. 192 [am. 1992, c. 63, s. 47; am. 1993, c. T‑20.1, s. 7].
Authors Cited
American Bar Association. Judicial Administration Division. Standards Relating to Appellate Courts. Chicago: American Bar Association, 1995.
Cambridge International Dictionary of English. Cambridge: Cambridge University Press, 1996, “palpable”.
Gibbens, R. D. “Appellate Review of Findings of Fact” (1991-92), 13 Advocates’ Q. 445.
Goodhart, A. L. “Appeals on Questions of Fact” (1955), 71 L.Q.R. 402.
Kerans, Roger P. Standards of Review Employed by Appellate Courts. Edmonton: Juriliber, 1994.
New Oxford Dictionary of English. Edited by Judy Pearsall. Oxford: Clarendon Press, 1998, “palpable”.
Random House Dictionary of the English Language, 2nd ed. Edited by Stuart Berg Flexner. New York: Random House, 1987, “palpable”.
Wright, Charles Alan. “The Doubtful Omniscience of Appellate Courts” (1957), 41 Minn. L. Rev. 751.
APPEAL from a judgment of the Saskatchewan Court of Appeal, [2000] 4 W.W.R. 173, 189 Sask. R. 51, 9 M.P.L.R. (3d) 126, 50 M.V.R. (3d) 70, [2000] S.J. No. 58 (QL), 2000 SKCA 12, setting aside a decision of the Court of Queen’s Bench, [1998] 5 W.W.R. 523, 161 Sask. R. 241, 44 M.P.L.R. (2d) 203, [1997] S.J. No. 759 (QL). Appeal allowed, Gonthier, Bastarache, Binnie and LeBel JJ. dissenting.
Gary D. Young, Q.C., Denis I. Quon and M. Kim Anderson, for the appellant.
Michael Morris and G. L. Gerrand, Q.C., for the respondent.
The judgment of McLachlin C.J. and L’Heureux-Dubé, Iacobucci, Major and Arbour JJ. was delivered by
Iacobucci and Major JJ. --
I. Introduction
1 A proposition that should be unnecessary to state is that a court of appeal should not interfere with a trial judge’s reasons unless there is a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge’s decision if there was some evidence upon which he or she could have relied to reach that conclusion.
2 Authority for this abounds particularly in appellate courts in Canada and abroad (see Gottardo Properties (Dome) Inc. v. Toronto (City) (1998), 162 D.L.R. (4th) 574 (Ont. C.A.); Schwartz v. Canada, [1996] 1 S.C.R. 254; Toneguzzo-Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114; Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, 2001 SCC 60). In addition scholars, national and international, endorse it (see C. A. Wright in “The Doubtful Omniscience of Appellate Courts” (1957), 41 Minn. L. Rev. 751, at p. 780; and the Honourable R. P. Kerans in Standards of Review Employed by Appellate Courts (1994); and American Bar Association, Judicial Administration Division, Standards Relating to Appellate Courts (1995), at pp. 24-25).
3 The role of the appellate court was aptly defined in Underwood v. Ocean City Realty Ltd. (1987), 12 B.C.L.R. (2d) 199 (C.A.), at p. 204, where it was stated:
The appellate court must not retry a case and must not substitute its views for the views of the trial judge according to what the appellate court thinks the evidence establishes on its view of the balance of probabilities.
4 While the theory has acceptance, consistency in its application is missing. The foundation of the principle is as sound today as 100 years ago. It is premised on the notion that finality is an important aim of litigation. There is no suggestion that appellate court judges are somehow smarter and thus capable of reaching a better result. Their role is not to write better judgments but to review the reasons in light of the arguments of the parties and the relevant evidence, and then to uphold the decision unless a palpable error leading to a wrong result has been made by the trial judge.
5 What is palpable error? The New Oxford Dictionary of English (1998) defines “palpable” as “clear to the mind or plain to see” (p. 1337). The Cambridge International Dictionary of English (1996) describes it as “so obvious that it can easily be seen or known” (p. 1020). The Random House Dictionary of the English Language (2nd ed. 1987) defines it as “readily or plainly seen” (p. 1399).
6 The common element in each of these definitions is that palpable is plainly seen. Applying that to this appeal, in order for the Saskatchewan Court of Appeal to reverse the trial judge the “palpable and overriding” error of fact found by Cameron J.A. must be plainly seen. As we will discuss, we do not think that test has been met.
II. The Role of the Appellate Court in the Case at Bar
7 Given that an appeal is not a retrial of a case, consideration must be given to the applicable standard of review of an appellate court on the various issues which arise on this appeal. We therefore find it helpful to discuss briefly the standards of review relevant to the following types of questions: (1) questions of law; (2) questions of fact; (3) inferences of fact; and (4) questions of mixed fact and law.
A. Standard of Review for Questions of Law
8 On a pure question of law, the basic rule with respect to the review of a trial judge’s findings is that an appellate court is free to replace the opinion of the trial judge with its own. Thus the standard of review on a question of law is that of correctness: Kerans, supra, at p. 90.
9 There are at least two underlying reasons for employing a correctness standard to matters of law. First, the principle of universality requires appellate courts to ensure that the same legal rules are applied in similar situations. The importance of this principle was recognized by this Court in Woods Manufacturing Co. v. The King, [1951] S.C.R. 504, at p. 515:
It is fundamental to the due administration of justice that the authority of decisions be scrupulously respected by all courts upon which they are binding. Without this uniform and consistent adherence the administration of justice becomes disordered, the law becomes uncertain, and the confidence of the public in it undermined. Nothing is more important than that the law as pronounced . . . should be accepted and applied as our tradition requires; and even at the risk of that fallibility to which all judges are liable, we must maintain the complete integrity of relationship between the courts.
A second and related reason for applying a correctness standard to matters of law is the recognized law-making role of appellate courts which is pointed out by Kerans, supra, at p. 5:
The call for universality, and the law-settling role it imposes, makes a considerable demand on a reviewing court. It expects from that authority a measure of expertise about the art of just and practical rule-making, an expertise that is not so critical for the first court. Reviewing courts, in cases where the law requires settlement, make law for future cases as well as the case under review.
Thus, while the primary role of trial courts is to resolve individual disputes based on the facts before them and settled law, the primary role of appellate courts is to delineate and refine legal rules and ensure their universal application. In order to fulfill the above functions, appellate courts require a broad scope of review with respect to matters of law.
B. Standard of Review for Findings of Fact
10 The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding error”: Stein v. The Ship “Kathy K”, [1976] 2 S.C.R. 802, at p. 808; Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298, 2000 SCC 12, at para. 42; Ryan v. Victoria (City), [1999] 1 S.C.R. 201, at para. 57. While this standard is often cited, the principles underlying this high degree of deference rarely receive mention. We find it useful, for the purposes of this appeal, to review briefly the various policy reasons for employing a high level of appellate deference to findings of fact.
11 A fundamental reason for general deference to the trial judge is the presumption of fitness -- a presumption that trial judges are just as competent as appellate judges to ensure that disputes are resolved justly. Kerans, supra, at pp. 10-11, states that:
If we have confidence in these systems for the resolution of disputes, we should assume that those decisions are just. The appeal process is part of the decisional process, then, only because we recognize that, despite all effort, errors occur. An appeal should be the exception rather than the rule, as indeed it is in Canada.
12 With respect to findings of fact in particular, in Gottardo Properties, supra, Laskin J.A. summarized the purposes underlying a deferential stance as follows (at para. 48):
Deference is desirable for several reasons: to limit the number and length of appeals, to promote the autonomy and integrity of the trial or motion court proceedings on which substantial resources have been expended, to preserve the confidence of litigants in those proceedings, to recognize the competence of the trial judge or motion judge and to reduce needless duplication of judicial effort with no corresponding improvement in the quality of justice.
Similar concerns were expressed by La Forest J. in Schwartz, supra, at para. 32:
It has long been settled that appellate courts must treat a trial judge’s findings of fact with great deference. The rule is principally based on the assumption that the trier of fact is in a privileged position to assess the credibility of witnesses’ testimony at trial. . . . Others have also pointed out additional judicial policy concerns to justify the rule. Unlimited intervention by appellate courts would greatly increase the number and the length of appeals generally. Substantial resources are allocated to trial courts to go through the process of assessing facts. The autonomy and integrity of the trial process must be preserved by exercising deference towards the trial courts’ findings of fact; see R. D. Gibbens, “Appellate Review of Findings of Fact” (1992), 13 Adv. Q. 445, at pp. 445-48; Fletcher v. Manitoba Public Insurance Co., [1990] 3 S.C.R. 191, at p. 204.
See also in the context of patent litigation, Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504, at p. 537.
13 In Anderson v. Bessemer City, 470 U.S. 564 (1985), at pp. 574-75, the United States Supreme Court also listed numerous reasons for deferring to the factual findings of the trial judge:
The rationale for deference to the original finder of fact is not limited to the superiority of the trial judge’s position to make determinations of credibility. The trial judge’s major role is the determination of fact, and with experience in fulfilling that role comes expertise. Duplication of the trial judge’s efforts in the court of appeals would very likely contribute only negligibly to the accuracy of fact determination at a huge cost in diversion of judicial resources. In addition, the parties to a case on appeal have already been forced to concentrate their energies and resources on persuading the trial judge that their account of the facts is the correct one; requiring them to persuade three more judges at the appellate level is requiring too much. As the Court has stated in a different context, the trial on the merits should be “the ‘main event’ . . . rather than a ‘tryout on the road.’” . . . For these reasons, review of factual findings under the clearly-erroneous standard -- with its deference to the trier of fact -- is the rule, not the exception.
14 Further comments regarding the advantages possessed by the trial judge have been made by R. D. Gibbens in “Appellate Review of Findings of Fact” (1991-92), 13 Advocates’ Q. 445, at p. 446:
The trial judge is said to have an expertise in assessing and weighing the facts developed at trial. Similarly, the trial judge has also been exposed to the entire case. The trial judge has sat through the entire case and his ultimate judgment reflects this total familiarity with the evidence. The insight gained by the trial judge who has lived with the case for several days, weeks or even months may be far deeper than that of the Court of Appeal whose view of the case is much more limited and narrow, often being shaped and distorted by the various orders or rulings being challenged.
The corollary to this recognized advantage of trial courts and judges is that appellate courts are not in a favourable position to assess and determine factual matters. Appellate court judges are restricted to reviewing written transcripts of testimony. As well, appeals are unsuited to reviewing voluminous amounts of evidence. Finally, appeals are telescopic in nature, focussing narrowly on particular issues as opposed to viewing the case as a whole.
15 In our view, the numerous bases for deferring to the findings of fact of the trial judge which are discussed in the above authorities can be grouped into the following three basic principles.
(1) Limiting the Number, Length and Cost of Appeals
16 Given the scarcity of judicial resources, setting limits on the scope of judicial review is to be encouraged. Deferring to a trial judge’s findings of fact not only serves this end, but does so on a principled basis. Substantial resources are allocated to trial courts for the purpose of assessing facts. To allow for wide-ranging review of the trial judge’s factual findings results in needless duplication of judicial proceedings with little, if any improvement in the result. In addition, lengthy appeals prejudice litigants with fewer resources, and frustrate the goal of providing an efficient and effective remedy for the parties.
(2) Promoting the Autonomy and Integrity of Trial Proceedings
17 The presumption underlying the structure of our court system is that a trial judge is competent to decide the case before him or her, and that a just and fair outcome will result from the trial process. Frequent and unlimited appeals would undermine this presumption and weaken public confidence in the trial process. An appeal is the exception rather than the rule.
(3) Recognizing the Expertise of the Trial Judge and His or Her Advantageous Position
18 The trial judge is better situated to make factual findings owing to his or her extensive exposure to the evidence, the advantage of hearing testimony viva voce, and the judge’s familiarity with the case as a whole. Because the primary role of the trial judge is to weigh and assess voluminous quantities of evidence, the expertise and insight of the trial judge in this area should be respected.
C. Standard of Review for Inferences of Fact
19 We find it necessary to address the appropriate standard of review for factual inferences because the reasons of our colleague suggest that a lower standard of review may be applied to the inferences of fact drawn by a trial judge. With respect, it is our view, that to apply a lower standard of review to inferences of fact would be to depart from established jurisprudence of this Court, and would be contrary to the principles supporting a deferential stance to matters of fact.
20 Our colleague acknowledges that, in Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, this Court determined that a trial judge’s inferences of fact and findings of fact should be accorded a similar degree of deference. The relevant passage from Geffen is the following (per Wilson J., at pp. 388-89):
It is by now well established that findings of fact made at trial based on the credibility of witnesses are not to be reversed on appeal unless it is established that the trial judge made some palpable and overriding error which affected his assessment of the facts . . . . Even where a finding of fact is not contingent upon credibility, this Court has maintained a non-interventionist approach to the review of trial court findings. . . .
And even in those cases where a finding of fact is neither inextricably linked to the credibility of the testifying witness nor based on a misapprehension of the evidence, the rule remains that appellate review should be limited to those instances where a manifest error has been made. Hence, in Schreiber Brothers Ltd. v. Currie Products Ltd., [1980] 2 S.C.R. 78, this Court refused to overturn a trial judge’s finding that certain goods were defective, stating at pp. 84-85 that it is wrong for an appellate court to set aside a trial judgment where the only point at issue is the interpretation of the evidence as a whole (citing Métivier v. Cadorette, [1977] 1 S.C.R. 371).
This view has been reiterated by this Court on numerous occasions: see Palsky v. Humphrey, [1964] S.C.R. 580, at p. 583; Schwartz, supra, at para. 32; Hodgkinson v. Simms, [1994] 3 S.C.R. 377, at p. 426, per La Forest J.; Toneguzzo-Norvell, supra. The United States Supreme Court has taken a similar position: see Anderson, supra, at p. 577.
21 In discussing the standard of review of the trial judge’s inferences of fact, our colleague states, at para. 103, that:
In reviewing the making of an inference, the appeal court will verify whether it can reasonably be supported by the findings of fact that the trial judge reached and whether the judge proceeded on proper legal principles. . . . While the standard of review is identical for both findings of fact and inferences of fact, it is nonetheless important to draw an analytical distinction between the two. If the reviewing court were to review only for errors of fact, then the decision of the trial judge would necessarily be upheld in every case where evidence existed to support his or her factual findings. In my view, this Court is entitled to conclude that inference