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Review - Re-opening - Sagaz Cases. 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.
In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc. (SCC, 2001) the Supreme Court of Canada held that common law re-opening (as opposed to statutory set-aside) of a trial should be left to the trial judge, that the criteria for ordering it is much the same as a fresh evidence test, and that common law re-openings are only available before a formal judgement is taken out:B. Motion to Reopen the Trial
59 After the trial judge’s reasons were released, but before the formal judgment was entered, Landow, who did not testify at trial, gave Design an affidavit admitting to the conspiracy to bribe and implicating Kavana in the conspiracy. Design brought a motion to have the trial reopened to hear the fresh evidence. The trial judge applied the two-part test from Scott, supra, to assist in determining whether to exercise his discretion to reopen the trial. First, he decided that the evidence, if presented at trial, probably would not have changed the result. Second, he found that the evidence could have been obtained before trial by the exercise of reasonable diligence. The Court of Appeal overturned the trial judge’s decision, having found that he erred on both branches of the test and that the trial should have been reopened to hear Landow’s evidence. Was the Court of Appeal in error to reverse the trial judge’s exercise of discretion to refuse to reopen the trial?
60 This Court provided in Hamstra (Guardian ad litem of) v. British Columbia Rugby Union, 1997 CanLII 391 (SCC), [1997] 1 S.C.R. 1092, at para. 26:It has long been established that, absent an error of law, an appellate court should not interfere with the exercise by a trial judge of his or her discretion in the conduct of a trial. Appellate courts should defer to the trial judge who is in the best position to decide whether, at the expense of finality, fairness dictates that the trial be reopened. See Clayton v. British American Securities Ltd., 1934 CanLII 229 (BC CA), [1934] 3 W.W.R. 257 (B.C.C.A.), at p. 295:[The trial judge] would of course discourage unwarranted attempts to bring forward new evidence available at the trial to disturb the basis of a judgment delivered or to permit a litigant after discovering the effect of a judgment to re-establish a broken-down case with the aid of further proof. 61 Further, the case law dictates that the trial judge must exercise his discretion to reopen the trial “sparingly and with the greatest care” so that “fraud and abuse of the Court’s processes” do not result (see Clayton, supra, at p. 295, cited in Scott, at p. 774).
62 In this case, the trial judge decided not to exercise his discretion to reopen the trial because neither of the two steps of the test in Scott, supra, was met to his satisfaction. First, he found that he could not say that the new evidence, if presented at trial, would probably have changed the result, only that it may have changed the result. If the trial were to be reopened, Landow’s evidence might well not be believed. His credibility would be in issue. Second, the trial judge found that Landow’s evidence could have been obtained before trial. Design could have compelled Landow to testify under oath at trial. While this carried some risk, the trial judge viewed it as a trial strategy, a conclusion he was entitled to reach.
63 In my opinion, the Court of Appeal erred in substituting its discretion for that of the trial judge in deciding to reopen the trial. On the first branch of the test set out in Scott, the trial judge found that Landow’s credibility would be in issue whereas the Court of Appeal found it difficult to see how the trial judge could make this determination without hearing Landow testify. In the Court of Appeal’s determination, it was not sufficiently clear that Landow would be disbelieved. I disagree with the Court of Appeal on this point. Landow’s affidavit evidence contradicts his sworn evidence on discovery, particularly with respect to the existence of the bribery scheme which Landow avoids acknowledging on discovery. To this significant extent, Landow is akin to a recanting liar. Lord Denning’s comments in Ladd v. Marshall, [1954] 1 W.L.R. 1489 (C.A.), at p. 1491, are applicable:It is very rare that application is made to this court for a new trial on the ground that a witness has told a lie. The principles to be applied are the same as those always applied when fresh evidence is sought to be introduced. To justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.
We have to apply those principles to the case where a witness comes and says: “I told a lie but nevertheless I now want to ‘tell the truth’”. It seems to me that the fresh evidence of such a witness will not as a rule satisfy the third condition. A confessed liar cannot usually be accepted as being credible. To justify the reception of the fresh evidence, some good reason must be shown why a lie was told in the first instance, and good ground given for thinking the witness will tell the truth on the second occasion. [Emphasis added.] 64 These comments, in my opinion, apply with equal force to the present case. Landow is akin to a “recanting liar” because he failed to tell his “truth” when he had the opportunity to do so on discovery and again when he declined to testify at trial. Although the determination in Ladd was made under the third branch of the test applied in that case, a branch that is absent from the two-part test in Scott, the application of the Scott test to the situation of a “recanting liar” has the same result in this case. Evidence which is not presumptively credible may fail to probably change the result under the first branch of the test in Scott. This is how the trial judge dealt with the affidavit evidence, and in my view he was correct in so doing. Further, it cannot be ignored that the trial decision imposing liability on Landow and AIM provided incentive for Landow to attempt to shift some responsibility to Kavana in order to share the liability of the corresponding damage award. The trial judge had also seen the evidence of Kavana in the first instance, which he found to be credible even in the face of a vigorous cross-examination.
65 The court in Scott mandated that both branches of the test to reopen a trial to admit fresh evidence must be met. Having failed to meet the first branch of the test, it is unnecessary to examine whether the precluded evidence in this case could have been obtained by the exercise of reasonable diligence. It is sufficient to say that that too is a matter largely within the discretion of the trial judge and, absent error by him, that finding should not be interfered with. . Holterman v. Fish
In Holterman v. Fish (Ont CA, 2017) the Sagaz test for setting aside an order, here a consent Order for discontinuance of an action, was applied by the court. The effect of the set-aside was to re-open the trial:[17] In determining whether there were exceptional circumstances to set aside the discontinuance, the motion judge applied the Sagaz test, which guides the application of r. 59.06(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for setting aside or varying an order due to fraud or facts arising or discovered after the order has been made. In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59 (CanLII), [2001] 2 S.C.R. 983, the moving party sought to reopen a trial on the basis of fresh evidence. The Supreme Court ruled against the moving party, and cautioned at para. 61 of its decision that the discretion to reopen a trial should be exercised “sparingly and with the greatest care.”
[18] The test from Sagaz is often reduced to two questions: (1) whether the new evidence, if presented at trial, would probably have changed the result, and (2) whether the evidence could have been obtained before trial by the exercise of reasonable diligence. But more is involved. As this Court stated in Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670 (CanLII), at para. 20, the test “includes considerations of finality, the apparent cogency of the evidence, delay, fairness and prejudice.” Appellate courts must also consider the importance of deferring to trial judges, who are “in the best position to decide whether, at the expense of finality, fairness dictates that the trial be reopened”: Sagaz, at para. 60; Mehedi, at para. 21.
[19] In my view, the factors set out in Sagaz provide an appropriate structure for determining whether to set aside a notice of discontinuance, with the caveat that the interest in finality may pose an even greater obstacle to setting aside a consent discontinuance than reopening a trial. An important aspect of a discontinuance on consent is that the parties, after considering their positions, made a joint decision to end the litigation. Although there may be exceptional circumstances where departure from such a decision will be justified, courts should not allow “significant and considered measures” to terminate litigation to be “lightly undone”: Yancey v. Neis, 1999 ABCA 272 (CanLII), 250 A.R. 19, at para. 25; Philipos v. Canada (Attorney General), 2016 FCA 79 (CanLII), 483 N.R. 328, at paras. 17-20.
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