r v. Assumption Mutual Life, 2003 NBCA 21

COURT OF APPEAL OF NEW BRUNSWICK 25/00/CA GARRY ROY and CHARLES LÉGER (Plaintiffs) APPELLANTS GARRY ROY et CHARLES LÉGER (Demandeurs) APPELANTS - and - - et - ASSUMPTION MUTUAL LIFE INSURANCE CO. (Defendant) RESPONDENT ASSOMPTION COMPAGNIE MUTUELLE D’ASSURANCE-VIE (Défenderesse) INTIMÉE Roy and Léger v. Assumption Mutual Life Insurance Co., 2003 NBCA 21 Roy et Léger c. Assomption compagnie mutuelle d’assurance-vie, 2003 NBCA 21 CORAM: The Hon.

Chief Justice Daigle The Honourable Justice Larlee The Honourable Justice Deschênes CORAM: L’hon. juge en chef Daigle L’honorable juge Larlee L’honorable juge Deschênes Motion for a new trial: May 30, 2002 and September 12, 2002 Motion visant à obtenir un nouveau procès : le 30 mai 2002

Decision on motion rendered: March 27, 2003 Reasons for judgment by: The Honourable Justice Deschênes Concurred in by: The Hon. Chief Justice Daigle The Honourable Justice Larlee et le 12 septembre 2002 Décision rendue : le 27 mars 2003 Motifs de jugement : L’honorable juge Deschênes Souscrivent aux motifs : L’hon. juge en chef Daigle L’honorable juge Larlee Counsel at hearing: For the Appellants: G. Robert Basque, Q.C. For the Respondent: Charles A. LeBlond, Q.C. THE COURT The motion for a new trial is dismised, without costs. Avocats à l’audience : Pour les appelants : G. Robert Basque, c.r.

Pour l’intimée : Charles A. LeBlond, c.r. LA COUR La demande pour un nouveau procès est rejetée, sans dépens. English version of the decision delivered by DESCHÊNES, J.

[ 1 ] On January 6, 2000 , Riordon, J., delivered a decision in this matter following a one-week trial. His decision is reported at (2000) 2000 CanLII 46937 (NB KB) , 222 N.B.R. (2d) 316 (Q.B.) . He described the nature of this action as follows at p. 319-20. The present proceedings were commenced against Assumption Mutual Life Insurance Company (hereinafter referred to as "Assumption", a life insurance company) by two of its former agents who resigned their positions after selling insurance for Assumption for a period just over 10 years.

The plaintiffs, who were successful insurance sales persons, claim that under their contracts with Assumption they are entitled to substantial sums of money according to a formula in their agreements. The agreements do provide for payment to an agent on termination of a contract in certain situations subject to stipulated conditions. Assumption denies it owes the plaintiffs anything under the contracts they had concluded and maintains, among other things, that the plaintiffs are precluded from recovering under the contracts as they did not respect the terms of the agreements.

Assumption also claims damages for alleged breach of a term of the contracts and also claims for repayment of some of the commissions advanced to each of the plaintiffs. [ 2 ] The appellants want to appeal Riordon J.’s decision. They filed their Notice of Appeal and requested the transcript of the proceedings before the Court of Queen’s Bench.

For reasons beyond their control and through no fault of their own, the appellants are unable to produce the transcript of the evidence for the appeal. [ 3 ] They moved before this Court for a new trial and an order compelling the Province of New Brunswick to pay "costs of the trial on a solicitor-client basis".

At the hearing on the motion, we ruled from the bench on the appellants’ request against the Province of New Brunswick and there is no need to discuss that issue further. [ 4 ] The only issue raised in the motion is whether inability to prepare a transcript of the trial proceedings before the hearing of an appeal constitutes a miscarriage of justice warranting a new trial. [ 5 ] In support of their request for a new trial, the appellants filed an affidavit which merely establishes that they complied with the requirements of the Rules of Court in requesting a transcript of the proceedings before the Court of Queen’s Bench and that they were unsuccessful.

It is common ground that the appellants are not at fault in this regard. ANALYSIS AND DECISION [ 6 ] Rule 62 of the Rules of Court applies to civil appeals to the Court of Appeal. In the absence of an agreement under Rule 62.10(3), the appellants served on the respondent a Certificate of Appellant (Form 62F) certifying that all the evidence at trial was required for the appeal. They then ordered all the evidence required for the appeal.

Once notice is given that a transcript of the proceedings is required for appeal purposes, a person designated as a court reporter is assigned and is responsible for reporting all of the trial proceedings and certifying it to be a correct transcript of the proceedings. See sections 5 and 6 of the Court Reporters Act , S.N.B. 1974, c. C-30.1. Rule 62.11(2) provides that when the evidence has been transcribed, the court reporter shall forward the original transcript to the Registrar and notify the clerk and all parties to the appeal.

The persons assigned to this task were unable to fulfill this request as a result, it seems, of machine malfunction. In any case, the appellants were deprived of a complete transcript of the evidence at trial. The Case law [ 7 ] Today, all trial proceedings in civil matters are recorded, and, as mentioned earlier, an appellant who wants to appeal must order all the evidence required for the appeal.

The transcript of the evidence, duly certified, must then be sent to the Court of Appeal. [ 8 ] An appellant therefore has a statutory right to the recording of the evidence at trial and I do not think I am exaggerating when I say that, in almost all civil appeals, the transcript of the trial evidence can be a vital tool for the preparation of the case for the Court of Appeal.

This may be interpreted as meaning that when an appellant feels that the transcript is required for appeal purposes, failure to obtain it for mechanical reasons beyond the appellant’s control should automatically entitle the appellant to a new trial. However, case law on this point does not support this belief, be it in criminal, civil or administrative law matters.

[ 9 ] With respect to criminal and administrative law proceedings, I need only refer to R. v. Hayes , 1989 CanLII 108 (SCC) , [1989] 1 S.C.R. 44 and Canadian Union of Public Employees, Local 301 v. Montreal (City) , 1997 CanLII 386 (SCC) , [1997] 1 S.C.R. 793 .

In Hayes , in considering whether a new trial was necessary when the transcript was incomplete, L’Heureux- Dubé, J., wrote at page 48 that a “new trial need not be ordered for every gap in a transcript” and “[a]s a general rule, there must be a serious possibility that there was an error in the missing portion of the transcript, or that the omission deprived the appellant of a ground of appeal”. [ 10 ] In CUPE , a unanimous decision, in replying to an appellant who argued that his right to appeal was violated when the transcript of the proceedings before an administrative tribunal was not available owing to a human or mechanical error beyond his control, L’Heureux-Dubé, J., essentially reiterated, at paragraph 77, the same principles set out in Hayes . [ 11 ] Beyond the administrative law context, case law in civil matters has been constant for decades and is in line with some of the principles set out in Hayes and CUPE . [ 12 ] No one questions the principle that a gap in the transcript, or even the total absence of a transcript as a result of a fortuitous event, will not necessarily give rise to a miscarriage of justice nor denial of justice warranting a new trial, notwithstanding an Ontario Court of Appeal decision, that, as early as 1933, seemed to recognize an automatic right to a new trial in these circumstances.

Indeed, in Patton et al. v . Yukon Consolidated Gold Corp. Ltd. et al. , 1933 CanLII 357 (ON CA) , [1933] 2 D.L.R. 287 , at pages 287-88 , Riddell, J.A., writing for the majority, stated in February 1933: Etant donné que le sténographe officiel constitue une partie, voire une

partie importante, du tribunal de première instance, j’estime que l’impossibilité d’obtenir la transcription des procédures est un accident qui donne droit à un nouveau procès à la

partie qui conteste la décision en première instance et qui veut interjeter appel. [ 13 ] However, Davis, J.A., dissenting, wrote at page 288: Avec égards, je ne saurais souscrire à la décision prise par mes collègues en l’espèce. À mon avis, l’appelant n’a pas droit à un nouveau procès et la Cour ne l’accorde que par indulgence. Il faudrait, à mon sens, entendre la décision et les motifs du juge de première instance et examiner la preuve et les pièces disponibles avant de décider s’il y a lieu d’être indulgent et à quelles conditions. Le préjudice et l’injustice causés à la

partie intimée pourraient l’emporter considérablement sur le préjudice causé à la

partie appelante si on lui refusait un nouveau procès. Je m’en tiendrais à la pratique énoncée dans l’arrêt Ex. p. Firth, Re Cowburn (1881), 19 Ch. Div. 419. Nous ne connaissons ni les faits litigieux ni les points de droit en cause et, sans les examiner à fond, je ne pense pas que nous soyons en mesure d’accorder un nouveau procès par indulgence. [ 14 ] A few months later, in Morrison v .

Aldridge , 1933 CanLII 155 (ON CA) , [1933] O.R. 402 , a case where trial proceedings could not be transcribed because the court reporter had died, Middleton, J.A., writing for a unanimous Court of Appeal, stated as follows at page 405, without referring to Riddell J.A.’s statement in Patton : Vu toutes ces considérations, je suis d’avis que la Cour a l’obligation d’examiner les faits de chaque cas particulier. J’estime que la Cour est sans aucun doute habilitée à remédier aux difficultés pour lesquelles l’appelant n’est pas responsable, dès lors qu’il convainc la Cour que l’intérêt de la justice le commande.

Il ne peut pas se présenter devant la Cour et demander un nouveau procès de plein droit. Et, avant que la Cour n’ordonne la tenue d’un nouveau procès, il doit la convaincre que l’intérêt de la justice commande de le faire. L’appelant doit démontrer que sa cause mérite un examen plus approfondi, qu’il a une thèse plausible à présenter, et qu’il y a des raisons de croire que le jugement de première instance entraîne une injustice. J’estime qu’il doit par ailleurs faire la preuve de l’existence de circonstances spéciales pour que la Cour aille jusqu’à lui accorder un nouveau procès simpliciter .

Dans certains cas, il suffira de recueillir de nouveau une

partie de la preuve importante pour compléter le dossier; tout mettre de côté et donner à une

partie un droit illimité de recommencer et de présenter sa cause de nouveau n’est habituellement ni juste, ni raisonnable.

[ 15 ] In Kovacs v. Woodhuis , [1959] O.J. No. 348 , online: QL (O.J.), the Ontario Court of Appeal had to choose between these inconsistent points of view laid out 26 years earlier in Patton and Morrison . Schroeder, J.A., stated as follows at paragraph 4: Voici le premier moyen d’appel invoqué par l’avocat de la société appelante : la preuve produite au procès n’étant pas disponible devant notre Cour, le défendeur a droit à un nouveau procès ex debito justitiae . Il fait fond à cet égard sur le jugement majoritaire prononcé par notre Cour dans l’affaire Patton et al. c.

The Yukon Consolidated Gold Corporation Ltd. et al. , [1939] O.R. 192 . Il y a incompatibilité entre cet arrêt et un arrêt ultérieur prononcé dans l’affaire Morrison c. Aldridge, 1933 CanLII 155 (ON CA) , [1933] O.R. 402 . Il y lieu de faire observer d’emblée que l’arrêt Patton était un jugement majoritaire rendu par les juges Riddell et Fisher, le juge Davis (alors membre de la Cour d’appel), faisant valoir une dissidence. L’arrêt Morrison était une décision unanime de cette Cour.

Nous sommes d’avis que nous sommes liés par ce dernier arrêt et nous adoptons le principe ainsi énoncé par le juge Middleton, à la page 405… [Middleton J.A.’s words were quoted earlier]. […] Dans cette décision, à laquelle le juge Mulock, juge en chef de l’Ontario, et le juge d’appel Davis souscrivaient, la Cour a essentiellement adopté l’avis exprimé par le juge Davis dans sa dissidence dans Patton . [ 16 ] The appellants argued that Boulay and Miramichi Honda Ltd. v.

Rousalle and Breau (1983), 1983 CanLII 4005 (NB CA) , 45 N.B.R.(2d) 177 ( C.A. ) is binding in this case and, pursuant to the principles there enunciated, we should grant a new trial. [ 17 ] Boulay dealt with a motion for a new trial on the ground that the court stenographer, after an extensive search, was unable to locate the tapes of the testimony at trial in an action for damages. In the absence of the transcript of the testimony, the trial judge had made available to the Court of Appeal copies of notes he made during the course of the trial, but these were not complete in all respects.

The appellants had also persuaded the Court of Appeal of the merits of their grounds of appeal. This is what the Court said at paragraph 4: The issues to be decided on an appeal in this case involve questions of fact and inferences to be drawn from established facts. In these circumstances, and because we are satisfied that the appellants have a plausible case to present, we are of the opinion that the court would require a complete transcript in order to do justice between the parties.

Accordingly, in the absence of a complete record, a new trial will be ordered. [ 18 ] In my opinion, what this Court said in Boulay provides no succour to the appellants’ case.

On the contrary, I think that the Court was reiterating, without alluding to them, the principles set out in Morrison , where a new trial was disallowed on the ground that the appellants had failed to satisfy the Court of the meritoriousness of their grounds of appeal or that a new trial should be granted in the interest of justice. [ 19 ] We note that the record in this case contains an abundance of documentary evidence which is sufficient to argue several of the grounds of appeal dealing with "errors in law" with respect to the terms of the employment contract and its amendments.

I am not satisfied that the appellants will be unable to effectively argue the grounds of appeal dealing with the real legal issues raised in this appeal. On the other hand, some of the other grounds of appeal have nothing to do with points of law, but rather take issue with findings of fact on the ground that they are "patently wrong". I take the liberty of setting out all of the grounds of appeal raised by the appellants: The learned trial judge erred in law when he held that:

a. The respondent exerted no coercion or duress on the appellants. b. The appellants were free to terminate their employment contracts. They willingly and freely accepted the changes. Alternative courses of action were open to them. They contracted freely. c. The appellants’ subsequent conduct is a factor to be taken into consideration. d. The appellants’ experience as insurance sales persons is a factor to be taken into consideration. e. The amounts earned by the appellants is a factor to be taken into consideration. f.

The enforcement and recognition of the validity of the amendment by Léger was not conditional on the enforcement and recognition by Assumption of the validity of Marcia Goguen’s insurance contract. Each contract was executed independently. g. The appellants received consideration for the amendments. h. The 1993 amendment and the Compensation Guide are an integral part of the contract entered into by the parties. i. The lump sums payable were subject to conditions stipulated in Part F of the Compensation Guide. j. The forfeiture clause is valid and enforceable. k.

The forfeiture clause is not a restraint of trade. l. The non-competition clause and its scope are not a penalty clause. […] The learned trial judge’s findings of fact were patently wrong when he concluded that: a. The agreements provided for the payment of certain amounts to an agent on termination of his or her contract under certain circumstances subject to stipulated conditions. b.

According to the 1993 amendment, the lump sum payments provided were to be spread over a period of 60 months and were conditional upon the appellants cancellation of their life insurance licenses and refraining from selling insurance for any other company for 60 months after termination. c. The appellants had access to the Compensation Guide when they signed the 1993 amendment. The Compensation Guide was explained to the plaintiffs. d. The non-competition clause is in effect an assessment of Assumption’s potential damages.

[ 20 ] First of all, we must note that several of the grounds of appeal take issue with the trial judge’s findings of fact. Moreover, it must be borne in mind that the standard of appellate review for a trial judge’s findings of fact is strict and warrants a high level of appellate deference. Indeed, these findings of fact and inferences of fact are not to be reversed unless it is established that the trial judge made a palpable and overriding error. See to that effect Housen v. Nikolaisen , 2002 SCC 33 ;[2002] S.C.J. No. 31, online: QL (SCJ).

Accordingly, the appellants must satisfy this Court, by means at their disposal, of the merit of their grounds of appeal against the trial judge’s findings of fact by showing that these findings are clearly wrong, given the evidence before him. Since the transcript of the evidence does not exist, the appellants must find ways to inform this Court of all of the evidence adduced at trial in order to satisfy the Court of the merits of their grounds of appeal.

After all, the appellants were present at their trial and know what evidence was put before the Court. [ 21 ] Nothing filed before this Court in this matter would allow this Court to determine if there is any merit to the grounds of appeal or if a new trial is required to ensure that justice is done between the parties. [ 22 ] I would dismiss the motion for a new trial without costs. [ 23 ] The appellants are free to continue with the appeal proceedings if they so choose in the absence of the transcript of the evidence.