Stassis v. Amicus Bank, 2014 NLCA 38

Date: 201410 23 Docket: 11/55 Citation: Stassis v. Amicus Bank , 2014 NLCA 38 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: MARIA STASSIS APPELLANT AND: AMICUS BANK, TRADING AS PRESIDENT’S CHOICE FINANCIAL FIRST RESPONDENT AND: CANADIAN IMPERIAL BANK OF COMMERCE, TRADING AS PRESIDENT’S CHOICE FINANCIAL SECOND RESPONDENT AND: LOBLAW COMPANIES INC. THIRD RESPONDENT AND: CIBC MORTGAGES INC., TRADING AS PRESIDENT’S CHOICE FINANCIAL FOURTH RESPONDENT AND BETWEEN: MARIA STASSIS APPELLANT

AND: BRIAN WENTZELL FIRST RESPONDENT AND: COLLINS & ASSOCIATES SECOND RESPONDENT Coram: Green C.J.N.L., Welsh and White JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 2005 01T 7997 & 2006 01T 2452 (2011 NLTD(G) 73) Appeal Heard: January 15 & 21, 2014 Judgment Rendered: October 23, 2014 Reasons for Judgment by White J.A. Concurred in by Green C.J.N.L. and Welsh J.A.

Counsel for Maria Stassis: Kenneth Mahoney Counsel for Amicus Bank, Canadian Imperial Bank of Commerce, Loblaw Companies Inc., and CIBC Mortgages Inc.: Genevieve Dawson Counsel for Brian Wentzell and Collins & Associates: Kevin Stamp Q.C. White J.A.: [ 1 ] The appellant, Maria Stassis, sued Amicus Bank in breach of contract and negligent misrepresentation and her former lawyers in negligence, breach of contract, and breach of fiduciary duty. Her claims were dismissed after a trial which took place over 14 days. She appeals the decision of the trial judge.

BACKGROUND [ 2 ] After years of hard work in the pizza business, Ms. Stassis opened her own pizzeria in 1995. She called it Pizza Perfecto. She felt she had accomplished her dream. She described her business as a “complete way of life”. [ 3 ] However, Pizza Perfecto was not profitable. Ms. Stassis’ bookkeeper, a certified management accountant, recommended that she close it down. Instead, Ms. Stassis decided that she needed to renovate and expand. It was her view that with a bigger kitchen she could offer a wider menu and, with a bigger eating area, could serve more customers.

In 1998 she and her bookkeeper developed a business expansion plan. [ 4 ] Ms. Stassis had some equity in her home and a positive credit rating, so she settled on obtaining a mortgage. She hoped to get enough money both to expand her business and to renovate her basement apartment. Her daughter told her that President’s Choice Financial offered good rates, so in the spring of 1999, she walked into the President’s Choice Financial kiosk in the Ropewalk Lane Dominion supermarket. [ 5 ] Personnel at the kiosk did not, in fact, approve mortgages. What they did was to gather information from prospective clients.

Final determinations as to a mortgage were made by CIBC Mortgages Inc. This is because the respondent, Amicus Bank, which was trading as President’s Choice Financial using kiosks located in Dominion supermarkets, is a part of the Canadian Imperial Bank of Commerce (CIBC). CIBC Mortgages Inc. made the decisions regarding mortgages, including terms and conditions to be fulfilled before a mortgage would be granted. [ 6 ] Two former employees of President’s Choice Financial testified. Ms. Abbott, the first to deal with Ms.

Stassis, said that her role was to collect the information for mortgage applications directly from prospective clients. The client was required to provide identification together with income information. She testified that she had no authority to approve a mortgage, and that “she would not have provided anyone with a preliminary guess as to whether or not they would be approved for a mortgage” (decision of the trial judge, 2011 NLTD(G) 73, at paragraph 24). [ 7 ] The trial judge described the testimony of Ms.

Walters, the second kiosk employee, as follows: … there was very little paper at the kiosk; rather, information was entered into the computer in response to questions prompted by a computer program. Essentially, she would meet with customers, gather their information and input the information in the computer. Ms. Walters’ evidence was that she would not analyze the financial information provided; nor would she make any decisions as to whether financing would be approved.

Decisions regarding a mortgage application were not made at the pavilion level. (Decision of the trial judge, at paragraph 27.) [ 8 ] The Bank says that the President’s Choice Financial kiosk system was a pilot project to test the possible use of virtual banking. The intention was to reduce the use of paper and rely on electronic technology. Testimony of Ms. Stassis [ 9 ] As Ms. Stassis remembers it, she first went to the kiosk in late May 1999. There she spoke to Alison Abbott, whom her daughter knew from school. Ms. Stassis testified that she remembers passing Ms.

Abbott her individual tax returns for the last two years. In addition, she explained that her children were giving her some money and that she was renovating her basement apartment from which she expected some rental income. In her evidence she stated that Ms. Abbott took this information and used it to complete a mortgage application. The process occurred entirely on the computer and Ms. Stassis was not given a copy. [ 10 ] A few days later, Ms. Stassis says, Ms. Abbott called her and said that her application had been rejected. The bank would only consider Ms.

Stassis’ declared income, not the money she was getting from her children or the money she hoped she would be getting for her apartment. [ 11 ] Ms. Stassis stated that she came back on June 3, taking her business financial statements as well as her personal statements. The only thing that she was missing was the 1996 notice of assessment for the business, which she requested from Revenue Canada the next day, June 4. Again, she says that Ms. Abbott took all of her documents, determined her income and filled in a mortgage application for her. Ms.

Stassis said that she asked for a copy of the application but that Ms. Abbott said that the system could not print one, and that one would be sent in the mail. [ 12 ] About a week later Ms. Stassis said she returned to the kiosk to ask how her application was progressing. This time she brought, in addition to her other documents, a copy of the 1996 notice of assessment. She met with Ms. Walters, who told her that Ms. Abbott was no longer working for President’s Choice Financial. Ms. Walters said that she would take care of the application. Ms.

Walters took all of the documents into a back room, came back out and said that the bank had everything that it needed to evaluate the application. Ms. Stassis gave evidence that on June 19, she returned to the kiosk a fourth time when Ms. Walters met with her and said that her mortgage application was approved and that she would get a call from the head office later that day. [ 13 ] When Ms. Stassis got back to Pizza Perfecto, she said she received a call from Kristine Rooney of the head office. She said Ms. Rooney confirmed that the mortgage was approved and that the money would arrive in 30 or 40 days.

On either June 30 or July 2, Ms. Stassis said she got a formal letter confirming that she was approved for a mortgage. On July 3 she returned once more to the President’s Choice kiosk and met once more with Ms. Walters. She requested a convertible 6 month mortgage instead of a 60 month mortgage. She corrected her name from Marie to Maria and then signed the mortgage approval form. [ 14 ] Ms. Stassis said that she had always planned to renovate over the summer, as that was a slow time for Pizza Perfecto, which had three nearby schools and a busy lunch time during the school year.

So, after she signed the mortgage commitment, Ms. Stassis closed her business, put up a sign announcing renovations, and started breaking down the interior. She also started work on her basement apartment, putting the cost on her credit card. She was confident that the mortgage funds would come through soon. [ 15 ] However, Ms. Stassis said that, in late July, she received another phone call from Ms. Rooney. The mortgage could not be completed because Ms. Stassis’ financial documentation did not support the income as stated on her mortgage application. [ 16 ] The next few months were very difficult. Ms.

Stassis was receiving no income from her business, her renovations were stalled, and her debts were mounting. She felt ashamed, unable to look people in the eye. “I could not think”, she said, “and I could not speak”. She said that she withdrew money from her RRSPs. She asked her daughter to co-sign a mortgage with her. This was an alternative suggested by the Bank when her mortgage application was rejected. But even when that came through, it was too little and too late to save Pizza Perfecto. [ 17 ] In October Ms. Stassis moved her equipment into her basement apartment. In December she dissolved her company.

She never opened another pizzeria. Testimony from the Bank’s Representatives [ 18 ] Colin Burke, President’s Choice Financial’s regional sales manager for Atlantic Canada outlined the distinctions among the

three kinds of workers involved in approving a mortgage: kiosk representatives, such as Ms. Abbott or Ms. Walters; mortgage specialists, such as Ms. Rooney; and underwriters employed by CIBC Mortgages Inc. [ 19 ] Kiosk representatives would not approve mortgages or even review documents. They were to write down whatever customers told them, enter it into a computer, and submit it to CIBC. They could accept documents and forward them to mortgage specialists, but they would not collect or store documents in their kiosk. The CIBC mortgage specialists such as Ms. Rooney would not approve mortgages either.

They might issue a conditional approval, though they might also consult with underwriters before doing so. But either way, their principal work was following up with clients and following up on pre-conditions to granting a mortgage. Only the underwriters would issue a final approval. [ 20 ] This division of labour was broadly echoed by Ms. Rooney, who had worked as a mortgage specialist from 1998 to 2005. Every day she received a list of applications, each containing information that had been entered by kiosk representatives. She did not issue conditional approvals herself.

Instead, she calculated some ratios and submitted the file to the underwriting department. If the mortgage was conditionally approved, she called the customer again to explain why income verification documents would be needed. She would send the customer a mortgage commitment letter with the outstanding conditions highlighted. When the file was complete, she would forward it to the underwriters for final approval. [ 21 ] Ms. Rooney testified that she remembered Ms. Stassis, but not the details of her mortgage. She thought she had first received Ms. Stassis’ application on June 28 not June 3.

But whatever the date, Ms. Rooney said that once she received Ms. Stassis’ application from the kiosk she would have reviewed it, called Ms. Stassis, and forwarded it to underwriting. When underwriting told her that the application was conditionally approved, she would have called Ms. Stassis to congratulate her. But she would not have known the precise conditions until she received a formal package from underwriting, and would not have speculated about them over the phone. Nor would she have estimated that the mortgage would be complete within 30 or 40 days. Finally, Ms.

Rooney said that she would not have waited three weeks before informing Ms. Stassis that her mortgage could not be approved. She would have called about a week after Ms. Stassis signed the mortgage commitment letter. As it turned out, underwriting did not approve the mortgage because the conditions set out in the mortgage commitment letter were not satisfied. Unfortunately, Ms. Stassis did not wait to begin her renovations until she had obtained the necessary final approval of the mortgage. Legal Advice [ 22 ] At first Ms. Stassis said that she felt she was responsible for her own misfortune.

But over time, she became convinced that the Bank had promised her a mortgage and that she was not to blame for relying on their promise. In 2001 she went to see a lawyer, Brian Wentzell, who attempted repeatedly and unsuccessfully to get copies of the relevant documentation from the Bank. By early 2004 Mr. Wentzell advised Ms. Stassis that, although her claim might be true, it would be difficult to prove. [ 23 ] Ms. Stassis sought assistance from a number of other lawyers, and in the end she filed an action against Mr.

Wentzell and his law firm (Law Firm Defendants) to avoid the expiration of the limitation period. This action was heard together with the action against the Bank. The Law Firm Defendants could only be liable if Ms. Stassis first established that she had a claim against the Bank. THE TRIAL JUDGE’S DECISION [ 24 ] The first issue in the trial judge’s decision was whether the Bank had breached a contract with Ms. Stassis or made a negligent misrepresentation to her. The judge began her analysis with the letter from Ms.

Rooney that accompanied the written mortgage commitment on June 29: [53] … In order to advance the funds for your mortgage on time, we require the following from you: 1. Signed Commitment: a signed copy of the commitment to us within 7 days from the date on this letter . 2.

Conditional Requirements: on page 2, we have highlighted items that you must send to us. … The mortgage commitment itself continues along the same line: [54] … This commitment is conditional upon: 1) Receipt of copies of the Revenue Canada Notice of Assessments for the past two years for Marie Stassis. 2) Receipt of copies of the T1 General form for the past two years for Marie Stassis. … 4) Receipt of the following prior to closing:

i) Income verification satisfactory to the Lender. … (Bold and underlining added in original.)

[ 25 ] The trial judge concluded that the mortgage commitment was in fact conditional on the income verification documents. The next question was who was responsible for any inaccuracy or error regarding Ms. Stassis’ income in her application. “If Ms. Stassis was responsible for the inaccuracy in the application”, the trial judge said, “she cannot possibly succeed in her claims.” The trial judge concluded that Ms. Stassis met Ms. Abbott on June 3 and provided the faulty information.

She gave four reasons: 1) She accepted the testimony of the Bank’s employees that representatives took their information directly from the clients. 2) Several times in cross-examination, Ms. Stassis was shown financial statements from Pizza Perfecto and asked how much money the company made. Each time she identified the cost of goods sold – the very error made in the mortgage application. The trial judge inferred that Ms. Stassis “was unable to discern between ‘cost of goods sold’ and profit.” 3) The mortgage application contained two other errors. It stated that Ms.

Stassis’ previous employer had paid her $22,000 per year, and it stated that Ms. Stassis received $5,400 and $6,000 annually from her children, when at trial she testified that they paid $4,800. The trial judge doubted that Ms. Abbott “pulled [those figures] out of a hat”. 4) The trial judge found that Ms. Stassis’ evidence about dates was unreliable. Out of “numerous examples”, the trial judge selected a few:

a) Ms. Stassis said at trial that she had submitted a certified pay stub on June 3. But the stub bears a fax banner saying July 3, and Ms. Stassis had previously written in a letter to Mr. Wentzell that the stub was faxed on July 3.

b) In a 2001 letter to Tammy Buckingham, Ms. Stassis wrote that she first went to the President’s Choice kiosk in June, rather than May and that she first spoke to Ms. Walters, not Ms. Abbott.

c) In Mr. Wentzell’s copy of the Tammy Buckingham letter, Ms. Stassis wrote that Ms. Rooney called her up “within a week” to tell her that the mortgage was cancelled. But the copy that Ms. Stassis provided at trial had the words “three weeks” written above “within a week”. Ms. Stassis was not sure when she made that alternation.

d) Ms. Stassis first received verbal approval of her mortgage on June 30, according to her statement of claim; “late June”, according to “another document”; June 19, according to her examination in chief; June 30, at one point in cross-examination; and before June 29, at another.

e) Ms. Stassis said in cross-examination that Ms. Walters explained the conditions of her mortgage to her. A bit later she said that Ms. Walters had not. [ 26 ] The trial judge concluded for similar reasons that Ms. Rooney had probably explained to Ms. Stassis that her mortgage was conditional on income verification. Ms. Stassis admitted in cross-examination that she was aware that the mortgage was conditional. [ 27 ] Nor did the trial judge accept that Ms. Walters had told Ms. Stassis that all income verification documents had been received. The trial judge was not satisfied that Ms.

Stassis’ May 31 financial statements would even have been ready by June 3. [ 28 ] The trial judge concluded that Ms. Stassis could not succeed against the Bank, and that there was no need to consider Ms. Stassis’ suit against the Law Firm Defendants. ISSUES [ 29 ] Ms. Stassis raises four arguments in her factum: 1) The trial judge failed to give sufficient weight to key aspects of Ms. Stassis’ evidence, made incorrect adverse conclusions about Ms. Stassis’ memory and credibility, and mischaracterized Ms.

Stassis’ evidence. 2) The trial judge should have drawn an adverse inference against the Bank because they refused to provide documents before trial, eventually providing inauthentic copies, and failed to call key witnesses. 3) The trial judge should have concluded that Ms. Stassis had proved her claims in negligence, negligent misrepresentation and breach of contract. 4) The trial judge should have found that the Bank breached its fiduciary duty towards Ms. Stassis. STANDARD OF REVIEW [ 30 ] All of Ms. Stassis’ arguments raised questions of fact or of mixed fact and law.

None presents an extricable question of law. So this Court cannot intervene unless Ms. Stassis can show that the trial judge made a palpable and overriding error: Cleary v. Courtney, 2010 NLCA 46 , 299 Nfld. & P.E.I.R. 85; Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235. [ 31 ] The nature of a palpable and overriding error was recently discussed in Rich v. Bromley Estate , 2013 NLCA 24 , 336 Nfld. & P.E.I.R. 107, leave to appeal to SCC refused 35406 (October 24, 2013): [19] A palpable and overriding error has been described as one which is “plainly seen” in Housen at paragraph 4 . It may arise when (

i) there is no evidence to support a trial judge’s decision; (ii) irrelevant factors were considered and relevant factors were not, or (iii) where there is an award of damages that is inordinately high or low (see Bussey v. White , 2001 NFCA 7 , at para. 7 ). [20] In employing this list, two things must be kept in mind. First, the phrase “palpable and overriding error” encapsulates the highest level of appellate deference. It is not enough for the appellant to show that the trial judge considered one irrelevant factor, or that he or she failed to consider one relevant one. An appellate court will only intervene if the error is significant enough to displace the

strong arguments in favour of deference. [21] Second, the categories of palpable and overriding errors are never closed. As Iacobucci and Major JJ. wrote at paragraph 25 ofHousen, “there is one, and only one, standard of review applicable to all factual conclusions made by the trial judge – that of palpableand overriding error”. Any error that is plain enough and significant enough will trigger appellate intervention, regardless of whether theerror fits into any list of categories. ANALYSIS Credibility [32] Ms. Stassis’ first argument is that the trial judge should not have found her evidence unreliable. Ms.

Stassis says that she is theonly one who remembers what happened at the kiosk, what documents she brought, and when she brought them, or what Ms. Rooneysaid over the phone. The Bank kept no records of those events and their employees have no specific recollections. So how, Ms. Stassisasks, can the trial judge have rejected her evidence and preferred that of the Bank? [33] The issue of credibility is discussed by O’Halloran J.A. in Farnyna v.

Chorny, (BC CA), [1952] 2 D.L.R. 354(BCCA) at page 357: The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether thepersonal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examinationof its consistency with the probabilities that surround the currently existing conditions. … [A] witness may testify what he sincerelybelieves to be true, but he may be quite honestly mistaken.

For a trial Judge to say “I believe him because I judge him to be telling thetruth”, is to come to a conclusion on consideration of only half the problem. … [34] Ms. Stassis has the burden of proving her claim on a balance of probabilities, and the trial judge concluded that her memory wasnot reliable enough to meet that burden. The Bank’s employees’ testimony did not contradict Ms. Stassis’ evidence. It provided thecontext in which Ms. Stassis’ claim had to be evaluated.

Ultimately, the trial judge had to decide which was more likely: had the Bank’semployees made unusual, uncharacteristic mistakes in dealing with Ms. Stassis, or had Ms. Stassis incorrectly remembered ormisunderstood some details of 11-year-old transactions? After reviewing the relevant evidence, the trial judge made clear findings offact adverse to Ms. Stassis, with examples to support her conclusions. There is no basis on which to conclude that the trial judge made apalpable and overriding error in assessing Ms. Stassis’ evidence within the context of the evidence as a whole. Adverse Inference [35] Ms.

Stassis’ second argument is that the trial judge ought to have drawn an adverse inference against the Bank for failing topreserve, disclose, or produce evidence that was in their sole custody. [36] Adverse inferences are founded on the common-sense logic that if a party has evidence and chooses not to bring it forward itmust not have been favorable.

The Supreme Court of Canada has made reference to the proposition stated by Lord Mansfield in Blatch v.Archer (1774), 1 Cowp. 63, 98 E.R. 969, at page 970: It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced,and in the power of the other side to have contradicted. (Clements v. Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, at paragraph 11; R. v. Jolivet, 2000 SCC 29, [2000] 1 S.C.R. 751, atparagraph 25.) [37] I will now review Ms. Stassis’ particular arguments.

Replies to Interrogatories [38] In 2008 the Law Firm Defendants delivered a set of interrogatories to the Bank. A few months later, they received a set ofreplies from Neil Todd, CIBC Mortgages’ Director of Non-Conforming mortgages. Neither the Law Firm Defendants nor the Bankmentioned these interrogatories in their list of documents. [39] Ms. Stassis was self-represented at the time of the interrogatories and their reply. She engaged different counsel halfwaythrough the trial.

Her counsel studied all the documents in the defendants’ list of documents, but the interrogatories only came to hisattention in court on the second-last day of the trial. He attached great significance to them during the rest of the trial and on appeal, inparticular to a reference by Mr. Todd which he argued indicated that there was a record of a June 3 application in the WAPP system. Itwas his view that they might well have affected his earlier questioning and submissions, and that the failure to mention theinterrogatories in the list of documents may well have caused Ms.

Stassis actual prejudice. [40] While Rule 32 does not require that interrogatories and replies to interrogatories be set out on a list of documents, a record in theWAPP system referred to in a reply would properly be included. [41] In any event, although the Law Firm Defendants and the Bank ought to have mentioned them, they believed Ms. Stassis had acopy and reasonably expected that her counsel was aware of them. The documents were available to counsel, albeit late in the trial, and,if necessary, it would have been open to counsel to request the recall of certain witnesses.

There is no error in the failure of the trialjudge to draw an adverse inference as counsel for Ms. Stassis argued she ought to have done. The WAPP (Computer) Records [42] Kiosk representatives and mortgage specialists used the computer system called WAPP to record the details of mortgage

applications. In particular, Ms. Stassis asserts that the WAPP system must have contained a record of her June 3 application and that the Bank failed to disclose it. [ 43 ] Ms. Rooney says that she found no record in WAPP of any application before June 28. But Mr. Todd’s interrogatory replies state that Ms. Stassis had applied for a mortgage on June 3. Ms. Stassis infers that the Bank failed to produce whatever record Mr. Todd had found. [ 44 ] Unfortunately, Mr.

Todd’s replies to the interrogatories are confused: 4. … According to the WAPP system, Maria Stassis made a mortgage application to President’s Choice Financial on June 3, 1999. … I performed a search under the name “Stassis” on the WAPP application system and this is the first and only mortgage application that was made by Maria Stassis. A signature form was completed by Ms. Stassis, a copy of which is attached hereto as Exhibit “C”. … [ 45 ] Exhibit “C” is actually a page from a mortgage commitment, not a mortgage application, and it is dated July 3, not June 3. Mr.

Todd continued: 5 … I can confirm that a mortgage application was made by Maria Stassis to President’s Choice Financial, but that the first record that we have of such a mortgage application that we have is on June 28th, 1999. … [ 46 ] Mr. Todd does not explain how the information on the WAPP system could indicate that Ms. Stassis applied on June 3 while there was no record of any application before June 28. Ms. Rooney did not mention these discrepancies. It is unclear how long she had to examine Mr. Todd’s affidavits. But her immediate reaction was to suggest that Mr.

Todd might have made an error: To be honest with you, I don’t believe Mr. Todd knew what the process was as Mr. Todd never did my job. So, I don’t know if Mr. Todd knows the WAPP system as I knew the WAPP system. … So again, I can’t say as to – if there is an application as of June 3rd, I have no knowledge of it and I don’t know if it exists or not. [ 47 ] The trial judge did not analyze or resolve these problems. She accepted Maria Stassis’ evidence that she had applied on June 3, adding cautiously that Mr.

Todd’s reply “appears to support” her testimony. [ 48 ] I cannot find any error in the trial judge’s approach. The WAPP records might, if they had been unambiguous, have suggested that Ms. Stassis did not apply until June 28. But the Bank was responsible for the record’s ambiguity, and a sophisticated party, represented by experienced counsel, should not be allowed to create uncertainty and then benefit from it. [ 49 ] That said, it is one thing to give Ms. Stassis the benefit of the doubt about the application date.

It is another thing to find that the Bank had and failed to disclose the records of a June 3 application. The trial judge made no such finding. The record does not call for one. Fax Transmission Receipts [ 50 ] Ms. Stassis says that the Bank should have produced fax transmission receipts for the income verification documents that the kiosk faxed to the head office in May and early June. They produced no receipts earlier than July. [ 51 ] This argument assumes that income verification documents were faxed to the head office in May or early June.

The trial judge was not satisfied that they were, and I cannot find any error in her analysis. Original Copies of Mortgage Documents [ 52 ] When Mr. Wentzell asked for the mortgage application documents, the Bank sent him an inaccurate mortgage application and an inaccurate mortgage commitment instead. The mortgage application that they sent is undated and claims Ms. Stassis had a base income of $40,096 and $11,400 in unspecified additional income. The mortgage commitment they sent him was dated June 29, but was inaccurate, listing Anna Stassis as a co-applicant.

Later, the Bank produced another June 29 mortgage commitment that Ms. Stassis accepts as the original. [ 53 ] The record does not explain how the alternative June 29 mortgage commitment came into being. Whatever the story, it does not appear to have been more advantagous than the original. It was produced before the action began and before the Bank had any discovery obligations. In any event, the Bank did eventually find and disclose the correct document, and there was no prejudice to Ms. Stassis. Additional Witnesses [ 54 ] The Bank did not call witnesses who, Ms. Stassis says, might have cast light on events.

The WAPP and Target systems showed that another kiosk representative and two other underwriters were involved in processing the application. Neil Todd might have explained this in his cryptic interrogatory replies. Ms. Rooney’s supervisor, John Murphy might have explained what happened to the paper file. [ 55 ] But the Bank could not have expected those witnesses to have significant evidence. Ms. Stassis never alleged that she spoke to any of them or relied on any of their statements.

A party cannot be expected to call “possible witnesses whose testimony would for any reason be comparatively unimportant, or cumulative , or inferior to what is already utilized”: John Henry Wigmore, Evidence in Trials at Common Law , vol. 2, 1970 ed. by James H. Chadbourn (Toronto, ON: Little Brown & Company, 1970)

section 287 (italics in original). [ 56 ] Of the four, Ms. Yeung comes closest to having useful evidence. The WAPP printout says she briefly “took ownership” of Ms. Stassis’ file the night of June 28. But Ms. Stassis does not remember her, and if Ms. Stassis wanted to call her just in case, she could have done so herself. After all it was Ms. Stassis who called the other kiosk representatives.

The Paper File [ 57 ] Ms. Rooney testified that she would have kept a paper file with notes about her conversations with Ms. Stassis. Under Bank policy that file would have been preserved for seven years, that is, until June 2006. It was never produced; Ms. Rooney said that it was “probably shredded”. But the Bank knew of Ms. Stassis’ claims from at least 2001, and the statement of claim in this action was filed in June 2005. [ 58 ] If the paper file existed in June 2006, the Bank ought to have preserved and disclosed it. They did not.

The trial judge was entitled to draw an adverse inference against the Bank. [ 59 ] But the question before this Court is not whether the trial judge was entitled to draw an adverse inference. It is whether the record shows that the trial judge made a palpable and overriding error by failing to do so. [ 60 ] The trial judge heard evidence that the Bank was constantly modifying its procedures and records during 1999. She might have decided on a balance of probabilities that they had an innocent explanation for failing to preserve the paper file.

Or she could have decided that any adverse inference would be too small to fill the gaps in Ms. Stassis’ case. Either way, the record does not show any reversible error. Other Arguments [ 61 ] Ms. Stassis has not succeeded in challenging any of the trial judge’s factual findings. Based on those factual findings, the judge concluded: [121] I therefore further conclude that any statements by Ms. Walters or Ms. Rooney indicating that Ms. Stassis had been approved could not have been reasonably construed by Ms.

Stassis as a representation of an unconditional approval; and that they did not negligently misrepresent to Ms. Stassis that she was unconditionally approved. I accept that Ms. Rooney highlighted outstanding requirements on the mortgage commitment because those documents had not yet been provided to [the Bank] when Ms. Rooney sent out the June 29, 1999 correspondence. Further, based upon the evidence, it is more probable that Ms. Rooney did advise Ms. Stassis of these highlighted conditions prior to forwarding that correspondence, as per her usual practice. Similarly, I do not accept that Ms.

Stassis was ever advised by Ms. Walters prior to July 3, 1999 that [the Bank] had all the income verification documents that it required. Based upon the evidence, it is more probable that Ms. Stassis provided Ms. Walters with the income verification documents on July 3, 1999, at which time Ms. Walters faxed such documents to the mortgage department. … [123] Based upon the foregoing, I find that Ms. Stassis’ claim for negligent misrepresentation against the [Bank] cannot succeed.

She did not establish, on the balance of probabilities, that any of the PCF Defendants were responsible for the inaccurate reporting of her income in her mortgage application. Further, Ms. Stassis did not establish that there was a negligent misrepresentation by [the Bank]. Ms. Stassis’ claim for negligence/negligent misrepresentation is dismissed. [124] Similarly, Ms. Stassis’ claim for breach of contract cannot possibly succeed as the mortgage commitment contract clearly indicated that the mortgage funding was conditional upon the satisfaction of conditions. Further, Ms.

Stassis did not establish that these conditions were varied, or other terms implied, due to any representations by [the Bank]. I have found that the condition of “income verification satisfactory to the lender” had not been satisfied prior to Ms. Stassis signing the mortgage commitment on July 3, 1999; nor was it satisfied after July 3, 1999. Therefore a finding of breach of contract cannot be made. Ms.

Stassis’ claim for breach of contract is dismissed. [ 62 ] Given that the trial judge’s findings of fact have not been successfully challenged, there is no basis on which to challenge the above analysis and conclusions. [ 63 ] On appeal, Ms. Stassis argued that the trial judge should have found that the Bank breached its fiduciary duty to her.

She states in her factum that a fiduciary relationship with the Bank arose because of her difficulty with English as her second language and because she placed her trust in an inherently flawed new virtual system of banking. [ 64 ] With respect to the language issue, the trial judge noted: [117] … Ms. Stassis had an interpreter at trial due to the fact that English is her second language, however, … she availed of these services only intermittently during the trial. Further … the evidence is that Ms. Stassis brought to Ms.

Walter’s attention that a term of the mortgage commitment needed to be changed; … this leads to the conclusion that Ms. Stassis had the ability to review and comprehend the mortgage commitment … . [ 65 ] As to the trust in the virtual system, there is nothing in the trial judge’s decision as the issue was not raised at trial. No argument was made on appeal that would lead this Court to conclude that any difficulties with the virtual system took the relationship beyond that of ordinary borrower-lender such that a fiduciary relationship was created.

CONCLUSION [ 66 ] I would dismiss the appeal and order that the Bank and the Law Firm Defendants are entitled to their costs on column three of the scale of costs.

______________________________ C. W. White J.A I Concur: ________________________________ J. D. Green C.J.N.L. I Concur: ________________________________ B. G. Welsh J.A.