PERFORMANCE FACTORY INC. APPELLANT v. :, 2013 NLCA 11

Date: 20130205 Docket: 12/06 Citation: Performance Factory Inc. v. Atlantic Insurance Company Ltd. , 2013 NLCA 11 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: PERFORMANCE FACTORY INC. APPELLANT AND : ATLANTIC INSURANCE COMPANY LIMITED RESPONDENT Coram: Green C.J.N.L., Welsh and Barry JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 200105T0259 Appeal Heard: September 10, 2012 Judgment Rendered: February 5, 2013 Reasons for Judgment by Welsh J.A. Concurred in by Green C.J.N.L. Dissenting Reasons by Barry J.A.

Counsel for the Appellant: James Hughes Q.C. and Rosellen Sullivan Counsel for the Respondent: John F. Dawson and John Taylor-Hood

Welsh J.A.: [1] The trial judge determined that a fire, which destroyed the building where Performance Factory Inc. carried on business, wasset deliberately by Michael Hann, a principal of the company, and his father, Wesley Hann. As a result, recovery under the insurancepolicy with Atlantic Insurance Company Limited was denied. At issue in the appeal is whether the trial judge erred in the analysis heapplied to the evidence in determining that the fire was caused by arson. A detailed

summary of the factual background is contained inthe dissenting reasons of Barry J.A. [2] As discussed below, whether the trial judge erred in his approach to assessing the evidence in this case involves aconsideration of whether he erred in principle. This question engages a standard of review of correctness (Courtney v. Cleary, 2010NLCA 46, 299 Nfld. & P.E.I.R. 85, at paragraph 15). [3] The beginning point of the analysis is the standard of proof to be applied by the judge. In F.H. v.

McDougall, 2008 SCC 53,[2008] 3 S.C.R. 41, Rothstein J., for the Court, explained: [49] In the result, I would reaffirm that in civil cases there is only one standard of proof and that is proof on a balance ofprobabilities. In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely thannot that an alleged event occurred. [4] In the case of an allegation of arson, the burden of proof is on the party making that allegation (Sweeney v.

Zurich InsuranceCo. (1999), (NL SC), 175 Nfld. & P.E.I.R. 281 (NLCA), leave to appeal refused (2000), 194 Nfld. & P.E.I.R. 180). Accordingly, in this case, Atlantic Insurance was required to establish on a balance of probabilities that arson was the cause of the fire. Inote that the standard of proof of “high probability” in order to establish arson in a civil proceeding, which was applied in Zurich, is, as aresult of McDougall, no longer the law.

In Zurich, the majority, referring to the “higher probability” of proof required in an arson case,concluded: [43] … Accordingly, an insurer may not logically be considered to have passed the threshold or starting gate in mounting a defence ofarson if it cannot demonstrate on the whole of the evidence that reasonably probable fortuitous or accidental causes are eliminated Thismust surely be considered the sine qua non to an arson defence. [5] In light of the law as stated in McDougall, the requirement that other causes must be “eliminated” in order to establish arson nolonger applies.

However, the fact that other causes may not be eliminated on the basis of the evidence before the Court will be arelevant, and potentially important, consideration in assessing the balance of probabilities in an arson case. [6] In the result, it is not necessary for Atlantic Insurance to demonstrate “that reasonably probable fortuitous or accidental causesare eliminated”. Rather the question is whether, on the whole of the evidence, Atlantic Insurance has established that it is more likelythan not that arson was the cause of the fire.

The fact that other reasonably probable causes are not eliminated is a relevant considerationin assessing whether arson has been established on a balance of probabilities. [7] In discussing the evidence, the trial judge focused on the statements given by Michael and Wesley Hann to a police officerduring the investigation of the fire. The statements, which were sought for the purpose of a criminal investigation, were ruledinadmissible as being involuntary in the criminal proceedings.

However, as properly noted by the trial judge, the statements wereadmissible in the civil proceedings, their weight and relevance to be considered in the context of the whole of the evidence. [8] The statements given by Michael and Wesley Hann, if they were in fact made, provide evidence that the fire was started bythem using gasoline and a lighter. Wesley’s statement, which was written by the police officer, states that Wesley declined to write thestatement himself because he said that, while he could write, he was not good at it.

The statement says, “I hove a half gallon or gallon ofgas over the floor and we lighted it.” Other questions and answers follow in which Wesley says the gasoline was lit by means of alighter. The same police officer wrote the statement given by Michael Hann, though there is no indication, as with Wesley, that Michaelwas given the option to write his own statement.

Michael’s statement contains the same essential information as Wesley’s; that is, thatthey “put some [gas] on the floor maybe a half a gallon or a gallon and lit it”. [9] At the trial, both Wesley and Michael Hann denied that they had made the statements as written by the police officer. Thetrial judge identified indicia which supported the conclusion that the statements, in fact, described how the fire started.

In thecircumstances, it was incumbent on the trial judge to weigh this evidence in the context of the whole of the remaining evidence todetermine if in fact the statements were made and, if so, whether their contents met the standard of proof necessary to establish that theHanns had set the fire. However, the analysis conducted by the trial judge failed to accomplish this. [10] Having found that the Hanns gave statements to a police officer, the next step would be to assess the truthfulness of thestatements in light of the Hanns’ denials. This could only be done in the context of the whole of the evidence.

However, the trial judgefailed in this exercise because he determined the truthfulness of the statements independently from and before considering other relevantevidence. [11] Important evidence that would support the Hanns’ testimony at trial was the evidence given by experts. None of the experts,including the expert proffered by Atlantic Insurance, agreed that the fire could have been started as outlined in the written statements. All were of the view that there would have been “flash back” from ignition of the gasoline which would have caused injury to the personlighting the gasoline with a lighter.

In considering this evidence, the trial judge stated (2010 NLTD 40, 295 Nfld. & P.E.I.R. 193): [63] Contradicting the method of ignition as outlined in the statements, [Performance Factory] argues that if gas was lit using acigarette lighter, then Mr. Hann would have been burnt by a “flash” from the gasoline vapors. As no injury was reported, the method ofignition described could not have occurred and thus undermines the possible “truth” of the statements.

From the opinion evidence by thefire investigators and experts, it appears that a flash from the ignition of open gasoline poured on the floor would be expected, if lit by a

cigarette lighter. While this gives some weight to [Performance Factory’s] argument, I am not convinced that we know exactly howmuch gas was used by the Hanns to start the fire (1/2 gallon or gallon), nor how it was disbursed on the floor, nor do we have detail orany description of how the lighter may have been used to ignite the gas, nor how long Wesley Hann waited before igniting the gas.

Onthe evidence available, I can not find, with any certainty, that a flash from ignition should have occurred in this instance and the generalopinion evidence to expect a flash burn, does not seriously undermine the truth of the statement. (Emphasis added.) [12] A difficulty with this analysis is that the trial judge clearly proceeded on the assumption that, in the absence of “certainty”, theevidence of the experts would be insufficient to contradict the Hanns’ written statements.

Taking this approach, he failed to consider theproper question which is whether, on the whole of the evidence, it was more likely than not that the cause of the fire was arson.

Factorsto be considered included: the evidence of the experts to the effect that the cause of the fire, its point of origin and the ignition sourcecould not be determined; that there was evidence suggesting that the fire resulted from an electrical malfunction; the experts’ opinionsthat the fire could not have been started as alleged in the statements without injury; the Hanns’ testimony; their statements to the policeofficer; evidence of motive, on the one hand, the poor condition of the building, but no evidence of financial difficulties with thebusiness; and evidence that additional insurance coverage had been obtained, but this was at the suggestion of the insurance agent tocover a larger inventory. [13] By failing to adopt the proper analytical approach in assessing the evidence, the trial judge erred in two ways.

First, he erred inconcluding that, in order to take account of the experts’ evidence that a “flash burn” would have occurred, it had to be established withcertainty. Second, he failed to take into account the experts’ evidence, which was clearly relevant and important, in assessing thetruthfulness of the statements and the evidence as a whole to ascertain whether Atlantic Insurance had established arson on a balance ofprobabilities. This constituted error in principle.

In the circumstances, the trial judge’s decision must be set aside. [14] Accordingly, I would allow the appeal and set aside the decision of the trial judge. A new trial is required because theevidentiary issues cannot be determined by means of this appeal. [15] With respect to costs, relying on Bay Bulls Sea Products Ltd. v. Insurance Corp. of Newfoundland Ltd., 2006 NLCA 56, 260Nfld. & P.E.I.R. 173, Performance Factory requested costs on a solicitor and client basis. In my view, this is not an appropriate situationin which to order costs on that basis.

In Bay Bulls, Cameron J.A., for the majority, reviewed the question of costs in an arson case. Among others, she referred to the following relevant decisions: [169] … In Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 , [2004] 1 S.C.R. 303, Arbour J. said at para. 26: In Young v. Young, (SCC), [1993] 4 S.C.R. 3, at p. 134, McLachlin J. (as she then was) for a majority of the Court heldthat solicitor-and-client costs ‘are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on thepart of one of the parties’.

An unsuccessful attempt to prove fraud or dishonesty on a balance of probabilities does not lead inexorably tothe conclusion that the unsuccessful party should be held liable for solicitor-and-client costs, since not all such attempts will be correctlyconsidered to amount to ‘reprehensible, scandalous or outrageous conduct’. However, allegations of fraud and dishonesty are serious andpotentially very damaging to those accused of deception.

When, as here, a party makes such allegations unsuccessfully at trial and withaccess to information sufficient to conclude that the other party was merely negligent and neither dishonest nor fraudulent (as Wilkin J.found), costs on a solicitor-and-client scale are appropriate: see, generally, M.M. Orkin, The Law of Costs (2nd ed. (loose-leaf)), at para.219.” [16] In the case now before this Court, given the statements which the police had, Atlantic Insurance had grounds on which to allegearson. This is not a case in which the insurer acted reprehensibly or irresponsibly.

Applying the approach adopted in Hamilton, solicitorand client costs are not warranted in this case. Rather, the circumstances are such that Performance Factory should receive its costs on aparty and party basis in this Court and in the Court below.

SUMMARY AND DISPOSITION [17] In

summary, I would allow the appeal, set aside the decision of the trial judge, and order a new trial. Performance Factory shallhave its costs on a party and party basis in this Court and in the Court below. ____________________________ B. G. Welsh J.A. I Concur with the Reasons of Welsh J.A. ______________________________ J. D. Green C.J.N.L.

Dissenting Reasons by Barry J.A. [18] The trial judge accepted a defence of arson and dismissed a claim for payment under an insurance policy following destructionof the appellant’s building by fire. In arriving at this result, the trial judge relied upon two documents, one signed and with pagesinitialed by the principal shareholder of the appellant, Michael Hann, and the other signed and initialed by his father, Wesley Hann. Inthe two documents, written by an interviewing police officer and dated October 25, 2000, the two Hanns purportedly confess to havingintentionally burnt the appellant’s building.

But at trial they alleged the documents were fabricated by the interviewing officer and donot accurately reflect what they said. The appellant submits the trial judge erred in giving any weight to the statements. BACKGROUND FACTS [19] The appellant operated a recreational vehicle dealership. In the late evening of October 19 or the early morning of October 20,2000, a fire started in its building at New-Wes-Valley. The fire was first detected by a passerby who saw flames coming through theroof near an electrical mast at approximately 1:00 a.m. on October 20th.

Michael Hann and his father testified they had been working atthe building doing general cleanup until 11:15 or 11:30 p.m. on October 19th and only became aware of the fire around 1:00 a.m. on the20th when advised by the individual who had spotted it. [20] The respondent denied payment under the policy on the same day the Hanns signed the confession documents. [21] Michael Hann said he signed the statement written by the police officer without reading it.

The document stated that he and hisfather had decided to burn the old building, which had sagging floors and other defects, to get money to build a new one on the same site,and that his father had started the fire by throwing gasoline into a corner of the building and using a lighter to ignite this. [22] The statement signed by Wesley Hann was to the same effect. Like Michael, he also denied saying what was set out in thedocument. Wesley testified he is unable to read or write except to sign his name.

He says the interviewing police officer did not readthe statement back to him and that he signed it because the officer said he “would be sent down the river” if he refused. [23] The interviewing police officer said Michael Hann confessed at 3:36 p.m. on the 25th after the officer lied and told him thepolice knew what had happened. This was after the officer had interviewed Wesley Hann at 2:56 and Wesley had denied any knowledgeof the cause of the fire. The officer said Wesley in a second interview commencing at 4:17 confessed after being told of Michael’sstatement.

The officer denied fabricating the documents and said each had been read back to the two men before they signed and affixedtheir initials. [24] Wesley Hann was acquitted at a criminal trial for arson after the trial judge concluded his confession did not meet the requiredtest of voluntariness. [25] Fire investigators could not determine the cause or point of origin of the fire.

They were unable to rule out that it may have hadan electrical origin. [26] Michael Hann’s wife, Tracy, the secretary-treasurer of the appellant, had arranged an increase of $250,000 in the insurancecoverage on contents from $350,000 to $600,000 on the day of the fire at the recommendation of their fire insurance agent who pointedto their increased inventory. [27] Scientific experts called at the trial all agreed that the fire could not have been ignited in the manner stated in the confessiondocuments since this would have resulted in a flashback burning of Wesley Hann.

The appellant argues this shows the statements do notset out what really must have occurred and supports its submission that the two statements must have been fabricated. The appellant alsochallenges the credibility of the interviewing officer by pointing to inconsistencies in his testimony regarding the time sequence in whichthe confessions were made. [28] The time sequence for the October 25th statements was set out in the findings of the judge presiding at the criminal trial ofWesley Hann, R. v. Hann (2002), (NL SC), 214 Nfld. & P.E.I.R. 286 (NLTD), as follows: • 2:53-3:20 p.m.

Exculpatory witness statement of Wesley Hann. • 3:36-4:04 p.m. Inculpatory statement of Michael Hann. • 4:17-4:43 Inculpatory statement of Wesley Hann. [29] The interviewing officer admitted he had obtained Michael Hann’s confession by lying to Michael about knowing all about howthe fire started. The judge at the criminal trial found that the interviewing officer’s testimony of having instructed other police officers at4:04 p.m. to arrest Wesley Hann conflicted with the other police officers’ testimony that they had arrested Wesley Hann before this, at3:35 p.m.

At that time, from the testimony of the interviewing officer, he had not even begun to write the statement of Michael Hann,which was begun at 3:36 p.m. and finished at 4:04 p.m. The criminal trial judge concluded this created “a real problem in relation to

time-lines”. [ 30 ] The criminal trial judge also found that it was “virtually impossible” for the interviewing officer to have had time to go through the rights to counsel, a primary caution, a secondary caution and an explanation of these legal requirements with Wesley Hann in the time the officer testified this had occurred. [ 31 ] At the civil trial the interviewing officer gave as an explanation of the time-lines problem the fact that he had requested the other officers to arrest Wesley Hann before the interview with Michael had been completed.

The interviewing officer said he had given these instructions after Michael had “indicated” he was confessing before the officer began writing. [ 32 ] The appellant points out that how Michael “indicated” this was not recorded on the statement nor was the officer’s preliminary comment to Michael that the officer knew how the fire had started.

Before the civil trial, the interviewing officer’s position was that he had written down everything said in the interview. [ 33 ] The appellant submits that this contradictory testimony of the interviewing officer establishes the trial judge erred in the present case when he stated the interviewing officer’s testimony had not been shaken on cross-examination.

THE TRIAL DECISION [ 34 ] At the civil trial, the trial judge provisionally entered the two statements, saying that he would determine their reliability after hearing all the evidence. [ 35 ] The trial judge rejected the allegations of the respondent that the appellant was in financial difficulty and that the motive for setting the fire was to escape from an impending insolvency.

The trial judge found no reliable basis for these allegations and noted they were not supported by the appellant’s financial records. [ 36 ] On the question of whether the reliability of the confession documents was completely undermined by the scientific evidence of flashback, the trial judge rejected the testimony of the last expert retained by the respondent just before the civil trial, who provided an opinion that Wesley Hann had ignited the fire by a “time delay” incendiary device. The judge noted there was no physical evidence to support this theory and found the expert lacked objectivity and impartiality.

But the judge found that any question raised by the scientific evidence regarding the implausibility of ignition by a lighter was not enough to seriously undermine the reliability of the statements. He said he arrived at this conclusion because of the lack of information regarding: - the amount of gas used (1/2 gallon or a gallon); - the method of dispersal; - how the lighter was used; or - how long Wesley Hann waited before igniting the gas. [ 37 ] The trial judge found that the appellant’s allegation of fabrication by the police was based upon nothing but “conjecture” and the denials by the Hanns.

He noted the weakness and implausibility of Michael Hann’s explanation that he signed without reading. The judge also rejected Wesley Hann’s explanation of initialing because of the threat of being “sent down the river,” finding it unconvincing that Wesley, who had been a fisherman most of his life, would suddenly be intimidated into signing a confession in the manner described. [ 38 ] The trial judge found that both Michael and Wesley would have been aware that the purpose of signing and initialing the documents was to confirm the contents.

He found an “air of authenticity” to the confessions after comparing the “text and use of language” in the documents with the Hann’s “text and use of expression and language” during their viva voce evidence at trial and in their previous exculpatory statements.

The trial judge also noted that if the confessions were fabricated one would expect the police officer to have outlined in the statement a motive consistent with the investigation to that date, which suggested the appellant was in financial trouble, instead of the motive outlined in the statement (the age and poor condition of the building). [ 39 ] The trial judge did not deal in his written decision with the appellant’s submissions about the questionable time-line given by the police officer regarding the commencement of the statements.

He had noted in the course of the trial that while the time-line was “squeaky” the police officer’s testimony on timing could be supported. [ 40 ] The appellant submits the trial judge erred in finding that the appellant offered nothing beyond conjecture and the denials of the Hanns to support the conclusion that the confessions were falsified by the police officer.

The appellant argues this ignores the scientific evidence regarding the impossibility without flashback burns of ignition by a lighter as described in the statements. [ 41 ] The appellant also submits the trial judge erred in finding the police officer’s evidence was not shaken on cross-examination when one considers the inconsistent approach he set out regarding the timing of the confessions. THE STANDARD OF REVIEW [ 42 ] The parties agree that the appropriate standards of review are as set out in Cleary v. Courtney , 2010 NLCA 46 , 299 Nfld. & P.E.I.R. 85.

But they differ on whether the alleged errors involve questions of fact or law. In Cleary , Cameron J.A. stated for the Court,

at paragraph 15: [15] The standards of review applied by this Court were discussed in Ring v. Canada et al., 2010 NLCA 20, at para. 6: The standard of review applied by an appellate court depends upon the nature of the matter being reviewed. A pure question of law isreviewed on a standard of correctness and an appellate court is free to replace the opinion of the trial judge with its own. Findings of fact,on the other hand, cannot be reversed unless the trial judge has made a palpable and overriding error.

A determination of whether a legalstandard was met involves the application of a legal standard to a set of facts which is a question of mixed fact and law. A question ofmixed fact and law is subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricableerror in principle with respect to the characterization of the standard or its application, in which case the error may amount to an error inlaw and the applicable standard is correctness. These principles are well established: Housen v. Nikolaisen, 2002 SCC 33 ,[2002] 2 S.C.R. 235.

Findings of credibility are part of the fact finding process and are subject to the same standard of review, as are inferences drawn fromthe facts. If inferences drawn by the trial judge are reasonable, an appellate court should not intervene just because other inferencescould also have been reasonably drawn: H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 at para. 74.

In H.L. v.Canada, paras. 55-56, Fish J. said: “Palpable and overriding error” is at once an elegant and expressive description of the entrenched and generally applicable standard ofappellate review of the findings of fact at trial. But it should not be thought to displace alternative formulations of the governingstandard. In Housen, for example, the majority … and the minority … agreed that inferences of fact at trial may be set aside on appeal ifthey are “clearly wrong”.

Both expressions encapsulate the same principle: an appellate court will not interfere with the trial judge’sfindings of fact unless it can plainly identify the imputed error, and that error is shown to have affected the result.

In my respectful view, the test is met as well where the trial judge’s findings of fact can properly be characterized as “unreasonable” or“unsupported by the evidence”. [43] The parties agree that the trial judge in the present case did adopt the correct legal principle, namely, that in all civil cases thetrial judge must scrutinize all the relevant evidence with care to determine whether it is more likely than not that an alleged eventoccurred: see the recent statement of this in F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 49.

But the appellant submitsthat a question of law arises regarding whether the trial judge, by ignoring certain relevant evidence (the scientific evidence andchallenges to the interviewing officer’s credibility), violated this principle and that, therefore, the proper standard of review in thepresent case is correctness. [44] The respondent submits that whether the trial judge’s findings of fact and credibility are supported by the evidence is a questionof fact or mixed law and fact and the standard of review is palpable and overriding error. ISSUES [45] Two issues arise: (

i) Did the finding that the Hanns confessed to starting the fire involve a question of fact reviewable only for palpable and overridingerror or a question of law or mixed fact and law reviewable on the basis of correctness? (ii) Was the finding that the Hanns had truthfully confessed to starting the fire a palpable and overriding error or incorrect (whicheverapplied) in the circumstances. THE LAW AND ANALYSIS [46] On the general burden of proof, the parties agree that there is only one civil standard of proof at common law and that is proofon a balance of probabilities, as confirmed by F.H. v. McDougall.

In the present case the trial judge correctly concluded that, havingraised the defence of arson, the respondent had the onus of proving on a balance of probabilities that Michael Hann and Wesley Hannhad intentionally started the fire that destroyed the appellant’s property. [47] The trial judge also correctly held that admissions by parties in civil actions are not subject to a voluntariness test before theirentry into evidence but are properly entered as admissions against interest with the trier of fact determining the weight to be attached tothem in the context of considering all the relevant evidence. [48] The appellant, relying upon Sweeney et al v.

Zurich Insurance Co. et al (1999), (NL SC), 175 Nfld. &P.E.I.R. 281 (NFCA), at para. 40, argues that in the absence of direct evidence of the fire being deliberately set by the Hanns, the insurerhas to eliminate, on the whole of the evidence, all other reasonably possible causes. The appellant submits the trial judge put too muchemphasis on the suggestion that the statements were falsified. [49] This submission ignores the fact that if the statements are true they provide strong direct evidence of the cause of the fire.

Thetrial judge made no error in emphasizing the importance of the confessions and the direct evidence there set out of how the fire started. If the trial judge properly considered all the relevant evidence and did not err in concluding that the Hanns had made the confessions, thestatements have great weight. The respondent insurer no longer has to rely upon circumstantial evidence and opinion evidence to meetits onus of proof.

Instead the respondent can point to this direct evidence of two eyewitnesses to tip the balance of probabilities in itsfavour, despite the inconclusive evidence regarding the point of origin of the fire, the manner of ignition and the fact that possible causesother than arson could not be ruled out.

[50] In assessing the validity of the statements, the trial judge properly considered that Michael and Wesley Hann had initialed andsigned them and made no error in finding that they knew this amounted to confirmation of the contents since they had previously signedother legal documents for this purpose. [51] The trial judge also was entitled to consider the explanations provided by the Hanns for signing and to assess their credibility inlight of these explanations.

The trial judge properly noted that it was improbable the police officer would have falsified the statementsand then offered them for review and reading to the party whose signature and initials were required, hoping not to be detected in hisalleged scheme to obtain false confessions. [52] The appellant’s case before this Court rests upon its submissions that, first, the trial judge ignored significant scientific evidenceregarding flashback in assessing the reliability of the Hanns’ statements and, second, that, in assessing the officer’s credibility regardingwhat the Hanns had said, the trial judge ignored questionable responses of the interviewing officer on cross-examination regarding thetime-line of the Hanns’ confessions. [53] The Supreme Court in R. v.

Morin, (SCC), [1992] 3 S.C.R. 286, accepted that a failure to consider all relevantevidence may amount to an error of law.

At paragraph 21, Sopinka J. for the Court noted, however, that a trial judge has no obligation torecord all or any specific part of the process of deliberation on the facts: A trial judge must consider all of the evidence in relation to the ultimate issue, but unless the reasons demonstrate that this was not donethe failure to record the fact of it having been done is not a proper basis for concluding that there was an error in law in this respect. [54] The majority in Housen, at paragraphs 27 and 28, explained how a failure to consider certain evidence can lead to an error ofpure law for purposes of determining the applicable standard of review: [27] Once it has been determined that a matter being reviewed involves the application of a legal standard to a set of facts, and isthus a question of mixed fact and law, then the appropriate standard of review must be determined and applied.

Given the differentstandards of review applicable to questions of law and questions of fact, it is often difficult to determine what the applicable standard ofreview is. In Southam,[1] at para. 39, this Court illustrated how an error on a question of mixed fact and law can amount to a pure errorof law subject to the correctness standard: … if a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision-maker considersonly A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C.

If the correct testrequires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law. Therefore, what appears to be a question of mixed fact and law, upon further reflection, can actually be an error of pure law. [28] However, where the error does not amount to an error of law, a higher standard is mandated.

Where the trier of fact hasconsidered all the evidence that the law requires him or her to consider and still comes to the wrong conclusion, then this amounts to anerror of mixed law and fact and is subject to a more stringent standard of review … [55] I do not accept the appellant’s submission that errors of law arise from the trial judge’s reasons in the present case. It is a ruleof law that all relevant evidence should be considered in determining the issues arising. But determining whether this rule has beenviolated involves the application of the rule to the facts of the case.

And whether the trial judge erred in the process of application is aquestion of mixed law and fact subject to review on the basis of palpable and overriding error unless the trial judge clearly made someextricable error in principle with respect to the characterization of the rule or its application. See Cleary. [56] I have been shown no such extricable error in principle here. As noted above, the trial judge adopted the proper principle fromMcDougall. The appellant’s submission alleges an error in its application.

This is not a case, such as described in Southam and Housen,where the trial judge in effect applied the wrong law by failing to consider all the evidence the law requires be considered. The trialjudge expressly considered the scientific evidence. The appellant’s complaint is that he did not accord it sufficient weight. That is afinding of fact and entitled to deference.

An appeal court may substitute its own view of the evidence and draw its own inferences offact only “where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearlywrong, unreasonable or unsupported by the evidence.” See H.L. v. Canada, at para. 4 [Emphasis in original.] [57] The trial judge was responsive to the case’s live issues and the parties’ key arguments. See F.H. v. McDougall, at para. 95. Hejustified the final result by reasonable findings of fact and credibility which were supported by the evidence.

He compared thecredibility of the interviewing officer and that of the Hanns. He did not expressly refer in his reasons to the time-line problems raised oncross-examination of the officer regarding when Michael Hann confessed and when Wesley Hann was arrested. But a failure to make anexplicit finding on such a subordinate element does not amount to palpable and overriding error. In R. v.

R.E.M., 2008 SCC 51, [2008] 3S.C.R. 3, at para. 20, the Supreme Court of Canada confirmed that trial judges need not detail their findings on each piece of evidence orcontroverted fact, “so long as the findings linking the evidence to the verdict can be logically discerned.” See further on the sufficiencyof reasons Gallant v. Brake-Patten, 2012 NLCA 23, 321 Nfld. & P.E.I.R. 77 and the authorities there discussed.

In the course of cross-examination the trial judge in the present case had made clear that he believed the time-line presented by the interviewing officer waspossible although tight (“squeaky” in the trial judge’s words: see, vol. 1, p. 180, of the civil trial transcript).

He made clear hisconclusion that the improbable testimony of the Hanns regarding why they signed the statements outweighed any problems in theinterviewing officer’s testimony and satisfied him of the credibility of the police officer on a balance of probabilities. [58] The trial judge acknowledged that the scientific evidence regarding probable flashback gave some weight to the appellant’sargument that the contents of the statements were not true (which in turn gave some support to the Hanns’ allegations that they had notstated what the interviewing officer had written).

But the trial judge concluded he had insufficient evidence to establish that a flashbackfrom ignition should have occurred in the circumstances and, that, therefore, the general opinion evidence to expect a flash burn did notseriously undermine the reliability of the statements. In effect, the trial judge concluded the Hanns’ signatures on the statementsconfirmed they had confessed as set out in the documents and any questions raised by the stated method of ignition were not sufficient tosignificantly undermine the effect of these signed confessions.

I do not find any palpable and overriding error in this finding and, in

accordance with Cleary and H.L. , I defer to the trial judge on his assessment of credibility.

SUMMARY AND DISPOSITION [ 59 ] In

summary: (

i) Underlying the appellant’s submissions are findings of fact and credibility by the trial judge regarding which this Court must show deference and intervene only on finding palpable and overriding error.

This Court should not overturn a decision merely because it believes a trial judge has failed to record all or a specific part of the process of deliberation on the facts. (ii) The trial judge made no palpable and overriding error in concluding the scientific evidence regarding flashback did not significantly undermine the reliability of the confession statements nor in concluding that the interviewing officer was credible and the Hanns were not. (iii) I would dismiss the appeal with party and party costs to the respondent. ______________________________ L. D. Barry J.A.