Docket: 1676 Lancer Enterprises Ltd. Appellant (Plaintiff) - v. -, 2011 SKCA 28

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 28 Date: 20110309 Between: Docket: 1676 Lancer Enterprises Ltd. Appellant (Plaintiff) - and - Saskatchewan Government Insurance, operating under the name, trade and style of SGI CANADA Respondent (Defendant) Coram: Lane, Richards and Ottenbreit JJ.A. Counsel:

Gary Zabos, Q.C. for the Appellant (Plaintiff) Allan McLeod for the Respondent (Defendant) Appeal: From: 2008 SKQB 346 Heard: October 21, 2010 Disposition: Appeal dismissed Written Reasons: March 9, 2011 By: The Honourable Mr. Justice Lane In Concurrence: The Honourable Mr. Justice Richards The Honourable Mr. Justice Ottenbreit Lane J.A. I. Introduction [ 1 ] On February 5, 2006, a building and contents in Biggar, Saskatchewan owned by the Appellant and insured under a policy issued by the Respondent were totally destroyed by fire.

The Appellant commenced an action against the Respondent when the insurer refused to pay under the policy of insurance. The Respondent defended the action on the basis the fire was deliberately set by the Appellant or one of its directors. After a trial held in January 2008, the trial judge found the circumstantial evidence supported the Respondent’s position the fire was deliberately set and dismissed the Appellant’s action. This is an appeal from that decision. [ 2 ] The Appellant summarizes the issues as follows: 1.

Did the learned trial judge err in holding that where the evidence does not establish a fire was an intentionally set fire, if motive and opportunity are established, arson can be held to have been committed by an insured? 2. Did the learned trial judge err in rejecting the Fire Chief’s eyewitness evidence that the fire could not have started in the Oil Room? 3. Did the learned trial judge err in holding that the Respondent had established a financial motive for arson, and/or make a palpable and overriding error in his treatment of the evidence on financial motive and on opportunity? 4.

Did the learned trial judge err in rejecting his assessment of damages in rejecting the Appellant’s appraisal as hypothetical, in holding certain built in equipment were “Contents” (chattels) under the policy, and in holding that damages could not be recovered for breach of the insurance policy? [ 3 ] I will approach these issues firstly dealing with the threshold issue which is whether the trial judge correctly applied the test as to what an insurer must prove where it raises arson as a defence and, secondly, whether the trial judge committed a palpable and overriding error in making his factual findings regarding motive, opportunity and credibility.

Given my conclusions, it will not be necessary for me to deal with issue 4, above. II. Background [ 4 ] The trial judge set out the following facts by way of background: [ 5 ] The fire occurred in the early morning of Sunday, February 5, 2006. The call to the fire department from a passerby was at 3:21 a.m. The fire destroyed the building and contents of a business known as Race Trac Gas on Main Street, in Biggar, Saskatchewan. The business was owned and operated by Lancer Enterprises Ltd. (Lancer).

The insurer, Saskatchewan Government Insurance (SGI), claims that the fire was deliberately set by the manager of the business, Dale Buxton, who was at the premises less than an hour before the fire was reported, about four hours after the business had closed for the night at about 11:00 p.m. on Saturday, February 4.

[6] The main part of the building was built over 50 years ago. The exterior walls were of concrete block construction about two-thirds up from the ground; the upper one-third was wood. An addition all of wood was built on the west side about 15 years ago. Therewere many changes and renovations over the years. A copy of the main floor plan approximately as it was at the time of the fire isappended to this judgment. There was storage space on the second level but no stair access. The partial basement was only used forwashrooms, furnace, water heater, water softener and storage.

There were four internal security cameras, but there is no evidence thatany of them was operative when the fire started or whether there was any way to monitor or retrieve information from them, or fromwhat was left of them, after the fire. The electrical wiring was above the ceiling. There were four electrical panels, one in the “musicroom”, one in a storage area accessible from what is referred to as the “oil room” adjacent to the service bay, one in the kitchen and onenear the walk-in cooler in the lunch counter/confectionary area. The various renovations did not include much electrical work.

Therewere extension cords in use, especially in the “oil room”, on the south side of the original building to the west of the vehicle service bay. There was also a power bar in the oil room. Sometimes breakers would trip when the electrical load was high.

Due to the extensivedamage it was not practical or safe to closely inspect the electrical installations after the fire to determine with any degree of certaintywhether an electrical failure may have caused or contributed to it. [7] When Lancer acquired the property and business in the late 1980s it was a gas station and automobile service facility common atthe time in towns such as Biggar. By the time it burned the building and the business had evolved significantly.

There was a gas bar, aservice bay with a hoist for oil changes and small automotive repairs, a convenience store, a coffee bar, a food take-out businessinvolving both pizza and sub-sandwich preparation, a movie rental business and facilities for bottled water distribution. There was afenced exterior compound for the pick-up and drop-off of propane tanks, but they were not filled on site.

There was also a room referredto as the “music room”, in which there was recording equipment and storage space for electronic equipment which Dale Buxton used foroff-site work as a DJ. [8] Throughout the period of Lancer’s ownership, its corporate shares were owned 40 percent by Dale Buxton, 40 percent by hisspouse, Trudy Buxton, and 10 percent by each of his parents, Bruce Buxton and Deanna Buxton. At the time of the fire Dale Buxton wasthe overall manager.

He actively participated in the day-to-day management and operation of the various ventures carried on at the site.He was also a member of the Biggar town council, on which he had served for several terms. Trudy Buxton was employed elsewhere. Their two teenage daughters worked part-time at Race Trac Gas. The senior Buxtons, who were otherwise retired, were also involved. They attended at the business premises almost daily to look after the nightly cash-out and the closing of the premises. They were notpaid for their work.

According to Bruce Buxton they wanted to give Dale Buxton some respite from his daily duties, which obviouslyinvolved extremely long work days. The senior Buxtons had in 2002, when Lancer was in financial difficulty, borrowed money toadvance to Lancer, mortgaging their residence as security. In general, Lancer’s business was never very profitable. [5] There are other facts of significance which will be dealt with during the course of this judgment.

In particular, they relate to the trialjudge’s findings the director of the Appellant corporation, Dale Buxton, had the opportunity and motivation to start the fire and was notcredible. The Appellant argues the trial judge made palpable and overriding error in making these findings. I will summarize the factsrelevant to these grounds of appeal in my analysis of the issues of motive, opportunity and credibility. III. Position of the Parties A.

Issue #1 [6] As the Appellant argues, the threshold issue is whether the trial judge correctly applied the test as to what an insurer must provewhere it raises arson as a defence. The Appellant contends the insurer must first prove on a balance of probabilities the fire wasincendiary, that is, deliberately set. The Appellant argues the insurer must eliminate all possible accidental or natural causes and, if itfails to do so, its case fails.

It argues the Court is only permitted to consider evidence tending to establish motive, opportunity andcredibility if the insurer has first eliminated natural and accidental causes of the fire. In other words, it is not until the insurer haseliminated the reasonable possibility of a natural or accidental fire before the evidence of motive, opportunity and credibility can beconsidered. In support of its position, the Appellant relies on the decision of the Newfoundland and Labrador Court of Appeal inParkway Enterprises Ltd. v. Zurich Insurance Co., (NL SC), 1999 CarswellNfld 153, 175 Nfld. & P.E.I.R. 281(Nfld.

C.A.). [7] The Respondent contends that, in considering whether the insurer has proven on a balance of probabilities the fire was intentionallyset or arranged to be set by the insured, the trial judge must look at the totality of the evidence and may draw the inference the incendiaryorigin of the fire from inculpatory evidence linking, in this case, Buxton to the fire. The Respondent relies, in support, on the criminallaw decision of the Supreme Court of Canada in R. v. Monteleone, (SCC), [1987] 2 S.C.R. 154. It argues the trial judgeapplied the correct legal test.

The Respondent’s position is that the trial judge based his conclusion the fire was intentionally set byBuxton on findings of fact and reasonable inferences drawn from those factual findings. B.

Issue #2 [8] Regarding the challenged factual findings, the Appellant contends the trial judge does not mention evidence as to the origin of thefire in his judgment and says the trial judge committed a palpable and overriding error by either overlooking evidence or failing to take abalanced view of the evidence tending to refute motive, and further, the trial judge failed to consider exculpatory evidence when hefound that the director was not credible. The Appellant alleges the trial judge’s unbalanced view of the evidence drove him to makeincorrect findings regarding opportunity.

[9] On this issue of the challenged factual findings, the Respondent argues it was open to the trial judge on the evidence to come to theconclusions he did and the trial judge made no palpable or overriding error. [10] Both parties agree on the appropriate standard of review, that the Appellant must demonstrate palpable and overriding error toenable this Court to overturn findings of fact, and that the trial judge must apply the applicable legal test correctly (see Housen v.Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Valley Beef Co-Operative Ltd. v.

Farm Credit Corp., 2002 SKCA 100, 218 D.L.R. (4th)86; and H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401). IV. Analysis A. Issue #1 [11] In determining the threshold issue of whether the trial judge applied the correct test for proof of the defence of arson, the startingpoint is a consideration of the Supreme Court of Canada decision in R. v. Monteleone.

The second step is to determine whetherMonteleone applies in the civil context. [12] In Monteleone, the trial judge directed the jury to return an acquittal verdict because the fire inspector, while of the view the firewas deliberately set, could not determine the actual cause of the fire. [13] On appeal to the Ontario Court of Appeal (R. v.

Monteleone (1982), (ON CA), 137 D.L.R. (3d) 243),Lacourciere J.A. acknowledged the expert evidence did not afford evidence of the unlawful setting of the fire and said, “taken bythemselves, the findings of Inspector MacLean could at best support the conclusion that the origin of the fire was unexplained.” However, later he said, at p. 493: In most prosecutions for arson, the Crown must depend on circumstantial evidence.

The circumstances must be sufficient to excludeevery reasonable hypothesis other than a wilful and intentional burning in order to rebut the presumption that the burning was ofaccidental or natural origin. However, the facts and circumstances which tend to prove the incendiary origin of a fire are often inter-woven, as in the present case, with other facts and circumstances which tend to connect the accused with the crime such as the presenceof motive, and the clear opportunity of the accused together with his subsequent incriminatory statements. The Supreme Court agreed with the Court of Appeal.

The Supreme Court said, at pp. 163-164: As has already been mentioned, the appellant argued that there was no evidence as to the nature of the fire and, therefore, thecommission of a crime. Evidence on other questions which would ordinarily be relevant has no evidentiary value and provides noevidence in the absence of proof of the incendiary nature of the fire. It is true, of course, that neither the trial judge nor the Court ofAppeal considered that the evidence of the fire investigation, by itself, offered any evidence as to the nature of the fire.

At best, it wasconsidered by the Court of Appeal to leave the nature or cause of the fire unexplained. May then evidence of other matters – motive,opportunity, financial difficulty and possibility of gain – be considered as evidence going to prove the crime of arson? The position of the Court of Appeal is supported in the authorities. The courts have frequently recognized the fact that the corpusdelicti, that is, the act which constitutes the crime, in this case the setting of the fire, may be proved by circumstantial evidence. Thissubject is dealt with at

Chapter 17, and following chapters, of McWilliams, Canadian Criminal Evidence (2nd ed. 1984). At page 541,the author refers to the words of Wills, An Essay on the Principles of the Circumstantial Evidence (6th ed. 1912), at p. 326: It is clearly established law that it is not necessary that the corpus delicti should be proved by direct and positive evidence, and itwould be most unreasonable to require such evidence.

Crimes, and especially those of the worst kinds, are naturally committed atchosen times, and in darkness and secrecy; and human tribunals must act upon such indications as the circumstances of the case present…. In R. v. Girvin (1911), (AB CA), 3 Alta. L.R. 387 (S.C. en banc), Beck J. recognized the application of this principle tothe crime of arson. He said, at p. 398: [T]here is no proof here of corpus delicti, that is, that the cause of the fire was otherwise than accidental.

Fires occurring accidentallyare common, and any given fire must be assumed to have been accidental until evidence is adduced of intention ….No doubt, theevidence of the corpus delicti and the evidence of the guilt of an accused may often be more or less inseparable, and that is quiteproperly suggested as the case here. [14] In the appeal before us, the Appellant’s position is essentially that advanced unsuccessfully by the Appellant in Monteleone as setout at p. 162: Turning now to the case at bar, the Appellant does not dispute the validity of the Shephard test. As I understand the principal

argument advanced for the appellant, it is that there was no evidence as to the cause of the fire. It is asserted that the evidence of fireinspector McLean does not afford the basis for any finding that the fire was of an incendiary origin. The most that can be made of it isthat the cause of the fire is unexplained. This proposition is vital to the appellant's argument and, in his view, is decisive. If there is noevidence of an incendiary origin for the fire, there is no evidence of the commission of a crime.

Other matters may be shown in evidence,there may be evidence of opportunity or of motive, or of financial problems, or of hope of profit from the fire, and there may be othersuspicious factors but, in the absence of evidence of the commission of a crime, they relate to no criminal conduct and are themselves noevidence of criminal conduct.

It was said to be error on the part of the Court of Appeal to consider what could be suspiciouscircumstances in the absence of a finding of evidence of the commission of a crime. [My emphasis] [15] Monteleone makes it clear that, in a criminal case of arson, evidence tending to establish identity, such as motive and opportunity,can be considered as evidence going to prove the incendiary nature of the fire when arson cannot be proved by direct evidence. Thequestion then is, as stated above, does Monteleone apply in the civil context? [16] The Appellant relies on the

interpretation of the reasoning in Monteleone as set out by the majority in Parkway, supra. In that case,the Chief Justice, Steele J.A. concurring, states he is relying on Monteleone, supra, when he says: [38] Ideally, direct evidence of the arson would suffice. Reliable direct evidence of the deliberate setting of the fire, i.e. of the very actwhich constitutes the crime would obviously be conclusive.

However, such evidence is rarely available because crimes of that nature areusually committed at chosen times under the cloud of secrecy or, as counsel for the insurers' in this appeal aptly puts it, "under the cloakof darkness". Citing this reality, McIntyre, J., in R. v. Monteleone, (SCC), [1987] 2 S.C.R. 154; 78 N.R. 377; 23 O.A.C.241, speaking on the court's behalf at p. 166, held that the incendiary origin of a fire could be inferred from inculpatory circumstantialevidence sufficient to link the accused to the fire.

The judgment goes on to indicate that motive and opportunity fall within the ambit ofrelevant circumstantial evidence. It is recognized that Monteleone was dealing with proof of arson in the context of criminal liability.

Itfollows, however, if circumstantial evidence can be accepted in proof of the criminal standard of guilt beyond reasonable doubt, it mustequally be receivable in assessing whether the civil preponderance of probabilities, albeit to a high degree required to establish theincendiary origin of a fire, has been met. [39] At the same time, if the standard of proof of arson is to be held to the high degree of probability which the law requires,circumstantial evidence has to be received with watchful caution, and its weight in the circumstances obtaining carefully evaluated.

Thisis because of the inherent hazards and risk of relying on circumstantial evidence, stemming from indirect probative forces. This potentialfragility has been traditionally recognized by the law. For that reason, a measure of circumspection is essential before drawingconclusions from such evidence that fires have been deliberately set.

The Chief Justice continued: [40] Thus, an insurer facing the task of discharging its burden of proving high probability of arson will usually have to tackle that taskthrough circumstantial evidence, which the very law, exacting that high standard of proof, urges to be received warily. That standard canonly be met by such evidence which, when taken as a whole, eliminates any reasonably probable cause of the fire other than arson. Thisis the well-settled safety net for reliance on circumstantial evidence to establish proof of arson in the civil context.

If arson may only beestablished through indirect evidence, and the high standard of proof is to be maintained, it would appear essential that thesefundamental criteria of consistency and reliability be met. [41] Circumstantial evidence which may serve to brand an insured as an arsonist falls into four categories, viz: evidence relating to thefire's nature and cause; motive; opportunity; and, credibility of the insured's version of events. The first of these may be viewed as thethreshold requirement essential to maintaining an arson defence.

Indeed, it is difficult to perceive how proof of high probability of a fire'sincendiary origin can be said to exist if forensic evidence fails to eliminate all reasonably probable fortuitous, accidental or naturalcauses. Without such causes being eliminated, it is hard to envisage how an insurer might be considered to have discharged its burden ofeliminating any reasonably probable cause of the fire other than arson.

Without evidence of such probative force, it may hardly beconcluded that a high degree of probability of incendiarism has been proven. [42] It should not be inferred that the foregoing reasoning is discounting the probative value of motive, opportunity or the insured'scredibility, as gleaned from his or her statements made outside of court or from evidence adduced on his or her behalf within it.However, in the final analysis, this type of evidence only can serve to point the finger of suspicion towards the insured as the perpetratorof a fire.

Such suspicion may well bear high probative value if all probable causes of accidental, fortuitous or natural ignition have beendispelled, and the fire's cause goes unexplained. If, on the other hand, the evidence is insufficient to rule out the reasonable probability ofsuch other causes, it can hardly be maintained that a high likelihood exists that arson was perpetrated.

In such a situation, the value ofevidence pointing to the insured as the perpetrator is rendered problematical, to say the least, and the high standard that the law exacts inproof of arson cannot be viewed as discharged. [43] For the foregoing reasons, proof that any conclusion other than arson would be inconsistent with the evidence through theelimination of any other reasonably probable fortuitous or accidental cause must be the starting point or threshold for any insurer seekingto discharge its burden of establishing the high probability of incendiary origin of a fire.

After all, it would be a futile exercise to adduceevidence calculated to prove the insured was the perpetrator of a fire if it has not been demonstrated to the standard required by law thatincendiarism was perpetrated. Accordingly, an insurer may not logically be considered to have passed the threshold or starting gate inmounting a defence of arson if it cannot demonstrate on the whole of the evidence that reasonably probable fortuitous or accidentalcauses are eliminated. This must surely be considered the sine qua non to an arson defence. [emphasis added by Appellant]

[17] The Appellant reads this decision as standing for the proposition that an insurer must first prove an incendiary fire had been setbefore the Court can proceed to consider “who did it?” [18] Any

interpretation of the Parkway test, however, must be looked at from the perspective the majority in Parkway saw its conclusionas compatible with Monteleone. In my view, however, the “threshold requirement,” referred to by the Court in Parkway, is not asonerous as the Appellant claims. In a later case, the same Court in Bay Bulls Sea Products Ltd. v. Insurance Corp. of Newfoundland Ltd.,2006 NLCA 56, 260 Nfld. & P.E.I.R. 173 said the following regarding the Parkway test: [57] …[I]t is clear that the [insurers] do not have to prove every imaginable basis for fire is eliminated.

For example, the law does notrequire that the [insurers] demonstrate that the fire was not started as a result of a lightning strike in the absence of something in thecircumstances which suggests that lightning might be a source of the fire. [19] In my view, the Appellant’s

interpretation of Parkway cannot be correct because there cannot be a higher standard of proof in acivil case where arson must be proved than in a criminal case. This conclusion is supported by the reasoning of the Ontario Court ofAppeal in a decision which preceded Parkway, Rizzo v. Hanover Insurance Co. (1993), (ON CA), 103 D.L.R. (4th)577 (Ont. C.A.). [20] Similar to this case, the insurer in Rizzo raised arson as a defence to an insured’s claim. The Court of Appeal was required toconsider whether the trial judge erred in his treatment of the evidence of the insured’s opportunity to set the fire.

The Court first dealtwith the judicially considered phrase “exclusive opportunity” and said the following at p. 583: …[O]n the current state of the criminal law, “exclusive opportunity” is not an indispensable requirement of proof of arson in cases (likethe present case) where evidence of opportunity is accompanied by other inculpatory evidence. If that is true in the criminal law context,it must a fortiori be true in the civil law context. [My emphasis] [21] The Court next dealt with the phrase “appropriate opportunity” (a term not of concern in this case before us).

In dealing with thatissue, the Court, at p. 583, ruled all inculpatory evidence may be considered in determining whether the insurer has proven the defence ofarson in a civil case: It will be recalled that the evidence in the present case indicated that Rizzo did not have the exclusive or the last opportunity to set thefire. It may have been this that led Farley J. – who found arson at Rizzo’s behest to be “the only logical conclusion to be drawn from thefacts” as he found them – to coin the phrase “appropriate opportunity”.

For my part, I find the use of such a modifier unhelpful, for itdiverts the trier of fact from the task at hand. I see no reason why, in cases (like the present case) where evidence of opportunity isaccompanied by other inculpatory evidence, the assessment of the evidence of opportunity should be complicated by the employment ofqualifying adjectives.

In such cases, the proper inquiry should be whether, on all of the evidence inculpatory of the insured, includingmotive and opportunity, the insurer has proven the defence of arson according to the standard of proof appropriate to the establishment ofthat defence in a civil case. [My emphasis] [22] Rizzo therefore stands for these related propositions: firstly, if proof of a particular issue is not necessary to prove arson in thecriminal context, the same must be true in the civil context.

Secondly, there is no threshold requirement the insurer must prove anincendiary fire before the Court may proceed to consider evidence relating to opportunity, motive and credibility. Rather, the defence ofarson will be proved when the totality of the evidence establishes arson on a balance of probabilities. [23] The Ontario Court of Appeal has since reaffirmed this statement of principle in Bezdziecki v. Allstate Insurance Co. of Canada,[1998] O.J. No. 4853 (QL) (Ont. C.A.). [24] Finally, I note that Cameron J.A. in Parkway, although concurring in the result, actually disagreed with the majority’s approach.

She adopted the Ontario approach in Rizzo and said, quoting Rizzo, “the proper inquiry should be whether, on all of the evidenceinculpatory of the insured, including motive and opportunity, the insurer has proven the defence of arson.” In my view, the Ontarioposition comports with Monteleone and should be followed. Thus, regardless of which

interpretation of Parkway governs, theAppellant’s argument must fail in light of the Supreme Court of Canada’s decision in Monteleone and the Ontario Court of Appeal’sdecision in Rizzo. [25] I therefore am of the view the trial judge made no error of law in his approach; he was required to consider all of the evidence inorder to decide whether the fire was deliberately set by Buxton. The trial judge came to the conclusion “there is no way of knowing bydirect evidence precisely what caused it [the fire] or how it was caused” (para. 17 of the judgment).

In order to come to that conclusion,he extensively reviewed the expert qualified by each party and the testimony of the Fire Chief. The Respondent’s expert called the fire“suspicious” while the Appellant’s expert testified he believed the fire could not have started in the room the Respondent’s expert said it

did and an accidental electrical fire could not be ruled out. On all of the contradictory evidence and speculation as to the origin of the fire, it cannot be said the trial judge committed a palpable and overriding error in reaching the conclusion he did. B. Issue #2 [ 26 ] I now turn to the Appellant’s arguments the trial judge made palpable and overriding errors in his factual findings that Buxton had motive and opportunity to set the fire and was not credible. At this point, evidence not mentioned earlier will be discussed.

I will first consider the issue of motive because, as the Appellant argues, the trial judge’s errors in finding Buxton had motive coloured his view of the evidence which in turn led to errors in his assessment of the issues of opportunity and credibility. [ 27 ] The Appellant contends the trial judge failed to take a balanced view of the evidence. The trial judge, referring to Buxton’s testimony, said Buxton “described the financial position of Lancer as between horrible and mediocre. He chose the word ‘horrible’. He is an articulate person.

There is abundant objective information to support such an assessment” (para. 24 of the judgment). The Appellant argues there is no such evidence that Buxton described the company’s financial position as “horrible” and “mediocre.” The Appellant says this error was the starting point for the judge’s finding Buxton had motive to set the fire and led the trial judge to the wrong conclusion the Appellant had such motive.

The Appellant contends in fact the evidence demonstrates the company was handling its financial affairs effectively; the suppliers were up to date, there was no evidence of creditor demands, and the mortgage was current. The company had equity in the building, had a credit with its gas supplier and other loans were current and, in some cases, the company was paying more on the loans than was required. Regarding evidence of an NSF cheque, the situation was rectified immediately.

Although the business had been listed for sale for some considerable time without any interested buyers, it was simply a matter of Buxton advertising the business on a website at a friend’s recommendation and it was simply a shot at trying to sell the business and not a serious effort to sell. [ 28 ] Although acknowledging that Buxton did not use the word “horrible” to describe his financial situation, the Respondent says there was ample evidence to support the trial judge’s ultimate finding with respect to motive.

Buxton acknowledged that business was tough and acknowledged that he and his father had discussed bankruptcy in November or December 2005. The business had been for sale for some months and there were no formal written offers to purchase the business. The business continued to be listed for sale at the time of the fire. The gas business had shown low profit margins and the food business had significant competition both from a nearby restaurant and a new Subway franchise which opened in the community.

In January 2006, the Appellant was required to enter into an arrangement with both the Canada Revenue Agency and Saskatchewan Finance to maintain its ongoing accounts in good standing.

There were three years’ taxes owing on the premises and the Town had filed a tax lien against the property. [ 29 ] I am satisfied it was open on the evidence for the trial judge to find Buxton was under financial distress and had motive to set the fire and no palpable and overriding error has been demonstrated with respect to his conclusions on this issue. [ 30 ] On the issue of opportunity, the trial judge found that Buxton had not only the opportunity to start the fire but went further and found Buxton “had exclusive opportunity, even though exclusive opportunity is not a prerequisite” (para. 22 of the judgment). [ 31 ] On the day following the fire, Buxton provided a written statement to the local RCMP detachment and, in that statement, he denied stopping at the business premises prior to returning home after providing DJ music service at the local dance.

Buxton said that he loaded up his equipment, left the dance and went straight home. He declared the same in a Statutory Declaration to one of the Respondent’s adjusters. At the time he spoke to the RCMP sergeant, there was no suggestion that he or anyone else was being investigated for possible arson but Buxton volunteered the statement “I didn’t want them to pin it on me.” He continued to maintain the position he did not go to the premises shortly prior to the fire being reported through to his Examination for Discovery conducted in September 2006.

At that time, he modified his position and said he “might” have stopped at the business but did not remember whether he actually went into the premises. It was not until the trial that Buxton finally admitted he had gone into the premises after leaving the dance. Buxton put the time he was at the premises at around 1:45 or 2:00 a.m. The fire was reported at 3:20 a.m. [ 32 ] The trial judge, referring to Buxton, said, “[h]e is unable to give any credible reason for his false denial.

His contention that he was in shock and acting erratically as the result of the fire, which he said cost him his livelihood, is not believable. His further assertion that he was scared and wanted to avoid trouble does not assist him. Clearly he was lying to deflect suspicion” (para. 18 of the judgment). There is no basis here on which this Court could interfere with that conclusion. [ 33 ] The Appellant argued at trial there was a break-in of the premises raising the possibility the perpetrators of the break-in started the fire.

The trial judge found the evidence regarding a break-in as “not very satisfactory.” Buxton did not observe immediately after the fire that the safe had been opened and did not notice this until the next following day when the fire investigators were on the scene. The trial judge did not take the facts of missing money and missing cigarettes as leading to any inference of a break-in saying this evidence would also be consistent with a break-in “staged” by Buxton. The trial judge came to the conclusion there was in fact no break-in of the

premises and was satisfied on the whole of the evidence Buxton not only had opportunity to start the fire but he had an “exclusive opportunity.” The evidence is clearly capable of supporting a finding Buxton had the opportunity to start the fire.

The trial judge made no reviewable error in so finding. [ 34 ] The trial judge considered the issue of Buxton’s credibility and came to the conclusion Buxton had been “intentionally untruthful on several significant occasions.” He reviewed the evidence set out when he considered the issue of “motive.” Further, the trial judge found even at trial Buxton was still not prepared to be perfectly candid. The trial judge said, “[o]bviously it would be quite wrong to rely on any of his testimony as to whether or when he stopped at the Race Trac premises” (para. 32 of the judgment).

He came to the conclusion the “only reasonable inference is that he was at the premises very shortly before the fire was reported. The clear implication from that, in the context of his false denials, is that he started the fire.” In my view, the trial judge committed no error in reaching his conclusion Buxton was untruthful. [ 35 ] The Appellant also raised a series of concerns about the possible cause of the fire, the location where it started and how it spread through the building.

These submissions effectively invited the Court to wholly redo the fact-finding of the trial judge but, obviously, the applicable standards of review prevent us from taking an approach of this kind. There may be some difficulties with some aspects of the trial judge’s treatment of the evidence and, indeed, it might have been possible to have taken a different view of some of it. However, overall, we are not persuaded that the trial judge made a palpable and overriding error in relation to any material finding of fact. IV.

Conclusion [ 36 ] In ruling the Respondent was required to provide cogent evidence to establish to a high degree of probability the fire was incendiary and that Buxton started it, the trial judge recognized there was a heavy evidentiary burden on the Respondent relying on the defence of arson. He concluded, “[t]he circumstantial evidence in this case well supports the defendant’s (Respondent’

s) contention” (para. 34 of the judgment). Although the Respondent correctly points out the “high degree of probability” is not the standard, [1] the trial judge’s key findings can be supported by the evidence. [ 37 ] No error of law has been demonstrated nor did the trial judge make palpable or overriding error in his relevant factual findings. The appeal is therefore dismissed with costs. DATED at the City of Regina, in the Province of Saskatchewan, this 9 th day of March, A.D. 2011. “LANE J.A.” LANE J.A. I concur “RICHARDS J.A.” RICHARDS J.A. I concur “OTTENBREIT J.A.” OTTENBREIT J.A.