2 SCR 235 Michalak v. Biotech Electronics Ltd. et ... - StudentUnion.ca

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IN THE COURT OF APPEAL FOR SASKATCHEWAN
Court File No. 1376
THE CANADIAN FEDERATION OF STUDENTS and THE CANADIAN
FEDERATION OF STUDENTS-SERVICES
- and —
ROBIN MOWAT
- and
—
UNIVERSITY OF SASKATCHEWAN STUDENTS’ UNION
INDEX
1. Housen v. Nikolaisen, [2002] 2 S.C.R. 235
2. Michalak v. Biotech Electronics Ltd. et al. (1986), 35 B.L.R. 1 (PQ S.C.)
3.. Schafer v. International Capital Corp, [1996] 5 W.W.R. 98 (Q.B.)
4. Schafer v. International Capital Corp, [1997] S.J. No. 374 (C.A)
5. Jacob Farms Ltd v. Jacobs, [1992] O.J. No. 813 (Gen. Div.)
6. Litz v. Litz, [1995] 4 W.W.R. 425 (Q.B.)
Appellant
(Added Respondent)
Respondent
(Applicant)
Respondent
(Respondent)
7. Walton (Litigation Guardian of) v. Saskatchewan Hockey Association, [1997] 1
W.W.R. 135 (Sask. Q.B.)
8. Kanigan (Guardian ad Litem v. Castlegar Minor Hockey Association (1996), 141
D.LR. 4th 563 (B.C. S.C.)

9. Beauchamp v. North Central Predators AAA Hockey Association et al (2004), 247 D.L.R.
4th 745 (ON S.C.)
10. Miramichi Minor Hockey Club v. New Brunswick Amateur Hockey Association inc.,
[1997] N.B.R. (2d) Supp. No.26 (N.B. Q.B.)
11. Anderson v. Stewart and Diotte (1921), 62 D.L.R. 98 at 115 (N.B.S.C.)
12. Flookes v. Shrake, [1989] A.J. No. 1011 (Q.B.)
13. Banda v. Romanian Canadian Cultural Club, [1986] S.J. No. 758 (Sask. C.A.)
14. Eric D. MeLaine Construction Ltd v. Southport (Community), [1990] P.E.I.J. No. 45
(S.C.)

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN 235
Paul Housen Appellant
V.
Rural Municipality of Shellbrook
No. 493 Respondent
II4DEXED As: Uous v. NuoI1sEN
Neutral cItation: 2002 SCC 33.
File No.: 27826.
2001: October 2; 2002: March 28.
Present: McLachlin CJ. and L’Heureux-Dubé, Gonthier,
Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel
33.
ON APPEAL FROM THE COURT OF APPEAL FOR
SASKATCHEWAN
Torts —Motor vehicles —Highways —
Negligence—
Liability of rural municipalityforfailing to post warning
signs on local access road —
Passenger
sustaining
injuries in motor vehicle accident on rural road —
Trial judge apportioning part of liability to rural
municzpality — Whether Court of Appeal properly
overturning trial judge’s finding of negligence — The
Rural Municipality Act, 1989, S.S. 1989-90, c. R-26.1, s.
192.
Municipal law —
Negligence — Liability of rural
municipality for failing to post warning signs on local
access road — Passenger sustaining injuries in motor
vehicle accident on rural road— Trialjudge apportioning
part of liability to rural municipality — Whether Court
of Appeal properly overturning trial judge’s finding of
negligence —
The
1989-90, c. R-26.l, s. 192.
Appeals —
Courts
Rural Municipality Act, 1989, S.S.
— Standard ofappellate review —
Whether Court of Appeal properly overturning trial
judge fiiIding of negligence — Standard of review for
questions ofmixedfact and la
The apeilant was. a passenger in a vebicle operated
by N on a rural road in the respondent municipality. N
Paul Housen Appelant
C.
Municipalité rurale de Shelibrook
no 493 Intimée
RPERToRui : Hous c. NuoLuszx
Référence neutre : 2002 CSC 33.
N° du greffe : 27826.
2001 : 2 octobre; 2002 :28 mars.
Presents: Le juge en chef McLachiin et les juges
L’Heuretix..Dubé, Gonthier, Jacobucci, Major,
Bastarache, Binnie, Arbour et LeBel.
EN APPEL DE LA COUR D’APPEL DE LA
SASKATCHEWAN
Délits clvils —
Véhicules
automobiles —
Routes
—
Negligence — Responsabilité d’une mwzicipalité rurale
qui omet d’installer des panneaux d’avertissement
le long d’une voie d’accès locale —
Blessures
subies
par un passager dons un accident automobile sur une
route rurale —
Responsabiité
imputée en partie a Ia
municipalitJ rurale par Ia juge de premiere instance —
La Cour d’appel a-t-elle eu raison d’infirmer la decision
de lajuge de premiere instance concluant ala negligence
de la municipalitd rurale? — The Rural Municipality Act,
1989, S.S. 1989-90, ch. R-26.1, art 192.
Droitmunicipal—Négligence—Responsabilitdd’une
municipalité rurak qui omet d’installer des pwmeaux
d’avertissement le long d’une vole d’accès locale —
Blessures subies par un passciger dans un accident
automobile sur une route rurale —
ResponsabilitJ
imputêe en partie a la mzmicipalité rurale par lajuge de
premiere instance — La Cour d’appel a-t-eIle eu raison
d’infirmer Ia decision de Ia jisge de premiere instance
concluant a Jo negligence de la municIpalité rurale? —
The Rural Municipality Act 1989, S.S. 1989-90, ch.
R-26.1, art. 192.
Appels —
TribwzazsxjudicIaires
— Norme de contrôle
applicable en appel — La Cour d’appel a-t-elle eu raison
d’infirmer Ia decision de Ia juge de premiere instance
concluant a Ia negligence de la munIcipalité rurale? —
Norme de contrôle applicable a l’dgard des questions
mixtes defait et de droit.
L’appelant etait passager dans Ic véhicule conduit
par N sur uric route resale situde sur le territoire de la

236 HOUSEN V. NIKOLAISEN [20021 2 S.C.R.
failed to negotiate a sharp curve on the road and lost
control of his vehicle. The appellant was rendered a
quadriplegic as a result of the injuries he sustained in the
accident. Damages were agreed upon prior to trial in the
amount of $2.5 million, but at issue were the respective
liabilities, if any, of the municipality, N and the appellant.
On the day before the accident, N had attended a party
at the T residence not far from the scene of the accident.
He continued drinking through the night at another
party where he met up with the appellant. The two men
drove back to the T residence in the morning where N
continued drinking until a couple of hours before he and
the appellant drove off in N’s track. N was unfamiliar
with the road, but had travelled on it three times in the
24 hours preceding the accident, on his way to and
from the T residence. Visibility approaching the area of
the accident was limited due to the radius of the curve
and the uncleared brush growing up to the edge of the
road. A light rain was falling as N turned onto the road
from the T property. The truck fishtailed a few times
before approaching the sharp curve where the accident
occurred. Expert testimony revealed that N was travelling
at a speed of between 53 and 65 km/hr when the vehicle
entered the curved portion of the road, slightly above the
speed at which the curve could be safely negotiated under
the conditions prevalent at the time of the accident.
The road was maintained by the municipality and was
categorized as a non-designated local access road. On
such non-designated roads, the municipality makes the
decision to post signs if it becomes aware of a hazard, or
ifthere are several accidents at one spot. The municipality
had not posted signs on any portion of the road. Between
1978 and 1987, three other accidents were reported in
the area to the east of the site of the appellant’s accident.
The trial judge held that the appellant was 15 percent
contributorily negligent in failing to take reasonable
precautions for his own safety in accepting a ride from N,
and apportioned the remaining joint and several liability
50 percent to N and 35 percent to the municipality. The
Court of Appeal overturned the trial judge’s finding that
the municipality was negligent.
Field (Gonthier, Bastarache, Binnie and LeBel 33.
dissenting): The appeal should be allowed and the
judgment of the trial judge restored.
municipalit intimde. N a dt incapable de prendre an
virage semi et il a perdu la ma!trise de son véhicule.
L’appelant eat devenu quadripidgique a la suite des
blessures subies dans l’accident. Les parties ont convenu
avant le procès du montant des domrnages-intérêts,
qul ont dtd flxefs a 2,5 millions de dollars. La question
en litige tait celle de savoir si la municipalit, N et
l’appelant 6taient responsables et, dans l’affinnative,
dans quelles proportions. Le jour qui a précidd
l’accident, N avait assisni a une fête a Ia nisidence des
T, non loin de Ia scene de 1’ accident. Durant la nuit, II
a continue tie boire a une autre fête, cit il a rencontrd
l’appelant. Le niatin, les deux hommes sout retourués en
automobile a Ia nisidence des T, ott N a continue de boire,
cessant de Ic faire quelques heures avant de prendre la
route dana sa cainionnette en compagnie de l’appelant.
N n’dtait pas farnilier avec le chemin en question, mais
il l’avait empruntd a trois reprises au cours des 24 heures
qui avaient prdcddti l’accideat pour aller et venir de la
rdsidence des T. A l’approche de l’endroit de l’accident,
Ia distance de visibilitd dtait rdduite en raison du rayon
de courbure du virage et de la prdsence de broussaifles
poussant jusqu’au bord du chemin Une faible phuie
tombait lorsque N s’est engagti sur le cheniin en quittant
Ia rdsidence des T. L’ arrière de la caxnionnette a zigzagud
a plusieurs reprises avant que le véhicule n’arrive aux
abords du virage semi oil 1’ accident eat survenu. Selon le
tdmoignage d’un expert, N roulait a une vitesse se situant
entre 53 et 65 km/h lorsque Ic véhiculc s’est engage dana
la courbe, soit une vitesse légèrement supérieure a celle
a laquelle Ic virage pouvait être pris en sdcui-itd eu dgard
aux conditions qui existaient au moment de 1’ accident.
Le chemin, qui dtait entretenu par in municipalitd,
appartenait a la catdgorie des voies d’accès locales non
ddsigndes. La municipalité installe des panneaux de
signalisation sur ces chemins si elle constate 1’ existence
d’un danger ou si plusieurs accidents se produisent au
même endroit. Elle n’avait instaild aucune signalisation
le long tie cette portion dii chemin. On a signale trois
autres accidents survenus de 1978 a 1987 a l’est du lieu
de l’accident dont a etC victime l’appelant. La juge tie
premiere instance a estimd quel’appelant Cmii responsable
tie negligence concourante clans me proportion de
iSp. 100, dii fait qu’il avait ornis de prendre des
prCcautious raisonnables pour assurer sa propre sdcuritC
en acceptant de monter a bord du vChicule tie N, et elle a
rCparti in reste de Ia responsabilitC solidairement entre N
(50 p. 100) et Ia municipalitd (35 p. 100). La Cour d’appel
a in&mC Ia conclusion de in juge de premiere instance
selon laqueile la mimicipalitC avait titC nCgligente.
Arrêt (ins juges Gonthier, Bastarache, Binnie et LeBel
sont dissidents) : La pourvoi eat accueilli et la decision
dç lajuge de premiere instance est rdtablie.

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN 237
Per McLachiin Ci. and L’Heureux-Dubé, Iacobucci,
Major and Arbour 33: Since an appeal is not a re-trial
of a case, consideration must be given to the standard
of review applicable to questions that arise on appeal.
The standard of review on pure questions of law is
one of correctness, and an appellate court is- thus free
to replace the opinion of the trial judge with its own.
Appellate courts require a broad scope of review with
respect to matters of law because their primary role is to
delineate and refine legal niles and ensure their universal
application.
The standard ofreview for findings of fact is such that
they cannot be reversed unless the trial judge has made a
“palpable and overriding error”. A palpable error is one
that is plainly seen. The reasons for deferring to a trial
judge’s findings of fact can be grouped into three basic
principles. First, given the scarcity ofjudicial resources,
setting limits on the scope of judicial review in turn
limits the number, length and cost of appeals. Secondly,
the principle of deference promotes the autonomy
and integrity of the trial proceedings. Finally, this
principle recognizes the expertise of trial judges and
their advantageous position to make factual findings,
owing to their extensive exposure to the evidence and
the benefit of hearing the testimony viva voce. The
same degree of deference must be paid to inferences of
fact, since many of the reasons for showing deference
to the factual findings of the trial judge apply equally
to all factual conclusions. The standard of review for
inferences of fact is not to verify that the inference can
reasonably be supported by the findings of fact of the
trial judge, but whether the trial judge made a palpable
and overriding error in coming to a factual conclusion
based on accepted facts, a stricter standard. Making a
factual conclusion of any kin4 is inextricably linked
with assigning weight to evidence, and thus attracts a
deferential standard of review. If there is no palpable
and overriding error with respect to the underlying facts
that the trial judge relies on to draw the inference, then
it is only where the inference-drawing process itself is
palpably in error that an appellate court can interfere
with the factual conclusion.
Le juge en chef McLachlin et les juges
L’Heureux-Dubé, lacobucci, Major et Arbour: Etant
donné que l’appel ne constitue pas un nouveau proces,
H faut se demander queue eat Ia norme de contrôle
applicable en appel a l’égard des diverses questions que
soulCve le pourvoi. La norme de contrôle applicable aux
pures questions de droit est celle de la decision correcte
et, en consequence, il eat loisible aux cours d’ appel de
substituer lear opinion a celle des juges cIa premiere
instance. Les cours d’appel ont besoin d’un large pouvoir
de contrôle a l’égard des questions de droit pour être en
mesuxe de s’acquitter de lear role premier, qui consiste a
prCciser et a raffiner lea règles de droit et a veiller a leur
application universelle. V
Suivant la norme de contrOle applicable aux
conclusions de fail, ces conclusions ne peuveut être
inflrmées que s’il est Ctabli que le juge de premiCre
instance a commis une >. Une erreur manifeste est une erreur qui
eat Cvidente. Les diverses raisons justifiant la retenue
a l’Cgard des conclusions de fait du juge de premiere
instance peuvent être regroupdes sons trois principes
de base. Premièrement, vu Ia rareté des ressources dont
disposent les tribunanx, le fait de limiter Ia portée du
contrôle judiciaire a pour effet de rCduire le nombre, Ia
dorée et le coilt des appels. Deuxièmement, Ic respect
du principe de in retenue envers lea conclusions favorise
l’autonomie et l’intCgritd du procès. Enfin, ce principe
permet de reconnaltre l’expertise du juge de premiere
instance et Ia position avantageuse dans laquelle H se
trouve pour tirer des conclusions de fail. étant dormé
qu’il a I’occasion d’exaininer la preuve en profondeur
et d’entendre lea tCmoignages de vive voix. II faut faire
preuve du même degré de retenue envers lea inferences
de fail, car nombre de raisons justiflant de faire preuve
de retenue a l’Cgard des constatations de fait du juge
de premiere instance valent autant pour toutes ses
conclusions factuelles. La none de contrOle ne consiste
pas a verifier si l’infdrence peut être raisonnablement
étayde par lea conclusions de fait dii juge cIa premiere
instance, mais phutot S Ce dernier a conunis une erreur
manifeste et dominante en tirant une conclusionfactuelle
sur Ia base de fails admis, ce qui suppose 1’ application
d’une norme plus stricte. Une conclusion factuelle —
queUe que soit sa nature- exige ndcessairement qu’on
attribue uncertain poids ann élément de preuve et, de cc
fait, comnianzde l’application d’une norme de contrOle
empreinte de retenue. Si aucune exreur manifeste et
doxninante n’est dCcelde en cc qui concerne lea faits
sur lesquels repose l’inférence du juge de premiere
instance, cc n’est que lorsque le processus inférentiel
lui-mOme eat manifestement errond que Ia cour d’appel
peut modifier Ia conclusion factueile.

238 HOUSEN v. NIKOLAISEN [200212 S.C.R.
Questions of mixed fact arid law involve the
application of a legal standard to a set of facts. Where
the question of mixed fact and law at issue is a finding of
negligence, it should be deferred to by appellate courts,
in the absence of a legal or palpable and overriding error.
Requiring a standard of “palpable and overriding error”
for findings of negligence made by either a trial judge
or a jury reinforces the proper relationship between the
appellate and trial court levels and accords with the
established standard of review applicable to a finding of
negligence by a jury. Where the issue on appeal involves
the trial judge’s interpretation of the evidence as a whole,
it should not be overturned absent palpable and overriding
error. A determination of whether or not the standard of
care was met by the defendant involves the application
of a legal standard to a set of facts, a question of mixed
fact and law, and is thus subject to a standard of palpable
and overriding error, unless it is clear that the trial judge
made some extricable error in principle with respect to
the characterization of the standard or its application,
in which case the error may amount to an error of law,
subject to a standard of correctness.
Here, the municipality’s standard of care was to
maintain the road in such a reasonable state of repair
that those requiring to use it could, exercising ordinary
care, travel upon it with safety. The trial judge applied
the correct test in determining that the municipality did
not meet this standard of care, and her decision should
not be overturned absent palpable and overriding error.
The trial judge kept the conduct of the ordinary motorist
in mind because she stated the correct test at the outset,
and discussed implicitly and explicitly the conduct of a
reasonable motorist approaching the curve. Further, her
apportionment of negligence indicates that she assessed
N’s conduct against the standard of the ordinary driver
as does her use of the term “hidden hazard” and her
consideration of the speed at which motorists should
have approached the curve.
The Court of Appeal’s finding of a palpable and
overriding error by the trial judge was based on the
erroneous presumption that she accepted 80km/h as the
speed at which an ordinary motorist would approach the
curve, when in fact she found that a motorist exercising
Les questions mixtes de fait et de droit supposent
l’application d’une nonne juridique a un ensemble de
faits. Lorsque la question mixte de fait et de droit en
litige est tine conclusion de negligence, ii y a lieu de
faire preuve de retenue a l’dgard de cette conclusion
en l’absence d’erreur de droit ou d’erreur manifeste et
dominance. Le fait d’exiger l’application de in norme de
l’

[2002] 2 RC.S. HOUSEN c. MKOLAISEN 239
ordinary care could approach the curve at greater than
the speed at which it would be safe to negotiate it. This
finding was based on the trial judge’s reasonable and
practical assessment ofthe evidence as a whole, and is far
from reaching the level of palpable and overriding error.
The trial judge did not err in finding that the
municipality knew or ought to have known of the
disrepair of the road. Because the hazard in this case
was a permanent feature of the road, it was open to the
trialjudge to draw the inference that a prudent municipal
councillor ought to be aware of it. Once this inference
has been drawn, then unless the municipality can rebut
the inference by showing that it took reasonable steps to
prevent such a hazard from continuing, the inference will
be left undisturbed. Prior accidents on the road do not
provide a direct basis for finding that the municipality
had knowledge of the particular hazard, but this factor,
together with knowledge of the type of drivers using this
road, should have caused the municipality to investigate
the road which would have resulted in actual knowledge.
To require the plaintiff to provide concrete proof of the
municipality’s knowledge of the state of disrepair of its
roads is to set an impossibly high burden on the plaintiff.
Such information was within the particular sphere of
knowledge of the municipality, and it was reasonable for
the trial judge to draw an inference of knowledge from
her finding that there was an ongoing state of disrepair.
The trial judge’s conclusion on the cause of the
accident was a finding of fact subject to the palpable and
overriding error standard of review. The abstract nature
of the inquiry as to whether N would have seen a sign
had one been posted before the curve supports deference
to the factual findings of the trial judge. The trial judge’s
factual findings on causation were reasonable and thus
should not have been interfered with by the Court of
Appeal.
Per Gonthier, Bastarache, Binnie and LeBel JJ.
(dissenting): A trial judge’s findings of fact will not
be overturned absent palpable and overriding error
principally in recognition that only the trial judge
observes witnesses and hears testimony first hand and
is therefore better able to choose between competing
versions of events. The process of fact-finding involves
elle a estimd quil était possible qu’un automobiliste
prenant des prcautions normales s’approche du virage
a une vitesse supérieure a la vitesse sdcuritaire pour
effectuer la manceuvre. Loin de constituer uric erreur
manifeste et dominante, cette conclusion ddcoulait d’une
evaluation raisonnable et realists de l’ensemble de la
preuve par la juge de premiere instance.
Lajuge de premiere instance n’a pas commis d’erreur
en concluant que la municipalité connaissait ou aurait ciG
connaltre Ic mauvais dtat du chemin. Etant donné que, en
l’espèce, le danger dtait une caractCristique permanente
dii chemin, il était loisible a la juge de premiere instance
d’infdrer que le qonseffler municipal prudent aurait
d être au fait dii danger. Des l’instant o une telle
inference est tirée, cUe demeure inchangde a moms
que la municipalitC ne puisse la refuter en dCmontrant
qu’elle a pris des mesures raisonnables pour faire cesser
le danger. Les accidents survenus antérieurement sur le
chemin ne constituent pas uric preuve directe permettant
de conchure que la municipaiitC connaissait l’existence
du danger particulier en cause, main ce facteur, conjugud
a la connaissance du type de conducteurs utilisant le
chemin, aurait dil inciter la rnunicipalitd a faire enquête
l’dgard dii chemin en question, ce qui liii aurait pennis
de preudre connaissánce concrètemenr de l’existence du
danger. Exiger dii demandeur qu’il apporte la preuve
concrete de Ia counaissance par la municipalitd dii
mauvais dtat d’entretien de ses chemins revient a imposer
a cc dernier un fardeau inacceptablement lourd. 11 s’agit
d’information relevant dii domaine de connaissance de
La municipalitd et, selon nous, il dtait raisonnable que Ia
juge de prenuière instance infere de sa conclusion relative
au mauvais dtat d’entretien persistaut du chernin que la
municipalitd possddait la connaissance requise.
La conclusion de la juge de premiere instance quart
a Ia cause de l’accident dtait une conclusion de fait
assujettie a ha norme de contrOle de l>. Le caractère thdoiique de l’aualyse de
la question de savoir 51 N aurait aperçu un panneau de
signaiisation instafld avant la courbe justifie de faire
montre de retenue a l’dgard des conclusions factuelles de
lajuge de premiere instance. Lea constatations factuelles
de cette dernière relativemeut a la causalité dtaient
raisonnables et la Cour d’appel n’aurait donc pas d lea
modifier.
Les juges Gonthier, Bastarache, Binnie et LeBel
(dissidents) : Lea conclusions de fait dujuge de premiere
instance ne sont pas modifides en l’absence d’erreur
manifeste ou domhiante, principalernent parce qu’il
eat le seul a avoir l’occasion d’observer lea tCmoins et
d’entendre lea tdmoignages de vive voix, et qu’il eat,
de cc fait, plus a même de choisir entre deux versions

240 HOUSEN V. NUCOLAISEN [2002] 2 S.C.R.
not only the determination of the factual nexus of the
case but also requires the judge to draw inferences
from facts. Although the standard of review is identical
for both findings of fact and inferences of fact, an
analytical distinction must be cfrawn between the two.
Inferences can be rejected for reasons other than that the
inference-drawing process is deficient. An inference can
be clearly wrong where the factual basis upon which it
relies is deficient or where the legal standard to which
the facts are applied is misconstrued. The question
of whether the conduct of the defendant has met the
appropriate standard of care in the law of negligence is
a question of mixed faót and law. Once the facts have
been established, the determination of whether or not the
standard of care was met will in most cases be reviewáble
on a standard of correctness since the trial judge must
appreciate the facts within the context of the appropriate
standard of care, a question of law within the purview of
both the trial and appellate courts.
A question of mixed fact and law in this case was
whether the municipality knew or should have known
of the alleged dangec The trial judge must approach
this question having regard to the duties of the ordinary,
reasonable and prudent municipal councilor. Even if the
trial judge correctly identifies this as the applicable legal
standard, he or she may still err in assessing the facts
through the lens of that legal standard, a process which
invokes a policy-making component. For example, the
trial judge must consider whether the fact that accidents
had previously occurred on different portions of the
road would alert the ordinary, reasonable and prudent
municipal councillor to the existence of a hazard. The
trial judge must also consider whether the councillor
would have been alerted to the previous accident by an
accident-reporting system, a normative issue reviewable
on a standard of correctness. Not all matters of mixed
fact and law are reviewable according to the standard
of correctness, but neither should they be accorded
deference in every case.
Section 192 of the Rural Municipality Ac 1989,
requires the trial judge to examine whether the portion
of the road on which the accident occurred posed a
hazard to the reasonable driver exercising ordinary care.
Here, the trial judge failed to ask whether a reasonable
driver exercising ordinary care would have been able to
safely drive the portion of the road on which the accident
divergentes d’un mCme dvdnement. Le processus dé
constatation des faits exige non seulement du juge qu’il
ddgage le nud factuel de l’affaire, main dgalement
qu’il tire des inferences des faits. Bien que la norme de
contrôle soit la méme et pour lea conclusions de fait et
pour lea inferences de fait, il importe ndanmoins de faire
une distinction analytique entre lea deux. Des inferences
peuvent etre rejetées pour d’auires raisons que le fait que
le processus qui lea a produites eat lui-même deficient.
Une inference peut être manifestement erronde si ses
assises factuelles prdsentent des lacunes ou si la norme
juridique appliqude aux faits eat mal interprdtde. Dana
le contexte du droit relatif a Ia negligence, la question
de savoir si la conduite du dCfendeur est confoune a la
norma de diligence appropriée eat use question mixte
de fait et de droit. Une fois lea faits établis, la decision
touchant la question de savoir si le ddfendeur a respectd
ou non la norme de diligence est, dana la plupart des
cas, contrôlable selon la norme de la decision correcte,
puisque le juge de prenuière instance doit apprécier les
faits au regard de la norme de diligence appropriée,
question de droit qul relève autant des cours de premiere
instance que des cours d’appel.
En I’espèce, Ia question de savoir si Ia municipalité
connaissait on aurait dtl connaitre le danger dont on
allCguait l’existence était use question ruixte de fait et
de droit. Le juge de premiere instance doit examiner
cette question eu dgard aux obligations qui incombent
au conseiller municipal moyen, raisonnable et prudent.
Même en supposant que le juge de premiere instance
determine correctement la norme juridique applicable, II
lui eat encore possible de comnmettre use erreur lorsqu’il
apprécie les faits a la lumière de cette norme juridique,
processus qui implique notaznment l’établissement
de politiques d’intCrêt gdnéral. Par exemple, il doit se
demander si le fait que des accidents se soient déjà
produits a d’autres endroits du chentln alerterait le
conseiller municipal moyen, raisonnable et prudent de
l’existence d’un dangec II doit Cgalement se demander
si ce conseiller aurait appris I’existence de l’accident
antérieur par tin système d’information sur lea accidents,
question normative qui eat contrôlable selon la norme de
la decision correcte. Lea questions mixtes de fait et de
droit ne sont pas toutes contrôlables suivant cette nornie,
mais des ne commandent pas systématiquement use
attitude enipreinte de retenue.
Suivant la normne de diligence énoncCe a I’art. 192
de la Rural Municipality Act; 1989, la juge & premiere
instance dtivait se demander si le tronçon du chemin
stir lequel s’est produit l’accident constituait ian danger
pour le conducteur raisonnable prenant des precautions
normales. En l’espèce, Ia juge de premiere instance a
onus de se demander si un tel conducteur aurait Pu rouler

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN 241
occurred. This amounted to an error of law. The duty of
the municipality is to keep the road in such a reasonable
state ofrepair that those required to use it may, exercising
ordinary care, travel upon it with safety. The duty is
a limited one as the municipality is not an insurer of
travellers using it streets. Although the trial judge found
that the portion of the road where the accident occurred
presented drivers with a hidden hazard, there is nothing
to indicate that she considered whether or not that
portion of the road would pose a risk to the reasonable
driver exercising ordinary care. Where an error of law has
been found, the appellate court has jurisdiction to take
the factual findings of the trial judge as they are and to
reassess these findings in the context of the appropriate
legal test. Here, the portion of the road on which the
accident occurred did not pose a risk to a reasonable
driver exercising ordinary care because the condition of
the road in general signalled to the reasonable driver that
caution was needed.
The trial judge made both errors of law and palpable
and overriding errors of fact in determining that the
municipality should have known of the alleged state of
disrepair. She made no finding that the municipality had
actual knowledge of the alleged state of disrepair, but
rather imputed knowledge to it on the basis that it should
have known of the danger. As a matter of law, the trial
judge must approach the question of whether knowledge
should be imputed to the municipality with regard to the
duties of the ordinary, reasonable and prudent municipal
councillor. The question is then answered through the
trial judge’s assessment of the facts of the case. The
trial judge erred in law by approaching the question
of knowledge from the perspective of an expert. rather
than from that of a prudent municipal councfflor and
by failing to appreciate that the onus of proving that the
municipality knew or should have known of the disrepair
remained on the plaintiff throughout. She made palpable
and overriding errors in fact by drawing the unreasonable
inference that the municipality should have known that
the portion of the road on which the accident occurred
was dangerous from evidence that accidents had occurred
on other parts of the road. As the municipality had not
received any complaints from motorists respecting the
absence of signs on the road, the lack of super-elevation
on the curves, or the presence of vegetation along the
sides of the road, it had no particular reason to inspect’
that segment of the road for the presence of hazards. The
question of the municipality’s knowledge is inextricably
linked to the standard of care. A municipality can only
be expected to have knowledge of those hazards which
pose a risk to the reasonable driver exercising ordinary
care, since these are the only hazards for which there is
en sécuritd sur le tronçon en question. U s’agissait d’une
erreur de droit. Les municipalitds ont l’obligation de tenir
les chemins dans us dtat raisonnable d’entretien de facon
que ceux qui doivent les emprunter puissent, en prenant
des precautions norniales, y circuler en sdcuritd. II s’agit
d’une obligation de portde limitée, car lea municipalitds
ne sont pas les assureurs des automobilistes qui roulent
dans leurs rues. Bien que la juge de premiere instance
alt conclu que Ia portion dii cheniin ot s’est produit
l’accident exposait lea conducteurs a ins danger cache,
il n’y a rica qul indique qu’elle s’est demandd Si cette
portion dii chemin prdsentait an risque pour Ic conducteur
raisonnable prenant des precautions normales. La cour
d’appel qul ddchie une erreur de droit a competence pour
reprendre telles quelles les conclusions de fail dii juge
de premiere instance et lea rcldvaluer au regard du crithre
juridique approprid. En l’espèce, la portion du chemin
cii s’est produit l’accident ne prdsentait pas de risque
pour us conducteur raisonnable prenant des precautions
nonnales, car l’état de cc chemin en gdndral avertissait
l’automobiliste raisonnable que la prudence s’ixnposait.
La juge de premiere instance a commis et des erreurs
de droit et des erreurs de fait manifestes et dominantes en
statuant que in municipalité intimde aurait cM conualtre
Ic mauvais dtat clans lequel se trouvait, prétendait-on,
Ic chernun. La juge de premiere instance n’a pas conch
que la municipalitd intimde connaissait concrètenient Ic
pretends mauvais état du chemin, xnais elle liii a plutôt
prêtC cette connaissance pour le motif qu’eile aurait dü
connaitre 1’ existence du danget Stir he plan juridique, le
juge de premiere instance dolt se demander s’il y a lieu de
presumer que la municipalitcl connaissait ôe fait, eu égard
attic obligations qui incombent an conseiller municipal
moyen, raisonnable et prudent. II répond ensuite a
cette question en appréciant les fails de l’espèce dont
il est saisi. Dans Ia présente affaire, ha juge de premiere
instance a fait erreur en droit en exminant la question
de Ia connaissance requise du point de vue du spécial.iste
plutôt que dii point de vue du conseiller municipal
prudent et en ne reconnaissant pas que le fardeau de
prouver que ha municipalitC connaissait ou aurait dü
conñaIixe le rnauvais dtat dii chemist ne cessait jamais
d’inconiber au dernandeur. La juge de premiere instance
a commis tine erreur de fait manifeste et dorninante en
infdrant déraisonnablement que la municipalité untimée
aurait cM savoir que ha partie du chemun ch l’accident
s’est produit Ctait dangereuse, compte tenu de la preuve
que des accidents avaient eu lieu ailleurs sur cc chemun.
La xnunicipalitcl n’avait aucune raison particulisre
d’afler inspecter cette portion dii chernin pour voir s’il
y existait des dangers, puisqu’elle n’avait reçu aucune
plainte d’automobilistes relativement a de
signalisation, a l’absence de surélCvation des courbes
ou a Ia presence d’arbres et de vCgCtation en bordure dii

242 HOUSEN v. NIXOLAISEN [2002] 2 S.C.R.
a duty to repairi Here, the municipality cannot have been
expected to have knowledge of the hazard that existed at
the site of the accident, since the hazard did not pose a
risk to the reasonable driver. Implicit in the trial judge’s
reasons was the expectation that the municipality should
have known about the accidents through an accident
reporting system, a palpable error, absent any evidence of
what might have been a reasonable system.
With respect to her conclusions on causation, which
are conclusions on matters of fact, the trial judge ignored
evidence that N had swerved on the first curve he
negotiated prior to the accident, and that he had driven
on the road three times in the 18 to 20 hours preceding
the accident. She further ignored the significance of the
testimony of the forensic alcohol specialist which pointed
overwhelmingly to alcohol as the causal factor which led
to the accident, and erroneously relied on one statement
by him to support her conclusion that a driver at N’s level
of impairment would have reacted to a warning sign. The
finding that the outcome would have been different had
N been forewarned of the curve ignores the fact that he
already knew the curve was there. The fact that the trial
judge referred to some evidence to support her findings
on causation does not insulate them from review by this
Court. An appellate court is entitled to assess whether or
not it was clearly wrong for the trialjudge to rely on some
evidence when other evidence points overwhelmingly to
the opposite conclusion.
Whatever the approach to the issue of the duty of
care, it is only reasonable to expect a municipality
to foresee accidents which occur as a result of the
conditions of the road, and not, as in this case, as a
result of the condition of the driver. To expand the repair
obligation of municipalities to require them to take into
account the actions of unreasonable or careless drivers
when discharging this duty would signify a drastic and
unworkable change to the current standard..
chernin. La question de la connaissance de l’intimée est
intimement lie a celle de Ia norme de diligence. Une
municipalité est uniquement censée avoir connaissance
des dangers gui prdsentent un risque pour le conducteur
raisonnable prenant des prdeautions norinales, puisqu’il
s’agit des seuls dangers a l’dgard desquels existe une
obligation d’entretien. En l’espèce, on ne pouvait
attendre de I’intimde qu’elle connaisse le danger qul
existait a l’endroit oü l’accident est survenu, puisque cc
danger ne prsentait tout simplement pas de risque pour
le conducteur raisonnable. Ii ressort implicitement des
motifs de lajuge de premiere instance que la municipa]it
aurait censdment dfi connaitre l’existence des accidents
grace a un système d’information en Ia matière, erreur
manifeste en 1’ absence de quelque element de preuve
indiquant cc qui aurait Pu constituer un système
raisonnable.
Relativement aux conclusions de la juge de premiere
instance sur le lien de causalité, qui sont des conclusions
de fait, celle-ci a fait abstraction de in preuve que Ic
vEhicule de N avait fait uric embardée dans Ia premiere
courbe et que cc dernier avait rould a irois reprises
sur le dictum en question au cours des 18 a 20 heures
ayant précddC l’accident. La juge de premiere instance
a également omis tie tenir compte tie 1’ importance
du témoignage du spécialiste judiciaire en matière
d’alcool, qui menait irrdsistiblement a la conclusion
que l’alcool avait été Ic facteur causal de I’accident, et
cUe a erronCment invoqué uric declaration de celui-ci
an soutien de as conclusion que N await réagi a an
panneau de signalisation. La conclusion que Ic résultat
await dté different si N avait dtd prdvenu tie l’existence
de Ia courbe ne dent pus compte du fair qu’il savait déjà
qu’elle existait. Le fait que Ia juge de premiere instance
alt mentionnC certains elements de preuve an soutien de
ses conclusions sur le lien de causalitd n’a pas pour effet
de soustraire ces conclusions au pouvoir de contrôle de
notre Cow. La tribunal d’appel est habiiitd a se demander
Si Ic juge de premiere instance a clairement fait erreur en
ddcidant comme ii ra fait sum is fondement de certains
elements de preuve alors que d’autres elements niènent
irrdsistiblement a Ia conclusion inverse.
Inddpendamment de l’approche choisie a l’égard
de la question de l’obligation de diligence, ii n’est que
raisonnable d’attendre d’une municipalitC qu’elle prdvoit
les accidents gui surviennent en raison de l’dtat du
chemin, et non, coimne en l’espece, ceux gui rdsultent
de l’dtat du conducteur. Elargir l’obligation d’entretien
desniunicipaiitds en exigeant qu’elles tiennent compte,
dana l’exdcution de cette obligation, des actes des
conducteurs déraisonnables on imprudents, entralnerait
uric modification radicale et hrdalisable de la norme
actuelle.

[20021 2 R.C.S. HOUSEN C. NUCOLAISEN 243
Cases Cited
By racobucci and Major 33.
Applied; Schwartz i Canada, [1996] 1 S.C.R. 254;
Toneguzzo-Norvell (Guardian ad litem of) v. Burnaby
Hospital, [1994] 1 S.C.R. 114; Van de Perre v. Edwards,
[2001] 2 S.C.R. 1014, 2001 SCC 60; canada (Director
of Investigation and Research) v. Southam Inc, [19971
1 S.C.R. 748; Stein v. The Ship “Kathy K”, [1976] 2
S.C.R. 802; Geffen v. Goodman Estate, [1991] 2 S.C.R.
353; Jaegli Enterprises Ltd. v. Taylor, [1981] 2 S.C.R.
2; McCannell v. McLean, [1937] S.C.R. 341; Partridge
v. Rural Municipality of Langenburg, [1929] 3 W.W.R.
555; considered: Galaske v. O’Donnell, [1994] 1 S.CR.
670; referred to: Gottardo Properties (Dome) Inc.
Toronto (City) (1998), 162 DL.R. (4th) 574; Underwood
v. Ocean City Realty Ltd. (1987), 12 B.C.L.R. (2d) 199;
Woods Manufacturing Co. v. The King, [1951) S.C.R.
504; Ingles v. Tutkaluk Construction Ltd., [2000] 1
S.C.R. 298,2000 SCC 12; Ryan v. Victoria (City), [19991
1 S.C.R. 201; Consolboard Inc. v. MacMillan Bloedel
(Saskatchewan) Ltd., [1981) 1 S.C.R. 504; Anderson v.
Bessemer City, 470 U.S. 564(1985); Schreiber Brothers
Ltd. v. Currie Products Lta, [1980] 2 S.C.R. 78; Palsky
• v. Humphrey, [19641 S.C.R. 580; Hodgkinson i. Simms,
[1994] 3 S.C.R. 377; Dube v. Labar [1986] 1 S.C.R.
• 649; C.N.R. v. Muller, [1934] 1 D.L.R. 768; St-Jean v.
Mercier, [2002] 1 S.C.R. 491,2002 SCC 15; Rhône (The)
p. PeterA.B. Widener (The), [1993] 1 S.C.R. 497; Cork v.
Kirby MacLean,. LtcL, [1952] 2 AU E.R. 402; Matthews v.
MacLaren (1969), 4 D.L.R. (3d) 557.
By Bastarac]ie 3. (dissenting)
Canada (Director of Investigation and Research) v.
Southam Inc., [1997] 1 S.C.R. 748; Stein v. The Ship
“Kathy K”, [1976] 2 S.C.R. 802; Toneguzzo-Norvell
(Guardian ad litem of) V. Burnaby Hospital, [1994)
1 S.C.R. 114; Toronto (City) Board of Education v.
O.S.S.7E, District 15, [1997) 1 S.C.R. 487; Partridge
v. Rural Municipality of Lai’genburg, [1929] 3 W.W.R.
555; Fafard v. City of Quebec (1917), 39 D.L.R. 717;
Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, 2001
SCC 60; Kamloops (City of)v Nielsen, [1984] 2 S.C.R.
2; Swinamer v. Nova Scotia (Attorney General), [1994]
1 S.C.R. 445; Jaegli Enterprises Ltd. v. Taylor, [1981) 2
S.C.R. 2, rev’g (1980), 112 DL.R. (3d) 297 (sub nom.
Taylor v. The Queen in Right ofBritish Columbia), rev’g
(1978), 95 D.L,R. (3d) 82; Brown i British Columbia
(Minister of Transportation and Highways), [1994] 1
S.C.R. 420; Ryan v. Victoria (City), [1999) 1 S.C.R.
201; Schwartz v. Canada, [1996) 1 S.C.R. 254; Joseph
Brant Memorial Hospital v. Koziol, [1978] 1 S.C.R. 491;
Williams v. Town of North Battleford (1911), 4 Sask.
Jurisprudence
Citée par les juges lacobucci et Major
Arr€ts appliqués: Schwartz c. Canada, [1996] 1
R.C.S. 254; Toneguzzo-Norvell (Tutrice a l’insrance de)
c. Burnaby Hospital, [1994] 1 R.C.S. 114; Van de Perre
c. Edwards, [200112 R.C.S. 1014,2001 CSC 60; Canada
(Directeur des enquêtes et recherches) c. Southo.m Inc.,
[1997] 1 R.C.S. 748; Stein c. I.e navire Kathy K,
[1976] 2 R.C.S. 802; Geffen c. Succession Goodman,
[1991) 2 R.C.S. 353; Jaegli Enterprises Ltd. c. Taylor,
[1981] 2 R.C.S. 2; McCannell c. McLean, [19371 R.C.S.
341; Partridge c. Rural Municipality of Langenburg,
[1929] 3 W.W.R. 555; arrêt examine: Galaske c.
O’Donnell, [1994] 1 R.C.S. 670; arrêts mentionnés:
Gottardo Properties (Dome) Inc. c. Toronto (City)
(1998), 162 D.L.R. (4th) 574; Underwood c. Ocean
City Realty Ltd. (1987), 12 B.C.LR. (2d) 199; Woods
Manufacturing Co. c. The King, [19511 R.C.S. 504;
Ingles c. Tutkaluk Construction Lti, [2000] 1 R.C.S.
298, 2000 CSC 12; Ryan c. Victoria (Wile), [1999] 1
R.C.S. 201; Consolboard Inc. c. MacMillan Bloedel
(Saskatchewan) Ltd., [19811 1 R.C.S. 504; Anderson c.
Bessemer City, 470 U.S. 564 (1985); Schreiber Brothers
Ltd. c. Currie Products Ltd., [1980] 2 R.C.S. 78; Paisky
c. Humphrey, [1964] R.C.S. 580; Hodgkinson c. Simins,
[1994] 3 R.C.S. 377; Dube c. Labar, [19861 1 R.C.S.
649; C.N.R. c. Muller, [1934] 1 DL.R. 768; St-Jean c.
Mercier, [2002] 1 R.C.S. 491, 2002 CSC 15; Rhône (Le)
c. Peter AB. Widener (Le), [1993) 1 R.C.S. 497; Cork c.
Kirby MacLean, LtdL, [1952)2 AU ER. 402; Matthews c.
MacLaren (1969), 4 D.L.R. (3d) 557.
Citée par le juge Bastarache (dissident)
Canada (Directezsr des enquêtes et recherches) c.
Southam inc., [1997) 1 R.C.S. 748; Stein c. Le navire
Kathy K, [1976] 2 R.C.S. 802; Toneguzzo-Norveil
(Thtrice a l’instance de) c. Burnaby Hospital, [1994] 1
R.C.S. 114; Conseil de l’éducation de Toronto (Cite) c.
FE.E.KS.O., district 15, [1997) 1 R.C.S. 487; Partridge
c. Rural Municipality of Langenburg, [1929) 3 W.W.R.
555; Fafard c. City of Quebec (1917), 39 D.L.R. 717;
Van de Perre c. Edwards, [2001] 2 R.C.S. 1014, 2001
CSC 60; Kamloops (Wile de) c. Nielsen, [1984] 2 R.C.S.
2; Swinamer c. Nouvelle-Ecosse (Procureur général),
[1994] 1 R.C.S. 445; Jaegli Enterprises Ltd. c. Taylor,
[19811 2 R.C.S. 2, inf. (1980), 112 D.L.R. (3d) 297 (sub
nom. Taylor c. The Queen in Right ofBritish Columbia),
inf. (1978), 95 D.L..R. 82; Brown c. Colombie-Britannique
(Ministre des Transports et de la Voirie), [1994] 1
R.C.S. 420; Ryan c. Victoria (Wile), [1999) 1 R.C.S.
201; Schwartz c. Canada, [1996] 1 R.C.S. 254; Joseph
Brant Memorial Hospital c. Koziol, [1978) 1 RC.S. 491;
Williams c. Town of North Battleford (1911), 4 Sask.

244 HOUSEN V. NIKOLAISEN [2002]2S.C.R.
L.R. 75; Shupe v. Rural Municipality f Pleasantdale,
[1932] 1 W.W.R. 627; Galbiati v. City ofRegina, [1972]
2 W.W.R. 40; Just British Columbia, [1989] 2 S.C.R.
1228; Geffen v. Goodman Estate, [19911 2 S.C.R. 353;
Moge v. Moge, [1992] 3 S.C.R. 813; R. v. Nova Scotia
Pharmaceutical Society, [1992] 2 S.C.R. 606; Bose
Corp. v. Consumers Union of U.S, Inc., 466 U.S. 485
(1984); St-Jean v. Mercier, [2002] 1 S.C.R. 491, 2002
SCC 15; Schreiber Products Ltd. v. Currie Brothers
Ltd., (1980] 2 S.C.R. 78; Levey i Rural Municipality of
Rodgers. No. 133, [1921] 3 W.W.R. 764; Diebel Estate
Pinto Creek No. 75 (Rural Municipality) (1996), 149
Sask. R. 68; R v. Jennings, [1966] S.C.R. 532; County of
Parkland No. 31 v. Stetar, [197512 S.C.R. 884; Nelson v.
Waverley (Rural Municipality) (1988), 65 Sask. R. 260.
Statutes and Regulations Cited
Criminal Code, R.S.C. 1985, c. C-46.
Highway Traffic Act, S.S. 1986, c. 11-3.1, ss. 33(1),
44(1).
Rural Municipality Act, 1989, S.S. 1989-90, c. R-26.1, s.
192 [am. 1992, c. 63, s. 47;am. 1993, c. T-20.1, s. 7].
Authors Cited
American Bar Association. Judicial Administration
Division. Standards Relating to Appellate Courts.
Chicago: American Bar Association, 1995.
Cambridge International Dictionaiy of English.
Cambridge: Cambridge University Press, 1996,
“palpable”.
Gibbens, R. D. ‘Appellate Review of Findings of Fact”
(1991-92), 13 Advocates’ Q. 445.
Goodhart, A. L. ‘Appeals on Questions of Fact” (1955),
71LQ.R. 402.
Kerans, Roger P. Standards of Review Employed by
Appellate Courts. Edmonton: Juziliber, 1994.
New O.cford Dictionaiy of English. Edited by Judy
Pearsall. Oxford: Clarendon Prens, 1998, “palpable”.
Random House Dictiona?y ofthe English Language, 2nd
ad. Edited by Steart Berg Flexner. New York: Random
House, 1987, “palpable”.
Wright, Charles Alan. “The Doubtful Omniscience of
Appellate Courts” (1957), 41 Mimi. L Rev 751.
APPEAL from a judgment of the Saskatchewan
Court ofAppeal, [2000] 4 W.WR. 173, 189 Sask. R.
51, 9 M.P.L.R. (3d) 126, 50 M.V.R. (3d) 70, [2000]
Si. No. 58 (QL), 2000 SKCA 12, setting aside a
decision of the Court of Queen’s Bench, [1998] 5
W.W.R. 523, 161 Sask. R. 241, 44 M.P.L.R. (2d)
203, [1997) SJ. No. 759 (QL). Appeal allowed,
Gonthier, Bastarache, Binnie and LeBel 33.
dissenting.
L.R. 75; Shupe c. Rural Municipality of Pleasantdale,
[1932] 1 W.W.R. 627; Galbiati c. City ofRegina, [1972]
2 W.W.R. 40; Just c. Colombie-Britannique, [1989] 2
R.C.S. 1228; Geffen c. Succession Goodman, [1991] 2
R.C.S. 353; Moge c. Moge, [1992] 3 R.C.S. 813; R. c.
Nova Scotia Pharmaceutical Society, [1992] 2 R.C.S.
606; Bose Corp. c. Consumers Union of U.S., Inc., 466
U.S. 485 (1984); St-Jean c. Mercier, [2002] 1 R.C.S. 491,
2002 CSC 15; Schreiber Brothers Ltd. c. Currie Products
LtiL, [198012 R.C.S. 78; Levey c. Rural Municipality of
Rodgers No. 133, [1921] 3 W.W.R. 764; Diebel Estate
c. Pinto Creek No. 75 (Rural Municipality) (1996), 149
Sask. R. 68; R. c. Jennings, [1966] R.C.S. 532; Comté de
Parkiand n° 31 c. &etar, 11975] 2 R.C.S. 884; Nelson c.
Waverley (Rural Municipality) (1988), 65 Sask. R. 260.
Lois et règlements cites
Code criminel,L.R.C. 1985, ch. C-46.
Highway Traffic Act, S.S. 1986, ch. H-3.1, art. 33(1),
44(1).
Rural Municipality Act, 1989, S.S. 1989-90, ch. R-26.1,
art. 192 [mod. 1992, ch. 63, art. 47; mod. 1993, ch.
T-20d, art. 7].
Doctrine citée
American Bar Association Judicial Administration
Division. Standards Relating to Appellate Courts.
Chicago : American Bar Association, 1995.
Gibbens, R. D. >
(1991-92), 13 Advocates’ Q. 445.
Goodhart, A. L.
(1955), 71 LQ.R. 402.
Grand Larousse de Ia lo.nguefrançaise, Paris : Librairie
Larousse, 1975, >.
Grand Robert de Ia langue française, 2 Cd. Paris:
Dictionnaires Le Robert. 2001, .
Kerans, Roger P. Standards of Review Employed by
Appellate Courts. Edmonton : Juriliber, 1994.
Trésor de Ia langue francaise. Paris: Gaflumard, 1985,
>.
Wright, Charles Alan.

[2002) 2 R.C.S. HOUSEN c. NIKOLAISEN Lesfuges lacobucci et Major 245
Gary D. Young, Q.C., Denis I. Quon and M. Kim
Anderson, for the appellant.
Michael Morris and G. L Gerrand, Q.C., for the
respondent.
Thejudgment of McLachlin CJ. and L’Heureux
Dubd, lacobucci, Major and Arbour JJ. was deliv
eredby
LACOBUCCI AND MAJOR JJ. —
L Introduction
A proposition that should be unnecessary to state
is that a court of appeal should not interfere with a
trial judge’s reasons unless there is a palpable and
overriding error. The same proposition is some
times stated as prohibiting an appellate court from
reviewing a trial judge’s decision if there was some
evidence upon which he or she could have relied to
reach that conclusion.
Authority for this abounds particularly in appel
late courts in Canada and abroad (see Gottardo
Properties (Dome) Inc. v. Toronto (City) (1998), 162
D.L.R. (4th) 574 (Ont. CA.); Schwartz v. Canada,
[19961 1 S.C.R. 254; Toneguzzo-Norvell (Guardian
ad litem of) v. Burnaby Hospital, [19941 1 S.C.R.
114; Van de Perre v. Edwards, [200112 S.C.R. 1014,
2001 SCC 60). In addition scholars, national and
international, endorse it (see C. A. Wright in “The
Doubtful Omniscience of Appellate Courts” (1957),
41 Mimi. L Rei 751, atp. 780; and the Honourable
R. P. Kerans in Standards of Review Employed
by Appellate Courts (1994); and American Bar
Association, Judicial Administration Division,
Standards Relating to Appellate Courts (1995), at
pp. 24-25).
The role of the appellate court was aptly defined
in Underwood v. Ocean City Realty LtcL (1987), 12
B.C.L.R. (2d) 199 (CA.), at p. 204, where it was
stated:
The appellate court must not retry a case and must not
substitute it8 views for the views of the trialjudge accord
ing to what the appellate court tbinks the evidence estab
lishes on its view of the balance of probabilities.
• Gary D. Young, c.z:, Denis 1. Quon et M. Kim
Anderson, pour l’appelant. V
Michael Morris et G. L. Gerrand, c.i, pour
l’intimde. V
Version française du jugement du juge en chef
McLachlln et desjuges L’Heureux-Dub, lacobucci,
Major et Arbour rendu par
LBS JUGES LkCOBUCCI ET MAJOR —
I. Introduction
Xl va sans dire qu’üne cour d’appel ne devrait
modifier les conclusions d’un juge de prenii&re ins
tance qu’en cas d’erreurmanifeste et dominante. On
reformule parfois cette proposition en disant qu’une
cour d’ appel ne peut reviser Ia decision du juge de
premiere instance dans les cas oti U existait des did
ments de preuve qui pouvaient dtayer cette ddci
sion.
Ii existeune abondantejurisprudence dtayantcette
proposition, particulièrement des ddcisions dmanant
de cours d’ appel, tant au Canadaqu’ a 1’ dtranger (voir
Gottardo Properties (Dome) Inc. c. Toronto (City)
(1998), 162 DIR. (4th) 574 (C.A. Out.); Schwartz
c. Canada, [1996] 1 R.C.S. 254; Toneguzzo-Norvell
(Tutrice a l’instance de) c. Burnaby Hospital,
[1994] 1 R.C.S. 114; Van de Perre c. Edwards,
[2001] 2 R.C.S. 1014, 2001 CSC 60). En outre, des
auteurs, taut a l’dchelle nationale qu’intemationale,
y souscrivent (voir C. A. Wright, cc The Doubtful
Omniscience of Appellate Courts>> (1957), 41
Mimi. L Rev. 751,p. 780; l’honorable R. R Kerans,
Standards of Review Employed by Appellate
Courts (1994); et American Bar Association,
Judicial Administration Division, Standards
Relating to Appellate Courts (1995), p. 24-25).
Le role des tribunaux d’appel a dtd ddflui de
manière judicieuse dans 1’ arrêt Underwood c.
Ocean City Realty LtcL (1987), 12 B.C.LR. (2d)
199 (C.A.), p. 204, oü la cour a dit ceci:
[TRADUCTION) La cour d’appel ne dolt pasjuger l’affaire
de nouveau, ni substituer son opinion a cefle du juge de
premiere instance en fonction de cc qu’elle pense que Ia
preuve ddmontre, selon son opinion de Ia prépondérance
des probabilitds.
1
2

5
246 HOUSEN v. NIKOLAJSEN lacobucci and Major JJ. [2002] 2 S.C.R.
while the theory has acceptance, consistency
in its application is missing. The foundation of the
principle is as sound today as 100 years ago. It is
premised on the notion that finality is an important
aim of litigation. There is no suggestion that appel
late court judges are somehow smarter and thus.
capable of reaching a better result. Their role is
not to write better judgments but to review the rea
Sons in light of the arguments of the parties and the
relevant evidence, and then to uphold the decision
unless a palpable error leading to a wrong result has
been made by the trial judge.
what is palpable error? The New Oxford
Dictionary ofEnglish (1998) defines “palpable” as
“clear to the mind or plain to see” (p. 1337). The
Cambridge International Dictionary of English
(1996) describes it as “so obvious that it can easily
be seen or known” (p. 1020). The Random House
Dictionary of the English Language (2nd ed. 1987)
defines it as “readily or plainly seen” (p. 1399).
6 The common element in each of these defini
tions is that palpable. is plainly seen. Applying that
to this appeal, in order for the Saskatchewan Court
of Appeal to reverse the trial judge the “palpable
and overriding” error of fact found by Cameron J.A.
must be plainly seen. As we will discuss, we do not
think that test has been met.
II. The Role of the Appellate Court in the Case at
Bar
Given that an appeal is not a retrial of a case, con
sideration must be given to the applicable standard
of review of an appellate court on the various issues
which arise on this appeal. We therefore find it help
ful to discuss briefly the standards ofreview relevant
Quoique cette théorie soit généralemeut accep
tee, elle n’est pas appliquée de manière systemati
que. Le fondement de cette theorie est aussi valide
aujourd’hui qu’il l’était ii y a 100 ans. Cette théorie
repose stir l’idée que le caractère déflnitif des dCci
sions est un aspect important du processusjudiciaire.
Personne ne pretend que lesjuges des cours d’appel
seraient, d’une manière ou d’une autre, plus inteui
gents que les autres et donc capables d’axriver a tin
meilleur résultat. Leur role n’est pas de rédiger de
meilleurs jugements, mais de contrôler les motifs a
la lumière des arguments des parties et de la preuve
pertinente, puts de conflrmer la decision a moms
que le juge de preniière instance n’ ait cominis tine
erreur manifeste ayant conduit a tin résuhat erroné.
Qu’est-ce qu’une erreur manifeste? Le Trsor
de la langue francaise (1985) ddfinit ainsi le mot
manifeste>> : (p. 317). Le Grand
Robert de Ia languefrançaise (2 éd. 2001) définit
ce mot ainsI : (p. 1139).
Enfin, le Grand Larousse de la langue francaise
(1975) donne Ia definition suivante de : (p. 3213).
L’élCment conimun de ces definitions est qu’une
chose c> est tine chose qui est >. Si l’on applique ce critère au present pour
voi, il faut que l< erreur manifeste et dominante>>
dCcelée par le juge Cameron soit Cvidente pour que
la Cour d’appel de la Saskatchewan puisse infirmer
in decision de la juge de premiere instance. Comme
nous le verrons plus loin, nous ne croyous pas qu’on
a satisfait a ce critère en l’espCce.
II. Le rOle de Ia Cour d’appel en l’espèce
Etant donné que l’appei ne constitue pas iiii
nouveau procès, il faut se demander queUe est In
norme de contrôle applicable en appel a l’Cgard des
diverses questions que soulève le present pourvoi.
Nous estimons donc utile d’exaininer brièvement

[20021 2 R.C.S. HOUSEN C. NIKOLAJSEN Lesjuges lacobucci et Major 247
to the following types of questions: (1) questions of
law; (2) questions of fact; (3) inferences of fact; and
(4) questions of mixed fact and law.
A. Standard ofReviewfor Questions ofLaw
On a pure question of law, the basic rule with
respect to the review of a thai judge’s findings is
that an appellate court is free to replace the opinion
of the trial judge with its own. Thus the standard of
review on a question of law is that of correctness:
Kerans, supra, at p. 90.
There are at least two underlying reasons for
employing a correctness standard to matters of law.
First, the principle of universality requires appel
late courts to ensure that the same legal rules are
applied in similar situations. The importance of this
principle was recognized by this Court in Woods
Manufacturing Co. v. The King, [1951] S.C.R. 504,
atp. 515:
It is fundamental to the due administration ofjustice that
the authority of decisions be scrupulously respected by
all courts upon which they are binding. Without this uni
form and consistent adherence the administration ofjus
tice becomes disordered, the law becomes uncertain, and
the confidence of the public in it undermined. Nothing
is more important than that the law as pronounced...
should be accepted and applied as our tradition requires;
and even at the risk of that fallibility to which all judges
are liable, we must maintain the complete integrity of
relationship between the courts.
A second and related reason for applying a correct
ness standard to matters of law is the recognized
law-making role of appellate courts which is pointed
out by Kerans, supra, at p. 5:
The call for universality, and the law-settling role
it imposes, makes a considerable demand on a review
ing court. It expects from that authority a measure of
expertise about the art of just and practical rule-makiiig,
an expertise that is not so critical for the first court.
Reviewing courts, in cases where the law requires settle
ment, make law for future cases as well as the case under
review.
les normes de contrôle se rapportant a chacune des
categories de questions suivantes : (1) les questions
de droit; (2) les questions de fait; (3) les inferences
de fait; (4) les questions mixtes de fait et de droit.
A. La norme de contrôle applicable awc questions
de droit
Dans le cas des pures questions de droit, la règle
fondamentale applicable en mafière de contrôle des
conclusions du juge de premiere instance eat que
lea cours d’appel out toute latitude pour subsdtuer
leur opinion a celle des juges de premiCre instance.
La norme de conirôle applicable a une question de
droit eat donc celle de la decision correcte : Kerans,
op. cit.,p. 90.
Au moms deux raisons justiflent 1’ application de
la norme de la decision correcte aux questions de
droit. Premièrement, Ic principe de l’universalitd
impose aux cours d’appel le devoir de veiller a cc
que lea mêmes règles de droit soient appliquées clans
des situations similaires. Notre Cour a reconnu l’im
portauce de ce principe dans Woods Manufacturing
Co. c. The King, [1951] R.C.S. 504, p. 515:
[TRADUCTI0NJ U est fondamental, pour assurer Ia bonne
administration de Ia justice, que l’autoritd des decisions
soit scrupuleusement respectde par tous lea tribunaux qui
sout liCes par des. Sans cette adhesion générale et cons
tante, l’administration de lajustice sera désoxdonnée, le
droit deviendra incertain et Ia conulance dans celul-ci sera
ébranlée. U imports plus que tout que Ic droit, tel qu’ii a
etC Cnoncd, [. . .1 soit acceptC et appliqué coinme l’exige
notre tradition; et m&ne au risque de noun tromper, tons
les juges Ctaxit faillibles, nous devons preserver totale
Inent l’intdgritd des rapports mitre lea tribunaux.
Une deuxième raison, connexe, d’appliquer Ia
norme de la decision correcte aux questions de droit
dent an rãle qu’ou reconnait aux cours d’appel en
matière de creation du droit et qu’a soulignd Kerans,
op. cit.,p. 5:
[TRADUCrION] Le-principe-de_l’un±versalitC — et le
rôle de crEation clii droit qu’il emporte —
exige
beaucoup
du tribunal de rEvision. U exige de ce tribunal qu’il fasse
preuve d’un certain degrd d’expertise dana l’art d’Claborer
une règle de droitjuste et pratique, expertise qui ne revêt
pas ure importance aussi cruciale pour le premier tribu
naL Dans lea affaires oil le droit n’est pas xé, le tribunal
de revision elabore des rCgles de droit applicables tout
autaut a d’dventuelles affaires qu’a ceUe clout ii eat saisi.
8
9

10
11
248 HOUSEN v.NIKOLAISEN lacobucci and Major JJ
Thus, while the primary role of trial courts is to
resolve individual disputes based on the facts before
them and settled law, the primary role of appel
late courts is to delineate and refine legal rules and
ensure their universal application. In order to fulfill
the above functions, appellate courts require a broad
scope of review with respec to matters of law.
B. Standard ofReviewfor Findings ofFact
The standard of review for findings of fact is that
such findings are not to be reversed unless it can be
established that the trial judge made a “palpable
and overriding error”: Stein v. The Ship “Kathy K”,
[1976] 2 S.C.R. 802, at p. 808; Ingles v. Tutkaluk
Construction Ltd., [2000] 1 S.C.R. 298, 2000 SCC
12, at para. 42; Ryan v. Victoria (City), [19991 1
S.C.R. 201, at para. 57. While this standard is often
cited, the principles underlying this high degree of
deference rarely receive mention. We find it useful,
for the purposes of this appeal, to review briefly the
various policy reasons for employing a high level of
appellate deference to findings of fact.
A fundamental reason for general deference to
the trialjudge is the presumption of fitness —apre
sumption that trial judges are just as competent as
appellate judges to ensure that disputes are resolved
justly. Keraus, supra, at pp. 10-11, states that:
If we have confidence in these systems for the resolu
don of disputes, we should assume that those decisions
are just. The appeal process is part of the decisional
process, then, only because we recognize that, despite all
effort, errors occut An appeal should be the exception
rather than the rule, as indeed it is in Canada.
12 With respect to findings of fact iii particular, in
Gottardo Properties, supra, Laskin J.A. summa
rized the purposes underlying a deferential stance as
follows (at para. 48):
[2002] 2 S.C.R.
Ainsi, alors que le rôle premier des tribunaux de
premiere instance consiste a résoudre des litiges sur
la base des fails dont us disposent et du droit établi,
celui des cours d’ appel eat de préciser et de raffi
ner les règles de droit et de veffler a leur application
universelle. Pour s’ acquitter de ces roles, les cours
d’appel ont besoin d’un large pouvoir de contrôle a
l’dgard des questions de droit.
B. La norme de contrôle applicable aux questions
defait
Suivant Ia norme de coutrOle applicable aux con
clusions de fait, ces conclusions ne peuvent être
infirmdes que s’il est établi que le juge de premiere
instance a commis une> : Stein c. Le navire Kathy K, [1976] 2
R.C.S. 802, p. 808; Ingles c. Tutkaluk Construction
Ltd., [2000] 1 R.C.S. 298, 2000 CSC 12, par. 42;
Ryan c. Victoria (Ville), [1999] 1 R.C.S. 201, par.
57. On cite souvent cette norme, mais rarement les
principes justiflant ce degré élevd de retenue. Pour
les besoins du present pourvoi, nous estimons qu’il
est utile d’examiner brièvement les diverses consi
dérations de principe qui incitent les cours d’ appel
a faire preuve d’un degrd elevé de retenue a l’égard
des conclusions de fail.
L’une des raisons fondamentales de cette rete
nue géndrale a i’ dgard des conclusions des juges de
premiere instance tient a la présomption d’aptitude
a juger — prCsomption selon laquelle lea juges de
premiere instance sont tout aussi aptes que lea juges
d’ appel a apporter des solutions justes aux litiges.
Kerans, op. cit., dit ccci aux p. 10-11:
[TRADUCflON] Si nous nous fions a ces systèmes pour
régler lea différends, II nous faut presumer que lea déci
sions qu’ils produisent sontjustes. La procedure d’appel
ne fait en consequence panic du processus dCcisionnel
que parce que nous reconnaissons que, malgré tous
lea efforts déployds, des ezreurs se produisent. L’appel
devrait être l’exception plutôt que la rCgle, ce qui est
d’ailleurs le cas au Canada.
Pour cc qul eat des conclusions de fait enp
ticulier, dans Gottardo Properties, précitd, le juge
Laskin de la Cour d’appel de l’Ontario a résumé
ainsi lea objectifs qui sous-tendent Ic principe de la
retenue judiciaire (au par. 48):

[2002] 2 R.C.S. HOUSEN c. NIKOLAISEN Lesjuges lacobucci et Major 249
Deference is desirable for several reasons: to limit the
number and length of appeals, to promote the autonomy
and integrity of the trial or motion court proceedings on
which substantial resources have been expended, to pre
serve the confidence of litigants inthose proceedings, to
recognize the competence of the trial .judge or motion
judge and to reduce needless duplication ofjudicial effort
with no corresponding improvement in the quality of
justice.
Similar concerns were expressed by La Forest 3. in
Schwartz, supra, at para. 32:
It has long been settled that appellate courts must treat
a trial judge’s findings of fact with great deference. The
rule is principally based on the assumption that the trier of
fact is in a privileged position to assess the credibility of
witnesses’ testimony at trial. . . . Others have also pointed
out additional judicial policy concerns to justify the rule..
Unlimited intervention by appellate courts would greatly
increase the number and the length of appeals generally.
Substantial resources are allocated to trial courts to go
through the process of assessing facts. The autonomy
and integrity of the trial process must be preserved by
exercising deference towards the trial courts’ findings of
fact; see R. D. Gibbens, “Appellate Review of Findings
of Fact” (1992), 13 Adv. Q. 445, at pp. 445-48; Fletcher
v. Manitoba Public insurance Co., [19901 3 S.C.R. 191,
atp. 204.
See also in the context of patent litigation,
Consolboard Inc v. MacMillan Bloedel (Sas
katchewan) Ltd., [19811 1 S.C.R. 504, at p. 537.
In Anderson v. Bessemer City, 470 U.S. 564
(1985), at pp. 574-75, the United States Supreme
Court also listed numerous reasons for deferring to
the factual findings of the trial judge:
The rationale for deference to the original finder of
fact is not limited to the superiority of the trial judge’s
position to make determinations of credibility. The trial
judge’s major role is the determination of fact, and
with experience in fulfilling that role comes expertise.
Duplication of the trial judge’s efforts in the court of
appeals would very likely contribute only negligibly
to the accuracy of fact determination at a huge cost in
diversion ofjudicial resources. In addition, the parties to
a case on appeal have already been forced to concentrate
[TRADUcrION] La retenue eat souhaitable pour diverses
raisons : pour limiter le nombre et la durde des appels,
pour promouvoir 1’ autonomie et l’intdgritd des procddu
res devant le tribunal de premiere instance cu la cour des
requêtes auxquelles de nombrçuses ressources oat ét
consacrées, pour maintenir Ia conflance des plaideurs,
pour reconnaItre Ia competence du juge do premiere
instance ou du juge des requetes, et pour réduire Ia miii
tiplication inutile des procedures qui n’entraiuent aucune
amelioration correspondante de Ia qualitC de Ia justice.
Le juge La Forest a exprimd des preoccupations
semblables dana l’arrêt Schwartz, prdcitd, par. 32:
Ii est dtabli depuis longtemps que lea cours d’appel
doivent faire preuve d’une grande retenue a l’dgard des
conclusions de fait d’un juge do premiere instance. La
règle se justifie principalement par la situation avan
tageuse dont bCndficie le juge des faits pour ce qui est
d’évaluer Ia crddibilitd des tdmoignages eutendus au
procès. [. . .1 D’autres prdoccupations liées a lapolitique
judiciaire ont par ailleurs étd invoqudes pour justifier la
règle. Une intervention illimitée des cours d’appel ferait
augmenter considdrablement le nombre et Ia durée des
appels en gCndral. D’importantes ressources sout mises
a in disposition des tribunaux de premiere instance
pour qu’ils puissent dvaluer lea faita. U faut preserver
l’autonomie et l’intégritd du procès en faisant preuve de
retenue a l’dgard des conclusions do fait des tribunaux
do preniière instance; voir R. D. Gibbons, (1992), 13 Adv Q. 445, aux
pp. 445 a 448; Fletcher c. SocWté d’assurance publique
du Manitoba, [1990] 3 R.C.S. 191, a La p. 204.
Voir aussi, clans le contexte d’une poursuite touchant
un brevet, Consolboard inc. c. MacMillan Bloedel
(Saskatchewan) Ltd., [1981] 1 R.C.S. 504, p. 537.
Dans Anderson c. Bessemer City, 470 U.S. 564
(1985), p. 574-575, J.a Cour supreme des Etats-Unis
a aussi dressd tine liste de raisons qui justiflent de
faire preuve do retenue a l’dgard des conclusions de
fait des juges de premiere instance:
[TRADUcrION] La raison d’8tre de Ia retenue a l’Cgard
des conclusions de falt du juge do premiere instance
no se lintite pas au fair que cc demnier eat mieux place
pour statuer sur la crddibilitd. Le role principal do
juge de premiere instance eat do constater lea faits, et
l’expérience qu’il acquiert en s’acquittant de ce rOle liii
confère son expertise a cet dgard. Si lea cours d’appel
refaisaient le travail du juge de premiere instance, ii est
fort possible que ces efforts n’amélioreraient que mar
ginalement l’exactitude des conclusions de fait, malgré
13

14
15
16
250 HOUSEN v. NIKOLAISEN lacobucci and Major JJ. [2002) 2 S .C.R.
their energies and resources on persuading the trial judge
that their account of the facts is the correct one; requir
ing them to persuade three more judges at the appellate
level is requiring too much. As the Court has stated in a
different context, the trial on the merits should be “the
‘main event’. . . rather than a ‘tryout on the road.”’...
For these reasons, review of factual findings under the
its deference to the
trier of fact — is the rule, not the exception.
clearly-erroneous standard —
with
Further comments regarding the advantages pos
sessed by the trial judge have been made by R. D.
Gibbens in “Appellate Review of Findings of Fact”
(1991-92), l3Advocates’Q. 445, atp. 446:
The trial judge is said to have an expertise in assessing
and weighing the facts developed at trial. Similarly, the
trial judge has also been exposed to the entire case. The
thaijudge has sat through the entire case and his ultimate
judgment reflects this total familiarity with the evidence.
The insight gained by the trial judge who has lived with
the case for several days, weeks or even months may be
far deeper than that of the Court of Appeal whose view
of the case is much more limited and narrow, often being
shaped and distorted by the various orders or rulings
being challenged.
The corollary to this recognized advantage of trial
courts and judges is that appellate courts are in
a favourable position to assess and determine fac
tual matters. Appellate court judges are restricted
to reviewing written transcripts of testimony. As
well, appeals are unsuited to reviewing voluminous
amounts of evidence. FinaUy, appeals are telescopic
in nature, focussing narrowly on particular issues as
opposed to viewing the case as a whole.
In our view, the numerous bases for deferring to
the findings of fact of the trial judge which are dis
cussed in the above authorities can be grouped into
the following three basic principles.
(1) Limiting the Number, Length and Cost of
Appeals
Given the scarcity of judicial resources, set
ting limits on the scope of judicial review is to be
les ressourcesjudiciaires considérables qui devraient être
réaffectdes a cette fin. En outre, lea parties a un appel
ont déjà dii consacrer energies et ressources a convain
crc le juge de premiere instance de la justesse de leur
version des fairs; ce serait abuser que de lear demander
de convaincre trois autres juges en appel. Cornme l’a dit
notre Cour dana an contexte different, le procCs sur le
fond devrait etre considéré comma (1991-92), 13 Advocates’Q. 445,
p. 446:
[mADUCrJ0N] On dir que le juge de premiere instance
possêde de l’expertise dans l’dvaluation at l’appréciation
des faits prdsentds au procès. Ii a dgaleinent entendu l’af
faire au complet. Ii a assistd a toute la cause et son juge
ment final reflCte cette connaissance intime de Ia preuve.
Cette connaissance, acquise par le juge an fri des jours,
des semaines voire des mois qu’a durds l’affaire, pent
se rdvéler beaucoup plus profonde que celle de Ia cour
d’appel, dont Ia perception eat beaucoup plus lirnirde et
Ctroite, et souvent ddterminée et ddformde par lea diver-
sea ordonnances et decisions qui sont contestées.
Cet avantage reconnu des tribunaux et des juges de
premiere instance a pour corollaire que lea cours
d’ appel ne sontp dans une position favorable pour
Cvaluer et apprdcier lea questions de fair. Lea juges
des cours d’appel n’exarninent que Ia transcription
des tCrnoignages. Dc plus, lea appels ne se prêtent
pas a 1’ examen de dossiers volumineux. Balm, les
appels ont un caractère focalisateur >>, en cc qu’ils
s’attachent a des questions particulières plutôt qu’à
l’ensemble de l’affaire.
A noire avis, ces diverses raisons justilmant
la retenue a l’dgard des conclusions de fait dii
juge de premiere instance peuvent être regroupdes
sous les trois principes de base suivants.
(1) Réduire Ic nombre, in durde et le coüt des
appels
Vu la raretC des ressources dont disposent
lea tribi.maux, il faut encourager l’dtablissement

[200212 R.C.S. HOUSEN c. NIKOLAISEN Lesjuges Jacobucci et Major 251
encouraged. Deferring to a trial judge’s findings of
fact not only serves this end, but does so on a prin
cipled basis. Substantial resources are allocated to
trial courts for the purpose of assessing facts. To
allow for wide-ranging review of the trial judge’s
factual findings results in needless duplication of
judicial proceedings with little, if any improvement
in the result. In addition, lengthy appeals prejudice
litigants with fewer resources, and frustrate the goal
of providing an efficient and effective remedy for
the parties.
(2) Promoting the Autonomy and Integrity of
Trial Proceedings
The presumption underlying the structure of
our court system is that a trial judge is competent
to decide the case before him or her, and that a just
and fair outcome will result from the trial process.
Frequent and unlimited appeals would undermine
this presumption and weaken public confidence in
the trial process. An appeal is the exception rather
than the rule.
(3) Recognizing the Expertise of the Trial Judge
and His or Her Advantageous Position
The trial judge is better situated to make factual
findings owing to his or her extensive exposure to
the evidence, the advantage of hearing testimony
viva voce, and the judge’s familiarity with the case
as a whole. Because the primary role of the trial
judge is to weigh and assess voluminous quanti
ties of evidence, the expertise and insight of the trial
judge in this area should be respected.
C. Standard ofReview for Inferences ofFact
We find it necessary to address the appropriate
standard of review for factual inferences because
the reasons of our colleague suggest that a lower
standard of review may be applied to the inferences
of fact drawn by a trial judge. With respect, it is our
de lirnites a la portde du contrôle judiciaire. La
retenue a l’gard des conclusions de. fait du
juge de premiere instance sert cet objectif d’une
manière rationneile. D’importantes ressources sont
alloudes aux tribunaux de premiere instance aux
fins d’évaluation des faits. Permettre un large
contrôle des conclusions factuelles des juges
de premiere instance entraine une inutile rpéti
don de procedures judiciaires, tout en n’ ameliorant
que peu ou pas Ic rsu1tat. En outre, de longs
appels causent prejudice aux plaideurs moms bien
nantis et compromettent l’objectif qui consiste a
mettre a leur disposition des recours efficients et
efficaces.
(2) Favoriser 1’ autonomie du procès et son
intégritC
L’organisation de notre système judiciaire repose
sur la présomption que le juge de premiere instance
est qualifid pour trancher l’affaire dont ii est saisi
et qu’une solution juste et equitable résultera du
procès. Des appels frequents et ilhimités affaibli
ralent cette présomption et saperait la conflance du
public dans le processus judiciaire. L’appelestl’ex
ception; non ha règle.
(3) ReconnaItre 1’ expertise du juge de premiere
instance et sa position avantageuse
Le juge de premiere instance est celui qui
est le mIeux place pour tirer des conclusions
de fait, parce qu’il a I’occasion d’examiner la
preuve en profondeur, d’entendre les témoiguages
de vive voix et de se famiiiariser avec l’affaire dans
son ensemble. Etant donnC que le role principal du
juge de premiere instance est d’apprécier et de sou
peser d’abondantes quantités d’elénients de preüve,
son expertise dans cc domaine et sa connaissance
intime du dossier doivent être respectées.
C. La norme de contrôle applicable aux inferences
defait
Nous estimons nécessaire de nous pencher sur la
question de la norme de contrôle appropriée quant
aux inferences de fait des juges de premiere ins
tance, parce que lea motifs de notre collègue suggè
rent qu’ime norme de contrOle moms exigeante peut
17
18
19

20
21
252 HOUSEN V. NIKOLAJSEN lacobucci and Major JJ [2002] 2SCR.
view, that to apply a lower standard of review to
inferences of fact would be to depart from estab
lished jurisprudence of this Court, and would be
contrary to the principles supporting a deferential
stance to matters of fact.
Our colleague acknowledges that, in Geffen v.
Goodman Estate, [1991] 2 S.C.R. 353, this Court
determined that a trial judge’s inferences of fact and
findings of fact should be accorded a similar degree
of deference. The relevant passage from Geffen is
the following (per Wilson J., at pp. 382-89):
It is by now well established that findings of fact made
at trial based on the credibility of witnesses are not to be
reversed on appeal unless it is established .that the trial
judge made some palpable aiid overriding error which
affected his assessment of the facts ... . Even where
a finding of fact is not contingent upon credibility, this
Court has maintained a non-interventionist approach to
the r view of trial court findings...
And even in those cases where a finding of fact is nei
ther inextricably linked to the credibility of the testifying
witness nor based on a misapprehension of the evidence,
the rule remains that appellate review should be limited
to those instances where a manifest error has been made.
Hence, in Schreiber Brothers LtcL v. Currie Products LkL,
[19801 2 S.C.R. 78, this Court refused to overturn a trial
judge’s finding that certain goods were defective, stating
at pp. 84-85 that it is wrong for an appellate court to set
aside a trialjudgment where the only point at issue is the
interpretation of the evidence as a whole (citing Médvier
v. Cadorette, [1977] 1 S.C.R. 371).
This view has been reiterated by this Court on
numerous occasions: see Paisky v. Humphrey,
[1964] S.C.R. 580, at p. 583; Schwartz, supra, at
para. 32; Hodgkinson v. Simms, [1994] 3 S.C.R.
377, at p.
426, per La Forest 3.; Toneguzzo-Norvell,
supra. The United States Supreme Court has taken a
similar position: see Anderson, supra, at p. 577.
In discussing the standard of review of the trial
judge’s inferences of fact, our colleague states, at
para. 103, that
être appliqude a cet gard. En toute ddfdrence, nous
sonimes d’avis que l’application d’tme telle norme
de coniiôle romprait avec lajurisprudence établie de
notre Cour en la matière et serait coritraire aux prin
cipes justIflant le respect d’une attitude empreinte
de retenue a l’dgard des constatations de fait.
Noire collègue reconnalt que dans l’arrêt Geffen
c. Succession Goodman, [1991] 2 R.C.S. 353, notre
Cour ajugd qu’il fallait faire preuve du même degré
de retenue a l’dgard des inferences de fait du juge
de premiere instance qu’à l’dgard de ses constata
tions de fait. Void le passage pertinent des motifs de
madame le juge Wilson (aux p. 388-389):
C’est maintenani un principe bien dtabli que les cons
tatations de fait d’un juge de premiere instance, fonddes
sur la crédibilitd des tdmoins, ne doivent pas êire infir
mdes en appel a moms qu’il ne soit prouvé que le juge
de prenuière instance a commis une erreur manifeste et
dorninante qui a faussé son appreciation des faits [..
Même si uric constatation de fail ne depend pas de in crC
dibilitC, notre Cour a pour principe de ne pas intervenir
pour niviser lea constatations des tribunaux de premiere
instance.
Et même darts les cas oü une constatation de fait n’est
ni liCe inextricablement a la crCdibilitC du tCmoin ni
foiidCe sur une mauvaise comprehension de Ia preuve, la
rCgle reste la même : l’examen en appel devrait se limi
ter aux cas oü une erreur manifeste a CtC commise. C’est
pourquoi, dana l’arrêt Schreiber Brothers Ltd. c. Currie
Products Lta, [19801 2 R.C.S. 78, notre Cour a refusC
d’inflrmer la conclusion du juge de premiere instance
que certaines marchandises Ctaient défectueuses, disant,
aux pp. 84 et 85, qu’une cour d’appel ne peut a bon droit
infiriner une decision de premiere instance lorsque Ia
seule question en litige porte sur l’interprdtation de l’en
semble de la preuve (citant MJtivier c. Cadorette, [1977]
1 R.C.S. 371).
Notre Cour a rCitdrC cette opinion a maintes repri
sea: voir Paisky c. Humphrey, [19641 R.C.S. 580,
p. 583; Schwartz, prdcitd, par. 32; Hodgkinson
c. Simms, [1994] 3 R.C.S. 377, p. 426, le juge
La Forest; Toneguzzo-Norvell, prdcitd. La Cour
supreme des Etats-Unis a adoptC une position scm
blable : voir Anderson, prCcitC, p. 577.
Dans son examen de la norme de conlrôle appli
cable aux inferences de fail dujuge de premiere ins
tace, notre collCgue dit cc qui suit, au par. 103:

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lesjuges lacobucci et Major 253
In reviewing the making of an inference, the appeal
court will verify whether it can reasonably be sup
ported by the findings of fact that the trial judge reached
and whether the judge proceeded on proper legal prin
ciples.... While the standard of review is identical
for both findings of fact and inferences of fact, it is
nonetheless important to draw an analytical distinction
between the two. If the reviewing court were to review
only for errors of fact, then the decision of the trial
judge would necessarily be upheld in every case where
evidence existed to support his or her factual findings. In
my view, this Court is entitled to conclude that inferences
made by the trial judge were clearly wrong, just as it is
entitled to reach this conclusion in respect to findings of
fact. [Emphasis added.]
With respect, we find two problems with this pas
sage. First, in our view, the standard of review is not
to verify that the inference can be reasonably sup
ported by the findings of fact of the trial judge, but
whether the trial judge made a palpable and overrid
jg error in coming to a factual conclusion based on
accepted facts, which implies a stricter standard.
Second, with respect, we find that by drawing
an analytical distinction between factual findings
and factual inferences, the above passage may lead
appellate courts to involve themselves in an unjusti
fied reweighing of the evidence. Although we agree
that it is open to an appellate court to find that an
inference of fact made by the trial judge is clearly
wrong, we would add the caution that where evi
dence exists to support this inference, an appellate
court will be hard pressed to find a palpable and
overriding error. As stated above, trial courts are in
an advantageous position when it comes to assess
ing and weighing vast quantities of evidence. hi
making a factual inference, the trial judge must sift
through the relevant facts, decide on their weight,
and draw a factual conclusion. Thus, where evi
dence exists which supports this conclusion, inter
ference with this conclusion entails interference
with the weight assigned by the trial judge to the
pieces of evidence.
La cour d’appel gui contrôle la validité d’une, inference
se demaude Si celle-ci peut raisonnablement être Ctayée
par les conclusions de fait tirées par le juge de premiere
instance et si celui-ci a appliqué les principes juxidi
ques approprids. [...] Bien que la norme de contrâle
soit Ia même et pour les conclusions de fait et pour les
inferences de fait, il importe néanmoius de faire une
distinction analytique entre les deux. Si le tribunal de
revision ne faisait gue v&ifier s’il y a des elreurs de
fait, Ia decision du juge de premiere instance serait alors
nécessaIremerit confimiCe dais tons les cas cit il existe
des ClCments de preuve étayant les conclusions de faitde
cc dernier. Scion mnoi, notre Cour a le droit de conclure
que les inferences du juge de premiere instance étaient
manifestement errondes, tout conime elle peut le faire a
l’dgard des conclusions de fait. [Nous soulignons.1
En toute ddfCrence, nous estimons que cc passage
comporte deux erreurs. Preniièrement, scion nous,
la nornie de contrôle ne consiste pan a verifier si
i’inférence peut être raisonnabiement étayde par les
conclusions de fait du juge de premiere instance,
mais plutôt Si cc dernier a commis une erreur mani
feste et dominante en tirant une conclusion factuelle
sur la base de fails admis, cc qui suppose l’applica
tion d’une normne plus stricte.
Deuxièmement, nous croyons en toute défdrence
qu’en faisant une distinction analytique entre les
conclusions factuelles et les inferences factuelles,
Ic passage prdcitd pourrait amener lea cours d’ap
pci a soupeser la preuve a nouveau et sans raison.
Bien que nous partagions l’opinion scion laquelle
II est loisible anne cour d’appel de conclure qu’ une
inference de fait tirde par le juge de premiere ins
tance est manifestemnent erronde, nous tenons ton
tefois a faire ia misc en garde suivante : lorsque des
6lCments de preuve étayent cette inference, ii sera
diffidile a une cour d’appel de conclure a l’exis
tence d’uiie erreur manifeste et domninante. Counne
nous l’avons dir prdcédemment, les tribuna.ux de
premiCre instance sont dans une position avanta
geuse pour apprécier et soupeser de vastes quanti
tds d’eléments de preuve. Pour titer une inference
factuelle, le juge de premiere instance doit passer
lea faits pertinents an cribie, en apprdcier la valeur
probante et titer une conclusion fäctuelle. En con
sequence, lorsque cette conclusion eat dtayCe par
des elements de preuve, modifier cette conclusion
dquivaut a modifier le poids accordC a ces éldments
par le juge de premiere instance.
2

23
24
254 HOUSEN V. NnCoLAI5EN lacobucci and Major J.L [2002] 2 S.C.R.
We reiterate that it is not the role of appellate
courts to second-guess the weight to be assigned to
the various items of evidence. If there is no palpable
and overriding error with respect to the underlying
facts that the trial judge relies on to draw the infer
ence, then it is only where the inference-drawing
process itself is palpably in error that an appellate
court can interfere with the factual conclusion. The
appellate court is not free to interfere with a factual
conclusion that it disagrees with where such disa
greement stems from a difference of opinion over
the weight to be assigned to the underlying facts.
As we discuss below, it is our respectful view that
our colleague’s finding that the trial judge erred by.
imputing knowledge of the hazard to the municipal
ity in this case is an example of this type of imper
missible interference with the factual inference
drawn by the trialjudge.
In addition, in distinguishing inferences of fact
from findings of fact, our colleague states, at para.
102, that deference to findings offact is “principally
grounded in the recognition that only the thaijudge
enjoys the opportunity to observe witnesses and
to hear testimony first-hand”, a rationale which
does not bear on factual inferences. With respect,
we disagree with this view. As we state above,
there are numerous reasons for showing defer
ence to the factual findings of a trial judge, many
of which are equally applicable to all factual con
clusions of the trial judge. This was pointed out
in Schwartz, supra. After listing numerous policy
concerns justifying a deferential approach to find
ings of fact, at para. 32 La Forest J. goes on to
state:
This explains why the rule [that appellate courts must
treat a tiial judge’s findings of fact with great defer
ence] applies not only when the credibility of witnesses
is at issue, although in such a case it may be more
strictly applied, but also to all conclusions of fact made
by the trial judge. [Emphasis added.]
Nous rappelons qu’il n’appartient pas aux cours
d’ appel de remettre en question le poids attribué
aux diffdeents ld.ments de preuve. Si aucune erreur
manifeste et doruinante n’est déceide en ce qui
concerne les faits sur lesquels repose l’infdeence
dujuge de premiere instance, ce n’est que lorsque le
processus inférentiel lui-même est manifestement
erroné que Ia cour d’appel pent modifier Ia conclu
sion factuelle. La cour d’appel n’est pas habilitde a
modifier une conclusion factuelle avec laquelle cUe
n’est pas d’accord, lorsque ce ddsaccord résulte
d’une divergence d’opinion stir le poids a attribuer
aux faits a la base de Ia conclusion. Comme nous le
verrons plus loin, nous estimons en toute défdrence
que constitue tin exemple de cc genre d’interven
tion inadmissible a l’égard d’une inference d.c fait
la conclusion de notre collègne scion laquelle la
juge de premiere instance a commis une erreur en
prêtant ala municipalitd la connaissance du danger
dans la prCsente affaire.
De plus, en dtablissant tine distinction entre les
inferences de fait et les conclusions de fait, notre
collegue dit, an par. 102, que Ia retenue a l’Cgard des
secondes , justification
non pertinente dana le cas des inferences de fait. En
toute défCrence, nous ne partageons pas cette opi
nion. Comme nous l’avons dit plus tot, il existe de
nombreuses ralsons de faire preuve de retenue a
l’égard des constatations de fait dujuge de premiere
instance, dont plusieurs valent autant pour toutes ses
conclusions factuelles. Cette observation a été faite
dans 1’ arrêt Schwartz, précitd. Après avoir dnumCrd
les nombreuses considerations de politique judi
ciaire invoquées pour justifier la règle de la retenue
a i’Cgard des constatations de fait, le juge La Forest,
an par. 32 ajoute:
Cela explique pourquoi la regle [scion laquelle lea cours
d’appel doivent faire preuve d’une grande retenue a
l’dgard des conclusions d.c fait des juges de premiere
instance] s’applique non seulement lorsque Ia crddibi
litC des tCmoins eat en cause, quoiqu’elle puisse alors
s’appliquer plus strictemeut, trials dgalement a toutes les
conclusions de fait tirées par le juge de premiere instance.
Nous soulignons.]

[200212 R.C.S. HOUSEN C. NIKOLAISEN Les juges lacobucci et Major 255
Recent support for deferring to all factual con
clusions of the trial judge is found in Toneguzo
Norvell, supra. McLachlin 1. (as she then was) for a
unanimous Court stated, at pp. 12 1-22:
A Court of Appeal is clearly not entitled to interfere
merely because it takes a different view of the evidence.
The finding of facts and the drawing of evidentiary con
clusions from facts is the province of the trial judge, not
the Court ofAppeal.
I agree that the principle of non-intervention of a
Court of Appeal in a trial judge’s findings of facts does
not apply with the same force to inferences drawn from
conflicting testimony of expert witnesses where the cred
ibffity of these witnesses is not in issue. This does not
however change the fact that the weight to be assigned to
the various pieces of evidence is under our trial system
essentially the province ofthe trier offact, in this case the
trial judge. [Emphasis added.]
We take the above comments of McLachlin J. to
mean that, although the same high standard of def
erence applies to the entire range of factual determi
nations made by the trialjudge, where a factual find
ing is grounded in an assessment of credibility of
a witness, the overwhelming advantage of the trial
judge in this area must be acknowledged. This does
not, however, imply that there is a lower standard
of review where witness credibility is not in issue,
or that there are not numerous policy reasons sup
porting deference to all factual óonclusions of the
trial judge. In our view, this is made clear by the
underlined portion of the above passage. The essen
tial point is that making a factual conclusion, of any
kind, is inextricably linked with assigning weight to
evidence, and thus attracts a deferential standard of
review.
Although the trial judge will always be in a
distinctly privileged position when it comes to
Notre Cour a rdcemment donn son appui a la règle
de Ia retenue judiciaire a l’gard de l’eusembIe des
conclusions factuelles du juge de premire instance
clans l’arrêt Toneguzzo-Norvell, précitd. Madame
le juge McLachlin (maintenant Juge en chef), qui
a rddigé le jugement unanime de notre Cour, a dit
ceci,auxp. 121-122:
Une cour d’appel n’est manifestement pas antorisée a
intervenir pour le simple motif qu’elle perçoit Ia preuve
diffdremment. Ii appartient au juge de premiere instance,
et non a la cour d’appel, de tirer des conclusions de fait
en xuatière de preuve.
Je reconnais que Ia principe de non-intervention
d’une cour d’appel dans les conclusions de fait d’unjuge
de preniière instance ne s’appli4ue pas avec la méme
vigneur aux conclusions tirdes de tmoignages d’expert
contradictoires loraque Ia crédibi1it de ces derniers n’est
pan en cause. U n’en demeure pan nioius que, selonnotre
système de procès, il appartient essentiellement au juge
des faits, en l’espèce le juge de premiere instance, d’at
tribuer un poids aux diffdrents elements de preuve. [Nous
soulignons.]
Nous considdrons que ces propos du juge
McLachlin signiflent que, bien que le même
degrd lev6 de retenue s’applique a l’ensemble
des decisions factuefles du juge de premiere ins
tance, lorsqu’une teile conclusion factuelle. repose
sur 1’ appreciation de la crddibilitd d’un tdmoin,
il faut reconnatre l’dnorme avantage dont jouit
le juge de premiere instance a cet dgard. Cela ne
veut toutefois pan dire qu’une norme de contrãle
moms rigoureuse s’applique lorsque la question
en jeu ne porte pas stir la crddibffitd d’un tCmoin,
ni qu’il n’existe pas de nombreuses considdrations
de principe justifiant de faire montre de retenue
a l’dgard de toutes lea conclusions factuelles. A
notre avis, cela ressort clairement du passage sou
lignd dans l’extrait prdcitd. Le point essentiel est
qu’une conclusion factuelle — quelle que soit sa
nature — exige nécessairement qu’on attribue un
certain poids a ins element de preuve et, de ce fait,
commande l’applicatioñ d’une nonne de contthle
empreinte de retenue.
Bien que le juge de premiere instance soit tou
jours dana une position privilégiée pour apprCcier
25

26
256 HOUSEN V. NIKOLAISEN lacobucci and Major JJ. [2002] 2 S.C.R.
assessing the credibility of witnesses, this is no the
k area where the. trialjudge has an advantage over
appellate judges: Advantages enjoyed by the trial
judge with respect to the drawing of factual infer
ences include the trial judge’s relative expertise with
respect to the weighing and assessing of evidence,
and the trial judge’s inimitable familiarity with the
often vast quantities of evidence. This extensive
exposure to the entire factual nexus of a case will
be of invaluable assistance when it comes to draw
ing factual conclusions. In addition, concerns with
respect to cost, number and length of appeals apply
equally to inferences of fact and findings of fact,
and support a deferential approach towards both. As
such, we respectfully disagree with our colleague’s
view that the principal rationale for showing defer
ence to findings of fact is the opportunity to observe
witnesses first-hand. It is our view that the trial
judge enjoys numerous advantages over appellate
judges which bear on conclusions of fact, and,
even in the absence of these advantages, there are
other compelling policy reasons supporting a defer
ential approach to inferences of fact. We conclude,
therefore, by emphasizing that there is one, and only
one, standard of review applicable to all factual con
clusions made by the trial judge —
and overriding error.
that
of palpable
D. Standard of Review for Questions of Mixed
Fact and Law
At the outset, it is important to distinguish ques
tions of mixed fact and law from factual findings
(whether direct findings or inferences). Questions of
mixed fact and law involve applying a legal standard
to a set of facts: Canada (Director of Investigation
and Research) v. Southam Inc., [19971 1 S.C.R. 748,
at para. 35. On the other hand, factual findings or
inferences require making a conclusion offact based
on a set of facts. Both mixed fact and law and fact
findings often involve drawing inferences; the dif
ference lies in whether the inference drawn is legal
la crédibilitf des témoins, ce n’est pas là le seul
dornaine oü il bénéficie d’ un avantage sur les juges
des cours d’appel. Parmi les avantages dont jouit
le juge de premiere instance sur le plan des infé
rences factuelles, mentionnons son expertise rela
tive en matière d’ apprciation et d’évaluation de
la preuve, de même que la cormaissance unique
qu’il possède de la preuve souvent abondante pro
duite par les parties. Cette familiarité avec mute la
trarne factuelle mi est d’une grande utilit lorsque
vient le moment de tirer des conclusions de fait.
En outre, les considerations relatives au coat, au
nombre et ala duree des appels sont tout aussi per
tinentes pour ce qui est des inferences de fail que
pour cc qui est des conclusions de fait, et justifient
1’ application aux unes comme aux autres d’une
norme empreinte de retenue. En consequence,
nous ne partageons pas l’opinion de notre coilè
gue selon laquelle la raison principale justiflant de
faire montre de retenue a l’égard des conclusions
de fait est la possibilite qu’a le juge de premiere
instance d’ observer les temoins directement. Nous
sommes d’avis que le juge de premiere instance
jouit, par rapport aux juges d’ appel, de nombreux
avantages qui influent sur toutes les conclusions de
fail et que, méme si CCS avautages n’existaient pas,
d’autres considerations imperieuses justifient de
faire montre de retenue a l’égard des inferences de
fait. Par consequent, nous concluons en soulignant
qu’il n’y a qu’une seule et unique norme de con
trôle applicable a toutes les conclusions factuelles
tirCes par le juge de premiere instance, soft celle de
l’erreür manifeste et dominante.
D. La norme de contrôle applicable aux questions
mixtes defait et de droit
D’entrée dejeu, iimporte de distinguerles ques
tions mixtes de fait et de droit des conclusions fac
tuelles (qu’il s’agisse de conclusions directes ou
d’inférences). Lés questions mixtes de fait et de
droit supposent l’application d’une norme juridi
que aim ensemble de faits : Canada (Directeur des
enquêtes et des recherches) c. Southam Inc., [1997]
1 R.C.S. 748, par. 35. Par contre, les conclusions ou
les inferences de fait exigent que soil thee une con
clusion factuelle d’un ensemble de faits. Taut les
questions inixtes de fait et de droit que les questions

[200212 R.C.S. HOUSEN C. NIKOLAISEN Lesjuges facobucci et Major 257
or factual. Because of this similarity, the two types
of questions are sometimes confounded. This confti
sion was pointed out by A. L. Goodhart in “Appeals.
on Questions of Fact” (1955), 71 L.Q.R. 402, at
p. 405:
The distinction between [the perception of facts and the
evaluation of [hctsl tends to be obfuscated because we
use such a phrase as “the judge found as a fact that the
defendant had been negligent,” when what we mean to
say is that “the judge found as a fact that the defendant
had done acts A and B, and as a matter of opinion he
reached the conclusion that it was not reasonable for the
defendant to have acted in that way.”
In the case at bar, there are examples of both types
of questions. The issue of whether the municipal
ity ought to have known of the hazard in the road
involves weighing the underlying facts and making
factual findings as to the knowledge of the munici
pality. It also involves applying a legal standard,
which in this case is provided by a. 192(3) of the
Rural Municipality Act, 1989, S.S. 1989-90, c.
R-26.l, to these factual findings. Similarly, the find
ing of negligence involves weighing the underly
ing facts, making factual conclusions therefrom,
and drawing an inference as to whether or not the
municipality failed to exercise the legal standard of
reasonable care and therefore was negligent.
Once it has been determined that a matter being
reviewed involves the application of a legal stand
ard to a set of facts, and is thus a question of mixed
fact and law, then the appropriate standard of review
must be determined and applied. Given the different
standards of review applicable to questions of law
and questions of fact, it is often difficult to deter
mine what the applicable standard of review is. In
Southam, supra, at pam. 39, this Court illustrated
how an error on a question of mixed fact and law
can amount to a pure error of law subject to the cor
rectness standard:
de fait exigent souvent dii tribunal qu’il tire des infd
rences; Ia diffdrence rdside dana le caracthre —jan
dique ou factuel — de ces inferences. En raison de
cette similitude, on confond parfois lea deux catC
gories de questions. Cette confusion a etC soulignde
par A. L. Goodhart dans > (1955), 71 L.Q.R. 402, p. 405
[‘rRADUCrIoN) La distinction entre [Ia perception des
faits et l’apprciation de ceux-ci] a tendance a tre
embroulflde parce que nous utilisons la fonnule lejuge
a conclu au falt que le dCfendeur avait etC negligent >>,
alors que cc que nous voulons dire, c’est que

28
29
258 HOUSEN V. NIKoLAIsN Jacobucci and Major JJ. [2002] 2 S.C.R.
decision-maker considers only A, B, and C, then the out
come is as if he or she had applied a law that required
consideration of only A, B, and C. If the correct test
requires him or her to consider D as well, then the deci
sion-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.
However, where the error does not amount to an
error of law, a higher standard is mandated. Where
the trier of fact has considered all the evidence that
the law requires him or her to consider and still
comes to the wrong conclusion, then this amounts
to an error of mixed law and fact and is subject to a
more stringent standard of review: Southam, supra,
at paras. 41 and 45. While easy to state, this clistinc
don can be difficult in practice because matters of
mixed law and fact fall along a spectrum of particu
larity. This difficulty was pointed out in Southam, at
-para. 37:
• . . the matrices of facts at issue in some cases are so
particular, indeed so unique, that decisions about whether
they satisfy legal tests do not have any great precedential
value. if a court were to decide that driving at a certain
speed on a certain road under certain conditions was
negligent, its decision would not have any great value
as a precedent. In short, as the level of generality of the
challenged proposition approaches utter particularity, the
matter approaches pure application, and hence draws
nigh to being an unqualified question of mixed law and
fact. See R. P. Kerans, Standards of Review Employed
by Appellate Courts (1994), at pp. 103-108. Of course,
it is not easy to say precisely where the line should be
drawn; though in most cases it should be sufficiently
clear whether the dispute is over a general proposition
that might qualify as a principle of law or over a very par
ticular set of circumstances that is not apt to be of much
interest to judges and lawyers in the future.
When the question of mixed fact and law at issue
is a finding of negligence, this Court has held that
faits, ii ne prend en consideration que A, B, et C, alors le
rCsultat est le même que s’il avait appliqué une regle de
droit lui dictant de ne tenir compte que de A, B et C. Si le
hon critère liii commandait de tenir compte aussi de D, ii
a en fait appliqué la mauvaise règle de droit et coinniis,
de cc fait, ime erreur de droit.
Par consequent, ce qui peut paraltre une question
mixte de fait et de droit peut, apres plus ample
examen, se rdvdler en rdalitd une pure erreur de
droit.
Cependant, lorsque l’erreur ne constitue pan tine
erreur de droit, une norme de contrôle plus cxi
geante s’impose. Dans les ças oü le juge des faits
examine tous les elements de preuve que le droit liii
commande de prendre en consideration mais en tire
ndanmojns une conclusion erronde, II commet alors
tine erreur mixte de fait et de droit, qui est assujettie
a une norme de contrôle plus rigoureuse : Southam,
prdcité, par. 41 et 45. Bien que facile a dnoncer, cette
distinction peut s’avdrer diffidile a dtablir en prati
que parce que les questions inixtes de fail et de droit
s’dtalent le long d’un spectre comportant des degrés
variables de particularitd. Cette difflcultd a dtd souli
gnCe dans l’arrêt Southam, par. 37:
• . II arrive que les faits dans certaines affaires soient si
particu]iers, de fait qu’ils soient si uniques, que les ddci
sions concernant Ia question de savoir s’ils satisfont aux
critères juridiques n’ont pas tine grande valeur comme
prdcédents. Si une cour décidait que le fait d’avoir con
duit a une certaine vitesse, sur une route donnée et darts
des conditions particulières constituait de la negligence,
sa decision àurait peu de valeur comme précédent. Bref,
plus le niveau de gCndralité de la proposition contestée se
rapproche de la particulaxité absolue, plus l’affaire prend
Ic caractère d’une question d’application pure, et s’ap
proche donc d’une question de droit et de fail parfaite.
Voir R. P. Kerans, Standards of Review Employed by
Appellate Courts (1994), aux pp. 103 a 108. U va de soi
qu’il n’est pan facile de dire avec precision oii dolt être
tracCe la ligne de demarcation; quoique, clans la plupart
des cas, la situation soit suffisamment claire pour per
mettre de determiner si le litige porte stir tine proposition
gdndrale qui peut être quaiifiCe de principe dedroit ou stir
tin ensemble très particulier de circonstances qui a’est
pan susceptible de presenter beaucoup d’intérêt pour lea
juges et les avocats dans l’avenir.
Lorsque la question mixte de fait et de droit
en litige est tine conclusion de negligence, notre

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lesjuges lacobucci et Major 259
a finding of negligence by the trial judge should be
deferred to by appellate courts. In Jaegli Enterprises
Ltd. v. Taylor, [1981] 2 S.C.R. 2, atp. 4, Dickson 3.
(as he then was) set aside the holding of the British
Columbia Court of Appeal that the trial judge had
erred in his finding of negligence on the basis that
“it is wrong for an appellate court to set aside a trial
judgment where there is not palpable and overriding
error, and the only point at issue is the interpreta
tion of the evidence as a whole” (see also Schreiber
Brothers LtcL v. Currie Products LkL, (1980] 2
S.C.R. 78, at p. 84).
This more stringent standard of review for find—
ings of negligence is appropriate, given that findings
of negligence at the trial level can also be made by
juries, If the standard were instead correctness, this
would result in the appellate àourt assessing even
jury findings of negligence on a correctness stand
ard. At present, absent misdirection on law by the
trial judge, such review is not available. The general
rule is that courts accord great deference to a jury’s
findings in civil negligence proceedings:
The principle has been laid down in many judgments
of this Court to this effect, that the verdict of a jury will
not be set aside as against the weight of evidence unless
it is so plainly unreasonable and unjust as to satisfy the
Court that no jury reviewing the evidence as a whole and
acting judicially could have reached it.
(McCannell i McLean, [1937) S.C.R. 341, at
p. 343)
See also Dube v. Labar, [1986) 1 S.C.R. 649, at
p.
662, and C.N.R. v. Muller, [19341 1 D.L.R. 768
(S.C.C.). To adopt a correctness standard would
change the law and undermine the traditional func
tion of the jury. Therefore, requiring a standard of
“palpable and overriding error” for findings of neg
ligence made by either a trial judge or a jury rein-
Cour a jugé que les cours d’appel devaient faire
preuve de retenue a 1’ égard de la conclusion dujuge
de premiere instance. Dans l’arrêt Jaegli Enter
prises Ltd. c. Taylor, [1981] 2 R.C.S. 2, p. 4, lejuge
Dickson (plus tard Juge en chef) a inflrmé la d&i
sion de la Cour d’ appel de la Colombie-Britannique
portant que le juge de premiere instance avait
errondment conclu a la negligence, pour le motif
qu’< une cour d’appel commet tine erreur loss
qu’dc infirme tin jugement de premiere instance
s’il n’y a pas irne erreur manifeste et dominante, et
Si l’interpr&ation de 1’ ensemble dc la preuve eat le
seul point en litige>> (voir aussi l’arrêt Schreiber
Brothers Ltti c. Currie Products Ltd., [1980) 2
R.C.S. 78p. 84).
EL convient d’appliquer cette norme de contr6le
plus exigeante aux conclusions de negligence, étant
donnd que de telles conclusions peuvent dgalement
être tirdes par des jurys en premiere instance. Si la
norme applicable dmit cdlle de la decision correcte,
II s’ensuivrait que lea cours d’appel appliqueraient
cette norme pour contrôler même des conclusions
dc negligence tirdes par jurys. Actuellement, ii n’y a
ouverture a m tel contrâle que si le juge du procès
a donnd des directives erronées au jury sur le droit
applicable. Suivant la règle gCndrale, les txibunaux
font montre d’une grande retenue envers lea con
clusions des jurys dans lea procès civils pour ndgli
gence:
[TR.ADUcTI0N] Le principe pertinent a tC noncé
dans hon nombre d’arrêts de notre Cour, a savoir qu’il
n’y a pas lieu d’Ccarter le verdict d’unjury parce qu’il va
a l’encontre du poids de la preuve, a moms que le verdict
en question ne soft nettement déraisonnable et injuste au
point de convaincre le tribunal qu’aucun jury examinant
Ia preuve dans son ensemble et agissant de façon judi
ciairc n’aurait Pu le prononcer.
(McCannell c. McLean, [1937] R.C.S. 341, p. 343)
Voir également Dube c. Labar, [1986] 1 R.C.S.
649, p. 662, et C.NJ?. c. Muller, [19341 1 D.L.R.
768 (C.S.C.). Adopter la norme de la decision
correcte aurait pour effet de modifier le droit
et de porter atteinte an role iradilionnel du jury.
Par consequent, le fail d’exiger l’application de
la norme del’ > aux
30

31
32
260 HOUSEN i NIKOLAISEN lacobucci and Major JJ [202] 2 S.C.R.
forces the proper relationship between the appellate
and trial court levels and accords with the estab
lished standard of review applicable to a finding of
negligence by a jury.
Where, however, the erroneous finding of negli
gence of the trial judge rests on an incorrect state
ment of the legal standard, this can amount to an
error of law. This distinction was pointed out by
Coiy J. in Galaske v. O’Donnell, [1994] 1 S.C.R
670, at pp. 690-91:
The definition of the standard of care is a mixed ques
don of law and fact. It will usually be for the trial judge
to determine, in light of the circumstances of the case,
what would constitute reasonable conduct on the part of
the legendary reasonable man placed in the same circum
stances. In some situations a simple reminder may suffice
while in others, for example when a very young child is
the passenger, the driver may have to put the seat belt on
the child himself. In this case, however, the driver took no
steps whatsoever to ensure that the child passenger wore
a seat belt. It follows that the trial judge’s decision on the
issue amounted to a finding that there was no duty at all
resting upon the driven This was an error of law.
Galaske, supra, is an illustration of the point made
in Southam, supra, of the potential to extricate a
purely legal question from what appears to be a
question of mixed fact and law. However, in the
absence of a legal error or a palpable and overriding
error, a finding of negligence by a trial judge should
not be interfered with.
We are supported in our conclusion by the
analogy which can be drawn between inferences
of fact and questions of mixed fact and law. As
stated above, both involve drawing inferences
from underlying facts. The difference lies in
whether the inference drawn relates to a legal
standard or not. Because both processes are inter
twined with the weight assigned to the evidence,
the numerous policy reasons which support a
deferential stance to the trial judge’s inferences
of fact, also, to a certain extent, support showing
fins de contrôle d’une conclusion de negligence tiree
par un juge ou un jury consolide les rapports qui doi
vent exister entre lesjuridictions d’appel et celles de
premiere instance et respecte la norme de contrâle
bien cltablie qui s’applique aux conclusions de nCgli
gence tircles par les jurys.
Toutefois, lorsque lejuge du procès conclut erro
nément a la negligence par suite d’une formulation
incorrecte de la norme juridique, cela peut consti
tuer une erreur de droit. Cette distinction a étcl faite
par le juge Cory dans l’arrêt Galaske c. O’Donnell,
[1994] 1 R.C.S. 670, p. 690-691:
La defi.nition de la norme de diligence est tine
question mixte de droitet de fait. II incombera habi
iuellement au juge dii procès de determiner, compte
tenu des circonstances de 1’ espèce, ce qul constitue
rait une conduite raisonnable de la part de la personne
raisonnable ltgendaire placde dans la mênie situation.
Dans certains cas, tin simple rappel suffira, tandis que
clans d’ autres, par exemple lorsqu’un très jeune enfant
est passager, le conducteur peut avoir a attacher
hui-niême la ceinture de sécuritd de l’enfant. Cependant,
en l’espèce, le conducteur n’a pris aucune mesure pour
yeller a ce que l’enfant porte sa ceinture de sclcurité. 11
s’ensuit que Ia decision du juge dii proces sur Ia ques
tion Cquivalait a une conclusion qu’aucune obligation
n’incombait au conducteur, ce qui constituait tine erreur
de droit.
L’arrêt Galaske, precite, illustre bien l’idée expo
see dans l’arrêt Southam, precite, scion laquelle il
est possible de dCgager une pure question de droit
de cc qui parait être une question rnixte de fait et
de droit. Toutefois, en 1’ absence d’exreur de droit ou
d’une erreur manifeste et dominante, la conclusion
de negligence tircle par unjuge de premiere instance
ne doit pas être modiflee.
L’analogie qul pout tre Ctablie entre les infcl
rences de fait et les questions mixtes de fait et
de droit cltaye notre conclusion. Comme nous
l’avons dit prdccldemment, dans les deux cas des
inferences doivent etre tirees des faits a l’origine
dcl’ affaire. La difference depend de la question de
savoir Si l’inférence se rapporte a tine nornie juri
dique ou non. Parce que le rclsultat des deux pro
cessus est tributaire du poids aècordd a la preuve,
les diverses considerations de principe justiflant de
faire montre de retenue a l’égard des infclrences de

[200212 R.C.S. I4OUSEN C. NIKOLAISEN Lesjuges Iacobuccf etMajor 261
deference to the trial judge’s inferences of mixed
fact and law.
Where, however, an erroneous finding of the trial
judgecan be traced to an error in his or her charac
terization of the legal standard, then this encroaches
on the law-making role of an appellate court, and
less deference is required, consistent with a “cor
rectness” standard of review. This nuance was rec
ognized by this Court in St-Jean v. Mercier, [2002]
1 S.C.R. 491,2002 SCC 15, at paras. 48-49:
A question “about whether the facts satisfy the legal
tests” is one of mixed law and fact. Stated differently,
“whether the defendant satisfied the appropriate standard
of care is a question of mixed law and fact” (Southam, at
para. 35).
Generally, such a question, once the facts have been
established without overriding and palpable error, is to be
reviewed on a standard of correctness since the standard
of care is normative and is a question of law within the
normal purview of both the trial and appellate courts.
[Emphasis added.]
A good example of this subtle principle can be
found in Rhône (The) v. Peter A.B. Widener (The),
[19931 1 S.C.R. 497, at pp. 515-16. In that case
the issue was the identification of certain indi
viduals within a corporate structure as directing
minds. This is a mixed question of law and fact.
However, the erroneous finding of the courts below
was easily traceable to an error of law which could
be extricated from the mixed question of law and
fact. The extricable question of law was the issue
of the functions which are required in order to be
properly identified as a “directing mind” within a
corporate structure (pp. 515-16). In the opinion of
lacobucci I. for the majority of the Court (at
p. 526):
With respect. I think that the courts below over
emphasized the significance of sub-delegation in this
case. The key factor which distinguishes directing minds
from normal employees is the capacity to exercise deci
sion-making authority on matters of corporate policy,
rather than merely to give effect to such policy on an
fait du juge de premiere instance justifleut égale
ment, dans une certaine mesure, do faire de même
a l’dgard de ses infrences mixtes de fait et de
droit.
Par contre, lorsqu’il peut être &abli que Ia
conclusion erronde du juge de premiere instance
découle d’une erreur quant a la norme juridique a
appliquer, cc facteur touche au role de creation du
droit de la cour d’ appel, et une retenue moms dlevde
s’impose, conformdment a la norme de la dCcision
. Notre Cour a apportd cette nuance
dans l’arrêt St-Jean c. Mercier, [2002] 1 R.C.S. 491,
2002 CSC 15, par. 48-49:
La question qui consiste est une question mixte
de droft et de fait ou, en d’autres termes,
(Southam, par. 35).
Une fois lea fails établis sans erreur manifests et donii
nante, cette question doit gdndralement être révisée sin
vant Ia noime de Ia decision correcte puisque Ia norme de
diligence est normative et constitue une question de droit
i relève de Ia competence habituelie des tribunaux de
premiere instance et d’appel. [Nous soulignons.]
Un bon exemple de cc principe subtil est
l’arrflt Rhône (Le) c. Peter A.B. Widener (Le),
[1993] 1 R.C.S. 497, p. 515-516. La question en
litige dans cette affaire consistait a determiner
Si certaines personnes faisaient partie des âmes
dirigeantes d’une sociétd. 11 s’agit d’une question
mixte de droit et de fait. Toutefois, la conclusion
errondc des juridictious infdrleures dtait fadilement
imputable a. une erreur de droit qui pouvait être
ddgagde de la question mixte de droit et de fait. La
question de droit ainsi isolable dtait celie des fonc
tions que devait remplir une personne pour qu’on
puisse a. bon droit la consid6rer comme ime > de la socidtd (p. 515-516). Le juge
lacobucci s’est exprimC ainsi au nom des juges de
la majoritd, a. lap. 526:
En toute ddfdrence, je crois que lea juridictions infd
rieures ont trop insistd sur l’importance de Ia subddléga
tion en l’espèce. Le facteur dC qui perniet de distinguer
lea âmes dirigeantes des employCs ordinaires eat Ia capa
cite d’exercer an pouvoir ddcisionnel sur lea questions
de pohuique gdnCrale de lapersoime morale, p1utt que
33
34

36
262 HOUSEN v. NIKOLAISEN lacobucci and Major JJ. [2002] 2 S.C.R.
operational basis, whether at head office or across the le simple fait de mettre en uvre ces politiques dam un
sea. cadre opérationnel, que ce soft au siege social on en met
Stated differently, the lower courts committed
an error in law by finding that sub-delegation was a
factor identifying a person who is part of the “direct
ing mind” of a company, when the correct legal
factor characterizing a “directing mind” is in fact
“the capacity to exercise decision-making author
ity on matters of corporate policy”. This mischarac
terization of the proper legal test (the legal require
ments to be a “directing mind”) infected or tainted
the lower• courts’ factual conclusion that Captain
Keich was part of the directing mind. As this erro
neous finding can be traced to an error in law, less
deference was required and the applicable standard
was one of correctness.
To summarize, a finding of negligence by a trial
judge involves applying a legal standard to a set of
facts, and thus is a question of mixed fact and law.
Matters of mixed fact and law lie along a spectrum.
Where, for instance, an error with respect to a find
ing of negligence can be attributed to the applica
tion of an incorrect standard, a failure to consider
a required element of a legal test, or similar error
in principle, such an error can be characterized as
an error of law, subject to a standard of correct
ness. Appellate courts must be cautious, however;
in finding that a trial judge erred in law in his or her
determination of negligence, as it is often difficult
to extricate the legal questions from the factual. It is
for this reason that these matters are referred to as
questions of “mixed law and fact”. Where the legal
principle is not readily extricable, then the matter
is one of “mixed law and fact” and is subject to a
more stringent standard. The general rule, as stated
in Jaegli Enterprises, supra, is that, where the issue
on appeal involves the trial judge’s interpretation of
the evidence as a whole, it should not be overturned
absent palpable and overriding error.
En d’autres termes, lea juridictions inférieures
out commis tine erreur de droit en concluant que la
subde’iégatiou était tin facteur pennettant de qualifier
une personne d’> d’une socit4
alors que le facteur juridique applicable a cet égard
est en fait . Cette formulation errone du
critèrejuridique approprié (les conditions juridiques
requises pour être tine ) a enta
ché ou vicié la conclusion factuelle des juridictioris
iufrieures selon laqueile le capitaine Keich était
une âme dirigeante de là sociét. Conune cette con
clusion errone tait imputable a une erreur de droit,
un degré moindre de retenue s’imposait et la nonne
applicable était celle de la decision correcte.
En rdsumC, la conclusion de negligence que tire
le juge de premiere instance suppose 1’ application
d’une normejuridique a un ensemble de faits et cons
titue donc tine question rnixte de fait et de droit. Les
questions mixtes de Mt et de droit s’étalent le long
d’un spectre. Lorsque, par exemple, la conclusion
de negligence est entachée d’une erreur imputable
a 1’ application d’une nornie incorrecte, a l’oznission
de tenir compte d’un élément essentiel d’un critère
juridique ou une autre erreur de principe sembla
ble, une telle erreur peut être qualifiée d’ erreur de
droit et elle est contrâlée suivant la norme de la déci
sion correcte. Les cours d’ appel doivent cependant
faire preuve de prudence avant de juger que le juge
de premiere instance a commis une erreur de droit
lorsqu’il a conclu ala negligence, puisqu’il est sou
vent difficile de départager lea questions de droit et
les questions de faiL Voilh pourquoi on appelle cer
tames questions des questions >. Si le principejuridique n’est pas facilement
isolable, il s’agit alors d’une , assujettie a un norme de contrâie
plus rigoureuse. Scion la règle gCnCrale énoncée
dans 1’ arrêt Jaegli Enterprises, precite, si la ques
tion litigieuse en appel soulève l’interprdtation de
1’ ensemble de la preuve par Ic juge de premiere ins
tance, cette interpretation ne doit pas être inflrmée
en 1’ absence d’erreur manifeste et dominante.

[2002] 2 R.C.S. HOUSEN C. NUCOLAISEN Lesjüges lacobucci et Major 263
In this regard, we respectfully disagree with our
colleague when he states at para. 106 that “Iojnce
the facts have been established, the determination
of whether or not the standard of care was met by
the defendant will in most cases be reviewable on
a standard of correctness since the trial judge must
appreciate the facts within the context of the appro
priate standard of care. In many cases, viewing the
facts through the legal lens of the standard of care
gives rise to a policy-making or law-setting function
that is the purview of both the trial and appellate
courts”. In our view, it is settled law that the deter
ruination of whether or not the standard of care was
met by the defendant involves the application of a
legal standard to a set of facts, a question of mixed
fact and law. This question is subject to a standard
of palpable and overriding error unless it is clear that
the trialjudge made some extricable error in princi’
pIe with respect to the characterization of the stand
ard or its application, in which case the error may
amount to an error of law.
III. Application of the Foregoing Principles to this
Case: Standard of Care of the Municipality
A. The Appropriate Standard ofReview
We agree with our colleague that the correct
statement of the municipality’s standard of care
is that found in Partridge v. Rural Municipality of
Langenburg, [1929] 3 W.W.R. 555 (Sask. C.A.),per
Martin J.A., at pp. 558-59:
The extent of the statutory obligation placed upon
municipal corporations to keep in repair the highways
under their jurisdiction, has been variously stated in
numerous reported cases. There is, however, a general
rule which may be gathered from the decisions, and that
is, that the road must be kept in such a reasonable state of
repair that those requiring to use it may, exercising ordi
nary care, travel upon it with safety. What is a reason
able state of repair is a question of fact, depending upon
all the surrounding circumstances; “repair” is a relative
term, and hence the facts in one case afford no fixed rule
A cet égard,nous ne pouvons en toute dférence
pas souscrire a l’opinion de notre collègue lors
qu’il affirme, au par. 106, qu’*c [ujne fois les faits
dtablis, la decision touchant la question de savoir
si le défendeur a respectd cu non la norme de dili
gence est, dans la plupart des cas, contrôlable scion
la norme de la decision correcte, puisque le juge de
premiere instance doit apprdcier les faits au regard
de Ia norme de diligence appropride. Dans bien des
cas, l’examen des faits a travers le prismejuridique
de la norme de diligence implique 1’ dtablissement
de politiques d’intdrêt gdnéral ou la creation de
règles de droit, role qui relève autant des cours de
premiere instance que des cours d’appel >>. A notre
avis, il est bien établi en droit que Ia question de
savoir si Ic défendeur a respectd la norme de dili
gence suppose l’app]ication d’une norme juridique
a un ensemble de faits, cc qui en fait tine question
mixte de fait et de droit. Cette question est assujet
tie a la norme del’ en-cur rnanifeste et dorninante, a
moms que le juge de premiere instance n’ait clai
rement commis tine en-cur de principe isolable en
determinant la nornie applicable ou en appliquant
cette norme, auquel cas l’errenr peut constituer une
en-cur de droit.
UI. Application des principes gui précCdent a i’es
pèce: Ia none de dffience applicable a Ia
municipa]itd
A. La norme de contrôle appropriée
A l’instar de noire collègue, nous soinmes d’avis
que Ia norme de diligence applicable a la munici
palitd a etC convenablement Cnoncde par le juge
Martin dans i’arrêt Partridge c. Rural Municipality
ofLangenburg, [19291 3 W.W.R. 555 (C.A. Sask.),
p. 558-559:
[TRADUCTION] L’Ctendue de l’obligation lCgaIe
d’entretien qui incombe aux corporations municipales
a l’Cgard des routes qui se trouvent sur lear territoire a
Ctd CnoncCe de diverses facons dans nombre de decisions
publides. U eat toutefois possible de dCgager la règle
gnCra1e suivante de ces decisions : is chexnin doit être
term clans tin Ctat raisounable d’entretien, de façon que
ceux qui doivent l’emprunter puissent, en prenant des
precautions normales, y circuler en sdcuritC. La question
de savofr en quoi consiste un Ctat raisonnable d’entre
tien eat uric question de fait, qui eat fonction de toutes
38
37

264 HOUSEN v. NIKOLAISEN lacobucci and Major J.i [2002] 2 S.C.R.
by which to determine another case where the facts are
different..
However, we differ from the views of our colleague
in that we find that the trial judge applied the cor
rect test in determining that the municipality did not
meet its standard of care, and thus did not commit
an error of law of the type mentioned in Southam,
supra. The trialjudge applied all the elements of the
Partridge standard to the facts, and her conclusion
that the respondent municipality failed to meet this
standard should not be overturned absent palpable
and overriding error.
B. The Trial Judge Did Not Commit an Error of
Law
We note that our colleague bases his conclusion
that the municipality met its standard of care on his
finding that the trial judge neglected to consider the
conduct of the ordinary motorist, and thus failed to
apply the correct standard of care, an error of law,
which justifies his reconsideration of the evidence
(para. 114). As a starting point to the discussion of
the ordinary or reasonable motorist, we emphasize
that the failure to discuss a relevant factor hi depth,
or even at all, is not itself a sufficient basis for an
appellate court to reconsider the evidence. This was
made clear by the recent decision of Van de Perre,
supra, where Bastarache 3. says, at para. 15:
omissions in the reasons will not necessarily mean
that the appellate court has jurisdiction to review the
evidence heard at trial. As stated in Van Mol (Guardian
ad Litem of) v. Ashmore (1999), 168 D.LR. (4th) 637
(B.C.C.A.), leave to appeal refused [2000] 1 S.C.R. vi,
an omission is only a material error if it gives rise to the
reasoned belief that the trial judge must have forgot
ten, ignored or -misconceived the- evidence in a way that
affected his conclusion. Without this reasoned belief, the
appellate court cannot reconsider the evidence.
les circonstances de l’espèce; le terme est
une notion relative et, par consequent, les faits propres a
tine affaire donnée ne permettent pas de ddgager de règle
déterxninCe permettant de trancher tine autre affaire pré
sentant des circonstances différentes.
Toutefois, contrairement a notre collegue, nous esti
mons que la juge de premiere instance a appliqué
le bon crithre juridique en concluant que la munici
palitd n’ avait pus respecté la norme de diligence a
laquelle dc était tenue, et que Ia juge n’a donc pus
comnris une erreur de droit du genre de celle décrite
dans 1’ arrêt Southam, précitC. La juge de premiere
instance a appliqué aux faits de l’espèce tous les
elements du critère Cnonc clans l’arrêt Partridge, et
sa conclusion que la municipalitd défenderesse n’ a
pas respecté cc cmitère ne devrait pas être infirmée en
l’absence d’erreur manifeste et doniinante.
B. La juge de premiere instance n ‘a pas commis
d’erreur de droit
Nous soulignons que noire collegue fonde sa
decision que la municipalité a respecté la norme de
diligence sur sa conclusion que la juge de premiere
instance a negligé de prendre en compte Ic compor
tement de l’automobiiiste moyen et n’a donc pas
appliqué la bonne norme de diligence, commettant
ainsi tine erreur de droit le justifiant de rdexaminer
la preuve (par. 114). Pour les besoins de l’aualyse
du critère de l’automobiliste moyen ou raisonna
ble, nous tenons au depart a signaler que 1’omission
d’examiner en profondeur un facteur pertinent, voire
de ne pas l’examiner du tout, n’est pus en sol un fon
dement suffisant pour justifier tine cour d’appel de
rdexaminer la preuve. Ce principe a été clairement
Cnoncd dans l’arrCt recent Van de Perre, prCcitd, oü
lejuge Bastarache a dit ccci, au par. 15:
des omissions dans les motifs ne signifieront pas.
nCcessairement que la cour d’appel a competence pour
examiner Ia preuve entendue au procès. Coxnme le dit
1’ arrêt Van Mol (Guardian ad Litem of) c. Ashmore
(1999), 168 D.L.R. (4th) 637 (C.A.C.-B.), autorisation
d’appel refusde [2000] 1 R..C.S. vi, tine omission ne
constitue tine erreur importante que si cUe donue lieu a
la conviction rationnelle que lejuge de premiere instance
doit avoir oublié, negligC d’exaniiner ou rnal interprété la
preuve de telle manière que sa conclusion en a été affec
tee. Faute d’une telle conviction rationnelle, la cour d’ap
pci ne peut pus réexaminer la preuve. *

[2002] 2 R.C.S. HOUSEN C. NflCOLAISEN Lesjuges lacobucci et Major 265
In our view, as we will now discuss, there can be
no reasoned belief in this case that the trial judge
forgot, ignored, or misconceived the question of the
ordinary driver. It would thus be an error to engage
in a re-assessment of the evidence on this issue.
The fact that the conduct of the ordinary motor
ist was in the mind of the trialjudge from the outset
is clear from the fact that she began her standard of
care discussion by stating the correct test, quoting
the above passage from Partridge, supra. Absent
some clear sign that she subsequently varied her
approach, this initial acknowledgment of the correct
legal standard is a strong indication that this was the
standard she applied. Not only is there no indica
tion that she departed from the stated test, but there
are further signs which support the conclusion that
the trial judge applied the Partridge standard. The
first such indication is that the trial judge did dis
cuss, both explicitly and implicitly, the conduct of
an ordinary or reasonable motorist approaching the
curve. The second indication is that she referred to
the evidence of the experts, Mr. Anderson and Mr.
Werner, both of whom discussed the conduct of an
ordinary motorist in this situation. Fmafly, the fact
that the trial judge apportioned negligence to Mr.
Nikolaisen indicates that she assessed his conduct
against the standard of the ordinary driver, and thus
considered the conduct of the latter.
The discussion of the ordinary motorist is found
in the passage from the trial judgment immediately
following the statement of therequisite standard of
care:
Snake Hill Road is a low traffic road. It is however
maintained by the R.M. so that it is passable year round.
There are permanent residences on the road. It is used by
farmers for access to their fields and cattle. Young people
frequent Snake Hill Road for parties and as such the road
is used by those who may not have the same degree of
familiarity with it as do residents.
A notre avis, comme nous ailons le voir, la présente
espèce ne peut faire naltre la conviction rationnelle
que la juge de premiere instance a oublid d’exami
ner la question du conducteur moyen, en a fait abs
traction ou l’a mal interprdtde. Ii serait donc errond
de réexaminer la preuve relative a cette question.
Le fait que, des le depart, Ia juge de premiere
instance a eu a l’esprit la conduite de l’automo
biliste moyen ressort clairement du fait qu’elle a
commence son examen de Ia norme de diligence
en formulant le critère approprié, c’est-à-dire en
citant le passage susmentionnd de 1’ arrêt Partridge,
précité. En 1’ absence d’indications claires qu’eile
a subsdquexnment modifid sa mdthode d’ analyse,
cette mention initiale de Ia norme juridique appro
priée constitue un indice soide qu’il s’agit bien de
la norme qu’elle a appliqude. Non seulement rien
n’indique qu’elle s’est écartde du critCre dnoncd,
mais d’ autres indices Ctayent la conclusion qu’elle
a appliqué le critère de 1’ arrêt Partridge. Le pre
inier de ces indices eat que la jugè s’est bel et bien
interrogde, taut explicitement qu’implicitement, sur
la conduite de l’automobiliste moyen ou raisonna
ble s’approchant du virage. Le deuxième indice est
qu’elle a fait état des tdmoignages des experts, MM.
Anderson et Werner, qui out tons deux analyse le
comportement de l’automobiliste moyen se trouvant
dans cette situation. Enfin, le fait que lajuge de pre
mière instance alt impute une partie de la respon
sabilitd a M. Nikolaisen indique qu’elle a évalud sa
conduiteeu égard au critère du conducteur moyen,
et qu’elle a donc pris en compte la conduite de ce
dernier.
On trouve l’analyse relative a l’automobiliste
moyen dana cet extrait dujugemeut de premiere ins
tance qui suit hnmddiatement l’Cnoncd de la norme
de diligence requise
[TR.ADUCrI0Nj Le chernin Snake Hill eat un chemin
a faible de%it de circulation. fl eat n6anmoins entretenu
par la M.R. a longueur d’aimCe afin de Ic garder carrossa
ble. Des residences perrnanentes sont situées en bordure
de celui-ci. Lea ferniiexa l’utilisent pour accéder a leurs
champs et a leur bétail. Des jeunes gens empruntënt le
chenñn Snake Hill pour se rendre a des f8tes, de sorte
qu’il est utilisé par des conducteurs qui ne Ic connaissent
pas toujours aussi bien gue lea residents de l’endroit.
41
40

42
266 HOUSEN V. NIKOLAISEN lacobucci and Major JJ [2002] 2 S.C.R.
There is a portion of Snake Hill Road that is a hazard
to the public. In this regard I accept the evidence of Mt
Anderson and Mr. Werner. Furthex it is a hazard that is
not readily apparent to users of the road. It is a hidden
hazard. The location of the Nikolaisen rollover is the most
dangerous segment of Snake Hill Road. Approaching the
location of the Nikolaisen rollover, limited sight distance,
created by. uncleared bush, precludes a motorist from
being forewarned of an impending sharp right turn irnme
diately followed by a left turn. While there were differing
opinions on the marimum speed at which this curve can
be negotiated, I am satisfied that when limited sight dis
tance is combined with the tight radius of the curve and
lack of superelevation, this curve cannot be safely negoti
ated at speeds greater than 60 kilometres per how when
conditions are favourable, or 50 kilometres per hour when
wet,
• . . where the existence of that bush obstructs the abffity
of a motorist to be forewarned of a hazard such as that on
Snake Hill Road, it is reasonable to expect the R.M. to
erect and maintain a warning or regulatory sign so that a
motorist, using ordinary care, may be forewarned, adjust
speed and take corrective action in advance of entering a
dangerous situation. [Underlining added; italics in origi
nal.]
([1998] 5 W.W.R. 523, at paras. 84-86)
In our view, this passage indicates that the trial
judge did consider how a motorist exercising ordi
nary care would approach the curve in question. The
implication of labelling the curve a “hidden hazard”
which is “not readily apparent to users of the road”,
is that the danger is of the type that cannot be antici
pated. This in turn implies that, even if the motorist
exercises ordinary care, he or she will not be able to
react to the curve. As well, the trial judge referred
explicitly to thó conduct of a motorist exercising
ordinary care: “it is reasonable to expect the R.M.
to erect and maintain a warning or regulatory sign
so that a motorist, using ordinary care, may be fore
warned, adjust speed and take corrective action in
advance of entering a dangerous situation” (para. 86
(emphasis added)).
U y a, sur le chernin Snake Hill, tin troncon qui prd
sente tin danger pour le public. A cet égard, je retiens lea
témoignages de MM. Anderson et Werner. En outre, ii
s’agit d’un danger qui n’est pas fadilement dce1ab1e
par les usagers du chernixi. II s’agit d’un danger cach.
L’endroit oà le vhicu1e de M. Nikolaisen a fait tin ton
neau est sited stir le tronçon le plus dangereux du chemin
Snake HilL. A l’approche de cet endroit, des broussailles
réduisent la distance de visibilitd de l’automobiliste et
l’empchent de voir l’immirience d’tm virage a droite
semi, qui est immédiatement suivi d’un virage a gauche.
Bien que des opinions divergentes aient été dmises quant
a la vitesse maxiniate a laquelle cc virage peut être pris,
je suis d’avis que, vu la distance de visibilité niduite,
l’existence d’une courbe serrCe et l’absence de sureld
vation du chernin, ce virage ne peut être pris en sdcuritj
a une vitesse supérieure a 60 kilomètres a l’heure dam
des conditions favorables, ou 50 kilomètres a Pheure sur
chaussée humide.
a l’endroit oü Ia presence des broussailles empé
che les automobilistes de voir venir tin danger comme
celui qui existe sur Ic chernin Snake Hill, il eat raisonna
ble de s’attendre a cc gue la M.R. instaile et maintienne
tin panneau d’avertissement ou de signalisation afin gu’un
automobiliste p.renant des precautions noimales soit pré
venu et puisse réduire sa vitesse et prendre dur mesures
correctives avant d’aniver a l’endroit dangereux. [Nous
soulignons; en italique dans l’original.]
([1998] 5 W.W.R. 523, par. 84-86)
A notre avis, cot extrait indique que la juge de
premiere instance a effectivement pris en compte
la façon dont l’automobffiste prenaut des prdcau
tions normales s’approcherait du virage en ques
tion. Qualifier le virage de [TRADuCrION] cc danger
cache >>, danger qui , implique que Ic
danger en eat un qu’il eat impossible de prdvoir.
II s’ensuit que, même si l’automobffiste prend des
precautions normales, ii ne pourra pas rdagir a la
presence du virage. Par ailleurs, lajuge de premiere
instance a explicitement fait dtat de la conduite de
1’ autornobiliste prenant des precautions normales:
[TRADucTI0N]

C2002]2 R.C.S. HOUSEN C. NIKOLAISEN Lesfuges lacobucci et Major 267
With respect to the speed of a motorist approach
ing the curve, there is also an indication that the trial
judge considered the conduct of an ordinary motor-
1st. First, she stated that she accepted thó evidence
of Mr. Anderson and Mr. Werner with respect to the
finding that the curve constituted a hazard to the
public. The evidence given by these experts sug
gests that between 60 and 80 km/h is a reasonable
speed to drive parts of this road, and at that speed,
the curve presents a hazard. Their evidence also
indicates their general opinion that the curve was
a hazardous one. Mr. Anderson refers to the curve
being difficult to negotiate at “normal speeds”. Also,
Mr. Anderson states that “if you’re not aware that
this curve is there, the sharp course of the curve, and
you enter too far into it before you realize that the
curve is there, then you have to do a tighter radius
than 118 metres in order to get back on track to be
able to negotiate the second curve”. He also states
that “you could be lulled into thinking you’ve got an
80 kilomeires an hour road until you are too far into
the tight curve to be able to respond”.
The Court ofAppeal found that, given the nature
and condition of Snake Hill Road, the contention
that this rural road would be taken at 80 km/h
by the ordinary motorist was untenable. However,
it is clear from the trial judge’s reasons that she
did not take 80km/h as the speed at which the ordi
nary motorist would approach the curve. Tnstead
she found, based on expert evidence, that “this
curve cannot be .w.fely negotiated at speeds greater
than 60 kilometres per hour when conditions
are favourable, or 50 kilometres per hour when
wet” (para. 85 (emphasis in original)). From this
finding, coupled with the finding that the curve
was hidden and unexpected, the logical conclu
sion is that the trial judge found that a motorist
exercising ordinary care could easily be deceived
into approaching the curve at speeds in excess
of the safe speed for the curve, and subsequently
be taken by surprise. Therefore, the trial judge
found that the curve was hazardous to the ordinary
Relativement a la vitesse a laquelle les automo
bilistes s’approchent du virage, il existe également
un indice coufirmant que lajuge de premiere ins
tance apris en compte la conduite de l’automobiliste
moyen. Premièrement, cUe a dit qu’ cUe acceptait les
témoignages de MM. Anderson et dc Werner en cc
qui concerne la conclusion que Ia courbe constituait
un danger pour le public. Leurs témoignages suggC
rent qu’une vitesse de 60 a 80 km/h est une vitesse
raisonnable a certains endroits de ce chemin et que,
a cette vitesse, la courbe constitue un danger. Leurs
témoignages indiqtient également qu’ils estiment de
facon générale que la courbe est dangereuse. De dire
M. Anderson, le virage eat difficile a preudre a des
[TRADUCTION] . II ajoute que,
ETRADUcrIONJ >. II affirme dgalement
qu’ [TRADUCFI0N] .
La Cour d’appel a jugé que, vu la nature et l’Ctat
du chemnin Snake Hill, la prétention selon laquelle
1’ automobiliste moyen roulerait sur cette route
rurale a 80 km/h était insoutenable. Toutefois, il
ressort clairement desmotifs de lajuge de premiere
instance qu’elle ne considérait pas que l’automobi
liste moyen s’ approcherait du virage a 80 km/h. Elle
a plutôt conclu, a partir des tCmoignages des experts,
que [TRADUcTI0N]

45
46
268 HOUSEN V. NIKOLAISEN lacobucci and Major J3 [2002] 2 S.C.R.
motorist and it follows that she applied the correct
standard of care.
In our respectful view, our colleague errs in
agreeing with the Court ofAppeal’s finding that the
trial judge should have addressed the conduct of the
ordinary motorist more fully (para. 124). At para.
119, he writes:
A proper application of the test demands that the trial
judge ask the question: “How would a reasonable driver
have driven on this road?” Whether or not a hazard is
“hidden” or a curve is “inherently” dangerous does not
dispose of the question.
And later; he states, “In my view, the question of
how the reasonable driver would have negotiated
Snake Hill Road necessitated a somewhat more indepth
analysis of the character of the road” (para.
125). With respect, requiring the thai judge to have
made this specific inquiry in her reasons is incon
sistent with Van de Pen’e, supra, which makes it
clear that an omission or a failure to discuss a factor
in depth is not, in and of itself, a basis for interfer
ing with the findings of the trial judge and reweigh
ing the evidence. As we note above, it is clear that
although the thai judge may not have conducted an
extensive review of this element of the Partridge
test, she did indeed consider this factor by stating
the correct test, then applying this test to the facts.
We note that in relying on the evidence of Mr.
Anderson and Mr. Werner; the thai judge chose not
to base her decision on the conflicting evidence of
other witnesses. However, her reliance on the evi
dence of Mr. Anderson and Mn Werner is insuf
ficient proof that she “forgot, ignored, or miscon
ceived” the evidence. The full record was before the.
trialjudge and we can presume that she reviewed all
of it, absent further proof that the thai judge forgot,
ignored or misapprehended the evidence, leading
to an error in law. It is open to a thai judge to
prefer the evidence of some witnesses over others:
instance a donc conclu que 1e virage était dangereux
pour l’automobiliste moyen et II s’ensuit qu’eIle a
appliqué la norme de diligence appropriée.
En toute déférence, noire collègue commet une
ezreur en souscrivant a la conclusion de Ia Cour
d’appel selon laque]ielajuge de premiere instance
aurait dii examiner de manière plus approfondie la
cbnduite de 1’ automobiliste moyen (par. 124). II
écrit ccci, aupar. 119:
Pour bien appliquer Ic critère juridique, le juge de
premiere instance doit se poser Ia question suivante:
Comment un conducteur raisonnable aurait-il roulé
sur ce chemin?>> Le fait de conclure qu’il existe ou
non an danger > ou qu’une courbe eat quelque
chose d’c< intrinsèquement>> dangereux ne vide pas Ia
question.
Plus loin, il dit : > (par.
125). En toute ddférence, considdrer que la juge de
premiere instance aurait dii faire cette analyse parti
culière dans ses motifs est incompatible avec l’arrêt
Van de Perre, precite, lequel Ctablit clairement que
l’omission ou le défaut d’analyser un facteur en pro
fondeur ne constitue pas, en soi, tine raisonjustiflant
de modifier les conclusions du juge de premiere
instance et de réexamniner la preuve. Comme nous
1’ avons dit prCcédemment, il est clair que, quoi
que la juge de premiere instance n’ alt peut-être pas
fait une analyse approfondie de cc volet du critère
dnoncé dans l’arniit Partridge, dc a effectivement
tenu comnpte de cc facteur en formulant Ic critère
approprie puis en l’appliquant aux faits de l’espèce.
Nous tenons a souligner que, en s’appuyant surles
témoignages de MM. Anderson et Werner, lajuge de
premiere instance a choisi de ne pas fonder sa déci
sicin sur les tdmoignages contradictoires rendus par
d’autres témoins. Toutefois, cela ne suffit pas pour
établir qu’elle a la preuve. Lajuge de premiere ins
tance disposait de l’ensemble du dossier et on peut
prdsumer qu’elle l’a étudié d’un bout a l’autre, en
1’ absence d’ autre indication qu’ cUe a oublié, negligé
d’exarniner ou mal interprété la preuve, commet
tant ainsi uric erreur de droit. Le juge de premiCre

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lesjuges lacobucci et Major 269
Toneguzo-Norvell, supra, at p. 123. Mere reliance
by the trialjudge on the evidence of some witnesses
over others cannot on its own form the basis of a
“reasoned belief that the trial judge must have for
gotten, ignored or misconceived the evidence in a
way that affected his conclusion” (Van de Perre,
supra, at para. 15). This is in keeping with the
narrow scope of review by an appellate court appli
cable in this case.
A further indication that the trial judge consid
ered the conduct of an ordinary motorist on Snake
Hill Road is her finding that both Mr. Nikolaisen
and the municipality breached their duty of care to
Mr. Housen, and that the defendant Nikolaisen was
50 percent contributorily negligent. Since a finding
of negligence implies a failure to meet the ordinary
standard of care, and since Mr. Nikolaisen’s negli
gence related to his driving on the curve, to find that
Mr. Nikolaisen’s conduct on the curve failed to meet
the standard of the ordinary driver implies a consid
eration of that ordinary driver on the curve. The fact
that the trial judgc distinguished the conduct of Mr..
Nikolaisen in driving negligently on the road from
the conduct of the municipality in negligently fail
ing to erect a warning sign is evidence that the trial
judge kept the municipality’s legal standard clearly
in mind in its application to the facts, and that she
applied this standard to the ordinary driver, not the
negligent driver.
To summarize, in the course of her reasons, the
trial judge first stated the requisite standard of care
from Partridge, supra, relating to the conduct of the
ordinary driver. She then applied that standard to the
facts referring again to the conduct of the ordinary
driver. Finally, in light of her finding that the munic
ipality breached this standard, she apportioned neg
ligence between the driver and the municipality in
a way which again entailed a consideration of the
instance peutretenir la deposition de certainstCmoins
de préfCrence a d’autres : Tonegu&o-Norvell, pré
cite, p. 123. Le fait pour le juge de premiere ins
tance de s’appuyer sur certains témoignages plutôt
que sur d’autres ne peut a lui seul fournir l’assise
d’une > (Van de Perre, prC
cite, pat 15). Cette conclusion eat compatible avec
la portée restreinte de l’examen qu’il convient de
faire en appel dans la prCsente affaire.
Une autre indication que Ia juge de premiere
instance s’est interrogée sur la facon dont conduit
l’automobiliste moyen sur le chemin Snake Hill
est sa conclusion que M. Nikolaisen et Ia muni
cipalité out tous deux manqué a leur obligation
de diligence envers M. Housen, et que le défeu
deur Nilcolaisen était responsable de negligence
concourante dana une proportion de SOp. 100.
Comme tine conclusion de negligence iniplique un
manquemeut 1a norme de diligence habituelle, et
comme la negligence de M. Nikolaisen était liée
a sa manière de conduire dana le virage, Ia con
clusion que sa conduite a cet endroit ne respectait
pas Ic critère du conducteur moyen suppose qu’on
s’est demandd comment ce conducteur s’ approche
rait du virage. La distinction qu’a dtablie la juge
de premiere instance entre Ia negligence dont a
fait prcuve M. Nikolaisen lorsqu’il roulait sur le
chemin et celle dont la municipalité a fait montre
en omettant d’instafler tin panneau d’avertissement
prouve qu’elle n’a pas perdu de vue la normejuri
clique régissant la municipalité et l’application de
cette norme aux faits, et que lajuge a appliqué cette
norme au conducteur moyen, et non an conducteur
negligent.
En résumé, dans ses motifs la juge de premiere
instance a d’abord Cnoncé la norme de diligence
requise par l’arrêt Partridge, précité, relative
ment a la conduits de l’automobiliste moyen. Elle
a ensuite appliqué cette norme aux fails, se repor
taut encore une fois a la conduits de l’automobi
liste moyen. Enfin, vu sa conclusion que la muni
cipalité avait manqué a cette norme de diligence,
dc a réparti la responsabilitC entre le conducteur
48
47

50
51
49
270 HOUSEN v. NIKOLAISEN lacobucci and Major JJ [2002] 2 S.C.R.
ordinary dnvet As such, we are overwhelmingly
drawn to the conclusion that the conduct of the ordi
nary driver was both considered and applied by the
trial judge.
Thus, we conclude that the trial judge did not
commit an error of law with respect to the munici
pality’s standard of care. On this mattel; we disagree
with the basis for the re-assessment of the evidence
undertaken by our colleague (paras. 122-42) and
regard this re-assessment to be an unjustied intru
sion into the finding ofthe trialjudge that the munk
ipality breached its standard of care. This finding is
a question of mixed law and fact which should not
be overturned absent a palpable and overriding
error. As discussed below, it is our view that no such
error exists, as the trial judge conducted a reason
able assessment based on her view of the evidence.
C. The Trial Judge Did Not Commit A Palpable or
Overriding Error
Despite this high standard of review, the Court of
Appeal found that a palpable and overriding error
was made by the trial judge ([2000] 4 W.W.R. 173,
2000 SKCA 12, atpara. 84). With respect, this find
ing was based on the erroneous presumption that the
trial judge accepted 80 km/h as the speed at which
an ordinary motorist would approach the curve, a
presumption which our colleague also adopts in his
reasons (para. 133).
As discussed above, the trial judge’s finding was
that an ordinary motorist could approach the curve
in excess of 60 kmih iii dry conditions, and 50 km/h
in wet conditions, and that at such speeds the curve
was hazardous. The trial judge’s finding was not
based on a particular speed at which the curve would
be approached by the ordinary motorist. Instead,
she found that, because the curve was hidden and
sharper than would be anticipated, a motorist exer
cising ordinary care could approach it at greater than
et la municipalit6 d’ une manière qui, une fois de
plus, atteste Ia prise en compte du critère du con
ducteur moyen. En consequence, nous en venous
irrdsistiblement a la conclusion que lajuge de pre
mière instance a pris en compte et appliqud ce cr1-
tère.
Par consequent, uous estimons que lajuge de pre
mière instance n’a pas commis d’erreur de droit en
ce qui concerne la norme de diligence a laquelle Ctait
tenue la municipalitd. Sur ce point, nous ne souscri
vons pas aux raisons sur lesquelles se fondênt notre
collegue pour réexanriner Ia preuve (aux par. 122 a
142) et nous considdrons ce réexamen comme une
intervention injustifiée relativement a la conclu
sion de la juge de premiere instance portant que la
municipalitd a manqué a la norme de diligence a
laquelle elle dtait tenue. Cette conclusion porte sur
une question mi.xte de droit et de fail et elle ne peut
pas être inflrmde en 1’ absence d’erreur inanileste et
doininante. Comme nous le vezrons plus loin, nous
sommes d’avis qu’aucune erreur de cette nature n’a
dté commise, car la juge de premiere instance a fait
une analyse raisonnable, fondCe sur son apprécia
tion de la preuve.
C. La juge de premiere instance n ‘a pas commis
d’erreur manfeste ou dominante
Malgré cette norme de contrôle sévère, la Cow
d’appel ajugé que lajuge de premiere instance avait
commis une erreur manifeste et dominante ([2000]
4 W.W.R. 173, 2000 SKCA 12, pan 84). En toute
ddférence, cette conclusion repose sur la présomp
tion erronCe selon laquelle lajuge await accepté que
l’autoinobiliste moyen aprocherait du virage a 80
km/h, présomption qu’adopte également notre col
lègue dans ses motifs (par. 133).
Comme nous l’avons vu plus tôt, Ia conclusion
de la juge de premiere instance dtait que 1’ automo
biliste moyen pourrait s’approcher du virage a une
vitesse supérleure a 60 km/h’sur chaussée sèche, et
50 km/h sur chausée huinide, mais qu’à ces vites—
sea Ic virage était dangereux. Cette conclusion
n’étaitpas fondCe sur une vitesse precise a laquelle
l’automobiliste moyen s’approcherait du virage. La
juge de premiere instance a plutôt estimd que, parce
que le visage eat cache et plus serré que cc quoi on

[2002] 2 RC.S. HOUSEN C. NIKOLAISEN Lesjuges lacobucci et Major 271
the speed at wilich it would be safe to negotiate the
curve.
As we explain in greater detail below, in our
opinion, not only is this assessment far from reach
ing the level of a palpable and overriding error, in
our view, it is a sensible and logical way to deal with
large quantities of conflicting evidence. It would be
unrealistic to focus on some exact speed at which
the curve would likely be approached by the ordi
nary motorist. The findings of the trial judge in this
regard were the result of a reasonable and practical
assessment of the evidence as a whole.
In finding a palpable and overriding error,
Cameron LA. relied on the fact that the trial judge
adopted the expert evidence of Mr Anderson and
Mr. Werner which was premised on a defacto speed
limit of 80 km/h taken from The Highway Traffic
Act, S.S. 1986, c. H-3.1. However, whether or not
the experts based their testimony on this limit, the
trialjudge did not adopt that limit as the speed of the
ordinary motorist approaching the curve. Again, the
trial judge found that the curve could not be taken
safely at greater than 60 km/h dry and 50 km/h wet,
and there is evidence in the record to support this
finding. For example, Mr. Anderson states:
If you don’t anticipate the curve and you get too far into
it before you start to do your correction then you can get
into trouble even at, probably at 60. Fifty you’d have to
be a long ways into it, but certainly at 60 you could.
It is notable too that both Mr. Anderson and Mr.
Werner would have recommended installing a sign,
warning motorists of the curve, with a posted limit
of 50 km/h.
Although clearly the curve could not be nego
tiated safely at 80 kim/h, it could also not be
s’attend normalement, il dtait possible qu’un auto
mobiliste prenaut des prcauti.ons normales s’en
approche a une vitesse sup&ieure a Ia vitesse scu
ritaire pour prendre le virage.
Comme nous aflons le prdciser plus loin, nous
sommes d’avis que non seulement cette appr&ia
lion est-efle loin de constituer une erreur manifeste
et dorninante, mais elle est tine réponse judicieuse
et logique eu gard a l’abondance d’éléments de
preuve contradictoires. II serait irréa]iste de frxer
tine quelconque vitesse a laquelle l’automobiliste
moyen s’approcherait vraisemblablement du virage.
Les conclusions de la juge de premiere instance a
cet égard .[écoulent d’une evaluation raisonnable et
rdaliste de l’ensemble de la preuve.
En concluant a i’ existence d’ une erreur manifeste
et dominante, le juge Cameron de la Cour d’appel
s’est appuyC sur le fair que la juge de premiere
instance avait retenu les témoignages d’expert de
MM. Anderson et Werner, lesquels étaient fondés
sur la vitesse lirnite de facto de 80 km/h prévue
par la Highway Traffic Act, S.S. 1986, ch. H-3.l.
Toutefois, que le témoignage des experts alt étd
ou non fondC stir cette limite, la juge de premiere
instance n’a pas retenu cette vitesse comme étant
celle a laquelle l’automobiliste moyen s’approche
du virage. Rappelons que la juge de premiere ins
tance a estimé qu’il n’était pas possible d’aborder le
virage en sécurité a tine vitesse supérieure a 60 km/h
stir chaussée sèche et 50 km/h sur chaussde hurnide,
et il existe au dossier des elements étayant cette con
clusion. Par exemple, M. Anderson a dir ccci:
[TRADUCTION] Si vous ne prCvoyez pas l’arrivée du
virage et que vous vous engagez trop loin dans celui-ci
avant d’amorcer votre manouivre correctrice, vous na
quez d’ avoir des ennuis même a, probablement a 60. A
cinquante il faudrait que vous soyez engage assez loin,
mais a 60 vous pounxiez certainement en avoit
II convient également de signaler que MM. Anderson
et Werner auraient tous deux recommnandé l’installa
lion d’un panneau avertissant lea automobilistes de
l’iinminence du virage et fixé Ia vitesse muaximale
permise a 50 km/h.
Le virage ne pouvait manifestement pas être pris
en sécunité a 80 km/h, mais il ne pouvait l’être non
52
53

55
272 HOUSEN V. NIKOLAISEN lacobucci and Major JJ. [20021 2 S.C.R.
negotiated safely at much slower speeds. It should
also be noted that the thai judge did not adopt the
expert testimony ofMr. Anderson and Mr. Werner
its entirety. She stated: “There is a portion of Snake
Hill Road that is a hazard to the public. In this
regard I accept the evidence of Mr. Anderson and
Mr. Werner” (para. 85 (emphasis added)). It cannot
be assumed from this that she accepted a de facto
speed limit of 80 kmlh especially when one bears
in mind (1) the trial judge’s statement of the safe
speeds of 50 and 60 lan/h, and (2) the fact that both
these experts found the road to be unsafe at much
lower speeds than 80 km/h.
Given that the trial judge did not base her stand
ard of care analysis on a de facto speed limit of 80
km/h, it then follows that the Court ofAppeal’s find
ing of a palpable and overriding error cannot stand.
Furtherniore, the narrowly defined scope of appel
late review dictates that a thai judge should not be
found to have misapprehended or ignored evidence,
or come to the wrong conclusions merely because
the appellate court diverges in the inferences it
draws from the evidence and chooses to emphasize
some portions of the evidence over others. As we are
of the view that the trial judge committed no error
of 1av in finding that the municipality breached its
standard of care, we are also respectfully of the view
that our colleague’s re-assessment of the evidence
on this issue (paras. 129-42) is an unjustified inter
ference with the findings of the trial judge, based on
a difference of opinion concerning the inferences to
be drawn from the evidence and the proper weight
to be placed on different portions of the evidence.
For Instance, in the opinion of our colleague, based
on some portions of the expert evidence, a reason
able driver exercising ordinary care would approach
a rural road at 50 km/h or less, because a reason
able driver would have difficulty seeing the sharp
radius of the curve and oncoming traffic (pam. 129).
However, the trial judge, basing her assessment on
portions of the expert evidence, found that the
nature Of the road was such that a motorist could be
plus a des vitesses beaucoup plus réduites. U con
vient également de souligner que la juge de pre
mière instance n’a pas retenu intégralement lea
témoignages d’expert de MM. Anderson et Werner.
Elle a dit: [TRADUCTI0N] (par. 85 (nous souli
gnons)). Ces propos ne pennettent pas de presumer
qu’ elle acceptait une vitesse lirnite de facto de 80
km/h, particulièrement si l’ou se rappelle (1) qu’elle
a dit qu’ on pouvait rouler en sécurité a des vitesses
de 50 et de 60 km/h, et (2) que ces deux experts out
considéré que le chemin n’était pas sfir même a des
vitesses bien inférieures a 80 km/h.
Puisque la juge de premiere instance n’a pas
fondC son analyse de Ia norme de diligence sur une
vitesse limite defacto de 80 kmih, il s’ensuit que Ia
conclusion de Ia Cour d’appel relativement a l’exis
tence d’une erreur manifeste et dorninaute ne saurait
être confirxnée.
En outre, vu la portée restreinte de la revision
en appel, on ne saurait conclure qu’un juge de pre
mière instance a negligé d’examiner Ia preuve, l’a
mal hiterprCtCe ou eat arrivé a des conclusions erro
nées, simplement parve que le tribunal d’appel tire
des inferences divergentes de la preuve et decide
d’accorder plus d’iinportance a certains éléments
qu’à d’ auires. Etant d’avis que la juge de premiere
instance n’a pas conunis d’erreur de droit en con
cluant que la municipalité avait violé la norme de
diligence a laquelle elle Ctait tenue, nous estimons
aussi, en toute déférence, que le rdexamen de la
preuve auquel procède notre collegue sur cette.ques
tion (aux pan 129 a 142) constitue une intervention
injustifiée relativement aux conclusions de lajuge de
premiere instance, fondée sur une divergence d’opi
nions quant aux inferences devant être tirCes de la
preuve et au poids qu’il convient d’accorder a divers
elements. Par exemple, notre coilègue est d’avis, sur
Ia foi de certaines parties des témoignages d’expert,
qu’un conducteur raisonnable prenant des précau
dons normales roulerait sur une route rurale a une
vitesse maxirnale de 50 km/h, parve qu’il aurait
de Ia difficulté a voir que le virage est serré et s’il
vient des véhicules en sens inverse (par. 129). Or, se

[2002] 2 R.C.S. HOUSEN C. .NIKOLAISEN Lesjuges lacobucci et Major 273
deceived into believing that the road did not contain
a sharp curve and thus would approach the road nor
mally, unaware of the hidden danger.
We are faced in this case with cotiflicting expert
evidence on the issue of the correct speed at which
an ordinary motorist would approach the curve on
Snake Hill Road. The differing inferences from the
evidence drawn by the trial judge and the Court
of Appeal amount to a divergence on what weight
should be placed on various pieces of conflicting
evidence. As noted by our colleague, Mr. Sparks
was of the opinion that “[if] you can’t see around
the corner, then, you know, drivers would have a
fairly strong signal ... that due care and caution
would be required”. Similar evidence of this nature
was given by Mr. Nikolaisen, and indeed even by
Mr. Anderson and Mr. Werner. This is contrasted
with evidence such as that given by Mr. Anderson
and Mr. Werner that a reasonable driver would be
“lulled” into thinking that there is an 80 km/h road
ahead of him or her.
As noted by McLachlin 3. in Toneguzzo-Norveli,
supra, at p. 122 and mentioned above, “the weight
to be assigned to the various pieces of evidence is
under our trial system essentially the province of the
trier of fact”. In that case, a unanimous Court found
that the Court ofAppeal erred in interfering with the
trial judge’s factual findings, on the basis that it was
open to the trial judge to place less weight on cer
tain evidence and accept other, conflicting evidence
which the trial judge found to be more convincing
(Toneguzzo-Norvell, at pp. 122-23). Similarly, in
this case, the trial judge’s factual findings concern
ing the proper speed to be used on approaching the
curve should not be interfered with. It was open
to her to choose to place more weight on certain
portions of the evidence of Mr. Anderson and Mr.
Werner, where the evidence was conflIcting. Her
assessment of the proper speed was a reasonable
inference based on the evidence and does.not reach
fondant sur d’ autres parties des témoignages d’ex
pert, la juge de premiere instance a estim que la
nature du chemin tait telle qu’un automobiliste
pourrait être amend a croire que le chernin ne corn-
porte pas de virage serr et, de ce fait, ày rouler nor
malement, sans soupçouner l’existence du danger
cache.
En l’espèce, nous sornmes en presence de témoi
gnages d’expert coniradictoires sur la question de la
vitesse a laquelle l’automobiliste moyen s’appro
cherait du virage du chemin Snake Hill. Lea infé
rences différentes que la juge de premiere instance
et la Cour d’appel tirent de la preuve equivalent a
une divergence d’opinion quant an poids a accor
der a divers elements de preuve contradictoires. Le
tCmoin Sparks a érnis l’opinion suivante, que cite
également noire collCgue: [TRADUCrION] . M. Nikolaisen, et meme
MM. Anderson et Werner ont d’ ailleurs tCmoigne
au même effet; Cela contraste avec l’afflrmadon de
MM. Anderson et Werner selon laquelle an conduc
tear raisonnable serait [‘rRADUCrION] a
croire qu’il se trouve sur tin chemin oü l’on pent
roulerà8Okni/h.
Comme l’a souligne madamele juge McLacblin,
a la p. 122 de 1’ arrêt Toneguzzo-Norvell, précité,

60
274 HOUSEN v. oi...&is lacobucci and MajorJi [2002] 2 S.C.R.
the level of a palpable and overriding error. As such,
the trialjudge’s findings with respect to the standard
of care should not be overturned.
W Knowledge of the Municipality
We agree with our colleague that s. 192(3) of The
Rural Municipality Act, 1989, requires the plaintiff
to show that the municipality knew or should have
known of the disrepair of Snake Hill Road before
the municipality can be found to have breached its
duty of care under s. 192. We also agree that the evi
dence of the prior accidents, in and of itsel±, is insuf
ficient to impute such knowledge to the municipal
ity. However, we find that the trial judge did not err
in her finding that the municipality knew or ought to
have known of the disrepair.
As discussed, the question of whether the munici
pality knew or should have known of the disrepair of
Snake Hill Road is a question of mixed fact and law.
The issue is legal in the sense that the municipality
is held to a legal standard ofknowledge of the nature
of the road, and factual in the sense of whether it had
the requisite knowledge on the facts of this case. As
we state above, absent an isolated error in law or
principle, such a finding is subject to the “palpable
and overriding” standard of review. In this case, our
colleague concludes that the trial judge erred in law
by failing to approach the question of knowledge
from the perspective of a prudent municipal coun
cillor, and holds that a prudent municipal councillor
could not be expected to become aware of the risk
posed to the ordinary driver by the hazard in ques
tion. He also finds that the trial judge erred in law
by failing to recognize that the burden of proving
knowledge rested with the plaintiff. With respect,
we disagree with these conclusions.
appreciation de la vitesse appropriée constitualt une
inference raisonnable, fondée sur la preuve, et elle
ne constitue pas une erreur manifeste et dominante.
Dans ce contexte, ii n’y a pas lieu d’écarter ses con
clusions concernant la norme de diligence.
IV Connaissance de la municipalitC
A l’instar de notre collègue, nous estimons que
le par. 192(3) de la Rural Municipality Act, 1989,
oblige le demandeur a démontrer que lamunicipalité
connaissait on aurait dt connaitre le mauvais Ctat du
cheniin Snake Hill pour qu’il soit possible de con
clure qu’elle a manqué a l’obligation de diligence
qui liii incombe en vertu de l’art. 192. Nous sommes
nous aussi d’avis que la preuve des accidents ante
rieurs n’est pas, en soi, suffisante pour prêter cette
connaissance a la municipalité. Cependaut, nous
arrivons a in conclusion que lajuge de premiere ins
tance n’a pas commis d’erreur lorsqu’elle a conclu
que Ia municipalité connaissait ou aurait dfl connar
tre le mauvais dtat du chemin.
Conune nous l’avons vu, l.a question de savoir si
la municipalitC connaissait ou aurait dii connaitre le
mauvais état du chemin Snake Hill est une question
mixte de droit et de fait. U s’agit, d’une part, d’une
question de droit en ce que l.a municipaJité est tenue
a une nonne juridique qui lui impose de connaltre
la nature dir chemin, et, d’autre part, d’uize question
de fait en ce qu’il faut determiner si, eu Cgard aux
faits de l’espèce, cue avait la connaissance requise.
Comme nous 1’ avons tilt précédemnient, en 1’ ab
sence d’erreur de droit ou de principe isolable, une
telle conclusion est assujettie a la norme de contrôle
tie l’erreur < manifeste et doruinante >>. Eu l’espèce,
notre collègue conclut que in juge de premiere ins
tance a conunis uric erreur de droit en ne considCrant
pas la question de la connaissance du point de vue
du conseiller municipal prudent, et il estime qu’on
ne pouvaits’attendre a ce qu’un conseiller munici
pal prudent s’apercoive du risque que le danger en
question faisait courir au conducteur moyen. II est
Cgalement d’ avis que la juge de premiere instance a
commis une erreur de droit en ne reconnaissant pas
que la charge de prouver la connaissance incornbait
au demandeur. En toute déférence, nous ne pouvons
souscrire a ces conclusions.
S

[2002] 2 RC.S. HOUSEN C. N.tKOLAISEN Lesjuges lacobucci et Major 275
The hazard in question is an unsigned arid unex
pected sharp curve. In our view, when a hazard is,
like this one, a permanent feature of the road which
has been found to present a risk to the ordinary
driver, it is open to the trial judge to draw an infer
ence, on this basis alone, that a prudent municipal
councillor ought to be aware of the hazard. In sup
port of his conclusion on the issue of knowledge,
our colleague states that the municipality’s knöwl
edge is inextricably linked to the standard of care,
and ties his finding on the question of knowledge to
his finding that the curve did not present a hazard to
the ordinary motorist (para. 149). We agree that the
question ofknowledge is closely linked to the stand
ard of care, and since we find that the trialjudge was
correct in holding that the curve presented a hazard
to the ordinary motorist, from there it was open to
the trial judge to find that the municipality ought to
have been aware of this hazard. We further note that
as a question of mixed fact and law this finding is
subject to the “palpable and overriding” standard of
review. On this point, however, we restrict ourselves
to situations such as the one at bar where the hazard
in question is a permanent feature of the roads as
opposed to a temporary hazard which reasonably
may not come to the attention of the municipality in
time to prevent an accident from occurring.
In addition, our colleague relies on the evidence
of the lay witnesses, Craig and Toby Thiel, who
lived on Snake Hill Road, and who testified that
they had not experienced any difficulties with it
(para. 149). With respect, we find three problems
with this reliance. First, since the curve was found
to be a hazard based on its hidden and unexpected
nature, relying on the evidence of those who drive
the road on a daily basis does not, In our view, assist
hi determining whether the curve presented a hazard
to the ordinary motorist, or whether the municipal
ity ought to have been avare of the hazard. In addi
tion, in finding that the municipality ought to have
known of the disrepair, the trial judge clearly chose
not to rely on the abive evidence. As we state above,
Le danger en question est une courbe sernie et
soudaine, qui n’est annoncée par aucune signali
sation. A noire avis, lorsqu’un danger constitue,
comme celul-ci qui nous intéresse, tine caractéristi
que permanente qui, a-t-on jugé, présente tin risque
pour le conducteur moyen, le juge de premiere ins
tance peut, ppur ce seul motif, inférer qu’un con
sculler municipal prudent aurait dfi counaitre l’exis
tence d’un danger. Pour étayer sa conclusion stir la
question de in connaissauce, notre collegue afflrme
que la connaissance de la municipalité est intime
ment liée a celle de la norme de diligence, et il lie
sa conclusion stir la connaissance a sa conclusion
selon laquelle la courbe ne constituait pas tin danger
pour l’automobiliste moyen (par. 149). Nous recon
naissons que la question de la connaissance est
étroitement liée a celle de la norme de diligence,
et, comme nous estimons que Ia juge de preniière
instance a eu raison de conclure que la courbe pré
sentait un danger pour l’automobiliste moyen, elle
pouvait des lors juger que Ia municipalité aurait
dfl connaitre cc danger. Soulignons également que
cette conclusion visant tine question mixte de fait
et de droit est assujettie a Ia norme de contrôle de
l’erreur >. Sur ce point,
toutefois, nous limitons Ia portée de noire opinion
aux situations analogues a celle qui nous occupe, oii
le danger coustitue tine caractdristique pennanente
du chemin, par opposition a uu danger temporaire
dont tine municipalité pourrait raisonnablement ne
pas être informée en temps utile pour empêcher un
accident de survenir.
Par ailleurs, noire coflègue se fonde stir les dépo
sitions de témoins ordinaires, Craig et Toby Thiel,
qui habitalent stir le chemin Snake Hill et qui ont
témoigné n’avoir jamais éprouvé de difficulté a
couduire a cet endroit (par. 149). En toute défé
rence, nous estimons que le fait de se fonder stir
ces témoIgnages pose trois problemes. D’abord, vu
la conclusion que in courbe constituait un danger a
cause de sa nature cachée et imprdvue, cc n’est pas
en se basant stir le témoignage de ceux qul emprun
tent quotklieimement le chemin qu’il est possible,
a noire avis, de determiner si cette courbe présen
tait tin danger pour l’automobIliste moyen, ou si
la municipalité aurait dfl connaltre l’existence du
danger. Dc plus, en concluant que Ia municipalitC
62
61

63
64
276 HOUSEN V. NIKOLAISEN lacobucci and Major JJ. [2002] 2 S.C.R.
it is open for a trial judge to prefer some parts of
the evidence over others, and to re-assess the trial
judge’s weighing of the evidence, is, with respect,
not within the province of an appellate court.
As well, since the question of knowledge is to
be approached from the perspective of a prudent
municipal councillor, we find the evidence of lay
witnesses to be of little assistance. In Ryan, supra,
atpara. 28, Major 3. stated that the applicable stand
ard of care is that which “would be expected of
an ordinary, reasonable and prudent person in the
same circumstances” (emphasis added). Municipal
councillors are elected for the purpose of manag
ing the affairs of the municipality. This requires
some degree of study and of information gather
ing, above that of the average citizen of the munici
paiity. Indeed, it may in fact require consultation
with experts to properly meet the obligation to be
informed. Although municipal councillors are not
experts, to equate the “prudent municipal council
icr” with the opinion of lay witnesses who live on
the road is incorrect in our opinion.
It is in this context that we view the following
comments of the trial judge, at para. 90:
If the R.M. did not have actual knowledge of the
danger inherent in this portion of Snake Hill Road, it
should have known. While four accidents in 12 years may
not in itself be significant, it takes on more significance
given the close proximity of three of these accidents, the
relatively low volume of traffic, the fact that there are per
manent residences on the road and the fact that the road is
frequented by young and perhaps less experienced driv
ers. I am not satisfied that the RM. has established that
in these circumstances it took reasonable steps to prevent
this state of disrepair on Snake Hill Road from continu
ing.
aurait dfl connaltre le mauvais dtat du chemin, la
juge de premiere instance a clairement choisi de
ne pas se fonder sur les tdmoignages susmention
nés. Comme nous l’avons dit prdcddemment, le juge
de premiere instance petit prdfdrer certaines par
ties de in preuve a d’autres, et, en toute défdrence,
il n’appartient pas au tribunal d’appel de procdder
a nouveau a 1’ appreciation de la preuve, tflche déjà
accomplie par le juge du proces.
Qui plus est, dtant donné que Ia question de la
connaissauce doit &re considérée du point de vue
du conseiller municipal prudent, nous estimons que
le tCmoignage des tCmoins ordinaires est peu utile.
Dans l’arrflt Ryan, prcitC, par. 28, le juge Major a
dit que in norme de diligence qui s’ applique est celle
de la personne agissant aussi diligemment que > (nous sou
lignons). Les conseillérs municipaux sont élus pour
gérer lea affaires de Ia municipalité. Pour s’ acquit
ter de cette tâche, il leur faut, dans un cas donnd,
examiner Ia situation et recueiilir de l’information,
faire davantage que ce que fait le simple citoyen de
la thunicipalité. Dc fait, us peuvent avoir a consul
ter des experts pour respecter leur obligation d’être
inforniés. Bien que lea conseillers inunicipaux ne
solent pas des experts, il est a notre avis erroné
d’ assiniiler le point de vue du < conseiller munici
pal prudent >> a l’opinion de témoins ordinaires qul
habitent sur le chemin.
C’est a la lumière de cc contexts que nous inter
prétons les commeutaires suivants de lajuge de pre
inière instance (au par. 90):
[TRADUCTION] Si Ia M.R. ne connaissait pas concrè
tement Ic danger intrinsèque que comporte cette portion
du cheniin Snake Hill, elle aurait dfl le connaitre. Le fait
que quatre accidents se soient produits en 12 ans n’est
peut-&re pas significatif en aol, tunis ii le devient si
l’on considère qu trois de ces accidents sont survenus
a proximité, qu’il s’agit d’une route a debit de circula
tion relativement faible, que des residences pennanentes
sont situées en bordure de ceile-ci et que Ic chemin est
fréquentC par des conducteurs jennes et peut-être moms
expdrimentés. Je ne suis pas convaincue que Ia M.R. a
dtabli avoir, dans ces circonstances, pris des mesures
raisonnables pour remédier an mauvais état du chezuin
Snake Hill. .
-

I
[2002] 2 R.C.S. HOUSEN C. NUCOLAISEN Les juges lacobucci et Major 277
From this statement, we take the trial judge to have
meant that, given the occurrence of prior accidents
on this low-traffic road, the existence of perma
nent residents, and the type of drivers on the road,
the municipality did not take the reasonable steps
it should have taken in order to ensure that Snake
Hill Road did not contain a hazard such as the one
in question. Based on these factors, the trial judge
drew the inference that the municipality should
have been put on notice and investigated Snake Hill
Road, in which case it would have become aware
of the hazard in question. This factual inference,
grounded as it was on the trial judge’s assessment of
the evidence, was in our view, far from reaching the
requisite standard of palpable and overriding error,
proper.
Although we agree with our colleague that the
circumstances of the prior accidents in this case
do not provide a direct basis for the municipality
to have had knowledge of the partIcular hazard in
question, in the view of the trial judge, they should
have caused the municipality to investigate Snake
Hill Road, which in turn would have resulted in
actual knowledge. In this case, far from causing
the municipality to investigate, the evidence of Mr.
Danger, who had been the municipal administrator
for 20 years, was that, until the time of the trial, he
was not even aware of the three accidents which
had occurred between 1978 and 1987 on Snake Hill
Road. As such, we do not find that the trial judge
based her conclusion on any perspective other than
that of a prudent municipal councillor and there
fore that she did not commit an error of law in this
respect. Moreover, we do not find that she imputed
knowledge to the municipality on the basis of the
occurrence of prior accidents on Snake Hill Road.
The existence of the prior accidents was simply a
factor which caused the trial judge to find that the
municipality should have been put on notice with
respect to the condition of Snake Hill Road (para.
90).
We emphasize that, in our view, the trial judge
did not shift the burden of proof to the municipality
Scion notre interpretation, la juge de premiere ins
tance a voulu dire que, compte tenu des accidents
ant&ieurs sur cc chentin a faible debit de circula
lion, de la presence de residents permanents et du
type de conducteurs qul empruntent le chemin, Ia
municipalite n’ a pan p± les mesures raisonnables
qu’eile aurait dü prendre pour faire en sorte que
le chernin Snake Hill ne comporte pas de danger
comme celui en cause. A partir de ces élémcnts,
la juge de premiere instance a inférC que la muni
cipalitC aurait dii être informée de hi situation sur
le chemin Snake Hill et aurait dii faire enquête a
• cet dgard, ce qui liii aurait pertnis de prendre con
naissance de l’existence du danger. Cette inference
factuelle, qui repose sur l’apprdciation de la preuve
faite par la juge de premiere instance, Ctait selon
nous fondée et loin de constituer l’erreur manifeste
et doipinante requise par la norme pertinente.
A l’instar de noire collègue, nous estimons que
les circonstances des accidents survenus antérieu
rement, en l’espèce, ne constituent pas uric preuve
directe que Ia municipalité aurait dii avoir comiais
sance du danger particulier en cause, mais, scion
la juge de premiere instance, ces circonstances
auraient dii inciter la municipalitC a faire enguête
a l’Cgard du chen-iin Snake Hill, cc qui lui aurait
permis de prendre connaissance concrètement du
danger. Dans la présente affaire, lea accidents ante
rieurs sont loin d’avoir incite la munIcipalité a faire
enquête. D’ailleurs, M. Danger, administrateur de in
municipalité pendant 20 ans, a témoigné que, jus
qu’au proves, il n’était mme pas an fait des trois
accidents survenus entre 1978 et 1987 sur le chemin
Snake Hill. En consequence, nous n’estinions pan
que la juge de premiere instance a fondC sa con
clusion stir quelque autre point de vue aulre que
celui du conseifler municipal prudent, et cUe n’a
donc pan cominis d’erreur de droit a cet dgard. Dc
plus, nous sornmes d’avis qu’elie n’a pas prêté ala
munIcipalité la connaissance requise sur Ia base des
accidents antérieurs. L’existeuce de ces accidents ne
constituait rien de plus qu’un des álánents qui l’ont
arnenée a conclure que hi municipalité aurait dii être
au fait de l’état du chemin Snake Hill (par. 90).
Nous tenons a souuigner que lajuge de premiere
instance n’a pas, a noire avis, iransféré le fardeau de
65

67
278 HOUSEN V. NIKOLAISEN facobucci and Major JJ. [2002] 2 S.(.R.
on this issue. Once the thai judge found that there
was a permanent feature of Snake Hill Road which
presented a hazard to the ordinary motorist, it was
open to her to draw an inference that the municipal—
ity ought to have been aware of the danger. Once
such an inference is drawn, then, unless the munici
pality can rebut the inference by showing that it
took reasonable steps to prevent such a hazard from
continuing, the inference will be left undisturbed. In
our view, this is what the trial judge did in the above
passage when she states: “I am not satisfied that the
R.M. has established that in these circumstances it
took reasonable steps to prevent this state of disre
pair on Snake Hill Road from continuing” (para. 90
(emphasis added)). The fact that she drew such an
inference is clear from the fact that this statement
appears directly after her finding that the municipal
ity ought to have known of the hazard based on the
listed factors. Thus, it is our view that the trial judge
did not improperly shift the burden of proof onto the
municipality in this case.
As well, although the circumstances of the prior
accidents in this case do not provide strong evi
dence that the municipality ought to have known
of the hazard, proof of prior accidents is not a nec
essary condition to a finding of breach of the duty
of care under s. 192 of The Rural Municipality Act,
1989. If this were so, the first victim of an acci
dent on a negligently maintained road would not
be able to recover, whereas subsequent victims in
identical circumstances would. Although under s.
192(3) the municipality cannot be held responsi
ble for disrepair of which it could not have known,
it is not sufficient for the municipality to wait for
an accident to occur before remedying the disre
pair, and, in the absence of proof by the plaintiff
of prior accidents, claim that it could not have
known of the hazard. If this were the case, not
only would the first victim of an accident suffer a
disproportionate evidentiary burden, but munici
palities would also be encouraged not to collect
information pertaining to accidents on its roads,
as this would ‘make it more difficult for the plain
tiff in a motor vehicle accident to proSre that the
Ia preuve a la municipalité sur cette question. Des
bra qu’elle a conclu qu’il existait sur le chemin
Snake Hill une caractérisdque permanents présen
tant un danger pour l’automobiliste moyen, il liii
&ait loisible d’inférer que la municipalit await
dfl Ctre au fait du danger. Des l’instant oü une tefle
inference est tirée, elle demeure inchangée a moms
que la municipalite ne puisse la refuter en demon
trant qu’elle a pris des mesures raisonnables pour
faire cesser le danger. Selon nous, c’est ce que la
juge de premiere instance a fait dans l’extrait precite
lorsqu’elle dit : [TRADUCrI0N] cc Je ne suis pas con
vaincue que la M.R. a dtabli avoir, dans ces circons
tances, pris des mesures raisonnables pour remédier
au mauvais Ctat du chemin Snake Hill>> (par. 90
(nous soulignons)). L’existence de cette inference
ressort clairement du fait que le passage precite suit
immédiatement la conclusion de lajuge de prenilère
instance selon laquelle, pour les raisons qu’elle énu
mere, la municipalité aurait dii connaltre 1’ existence
du danger. Par consequent, nous sommes d’avis que
la juge de premiere instance n’a pas fait etreur et
transférd le fardeau de Ia preuve a la municipalité
en l’espèce.
Dc même, bien que lea accidents survenus
antérieurement en l’espèce ne constituent pas une
preuve solide que la municipalitC aurait dii counal
ire I’ existence du danger, Ia preuve d’ accidents ante
rieurs n’est pas une condition nécessaire pour qu’un
tribunal puisse conclure a la violation de l’obliga
lion de diligence prévue par l’art. 192 de la Rural
Municipality Act, 1989. Si c’était le cas, la premiere
victime d’un accident stir une route négligemment
entretenue ne pourrait obtenir reparation, abors que
les victimes subséquentes d’accidents survenant
dans des circonstances identiques le. pourraient.
Bien que, an regard du par. 192(3), la municipalité
ne puisse être tenue responsable du mauvais état
d’une route dont elle n’auraitpu avoir connaissance,
cUe ne saurait se contenter d’attendre qu’un accident
se produise avant de remédier au mauvais Ctat de Ia
route et, si un demandeur n’ apporte pas la preuve de
l’existence d’ accidents antérieurs, soutenir qu’elle
n’aurait Pu connaitre l’existence du danger. Dans
cette hypothèse, non seulement imposerait-on a
la premiere victime d’uu accident tin fardeau de
preuve disproportionné, mais on encouragerait aussi

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN__LesjugesIacobucci etMajor 279
municipality knew or ought to have known of the
disrepair.
Although in this case the trial judge emphasized
the prior accidents that the plaintiff did manage to
prove, in our view, it is not necessary to rely on these
accidents in order to satisfy s. 192(3). For the plain
tiff to provide substantial and concrete proof of the
municipality’s knowledge of the state of disrepair of
its roads, is to set an impossibly high burden on the
plaintiff. Such information was within the particular
sphere of knowledge of the municipality, and in our
view, it was reasonable for the trial judge to draw an
inference of knowledge from her finding that there
was an ongoing state of disrepair.
To summarize our position on this issue, we do
not find that the trial judge erred in law either by
failing to approach the question from the perspec
tive of a prudent municipal councifior, or by improp
erly shifting the burden of proof onto the defendant.
As such, it would require a palpable and overriding
error in order to overturn her finding that the munici
pality knew or ought to have known of the hazard,
and, in our view, no such error was made.
V. Causation
We agree with our colleague’s statement at
para. 159 that the trial judge’s conclusions on the
cause of the accident was a finding of fact: Cork v.
Kirby MacLean, Ltd., [1952] 2AI1E.R. 402 (CA.),
at p. 407, quoted with approval in Matthews v.
MacLaren (1969), 4 D.L.R. (3d) 557 (Ont. JIC.),
at p.
with absent palpable and overriding error.
566. Thus, this finding should not be interfered
les municipalités a ne pas recueiflir d’informatious
concernaut les accidents survenant sur leurs routes,
puisqu’il serait en consequence plus difficile a la
victime d’un accident d’automobiie qui intente des
poursuites de prouver que la municipalité visCe con
naissait le mauvais état de la route ou aurait d le
connaltre.
Bien que, en l’espèce, Ia juge de premiere ins
tance ait souligné les accidents antérieurs dont le
demandeur a effectivement prouvé l’existence,
nous sommes d’avis qu’il n’est pas nécessaire de
s’appuyer sur ces accidents pour satisfaire aux cxi
gences du par. 192(3). Exiger du demandeur qu’il
fournisse une preuve substantielle et tangible de
la connaissance par la municipalité du mauvais
état do ses routes revient a lui imposer un fardeau
inacceptablement tourd. II s’agit d’information
relevant du doniaiue de connaissance de Ia muni
cipalité et, selon nous, il était raisonnabie que la
juge de premiere instance infre de sa conclusion
relative an mauvais état d’entretien persistant du
chemin que la municipalitC possédait la connaIs
sance requise.
Pour résumer noire position sur cette question,
nous ne pouvons conclure que Ia juge de premiere
instnce a commis une erreur de droit soit parce
qu’elle aurait omis d’examiner la question du point
de vue du conseiller municipal prudent, soit parce
qu’elle aurait a tort transféré le fardeau de lapreuve
a la défenderesse. Par consequent, il faudrait une
erreur manifeste et dominante pour écarter sa con
clusion quo la municipalitC connaissait le danger ou
aurait d le connaitre et, scion nous, aucune erreur
de cette nature n’a été commise.
V. Lien de causaiitC
Nous faisons nôtres les propos énoncés par noire
coilègue, au.par. 159, scion lesquels la conclusion
de la juge de premiere instance quant a la cause
de 1’ accident CEalt une conclusion de fait: Cork c.
Kirby MacLean, Ltd., [1952] 2 All E.R. 402 (C.A.),
p. 407; cite et approuvé dans Matthews c. MacLaren
(1969), 4 D.L.R. (3d) 557 (H.C. Out.), p. 566. En
consequence, cette àouclusion ne doit pas être mcdi
flee en 1’ absence d’erreurmanifeste et dorninante.
68
69
70

71
280 HOUSEN v. NIKOLAISEN lacobucci and Major JJ. [2002] 2 S.C.R.
The trialjudge based her findings on causation on
three points (at para. 101):
(1) the accident occurred at a dangerous part of
the road where a sign warning motorists of the
hidden hazard should have been erected;
(2) even ifthere had been a sign, Mr. Nikolaisen’s
degree of Impairment did increase his risk of not
reacting, or reacting inappropriately, to a sign;
(3) even so, Mr. Nikolaisen was not driving reck
lessly such that one would have expected him to
have missed or ignored a warning sign. Moments
before, on departing the Thiel residence, he had
successfully negotiated a sharp curve which he
could see and which was apparent to him.
The trialjudge concluded that, on a balance ofprob
abilities, Mr. Nikolaisen would have reacted and
possibly avoided an accident, if he had been given
advance warning of the curve. However she also
found that the accident was partially caused by the
conduct of Mr. Nikolaisen, and apportioned fault
accordingly, with 50 percent to Mr. Nikolaisen and
35 percent to the Rural Municipality (para. 102).
72 As noted above, this Court has previously held
that “an omission is only a material error if it gives
rise to the reasoned belief that the trial judge must
have forgotten, ignored or misconceived the evi
dence in a way that affected his conclusion” (Van de
Perre, supra, at para.l 5). In the present case, it is not
clear from the trial judge’s reasons which portions
of the evidence of Mr. Laughlin, Craig and Toby
Thiel and Paul Housen she relied upon, or to what
extent. However, as we have already stated, the full
evidentiary record was before the trial judge and,
absent further proof that the omission in her reasons
was due to her misapprehension or neglect, of the
evidence, we can presume that she reviewed the evi
dence in its entirety and based her factual findings
Lajuge de premiere instance a fondé ses conclu
sions au sujet du lien de causalité sur trois éléments
(aupar. 101):
(1) l’accident est survenu a un endroit dangereux
du chenthi, oi un panneau de signalisation aurait
dü être installd pour avertir les automobilistes du
danger cache;
(2) même s’il y avait eu un panneau de signali
sation, le degré d’ébriétd de M. Nikolaisen avait
accni chez lui le risque qu’il ne réagisse pas du
tout ou de façon inappropriée a tine signalisa
tion;
(3) malgré cela, M. Nikolaisen ne conduisait pas
de facon si téméraire qu’il était a prévoir qu’il
ne volt pas tin panneau de signalisation ou n’en
tienne pas compte. Quelques instants plus tat, a
son depart de la residence des Thiel, il avail pris
avec succès un virage serré qu’il pouvait claire-
merit voir.
La juge de premiere instance a estimé que, selon
la prépondérance des probabi.lités, M. Nikolaisen
aurait réagi et peut-être Cvit l’accident si on lui
avait signalé a l’avance la presence de la courbe.
Toutefois, elle a Cgalement condo que 1’ accident
avait etC cause en partie par la conduite de M.
Nikolaisen, et dc a rCparti Ia responsabiiitC en con
sequence, soitdans tine proportion de 5Op. 100 a
M. Nikolaisen et de 35p. 100 a la municipalité
rurale (par. 102).
Comme nous l’avons indiquC précCdemntent,
notre Cour ajugC, dans uric autre affaire, qu’> (Van
de Perre, prCcitC, par. 15). En l’espèce, les motifs de
la juge de premiere instance n’indiquent pas clai
rement sur quelles parties des tCmoignages de M.
Laughlin, de Craig et Toby Thiel et de Paul Housen
dc s’est appuyCe, ni dans quelle mesure dc
l’a fait. Cependant, comme nous I’avons dit plus
tot, la juge de premiere instance disposait de l’en
semble de la preuve et, en 1’ absence d’autre élCment

[2002] 2 R.C.S. H0UsEN C. NIKOLAISEN Lesjuges lacobucci et Major 281
on this review. This presumption, absent sufficient
evidence of misapprehension or neglect, is consist
ent with the high level of error required by the test
of “palpable and overriding” error. We reiterate that
it is open to the trial judge to prefer the testimony
of certain witnesses over others and to place more
weight on some parts of the evidence than others,
particularly where there is conflicting evidence:
Toneguzzo-Norvell, supra, at pp. 122-23. The mere
fac that the trialjudge did not discuss a certain point
or certain.evidence in depth is not sufficient grounds
for appellate interference: Van de Perre, supra, at
para.. 15.
For these reasons, we do not feel it appropriate
to review the evidence of Mr. Laughlin and the lay
witnesses de novo. As we concluded earlier, the trial
judge’s finding offact that a hidden hazard existed at
the curve shou]:d not be interfered with. The finding
of a hidden hazard that requires a sign formed part
of the basis ofher findings concerning causation. As
her conclusions on the existence of a hidden hazard
had a basis in the evidence, her conclusions on cau
sation grounded in part on the hidden hazard finding
also had a basis in the evidence.
As for the silence ofthe trialjudge on the evidence
of Mr. Laughlin. we observe only that the evidence
of Mr. Laughlin appears to be general in nature and
thus of limited utility. Mr. Laughlin admitted that he
could only provide general comments on the effects
of alcohol on motorists, but could not provide spe
cific expertise on the actual effect of alcohol on an
individual driver. This is significant, as the level of
tolerance of an individual driver plays a key role
in determining the actual effect of alcohol on the
indiquant que cette omission dans ses motifs résulte
du fait qu’elle aurait mal interprté des eltiments de
Ia preuve ou negligé d’en examiner certains, nous
pouvons presumer qu’elle a examine l’ensemble de
la preuve et que ses conclusions dc fait reposalent
sur cet examen. En 1’ absence de preuve établissant
de façon suffisante qu’il y a eu mauvaise interpréta
tion d’e’iCments de preuve ou negligence d’exami
ncr certains de ceux—ci, cette prCsomption pennet
de conclure a l’absence d’erreur importante du type
de celle requise pour satisfaire au critère de l’exreur
. Nous tenons a rappe
ler que Ic juge de premiere instance petit préfCrer le
témoignage de certains témoins et accorder plus de
poids a certaines parties de la preuve qu’à d’autres,
particulièrement en presence do preuves contradic
toires: Toneguzzo-Norvell, précité, p. 122-123. Le
simple fait que lajuge de premiere instance n’a pas
analyse en profondeur un point donné ou tin élément
de preuve particulier ne constitue pas tin motif suffi
sant pourjustifier l’interventiou des tribunaux d’ap
pel : Van de Perre, précitC, par. 15.
Pour ces motifs, nous n’estimons pas oppor.
tun d’examiner a nouveau les depositions de M.
Laughlin et des témoins ordinaires. Comme nous
l’avons affirmC précédeniment, ii n’y a pas lieu de
modifier la conclusion de fait do la juge de pre
mière instance scion laquelle la courbe présentait
un danger cache. Ses conclusions touchant Ic lien
de causalité reposent en partie stir cette conclusion
relative a l’existence d’un danger cache nCcessitant
l’installation d’un panneau d’avertissement. Tout
corome ses conclusions relatives a l’existence d’un
danger cache, celles touchant le lien de causalité —
fondées en partie stir le danger cache — avaieut
des aussi des assises dans la preuve.
Pour cc qul eat du silence de lajuge de premiere
instance concernant le tCmoignage de M. Laughlin,
signalons simplement que cc témoiguage paralt être
do nature génCrale et, partant, d’une utilité limitée.
M. Laughlin a reconnu qu’il ne pouvait faire que des
observations génCrales quant aux effets de l’alcool
stir lea automobilistes, et non apporter tine exper
tise particuuière stir l’effet concret de l’alcool stir tin
conducteur donné. II s’agit d’un point important,
puisque le scull de tolerance d’un conducteur donné
73
74

75
76
77
282 HOUSEN v. NIKOLAISEN lacobucci and Major JJ. [2002] 2 S.C.R.
motorist; an experienced drinker, although danger—
ous, will probably perform better on the road than
an inexperienced drinker. It is noteworthy that the
trial judge believed the evidence of Mr. Anderson
that Mr. Nikolaisen’s vehicle was travelling at the
relatively slow speed of between 53 to 65 km/h at
the time of impact with the embankment. It was
also permissible for the trial judge to rely on the
evidence of lay witnesses that Mr. Nikolaisen had
successfully negotiated an apparently sharp curve
moments before the accident, rather than relying on
the evidence of Mr. Laughlin, which was of a hypo
thetical and unspecific nature. Indeed, the hypothet
ical nature of Mr. Laughlin’s evidence reflects the
entire inquiry into whether Mr. Nikolaisen would
have seen a sign and reacted, or the precise speed
that would be taken by a reasonable driver upon
approaching the curve. The abstract nature of such
inquiries supports deference to the factual frudings
of the trial judge, and is consistent with the stringent
standard imposed by the phrase “palpable and over
riding error”.
Therefore we conclude that the trial judge’s fac
tual findings on causation were reasonable and thus
do not reach the level of a palpable and overriding
error, and therefore should not have been interfered
with by the Court ofAppeaL
VI. Common Law Duty of Care
As we conclude that the municipality is liable
under The Rural Municipality Act, 1989, we find it
unnecessary to consider the existence of a common
law dutyin this case.
VII. Disposition
As we stated at the outset, there are important
reasons and principles for appellate courts not to
interfere improperly with trial decisions. Applying
V aux
joue tin râle essentiel dans la determination de l’effet
concret de 1’ alcool stir cet automobiliste; bien que
dangereuse, la personne qui a l’habitude de boire
se débrouillera probablement mieux sur la route
qu’une personne qui n’en a pas l’habitude. Ii con
vient de souligner que lajuge de premiere instance
a cru le témoignage de M. Anderson selon lequel le
véhicule de M. Nikolaisen roulait a tine vitesse rela
tivement faible, soit entre 53 et 65km/h, au moment
de l’impact avec le remblai. II lui tait dgalement
permis de retenir les depositions des temoins ärdi
naires selon lesquelles M. Nikolaisen avait réussi a
prendre tin virage apparemment serr6 quelques ins
tants avant l’accident, plutôt que le témoignage de
M. Laughlin, lequel était de nature hypothdtique et
générale. Dc fait, Ia nature hypothetique du tdmoi
gnage de M. Laughlin est representative de toute
1’ analyse de la question de savoir si M. Nikolaisen
aurait aperçu tin panneau de signalisation et aurait
réagi en consequence, ou a queUe vitesse precise un
conducteur raisonnable s’approcherait du virage.
Le caractère théorique de ces analyses justifie de
faire moutre de retenue a i’ gard des conclusions
factuelles de la juge de premiCre instance et permet
d’afflrmer qu’on n’a pas satisfait a la norme rigou
reuse imposée par 1’expression .
Par consequent, nous estimons que les constata
tions factuelles de la juge de premiere instance con
cernant la causalitC étaient raisonnables, qu’ cUes ne
constituent donc pas une erreur manifeste et domi
nante et, partant, que la Cour d’appel n’aurait pas dii
les modifier.
VI. Obligation de diiience prévue par la common
law
Puisque nous concluons a la responsabilité de
la municipalité en vertu de la Rural Munkipality
Act, 1989, nous n’estimons pas nécessaire de nous
demander s’il existe en l’espèce une obligation de
diligence prévue par la common law.
VII. Dispositif
Comme nous l’avons dit au depart, d’importan
tes raisons et d’importants principes coinmandent
tribunaux d’appel de ne pas modifier indment

02 R.C.S. HOUSEN C. NIKOLAISEN Le juge Bastarache 283
these reasons and principles to this case, we would
allow the appeal, set aside the judgment of the
Saskatchewan Court of Appeal, arid restore the
judgment of the trial judge, with costs throughout
The reasons of Gonthier, Bastarache, Biunie and
LeBel 33. were delivered by
BAsmcHE 3. (dissenting) —
I. Introduction
This appeal arises out of a single-vehicle acci
dent which occurred on July 18, 1992, on Snake
Hill Road, a rural road located in the Municipality
of Shellbrook, Saskatchewan. The appellant, Paul
Housen, a passenger in the vehicle, was rendered a
quadriplegic by the accident. Attrial, thejudge found
that the driver of the vehicle, Douglas Nikolaisen,
was negligent in travelling Snake Hill Road at an
excessive rate of speed and in operating his vehi
cle while impaired. The trial judge also found the
respondent, the Municipality of Shellbrook, to be
at fault for breaching its duty to keep the road in a
reasonable state of repair as required by s. 192 of
The Rural Municipality Act, 1989, S.S. 1989-90,
c. R-26.1. The Court of Appeal overturned the trial
judge’s finding that the respondent municipality
was negligent. At issue in this appeal is whether the
Court ofAppeal had sufficient grounds to intervene
in the decision of the lower court. The respond
ent has also asked this Court to overturn the trial
judge’s finding that the respondent knew or ought
to have known of the alleged disrepair of Snake Hill
Road and that the accident was caused in part by the
negligence of the respondent. An incidental question
is whether a common law duty of care exists along
side the statutory duty imposed on the respondent by
s. 192.
les ddcisions des tribunaux de premiere instance.
Appliquant ces raisons et principes a la prdsente
espèce, nous sommes d’avis d’accueillir le pour
voi, d’infirmer le jugement de la Cour d’appel de
la Saskatchewan et de rdtablir la decision de la juge
de premiere instance, avec ddpens devant toutes les
cours.
Version française des motifs des juges Gonthier,
Bastarache, Binnie etLeBel rendus par
LE JUGE BA 1CIiE (dissident) —
L Introduction
Le present pourvoi ddcoule d’un accident impli
quant un seul vehicu1e survenu le 18 juillet 1992
sur Ic chemin Snake Hill, route rurale situde dans
la municipalitd de Shellbrook, en Saskatchewan.
L’ appelant, Paul Housen, qui dtait passager clans
Ic ve’hicule, est devenu quadripldgique a la suite
de cet accident. Au proces, la juge a conclu que
le conducteur du vdhicule, Douglas Nikolaisen,
avait fait preuve de ndgligence en roulant a une
vitesse excessive sur le chemin Snake Hill et en
conduisant son vdhicule pendant que ses facultds
dtaient affaiblies. La juge de premiCre instance a
dgalement estimd que l’intimée, Ia inunicipaiitd de
Shelibrook, avait coxninis une faute en manquant
a l’obligation de tenir le chemin clans un dtat ral
sonnable d’entretien comme le liii impose l’art.
192 de la loi intitulde la Rural Municipality Act,
1989, S.S. 1989-90, ch. R-26.l. La Cour d’appel
a infirnid la decision de la juge de premiere ins
tance coucluant a la negligence de la municipa]itd
i.utimde. La question en litige dans le present pour
voi consiste a determiner si la Cour d’ appel avait
des motifs suffisants pour modifier la decision du
tribunal de prenuière instance. L’intimde demande
dgalement a notre Cour d’infirmer les conclusions
de lajuge de premiere instance portant que l’inti
mdc connaissait ou aurait d connaItre le mauvais
dtat daiis lequel se trouvait, pretend-on, le chemin
Snake Hill, et que 1’ accident a dtd cause en partie
par sa ndgligence. 11 faut dgalement rdpondre a la
question incidente de savoir si une obligation de
diligence de common law coexiste avec l’obliga
tion idgale imposde a l’intimée par l’art. 192.
78

79
80
284 HOUSEN V. NIKOLAISEN Bastarache J [200212 S.C.R.
I conclude that the Court ofAppeal was correct to
overturn the trialjudge’s finding that the respondent
was negligent. Though I would not interfere with the
trial judge’s factual findings on this issue, I find that
she erred in law by failing to apply the correct stand
ard of care. I would also overturn the trial judge’s
conclusions with regard to knowledge and causa
don. In coming to the conclusion that the respond
ent knew or should have known of the alleged disre
pair of Snake Hill Road, the trial judge erred in law
by failing to consider the knowledge requirement
from the perspective of a prudent municipal coun
cillor and by failing to be attentive to the fact that
the onus of proof was on the appellant. in addition,
the trial judge drew an unreasonable inference by
imputing knowledge to the respondent on the basis
of accidents that occurred on other segments of the
road while motorists were travelling’in the opposite
direction. The trial judge also erred with respect to
causation. She misapprehended the evidence before
her, drew erroneous conclusions from that evidence
and ignored relevant evidence. Finally, I would not
interfere with the decision of the courts below to
reject the appellant’s argument that a common law
duty existed. It is unnecessary to impose a common
law duty of care where a statutory duty exists.
Moreover, the application of common law negli
gence principles would not affect the outcome in
these proceedings.
IL Factual Background
The sequence of events which culminated in this
tragic accident began to unfold some 19 hours before
its occurrence on,the afternoon of July18, 1992.
On July 17, Mr. Nikolaisen attended a barbeque
at the residence of Craig and Toby Thiel, located
on Snake Hill Road. He arrived in the late after
noon and had his first drink of the day at approxi
mately 6:00 p.m. He consumed fow or five drinks
before leaving the Thel residence at approximately
J’estime que la Cóur d’appel a eu raison d’inflr
nier la conclusion de la juge de premiere instance
scion laquelle la municipalité intimde a été ndgli
gente. Je ne modiflerais pas les conclusions de fail
de ia juge de premiere instance sur cette question,
maisje suis d’avis qu’elle a commis une erreur de
droit en n’appliquant pas la norme de diligence
appropride. J’inflrmerais également ses conclu
sions en cc qui coucerne la question de la connais
sauce et le lien de causalité. En concluant que i’m
thee connaissait ou aurait dfi connaltre Ic mauvais
Ctat dans lequel se trouvait, pretend-on, le chemist
Snake Hill, la juge de premiere instance a commis
une erreur de droit en n’appréciant pas l’exigence
relative a la connaissance du point de vue du con
seiller municipal prudent et en ste tenant pas cornpte
du fait que le fardeau de la preuve incombait a i’ap
pelant. Dc plus, ia juge de pEemiCre instance a tire
une inference déraisonnable en prêtant a i’intimée
la connaissance requise, en raison d’accidents sur
venus sur d’autres tronçons du chemin alors que
des automobilistes circuiaient en seas inverse. La
juge de premiere instance a également cominis une
erreur relativement au lien de causalité. Elle a mal
interprété la preuve qtd lui était sounñse, cUe en a
tire des conclusions erronées et cUe n’a pas tenu
compte d’éléments de preuve pertinents. Enfin, je
ne modifierais pas la decision des juridictions infé
rieures ayant rejeté 1’ argument de 1’ appelant scion
lequel II existait une obligation de diligence de
common law. II est inutile d’iniposer une obliga
tion de common law lorsqu’il existe une obligation
legale. Qul plus est, 1’ application des principes de
la common law en matière de negligence n’aurait
aucune incidence sur l’issue de la présente ins
tance.
U. Les faits
La suite d’Cvénements ayant abouti an tragique
accident a commence quelque 19 heures avant l’ac
cident lui-mênie, darts i’apres-niicli du 18 juillet
1992. Le 17 juillet, M. Nikolaisen a participé a nit
barbecue a la residence de Craig et Toby Thiel, sur
le chemist Snake Hill. Arrivé en fin d’après-midi, il a
pris son premier verre de la journée vers 18 h. II en
a pris quatre ou cinq avant de quitter la residence
des Thiel vers 22 h ou.22 h 30. Après avoir passé

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache
10:00 or 10:30 p.m. After returning home for a few
hours, Mr. Nikolaisen proceeded to the Sturgeon
Lake Jamboree, where he met up with the appellant.
At the jamboree, Mr. Nikolaisen consumed eight or
nine double rye drinks and several beers. The appel
lant was also drinking during this event. The appel
lant and Mr. Nikolaisen partied on the grounds of
the jamboree for several hours. At approximately
4:30 a.ni., the appellant left the jamboree with Mr.
Nikolaisen. After travelling around the back roads
for a period of time, they returned to the Tbiel resi
dence. It was approximately 8:00 am. The appellant
and Mr. Nikolaisen had several more drinks over
the course of the morning. Mr. Nikolaisen stopped
drinking two or three hours before leaving the Thel
residence with the appellant at approximately 2:00
p.m.
A light rain was falling when the appellant and
Mt Nikolaisen left the Thiel residence, travelling
eastbound with Mr. Nilcolaisen behind the wheel
of a Ford pickup truck. The truck swerved or “fish
tailed” as it turned the corner from the Thiel drive
way onto Snake Hill Road. As Mr. Nilcolaisen con
tinued on his way over the course of a gentle bend
some 300 metres in lengtli, gaining speed to an esti
mated 65 km/h, the truck again fish-tailed several
limes. The truck went into a skid as Mr. Nikolaisen
approached and entered a sharper right turn. Mr.
Nikolaisen steered into the skid but was unable to
negotiate the curve. The left rear wheel of the truck
contacted an embankment on the left side of the
road. The vehicle travelled on the road for approxi
mately 30 metres when the left front wheel con
tacted arid climbed an 18-inch embankment on the
left side of the road. This second contact with the
embankment caused the truck to enter a 360-degree
roll with the passenger side of the roof contacting
the ground first.
When the vehicle came to rest, the appellant was
unable to feel any sensation. Mr. Nikolaisen climbed
out the back window of the vehicle and ran to the
Thiel residence for assistance. Police later accom
panied Mr. Nikolaisen to the Shellbrook Hospital
where a blood sample was taken. Expert testimony
estimated Mr. Nikolaisen’s blood alcohol level to be
285
quelques heures chez liii, M. Nikolaisen s’est rendu
au jamboree de Sturgeon Lake, oii il a rencontré
l’appelant. Sur lea lieux dujaniboree, M. Nikolaisen
a consommé huit ou neuf ryes doubles et plusieurs
bières. L’appelant buvait liii aussi. L’appelant et M.
Nikolaisen ont fait la. fête sur les lieux du jamboree
pendant plusieurs heures. Vera 4 h 30, l’appelant a
quitté le jamboree en compagnie de M. Nikolaisen.
Apres avoir roulé sur des routes de campagne pen
dant un certain temps, ils sont retournés a la rdsi
deuce des Thel. II dtait environ 8 h. L’appelant et
M. Nikolaisen ont pris plusieurs autres verres au
cours de la matinée. M. Nikolaisen a cessé de boire
deux ou trois heures avant de quitter la residence des
Thiel en compagnie de l’appelant vera 14 h.
Une faible pluie tombait bisque l’appelant et
M. Nikolaisen out quitté la residence des Thiel et
pus la route, en direction eat, a bord d’une canulon
nette Ford conduite par M. Nikolaiseii. L’arrière
de la camiorznette a zigzagué lorsque be véhicule a
tournC a. l’intersection de l’entrée de Ia residence
des Thiel et du cheuin Snake Hill. Abors que M.
Nikolaisen prenait tin lCger virage d’uue lou
gueur de quelque 300 mèires, tout en accéldrant a
65 km/h environ, l’arrière de sa camiomiette azigza
gué a nouveau a. plusieurs repulses. La canuiounette
s’ est mise a. ddraper lorsque M. Nikolaisen a amorcC
tin virage plus serré vers la droite. II a dome un coup
de volant, mais n’ a pas rCussi a. prendre le virage. La
roue arrière gauche de la camionnette a heurté un
remblal situé du côté gauche du chemin. Le véhi
cule a coutinud sa course stir une distance d’environ
30 metres, puis sa roue avant gauche est montée sur
tin remblai de 18 pouces du câté gauche du chemin,
après l’avoir heurté. Sous la force du second impact,
la camionnette a fait tin tonneau complet, le toit du
côtd du passager touchant le sol en premier.
Lorsque le ve’hicule s’est immobilisd, l’appelant
n’eprouvait plus aucune sensation. M. Nikolaisen
s’est hissC hors du véhicule par la fenêtre arrière
et a couru chez lea Thiel pour demander de 1’ aide.
Plus tard, la police a accompagnC M. Nikolaisen a
l’hôpital de Shellbrook, oli tin échautillon de sang
a dté prélevC. Le témoignage d’expert a révelé
81
82

;I.
83
84
286 HOUSEN V. NKOLA1SEN Bastarache I. [2002] 2 S.C.R.
between 180 and 210 milligrams in 100 millilitres of
blood at the time of the accident, well over the legal
limits prescribed in The Highway Traffic Act, S.S.
1986, c. H-3.1, and the Criminal Code, R.S.C. 1985,
c. C-46.
Mr. Nikolaisen had travelled on Snake Hill Road
three thnes in the 24 hours preceding the accident,
but had not driven it on any earlier occasions. The
road was about a mile and three quarters in length
and was flanked by highways to the north and to the
east. Starting at the north end, it ran south for a short
distance, dipped between open fields, then curved
to the southeast and descended in a southerly loop
down and around Snake Hill, past trees, bush and
pasture, to the bottom of the valley. There it curved
sharply to the southeast as it passed the Thiels’
driveway. Once it passed the driveway, it curved
gently to the south east for about 300 metres, then
curved more distinctly to the south. It was on this
stretch that the accident occurred. From that point
on, the road crossed a creek, took another curve,
then ascended a steep hill to the east, straightened
out, and continued east for just over half a mile,
past tree-lined fields and another farm site, to an
approach to the highway.
Snake Hill Road was established in 1923 and
was maintained by the respondent municipality
for the primary purpose of providing local farmers
access to their fields and pastures. It also served as
an access road for the two permanent residences
and one veterinary clinic located on it. The road
at its northernmost end, coming off the highway,
is characterized as a “Type C” local access road
under the provincial government’s scheme of road
classification. This means that it is graded, gray
elled and elevated above the surrounding land.
The portion of the road east of the Thiel residence,
on which the accident occurred, is characterized
as “Type B” bladed trail, essentially a prairie
trail that has been bladed to remove the ruts and
to allow it to be driven on. Bladed trails follow
the path of least resistance through the surround
ing land and are not elevated or gravelled. The
que, au moment de l’accident, l’alcoohimie de
M. Nikolaisen se situait entre 180 et 210 mull
grarn.mes par 100 milligramines, taux largement
supdrieur a la limite permise par la loi intitulée la
Highway TrafficAct, S.S. 1986 cli. H-3.1, etparle
Code criminel, L.R.C. 1985, cli. C-46.
M. Nikolaisen avait emprunt le chemin Snake
Hill a irois reprises au cours des 24 heures ayant
précddé l’accident, mais il n’y avait jamais circuld
auparavant. Ce chexuin, flanqué de routes au nord
et a l’est, fait environ un mule et trois quarts de
longueur. A partir de son extréniité nord, il franchit
une courte distance en direction sud, traverse
des champs, puis tourne vers le sud-est pour ensuite
descendre en lacet vers le sud autour du mont Snake
Hill, passant devant des arbres, buissons et patu
rages, jusqu’au fond de Ia vallée. De là, il tourne
brusquement vers le sud-est devant l’eritrée de la
residence des ThieL Tout de suite après, II tourne
doucement vers le sud-est sur une distance d’envi
ron 300 metres, puis décrit une courbe plus pronon
cée vers le sud. C’est a cet endroit que l’accident
s’est produit. De là, le chemin traverse un ruisseau,
tourne encore, puis monte une pente raide vers l’est,
se redresse et continue vers l’est sur une distance
d’un peu plus d’un demi mile et passe devant des
champs bordés d’ arbres et une autre ferme, jusqu’ a
une voie d’accès ala route.
Construit en 1923, le chemin Snake Hill est entre
tenu par in municipalité intimde dana le but premier
de permettre aux fermiers de la region d’accéder a
leurs champs et pâturages. U sen ágalement de voie
d’accès a deux residences permanentes et a une cli
nique vétdrinaire. Le tronçon nord du chemin, dont
1’ extrémité part de la route, est cousidérC comme un
chernin d’accès local de > selon le système
provincial de classification des routes. Cela signi
fie qu’il eat nivelé, gravelé et possède une chaussée
surélevCe. Le tronçon du chemin situC a l’est de la
residence des Thiel et sur lequel l’accident s’est
produit eat considéré cornme un chemin nivelé de
, c’est-à-dire essentiellement un chemin
dont lea ornières ont été remplies pour le rendre
carrossable. Lea chemins ulvelés suivent le trace
qui présente le moms d’obstacle a travers le terrain
envirotmant et ne sont. ni surelevés ni gravelCs. La

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 287
province of Saskatchewan has some 45,000 kilo-
metres of bladed trails.
According to the provincial scheme of road clas
sification, both bladed trails and local access roads
are “non-designated”, meaning that they are not sub
ject to the Saskatchewan Rural Development Sign
Policy and Standards. On such roads, the council of
the rural municipality inalces a decision to post signs
if it becomes aware of a hazard or if there are sev
eral accidents at one specific spot. Three accidents
had occurred on Snake Hill Road between 1978
and 1987. All three accidents occurred to the east
of the site of the Nikolaisen rollover, with drivers
travelling westbound. A fourth accident occurred on
Snake Hill Road in 1990 but there was no evidence
as to where it occurred. There was no evidence that
topography was a factor in any of these accidents.
The respondent municipality had not posted signs
on any portion of Snake Hill Road.
UI. Relevant Statutory Provisions
The Rural Municipality Act, 1989, S.S. 1989-90,
c.R-26.l
192(1) Every Council shall keep in a reasonable state
of repair all municipal roads, dams and reservoirs and
the approaches to them that have been constructed or
provided by the municipality or by any person with the
permission of the council or that have been constructed or
provided by the province, having regard to the character
ofthe municipal road, dam or reservoir and the locality in
which it is situated or through which it passes.
(2) Where the council fails to carry out its duty imposed
by subsections (1) and (1.1), the municipality is, subject
to The Contribatory Negligence Act, civilly liable for all
damages sustained by any person by reason of the fail
ur
province de Saskatchewan compte quelque 45 000
kilomètres de chemins nivelds.
Scion le système de classification des routes, tact
les chernins nivelds que les chernins d’accès local
sont [‘raADucrIoN] , c’est-à-dire
qu’ils ne sont pas visds par le document intituld
Saskatchewan Rural Development Sign Policy and
Standards (c< Politique et normes de signalisation
routière en milieu rural en Saskatchewan >>). Le
conseil de la municipalitd rurale installe des pan
neaux de signaiisation sur ces chemins s’il constate
1’ existence d’un danger ou si plusieurs accidents se
produisent au même endroit. Trois accidents sont
survenus sur le chemin Snake Hill de 1978 a 1987.
Tons ces accidents se sont produits a l’est de l’en
droit oü la camionnette de Nikolaisen a fait un ton
neau et les vdhicules concernds circulalent en direc
tion ouest. Un quatrième accident s’est produit sur
le chemin Snake Hill en 1990, mais aucune preuve
indiquant l’endroit exact de 1’ accident n’ a dtd prd
sentée. Rien ne permettait de conclure que la topo
graphie des lieux était a l’origine de l’un ou l’autre
de ces accidents. La municipalité intimde n’avait.
installé aucun panneau signalisateur le long du
chen,in. Snake Hill.
III. Les dispositions législatives pertinentes
The Rural Municipality Act, 1989, S.S. 1989-90,
cli. R-26.1
[TLDUdnoN]
192(1) Le conseil tient dans un dtat raisonnable d’entre
tien tons les chernins municipaux, barrages et reservoirs,
ainsi que les accès a ces ouvrages qui out dtd coustruits
ou soilt fournis par la municipalitd ou par toute autre per
sonne avec Ia permission du conseil ou qui ont étd cons
truits ou sort fournis pax le gouvernement de is province,
en dgard ala nature de I’ouvrage en question et ala loca
litd oti II eat situd on qu’il traverse.
(2) Lorsque le conseil omet de s’acquitter des obliga
tions qui liii incombent en vertu des paragraphes (1) et
(1.1), lamunicipalitd est, sousrdservedela Contributory
Negligence Act tli,i sur lepartage de Ia responsabilité],
civilement responsable des dommages subis par toute
personne a is suite de ce manquement.
86
85

87
88
288 HOUSEN v. NIKOLAJSEN Bastarache J. [20021 2 S.C.R.
(3) Default under subsections (1) and (1.1) shall not be
imputed to a municipality in any action without proof by
the plaintiff that the municipality knew or should have
known of the disrepair of the municipal road or other
thing mentioned in subsections (1) and (1.1).
The Highway Traffic Act, S.S. 1986, c. H-3.1
33(1) Subject to the other provisions of this Act, no
person shall drive a vehicle on a highway:
(a) at a speed greater than 80 kilometres per hour; or
(b) at a speed greater than the maximum speed
indicated by any signs that are erected on the high
way..
(2) No person shall drive a vehicle on a highway at a
speed greater than is reasonable and safe in the circum
stances.
44(1) No person shall drive a vehicle on a highway without
due care and attention.
W Judicial History
A. Saskatchewan Court of Queen Bench, [1998]
5 W.W.R. 523
Wright 3. found the respondent negligent in fail
ing to erect a sign to warn motorists of the sharp
right curve on Snake Hill Road. which she charac
terized as a “hidden hazard”. She also found Mi.
Nikolaisen negligent in travelling Snake Hill Road
at an excessive speed and in operating his vehicle
while impaired. The appellant was held to be con
tributorily negligent in accepting a ride with Mr.
Nikolaisen. Fifteen percent of the fault was appor
tioned to the appellant, and, the remainder was
apportioned jointly and severally 50 percent to Mr.
Nikolaisen and 35 percent to the respondent.
Wright J. found that s. 192 of The Rural
Municipality Act, 1989 imposed a statutory duty of
care on the respondent toward persons travelling on
Snake Hill Road. She then considered whether the
respondent met the standard of care as delineatedin
(3) En cas d’action reprochant un manquenieut visd aux
paragraphes (1) et (1.1) Ia responsabilit de la rnunicipa
lit concernde n’est engagée qua si le demandeur dtablit
que cette dernière connaissait ou aurait dii connaltre le
mauvais dtat du chemin municipal ou autre ouvrage men
tionné aux paragraphes (1) et (1.1).
The Highway Traffic Act, S.S. 1986, ch. H-3.1
[TRADuCrION]
33(1) Sons reserve des autres dispositions de Ia présente
Ioi, II est interdit de conduire sur uric voie publique a une
vitesse supCrienre, selon le cas:
a) a 80 ldlomètres a l’heure;
b) a Ia vitesse maximale indiquée par la signalisation
routière Ic long de la voie publique en question...
(2) fl est interdit de conduire un véhicule sur une voie
publique àune vitesse supérienre a celle qui est raisonna
ble et sécuritaire dans les circonstances.
44(1) Ii est interdit de conduire tin veliicule stir tine voie
publique sans faire preuve de la prudence at de 1’ attention
nCcessaires.
1V L’historigue des procedures udiciaires
A. Cour du Bane de la Reine de la Saskatchewan,
[1998] 5 W.W.R. 523
La juge Wright a conclu que l’intimde avait fait
preuve de negligence en omettant d’installer un
panneau signalant aux automobffistes l’existence
du virage a droite serrd sur le chemin Snake Hill,
virage qu’elle a qualiflé de [TRADUCrI0N] . Elle a dgalement estimd que M. Nikolaisen
avait ete negligent en roulant a une vitesse exces
sive sur le chemin Snake Hill et en conduisant son
vdhicule pendant qu’il avait les facultds affaiblies.
L’appelant a dtd tenu responsable de negligence
concourante parce qu’il avait acceptd de mouter a
bord du véhicule de M. Nikolaisen. La responsabi
litd a dté partagde ainsi: 15 p. ioo a l’appelant, le
reste dtant rdparti solidairement entre M. Nikolaisen
(50 p. 100) et l’intimde (35 p. 100).
La juge Wright a d’abord conclu que l’art. 192
de la Rural Municipality Act, 1989 imposait a i’m
timée une obligation idgale de diligence envers
les personues circuiant sur le chemin Snake Hill.
Elle s’est eusuite demaridde Si l’intimde s’dtait

[2002] 2 R.C.S. HOUSEN C. NIKOLiSEN Lejuge Bastarache 289
s. 192 and the jurisprudence interpreting that sec
tion. She referred specifically to Partridge v. Rural
Municipaliiy of Langenberg, [19291 3 W.W.R. 555
(Sask CA.), in which it was stated at p. 558 that
“the road must be kept in such a reasonable state of
repair that those requiring to use it may, exercising
ordinary care, travel upon it with safety”. She also
cited Shupe i Rural Municipality of Pleasantdo.le,
[1932] 1 W.WR. 627 (Sask. CA.), at p. 30:
“[R]egard must be had to the locality. . . the situa
tion of the road therein, whether required to be used
by many or by few;. . . to the number of roads to
be kept in repair; to the means at the disposal of the
council for that purpose, and the requirements of
the public who use the road:’ Relying on Galbiati
v. City ofRegina, [197212 W.W.R. 40 (Sask Q.Bj,
Wright 3. observed that although the Act does not
mention an obligation to erect warning signs, the
general duty of repair nevertheless includes the duty
to warn motorists of a hidden hazard.
Having laid out the relevant case law, Wright 3.
went on to discuss the character of the road. Relying
primarily on the evidence of two experts at trial, Mr.
Anderson and Mr.. Werner, she found that the sharp
right turning curve was a hazard that was not readily
apparent to the users of the road. From their testi
mony she concluded (at para. 85):
It is a hidden hazard. The location of the Nikolaisen roll
over is the most dangerous segment of Snake Hill Road.
Approaching the location of the Nikolaisen rollover,
limited sight distance, created by uncleared bush, pre
cludes a motorist from being forewarned of an impend
ing sharp right turn immediately followed by a left turn.
While there were differing opinions on the maximum
speed at which this curve can be negotiated, I am satis
fied that when limited sight distance is combined with
the tight radius of the curve and lack of superelevation,
this curve cannot be safely negotiated at speeds greater
conforme a la norme de diligence noncde a l’art.
192 Ct dana la jurisprudence portant sur l’iuter
prtation de cet article. Elle a fair état, en parti
culier, de 1’ arrêt Partridge c. Rural Municipality
of Langenberg, [19291 3 W.W.R. 555, dans lequel
la Cour d’appei de la Saskatchewan a ddclard, a
la p. 558, que [TRADUCTI0N) . Elle a galement cit le passage sni
vant de l’affaire Shupe c. Rural Municipality of
Pleasantdale, [1932] 1 W.W.R. 627 (C.A. Sask.),
p. 630: [TRADucHON) . Se fondant
sur l’affaire Galbiati c. City of Regina, [1972]
2 W.W.R. 40 (B.R. Sash.), la juge Wright a fait
observer que, bien que la Loi ne mentionne pas
explicitement 1’ obligation d’installer des panneaux
d’avertissement, l’obligation générale d’entretien
comporte ndanmoins celle de signaler aux automo
biiistes l’existence d’un danger cache.
Après avoir fait état de Ia jurisprudence per
tinente, la juge Wright a poursuivi en examinant
Ia nature du chemin. S’appuyant principalement
sur les tdmoignages donnds par deux experts au
procès, MM. Anderson et Werner, elle a conclu que
le virage a droite serré constituait un danger que les
usagers du chexnin ne pouvaient voir alsEment. De
leurs témoignages, elle a tire la conclusion suivante
(aupar.85): V
[TRADUCrI0N] fl s’agit d’un danger cache. L’endroit ofi
le véhicule de M. Nikolaisen a fait tin tonneati est situé
stir le troncon le plus dangereux du chemin Snake Hi]L
A l’approche de cet endroit, des broussailles réduisent la
dIstance de visibilitd de l’autoxuobiliste et l’empêchent
de voir l’imminence d’un virage a droite serré, qui est
immédiatement suivi d’un virage a gauche. Bien que des
opinions divergentes aient été émises quant Ia vitesse
maximale a laquelle ce virage petit être pris, je suis d’avis
que, vu la distance de visibilité réduite, 1’ existence d’une
courbe serrée et l’absence de surélévation cm chemin, ce
89

90
91
290 HOUSEN v. NIKOLAISEN Bastarache J. [2002] 2 S.C.R.
than 60 kilometres per hour when conditions are favour
able, or 50 ldlometres per hour when wet. [Emphasis in
original.]
Wright J. then noted that, while it would not be rea
sonable to expect the respondent to construct the
road to a higher standard or to clear all of the bush
away, it was reasonable to expect the respondent to
erect and maintain a warning or regulatory sign “so
that a motorist, using ordinary care, may be fore
warned, adjust speed and take corrective action in
advance of entering a dangerous situation” (para.
86).
Wright J. then considered s. 192(3) of the Act,
which provides that there is no breach of the statu
tory standard of care unless the municipality knew
or should have known of the danger. Wright 3.
observed that between 1978 and 1990, there were
four accidents on Snake Hill Road, three of which
occurred “in the same vicinity” as the Nikolaisen
rollover, and two of which were reported to the
authorities. On the basis of this information, she
held that “[hf the R.M. [Rural Municipality] did not
have actual knowledge of the danger inherent in this
portion of Snake Hill Road, it should have known”
(para. 90). Wright!. also found significant the rela
tively low volume of traffic on the road, the fact that
there were permanent residences on the road, and
the fact that the road was frequented by young and
perhaps less experienced drivers.
In respect to causation, Wright 3. found that it
was probable that a warning sign would have ena
bled Mr. Nikolaisen to take corrective action to
maintain control ofhis vehicle despite the fact of his
impairment. She concluded (at para. 101):
Mr. Nikolaisen’s degree of impairment only served to
increase the risk of him not reacting, or reacting inappro
priately to a sign. Mr. Nikolaisen was not driving reck
lessly such that he would have intentionally disregarded
virage ne peut être pus en sécurité a une vitesse supd
rieure a 60 kilomtres a l’heure dans des conditions favo
rabies, ou 50 kilomètres a l’heure sur chaussée humide.
[En itaiique dans l’original.J
Lajuge Wright a ensuite précisé que, bien qu’on ne
puisse raisonnablement exiger de l’intimée qu’efle
construise le chemin scion une norme plus eleve
ou qu’eile enlève toutes les broussaifles, il était rai
sonnable de s’atteudre a cc qu’elle installe et main
tienne un panneau d’avertissement ou de signali
sation [‘rR.ADUCTION]
(par. 86).
Lajuge Wright a ensuite analyse le par. 192(3) de
la Loi, qui prdvoit qu’il n’y a manquement a l’obli
gation de diligence que si la niunicipa]ité connais
salt ou aurait d connaitre l’existence du danger.
Elle a rappeiC que quatre accidents étaient survenus
sur le chemin Snake Hill de 1978 a 1990. Trois de
ceux-ci se sont produits [TR.ADUCTI0N] > de l’endroit oil le vdhicule de M. Nikolaisen
a fait un tonneau, et deux ont etC signalCs aux auto
rites. Sur la base de cette information, cUe a conclu
que [TRADTJCrI0N] c> (par. 90). La
juge WrIght a Cgalement accordC de l’importance
au debit relativement faible de la circulation sur
le chemin, au fait que des residences permanentes
Ctaient situCes en bordure de celni-ci et au fait que le
chemin était fréquentC par des conducteurs jeunes et
peut-être moi.ns expérimentCs.
En ce qui concerne le lien de causalitC, la juge
Wright a estimd qu’un panneau de signalisation
aurait probablement permis a M. Nikolaisen de
prendre des mesures correctives et de conserver
la maltrise de son vehicule, même si ses facuitds
Ctaient affaiblies. Elle a aussi tirC la conclusion sul
vante, au par. 101:
[TRADuCrION] Le degrC d’CbriCtC de M. Nikolaisen a’s
fait qu’acctoItre le risque qu’il ne rCagisse pas dii tout
ou encore de facon inappropuiCe a une signalisation. M.
• Nikolaisen ne conduisait pas de facon si tdmCraire qu’il

[2002] 2 R.C.S. HOUSEN c. NIKOLAISEN Lejuge Bastarache 291
a warning or regulatory sign. He had moments earlier,
when departing the Thiel residence, successfully nego
tiated a sharp curve which he could see and which was
apparent to him.
Wright 3. also addressed the appellant’s argument
that the municipality was in breach of a common
law duty of care which was not qualified or limited
by any of the restrictions set out under s. 192. She
held that Just v. British Columbia, [19891 2 S.C.R.
1228, and the line of authority both preceding and
following that decision did not apply to the case
before her given the existence of the statutory duty
of care. She also found that any qualifying words in
s. 192 of the Act pertained to the standard of care
and did not impose limitations on the statutory duty
of care.
B. Saskatchewan Court of Appeal, [2000] 4
W.W.R 173,2000 SKCA 12
On appeal, Cameron J.A., writing for a unani
mous court, dealt primarily with the trial judge’s
finding that the respondent’s failure to place a warn
ing sign or regulatory sign at the site of the accident
constituted a breach of its statutory duty of road
repair. He did not find it necessary to rule on the
issue of causation given his conclusion that the trial
judge erred in finding the respondent negligent.
Cameron LA. characterized the trial judge’s
conclusion that the respondent had breached the
statutory duty of care as a matter of mixed fact
and law. He noted that an appellate court is not to
interfere with a trial judge’s findings of fact unless
the judge made a “palpable and overriding error”
which affected his or her assessment of the facts.
With respect to errors of law, however, Cameron
LA. remarked that the ability of an appellate court
to overturn the finding of the trial judge is “largely
unbounded”. Regarding errors of mixed fact and
law, Cameron J.A. noted that these are typically
subject to the same standard of review as findings
aurait intentionnellement Mt abstraction d’un panneau
d’avertissement ou de signalisation. Quelques instants
plus tôt, au moment de quitter Ia residence des Thiel, il
avait pris avec succès un virage serrd qu’il pouvait clai
rement volt
Lajuge Wright s’est dgalement penchde sur l’ar
gument de l’appelant voulant que la municipaiitd alt
manqué a une obligation de diligence de common
law qui ne serait pas attdnude ou restreinte par
l’urie ou l’auire des dispositions & l’art. 192. Elle
a estimd que l’arrêt Just c. Colombie-Britannique,
[1989] 2 R.C.S. 1228, ainsi que la jurisprudence
antdrieure et postérieure a cette decision ne s’appli
quaient pas a l’affaire dout elle dtait saisie, vu l’exis
tence de l’obligation ldgale de diligence. Elle a dga
lementjugd que les termesrestrictlfs de l’art. 192 de
la Loi visalent la norme de diligence et n’ avaient pas
pour effet de limiter la portde de 1’ obligation ldgale
de diligence.
B. Cour d’appel de Ia Saskatchewan, [2000] 4
WW.R. 173, 2000 SKCA 12
En appel, exprimant la decision unanime de la
cour, le juge Cameron s’est attaché principalement
a la conclusion de lajuge de premiere instance por
taut que, en omettant d’installer an panneau d’ aver
tissement ou de signalisation a l’endroit de l’acci
dent, l’intimCe avait manqué a son obligation legate
d’entretien des routes. II n’a pas jugd ndcessaire de
se prononcer sw la question du lien de causalitd, vu
sa conclusion que la juge de premiere instance avait
commis une etreur en ddclarant l’intimde responsa
ble de negligence.
Le juge Cameron. a qualifid la conclusion de
la juge de premiere instance que l’iutimde avait
manqué a son obligation légale de diligence de con
clusion portant sur une question mnixte de fait et de
droit. II a soulignd qu’une cour d’appel ne dolt pas
modifier les conclusions de fait du juge de premiere
instance a moms que ce dernier n’ait cominis une
ayant thussC son
appreciation des falts. Pour ce qui est des erreurs de
droit, toutefois, lejuge Cameron a fait remarquer que
le pouvoir d’une cour d’appel d’infirmer la conclu
sion du juge de premiere instance est [TRADUCT1ON]
. En ce qul concerne les erretirs
92
93
94

[200212 RC.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 293
reasonable driver on that particular road would have
conducted himself or herself. It is necessary in taking
this step to take account of the various elements
noted in the authorities referred to earlier, namely
the locality ofthe road, the character and class of the
road, the standard to which the municipality could
reasonably have been expected to maintain the road,
and so forth. These criteria fall to be balanced in the
context of the question: how would a reasonable
driver have driven upon this particular road? Since
this entails the application of a legal standard to a
given set of facts, it constitutes a question of mixed
fact and law.
3. To determine either tha[t] the road was hi a reason
able state of repair or that it was not, depending upon
the assessment made while using the second step. If
it is determined that the road was not in a reasonable
state of repair, then it becomes necessary to go on to
determine whether the municipality knew or should
have known of the state of disrepair before imputing
liability.
According to Cameron J.A., the trial judge did
not err in law by failing to set out the proper legal
test. She did, however, make an error in law of the
type identified by lacobucci 3. in Southam, supra
In his view, when applying the law to the facts of
the case, the trial judge failed to assess the manner
in which a reasonable driver, exercising ordinary
care, would ordinarily have driven on the road, and
the risk, if any, that the unmarked curve might have
posed for the ordinary driver. As noted by Cameron
l.A., the trial judge “twice alluded to the matter, but
failed to come to grips with it’ (para. 57).
Cameron l.A. also found that the trial judge had
made a “palpable and overriding” error of fact in
determining that the respondent had breached the
standard of care. According to Cameron 3.A., the
trial judge’s factual error stemmed from her reli
ance on the expert testimony of Mr. Werner and Mr.
Anderson. Cameron l.A. found that the evidence of
both experts was based on the fundamental premise
personne raisonnable, qui sert a determiner com
ment se serait comporte un conducteur raisonna
ble sur ce chemin en particulier. A cette dtape, il
faut tenir compte des nombreux facteurs duoncds
clans Ia jurisprudence mentionnde prdcddemment,
c’est-à-dire l’emplacement du chemin, Ia nature et
Ic type dii chemin, Ia norme d’entretien a laquelle
on pouvait raisonnablement s’attendre d’une muni
cipalitd, et ainsi de suite. Ces facteurs doivent ëtre
soupesds dans le contexte de Ia question suivante:
Comment un conducteur raisonnable aurait-il
conduit son vdhicule sur cc chemin en particulier?
Puisque cette question suppose l’application d’une
norine jutidique a un ensemble donnd de faits, cUe
constitue uric question mixte de fait et de droit.
3. 11 doit determiner Si le chemin dtait dam un dtat ml
sonnable d’entretien, compte tenu des conclusions
tirdes a la deuxième drape. S’il eat dtabli que le
chernin ne se trouvait pas dans un dtat raisonnable
d’entretien, il fact alors ddterminersi la municipalitd
connaissait ou aurait dii connaltre le mauvais dtat
d’entretien avant de concliire a la responsabilitd de
celle-ci.
Scion le juge Cameron, la juge de prenzière
instance n’a pas coinnuls d’erreur de droit en cc
qui concerne le critère juridique applicable. Elle
a cependant commis uric erreur de droit du genre
de celle exposde par le juge tacobucci dam l’arrêt
Southam, prdcitd. A son avis, lorsqu’elle a appliqué
le droit aux faits de l’espèce, la juge de premiere
instance a omis, d’i.me part, de se demander corn—
merit tin conducteur raisonnable, faisant montre de
prudence normale, auraIt conduit son ve’hicule sur
ce chemin, et, d’autre part, d’dvaluer le risque, s’il
en eat, que le virage non annoncd aurait Pu consti
tuer pour le conducteur moyen. Cornme l’a soulignd
le juge Cameron de la Cour d’appel, lajuge de pre
mihre instance [TRADUCrION] en concluant que l’inti
mdc n’avait pan exercd le degrd de diligence requis.
Selon le juge Cameron, cette erreur de fait ddcou
lait de 1’importance accordde par lajuge Wright aux
tdmoignages d’experts de MM. Werner et Anderson.
A son avis, les tdmoignages de ces deux experts
96
97

98
294 HOUSEN V. NIKOLAISEN Bastarache .1. [2002] 2 S.C.R.
that the ordinary driver could be expected to travel
the road at a speed of 80 kin/h. In his view, this
premise was misconceived and unsupported by the
evidence.
Cameron J.A. concluded that although the trial
judge was free to accept the evidence of some wit
nesses over others, she was not free to acceptexpert
testimony that was based on an erroneous factual
premise. According to Cameron LA., had the trial
judge found that a prudent driver, exercising ordi
nary care for his or her safety, would not ordinar
ily have driven this section of Snake Hill Road at
a speed greater than 60 km/h, then she would have
had to conclude that no hidden hazard existed since
the curve could be negotiated safely at this speed.
Cameron IA. agreed with the trial judge that a
common law duty of care was not applicable in this
case. His remarks in this respect are found at para.
44 of his reasons:
Concerning the duty of care, it might be noted that
unlike statutory provisions empowering municipalities
to maintain roads, but imposing no duty upon them to
do so, the duty in this instance owes its existence to a
statute, rather than the neighbourhood principle of the
common law: Just i British Columbia, [1989] 2 S.C.R.
1228 (S.C.C.). The duty is readily seen to extend to all
who travel upon the roads.
V. Issues
100 A. Did the Court ofAppeal properly interfere with
the trial judge’s finding that the respondent was
in breach of its statutory duty of care?
B. Did the trial.judge err in finding the respond
ent knew or should have known of the alleged
danger?
C. Did the trial judge err in finding that the acci
dent was caused in part by the respondent’s
negligence?
reposaient sur la prdmisse fondamentale qu’on pou
vait s’attendre a ce que le conducteur moyen circule
sur le chemiri a une vitesse de 80 km/h. Selon mi,
cette prdmisse dtait eironde et n’dtait pas Ctayde par
la preuve.
Le juge Cameron a conclu que, bien qu’il füt
loisible a la juge de premiere instance d’accorder
davantage foi a certains tCmoignages qu’ a d’ autres,
ii ne lui Ctait pas loisible de retenir un tdmoignage
d’expert fondd sur une prCrnisse factuelle erro
née. Scion lui, si la juge de premiere instance
avait estimd qu’un conducteur prudent prenant des
precautions normales pour assurer sa sdcuritd
n’aurait géndralement pas roulC sur cette portion
du chernin Snake Hill a plus de 60 krn)h, alors
cUe aurait dii conclure a l’absence de danger cache
puisque le virage pouvait être pris en sécuritd a
cette vitesse.
Lejuge Cameron a souscrit ài’opinion de lajuge
de premiere instance que l’obligation de diligence
de common law ne s’appliquait pas en l’espèce. II a
fait lea commentaires suivants a cc sujet, au par. 44
de sea motifs:
[TRADUCTIONj En cc qui concerne l’obligaiion de
diligence, ii convient de préciser que, conirairement aux
dispositions législatives qui habilitent les municipalités
a entretenir les chemins, sans toutefois leur imposer
l’obligation de le faire, en l’espèce l’obligation doit son
existence anne loi, plutôt qu’au principe de common law
fondd sur la pmximité : Just c. Colombie-Britannique,
[1989) 2 R.C.S. 1228. Osi saint immédiatement que
I’obligation de diligence existe en faveur de tous ceux qui
circulent sur lea routes.
V. Les questions en litige
A. La Cour d’appel a-t-elle eu raison de modifier
la conclusion de Ia juge de premiere instance
portant que l’intiinée avait manqué a son obli
gation ldgale de diligence?
B. La juge de premiere instance a-t-elle comniis
une erreur en concluaut que l’intimée connais
salt ou aurait dü connaitre le danger alldguC?
C. La juge de premiere instance a-t-eile comnmis
une erreur en coucluant que 1’ accident a étd en
partiecausC par la negligence de l’intimde?

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 295
D. Does a conunon law duty of care coexist along
side the statutory duty of care?
VL Analysis
A. Did the Court ofAppeal Properly Inteifere with
the Decision at Trial?
(1) The Standard of Review
Although the distinctions are not always clear,
the issues that confront a trial court fall generally
into three categories: questions of law, questions
of fact, and questions of mixed law and fact. Put
briefly, questions of law are questions about what
the correct legal test is; questions of fact are ques
tions about what actually took place between the
parties; and questions of mixed law and fact are
questions about whether the facts satisfy the legal
tests (Southam, supra, at para. 35).
Of the three categories above, the high
est degree of deference is accorded to the trial
judge’s findings of fact. The Court will not over
turn a factual finding unless it is palpably and
overridingly, or clearly wrong (Southam, supra,
at para. 60; Stein v. The Ship “Kathy K”, [19761
2 S.C.R. 802, at p. 808; Toneguzzo-Norvell
(Guardian ad 1item of) v. Burnaby Hospital,
[1994] 1 S.C.R. 114, at p. 121). This defer
ence is principally grounded in the recognition
that only the trial judge enjoys the opportu
nity to observe witnesses and to hear testimony
first-hand, and is therefore better able to choose
between competing versions of events (Schwartz
v. Canada, [1996) 1 S.C.R. 254, at para. 32). It is
however important to recognize that the making
of a factual finding often involves more than
merely determining the who, what, where and
when of the case. The trial judge is very often
called upon to draw inferences from the facts
that are put before the court. For example, in
this case, the trial judge inferred from the fact
of accidents having occurred on Snake Hill Road
D. Est-ce qu’une obligation de diligence de
common law coexiste avec l’obligation légale
de diligence?
VI. L’analyse
A. La Cour d’appel a-t-elle eu raison de modi
fier la decision de la juge de premiere ins
to.nce?
(1) La norme de contrôle
Bien qu’eiles ne soient pas toujours faciles a dis
tinguer, les questions auxquelles doit répondre un
tribunal de premiere instance se classent générale
ment en trois categories : les questions de droit, les
questions de fait et les questions mixtes de fait et de
droit. En résumC, les questions de droit concement
la determination du criterejuridique applicable; les
questions de fait portent sur ce qul s’ est rCellement
passé entre les parties et les questions mixtes de
fait et de droit consistent a determiner si les faits
satisfont au criterejuridique (Southam, précité, par.
35).
De ces trois categories, ce sont les conclusions
de fait du juge de premiere instance qui comman
dent le degré le plus élevé de retenue. La Cour ne
modifle les conclusions de fait du juge de premiere
instance que si celni-ci a commis une erreur mani
feste ou dominante 011 si la conclusion est mani
festement erronée (Southam, précité, par. 60; Stein
c. Le navire Kathy K , [1976) 2 R.C.S. 802,
p. 808; Toneguzzo-Norvell (Tutrice a l’instance
de) c. Burnaby Hospital, [1994] 1 R.C.S. 114,
p. 121). Cette retenue repose principalement sur
le fait que, puisqu’il est le seul a avoir l’occasion
d’observer les témoins et d’entendre les tCmoi
guages de vive voix, le juge de premiCre instance
est en consequence plus a même de choisir entre
deux versions divergentes d’un même événemeut
(Schwartz c. Canada, [1996] 1 R.C.S. 254, par.
32). Cependant, il est important de recounaltre
que tirer une conclusion de fait implique souvent
davantage que Ic simple fait de determiner qul a
fait quoi, ainsi que oü et quand il l’a fait. Le juge
de premiere instance est très souvent appelé a
faire des inferences a partir des faits qui lui sont
101
102

103
296 HOUSEN v. NIKOLAISEN Bastarache J. [2002] 2 S.C.R.
that the respondent knew or should have known
of the hidden dangec
This Court has determined that a trial judge’s
inferences of fact should be accorded a similar
degree of deference as findings of fact (Geffen
Goodman Estate, [1991] 2 S.C.R. 353). In review
ing the making of an inference, the appeal court will
verify whether it can reasonably be supported by
the findings of fact that the trial judge reached and
whether the judge proceeded on proper legal princi
ples. I respectfully disagree with the niajoriti’s view
that inferences can be rejected only where the infer
ence-drawing process itself is dcficient: see Toronto
(City) Board ofEducation v. O.S.S.TE, District 15,
[1997] 1 S.C.R. 487, at para. 45:
When a court is reviewing a tribunal’s findings of fact
or the inferences made on the basis of the evidence, it
can only intervene “where the evidence, viewed reason
ably, is incapable of supporting a tribunal’s findings of
fact”: Lester (W. W) (1978) LkL v. United Association
of Journeymen and Apprentices of the Plumbing and
Pipefitting Industr Local 740, [1990] 3 S.C.R. 644, at
p. 669 perMcLachlin 3.
An inference can be clearly wrong where the fac
tual basis upon which it relies is deficient or where
the legal standard to which the facts are applied is
misconstrued. My colleagues recognize themselves
that a judge is often called upon to make inferences
of mixed law and fact (para. 26). While the stand
ard of review is identical for both findings of fact
and inferences of fact, it is nonetheless important to
draw an analytical distinction between the two. If
the reviewing court were to review only for errors
of fact, then the decision of the trial judge would
necessarily be upheld in every case where evidence
existed to support his or her factual findings. In my
vIew, this Court is entitled to conclude that infer
ences made by the trial judge were clearly wrong,
just as it is entitled to reach this conclusion in
respect to findings of fact.
prdsentds. En l’espèce, par exemple, la juge de
premiere instance a hifdrd du fait que des acci
dents s’dtaient produits sur le chemin Snake Hill
que l’intimde connaissait ou aurait dii connaitre
1’ existence du danger cache.
Notre Cour ajugd qu’il falialt appliquer aux infd
rences de fait du juge de premiCre instance le même
degré de retenue qu’à ses conclusions de fail (Geffen
c. Succession Goodman, [1991] 2 R.C.S. 353). La
cour d’appel qui contrâle la validité d’une infé
rence se demande si cefle-ci peut raisonnablement
fitre dtayde par lea conclusions de fait tirdes par le
juge de premiere instance et si celui-ci a appliqué lea
principes juridiques appropriés. En toute déférence,
je ne partage pas 1’ opinion de la majoritd selon
laquelle des inferences ne peuveut être rejetdes que
dans lea cas oü le processus qui les a produites est
lui-même deficient : voir Conseil de l’éducation de
Toronto (Cite) c. EE.E.E.S.O., district 15, [1997] 1
R.C.S. 487, par. 45:
Lorsqu’une cour de justice contrôle les conclusions
de fait d’un tribunal adntinistratif ou las inferences qu’il
a tirdes de la preuve, elle ne peut intervenir que >:
Lester (WW) (1978) Ltd. c. Association unie des compa
gnons et apprentis de l’industrie de Ia plomberie et de la
tuyauterie, section locale 740, [1990] 3 R.C.S. 644, a Ia
p. 669, lejuge McLachlin.
Une inference peut être manifestemeut erronde si
sea assises factuelles présentent des lacunes OU Si la
normejuridique appliqude aux faits eat mal interprC
tee. Mes collègues eux-mêmes’reconnaissent qu’un
juge eat souvent appeld a tirer des inferences mixtes
de fait et droit (par. 26). Bien qua la norme de con
trôle soit la mflme et pour les conclusions de fail et
pour les inferences de fair, II importe néanmoins de
faire une distinction analytique entre las deux. Si le
tribunal de revision ne faisait que verifier s’il y a
des erreurs de fait, la decision du juge de premiere
instance serait alors nécessairement couflrmée dana
tons las cas ot il existe des elements de preuve
dtayant lea conclusions de fait de ce dernier. Selon
moi, notre Cour a le droit de conclure que lea infe
rences du juge de premiere instance étaient mani
festement errondes, tout comme elle peut le faire a
l’dgard des conclusions de fail.

[2002] 2 RC.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 297
My colleagues take issue with the above state
ment that an appellate court will verify whether the
making of an inference can reasonably be supported
by the trialjudge’s findings of fact. a standard which
they believe to be less strict than the “palpable and
overriding” standard. I do not agree that a less strict
standard is implied. In my view there is no differ
ence between concluding that it was “unreasonable”
or “palpably wrong” for a trial judge to draw an
inference from the facts as found by him or her and
concluding that the inference was not reasonably
supported by those facts. The distinction is merely
semantic.
By contrast, an appellate court reviews a trial
judge’s findings on questions of law not merely
to determine if they are reasonable, but rather
to determine if they are correct; Moge v. Moge,
[19921 3 S.C.R. 813, at p. 833; R. v. Nova Scotia
Pharmaceutical Society, [1992] 2 S.C.R. 606, at
p. 647; R. P. Kerans, Standards ofReview Employed
by Appellate Courts (1994), at p. 90. The role of
correcting errors of law is a primary function of the
appellate court; therefore, that court can and should
review the legal determinations of the lower courts
for correctness.
In the law of negligence, the question of whether
the conduct of the defendant has met the appropriate
standard of care is necessarily a question of mixed
fact and law. Once the facts have been established,
the determination of whether or not the standard of
care was met by the defendant will in most cases
be reviewable on a standard of correctness since
the trial judge must appreciate the facts within the
context of the appropriate standard of care. In many
cases, viewing the facts through the legal lens of the
standard of care gives rise to a policy-making or law-
setting function that is the purview of both the trial
and appellate courts. As stated by Kerans, supra, at
p. l03, “[tjhe evaluation of facts as meeting or not
meeting a legal test is a process that involves law
making. Moreover, it is probably correct to say that
every new attempt to apply a legal rule to a set of
Mes collègues ne sont pas d’accord avec l’énoncd
susmentionmi — savoir celui portant que la cour
d’appel se demande si une inference peut raisonna
bleinent être Ctayde par les conclusions de fail tirees
par le juge de premiere instance — estimant qu’il
s’agit d’une norme de contrôle moms exigeante que
celle de l’erreur >. Pour
ma part, je ne crois pas que cet Cnoncé iinplique
l’application d’une norme moms exigeante. A mon
avis, II n’y a aucune difference entre le fait de con
clure qu’il Ctait > ou pour un juge de tirer uric infCrence
des faits qu’il a constatds, et le fait de conclure que
cette inference n’dtait pas raisonnablement étayée
par ces faits. La distinction eat purement sémanti
que.
En revanche, une cour d’ appel ne contrôle pas
les conclusions tirées par le juge de premiere ins
tance a l’égard des questions de droit simplement
pour determiner si elles sont raisounables, mais
plutôt pour determiner si des sont correctes Moge
c. Moge, [1992] 3 R.C.S. 813, p. 833; R c. Nova
Scotia Pharmaceutical Society, [1992] 2 R.C.S.
606, p. 647; R. P. Kerans, Standards of Review
EinployedbyAppellate Courts (1994), p. 90. Un des
roles principaux d’uue cour d’ appel consiste a corn
ger les erreurs de droit et, par consequent, cette cour
peut et dolt verifier si les conclusions juridiques de
lajuridiction inféiieure sont correctes.
Dans le contexte du droit relatif ala negligence,
la question de savoir si la conduite du dCfendeur est
conforme a la norme de diligence appropride est
forcément urie question mixte de fait et de droit.
Une fois lea fails Ctablis, la decision touchant la
question de savoir si le défendeur a respecté ou non
la norme dc diligence eat, dans la plupart des cas,
conirOlable selon la norme de In decision correcte,
puisque le juge de premiere instance doit appré
cier les fails au regard de Ia norme de diligence
appropniée. Dans bien des cas, l’examen des faits
a travers le prismne jumidique de la norme de dili
gence implique 1’Ctablissement de politiques d’in
tCrêt génCral ou la crdation de règles de droit, role
qui relève autant des cours de premiere instance
que des cours d’appel. Comnme l’a dit Kerans,
op. cit., p. 103, [TRADuCTION]

107
298 HOUSEN V. N1KOLAISEN Bastarache J [2002) 2 S.C.R.
facts involves some measure of interpretation of that
rule, and thus more law-making” (emphasis in origi
nal).
In a negligence case, the trial judge is called on
to decide whether the conduct of the defendant was
reasonable under all the circumstances. While this
determination involves questions of fact, it also
requires the trial judge to assess what is reasonable.
As stated above, in many cases, this will involve a
policy-making or “law-setting” role which an appel
late court is better situated to undertake (Kerans,
supra, at pp. 5-10). For example, in this case, the
degree of knowledge that the trial judge should have
imputed to the reasonably prudent municipal coun
cillor raised the policy consideration of the type of
accident-reporting system that a small rural munici
pality with limited resources should be expected to
maintain. This law-setting role was recognized by
the United States Supreme Court in Bose Corp. v.
Consumers Union of U.S., inc., 466 U.S. 485
(1984), at note 17, within the context of an action
for defamation:
A finding of fact in some cases is inseparable from the
principles through which it was deduced. At some point,
the reasoning by which a fact is “found” crosses the line
between application of those ordinary principles of logic
and common experience which are ordinarily entrusted to
the finder of fact into the realm of a legal rule upon which
the reviewing court must exercise its own independent
judgment. Where the line is drawn varies according to
the nature of the substantive law at issue. Regarding cer
tain largely factual questions in some areas of the law, the
stakes — in terms of impact on future cases and future
conduct —
are
too great to entrust them finally to the
judgment of the trier of fact.
question de savoir si les faits satisfont ou non a un
critèrejuridique donnd eat unprocessus qui implique
une fonction créatrice de droit. Qui plus est, il eat
probablement exact d’affirmer que chaque nou
velle tentative d’ appliquer une regle de droit a un
ensemble de faits emporte une certainc interpré
tation de cette regle et, partant, l’élaboration de
règles de droIt additionnelles>> (en italique dans
l’original).
Dans une affaire de negligence, le juge de pre
mière instance est appeld a decider Si la conduite
du ddfendeur était raisoniaable eu dgard a toutes lea
circonstauces. Bien que la prise de cette decision.
demande l’examen de questions de fait, elle exige
dgalement du juge de premiere instance qu’iI eta
blisse ce qui est ralsonnable Comme II a dté men
tionnd plus tot, dans bien des cas cette decision
implique l’dtablissement de politiques d’intdrêt
gdnéral ou la >, role
qu’une cour d’appel eat mieux placde pour rem
plir (Kerans, op. cit., p. 5 a 10). En l’espèce, par
exemple, le degrd de connaissance que la juge de
premiere instance aurait dil prfiter au conseiller
municipal raisonnablement prudent soulevait une
consideration participant d’une politique d’intérêt
gdndral, savoir le genre de système d’information
sur lea accidents qu’une petite municipalité rurale
aux ressources budgetaires liinitdes eat censee
tenir. Ce rOle crdateur de droit a etC reconnu par
la Cour supreme des Etats-Unis dans l’arret Bose
Corp. c. Consumers Union of U.S., Inc., 466 U.S.
485 (1984), a la note 17, dana le contexte d’une
action en cliffamation:
[TRADUCTI0N] Une conclusion de fait est, dana cer
tains cás, indissociable des principes qui out dtC appliqués
pour y arriver. Ann point donné, le raisonnement menant
a la > cease d’être l’application
des principes ordinaires de logique et d’expCrience gCné
rale, qui est géndralement 1’ apanage du juge de premiere
instance, pour devenir 1’ application d’une regle de droit,
tâche oü le tribunal de revision doit exercer son propre
jugernent. Cette ligne de demarcation se dCplace selon la
nature de in règle de droit substantiel en litige. Dans quel
ques branches du droit, certaines questions largement
factuelles souièvent des enjeux — incidence sur d’éven
tuelles affaires et le comportenlent futur — qui sont trop
importants pour être conflCs en premier et dernier ressort
au juge de premiere instance.

[2002] 2 RC.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 299
My colleagues assert that the question of whether
or not the standard of care was met by the defendant
in a negligence case is subject to a standard ofpalpa
ble and overriding error unless it is clear that the trial
judge made some extricable error in principle with
respect to the characterization of the standard or its
application, in which case the error may amount to
an error of law (pam. 36). I disagree. In many cases,
it will not be possible to “extricate” a purely legal
question from the standard of care analysis applica
ble to negligence, which is a question of mixed fact
and law. In addition, while some questions of mixed
fact and law may not have “any great precedential
value” (Southam, supra, at para. 37), such questions
often necessitate a normative analysis that should be
reviewable by an appellate court.
Consider again the issue of whether the munici
pality knew or should have known of the alleged
danger. As a matter of law, the thai judge must
approach the question of whether knowledge should
be imputed to the municipality having regard to
the duties of the ordinary, reasonable and prudent
municipal counciflor. If the trialjudge applies a dif
ferent legal standard, such as the reasonable person
standard, it is an error of law. Yet even if the trial
judge correctly identifies the applicable legal stand
ard, he or she may still err in the process of assess
ing the facts through the lens of that legal standard.
For example, there may exist evidence that an acci
dent had previously occurred on the portion of the
road on which the relevant accident occurred. In
the course of considering whether or not that fact
satisfies the legal test for knowledge the trial judge
must make a number of nonnative assumptions. The
trial judge must consider whether the fact that one
accident had previously occurred in the same loca
tion would alert the ordinary, reasonable and pru
dent municipal councillor to the eñsteuce of a
hazard. The thai judge must also consider whether
the ordinary; reasonable and prudent counciilor
would have been alerted to the previous accident
by an accident-reporting system. In my view, the
question of whether the fact of a previous accident
having occurred fulfills the applicable knowledge
Mes collègues affirment que la question de savoir
si, clans une affaire de negligence, le ddfendeur a
respectd ou non la norme de diligence appropriée
est assujettie au critère de l’erreur manifeste et
doininante, sauf si le juge de premiere instance a
clairement comxnis tine erreur de principe isolable
relativement a la determination de la norme a appli
quer ou a son application, auquel cas l’erreur peut
constituer une erreur de droit (par. 36). Je ne suis
pas d’accord. Dana bon nombre de cas, il ne sera
pas possible d’> une question de droit pur
de l’analyse de la norme de diligence applicable en
matière de negligence, qui eat une question mixte
de fait et de droit. En outre, bien que certaines ques
tions mixtes de fait et de droit puissent tie pas avoir
cc une grande valeur comme précédents >> (Southam,
précitd, par. 37), ces questions iinpliquent souvent
tine analyse normative que devrait pouvoir contrôler
üne cour d’appeL
Revenons maintenant a la question de savoir si
la municipalitC connaissait ou aurait dü connatre
le danger allégué. Stir le plan juridique, le juge de
premiere instance doit se demander s’il y a lieu de
prêter cette connaissance ala municipalité eu égard
aux obligations qui incombent au conseiller muni
cipal moyen, raisonnable et prudent. Si le juge de
premiere instance applique une autre nornie juridi
que, par exemple celle de la personae raisonnable,
il conirnet tine erreur de droit. Cependant, même en
supposant que le juge de premiCre instance determine
correctement la norme juridique a appliquer, II
lul est encore possible de commettre tine erreur lors
qu’il apprécie les faits a la lumière de cette norme
juridique. Par exemple, il petit exister tine preuve
indiquant qu’un accident s’Ctait déjà produit stir le
tronçon de chentin en cause. Le juge de premiere
instance qui se demande si ce fait satisfait ou non au
critère juridique applicable a la question de la con
naissance doit poser tin certain nombre d’hypothè
sea nonnaxives; fl doit se demander si le fait qu’ un
accident se soit déjà produit an même endroit aler
terait le conseiller municipal moyen, raisonnable et
prudent de l’existence d’un danget Ii doit également
se demander si cc conseiller aurait appris 1’ existence
de 1’ accident antérieur par tin système d’iriformation
stir les accidents. Selon moi, la question de savoir si
le fait qu’un accident se soft produit antérieurement
108
109

110
300 HOUSEN V. NIKOLAISEN Bastarache J [2002) 2 S.C.R.
requirement is a question of mixed fact and law and
it is artificial to characterize it as anything else. As is
apparent from the example given, the question may
also raise normative issues which should be reviewable
by an appellate court on the correctness stand
ard.
I agree with my colleagues that it is not possi
ble to state as a general proposition that all matters
of mixed fact and law are reviewable according to
the standard of correctness: citing Southam, supra,
at para. 37 (para. 28). I disagree, however, that the
dicta in Southam establishes that a trial judge’s con
clusions on questions of mixed fact and law in a
negligence action should be accorded deference in
every case. This Court in St-Jean v. Mercier, [2002)
1 S.C.R. 491, 2002 SCC 15, a medical negligence
case, distinguished Southam on the issue of the
standard applicable to questions of mixed fact and
law where the tribunal has no particular expertise.
Gonthier 3., writing for a unanimous Court, stated at
paras. 48-49:
A question “about whether the facts satisfy the legal
tests” is one of mixed law and fact. Stated differently,
“whether the defendant satisfied the appropriate standard
of care is a question of mixed law and fact” (Southam, at
para. 35).
Generally, such a question, once the facts have been
established without overriding and palpable error, is to
be reviewed on a standard of correctness since the stand
ard of care is normative and is a question of law within
the normal purview of both the trial and appellate courts.
Such is the standard for medical negligence. There is no
issue of expertise of a specialized tribunal in a particular
field which may go to the determination of facts and be
pertinent to defining an appropriate standard and thereby
call for some measure of deference by a court of general
appeal (Southam, supra, at para. 45; and Nova Scotia
Pharmaceutical Society, supra, at p. 647).
I also disagree with my colleagues that Jaegli
Enterprises Ltd. v. Taylor, [1981) 2 S.C.R. 2, is
authority for the proposition that when the question
satisfait a l’exigence de connaissance applicable est
une question mixte de fait et de droit, et il serait arti
ficiel de la quaiifier autrement. Comme l’indique
clairement l’exemple qui précbde, cette question
peut dgalement soulever des questions normatives
que devraitpouvoir contrôlerune cour d’appel selon
la nOrme de la decision correcte.
Je partage l’opinion de mes collègues selon
laquelle on ne peut poser comme principe gene
ral que toutes les questions mixtes de fait et de
droit sont assujetties a la norme de la decision cor
recte: citant Southam, précité, par. 37 (pan 28).
Cependant, je ne crois pas que l’opinion formulee
dans Southam signifie que, dans une affaire de negli
gence, les conclusions dujuge de premiere instance
sur des questions mixtes de fait et de droit corn
mandent systdmatiquement une attitude empreinte
de retenue. Dans l’arrêt St-Jean c. Mercier, [2002)
1 R.C.S. 491, 2002 CSC 15, affaire de negligence
mCdicale, notre Cour a différencié cette affaire de
l’arrêt Southam sur la question de la norme de con
trôle applicable aux questions mixtes de fait et de
droit dans les cas oii le tribunal ne possède d’ exper
tise particuiière. Exposant la decision unanime de la
Cour, lejuge .Gonthier a dit ceci, aux par. 48 et 49:
La question qui consiste est une question mixte
de droit et de fait ou en d’ autres termes,
(Southam, par. 35).
Une fois les faits Ctablis sans erreur manifeste et
dominante, cette question doit gdnéralement être révi
see suivant la nonne de la decision correcte puisque Ia
norme de diligence est normative et constitue une ques
tion de droit qui telève de la competence habituelle des
tribunaux de premiere instance et d’appel. C’est Ia norme
applicable a Ia negligence mCdicale. II n’est pas question
de l’expertise d’un tribunal spCcialisd dans un domaine
particulier, pouvant toucher la determination des faits et
avoir une incidence sur Ia definition de la norme appro
pride et exiger de cc fail une certaine défCrence de la part
d’une cour génCraie d’appel (Southam, par. 45; Nova
Scotia Pharmaceutical Society, précitC, p. 647).
Je ne peux non plus me ranger a l’avis de
mes coltègues selon lequel l’arrêt Jaegli Enterprises
Ltd c. Taylor, [1981) 2 R.C.S. 2, permet d’affirmer

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 301
of mixed fact and law at issue is a finding of negli
gence, that finding should be deferred to by appellate
courts. In that case the trialjudge found that the con
duct of the defendant ski instructor met the standard
of care expected of him. Moreover, the trial judge
found that the accident would have occurred regard
less of what the ski instructor had done (Taylor v.
The Queen in Right ofBritish Columbia (1978), 95
D.L.R. (3d) 82). Seaton l.A. of the British Columbia
Court of Appeal disagreed with the trial judge that
the ski instructor had met the applicable standard
of care (Taylor (Guardian ad litem of) v. British
Columbia (1980), 112 D.LR. (3d) 297). Seaton
LA. recognized nevertheless that the “final ques
tion” was whether “the instructor’s failure to remain
was a cause of the accident” (p. 307). On the issue
of causation, a question of fact, Seaton J.A. clearly
substituted his opinion for that of the trial judge’s
without regard to the appropriate standard of review.
His concluding remarks on the issue of causation at
p. 308 highlight his lack of deference to the trial
judge’s conclusion on causation:
On balance, I think that the evidence supports the
plaintiffs’ claim against the instructor, that his conduct in
leaving the plaintiff below the crest was one of the causes
of the accident.
This Court; which restored the finding of the trial
judge, did not clearly state whether it did so on the
basis that the appellate court was wrong to inter
fere with the trial judge’s finding of negligence or
whetherit did so because the appellate court wrongly
interfered with the trial judge’s conclusions on cau
sation. The reasons suggest the latter. The only por
tion of the trial judgment that this Court referred
to was the finding on causation. Dickson J. (as be
then was) remarks in Jaegli Enterprises, supra, at
p.4:
At the end of a nine-day trial Mr. Justice Meredith,
the presiditig judge, delivered a judgment in which he
que, lorsque la question rnixte de fait et de droit en
litige est la conclusion d.c negligence tirde par le
juge de premiere instance, les cours d’appel doivent
faire preuve de retenue a l’égard de cette conclusion.
Dans cette affaire, lejuge de premiere instance avail
conclu que le défendeur, un instructeur de ski, avait
respectC la norme de diligence a laquelle il dtait
tenu. II avail aussi couclu que l’accident serait stir
venu, inddpendamment de la conduite de l’instruc
teur de ski (Taylor c. The Queen in Right ofBritish
Columbia(1978), 95D.L.R. (3d) 82).Lejuge Seaton
de la Cour d’appel de la Colombie-Britannique a
exprirud son ddsaccord avec Ia conclusion du juge
de premiere instance que l’instructOur de ski avait
respectd la norme de diligence applicable (Taylor
(Guardian ad litem of) c. British Columbia (1980),
112 D.L.R. (3d) 297). II a ndanmoins recormu que
[mAI)UcrIoN] consistait a se
demander si > (p. 307). Stir la question du lien de causa
lied, qui est une question de fail, le juge Seaton a
clairement substitue son opinion a celle du juge d.c
premiere instance sans tenir compte de la norme de
conirôle appropride. Ses remarques finales stir la
question de la causalitd, a la p. 308, font ressortir
son absence d.c retenue a l’dgard de la conclusion du
juge de premiere instance sur cc point:
[TR.DucrIoN] Tout bien considéré, j’estime que la
preuve étaye la prétention des demandeurs voulant que
Ia conduite de l’instructeur, qui l’a J.aissde scale sous la
cr&e de Ia butte, a été l’iine des causes de 1’accident.
En rdtablissant la ddcision du juge de prenilère
instance, notre Cour n’a pas prdcisd si dc le faisait
parce que la cour d’appel avait eu tort de modifier la
conclusion de cc dernier sir la negligence ou parce
qu’elle avait erronCmnent modifiC ses conclusions
stir Ia causalitd. Les motifs donnent a penser qtie
la derniCre proposition est la bonne. La scale panic
du jugement de premiCre instance mentionude par
notre Cour se rapporte a la conclusion stir le lien de
causaiitd. Le juge Dickson (plus tard Juge en chef)
a fail les remarques suivantes dans l’arrêt Jaegli
Enterprises, prdcitd, a lap. 4:
A la fin d’un procès de neufjours, le juge Meredith, qui
a présidé le procès, a rendu us jugement dans lequel il a
112

113
302 HOUSEN V. MKOLAISEN Bastarache .1. [2002] 2 S.C.R.
very carefully considered all of the evidence and, con
cluded that the accident had been caused solely by Larry
LaCasse and that the plaintiffs should recover damages,
in an amount to be assessed, against LaCasse. The claims
against Paul Ankenman, Jaegli Enterprises Limited and
the other defendants were dismissed with costs.
The Court went on to Cite a number of cases,
some of which did not involve negligence (see
Schreiber Brothers Ltd. v. Currie Products Ltd.,
[1980] 2 S.C.R. 78), for the general proposition that
“it [is] wrong for an appellate court to set aside a
thaijudgment where [there is not palpable and over
riding error, and] the only point at issue [was] the
interpretation of the evidence as a whole” (p. 84).
Given that the Court focussed on the issue of cau
sation, a question of fact alone, I do not think that
Jaegli Enterprises establishes that a finding of neg
ligence by the trial judge should be deferred to by
appellate courts. In my view, the Court in Jaegli
Enterprises merely affirmed the longstanding prin
ciple that an appellate court should not interfere
with a trial judge’s finding of fact absent a palpable
and overriding error.
(2) Error of Law in the Reasons of the Court of
Queen’s Bench
114
The standard of care set out ins. 192 of The Rural
Municipality Act, 1989, as interpreted within the
jurisprudence, required the trial judge to examine
whether the portion of Snake Hill Road on which
the accident occurred posed a hazard to the reason
able driver exercising ordinary care. Having identi
fied the correct legal test, the trial judge nonethe
less failed to ask herself whether a reasonable driver
exercising ordinary care would have been able to
• safely drive the portion of the road on which the
• accident occurred. To neglect entirely one branch of
a legal test when applying the facts to the test is to
misconstrue the law (Southam, supra, at para. 39).
The Saskatchewan Court of Appeal was therefore
right to characterize this failure as an error of law
and to consider the factual findings made by the trial
judge in light of the appropriate legal test.
examine soigneusement toute Ia preuve et a conclu que
1’ accident etait imputable uniquement a Larry LaCasse et
que les demandeurs pouvalent recouvrer de LaCasse des
dommages-intérêts poár an moutant a déterminet Les
reclamations contre Paul Ankenman, Jaegli Enterprises
Limited et lea autres defendeurs out CtC rejetées avec
dépens.
La Cour a ensuite cite quelques decisions,
dont certaines ne traitent pas de negligence (voir
Schreiber Brothers Ltd. c. Currie Products Ltd.,
[1980] 2 R.C.S. 78), au soutien de la proposition
gdnérale qu’cc une cour d’appel ne peut a bon droit
infirmer une decision de premiere instance lorsque
la seule question en litige porte sur l’interprétation
de l’ensemble de la preuve>> (p. 84). Etant donnd
que la Cour s’est attachée a la question du lien de
causalitd, question de fait seulement, je ne crois pas
que l’arr& Jaegli Enterprises dtablisse que cours
d’ appel doivent faire montre de retenue lorsque le
juge de premiere instance conclut a la negligence.
A mon avis, dans l’arrêt Jaegli Enterprises, la Cour
n’a fait que confirmer le principe bien dtabli portant
qu’une cour d’appel ne doit pas modifier une con
clusion de fait du juge de premiere instance en l’ab
sen.ce d’erreur manifestetdominante.
(2) L’ erreur de droit dans les motifs de la Cour
du Banc de la Reine
Suivant la norme de diligence énoncée a l’art.
192 de la Rural Municipality Act, 1989, telle qu’ elle
a étd interprdtde dans la jurisprudence, la juge de
premiere instance devait se demander si le tron
con du chernin Snake Hill sur lequel s’est produit
l’accident constituait un danger pour. le conduc
teur raisonnable prenant des precautions normales.
Après avoir ddtermind quel dtait le critère juridique
applicable, la juge de premiere instance a toutefois
omis de se demander si mi tel conducteur aurait pu
rouler en sdcuritd sur le tronçon en question. Le fait
d’omettre entièrement une dtape d’un critère juridi
que, darts l’application de celui-ci aux fails de l’es
pèce, équivaut a mal interpreter le droit (Southam,
prdcitd, par. 39). Par consequent, la Cour d’ appel de
la Saskatchewan a donc eu raison de qualifier cette
omission d’erreur de droit et de contrôler lea conclu
sions de fait tirdes par lajuge de premiere instance a
la luinière du critère juridique approprié.

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 303
The long line ofjurisprudence interpreting. s. 192
of The Rural Municipality Act, 1989 and its pred
ecessor provisions clearly establishes that the duty
of the municipality is to keep the road “in such a
reasonable state of repair that those requiring to
use it may, exercising ordinary care, travel upon it
with safety” (Partridge, supra, at p. 558; Levey v.
Rural Municipality of Rodgers, No. 133, [1921] 3
W.W.R. 764 (Sask. CA.), at p. 766; Diebel Estate
v. Pinto Creek No. 75 (Rural Municzpality) (1996),
149 Sask. R. 68 (Q.Bj, at pp. 71-72). Legislation in
several other provinces establishes a similar duty of
care and courts in these provinces have interpreted
it in a similar fashion (R. v. Jennings, [1966] S.C.R.
532, at p. 537; County ofParkiand No. 31 v. Stetar,
892; Fafard v. City of
[1975) 2 S.C.R. 884, at p.
Quebec (1917), 39 D.L.R. 717 (S.C.C.), atp. 718).
This Court, in Jennings, supra, interpreting a similar
provision under the Ontario Highway Improvement
Act, R.SO. 1960, c. 171, remarked at p. 537 that:
“[ut has been repeatedly held in Ontario that where
a duty to keep a highway in repair is imposed by
statute the body upon which it is imposed must keep
the highway in such a condition that travellers using
it with ordinary care may do so with safety”.
There is good reason for limiting the munici
pality’s duty to repair to a standard which per
mits drivers exercising ordinary care to proceed
with safety. As stated by this Court in Fafard,
supra, at p. 718: “[a] municipal corporation is
not an insurer of travellers, using its streets; its
duty is to use reasonable care to keep its streets
in a reasonably safe condition for ordinary travel
by persons exercising ordinary care for their own
safety”. Correspondingly, appellate courts have
long held that it is an error for the trial judge to
find a municipality in breach of its duty merely
because a danger exists, regardless of whether or
not that danger poses a risk to the ordinary user of
the road. The type of error to be guarded against
was described by Wetmore C.J. in Williams v.
La jurisprudence de longue date portant
sur l’interpretation de l’art. 192 de la Rural
Municipality Act:, 1989 et des dispositions qu’il
a remp1aces dtablit c1airemeit que les muni
cipaliuis ont l’obligation de tenir lea chemins
[TRADUcTI0N] (Partridge, précité,
p. 558; Levey c. Rural Municipality of Rodgers,
No. 133, [1921] 3 W.W.R. 764 (C.A. Sask.),
p. 766; Diebel Estate c. Pinto Creek No. 75
(Rural Municipality) (1996), 149 Sask. R. 68
(B.R.), p. 71 et 72). Plusieurs autres provinces
ont adoptcl des lois Ctablissant une obligation de
diligence semblable, et les tribunaux de ces pro
vinces out interprét6 cette obligation de la même
facon (R. c. Jennings, [1966] R.C.S. 532, p. 537;
Cornté de Parkiand no 31 c. Stetar, [1975] 2 R.C.S.
884, p. 892; Fafard c. City of Quebec (1917), 39
D.L.R. 717 (C.S.C.), p. 718). Interpretant une dis
position similaire de la Highway Improvement Act
de 1’Ontario, R.S.O. 1960, ch. 171, notre Cour a
indiquC, clans l’arrêt Jennings, prCcité, p. 537,
qu’[TRADuCrIoN] .
II existe de bonnes raisons de limiter l’obliga
tion d’entretien des routes incombant aux muni
cipalitCs au respect d’une norme suffisante pour
permèttre aux conducteurs qui prennent des prCcau
tions normales d’y circuler en sCcuritC. Comme l’a
dit notre Cour clans l’arrêt Fqfard, prCcitC, p. 718:
[TRADUCrr0N] >. En consequence, lea cours d’appel estiment
depuis longtemps que le juge de premiere instance
cornmèt une erreur s’il conclut qu’une municipaiitC
115
116

117
304 HOUSEN v. NLKOLAIEN Bastarache J [2002J 2 S.C.R.
Town of North Battleford (1911), 4 Sask. L.R. 75
(en banc),at p. 81:
The question in an action of this sort, whether or not the
road is kept in such repair that those requiring to use it
may, using ordinary care, pass to and fro upon it in safety,
is, it seems to me, largely one of fact. . .1 would hesitate
about setting aside a finding of fact of the trial Judge if
he had found the facts necessary for the determination of
the case, but he did not so find. He found that the cross
ing was a “dangerous spot without a light, and that if the
utmost care were used no accident might occur, but it was
not in such proper or safe state as to render such accident
unlikely to occut” He did not consider the question from
the standpoint of whether or not those requiring to use the
road might, using ordinary care, pass to and fro upon it in
safety. The mere factf the crossing being dangerous is
not sufficient. . . . [Emphasis addecLj
From the jurisprudence cited above, it is clear
that the mere existence of a hazard or danger does
not in and of itself give rise to a duty on the part of
the municipality to erect a sign. Even if a trial judge
concludes on the facts that the conditions of the road
do, in fact, present a hazard, he or she must still go
on to assess whether that hazard would present a
risk to the reasonable driver exercising ordinary
care. The ordinary driver is often faced with inher
ently dangerous driving conditions. Motorists drive
in icy or wet conditions. They drive at night on
country roads that are not well lit. They are faced
with obstacles such as snow ridges and potholes.
These obstacles are often not in plain view, but are
obscured or “hidden”. Common sense dictates that
motorists will, however, exercise a degree of cau
tion when faced with dangerous driving conditions.
A municipality is expected to provide extra caution
ary measures only where the conditions of the road
and the surrounding circumstances do not signal to
the driver the possibility that a hazard is present.
For example, the ordinary driver expects a dirt road
to become slippery when wet. By contrast, paved
mauque a son obligation du seul fait qu’un danger
existe, inddpendamment de la question de savoir Si
ce danger prdsente ou non tin risque pour l’usager
ordinaire du chemin. Le genre d’erreur qu’il faut
dviter a dtd ddcrit ainsi par le juge en chef Wetmore
dana l’affaire Williams c. Town of North Battleford
(1911), 4 Sask. L.R. 75 (In banco), p. 81:
fTRADUc’rloN] II me semble que la question qui se pose
clans cc genre d’action — soft celle de savoir si le chenilu
eat tenu dana un état d’entretien tel que ceux qui doivent
l’emprunter puissent, en prenant des prdcautions nor-
est essentiellement ‘inc
males, y circuler en s&uritd —
question de fait [. . j j ‘hsiterais a &arter une conclu
sion de fait du juge de premiere instance s’il avait re1ev
l’existcnce des fails ndcessaires pour trancher l’affaire,
mais II ne l’a pas fait. II a conclu que l’intersection dtait
.
IL u’a pas examine Ia question en se demandant si ceux
gui doivent emprunter cc chemin peuvent, en prenant des
precautions nomiales, y circuler en sécunitC. Le seulfait
que l’intersection wit dangereuse n’est pas suffisant..,.
lie souligne.]
II ressort clairement de la jurisprudence sus
mentionnée que la simple existence d’ un risque ou
danger ne fail pas en soi naItre pour la municipalitd
l’obligation d’instailer ‘in panneau de signaiisation.
Metric si, a partir des faits, le juge de premiere ins
tance arrive ala conclusion que l’dtat du chemin crde
effectivement un risque, il dolt poursuivre son ana
lyse et se demander si ce risque prdsente un danger
pour le conducteur raisonnable prenant des prdcau
tions normales. Le conducteur moyen rencontre
souvent des conditions de conduite intrinsèquement
dangereuses. Les automobilistes conduisent leur
vdhicule sur des chaussees glacdes ou humides. Us
roulent la nuit sur des chernins de campagne mal
dclairds. Us rencontrent des obstacles comme des
bancs de neige et des nids-de-poule. Souvent ces
obstacles ne sont pas visibles, car us sont dissi
mulds ou . Le bon sens suggère que lea
automobilistes font toutefois preuve d’une certaine
prudence en prdsence de conditions de conduite
dangereuses. On n’attend de la municipalitd qu’elle
prenne des mesures d’ avertissement supplemental
rës que lorsque l’dtat du chernin et l’ensemble des

[2002] 2 R.C.S. HOUSEN c. NUCOLAISEN Lejuge Bastarache 305
bridge decks on highways are often slick, though
they appear completely dry. Consequently, signs
will be posted to alert drivers to this unapparent pos
sibifity.
The appellant in this case argued, at para. 27 of
his factum, that the trial judge did, in fact, assess
whether a reasonable driver using ordinary care
would find the portion of Snake Hill Road on which
the accident occurred to pose a risk. He points in
particular to the trial judge’s comments at paras. 85-
86 that:
There is a portion of Snake Hill Road that is a hazard
to the public. In this regard I accept the evidence of Mr.
Anderson and Mr. Werner. Furthex it is a hazard that is
not readily apparent to users of the road. It is a hidden
hazard..
where the existence of. . . bush obstructs the ability
of a motorist to be forewarned of a hazard such as that on
Snake Hill Road, it is reasonable to expect the R.M. to
erect and maintain a warning or regulatory sign so that a
motorist, using ordinary care, may be forewarned, adjust
speed and take corrective action in advance of entering a
dangerous situation. [Emphasis added.]
The appellant’s argument suggests that the trial
judge discharged her duty to apply the facts to the
law merely by restating the facts of the case in the
language of the legal test. This was not, however,
sufficient. Although it is clear from the citation
above that the trial judge made a factual finding
that the portion of Snake Hill Road on which the
accident occurred presented drivers with a hidden
hazard, there is nothing in this portion ofher reasons
to suggest that she considered whether or not that
portion of the road would pose a risk to the reason
able driver exercising ordinary care. The finding that
a hazard, or even that a hidden hazard, exists does
not automatically give rise to the conclusion that the
reasonable driver exercising ordinary care could not•
autres circonstances ne signalent pas au conducteur
la possibffitd qu’un danger existe. Par exemple, le
conducteur moyen s’attend a ce qu’un chemin de
terre devienne glissant iorsqu’il eat mouillé. A l’op
pose, len tabliers de pout asphaltds qui se trouvent
stir len routes sont souvent glissants, bien qu’ils
paraissent complètement secs. Par consequent, des
panneaux sont installds pour alerter len conducteurs
de cette possibilitd non apparente.
Eu l’espèce, l’appelant a plaidd, au par. 27 de son
mdmoire, que la juge de premiere instance s’dtait,
en fait, demandC si tin conducteur raisonnable pre
nant des precautions norniales considérerait que le
troncon du chemin Snake Hill oü s’est produit l’ac
cident constitue un risque. II souligne en particuuier
lea commentaires suivants de la juge de premiere
instance, aux par. 85 et 86:
[mADUcrT0N] 11 y a, sur le chernin Snake Hill, un
tronçon qui prdsente tin danger pour le public. A cet
dgard, je retiens les tdmoignages de MM. Anderson et
Werner. En outre, il s’agit d’un danger qui n’est pan fad
lement décelable par len usagers du chemin. Ii s’agit d’un
danger cache
a l’endroit cii la presence den broussailles etnpe
che lès automobilistes de voir venir un danger comme
celui qui exists stir Ic chemin Snake Hill, il eat raisornia
ble de s’attendre a ce que la M.R. installe et inaintienne
tin panneau d’avertissement ou de signaiisation afin
qu’un autornobiliste prenant des precautions norma-
len soit prévenu et puisse réduire sa vitesse et prendre
des niesures correctives avant d’arriver a l’endroit dange
reux. [Je souligne.]
L’appelant semble prdtendre que la juge de pre
mière instance s’est acquittde de son devoir d’appli
quer le droit aux faits simplement en intégrant lea
faits de l’espèce a la formulation du crltère juricli
que. Ce u’était toutefois pas suffisant. Bien qu’il
ressorte clairement des passages prdcitds que la
juge de premiere instance a, a partir den faits, conclu
que la portion du chemin Snake Hill oil s’est pro
duit 1’ accident exposait lea conducteurs a un danger
cache, il n’y a rien dans cette partie de ses motifs
qui indique qu’elle s’est demaudé si cette portion
du chemin prdsentait un risque pour ic conducteur
raisonnable prenant den precautions normales. Le
fail de conclure a l’existence d’un danger, rnême
cache, n’hnplique pas forcdment que le conducteur
118
119

120
306 HOUSEN NIKOLA1SEN Bastarache J. [2002] 2 S.C.R.
travel through it safely. A proper application of the
test demands that the trial judge ask the question:
“How would a reasonable driver have driven on
this road?” Whether or not a hazard is “hidden” or
a curve is “inherently” dangerous does not dispose
of the question. My colleagues state that it was open
to the trial judge to draw an inference of knowledge
of the hazard simply because the sharp curve was
a permanent feature of the road (para, 61). Here
again, there is nothing in the reasons of the trial
judge to suggest that she drew such an inference or
to explain how such an inference accorded with the
legal requirements concerning the duty of care.
Nor did the trial judge consider the question in
any other part of her reasons. Her failure to do so
becomes all the more apparent when her analysis (or
lack thereof) is compared to that in cases in which
the courts applied the appropriate method The
Court ofAppeal referred to two such cases by way of
example. In Nelson v. Waverley (Rural Municipality)
(1988), 65 Sask. R. 260 (Q.B.), the plaintiff argued
that the defendant municipality, should have posted
signs warning of a ridge in the middle of the road
that resulted from the grading of the road by the
municipality. The trial judge concluded that if the
driver had exercised ordinary care, he could have
travelled along the roadway with safety. Instead, he
drove too fast and failed to keep an adequate look
out considering the maintenance that was being
performed on the road. In Diebel Estate, supra, the
issue was whether the municipality had a duty under
a. 192 to post a sign warning motorists that a rural
road ended abruptly in a T-intersection. The ques
tion of how a reasonable driver exercising ordinary
care. would have driven on that road was asked and
answered by the trial judge in the following passage
atp. 74:
His [the expert’s] conclusions as to stopping are, how
ever, mathematically arrived at and never having been on
raisonnable prenant des precautions normales iae
peut pas y circuler en sécurité. Pour bien appliquer
le critère juridique, lejuge de premiere instance doit
se poser la question suivante :
Le fait de conclure qu’il existe ou non un danger
ou qu’une courbe est quelque chose d’
> dangereux ne vide pas la ques
tion. Mes collegues affirment que la juge de pre
iniCre instance pouvait inférer la connaissance du
danger du seul fait que la courbe serrde constituait
une caracteristique permanente du chemin (par
61). Ici encore, rien dans les motifs de la juge de
premiere instance n’indique qu’elle a tire une telle
inference ou u’explique en quoi une telle inference
satisfaisait aux conditions juridiques relatives a
l’obligation de diligence.
La juge de premiere instance n’a pas non plus
examine cette question aifleurs dana sea motifs. Son
omission a cet égard devient encore plus évidente
lorsqu’on compare son analyse (on son absence
d’analyse) a celle des affaires oii lea tribunaux ont
appliqué la bonne démarche. La Cour d’ appel a
douné coinxne exemple deux de ces affaires. Dans
Nelson c. Waverley (Rural Municipality) (1988),
65 Sask. R. 260 (B.R.), le demandeur prétendait
que la municipalité défenderesse aurait dii instal
ler des panneaux signalant la presence, au milieu
du chemin, d’un siflon resultant de travaux muni—
cipaux de nivellement. Le juge de premiere ins
tance a estinié que, si le conducteur avait pris des
precautions uormales, il aurait Pu rouler en sCcurité
sur la chaussée. Au lieu de cela, ii a roulé trop vite
et manqué de vigilance compte tenu des travaux
d’entretien qui étaient effectués sur le chernin. Dans
Diebel Estate, prCcité, II s’agissait de determiner si
la municipalité avait, en vertu de l’art. 192, l’obli
gation d’instafler tin panneau avertissant lea auto
mobilistes qu’ une route rurale se terrninait de façou
abrupte a m croisement en T. Le juge de premiere
instance s’est demandé comment un conducteur rai
sonnable prenant des precautions normales aurait
roulé stir ce chemin, et ii a répondu ainsi a cette
question, ala p. 74:
[TRADUCrIONI Ses conclusions [celles de l’expert]
pour cc qui concerne 1’ arrêt des automobiles découlent

[20021 2 R.C.S. HOUSEN c. NIKOLAISEN Lejuge Bastarache 307
the road, from what was described in the course of the
trial, 1 wouid think the intersection could be a danger at
night to a complete stranger to the area, depending on
one’s reaction time and the possibility of being confused
by what one saw rather than recognizing the T intersec
tion to be just that. On the other hand I would think a
• complete stranger in the areawould be absolutely reckless
to drive down a dirt road of the nature of this particular
road at night at 80 kilomelres per hout [Emphasis added
emphasis in original deleted.]
The conclusion that Wright 3. erred in failing to
apply a required aspect of the legal test does not
automatically lead to a rejection of her factual find
ings. This Court’s jurisdiction to review questions of
law entitles it, where an error of law has been found,
to take the factual findings of the trial judge as they
are, and to assess these findings anew in the context
of the appropriate legal test.
In my view, neither Wright J.’s factual findings
nor any other evidence in the record that she might
have considered had she asked the appropriate ques
tion, support the conclusion that the respondent
was in breach of its duty. The portion of Snake Hill
Road on which the accident occurred did not pose a
risk to a reasonable driver exercising ordinary care
because the conditions of Snake Hill Road in gen
eral and the conditions with which motorists were
confronted at the exact location of the accident sig
nalled to the reasonable motorist that caution was
needed. Motorists who appropriately acknowledged
the presence of the several factors which called for
caution would have been able to navigate safely the
so-called “hidden hazard” without the benefit of a
road sign.
The question of how a reasonable driver exer
cising ordinary care would have driven on Snake
Hill Road necessitates a consideration of the nature
and locality of the road. A reasonable motorist will
not approach a narrow gravel road in the country in
the same way that he or she will approach a paved
highway. It is reasonable to expect a motorist to
drive more slowly and to pay greater attention to
the potential presence of hazards when driving on a
toutefois d’opdrations mathdmatiques et bien que je a’ ale
jamais empnmté le chemin en question, d’ après lea des
criptions faites au procès, je mis d’avis que le croisement
pouirait coustituer tin danger Ia nuit pour quelqu’un qui
ne connait absolument pas l’endroit, eu égard a Ia vitesse
de reaction de chacun et a Ia possibilitd que quelqu’un
confonde le croisement en T avec quelque chose d’autre.
Par ailleurs, j’estimc gue guelgu’un ne connaissant aucu
nement l’endroit agirait de facon tout a fait téméraire en
roulant a 80 kiiomètres a l’heure Ia nuit sur tin cheniin de
terre comme celui gui nous intdresse. [Je souiigne; souii
gnement dans 1’ original omis.]
Le fait de conclure que la juge Wright a
commis une erreur de droit en omettant d’appliquer
tin dlément essentiel du critère juridique n’invalide
pan forcdment sea conclusions de fait. En effet, la
competence de noire Cour en matière d’examen
des questions de droit l’autorise, lorsqu’une telle
erreur eat dCcelée, a reprendre telles queUes les
conclusions de fail du juge de premiere instance et
ales rddvaluer au regard du critbre juridique appro
prie.
Selon iuoi, ni lea faits retenus par lajuge Wright
xii aucun autre tldment de preuve au dossier qu’elle
aurait pu prendre en consideration si elle s’dtait
pose la bonue question n’appuient sa conclusion
que l’inthnde a manqué a son obligation. La portion
du chemin Snake Hill oi s’est produit l’accident ne
prdsentait pan de risque pour tin conducteur raison
nable prenant des precautions nortuales, car l’dtat de
cc chemin en general et les conditions auxquelles lea
automobiiistes doivent faire face a l’endroit précis
de l’accident avertissent l’automobiliste raisonna
ble que Ia prudence s’impose. Les automobiiistes
sachant reconnaItre lea divers facteurs qui appel
lent a la prudence auraient Pu franchir le soi-disánt
[rRADucrIoNj sans l’aide d’un
pannean de signalisation.
Pour savoir comment tin conducteur raisonna
ble prenant des precautions norniales aurait conduit
son vdhicule stir le chemin Snake Hill, it faut tenir
compte de la nature du chemin et de la configuration
des licux. Un automobiliste raisonnable ne roulera
pan stir tine dtroite route de campagne gravelde de
la mêrxie facon que stir i.me route asphaltéc. II eat
raisonnable de s’attendre a ce qu’un automobiliste
conduise moms vite et soit plus attentif ala presence
121
122
123

125
124
308 HOUSEN V. NIKOLAISEN Bastarache .1 [2002] 2 S.C.R.
road that is of a lower standard, particularly when
he or she is unfamiliar with it.
While the trial judge in this case made some
comments regarding the nature of the road, 1 agree
with the Court of Appeal’s findings that “[sjhe
-might have addressed the matter more fully, taking
into account more broadly the terrain through which
the road passed, the class and designation of the
road in the scheme of classification, and so on. .
(para. 55). Instead, the extent of her analysis of the
road was limited to the following comments, found
at para. 84 of her reasons:
Snake Hill Road is a low traffic road. It is however
maintained by the R.M. so that it is passable year round.
There are permanent residences on the road. It is used by
farmers for access to their fields and cattle. Young people
frequent Snake Hill Road for parties and as such the road
is used by those who may not have the same degree of
familiarity with it as do residents.
In my view, the question of how the reason
able driver would have negotiated Snake Hill Road
necessitated a somewhat more in-depth analysis of
the character of the road. The trial judge’s analy
sis focussed almost entirely on the use of the road,
without considering the sort of conditions it pre
sented to drivers. It is perhaps not surprising that
the trial judge did not engage in this fuller analysis,
given that she did not turn her mind to the question
of how a reasonable driver would have approached
the road. Had she considered this question, she
likely would have engaged in the type of assessment
that was made by the Court of Appeal at para. 13 of
its judgment:
The road, about 20 feet in width, was classed as “a bladed
trail’ sometimes referred to as “a land access road,” a
classification just above that of “prairie trail”. As such, it
was not built up, nor gravelled, except lightly at one end
of it, but simply. bladed across the terrain following the
path of least resistance. Nor was it in any way signed.
de dangers potentiels sur un chemin de catdgorie
inférleure, particulierernent s’il n’est pas familier
avec celul-ci.
Bien que, en l’espèce, la juge de premiere ins
tance alt fait certains commentaires sur la nature du
chemin, je souscris ala conclusion de la Cour d’ ap
pel selon laquelle [TRADUCTI0NJ cc [ejile aurait pu
examiner la question de maaière plus approfondie,
en tenant davantage compte du type de terrain que
le chemin traversait, de la nature et de la ddsigna
lion du chemin selon le système de classification
des routes et ainsi de suite. . . >> (j:ar. 55). Au lieu
de cela, son analyse s’est limitée aux coinmentaires
suivants, au par. 84 de ses motifs:
[mADUCrION] Le chemin Snake Hill eat us chemin
a faible debit de circulation. Ti eat néannioins entretenu
par Ia M.R. a lougueur d’année afin de le garder carrossa
ble. Des residences permanentes sont situdes en bordure
de celui-ci. Les fermniers l’utilisent pour accdder a leurs
champs et a leur bdtail. Des jeunes gens empruntent le
chemnin Snake Hill pour se rendre a des fetes, de sorte
qu’il est utilisd par des conducteurs qui ne le connaissent
pas toujoursaussi bien que lea residents de l’endroit.
A mon ayis, la question de savoir comment mi
conducteur raisonnable aurait rould sur le chemin
Snake Hill ndcessitait un examnen un peu plus appro
fondi de la nature du chemin. Dans son analyse, Ia
juge de premiere instance s’ est attachde presque
exciusivement a l’utilisation qui est faite du chemin,
sans prendre en compte le genre de conditions qu’il
prdsente aux conducteurs. II n’est peut-tre pan sur
prenant qu’elle ne se soit pan livrde a cette analyse
approfondie, puisqu’elle ne s’est pas demandd com
ment un conclucteur raisonnable aurait rould sur ce
chemin. Si cUe s’était pose cette question, elle aurait
vraisemblablement procddd a une evaluation analo
gue a celle qu’a faire la Cour d’appel au par. 13 de
son jugement:
[TRADUcTI0N] Le chemin, d’une largeur de 20 pieds
environ, a dté qualifld de , qu’on
appelle aussi pafois cc chemin d’accès , soit tout juste
une categoric an-dessus d’un >.
Comme tel, II a’ a Ctd at renforcd at revfitu de gravier, sauf
ldgCrement a l’une de sea extr nitds, il s’agit tout sim
plenient d’un chemin niveld a même le terrain, suivant
Ic trace prdsentant le xnois d’obstacles. On n’y a installd
aucune signalisation.

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 309
Given the fact that Snake Hill Road is a low standard
road, in a category only one or two levels above a
prairie trail, one can assume that a reasonable driver
exercising ordinary care would approach the road
with a certain degree of caution.
Having considered the character of the road
in general, and having concluded that by its very
nature it warranted a certain degree of caution, it
is nonetheless necessary to consider the material
features of the road at the point at which the acci
dent occurred. Even on roads which are of a lower
standard, a reasonable driver exercising due caution
may be caught unaware by a particularly dangerous
segment of the road. That was, in fact, the central
argument that the appellant put forward in this case.
According to the appellant’s “dual nature” theory, at
para. 8 of his factum, the fact that the curvy portion
of Snake Hill Road where the accident occurred was
flanked by straight segments of road created a risk
that a motorist would be lulled into thinking that the
curves could be taken at speeds greater than that at
which they could actually be taken.
While it is not clear from her reasons that the
trial judge accepted the appellant’s “dual nature”
theory, it appears that her conclusion that the munic
ipality did not meet the standard of care required by
it was based largely on her observation of the
material features of the road at the location of the
Nikolaisen rollover. Relying on the evidence of two
experts, Mt Anderson and Mr. Werner, she found
the portion of the road on which the accident
occurred to be a “hazard to the public”. in herview,
the limited sight distance created by the presence
of uncleared bush precluded a motorist from being
forewarned of the impending sharp right turn iinme
diately followed by a left turn. Based on expert tes
timony, she concluded that the curve could not be
negotiated at speeds greater than 60 kmlh under
favourable conditions, or 50 km/h under wet con
ditions.
Again, I would not reject the trial judge’s factual
finding that the curve presented motorists with an
Cornme le chemin Snake Hill est une route de caté
gone inférleure, a peine un ou deux niveaux au
dessus d’un chemin de prairie, on peut presumer
qu’un conducteur raisonnable prenant des précau
tions normales y roulerait avec une certaine pru
dence.
Après avoir examine la nature générale dii
chemin et avoir conclu que, du fait de cette nature
même, une certaine prudence s’imposait, il faut
nCanmoins prendre en consideration les caractéris
tiques physiques du chemin a l’endroit oii 1’ accident
s’est produit. Même sur des chemins de catégorie
inférieure, un conducteur raisonnable prenaut des
precautions normales pourrait être pris par surprise
sur un tronçon particulièrement dangereux. 11 s’agit
là, en fait, del’ argument central présenté par l’appe
lant en i’espece. Selon sa these, dite de la > du chernin, au par. 8 de son mémoire, le
fail que la courbe oa est survenu 1’ accident se trouve
entre des tronçons en ligne droitc risquait d’amener
les automobilistes a croire que les virages pouvalent
être pris a des vitesses supérieures a celles aux
queUes us pouvaient l’être en réalité.
Bien que iCs motifs de la juge de premiere ins
tance n’indiquent pas clairement si cUe a retenu Ia
these de la > du chemin, il semble
que sa conclusion scion laquelle la municipalité a
manqué a son obligation d’entretien alt repose lar
gement sur son examen des caractéristiques physi
ques du chemin, a l’endroit oü le véhicule de M.
Nikolaisen a fail un tonneau. S’appuyant sur les
témoignages de deux experts, MIvL Anderson et
Werner, cue a estimé que Ia portion du chemin oil
s’est produit 1’ accident constituait un [TR.4DucrIoNJ

129
130
310 HOUSEN v. NK0LAISEN Bastarache J. [2002] 2 S.C.R.
inherent hazard. The evidence does not, however,
support a finding that a reasonable driver exercis
ing ordinary care would have been unable to nego
tiate the curve with safety. As I explained earlier,
the municipality’s duty to repair is implicated only
when an objectively hazardous condition exists,
and where it is determined that a reasonable driver
arriving at the hazard would be unable to provide
for his or her own security due to the features of the
hazard.
I agree with the trial judge that part of the danger
posed by the presence of bushes on the side of the
road was that a driver would not be able to predict
the radius of the sharp right-turning curve obscured
by them. In my view, however, the actual danger
inherent in this portion of the road was that the
bushes, together with the sharp radius of the curve,
prevented an eastbound motorist from being able
to see if a vehicle was approaching from the oppo
site direction. Given this latter situation, it is highly
unlikely that any reasonable driver exercising ordi
nary care would approach the curve at speeds in
excess of 50 km/h, a speed which was found by
the trial judge to be a safe speed at which to negoti
ate the curve. Since a reasonable driver would not
approach this curve at speeds in excess of which it
could safely be taken I conclude that the curve did
not pose a risk to the reasonable driver.
One need only refer to the series of photographs
of the portion of Snake Hill Road on which the
accident occurred to appreciate the extent to which
visual clues existed which would alert a driver to
approach the curve with caution (Respondent’s
Record, vol. II, at pp. 373-76). The photographs,
which indicate what the driver would have seen
on entering the curve, show the presence of bush
extending well Into the road. From the photographs,
it is clear that a motorist approaching the curve
would not fail to appreciate the risk presented by
the curve, which is simply that it is impossible to
see around it and to gauge what may be coming in
the opposite direction. In addition, the danger posed
intrinsèque pour les automobilistes. Toutefois, ii n’y
a rien dans Ia preuve qui permette de couclure qu’un
conducteur raisonnable prenant des precautions normales
aurait etC incapable de prendre le virage en
securite. Comme je l’ai expliquC plus tat, l’obliga
lion d’entretien des municipalitCs n’est en cause que
lorsqu’il existe une situation objectivement dange
reuse et qu’il est Ctabli qu’un conducteur raisonna
ble s’approchant du danger serait incapable d’assu
rer sa sécuritC en raison des caractCristiques de ce
danger.
Je partage 1’ opinion de Ia juge de premiere ins
tance selon laquelle une partie du danger crCC par
les broussailles se trouvant en bordure de la route
tenait au fait qu’un conducteur ne pourrait deviner le
rayon de courbure prononcC du virage a droite serrC
qu’elles dissimulaient. A mon sens, toutefois, le
veritable danger intrinsèque de ce troncon dii chernin
rCsidait dans le fait que lea broussailles, ainsi que le
court rayon de courbure du virage, empêhent lea
automobilistes circulant en direction eat de voir si
tin vChicule s’approche en sens inverse. Par con
sequent, it eat très peu probable qu’un conduc
teur raisonnable prenant des precautions normales
approcherait de ce virage a uric vitesse supCrieure a
50 km/h, vitesse a laquelle la juge de premiere ins
tance a conclu qu’il Ctait possible de le prendre en
sCcuritd. Etant donnC qu’un conducteur raisonnable
n’approcherait pas de cc virage a tine vitesse supC
rieure a celle lui permettant de le prendre en sCcu
rite, je conclus que le virage ne constituait pas tin
risque pour le conducteur raisonnable.
U suffit d’ examiner les photos du tronçon du
chemin Snake Hill oü l’accident est survenu pour
constater a quel point il existait des indices visuels
propres a. inciter tes conducteurs a s’approcher du
virage avec prudence (dossier de t’intimCe, vol. II,
p. 373-376). Les photos, qui montrent ce que voit
le conducteiirsur le point d’amorcer le virage, lais
sent voir la presence de broussailtes s’avançant con
sidCrablernent au-dessus du chemin. II ressort clal
rement de ces photographies qu’un automobiliste
approchant du virage ne manquerait pas pressentir
le risque que prCsente celui-ci, savoir qu’iL eat tout
simplement impossible de voir de I’ autre côté de la
courbe ce qui petit arriver en sens inverse. De plus,

[200212 R.C.S. HOUSEN C. NIKOLALSEN Lejuge Bastarache 311
by the inability to see what is approaching in the
opposite direction is somewhat heightened by the
fact that this road is used by farm operators. At trial,
the risk was described in the following terms by Mr.
Sparks, an engineer giving expert testimony:
if you can’t, if you can’t see far enough down the road
to, you know, if there’s somebody that’s coming around
the corner with a tractor and a cultivator and you can’t see
around the corner, then, you know, drivers would have a
fairly strong signal, in my ‘view, that due care and caution
would be required.
The expert testimony, relied on by the trial judge
does not support a finding that the portion of Snake
Hill Road on which the accident occurred would
pose a risk to a reasonable driver exercising ordinary
care. When asked at trial whether motorists, exercis
ing reasonable care, would enter the curve at a slow
speed because they could not see what was coming
around the corner, Mr. Werner agreed that he, him
self, drove the corner “at a slower speed” and that
it would be prudent for a driver to slow down given
the limited sight distance. Similarly, Mr. Anderson
admitted to, having taken the curve ‘at 40-45 ktnlh
the first time he drove it because he “didn’t want to
get into trouble with it’. When asked if the reason he
approached the curve at that speed was because he
could not see around it, he replied in the affirmative:
“[tjhat’s why I approached it the way I did’
Perhaps most tellingly, ML Nikolaisen himself
testified that he could not see if a vehicle was cQnting
in the opposite direction as he approached the curve,
The following exchange which occurred during
counsel’s cross-examination of Mr. Nikolaisen at
trial is instructive:
Q. . . . You told my learned friend, Mr. Logue, that your
view of the road was quite limited, that is correct?
The view ahead on the road is quite limited, is that
tight?
le danger que constitue l’incapacitd ‘de voir cc qui
arrive en sens inverse est d’une certaine mauière
exacerbd par le fain que le chemin est utilisd par
des exploitants agricoles. Au procès, ce risque a étd
décrit ainsi par M. Sparks, ingdnieur, qui tdmoignait
àtitred’expert:
[TRADucTI0N]. . . si vous ne pouvez pas voir, si VOUS ne
pouvez pan voir assez loin sur Ic chemin pow vous savez,
savoir Si quelqu’un arrive en sens inverse avec Un tracteur
tirant une herse et que vous ne pouvez voir, de l’autre
cate du virage, alors, vous savez, cela devrait envoyer un
message clair aux conducteurs, scion moi, que 1’attention
et la prudence s’imposent.
Le tdnioignage d’expert retenu par la juge de
premiere instance n’étaye pan sa conclusion que
Ia portion du chemin Snake Hill oia s’est produit
l’accident prdsente un risque pour un couducteur
raisonuable prenant des precautions normales.
Lorsqu’on lid a demandé Si un automobiliste pre
nant des precautions normales amorcerait le virage
a vitesse réduite dtant donné qu’il ne peut voir ce qui
l’attcnd au d&our du chernin, M. Werner a reconnu
que lui-même prend le virage [TRADUcn0N] a
vitesse rdduite >> et qu’il serait prudent que les con
ducteurs ralentissent en raison de la distance de visi
bilitd lirnitéc. Dc mCme, M. Anderson a admis avoir
pris le virage a 40-45 km/h la premiere fois qu’il est
passé par là, car il [TRADUCrION] >. Lorsqu’on
Iui a demandd s’il avait pris le virage a cette vitesse
parce qu’ii ne pouvait pan voir ce qui l’attendait, ii a
rdpondu par l’afflrmative : [TRADUCrION}

133
312 HOUSEN V. NIKOLAISEN Bastarache J. [2002] 2 S.C.R.
A. As in regards to travelling through the curves, yes,
that’s right, yeah.
Q. Yes. And you did not know what was coming as you
approached the curve, that is correct?
A. That’s correct, yes.
Q. There might be a vehicle around that curve coming
towards you or someone riding a horse on the road,
that is correct?
A. Or a tractor or a cultivator or something, that’s
right.
Q. Or a tractor or a cultivator. You know as a person
raised in rural Saskatchewan that all of those things
are possibilities, that is right?
A. That’s right, yeah, that is correct.
Nor do I accept the appellant’s submission that
the “dual nature” of the road had the effect of lull
ing drivers into taking the curve at an inappropri
ate speed. This theory rests on the assumption that
the motorists would drive the straight portions of
the road at speeds of up to 80 km/h, leaving them
unprepared to negotiate suddenly appearing curves.
Yet, while the default speed Jirnit on the road was
80 km/h, there was no evidence to suggest that a
reasonable driver would have driven any portion
of the road at that speed. While Mr. Werner testi
fied that a driver “would be permitted” to drive at
a maximum of 80 km/h, since this was the default
(not the posted) speed limit, he later acknowledged
that bladed trails in the province are not designed to
meet 80 km/h design criteria. I agree with the Court
ofAppeal that the evidence is that “Snake Hill Road
was self-evidently a dist road or bladed trail” and
that it “was obviously not designed to accommodate
travel at a general speed of 80 kilometres per hour”.
As I earlier remarked, the locality of the road and its
character and class must be considered when deter
mining whether the reasonable driver would be able
to navigate it safely.
R. Lorsqu’on se trouve dans les courbes, oui, c’est
exact.
Q. Oui. Et vous ne saviez pas cc gui s’en venait lorsque
vous approchiez du virage, eat-ce exact?
R. C’est exact, oui.
Q. U aurait Pu Y avoir un vdhicule venant dans votre
direction 1e l’autre côté de la courbe ou quelqu’un
se promenant a cheval sur le chemin, eat-ce exact?
R. Ou un tracteur, un cultivateur ou autre chose, c’est
vrai.
Q. Ou tin tracteur ou tin cultivateut Vous savez, puisque
vous avez grandi en milieu rural en Saskatchewan,
que toutes ces situations sont autant de possibilitds,
n’est-ce pas?
R. C’estvrai,oui.
Je ne retiens pas non plus l’argument de l’appe
lant portant que la

[2002] 2 R.C.S. NOUSEN C. N1KOLAISEN Lejuge Bastarache 313
Furthermore, the evidence at trial did not suggest
that drivers were somehow fooled by the so-called
“dual nature” of the road. The following exchange
between counsel for the respondent and Mt Werner
at trial is illustrative of how motorists would view
the road:
Q. Now, Mt Werner, would you not agree that the
change in the character of this road as you proceeded
from east to west was quite obvious?
A. It was straight, and then you came to a bill, and you
really didn’t know what might lie beyond the hill.
Q. That’s right. But I mean, the fact that the road went
from being straight and level to suddenly there was
a hill and you couldn’t see — you could see from the
point of the top of the bill that the road didn’t con
tinue in a straight line, couldn’t you?
A. Yes, you could, from the top of the bill, it’s a very
abrupt bill, yes.
Q. And as you proceeded down though the hill it
became quite obvious, did it not, that the character
of the road changed?
A. Yes, it changed, yes.
Q. Now you were faced with something other than a
straight road?
A. M’hm.Yes.
Q. Now you were on — and at some point along there
A. Yes.
the surface of the road changed, did it not?
Q. And, of course, the road was no longer, I use the
term built-up to refer to a road that has grade and it
has some drainage. As you proceeded from west to
east, you realized, you could see, it was obvious that
this was not longer a built-up road?
A. It was a road essentially that was cut out of the
topography and had no ditches, and there was an
abutment or shoulder right to the driving surface. It
was different than the first part.
Q. Yes. And all those differences were obvious, were
they not?
En outre, den dans la preuve présentée au proces
n’indiquait que les conducteurs avaient été trompes
de quelque façon par la soi-diant >
du chemin. L’échange suivant, enixe l’avocat de i’m
timde et M. Werner, illustre bien la facon dont les
automobilistes perçoivent le chemin:
[TRADUCTI0NJ
Q. Maintenant M. Werner, ire seriez-vous pas d’accord
pour dire que le changement dans la nature de ce
chemin lorsque vous rouliez d’est en ouest était très
evident?
R. On roulait en ligne droite, puis on descendait use
co)]ine, et on ne savait vraiment pan cc qui pouvait
se trouver del’ autre côtd de la colline.
Q. C’est vrai. Mais je veux dire, le fait que le chernin
suivait d’ abord un trace horizontal et en ligne droite
pour soudainement devenir ime colline et que vous
ire pouviez pas voir —
vous
pouviez voir du haut de
Ia colline que le chernin ire continuait pas en ligne
droite, n’est-ce pan?
R. Our, vous pouviez, du haut de l.a colline, c’est une
co]iine très abrupte, oui.
Q. Et au fur et a mesure que vous descendiez Ia colline
II devenait assez evident, n’est-ce pan, que la nature
du chemnin changeait?
R. Oui, ça.changeait, oui.
Q. Vous vous trouviez alors devant autre chose qu’uu
chemln en ligue droite?
R. M’hm. Oui.
Q. Vous étiez maintenant sur — et a un moment douse Ia
R. Oui.
surface du chemin changeait, n’est-ce pas?
Q. Et, Cvidexnment, Ic chemin n’était plus, j’utilise le
terme axnCnagd pour designer un chemin possddant
une. certaine dlCvation et qui est dais Une certaune
mesure drairid. Au fur et a mesure que vous roui.iez
d’ouest en est, vous constatiez, vous pouviez voir,
il dtait evident, qu’il ne s’agissait plus d’un chemin
amdnagd?
R. II s’agit essentiellement d’im chemin trace suivant la
topographic des lieux et sans fossés, at ii y avait un
accotement a drake du conducteur. C’Ctait diff&ent
de la portion prdcédente.
Q. Oui. lit toutes ces differences étaient dvidentes,
n’est-ce pan?
134

136
135
314 HOUSEN v. NIKOLAISEN Bastarache .1 [2002] 2 S.C.R.
A. Well, I —
they
were clear, satisfactorily clear to me,
y [Emphasis added.]
Although they may be compelling factors in other
cases, in this case the “dual nature” of the road, the
radius of the curve, the surface of the road, and the
lack of superelevation do not support the conclusion
of the trial judge. The question of how a reasonable
driver exercising ordinary care would approach this
road demands common sense. There was no neces
sity to post a sign in this case for the simple reason
that any reasonable driver would have reacted to
the presence of natural cues to slow down. The law
does not require a municipality to post signs warn
ing motorists of hazards that pose no real risk to a
prudent driver. To impose a duty on the municipal
ity to erect a sign in a case such as this is to alter the
character of the duty owed by a municipality to driv
ers. Municipalities are not required to post wantings
directed at drunk drivers and thereby deal with their
inability to react to the cues that alert the ordinary
driver to the presence of a hazard.
My colleagues assert that the trial judge properly
considered all aspects of the applicable legal test,
including whether the curve would pose a risk to the
reasonable driver exercising ordinary care. They say
that the thai judge did discuss, both explicitly and
implicitly, the conduct of an ordinary or reasonable
motorist approaching the curve. Secondly, they note
that she referred to the evidence of the experts, Mr.
Anderson and Mr. Werner, both of whom discussed
the conduct of an ordinary motorist in this situation.
Thirdly, the fact that the trialjudge apportioned neg
ligence to Nikolaisen indicates, in their view, that
she assessed his conduct against the standard of the
ordinary driver, and thus considered the conduct of
the latter (para. 40).
R. Bien, je — elles étaient évidentes, suffisamment evi
dentes your moi, oui. e su]ignej
Bien qu’ils puissent constituer des facteurs
concluants dans d’autres affaires, la nature
hybride>> du chernin, le rayon de courbure du
virage, le revêtement du chernin et l’absence d’éld
vation n’tayent pas en l’espece la conclusion de la
juge de premiere instance. Pour rdpondre ala ques
tion de savoir comment un conducteur raisonnable
prenant des precautions normales roulerait sur Ce
chernin, ii faut faire appel au bon sens. II n’etait
pas nécessaire d’installer un panneau de signali
sation en 1’ espèce, et ce pour la simple raison que
n’importe quel conducteur raisonnable aurait réagi
aux indices naturels l’invitant a ralentir. Le droit
n’oblige pas les municipalitds a installer des pan
neaux signalant aux automobilistes des dangers qui
ne font pas courir de risque veritable aux conduc
tears prudents. Iniposer a Ia municipalité l’obli
gation d’installer un panneau dans tin cas comme
celui qui nous occupe £quivaut a modifier la nature
de l’obligation qu’ont les municipalités envers lea
conducteurs. Les municipalitds ne sont pas tenues
d’aménager des panneaux d’avertissement i’m
tention des conducteurs en état d’ ébriétC et, ainsi,
de reméclier a leur incapacité de reagir aux indices
qui alertent le conducteur moyen de Ia presence
d’un danger.
Mes collègues affirment que la juge de premiere
instance a dilmeut pris en consideration tous lea
aspects du critère juridIque applicable, y coinpris la
question de savoir si la courbe prdsentait tin risque
pour le conducteur moyen qui prend des prticau
tions normales. Us disent que la juge de premiere
instance a effectivement exantiné, explicitement et
implicitement, la conduite de l’automobiliste moyen
ou raisonnable qui s’approche du virage. ils font
ensuite remarquer qu’ eile a fait état du témoignage
des experts MM. Anderson et Werner, qui out tous
deux analyse la condulte de l’automobiliste moyen
se trouvant dans cette situation. Enfm, le fait qu’elle
alt impute tine partie de la responsabilitti a M.
Nikolaisen indique, a leur avis, qu’elle a évalud sa
conduits au regard ala norme du conducteur moyen,
et qu’ elle a donc pris en compte la façon dont ce der
nier aurait conduit (par. 40).

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 315
I respectfully disagree that it is explicit in the
trialjudge’s reasons that she considered whether the
portion of the road on which the accident occurred
posed a risk to the ordinary driver exercising reason
able care. As I explained above, the fact that the trial
judge restated the legal test in the form of a conclu
sion in no way suggests that she turned her mind to
the issue of whether the ordinary driver would have
found the curve to be hazardous.
Nor do I agree that a discussion of the conduct
of an ordinary motorist in the situation was some
how “implicit” in the trial judge’s reasons. In my
view, it is highly problematic to presume that a trial
judge made factual findings on a particular issue
in the absence of any indication in the reasons as
to what those findings were. While a trial judge is
presumed to know the law, he or she cannot be pre
surned to have reached a factual conclusion without
some indication in the reasons that he or she did in
fact come to that conclusion, If the reviewing court
is willing to presume that a trial judge made certain
findings based on evidence in the record absent any
indication in the reasons that the trial judge actually
made those findings, then the reviewing court Is pre
cluded from finding that the trial judge misappre
hended or neglected evidence.
In my view, my colleagues have throughout their
reasons improperly presumed that the trial judge
reached certain factual findings based on the evi
dence despite the fact that those findings were not
expressed in her reasons. On the issue of whether
the curve presented a risk to the ordinary driver, my
colleagues note that “in relying on the evidence of
Mr. Anderson and Mr. Werner, the trial judge chose
not to base her decision on the conflicting evidence
of other witnesses” (para. 46). The problem with
this statement is that although the trial judge relied
on the evidence of Mt Anderson and Mr. Werner
to conclude that the portion of Snake Hill Road
on which the accident occurred was a hazard, it
is impossible from her reasons to discern what, if
En toute déférence, je ne crois pas qu’il ressorte 137
explicitement des motifs de Ia juge de premiere ins-
twice qu’elle s’est demandd si la portion du chemin
oü s’est produit l’accident constituait un risque pour
le conducteur raisonnable prenant des precautions
normales. Commeje l’ai expliqué précddemment, le
fait que la juge de premiere instance alt reformulé le
critèrejuridique sous forme de conclusion n’indique
aucunement qu’elle s’est demand6 si le conducteur
moyen aurait considéré Ia courbe comme dauge
reuse.
Je n’estime pas non plus que l’exameu de Ia
façon de conduire de l’automobiliste moyen dana
cette situation ressorte implicitement >> des motifs
de la juge de premiere instance. A mon avis, il est
très probldxnatique de prdsumer qu’un juge de pre
mière instance a tire des conclusions de fait a l’dgard
d’une question precise alors qu’il n’y a aucune Indi
cation dana ses motifs quant a la nature de ces con
clusions. Bien que le juge de premisre instance soit
censC connaitre le droit, on ne peut presumer qu’il a
tird a une conclusion factueile en 1’ absence d’indjca
tion dans ses motifs qu’il est effectivement arrivé a
cette conclusion. Si le tribunal de revision est prêt a
supposer que le juge de premiere instance a tire cer
tames conclusions, sur la foi de lapreuve figurant an
dossier, bien que den dans les motifs n’indique qu’il
a vraiment tire ces conclusions, alors le trIbunal de
revision ne saurait conclure que le juge de premiere
instance a mal interprété des éléments de preuve ou
a negligé d’en tenir compte.
A mon avis, tout au long de leurs motifs,
mes collègues ont a tort présumé que la juge de
premiere instance était arrivée a certaines con
clusions de fait fondées sur la preuve, malgré le.
fait que ces conclusions ne soient pas formulées
dans ses motifs. Quant a la question de savoir si
le virage présentait un risque pour le conducteur
moyen, mes collegues out fait remarquer qu’cc en
s’appuyant sur les térnoignages de MM. Anderson
et Werner, la juge de preniière instance a choisi
de ne pas fonder sa decision sur les ‘tCmoignages
coutradictoires rendus par d’autres tdmoins >> (par.
46). Le pr.oblème que pose cet Cnoncé est que,
même si lajuge de premiere instance s’est appuyCe
sur les tCmoignages de MM. Anderson et Werner
138
139

140
316 HOUSEN V. NIKOLAISEN Bastarache J [2002] 2 S.C.R.
any, evidence she relied on to reach the conclusion
that the curve presented a risk to the ordinary driver
exercising reasonable care. In the absence of any
indication that she considered this issue, I am not
willing to presume that she did.
My colleagues similarly presume findings of fact
when discussing the knowledge of the municipal
ity. On this issue, they reiterate that “it is open for
a trial judge to prefer some parts of the evidence
over others, and to re-assess the trial judge’s weigh
ing of the evidence, is, with respect, not within the
province of an appellate court” (para. 62). At para.
64 of their reasons, my colleagues review the find
ings of the trial judge on the issue of knowledge
and conclude that the trial judge ‘drew the infer
ence that the municipality should have been put on
notice and investigated Snake Hill Road, in which
case it would have become aware of the hazard in
question”. I think that it is improper to conclude
that the trial judge made a finding that the munici
pality’s system of road inspection was inadequate in
the absence of any indication in her reasons that she
reached this conclusion. My colleagues further sug
gest that the trial judge did not impute knowledge
to the municipality on the basis of the occurrence of
prior accidents on Snake Hill Road (para. 65). They
even state that it was not necessary for the trialjudge
to rely on the accidents in order to satisfy s. 192(3)
(pam. 67). This, in my view, is a reinterpretation of
the trial judge’s findings that stands in direct con
tradiction to the reasons that were provided by her.
The trial judge discusses other factors pertaining to
knowledgek to heighten the significance that she
attributes to the fact that accidents had previously
occurred on other portions of the road (at para. 90):
pour conclure que Ia portion du chentin Snake Hill
oi s’est produit 1’ accident constituait tin danger,
il est impossible, a partir de ses motifs, de dire si
elle s’est appuyée sur un témoignage —
et,
dans
1’ affirmative, sur lequel de ceux-ci pour con
clure que la courbe présentait an risque pour le
conducteur moyen qui prend des precautions rai
sonnables. En l’absence de toute indication que la
juge de premiere instance s’ est penchée sum cette
question, je ne suis pas dispose a presumer qu’eJie
l’afait.
De mérne, mes collCgues supposent l’ex4stence
de conclusions factuelles dans leur examen de la
question de la connaissauce incombant a la mimi
cipalité. Sur cc point, us rCitèrent que < le juge de
premiere instance peut prCférer certaines parties
de Ia preuve a d’autres, et, en toute déférence, il
n’appartient pas au tribunal d’appel de procéder
a nouveau a l’appréciation de la preuve, tâche
déjà accomplie par le juge de procès>> (par. 62).
Au paragraphe 64 de leurs motifs, mes collègues
exaininent les conclusions de la juge de preniière
instance sum la question de la connaissance et con
cluent qu’elle >. Je ne crois pas qu’on
puisse àjuste titre conclure que lajuge de premiere
instance est arrIvée a la conclusion que le système
d’inspection routière de la municipalitC Ctait ma
déquat, alors que rien dans ses motifs n’indique
• qu’dc a tire cette conclusion. Mes collègues esti
ment en outre que la juge de premiere instance n’a
pas preté a la municipalirC Ia connaissance requise
sum la base des accidents survenus antérieurement
sur le chemin Snake Hill (par. 65). Us disent même
qu’il n’Ctait pas nécessaire de s’appuyer stir ces
accidents pour satisfaire aux exigences dii par.
192(3) (par. 67). A mon avis, ils donnent aces con
clusions une nouvelle interpretation, qui contredit
directement les motifs qu’elle a exposés. La juge
de premiere instance examine d’ autres facteurs qui
touchent a la connaissance requise, uniguement
pour souligner l’importance qu’eile accorde au fait
que des accidents sont survenus antérieurement
ailleurs sur le chemin (au par. 90):

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 317
If the R.M. did not have actual knowledge of the
danger inherent in this portion of Snake Hill Road, it
should have known. While four accidents in 12 yearspy
not in itself be significant, it takes on more significance
given the close proximity of three of these accidents, the
relatively low volume oftraffic, the fact that there are per
manent residences on the road and the fact that the road is
frequented by young and perhaps less experienced driv
ers. [Emphasis added.]
My colleagues refer to the decision of Van de
Perre it Edwards, [2001] 2 S.C.R. 1014,2001 SCC
60, in which I stated that “an omission [in the trial
judge’s reasons] is only a material error ifit gives rise
to the reasoned belief that the trial judge must have
forgotten, ignored or misconceived the evidence in
a way that affected his conclusion” (para. 15). This
case is however distinguishable from Van de Perre.
In Van de Perre, the appellate court improperly sub
stituted its own findings of fact for the trial judge’s
clear factual conclusions on the basis that the trial
judge had not considered all of the evidence. By
contrast, in this âase my colleagues assert that this
Court should not interfere with the “findings of the
trial judge” even where no findings were made and
where such findings must be presumed from the
evidence. The trial judge’s failure in this case to
reach any conclusion on whether the ordinary driver
would have found the portion of the road on which
the accident occurred hazardous, in my view, gives
rise to the reasoned belief that she ignored the evi
dence on the issue in .a way that affected her conclu
sion.
Finally, I do not agree that the trial judge’s con
clusion that Mr. Nikolaisen was negligent equates to
an assessment of whether a motorist exercising ordi
nary care would have found the curve on which the
accident occurred to be hazardous. it is clear from
the trialjudge’s reasons that she made a factual find
ing that the curve could be driven safely at 60 km)h
in dry conditions and 50 kmlh in wet conditions
and that Mr. Nikolaisen approached the curve at an
[TRADucrI0N] Si la M.R. ne coimaissait pas concrè.
tement le danger intrinsèque que comporte cette portion
dii chemin Snake Hill, elk aurait dii le connattre. Le fait
gue guatre accidents se soient produits en 12 axis n’est
peut-être pas significatif en soi, mais il le devient si
l’on considère gue trois de ces accidents sont survenus
a proximité, qu’il s’agit d’une route a debit de circula
tion relativement faible, que des residences permanentes
sont situées en bordure de celle-ci et que cc chemin est
fréquentC par des conducteurs jeunes et peut-être mains
expCximentés. [Ic souuignej
Mes collegues citent l’arrflt Van de Perre c.
Edwards, [2001] 2 R.CS. 1014, 2001 CSC 60,
dans lequel j’ai dit, au par. 15, qu’.c< une omission
[dans les motifs du juge de premiere instance] ne
constitue une erreur importante que si cUe donne
lieu a la conviction rationnelle que le juge de pre
mière instance doit avoir oublid, negligé d’examiner
ou mal interprdtd la preuve de telle manière que sa
conclusion en a été affectCe >>. Cependant, le prd
sent pourvoi peut être distingud de l’affaire Van de
Perre. Dans cette affaire, la Cour d’appel avait irrd
gulièrement substitué ses propres conclusions de
fait aux conclusions factuelles évidentes dii juge
de premiere instance, au motif que celui-ci 11’ avail
pas pris en compte tous les elements de preuve. Par
coatraste, dans le present pourvoi, mes cbflCgues
affirment que notre Cour ne doit pas modifier les
conclusions de la juge de premiere instance >>,
même si aucune conclusion n’a dté tirde et s’il faut
supposer leur existence a partir de la preuve. En
l’espèce, je suis d’avis que l’omission de lajuge de
premiere instance de tirer quelque conclusion que
ce soil quant ala question de savoir si le conducteur
moyen aurait considCré conme dangereux le tron
con du chemin oil s’est produit l’accident fait naitre
la conviction rationnelle que, sur cc point, elle a
negligé d’examiner la preuve de telle manière que
sa conclusion en a été affectée.
Enfin, je ne peux souscrire a [‘opinion que Ia
conclusion de la juge de premiere instance scIon
laquelle M. Nikolaisen a fait preuve de negligence
vaut exanien de Ia question de savoir si 1’ automobi
liste moyen prenant des precautions normales aurait
estimé que la courbe oil s’est produit l’accident Ctait
dangereuse. 11 ressort clairement des motifs de la
juge de premiCre instance qu’ cUe a tird les conclu
sions de fail suivantes : il dtait possible de prendre
141
142

143
144
318 HOUSEN v. NIKOLAISEN Bastarache J [2002] 2 S.C.R.
excessive speed. As earlier stated, what she failed to
consider was whether the ordinary driver exercising
reasonable care would have approached the curve
at a speed at which it could be safely negotiated, or,
stated differently, whether the curve posed a real
danger to the ordinary driver.
B. Did the Trial Judge Err in Finding that the
RespondentMunicipality Knew or Should Have
Known of the Danger Posed by the Municipal
Road?
Pursuant to s. 192(3) of The Rural Municipality
Act, 1989, fault is not to be imputed to the munici
pality in the absence of proof by the plaintiff that
the municipality “knew or should have known of the
disrepair”.
The trial judge made no finding that the respond
ent municipality had actual knowledge of the
alleged state of disrepair, but rather imputed knowl
edge to the respondent on the basis that it should
have known of the danger. This is apparent in her
findings on knowledge at paras. 89-9 1 of her rea
sons:
Breach of the statutoiy duty of care imposed by sec
tion 192 of the Rural Municipality Act, supra, cannot be
imputed to the R.M. unless it knew of or ought to have
known of the state of disrepair on Snake Hill Road.
Between 1978 and 1990 there were four accidents on
Snake Hill Road. Three of these accidents occurred in
the same vicinity as the Nikolaisen rollover. The precise
location of the fourth accident is unknown. While at least
three of these accidents occurred when motorists where
travelling in the opposite direction of the Nikolaisen
vehicle, they occurred on that portion of Snake Hill Road
which is the most dangerous — where the road begins to
curve, rather than where it is generally straight and flat.
At least two of these accidents were repärted to authori
ties.
if the R.M. did not have actual knowledge of the
danger inherent in this portion of Snake Hill Road, it
should have known. While four accidents in 12 years may
not in itself be significant, it takes on more significance
le virage en sdcuritd a 60 krnlh a l’heure sur chaus
see sCche et a 50 lanlh sur chaussde humide, et M.
Nilcolaisen s’est approchd du virage a une vitesse
excessive. Conmie je 1’ ai indiqud plus tot, cUe a
omis de se demander si le conducteur màyen qui
prend des precautions normales se serait appro
chd du virage a une vitesse qni liii aurait permis
de le prendre en sdcuritd ou, autrement dir, si la
courbe prdsentait un danger reel pour le conducteur
moyen.
B. La juge de premiere instance a-t-elle commis
une erreur en concluant que la municipalité
intimJe connaissait ou aurait dâ connaItre le
danger que présentaitle chemin municipal?
Conformdment au par. 192(3) de la Rural
Municipality Act, 1989, aucune faute n’est hnputee
a la municipalitd a moms que le demandeur n’éta
blisse que celle-ci cc connaissait ou aurait dii connal
tre le mauvais dtat du chemin >>.
Lajuge de premiere instance n’a pas couclu que
la municipalitd inthnde connaissait concrètement
le mauvais dtat dans lequel se trouvait, pretend-on,
le cheunin, mais elle mi a plutôt prêtd cette con
naissance pour le motif qu’elle aurait dii connaItre
l’existence du danger. C’est cc qui ressort de sea
conclusions a cet dgard, aux par. 89 a 91 de ses
motifs:
[TRADUCTION] On ne pent reprocher a la municipa
litd rurale d’avoir manqué a l’obligation légale de dili
gence imposde par l’art. 192 de la loi intitulde la Rural
Municipality Act, prdcitde, que si la municipalitd con
naissait ou aurait d connattre le mauvais état du chernin
Snake Hill. De 1978 a 1990, quatre accidents sont surve
nus sur cc cheunin. Trois de ces accidents out en lieu dans
le même secteur que ccliii oii le vdhicule de Nikolaisen
a fait un tonneau. On ne connaft pas le lieu précis du
quatrième accident. Bien que, dans an moire trois de ces
accidents, les automobffistes aient circuld en sens inverse
du ve’hicule de Nikolaisen, les accidents se sont produits
dans Ia partie Ia plus dangereuse du chemin Snake Hill —
là cii cornineucent les courbes, et non dare Ia panic cii Ic
chemin est gdndralement droit et plat. Au nuoins deux de
ces accidents out dtd signalés aux autoritds.
Si la M.R. ne counaissait pas concrètement Ic danger
intrinsègue gue comporte cette portion du chezuin Snake
Hill. elle aurait d le connaltre. Le fait que quatre acci
dents se soient produits en 12 are n’est peU.t-être pas

[2002) 2 R.C.S. HOUSEN c. NIKOLAISEN Lejuge Bastarache 319
given the close proximity of three of these accidents, the
relatively low volume of traffic, the fact that there are
permanent residences on the road and the fact tha the
road is frequented by young and perhaps less experienced
drivers. I am not satisfied that the R.M. has established
that in these circumstances it took reasonable steps to
prevent this state of disrepair on Snake Hill Road from
continuing.
I find that by failing to erect and maintain a warning
and regulatory sign on this portion of Snake Hill Road the
R.M. has not me the standard of care which is reasonable
in the circumstances. Accordingly, it is in breach of its
duty of care to motorists generally, and to Mr. Housen in
particular. [Emphasis added.]
Whether the municipality should have known
of the disrepair (here, the risk posed in the absence
of a sign) involves both questions of law and ques
tions of fact. As a matter of law, the trial judge
must approach the question of whether knowledge
should be imputed to the municipality with regard
to the duties of the ordinary, reasonable and pru
dent municipal councillor (Ryan v. Victoria (City),
[19991 1 S.C.R. 201, at para. 28). The question is
then answered through the trial judge’s assessment
of the facts of the case.
• I find that the trial judge made both errors of law
and palpable and overriding errors of fact in deter-
• nhlning that the respondent municipality should have
known of the alleged state of disrepair. She erred in
law by approaching the question ofknowledge from
the perspective of an expert rather than from the per.
• spective of a prudent municipal counciflor. She also
erred in law by failing to appreciate that the onus of
proving that the municipality knew or should have
known of the alleged disrepair remained on the
plaintiff throughout. The trial judge clearly erred in
fact by drawing the unreasonable inference that the
respondent municipality should have known that the
portion of the road on which the accident occurred
was dangerous from evidence that accidents had
occurred on other parts of Snake Hill Road.
significatif en soi, mais II le devient si l’on considère que
trois de ces accidents soot survenus a proximitd, qu’il
s’agit d’une route a debit de circulation relativement
faible, que des residences permanentes sont situdes en
bordure de celle-ci et que le chemin eat frdquentd par des
conducteurs jeunes et peut-être moms experimentds. Jo
ne suis pas convaincue gue la M.R. a Ctabli avoir, dana ces
circonstances, pris des mesures raisonnables pour rome
dier au mauvais Ctat du cheinin Snake Hill.
J’estime que, en omettant d’installer et de maiutenir
un panneau d’avertissement ou de signalisation dana
cotta partie du cheniin Snake Hill, la M.R. n’a pas saris
fait a la nomie de diligence qui est raisonnable dana les
circonstances. Par consequent, elle ne s’est pas acquittde
do son obligation de diligence a l’dgard des automobilis
tes en gdndral eta l’égard deM. Housen en particulier. (Jo
soulignej
La question de savoir si la municipalitd aurait
dii connaltre le mauvais état du chemin (en l’occur
rence, le risque que prdsentait 1’ absence de signali
sation) soulève ala fois des questions de droit et des
questions de fait. Sur Ic plan juridique, le juge de
premiere instance doit se demander s’il y a lieu de
presumer que Ia naunicipalitd connaissait ce fait, au
regard des obligations qul incombent au conseifler
municipal ordinaire, raisonnable et prudent (Ryan
c. Victoria (Wile), [19991 1 R.C.S. 201, par. 28). Le
juge de premiere instance répond ensuite a la ques
tion en appreciantlea faits del’espèce dont il estsaisi.
J’estime que la juge de premiere instance a
comnmis et des erreurs de droit et des erreurs de fait
manifestes et dominantes en statuant que Ia muni
cipalitd intimée aurait dii connaitre le mauvais dtat
dana lequel se trouvait, pretend-on, Ic chemin. Bile
a commis une erreur de droit lorsqu’elie a examine
la question do Ia counaissance du point de vue du
spdcialiste plutôt que du point de vue du conseiller
municipal prudent. Bile a commis ime autre erreur
de droit en ne reconnaissant pas que le fardeau de
prouver que la municipalitd connaissait on aurait
dii connaltre le mauvais dtat du chemin ne cessait
jamais d’incomber au demandeur. La juge de pre
mihre instance a clairement commnis une erreur de
•fait en infdrant ddraisonnablemnent que la municipa
litd intimée aurait dii savoir que la partie du chemin
ol 1’ accident s’est produit était dangerense, comnpte
tenu de la preuve que des accidents avaient eu lieu
ailleurs sur le chemin Snake Hill.
145
146

147
148
320 HOUSEN v. NIKOLAISEN Bastarache J. [20021 2 S.C.R.
The trial judge’s failure to determine whether
knowledge should be imputed to the municipality
from the perspective of what a prudent municipal
councillor should have known is implicit in her
reasons. The respondent could not be held, for the
purposes of establishing knowledge under thestatu
tory test, to the standard of an expert analysing the
curve after the accident. Yet this is precisely what
the trial judge did. She relied on the expert evidence
of Mr. Anderson and Mr. Werner to reach the con
clusion that the curve presented a hidden hazard.
She also implicitly accepted that the risk posed by
the curve was not one that would be readily appar
ent to a lay person. This is evident in the portion of
her judgment where she accepts as a valid excuse
for not filing a timely claim against the respond
ent the appellant counsel’s explanation that he did
not believe the respondent to be at fault until expert
opinions were obtained. The trialjudge stated in this
regard: “[ijt was only later when expert opinions
were obtained that serious consideration was given
to the prospect that the nature of Snake Hill Road
might be a factor contributing to the accident” (para.
64). Her failure to consider the risk to the prudent
driver is also apparent when one considers that she
ignored the evidence concerning the way in which
the two experts themselves had approached the dan
gerous curve (see para. 54 above).
Had the thai judge considered the question
of whether the municipality should have known
of the alleged disrepair from the perspective of
the prudent municipal councillor, she would nec
essarily have reached a different conclusion.
There was no evidence that the road conditions
which existed posed a risk that the respondent
should have been aware of. The respondent had no
particular reason to inspect that segment of the
road for the presence of hazards. It had not
received any coniplaints from motorists respeöt
ing the absence of signs on the road, the lack of
superelevation on the curves, or the presence of
II ressort implicitement des motifs de lajuge de
premiere instance qu’elle n’a pas ddcidé s’il fallait
prêter a la municipalité la connaissance requise en
considérant cette question du point de vue du con
seiller municipal prudent. Pour trancher la ques
tion de la connaissance requise suivant le critère
prévu par la loi, l’intimée ne pouvait être tenue
aux mêmes normes qu’un spécialiste analysant
la courbe après l’accident. Pourtant, c’est exacte
ment ce qu’ a fait la juge de premiere instance. Elle
s’est fondée sur les témoignages d’expert donnés
par MM. Anderson et Werner pour conclure que
la courbe présentait un danger cache. Elle a Cgale
ment reconnu implicitement que le risque visé par
la courbe n’était pas un risque facilement dCcela
ble par un profane. Cela ressort clairement du pas
sage de son jugement oü elle considère comme
une excuse valable pour justifier le dépôt tardif
de 1’ action contre l’intimée 1’ explication de l’avo
cat de l’appelant selon laquelle il ne croyalt pas
que l’intimée était clans son tort jusqu’à ce qu’il
prenne connaissance des opinions des experts. La
juge de premiere instance a dit ceci a cet égard
[TRADUCTION] c< [cje n’est que plus tard, après
avoir obtenu l’opinion des experts, que la possi
bilitC que la nature du chemin Snake Hill puisse
avoir Cté un facteur ayant contribué a i’ accident a
été sCrieusement envisagée>> (par. 64). Son omis
sion de s’interroger sur le risque que courrait is
conducteur prudent apparait elle aussi clairement,
lorsqu’on considère qu’elle n’a pas tenu compte dc
la preuve concernant la façon dont les deux experts
avaient eux-mêmes pris le virage dangereux (voir
le par. 54 qui precede).
Si la juge de premiere instance avait rCpondu
a la question de savoir si la municipalité aurait dü
connaltre le mauvais Ctat dans lequel se trouvait,
pretend-on, le chemin en se plaçant du point de vue
du conseiller municipal prudent, cUe serait néces
sairement arrivCe anne conclusion différente. II n’y
avait aucune preuve Ctablissant que le danger exis
tant crCait un risque que l’intimée aurait d connal
tre. Cette dernière n’avait aucune raison particuiière
d’aller inspecter cette portion du chemin pour voir
s’il y existait des dangers. Elle n’avait reçu aucune
plainte d’automobilistes relativernent a i’ absence
de signalisation, a l’absence de sure’lévation des

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 321
trees and vegetation which grew up along the sides
of the road.
In addition, the question of the respondent’s
knowledge is linked inextricably to the standard of
care. A municipality can only be expected to have
knowledge of those hazards which pose a risk to
the reasonable driver exercising ordinary care, since
these are the only hazards for which there is a duty•
to repair. The trial judge should not have expected
the respondent in this case to have knowledge of
the road conditions that existed at the site of the
Nikolaisen rollover since that road condition simply
did not pose a risk to the reasonable driver. In addi
tion to the evidence that was discussed above in the
context of the standard of care, this conclusion is
supported by the testimony of the several lay wit
nesses that testified at trial. Craig Thiel, a resident
on the road, testified that he was not aware that
Snake Hill Road had a reputation of being a danger
ous road, and that he himself had never experienced
difficulty with the portion of the road on which the
accident occurred. His wife, Toby,. also testified that
she had experienced no problems with the road.
The trialjudge also clearly erred in fact by imput
ing knowledge to the municipality on the basis of
the four accidents that had previously occurred on
Snake Hill Road. While her factual findings regard
ing the accidents themselves have a sound basis in
the evidence, these findings simply do not support
her conclusion that a prudent municipal council
br ought to have known that a risk existed for the
normal prudent driver. As such, the trial judge erred
in drawing an unreasonable inference from the
evidence that was before her. As stated above, the
standard of review for inferences of fact is, above
all, one of reasonableness. This is reflected in the
following passage from Joseph Brant Memorial
Hospital v. Koziol, [1978] 1 S.C.R. 491, at pp. 503-
4:
“it is a well-known principle that appellate tribunals
should not disturb findings of fact made by a trial judge
courbes ouà Ia prsence d’arbres et de végtation en
bordure du chemin.
En outre, la question de la connaissance do i’m
time est intimement lie a celle de la norme de
diligence. Une municipalit est uniquement censde
avoir connaissance des dangers qui presentent tin
risque pour le conducteur raisonnable prenant des
precautions normales, puisqu’il s’agt des seals dan
gers a l’égard desquels existe tine obligation d’en
iretien. En l’espece, la juge do premiere instance
n’aurait pas dfl attendre de l’intimée qu’elle con
naisse le danger qui existait a l’endroit ott le véhi
cule de M. Nikolaisen a fait an tonneau, puisque ce
danger ne présentait tout simplement pas do risque
pour le conducteur raisonnable. Outre los elements
de preuve examines précédemment relativement
a la norme de diligence, los tCmoignages de plu
sieurs témoins ordinaires qul ont déposC an procès
Ctayent cette conclusion. Craig Thel, qui habite be
long de ce chenun,, a térnoigné qu’il ne savait pas
que le cheniin Snake Hill avait la reputation d’être
dangereux et qu’il 11’ avait lui-même jamaIs éprouvé
de difficuité a conduire a l’endroit du chemin ott est
survenu l’accident. Sa conjointe, Toby, a également
cit ne pas avoir connu de problCme sur cc chemmn.
La juge do premiere instance a clairement
commis une autre erreur de fait en présumant, sur
la foi des qualre accidents survenus auparavant stir
le chemin Snake Hill, que la municipalité cormais
salt l’existence du danger. Bien que sos conclusions
de fait relativexuent aux accidents eux-mêmes soient
solidement étayées par la preuve, elles n’appuient
tout simplement pas sa conclusion qu’un conseifler
municipal prudent aurait dfl savoir qu’il existait tin
risque pour le couducteur prudent. En consequence,
la juge de premiere instance a fait erreur en tirant
tine inference dCraisonnable de Ia preuve qui lul
était soumise. Cornme il a Cté indiquC plus tot, in
norme de contrôle applicable aux inferences do fait
est, d’ abord et avant tout, cole do Ia d&ision ral
sonnable. Les propos suivants du juge Spence clans
l’arrêt Joseph Brant Memorial Hospital c. Koziol,
[1978] 1 R.C.S. 491, p.. 503-504, illustrent bien ce
principe:

151
152
153
322 HOUSEN V. NtKOLAISEN Bastarache J. [2002) 2 S.C.R.
if there were credible evidence before him upon which
he could reasonably base his conclusion”. [Emphasis
added.]
As I stated above, there was no evidence to sug
gest that the respondent had actual knowledge that
accidents bad previously occurred on Snake Hill
Road. To the contrary, Mr. Danger, the admInistrator
of the municipality, testified that the first he heard of
the accidents was at the trial.
Implicit in the trial judge’s reasons, then, was
the expectation that the municipality should have
known about the accidents through an accidentreporting
system. The appellant put forward that
argument explicitly before this Court, placing sig
nificant emphasis on the fact that respondent “has
no regularized approach to gathering this informa
tion, whether from councillors or otherwise”. The
argument suggests that, had the municipality estab
lished a formal system to find out whether accidents
had occurred on a given road, it would have known
that accidents had occurred on Snake Hill Road and
would have taken the appropriate corrective action
to ensure that the road was safe for travellers.
I find the above argument to be flawed in two
important respects. First, the argument that the other
accidents on Snake Hill Road were relevant in this
case is based on the assumption that there was an
obligation on the respondent municipality to have
a ‘regularized” accident-reporting system, and that
the informal system that was in place was somehow
deficient. Ta my view, the appellant did not meet its
onus to show that the system relied on by the munic
ipality to discharge its obligations under s. 192 of
the The Rural Municipality Ac4 1989 was deficient.
The evidence shows that, prior to 1988, there was no
formal system of accident reporting in place. There
was, nonetheless, an informal system whereby the
municipal counciflors were responsible for find
ing out if there were road hazards. Information that
hazards existed came to the attention of the council
lors via complaints, and from their own familiarity
de fait du juge de premiere instance, s’il existait des
tdmoignages dignes de foi sur lesguels Ic juge pouvait
raisonnablement fonder ses conclusions >>. [Je souli
gne.J
Coinme je l’ai mentionnd prdcddemment, il n’y
avait aucune preuve indiquant que l’intimde savait
concrètement que d’autres accidents dtaient surve
nus auparavant stir le chemin Snake Hill. Au con
traire, M. Danger, l’administrateur de la munjcj
palitd, a tdmoigné qu’il avait entendu parier.de ces
accidents pour la premiere fols au proces.
Par consequent, ii ressort implicitement des
motifs de lajuge de premiere instance que la muni
cipalitd aurait censémejit d connaitre l’exi.stence
des accidents grace a an système d’information en
la matière. L’ appelant a expressément plaidé cet
argument devant notre Cour, insistant fortement sur
le fait que I’intimée [TRADUCF1ONJ >. Suivant cet argument, on
pretend que, si la municipaiitd avait établi un sys
tème officiel lui permettant de savoir si des acci
dents sont survenus stir une route donnée, cUe aurait
su que des accidents s’dtaient produits sur le chemin
Snake Hill et cUe aurait pris les mesures correctives
appropriées pour faire en sorte que le chemin soit
sécmitaire pour lea usagers.
J’estime que l’argument susmentionné prdseute
deux lacunes importantes. Preniièrement, l’argu
ment scion lequel les autres accidents survenus stir
Ic chernin Snake Hill étaient pertinents en l’espèce
repose sur la prdsomptiou que la municipaiité lad
mde avait l’obligation d’avoir un système > d’information sur les accidents, et que le sys
tème informel en place Ctait d’une certaine maniCre
deficient. A mon avis, l’appelant ne s’est pas
acquitté du fardeau qui lui incombait de démontrer
que le système sur lequel la municipalité se fondait
pour remplir ses obligations au titre de 1’ art. 192
de la Rural Municipality Act, 1989, était deficient.
La preuve établit que, avant 1988, II n’existaitpas
de système officiel d’information sir les accidents.
U existait néanmoins, un système informel darts le
cadre duquel lea conseillers municipaux dtaient
charges de s’enqudrir de l’existeuce de dangers

[2002] 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 323
with the roads within the township under their juris
diction. The trial judge made a palpable error in
finding that this informal system was deficient in
the absence of any evidence of the practice of other
municipalities at the time that the accidents occurred
and what might have been a. reasonable system, par
ticularly given the fact that the rural municipality in
question had only six councillors. There is no evi
dence that a rural municipality of this type requires
the sort of sophisticated information-gathering pro
cess that may be required in a city, where accidents
occur with greater frequency and where it is less
likely that word of mouth will suffice to bring haz
ards to the attention of the councillors.
The respondent municipality now has a more
formalized system of accident reporting. Since
1988, Saskatchewan Highways and Transportation
annually provides the municipalities with a listing
of all motor vehicle accidents which occur within
the municipality and which are reported to the
police. While I agree that this system may provide
the municipality with a better chance of locating
hazards in some circumstances, I do not accept that
the adoption of this system is relevant on the facts
of this case. Only one accident, which occurred in
1990, was reported to the respondent under this
system. The appellant adduced no evidence to sug
gest that this accident occurred at the same loca
tion as the Nikolaisen rollover, or that this accident
occurred as a result of the conditions of the road
rather than the negligence of the driver.
Secondly, and perhaps more importantly, it was
simply illogiàal for the trial judge to infer from the
fact of the earlier accidents that the respondent
should have known that the site of the Nikolaisen
rollover posed a risk to prudent drivers. The three
-accidents, which took place in 1978, 1985, and
1987, occurred on different curves, while the
vehicles involved were proceeding in the opposite
sur lea routes. Les conseillers étaient informs
de l’existence de dangers par suite des plaintes
qu’iis recevaient et par leur propre experience
des routes situes dana les cantons qu’ils repr
sentalent. La juge de premiere instance a cominis
une erreur manifeste en concluant que ce système
informel était deficient, alors qu’aucune preuve
n’indiquait queues étaient lea pratiques suivies par
d’autres municipalités a cet Cgard au moment des
accidents, ni n’expliquait en quoi aurait consistt un
système raisonnable, compte tenu particulièrement
du fait que la muuicipaiitd rurale concernée ne
comptait que six conseillers. llu’y a aucune preuve
indiquant qu’une municipalité rurale de ce genre
a besoin du genre de mécanisine e’laboré de col
lecte de reuseignements dont pout avoir besoin une
grande yule, cit les accidents sont plus frequents et
oü il est peu probable que le bouche a oreille soit
sufüsant pour porter les dangers a l’attention des
conseillers.
La municipalitC intimee possède maintenant un
système plus officiel d’information sur les acci
dents. Depuis 1988, en effet, le ministère de la
Voirie et du Transport de la Saskatchewan commu
nique annuellement a chaque municipalitC la liste
de tous les accidents d’automobile survenus sur
son territoire et signalCs aux policiers. Bien que ce
système puisse, j’en conviens, pernlettre aux muni
cipalitCs de mieux repérer lea dangers dans certai
nes circonstances, je ne crois pas que son adoption
soit pertinente eu Cgard aux faits de l’espCce. Un
seul accident, survenu en 1990, a été signale a i’m
timée par le truchement de ce système. L’ appelant
n’ a produit aucun element de preuve indiquant que
cet accident eat survenu au même endroit que celui
ol le ve’bicule de M. Nikolaisen a fait un tonneau,
ou qu’il était attribuable a 1’Ctat de la route plutôt
qu’ ala negligence du conducteur.
Deuxièmement, element peut-être plus impor-
tant encore, il était tout simplement illogique
pour la juge de premiere instance d’infCrer de
1’ existence des accidents ant&ienrs que l’intimée
aurait dEl savoir que l’endroit oü le vehicule de M.
Nikolaisen a fait un tonneau presentait un risque
pour les conducteurs prudeuts. Les trois acci
dents — qul sont survenus en 1978, 1985 et 1987
154
155

156
157
324 HOUSEN V. NIKOLAISEN Bastarache J. [20021 2 S.C.R.
direction. The accidents of 1978 and 1987 occurred
on the first right-turning curve in the road with the
drivers travelling westbound, at the bottom of the
bill. The accident in 1985 took place on the next
curve in the road with the driver also travelling
westbound, again on a different curve from the one
where the Nikolaisen rollover took place. If any
thing, these accidents signal that the municipality
should have been concerned with the curves that
were, when travelling westbound, to the east of the
site of the Nikolaisen rollover. The evidence dis
closed no accidents that had occurred at the pre
cise location of the accident that is the subject of
this case.
Furthermore, the mere occurrence of an accident
does not in and of itself indicate a duty to post a
sign. In many cases, accidents happen not because
of the conditions of the road, but rather because
of the negligence of the driver, illustrative in this
regard is Mi’. Agrey’s accident on Snake Hill Road
in 1978. Mr. Agrey testified that, just. prior to the
accident, he had turned his attention away from the
road to talk to one of the passengers in the vehicle.
Another passenger shouted to him to “look out”, but
by the time he was alerted it was too late to properly
navigate the turn. Mr. Agrey was charged and fined
for his carelessness. As was discussed in the context
of the standard of care, a municipality is not obli
gated to make safe the roads for all drivers, regard
less of the care and attention that they are exercising
when driving. It need only keep roads in such a state
of repair as will allow a reasonable driver exercising
ordinary care to drive with safety.
In addition to the substantial errors discussed
above, I would alao note that, in my view, the trial
judge was inattentive to the onus of proof on this
issue. When reviewing the evidence pertaining to
other accidents on Snake Hill Road, the trial judge
remarked, at para. 31: “Cst. Forbes does not recall
— se
sont produits dans des courbes diffrentes, et
les véhicules concernés circulaient en sens inverse.
L’accident de 1978 et celui de 1987 ont eu lieu dans
le premier virage a droite au pied de la colline, les
automobilistes roulant alors en direction ouest.
L’accident de 1985 s’est produit clans la deuxième
courbe, toujours en direction Quest, encore une
fois dans une courbe différente de celle oii le véhi
cule de M. Nikolaisen a fait un tonneau. Si ces
accidents indiquent quoi que ce soft, c’est plutôt
que la municipaiité aurait dG se préoccuper des
courbes qui, pour les véhicules circulant en direc
tion Quest, se trouvent a l’est de l’endroit oii le
véhicule de M. Nikolaisen a fait un tonueau. La
preuve n’a révélé aucun accident qui se serait pro
duit a l’endroit précis oi est survenu l’accident qui
nous intéresse.
Qui plus est, le simple fait qu’un accident se
produise n’emporte pas en soi l’obligation d’ins
taller un panneau signalisateur. Dans bien des cas,
les accidents surviennent non pas a cause de l’état
de la route, mais plutôt a cause de la negligence
du conducteur. Un bon exemple de cela est l’ac
cident dont a été victime M. Agrey sur le chemin
Snake Hill en 1978. Ce dernier a tCmoignC que,
juste avant 1’ accident, it avait quitté des yeux la
route pour parler a l’un des passagers du véhi
cule. Un autre passager lui a criC do faire atten
tion, mais il était dejà. trop tard pour bien exCcu
ter le virage. Accuse de conduite imprudente, M.
Agrey a été dCclarC coupable et condamné a une
amende. Comme on l’a vu plus tot, dans le contexte
de la norme de diligence, une municipalité n’a pas
1’ obligation de rendre les chemins sécuritaires pour
tons les conducteurs, indépendainment de la pru-.
dence et de 1’ attention avec lesquelles ils condul
sent. Elle est seulement tenue de maintenir les che
mins dans un état propre a perrnettre au conducteur
raisonnable qui proud des precautions normales d’y
circuler en sécurité.
Outre les erreurs substantielles exarninées pré
cédemment, je tiens également a souligner que,
selon moi, lajuge de premiere instance ne s’est pas
souciée du fardeau de preuve sur cette question.
Lorsqu’elle a examine la preuve relative aux autres
accidents survenus sur le cheuiin Snake HIll, lajuge

[2002] 2 RC.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 325
any other accident on Snake Hill Road during her
time at the Shelibrook RCMP Detachment, from
1987 until 1996. Cpl. Healey had heard of one other
accident. Forbes and Healey are only two of nine
members of the RCMP Detachment at Shellbrook”
(emphasis added). By this comment, the trial judge
seems to imply that there may have been more acci
dents on Snake Hill Road that had been reported and
that the respondent should have known about this.
With all due respect to the trial judge, if there had
been accidents other than the ones that were raised
at trial, it was up to the appellant to bring evidence
of these accidents forward, either by calling the
RCMP members to whom they had been reported,
or by calling those who were involved in the acci
dents, or by any other available means. Furthermore,
the significancethat the trial judge attributed to the
other accidents that occurred on Snake Hill Road
was dependent on her assumption that the respond
ent should have had a formal accident-reporting
system in place. The respondent did not bear the
onus of demonstrating that it was not obliged to
have such a system; there was, rather, a positive
onus on the appellant to demonstrate that such a
system was required and that the informal reporting
system was inadequate.
C. Did the Trial Judge Err in Finding that the
Accident was Caused in Part by the Failure of
the Respondent Municipality to Erect a Sign
Near the Curve?
The trial judge’s findings on causation are found
at para. 101 of herjudgment, where she states:
I find that thIs accident occurred as a result of Mr.
Nikolaisen entering the curve on Snake Hill Road at a
speed slightly in excess of that which would allow suc
cessful negotiation. The accident occurred at the most
dangerous segment of Snake Hill Road where a warning
or regulatory sign should have been erected and main
tained to warn motorists of an impending and hidden
hazard. Mr. Nikolaisen’s degree of impairment only
de premiere instance a fait lea remarques suivantes
au par. 31: [TRADUCrION) (je souligne). Par cette
remarque, lajuge de premiere instance semble lais
ser entendre que d’autres accidents sur le chemin
Snake Hill out Pu avoir étd signalds et que l’inti
mée aurait dfl le savoir. En toute ddfdrence pour la
juge de premiere instance, s’il y avait eu d’autres
accidents que ceux qui ont dtd mentionnés au
procès, ii appartenait a l’appelant d’en faire la
preuve, soit en faisant témoigner les membres de
la GRC a qui lea accidents avaient dtd signalds on
encore les personnes en cause dans ces accidents,
soit en utilIsant tout autre moyen a sa disposition.
En outre, l’importance que lajuge de premiere ins
tance a accordée aux autres accidents survenus sur
le chernin Snake Hill dépendait du postulat que
l’intime aurait dil possdder un système officiel
d’infoimation sur les accidents. L’intimée n’dtait
pas tenue de prouver qu’elle n’avait pas l’obli
gatlon de disposer d’un tel système. II incombait
plutôt a l’appelant d’établir que ce genre de sys
tème dtait ndcessaire et que le système unformel
existant dtait insuffisant.
C. La juge de premiere instance a-t-elle commis
une erreur en concluant que 1 ‘accident avait
été cause, en partie, par le défaut de la munici
palité intimée d’installer un panneau de signa
lisaionprès de la courbe?
Les conclusions de la juge de premiere instance
au sujet du lien de causalitd figment an par. 101 de
soil jugemeut, cit cUe dit ccci:
[T.RADUcTION] J’estime que l’accident s’est produit
parce que M. Nilcolaisen s’est engage dans le virage sur
le chemin Snake Hill a une vitesse légerement supérienre
a celle qui liii aurait permis de rdussir la manuvre.
L’accident est survenu dans la portion la plus dange
reuse dii chemun Snake Hill, a un endroit oit un pan
neau d’avertissement on de signalisation aurait dfl être
unstalld et mauntenu pour avertir lea automobilistes de
158

159
160
326 HOUSEN v. NIKOLAISEN Bastarache J. [2002] 2 S.C.R.
served to increase the risk of him not reacting, or reacting
inappropriately to a sign. Mr. Nikolaisen was not driving
recklessly such that he would have intentionally disre
garded a warning or regulatory sign. He had moments
earlier, when departing the Thiel residence, successfully
negotiated a sharp curve which he could see and which
was apparent to him. I am satisfied on a balance of prob
abilities that had Mr. Nilcolaisen been forewarned of the
curve, he would have reacted and taken appropriate cor
rective action such that he would not have lost control of
his vehicle when entering the curve.
The trial judge’s above findings in respect to
causation represent conclusions on matters of fact.
Consequently, this Court will only interfere if it
finds that in coming to these conclusions she made
a manifest error, Ignored conclusive or relevant evi
dence, misunderstood the evidence, or drew errone
ous conclusions from it (Toneguzzo-Norvell, supra,
atp. 121).
In coming to her conclusion on causation,
the trial judge made several of the types of errors
that this Court referred to in Toneguzzo-Norvell.
To the extent that the trial judge relied on the evi
dence of Mr. Laughlin, the only expert to have tes
tilled on the issue of causation, I find that she either
misunderstood his evidence or drew erroneous
conclusions from it. The only other testimony in
respect to causation was anecdotal evidence per
taining to Mr. Nikolaisen’s level of impairment
provided by Craig Thiel, Toby Thiel and Paul
Housen. Although their testimonies provided some
evidence in respect to causation, for reasons I will
discuss, it was not evidence on which the trial
judge could reasonably rely. Nor do I find that the
trial judge was entitled to rely on evidence that
Mr. Nikolaisen successfully negotiated the curve
from the Thiel driveway onto Snake Hill Road. The
inference that the trial judge drew from this fact
was unreasonable and ignored evidence that Mr.
Nikolaisen swerved even on this curve. In addition,
the trial judge clearly erred by ignoring other rel
evant evidence in respect to causation, in particu
lar the fact that Mr. Nilcolaisen had driven on the
l’inuninence d’un danger cache. Le degrd d’ebridtC de
M. Nikolaisen n’a fait qu’accroItre le risque qu’il ne rda
gisse pas dii tout ou encore de façon inappropriee a une
signalisation. M. Nikolaisen ne conduisait pea de facon
si témdraire qu’il aurait intentionnellement fait abstrac
tion d’un panneau d’avertissement ou de sigrialisation.
Qnelques instants plus tot, au moment tie quitter is rtisi
dence des Thiel, ii avait pris avec succès un virage serrC
qu’il pouvait clairement voir. Je suis convaincue, selon là
prtipondérance des probabilitds, que si on avait prévenu
M. Nikolaisen de l’existence de la courbe, ii aurait rdagi
et pris des mesures appropriées, qui l’auraient empêchC
de perdre Ia maltrise de son ve’hicule en s’engageant
dans le virage.
Les conclusions susmentioundes de la juge
de premiere instance touchant le lien de causalitd
sont des. conclusions portant sur des questions de
fair. Par consequent, notre Cour n’interviendra que
si elle estime que, pour arriver a sea conclusions, in
juge a conimis une erreur manifeste, n’a pas tenu
compte d’un tiltiment de preuve determinant ou
pertinent, a mal compris Ia preuve ou en a tire des
conclusions erronties (Toneguzzo-Norvell, prdcitti,
p. 121).
En arrivant a sa conclusion sur le lien de causa
litd, lajuge de premiere instance a comrnis plusieurs
des erreurs mentionndes par notre Cour dana l’arrflt
Toneguzzo-Norvell, prdcitd. Dens la mesure oti la
juge de premiere instance s’est fondtie sur le tdmoi
gnage de M. Laughlin, le seul expert a avoir tdmoi
gnC sur la question du lien de causalité, j’estixne
qu’elle a real unterprdtd son tdmoignage ou qu’elle
en a tire des conclusions errondes. Les didments
anecdotiques des tdmoignages de Craig Thiel, Toby
TIdel et Paul Housen concennant le degrd d’ébxiétd
de M. Nikolaisen constituent la seule autre preuve
testimnoniale sur le lien de causalitd. Bien que leurs
tdmoignages aient fourni quelques didments de
preuve touchant cette question, il tie s’agit pas,
pour des raisons que j ‘ examinerai plus loin, d’ die
ments sur lesquels la juge de premiere instance
pouvait raisonnablement s’appuyer. Je n’estime
pas non plus qu’elle pouvait se fonder sur la preuve
que M. Nikolaisen avait rdussi a prendre le virage
permettant d’accdder an chemnin Snake Hill depuis
l’entrde des Thiel. L’infdrence que Ia juge de pre
mière instance a thee de ce fait dtait dtiraisonnable
et faisait abstraction de la preuve selon laquelle

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 327
road three times in the 18 to 20 hours preceding
the accident.
I cannot agree with the trial judge that the testi
mony of Mr. Laughlin, a forensic alcohol specialist
employed by the RCMP supports the finding that
Mr. Nikolaisen would have reacted to a sign fore
warning of the impending right-turning curve on
which the accident occurred. The preponderance of
Mr. Laughlin’s testimony establishes that persons at
the level of impairment which Mr. Nikolaisen was
found to be at when the accident occurred would be
unlikely to react to a warning sign. In addition, Mr.
Laughlin’s testimony points overwhelmingly to the
conclusion that alcohol was the causal factor which
led to this accident. The trial judge erred by misap
prehending one comment in Mr. Laughlin’s testi
mony and ignoring the significance of his testimony
when taken as a whole.
Based on blood samples obtained by Constable
Forbes approximately three hours after the acci
dent occurred, Mr. Laughlin predicted that Mr.
Nikol.aisen’s blood alcohol level at the tune of the
accident ranged from 180 to 210 milligrams percent.
Mr. Laughlin commented at length on the effect that
this level of blood alcohol could be expected to have
on a person’s ability to drive, testifying:
Well, My Lady, this alcohol level that I’ve calculated here
is a very high alcohol level. The critical mental faculties
[that) are important in operating a motor vehicle will be
• impaired by the alcohoL And any skill that depends on
• these mental faculties will be affected. These include
anticipation, judgment, attention, concentration, the abil
ity to divide attention among two or more areas of inter
est. Because these are affected to such a degree, it would
be unsafe for anybody to operate a motor vehicle with
this level of alcohol in their body.
le vdhicule de M. Nilcolaisen avait fait une embar
dde même dans cette courbe. En outre, la juge de
premiere instance a clairement commis une erreur
en ne prenant pas en consideration d’autres eld
ments de preuve pertinents concernant le lien de
causalitd, en particulier le fait que M. Nikolaisen
avait rould a trois reprises sur le chemin en ques
tion au cours des 18 a 20 heures ayant prdcddd 1’ac
cident.
Ye ne partage pus l’avis de la juge de pre
mière instance voulant que le tdmoignage de
M. Laughlin, spdcialiste judiciaire en matière
d’ alcool au service de la GRC, dtaye la conclu
sion que M. Nikolaisen aurait rdagi a un panneau
liii signalant l’imminence du virage droite oi
s’est produit l’accideut. Le tdmoignage de M.
Laughlin dtablit de facon prdponddrante que des
personnes dana un dtat d’dbridtd aussi avancd que
celul de M. Nikolaisen äu moment de l’accident
ne rdagiraient vraisemblablement pas a un pan
neau d’ avertissement. De plus, le tdmoignage de
M. Laughlin mCne irrdsistiblement a la conclusion
que l’alcool a dtd le facteur causal de l’accident.
La juge de premiCre instance a coinmis une erreur
a cet dgard, car cUe a mal interprdté un element de
la deposition de M. Laughlin et elle a omis de tenir
compte de l’importance de son témoignage, consi
ddrd globalement.
A Ia lurniCre des dchantiflons de sang prdlevds
par Ia gendarme Forbes environ trois heures apres
l’accident, M. Laughlin a estimd que, au moment de
l’accident, l’alcooldmie de M. Nikolaisen se situait
entre 180 et 210 mg par 100 nil de sang. Dans son
tCmoignage, M. Laughlin a commentd en detail i’m
cidence d’une telle alcooldmie sur la capacitd d’une
personne de conduire:
[TRADJCrION] Bien, Madame, l’alcooiémie quej’ai cat
culde en l’espèce est très elevde. Lea facultés mentates
essentielles qui jouent un r&e important dana la conduile
d’un veliicule automobile sont affaiblies par l’alcooi Et
toute habjletC tributaire de ces facultés mentales eat affec
tee, notamment l’anticipation, lejugement, l’attention, Ia
concentration, la capacitd de partager son attention entre
deux choses ou plus. Et parce qu’elles sont affectdes ace
point, il serait risqud pour quiconque possède us tel taux
d’alcool dam son sang de conduire un véhicule automo
bile.
161
162

163
328 HOUSEN V. NiKOLlSEN Bastarache J. [2002) 2 s.p..
When asked about his knowledge of research per
taining to the effects of alcohol on the risk of being
involved in an automobile accident, Mr. Laughlin
had this to say:
At this level the moderate user of alcohol risk of caus
ing crash is emendously high, probably 100 times that
of a sober driver, or even highet And in some cases at
this level, i’ve seen scientific literature indicating that the
risk of causing a fatal crash is 2 to 300 times that of a
sober driver. ..if an impaired person is an experienced -
drinker there —
it
won’t be that high. However, there will
be an increased risk compared to a sober state. . . . But
above 100 milligrams percent, regardless of tolerance, a
person will be impaired with respect to driving ability.
Following these comments, Mu Laughlin discussed
the ability of a severely impaired person to react to
the presence of a hazard when driving:
My Lady, I would like to add that the driving task is a
demanding one and involves many multi-various tasks
occurring at the same time. The hazard for a person
under the influence of alcohol is it takes longer to notice
a hazard or danger if one should occur; it takes longer to
decide what corrective action is appropriate, and it takes
longer to execute that decision and the person may tend
to make incorrect decisions. So there is increased risk in
that process. As well, if the impairment has progressed to
the point where the motor skills are affected, the execu
tion of that decision is impaired. So it’s not a very grace
ful attempt at a corrective action. As well, some people
tend to make. more risks under the influence of alcohol.
They do not apply sound reasoning and judgment. They
are not able to properly assess the impairment of their
driving skills, they are not able to properly assess the risk,
not able to properly assess the changing road and weather
conditions and adjust for that. But even if they do recog
nize those as hazards, they may tend to take more risks
than a sober driver would.
The above comments support the conclusion that
the accident occurred as a result of Mr. Nikolaisen’s
impairment and not as a result of any failure on the
part of the respondent. Indeed, when the portions of
Mr. Laughlin’s testimony that the trial judge relied
Interrogé sur l’état des recherches touchant l’inci
deuce de 1’ alcool sur le risque d’ accident automo
bile, void ce qu’a dit M. Laughlin:
[TRADUc’rIoN] A cc taux-là, Ic risque qu’une personne
qui consomme moddrdment de l’alcool provoque un acci
dent est extrêmement élevé, probablement 100 fois plus
dlevé que Ic conducteur a jeun, ou plus encore. Et dans
certains cas, a ce taux-là, j ‘ai hi des textes scientifiques
dana lesquels on indiquait que Ic risque de provoquer un
accident mortel eat de 200 a 300 fois plus élevd que cehii
d’un conducteur a jeun. [. ..] [S]i la personne en état
d’ébriétd est quelqu’un qui a l’habitude de boire, le risque
n’est pas aussi élevd. Cependant, II est plus grand que si
la personne avait ét a jeun. [. . .1 Mais au dessus de 100
mg par 100 ml de sang, peu importe Ic degrd de tolerance
a l’alcool, tine personne a lea facultes affaiblies pour ce
qul concerne sa capacité de conduire.
Après avoir fait ces remarques, M. Laughlin a décrit
Ia capacitd d’une personne en dtat d’ébridté avancC
de rdagir a la presence d’un danger lorsqu’elle con
duit.
[TRADUCTION} Madame, j’aimerais ajouter que conduire
un véhicule est une activitC exigeante, qui demande d’ac
complir ime multiplicitC de tâches simultandment. Le
danger pour la personae qui conduit en état d’ébriété
reside dana le fait qu’il lui faut plus de temps pour déce
icr 1a presence d’un risque ou d’un danger; ii liii faut
plus de temps pour decider quelle mesure corrective eat
requise, et cUe prend plus de temps a mettre cette déci
sion a execution; de plus, une telle personne petit avoir
tendance a prendre de mauvaises decisions. Ce processus
accroit donc le risque. Aussi, si l’e’briétd eat avancéc au
point oii les habiletés motrices sont affaiblies, l’exécution
de la decision s’en trouve compromise. II s’ensuit donc
une tentative plutOt malhabile de corriger Ia situation. De
plus, certaines personnes tendent a prendre davantage de
risques Iorsqu’elles soat en dtat d’ébriCtC. Files ne font
pas preuve de discernement et de jugement. Elles soat
incapables d’évaluer correctement lea changements dans
l’Ctat de la route et lea conditions météorologiques et
d’adapter leur conduite en consequence. Mais niême si
elles reconnaissent qu’il s’agit effectivement de dangers,
cUes peuvent avoir tendance a preudre davantage de na
ques que le conducteur àjeun.
Les remarques qui précèdent dtayent la conclu
sion que 1’ accident s’est produit en raison de l’Ctat
d’el,dCtd de M. Nikolaisen et non de quelque man
quement de la part de l’intimde. De fait, lorsque les
extraits du témoignage de M. Laughlin sur lesquels

[200212 R.C.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 329
on are considered in their context, they do not sup
port her conclusion that Mr. Nikolaisen would have
been able to react to a sign had one been posted.
When asked by counsel whether it was possible
for an individual with Mr. Nikolaisen’s blood alco
hol level to perceive and react to a road sign, Mr.
Laughlin responded:
Yes, it’s possible that a person will see and react to it and
maybe react properly. It’s possible that they will react
improperly or may miss it altogether. I think what’s key
here is that at this level of alcohol, it’s more likely that the
person under this level of alcohol will either miss the sign
or not react properly compared to the sober driver. That
the driver with this level of alcohol will make more mis
takes than wifi the sober drivet [Emphasis added.)
In the passage above, it is clear that Mr. Laughlin
is merely admitting that anything is possible, while
solidly expressing the vieW that drivers at this level
of intoxication are more likely to not react to a sign
or other warning. This view is also apparent in the
following passage, in which Mr. Laughlin expands
on the ability of an intoxicated driver to react to
signs and other road conditions:
What happens with respect to perception under the influ
ence of alcohol is a driver tends to concentrate on the
central field of vision, and miss certain indicators on the
periphery, that’s called tunnel vision. As well, drivers
tend to concentrate on the lower part of that central field
of view and therefore they don’t have a very long pre
view distance in the course of operating a motor vehicle
and looking down the road. And so studies indicate that
under the influence of alcohol drivers tend to miss more
signs, warnings, indicators, especially those in the periph
eral field of view or farther down the road. [Emphasis
addedj
In argument before this Court, the appellant
emphasized that although Mr. Laughlin was the
only expert to testify with respect to causation, lay
witnesses testified that Mr. Nikolaisen was not vis
ibly impaired prior to leaving the Thiel residetice.
s’est fondde la juge de preniière instance sont exa
mines dans leur contexte, us n’appuient pan in con
clusion de cette dernière que M. Nikolaisen aurait
dtd capable de reagir a tin panneau de signalisation
s’il y en avait eu un. Rdpondant a la question d’un
avocat lul demandant s’il Ctait possible qu’une per
sonne ayant l’alcooldmie de M. Nikolaisen voit un
panneau de signalisation et y rdagisse, M. Laughlin
a dit ccci:
[TRADUcrI0N] Oui, ii eat possible gu’une personae le
voit et y rdagisse et peut-être gu’elle réagisse adequate
ment. Ii est possible gu’elle ne réagisse pan adéquatement
ou qu’elle ne Ic voit même pan. J’estime que l’élénient
fondamental a retenir ici est qu’il eat probable gun la
personae avant atteintcette alcoolémie ne voit pas Ic pan
neau, ou ne réagisse pas adéquatement, comparativement
au conducteur a jeun. Que le conducteur avec cette alcoo
lémie coxnmette plus d’ exreurs que le conducteur a jeun.
[Je souiigne.]
II est clair, dans le passage qui prdcède, que M.
Laughlin reconnait simplement que tout eat possi
ble, tout en avancant avec conviction qu’il y a une
plus forte probabilité que les conducteurs ayant
atteint ce degré d’ébridtd ne rdagissent pan a tin pan
nean de signalisation ou a une autre mesure d’ aver
tissement. Cette opinion ressort Cgalement claire
ment de l’extrait suivant, oü il donne des précisions
suppldmentaires stir la capacitd d’uue personne en
état d’dbridté de rdagir aux panneaux de signalisa
tion et a d’autres éldments sur les routes:
[TRADUCTI0NJ Stir le plan de la perception, Ic conduc
teur en Ctat d’ébriCté a tendance a se concentrer sur son
champ visuel central et a. mauquer certains indices en
périphrie, c’est cc qu’on appelle la vision tubulaire. En
outre, lea conducteurs ont tendance a se concentrer sur in
paxtie inférienre de ce champ visuel central et, en consd
quence, ils ne voient pan très loin devant eux stir in route
lorsqu’il sont au volant. Et, par consequent, lea recher
ches indiquent gue lea conducteurs en état d’ébriété ont
tendance a manguer davautage de panneaux de signali
sation, d’avertissements, d’indices, parliculièrement ceux
situCs dana leur champ visuel périphérigue ou plus loin
sur Ia route. [Je souuigne.]
Au cours des plaidoiries devant notre Cour,
l’appelant a souuignd que, bien que M. Laughlin
alt dtd le seul expert enteudu au sujet du lien de
causalitd, lea tdmoins ordinaires ont attestd que
M. Nikolaisen n’avait pan lea facultds visiblexnent
164

330 HOUSEN v. NIKOLAISEN Bastaroche J. [2002] 2 S.C.R.
It is not clear from the trial judge’s reasons that she
relied on testimony to this effect given by Craig
Thiel, Toby Thel and Paul Housen. To the extent
• that she did rely on such evidence to establish that
the accident was caused in part by the respondent’s
negligence, I find this reliance to be unreasonable.
Whereas the lay witnesses in this case were quali
fied to give their opinion on whether they, as ordi
nary drivers, could safely negotiate the segment of
Snake Hill Road on which the accident occurred,
they were not qualified to assess the degree of Mr.
Nikolaisen’s impairment. The reason for their lack
of qualification in this regard was explained by Mr.
Laughlin in the following response to counsel’s
question on whether it is possible to draw a conclu
sion from the fact that an individual does not exhibit
any impairment of their motor sldlls and speech:
165
No, Your Honour, because, My Lady, when you’re look
ing at motor skill impainnent or for signs of motor skill
impairment, you’re looking for signs of intoxication, not
impairment. Remember I mentioned that the first com
ponents affected by alcohol are cognitive and mental
faculties. These are all important in driving. However, it
is very difficult when you look at an indMdual who has
been consuming alcohol to tell that they have impaired in
attention or divided attention, or concentration, or judg
ment. So as an indicator of impairment, motor skills are
not reliable. And if you think about the Criminal Code
process, they’ve been abandoned 30 years ago as a useful
indicator of impairment. No longer do we rely on police
officers subjective assessment of person’s motor skills to
determine impairment. [Emphasis added.]
It is also clear from the trial judge’s reasons
that she relied to some extent on evidence that Mr.
Nikolaisen successfully negotiated the curve at the
point where the driveway to the Thiel residence
intersected the road. I agree wIth the respondent that
this fact is simply not relevant. The abilIty of Mr.
Nikolaisen to negotiate this curve does not establish
that his driving ability was not impaired. As noted
by the respondent, at para. 101 of its factum, he may
affaiblies avant de quitter la residence des Thiel. Les
motifs de la juge de premiere instance n’indiquent
pas clairement si cUe s’est appuyCe stir les témoi
gnages de Craig Thiel, Toby Thiel et Paul Housen
a cet dgard. Dans la mesure oC cUe se serait fondée
stir cette preuve pour conclure que 1’ accident avait
dtd cause en partIe par la negligence de l’intimCe,
j’estime qu’il Ctait déraisonnable de le faire. En
l’espece, bien que compdtents pour exprimer leur
opinion sir la question de savoir s’ils pourralent, en
tant que conducteurs moyens, manceuvrer en toute
sdcurité stir le tronçon du cheinin Snake Hill ott l’ac
cident s’est produit, les témoins ordinaires n’étaient
pas ‘compétents pour évaluer le degré d’ dbriété de
M. Nikolaisen. La raison- de leur absence de corn
pétence a cet dgard a etC expliquee en ces termes
par M. Laughlin, dans la rdponse suivante qu’il a
donnée a l’un des avocats qul lul demandait s’il était
possible de tirer des conclusions du fait qu’une per
sonne ne démontre ni signe d’affaiblissement de ses
habiletCs moirices ni problème d’dlocution:
[TRADUCTION] Non, votre Honneur, puisque, Madame,
lorsqu’on vCrifie s’il y a affaiblissement des habiletés
motrices ou des signes de cet affaiblissement, on cher
die des indices d’e%riété, et non d’affaiblissement des
facultds. Rappelez-vous que j’ai dit que les premiCres
facultés affectées par I’alcool sont lea facultés cognitives
et mentales. Elles soRt toutes importantes lorsqu’il s’agit
de conduire tin véhicule. Cependant, lorsqu’on examine
une personne qui a consommé de l’alcool, ii est trCs dif
ficile de dire Si SCin attention oc sa capacité de diviser son
attention, OU Si sa concentration ou son jugement sont
réduits. En consequence les habiletés motrices ne sont
pas des indices fiables d’affaiblissement des facultés.
Et si on pense au processus prCvu par le Code crimInel,
on a cessé d’y recourir depuis 30 ans en tant qu’indices
utiles de l’affäiblissement des facultés. On ne se fie plus
a l’appréciation subjective policier quant aux habiletés
motrices d’une personne pour determiner si les facultCs
de celle-ci sont affaiblies. [Je souuigne.]
II appert Cgalement des motifs de in juge de
premiere instance qu’elle s’est dams une certaine
mesure fondCe stir la preuve indiquant que M.
Nikolaisen avait rdussi a preudre le virage a i’m
tersection de l’entrCe de la residence des Thiel et
du chemin Snake Hill. Se partage l’avis de l’inti
niCe scion lequel ce fait n’est tout simplement pas
pertinent. La capacitC de M. Nikolaisen de prendre
ce virage n’ dtablit pas que sa capacitd de conduire

[20021 2 R.C.S. HOUSEN C. NIKOLAISEN Lejuge .Bastarache 331
have been driving more slowly at this point, or he
may simply have been lucky. More importantly, this
evidence contributes nothing to the issue of whether
or not Mr. Nikolaisen would have reacted to a sign
on the curve where the accident occurred, had one
been present. There was no sign on the curve one
faces upon leaving the driveway, just as there was no
sign on the curve where the accident took place.
At any rate, the trial judge’s reliance on Mr
Nikolaisen’s successful negotiation of the curve at
the location of the Thiel driveway ignores relevant
evidence that he had swerved or “fish-tailed” when
leaving the Thiel residence. A reasonable inference
to be drawu from this evidence is that while Mt
Nikolaisen was able to negotiate this curve, he did
not do so free from difficulty. While this evidence
may not be significant in and of itself, it should have
• been enough to alert the thal judge to the problems
• inherent in the inference she drew from his ability to
navigate this earlier curve.
in addition to ignoring the relevant evidence of
• the fish-tail marks, the trial judge failed to consider
the relevance of the fact that Mr. Nikolaisen had
travelled Snake Hill Road three times in the 18 to
• 20 hours preceding the accident. in her review of
the evidence, she noted at para. 8 of her reasons
that: “Mn Nikolaisen was unfamiliar with Snake
Hill Road. While he had in the preceding 24 hours
travelled the road three times, only once was in the
same direction that he was travelling upon leaving
the Thiel residence.”
I simply cannot see how the trial judge found
accidents which occurred when motorists were trav
elling in the opposite direction relevant to the issue
of the respondent’s knowledge of a risk to motorists
• while at the same time suggesting that the fact that
Mr. Nikolaisen had driven the road in the opposite
direction twice was irrelevant to the issue of whether
n’&ait pas affaiblie. Comme l’a souligne l’inthnée,
au par. 101 de son mémoire, II a pu réduire sa vitesse
a cet endroit, ou simplement avoir eu de la chance.
Facteur plus important encore cette preuve n’ aide
d’aucuiie facon a determiner si M. Nikolaisen aurait
réagi a un pannean place a l’approche de la courbe
oui s’est produit l’accident, si untel panneau avait
existé. II n’y avail aucun panneau aux abords de la
courbe situte a la sortie de l’entrée, tout comme il
n’y en avait pas aux abords de ceile oh s’est produit
1’ accident.
Quoi qu’il en soit, en se fondant sur le fait que M.
Nikolaisen avait pris avec succès le virage devant
1’ entrée des Thiel, lajuge de premiere instance a fait
abstraction de l’elément de preuve pertinent mdi
quant que l’arrière de son véhicule avait zigzagué a
son depart de la residence des Thiel. On peut raison
nablement inférer de cette preuve que, quoique M.
Nikolaisen alt etC en mesure de prendre ce virage,
II n’y est pas parvenu sans difficultC. Bien que cette
preuve ne soit pas nCcessairement importaute en soi,
elle aurait dii nCanmoins alerter lajuge de premiere
instance quant aux problèxnes intrinsèques de l’infC
rence qu’elle tirait de la capacitC de M. Nikolaisen
de prendre cc premier virage.
En plus de ne pas avoir tenu compte de in preuve
pertinente que constituaient les traces des zigzags,
in juge de premiere instance n’a pas considCrC per
tinent le fait que M. Nikolaisen avait circulC sur
le chemin Snake Hill a trois reprises au cours des
is 20 heures ayant prCcCdC l’accideut. Dans son
examen de la preuve, dc a soulignC, au par. 8 de ses
motifs, que [TRADUCTION) >
Ic ne vois tout simplement pas comment in juge
de premiere instance a pu conclure que les acci
dents qu’ont eu des automobilistes circulant en sens
inverse Ctaient pertinents pour statuer sur la con
naissance par l’intiinCe de l’existence d’un risque
d’ accident, tout en suggCrant du même souffle que
le fait que M. Nikolaisen aft roulC a deux reprises
166
167
168

169
332 HOUSEN v. NIKOLAISEN Bastarache J. [2002] 2 S.C.R.
or not he would have recognized that the curve
posed a risk or that he would have reacted to a warn
ing sign. This discrepancy aside, I find the fact that
Mi. Nikolaisen had travelled Snake Hill Road in the
same directionwhen he left theThiel residence to
go to the Jamboree the evening before the accident
highly relevant to the causation issue. The finding
that the outcome would have been different had Mr.
Nikolaisen been forewarned of the curve ignores the
fact that he already knew that the curve was there.
I agree with the respondent that the obvious reason
Mr. Nikolaisen was unable to safely negotiate the
curve on the afternoon of the 18th, despite having
negotiated this curve and others without difficulty
in the preceding 18 to 20 hours was the combined
effect of his drinking, lack of sleep and lack of
food.
In conclusion on the issue of causation, I wish
to clarify that the fact that the trial judge referred
to some evidence to support her findings on this
issue does- not insulate those findings from review
by this Court. The standard of review for findings
of fact is reasonableness, not absolute deference.
Such a standard entitles the appellate court to assess
whether or not it was clearly wrong for the trial
judge to rely on some evidence when other evidence
points overwhelmingly to the opposite conclusion.
The logic of this approach was aptly explained by
Kerans, supra, in the following passage at p. 44:
The key to the problem is whether the reviewer is to
look merely for “evidence to support” the finding Some
evidence might indeed support the finding, but other evi
dence may point oveiwhehningly the other way. A court
might be able to say that reliance on the “some” in the
face of the “other” was not what the reasonable trier of
fact would do; indeed, it might say that, in all the circum
stances it was convinced that to rely on the one in the face
of the other was quite unreasonable. To say that “some
evidence” is enough, then, without regard to that “other
en sens inverse sur le chemin en question n’dtait pas
pertinent pour determiner s’il aurait reconnu que la
courbe prdsentait un risque ou s’il aurait rdagi a un
pannean d’avertissement. Inddpendarnment de cette
contradiction, j’estime que le fait que M. Nikolaisen
alt rould dans la même direction sur le chemin
Snake Hill après avoir quittd la residence des Thiel
pour se rendre au jamboree, la veille de l’accident,
est fort pertinent en ce qui concerne le lien de cau
salitd. La conclusion que Ic rdsultat aurait dtd diffé
rent si une signalisation avait prdvenu M. Nikolaisen
de l’existence de la courbe ne dent pas compte du
fait qu’il savait déjà qu’elle existtht. Je souscris a
l’opinion de l’intimée que la raison évidente pour
laquelle M. Nikolaisen- n’a pas rCussi a prendre le
virage en toute sécurité dans l’après-midi du 18,
alors qu’il avait déjà pris ce virage et d’autres sans
difficultd au cours des 18 a 20 heures prdcddentes,
était l’effet combine de sa consommation d’alcool,
de son manque de sommeil et du fait qu’il n’avait
pas mange.
Pour conclure sur la question du lien de causa
lité, j’aimerais préciser que le fait que la juge de
prenilère instance alt mentionnd certains elements
de preuve an soutien de ses conclusions sir ce point
a’ a pas pour effet de soustraire ces conclusions au
pouvoir de contrôle de notre Cour. La norme de
contrôle applicable aux conclusions de fait est celle
de la decision raisounable et non celle de la retenue
absolue. Cette norme permet au tribunal d’appel de
se demander si lejuge de premiere instance a claire
ment fait erreur en ddcidant comme ill’ a fair sir le
fondement de certains elements de preuve alors que
d’autres elements mènent irrésistiblement a la con
clusion inverse. Kerans, op. cit., p. 44, ahabilement
exposé la logique de cette démarche dans le passage
suivant:
[TRADUCFION] La solution au problème reside dans
la réponse a la question de savoir si le tribunal de révi
sion doit simplement se demander s’il existe is conclusion. 11 est possible
que certains dléments de preuve étayent effectivement Ia
conclusion alors que d’autres élCments conduisent irré
sistiblement a la conclusion inverse. Un tribunal pourrait
être en mesure de dire qu’imjuge des faits raisonnable ne
s’appuierait pas sir >; de fait, il pouirait dire que, eu égard a

[20021 2 RC.S. HOUSEN C. NIKOLAISEN Lejuge Bastarache 333
evidence” is to turn one’s back on review for reasonable
ness.
D. Did the Courts Below Err in Finding that no
Common Law Duty of Care Exists Alongside..
the Statutory Duty Imposed Under Section 192
of The Rural Municipality Act, 1989?
The- appellant urges this Court to find that a
common law duty of care exists alongside the statu
tory duty of care imposed on the respondent by s.
192 of The Rural MunicipalityAct, 1989. According
to the appellant, the application of the common law
duty of care would free the Court from the need to
focus on how a reasonable driver exercising ordi
nary care would have navigated the road in question.
The appellant submits that the Court would instead
apply the “classic reasonableness formulation”
which, in its view, would require the Court to take
into account the likelihood of a known or foresee
able harm, the gravity of that harm, and the burden
or cost ofpreventing that harm. The appellant argues
that the respondent would be held liable under this
test.
The courts below rejected the above argument
when it was put to them by the appellant. I would
not interfere with their ruling on this issue for the
reason that it is unnecessary for this Court to impose
a common law duty of care where a statutory one
clearly exists. In any event, the application of the
common law test would not affect the outcome in
these proceedings.
I agree with the respondent’s submissions that in
this case, where the legislature has clearly imposed
a statutory duty of care on the respondents, it would
be redundant and unnecessary to find that a common
law duty of care exists. The two-part test to estab
lish a common law duty of care set out in Kamloops
(City of) v. Nielsen, [19841 2 S.C.R. 2, simply has
no application where the legislature has defined a
statutory duty. As was stated by this Court in Brown
l’ensemble des circonstances, U est convaincu qu’il Ctait
tout a fait deraisonnable de se fonder sur certains dC
ments compte tenu des autres. En consequence, affirmer
que < certains elements de preuve >> suffiseut, sans Cgard
aux >, revient a abandonner l’examen
du caractère raisonnable.
0. Les juridictions inférleures ont-elles commis
une erreur en conduant qu’aucune obligation
de diligence de common law ne coexiste avec
I ‘obligation iJgale imposée par 1 ‘art. 192 de la
Rural Municipality Act, 1989?
L’appelant invite notre Cour a conclure qu’une
obligation de diligence de common law coexiste
avec l’obligation lCgale de diligence imposée a l’iu
timCe par l’art. 192 de la Rural Municipality Act,
1989. Scion l’appelant, l’application de l’obligation
de diligence de common law dispenserait la Cour
de la nCcessité de se demander comment un con
ducteur raisonnable prenant des precautions norma
les aurait roulC stir le chemin en cause. L’appelaut
soutient que la Cour pourrait plutôt appliquer le
[TRADUCn0N] >, lequel, a son avis, l’obligerait a tenir
compte des elements suivants : la probabilitC qu’un
prejudice connu ou prévisibie survienne, la gravitC
de ce prejudice et le fardeau ou le coüt qu’il faudrait
assumer pour le prCvenir. L’appelant pretend que,
suivaut cc critère, l’intimCe serait tenue responsa
ble.
Les juridictions infCrieures ont rejeté l’argument
susmentionnC de 1’apmanL Je ne modifierais pas
leur decision stir cette question, car ii est inutile que
notre Cour impose tine obligation de diligence de
common law lorsqti’il existe clairement une obliga
tion d’origine legislative. Quoi qu’il en soit, l’appli
cation du critère prdvu par la common law ne modi
fierait pas 1’issue de la prCsente instance.
Ic souscris a l’argument de l’intimCe scion
lequel, en l’espèce, ii. serait redondant et inutile de
conclure qu’elle eat assujettie a tine obligation de
diligence de common law alors que le législateur
lui a clairement impose tine obligation lCgale de
diligence. Le critère a deux volets CuoncC dans l’ar
ret Kamloops (Wile de) c. Nielsen, [1984] 2 R.C.S.
2, pour statuer stir 1’ existence d’une obligation de
diligence de common law, ne s’applique tout
170
171
172

173
174
334 HOUSEN V. NIKOLAISEN Bastarache .L [20021 2 S.C.R.
v. British Columbia (Minister of Transportation and
Highways), [1994) 1 S.C.R. 420, at p. 424:
if a statutory duty to maintain existed as it does in
some provinces, it would’ be unnecessary to find a private
law duty on the basis of the neighbourhood principle in
Aims v. Merton London Borough Council, [1978] A.C.
728. Moreover, it is ouly necessary to consider the poliey/
operational dichotomy in connection with the search for
a private law duty of care.
All of the authorities cited by the appellant as sup
port for the imposition of an independent common
law duty of care can be distinguished from the case
at hand on the basis that no statutory duty of care
existed (Just, supra; Brown, supra; Swinamer v.
Nova Scotia (Attorney General), [1994] 1 S.C.R.
445; Ryan, supra).
In addition, I find that the outcome in this case
would not be different if the case were determined
according to ordinary negligence principles. First,
were the Court to engage in a common law analy
sis, it would still look to the statutory standard of
care as laid out in The Rural MunicipalityAct, 1989,
as interpreted by the case law in order to assess the
scope of liability owed by the respondent to the
appellant. As this Court stated in Ryan, supra, at
para. 29:
Statutory standards can, however, be highly relevant
to the assessment of reasonable conduct in a particular
case, and in fact may render reasonable an act or omis
sion which would otherwise appear to be negligent. This
allows courts to consider the legislative framework in
which people and companies must operate, while at the
same time recognizing that one cannot avoid the underly
ing obligation of reasonable care simply by discharging
statutory duties.
Moreover, even under the common law analysis,
this Court would be called upon to question the type
of hazards that.the respondent, in this case, ought to
have foreseen. Whatever the approach, it is only rea
simplement pas lorsque ic lgislateur a prescrit
l’obligation dans la ioi. Comme l’a indique noire
Cour dans i’arrêt Brown c. Colombie-Britannique
(Ministre des Transports et de la Voirie), [1994] 1
R.C.S. 420, p. 424: V
s’il existait une obligation d’entretien imposde par Ia
loi cornme c’est le cas dans certaines provinces, II serait
inutile de rechercher une obligation en droit privd en se
fondant sur le principe du prochain établi dans l’axrêt
Aims c. Merton London Borough Council, [1978] A.C.
728. En outre, il est nécessaim d’exaniiner la dichoto
mie politique generale-opdrations seulement en ce qui
conceme la recherche d’une obligation de diligence en
droit privd.
Tous les arrêts invoques par i’appelant pour justifier
sa prétention que la municipalitd devrait être assu
jettie a une obligation inddpendante de diligence de
common law peuvent être distinguds de Ia prdsente
affaire, dtant donnd qu’il n’existait aucune obliga
tion ldgale de diligence dans ces affaires (Just, prdci
tee; Brown, prdcitée; Swinamer c. Nouvelle-Ecosse
(Procureur génJral), [1994] 1 R.C.S. 445; Ryan,
prdcitde).
En outre, j’estime que le rCsultat serait le même
en l’espèce si l’affaire était tranchde d’après les
principes ordinaires de la negligence. Tout d’abord,
si la Cour faisait 1’ analyse prévue par la common
law, cUe appliquerait quand même la norme ldgale
de diligence dtablie dans Ia Rural Municipality Act,
1989, telle qu’elle a été interprdtde par la jurispru
dence, pour determiner l’dteridue de la responsabi
lité de i’intimCe envers l’appelant. Comme I’a dit
noire Cour dana i’arrêt Ryan, prdcitd, par. 29:
Cependant, lea normes législatives peuvent 8tre haute
ment pertinentes pour determiner cc qui constitue uric
conduite raisonnable dans un cas particulier, et elles peu
vent, en fait, rendre raisonnable un acte ou une omission
qul, autrement, paraitrait negligent. En consequence, lea
tribunaux peuvent examiner le cadre législatif dans lequel
les personnes et lea socidtés doivent agiz tout en recon
naissant qu’il eat impossible de se soustraire a l’obliga
tion sous-jacente de diligence raisonnable simplement en
s’acquittant de ses obligations lCgales.
De plus, mgme dana le cadre de 1’ analyse requise
par la common law, noire Cour devrait s’iuterroger
sur le type de dangers que l’intimée aurait dfi prdvoir
en l’espèce. Indépen4amment del’ approche choisie,

[2002] 2 R.C.S. HOUSEN c. NIKOLAISEN Lejuge Bastarache 335
sonable to expect a municipality to foresee accidents
which occur as a result of the conditions of the road,
and not, as in this case, as a result of the condition
of the driver.
The courts have long restricted the standard of
care under the statutory duty to require municipali
ties to repair only those hazards which would pose
a risk to the reasonable driver exercising ordinary
care. Compelling reasons exist to maintain this
interpretation. The municipalities within the prov
ince of Saskatchewan have some 175,000 kilome
tres of roads under their care and control, 45,000
kilometres of which fall within the “bladed trail”
category. These municipalities, for the most part,
do not boast large, permanent staffs with extensive
time and budgetary resources. To expand the repair
obligation of municipalities to require them to take
into account the actions of unreasonable or careless
drivers when discharging this duty would signify a
drastic and unworkable change to the current stand
ard. Accordingly, it is a change that I would not be
prepared to make.
VII. Disposition
In the result, the judgment of the Saskatchewan
Court of Appeal is affirmed and the appeal is dis
missed with costs.
Appeal allowed with costs, GoNTIn,,
BASTARACHE, BINNIE and LEBEL JJ. dissenting.
Solicitorsfor the appellant: Robertson Stromberg,
Saskatoon; Quoa Ferguson MacKinnon, Saskatoon.
Solicitors for the respondent: Gerrand Rath
Johnson, Regina.
ii n’est que raisonnable d’attendre d’une municipa
lité qU’elle prévoit les accidents qui surviennent en
raison de l’état du chernin, et non, comme en l’es
pèce, ceux qui résultent dc l’état du conducteur.
Depuis longtemps, les tribunaux limitent l’éten
due de Ia norme de diligence découlant de l’exis
tence d’un devoir legal de diligence a l’obligation
pour les municipalités d’eliminer seulement les dan
gers qui présenteraient un risque pour le conducteur
raisoimable prenant des precautions normales. Des
raisons impérieuses inilitent en faveur du maintien
de cette interpretation. Les municipalités de la pro
vince de la Saskatchewan assument l’entretien et
Ia surveillance de quelque 175 000 kilomètres de
route, dont 45 000 kilomèires font panic de la catC
gone des . La plupart de ces
municipalités ne disposent ni d’effectifs permanents
considCrables ni de ressources importantes en temps
et en argent. Elargir l’obligation d’entretien des
municipalités en exigeant qu’elles tiennent compte,
dans l’exécution de cette obligation, des actes des
conducteurs dCraisonnables ou iinprudents, eutral
nerait une modification radicale et irréalisable de la
nonine actuelle. 11 s’agit en consequent d’un change
ment que je ne serais pas dispose a apporter.
VII. Dispositif
En definitive, le jugement de la Cour de 1’ appel
de la Saskatchewan est confirmé et le pourvoi est
rejeté avec dCpens.
Pourvoi accueilli avec dJpens, -
les
juges
GoNTHrrn, BAsmaca, BIr.maE et LEBm. sont
dissidents.
Procureurs del ‘appelant : Robertson Stromberg,
Saskatoon; Quon Ferguson MacKinnon, Sask.atoon.
Procureurs del ‘intimée : Gerrand Rath Johnson,
Regina.
176
175

8 of 29 DOCUMENTS
Counsel:
Indexed as:
Michalak v. Biotech Electronics Ltd.
Between
Stefan Michalak and Nigel Verity, petitioners, and
Biotech Electronics Ltd., and
Juergen Puetter, Harald Mueller, Rudolph Schury, Dietrych
Puetter, Julie Ann Traczyk, Paula
Schury, Brigitte Puetter, 1345
Yonge Ltd., 130788 Canada Inc., Frédérick El. Sparling, le
ministre de l’Industrie du Commerce et du Tourisme, Ontario
Securities Commission, Quebec Securities
Commission and Quaranty
Trust Company of Canada, mis-en-cause, and
Marie-Louise Parent-Johnson, misc-en-cause
[1986] Q.J. No. 1882
No. 500-05-007134-867
Quebec Superior Court (Civil Division)
District of Montreal
MartinJ.
Heard: September 12, 15, 16 and 17, 1986
Judgment: October 7, 1986
A. Campeau and J.L. Wolofsky, for the petitioners.
M. Freiheit and I. Paquette, for the respondent.
L. Deshaies and S. Azancot, for the mise-en-cause Guaranty Trust Company of Canada.
C. Corriveau, for the mise-en-cause, Marie-Louise Parent-Johnson.
M. Bittichesu, for the mise-en-cause, Frédarick H. Sparling.
(IJupont, Breton & Proulx), for Quebec Securities Commission.
Page 1 of7
l,++,.• 111Q o(m/(’f/1Pa11 /dpUvprv/Pviiitfln 1c’Ni1eSize=55579&iobHandle4 841%3A917059 07/12/2006

REASONS FOR JUDGMENT
Page 2 of 7
I MARTIN J.:-- On September 17th last, by summary judgment I maintained the respondent’s exception to dismiss petitioners’ application
under s. 234 of the Canada Business Corporations Act, S.C. 1974-75-76, c. 33 as amended (hereinafter C.B.C.A.). My reasons for that decision
4’ollow.
2 The pertinent facts of this matter which at this stage must be taken as being true may be summarized as follows:
3 Biotech Electronics Ltd. was incorporated in 1977 under the C.B.C.A. The applicants together with several others were minority
3hareholders in Biotech from 1977 until March 31, 1984. They also allege that they played an active role in the growth and development of
Biotech from its inception until 1982.
I The circumstances giving rise to the present application may be traced to 1981. In September of that year during the course of the annual
general meeting of shareholders a proposal was made by the president and major shareholder Juergen Puetter aimed at modifying the share
structure of Biotech and replacing same with an unlimited number of common shares all without par value. According to the applicants that
roposal, while having been approved in principle, was nevertheless made subject to a further condition to the effect that the existing
shareholders- have a right to acquire newly offered shares in proportion to their current holdings. According to the petitioners when the minutes
of the meeting of September 25, 1981 were published they failed to reflect the condition regarding that pre-emptive right which the applicants
considered so crucial to their respective positions. Succinctly put the applicants contend that the respondents reneged on that undertaking and
illege that all subsequent efforts to have the minutes corrected proved fruitless. The matter was again raised that the next annual general
.neeting in late 1982 but was not satisfactorily resolved. From that point on relations between the parties deteriorated sharply.
3 Applicants sought throughout to exercise a degree of surveillance over the management and operations of Biotech and, with some
onsiderable difficulty, managed to obtain substantial information in relation to the operations of the corporation. Much of the information
brought to light is now alleged in support of the present application. In certain instances it was gleaned from documents obtained from the
Corporation and to which the applicants, as shareholders, were entitled to have access. Some of it was provided by Puetter and other officers of
3iotech at annual general meetings. Some was included in replies to written requests for information forwarded to petitioners by the
.:orporation through its legal counsel Me Marie-Louise Parent-Johnson. In other instances information was supplied either by Puetter, Mueller
or other officers verbally in reply to specific questions posed by the petitioners.
For the purpose ofthese reasons for judgment I do not need to reproduce the long list of complaints which, in the applicant’s view, add up
LO the “oppression” complained of. These are set out in paras. 8 to 11 inclusive of the amended application. Furthermore paras. 12 and 13 of the
application incorporate by reference all the facts set out in paras. 17 to 111 of the amended declaration in the civil proceedings instituted by the
pplicants and three others against certain of the respondents and others before the Superior Court for the district of Montreal.
7 It is significant to note that the majority of these complaints relate to the period from late 1981 until March 1984 prior to that point in time
when the applicants elected to sell their shares to Puetter and others. It was this sale, or more particularly the circumstances surrounding it,
Arhich prompted the applicants together with three other individuals to institute the proceedings referred to in the foregoing paragraph. These
proceedings have for their object the setting aside of the sale and claim a substantial sum of money in compensation and as damages. I will
have more to say later about these proceedings.
I should perhaps make the following qualification as far as the period to which the allegations of”oppression” relate. In para. 35 of the
amended declaration plaintiffs allude to irregularities in the securities register presented to the Quebec Securities Commission in relation to the
respondents public offering ofNovember 27, 1984. Similarly paras. (j) and (k) of pam. 11 of the application also relate to incidents occurring at
east in part after the sale of the applicants’ shares. These allegations deserve comment and I will return to them later.
9 As relations further deteriorated between the applicants and the respondents the former, during the early months of 1984, began to consider
whether or not it would be in their best interests to attempt to sell their shares and move on to other endeavours. To this end they commenced
liscussions with one Jan Cloetta. An offer of $25 per share was made to the applicants by Puetter and others through Cloetta on March 27,
1984 which was accepted on April 19, following. The principal factor motivating them to sell was the considerable knowledge which they had
accumulated concerning irregularities extravagance and abuses in the day-to-day operations of Biotech. The extent of that knowledge is set out
n para. 181 of the amended declaration in the civil proceedings. It will be appropriate to reproduce it.
- I__Il
“181. In view of all the foregoing, namely the illegal dilution of the shares, the failure to include the pre-emptive
right notwithstanding a vote thereon, the dilution of profits by the extravagant purchase of airplanes, the
hostility evidenced by the directors and majority Shareholders towards Plaintiffs, the threat of possible
escrow of their shares for two (2) to three (3) years, the likely drop in the value of the shares as soon as the
bubble in sales created by the said humidifiers burst, as predicted by Defendants Juergen Puetter and Jan
Cloetta, and most importantly in view of and reliance upon the establishment by an honoured and
respected accountant of the alleged fair market value ofthe shares at 1 5,00$ each, Plaintiffs herem all
m__ J_n1 Afl1Afl

agreed to accept the offer and sell their shares.”
Page 3 of 7
10 Some months following the sale petitioners became aware of facts which led them to believe that they had been induced to sell their
shares as a result of fraudulent misrepresentations made by Cloeta and orchestrated by Puetter. As a result in April 1985 the petitioners together
with the three others to whom I have alluded instituted proceedings under no. 500-05-003585-856 of the records of this Court. In sum and
substance they contend that Cloetta, Puetter and others induced them to sell their shareholdings at a price far below the real value of same and
that they are in consequence entitled to both compensation and damages. While the applicants ask to have the sale of April 19, 1984 set aside
they do not seek to do so with a view to recovering their shareholdings in Biotech. Paragraph 239 of the amended declaration makes this clear.
In my view this allegation is crucial to the question of the status of the applicants or more particularly their interest in bringing the present
application. Paragraph 239 of the amended declaration states as follows:
“239. In addition, it is clear that in view of all of the circumstances Plaintiffs could never at the present time or
in the future accept back their said shares since, after the above mentioned happenings, they could have no
confidence whatsoever in the present Board of Directors and major Shareholders and as minority
Shareholders they could do almost nothing about it, continuing to live with the said shares with most
serious apprehensions.”
11 The civil proceedings are presently pending. According to counsel the respective defendants have pleaded and extensive discoveries have
been conducted, although this aspect is by no means complete.
12 The present application was originally presented before Tannenbaum J. sitting in practice during the latter part of August. In view of the
fact that a lengthy hearing was anticipated the matter was referred to me to be heard on its merits commencing on September the 23rd. In the
course of a pre-trial conference on September the 4th the respondents intimated their intention to move for the dismissal of the application since
in their view it was ill-founded on its face. An exception to dismiss was served on September the 9th and argument in relation to it took place
on September the 12th. It will be useful to reproduce the eight paragraphs set out in support of it.
1. On or about August 18th, 1986, RESPONDENTS filed an application under Section 234 of the Canada
Business Corporations Act, requesting an investigation under part XVIII of the said law, and further to
the receipt of the report prepared by the Inspector, and pending the rendering of the report the making
of certain interim orders including the sequestration of shares ofthe Mis-en-cause;
2. The acts alleged in the Application even if proven, clearly do not constitute oppression within the
meaning of the Canada Business Corporations Act;
3. The acts alleged in the Application even if proven, clearly do not give rise to the conclusions sought;
4. The said Application claiming oppression, is in no way timely, the facts alleged having long ceased,
and is in no way the appropriate recourse for the alleged wrong doing if wrong doing there be, a matter
which is in fact vigorously denied;
5. The RESPONDENTS have already sought another recourse namely a civil action (after having
voluntarily disposed of their shares) where they have had and continue to have a forum for obtaining
any and all information within the possession of the company and its officers and parties alleged to
have committed wrong doing;
6. That furthermore, the present Application raises issues that are already before the Court in other
proceedings where not only are the applicants able to obtain justice if their claims are well founded but
avoid any and all risks for contradictory conclusions if the present Application were to be considered;
7. That on its face the Application is so belatedly taken that its primary purpose is to procure to the
applicants an unfair advantage in relation to the civil proceedings they have instituted;
8. That furthermore the request for interim measures including sequestration of shares is unfounded in
law, on the [facel of the record, not having any of the essential characteristics required for such a
request namely, urgency and reasonable diligence, irreparable injury, disputed claims of ownership, etc.
13 Prior to the hearing on September the 12th counsel for the applicants served an amended application incorporating an additional
paragraph (para. 32) seeking an “Order to Rectify The Matters Complained of’. The relief sought is set out in detail in subparas. I to 9
inclusive of para. 32 and in the alternative conclusions (para. 7) of the amended application. On September the 12th, after hearing counsel, I
authorized the filing of the amended application. The matters in relation to which applicants now seek in their alternative conclusions an
immediate “Order to Rectil,” are substantially the same as the orders sought in pans. 31(4) of the application. Paragraph 31(4) however
contemplates that an investigation will be ordered and in consequence that the orders sought will not be made until the report of the director or
the investigator has been received.
14 It is against the background of the foregoing that it will now be appropriate to consider the respondents’ motion to dismiss. Perhaps the
best starting point is the C.B.C.A. the relevant sections of which provide as follows:
“231. In this Part, ‘action’ means an action under this Act; ‘complainant’ means:
(a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of
a corporation or any of its affiliates,
(b) a director or an officer or a former director or officer of a corporation or of any of its affiliates,
ilI__ Jfl1C —A OTT A1—1 OA I Qt A Al Afl A11 1I1Afl
-

Page4of7
(c) the Director, or
(d) any other person who, in the discretion of a court, is a proper person to make an application under this
Part.
234. (1) A complainant may apply to a court for an order under this section.
(2) If, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any
of its affiliates
(a) any act or omission of the corporation or any of its affiliates effects a result,
(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in
a manner, or
(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner
that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder,
creditor, director or officer, the court may make an order to rectify the matters complained of.
(3) In connection with an application under this section, the court may make any interim of final order it
thinks fit including, without limiting the generality of the foregoing. .
15 Then follows a detailed but not limitative list of orders which the Court may make. Subparagraph (m), it is relevant to note, contemplates
the directing of an investigation under Part XVIII of the statute. Section 222 of part XVIII provides as follows:
“222(1) A shareholder or the Director may apply, ex parte or upon such notice as the court may require, to a
court having jurisdiction in the place where the corporation has its registered office for an order directing an
investigation to be made of the corporation and any of its affiliated corporations.
(2) If, upon an application under subsection (1), it appears to the court that
(a) the business of the corporation or any of its affiliates is or has been carried on with intent to defraud any
person,
(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted,
or the powers ofthe directors are or have been exercised in a manner that is oppressive or unfairly
prejudicial to or that unfairly disregards the interests of a security holder,
(c) the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be
dissolved for a fraudulent or unlawful purpose, or
(d) persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in
connection therewith acted fraudulently or dishonestly,
the court may order an investigation to be made of the corporation and any of its affiliated corporations.
16 The first question which must be considered is that of the status of the applicants to bring these proceedings. In view of the wording of
subpara. (2) of the s. 231 it is clear that the right of the applicants as “former registered holders” to bring this application does not first of all
depend upon the exercising of any discretion on the part of the Court. They have a “prima facie” right to do so conferred by the statute. That
however is not to say that the applicants are automatically shielded from any preliminary challenge to that prima facie right. The application
must, on its face, satisfy other requirements. It must set out, first of all, that the “oppression” of which the applicants complain, whether based
on past incidents or not, exists in fact when the application is heard. In Sparling c. Javelin International Ltd., [1986] R.J.Q. 1073 (Qué.),
Gomery J. put is as follows:
“The use of both the present and past tenses in subparagraphs (b) and (c) is presumed to be deliberate. Thus,
Parliament foresaw the possibility that the Court might use past incidents as the basis of its intervention,
provided that the oppression or unfairness resulting from such incidents exists when the application is heard.”
and later on on the same page:
“The jurisdiction of the Court is limited to the making of orders to rectify the matters complained of. The
Court does not have jurisdiction to intervene in the management of a company’s affairs otherwise.
Presumably if it is not possible to rectify oppression and unfairness, no order should issue.”
17 The recourse contemplated by the Act is not only comprehensive but one which is susceptible of being exercised efficaciously. It follows
that while the inquiry may indeed touch upon circumstances which have occurred in the past or may reach into the past there must nevertheless
exist an interest which is presently being oppressed. This theme is also found in Re Ferguson and Imax Systems Corp. (1984), 47 O.R. (2d)
225, a decision of the Ontario, High Court of Justice where Southey 3. put is as follows:
“If the complainant was entitled to an investigation and the appointment of an inspector at the time of the
prior proceedings, then she was required by the doctrine or res judicata to claim them then. There must be an
end to litigation, and she was not entitled to come back later and ask for relief that she could have claimed at
the time the earlier proceedings were brought.
-
. If the complainant had been unable to satisfy the court that the respondents had appeared to have engaged in
oppressive conduct after the period to which the prior proceedings related, then, in my view, the investigation
should not have been ordered. In considering whether subsequent conduct appeared to be oppressive, the
I ,.-.1,A 1: ID+r’, cc’7O2,hT-T.A11 PAl OZ AOl 7flcO fl711 ‘)/)Ci(1c

Page5of7
court was entitled to take into account the decision in the previous proceedings, but it was obliged to satisfy
itself that there had been subsequent conduct that appeared oppressive. The court was not required to put the
decision of the Court of Appeal out of its mind, but it could not base its order on that decision alone.”
18 A number of other decisions to the same effect were cited. These were: Re Lundie Bros. Ltd., [1965] 2 All E.R. 692; Re Five Minute Car
Wash Service Ltd., [196611 All E.R. 242; Re National Building Maintenance Ltd., [197111 W.W.R. 8; Diligenti v. RWMD Operations
Kelowna Ltd. (1976), 1 B.C.L.R. 36. In my view these decisions must be treated with caution since they deal respectively with the provision of
the Companies Act, 1948 (U.K., 11 & 12 Geo.), c. 38, s. 210 and the British Columbia Companies Act, R.S.B.C. 1960, c. 67 which differ in
their wording from the terms of C.B.C.A. The most which can be said is that these decisions support the general principle that the recourse
contemplated by this type of statute must be timely in the sense that it must be susceptible of correcting an existing wrong.
19 On the balance however I am satisfied that in order for an application to be admissible under the C.B.C.A. the “oppression” complained
-of must be current. Inasmuch as the application, on its face, does not reveal this to be the case it must, in my respectful view fail on that ground
alone. These are, however, other aspects of the matter which, in the circumstances, I should deal with.
20 Mr. Freiheit attempted to argue that the facts alleged in support of the application do not on their face in any event add up to “oppression”
as contemplated by the statute. In support of that proposition he cites in particular Re Five Minute Car Wash Service Ltd., supra, and Re
National Building Maintenance Ltd., supra. Both of these decisions analyze the meaning of “oppression” in the context of the United Kingdom
Companies Act, supra, and the British Columbia Companies Act. With respect these decisions cannot be used as a yardstick to measure the
meaning of “oppression” under the C.B.C.A. since the wording of the latter is not identical. The situation is, I think, summarized by Gomery J.
in Journet c. Superchef Food Industries Ltd., [1984] C.S. 916, at pp. 924-25:
“The oppression of which S. 234 C.B.C.A. speaks has been defined as conduct that is ‘burdensome, harsh and
wrongful’ in a leading English case which has been cited approvingly by Canadian courts, for example in
Redekop v. Robco Construction Ltd., a decision of the British Columbia Supreme Court.
But Art. 234 of the C.B.C.A. contains additional language that has the effect of extending its scope far
beyond the scope of the English legislation upon which the Scottish Co-Operative case was based. In Canada,
the Court need only be satisfied that the business of the Corporation has been conducted in a manner that is
unfairly prejudicial to the interests of some of the shareholders, or that unfairly disregards their interest. It is
no longer a question only of oppression: now the Court is asked to judge upon the fairness of the actions of
management.”
21 In summary, then, the facts alleged are in my view sufficient to constitute “oppression” under the C.B.C.A. save that in the circumstances
‘of the present application they lack that element of “timeliness” so essential to the viability of the application.
22 Quite apart from the foregoing there is a further test which the application must meet and that is the test of the interest of the applicants to
nitiate these proceedings. Quite apart from the fact that the applicants, as former shareholders, may enjoy a statutory right to bring these
proceedings that right, in my respectful view, does not automatically invest them with a sufficient interest. Again if that interest does not appear
from the face of the proceedings to be a viable one then a motion to dismiss will lie.
23 The question of the interest of the applicants must be examined from two different aspects. The first bears upon applicants’ entitlement to
an investigation in the circumstances. Secondly, in view of the amendment, the application must be examined in relation to the applicant’s
interest to ask in the alternative for the relief which they now seek in para. 32 and in para. 7 of the conclusions.
•24 As far as an investigation contemplated by the C.B.C.A. is concerned it will be appropriate to commence with a consideration of the
object of such an investigation. The jurisprudence has established that the object is to permit the discovery of facts in situations where the
applicants have established “prima facie” the existence of”oppression”. In Re Royal Trustco Ltd. (No. 3) (1981), 14 B.L.R. 307 (Ont. FLC.)
Eberle 3. in discussing the scope of the investigation contemplated by the statute put it as follows:
“However, it is clear that an investigation is only an investigation, and is not a proceeding for the
determination of rights. Resort must be had to other sections ofthe Act for that. It seems to me that the
investigation provided for by s. 222 is an investigation which must focus upon facts and, bearing in mind the
complex nature of corporate organization and corporate operations, especially to the discovery and
ascertainment of facts. It seems to me that the investigation provided for by the section is not one which
should concern itself primarily with disputed or uncertain questions of law.”
25 As far as the present case is concerned the facts are well known. It is to be presumed that what has been invoked in the application and in
the amended declaration has not been set down irresponsibly or without any basis in fact. A review of the amended declaration permits me to
arrive at no other conclusion but that the facts. bearing upon the merits of the civil litigation have been out in the open for some considerable
period of time.
26 In the course of his argument Me Wolofsky alluded to the question which arose in the Watergate affair of “who knew what when?” His
point he says is that new facts are coming to light every day as discovery proceedings in the, civil action go forward. In my view that argument
is without foundation and does not justify the ordering of an investigation under the C.B.C.A. In the first place if indeed the facts have not
come to light the application, having regard for the manner in which it is drafted, does not reflect this. Rather it asks for an mvestigatlon to
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S
Page6of7
confirm what is already known. Secondly nowhere is it alleged that the applicants are unable to obtain particulars of the past conduct of the
respondents. As far as I am concerned the applicants have hitched their wagon to the civil action claiming compensation and damages and have
available to them the full range of discovery proceedings contemplated by the Code of Civil Procedure in order to obtain further clarification of
any of the elements which may affect the civil action.
27 What then is the real purpose of the present application? Do they seek compensation? If one considers para. 6 of the conclusions relating
to the orders sought following the receipt of the investigation report one might be tempted to think so. If orders were madein relation to
subparas. (a) and (b) of para. 6 for example this would certainly have a bearing on the price paid to the petitioners for their shares in 1984. This
whole question is however inextricably tied into the civil action for compensation and damages and can be adequately dealt with within the
context of that action. Furthermore, if it is compensation which applicants seek this is difficult to square with para. 16 of the application which
reads as follows:
“16. This Application does not seek that the Court award adequate compensation to Petitioners for the true
value of the shares of Biotech of which they were defrauded nor damages as a result thereof.
However, Petitioners do seek, as duly qualified ‘Complainants’ under the terms of the C.B.C.A., that this
Court order an investigation to be made of Biotech on the grounds that the business and affairs of the
company have been carried on and conducted and the powers of the directors have been exercised in a
manner that is oppressive and unfairly prejudicial.”
28 I find it difficult to believe that in September of 1986 some 2 1/2 years after the sale and almost 2 years after the discovery of the alleged
fraud the applicants, who are no longer shareholders in Biotech and who insist in their amended declaration that they have no interest in
recovering their shareholdings now feel it to be their bounden duty to bring these proceedings in the interest of the company and the current
shareholders. While applicants concern and sense of public duty is commendable it was noticeably absent in the spring of 1984, when, at least
according to the amended declaration, the facts in relation to which the applicants now seek an investigation were well-known. At that time
their primary interest appeared to be to sell their shares for as good a price as they could get in view of their marked lack of confidence in the
manner in which the company was being operated. That indeed is what they did.
29 It is interesting to note paras. 17 and 18 of the application. These paragraphs read as follows:
“17. The proceedings pending in record No:
500-05-003485-856, whether maintained or dismissed and the powers the Court may exercise in conjunction
therewith, do not include the powers enjoyed by the same Court in conjunction with an Application under s.
234 of the C.B.C.A., and presumably, may not be exercised except upon such an Application.
18. Petitioners submit that quite apart from their personal entitlement to adequate compensation and
damages, the conduct of the directors, certain of the officers and the majority shareholders of Biotech,
who are Mises-en-cause herein, must not escape sanction and that the present Application is the only
available recourse under the circumstances.”
30 On the face of the proceedings it appears to me that what the applicants are really attempting to do is to use the wide powers granted to
the Court under the C.B.C.A. to assist them in preparing the civil proceedings. That, it is trite to say is not the purpose of an investigation under
the C.B.C.A. Rather the purpose is to permit the Court in the light of the results of the investigation to make orders to protect the aggrieved
shareholders.
31 1f as para. 18 suggests, it is the imposition of sanctions which applicants seek then that is a matter of public order which, in the
circumstances, falls within the domain of the director, Mr. Sparling. The director it should be noted has, at this stage, declined to intervene
although he has intimated his continuing interest should be proof in the civil proceedings confirm that there is any basis for his taking action;
32 As far as the alternative conclusions are concerned these as I have said in substance seek no more than the orders sought in para. 6 of the
conclusions following receipt of the investigation report. The difference simply is that they seek these orders now.
33 From a review of the application and the exhibits I cannot conclude that what is sought in para. 32 is sought in the interest of the current
-shareholders at all. One would, in my respectful view have to be naive indeed to come to that conclusion. Rather in the light of the
condemnation sought in the civil proceedings I can come to no other conclusion than that, contrary to what applicants allege, the alternative
-conclusions are sought solely in their own interest. I can see no valid reason why the financial ramifications of the respondents’ wrongful acts
in relation to which the applicants now seek “Orders” cannot be adequately compensated, in the pending civil proceedings. Put another way if
the relief which they seek is sought in their own interest, then the civil proceedings provide a perfectly adequate vehicle through which to claim
it. If, on the other hand, it is the current shareholders whom they seek to protect, and as I have said one would have to be naive to believe that,
then I do not think they have a sufficient interest to bring the application. They are in a classic “catch-22” situation indeed.
34 As far as para. 5 of the conclusions of the application is concerned in relation to the seizure or sequestration of shares currently being held
in escrow I have nothing to add to what I said in my decision of September22 last. In view ofthe conclusion which I have reached the question
is, in any event academic.
35 One of the objectives of Part XIX of the C.B.C.A. is to furnish to those having a sufficient interest with a current effective remedy. As a
general rule proceedings instituted under the statute are subject to particularly close scrutiny when the applicants, as is the case here, are not
Ao1’7nc0 fl7I1/1CftrZ

Page 7 of7
shareholders and have already chosen to exercise an alternative remedy capable of adequately compensating them. The statute ought not to be
usedas a spring-board from which to prosecute pending civil proceedings. As I have been at pains to underline discovery in all its forms is
already available to the applicants in the civil proceedings. To authorize an investigation now would be to tantamount to ordering pre-trial
“enquête” at substantial cost to the state which would serve no purpose other than to permit the applicants to arm themselves for the trial.
36 I do not wish to be interpreted as saying that proceedings under the C.B.C.A. cannot in any circumstances be co-existent with a civil
action. That it is not the case at all. Furthermore I am in agreement with Mr. Campeau that there is not “us pendens” between the present
application and the civil action. I limit myself to stating that in the circumstances of the present application there is, on the face of the
proceedings, no basis for an investigation and furthermore the trial of any issue in relation to the issuing of an “order” at this stage would
needlessly frustrate the task of the Judge eventually called upon to hear the civil proceedings.
37 In reviewing the facts ofthis matter I referred to certain allegations particularly those set out in para. 35 of the amended declaration
concerning the securities register presented to the Quebec Securities Commission and to paras. (j) and (k) of para. 11 ofthe application. These
facts relate at least in part to incidents which occurred after the sale of the applicants shares. These allegations, because of their nature, have
given some cause for reflection as to whether they justify the appoinlment of an inspector at this time. I do not think so. As I have said at some
length the purpose of such an inspection is to discover facts. The applicants in their civil proceedings and indeed in the present application
allege specifically not only the falsification of the share registers between the late seventies and the summer 1984 but also that the directors of
Biotech with full knowledge of these false entries, presented the share registers to the public as being true and accurate. In the face of these
apparently known facts what purpose could a further investigation possibly serve.
38 If these allegations are substantiated what is brought into issue is, as I have said, a question of public order which in my view is properly
the domain of Mr. Sparling. The director in his letter of August 5, 1986 to Mr. Campeau has declined at this stage to become voluntarily
involved. At p. 3 of his letter he makes the following observations:
“The nature of the case as revealed by the information provided does not appear to justify the involvement of
the Director, either by an application to Court under the C.B.C.A. or by my nomination as inspector under
section 223. I do not consider it appropriate to take part in the selection and nomination of the Inspector in
connection with your application.
We do however have a possible role in following up those aspects of your complaint which allege specific
improprieties related to corporate records such as minutes of shareholders’ meetings and the securities
registers. It seems advisable, however, that we defer any action in this regard in order not to prejudice the
civil action already under way and since the correctness of your allegations of falsification will presumably
be one of the elements of thecase and subject to verification by any Inspector appointed.”
39 I am inclined to agree with the director and I do not feel, in the circumstances, that there is any purpose to this aspect being investigated
under the aegis of the C.B.C.A. at this stage. If in the course of civil hearing the plaintiffs’ proofjustifies further action, then it may be urged at
that time.
40 It is for these reasons that in my decision of September 17, 1986 I maintained the respondents’ exception to dismiss and dismissed
applicants’ amended application with costs “sauf recours”.
MARTIN J.
qp/s/nnb
iii ii i:
I11I1fl(i

98 WEsm1 Wux REPORTS [1997] 5 W.W.R.
[Indexed as: Schafer v. International Capital Corp.]
REGINALD SCHAFER (Applicant) and
I?fl’ERNATIONAL CAPITAL CORPORATION,
GRANT J. SCHARFSTEIN & ROBERTSON STROMBERG (Respondents)
Corporations —
Saskatchewan Court of Queen’s Bench
Judgment —
Baynton J.
November 15, 1996.
and procedure in actions involving corporations —
Practice In
Authority Applicant being
removed as corporation’s sole director and Revenue Canada seizing and selling
stitution of proceedings —
applicant’s shares in corporation —
to institute proceedings —
Corporation
bringing action against ap
plicant for investment losses —
applying for leave to bring derivative action in
Applicant’s third party claim against lawyers
being dismissed — Applicant
Application dismissed — Applicant not
having sufficient interest and action not being n corporation’s best interest —
Not being established that applicant was acting in good faith.
corporation’s name against lawyers —
The applicant was the president and sole director and voting shareholder of the
investment corporation from 1988 until 1993. During that period of time, the cor
poration solicited and acquired approximately $18 million in investment funds,
which it invested in various ventures, including those owned and controlled by the
applicant. In particular, the corporation loaned $13 million to one of the applicant’s
ventures. The venture was ultimately petitioned into bankruptcy by the corporation
and Revenue Canada. By court order, the applicant was ultimately removed as the
corporation’s sole director, and the share capital of the corporation was restructured
in order to give the foreign investors control of the corporation which was totally
funded by their investment. It was determined that the applicant had not acted openly
or in good faith in the management of the investments and affairs of the corporation,
and that his conduct was oppressive to the security interests of its non-voting foreign
investor shareholders. The applicant’s shares in the corporation were eventually
seized and sold by the sheriff pursuant to a writ obtained by Revenue Canada. He had
no remaining or residual share holdings, nor other financial interests, in the corpora
tion. The corporation brought an action against defendants, including the applicant.
The applicant brought a third party action against two lawyers, claiming contribution
from them for any damages awarded against him in the main action. He argued that
the lawyers gave bad advice to the corporation, which caused it to suffer its invest
ment loss in his venture. The third party claim was subsequently struck out on the
basis that it was, in essence, a claim made on behalf of the corporation. The applicant
subsequently applied for leave to bring and conduct a derivative action in the name
of the corporation against the lawyers for breach of contract and negligence.
Held — Application dismissed.
The applicant did not have a sufficient interest to justify an order granting
leave. He could not receive a benefit through the corporation even if the derivative
action were permitted and were successful. In addition, the action would not be in the
interests of the corporation. It would prejudice the continuation of the corporation’s
action against the applicant because of the significant additional expense and the
considerable delay that would result. The applicant’s conduct established a
14

Schafer v. Tnt. Capital Corp. [Sask.J Baynton 3. 99
deliberate effort on his part to further his own interests rather than those of the
corporation. Accordingly, it was not established that he was acting in good faith.
Cases considered
Bellman v. Western Approaches Ltd. (1981), 33 B.C.L.R. 45, 17 B.L.R. 117, 130
D.L.R (3d) 193 (CA.) — considered.
Jacobs Farms Ltd. v. Jacobs (April 23, 1992), Doe. 92-CQ-17714 (Ont. Gen. Div.) —
considered.
Johnson v. Meyer (1987), 57 Sásk. R. 161 (Q.B.) — considered.
LeDrew v. LeDrew Lumber Co. (1988), 72 Nfld. & P.E.I.R. 71,223 A.P.R. 71 (Nfld.
T.D.) — considered.
Michalak v. Biotech Electronics Ltd., 35 B.LR. 1, [1986] RJ.Q. 2661 (S.C.) —
considered.
Tsui v. International Capital Corp. (1993), 114 Sask. R. 1 (Q.B.) —
considered.
United Copper Securities Co. v. Amalgamated Copier Co., 244 U.S. 261, 37 S.Ct.
509, 61 L.Ed. 1119(1916) — considered.
Vedova v. Garden House Inn Ltd. (1985), 29 B.L.R. 236 (Ont. H.C.) —
Statutes considered
Business Corporations Act, R.S.O. 1990, c. B.16 —
Business Corporations Act, The, R.S.S. 1978, c. B-10 considered
—
s. 231 — considered.
s. 231(b)(ii) —
s. 232— considered.
s. 233(a) —
s. 233(b) —
considered.
considered.
considered.
considered.
Canada Business Corporations Act, R.S.C. 1985, c. C-44 — considered.
s. 232— considered.
s. 233 —
considered.
Corporations Act, R.S.N. 1990, c. C-36 — considered.
applied.
APPLiCATION for leave to bring and conduct derivative action.
RJ. Leibel, for Reginald Schafer (“Schafer”).
W.D. Preston, for International Capital Corporation (“ICC”).
BJ. Scherman, for Grant Scharfstein and Robertson Stromberg (“the
lawyers”).
NOvember 15, 1996. BAY]’rroN 3.: —
(Doc. Saskatoon Q.B.G. 1765/96)
Schafer
applies pursuant to s.
232 of The Business Corporations Act, R.SS. 1978, c. B-1O, for leave to
bring and conduct a derivative action in the name of ICC against the
lawyers for breach of contract and negligence..
Issues
2 The issues raised by the application are:

100 WEsTEiu. WEEKLY REPORTS [199715 W.W.R.
1. Whether Schafer, being a former director and shareholder of ICC with
no remaining interest in the corporation, has a sufficient interest in the
matter to be considered as a “complainant”.
2. If so, whether he has rebutted the sound business judgment presump
tion that the informed and impartial decision of the directors of ICC not to
sue, is in the interests of the corporation.
3. If so, whether he has established that he is acting in good faith.
4. If the application is denied, whether a special order respecting costs
should be made against the applicant.
3 The events surrounding the continuing litigation involving Schafer
and ICC arid other corporations are complex and convoluted. Even a
generalized account of them can scarcely be termed a summary. However
a synopsis of the pertinent background facts is essential to put the various
issues raised by this application in proper perspective. The issues are not
independent of one another and they should be determined within the
context of all the past and current litigation.
Facts
a. Schafer’s Relationship with ICC
4 ICC is an investment corporation that was set up in 1988. Until
February 1993 Schafer was the president and sole director and voting
shareholder of ICC. During these years ICC under Schafer’s direction
solicited and acquired approximately $18,000,000 in investment funds
from over 100 foreign investors pursuant to the Immigrant Investor
Program. The funds were then invested by ICC in various ventures, in
cluding those owned and controlled by Schafer such as the Willows Golf
Corporation (“Willows”). More will be said later about this investment
which is the focus of this application.
5 Schafer’s control of ICC was not relinquished voluntarily. He was
removed as its sole director on February 18, 1993, and the share capital of
ICC was restructured by order of Mr. Justice Barclay in Tsui v. Inter
national Capital Corp. (1993), 114 Sask. R. 1 (Q.B.). The reason this
extraordinary action was taken was to give the foreign investors control
of the corporation that was totally funded by their investment. It was
determined that Schafer had not acted openly or in good faith in the
management of the investments and affairs of ICC, and that his conduct
was oppressive to the security interests of its non-voting foreign investor
shareholders.. Schafer’s conduct was characterized in the judgment as
“deceitful”.

8
7
6
Schafer v. mt. Capital Corp. [Sask.] Baynton J. 101
On March 20, 1993, in a fiat lifting the stay resulting from Schafer’s
appeal of the order, Mr. Justice Wakeliñg observed that the management
and control of ICC should not be returned to Schafer pending the out
come of the appeal. This decision was based on the findings of Barclay
J. that Schafer’s conduct fell far short of what could be reasonably ex
pected of a responsible and prudent business person. Schafer’s appeal of
Barclay J. ‘s judgment was subsequently dismissed from the bench.
Schafer’s shares in ICC were eventually seized and sold by the
sheriff in March 1995 pursuant to a writ obtained by Revenue Canada. He
accordingly has no remaining or residual share holdings nor other finan
cial interests in ICC. He has not been an officer or director since February
1993.
b. ICC involvement in Willows
The largest single investment made by ICC from its funds received
from the foreign investors, was to the Willows by means of loans totall
ing almost $13,000,000. Of this amount $11,000,000 was secured by a
mortgage granted by Willows. The mortgage was to be repaid by July 1,
1992 out of the sale of Wifiows golf memberships and housing lots ad
jacent to the golfcourse. By 1992 Willows had begun to experience
serious financial dificulties. A host of builders’ liens were filed and an
order appointing a trustee was granted to the lienholders in July 1992.
The order was not formally issued until November 1992 to give Willows
additional time to meet its obligations. Willows was unsuccessful in ob
taining subdivision approval for the lots that were to be sold to repay the
ICC mortgage.
9 By May 1993 the volume of judgments, builders’ liens, tax liens,
writs, and debts of Willows exceeded $22,000,000. ICC’s mortgage
security for its loans to Willows had been eroded by postponements of
the mortgage in favour of other Willows debts including its Household
Trust mortgage of $2,500,000 and builders’ liens of almost $2,000,000.
These postponements had been granted by ICC at a time when Schafer
was still in control of both ICC and Willows.
10 On June 8, 1993, Willows was successfully petitioned into
bankruptcy by ICC and Revenue Canada. Just prior to the bankruptcy
hearing, Willows filed a proposal acknowledging that it was insolvent.
On January 1994 pursuant to the Household Trust mortgage foreclosure
action against Willows (the mortgage givenpriority to the ICC Willows
mortgage) it was ordered that the Willows property be sold by judicial
sale. The order directed that the sale be effected through a commercial

102 Wssmi WIux REPORTS [1997] 5 W.W.R.
realtor at a minimum listing price of $5,500,000. The üpsèt price was set
at $4,400,000. These values were based on the appraisals filed in connec
lion with the foreclosure. The property was aggressively advertised and
marketed and was sold to the highest tender at $5,001,000. The sale was
confirmed by order on March 31, 1994.
c. ICC’s claim against Schafer
11 ICC maintains that the loss on its investment in Willows exceeds
$18,000,000 net of its realization on its mortgage security. On October
25, 1994, ICC and its preferred shareholders sued Schafer, Richard Leibel
and others for damages in excess of $23,000,000. Schafer’s initial
response was to send a letter dated November 10, 1994 to all the ICC
shareholders, It in turn enclosed a letter from Richard Leibel. The com
bined effect of- the two letters imparted a veiled warning that a Sas
katchewan jury would take a negative view of ICC’s claim if it was con
tinuèd against Schafer and the other defendants. The letters characterized
the ICC shareholders as sophisticated millionaire immigrant investors
who took a risky investment in Saskatchewan in order to become resi
dents and citizens of Canada.
12 Schafer took third party proceedings against the lawyers (Scharfstein
and Robertson Stromberg) claiming contribution from them for any
damages awarded against him in the ICC action. On August 18, 1995,
Mr. Justice Geatros struck out the third party claim on the basis that, as
framed by Schafer, it was in essence a claim made on behalf of ICC. He
concluded that, the only claim disclosed was a derivative claim which
Schafer was not entitled to bring by way of third party proceedings. Such
a claim could only be brought in the name of ICC pursuant to s. 232 of
The Business Corporations Act.
13 Schafer then applied to this Court in September 1996 for an order
removing Scharfstein and Robertson Stromberg as solicitors for ICC in
its damage action against him. He alleges they have a potential conflict of
interest. He had previously filed a complaint in this connection with the
Law Society which was dismissed. The decision on the conflicts applica
tion was heard by me’ immediately after this derivative claim application
and I reserved my decision on it.
The Law
a. The Business Corporations Act
14 A person who applies for leave to commence a derivative action
under s. 232 of The Business Corporations Act has the onus of establish
ing four prerequisites:

Schafer v. [nt. Capital Corp. [Sask.] Baynton 3. 103
1. The applicant must be a “complainant” within the meaning of s.
231(b)(ii), (i.e. a current or former director, officer, or shareholder of the
corporation or any of its affiliates);
2.. The applicant must have given reasonable notice to the directors of the
corporation (or its subsidiary) of his or her intention to apply to the court
for leave to bring an action (or intervene in an action) in the name of the
corporation (if the directors do not bring the action);
3, The applicant must be acting in good faith; and
4. The applicant must demonstrate that it appears to be in the interests of
the corporation (or its subsidiary) that the action be brought, prosecuted,
defended or discontinued.
15 Pursuant to s. 233 (a) and (b) the court may order the complainant or
any other person to control the conduct of the derivative action and may
give directions for its conduct.
16 The respondents acknowledge that reasonable notice was given so
that the second prerequisite is not in issue in this case.
b. Status (and Sufficient Interest Rule)
17 A “complainant” is defined by s. 231 of the Act to mean a former
officer, director or shareholder of the corporation. Such a person has the
status and right to bring an application for leave under s. 232. But simply
having the status to apply is not the end of the matter. Leave will not be
granted to an applicant who does not have a sufficient interest or potential
interest in the corporation which can be enhanced or established by the
commencement of the proceedings for which leave is sought.
18 This rule was set out in Michalak v. Biotech Electronics Ltd. (1986),
35 B.L.R. 1 (Que. S.C.). In that case certain minority shareholders in the
corporation had sold their shares to the president. In a subsequent civil
action they alleged that they had sold their shares because they had been
oppressed by the conduct of the directors. They sued for damages alleg
ing a fraudulent misrepresentation that induced them to sell their shares
below fair value. They did not seek to recover their former shares in the
corporation. Their subsequent application for leave to bring a derivative
action for an investigation and other relief was dismissed. The court held
that the applicants did not have a sufficient interest to be recognized as
“complainants” even though they did have the status to apply. All their
concerns and interests could be addressed in their separate civil action.
19 Martin J.states at p. 9:
In view of the wording of subpara. (2) of the (sic) s. 231 it is clear
that the right of the applicants as “former registered holders” to bring this

104 WEsm WEEKLY REPORTS [199715 W.W.R.
application does not first of all depend upon the exercising of any discre
tion on the part of the Court. They have a “prima facie” right to do so
conferred by the statute. That however is not to say that the applicants are
automatically shielded from any preliminary challenge to that prima facie
right....
20 At p 11 he puts it this way:
Quite apart from the foregoing [a discussion of the requirement that
there must exist an interest which is presently being oppressed] there is a
further test which the application must meet and that is the test of the
interest of the applicants to initiate these proceedings. Quite apart from
the fact that the applicants, as former shareholders, may enjoy a statutory
right to bring these proceedings that right, in my respectful view, does not
automatically invest them with a sufficient interest. Again if that interest
does not appear from the face of the proceedings to be a viable one then a
motion to dismiss will lie.
21 The sufficient interest rule was also applied in Jacobs Farms Ltd. v.
Jacobs, [1992J O.J. No. 813 (Ont. Gen. Div.). The applicant in that case
was a former shareholder who had obtained leave to bring a derivative
action involving matters that took place after he had ceased to be a
shareholder. Blair J. set aside the order granting leave on the basis that
the applicant lacked sufficient interest. He states at p. 15:
On the surface, then, he would appear to qualify as a complainant.
It could not have been the intention of the Legislature, however, to clothe
every former shareholder and every former director with the status of a
complainant for purposes of bringing a derivative action. Such an inter
pretation could lead to absurd situations. There must be some parameters
within which the concepts of “former” shareholder and “former” director
are confined. Those parameters can reasonably be drawn by requiring
some connection between the timing of the events which are the subject
matter of the proposed derivative action and the position of the applicant
as shareholder or director. Here, there is no such connection.
22 Although these two cases involved the Canada Business Corpora
tions Act and the Business Corporations Act of Ontario, respectively, the
applicable provisions of those Acts are similar to those of our Act re
specting this issue. This common sense sufficient interest rule is as ap
plicable in Saskatchewan as it is in other jurisdictions. Such a rule is
required to distinguish between applicants who have a bona fide potential
financial stake through the corporation in the outcome of the derivative
action and applicants who seek leave for an improper purpose.
The latter category of applicant has no right to meddle in the affairs
of the corporation regardless of whether or not the derivativç action is in
the interests of the corporation. It is for this rcason that the sufficient
interest rule respecting an applicant is distinct from the best interests test
respecting the corporation.

Schafer v. hit. Capital Corp. [Sask.] Baynton 3. 105
c. Corporation Interests (and the Sound Business Judgment Rule)
24 Leave to bring a derivative action will not be granted unless the
action sought appears to be in the interests of the corporation. Obviously
the applicant need not prove that the action is in fact in the interests of the
corporation. It is enough if he or she establishes that it is, prima facie, in
the best interests of the corporation that the action be brought. Johnson v.
Meyer (1987), 57 Sask. R. 161 (Q,B.) at 166 quoting from The
Shareholders’ Derivative Action, Stanley M. Beck (1974), 52 Can. Bar
Rev. 159 at 202. Another way of putting it is that an arguable case must
be shown to subsist. Bellman v. Western Approaches Ltd. (1981), 17
B.L.R. 117 (B.C. CA.), at pa 130.
25 In determining this issue the “Canadian version” of the sound busi
ness judgment rule applies. The rule is in &ffect a presumption that if the
directors of the corporation make an informed decision that the dis
advantages outweigh the advantages of commencing the action, then this
is what is in the best interests of the corporation. The decision to com
mence or not to commence an action is like any other business decision
that is ordinarily a matter of internal management to be left to the discre
tion of the directors absent instruction from the shareholders. Courts sel
dom interfere with such intra vires discretion unless the directors are
guilty of misconduct equivalent to breach of trust, or unless they stand in.
a dual relation which prevents an unprejudiced exercise of judgment. If
there is misconduct or a dual relation then the presumption that the deci
sion of the directors is in the best interests of. the corporation will not
apply.
26 The sound business judgment rule was initially articulated by Bran
deis. i. in United Copper Securities Co. v. Amalgamated Copper Co., 244
U.S. 261 (1916) at 264 and has been adopted and applied in Canada in
Bellman, supra. Although the court upheld the decision of the chambers
judge granting leave, it quoted the American rule at p. 131 and then sum
marized it at p. 132 as follows:
The short effect of the American common law appears to be that if
in the honest and impartial opinion of the directors the best interests of the
company do not require it to sue, their decision not to sue will be a bar to
bringing of a derivative suit by a shareholder.
27 The Court went on to acknowledge that although the conditions
precedent of the summary procedure set out in ss. 232 and 233 of the
Canada Business Corporations Act bear a resemblance to the requisites
of the common law, they are different and not subject to the common law
barriers. The court crafted a modified version of the American rule at p.
133:

106 WEsmii’ Wax REPORTS [1997] 5 W.W.R.
- to
How is a Court to exercise its discretion in coming to a determination
that it is satisfied that “it appears to be in the interests of the corporation”
allow the derivative action to be brought? The discretion is a wide one.
However, despite its breadth, nowhere does Parliament say, nor, in my
opinion, was it intended, that the logic Of the common law in cases of this
kind be disregarded. One must first look to the decision of the directors
who, having been given reasonable notice by a complainant in good faith,
decide not to assert a corporate right of action. In this case they refused.
Can it be said that this refusal was given impartially?.
28 The court went on at p. 134 to review whether the directors were
impartial or independent to enable them to have reasonably concluded
that the disadvantages to the company outweighed the advantages. The
court held that the chambers judge could have found that at the time the
directors determined not to sue, they stood in a dual relation which
prevented them from exercising an unprejudiced judgment.
29 This modified sound business judgment rule was adopted and ap
plied in LeDrew v. LeDrew Lumber Co. (1988), 72 Nfld. & P.E.I.R. 71
(Nfld. T.D.) in dismissing an application for leave to commence a
derivative action.
30 Again although these two cases involved the Canada Business Cor
porations Act and the Corporations Act of Newfoundland, respectively,
the applicable provisions of those Acts are similar to those of our Act
respecting. this issue. This common sense evidentiary rule is as applicable
in Saskatchewan as it is in other jurisdictions as it tends to filter out
ill-advised suits at the behest of misguided applicants who meet the other
prerequisites of s. 232. The rule requires an applicant to put forward some
cogent evidence to rebut the presumption that the corporation itself
through its impartial directors knows best what is in its own interests.
Only when this evidentiary threshold is met by the applicant need the
corporation incur the significant cost of presenting evidence on this issue.
As well, the rule shields the court from having to make what are in effect
business policy decisions in instances where no adequate evidentiary
foundation is laid. The decisions as to whether or not there is a prima
fade case cannot be properly made on the conflicting and unsubstantiated
allegations of the parties alone.
d. GoodFaith
31 Leave to bring a derivative action should not be granted unless the
applicant establishes that he or she is acting in good faith. It is bad faith if
the applicant is motivated less by the potential return to the corporation
than by a tactical advantage over it... Vedova v. Garden House Inn Ltd.
(1985), 29 B.L.R. 236 (Ont. H.C.).

Schafer v. mt. Capital Corp. [Sask.] Baynton 3. 107
32 The fact alone that the applicant has a personal interest in the out
come of the derivative action is not evidence of bad faith if that personal
interest is related to and is not contrary to the interests of the corporation.
But a personal interest in the derivative action that is unrelated to or is
contrary to the interests of the corporation, is an indication of bad faith.
Analysis of the Issues
33 Having outlined the facts and the law, I now move on to make the
determinations required by this application. I have dealt with each of the
issues so that my findings are available to the court in the event of an
appeal.
a. Sufficient Interest ofApplicant
34 The applicant in this case does not get past the first condition. He
clearly does not have a sufficient interest to justify an order granting
leave. He was removed as a director and officer by court order in
February 1993. In March 1995 his shares were seized and sold by
Revenue Canada. He has absolutely no residual or potential interest in the
áorporation. There is no way he can receive a benefit in any fashion
through the corporation even if the derivative action is permitted and is
successful.
35 The interest he alleges, if I correctly understand his position, is that
of a potential debtor of the corporation. He believes that if thc derivative
action is successful (i.e. the lawyers are found liable to ICC for the losses
it suffered from its investment in Willows) then that will either extin
guish, reduce, or indemnify him against his potential liability to ICC tin
der its damage action against him. But the issue of what caused the loss
and who is liable for it will be determined in ICC’s action against
Schafer. He will be found liable only for that loss which was caused by
him. He will not be held liable for any loss which was caused by the
lawyers. A derivative action is not required to determine that issue.
b. Interests ofthe Corporation
36 Nor does the applicant meet the second condition. To grant a person
the right to commence and conduct a legal action in the name of and on
behalf of a corporation against the wishes of its directors and
shareholders, is an extraordinary remedy. In the circumstances of this
case the directors of ICC are impartial. They have made an informed
intra vires decision after weighing the advantages and disadvantages of
commencing an action against their lawyers. They have the full backing
of the shareholder investors.

108 WEsmi WEEIu.Y REPORTS [1997] 5 W..W.R.
37 The directors’ decision raises the presumption that it is not in the
best interest of ICC that Schafer be permitted to commence and conduct
the derivative action he proposes. Schafer has not met the evideutiary
threshold of rebutting this sound business judgment rule presumption.
38 In any event no prima facie case or arguable case has been presented
by the applicant. The circumstances surrounding this litigation and the
history of the relationships between the parties gives every indication to
the contrary. The proposed action would place ICC in the untenable posi
tion of putting forward inconsistent pleadings respecting its investment
loss claim. In its action against Schafer, its position is that his negligence
and breaches caused the loss. In its derivative action against its lawyers,
its position (if permitted to be determined by Schafer on its behalf) would
be that the lawyers’ negligence and breaches caused that same loss.
39 Schafer strongly maintains that ICC lost its investment in Willows
because the lawyers foolishly advised ICC to put Willows into
bankruptcy. He believes that in the circumstances of this case it is beyond
dispute that this advice was negligent and represented poor business judg
ment. He also believes that bad Willows been given a little more time, it
could have liquidated the [CC debt including those debts having priority
to ICC. He relies on a gross “appraisal” that includes revenue from lot
sales (despite the rejection of subdivision approval) and fails to take into
account the extent of Willow’s liabilities.
40 I do not share the same enthusiasm about the value and financial
prospects of Willows at the time it was petitioned into bankruptcy. It had
been given several extensions prior to and after the appointment of the
trustee. The property was sold publicly. The price it brought is consistent
with the market value suggested by the appraisals filed in connection with
the court applications. There are a host of considerations not taken into
account by the $13,000,000 “appraisal” relied on by Schafer. In my view
ICC is in a far better position than the court to decide such issues as
whether it got bad advice, what and who caused its investment loss, and
what it should do to attempt to recover that loss. I am more impressed
with the sound judgment of the directors of ICC in. this cOnnection than
with the wishful thinking of the applicant.
41 It is obvious to me that this .pplication has been brought solely for
tactical considerations unrelated to the interests of ICC. The reason the
applicant wants to bring a derivative action has little to do with the inter
ests of the corporation but has much to do with the interests of the ap
plicant in his capacity as a defendant iii the action commenced against

Schafer v. hit. Capital Corp. [Sask.] Baynton 3. 109
• him by ICC. If he is allowed to commence and conduct the derivative
action he will accomplish two things. First, it will benefit him by
prejudicing ICC’s credibility and chance of success in its action against
him. Secondly it will benefit him by forcing ICC to retain new coisel.
42 This in turn will prejudice the continuation of ICC’s claim in two
ways. Significant additional expense will be incurred by new counsel in
acquiring a working knowledge of the convoluted history of past events
and the volumes of documents generated by the litigation. The time re
quired in these circumstances to gain a working knowledge of the issues
will considerably delay the prosecution of the, claim in a timely fashion.
c. Good Faith ofComplainant
43 The applicant fails to meet this condition as well. He submits that he
is demonstrating good faith in now applying to bring a derivative action.
He alleges he is doing what he was invited to do by Geatros . in the
judgment dismissing his third party claim against the lawyers. This sub
mission has no merit. It is evident from the reasons of Geatros 3. that he
in no way passed judgment on themerits of any derivative action applica
tion that might be brought by Schafer. He simply observed that the nature
of the claim put forward in the third party proceedings against the
lawyers could not be made by Schafer personally but could only be
brought by or on behalf of ICC.
The substance of the third party claim framed by Schafer was that
the third parties gave bad legal advice to ICC which caused it to suffer its
$18,000,000 investment loss in Willows. The claim was in effect for
breach of contract and negligence. The entity allegedly wronged by bad
advice was ICC and not Schafer or the other defendants.
45 The judicial pronouncements previously made respecting the ap
plicant, his involvement as a defendant in an action brought against him
by ICC, and the nature of the actions he has taken in the various lawsuits,
clearly indicate to me that his application has not been brought in good
faith. His letters to the investors, his action to remove ICC’s lawyers from
the file, and his previous shoddy treatment of the investors, all point to a
deliberate effort to further his own interests rather than those of the cor
poration on whose behalf he purports to act. In these circumstances, the
very suggestion that he acts in good faith is in itself an indication of a
complete absence of good faith.

110 WEsmtT WEa,Y REPORTS [1997) 5 W.W.R.
d. Costs
46 Mr. Preston seeks an order that costs be awarded to ICC on a
solicitor and client basis, that they be fixed, that they be payable
forthwith, and that no further proceedings against ICC be permitted until
the costs are paid in full. The manner in which these proceedings were
brought by Schafer provided ICC with no other alternative but to retain
experienced independent counsel. He understandably was required to
spend a significant amount of time in reviewing the various files and
proceedings before he could give ICC sound legal advice. I am indebted
to him for his research and submissions on the novel points of law dealt
with in this judgment.
47 In my view Schafer’s conduct in bringing this application in the cir
cumstances of this case is an abuse of process and constitutes reprehen
sible conduct deserving of reproof. ICC is entitled to solicitor and client
costs which I fix at $5,520 plus disbursements of $135.47.
Schafer named the lawyers as respondents in his notice of motion.
This required them as well to retain independent counsel and they seek
the same type of order as that sought by ICC. In the unique circumstances
of this case they too are entitled to the bulk of their solicitor and client
costs which I fix at $5,000 plus disbursements of $750.
49 The costs that have been awarded are payable forthwith. No further
proceedings shall be taken by Schafer against ICC or the lawyers until the
costs have been paid in full. Any proceedings commenced in contraven
tion of this order shall be stayed until further order of this Court.
Conclusion
50 The application is dismissed with costs in the manner specified.
Application dismissed.

Schafer v. International Capital Corp. Page 1 of 2
**Unedjted**
Indexed as:
Schafer v. International Capital Corp.
Between.
Reginald Schafer, appellant (applicant), and
International Capital Corporation, Grant 3. Scharfstein and
Robertson Stromberg, respondents (respondents)
[1997] S.J. No. 374
Appeal Docket No. 2605
Saskatchewan Court of Appeal
Regina, Saskatchewan
Bayda C.J.S., Wakeling and Lane JJ.A.
Heard: May 22, 1997.
Judgment: filed June 4, 1997.
(2 pp.)
On appeal from Q.B. No. 1765 of 1996, J.C. of Saskatchewan.
Company law — Shareholders
—
Shareholders’ rights — Derivative actions:
Appeal by Schafer from the dismissal of his application to bring a derivative action on behalf of the respondent
company. The appellant was a former director and shareholder of the respondent company. The respondent had been
awarded solicitor and client costs. A judge in an earlier proceeding had commented that the appellant should have
brought a derivative action rather than third party proceedings. The appellant took this comment as a suggestion.
HELD: Appeal dismissed except for the order respecting solicitor and client costs. The appellants conduct,
considering the judge’s comments, was not so egregious as to attract solicitor and client costs. The application was
properly dismissed.
Statutes, Regulations and Rules Cited:
Business Corporation Act, R.S.S. 1978, c. B-1O, s. 232.
Counsel:
R. Leibel, for the appellant.
B. Scherman, for the respondents Grant J. Scharfstein and Robertson Stromberg.
W.D. Preston, for the respondent International Capital Corporation.
The judgment ofthe Court was delivered by
1 LANE J.A.:— The appellant, a former shareholder and director of the respondent International Capital
Corporation appeals a dismissal of his application to bring a derivative action on behalf of International Capital
Corporation pursuant to s. 232 of The Business Corporation Act R.S.S. 1978, c. B-b. Subject to the one following
1. !f1 1_1 I1LI1 /1

Schafer v. International Capital Corp. Page 2 of 2
qualification we agree with and adopt, the reasons of the chambers judge. The chambers judge awarded the respondent
osts on a solicitor/client basis. In an earlier proceeding another Queen’s Bench chambers judge commented to the
ppellant that a derivative action might have been a better course for him to follow than a third party proceeding. The
appellant took that as a suggestion. Thus it is not such egregious conduct for the appellant to have brought his
LpplicatiOfl below. We do, however, agree the appellant should be discouraged from proceedings which primarily
ocus on his interest in personal vindication.
12 As a result, the appeal is dismissed but the reference to solicitor/client costs is deleted. Costs are awarded on
Tiple Column V to be paid before any further proceedings not related to the defence of the action are undertaken by the
appellant.
LANEJ.A.
BAYDA C.J.A. -- I concur.
WAKELING J.A. -- I concur.
QLUpdate: 970716
p/d/a1a/DRS

Jacobs Farms Ltd. V. Jacobs Page 1 of 6
Indexed as:
Jacobs Farms Ltd. v. Jacobs
Between
Jacobs Farms Limited, Plaintiff and
Jozef Jacobs, Theo Jacobs, David Mitchell, Mark Jacobs, Johñ
Jacobs, Tim Lindsay, Jack Jacobs, Michael Jacobs, John Moore,
Wendy Carter, Robert Biddle, Jr., Scotlynn Investments Inc.,
Scotlynn Commodities Inc. and Bank of Montreal, Defendants
[1992] 0.3. No. 813
Action No. 92-CQ-17714
Ontario Court of Justice - General Division
Toronto, Ontario
BIairJ.
April 23, 1992
(15 pp.)
W. Graydon Sheppard, for Robert Biddle, Jr., Scotlynn Investments Inc. and Scotlynn Commodities Inc.
Arie Gaertner, for Frans Jacobs and Jacobs Farms Limited.
FACTS
BLAIRJ.:—
Background
The Jacobs family, it seems, has been engaged in one form of litigious warfare or another since 1988. The family
farming operation, a large fruit growing and processing business located near the village of Vittoria, Ontario, has been
the battle ground for this struggle. These proceedings are yet another skirmish in this unfortunate saga.
Jacobs Farms Limited was incorporated in 1963. Its shareholders have always been, and continue to be, members
of the Jacobs family, which immigrated to Canada from Belgium in the early 1950’s. Starting as a small tobacco
growing operation, the business grew and gradually shifted from tobacco into fruit growing and processing. Its on-site
Plant is now the largest single producer of bulk apple juice in Ontario. The Farm also produces Ontario’s single largest
sweet corn and strawberry crops. It comprises some 1,218 acres.
Regrettably, after the death of their mother in 1988 -- their father had died earlier -- the syblings began to quarrel.
Buy-sell provisions in a Shareholders’ Agreement were triggered and the shares of two of the brothers -- Frans and
Alois -- and a third family member, Joseph Bahula, were bought out.
Litigation ensued over the value of the shares of the ousted family members, and resulted in a judgment in their
favour in January 1991. There have been unsuccessful attempts, including proceedings in aid of execution, to recover
on the judgment which is against the remaining family shareholders and not against Jacobs Farms itself. It seems that
the only assets available to satisfy the obligations of the judgment debtors are their respective shares in Jacobs
Farms. This factor will be of some significance when it comes time to consider the derivative nature of this action.
1++.... I/.-.1 ,,t.1n’.,.r ,.,,, in1+w.,../(1 AT( 1,CTT,.$.Th( AfW11 OO’)OL1,+,.,., flfJ1 )I’)fluut

Jacobs Farms. Ltd. v. Jacobs
The Scotlynn Leases and Arrangements
Page 2 of 6
By early 1990 the farming operations had come under some financial strain. In an effort to deal with this situation,
says the Biddle faction of the family, Jacobs Farms entered into certain lease agreements with Scotlynn Investments
Inc., Mr. Biddle’s company. In April, 1990, Jacobs Farms leased all of its assets -- land, buildings, and related premises
-- to Scotlynn for a yearly rental of $480,000 payable at the rate of $40,000 each month. Bank of Montreal, the
company’s banker and major lender, consented. In the Spring and Fall of that year agreements were also entered into
whereby Scotlynn assumed and agreed to pay certain of Jacob Farm’s equipment leases. A number of these were in
default and the equipment was at risk ofbeing repossessed.
Scotlynn, in effect, carried on the farming operations.
These transactions, which are atthe heart of the complaint in this derivative action, were entered into with the full
consent of all of the then shareholders of Jacobs Farms and, as I have indicated, with the consent of its major
creditor. Scotlynn was to, and did, make the lease payments on the equipment. Scotlynn was to, and did, make the
rental payments under the farm lease. Scotlynn was to, and did, arrange for substantial payments to be made, through
it, to other trade creditors of Jacobs Farms. All such payments were thus used to reduce the indebtedness of Jacobs
Farms to the Bank and third party creditors.
In the derivative action, however, it will be alleged that these transactions between Jacobs Farms and Scotlynn
were in reality a scheme to denude the company of its assets (thus ensuring that its shares remained worthless), a
conspiracy to shield the company’s operating funds from its major creditor, and a plot to benefit Mr. Biddle and
Scotlynn, for no consideration, through the transfer of the equipment and funds to them. Based on an affidavit of Theo
Jacobs sworn in a different proceeding, the position was taken before Mr Justice Ground that Scotlynn had
appropriated in excess of $300,000 in payments due and made payable to Jacobs Farms and, in addition, that the value
lost to Jacobs Farms in respect of the transfers or buy-out of leases exceeded $400,000.
Which of these two versions of the events surrounding the leasing transactions is in fact the accurate one is
something that could only be determined at a trial. Suffice it to say at this point that more than one picture is capable of
being drawn from all of the facts. As I shall note later, that prospect was not put fully and fairly to Mr. Justice Ground.
Recent Events
Towards the end of 1990, the Bank took possession of the undertaking of Jacobs Farms, but it re-leased the lands
and buildings to Scotlynn for a term ending February 29, 1992. Scotlynn remained in possession of the lands and
premises after the expiration of the lease and on March 12, 1992, the Bank installed a receiver and obtained an ex parte
order for possession from Mr. Justice Browne at London.
Thereafter, the Bank entered into negotiations with at least two groups for the purchase of the Jacobs Farms’ assets.
One group involved Mr. Biddle. The other involved Frans and Theo Jacobs and one Gabriel DeCloet.
It was in the midst of these negotiations that the application was brought before Mr. Justice Ground by Frans
Jacobs for leave to commence this derivative action in the name of and on behalf of Jacobs Farms Limited and for
interim injunctive relief.
The interim relief requested and granted -- on the basis of the information then before Mr. Justice Ground — was of
the draconian Mareva kind. It froze all of the bank accounts and assets of Mr. Biddle and Scotlynn, prohibited them in
effect from dealing in any way with the fanning operations and even with their own property, and, not insignificantly,
“restrained them from taking an assignment ófBank of Montreal’s rights under its debenture”. V
Frans Jacobs, of course, is one of the brothers who was ousted by other family shareholders in late 1988. He had
had no involvement in the farming operations, or even spoken to his brother Theo, sincethat time until March of this
year. Theo and members of his immediate family control 50% of the shares of Jacobs Farms. Theo and Mr. Biddle
Il_i _1_1 _-__-_
I1
g. 1 - - V V Il

Jacobs Farms Ltd. v. Jacobs Page 3 of 6
have had a falling out. Theo is one of the DeCloet group negotiating with the Bank for the purchase of the Jacobs
Farms’ assets. Theo, who deposes that until his recent departure from the Farm he was its de facto manager and sales
manager for the Scotlynn operations, is also a shareholder who participated in all of the corporate acts and agreements
that are complained of in the action. Although he is the source of the main evidence in support of the Plaintiffs case,
Theo does not come to these proceedings with “clean hands”.
One might be forgiven for wondering whether this has something to do with Frans Jacobs being put forward as the
proponent of these proceedings. It is, perhaps, unnecessary to note in passing that since the Order of March 25, 1992,
the DeCloet group (of which Frans and Theo Jacobs are members) has been the successful bidder in the negotiations
with the Bank.
THE EX PARTE ORDER
The motion before Mr. Justice Ground on March 25th, as I have noted, was brought ex parte. This was done in
spite of its timing in the midst of competing negotiations with the Bank involving solicitors for both family factions; in
spite of its timing in the shadow of another ex parte order obtained by the Bank and the subject of some controversy
between these parties; and in spite of the allegations on which the derivative action is based being known to the Theo
Jacobs group as early as June 1991.
In my opinion the Order of Mr. Justice Ground dated March 25, 1992 must be set aside in its entirety.
THE INJUNCTIVE RELIEF
The ex parte injunction was granted on the basis of evidence which failed to disclose material facts.
Mr. Justice Ground was left with the impression (1) that Mr. Biddle and his company, Scotlynn, had wrongly
denuded Jacobs Farms of its assets for their own benefit, (2) that they had appropriated in excess of $300,000 in
payments due and made payable to the company and acquired the benefit of leased equipment valued in excess of
$400,000 for no consideration, and (3) that the Jacobs family faction of which Mr. Biddle is a member, had agreed to
flow all of the operating profits of the farm through Scotlynn thus ensuring that Jacobs Farms remained assetless (and,
incidentally, its shares worthless) and depriving its creditors of payments that should have been made.
Ground 3. was not told, however, at least with the degree of knowledge that the Applicant possessed -- relying as
he was on the affidavit of Theo Jacobs, who was said to have detailed information on the operations of Jacobs Farms:
(1) that at the time of the farm lease from Jacobs Farms to Scotlynn in April, 1990, Jacobs Fanns
was near insolvency, if not insolvent;
(2) that a number of the equipment leases were in default and the equipment in danger of being
repossessed;
(3) that in addition to paying Jacobs Farms approximately $288,000 on the farm lease (which
went to the Bank of Montreal), Scotlynn paid trade creditors of the company approximately
$162,000 up to March 3 1/90 and a further $498,000 (approximately) between then and March
3 1/92.
Nor was it revealed that the Defendants’ position would be that the leasing transactions between Jacobs Farms and
Scotlynn were entered into to protect the company’s assets from seizure at the hands of its creditors and to enable it to
reduce its debt load to those creditors. This must have been known to Theo Jacobs, as he was involved as a central
participant in all of these transactions at the time.
It is well settled that an applicant for an ex parte injunction, particularly one in the nature of a Mareva injunction,
must make full and frank disclosure of all matters in the knowledge of the applicant which are material for the court to
Il

Jacobs Farms Ltd. v. Jacobs Page 4 of 6
grant an injunction, and must fairly state the points that would be made against it by the defendant: Chitel v. Rothbart
et aL, (1982) 39. O.R. (2d) 513, at p. 528. I am satisfied that the Plaintiff failed on both of these requirements in this
case, and the ex parte injunction granted by Mr. Justice Ground must be set aside on that basis.
Technically, that Order has already been set aside by the Order of Keenan 3. dated March 30, 1992, except for one
paragraph which has since lapsed with the effluxion oftime. Keenan J. imposed his own injunctive terms, including the
payment into Mr. Sheppard’s trust account of the sum of $250,000 by Mr. Biddle and Scotlynn and an Order enjoining
the encumbering or disposing of assets previously owned or leased by Jacobs Farms. In the circumstances, however,
Mr. Justice Keenan’s Order was in effect a continuation of Mr. Justice Ground’s Order in a different form, and was
treated by the parties as such. The injunctive relief imposed by Keenan 3. therefore falls along with the Order of Mr.
Justice Ground.
The Plaintiffhas agreed that the $250,000 may be released to Mr. Biddle and Scotlynn, and for greater clarity I so
order.
THE DERIVATIVE ACTION
Mr. Justice Ground’s Order granted Frans Jacobs leave, under s. 246(1) of the Business Corporations Act, R.S.O.
1990, c. B.16, to bring this action in the name and on behalf of Jacobs Farms Limited. With deference to Justice
Ground, in my opinion leave should not have been granted for the following reasons:
Notice
(1) no notice was given to the directors, as required by s. 246(2) of the Act, and the evidence did
not establish that it was not expedient to give such notice in order to justify an ex parte
application under s. 246(3);
(2) Frans Jacobs is not a “complainant” within the meaning of s. 245(b) of the Act, and thus had
no standing to apply to the Court for leave to bring the action under s. 246.
The Act is clear that 14 days notice must be given to the directors of the corporation of the intention to apply for
leave, unless it can be shown “that it is not expedient to give notice as required”. In addition, the Court must be
satisfied that “the directors ... will not bring [or] diligently prosecute the action.”
Apartfrom the general allegations of bad faith and conspiracy against the directors and officers of the corporation,
the sole evidence directed to this latter point is contained in paragraph 90 of Frans Jacobs’ affidavit. He says: “I believe
that the present directors of JFL will not bring the necessary proceedings against the Bank, Biddle and Scotlynn.” In my
viewthat bald statement is insufficient to satisfy either the test under s. 246(2)(a) or the test for an ex parte application
under s. 246(3) of the Act.
Standing
Although I have some reservations in both respects, I need not dwell on whether the Applicant has met the further
tests of s. 246(2)(b) and (c) -- that he was acting in good faith, and that it appears to be in the interests of the
corporation that the action be brought -- because in my opinion Frans Jacobs does qualify as a “complainant” within the
meaning of s. 245(b) of the Act, in the circumstances of this case. His interest, if any, in the affairs of the corporation
istoo remote.
- II
“Complainant” is defined, in s. 245(b) of the Act, as:
(i) a registered holder ... and a former registered holder ... of a security of a corporation ...;
1 1_I I1 .. I -
1I

Jacobs Farms Ltd. v. Jacobs Page 5 of 6
(ii) a director or an officer or a former director or officer of a corporation ...;
(iii) any other person who, in the discretion of the court, is a proper person to make an application
under this Part.
Frans Jacobs is a former shareholder and a former director of Jacobs Farms Limited. On the surface, then, he
would appear to qualify as a complainant. It could not have been the intention of the Legislature, however, to clothe
every former shareholder and every former director with the status of a complainant for purposes of bringing a
derivative action. Such an interpretation could lead to absurd situations. There must be some parameters within which
the concepts of “former” shareholder and “former” director are confined. Those parameters can reasonably be drawn
by requiring some connection between the timing of the events which are the subject matter of the proposed derivative
action and the position, of the applicant as shareholder or director. Here, there is no such connection. The events which
are the subject matter of the action all took place well after Frans Jacobs ceased to be a shareholder or director. It
cannot even be said that they affected the valuation of his shares, because that value was fixed as ofNov. 1987.
It falls to be determined, therefore, whether Frans Jacobs is “a proper person” to make the application “in the
discretion of the court”. Mr. Gaertner’s submissions were twofold in this regard. Firstly, he argued that Frans Jacobs is
a creditor of Jacobs Fanns. Secondly, and more substantively, he argued that Mr. Jacobs is a judgment creditor of the
remaining family shareholders and that their only assets are their shares in Jacobs Farms; accordingly, so the
submission went, Mr. Jacobs has an interest in ensuring that the assets of the corporation are not denuded, thus
enhancing his hopes ofrecovering on his judgment.
It has been held that a creditor may be a proper person to bring an action: Constitution Ins. Co. of Canada v.
Kosmopoulos (1987), 36 B.L.R. 233, at p. 253 (S.C.C.): R. v. Sands Motor Hotel Ltd., [19851 1 W.W.R. 59 (Sask.
Q.B.). The Legislature, however, did not see. fit to designate “creditors” in the class of complainants as of right, and it
must not have contemplated that they would in all cases qualify for that standing. Whether they do is a matter for the
Court’s discretion, having regard to all the circumstances. Here, Frans Jacobs is a minor creditor of the corporation
through an outstanding shareholders loan of approximately $5,000 -- a relatively minuscule obligation, given the
overall indebtedness of Jacobs Farms. I am not prepared to hold that a non-arms length debt of that nature is sufficient
to provide Mr. Jacobs with standing as a “complainant”, particularly where the complaints in the action have nothing to
do with the circumstances giving rise to that debt or its liquidation.
The more difficult question is whether Mr. Jacobs’ status as a judgment creditor of the remaining family
shareholders for the balance owing in payment for his shares, provides him with such standing. I conclude, in all the
circumstances, that it does not.
In Re Daon Development Corporation (1984) 54 B.C.L.R. 235, the British Columbia Supreme Court had to
consider whether a holder of a debenture issued pursuant to a trust indenture was a proper person to bring a derivative
action. The statutory wording was quite similar to that of the Ontario Act. Mr. Justice Wallace dismissed the
application. In doing so, he noted the following guidelines for exercising the Court’s discretion, which I adopt (p. 243):
“Obviously the legislature intended that the person making the application must have some
particular legitimate interest in the maimer in which the affairs of the company are managed -otherwise
s. 255 would simply include in the category of persons who could make the application
“any other person”...
Without attempting to limit or define with exactitude the category of person who constitutes a
“proper person” under s. 225(8), I consider the history of derivative actions and the wording of the
section requires that the category be composed of those persons who have a direct financial interest
in how the company is being managed and are in a position -- somewhat analogous to minority
shareholders -- where they have no legal right to influence or change what they see to be abuses of
management or conduct contrary to the company’s interest.” (underlining added)
rcg iiai /iqI’rn

Jacobs Farms Ltd. v. Jacobs
Page 6 of 6
In this case, Frans Jacobs is not in a position analogous to that of a minority shareholder. He does not he have a
“particular legitimate interest in the manner in which the affairs of the company are managed”, at least not in the
corporate law sense. His interest, and concern, are simply those of any judgment creditor. whose debtor has exigible
assets in the form of shares in a company which happens to be in financial difficulties. The fact that he is a former
shareholder in a closely held family corporation who happens to be in the process of making a new alliance with an
existing shareholder, does not make him fall into either of these categories.
CONCLUSION
For these reasons I would set aside the Order of Mr. Justice Ground, both in respect of the injunctive relief granted
and in respect of the granting of leave to commence this derivative action.
Mr. Biddle and Scotlynn brought a second motion for an order directing the return to them of certain equipment
listed in Exhibit C to Mr. Biddlle’s affidavit. Since the action itself falls as a result of my ruling, there is no order in
effect restraining Mr. Biddle or Scotlynn from dealing with the equipment in accordance with the existing agreements
between Jacobs Farms and Scotlynn, in the absence of further proceedings. No Order is therefore required in that
respect.
Costs to the Moving Parties. If the parties wish me to fix them, I may be spoken to.
BLAIR J.

Litz v. Litz [Man.J Krindle 3. 425
[Indexed as: Litz v Litz]
WILLIAM LAWRENCE LITZ and.
SHIRLEY LITZ v. RUSSELL LITZ,
CAROL LITZ and CHRISTINA LITZ
Manitoba Queen’s Bench
KrindleJ.
Judgment—February 9, 1995.
Corporations — Actions by and against corporations — Fraud or oppression —
Sections 231 and 234 of Corporations Act creating code regulating procedure in
fraud or oppression action against corporate directors — Code excluding general
operation of Rules of Court and thus excluding operation of R. 13 regarding
adding parties — Any addition to occur under terms of Corporations Act.
Corporations — Actions by and against corporationsud or oppression —
Father selling his shares in corporate business to two sons — One son later
applying under Corporations Act for oppression remedy against other son —
Father seeking to be joined as party respondent in resisting application —. Act
not permitting him to be joined as anything but complainant.
Corporations — Actions by and against corporations — Fraud or oppression —
Father selling his shares in corporate business to two sons — One son later
applying under Corporations Act for oppression remedy against other son —
Father as creditor seeking to be added as party — Father well secured as
corporation’s creditor — Circumstances giving rise to debt being unrelated to
oppression action — Father’s position as personal creditor of sons being ir
relevant — Court exercising discretion to deny father’s application.
A father resigned as officer and director of the corporate business when he
retired and sold his shares to his two sons. Although they were to repay him, they
allegedly made no repayment after the initial cash payment for the next 16 years.
The father made loans to his sons so they could buy homes as well as a personal Joan
to the corpoiàtion. The latter was not in arrears and was secured by a chattel
mortgage on a crane worth more than the loan balance. The applicant son sued the
respondent son, claiming an oppression remedy under the Corporations Act. The
father, represented by the same lawyer as the respondent, applied under Queen’s
Bench R. 13 as the corporation’s creditor to be added as a party. He wished to argue
that the dispute should be resolved under an earlier dispute resolution agreement.
His position was that the public nature of the dispute would harm the business (and
thus its ability to repay his loan), and that he was better equipped than. an outsider to
know the business and to know his sons.
Held —
Application dismissed.
Queen’s Bench r. 1.02(1) provides that the rules apply to all civil proceedings
unless a statute provides for some other procedure Sections 231 and 234 of the
Corporations Act create a code regulating the procedure to be followed where a
complainant alleges that directors have acted oppressively or in a manner that un
fairly disregards any director’s interest, and empowers the court to rectify the matters
complained of. That code excludes the general operation of the rules and specifically
excludes R. 13’s operation. However, an applicant may still be joined as a party to
an oppression action under the terms of the Corporations Act.

426 WEsTERN WEEKLY REPORTS [1995] 4 W.W.R.
Under s. 231(b), a “complainant” includes a former officer and director of a
corporation. Section 234 indicates that oppression remedies are for the benefit of
persons who claim to have been wronged by a corporation or by its directors in their
capacity as directors. The father advanced no such claim and did not seek to be
joined as applicant for an oppression remedy. He and the respondent were
represented by the same lawyer. Nothing in the Act permitted him to be joined as
party respondent in resisting the application, which was what he really sought.
One ground in s. 234 for making an order is that the actions of the corporation
or its directors unfairly disregard the interests of any security holder or creditor. The
court should not use its discretion to give “complainant” status to a creditor where
the creditor’s interest in the corporation’s affairs is too remote or where the creditor’s
complaints have nothing to do with the circumstances giving rise to the debt. Aside
from the fact that the father did not seek complainant status, to the extent that he was
a creditor of the corporation, he was well secured. The circumstances giving rise to
the debt were unrelated to the oppression action. To the extent that the father was a
creditor of his sons personally, he should look to them for payment. Should the sons’
conduct be impairing their future ability to repay the debts, -that was too remote an
interest to justify the father being added as a party. If the court should order that the
shares be sold to a third party, any right of the father’s as unpaid vendor could be
considered then. The court should exercise its discretion to deny the application,
whether under the Rules or under the Act.
Cases considered
Churchill Pulpmill Ltd. v. Manitoba, [1977] 6 W.W.R. 109, 4 C.P.C. 8 (Man. C.A.)
— applied.
First Edmonton Place Ltd. v. 315888 Alberta Ltd. (1988), 60 Alta. L.R. (2d) 122, 40
B.L.R. 28 (Q.B.) — considered.
McLean v. Compton Agro Inc. (1993), 90 Man. R. (2d) 59 (Q.B.) —
considered.
Michalak v. Biotech Electronics Ltd., 35 B.L.R. 1, [1986] R.J.Q. 2661 (S.C.) —
applied.
Royal Trust Corp. of Canada v. Hordo (1993), 10 B.L.R. (2d) 86 (Ont. Gen. Div.
[Commercial List]) —
Statutes considered
applied.
Corporations Act, R.S.M. 1987, c. C225 (also C.C.S.M., c. C225)
Pt. XIX —
considered.
s. 231 — considered.
s. 232 — referred to.
s. 233 — referred to.
s. 234 —
considered.
Rules considered
Manitoba, Queen’s Bench Rules (1988)
r. 1.02(1) —
R. 13 —
considered.
considered.
Words and phrases considered
creditor

Litz v. Litz [Man.] Krindle J. 427
APPLICATION to be added as party respondent to oppression action
commenced under s. 234 of Corporations Act:
C.R. MacArthur, Q.C., for applicants.
A.J. Stacey, for respondents.
A.J. Stacey, for William Litz, Sr.
(Doc. CI 95-01-86435)
February 9, 1995. KRINDLE J.:— William Lawrence Litz (“William
Litz Jr.”) and his wife, Shirley Litz, have commenced an action for an
oppression remedy under The Corporations Act, R.S.M. 1987, c. C225.
The action is brought against Russell Litz, Russell’s wife, Carol Litz, and
his daughter, Christina Litz. The actual involvement of the spouses and
child is nominal. In fact, this is a dispute between two brothers, William
Litz Jr. and Russell Litz, each of whom owns or controls 50% of the.
shares of R. Litz & Sons Company Limited (“the corporation”). They
acquired one half of those shares from their father, William Litz Sr.
(“Willie Litz”), in 1977 and the remaining half of the shares from their
uncle in 1986.
2 The father of the present protagonists, Willie Litz, seeks to be added
as a party to the litigation. He is represented by the same counsel who
represents Russell Litz. There exists, in some of the documentation
which was entered into at the time of the acquisition of the shares from
Willie Litz, a mechanism which purports to be an alternative dispute
resolution procedure in respect of disputes between the brothers. Under
that mechanism Willie Litz is named as the person to resàlve disputes or,
if the brothers do not both accept his resolution, as one member of a
three-person board to resolve the dispute. I do not intend to say much
about the procedure. I expect that I may have to deal with that procedure,
its. interpretation and its enforceability as between the parties, at a future
time.
3 William Litz Jr. commenced this application under the oppression
sections of The Corporations Act without reference to the alternate proce
dure. Russell Litz and the remaining respondents appeared and respon
ded to the application without reference to the alternate procedure. I
think it a not unfair summary of Willie Litz’s application to be added that
he wishes to be joined in order to advance to the court the argument that
the dispute between the brothers should be resolved under the provisions
of the early agreements rather than in the courts. As well, I do not think
it unfair to Willie Litz to summarize his position as being firstly that the
public nature of the dispute between the two owners of the corporation
will harm the business of the corporation and secondly that he is better
iiiiinn1 thin n nii ilr tn L-ncu, t1-i, h11dn,Q inrl tr l,nx, Ti

428 WESTERN WEEKLY REPORTS [1995] 4 W.W.R.
4 To this point in the proceedings, neither William Litz Jr. nor Russell
Litz has challenged the court’s entertaining the oppression application
brought by William Litz Jr. To the contrary, Russell Litz through counsel
stated that he too would be bringing an application for an oppression
remedy under The Corporations Act against William Litz Jr. Russell
Litz was at that time represented by different counsel. Subsequent to
Willie Litz moving to be added and to his raising the issue of an alternate
means of dispute resolution, Russell Litz discharged his counsel and
retained the same counsel as had his father. I have been advised by coun
sel for Willie Litz and Russell Litz that Russell Litz will be making a
motion to have the court stay proceedings before it by virtue of that alter
nate provision. No such motion has yet been brought and Russell Litz
has appeared before the pourt seeking an interlocutory remedy under the
Act subsequent to my having been advised of his intentions. I include
this paragraph by way of background.
5 Willie Litz brings his motion to be added as a party. under R. 13 of
The Queen’s Bench Rules (the “rules”). William Litz Jr. argues that be
cause The Corporations Act contaIns its own code of procedure with
respect to this type of action, the application of the rules is excluded:
The rules apply to all civil proceedings in the court unless a statute
provides for some other procedure: Rule 1.02(1).
6 The action to which Willie,Litz seeks to be added is an action under
Pt. XIX of The Corporations Act. Specifically, it is an application for an
oppression remedy under s. 234 of that Act. I have been refejd to no
cases which deal directly with the issue whether s. 234 constitutes the
type of code which would preclude the operation of the civil rules. How
ever, counsel has referred me to a consideration by the Manitoba Court of
Appeal of ss. 232 and 233 of the Act dealing with derivative actions in
C’hurchill Pulpmill Ltd. v. Manitoba, [19771 6 W.W.R. 109. Speaking of
the Act generally, Freedman C.J.M., for the court, stated (at p. 116):
The Corporations Act is a very broad and comprehensive piece of legis
lation. It deals with corporations in all their aspects. It repeals earlier
legislation concerned with company law. Its intent appears to be to
provide a code regulating the creation, operation, management, dissolu
tion and other aspezts of corporate existence and corporate power. It is a
statute broad in scope, and should be broadly construed.
In respect of the particular application before the Court of Appeal, Freed
man C.J.M. continued (at p. 119):
In my view the provisions of s. 232, regulating the manner in which a
derivative action may be brought oi in which intervehtidn may be made,
are procedural in character. Section 232(1) does not create a right but

Litz v. Litz [Man.] Krindle 3. 429
rather prescribes the way in which the right may be exercised or enforced,
namely, by application to the court for leave.
The decision in McLean v. Compton Agro Inc. .( 1993), 90 Man. R. (2d)
59 (Q.B.), is not directly on point but by analogy would appear to suggest
that a similar “code” is created by s. 234 of the Act.
7 I have read with care the provisions of s. 234 of the Act. I am of the
view that ss. 231 and 234 create a code regulating the procedure to be
followed where a complainant alleges that the powers of directors have
been exercised in a manner that is oppressive or unfairly prejudicial or in
a manner that unfairly disregards the interest of any director and em
powers. the court to make an order rectifying the matters complained of. I
find that the specific code so created excludes the general operation of the
rules and specifically excludes the operation of R. 13. -
8 That does not fully answer the question of whether or not Willie Litz
can be joined inasmuch as it may well be that a person who properly
brings him/herself within the scope of the action under The Corporations
Act can be added as a party to an action under the Act itself.
9 Section 231 states that “complainant” means:
(a) a registered holder or beneficial owner, and a former registered
holder or beneficial owner, of a security or a corporation or any of its
affiliates, or
(b) a director or an officer or a former director or officer of a corpora
tion or of any of its affiliates, or
(ci) any other person who, in the discretion of a court, is a proper
person to make an application under this Part.
io Willie Ljtz Sr. is a former officer and director of the corporation and
would, on the face of it, appear to be a person who could bring an action
as a “complainant” under s. 231(b). However, he resigned as an officer
and director of the corporation in 1977 when he retired and sold his
shares to his sons. Peterson, D.H., in Shareholder Remedies in Canada,
at p. 2.2, states that s. 234 is intended to provide former security holders,
directors or officers a remedy to seek redress after having been forced out
of the company by some wrongdoing. Certainly a reading of the whole
of the section clearly indicates that the oppression remedies provided are
there for the benefit of persons who claim to have been subjected to
wrongdoing either by a corporation or by directors of a corporation in
their capacity as directors. Willie Litz advances no such claim.

430 WEsmRN WEEKLY REPORTS [1995] 4 W.W.R.
ii I have found to be of assistance in my consideration of the issue of
Willie Litz’s application to be added a decision of Martin J. of the Que
bec Superior Court in Michalak v. Biotech Electronics Ltd. (1986), 35
B.L.R. 1, in which was stated (at pp. 11-12):
Quite apart from the foregoing there is a test which the application
must meet and that is the test of the interest of the applicants to initiate
these proceedings. Quite apart from the fact that the applicants, as former
shareholders, may enjoy a statutory right to bring these proceedings that
right, in my respectful view, does not automatically invest them with a
sufficient interest. Again if that interest does not appear from the face of
the proceedings to be a viable one then a motion to dismiss will lie.
12 It is clear that a proper person may make an application for an op
pression remedy. Although the section does not specifically state so, it
would appear to me to be equally clear that a proper person may be per
mitted to be joined in the making of such an application. Willie Litz is
not seeking to be joined as an applicant. He is in no way alleging that
Russell Litz and the other named respondents have exercised their powers
in a manner that is oppressive or unfairly prejudicial or that unfairly dis
regards the interests of anyone. He is not asking for rectification of the
actions of the directors. As a matter of fact, he and Russell Litz are
represented by the same counsel. Willie Litz seeks in reality to become a
party respondent against the applicants in resisting the application for an
oppression remedy.
13 Nothing in the legislation permits an individual to be joined as re
spondent under the provisions of The Corporations Act. Having said
that, however, I believe it advisable at this stage to deal with the merits of
Willie Litz’s application to be joined as a party, to deal with the merits of
the interest asserted by Willie Litz. I am satisfied that, whether under The
Queen’s Bench Rules or The Corporations Act whether as applicant or
respondent, the application should be denied.
14 Willie Litz claims to have an interest in• these proceedings. We are
dealing with a business that was founded by his father and that has been
in his family since 1903. It is obvious that Willie Litz cares about the
business, has his own perceptions about the merits of the substantive ap
plication and his own views as to how this dispute might best be resolved
insofar as the business is cOncerned. It is equally obvious that he finds
the public nature of the dispute between his soris to be personally dis
tressing. However, caring about something and having a legal interest in
an action are not one and the same thing.

Litz v. Litz [Man.] Krindle 1. 431
15 Willie Litz asserts that he has an interest in this action because he is
a creditor of the corporation. Willie Litz made a personal loan to the
corporation a few years ago. The loan is current. It is not in arrears. As I
read the evidence, all payments due on that loan have been made on a
timely basis. The debt is secured by way of a chattel mortgage on a crane
owned by the corporation, which crane, by Willie Litz’s own admission
on cross-examination, is worth considerably more than the loan balance —
an estimated $100,000 more than the loan balance.
16 There are situations in which creditors are proper persons to make an
application under s. 234. Certainly one of the enumerated grounds in s.
234 for the making of an order is that the actions of the corporation or
directors of the corporation unfairly disregard the interests of any security
holder, creditor, director or officer. Willie Litz does not allege that any
action of the corporation or director of a corporation disregards his inter
est as chattel mortgagee. Rather, what he says is that the applicant, by
bringing this application and making public a dispute that had formerly
been private, may be impairing the viability of the business and may
therefore at some future time affect the ability of the corporation to repay
the debt of the corporation.
17 I note the decision in First Edmonton Place Ltd. v. 315888 Alberta
Ltd. (1988), 40 B.L.R. 28 (Alta. Q.B.), at p. 77, in which McDonald
J. held that a landlord under a lease on which payments were current was
nat a “creditor” for purposes of s. 234 of the Act. It is arguable, based on
that decision, that Willie Litz is also not a “creditor” for purposes of s.
234. I do not accept that argument. Someone who has lent another
money, who holds a promissory note for that debt and who has not been
fully repaid is, in any ordinary usage of the word, a “creditor” not
withstanding that the payments are current. I find that Willie Litz is a
creditor of the corporation. That does not automatically render him a per
son with sufficient “interest” in the proceedings to be added as a party.
18 I agree with the reasoning in Royal Trust Corp. of Canada v. Hordo
(1993), 10 B.L.R. (2d) 86 (Ont. Gen. Div. —
leyJ. atp. 92:
[Commercial
List]), per Far
A creditor is not specifically defined as a “complainant” under the
CBCA and therefore creditors generally are not “complainants” as of
right. The court may use its discretion to grant or deny a creditor status as
a complainant under s. 238(d). It does not seem to me that debt actions
should be routinely turned into oppression actions... I do not think that
the court’s discretion should be used to give a “complainant” status to a
creditor where the creditor’s interest in the affairs of a corporation is too
remote or where the complaints of a creditor have nothing to do with the

432 WEsTERN WEEKLY REPORTS [1995] 4 W.W.R.
circumstances giving rise to the debt or if the creditor is not proceeding in
good faith. Status as a complainant should also be refused where the
creditor is not in a position analogous to that of the minority shareholder
and has no “particular legitimate interest in the manner in which the
affairs of the company are managed”...
19 It goes without saying that in the present case we are dealing, not
with someone who seeks status as a complainant but rather with someone
who, while being neither shareholder nor director, seeks status as a re
spondent. Putting that aside, however, and it is difficult to put aside, the
position of Willie Litz as creditor in respect of the crane has nothing to do
with the oppression action. The loan is current, it is well secured, the
circumstances giving rise to the debt are unrelated to any allegation of
impropriety at issue in the oppression action. To the degree that I may
have a discretion to add Willie Litz as a party because he is a “creditor”
of the corporation under the loan secured by the crane, I decline to do so.
20 Willie Litz asserts that he is a creditor of both Russell Litz and Wil
liam Litz Jr. under an agreement dated January of 1977 and a Letter of
Intent dated August of 1978 pursuant to which agreement Willie Litz sold
his shares to his Sons and under which agreement his sons were to have
repaid him. He states that inasmuch as both sons are dependent upon the
business for their income, the public bloodletting which the oppression
action will generate will hurt the business and therefore impair his ability
to collect the debt due. For that reason he claims to have an interest in
the oppression action and seeks to be. added as a party so that he might
argue that the action should be stayed in favour of the procedure which
would have him alone or him with two others determine the matters in
dispute between the two directors.
21 It is apparent that his position as creditor —
i.e.
unpaid vendor —
under the agreements of January of 1977 and the Letter of Intent of Au
gust of 1978 is much more remote than his position as creditor regarding
the crane. It is not the corporation which owes him money, if in fact he is
owed money. It is the individual directors of the corporation who are
indebted to him.
22 Willie Litz says that he has received no payments from either son
under the agreement and Letter of Intent save for the initial cash payment
made at the date of signing in January of 1977.. He has agreed, in his
cross-examination on affidavit, that he has never received a written ac
knowledgment of the debt from William Litz Jr. and Shirley Litz sub
sequent to the Letter of Intent of August of 1978. He agrees that he has
made no demand for payment on William Litz Jr. and Shirley Litz sub-

Litz v. Litz [Man.] Krindle J. 433
sequent to the Letter of Intent of August of 1978. It is evident that any
attempt by Willie Litz to enforce at law, some sixteen years later, rights
which he alleges flowed to him in the event of default of payment by
Russell Litz and William Litz Jr., when he has done nothing for sixteen
years, will not be a simple, straightforward exercise.
23 William Litz Jr. asserts that Willie Litz has in fact been repaid and
that the repayment took the form of annual payments to Willie Litz by the
company for “consulting services”, which payments —
their ilk —
were
or
something of
contemplated as a means of repayment of the debt under
para. 4 of the Letter of Intent of August 23, 1978. That is a very peculiar
paragraph in a rather peculiar document. There is evidence that Willie
Litz was paid annual “consulting” fees. There is evidence that the in
voices for the fees were prepared by the corporation rather than by Willie
Litz and that the amounts paid seem to be somewhat disproportionate to
the services actually performed.
24 I am not ruling at this point on the merits of Willie Litz’s claim to be
a creditor of William Litz Jr. and Russell Litz in respect to the monies
payable on the sale of shares by Willie Litz to his sons. I simply find as a
fact that the entire issue of whether Willie Litz has an enforceable claim
as creditor under those agreements is extremely complex; not at all cer
tain as to result and is totally and completely unconnected to anything
that may be at issue in the oppression action as it presently stands be
tween William Litz Jr. and Russell Litz.
25 The other area in which Willie Litz alleges a debt is due him is in
connection with a personal loan or loans made by him to his Sons to
permit them to purchase homes. These are strictly personal debts. The
enforceability of those debts at this late date is in issue. The debts have
no connection to the matters at issue in the oppression action.
26 Willie Litz’s position as creditor of his Sons fl their personal
capacity does not give him a necessary “interest” in the oppression action
before the court to merit his joinder.
27 I propose to deal more generally, with- Will eLiz’s-c1aim to have an
interest in these proceedings such that would justify his being added as a
party. It is clear that Willie Litz cares about the corporation and cares
about his sons. It is clear that Willie Litz believes that the public nature
of these proceedings will hurt the future of the corporation. He is prob
ably correct. But it is no longer his corporation. It is owned equally by
his two sons. It is for them to address the wisdom of what they have done
and are doing and it is for them to assess the effects on the corporation of

434 WESTERN WEEKLY REPORTS [1995] 4 W.W.R.
what they are doing. If there is an alternate mode of dispute resolution
enforceable between them, it is f6r them or one of them, to raise that
before the court and to ask the court to stay proceedings. To the extent
that Willie Litz is a creditor of the corporation, he is well secured. To the
extent that he is a creditor of either of his sons personally, he will have to
look to them for the payment of their debt to him. Should he perceive
that they are, by their conduct, impairing their own future income earning
ability and thereby perhaps impairing his ability to collect the debts they
may owe him in the future, that is far too remote an interest to justify his
being added as a party.
28 There is one area and only oiie area in which Willie Litz may have
an arguable interest. Should the court find that there has been oppression
and should the court consider as a remedy an order that the shares of the
corporation be sold to third pirties, to the extent that Willie Litz may
have a non-statute-barred right as unpaid vendor of the shares to exercise
a veto on their transfer to third parties, Willie Litz’s interest will have to
be considered. Any order for the sale of those shares to third parties
would have to take into account the position of Willie Litz. The Letter of
Intent of August 1978 is before the court. its contents are well known to
both parties. Counsel for Russell Litz is the same person as is counsel for
Willie Litz. The position of Willie Litz can be and will be put before the
court at the time a remedy is ordered if it is pertinent to the order being
considered by the court. It is not necessary to join Willie Litz as a party
to the oppression proceedings to ensure that the court is aware of that
provision, should it need to be aware of the provision.
29 There is one final matter which has played a part in my decision in
this case, although by no means a decisive part. I am concerned that if
Willie Litz were permitted to be joined in. this case he would purport to
speak, not only as a creditor of the corporation and someone who may
have a position to advance if a remedy were being considered. He would
purport to speak firstly, on behalf of the corporation itself and secondly,
as someone well qualified to give opinions regarding the strengths and
weaknesses of the two protagonists. We have already seen some of that
behaviour from Willie Litz in these proceedings. It is understandable in
the sense that the court is dealing with what Willie Litz considers to be.
his business and his sons. The blurring of lines would be, I believe, an
inevitable and ongoing complication to this already unfortunate litigation.
The complication would be compounded by the fact that Willie Litz and
Russell Litz are represented by the same counsel.

Brown v Wawanesa, etc. [Sask.] Dielschneider 3. 435
For all of the foregoing reasons, I exercise my discretion and deny
the application to add Willie Litz as a party to these proceedings. My
decision would be no different whether the application was one properly
brought under the Rules or under the Act.
[Indexed as: Brown v. Wawanesa
Mutual Insurance Cod]
DONALD BROWN and EDNA BROWN
v. WAWANESA MUTUAL INSURANCE COMPANY
Saskatchewan Queen’s Bench
Dielschneider 3.
Judgment — February 1, 1995.
Application dismissed.
insurance — Fire insurance — Exclusions and conditions relating to risk — Arson
— Insurer’s expert stating accelerant used in fire destroying insu.reds’ house —
Court considering standard of proof when insurer alleging arson and listing
relevant factors — On highest degree of probability approaching proof beyond
reasonable doubt, fire set using accelerant — One of three insured setting it as no
other person in house.
A couple’s insurance policy on their house excluded coverage for fire caused
by an insured person. The named insured were the husband and wife, and included
their adult son who lived with them. When the house caught fire at night, it spread
rapidly and the occupants escaped with none of their belongings. Firemen found the
fire to be unusual. Although they could extinguish most house fires in ten minutes,
this one took three to four hours. Each time they sprayed a blue flame running across
the basement floor, it reignited and burst into full force. While there was no evidence
that the insured had any motive for setting the fire, this was the fourth fire in which
they had been involved. The insurer denied coverage on the grounds that an insured
person had caused the fire. The insured sued and at trial a defence expert gave his
opinion that an accelerant had been used in the fire.
Held — Action dismissed.
Where an insurer alleges arson in denying coverage, the civil standard of
reasonable probability operates in tandem with the presumption against a crime
having been committed. The evidence must be cogent enough to overcome the
presumption and satisfy the court that as a probability the alleged act had, in fact,
occurred. The four factors to be considered are motive, credibility, opportunity, and
arson as opposed to accidental fire. The salient question here was whether the fire
was arson. The rapidity with which it spread was itself evidence of an accelerant’s
use, and impeached the insureds’ assertion that none of them set the fire. They were