2006 BCCA 549 Jung et al v. HSBC Trust Company (Canada) et al

Before:	The Honourable Chief Justice Finch
	The Honourable Madam Justice Rowles
	The Honourable Mr. Justice Thackray

R.D. Lee	Counsel for the Appellants
E.J. Milton	Counsel for the Respondents
Place and Date of Hearing:	Vancouver, British Columbia
November 6, 2006
Place and Date of Judgment:	Vancouver, British Columbia
December 8, 2006

Written Reasons by:

The Honourable Chief Justice Finch

Concurred in by:

The Honourable Madam Justice Rowles

The Honourable Mr. Justice Thackray

Reasons for Judgment of the Honourable Chief Justice Finch:

[1] The plaintiffs appeal from this order of the B.C. Supreme Court pronounced 2 November 2005:

THIS COURT ORDERS that:

1. The Grant of Probate issued on March 27, 1987, with respect to the 1977 Will of Hubert Lee, is valid and will remain in full force and effect;

2. There will be no pronouncement for the force and validity in solemn form of law of the 1985 Will of Hubert Lee;

3. There will be no declaration that the Estate of Horace Lee is holding any assets in trust for the Plaintiffs, or any of them; and …

[2] In their action the plaintiffs had sought revocation of the grant of probate of the 1977 will of Hubert Lee, and that “the court pronounce for the force and validity” of Hubert Lee’s will dated 3 March 1985 as his last true will and testament.

[3] The learned trial judge held that the handwritten portion of the 1985 will concerning bequests had been added after the will was signed by the testator and two witnesses, and the alteration was therefore not made in accordance with the requirements of s. 17 of the Wills Act, R.S.B.C. 1996, c. 489, rendering the bequest clause of no effect. He also held that although the revocation clause in the 1985 will had been properly executed, the revocation clause was conditional on the bequests in the 1985 will being valid. While the 1985 will was capable of being admitted to Probate without the revocation clause, no useful purpose would be served by giving effect to it. The judge directed that the 1985 will not be admitted to probate with the 1977 will.

[4] The plaintiffs challenge the trial judge’s conclusion that the 1985 will was incomplete when it was executed by Hubert Lee. They allege two errors. First, the plaintiffs say the trial judge made a palpable and overriding error in failing to give reasons for rejecting the testimony of Mrs. Sharon Graham, one of the witnesses to the 1985 will. Second, the plaintiffs allege the trial judge erred in accepting for its truth a prior inconsistent statement made to a solicitor, Norman Barbour, by the second witness to the will, Mr. Richard Graham.

II. THE FACTS AND THE EVIDENCE

[5] Apart from the completeness of the 1985 will when executed, the basic facts are not contentious.

[6] The interested parties are members of the extended Lee family, comprised of eleven siblings and their children. The Lee siblings are Harry Lee (“Harry”), Henry Lee (“Henry”), Harold Lee (“Harold”), Elsie Mar (“Elsie”), Effie Leo (“Effie”), Edythe Mar (“Edythe”), Evangeline Yip (“Evangeline”), Florance Mar (“Florance”), the testator Hubert Lee (“Hubert”), Horace Lee (“Horace”) and Estelle Jung (“Estelle”) (collectively the “Lee Siblings”).

[7] All of the Lee Siblings, with the exception of Estelle, are deceased. Horace and Hubert both died without issue. The remaining siblings all had at least one child.

[8] On 15 November 1977, Hubert executed a will (the “1977 will”) before two witnesses, Richard Graham (“Richard”) and Sharon Graham (“Sharon”). In the 1977 will, Hubert left his entire estate to his brother, Horace. Horace was named as the sole executor.

[9] On 3 March 1985, while in hospital in Victoria, Hubert executed a second will (the “1985 will”). The witnesses to the 1985 will were again Richard and Sharon. The 1985 will leaves Hubert’s property on 817 North Park Street and the residue of his estate to Horace, but specifies that “cash and bonds” were to be divided as follows:

(a) 35% of Hubert’s “cash and bonds” was left to Horace;

(b) 35% of Hubert’s “cash and bonds” was left to Estelle; and

Edythe’s name would appear to be an addition or inter lineation to the bequests set out in the handwritten body of 1985 will. Both Horace and Estelle were named as executors.

[10] Hubert died on 1 July 1985, leaving assets valued at approximately $670,000, including cash and bonds.

[11] In July or August of 1985, Horace approached David Chong (“Mr. Chong”), a lawyer in Vancouver, and asked him to probate the 1985 will. Chong agreed to do so, but immediately handed the matter over to his partner, Norman Barbour (“Mr. Barbour”). Chong instructed Barbour to probate the 1985 will.

[12] According to Mr. Barbour, the 1985 will had a number of issues on its face which caused him concern with respect to its execution. He testified that in late 1985 or early 1986, he sent a letter to Richard and Sharon asking them to contact him so he could address those concerns. He testified that after he sent that letter, Richard telephoned him.

[13] It is Mr. Barbour’s evidence as to what Richard said in that telephone conversation, and whether Richard’s statements are admissible for the truth of their content, that is at the heart of the second issue. Mr. Barbour’s evidence in chief on this question includes this:

A Well, I was sitting at my desk and I received a phone call and this gentleman identified himself as Mr. Graham and said [he] had received the letter I had sent with respect to the Hubert Lee estate and he spoke in a very forceful tone, strong voice, short terse statements, almost blunt in his statement.

So, I started going through the will with him and said he was one of the witnesses, yes, and I asked about whether the name Edythe, the interlineated name Edythe, was present on the will when it was signed.

Q Okay. And just at that point, sir, just turn to Tab 2, just direct the court to the particular point of the will that you were concerned about at that point.

A Okay. The third line up from the bottom it appears above that between “Elsie” and “Effie”. In fact it is circled in red on my copy by someone.

Q I am sorry. Please continue, sir.

A He gave such a flat definite “no” that I was quite taken aback and so I asked him how he could be so sure that it was not there. He said, well, there was nothing there, it was all blank. That really took me aback. And so I questioned him further and he then explained the whole process of what went on and he said –

THE COURT: Let me interrupt you here to catch up in my notes. Yes.

THE WITNESS: And I explained – Mr. Graham said that he and his wife had gone to visit Hubert Lee in hospital and while they were there Mr. Lee produced this will form and asked him to witness his signature and when the form was passed to Mr. Graham Mr. Graham looked at it and said it was all blank, mostly blank anyway. And he said to Hubert Lee, well, hadn’t you better fill this in or words to that effect before it is signed.

THE COURT: If I fall behind I will ask you to slow down but you will drive me and yourself crazy by watching my pen.

THE WITNESS: Well I never learned shorthand so ---

THE COURT: Well, I didn’t either. But anyway.

THE WITNESS: Where was I. There was nothing there, it was all blank and Hubert answered well, I haven’t made up my mind. I will fill that in later. And I was really nonplussed by this. I was expecting to receive routine answers, yes, we were there and so on and so forth and everything was done according to normal routine.

So, I ended up going through in some detail with him but he explained all three were there in the hospital room, Hubert, Mrs. Graham and Mr. Graham. Hubert signed the will albeit in the attestation clause and they signed as witnesses and all three were present together at the same time so it appeared to me that the formalities required by the Wills Act for execution had been met.

But the field at the bottom of the first page for devises and bequests was blank and the field at the top of the second page for residuary beneficiary was blank when the will was signed.

And I then questioned, okay, when you left the hospital room were those fields still blank after the will was signed and the answer was a flat definite “yes”.

[14] Mr. Barbour testified that as a result of that conversation with Richard he told Mr. Chong about it. After some discussion, the lawyers agreed that both the 1977 and 1985 wills should be presented to the court for probate. He advised Horace Lee to that effect. Horace Lee suggested presenting only the 1977 will for probate, which Mr. Barbour said would not be ethical. Later Horace Lee advised Mr. Chong that he was taking the probate file elsewhere.

[15] On 27 March 1987, in probate proceeding 181586 (Vancouver Registry), the court granted Horace Lee Letters Probate for Hubert Lee’s 1977 will. Richard swore an affidavit on 6 March 1987 indicating that he was one of the witnesses to the 1977 will. That affidavit does not make reference to the1985 will. Horace Lee received the whole of the estate of Hubert pursuant to the terms of the 1977 will.

[16] Some time later, questions arose as to whether the 1985 will should have been probated rather than the 1977 will, or whether both wills should have been submitted to the court together. The plaintiffs commenced this action, challenged the Grant of Probate for the 1977 will, and sought to prove the 1985 will as Hubert’s last true will and testament. Richard and Sharon, as witnesses to the later will, were called on behalf of the plaintiffs.

[17] Richard testified in direct examination that he witnessed the 1977 will. He said he and his wife also witnessed the 1985 will while Hubert was in the hospital. He noticed that in the third last handwritten line on page 1 of the 1985 will, the name “Edythe” appeared to have been inserted with a “caret” (^) between the names Elsie and Effie. He testified that he told Hubert “I don’t think that is going to fly”, but Hubert said he had simply corrected a previous oversight. Richard said the addition of Edythe’s name was the only matter of concern he had with respect to the 1985 will at the time of its execution.

[18] On cross-examination, Richard was asked about the telephone conversation with Mr. Barbour in late 1985 or early 1986. Richard said it was possible that he received a letter from Barbour, but he could not recall it and he had no recollection of the telephone conversation. His cross-examination included this:

Q You don’t recall receiving a letter from Mr. Barbour and calling him with respect to the 1985 will?

A To be honest with you I can’t say for sure. I am sure that if he said that he did that I am sure that he sent me a letter and if he sent me a letter I would have responded because I respond to all my phone conversations – phone calls and I don’t remember the contents of what was said.

Q Okay. Fair enough. Do you recall in 2002 a lawyer by the name of Mr. Russell Lu contacting you, sir

A Yes, I do.

Q Okay. And –

THE COURT: Sorry that was when?

MS. MILTON: 2002, My Lord.

Q I put it to you sir, that you told Mr. Lu at that time that you recalled receiving a letter from Mr. Barbour and speaking to him about the 1985 will?

A I could have.

Q So your memory back then might have been a little bit better?

A. Could have been.

Q Yes. It is after all a few years ago?

A It is. A few.

Q So, if Mr. Barbour says he sent you a letter and you called him you are not disagreeing with that?

A No, I am certainly not calling the man a liar. There is every possibility that he did that.

Q Okay.

A And I am sure that he did. I don’t have any problem with that at all.

and further:

Q All right. Mr. Barbour also says that once you told him that the carrot [sic] as you call it wasn’t there he asked you how can you be sure and you advised him because there was nothing there, it was blank. And I put it to you, sir, that that is what you told Mr. Barbour in 1985 when you called him after receiving the letter?

A I have no memory of that and the reason as I have stated is that the only time I ever saw that will was the night that we were in the hospital room and from that point on I never saw the will again. Hubert was very private. It is not like as if a week or so from now he brought the thing out and said I have done this or I have done that or whatever. That never happened and that carrot sticks out so vivid in my mind and so vivid in my wife’s mind because she was there when I pointed it out that that was wrong, that that shouldn’t have been done like that.

Q Mr. Barbour also says, sir, that you advised him in this telephone conversation that you had asked Hubert in the hospital, you had said to him words to the effect that this will is blank, should we be signing it this way and Hubert advised you I have not made up my mind yet what I am going to do. And I have to put it to you, sir, that that is what you told Mr. Barbour during this conversation in 1985?

A I have no memory of that conversation at all to be honest with you.

and further:

Q I am going to suggest to you, sir, that in fact when you and your wife signed this 1985 will that it was in fact as far as the bequest provisions went, blank, exactly as you advised Mr. Barbour back in 1985?

A That is your opinion I guess. It is not mine.

Q So, you disagree with that?

A I disagree.

[19] Richard’s evidence in chief was substantially in accord with the affidavit he swore on 20 September 2002.

[20] On that date, over seven years after signing the 1985 will, Richard swore an affidavit filed in Action No. 181586 in which he said was a witness to Hubert’s 1985 will. In that affidavit he said in part:

Hubert gave me the will to look at. It had been completely filled out except for the signatures, and I saw that there was an insertion on the first page with respect to his sister Edythe. I asked Hubert about it and he said that he had initially forgotten to include her, but when he reviewed the will he saw his error and inserted her name.

I commented to him that the insertion might cause problems with the will, because my understanding was that any changes to a will might be a problem, but he felt confident it would be all right to sign it as it was.

…

Hubert then took the 1985 Will and put it away, and we had a nice visit with him afterwards for an hour or so. I do not believe I saw the 1985 Will again until a copy of it was sent to me sometime after his death, by a lawyer, in 1987.

Around that time, the lawyer (whose name I forget) asked me to swear an affidavit with respect to the 1977 Will, and I did so…

I mentioned the 1985 Will to the lawyer, but he led me to believe that the second one was not valid. I cannot recall why he said it was not valid, but I did not question it at the time for, as I had warned Hubert, I though[t] the insertion of Edythe’s name would cause a problem.

[21] On the issue of the 1985 will’s completeness when executed, the judge summarized Richard’s testimony as follows:

[34] Regarding the 1985 Will, Mr. Graham stated that Hubert had phoned him and asked him to bring his wife as “I wanted to update my Will”. He then gave the following evidence as I record it: “I saw it was filled out. I scanned it only this little mark with Edythe above it”. “I [was] concerned about it”. It will not fly. He said it is alright. “I just forgot that particular sister so I just put it in and that is what he wanted”. “I think he wanted to do more for her [Estelle]”. “She stepped up to the plate more”. “He said I’ve left Estelle a little more in this will”. I record him as stating: “He signed first. I signed first and then Sharon signed. We were all in the room together”. “He put it in an envelope – I never saw it again”. Mr. Graham was adamant that everything was filled in at the time. Regarding the date and the address, Mr. Graham confirmed saying to Horace “you have to fill that in and he said go ahead.” Accordingly, Mr. Graham then wrote the date and the address of Hubert on the 1985 Will.

[22] Sharon Graham’s evidence was similar to that of her husband Richard. In direct examination concerning the execution of the 1985 will she testified:

Q Now, when you received this or when you saw this will, let me rephrase that. How did the execution and your witnessing of the will occur specifically? Take me through what happened.

A What I remember is Hubie showing Rich and I the will, Rich more prominently than me because he was the closest to Rich and Rich suggesting to Hubie that this carrot [sic], where he put another word in here, might not be a good thing in a will. And Hubie said he was not concerned about it. He thought it would be just fine and then Rich and I just – remember talking to him a little bit more and then us signing the will.

. . .

Q Do you recall, Mrs. Graham, did Hubert say anything about why there was an insertion in Edythe’s name?

A I believe he did. I believe that he just – when he wrote it out he just forgot somebody because there was a lot of names and that he just reread it and added that name. That is my recollection of what he told us.

Q Now, after that discussion, Mrs. Graham, what happened next?

A I believe that Rich and Hubie talked a little bit more. I am not exactly clear about what we talked about but there was conversation, excuse me, and then Hubie signed the will and Rich and I witnessed it.

[23] On cross-examination Sharon agreed that she and her husband had discussed their evidence concerning the 1985 will “many times.”

[24] The trial judge did not review Mrs. Graham’s evidence in detail. In his reasons on whether the 1985 will was complete when executed he said:

[52] There are no exceptions to the requirement of s. 17. After reviewing the evidence of Mr. Barbour, Ms. Graham and Mr. Graham, I have come to the conclusion that, while the alterations were in the handwriting of Hubert and undoubtedly evidenced his intent at the time they were made, the alterations were not made in accordance with the requirements of s. 17 of the Wills Act.

[25] It is clear that in reaching that conclusion, the learned trial judge accepted the evidence of Mr. Barbour as to what Richard told him in their telephone conversation. In other words, the judge accepted the prior inconsistent statement by Richard to Barbour as admissible for the truth of its content.

III. THE REASONS FOR JUDGMENT

[26] There is no explicit analysis in the reasons as to whether admission of Richard’s telephone statement satisfied the tests of reliability and necessity under the “principled approach” to hearsay evidence, as laid down by the Supreme Court of Canada in a series of decisions commencing with R. v. Khan, [1990] 2 S.C.R. 531 and R. v. Smith, [1992] 2 S.C.R. 915. However, the learned trial judge did give extensive reasons for preferring the telephone statement of Richard to his in-court testimony. I set those reasons out in full:

[54] In coming to the conclusion that the alterations were not made in accordance with what is set out in s. 17 of the Wills Act, I take into account a number of factors arising out of the evidence. First, I prefer the evidence of Mr. Barbour to the evidence of Mr. Graham regarding their telephone call and what was said by Mr. Graham. There was good reason for Mr. Barbour to be very much surprised by and so remember the conversation that he had with Mr. Graham in 1987. Mr. Barbour described the information he received from Mr. Graham as being like a “bomb shell”, something which he considered on and off over the years, and something that any lawyer would remember clearly. Because Mr. Graham was not then versed about the statutory requirements surrounding the alteration of a will, I am satisfied that Mr. Graham would be straightforward in his recollection of what had happened in 1985 and what Hubert had said to him and his wife. I am satisfied that Mr. Graham would not have known that later alterations to a Will would invalidate what was set out in the alterations so that what he advised Mr. Barbour in 1987 and would likely be accurate. As well, if Mr. Barbour had been told by Mr. Graham that the 1985 Will was completely filled in when it was executed, there would have been no reason why Mr. Barbour would not have submitted the 1985 Will for probate. That he did not proceed in that manner is consistent with his recollection that the advice received from Mr. Graham led him to the conclusion that the 1985 Will could not be probated without ascertaining the validity of the 1977 Will at the same time.

[55] Second, I accept the evidence of Messrs. Barbour and Chong that the conversation that Mr. Barbour had with Mr. Graham was then discussed and the options made known to Horace. Even though Messrs. Barbour and Chong may well have been involved in the probating of many wills, I think it more than likely that they would remember this particular will and the unusual circumstances surrounding the execution of the 1985 Will. There appears to be no reason why Messrs. Barbour and Chong would make up the conversation that they had after Mr. Barbour says he was advised by Mr. Graham that the bequest portion of the 1985 Will was blank.

[56] Third, Mr. Graham was prepared to swear to the truth of the contents of his March 6, 1987 affidavit and that affidavit makes no mention of the 1985 Will and states specifically that on “numerous occasions” Hubert expressed “his intention to leave his entire estate to his brother Horace”. His affidavit was sworn only two years after the execution of the 1985 Will and is at odds with his September 20, 2002 affidavit sworn some seven years after the execution of the 1985 Will. If the alterations were not added until later, then it is more likely that Mr. Graham could say in 1987 and that the 1977 Will expressed the actual intentions of Hubert to leave his entire estate to his brother Horace. While Mr. Graham later swears that the 1985 Will is “certainly consistent with the sentiments he had expressed to me over the few years prior to this occasion [the execution of the 1985 Will]”, I find that it would be more likely that what Mr. Graham said in 1987 two years after the execution of the 1985 Will would be more accurate than the recollection set out in his September 20, 2002 affidavit which was sworn some seven years after the event.

[57] Fourth, while Mr. Graham stated that he never saw the 1985 Will again after he witnessed the signature of Hubert, Mr. Graham also stated that he had the 1985 Will when the lawyer phoned him prior to swearing his March 6, 1987 Affidavit. I am satisfied that Mr. Graham did not have the 1985 Will when he swore his March 6, 1987 Affidavit as he only would have had the 1977 Will as I accept the evidence of Mr. Iwata that he was not aware of the 1985 Will when he forwarded the March 6, 1987 Affidavit to Mr. Graham for Mr. Graham to swear.

[58] Fifth, I am satisfied that the conversation that Mr. Barbour reports having had with Mr. Graham could only have taken place if Mr. Graham had the 1985 Will in front of him. I am also satisfied that there would have been no reason for Mr. Barbour to forward the 1977 Will to Mr. Graham when it was the intention of Mr. Barbour in 1986 to Probate the 1985 Will.

[59] I have no hesitation in coming to the conclusion that the alterations set out in the 1985 Will accurately represent the sentiments of Hubert when the alterations were made but that those alterations were made later and were not properly witnessed. While I found Mr. Graham to be a straightforward witness who was attempting to recount what had happened some 20 years earlier when the 1985 Will was executed in his presence and while I have no hesitation in coming to the conclusion that the clear intention of Hubert was evidenced in the alterations, I am satisfied that Mr. Graham has allowed his obvious and heartfelt desire to see that the intentions of Hubert are followed to cloud his memory about the question of whether Hubert who was like a father to him made the alterations before the 1985 Will was executed.

[60] In the circumstances but with considerable regret, I am satisfied that I am precluded from implementing the clear intention of Horace in view of the relevant statutory provisions and decided cases relating to the effect that the Court can give to alterations that are added after a will has been executed when the alterations are not properly witnessed. Unfortunately, the portion of the 1985 Will that was properly executed contained a revocation clause.

IV. ISSUES

[27] The issues on appeal are:

1. whether the learned trial judge erred in law by failing to provide an explanation or reason for rejecting Sharon Graham’s evidence; and

2. whether the learned trial judge erred in law by accepting the prior inconsistent statement of Richard Graham for the truth of its content.

[28] I propose to deal with the second issue first.

V. DISCUSSION

Admissibility of Richard’s telephone statement for the truth of its content

[29] Under the “orthodox rule”, Richard’s prior inconsistent statement to Barbour would not have been admissible for the truth of its content. It could only have been admitted to impeach Richard’s credibility: Deacon v. The King, [1947] S.C.R. 531.

[30] If in testifying, the witness acknowledged making the prior statement and accepted it as being truthful, the trier of fact could have relied upon the in-court affirmation of the prior statement as evidence it could use in making findings of fact. However, if the witness denied the truthfulness of the earlier statement, or denied making the statement at all, or as here, had no recollection of making the statement, then, under the orthodox rule, the prior inconsistent statement could only be used by the trier of fact in assessing the truthfulness or reliability of the witness’s in-court testimony.

[31] The orthodox rule has been significantly changed by a series of decisions in the Supreme Court of Canada: R. v. Khan, supra; R. v. Smith, supra; R. v. B. (K.G.), [1993] 1 S.C.R. 740; and R. v. U. (F.J.), [1995] 3 S.C.R. 764. These cases establish that hearsay evidence, including a prior inconsistent statement, may be admitted for the truth of its content when the statement is shown to be both necessary and reliable. With respect to prior inconsistent statements, Lamer C.J. in B. (K.G.) said (at 786-787):

The reliability concern is sharpened in the case of prior inconsistent statements because the trier of fact is asked to choose between two statements from the same witness, as opposed to other forms of hearsay in which only one account from the declarant is tendered. In other words, the focus of the inquiry in the case of prior inconsistent statements is on the comparative reliability of the prior statement and the testimony offered at trial, and so additional indicia and guarantees of reliability to those outlined in Khan and Smith must be secured in order to bring the prior statement to a comparable standard of reliability before such statements are admitted as substantive evidence.

[32] In U. (F.J.), supra, Lamer C.J. explained the rationale for the new approach:

[28] C. The Rationale of the R. v. B. (K.G.) Decision

In my majority decision in B. (K.G.), supra, I reviewed the history and development of the orthodox rule against substantive use of prior inconsistent statements, the hearsay rationale underlying the rule, and the gradual erosion of the rule. The objective of this review was to demonstrate the logic of reforming the orthodox rule to make our treatment of witnesses’ prior inconsistent statements consistent with our rulings on hearsay in Khan, supra, and Smith, supra. These steps are equally important in my analysis here and I will, therefore, recapitulate the essential points. The orthodox rule is a particular branch of the hearsay rule because the dangers it aims to minimize are precisely those which the hearsay rule is aimed at: the absence of an oath; the inability of the trier of fact to assess the demeanour of the declarant as the statement is made; and the lack of contemporaneous cross-examination. Academic commentators have criticized the orthodox rule primarily on the basis that the risks associated with hearsay are ill-founded or non-existent when the recanting witness is on the stand.

and further:

[35] Khan and Smith establish that hearsay evidence will be substantively admissible when it is necessary and sufficiently reliable. Those cases also state that both necessity and reliability must be interpreted flexibly, taking account of the circumstances of the case and ensuring that our new approach to hearsay does not itself become a rigid pigeon-holing analysis. My decision in B. (K.G.) is an application of those principles to a particular branch of the hearsay rule, the rule against the substantive admission of prior inconsistent statements. The primary distinction between B. (K.G.), on the one hand, and Khan and Smith, on the other, is that in B. (K.G.) the declarant is available for cross-examination. This fact alone goes part of the way to ensuring that the reliability criterion for admissibility is met. The case at bar differs from B. (K.G.) only in terms of available indicia of reliability. Necessity is met here in the same way it was met in B. (K.G.): the prior statement is necessary because evidence of the same quality cannot be obtained at trial. For that reason, assessing the reliability of the prior inconsistent statement at issue here is determinative.

[33] According to the law laid down in these cases, Richard’s prior inconsistent statement would meet the test of necessity. No other evidence “of the same quality” was available. Barbour’s evidence as to what Richard told him stood alone.

[34] The issue is whether the prior inconsistent statement meets the threshold test for reliability.

[35] Clearly the telephone statement was not made under oath, affirmation or solemn declaration. As Richard did not recall or adopt the statement in his testimony, the trier of fact was faced with a choice between unsworn “evidence”, and Richard’s sworn testimony. Although Mr. Barbour regarded the telephone statement as important, there is no suggestion he warned Richard of any adverse consequences should the statement not be true. Nor is it suggested that there was an appropriate substitute for an oath, such as other circumstances which might serve to impress upon him the importance of telling the truth: see B. (K.G.) at 792.

[36] The second ‘hearsay danger’ noted above is the inability of the trier of fact to observe the declarant making the prior statement and assess any verbal or non-verbal cues which might go to credibility, and therefore, reliability.

[37] In B. (K.G.), Lamer C.J. said that a video tape of the prior statement would address this danger. There is of course no video tape of Richard’s telephone statement. Lamer C.J. also said at 794:

… that the testimony of an independent third party who observes the making of the statement in its entirety could, in exceptional circumstances, also provide the requisite reliability with respect to demeanour evidence. …

There is no such third party testimony here, and of course even Mr. Barbour did not see Richard when he made the statement. Mr. Barbour believed, and the judge concluded (at para. 58) that Richard had the 1985 will in front of him at the time of the telephone conversation. However, there is no direct evidence to that effect, nor as to any of the other circumstances in which Richard made the telephone call.

[38] The final and most important hearsay danger is the absence of contemporaneous cross-examination when the earlier statement was made. In B. (K.G.) Lamer C.J. noted that in the case of prior inconsistent statements, it is also the most easily remedied danger because of the opportunity to cross-examine at trial. He elaborated in U. (F.J.) at 789-90:

[38] When a witness takes the stand at a trial and, under oath, gives a different version of the story than one previously recorded, doubt is cast on the credibility of the witness and on the truth of both versions of the story. …

[39] Cross-examination alone, therefore, goes a substantial part of the way to ensuring that the reliability of a prior inconsistent statement can be adequately assessed by the trier of fact. …

[39] Lamer C.J. reviewed the course that a voir dire in a criminal trial should take, in determining the issue of threshold reliability:

[46] I set out the proper procedure for the voir dire in my reasons in B. (K.G.), at pp. 799-804. After the calling party invokes s. 9 of the Canada Evidence Act, and fulfills its requirements in the voir dire held under that section, the party must then state its objectives in tendering the statement. If the statement will only be used to impeach the witness, the inquiry ends at this point. If, however, the calling party wishes to make substantive use of the statement, the voir dire must continue so that the trial judge can assess whether a threshold of reliability has been met. The necessity criterion need not be assessed as it is met whenever a witness recants. The first factor contributing to reliability is the cross-examination of the witness. If the witness provides an explanation for changing his or her story, the trier of fact will be able to assess both versions of the story, as well as the explanation. However, where a witness does not recall making an earlier statement, or refuses to answer questions, the trial judge should take into account that this may impede the jury’s ability to assess the ultimate reliability of the statement.

[40] Here, Richard provided no explanation for testifying to a different version of the facts than that attributed to him by Mr. Barbour. He said he simply did not recall making the earlier statement. As Lamer C.J. points out, lack of recollection poses a serious obstacle to assessing the reliability of the prior statement. There is simply no basis on which to evaluate the truth of the prior statement, or to weigh its relative reliability against the witness’s in-court testimony.

[41] The learned trial judge did not conduct this analysis. His reasons for preferring (para. 54) “the evidence of Mr. Barbour to the evidence of Mr. Graham regarding their telephone call, and what was said by Mr. Graham” appear to be the following:

1. Mr. Barbour was surprised by the information Richard provided. It was like a “bomb shell” (para. 54);

2. The trial judge believed Richard would be “straightforward” in his recollection of what happened in 1985, and that what he told Mr. Barbour would “likely be accurate” because he was not then versed in the statutory requirements for altering a will (para. 54);

3. If Richard had told Barbour that the 1985 will was filled in when executed, Mr. Barbour would have submitted it for probate (para. 54);

4. Mr. Barbour told Mr. Chong about the telephone conversation with Richard, and then discussed the options with Horace (para. 55);

5. There was no reason for Mr. Barbour or Mr. Chong to invent such a conversation (para. 55);

6. Richard swore a March 6, 1987 affidavit which made no reference to the 1985 will, and is at odds with the September 20, 2002 affidavit in terms of which will expresses the testator’s intentions;

7. Richard swore he never saw the 1985 will again after witnessing it, but he also said he had the 1985 will when the lawyer phoned him before he swore his March 6, 1987 affidavit (para. 57); and

8. The conversation Mr. Barbour reports could only have occurred if Richard had the 1985 will in front of him at the time (para. 58).

[42] The reasons numbered 1, 3, 4, 5 and 8 above go only to the question of whether the telephone statement by Richard was made, as Mr. Barbour testified. His surprise and subsequent conduct support the inference that he heard what he says he heard. But they say nothing at all about whether what he heard Richard say was true.

[43] Reasons numbered 2 and 7 are relevant to Richard’s credibility and, therefore, the ultimate reliability of statements properly admitted for substantive purposes. They do not, however, speak to any of the indicia of the threshold reliability of the telephone statement so as to provide one or more circumstantial guarantees of its truthfulness sufficient to render it admissible.

[44] Reason number 6 may be relevant to Richard’s credibility and the ultimate reliability of his statements, but in my view it should play no role in assessing threshold reliability. In R. v. Starr, [2000] 2 S.C.R. 144, the Supreme Court of Canada held that the threshold inquiry is concerned only with the circumstances in which the statement was made, and thus, subsequent statements by the declarant are irrelevant at this early stage. Iacobucci J., for the majority, said:

[217] At the stage of hearsay admissibility the trial judge should not consider the declarant's general reputation for truthfulness, nor any prior or subsequent statements, consistent or not. These factors do not concern the circumstances of the statement itself. Similarly, I would not consider the presence of corroborating or conflicting evidence. On this point, I agree with the Ontario Court of Appeal's decision in R. v. C. (B.) (1993), 12 O.R. (3d) 608; see also Idaho v. Wright, 497 U.S. 805 (1990). In summary, under the principled approach a court must not invade the province of the trier of fact and condition admissibility of hearsay on whether the evidence is ultimately reliable. However, it will need to examine whether the circumstances in which the statement was made lend sufficient credibility to allow a finding of threshold reliability.

[45] In sum, the reasons of the trial judge do not address the issue of whether the telephone statement was admissible, and in particular whether it met the test of reliability. For the reasons outlined above, the evidence shows an almost total absence of any of the indicia that would render the statement reliable under the principles set out in B. (K.G.). While the maker of the statement was present at trial, and cross-examined, he had no recollection of making the prior statement, and the opportunity to test its reliability was therefore lacking, or at best, seriously compromised.

[46] The respondents point out and the appellants acknowledge that in some cases, “other circumstantial guarantees of reliability may suffice to render such statements substantively admissible, provided that the judge is satisfied that the circumstances provide adequate assurances of reliability in place of those which the hearsay rule traditionally requires:” per Lamer C.J. at 796, B. (K.G.), supra. To this end, the respondents make two additional submissions: Richard volunteered the statement to Mr. Barbour and he was without motive to fabricate the information. While these may be relevant factors in the threshold inquiry (see Khan and Smith, supra) tending to support the statement’s reliability, without more, they do not sufficiently address the hearsay dangers in the present case.

[47] The respondents also point to the Nova Scotia Court of Appeal decision in R. v. Eisenhauer, [1998] N.S.J. No. 28, leave to appeal to S.C.C. refused, (1998), 126 C.C.C. (3d) vi (note) where it was noted that “where a party seeks substantive admissibility of the prior statement of the opposite party’s witness [as opposed to their own recanting witness], the reliability threshold may be somewhat relaxed.” (at para. 75) Accepting that as a correct approach, it does not assist the respondents in this case where there is such an absence of circumstantial guarantees of reliability to begin with.

[48] In my opinion, the telephone statement attributed to Richard by Mr. Barbour should not have been admitted for the truth of its content. It follows that the learned trial judge erred in relying on that statement for any purpose other than an assessment of Richard’s credibility. While it would have been open to the judge to believe or disbelieve Richard’s in-court testimony in whole or in part, it was not open to him to make any finding of fact based on the prior inconsistent statement. As reliance on the prior statement is fundamental to the trial judge’s reasoning, it follows that the order of 2 November 2005 must be set aside.

[49] I have considered whether in these circumstances this Court could properly substitute its opinion as to the validity of the 1985 will for that of the trial judge. Without the prior inconsistent statement, there is no direct evidence that the 1985 will was incomplete when executed. There is, however, the fact that Richard swore an affidavit on 6 March 1987 that makes no mention of the 1985 will, and that Richard swore at trial that the contents of that affidavit were true.

[50] There is also the evidence of Sharon which the learned trial judge did not analyze in detail. I do not find it necessary to decide whether the insufficiency of the reasons on that account would alone warrant a new trial. However, without Richard’s prior inconsistent statement, the weight to be attached to her evidence could be an important consideration in deciding whether the 1985 will was complete when executed.

[51] Finally, I would add that although I have analyzed the admissibility of Richard’s prior inconsistent statement on the footing that it was made as testified to by Mr. Barbour, I express no opinion as to the reliability of Mr. Barbour’s evidence. Whether he misunderstood something that Richard told him, whether his memory is in some aspect faulty, or whether the conversation occurred just as he said, are all matters that should be open to a fresh consideration on a re-trial.

[52] If it should be found as a fact that Richard made the statement as testified to by Mr. Barbour it would be admissible only for the limited purpose of testing Richard’s credibility, should his in-court testimony differ from that statement.

[53] I would allow the appeal and order a new trial.

[54] In their factum, in the event that the Court ordered a new trial, the appellants sought an order for “solicitor and own client costs of the appeal … to the appellants from the estate of Horace Lee.” We did not hear any submissions on costs. If the parties are unable to agree on the order for costs, they are at liberty to make submissions in writing.

“The Honourable Chief Justice Finch”

I Agree:

“The Honourable Madam Justice Rowles”

I Agree:

“The Honourable Mr. Justice Thackray”

Citation:	*Jung et al v. HSBC Trust Company (Canada) et al,*
	2006 BCCA 549