The Representative Plaintiff, McDonald, was a director and shareholder in Birch Mountain Resources Ltd. (“Birch Mountain”). He commenced Class Action on behalf of all those who held common shares in Birch Mountain against the Defendants who provided Birch Mountain with various credit facilities. Before the Certification Application was heard, the Defendants successfully applied for Summary Dismissal. The Chambers Judge concluded that there was no substantial evidence showing any merits to the Plaintiff’s claims. The Plaintiff appealed.

The Court of Appeal noted that, under Rule 7.3, an Action should be summarily dismissed if there was “no merit to a claim or part of it”. In an Application for Summary Dismissal, the Defendant was required to introduce evidence relating to the absence of merit to the Claim, and the onus then passed to the Plaintiff who was required to prove that its Claim had merit. The Court of Appeal noted that Summary Judgment was appropriate where there was no genuine issue requiring a Trial; this meant that the Court was able to ascertain the necessary findings of fact, apply the law to the facts, and achieve a just result through a proportionate, more expeditious and less expensive means. The Rules for Summary Judgment should be interpreted broadly and should provide fair access to affordable, timely and just adjudication.

In this case, the Court noted that the Action was dismissed primarily because the Plaintiff failed to provide any substantive evidence showing merit. The only evidence the Plaintiff presented was an Affidavit consisting entirely of hearsay and non-expert interpretation of documents. The Plaintiff argued that this finding disclosed a reviewable error, because a Respondent to a Summary Dismissal Application could rely on hearsay under Rule 13.18(3), which allowed for hearsay evidence when the relief requested was not final. The Court of Appeal found that this was too narrow a reading of the Decision, and held that the Chambers Judge did not err in attributing “little or no evidentiary value” to the Affidavit.

The Plaintiff also sought to introduce fresh evidence on appeal in the form of an Affidavit by the representative Plaintiff. The Court of Appeal considered a four part test for introducing fresh evidence on Appeal: the evidence should generally not be admitted if, by due diligence, it could have been adduced at Trial; the evidence must be relevant in the sense that it pertained to a decisive or potentially decisive issue in the Trial; the evidence must be credible in that it was reasonably capable of belief; and it must be such that, if believed, it could reasonably be expected to have affected the result. The Court of Appeal reviewed the Affidavit and held that the Plaintiff’s new evidence was not admissible.

After considering the evidence for each of the causes of action alleged in the Plaintiff’s Claim, the Court of Appeal concluded that the Chambers Judge correctly found that there was no merit, and that the Claim was properly dismissed because the Appellant failed to adduce sufficient evidence. The Application to admit fresh evidence and the Appeal were both dismissed.