Background
Red Branch Investments Limited and Gerald Wright had litigated with David Long for years over a mining royalty interest in Thailand. After a 2015 trial, the Supreme Court of British Columbia accepted Long’s account that he and Wright each beneficially owned half of the royalty. That judgment was upheld on appeal.
The first trial turned largely on credibility. The trial judge treated John Darch as a neutral witness whose evidence corroborated Long, but later-discovered communications showed that Darch had assisted Long and his counsel with litigation strategy and preparation. In a subsequent action, a judge found that Long had deliberately lied under oath about Darch’s involvement to mislead the court, yet declined to set aside the original judgment because other evidence supported its result. Red Branch and Wright appealed; Long cross-appealed the related costs ruling.
The Court’s Holding
The Court of Appeal allowed the appeal and ordered a new trial of the royalty dispute. It held that the judge applied an erroneously high materiality threshold. Once intentional fraud on the court was established, the question was whether the fraud might have misled the court or reasonably tipped the scales—not whether the original judge necessarily would have reached a different result.
Long’s perjury concerned Darch’s supposed neutrality, a matter central to the credibility contest at the first trial. The judge also erred by reweighing portions of the original evidence to predict whether the same result would have followed without the fraud. The totality of the evidence must instead be assessed afresh at a new trial, and the existence of other supporting evidence carried diminished weight where false evidence had been tendered deliberately to mislead the court.
The Court rejected Long’s due-diligence argument because the judge had found that Wright neither knew of the fraud nor possessed the evidence needed to prove it at the first trial. The original and subsequent costs orders were set aside, making it unnecessary to decide Long’s cross-appeal. Costs relating to the earlier proceedings are to be reconsidered at the new trial, while the appellants were awarded costs of the second trial and this appeal.
Key Takeaways
- When intentional fraud on the court is proved, materiality is established if the fraud might have misled the court; it need not be shown that the fraud necessarily determined the result.
- Perjury about the neutrality of a key corroborating witness is material when the underlying dispute turns principally on the parties’ credibility.
- A court assessing fraud should not reweigh selected evidence to predict the original judge’s decision; the evidence should be reconsidered as a whole at a new trial.
Why It Matters
The decision emphasizes that finality must yield when deliberate deception threatens the integrity of adjudication. Courts should apply a comparatively low materiality threshold after fraud on the court has been established, particularly where the deception bears on credibility.
It also clarifies that independent evidence supporting the original outcome will not necessarily preserve a fraud-tainted judgment. Whether that evidence ultimately proves the claim is a question for the new trial, conducted without the distorting effect of the perjury.