Hassan v. Yes Capital Corporation, 2019 BCPC 337

Citation: Hassan v. Yes Capital Corporation 2019 BCPC 337 Date: 20191218 File No: C14934 Registry: Port Coquitlam IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: AHMED HASSAN, ABDINASIR AHMED HASSAN and ABDIBARI AHMED HASSAN CLAIMANTS AND: YES CAPITAL CORPORATION dba PACIFIC AVIATION ACADEMY OF BC as continued as CANADIAN AVIATION CORP. and SARBJEET MANDAIR DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE D.L. DOREY Counsel for the Claimants: R. Dueckman Appearing in person: S. Mandair Counsel for the Defendant, Canadian Aviation Corp.: R. Robertson Place of Hearing: Port Coquitlam , B.C.

Date of Hearing: October 29, 2019Date of Judgment: December 18, 2019 [1] The Claimants brought the within claim to recover USD $26,600 from the Defendants for the fees they paid in 2012 to attendthe Defendants’ flight school. The refund was sought because they were denied study permits to enter Canada. [2] The Defendants maintained throughout the course of this proceeding that the Claimants were untruthful on their visaapplications and, that, this was the reason they were denied the study permits.

For this reason, the Defendants took the position theywere disentitled to a refund under the private pilot’s licence (“PPL”) tuition and aircraft rental (“ARC”) contracts. [3] The Claimants began this claim on September 12, 2014. This litigation has been anything but efficient or expeditious. Therehave been over 35 court attendances, including a seven day trial. [4] In that time, the Defendants have kept and/or made use of the Claimants’ tuition deposit. [5] On October 2, 2019, I released my Reasons for Judgment allowing the claim.

In my Reasons, I rejected the Defendants’ claimsof dishonesty against Abdibari and Abdinasir Hassan and held that the Claimants were entitled to a refund in accordance with the PCTIABylaw 24(11)(

a) and Bylaw 24(13). [6] At paras. 125-126 of my Reasons, the quantum of the refund was determined as follows: [125] The Claimant’s father paid USD $26,600 to PAA/Yes Capital under the PPL and ARC Contracts. At today’s exchange rate of$1.32, this equates to CAD $35,112. [126] In light of my findings, the Claimants are entitled to a refund. The Defendants are entitled to keep $365.00.

The Claimants areentitled to the return of the balance of monies paid by Ahmed Hassan to the Defendants totalling CAD $34,747.00. [7] Yes Capital Corporation continues under the name Canadian Aviation College Corp. (referred to herein as the “Defendant”).

Itis now represented by counsel and brings this reconsideration application. [8] The Order following trial has not been entered (except with respect to the issue of costs), pending the outcome of thisapplication. [9] The purposes of the reconsideration application are stated: to first argue an issue involving mixed fact and law that was notargued at trial, and second, to seek leave to adduce fresh evidence on the applicable currency exchange rates. [10] The Defendant submits that at the time the deposit was paid, the US dollar was at or close to par with the Canadian dollar, andthat no arguments were made at trial concerning the exchange rate or matters of currency conversion. [11] The Defendant seeks a reconsideration of my decision on the following questions: 1) Under the Contract, or the applicable PCTIA Bylaw, in what currency were the Plaintiffs’ entitled to a refund in? 2) Should the refund be issued in Canadian or US dollars? 3) What exchange rate applies to the refund? [12] In relation to the third question, the Defendant also seeks to adduce fresh evidence with respect to the currency exchange ratesfor the US dollar. [13] There are four different points in time for the exchange rates which are submitted: November 23, 2011 (when the deposit waspaid); January 4, 2013 (after the third visa application was rejected), September 12, 2014 (the date the Notice of Claim was filed); andNovember 6, 2019 (current exchange rate).

These exchange rates were provided following the hearing and the rates are not in contention. [14] The issue in contention is whether the reconsideration application should be allowed or refused. The Law [15] It is well recognized that a trial judge has an “unfettered discretion” at common law to re-open the trial prior to the entry of theorder: Clayton v. British American Securities Ltd., (BC CA), [1934] 3 W.W.R. 257. Such discretion is, however, to beexercised “sparingly”: Sykes v. Sykes (BCCA); Harrison v.

Harrison, 2007 BCCA 120. [16] The underlying rationale of the judge’s unfettered discretion to re-open is “to prevent a miscarriage of justice”: Cheema v.Cheema (2001), 2001 BCSC 298 , 89 B.C.L.R. (3d) 179, at para. 25. [17] In Sykes v. Sykes, at paras. 9-10, Woods J.A. articulated the test for reconsideration as follows: [9] This seems to me to be the very approach to re-opening which the trial judge took in Hamilton v. Busch, and which Madam JusticeSouthin described as "much too limited a view of the extent of his discretion".

It is well established that the discretion which a trial judgehas to re-open before formal judgment has been entered is what is called "an unfettered discretion", although it is one which for obviousreasons must be exercised sparingly. The following quotation from the judgment of Mr. Justice Macdonald in Clayton v. BritishAmerican Securities Ltd., (1934) (BCCA), 3 W.W.R. 257 at page 295, still represents the law in this Province: It is, I think, a salutary rule to leave unfettered discretion to the trial judge. He would, of course, discourage unwarranted attempts to

bring forward new evidence available at the trial to disturb the basis of a judgment delivered, or to permit the litigant after discoveringthe effect of a judgment to re-establish a broken down case with the aid of further proof. If the power is not exercised sparingly and withthe greatest care, fraud and abuse of the court's process would likely result. [10] In my view, new evidence is not an essential prerequisite to a trial judge's exercise of the discretion to re-open. In some cases, itmay be the only circumstance which would justify a re-opening.

Indeed it may be that in many cases a re-opening would only bejustified on the basis of new evidence which was not available at the time of the original trial. It will in all cases depend on thecircumstances.

But, a discretion to re-open may also properly be exercised where the trial judge is satisfied, either because of theargument of one of the parties, or on the basis of his own reconsideration of the record, that the original judgment was in error because itoverlooked or misconstrued material evidence, or misapplied the law. [18] More recently, the Court of Appeal held the following principles apply to an application to re-open a trial to adduce freshevidence: 1) Prior to the entry of the formal order, a trial judge has a wide discretion to re-open the trial to hear new evidence. 2) This discretion should be exercised sparingly and with the greatest care so as to prevent fraud and abuse of the court's process. 3) The onus is on the applicant to show first that a miscarriage of justice would probably occur if the trial is not re-opened andsecond that the new evidence would probably change the result. 4) The credibility of the proposed fresh evidence is a relevant consideration in deciding whether its admission would probablychange the result. 5) Although the question of whether the evidence could have been presented at trial by the exercise of due diligence is notnecessarily determinative, it may be an important consideration in deciding whether a miscarriage of justice would probably occur if thetrial is not re-opened.

Zhu v. Li, 2007 BCSC 1467, at para. 20. Position of the Parties The Defendants [19] The Defendant submits the proper currency of the PPL and ARC Contracts is the Canadian dollar. Thus, any refund due underthe Contracts is payable in Canadian currency: Jugoslavenka v. Oceaska Plovida v. Castle Investment, [1973] 3 All E.R. 498; cited withapproval, ACLI Ltd. v. Cominco Ltd. (1985), (BC CA), 61 B.C.L.R. 177 (C.A.). [20] The Defendant further submits that at the time payment was made on November 23, 2011, the Canadian dollar was valued atpar or close to the US dollar.

The Defendant thus seeks to adduce fresh evidence of the spot exchange rate, which is the amount ofCanadian dollars required to purchase USD $1, as of that date, and is 1.0476. Thus, the Defendant was entirely within its discretion toaccept an incoming payment in US dollars in satisfaction of an amount owing in Canadian dollars. The fact that none of the partiesquestioned whether there was a shortfall or a surplus owing at the time the payment was made supports this position. [21] Finally, counsel points out that no reference was made in the original pleadings to the payment being made in US dollars.

TheClaimants have since amended their pleadings on October 15, 2015. In that pleading, reference was made to three specific paymentsmade to the Corporate Defendant, one of which was specifically made in US dollars. The claim was not specifically pleaded until theClaimants were granted leave to amend their pleadings at trial. [22] For these reasons, the Defendant submits the principal amount of the judgment should be CDN $26,235. The Claimants’ Position [23] The Claimants oppose the application.

They submit in order to be made whole, they ought to be compensated in US dollars. [24] The crux of the Claimants’ submission is they have no connection to Canada. They submit that if the refund had been paid priorto the commencement of these proceedings, the money would have been reinvested back into the US market. They would have thenenjoyed the benefit of the market and the increases in the US dollar. [25] They submit that a judgment awarded in Canadian currency today would not place the Claimants in a similar position than ifthey received the refund in 2012, when their visa application was rejected.

To find otherwise would give the Defendant a “windfall” dueto the drop in the value of the Canadian dollar, and that this would be manifestly unfair in the circumstances, particularly given theDefendants’ longstanding refusal to pay and the delays that occurred in this litigation. [26] The Claimants thus seek to uphold the quantum awarded at trial and submit that this award most fairly compensates them fortheir losses. [27] Finally, the Claimants submit the Defendant chose to rely on Mr. Mandair to advance its interests at trial, is unhappy with theoutcome, and wants to re-litigate the matter.

They submit that the Defendant is “bargaining between the parties and the Court” in anattempt to procure a better result. This, they submit, is not a principled reason for the Court to exercise its discretion and rehear the case:Aquiline Resources Inc. et al. v. Wilson et al., 2005 BCSC 1461, at para. 18. [28] For these reasons, the Claimants submit reconsideration application should fail. Discussion

[ 29 ] I will now consider whether I ought to exercise my discretion in favour of the Defendant and re-open the trial. The Defendant has the onus of proving that a miscarriage would probably occur if the trial is not re-opened and that the new evidence would probably change the result. [ 30 ] Turning now to the questions posed by the Defendant: 1. What is the “proper” currency of the contract? [ 31 ] The threshold question is, what is the proper currency of the PPL and ARC Contracts?

This is ascertained by examining the currency with which the payments under the contract have the closest and real connection: Jugoslavenka v. Oceaska Plovida v. Castle Investment , supra. [ 32 ] In this case, the PPL and ARC Contracts each state, “all fees are in Canadian dollars unless shown otherwise”. This conforms with Bylaw 21(e)(iii) of the PCTIA Bylaws which requires “all fees and tuition stated in Canadian dollars”. The Defendants operated a flight school in Abbotsford.

The services were to be performed in Canada. [ 33 ] The October 18, 2019 Affidavit of Tatiana Mendoza exhibits emails exchanged between Mr. Mandair and Ahmed Hassan on July 10, 2011, November 1, 2011, November 9, 2011, and November 22, 2011. The focus of the discussion in these emails is the cost breakdown for the fees for the flight school program.

These emails contain multiple references to these fees being payable in Canadian dollars and are relied on by the Defendant as evidencing the parties understanding as to the proper currency of the Contracts. [ 34 ] I am satisfied on a review of the Contracts and Bylaw 21(e)(iii), that Canadian currency has the “closest and real connection to the payments”.

Thus, the proper currency of the Contracts is the Canadian dollar. [ 35 ] The Defendant submits under this same analysis, the Court ought to find that Canadian currency should apply to the refund. [ 36 ] The answer to this question is not as clear-cut as submitted by the Defendant. [ 37 ] The Claimants received written bank transfer instructions from Mr. Mandair for remitting payment.

These instructions gave the Claimants the option to pay their tuition and fees in US or Canadian dollars, and provided the banking details, including the branch and bank account number for the Defendants’ Bank of Montreal Account in Surrey, BC. (the “BMO Account”). [ 38 ] On November 23, 2011, the Claimants’ USD $26,600 payment was wire transferred to the BMO Account.

The source of this payment was funds from a US investment account domiciled in Texas which belonged to Ahmed Hassan. [ 39 ] It is undisputed the payment was made in US dollars and paid into the Defendants’ BMO Account. [ 40 ] In paragraph 38 of the Defendant’s submission, counsel states: …. It is more likely than not that the payment of the deposit received in US Dollars was accepted in satisfaction of the amount owing in Canadian dollars.

There is also evidence that the USD – CDN exchange rate in late 2011 was close to or at par. [ 41 ] I disagree with this submission for the following reasons: First, it is clear on the evidence that neither party followed the Contracts when the payment was made and accepted in a currency other than Canadian dollars. [ 42 ] Second, using the spot exchange rate agreed to by the parties for November 23, 2011, the USD-CDN exchange rate was not at par at the time of payment. It was 1.0476.

The value of the USD was thus greater than the Canadian dollar and would have resulted in an over payment, had the money been converted into Canadian dollars at the time the funds were remitted. [ 43 ] Third, I am unable to conclude from a review of the bank transfer instructions produced at trial whether the BMO Account operated in Canadian dollars or whether it was a US dollar account.

There is no evidence before me to make this determination. [ 44 ] However, given the wording of PCTIA Bylaw 24(10), the Defendant was under a positive duty to remit any “excess amounts” to the Claimants once the payment was converted into Canadian dollars.

This Bylaw stipulates: If the institution has received fees in excess of the amount it is entitled to under the student contract, the excess amounts must be refunded. [ 45 ] Instead of following the Bylaw, the Defendants simply confirmed in their acceptance letters to the Claimants that the Claimants paid “$26,600”, the amount of the US currency they transferred.

In so doing, the Defendants contravened Bylaw 24(10). [ 46 ] On the basis of the spot exchange rate at the time of payment, I have concluded that the Defendant received a greater sum than what was due under the Contracts from the Claimants, and I thus reject the Defendant’s submission. 2. What currency should the refund be paid? What exchange rate applies to the refund? [ 47 ] The funds were paid on account of the Claimants’ registration fees for tuition and the first instalment of the aircraft rental fees. What happened to the money after the funds were deposited into the BMO Account is unclear from Mr.

Mandair’s testimony at trial. [ 48 ] These funds have either been continuously held on deposit for the benefit of the Claimants’, or, some or all of the money has been used or kept by the Defendant in its business operations. In any event, the Defendant had the benefit of the Claimants’ money. The Claimants are entitled to a refund. [ 49 ] The issue then is what currency the refund should be paid. The Claimants submit the refund should be paid in US dollars whereas the Defendants submit the refund should be paid in Canadian dollars.

[ 50 ] From the very outset of this dispute, the Claimants sought recovery of the amount paid in US dollars.

This is the sum claimed in their pleadings; this is what they paid, and it is the sum they presented evidence and argued for recovery at trial. [ 51 ] They submit, “calculating the Judgment in US funds more truly and accurately compensates the Claimants for their loss of $26,600 US Dollars in 2012, than the artificial analysis of the Contracts”. [ 52 ] They seek an order that the refund be calculated in US dollars and converted into Canadian currency as per the date of Judgment, which is the current unentered order. [ 53 ] At paragraph 17 of their written submission, the Claimants counsel further submits: In other words, there is no reason to tie the Judgment to the Canadian dollar, which has dropped in value in the last few years, which will have the result of substantially undercompensating the Claimants.

The loss, from the Claimants’ point of view in US funds, would be artificially reduced as a result of the Defendants delay in paying. [ 54 ] They rely on sections 1(1) and (2) of the Foreign Money Claims Act , RSBC 1996, c. 155 (“ FMCA ”) as the statutory authority which gives the Court the discretion to order judgment in an amount of Canadian currency that is necessary to purchase the equivalent amount of foreign currency, and sets up the process for conversion. [ 55 ] This authority and procedure is found in ss. 1(1) and (2) which provide: 1(1) If, before making an order for the payment of money arising out of a claim or loss, the court considers that the person in whose favour the order will be made will be most truly and exactly compensated if all or part of the money payable under the order is measured in a currency other than the currency of Canada, the court must order that the money payable under the order will be that amount of Canadian currency that is necessary to purchase the equivalent amount of the other currency at a chartered bank located in British Columbia at the close of business on the conversion date.

(2) The conversion date is the last day, before the day on which a payment under the order is made by the judgment debtor to the judgment creditor, that the bank referred to in subsection (1) quotes a Canadian dollar equivalent to the other currency. [ 56 ] The Defendant, on the other hand, contends that the refund should be payable in Canadian currency, because that is the proper currency of the Contracts. [ 57 ] This submission ignores the fact that the parties mutually agreed to depart from the Contract when payment was made and accepted in US currency. [ 58 ] Accordingly, I accept the Claimants’ submission that if the judgment is tied to the Canadian dollar, they will be undercompensated. [ 59 ] In the circumstances of this case, I conclude that an award which fairly and reasonably compensates the Claimants and restores them to their original position is an award in U.S. dollars. [ 60 ] The Defendants have not persuaded me that a miscarriage of justice would occur if the trial is not re-opened.

Moreover, the Defendants have not satisfied me that the proposed new evidence would change the end result. [ 61 ] Accordingly, I decline the relief sought on this reconsideration application. [ 62 ] Finally, as this is a foreign money judgment, the Claimants seek prejudgment interest calculated in accordance with section 2(1) of the FMCA and the Foreign Money Claims Regulation , B.C.

Reg. 165/96 , calculated as per the US prime interest rates. [ 63 ] The Court retains a discretion under subsection 2(2) of the FMCA to set a different interest rate payable “on the currency in a country where that currency circulates as legal tender”. This discretion is to be exercised where the court considers “it would be unjust” to utilize the foreign prime rate. [ 64 ] Subsections 2(1) and (2) read: 2(1) Interest payable under the Court Order Interest Act must be paid at a rate determined (

a) under the regulations made under

section 3 (a), or (

b) in the manner provided for in subsection (2).

(2) If (

a) due to a change in circumstances, the court considers it is not possible to determine a rate of interest under the regulations, (

b) the court considers it would be unjust to any of the parties that the rate so determined be utilized , or (

c) no regulation has been made under

section 3 (

a) with respect to the other currency, the court may set a rate that is payable, having regard to rates that are being paid on the other currency in a country where that currency circulates as legal tender. [emphasis added]

[ 65 ] In my opinion, it would be unjust to the Defendants to award the Claimants pre-judgment interest using the US prime rates and such any award would amount to a windfall. Accordingly, I order that prejudgment interest be calculated in accordance with the Court Order Interest Act , R.S.B.C. 1996, c. 79 , using the rates published by the Supreme Court of British Columbia. ______________________________ The Honourable Judge D.L. Dorey Provincial Court of British Columbia