2018 QCCA 1689, 2018 QCCA 1689

Fleming c. McGill University 2018 QCCA 1689 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025487-158 (500-22-211123-149) DATE: October 5, 2018 CORAM: THE HONOURABLE FRANCE THIBAULT, J.A. MARK SCHRAGER, J.A. MARIE-JOSÉE HOGUE, J.A. JAMES FLEMING APPELLANT – Plaintiff v.

McGILL UNIVERSITY RESPONDENT – Defendant JUDGMENT [ 1 ] This is an appeal from a judgment rendered on May 22, 2015 by the Court of Quebec, Civil Division, District of Montreal (the Honourable Daniel Dortélus), dismissing Appellant’s action against the Respondent arising from the latter's decision to terminate a contract between the parties. [1] *** [ 2 ] The Respondent entered into an agreement with the Royal Commission for Jubail and Yanbu (“Royal Commission”), an entity under the jurisdiction of the Government of Saudi Arabia, by which it undertook to provide the services of English teachers. [ 3 ] The Appellant is one of the 120 persons chosen by the Respondent to teach English in Saudi Arabia to students of the Royal Commission.

Each signed an identical contract with the Respondent under which they agreed to: (1) teach English to the students of the Royal Commission; (2) maintain liability insurance at their own expense; (3) pay taxes, contributions to unemployment insurance and pension plans to the relevant government authorities; (4) provide their services on the premises of the Royal Commission's colleges; and (5) use the teaching material provided by it. [ 4 ] For its part, under the same contract, the Respondent was obliged to: (1) pay the fees invoiced monthly by its co-contractor; (2) provide air tickets to and from Saudi Arabia at the beginning and end of the contract; and (3) obtain the visa required by the Saudi authorities. [ 5 ] On July 26, 2012, the parties signed the contract under which the Appellant was obliged to provide the Royal Commission with services from September 29, 2012 to July 15, 2013. [ 6 ] A specific procedure for obtaining the visa was put in place.

The Respondent would obtain the relevant information from the other party that it sent to the Royal Commission. The latter applied for the issuance of the visa to the relevant authorities of Saudi Arabia. The Royal Commission would confirm the issuance of the visa and transmit the reference number to the Respondent. The Respondent then relays this number to an agency (Banadora) which takes care of affixing the visa in the other party's passport. A similar procedure is followed when renewing the visa. [ 7 ] On October 7, 2012, a 180-day visa was issued to the Appellant by the Saudi authorities.

It included the obligation to leave the country and return every 60 days (the parties call this operation "visa run"). During the term of the contract, the Appellant complied with this requirement at least three times. These three outings required three to four pages of his passport. [ 8 ] In March 2013, upon the expiry of the first visa delivered in October 2012, a new 180-day visa was issued to the Appellant. That entailed the obligation to leave the country every 30 days. The evidence establishes that the permissible length of stay between each entry and exit of the country is discretionary.

The Appellant was notified of this situation during one of the hiring interviews and this information was repeated in an e-mail of October 25, 2012. The evidence also reveals that the Appellant never complained about this situation. [ 9 ] On April 4, 2013, on the occasion of a "visa run", the Appellant left the country. The next day, he was prevented from returning by the Saudi authorities because his passport did not have an adequate blank page where the required visa could be affixed.

The evidence shows that the Appellant knew of this requirement at least as early as the month of February and that he had not taken the

necessary steps to obtain a new passport. [ 10 ] Given the Appellant's absence from the workplace and his failure to provide the contracted services, the Respondent terminated the contract. [ 11 ] The Appellant then instituted legal proceedings against the Respondent, claiming $14,836 representing the balance of the fees due until the end of the contract, $12,000 for the loss of future opportunities, $764 for the cost of a return air ticket, $2,400 for the reimbursement of housing expenses and $300 for the cost of health insurance.

He subsequently amended his action to add other heads of damage resulting in a total claim of $64,352.93. *** [ 12 ] The trial judge dismissed the Appellant's action.

After having characterized the contract between the parties as one of service and not employment contract, he concluded that the Respondent had a valid reason for terminating it, given the Appellant's failure to perform his obligations for the benefit of the Royal Commission (clause 4.2). *** [ 13 ] In appeal, the Appellant increased his claim and asked the Court to condemn the Respondent to pay him $141,915.61, a sum well in excess of the threshold of jurisdiction of the Court of Quebec.

He details the claim as follows: - $14,743.64 for the balance of fees until the end of the contract; - $764.33 for reimbursement of the cost of the return air ticket; - $2,608 for the reimbursement of housing expenses; - $326 for the cost of health insurance; - $8,421.04 for the loss of future opportunities; - $30,000 for moral damages; - $1,052.60 for visa renewal fees; - $40,000 for punitive damages; and - $44,000 in damages for abuse of process. [ 14 ] On the merits of the appeal, the Appellant invokes five grounds: − Is the contract between the parties a service contract? − Did the Respondent have reasonable cause to terminate the contract? − Did the Respondent provide the Appellant with the required visa? − Did the Respondent respect its contractual obligations? − What is the amount of damages due to the Appellant? *** [ 15 ] The Appellant's arguments are not well founded and his appeal cannot succeed.

The nature of the contract [ 16 ] The Appellant argues that the judge should have concluded that the contract was a contract of employment and not of service. According to him, there is a clear relationship of subordination between him and the Respondent.

The method of payment provided for in the contract is a tax avoidance strategy to circumvent the obligation of the employer to deduct taxes and other relevant contributions at source. [ 17 ] The trial judge relies on the terms of the contract (clauses 7.3 and 7.5), the method of payment [2] and the dealings between the parties in deciding that the contract at issue is one of service.

This conclusion is not subject to reviewable error. [3] A contextual analysis shows that there is no relationship of subordination between the parties as interpreted in the case law. [4] The Respondent plays no role in the development of the work

schedule or the educational program provided; it does not decide on holidays or teachers' vacations; it does not evaluate the quality of their work; it does not provide them with insurance and housing nor is it responsible for their transportation. Given these determinations, the judge did not err in concluding that the parties are bound by a service contract. [ 18 ] Moreover, the characterization of the contract between the parties does not have the importance which the Appellant attributes to it. For the purposes of the present case, it is immaterial whether the contract is a service or employment contract because the Appellant

brought about a predicament whereby he was unable to fulfill his obligation to report for work. This breach justified the termination of the contract by Respondent. The grounds to terminate the contract [ 19 ] The Appellant argues that the Respondent could not terminate the contract without reasonable cause because the 60-day probationary period in the contract had expired. [ 20 ] He is wrong. The Respondent had sufficient cause to terminate the contract. The Appellant did not report for work and therefore did not provide his services.

This absence which would last for six weeks in April 2013 when the contract was nearing completion (in July 2013), resulted solely from his negligence. The evidence also reveals that in order to fulfill its obligations to the Royal Commission, the Respondent was unable to wait six weeks for the Appellant's return. [ 21 ] The Appellant is the victim of his own negligence. He knew since February 25, 2013 that he needed a new passport. The Respondent's representatives confirmed to Appellant that his concern of not having sufficient space in his passport to obtain the visa was justified.

Informed of this requirement, the Appellant took no action to obtain a new passport. He claims that the visa issued in March 2013, which required him to leave the country every 30 days, did not allow him enough time to obtain a new passport, an operation requiring 4 to 6 weeks. However, after the Respondent had confirmed this requirement, the Appellant never communicated any difficulties, to obtain a new passport in sufficient time. On the contrary, he left the country on April 4, 2013 for a "visa run" without prior communication with a representative of the Respondent.

Other alternatives were available to solve the problem as Mr. Alfadish states in his testimony: A For example, if there were no possibility of renewal of passport, we could have extended his visa so that he would be totally legal awaiting the renewal of the passport, we could have extended his visa so that he would be totally legal awaiting the renewal of the passport. And then, when the passport is renewed, we’ll just transfer the visa to the new passport. Q When you say “extended visa”, can you explain what that means? A Well, we’ll take the passport before the end of the duration period. Q Which here is?

A The thirty (30) days. We’ll go to the government offices, the immigration offices, and this is done through the government liaison officer at RCJY, in which they would extend the duration of stay on a thirty (30) day incremental in this case. Q So, that would have enable... what could, by extending the visa, what would that... A It would avoid being illegal in the country. And he would get an extended time for him to stay while he renews his passport. Q This option, would that have been... you mentioned that this was available, this would have been available after the issuance of the thirty (30) day visa?

A Yes. [...] Q To your knowledge, was there a... the solution that you just mentioned, was this proposed or applied to other contractors? A Yes. We had one contractor who accidently washed his passport while cleaning his laundry. So, the visa was not legible. What we did, we took it to the government liaison officer who exactly did the same thing. They issued... cancelled this old visa and they issued an exit visa, thirty (30) days. And then, we got this contract for another a hundred and eighty (180) days, multiple exit-entry visa. [ 22 ] The Appellant is a knowledgeable person.

He has experience in this area, having had the opportunity to make three "visa runs" before being denied re-entry into Saudi Arabia. He must bear the consequences of his lack of diligence. As a reasonable person, the Appellant is bound to act with prudence and diligence (Article 2100 C.C.Q. ), something he failed to do. Consequently, the Respondent had the right to terminate the contract, under both clause 4.2 of the contract and

Article 2125 of the Civil Code of Quebec . The nature of the visa required [ 23 ] The Appellant submits that the visa he received did not allow him to work in Saudi Arabia and that the Respondent, through its representatives, deceived him as to the type of visa required and the visa renewal operation. [ 24 ] It is not necessary to decide whether the visa issued to the Appellant is appropriate. In fact, like all the other teachers providing service to the Royal Commission, he obtained a visa, which, in practice and to the knowledge of the Saudi authorities, allowed him to work without hindrance of any kind.

As disclosed by the evidence, the type of visa issued to the Appellant, by the Saudi authorities with full knowledge of the facts, allowed the holder to provide services to the Saudi Government. This was the Appellant’s situation, who, like the other 120 teachers, taught English for the Royal Commission. They all received the same visa. [ 25 ] The new evidence filed by the Appellant with his case management motion is not new or useful. It deals with Saudi laws and different types of existing visas and does not demonstrate how the visa issued to him was inappropriate.

At most, it demonstrates the lack of clarity in the Saudi procedure. In particular, the witness Zahrani, called by the Appellant, confirmed that only a corporation with a head office in Saudi Arabia can obtain a work visa for its employees, which is not the Respondent’s situation. The contractual obligations of the Respondent

[ 26 ] According to the Appellant, the Respondent did not honour its contractual obligations by failing to provide the services of the Banadora visa agency and by terminating the contract in bad faith. [ 27 ] The Respondent properly guided him in his communications with the Banadora visa agency. In fact, its representatives informed him in February 2013 that he needed extra space in his passport to return to Saudi Arabia after a "visa run". The Appellant did not act on this information.

It was incumbent upon him to take the necessary steps to be in possession of an adequate passport, in which a visa could be placed. Failing this, the contract allowed the Respondent to terminate it (clause 8 of

Schedule II). The Appellant failed to comply with his obligation and so, the Respondent was justified in terminating the contract. The amount of damage [ 28 ] Since the appeal does not succeed on the substantive ground, it is not necessary to rule on the damages. It should be noted, however, that it is doubtful whether the Court could award damages that exceed the threshold of jurisdiction of the Court of Québec. [5] FOR THESE REASONS, THE COURT: [ 29 ] DISMISSES the amended motion for case management, without costs; [ 30 ] DISMISSES the appeal, with legal costs. FRANCE THIBAULT, J.A. MARK SCHRAGER, J.A.

MARIE-JOSÉE HOGUE, J.A. James Fleming In person Mtre Annie Marie Bourgeois LANGLOIS LAWYERS For the Respondent Date of hearing: September 25, 2018