Her Majesty v. Bowen Date:, 2013 BCPC 322

Citation: Her Majesty v. Bowen Date: 20131126 2013 BCPC 0322 File No: C69852 Registry: Nanaimo IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA CLAIMANT AND: CATHRINE MAY BOWEN DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE GOUGE Counsel for the Claimant: Haydn Shook (by telephone) Place of Hearing: Nanaimo , B.C. Date of Hearing: November 18, 2013 Date of Judgment: November 26, 2013

[1] The Claimant (“the Province”) applied for a review of the Registrar’s decision to refuse the Province’s application for a defaultorder, the Defendant having failed to file a Reply to the Notice of Claim. I granted the relief sought by the Province on November 18,2013. Mr. Shook, counsel for the Province, asked that I provide reasons for my decision. These are the reasons requested. [2] My jurisdiction in the matter is conferred by Rule 17, subrules 21 and 22 of the Small Claims Rules, which provide:

(21) If a party is dissatisfied with a decision of a registrar, the party may apply ... to a judge for a review of the registrar's decision.

(22) After hearing those parties who attend, the judge may confirm or change the registrar's decision. [3] On August 13, 2013, the Province filed an Amended Notice of Claim, alleging that the Defendant, a recipient of statutorydisability benefits, failed to disclose $11,589.03 of employment income and, as a result of that non-disclosure, was overpaid herdisability benefits by the same amount. The Province alleges that the overpayment constitutes a “debt due to” the Province. In thealternative, the Province seeks to recover that amount by way of a claim for unjust enrichment.

A claim for damages for fraudulentmisrepresentation was made in the original Notice of Claim, but that claim was excised from the amended pleading. [4] The Amended Notice of Claim was properly served on August 16, 2103. No Reply has been filed. [5] The Province applied for a default order. The Registrar refused that application. No formal reasons were given for therefusal. Mr. Shook informs me that the Registrar “... determined that the claim was not for a debt; therefore, a hearing would berequired before a judge as set out in Rule 6(5) of the Small Claims Rules ....”.

I take this to be a précis of the Registrar’s reasons, ratherthan a quote. [6] Rule 6, subrule 4 of the Small Claims Rules provides: If a claim is for a debt … , the registrar must make a default order requiring the defendant to pay immediately the amount claimed plusexpenses under Rule 20 (2) and any interest the claimant is entitled to. [7] The question is whether either or both of the claims made by the Province in this action are claims for “a debt”.

The Registrarwas perfectly correct to conclude that the mere allegation in the Notice of Claim, to the effect that the amount of the overpayment was adebt owing to the Province, was an insufficient basis upon which the Registrar could grant the order sought. The Registrar ought not tomake a default order unless the facts alleged and the applicable legal principles support the conclusion that the claim is for a debt. TheNotice of Claim in this case provided the Registrar with a sufficient factual matrix upon which to draw the requisite inference, but failedto articulate the legal basis for the inference.

Because the applicable legal principles in this case are quite arcane, it is not surprising thatthe Registrar refused the application. Unfortunately, it is necessary to expound those principles in order to explain the reasons for mydecision on this application. [8] In most cases, a debt arises from an express promise to pay, a statutory obligation, or a judgment. None of these are alleged inthe Notice of Claim in this case. However, debts may also arise in circumstances in which the common law or the law of equity imposesa legal obligation to pay a liquidated sum.

Descending from the vernacular, the common-law action for a contract debt was launched bya writ of special assumpsit, alleging an express promise to pay an amount certain. By contrast, the common-law writ of indebitatusassumpsit was available for the recovery of a liquidated sum where no express promise to pay was alleged, but the plaintiff alleged anobligation arising from a promise implied by law.

The action for unjust enrichment is a subset of those launched, at common law, by thewrit of indebitatus assumpsit, which, in turn, is a subset of the common-law action for debt: Halifax Fire Insurance Co vs McGilvray (AB KB), [1940] 1 DLR 77; Canada (Attorney-General) vs Becker 1998 ABCA 283; [1988] 4 WWR 347 @ paragraph 68; Ross vs HVLD Systems

(1977) Ltd (1999) (SK CA), 170 DLR (4th) 600. It follows that the Province’s claim inthis action was one for a debt, and a default order ought to be made. [9] I do not mean to suggest that the Registrar erred in this case. On the contrary, I think that the Registrar acted reasonably inrefusing the application for a default order in this case. Not every claim for restitutionary or quasi-contractual relief is properlycharacterized as a claim for a debt. It is not always easy to identify those which are and those which are not.

Where a Registrar is left ina state of doubt as to the proper characterization of a claim, she or he should refuse to make a default order, leaving it to the claimant toapply to a judge, as the Province has done in this case, if the claimant wishes to pursue the matter further. [10] It would be unwise to attempt in these reasons an exhaustive catalogue of those claims which are, or are not, properly describedas claims for debt.

However, the following general comments and examples may be helpful. [11] The characterization of a claim as one for a debt is dependent less on the cause of action than on the nature of the relief sought. [12] The apposite definition of “debt” provided by the Canadian Oxford Dictionary is “... a sum of money owed ...”. The word hasbeen judicially defined as: "... a sum payable in respect of a liquidated money demand, recoverable by action ...”: Diewald vs Diewald (SCC), [1941] SCR 35; Walsh Estate vs British Columbia (Minister of Finance) (BC SC), [1979] 4WWR 161; 13 BCLR 255.

Unless the claimant alleges that a specific sum of money, capable of arithmetic calculation, is owing, theclaim is not one for a debt. [13] So, for example, a claim for quantum meruit, although a restitutionary claim closely analogous to a claim for unjust enrichment,is not a claim for a debt because the amount of the claim cannot be determined until the court has assessed the fair value of the servicesprovided. Some claims for quantum meruit give a misleading impression that they are claims for a debt. For example, the claim may befor 100 hours of carpentry services at $25 per hour, for a total claim of $2500.

Such a claim appears to be one capable of arithmeticcalculation. However, the appearance is misleading because the nature of a claim for quantum meruit is for fair compensation at a rate

to be determined by the court, with the consequence that the arithmetic cannot be performed until the court has determined an appropriate rate of compensation. [ 14 ] By contrast, a claim alleging: i. a contract for carpentry services at $25 per hour, ii. that 100 hours of carpentry services were rendered under the contract; and iii. that the defendant has failed to pay anything for those services is a claim for a debt because the rate of payment was (or is alleged to have been) fixed by the contract before the cause of action arose. [ 15 ] Alternative claims are advanced in many actions, as they were in this case.

If any one or more of the pleaded claims are properly characterized as claims for a debt or debts, and no reply is filed, the claimant is entitled to a default order in respect of the claim(

s) for debt(s), even though the claimant has also filed an alternative claim which is not for a debt. So, if: a. a notice of claim advanced the claim described in paragraph 14, and, in the alternative, the claim described in paragraph 13; and b. no reply were filed, it would be appropriate for the Registrar to grant a default order. [ 16 ] In this case, the first-pleaded claim could not support a default order because the notice of claim failed to disclose the legal basis on which the claim was advanced.

However, the facts pleaded in support of the alternative claim for unjust enrichment are sufficient to allow me to conclude that it was a claim for a debt. Because one of the two alternative claims pleaded was a claim for a debt, the Province is entitled to a default order in relation to that claim. The alternative claim is rendered moot by the default order. November 26, 2013 ___________________________ T. Gouge, PCJ