Askar v. Canada, 2013 MBCA 84

Citation: Askar v. Canada, 2013 MBCA 84 Date: 20130918 Docket: AI 13-30-07915 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Mr. Justice Marc M. Monnin Mr. Justice William J. Burnett BETWEEN : ) MAJDI ASKAR ) F. J. Trippier and ) S. Cadili (Plaintiff) Appellant ) for the Appellant ) - and - ) J. I.

Katz ) for the Respondent HER MAJESTY THE QUEEN IN RIGHT ) OF CANADA as represented by the ) Appeal heard: MINISTER OF HEALTH and THE ) September 9, 2013 ATTORNEY GENERAL OF CANADA ) ) Judgment delivered: (Defendant) Respondent ) September 18, 2013 ) BURNETT J.A. [ 1 ] The plaintiff appeals the dismissal of his claim for damages for non-payment of professional fees. [ 2 ] The plaintiff graduated from medical school in Libya and his first language is Arabic. He entered into a written contract with the defendant (Canada) to provide physician services in Northern Manitoba between July 10, 2007 and March 31, 2008.

The contract was a standard form contract approved by Doctors Manitoba, and the plaintiff concedes in his factum that the contract “governed the entire relationship between the parties.” [ 3 ] The contract expressly provided that the defendant would pay the plaintiff “a sum not to exceed $150,000.00 inclusive of GST or HST” with a maximum payment of $110,377 for professional services and $39,623 for expenses and GST. Under the terms of the contract, the plaintiff was required to seek approval to increase the contract amount beyond $150,000. Of particular significance is the following provision in art.

D2.1: …. [The plaintiff] is not obliged to perform any work or provide any service that would cause the total liability of [Canada] to be exceeded without the prior written approval of the Departmental Representative. …. [ 4 ] The plaintiff was also required to provide notice as to the adequacy of the $150,000 at specified times, together with

an estimate of additional funds if the $150,000 was inadequate. The contract contemplated ongoing billings for services and expenses topermit Canada to budget and monitor the expenditures.

The plaintiff never sought an increase in the contract amount, he failed toprovide the requested notices, and with one exception, he did not submit invoices until more than nine months after the termination of thecontract on March 31, 2008. [5] Canada paid the plaintiff the full amount specified in the contract for professional fees ($110,377) and all of theplaintiff’s travel expenses. [6] The plaintiff says that he has not been paid $110,555 for physician services.

In his statement of claim, he seeks adeclaration that he is entitled to relief from forfeiture pursuant to s. 35 of The Court of Queen’s Bench Act, C.C.S.M., c. C280, or in thealternative, damages on the basis of unjust enrichment.

The trial judge denied both requests. [7] The parties agree that all issues raised in this appeal involve questions of fact or of mixed fact and law, and that thestandard of review applicable to each of those issues is the standard of palpable and overriding error (i.e. “clear to the mind or plain tosee”). [8] The leading authority on the doctrine of relief from forfeiture is the Supreme Court of Canada decision inSaskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., (SCC), [1994] 2 S.C.R. 490.

In that decision, thecourt said (at p. 504): The power to grant relief against forfeiture is an equitable remedy and is purely discretionary. The factors to be considered by the Courtin the exercise of its discretion are the conduct of the applicant, the gravity of the breaches, and the disparity between the value of theproperty forfeited and the damage caused by the breach: Shiloh Spinners Ltd. v.

Harding, [1973] A.C. 691 (H.L.); Snell’s Equity (29thed. 1990), at pp. 541-42. [9] With respect to the trial judge’s refusal to grant relief from forfeiture, the plaintiff says that he had an accrued right topayment for services in excess of the maximum amount stipulated in the contract.

Canada, on the other hand, says that the contractexpressly limited the amount the plaintiff could be paid; that the plaintiff was under no obligation to provide services for a value greaterthan the amount specified in the contract; and that Canada was under no obligation to pay for such additional services, unless they wereapproved in advance and in writing. Canada submits that because the plaintiff failed to obtain such approval, relief from forfeiture isnot appropriate. [10] In her assessment of the evidence, the trial judge found that the plaintiff was not credible.

In particular, she did notaccept that the plaintiff did not understand the contract because English was not his first language. The trial judge concluded that therewas no forfeiture because the plaintiff failed to satisfy a condition precedent before Canada could increase the payment due to him underthe contract; that is, he failed to provide the necessary notice to enable Canada to consider his request for increasing the contract limit.

The trial judge found that even if there had been a forfeiture at law, she would not grant equitable relief by way of relief from forfeiturebecause the plaintiff’s non-compliance with the process contemplated by the contract, while not willful, was reckless and unreasonable. [11] In my view, the appeal of the trial judge’s decision to deny relief from forfeiture can be answered without addressingthe difficult issue as to whether she was correct when she concluded that there was no forfeiture in this case.

The deference I owe to herfinding that the plaintiff’s conduct was unreasonable is full answer to this aspect of the plaintiff’s claim for relief. (See SaskatchewanRiver Bungalows at pp. 504-505 where the Supreme Court came to a similar conclusion.) The decision to deny relief from forfeiture onthis basis was discretionary in nature, and the plaintiff has not demonstrated an error in principle or fact or convinced me that the result isso unjust that it requires this court’s intervention. See Towers Ltd. v.

Quinton’s Cleaners Ltd. et al., 2009 MBCA 81 at paras. 25-26, 28,245 Man.R. (2d) 70. [12] Turning to the issue of unjust enrichment, there are three elements to that doctrine: an enrichment of the defendant, acorresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment. With respect to the third element,there are two parts to the analysis:

a) the plaintiff must show that no juristic reason to deny recovery exists from an established category;

b) if there is no juristic reason from an established category, the plaintiff has made out a prima facie case which is rebuttable by thedefendant if he can show there is another reason to deny recovery. The burden of proof is then on the defendant to show why theenrichment should be retained. When assessing the second part of the juristic reason analysis, a court must have regard to the reasonableexpectations of the parties and to public policy considerations. (See Garland v. Consumers’ Gas Co., 2004 SCC 25 at paras. 30, 44-46, 47, [2004] 1 S.C.R. 629, and Kerr v.

Baranow, 2011 SCC 10 atparas. 32, 35-41, 43-44, [2011] 1 S.C.R. 269.) [13] In the present case, there has been an enrichment of Canada and a corresponding deprivation of the plaintiff. Thecontroversy, to use Canada’s words, lies in the third element, whether the retention by Canada is without juristic reason. [14] Here, the trial judge found that at all material times a contract existed between the parties and that it was a juristicreason for the non-payment. I agree. The contract expressly limited the amount the plaintiff could be paid.

It also provided that theplaintiff was under no obligation to provide services valued greater than the limit under the contract and that Canada was under noobligation to pay for such additional services, unless they were approved in advance and in writing. Simply stated, the contract expressly

disentitled the plaintiff from recovery in the exact circumstances which exist in this case.

The plaintiff did additional work despitehaving no obligation to do so, with no notice to Canada, and Canada could not choose to pay for the additional work without the priorapproval. [15] It was contended that when considering relief from forfeiture, the trial judge found that there “was a failure to complywith a condition precedent to the formation of a contract for increased funding” (at para. 43), and given that finding, it would beinconsistent to find that a contract constitutes a juristic reason for denying a claim based on unjust enrichment.

However, the trialjudge’s reasons, read in context, plainly refer to an amendment to, or an agreement to amend, the existing contract. [16] To be clear, as the contract existed at all material times, I am of the view that the trial judge correctly denied damagesfor a juristic reason. See Rillford Investments Ltd. v. Gravure International Capital Corp. (1997), (MB CA), 118Man.R. (2d) 11 at para. 29. [17] The trial judge also found, based on the legitimate expectations of the parties and moral/policy considerations, thatequitable relief by way of damages for unjust enrichment would not be appropriate.

Here the reasonable expectation of the parties wasthat no more than $150,000 would be spent on the contract without a formal amendment. I agree with the Crown’s submission that itcould not have been a reasonable expectation that the plaintiff would be paid for everything he did, regardless of the extent to which heexceeded what Canada had agreed to pay, and notwithstanding the plaintiff’s failure to provide any sort of notice of his intentions. [18] The plaintiff asserts numerous other grounds of appeal, including that the trial judge made a number of palpable andoverriding errors of fact.

For example, the plaintiff asserts that the trial judge erred when she failed to find that he did not understand thecontract, that he did not receive notice that he might not be paid for all of his work until after he had completed such work, and thatCanada had waived strict compliance with the terms of the contract. [19] Again, having carefully considered the evidence and counsels’ submissions, I am not persuaded that the trial judgemade any palpable and overriding errors of fact. As previously indicated, the trial judge found the plaintiff to be an incredible witness.

In particular, she provided cogent reasons for her concerns about the credibility of the plaintiff’s assertion that he did not understand thelimit of liability in the contract. The trial judge reviewed the evidence in detail and with care, and the evidence fully supports herfindings. The trial judge’s findings of fact and credibility, which are entitled to deference, are unassailable. [20] Given my conclusions, the plaintiff’s appeal with respect to aggravated damages need not be addressed. [21] I would, therefore, dismiss the appeal. Canada is entitled to one order of costs. J.A. I agree: J.A. I agree: J.A.