T-2786-79
Robert McLaren, Garry Seeman and Donald
Thompson (Plaintiffs)
v.
The Queen (Defendant)
Trial Division, Muldoon J.—Regina, October 26
and 27, 1983; Ottawa, May 1, 1984.
Restitution — Plaintiffs supplying seed and services to
rancher in adverse possession of Crown land pending outcome
of legal proceedings — Rancher unsuccessful — Actions based
on unjust enrichment — Actual benefit less than potential
because of weeds and having to swath and bale hay — Actions
dismissed in absence of special relationship between parties —
Nicholson v. St-Denis et al. (1975), 57 D.L.R. (3d) 699 (Ont.
C.A.) applied — Contractual, fiduciary or matrimonial rela
tionship required — Relationship usually characterized by
knowledge of benefit by defendant and express or implied
request by defendant for benefit, or acquiescence in perform
ance — Theory of incontrovertible benefit, justifying requiring
defendant to pay for benefit without establishing volitional
requirement, not accepted in Canada as basis for judicial
intervention in unjust enrichment case — Greenwood v Ben-
nett, 119721 3 All E.R. 586 (C.A.) extending principle beyond
circumstances of special relationship to case where plaintiff
doing work on property he honestly believes he owns, distin
guished — Plaintiffs knowing not owning property, and know
ing seed and services supplied to rancher to whom must look
for payment.
Agency — Agency of necessity — Plaintiffs supplying seed
and services to rancher remaining in adverse possession of
Crown land pending outcome of legal proceedings — No
contractual relationship between plaintiffs and defendant —
No necessity for alleged agents acting upon own view of
purported emergency as alleged principal, whether rancher,
defendant or Indian Affairs, always accessible for precise
instructions — Rancher knowing no specific authority to do
anything about land or spring seeding — No agency by con
tract, implication or necessity — If plaintiffs innocent victims
of misrepresentations, they were effected by words and conduct
of rancher.
CASES JUDICIALLY CONSIDERED
APPLIED:
Nicholson v. St-Denis et al. (1975), 57 D.L.R. (3d) 699
(Ont. C.A.).
DISTINGUISHED:
Greenwood v Bennett, [1972] 3 All E.R. 586 (C.A.).
CONSIDERED:
Comeau v. Province of New Brunswick (1973), 36
D.L.R. (3d) 763 (N.B.C.A.); Fibrosa Spolka Akcyjna v.
Fairbairn, Lawson, Combe Barbour Lei., [1943] A.C. 32
(H.L.).
REFERRED TO:
McKissick, Alcorn, Magnus & Co. v. Hall, [1928] 3
W.W.R. 509 (Sask. C.A.); Morrison v. Can. Surety Co.
and McMahon (1954), 12 W.W.R. (N.S.) 57 (Man.
C.A.); Deglman v. Constantineau, [1954] S.C.R. 725;
[1954] 3 D.L.R. 785; Reeve v. Abrahams (1957), 22
W.W.R. 429 (Alta. S.C.); Walsh Advertising Co. Ltd. v.
The Queen, [1962] Ex.C.R. 115; Estok v. Heguy (1963),
43 W.W.R. 167 (B.C.S.C.); Glavin v. MacLean (1972), 5
N.S.R. (2d) 288 (Co. Ct.); Ross v. Ross, Jr. et al.
(1973), 33 D.L.R. (3d) 351 (Sask. Q.B.); Pettkus v.
Becker, [1980] 2 S.C.R. 834; T & E Development Ltd. v.
Hoornaert (1977), 78 D.L.R. (3d) 606 (B.C.S.C.);
Republic Resources Ltd. v. Ballem, [1982] I W.W.R.
692 (Alta. Q.B.); Ledoux v. Inkman et al., [1976] 3
W.W.R. 430 (B.C. Co. Ct.); Norda Woodwork & Interi
ors Ltd. v. Scotia Centre Ltd., [1980] 3 W.W.R. 748
(Alta. Q.B.).
COUNSEL:
Paul Elash for plaintiffs.
Mark Kindrachuk for defendant.
SOLICITORS:
Kohaly & Elash, Estevan, Saskatchewan, for
plaintiffs.
Deputy Attorney General of Canada for
defendant.
EDITOR'S NOTE
The Editor has decided that the reasons for
judgment herein should be reported for the dis
cussion of the legal issues of agency of necessity
and unjust enrichment but that the facts of the
case could be summarized without impairing the
reader's appreciation of the questions of law
involved.
The facts were that a rancher mortgaged his
land in favour of the Industrial Development Bank
and his interest was subsequently foreclosed. The
Department of Indian Affairs and Northern De
velopment acquired title. The rancher com
menced legal proceedings (which eventually
ended without success) seeking a further oppor
tunity to redeem. While these were in progress,
the rancher was permitted, under an informal
agreement, to remain in adverse possession. It
was during this period that the plaintiffs supplied
seed and services to the rancher and they have
brought action to recover the value of these from
Her Majesty on the grounds of either agency of
necessity or unjust enrichment. There was here
no question of any contractual relationship be
tween the plaintiffs and the defendant.
The following are the reasons for judgment
rendered in English by
MULDOON J.: The first line of argument which
counsel advanced on behalf of the plaintiffs is that
there was an agency of necessity and/or of implica
tion. In this regard, counsel did no more than to
refer to Halsbury, Third Edition, volume 1. He
asserted that it is a well-settled principle of law
that agency may arise in at least one of two ways,
and he referred to a passage on page 145 of the
cited volume:
... agency arises whenever one person, called "the agent", has
authority, express or implied, to act on behalf of another, called
"the principal", and consents so to act.
Counsel next referred to paragraph 364 of volume
1 [at pages 152-153], Halsbury, Third Edition, by
reading the following; but omitting the words in
square brackets:
The contract of agency is created by the express or implied
agreement of principal and agent, or by ratification [by the
principal of the agent's acts done on his behalf.]
and:
Implied agency arises from the conduct or situation of the
parties, [or from necessity.]
Counsel next quoted indirectly from paragraph
373 of the cited volume saying:
Halsbury also, at paragraph 373, refers to something it calls
the agency of necessity. This arises, according to Halsbury,
wherever a duty is imposed upon a person to act on behalf of
another, apart from any contract of agency they may have and
in circumstances of emergency, in order to prevent irreparable
injury. That's an analogy and certainly not identical to the
situation at hand.
Halsbury goes on to say it may also arise in agency by
necessity where a person acts in the interests of another to
preserve his property from destruction.
The foregoing being the plaintiffs' case in
regard to the import of the law of agency in these
circumstances, it may be noted that the defend
ant's counsel, in reply, referred to the case of
Comeau v. Province of New Brunswick.' That is a
case which might have been decided differently on
equitable principles. The headnote, which suf
ficiently encapsulates the necessary facts and the
law which was applied, is as follows [at page 763]:
Where a social worker employed by a provincial Government
Department of Health and Welfare, in order to induce a
landlord to rent premises to a certain tenant, undertakes that
the premises will be left in good condition, and the landlord, on
the strength of the undertaking, rents the premises to the
tenant, the provincial Government is not liable for breach of the
undertaking. Such an undertaking is not authorized by statute
nor does it necessarily pertain to the objects of the Department
of Health and Welfare. Consequently, at least in the absence of
express authority by a responsible official, the Government is
not bound by the undertaking.
[DeCosmos v. The Queen (1883), 1 B.C.R. (Pt.II) 26, apld]
In any event it is clear that, whatever the plight
of the land in the case at bar, there was no agency
of necessity proved here. On all of the evidence it
is apparent that whether the plaintiffs are alleging
that Mr. Lees [the rancher] was their principal, or
that the defendant or Indian Affairs was their
principal, the alleged principal was quite accessible
at all material times for precise instructions; and
there was no necessity for the alleged agents to act
upon their own view of the purported emergency,
if any. Certainly Mr. Lees knew, if the plaintiffs
did not, that he had no specific authority at the
time to do anything about the land or spring
seeding. Mr. Lees knew, because of his own deter
mination to remain in unlawful possession, that
Indian Affairs was going to leave him undisturbed
until it had clear judicial authorization to evict
him. Mr. Lees would have had to be wilfully blind
to believe that Mr. Irvine [a business service offi
cer with Indian Affairs] could confer the status of
agent upon him on behalf of the defendant. It is
extremely doubtful that he even believed it. No
such status was conferred in fact or in law. The
' (1973), 36 D.L.R. (3d) 763 (N.B.C.A.).
alleged authority, said by Mr. Lees to have been
conferred by Mr. Leask [Acting Regional Director
of Indian Affairs] in a telephone conversation with
the now deceased Mr. Bamford [the rancher's
solicitor], is not proved on a balance of probabili
ties, in view of Mr. Leask's credible appreciation
of his own position and authority at the material
time.
In sum there was no agency by contract,
implication or necessity upon which the plaintiffs
can successfully base their claims against the
defendant. If the plaintiffs were the innocent vic
tims of any misrepresentations, then the misrepre
sentations were effected by the words and conduct
of Mr. Lees, and not by those of any officer, agent
or servant of the defendant.
The notion of implied agency already negatived
could arise in regard to the plaintiffs' counsel's
main argument of law upon which they seek to
make their--claims, unjust enrichment. There is no
doubt that the defendant derived some benefit
from the contributions of Mr. McLaren and Mr.
Seeman, and also from the seed which Mr.
Thompson sold to Mr. Lees, upon finding on a
balance of probability, that it was actually sown to
the defendant's land. That finding, being reason
able in the circumstances, is confirmed. However
the potential full benefit of the plaintiffs' contribu
tions is not commensurate with the actual benefit,
because of weed infestations and the practical
necessity of having to swath and bale some of that
which grew where the plaintiffs did work and
furnished seed. Accordingly, if one were to accede
to the plaintiffs' claims on a quantum meruit
basis, one would award them amounts less than
their respective claims. It would be exceedingly
difficult, if not impossible, to be accurate in
making any such awards.
First, it is necessary to determine whether the
plaintiffs can lawfully succeed upon their claims
on the ground of the unjust enrichment said to be
retained by the defendant at the plaintiffs'
expense.
This is still a vaguely defined area of the
common law in Canada. Many of the reported
cases begin on the premise enunciated by Lord
Wright in the case of Fibrosa Spolka Akcyjna v.
Fairbairn, Lawson, Combe Barbour, Ld., 2 thus:
It is clear that any civilized system of law is bound to provide
remedies for cases of what has been called unjust enrichment or
unjust benefit, that is to prevent a man from retaining the
money of or some benefit derived from another which it is
against conscience that he should keep. Such remedies in
English law are generically different from remedies in contract
or in tort, and are now recognized to fall within a third
category of the common law which has been called quasi-con
tract or restitution.
One can hardly quarrel with this principle, but one
wonders in what circumstances it is to be applied.
Certainly if there be two parties to an arrangement
and one of them, by words or conduct, has induced
the second to enrich the first in circumstances in
which the second would be unlikely to have made a
gift to, or conferred a gratuitous benefit upon, the
first one whose words or conduct are proved, then
it seems clear that the principle ought to be
applied. But what if there were the intervention of
a third party? Or what if there were no arrange
ment between the plaintiff and the defendant, at
all? What if, as in the case at bar, both of those
circumstances were found? So it is that the expres
sion of Lord Wright's dictum is rather more simple
and clear than its application.
Mr. Justice (now Associate Chief Justice) Mac-
Kinnon commented on that very dictum, in the
case of Nicholson v. St-Denis et a1. 3 in the
Ontario Court of Appeal. After quoting it, he
wrote [at page 701]:
The trial Judge acknowledged that the words were extremely
broad and general but he felt that the Court should not attempt
to whittle them down. Counsel for the plaintiff took the position
in this Court that these words really meant that it was totally
dependent upon the individual Judge's conscience as to whether
he considered the circumstances such as to give rise to the
remedy of unjust enrichment.
If this were a true statement of the doctrine then the unruly
horse of public policy would be joined in the stable by a steed of
2 [1943] A.C. 32 (H.L.), at p. 61.
3 (1975), 57 D.L.R. (3d) 699 (Ont. C.A.).
even more unpredictable propensities. The law of unjust enrich
ment, which could more accurately be termed the doctrine of
restitution, has developed to give a remedy where it would be
unjust, under the circumstances, to allow a defendant to retain
a benefit conferred on him by the plaintiff at the plaintiffs
expense. That does not mean that restitution will follow every
enrichment of one person and loss by another. Certain rules
have evolved over the years to guide a Court in its determina
tion as to whether the doctrine applies in any particular
circumstance.
He identified one salient factor, that of a special
relationship between the parties, in the following
passage:
It is difficult to rationalize all of the authorities on restitution
and it would serve no useful purpose to make that attempt. It
can be said, however, that in almost all of the cases the facts
established that there was a special relationship between the
parties, frequently contractual at the outset, which relationship
would have made it unjust for the defendant to retain the
benefit conferred on him by the plaintiff—a benefit, be it said,
that was not conferred `officiously". This relationship in turn is
usually, but not always, marked by two characteristics, firstly,
knowledge of the benefit on the part of the defendant, and
secondly, either an express or implied request by the defendant
for the benefit, or acquiescence in its performance.
Prior to his statement in the Fibrosa case, Lord Wright had
earlier discussed the doctrine of restitution in Brook's Wharf &
Bull Wharf Ltd. v. Goodman Bros., [1937] 1 K.B. 534, and
stated (p. 545):
The obligation is imposed by the Court simply under the
circumstances of the case and on what the Court decides is
just and reasonable, having regard to the relationship of the
parties.
(Emphasis added.) This passage was quoted and applied by the
Supreme Court in County of Carleton v. City of Ottawa,
[1965] S.C.R. 663 at p. 668, 52 D.L.R. (2d) 220 at p. 225.*
What is that special relationship? It may be
contractual, fiduciary or matrimonial. It may be a
very casual arrangement, or an unenforceable con
tract. It seems to be the sine qua non of success,
but it is not an inevitable guarantee of success. A
special relationship is a factor in all but two of the
cases, cited here by counsel, in which the plaintiffs
have succeeded. It is the essential nexus between
the defendant's words and conduct, and the plain
tiff's conferring of the benefit, in the following
cases:
4 Ibid., at pp. 701 and 702.
McKissick, Alcorn, Magnus & Co. •v. Hall; 5 Mor-
rison v. Can. Surety Co. and McMahon; 6 Deglman
v. Constantineau; 7 Reeve v. Abrahams; 8 Walsh
Advertising Co. Ltd. v. The Queen;' Estok v.
Heguy; 10 Glavin v. MacLean;" Ross v. Ross, Jr. et
al.; 12 Pettkus v. Becker;" T & E Development
Ltd. v. Hoornaert; 14 Republic Resources Ltd. v.
Ballem. 15
Although the nexus of some previous relationship
was established in the McKissick case and in the
Republic Resources case, other circumstances
nevertheless denied success to the respective
plaintiffs.
Counsel referred as well to a thorough work on
this subject by George B. Klippert, entitled Unjust
Enrichment (Butterworths, Toronto, 1983) in
which a vast and eclectic body of jurisprudence is
collected. At page 95 there begin passages dealing
with quantum meruit and "incontrovertible bene
fit". The latter theory, according to the learned
author, "would justify requiring a defendant to
pay for a benefit without establishing a volitional
requirement." However, he concludes that incon
trovertible benefit has not been accepted in
Canada as a basis for judicial intervention in an
unjust enrichment action.
The claim of unjust enrichment has been made
in other cases, and failed, where the court found
no nexus or special relationship—or no adequate
nexus—between the parties. The cases cited here
in this category are: Nicholson v. St-Denis et al.; 16
Ledoux v. Inkman et al.;' 7 Norda Woodwork &
Interiors Ltd. v. Scotia Centre Ltd. 18 .
5 [1928] 3 W.W.R. 509 (Sask. C.A.).
6 (1954), 12 W.W.R. (N.S.) 57 (Man. C.A.).
[1954] S.C.R. 725; [1954] 3 D.L.R. 785.
8 (1957), 22 W.W.R. 429 (Alta. S.C.).
9 [1962] Ex.C.R. 115.
10 (1963), 43 W.W.R. 167 (B.C.S.C.).
it (1972), 5 N.S.R. (2d) 288 (Co. Ct.).
12 (1973), 33 D.L.R. (3d) 351 (Sask. Q.B.).
13 [1980] 2 S.C.R. 834.
14 (1977), 78 D.L.R. (3d) 606 (B.C.S.C.).
15 [1982] 1 W.W.R. 692 (Alta. Q.B.).
16 Supra, footnote 3 (Leave to appeal to S.C.C. refused
[1975] 1 S.C.R. x).
17 [1976] 3 W.W.R. 430 (B.C. Co. Ct.).
18 [1980] 3 W.W.R. 748 (Alta. Q.B.).
In the immediately above-mentioned cases the
plaintiffs failed because no special relationship was
established, even though in the latter two cases
(Ledoux and Norda) the defendants knew that the
plaintiffs were doing work which was claimed to
have enhanced the value of the respective defend
ants' properties.
In one non-Canadian case, that of Greenwood y
Bennett, 19 no special relationship existed and yet
the plaintiff succeeded. There, the defendant was
the victim of a theft and conversion of its automo
bile which the plaintiff believed he had bought and
which he had extensively repaired in regard to
damage largely caused by the thief. Nemo dat
quod non habet, but the plaintiff honestly,
although mistakenly, believed that he had title, so
he claimed the cost of the repairs from the real
owner. The plaintiff failed in the County Court,
but he appealed. In allowing his appeal, Lord
Denning M.R., said: 2°
Counsel for Mr Bennett has referred us to the familiar cases
which say that a man is not entitled to compensation for work
done on the goods or property of another unless there is a
contract express or implied to pay for it. We all remember the
saying of Pollock CB: "One cleans anther's shoes. What can
the other do but put them on?" (Taylor y Laird (1856), 25 LJ
Ex 329 at 332). That is undoubtedly the law when the person
who does the work knows, or ought to know, that the property
does not belong to him. He takes the risk of not being paid for
his work on it. But it is very different when he honestly believes
himself to be the owner of the property and does the work in
that belief.
That case is an extension of the principle beyond
the circumstance of special relationship. If it
evinces the common law of Canada, which is
highly doubtful, it nevertheless is not applicable to
the circumstances of the case at bar. The plaintiffs
here knew, of course, that they themselves did not
own the land in question. In light of the general
knowledge of people in the area that Lees was
being forced off his former land by the govern
ment, the plaintiffs probably knew, and certainly
had good reason to believe that Lees was in unlaw
ful possession. They all knew that they had sup
'9 [1972] 3 All E.R. 586 (C.A.).
20 Ibid., at p. 589.
plied the seed and services to Lees, and not to the
defendant, and they all believed that it was Lees to
whom they must look for payment.
There was, no doubt, a probable basis for misun
derstanding between the defendant and Lees,
fuelled and enhanced by the latter's virtually invin
cible hope and determination not to be displaced
but, indeed, to regain title to the ranch without
any interruption of occupancy. Indian Affairs,
advised by the Department of Justice, was simply
letting Lees remain in occupancy until judicial
authorization had been obtained to evict him from
the land. That authorization was accorded sooner
than either Lees or the defendant expected and
when it came, the defendant with absolutely no
inconsistency, in regard to past conduct, moved
promptly to effect the eviction.
The salient factor in this case is the absence of
any special relationship between the parties. The
plaintiffs and the defendant were drawn into this
dispute because of the conduct of John Harold
Maxwell Lees, against whom the plaintiffs would
have had a cause of action for the value of seed
and services, if they had elected to pursue it. In the
circumstances of this case, in the absence of any
special relationship, and on the evidence, the
defendant must be exonerated and the plaintiffs'
actions must be dismissed, with costs to be taxed,
if the defendant chooses to exact them.
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