King v. Mitchell, 2010 ABQB 741

Court of Queen ’ s Bench of Alberta Citation: King v.

Mitchell, 2010 ABQB 741 Date: 20101130 Docket: 0501 17743 Registry: Calgary Between: Norman Bruce King and Sharon Eileen Viste-King Plaintiffs - and - Catherine Ann Mitchell, Donald Foster Archibald, Nissa Enterprises Ltd., and Michael Nilsson Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice Hunt McDonald _______________________________________________________ [ 1 ] This case essentially arises due to a dispute between neighbours for damages incurred for the removal and reinstallation of an encroaching chain link fence and concrete pad between their two properties.

The Plaintiffs are the registered owners of 2106 - 7 th Avenue, N.W., located in the West Hillhurst area in Calgary, Alberta. The Defendants Mitchell and Archibald are the new owners of a property located next door to the Plaintiffs at 2046 - 7 th Avenue, N.W., in Calgary. [ 2 ] The Mitchell and Archibald house was a new development which had been constructed by W.G. Housing Ltd., operating as City Core Developments (“City Core”).

[ 3 ] The Plaintiffs had constructed a chain link fence just inside their property boundary prior to City Core buying the adjacent property and constructing the house that was eventually purchased by the Defendants, Mitchell and Archibald.

The Plaintiffs had a survey done to locate the property boundary prior to constructing their chain link just inside their property line. [ 4 ] When City Core was constructing the new residence next door to the Plaintiffs, their excavation caused a portion of the Plaintiffs’ chain link fence to collapse in the area from the rear of the Plaintiffs’ backyard shed to the front of their house. [ 5 ] These proceedings concern the portion of the chain link fence that remained standing from the rear of the Plaintiffs’ backyard shed to the back alley.

The Plaintiffs seek damages for what they allege is the continuous refusal of the Defendants to remedy the encroachments. [ 6 ] After the Defendants Mitchell and Archibald purchased 2046 - 7 Avenue, N.W., Calgary, they hired Nissa Enterprises Ltd. (“Nissa”) to professionally landscape their property. [ 7 ] Michael Nilsson, the principal of Nissa, sought the Plaintiffs’ permission to remove the portion of chain link fence that remained standing between the parties properties so that Nissa could complete landscaping and levelling on behalf of Mitchell and Archibald of the property between their backyards.

Once the levelling and grading work was completed by Nissa, Mitchell and Archibald planned to build a cedar fence between their property and that of the Plaintiffs. [ 8 ] At first the Plaintiffs refused Nissa permission to remove the chain link fence to facilitate the levelling and grading work necessary in order for the Defendants to install a concrete slab.

The Defendants planned to attach the concrete slab to the adjoining stone retaining wall and concrete landing located on the Plaintiffs property by their garage entry door in the backyard. [ 9 ] A second request of the Plaintiffs was made by Nissa seeking permission for temporary removal of the chain link fence, but with the added provision that the Defendants would complete some grading, levelling and landscaping on the Plaintiffs’ property at the Defendants’ sole cost prior to re-installing the chain link fence. [ 10 ] The Plaintiffs eventually agreed to the temporary removal of the chain link fence and allege that the following verbal contract with conditions was agreed to by the Defendants in respect of the removal: (

a) That the Defendants would restore the Plaintiffs’ chain link fence to its original location prior to erecting their cedar fence; (

b) That the Defendants would ensure that neither the cedar fence nor anything else encroached on the Plaintiffs’ property; (

c) That the Defendants’ landscaping agent Nissa while carrying out their professional landscaping on Mitchell and Archibald’s behalf would grade and landscape the new earth and cover it with a specific type of gravel; (

d) That the Defendants’ contractor Nissa would ensure that the earth in the newly levelled area was contained and Nissa would build a small sandstone wall on the Plaintiffs’ backyard and would use the type of sandstone that matched the Plaintiffs’ backyard pond and also matched its layered appearance and quality.

[ 11 ] The Defendants deny ever having entered into any contractual conditions with the Plaintiffs other then agreeing to reinstall the portion of the chain link fence they had permission to remove once the planned landscaping and grading work discussed with the Plaintiffs was completed. [ 12 ] There was some discussion between the Plaintiffs and Nissa regarding Nissa re-installing the entire length of chain link fence on the parties property boundary including the portion which collapsed during excavation by City Core.

The Defendants say that their agent Nissa only agreed with the Plaintiffs to re-install the entire length if they could get a work order from City Core agreeing to pay for Nissa’s services for re-installing the portion of chain link fence City Core caused to collapse during their excavation. [ 13 ] After the landscaping services were completed which comprised grading, levelling, building a retaining wall and pouring a concrete slab, Nissa then proceeded to commence erection of the cedar fence to be built just inside the adjoining property boundary with the Plaintiffs.

The Plaintiff Bruce King came home as the cedar fence was being erected and ordered Nissa to stop construction. He alleged breach of the agreement that his chain link fence would be erected prior to the cedar fence being built. Nissa’s employees went ahead in any event. [ 14 ] The Defendants were instructed not to come back on the Plaintiffs’ property.

In addition, the Plaintiffs instructed their legal counsel Richard Tingle to send a letter dated September 7, 2005 to Mitchell and Archibald noting breach of the agreement that the Plaintiffs’ chain link fence would be re-installed prior to construction of the Defendants’ cedar fence. As well, the cedar fence was noted to be encroaching on the Plaintiffs’ property and immediate removal was requested. The Defendants’ were instructed not to approach the Plaintiffs or to come on their property.

The Plaintiffs claim that the Defendants, or members of their family, set off firecrackers, made threats, threw litter on their property, displayed offensive signs and repositioned their security cameras after the encroachment issues arose. [ 15 ] An injunction application was heard by the Honourable Justice C.S. Brooker of this Court in 2006. Justice Brooker’s Order of June 30, 2006 determined that the cedar fence and concrete slab belonging to the Defendants were in

part located on the Plaintiffs’ property and were determined to constitute a trespass. Accordingly, the Defendants were ordered to cease trespassing and to remove the cedar fence and concrete slab that encroached onto the Plaintiffs’ property. Costs were awarded to the Plaintiffs. [ 16 ] The remedial work to be performed by the Defendants was not carried out in as timely a fashion as the Plaintiffs required.

A month later another interlocutory motion was filed by the Plaintiffs requesting a peremptory deadline for the removal of the encroachments and a prohibitory injunction restraining the Defendants, their agents and children from further harassment, trespass, mischief and nuisance. Counsel on behalf of the parties reached an agreement and the subsequent interlocutory application was adjourned sine die by consent. [ 17 ] In this action, the Plaintiffs claim damages for costs they incurred from the moment their fence was taken down by Nissa to when it was finally reinstalled.

They claim damages on the basis of an alleged breach of contract, or alternatively on the basis of restitutionary principles requesting to be put back to their original position, or alternatively they seek compensation for their reasonable mitigation expenses incurred in eventually re-installing the chain link fence. [ 18 ] The Plaintiffs allege that the Defendants adamantly refused to admit their mistake in encroaching on to a portion of the Plaintiffs property which was the subject of the injunction application heard by Justice Brooker.

Accordingly, they seek damages in the sum of $102,278.80 which comprises an amount they list for legal costs, surveyors costs, fence reinstallation costs, landscaping costs, video surveillance system installation costs and other miscellaneous costs. [ 19 ] The Defendants deny having entered into any agreement with the Plaintiffs other than an agreement allowing them to

temporarily remove the portion of the chain link fence remaining standing between their two properties in order to complete landscaping and grading work and then to re-install the fence. [ 20 ] The Defendants deny being responsible for the costs of re-installing the chain link fence as their contractor Nissa was denied access by the Plaintiffs and therefore they were unable to fulfill the agreement to re-install the chain link fence.

Therefore, the Defendants deny any responsibility to compensate the Plaintiffs for their legal costs, surveyors costs, fence re-installation costs, landscaping costs, video surveillance system costs and other miscellaneous costs totalling the sum of $102,278.82. [ 21 ] In addition to the actions before the Queen’s Bench of Alberta, the Plaintiffs previously commenced an action against City Core in the Provincial Court of Alberta. [ 22 ] The Plaintiffs received default judgment against City Core for the sum of $7,155.91 which was granted on February 9, 2006.

Damages were awarded for the Plaintiffs’ alleged costs in re-installing the chain link fence which City Core had caused to collapse during excavation of the land adjoining the Plaintiffs’ premises as well as other costs for damage to an air conditioning unit and an irrigation system.

ISSUES [ 23 ] The issue to be determined by the Court in this matter is whether the Plaintiffs are entitled to damages on the basis of: (1) breach of contract; (2) restitution; (3) reasonable mitigation expenses against the Defendants; for legal costs, surveyors costs, fence re-installation costs, landscaping costs, video surveillance system installation costs and some miscellaneous expenses. ANALYSIS Issue Number 1 - Are the Plaintiffs entitled to damages on the basis of breach of contract? [ 24 ] The first issue to be decided is the terms of the contract agreed upon between the parties.

It is the Plaintiffs’ allegation that four conditions were agreed upon between them and the Defendant’s agent Nissa when discussions were held regarding removal of the chain link fence.

These conditions were previously set out in paragraph 10. [ 25 ] The Defendants allege that the only agreement between the parties was that they would be able to remove the fence for purposes of landscaping as discussed with the Plaintiffs and then reinstall the portion of the fence at their expense. [ 26 ] It was stated in evidence by the Plaintiff Norman King reading from his prior action in the Provincial Court against City Core [June 10, 2010 transcript p. 66]: Rather, W.G. Housing [City Core] agreed to reinstall the portion of the chain-link fence that it had damaged and caused to collapse,

which ran parallel to the property line from the rear of the King’s backyard shed to the front of the house. [ 27 ] The Plaintiff Sharon King recalled a conversation with the Defendants about reinstalling the chain link fence but few other details of the alleged contract [June 10, 2010 transcript p. 102].

Sharon King confirmed during cross-examination that her approximately five minute conversation with the Defendants did not go beyond replacing the chain link fence at the cost of the Defendants [June 10, 2010 transcript p. 166]. [ 28 ] The Defendant Catherine Mitchell did not recall talking about the fence with the Defendants before its construction [June 10, 2010 transcript p. 125]. The Defendant landscaping contractor Michael Nilsson testified that the Plaintiff Norman King informed him of the damaged fence and he undertook to see if he could resolve the issue [June 11, 2010 transcript p. 5].

Michael Nilsson further testified that he did not initially reinstall the Plaintiffs’ chain link fence because he did not have a purchase order from City Core and later because he was instructed to stay off the Defendants’ property [June 11, 2010 transcript p. 13]. The Defendant Donald Archibald testified that he understood that the landscape contractor Nissa had agreed to do some “minor cleanup work” in the Plaintiffs’ yard [June 11, 2010 transcript p. 42]. [ 29 ] The principal function of the law of contracts is to protect reasonable expectations engendered by promises: see S.M.

Waddams, The Law of Contracts (Aurora: Canada Law Book, 2010) at p. 105; and Brooklin Heights Homes Ltd. v. Major Holdings & Developments Ltd. (1977), 17 P.R. (2d) 413 at paras. 10-11. I don’t accept that the parties agreed to the four conditions the Plaintiffs allege when discussing permission to remove the portion of the chain link fence remaining standing. The discussions presented in evidence given by Bruce King and Michael Nilsson were not that specific.

I find the only agreement made was that the Defendants’ agent could remove the chain link fence provided that they reinstall it once the levelling, retaining wall and landscaping was completed. Further, I don’t accept that there was any discussion as to which fence would be erected first. [ 30 ] It was established at the application before Justice Brooker that the Defendants’ agent Nissa built the cedar fence and a portion of cement pad on the Plaintiffs’ property.

That encroachment was removed and the issue of costs was dealt with by Justice Brooker at the conclusion of the injunction application. [ 31 ] Given that the Plaintiffs adamantly refused to have any of the Defendants on their property after the encroachment matter presented, I find that it was impossible for the Defendants to complete their agreement to reinstall the chain link fence. I therefore dismiss the Plaintiff’s claim for their costs for re-installation of the chain link fence.

Issue Number 2 - Are the Plaintiffs entitled to damages on the basis of restitutionary principles? [ 32 ] The Plaintiffs claim damages based on restitutionary principles from the Defendants in lieu of being able to be restored to their original position.

They quantify the time frame for claiming such damages from the time the Defendants removed the chain link fence until the time when the Plaintiffs had the chain link fence reinstalled. [ 33 ] The Plaintiffs claim as part of their loss the cost of installation of a commercial grade security system in their backyard due to the harassment that they claim they suffered at the hands of the Defendants or members of their family in the fire cracker incident, the incident of finding broken glass on their driveway, and the insulting signs posted by the surveillance cameras at a later date.

They also allege the Defendants threw chicken wing bones into the pond in their backyard. [ 34 ] The Plaintiff Bruce King also acknowledged while giving evidence that he was a security fanatic and had been looking into security systems prior to the incidents that occurred with Mitchell and Archibald. Mr. King even had his lawyer prepare a legal opinion on video security systems.

[ 35 ] The case of Hadley and Baxendale (1854) 9 Exch 341 sets out the basic rule for how to determine the scope of consequential damages arising from a breach of contract: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. [ 36 ] In short, Hadley and Baxendale provides that one is liable for all losses that ought to have been in the contemplation of the contracting parties. [ 37 ] Applying these principles to this case, are the damages for which the Plaintiffs claim generally foreseeable from their agreement that the Defendants could move the portion of the chain link fence temporarily while various landscaping work was completed on both parties lands? [ 38 ] Many of the losses claimed by the Plaintiffs in this case have to do with their proposition that the Defendants did not act in a timely enough manner to remedy the encroachments determined by Justice Brooker in the injunction application. [ 39 ] The Court heard submissions that labourers were generally hard to hire by contractors during the very busy building time in 2006 in the city of Calgary, especially for small projects.

Accordingly, the Defendants failed to remedy the encroachments identified by Justice Brooker in what the Plaintiffs allege was a reasonable time frame. [ 40 ] Those issues were dealt with in a subsequent interlocutory application after the injunction relating to the encroachment was determined by Justice Brooker. An agreement was reached between counsel prior to the subsequent injunction application being heard.

There is no basis upon which the Plaintiffs can come back to this court seeking further damages in respect of a matter that has already been dealt with. [ 41 ] In my view it could not fairly and reasonably be contemplated by the Defendants when the removal of fence contract was struck that the Plaintiffs would proceed to incur costs in an amount of $102,278.82 as a result of the encroachments. On the principle set out in Hadley v.

Baxendale , the Plaintiffs’ claims for such costs are dismissed. [ 42 ] In the Provincial Court of Alberta default judgment granted on February 9, 2006 against City Core for the costs the Plaintiffs suffered as a result of the chain link fence collapsing caused by City Core.

The new home next door to the Plaintiffs was eventually purchased by the Defendants. [ 43 ] In cross-examination it was established that the evidence submitted by the Plaintiffs to this Court for costs which the Plaintiffs claim as a result of the Defendants’ actions, are the same invoices that were submitted to the Provincial Court of Alberta in the City Core matter.

Accordingly, the Plaintiffs are not entitled to receive judgment in this Court for damages for which they have previously received judgment in the Provincial Court against another named Defendant. [ 44 ] The matters alleged in the Statement of Claim relating to the Plaintiffs’ chain link fence have previously been fully explored and resolved in the Plaintiffs Provincial Court Claim and the interlocutory injunction proceeding heard in Queen’s Bench.

Therefore the Plaintiffs are estopped and precluded from maintaining any claim against the Defendants for any matters relating to the chain link fence as the matter is res judicata . [ 45 ] In my view the Plaintiffs are the authors of their own misfortune. I do not find that their actions were reasonable once the encroachment matter was resolved by Justice Brooker. Therefore the equitable remedy of recission is not available to the Plaintiffs. The costs associated with the encroachment were dealt with by the Honourable Justice Brooker in his decision once the injunction order was granted.

[ 46 ] Although punitive damages were requested in the Prayer for Relief in the Statement of Claim issued by the Plaintiffs, the Plaintiffs’ counsel conceded that punitive damages were not substantiated on the evidence. [ 47 ] The Plaintiffs would probably have been entitled to some costs regarding the re-installation of the chain link fence for the portion of property that the Defendants had removed. However, due to the Plaintiffs’ adamant refusal to allow the Defendants onto their property, the Defendants were frustrated in performing that portion of the agreement.

Accordingly I award no damages for the re- installation. Issue Number 3 - Are the Plaintiffs entitled to damages on the basis of reasonable mitigation? [ 48 ] The Plaintiffs alternatively argued that under the principles set forth in the Apex v. Ceco 2008 ABCA 125 , 429 A.R. 110, the Plaintiffs should be entitled to their expenses to mitigate the damage caused by the Defendants’ encroachments.

Justice Côté held at para. 60 that, “[i]f an attempt to mitigate is reasonable, then its expenses or losses are always recoverable as damages for the breach”. [ 49 ] The Plaintiffs’ claimed expenses include legal costs, surveyors costs, fence re-installation costs, landscaping costs, video surveillance system installation costs and some miscellaneous expenses. In order to apply the principles from Apex. v. Ceco , the Court must be satisfied that the Plaintiffs acted in a reasonable manner following the determination that an encroachment existed.

I have already found that the Plaintiffs did not act reasonably in incurring $60,000 in legal fees, installing a $24,060.85 commercial grade video surveillance system, plus incurring the other listed costs. They were not placed in this situation as a result of a breach by the Defendants of the agreement regarding temporary removal of the chain link fence. [ 50 ] As I do not find that the Plaintiffs actions were reasonable, I hereby dismiss all claims of the Plaintiffs in this action. Costs [ 51 ] If the parties are unable to agree on costs, they may make an appointment to speak to costs.

Heard on the 10 th day of June, 2010. Dated at the City of Calgary, Alberta this 30th day of November, 2010.

S. L. Hunt McDonald J.C.Q.B.A. Appearances: Brett Code of Bennett Jones for the Plaintiffs Roger Smith of Macleod Dixon for the Defendants