Mintoft v. Becker, 2011 ABQB 434

Court of Queen ’ s Bench of Alberta Citation: Mintoft v. Becker, 2011 ABQB 434 Date: 20110705 Docket: 1001 10102 Registry: Calgary Between: Jon Mintoft Plaintiff - and - Colin J. Becker, William L.

Bradley, Gabor Zinner, Bridegate Financial Corporation, River Run Plaza Corporation, River Run Resort Corporation, River Run Terraces Corporation, River Run Vistas Corporation, River Run Lakes Corporation, River Run Management Inc., Mountain Escapes Corporation, 1476613 Alberta Ltd., 1474359 Alberta Ltd., 1474353 Alberta Ltd., 1473484 Alberta Ltd., 1474338 Alberta Ltd., 1473207 Alberta Ltd., 1474368 Alberta Ltd., 1473898 Alberta Ltd., John Doe 1-4, and ABC Ltd. 1-10 Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice P.M.

Clark _______________________________________________________ Introduction [ 1 ] The Plaintiff, Jon Mintoft, has commenced proceedings against Gabor Zinner, a lawyer practising law in the City of Calgary, in the Province of Alberta, seeking an order setting the costs payable to the Plaintiff by the Defendant Gabor Zinner ( “ Zinner ” ) and, in particular, an order approving the Plaintiff ’ s solicitor-client bill of costs in the amount of $50,207.54. Background

[ 2 ] The Plaintiff and the Defendants William L. Bradley ( “ Bradley ” ) and Colin J.

Becker ( “ Becker ” ) were equal shareholders and the directors of a corporation known as Stonebridge Resorts Corporation ( “ Stonebridge ” ), which was formed for the purposes of pursuing real estate development opportunities in Alberta and elsewhere. [ 3 ] On March 14, 2008, the Plaintiff filed a Notice of Motion in Action No. 0401-04918 against Bradley, Becker, Stonebridge and other corporations controlled by Bradley and Becker, alleging that Bradley and Becker acted oppressively and denied the Plaintiff access to the opportunities to which he was entitled as a shareholder of Stonebridge, and seeking relief under the Business Corporations Act , R.S.A. 2000, c.

B-9 (the “ Oppression Application ” ). [ 4 ] In the Oppression Application, the Plaintiff sought relief designed to result in an accounting to Stonebridge of business opportunities misappropriated by Bradley and Becker or companies controlled by them.

Those opportunities included a real estate development project known as River Run at Crowsnest Lake, in the Municipality of Crowsnest Pass, Alberta (the “ River Run Project ” ). [ 5 ] The Defendant Zinner was legal counsel to Bradley, Becker and other Respondents for purposes of the Oppression Application. [ 6 ] At all material times hereto, Zinner also was the sole shareholder and the directing and guiding mind of each of the Defendants 1476613 Alberta Ltd., 1474359 Alberta Ltd., 1474353 Alberta Ltd., 1473484 Alberta Ltd., 1474338 Alberta Ltd., 1473207 Alberta Ltd., 1474368 Alberta Ltd. and 1473898 Alberta Ltd. (collectively "Zinner's Numbered Companies"). [ 7 ] The Oppression Application was argued before me on November 12 and 13, 2008.

On October 30, 2009, I rendered a decision in the Oppression Application in favour of the Plaintiff. [ 8 ] In the Oppression Application, the Defendants River Run Corporation, River Run Plaza Corporation, River Run Resort Corporation, River Run Springs Corporation, River Run Terraces Corporation, River Run Lakes Corporation, River Run Vistas Corporation, River Run Management Ltd. and Mountain Escapes Corporation (collectively the “ River Run Corporations ” ) were the owners of some 289 development lots situated in the Municipality of Crowsnest Pass (the “ Lands ” ).

The Lands were intended for the River Run Project and were included within the scope of the Oppression Application.

At all material times hereto, Bradley was the sole director of each of the River Run Corporations with the exception of River Run Management Inc., whose directors were Bradley and Zinner. [ 9 ] On or about June 18, 2009, which was after the hearing of the Oppression Application but before the decision was rendered, Zinner and Bradley entered into a master agreement pursuant to which, inter alia, the Lands were transferred from the River Run Corporations to Zinner ’ s Numbered Companies for nominal consideration.

This was done despite a direction by the Court during the hearing of the Oppression Application that the lands should not be transferred pending the release of the decision. [ 10 ] The transfers of lands (collectively referred to herein as the “ River Run Transfers ” ) was effected at least in part to satisfy debts allegedly due and owing to Zinner, including for the provision of legal services to Bradley, Becker and other respondents to the Oppression Application. [ 11 ] On August 30, 2010 the Plaintiff obtained the following relief in this action: (

a) a declaration that the River Run Transfers are void; and (

b) an Order directing the Registrar of the Land Titles Office to issue new titles to the Lands in the names of the original transferor River Run Corporations. [ 12 ] On October 8, 2010 the Plaintiff sought and received the following relief in this action:

(

a) a declaration that the transfer of the sales centre for the River Run Project from River Run Corporation to 1474368 Alberta Ltd. isvoid; and (

b) an Order directing the Registrar of the Land Titles Office to issue a new title to the lands upon which the sales centre is located in thename of River Run Corporation. [13] On November 25, 2010, which was after the foregoing Orders were obtained, but before new titles to the Lands were issuedin the names of the original transferor, River Run Corporations, Bradley and Becker declared bankruptcy.

The Plaintiff’s claims againstBecker and Bradley as creditors were thus prejudiced and defeated. [14] On November 26, 2010 the Plaintiff obtained an Order clarifying the relief granted in the August 30, 2010 Order and theOctober 8, 2010 Order.

The effect of this Order was to direct the Registrar of the Land Titles Office to cancel the existing certificates oftitle and to issue new titles to the lands as directed by the Court. [15] The Plaintiff has incurred significant legal costs and disbursements in obtaining the Orders and in reversing the River RunTransfers. [16] In discussing indemnification through costs, Hutchinson, J., in Jackson v. Trimac Industries Ltd. (1993), (AB KB), 138 A.R. 161 (Q.B.); varied on other grounds (1994), 1994 ABCA 199 , 155 A.R. 42 (C.A.), at para. 28, stated: ...

In order for costs to be awarded on an indemnity basis or even on a solicitor-client basis, as opposed to a party-party basis, the courtmust conclude that the case fits within the parameters of a rare and exceptional or unusual case. Examples [...] resulting in theidentification of a rare and exceptional case include ... 2. cases in which justice can only be done by a complete indemnification for costs (Foulis v. Robinson); ... 6. defendants found to be acting fraudulently and in breach of trust (David v.

David); ... 8. fraudulent conduct (Sturrock); [17] As counsel for the Respondents to the Oppression Application, Zinner knew or ought to have known that transferring thelands could have the effect of defeating, prejudicing, hindering or delaying the interests of the Plaintiff as a creditor of Becker, Bradleyand River Run Corporations. [18] Zinner is a long-time practicing member of the Law Society of Alberta.

In that role, he was, and is, obligated to comply withthe standards of conduct prescribed by the Law Society of Alberta Code of Professional Conduct in regards to his dealings with thepublic and the legal profession.

In the course of acting for the Respondents in the Oppression Application, Zinner effected transfer of thelands to Zinner’s Numbered Companies for nominal consideration. [19] The solicitor-client bill of costs represents the legal costs and disbursements incurred to issue new titles to the lands in thename of the original transferor River Run Corporations. [20] Zinner did not appear personally on this Application but was represented by counsel who advised the Court that his clientwas not taking exception to his responsibilities for the costs incurred in the re-transfer of the property but did take issue with thecalculation of costs on a solicitor-client full indemnity basis and argued the more appropriate measure of costs would be simply taxablecosts.

[ 21 ] The Defendant Zinner has filed a very short affidavit with the Court in which he states that the relief sought is not being opposed; no Statement of Defence has been filed; on his instructions, his solicitor endorsed a Consent Order pursuant to the terms of which titles to the subject lots were restored as sought by the Plaintiff without any cost or delay to the Plaintiff.

His application goes on to state that he is unaware of any misconduct on his part; he did nothing to hinder, delay or confuse the litigation in the action; and did nothing to prolong the proceedings, sought no unnecessary adjournments, did not conceal any documents from the Plaintiff, and, in the result, the Plaintiff was not justified in having resorted to extensive legal proceedings to obtain the re-transfer of the titles. [ 22 ] The solicitor-client bill of cost is carefully prepared and meticulously detailed.

It sets forth the legal steps that were taken and the costs thereof, and all expenditures incurred by the Plaintiff in having the lands re-transferred. The total amount claimed, including all fees, disbursements and other charges and GST is $50,207.54. [ 23 ] I have been involved in the trial of the matter and in all of the subsequent applications and believe that this is a situation where I am at liberty to tax the bill of costs rather than referring it to a taxing master.

The bill of costs on a solicitor-client full reimbursement basis is taxed as presented. [ 24 ] In the result, the Plaintiff is entitled to an award of his solicitor-client costs against Mr. Zinner in the sum of $50,207.54, payable forthwith and in any event of the cause. [ 25 ] Counsel for the Plaintiff have been successful in their application for costs against Mr. Zinner and are entitled to their costs with respect to this application. In the event that counsel are unable to agree with respect to the calculation of such costs, they are at liberty to make application before me to settle costs.

Heard on the 29 th day of June, 2011. Dated at the City of Calgary, Alberta this 5 th day of July, 2011. P.M. Clark J.C.Q.B.A. Appearances: Eugene J. Bodnar Macleod Dixon LLP for the Applicant Christopher M.A. Souster for the Respondant Gabor Zinner