Fairways Project Ltd. v. Melander, 2011 ABQB 6

Court of Queen ’ s Bench of Alberta Citation: Fairways Project Ltd. v. Melander, 2011 ABQB 6 Date: 20110211 Docket: 0012 00705 Registry: Wetaskiwin Between: Fairways Project Ltd. Plaintiff/Applicant - and - Clarence Sigurd Melander Defendant/Respondent Corrected judgment: A corrigendum was issued on February 16, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Background [ 1 ] These applications arise in connection with an action for alleged breach of a contract for the sale of a 43.24 acre parcel of raw land (the “Land”) between the Plaintiff as purchaser and the Defendant as vendor. The Land is located in close proximity to Pigeon

Lake and Wetaskiwin, where the Plaintiff’s business is located. Under the contract the purchase price was $52,500.00 and the sale was toclose July 31, 2000. In 2006 the Defendant transferred title to the Land to himself and his son, Steven Sigurd Melander, as joint tenants.The Defendant died recently. The current estimated “as-is” value of the Land is $292,000.00. [2] The first application is for

summary dismissal of the Plaintiff’s claim for specific performance. Due to the Defendant’sdeath, the applicant is the Estate of Clarence Sigurd Melander (the “Estate”), which now takes the place of the Defendant, although thepleadings have not yet been amended to reflect this. The Estate argues that it is plain and obvious that the specific performance claimwill not succeed. The Plaintiff responds that the claim for specific performance raises a genuine triable issue. [3] The Plaintiff has brought the second application. In this cross-application, it seeks three orders:

a) an order requiring the Estate to post security for costs;

b) an order adding Steven Sigurd Melander (who is the Executor of the Estate and the current owner of the Land), as a Defendant;and

c) an order directing that the action be entered for trial. Issues Position of the Estate/Defendant [4] The Estate argues that, since the Plaintiff has admitted to being a developer that is seeking to purchase the Land for thepurposes of investment and/or development, the claim for specific performance cannot succeed. The law regarding specific performanceof contracts of sale of land has been significantly altered by the Supreme Court’s decision in Semelhago v. Paramadevan, (SCC), [1996] 2 S.C.R. 415. In addition to Semelhago and other cases, the Estate relies on 410675 Alberta Ltd. v.

Trail SouthDevelopments Inc., 2001 ABCA 274, 293 A.R. 181, 1244034 Alberta Ltd. v. Walton International Group Inc., 2007 ABCA 372, 422A.R. 189, and 365733 Alberta Ltd. v. Tiberio, 2008 ABCA 341, 440 A.R. 177, for the proposition that amenities and location are only ofinterest to a developer insofar as additional profits may be generated by those qualities.

The Estate submits that a developer is notinterested in the land due to any inherent uniqueness, and that any additional value in the land attributable to its amenities and locationcan be compensated by way of damages. [5] In addition, the Estate has provided a copy of a real estate listing for a 41.9 acre parcel (on which there is located aresidential building) that is adjacent to the Land and which, at the time of the listing in August, 2010, was being offered for sale at$1,250,000.00.

The Estate argues that this parcel is comparable to the Land and the listing is evidence that the Land is not unique andthat substitute land is available in the immediate area. [6] In reply to the Plaintiff’s application for security for costs, the Estate submits that the market value of the Land would bemore than sufficient to cover any cost award.

Further, the Estate suggests that the Plaintiff has delayed its application for security forcosts, causing the Estate to be lulled into a false belief that the Defendant could proceed without being called upon to provide security.As a result, the application for security for costs should fail (per United Paint & Coating Canada Ltd. v. St. Laurent (1980), (AB KB), 13 Alta. L.R. (2d) 134, [1980] A.J. No. 54 (Q.B.)). [7] The Estate concedes that the request to add Steven Melander is appropriate, with the qualification that claims against himshould be restricted to those remedies that relate to specific performance.

The Estate also has no difficulty setting the matter down fortrial, provided that Steven Melander is not added as a defendant. However, if Steven Melander is added as a defendant, both the Estateand the Plaintiff acknowledge that there may be a need for further discovery / questioning. Position of the Plaintiff

[8] In response to the application for

summary dismissal relating to the specific performance claim, the Plaintiff argues that theproperty is unique and that specific performance is warranted. It further argues that no suitable alternative lands are available and thatevidence has been introduced that demonstrates the uniqueness of the Land. The Plaintiff disagrees with the Estate’s submission that thelisted property referred to by the Estate supports the proposition that the Land is not unique and that there are alternative lands availablein the immediate area.

It argues, to the contrary, that the listed property was listed at almost $1,000,000.00 more than the current valueof the Land and has an improvement on it. It argues that the Land is unique, being a medium sized, undeveloped parcel, which it has anagreement to purchase for substantially less than its current market value or that of the listing. [9] In addition, the Plaintiff argues that the Land is also unique by virtue of its particular location. There are no otherundeveloped parcels of similar size located in close proximity to Pigeon Lake.

The specific location is an important factor to the Plaintiffin light of its own location and its plan to use contractors who are located in that particular area. [10] The Plaintiff cites Strategy Summit Ltd. v.

Remington Development Corp., 2009 ABCA 30, 446 A.R. 312, and Covlin v.Minhas, 2009 ABQB 42, 468 A.R. 301, for the proposition that the remedy of specific performance is available in a commercial contextsuch as this. [11] The Plaintiff further argues that, if its claim for specific performance is summarily dismissed, its encumbrances on title willaccordingly be discharged, allowing the Estate to dispose of the Land to a third party. The Defendant was a non-resident of Canada, hisExecutor is also a non-resident of Canada and, as far as the Plaintiff is aware, the Land is the Estate’s sole Canadian asset.

The Plaintifftherefore argues that dismissal of its claim for specific performance will likely result in its inability to collect any damage award if it isultimately successful in its action. This, it argues, is a further reason why

summary dismissal is inappropriate in these circumstances, asdamages would not be an adequate remedy (per Walton International). Analysis A. Application for

Summary Dismissal [12] Murphy Oil Co. v. Predator Corp., 2006 ABCA 69, 384 A.R. 251, was related to anti-competition claims made in the contextof the natural gas industry. Both parties were corporations actively engaged in business. Predator was the defendant and plaintiff bycounterclaim in the main action. It appealed an order of a chamber’s judge that summarily dismissed the bulk of its counterclaim. TheAlberta Court of Appeal articulated the appropriate test for

summary judgment: [24]

Summary judgment against a plaintiff, or a plaintiff by counterclaim, will only be granted where there is no genuine issue for trial. Itmust be “plain and obvious” that the action cannot succeed ... [25] The analysis of a

summary judgment application is performed in two stages. In the first, the moving party must adduce evidence toshow that there is no genuine issue for trial. Once the moving party has met that burden, the responding party may adduce evidence topersuade the court that there remains a genuine issue to be tried. It may choose to adduce no evidence, but then bears the risk that thejudge will decide that the evidence adduced by the moving party has established that there is no genuine issue to be tried... This has been widely cited as the leading test for

summary dismissal in Alberta. In the result, Predator’s appeal was dismissed. ThePlaintiff and the Estate acknowledge the applicability of this test. [13] In McNabb v. Smith (1981), (BC SC), 30 B.C.L.R. 37, [1981] B.C.J. No. 1833 (S.C.), relied on by theEstate, an individual plaintiff purchased a residential property with the intention of selling it for profit.

The British Columbia SupremeCourt held that “courts of equity do not enforce contractual obligations by way of specific performance unless the common law remedyof damages is inadequate.” In the result, the Court decided that the appropriate remedy was damages, and declined to grant specificperformance. McNabb was decided in another jurisdiction, pre-Semelhago, and involved a non-corporate purchaser.

I consider that it haslittle precedential value in the context of this case. [14] Prior to Semelhago, specific performance was granted as a matter of course in breaches of contracts for the sale of land.Semelhago represented a major shift in the law of specific performance claims. The common law used to regard all land as unique;Semelhago introduced a “uniqueness” test to determine if specific performance was the appropriate remedy.

[ 15 ] In Semelhago , a plaintiff commenced an action due to a breach of a contract for sale of a residential property. The plaintiff pursued an action for both specific performance and damages. At trial, the plaintiff elected to take damages and was awarded $120,000.00. The defendant appealed, arguing that the sum represented a windfall to the plaintiff. Eventually, the matter was appealed to the Supreme Court of Canada for determination. The majority dismissed the appeal and upheld the courts below, affirming the damages as assessed at trial.

In arriving at its decision, the majority commented: 22 Courts have tended, however, to simply treat all real estate as being unique and to decree specific performance unless there was some other reason for refusing equitable relief. ... Some courts, however, have begun to question the assumption that damages will afford an inadequate remedy for breach of contract for the purchase of land. ... Specific performance should, therefore, not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available...

These comments have been widely cited in Alberta and across Canada, and accurately represent the current state of the law. [ 16 ] In 410675 Alberta Ltd. v. Trail South , 410675 purchased an unsubdivided parcel of land from Trail South. Trail South successfully applied for

summary dismissal of the claim for specific performance, which had the effect of discharging 410675's caveats on the land. Earlier in the litigation, Trail South had unsuccessfully applied under the Land Titles Act , R.S.A. 1980, c. L-5, s.139, to discharge the caveats from the title. Of the issues before the Court of Appeal, one was whether the court below erred in finding that the remedy of specific performance was unavailable. With respect to this issue, the purchaser argued that specific performance was necessary because, if it was not granted, it would suffer a loss of market share and reputation.

The Court of Appeal dismissed this argument because there was no prima facie evidence to support this contention. The Court of Appeal also briefly dealt with the purchaser's argument that specific performance should be granted because the land was the vendor’s only asset, and that a failure to grant specific performance would produce “irreparable harm”.

The Court dismissed this argument, finding that “none of the authorities cited ... support the proposition that a plaintiff’s potential inability to collect damages from a defendant is an adequate basis for specific performance.” The Court went on to hold that such an argument confused the remedy of specific performance with interlocutory injunctive relief and pre-judgment execution. [ 17 ] In 1244034 v. Walton , Walton was a corporation in the business of purchasing and selling land. The purchaser, 1244034, had putatively contracted to purchase a property owned by Walton.

Walton represented to 1244034 that it was in a position to convey title to the property. However, this representation was made in error, as the Walton shareholders held a right of first refusal. A third party chose to exercise his right of first refusal. 1244034 then commenced an action founded upon the breach of a contract of sale of land. In the court below, Walton successfully applied to have 1244034's caveat discharged. The order was granted without written reasons. On appeal, the Court was split.

The majority upheld the decision of the chambers judge, finding that it is “settled law” in Alberta that if damages are proven to be an “adequate remedy”, there is no longer a valid interest in the subject land “capable of protection by caveat”. The Court cited Professor LaForest in Anger and Honsberger, Law of Real Property , 3rd ed. looseleaf, (Aurora: Canada Law Book, 2007) with approval: What is emerging is a ‘business rationale’ test for which the (subjective) business case for desiring the particular commercial property is examined through a due diligence (objective) appraisal by the court.

Thus, the court will examine the nexus between the plaintiff’s business plan and the amenities of the subject property. Specific performance may be granted if those amenities cannot readily be found elsewhere . [Emphasis added] The majority found that there was no valid basis to hold up the development of the land pending the outcome of the litigation. [ 18 ] Slatter J.A. dissented on the basis that discharging the caveat on the land was premature.

At para. 33, he found that specific performance is a “discretionary remedy” and all that can be said in the early stages of the proceedings is that “the purchaser has no absolute right to that remedy.” He found conflicting evidence on the record, and therefore a prima facie triable issue, as to whether there was a “substitute” property available in the area. [ 19 ] The Plaintiff cites 365733 v. Tiberio , 2008 ABCA 341 , 440 A.R. 177 , for the proposition that “uniqueness” in the context of a commercial real estate transaction can be reflected in the sale price or the profit from the investment.

In Tiberio , the subject property

was an undeveloped parcel of land in Calgary. The chambers judge found that the lands were being acquired for the purpose of sale and profit. Therefore, she determined that the lands were not unique within the meaning referred to in Semelhago , and directed a discharge of the caveat. She noted that a finding of uniqueness is tied to the claimant; that is, uniqueness is to be assessed subjectively. The issue on appeal was whether the lands were unique and therefore subject to a claim for specific performance. Relying on Walton , Semelhago , and Trail South , the Court of Appeal dismissed the appeal.

The Court made similar comments to those made in Walton , and reiterated that it is “very difficult for a purchaser to meet the onus of showing uniqueness when lands are obtained only for investment purposes.” [ 20 ] The Plaintiff relies on Bowlen Holding Ltd. v. R.A. Bradburn Enterprises Inc. (1991), 126 A.R. 22 , [1991] A.J. No. 10004 (Q.B.) , for the general principle that a court should consider a defendant’s ability to pay when determining the adequacy of damages as compensation.

It argues this point by analogy, as Bowlen was a case that concerned an application to remove an interlocutory injunction as between members of a partnership. In Bowlen , the Court had to weigh an equitable remedy as an alternative to damages. The Court dismissed the application, upholding the injunction, because the defendants failed to demonstrate that they would be able to compensate the plaintiffs in the absence of the injunction. [ 21 ] Strategy Summit v. Remington was an appeal from the

summary dismissal of a claim for specific performance related to a contract of sale of land. The chambers judge, upholding the decision of the master in chambers, found that the land was being held for strictly business purposes. Pursuant to Walton and Tiberio , the chambers judge concluded that the remedy of specific performance was therefore unavailable. The Court of Appeal overturned the decision of the chambers judge, holding that there were a number of factual inconsistencies that would need to be resolved at trial.

The evidence put forward in the chambers application did not “fail to establish a workable argument that the property was unique”. The record showed some evidence that the property was to be used in a way that went beyond “a business opportunity”, and that the property was not necessarily intended “strictly for resale or development ... or investment purposes”.

The Court of Appeal distinguished this case from Walton on the basis that the appellant had offered evidence that “the specific project had a variety of characteristics making it unique.” The appeal was therefore granted, and the matter was returned to the Court of Queen’s Bench. [ 22 ] In Covlin v. Minhas , the plaintiff would-be purchaser owned six adjacent parcels of land near the University of Alberta. If she was able to acquire the subject land as her seventh parcel, it would have allowed her to pursue a large development project in the future.

When considered in the context of her other six lots, the additional seventh lot created a “commercially unique opportunity”. At trial, Lutz J. relied on Semelhago and Walton for the proposition that the relevant inquiry is whether the property is “unique” and whether damages are the appropriate remedy. He concluded that the fact that a property was acquired for investment purposes will not necessarily foreclose the possibility of specific performance. In the result, he awarded the plaintiff the remedy of specific performance.

On appeal, Costigan J.A. wrote for a unanimous Court and upheld the decision of the trial judge. The Court found that the relevant inquiry was not whether the long-term development plan would eventually materialize, but whether a substitute property was readily available. The trial judge had found as a matter of fact that there was no substitute property, and the Court of Appeal did not disturb this finding. [ 23 ] In Nisheru Enterprises Ltd. v. Friendly Auto Body & Repair Ltd. , 2010 ABQB 8 , the plaintiff vendor sued the defendant purchaser for failure to complete a real estate transaction.

The plaintiff sought damages, and alleged that there was nothing special or unique about the lands that would justify the remedy of specific performance. The defendant denied that it was looking to resell the land for profit, and instead submitted that it intended to use the space for business purposes. The issue before Master Laycock was whether the remedy of specific performance was available. He held that the purchaser bore the onus to prove the uniqueness of the land, and that damages would not be an adequate remedy.

However, in the result, he found that there was some evidence that supported the defendant’s claim for uniqueness, and therefore held that there remained a bona fide issue for trial. [ 24 ] The recent case of Amnor Ltd. v. 923862 Alberta Ltd. , 2010 ABQB 236 , 29 Alta. L.R. (5 th ) 57, dealt with an application for

summary dismissal of a claim for specific performance of a contract of sale for land. Graesser J. dismissed the application, finding that there was an arguable issue for trial. In Amnor the would-be purchaser was a developer who had contracted to purchase an unsubdivided parcel of land. Eventually, the land was to be developed into two industrial warehouse condominiums, which would either be sold, leased out, or used for Amnor’s business needs. Graesser J. dealt with the issue of which party bears the onus in the context of an application for the

summary dismissal of a specific performance claim. He found that the initial onus is on the vendor to show that it has a strong prima facie defense to the specific performance claim. The onus then shifts to the purchaser to demonstrate, on a balance of probabilities, that there is a genuine issue to be tried, and that it has a real chance of success. He held that an admission that the property was purchased for investment purposes, in light of the approaches mandated by Walton and Senelhago , was adequate to meet the vendor’s initial prima facie burden.

Graesser J. then proceeded to an analysis of whether the purchaser had a reasonable chance of success. At the time of the contractual breach, the purchaser’s intentions for the land remained unclear. Justice Graesser noted that it was a live issue as to whether “uniqueness” should be assessed at the time of the breach or at the time of the formation of the contract. However, he held that the issue did not need to be resolved on that application, since he was sufficiently convinced there was a real issue to be tried and that the purchaser had a reasonable chance of success.

Accordingly, he dismissed the application.

[ 25 ] In the case before me, for the Defendant’s application for

summary dismissal to succeed I must be convinced that there is no genuine issue for trial and that the Plaintiff’s action for specific performance cannot succeed. Given the nature of the Plaintiff’s claim, in this case I am not satisfied that the Applicant Estate has met its onus. Since Semelhago , there is no longer an assumption that all land is inherently unique. Establishment of the uniqueness (or otherwise) of the Land will be largely determinative of the success of the Plaintiff’s specific performance action. The success of the Defendant’s application for

summary dismissal of that claim depends on my being convinced that it is not unique, that there is substitute land available, or that damages would provide an adequate remedy. [ 26 ] The Defendant Estate has understandably relied on those cases which suggest that developers who acquire lands for the purpose of investment, resale, and/or development, may have a difficult time establishing the uniqueness of the parcel or overcoming the argument that their loss of profits cannot be adequately compensated by way of a damage award.

However, while the authorities relied on do indicate that such a purchaser may find it difficult to meet the onus of showing uniqueness, they also show that in many cases commercial purchasers / developers have been able to do so. [ 27 ] I am satisfied that this case is similar to Nisheru , Amnor , and Strategy Summit , in that there is significant disagreement regarding the availability of comparable substitute lands.

In this case there is not only the obvious lack of comparable land available for sale in the Pigeon Lake area, the importance to the Plaintiff of using contractors and workers in close proximity to both its business location and the Land strengthens the argument that the Land is unique. I am satisfied that the competing evidentiary claims regarding the uniqueness of the Land make this case unsuitable for

summary dismissal. The issue of uniqueness of the Land is a genuine issue to be tried and therefore the application ought not to be granted. [ 28 ] Although the Plaintiff also argued that damages would be an inadequate remedy in light of the non-residency of the Defendant and potential new defendant, as well as the unavailability of any assets other than the Land in Alberta, this same argument was rejected by the Alberta Court of Appeal in 410675 v. Trail South . In any event, given my finding in relation to the issue of uniqueness, it is unnecessary for me to consider this argument further. B.

Security for Costs [ 29 ] Rule 4.22 provides broad discretion to the Court in deciding whether to award security for costs. [ 30 ] In United Paint there were several individual plaintiffs as well as a corporate plaintiff. Several issues were raised in the application for security of costs, including: whether the plaintiffs were nominal plaintiffs; whether the main action was frivolous and vexatious; and whether the insolvent plaintiff corporation possessed sufficient property to post the required security. Master Funduk noted that the granting of a costs order under Rule 593 was a matter of judicial discretion.

He held that an application for security for costs must be made “reasonably promptly” and a failure to do so may disallow a claim for security. However, in order for the doctrine of delay to apply, there must have been “some indication that the delay has had the effect of leading the plaintiff into a false sense of security.” In the result, Master Funduk allowed the application in a very limited respect. He granted the application only in respect of the $15,000.00 claim that the corporate plaintiff alone had advanced, which meant that the corporate plaintiff had to advance only $300.00 as security for costs.

The individual plaintiffs were not required to post security for costs. [ 31 ] A chamber’s decision in Walton , 2007 ABQB 197 , not cited by the Plaintiff, addresses the issue of security for costs. In that decision, Sanderman J. held that it was appropriate to make an order requiring the plaintiff to post security for costs: [8] Security for costs should be ordered. Walton meets the test of having submitted a reasonably arguable defence to 124's Statement of Claim. The materials that have been filed in this matter inescapably lead to this conclusion.

The Plaintiff has no readily exigible assets in this jurisdiction that could cover any costs award. 124 was incorporated solely to purchase the lands from Walton. Its sole shareholder, a resident of the province of British Columbia, has a limited connection to Alberta and an extremely limited asset base in this province . The real question in relation to security for costs is how much.

If insolvent plaintiffs should not be given risk-free opportunities to pursue litigation; conversely, defendants should not be able to tactically prevent a prosecution of a valid claim by obtaining a prohibitive security for costs order. The Court has to balance these competing interests. A costs order should not have a chilling effect in relation to the ardour with which a valid claim is advanced. It should impose a fair obligation on the plaintiff that would check litigation without merit. This is the balance that must be struck.

[Emphasis added] The comments by Sanderman J. were made in the context of a defendant seeking security for costs from a plaintiff and were not at issuein the appeal; but they nonetheless have some application in this case. [32] The Plaintiff relies on Bre-X Minerals Ltd. (Trustee of) v. Walsh, (2002), (AB KB), 333 A.R. 223, 2002Carswell Alta. 1893 (Q.B.), for the proposition that security for costs may be awarded against a defendant. In Bre-X, the defendantWalsh had no record of assets located within Alberta. Under the circumstances, the Master looked at the listed reasons under Rule593(1)(

a) to (

i) to determine if it was just and reasonable in the circumstances to grant an order for security for costs and noted that thematter is one of general discretion, and is not confined to “certain pigeonholes”. Master Laycock ultimately ordered the defendant to pay$9,000.00 into Court as security for costs. [33] Western Canadian Shopping Centres Inc. v. Dutton, 2003 ABQB 376, 338 A.R. 124, concerned an application for securityfor costs under Rule 594.

In this lengthy and complex case involving multiple plaintiffs and defendants, Belzil J. dealt with four separateapplications for security for costs in his capacity as a case management judge. Beginning at para. 29 of his decision, he enunciatedgeneral rules that apply to an application for security for costs. He noted that such an order “involves a balancing of interests” and thatthe purpose of a security for costs order is to ensure that parties do not “gamble” with litigation while they are exposed to relatively littlerisk. Belzil, J. quoted Crothers v. Simpson Sears Ltd. (1988), 1988 ABCA 155 , 59 Alta.

L.R. (2d) 1 (C.A.), at pp. 18 and 19: Security for costs is designed to protect a defendant from a plaintiff who wants to gamble and collect if he wins, but not pay if he loses.Indeed, such a plaintiff acts more unfairly than that, for by his groundless suit he inflicts serious expenses on the defendant.

Belzil J. held that there was no evidence suggesting that the plaintiffs were “lulled into a false sense of security ... the plaintiffs cannotrealistically be surprised that these applications are being made.” In the result, he ordered the plaintiffs to post $300,000.00 as securityfor costs. [34] In relation to applications for security for costs by any party, there is judicial discretion to make such orders where it isnecessary to do justice between the parties.

In the application before me, all of the Estate’s representations concerning its ability tosatisfy any judgment obtained by the Plaintiff referred only to the Land. No information was provided concerning the Estate’s ability tosatisfy a judgment or costs award should the Plaintiff be successful.

There is no evidence that the Estate has any assets other than theLand and, if it does, any such assets are not only likely to be outside of Alberta but are also likely to be outside of Canada. [35] It is clear that, if the Plaintiff is successful and obtains either a judgment for specific performance or a damage award in lieuthereof, the value of the Land will not be sufficient to satisfy both.

Moreover, if the Plaintiff obtains judgment for specific performance,there will be nothing left to satisfy any costs award. [36] This application concentrated on the issue of uniqueness of the Land and the availability of specific performance. The partiesdid not address the merits of whether or not the agreement of purchase and sale is likely to be found to be enforceable. I am not in aposition to assess the strength of the case of either the Plaintiff or Defendant in relation to that issue.

Nor am I able to determine whetheran order for security for costs against the Defendant Estate would unduly prejudice its ability to continue to defend the action, since noinformation was provided by the Defendant Estate regarding its financial strength. [37] Although the Plaintiff did not seek security for costs for a considerable period of time, it cannot be a surprise to theDefendant Estate that the Plaintiff would be seeking it at this juncture. The matter has dragged on for many years without resolution. Thedeath of Mr.

Melander and the prospect of further delays as a result of his death will undoubtedly result in increasing costs.

The Estatehas no assets in Alberta other than the Land and, as I concluded above, its value is not sufficient to satisfy either a damages award (if thePlaintiff obtains one at trial) or costs (if the Plaintiff obtains an order for specific performance). [38] Therefore, on the basis of the information available, which does not provide any reason not to order security for costs againstthe Defendant but provides compelling reasons why such an award ought to be granted to enable enforcement of any costs awardobtained by the Plaintiff, an order for security for costs is appropriate in this case.

[ 39 ] The Plaintiff has been seeking to set the matter for trial for some time and in its Certificate of Readiness indicated that it believed its case would take two days. The Defendant appears not to have provided its estimate of the time it believes will be required for its case. [ 40 ] Therefore, having regard to the likely time required for trial, the costs likely to be incurred in preparing for and attending at it, and the amount in dispute, the appropriate amount of security is $15,000.00. C.

Application to Add a Defendant [ 41 ] There is no suggestion that Steven Melander has any personal liability under the contract relied on by the Plaintiff. However, he is an appropriate party to be added to the action in light of his ownership of the Land and the effect of any specific performance judgment on that ownership interest. I am satisfied the order should be made and no prejudice will result which cannot be remedied by costs, adjournment or terms: Rule 3.74(2)(b), (3). D.

Application to Enter the Action for Trial [ 42 ] Although the Plaintiff has requested an order to enter the action for trial, both the Plaintiff and the Defendant have conceded that adding Mr. Steven Melander as a defendant, even in a limited capacity, may necessitate further examinations for discovery / questioning. Accordingly, I decline to order the entering of the action for trial until the parties assess their further requirements and determine whether the matter is now still ready to proceed to trial. Conclusion [ 43 ] In the result:

a) the Defendant’s application for

summary dismissal of the Plaintiff’s claim for specific performance is dismissed;

b) the Defendant is ordered to post security for costs in the amount of $15,000.00 within 2 months of the date of this Judgment;

c) Steven Sigurd Melander is added as a defendant in the action; and

d) the Plaintiff’s application for an order directing that the action be entered for trial is premature and is therefore dismissed. Heard on the 10th day of September, 2010. Dated at the City of Edmonton, Alberta this 11 th day of February, 2011. D.L. Shelley J.C.Q.B.A.

Appearances: M.D. Klause, Q.C. McDonald Street Law Office for the Plaintiff G.A. Yake Warren Sinclair LLP for the Defendant _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Madam Justice D.L. Shelley _______________________________________________________ The year in the citation line has been corrected to read: Fairways Project Ltd. v. Melander, 2011 ABQB 6 rather than the previous year of 2010.