MacKenas Estates Development Corporation v. Calgary (City), 2011 ABQB 636

Court of Queen ’ s Bench of Alberta Citation: MacKenas Estates Development Corporation v. Calgary (City), 2011 ABQB 636 Date: 20111019 Docket: 1101 05953 Registry: Calgary Between: MacKenas Estates Development Corporation Applicant - and - The City of Calgary and Rocky View County Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice G.C.

Hawco _______________________________________________________ [ 1 ] This is an application by MacKenas Estates Development Corporation (“MacKenas”) to compel Rocky View County to provide waste water services to that parcel of lands known as the MacKenas lands and to compel the City of Calgary to consent to Rocky View County extending waste water services to the MacKenas lands. Facts [ 2 ] The County owns and operates a sanitary sewer collection system, including pump-stations, located within the County (“the County system”).

Pursuant to an agreement made between the City of Calgary and the County on September 10, 1997, the City agreed to permit a county sanitary sewer trunk line extension and connection to the City’s existing sanitary sewer trunk line which terminated at approximately 59th Street SW in Calgary to facilitate the disposal and treatment of the sewerage received from certain defined areas

within the County by City-owned and operated sanitary treatment facilities (“the services”). [ 3 ] Pursuant to that agreement, the County’s system conveys raw waste water from lands located within the county to City- owned and operated sanitary sewer collection and treatment system for treatment and disposal. The County’s system is limited to conveying the waste water.

It does not provide waste treatment or disposal services. [ 4 ] Pursuant to the terms of the 1997 servicing agreement, the City and County agreed that the only lands which would receive servicing were those lands described in Schedules A and B to the agreement (the “service areas”). [ 5 ] The MacKenas lands are not located within the service areas currently defined within the 1997 servicing agreement. [ 6 ] Pursuant to paragraphs 5(

b) and 6(

a) of the 1997 servicing agreement, in order for any lands outside the service areas to be provided with services, the City must consent in writing and the 1997 servicing agreement must be amended to reflect that change. [ 7 ] The 1997 servicing agreement has been amended on two occasions with the consent of the City and the County to expand the service to areas. On July 7, 1999, the City and the County agreed to expand the service areas to include lands owned by Stonepines Inc.

On November 17, 1999, the City and County agreed to expand the service areas to include lands owned by the Glencoe Golf and Country Club. [ 8 ] The 1999 Stonepines agreement provides that Stonepines may from time to time transfer, convey or assign all or any of its rights and obligations under the Agreement with respect to all or any of the lands within the service areas, contemplated under the 1999 Stonepines agreement. [ 9 ] The MacKenas lands are not located within the service area as defined in the 1999 Stonepines agreement.

The MacKenas lands are located adjacent to the service area with all of the MacKenas lands located to the east of the western service areas boundary. [ 10 ] Pursuant to this Stonepine amending agreement, Stonepines was approved for and allocated servicing for 92 residential lots.

As of December 2008, Stonepines determined that it would only develop 72 of the 92 residential lots with the result that Stonepines had a 20-unit surplus servicing capacity. [ 11 ] In December 2008, the County was contacted by Stonepines and MacKenas lands with respect to approving the transfer of the 20-unit surplus servicing capacity from Stonepines to the MacKenas for use within the MacKenas Estates sub-division, which was approved by the County for a 21-residential lot development.

The County supported the transfer request from a technical servicing perspective because the transfer involved the transfer of 20 residential lots capacity of the original 132 residential lot capacity that the City agreed to provide servicing for via the 1997 servicing agreement. The total waste water capacity approved under the 1997 servicing agreement is not impacted by a transfer of the 20 residential lot allocation. On that basis, the County put the transfer request on the December 12, 2008 Inter-municipal Committee meeting agenda for discussion and direction.

The County also sent the City a formal letter dated December 19, 2008 setting out the rationale for the transfer request. [ 12 ] On January 22, 2009, the City responded to the County’s request advising that City Council approval would be required to approve the request. [ 13 ] At no point has the City given its approval to expand the service areas as defined in the 1997 Servicing Agreement to include the MacKenas lands. [ 14 ] On December 21, 2010, MacKenas’ solicitor sent correspondence to the County’s solicitor advising that MacKenas and Stonepines had entered into an assignment agreement with respect to the 20-unit servicing surplus and requesting that the County

consent to the assignment in accordance with the 1999 Stonepines Agreement. [ 15 ] On January 13, 2011, the County’s solicitor provided a response to the MacKenas’ solicitor on behalf of the County advising that while the County has historically supported and continues to support and endorse the concept of Stonepines transferring its 20-unit surplus servicing capacity to MacKenas, the County is unable to consent to the assignment unless the City provides its written agreement to amend the 1997 servicing agreement to include the MacKenas lands. [ 16 ] On March 31, 2011, the County sent a letter to the City advising of the December 2010 request to approve the assignment of the 20-unit surplus servicing capacity from Stonepines to the MacKenas and requesting that the City agree to amend the 1997 servicing agreement to include the MacKenas lands within the service area.

The County has not received a formal request to the March 2011 letter. However, it is clear, particularly as of the time of this application, that the City is not prepared to amend the 1997 servicing agreement. [ 17 ] According to Mr. Byron Riemann, the director of infrastructure and operations for the County, the MacKenas Estates 21-unit residential subdivision is currently approved by the County on the basis of sanitary sewer servicing being provided via individual private sewerage treatment systems.

The deferred servicing agreement between the County and the MacKenas requires MacKenas or its successors in title to tie into a Regional Services system when that Regional System is constructed within or adjacent to a development area of the MacKenas lands. [ 18 ] Mr.

Riemann goes on to state that as the City will not consent to provide servicing of the MacKenas lands, the County will not view any sanitary service lines which are constructed to facilitate servicing pursuant to the 1997 Servicing Agreement as constituting a Regional Service triggering the MacKenas’ obligations under the deferred servicing agreement. [ 19 ] In Mr. Riemann’s affidavit of August 12, 2011, he states that the sanitary sewer line constructed to service the Stonepines land is located approximately 300 metres to the north of the MacKenas lands at the intersection of RR31 and Lot Creek Drive.

There is no sanitary sewer line located along RR31 adjacent to the MacKenas lands. [ 20 ] MacKenas states that the service areas under the servicing agreement can be expanded but that the City has refused to agree such expansion. MacKenas says that Calgary has a policy that it will not extend services in municipalities which are not members of the Calgary Regional Partnership and that the County is not a member of the Partnership because of the dispute of the terms of a draft sub- regional plan created pursuant to the Alberta Land Stewardship Act , SA 2009, c A-26.8.

The MacKenas alleges that the argument between the City and the County is really a political argument and that the County’s non-membership in the partnership is not a reasonable reason for Calgary to withhold consent to extend the services to include the MacKenas lands. Issues [ 21 ] The Applicant argues that under Section 34(1) of the Municipal Government Act , RSA 2000, c M-26 (“MGA”) requires the County to provide the sewer services to MacKenas as the sewer system works of the County are adjacent to the MacKenas lands and the County is able to provide those services to MacKenas.

The City argues that the services are not adjacent to the MacKenas lands. The services come to Range Road 31 some 300 metres north of the MacKenas lands and that the municipality is therefore not obliged to provide those services to MacKenas. It argues further, that the County is not able to provide the services because the City refuses the permission for legitimate reasons. [ 22 ] The County agrees the system is not adjacent to the MacKenas lands and that it is not able to provide the services because of the City’s refusal, which it also says is a legitimate position for the City to take.

Decision [ 23 ] I find that the services are not adjacent to the MacKenas lands and that the County is not able to provide the services for valid and legitimate reasons. Reasoning [ 24 ] Secton 34 of the MGA requires a municipality to provide services to an owner if its utility services are adjacent to the owner’s

parcel and if it is able to do so. The Applicant must establish that the utility service adjacent to its land and must establish the municipality is able to do so. [ 25 ] The Applicants fail on both grounds. [ 26 ] The systems which the Applicant seeks to tie into are not adjacent to the Applicant’s lands. The system is 300 metres from the lands. The fact that Range Road 31, into which the systems comes, does proceed to and along the MacKenas lands, does not, in my respectful view, mean that the services are adjacent to those lands. In Landrex Developers Inc. v. St.

Albert (City of) , 2004 ABQB 732 , Justice Greckol considers Section 34(1) . In paragraph 17, she referred to the definition of “adjacent” from Black’s Law Dictionary, 4th ed. rev. (St. Paul, Minn.:West, 1968), as “lying near or close to; sometimes, contiguous; neighbouring”. It (Black’

s) defined “contiguous” as “in proximity; near, through not in contact ...”. In that case, the applicants were seeking to have that definition applied, as they do in this case. [ 27 ] At paragraph 42, Justice Greckol said this: Whether a municipality has a duty to provide services beyond its own jurisdiction cannot be determined by looking at the meaning of the word "adjacent" in isolation.

"Adjacent" in the context of s. 34(1) might be broadly interpreted to apply to works of the public utility that are either adjoining or near the parcel of land, or narrowly interpreted to apply only to works of the public utility that are on a parcel that adjoins or abuts the parcel for which services are sought. [ 28 ] At paragraph 46-47, she went on to say: 46 .

Rather, the legislative intent behind s. 34(1) was that the owner of a parcel of land may make a request to the municipality to provide services; and the municipality will only be obliged to do so if the system or works of the public utility are adjacent to the parcel in question. The system or works will be adjacent if installed on a parcel which abuts or adjoins that of the Applicant. The system or works may also be adjacent if it is near the parcel of land of the Applicant; for example, separated by a sidewalk or a public right of way. 47 .

Whether adjacency may be found to include more imposing barriers, such as rivers, streams and roadways, is a more complex question, but it will not automatically be so as it is defined to be in s. 653(4.4). The answer cannot be found in dictionary

definitions, but will be answered on a case by case basis, undoubtedly with evidence as to "when it [the municipality] is able to do so," another precondition to the duty imposed by s. 34(1). [ 29 ] In this case, the services are not “adjacent” in the sense of touching or even close, but the argument can be (and indeed has been) made that in all the circumstances it should be considered to be adjacent because the roadway is touching the lands in question and touching the services.

It is further argued that it ought not be a problem in this case because the Applicant has said it will pay to bring the services the 300 metres which separates the two so that they may be connected. [ 30 ] It is further argued that the “able” argument would allow the City to rely upon a political convenience and an irrelevant purpose as it involves a not particularly egregious argument between the County and the City. [ 31 ] Again, I must disagree. The dispute between the County and the City is very much a dispute, based on how one views overall land planning in the City and in the land adjoining its boundaries.

The County did not withdraw from membership from within the Calgary Regional Partnership because it was inconvenient or because of a politically motivated disagreement. There was what appears to have been a genuine difference of opinion as to the direction the City of Calgary was taking. Even if the County did request the City to allow the connection, the City certainly had no obligation to accede to the County’s request. The County did in fact make a request. The City refused to agree to the service being extended.

It refused to do so because it fundamentally differed on allowing low density neighbourhoods to impinge upon corridors which it had envisaged as high density areas. This dispute does not concern an irrelevant issue. It concerns a fundamental disagreement as to the direction that the City and the County will be taking in the future. [ 32 ] None of this could have come as any surprise to either the Applicant or the County as both were aware of the City’s overall strategies and planning.

[ 33 ] There is, indeed, another way in which the Applicant can look after the sanitary water requests and services of its homeowners. It could continue to do what it had originally planned to do knowing that it had no tie-in with the County or the City. It could install its own sanitary system. [ 34 ] I see no urgency in this situation. I see no irreparable harm if an order were not granted. I see no undue balance of convenience to the Applicant. [ 35 ] The application, therefore, is dismissed, with costs. Heard on the 1 st day of September, 2011.

Dated at the City of Calgary, Alberta this 19 th day of October, 2011. G.C. Hawco J.C.Q.B.A. Appearances: K. Hugh Ham Municipal Counsellors for the Applicant Deborah Dalton City of Calgary Law Department for the Respondent, City of Calgary Joanne M. Klauer Brownlee LLP for the Respondent, Rocky View County