Edmonton Flying Club v. Edmonton Regional Airports Authority, 2012 ABQB 563

Court of Queen ’ s Bench of Alberta Citation: Edmonton Flying Club v. Edmonton Regional Airports Authority, 2012 ABQB 563 Date: 20120914 Docket: 1103 11120, 0903 16530, 1003 00819, 1103 06357, 1103 12234, Registry: Edmonton Between: 1103 11120 Edmonton Flying Club and 1222663 Alberta Ltd. Plaintiffs - and - Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between: 0903 16530 Airco Aircraft Charters Ltd.

Plaintiff -and- Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between: 1003 00819 Edmonton Flying Club Plaintiff -and- Edmonton Regional Airports Authority and Edmonton Airports Inc. Defendants and Between: 1103 06357 Edmonton Flying Club Plaintiff - and - Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between:

1103 12234 Morningstar Air Express Inc., Morningstar Partners Ltd. and Morningstar Air Corporation Plaintiffs - and - Edmonton Regional Airports Authority, the City of Edmonton, Shell Canada Limited and Shell Canada OP Inc. Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] Although it originally signed a lease with the Edmonton Regional Airport Authority, the Edmonton Flying Club now effectively has a lease with the City of Edmonton entitling the Club to operate out of the Edmonton City Centre Airport until December 31, 2028. On July 8, 2009, the City of Edmonton announced its decision to commence a phased closure of the Edmonton City Centre Airport and has subsequently closed one of the airport ’ s two runways.

The Edmonton Flying Club launched legal proceedings against the City of Edmonton requesting, among other relief, an injunction to prevent the City from closing the airport and $18,000,000.00 in damages. [ 2 ] In this special chambers application, invoking R. 7.1(1) of the Rules of Court , the Edmonton Flying Club asks for a severance order, giving it leave to have the issue of its entitlement to a permanent injunction determined prior to the hearing of its claim for damages. [ 3 ] The Flying Club claims that the granting of severance would dispose of part of its claim: it is prepared to withdraw its claim for damages if it is found to be entitled to a permanent injunction.

It asserts that quantification of damages in contract and tort is a separate issue from the issue of entitlement to an injunction and that a saving of trial time and money for all parties could be effected without prejudice to any party if the entitlement to a permanent injunction were to be tried first. [ 4 ] The respondents reply that severing the entitlement to a permanent injunction from the liability for damages would be contrary to the aims set out in Rule 7.1 since the issues of permanent injunction and damages are not distinct but intertwined: the availability of damages is a factor to be weighed by a court which is considering whether it should grant injunctive relief. [ 5 ] The application for severance is granted: the applicants ’ claim for injunctive relief will be tried prior to any trial of the claim for damages.

As a collateral matter, the court directs that the Edmonton Flying Club is not required to produce documents or records relating to quantification of damages until after the issue of its entitlement to a permanent injunction has been determined.

[6] The Flying Club has established that one of the objectives of R. 7.1, there is a good probability, in the sense in which thatexpression is used in this context, that severance will dispose of part of a claim, two unique features of the application, the not-for-profitstructure of the applicant and the nature of the lease, have not been litigated in any similar proceedings and uniqueness is one basis forpreferring the equitable relief to the common law relief. Also, the Club has undertaken not to pursue its claim for damages if it issuccessful on its claim for injunctive relief.

In addition, the Club has also established that there is no overlap between the evidencerequired to try the claim for injunctive relief and the evidence required to try the claim for damages: in the circumstances of this case,where the principal claims of the Club are, on the one hand, that its organization make an award of damages inappropriate and, on theother, that the availability of the airport facility provided in the lease is unique, the evidence proposed for the disposition of the claim isstraightforward and can essentially be agreed.

Moreover, since the claim for damages in each of the three actions is individual to each ofthe three plaintiffs who are suing the City and the ERAA, and the two plaintiffs other than the Flying Club are not asking for injunctiverelief against the City and the ERAA, it is in everyone’s interest to deal separately, and at the outset, with the Flying Club’s claim forinjunctive relief.

Finally, the Club has established that benefits can be expected from the granting of severance: there will be aconsiderable saving of expense to all parties, which saving will coincidentally level the playing field between the Club and the defendantCity of Edmonton and the severance will not cause hardship to any party. [7] The respondents are not entitled to costs of the adjournment: an adjournment was granted so as to ensure that therespondents had a full opportunity of defending the application rather than because the applicants’ had mis-stated the nature of theirapplication in their written materials.

Cases and authority cited [8] By Edmonton Flying Club: Rule 7.1 of the Alberta Rules of Court; Gallant v. Farries, 2012 ABCA 98; EnvisionEdmonton Opportunity Society v. Edmonton (City), 2011 ABQB 29; Nowicki v. Price, 2011 ABQB 133; Esso Resources Canada Ltd.v. Stearns Catalytic Ltd., 1991 ABCA 48; 1244034 Alberta Ltd. v. Walton International Group Inc. 2007 ABCA 372, 2007CarswellAlta 1562, leave to appeal denied 2008 SCCA No. 43; Delta Hotels Ltd. v Okabe Canada Investments Co. (AB KB), 81 Alta.

L.R. (2d) 338, 1991 CarswellAlta 126 (Q.B.). [9] By Edmonton Airports Authority and Edmonton Airports Inc.: Potash Corp. of Saskatchewan Mining Ltd. v.Allendale Mutual Insurance Co., (1989), (SK CA), 80 Sask. R. 184; Saskatchewan Trust Co. (Liquidator of) v. Coopers & Lybrand, 2001 SKQB 6; Air Canada v. WestJet Airlines Ltd. (2005), 20 C.P.C. (6th) 141 (Ont. SCJ); Elcano AcceptanceLtd. v. Richmond, Richmond, Stambler & Mills, (1986), 16 O.A.C. 69; John D. Stevens Insurance Ltd. v. Mullin, 151 N.B.R., (1994) (2d); Evergreen Building Ltd. v.

IBI Leaseholds Ltd. (2005), 38 R.P.R (4th) 179 (B.C.C.A.); Moore, Marguerite, Damages and Specific Performance: A Tale of Two Remedies, (2011), 2. R.P.R. (5th) 175; Airco Aircraft Charters Ltd. v. Edmonton Regional AirportsAuthority, 2010 ABCA 364; 369413 Alberta Ltd. v. Pocklington, 2000 ABCA 307; Conway v. Zinkhofer, 2008 ABCA 392; MraicheInvestment Corp. v. Paul, 2012 ABCA 95; Redland Bricks v. Morris [1979] A.C. 652 (H.L.). [10] By the City of Edmonton: Stevenson & Cote, Alberta Civil Procedure Handbook, Vol. 1, (Edmonton: Juriliber 2011); AircoAircraft Charters Ltd. v.

Edmonton Regional Airports Authority, 2010 ABQB 397 (Alta. Q.B.); Airco Aircraft Charters Ltd. v.Edmonton Regional Airports Authority, 2010 ABCA 364 (Alta. C.A.); 369413 Alberta Ltd. v. Pocklington, 2000 CarswellAlta 1295,2000 ABCA 307 (Alta. C.A.); Mraiche Investment Corp. v. Paul, 2012 CarswellAlta 390, 2012 ABCA 95 (Alta. C.A.); Conway v.Zinkhofer, 2008 CarswellAlta 1764, 2008 ABCA 392; Hunka v. Degner, 2011 CarswellAlta 472, 2011 ABQB 195 (Alta. Q.B.);Judicature Act R.S.A. 2000 c. J-2; Murphy Oil Co. v. Predator Corp., 2002 CarswellAlta 867, 2002 ABQB 629 (Alta.

Q.B.); 364661Alberta Ltd. v. 735608 Alberta Ltd..2010 ABCA 6, 2010 CarswellAlta 10. [11] By the court: R.J. Sharpe, Injunctions and Specific Performance, Looseleaf ed., Canada Law Book Co. 1. Background

a) Factual [12] Edmonton Regional Airports Authority is a not-for-profit regional airport authority which operates four airports in and nearthe City of Edmonton, including the Edmonton City Centre Airport and the Edmonton International Airport.

[ 13 ] The City of Edmonton is a municipality and the owner of the lands on which the Edmonton City Centre Airport - sometimes known as Blatchford Field - is located. [ 14 ] On March 25, 1996, the City of Edmonton, as owner, entered into a head-lease agreement to lease the “ airport lands ” , i.e. the City Centre Airport, (Blatchford Field) to the Edmonton Regional Airports Authority for a period of 56 years ending on March 31, 2052 “ for the purpose of the operation of an airport . . . ” .

The head-lease included runways 16/34 and 12/30. [ 15 ] On January 1, 1998, the Edmonton Regional Airports Authority sub-leased to the Edmonton Flying Club a portion of the City Centre Airport lands, shown on the

schedule to the agreement as Site 18, North of and adjacent to Airport Road, for a period of 30 years ending on December 31, 2028. The lease entitled the Flying Club to use the leased premises “ primarily for the purpose of the sale, leasing, storage, maintenance, repair and overhauling of aircraft; warehouse, shop and office use associated with aircraft and airport operations; and any business associated with the aerospace industry ” .

Schedule B of the lease indicated that, effective April 1, 1996, Edmonton Airports assumed control, management and operations for the Edmonton City Centre Airport to operate the airport as a VFR/IFR precision approach public airport providing 24 hour a day landing capability offering general aviation services and set out the various aeronautical and non-aeronautical uses of the airport and the fees therefor. [ 16 ] On February 13, 2006, the Edmonton Flying Club assigned its sublease to 1222663 Alberta Ltd. [ 17 ] On July 8, 2009, the Council of the City of Edmonton passed a resolution approving a phased closure of the Edmonton City Centre Airport to allow the ERAA land to be redeveloped by private land developers.

The ERAA passed a resolution to fully cooperate with the City in its intended redevelopment of the airport lands; by agreement dated July 23, 2010, ERAA surrendered part of its lands, including runway 16/34, to the City of Edmonton.

Since then, runway 16/34 has been closed; that runway was the only IFR precision approach runway, in the first phase and full and final closure of the airport in the second phase. [ 18 ] In its decision of June, 2010 in the matter of Airco Aircraft Charters Ltd., this court noted: 9 A closure strategy devised in January 2010 targets 2014 for completion of negotiations and obtaining surrenders of subleases from all Airport tenants. It contemplates complete closure of the Airport in 2015.

A notice given on April 29, 2010 indicates that Runway 16/34 is to be decommissioned the week of August 3, 2010 and that NAV CANADA approval of the GPS/WAA system instruments for approaches for Runway 12/30 is expected before then. [ 19 ] On August 4, 2010, the Airport Authority yielded up to the City of Edmonton all of its interest in a portion of the airport lands, including Site 18, and one runway.

The Airport Authority has up-graded the remaining runway with a GPS/WAA system. [ 20 ] In February 2011, the City announced that it planned to commence redevelopment of the City Centre Airport starting no later than in 2014. [ 21 ] In its Statement of Claim, filed on July 8, 2011, the Flying Club claimed a variety of causes of action, including breach of contract by the municipality and ERAA, and various economic torts including unlawful interference with contractual relations and inducement of breach of contract.

Based on those allegations, the Flying Club claimed various relief including a declaration that the defendants have breached the sub-lease, an order for specific performance requiring the defendants to perform the terms of the sublease, and a permanent injunction restraining the defendants from taking any further steps to close the Edmonton City Centre Airport. [ 22 ] In addition to the law suits commenced by the Flying Club, about which there is agreement amongst the parties that the redundant suit be discontinued and the remaining suits, made necessary because of the raising of a limitations issue, will be consolidated or heard together, there are two other, related, legal proceedings.

In one, Airco Aircraft Charters sued the ERAA for breach of sub-lease of lands at the Edmonton City Centre Airport. and asked for various relief including declarations and interim and permanent injunctions. At one point, Airco asked this court for

summary judgment in its action; that application was denied.

[ 23 ] In another legal proceeding, Morningstar Air Express sued Shell Canada Limited for the breach of a ten year lease, expiring January 14, 2016, for a portion of Leasehold Area 21 identified as Building 16 at the City Centre Airport. Morningstar also sublet a portion of the City Centre Airport identified as Hanger 31. The same law firm which represents the Flying Club also represents Morningstar.

b) Procedural [ 24 ] The Rule which authorizes severance is R. 7.1:

Part 7: Resolving Claims Without Full Trial Division 1 Trial of Particular Questions or Issues Application to resolve particular questions or issues 7.1(1) On application, the Court may (

a) order a question or an issue to be heard or tried before, at or after a trial for the purpose of (

i) disposing of all or part of a claim, (ii) substantially shortening a trial, or (iii) saving expense, (

b) in the order or in a subsequent order (

i) define the question or issue, or (ii) in the case of a question of law, approve or modify the issue agreed by the parties, (

c) stay any other application or proceeding until the question or issue has been decided, or (

d) direct that different questions of fact in an action be tried by different modes.

(2) If the question is a question of law, the parties may agree (

a) on the question of law for the Court to decide, (

b) on the remedy resulting from the Court ’ s opinion on the question of law, or (

c) on the facts or that the facts are not in issue.

(3) If the Court is satisfied that its determination of a question or issue substantially disposes of a claim or makes the trial of the issue unnecessary, it may (

a) strike out a claim or order a commencement document or pleading to be amended, (

b) give judgment on all or part of a claim and make any order it considers necessary, (

c) make a determination on a question of law, or (

d) make a finding of fact

(4) Part 5 [Disclosure of Information] Division 2 [Experts and Expert Reports] applies to an application under this rule unless the parties otherwise agree or the Court otherwise orders

2. General

interpretation of Rule 7.1 [ 25 ] All parties agree that severance is not, as a matter of generally accepted principle recently and usefully reviewed by our Court of Appeal in Gallant , readily granted. [ 26 ] The Gallant decision particularly emphasized the following aspects of Rule 7.1: - the clear aims, and resulting criteria, identified in R. 7.1 for splitting trials cannot be superceded by R. 1.2; - “ saving time or money requires more than just a good probability that the second trial will not be necessary; it also requires that the first trial be much shorter than the second ” : para. 48; - any significant overlap in evidence between the issues which are the subject of the severance application will, essentially, doom the application. [ 27 ] For the purposes of this application, I agree with the respondents ’ s contention that a determination on severance requires the court to consider all of the aims and objectives set out in Rule 7.l.

In other words, for the purposes of this decision, I attach no significance to the normally disjunctive word “ or ” found in each of sub Rules 7.1(1), 7.1(2) and 7.1(3). 3. Application of the general principles to the situation here [ 28 ] The Gallant decision has helpfully underlined the fact that Rule 7.1 anticipates, on the one hand, that severance might reasonably have positive results, and, on the other, avoid material negative results.

a) Absence of negative effects [ 29 ] The main potentially negative effect of an ineffective severance is, of course, that there is a repetition in a second proceeding of matters dealt with in a first proceeding resulting not only in additional delay and expense but the potential for different treatment in the two proceedings of the same issue. Therefore, where there is a potential for the overlap of evidence between severed portions of a legal proceeding severance will usually be refused.

Let us then begin the analysis of whether severance should be granted in the situation here with a review of the likelihood of any material overlap of the evidence required to deal with the trial of the claim for injunctive relief and the trial of the claim for damages. [ 30 ] During this analysis, I will not use the respondents ’ suggested description of the nature of the severance application as being one in which the Flying Club is asking for severance between liability issues and remedy issues. In my view, the severance requested relates to the two types of remedy claimed, injunctive relief and damages.

Indeed, before the Flying Club can obtain any relief, it must establish “ liability ” on the part of the respondents; from a positive perspective, the determination of liability in a trial for injunctive relief will almost certainly become a matter of issue estoppel not only in any future trial of the Flying Club ’ s claim damages, but also in any future trials involving either Airco or Morningstar. [ 31 ] Similarly, in my view the respondent City ’ s position is untenable when it states that severance will not dispose of part of the Flying Club ’ s claim because the Club will only be successful if it establishes both a breach of the lease and an entitlement to an injunction.

Of course, that is true. Obviously, the Flying Club will only be entitled to either injunctive relief or damages if it proves a breach. Therefore, if, in the trial for injunctive relief, the court were to find that there was no breach of the lease, then there could be no trial for damages and that part of the Flying Club ’ s current claim would not be tried; the objectives of saving trial time and expense would, in such circumstances, clearly be met for all litigants.

[ 32 ] Going back then to the consideration of potential negative results from severance, I have concluded that, in the circumstances here, there is no material overlap between the evidence required for a trial of the request for injunctive relief and a trial of the request for damages. Indeed, the claim for injunctive relief is, in the circumstances here, almost a pure question of law, or, as the Supreme Court might put it, it falls along a “ spectrum of particularity ” in which the law is a more important component than the facts.

While some factual matrix is, of course, necessary to the determination of whether injunctive relief can and should be granted, the most important issue for a court to consider in assessing such an application is whether the principles of equity support the granting of such a remedy. Every time a lessor, like the City of Edmonton, breaches a lease, the lessee, like the Flying Club is entitled to damages; it is only in a restricted number of situations that a breach of a lease will entitle the victim of the breach to the equitable remedy of injunction.

In the circumstances here, it is useful to consider, separately, whether the Flying Club fits within the parameters of relief expanded by the application of principles of equity. [ 33 ] Because the issue that must be decided in relation to injunctive relief is really one of principle, the respondents ’ concern about the value of the Edgar affidavits is misplaced: the facts that are necessary to hear the claim for a injunctive relief are narrow.

The savings of expense claimed by the Flying Club is, in effect, the savings attributed to the very attenuated need for disclosure related to the injunction claim when compared to the cost of full disclosure by all parties in the context of a trial for damages. [ 34 ] All of the standard texts on injunctions, as for example the estimable text authored by the Hon. R.J.

Sharpe, outline the general principles which can be gleaned from the case law concerning the granting of injunctive relief. (Incidentally, although the remedy of specific performance is sometimes treated separately from the remedy of injunction, as the title of the Sharpe text demonstrates, the principles undergirding the two remedies are closely related; therefore, in this decision, I will refer to injunctive relief as encompassing mandatory injunctions, negative injunctions, and specific performance.) At first blush, general remarks to the effect that injunctions are only granted where damages provide an inadequate remedy suggest that an assessment of damages is a necessary feature of any application for a injunctive relief, and that there is a resultant duplication of evidence concerning damages in an application for a injunctive relief and in a trial for damages.

However, such general remarks are modified by more particular, settled, principles: for example, courts will generally grant injunctive relief to enjoin the breach of a negative obligation, but will generally not grant that relief in relation to a breach of a positive obligation. The case law then goes on to propose guidelines about how courts should characterize obligations; in this case, the choice is whether to emphasize that Edmonton can ’ t close the airport - the negative obligation - or that it must keep the airport open - the positive obligation.

For the way in which such a characterization was made in Airco Aircraft , see para. 76 of the trial decision. Such characterizations are not as easy as they might seem, as the Sharpe text, and its reference to the Edmonton Northlands - Edmonton Oilers dispute establishes: see para. 9.120. More relevantly, these characterizations are primarily questions of law, not of fact, and are well suited to a separate, short, focussed, hearing.

Indeed, whether equity should interfere to grant one type of remedy is a question of policy rather than one which depends on the facts of any particular situation. [ 35 ] Also, as the Sharpe text points out, the uniqueness of features of a given situation is likely to influence the determination of which kind of remedy is appropriate. Here, the Flying Club notes that its structure makes the granting of damages an unworkable remedy; that position must obviously be tested at a trial: see para. 7.200.

However, the nature of the organization is not a matter requiring extensive, contested evidence; the nature of its organization is a matter of fact which very likely can be agreed. Similarly, the availability of other airports within the city of Edmonton and its environs is likely to be a fact which can be agreed on. The legal issue at the trial will be whether the uniqueness of the organization of the plaintiff, and possibly the uniqueness of the public character of the municipality and of the services provided in the lease, are sufficient to ground an equitable remedy.

This is a legal issue, rather than a dispute about facts, and one which is well suited to a separate hearing. [ 36 ] Finally, the texts point to the differences of approach amongst common law countries and over time even within common law countries about the general principles that should motivate decisions concerning the appropriateness of equitable remedies: see para. 7.440.

These also are matters for courts to ponder and determine; they are not matters which depend on the facts of a particular situation. [ 37 ] The respondents argue that the issue of the availability of injunctive relief in the circumstances here was canvassed, and rejected, in the Airco Aircraft decision. With respect, that decision dealt with an application for

summary judgment - in which the determinations that must be made by a court are very different from the determinations which must be made here. This case is materially different from Airco Aircraft : these applicants are specifically requesting a trial. The Court of Appeal continually emphasized in Airco Aircraft that the issues raised by that applicant were issues that had to be tried; that is exactly the process requested by the Flying Club here.

Therefore, the approach taken by the case management judge and the Court of Appeal in Airco Aircraft , while interesting as obiter, are not determinative of the issues relevant on this application. Also, the status of quia timet injunctions may not have been fully canvassed in Airco Aircraft .

Moreover, the facts surrounding the municipality ’ s public position relative to the closing of the airport lands may well have changed since the factual matrix considered by the case management judge in that decision; there is no reason to anticipate that, in a trial of the Flying Club ’ s claim for injunctive relief that the municipality would in any way resile from the public statements and actions which it has taken since 2010 in relation to the final closing of the City Centre airport.

The timing of the closing of the airport may be much more certain today than it was when the Airco application was brought before this court; it may well be that the potential for the entire closing of the downtown airport prior to the termination of the Flying Club ’ s lease would be answered differently by a trial judge in this matter than by the case management judge in the Airco proceedings and even at a trial in the Airco

Aircraft proceedings themselves. Finally, the non-profit, no shareholder, status of the Flying Club was presumably not a feature of the applicant in Airco Aircraft . [ 38 ] As to the factual matrix for the trial of the claim for a injunctive relief, as the applicants suggest, the evidence that is required on such an application is straightforward and is likely to be able to be led by way of an agreed statement of facts.

Indeed, the existence of the lease, the public character of the municipality, the public service provided by a municipal airport, the public indications by the municipality concerning its intentions relative to the leased lands, are all matters about which there is likely to be no real dispute. [ 39 ] In

summary, there is no material overlap in the evidence required to determine if the Flying Club is entitled to injunctive relief and the evidence required to determine the Flying Club ’ s claim for damages.

b) Presence of positive effects [ 40 ] We can now turn to the potential positive results which can be predicted from severance. (

i) Saving expense : probability of first trial being conclusive and shorter than any a second trial [ 41 ] The first advantage of granting severance here is the potential saving of considerable expense not only to the applicants, but to all parties. [ 42 ] In this context, the Court of Appeal has emphasized that there should be a “ good probability that the second trial will not be necessary ” and that the first trial should be shorter than the second trial. [ 43 ] The phrase “ good probability ” is somewhat difficult, implying as it might, a balance of probabilities greater than 50%.

However, it appears to me that a clearer expression of the Court of Appeal ’ s intention in setting this guideline can be found at para. 16 of Gallant where the court says: 16 Of course splits are not forbidden, and occasionally there is good reason to think that one will save time and money. For example, sometimes a simple readily extricable preliminary issue will take little time or money, and stands a good chance of ending the suit.

An expired clear limitation period, or some discrete condition precedent to suing (such as someone's permission) have been tried separately in the past. (Emphasis added) [ 44 ] Here, the issue of whether the Flying Club is entitled to injunctive relief could be the subject of a simple trial because it is a readily extricable, which is preliminary to the issue of damages, and the hearing of which has a “ good chance ” of ending the law suit.

In coming to the conclusion that there is a good chance of the application for injunctive relief ending the lawsuit, I note, in particular, the uniqueness of the Flying Club ’ s structure in relation to an award of damages and the Flying Club ’ s claim for uniqueness in relation to the leased premises. Uniqueness is, of course, one of the hallmarks sought by equity as a necessary pre-requisite to the granting of injunctive relief.

It would be wrong for a chambers judge to attempt to try the Flying Club ’ s claim for injunctive relief, but the court can at least say that the Club has raised law and provided some facts which take the claim beyond that of merely a serious issue to be tried. [ 45 ] As to the second part of the Court of Appeal ’ s test, that the first trial should be shorter than the second, there is no question but that, in the circumstances here, the trial of the entitlement to injunctive relief will be much shorter than any trial for damages, especially given that the trial of the claim for damages would involve the different positions of three separate litigants.

[ 46 ] In the

section above dealing with counter-indications to severance, the nature of the claim for injunctive relief and its lack of overlap with the nature of the claim for damages was explored. The court concluded that the trial of the issue of whether injunctive relief should be granted can be short, can be based on evidence which is essentially uncontested, and can address matters which are separate from those implicit in a trial for damages. Obviously, there are important advantages to having a quick, short, relatively cheap, trial.

That possibility is particularly important in the circumstances here which include the fact, underlined by Airco, that, given the state of pre- trial process, the length of pre-trial steps, the delay in getting the matter on for a relatively lengthy trial of the combined injunction/damages trial, it is possible that the remedy of injunction would be effectively withdrawn from the plaintiffs because a combined trial could only be held after the municipality ’ s planned closure of the entire airport.

Any success by the Flying Club at that stage would be merely Pyrrhic. [ 47 ] Moreover, as the litigant Airco has indicated in its support of the Flying Club ’ s application that it is prepared to abide by whatever decision is made in the trial of the claim for a injunctive relief, the granting of severance in these proceedings will also potentially save a trial in separate, but related, proceedings. [ 48 ] Indeed, in considering potential saving of expense, it must be noted that, in Gallant , severance was initially granted “ after all the usual full discovery . . . ” : para. 44.

Here, the application is made much earlier in the proceedings. Indeed, one of the forms of relief requested is a direction that the Flying Club is not required to produce documents or records relating to quantification of damages until after the issue of entitlement to a injunctive relief has been granted.

The timing of this application enhances judicial economy as well as the economy of the parties; the timing here is materially different in relation to the saving of expense from the timing of the application made in Gallant . [ 49 ] Also, it must be noted that the breach of lease issue is potentially different in the Flying Club situation, where it has a sub- lease from the City, and in the situation where Morningstar had a sub-lease from Shell; damages issues will be different in each of the proceedings.

Indeed, the damages position of each of the three plaintiffs who are suing the City and ERAA is, of course, separate as each party ’ s damages is unique to them. Since neither Airco nor Morningstar has anything other than a claim for damages, it is economically sensible to try the Flying Club ’ s claim for injunctive relief separately from all damage claims. [ 50 ] The ability to afford litigation was not a factor in Gallant : see para. 6 . However, in this case, there is a major disparity between the financial ability of the plaintiff and the defendant municipality to fund litigation.

Counsel for the municipality indicated that the City of Edmonton ’ s law department was always concerned about the cost of litigation in every one of its files. I accept that submission.

Nevertheless, when a municipality has made a formal and public statement of intention and objective, as it has here, the municipality has the means of levying tax dollars to fund its stated objective, whereas a similar ability is clearly denied to the Flying Club. [ 51 ] Even though our Court of Appeal stressed, in Gallant , that lack of funds by the plaintiff was not a factor in that case, the court went on to make some reference to case law relating to the implications for severance of a relatively poorer plaintiff than defendant: see para. 7.

There are, however, important differences between the situation here and the situation in the Duffy decision mentioned by the Court of Appeal. The most important is that in that case, but not in this one, a jury notice had been served and was outstanding; that was perhaps the principal reason why the Duffy court overturned the severance.

Another important difference between Duffy and this case is that the saving of expense was clearly not a factor which was recognized by the Duffy court as relevant: The factors generally taken into account in determining whether a matter falls within the foregoing principles have to do with the inherent fairness and expedition of the trial process itself for all parties concerned, rather than with such extraneous factors as their respective abilities to finance the litigation. As noted above, in Alberta today, R. 7.1(1)(

a) specifically mentions expense as a factor to be considered in making a determination on severance.

Indeed, in its decision, the Gallant court made it clear that, whatever the situation may have been in Ontario in 1997, in Alberta, economy was always a proper factor for consideration in severance applications: see paras 11, 12. [ 52 ] Another factor which was present in Duffy which is not present here is that, in that case, the motions judge apparently took only the plaintiff ’ s difficult financial circumstances into account: “ The defendants do not consent to a severance in this case, however, and neither counsel was able to assure us that there is a clear demarcation between the issues of liability causation and damages. [The motions judge] expressed no such view. ” Here, the financial disparity between the litigants is only one, and far from the most important, factor which is advanced by the applicant Flying Club as a factor for consideration.

[ 53 ] In

summary on this point, severance will provide an opportunity for all parties to minimize litigation expense and will also help to even the imbalance in funding ability amongst the parties. (ii) No prejudice [ 54 ] The second thing to note about this case is that it meets one of the side issues mentioned in Gallant where our Court of Appeal stated, in relation to a decision from another jurisdiction, that “ there a split arguably would prejudice no one ” . That is precisely one of the arguments made by the Flying Club: if their application for a injunctive relief is granted, that is the end of the litigation.

If, however, their application is refused, no one is prejudiced, since all parties would go on to litigate the issue of damages. Hearing the Flying Club ’ s claim for injunctive relief would, of course, cause some delay for Morningstar, Airco and the respondents. However, given the formal position adopted by Airco on this application, and the fact that the Flying Club and Morningstar are represented by the same counsel and the representations of counsel on this topic at the hearing, it is reasonable to assume that neither of those other plaintiffs is asserting any prejudice in relation to severance.

In any event, given the length of the lease, and the time which the municipality has taken to make its intentions clear, and the fact that a determination on the issue of the granting of a injunctive relief is likely to be more a matter of principle that a resolution of a factual dispute, the relatively short addition to the litigation time line occasioned by the requested split would not be material.

Moreover, if the Flying Club were successful in its application for injunctive relief, and the City of Edmonton appealed, the only possible results of the appeal would be, on the one hand, a confirmation of the injunction, or an order that the injunction was improperly granted and that (since a breach of the lease is obvious) a trial on damages must be held.

Again, there would be some overall delay in having damages determined if the second possibility occurred, but there would be no additional, or “ second ” appeal as that term is used in para. 36 of Gallant and, of course, no second trial on damages. [ 55 ] With respect, I also reject the respondents ’ assertion that they will be prejudiced by the failure to have discovery information about the applicant ’ s financial position, etc., prior to a trial limited to injunctive relief.

In my view, their position on this issue fails to take into account that they are not the ones requesting injunctive relief: they don ’ t have to prove anything. It is clearly the Flying Club ’ s position that the nature of its organizational structure and the uniqueness of the airport facility are the main features which entitle it to injunctive relief. If it fails to call evidence about its financial situation, etc., the Flying Club takes the risk that the trial court will conclude that it has not proved an entitlement to injunctive relief.

This style of litigation preparation is modelled on the current English practice which emphasizes the responsibility of the plaintiff litigant to disclose the evidence on which it intends to rely to make its case.

Adopting such an approach here cannot be said to cause prejudice to the respondents; this is not a situation - such as sometimes occurs where fraud is a concern - where the respondents should be given every opportunity to explore issues which the plaintiff is not intending to raise. [ 56 ] As for the City ’ s ability to have a productive pre-trial alternative dispute resolution process, since the Flying Club is the only party which is claiming injunctive relief, it will in fact simplify the City ’ s preparation for alternative dispute resolution to be able to concentrate on the likelihood of success on principle by only one of the parties, on only one of the issues rather than to prepare to respond to all of the parties, with each of their fact scenarios, on all of the issues. (iii) Disposes of a claim [ 57 ] The third thing to note about this case is that it meets the requirement emphasized in Gallant that the severance might dispose of part of the suit.

Here, the plaintiff itself proposes a partial remedy: if it is successful in its claim for a injunctive relief, it will abandon its claim for damages, thereby making the trial of the issue of damages unnecessary.

c) Conclusion [ 58 ] In overall

summary then, there is no counter-indication to the granting of severance and the granting of severance can be

[ 58 ] In overall

summary then, there is no counter-indication to the granting of severance and the granting of severance can be expected to achieve some positive objectives. For the reasons set out above, severance is granted. 4. Procedural issues [ 59 ] Having determined that the Flying Club is entitled to have a trial for its claim for injunctive relief before a trial for damages, the court necessarily denies the respondents ’ application that all three related proceedings should be heard concurrently.

Rather, once the court has made a determination on the claim for injunctive relief, a case manager will be appointed to ensure that all remaining issues - there will be at least the trial for damages in the two separate, but related, proceedings initiated by Airco and by Morningstar - will be tried in as effective a manner possible. [ 60 ] As to the issue of the two Flying Club actions that are essentially duplicitous, the municipality raised a limitations defence which triggered the filing of the second claim.

However, neither the municipality nor the airport authority have suffered any prejudice by reason of the filing of the second action and, indeed, both the municipality and the airport authority have filed defences in both actions. Any prejudice suffered by the respondents by reason of the duplicate filings can be resolved by the trial judge in a costs award. 5.

Costs of the adjournment [ 61 ] The respondents ask, separately, for costs of the adjournment which they were offered and which they chose to avail themselves of. [ 62 ] In my view, the respondents have not established that they are entitled to costs of the adjournment. An adjournment was granted to ensure that the respondents had a full opportunity of defending the application rather than because the applicants had mis-stated the nature of their application in their written materials. 6. Costs [ 63 ] If the parties are not agreed on costs, I may be spoken to within 30 days of the release of this decision.

Heard on the 27 th day of June, the 30 th day of July and the 3 rd , 9 th and 10 th days of August, 2012. Dated at the City of Edmonton, Alberta this 13 th day of September, 2012.

J.B. Veit J.C.Q.B.A. Appearances: Jack N. Agrios, Q.C., Janice A. Agrios, Q.C. for Edmonton Flying Club and 1222663 Alberta Ltd., Morningstar Air Express Inc., Morningstar Partners Ltd. and Morningstar Air Corporation Kim Fallis-Howell, for the City of Edmonton Stephanie A. Wanke, Grant S. Dunlop, Ogilvie LLP for the Edmonton Regional Airports Authority Fred Kozak, Q.C., RMRF LLP for Airco Aircraft Charters Ltd. Stephen Livingstone, McLennan Ross LLP for Shell Canada Limited and Shell Canada OP Inc.