Vallieres v Vozniak, 2013 ABQB 361

Court of Queen ’ s Bench of Alberta Citation: Vallieres v Vozniak, 2013 ABQB 361 Date: 20130626 Docket: 0901 00633 Registry: Calgary Between: Real Vallieres and Suzanne Weller Plaintiffs/ Defendants by Counterclaim - and - Charlie R. Vozniak also known as Chuck Vozniak Defendant/ Plaintiff by Counterclaim _______________________________________________________ Decision on Costs of the Honourable Mr. Justice R. J. Hall _______________________________________________________ [ 1 ] The Plaintiffs sued the Defendant when the Defendant refused to close a real estate purchase.

The Defendant responded to maintain that the Plaintiff vendors had failed to meet their obligations under the contract. In Reasons for Judgment issued May 2, 2013 I agreed with the Defendant that the Plaintiffs had failed to perform their obligations and the Defendant was justified in not carrying out the agreement.

[2] The successful Defendant now seeks solicitor/client costs of the Action, relying on clause 9.1 of the Real Estate PurchaseAgreement, which provided: If the Seller or the Buyer fails or refuses to complete this contract according to its terms, then the other party may pursue all availableremedies. The Seller’s remedies include keeping the Deposit and claiming additional damages.

Both the Seller and the Buyer can claimreasonable costs including legal fees and disbursements on a solicitor/client full indemnity basis. [3] The unsuccessful Plaintiffs do not disagree that the contract provides for solicitor/client costs to be paid to the party whosuccessfully enforces the contract. However, the Plaintiffs say that the Defendant disaffirmed the contract; he did not seek specificperformance of it; he did not affirm the contract and seek and obtain damages for its breach. Having disaffirmed the contract, he cannotnow claim a remedy under its terms.

Therefore, say the Plaintiffs, the appropriate measure of costs to be assessed against them is normalparty/party costs under

Schedule C to the Rules of Court. [4] The Defendant analogizes to landlord and tenant law. There, upon breach by the tenant, the landlord may elect to terminatethe lease and then claim damages for having lost the benefit of the lease over its unexpired term. The Defendant says that, in a similarvein, he, as purchaser, should be able to terminate or disaffirm the agreement, yet sue for his damages under the agreement: to wit, thesolicitor/client costs provided thereunder. [5] I disagree with the Defendant’s argument.

While it may be the case that there is a special category of remedies applicable inlandlord and tenant law, arising from Highway Properties Ltd v Kelly Douglas Co (SCC), 1971 SCR 562, I do notconsider that any such category has been created in relation to other contracts including one for purchase and sale of real estate. If thesuccessful party has affirmed the contract and successfully sues thereunder he is entitled to performance of the contract and/or damagesthereunder, including costs agreed upon therein.

However, where the successful party has disaffirmed the contract and has been validatedby the court for doing so, he cannot then claim damages under the contract; including costs that were agreed to in the contract. Bydisaffirming the contract he loses any right to claim under it. [6] This differs from my award in the counterclaim for a return of the deposit. The return of the deposit is not a payment ofdamages under the contract.

Once the contractual obligations of the Plaintiffs were not met and the Defendant successfully disaffirmedthe contract, the deposit was to be repaid as the Plaintiffs had no entitlement to those funds outside of the contract. That differs fromawarding return of the deposit pursuant to the terms of the contract. [7] The parties agree that if party/party costs are awarded by me under

Schedule C, then Column 3 applies to the costs of theAction, doubled after the making by the Defendant of a formal offer of judgment on September 30, 2009. I so direct. [8] Costs of filing of the counterclaim have been claimed by the Defendant, based on Column 3 of

Schedule C. That is notcorrect; because of the value of the counterclaim, costs of the counterclaim shall be on Column 1 of

Schedule C. They shall include onlythe filing of the Counterclaim, since all other costs are common to defence of the claim and prosecution of the Counterclaim, and cannotbe claimed twice. [9] In my reasons for Judgment I invited counsel to address me regarding any issue as to costs. My decision here mirrors thecosts that were offered by the Plaintiffs before this application. The Plaintiffs have therefore succeeded in this motion and shall havecosts of this motion under item 8.1 of Column 3 of

Schedule C of the Rules of Court. Heard on the 14th of June, 2013. Dated at the City of Calgary, Alberta this 26th day of June, 2013.

R. J. Hall J.C.Q.B.A. Appearances: C. Michael Smith of Smith Mack Lamarsh for the Plaintiffs/Defendants by Counterclaim Norm Anderson of Shea Nerland Calnan for the Defendant/Plaintiff by Counterclaim