Vulcan (County) v Morozoff, 2013 ABQB 392

Court of Queen ’ s Bench of Alberta Citation: Vulcan (County) v Morozoff, 2013 ABQB 392 Date: 20130712 Docket: 1201 10700 Registry: Calgary Between: Vulcan County Applicant - and - Gordon Morozoff and A Little Piece of Travers Inc. Respondents _______________________________________________________ Memorandum of Decision Regarding Costs of the Honourable Mr. Justice C. M. Jones _______________________________________________________ I. Background [ 1 ] This matter was heard before me on January 10, 2013 as a special chambers application. There was both an application and a cross-application.

The Applicant, Vulcan County, sought, inter alia , a permanent injunction requiring A Little Piece of Travers Inc. (“Travers Inc.”) to remove recreational vehicles, trailers, decks and micro-generation power facilities from certain lands within the Applicant (the “Lands”). The Applicant alleged that the Respondent, Travers Inc., was in continuing breach of its Land Use Bylaw (the “Bylaw”). [ 2 ] On May 24, 2012, the Applicant issued a stop order (the “Stop Order”) directing that recreational, commercial and residential use of the Lands cease and that various chattels be removed from the Lands.

The Respondents had appealed from the Stop Order to the Vulcan County Regional Subdivision and Development Appeal Board. That appeal was unsuccessful and the Stop Order was upheld. [ 3 ] The Applicant asserted before me that by failing to obtain a valid development permit for the Lands, Travers Inc. was in

[ 3 ] The Applicant asserted before me that by failing to obtain a valid development permit for the Lands, Travers Inc. was in contravention of s. 37 of the Bylaws and of

section 683 of the Municipal Government Act , R.S.A. 2000, c. M-26 (“MGA”). While arguing in its brief that the Court of Appeal was the proper forum for challenging the merits of the Stop Order, the Applicant effectively sought to enforce the Stop Order by pursuing its application for a permanent injunction under s. 554 of the MGA. [ 4 ] The Respondents cross-applied for a stay of enforcement of the Stop Order pending an appeal of the Stop Order to the Court of Appeal.

This Court was advised that an application for leave to appeal to the Court of Appeal was to be brought by the Respondents on January 30, 2013. [ 5 ] The Respondents asserted that this Court could not grant a permanent injunction in light of their pending appeal to the Court of Appeal. [ 6 ] I granted the Applicant’s request for a permanent injunction but directed that enforcement be deferred until the latest of three dates.

I dismissed the Respondents’ cross-application and directed that neither party would be entitled to costs in respect of that cross- application. [ 7 ] I directed the parties to make written submissions with respect to costs arising in relation to the injunction application. I have received and considered both submissions. II. Submissions [ 8 ] Counsel for the Respondents asserts as follows: 1. Each party should bear their own costs because each of the Applicant and the Respondents enjoyed partial victory.

He argues that, while the Applicant was successful in securing a permanent injunction, the Respondents were successful in having enforcement of the Stop Order deferred. 2. If the Court is inclined to award costs against the Respondents, costs should be awarded in accordance with Column 1 of Division 2 of

Schedule C to the Alberta Rules of Court (“Rules”). He notes that the Rules provide that matters which have no monetary amount invoke Column 1. 3. In the alternative, because the Applicant’s efforts in respect of its injunction application (in respect of which it was successful, subject to the limited deferral granted by this Court) “overlapped the work done on the Respondents’ “Stay “ Application, for which no costs were awarded”, the Applicant should be entitled to only half of its Column 1 costs. [ 9 ] Counsel for the Applicant asserts as follows:

Section 554.1 of the MGA entitles the Applicant to lawful costs. That

section provides as follows:

(1) A municipality is entitled to collect lawful costs in all actions and proceedings to which the municipality is a party.

(2) The costs of a municipality in an action or proceeding in which the municipality is a party are not to be disallowed or reduce because the municipality’s lawyer in the action or proceeding is an employee of the municipality. 2. Full indemnity, solicitor-client costs are appropriate because the Applicant deferred its action to enforce the Bylaw as a last resort. This application was brought only once the Respondents abandoned their efforts to bring the Lands into compliance with the

Bylaw. The Applicant claims that solicitor-client costs amount to $29,848.50. 3. Failing an award of costs on a full indemnity basis, the Court should order costs under Column 5 of Division 2 of

Schedule C to the Alberta Rules of Court. The Applicant argues that fees of $9,250.00, computed under Column 5, are a fraction of its actual fees incurred and that this Court is empowered by the Rules to depart from Column 1 in appropriate circumstances. Column 1 would normally be applicable in actions where no monetary amount is involved. 4. The Respondents did not enjoy “partial success” by securing a delay of enforcement of the injunction until, at the latest, April 30, 2013.

Counsel asserts that the Applicant offered to defer removal of items until this date as “a courtesy to the Respondents to avoid enforcement timelines requiring the removal of the offending property during the winter months.” 5.

The Respondents’ cross-application, which was dismissed without costs, was functionally the same as the Applicant’s injunction application and no division of costs should be undertaken. [ 10 ] During the hearing on January 10, 2013, the Applicant asserted that it had been required to incur costs, for which taxpayers in the Applicant should not be responsible, as a consequence of Travers Inc.’s ongoing failure to comply with the Bylaw. III.

The Rules [ 11 ] Rule 10.29 provides, inter alia , that a successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party. By negative inference, an unsuccessful party generally should not expect to receive an award of costs against the successful party. [ 12 ] Rule 10.29(

a) provides that the principle it enunciates is subject to the Court’s discretion to award costs under Rule 10.31. Rule 10.31 confers general discretion upon the Court to award costs, taking into account the factors specified in Rule 10.33. [ 13 ] Those factors are set out in Rule 10.33(1) as follows: In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action;

(

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate. [ 14 ] Further, Rule 10.33(2) provides as follows: In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defense from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct. IV. Application of the Rules [ 15 ] The Applicant argued at the hearing that it had an obligation to enforce a public law. Notwithstanding that the Respondents would soon be before the Court of Appeal seeking leave to appeal the Stop Order, the Applicant, through its own review and appeal process, determined that there was a contravention of the Bylaw. Accordingly, it believed that it was entitled, and indeed obligated, to carry out its regulatory function by seeking a permanent injunction.

In its view, taxpayers should not have to bear the costs of enforcing the Bylaw against non-compliant property owners. [ 16 ] One might assert that, in performance of its duties to protect the interests of its taxpayers the Applicant owes a duty to manage taxpayer moneys prudently. That duty would include the responsibility of determining when it is appropriate commit taxpayer funds to the litigation process and when it is inappropriate to do so.

Pursuing that line of reasoning might lead one to conclude that the Applicant could have avoided incurring the costs associated with the applications before me by waiting for the outcome of the Respondents’ appeal before the Court of Appeal. In that situation, Rules 10.33(2)(

a) or (

d) might apply to influence my decision regarding costs in a manner adverse to the interests of the Applicant. [ 17 ] I determined that the Applicant had the right to seek the permanent injunction which I granted. I could have declined to grant a deferral of my Order until the later of the dates mentioned in my Order. Presumably, failure to grant that deferral would have led to an application for a stay of the injunction which I granted, pending the application for leave to appeal the Stop Order to the Court of Appeal.

The Applicant, responsibly, did not argue against my decision to order a deferral. [ 18 ] Taking the above matters into consideration, I have determined that the Applicant shall have its costs against the Respondents computed in accordance with Column 5 of Division 2 of

Schedule C to the Rules. Counsel for the Applicant prepared five draft bills of costs, one for each of Columns 1 through 5, all of which accompanied his letter of submissions to this Court dated February 20, 2013.

For the avoidance of doubt, I approve the draft bill of costs particular to Column 5 which accompanied that letter. Heard on the 10 th day of January, 2013. Dated at the City of Calgary, Alberta this 12 th day of July, 2013. C. M. Jones J.C.Q.B.A. Appearances: Abram Averbach Macpherson Leslie & Tyerman LLP for the Applicant Michael R. Low Richard A. Low & Company for the Respondents