First Calgary Financial Credit Union Limited v Inspired Luxury Homes Inc, 2014 ABQB 787

Court of Queen ’ s Bench of Alberta Citation: First Calgary Financial Credit Union Limited v Inspired Luxury Homes Inc, 2014 ABQB 787 Date: 20141230 Docket: 1101 15628 Registry: Calgary Between: First Calgary Financial Credit Union Limited Applicant/Appellant - and - Inspired Luxury Homes Inc. Respondent _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice C. Dario _______________________________________________________ Appeal from the Order by K. Laycock, Master in Chambers Dated the 15 th day of May, 2013 and 27 th day of August, 2013 I. Introduction

[ 1 ] These appeals by First Calgary Financial Credit Union Limited (“ First Calgary ”) relate to a mistake made by First Calgary’s counsel, Leon Brener Law (“ LBL ”), in the disposition of proceeds from the sale of properties to the third encumbrancers on title, David and Janet Kowal (the “ Kowals ”). This disposition was made pursuant to an order of Master Laycock rendered on May 15, 2013 (the “ May 2013 Order ”) directing payment of the balance of the proceeds to the respondents, the Kowals. Upon discovering the mistake, First Calgary requested that Master Laycock revisit his order so as to correct the error.

Master Laycock declined, finding that the conditions required to grant the requested remedies under the Alberta Rules of Court , AR 124/2010 [ Rules ], were not met and that he was functus officio (“ functus ”). [ 2 ] There are two matters on appeal. The first appeal concerns Master Laycock’s decision of August 27, 2013, where he found that he could not revisit his May 2013 Order because he was functus . The second appeal concerns Master Laycock’s May 2013 Order to release the funds to the Kowals. Regarding the second appeal, there is a preliminary application to extend the time to appeal. II.

Background [ 3 ] This matter deals with the payment of tax arrears which relate to the foreclosure of condominium units. On February 28, 2012, Master Hanebury issued a Redemption Order concerning certain of these condominium units and their associated parking stalls, which entitled the defendants to a six month redemption period. Having failed to redeem in time, on February 11, 2013, Master Hanebury issued four Orders Confirming Sale and Vesting Title concerning these units.

These orders directed the first mortgagee, First Calgary, to sell these units. [ 4 ] These orders also charged First Calgary’s lawyer, LBL, with the responsibility of distributing the sale proceeds. LBL was directed to first pay the outstanding municipal taxes, and then to pay other amounts related to outstanding utilities, condominium fees, realtor fees, and similar charges. Once these amounts were paid, LBL was to pay the first encumbrancer, First Calgary, and then pay the remainder of the proceeds into court.

LBL paid the amounts specified in the orders, but made a mistake: it forgot to pay the taxes owing against the units in question. As such, the amount that would have gone towards paying the taxes, $45,074.57, was instead paid into court. [ 5 ] The second encumbrancer of these units was paid out by subsequent Court Order granted on April 26, 2013.

In anticipation of their distribution, the third encumbrancers—the Kowals—had entered into a settlement agreement with the other final interested parties — 992970 Alberta Ltd. and Ryan Fujita— regarding the distribution of the remaining monies in court. [ 6 ] Pursuant to this agreement, Master Laycock’s May 2013 Order directed that the other interested parties receive $15,000 and that the Kowals receive the remaining balance of the funds held in court ($149,926.64).

First Calgary did not oppose the Kowals’ application to distribute these funds because, at that time, it was not yet aware that the taxes had not yet been paid. [ 7 ] In this disbursement, the Kowals received more money than they otherwise would have received if the tax arrears had first been paid. There were, however, still insufficient funds in court to fully pay the Kowals; there was a shortfall of approximately $100,000 on the mortgage owed to them. [ 8 ] On May 30, 2013, LBL became aware of its mistake. LBL filed an application for the monies to be paid from court back to LBL.

This application came too late, however, as the monies had already been paid out of court to the Kowals. LBL immediately took informal steps to try and get back these monies directly from the Kowals. These steps proving unsuccessful, on July 10, 2013, LBL filed a formal application for the Kowals to return these monies to the court. [ 9 ] On August 27, 2013, Master Laycock dismissed LBL’s application. He held that his May 2013 Order accurately expressed his intentions and determined the rights of the parties to the remaining funds. Master Laycock also held that his order is final, not interlocutory.

Master Laycock held that he did not have the authority to vary his order under rules 9.12, 9.14, or 9.15 as the conditions of those rules were not met. He was thereby functus. [ 10 ] LBL received oral authorization from First Calgary to appeal on September 12, 2013, followed by written authorization on September 25, 2013. On September 13, 2013, First Calgary (by its counsel, LBL) filed two Notices of Appeal. The first appealed Master Laycock’s May 2013 Order, the other appealed his oral decision on August 27, 2013 regarding variation of the May 2013 Order.

On September 16, 2013, First Calgary (by its counsel, LBL) filed an application for an extension of the appeal period relating to the May 2013 Order. The September 13, 2013, filing date was after the expiry of the ten day appeal period relating to Master Laycock’s May 2013 Order. III.

Issues: 1) Did Master Laycock err in finding that he was functus in his decision on August 27, 2013? 2) Should the Court extend the time to appeal Master Laycock’s May 2013 Order for payment of the balance of the proceeds to the Kowals? 3) If granted the extension of time, does the Appellant succeed in its appeal of the Master’s May, 2013 Order? IV. The Parties [ 11 ] First Calgary was the applicant in the sale and distribution proceedings before Masters Hanebury and Laycock. Once the tax non-payment mistake was discovered, however, LBL appeared before Master Laycock on its own behalf regarding repayment by the

Kowals. For simplicity, in the functus analysis, First Calgary and LBL are treated together as the “Appellant.” First Calgary and LBLare treated as separate parties in assessing whether to grant the appeal of the May 2013 Order, and specifically in the related issue ofwhether to grant the extension of time to appeal. V. Issue 1: Did Master Laycock err in finding that hewas functus in his decision on August 27,2013? A. The Law on the Doctrine of Functus [12] Once an order is entered or is otherwise perfected, the court which passed the order is functus and the court may not set asideor alter the order.

Otherwise phrased, once any order of the court is entered, the court has no jurisdiction to revisit that order, even ifthere is a change in circumstances or if it appears wholly wrong (see Chandler v Assn of Architects (Alberta), (SCC),[1989] 2 SCR 848 at para 76). [13] The Supreme Court explained the rationale behind this rule in Doucet-Boudreau v Nova Scotia, 2003 SCC 62 [Doucet-Boudreau] at para 79. The purpose of the functus principle is to ensure that there is finality of judgments from courts which are subject toappeal.

They went on to say at para 79: ... if a court could continually hear applications to vary its decisions, it would assume the function of an appellate court and deny litigantsa stable base from which to launch an appeal. [14] There are some exceptions to this general principle that have become codified in the Rules. The Appellant relies on theexceptions set out in rules 9.14 and 9.15(4) of the Rules: 9.14 On application, the Court may, after a judgment or order has been entered, make any further or other order that is required, if (

a) doing so does not require the original judgment or order to be varied, and (

b) the further or other order is needed to provide a remedy to which a party is entitled in connection with the judgment or order. 9.15(4) The Court may set aside, vary or discharge an interlocutory order (

a) because information arose or was discovered after the order was made, (

b) with the agreement of every party, or (

c) on other grounds that the Court considers just. [15] Master Laycock’s May 2013 Order was entered and perfected. In the current case, Master Laycock can only revisit the orderif one of the limited exceptions listed in the above rules exists. If not, he is functus in relation to this order. B. Does Rule 9.12 Apply to the Case at Bar? [16] The Appellant does not rely on rule 9.12. It is, however, discussed by both the Kowals and by Master Laycock in his August27, 2013 decision, so I will briefly address it here.

Rule 9.12 states: 9.12 On application, the Court may correct a mistake or error in a judgment or order arising from an accident, slip or omission. [17] The Appellant has not applied to have this Court correct Master Laycock’s May 2013 Order on the basis of this rule. If it had,it would not succeed. Rule 9.12 allows courts to amend final orders to correct mere technical, clerical or drafting errors in their orders(the “slip rule”).

It does not apply if the order correctly sets out what the court decided: see Hansraj v Ao, 2003 ABQB at para 10referencing the predecessor to rule 9.12; see also HSBC Bank Canada v Billett, 2012 ABQB 782. This rule also allows courts to amendfinal orders when there has been an error in expressing the manifest intention of the court in writing the order: see Halton v Harris,[1892] A.C. 547 at p.560. [18] Here, neither of these exceptions applies. The May 2010 Order does not contain a slip or an error of manifest intent. Themistake in question was that of counsel, not of the courts.

Moreover, Master Laycock found that his May 2013 Order accuratelyexpressed his intentions at the time. As such, Master Laycock correctly determined that rule 9.12 does not apply to the facts of this case. C. Does Rule 9.14 Apply to the Case at Bar? [19] Rule 9.14 grants a judge jurisdiction, after an order has been perfected, to make any further or other orders that are required toprovide a remedy to which a party is entitled vis a vis the original order. The judge has the ability to grant these further orders, but onlyif the further orders would not result in a variation of the original order.

If the requirements of rule 9.14 are met, the court may issuefurther orders whether the original order is interlocutory or final. [20] The Alberta Court of Appeal in Strathcona (County) v Hansen, 2014 ABCA 17 at para 6, explained that rule 9.14 grants acourt power “to make a further order when that is needed in order to provide the litigants with the relief to which they are entitled under

the original order.” [21] Master Laycock found he could not revisit his May 2013 Order because it would violate rule 9.14, as it would constitute avariation of his original order. The Appellant submits that the Master erred in coming to this determination. [22] The Appellant asserts that rule 9.14 applies in this case because application of this rule would not result in a variation to anissue that has been addressed and finally determined.

The Appellant argues that the issue of whether the Kowals were entitled to the taxarrears was not decided. [23] The Appellant relies upon Doucet-Boudreau, wherein the Supreme Court explained that the functus doctrine “has noapplication where the trial judge does not purport to alter a final judgment” (para 76). In Doucet-Boudreau, the trial judge required theparties to report to the Court periodically on their compliance with the Court’s orders. On appeal, the Supreme Court affirmed that thetrial judge validly instituted this reporting requirement.

The trial judge was not functus as he did not purport to “change the decision as tothe scope of the s.23 rights in question, to alter the finding as to their violation, or to modify the original injunctions” (ibid at para 80). [24] The factual circumstances of this case are entirely different from those in Doucet-Boudreau. While the issue of the Kowals’entitlement to the tax arrears may not have been determined previously by the Court, the specific payout of funds was.

In this case, therelief sought by the Appellant is that the Kowals return the specific amount of funds granted to them pursuant to the May 2013 Order.This request would essentially reverse the May 2013 Order; it can only be considered a variation of that May 2013 Order. [25] As such, rule 9.14 could not give Master Laycock authority to grant the relief sought by the Appellant. The functus principleprecludes the variation of the order, and the conditions of the limited exception to this principle as stated in rule 9.14 are not met.

MasterLaycock correctly determined that rule 9.14 has no application in these circumstances. D. Does Rule 9.15(4) Apply to the Case at Bar? [26] The Appellant also relies upon rule 9.15(4), which states that the court has authority to revisit an interlocutory order because,inter alia, new information arose or was discovered after the order is made. If the requirements of rule 9.15 are met, which includes thecondition that the order is interlocutory, the court may revisit the order. [27] There is little judicial

interpretation of this rule. The Court discussed rule 9.15(4) in Foley-Cornish v Nabors Drilling Ltd,2013 ABQB 186, albeit in a substantially different fact scenario. In that case, the Court dismissed the application to vary an interlocutoryorder made in a personal injury trial, citing principles of contract law.

Speaking in general terms, however, the Court interpreted rule9.15(4) to allow the courts “broad discretion in determining whether to set aside interlocutory orders” (ibid at para 14). [28] If Master Laycock’s May 2013 Order is interlocutory, rule 9.15(4) could apply, and the Master would then not be functus.Whether the order would be varied on this basis would depend on whether the new information justifies a variation. If Master Laycock’sMay 2013 Order is final, however, rule 9.15(4) does not apply and the Appellant’s functus appeal fails.

The determination of whetherMaster Laycock’s May 2013 Order is interlocutory or final is central to this appeal.

i) Was Master Laycock’s Order Interlocutory or Final? [29] Having canvassed the law on this issue, one thing is certain: the ability to distinguish between final and interlocutory orders“continues to bedevil counsel and the courts” (Laurentian Plaza Corp v Martin, et al (1992), (ON CA), 7 OR (3d)111 (ONCA) at 116, cited in Alberta Treasury Branches v Leahy, 1999 ABQB 185 at para 21). The tests to determine this differencemight appear relatively straightforward, but their application in practice remains difficult.

On the facts of this case, however, it is clearthat the May 2013 Order is final. [30] While there have been different tests to determine whether an order is final or interlocutory, the “order approach” appears tobe the dominant approach in Canadian law (see Hayes Forest Services Ltd v Weyerhaeuser Co, 2008 BCCA 120). This approach wasfirst enunciated in Bozson v Altrincham Urban District Council, [1903] 1 KB 547 (CA): It seems to me that the real test for determining this question ought to be this: Does the judgment or order, as made, finally dispose of therights of the parties?

If it does, then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, aninterlocutory order. [31] Conversely, the most widely accepted definition for determining when an order is “interlocutory” is found in Jowitt’sDictionary of English Law: A proceeding in an action is said to be interlocutory when it is incidental to the principal object of the action, namely, the judgment.Thus, interlocutory applications in an action include all steps taken for the purpose of assisting either party in the prosecution of his case,whether before or after final judgment; or of protecting or otherwise dealing with the subject-matter of the action before the rights of theparties are finally determined; or of executing the judgment when obtained (D Burke, ed, Jowitt’s Dictionary of English Law, 2d ed(London: Sweet & Maxwell Ltd, 1977) vol 1 at 999). [32] There are some theoretical difficulties with the application of these tests.

For instance, as described by Kent J in ProprietaryIndustries Inc v Workum, 2005 ABQB 472 at para 6: As many judges have said in other cases, in a narrow sense, all orders dispose of the rights of parties. An order requiring someone toappear to be examined pursuant to the discovery rules disposes of the rights of the parties: for one party, he is required to be examinedand for the other, he acquires the right to examine. However, it is not that narrow

interpretation which the courts have adopted. [33] To assist in the application of these tests, the parties have directed me to relevant authorities that they argue apply to the case

at bar. LBL relies upon the Alberta Court of Queen’s Bench and Court of Appeal decisions in Laasch v Turenne as authorities that the May 2013 Order is interlocutory ( Laasch v Turenne , 2012 ABQB 566 [ Laasch ABQB ] and Laasch v Turenne , 2013 ABCA 182 [ Laasch ABCA ]). The facts in these decisions are not straightforward. In Laasch ABQB , the plaintiffs first obtained judgment in Montana against the defendant. The plaintiffs then sought to have that judgment registered in Alberta.

After the registration claim was commenced, but before it was decided, the plaintiffs launched a separate action suing for the debt created by the Montana judgment. Their registration application was then dismissed by Graesser J. Once the registration application failed, the plaintiffs pursued the debt claim and obtained

summary judgment. This was overturned by the Alberta Court of Appeal, however, because it was commenced outside the limitation period. With no other form of recourse (as the limitation periods had expired), the plaintiffs subsequently sought to add their debt claim to the originating notice of their (now-dismissed) registration action. Graesser J granted the plaintiffs’ application to amend the dismissed originating notice. He held that the action commenced by the originating notice was not dead and that he had not decided all of the issues raised by it.

This decision was upheld by the Alberta Court of Appeal (see Laasch ABCA ). [ 34 ] In the context of amending pleadings, and considering the defence of res judicata , Graesser J found that he still had jurisdiction to amend the plaintiffs’ originating notice because the merits of the case had never been adjudicated. Graesser J specifically found that the facts of the debt action were known to the parties and were before him at the time of the registration claim. These facts could have been argued at that time, but the plaintiffs chose to take (what they believed to be) the most expedient route to resolution.

Graesser J thereby found that the Court had not decided all the matters in the originating notice, the action was therefore not dead, and he thus had authority to amend the originating notice. [ 35 ] The Kowals instead rely upon Ensign Estate v Hart , 1998 ABCA 13 [ Ensign Estate ], as authority to show that the May 2013 Order is final. In that case, the Court also dealt with foreclosure proceedings. In that case, Mr. Hart entered into an agreement with the late Ms. Ensign to purchase certain lands. He defaulted on the mortgage and the Ensign estate commenced foreclosure proceedings.

An Order Nisi/Order for Sale was signed, entered, and served; but the respondents later discovered a miscalculation in the balance owed. They brought a motion to amend the Order for Sale to correct the error. The Master dismissed their application, stating he was functus . On appeal, the Court of Appeal noted that it was clear an error had been made at the time of the order; however, the order expressed what the Court knew and decided at that time. As such, the Master correctly determined he was functus . [ 36 ] The Kowals also rely upon Bank of Montreal v Shaw , [1980] AJ No 91 [ Bank of Montreal ] .

In that case, the plaintiff obtained an Order Nisi/Order for Sale in foreclosure proceedings against the defendants. Shortly thereafter, the defendants sold the lands in question. The defendants’ solicitor paid the plaintiff out of the sales proceeds. The defendants claimed that the plaintiff was paid more than it was entitled. The plaintiff had paid property taxes but “had not, presumably in error, claimed these property taxes paid in the foreclosure action” ( ibid at para 4). A “plethora of applications considering the amounts involved” ensued ( ibid at para 1).

The plaintiff applied to amend the Order for Sale to reflect this mistake. The Court dismissed this claim, stating that the Order for Sale accurately reflected the judgment of the Court based on the evidence presented at the time of the order ( ibid at para 7). ii) Findings on Rule 9.15(4) [ 37 ] I find that May 2013 Order is a final order, and therefore the Appellant’s argument regarding rule 9.15(4) fails. [ 38 ] Practically speaking, the May 2013 Order was the last step in the foreclosure.

There is no other purpose to the May 2013 Order; the sole intent of the order was to grant the third encumbrancers final disposition of the funds in court. As noted by the Kowals, if LBL had not erred, there would be no need for First Calgary (or anyone else for that matter) to take any further steps.

Even had there been subsequent encumbrancers whose rights had not yet been determined, however, the May 2013 Order is still final with respect to the Kowals’ rights. [ 39 ] While the principal object of the order could arguably be said to be the foreclosure and sale of the properties, ultimately, this action is driven by the payout of the sale proceeds to each interested party. As such, the May 2013 Order is not merely “incidental” to the principal object of the action. No prior order determined the Kowals’ entitlement to these funds.

The May 2013 Order is directly linked to the subject matter of the proceedings—the disbursement of the monies arising from the foreclosure. In issuing the Orders Confirming Sale and Vesting Title, Master Hanebury left all determinations (following the payment of the first encumbrancer, First Calgary) up to the court in subsequent applications and hearings.

These orders directed that LBL pay the tax arrears, among other things, and then pay the “remainder, if any, into Court to be held by the Clerk of the Court until further Order of this Honourable Court” (para 4(h)). [ 40 ] In this case, the Orders Confirming Sale and Vesting Title did not set out the entitlements of the other encumbrancers. The disposition of proceeds was addressed in subsequent orders.

These orders were crucial steps in the proceedings, and finally disposed of the rights of the applicants involved in those orders. [ 41 ] It is true that the May 2013 Order does not consider the rights of the parties to the tax arrears. I find, however, the reasoning of the Courts in Ensign Estate and Bank of Montreal to be persuasive on this issue. Those cases concerned very similar factual scenarios: foreclosure proceedings in which counsel made mistakes which were identified only after the court orders were entered.

The Courts held that the orders could not be varied, because they reflected the evidence known to the Courts at the time. [ 42 ] Here, the right to the amount representing the unpaid tax arrears was not an issue, and was therefore not adjudicated, at the time of the order May 2013 Order. That order, however, reflected the evidence known to Master Laycock at that time.

Following the reasoning in Ensign Estate and Bank of Montreal , however, the May 2013 Order could not later be varied on the basis of a new issued before the Court. [ 43 ] Conversely, I find the facts and basis upon which Laasch ABQB was determined to be distinguishable from the case before me. First, Laasch ABQB dealt with the ability of a party to amend pleadings, not to vary an order. Second, Graesser J specifically held that the facts of the debt action were known and could have been argued originally as part of the registration action.

In the case at bar, the facts in issue were not known nor could they have been adjudicated before Master Laycock at the time of the May 2013 Order. The mistake only became known after the May 2013 Order was entered; it was not a matter in the original foreclosure proceedings. Finally, in Laasch ABQB , the failure to determine entitlement did not arise from a mistake by the courts or by the parties. Conversely, a defining

fact of the case at bar is that counsel made a mistake. [44] As such, I find that the May 2013 Order is final. As previously mentioned, the purpose behind the functus doctrine is toprovide finality to proceedings. Courts cannot act as quasi-appellate courts, denying litigants a stable base of appeal. An error of counselin these circumstances is not a situation that merits an exception to this principle. The mistake in this case was fully within LBL’s abilityto discover. E. Findings on the Functus Issue [45] The May 2013 Order is a final order that cannot be varied.

Master Laycock did not err in determining that he was functus. Asrules 9.14 and 9.15(4) do not apply, Master Laycock correctly dismissed the application to revisit the May 2013 Order. VI. Issue 2: Should the Court extend the time to appealMaster Laycock’s May 2013 Order forpayment of the balance of the proceeds to the Kowals? [46] The Appellant also appeals Master Laycock’s May 2013 Order. There is first a preliminary issue of whether an extension fortime to appeal should be granted. A.

The Law on Granting Extensions of Time to Appeal [47] The Appellant has applied for an extension of time to appeal the May 2013 Order pursuant to rule 13.5(2) of the Rules. [48] Pursuant to rule 6.14(2) of the Rules, an appellant must file and serve its notice of appeal within 10 days after the judgment ororder is entered and served. First Calgary had until June 10, 2013 to file its notice of appeal. The notice of appeal, however, was not fileduntil September 13, 2013.

This is a delay of over three months. [49] In Alberta, Cairns v Cairns, (AB CA), [1931] 4 DLR 819 [Cairns] is the leading authority for grantingextensions of time to appeal.

McGillavray JA held that granting an extension of time to appeal ultimately rested on one principle: “Iknow of no rule other than this, that the Court has power to give the special leave... if justice requires that leave should be given” (In reManchester Economic Bldg Soc, (1883) 24 Ch D 488 at 497 cited in Cairns at para 45). [50] To help determine what “justice requires,” McGillivray JA also outlined four factors courts should consider in applications toextend the time to appeal.

For the court to grant an extension, it is incumbent on the appellant: 1) To show a bona-fide intention to appeal while the right of appeal existed, and that the failure to appeal was by reason of some veryspecial circumstance which excuses or justifies this failure; 2) To account for the delay and to show that the other side was not so seriously prejudiced thereby as to make it unjust to disturb thejudgment; 3) To show that it has not taken the benefits of the judgment from which it is seeking to appeal; and 4) To establish their appeal has a reasonable chance of success, if allowed to prosecute the appeal.

Cairns at paras 35-39. [51] McGillivray JA also pointed out that there is a “heavy burden” on the appellant to prove these factors: the person who has ajudgment “has a vested interest in that judgment and in the benefits that may flow from it, an interest that will not be lightly set aside”(ibid at paras 21, 34). [52] Recent case law supports the position that the court has the ability to grant an extension even if all of these factors are notstrictly met. The courts have emphasized their discretion in the application of this test.

For instance, in Royal Bank v Morin, (1977) 1977ALTASCAD 209 , 6 AR 341 (ABSC [AD]), the Alberta Supreme Court [Appellate Division] held that failure to comply withany of the four Cairns factors is not fatal to an application for extension of time to appeal—the inquiry rather relies on whether there are“special circumstances entitling the applicant to relief” (ibid at para 7). [53] Later, in Higdon v Smoky Lake General, 1983 ABCA 331 , [1983] 4 DLR (4th) 175 (ABCA) [Higdon], the AlbertaCourt of Appeal wrote that judges should consider the Cairns requirements in every case, but courts still “retain the unfettered discretionto extend the time for appealing if the justice of the situation so requires” (ibid at para 16). [54] In Independent Acceptance Corp v Hautz, 2008 ABQB 619, the Court wrote that the recent case law “suggests that theAlberta Court of Appeal and Court of Queen’s Bench have relaxed the requirements set out in Cairns; the ultimate decision as to whetheran extension will be granted... ‘is basically on the Court's consideration of the interests of justice’” (ibid at para 34 citing Strilets v VicomMultimedia Inc, 2000 ABQB 616 at para 46).

This was most recently reiterated in Cowling v Carpenter, 2014 ABQB 460 at para 91,where the Court of Queen’s Bench advised against an “overly technical approach to the Rules.” [55] Therefore, upon an application for an extension of time to appeal, the court should first consider the Cairns factors. Anyfindings made on these factors, however, may not be determinative. The court retains discretion in granting or dismissing the application

based on an assessment of what justice requires. B. The Cairns Factors

i) Demonstrating a Bona-Fide Intention to Appeal when the Right Existed and Special Circumstances Excusing the Failure to Appeal [ 56 ] To satisfy this factor, the Appellant must demonstrate both that it had an ongoing intention to appeal, and that the delay can be explained by special circumstances. [ 57 ] A determination on this factor is generally straightforward: either the applicant intended to appeal, or it did not.

In this case, the Appellant concedes in its brief at para 21 that there is a lack of “ongoing intention to appeal given the conscious decision not to appeal and to instead seek an order for the return of the tax arrears.” [ 58 ] The Appellant, however, relies upon Higdon, where the Court found that this factor of the Cairns test was met despite the fact that the applicant at one point actively decided against appealing.

That Court based its findings on the fact that the applicant took “prompt steps although not by way of appeal, to be relieved of the effect of that decision” ( Higdon at para 20 ). [ 59 ] Based on the Court’s analysis in Higdon , I may have been persuaded that there is sufficient evidence to establish that LBL’s actions show the necessary intent to challenge the May 2013 Order. The day after it discovered its error, LBL filed an Application to Pay Monies Out of Court, not realizing the monies had already been paid out to the Kowals.

Later that day, LBL gave the Kowals’ counsel notice that it was seeking the return of the tax arrears. This notice was within the appeal period. Over the following months, LBL vigorously continued to pursue the return of said arrears. LBL decided to pursue alternative measures to contest the May 2013 Order, rather than to immediately appeal, which per Higdon is consistent with the spirit of this factor.

Whether this is sufficient to meet the first factor of the Cairns test, however, need not be determined here, as the Appellant fails in satisfying this factor on other grounds. [ 60 ] In this case, there is an incongruity between who had the intention to protest the order and who had the right. First Calgary always had the right to appeal. It was LBL, however, who tried to recover the taxes from the Kowals and who appeared before Master Laycock in the application to revise his May 2013 Order. LBL was the one who took immediate steps to undo the mistake once it was discovered.

LBL, however, only received authorization to do so from First Calgary orally on September 12, 2013, well after the appeal period had passed. This was followed on September 25, 2013, with a written agreement whereby First Calgary assigned its rights to appeal to LBL and authorized LBL to act on its behalf in the appeal. On the evidence before me, I am not satisfied that First Calgary was even aware of the need or right to appeal during the appeal period, let alone that it formed any intention to do so.

I find as a fact that it did not have the intent to appeal prior to the end of the appeal period. [ 61 ] This incongruity is similar to that in RIC New Brunswick Inc v Telecommunications Research Laboratories , 2010 ABCA 75 [ RIC ]. In RIC , the appellant, 1460518 Alberta Ltd., claimed that it purchased the receiver’s interest in the debtor’s rights, and thereby was assigned those interests. 1460518 Alberta Ltd. argued that these assigned rights demonstrated its continuous intent to appeal. The receiver, however, never formed the intent to appeal and even decided against appealing.

Côté JA held that 1460518 Alberta Ltd. could not rely upon the assignment of the rights of someone who never had the intent to appeal: “the right and intent [to appeal] must co-exist” ( ibid at para 13). [ 62 ] LBL claims that it has standing and the right to appeal because Master Hanebury’s orders actually charged LBL (not First Calgary) with the responsibility of paying the outstanding taxes, and because it obtained an assignment of rights from First Calgary to pursue these appeals.

The Kowals claim that LBL is not a party in this appeal, thus it never had the right to appeal, and it is thereby unable to satisfy this Cairns factor. [ 63 ] These arguments regarding standing are irrelevant to my analysis on this factor. Whether LBL has standing or not, the fact remains: the actual Appellant, First Calgary, cannot show a continuous intention to appeal. [ 64 ] First Calgary is the only listed appellant in the case before me. Consequently, First Calgary is the party that is asking for the extension of time to appeal.

I must look to First Calgary’s actions to determine whether it had the intent to appeal during the appeal period prior to any assignment to LBL of such rights. [ 65 ] Conversely, LBL is not listed as an appellant in this action. There is no suggestion that LBL assigned its rights in this case, if any, to First Calgary. There is equally no suggestion that First Calgary authorized LBL to undertake to recover the outstanding taxes during the appeal period. First Calgary authorized LBL to file the Notices of Appeal, however, that was after the appeal period had expired.

Typically, it is understood that the actions of counsel are taken on behalf of its client. In this case, however, where counsel’s and client’s interests are not necessarily aligned, I am unable to make such a finding. I find that LBL’s actions were not undertaken on behalf of First Calgary during the appeal period, although LBL was acting on First Calgary’s instructions in September, after the appeal period was over. LBL failed to seek authorization for its actions from its client during the appeal period. [ 66 ] Therefore, I find the right and intent did not co-exist in this case.

First Calgary had the right to appeal, but not the intention. As the party with the onus of proving this element, the Appellant First Calgary cannot show a bona-fide intention to appeal when the right existed. [ 67 ] While Alberta courts of late have pointed to the flexibility required in any Cairns analysis, I still cannot find that this factor has been met. As stated by Côté JA in RIC : “I am sorry, but I am having trouble plugging the one extension cord into the other extension cord. I just do not think that the two plug together here” ( RIC at para 13 ).

Similarly, the right and the intent do not “plug together” in this case. Furthermore, there is no equitable basis in this case would justify finding otherwise. ii) Accounting for the Delay and Demonstrating a Lack of Prejudice

[68] It is also incumbent on an appellant to account for the delay and “to show that the other side was not so seriously prejudicedthereby as to make it unjust, having regard to the position of both parties, to disturb the judgment” (Cairns at para 37). [69] In this case, the delay was due to the fact that the Appellant was pursuing alternative means of challenging the order. Thisstrategy led to a delay was over three months.

This is not a very short delay of “only a day or so”, where the courts have held that anapplicant does not need to prove an absence of prejudice (Cascade Development Corp v Red Deer College, [1991] 115 AR 325 (ABCA)at 1). [70] In evaluating whether there is prejudice, the court is not considering any potential prejudice that might be suffered by therespondent should leave to appeal be granted. The question is centred on any prejudice which resulted from the delay in filing the noticeto appeal (see Grotski v Bank of Montreal (1991), 1992 ABCA 4 , 120 AR 149 (ABCA) at para 6).

To illustrate, in Frog LakeFirst Nation v Alberta (Energy and Utilities Board), 2003 ABCA 269 at para 24, Wittmann JA (as he then served) noted that anapplication to extend the time to appeal is different from an application for stay of a decision: “Therefore, the question of prejudice is anyprejudice which resulted or would result from the delay in bringing the leave application, not prejudice that might be suffered by anyparty should leave to appeal be granted...” [71] Moreover, from case law, a finding that there is ‘prejudice’ often requires something more than the delay itself.

For instance,in RIC, Côté JA found that the respondents would be prejudiced as they had already leased the contested land to other people. Prejudiceinvolving ‘mere’ time and money can be remedied by the appellate courts (see Schmidt v Schmidt, (MB CA), [1987]48 Man R (2d) 158 (Man CA) at para 7). In the case of extremely lengthy proceedings, however, it appears that courts are more likely toreject the appellant’s arguments and find that there is prejudice due to the passing of time.

For instance, in International Marble & StoneCo v Adams Estate, [1994] BCWLD 2515 (BCCA) [International Marble], the Court found that, the respondents would suffer injusticeand prejudice if the 16-year long litigation continued. [72] While the Kowals may have been prejudiced due to LBL’s error in not paying the taxes, there is insufficient evidence that theKowals have experienced prejudice from the late filing of the Appellant’s Notice to Appeal. Here, a three month delay is on the longerend of the spectrum, but any prejudice arising from this delay is not as certain as in the case of International Marble.

The cost to theKowals in terms of time and money can be remedied by an appellate court. Any inconvenience the Kowals may experience from thedelay does not rise to the level of ‘prejudice’ as contemplated in the wording of this Cairns factor. The Appellant has satisfied this factorof the Cairns test. [73] The Kowals have further argued that they would suffer irreparable prejudice if the tax error was remedied at this pointbecause they could have pursued a different litigation strategy if they had been aware of LBL’s mistake.

This prejudice may be relevantto the appeal itself, however, it is not relevant to the current inquiry into this factor. iii) Taking the Benefit of the Judgment [74] This criterion is not contested by either party.

The Appellant has not taken benefit of the judgment; this factor is satisfied. iv) Establishing that Their Appeal has a Reasonable Prospect of Success [75] The Court in Cairns also found that it was “incumbent on the applicant to show that he had a reasonable chance of success ifallowed to commence and prosecute the appeal” (Cairns at para 39). [76] The Appellant claims that, if Master Laycock had known about the failure to pay the tax arrears prior to issuing his May 2013Order, he would have ordered that the overpayment be returned to LBL so that it could pay the tax arrears.

The Appellant thus seeks toadmit this evidence upon appeal. This additional evidence, the Appellant claims, would suggest a reasonable prospect of success for itsappeal, meeting the fourth Cairns requirement. [77] The Appellant claims that this new evidence is relevant and material, and is thus appropriate to admit on appeal, pursuant torule 6.14(3). Rule 6.14(3) states: 6.14 Appeal from Master’s Judgment or Order

(3) An appeal from a master’s judgment or order is an appeal on the record of proceedings before the master and may also be based onadditional evidence that is, in the opinion of the judge hearing the appeal, relevant and material. [78] The Appellant relies upon Bahcheli v Yorkton Securities Inc, 2012 ABCA 166, where the Alberta Court of Appeal found thatrule 6.14(3) granted the court broad authority to admit new evidence on appeal from a Master.

The test for relevance and materialityunder rule 6.14(3) has since been described as “a very lax test” (Boyd v Cook, 2013 ABCA 266 at para 5). “Most relevant evidencewould appear to meet that test” (William A Stevenson & Jean E Côté, Alberta Civil Procedure Handbook (Edmonton: Jurileber, 2013-2014) vol 1 at 6-49). [79] The new evidence in this case could help to establish the Appellant’s claim that the May 2013 Order should be reversed.

Assuch, it meets the relatively low threshold of being relevant and material. [80] On the basis of this fresh evidence, it appears likely that the Appellants would have a reasonable prospect of success onappeal. It is at least possible that Master Laycock would not have ordered the full disbursement of the funds from court had he knownthat LBL had not paid the tax arrears. This factor of the Cairns test is satisfied. C. The Overarching Interests of Justice

[ 81 ] I have found that the Appellant has only met three of the four Cairns requirements, and thus its application fails. I must, however, also consider the general rule as articulated in Cairns and subsequent case law: does justice require that leave be given? In this case, I find that it does not. [ 82 ] Similar to the reasons described in my analysis on rule 9.15(4), I am not persuaded on policy or other grounds that justice dictates an extension of the time to appeal in this case. [ 83 ] In RIC , Côté JA explained how he came to the decision against granting an extension of time to appeal.

In that case, counsel for the appellant strategically or mistakenly chose to have only one appellant file a notice to appeal instead of both impacted parties. Côté JA noted that their circumstances did not merit an extension of time to appeal: [This is not] a situation in which someone was misled, or had no reasonable way of finding out what was going on, or was hospitalized at the last moment, and simply could not do anything. This is a situation where decisions were taken on the appellant’s side by counsel, which decisions in retrospect may not have been wise.

RIC at para 3 [ 84 ] The same reasoning applies to the case at bar. LBL made mistakes that were within its power to prevent and correct—it failed to pay the tax arrears and subsequently failed to seek authorization from its client for LBL’s actions during the appeal period. This is not a situation where justice or equity require the court to intervene and allow the extension of time to appeal. D. Conclusion on Extension of Time to Appeal [ 85 ] The Appellant is not granted an extension of time to appeal. VII.

Issue 3: If granted the extension of time, does the Appellant succeed in appealing the Master’s May 15, 2013 decision? [ 86 ] As I have determined that the extension for time to appeal will not be granted, I will not make a finding regarding whether the appeal should be allowed. VIII. Costs [ 87 ] If the parties cannot agree on costs, they may apply within 60 days of this decision to speak to costs. Heard on the 10 day of March, 2014. Dated at the City of Calgary, Alberta this 30 day of December, 2014. Corina Dario J.C.Q.B.A. Appearances: R. Van Dorp for the Applicant/appellant M. Hoornaert for the Respondent