Jabneel Development Inc v. Construction Jabneel Inc, 2016 ABQB 161

Court of Queen ’ s Bench of Alberta Citation: Jabneel Development Inc v Lamont (Town), 2016 ABQB 161 Date: 20160317 Docket: 1003 11076 Registry: Edmonton Between: Jabneel Development Inc and Construction Jabneel Inc Respondents (Plaintiffs/Defendants by Counterclaim) - and - The Town of Lamont Appellant (Defendant/Plaintiff by Counterclaim) - and - Tom Miller also known as Thomas George Miller Not a Party to This Appeal (Defendant) _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice K.G. Nielsen _______________________________________________________ I. Introduction

[ 1 ] Jabneel Development Inc (Jabneel) sought a Master’s order providing, inter alia , that the Town of Lamont (Lamont) return the sum of $406,500, being monies pertaining to a Letter of Credit provided to Lamont by or on behalf of Jabneel. [ 2 ] The Master ( 2015 ABQB 488 ) directed that $100,000 of the $406,500 should continue to be held by Lamont and that the balance should be returned to Jabneel, along with accumulated interest. [ 3 ] Lamont appeals that decision. II.

Background [ 4 ] Jabneel and Lamont entered into Development Agreements and Master Sale Agreements with respect to the development and sale of residential lands in relation to three parcels of land within the Town of Lamont known as the Edna Lands, the Westerly Lands and the Northerly Lands (collectively the Agreements). [ 5 ] Each of the Development Agreements provided that security be provided to Lamont to secure Jabneel’s obligations pursuant to the Development Agreements.

Article 22.12 of the Edna Development Agreement provided that in the event that Lamont called upon the security, Lamont may, at its option and discretion, use any of the security funds thereby obtained in any manner that Lamont deems fit to discharge the obligations of Jabneel. As well,

Article 6.1 of the Edna Master Sale Agreement provided that upon the occurrence of an event of default, Lamont may, at its sole option and without prejudice to or restriction of the rights and remedies it may have, elect to terminate the Agreement, and all monies paid by Jabneel in that case shall be forfeited to Lamont. [ 6 ] Lamont received a Letter of Credit in the amount of $406,500 (the Letter of Credit) in relation to the Development Agreement with respect to the Edna Lands. The Letter of Credit was provided to Lamont by Pascal Terjanian, a 50% shareholder in Jabneel.

Lamont was designated as the beneficiary in the Letter of Credit. It was provided to Lamont in late 2007 and had an expiry date of November 19, 2008. The Letter of Credit provided that it would be deemed to be automatically extended without amendment for one year unless 30 days prior to November 19, 2008, the issuer of the Letter of Credit, Canadian Imperial Bank of Commerce (CIBC), notified Lamont that the Letter of Credit would not be renewed. [ 7 ] On October 14, 2008, CIBC advised Lamont that the Letter of Credit would not be renewed. No subsequent replacement security was provided.

On November 6, 2008, Lamont demanded the sum of $406,500 being the full amount of the Letter of Credit. These funds were paid by CIBC to Lamont and continue to be held by Lamont. [ 8 ] In June 2009, Lamont sent correspondence addressed to Jabneel listing various defaults alleged in relation to Jabneel’s obligations pursuant to the Development Agreement and the Master Sale Agreement in relation to the Edna Lands.

As a result of Jabneel failing to remedy such defaults, Lamont, on September 17, 2009, sent further correspondence terminating both the Development Agreement and the Master Sale Agreement with respect to the Edna Lands and reserving its right to claim from Jabneel any and all damages it suffered as well as costs incurred.

In the same letter, Lamont advised Jabneel that Lamont considered the acts of Jabneel to be an abandonment of Jabneel’s obligations pursuant to both the Development Agreement and the Master Sale Agreement and that Lamont was “essentially accepting the repudiation by Jabneel” of the Agreements. [ 9 ] Lamont terminated the Development Agreements and the Master Sale Agreements in relation to each of the Northerly Lands and the Westerly Lands on the basis that Jabneel had failed to commence construction on the said lands in accordance with the timelines set out in those Agreements.

In terminating each of those Agreements, Lamont reserved any rights or remedies it had against Jabneel. [ 10 ] Litigation has ensued between Jabneel, Lamont and the Chief Administrative Officer of Lamont at the time, Tom Miller. In addition to seeking the return of the proceeds of the Letter of Credit, Jabneel seeks, inter alia , damages in the amount of $120 million and punitive damages in the amount of $5 million.

Lamont has counterclaimed for, inter alia , damages in the amount of $1 million, or alternatively, set off against any amounts awarded to Jabneel, in relation to costs incurred by Lamont arising from the breaches or defaults by Jabneel of the Development Agreements and the Master Sale Agreements. [ 11 ] In its Amended Statement of Claim, Jabneel claims that Lamont was negligent and breached the Agreements by, inter alia , wrongfully obtaining and withholding Jabneel’s $406,500 security and falsely and improperly accusing Jabneel of being in breach of the Agreements (subparagraphs 14(

i) and (j)). In the prayer for relief, it claims an order directing that the security in the amount of $406,500 be returned to it. Jabneel also seeks specific performance by way of a declaration that the Agreements remain in full force and effect. [ 12 ] Lands which were the subject of the Agreements, including the Edna Lands, were encumbered by a caveat filed by Jabneel during the litigation until the summer of 2014. III. Evidence [ 13 ] In response to Jabneel’s Application before the Master for release of the $406,500, Lamont provided an Affidavit of Bob Hanewich sworn January 27, 2015. Mr.

Hanewich was retained by Lamont to assist it in relation to the construction of municipal improvements undertaken by Jabneel. [ 14 ] The Edna Lands were developed in two separate parcels referred to as “Edna 3A” and “Edna 3B”. Mr. Hanewich deposes that work was undertaken by Jabneel on the Edna 3B parcel. This work has not yet been inspected and the state of completion of that work or the adequacy of same is unknown. Mr.

Hanewich estimates that the cost of inspecting this work would be approximately $5,000 and that the costs for addressing the state of the work could be in the range of approximately $25,000 to $50,000 if the work needs to be remedied or removed. [ 15 ] The development of the lands in the Edna 3A parcel included the construction of a storm water pond and drainage system.

Jabneel had commenced work on the storm water pond. Lamont takes the position that Jabneel was responsible for the design and construction of the storm water drainage system. Jabneel disputes that the design and construction of the storm water drainage system was its obligation. Mr. Hanewich estimates that the cost in relation to engineering and completing the construction of the storm water pond could be as high as $450,000.

This is exclusive of any costs related to a lift station which Lamont concedes was not the responsibility of Jabneel. [ 16 ] In response to the Application before the Master, Lamont also filed Affidavits of Bill Skinner, Mayor of Lamont, sworn January 21, 2014 and September 9, 2014 and an Affidavit of Sandi Maschmeyer, Chief Administrative Officer of Lamont, sworn January 22, 2015. In those Affidavits, Mr. Skinner and Ms.

Maschmeyer depose to costs in relation to surveying the Edna Lands, work undertaken by Lamont on the drainage ditch in the Edna 3A parcel, removing materials abandoned by Jabneel, loading, hauling and levelling soils, demolishing a basement foundation and backfilling that hole, all in the Edna Lands, and legal fees. The costs in relation to work carried out on the Edna Lands total approximately $57,000 and legal costs on a solicitor and client basis total approximately $265,000. [ 17 ] In support of this Appeal, Lamont provided a further Affidavit of Sandi Maschmeyer sworn November 5, 2015.

Rule 6.14(3) , Alberta Rules of Court , Alta Reg 124/2010 provides that an appeal from a decision of a Master is on the record and may also be based on additional evidence that is “in the opinion of the judge hearing the appeal, relevant and material”. In argument, counsel for Jabneel took no issue with this Affidavit being considered by me on this appeal. I consider the further Affidavit to be relevant and material. [ 18 ] In her November 5, 2015 Affidavit, Ms. Maschmeyer deposed to the following:

a) due to caveats filed by Jabneel in 2008, which were not removed until the summer of 2014, no development of the subject lands has taken place;

b) there has been minimal interest in the lands from private developers;

c) Lamont does not expect that a private developer will be willing to incur the cost of completing the storm water drainage system in the Edna 3A parcel, nor will a private developer wish to proceed with development in the Edna 3B parcel, if such a developer would be obliged to incur the cost of inspecting the improvements constructed by Jabneel in the Edna 3B parcel and correcting any deficiencies in same; and

d) in August 2015, Lamont received a Garnishee Summons from McGregor Construction

(2000) Ltd in the amount of $89,787.06 in respect of a judgment obtained by McGregor Construction

(2000) Ltd. against Jabneel. [ 19 ] In argument on this Appeal, counsel for Jabneel conceded that Jabneel is insolvent. IV.

Reasons of the Master [ 20 ] Jabneel applied before the Master for a declaration that Lamont had wrongfully converted, trespassed, wrongfully detained, or unjustly enriched itself by seizing and maintaining control over $406,500 pertaining to the Letter of Credit. [ 21 ] The Master observed that the alleged municipal improvement deficiencies would be the subject of expert evidence, the costs of rectifying any deficiencies have not yet been quantified or ruled upon by a court, and this part of the dispute would almost certainly require a trial, likely sometime in the distant future.

He further observed that there was also a question about whether Lamont had any obligation to do any work on the parts of the development that were never started. [ 22 ] The Master characterized the application as one for the return of security. He noted that there was no formal cross-application to attach the funds under the Civil Enforcement Act , RSA 2000, c C-15 pending resolution of the claim and counterclaim, nor any application for security for costs for which Lamont would bear the burden. [ 23 ] The Master considered

Article 6.1 in the Edna Master Sale Agreement. He opined that the $406,500 might be a deposit against performance or liquidated damages. He found that the facts plainly indicated that the $406,500 was the subject of a penalty clause, held that there was no genuine pre-estimate of damages and $406,500 for a builder’s lien is grossly disproportionate to any conceivable loss or exposure. He further opined that if the Letter of Credit were to be considered as a deposit against performance, the question was whether relief from forfeiture was appropriate. He held that regardless of the characterization of

Article 6.1, the overriding consideration is whether the parties should be held to the strict terms of their bargain. He stated that the relevant clause is not immune from review, and there is no guarantee it will be interpreted as Lamont wishes. He further commented that once the Master Sale Agreement was terminated, the clause is of no continuing force or effect, and presumed that this would be on the basis that the $406,500 is forfeited to Lamont as liquidated damages.

He stated that in many cases, a clause such as this would constitute a waiver or release of further claims, noting that Lamont had sued for a sum in excess of the $406,500. [ 24 ] The Master determined that the question before him was whether it was appropriate that the entire amount be forfeit (or attached) pending trial while also preserving a right to claim damages. He stated: 27 The Town also takes the position that it can essentially attach these funds while it takes its time to conclude its damages claims. An attachment under the Civil Enforcement Act , RSA 2000, c.

C-15, would typically be time limited. 28 As noted, there is no guarantee that a Court will side with the Town's

interpretation. The only issue for this application is whether I should find for it on an interim basis, such that it is entitled to keep the $406,500 plus interest and continue to assert a claim for more while the matter heads towards trial. The real question is whether it is appropriate that the entire amount be forfeit (or attached) pending trial while also preserving a right to claim damages. 29 As things now stand, only some of the claims have been properly quantified to any degree. These claims are the expenses related to

discharging the various liens and encumbrances. The Town was awarded costs at the last application. There does not seem to be any serious dispute about some of the remedial work (approximately $15,000.00) relating to municipal improvements, or health and safety issues. 30 Notwithstanding the Town's actions and its position with respect to clause 6.1, clause 22.10 of the Development Agreement did allow the Town to call a letter of credit. Clause 22.12 also allows the Town to use funds to discharge the contractors' obligations.

There are several instances of the Town having done so for which it seeks, but has not recovered, compensation (as indicated above). Disposition 31 In my view, the figure of $100,000.00 should be held back pending the determination and assessment of costs arising from 2014 ABQB 328 and the costs of dealing with the lien claims and other encumbrances, together with any expenditure on municipal improvements or remedial action that is not in dispute; such as health and safety related expenditures. A separate application may have to be scheduled to determine the appropriate scale of costs for the foregoing.

If the parties cannot agree on an amount for the remedial work on the first stage of the Edna Development after the contractor left the site, these matters may have to proceed to assessment. The balance of the funds, together with accumulated interest should be returned to the Applicant. The parties may wish to consider timing this to correspond with the maturity of the GIC. The remaining issues are to proceed to trial. V. Positions of the Parties A.

Lamont [ 25 ] Lamont argues that it was permitted under the relevant Agreements to draw upon the Letter of Credit which was expiring and was not being renewed, and that it is entitled to use the security in the manner that it deems fit to address the defaults and obligations of Jabneel. [ 26 ] Lamont submits that Jabneel essentially applied for a

summary and final determination prior to trial of its right to recover the security monies taken and held by Lamont. It submits that the onus was on Jabneel to prove that Lamont’s position was without merit, in other words that Jabneel’s position is unassailable. [ 27 ] Lamont argues that the Master did not properly apply the test for

summary judgment and erred in granting partial

summary judgment. There are issues to be decided at trial and Lamont has put forward evidence that there are potential damages in excess of the $406,500. If the security is returned to Jabneel without a full hearing on the merits and Lamont is successful at the trial, Lamont will be without security for its claims and will be unable to recover any damages awarded, as Jabneel is now insolvent. [ 28 ] Lamont further submits that it is entitled to set off in the context of the overall litigation, and given the close connection of all of the claims, it would be premature to determine issues in a

summary manner when there are clearly triable issues. [ 29 ] Lamont takes the position that the Jabneel caveat, which encumbered all of the lands for many years, prevented Lamont from being able to proceed with development, and Lamont has yet to address municipal improvements completed, partially completed or not completed by Jabneel in relation to the Edna Lands. [ 30 ] Further, Lamont was obliged, in its demand to CIBC to obtain the Letter of Credit monies, to provide that it would release to Pascal Terjanian any amounts it did not require. Mr. Terjanian is not a party to this litigation. Mr.

Terjanian has made demands for return of the monies to him. Lamont does not agree that unused security monies would be returnable to Jabneel. [ 31 ] Lamont notes that Jabneel in its Amended Statement of Claim seeks specific performance by way of a declaration that the Agreements remain in full force and effect, which would require the funds to be posted in order to complete the works. Therefore, its application for release of the funds is inconsistent with that claim. B. Jabneel [ 32 ] Jabneel argues that the Master properly applied the test for

summary judgment. The evidence accepted by the Master on the Application only supported retention of the sum of $100,000. The evidence as to any further damages was speculative and unproven and, therefore, did not support the position of Lamont that the whole of the security in the sum of $406,500 should be retained by it pending trial. [ 33 ] Jabneel takes the position that whether Jabneel defaulted in relation to the Edna Agreements is an issue to be tried, but it was not relevant and material to the equitable relief obtained from the Master.

Jabneel asserts that the passage of time since termination of the Agreements was critical to the Master granting relief in equity. VI. Issues [ 34 ] The Court must decide whether the Master erred in granting partial

summary judgment to Jabneel. VII. Standard of Review [ 35 ] The standard of review on an appeal from a Master to a Judge is correctness on all issues: Bahcheli v Yorkton Securities Inc ,

2012 ABCA 166, 524 AR 382. VIII. Alberta Rules of Court [36] Rule 7.3 of the Alberta Rules of Court provides: 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the followinggrounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) havebeen met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single andundivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by a referee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as the circumstancesrequire. IX. Test for

Summary Judgment [37] The Supreme Court of Canada recently considered the matter of

summary judgment in the context of the Ontario Rules ofCourt in Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87. The Court held that

summary judgment rules must be interpreted broadly,favouring proportionality and fair access to the affordable, timely and just adjudication of claims.

Summary judgment is appropriatewhere there is no genuine issue to be tried. The Court stated: 49 There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on amotion for

summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2)allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a justresult. [38] Our Court of Appeal has considered the matter of

summary judgment since the decision in Hryniak v Mauldin on severaloccasions. [39] In Access Mortgage Corporation

(2004) Ltd v Arres Capital Inc, 2014 ABCA 280, 584 AR 68, the Court of Appeal stated: 45 The principles which govern

summary judgment in Alberta after November 1, 2010 are distilled in Beier v. Proper CatConstruction, 2013 ABQB 351 , 564 A.R. 357, 373-78 (Q.B. 2013): ... [61] Rule 7.3 of the new Alberta Rules of Court allows a court to grant

summary judgment to a moving party if the nonmoving party'sposition is without merit. A party's position is without merit if the facts and law make the moving party's position unassailable andentitle it to the relief it seeks. A party's position is unassailable if it is so compelling that the likelihood of success is very high. ... [63] First, the moving party is entitled to

summary judgment if, as a plaintiff, it presents uncontroverted facts and law which entitle it tojudgment against the nonmoving party. The court must be satisfied that the plaintiff has presented uncontested facts which establish allthe essential elements of the action. ... ... 46 O'Hanlon Paving Ltd. v. Serengetti Developments Ltd., 2013 ABQB 428 , 91 Alta. L.R. (5th) 1, 16 (Q.B. 2013) explainswhy

summary judgment is a valuable option in the dispute resolution process: A

summary judgment protocol recognizes that it is not unjust to deny a plaintiff with a meritless claim or a defendant with a meritlessdefence access to all stages of the litigation process. A litigant whose claim or defence is so weak that its chance of succeeding is verylow, cannot reasonably expect the state to make available all parts of a publicly funded judicial process. ... Legislators in the United Kingdom, Canada and United States have introduced

summary judgment into their litigation model to ensurethat dispute resolution takes place at the earliest point in the litigation continuum where it is just to do so. A

summary judgment protocolpromotes expeditious dispute resolution and efficient use of private and public legal resources.

[ 40 ] In 776826 Alberta Ltd v Ostrowercha , 2015 ABCA 49 , 593 AR 391 , the Court of Appeal stated: 9 The governing test for

summary judgment in Alberta finds expression in Windsor v CPR , 2014 ABCA 108 at para 13 , 572 AR 317 ; Sherwood Steel Ltd v Odyssey Construction Inc. , 2014 ABCA 320 , at paras 7 to 8 , 59 CPC (7th) 22 ; Maxwell v Wal-Mart , 2014 ABCA 383 at para 12 ; W.P. and cases mentioned therein, inter alia . From the process perspective,

summary judgment can be given if a disposition that is fair and just to both parties can be made on the existing record by using that alternative method for adjudication: Hryniak v Mauldin , 2014 SCC 7 , [2014] 1 SCR 87 . 10 From the substantive perspective,

summary judgment can be granted if, in light of what that fair and just process reveals, there is no merit to the claim.

No "merit" means that, even assuming the accuracy of the position of the non-moving party as to any material and potentially decisive matters -- matters which would usually require ordinary forensic testing through a trial procedure with viva voce evidence and which could not be resolved through the fair and just alternative -- the non-moving party's position viewed in the round has no merit in law or in fact. 11 Stated another way, in order for the non-moving party's case to have merit, there must be a genuine issue of a potentially decisive material fact in the case which cannot be summarily found against the non-moving party on the record revealed by the "fair and just process".

The mere assertion of a position by the non-moving party in a pleading or otherwise, or the mere hope of the non-moving party that something will turn up at a trial, does not suffice.

The key is whether the circumstances require a [ sic ] viva voce evidence in order to properly resolve the case: see Canada v Lameman , 2008 SCC 14 at paras 10 to 11 , [2008] 1 SCR 372 . 12 The concept of "merit" in this respect is to be distinguished from the test for striking out pleadings under Rule 3.68 which involves deciding "whether there is any reasonable prospect that the claim will succeed, erring on the side of generosity in permitting novel claims to proceed.": compare Ernst v Alberta (Energy Resources Conservation Board) , 2014 ABCA 285 at paras 13 to 15 , 85 CELR (3d) 39 , under motion [2014] SCCA No 497 (QL). 13 As to the substantive aspect of the test, then, this Court has also put the test for

summary dismissal into the following terms in W.P. , at para. 26:

Summary judgment is therefore no longer to be denied solely on the basis that the evidence discloses a triable issue. The question is whether there is in fact any issue of "merit" that genuinely requires a trial, or conversely whether the claim or defence is so compelling that the likelihood it will succeed is very high such that it should be determined summarily: Windsor at para 16 ; Beier at paras 56, 59-68 and 70 . [ 41 ] Therefore, if a judge on a

summary judgment application can make the necessary findings of fact, is able to apply the law to the facts and the process is proportionate, more expeditious and less expensive than a trial,

summary judgment is appropriate. If a fair and just adjudication can be made in determining whether a claim has merit, it is appropriate for a court to consider

summary judgment. A party’s position is without merit if the facts and law make the moving party’s position unassailable. A party’s position is unassailable if it is so compelling that the likelihood of success is very high. The key is whether the circumstances require viva voce evidence in order to properly resolve the case. [ 42 ] Where the ultimate outcome of a case may depend on the

interpretation of some statute or document, or on some other issue of law that arises from undisputed facts, the test for

summary judgment is whether the issue of law can fairly be decided on the record before the court.

Unsettled or complex legal issues and those intertwined with the facts can necessitate a full trial to provide a proper foundation for the decision: Amack v Wishewan , 2015 ABCA 147 at para 35 , 24 Alta LR (6th) 44, Tottrup v Clearwater (Municipal District No 99) , 2006 ABCA 380 at para 11 , 401 AR 88. [ 43 ] In Sattva Capital Corp v Creston Moly Corp , 2014 SCC 53 , [2014] 2 SCR 633 , the Supreme Court abandoned the historical approach according to which the determination of the legal rights and obligations of the parties under a written contract was considered a question of law. The Court held that contractual

interpretation involves issues of mixed fact and law, as the court must apply the principles of contractual

interpretation to the words of the written contract, considered in light of the factual matrix of the contract. X. Analysis [ 44 ] The Master held that Lamont was entitled to call the Letter of Credit, and to use the funds to discharge Jabneel’s obligations. However, he dealt with the relatively narrow issue of equitable relief against forfeiture without considering the issue of entitlement to the $406,500 in the context of the litigation as a whole.

It seems he was concerned about the slow progress in the litigation. [ 45 ] The Master does appear to have been satisfied that, with respect to costs incurred by Lamont in “dealing with lien claims and other encumbrances, together with any expenditure on municipal improvements or remedial action that is not in dispute”, Lamont was entitled to look to the Letter of Credit to recover same.

The only other step required, with respect to these items, is quantification of the costs incurred by Lamont. [ 46 ] Lamont is, of course, seeking damages in relation to items other than costs of dealing with the lien claims and other encumbrances and expenditures on municipal improvements or remedial actions that are apparently not in dispute. As set out previously in these Reasons for Judgment, Mr.

Hanewich has deposed to costs in relation to remedial work on the Edna 3B parcel which could be in the order of $50,000 and work in relation to the storm water drainage system on the Edna 3A parcel which could be in the order of $450,000. Ms. Maschmeyer deposed to costs incurred by Lamont in relation to legal fees which are in the order of $265,000, to the fact that Lamont has received a garnishee summons from McGregor Construction

(2000) Ltd. and to the fact that there has been virtually no interest expressed in the development of any of the lands in question. The information in Ms. Maschmeyer’s most recent Affidavit was, of course, not before the Master when he made his decision. [ 47 ] The Master did recognize that the amounts sought by Lamont in relation to the alleged municipal improvement deficiencies

had not yet been quantified or ruled upon by the court, would be the subject of expert evidence and would require a trial. [ 48 ] In light of the evidence before the Master and his rulings as set out herein, in my view, it could not be said that Jabneel’s position is “ unassailable ”.

Jabneel’s position is not “so compelling that the likelihood of success is very high”. [ 49 ] As the Court of Appeal stated in 776826 Alberta Ltd v Ostrowercha , “the key is whether the circumstances require viva voce evidence in order to properly resolve the case”. [ 50 ] Although the matter was addressed as an application for relief from forfeiture, that issue is intertwined with many other issues arising in the litigation. The Court of Appeal has warned against deciding matters summarily on the face of a contract when other interrelated matters cannot be decided in a

summary way: Swan Group Inc v Bishop , 2013 ABCA 29 , 542 AR 134, Gallant v Farries , 2012 ABCA 98 , 522 AR 13. [ 51 ] The Master recognized that a trial is required with respect to both the issues of entitlement by Lamont pursuant to the Development Agreements and the Master Sale Agreements as well as the quantification of any damages to which Lamont is entitled. On this

summary judgment application, in my view, it is not possible to make the necessary findings of fact so as to proceed to a

summary judgment. [ 52 ] Further, given the evidence on this appeal, I do not believe that a fair and just adjudication can be made. Relief from forfeiture is an equitable remedy. Counsel for Jabneel conceded in argument on this Appeal that Jabneel is insolvent. If all funds in excess of the $100,000 directed by the Master to be held from the proceeds of the Letter of Credit are returned to Jabneel, and ultimately, a court determines that Lamont is entitled to damages up to or exceeding $406,500, Lamont would, in all likelihood, be unable to realize on any damages in excess of the $100,000 amount.

Therefore, while Lamont may have an entitlement to damages up to the total amount of the Letter of Credit, by having been directed to release the amount in excess of $100,000, Lamont’s position would have been irrevocably prejudiced. [ 53 ] Finally, it is not clear that the monies would be properly payable to Jabneel. Lamont was required in its demand to CIBC to stipulate that it would release any amounts not required to Pascal Terjanian, who is not a party to any of this litigation. Mr. Terjanian has made demands for return of the money to him, but he was not represented in the proceedings before the Master.

An order has now been granted providing that none of the funds shall be released to Jabneel without further order of the court so as to allow Mr. Terjanian an opportunity to make any application he wishes as to his entitlement to the funds. XI. Conclusion [ 54 ] I find that the Master erred in ordering release of monies in excess of $100,000 to Jabneel. Lamont is entitled to continue to hold the full amount of the Letter of Credit funds in the sum of $406,500 along with interest accumulated thereon.

Lamont shall hold the funds pending a determination of its entitlement to receive funds from the security posted by Jabneel and shall account for such funds. XII. Costs [ 55 ] The parties may speak to me within 30 days of the date of these Reasons for Judgment if they are otherwise unable to agree on costs, both on this appeal and below. Heard on the 12 th day of February, 2016. Dated at the City of Edmonton, Alberta this 17 th day of March, 2016. K.G. Nielsen J.C.Q.B.A.

Appearances: Daniel R Peskett Brownlee LLP for the Applicant The Town of Lamont Jonathan W McCully Sharek Logan & Van Leenen LLP for the for the Applicant The Town of Lamont Paul R Foisy Foisy Law Office for the Respondent Jabneel Development Inc