Mikkelsen v Truman Development Corporation, 2016 ABQB 23

Court of Queen’s Bench of Alberta Citation: Mikkelsen v Truman Development Corporation, 2016 ABQB 23 Date: 20160203 Docket: 1201 04099 Registry: Calgary Between: Wayne Mikkelsen, Colin Wade Mikkelsen, Meghen Anine Mikkelsen and Alana Denise Mikkelsen Plaintiffs/Defendants by Counterclaim - and - Truman Development Corporation Defendant/Plaintiff by Counterclaim _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice M.C.

Erb _______________________________________________________ [ 1 ] The issues in this litigation arise from a dispute between the owners of a family farm located near Langdon, Alberta, and a residential development corporation over whether a purported joint venture agreement (the “Agreement”) gave the developer an interest in the farmland and, if so, whether it was terminated by separate agreement. Overview

[ 2 ] Since the early 1970s, the Plaintiff, Wayne Mikkelsen has operated a family farm near Langdon that has been in his family for generations. Mr. Mikkelsen’s co-Plaintiffs are his three adult children. The land at issue is located on the north side of Glenmore Trail across the highway from Langdon (“the Langdon Land”). The Langdon Land is comprised of about 630 acres, just short of a full

section of land. In these reasons, the Langdon Land is referred to by quarter sections for ease of reference. In addition, Mr. Mikkelsen farmed land near the town of Chestermere (“the Chestermere Land”) which he was given to him by an uncle. The Chestermere Land also became of interest to the Defendant and a related corporate entity, Truman Homes

(1995) Inc. (“Truman Homes”). [ 3 ] Since January 2008, the four Plaintiffs have been the registered owners of the Langdon Land. Each now holds one quarter interest in each quarter section. At the time the Agreement was signed, Mr. Mikkelsen was the sole owner of the Langdon Land. [ 4 ] The Defendant and Plaintiff by Counterclaim, Truman Development Corporation (“Truman Development”), is a land developer operating in Chestermere, Springbank, High River and several other communities in the Municipal District of Rocky View as well as the City of Calgary.

Geojko (George) Trutina was, at all material times, the president and chief executive officer of Truman Development. Throughout the interactions between Mr. Mikkelsen and Truman Development, Mr. Trutina was its sole representative. [ 5 ] The Agreement which is subject to this litigation, contemplated development of the Langdon Land into a proposed subdivision upon annexation of the land to Langdon. [ 6 ] Later that year, a further document was signed that Mr. Mikkelsen says terminated any earlier agreement, if one was actually concluded. Mr.

Trutina disagrees on behalf of the Defendant and seeks specific performance, or in the alternative damages, regarding the Agreement he says is, and was intended to be, valid and enforceable. [ 7 ] This litigation arises primarily from interactions between Mr. Mikkelsen and Mr. Trutina leading up to and following the signing of the Agreement. [ 8 ] Specifically, the issues are these: (

i) Was a binding agreement concluded between the parties giving the Defendant an interest in the lands? If so, (ii) Was the Agreement terminated by further agreement between the parties? [ 9 ] The legal principles in contract law are not in dispute in these proceedings. Rather, the focus of the dispute is the application of those principles to the facts established by the evidence. Although the parties refer to the arrangements between them as being both in contract and as a joint venture, it is well established that a joint venture requires a contractual basis.

This Court, then, approaches the dispute between the parties simply on the basis of whether a valid and enforceable contract was agreed to between the parties. Position of the Plaintiffs [ 10 ] The Plaintiffs take the position that the Agreement signed on January 17, 2007 was not a binding contact because the parties did not intend to create one at that time; they did not reach consensus ad idem on essential terms; and the basic elements of contract were not met. They further state that the Defendant’s principal, Mr.

Trutina, misrepresented the true nature of the Agreement; that it was unfair, improvident and unconscionable; that the Plaintiffs did not receive their desired legal advice that Mr. Trutina was well aware they wanted; that there was an imbalance of bargaining power; and the Defendant took advantage of them. [ 11 ] They further say that all that was agreed to was a working arrangement.

They say that there was no intention to create a binding interest in the Langdon Land at that time, and if, in all the circumstances, it can be interpreted as a binding agreement, it was terminated by a further written agreement in December 2007. [ 12 ] The Plaintiffs seek a declaration that the Agreement is a nullity as well as an order removing all caveats from the Langdon Land titles that the Defendant caused to be filed.

Position of the Defendant [ 13 ] The Defendant seeks enforcement of the Agreement on the basis that all contractual requirements were met; that the Agreement is plain and unambiguous; that Mr. Mikkelsen and his wife, Wendy, made edits on the face of the Agreement that were negotiated; and that there was mutual consideration in place that imposed obligations and benefits on both parties.

The Defendant denies that there was any misrepresentation, unequal bargaining power, denial of legal representation or that the disputed Agreement was unfair, improvident or unconscionable. [ 14 ] The Defendant also disagrees that there was a valid termination agreement in December 2007 because there was no consideration for it.

The Defendant further states that the Plaintiffs are estopped from claiming the Agreement was terminated because a caveat on the land was discharged on the understanding that the Plaintiff, Wayne Mikkelsen, would cause his children, his co-Plaintiffs, to accept the Agreement. [ 15 ] In its counterclaim filed in these proceedings, the Defendant seeks specific performance of the Agreement or, in the alternative, damages of $38 million and recovery of land development costs it has expended.

Facts Admitted By the Parties [ 16 ] The parties filed a formal “Statement of Admitted Facts,” containing facts they agree on for the purposes of these

proceedings. That Statement is reproduced here with some editing regarding undisputed facts already referenced in these reasons but is otherwise verbatim: Wayne Mikkelsen (Mr. Mikkelsen) is a 66-year-old farmer. His son Colin is a veterinarian who lives in Kamloops, British Columbia. Mr. Mikkelsen’s daughters, Meghen and Alana, live with their respective families in homes located on the Langdon Land. Mr. Mikkelsen became the registered owner of the Langdon Land after his parents gave it to him. The Mikkelsen family homestead is located on Langdon Land and has a municipal address of 272070 Glenmore Trail.

The Langdon Land is approximately 630 acres in size (four ¼ sections) which is described in three separate titles. On or about January 4, 2008, Mr. Mikkelsen transferred the Langdon Land so that he and each of his three children now own one quarter interest in each quarter section. The Defendant, Truman Development an Alberta land developer, has carried on business in Alberta for approximately 24 years. Truman Development has completed land development projects in Chestermere, Springbank, High River and Calgary. George Trutina (Mr. Trutina) is the President of Truman Development. Mr.

Trutina is involved in all aspects of the business of Truman Development. Mr. Trutina, through his corporate entity, Truman Homes, purchased farmland from Mr. Mikkelsen and his wife Wendy (“Mrs. Mikkelsen”), which is located near the Town of Chestermere, in 1999 and 2002, and has been developed as Truman Development’s Rainbow Falls subdivision. On January 14, 2007, Truman Development offered to purchase Margaret Anne Whiteside’s (“Mrs. Whiteside”) land, which is described as the SW ¼ of

section 26, Township 23, Range 27, W4M (the “Whiteside Land”). It is located immediately east of the SE quarter

section of the Langdon Land. Mrs. Whiteside is Mr. Mikkelsen’s sister. Mr. Mikkelsen made Mr. Trutina aware that he was planning to rollover the Langdon Land to his children as part of his estate tax planning (“the Tax Rollover”) and Mr. Trutina agreed to accommodate the Tax Rollover. On January 17, 2007, Mr. Trutina went to Mr. Mikkelsen’s home on the Langdon Land and met with Mr. and Mrs. Mikkelsen for at least three hours. During that meeting, both Mr.

Mikkelsen and George Trutina signed two joint ventures: one relating to the development of the Langdon Land (“the Agreement” or “the Langdon Joint Venture Agreement”) and the other relating to the development of approximately 270 acres of land Mr. Mikkelsen owned near Chestermere (“the Chestermere Joint Venture Agreement”). At some point, George Trutina affixed the Truman Development corporate seal to both the Langdon Joint Venture Agreement and the Chestermere Joint Venture Agreement.

In the evening of January 17, 2007, there was a public open house meeting regarding the proposed annexation of approximately 6,740 acres of land west, south and east of the Town of Chestermere, which included the lands that are the subject of the Chestermere Joint Venture Agreement. Mrs. Whiteside accepted Truman Development’s offer to purchase her land on February 2, 2007, and on January 12, 2012, Truman Development became the registered owner of the Whiteside Land. Mr. and Mrs.

Mikkelsen attended at the law offices of John Getz on February 14, 2007 to re-sign the signature pages of both the Chestermere Joint Venture Agreement and the Langdon Joint Venture Agreement, and to complete a Consent of Spouse for Wendy Mikkelsen for the Langdon Joint Venture Agreement. The new signature pages were provided to Truman Development and Mr. Trutina resigned them for Truman Development and affixed the Truman Development corporate seal to the new signature pages. On or about July 5, 2007, Truman Development’s lawyer, Michael C.

Dunkley, signed the documents to register three caveats on the certificates of title for the Langdon Land claiming a “purchaser’s interest” in the Langdon Land on behalf of Truman Development “under and by virtue of an Interim Agreement dated the 17 th day of January, 2007 between David Wayne Mikkelsen, being the registered owner of the Lands as Vendor, and ourselves as Purchasers whereby the Vendor agreed to sell the Lands to the Purchasers on the terms and conditions contained in the said Agreement.” The caveats were registered as three separate instruments, being numbers 071 363 853 (registered against title to the SW ¼ section); 071 363 852 (registered against title to the NE and SE ¼ sections) and 071 363 849 (registered against title to the NW ¼ section) (the “Caveats”).

In December 2007, Mr. Mikkelsen asked Mr. Trutina to remove the Caveats from the Langdon Land to accommodate the Tax Rollover. In December 2007, Mr. Mikkelsen retained Fraser Milner Casgrain LLP to implement the Tax Rollover and to provide some advice regarding the Chestermere Joint Venture Agreement. On December 4, 2007, Kevin Scott, a lawyer with Fraser Milner Casgrain LLP, contacted Mr. Dunkley and asked to have the Caveats discharged from the Langdon Land. On December 5, 2007, Mr.

Dunkley responded as follows: “[o]ur client has suggested that if your clients will execute an assignment of the contract he would be willing to discharge the caveat and then re-register the caveat following execution of the assignment and registration of the transfer, but practically speaking this would likely not be of any assistance from the view point of Revenue Canada”.

In the beginning of December 2007, Mr. Mikkelsen and Mr. Trutina discussed issues arising from the Caveats being on the Langdon Land. On December 10, 2007, Mr. and Mrs. Mikkelsen met with Mr. Trutina, and Mr. Trutina signed a document which stated: At a meeting held on December 10, 2007 it was agreed, that the Joint Venture Agreement dated the 17 day of January 2007, cover those lands legally described on three titles, nos. 931 137 480 +19, 806 182 678, and 931 137 480 +9.

Consisting of approximately 630.883 acres, more or less, will be terminated as of this date and that the caveat in favor of Truman Development Corporation will be removed. On December 13, 2007, Mr. Dunkley sent a discharge of “the caveat for the Langdon property” on the trust condition “that concurrent with the use of the discharge, the agreement to which the caveat relates be assigned to the transferees, and that the transferees acknowledge the assignment, a fully executed copy of which is to be delivered to this office in due course.” A fully executed withdrawal of the caveat was enclosed with Mr.

Dunkley’s December 13, 2007 correspondence. On December 14, 2007, Mr. Mikkelsen signed a document transferring title to the Langdon Land to himself and each of his children, each with a 1/4 interest in all three titles that make up the Langdon Land. On December 18, 2007, Mr. Dunkley sent a letter to Kevin Scott deleting the trust condition under which the discharge of caveat for the Langdon Land was previously forwarded. On or about January 4, 2008, the Land Titles Registry registered the transfer of the Langdon Land to Mr. Mikkelsen and each of his children. On June 28, 2011, Mr.

Mikkelsen sent an email to Peter Trutina, Mr. Trutina’s son, asking that he pass a message on to Mr. Trutina concerning the removal of the Caveats and advising that “my lawyer is asking if I want him to proceed through the Courts to have them removed, a proposition I really did not want to pursue.” Thereafter, Mr. Mikkelsen sent another email and letter to Mr. Trutina dated August 17, 2011 raising issues with respect to both the Chestermere Joint Venture Agreement and asking “that you remove the caveat against the Langdon property as per our agreement.” Mr. Mikkelsen and Mr.

Trutina met in November 2011 and on December 1, 2011 to discuss the concern raised by Mr. Mikkelsen in his August 17, 2011 letter. On May 2, 2012, the Plaintiffs commenced this Action by way of an Originating Application seeking an Order directing the Registrar of Land Titles to discharge the Caveats. Truman Development retained Brown & Associates Planning Group (“B & A”) in 2007 to assist in the planning for the development of the Langdon Land, the Whiteside Land and the other lands owned by David and Ethel Jessey and Fred Johnson.

B & A prepared a concept plan for the Langdon Land in June, 2007 showing how those lands could be developed. In 2011, Truman Development retained Sweet Grass Consultants Ltd. to do a biophysical impact assessment on the Langdon Land and other lands, PHH ARC Environmental Ltd. to do a Phase 1 environmental site assessment of the Langdon Land and other lands, and entered into an agreement with Langdon Waterworks to participate in and pay for the preparation of a strategic servicing plan for the Langdon area which included the Langdon Land.

In October 2013, B & A prepared a Horizon Crossing Development Rationale document for the Langdon Land and Whiteside Land setting out a development rationale and a preliminary design concept for the Langdon Land and the Whiteside Land to Rocky View County in support of Rocky View County’s planning and development of the Langdon area structure plan. The Horizon Crossing development rationale included an updated land use concept plan for the Langdon Land and the Whiteside Land.

Truman Development has spent a total of $438,368.06 for work done in connection with the development of Horizon Crossing, which includes but is not limited to the Langdon Land , as of March 25, 2015 and continues to incur expenses relating to the development of the Langdon Land.

Summary of the Plaintiffs’ Evidence Wayne Mikkelsen [ 17 ] Mr. Mikkelsen’s first significant interaction with Mr. Trutina started in 1999 when he sold 150 acres of his Chestermere Land to Mr. Trutina’s company, Truman Homes for $20,000 per acre. Mrs. Mikkelsen sold another 80 acres of her own land at the same price in 2002. The first of the two transactions was handled by legal counsel and the second one, which was made on the same terms, was not. [ 18 ] The next significant interaction occurred in early 2005, when Mr. Trutina told Mr. Mikkelsen that Chestermere’s town council was considering annexing more land.

Although he had no substantial prior experience with complex land development, he described a working arrangement in which Mr. Trutina would pursue the annexation of the rest of his Chestermere land while Mr. Mikkelsen continued to farm it. [ 19 ] Mr. Mikkelsen sent a letter to the Chestermere town council indicating that Mr. Trutina had his permission to represent him in annexation discussions. The working arrangement allowed Mr. Trutina to pursue annexation of the Chestermere Land at his company’s cost. By this time, Mr. Trutina was pursuing land development through the Defendant, Truman Development.

The arrangement was that if the annexation proceeded and Mr. Mikkelsen decided to sell the Chestermere Land, Mr. Trutina would be given first opportunity to purchase it. If there was no annexation, Mr. Trutina would not purchase it and the land would simply continue to be farmed.

[ 20 ] On October 30, 2006, Mr. Trutina offered to buy a half interest in the Chestermere Land but Mr. Mikkelsen declined to accept it stating that he did not want to sell a half interest. At that time, Mr. Trutina raised the prospect of a joint venture for the Chestermere Land. Mr. Mikkelsen and his wife asked Mr. Trutina to “give us something to look at”. On January 17, 2007, when Mr. Trutina met with the Mikkelsens at their Langdon home. Mr. Mikkelsen said he and his wife were expecting Mr. Trutina to bring a proposal for the Chestermere Land.

He said the meeting opened with discussions about the Chestermere Land. However, Mr. Trutina changed the focus to the Langdon Land and produced a proposed joint venture agreement for development of that land. [ 21 ] Mr. Mikkelsen said that he had no intention of selling the Langdon Land because he was planning to roll it over to his children. [ 22 ] Mr. Mikkelsen’s sister, Anne Whiteside, owned adjacent land (“the Whiteside Land”) and David Jessey owned five quarter sections to the north. Mr. Mikkelsen said that Mr. Trutina stated that he was making a deal with Mrs. Whiteside for her land. Mr.

Mikkelsen acknowledged he knew something about his sister’s deal. [ 23 ] Mr. Mikkelsen testified that Mr. Trutina told him that he had to sign the Agreement because his sister’s deal “depended on it”. Mr. Trutina had indicated that he could do large scale planning with both the Langdon Land and the Whiteside Land. Mr. Mikkelsen stated that this was the first time he had heard about Mr. Trutina’s interest in developing his Langdon Land. [ 24 ] He told the Court that Mr. Trutina kept talking and talking. He said Mr. Trutina “overwhelmed us and we signed.” He said Mr.

Trutina “told us to cross out anything we didn’t like and to initial what we had marked so those parts would not show up in a later document”. [ 25 ] The Agreement

preamble refers to a payment of $10. Mr. Mikkelsen said that Mr. Trutina “has never paid us a nickel.” [ 26 ] It was Mr. Mikkelsen’s evidence that Mr. Trutina knew that the Agreement was to be a working arrangement along the lines of the earlier Chestermere development and if he decided to move forward with the development, a final agreement would be negotiated once the parties had legal advice. He said Mr. Trutina knew that the Mikkelsens wanted to transfer the Langdon Land to their children from the beginning. [ 27 ] After that, Mr. Trutina called and told them the document must be re-signed because Mrs.

Mikkelsen had witnessed Mr. Mikkelsen’s signature and a different witness was required. The Mikkelsens attended at the office of lawyer John Getz where the document was re-signed and a consent of spouse document was also executed. Mr. Mikkelsen said no legal advice was sought or given. The new signature pages were provided to Truman Development and Mr. Trutina re-signed them and apparently affixed Truman Development’s corporate seal to them. [ 28 ] On February 2, 2007, Truman Development purchased the Whiteside Land from Mr. Mikkelsen’s sister, comprising a quarter

section located immediately east of the Langdon Land. The Whiteside Land was important because it provided access to Langdon water and sewer lines. On January 12, 2012, Truman Development became the registered owner of the Whiteside Land. [ 29 ] When Mr. Mikkelsen received notice of the registration of the Caveats on the Langdon Land, he first thought it was an error because Mr. Trutina knew the land was to be rolled over to his children. He repeatedly asked Mr. Trutina to remove the Caveats. He sought legal advice in April 2007 and, after exchanges between counsel, he was told that Mr.

Trutina’s lawyer was resisting removing the Caveats. [ 30 ] He met with Mr. Trutina at Earl’s Restaurant in Calgary in early December to discuss the issue over the Caveats. Mr. Mikkelsen said that the meeting ended with Mr. Trutina agreeing to terminate the Agreement and to remove the Caveats. Mr. Trutina asked Mr. Mikkelsen to bring something for him to sign and indicated that there was “no problem”. Mr. Mikkelsen said that he agreed to revisit the Langdon Land deal after three years. [ 31 ] Mr. Mikkelsen told the Court that he and his wife met with Mr. Trutina for breakfast on December 10, 2007.

He presented Mr. Trutina with a short self-prepared agreement. It simply stated that Mr. Trutina agreed to terminate the Agreement for the Langdon Land and to remove the Caveats. Mr. Trutina, he said, read the short agreement and signed the document. Mr. Mikkelsen said he and his wife left that meeting believing the issue had been resolved and did not give it much thought for nearly three years. [ 32 ] On December 13, 2007, Mr. Mikkelsen’s lawyer informed him that Mr. Trutina’s lawyer had agreed to discharge the Caveats. [ 33 ] In early 2011, Mr.

Mikkelsen’s daughter, Meghen, attended a Langdon town hall meeting about land development that included both the Langdon Land and the Whiteside Land. [ 34 ] She told her father about it and Mr. Mikkelsen had the title pulled. He saw that Caveats were still on the Langdon Land. After demands for discharging them were not met, the Plaintiffs filed their Statement of Claim commencing this litigation. [ 35 ] In cross examination, Mr. Mikkelsen said the Agreement was intended to allow Mr. Trutina to show people at an open house later that day that he had some authority to speak on Mr.

Mikkelsen’s behalf by way of a working agreement. He understood that Mr. Trutina wanted simply something on paper. [ 36 ] Also in cross examination, Mr. Mikkelsen said that it was not until February 2007 that he found out that Truman Development wanted the Mikkelsen children to be partners on the development project too. When the issue arose about discharging the Caveats, Truman Development had made the involvement of the children and Mr. Mikkelsen’s delivery of an assignment or acknowledgement of their involvement a condition of removing the Caveats from the Langdon Land. [ 37 ] Mr.

Mikkelsen denied that he had intended to develop the Langdon Land at that time or that he had had any prior discussions with Mr. Trutina about it. He said he had signed the Agreement only as a working arrangement so Mr. Trutina could better engage other landowners in the area. He also denied receiving an earlier draft of the Agreement and left the impression it related only to Chestermere.

Mr. Mikkelsen also stated that he did not recall his wife’s edits on the document and said while the handwriting was similar, he could not say for certain whether it was her writing on the (Langdon) Agreement. Wendy Mikkelsen [ 38 ] It was Mr. Trutina’s evidence during pre-trial Questioning twice in 2013 that he had met with the Mikkelsens on September 5, 2006 and that they had discussed both Agreements (Chestermere and Langdon) at that time. He said the drafts were also reviewed line by line. This was his explanation about why the Agreements were dated September 5, 2006. [ 39 ] Mrs.

Mikkelsen testified that no meeting took place on September 5, 2006, From September 4 to October 12, 2006, the Mikkelsens were on their boat and sailing off Vancouver Island with family members. Mrs. Mikkelsen produced the boat log and photographs in support of where they were at that time. [ 40 ] It was her evidence that the Mikkelsens had arranged to meet with Mr. Trutina on January 17, 2007 at their home to discuss the Chestermere Land. All three were present. However, Mr. Trutina produced a proposed agreement for the Langdon Land as well.

She identified the documents they had signed that day but denied her own signature. [ 41 ] Mrs. Mikkelsen told the Court that in the summer of 2007 they returned from vacation and found copies of the Caveats filed against the Langdon Land in the mail. She said they were upset because Mr. Trutina had promised that there would be no caveats. “We contacted and confronted him,” she said. When they met Mr. Trutina on December 10, 2007, she said Mr. Trutina signed an agreement that Mr. Mikkelsen had typed up to terminate the Agreement between them. She said they had met for breakfast at the Radisson Hotel in Calgary.

At that time, Mr. Mikkelsen raised a conversation he had had with Mr. Trutina the previous week when Mr. Trutina said there was “no problem” and to bring him something to look at. She said Mr. Trutina then read the short agreement and signed it. She produced the receipt for the breakfast meeting. After that meeting, the Mikkelsens believed that the matter of the Langdon Land was concluded. [ 42 ] In 2011, they discovered that Mr. Trutina had still not removed all of the Caveats. They met with Mr. Trutina three times between November 1 and December 1, 2011. At the first meeting, Mr. Mikkelsen gave Mr.

Trutina a copy of the December 2007 agreement showing Mr. Trutina agreed he had had no interest in the Langdon Land. They arranged to meet again on November 8, 2011 about the status of the Caveats. At that meeting, Mr. Trutina gave the Mikkelsens a copy of an appraisal of the Langdon Land. Mrs. Mikkelsen said that Mr. Trutina tried to reopen discussions about the Langdon Land but because the Caveats had still not been removed, Mr. Mikkelsen said there was “no way” that the Langdon Land would be revisited. Mrs. Mikkelsen said both she and her husband told Mr.

Trutina that the Caveats needed to be removed and reminded him that he had promised that he would get it done because he was a “man of his word”. [ 43 ] Mr. Mikkelsen then suggested that discussions return to the Chestermere Land. On December 1, 2011, they met again expecting to be given an appraisal for the Chestermere Land but no appraisal was provided. Mrs. Mikkelsen said that Mr. Trutina was still promising to remove the Caveats but by this time, the Mikkelsens had stopped trusting him. Caveats remain on the Langdon Land as of the date of trial. Kevin Casement [ 44 ] It was Mr.

Trutina’s position that he had agreed to remove the caveat on the southwest quarter of the Langdon Land to accommodate a plan by Mr. Mikkelsen’s son-in-law, Kevin Casement, to open an RV storage business in 2007. [ 45 ] In response, Mr. Casement, who married Alana Mikkelsen in 2009, testified that he had taken an interest in setting up an RV storage business that year on the southwest corner of the Langdon Land. He said no discussions about that business had taken place prior to November 2009. Mr. Casement dropped the idea in the spring of 2010 after it appeared that it was not a viable business opportunity.

Margaret Whiteside [ 46 ] In her evidence, Mrs. Whiteside said that in late 2006 she was talking to a realtor representing a third party offer for her Whiteside Land as well as to Mr. Trutina. At that same time, Mr. Mikkelsen was talking to Mr. Trutina about his Chestermere Land. She said she spoke regularly with her brother about offers on her land because he was affected by whatever she decided to do since he had always farmed her land. [ 47 ] Mrs.

Whiteside accepted the offer from Truman Development because there were no real estate commissions involved unlike the third party offer through the realtor for the same amount. She sold her land for $3 million representing approximately $20,000 per acre. She said she had also declined an offer from Truman Development to get involved in a joint venture since it might not happen for 20 or 25 years. She would have no benefit from it at her age. The sale proceeded on February 2, 2007 although the land did not immediately transfer due to an extended payment

schedule over about a four year period. David Jessey [ 48 ] Mr. Jessey’s land is located north of the Whiteside Land. His evidence was that he met Mr. Trutina on one occasion at his son’s home when they were shown development plans. Mr. Mikkelsen was present at that time. He said the meeting lasted upwards of an hour but the discussion did not have anything to do with Jessey land. [ 49 ] Later, he encountered Truman Development surveyors working on his land. When he asked who had given them permission to be there, he was told that they had been sent by Mr. Trutina. Upon being confronted by Mr. Jessey, Mr. Trutina told him he had forgotten to contact him and apologized.

[ 50 ] Mr. Jessey said that he had given no permission for Mr. Trutina or Truman Development to represent him or his property. However, Mr. Jessy said he had heard Mr. Trutina was doing so at development meetings. He said he told Mr. Trutina to stop representing that he had something to do with his land. He identified his land on a Truman Development plan which was labelled “industrial”. Mr. Jessey said seeing his land referenced in that manner and on the plans was news to him.

He also said that he was not aware that Sweetgrass Consultants Ltd. had conducted a biophysical impact assessment on his land in the fall of 2011. He confirmed that he had not personally given his approval, as the land owner, for environmental companies to do site assessment studies. He acknowledged in cross examination that he later learned that his son, who farms the land for him, had permitted access for the biophysical impact assessment. Meghen Mikkelsen [ 51 ] Meghen Mikkelsen is married to Ryan McKenzie. In addition to residing on Langdon Land, she now owns one quarter of each quarter

section of as a result of the tax rollover in 2008. It was her evidence that her father makes all of the decisions about the Langdon Land. [ 52 ] She said that beginning in 2010 she started attending Langdon town hall meetings. At one such meeting in early 2011 development poster boards for the Langdon area were presented along with handouts. She said that her family’s Langdon Land was included in the development area. [ 53 ] She said she found it strange that the Langdon Land owned by the Mikkelsens was being represented by Mr. Trutina. Ms.

Mikkelsen contacted her father after the meeting and questioned him about the way the Langdon Land was being presented. [ 54 ] Two years later, in 2013, she attended a Langdon open house meeting called “Grow Langdon”. At that event, Mr. Trutina was again representing that the Langdon Land, owned by the Mikkelsens, was part of the Truman Development plan. She said that the Langdon Land appeared on a conceptual scheme of all four quarters. The Whiteside Land and Mr. Jessey’s land also appeared on the scheme. Ms. Mikkelsen took pictures. She said Mr.

Trutina was present at the meeting and was standing beside the poster boards. She emailed the pictures to her father, who was travelling at that time. [ 55 ] Prior to her marriage to Mr. McKenzie, Ms. Mikkelsen had dated Shawn Rusnak whose family had a landscaping and RV storage business. However, she confirmed that at no time did she ever discuss any plans for Mr. Rusnak to build an RV storage business on the Langdon Land. She further stated that she was not aware of any plans for any of her family members to build an RV storage facility on Langdon lands in 2007. Ms.

Mikkelsen stated that she and her husband have plans to get back into haying.

Summary of Defendant’s Evidence George Trutina [ 56 ] Mr. Trutina testified as the President and CEO of the Defendant. He is a native of Sarajevo, Bosnia. His first language is Croatian. He claims a grade 8 education and qualifications as a machinist. He emigrated to Canada in 1972 at the age of 21 and first arrived in Toronto. He enrolled in a three-month night school English program and ultimately gravitated towards construction work. He moved to Calgary in 1975 and spent the next 20 years working in construction, buying real estate, renovating houses and reselling them.

In the 1990s, he incorporated Truman Homes and thereafter Truman Development. [ 57 ] Mr. Trutina told the Court that his early property acquisitions helped launch him in the property development business. As president of Truman Development, Mr. Trutina is involved in all aspects of the company. Mr. Trutina described himself as a “visionary”. He said he purchases property as a gamble or on speculation that it will eventually become annexed to hamlets and towns and become of interest for residential development. [ 58 ] Mr. Trutina said that the first interaction between himself and Mr.

Mikkelsen occurred in 1999 when Mr. Trutina, through Truman Homes, purchased land located in the Chestermere area from Mr. Mikkelsen. He said the transaction was the result of discussions between them and an agreement for sale was ultimately signed at the Mikkelsens’ kitchen table. He also purchased a “sliver of land” from Mrs. Mikkelsen that enabled him to develop a new subdivision, now known as Rainbow Falls. [ 59 ] In 2005, he raised with Mr. Mikkelsen the possible purchase of more Chestermere land and also the Langdon Land but Mr. Mikkelsen was not interested in trying to have the land annexed to Langdon. Mr.

Trutina said that he would do the work and pay for the annexation. By doing so, he was hoping Mr. Mikkelsen would agree to let him develop his land. [ 60 ] At that time he gave Mr. Mikkelsen an offer to purchase more Chestermere land but Mr. Mikkelsen did not want to sell a half interest as Mr. Trutina proposed at that time. [ 61 ] Mr. Trutina said he then had a joint venture agreement prepared for the Chestermere Land and this produced more interest from Mr. Mikkelsen. He said they started talking about a joint venture agreement in 2006. Truman Development would pay for the land at Mr.

Mikkelsen’s price discounted by 50 percent in exchange for which Mr. Mikkelsen would receive 50 percent of the shares of a new holding company, NewCo. Truman Development would complete the development and they would each have 50 percent of the profits of the development. Mr. Trutina made this same offer for the Langdon Land. [ 62 ] Mr. Trutina said the Langdon Land was valued at $16,000 per acre. Accordingly, Mr. Mikkelsen as a partner in the joint venture, would be paid $8,000 per acre for the property. There was no indication that there were to be any other assets in NewCo.

There was no indication when the development might proceed, dependant as it was on whether and when the land would be annexed to Langdon.

[ 63 ] In addition to the Langdon Land Mr. Trutina and Truman Development were also interested in the adjacent properties belonging to Mr. Mikkelsen’s sister, Mrs. Whiteside, and tracts belonging to the neighbours. Mrs. Whiteside had a small but important tract next to Highway 797, directly east of the Langdon Land, which would provide important access to sewer, water and other services. It was Mr. Trutina’s plan to buy those lands as well and to do all of the planning and development. [ 64 ] Mr. Trutina said that Truman Development would pay for all costs of the development from the annexation process forward.

There was no requirement for Mr. Mikkelsen to work on the development himself. There was no evidence that NewCo was ever incorporated. [ 65 ] Mr. Trutina stated that on December 15, 2006 he had sent a proposed joint venture agreement for the Whiteside Land but Mrs. Whiteside was not interested. She wanted to sell her property outright so she could retire. He made an offer to purchase which she accepted on February 2, 2007. [ 66 ] Mr. Trutina said that he did not discuss the Whiteside offer to purchase with the Mikkelsens on January 17, 2007 other than to mention the fact that an offer had been made.

He denied telling the Mikkelsens that they needed to come to an agreement on the Langdon Land because Mrs. Whiteside’s sale depended on it. [ 67 ] Mr. Trutina said he had had his lawyer, Michael Dunkley, draft two joint venture agreements and a purchase agreement the previous July and he presented them to Mr. Mikkelsen on January 17, 2007 to give him a choice. He said Mr. Mikkelsen was not receptive to a purchase but he was “very excited” about the joint venture prospect. According to Mr. Trutina, they went through the documents line by line.

He denied telling the Mikkelsens that it did not matter what the agreement stated because final agreements with legal advice would be prepared later or that the Agreement was simply to give him leverage at a town hall meeting on development to be held that evening. [ 68 ] Mr. Trutina testified that Mr. Mikkelsen had told him that he planned to do a tax rollover of the Langdon Land to his children. Mr.

Trutina said that he expressed his willingness to accommodate the rollover but that the Mikkelsens needed to ensure that the Agreement was acknowledged by their children. [ 69 ] When he reviewed the agreements with the Mikkelsens, Mr. Trutina said that Mrs. Mikkelsen was making edits on the document as they went along. He said the Mikkelsens changed the price from $8,000 to $10,000 per acre and the land value from $16,000 to $20,000 per acre. Mr. Trutina said he initialled the Mikkelsens’ changes and they signed the documents. With respect to the $10 payment referenced in each of the agreements, Mr.

Trutina said he paid that amount in cash. [ 70 ] Mr. Trutina said he took the signed documents to his lawyer, Mr. Dunkley, who then apprised him of problems with the way the documents had been executed. Specifically, an independent witness was required and Mrs. Mikkelsen needed to sign a dower release for the Langdon Land. [ 71 ] Mr. Trutina said that he had discussed the Langdon Land joint venture proposal with Mr. Mikkelsen prior to January 2007. During pre-trial Questioning, Mr. Trutina said they had met on September 5, 2006, the date he had also written on the proposed agreements signed on January 17, 2007.

However, at trial he stated that he could not recall the date they had met. Significantly, this was after Mr. Mikkelsen’s evidence that they were boating at that time. [ 72 ] Mr. Trutina also stated that the first time he had heard about Mr. Mikkelsen’s desire to transfer the Langdon Land to his children was in 2007 when Mr. Mikkelsen asked him to remove the caveat on the southwest quarter to allow 10 acres to be used for a storage park to acquire some revenue from the land. [ 73 ] Mr. Trutina said that in exchange for discharging all three Caveats, he wanted Mr.

Mikkelsen to give him an acknowledgment that the Mikkelsen children would accept the Agreement. [ 74 ] With respect to the subsequent document purporting to terminate the Agreement, Mr. Trutina agreed that he had met with the Mikkelsens on December 7, 2007 at the Radisson Hotel. However, he stated it was not a breakfast meeting. He said it was a lunch meeting at which he had had drinks, cocktails, beer or wine, and was taking pills for health issues. When he was handed the termination document, he said he signed it without reading it.

He said he instructed his lawyer to discharge the caveat on the southwest quarter on the basis that Mr. Mikkelsen would bring the signatures of his children once he knew which ones would be getting land. He said he understood that was what the document was all about. [ 75 ] After these events, Mr. Trutina said he started the planning process for the Langdon Land. He recalled that he opened discussions with Mr. Jessey about his adjacent land in June. [ 76 ] On April 24, 2009, there was a planning meeting with the Municipal District of Rocky View. Mr.

Trutina said he had learned that a growth management study was to be undertaken by Rocky View. He said he had invited Mr. Mikkelsen to attend because he wanted to include the Langdon Land in the plans. He disagreed that Mr. Mikkelsen had heard about the meeting on his own and did not accompany him to the meeting. [ 77 ] Mr. Trutina said that even after the litigation commenced over whether there was a binding agreement between Mr. Mikkelsen and Truman Development, he proceeded with work on the Langdon area development plan. [ 78 ] In cross examination, Mr.

Trutina said he had reviewed drafts of the Agreement for the Langdon Land with the Mikkelsens in the summer and fall of 2006. He said that he penned in the date of September 5, 2006 on the Agreement himself. He also said there was a secretary in the room making the changes on the first draft, and it was a later draft that was reviewed and then signed in January, 2007. [ 79 ] During pre-trial Questioning, Mr. Trutina had stated he was sure that he had met with the Mikkelsens on September 5, 2006. In an affidavit that Mr. Trutina swore and filed on May 8, 2013, he deposed that the first time Mr.

Mikkelsen signed the Agreement for the Langdon Land was on September 5, 2006, after reviewing it with him line by line.

[ 80 ] He said he was present and so was a neighbour, Megan Fowler. He had stated during pre-trial Questioning on May 10, 2013, that he had met Ms. Fowler, described her appearance and assessed her age. During further pre-trial Questioning on August 30, 2013, Mr. Trutina again stated with certainty that he had met with the Mikkelsens on September 5, 2006. [ 81 ] Megan Fowler testified that she had never met Mr. Trutina. Further, she had met the Mikkelsens for the first time on the day they attended at Getz & Associates to have the Langdon Land agreement resigned. She witnessed their signatures.

After hearing this evidence, Mr. Trutina stated that he had never met Ms. Fowler and that the person he had met must have been someone else. [ 82 ] Mr. Trutina denied changing his evidence after hearing Mrs. Mikkelsen tell the Court about the family holiday on their sailboat off Vancouver Island in September and October, specifically during the time he said the meeting had taken place. He also testified at trial that the date they had met was another time that fall not September.

However, he did not know the date. [ 83 ] He denied that the Mikkelsens had told him that they were not interested in selling or doing a deal involving the Langdon Land. He said that he knew from some time the previous summer that the Mikkelsens planned to do a tax rollover to transfer the land to their children. Mr. Trutina said that he would accommodate that as long as the Mikkelsens gave him a joint venture agreement agreed to by the children who would be the transferees in the rollover. [ 84 ] On the one hand, Mr.

Trutina said that he knew from the beginning that the Mikkelsens were planning a tax rollover of the Langdon Land to their children, and on the other, he said that he had heard about it later that year when the Mikkelsens asked that the Caveats be removed. Mr. Trutina also testified that when Mr. Mikkelsen presented him with the document he had typed up, he signed it but did not read it. He said one document only was signed on December 10, 2007 and that Mr. Mikkelsen had taken it with him. [ 85 ] In contrast, during pre-trial Questioning on August 30, 2013, Mr.

Trutina said he signed the document at the December 10 meeting without reading it because he thought it was to remove a caveat from the southwest quarter

section of the Langdon Land to build an RV storage park, and Mr. Mikkelsen did not want anything appearing on the titles. [ 86 ] At trial, Mr. Trutina was presented with an original signed copy of the December 10, 2007 termination document from the Defendant’s production and shown another original signed that same day. He then stated that he recalled that he had put one original in his pocket and Mr. Mikkelsen had taken the other one. He agreed that the first time he had admitted to having an original himself was during trial. [ 87 ] As previously noted, Mr.

Trutina acknowledged the meeting with the Mikkelsens at the Radisson Hotel on December 10, 2007, but stated they had had lunch not breakfast. He further testified that he had consumed alcoholic drinks and had been taking pills for a health issue. He also said that he did not understand written English well and that language always plays a

part in his life. Asked in cross examination why these things would have been factors in signing the document if he had not read it, he replied that he trusted that Mr. Mikkelsen would have his children acknowledge the Agreement. [ 88 ] Mr. Trutina denied that he had acquired an appraisal for the Langdon Lands dated June 10, 2011 in response to Mr. Mikkelsen’s discovery that Truman Development had not removed the Caveats. Mr. Mikkelsen threatened legal action by email on June 28, 2011. Mr. Trutina took the position that he acquired the appraisals only after Mr.

Mikkelsen threatened legal action and denied that the appraisals were to be used for the purpose of renegotiating the deal because three years had passed since the termination document was signed. He said it was Mr. Mikkelsen who wanted to renegotiate. [ 89 ] A planning company, Brown and Associates Planning Group (“B & A”), prepared a development plan dated October 27, 2010. Mr. Trutina acknowledged that the plan included other Langdon area properties for which Truman Development had no legal interest at that time. Mr.

Trutina stated that he was permitted to do a conceptual plan without having a legal interest and agreed that he took the conceptual plan to a meeting in Langdon in January 2013. Mr. Trutina said that because the Municipal District of Rocky View was doing an area structure plan, they had asked what he planned to do with his land. He stated that he had to provide them with the conceptual plan since it would provide incentive to annex the boundaries of Langdon to the north of Glenmore Trail. [ 90 ] Mr.

Trutina acknowledged that Truman Development stands to gain $38.5 million, depending on the economy, for the development that would include the Langdon Land and that it has spent approximately $440,000 for development steps taken to date. [ 91 ] He agreed that Truman Development spends money on potential annexation lands by way of a working arrangement, hoping to get a legal interest in the land later. He described himself as someone who is there to take a gamble; a “doer”, a “visionary”. He acknowledged having had a working arrangement with Mr. Mikkelsen in 2005 on the Chestermere Land. [ 92 ] Mr.

Truman agreed that he tells people generally, and told the Mikkelsens, that he is a “true” man, and they could trust that he will do what he says he will. He named his company “Truman” to further convey that public message. Michael C. Dunkley [ 93 ] Michael Dunkley testified that he has represented Truman Development regularly since about 2000 and his dealings were almost exclusively with Mr. Trutina. He said that his approach to documents was to go over them clause by clause with Mr. Trutina and if he did not understand something or had a question, Mr. Dunkley would make sure Mr. Trutina understood the details.

He said he thought Mr. Trutina had problems reading English. In his view, Mr. Trutina looked at the big picture and left the details to Mr. Dunkley. [ 94 ] He said his first involvement with Mr. Trutina about the Langdon Land was in the spring of 2006 when he was told that Truman Development was working on a project east of Calgary, in Langdon and Chestermere. In late June or early July, Mr. Trutina asked that some agreements be prepared because it looked like things were going ahead with Mr. Mikkelsen for land in Chestermere and Langdon. The land in Langdon was on three separate titles. In addition, Mr.

Mikkelsen’s sister was also negotiating a sale of land with Mr. Trutina.

[ 95 ] It was Mr. Dunkley’s understanding that there would be joint venture agreements created in which Mr. Mikkelsen would transfer land for $8,000 per acre to be paid at the time it was transferred. Truman Development would pay all associated costs with the profits to be split between them 50-50. [ 96 ] His account for services rendered was marked as an exhibit at trial. Referring to his account, Mr. Dunkley said he was instructed to prepare joint venture agreements for both the Chestermere and Langdon Land in July 2006. He identified a joint venture agreement that he understood Mr.

Trutina and the Mikkelsens had marked up and returned to him for redrafting . [ 97 ] Among other things, he said the new draft had the price per acre changed from an $8,000 per acre payment based on $16,000 per acre value, to $10,000 per acre based on $20,000 per acre value. He also made a note for Mr. Trutina that he would have to proceed with the purchase even if the land could not be annexed during the period provided. He made the changes in October or November, 2006. Nothing happened for a couple of months, but on January 15, 2007, Mr. Trutina asked for clean copies of the agreements to take to Mr. Mikkelsen.

Mr. Dunkley’s next contact with Mr. Trutina was towards the end of January, when Mr. Trutina dropped off the signed agreements. [ 98 ] Mr. Dunkley said he noticed that there were problems with the execution of the documents because the Mikkelsens had witnessed each other’s signature. Also, there was no dower release signed by Mrs. Mikkelsen. He said he emailed new signing pages to Mrs. Mikkelsen for re-signing purposes. [ 99 ] Mr. Dunkley also said that when he sent the latest versions of the agreements on January 15, 2007, he did not expect that they would be signed. In his correspondence, he asked Mr.

Trutina whether Mr. Mikkelsen had a lawyer, to advise whether further changes were required, and indicated that he would then finalize the document for signing. [ 100 ] In July 2007, he registered the Caveats on the titles of the Langdon Land because the joint venture agreement provided that the lands would be developed in phases and that they would be paid for as contributed. He decided it would be easier to have a separate caveat on each title so they could be removed as the land was contributed to the project. [ 101 ] In early December 2007, Mr. Dunkley was contacted by Mr.

Mikkelsen’s lawyer who advised that Mr. Mikkelsen was doing a tax rollover of land to his children and he could not do that with the Caveats on the titles. Mr. Dunkley contacted Mr. Trutina, who was “torn between taking them off and not taking them off.” [ 102 ] Mr. Dunkley said that he advised Mr. Trutina that if he removed the Caveats he would have nothing registered against the land and if the titles were transferred with no acknowledgment by the transferees (the Mikkelsen children) his agreement might be at an end. [ 103 ] Mr. Dunkley said that he received instructions from Mr.

Trutina on December 13, 2007 to take the caveat off the title to the southwest quarter as “a show of good faith”, and to send the discharge to Mr. Mikkelsen’s lawyer in trust on the condition that the Mikkelsen children would acknowledge the Agreement and that it would be assigned to them. Mr. Trutina then instructed Mr. Dunkley to delete the trust condition and just go ahead and discharge the caveat on the southwest quarter. [ 104 ] Mr. Dunkley said that he told Mr. Trutina that the Agreement might require him to purchase the land even if it could not be annexed. [ 105 ] Mr.

Dunkley said that towards the end of August, 2011, Mr. Trutina asked about whether a promise to discharge caveats could be enforced. On December 6, 2011, Mr. Trutina showed Mr. Dunkley the document signed on December 10, 2007 to terminate the Agreement. He was surprised to see this and suggested that Mr. Trutina speak to a litigation lawyer.

Expert Witnesses [ 106 ] The Defendant called three expert witnesses to testify about the planning work and the value of the Langdon Land. [ 107 ] A planner, Paul Marshall Mercer of B & A, testified about preparation of long-term detailed plans for submission and approval by municipalities to allow new development. B & A first became involved with Truman Development land near Langdon in 2007. The plan was to develop the land as the new subdivision of “Horizon Crossing”. [ 108 ] Mr.

Mercer prepared an Infrastructure and Operation Report dated February 24, 2008 and a Planning and Community Services Report for Truman Development dated February 14, 2012. He explained that the latter report is a conceptual plan that identifies a potential phase I development of the area. [ 109 ] Mr. Mercer said that in May 2013, the Municipal District of Rocky View decided to proceed with the preparation of a new area structure plan for the Langdon area. This encompassed lands that Truman Development was interested in. As a result, open house events and workshops were being held in Langdon in 2015.

Rocky View was assessing public opinion and getting together its own technical studies. [ 110 ] In cross examination, Mr. Mercer explained that in 2007, certain developers were getting land together in the hope of future development. They were trying to buy land or otherwise trying to obtain legal interests in it. [ 111 ] Louis Poirier, a qualified appraiser, prepared a report on May 9, 2006 regarding 11 quarter sections of land to provide a market value estimate for the Langdon Land for the Defendant.

He completed a comparative analysis by searching the land titles system for sale transactions indicating the consideration paid. It was his evidence that the value of the four quarters comprising the Langdon Land was worth an average of $8,000 per acre in 2007. [ 112 ] In cross examination, Mr. Poirier said he was not aware that the Whiteside Land had sold for $20,000 per acre in the same area that same year, and he had not taken into account that sale in his assessment of the value of the Langdon Land.

[113] Richard Geleta testified that he was asked to prepare a construction engineering cost budget to develop the properties thatTruman Development had been involved with, as well as to assemble a cost profit and a benefit profit analysis for when the developmentwas completed. He prepared a Project Revenue Assessment to advance development of the land into a new proposed Horizon Crossingsubdivision. He estimated that the profit expectation would be $38,810,299 per owner. Evidentiary Issues December 10, 2007 Recording [114] During the proceedings, the parties each raised an issue about admissibility of evidence.

The first issue arose during thePlaintiff’s case where the admissibility was challenged regarding a surreptitious recording that the Mikkelsens had made of a discussionwith Mr. Trutina when they met on December 10, 2007. Parts of the recording were played during the proceedings and during Mr.Trutina’s cross examination. [115] In determining admissibility, if the information is relevant, the identity of the parties known, and the recording trustworthy, asurreptitious recording may be permitted as evidence: ADB v EB, [1997] BCJ No 227 (SC) at para 12.

Such recordings are not prohibitedor illegal: Mazur v Corr, 2004 ABQB 752 at para 16. In this instance, the recording was of poor quality which diminished its reliabilityand probative value. [116] In any event, Mr. Trutina responded to questions about matters raised in the recording in his viva voce testimony. Heacknowledged that he agreed to discharge the Caveats he caused to be placed on the titles to the Langdon Land. He later qualified thisagreement by stating that Mr.

Mikkelsen was to deliver to him, in exchange, an acknowledgement of the Agreement between themsigned by the Mikkelsen children to whom he would be transferring the land making them owners of the property along with their father.The tax rollover took place in 2008. [117] As a result, it is not necessary to rely on the recording because there was testimony about what happened at that meeting fromMr. Trutina as well as the Mikkelsens.

Because of the poor quality of the recording and the lack of necessity for it, this Court has notconsidered or relied on the recording. [118] The Defendant also argued that the December 10, 2007 meeting was privileged, because it was an attempt by the parties toresolve their dispute before litigation, and the privilege was not waived. I do not accept that this meeting was for the purpose ofsettlement and therefore privileged. It resulted in a signed document between the parties and forms part of the factual narrative about theparties’ relationship.

Handwriting Expert [119] The second evidentiary issue arose when the Defendant called a handwriting expert to give his opinion on whether theMikkelsens had signed the agreements presented in these proceedings on January 17, 2007 and whether Mrs. Mikkelsen had madenotations on an earlier draft. Mrs. Mikkelsen claimed no clear memory about making the notations. [120] Admission of expert evidence depends on relevance, necessity in assisting the trier of fact, the absence of any exclusionary rule,and a properly qualified expert: R v Mohan, (SCC), [1994] 2 SCR 9 at para 17.

If those threshold conditions foradmissibility are met, the Court then considers whether the benefits of admitting the evidence outweigh the potential risks of doing so,considering factors including the degree of relevance, necessity, reliability and absence of bias: White Burgess Langille Inman v Abbottand Haliburton Co, 2015 SCC 23 at paras 24 and 54. [121] There was sufficient evidence from the Plaintiffs’ own evidence and witnesses, Ms. Fowler in particular, that they signed theagreements on January 17, 2007. Mr. Dunkley also provided evidence about the signatures. With respect to the notations, Mr.

Dunkleyindicated he received a mark-up with notations but it is not clear whether that was the Chestermere Joint Venture Agreement or theLangdon Joint Venture Agreement. In any event, even if the Court accepts that Mrs. Mikkelsen made notations on the Agreement, itdoes not assist the Court in determining what was understood or intended when Mr. Trutina and Mr. and Mrs.

Mikkelsen met in January2007, or whether the Mikkelsens understood they would still have an opportunity to obtain legal advice and make further revisions. [122] In this case, the evidence of an expert to provide the Court with a decision about whether the Agreement was signed by theMikkelsens or whether Mrs. Mikkelsen made notations on a draft agreement was not necessary to assist with determinative factualissues. Further, evidence of a handwriting expert was not necessary because there was evidence available for the Court to make adetermination without assistance.

The handwriting expert’s opinion was not necessary and is not accepted in evidence. Defendant’s Other Experts [123] The Defendant called Mr. Mercer, Mr. Poirier and Mr. Gelata to provide evidence on the planning process, the value of theLangdon Land and a projection of profits for the Langdon Joint Venture Agreement, respectively. I accept Mr. Mercer’s evidence aboutthe planning process. With respect to Mr. Poirier’s valuation of the Langdon Land, I give it little weight since he did not include the saleof the Whiteside Land which was a relevant and significant comparable. Similarly, I give little weight to Mr.

Gelata’s profit projectionbecause of its speculative nature. He provided no timeline for development of the Langdon Land which logically, should have been asignificant variable in estimating profits. Legal Principles in the Formation of a Contract

[124] The parties do not dispute the general principles required to form a binding contract; rather, they dispute the facts about whetherthe agreement is binding or was terminated. The following general principles apply: (

i) To create a binding contract, the parties must agree on all essential terms: Consulate Ventures Inc v Amico Contracting &Engineering

(1992) Inc, 2007 ONCA 324 at para 81; Woronuk v Woronuk, 2015 ABQB 116 at para 271. (ii) Mutuality of agreement is essential for an enforceable contract.

Whether the parties reached a consensus ad idem requires anobjective analysis: . . . [T]he parties will be found to have reached a meeting of the minds, in other words be ad idem, where it is clear to the objectivereasonable bystander, in light of all the material facts, that the parties intended to contract and the essential terms of the contract can bedetermined with a reasonable degree of certainty: Ron Ghitter Property Consultants Ltd v Beaver Lumber Co, 2003 ABCA 221 at para 9. (iii) An agreement to agree is not enforceable and the key consideration “depends on whether the parties intended to be bound andmerely delayed settling the details, or whether they only agreed to continue negotiations”: Woronuk at para 271. (iv) Consideration is also required for a binding contract: . . [A] valuable consideration in the sense of the law may consist either in some right interest, profit, or benefit accruing to one party, orsome forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other: Spruce Grove (Town) v YellowheadRegional Library (1982), 1982 ABCA 369 , 24 Alta LR (2d) 163 (QB) at para 7. (

v) A mutual exchange of promises can be valid consideration. (vi) Duress can also vitiate consent to an agreement, allowing a victim to avoid it. Commercial pressure is not enough, however.There must be a coercion of will such that there is no true consent: Hill v Ilnicki (2000), (AB KB), 273 AR 131 (QB)at para 52 (“Hill”); aff’d 2002 ABCA 2009; leave to appeal to SCC refused 29446 (March 27, 2003). [125] These principles have been applied to the evidence in this case in the following analysis.

Analysis [126] Both parties agree that credibility is a significant factor in resolving conflicts in the evidence, specifically the contradictoryversions of what took place and for what purpose presented by Mr. Mikkelsen and Mr. Trutina. [127] For the reasons that follow, this Court finds on a balance of probabilities that the Plaintiffs’ evidence is a reliable and a moreaccurate depiction of what took place.

This Court accepts the Plaintiffs’ version despite the inconsistencies reflected in their respectiverecollections about signing the agreements on January 17, 2007 and with respect to any earlier versions they may have seen. It was clearfrom the evidence of both Ms. Fowler and Mr. Dunkley that the Mikkelsens signed both documents and replacement signing pages. ThePlaintiffs called Ms. Fowler as a witness themselves.

As a result, the Mikkelsens presented as sincere witnesses and their credibility wasnot undermined, although their failed recollection on this point does suggest their memory of events is not without its flaws.Significantly, key points in their version of events was often supported by other evidence. [128] The Mikkelsens’ failed recollection may be contrasted with the many inconsistencies in Mr. Trutina’s evidence which gave theCourt the clear impression he had changed his pre-trial Questioning evidence as he listened to the Plaintiffs’ evidence at trial. [129] In particular, Mr.

Trutina was adamant that he had reviewed an earlier draft of the January 17, 2007 Agreement with theMikkelsens on September 5, 2006 and that they had ongoing discussions about developing the Langdon Land. Mrs. Mikkelsen producedthe log book from their sailing trip with their family members, including Mrs. Whiteside, indicating they were on a vacation in theVancouver Island area at that time. After hearing the boat log evidence, Mr. Trutina then stated that he did not recall the actual date theyhad met. He said that he had just recited the date he had written by hand on the Agreement some time earlier. [130] Mr.

Trutina said he agreed in 2007 to remove the caveat on the southwest quarter to accommodate a plan for an RV storagebusiness. However, Mr. Casement testified that the idea for that enterprise did not come up until 2009 after he had married into theMikkelsen family. Mr. McKenzie did not pursue that idea in 2007 either, and there is no other evidence that anyone else did so either. Iaccept the Plaintiffs’ evidence about when the RV storage prospect was discussed. [131] Adding to the lack of reliability of Mr. Trutina’s evidence on that point is the fact that he gave Mr.

Dunkley, his lawyer, adifferent reason for the discharge of the caveat on the southwest quarter. He told Mr. Dunkley that he wanted the southwest quartercaveat removed as a “show of good faith”. [132] Mr. Trutina’s evidence about the December 10, 2007 termination agreement also lacks credibility. He said that he signed itwithout reading it and that there was only one original signed. Later confronted with two original documents, one produced from his ownrecords in the litigation process, he acknowledged that he and Mr.

Mikkelsen each had an original signed document and that twooriginals had been signed that day. [133] With respect to the validity of the termination agreement, Mr. Trutina took the position that there was no consideration, and it istherefore not enforceable. But, Mr. Mikkelsen testified that he had promised to revisit the Langdon Land deal in three years after theCaveats had been removed and the tax rollover of the land to his children was completed.

His evidence suggests that this promise,together with the parties’ mutual agreement not to be bound by the Agreement and to relinquish any rights to enforce the Agreement,comprise valid consideration.

[ 134 ] In August, 2011, three years after the termination agreement was signed, Mr. Mikkelsen attempted to pursue a new joint venture agreement with Mr. Trutina. It is evidence of his belief that the termination agreement had ended the relationship with Truman Development at that time. By signing the termination agreement, the parties mutually agreed not to be bound by the Agreement. In my view, the termination agreement is evidence of an acknowledgement by Mr. Trutina that the Agreement did not reflect both parties’ understanding of what their deal was supposed to be.

I find that he knew the Caveats should not have been maintained on the Langdon Land, which was remedied when he signed the termination agreement. [ 135 ] Further, Mr. Dunkley suggested that Mr. Trutina speak to a litigation lawyer in August 2011, after Mr. Trutina asked about whether a promise to discharge caveats could be enforced and showed him the termination agreement signed on December 10, 2007. [ 136 ] This Court also accepts Mr. Mikkelsen’s evidence that he told Mr.

Trutina from the beginning that he planned to complete a tax rollover of the Langdon Land to his children, and that it was the Chestermere Land that he had acquired as a gift from his uncle which he was interested in developing at that time. [ 137 ] Mr. Trutina testified at one point that he knew from the beginning that the Mikkelsens planned to rollover or transfer the Langdon Land to their children but later claimed he found this out only when he was asked to remove the Caveats. Further, Mr. Trutina persistently pursued an acknowledgement from the Mikkelsen children.

This Court believes that he was concerned about the future of an agreement with Mr. Mikkelsen and obviously about the prospect of negotiating with four Mikkelsens instead of one. [ 138 ] Mr. Mikkelsen’s version of events makes far more sense. Mr. Trutina is a self-made, sophisticated developer who has carried on business at the helm of a multi-million corporation in Canada for more than two decades.

Further, it is not plausible that on a multi- million dollar land development deal, he would sign any document without knowing what it said, or at the very least, running it past his lawyer, as he apparently did everything else. [ 139 ] Further, Mr. Dunkley’s evidence that he told Mr. Trutina that the Agreement might require him to purchase the land even if the land could not be annexed further suggests the preliminary nature of the Agreement. [ 140 ] By contrast, Mr.

Mikkelsen holds a degree in Agriculture from the early 1970s and has some experience on the Municipal District of Rocky View planning commission but at a time when planning did not include large-scale property development. [ 141 ] Mr. Trutina also refused to acknowledge that Mr. Mikkelsen paid for the breakfast at the meeting on December 10, 2007, insisting that it had been lunchtime and he had had drinks and taken pills.

This was proffered to support his suggestion that his English language deficits and impairment accounted for why he signed the termination agreement even after the Mikkelsens produced the receipt for breakfast for three people. [ 142 ] It is also worthy of note that on January 7, 2007, Mr. Trutina had sufficient facility with the English language to review line by line a complicated joint venture Agreement, parts of which the Mikkelsens said they did not understand. Mr. Trutina admitted to the same thing and for that reason told the Mikkelsens that lawyers would be reviewing it all later.

He indicated that it did not matter what the Agreement said for present purposes. That was because it was only a working arrangement that he wanted to take to a town meeting that evening to support annexation. [ 143 ] In his evidence, Mr. Trutina described himself as a “visionary”, effectively a developer who plays the long game by identifying land and locations which will be in demand eventually, and either buying or acquiring a development interest in the property.

In the long game, the developer then waits or facilitates the zoning changes that will make development not only feasible, but lucrative. [ 144 ] In Chestermere, Mr. Trutina developed satellite communities together with other companies such as Rainbow Lake. Once he identifies potential property, Mr. Trutina’s approach appears to be based on building personal relationships with people with whom he hopes to do business. One of those people was Mr. Mikkelsen. [ 145 ] On January 17, 2007, Mr. Mikkelsen thought he was looking at a working arrangement. He had no plan to sell or develop the Langdon Land. Mr.

Trutina knew that the Langdon Land was to be rolled over to the three Mikkelsen children. But Mr. Trutina “talked and talked and talked”, working hard to get a deal on the Langdon Land in some form as he always had in the past once he found land that fit within his vision for development. [ 146 ] The Agreement on the Langdon Land and the Chestermere Joint Venture Agreement drafted the previous summer were almost identical. It was logically the document that was worked on earlier. The Mikkelsens were expecting that document, not the Langdon one. [ 147 ] Mr.

Trutina’s pressure tactic that he had to have something signed to be able to be taken seriously at the town meeting rings true. It is this Court’s view that part of his desire to tie up Mikkelsen land was to encourage other landowners like Mr. Jessey to follow suit. He went so far as to publicly represent that he had a legal interest in Mr. Jessey’s land. At trial he admitted that he had no such interest. Knowing this, he presented the Jessey Land at planning meetings as Truman Development land. [ 148 ] There is no doubt that Mr.

Trutina’s approach was to tell people that he would do all of the preparation work to ready the land for annexation and development without cost to them on the understanding that Truman Development would have the first opportunity to either purchase or enter into a land deal with them. By his own admission, it was a gamble he routinely took and one he took with the Mikkelsens. [ 149 ] On the Langdon Land prospect, Mr. Trutina told Mr. Mikkelsen that he could decide later whether he would be part of it. All concerns would be accommodated.

Added pressure came as a result of the pending closing of the purchase of Mrs. Whiteside’s land. Without a working arrangement, Mr. Trutina indicated he would not proceed. [ 150 ] Mr. Trutina had a far more sophisticated and experienced approach to land development and how to get deals closed than Mr. Mikkelsen. Mr. Mikkelsen, naïve as he was, trusted Mr. Trutina to his detriment.

[ 151 ] It is also clear that Mr. Trutina was in a rush to get an Agreement signed even though actual development was not going to happen for years. He was in a rush because a tax rollover would cause difficulties. [ 152 ] By his own admission, Mr. Trutina planned projects far in advance of actual fruition. He lined up the land as early as possible, obviously because, among other things, land values change. In Mr. Mikkelsen’s situation, Mr. Trutina had added incentive.

He knew from the onset that the Mikkelsens would be transferring the Langdon Land in part to their children complicating his ability to get a deal. He made the removal of the Caveats conditional on Mr. Mikkelsen delivering his children’s acknowledgement of Mr. Trutina’s development plans. These were acknowledgements the delivery of which Mr. Mikkelsen could not guarantee. [ 153 ] There is no doubt that the Mikkelsens did what Mr. Trutina asked because they believed what he had told them: the Agreement was not final; it was all open to final negotiation, legal advice and scrutiny. Mr.

Trutina added his corporate seal and in doing so rushed the Mikkelsens into an agreement they were not ready to make and he knew it. [ 154 ] Interestingly, although Mr. Trutina took the position that the Agreement is final, the Caveats themselves reference the underlying authority for their registration as an “interim agreement”. This appears in the filed Agreed Statement of Facts entered at trial. Mr. Dunkley also expressed surprise that the documents he had hurriedly prepared and intended for negotiation purposes were signed. He had expected to hear from Mr. Mikkelsen’s lawyer. [ 155 ] Mr.

Trutina asks this Court to accept that Mr. Mikkelsen would tie up nearly a full

section of valuable land on a deal that he had considered for less than three hours for a $10 payment which likely was not paid, effectively giving half the land to Mr. Trutina on the mere hope of garnering a return from a development that might not materialize for decades. This makes no sense. [ 156 ] In addition to challenging the validity of the Agreement, specifically that it was never a valid contract, the Plaintiffs argue that even if the Agreement could be construed as an enforceable agreement, it was terminated on December 10, 2007.

Counsel for the Defendant argued that the termination agreement is not enforceable because there was an absence of consideration, one of the pillars of a valid contract. The Agreement was not a valid contract so there was no need for a termination agreement. That said, I agree with the plaintiffs that the parties’ mutual release of obligations under the Agreement could be valid consideration. I find the termination agreement reflected Mr. Trutina’s acknowledgement that the Caveats should not have been maintained.

Because the Agreement did not reflect what both parties understood the deal was to be, it was also a valuable promise from Mr. Mikkelsen to revisit with Mr. Trutina the prospect of an Agreement for the development of the Langdon Land after three years. He attempted to do so in 2011, fulfilling his promise. [ 157 ] By signing the termination agreement, Mr. Trutina demonstrated that he was prepared to try to put Mr. Mikkelsen at ease about their relationship (by agreeing to discharge the Caveats) and was further prepared to do or say whatever it took to get what he wanted from Mr. Mikkelsen.

I have no doubt that he did this as well at the January 17, 2007 meeting during which he “talked and talked and talked” until the Mikkelsens signed the document. He told them whatever they wanted to hear on the gamble that he could unravel any problems later on. [ 158 ] I have no doubt that the Mikkelsens thought the document was a working arrangement they could finesse at a later date if they chose to proceed with the development presented by Mr. Trutina. Mr.

Trutina appears to have been focussed on reaching a final deal for the Langdon Land. [ 159 ] As indicated earlier, it is well-established in contract law that the parties must agree on all essential terms and be ad idem . Mutuality of agreement is essential for an enforceable contract. Here, much was left outstanding which in itself supports the characterization of the Agreement as a working arrangement. [ 160 ] For example, there was no time frame specified about when the land would be developed, creating the possibility that the Langdon Land could be held in abeyance for generations.

The Agreement was contingent on an event (annexation to Langdon), that might never happen. The Agreement fails as a contract for want of certainty and because the timing was not agreed upon. [ 161 ] Further, the Agreement contemplated the creation of NewCo as the recipient of the Langdon Land, yet it was never incorporated. This means any characterization of the Agreement as a joint venture through NewCo was not concluded. [ 162 ] I find the parties did not reach consensus ad idem .

Applying an objective analysis, it must be clear to a reasonable bystander on a consideration of the material facts that the parties intended to enter into a binding contract and that the essential terms can be determined with a reasonable degree of certainty. [ 163 ] Accordingly, I find that there was no binding agreement between the parties. At best, there was an agreement to negotiate an agreement. I accept Mr. Mikkelsen’s evidence that what he agreed to was a working arrangement to permit Truman Development to publically push the annexation and development of the land forward.

The Defendant’s arguments that there was a binding agreement fail because there was an absence of certainty as to terms, and flawed consideration in that Mr. Mikkelsen was to tie up the Langdon Land indefinitely with no benefit. Truman Development was pledging the possibility of annexation and development of the land, events that might never occur. [ 164 ] In any event, the Plaintiffs say that if the Agreement is a binding contract, it should be set aside on the basis that it was entered into under duress or as a result of Mr.

Trutina’s fraudulent misrepresentations, or that it was unconscionable. [ 165 ] As already stated, to establish duress, the Plaintiffs must show coercion so great that Mr. Mikkelsen could not have truly consented to the Agreement: Hill at para 52 . There was no evidence that Mr. Trutina’s conduct, although aggressive, amounted to coercion. [ 166 ] For fraudulent misrepresentation, the Plaintiffs must establish the following four factors, set out in Attila Dogan Construction and Installation Co v AMEC Americas Ltd , 2015 ABQB 120 at para 141 , aff’d

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