Act for Community Society v Edmonton (City), 2016 ABQB 516

Court of Queen’s Bench of Alberta Citation: Act for Community Society v Edmonton (City), 2016 ABQB 516 Date: 20160916 Docket: 1503 14495 Registry: Edmonton Between: ACT for Community Society Applicant (Respondent on this Motion) - and - City of Edmonton, Rohit Communities Inc and Landmark Communities Inc Respondents (Applicants on this Motion) _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.

Paul Belzil _______________________________________________________ The Application [ 1 ] The Respondents in an application for Judicial Review being the City of Edmonton (City), Rohit Communities Inc (Rohit) and Landmark Communities Inc (Landmark), have filed a joint application for Security for Costs from the Applicant ACT for

Community Society (ACT). Factual Background [ 2 ] In 2007 and 2008 the City formulated a First Place Program to repurpose surplus school sites to allow for development into affordable townhouses for eligible first time purchasers. [ 3 ] The Program involves the City transferring program lands to Rohit and Landmark conditional on the lands being developed and marketed as directed by the City.

The developers then transfer the developed townhouse units to eligible purchasers subject to the parameters of the Program. [ 4 ] Nineteen sites within the City were designated, some of which are already developed, some of which are being currently developed, with the remainder to be developed at a later date. [ 5 ] On September 22, 2015, ACT filed an Originating Application alleging that the Program violates s 70 and 264 of the Municipal Government Act , RSA 2000, c M-26 as amended ( MGA ). [ 6 ] The City was the only named Respondent. [ 7 ] On May 9, 2016, I issued an Order adding Rohit and Landmark as Respondent parties to the Application. [ 8 ] On May 24, 2016, ACT filed an Amended Originating Application for Judicial Review which seeks the following relief: Remedy sought: 33.

The applicant seeks the following: a. Judicial review of the decision or act of the City or of Council to use the Transfer Process for the transfer of its title, estate and interest in the Program Lands. b. A declaration that the use by the City of the Transfer Process for the transfer of its title, estate and interest in the Remaining Program Lands is a violation of s. 70(1)(

a) and/or S. 264 of the MGA . c. A declaration that any motions passed by Council approving the use by the City of the Transfer Process for the transfer of its title, estate and interest in the Remaining Program Lands are invalid as being in violation of s. 70(1)(

a) and/or s. 263 of the MGA . d. A declaration setting aside as being in violation of s. 70(1)(

a) and/or s. 264 of the MGA any decisions or acts of the City approving the use by the City of the Transfer Process for the transfer of its title, estate and interest in the Remaining Program Lands. e. An Order directing that the Registrar of Land Titles transfer title to any of the Remaining Program Lands that have been transferred by the City back into the name of the City. f. An Order prohibiting or enjoining the City from continuing to use the Transfer Process in respect to the transfer of its title, estate and interest in the Remaining Program Lands. g.

An Order abridging the time for service of this Amended Application for Judicial Review. h. Costs of this application payable by the City on a solicitor and own client full indemnity basis; and i. Any such further remedies as this Honourable Court deems appropriate. [ 9 ] The joint application for Security for Costs was filed on September 1, 2016.

Discussion [ 10 ] Applications for Security for Costs are governed by Rules 4.22 and 4.23(1) which read as follows: Considerations for Security for Costs Order 4.22 The Court may order a party to provide security for payment of a costs award if the Court considers it just and reasonable to do so, taking into account all of the following: (

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta; (

b) the ability of the respondent to the application to pay the costs award; (

c) the merits of the action in which the application is filed;

(

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the action; (

e) any other matter the Court considers appropriate. . . . Contents of Security for Costs Order 4.23(1) An order to provide security for payment of a costs award must, unless the Court otherwise orders, (

a) specify the nature of the security to be provided, which may include payment into Court, (

b) require a party to whom the order is directed to provide the security no later than 2 months after the date of the order or any other time specified in the order, (

c) stay some or all applications and other proceedings in the action until the security is provided, and (

d) state that if the security is not provided in accordance with the order, as the case requires, (

i) all or part of an action is dismissed without further order, or (ii) a claim or defence is struck out. [ 11 ] It is common ground that Security for Costs orders are discretionary and that by its very wording, Rule 4.22 requires the Court to consider all relevant circumstances. a. Whether it is likely the Applicant for the order will be able to enforce an order for judgment assets in Alberta. [ 12 ] In its brief, ACT submits that if Security for Costs is ordered in excess of $10,000 the proceedings will end as it has no financial ability to raise any additional funds.

In the result, it is clear that the Respondents, City of Edmonton, Rohit and Landmark, will not be able to enforce any order for costs in excess of $10,000. b. The ability of the Respondent to the application to pay the costs award. [ 13 ] This is essentially the same argument as outlined in a. above. c. The merits of the action in which the application is filed. [ 14 ] As noted in Attila Dogan Construction & Installation Co. v.

AMEC Americas Ltd. , 2011 ABQB 175 at para 17 the inquiry into the merits of the case is preliminary only at the Security for Costs stage. [ 15 ] As was stated at para 17: It is neither possible, nor desirable, for the Court at this stage to determine which party’s case is stronger. [ 16 ] The merits of the Application for Judicial Review engages a number of issues none of which are being decided at this time: 1. Whether the City of Edmonton program violates s 70 or s 264 or both of the MGA ? 2.

If the City of Edmonton program violates s 70 or s 264 or both whether this renders the program void ab initio or voidable? 3. If voidable, whether a bifurcated or restricted remedy as requested by the Applicants is feasible? 4. Whether the Judicial Review application is barred by the provisions of R 3.15(2) which stipulates a six month limitation period to set aside a decision? 5. Whether the limitation period in R 3.15(2) applies to steps taken after the initial decisions by City Council? 6.

Will it be necessary to add additional parties to the application including individuals who have purchased houses through the program along with their mortgagees? 7. Does the Applicant qualify as a public interest litigant? 8.

The overall complexity of the application. [ 17 ] It is certainly not beyond the realm of possibility that other issues will arise in the future. [ 18 ] The Applicants submit that their application is relatively straightforward whereas the Respondents submit, that the large number of issues outlined above will necessarily make the proceedings complex and lengthy. [ 19 ] As noted, none of these issues is being decided at this time but it is clear that the parties agree on none of them and that each will be strongly contested.

d. Whether an order to give security for payment of a costs award would unduly prejudice the Respondents ability to continue the action. [ 20 ] As noted, the Applicant submits that any order for Security for Costs in excess of $10,000 will effectively end the matter. e.

Any other matter the Court considers appropriate. [ 21 ] As noted above, other issues may arise in the future. [ 22 ] It is common ground between the parties that none of the subparagraphs in R 4.22 is dispositive. [ 23 ] Rather, I must consider all of them and exercise my discretion judicially. [ 24 ] The exercise of judicial discretion involves being fair to all parties without prejudging the ultimate result of the Judicial Review Application. [ 25 ] The Applicant argues that because it only has $10,000 in cash, it would be unfair to impose an order for Security for Costs in a higher amount. [ 26 ] I do not accept this argument.

The fact that ACT can access only $10,000 cannot trump the requirement that I consider all of the factors referred to in R 4.22. [ 27 ] It is significant that the Respondents seek Security for Costs in the amount of $10,000 each for a total of $30,000. While this amount is not trivial, it certainly is not enormous. [ 28 ] In his brief, counsel for ACT observed that solicitor-client fees to date exceed $60,000 and that he is now working pro bono on this file.

The amount of solicitor-client costs incurred to date, is not reflective of a simple legal issue. [ 29 ] Given that these proceedings are at an emergent phase and given the large number of issues unresolved, one can easily foresee that multiple applications will be required. [ 30 ] Moreover, while there is no monetary claim being advanced, the reality is that the potential financial impact on the two developers and the City of Edmonton, and potentially other parties, may be enormous. [ 31 ] While it is premature to determine which column of

Schedule C will be appropriate it is certainly arguable that Column 5 should be used. Conclusion and Order [ 32 ] In considering all of the foregoing I have concluded that Security for Costs in the amount of $10,000 for each of the Respondents, for a total of $30,000 must be paid. [ 33 ] Pursuant to R 4.23(1) this amount must be paid to the Clerk of the Court. [ 34 ] Pursuant to R 4.23(1)(

b) the funds must be paid no later than 2 months from the date of this Judgment. [ 35 ] Pursuant to R 4.23(1)(

c) the proceedings are stayed until Security for Costs is paid as ordered. [ 36 ] Pursuant to R 4.23(1)(

d) if the Security for Costs is not paid as ordered, the Amended Originating Notice of Motion for Judicial Review is dismissed with costs including Costs of this Security for Costs Application. Heard on the 9 th day of September, 2016. Dated at the City of Edmonton, Alberta this 16 th day of September, 2016. R. Paul Belzil J.C.Q.B.A. Appearances:

William J. Kenny Q.C. for the Respondent Rohit Communities Inc (Applicant on this Motion) James W. Murphy Q.C. for the Respondent Landmark Communities Inc (Applicant on this Motion) Barry R. Alloway for the Respondent City of Edmonton (Applicant on this Motion) Nick Parker for ACT for Community Society (Respondent on this Motion)