Students' Association of the University of Calgary v University of Calgary, 2016 ABQB 550

Court of Queen’s Bench of Alberta Citation: Students' Association of the University of Calgary v University of Calgary, 2016 ABQB 550 Date: 20161007 Docket: 1501 04677 Registry: Calgary Between: The Students' Association of the University of Calgary, known as the University of Calgary Students' Union Plaintiff - and - The Governors of the University of Calgary and the University of Calgary Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice K.D.

Nixon _______________________________________________________ Introduction . 3 Status of 1999 Agreement and current state of affairs between the parties . 4 Issue . 6 Nature of Injunction sought 6 Test for Injunctive Relief . 7 Analysis and Application of the Legal Test 7 1. Has the Students’ Union demonstrated that it has a strong prima facie case? . 7

2. Has the Students’ Union established it will be irreparably harmed absent an interim injunction? 13 3.

Does the balance of convenience favour an injunction? . 14 Conclusion . 16 Introduction [ 1 ] The Students’ Association of the University of Calgary, known as The University of Calgary Students’ Union (the “Students’ Union”) and the Governors of the University of Calgary (the “Governors”) disagree about the ownership, use and operation of MacHall, comprised of several buildings constructed on the University of Calgary campus that house the Students’ Union and programs it runs (the “Building”).The Students’ Union has brought this application for an injunction against the Governors relating to an alleged ownership interest in the Building. [ 2 ] The Students’ Union provides a wide range of services and programs for the undergraduate students at the University of Calgary.

It is a vital part of the undergraduate experience. [ 3 ] The parties have shared space in MacHall since the original building, MacEwan Hall, was constructed in the 1960’s. In the late 1980’s, MacEwan Hall was expanded by adding the MacEwan Student Centre. Between 1999 and 2002, these buildings were redeveloped and expanded into the current MacHall. A substantial portion of the costs to construct and renovate the Building were paid by the Students’ Union. [ 4 ] Over the years, the parties entered into agreements with respect to the use and operation of the Building.

The Building was operated by the MacEwan Hall Directorate commencing in 1969 pursuant to an agreement that expired in 1974. Since 1974, the Students’ Union has managed the Building, initially on an ad hoc basis, and then pursuant to a series of operating agreements entered into in 1981, 1989, 1991 and 1999. [ 5 ] The most recent agreement, which was entered into in December 1999 (the “1999 Agreement”), expired in accordance with its terms on December 9, 2015.

Despite 2 ½ years of negotiations since July 2013, the parties have been unable to come to an agreement on the future use and operation of the Building. [ 6 ] The Students’ Union commenced legal action against the Governors seeking, among other remedies, a declaration that it is a beneficial owner of 55% of the Building.

In its Brief of Argument, the Students’ Union candidly admits that a declaration of ownership is critical to its negotiations with the Governors so that it may come to “the negotiating table as a ‘partner’ with a view to obtaining a co- ownership agreement as well as a management agreement through which [the] Students’ Union would oversee the Building’s operations.” [ 7 ] In support of its position that it is an owner, the Students’ Union relies upon representations of the Governors and references in agreements between the parties prior to 1999 that it is a 55% owner of the Building.

It also relies upon the substantial contributions it made toward the cost of construction, renovation and maintenance of the Building. [ 8 ] There is no dispute the Governors have legal title to the land on which the Building was constructed. In accordance with the law of real property, title to fixtures on the land follows title to the land. The Students’ Union made no argument that the Building was not a fixture on the land.

Rather, the Students’ Union argued that its ownership interest was referenced in documents signed by the Governors. [ 9 ] The Governors state they did not, nor was it possible at law to, convey, transfer, grant or assign an ownership interest in the Building separate from the underlying portion of the land. In their submission, the reference in documents to ownership by the Students’ Union was a misnomer that was corrected in 1981 when the parties entered into the first of a series of operating agreements (the “1981 Agreement”).

The 1981 Agreement and subsequent operating agreements acknowledge that in consideration for the monetary contributions toward the construction of the Building, the Students’ Union received certain contractual rights with respect to use and operation of the Building. [ 10 ] From 1981 onward, there were no further references to ownership in the agreements between the Governors and the Students’ Union. The Students’ Union argues that its rights in respect of the Building began to be eroded with the 1981 Agreement. [ 11 ] The 1999 Agreement is a license of occupation and management agreement.

The only reference to ownership of the Building is in

Article 4.1(a), which provides for commercial leases to be executed “by the Governors as owners of the Buildings and by the Union as manager”. As was done in the 1981 Agreement, the 1999 Agreement again acknowledges the consideration received by the Students’ Union in respect of the Building. Specifically, in its

preamble, the 1999 Agreement provides that in consideration for the funding received by the Student’s Union for the Building, the Governors agree to grant to the Students’ Union for the term of the agreement specified rights with respect to use and occupation of the Building, including the right to occupy certain space without rent, the right to retain revenues from commercial activities in its space and the right to provide certain management services in the Building. [ 12 ] The Governors submit that the Students’ Union does not have an ownership interest in the Building, but rather, has contractual rights specified in the agreement between the parties.

Status of 1999 Agreement and current state of affairs between the parties [ 13 ] The Students’ Union did not raise the ownership issue after 1981 until January 2014, during negotiations to replace the 1999 Agreement. In May 2014, the Students’ Union advised the Governors it would not sign a new operating agreement until the ownership issue was resolved.

The Students’ Union was not happy with the new agreement proposed by the Governors which, like the 1999 Agreement, was a license of occupation and management agreement. [ 14 ] Among the concerns expressed by the Students’ Union with respect to the negotiations was the inabil i ty to reach an agreement on management of the Building because of a “lack of shared understanding about the nature of the student ownership of the [Building].” The Students’ Union sought a clear starting point to the negotiations that it be “formally and legally recognized as an owner of MacHall.” [ 15 ] Despite this stance by the Students’ Union, and the Governors’ position that the Students’ Union did not have an ownership interest and that issue had been resolved in 1981, the parties continued in their efforts to come to a new agreement. [ 16 ] The Governors had three issues it wished to be addressed in the negotiations: 1.

A reserve fund to be established for capital depreciation of the Building; 2. A mechanism for the graduate students to advance their interests with respect to the Building; and 3. Clarity with respect to

definitions, responsibilities and allocation of revenue-generating space in the Building. [ 17 ] The 1999 Agreement provided for an initial term of five years, with the option of two additional five-year terms at the election of the Students’ Union. The Students’ Union exercised both those renewal options. By its terms, the 1999 Agreement was set to expire on December 9, 2014.

Unlike the prior operating and management agreements, which provided for their continuation until new agreements were reached, the 1999 Agreement permitted up to five further one-year extensions in the event neither party served notice of its intention to terminate the agreement within a specified time period. As neither party did so during the first year, the term of the agreement was extended by one year to December 9, 2015. [ 18 ] In September 2014, however, the Governors served the Students’ Union with formal notice of termination of the 1999 Agreement effective December 9, 2015.

The Governors stated their reason for doing so was to focus the negotiations to replace the 1999 Agreement. [ 19 ] The Students’ Union demanded of the Governors that they withdraw their notice of termination of the 1999 Agreement. With the parties at an impasse, the Students’ Union filed its Statement of Claim in this action. In its Claim, the Students’ Union seeks an interim injunction to continue operation of the Building under the terms of the 1999 Agreement until trial.

The present application before the Court is for that interim injunction. [ 20 ] In particular, the Students’ Union seeks to preclude the Governors from disposing of, assigning or otherwise dealing with the Building or the land on which it sits.

It also seeks to compel the Governors to continue to abide by the terms of the 1999 Agreement despite its termination, allowing the Students’ Union, in accordance with the terms of the 1999 Agreement, to continue to occupy and manage the Building and to continue to receive all revenues from commercial tenants in Students’ Union occupied space. [ 21 ] The Governors have undertaken not to convey, dispose of, or otherwise deal with the Building during the litigation. [ 22 ] Further, the Governors have stated that they have no intention to: 1. remove the Students’ Union from the Building or otherwise take space away from the undergraduate students; 2. assume the operation or management of the Students’ Union businesses, programs, activities or services it runs out of the Building; 3. interfere with the Students’ Union’s ability to permit activities in the Building that are subject to third party agreements, such as the agreement with the student newspaper, The Gauntlet; or 4. collect the revenues accruing to the Student Union from the businesses the Students’ Union operates in the Building. [ 23 ] The Governors have stated that they will continue to honour the terms of the 1999 Agreement with respect to the Students’ Union occupying its allocated space without rent, subject to the negotiation of a new agreement between the parties. [ 24 ] What would happen, absent an injunction, was made clear by Ms.

Linda Dalgetty, Vice President of Finance and Services of the University of Calgary in her December 1, 2015 affidavit, where she stated: ... the only thing the Governors will do is assume the operation and management of the Building, including the collection of rents, occupancy costs and consumable charges from the commercial leases and occupancy agreements in the Union Occupied Space. [ 25 ] In accordance with the terms of the commercial leases, upon expiry of the 1999 Agreement, rents are to be paid to the Governors rather than to the Students’ Union. Ms.

Dalgetty also confirmed that the Governors are prepared to work with the Students’ Union to direct the net proceeds received from the management and operation of the Building (which the 1999 Agreement permitted the Students’ Union to allocate) to support student programs, activities and services.

Issue [26] The central issue in this application is whether, pending determination of the Students’ Union’s rights with respect to its claimto an ownership interest in the Building, the Governors should be compelled to follow the 1999 Agreement despite its formal expiry onDecember 9, 2015. Nature of Injunction sought [27] Injunctions are either prohibitory or mandatory. A prohibitory injunction bars the enjoined party from taking certain action. Incontrast, a mandatory injunction compels a party to take positive action.

There are two parts to the injunction sought by the Students’Union: an injunction in respect of the Building, as well as an injunction regarding operation of the Building. [28] There is no dispute that the injunction sought to preclude the Governors from conveying, disposing or otherwise dealing withthe Building is a prohibitory injunction.

As the Governors have undertaken not to do so for the duration of the legal action, there is noneed for an injunction in this regard. [29] In the Governors’ submission, the application to allow the Students’ Union to continue to use and operate the Buildingpursuant to the terms of the 1999 Agreement and to continue to collect and retain all revenues in accordance with that agreement is for amandatory injunction because it seeks to impose on them positive obligations to perform an agreement that has expired.

The Students’Union submits that the nature of the injunction is prohibitory, as it seeks to prevent the Governors from taking specific action. [30] I agree with the Governors that the injunction the Students’ Union seeks is mandatory in nature, as it seeks to compel theGovernors to fulfill their obligations under the 1999 Agreement despite its expiry. In essence, the Students’ Union seeks compel theGovernors to withdraw their notice of termination of the 1999 Agreement.

Test for Injunctive Relief [31] The Supreme Court of Canada established the tripartite test for injunctive relief in RJR-MacDonald Inc v Canada (AttorneyGeneral), (SCC), [1994] 1 SCR 311 (“RJR”). To grant injunctive relief, the court must be satisfied of three elements,as summarized in the headnote at 314-315: 1. There is a serious issue to be tried; 2. Without an injunction, the Applicant would suffer irreparable harm; and 3.

The balance of convenience favours granting the injunction. [32] The test was articulated by the Supreme Court of Canada in RJR as follows, at 334: Metropolitan Stores adopted a three-stage test for courts to apply when considering an application for either a stay or an interlocutoryinjunction. First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried.Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused.

Finally, anassessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending adecision on the merits. [33] Unlike a prohibitory injunction where the threshold for a serious issue to be tried is a low one, when a mandatory injunction issought, the applicant must demonstrate a “strong and clear prima facie case”.

That is, the applicant must establish that it will “probablyprevail at trial” or is “likely to succeed at trial”: Modry v Alberta Health Services, 2015 ABCA 265 at para 37. [34] Irreparable harm refers to the nature of the harm, not its magnitude. It is harm that cannot be quantified in money terms orwhich cannot be cured, for example, where one party cannot collect money damages from the other: RJR at para 64. Loss of the right toland and “all that can be done with it” was found to be irreparable harm in Southland Canada Inc v Zarcan Equities Ltd, 1998 ABQB 230at para 21, aff’d 1998 ABCA 336.

Where a mandatory injunction is sought to prevent losses, the plaintiff must show “a very strongprobability on the facts that grave damages will accrue in the future”: Peter Pond Shopping Centre Corp v Zellers Inc, 2012 ABQB 264at para 28. [35] Many factors may be considered in the balance of convenience: RJR at 342. When the availability of injunctive relief dependsupon the balancing of the burden and benefit the costliness of a mandatory injunction may tip the balance against the injunction: Robert JSharpe, Injunctions and Specific Performance, loose-leaf (Toronto: Canada Law Book, 2014), ch 1 at 24.

Analysis and Application of the Legal Test 1. Has the Students’ Union demonstrated that it has a strong prima faciecase? [36] The Governors assert that the Students’ Union does not have a strong prima facie case for three reasons:

1. The Governors never conveyed, transferred, granted or assigned any interest in the Building to the Students’ Union or promised to do so in the future; 2. It is unlikely the Students’ Union will meet the legal tests for the causes of action advanced in its Statement of Claim. 3. The Students’ Union’s claims are time-barred. [ 37 ] The issue in this case is unique because the Students’ Union asserts it has an interest in the Building, a fixture on the land, but claims no ownership interest in the land itself. The Students’ Union made no argument that the Building was not a fixture.

In accordance with real property law, however, ownership of fixtures on the land follows ownership of the land. This raises the question as to what the parties meant when they used the word “ownership”. [ 38 ] The Students’ Union asserts that it has a beneficial interest in the Building proportional to its monetary contributions toward construction and renovation of the Building. It says this beneficial interest is created by way of a purchase money resulting trust or constructive trust.

It relies upon references to the Students’ Union’s having a 55% ownership or “equity” interest that appear in documentation, including Minutes from Board of Governors meetings and in agreements between the parties prior to 1981. [ 39 ] As stated earlier in these Reasons, the Governors assert that ownership was a misnomer that was corrected in 1981 when the parties entered into the 1981 Agreement.

Rather than referring to the Students’ Union as an owner, the 1981Agreement expressly acknowledges in the recitals that the intention of the parties since the original MacHall was constructed was that 55% of the occupiable space would be used for legitimate student purposes or purposes related to legitimate student benefits as approved by the Students’ Union. [ 40 ] It also expressly acknowledges in the recitals that in recognition of the contribution of the Students’ Union to the construction of the Building (then, the original MacEwan Hall), the administration, operation and maintenance of the Building would be a shared responsi b ility, so long as the Building was operated as a facility for the shared use of student and University purposes, such administration, operation and maintenance to be in accordance with the terms specified. [ 41 ] No further reference to ownership appears in agreements between the parties from 1981 onward.

The only reference to ownership since 1981 appears in the licence and occupation agreement reached in 1999 which provides for commercial leases to be executed by the Governors as “owners” and the Students’ Union as “managers” of the Building. [ 42 ] There is no doubt that, prior to 1981, the parties used the words “owners”, “vested” and “equity” in relation to the Students’ Union’s interest in the Building. In discussions between the Students’ Union and the Governors in 1967, references were made to the parties jointly operating and cooperatively managing a building.

When the parties entered into an agreement several years later (by way of an operating agreement in 1969), it provided that ownership of the Building was vested in the Students’ Union (55%) and the Governors (45%). At that time, building leases included the Students’ Union as well as the Governors as lessees. In its May 14, 1974 meeting, the Governors acknowledged that the Students’ Union had a 55% ownership interest. In his letter of November 21, 1978, to the Students’ Union, after reviewing the history of the development of the Building, the then-Secretary of the Board of Directors, Dr.

McKinnon, stated: From the historical information provided above, it should now be clear to you that the Board’s view of the situation is that the Students’ Union owns 55% of MacEwan Hall. [ 43 ] Notwithstanding these references, there are significant difficulties with the claim of the Students’ Union to an ownership interest in the Building, including: 1. At law, ownership of a fixture on the land follows ownership of the land. 2. The Governors acquired title to the land by grant from the Province of Alberta.

They are precluded by statute from conveying an ownership interest in the land or any part without permission of the Lieutenant Governor in Council: the Post-secondary Learning Act , SA 2003, c P-19.5, as amended, s 67(1.1); the Universities Act , RSA 1980, c U-5, s 20(3); the Universities Act , RSA 1970, c 378, s 18(3); An Act Respecting Provincial Universities , SA 1966, c 105, s 18(3); and the University Act , RSA 1955, c 351, s 6. There is no evidence the Governors ever conveyed, transferred, granted or assigned an ownership interest in the land, or that they represented that they would do so. 3.

There is no evidence that the Governors promised to apply to the Lieutenant Governor in Council to subdivide the land (which is on the same title as the rest of the campus land) or consented to a conveyance, transfer, grant or assignment of an ownership interest to the Students’ Union. 4.

Although both the Governors and the Students’ Union referred to the Students’ Union as an owner of the Building in documents and in agreements and also referred to the Students’ Union as having an “equity” interest in the Building, even at one point discussing the Governors purchasing the “equity” interest of the Students’ Union in the Building, there was no definition of what was meant by the concept of ownership in a building apart from the land, but there was discussion about joint operation and management of the Building. 5.

In 1979 - 1980, the Governors (having been alerted by the then-Chairman of the Board, Mr. MacKimmie, a prominent Calgary lawyer, that the Building, as a fixture on the land, was owned by the Governors) refused to acknowledge an ownership interest because doing so would perpetuate what they viewed as a misunderstanding.

Instead, the Governors proposed that appropriate recognition be given to the cash contribution toward the Building “by conveying management rights in the building through an operating agreement and/or lease of space.” The Students’ Union threatened to sue the Governors for a declaration of ownership but ultimately abandoned this and entered into the 1981 Agreement which contains no reference to ownership. 6. The Students’ Union continued to enter into further operating agreements with the Governors after the 1981 Agreement that

were inconsistent with its claim of ownership. The most recent agreement, the 1999 Agreement, is a license and occupancy agreement,which includes

Article 4.1(

a) in reference to commercial leases to be executed by the Governors as owner of the Building and theStudents’ Union as manager. [44] The evidence, reflected in the operating agreements since 1981 and including the 1999 Agreement, supports the conclusionthat what the parties intended by “ownership”, and what the Students’ Union received for its substantial monetary contributions towardthe Building, were certain contractual rights with respect to use and operation of the Building.

The evidence supports the conclusion thatthe previous references to “ownership” were misnomers and what the parties meant was clarified and resolved in the 1981 Agreement. [45] The Students’ Union has not demonstrated on this application that there can be an ownership interest in a building affixed toland owned by another, or that the Governors would have the legal authority to grant such an interest in light of the statutory regime towhich it is subject.

I cannot conclude that the Students’ Union has demonstrated a strong prima facie case that it has an ownershipinterest in the Building. [46] The focus of the argument on this injunction application was the claim by the Student’s Union that the Governors hold in trustfor the Students’ Union an ownership interest in the Building pursuant to a purchase money resulting trust, or a constructive trust basedon unjust enrichment or breach of fiduciary duty. [47] The requirements for a purchase money resulting trust were delineated in Rascal Trucking Ltd v Nishi, 2013 SCC 33 asfollows at para 1: A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not takelegal title to that property.

Where the person advancing the funds is unrelated to the person taking title, the law presumes that the partiesintended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. [48] The Alberta Court of Appeal in B&R Development Corporation v Trail South Developments Inc, 2012 ABCA 351, leave toappeal to SCC ref’d [2013] SCCA No 34, set out four requirements for a purchase money resulting trust, at paras 60-61: 1. The trustee has title to the property; 2.

The claimant supplied part or all of the purchase price when the property was being purchased from a third party andtransferred to the name of the trustee; 3. The claimant acted throughout as purchaser; and 4. The claimant must establish that it advanced funds in the character of a purchaser, not as a creditor. [49] The Governors argue that a purchase money resulting trust was not created in this case because the Students’ Unioncontributed toward the improvements on the land but not toward the purchase price of the land.

The Students’ Union does not seek anownership interest in the land, but only in the Building. [50] Although the evidence does not support the conclusion that the contributions toward the construction of the Building weregifts or were made by the Students’ Union acting in the character of a creditor, it establishes that the Students’ Union contributedtowards improvements on the land, not its purchase. [51] The Students’ Union has not established that it has a strong prima facie case that it is a beneficial owner of the Buildingpursuant to a purchase money resulting trust. [52] Unlike a resulting trust, which depends on the parties’ intentions, a constructive trust does not depend on the parties’intentions and may be imposed “where good conscience so requires”: Soulos v Korkontzilas, (SCC), [1997] 2 SCR 217(“Soulos”) at para 34. [53] A constructive trust may arise to remedy situations of unjust enrichment, and may be available in other situations: Soulos atpara 22.

The Students’ Union relies on two circumstances where constructive trusts have been granted to argue that a constructive trustshould be found in this case: wrongful acquisition of property and unjust enrichment. [54] To establish a constructive trust based on wrongful conduct, the Students’ Union must establish the following: 1. That the Governors had an equitable obligation in relation to the activities giving rise to the assets in its hands; 2. That the assets resulted from activities by the Governors in breach of its equitable obligation to the Students’ Union; 3.

That there is a legitimate reason for seeking a proprietary remedy; and 4. That there are no factors which would render a constructive trust unjust in all the circumstances: Soulos at para 35. [55] In order to establish an equitable obligation, the Students’ Union must establish that the Governors owed to it a fiduciaryobligation with respect to the Building. [56] A fiduciary exercises a measure of control over another by virtue of its ability to unilaterally exercise a discretion or poweraffecting another’s legal or practical interests.

A beneficiary is vulnerable to the actions of a fiduciary: Frame v Smith, (SCC), [1987] 2 SCR 99 (“Frame”) at 136. [57] Three requirements for an ad hoc fiduciary duty to arise were articulated in Elder Advocates of Alberta Society v Alberta,2011 SCC 24 at para 36. In addition to the vulnerability arising from the relationship, as discussed in Frame, there must be:

1. An undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary; 2. A defined person vulnerable to a fiduciary’s control; and 3.

A legal or substantial practical interest of the beneficiary that stands to be adversely affected by the alleged fiduciary’sexercise of discretion or control. [58] The question “is whether, given all the surrounding circumstances, one party could reasonably have expected that the otherparty would act in the former’s best interests with respect to the subject matter at issue”: Hodgkinson v Simms, (SCC),[1994] 3 SCR 377 at paras 32-33. [59] The Students’ Union argues that there is an ad hoc fiduciary duty owed to it by the Governors.

The Students’ Union asserts itrelied on the Governors to act in the best interests of the Students’ Union to protect its ownership interest in the Building, given thesubstantial contribution the Student’s Union made toward its construction. It also asserts that the Governors put their ownership interestsahead of that of the Students’ Union, particularly because the Governors contractually agreed on a co-ownership interest in the past. [60] The Students’ Union has not established it is likely to succeed in its claim that the Governors owed it a fiduciary duty withrespect to the Building.

The Students’ Union is not a vulnerable party, under the control or discretion of the Governors. It is asophisticated party that retains its own legal advisors and is capable of looking after its own interests. Despite the Students’ Union’sposition that its interests were eroded commencing with the 1981 Agreement, it retained its own legal advisors with respect to thatagreement. The evidence does not support any express or implied undertaking that the Governors would look out for the interests of theStudents’ Union.

Further, the Students’ Union has not demonstrated a strong prime facie case that it has an ownership interest in theBuilding that the Governors had an obligation to protect. [61] The Students’ Union also argues this is an appropriate situation to impose a constructive trust on the basis of unjustenrichment. [62] To establish unjust enrichment, the Students’ Union must show an enrichment of the Governors to the detriment of theStudents’ Union without a juristic reason for such enrichment: Kerr v Baranow, 2011 SCC 10 at para 32. [63] The Students’ Union submits that it did not intend to gift the funds raised for construction and subsequent expansion andimprovement of the Building or its time spent toward the Building, but rather made these contributions in the expectation it would have aco-ownership interest.

It submits that the Governors are enriched as a result of these contributions and, further, that there is no juristicreason for that enrichment. [64] The Students’ Union has not demonstrated a strong prime facie case for a constructive trust, given the series of agreementsbetween the parties commencing in 1981. Those agreements expressly provide that the consideration received by the Students’ Union forits contributions toward the Building were the contractual entitlements set out in those agreements. These include certain rights regardingthe operation and management of the Building.

Those agreements would provide a juristic reason for any enrichment. [65] In its Statement of Claim, the Students’ Union also asserts claims of negligent misrepresentation, breach of contract andestoppel. [66] In this regard, the Students’ Union submits: 1. The Governors negligently represented to the Student’s Union that it would acquire an ownership interest in the Building,and the Students’ Union relied on the Governors’ representation in making significant contributions towards the construction andrenovation of the Building; 2.

The Governors breached their agreement with the Students’ Union by failing to grant the Students’ Union its share of theBuilding and failing to act in the best interests of the Students’ Union; and 3. The Governors are estopped from denying the Students’ Union has an ownership interest in the Building because theyrepresented to the Students’ Union that it had such an interest. [67] The Students’ Union has not established it is likely to succeed at trial in any of these causes of actions.

As stated earlier inthese Reasons, the evidence supports the conclusion that the reference to ownership was a misnomer, which was clarified initially in the1981 Agreement, and in the subsequent operating agreements leading up to the 1999 Agreement.

All of these agreements are inconsistentwith an ownership interest in favour of the Students’ Union. [68] In light of my conclusion above that the Students’ Union has not established a strong prima facie case, it is not necessary toconsider the merits of the Governors’ position that the action brought by the Students’ Union is outside the limitation period, and istherefore time-barred. 2.

Has the Students’ Union established it will be irreparably harmed absentan interim injunction? [69] The second part of the tri-partite test is whether, in the absence of an injunction, the Students’ Union will suffer irreparableharm. In the absence of an injunction, the Students’ Union says the following harm, not compensable in damages, will result: 1. There is a serious risk it will lose its ownership rights in the Building as well as its ability to utilize, occupy and manage theBuilding space;

2. The Governors will take over student-run programs, but do not possess enough knowledge to run them efficiently or without negative impact on the undergraduate students; 3. It will lose significant revenue it currently receives from the Building; 4. It will lose control and funding of Students’ Union-run services; 5. The relationship between the Students’ Union and third party tenants will be harmed; and 6.

If the Governors are able to take over the Students’ Union revenue stream, it faces the serious risk of becoming insolvent, as it will not be able to service a loan from the Royal Bank of Canada. [ 70 ] The Students’ Union’s arguments about the harm it could suffer are based on a misunderstanding of the Governors’ intentions on expiry of the 1999 Agreement. [ 71 ] As stated earlier in these Reasons, the Governors have made clear the only changes that will occur on the expiry of the 1999 Agreement are: 1. The Governors, rather than the Students’ Union, will maintain the Building; 2.

The Governors, rather than the Students’ Union, will collect the revenues from the commercial tenants in the Students’ Union-occupied space; and 3.

The revenues from the commercial tenants will be used for student purposes in consultation with the Students’ Union. [ 72 ] Although the Students’ Union has not established on this application that it has a prima facie ownership interest in the Building, the absence of an injunction will not interfere with the right of the Students’ Union to pursue its claim. [ 73 ] The Students’ Union argues that the Governors are not bound by their stated intentions and that they could take additional steps, such as removing the Students’ Union from the Building.

Were the Governors to do so those would be different circumstances that may establish irreparable harm on a subsequent injunction application. [ 74 ] In his April 28, 2016 affidavit, Mr. Barry Dyck, Director of Operations with the Students’ Union, expressed concern that the Governors have mismanaged their space in the Building and failed to keep it in proper repair. He asserts that the Governors do not have sufficient staff to properly maintain the Building and cannot be expected to do so. [ 75 ] The Governors maintain more than 10,000,000 square feet of space on the University of Calgary campus.

They assert they are more than capable of maintaining the Building. [ 76 ] The Students’ Union’s list of the Governors’ failures with respect to maintenance does not establish the Students’ Union will suffer irreparable harm in the event the Governors take over maintenance of the Building. [ 77 ] In accordance with the commercial leases and the 1999 Agreement, in the event the Students’ Union ceases to be the manager of the Building (which occurs on termination of the 1999 Agreement), the Governors are entitled to collect the commercial revenues. [ 78 ] The Governors do not intend to take over the entire revenue stream of the Students’ Union.

Although the Governors would collect the revenue from the commercial tenants, this comprises approximately 15% of the Students’ Union’s total revenue. It is the intention of the Governors to work with the Students’ Union to use that revenue, net of utilities and operating costs, in support of student programs, activities and services. [ 79 ] The Students’ Union takes great umbrage at that the notion the Governors would have a say in where these revenues are allocated.

However, this does not establish that there will be irreparable harm to the Students’ Union or the undergraduate students as a result of being required to discuss with the Governors how these funds should be spent for the students’ benefit. [ 80 ] The 2002 loan the Students’ Union has from the Royal Bank is fully collateralized by the assignment of student fees.

I find there is no risk of default. [ 81 ] Lastly, the Students’ Union has not established that the relationship between the commercial tenants and the Students’ Union will be harmed should the tenants, in accordance with their leases, pay their rent to the Governors. [ 82 ] In his April 25, 2016 Affidavit, Mr.

Levi Nilson, the then-President of the Students’ Union, stated that upon receipt of notice from the Governors that the Students’ Union was no longer the manager of the Building and that rents would now be payable to the Governors, commercial tenants “panicked” and expressed concern over whether they would be able to operate their businesses without interruption.

The Students’ Union provided no evidence to substantiate any panic among the tenants. [ 83 ] It is difficult to conceive how the Governors’ taking over management of the Building and collecting rents from the commercial tenants, as provided for in the leases, would cause panic or irreparably harm the relationship between the tenants and the Students’ Union. [ 84 ] Mr.

Nilson asserts that in the event the Students’ Union cannot collect the revenues from the commercial tenants it will be unable to fund student activities, programs, services and advocacy; pay the salaries of employees; communicate effectively with the undergraduate student body; fund bursaries and grants to the students; or maintain its student space in the Building. The evidence does not support these assertions. [ 85 ] Finally, Mr. Nilson’s assertion that the Students’ Union’s inability to collect commercial tenant rents will “cripple” the

Students’ Union and its students is not substantiated by the evidence before me. 3. Does the balance of convenience favour an injunction? [ 86 ] The Students’ Union submits that the balance of convenience favours an injunction because the Governors’ action is “in direct violation of its contractual, trust and fiduciary obligations and other duties”. It further submits that: 1. There is no cost to the Governors should an injunction not be granted; 2. The status quo with respect to the operation of the Building would continue as it has for the past decades; 3.

In addition to the loss of revenue to support student activities and programs, the parties would be left without an agreement to govern their affairs with respect to the Building and would result in the possible loss of the Students’ Union’s ability to assert its ownership claim; 4. The parties previously agreed to continue operations of the Building in accordance with prior agreements until they reached new agreements; and 5.

The Governors have not offered an agreement to replace the 1999 Agreement that preserves or acknowledges the Students’ Union’s “long established rights in the Building.” [ 87 ] In reply, the Governors assert that the Students’ Union has not met the strong prima facie test; nor has it established irreparable harm.

Further, in the Governors’ submission, extending t he 1999 Agreement would not preserve the status quo but fundamentally alter it because the contract, by its own terms, has expired. [ 88 ] I agree with the Governors that the balance of convenience does not favour granting the injunction. [ 89 ] With respect to the management of the Building, both parties agreed in the 1999 Agreement to allow for its termination in the manner exercised by the Governors. Upon termination of the agreement, the Students’ Union ceases to be the manager and is no longer entitled to collect the commercial tenant rents.

Despite the expiry of the 1999 Agreement, however, no changes would be made to the Students’ Union’s entitlement to continue to occupy its space. The operation and management of the Building would continue despite the expiry of the agreement, with the exceptions discussed above. [ 90 ] The decision in Hamburg Honda v Honda Canada Inc , [2009] OJ No 5152 (SCJ) (“ Hamburg Honda ”) is instructive. There, the Court considered the application for an injunction to extend a contract by invalidating a notice of non-renewal for which the agreement provided.

The applicant in Hamburg Honda asserted that it had not been fairly dealt with in respect to the renewal of a franchise agreement for which it had been induced to spend significant funds. [ 91 ] In dismissing the application, the Court stated at para 13 that expiry of an agreement at the end of its term is the status quo . [ 92 ] As was the case in Hamburg Honda , neither the Students’ Union nor the Governors had a right to further renewals.

As was the case in Hamburg Honda , the relief sought by the Students’ Union “... would amount to the creation of a new right that does not exist in the contract.” As was the case in Hamburg Honda , “[t]he balance of convenience favours allowing the contracts to run their course on their own terms”: para 13. [ 93 ] What the Students’ Union asks is that this Court re-write the contract between the parties. Mandating the continuation of the 1999 Agreement would alter the parties’ contractual relationship.

It would give the Students’ Union rights for which it did not bargain, and impose upon the Governors obligations it did not undertake. I agree with the Governors that mandating the continuation of the 1999 Agreement would be an improper interference with a party’s freedom to contract. [ 94 ] As the Governors correctly stated, this is not an action for the specific performance of the 1999 Agreement, a declaration that it is a binding agreement nor an action for breach of that agreement.

What the Students’ Union seeks is to continue its relationship with the Governors under the terms of an agreement that the Students’ Union asserts inaccurately describes its rights. [ 95 ] It would be extraordinary for a court to mandate a party to follow an agreement that terminated in accordance with its terms in order to give one party an advantage in negotiating a new agreement.

This is particularly so when the interest the party seeks to have acknowledged in a new agreement is inconsistent with the agreements between the parties for the past 35 years. [ 96 ] Even if the Students’ Union is successful in its claim to an ownership interest, the parties will still need to come to an agreement with respect to management and operation of the Building. [ 97 ] As both the Governors and the Students’ Union have emphasized, they have had a long history of working together with respect to the operation and management of the Building.

There is no reason to believe that, absent an injunction mandating the continuation of the 1999 Agreement, this would be different. Conclusion [ 98 ] The Students’ Union has not established it has a strong prima facie case. Its ability to pursue its claim to ownership will not be lost in the absence of an injunction. Further, the Students’ Union has not established it will suffer irreparable harm in the absence of an injunction. Finally, the balance of convenience does not favour an injunction. [ 99 ] In conclusion, the application by the Students’ Union for an interim injunction is dismissed.

Heard on the 5 th day of May, 2016 and the 3 rd day of June, 2016. Dated at the City of Calgary, Alberta this 6 th day of October, 2016. K.D. Nixon J.C.Q.B.A. Appearances: Michael C. Kwiatkowski McLeod Law LLP for the Plaintiff Eugene J. Bodnar /Aditya M. Badami Norton Rose Fulbright Canada LLP for the Defendants