Amar Developments Ltd v Jaswal, 2016 ABQB 636

Court of Queen’s Bench of Alberta Citation: Amar Developments Ltd v Jaswal, 2016 ABQB 636 Date: 20161114 Docket: 1501 01664 Registry: Calgary Between: Amar Developments Ltd. Applicant - and - Pardip Jaswal (also known as Pardeep Jaswal), Prasheila Jaswal, Harkrishan Jaswal, Parminder Jaswal, Ravinder Jaswal, Amarjit Jaswal and Rupa Jaswal Respondents _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice S.M. Bensler _______________________________________________________ I.

Introduction [ 1 ] This is an application for a declaration that the Respondents are in breach of a restrictive covenant and an order that the breach be remedied. [ 2 ] The issues are whether the paving and grading on the Respondents’ properties are in breach of the restrictive covenant and whether there are any remedies arising from the Applicant’s claim. [ 3 ] There are three properties involved, located in the residential neighborhood of Cambridge Park in the County of Rocky View, east of Calgary, Alberta.

The Applicant developed the neighborhood with the intention of creating an elite neighborhood where the homes are subject to certain standards to prevent undesirable characteristics.

[ 4 ] The Applicant submits that the Respondents’ three properties are in violation of the restrictive covenant as they have paved large portions of the properties and failed to ensure proper grading of the properties. II. Facts The Parties [ 5 ] The Applicant, Amar Development Ltd. (“Amar”) is a land developer, who developed the residential neighbourhood of Cambridge Park.

There were approximately 150 to 170 completed homes in the neighbourhood as of February 2016. [ 6 ] The Respondents, Pardip Jaswal (also known as Pardeep Jaswal), Prasheila Jaswal, Harkrishan Jaswal, Parminder Jaswal, Ravinder Jaswal, Amarjit Jaswal, and Rupa Jaswal own properties in Cambridge Park. [ 7 ] Each party has filed affidavit evidence. The Applicant relies on affidavit evidence of Rani Duhra, the Vice-President of Amar. The Respondents rely on affidavit evidence of Harkrishan Jaswal, the owner of one of the properties, and the father of the owners of the other two properties.

Purchase of the Properties [ 8 ] In and around March and April 2013, the Respondents purchased three properties, including land and residential units (the “Properties”), from Monarch Homes (“Monarch”) in the Cambridge Park neighborhood. Monarch, the builder, is not a party to this action. Rani Duhra’s son, Amar Duhra, appears to be the owner of Monarch. [ 9 ] Construction of the homes was completed by Monarch in late 2013 and the Respondents took possession of the homes in late 2013 and early 2014. The ownership of the Properties is as follows: • Property 61 is owned by Amarjit P.

Jaswal and Rupa Jaswal; • Property 97 is owned by Pardip S. Jaswal; and • Property 113 is owned by Harkrishan S. Jaswal, Parminder Singh Jaswal, and Ravinder Jaswal. [ 10 ] The purchase and sale of each property was effected through contracts between the respective Respondent owners and Monarch. Amar, as land developer, did not enter into any contracts with the Respondents. Instruments [ 11 ] There are two instruments at issue: a restrictive covenant and a drainage easement. a. Restrictive Covenant [ 12 ] Amar registered a restrictive covenant against the Properties effective August 19, 2010.

The restrictive covenant specifies that Amar claims an interest in the Properties pursuant to Architectural & Construction Guidelines (“Guidelines”). [ 13 ] The Guidelines discourage undesirable characteristics such as large driveways, over paved lots, and improper grading causing drainage issues.

The purpose of the Guidelines is to assure that Cambridge Park will be an elite neighbourhood with upscale aesthetics, and also to avoid any drainage issues caused by run-off on neighbouring lands. [ 14 ] The relevant sections of the Guidelines are: 6.1.1 GRADING AND DRAINAGE ...The stormwater design / grading plan should ensure no drainage onto neighbouring lots. Otherwise all stormwater drainage shall flow as per the approved building grade plan. ... 6.3.1 DRIVEWAYS Each lot shall have only one driveway. This driveway should be narrow until nearing the garage apron.

To promote a natural look, softly curving drives utilizing existing topography for context and alignment are encouraged. Broom finished concrete will be the minimum requirement for all driveways. ... ... 6.3.4.5 Sport Courts Sports courts are defined as any distinct hard surfaced area used for any outdoor recreational activity including, without limiting the generality of the foregoing, tennis, basketball,...

...The location of any Sports Court on any Lot must be approved by the Architectural Coordinator prior to its construction, ... ... 8. DISCRETION Not withstanding anything else set out in these guidelines, the Developer, and the Architectural Coordinator may apply their respective judgements when considering and approving anything regulated or controlled by these guidelines. In so doing, the Developer and the Architectural Coordinator may provide waivers of or relaxations to any matter set out in theses (sic) guidelines in their sole and absolute unfettered discretion. b.

Drainage Easement [ 15 ] Amar registered an overland drainage easement against the Properties effective August 19, 2010. The drainage easement requires that properties adhere to the overland drainage plan for Cambridge Park. c. Approval Process [ 16 ] Clauses 2.2 and 2.3 of the Guidelines provide for an approval process to ensure compliance with the restrictive covenant and the drainage easement. The Guidelines require that all owners of properties in Cambridge Park submit plot plans to an architectural and landscape coordinator. Amar acts as the architectural and landscape coordinator for Cambridge Park.

Prior to a builder receiving a building permit from the County of Rocky View for a particular property, the architectural and landscape coordinator must approve a plot plan and issue a compliant grading slip for said property. [ 17 ] An approved plot plan and compliant grading slip will take into account the Guidelines, and therefore the restrictive covenant, and the overland drainage plan, and therefore the drainage easement.

Because the Guidelines contemplate an approval process, a property is not in compliance with the restrictive covenant or the drainage easement unless they are in compliance with the approved plot plan and grading slip. [ 18 ] The approval process is discretionary. Clause 8 of the Guidelines permits the architectural and landscape coordinator to exercise discretion to provide waivers or relaxations of the Guidelines. The Applicant explained that this discretion is often exercised so that bigger lots may have larger driveways.

The process of providing a waiver involves consultation with engineers to ensure that proper drainage is maintained despite the waiver. [ 19 ] Once a residential unit is complete, an engineering consultant inspects the property and determines whether a property is in compliance with the approved plot plan and grading slip, as approved by the architectural and landscape coordinator. Approved Plot Plans for the Properties [ 20 ] There is an approved plot plan and a compliant grading slip for each of the Properties.

Monarch submitted plans to Amar, and Amar approved them, acting in their capacity as architectural and landscape coordinator. The approved plot plans were then submitted to the County of Rocky View in order to obtain building permits. [ 21 ] The Properties received a waiver under the Guidelines and are permitted to have asphalt driveways. Notice of the Instruments [ 22 ] When the Respondents purchased the Properties, both the restrictive covenant and the drainage easement were on title.

This is not in dispute. [ 23 ] Further, upon closing on the purchase of each property, counsel for the Respondents sent three letters to counsel for the Applicant. Each letter includes an acknowledgement of the grading requirements. The three letters, dated December 18, 2013, January 6, 2014, and January 22, 2014, respectively, each include the same paragraph: We hereby confirm that with respect to the landscaping our clients acknowledge that they will get their grades checked prior to putting grass down and will be adhering to the grades and the overland drainage plan of sub-div as per the Caveat on the title.

Paving the Properties [ 24 ] The driveways of the Properties were not paved at the time the Respondents took possession of the Properties. Sometime in June 2014, Monarch marked the dimensions of the driveways on the Properties. Monarch then paved a portion of the driveway on Property 113. After a dispute between the Respondents and Monarch regarding price, the Respondents hired a different contractor to finish the paving of Property 113 and the other two properties.

The Properties have driveways that are larger than what is depicted in the approved plot plans. [ 25 ] In addition to the driveways, asphalt and concrete areas were installed in the backyard and on the sides of the Properties that are not in the approved plot plans. Specifically, the backyard of Property 113 has a concrete pad to be used as a patio and an asphalt pad to be used as a basketball court, as well as additional asphalt on the east side of the house. Property 61 has a concrete and asphalt pad in the backyard. Property 97 has concrete adjacent to the back of the house.

Identification and Notification of Alleged Breaches [26] In June 2014, Rani Duhra was driving by the Properties and observed that rough grading of the driveways at Property 97 andProperty 61 occupied an area larger than what was in the approved plot plans. Rani Duhra swore an affidavit that she asked the pavingcontractor to stop work immediately because she needed to speak with the homeowners. She spoke to the Respondent Pardeep Jaswal, anowner of Property 61, in person on that day. She advised him of the issue and provided him with a copy of the Guidelines and theapproved plot plan for Property 61.

She also phoned the Respondent Amarjit Jaswal, one of the owners of Property 97, and advised himthat the driveways as marked appeared not to be in compliance with the Guidelines and the approved plot plan.

The RespondentHarkrishan Jaswal did not provide any evidence to confirm or conflict Rani Duhra’s evidence regarding these events. [27] Despite Rani Duhra’s actions on June 2014, the driveways of the Properties were paved and the driveways appeared to belarger than what was approved. [28] On July 16, 2014, Amar sent letters to the Respondents demanding that they comply with the Guidelines. [29] In an e-mail dated June 2, 2015, the engineering consultant, tasked with inspecting properties for compliance with theapproved plot plans and grading slips, notified Amar that the Properties were not in compliance.

Attached to this e-mail were copies ofthe approved plot plans for each Property with red markings that show the discrepancies between the Properties as-built, and theapproved plot plans. This correspondence was sent to the Respondents on June 2, 2015. The Respondent Harkrishan Jaswal confirmedthat he received a copy of this e-mail from one of his sons. III. Issues [30] The issues are: i. Whether the Respondents are in breach of the restrictive covenant and the drainage easement? ii. Whether the restrictive covenant and the drainage easement are enforceable? iii. What remedy, if any, is available? IV. Analysis i.

Breach [31] The Respondents do not dispute that they are bound by the provisions of the restrictive covenant and the drainage easement. Iwill proceed on that basis. [32] As a preliminary matter, in oral argument the Respondents allege that the Applicant forged contracts between Amar and theRespondents. It is unclear what exactly the Respondents allege, and the effect these allegations have on the issues. Neither party allegesthat the Respondents are not owners of the Properties. I will not consider this argument any further.

Applicant’s Position [33] The Applicant alleges that the Respondents are in breach of the restrictive covenant and the drainage easement with respect topaving and grading.

The alleged breaches for each property are as follows: • Property 61: the grades do not match the grades in the approved plot plan; there is an extra amount of concrete and asphalt thatdoes not appear on the approved plot plan. • Property 97: the grades on the east property line do not match grades in the approved plot plan; there is an extra amount ofconcrete that does not appear on the approved plot plan. • Property 113: the grades do not match the grades in the approved plot plan; there is an extra amount of concrete and asphalt thatdoes not appear on the approved plot plan. [34] In addition, the Applicant submits that the Properties are not in compliance with the restrictive covenant or the drainageeasement because: the driveways are not narrow until nearing the garage apron, the driveways give the Properties’ front yard theappearance of a parking lot, no waiver or relaxation of the Guidelines was provided, the improper grading will cause rainwater runoff toneighbouring properties, and the overall landscaping of the properties does not meet the minimum requirements as set out in theGuidelines.

Further, the Respondents did not receive approval to install a “sport court”, as defined in the Guidelines, on Property 113. Respondents’ Position [35] The Respondents submit that there is no breach of the restrictive covenant because the covenant uses vague and ambiguouslanguage such that there is no objective standard to determine whether a breach has occurred, relying on Newco Investments Corp vBritish Columbia Transit (1987), (BC CA), 14 BCLR (2d) 212 (BCCA).

The Respondents further submit thatambiguous language in the Guidelines should be interpreted in their favour per the rule of contra proferentem, relying on GA

Developments Ltd v Girard , 1999 ABQB 719 . [ 36 ] The Respondents retained an independent engineering company to survey the grades of the Properties and allege that the results of that independent survey show that drainage on Property 61 and 113 is towards the “proper channels”. With respect to the grading of Property 97, the Respondents submit that Monarch built the house at a lower elevation than what is in the approved plot plans which may result in flooding of Property 97. Analysis [ 37 ] The Guidelines contemplate an approval process that results in an approved plot plan and grading slip.

While there could be various landscapes and driveway dimensions that would comply with the language of the Guidelines, the approved plot plans and grading slip provide a specific

interpretation of the Guidelines. The approved plot plans and grading slip are in compliance with both the restrictive covenant and the drainage easement. The Properties do not comply with the approved plot plans and grading slips, and are therefore in breach of the restrictive covenant and the drainage easement. [ 38 ] With respect to the Respondents argument that the covenant is not sufficiently clear, these facts are distinguishable from those in Newco . In that case, the impugned covenant used the term “improvements for the public good” and the court held that the covenant lacked definition and precision and was open to a wide variety of

interpretations: at para 55. In this case, I find that the language in the Guidelines is more specific than that used in Newco . [ 39 ] Further, the meaning of the language in the Guidelines is made sufficiently clear through the application process. When the Guidelines are read in conjunction with the approved plot plan, its meaning becomes clear. There can be no confusion regarding what areas are allowed to be paved in concrete or asphalt, and what grading is required.

The Respondents’ independent engineering report does not provide a comparison to the approved plot plans, and is therefore not of any assistance in determining this matter. [ 40 ] The approved plot plans, which are approved pursuant to the Guidelines, do not result in any ambiguity, and therefore I do not have to resort to the rule of contra proferentem . [ 41 ] With respect to the Respondents allegation that Monarch built Property 97 at a lower elevation than what was approved, this Court cannot make a determination on that issue.

That issue is outside the scope of this application and Monarch is not a party to these proceedings. The Respondents are free to advance claims against Monarch as they see fit, but they cannot do so in these proceedings. [ 42 ] In

summary, the Properties do not comply with the approved plot plans and are in breach of the restrictive covenant and the drainage easement. The Respondents are in breach due to the extra asphalt and cement that does not appear in the approved plot plans and the grading of the properties that does not match the approved plot plans. ii. Enforceability [ 43 ] Given that the Properties are in breach of the restrictive covenant and the drainage easement, the next issue is whether these instruments are enforceable.

Respondents’ Position [ 44 ] The Respondents argue that if a breach of the restrictive covenant is found, that the restrictive covenant is not enforceable because the character of the development has changed. The Respondents argue that the original intent of the restrictive covenant can no longer be realized, and the restrictive covenant is therefore unenforceable. [ 45 ] The Respondents filed an affidavit and a series of photographs documenting alleged breaches of the restrictive covenant regarding driveway size and material on 16 properties in Cambridge Park.

The Respondents claim that there are more properties in breach of the restrictive covenant as it pertains to driveway paving, but have not tendered evidence to support this assertion. [ 46 ] The Respondents allege that there are drainage issues from the lots neighbouring Property 61 and Property 113 and that the Applicant has failed to enforce grading requirements against these property owners. [ 47 ] The Respondents also allege that enforcement of the restrictive covenant is vexatious.

The Respondents argue that because they were never required to pay a $7,500 security deposit to ensure compliance with the Guidelines, which they allege all other owners in the neighbourhood have paid, the Applicant has targeted the Respondents. Further, the Respondents allege the Applicant is penalizing the Respondents for choosing not to have their driveways paved by Monarch, the company owned by the Applicant’s son.

Applicant’s Position [ 48 ] The Applicant submits that evidence of non-compliance by other land owners with respect to aspects of the restrictive covenant is of deminimus value, relying on Heartstone Properties Ltd v Thiessen , 2006 ABQB 135 . Analysis a. Law [ 49 ] In certain circumstances, a valid restrictive covenant may become unenforceable. This was explained by this Court in Potts v McCann , 2002 ABQB 734 at para 32 :

At common law an otherwise valid restrictive covenant could become unenforceable if the character of the neighbourhood changedsignificantly after the imposition of the covenant. This would usually be an indication that the owners of the property in question hadacquiesced in numerous violations of the covenant, such that the original objectives of the building scheme had been defeated. Thecovenants might also become spent, obsolete or unworkable.

Further, the Court might decline to enforce a covenant if its enforcementwas vexatious. [50] Evidence of other minor and major violations of a valid restrictive covenant may cause a restrictive covenant to beunenforceable: Lafortune v Puccini (1991), (ON SC), 2 OR (3d) 689 (Ont Gen Div). [51] In Potts, the Court stated at para 35 (emphasis added): The law is however clear that the mere discharge of a restrictive covenant from one property in the building scheme, or the breach of thecovenant by a few owners, is not sufficient to undermine the entire covenant. [52] This court has defined the term “vexatious” to mean that a litigant is attempting to “abuse or misuse the legal process”:Jamieson v Denman, 2004 ABQB 593 at para 127. b.

Application [53] The Guidelines contemplate an elite neighbourhood containing estate homes. There is no evidence before the court that thecharacter of the neighbourhood has changed. The only evidence submitted by the Respondents is photographs of 16 properties in theneighbourhood, each with large driveways. The Applicant explained that 8 of the 16 properties identified by the Respondents haveapproval for the larger driveways.

The Applicant concedes that the other eight properties are not in compliance. [54] The evidence tendered by the Respondents is insufficient to find that the character of the neighbourhood has changed,particularly because the neighbourhood contains upwards of 150 homes.

Evidence of breaches of the restrictive covenant by eightproperties out of a neighbourhood with 150 properties is not sufficient to undermine the entire restrictive covenant. [55] Further, the evidence of other non-compliant properties is limited to the issue of the front driveway paving and does notaddress the other paving breaches, specifically the concrete and asphalt in the backyards of Property 61 and 113, or the grading breaches. [56] There is no evidence that the instruments are spent, obsolete, or unworkable. [57] I do not find that enforcement of the restrictive covenant and the drainage easement is vexatious.

The Applicant submits thatcompliance with the Guidelines is not only aesthetic, but also to prevent flooding issues. This is a legitimate concern for the landdeveloper. There is no evidence that the Applicant is abusing or misusing the legal process. [58] Accordingly, I conclude that the restrictive covenant and drainage easement are enforceable. iii. Remedy [59] Given that both the restrictive covenant and the drainage easement are enforceable, and the Respondents have breached bothinstruments, the next issue is what remedies, if any, are available to the Applicant.

Applicant’s Position [60] The Applicant seek a mandatory injunction requiring the Respondents to remove all cement and asphalt paving that is not inthe approved plot plans and to adjust the grading so that it is in compliance with the approved plot plans. [61] The Applicant submits that the benefit of enforcing the restrictive covenant and the drainage easement is realized in properoverland drainage in the Cambridge Park neighbourhood as well as maintaining the aesthetics and value of homes in the neighbourhood. [62] The Applicant submits that the cost of bringing the three driveways into compliance by removing asphalt and replacing it withsod would be between $5,000 and $20,000 dollars.

Respondents’ Position [63] The Respondents submit that it will be expensive and complex to remove portions of the driveways. The Respondents submitthat the cost of remedying the breaches will outweigh the benefits to the community since the Applicant’s objective of maintaining aharmonious aesthetic can no longer be achieved due to the other instances of non-compliance.

The Respondents have not provided anestimate of the cost to remedy the breaches. [64] The Respondents submit that the fact that the driveways are complete weighs against a mandatory order. [65] In addition, the Respondents submit that the Applicant has acted unfairly because the Applicant knew the Respondentswanted to have large driveways and the Applicant failed to disclose to the Respondents the restrictions on driveway size at the time theypurchased the lots. Analysis a. Law

[66] The value of a covenant affecting land lies in its continued observance rather than in monetary compensation for a breach:Crump v Kernahan (1995), (AB KB), 32 Alta LR (3d) 192 (Alta QB) at para 25. Therefore, the prima facie remedyfor a breach of a restrictive covenant is an injunction: Crump at para 31. [67] An injunction is an equitable remedy, and thus discretionary, and may be refused if it would be inequitable to grant one: GADevelopments Ltd v Girard, 1999 ABQB 719 at para 45.

This judicial discretion may include a weighing of the burden that theinjunction would inflict on the respondent and the benefit that it would confer on the applicant: Crump at para 25. [68] A court is less likely to award an injunction where substantial construction is complete and cannot easily be undone: Crump atpara 27; or when the applicant has acted unfairly: GA Developments at para 58. b. Application [69] Both parties agree that monetary damages are not appropriate in this case because the value of the restrictive covenant and thedrainage easement lies in their continued observance.

I agree. [70] The Respondents have failed to demonstrate any reason why an injunction would not be appropriate. The Respondents arguedthat they will bear a costly burden if they are ordered to remove the extra asphalt and cement and re-grade the Properties, however, theRespondents failed to provide any evidence of the magnitude of this burden. The Respondents argued that the numerous other violationsof the restrictive covenant means that there is no benefit in enforcing the covenant, however, the Respondents have only providedevidence of 16 out of 150 homes with large driveways.

This hardly meets the threshold required to undermine the restrictive covenant. [71] The paving and grading of the Properties is complete. A finding that this should militate against an injunction, in this case,would effectively encourage land owners to knowingly breach valid instruments. In this case, there is deemed and actual notice of theinstruments.

The restrictive covenant and the drainage easement were validly registered on title prior to the purchase by the Respondents.Therefore, the Respondents are deemed to be affected with notice of the instruments: section 48(4) Land Titles Act, RSA 2000, C L-4.Further, in a letter to Applicant’s counsel, counsel for the Respondents acknowledged that the Respondents would comply with thegrading requirements and drainage easement. Finally, the Respondents were informed that there may be a problem in June of 2014,before the paving was complete.

Therefore, I find that the completion of the paving and grading is not a factor militating against theorder of a permanent injunction. [72] The evidence on whether the Applicant’s acted unfairly is contradictory. The Applicant alleges that they did discuss theGuidelines with the Respondent. The Applicant’s evidence is that the Respondents were provided a copy of the Guidelines and theapproved plot plans for each property prior to signing the purchase agreements with Monarch.

Additionally, in and around June 2014when Rani Duhra drove by the Properties and saw that the driveways had been marked for paving in dimensions that did not match theapproved plot plans, she immediately informed the Respondents Pardeep and Amarjit Jaswal of their obligations. The Respondentsallege that they relied on representations made by the Applicant during the process of purchasing the Properties that large drivewayswere permitted. [73] The Respondents have the burden of showing that the Applicant acted unfairly: GA Developments at para 59.

It is uncontestedthat the Respondents were aware of the restrictive covenant and the drainage easement that mandated specific paving and gradingspecifications. There is insufficient evidence to support the Respondents’ assertion that the Applicant acted unfairly. [74] Accordingly, I find that a mandatory injunction is appropriate and order the Respondents to remedy the breaches of therestrictive covenant and the drainage easement at their own cost. V. Conclusion [75] I find that the Respondents are in breach of the restrictive covenant and the drainage easement.

I grant an injunction, orderingthe Respondents to remedy the breaches, so that the paving and grading align with the approved plot plans, at their own cost. [76] If parties cannot agree to costs, they may be spoken to within three months of today’s date. Heard on the 18th day of March, 2016. Dated at the City of Calgary, Alberta this 14th day of November, 2016. S.M. Bensler J.C.Q.B.A. Appearances:

Chelsea Wilson, Dentons Canada LLP for the Applicant Jagdeep K. Sahota, Sahota Law Office for the Respondents