Virginia May Plaintiff - v. -, 2017 ABQB 617

Court of Queen’s Bench of Alberta Citation: May v 1986855 Alberta Ltd, 2017 ABQB 617 Date: 20171016 Docket: 1703 11666 Registry: Edmonton Between: Virginia May Plaintiff - and - 1986855 Alberta Ltd., Norstar Industries Ltd., 1282127 Alberta Ltd. carrying on business under the name and style of Anu Homes, Neil Vinet and Anuj Gupta Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice B.R.

Burrows _______________________________________________________ [ 1 ] Virginia May seeks an interim injunction enjoining the Defendants from breaching or inducing the breach of four agreements which she alleges are binding on 1986855 Alberta Ltd. and herself. [ 2 ] The other corporate defendants are the shareholders of 1986955. The individual defendants are the directors of 1986955 and the shareholders of the corporate defendants that own it.

[ 3 ] Ms. May owns a house in the Strathcona area of Edmonton. 1986855 owns the lot adjacent to Ms. May’s lot. I will refer to Ms. May’s lot as “Lot 16” and 1986855’s lot as “Lot 15”. [ 4 ] When Ms. May purchased Lot 16 in 2008 there was a house on Lot 15. When 1986855 purchased Lot 15 in 2016 the house was still there. Both that house and Ms. May’s house were of significant vintage having been built probably about 100 years ago. As I understand the evidence, Ms. May has incurred very significant expense in renovating and restoring her house.

I understand that the house on Lot 15 was in a state of significant decay when 1986855 bought Lot 15 and 1986855 has demolished it. [ 5 ] At the back of the lots, that is at the east side of the lots, there is a double garage. One half of the garage is on Lot 15 and the other half is on Lot 16. I understand that the garage is roughly the same vintage as the houses. The north half of the garage is for the use of the occupant of Lot 15 and the south half is for the use of the occupant of Lot 16.

The center wall of the garage, that is, the wall between the two garage bays, is on the property line. [ 6 ] There is a “common driveway” proceeding from the street in front of the Lots, leading from 100 th Street, between the houses (when they were both there), to the garage. The “car doors” of the garage, like the houses, face west. Vehicle access to the garage, when it was used to house vehicles, was from the front of the Lots 15 and 16, not from the alley behind the garage. [ 7 ] On September 27, 1999, the then owners of the two lots entered into four agreements: a.

An encroachment agreement by which the owner of Lot 15 granted certain rights in relation to the portion of the garage on Lot 15 to the owner of Lot 16. b. A second encroachment agreement, the terms of which parallel exactly the terms of the first encroachment agreement, and by which the owner of Lot 16 granted certain rights in relation to the portion of the garage on Lot 16 to the owner of Lot 15. c.

A “Party Wall Agreement” by which the owners of each lot granted rights to the owner of the other lot in respect mainly of the maintenance of the centre wall of the shared garage building and to at least some elements of the structures attached to that center wall. d. A “Mutual Easement” by which the owners of each lot granted an easement to the owner of the other lot in relation to the common driveway leading from 100 th Street, between the houses to the double garage at the back of the lots. [ 8 ] The agreements are not models of clear drafting.

The encroachment agreements in particular are, in my view, very confusing. As I read them, it appears possible that they have, in some provisions, confused the two lots – possibly creating, for example, an obligation on the part of the owner of Lot 16, at his or her expense, to keep the portion of the garage on Lot 15 in good repair (paragraph 3a). [ 9 ] The term “Encroachment” is used in the first provision of each agreement apparently in reference to the portion of the garage on one lot, and in the second provision in reference to the portion of the garage on the other lot.

Confusion is extended when terms such as “Encroachment Lands” are used as if they had been defined though they have not been. [ 10 ] The Party Wall Agreement appears to refer in most of its provisions to only the center wall of the double garage, as opposed to the entirety of the double garage building or any other portion of it. Though the agreement does not expressly so recite, I expect it was intended to be a Party Wall Agreement within the meaning of the Land Titles Act , s. 71. [ 11 ] One provision of the Party Wall Agreement is of particular significance to this application.

Paragraph 14 provides: The parties hereto agree that no more than one distinct dwelling unit shall be permitted on each of Parcels A [Lot 15] and B [Lot 16] and shall take such steps as may be necessary to ensure that no additional dwelling units are developed or occupied. [ 12 ] The encroachment agreements each contain a provision which appears to be inconsistent with paragraph 14 of the Party Wall Agreement.

Paragraph 4 of each of them provides: Subject to compliance with all applicable laws, the Grantor shall be entitled to construct any development upon the Grantor’s Lands up to and immediately adjacent to the Encroachment [which, in most provisions of the agreement appears to mean the portion of the garage on the Grantor’s lot] without the prior consent of the Owner . . . [ 13 ] The Party Wall Agreement and the Mutual Easement Agreement each expressly provide that they shall run with the land, shall bind and benefit the heirs, executors, administrators, successors and assigns of the parties who initially agreed to them, and may be registered on the titles to each of the lots.

The encroachment agreements provide that they shall benefit and bind the successor and assigns of the original parties but do not expressly provide that they run with the land or that they may be registered against the titles to the lots. All four agreements have been registered against the titles to each of the lots. [ 14 ] It appears that 1986855 purchased Lot 15 with the intention of tearing down the house on that lot and building multiple dwellings on the lot. The evidence indicates that 1986855 intends to build “a 3 storey duplex property” on Lot 15.

The evidence also suggests that such a development would be consistent with the zoning of the area. [ 15 ] 1986855 and Ms. May have communicated as to the possibility of 1986855 buying Ms. May’s lot. They have not been able to agree to a price. [ 16 ] Ms. May communicated to 1986855 her concern that its proposed development of Lot 15 would interfere with her enjoyment of her property, would significantly reduce the value of her property, and would constitute a breach of paragraph 14 of the Party Wall Agreement. [ 17 ] As mentioned 1986855 has torn down the house on Lot 15.

The garage building is still standing, but it is in a state of very

significant distress. On September 8, 2016, the City of Edmonton ordered Ms. May to repair or demolish the portion of the garage on Lot 16. She had it repaired. On September 16, a City inspector determined that the garage (or at least the portion on Lot 16) was in compliance with the City Standards Bylaw 14600 and closed the file. In October 2016, a City Safety Codes Officer inspected the garage and ordered that the garage either be demolished or repaired. 1986855 consented to the demolition. Ms. May did not.

On June 8, 2017, the City issued a permit for the demolition of the portion of the garage on Lot 15 to 1986855. The permit expressly notes that it is subject to “any caveats, restrictive covenants or easements that might be attached to the Site.” [ 18 ] 1986855 has not acted on the permit. The portion of the garage on Lot 15 has not been demolished. However it continues to be in very distressed condition.

The blocks of its northeast corner have fallen leaving a large gaping hole from ground to roof. 1986855 has filed the affidavit of a professional engineer who has inspected the garage and reached this opinion: Therefore based on our observations, engineering analysis of the noted assemblies, and the fore mentioned financial comparisons; the building is beyond economic repair to render building structurally compliant, and should therefore be demolished and replaced with a new building if still required.

Considering that the garage is situated on two distinct lots, one of the parties may elect to retain their half of the building. Since the trusses bear on the front and rear walls, a decision to do so could technically work structurally . . . [ 19 ] In the course of demolishing the house on Lot 15, 1986955 caused debris to accumulate on the common driveway, including the portion of it which is on Lot 16. They also put up a temporary fence along the common driveway, apparently largely if not entirely on the Lot 16 side of it. Mr.

Summers advised, though it is not in evidence, that the debris which was on the Lot 16 side of the common driveway has been removed and that the fence is no longer on the Lot 16 side of the driveway, though, as I understand it, it is still on the Lot 15 side of the common driveway and prevents vehicle access from 100 Street to the garage. The evidence does not reveal whether if the temporary fence was not present the common driveway would be usable. [ 20 ] At present, Ms. May uses the Lot 16 portion of the garage for storage of her possessions – not for the storage of a vehicle.

The evidence does not disclose whether the blocking of the common driveway significantly interferes with her use of the garage for that purpose. [ 21 ] As noted, in the Application, Ms. May seeks an interim injunction restraining the Defendants from breaching or inducing the breach of each of the four agreements. In his submissions, Mr. Taylor indicated that she seeks five things: a. An order enjoining the Defendants from constructing a multi-dwelling structure on Lot 15. b. An order enjoining the Defendants from obstructing or altering the common driveway. c.

An order enjoining the Defendants from trespassing on her property by fencing or leaving debris on the common driveway. d. An order enjoining the Defendants from demolishing the garage or the portion of it on Lot 15 without Ms. May’s consent. e. An order enjoining the Defendants from impeding Ms. May’s entry onto Lot 15 in accordance with the terms of the agreements, to effect repairs to the garage including the portion of it which is on Lot 15. [ 22 ] Mr.

Summers noted that these specific remedies are not listed in the Application and submitted that they should not be granted without appropriate notice to the Defendants. Mr. Taylor responded that he would be satisfied if the injunction were granted in the more general terms described in the Application document. Serious Issue to be Tried [ 23 ] Mr. Summers conceded that the facts presented give rise to serious issues. I therefore do not need to dwell long on the first part of the test for an interim injunction.

Nevertheless, I wish to note that though this portion of the test is met, it is far from clear that the agreements give Ms. May the rights she claims. I have noted the confusing and possibly mistaken drafting of the encroachment agreements, the apparent limitation of the Party Wall Agreement to rights respecting little more than the center wall of the double garage (and not the entire garage structure on the other party’s lot), and the inconsistency between provisions of the encroachment agreements and the Party Wall Agreement concerning restriction of the right of each owner to develop their property.

Irreparable Harm [ 24 ] In my view this part of the test is not satisfied. [ 25 ] The affidavit Ms. May filed in support of this application contains no evidence of irreparable harm. The subject is simply not addressed in the affidavit. [ 26 ] Paragraph 37 of the Statement of Claim alleges as follows: As a direct result of the breaches of duty and unlawful actions and omissions of the Defendants, Ms. May has suffered and will continue to suffer loss, damage and irreparable harm, the particulars of which include: (

a) loss of use and enjoyment of the May Property [Lot 16]; (

b) loss of use and enjoyment of the Common Driveway and Shared Garage; (

c) substantial diminution in value to the May Property;

(

d) costs to repair the physical damage to and obstruction of the May Property; (

e) costs to repair, reconstruct, and remove obstructions on the Common Driveway; (

f) costs to repair, maintain, and reconstruct the Shared Garage; (

g) pain, suffering, emotional and mental distress, and injured feelings; and (

h) such further and other loss and damage as may be proven at trial. [ 27 ] In my view, all of the elements of damage listed in paragraph 37 are capable of being remedied by awards of monetary damages. Where the alleged damage is a cost of repair (paragraph 37 (d) (

e) and (f)), it is obviously a claim for monetary damages. Ms. May claims general and special damages totalling $650,000 in the Statement of Claim. [ 28 ] Similarly, if the Defendants build a multi-dwelling structure on Lot 15 and that amounts to a breach of the agreements, and if the value of Ms.

May’s property is diminished as a result, the amount of the loss is capable of proof and of being the subject of an award of damages. [ 29 ] Pain, suffering, emotional and mental distress are heads of damage commonly subject to assessment as monetary awards. [ 30 ] As to the loss of use and enjoyment of her property, I am not convinced that the evidence establishes that this has occurred or will occur. The evidence does not disclose any intention on the part of 1986855 or any of the other Defendants to demolish the party wall or the portion of the garage which is on Ms. May’s property.

The demolition permit which the City has issued to 1986855 permits demolition only of the portion of the garage which is on Lot 15. Further, the permit is subject to “any caveats, restrictive covenants or easements that might be attached to the Site.” If, however, the Defendants do demolish the entire garage and Ms. May incurs cost in rebuilding the portion of the garage which is on her property, or in building another structure to substitute for the demolished garage, and the Defendants’ action constituted a breach of the agreements, Ms.

May’s loss would be capable of assessment as a monetary claim. [ 31 ] As noted, the evidence indicates that Ms. May uses her side of the garage for storage. If the items stored were damaged by the Defendants the loss would be assessable in monetary damages. If it became necessary for Ms. May to store the property elsewhere, the cost would be assessable. This possible harm is not irreparable. [ 32 ] If the blockage of and damage to the common driveway impedes Ms. May’s access to the portion of the garage on Lot 16, it may be that this would constitute irreparable harm.

However, as noted, the evidence does not disclose whether or not the blockage interferes with Ms. May’s use of the garage for the purpose of storing possessions other than a vehicle, the use to which she is currently putting her portion of the garage. [ 33 ] There is no suggestion in the evidence that an award of damages in favour of Ms. May would not be recoverable from the Defendants. It is relevant in this context to note that the title to Lot 15 which is in evidence indicates the value of the lot to be $468,000 and as of June 5, 2017, there was no mortgage against the title.

The only encumbrances at that time were the four agreements previously described. On June 20, 2017, Ms. May obtained a Certificate of Lis Pendens referencing this action which I assume was registered against the title to Lot 15 soon after it was obtained. Balance of Convenience [ 34 ] Given that the second element of the test for an interim injunction is not satisfied, I need not assess the balance of convenience. [ 35 ] The application is dismissed. Heard on the 10 th day of October, 2017. Dated at the City of Edmonton, Alberta this 16 th day of October, 2017. B.R. Burrows J.C.Q.B.A. Appearances: Jeremy L.

Taylor for the Plaintiff

Brian Summers for the Defendants