Moyen (Re), 2018 ABQB 1023

Court of Queen’s Bench of Alberta Citation: Moyen (Re), 2018 ABQB 1023 Date: 20181219 Docket: 0903 08019 Registry: Edmonton In the Matter of that Restrictive Covenant Registered in the Land Titles Office as Instrument Number 812 112 169; And in the matter of those land legally described as Plan 812 1138, Block 1, Lot 37 Excepting thereout all Mines and Minerals Between: Rene Moyen and 969351 Alberta Ltd.

Applicants - and - Roland Penner, Louise Anderson-Pawlina, Viola Kuehlke, Herb Kuehlke, Greg Brownell, Debbie Brownell, Shawn Best, Margaret Penner, Janelle Laura Nagel and Colin McNiven Respondents _______________________________________________________ Reasons for Decision of W.S. Schlosser , Master, Court of Queen's Bench of Alberta

_______________________________________________________ [1] This is an application to discharge a restrictive covenant. List of Authorities By the Applicants: 1. Potts v McCann, 2002 ABQB 734; 2. Land Titles Act, s. 48 (4). By the Respondents: 1. Alberta Planning Board Order – December 22, 1978; 2. Land Titles Act, RSA 2000, c L-4, as amended, sections 48 and 68; 3. Tornado Developments Ltd v The Bay (1979), (AB KB), 10 Alta LR (2d) 279, 102 DLR (3d) 633 (ABQB); 4. Bruce Ziff, Principles of Property Law 5th ed, Carswell 2010; 5.

Seiffeddine v Company of Adventurers of England Trading into Hudson’s Bay (1978), (AB KB), 16 AR 252, 8Alta LR (2d) 253 (ABQB); 6. Seiffeddine v Adventurers of England, 1980 ABCA 29, 11 Alta LR (2d) 229, 108 DLR (3d) 671; 7. County of Beaver Land Use Bylaw No 98-801, as amended; s. 6.6 Country Residential District-Crown; 8. Re s. 51 Land Titles Act (Grieve’s Application), (1953), (AB KB), [1954] 1 DLR 301, 10 WWR (NS) 49(ABQB). By the Court: 1. Champion v Smith, 2014 ABQB 48; 2. ‘The Hollow Men’, The Complete Poems and Plays of T S Eliot, Faber, 1969.

The Covenant [2] Clauses 7 and 22 of the covenant filed against Blue Sky Estates in Beaver County provide:

(7) The water system and recreational facilities shall be operated as a co-operative through the Blue Sky Recreational Society and eachresidence and owner of each lot shall become a member and continue to be a member in good standing of the said Blue Sky RecreationalSociety. ...

(22) Lot 37, Block 1 shall not be used for private country residential purposes. The Blue Sky Recreational Society shall be responsiblefor the maintenance of the recreational buildings and the water system thereon. This clause is for the benefit of Block 1, Lots 1-36(inclusive) and Block 2, Lots 1-4 (inclusive) contained within-in this agreement. Clause 7 is not a restrictive covenant. It is cited mainly to put Clause 22 into context. Present Circumstances [3] Lot 37, Block 1 is undeveloped. It was purchased by the applicant company, 969, in 2003.

There is (apparently) no Blue SkyRecreational society and no Blue Sky Community Centre. A Blue Sky well and water system does not service the development. I am toldthat the residents get their water supply elsewhere. The Applicants argue that the uses specified by the covenant will now be contrary tothe county Land Use Bylaw, and, I might add, 969’s ownership. [4] Though I acknowledge that a number of properties have changed hands since this application was launched, the majority oflandowners in the development apparently support the application. There are 40 lots, excluding the one in question.

Ten landowners,representing seven lots, oppose the application. Regrettably for the Applicants, the discharge of restrictive covenants is not democratic.But there can be other grounds.

Section 48 of the Land Titles Act [ 5 ] Sub Sections 48(1) and (4) of the Land Titles Act provide: 48(1) There may be registered as annexed to any land that is being or has been registered, for the benefit of any other land that is being or has been registered, a condition or covenant that the land, or any specified portion of the land, is not to be built on, or is to be or not to be used in a particular manner, or any other condition or covenant running with or capable of being legally annexed to land. ...

(4) The first owner, and every transferee, and every other person deriving title from the first owner or through tax sale proceedings, is deemed to be affected with notice of the condition or covenant, and to be bound by it if it is of such nature as to run with the land, but any such condition or covenant may be modified or discharged by order of the court, on proof to the satisfaction of the court that the modification will be beneficial to the persons principally interested in the enforcement of the condition or covenant or that the condition or covenant conflicts with the provisions of a land use bylaw or statutory plan under

Part 17 of the Municipal Government Act , and the modification or discharge is in the public interest. The Applicants argue that this creates a statutory charge over and above a common law restrictive covenant. The Respondents argue that those parts of the covenant that are positive cannot run with the land and cannot properly be characterized as ‘restrictive covenant’, either at common-law, or under

section 48 of the Land Titles Act .

The Nature of a Restrictive Covenant [ 6 ] The Respondents, citing Seiffeddine , argue that a restrictive covenant must have four characteristics: first it must be negative in substance; second, the burden must run with the land; third, the covenant must be taken for the benefit of dominant lands; and, fourth, that general limitations are imposed on the availability of equitable remedies. [ 7 ] As such, the Respondents argue that the middle sentence of clause 22: “ The Blue Sky Recreational Society shall be responsible for the maintenance of the recreational buildings and the water system thereon”, being, at the very least, positive in nature, cannot constitute a restrictive covenant. [ 8 ] On the same basis the Respondents also argue that all of paragraph 7 is not a restrictive covenant. [ 9 ] What remains is: “Lot 37, Block 1 shall not be used for private country residential purposes. . . .

This clause is for the benefit of Block 1, Lots 1-36 (inclusive) and Block 2, Lots 1-4 (inclusive) contained in this agreement”. Despots and Democrats [ 10 ] Restrictive covenants, in a sense, begin with a despot; being the developer, who imposes the restrictive covenant upon the lots in the development to attract a higher price and a more uniform class of purchasers: they buy in to the development on this basis. All of the owners could agree to get rid of a restrictive covenant affecting their land (ie. section 48(4) LTA) but not just a simple majority.

Failing that, it is up to the Court. [ 11 ] Discharge by the Court is neither democratic nor despotic. In the words of Egbert, J, in Re S. 51 Land Titles Act : It seems to me that it was never intended that the Court should act the part of a benevolent despot and say to this latter class, “A modification of this covenant is in your interest whether you think so or not; and you are going to have it whether you want it or not”.

It would undoubtedly be in the interest of the petitioner, as she would receive a better price for her now vacant lots than she would otherwise receive, but there is no evidence before me that it would be in the interest of Blundun or of any other of “the persons principally interested in the enforcement” of the covenants, which incidentally appears to me to be a question quite different from the question of whether or not a modification might be in the public interest. [ 12 ] The law, as I understand it, can be summarized as follows (from Champion v Smith , at para 9 ): i) Section 48(4) of the Land Titles Act , R.S.A. 2000, c.

L-4 allows for the discharge of a restrictive covenant if “it will be beneficial to the persons principally interested in the enforcement of the condition or covenant where that the condition or covenant conflicts with the provisions of a land use by-law or statutory plan ...”. A clear case would be where a landowner could not comply with both the restrictive covenant and the law (cf Seifeddine above and Potts v. McCann , 2002 ABQB 734 per Slatter, J. (as he then was) (Calgary). ii) An applicant may be able to show that a proposed development does not violate the restrictive covenant: Szymanski v.

Excel Resources Society , 2004 ABQB 89 , per Marceau, J., (a six person group home on two lots in the McDougall neighbourhood). iii) An applicant might be able to defeat the covenant if it is shown that the neighbourhood has changed significantly since the imposition of the covenant in such a way that its original purpose was defeated. iv) An applicant might also demonstrate that a covenant has become spent, obsolete, unworkable or is vexatious. This, and above, Potts esp, para. 32 and Barker v. Palmer , 2005 ABQB 815 (Calgary)

Conflict with a Land Use Bylaw [ 13 ] The Applicants’ property cannot and will not be used for a community building, or a well and pump-house. There are a wide range of uses permitted by the Beaver County Land Use Bylaw, and a wide range of permitted and discretionary uses beyond ‘one family dwellings’ that do not inherently conflict with the restrictive covenant. In other words, this is not a case where a land owner could not comply with both the restrictive covenant and the bylaw ( Seifeddine ).

The Public Interest [ 14 ] It is certainly in the interest of the Applicants that the restrictive covenant be removed. I acknowledge that there is no evidence that the nature of the development has changed in the sense of point (iii) in para 12, above. However, the community no longer needs a pump-house. A community centre is no longer an option (unless it is built by the Applicants). [ 15 ] I fail to see a material or substantial difference between a house (for example), and a pump-house or a community centre, at least in terms of aesthetics.

To put it bluntly, the purpose of the restrictive covenant was not to provide the other residents with an undeveloped green space, or a park. [ 16 ] The land is already privately owned. The original purpose of the restriction is now vestigial. The need for a water supply building no longer exists. Interest in a community building has waned and is now impossible of performance. It may well be that the other residents in the development expected that there would not be a house built on this lot. But there is a very fine distinction between a community building, or a pump-house, and a one-family dwelling.

In each case there would be a structure built on the land. [ 17 ] I also acknowledge that the Alberta Planning Board restricted this development to 40 lots (Board Order 1492-S-78) and, that, in itself, may be a reflection of the broader public interest. However, ‘lot’ it is undefined with respect to size, other than by reference to the plan. The primary interests of the Respondents appear to be essentially to preserve this lot in an undeveloped state as ‘park’, or green space.

But this has nothing to do with the original use, as envisioned. [ 18 ] The public interest, in any event, is not a stand-alone basis for vacating a restrictive covenant. The latter part of section 48(4) LTA is conjunctive. There must be a conflict with a Land Use Bylaw before a consideration of the public interest even arises. Obsolete, Unworkable, Spent [ 19 ] It seems to me that the theme of points (iii) and (iv) in para 12, above, is that the purpose of a restrictive covenant has to be understood in its original context.

Maintaining it needs to have a residual, substantial purpose that meets its original intent. In the present context, the covenant is hollow, spent, or obsolete. It is, to borrow from T S Eliot: “Shape without form, shade without colour, . . . gesture without motion.” It strikes me that maintaining the restrictive covenant in these circumstances would be unnecessarily oppressive. It would not have any direct effect on any of the other lot owners in the subdivision, other than noted above. Disposition [ 20 ] The application is allowed. The restrictive covenant is ordered to be discharged.

I am grateful for the parties’ expert presentation of the issues. The parties may speak to costs. Heard on the 6 th day of December, 2018. Dated at the City of Edmonton, Alberta this 19 th day of December, 2018 . W.S. Schlosser M.C.Q.B.A. Appearances: Larry S. Heald for the Applicants

Kim D. Wakefield, Q.C. for the Respondents