Heritage Property Corporation v Triovest Inc, 2023 ABKB 513

Court of King’s Bench of Alberta Citation: Heritage Property Corporation v Triovest Inc, 2023 ABKB 513 Date: 20230908 Docket: 1701 12494 Registry: Calgary Between: Heritage Property Corporation, Seventh Avenue Property Corporation, and Stuart Block Inc. Plaintiffs - and - Triovest Inc., Triovest Properties Inc., 1704873 Alberta Inc., 1908762 Alberta Ltd., John Doe Corporations 1 to 10, and the City of Calgary Defendants _______________________________________________________ Memorandum of Decision of the Honourable Justice N. Whitling _______________________________________________________ I. .

Introduction and Overview [ 1 ] In this action, the Plaintiffs Heritage Property Corporation, Seventh Avenue Property Corporation, and Stuart Block Inc. sue the corporate Defendants Triovest Inc., Triovest Properties Inc., 1704873 Alberta Inc., and 1908762 Alberta Ltd. for breach of a certain real estate purchase and sale agreement dated November 9, 2012. Although they are not the only Defendants in this action, these Defendants will be collectively referred to for simplicity as the Defendants. [ 2 ] By the Order of Master A.

Robertson (now Applications Judge Robertson) dated December 3, 2019, the Plaintiffs’ claim

was summarily dismissed as against the Defendants. The Plaintiffs now appeal that Order. Concurrently, the Defendants apply to dismiss the Plaintiffs’ appeal for delay. In the event that the Plaintiffs’ appeal is allowed, the Defendants apply for an order requiring the Defendants to post security for costs. [ 3 ] For the reasons below, I find that the Defendants’ application to dismiss the Plaintiffs’ appeal for delay must be denied. I also find that Plaintiffs’ appeal of Master Robertson’s Order must be dismissed.

Given that the appeal is dismissed, it is unnecessary to address the Defendants’ application for security for costs. II. Facts [ 4 ] In 2008, the Plaintiffs, either directly or through affiliated corporations, were the owners of contiguous lands legally described as Lots 6, 7, 8, 9, 10, 11 and 13 of Block 50 Plan “A” in the City of Calgary.

The Defendants, then called the “Balboa Group”, were the owners of certain neighbouring lots within the same Block 50 Plan “A”. [ 5 ] During 2008, the Plaintiffs began drafting concept materials for redevelopment of its lands with the exception of the parcel comprising Lot 13. [ 6 ] The Plaintiffs’ redevelopment plan was to build a 15-story structure named the “Landmark Centre” to include an automated parkade, bicycle parking, offices, retail and restaurant space, and exterior digital art and signage. [ 7 ] With respect to access to the Landmark Centre, the Plaintiffs did not plan to allow access from or to the main road in front of the building, being 7 th Avenue S.W.

Instead, the Plaintiffs planned to convert the alley behind the building into a pedestrian and vehicle friendly laneway. [ 8 ] In oversimplified terms, the Plaintiffs’ redevelopment plans required them to obtain two favourable decisions from the City of Calgary: (1) rezoning; and (2) a development permit. The Plaintiffs needed to follow two separate and successive processes to obtain these two approvals. [ 9 ] On July 11, 2012, the Plaintiffs submitted an application for re-zoning to the City.

The application was to change from “CM- 2 Zoning” to “DCTP Zoning” that was specific to the Landmark Centre. [ 10 ] In order to assist themselves in the approval process, the Plaintiffs provided certain interested parties, including the neighbouring Defendants, with their concept materials, including three artist’s sketches of the proposed structure. [ 11 ] The lands comprising Lot 13 were not needed for the Landmark Centre project and were not included in the Plaintiffs’ redevelopment plans. [ 12 ] The Defendants became interested in acquiring Lot 13 from the Plaintiffs.

Negotiations regarding the sale and purchase of that parcel ensued. Legal counsel became involved in the negotiation and drafting process. [ 13 ] In the course of negotiations, the Plaintiffs sought to include a contractual term that would require the Defendants to submit a form of letter to the City expressing the Defendants’ non-opposition to the Plaintiffs’ re-zoning application.

On November 3, 2012, the following email communications occurred between Neil Richardson, President of the three Plaintiff companies, and Beth Vogel, counsel for the Defendants, on that subject: Beth Vogel: “Thanks for your message, I will revise the PSA accordingly. I would like to discuss with you your other comments on the PSA when you are available. I think we can resolve all of them except that Balboa does not want to give another Non-opposition letter. Would it satisfy you if we agreed that the number co. would not transfer the property for one year following the closing?” Neil Richardson: “Thanks Beth.

Is it the public nature of the letter that they don't like or is their actual opposition? It is only rezoning that we are talking about as they will still have input at the Development Permit stage . Thanks” [Underlining added] Beth Vogel: “I will let Brenda or Henry clarify this, but my understanding is both the public nature and the fact that Balboa has already provided a letter.” [ 14 ] On November 5, 2012, Henry Neufeld, a development consultant with the Defendants, asked Mr. Richardson to provide him with a copy of the Plaintiffs’ re-zoning application. The specific concerns raised by Mr.

Neufeld at that time related to the locations of the digital video wall and the +15 bridge. No inquiries or concerns were raised respecting traffic access to the building via the alleyway. [ 15 ] In a responding email of November 7, 2012, Mr. Richardson provided Mr. Neufeld with a document containing certain “direct control guidelines” that had previously been prepared by the Plaintiffs’ architect and sent to the City in support of the Plaintiffs’ re- zoning application. That document, entitled “Draft DC Guideline” included, among other things, the following information:

e) Access No direct vehicular access or egress shall be permitted from or to 7th Ave. S.W. [...]

h) Development plans Approval of this application does not constitute approval of a development permit. Comprehensive plans including building design, site layout, exterior finishes and colour, landscaping, parking and accesses shall subsequently be submitted to the Approving Authorities as

part of the development permit application.

In considering such an application, the Approving Authorities shall ensure the building appearance, site layout and density conform substantially to the plans and renderings submitted to City Council during their consideration of this By-law. [ 16 ] Despite having been provided with the above guidelines, the concept materials, and other information, the Defendants did not raise any concerns regarding the proposed traffic access from the alleyway. [ 17 ] On November 9, 2012, the Plaintiff Stuart Block Inc. and the Defendant 1704873 Alberta Inc. (“1704873”) entered into a formal written Purchase and Sale Agreement with an effective date of November 9, 2012 (the “PSA”) respecting Lot 13.

The terms of the PSA included

Section 17(

a) which required 1704873, as the Purchaser, to send a specified form of non-opposition letter to the City: 17. Use of Property by Purchaser following Closing Provided that the Closing of the Transaction occurs on the terms and conditions set out herein, the Purchaser agrees with the Vendor that: (

a) At Closing, the Purchaser shall deliver to the Vendor the Non-Opposition letter in the form attached hereto as

Schedule “C”; [...] [ 18 ] The body of the non-opposition letter referred to in

Section 17(

a) and attached as

Schedule “C” to the PSA reads as follows: 1704873 Alberta Inc. (“1704873”) owns Lot 13, Block 50, Plan “A” Calgary municipally described as 115 - 7 th Avenue S.W., Calgary, Alberta (the “1704873 Parcel”) which is currently zoned CM-2. Seventh Avenue Property Corporation (“Seventh Avenue”) owns a portion of Lot 6, Lots 7-11, Block 50, Plan “A” Calgary municipally described as 119, 121, 123, 125, 127 and 129 – 7 th Avenue S.W., Calgary, Alberta (the “Seventh Avenue Parcel”) which is currently zoned CM-2.

Seventh Avenue has applied for a land use designation from the current CM-2 land use classification to DC/CM2 (the “Land Use Change”) for its Seventh Avenue Parcel as summarized in the attachment hereto. 1704873 has no objection to the Land Use Change by Seventh Avenue. We wish Seventh Avenue success with their application. [ 19 ] The attachment referred to in the third paragraph of the non-opposition letter is also included in

Schedule “C” to the PSA and reads as follows: Our properties are located in the 100 block of 7 th Avenue S.W and form an intact streetscape of early twentieth century heritage structures. They back onto Calgary’s National Historic District located on Stephen Avenue and therefore their preservation and restoration is of paramount importance. We propose to preserve and restore these heritage buildings using an innovative, state-of-the-art, computerized, automated parking facility.

This innovative technology is a necessary element to allow the site to be developed and the important heritage buildings to be preserved. Our properties are located mid block and front onto 7 th Avenue which is the main transit corridor downtown. No vehicle access to our properties is permitted from 7 th Avenue and therefore the only vehicle access to the site will be from the improved back lane.

A key component of our proposed development is to create a back lane that creates a vehicle and pedestrian friendly gateway while also performing the necessary utilitarian functions of access for deliveries and waste removal for all properties in the block. We are also proposing to include a large, digital video wall as part of the development. While the proposed digital video wall is significantly larger than typical digital signage seen elsewhere in the City, it is located in such a manner as to be directed only to pedestrians and transit customers on 7 th Avenue.

The opportunity for such a digital video wall to help enliven the area while providing a significant public are component is tremendous. While one of the purposes of the current CM-2 zoning is to encourage the preservation of heritage buildings, the current CM-2 regulations do not sufficiently allow for the restoration of these properties contemplated above and this is why we are making this rezoning application. [ 20 ] The PSA also included the following Entire Agreement clause: 23.

Entire Agreement This Agreement (including the Schedules hereto) embodies the entire agreement between the parties with respect to the Property and there are no representations, warranties, guarantees, promises or collateral or past agreements existing between the Vendor and the Purchaser with respect to the Property which are not expressly set forth herein. [ 21 ] The Draft DC Guideline was not included in the PSA. [ 22 ] The PSA was executed on November 9, 2012, and closed in late November, 2012. [ 23 ] On December 4, 2012, a non-opposition letter in the same form as that contained in

Schedule ‘C’ of the PSA was signed and sent by the Defendants to the City as required by

Section 17(a).

[ 24 ] On June 6, 2013, the Calgary Planning Commission resolved to recommend that the City approve the Plaintiffs’ re-zoning application. [ 25 ] On September 9, 2013, the City Council approved the Plaintiffs’ re-zoning application through the passing of Bylaw Number 67D2013, which included the following provisions of relevance to the present dispute: 10 Phased Development Tied to Plans (

a) Approval of this application does not constitute approval of a development permit. [...] (

f) Notwithstanding Sub-sections (

a) to (

e) above, access to the proposed development must conform to all City standards, specifications and engineering principles to ensure a safe interface between pedestrians, cyclists and other public users of the adjacent lane and roads, failing which the development permit may be refused. [ 26 ] The Defendants did not raise any objection to the Plaintiffs’ re-zoning application at any point during the re-zoning process. [ 27 ] In approximately September, 2013, the Plaintiffs applied for a development permit for Phase I of the Landmark Centre. [ 28 ] In approximately October, 2013, the Defendants asked the Plaintiffs to send them certain traffic impact analysis reports which pertained to, among other things, the Plaintiffs’ proposed access to the Landmark Centre through the alleyway. [ 29 ] On October 22, 2013, Mr.

Neufeld on behalf of the Defendants sent an email to Mr. Richardson raising a number of concerns respecting the Plaintiffs’ pursuit of the development permit. In brief terms, Mr. Neufeld wrote that the 20-foot wide laneway was not designed for the necessary 800 vehicle trips per day while also serving its traditional purpose of providing truck access for inventory deliveries and waste removal.

This was the first time that the Defendants had expressed concerns to the Plaintiffs respecting the Plaintiffs’ proposed access to the Landmark Centre. [ 30 ] On March 25, 2015, the City issued a development permit for the construction of the Landmark Centre. [ 31 ] On April 14, 2015, Opus Properties Corporation (“Opus”), an owner of a plot adjacent to the Plaintiffs’ lands, filed a Notice of Appeal with the City’s Subdivision and Development Appeal Board (“SDAB”) respecting the development permit. [ 32 ] On April 15, 2015, the Defendants filed their own Notice of Appeal with the SDAB respecting the development permit. [ 33 ] In approximately June, 2015, while the SDAB appeals were pending, the Defendants made an offer to purchase the Plaintiffs’ lands for $20.5 million.

The parties did not reach an agreement to sell the lands at that time. [ 34 ] In advance of the hearing of its appeal to the SDAB, the Defendants retained their own engineering firm to review the traffic reports that had been prepared by the Plaintiffs’ engineering firm.

The Defendants’ engineers concluded that the Plaintiffs’ engineers had underestimated the impact of transportation on the alley, and that the proposed Landmark Centre would result in traffic congestion. [ 35 ] At the hearing of their appeal before the SDAB, the Defendants, together with Opus, argued that the traffic in the alleyway would increase substantially and render the alleyway unsafe, particularly due to the presence of numerous dumpsters in the alley.

In response, the Plaintiffs claimed, among other things, that the dumpsters were under the control of the Defendants, and that their presence may have violated certain City bylaws. [ 36 ] At the conclusion of the hearing before the SDAB on July 30, 2015, the SDAB panel stated orally that they were inclined to allow the appeal, but would be releasing a written decision in the future. [ 37 ] As a result of the oral statements of the SDAB, the Plaintiffs’ creditors, who had commenced foreclosure proceedings a number of years earlier, finally lost confidence in the project, and on September 3, 2015, obtained an Order from Master J.T.

Prowse Q.C. (now Applications Judge Prowse) directing that the lands be listed for sale at a price of $19.5 million. [ 38 ] On September 18, 2015, the SDAB rendered a lengthy and detailed decision allowing the appeal and revoking the development permit for the Landmark Centre. At the end of the day, the SDAB concluded that it had not been provided with sufficient information to support the conclusion that the proposed use of the alleyway met the requirements of s. 10(

f) of the Bylaw. Among other things, the SDAB wrote: 72 Given the constraints and configuration of the lane, the Board finds that a more comprehensive evaluation of the current number of all traffic in the lane, including motor vehicles, pedestrians and cyclists would have to been undertaken to achieve the objective and the intent of

section 10(

f) as per the directions of Council. In the Board’s view there is also insufficient data about the number of motor vehicles, pedestrians and cyclists post construction of the proposed development. On the preponderance of the evidence, the Board finds the information presented by the Development Authority and City Transportation at the hearing is too little and inadequate to show whether

section 10(

f) was met. [ 39 ] The SDAB also addressed the fact that the Defendants (referred to as “Balboa”) had previously expressed non-opposition to the Plaintiffs’ re-zoning application, and concluded that that consideration was not relevant to their decision: 85 In the Board’s opinion it is irrelevant whether or not Balboa or any other adjacent property owner or business initially supported the land use redesignation of the subject site to DC Direct Control District. The DC Bylaw established the land use for the site and provides development standards as per the directions of Council set forth in the Bylaw.

The DC Bylaw does not issue development permits for uses allowed in the DC Direct Control. Pursuant to

section 685 of the Municipal Government Act , any person affected by development permit made or issued by the Development Authority may appeal to the Board. Despite section 641(4) of the Act, an affected person’s

right of appeal regarding the issuance of a development permit is not per se restricted. Therefore the Board places no weight on the fact that the applicant asserted that appellant Balboa provided them with a letter indicating Balboa did not object to the DC rezoning application. [ 40 ] Following the release of the SDAB’s decision, the judicial sale process of the Plaintiffs’ lands proceeded. In the context of that process, the Defendants made a total of four offers to purchase those lands. No other entity made an offer.

On October 3, 2016, the Defendants’ fourth offer to purchase was accepted by the Court, and the sale closed on November 18, 2016, at a price of $12.27 million. [ 41 ] The Plaintiffs state that given the judicial sale proceedings, they had no practical ability to seek leave to appeal the SDAB’s decision to the Court of Appeal. [ 42 ] On January 6, 2016, a corporation affiliated with the Defendants also acquired the lands of Opus which had given Opus standing to commence its appeal with the SDAB. [ 43 ] By Statement of Claim filed September 18, 2017, the Plaintiffs sued the Defendants claiming breach of the Defendants’ duty to perform its obligations under the PSA in good faith and in unjust enrichment. [ 44 ] On December 3, 2019, the Plaintiffs’ claim was summarily dismissed by Master Robertson.

In brief oral reasons, the learned Master held that the PSA only required the Defendants to refrain from opposing the re-zoning application, and created no obligations with respect to the development permit application: The agreement very clearly says this is the entire agreement. I can understand why Seventh Avenue might have assumed that the purchaser would not oppose subsequent steps in the process, but the contract is clear, they were -- had agreed not to oppose the land use designation.

As I say, even if they'd gone so far as to actually attach the bylaw in front of them, it didn't guarantee a development permit, that is a separate process. And ultimately when the process was -- was followed through, the Development Appeal Board was not satisfied -- Subdivision and Development Appeal Board was not satisfied as I see it here in the decision that there'd been sufficient information done to deal with the traffic in the lane. The whole concept simply did not work as it was presented. [ 45 ] The On January 15, 2020, the Plaintiffs filed a Notice of Appeal of the Order of Master Robertson.

The resulting appeal has been the subject of some delay, which delay is the basis for the Defendants’ present application to dismiss. [ 46 ] The Plaintiffs’ Notice of Appeal was initially returnable February 21, 2020.

That return date was subsequently postponed to June 24, 2020, with the consent of the Defendants. [ 47 ] Due to the COVID-19 pandemic, all civil matters scheduled for hearing between June 1, 2020 and June 26, 2020, including the Plaintiffs’ appeal, were then adjourned sine die , unless otherwise directed by the Court. [ 48 ] On June 19, 2020, the Court announced that it would recommence the hearing of civil special justice applications, with priority given to applications that had been booked between March 16 and June 26, 2021. [ 49 ] In approximately November, 2020, the Plaintiffs’ then-counsel was required to step away from the practice of law due to serious health concerns. [ 50 ] The Plaintiffs retained new counsel by early February, 2021.

Upon reviewing the file, that new counsel determined that no Affidavit had been submitted to Master Robertson on behalf of the Plaintiffs, and that the Defendants’ 5-page Affidavit would not be sufficient for the purposes of this appeal. His office then commenced preparation of a substantial affidavit in support of this appeal. [ 51 ] In approximately April, 2021, the Plaintiffs’ new counsel was required to leave the office for some period of time due to a COVID-19 diagnosis. He returned in May, 2021. [ 52 ] On December 17, 2021, the Plaintiffs filed the Affidavit of Mr. Richardson in support of their appeal.

The Affidavit is detailed and voluminous. Its body is 33 pages and 99 paragraphs long, and it attaches 67 exhibits. In total it comprises some 2,011 pages. [ 53 ] On January 11, 2022, the Defendants filed their application to dismiss the Plaintiffs’ appeal for delay. [ 54 ] On January 12, 2022, the Plaintiffs served a filed copy of Mr. Richardson’s Affidavit. [ 55 ] It appears that the remainder of the delay in the determination of this appeal is attributable to unavailability of court time and the preparation of these reasons. III. Issues [ 56 ] The issues presently before me consist of the following:

(1) Should the Plaintiffs’ appeal from Master Robertson’s Order be dismissed for delay?

(2) If not, should the Plaintiffs’ claim be summarily dismissed?

(3) If not, should the Plaintiffs be required to post security for costs? IV. The Delay Application

[ 57 ] The Defendants’ application to dismiss the Plaintiffs’ appeal for delay is governed by r. 4.13 of the Alberta Rules of Court , AR 124/2010 : Application to deal with delay 4.31(1) If delay occurs in an action, on application the Court may (

a) dismiss all or any part of a claim if the Court determines that the delay has resulted in significant prejudice to a party, or (

b) make a procedural order or any other order provided for by these rules.

(2) Where, in determining an application under this rule, the Court finds that the delay in an action is inordinate and inexcusable, that delay is presumed to have resulted in significant prejudice to the party that brought the application.

(3) In determining whether to dismiss all or any part of a claim under this rule, or whether the delay is inordinate or inexcusable, the Court must consider whether the party that brought the application participated in or contributed to the delay. [ 58 ] The Defendants tacitly acknowledge that the delay which has occurred in the advancement of the Plaintiffs’ appeal is not comparable to that reflected in those cases where entire actions have been dismissed for delay pursuant to r. 4.31(1).

They emphasize, however, that the rule empowers the court to “dismiss all or any part of a claim”, and that appeals pursuant to r. 6.14(1) are subject to short timelines and must be pursued diligently. In support of this position, the Plaintiffs cite certain cases addressing delays in the context of appeals before the Court of Appeal. In one such case, Icewerx Consulting Inc v Edmonton (City) , 2020 ABCA 468 , Slatter J.A. wrote: ...Appeal periods are deliberately kept short to promote finality of decisions. All appellants have an obligation to

a) meet any specific deadlines relating to appeals, but also to

b) prosecute appeals diligently... [ 59 ] Although the Plaintiffs’ authorities are not directly applicable to the present situation, I generally agree that litigants are expected to pursue appeals in a diligent manner, and that “inordinate and inexcusable delay” in the advancement of a r. 6.14(1) appeal may be established by a comparatively briefer period of delay than that required to dismiss an entire action. [ 60 ] In the present case however, I do not find that the delay in the advancement of this appeal rises to the level of inordinate and inexcusable delay.

The initial 6 months of the delay was “participated in” by the Defendants since it was with their consent (r. 4.31(3)). The remaining delays are attributable to a number of factors which were largely outside the Plaintiffs’ control. In addition to the COVID- 19 pandemic, a significant amount of time was lost due to the Plaintiffs’ former counsel becoming very seriously ill. A significant portion of the delay was also attributable to the court’s own scheduling backlog.

I also accept that the time needed to prepare the new Affidavit in support of this appeal required a significant amount of work by the Plaintiffs’ current counsel. [ 61 ] Further, and in any event, r. 4.31(1)(

b) requires the Defendants to establish “significant prejudice” caused by the delay. The Defendants submit that since certain potential witnesses have left their employ, they can no longer rely upon those persons as witnesses. However, given that the substantive issues on this appeal turn almost exclusively upon the written text of the PSA and some related documentation, any such presumption of prejudice has been rebutted. [ 62 ] For these reasons, the Defendants’ application to dismiss this appeal for delay is denied. V.

The Plaintiffs’ Appeal from Master Robertson’s Order Summarily Dismissing the Plaintiffs’ Claim A. Standard of Review [ 63 ] The Plaintiffs’ appeal from Master Robertson’s Order is a de novo appeal. The Plaintiffs were entitled to file new evidence, and they have done so. The evidentiary record is now substantially different from that before the Master. Consequently, I will consider the issues raised by the Plaintiffs’ appeal, and the Defendants’ underlying application for

summary dismissal afresh. B. The Weir-Jones Test [ 64 ] The approach applicable to the Defendants’ application for

summary dismissal is reflected in Weir-Jones Technical Services Inc. v Purolator Courier Ltd ., 2019 ABCA 49 : 47 The proper approach to

summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating to

summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party's case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. C. The Defendants’ Position on

Summary Dismissal [ 65 ] Although this is an appeal by the Plaintiffs’, the Defendants have the initial burden of showing that there is no merit to the Plaintiffs’ claim. [ 66 ] In support of their application for

summary dismissal, the Defendants emphasize that the language of the PSA only requires the Defendant 1704873 to send the form of non-opposition letter attached as

Schedule “C” to the City. The Plaintiffs acknowledge that that letter was sent. The terms of that non-opposition letter only refer to the re-zoning application commenced by Mr. Richardson’s attached letter of July 11, 2012, and not to the Plaintiffs’ development permit application.

Hence, the Defendants submit that there is no reasonable basis to suggest that the commencement and prosecution of their SDAB appeal constituted a violation of anything in the PSA. [ 67 ] Regarding the evidence of communications surrounding the negotiation of the PSA, the Defendants submit that resort to any such extrinsic evidence is unnecessary and contrary to the parol evidence rule. Further, and in any event, that extrinsic evidence merely confirms that the Defendants’ obligations were limited to the re-zoning application and did not extend to the building permit application. D. The Plaintiffs’ Response on

Summary Dismissal [ 68 ] In response, the Plaintiffs submit that the Defendants’ obligation of non-opposition to the Plaintiffs’ redevelopment plans is reflected in the language of the non-opposition letter which states that “1704873 has no objection to the Land Use Change by Seventh Avenue.” The Plaintiffs argue further that the words “Land Use Change” in that sentence must be interpreted in light of both the letter attached to the non-opposition letter (which states that “the only vehicle access to the site will be from the improved back lane”) and the Draft DC Guideline emailed by Mr. Richardson to Mr.

Neufeld on November 7, 2012 (which states that “No direct vehicular access or egress shall be permitted from or to 7th Ave. S.W.”).

Reading these and other extrinsic materials together, the Plaintiffs submit that they have a reasonable prospect of establishing that the Defendants’ obligation to perform the PSA in good faith included a duty not to oppose the Landmark Centre development project. [ 69 ] The Plaintiffs argue further that concerns of dishonest dealings by the Defendants are also raised by the fact that the Defendants later acquired the lands formerly owned by Opus and which gave Opus standing for its own SDAB appeal which mirrored that of the Defendants.

The Plaintiffs submit that they must be permitted to explore the events surrounding this acquisition in order to build further support for their case. E. The Issues in the Plaintiffs’ Claim May be Fairly Resolved Summarily [ 70 ] The Plaintiffs’ claim in this action turns almost entirely upon the language of the PSA. To the extent that the Plaintiffs rely upon extrinsic evidence in support of their claim, that evidence consists of written documents which have been duly collected and placed into the record.

I do not detect any factual inconsistencies that have the potential to affect the outcome and which might be more effectively resolved at a trial. [ 71 ] In light of these considerations, I conclude that the issues in this action may be fairly resolved on a

summary basis. F. Applicable Legal Principles [ 72 ] The law governing the

interpretation of the PSA and the role of extrinsic or parol evidence in that exercise is summarized in IFP Technologies (Canada) Inc. v. EnCana Midstream and Marketing , 2017 ABCA 157 at paras. 79-89 . There, the Court of Appeal states that the courts are to have regard to the factual matrix when interpreting a contract. Doing so precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict a contract.

The factual matrix at least encompasses (1) the genesis, aim or purpose of the contract; (2) the nature of the relationship created by the contract; and (3) the nature or custom of the market or industry in which the contract was executed. Evidence of negotiations is relevant insofar as that evidence shows the factual matrix, for example by helping to explain the genesis and aim of the contract. Where a contract itself is ambiguous parol evidence may be admitted to resolve the ambiguity. Mere difficulty in interpreting a contract is not the same as ambiguity.

Even under the ambiguity exception, parol evidence as to the parties’ subjective intentions is generally inadmissible. The Court of Appeal concluded their discussion of this topic as follows: 89 In the end, contractual

interpretation is not an exercise in second guessing what could have been included in a contract while discounting or dismissing relevant terms of a contract and uncontradicted contextual information. It is instead an exercise in determining what the parties objectively intended having regard to the entire written text, relevant contextual background and commercial context. [ 73 ] In addition the language of the PSA and its surrounding context, the Plaintiffs rely upon the “organizing principle” of good faith recognized in Bhasin v Hrynew , 2014 SCC 71 . In the subsequent case of Wastech Services Ltd. v.

Greater Vancouver Sewerage and Drainage District , 2021 SCC 7 , Kasirer J. emphasized at paras. 5-7 and 113 that Bhasin ’s duty of good faith constrains the permissible exercise of discretionary powers in contract but does not displace the negotiated bargain as the primary source of justice between the parties. The duty does not require either party to subordinate its interests to those of the other, and it does not require the

conferral of any benefit that was not contemplated under the contract. The duty does not require either party to act as a fiduciary. G. Application of Legal Principles to the Facts of this Case [ 74 ] Applying the legal principles above to the facts of the present case, I find that the PSA’s “factual matrix” consists of the following basic facts. The PSA is a written commercial agreement which was negotiated between sophisticated parties with the assistance of legal counsel.

The Plaintiffs were the owners of a number of parcels of contiguous lands in downtown Calgary and were seeking to develop their lands into a redevelopment project called the Landmark Centre. The Plaintiffs had applied to the City of Calgary for re-zoning, and would eventually also require a development permit. The lands comprising Lot 13 were not needed for the Plaintiffs’ project. The Defendants were neighbouring landowners and as such had standing to object to both the re-zoning application and any future development permit application.

The Plaintiffs’ objectives in entering into the PSA included obtaining the purchase price for the lands, as well as some measure of assurance that the Defendants would not impede the Landmark Centre project.

The Defendants’ objective was to add Lot 13 to their existing land holdings for a reasonable price. [ 75 ] Reading the PSA in this factual matrix, I conclude that the PSA did not impose any obligation upon 1704873 or any of the other Defendants to refrain from opposing the issuance of a development permit respecting the Landmark Centre project. 1704873’s non-opposition obligation was limited to that defined by

Section 17(

a) of the PSA which required 1704873 to deliver the non-opposition letter at

Schedule ‘C’ to the City. That letter pertains only to the Plaintiffs’ application for re-zoning that had been commenced by the attached letter of July 11, 2012. All parties agree that the non-opposition letter was duly delivered in the proper form. Doing so exhausted 1704873’s non-opposition obligations under the PSA. The PSA imposed no constraints upon 1704873 or any of the other Defendants respecting any subsequent application for a development permit. [ 76 ] I do not find

Section 17(

a) or any other provision of the PSA to be ambiguous for the purposes of the Plaintiffs’ claim. Consequently, resort to extrinsic evidence is unnecessary. If I am wrong in that regard, I find that the extrinsic evidence, notably Mr. Richardson’s November 3, 2012, email, reinforces the point that 1704873’s non-opposition obligation was limited to the re-zoning application and did not encompass the development permit stage of the plan. In Mr.

Richardson’s words, “It is only rezoning that we are talking about as [the Defendants] will still have input at the Development Permit stage.” [ 77 ] The Plaintiffs’ position is not improved by an expansive reading of the words “Land Use Change” in the non-opposition letter at

Schedule ‘C’. That document, while certainly not irrelevant to the

interpretation of the PSA, does not itself define any contractual obligations as between the parties. It simply embodies a form of letter that 1704873 was required to deliver to the City. That form of letter was sent and delivered. [ 78 ] Further, and in any event, the extrinsic evidence relied upon by the Plaintiffs is not capable of supporting an

interpretation of the words “Land Use Change” as encompassing any future proceedings respecting a development permit. The Draft DC Guideline provided by Mr. Richardson on November 7, 2012, does explain that access and egress would not be permitted from 7 th Avenue, but it also expressly states that it is only submitted in support of a re-zoning application and not a development permit application. [ 79 ] Turning to Bhasin duty of good faith performance, the Defendants’ appeal of the development permit to the SDAB did not constitute an exercise of any discretion conferred upon them by the PSA.

Consequently, that conduct was not constrained by the duty of good faith performance. The Defendants’ appeal was commenced and conducted several months after the PSA had closed and the Defendants’ obligations had been performed. The duty of good faith performance cannot create new contractual obligations beyond those that the Defendants accepted. As emphasized above, the PSA was negotiated by two sophisticated commercial entities with the assistance of legal counsel.

It cannot now be re-drafted on terms more advantageous to the Plaintiffs. [ 80 ] Finally, I will deal with the Plaintiffs’ submission that it must be permitted to explore recent dealings between the Defendants and Opus for the commission of any dishonest conduct. Quite simply, the Plaintiffs have not put forward any evidence capable of establishing or otherwise supporting a cause of action against the Defendants based upon any dealings with Opus. Again, the SDAB appeals by Opus and by the Defendants were commenced and conducted outside the performance of the PSA.

The same may be said of the Defendants’ subsequent acquisition of Opus’s lands. The evidence on this subject, such as it is, does not raise a serious issue for trial. VI. Conclusions [ 81 ] In conclusion, I find that it is possible to fairly resolve the dispute between these parties on a

summary basis that there are no genuine issues requiring a trial. The Defendants have proven the necessary facts on a balance of probabilities and have met their burden to show that there is no merit to the Plaintiffs’ claims. The PSA did not impose any obligation upon any of the Defendants to refrain from opposing a development permit for the Landmark Centre. The obligation of good faith performance cannot be applied to create additional obligations that are not specified in the contract. [ 82 ] Although the Plaintiffs have put forward a substantial evidentiary case in opposition to

summary dismissal, the Plaintiffs have not shown that there exists any genuine issue requiring a trial.

Even if the PSA were to be interpreted in light of the extrinsic evidence that the Plaintiffs rely upon, that evidence merely reinforces the conclusion that the Defendants’ obligation was limited to non-opposition of the re-zoning application. [ 83 ] Having considered all of the circumstances, I find that it is appropriate to resolve the dispute between these parties summarily, and in favour of the Defendants. [ 84 ] The Plaintiffs’ appeal is dismissed, and the Order of Master Robertson dated December 3, 2019, is affirmed. [ 85 ] Given this conclusion, it is unnecessary to address the Defendants’ application for security for costs.

[ 86 ] If necessary, the parties may address costs in writing within 30 days. Heard on the 29 th -30 th day of June, 2023. Dated at the City of Calgary, Alberta this 8 th day of September, 2023. N. Whitling J.C.K.B.A. Appearances: Teddy E. Nobles Walsh LLP for the Plaintiffs Blair C. Yorke-Slader, K.C. and Paul Romaniuk Bennett Jones LLP for the Defendants