Rizzuto v. City of Fernie Date:, 2012 BCPC 74

Citation: Rizzuto v. City of Fernie Date: 20120314 2012 BCPC 0074 File No: 20615 Registry: Cranbrook IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: GARTH A. RIZZUTO CLAIMANT AND: CITY OF FERNIE DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE MROZINSKI Appearing on their own behalf: G. Rizzuto Counsel for the Defendant: G. Purdy, Q.C. Place of Hearing: Cranbrook, B.C. Date of Hearing: February 23, 2012 Date of Judgment: March 14, 2012 [ 1 ] Mr. Rizzuto applies to set aside a default order dated January 23, 2012 in which his claim against the City of Fernie (the “City”) was struck for failure to appear at a

summary application by the City to dismiss his claim as being without merit. In addition to the default order, Mr. Rizzuto was also directed to pay the City a penalty pursuant to Rule 20(5) of the Small Claims Rules in the amount of $2,500.00 [ 2 ] The City opposes Mr. Rizzuto’s application to set aside the default order. It submits that Mr. Rizzuto has provided no reasonable explanation for failing to appear at the hearing of its

summary application but that in any event his claim has no merit. The City also submits that it has been put to considerable expense with respect to this claim and ought not to be required to bear any further costs. The Nature of the Claim [ 3 ] The claim in this case concerns property owned by Mr. Rizzuto in the City of Fernie, in a subdivision known as Castle Mountain. When Mr.

Rizzuto and his wife purchased the property in December, 2004, it was subject to a Statutory Building Scheme (“SBS”) which, among other things, provided for height restrictions on homes in the subdivision to preserve the view of each of the lots. [ 4 ] The developer of Castle Mountain, Elk River Developments, was required to approve the building plans proposed by purchasers of property in the subdivision. On the evidence which the parties agreed was available for review on the

summary application to strike, it is apparent that Mr. Rizzuto’s building plans were reviewed by the developer and approved by letter dated April 18, 2005. On January 18, 2007, Mr. Rizzuto applied to the City of Fernie for a building permit which was granted by the City on February 1, 2007. [ 5 ] Mr. Rizzuto brought this claim for damages in the Provincial Court in May, 2010 in the amount of $25,000.00. He reduced his damages’ claim to fit within the small claim’s limits. In the claim, he acknowledges having purchased property in Castle Mountain subdivision which property was subject to the SBS. He then alleges that:

“The City of Fernie Building Inspector would not give us a building permit until our building plans were approved and signed off by a designate of Elk River Developments. Our plans were submitted to Abugov-Kaspar, an architectural firm in Calgary, who reviewed the plans, (sic) asked for setback and design changes before approving the plans. The City of Fernie has now decided not to honour the Statutory Building Scheme. The City has misled us since we believed we would be protected by the Registered Building Scheme.

We incurred additional expenses at the hands of the City when we presented our plans, since the Building Inspector at that time gave us incorrect setbacks which did not conform to the Building Scheme....” [ 6 ] Mr. Rizzuto further alleges that he seeks damages in the amount of $25,000.00 “as a result of the City of Fernie approving the building permits in Castle Mountain subdivision which do not comply with the Statutory Building Scheme.” On page 2 of his claim, Mr. Rizzuto adds that he is seeking damages for the City’s failure to enforce the SBS after forcing him to do so. Mr.

Rizzuto further alleges that had he known the City would not “honour the Scheme” he and his wife would have built differently or purchased property in an area not covered by the SBS. [ 7 ] It is apparent from Mr. Rizzuto’s claim that other purchasers of lots in the Castle Mountain subdivision have built homes that do not comply with the SBS and which obscure the view he once enjoyed thus, among other things, reducing the value of his property. [ 8 ] It is also apparent from the material that Mr.

Rizzuto feels greatly aggrieved by these facts and has pursued this matter with the City for some time, with not inconsiderable vigour, and at some expense to himself and to the City. The Application to Strike [ 9 ] The City, being of the view that Mr. Rizzuto’s claim must fail either because it fails to disclose a cause of action, or because any cause of action has long since been time barred by a limitations period, pressed for a speedy resolution of this case.

It sought and obtained an order of the Court dated November 24, 2011 (the “Order”), that a hearing proceed without the calling of ( viva voce ) evidence to determine whether: “...assuming ...the City required the claimant to provide it with proof that the claimant had complied with the SBS before it would issue a building permit, and assuming the City did not require other property owners to provide proof of compliance with the SBS before issuing them building permits, is there a cause of action and if so is it statute barred by way of the limitations contained in the Local Government Act .” [ 10 ] It was agreed for the purposes of the

summary application firstly that if the matter was resolved in favour of Mr. Rizzuto, his claim would be set down for trial. It was agreed by the parties that the Court could consider the claimant’s trial book, filed November 24, 2011, and the City’s law and documents book, filed November 24, 2011 as part of the application to strike. Finally, it should be noted that the City was prepared to admit certain facts for the purpose of its

summary application but not for the purposes of the subsequent trial if there was one. [ 11 ] The Order further provided that the

summary application would be heard on January 23, 2012 or such other date. It is noted on the Order that both parties indicated they might have other commitments on January 23 rd , and that both would respect each other’s commitments. [ 12 ] The City also agreed it would provide the claimant with a brief

summary of its argument by January 6, 2011. By letter dated December 15, 2011, counsel for the City forwarded a copy of the City’s brief of argument to Mr. Rizzuto. The letter asked Mr. Rizzuto to provide counsel with any materials in response before the January 23, 2012 hearing date. [ 13 ] On January 23, 2012, the City appeared in Small Claims Court at 9:30 a.m. in Fernie to argue its application to strike Mr. Rizzuto’s claim. Mr. Rizzuto did not appear. Counsel for the City quickly left a message for Mr. Rizzuto reminding him of the court date. However, as Mr.

Rizzuto was still not present in court by 10:45 a.m., the Court granted the City the default order and imposed a penalty in the amount of 10% of the claim on the ground that it was without merit, that Mr. Rizzuto had made numerous unsuccessful applications in the matter, and that he had been told by the Ombudsman’s office that the City had no legal authority to enforce the SBS. [ 14 ] At 4:40 p.m. on January 23, 2012, Mr. Rizzuto phoned counsel for the City and advised him that he had been under the impression the City was supposed to notify him of the court date. [ 15 ] Mr.

Rizzuto then filed this application to set aside the default order on January 27, 2012. Application to set aside the default order [ 16 ] In his affidavit in support of the application to set aside the default order, Mr. Rizzuto averred that he left the pre-trial conference of November 24, 2011 with the impression that as both parties had indicated they might have other commitments on January 23, 2012, the City would communicate with him respecting a confirmed hearing date.

He added that his non-attendance was in no way intentional and further that he was still awaiting certain documents from the City pursuant to the Freedom of Information and Privacy Act . [ 17 ] In argument before this court, Mr. Rizzuto added to his affidavit material. Firstly, he pointed to the fact that he has been prescribed the drug Prednisone and that the medication has caused him to become confused at the very least. Additionally, Mr. Rizzuto received a notice of the January 23 hearing from the Registry which was unfortunately dated January 23, 2011. I doubt very much whether this in itself caused Mr.

Rizzuto to miss the January 23, 2012 hearing date but I accept that he was confused about the date in any event. I have no doubt that Mr. Rizzuto did not intentionally miss his hearing date. He is evidently anxious for his day in court. The Law [ 18 ] Under sub-rule 17 (2) of the Small Claims Rules , this Court may set aside a dismissal or default order made in the absence of a

party. Sub-rule 17(2)(

b) provides that in doing so, the Court must consider the following: i. the reason the party did not file a reply or attend the settlement conference, trial conference, or trial; ii. the reason for the delay, if any, in filing the application; and iii. the facts that support the claim or the defence. [ 19 ] In Lou Guidi Construction Ltd. v. Fedick , [1994] B.C.J.

No 2409 , Judge Stansfield observed at para. 5 that given the purpose of the Small Claims Act , and the preponderance of self represented litigants in this court, as a general rule greater emphasis should be placed upon the facts which support the claim or defence than the other factors in s. 17(2)(b).

He added that though “the reasons for the party failing to do that which led to the default, or delaying bringing the application to set aside, are relevant considerations, they are less so than whether on the merits the party deserves their day in court.” [ 20 ] It follows that it is necessary to consider these other relevant factors only if the court is satisfied there is merit to the claim. The question on this leg of the test under sub-rule 17(2)(

b) is whether there is any evidence on which this court could find the applicant has a meritorious claim or at least one worthy of investigation. The standard against which the court must consider the merits of a claim on this application is obviously lower than that which must be applied in any hearing or trial of the case on its merits. The Merits of this claim [ 21 ] As it stated in the written argument prepared for its

summary application, the City argued on this application that Mr. Rizzuto’s claim is patently without merit and ought not to be revived. Counsel submitted that even assuming the City had required Mr. Rizzuto to obtain approval of his building plans from the developer before the City would issue a building permit as alleged, those facts nonetheless do not give rise to any cause of action. [ 22 ] The City submits firstly that it has neither the lawful authority nor the obligation to enforce the SBS.

In the result, assuming for the sake of argument that it did require compliance with the SBS before issuing a building permit, the City admits it was acting without lawful authority. The City maintains however, that even if it did unlawfully require Mr. Rizzuto to comply with the SBS, it was doing no more than requiring him to do that which he was already required to do under the SBS and that this does not establish a cause of action. [ 23 ] Secondly, the City characterizes Mr.

Rizzuto’s claim as one in damages arising out of the City’s failure to continue to act unlawfully by requiring other property owners in the subdivision to prove compliance with the SBS, which it submits also does not disclose a cause of action known in law. [ 24 ] Alternatively, the City submits that even if it could lawfully enforce the SBS, which it denies is the case, it is clear in law that the enforcement of such a covenant is discretionary and no cause of action can arise for a failure of a municipality or local government to enforce a covenant. [ 25 ] In the further alternative, the City submits that even if Mr.

Rizzuto did sustain damages by reason of having to obtain approval from the developer prior to the issuance of a building permit, his action is statute barred by s. 285 of the Local Government Act . [ 26 ] The question on this application is whether it is plain and obvious that these defences give rise to an absolute bar to this claim such that it is not even worthy of investigation. In this regard, it is useful to bear in mind Mr. Rizzuto’s claim as I have set it out in paras. 5 and 6 above. [ 27 ] I find that Mr.

Rizzuto’s claim, though not expressly stated (and not surprisingly given that he is self-represented), is one for damages arising out of an alleged negligent misrepresentation or, alternatively abuse of public office. Mr. Rizzuto specifically alleges that by requiring him to prove compliance with the SBS before issuing a building permit, the City misled him into believing that it would enforce the SBS. If, as alleged, the City led Mr. Rizzuto to believe it would enforce the SBS, it is no answer to the claim of negligent misrepresentation to say the City had no authority to do so.

The questions that must be answered are whether Mr. Rizzuto can prove reasonable reliance, what he did or did not do in reliance on this alleged misrepresentation, and whether he can prove damages flowed as a result. [ 28 ] Mr. Rizzuto alleges that had he known the City would not honour the SBS, he would have built differently or purchased property in an area not covered by the SBS. He did neither and now owns a home the value of which is alleged to have declined as a consequence of the City’s non-action. [ 29 ] I have some difficulty with Mr.

Rizzuto’s allegation that he would have built differently had he known the City would not and, as a matter of law, could not enforce the SBS given that he purchased the property and obtained approval from the developer well before seeking a building permit from the City. However, this would be a matter for the trial judge to decide. I cannot say at this point that the claim is unworthy of investigation on its face on the ground that it discloses no cause of action. [ 30 ] Mr.

Rizzuto claims not only to have been misled by the City to his detriment, but he seeks damages for the failure of the City to enforce the SBS. The City, as noted, submits it either has no authority to enforce the SBS in which case it could not be compelled to do so, or alternatively, if it does have authority, it cannot be compelled to enforce the SBS. That, the City says, is because Century Holdings Ltd. v. Delta (District) , [1994] B.C.J. No. 693 , holds that the enforcement of a covenant by a municipality is a discretionary matter. Either way, the City submits that Mr. Rizzuto’s claim cannot succeed.

I have already concluded that the fact the City had no authority to enforce the SBS would not bar Mr. Rizzuto’s claim in negligent misrepresentation. [ 31 ] As for the alternative argument, even if I accept that the enforcement of the SBS is purely discretionary, it is implicit in the argument that the decision to enforce or not to enforce the SBS constitutes the exercise of a public law power. It is clear in law that the exercise of a public law power may be subject to claims of abuse. Here, though not perfectly drafted, Mr.

Rizzuto’s claim is that the City has done one thing in his case and another in the case of other similarly situated property owners. In other words, he has been singled

out and the City’s exercise of its discretion has been improper and an abuse of public office. Whether or not such a claim can be proven is another matter but Mr. Rizzuto’s claim does disclose a cause of action known in law. [ 32 ] The second leg of the City’s argument on the merits of this case is that whether or not Mr. Rizzuto’s claim discloses a cause of action, his claim for damages is statute barred. [ 33 ] The City relies on s. 285 of the Local Government Act which provides as follows: All actions against a municipality for the unlawful doing of anything that

a) is purported to have been done by the municipality under the powers conferred by

an Act, and

b) might have been lawfully done by the municipality if acting in a manner established by law, must be commenced within 6 months after the cause of action first arose, or within a further period designated by the council in a particular case, but not afterwards. [ 34 ] The City submits, in reliance on the reasons of Robinson L.J.S.C. in Grande v. Nelson , [1989] B.C.J. No. 476 , that a cause of action for the purpose of s. 285 arises at the time the damages occur; not from the time the damages are discovered.

As such, it is submitted, it is clear in law that whether or not the City acted unlawfully to the detriment of Mr. Rizzuto, any damages he suffered occurred in 2007 at the latest when the City led him to believe it would enforce the SBS. [ 35 ] I do not find it so clear that the damages if they occurred at all in this case occurred in 2007 when the City issued Mr. Rizzuto’s building permit. If the damages occurred as alleged by Mr. Rizzuto, they would have occurred sometime after that once Mr. Rizzuto acted to his detriment and upon reliance of the comfort he thought the City had given him.

In my view, the time at which the damages in this case occurred is not so clear that the claim can be said to be completely without merit for the purposes of this application to set aside the default order. [ 36 ] Turning to the City’s alternative argument, if it does have authority to enforce the SBS and simply chooses not to in Mr. Rizzuto’s case, Mr. Rizzuto’s claim, assuming he has one, is ongoing. The City may succeed on the argument that it exercises sole discretion in deciding whether or not to enforce a covenant which discretion is immune from judicial review, but if it is wrong Mr.

Rizzuto’s claim would not otherwise be time barred. [ 37 ] I have found that Mr. Rizzuto’s claim is at least worthy of investigation. For the reasons set out immediately above, I am also not satisfied that the case for the statutory time bar is so clear that the claim should not be allowed to proceed at least to the

summary argument. Given these findings, I must now consider whether Mr. Rizzuto has met the remaining conditions for the setting aside of the default order. Other Considerations [ 38 ] There is no doubt that Mr. Rizzuto acted quickly in seeking to set aside the default order. The only question is whether his explanation for failing to attend is reasonable. I have found it evident that Mr. Rizzuto wants his day in court and for that reason I accept his explanation that he was unaware of the hearing date.

It follows that the default order must be set aside as well as the penalty granted in default. [ 39 ] Even though I find Mr. Rizzuto has provided a reason for failing to appear, it is appropriate in this case that he compensate the City for its appearance on January 23, 2012 and at this application to set aside the default order. I order that Mr. Rizzuto pay to the City its reasonable costs for attending both hearings forthwith and in any event of the cause. [ 40 ] This matter must be set back on the list for a hearing of the City’s

summary application to strike if the City chooses to proceed with that application. Otherwise, the matter may be set for trial. However, the matter may not be set back on the list for either a hearing or trial until Mr. Rizzuto pays the City pursuant to this Order. ________________________________ The Honourable Judge L.J. Mrozinski