2012 NBCA 9, 2012 NBCA 9

COURT OF APPEAL OF NEW BRUNSWICK 4-10-CA CARSON CONSTRUCTION

(1999) LTD. (Respondent) APPELLANT CARSON CONSTRUCTION

(1999) LTD. (Intimé

e) APPELANTE - and - - et - CITY OF MONCTON (Applicant) RESPONDENT MONCTON (Requérante) INTIMÉE Carson Construction

(1999) Ltd. v. City of Moncton, 2012 NBCA 9 Carson Construction

(1999) Ltd. c. Moncton, 2012 NBCA 9 CORAM: The Honourable Justice Bell The Honourable Justice Quigg The Honourable Justice Green CORAM : L’honorable juge Be ll L’honorable juge Quigg L’honorable juge Green Appeal from a decision of the Court of Queen’s Bench: December 11, 2009 Appel d’une décision de la Cour du Banc de la Reine : Le 11 décembre 2009 History of Case: Historique de la cause : Decision under appeal: 2009 NBQB 328 (Unreported) Décision frappée d’appel : 2009 NBBR 328 (Inédite) Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : S.O.

Appeal heard: May 31, 2011 Appel entendu : Le 31 mai 2011 Judgment rendered: February 2, 2012 Jugement rendu : Le 2 février 2012 Reasons for judgment by: The Honourable Justice Green Motifs de jugement : L’honorable juge Green

Concurred in by: The Honourable Justice Bell The Honourable Justice Quigg Souscrivent aux motifs : L’honorable juge Bell L’honorable Quigg Counsel at hearing: For the appellant: Brian F.P. Murphy For the respondent: Basile Chiasson, Q.C. Avocats à l’audience : Pour l’appelante : Brian F.P. Murphy Pour l’intimée : Basile Chiasson, c.r. THE COURT The appeal and the cross-appeal are dismissed. LA COUR Rejette l’appel et l’appel reconventionnel. The judgment of the Court was delivered by GREEN J.A. I.

Introduction [ 1 ] The subject matter of this appeal is a dispute between a construction company (the appellant) and the municipality in which it is located (the respondent) over the operation of stone crushing equipment on a property owned by the company. At issue is whether that specific activity is a legal non-conforming use of the subject property, or whether it is integral or incidental to what is a legal non-conforming use. For the reasons which follow, I would dismiss both the appeal and the cross-appeal. II.

Background [ 2 ] The appellant is a construction company, and as part of its business it operates a construction/contractor’s yard on its property at 815 Gorge Road, Moncton. As the application judge rightly observed, this is not a dispute without a history. [ 3 ] In May 2006, having received complaints, the respondent conducted an inspection of the above-noted property and determined the appellant was conducting a stone crushing operation. An order pursuant to s. 93 of the Community Planning Act , R.S.N.B. 1973, c.

C-12, was issued by the City of Moncton on June 9, 2006, ordering the appellant to “[remove] the crusher equipment and [stop] the operation of stone crushing and aggregate storage on this property […] within fourteen (14) days”. [ 4 ] The matter did not end there. On January 25, 2008, the respondent brought an Application before a judge of the Court of Queen’s Bench, Trial Division, arguing the appellant was using its property contrary to s. 9.7.1 of the City of Moncton Zoning By-law No.

Z-202, A By-law Relating to the Adoption of the City of Moncton Municipal Development Plan , (August 6, 2010), and was therefore in violation of s. 95 of the Community Planning Act . The respondent requested the following relief:

[An order] immediately restraining […] Carson Construction

(1999) Ltd., their employees, agents, successors and assigns, and any other person having notice of this order, from using the lands situate at 815 Gorge Road, in the City of Moncton, County of Westmorland and Province of New Brunswick, PID #00943266, as a construction/contractor’s yard, a repair and maintenance facility and an office, and immediately removing from the said lands any and all construction equipment, including but not limited to, dump trucks, earth moving equipment, storage trailers, heavy equipment, hauling (float) trailer, construction/office trailer, stone crusher, stockpiles of stone and other aggregate, and any and all equipment and materials associated with the construction or contracting industry. [ 5 ] In a decision dated February 28, 2008, the application judge found in favour of Carson Construction, and determined “there was no change in the use of the lands” and further held that the activities being carried out on the property in question were “well within a fair definition of the ‘pre-existing use’ that benefitted from the legal non-conforming right” (paras. 36-37). [ 6 ] Subsequent inspections conducted by the respondent confirmed the appellant continued to use the property as a construction/contractor’s yard and for a “stone crushing operation”.

On December 22, 2008, the Director of Building Inspection for the respondent issued a new order, again pursuant to s. 93 of the Community Planning Act , requiring the appellant to cease said crushing operation.

Further inspections at the site revealed her order was not being respected. [ 7 ] On July 8, 2009, the respondent filed a Notice of Application seeking an order that the appellant be restrained from using the subject property “as a construction/contractor’s yard, and/or for crushing stone or any other aggregate and immediately removing from the said lands any and all equipment related to the operation of a contractors/construction yard and the crushing of stone or aggregate”. [ 8 ] A hearing was held over the course of three days in November, 2009, before a different application judge.

In his December 11, 2009, decision the judge held the request “to restrain the company from using the property as a construction/contractor’s yard is clearly res judicata and is denied” and the request that the appellant be ordered to remove equipment from the property was “also res judicata as squarely within the ambit of the previous decision” (para. 15). [ 9 ] However, the application judge found that the specific issue of the appellant’s right to conduct a stone crushing operation on the property was not res judicata , as it had not been squarely before the court on the earlier application.

As a result, he framed the remaining issue before him as follows: […] does the Company’s non-conforming use permit it to carry on a rock crushing operation on the property? [para. 16] [ 10 ] Following a review of the evidence, and an analysis of the applicable law, the application judge resolved the matter in the following terms: I have for the reasons stated come to the conclusion that the legal non-conforming right which applies to [Carson Construction’s] use of the property at 815 Gorge Road, Moncton, New Brunswick, identified as PID #00943266 does not permit the Company to carry on a rock crushing operation on the property. [para. 58] [ 11 ] The company appeals that finding, and the respondent, for reasons I will expand upon later, cross-appeals on the issue of the application judge’s costs award.

III. Issues [ 12 ] The appellant sets out 6 grounds of appeal, which I believe can be summarized as follows:

1. Did the application judge err in finding that the stone crushing issue was not res judicata, having considered the February 28, 2008,decision? 2. Did the application err in finding that stone crushing was not a legal non-conforming use of the subject property? 3. Did the application judge err in finding that stone crushing was not an integral part of, or incidental to, the operation of the subjectproperty as a construction/contractor’s yard? IV. Law and Analysis A. Res Judicata [13] The doctrine of res judicata is well established and serves to bring both certainty and finality to matters beforethe courts.

Once a court of competent jurisdiction makes a final determination of a particular issue, that decision is conclusive and servesas a bar to any future action pursuing the same claim. [14] In Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, the Supreme Court providedthe following direction: The rules governing issue estoppel should not be mechanically applied.

The underlying purpose is to balance the public interest in thefinality of litigation with the public interest in ensuring that justice is done on the facts of a particular case. (There are correspondingprivate interests.) The first step is to determine whether the moving party (in this case the respondent) has established the preconditionsto the operation of issue estoppel set out by Dickson J. in Angle, supra. If successful, the court must still determine whether, as a matterof discretion, issue estoppel ought to be applied: British Columbia (Minister of Forests) v.

Bugbusters Pest Management Inc. (1998), (BC CA), 50 B.C.L.R. (3d) 1 (C.A.), at para. 32; Schweneke v. Ontario (2000), (ON CA), 47 O.R.(3d) 97 (C.A.), at paras. 38-39; Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (1999), 1999 NSCA 77, 176 N.S.R. (2d) 173 (C.A.), at para. 56. [para. 33] [15] In this Court, Drapeau C.J.N.B. discussed the res judicata doctrine in McNichol v.

Co-operators GeneralInsurance Company, 2006 NBCA 54, 298 N.B.R. (2d) 44: It is trite law that the principle of res judicata which is designed to achieve justice and whose application may involve the principledexercise of discretion, does not operate to oust the court's jurisdiction. The principle provides the parties a defence to which the courtmay give effect in the exercise of its jurisdiction to try the action: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2S.C.R. 460; Côté v.

Desjardins, (2000), 2000 NBCA 52 , 232 N.B.R. (2d) 343 (C.A.) at paras. 13-14, Larlee J.A.; ExecutiveDirector of Assessment v. Ganong Bros. Ltd. 2004 NBCA 46, (2004), 271 N.B.R. (2d) 43 (C.A.) at paras. 44-47, Robertson J.A. ; Hoquev. Montreal Trust Co. et al., (1997), 1997 NSCA 153 , 162 N.S.R. (2d) 321 (C.A.) at paras. 37 and 64, Cromwell J.A.;Desrosiers v. Banque Nationale du Canada, (1998), (NB CA), 201 N.B.R. (2d) 103 (C.A.) and Cayouette et al. v.Co-operators General Insurance Co. (2000), (NB CA), 227 N.B.R. (2d) 283 (C.A.). Clearly, Rule 23.01(2) (

a) is ofno assistance to Co-Op. [para. 23] [16] The appellant contends the first application judge “did turn his mind to the stone-crushing aspect of [theappellant’s] operations, and made a final determination in this regard”. The respondent adopts the position that the issue was notsquarely dealt with, and was therefore open to further litigation.

[17] For his part, the second application judge considered the res judicata argument and came to this conclusion: There can be no question that these two issues [non-conforming right to use the property as a construction/contractor’s yard, anddiscontinuance], as they came before my colleague Dionne, are res judicata before me. However, in fairness the issue of whether theallowed non-conforming use permitted the use of a rock crushing operation was not put squarely before him. It certainly was the thrust of the City’s 2006 order.

It was also danced around in the relief requested and in the evidence adduced at the2008 Application. Nonetheless, [Carson Construction] had the onus only to show it was not using the property other than as aconstruction/contractor’s yard, a repair and maintenance facility or an office to show it had legal right by way of non-conforming use todo so. This it did. The City had the onus to show that the Company had discontinued the non-conforming use it had acquired. This it failed to do. Again, the present Application before me is faulty.

The Order to restrain the Company from using the property as aconstruction/contractor’s yard is clearly res judicata and is denied. Further the ancillary relief requested to remove equipment from theproperty, whether related to a contractor’s/construction yard or the crushing of stone or aggregate is also res judicata as squarely withinthe ambit of the previous decision. That request for relief is also denied. That leaves me with the original question put, that is: does the Company’s non-conforming use permit it to carry on a rock crushingoperation on the property?

As I ruled orally at the hearing, I conclude this question was not issue estopped by the previous decision under the doctrine of resjudicata. [paras. 12-17] [18] That the parties were the same in each of the two applications is self-evident. It is also clear that the decisionof the first application judge was final. The only remaining question is whether or not the decision of the first application judge on theappellant’s right to a non-conforming use included a stone crushing operation.

The second application judge concluded it did not, and Iagree. [19] The first application sought to prevent the appellant from using its property as: 1. a construction/contactor’s yard; 2. a repair and maintenance facility; and 3. an office. There was no mention of a stone crushing operation. In fairness, the respondent also sought to have removed from the property “any andall construction equipment”, including a “stone crusher”.

The inclusion of a “stone crusher” in the list of equipment the respondentsought to have removed does not equate to its inclusion in the list of activities the respondent sought to have prohibited. I would dismissthe res judicata issue as a ground of appeal. [20] In so dismissing the res judicata ground, I am mindful of our Court’s decision, per Ryan J.A., in Comeau v.Breau (1994), (NB CA), 145 N.B.R. (2d) 329, [1994] N.B.J. No. 74 (QL), although it was not cited by either party. The following passage contains the relevant comments on the principle in question:

The authors Sopinka, Lederman and Bryant, The Law of Evidence in Canada (Toronto and Vancouver: Butterworths, 1993) offer tworeasons why estoppel by res judicata is based upon broad principles of public policy. The first is that the state has an interest that thereshould be an end to litigation. Secondly, no individual should be sued more than once for the same cause.

At page 989 the authors set outtheir assessment of the common law rule of estoppel by res judicata which they say is procedural, not substantive: No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in aformer suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a courtof jurisdiction competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard andfinally decided by such Court.

The essential components of estoppel by res judicata are set out by Aikins. J., in Re Bullen (1971), (BC SC), 21D.L.R. (3d) 628 (B.C.S.C.) at 631 quoting from G. Spencer-Bower and A. Turner, The Doctrine of Res Judicata (2nd ed.) (London:Butterworths, 1969) at 18-19. They can be summarized as a final judicial decision pronounced by a court of competent jurisdiction inwhich the cause of action or the issues have been identified as well as the parties and anyone claiming under them or entitled throughthem to exert any right.

CAUSE OF ACTION AND ISSUE ESTOPPEL In a cause of action estoppel, there must be a completely different cause of action asserted in order to avoid the rule. More simply put,were the facts upon which the Breaus were found liable to Comeau for the wrongful retaking of the restaurant business substantially thesame and in issue in the intended second suit? The answer is "yes". The facts constituting the cause of action in this case remain the samewhether the action is founded in contract or in tort although the remedy might well be different.

Issue estoppel, on the other hand, generally comes about when the parties are prevented from calling into question particular issueswhich have already been decided between them. The authors of The Law of Evidence in Canada offer as an example, at page 1003, thecase of Beeches Workingmen's Club and Institute Trustees v. Scott, [1969] 2 All E.R. 420 (C.A.). The case concerned themisappropriation of property by an employee. A complaint was laid under a certain statute and the employee was acquitted. Theemployer then sued in the county court for repayment. Denning, M.R. held there was no issue estoppel.

The issue before the magistratewas whether the employee had contravened the statute whereas the issue before the county court was liability under a contract ofservice. The constituent elements between "cause of action estoppel" on the one hand, which precludes a person from bringing an action againagainst another when the same cause of action has been determined in an earlier proceeding, and "issue estoppel", are further explainedin the reasons for judgment of Dickson, J., in Angle v. Minister of National Revenue, (SCC), [1975] 2 S.C.R. 248 at254. See also Oley and Moffatt v.

Fredericton (City) (1984), (NB CA), 57 N.B.R. (2d) 361 at 367. [para. 25-29] [21] In that same case, Rice J.A. authored a concurring opinion which also merits mention here: The principle of res judicata founded on estoppel is rooted in equitable principles. Defendants ought not to be subjected to multipleproceedings relating to the same cause of action. The words of Lord Wigram in Henderson v.

Henderson (1843), 3 Hare 100 at p. 115, 67E.R. 313, at p. 319, are still appropriate today in enunciating the principle, and applying it to the circumstances of this appeal. ... where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requiresthe parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same partiesto open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, butwhich was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.

Theplea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to forman opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties,exercising reasonable diligence, might have brought forward at the time. [para. 13] [22] The situation in Comeau saw the plaintiff successfully sue for breach of contract, and then launch a secondaction framed in tort based on the exact same facts, attempting to recover further damages. He was not permitted to do this.

The case atbar presents a decidedly different scenario. In its first application, the respondent pursued the appropriate legal avenue to secure the

relief sought, which was to prevent the appellant from using the subject property as a construction/contractor’s yard. [ 23 ] In the respondent’s second application, the renewed attempt to close the yard in its entirety was clearly res judicata , that cause of action having already been adjudicated upon. The other component of the second application, however, was aimed squarely at bringing to an end the specific activity of ongoing stone crushing operations.

I am not prepared to say that by pursuing the broad issue of operating a construction/contractor’s yard in its first application, the respondent was forever after barred from pursuing the narrow issue of stone crushing. That outcome would permit the appellant to continue an ongoing pattern of activity it was not legally entitled to engage in. We are not dealing with an isolated incident which had taken place in the distant past.

Instead, we are dealing with the repeated violation of a municipal zoning by-law, which was a legitimate cause for concern for both the respondent municipality and neighbouring property owners. B. Legal Non-Conforming Use and Integral or Incidental to a Legal Non-Conforming Use [ 24 ] I shall consider these final two grounds of appeal together. The second application judge, and both parties on appeal, relied on the Supreme Court decision in Saint-Romuald (City) v.

Olivier, 2001 SCC 57 , [2001] 2 S.C.R. 898 , in which Binnie J. of the Supreme Court held as follows: In my view, both remoteness and neighbourhood effects have a role to play in the proper disposition of this type of case. Each contributes to what Gonthier J. refers to as the real and natural expectation of the landowner. The Court ’ s objective is to maintain a fair balance between the individual landowner ’ s interest and the community ’ s interest. The landowner overreaches itself if (

i) the scale or intensity of the activity can be said to bring about a change in the type of use, as mentioned above, or if (ii) the addition of new activities or the modification of old activities (albeit within the same general land use purpose), is seen by the court as too remote from the earlier activities to be entitled to protection, or if (iii) the new or modified activities can be shown to create undue additional or aggravated problems for the municipality, the local authorities, or the neighbours, as compared with what went before. The factors are balanced against one another.

Thus, adding a metal panel beating operation to an automobile repair shop in a residential neighbourhood will probably (despite the logical business affinity) be characterized as a new type of use, whereas a local non-conforming grocer [sic] store use that adds an innocuous fax machine – clearly an activity unrelated to selling groceries – will likely succeed (assuming someone wished to challenge it) by defining its prior operation as a “convenience store” rather than a “grocery store”. [para. 34] [ 25 ] Upon consideration of the evidence before him, the second application judge found that stone crushing was not “an intensification of pre-existing activity”.

He further found that stone crushing was “too remote from earlier activities protected as a legal non-conforming use, i.e. beyond any fair definition of the pre-existing use” (paras. 50 and 56). With respect, the appellant has not convinced me that the application judge’s decision holds any reversible error. Given the evidence presented, I find the application judge’s conclusions were reasonable, and I would not interfere. I need not reproduce his analysis here, nor repeat the exercise to arrive at the same destination. As a result, I would dismiss the two remaining grounds of appeal. C.

The Costs Issue [ 26 ] Counsel for the respondent/cross-appellant acknowledged that coming before the Court of Appeal on costs was what he termed “a risky venture”. It is well established that this Court will show considerable deference on costs, but that deference is not absolute. Two recent decisions have explored the issue. In Townsend-Grant v. Grant , 2011 NBCA 12 , 369 N.B.R. (2d) 202 , Bell J.A. stated as follows: The trial judge is vested with a very broad discretion in relation to the assessment of costs.

The exercise of that discretion should not be interfered with unless manifestly wrong: Saint John Regional Hospital v. Comeau, 2001 NBCA 113 , 244 N.B.R. (2d) 201; Ms . P.H. v. Mr. P.H ., 2008 NBCA 17 , 328 N.B.R. (2d) 245. In British Columbia (Minister of Forests) v.

Okanagan Indian Band , 2003 SCC 71 , [2003] 3 S.C.R. 371, LeBel J. stated: The power to order costs is discretionary, but it is a discretion that must be exercised judicially, and accordingly the ordinary rules of costs should be followed unless the circumstances justify a different approach. [para. 22] It is trite law that costs normally follow the cause. Should a trial judge decide to depart from that rule he or she is required to justify the departure: Dupuis v. Moncton (City) , 2005 NBCA 47 , 284 N.B.R. (2d) 97, para. 40 . In Orkin, The Law of Costs (Toronto: Canada Law Book Ltd., 1965), the author states:

The fundamental principles of costs as between party and party is that they are given by the court as an indemnity to the person entitledto them; they are not imposed as punishment on the person who must pay them. Party and party costs are in effect damages awarded tothe successful litigant as compensation for the expense to which he has been put by reason of the litigation. [p. 14] Orkin’s observations have, of course, been expanded upon in Rule 59.02 of the New Brunswick Rules of Court.

In fixing an award ofcosts under that Rule, trial judges may consider, in addition to success or failure, the amount claimed and recovered, the complexity ofthe proceedings, the importance of the issues, the conduct of any party which tends to lengthen the proceedings, and any improper orvexatious conduct. [paras. 14-16] [27] The second decision I refer to is Doucet and Dauphinee v. Spielo Manufacturing Incorporated and Manship,2011 NBCA 44, [2011] N.B.J. No. 153 (QL), in which Robertson J.A. wrote: No one needs reminding of the principle that cost orders are owed deference.

Appellate interference is not warranted unless it isestablished that the trial judge erred in principle, or fixed costs that are so inordinately high or so low as to be manifestly wrong. Withrespect to the deference issue see Becker et al. v. Cleland's Estate et al. (1981), (NB CA), 35 N.B.R. (2d) 542, [1981]N.B.J. No. 198 (C.A.) (QL); Boyle v. Atherton, Atherton Estate and Eureka Holdings (1983), (NB CA), 51 N.B.R.(2d) 151, [1983] N.B.J. No. 345 (C.A.) (QL); Daigle and Workers' Compensation Board (N.B.) v.

Cape Breton Crane Rentals Ltd.,Canadian Indemnity Co. and Frechette, (1987), (NB CA), 91 N.B.R. (2d) 189, [1987] N.B.J. No. 1019 (C.A.) (QL);Proenca v. Squires Home Improvements & Total Renovations, Perry and Melanson, 2001 NBCA 45, 252 N.B.R. (2d) 274; Saint JohnRegional Hospital v. Comeau, 2001 NBCA 113, 244 N.B.R. (2d) 201; and Province of New Brunswick v. Stephen Moffett Ltd., 2008NBCA 9, 326 N.B.R. (2d) 242; and Townsend-Grant v. Grant, 2011 NBCA 12, [2011] N.B.J.

No. 33 (QL). [para. 115] [28] In the present case, the application judge chose to deviate from the principle that costs follow the cause, andmade an award of costs in favour of the unsuccessful party. In his decision, he explains his reasoning as follows: The issue of costs on this Application has caused me some concern. It is my view that the issue of the use of the property as a rockcrushing operation should have been squarely put before the Court by the City on its first Application. In the face of the ‘stop’ order ofJune 9, 2006 it was clearly the central issue.

Yet the City went to the Court with the request that the Company be ordered to cease to usethe property as a construction/contractor’s yard, a repair and maintenance facility and an office. In my view that request was correctly refused upon recognition of the company’s right to such a non-conforming use. The result was that the City brought this second Application and I can see no excuse as to why it was made necessary. The processcaused unnecessary costs and unwarranted demand on the time of the parties, other interested persons and the Court.

I see this case as an exception of the general rule that costs follow the cause and I have decided that costs should be awarded against theCity on this Application even in the face of its apparent success. […] The respondent shall have costs against the Applicant which I set in the amount of $5,000.00. [paras. 60-65] [29] It is my view that the application judge was entirely reasonable in determining the circumstances of this casewarrant a different approach to the awarding of costs. He exercised his discretion judicially and justified his decision with clear, concisereasons.

I would accord deference to his decision, and not interfere.

V. Disposition [ 30 ] For the reasons outlined above, I would dismiss both the appeal and the cross-appeal. But for the cross-appeal, I would have awarded $2,500 in costs to the respondent. Given the respondent’s lack of success on that issue, I would reduce the costs awarded on appeal to $1,500. ____________________________ BRADLEY V. GREEN, J.A. WE CONCUR: ________________________________ B. RICHARD BELL, J.A. ________________________________ KATHLEEN A. QUIGG, J.A.