Ferguson v Tejpar, 2023 ABKB 82

Court of King’s Bench of Alberta Citation: Ferguson v Tejpar, 2023 ABKB 82 Date: 20230214 Docket: 2101 00793 Registry: Calgary Between: Thomas H. Ferguson Applicant - and - Ali Tejpar, Zahra Tejpar, Registrar of Land Titles for the Land Titles Office, John Doe, Jane Doe, and ABC Corporation Respondents _______________________________________________________ Reasons for Decision of the Honourable Justice C. Dario _______________________________________________________ [ 1 ] This is a costs determination pertaining to a decision of this court found at Ferguson v Tejpar , 2022 ABKB 656 (the “Decision”).

In that Decision, I directed that the parties were responsible for their respective costs related to the Discharge Order and the Restoration Order, as such terms are defined in the Decision. [ 2 ] This cost determination pertains to Mr.

Ferguson’s, (the “Applicant”) application: - To set aside the Discharge Order; - To deem the Purported Instrument as the lost Instrument and restore it to the title of the Property; and - To grant a permanent injunction requiring the Respondents to comply with the Caveat, including halting any subdivision and prohibiting construction of more than one private residence and one private garage in connection therewith on the Property; - which applications were successful.

[3] And the Tejpars’ (the “Respondents”) application: - To set aside the Restoration Order, which application was successful; - For declaratory relief confirming that the Caveat and associated Instrument are not enforceable against the Property, and thereforedo not prevent their proposed subdivision and development of the Property, which application was unsuccessful. [4] Pursuant to Rule 10.29(1) of the Alberta Rules of Court, the general rule is that a successful party to an application or actionis entitled to costs against the unsuccessful party.

However, this general rule is subject to several exceptions, including the court’s widediscretion in awarding reasonable and proper costs. Rule 10.33 provides a list of factors that a court may consider when determiningcosts. These factors include the degree of success, the amount claimed and recovered, the importance of the issues, the complexity of theaction, and conduct that shortened proceedings. Position of the Parties: [5] While the Respondents were successful in setting aside the Restoration Order, since the Applicant was substantiallysuccessful in the other relief sought, he seeks costs.

Based on case law in support of the proposition that

Schedule C need not be reliedupon (as summarized in McAllister v Calgary (City), 2021 ABCA 25 at paras. 41 to 45), but rather the total amount of recovery shouldapproximate 40-50% of solicitor-client costs, the Applicant seeks costs in an amount that will indemnify him of 45% of his solicitor-client costs (citing Weatherford Canada Partnership v Addie, 2018 ABQB 571 at paras 55-57, aff’d on other grounds 2019 ABCA 14 atparas 55-57).

Specifically, the Applicant seeks 45% indemnity of the total $179,474.17 in costs that he purportedly incurred for thismatter, for a total cost award of $80,763.38. [6] The Respondents argue that no costs should be awarded given the nature of the claim raised, including that the dispute couldnot be resolved other than through litigation, and that the Respondents were relying on an honest but mistaken belief of the legal effect ofthe lost instrument (a restrictive covenant registered on title as a caveat). Further, there were no authoritative rulings by courts or decidedcases that were directly on point.

The Respondents also point to the expeditious manner in which the litigation progressed. [7] Alternatively, they argue that if costs are awarded, they should be based on

Schedule C, column 1, as the relief wasequitable and declaratory in nature. They also note that many of the costs for which the Applicant is seeking indemnity are for mattersthat do not qualify. The permitted

Schedule C costs under column 1 total $7,695. Further, the Respondents point to the fact that Mr.Ferguson received assistance in the litigation costs through fundraising and other community efforts, effectively making a cost awarddouble recovery. Finally, the Respondents note that any costs awarded should be borne by the party who breached the contractualcommitments, being the vendor of the property in question (Mr. Schulli), even though he was not a party to this action. Analysis: [8] I agree that some of the cost that Mr.

Ferguson appears to be claiming pertain to legal fees that do not qualify for this costaward, including costs expended on the prior restoration application and on other community work that was unlikely to have related tothis application. The parties were directed to bear their own respective costs associated with the original Restoration Order andDischarge Order. Mr. Ferguson argues that, while some of these costs may not qualify, since he is only claiming 45% of his totalsolicitor client costs, all of these costs can be included, as the resulting amount is justified.

That would in essence, however, raise thetotal amount of recovery to well above the 45% indemnity range he proposes and above the 40-50% range supported by the case law hecites. This is not an acceptable proposition. [9] In the alternative, Mr. Ferguson submits that the unredacted invoices be assessed by the review officer, with this court’sdirection to determine the appropriate costs award based on a 45% indemnity of the costs incurred for this application. In the furtheralternative, Mr. Ferguson states if

Schedule C is to be relied upon, the court should base the amounts on column 4 rather than column 1.Mr. Ferguson provides no specific justification for this column, other than that the court is not limited to column 1, and its use would beinappropriate in this case. [10] Courts have the discretion to determine costs when

Schedule C fees are inadequate. As Justice Shelley noted in para 55 ofAddie: Alberta Courts have recognized that when

Schedule C fees are inadequate, courts may use several different methods for determiningappropriate costs, including the application of multipliers to a column, extra lump sums, or some fraction of solicitor-client costs(Caterpillar Tractor at para 4; LSI Logic at para 7). The ultimate question is “whether the final total [reached] is reasonable or not”(Caterpillar Tractor at para 4). [11] In this case, Mr. Ferguson is seeking a multiple of around 10 times of costs assessed on column 1 of

Schedule C. Thismultiple would typically be more akin to full solicitor-client costs. Given the nature of the litigation, the speed with which the partieswere able to complete pleadings, questioning and bring the ½ day application before the court, and in view of the materials filed for thismatter, this amount is disproportionate. [12] I agree that, in this case, the fundraising efforts of Mr. Ferguson do not impact his entitlement, if any, to costs.

In the presentcase, the community as a whole benefits from clarification of the rights and obligations captured on their respective titles, so it isappropriate that some of the legal expenses incurred by Mr. Ferguson be shared by that same community. [13] In somewhat analogous circumstances, the court in Crump v Kernahan, (AB KB), [1995] 173 AR 123(QB), considered at paragraph 29 that the applicant in that case had an honest but mistaken belief that the caveat in question did notpreclude the development that was being considered. Justice Rawlins also noted that the case was one that was not capable of

negotiation or settlement. Ultimately, she made no award as to costs. Similarly, in the present case, the Respondents may have had anhonest but mistaken belief prior to the closing of the purchase of the property that the caveat would not preclude the development thatwas being considered, particularly in light of the no-interest position taken by the registered caveator, CP Rail.

While that belief mayhave been formed on insufficient diligence by the Respondents in terms of title searches in the face of a lost instrument, I consider thatmany of the other members of the community were similarly ill informed, as evidenced by their conduct in the August 2020 associationmeeting during which the proposed development was discussed without anyone raising the issue of the caveat.

The Respondents didhowever accept the risk at the time of purchase that the caveat would not interfere in their anticipated development in the face of missinginformation. [14] When the Respondents were informed of the potential problem with the development, they did not cease with their planningand the application for subdivision.

Yet, while a conditional approval to subdivide the property was approved, no actual subdivision orcontravening construction ever commenced; the Respondents deferred such activity until resolution of this issue. [15] Like in Crump, the case before this court was not capable of negotiation or settlement because of the nature of the issuesinvolved. The parties’ interests were in direct conflict. There were no authoritative rulings by courts or decided cases that were directlyon point to assist in resolution.

Further, the resolution of this issue was in the interest of the public, more particularly, owners of over 40lots in Elbow Park, who now will have the instrument restored to their title and all subsequent purchasers of lands subject to thatinstrument will now have better information from which to inform their purchasing decision. [16] Judicial determination was also required in this matter because, even if the Tejpars and Mr. Ferguson had negotiated asettlement, any other property owner who had the Instrument registered to their property could have commenced an action against theTejpars.

Accordingly, judicial determination was necessary to avoid a multiplicity of proceedings and seek a final declaration. Further,the lost instrument was validated not just for the one property, but for all properties with the same instrument number, potentiallymitigating future litigation on other properties. [17] In cases where the issue before the Court is of some public importance and there are no authoritative rulings or decided caseson point, Courts have at times granted no costs orders, particularly in circumstances where the case is determined to be a public interestcase.

The present case is not strictly a public interest case as characterized based on the factors enumerated in Sierra Club of WesternCanada v British Columbia (Chief Forester) (1994), (BC SC), 94 BCLR (2d) 331 (SC), aff’d (BCCA), 7 BCLR (3d) 375 (CA), at paras 49 - 50 of 94 BCLR (2d) 331, and for which the moving party seeks to avoid a cost award againstthem. [18] In the present case, the factors that are consistent with attributes of a public interest case include that the proceeding involvesissues the importance of which extends beyond the immediate interests of the parties involved (although arguably, Mr.

Ferguson, ratherthan the Respondents, was advocating the position of the other interested parties), issues that have not been previously determined by acourt in a proceeding against the same party (or at all). Further, the Respondents did not engage in vexatious, frivolous or abusiveconduct in the claims they advanced in the applications before me. In contrast to those public interest factors, however, the Respondentsclearly have a personal, proprietary, and pecuniary interest in the outcome of the proceeding justifying the proceeding economically.While Mr.

Ferguson may have had some support from his community, it is not apparent that he clearly had a superior capacity to bearthe costs of the proceeding compared to the Respondents (although, again, all members of the community benefited from clarification oftheir rights). Another distinction is that, at least for Mr.

Ferguson’s claims, the Tejpars were the Respondents and not the moving party,although that factor does not materially impact the analysis in this case. [19] This list is not exhaustive when deciding whether an unsuccessful plaintiff should be relieved, in whole or in part, of theobligation to pay costs in a case having public interest dimensions. Even if not strictly a public interest case, the court still has broadjurisdiction in awarding costs.

Accordingly, given the significant issues which impacted the wider public living in Elbow Park and thelack of authoritative rulings, the broader interest of the litigation must be considered in the context of the litigation and requires theexercise of judicial discretion in the cost determination: Prodaniuk v Calgary (City), 2022 ABQB 568 at para 17 citing Pauli v ACE INAInsurance Co, 2004 ABCA 253, para 21; Auer v Auer, 2021 ABQB 860 at paras 29-30. [20] Similar to Justice Rawlins in Crump, I am inclined to limit the cost award for these reasons.

While she granted no costs, Ilimit the costs in the present case to two times the

Schedule C, column 1 for only those steps taken directly related to this applicationarticulated in the Respondents’ brief in the amount of $7,695.00, which doubled totals $15,390. I am mindful that this amount issomewhere between Costs in columns 3 and 4, reflecting a more complex nature of the matter, demonstrated in this case moreparticularly in the parties’ briefs. Costs against a Third Party [21] By way of obiter, at paragraph 111 of the Decision, I noted that the party in breach of his contractual commitment under theCaveat was the vendor, Mr. Schulli. As part of his costs submissions, Mr.

Ferguson submits that he does not know what contractualobligation Mr. Schulli could have breached, thus Mr. Schulli could not be held responsible for costs. [22] While this is again obiter comment, I note that Mr. Schulli, as holder of the title, had deemed notice of the terms of theRestrictive Covenant, just as the Tejpars subsequently did. His sale of the property is subject to the terms of the Caveat (the instrument).Section 3 of that instrument requires that the “Owner” (here, Schulli) insert into all agreements for sale of the Lands restrictivecovenants similar to the covenants contained in that instrument.

Registration of the instrument in land titles and a correspondingprovision in the sales agreement that the sale be subject to any registrations of caveats on title would typically be sufficient to meet thisobligation. In the present case, however, the ability of the Owner to file the Caveat with land titles per

section 3(

l) of the instrument incircumstances such as these (where the instrument is lost by land titles) arguably does not meet or alleviate the Owner of his contractualobligation. Further, Mr. Schulli was specifically asked through his realtor what the details of that instrument were, and he had acontractual obligation to provide the same. While the land titles registration protects the dominant tenements by the terms of theinstrument, arguably the fact of Land Titles’ registration does not eliminate the Owner’s contractual obligation where the details of the

terms could not be reviewed on the registry by the prospective purchaser. [ 23 ] That said, these comments were made as obiter for consideration in future cases of this nature. Mr. Schulli was not named as a party and has not had an opportunity to speak to this issue. While the Respondents note that the court has in past awarded costs against a non-party in other cases, this would be a rare situation and highly factually dependent.

For example, in Aubin v Quantium Technologies Inc , 2022 ABCA 288 at para 51 , the Court held the party before it and a third party were interchangeable and ordered costs on a joint and several basis . Outside of certain limited circumstances, the court is generally reluctant to order costs against a party that is not part of the proceedings and was not provided notice or an opportunity to address the court on the issue. Disposition [ 24 ] With those factors in mind, the court directs that the Respondents pay the Applicant $15,390 in costs for this application.

Dated at the City of Calgary, Alberta this 14 th day of February, 2023. C. Dario J.C.K.B.A. Appearances: Curtis Marble and Lauren Garvie, Carbert Waite LLP for the Applicant Renee Reichelt and Sophie Mansfield, Blake, Cassels & Graydon LLP for the Respondents (excluding the Registrar of Land Titles) No one appearing for the Registrar of Land Titles