Costello and Dickhoff v. Calgary (City), (1995) 163 A.R. 241 (QB)

• Judge: Rooke, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 06, 1995
• Citations: (1995), 163 A.R. 241 (QB)

Costello v. Calgary (1995), 163 A.R. 241 (QB)

MLB headnote and full text

Elizabeth Jean Costello and Mary Ann Dickhoff (plaintiffs) v. The City of Calgary (defendant)

(Action No. 8501-02634)

Indexed As: Costello and Dickhoff v. Calgary (City)

Alberta Court of Queen's Bench

Judicial District of Calgary

Rooke, J.

January 6, 1995.

Summary:

In November 1972 the city purported to pass a bylaw expropriating the plaintiffs' land and motel. The city took title in De­cember 1972. In March 1974, the city took possession. The plaintiffs sued for a declar­ation that the bylaw was void. In 1980, the Alberta Court of Queen's Bench dismissed the action (31 A.R. 86), which was affirmed on appeal in 1981. In 1983, the Supreme Court of Canada declared the expropriation void (46 N.R. 54; 41 A.R. 318). In October 1983, the city restored possession and title to the plaintiffs. In 1985, the plaintiffs sued the city for damages for trespass. The Alberta Court of Queen's Bench ruled that the action was statute barred (81 A.R. 282). The Alberta Court of Appeal overturned that decision (97 A.R. 348). Accordingly, the action proceeded. The issues were (1) was there an action in trespass; and (2) if so, were the plaintiffs entitled to damages and what was the measure of those damages.

The Alberta Court of Queen's Bench allowed the action in trespass and awarded the plaintiffs $1,927,061 in damages (inclu­sive of interest) for the reasonable loss of cash flow from the operation of a 40 unit motel expected to be in operation on January 1, 1974 to the date title was returned on October 17, 1983 and thereafter until De­cember 31, 1985.

Damages - Topic 1002

Mitigation - Duty to mitigate - The Alberta Court of Queen's Bench stated that "after damages are prima facie determined, miti­gation thereof may need to be con­sidered, if raised by the defence. While the plaintiff must act reasonably and take reasonable steps (based on the prudent person prin­ciple) to mitigate the damages (that is, to avoid action or inaction which will, itself, cause loss), the onus of proof is on the defendant. A finding of lack of mitigation is a question of fact, forming a legal con­clusion, depending on the cir­cumstances of the case; however, the measures which the plaintiff must take 'ought not ... be weighed in nice scales at the instance of the party whose breach ... has occasioned the difficulty'" - See para­graph 60.

Damages - Topic 1002

Mitigation - Duty to mitigate - A city's expropriation was declared void - The city was found liable in trespass for damages - The Alberta Court of Queen's Bench stated that "specific limits to the require­ment of miti­gation include: (a) a plaintiff need not expend at all, or if so, then only within reasonable time limits, resources to acquire a new property if the plaintiff seeks to have, and has a reasonable chance to have, the lost property returned - in other words, 'the plaintiff is not bound to embark on a speculative venture for the defendant's benefit'; (b) the plaintiff's impecuniosity, depending on the facts found and the degree of remoteness from the defendant's wrongdoing, may not disentitle recovery; and (c) in either case, whether the expro­priating authority has advanced funds estimated to represent the fair market value of the lands purportedly expropriated, and whether the amount thereof paid or pro­posed is such that the owner is reasonably able to acquire a comparable property, will be relevant considerations" - See para­graph 60.

Damages - Topic 1002

Mitigation - Duty to mitigate - In No­vem­ber 1972, the city purported to pass a bylaw expropriating the plaintiffs' land and motel - The city took title in December 1972 and possession in March 1974 - In 1983, the Supreme Court of Canada declared the expropriation void for failing to give proper notice - Accordingly, the city lacked lawful authority from the in­ception for intentionally taking the land - The Alberta Court of Queen's Bench held that the city was liable in damages for trespass - The city claimed the owners failed to mitigate by not finding and pur­chasing replacement property - The court stated that where the owners "were seeking to have the purported expropriation declared void and the land returned ... they were, in law, not required to secure a replacement property" - Further, the city failed to establish the existence of com­parable property - See paragraphs 66 to 67.

Damages - Topic 1084

Mitigation - Evidence and proof - Burden of proof - The Alberta Court of Queen's Bench stated that "the law is clear that the onus of proof on the issue of mitigation is on the defendant. If the defendant fails to show the plaintiff had a duty to mitigate (in the circumstances of a case), or, if the plaintiff has a duty, fails to show that the plaintiff was unreasonable in not taking certain alleged mitigative steps, then the normal measure of damages will apply" - See paragraph 59.

Damages - Topic 1300

Exemplary or punitive damages - Trespass - [See seventh Damages - Topic 4212 ].

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "nominal damages for trespass will flow even if no damage or loss is sus­tained. As with all actionable wrongs in tort (and contract), damages are intended to put the plaintiff, as nearly as possible, in the same position as if the wrong had not been sustained. The onus is on the plaintiff to prove damages (beyond the nominal)" - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "damages will usually be limited to loss arising from the period of wrongful deprivation. Usually damages are separated between the loss of use and loss of value. Double compensation is to be avoided. Often compensation for total lost value will disentitle compensation, in whole or part, for loss of use. Loss of use will normally entitle one, but not both of: interest on the capital value at a minimum (as when the use of the land would remain dormant, or specific profit for loss of use is not proven); or, more commonly, user profits that would reasonably be expected to be earned such as net rent, net revenue from production on and from the land, etc." - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "where the defendant has earned rev­enue from the land, or used it for the defendant's own purposes, during the period of deprivation, the damages will not normally be less than the net value there­of" - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "if the market value has decreased from the date of deprivation to the date of reinstatement, damages will normally include the net loss in value, plus interest, especially if it is reasonable to assume a sale on reinstatement. Alternatively, if a sale of the land was a reasonable alterna­tive to production, and a reasonable, not too remote ... opportunity to do so was lost, the potential net gain, plus interest thereon may be recoverable" - See para­graph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "in assessing damages it is always a fact to be found as to what would be the reasonable and probable use of the land during the period of wrongful possession, and while the onus is on the plaintiff to prove such use, the plaintiff is entitled to a prima facie presumption that the owner will use the property in a reasonable and useful way. However, remoteness is an appropriate matter for consideration" - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "while the normal rule is that the principles of compensation applicable to expropriation are not applicable to actions for damages for trespass to land, in some cases, such as where the property has not been returned; an action for damages is combined with a declaration that a pur­ported expropriation is void; the trespass is quite 'technical'; and a new expropriation is proceeding and/or likely to proceed in circumstances where there is no realistic possibility that the property can be effec­tively returned; damages may be assessed on the 'fiction' that an expropriation has, de facto, taken place at the time of deci­sion. In such situations, the damages are equal to the value of the property at that time; however, the loss of use of the prop­erty, plus the change in value from depri­vation to decision, should also be con­sidered" - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A void expro­priation left a city liable to the landowner for trespass - The lands were returned - The Alberta Court of Queen's Bench stated that "a successful action for trespass to land may entitle the plaintiff to punitive or exemplary damages if the authority had: a wrongful intent; culpability; mala fides (for example, continuing while knowing that its purported expropriation was defective, or was reckless or negligent, in this regard); was fraudulent, reprehensible, oppressive, highhanded, arbitrary, arrogant, defiant, contemptuously; or has a cynical or callous disregard for the rights of the former owner" - See paragraph 60.

Damages - Topic 4212

Torts affecting land and buildings - Nor­mal measure - Trespass - A 1972 expro­priation of land for a future highway inter­change was declared void in 1983, because of a failure to provide required notice - Title and possession were restored in 1983 - The owners had intended to develop the land for a 40 unit motel - The Alberta Court of Queen's Bench found the expro­priating authority liable in damages for trespass - Damages were based on the highest and best use of the land without regard to the intent to use the land in the future for an interchange - The owners were entitled to compensation for lost profits from the motel operation from January 1, 1974 to the date of return in 1983, plus lost profits thereafter until December 31, 1985 (to allow for planning prior to the application for a development permit) - Further, the owners were entitled to interest at common law (compounded annually) from 1974 to the date of trial - See paragraphs 75 to 123.

Interest - Topic 5008

As damages (prejudgment interest) - Enti­tlement - [See eighth Damages - Topic 4212 ].

Interest - Topic 5010

As damages (prejudgment interest) - Cal­culation of interest - Simple or compound - [See eighth Damages - Topic 4212 ].

Torts - Topic 3000

Trespass - Trespass to land - Basis of liability - The Alberta Court of Queen's Bench stated that "a purported expropri­ation by an authority authorized to do so, but who does so without strict compliance with the statutory procedures required, unless expressly or impliedly consented to by the owner, resulting in a declaration of void expropriation, constitutes an unlawful entry on land, and, in effect, a conversion, which constitutes in law, a trespass to land, if it interferes with the owner's rights and prevents the owner dealing with it or using it as if owned" - See paragraph 44.

Torts - Topic 3002

Trespass - Trespass to land - What con­stitutes - In November 1972, the city pur­ported to pass a bylaw expropriating the plaintiffs' land and motel - The city took title in December 1972 and pos­session in March 1974 - The plaintiffs sued for a declaration that the bylaw was void - In 1980, the Alberta Court of Queen's Bench dismissed the action, which was affirmed on appeal in 1981 - In 1983, the Supreme Court of Canada declared the expropriation void for failing to give proper notice - Accordingly, the city lacked lawful author­ity from the inception for in­tentionally taking the land - The Alberta Court of Queen's Bench held that the city was liable in damages for trespass - See para­graphs 14 to 46.

Torts - Topic 3015

Trespass - Trespass to land - Defences - A city expropriated land without giving proper notice, accordingly, the expropri­ation was void - The Alberta Court of Queen's Bench stated that "the unlawful entry arises not because the authority acted wrongly (in the absence of knowledge that its procedures were defective), but because, by the declaration of the void expropriation, it never had lawful authority to take ownership and/or possession. Any of a: mistaken belief of fact or lawful authority (even if unchallenged for a period of time, or temporarily confirmed by lower courts); lack of wrongful intent; lack of negligence; or lack of fault is no defence. That is, even if the authority had a right to legally expropriate, it will have no lawful authority to enter, unless it exercised its statutory right in a legal fashion (lawful execution of legal pro­cess)" - See paragraph 44.

Torts - Topic 3050

Trespass - Trespass to land - Damages - [See eighth Damages - Topic 4212 ].

Cases Noticed:

Eastwalsh Homes Ltd. v. Anatal Develop­ments Ltd. (1993), 62 O.A.C. 20; 100 D.L.R.(4th) 469 (C.A.), refd to. [para. 15].

Goldie v. Oswald (1814), E.R. 957 (H.L.), refd to. [para. 21].

Maunsell v. Lethbridge Northern Irrigation District, [1926] S.C.R. 603, refd to. [para. 22].

Maunsell v. Lethbridge Northern Irrigation District, [1925] 3 W.W.R. 202; 21 Alta. L.R. 49 (C.A.), refd to. [para. 22].

Hanley v. Toronto, Hamilton and Buffalo Railway Co. (1905), 11 O.L.R. 91 (H.C.), refd to. [para. 22].

Cardwell v. Midland Railway Co. (1904), 21 T.L.R. 22 (C.A.), refd to. [para. 22].

Leahy v. North Sydney (Town) (1906), 37 S.C.R. 464, refd to. [para. 22].

Saunby v. Water Commissioners of London, [1906] A.C. 110 (P.C.), refd to. [para. 22].

Parkdale v. West (1887), 12 App. Cas. 602, refd to. [para. 22]

Young v. Cape Breton County (Munici­pality) (1987), 77 N.S.R.(2d) 389; 191 A.P.R. 389 (T.D.), refd to. [para. 24].

Kitchen v. Harbour Grace (Town Council) (1983), 43 Nfld. & P.E.I.R. 146; 127 A.P.R. 146 (Nfld. C.A.), refd to. [para. 24].

Jalbert v. R., [1937] S.C.R. 51; [1937] 2 D.L.R. 291, affd. [1938] 1 D.L.R. 721; [1938] 1 W.W.R. 835; 82 Sol. Jo. 252 (P.C.), refd to. [para. 24].

Inverness Railway and Coal Co. v. McIsaac (1905), 37 S.C.R. 134, refd to. [para. 24].

Welbridge Holdings Ltd. v. Greater Winnipeg (Municipality), [1971] S.C.R. 957; [1972] 3 W.W.R. 433, dist. [para. 31].

Dunlop v. Woollahra Municipal Council, [1981] 1 All E.R. 1202 (P.C.), dist. [para. 31].

Gladstone Petroleum Ltd. v. Husky Oil (Alberta) Ltd., [1982] 6 W.W.R. 577; 18 Sask.R. 273 (C.A.), dist. [para. 31].

Hoffmann-La Roche et al. v. Secretary of State for Trade and Industry, [1974] 2 All E.R. 1128 (H.L.), dist. [para. 31].

Harris v. Law Society of Alberta, [1936] 1 D.L.R. 401 (S.C.C.), dist. [para. 31].

Isitt v. Grand Trunk Pacific Railway Co., [1918] 3 W.W.R. 500 (B.C.C.A.), affd. (1919), 49 D.L.R. 687 (S.C.C.), dist. [para. 31].

Ruttan v. Dreifus (1906), 12 O.L.R. 187 (H.C.), dist. [para. 31].

Malone v. Canada (1977), 1 R.P.R. 322 (F.C.T.D.), dist. [para. 31].

Henderson et al. v Volk et al. (1982), 132 D.L.R.(3d) 690 (Ont. C.A.), dist. [para. 31].

Bell Canada v. Cope (Sarnia) Ltd. (1980), 11 C.C.L.T. 170 (Ont. H.C.), dist. [para. 31].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465; [1963] 2 All E.R. 575 (H.L.), refd to. [para. 36].

Marsan v. Grand Trunk Railway (1909), 2 W.L.R. 465, refd to. [para. 45].

Janiak v. Ippolito, [1985] 1 S.C.R. 146; 57 N.R. 241; 9 O.A.C. 1; 31 C.C.L.T. 113, refd to. [para 59].

Baud Corp., N.V. v. Brooks, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271; [1978] 6 W.W.R. 301; 89 D.L.R.(3d) 1, refd to. [para. 59].

Asamera Oil Corp. v. Sea Oil and General Corp. - see Baud Corp., N.V. v. Brooks.

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 59].

B.P.I. Resources Ltd. v. Merrill Lynch Canada Inc. and Anderson (1989), 95 A.R. 211; 43 B.L.R. 1 (C.A.), refd to. [para. 60].

Fraser v. Fraserville (City), [1917] A.C. 187 (P.C.), refd to. [para. 70].

Pointe Gourde Quarrying & Transport Co. v. Superintendent of Crown Lands, [1947] A.C. 565 (P.C.), refd to. [para. 70].

Arychuck et al. v. Calgary Power Ltd. (1978), 13 A.R. 365; 17 L.C.R. 200 (C.A.), refd to. [para. 70].

Bank of Nova Scotia v. Dunphy Leasing Enterprises Ltd., [1992] 1 W.W.R. 577; 120 A.R. 241; 8 W.A.C. 241; 83 Alta. L.R.(2d) 289 (C.A.), refd to. [para. 120].

Price v. Hanna (Town) (1986), 70 A.R. 297 (C.A.), refd to. [para. 121].

Mannix v. Alberta (1984), 56 A.R. 221; 35 Alta. L.R.(2d) 289 (C.A.), refd to. [para. 121].

Calgary Power Ltd. v. Grobe et al. (1963), 39 D.L.R.(2d) 309 (Alta. C.A.), refd to. [para. 121].

Calmont Leasing Ltd. et al. v. Kredl et al., [1993] 7 W.W.R. 428; 142 A.R. 81; 11 Alta. L.R.(3d) 232 (Q.B.), refd to. [para. 121].

Mueller (Karl) Construction Ltd. v. Northwest Territories (Commissioner), [1991] 1 W.W.R. 289; [1991] N.W.T.R. 1 (C.A.), refd to. [para. 121].

Board of Education (Roman Catholic) of Fort McMurray School District No. 32 v. Board of Education of Fort McMurray School District No. 2833 (1987), 49 Alta. L.R.(2d) 410; [1987] A.W.L.D. 293 (C.A.), refd to. [para. 121].

Roman Catholic Diocese of Calgary Association For Senior Citizens and Shamrock Taxi Ltd. v. Century Insurance Co. of Canada et al. (1984), 52 A.R. 295 (C.A.), refd to. [para. 121].

Wallersteiner v. Moir (No. 2), [1975] 1 All E.R. 849 (C.A.), refd to. [para. 121].

Guarantee Co. of North America v. Beasse et al. (1993), 139 A.R. 241 (Q.B.), refd to. [para. 124].

Acme (Village) v. Beirele, [1993] A.J. No. 178 (C.A.), refd to. [para. 124].

Humenuk v. Alberta (1986), 76 A.R. 161 (Q.B.), refd to. [para. 124].

Nissen v. Calgary (City) (1983), 51 A.R. 252; 28 L.C.R. 321; 29 Alta. L.R.(2d) 345 (C.A.), refd to. [para. 124].

Statutes Noticed:

City Transportation Act, R.S.A. 1970, c. 47, sect. 21 [para. 70].

Expropriation Act, R.S.A. 1980, c. E-16, sect. 15(1), sect. 24(3) [para. 124]; sect. 30(4) [para. 121]; sect. 31 [para. 67]; sect. 35, sect. 39 [para. 124]; sect. 45(c) [para. 70]; sect. 50(c)(ii) [para. 124]; sect. 66 [para. 121].

Expropriation Procedure Act, R.S.A. 1970, c. 130, generally [para. 3].

Judgment Interest Act, R.S.A. 1980, c. J-0.5, sect. 2(2)(b) [para. 121].

Judiciature Act, R.S.A. 1980, c. J-1, sect. 15, sect. 16, sect. 17 [para. 121].

Municipal Government Act, R.S.A. 1970, c. 246, generally [para. 4].

Municipal Government Act, R.S.A. 1980, c. M-26, generally [para. 4].

Authors and Works Noticed:

Challies, George S., The Law of Expro­priation (2nd Ed. 1963), p. 15 [para. 20].

Fridman, G.H.L., Q.C., The Law of Torts in Canada (1989), pp. 1 et seq. [para. 17]; 39 et seq. [paras. 54, 75, 78].

Fridman, G.H.L., Q.C., Trespass - General Principles, s. 2(c) [para. 34].

Fridman, G.H.L., Q.C., Trespass to Land, s. 1(a)(i) [para. 32]; 1(c) [para. 34].

Halsbury's Laws of England (4th Ed. 1985), vol. 12, para. 1129 [para. 49]; 1170 [paras. 51, 75]; 1193 [para. 56]; 1194 [paras. 56, 66, 80]; vol. 45, para. 1348 to 1408 [para. 15].

McGregor on Damages (15th Ed. 1988), paras. 299, 310, 907 [para. 66]; pp. 555 et seq. [para. 57]; 862 et seq. [para. 50].

Rainaldi, Linda A., Remedies in Tort (1987 Looseleaf), c. 23 [para. 16]; ss. 12 [para. 32]; 25 [paras. 32, 34]; 37 [para. 32]; 42 [paras. 78, 106, 120]; 43 [para. 75]; 45 [para. 106].

Todd, Eric E., The Law of Expropriation and Compensation in Canada (2nd Ed. 1992), p. 29 [paras. 24, 25, 53]; 474 [para. 121]; 501, 516, 517 [para. 124].

Waddams, The Law of Damages (2nd Ed. 1993 Looseleaf), paras. 1.1840, 1.1880, 1.1930, 1.1950, 1.1960 [para. 75]; 15.150 [paras. 66, 80]; 15.160, 15.590, 15.600, 15.620 [para. 66]; p. 1-86 [para. 52].

Counsel:

R.W. Thompson and K.D. Nixon, for the plaintiffs;

A.A. Abougoush, Q.C., J.H.J. Gescher and L.B. Stevens, for the defendant.

This action was heard before Rooke, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the fol­lowing judgment on January 6, 1995.