Fleck v. Stewart, (1991) 118 A.R. 345 (QB)

• Judge: McBain, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 15, 1991
• Citations: (1991), 118 A.R. 345 (QB)

Fleck v. Stewart (1991), 118 A.R. 345 (QB)

MLB headnote and full text

In The Matter Of the Landlord and Tenant Act, R.S.A. 1980, c. L-6, and amendments thereto.

R. Fred Fleck (plaintiff) and Canadian Imperial Bank of Commerce (defendant by counterclaim) v. Gary Delbert Stewart and Aryiroula Stewart (defendants/plaintiffs by counterclaim)

(Action No. 8901-07688)

Indexed As: Fleck v. Stewart

Alberta Court of Queen's Bench

Judicial District of Calgary

McBain, J.

May 15, 1991.

Summary:

The defendants transferred their home to the plaintiff without cash consideration. The plaintiff was to obtain additional mortgage financing to pay off a note by the defendants (co-signed by the plaintiff) and monies advanced to the defendants by the plaintiff to pay mortgage arrears. The defendants were to remain in the home and pay "rent" equal to the mortgage payment. The plaintiff was unable to obtain the financing. The defendants were in arrears of "rent". The plaintiff sought a declaration that the de­fendants' tenancy was terminated, an order that they vacate, judgment for rent arrears, compensation for use and occupation of the house and solicitor-client costs. The defend­ants counter-claimed for a declaration that they were the beneficial owners of the house, punitive damages and solicitor-client costs.

The Alberta Court of Queen's Bench dis­missed the plaintiff's action and allowed the defendants' counterclaim in part. The plain­tiff held the property in trust, the object of the trust failed and the property had to be transferred back to the defendants. The court found the plaintiff's conduct deserving of an award of punitive damages ($7,000), but declined to award solicitor-client costs.

Contracts - Topic 5311

Impossibility or frustration of performance - Frustration - Statutory relief - The defendants transferred their home to the plaintiff without cash consideration - The plaintiff was to use his creditworthiness to obtain mortgage financing to pay off a promissory note (co-signed by the plain­tiff) and monies advanced to the defend­ants by the plaintiff to cover mortgage arrears - The object was to use the plain­tiff's creditworthiness and the anticipated upturn in the real estate market to resolve the defendants' financial problems - The plaintiff was unable to obtain financing - The defendants, claiming to be the benefi­cial owners of the property, pleaded s. 5(1) of the Frustrated Contracts Act - The Alberta Court of Queen's Bench held that s. 5(1) was not broad enough to allow the court to order property reconveyed - Sec­tion 5(1) was restricted to the recovery of "the whole or part of the value of the benefit" - See paragraphs 53 to 56.

Damages - Topic 1309

Exemplary or punitive damages - Breach of trust - The defendants transferred their property to the plaintiff in trust to resolve their financial problems by the plaintiff raising financing - The object of the trust failed, but the plaintiff did not return the property - The plaintiff began a campaign of harassment based on his "ownership" of the property - The plaintiff wrongfully caveated the land, threatened to sell the property or give it to the bank, gave a mortgage on the property to his own com­pany, commenced litigation, etc. - The Alberta Court of Queen's Bench stated that the plaintiff's actions were high-handed, aggressive, intimidating and worthy of condemnation - The court awarded the defendants $7,000 punitive damages - See paragraphs 62 to 71.

Practice - Topic 7451

Costs - Solicitor and client costs - Enti­tlement to - General - The Alberta Court of Queen's Bench stated that "an award of solicitor-client costs is to be made to express a court's disapproval of the con­duct of the litigation by a party to it. The general rule is party-party costs and de­parture from that general rule requires cogent justification." - See paragraph 73.

Trusts - Topic 329

Creation of trust - Methods of creation - By implication - The defendants trans­ferred their home to the plaintiff without cash consideration - The plaintiff was to use his creditworthiness to obtain mortgage financing to pay off a promissory note (co-signed by the plaintiff) and monies advanced to the defendants by the plaintiff to cover mortgage arrears - The object was to use the plaintiff's creditworthiness and the anticipated upturn in the real estate market to resolve the defendants' financial problems - The plaintiff was unable to obtain financing - The Alberta Court of Queen's Bench held that it was implied that the plaintiff held the property in trust - When the plaintiff was unable to obtain financing, the object of the trust failed and the property had to be transferred back to the defendants - See paragraphs 53 to 61.

Trusts - Topic 8484

Termination of trusts - Failure of purpose - What constitutes - [See Trusts - Topic 329 ].

Cases Noticed:

McCarthy v. Board of Trustees of Calgary Roman Catholic Separate School District No. 1 (No. 1), [1980] 5 W.W.R. 524; 30 A.R. 208, refd to. [para. 73].

Mobil Oil Canada Ltd. v. Canadian Superior Oil Ltd., [1980] 1 W.W.R. 453; 21 A.R. 111, refd to. [para. 74].

Sturrock et al. v. Ancona Petroleums Ltd. et al. (1990), 111 A.R. 86; 75 Alta. L.R.(2d) 216 (Q.B.), refd to. [para. 75].

Olson v. New Home Certification Program of Alberta (1986), 69 A.R. 356; 44 Alta. L.R.(2d) 207 (Q.B.), refd to. [para. 76].

Smyth, Re (1966), 8 C.B.R.(N.S.) 202 (Ont. S.C.), refd to. [para. 89].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1985, c. B-3, sect. 178(1)(g) [para. 87].

Frustrated Contracts Act, R.S.A. 1980, c. F-20, sect. 5(1) [para. 55].

Authors and Works Noticed:

Maddaugh and McCamus, The Law of Restitution, pp. 78, 79 [para. 57].

Waters, The Law of Trusts in Canada, pp. 299, 300 [para. 59].

Counsel:

R. Fred Fleck, on his own behalf;

S. Allan Low, for the defendants.

This case was heard before McBain, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the fol­lowing judgment on May 15, 1991.