Frisgo Development Inc. v. Brower et al., 2009 ABQB 747

• Judge: Bensler, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: August 13, 2009
• Citations: 2009 ABQB 747;(2009), 480 A.R. 103 (QB);2009 ABQB 463

Frisgo Dev. Inc. v. Brower (2009), 480 A.R. 103 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. AU.093

Frisgo Development Inc. (plaintiff) v. Jo-Ann Brower and Glenn Brower (defendants) and Jo-Ann Brower and Glenn Brower (plaintiffs by counterclaim) and Frisgo Development Inc., Rivnell Projects Inc., Art Fennell, and ABC Corporations (the name or names of which are currently unknown to the plaintiffs by counterclaim)

(defendants by counterclaim)

(0101 16837; 2009 ABQB 463; 2009 ABQB 747)

Indexed As: Frisgo Development Inc. v. Brower et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Bensler, J.

August 13, 2009 and December 21, 2009.

Summary:

Glenn Brower registered a caveat against lands the plaintiff (Frisgo) was developing. The caveat was discharged after Frisgo posted $400,000 as security. Frisco sued Brower for damages for the cost of posting the security and damages for costs and/or losses associated with developing the land. Brower counterclaimed alleging that the defendants by counterclaim, including Frisgo, breached a trust agreement by converting his initial one-third interest in the land to 8% of shareholdings in Frisgo.

The Alberta Court of Queen's Bench, in paragraphs 1 to 159 below, allowed the action in part. The court held that Frisgo was entitled to the cost of borrowing $400,000 security to discharge the caveat. The claim for costs and/or losses associated with developing the land was rejected. Brower's counterclaim was dismissed. The parties were unable to settle costs. The parties also requested that the court make a provisional assessment of damages in the event the decision was overturned on appeal. Further, Brower ("Brower") requested a stay of execution pending appeal so that the $400,000 security remained in court.

The Alberta Court of Queen's Bench, in paragraphs 160 to 209 below, provisionally assessed Brower's damages respecting the counterclaim as one-third the value of the lands, which the court found was $2.42M. The court awarded Frisgo costs based on Column 4. The court granted a stay of execution respecting the $400,000 security.

Choses in Action - Topic 273

What may be assigned - Benefits or rights assignable - Claim or cause of action - General - Brower alleged in a counterclaim that Frisgo and others (the defendants by counterclaim) breached a trust agreement by converting his initial 1/3 interest in certain lands to shareholdings in Frisgo - Brower initially had Stanley sign for the 1/3 interest and he lent her the money for her share - Brower was the de facto co-owner - She later transferred her interest back to Brower as the payment for the debt she owed - Brower then entered into an arrangement with his former wife whereby he transferred and assigned to her the interest which had been transferred and assigned to him by Stanley - The consideration for this assignment was said to be the former wife's acceptance of the assignment as an offset for lump sum child support - The wife later assigned the 1/3 interest back to Brower - The defendants by counterclaim argued that Stanley and the former wife were the only ones entitled to make the claim asserted by Brower as he had no interest in the trust agreement at the relevant time - The claim was founded in equity and the general rule was that such causes of action were not or should not be assignable - Brower had no pre-existing property interest in the enforcement of the claim or a legitimate commercial interest in its enforcement - Absent such an exception, the principles underlying champerty and maintenance applied - The Alberta Court of Queen's Bench held that the assignments were valid and Brower had a legitimate and genuine issue in the right of action - A financial interest in the action by the assignee was sufficient for an agreement to negate a claim of champerty or maintenance - Brower had a legitimate and genuine interest in the cause of action - See paragraphs 53 to 61.

Choses in Action - Topic 363

Equitable assignments - What constitutes an equitable assignment - [See Choses in Action - Topic 273 ].

Contracts - Topic 6763

Illegal contracts - Agreements contrary to public policy - Champerty and maintenance - What constitutes champerty - [See Choses in Action - Topic 273 ].

Contracts - Topic 6764

Illegal contracts - Agreements contrary to public policy - Champerty and maintenance - What constitutes maintenance - [See Choses in Action - Topic 273 ].

Contracts - Topic 8008

Statute of Frauds - Part performance - When available - [See Trusts - Topic 6141 ].

Practice - Topic 5948

Judgments and orders - Enforcement of orders - Stay of - [See Practice - Topic 8952 ].

Practice - Topic 7037

Costs - Party and party costs - Entitlement to - Factors or circumstances reducing entitlement - Glenn Brower registered a caveat against lands the plaintiff (Frisgo) was developing - He alleged in a counterclaim that Frisgo, Rivnell and Fennell, breached a trust agreement by converting his initial 1/3 interest in the land to 8% of shareholdings in Frisgo - The caveat was discharged after Frisgo posted $400,000 as security - Frisco successfully sued Brower for damages for the cost of posting the security - The counterclaim was dismissed - Frisgo argued that it was entitled to double costs because it had made a formal offer to settle the counterclaim that was rejected - However, Brower argued that Frisgo should be denied costs or double costs because Frisgo had made unsubstantiated allegations of fraud against Brower in its action - Frisgo countered that Brower had made serious allegations against Fennell and Rivnell, including breach of trust, breach of fiduciary duty and deception - The Alberta Court of Queen's Bench denied Frisgo double costs and awarded it costs based on Column 4 - See paragraphs 201 to 209.

Practice - Topic 7111.2

Costs - Party and party costs - Special orders - Increase in scale of costs - Effect of settlement offers - [See Practice - Topic 7037 ].

Practice - Topic 7113

Costs - Party and party costs - Special orders - Increase in scale of costs - For unproved allegations of fraud - [See Practice - Topic 7037 ].

Practice - Topic 7767.1

Costs - Special orders - Unproved allegation of fraud - [See Practice - Topic 7037 ].

Practice - Topic 8952

Appeals - Stay of proceedings pending appeal - When appellant entitled to stay - Glenn Brower registered a caveat against lands the plaintiff (Frisgo) was developing - He alleged in a counterclaim that Frisgo, Rivnell and Fennell, breached a trust agreement by converting his initial 1/3 interest in the land to 8% of shareholdings in Frisgo - The caveat was discharged after Frisgo posted $400,000 as security - Frisco successfully sued Brower for damages for the cost of posting the security - The counterclaim was dismissed - Brower sought a stay of execution pending appeal in order to keep the $400,000 in court - He argued that the release of the funds would cause him irreparable harm - Title to the lands in dispute were now subdivided and transferred to third parties - He alleged that there was serious risk that Fennell and his companies, Frisgo, Rivnell, would dissipate the funds, rendering the right to appeal nugatory - The Alberta Court of Queen's Bench granted a stay of execution - There was a real risk of harm to Brower if the money was paid out of court - There was evidence that Fennell might not be in a sound position financially - See paragraphs 191 to 200.

Practice - Topic 8954

Appeals - Stay of proceedings pending appeal - What constitutes "irreparable harm" - [See Practice - Topic 8952 ].

Real Property - Topic 7937

Title - Registration of instruments, etc. - Caveats, cautions or miscellaneous interests - Filing without reasonable cause - Glenn Brower registered a caveat against lands the plaintiff (Frisgo) was developing - He alleged that Frisgo and others, breached a trust agreement by converting his initial 1/3 interest in the land to 8% of shareholdings in Frisgo - The caveat was discharged after Frisgo posted $400,000 as security - Frisco sued Brower for damages for the cost of posting the security and damages for costs and/or losses associated with developing the land - The Alberta Court of Queen's Bench held that there was no breach of the trust agreement - Frisgo was entitled to damages by reason of the registration and continuation of the Brower caveat - The court awarded Frisgo the cost of borrowing $400,000 security to discharge the caveat (i.e., interest on the costs of borrowing $400,000 calculated in accordance with the Judgment Interest Act) - The claim for costs and/or losses associated with developing the land was rejected due to a lack of evidence - See paragraphs 155 to 157.

Real Property - Topic 7946

Title - Registration of instruments, etc. - Caveats, cautions or miscellaneous interests - Damages for wrongful filing - [See Real Property - Topic 7937 ].

Trusts - Topic 6141

The trustee - Breach of trust - General - Glenn Brower registered a caveat against lands the plaintiff (Frisgo) was developing - He alleged in a counterclaim that Frisgo, Rivnell and Fennell breached a trust agreement by, inter alia, converting his initial 1/3 interest in the land to 8% of shareholdings in Frisgo - He also alleged that any alteration, amendment or disposition of the trust agreement was not made in writing as required by s. 4 of the Statute of Frauds - The Alberta Court of Queen's Bench held that there was no breach of the trust agreement - The original agreement was revised altering Brower's original position from a 1/3 owner to owning shares in Frisgo with Brower's express agreement - There were at least three positive acts by Brower that indicated his consent to and approved of what was going on - Brower was aware of the steps taken by Rivnell, Frisgo or Fennell and took no issue with the revision of the original agreement until it was too late - There were sufficient acts of part performance by Brower which circumvented the writing requirement of the Statute of Frauds - Alternatively, if there was a breach of a contractual express trust, Brower was entitled to 1/3 of the value of property at the time of the breach of trust - The court found that the value of the land was $2.42M - See paragraphs 136 to 154 and 170 to 180.

Trusts - Topic 6155

The trustee - Breach of trust - Remedies - Damages - [See Real Property - Topic 7937 ].

Cases Noticed:

Fredrickson v. Insurance Corp. of British Columbia (1986), 3 B.C.L.R.(2d) 145 (C.A.), affd. [1988] 1 S.C.R. 1089; 86 N.R. 48, refd to. [para. 57].

Trendtex Trading Corp. v. Crédit Suisse, [1981] 3 All E.R. 520; [1982] A.C. 679 (H.L.), refd to. [para. 59].

Down (Bankrupt) et al., Re (1999), 16 B.C.T.C. 354; 178 D.L.R.(4th) 294 (S.C. Bktcy.), refd to. [para. 61].

Jedfro Investments (U.S.A.) Ltd. et al. v. Jacyk Estate et al., [2007] 3 S.C.R. 679; 369 N.R. 329; 232 O.A.C. 385; 2007 SCC 55, refd to. [para. 107].

Bergman v. Bergman (2002), 318 A.R. 5; 2002 ABQB 493, varied (2004), 354 A.R. 31; 329 W.A.C. 31; 2004 ABCA 194, refd to. [para. 148].

Austie v. Aksnowicz (1999), 232 A.R. 118; 195 W.A.C. 118; 1999 ABCA 56, refd to. [para. 150].

Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81, refd to. [para. 151].

3464920 Canada Inc. v. Strother et al., [2007] 2 S.C.R. 177; 363 N.R. 123; 241 B.C.A.C. 108; 399 W.A.C. 108; 2007 SCC 24, refd to. [para. 173].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 173].

Aboriginal Federated Alliance Inc. v. Canada Customs and Revenue Agency et al. (2000), 276 A.R. 295; 2000 ABQB 852, refd to. [para. 196].

Evans (Bankrupt), Re (1992), 135 A.R. 46; 33 W.A.C. 46 (C.A.), refd to. [para. 197].

Director of Employment Standards (Alta.) v. Sanche - see Evans (Bankrupt), Re.

Mitran v. Guarantee RV Centre Inc. et al. (1999), 251 A.R. 77 (Q.B.), refd to. [para. 204].

Authors and Works Noticed:

Waters, Donovan W.M., The Law of Trusts in Canada (3rd Ed. 2005), pp. 932, 933 [para. 139]; 1215 [para. 174]; 1230, 1231 [para. 175]; 1238 [para. 143].

Counsel:

Lenard M. Sali, Q.C. (Bennett Jones LLP), for the plaintiff and defendants by counterclaim;

Robert J. Hall, Q.C., and Nicholas A. Peters (Scott Hall LLP), for the defendants and plaintiffs by counterclaim.

This matter was heard on October 14 to 23, 2008, by Bensler, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons on August 13, 2009, followed by supplementary reasons on December 21, 2009.