Lake Manitoba Estates Ltd. v. Communities Economic Development Fund, (1989) 61 Man.R.(2d) 173 (QB)

• Judge: Smith, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: September 01, 1989
• Jurisdiction: Manitoba
• Citations: (1989), 61 Man.R.(2d) 173 (QB)

Lake Man. Estates v. Com. Economic Dev. (1989), 61 Man.R.(2d) 173 (QB)

MLB headnote and full text

Lake Manitoba Estates Ltd. v. Communities Economic Development Fund

(Suit No. 2678/83)

Indexed As: Lake Manitoba Estates Ltd. v. Communities Economic Development Fund

Manitoba Court of Queen's Bench

Winnipeg Centre

Smith, J.

September 1, 1989.

Summary:

Dumont had a right of first refusal on a lot of land suitable for resort development. He was involved in a community resort development project and was willing to commit the land to the project, if he acquired it. When he had to exercise his right of first refusal, the plaintiff went to the Communities Economic Development Fund for the funds. To prevent the land from falling into foreign hands the Fund provided the funds for its purchase, but took the property in its own name with the intention of later conveying it to the community project, if it went ahead. Dumont understood that, if the project did not go ahead, he would be able to obtain a deed to the land. The community project did not proceed but the Fund refused to convey the property to Dumont. He and his assignee, Lake Manitoba Estates, brought an action against the Fund for a transfer of the land. The Manitoba Court of Queen's Bench in a judgment unreported in this series of reports dismissed the plaintiffs' action. The plaintiffs appealed. The Manitoba Court of Appeal in a judgment reported 2 Man.R.(2d) 295 allowed the appeal and the plaintiffs' action. The Court of Appeal held that the Fund held the land under a constructive trust for Dumont, where the Fund was unjustly enriched at the expense of Dumont.

Subsequently, Lake Manitoba Estates brought another action against the Fund for damages resulting from the refusal to convey. The Fund applied to have the statement of claim struck out on the ground of res judicata. A referee refused the application. The Fund appealed. The Manitoba Court of Queen's Bench in a judgment reported 27 Man.R.(2d) 118 dismissed the appeal and ordered that the action proceed to trial. The Fund appealed.

The Manitoba Court of Appeal in a judgment reported 28 Man.R.(2d) 219 dismissed the appeal and affirmed that the matter should proceed to trial.

The Manitoba Court of Queen's Bench allowed the action for damages, but refused to include exemplary damages. The court held that the action for damages was not barred on the ground of res judicata, because there was no basis for a claim for damages earlier.

Damages - Topic 1309

Exemplary or punitive damages - Breach of trust - A government agency was found to have held land upon a constructive trust for a specific public purpose and to have wrongfully refused to convey the land to the cestui que trust when the purpose fell through - The agency refused to convey on the ground that the land was still to be used for public purposes - The Manitoba Court of Queen's Bench refused to award exemplary or punitive damages against the agency - See paragraphs 55 to 58.

Damages - Topic 4008

Interference with economic relations - Breach of fiduciary relationship - Breach of trust - General - The defendant wrongfully refused to convey land to the plaintiff - The land was planned for development for recreational lots and the development was delayed by the defendant's refusal for several years - The Manitoba Court of Queen's Bench allowed the plaintiff's action for damages caused by the delay in the amount of $75,000, an amount determined by consideration of the value of the land during the time it was wrongfully withheld and made up mostly of increased costs of development at the later date - See paragraphs 41 to 63.

Damages - Topic 4388

Torts affecting land and buildings - Occupation and use - Dispossession - [See Damages - Topic 4008 above].

Estoppel - Topic 387

Estoppel by record - Res judicata - As bar to subsequent proceedings - Matters or claims available in prior proceedings - The plaintiff brought an action for the conveyance of land - The Manitoba Court of Appeal ruled in 1980 that the defendant was in breach of trust and was liable to convey the land to the plaintiff - In 1983 the plaintiff brought an action for damages resulting from the failure to convey the land - The defendant pleaded res judicata - The Manitoba Court of Queen's Bench held that the claim for damages was not barred, because the omission to claim damages in the first action was justified because there was then no basis for a claim for damages - See paragraphs 23 to 27.

Trusts - Topic 6148

The trustee - Breach of trust - Statu tory immunity - Reasonable and honest acts - A government agency was found to have held land upon a constructive trust for a specific public purpose and to have wrongfully refused to convey the land to the cestui que trust, when the purpose fell through - The agency refused to convey on the ground that the land was still to be used for public purposes - The Manitoba Court of Queen's Bench held that the agency was not entitled to relief from liability under s. 81 of the Trustee Act, because although it acted honestly, it did not act reasonably - See paragraphs 28 to 39.

Cases Noticed:

Doering v. Town of Grandview, [1976] 1 W.W.R. 388; 7 N.R. 299, appld. [para. 23].

Fidelitas Shipping Co. Ltd. v. V/O Exportchleb, [1966] 1 Q.B. 630, refd to. [para. 23].

Guerin v. Canada, [1984] 2 S.C.R. 335; [1984] 6 W.W.R. 481; 55 N.R. 161, consd. [para. 41].

Statutes Noticed:

Queen's Bench Act, R.S.M. 1970, c. C-280; C.C.S.M., c. C-280, sect. 80, sect. 81(1) [para. 64]; sect. 97 [para. 40].

Trustee Act, R.S.M. 1987, c. T-160; C.C.S.M., c. T-160, sect. 81 [para. 28].

Authors and Works Noticed:

Waters, The Law of Trusts in Canada (1974), pp. 843 [para. 43]; 844 [para. 55].

Counsel:

John S. Lamont, Q.C., and Catherine E. Carlson, for the plaintiff;

Donald G. Murray and Bill Emslie, for the defendant.

This case was heard at Winnipeg, Manitoba, before Smith, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on September 1, 1989: