MacDonald (Rural Municipality) v. Zettler et al., 2016 MBQB 150

• Judge: Suche, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: July 15, 2016
• Jurisdiction: Manitoba
• Citations: 2016 MBQB 150;(2016), 329 Man.R.(2d) 283 (QB)

MacDonald v. Zettler (2016), 329 Man.R.(2d) 283 (QB)

MLB headnote and full text

Temp. Cite: [2016] Man.R.(2d) TBEd. AU.008

The Rural Municipality of MacDonald (plaintiff) v. Vince James Zettler and Samborski Environmental Ltd., o/a Samborski Garden Supplies (defendants)

(CI 15-01-97107; 2016 MBQB 150)

Indexed As: MacDonald (Rural Municipality) v. Zettler et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Suche, J.

July 15, 2016.

Summary:

In 1990, the then owners of the land at issue received a conditional use approval permitting them to develop the land as a landscaping business, including the establishment of a composting facility. The approval was subject to conditions, including that it would "expire if not acted upon within 12 months of its making". The proposed developer (not the owners) and the rural municipality (RM) executed a development agreement and the RM registered a caveat against the land that gave notice to the public of the development agreement. The development never took place. In 2009, the RM discharged the caveat. Samborski Garden Supplies Ltd. (Samborski), which held an option to buy the land, sought to establish a composting facility on the land. Asserting that the RM acted in bad faith when it discharged the caveat, Samborski applied for a declaration that the conditional use order remained valid.

The Manitoba Court of Queen's Bench, in a decision reported at 304 Man.R.(2d) 209, dismissed the application. Samborski appealed.

The Manitoba Court of Appeal, in a decision reported at 315 Man.R.(2d) 291; 630 W.A.C. 291, dismissed the appeal. Samborski moved under rule 46.2 of the Court of Appeal Rules for a rehearing of the appeal.

The Manitoba Court of Appeal, in a decision reported at 319 Man.R.(2d) 138; 638 W.A.C. 138, denied the motion. The RM brought an action against Zettler (the current owner of the land) and Samborski (Zettler's tenant), seeking a permanent injunction preventing Samborski from carrying on a composting business on the land and requiring it to restore the property on the basis that the land was being used in violation of its zoning bylaw. The RM moved for an interlocutory injunction.

The Manitoba Court of Queen's Bench, in a decision not reported in this series of reports, granted an interlocutory injunction. Samborski learned that a licence pursuant to the Environment Act had been issued for the property in 1990. Samborski and Zettler moved to have the hearing of the RM's motion reopened and the injunction set aside.

The Manitoba Court of Queen's Bench dismissed the motion.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of process - Abuse of process by relitigation - A rural municipality (RM) brought an action against Zettler (a landowner) and Samborski (Zettler's tenant), seeking a permanent injunction preventing Samborski from carrying on a composting business on the land and requiring it to restore the property on the basis that the land was being used in violation of its zoning bylaw - The RM obtained an interlocutory injunction - Samborski discovered that a previous owner of the land (Campbell) had been granted a licence under the Environment Act 26 years earlier - Samborski had been dealing with the Environment Approvals Branch (EAB) for some time - Officials there had advised Samborski that it could not obtain a licence unless a conditional use order was obtained from the RM - Samborski had made four unsuccessful applications for a conditional use order - Samborski and Zettler moved to reopen the RM's motion and to set aside the injunction - They asserted that the licence was, or should be, still valid and supported their position that they were entitled to carry on a composting operation - The Director of the EAB filed an affidavit indicating that a licence was granted respecting a "development", essentially an activity, not respecting a location - The Director was of view that Samborski's business was different than Campbell's business; the licence had expired; and any request by Samborski to assume the licence would quite likely be treated in the same way as a new application - The Manitoba Court of Queen's Bench held that evidence regarding the existence of the licence would not have changed the outcome of the RM's motion - The argument that the RM's failure to disclose the licence amounted to the RM not having "clean hands" did not assist the defendants - Since this was a statutory injunction, the requirement of clean hands did not apply - Even if it did, the court was unable to conclude that the information was deliberately withheld or that the RM's officials were negligent - The defendants remained aggrieved that they were not permitted to raise the issue of the presence of the manure piles as evidence of ongoing non-conforming use - Whether that amounted to a non-conforming use or was permitted zoning was unclear, but it did not matter - The Court of Appeal determined that the conditional use order lapsed sometime in early 1990s due to inactivity - The manure piles were not placed there until 1994 or later - The Court of Appeal decision precluded litigation of the question of the validity of the conditional use order and meaning of a development agreement entered into by Campbell and the RM due to the doctrines of one or the other of res judicata or abuse of process - Neither the existence of the licence, nor the presence of the manure piles could have changed the outcome had that evidence been considered on its merits - See paragraphs 44 to 56.

Equity - Topic 1482

Equitable principles respecting relief - Clean hands doctrine - Application of - [See Courts - Topic 2015 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - [See Courts - Topic 2015 ].

Injunctions - Topic 1604.2

Interlocutory or interim injunctions - General principles - Clean hands doctrine - [See Courts - Topic 2015 ].

Injunctions - Topic 1607

Interlocutory or interim injunctions - General principles - Requirements of strong prima facie case or appearance of right - The Manitoba Court of Queen's Bench referred to the tripartite test for granting an interlocutory injunction - The court stated that "In the case of a public authority seeking compliance with a statutory or regulatory requirement, the test is modified. A public authority will not ordinarily have to show inadequacy of damages or irreparable harm. Particularly where the Legislature has expressly said injunctive relief is appropriate, the public interest in having the law obeyed will ordinarily outweigh any hardship or inconvenience by the other party. ...  At the same time, the initial burden on a public authority seeking an interlocutory injunction is much higher. More than the presence of a serious question to be tried is required. A very strong prima facie case - often expressed as a 'clear violation' of the statute or bylaw - must be established. ...  In the result, an interlocutory injunction will be granted to a public authority - particularly a municipality - in circumstances where a private party would not succeed. This includes situations where such an order will amount to a final determination of the action, ... or where there has been delay in seeking the injunction, or the municipality can be said not to have 'clean hands', which is an important consideration in deciding an equitable remedy. ...  If the public authority demonstrates a strong prima facie case, only a limited residual discretion remains to refuse an injunction, which is exercised only in exceptional circumstances. This includes such things as issues of discriminatory behaviour, bad faith or malice on the part of the public authority, or where the question is whether the law applies to a particular party. ...  in cases where a party claims an exemption from a law (distinct from a challenge to the validity of the law), the general public interest in the continued application of the law may not be as important a consideration, for the simple reason that the scope of interruption is narrow. ..." - See paragraphs 33 to 37.

Injunctions - Topic 1610

Interlocutory or interim injunctions - General principles - Circumstances when injunction will not be granted - [See Courts - Topic 2015 ].

Injunctions - Topic 1617.1

Interlocutory or interim injunctions - General principles - Preventing statute violation - [See Courts - Topic 2015 and Injunctions - Topic 1607 ].

Injunctions - Topic 1741

Interlocutory or interim injunctions - Sufficiency of damages in lieu of injunction - General - [See Injunctions - Topic 1607 ].

Injunctions - Topic 1800

Interlocutory or interim injunctions - Requirement of irreparable injury - General - [See Injunctions - Topic 1607 ].

Injunctions - Topic 7075

Particular matters - Violation of statute - General - [See Courts - Topic 2015 and Injunctions - Topic 1607 ].

Practice - Topic 5006

Conduct of trial - General principles - Reopening of trial to hear additional submissions or evidence - [See Courts - Topic 2015 ].

Counsel:

Mark T. O'Neill, for the plaintiff;

Gene Zazelenchuk, for the defendants.

This motion was heard by Suche, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on July 15, 2016.