Monarch Land Ltd. v. Sanderson of Fish Creek (Calgary) Developments Ltd. et al., (2014) 590 A.R. 324 (QB)

• Judge: Kent, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 05, 2014
• Citations: (2014), 590 A.R. 324 (QB);2014 ABQB 394

Monarch Land v. Sanderson of Fish Creek (2014), 590 A.R. 324 (QB)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. JL.029

Monarch Land Limited (plaintiff) v. Sanderson of Fish Creek (Calgary) Developments Ltd., Canadian Imperial Bank of Commerce, Gunther's Masonry Construction Limited and Aviva Insurance Company of Canada (defendants)

(1201 12712)

In The Matter Of The Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended and The Judicature Act, R.S.A. 2000, c. J-2, as amended

And In The Matter Of a Plan of Compromise or Arrangement of Medican Holdings Ltd., Medican Developments Inc., R7 Investments Ltd., Medican Construction Ltd., Medican Concrete Inc., 1090772 Alberta Ltd., 1144233 Alberta Ltd., 1344241 Alberta Ltd., 9150-3755 Quebec Inc., Axxess (Grande Prairie) Developments Ltd., Canvas (Calgary) Developments Ltd., Elements (Grande Prairie) Developments Ltd., Homes by Kingsland Ltd., Lake Country (Sitara) Developments Ltd., Medican (Edmonton Terwillegar) Developments Ltd., Medican (Grande Prairie) Holdings Ltd., Medican (Kelowna Move) Developments Ltd., Medican (Lethbridge - Fairmont Park) Developments Ltd., Medican (Red Deer - Michener Hill) Developments Ltd., Medican (Sylvan Lake) Developments Ltd., Medican (Westbank) Development Ltd., Medican (Westbank) Land Ltd., Medican Concrete Forming Ltd., Medican Developments (Medicine Hat Southwest) Inc., Medican Enterprises Inc./Les Enterprises Medican Inc., Medican Equipment Ltd., Medican Framing Ltd., Medican General Contractors Ltd., Medican General Contractors 2010 Ltd., Riverstone (Medicine Hat) Developments Ltd., Sanderson of Fish Creek (Calgary) Developments Ltd., Sierras of Eaux Claires (Edmonton) Developments Ltd., Sonata Ridge (Kelowna) Developments Ltd., Sylvan Lake Marina Developments Ltd., The Estates of Valleydale Developments Ltd., The Legend (Winnipeg) Developments Ltd. and Watercrest (Sylvan Lake) Developments Ltd. (petitioners)

(1001 07852; 2014 ABQB 394)

Indexed As: Monarch Land Ltd. v. Sanderson of Fish Creek (Calgary) Developments Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Kent, J.

June 27, 2014.

Summary:

CIBC were lenders for a condominium project that became insolvent. In the context of Companies' Creditors Arrangement Act proceedings, an issue arose regarding parking stalls. Another issue arose regarding whether the CIBC construction loan had been paid out in early 2010. The determination of that issue affected what monies should have been paid out to Monarch Land Ltd., who was second in line to CIBC.

The Alberta Court of Queen's Bench, in a decision reported at [2014] A.R. Uned. 142, found that Monarch owned the parking stalls in issue. The court also found that the CIBC construction loan was paid out in January 2010 and that Monarch was not statute-barred from bringing a claim for an accounting. The court ordered that that accounting take place. Monarch sought judgment for monies that it said it was owed because of the failure of CIBC to advise Monarch in January 2010 that the construction loan was paid out.

The Alberta Court of Queen's Bench determined the issues with respect to the assessment of Monarch's damages.

Damages - Topic 703

Time for assessment - General principles - Breach of contract cases - CIBC were lenders for a condominium project that became insolvent - In Companies' Creditors Arrangement Act proceedings, an issue arose regarding whether the CIBC construction loan had been paid out in early 2010 - The determination of that issue affected what monies should have been paid out to Monarch Land Ltd., who was second in line to CIBC - The court found that the CIBC construction loan was paid out in January 2010 and that Monarch was not statute-barred from bringing a claim for an accounting - The court ordered that that accounting take place - Monarch sought judgment for monies that it said it was owed because of the failure of CIBC to advise Monarch in January 2010 that the construction loan was paid out - An Agreement of Purchase and Sale (PSA) documented the terms of a credit bid that Monarch had made for Phases 3 and 4b of the Project - Broadly speaking, the agreement contemplated the build out of Phases 3 and 4b by Monarch - Monarch acknowledged that the general principle in assessing damages for breach of contract was that damages were to be assessed as of the date of the breach - However, Monarch said that in this case the appropriate date was the closing date for the PSA - The Alberta Court of Queen's Bench stated that it was able to depart from the general rule if circumstances merited - The court concluded that "it is appropriate to use the effective date of the PSA rather than the date of the breach. Monarch took reasonable steps to mitigate its losses based on the knowledge that it had after the CCAA proceedings commenced. These steps may have a successful result. They may not since the steps Monarch has taken involve some risk. To choose the date of the breach ignores that risk. However, to award Monarch all of its claim immediately ignores the possibility of a windfall. ... Monarch's claim for the difference between the credit bid and the Sanderson loan, including interest is conditionally granted but not to be paid until the build out is completed or the land is otherwise dealt with. If that results in a payout of the Terwilligar and Sylvan Lake loans, then that amount will not be paid. If those loans are not paid out, Monarch will be paid".

Cases Noticed:

Kempling v. Hearthstone Manor Corp. (1996), 184 A.R. 321; 122 W.A.C. 321; 41 Alta. L.R.(3d) 169 (C.A.), refd to. [para. 8].

Noble v. Principal Consultants Ltd. (Bankrupt) (2000), 261 A.R. 82; 225 W.A.C. 82; 2000 ABCA 133, refd to. [para. 10].

Golden Strait Corp. v. Nippon Yusen Kubishka Kaisha, [2007] 2 A.C. 353; 368 N.R. 324 (H.L.), refd to. [para. 11].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Contract in Canada (6th Ed. 2011), pp. 712 [paras. 9, 11]; 713, 714 [para. 9].

Counsel:

Terry L. Czechowsky, for the plaintiff;

Carole Hunter, for the defendant, CIBC Mortgages Inc.;

Doug S. Nishimura, for the defendants except CIBC.

This matter was heard on June 5, 2014, before Kent, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on June 27, 2014.