RVB Managements Ltd. et al. v. Rocky Mountain House (Town), 2014 ABQB 51

• Judge: Browne, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 28, 2011
• Citations: 2014 ABQB 51;(2014), 582 A.R. 1 (QB)

RVB Mgmt. Ltd. v. Rocky Mountain House (2014), 582 A.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. FE.028

RVB Managements Ltd. and Lavoy Property Developments Ltd. (plaintiffs) v. The Town of Rocky Mountain House (defendant)

(9803 05368; 2014 ABQB 51)

Indexed As: RVB Managements Ltd. et al. v. Rocky Mountain House (Town)

Alberta Court of Queen's Bench

Judicial District of Edmonton

Browne, J.

January 24, 2014.

Summary:

In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town. RVB intended to develop the land. In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage. RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues. RVB claimed lost opportunity damages of $15,622,816 related to the delays and $1,038,000 in increased construction costs due to wet soil.

The Alberta Court of Queen's Bench dismissed the action.

Damage Awards - Topic 543

Torts - Injury to land and buildings - Interference with flow of natural watercourse - [See Municipal Law - Topic 2062 ].

Limitation of Actions - Topic 17

General principles - Continuing acts and continuing losses - [See Limitation of Actions - Topic 3162 ].

Limitation of Actions - Topic 3141

Actions in tort - Tortious acts of a continuing nature - General - [See Limitation of Actions - Topic 3162 ].

Limitation of Actions - Topic 3162

Actions in tort - Trespass or injury to property - When time begins to run - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - The Alberta Court of Queen's Bench dismissed the action - The evidence at trial showed that RVB knew that town water flowed onto the land even before it was purchased - The claim, on its face, dealt with damage to land - The appropriate limitation period for the claims related to damage from water channeling and crossing RVB's land was the two year period under s. 51(f) of the Limitation of Actions Act - RVB knew of those claims long before March 1996 - The only claims that survived related to actions involving water channeling and obstruction of waterways after March 1996 - The court rejected RVB's assertion that a new cause of action arose with each day of flooding - See paragraphs 64 to 72.

Limitation of Actions - Topic 8024

Actions against municipalities - Applicability of limitation period - Cases not otherwise provided for - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - In its amended statement of claim filed in July 2000, RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues - The Alberta Court of Queen's Bench dismissed the action - The six year limitation period in s. 4(1)(g) of the Limitation of Actions Act applied to the claims relating to delay in the amended statement of claim - The only issues that had been raised in time were that, in 1998, the town had failed to deal with a development agreement and RVB's plan for local improvements in a timely fashion and that the town had attempted to impose unauthorized terms in the development agreement - See paragraphs 73 to 77.

Limitation of Actions - Topic 8041

Actions against municipalities - When limitation period commences - General - [See Limitation of Actions - Topic 3162 and Limitation of Actions - Topic 8024 ].

Limitation of Actions - Topic 9324

Postponement or suspension of statute - Fraud - Fraudulent or wilful concealment - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - In its written submissions for trial, RVB raised allegations of bad faith and misfeasance in public office, relying on s. 57 of the Limitation of Actions Act, under which a cause of action that had been concealed by fraud was deemed to have arisen when the fraud was first known - RVB alleged that, in 1991, the town had concealed critical information, failed to disclose documents and improperly redacted a crucial document - The Alberta Court of Queen's Bench found that there was no concealment of documents and no basis on which to invoke s. 57 - See paragraphs 78 to 85.

Municipal Law - Topic 1704

Liability of municipality - General and definitions - Bad faith - [See first Municipal Law - Topic 6226 and second Practice - Topic 1462 ].

Municipal Law - Topic 1704

Liability of municipality - General and definitions - Bad faith - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues - The Alberta Court of Queen's Bench, having dismissed the action on the basis that no cause of action existed in negligence for the town's delay or in relation to the claim regarding water flow, agreed with the town that RVB had also failed to make a case in bad faith - There was no evidence of bad intention - Nor was there evidence that the town's actions were "markedly inconsistent with the relevant legislative context" - In fact, the court found many examples of the town's acting in good faith - See paragraphs 200 to 204.

Municipal Law - Topic 1801

Liability of municipalities - Negligence - What constitutes negligence - [See first Municipal Law - Topic 1813.3 and first Municipal Law - Topic 6226 ].

Municipal Law - Topic 1813.3

Liability of municipalities - Negligence - Re watercourse - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - The Alberta Court of Queen's Bench dismissed the action - The only claims that survived the two year limitation period related to actions involving water channeling and obstruction of waterways after March 1996 - The damage that RVB alleged was that the land was supersaturated and that this led to delays in development - However, it had provided no evidence as to the land's status either at the time of purchase or in 1996 for the purposes of the limitation period - The purpose of damages in tort was to restore the plaintiff to the position it would have been in, but for the wrong - The injury could not be proven if the condition that pre-dated the injury was not proven - The only evidence before the court on this question was the opinion of the town's expert that the land was now drier than it had been in the past - While RVB had proven that there was increased water flow and rate and occasional flooding when the drainage system was overrun by heavy storms, it had not proven its claim that the land had been damaged - See paragraphs 111 to 168.

Municipal Law - Topic 1813.3

Liability of municipalities - Negligence - Re watercourse - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - The Alberta Court of Queen's Bench, having found that RVB had not proven the only claims that survived the two year limitation period (those related to actions involving water channeling and obstruction of waterways after March 1996), also held that the town could have relied on the defence that it had a public easement to channel storm water onto RVB's land under s. 65(1)(c) of the Land Titles Act - The court rejected RVB's assertion that only roads could be the subject of an easement - The court inferred from the long history of the drainage system that there was an intention to dedicate the land to public use for the channeling of storm water and that the public knew and accepted this use of the land - See paragraphs 169 to 175.

Municipal Law - Topic 1818.1

Liability of municipalities - Negligence - Defences - Policy decisions - [See both Municipal Law - Topic 6226 ].

Municipal Law - Topic 2062

Liability of municipalities - Practice - Measure of damages - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues - RVB claimed lost opportunity damages of $15,622,816 related to the delays and $1,038,000 in increased construction costs due to wet soil - The Alberta Court of Queen's Bench, having dismissed the action, stated, "The multi million dollar damage claim submitted by RVB is highly inflated and unrealistic having regard to the evidence presented. The hypotheticals relied on by RVB do not accurately reflect the reality of any cost of lost opportunity. If I had found liability, I would not have awarded the large damage award sought. It would have been significantly reduced because of these factors." - See paragraphs 214 to 219.

Municipal Law - Topic 6226

Actions against municipality - Capacity to be sued - Policy decisions - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues - The Alberta Court of Queen's Bench dismissed the action - The decisions (or lack of decisions) related to cost sharing, entering into development agreements, approvals, local improvements and decisions to arbitrate all involved a balancing of economic, social and political concerns - These were all policy decisions - See paragraph 185 - The statutory defences (relied on by the town) in ss. 529 and 621 of the Municipal Government Act codified the common law principle that government bodies, such as municipalities, were protected from liability for discretionary decisions made in good faith - Bad faith was not actionable as a stand alone cause of action - Therefore, if the alleged wrongs did not give rise to a cause of action for a non-public entity on a reasonableness standard, it did not matter if there was bad faith - There was no cause of action - RVB had not established that any delay by the town was actionable in negligence - See paragraphs 194 to 199.

Municipal Law - Topic 6226

Actions against municipality - Capacity to be sued - Policy decisions - In the context of an action against a municipality, the Alberta Court of Queen's Bench discussed the liability of public decision-makers in negligence, including the immunity for policy decisions and the remedy for breach of statutory duty - The court concluded, "Discretionary powers exercised by a public authority often involve balancing public and private interests. These discretionary powers regulate the broad public interest. A public authority's concern is generally a public one when it is using its legislative and quasi-judicial authority. The duty of care is owed to the public as a whole and encompasses policy considerations that may conflict with an individual's interests. As a result, a public authority has broad discretion and is not liable for the exercise of its discretionary powers while performing a regulatory function unless the public authority acts irrationally or in bad faith" - See paragraphs 180 to 193.

Municipal Law - Topic 6441

Actions against municipality - Limitation periods - General - [See Limitation of Actions - Topic 3162 and Limitation of Actions - Topic 8024 ].

Practice - Topic 1335

Pleadings - The issues - Issues to be raised must be pleaded - [See Practice - Topic 1458 and both Practice - Topic 1462 ].

Practice - Topic 1458

Pleadings - Statement of claim - General - Necessity of claiming damages or relief - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - In its written submissions for trial, RVB asserted a claim for a permanent injunction regarding water flowing from the town over RVB's land - The Alberta Court of Queen's Bench dismissed the action - A permanent injunction could not be considered as a remedy because there was no adequate notice to the town that RVB was seeking such a remedy - Under rule 13.6(2)(c), the pleadings had to set out the remedy claimed - None of the statements of claim in this action sought a permanent injunction - Further, the evidence showed that RVB had delayed in seeking an injunction as it had known from the date of purchase that the town had channelled water across its land - See paragraphs 86 to 94.

Practice - Topic 1462

Pleadings - Statement of claim - General - Requirement of stating basis for claim - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - In its written submissions for trial, RVB raised allegations of misfeasance in public office - The Alberta Court of Queen's Bench dismissed the action - The allegation of misfeasance in public office was statute-barred unless it could be held that the pleadings sufficiently set out the claim - Issues not raised in the pleadings could not be raised at trial - There were five basic elements of a claim regarding misfeasance in public office - The pleadings did not set out these parameters - In particular, there was no allegation of unlawful behaviour by a public officer acting with malice, the intention to do harm or the knowledge that his or her action would cause harm - There was no notice in the pleadings to suggest that the town would have to defend itself regarding intent to do harm or intent related to delay - RVB's request to amend its pleadings was denied as well out of time - See paragraphs 95 to 102.

Practice - Topic 1462

Pleadings - Statement of claim - General - Requirement of stating basis for claim - In 1991, the plaintiff RVB purchased 21.7 hectares of vacant land in the central downtown area of the defendant town - RVB intended to develop the land - In March 1998, RVB sued the town, alleging, essentially, that the town was responsible for increased water flow to the land and the resulting damage - RVB also alleged that the town had caused further damage in lost opportunity costs by delaying and refusing to approve the development of the land unless RVB rectified the water drainage issues - In its written submissions for trial, RVB raised allegations of bad faith in public office - The Alberta Court of Queen's Bench dismissed the action - The allegation of bad faith in public office was statute-barred unless it could be held that the pleadings sufficiently set out the claim - Issues not raised in the pleadings could not be raised at trial - While there was no independent cause of action in bad faith, a public authority could be liable in negligence for a decision made in bad faith - Bad faith might also be inferred from negligent or careless behaviour - Here, the question of bad faith was not adequately pled nor could it be inferred - See paragraphs 103 to 110.

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - [See first Practice - Topic 1462 ].

Real Property - Topic 7003

Easements, licenses and prescriptive rights - General principles - Uses which may constitute an easement - [See second Municipal Law - Topic 1813.3 ].

Real Property - Topic 7070

Easements, licenses and prescriptive rights - Creation by prescription - Evidence and proof - [See second Municipal Law - Topic 1813.3 ].

Torts - Topic 153

Negligence - Evidence - Burden of proof - [See first Municipal Law - Topic 1813.3 ].

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - [See first Practice - Topic 1462 ].

Cases Noticed:

Costello and Dickhoff v. Calgary (City) (No. 2) (1989), 97 A.R. 348; 60 D.L.R.(4th) 732 (C.A.), refd to. [para. 65].

Saxton v. Credit Union Deposit Guarantee Corp. et al. (2006), 384 A.R. 309; 367 W.A.C. 309; 2006 ABCA 175, refd to. [para. 65].

Roberts v. Portage LaPrairie (City), [1971] S.C.R. 481; 17 D.L.R.(3d) 722, refd to. [para. 69].

Schneider v. Royal Wayne Motel Ltd. et al. (1995), 164 A.R. 68; 27 Alta. L.R.(3d) 18 (Prov. Ct.), refd to. [para. 69].

Manufacturers Life Insurance Co. v. Husky Oil Marketing Co. et al. (1999), 249 A.R. 305; 1999 ABQB 574, refd to. [para. 71].

Photinopoulos v. Photinopoulos et al. (1988), 92 A.R. 122; 54 D.L.R.(4th) 372 (C.A.), refd to. [para. 80].

Motkoski Holdings Ltd. v. Yellowhead (County) (2010), 474 A.R. 367; 479 W.A.C. 367; 2010 ABCA 72, refd to. [para. 84].

Doucet-Boudreau et al. v. Nova Scotia (Minister of Education) et al., [2003] 3 S.C.R. 3; 312 N.R. 1; 218 N.S.R.(2d) 311; 687 A.P.R. 311; 2003 SCC 62, refd to. [para. 91].

Cadbury Schweppes Inc. et al. v. FBI Foods Ltd. et al., [1999] 1 S.C.R. 142; 235 N.R. 30; 117 B.C.A.C. 161; 91 W.A.C. 161, refd to. [para. 92].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 96].

St. Elizabeth Home Society v. Hamilton (City) (2010), 266 O.A.C. 136; 2010 ONCA 280, refd to. [para. 99].

Elder Advocates of Alberta Society et al. v. Alberta et al., [2011] 2 S.C.R. 261; 416 N.R. 198; 499 A.R. 345; 514 W.A.C. 345; 2011 SCC 24, refd to. [para. 104].

Enterprises Sibeca Inc. v. Frelighsburg (Municipalité), [2004] 3 S.C.R. 304; 325 N.R. 345; 2004 SCC 61, dist. [para. 105].

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [para. 105].

McCullock-Finney v. Barreau du Québec, [2004] 2 S.C.R. 17; 321 N.R. 361; 2004 SCC 36, refd to. [para. 106].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 106].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243, refd to. [para. 165].

Foothills No. 31 (Municipal District) v. Stockwell (1985), 64 A.R. 335 (C.A.), refd to. [para. 169].

Nelson et al. v. 1153696 Alberta Ltd. (2009), 478 A.R. 208; 2009 ABQB 732, refd to. [para. 171].

Wright v. Long Branch (Village), [1959] S.C.R. 418, refd to. [para. 172].

Harrison v. Harrison, [1883] N.S.J. No. 1 (S.C.), refd to. [para. 172].

Edmonton (City) v. Registrar of North Alberta Land Registration District (1994), 164 A.R. 6 (Q.B.), refd to. [para. 173].

Heppner v. Alberta (1977), 6 A.R. 154; 80 D.L.R.(3d) 112 (C.A.), refd to. [para. 180].

Alberta v. Nilsson (2002), 320 A.R. 88; 288 W.A.C. 88; 220 D.L.R.(4th) 474; 2002 ABCA 283, refd to. [para. 180].

Chaoulli v. Quebec (Attorney General), [2005] 1 S.C.R. 791; 335 N.R. 25; 2005 SCC 35, dist. [para. 180].

Enico group inc. v. Quebec (Deputy Minister of Revenue), 2011 QCCS 4847, dist. [para. 180].

R. v. Askov, Hussey, Melo and Gugliotta, [1990] 2 S.C.R. 1199; 113 N.R. 241; 42 O.A.C. 81; 59 C.C.C.(3d) 449, dist. [para. 180].

Oakwood Development Ltd. v. St. François Xavier (Rural Municipality), [1985] 2 S.C.R. 164; 61 N.R. 321; 36 Man.R.(2d) 215, dist. [para. 180].

Rethazy v. Lincoln (Town) (1977), 2 M.P.L.R. 198 (Ont. H.C.), dist. [para. 180].

Just v. British Columbia, [1989] 2 S.C.R. 1228; 103 N.R. 1, refd to. [para. 183].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2011] 3 S.C.R. 45; 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 184].

Bowen v. Edmonton (City) (1977), 8 A.R. 336; 80 D.L.R.(3d) 501 (T.D.), refd to. [para. 186].

1022049 Alberta Ltd. v. Medicine Hat (City) et al., [2013] A.R. Uned. 143; 2013 ABQB 111, refd to. [para. 186].

Woestenburg v. Kamloops (City), [2001] B.C.T.C. 523; 2001 BCSC 523, refd to. [para. 186].

Abbeyview Enterprises Ltd. v. Matsqui (District) (1980), 22 B.C.L.R. 113 (S.C.), refd to. [para. 186].

Birch Builders Ltd. et al. v. Esquimalt (Township) et al. (1992), 12 B.C.A.C. 144; 23 W.A.C. 144; 90 D.L.R.(4th) 665 (C.A.), refd to. [para. 186].

Welbridge Holdings Ltd. v. Winnipeg (Greater), [1971] S.C.R. 957, refd to. [para. 188].

Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 S.C.R. 420; 164 N.R. 161; 42 B.C.A.C. 1; 67 W.A.C. 1, refd to. [para. 189].

Saskatchewan Wheat Pool v. Canada, [1983] 1 S.C.R. 205; 45 N.R. 425, refd to. [para. 192].

Holland v. Saskatchewan et al., [2008] 2 S.C.R. 551; 376 N.R. 316; 311 Sask.R. 197; 428 W.A.C. 197; 2008 SCC 42, refd to. [para. 192].

Statutes Noticed:

Limitation of Actions Act, R.S.A. 1980, c. L-15, sect. 4(1)(g) [para. 73]; sect. 51(f) [para. 66].

Authors and Works Noticed:

Linden, Allen M., and Feldthusen, Bruce, Canadian Tort Law (8th Ed. 2006), p. 108 [para. 165].

Counsel:

K.D. Wakefield, Q.C., and Shauna Finley, for the plaintiffs;

J.F. McGinnis, Q.C., E.M. Lafuente and C.B. Zelyas, for the defendant.

This action was heard on various dates from November 28, 2011 up to and including May 31, 2013, by Browne, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on January 24, 2014.