Stevens v. Winchester Land & Property Ltd., (2009) 467 A.R. 316 (QB)

• Judge: Acton, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 09, 2009
• Citations: (2009), 467 A.R. 316 (QB);2009 ABQB 24

Stevens v. Winchester Land & Prop. Ltd. (2009), 467 A.R. 316 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. FE.060

Gary Stevens and Linda Stevens (nee Dryer)

(plaintiffs) v. Winchester Land & Property Ltd. (defendant)

(0803 13891; 2009 ABQB 24)

Indexed As: Stevens v. Winchester Land & Property Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Acton, J.

January 13, 2009.

Summary:

The plaintiffs were unable to get financing from a conventional lender and they found a "last resort lender" (the defendant) prepared to lend them the $140,000 they required to start a business. The defendant did not advance the funds until after the date stipulated in the contract, which prevented the plaintiffs from performing contracts that they had lined up and destroyed their business prospects. The plaintiffs repaid the loan, and the additional fees and penalties imposed under the agreement. They then sued the defendant for reimbursement of improperly collected fees and penalties and for their solicitor-client costs. The plaintiffs applied for default judgment under rule 152 of the Rules of Court, and for solicitor-client costs. After granting the application for judgment on the evidence, the court reserved on the matter of the costs application.

The Alberta Court of Queen's Bench held that an order for solicitor-client costs was required. The court issued an order for solicitor-client costs to be taxed by the taxing officer.

Practice - Topic 3227

Appearance and default proceedings - Proceedings in default of defence - Default judgment - Notice - The plaintiffs applied for default judgment under rule 152 of the Rules of Court and for solicitor-client costs - As solicitor-client costs were not specifically pleaded, the court raised the issue of whether the defendant should have been notified of the plaintiffs' intention to seek that relief - The Alberta Court of Queen's Bench concluded that it was not necessary to provide the defendant with notice of the costs application, which formed part of the default judgment application - See paragraphs 6 to 10.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - The plaintiffs were unable to get financing from a conventional lender and they found a "last resort lender" (the defendant) prepared to lend them the $140,000 they required to start a business - The defendant did not advance the funds until after the date stipulated in the contract, which prevented the plaintiffs from performing the contracts that they had lined up and destroyed their business prospects - The plaintiffs repaid the loan, and the additional fees and penalties imposed under the agreement - They then sued the defendant for reimbursement of improperly collected fees and penalties and for their solicitor-client costs - The plaintiffs applied for default judgment and for solicitor-client costs - The Alberta Court of Queen's Bench granted the application - With respect to costs, the court was satisfied that an award of solicitor-client costs was required - The levying of additional fees enabled the defendant to be repaid $191,772.37 for a $140,000 loan, despite it having breached the most essential term of the agreement whereby it agreed to advance the contracted for sum by a specified date - The court stated that "[The defendant] should not have entered into a contract it could not perform -- a contract it drafted with terms only favourable to itself. Not to honour the most essential term of that agreement is reprehensible ... The plaintiffs are already burdened with the consequences of the conduct of this opportunistic lender; they should not also have to bear the costs of a lawsuit which would not have been necessary but for the lender's breach of the pivotal clause" - See paragraphs 34 to 45.

Practice - Topic 7501

Costs - Solicitor and client costs - Agreements - General - The plaintiffs were unable to get financing from a conventional lender and they found a "last resort lender" (the defendant) prepared to lend them the $140,000 they required to start a business - The defendant did not advance the funds until after the date stipulated in the contract, which prevented the plaintiffs from performing contracts that they had lined up and destroyed their business prospects - The plaintiffs repaid the loan, and the additional fees and penalties imposed under the agreement - They then sued the defendant for reimbursement of improperly collected fees and penalties and for their solicitor-client costs - The plaintiffs applied for default judgment and for solicitor-client costs - The Alberta Court of Queen's Bench granted the application - With respect to costs, the court was satisfied that an award of solicitor-client costs was required - The court stated, inter alia, "a tertiary lender who drafts a contract whose terms provide it with a remedy for solicitor-client costs should very well expect that if it breaches the contract, then the wronged borrower will seek the same relief against it, particularly where the term breached is the essential term of the contract, and despite this breach, the lender ends up being repaid in full. Costs are within the court's discretion and form part of its inherent jurisdiction. It therefore follows that unless an agreement contains an express provision that prohibits the borrower from claiming this type of relief, then the borrower is not precluded from doing so" - See paragraphs 39 to 40.

Cases Noticed:

Alnashmi v. Arabi, [2000] A.R. Uned. 207; 80 Alta. L.R.(3d) 366; 2000 ABQB 320, refd to. [para. 4].

Guaranty Trust Co. of Canada v. Richer Right of Way Clearing Ltd., [1988] A.J. No. 848 (C.A.), refd to. [para. 5].

Yaremchuk et al. v. Haight et al. (2001), 277 A.R. 160; 242 W.A.C. 160; 2001 ABCA 7, refd to. [para. 7].

Sulef v. Parkin and Breno (1966), 57 W.W.R.(N.S.) 236 (Alta. C.A.), refd to. [para. 7].

Coyle v. Coyle Estate (2005), 383 A.R. 135; 2005 ABQB 436, refd to. [para. 8].

Robinson et al. v. Fiesta Hotel Group Resorts et al. (2008), 455 A.R. 143; 2008 ABQB 457, refd to. [para. 9].

Jackson and Parkview Holdings Ltd. v. Trimac Industries Ltd. et al. (1993), 138 A.R. 161 (Q.B.), refd to. [para. 19].

Mobil Oil Canada Ltd. v. Canadian Superior Oil Ltd. and Nielsen (1979), 21 A.R. 111; 105 D.L.R.(3d) 355 (Q.B.), refd to. [para. 20].

Olson v. New Home Certification Program of Alberta (1986), 69 A.R. 356 (Q.B.), refd to. [para. 20].

Canada Mortgage and Housing Corp. v. Wheeler - see Hongkong Bank of Canada v. Wheeler Holdings Ltd.

Hongkong Bank of Canada v. Wheeler Holdings Ltd. (1991), 112 A.R. 85 (C.A.), refd to. [para. 22].

Polar Ice Express Inc. v. Arctic Glacier Inc. (2008), 439 A.R. 299; 2008 ABQB 194, refd to. [para. 22].

Young v. Young et al., [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161, refd to. [para. 23].

Atchison v. Manufacturer's Life Insurance Co. et al. (2002), 332 A.R. 72; 11 Alta. L.R.(4th) 25; 2002 ABQB 1121, refd to. [para. 23].

Rutherford v. Swanson (1999), 245 A.R. 1; 1999 ABQB 217, refd to. [para. 23].

Canadian Imperial Bank of Commerce et al. v. Singh et al., [2004] O.T.C. Uned. 957 (Sup. Ct.), refd to. [para. 28].

Hongkong Bank of Canada v. Wheeler Holdings Ltd., [1993] 1 S.C.R. 167; 148 N.R. 1; 135 A.R. 83; 33 W.A.C. 83, refd to. [para. 32].

Statutes Noticed:

Rules of Court (Alta.), rule 144, rule 146, rule 152 [para. 8].

Counsel:

Dennis G. Groh, Q.C., for the plaintiffs.

This application was heard on January 9, 2009, before Acton, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for decision on January 13, 2009.