Coquitlam (City of) v. Gemex Developments Corp. re costs

2003BCSC0026 Citation: City of Coquitlam v. Gemex Developments Corp. re costs Date: 20030110 2003 BCSC 26 Docket: S065822 Registry: New Westminster IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: CITY OF COQUITLAM PETITIONER AND: GEMEX DEVELOPMENTS CORP. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE RALPH Counsel for the Petitioner Daniel R. Bennett and Paul A. Craven Counsel for the Respondent Gregory N. Corson Date and Place of Hearing Written Argument [1] Reasons for judgment in this case were delivered August 28, 2001: Coquitlam (City) v. Gemex Developments Corp (2001), 21 M.P.L.R. (3d) 40 (B.C.S.C.), 2001 BCSC 1231. At that time, I stated (at para. 16): While I am not aware of any reason why costs should not follow the event, counsel may submit written argument on costs if they are unable to agree on them. The parties have only recently submitted written argument on costs. These reasons address that issue. History of the case [2] Both the City and Gemex rely on the facts of the case at bar to support their submissions on costs. I will briefly review the salient features of the litigation. [3] Gemex is the owner of a parcel of land in Coquitlam that is bisected by the Coquitlam River. Pursuant to a development plan, the City intends to undertake a feasibility study for a new crossing of the Coquitlam River at a point adjacent to the Gemex parcel of land. One part of the feasibility study - an environmental assessment - requires entrance onto the Gemex property. Gemex, however, refused the City entry and the City petitioned this Court for a declaration of entitlement. [4] I concluded that s. 309.1 of the Local Government Act, R.S.B.C. 1996, c. 323, entitled the City to enter Gemex's property without the consent of the owner for the purpose of carrying out the feasibility study. Position of the parties [5] Gemex seeks special costs despite having been unsuccessful in the action. It says that the City's entry onto their land amounts to a statutory expropriation. Gemex asserts that with respect to potential or actual expropriations, any damages from that expropriation must be paid to the land-owner. Legal costs, claims Gemex, are included as part of the damage caused by the expropriation proceedings. [6] Gemex asserts further that the City exercised its entitlement immediately after receiving judgment and thus, frustrated any appeal Gemex may have pursued. [7] In the alternative, Gemex seeks ordinary costs at scale 3. [8] Finally, Gemex submits that if it is not entitled to costs, the Court should exercise its discretion and require each party to bear its own costs. In support of this position, Gemex asserts that it is effectively an innocent party who petitioned the Court concerning a matter which had not been previously considered. Gemex says that in circumstances such as this, where the ruling is of assistance to the public, no order as to costs should be made. [9] The City's position is that costs should follow the event and that the burden of displacing the ordinary rule has not been met by Gemex. In particular, the City states that special costs are awarded only when there is reprehensible conduct and that in this case, none is apparent. Furthermore, the City takes the position that legal fees are not subsumed in the 'loss or damage' provisions of the legislation. Finally, the City asserts that the mere fact that the successful party was a municipality should not alter the ordinary rule that costs follow the event. Issues [10] The following issues require consideration: 1) Should Gemex receive costs, despite being unsuccessful in the action? 2) If so, should Gemex receive special costs? 3) If Gemex is not entitled to costs, should the City be awarded costs? Analysis 1. Should Gemex receive costs, despite being unsuccessful in the action? [11] The general rule is that costs follow the event. However, the Court retains discretion with respect to ordering costs. Rule 57(9) of the Supreme Court Rules, B.C. Reg. 221/90, states: Subject to subrule (12), costs of and incidental to a proceeding shall follow the event unless the court otherwise orders. This provision reinforces the general principle and situates the burden of displacing the usual rule on the party who seeks the departure: Grassi v. WIC Radio Ltd. (2001), 89 B.C.L.R. (3d) 198 at para. 24 (C.A.), 2001 BCCA 376. Therefore, Gemex must demonstrate that the circumstances of this case require a departure from the ordinary rule. [12] The Court's discretion with respect to costs must be exercised on a principled basis: Grassi, supra at para. 24. [13] Two of the principles germane to the exercise of discretion in this case are: i) The discretion must be exercised with reference to factors connected with the case (See Churchland v. Gore Mutual Insurance Co. (1999), 45 C.P.C. (4th) 342 (B.C.S.C.) at para. 2). The appropriate considerations are "those that arise from the nature and conduct of the litigation": Brown v. Black Top Cabs Ltd. (1997), 43 B.C.L.R. (3d) 76 at para. 17 (C.A.); and ii) The fact that one party is in a better position to bear the costs of the action is not a relevant factor: Robinson v. Lakner (1998), 159 D.L.R. (4th) 191 (B.C.C.A.). [14] Gemex points to three features of this case that it says support the exercise of judicial discretion to award costs to an unsuccessful litigant. [15] First, Gemex says that the statutory provisions relied on by the City, shift the ordinary rule of costs. Section 312 of the Local Government Act, states: 312(1) If a municipality (a) exercises a power to enter on, break up, take or enter into possession of and use any property without the consent of the owners of the property, or injuriously affects property by the exercise of any of its powers, and (b) exercises a power referred to in paragraph (a) that does not constitute an expropriation within the meaning of the Expropriation Act, compensation is payable for any loss or damages caused by the exercise of the power. [emphasis added] [16] In my view, this provision is of no assistance to Gemex. The cost of litigation was not caused by the City's exercise of power. That power was only exercised after the litigation had concluded and no evidence has been adduced to show any damages arising from the entry onto Gemex's land. [17] I am supported in this interpretation of the statute by the decision in Tidmarsh v. British Columbia (Expropriation Compensation Board, [1995] B.C.J. No. 1040 (S.C.) (QL), where Shaw J. stated (at para. 4): The objective of the costs provision of the Expropriation Act is to ensure as best as possible that the party being expropriated is made economically whole. [emphasis added] [18] The purpose of the provision at issue, which is similar to that found in the Expropriation Act, is to compensate landowners for the damage to their property or loss actually caused by the expropriation. The provision is not intended, however, to permit landowners to bring municipalities to court, in advance of the expropriation, with impunity and without economic consequences. [19] Second, Gemex requests that the Court take into account the relative positions of the parties; Gemex is a private landowner, the City is a municipality with greater resources and the action arose at the insistence of the City. [20] With respect to the first two factors, the law, in my view, is quite clear that relative financial position is irrelevant to the determination of costs: see Robinson, supra. [21] The third factor may be relevant in certain circumstances: Manita Investments Ltd. v. T.T.D. Management Services Ltd., [1997] B.C.J. No. 2586 (S.C.) (QL). However, this is not a case of litigation that has been unduly protracted by one side. The City sought to enter onto private property and Gemex attempted to prevent that entry. The matter was brought to Court in a timely fashion and was heard in one day. From the evidence before me, Gemex did not incur any unreasonable litigation expenses due to any action of the City. [22] Finally, Gemex asserts that the City frustrated any potential appeals by acting immediately on the Court's declaration and exceeded the Court's order by having a member of the R.C.M.P. accompany their representatives. In my opinion, neither of these allegations has any bearing on the apportionment of the costs of litigation. Gemex could have applied for a stay of the order, but chose not to do so. [23] In summary, I accept the submission of the City that [w]hile a property owner may choose to challenge the municipality's right to access its private property or force the municipality to seek redress from the Court, that does not mean that the property owner should be immune from the consequences of that choice. Consequently, Gemex is not entitled to its costs in this case. 2. Should Gemex receive special costs? [24] In light of my conclusion with respect to Issue 1, I need not consider this aspect of the application. 3. If Gemex is not entitled to costs, should the City be awarded costs? [25] Gemex submits in the alternative that no costs should be awarded to either party and relies on the case of Shannon Woods Developments Ltd. v. R.E. Dodds, [1996] B.C.J. No. 2869 (S.C.) (QL), in which such an order was made. In reaching that decision, Madam Justice MacKenzie relied on four factors set out in Landry v. Bridgestone Tire Ltd. (1975), 66 D.L.R. (3d) 408 at 409 (B.C.S.C.): (a) the difficult nature of the case, and (b) the great expense to which the plaintiffs had been put in their efforts to get to trial, (c) the plaintiffs certainly had suffered financial loss as a result of the accident, (d) the Bridgestone Tire companies would be able to defray the costs of this litigation without financial hardship, whereas the plaintiffs would not. [26] In light of the Court of Appeal's decision in Robinson, supra, it is questionable whether factor (d) remains relevant. In any event, I cannot conclude that the facts of the case at bar accord with the requirements of factors (a) - (c). [27] While this case was said to be the first to consider the application of s. 309 of the Local Government Act, that fact alone does not render the case inordinately complicated. The case was not lengthy, the facts were generally not in dispute, and there was only one legal issue of significance. Likewise, there is no evidence that Gemex has been put to extraordinary expense in bringing this matter to trial. Conclusion [28] Gemex has not satisfied its burden of displacing the usual rule with respect to costs. Costs shall follow the event and the City is entitled to its costs at scale 3. "Bryan F. Ralph, J." The Honourable Mr. Justice Bryan F. Ralph