QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2015 SKQB 216 Date: 2015 07 14 Docket: QBG 815 of 2014 Judicial Centre: Regina BETWEEN: RURAL MUNICIPALITY OF EDENWOLD No. 158 and GREGORY GEORGE SCHMIDT Counsel: D. Neil Robertson, Q.C. for the applicant Mark F. Mulatz for the respondent DECISION PRITCHARD J. July 14, 2015 Background and Facts [1] On May 15, 2014 the Rural Municipality of Edenwold No. 158 [RM] was granted an order [Court Order] requiring the respondent, Gregory George Schmidt [Mr. Schmidt] to comply, within 60 days, with the order of the Development Officer of the RM dated February 3, 2014 [RM Order]. The RM Order was made pursuant to s. 242 of The Planning and Development Act, 2007, SS 2007, P-13.2 [Act]. It required Mr. Schmidt, as the owner of land located within the RM; namely, Parcel A, Plan GD1719, Ext (Surface Parcel 11576900) [Parcel A] to comply with RM Zoning Bylaw number 2010-17 [Zoning Bylaw]. In particular, it required Mr. Schmidt to desist from operating an equipment storage yard on Parcel and to restore Parcel “to the condition it was in immediately prior to undertaking the development”. [2] The court record shows that Mr. Schmidt was personally present in Chambers on May 15, 2014 when the Court Order was granted. Nevertheless, he took no significant steps to comply with the RM Order within the time stipulated therein. On August 19, 2014, the RM then applied for an order declaring Mr. Schmidt to be in contempt of court for his continued failure to comply with the RM Order as directed by the Court Order. [3] The contempt application was initially heard September 25, 2014. At some time prior, Mr. Schmidt engaged counsel and filed an affidavit in response to the application. In his affidavit, Mr. Schmidt acknowledges that he is not permitted to keep “junk cars and abandoned vehicles and similar materials” on Parcel A. He deposes that he has “taken steps to remove all junked and abandoned vehicles” from his property but then acknowledges that he continues to use his property as storage yard. In paragraphs 7, and of his affidavit sworn September 22, 2014 he states: 7. have taken steps to improve my property by removing signage, cutting grass, removing fences, and removing various vehicles and equipment. maintain that am permitted to use my property as storage yard, as permitted use. 8. have, therefore, not removed all of the equipment own from the property. continue to store rolling stock, trailers, heavy duty equipment, other various equipment, and trailer camper which maintain may store on the property. 9. am prepared to remove all offending equipment from the property if know what to remove. The Applicant may allege that only public utility storage yards are permitted in CR2 Country Residential zoned land. contest this allegation. [4] In paragraph 11 of his affidavit, Mr. Schmidt then states: 11. In the event the Court shall determine have not complied sufficiently, am prepared to continue to remove offending stored equipment. In such case, request be given time to do so. am contractor and have been extremely busy over the summer and into this fall. The land is extremely wet. may need another six (6) to eight (8) weeks to find location to store my equipment. [5] Mr. Schmidt did not appeal the RM Order nor did he appeal the Court Order. Given his continued assertion that he was entitled to maintain storage yard on Parcel A, he was advised by the court that these contempt proceedings were not the proper forum to deal with any dispute over allowable uses for Parcel A; that contempt proceedings were limited to the issue of whether there had been wilful breach of court order without reasonable excuse; and, that until an order has been set aside person can be found in contempt for failing to follow it regardless of their opinion as to its correctness. [See: MacMillan Bloedel Ltd. Simpson, (1994), 1994 CanLII 1731 (BC CA), 113 DLR (4th) 368 (BCCA) (aff’d 1995 CanLII 57 (SCC), [1995] SCR 725). See also Canada (Human Rights Commission) Canadian Liberty Net, 1998 CanLII 818 (SCC), [1998] SCR 626; British Columbia (Attorney General) Perry Ridge Water Users Assoc., 1998 CanLII 5132 (BCSC)]. [6] As Mr. Schmidt indicated willingness to “continue removing offending stored equipment” and given the amount of equipment still remaining on Parcel A, the contempt application was adjourned to October 3, 2014 to give Mr. Schmidt the opportunity to provide the court and the RM with written plan on how he intended to comply with the Court Order. Following the adjournment, Mr. Schmidt provided the requested plan. He estimated the cost of removal to be approximately $10,000.00 and stated that his compliance with the Orders could be achieved by December 15, 2014. [7] The RM conceded that it was preferable to give Mr. Schmidt additional time to comply with the Orders and did not strongly oppose Mr. Schmidt’s adjournment request to December 15, 2014. It was apparent that the RM did not relish the alternative prospect of removing the offending equipment and adding the cost thereof to the property taxes levied against Parcel A. [8] The contempt application was therefore adjourned to February 2, 2015, being the next closest date after December 15, 2014 that was available to the court. [9] On the adjourned date, Mr. Schmidt filed further affidavit to update the court on his efforts to comply with the Orders. He deposed that he, his family and employees had undertaken removal of materials from the lands on October 29, October 30 and on November 13 to November 17, 2014. He further deposed that the clean-up cost him approximately $4,000.00 in fuel costs and about $6,000.00 in salary. At paragraphs and of this affidavit, sworn February 2, 2015, he states: 7. My property now is on par with other acreages and properties in the Rural Municipality fronting Highway #1. There are some acreages which are substantially worse in appearance. 8. At the first application when the Order to Remedy was granted, firmly believed could store equipment and material on my land. It was only after the contempt application when secured counsel that learned my belief as to permitted use was incorrect. [10] Attached to Mr. Schmidt’s affidavit were numerous photographs of Parcel that he took on or about February 2, 2015 showing the then current state of the lands. The RM agreed that some equipment had been removed from Parcel between October 3, 2014 and February 2, 2015 but advised the court that it was still far from satisfied with the results. The RM also acknowledged that given the then existing snow cover, nothing further of significance could realistically be achieved by Mr. Schmidt until spring thaw and the drying out of the surface of the land. The matter was therefore once again adjourned; this time to May 11, 2015. [11] On the final adjourned date of May 11, 2015, the RM filed an affidavit with updated photographs of the state of Parcel that were taken on May 1, 2015 and on May 7, 2015. The RM acknowledged that the photographs showed that since February 2, 2015 Mr. Schmidt had made considerable progress in the removal of equipment from Parcel A. Nevertheless, it submitted that the photographs also clearly evidenced that the job was still far from complete. For his part, Mr. Schmidt did not seek any further adjournments. He simply maintained that given his own personal circumstances, he had done his best in attempting to remove offending material from Parcel A. He also submitted that he would continue in his efforts to comply with the Orders, but it would take time, particularly with respect to the track hoe. Mr Schmidt orally advised the court that the track hoe was located near pipeline running under Parcel and he did not know what approvals he would require from the holder of the pipeline easement before he could transport the heavy equipment across the pipeline. Given this concern, Mr. Schmidt was given leave to file further affidavit to advise the court if the pipeline on Parcel created any genuine impediment to removal of the track hoe. That affidavit, filed May 19, 2015, indicates that the owner of the pipeline requires four days’ notice of when Mr. Schmidt intends to remove the track hoe so they can be present while he does the work. Relief Requested [12] The RM asks the court to:1. Find Gregory George Schmidt in contempt of court;2. Impose appropriate penalties or sanctions on Mr. Schmidt;3. Authorize the RM to enter onto Parcel A to remove any remaining machinery, vehicles, equipment and other materials stored on the land contrary to the Zoning Bylaw; to arrange for disposal of those materials; and to add the costs of this removal and disposal to the taxes on the lands; and4. Make an order for solicitor/client costs in favour of the RM. [13] The law of contempt arises from the common law and the inherent jurisdiction of the court. In his scholarly paper, “The Inherent Jurisdiction of the Court”, (1970) 23 Curr Legal Probs 23, at 27-28, Master I.H. Jacob comments on how important contempt powers are to the proper functioning of the courts and maintaining the rule of law. He states: For the essential character of superior court of law necessarily involves that it should be invested with power to maintain its authority and to prevent its process being obstructed and abused. Such power is intrinsic in superior court; it is its very life-blood, its very essence, its immanent attribute. Without such power, the court would have form but would lack substance. The jurisdiction which is inherent in superior court of law is that which enables it to fulfil itself as court of law. The juridical basis of this jurisdiction is therefore the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in regular, orderly and effective manner. [14] Contempt of court proceedings in this province are rare. Instances of civil contempt are most often based on breach of the rules of court or of court order. The most typical case is when person bound by an order of court requiring them to do something or refrain from doing something, disobeys that order. Such action or inaction gives rise to private injury or wrong which is generally not criminal in nature even though the contemnor may ultimately be sanctioned by fine or even term of imprisonment. However, given the potential severity of punishment, the elements of civil contempt must be proven beyond reasonable doubt. [15] In Saskatchewan, The Queen’s Bench Rules set out the procedure for civil contempt of court proceedings. The relevant portions of Rule 11-26(3)(a)(i) state: Declaration of civil contempt (3) judge may declare person to be in civil contempt of Court if: (a) the person, without reasonable excuse: (i) does not comply with an order, other than an order to pay money, that has been served in accordance with the rules for service of commencement documents or of which the person has actual knowledge; Position of the RM [16] The RM seeks declaration of contempt together with sanctions against Mr. Schmidt, both of which it maintains are necessary to serve as deterrent and to vindicate the authority of the court. The RM acknowledges that Mr. Schmidt has made significant progress in complying with the Orders since the commencement of these contempt proceedings. However, it maintains that Mr. Schmidt has provided no reasonable excuse for his initial failure to comply with the Court Order or for his repeated failures to complete the purging of his contempt despite being given many opportunities to do so by the court. The RM notes that despite four adjournments of these proceedings between September 4, 2014 and May 11, 2015 significant amount of offending material still remains on Parcel A. Based on the pictures taken by the RM on May 7, 2015 and the facts in Mr. Schmidt’s supplementary affidavit sworn May 19, 2015, the equipment remaining includes small bobcat, broken down dump truck, two loaded tractor trailers, large tractor and an 80,000 pound inoperable track hoe that has sunk into the ground and will need to be lifted out and hauled away or cut up and removed in pieces. [17] Parcel is zoned country residential and storage of heavy equipment and related commercial vehicles on Parcel contravenes the Zoning Bylaw. The last set of pictures filed in these proceedings establishes that Mr. Schmidt’s breach of the Court Order continues and is more than de minimis. According to the RM, Mr. Schmidt’s continued failure to comply with the Court Order is made even more egregious by the fact that he has continuously been engaged in this unlawful use of Parcel since late 2009. According to the RM, the evidence establishes that its initial objective was to have Mr. Schmidt voluntarily cooperate and comply with the Zoning Bylaw. Only after it determined that this was not going to happen did it proceed with number of more formal methods of inducement. These ultimately resulted in the issuance of the RM Order directing compliance. When Mr. Schmidt still failed to comply with the Zoning Bylaw, the RM was then forced to initiate an application for the Court Order compelling him to comply. And ultimately, when even that did not propel Mr. Schmidt into action, the RM found itself in the position of incurring substantial legal fees and disbursements to initiate these contempt proceedings. In all, the entire process has extended beyond five years. [18] Given the length of time that Mr. Schmidt has been in non-compliance with the Zoning Bylaw, the RM suggests that in addition to the requested order authorizing it to complete the removal of the offending equipment, additional appropriate sanctions should include substantial fine as well as an order requiring Mr. Schmidt to pay the RM’s solicitor and client legal costs. Position of Mr. Schmidt [19] At the commencement of these proceedings, Mr. Schmidt took the position that since he honestly believed that the RM Order was wrong, he was not required to comply with it nor with any Court Order purporting to require such compliance. When faced with the reality that his view of the correctness of the RM Order and, by necessity, the Court Order, was not relevant to these proceedings, he ultimately became more serious about making efforts to remove the offending equipment and materials from his lands. And yet, despite the many adjournments that have given Mr. Schmidt generous additional time to comply, he has still not removed all of the offending equipment. In essence, he responds by maintaining that this whole matter has been nothing but huge financial drain on him and his family. He says that he simply has no place other than his home acreage to park his tractor trailers between jobs or to store equipment that he requires from time to time in his contracting business. [20] At no point in these proceedings has Mr. Schmidt maintained that he was not in contempt of the Court Order. He was clearly in contempt at the commencement of these proceedings and, despite some significant efforts towards compliance over these past eight months, he continues to remain in contempt of the Court Order. Given this reality, the only real issue in dispute is the appropriate penalty or sanction to be imposed by this court. [21] The Court Order that is the subject of these proceedings gave Mr. Schmidt period of 60 days to comply with the RM Order. The 60 day time period expired mid-May, 2014. The Notice of Application that initiated these proceedings was originally scheduled to be heard on September 4, 2014. The hearing was ultimately concluded on May 11, 2015. [22] It is not unusual for there to be genuine issue between the parties as to whether or not there has been substantial compliance with any given order. This is not such case. Mr. Schmidt has not claimed that he has substantially complied with the RM Order or the Court Order; only that he has, in effect, done as much as he can do at this point to comply. [23] The court has some sympathy for the situation that Mr. Schmidt has found himself in. Although there is no clear evidence on this point, it is likely that he did not know before he purchased Parcel that his intended use of the land was contrary to the Zoning Bylaw. The evidence establishes that Mr. Schmidt and his spouse acquired Parcel in late February 2009 and within six months of their acquisition, the RM was already advising them in writing of “concerns with storage issues” on the land. Unfortunately, Mr. Schmidt failed to take the concerns of the RM seriously. His lack of positive response to letter requests prompted the RM to more formal action. On August 30, 2010, he was advised that formal resolution has been passed by the RM on August 21, 2010 requiring him to remove the heavy equipment and related vehicles from Parcel by October 1, 2010. Mr. Schmidt failed to take any remedial steps in response to this resolution and the RM then requested him to attend the December 21, 2010 council meeting to provide his reasons for not complying with the Zoning Bylaw. There is no record of what, if anything, occurred at that meeting. There is also no record of dealings between the parties in 2011 or 2012. Correspondence shows that in July of 2013, Mr. Schmidt was in discussions with the RM regarding development permit applications for Parcel and another parcel of land. However, there is no evidence of what became of the proposed applications. On February 3, 2014 the RM Order central to these proceedings was ultimately made. [24] The history leading up to these proceedings establishes that this is not case of the RM having acted in high-handed manner either before or after the RM Order. The RM tried on its own for nearly five years to obtain compliance with its straightforward zoning requirements but received no cooperation from Mr. Schmidt. Since then, the court has met with slightly more success, but only by granting significant adjournments to give Mr. Schmidt additional time to continue in efforts to comply. [25] Mr. Schmidt claims that he has no other place to store his commercial vehicles or that he cannot afford to store them elsewhere. These practical issues were undoubtedly genuine concerns for Mr. Schmidt when he first became aware of the Zoning Bylaw. However, sympathy for his predicament ultimately fades when he fails to solve this problem with over five years to do so. Moreover, Mr. Schmidt’s stated concerns or impediments to compliance ring rather hollow when he fails to provide evidence of any efforts that he may have made to find alternate storage facilities or of any significant financial hardship that has prevented him from doing so. Without such evidence, and despite some sympathy for Mr. Schmidt’s plight, it is not possible to justify any further delay in the court ultimately enforcing its Order. [26] In the result, and pursuant to Queen’s Bench Rule 11-16(3), this court declares the respondent, Gregory George Schmidt to be in contempt of court for failure, without reasonable excuse, to comply with the terms of the order of Mr. Justice M.T. Megaw made in Chambers on May 15, 2014. In the event Mr. Schmidt remains in contempt of court following the expiration of 30 days after personal service of the order issued pursuant to this decision, the RM is hereby authorized to enter upon Parcel A and remove and dispose of the machinery, commercial vehicles, equipment and other items that remain stored thereon contrary to the Zoning Bylaw and thereafter dispose of those items. Punishment for Civil Contempt of Court [27] The applicable portions of Queen’s Bench Rule 11-27(1) state: Punishment for civil contempt of Court 11-27(1) Every person declared to be in civil contempt of Court is liable to any one or more of the following penalties or sanctions in the discretion of judge: (a) imprisonment until the person has purged the person’s contempt; [28] The RM did not vigorously urge imprisonment as an appropriate sanction in this case and am not prepared to consider it. However, the RM has urged this court to impose significant fine as well as solicitor/client costs. For his part, Mr. Schmidt asks for time to pay any fine that may be levied. [29] The court has been advised that up to but not including the May 11, 2015 court appearance, solicitor/client costs incurred by the RM in these proceedings total $13,370.00. This includes four court appearances and the preparation of two memoranda and several affidavits. The RM submits that it was compelled to make this contempt application both to enforce the law and to vindicate the authority of the court. It therefore maintains that solicitor/client costs should be awarded. In support of this submission the RM relies upon Goodtrack The Rural Municipality of Waverley No. 44), 2013 SKCA 137 (CanLII), 427 Sask 147 [Goodtrack]. In Goodtrack, the Saskatchewan Court of Appeal expounded upon the principles to be followed regarding solicitor/client costs that it had earlier set out at paragraph 118 of Siemens Bawolin, 2002 SKCA 84 (CanLII), 219 Sask 282 [Siemens]. In Siemens, the Court of Appeal stated: 118. These are the principles, relevant to this appeal, which take from my review of the above authorities: 1. solicitor and client costs are awarded in rare and exceptional cases only; 2. solicitor and client costs are awarded in cases where the conduct of the party against whom they are sought is described variously as scandalous, outrageous or reprehensible; 3. solicitor and client costs are not generally awarded as reaction to the conduct giving rise to the litigation, but are intended to censure behaviour related to the litigation alone; 4. notwithstanding point 3, solicitor and client costs may be awarded in exceptional cases to provide the other party complete indemnification for costs reasonably incurred. [30] Referring back to the principles enumerated in Siemens, the Saskatchewan Court of Appeal in Goodtrack states at paragraphs 31 and 33: 31. …we conclude that Siemens v. Bawolin provides for solicitor-client costs in exceptional circumstances including but not restricted to situations where the conduct of the party against whom they are awarded is scandalous, outrageous or reprehensible. Viewing Siemens v. Bawolin in this manner allows trial judge to exercise judicial discretion in awarding costs, which the Queen’s Bench Rules and the relevant legislation contemplate. 33. …the Chambers judge erred in interpreting the Siemens case when she stated that “an award of solicitor-client costs is limited to rare and exceptional circumstances where the conduct of the party against whom costs are sought is scandalous, outrageous or reprehensible”. By limiting solicitor-client costs to circumstances where there is both exceptional circumstances and scandalous, outrageous or reprehensible conduct, the Chambers judge incorrectly fettered her discretion. [Emphasis in original] [31] Queen’s Bench Rule 11-1 speaks more generally about the court’s discretion respecting costs. Rule 11-1(1) states: 11-1(1) Subject to the express provisions of any enactment and notwithstanding any other rule, the Court has discretion respecting the costs of an incidental to proceeding or step in proceeding, and may make any direction or order respecting costs that it considers appropriate. [32] The portions of Rule 11-1(4) which are relevant to these proceedings state: 11-1(4) In exercising its discretion as to costs, the Court may consider: (a) the result of the proceeding; (c) the importance of the issues; (g) the conduct of any party that tended to shorten or to unnecessarily lengthen the proceeding; (h) party’s denial of or refusal to admit anything that should have been admitted; (l) any other matter it considers relevant. [33] In my view, there are number of factors that support the RM’s position that the exceptional circumstances of this case justify the awarding of solicitor and client costs. Clearly, the situation that the RM was in when it commenced these contempt proceedings was untenable. Not only had Mr. Schmidt steadfastly refused to comply with the RM Order, he had continued to do so even after the Court Order was granted directing him to comply with the RM Order. The Court Order was granted pursuant to s. 242(10) of the Act. Section 242(11) thereof states: (11) No person to whom an order is made pursuant to subsection (10) shall fail to comply with the order within the time set out in the order. [34] The statutory authority of the RM and the jurisdiction of this court were both wilfully ignored by Mr. Schmidt. In most instances, the mere commencement of contempt proceedings is sufficient to immediately induce compliance with Court Order, but not in this case. Although Mr. Schmidt’s conduct prior to the commencement of these proceedings on August 19, 2014 may not generally warrant an award of solicitor and client costs, his continued and ongoing unjustified failure to comply with the Zoning Bylaw since then certainly does. This has never been situation where there has been genuine issue or dispute between the parties. Mr. Schmidt has simply not liked how the Zoning Bylaw impacts his personal interests and he has therefore chosen not to comply with it. [35] The choices made by Mr. Schmidt have had significant financial implications for all ratepayers of the RM whose taxes have regrettably but necessarily been used to fund these contempt proceedings. Although courts do not relish applications of this kind, it might reasonably be said that the RM had public policy obligation to bring this matter forward and corresponding right not to be saddled with the costs of doing so. Moreover, s. 369 of The Municipalities Act, SS 2005, M-36.1 specifically authorizes that costs incurred by council in remedying contravention of bylaw be added to the tax roll of the affected lands s. 369(1)(c) states: 369(1) council may add the following amounts to the tax roll of parcel of land: (c) unpaid expenses and costs incurred by the municipality in remedying contravention of bylaw or enactment if the contravention occurred on all or part of the parcel; [36] Although s. 369(1)(c) does not specifically refer to solicitor/client costs of proceedings of this kind, it was properly instituted and clearly necessary to deal with contravention of the Zoning Bylaw. It is also the means by which the RM has obtained authority, if necessary, to remedy the contravention. [37] Given all of these considerations, I am satisfied that this is a situation that calls for complete or near complete “indemnification for costs reasonably incurred” by the RM, which are hereby set at $15,000.00. [38] Significant additional costs may be incurred by the RM and added to the tax rolls for Parcel A and became payable by Mr. Schmidt if he does not purge his contempt within the time allotted hereunder and before the RM moves to remove the offending equipment from Parcel A. Mr. Schmidt will also be responsible for his own legal fees. In all, Mr. Schmidt’s failure to comply with the Court Order could end up being an extremely expensive mistake for him. Contempt proceedings are not for punishment per se, but for upholding the rule of law and respect for court orders. As such, fine as requested by the RM will not be imposed, because the court is concerned that any additional financial sanction may be more akin to punishment and may cause severe hardship to Mr. Schmidt. [39] An order may therefore issue in the form of the draft filed on August 19, 2014 but with paragraph thereof deleted in its entirety and paragraph being amended by deleting the period from the end of the sentence and adding “which are set at $15,000.00.” J. J.L.G. PRITCHARD
Civil Procedure – ContemptCivil Procedure – Queen’s Bench Rule 11-16Municipal Law – Zoning Bylaw – Enforcement The applicant rural municipality was granted an order in May 2014 by a Queen’s Bench judge that directed the respondent to comply within 60 days with an order of the applicant’s development officer. That order had been made pursuant to s. 242 of The Planning and Development Act and required the respondent to comply with the zoning bylaw by desisting from operating an equipment storage yard on a parcel of land owned by him and to restore it to the condition it was in prior to his use of it. The respondent had purchased the land in 2009 and immediately began storing equipment and leaving junk cars and other materials on it. The applicant had tried to encourage the respondent’s voluntary cooperation with the bylaw but eventually issued the order. After the court granted the order, the respondent took no steps to comply with it and in August 2014, the applicant applied for an order declaring the respondent to be in contempt of court. The application was heard in September at which time the respondent submitted by affidavit that he had removed the old cars but believed that he was allowed to keep his equipment. He requested that he receive additional time. The respondent was given until December 2014 to comply with the order. At the hearing he deposed that he had spent a significant amount of time and money removing materials from the land and that he had found out from his counsel that his belief regarding the permitted use of the land was incorrect. Based on the appearance of the site, the applicant was not satisfied but agreed to adjourn the matter until May 2015 as nothing could be done during the winter. When the matter was reviewed in May, the respondent had removed more equipment but said that he was not able to move it all as he had no place to put the rest of it. The applicant requested that the court find the respondent in contempt and to impose appropriate penalties, authorize it to remove any remaining machinery and to add the costs of this removal and disposal to the taxes on the land and to make an order for solicitor-client costs in its favour. HELD: The respondent was found to be in contempt of court pursuant to Queen’s Bench rule 11-16(3) for his failure, without reasonable excuse, to comply with the terms of the May 2014 court order. The court authorized the applicant to remove and dispose of the equipment if the respondent had not done so within 30 days of the order issued. The court awarded solicitor-client costs to the applicant in the amount of $15,000 because of the respondent’s continued and unjustified failure to comply with the zoning bylaw. As the applicant might incur additional costs to remove the equipment, those costs would be added to the tax rolls of the property and become payable by the respondent if he had not purged his contempt within the allotted time.