+ RMA Rural Municipalities
of Alberta

Resolution 7-99F

Legal Cost Sharing -- John and Ardath Malmberg vs. M.D. of Cardston

January 1, 1999
Expiry Date:
December 1, 2002
Active Status:
Vote Results:

WHEREAS the AAMDC represents rural municipalities in the Province of Alberta which have common interests, common issues, common problems as well as common concerns, and are governed by a common body of provincial statutes, regulations and judicial and quasi-judicial procedures;AND WHEREAS the AAMDC has followed a practice of reimbursing or assisting individual municipalities with legal costs incurred in clarifying the interpretation or application of that common body of provincial legislation on common matters that affect or could affect the general membership of the Association; AND WHEREAS the Municipal District of Cardston was involved in proceedings before the Land Compensation Board, the Alberta Court of Appeal and the Supreme Court of Canada in connection with the issues of disturbance damages, injurious affection, incidental damage and compensation under sections 42(2)(b), 50, 53, 56 and 58 of the Expropriation Act R.S.A. 1980, Chap. E-16, for land used in the construction of a Secondary Highway, wherein it successfully resisted the claim for additional compensation by the landowner;AND WHEREAS notwithstanding the success the M.D. enjoyed in all of the aforesaid proceedings, the Alberta Court of Appeal, through the provisions of section 39 of the Expropriation Act and the exercise of its discretion, directed that the M.D. of Cardston not only absorb all its own legal costs, expenses and disbursements, but also pay all legal costs, expenses and disbursements of the landowner for the entire proceedings;AND WHEREAS in addition to the costs of acquiring the land through expropriation in the amount of $39,597.11, the M.D. of Cardston also incurred legal costs to its own solicitors, Brownlee Fryett, in the amount of $124,507.57 in connection with the aforesaid proceedings and was required to pay the sum of $83,641.91 less $1,019.85 to the solicitors for the landowner resulting in total legal costs actually paid by the M.D. of Cardston in the amount of $207,129.63;AND WHEREAS the M.D. of Cardston has one of the smaller assessment bases of the municipalities which comprise the Association, with the payment of such legal costs for these proceedings resulting in tremendous financial hardship to the M.D. of Cardston. The legal costs alone for this one case are equivalent to approximately 15% of its regular annual budget for operations;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties reimburse and pay to the M.D. of Cardston the sum of $103,564.81 being one-half of the legal costs incurred by it and paid by it in connection with the proceedings and appeals under the Expropriation Act concerning the lands expropriated from John Thomas Malmberg and Ardath Ruby Malmberg.

Member Background:

In 1993, the M.D. of Cardston expropriated some 19 acres from a local landowners farm to facilitate the construction of a new road.The landowners had for many years, without the benefit of a lease, license or other formal authorization, utilized the undeveloped road allowance to facilitate grazing by their cattle, as their property was bisected by the undeveloped road allowance. Expropriation was required as the road allowance width of 66 feet would not accommodate the 132 foot width of the new road.The M.D. paid $30,633 in compensation to the landowner, and was subsequently ordered by the Land Compensation Board to pay a further $3,692.20. The landowners were unsatisfied with this decision, and appealed to the Alberta Court of Appeal.The majority of the Alberta Court of Appeal in its 59 page written decision stated:The Appellants claims are all dismissed with the exception of their claim of $4,107.00 being present value of the annual cost of maintaining the concrete feed bunk and feeding system. The remaining question concerns the costs of the appeal.Under section 39(1) of the Act, the owner is normally entitled to the costs of determining compensation at the Board level. Under section 39(4), when the Owner appeals, he is entitled to costs if he is successful; if he is unsuccessful, the costs are in the discretion of the Court of Appeal.In this case, the Appellants have had some success, but it is very limited. The claims on the appeal totaled $76,498.61. As a result of the appeal, the Appellants will be entitled to just over $4,100.Prior to the hearing before the Board, the M.D. of Cardston had paid the Appellants over $30,000.00 in compensation. As a result of the hearing, the Appellants were awarded an additional $3,692.20 in compensation. The M.D. of Cardston was required to pay $42,831.31 in costs, relative to the determination of compensation. To put these numbers in perspective, the M.D. of Cardston pointed out that Thompson had valued the entire quarter of section 29 at about $81,600.00. Given all these factors, the M.D. of Cardston urged in its factum that costs should be awarded against the Appellants, should their appeal fail.Although the success on the appeal has been very limited, the central issue that arose was deceptively simple. It was also of importance throughout the Province. In light of these circumstances, it is my view that the Appellants should be awarded costs. (emphasis added);Thus, although the Court refused the landowners request for additional compensation, the M.D. of Cardston was nonetheless left with legal costs exceeding $200,000. As the M.D. has one of the smaller assessment bases of any rural municipality in Alberta, this cost represents a substantial financial burden for local ratepayers. In fact, these costs equate to approximately 15% of the M.D.s annual operating budget.As noted above, the Court of Appeal found this case to be of importance throughout the province. In addition, Brownlee Fryett published reports of the proceedings in three of its issues of the Municipal Law Bulletin (being January, 1998; April, 1998 and July, 1998), which it sent to the municipalities which belong to the Association. In its January, 1998 issue, Brownlee Fryett stated: We consider this case to be an important precedent with respect to rights created by the unauthorized use of road allowance in our Province.

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