Released: 20080919
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Re: Jaywill Investments Inc., Appellant
- and -
Regional Municipality of Halton, Respondent
Before: Then R.S.J., Lederman and Karakatsanis JJ.
Counsel: John C. L. Ritchie for the Appellant
Robert Doumani, for the Respondent
Heard at Toronto: September 16, 2008
ENDORSEMENT
1The Appellant, Jaywill Investments Inc. appeals from two decisions of the Ontario Municipal Board (OMB):
The decision dated February 6, 2007 dismissing Jaywill’s appeal pursuant to s. 22(1) of the Development Charges Act 1997, S.O. 1997, c. 27 (DCA) of a development charge paid by Jaywill to the Regional Municipality of Halton pursuant to its Development Charge By-law 102-03 and a request for a refund of that charge, with interest; and
The decision dated October 19, 2007 denying Jaywill’s request for review pursuant to s. 43 of the Ontario Municipal Board Act, R.S.O. 1990, c. O28 (OMBA) of the February 6, 2007 decision.
2Jaywill asks that both decisions be set aside and that the Court order the return, refund, or repayment, along with interest, of the $287,904.22 development charge paid to the Regional Municipality.
3Appeals from the OMB to the Divisional Court lie only on a question of law. The finding or determination of the Board upon any question of fact within its jurisdiction is binding and conclusive.
The By-law
4By-law 102-03 was enacted under the DCA and applies, although not exclusively, to developments in the Milton 401 Industrial Park. The DCA allows municipalities to obtain monies necessary to pay for additional infrastructure needed to service new development. Section 2(a) of Schedule D to the By-law states:
If the development does not impose a water or wastewater demand that is greater than the restricted flow [of 3.22m³ per hectare, per day], then no development charge is payable under this By-law… provided that the total demand for water and wastewater services shall be determined through a water usage report to the satisfaction of the Region’s Commissioner of Planning and Public Works.
Section 1( r) of the By-law defines “restricted flow” as
a restriction on the demand for water or the discharge of wastewater of 3.22m³ per hectare per day imposed on lands by an agreement between the Region and the owner of the lands either expressly or by reference to the Milton 401 Industrial Park Implementation Policy.
5The By-law does not prescribe any methodology to be used in preparing the water usage report for determining the demand for water and waste water services.
Background
6Jaywill applied for a building permit under the Building Code Act, 1992, S.O. 1991, c. 23 (BCA) for its new development in the Industrial Park in early August of 2004. Jaywill retained consulting engineers, who prepared water usage reports ultimately indicating that if Jaywill installed water conservation devices as recommended, its new development’s water usage would be less than the restricted flow of 3.22m³/ha/day.
7The Commissioner advised that the Region had a long-standing practice of accepting two types of standard methods in reviewing water usage reports, namely the Ministry of Environment (MOE) and Ontario Building Code (OBC) design flow guidelines and criteria, both of which quantified water usage at 75 litres of water per employee per 8 hour shift (exclusive of processing or cleaning water usage), divided by the lot size of the development, regardless of whether water conservation fixtures are installed. Jaywill’s water usage, according to this method, was calculated to be 5.00m³/ha/day for the employees alone.
8In order to obtain the building permit, Jaywill paid a development charge under the By-law in the amount of $287,904.22 under protest and made a complaint pursuant to s.20 of the DCA. When the Regional Municipality denied its complaint, it appealed to the Board pursuant to s.22 (1) of the DCA.
9In its decision of February 6, 2007, the Board refused to order the refund of the development charge. The Board heard evidence from Jaywill’s consulting engineers that in their opinion the water usage at the new facility would be less than the restricted flow amount. The Board preferred the evidence presented by the Region that water demand would exceed the restricted flow amount. The Board found that the methodology relied upon by the Region to satisfy its Commissioner of Planning and Public Works was reasonable in the circumstance.
10By May of 2007, Jaywill had implemented the water conservation measures recommended by its consulting engineers and its development was fully operational. It sought a review of the Board’s decision pursuant to s.43 of the OMBA on the basis that there was new evidence in support of the position of Jaywill’s consulting engineers about the actual water usage. Jaywill had received water bills between May and August 2007 from the Regional Municipality showing water usage for its new development that was less than 3.22m³/ha/day. In its October 19, 2007 decision, the Board denied the review request and again accepted the water and wastewater demand as based upon the MOE and OBC design flow guidelines and criteria.
Standard of Review
11In Bernard Homes Ltd. v. York Catholic District School Board (2004), 2004 12069 (ON SCDC), 188 O.A.C. 115 at paras. 10-11 (Div. Ct.), the Divisional Court stated the following with respect to the proper standard of review:
Questions of law that engage the expertise of the OMB, such as the interpretation of its own statute, attract a standard of reasonableness. Questions of law of a more general application for which the OMB can claim no special expertise are to be reviewed on a standard of correctness.
12Jaywill submits that the interpretation of this By-law is a question of law of general application; as it not based on the Board’s ‘home statute’, the Board is not uniquely experienced in interpreting such a By-law. The Appellant therefore submits that the standard of review of the Board’s decisions in this case is correctness.
13For the reasons that follow, we are not satisfied that this appeal gives rise to a question of law. At most, the question before the Board was a question of mixed fact and law. To the extent that the Board’s determination may involve questions of law, we are of the view that the standard of review of the decisions of the Board in this context is reasonableness. The Board ought to be accorded a wide degree of deference for decisions arrived at in the exercise of the Board’s expertise in the area of municipal development charges.
Interpretation of the By-law
14Jaywill submits that the Board erred in law in its interpretation of the By-law by requiring the developer to submit a report in accordance with the MOE and OBC design flow guidelines to determine water demand. Rather, Jaywill submits that the By-law must be interpreted in the context of the Milton-401 Industrial Implementation Policy, and specifically its water conservation policy. Jaywill submits that the By-law, through its reference to the Milton 401 Industrial Park Implementation Policy in the definition of ‘restricted flow’, imports a requirement into the By-law that the Commissioner be satisfied with a water usage report only if it uses the same method of calculation –actual use- as was used historically to determine the 3.22 cubed metre number.
15The appellant Jaywill submits that the By-law should be interpreted in a manner most favourable to the taxpayer. It is the position of Jaywill that design flow guidelines and criteria do not determine actual water usage or help establish a methodology to conserve water. The evidence of actual water usage at the facility indicates that Jaywill’s methodology that included water conservation initiatives was more reliable. Jaywill submits that by ignoring any water conservation initiatives in setting out the required methodology, the Commissioner did not exercise his discretion in a manner that was consistent with the purposes and objective of By-law 102-03 and associated policies of the Region, and specifically the Milton 401 Industrial Park Implementation Policy.
16In our view, the plain language of the By-law does not support the insertion of the gloss urged by Jaywill. The reference to the Milton 401 Implementation Policy is merely an identification of the source of the number used in the definition of ‘restricted flow’. The Implementation Policy does not in any event specify a particular methodology for the determination of water usage reports. The By-law specifies that the demand ‘should be determined through a water usage report to the satisfaction of the Region’s Commissioner of Planning and Public Works’ and contains no direction on how the Commissioner was to exercise discretion in determining whether a water usage report was satisfactory. The development charge is a one-time charge collected at the time of the building permit. It must be paid whether or not the development imposes a demand on or uses the services for which the charge is imposed in the context of an infrastructure financing regime. It is paid before the development is in operation and cannot therefore be based upon the ensuing actual use of water. In our view, the language and context of the By-law does not support the interpretation urged by Jaywill.
17We find that the Board did not err in interpreting the By-law. The language of the By-law is clear. The issue before the Board was not the interpretation of the By-law but rather whether the exercise of the Commissioner’s discretion in determining, to his satisfaction, the total demand for water usage or waste water services was bona fide and reasonable. The Board rejected the evidence presented by Jaywill and accepted the evidence of the Region and found the Region’s method was consistent and fair and reasonable within the context of whether Jaywill’s water demand entitled it to a credit within the infrastructure financing regime. The Board doubted "the effectiveness of using a single existing facility as an accurate predictor of water usage for future use."
Motion to Adduce New Evidence
18Jaywill moved to adduce fresh evidence before the Court. We reserved our decision on the motion until the completion of the appeal.
19The proposed new evidence consists of water bills of Halton Region and the affidavit of John Williams regarding water usage of Jaywill’s new development for the period August 29, 2007 to September 2, 2008. Although the Board received evidence of water bills for the months of May, June, July and August, 2007 on the review of its initial decision, this further evidence of actual water usage for the next twelve months was not available at the time of the review decision of the Board.
20However, the jurisdiction of the Court is limited to an appeal on a question of law. This proposed new evidence relates to factual issues pertaining to the methodology of determining whether the total demand for water and wastewater services would or would not be in excess of the restricted flow of 3.22 m³/ha/day.
21This additional evidence of actual water usage is not relevant to the issue as to whether the Board erred in law in its interpretation of the By-law. As it does not bear upon a decisive or potentially decisive issue before the Court, the proposed evidence does not meet an important aspect of the test in R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759 (S.C.C.) for the introduction of new evidence.
22Therefore, the motion to adduce fresh evidence is dismissed.
Conclusion
23We find that the Board made findings of fact supported by the evidence in a logical manner. It made no error of law. The appeals are dismissed.
24If the parties cannot otherwise agree as to costs, the parties may make brief written submissions to the court within 15 days directed to the Registrar of the Divisional Court.
Then R.S.J.
Lederman J.
Karakatsanis J.
Released: September , 2008