CITATION: Matwijow v Pelham, 2013 ONSC 2079
DIVISIONAL COURT FILE NO.: DC-12 -00000373-0000
DATE: 20130430
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MATLOW, ASTON, and SWINTON, JJ.
B E T W E E N :
ISABEL MATWIJOW
Applicant (Appellant in Appeal)
Michael J. Valente and F. Pignoli, for the Applicant (Appellant in Appeal)
- and -
THE CORPORATION OF THE TOWN OF PELHAM and THE REGIONAL MUNICIPALITY OF NIAGARA
Terrence H. Hill and Sarah J. Draper for the Respondent, Town of Pelham, (Respondent in Appeal)
Respondents (Respondents in Appeal)
HEARD: November 2, 2012 at Hamilton
MATLOW, J.:
This appeal
[1] This is an appeal from the judgment of C.A. Tucker J. dated April 26, 2012 dismissing an application made by the applicant for an order compelling the Chief Building Official (“CBO”) of the respondent, Pelham, to issue to her a building permit for the construction of a single residential dwelling on certain land in the Town of Pelham.
[2] For the reasons that follow, this appeal is dismissed.
The standard of review
The applicable standard of review with respect to the questions of law determined by the application judge is that of “correctness”. With respect to mixed questions of fact and law, the standard of review is that of palpable and overriding error, unless the issue of law is extricable.
The facts
[3] What is in issue is whether the applicant is entitled to an order requiring the CBO to issue to her the building permit that she seeks.
[4] The land that is the subject of this appeal (“Part One”) is part of a fifty acre parcel of farm land purchased by Dmytro and Annie Matwijow in 1945. Dmytro died in 1984 leaving the entire parcel to his widow, Annie, as the sole surviving owner.
[5] The applicant is the spouse of Mike Matwijow, one of three surviving children of Dmytro and Annie.
[6] In 1976, a small portion of the 50 acre parcel was legally severed with the required consent of the Regional Land Division Committee and conveyed by Dmytro and Annie to the applicant and Mike. The consent was given by the Committee in response to Mike’s application in which he stated that it was “for the construction of a dwelling for his own use to enable him to assist his elderly parents in continued operation of the farm”. This portion of the parcel is not the subject of this appeal.
[7] Subsequently, Annie and her children decided to attempt to carve up the balance of the parcel into eight lots to be allocated by Annie to the children and others by a “testamentary devise” which made reference to a reference plan prepared for and registered by Mike in 1986. At that time that method of circumventing the subdivision provisions of the Planning Act was permitted but a subsequent amendment of the Act made prior to Annie’s death in 2002 prohibited it and the attempt to subdivide failed despite the allocation provisions in Annie’s will.
[8] In 1995 the members of the Matwijow family decided to make another attempt to subdivide the balance of the parcel in accordance with a scheme suggested by a neighbour. It involved creating a “root of title” within the 40 year title search period prescribed by ss. 112 and 113(1) of the Registry Act, R.S.O. 1990, c. R.20 by the registration of a deed that both the grantor and grantee knew to be a sham. They knew the grantor had no interest in the property described in the deed, and never could without first obtaining a severance under the Planning Act. They admit they never intended to apply for a severance, the whole purpose of their scheme being to avoid having to do so.
[9] In paragraphs 4 and following of her reasons for judgment, the application judge described the scheme as follows:
[4] …A new plan or scheme evolved whereby deeds were registered on the parts involving members of the family. There was no conveyance from Annie on any of these deeds to the “purchasers”. The vendors on the deeds were never registered owners of the Land and they knew they were not owners at the time of their conveyances. The plan was to create the first good deed and root of title in a 40-year search period.
[5] A second step in the plan was to do further deeds to family members and to have the solicitors involved execute the Planning Act statements on those deeds which were correct as the “vendors” owned no adjoining land at the time of the transfer. The “deeds” had been arranged so that no adjoining lands were owned by the same person or conveyed to a person who owned an adjoining lot. By law the statements resulted in no contravention of the Planning Act for the parts so created and conveyed.
[6] Annie acquiesced in the scheme taking no action when she was informed by the Town of Pelham (“the Town”) in writing in 1998 of the transfers and informing the Town she had no “no interest or quarrel with the ownership”.
[10] Dmytro and Annie had four children, Mike, Emily Winnicki, Mary Massi and Irene Caissy. Irene Caissy, who died before Annie, had four children, one of whom was John Caissy. Any interest in Part One which John Caissy purported to have was in trust for himself and his three siblings.
[11] On August 28, 1995, a deed which purported to transfer Part One from John Caissy to Emily Winnicki was registered. There was no previous deed transferring Part One from its owners, Dmytro and Annie, to John Caissy.
[12] On November 27, 1998, a deed which purported to transfer Part One from Emily Winnicki to Mike was registered.
[13] On November 8, 2002, Mike applied for a building permit with respect to Part One. Section 8(2)(a) of the Building Code Act, 1992, S.O. 1992, c. 23 required the CBO to issue a building permit unless the proposed construction “will contravene this Act, the building code or any other applicable law.”
[14] On December 18, 2002, Mike’s application was denied by the CBO of Pelham who gave the following reasons:
Your application for a building permit has been denied as it is, in our opinion, contrary to other applicable law in that there is a question as to the legality of your deed.
It would appear to that your deed was created to take advantage of provisions under the Registry Act and that there is no proper chain of evidencing your ownership to the subject property.
Furthermore, this deed and other similar deeds to lands abutting your property contravene the Planning Act.
[15] On February 11, 2003, a deed was registered transferring Part One from Mike to the applicant and, with the concurrence of Pelham, the applicant then took over Mike’s building permit application process. On March 11, 2003, the applicant commenced the application in which the judgment in appeal was issued.
[16] On March 29, 2004, Part One was transferred to Land Titles Conversion Qualified. However, the parties agree that the application and this appeal must be determined on the basis of the law applicable when the CBO made his decision - that is, prior to the conversion to land titles. We heard this appeal on that understanding and on the basis that the applicant would be regarded as the original applicant for the building permit.
The application judge’s analysis and disposition
[17] The application judge recognized that section 8(2)(a) of the Building Code Act, 1992, S.O. 1992, c. 23, (the BCA”), as it read at the time Mike applied for a building permit, made it mandatory, in the circumstances of this case, that the chief building official issue a building permit to a person qualified to apply unless “the proposed building…will contravene this Act, the building code or any other applicable law”.
[18] Section 1.1.3.2 then defined “applicable law” as follows:
Applicable Law means, for the purpose of Section 8 of the Act, any general or special Act, and all regulations and by-laws enacted thereunder, which prohibit the proposed construction or demolition of the building unless the Act, regulation or by-law is complied with.
She then applied this definition and concluded that the Planning Act was included in it.
[19] Then, in paragraph 20 of her reasons, she referred to the reasons for judgment of the Court of Appeal in In re Certain Titles to Land in Ontario, 1973 609 (ON CA), [1973] 2 O.R. 613, where the Court considered the concept of “fraud upon an Act” and considered whether the scheme of the members of the Matwijow family, including Mike and the applicant, fell within it. Referring to that case, she stated as follows:
…the Court discussed what would be considered a fraud upon the Planning Act as compared to a plan to utilize a legal device to circumvent the Planning Act. The Court concluded that if a transaction would be a fraud upon the Planning Act the transaction would be invalid and provided certain examples of situations which it found to be such fraud.
[20] She then concluded that the scheme of the Matwijow family did constitute a fraud upon the Planning Act. At paragraph 22 of her reasons, she continued as follows:
[22] I find the central difference in this scheme to avoid the Planning Act is that it required an act of civil fraud to begin the process. Although Annie acquiesced in the transaction, it could also be carried out against the owner without his knowledge or consent by persons acting fraudulently against the owner. The same plan could be used by the owner paying parties to take title to part of the land he owns to carry out the same scheme. Checkerboarding and inheritance plans were clever inventions which avoided the provisions of the Planning Act by using legal loopholes which allowed the transfers to occur. I find the actions taken by the parties involved here were not clever. They were deceitful and fraudulent to the knowledge of the applicant. The “deeds” were not “in truth and substance” what they were purported to be, a transfer of title from a registered owner to a bona fide purchaser (sic).
[23] Accordingly, I find the deeds did not convey title because the vendors were not owners of the land. The first deeds registered on the land were not in compliance with the Registry Act which would require the most recently registered conveyance to be searched before the conveyance in the deed to establish a good and sufficient chain of title. The subsequent deeds, I find, cannot validate deeds in which the transferor and transferee had actual knowledge that its vendor of the lands or its immediate predecessors in title had no title to the land.
[21] Having made the findings of fraud set out above, the application judge went on to reject the other submissions made by counsel for the applicant in support of the applicant’s entitlement to a building permit including arguments relying on various provisions of the Registry Act and the Land Titles Act and, in paragraph 23 stated, in part, the following:
[24] The applicant urges me to deal only with the application of the building permit submitting that notwithstanding the original “deceit” done, the provisions of the “40-year” rule, the Planning Act statements and subsequent conversion to Land Title have cured all of that and, as such, the permit should issue. I find to the contrary. This application for a building permit is “fruit from the poisoned tree”. I find that a court should not condone such acts by granting the building permit.
Additional observations
[22] To the application judge’s analysis I would respectfully add the following observations.
[23] From the context in which paragraph 22 appeared, it is clear that the application judge intended, in the first line, to say “evade the Planning Act” rather than “avoid” it. Avoiding the application of a statute by structuring one’s affairs is lawful whereas evading the application is not.
[24] It is of significance in this case that the purported transfer of Part One from Winnicki to Mike, and the other purported transfers by the Matwijow family, were made without any expectation, reasonable or not, that there would follow bona fide transfers, by persons in positions to do so, to each of them of the respective portions they themselves purported to transfer. It is this feature that distinguishes this case from others in which it may be permissible for a mortgage of land by a mortgagor to precede registration of a transfer to that mortgagor.
[25] The significance of the ownership of Parcel One in this appeal, although clearly considered by the application judge and, perhaps, obvious, should nevertheless be articulated. The Chief Building Official denied Mike’s application for a building permit on the basis that Mike was not the owner of Parcel One and not eligible to apply for a permit. Section 8 (1.1) of the BCA addresses the eligibility requirement as follows:
An application for a permit to construct or demolish a building may be made by a person specified by regulation and the prescribed form or the form prescribed by the Minister must be used and be accompanied by the documents and information specified by regulation.
Counsel did not bring either the regulation or the forms to our attention. However, the present version of the regulation, O.Reg. 350/06, provides in s. 1.3.1.2(1) that the owner of the property or an authorized agent may apply for a construction permit. I conclude that only the owner of land or someone authorized by him is entitled to make an application and that officious meddlers with no ownership interest, such as Mike and the applicant, do not.
[26] The appellant submits that the CBO exceeded his authority and jurisdiction in determining a legal question, ownership of Part One, when he refused to issue a building permit. I do not accept this submission. The CBO would have exceeded his authority and jurisdiction if he had issued a building permit to a person who was not entitled to apply for it.
[27] Counsel for the applicant submitted that the Land Tiles Act protects the applicant’s claim to title for Part One. However, the application to the CBO occurred before the conversion to land titles. It follows that the application below was, and this appeal is properly determined on the basis of the state of the law as it was at the time of the initial application to the CBO. Therefore, I need not address this issue any further.
[28] I am satisfied that the judgment in appeal and the application judge’s reasons for judgment meet the standard of review in all respects.
The disposition of this appeal
[29] The application judge made it clear that she was unwilling to reward the applicant with a successful outcome to the application before her and order that she be issued a building permit that rested on the fraudulent scheme of the members of the Matwijow family. Accordingly, she dismissed the applicant’s application. She was entitled to make that disposition and there is no good reason why we should interfere with it.
Costs
[30] As agreed by the parties, the respondent is entitled to the costs of this appeal, fixed at $10,000 all-inclusive.
Matlow, J.
Aston, J.
Swinton, J.
RELEASED: April 30, 2013
CITATION: Matwijow v Pelham, 2013 ONSC 2079
DIVISIONAL COURT FILE NO.: DC-12 -00000373-0000
DATE: 20130430
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MATLOW, ASTON, and SWINTON, JJ.
B E T W E E N:
ISABEL MATWIJOW
Applicant (Appellant in Appeal)
- and –
THE CORPORATION OF THE TOWN OF PELHAM and THE REGIONAL MUNICIPALITY OF NIAGARA
Respondent (Respondent in Appeal)
REASONS FOR JUDGMENT
MATLOW J.
RELEASED: 20130430