CITATION: Gale’s Gas Bars Limited v. Minister of Transportation, 2015 ONSC 4158
DIVISIONAL COURT FILE NO.: 14-DC-595-JR
DATE: 20150827
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DiTomaso, Harvison Young, and Ellies JJ.
BETWEEN:
GALE’S GAS BARS LIMITED
Applicant
– and –
MINISTER OF TRANSPORTATION
Respondent
COUNSEL:
J. Broderick, Q.C. and Z. Saskin, for the Applicant
R. Lawson and S. MacHattie, for the Respondent
HEARD: June 3, 2015, at Hamilton
REASONS FOR DECISION
Harvison Young J.
[1] The applicant Gale’s Gas Bars Limited (“Gale’s”) owns a gas bar which it seeks to redevelop. To do so, it requires an access permit to Thorold Stone Road from the Ministry of Transportation (“MTO”), since that road is designated as a “controlled access highway” under the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50 [PTHIA]. The property is quite close to Queen Elizabeth Way, which creates certain transportation and road planning concerns. Gale’s seeks the following relief in this judicial review application:
(a) A declaration that the decision of Her Majesty the Queen in right of the Province of Ontario, represented by the Minister of Transportation for the Province of Ontario (Hereafter the “Ministry”), denying the Applicant’s application for a development permit unless the Applicant enters into an agreement for a development permit containing certain terms and conditions is unreasonable and without jurisdiction.
(b) A declaration that the Applicant is not required to enter into an agreement with the Ministry that contains the following provision:
The Owner agrees to register on the title to the Lands, a restriction in favour of the Ministry, which will provided that no Transfer or Charge of the Lands may be registered without the written consent of the Ministry, and that this restriction shall be registered so as to have first priority after the Deed granting title to the Lands to the owner.
Background
[2] The applicant has been planning to redevelop this property for a number of years and first discussed the prospect of obtaining site plan approval with ministry staff in 2008. MTO’s position since this time has been that there is a general requirement of a 14 metre setback from the property line. As applied to the development proposed by the applicant for a service station, car wash and convenience store, the car wash driveway, fire route, pumps and parking fell within the 14 metre setback. The record shows that there have been continuing discussions with MTO about this set back requirement since that time.
[3] In April, 2013 MTO indicated that it was considering offering some flexibility on this requirement in light of the fact that there were no plans to widen Thorold Stone Road in the near to medium term. The parties met to discuss this. Various proposals by both parties were discussed. As an alternative to the setback requirement, MTO indicated that it was prepared to consider allowing construction within the 14 metre setback provided that the applicant agreed to be solely responsible for the costs of removing and relocating all site amenities resulting from any future widening of Thorold Stone Road by MTO.
[4] According to MTO,
- In the rare cases where MTO has been prepared to consider relaxing the 14 metre setback requirement, the MTO’s practice has been to require the developer to enter into an agreement confirming that neither the developer nor any successors in title would be permitted to claim and damages from the need to relocate site amenities resulting from a future road widening
- As any agreement waiving any claims for damages resulting from the need to relocate site amenities would only bind the parties to the agreement (and not the developer’s successors in title), MTO has also required developers to register a Restriction on title to their lands in accordance with section 118 of the Land Titles Act, R.S.O 1990, c. L.5, by which MTO’s consent would be required for any mortgage or sale transactions of the developer’s lands. This would then permit MTO to enter into an agreement with the new owner waiving compensation in the event of a future road widening.
- MTO must have regard to immediate-term, medium-term and long-term considerations in exercising its traffic planning function. MTO is only prepared to consider relaxing the 14 metre setback requirement provided there are appropriate safeguards in place to ensure that future highway improvements are not compromised. (Affidavit of Hugh Fyffe, para. 33-35)
[5] It is clear from the record that the parties were actively negotiating and discussing options between roughly April 2013 and June 2014. While there may be some disagreement about the precise positions taken, it is clear there were various conceptual designs proposed and discussed by both parties and it is also clear that the parties were discussing the possibility of an agreement. The record also supports MTO’s position that the terms of the agreement propounded by MTO related directly to traffic planning requirements, which has been recognized as a general purpose of the PTHIA, and a basis upon which the discretion to refuse or grant permits must be issued: see Re: Multi-Malls Inc. et al and Minister of Transportation and Communications for Ontario et al.,1976 CarswellOnt 860 (Ont.C.A.). The applicant does not take issue with the right of MTO to negotiate or enter into such agreements, but rather argues that MTO did not have the right to force a party to enter into an agreement with it.
[6] By email dated April 18, 2014, MTO acknowledged receipt of a “concept plan” for the site showing the fire route and carwash driveway beyond the Controlled Access Designation Line. It advised that it would need a revised site plan, and also that MTO and Gales Gas Bar would need to execute a legal agreement, indicating that it was revising the draft agreement which would be sent to the applicant shortly. The record indicates that the applicant indicated that it would submit a revised site plan but has not done do.
[7] The MTO included the provision for the consent of MTO in the event that the property was sold or mortgaged. Counsel for the applicant asked for the deletion of this paragraph. MTO responded to counsel’s comments on the draft and advised that it was not prepared to delete that section. By email dated May 26, 2014, Mr. Fyffe on behalf of MTO sent the following email to the applicant’s counsel:
[o]ne essential condition for the issuance of a ministry permit is that “The Owner agrees to register on the title to the Lands, a restriction in favour of the Ministry, which will provide that no Transfer of Charge of the Lands may be registered without the written consent of the Ministry, and that this restriction shall be registered so as to have first priority after the Deed granting title to the Lands to the Owner” noted in clause 5 of the draft agreement. The ministry will continue to work with the owner once the above condition is satisfied, to resolve any remaining issue as part of the normal permit review process.
[8] On May 29, 2014, Mr. Broderick replied with the following email:
The sole remaining issue with respect to Gales’ application for an MTO access permit to Thorold Stone Road for its existing gasoline station, is the requirement by the Ministry that Gales enter into an agreement that provides:
“The Owner agrees to register on the title to the Lands, a restriction in favour of the Ministry, which will provide that no Transfer or Charge of the Lands may be registered without the written consent of the Ministry, and that this restriction shall be registered so as to have first priority after the Deed granting title to the Lands to the Owner”.
The applicant, Gales, does not recognize the MTO’s authority to require it to enter into any agreement that restricts its ownership rights as required by the MTO. Gales only alternative is an application for judicial review of the Ministry’s decision.
[9] The applicant submits that the MTO by this email was purporting to require it to enter into an agreement which it has no authority to do, and asks for a declaration to that effect.
[10] By email dated June 5, 2014, Mr. Fyffe wrote as follows to Mr. Broderick:
Please note that the clause mentioned in your email [of May 29,2014] is part of the draft agreement between MTO and Gales Gas Bar because the MTO in an effort to resolve the issues with the site plan, withdrew its normal requirement of a 14m setback from the designated corridor for all above and below ground structures on the site. Therefore, the options available to Gales Gas Bar are to enter into the agreement with MTO and register a restriction on title pursuant to section 118 of the Land Titles Act, or to remove entirely all above and below ground structures on the site from the 14 metre setback and to show this on a revised site plan.
[11] Gale’s also asks this court to delete the clause to which it objects from the contract. The respondent submits that it did not purport to require the applicant to enter into an agreement at all. Rather, its position is that this was an alternate route to satisfy the MTO concerns about future road widening possibilities that are reflected in the usual setback requirements. The applicant could decide to abide by the setback requirements.
[12] For the following reasons, the application must fail. First, the application is made on two false premises. The relief requested in paragraph (a) assumes that MTO has refused to grant the permit unless the applicant enters into the agreement. Paragraph (b) rests on the false premise that MTO requires the applicant to enter into an agreement. Second, the application is premature and I am not satisfied that the MTO has exercised a statutory power of decision, as required pursuant to s.2(2) of the Judicial Review Procedure Act, R.S.O. 1990, Chap. J.1 before declaratory relief is available.
Does the MTO purport to require the applicant to enter into the impugned agreement?
[13] I do not agree that in the circumstances of this case, the MTO purports to require the applicant to enter into any agreement at all.
[14] It is clear from the undisputed evidence filed on the application that MTO indicated that it would be prepared to consider relaxing the setback requirements if the parties could reach an agreement that would address its concerns as set out above. The agreement was not concluded although it does appear that the parties had made great progress in that direction. Mr. Broderick on behalf of the applicant relies on the wording in the May 26, 2014 email to the effect that the impugned consent provision was “[o]ne essential condition for the issuance of a ministry permit” as evidence that the option of abiding by the setbacks was not an option. I disagree. This email was clearly written in the context of the recent discussions which had focused on an agreement as an alternative to the 14 meter setbacks. There is nothing in the record that suggests that it would no longer have been open to the applicant to file a site plan reflecting adherence to the usual site plan requirements. Indeed, the June 5, 2014 email from Mr. Fyffe to Mr. Broderick appears to indicate that that option remained open.
[15] In the circumstances of this case, the situation is that negotiations broke down. The applicant was not willing to agree to a term that MTO wanted to have in the agreement. I do not accept that MTO was attempting to compel the applicant to enter into an agreement and the record does not support such a conclusion.
[16] It is clear that abiding by the setbacks has never been an attractive option for the applicant but it has been, and appears to continue to be, an option nonetheless. In the course of oral argument, the applicant submitted that it was always clear that it would not agree to the setbacks and took the position that they are not valid and thus did not form a real alternative to entering into the agreement. The applicant also submitted that abiding by the setbacks could not be a meaningful choice because they are not valid to begin with. This is not an argument that was advanced before oral argument and does not assist the applicant for two reasons.
[17] First, from the outset the setbacks clearly formed the context for the negotiations relating to an alternative that would satisfy the MTO concerns about future road widening. Had there been no setback requirements, there would have been no need for the applicant to consider entering into an agreement.
[18] Second, the notice of application does not raise the issue of the validity of setback requirements, nor is this issue raised in the factum. It is not properly before this court. By raising the issue as it has in the course of the hearing of this application, the applicant is effectively mounting a collateral attack on the setback requirements which is not appropriate. That collateral attack issue pervades this application. If the applicant wished to challenge the setback requirements it could have challenged the initial decision that the earlier site plan would not be acceptable because of the site plan requirements. The applicant did not do that but chose instead to enter into these negotiations with MTO. If it files a revised site plan which is refused on the basis of the setback requirements, it could challenge the setback requirements. However, it has not done so and the applicant has not framed its application in terms of the setback requirements. Rather it has chosen to focus it on the terms of the agreement and the argument that MTO has no authority to “force” it into an agreement.
[19] In addition, the order sought by the applicant is problematic. In essence, it seeks (at para. to compel the MTO to enter into a contract to which it did not agree by inviting this court to rewrite the contract. That is not an appropriate role for this court.
Has there been an exercise of a statutory power of decision refusing the permit unless the applicant accepts the impugned provision?
[20] The respondent submits that the application is premature as the applicant has yet to deliver a proper site plan for MTO to review and MTO has not yet exercised a statutory power of decision by approving or not approving the application. I agree. Such an exercise is necessary before declaratory relief is available pursuant to s. 2(2) of the Judicial Review Procedure Act. It is clear from the record filed on this application that the MTO permits will not be issued prior to site plan approval by the City of Niagara and Niagara Region, which has not been done.
[21] By email dated April 15, 2014, MTO responded to the applicant’s revisions to the concept plan as follows:
Thanks for your email and attached ‘concept plan’ that shows the fire route and carwash driveway beyond the Controlled Access Designation Line. Please note that [for] the issuance of a MTO Building and Land Use for the redevelopment of the 7537 Thorold Stone Road property, the MTO will need to review and approve a revised site plan that has been approved by the City of Niagara Falls and Niagara Region. The MTO and Gales Gas Bar will also need to execute a legal agreement.
[22] It was, and is, open to the applicant to file a revised site plan, which may or may not adhere to the setback requirements, and submit it to the City of Niagara Falls and Niagara Region and then (assuming that it is approved), submit it to the MTO. The decision to approve or not approve at that point would constitute a statutory power of decision subject to judicial review. To this point, however, there has been no statutory power of decision exercised with respect to the application. There have been negotiations conducted with a view to the submission of a revised site plan. At this point, the most current site plan on record was filed in July 2012 (though apparently somewhat revised subsequently) which gave rise to the discussions between the MTO and the applicant as to the possibility of an agreement between the parties upon which basis the MTO would be prepared to relax the setback requirements as set out above. The applicant did not frame its application in terms of the setback requirements and a refusal to grant a permit on that basis. It framed it in terms of the agreement and its argument that MTO stated that an agreement was a condition of approval, which argument I reject for the reasons set out above. In short, the record makes it clear that the application for a permit has not been completed. The request for a declaration that rests on the premise (explicit in paragraph (a) of the prayer for relief) that the application for a permit has been refused which is not the case.
[23] The applicant did not address the issue of prematurity or whether there had been an exercise of a statutory power of decision to refuse a permit to the applicant on the basis of its refusal to agree to the provisions proposed by the applicant. In the course of oral submissions, the applicant pointed to the MTO email of May 26, 2014 as the purported exercise of a statutory power of decision in that MTO purported to impose an agreement on the applicant.
[24] I do not accept that this could be treated as a statutory power of decision in the circumstances of this case. No decision on the permit had been issued because the process of application had not been completed. It is clear on the record that this email related to the negotiations for an agreement with the applicant upon which basis MTO had indicated it would be prepared to relax the setback requirements. While the email might have been more clearly framed, it was always the case that the setback requirements formed the backdrop for the negotiations. The parties had been negotiating for roughly a year and had made some progress. It was clearly contemplated by MTO that the applicant was choosing to negotiate as an alternative to abiding by the setback requirements. This email could not reasonably have been read as a refusal to issue a permit unless this term was agreed to, regardless of what revised site plan was submitted and regardless of whether or not it complied with the setback requirements that had occasioned the discussions to begin with.
[25] In short, the applicant had not submitted a revised site plan, nor had it sought approval of the municipalities which was required before the MTO would issue a permit. It is clear from a review of the evidence filed on the application that the parties contemplated that the applicant would file a revised site plan. No decision on the application could be made before that, because until that point it would not be clear to MTO precisely what the applicant was seeking approval for. The applicant submitted that it was never prepared to accept the setbacks and that, in effect, it was being required to enter into an agreement on odious and illegal terms. I do not agree. The applicant could have agreed, and could still agree, to the setbacks.
Conclusion and Costs
[26] For the foregoing reasons, the application must fail. MTO sought costs in the range of $5,000 - $6,000. Costs are fixed in the amount of $5,500 inclusive payable by the applicant to the respondent.
DiTomaso J.
Harvison Young J.
Ellies J.
Released: August 27th, 2015
CITATION: Gale’s Gas Bars Limited v. Minister of Transportation, 2015 ONSC 4158
DIVISIONAL COURT FILE NO.: 14-DC-595-JR
DATE: 201508XX
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DiTomaso, Harvison Young, and Ellies JJ.
BETWEEN:
GALE’S GAS BARS LIMITED
Applicant
– and –
MINISTER OF TRANSPORTATION
Respondent
REASONS FOR JUDGMENT
Harvison Young J.
Released: