Court File and Parties

CITATION: 1515280 Ontario Limited v. City of Waterloo, 2016 ONSC 3492 COURT FILE NO.: DC-13-480JR DATE: 2016-05-30

SUPERIOR COURT OF JUSTICE – ONTARIO (Divisional Court)

BETWEEN: 1515280 Ontario Limited, Applicant

AND: City of Waterloo, Respondent

BEFORE: Mew and Myers JJ.

COUNSEL: Nathan Chang, (in person as agent for the Applicant, with leave) Michael A. van Bodegom, for the Respondent

HEARD: In Writing

COSTS ENDORSEMENT

[1] The Divisional Court (Matlow, Mew and Myers JJ.) heard this application for judicial review on 3 October 2014 at Hamilton. By an endorsement dated 5 February 2015 (reported at 2015 ONSC 856) the application for judicial review was dismissed. The parties were invited to make written submissions on costs.

[2] Costs submissions were made by the parties in accordance with the Court’s invitation. Regrettably, through an administrative oversight, these submissions were not forwarded to the Panel until 17 May 2016. Matlow J. retired from judicial service on 14 April 2015. The remaining members of the panel therefore have therefore proceeded with this determination of the issue of costs pursuant to s. 123(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[3] As with any exercise of the court’s discretion to award costs, we have taken into account the factors set out in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (as amended). Those factors are impressed with the overarching principles of proportionality (rule 1.04(1.1)) and the reasonable expectation of the unsuccessful party (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)).

[4] The application arose from the applicant’s concern that a city by-law requiring it to obtain a licence to carry on a residential rental business would require certain buildings owned by the applicant that contained residential units to become fully compliant with the most recent standards required by the Building Code, the Fire Code and the Electrical Safety Code. This was of great concern to the applicant because its buildings, while said to be compliant with currently applicable standards, would not be compliant with the most recent standards required for new builds.

[5] The application was dismissed because the Court was of the view that the applicant had misunderstood the by-law and, in particular, the definition of “Apartment Building” contained in that by-law. The Court also found that the applicant had misunderstood the effect of a statutory declaration required as part of the process of obtaining licenses to mean that its buildings would be required to comply with current standards under the Building Code, the Fire Code and the Electrical Safety Code.

[6] A review of the procedural history of this matter as well as the dealings between the parties discloses that there was a fundamental disconnect. Although the respondent City complains that proceedings were complicated and prolonged by the conduct of the applicant, we accept that the applicant acted in good faith. Furthermore, although the Court dismissed the application for judicial review, with more felicitous drafting of the by-law and better communication by the respondent with the applicant, the concerns raised by the applicant could have been more effectively allayed.

[7] The respondent seeks costs, on a partial indemnity scale in the sum of $12,500. The City claims that it can actually substantiate partial indemnity costs exceeding $25,000 (as set out in its Bill of Costs), having regard to costs incurred on a motion to strike from the affidavit of Nathan Chang as well as the application itself.

[8] The applicant argues that the motion to strike was unnecessary and was, in any event, ultimately resolved on consent. As the applicant’s representative, who is a lay person, stated in his costs submission, the applicant agreed to remove some sections from the affidavit and moved that narrative to the factum “not because it was required, but just to satisfy the City as it was not an issue worth fighting”.

[9] The applicant submits that any award of costs against it should be limited to $5,000.

[10] Although we have some sympathy for the applicant, it must accept some responsibility for the costs incurred by the City in a proceeding that was ultimately resolved wholly in the City’s favour. However, we are, as indicated already, of the view that the City and its representatives could have more effectively engaged the applicant in dialogue outside of the courtroom and, as we have already noted, could even (and should) have avoided the litigation altogether. The applicant wanted a binding statement that his buildings were grandfathered and that signing the required statutory declaration would not subject it and its old buildings to a new and expensive regulatory regime. The applicant effectively obtained this result in the Court’s decision, although it did not obtain the formal relief it sought. Why could the City Solicitor or the City Clerk not write to the applicant and assure it, on behalf of the City, that by signing the new statutory declaration, it was not losing its grandfathering? The City should have been able to find a practical way to satisfy the applicant’s concern rather than allowing technical risk aversion to prevent an obvious, practical outcome.

[11] Having regard to all of the circumstances, and in particular the principles governing our discretion, we order that the applicant should pay the respondent’s costs of the application, including the motion to strike, fixed in the all-inclusive amount of $5,000.

Mew J.

Myers J.

Date: 30 May 2016