Severn River Development Corporation v. Severn (Township), 2021 CanLII 115324

Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: November 12, 2021

CASE NO(S).: DC200009

PROCEEDING COMMENCED UNDER subsection 22(1) of the Development Charges Act, S.O. 1997, c. 27, as amended

Appellant: Severn River Development Corporation

Subject: Development Charges By-law No. 2019-62

Municipality: Township of Severn

OLT Case No.: DC200009

OLT File No.: DC200009

OLT Case Name: Severn River Development Corporation v. Severn (Township)

Heard: August 5, 2021 by Video Hearing

APPEARANCES:

Parties	Counsel
Severn River Development Corporation (“Appellant”)	David White
Township of Severn (“Township”)	Edward Veldboom

DECISION DELIVERED BY DAVID L. LANTHIER AND ORDER OF THE TRIBUNAL

INTRODUCTION AND HEARING

1The Appellant filed a Complaint before the Township pursuant to s. 20(1) of the Development Charges Act (“DC Act”) with respect to the asserted overpayment of $35,579.32 in Development Charges (“DCs”). The Complaint also made reference to an amount payable, paid for legal expenses, invoiced to the Township of $7,189.14. Following the Decision of Township Council on March 5, 2020, granting a refund limited to $2,769.45, the Appellant appealed Council’s decision regarding the Complaint pursuant to s. 22(1) of the DC Act upon the various grounds set out in the Notice of Appeal.

2The Complaint and the Appeal relate to DCs that were calculated on a proposed 12-lot subdivision/condominium redevelopment (“Development”) on the identified site it owned, which would convert a former commercial tourist establishment to individual freehold lots with shared common elements.

3The Complaint and the Appeal followed an extended application process, proceedings before the former Ontario Municipal Board and Local Planning Appeal Tribunal and a history of the Appellant’s perceived difficulties with delays and inaction on the part of the Township staff, in relation to the clearing of conditions and all approvals relating to the Development as well as issues relating to the payment of the DCs. The issues now to be addressed by the Tribunal in this hearing, relative to the Appellant’s Notice of Appeal of the Decision of Township Council, were narrowed on the consent of the parties, as explained below.

4The evidence, on behalf of the corporate Appellant, was provided solely through the Appellant’s principal and controlling representative, Mr. Lee Nefsky. The only evidence provided by the Township was through Mr. Andrew Plunkett, the Director of Corporate Services/Treasurer for the Township, who was qualified by the Tribunal to provide expert opinion evidence, without objection from the Appellant, on the subject of municipal finance and accounting, in the application of property taxation legislation.

5The following eight items were made Exhibits to the hearing:

Exhibit	Document
1	Document Book of the Appellant containing 11 Tabs
2	Appellant’s Complaint Submission to Township Council identified as a PDF Document entitled “Oral-Written Submissions” (212 pages) - to replace Tab 8
3	Appellant Full Appeal Document (121 pages) – to replace Tab 10
4	CV and Acknowledgement of Expert’s Duty – Andrew Plunkett
5	Letter to the Township dated September 5, 2019
6	Spreadsheet entitled “2021 Balanced to Township $2,769.45”
7	The Checklist – Date June 29, 2015
8	Receipt and Cheque October 16, 2016

ISSUES IN THE HEARING AND THE POSITION OF THE PARTIES

6During the opening statements from counsel, it was proposed, on a consent basis, that the Tribunal determine only the specific issues relating to the validity of the Appellant’s Complaint and Appeal which would, if allowed, entitle it to a refund of a portion of the DCs paid under protest, as explained below. This would leave the quantification of the DCs and any amount due to the Appellant, if payable, to be dealt with at a second phase of the hearing. Counsel agreed that once the Tribunal provided its findings and Directions on the issue of entitlement, the calculation of the DCs due, credits, and any overpayment, would likely be calculable by the Parties without the further assistance of the Tribunal. If, however, the involvement of the Tribunal is necessary, to resolve any disagreement on the quantification, a further continuation of the hearing can be scheduled.

7The Appellant raised a number of grounds for the Appeal in the attachment to his Notice of Appeal dated May 19, 2020, primarily relating to allegations of bias on the part of Council, delays, obstacles and “roadblocks” on the part of the Township in the clearing of conditions and application processes following the prior approval of the proposed development. This, in turn, delayed the processing and payment of the DCs, and thus the Appellant’s objection to the application of increased DC rates at the later date of calculations.

8Counsel for the Appellant, in his opening, indicates that his client has resiled from this focus on the perceived delays and alleged behaviour on the part of Township Council and staff. The Appellant has instead refined the primary issue before the Tribunal to focus upon the status and circumstances of the payment of the DCs made by the Appellant in October 2016 and the existence of a s. 27(1) Agreement under the DC Act.

9The issue then is whether, pursuant to an agreement, the Appellant and the Township agreed that the Appellant would pay the entire amount of the DCs arising from the Development in 2016 “….before…it would otherwise be payable.” This would mean that the payment by the Appellant, on October 16, 2016, constituted prepayment in full of all calculated DCs upon the rates then in place under an Agreement. The Township’s position is that there was no such Agreement and this 2016 payment was only a partial advance payment paid for “hard services” before the calculation of the latter portion of DCs relating to “soft services” was actually triggered (upon the issuance of the Change of Use Permits for the Development) pursuant to the Township’s applicable Development Charge By-law(s) (“DCBL” or DCBLs”).

10Whether or not there was an Agreement determines whether the Township’s subsequent demand for additional monies in 2020 (referred to as a “top up” in a Township Report dated January 8, 2020) was lawful and appropriate.

11The Appellant submits that the payment on October 16, 2016 was paid pursuant to this agreement in 2016, and that is supported by:

(a) the provisions of the Township’s DCBL;

(b) a Subdivision Agreement signed by the parties that provided for an alternative time for payment; and,

(c) the chronology of events and communications between the Appellant and the Township.

The Appellant argues that the additional 2019 payment was not payable and was paid under protest and that it is entitled to the refund.

12The Township’s position is that there is no such evidence to support the Appellant’s contention that there was an agreement in place in 2016, whereby all DCs were payable then, before they were calculated and due under the DCBL. The Township contends that properly, under the DCBL and the DC Act, it calculated the DCs in two stages and the latter portion was only calculated and payable upon the triggering event in August 2019, which was when all approvals were finally in place and the Change of Use Permits for the Subject Property were issued.

13There is a further issue raised by the Appellant, which was not raised in the Notice of Appeal. The Appellant asserts that s. 29 of the DC Act provides for a process for the collection of a DC by an upper tier municipality and in this instance, those processes were not followed and no DC can be collected on behalf of the County. The Township submits that no such ground for the Appeal was raised in the Notice of Appeal and accordingly, this issue is not before the Tribunal. Alternatively, the Township asserts that the processes followed to add and collect the portion of the DC payable to the County was correct and valid.

BACKGROUND, CHRONOLOGY AND PERCEIVED DELAYS

14For the purposes of this Appeal, and the analysis of the evidence, the Tribunal finds that the following chronology of events represents some of the primary relevant occurrences in the factual evidentiary background to the determination of the issues:

October 24, 2014 – The Ontario Municipal Board (“OMB”) conducts a settlement hearing and approves a Draft Plan of Subdivision and Draft Plan of Common Elements Condominium Approval for the Development, which requires the Appellant to enter into an Agreement in connection with the proposed Development;

October 6, 2016 – The Township, as the final signatory, executes the Subdivision/Condominium Agreement with the Appellant to reflect the OMB Order of October 24, 2014 for the subject Development. Schedule “E” to that Agreement sets out terms for the payment of cash deposits and security.

October 16, 2016 – The Appellant provides a cheque, and receives a receipt from the Township for, the sum of $42,125.35.

October 25, 2018 – As a result of delays, asserted by the Appellant and issues raised by the Township, that subsequently arose relating to development within a Flood Plain and fire protection, the parties are eventually again before the Local Planning Appeal Tribunal (“LPAT”). As a resolution, the Parties jointly request modifications to the Conditions of Draft Plan of Subdivision and Draft Plan of Condominium Approvals. The LPAT approves the modifications on this date.

November 28, 2018 – The Parties execute an amending agreement to reflect the modifications approved by the LPAT, which was subsequently approved by the County.

March 13, 2019 – The final revised Plan of Subdivision, approved by the County of Simcoe is registered on title.

Early August, 2019 – The Appellant pays a further sum to the Township of $21,889.83. The payment is made under protest.

August 29, 2019 – The Plan of Common Elements Condominium is registered on title. On the same day, the Change of Use Permits are issued to the Appellant.

15The evidence in this hearing indicates that within the approximate five years that elapsed between the time of the original 2014 OMB decision, implementing Minutes of Settlement between the parties and the eventual registration of the Plans and the issuance of the Change of Use Permits in 2019, there was an ongoing “back and forth” that occurred. With the passage of time, the Appellant and the Township addressed various matters including the formalizing of the agreements, waste collection, engineering, fire services, the additional appeal before the Tribunal relating to the clearing and amendment of conditions, and other development issues arising in the various processes of issuing and implementing approvals for the Development.

16Despite the Appellant’s purported focus on the existence of a s. 27(1) Agreement as impacting the calculation of the DCs as the primary issue in the Appeal, much of Mr. Nefsky’s testimony was directed to the original grounds for the Complaint and the Appeal – the perceived non-responsive or ineffective action and inaction on the part of the Township’s staff and his ongoing frustrations and dissatisfaction with the progress of amending and clearing the conditions.

17While there was clearly some delay in the efficiencies of these various processes and proceedings, the Tribunal cannot conclude that there was any degree of unreasonable fault on the part of the Township with respect to such delays or an inordinate and unreasonable delayed time frame to process and implement the Development application. Ultimately, in the Tribunal’s view, Mr. Nefsky’s testimony, in this regard, is irrelevant to the determinations to be made by the Tribunal in this Appeal, but it does impact upon the Tribunal’s assessment of the reliability of some of Mr. Nefsky’s evidence on the issues, which are relevant.

ANALYSIS - THE COUNTY’S PORTION OF THE DEVELOPMENT CHARGE

18The Tribunal will first deal with the Appellant’s submission in the hearing that the County’s portion of the DC is non-collectible because of the failure of the County and the Township to comply with the DC Act.

19The Tribunal first notes, and agrees with the Township, that from a review of the Appellant’s Notice of Appeal, this ground of Appeal does not appear to have been properly raised in the Appellant’s pleading. If that is the case, the Tribunal cannot now receive and determine an entirely new ground for the Appeal and Complaint, and this issue is not properly before the Tribunal.

20If the Tribunal is incorrect in this determination, and this additional basis for appeal is properly before it, the Tribunal nevertheless finds that there has been no failure to comply with the DC Act and the Township was, and is, able to collect the County’s portion of the DCs.

21Section 29 of the DC Act provides as follows:

Upper-tier municipalities, development charges

29. If a development charge is imposed by an upper-tier municipality on a development in an area municipality, the following apply:

30. The treasurer of the upper-tier municipality shall certify to the treasurer of the area municipality that the charge has been imposed, the amount of the charge, the manner in which the charge is to be paid and when the charge is payable.

31. The treasurer of the area municipality shall collect the charge when it is payable and shall, unless otherwise agreed by the upper-tier municipality, pay the charge to the treasurer of the upper-tier municipality on or before the 25th day of the month following the month in which the charge is received by the area municipality.

32. If the charge is collected by the upper-tier municipality, the treasurer of the upper-tier municipality shall certify to the treasurer of the area municipality that the charge has been collected.

22The submission of the Appellant is that the wording of s. 29.1 requires the upper-tier municipality to certify the amount of the DCs individually determined, in each and every case where DCs are to be calculated and payable, and only then, when the specified amount due has been certified can the area municipality have the authority to collect the portion owing to the upper tier.

23The Tribunal does not agree. The Tribunal is of the view that the practical process of “certifying” that a development charge has been properly imposed by the County is accomplished when the County formally provides a copy of the County’s DCBL to the area municipality, certified in the normal course through the required processes of sealing by-laws and maintaining records under the Municipal Act, 2001.

24Simply, the actions of the upper-tier municipality of enacting a DCBL under the authority of the DC Act, and in compliance with all legislated practices, and certifying and delivering that DCBL to the area municipality, through ordinary processes, is sufficient to establish or “certify”: that DCs have been imposed; the amount of the DCs to be imposed; the manner in which the DCs are to be paid; and when the DCs are payable. The calculation of the DCs, in accordance with the County’s DCBL, need not be further “certified” by the upper tier each and every time that DCs are payable on a development, as practically, the area municipality is well able to do this armed with the accurate information listed in s. 29(1). Thereafter, in the event there is opposition to the calculated sum of the portion of the DCs paid to the upper tier municipality under s. 29.2, and 29.3, the DC Act sets out the complete Complaint and appeal procedure to which an owner has access.

25The Tribunal agrees with the Township that accepting the Appellant’s submission, that a case-by-case certification process is required to meet the requirements of s. 29.1, would create an unwieldly, cumbersome and unnecessarily complicated process that is not reasonably required under the framework of the legislation governing the calculation, payment, collection and distribution of DCs. Further, the legislation prescribes no regulations or forms for such “micro-certification” of each and every development charge arising in every development giving rise to the payment of DCs.

ANALYSIS – CALCULATING THE DEVELOPMENT CHARGES – THE EXISTENCE OF AN AGREEMENT UNDER s. 27(1) OF THE DEVELOPMENT CHARGES ACT

Change of Use Permits

26There is no dispute amongst the parties that despite the absence of specific reference to circumstances involving a change of use for an existing property or structure, it is accepted that where, as is the case here, no building permit is issued but rather, as a result of an application for development, there is a Change of Use Permit issued for an approved change of use of the building or structure, it is the issuance of that permit, rather than a building permit, that triggers the calculation, payment and collection of these DCs.

27With this point established, the DC Act and the DCBLs then provide for the timing of when the DCs are payable.

When Development Charges Are Payable – The Development Charges Act

28The relevant sections of the DC Act applicable to this Appeal, stipulate the timing of the calculation and payment of DCs.

29Section 26(1) of the DC Act provides firstly that, excepting three types of development (that are not applicable in this case), a development charge “is payable for a development upon a building permit being issued for the development unless the development charge by-law provides otherwise under subsection (2)”. It is noted that the legislation does not specifically indicate that the date of “calculation” is distinguishable from the date the DC is payable, and the plain meaning of the legislation is that the date the DCs are payable is the date that the DCs are calculated upon the then-prescribed rates.

30Section 26(2) then provides that a municipality may, in a DCBL, provide that a development charge for specific services relating to water supply, wastewater, stormwater drainage, a highway or electrical power for development, that requires approval of a plan of subdivision for which a subdivision agreement is entered into, be payable immediately upon the parties entering into the subdivision agreement.

31Section 26(3) provides that the timing of payments under s. 26(1) and (2) do not apply where there is an agreement under s. 27 of the DC Act. That section provides as follows:

Agreement, early or late payment

27 (1) A municipality may enter into an agreement with a person who is required to pay a development charge providing for all or any part of a development charge to be paid before or after it would otherwise be payable.

Amount of charge payable

(2) The total amount of a development charge payable under an agreement under this section is the amount of the development charge that would be determined under the by-law on the day specified in the agreement or, if no such day is specified, at the earlier of,

(a) the time the development charge or any part of it is payable under the agreement;

(b) the time the development charge would have been payable in the absence of the agreement.

When Development Charges Are Payable – The Township Development Charge By-law

32The Township’s DCBL, By-law No. 2019-62, implements the three alternative events set out in the DC Act, which determine when DCs are payable. The relevant sections of the DCBL relating to the timing of payment of DCs, at Tab 2 of Exhibit 1, are as follows (emphasis added):

3.13 Development charges imposed under this By-law for fire, library, outdoor recreation, administration – studies – essential services and administration – studies – community based services, are calculated, payable, and collected upon issuance of a building permit for the development; the Development Charges for services to a highway, water and wastewater, are calculated, payable, and collected at time of subdivision agreement with respect to each dwelling unit, building or structure.

3.14 Despite section 3.13, Council from time to time, and at any time, may enter into agreements providing for all or any part of a development charge to be paid before or after it would otherwise be payable with section 27 of the Act.

33The first primary trigger event, utilizing the option under s. 26(1) is provided for in the first part of s. 3.13 of the DCBL, which is the issuance of the building permit, or a Change of Use permit in circumstances where no building permit issues.

34A second trigger event is the execution of a subdivision agreement under s. 26(2), which is provided for in the second part of s. 3.13 of the DCBL. Where there is a subdivision agreement, any DCs for water, wastewater, or highway services are to be calculated, payable and collected when the parties enter into that subdivision agreement.

35Finally, the DCBL provides that, alternatively, a specific agreement can be entered into between the owner and the Township providing for earlier or later payment under s. 27(1). This is provided for in s. 3.14 of the DCBL.

When Development Charges Are Payable – The County and School Board Development Charges By-laws

36The County’s DCBL provides that its DCs are calculated and payable on the date that the first building permit is issued.

37Under their respective DCBLs, DCs are payable to each of the Simcoe County District School Board and the Simcoe Muskoka Catholic District School Board (collectively “the School Boards”) to the Township, on their behalf, on the date that the building permit is issued.

Analysis - When were the Development Charges Calculated and Payable by the Appellant?

38The Township has sufficiently established to the Tribunal that under the legislative and DCBL framework, in the absence of an agreement under s. 27(1), on the facts of this case there was a two-stage process for the Appellant’s payment of the Township’s DCs because there was a subdivision agreement giving rise to the obligation to pay a portion of the DCs “at the time of subdivision agreement”.

39Unless an agreement existed to provide for earlier or later payment, the Tribunal concludes that these DCs relating to services for a highway, water and wastewater, which Mr. Plunkett referred to as “hard costs” were, on the evidence, first to be calculated, payable, and collected at the time of the subdivision agreement in October of 2016, upon the then established rates under the in-force DCBL.

40In accordance with the DC Act and the DCBL, the Tribunal finds also that, again, in the absence of an agreement for earlier or later payment, the balance of the DCs were to be calculated, payable and collected upon the issuance of the Change of Use permits. This event triggered the calculation, payment and collection of the balance of the Township’s DCs relating to such things as fire services, library, outdoor recreation and other administration essential services – which Mr. Plunkett referred to as “soft costs”.

41The County and School Boards’ DCs were also clearly to be calculated and payable upon the issuance of the Permits under their respective DCBLs. The evidence before the Tribunal, absent a s. 27(1) Agreement, is that the second portion of the DCs to the Township, and the payment of the DCs to the County and the School Boards were accordingly payable in August of 2019.

42Upon the evidence presented, based on the DC Act and the DCBL, unless the Tribunal can find that an agreement was reached between the Appellant and the Township that the DCs owing for the Development would be paid early and calculated upon the rates in 2016, it must conclude that the DCs owing by the Appellant were properly calculated and payable in two stages in the manner indicated above.

43For the reasons that follow the Tribunal is unable to determine, on the evidence, that any such agreement between the parties existed pursuant to s. 27(1) of the DC Act or the DCBL, such that the Appellant was entitled to pay all DCs at an earlier date than was necessary, and using the 2016 rates for calculation. The Tribunal must accordingly find that the two-stage calculation of DCs, as submitted by the Township, remains the correct and applicable process.

Was There an Agreement pursuant to s. 27(1) of the Development Charges Act?

44With precision, the determination to be made under s. 27(1) of the DC Act, and the corresponding s. 3.14 of the DCBL, is whether the Township entered into an agreement with the Appellant, who was required to pay DCs for the Development, which provided for all, or any part of, the DCs “…to be paid before or after they would otherwise be payable”.

45As indicated above, the Appellant and the Township entered into a Subdivision/Condominium Agreement dated August 12, 2016, which was finally signed by the Township on October 6, 2016. It is the Appellant’s position that Schedule “E” to that Agreement causes that Agreement to qualify as a s. 27(1) Agreement, which accords the Appellant the right to prepay all DCs at the rates in effect at that time.

46Within Schedule “E” to that Agreement, relating to Cash Deposits and Security, the parties agreed that (emphasis added):

SECTION C – DEVELOPMENT CHARGES

Payable prior to issuance of the Change of Use Permit for each Freehold Lot in accordance with the Municipality’s Development Charge By-law, or By-laws, the County Development Charge By-law and the Education Development Charge By-laws then in effect.

47There are two other sections of the Subdivision Agreement that then cross- reference Schedule E and refer to the DCs payable by the Appellant. They have not been referred to by the Appellant. The first is within Part 2, which sets out the numerous condition precedents to the execution of the Agreement by the Township. Section 3.1(d) provides:

3.1 Prior to the execution of this Agreement by the Municipality, the Developer shall:

(c) Cash Deposits, Development Charges & Security - have paid to the Municipality all cash deposits, development charges and security required by Schedule "E" attached;

48In Part 5 of the Agreement, “General Provisions” the Subdivision Agreement provides a further statement as to the obligations of the Appellant to pay the DCs referred to in Schedule “E”. It states:

11. CASH DEPOSITS DEVELOPMENT CHARGES AND SECURITY

11.1 The Developer shall lodge with the Municipality, those cash deposits, development charges and security more particularly described in Schedule "E", and at the dates specified therein.

49The Appellant submits that the Township’s evidence as to the proper chronology of payment of the DCs and the events that occurred, to support its position, is illogical and inconsistent with the whole of the evidence. The Appellant’s position is that the manner in which Mr. Nefsky, on behalf of the Appellant, attended to the Township and paid the first payment of $42,125.35 on October 16, 2016 (the date of the hand-written receipt provided by the Township, Exhibit 8) is consistent with the requirements of the Subdivision Agreement signed by the parties, which contemplated the payment of all DCs at once. The Appellant’s contention is that the 2016 Subdivision Agreement provided for accelerated payment of the “soft” service DCs, ordinarily due only at the time of the issuance of the Change of Use Permits, together with the “hard” service DCs payable at the time of the Subdivision Agreement under s. 3.13 of the DCBL. With respect to the payment of $42,125.35 in October of 2016, Mr. Nefsky testified: “I paid it based on an agreement”.

The “Unknown Document”

50This payment of $42,125.35 to the Township, which the Appellant asserts was a one-time all-inclusive payment of the DCs, revolves around an undated, single-page type-print document (Exhibit 1, Tab 5) about which, much is unknown. It can accordingly be referred to as the “Unknown Document”.

51The Unknown Document provides a series of breakdown calculations of the Township, County and School Boards’ DCs totalling $41,145.16. It also contains subsequent handwritten notations identified by Mr. Plunkett as being those of the Township accounts payable clerk, Lianne MacGibbon. Those handwritten notations are identified as likely ledger entry cross-references for various amounts. The handwritten notes also reference the cheque, number 218, provided by Mr. Nefsky for a different amount of $42,125.35 on October 16, 2016 – representing a difference of $19.81. The Unknown Document also shows a stamp indicating that the document was received by the Township on February 23, 2017, approximately four months after it, and the calculations contained therein, possibly formed the basis for the delivery of Mr. Nefsky’s cheque on October 16, 2016, if that is what occurred. That is far from certain.

52The Unknown Document raises a number of questions, which remain unanswered and unresolved on the whole of the evidence. First, neither Mr. Nefsky, nor Mr. Plunkett, can identify who prepared these calculations or the source data that was used to arrive at the total DC charges shown. Since the author of the Unknown Document has not testified, and it is therefore uncorroborated, there is no reliable evidence before the Tribunal to confirm that any of these DC calculations or source data in 2016, set out by the unknown author, are true and correct. Mr. Nefsky’s testimony on this Unknown Document was that: it was the Township that prepared it; the Township staff that stamped the page as received in February of 2017, but exactly why is unknown; and, he did not know exactly when he first came into possession of the Unknown Document.

53An email from Mr. Nefsky to the Township staff dated October 18, 2018 (Exhibit 2, page 195 of 212), was reviewed in his cross-examination. This email indicates that Mr. Nefsky had only then, in October, 2018, “just now found the Spreadsheet”, stamped as received on February 23, 2017, which had been improperly labeled by him. Mr. Nefsky, under cross-examination, confirmed what was stated in the email – that the information in the Unknown Document was “relied on to determine the Development Charges”.

54Also unexplained, is why the identified amount of “Total DC’s Payable” of $42,145.16 on the Unknown Document, acknowledged as received by the Township on February 23, 2017, does not match the sum paid by Mr. Nefsky, on behalf of the Appellant, and acknowledged as received by the Township on October 16, 2016. Rather, a cheque was provided to the Township for the lesser sum of $42,125.35. There is no persuasive explanation of how that different amount, as paid by the Appellant, was calculated. The Tribunal has difficulty understanding or accepting, as Mr. Nefsky suggests, that the use of a “rounding formula” by the Township Staff in their calculations (if that is who prepared the calculations) accounts for such a difference.

55Mr. Nefsky, on cross-examination, was asked how he could have relied on the calculated information of DCs in this undated document, prepared by an unknown person, stamped by the Township in February of 2017, and discovered by him in October of 2018, to write a cheque to the Township for a different amount on October 16, 2016. It is the view of the Tribunal that a number of Mr. Nefsky’s explanations as what occurred and why, were vague, confusing and not credible. The Tribunal generally found Mr. Nefsky’s evidence to be imprecise, disjointed, and, at times, contradictory. He testified that he had gone into the Township office in October of 2016 to make the payment, there were discussions about “the numbers” and the reason that their calculations were different from his, was that “they used a rounding formula”. He purported to “show them numbers”, sought confirmation that “you agree these are the numbers”, wrote a cheque, and was purportedly told “you pay that, we are good”. Though far from clear, Mr. Nefsky suggests that the Unknown Document stamped by the Township in February of 2017, was shown to him as evidencing “the Township’s numbers” which he relied upon then, and is entitled to rely on now.

56Mr. Plunkett was forthright in acknowledging that he unfortunately does not know who prepared the Unknown Document and that he has no reason to question Mr. Nefsky’s statement that he did not prepare it. Neither could Mr. Plunkett provide an explanation as to why the amount paid by Mr. Nefsky on October 16, 2016 was different from the total amount on the Unknown Document. Mr. Plunkett acknowledged that the document might have been an attempt to calculate all of the “hard and soft” DCs payable as of 2016 but only if they were consistent with the 2016 DC rates. He confirmed that the document was brought to his attention at the time it was stamped as received by the Township, and that Ms. MacGibbon had attempted to reconcile the numbers.

57To the extent that the Unknown Document is presented by the Appellant in this hearing to demonstrate that there was an agreement between the parties to calculate all of the DCs payable on the Development as of October of 2016, and that Mr. Nefsky was genuinely acting in accordance with this agreement to pay all DCs on a final basis – the Tribunal simply is unable to make such a conclusion. The Unknown Document is far from probative given the complete inability to identify the author, the date or the information in the document. Neither does the Unknown Document permit the Tribunal to assuredly conclude, in any way, that it represents a meeting of the minds as to the amount of DCs payable by the Appellant. The Tribunal does not find Mr. Nefsky’s evidence as to this document, or the described circumstances in which he purportedly was assured that the Township accepted such “numbers” on this document as full payment of the DCs under an agreement, to be credible.

58With respect to the other aspects of the Appellant’s assertions as to the purported agreement between it and the Township as to the alternative payment of the DCs, the Tribunal prefers Mr. Plunkett’s explanation of the processes that occurred, and the supporting background to the determination of the DCs as set out in the both the staff report to Council (Exhibit 1, Tab 7) and the Decision of Township Council (Exhibit 1, Tab 9). Upon all of the evidence, the Tribunal finds that the manner in which the Township dealt with the calculation and request for payment of the DCs for the Appellant’s Development was wholly in accordance with the DC Act and the DCBLs. The events and manner in which Mr. Nefsky interacted with Township staff are more consistent with the non-existence of a s. 27(1) Agreement, rather than the existence of such an agreement.

59In assessing the veracity of Mr. Nefsky’s recollection of events and communications with the Township, the Tribunal noted at least four references to the videotaping or filming of all conversations by cameras he alleges were located at the counters in the Township offices. Mr. Nefsky appeared to be validating the reliability of his recounting of conversations and events, to support his position, with the existence of such external filming of his attendances to the Township offices.

60When asked about the existence of such video surveillance of public interactions at the Township’s offices, the Tribunal found Mr. Plunkett’s evidence to be forthright when he indicated that although filming people at the Township offices was being considered for future council meetings, such recording was not occurring at the counters. There is no evidence from, or of, a video record to accord with Mr. Nefsky’s multiple references to such a means of verifying the reliability of his testimony.

61Only a minor part of Mr. Nefsky’s testimony directly related to the question of whether there was a s. 27(1) Agreement with the Township. Much of his testimony was devoted to explaining the original stated grounds for his Complaint and Appeal - that the Township staff had unreasonably, and in bad faith, unfairly delayed the processing of his applications and the clearing of conditions, and that Council was biased.

62Upon all of the evidence, Mr. Nefsky’s allegations of inaction, misrepresentation, delay, or lack of cooperation or bias on the part of Council, staff or the fire department were unsubstantiated. Generally, where an assessment of credibility is required in the review and analysis of the viva voce evidence in this hearing, the Tribunal considers the evidence of Mr. Plunkett to be the more reliable, forthright and even-handed in its presentation. Mr. Plunkett’s explanation of the processes that were followed, in first determining the hard service DCs, when the Subdivision Agreement was first signed, and then assessing the soft service DCs when the Change of Use Permits were issued, in the Tribunal’s view, is entirely consistent with the DCBL’s two-stage process for this Development. The chronology of events from the written record staff also negate, or do not support, the assertion that the Township had entered into a s. 27(1) Agreement when it had implemented the Subdivision Agreement for the purposes of approving the Appellant’s Development applications.

An Examination of, and Findings relating to, the Subdivision Agreement

63The Tribunal is also unable to conclude, from the examination of the Subdivision Agreement itself, that it constituted an agreement under s. 27(1), whereby the Township agreed to calculate and require early payment of all DCs, as an exception to the two-stage provisions of the DCBL requiring the initial payment of the hard service DCs and the later determination of soft service DCs when the Permits were issued.

64The Tribunal finds that the Subdivision Agreement was not an agreement under s. 27(1) of the DC Act or under s. 3.14 of the Township’s DCBL for the following reasons:

1. The Tribunal cannot find that Schedule “E” to the Subdivision Agreement represents an agreement of the parties to a one-time advance calculation of the DCs for the Development. While the Appellant places some emphasis on the wording that the DCs are payable “prior to the issuance of the Change of Use Permit”, the Tribunal considers the additional wording in this short paragraph to be of greater significance. That is, that the DCs are payable “in accordance with the Municipality’s Development Charge By-law”. The Tribunal does not view these two references as a contradiction, as the Appellant argues. The DCBL provides for a two-stage payment of the DCs and anticipates the later calculation of the second grouping of DCs, with those of the County and the School Boards, at the time of the Permit issuance. Ensuring that the final payment, or second stage-two payment of the balance of the DCs was remitted before the issuance of the Permits is, in the Tribunal’s view, reasonably interpreted, in the ordinary course, as an expression of a basic requirement in moving forward with the approval of the Development: “No Payment. No Permits”;

2. The additional sections of the Subdivision Agreement, s. 3.1 and 11.1, reinforce the expectation that the two-stage DC remittances were being directed, in compliance with the DCBL. Section 11.1 provides for the payment of the DCs described in Schedule “E” “at the dates specified therein”. There are no specific dates set out in the relevant section of Schedule “E” dealing with DCs, but, as noted, Schedule “E” does provide simply that payments are to be made ”in accordance with the Municipality’s Development Charge By-law”, which is, by reference, to be made in two installments at the points in time indicated: firstly, upon entering into the Subdivision Agreement; and secondly, upon the issuance of the Permits. The wording, when taken as a whole, in the context of the provisions of the Township’s DCBL, belies the existence of an agreement for only one full payment in 2016 and instead sets out the expectation that the additional “stage two” DCs would be payable at the time of the issuance of the Permits.

3. Section 3.1 requires that, as a condition to the execution of the Subdivision Agreement by the Township, that the Appellant will have paid all DCs “required by Schedule “E”. As noted, Schedule “E” requires payment in accordance with the Township’s DCBL. By this point in time, as a condition to the execution of the Subdivision Agreement, the Appellant was required only to pay an amount sufficient to cover those “stage one” DCs “calculated, payable, and collected at time of subdivision agreement” in accordance with s. 3.13.

4. Virtually no evidence has been presented, in the fairly substantial volume of communications between the Appellant and the Township, which would support the contention that any portion of the Subdivision Agreement was intended by the Township to provide that a part of the DCs were expressly to be paid before it would otherwise be payable upon issuance of the Permits, pursuant to s. 27(1) of the DC Act.

5. In the Tribunal’s view, there is nothing contained within the Subdivision Agreement, including Schedule “E” which, in plain and ordinary language, states that all of the DCs were to be paid in full at the time of the execution of the Subdivision Agreement and before the soft service DCs would otherwise be payable. From another perspective, simple and express language, utilizing the wording of s. 27(1) and/or referencing s. 27(1) of the DC Act, could easily have been utilized in the Subdivision Agreement if the Appellant was agreeing to pay, and the Township was agreeing to accept, a one-time, early, all-inclusive payment of all DCs, such that part of DCs were being paid “before they would otherwise be payable” upon issuance of the Permits. From the Tribunal’s perspective, the mirroring and use of such simple and exact wording within the section of the DC Act, within the terms of an agreement, would support the Appellant’s contention that the Subdivision Agreement was a s. 27(1) Agreement. The absence of such wording is not conclusive of the issue of whether the Subdivision Agreement was such an agreement, but it does not assist the Appellant’s submission that it was.

6. In the Tribunal’s view, to the contrary, the wording of the Subdivision Agreement discloses no agreement pursuant to s. 27(1) of the DC Act. The Tribunal can take some guidance from the simple and focused approach to the question of whether an agreement exists under s. 27(1), as utilized by Member Stefanko in the OMB decision of Brimar Homes Ltd. v. Lakeshore (Town), 2009 CarswellOnt 5548 (DC080012). Contrary to the submission of the Appellant’s counsel, the Tribunal does not find the facts of this case to be significantly distinguishable from those before the Board at that time, such that the basic principle should be ignored. To establish that an agreement exists, the party seeking to prove such, must demonstrate, as a fact, that there has been express acceptance of a proposed element of the agreement, such that a consensus between the parties as to that specific term of the agreement is proven. The silence of one party on the subject of that specific term can be instructive. In this case, there is virtually nothing to suggest that the Township accepted, as a term of the Subdivision Agreement, that it would accept a prepayment of the DCs, in October of 2016, that were not due until Permit issuance.

7. As with Brimar, the Tribunal accordingly finds that the evidence in this case, and the Subdivision Agreement itself, falls far short of establishing that the Subdivision Agreement between the Appellant and the Township was an agreement for the purposes of s. 27(1) of the DC Act.

The Reason for the October 2016 Payment

65The position of the Appellant is that there could be no other explanation for the gratuitous voluntary payment of the DCs in October, 2016, and the acceptance of that amount by the Township, unless it was pursuant to an agreement between the parties that all DCs, including the early prepayment of the DCs ordinarily deferred to the issuance of the Permits, had to be paid before the Township executed the Subdivision Agreement.

66The Tribunal is unable to conclude that the suggested scenario is the only plausible explanation, or the most likely, upon the evidence.

67In reviewing the Appellant’s Complaint and Appeal, and in listening carefully to Mr. Nefsky’s testimony, and his accounting of the chronology of events, it is the conclusion of the Tribunal that Mr. Nefsky’s intensely expressed frustrations and perceptions as to the bona fides of the Township, and its staff, in processing his Development application prompted a clearly expressed impatience with a process he believed to be unreasonably slow and obstructive. The evidence reveals that this led to Mr. Nefsky’s persistent course of action, not without reason, in trying to move things forward. Within his written submissions, Mr. Nefsky has indicated he was treated unfairly, something he described as “steps taken and not taken” by the Township that have “demonstrated unfairness” and putting up “roadblocks”.

68That there may have been delays and a lack of responsive action, at times, on the part of the Township is quite likely. But similarly, as the planning applications, and the litigation before the Board/Tribunal moved forward, it is the Tribunal’s conclusion that Mr. Nefsky’s impatience and frustrations led him to unilaterally make demands and initiate interactions and take steps with the Township staff. The Tribunal agrees with the Township’s submission that the October 2016 payment was paid of Mr. Nefsky’s own accord because he believed this would result in the clearing of conditions, the provision of a “clearance letter”, the registration of the subdivision agreement and the issuance of permits, which were being held up.

69In the Tribunal’s view, upon listening to the testimony of both witnesses, and in reviewing the evidentiary record, that one of Mr. Nefsky’s unilateral actions was the voluntary payment of the amount he believed, however calculated, was the full amount of the DCs payable to the Township. He did this in an effort to get things moving. As Mr. Plunkett indicated, the Township was not aware why Mr. Nefsky chose to pay the amount he did, and earlier than was due, but it, of course, accepted the payment. Notwithstanding the acceptance, the Township, however, correctly treated the October 2016 payment as a payment of the hard services DCs with any surplus to be applied as a unilateral advance of what would be due upon issuance of the permit. Mr. Nefsky’s voluntary payment did not relieve the Appellant’s obligation to provide full payment of the DCs calculated, in accordance with the two-stage process provided for in the DCBL.

70In summary, the Tribunal finds that the payment by the Appellant in October 2016, properly represented a timely payment to be credited towards the hard service DCs calculated as of 2016 and payable upon the execution of the Subdivision Agreement. Any surplus, if any, represented a pre-payment towards the amounts that would be calculated, payable and collected upon the issuance of the Permits. The payment occurred in the context of Mr. Nefsky’s desire to move the Development along its path faster than was occurring at the Township offices, and not because there was an agreement that this single payment covered all DCs.

The County and School Boards – Non-Parties to the Subdivision Agreement

71The Tribunal accepts the further submission of the Township and finds that the fact that the County and the two School Boards were not signatories to the Subdivision Agreement is further supportive of the fact that the document was not intended as a binding agreement under s. 27 of the DC Act.

72While a municipality will, as indicated, routinely undertake responsibility for the collection of DCs on behalf of a school board or upper tier authority, it would be exceptional and unreasonable to accept that the Township could, in this case, unilaterally agree to accelerate the payment of the County’s DCs and the School Boards’ DCs expressly contrary to their respective DCBLs, without the contractual acceptance of such an arrangement by the County and the School Boards. The fact that the County and School Boards were not signatories to the Subdivision Agreement serves to convince the Tribunal that it was not a binding agreement for the purposes of s. 27(1) of the DC Act.

73Neither is there any evidence before the Tribunal to establish that the County or the School Boards DCBLs provide for the use of s. 27 Agreement.

Summary of Findings

74The Tribunal accordingly concludes, upon all of the evidence, that there was, and is, no agreement between the parties that represents an agreement to calculate all DCs in October of 2016 at the DC rates then in effect. Mr. Nefsky did not, on behalf of the Appellant, have the ability to unilaterally alter the timing and method of calculating the DCs under the DBLS by prepaying amounts in the absence of an agreement.

75While there was, clearly, some confusion and uncertainty about the timing and calculation of the DCs in October 2016, as evidenced by the Unknown Document, the two-stage approach of the Township to calculating and requiring payment of the DCs is sound, correct upon the DC Act, consistent with the Subdivision Agreement and is, importantly, in accordance with the Township’s DCBL, as well as the DCBLs in effect for the County and the School Boards.

76As a result, the Tribunal finds that the calculation of the DCs at the time that the Subdivision Agreement was in place, based on the 2016 DC rates and the calculation and requirement for payment of the balance of the DCs as of the time of issuance of the Change of Use Permits, based on the 2019 DC rates, by the Township is correct.

77As the parties have agreed, based on these findings and determinations by the Tribunal, the parties will review and adjust the final calculations of the DCs payable to the Township, County and School Boards, and all appropriate Commercial Conversion Credits, or other credits or adjustments and determine, by agreement, the exact amount of any refund or amount owing without the further assistance of the Tribunal. Failing such an agreement within sixty days of the date of issuance of this Decision and Order, if the Parties require a determination of quantum by the Tribunal, they may request a continuation of the hearing of this Appeal.

ORDER FOR DIRECTIONS

78The Tribunal, upon the specific findings set out in paragraphs 67 to 70 of this Decision, provides the following Directions:

(1) no agreement existed pursuant to s. 27(1) of the Development Charges Act or s. 3.13 of the Township’s Development Charges By-law, for earlier payment of development charges before they would otherwise be payable and the Appellant is not able to rely upon the payment of $42,125.35 on October 16, 2016, based on development charge rates in effect in 2016, as an all-inclusive payment towards all development charges owing for the Development;

(2) in accordance with the Township’s Development Charge By-law, the development charges payable by the Appellant were to be calculated and paid in two stages;

(3) development charges payable under the Township’s Development Charges By-law, at the time of the Subdivision Agreement executed by the parties, were properly to be first calculated upon the development charge rates, for those services, that were in effect in 2016; and,

(4) development charges payable under the Township’s Development Charges By-law, at the time of the subsequent issuance of the Change of Use Permits were properly to be calculated at the development charge rates for those services that were in effect in 2019;

the Appeal of the Decision of Council for the Corporation of the Township of Severn dated March 5, 2020, on such matters relating to the Directions above, is dismissed, in part.

79The Appellant’s Appeal as to the portion of the Decision of Council for the Corporation of the Township of Severn dated March 5, 2020, which determined the quantum of the final adjusted and reconciled amount of development charges owing by the Appellant to the Township, the County and each of the Simcoe County District School Board and the Simcoe Muskoka Catholic District School Board, after taking into account all appropriate Commercial Conversion Credits, or other credits or adjustments, is not dismissed and is held in abeyance for a period of sixty (60) days from the date of issuance of this Decision and Order for Directions, upon the following additional Directions:

(a) In the event the parties, by agreement, agree to the quantum of the final adjusted and reconciled amount of development charges owing based upon the findings of the Tribunal and this Order, and to the amount of any refund or amount owing, without the further assistance of the Tribunal, counsel for the parties shall jointly advise the Tribunal, within that 60-day period, that no further hearing is required and shall request that a Final Order be issued that the balance of the Appeal as to quantum be dismissed or alternatively, shall request an order on consent, as to the quantum of the development charges calculated and payable by the Appellant.

(b) Alternatively, failing such agreement within sixty days of the date of issuance of this Decision and Order, if the Parties require a ruling from the Tribunal determining the quantum of the development charges, and reconciling the calculations, payments, credits and adjustments, counsel for the parties shall request a continuation of the hearing of that portion of the Appeal, which is not dismissed and the hearing shall be scheduled as soon thereafter as the Tribunal’s calendar, and the Panel Member’s schedule, will permit.

80The Panel Member remains seized with respect to the remaining portion of the Appeal that is not dismissed.

“David L. Lanthier”

DAVID L. LANTHIER

VICE-CHAIR

Ontario Land Tribunal

Website: olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.