Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: December 09, 2022

CASE NO(S).: OLT-22-002357 (Formerly LC060020, LC060021)

PROCEEDING COMMENCED UNDER subsection 26(b) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended

Claimant: Ilana Gemeiner and Judith Gemeiner

Respondent: City of Toronto

Subject: Land Compensation

Property Address/ Description: 35-49 Bales Ave Blk A Plan 2090

Municipality: City of Toronto

OLT Case No.: OLT-22-002357

Legacy Case No.: LC060020

OLT Lead Case No.: OLT-22-002357

Legacy Lead File No.: LC060021

OLT File No.: OLT-22-002357

Legacy File No.: LC060021

OLT Case Name: Gemeiner v. Toronto (City)

Heard: September 20, 2022 by Video Hearing (“VH”)

APPEARANCES:

Parties	Counsel
City of Toronto and Toronto Transit Commission (“City”)	M. Longo
Ilana Gemeiner, Judith Gemeiner, Y. Erez Architect Inc. and 1314193 Ontario Limited	J. Beitchman, D. Cohen

DECISION DELIVERED BY WILLIAM R. MIDDLETON AND ORDER OF THE TRIBUNAL

INTRODUCTION

1The VH concerned a motion brought by the City to dismiss the Claimants’ Notice of Arbitration filed before the Tribunal’s predecessor, the Ontario Municipal Board (“OMB”), on March 9, 2006 (“Claim”). The Claim seeks compensation under subsection 26(b) of the Expropriations Act, R.S.O. 1990, c. E.26 (“EA”) arising out of the expropriation by the City in 1997 (“Expropriation”) of the Plaintiff’s leasehold interest in relation to the property municipally known as 35-49 Bales Avenue Block A Plan 2090 in the City (“Property”).

2In the Claim, the Claimants seek compensation for the market value of their interests in the Property beyond the compensation already received from the City, asserting pre-expropriation damages and disturbance damages.

Part One: Introduction and Background

3The materials before the Ontario Land Tribunal (“OLT” or “Tribunal”) were:

(a) Motion Record, including Factum, of the City dated May 9, 2022, comprising 313 pages;

(b) Responding Motion Record of the Claimants, dated June 6, 2022, comprising 175 pages;

(c) Responding Factum of the Claimants, dated August 10, 2022, comprising 31 pages;

(d) City’s Book of Authorities, comprising 175 pages; and

(e) Claimants’ Book of Authorities, comprising 163 pages.

4In its Notice of Motion, the City alleges:

(a) The Claimants have delayed in advancing their claim in this matter for 21 years. That delay has prejudiced the City's ability to adequately respond to their claims, which are premised on speculation regarding the intent of City officials and will rely on the recollections of persons involved in the expropriation and the Claimants' planning application. The Claimants’ delay has undermined the potential to have a fair and just hearing to determine the appropriate compensation for the temporary leasehold interest that the City expropriated and paid for in 1997;

(b) The Claim relies on allegations that nefarious purposes motivated North York's planning studies to update its Official Plan for the South Downtown, with the Claimants suggesting that the area wide planning amendments were intended to suppress the land value of the Site. The City submits none of these allegations are supported by the documentary record;

(c) On January 30, 2007 the City of Toronto, assuming the defence from Metro Toronto following amalgamation, filed its Reply. In brief, the City asserts the compensation paid to the Claimants reflected the market value of the temporary taking was sufficient. It further pleads that all other elements of the Claim relate exclusively to the Claimants' attempts to obtain approvals from the City of North York to increase the development potential of the Subject Property and are unrelated to the Sheppard Subway project for which the expropriation occurred;

(d) Despite the Claim being filed with the OMB in 2006 the Claimants have not provided an appraisal or any other documents to support the valuation or damages claimed in the Claim. The parties have not conducted discoveries of parties or their representatives. The City provided its Affidavit of Documents to the Claimants in 2013, and then a final version in 2016. The Claimants provided an Affidavit of Documents on April 15, 2022 under direction from the Tribunal. The City is currently reviewing the sufficiency of this disclosure;

(e) The Tribunal has issued three notices to the Claimants that their Claim would be closed due to inactivity unless a satisfactory update was provided. Beginning in 2011 the City wrote numerous letters to the Claimants and their counsel attempting to set procedural steps towards a hearing of the Claim. Between 2011 and 2016 the City repeatedly sent to the Claimants requests to proceed, draft procedural orders, and ultimately asserting that a request would be made to the Tribunal to dismiss the Claim;

(f) In 2009 the Claimants filed a claim in the Superior Court (Court File No. CV-09-379577) arising from the same events that ground their claim for business loss. The Court filings include claims of misfeasance in public office and interference with economic relations. In its defence filed with the Court, the City takes the position that the civil claim is entirely without merit. It continues to be the City's position that the civil claim is frivolous, an abuse of process, and without merit;

(g) On November 3, 2015 the Superior Court issued an order staying the civil proceedings and directing that these expropriation proceedings were to proceed in advance of the civil claim. The Court ordered the parties to agree in the expropriation proceedings, within 45 days of its order, to a timetable for exchange of documents and attendance for discoveries. Upon failure to do so the parties were permitted to seek an imposition of a timetable by the Tribunal or any other order the Tribunal deemed appropriate; and

(h) The City delivered a draft procedural order to the Claimants in a series of letters beginning December 22, 2015, which were served via process server, as a final attempt to introduce some momentum to the Tribunal process. The letter included the City's final Affidavit of Documents, a demand for disclosure of the Claimants' documents, and ultimately a statement that if a response was not received the City would request the Tribunal close its file due to inactivity. No response was received and there was no communication to either the City or the Tribunal during the period 2016 to 2020;

5In its Response to the Motion, the Claimants allege:

(a) Mr. Chris Tzekas represented the Claimants from 2006 until 2014. The Claimants were then unrepresented until 2020, when they retained Mr. Jason Beitchman of Rayman Beitchman LLP as counsel;

(b) The Claimants commenced a civil claim in 2009 regarding the City’s actions related to the Property. That claim, which overlapped with the claim in this proceeding but which included broader tort claims, was initially the primary focus of the Claimants’ efforts in seeking redress for the City’s actions. It occupied substantial time and resources before ultimately being stayed in 2015;

(c) Rayman Beitchman was retained to represent the Claimants in 2020 – ending the Claimants’ long period of self-representation. Shortly after being retained they contacted counsel for the Respondent (Mr. Brendan O’Callaghan) to discuss the procedural advancement of the claim. Both parties agreed to move the production and discovery process forward, and to collect their respective documents for that purpose;

(d) Throughout 2020 and into 2021, the City indicated that it was experiencing challenges locating and compiling its documents for production in these proceedings. The Claimants were nevertheless anxious to proceed and so continually followed up with the Respondent and sought commitments to procedural timelines for the exchange of documents and the conduct of examinations for discovery. This included preparation of draft procedural orders for review and comment;

(e) The City’s counsel (Mr. O’Callaghan) continued to demure as to the date for delivery of its documents, as it related that it was experiencing challenges compiling them. The City refused to agree to a procedural order until productions and discoveries were completed. The Claimants proposed dates for these steps and followed up repeatedly with the City. They received no substantive response, other than that more time was necessary to locate and compile relevant documents for production;

(f) Finally, in an effort to move the matter forward, the Claimants wrote to the Tribunal (with the consent of the Respondent) on October 29th, 2021 to request a case management conference to address procedural matters. On January 10th, 2022 the Tribunal provided a notice of case management conference to occur on March 30th, 2022. In the meantime, the Claimants continued to follow-up with the Respondent about the status of its productions. Counsel for the Respondent repeatedly advised that difficulties were occurring in the compilation of the required productions. These included difficulties arising from a “data breach” that it had experienced;

(g) On January 30th, 2022, in response to an attempt to follow-up on the status of productions, the Claimants suddenly learned that Mr. O’Callaghan was no longer employed by the City. They subsequently learned that new counsel, Mr. Matthew Longo, had been assigned to represent the Respondent on the file. On February 1st, 2022 Mr. Longo advised the Claimants (for the first time during Rayman Beitchman’s retainer) that the City had previously compiled and served its affidavit of documents in 2016. This service would have occurred at a time when the Claimants were self-represented. Mr. Longo provided a copy of the Respondent’s productions on February 10, 2022;

(h) This came as a surprise to counsel for the Claimants. They had been advised, repeatedly, by previous counsel for the City that it was experiencing challenges and delays in compiling its productions. No mention had ever been made of an existing affidavit of documents. At the same time as it notified the Claimants of the existing affidavit of documents, the City’s new counsel also indicated that it had experienced “prejudice” due to what it called the “significant delay” in the proceedings;

(i) The City subsequently confirmed in March 2022 that it would be proceeding with a motion to dismiss the claim for delay. The parties jointly wrote to the Tribunal on March 28, 2022 to advise that the City would be seeking a date to have its motion heard, and the Claimants would be seeking the imposition of a procedural order, at the case management conference on March 30th, 2022;

(j) Counsel for the parties attended before the Tribunal on March 30th, 2022. By agreement a date for service of the Claimants affidavit of documents was set for April 15th, 2022, and the hearing of the City’s motion was booked for May 30th.

(k) The service of the Claimants affidavit of documents was not, as claimed by the City, under the “direction” of the Tribunal. It was agreed upon by the parties and reflected in the endorsement arising from the March 30th case management conference. No “direction” was necessary. As had been agreed during the case management conference, the Claimants served their Affidavit of Documents on April 14th, 2022;

(l) The City bears at least an equal share of the responsibility for any delay in these proceedings. It has been a party to the Claim and has been represented throughout. Despite its claims to the contrary, it has done little to advance the Claim. In fact, since Rayman Beitchman’s retainer the City has actively delayed this matter through its own conduct. Beginning in 2009 much of the focus as between the parties was on the parallel civil claim. Despite that focus, until withdrawing from the file in 2014 prior counsel did work co-operatively with the City to move the matter forward. There was no obstructionism or active delay on the part of the Claimants or its counsel;

(m) Upon former counsel’s withdrawal in 2014, the Claimants were self-represented in these proceedings. They are not lawyers. They have no legal experience. Unresponsiveness during their period of self-representation must be viewed through this lens;

(n) Contrary to the City’s claim, there has been no “resistance” to its efforts to move the matter forward. Non-responsiveness to intermittent communication during a period of self-representation, perhaps. But any efforts to move the proceedings forward on the part of the City were extremely limited, at best. There were long periods of inaction by both parties to this proceeding. During those periods the Claimants were without the assistance of counsel. It was incumbent upon the City to make efforts to move this matter forward, if it wished, during this period. As it did not do so, it should not be permitted to deprive the Claimants of their opportunity to have an otherwise meritorious claim adjudicated on its merits;

(o) In 2015 the civil claim was stayed. The order staying that proceeding directed the parties to resolve a timetable for productions or discoveries within 45 days. If they could not do so, either party could seek imposition of such a timetable unilaterally from the Tribunal. The City apparently delivered a draft procedural order to the Claimants sometime in December 2015, but apart from that, there appear to have been no further efforts by the City to follow up on the matter. At no time did it take any action to impose a timetable or otherwise seek direction from the Tribunal about moving the matter forward;

(p) The City then served its Affidavit of Documents in 2016. Included with the documents was a demand for the Claimants productions, as well as a threat to seek closure of the file due to inactivity. The Claimants did not understand the documents they received from the Respondent at this time. They were self-represented and had no assistance to explain what consequences would, or could, flow from the actions taken by the Respondent. After serving its affidavit of documents, the City then sat on its hands and did nothing further until 2020;

(q) Once the Claimants retained new counsel in 2020 and reached out to the City to move things forward, it made no issue of any delay. Counsel for the Claimants proposed a timetable early in their retainer for the procedural steps needed to bring this claim to a hearing. Had that timetable been agreed upon and issued, by the time of this motion the discovery process would have been completed and the matter well on its way toward a hearing. Attempts by the Claimants to agree upon dates for the completion of discoveries were met with continual excuses; delay; and non-responsiveness;

(r) This continued for nearly two years. It came as a great shock to the Claimants to learn in early 2022 that the City had served an affidavit of documents in 2016. This was not mentioned a single time during the preceding two-year period. To the contrary, the City had continually delayed matters because it was claiming difficulty locating and compiling its documents, despite the fact that those documents had already been provided several years earlier; and

(s) Upon receiving the City’s productions, the Claimants completed and served their own affidavit of documents in short order. Had they been provided with productions when they first reached out to the city it is reasonable to expect that they would have done so at that time. The delay in the interim is solely the fault of the City which should not benefit from it.

Part Two: The City’s Position Is Not Supported by the Applicable Jurisprudence

6There can be little doubt that the passage of time since the Expropriation and the commencement of the Claim is extraordinary. However, delay alone is not a basis for granting the City’s Motion to dismiss the Claim brought pursuant to section 9.1 of the Ontario Land Tribunal Act, S.O. 2021, Sched. 6. (“OTLA”). This is implicitly recognized by counsel in the following passages from the City’s submission in the City’s Factum:

Claimants have a significant, although admittedly not exclusive, obligation to advance their claim towards adjudication. In this case, the Claimants have either failed to undertake or knowingly obstructed incremental steps to bring this matter to the Tribunal for adjudication…

[emphasis added]

7The Tribunal agrees with the City’s counsel’s further submission that

The Tribunal is empowered by statute to decide and dispose of matters in accordance with the OLT Act, its Rules, and all other applicable statutes. This includes authority on matters incidental to the exercise of its powers conferred under any Act. Additionally, the Tribunal as an adjudicative tribunal has the inherent jurisdiction to dismiss claims because the action or inaction of a party before it.

8This was recognized by the Ontario Court of Appeal in Ticchiarelli v. Ticchiarelli, 2017 CarswellOnt 2, 2017 ONCA 1, 274 A.C.W.S. (3d) 525 ONCA 1 where Justice LaForme in making reference to other relevant jurisprudence stated:

…an order dismissing an action for delay will be justified where the delay is inordinate, inexcusable, and prejudicial to the defendants in that it gives rise to a substantial risk that a fair trial of the issues will not be possible.

[above emphasis added]

9Certainly, this Tribunal’s inherent power to control its proceedings is captured in section 9 of OTLA which states:

“Orders

9 (1) The Tribunal has authority to make orders or give directions as may be necessary or incidental to the exercise of the powers conferred on the Tribunal under this or any other Act.

Conditions

(3) The Tribunal may include in an order conditions that it considers fair in the circumstances, including a condition that the order comes into force at a future fixed time or on the performance of terms imposed by the Tribunal.”

9It is also of note that section 33 of the EA provides:

Interest

33 (1) Subject to subsection 25 (4), the owner of lands expropriated is entitled to be paid interest on the portion of the market value of the owner’s interest in the land and on the portion of any allowance for injurious affection to which the owner is entitled, outstanding from time to time, at the rate of 6 per cent a year calculated from the date the owner ceases to reside on or make productive use of the lands. R.S.O. 1990, c. E.26, s. 33 (1).

Variation of interest

(2) Subject to subsection (3), where the Tribunal is of the opinion that any delay in determining the compensation is attributable in whole or in part to the owner, it may refuse to allow the owner interest for the whole or any part of the time for otherwise be entitled to interest, or may allow interest at such rate less than 6 per cent a year as appears reasonable. 2017, c. 23, Sched. 5, s. 36.

Same

(4) The interest to which an owner is entitled under subsection (1) shall not be reduced for the reason only that the owner did not accept the offer made by the expropriating authority, although the compensation as finally determined is less than the offer. R.S.O. 1990, c. E.26, s. 33 (3).

Same

(5) Where the Tribunal is of the opinion that any delay in determining compensation is attributable in whole or in part to the expropriating authority to pay to the owner interest under subsection (1) exceeding 6 per cent a year but not exceeding 12 per cent a year. 2017, c. 23, Sched. 5, s. 36.

[above emphasis added]

10The City’s counsel argues that each of the component factors in the test noted in the Ticchiarelli case are present here. However, the Tribunal is not persuaded by this argument for the following reasons, some of which were pointed out by counsel for the Claimants in argument:

i. There is no uncontroverted evidence that the delay here was inordinate or inexcusable – in fact, the responding materials filed by the Claimants do offer explanations for the delay, particularly during the long period when the Claimants were admittedly unrepresented by counsel;

ii. Counsel for the City apparently did not seek to cross examine either the Claimants or the affiant whose affidavit was filed by the Claimants’ solicitors in response to the City’s Motion. In the absence of this, the Tribunal is left with unchallenged assertions of fact and arguments made by the Claimants’ current counsel in reliance thereon. Contrary to the suggestions made in oral argument by the City’s counsel, the Tribunal is unable to draw conclusions as to the reliability of those factual allegations or the alleged sophistication of the individual Claimants in weighing the cogency of these arguments;

iii. The position that the City has been unfairly prejudiced by the delay that has occurred is not, in the Tribunal’s view, borne out by the scant facts put forward in the Motion Record. While it may be true that delay in advancing a claim towards a hearing creates a presumption of prejudice simply due to the passage of time, the contentions of actual prejudice made in paragraphs 61 to 65 of the City’s Factum are replete with qualifications such as “may not have been retained”, “likely no longer able to be located” and “The City is currently undertaking a search to determine whether these records still exist”.

iv. The arguments as to the City’s potential prejudice relating to the possible reliability of witnesses’ memory and the possible unavailability of certain witnesses with relevant knowledge are generic in nature and seem to depend on support from various excerpts of observations made by Judges and Tribunal members in the cited jurisprudence. Moreover, there was no evidence tendered to demonstrate that the sole key witness identified by the City’s counsel – Mr. Dolan, its former Manager of Community Planning / Director of Planning – would not be available to testify, let alone any other former City employee described in the City’s Factum or supporting affidavit. In any event, as recognized by the City’s counsel, the Claimants will also suffer this type of prejudice and they, of course, bear the primary burden of establishing their right to compensation. In addition, the Member presiding at the merits hearing in this case will be best positioned to consider the relative reliability of witnesses’ testimony and whether the Claimants can meet their burden of proof – and whether adverse inferences might be drawn against the Claimants due to their delay in prosecuting the Claim; and

v. There is substantial evidence to support the argument by the Claimants’ counsel that much of the delay over the last 2 years and also portions of several years prior to 2020 was in fact due to scheduling difficulties within the City’s legal department as well as some apparent organizational issues therein. Moreover, during the long 4-year period when the Claimants were known to be unrepresented, the City made very few attempts to contact them and certainly took no efforts to expedite this case or to bring motion practice before the Tribunal to that end, or to dismiss the Claim, until this motion in 2022. Had the City wished to counter these contentions by the Claimants’ counsel, it could have considered seeking an affidavit from its former counsel but chose not to do so.

Part Three: Conclusions and Findings

11In conclusion, the Tribunal is of the view that the circumstances here do not justify the extraordinary remedy of outright dismissal sought by the City. Clearly, this will result in extreme prejudice to the Claimants who would then be deprived of their opportunity to present their Claim for compensation arising from the Expropriation, which is no ordinary civil right of action, as recognized by the Supreme Court of Canada in Toronto Area Transit Operating Authority v. Dell Holdings Ltd., 1997 CanLII 400 (SCC), [1997] 1 SCR 32:

“The expropriation of property is one of the ultimate exercises of governmental authority. To take all or part of a person's property constitutes a severe loss and a very significant interference with a citizen's private property rights. It follows that the power of an expropriating authority should be strictly construed in favour of those whose rights have been affected. This principle has been stressed by eminent writers and emphasized in decisions of this Court”

10The Tribunal does not find it necessary to review in detail in this Decision each proposed ‘period of delay’ described by both counsel for the Parties, but has considered all periods of delay in making its findings and conclusions set out in this Part 3.

11The Tribunal also notes that the issue of the delay that has occurred in this unusual case, and each Party’s responsibility for causing it, could well become relevant at the merits hearing in this proceeding when the presiding Member considers the applicability of section 33 of the EA in relation to the interest award even if the Claimants succeed. In other words, it is not a foregone conclusion that the Claimants, if successful, will be entitled to prejudgment interest for the full period since the commencement of the Claim, or at the typical interest rate.

12The Claimants’ counsel seeks the finalization of a Procedural Order for this case, but (for perhaps obvious reasons) there was no indication that there have been productive discussions with the City’s counsel about this. Moreover, the Tribunal is of the view that a further Case Management Conference ought to be sought by the Claimants’ counsel pursuant to Rule 26.17 of the OLT Rules of Practice and Procedure, as is Ordered in paragraph [13] below.

ORDERS

13The Tribunal Orders as follows:

(a) The Motion by the City of Toronto is dismissed;

(b) There shall be no costs payable by either Party in respect of the dismissal of the Motion;

(c) The Claimant shall deliver to the Tribunal a request for a Case Management Conference pursuant to Rule 26.17 of the OLT Rules of Practice and Procedure by no later than fourteen days following the issuance of this Decision; and

(d) The Claimant and the City shall have discussions forthwith regarding the scheduling of all further steps in this proceeding, including the final hearing date and shall deliver detailed written submissions to the Tribunal concerning such scheduling by no later than seven days prior to the date set for the Case Management Conference

“William R. Middleton”

WILLIAM R. MIDDLETON 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.