Shanae Management Inc. v. Kitchener (City), 2022 CanLII 122417

Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: December 19, 2022

CASE NO(S).: OLT-22-003309

PROCEEDING COMMENCED UNDER subsection 34(19) of the Planning Act, R.S.O. 1990, c. P. 13, as amended.

Appellant: Shanae Management Inc.

Applicant: Shannondale Developments

Subject: Zoning By-law

Reference Number: BL 2022-024

Property Address: 134 and 152 Shanley Street

Municipality/UT: Kitchener/Waterloo

OLT Case No: OLT-22-003309

OLT Lead Case No: OLT-22-003309

OLT Case Name : Shanae Management Inc v Kitchener (City)

PROCEEDING COMMENCED UNDER subsection 20 of the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6

Request by: Shannondale Developments

Request for: Request for an Order Awarding Costs

Costs sought against: Shanae Management Inc.

Heard: In writing

APPEARANCES:

Parties	Counsel
2701098 Ontario Inc. o/a Shannondale Developments	John Campion and Lauren Rakowski
Shanae Management Inc.	Conner Harris

DECISION DELIVERED BY S. BRAUN AND ORDER OF THE TRIBUNAL

BACKGROUND

1The following decision and Order arises out of a written motion for costs pursuant to Rule 23 of the Ontario Land Tribunal Rules of Practice and Procedure (“Rules”). The motion follows the Tribunal’s September 12, 2022 decision to dismiss an appeal by Shanae Management Inc. (“Shanae”) without a hearing.

2The City of Kitchener (“City”)¹ approved an Official Plan Amendment (“OPA”) and Zoning By-law Amendment (“ZBA”) to permit the development of an eight-storey residential building on the property located at 152 Shanley Street (“subject property”), which is owned by 2701098 Ontario Inc. o/a Shannondale Developments (”Shannondale”).

3Shanae did not appeal the OPA but did appeal the ZBA, raising concerns in relation to: increased height and density; compatibility; traffic; and environmental issues (specifically, the need for remediation of off-site contamination).

4For context, it is important to note that, prior to Shannondale’s purchase of the subject property it had been used for industrial purposes, resulting in on and off-site contamination requiring environmental remediation. The off-site contamination impacted a nearby property, which is owned by Shanae. Since 2007, the Ministry of the Environment, Conservation and Parks (“MECP”) has been involved and has issued a Certificate of Property Use (“CPU”) for the subject property as well as several Orders in relation to both on and off-site environmental contamination, including ordering that responsibility for off-site remediation thereof rests not with Shannondale, but with the previous owner of the subject property.

5The Tribunal’s decision to dismiss the appeal without a hearing was based largely on Shanae’s failure to appeal the OPA, which came into force in May 2022. As the content of the ZBA and the OPA addressed the same fundamental planning considerations, the Tribunal determined that it would not be able to find in favour of Shanae on the ZBA appeal without stepping out of conformity with the now amended and in-force Official Plan. The Tribunal also found that the remediation of existing off-site contamination was not an issue over which it had jurisdiction.

6For the reasons that follow, the Tribunal finds that an award of costs is not warranted in this case.

STATUTORY FRAMEWORK

7The Tribunal’s statutory authority to award costs can be found in s. 20 of the Ontario Land Tribunal Act² (“OLTA”) and s. 23 of the Rules, which are consistent with the Statutory Powers Procedure Act³ (“SPPA”). Section 20 of the OLTA states:

The Tribunal may, subject to any other Act, fix the costs of and incidental to any proceeding, and order a party to the proceeding to pay the costs in accordance with the rules.

8Rule 23.9 sets out the circumstances under which costs may be awarded, as well as a non-exhaustive and illustrative list of the type(s) of conduct which might attract such an award:

The Tribunal may only order costs against a party if the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or if the party has acted in bad faith. Clearly unreasonable, frivolous, vexatious and bad faith conduct can include, but is not limited to:

a) failing to attend a hearing event or failing to send a representative when properly given notice, without contacting the Tribunal;

b) failing to give notice without adequate explanation, lack of co-operation with other parties, during the proceedings, changing a position without notice to the parties, or introducing an issue or evidence not previously mentioned or included in a procedural order;

c) failing to act in a timely manner or failing to comply with a procedural order or direction of the Tribunal where the result is undue prejudice or delay;

d) a course of conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events;

e) failing to present evidence, continuing to deal with issues, asking questions or taking steps that the Tribunal has determined to be improper;

f) failing to make reasonable efforts to combine submissions with parties of similar interest;

g) acting disrespectfully or maligning the character of another party;

h) knowingly presenting false or misleading evidence; or

i) breaching a confidentiality requirement of mediation, settlement conference or of a decision of the Tribunal in a hearing on the merits.

The Tribunal is not bound to order costs when any of these examples occur as the Tribunal will consider the seriousness of the misconduct.

MOTION FOR COSTS

9The motion by Shannondale requests the following relief:

a) an Order requiring that Shanae pay costs of the motion to dismiss on a partial indemnity scale in the all-inclusive amount of $30,000.00; and

b) such further and other relief as the Tribunal may deem just.

10In support of the requested relief, Shannondale offers examples of what it asserts demonstrates unreasonable, frivolous, vexatious and bad faith conduct on the part of Shanae, which the Tribunal summarizes as follows:

a) launching and attempting to sustain an appeal which was recognizably devoid of merit that the Tribunal ultimately dismissed for want of a reasonable prospect of success;

b) failing to present any expert evidence in support of its appeal and to defend the motion to dismiss; and

c) bringing an appeal for the sole purpose of increasing costs and creating delay in order to leverage financial interests (to wit, compelling Shannondale to absorb costs associated with remediating off-site environmental contamination despite explicit knowledge that Shannondale did not cause and was not responsible for same).

11With respect to the motivations underlying the appeal specifically, Shannondale notes that during cross-examination, Shanae’s principal acknowledged the time and cost associated with a hearing would likely outweigh the delay and cost associated with remediating Shanae’s property, and admitted that his major concern was for environmental contamination on his property to be addressed.

RESPONSE TO THE MOTION

12In its response, Shanae requests the Tribunal dismiss the motion and make an order that no costs of this proceeding are payable by either party. It submits Shannondale has failed to demonstrate that Shanae engaged in a course of conduct justifying an award of costs. In the alternative, should costs be granted, Shanae pleads that the quantum of any award ought to be substantially reduced⁴, as the amount claimed by Shannondale is excessive and out of step with previous cases in which the Tribunal has seen fit to order costs.

13Shanae submits that Shannondale’s request for costs rests primarily on the success of its motion to dismiss the appeal without a hearing, which is not an appropriate basis for such an award, as it is a party’s unacceptable conduct, not the merits of the proceeding, which costs are intended to address.

14It is further submitted that there is no basis in the record to impugn Shanae’s conduct. Shanae denies allegations of improper motivation and notes, in any event, that the rationale behind an appeal does not fall within the circumstances justifying an award of costs. While it is acknowledged that expert evidence was not led at the motion to dismiss, Shanae notes it did, in fact, present evidence in support of its position and although such evidence did not persuade the Tribunal to allow the appeal to proceed to a full hearing, this again, is not an appropriate basis upon which to award costs.

15Finally, Shanae notes that, throughout the proceedings, the parties and their counsel worked co-operatively in accordance with the Rules and the matter proceeded in a timely and efficient manner.

ANALYSIS AND FINDINGS

16Costs are rarely awarded in Tribunal proceedings. They do not automatically follow success at a hearing, nor do they automatically follow a finding that there is no merit in an appeal. In order to attract such an award, the conduct of a party must be found to have been unreasonable, frivolous, vexatious or in bad faith and Rule 23.9 makes it clear that the Tribunal’s decision to award costs remains discretionary, even in circumstances where the conduct of a party is found to be so and falls within the list of examples provided.

17The accepted test for determining whether costs are warranted, as set out in Midland (Town) Zoning By-law 94-50 (1995), 32 O.M.B.R. 4, is whether a reasonable person, having looked at all the circumstances of the case would conclude that the conduct of a party was not fair such that the party should be obligated to another in some way for that kind of conduct.

18The foregoing test has not been met in this instance. The Tribunal was not persuaded that Shanae approached the proceedings with a lack of seriousness or that the sole purpose of launching and sustaining its appeal was to cause delay or obtain financial advantage. While some degree of delay and cost unavoidably result from the filing of any appeal, there is no evidence that Shanae sought to unduly delay and/or increase costs throughout these proceedings.

19Although Shanae was admittedly principally concerned with remediation of the environmental contamination of its property, an issue over which the Tribunal ultimately determined it had no jurisdiction, the Notice of Appeal nonetheless raised other focused land use planning grounds tied to specific provincial planning policies, which the Tribunal considered to be genuinely held concerns. As previously mentioned, the appeal was dismissed largely on the basis of Shanae’s failure to appeal the OPA. Had the OPA been appealed, the Tribunal may well have reached a different conclusion.

20While expert evidence was not led in support of its position on the motion to dismiss, conduct which might arguably be captured under Rule 23.9(e), as noted by the Tribunal on previous occasions, such evidence, while certainly helpful, is not mandatory and an appeal can be advanced without calling same. The Tribunal would note that neither party submitted any expert land use planning or environmental evidence in support of their respective positions on the motion and Shanae did express the intention to gather such evidence, proceeding on the (perhaps misguided) assumption that a Case Management Conference would be held, allowing it ample time to do so. In any case, a review of the record demonstrates that Shanae approached the proceedings with seriousness, as evidenced by its timely submission of detailed motion materials; participation in, and conducting of, cross examinations on Affidavits, and having counsel attend to argue the motion.

21Ultimately, even if Shanae’s conduct could be considered to have brushed up against any of the circumstances set out in Rule 23.9, based upon a review of the materials before it and reflection upon the totality of the circumstances and Shanae’s conduct throughout the proceedings, the Tribunal is of the view that such conduct falls well short of the high threshold required to attract an award of costs.

ORDER

22The Tribunal orders that the motion for costs by 2701098 Ontario Inc. o/a Shannondale Developments is dismissed.

23The Tribunal further orders that no costs of this motion are payable by either party to the other.

“S. Braun”

S. Braun

MEMBER

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.

Footnotes

1. 1The City, also a party to the proceedings, took no position on and did not participate in the hearing of the motion to dismiss and similarly, did not participate in this motion for costs.
2. 2S.O. 2021, c. 4, Sched. 6.
3. 3R.S.O. 1990, c. S. 22, as amended
4. 4Rule 23.10 specifies that the Tribunal may deny or grant the application for costs or award a different amount (emphasis added) and fix the costs of and incidential to the proceeding and direct payment be made by a certain date by order.