Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: April 05, 2023

CASE NO(S).: OLT-21-001306 OLT-21-001498

PROCEEDING COMMENCED UNDER subsection 26(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended

Claimant: Hongs International Group Ltd. Respondent: Regional Municipality of York Subject: Determination of compensation Description: Newmarket and Bogart Creek Sewage Pumping Stations Property Address: 567 Davis Drive Municipality/UT: Newmarket/York OLT Case No.: OLT-21-001306 OLT Lead Case No.: OLT-21-001306 OLT Case Name: Hongs International Group Ltd. v. York (Regional Municipality)

PROCEEDING COMMENCED UNDER subsection 26(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended

Claimant: York Professionals Inc. Respondent: Regional Municipality of York Subject: Determination of compensation Description: Newmarket and Bogart Creek Sewage Pumping Stations Property Address: 567 Davis Drive (567 Davis Drive) Municipality/UT: Newmarket/York OLT Case No: OLT-21-001498 OLT Lead Case No.: OLT-21-001498 OLT Case Name: York Professionals Inc. v. York (Regional Municipality)

PROCEEDING COMMENCED UNDER subsection 9(1) of the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6

Request by: Hongs International Group Ltd. & York Professionals Inc. Request for: Request for Directions Heard: February 08, 2023

APPEARANCES:

Parties	Counsel
The Regional Municipality of York (Respondent/Moving Party)	Michael Grant, Conner Harris
York Professionals Inc. (Claimant/Responding Party)	Leah Cummings
Hongs International Group Ltd. (Claimant/Responding Party)	David Fenicky

DECISION DELIVERED BY ROBERT G. ACKERMAN AND ORDER OF THE TRIBUNAL

1On June 20, 2018, the Regional Municipality of York (the “Region”) caused a Plan of Expropriation to be registered in the Land Registry Office for the Land Titles Division, at Newmarket, which had the effect of taking permanent and temporary easements over, under and upon the property municipally known as 567 Davis Drive, Newmarket (the “Subject Property”). The takings were acquired as part of the York-Durham Sewage System Modifications component of the Upper York Sewage Solutions Project.

2The Owner of the Subject Property is the Claimant in file OLT-21-001306, Hongs International Group Ltd. (“Hongs”). The Subject Property is improved with a single-storey commercial building and a commercial parking lot. The building is tenanted by a marketing agency and an automotive repair shop. The surface parking lot is tenanted by a commercial parking lot operator, which is the Claimant in file OLT-21-001498, York Professionals Inc. (“York Professionals”). By virtue of Section 1(1) of the Expropriations Act, RSO 1990, c. E-26 (“Act”), York Professionals is deemed to be an Owner of the Subject Property.

3The claims advanced by Hongs in its Notice of Arbitration and Statement of Claim may be summarized as seeking payment for the Market Value of the permanent and temporary limited interests taken, and for Disturbance Damages resulting from the alleged delay of its development plans for the Subject Property attributable to the Expropriation and related works, and for statutory interest and costs.

4York Professionals, the Tenant of the commercial parking lot, had entered into an Agreement with Southlake Regional Health Centre (“Southlake Hospital”) to sublease to it 90 parking spots located on the Subject Property. The claims advanced by York Professionals in its Notice of Arbitration and Statement of Claim are for business losses on account of its lost revenues alleged to have been caused by the impact of the taking of the temporary easement, which reduced its inventory of parking spots available for rent to Southlake Hospital, from 90 to 70 parking spots. The Statement of Claim seeks the recovery of these amounts as damages for Injurious Affection as defined in Section 1(1)(a) of the Expropriations Act, R.S.O. 1990, c. E.26 (the “Act”), or, in the alternative, Disturbance Damages pursuant to Section 18 of the Act.

5In its Statement of Claim, Hongs alleges that it had redevelopment plans for the Subject Property which were delayed by the Expropriation. In its Statement of Claim, Professionals alleges that it had a valid lease in place for the commercial parking lot, the term of which ran until November 30, 2023.

POSITION OF YORK REGION

6The Region brings this Motion for an Order that both matters be linked and that the two Arbitrations be heard together. In support of its Motion, counsel for the Region delivered a Motion Record containing its Notice of Motion and supporting Affidavit and Exhibits thereto, the Factum of the Moving Party, and the Reply Factum of the Moving Party. The Region argues that the two Arbitrations must be linked and that they be heard together on the grounds that:

a) both Proceedings arise from the same Expropriation;

b) the claims made by Hongs and by York Professionals are inconsistent, in that the allegation by Hongs of redevelopment delay is inconsistent with the existing lease of the commercial parking lot held by York Professionals, and therefore the determination of one claim will bear on the determination of the other;

c) there is commonality between the damages sought by Hongs and York Professionals;

d) linkage and hearing together will result in a consistent and efficient determination of all disputes related to the Subject Property, will reduce duplicative evidence, avoid the possibility of inconsistent findings, and ensure a fair allocation of compensation to Hongs and York Professionals from the public purse.

POSITION OF HONGS

7Hongs takes no position with respect to the Motion and filed no materials. Counsel for Hongs had provided counsel for York Professionals with a partially redacted email to Counsel for the Region stating that it would withdraw its claim for Disturbance Damages due to delay. Counsel for Hongs advised the Tribunal that the email was sent in the course of settlement negotiations, that the claim for damages for delay has not been withdrawn, and that the terms of the offer to withdraw the delay claim are subject to settlement privilege.

POSITION OF YORK PROFESSIONALS

8York Professionals is opposed to the Motion, arguing that:

a) the sole similarity between the two Proceedings is that they arise out of the same Expropriation;

b) the Claimants in the two Proceedings have no connection to each other, except for their landlord/tenant relationship;

c) there is no overlap between Hong’s claim and that of York Professionals because Hong’s claim is for Market Value and delay, while the claim of York Professionals is for Business Losses;

d) linking the two proceedings, which means among other things that there would be common Examinations for Discovery, and directing that the Arbitrations be heard together, would significantly delay the determination of compensation and increase costs for York Professionals, thereby causing significant prejudice and adding to the delays it has already endured due to delay by the Region in the filing of its Reply and the delay in bringing this Motion.

9Counsel for the Region referred the Tribunal to the Divisional Court Decision in “Re Minister of Transportation and Communications and Eat’N Putt Ltd. and two other applications”, 1985 CanLii 2128 (ONSC), as standing for the proposition that property owner claims and tenant’s claims arising out of the same expropriation should be heard together (“MTC and Eat’N Putt”).

THE TRIBUNAL’S FINDINGS

10The Tribunal notes that the Divisional Court Decision in MTC and Eat’N Putt resulted in the claims of the property Owner, the Tenant, and the Sub-tenant, of the expropriated property being heard together at the Ontario Municipal Board (“OMB”), and that the subsequent Land Compensation Hearing gave rise to two reported OMB Decisions, the first being with respect to the hearing of the tenant’s claim, and the second being with respect to the hearing of the Owner’s claim: Funshine Investments Ltd. v. Ontario (MTC) (1986), 35 LCR 52; and, Eat’N Putt v. MTC (1986), 37 LCR 85.

11A reading of the two OMB Decisions reveals that the Expropriation of the subject property in the Eat’N Putt case was a full taking by the former Ministry of Transportation and Communications. The Owner’s fee simple interest in the entire property had been taken, and the lease and sub-lease had been extinguished by the Expropriation. Accordingly, the Owner’s, the Tenant’s and the Sub-tenants’ claims were each for compensation for an interest in land, being the market value of the fee simple interest brought by the Owner, the market value of the head lease brought by the Tenant, and the market value of the sub-lease brought by the Sub-tenant. This fact fully distinguishes the Divisional Court Decision in Eat’N Putt from the instant case, where the Expropriation was a taking of permanent and temporary easements affecting a portion of the Subject Property.

12The claims advanced by Hongs seek compensation for the taking of interests in land. Hongs has not brought a claim for any business loss with respect to the 20 parking spots impacted by the taking of the temporary easement or for any costs or losses associated with the unavailability for rent of the 20 parking spots.

13York Professionals, on the other had, has brought its claim for the business losses incurred when the available parking spots for rent to Southlake Hospital were reduced from 90 spots to 70 spots. This claim does not involve compensation for an interest in land, but is actually in the nature of a claim for damages for nuisance. This claim will not require a real estate market valuation, as it is for the lost revenues which York Professionals maintains could have been earned from the 20 parking spaces temporarily lost by the taking of the temporary limited interest.

14York Professionals seeks the recovery of its alleged losses as personal and business damages, which are contained within the Act’s Section 1(1)(a)(ii) definition of damages for Injurious Affection. In the alternative, these damages are sought as Disturbance Damages.

15Although Hongs’ claim for damages for delay of its redevelopment of the Subject Property is pleaded as a claim for Disturbance Damages, there can be no overlap between Professionals’ claim for the lost revenues of 20 parking spots and Hongs’ claim for damages resulting from the delay of redevelopment plans. Hongs does not advance a claim for damages for Injurious Affection.

16Therefore, there is no commonality between the damages claimed by Hongs and York Professionals.

17Counsel for the Region argued that the Tribunal should consider the factors outlined by Master Dash in the Decision in 1014864 Ontario Ltd v 1721789 Ontario Inc., 2010 ONSC 3306, and what was referred to in the Decision as the three gateway criteria for joinder as set out in Rule 6.01(1) of the Rules of Civil Procedure with particular emphasis on 6.01(1)(c).

18Pursuant to Rule 26.16 in Part II of the Tribunal’s Rules of Practice and Procedure, the Rules of Civil Procedure apply to proceedings brought under Section 26(1) of the Act. Rule 6.01 of the Rules of Civil Procedure provides that two or more proceedings may be joined or ordered to be heard together where that are common questions of fact and law, where the relief arises out of the same transaction, or for any other reason.

19The Tribunal has carefully considered the provisions of Rule 6.01 as it applies to the facts of this case. The Tribunal finds that, other than the fact that the Expropriation gave rise to both Arbitrations, and that both are brought under the provisions of the Act, there is no common issue of fact and law. The fact that both arose as a result of the same Expropriation is a minimal consideration and is not determinative. The Tribunal finds that the issues in the York Professionals claim are not at all interwoven with the issues in the Hongs claim. The Tribunal considered the third gateway criteria in Rule 6.01, being for “any other reason”, by reference to the exhaustive list of other factors set out in the Decision of Master Dash in 1014864 Ontario Ltd v 1721789 Ontario Inc. referred to above, and finds as follows:

a) Other than the background facts of the Expropriation itself, the issues are not interwoven.

b) The same damages are not sought in both Proceedings. Hongs seeks payment of the market value of the takings and damages for delay, while York Professionals seeks payment of its business losses.

c) There is no overlap in the damages claimed and a global assessment would not be appropriate. The damages in the York Professionals claim are for business losses resulting from the Expropriation. The claims in the Hongs Arbitration are for market value of the property interests taken and damages attributable to the development delay caused by the Expropriation.

d) There is minimal overlap in the evidence of witnesses. The expert evidence required in the York Professionals Arbitration will be accounting evidence regarding the quantum of business losses, provided by business loss experts. On the other hand, the expert evidence required in the Hongs Arbitration would include real estate appraisers, professional planners and development experts at a minimum, and accounting evidence to prove losses due to delay and to establish the quantum. The only common witness in both Arbitrations would the representative of the Region.

e) There would be little to no risk of inconsistent findings if the York Professionals and Hongs Arbitrations were not heard together. In the York Professionals Arbitration, the Tribunal will determine whether, and to what extent, York Professionals suffered business losses attributable to the loss of 20 parking spots as a consequence of the Expropriation. In the Hongs Arbitration, the Tribunal will determine the market value of the interests in land taken, the Highest and Best use of the Subject Property, and whether the Expropriation delayed Hongs in its plans to redevelop the Subject Property, and, if so, whether any damages flowed from that delay and the quantum of such damages.

f) The issues in the York Professionals claim are relatively straight-forward as opposed to those in the Hongs claim.

g) It is apparent that a Decision in one Proceeding would not put an end to the other given the very different nature of the claims.

h) The litigation status of each Proceeding is similar.

i) Linking the actions will not provide the advantage of the avoiding any interlocutory steps in either Proceedings.

j) Linking the actions and directing that they be heard together will delay York Professionals due to the greater complexity of the Hongs claim.

k) Linking and hearing together will cause both Claimants to incur increased costs, and for York Professionals in particular. To cause York Professionals and its counsel, with its relatively straight forward claim, to attend the many additional hearing days which the Hongs Arbitration will undoubtedly require in view of its number of issues and number of required witnesses, would be prejudicial to York Professionals in terms of both delay and costs.

l) It does appear that linkage and Hearing together would provide the Region with a strategic advantage by pitting the Claimants against each other. Counsel for the Region signalled this both in the Region’s Factum and in his submissions that linkage and hearing together was necessary to ensure a fair allocation of the compensation to Hongs and York Professionals from the public purse. The Tribunal does not agree with the premise that underlies this submission, which is that there is a finite fund of compensation arising out of the Expropriation, and that the Tribunal must determine how to allocate this fund between the two Claimants. Hongs and York Professionals are independent parties with differing interests and entitlements, asserting separate and distinct, and entirely independent claims under the Act, either of which can be maintained on its own. The matter to be addressed by the Tribunal when making a determination of the amount of the compensation payable is not based upon such considerations as the overall costs to the Authority in a particular taking, but upon the stated aim of the Act, succinctly stated by Corey, J. in the Supreme Court of Canada Decision in Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (1997), 1997 CanLII 400 (SCC), 60 L.C.R. 81 (S.C.C.) at p. 88:

The Expropriations Act should be read in a broad and purposive manner in order to comply with the aim of the Act to fully compensate a land owner whose property has been taken.

m) The Tribunal believes that linkage and hearing together would likely cause difficult procedural complexities involving documentary production, examinations for discovery, and also with respect to which claim proceeds to a Hearing first.

20The Tribunal finds that there is merit in assigning where practicable the same Tribunal Member or Panel to conduct whichever Arbitration Hearing occurs later. If this is not possible given scheduling and timing issues, the Decision and evidence in the first Arbitration heard will be made available for the future Hearing such that any possibility for inconsistency in the Decisions is reduced.

ORDER

21The Tribunal Orders, for the foregoing reasons, that the Region’s Motion to link these matters and for an Order that they be heard together, is dismissed:

22Pursuant to the provisions of Rule 19.1 of the Tribunal’s Rules of Practice and Procedure, the Tribunal Orders that a Case Management Conference (“CMC”) is scheduled in the Arbitration between Hongs and the Region, File No. OLT-21-001306, to be held by Video Conference Call (“VCC”) on June 26, 2023 at 10 a.m. The CMC will be heard by this Member, and its purpose will be to address the matters in Sub-Rules 19.1(f), and to fix a date, place and format for the Hearing pursuant to Sub-Rule 19.1(i);

23The Region and Hongs are directed to submit to the Tribunal a draft Procedural Order by June 19, 2023 (7 days prior to CMC);

24Pursuant to the provisions of Rule 19.1 of the Tribunal’s Rules of Practice and Procedure, the Tribunal Orders that a Case Management Conference (“CMC”) is scheduled in the Arbitration between Professionals and the Region, File No. OLT-21-001498, to be held by Video Hearing on June 29, 2023 at 10:00 a.m. The CMC also will be heard by this Member for the purpose of addressing the matters in Sub-Rules 19.1(f), and to fix a date, place and format for the Hearing pursuant to Sub-Rule 19.1(i).

25The CMC Hearings are scheduled to proceed by video as follows:

OLT-21-001306: Monday, June 26, 2023 at 10:00 a.m.

GoTo Meeting: https://global.gotomeeting.com/join/442599157 Access code: 442-599-157 Audio-only telephone line: +1 (647) 497-9391 or Toll-Free: 1-888-455-1389 Audio-only access code: 442-599-157

OLT-21-001498: Thursday, June 29, 2023 at 10:00 a.m. GoTo Meeting: https://global.gotomeeting.com/join/442599157 Access code: 442-599-157 Audio-only line: +1 (647) 497-9391 or Toll-Free: 1-888-455-1389 Audio-only access code: 442-599-157

26Parties and Participants are asked to log in to the video hearing at least 15 minutes before the start of the event to test their video and audio connections.

27Parties and Participants are asked to access and set up the application well in advance of the event to avoid unnecessary delay. The desktop application can be downloaded at GoToMeeting or a web application is available: https://app.gotomeeting.com/home.html

28Persons who experience technical difficulties accessing the GoToMeeting application, or who only wish to listen to the event, can connect to the event by calling into an audio-only telephone line.

29Individuals are directed to connect to the event on the assigned date at the correct time. It is the responsibility of the persons participating in the Hearing by video to ensure that they are properly connected to the event at the correct time. Questions prior to the Hearing event may be directed to the Tribunal’s Case Coordinator having carriage of this case.

30And the Tribunal so Orders.

“Robert G. Ackerman”

ROBERT G. ACKERMAN 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.