Court File and Parties
2016 ONSC 5975
Court File No.: CV-15-125066-00 Date: 20160922
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
GREAT LAND (WESTWOOD) INC. Applicant/Respondent to Motion – and – THE REGIONAL MUNICIPALITY OF YORK Respondent/Moving Party
Counsel: Andrew Biggart, for the Applicant/Respondent to Motion Robert G. Miller and Vanessa Bacher, for the Respondent/Moving Party
Heard: August 26, 2016
REASONS FOR DECISION
GILMORE J.:
Overview
[1] The within motion is brought in the context of Great Land (Westwood) Inc.’s (Great Land) application for an order declaring that it is owed $350,000 plus costs from The Regional Municipality of York (York). This amount relates to expropriation compensation for the taking of a fee simple interest of .041 acres and a temporary easement of .023 acres (the expropriated land) from certain portions of property located at 8890 Yonge Street, Richmond Hill, Ontario (the property).
[2] In addition, Great Land seeks a declaration that it did not enter into a contract with York requiring a dedication of the expropriated lands at a nominal cost. In the alternative Great Land seeks a declaration that if the parties did enter into a contract that required it to dedicate the expropriated lands, York fundamentally breached the contract and therefore owes Great Land the sum of $350,000 plus costs related to the expropriation.
[3] In the within motion, York seeks to dismiss Great Land’s application for lack of jurisdiction under Rule 21.01.3(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Great Land defends the motion on the grounds that it is seeking an equitable remedy and there are no issues of valuation which would invoke the jurisdiction of the Ontario Municipal Board (OMB) or the Expropriations Act, R.S.O. 1990, c. E.26. As such, the motion should be dismissed and a date set for the hearing of Great Land’s application.
Background Facts
[4] Great Land owns the subject property in Richmond Hill which is located just off Yonge Street. York has a planned rapid transit project in the area. In 2012, Great Land made certain planning applications related to a mixed-use condominium project. Those applications went to the OMB. The parties to that hearing were the Town of Richmond Hill, York, and Great Land. York wanted certain land that it required for its transit project. Great Land wanted to ensure that it received the necessary Official Plan (OP) amendments. There is a disagreement on the facts as to what occurred next.
[5] In brief, York takes the position that based on a settlement reached between Great Land and York, it was agreed that Great Land would receive the required Official Plan amendments in exchange for which York would receive the necessary expropriated lands for the nominal fee of $2.00.
[6] Great Land’s view is that no such agreement was reached. It obtained the required approvals at the OMB and accepted an offer to receive compensation of $350,000 from York for the expropriated land. As York takes the position that the offer made to Great Land was not capable of acceptance, York can no longer rely on unilateral mistake because its former position was that its offer was made in error. Great Land submits that there was offer, acceptance and refusal to pay. Therefore, this Court has jurisdiction to hear Great Land’s application.
The Disputed Contracts
1) The Minutes of Settlement
[7] York submits that the parties came to an agreement with respect to the appeals under the Planning Act, R.S.O. 1990, c. P.13 in the spring of 2014. Letters of offer and acceptance were exchanged. Counsel for York and Great Land appeared before the OMB to present the settlement in July 2014. The agreed upon settlement terms included that in exchange for Great Land’s agreement to dedicate the expropriated land at no cost to York, it would not oppose the approval of Great Land’s planning applications.
[8] York submitted that although minutes were never signed, the parties told the OMB that there was an agreement on terms at the hearing on July 17, 2014. York withdrew from the OMB hearing and allowed the development to be approved. It would not have done so had it understood that Great Land would refuse to receive nominal consideration for the subject expropriated lands.
[9] The letters outlining the offer and acceptance were entered into evidence, after which York withdrew from the hearing and the OMB allowed Great Land’s appeals. Given these circumstances York commenced expropriation proceedings of the subject property by serving a Notice of Application for Approval to Expropriate. According to York, Great Land agreed to dedicate the project requirements through the settlement achieved before the OMB after being notified of York’s intentions to expropriate. York acquired title to the subject lands on February 18, 2015. Pursuant to the Expropriations Act, a Notice of Expropriation, Notice of Election and Notice of Possession were served on Great Land on March 12, 2015. On May 15, 2015, York served an Offer of Compensation for the market value of the expropriated lands in accordance with s. 25 of the Act.
[10] In keeping with the terms of what York submits was the agreed upon settlement of the Planning Act matter before the OMB, the compensation offered was a nominal sum of $2.00. Pursuant to s. 26 (a) of the Expropriations Act, Great Land filed a Notice of Negotiation with the Board of Negotiation and served it on York on May 22, 2015. A negotiation was held between the parties on October 28, 2015, but no settlement was achieved.
[11] York submits that Great Land is required to continue under the statutory scheme provided for under the Expropriations Act by filing a Notice of Arbitration and Statement of Claim. Instead, Great Land served its Notice of Application on York on January 8, 2016. York further submits that Great Land’s court application is an attempt to circumvent the exclusive jurisdiction of the OMB to determine all matters related to compensation arising from the expropriation. Further, allowing the application to proceed would save Great Land the discomfort of appearing before the OMB to explain why it now takes the position that there was no agreement with respect to the resolution of its Planning Act appeals in 2014.
[12] Not surprisingly, Great Land has a quite a different view of the background facts related to the alleged minutes of settlement. Great Land does not dispute that there were several iterations of draft minutes of settlement sent back and forth between the parties. However, its position is that there is nothing that confirms there was an actual agreement. Certainly, no minutes of settlement were ever signed.
[13] Great Land makes specific reference to the letter of Frank Santaguida, Associate Counsel for York, dated April 17, 2014. In that letter Mr. Santaguida acknowledges correspondence dated March 28, 2014 from Great Land’s counsel, and confirms that York accepted the principles of settlement contained therein. Counsel for Great Land points out that there is no reference in the principles of settlement to any expropriation. Great Land says this is because expropriation was not part of the principles of settlement. Great Land’s position is that it could have obtained all the necessary approvals without agreeing to the $2.00 compensation for the expropriation.
[14] York’s response is that there were several drafts of the proposed minutes of settlement, all of which were produced at Tab D of the applicant’s Responding Motion Record. In each of those versions of the draft minutes of settlement there is a reference to two possible expropriations for which the consideration would be $2.00.
2) The E-Mailed Offer
[15] The second disputed contract relates to an exchange of e-mails which started in December 2014. Peter Rusin was a negotiator with real estate expertise who had been hired by York to negotiate the acquisition of land from individuals without the necessity of expropriation. A December 4, 2014 e-mail from Mr. Rusin to one of the managers of land development of Great Land, Ron Stein, sets out as follows in relation to the subject proposed expropriation:
The total offer of compensation equates to approximately $63,447 for the temporary of easement: and $285,770 for the fee simple taking or $350,000 (rounded) TOTAL, plus all related costs.
It is the Region’s desire to execute a full and final settlement agreement. If you think you would be amendable to such an agreement, please advise and I will request the York legal department to complete a draft of the final settlement agreement for execution.
[16] York submits that Mr. Rusin was not aware of the Planning Act settlement in July 2014 and therefore the offer made by Mr. Rusin is not capable of acceptance. Further, the appraisal on which Mr. Rusin relies for the purpose of his offer and negotiation was dated prior to the Planning Act settlement. This is confirmed in a March 17, 2015 e-mail from Mr. Stein to Mr. Rusin in which Mr. Stein points out the dated appraisal and advises Mr. Rusin that the status of the Official Plan designation and zoning is not up to date. He advises Mr. Rusin that the OMB approved the OP designation and zoning by-law for the site both verbally and then subsequently in a written decision on August 8, 2014. York argues that Mr. Stein was responding to the offer by requesting more money for the expropriation based on the fact that he had received the approvals negotiated with York when those same approvals were the ones for which he agreed to $2.00 in compensation.
[17] As the lands were expropriated in February 2015, York was required to prepare a new appraisal. Section 25 of the Expropriations Act requires that an offer must be based on an appraisal and Great Land was offered $2.00 as per the Planning Act settlement and offer sent May 25, 2015.
[18] Great Land submitted that Mr. Stein attempted to contact Mr. Rusin personally on several occasions regarding the December 2014 email, but without success. Therefore, in April 2015, Great Land’s counsel sent a letter to York advising that it wished to accept the offer contained in the December 4, 2014 email. As a result of having accepted the offer, Great Land takes the position that valuation is not an issue.
[19] Great Land relies on the affidavit of Mr. Stein, which was not cross-examined upon and therefore uncontradicted. Mr. Stein deposed in his affidavit at paras. 17-20 that after he received Mr. Rusin’s offer he advised him by email on March 17, 2015 that York required the lands earlier than expected, decided to expropriate, and therefore Great Land was expecting compensation for the lands taken. Mr. Rusin responded to Mr. Stein by advising that he would get back to him. Having not heard from Mr. Rusin, Great Land instructed its counsel to send the letter referred to above on April 9, 2015, indicating its acceptance of the $350,000 offer. York responded to Great Land’s lawyers on April 27, 2015, advising that the communication from Mr. Rusin was sent in error as Mr. Rusin was not aware of the settlement between York and Great Land. Mr. Stein deposed that this was the first time he heard that the offer of compensation made to Great Land was an error.
[20] Mr. Stein refers in his affidavit to a letter he received from York related to the ongoing expropriation of the subject lands. The letter was accompanied by a new appraisal which valued the land as of February 18, 2015. The appraisal states that the value of the fee simple and the temporary easement was $2.00. The basis for this amount is stated as being an “extraordinary assumption.” The assumption relied upon in the appraisal is that the compensation of $2.00 is in accordance with an agreement negotiated between the parties as part of proceedings before the OMB.
[21] Great Land urges the court to dismiss York’s motion on the basis that no valuation issue arises. Sending Great Land back to the OMB to make the same argument is not fair to Great Land, especially given that York’s position changed as between its written material and the motion.
[22] In response, York submits that Great Land is asking the Court to decide the merits of Great Land’s application in order to determine jurisdiction. York relies on certain case law that makes it clear that the OMB has the authority to determine contractual disputes. York’s position is that this is a valuation issue and the OMB has jurisdiction to award $2.00, $350,000, or something different.
Issues and Analysis
Is this Matter within the Exclusive Jurisdiction of the Ontario Municipal Board?
[23] Case law supports that Parliament may, by statute, transfer jurisdiction from the Superior Court to other adjudicative bodies: see Canada (Attorney General) v. Telezone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585, at para. 45. Further, it is clear that the Expropriations Act is a comprehensive code whose terms define the claims available and which parties are entitled to them. This was confirmed in St. Pierre v. Ontario (Minister of Transportation and Communications) (1983), 43 O.R. (2d) 767 (Ont. C.A.), in which the Court of Appeal stated that “[t]he right to compensation is a statutory right, and no claim for compensation may be made for damages resulting from works authorized by statute unless the same or another statute makes provision for compensation,” (at para. 6). The Act itself is clear with respect to its application. Section 2(1) reads as follows:
Despite any general or special Act, where land is expropriated or injurious affection is caused by a statutory authority, this Act applies. R.S.O. 1990, c. E.26, s 2(1).
[24] Section 26 of the Expropriations Act is a comprehensive code for disagreements concerning compensation as follows:
Where the statutory authority and the owner have not agreed upon the compensation payable under this Act and, in the case of injurious affection, section 22 has been complied with, or, in the case of expropriation, section 25 has been complied with, or the time for complying therewith has expired,
(a) the statutory authority or the owner may serve notice of negotiation upon the other of them and upon the board of negotiation stating that the authority or the owner, as the case may be, requires the compensation to be negotiated under section 27; or
(b) where the statutory authority and the owner have agreed to dispense with negotiation proceedings, the statutory authority or the owner may serve notice of arbitration upon the other of them and upon the Board to have the compensation determined by arbitration. R.S.O. 1990, c. E.26, s. 26.
[25] In this case, the parties attended a meeting at the Board of Negotiation in October 2015, but no agreement for compensation was reached. The next step, pursuant to s. 26 (b) of the Expropriations Act, is for the parties to apply for arbitration before the OMB. York has applied for such arbitration but the arbitration has not taken place because of these intervening court proceedings.
[26] There is significant support in the case law for the OMB and its jurisdiction under the Expropriations Act to determine all matters related to compensation including whether a contract was formed between the parties and whether such contract was frustrated.
[27] The jurisdiction of the OMB is confirmed in Casa Luna Furniture v. Ottawa (City) (2009), 175 A.C.W.S. (3d) 247, (Ont. Sup. Ct.). In that case, an application was brought by the plaintiff for injurious affection under the Expropriations Act against the City of Ottawa. The plaintiff then brought an action in the Superior Court for loss of profits, alleging that city construction prevented access to the entrance of its property. The Court held that, despite the inherent jurisdiction of the Superior Court, the claim being advanced by the plaintiff was one that should be determined by the OMB (at para. 43). The Court held that jurisdiction of the OMB had to be respected and not subject to collateral attacks by an attempt to shelter under an action in the Superior Court (at para. 44).
[28] In Curactive Organic Skin Care Ltd. v. Ontario, 2011 ONSC 2041, 200 A.C.W.S. (3d) 915, the plaintiff was a hair salon in the City of Toronto that had carried on business for over 30 years. The hair salon was located on St. Clair Avenue West, and was subject to a project involving major and lengthy reconstruction with great disruption to local businesses. In this class action, the Court held that the plaintiff’s claim was really one for injurious affection, a head of damages under the Expropriations Act (at paras. 23-24). The Court held that a comprehensive scheme for the determination of the matter was provided for under that Expropriations Act (at paras. 25-26). The jurisdiction of the Superior Court was ousted by s. 36 of the Expropriations Act and the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 (at paras. 33-34).
[29] While Great Land argues that the remedies sought are in the nature of equitable relief, York takes the position that Great Land has framed in contract. Its view is that such contractual disputes are within the jurisdiction of the OMB.
[30] York relies on Shellrock Developments Ltd. v. Milton (Town) (2007), 56 O.M.B.R. 204. In that case, certain appeals concerning subdivision zoning were filed with the OMB and a hearing was scheduled. Prior to the date of the hearing, Shellrock Developments Ltd. brought an application for judicial review and sought an adjournment of the hearing in order to permit legal issues to be determined by the Superior Court. The OMB declined to adjourn the motion date, and scheduled a peremptory date (at para. 30). The OMB held that any entitlement to pursue legal remedies, including appeals and applications for judicial review, may not be pursued as a way of avoiding the OMB, which has been afforded jurisdiction in planning matters (at para. 11).
[31] In Snopko v. Union Gas Ltd., 2010 ONCA 248, 100 O.R. (3d) 161, the plaintiffs sought compensation under s. 33 of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B. The plaintiffs brought an action alleging breach of contract, and the defendant’s motion for summary judgment to dismiss the action was granted. The Court held that the OMB has “in all matters within its jurisdiction authority to hear and determine all questions of law and fact,” (at para. 27). The Court continued, at para. 27:
This generous and expansive conferral of jurisdiction ensures that the Board has the requisite power to hear and decide all questions of fact and of law arising in connection with claims or other matters that are properly before it. This includes, inter alia, the power to rule on the validity of relevant contracts and to deal with other substantive legal issues.
[32] Snopko was a decision that, although involving the Ontario Energy Board as opposed the Ontario Municipal Board, dealt with an application in which the plaintiffs sought fair and equitable compensation for the use of designated gas storage areas that were located on the applicants’ properties. The applicants made claims against Union Gas for damages for breach of contract, unjust enrichment, nuisance, negligence and termination of contract. The applicants’ claim attacked the validity of agreements relied upon by Union Gas and alleged breaches of contract. Although different statutes are in issue, the factual underpinnings are similar to the case at bar.
[33] Based on the decisions of Snopko, Curactive and Shellrock, I concur with York that the essential character or substance of the claim by Great Land is one which falls within the jurisdiction of the OMB as it relates to questions of fact and law arising in connection with claims, including the validity of relevant contracts.
[34] Turning to the first alleged contract, Great Land takes the position that, as no minutes of settlement were ever signed, there is nothing binding that would require it to transfer fee simple for the road and easement at nominal cost. In its letter to York, dated March 28, 2014, Great Land acknowledges that it is prepared to enter into minutes of settlement that would secure “the dedication by Great Land to the Region in fee simple, at nominal cost, of that portion of the Great Land site as shown in green hatching on the attached plan. The dedication of the lands will be provided for the purpose of securing the Region’s planned expansion of Yonge Street and related implementation of the VIVA-Yonge Street Transitway.”
[35] In response to that correspondence, Mr. Santaguida accepted the principles of settlement contained in Great Land’s correspondence of March 28, 2014. On April 21, 2014, Mr. Santaguida forwarded to counsel for Great Land draft minutes of settlement which set out that if York filed a plan of expropriation, Great Land would accept the consideration of $2.00 for the road widening and easement.
[36] Great Land relies on its correspondence of March 28, 2014 as demonstrating its willingness to enter into minutes of settlement but notes that that correspondence makes no mention of expropriation. Great Land goes further to say that it could have received all of its planning act approvals without York’s co-operation.
[37] Great Land’s position on the minutes of settlement is problematic in this court’s view. The OMB hearing did not proceed on July 17, 2014. York allowed the development to be approved. Based on the wording of the various iterations of the minutes of settlement that passed between the parties, there is no doubt that there was mention of expropriation at a nominal cost.
[38] As per Snopko, the Ontario Municipal Board has similar powers to the Ontario Energy Board and as per s. 35 of the Ontario Municipal Board Act, the OMB has the authority to hear and determine all questions of law or fact. I infer from Snopko that this includes the power to rule on the validity of relevant contracts and deal with other substantive legal issues.
[39] The issue of contract number one falls squarely within the ambit of determining the validity of contracts. York takes the position that there was a contract or it never would have agreed to the planning approvals. Great Land says no such contract existed. I am not called upon to decide this issue. However, given the abovementioned case law, I find that the OMB has the jurisdiction to do so.
[40] The second contract relates to the offer made by Peter Rusin on December 4, 2014. Clearly, this is an offer for compensation. However, the matter does not end there. There are issues as to whether the offer was capable of acceptance pursuant to appraisals required under s. 25 of the Expropriations Act.
[41] There is evidence that the appraisal on which Mr. Rusin relied was an outdated one and did not include any increase in value of the property as a result of the Planning Act approvals. This is an issue which falls squarely within the ambit of the Ontario Municipal Board Act as it relates to the Expropriation Act and its requirements.
[42] As jurisdiction for such matters has been removed from the Superior Court in order to ensure that tribunals with specialised expertise adjudicate on them, I find that the issues related to both contracts should proceed pursuant to the requirements of the Expropriations Act and the Ontario Municipal Board Act. As such, York’s motion is granted and Great Land’s application is dismissed. Great Land shall file a statement of claim and notice of arbitration and a date for the arbitration set thereafter.
Costs
[43] It was agreed by the parties that costs would be set in the amount of $7,500 for the successful party. As such, costs are forthwith payable to York in the amount of $7,500.
Madam Justice C.A. Gilmore