Terence G. Gain and Donna L. Gain v. Ideal Milk Haulage Limited and The Corporation of the Township of Otonabee-South Monaghan, 2003 ONCA 36977

DATE: 20030210

DOCKET: M29462

C37941

COURT OF APPEAL FOR ONTARIO

CRONK J.A. (in chambers)

B E T W E E N :

Terence G. Gain and Donna L. Gain

Bernard Eastman, for the applicants (respondents in appeal)

Applicants (Respondents in appeal)

• and -

Ideal Milk Haulage Limited and The Corporation of the Township of Otonabee-South Monaghan

Michael Miller, for the respondent (appellant in appeal)

Respondent (Appellant in appeal)

Heard: January 30, 2003

CRONK J.A.:

[1] This is a motion for directions concerning the cross-appeals by The Corporation of the Township of Otonabee-South Monaghan (the “Township”) from the judgments of Ferguson J. of the Superior Court of Justice dated February 20, 2002 and August 6, 2002.

I. BACKGROUND

[2] This case originated in a dispute between two neighbours, the applicants on this motion, Terence G. Gain and Donna L. Gain, and Ideal Milk Haulage Limited (“IMHL”), concerning the use by IMHL of property purchased by it in or about 1999, which was situated near the home of the applicants. IMHL used its property for a milk transportation depot. This involved 18 to 20 trips by diesel trucks, on a daily basis, in and out of the property, 7 days per week, including three trips daily between approximately 12:00 a.m. and 6:00 a.m. The applicants claimed that IMHL’s use of its property interfered with their enjoyment of their home, and regularly disturbed their sleep. Accordingly, they brought an application for a declaration that IMHL was using its property for purposes not permitted under the applicable municipal zoning by-law, an order restraining such use by IMHL, and an order requiring IMHL to comply with the zoning provisions of the by-law. The applicants sought no relief against the Township.

[3] By judgment dated February 20, 2002, the applications judge: (1) granted a declaration that IMHL, at the time of the application, was using its property for uses which were not permitted by the applicable Township zoning by-law; (2) ordered that IMHL forthwith cease using its property for other than residential, business office, maintenance garage, or other uses as specifically permitted by the Township by-law; (3) declined to order that IMHL comply with the zoning provisions of the Township’s zoning by-law; and (4) ordered that a shed located on IMHL’s property be used in the future only for one of the permitted industrial uses specified by the Township’s by-law and that, if the proposed use of the shed was for a permitted industrial use, IMHL was not required to comply with the zoning requirements of the by-law. The reasons and supplementary reasons for judgment of the applications judge concerning those orders were released on February 20, 2002 and May 20, 2002.

[4] In addition, by judgment dated August 6, 2002, the applications judge granted the applicants their costs of the application, fixed in the amount of $91,107, inclusive of disbursements and Goods and Services Tax. He further ordered that, of the costs awarded to the applicants, IMHL was required to pay the sum of $61,107 to the applicants, and the Township was required to pay the sum of $30,000 to the applicants (the “Costs Reasons”).

[5] IMHL appealed part of the February 20, 2002 judgment of the applications judge. The applicants cross-appealed that part of the applications judge’s decision set out in his reasons for judgment dated May 20, 2002. The Township cross-appealed from the three decisions of the applications judge, including from his judgment concerning costs.

[6] On September 20, 2002, IMHL abandoned its appeal and, within a matter of days, paid the costs which it was ordered to pay under the Costs Reasons.

[7] When IMHL decided to sell its property, the applicants reached an agreement, dated October 18, 2002, with the proposed purchasers of the property, whereby it was agreed that IMHL’s property could be used in the future for residential purposes only (the “Land Use Agreement”). The applicants allege that the Land Use Agreement was registered on title, and that it is binding on IMHL’s successors in interest, including any subsequent purchaser of the IMHL property.

[8] On November 15, 2002, Labrosse J.A. of this court granted the Township an extension of time within which to cross-appeal from the judgments of the applications judge. That extension was necessary because the Township had not commenced its cross-appeals on a timely basis. Given that IMHL had abandoned its appeal, Labrosse J.A. also ordered that the Township proceed as the primary appellant.

[9] On November 29, 2002, IMHL sold its property to the persons with whom the applicants entered into the Land Use Agreement. On December 16, 2002, the applicants abandoned their cross-appeal as required by the terms of the Land Use Agreement. Accordingly, at present, only the Township’s cross-appeals are outstanding. The Township wishes to proceed with those cross-appeals.

III. RELIEF SOUGHT BY THE APPLICANTS

[10] The applicants seek directions from this court concerning:

(1) whether the Land Use Agreement, and events associated with it, render the cross-appeals moot; and

(2) the contents of the appeal and exhibit books to be used on the cross-appeals, and the Township’s obligation to serve a certificate respecting evidence under rule 61.05(1) of the Rules of Civil Procedure.

The applicants also seek an extension of time within which to deliver their factum, should the cross-appeals proceed.

III. PRELIMINARY ISSUE ON MOTION

[11] In response to the applicants’ motion, the Township filed an affidavit by Ann-Marie Tindale, a law clerk in the offices of the solicitors for the Township, sworn on January 23, 2003.

[12] At the outset of the argument of this motion, counsel for the applicants objected to certain of the contents of Ms. Tindale’s affidavit. In particular, he argued that counsel for the Township, Michael Miller, should not be permitted to argue this motion because the affidavit relied upon by his client in response to the motion had been sworn by Mr. Miller’s law clerk based on information provided, and known, solely by Mr. Miller. For that reason, counsel for the applicants initially argued that Ms. Tindale’s affidavit should be wholly disregarded on the motion. However, after further consideration, the applicants’ counsel restricted his objection to the contents of paragraph 13 of Ms. Tindale’s affidavit. Counsel for the Township agreed, for the purpose of this motion, that I should not have regard to that paragraph of Ms. Tindale’s affidavit. Accordingly, I have not taken paragraph 13 of Ms. Tindale’s affidavit into account in arriving at my decision.

IV. MOOTNESS ISSUE

[13] The applicants argue that the issues concerning the use of IMHL’s former property, as considered by the applications judge, are moot. They rely on the Land Use Agreement, and on the alleged fact that the covenant in the Land Use Agreement concerning the future use of the land was registered on title, in order to run with the land and to be binding on any successors in title.

[14] The applicants submit that a single judge of this court has jurisdiction to provide directions concerning the mootness issue. In the alternative, they seek an order permitting them to file an affidavit on the Township’s cross-appeals, setting out the basis of their mootness argument.

[15] In my view, the applicants’ motion for directions on the mootness issue must be dismissed.

[16] Under rule 61.16(2.2) of the Rules of Civil Procedure, a motion to this court for an order that finally determines an appeal, other than an order dismissing the appeal on consent, must be heard and determined by a panel of three judges of this court sitting together. If the directions sought by the applicants on the mootness issue were to be provided, and if I were to conclude that all or some of the issues raised by the Township in its cross-appeals are moot as a result of events post-dating the judgments of the applications judge, I would, in effect, be finally determining those issues. Accordingly, under rule 61.16(2.2), determination of the mootness issue, and its consequences if the applicants’ assertion of mootness is accepted, must be made by the panel hearing this appeal.

[17] For similar reasons, I deny the alternative relief sought by the applicants, that is, an order permitting them to file an affidavit on the cross-appeals setting out the basis of the alleged mootness argument. The evidence sought to be introduced by the applicants to ground their mootness argument is evidence concerning events which occurred after the date of the judgments of the applications judge. Accordingly, it is fresh evidence which they may seek to place before the panel hearing the cross-appeals according to the usual rules governing the admission of fresh evidence on appeals to this court. It is for the panel hearing the cross-appeals to determine whether the fresh evidence is properly admissible.

V. CONTENTS OF THE TOWNSHIP’S APPEAL AND EXHIBIT BOOKS AND THE TOWNSHIP’S OBLIGATIONS UNDER RULE 61.05(1)

[18] The applicants allege that the Township failed to comply with rule 61.05(1) of the Rules of Civil Procedure by failing to serve a certificate respecting evidence, despite request therefor by the applicants. They also allege that materials relevant to the issues raised on the cross-appeals have been omitted from the appeal and exhibit books filed by the Township. In that connection, the applicants contend that the following omitted materials are relevant to the cross-appeals:

(i) the applicants’ affidavits, sworn on March 3, 2002, relating to the costs hearing before the applications judge (the “Gain Affidavits”);

(ii) the factum filed by the Township on the application, in which the Township sought costs of the application;

(iii) the transcript of that part of the proceedings below, when the applications judge ruled that the Township could participate in the application, subject to any costs award that ultimately might be made;

(iv) the transcript of that part of the proceedings below pertaining to discussion of Beer v. Hayes, [2001] O.J. No. 4062;

(v) the exhibits on the cross-examination of Mr. R. Beckstead;

(vi) a copy of a “flyer” circulated to residents of the Township in July 1999, as referenced in the Costs Reasons; and

(vii) copies of all bills of costs, disbursements calculations, and written submissions of the applicants on costs, as filed with the applications judge.

I will address each of these matters in turn.

(i) the Township’s certificate respecting evidence

[19] The Township does not object to filing a certificate respecting evidence. However, in response to the assertion that it failed to comply with rule 61.05(1), the Township points to the certificate respecting evidence filed by IMHL on its appeal. In that certificate, dated March 15, 2002, counsel for IMHL certified that all of the affidavit evidence, and all of the transcripts of cross-examinations, filed with the Superior Court of Justice for use at the hearing of the application, were required for the appeal. Based on that expansive certificate, the Township claims that it understood that there was no dispute concerning the evidence required pursuant to rule 61.05(1) for use on the cross-appeals. Accordingly, it did not file its own certificate.

[20] The certificate respecting evidence served by IMHL was filed in IMHL’s appeal from part of the February 20, 2002 judgment of the applications judge. It did not concern the decision of the applications judge set out in his May 20, 2002 supplementary reasons for judgment, or the costs decision of the applications judge as set out in his Costs Reasons, neither of which was appealed by IMHL. For that reason alone, the Township should file a certificate respecting evidence in connection with its cross-appeals. In addition, given the procedural history of this matter, and the fact that the Township is now the designated appellant, it is advisable that the Township comply with rule 61.05(1). Accordingly, I order that the Township serve and file with this court its certificate respecting evidence in connection with its cross-appeals, as contemplated by rule 61.05(1), within 10 days from the date of this order.

(ii) the Gain Affidavits

[21] Much of the argument on this motion concerned whether the Gain Affidavits should form part of the materials filed with this court to be considered on the Township’s cross-appeals.

[22] The applicants argue that the exhibits to one or both of the Gain Affidavits provide evidence concerning offers to settle, the Township’s alleged change of position at the hearings before the applications judge despite an agreement or undertaking by the Township to remain neutral, and the dockets submitted to the applications judge on behalf of Mr. Gain, a solicitor, and by counsel for the applicants.

[23] The Township opposes the inclusion of the Gain Affidavits in its appeal book on the basis that the applications judge did not consider them in arriving at his decision concerning costs. The Township relies on the following passage from the Costs Reasons:

The Applicants rely on their affidavits filed on the issue of costs. Those affidavits describe a long history of activity concerning this dispute and are relied on to support an award of solicitor and client costs on a ground of misbehaviour by the Township and Ideal Milk. I am not going to consider that material. I accept the submission of Mr. Miller that if the Applicants seek some compensation based on that history they should have raised it in the Application. I am concerned only with conduct relating to the conduct of this litigation.

[24] However, the applications judge later stated in his Costs Reasons:

For purposes of convenience, I shall analyse the costs of the Applicants with reference to the summary at p. 9 of Tab A of the Applicants’ Record Re Costs Submissions.

[25] Thereafter, in the next 11 paragraphs of his Costs Reasons, the applications judge referred to the hourly rates charged by counsel for the applicants and by Mr. Gain for his own time, and to the hours and the total costs, the counsel fees, the disbursements, and the Goods and Services Tax claimed by the applicants. Information relating to those issues, the applicants contend, is set out in the Gain Affidavits or in the exhibits attached thereto. The applicants further argue that in responding to the Township’s cross-appeal from the costs decision of the applications judge, they should be permitted to refer to the contents of the Gain Affidavits concerning the Township’s conduct.

[26] Counsel for the Township concedes that the quoted passages from the Costs Reasons indicate that, in arriving at his decision concerning costs, the applications judge considered the dockets submitted on behalf of the applicants. Although counsel for the Township further concedes that those offers to settle which form part of the Gain Affidavits should be included in the Township’s appeal book, he disputes the relevance of the remainder of the Gain Affidavits.

[27] In my view, it is possible to interpret the applications judge’s statement that he was “not going to consider” the Gain Affidavits as meaning that he was not going to consider those parts of the Gain Affidavits which address the alleged improper past behaviour of the Township. That does not mean that the applications judge did not consider other parts of the Gain Affidavits. As set out in the Costs Reasons, it appears that the applications judge did consider those parts of the Gain Affidavits relating to the fees, disbursements, and Goods and Services Tax claimed by the applicants. It is not clear whether he also considered the offers to settle attached as exhibits to Mr. Gain’s affidavit of March 3, 2002.

[28] I have reviewed the Gain Affidavits and the applicants’ undated record concerning costs submissions, as filed with the applications judge. Page 9 of Tab “A” and Tabs “B” to “D”, inclusive, of that record pertain to the applicants’ bills of costs, docketed time, and fees and disbursements claimed. Those materials, in my view, are relevant to the Township’s cross-appeal from the costs decision of the applications judge.

[29] Part only of the Gain Affidavits, which were filed with the applications judge as part of the applicants’ record on the costs hearing, appear to concern the fees and disbursements claimed by the applicants. Other parts of the Gain Affidavits concern the alleged conduct of the Township.

[30] On the record before me, it is not possible to identify with certainty those parts of the Gain Affidavits that were considered by the applications judge. In addition, in my view, the applicants are entitled to rely on those parts of the Gain Affidavits which they claim properly bear on the costs disposition of the applications judge.

[31] Accordingly, I conclude that it is necessary that page 9 of Tab “A” and Tabs “B” to “D”, inclusive, of the applicants’ record below concerning costs, and the Gain Affidavits sworn on March 3, 2002, and the exhibits attached to those affidavits, be included by the Township in a supplementary appeal book to be filed by it in accordance with these reasons. The panel hearing the cross-appeals will determine if those materials are relevant to the issues raised on the Township’s cross-appeal from the costs decision of the applications judge.

(iii) the factum filed by the Township on the application

[32] The applicants seek to have the factum filed by the Township on the application included in the Township’s appeal book filed on its cross-appeals, for the purpose of establishing that the Township sought an award of costs in its favour. Counsel for the Township acknowledged that fact during oral argument of this motion. Given that acknowledgement, upon which the applicants may rely during argument of the Township’s cross-appeals, the inclusion in the Township’s appeal book of the Township’s factum filed on the application is unnecessary.

(iv) the transcript of that part of the proceedings below, when the applications judge ruled that the Township could participate in the application, subject to any costs award that ultimately might be made

[33] As I understand the submissions of the applicants, this part of the transcript is sought to be included in the Township’s appeal book for the purpose of establishing that the Township’s participation in the proceedings before the applications judge was conditional on the Township’s exposure to potential liability in costs. Counsel for the Township acknowledged that fact during oral argument of this motion. Given that acknowledgement, upon which the applicants may rely during argument of the Township’s cross-appeals, the inclusion in the Township’s appeal book of the requested transcript extract is unnecessary.

(v) the transcript of that part of the proceedings below pertaining to discussion of Beer v. Hayes, [2001] O.J. No. 4062.

[34] This transcript excerpt, pertaining to discussion of Beer v. Hayes, is now available to counsel for the applicants. The Township does not object to the inclusion of that transcript excerpt in its appeal book, providing that counsel for the applicants furnishes the Township’s counsel with a copy of the excerpt. Accordingly, the applicants are directed to provide the relevant transcript excerpt to counsel for the Township within 10 days from the date of this order, and the Township is directed to include that excerpt in a supplementary appeal book to be filed by it in accordance with these reasons.

(vi) the exhibits on the cross-examination of Mr. R. Beckstead

[35] The Township acknowledges that the exhibits on the cross-examination of Mr. Beckstead should have been included in its original appeal book, as filed with this court. Accordingly, the Township is directed to include a copy of those exhibits in a supplementary appeal book to be filed by it in accordance with these reasons.

(vii) the flyer circulated to residents of the Township in July 1999

[36] Neither counsel for the applicants nor counsel for the Township could assist concerning whether the flyer in dispute was marked as an exhibit or otherwise admitted by the applications judge as part of the materials properly before him. However, the Township does not object to the inclusion of a copy of the flyer in its appeal book. Accordingly, the Township is directed to include a copy of the flyer in a supplementary appeal book to be filed by it in accordance with these reasons.

(viii) the bills of costs, disbursements calculations, and written submissions of the applicants on costs, as filed with the applications judge

[37] The applicants argue that all bills of costs, disbursements calculations, and written submissions by them on costs, as filed with the applications judge, are relevant to the Township’s cross-appeal concerning the applications judge’s costs decision. I have already concluded that page 9 of Tab “A”, and Tabs “B” to “D”, inclusive, of the applicants’ record concerning costs submissions, as filed with the applications judge, are to be included by the Township in its supplementary appeal book to be filed in accordance with these reasons.

[38] The Township argues that the applicants’ previous costs submissions are not relevant to the Township’s cross-appeals. In the alternative, to the extent that such costs submissions are relevant to the cross-appeals, the Township submits that the applicants are free to repeat their submissions on costs to the panel hearing the cross-appeals. I agree. Accordingly, save as earlier directed in these reasons, the written costs submissions of the applicants, as filed with the applications judge, need not be included in the Township’s appeal book filed on its cross-appeals.

[39] One further observation concerning the disputed materials in connection with the Township’s appeal and exhibit books is appropriate. In my view, with minimal co-operation between counsel, many of those issues raised, and argued in detail, on this motion could have been resolved without the necessity for argument of this motion.

VI. EXTENSION OF TIME FOR DELIVERY OF THE APPLICANTS’ FACTUM

[40] In their notice of motion, the applicants sought an order extending the time for delivery of their factum on the cross-appeals. However, that matter was not addressed by counsel during oral argument of this motion. In addition, the applicants’ motion materials do not specify the length of the extension requested. Accordingly, within 7 days from the date of this order, the applicants shall provide a letter to the Registrar, copied to counsel for the Township, outlining the length of the extension requested. The Township’s responding position, if any, shall be provided by letter to the Registrar, copied to the applicants’ counsel, within 7 days from the date of delivery to the Registrar of the applicants’ letter. In the circumstances, I would not expect either letter to exceed two pages in length.

VII. DISPOSITION

[41] Accordingly, for the reasons given, the Township is directed to serve and file, within 14 days from the date of this order, a supplementary appeal book or books containing the materials required by these reasons to be contained therein. The Township’s certificate respecting evidence shall be filed within 10 days from the date of this order. As success on this motion is divided, no award of costs on this motion is appropriate.

RELEASED:

“EAC”

_____ “E.A. Cronk J.A.”