Disera v. Liberty Development Corporation, 2008 ONCA 34

CITATION: Disera v. Liberty Development Corporation, 2008 ONCA 34

DATE: 20080121

DOCKET: C47180

COURT OF APPEAL FOR ONTARIO

SIMMONS, MACFARLAND AND ROULEAU JJ.A.

BETWEEN:

FIORE DISERA, DAVID RAFFAELE DISERA, FREDERICK BYRON DISERA, AND DISERA MOTELS LIMITED

Plaintiffs (Respondents)

And

LIBERTY DEVELOPMENT CORPORATION and 1541677 ONTARIO INC.

Defendants (Appellants)

Colin P. Stevenson for the appellants

Richard E. Anka, Q.C. for the respondents

Heard: October 18, 2007

On appeal from the judgment of Justice Keith A. Hoilett of the Superior Court of Justice dated April 26, 2007, with reasons reported at [2007] O.J. No. 1612.

ENDORSEMENT

[1] This is an appeal from the judgment of Hoilett J. dated April 26, 2007 wherein he granted summary judgment in favour of the respondents in the sum of $3,129,000.

[2] The appellants agreed, by way of an Agreement of Purchase and Sale dated August 19, 2002 (“Agreement”), to purchase a property which allowed for construction of 614 residential units. However, a recital in the Agreement indicated that the appellants intended “to apply for an Official Plan Amendment and a re-zoning of the Property to allow for high density residential and/or commercial townhouses and/or semi-detached homes and/or single homes on the Property.”

[3] Clause 5.01 of the Agreement contemplated that a bonus would be paid by the appellants in certain circumstances. The relevant provision in this case provided that a bonus of $7,000 per unit over 1,000 units would be payable if the appellants applied for and obtained rezoning and a density increase in “final form” from the City of Vaughan on the property.

[4] Clause 5.01 of the Agreement provides:

The Purchaser covenants to make an application (the “Application”) to all necessary authorities during the period of two (2) years next following the Closing to re-zone the Motel Lands and Front Lands to residential and concurrently to apply for an increase in density or coverage (the “Density Increase”) for the easterly portion of the Back Lands….

If at any time following the Closing of the transaction herein the City of Vaughan, with the consent of all the relevant governmental authorities, has granted in final form the Density Increase on the initial Application set out above (the “Decision”) or any subsequent applications relating to the Property commenced within eight (8) years of Closing (the “Subsequent Decision”), on reasonably satisfactory terms and conditions, the Purchaser shall pay additional funds to the Vendor within six (6) months of the Decision or Subsequent Decision equal to the sum of:

ii) Seven Thousand Dollars ($7,000.00) for each residential unit approved in excess of One Thousand (1,000) units on the entire Property….

[5] An application was made in November 2003 to rezone parts of the subject property to residential and to increase the density coverage for all of the property.

[6] On January 24, 2005, the City of Vaughan passed By-law No. 5-2005 which adopted Amendment No. 621 to the Official Plan of the Vaughan Planning Area. Amendment No. 621 re-designates the subject lands High Density Residential and Open Space Park and states that the following policies shall apply to the High Density Residential lands:

▪ a maximum density of 1,598 units comprising 93 townhouse units and 1,505 apartment units, or a combination thereof not to exceed 1,598 units, shall be permitted, and the number of apartment buildings shall not exceed 7;

▪ the overall development of the subject lands shall be in accordance with a master plan approved by Council, and intended to guide future development within the Amendment No. 621 area, together with the submission of the following reports to be approved through consideration of a draft plan of subdivision application: urban design guidelines, landscape/streetscape and open space master plan, shadow study, traffic impact/phasing report, and any other reports considered appropriate by the municipality.

[7] In addition, the Amendment states that the Official Plan policies relating to “shall be implemented by way of an amendment to the Vaughan Zoning By-law, and Draft Plan of Subdivision and Site Plan approvals”.

[8] On the same day the City of Vaughan also passed By-Law No. 17-2005 which amended By-Law No. 1-88 to rezone the lands on terms indicating that some of the high density uses were subject to a Holding (H) provision under s. 36 of the Planning Act and that the Holding ‘H’ provision would be lifted in part “as individual site plans are approved by Council in accordance with a phasing plan identified in a Traffic Impact/Phasing Report approved by the City. The By-Law also provided for an adjustment in the number of specific types of units that could be constructed so long as “..the total combined number of residential units in the RA3 and RM2 Zones shall not exceed a maximum of 1,598 units.”

[9] On February 14, 2005, the Council of the City of Vaughan adopted Report No. 7 of the Committee of the Whole. Item 29 of that report included the following:

(a) Allocation of water and sewage capacity for an additional 984 units (i.e. a total of 1,598 units) and

(b) Approval of a traffic impact/phasing report prepared by Cansult Limited in August, 2004.

Item 29 also stipulated:

The final traffic report is to be approved by the Vaughan Engineering Department and the Region of York Transportation and Works Department, as a condition of subdivision approval. The implementing zoning by-law will include a Holding provision that will be lifted in part as individual site plans are approved in accordance with the above-noted phasing plan identified in the Traffic Impact/Phasing report by Cansult.

[10] On March 14, 2005, the Regional Municipality of York granted its approval of Official Plan Amendment No. 621, thereby approving the density increase to 1,598 units for the property.

[11] The appellants’ primary ground of appeal is that the motion judge erred in finding that the density increase was approved in “final form” on March 14, 2005 and that the bonus for the additional units was payable as a result. The appellants submit that the clause is unambiguous but, as set out in their factum, should be interpreted as follows:

… while the official plan amendment was adopted on March 14, 2005, thereby establishing a policy of increased coverage, that policy was not implemented concurrently by a zoning by-law as the latter was subject to an “H” or “hold” under s. 36 of the Planning Act [R.S.O. 1990, c. P-13]. The proposed density increase was ineffective until the “H” was removed. The “H” was removed on February 26, 2007 in respect of 1,380 units and the vast bulk of the bonus is therefore payable on August 26, 2007.

[12] The appellants do not dispute that they must pay the bonus contemplated in clause 5.01 of the Agreement for the 380 units (1,380 minus 1,000) no longer subject to a hold. With respect to those units, the only issue is the timing of payment. The appellants, however, maintain that the bonus for the other 218 units (1,598 less 1,380) will not be triggered until the hold is removed.

[13] The appellants further submit that if the clause is ambiguous, the motion judge erred in granting summary judgment where there are conflicts in the evidence of the planning experts called by the parties.

[14] The respondents’ position, which the motion judge accepted, is that the clause is unambiguous. The density increase to 1,598 had been granted in final form by all relevant governmental authorities on March 14, 2005 and the bonus was payable within six months of that date even though a hold under s. 36 of the Planning Act was in place. The respondents submit that it is immaterial that the units subject to the hold could not actually be built until the “H” was removed by the City of Vaughan.

[15] In our view, the motion judge correctly concluded that this matter falls to be determined on the interpretation of the Agreement, specifically clause 5.01 of the Agreement. The issue is whether the City of Vaughan granted the density increase in final form on Liberty’s initial application at the time the amendments and approvals described above were passed, thereby entitling the respondents to the bonus as set out in clause 5.01.

[16] We find no ambiguity in the language of the Agreement and therefore we do not need to look to extrinsic evidence for interpretative aid. It is not the role of judges to create ambiguity where none exists.

[17] The obligation to pay the bonus is triggered when the City of Vaughan, with the consent of all relevant governmental authorities, grants the density increase in final form on reasonably satisfactory terms and conditions.

[18] The Agreement is silent in respect of any implementation issues. As the respondents stated in their factum:

“H” removal is not part of, and has nothing to do with, the “initial Application” referenced in the Agreement, and it has nothing to do with density or an increase in density. In short, Liberty has been granted its density rights for 1,598 residential units. Whether Liberty implements or uses the density increase is a totally different issue which has nothing to do with triggering payment of the bonus under clause 5.01(i) of the Agreement. Liberty cannot utilize these density rights until individual site plans are approved by the City of Vaughan, but those rights are there and remain there indefinitely.

[19] In our view, the terms of s. 5.01 of the Agreement requiring that “the City of Vaughan, with the consent of all the relevant governmental authorities, has granted … the Density Increase on the initial Application [in final form]” were fulfilled when the Regional Municipality of York approved Official Plan Amendment No. 621 as previously adopted by the City of Vaughan.

[20] Reading the Agreement as a whole, including the recital indicating that the appellants intended to apply for an Official Plan Amendment and a rezoning of the Property, we conclude that the phrase “initial Application” as it appears in s. 5.01 of the Agreement refers to the request for an Official Plan Amendment increasing the maximum permitted number of units for the property. The fact that Amendment No. 621 stipulates that certain conditions must be fulfilled prior to the issuance of any building permits does not detract from the conclusion that approval of the density increase in final form has been granted on reasonably satisfactory terms and conditions.

[21] It follows therefore that there are no material facts in dispute requiring a trial.

[22] The appeal is dismissed.

Cross-Appeal

[23] The respondents cross-appeal the motion judge’s disposition of costs and seek an increased amount. They point to no error in principle but suggest a more reasonable figure would be $50,000 plus disbursements and G.S.T. as opposed to the all inclusive sum of $30,000 awarded by the motion judge.

[24] The awarding of costs is a matter within the motion judge’s discretion and absent error in principle this court will not interfere with the exercise of that discretion.

[25] The motion judge considered the offers made by the respondents and clearly expressed reasons for ruling as he did that the costs sought by the respondents were “grossly excessive”.

[26] The cross-appeal is dismissed.

[27] Costs of the appeal to the respondents fixed in the sum of $8,000.00 inclusive of disbursements and G.S.T. Costs of the cross-appeal to the appellants fixed in the sum of $1,500.00 inclusive of disbursements and G.S.T.

“Janet Simmons J.A.”

“J. MacFarland J.A.”

“Paul Rouleau J.A.”