City Front Developments Inc. v. Toronto Catholic District School Board, 2008 ONCA 641

CITATION: City Front Developments Inc. v. Toronto Catholic District School Board, 2008 ONCA 641

DATE: 20080923

DOCKET: C46980

COURT OF APPEAL FOR ONTARIO

Goudge, MacFarland and Rouleau JJ.A.

BETWEEN:

City Front Developments Inc.

Plaintiff (Respondent/Appellant by Cross-Appeal)

And

Toronto Catholic District School Board and Toronto District School Board

Defendants (Appellant/Respondent by Cross-Appeal Toronto District School Board)

Counsel:

Thomas McRae and Bryce Chandler for the appellants Toronto District School Board

Allan Sternberg for the respondent City Front

Heard: September 15, 2008

On appeal from the judgment of Justice Belobaba of the Superior Court of Justice dated March 14, 2007.

By the Court:

[1] The issue on this appeal is whether the trial judge erred in finding that the contract between the appellant and the respondent known as the Education Development Levy Agreement (the “EDLA”) is of no force and effect because it is conditional on the happening of events that now cannot happen.

[2] In general terms, the EDLA provides for payment by the respondent to the appellant of a school levy if there is development undertaken on certain lands owned by the respondent. It is common ground that when the EDLA was finalized, it referred, in using the phrase “the Zoning By-laws”, to a single proposed bylaw that would have permitted specified development on the respondent’s lands. The respondent’s quest to have this proposed bylaw enacted by the Ontario Municipal Board was proceeding at that time, but was ultimately abandoned, and it is clear that this will now not happen. The proposed bylaw will not become law.

[3] Was it a condition of the EDLA that the proposed bylaw become law? The appellant says no. The respondent says yes.

[4] In our view the trial judge was correct to agree with the respondent’s position.

[5] The EDLA relies on the concept of the Zoning Bylaw as an important building block in calculating the school levy. In doing so, it uses the phrase “the Zoning By-laws”. It does not speak of a “proposed” bylaw or a “draft” bylaw. The ordinary meaning of “Zoning By-law” is of something having independent legal effect. This is to be contrasted with the appellant’s proposed meaning, namely a draft document that has no independent legal effect. The use of the term “Zoning By-law” clearly implies the shared understanding of the parties that the proposed bylaw acquiring independent legal effect by becoming a zoning bylaw was an integral part of the EDLA.

[6] Secondly, the EDLA speaks of the Zoning By-law “creating” the Permitted Maximum Residential Density (the “PMRD”). In our view the Zoning By-law can only be said to create the PMRD if it has independent legal effect, that is has been enacted. As a draft document it can do no more than describe a proposed PMRD.

[7] Thirdly, the EDLA also relies on the concepts of “development site” (a part of the lands for which site plan approval has been obtained) and “development” (a development for which an application has been made for a building permit to build on a development site). It is consistent with the respondent’s position that these references are to site plans and building permits that depend upon the enactment of the proposed zoning bylaw. The site plans and building permits contemplated by the EDLA could not be obtained under the zoning as it existed when the EDLA was reached.

[8] We therefore agree with the trial judge that the language of the EDLA allows of only one interpretation on the fundamental issue: the agreement is premised on the enactment of the proposed bylaw. Since that will not now happen, the EDLA is of no force or effect.

[9] There is no need for us to address the issue of ambiguity.

[10] The appeal is dismissed.

[11] We did not call on the appellant to respond to the cross-appeal. The respondent’s attempt to claim damages for breach of a contract that it successfully argues is of no force or effect is a fruitless attempt to square the circle. The cross appeal is dismissed.

[12] The parties agree that costs should be to the successful party in the main appeal in the amount of $15,000. So ordered.

RELEASED: September 23, 2008 “STG”

“S.T. Goudge J.A.”

“J. MacFarland J.A.”

“Paul Rouleau J.A.”