Court of Appeal for Ontario
CITATION: Pointe East Windsor Limited v. Windsor (City), 2014 ONCA 467
DATE: 20140616
DOCKET: C58185
MacPherson, Simmons and Gillese JJ.A.
BETWEEN
Pointe East Windsor Limited
Applicant (Appellant)
and
Corporation of the City of Windsor
Respondent (Respondent)
Raymond G. Coulautti, for the appellant
Mark P. Nazarewich, for the respondent
Heard: June 10, 2014
On appeal from the judgment of Justice Terrence L. J. Patterson of the Superior Court of Justice, dated December 18, 2013.
By the Court:
BACKGROUND
[1] In late 2010, the City of Windsor (the “City”) negotiated with a company that manufactures wind towers to “set up shop” in Windsor. As part of its agreement to locate in Windsor, the company required the City to arrange for a rail line to be provided to its facility. A suitable location was found, with a nearby main railway line that could be extended to the proposed facility by a rail spur.
[2] Pointe East Windsor Limited (the “appellant) owned undeveloped land in the vicinity of the proposed facility. A part of its land was suitable for the rail spur.
[3] The City negotiated with the appellant to purchase a part of its lands. Through two agreements of purchase and sale, completed in December 2010, the appellant sold 60 acres of land to the City. The purchase agreements between the appellant and the City obligated the City to extend a road to the appellant’s remaining lands, when those lands were ready to be developed (the “road extension”).
[4] The appellant’s remaining lands consisted of approximately 160 acres of vacant land, located to the east of the land that the City had purchased. Twin Oaks Drive is a road that services an industrial area located to the west of the appellant’s remaining lands. The agreements specify that Twin Oaks Road is to be extended in a straight line from its terminus, in an easterly direction, to the boundary of the appellant’s remaining lands.
[5] The City then sold the property to the wind turbine company. Under the terms of the agreement, the City became obligated to provide rail access to the property by means of a rail spur.
[6] Before the road extension could be constructed over a rail line, legislation required that an environmental assessment be undertaken. The environmental assessment did not recommend that the road extension follow the route specified in the agreements between the appellant and the City because it would create a substandard road/rail at-grade crossing with poor sightlines. The environmental report recommended an alternative configuration for the road extension. Instead of being constructed directly east, as specified in the agreements between the City and the appellant, the road extension would be built indirectly to the appellant’s remaining lands.
[7] Absent significant expense, the rail spur cannot be built in any other configuration due to the standards that must be applied, given the land available and the size of the loads expected to travel along the line.
[8] It was only after the environmental assessment was performed that the City became aware that the road extension to the appellant’s lands could not be constructed in accordance with the agreed-upon route.
[9] The appellant brought an application for an order compelling the City to comply with its obligation to construct the road extension in accordance with the agreed-upon route.
[10] The City responded by acknowledging that as a result of building the rail spur, it would be unable to construct the road extension according to the agreed-upon route. It also acknowledged that this was a breach of a term of its agreements with the appellant and that it would pay such damages as were appropriate.
[11] The appellant’s position on the application was that the City should be ordered to: (1) not build the rail spur; and (2) extend the road according to the agreed-upon route. The appellant argued that not constructing the road extension according to the agreed-upon route would cause it substantial prejudice and irreparable harm.
[12] Specifically, the appellant contended that failure to construct the road extension according to the agreed-upon route would have an adverse effect on its ability to attract a “big box” store to locate on its remaining lands and that its remaining lands would be devalued. It led evidence from an expert with planning, but not marketing, credentials indicating that the alternative road extension route would adversely affect the value and marketability of the appellant’s lands.
[13] The City provided evidence from an expert with expertise in both planning and retail marketing and development. This expert opined that the proposed alternative route would cause little or no adverse effects on the development of the appellant’s remaining lands. In his view, it would not hinder the appellant’s ability to attract the type of development it wished. Among other things, the expert noted that the additional trip duration caused by the re-alignment would be very short and the vast majority of visitors to the site would use other roads that give access to the appellant’s remaining lands.
[14] The application judge found that the City had acted in good faith when it entered into the agreements with the appellant and the wind turbine company. He further found that the evidence did not establish that the appellant would suffer substantial prejudice or irreparable harm if the road extension were built indirectly so as to accommodate the rail spur. He also found that damages would be an adequate remedy for the City’s breach of contract.
THE ISSUES
[15] On appeal, the appellant submits that:
(i) the application judge erred in not ordering a permanent injunction preventing the City from constructing the rail spur;
(ii) alternatively, the application judge erred in dismissing the application in its entirety, rather than granting declarations that the City was in breach of its agreements and ordering a trial of an issue to determine damages.
ANALYSIS
[16] We accept neither submission.
[17] We see no error in the application judge declining to exercise his discretion to order a permanent injunction preventing the City from constructing the rail spur. Damages are typically ordered for breach of a contract and it is only where damages are inadequate that equitable relief may be available: UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., 2009 ONCA 328, [2009] O.J. No. 1606 (C.A.), at para. 96. In this case, the application judge found that damages were an adequate remedy so there could have been no error in his declining to order equitable relief.
[18] The appellant’s alternative argument must similarly fail. In the application, the appellant sought a permanent injunction. It did not seek damages in the alternative nor did it request the application judge to award or assess damages.
[19] The City maintains that because of the appellant’s tactical decision to not claim damages, the evidentiary record was insufficient to assess damages and the application judge committed no error in declining to address the issue. We agree. The application judge determined that damages are an adequate remedy for the breach of contract. If the appellant wishes to seek damages, it must do so in a properly pleaded fashion. We would add a comment in this regard. The appellant expressed concern that if it had to bring a proceeding to have damages quantified, there was the possibility of inconsistent verdicts. In light of the City’s admission that it would be in breach of the agreements because the road extension would not be constructed according to the agreed-upon route and the recording of this admission in the application, we do not see the possibility of an inconsistent position being taken on liability.
[20] As for the alleged error in failing to order the trial of an issue to quantify damages, the application judge can scarcely be faulted for failing to order relief that the appellant did not seek.
DISPOSITION
[21] Accordingly, the appeal is dismissed with costs to the City fixed at $15,000, all inclusive.
Released: June 16, 2014 (“J.C.M.”)
“J.C. MacPherson J.A.”
“Janet Simmons J.A.”
“E.E. Gillese J.A.”