Court of Appeal for Ontario

Date: September 19, 2017 Docket: C63465

Justices: Hoy A.C.J.O., MacFarland and Huscroft JJ.A.

Between

Nylene Canada Inc. Plaintiff (Appellant on Appeal)

and

Corporation of the Town of Arnprior Defendant (Respondents on Appeal)

Counsel

Pasquale Santini, for the appellant

Paul A. Webber and Melanie H. Levesque, for the respondents

Heard and released orally: September 12, 2017

On appeal from: the order of Justice Robert J. Smith of the Superior Court of Justice, dated February 1, 2017.

Reasons for Decision

[1] The respondent, the Corporation of the Town of Arnprior, charged wastewater processing fees based on wastewater rates multiplied by the amount of a user's water consumption. The appellant, Nylene Canada Inc., commenced an action against the respondent alleging that charging for wastewater processing services based on water consumption, rather than the amount of water that actually exits as wastewater, contravened s. 394(1)(c) of the Municipal Act. That provision prohibits a municipality from imposing a fee or charge based on the use of a service, other than a service provided by the municipality. The appellant pleads that the respondent has been unjustly enriched by charging on the basis that it has and was negligent in failing to implement a system where users can apply for a rebate for sewer capacity they did not use.

[2] In response, the respondent brought a motion for summary judgment dismissing the appellant's claim.

[3] The motion judge concluded that he could make a fair and just determination under r. 20 of the Rules of Civil Procedure because the facts were largely not in dispute and there were no issues of credibility. He concluded that the respondent did not violate s. 394(1)(c) and had made a policy-based decision that was immune from civil action under s. 450 of the Municipal Act. That section provides, in relevant part, that no proceeding based on negligence in connection with the exercise or performance of a discretionary power or function shall be commenced against the municipality if the action "results from a policy decision of a municipality…made in a good faith exercise of the discretion".

[4] The motion judge granted summary judgment dismissing the appellant's action.

[5] The appellant concedes that this was a proper case for summary judgment, and that the respondent made a policy decision. However, he argues that the decision is not immune from civil action under s. 450 because the decision violated s. 394(1)(c) and, therefore, was not "made in a good faith exercise of the discretion". He acknowledges that if we agree with the motion judge's interpretation of s. 394(1)(c), the appeal fails.

[6] We agree with the motion judge that the respondent did not violate s. 394(1)(c): the respondent imposed a fee or charge based on the use of the service, namely wastewater processing services that it provided to all its rate payers.

[7] Accordingly, the appeal is dismissed. The respondent shall be entitled to its costs of the appeal fixed in the amount of $15,000, inclusive of HST and disbursements.

"Alexandra Hoy A.C.J.O."

"J. MacFarland J.A."

"Grant Huscroft J.A."