Court and Parties

COURT OF APPEAL FOR ONTARIO

DATE: 20210317 DOCKET: M51329 & M51679 (C63933)

Before: Brown J.A. (Motions Judge)

BETWEEN

North Elgin Centre Inc. Applicant (Respondent) (Responding Party/Moving Party on cross-motion)

and

McDonald’s Restaurants of Canada Limited Respondent (Appellant) (Moving Party/Responding Party on cross-motion)

Counsel: Andrew Parley, Margaret Robbins and Sean Blakeley, for the moving party/appellant, McDonald’s Restaurants of Canada Limited Jeffrey E. Streisfield, for the moving party on the cross-motion/respondent, North Elgin Centre Inc.

Heard: December 7 and 8, 2020 by video conference

REASONS FOR DECISION

I. OVERVIEW

[1] McDonald’s Restaurants of Canada Limited (“McDonald’s”) moves for an order declaring North Elgin Centre Inc. (“NEC”) in contempt of the order of a panel of this court dated January 29, 2018 (the “Order”). That Order was made in respect of the renewal of a lease between NEC, as landlord, and McDonald’s, as tenant, for commercial property located in Richmond Hill, Ontario (the “Lease”).

[2] The Order declared that the Lease had been renewed for a first renewal term running from March 11, 2017 to March 10, 2027. Since the renewal term requires consent approval under s. 50(3)(f) of the Planning Act, R.S.O. 1990, c. P.13, [1] para. 3(b) of the Order states:

McDonald’s shall, within 30 days of the date of the issuance of the reasons by the Court, bring an application for the consent required under s. 50(3)(f) of the Planning Act and the Respondent, [NEC], shall provide all reasonable cooperation to obtain that consent.

[3] McDonald’s alleges that NEC has acted in ways that breached the Order’s requirement that it “provide all reasonable cooperation” to obtain the Planning Act consent.

[4] NEC has brought a cross-motion that seeks declaratory relief in the nature of defences to the contempt motion, as well as directions regarding its obligations under para. 3(b) of the Order.

[5] Contempt proceedings proceed in two stages: a liability phase, followed by a penalty phase: Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at para. 18. These are my reasons for the liability phase of McDonald’s contempt motion.

[6] As I will explain below, I dismiss McDonald’s motion. Given the basis for my conclusion that NEC is not in contempt of the Order, it is not necessary to decide the issues raised by NEC’s cross-motion, so I dismiss that motion.

II. JURISDICTION

[7] McDonald’s initially sought to bring its contempt motion before the panel that made the Order. The panel invited submissions from the parties on the appropriate procedure to hear the contempt motion. NEC’s submissions disclosed that it intended to bring a cross-motion seeking directions as to whether the Lease was void because Planning Act consent was not obtained before the expiry of 21 years or, alternatively, directions about what NEC could “do or not do having regard to paragraph 3(b) of the Court’s Order.”

[8] The panel advised that a settlement conference would take place before Pardu J.A., which occurred on June 10, 2020. No settlement was reached. By order dated June 19, 2020, Pardu J.A. gave directions regarding the hearing of the motions (the “Directions Order”).

[9] The Directions Order provided that “the motion for contempt and a motion for directions and for declaratory relief, if brought by North Elgin, be heard together by a single judge of the Court of Appeal.” However, “[t]his is without prejudice to the right of the judge hearing both motions to determine whether the court has jurisdiction to give the declaratory relief sought.”

[10] Neither party objects to a single judge of this court hearing the motions.

[11] Although the parties were not able to locate any jurisprudence of this court on the issue of the jurisdiction of a single judge to hear a contempt motion to enforce a panel order, [2] I am satisfied that the combined operation of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides such jurisdiction.

[12] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194 apply to all civil proceedings in the Court of Appeal, subject to a few exceptions which do not apply to these motions: r. 1.02(1). Rule 60.11(1) requires that a contempt order to enforce an order requiring a person to do an act must be obtained “on motion to a judge in the proceeding in which the order to be enforced was made.” Where the order to be enforced is one made by the Court of Appeal, a contempt motion therefore must be brought in the Court of Appeal.

[13] Section 7(2) of the CJA provides that a motion in the Court of Appeal shall be heard and determined by one judge, subject to the exceptions enumerated in s. 7(3), none of which include a contempt motion. I therefore conclude that a single judge of this court has the jurisdiction to hear a contempt motion to enforce an order made by a panel of the court.

III. BACKGROUND FACTS

A. The lease renewal dispute

[14] NEC owns a parcel of land at the north-east corner of Yonge Street and Bernard Avenue on which it operates a shopping plaza (the “Property”). Under the Lease that commenced March 11, 1997, NEC leases part of the Property to McDonald’s, which operates a restaurant on the demised premises.

[15] The initial term of the Lease was for 20 years, expiring on March 10, 2017, with McDonald’s having options to extend the term for two additional consecutive terms of ten years each. [3]

[16] The Property is located within a planning intensification area, known as a Key Development Area (“KDA”), in the 2010 Richmond Hill Official Plan. In 2016, the Town of Richmond Hill (the “Town”) initiated a process to prepare a secondary plan and zoning by-law for the KDA. As part of that process, NEC provided Town staff with a concept plan and parking strategy for the future development of the Property. The concept plan contemplates a high-density, mixed use, transit supportive development on the Property and shows that eventually a residential tower may be located on the site presently occupied by the McDonald’s restaurant. In late 2017, NEC and other area landowners appealed the secondary plan and zoning by-law to the Local Planning Appeal Tribunal.

[17] Section 19.10 of the Lease provides that it is subject to the Planning Act. As noted, s. 50(3)(f) of that Act provides, in part, that no person shall enter into any agreement that has the effect of granting the use of or right in land “directly or by entitlement to renewal for a period of twenty-one years or more unless … (f) a consent is given to convey, mortgage or charge the land, or grant, assign or exercise a power of appointment in respect of the land or enter into an agreement in respect of the land.” Section 19.10 of the Lease places the obligation on the landlord, NEC, to seek any Planning Act consent.

[18] In 2016, a dispute arose over McDonald’s exercise of its first right to renew the term of the Lease for an additional 10 years. The dispute went to court, where the application judge found that the Lease had come to an end in March 2017 as McDonald’s had failed to comply with the renewal provision: 2017 ONSC 3306, 87 R.P.R. (5th) 303.

[19] In January 2018, this court allowed McDonald’s appeal, declaring the Lease had been renewed for the first 10-year renewal term and referring the rent dispute for the renewal term to arbitration: 2018 ONCA 71, 87 R.P.R. (5th) 315, at para. 13. This court then dealt, at para. 14, with the need to obtain consent under the Planning Act for the first renewal term:

With regard to McDonald’s claim for an order requiring North Elgin to specifically perform its obligation to obtain a Planning Act consent, we note that the end of the 21st year under the Lease is fast approaching. We proposed to the parties in oral argument that the most sensible order would be one in which McDonald’s was permitted to immediately bring an application for the consent, and North Elgin would provide all reasonable cooperation to obtain the consent. The parties were agreeable to that order, and it shall issue.

[20] Para. 3(b) of the Order set out the parties’ obligations in respect of the Planning Act consent application, including requiring NEC to “provide all reasonable cooperation to obtain that consent.”

B. The Consent Application

Events from February until October 2018

[21] McDonald’s retained Dentons Canada LLP to prepare and file the Planning Act consent application (the “Consent Application”). Dentons had the Consent Application signed by Mr. Renzo Belluz, a NEC representative, and filed it with the Town on February 1, 2018.

[22] The Consent Application stated it sought “[c]onsent to a long term lease for a McDonald’s restaurant.” The covering letter for the application stated:

The subject McDonald’s Restaurant has been operating on the property for some time. The implementing (subject) lease permits McDonald’s Restaurant to use part (approximately 1,200 sq. m.) of our client’s property (as depicted on the enclosed Site Plan), along with non-exclusive rights for access and parking over the remainder of the property (therefore, easement approvals are not required).

The subject lease was for an initial term of twenty (20) years with a lease commencement date of March 1997. The lease has two (2) options to extend for ten (10) years each. It is these extensions that require Planning Act approval.

As you are aware, the Planning Act requires leases of this length of time and nature (i.e. not part of a building and not the entire site) to be approved by the Committee of Adjustment when the term extends beyond twenty-one (21) years less a day.

It is respectfully submitted that this application for consent to a lease supports the orderly development of the neighbourhood, is consistent with the Zoning By-law and complies with all of those matters that one must have regard to pursuant to Section 51(24) of the Planning Act, and that a plan of subdivision is not appropriate in this circumstance. [Emphasis added.]

[23] Town staff responded on March 21, 2018 advising that:

In order to understand the implications of the proposed consent, a Concept Plan (Section 5.2 of the OP) with a Planning Justification are required to demonstrate how the application conforms with the long term vision of the Town’s new Official Plan and recently adopted Yonge and Bernard Key Development Area Secondary Plan.

[24] In March and April 2018 emails sent to Dentons, Town staff raised a concern about how a long-term lease might freeze development on the Property to single storey buildings, which would not be in keeping with the Official Plan.

[25] In the summer of 2018 McDonald’s obtained from NEC copies of concept plans NEC had prepared in 2017 for the development of the entire Property. McDonald’s took the position that the 2017 concept plans did not make provision for a site for its restaurant and asked NEC to submit revised concept plans to the Town.

[26] By letter dated August 9, 2018, NEC’s counsel confirmed that “NEC is not only consenting to your client's application for Planning Act approval but has even allowed the application to be made by your client in its name. As far as the Town of Richmond Hill (“the Municipality”) is concerned, NEC is 100% behind the application for the Planning Act approval.” The letter noted that:

3. The reason the Municipality requested a Planning Justification Report in support of your client’s application is because your client’s application conflicts with and creates issues arising from (i) the Zoning By-Law, (ii) the Official Plan and (iii) an Interim Control By-Law…

4. Toward the bottom of page 4 of your letter, you are asking NEC to provide a “planning justification report outlining what is needed in order for the restaurant to comply.” However, it is strictly your client’s obligation to prepare and submit the Planning Justification Report supporting its application that has been requested by the Municipality…

5. You also seem to believe that any NEC concept plans have affected your client’s application. That is manifestly incorrect. What is relevant are the Municipality’s Zoning By-Law, Official Plan and Interim Control By-Law. While there is a non-conforming use for the leased lands, your client must nevertheless satisfy the Municipality with respect to its application for the Planning Act approval sought. It is simply up to your client to once and for all proceed with and submit a Planning Justification Report which will hopefully persuade the Municipality to approve the application for Planning Act approval.

[27] By October 2018 McDonald’s had retained Mr. Mike Crough, of the IBI Group, to assist with the Consent Application. In October 2018 the IBI Group discussed with the Town the requirements for a Planning Justification Report. The IBI Group prepared an initial draft report but, according to an affidavit sworn by Mr. Crough, there followed “a period of inactivity on the file” and the IBI Group did not communicate with McDonald’s “for several months”.

November 2018 until June 2019: the rent arbitration

[28] It appears that McDonald’s did not revive the work of the IBI Group until after the completion of the rental rate arbitration in June 2019.

[29] The rental rate arbitration was held in February and May 2019, with an Award issued on June 26, 2019. In that proceeding, McDonald’s obtained the production of the lease with one other tenant at the shopping plaza. NEC initially sought to appeal the Award but abandoned its application to do so.

June through August 2019: McDonald’s Planning Justification Report

[30] In June 2019, McDonald’s asked NEC to provide copies of current leases for other tenants in the shopping plaza so they could be used in the Consent Application. Extensive correspondence ensued between counsel for the parties, in which McDonald’s sought certain information from NEC that it needed to prepare a Planning Justification Report and in which NEC, in turn, sought access to the entire draft report. I need not delve into the details of the back-and-forth for present purposes. Suffice it to say that on September 10, 2019 McDonald’s filed with the Town a Planning Justification Report prepared by the IBI Group (the “IBI Report”).

September through November 2019: Town staff’s response to the IBI Report

[31] By email dated September 20, 2019, Town staff informed counsel for the parties that:

This is to advise that staff has reviewed the [IBI Report] and is prepared to concur with the conclusions and recommendations contained therein, provided the owner confirms in writing that he is aware of both the proposed lease and the pending development proposal to permit high density residential development on the subject lands.

[32] McDonald’s immediately sought from NEC the written confirmation asked for by the Town. Confirmation from NEC was not forthcoming, for reasons set out in NEC counsel’s October 2, 2019 email to McDonald’s:

The IBI report filed by McDonald's in support of the consent application (the September 2019 report) contains inaccurate statements (opinions) regarding the future development potential and timing of the NEC lands – which are acknowledged to be within a KDA and MTSA.

There appear to be at least two issues – (1) the temporal impact of a consent and (2) the spatial extent of any consent on the NEC lands.

1. The lease was renewed for a 10 year term (not up to 18 years and 4 months). This was not disclosed in the IBI report, and if disclosed may well support a consent limited to a 10 year term - which would expire in 2027.
2. In any event, the lease contains a no build zone clause (lease par 22.03 and schedule E4) - which consists of the entire NEC site. This clause (and its impact) was not disclosed or discussed in the IBI report, nor made known to the city planner or planning department who now request an acknowledgement letter from NEC. (Of course, the City knows that there is a Secondary Plan and Zoning Bylaw before LPAT for approval).

NEC does not wish to be a party to an application that potentially misrepresents information to the decision making tribunal (the committee of adjustment).

The question therefore is how we address these matters going forward – which is why a meeting has been requested in advance of a consideration to returning to the court for directions. I am available on Friday but prefer Monday Oct 7 in the AM. Please confirm. [Emphasis added.]

[33] Further correspondence ensued, including NEC’s advice that it intended to meet with Town staff. The IBI Group wrote to the Town and provided a copy of the Lease. That resulted in Town staff’s November 1, 2019 email to the parties that stated, in part:

In the interim, staff has carefully reviewed your e-mail below and are therefore satisfied the Owner is aware of both the proposed lease and the pending development proposal to permit high density residential development on the its land holdings. Given the above, we no longer believe a meeting is necessary and are prepared to move forward with the application for consent. Please advise if you concur.

[34] Then, on November 8, 2019, Town staff further advised:

Consent application B012/18 has been placed into our priority queue for the January 2020 circulation. Our internal meeting takes place on December 10, 2019 and applicants will be notified by email by the end of the week if they have been scheduled. Please open the acknowledgement letter contained in that email to advise you when signs are available for pick-up and the date staff reports will be ready.

December 2019: the MPlan Report

[35] On December 6, 2019, a few days prior to Town staff’s scheduled internal meeting, NEC filed a report prepared by MPlan Inc. “as NEC’s input” on the Consent Application.

[36] The MPlan Report commented on the Consent Application and the IBI Group Report. The MPlan Report made the following recommendations concerning the consent application:

In order for the proposed Consent Application to be supportable, the following CONDITIONS OF APPROVAL are necessary and reasonable:

1. The Consent shall be limited to 8 years, being the remaining portion of the renewal term. The owner or McDonalds may apply for a further Consent should McDonald’s seek to renew the lease for the 2nd renewal term.

Reason: The Lease was only renewed for the 1st renewal term.

2. The Consent shall apply to the area of land shown on Appendix B.

Reason: Appendix B ensures that the subject lands can be redeveloped in phases, if necessary, in accordance with the Provincial, Regional and Municipal mandated intensification policies including provision of more affordable housing options including purpose built rental units, while providing for McDonald’s continued use of the severed lands for the remainder of the renewal term.

3. The consent approval does not apply to, and no sanction is given to, Section 22.03 and Schedule E-4 to the Lease and to Sections 22.01, 22.02 and 22.04 of the Lease.

Reason: The No Build Zone provision and related sections sterilize the NEC property and therefore do not meet the Planning Act requirements referred to above. The condition is intended to ensure that consent to the 1st renewal term does not freeze development on the retained lands and removes any restriction that would otherwise prevent development from occurring in a phases, with the south west corner of the property potentially be redeveloped last. [Emphasis added.]

[37] In general terms, ss. 22.01 to 22.04 of the Lease allow McDonald’s, and its customers, the right to use the parking areas and other outdoor common areas of the shopping plaza and prohibit NEC from building on any part of the common areas shown with hatch marks on Schedule “E-4” to the Lease. The hatched area constitutes a significant portion of NEC’s Property.

[38] In response to the MPlan Report, on December 12, 2019 Town staff advised that the Consent Application “has been deferred until such a time that it has been determined what the actual request is and the owner is satisfied.”

[39] On December 17, 2019, the IBI Group wrote to the Town stating, in part:

I do not agree with the conditions or modifications proposed in the North Elgin Report. Specifically, I do not agree with the proposal to reduce the time period nor the expanded spatial area proposed.

[40] In January 2020, Town staff advised NEC’s counsel that: (i) the Committee of Adjustment considered the Consent Application to be incomplete, hence the deferral; and (ii) the Committee of Adjustment would require the Property’s owner to be satisfied with the Consent Application and would ensure that the Consent Application and submitted drawings were complete.

C. THE MOTIONS

[41] McDonald’s alleges that by filing the December 2019 MPlan Report NEC breached para. 3(b) of the Order, which requires NEC to provide “all reasonable cooperation” for the Consent Application. McDonald’s seeks a declaration that NEC is in contempt of the Order, the imposition of a fine on NEC, and an order requiring NEC to withdraw the MPlan Report from the Consent Application.

[42] NEC’s cross-motion has two aspects. First, NEC seeks certain declarations that would operate, in effect, as defences to the contempt motion. Specifically, NEC seeks orders that the Lease came to an end in March 2018, 21 years after its commencement, with the result that the contempt motion is moot. Second, NEC seeks an order explaining what para. 3(b) of the Order requires it to do.

IV. CONTEMPT: THE GOVERNING PRINCIPLES

[43] Civil contempt consists of the intentional doing of an act which is prohibited by a court order: Carey, at para. 26. As summarized in Carey, at paras. 32 to 35, civil contempt has three elements that must be established beyond a reasonable doubt:

(i) the order alleged to have been breached must state clearly and unequivocally what should and should not be done. An order may be found to be unclear if: it is missing an essential detail about where, when or to whom it applies; it incorporates overly broad language; or external circumstances have obscured its meaning;

(ii) the party alleged to have breached the order must have had actual knowledge of it. Actual knowledge may be inferred from the circumstances or an alleged contemnor may attract liability on the basis of the wilful blindness doctrine; and

(iii) the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels. All that is required to establish civil contempt is proof beyond a reasonable doubt of an intentional act or omission that is in fact in breach of a clear order of which the alleged contemnor has notice: Carey, at para. 38. Contumacy – the intent to interfere with the administration of justice – is not an element of civil contempt and lack of contumacy is therefore not a defence: Carey, at para. 29.

[44] With civil contempt, where there is no element of public defiance, the purpose of a contempt order is seen primarily as coercive rather than punitive, with the court attempting to obtain compliance with its order: United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901, at p. 943, per Sopinka J., in dissent; Chiang (Re), 2009 ONCA 3, 93 O.R. (3d) 483, at para. 11. To that end, r. 60.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 contemplates that a judge may set aside a finding of contempt if the contemnor subsequently complies with the order or otherwise purges his or her contempt or, in exceptional circumstances, where new facts or evidence have come to light after the contempt finding was made: Carey, at paras. 62, 64 and 66.

[45] As the contempt power is discretionary, courts have consistently discouraged its routine use to obtain compliance with court orders. It should be used cautiously and with great restraint; it is regarded as an enforcement power of last, not first, resort. So, where an alleged contemnor acted in good faith in taking reasonable steps to comply with the order, the judge entertaining a contempt motion generally retains some discretion to decline to make a finding of contempt. As well, a judge may properly exercise his or her discretion to decline to impose a contempt finding where it would work an injustice in the circumstances of the case: Carey, at paras. 36-37.

[46] As a procedural matter, the party seeking a finding of contempt must clearly specify the act or omission that constitutes the contempt. The usual requirement is that the notice of motion set out the particulars of the alleged contempt: Bell ExpressVu Limited Partnership v. Corkery, 2009 ONCA 85, 94 O.R. (3d) 614, at paras. 17, 20 and 42-45; Rocca Dickson Andreis Inc. v. Umberto Andreis, 2013 ONSC 5508, 111 W.C.B. (2d) 587 (Div. Ct.), at para. 20; and Dare Foods (Biscuit Division) Ltd. v. Gill, [1973] 1 O.R. 637 (H.C.), at p. 639.

V. APPLICATION OF THE GENERAL PRINCIPLES

A. Framing the key issue in dispute

[47] There is no dispute that NEC knew about and understood the Order. On his examination, Mr. Renzo Belluz, a principal of NEC and a practising planning lawyer, acknowledged that he had read the Order and understood what it required NEC to do. Further, the evidence clearly shows that NEC retained MPlan to prepare and file the report on its behalf. As a result, the filing of the MPlan Report with the Town certainly was an intentional act by NEC. As acknowledged in MPlan’s filing letter of December 6, 2019, the MPlan Report served “as NEC’s input” to the Consent Application, as well as a review of the IBI Report.

[48] The key issue then boils down to whether the filing of the MPlan Report was a breach of para. 3(b) of the Order that required NEC to “provide all reasonable cooperation to obtain [the] consent” sought by McDonald’s from the Town pursuant to the Planning Act.

[49] That is the issue I intend to address in the balance of these reasons. Before doing so, I wish to address two issues raised by the parties.

[50] First, in its factum McDonald’s points to conduct by NEC other than the filing of the MPlan Report that it alleges disrupted the Consent Application process, such as delays by NEC in responding to communications by McDonald’s and NEC’s refusal to comply with simple requests from McDonald’s and the Town. Apart from the fact that McDonald’s did not plead in its notice of motion that such conduct amounted to acts of contempt, in my view the conduct did not materially affect the prosecution of the Consent Application. Notwithstanding McDonald’s own delay of close to 10 months in prosecuting the Consent Application, the reality was that by early November 2019 Town staff had advised McDonald’s that they were prepared to move forward with the Consent Application, which had been placed in the priority queue for circulation.

[51] Second, on its part NEC asserts, by way of a defence to the contempt motion, that no Lease existed after March 2018, following the expiry of 21 years from the commencement of the Lease, with the result that the contempt motion is moot. However, as of December 6, 2019, when NEC filed the MPlan Report, the Consent Application was very much alive and before the Town’s Committee of Adjustment for consideration. The MPlan Report, which purported to provide the Committee of Adjustment with NEC’s “input” on the Consent Application, did not take the position that the Lease was at an end and therefore the Committee of Adjustment should or could not consider the Consent Application. Instead, NEC took the position that the Consent Application could be supported, subject to conditions set out in the MPlan Report. Given that position, I do not consider it necessary to determine what appears to be a defence constructed after-the-fact in response to the contempt motion and which is inconsistent with the position NEC took in the MPlan Report.

[52] Accordingly, the balance of these reasons will focus on what I regard as the determinative issue, namely: whether NEC’s filing of the MPlan Report was a breach of para. 3(b) of the Order.

[53] I will proceed with some caution. Although consideration of the Consent Application by the Committee of Adjustment has been deferred, the application remains alive. Consequently, I will decide the contempt motion but in a manner that recognizes the future conduct of the Consent Application lies within the jurisdiction of the Committee of Adjustment.

B. The positions of the parties

[54] McDonald’s takes the position that by filing the MPlan Report, NEC directly opposed the Consent Application. While the MPlan Report nominally supported the Consent Application, by including conditions for granting consent approval the report effectively opposed the relief sought by McDonald’s.

[55] McDonald’s contends that by retaining MPlan to prepare and file the Report, NEC directly and deliberately hindered the Consent Application in breach of the Order or, alternatively, acted in a manner indifferent, reckless or willfully blind to conduct carried out in violation of the Order.

[56] In response, NEC submits that the Order did not prohibit it from filing the MPlan Report. The IBI Report contained errors and material omissions that the MPlan Report sought to correct. As well, the MPlan Report contains planning reasons and explanations to the Committee of Adjustment as to how the Consent Application could be approved.

C. Analysis

The context in which to assess the allegations of contempt

[57] Section 19.10 of the Lease stipulates that it is subject to the Planning Act. In considering the Consent Application, the Committee of Adjustment will consider the renewal of the Lease in the context of the various public planning instruments and policies in effect. Town staff pointed this out to McDonald’s in its March 21, 2018 communication that requested McDonald’s to file a concept plan, together with a Planning Justification Report.

[58] Some 17 months after the Town had made its request, McDonald’s sought to satisfy it by filing the IBI Report. McDonald’s did not provide NEC with the report for review before submitting it; NEC received a copy of the report the day before its filing. The IBI Report went into great detail about the implications of the renewal of the Lease for planning policies contained in instruments issued by various levels of government.

[59] Three aspects of the IBI Report are of particular relevance to the contempt motion:

(i) The Consent Application signed by NEC’s representative referred simply to a consent for “a long term lease for a McDonald’s Restaurant”. The February 1, 2018 covering letter from Dentons indicated that Planning Act approval was sought for the two ten-year options to extend under the Lease. The IBI Report indicated that consent was being sought for the two renewal periods. The IBI Report did not disclose that the Order only renewed the Lease for the first 10-year renewal term;

(ii) The IBI Report included a sketch, Figure 4-1, that outlined in red the demised premises that are subject to the proposed extension of the Lease. The report states that “the proposed extension of the existing lease area would occupy approximately 7% of the total site area, and does not include vehicular or pedestrian access points to external roads. The area covers the existing McDonald’s restaurant building, immediately adjacent walkway and landscape areas, the existing drive through lane, a small portion of the westerly internal drive aisle, and two accessible parking spaces.” This point is repeated in the report’s conclusion, which states that “[t]he spatial extent of the lease is based on existing and approved development on the subject lands, which permits the stand-alone McDonald’s restaurant”; and

(iii) The IBI Report emphasized in several places that the Consent Application and the Lease would not prevent growth and development from occurring on the NEC Property. For example, s. 5.1.1. of the IBI Report stated that “[t]he area of the lands not subject to the proposed extension of the existing lease provides sufficient space and frontage for phased or complete development/re-development in the future, should that occur.”

[60] On its face, the filing of the MPlan Report was NEC’s attempt to draw to the Committee of Adjustment’s attention certain aspects of the Consent Application that it thought affected its interest as owner of the Property, of which the demised premises formed only a small part. The MPlan Report stated that it intended to provide NEC’s “input” to the Consent Application, comment on the IBI Report, and respond to requests by Town staff that it confirm it was aware of and supported the Consent Application.

[61] The Committee of Adjustment has not denied the Consent Application; it has deferred considering the application until the parties provide it with requested clarification.

[62] That is the context in which McDonald’s allegation that NEC has breached the Order’s requirement that NEC provide “all reasonable cooperation” must be assessed.

[63] I shall now consider McDonald’s allegation that by filing the MPlan Report NEC breached para. 3(b) of the Order.

First allegation: The MPlan Report opposed the Consent Application

[64] McDonald’s alleges that the MPlan Report is explicitly contrary to the Consent Application because it does not support the application. I am not persuaded by that submission. A plain reading of the MPlan Report reveals that it supports a consent application, a point acknowledged on cross-examination by Mr. Crough from IBI. However, the MPlan Report proposed three conditions of approval. As I will explain in the next few paragraphs, I conclude that NEC had a legitimate interest in proposing the conditions of approval and by doing so did not breach its obligation to provide “all reasonable cooperation.”

Second allegation: The MPlan Report improperly proposed a temporal limit on the consent

[65] McDonald’s next alleges that the MPlan Report is explicitly contrary to the Consent Application because it proposed that consent approval be limited to the initial 10-year renewal period, not to the two 10-year lease renewal options contained in the Lease. While it is true that NEC’s proposal to limit consent approval is inconsistent with McDonald’s application to obtain approval for the two renewal periods, NEC’s proposal does not amount to a breach of para. 3(b) of the Order. Since the Order only declared that the Lease had been renewed for the first 10-year renewal term, NEC’s obligation to provide reasonable co-operation under para. 3(b) of the Order only extended to an application that sought approval for the first renewal period sanctioned by this court.

Third allegation: The MPlan Report improperly proposed a geographical limit on the consent

[66] McDonald’s alleges that the MPlan Report is explicitly contrary to the Consent Application by proposing that any consent provided “be geographically limited in a manner that conflicts with McDonald’s rights under the Lease.” This allegation has two parts.

[67] The first part of the allegation asserts that one condition of approval proposed by the MPlan Report would modify the area to which any consent would apply to ensure that NEC could redevelop the rest of the Property in accordance with applicable planning intensification policies and plans. It is true that the MPlan Report proposed such a modification, but the modification was more spatially favourable to McDonald’s than that contained in the IBI Report and was consistent with the extent of the demised premises under the Lease.

[68] Over the years, the Lease had undergone several amendments that expanded the size of the demised premises, in large part to enable McDonald’s to expand the restaurant’s drive-through. Under the Lease, the demised premises were L-shaped. The IBI Report proposed, in Figure 4-1, that the lands for which consent be given track the L-shape of the demised premises.

[69] The MPlan Report proposed that consent approval be given to a larger, rectangular area of the Property that would include the L-shaped demised premises, together with additional parts of the Property. The MPlan Report contended that the larger, more regular shape of the area, to which consent approval should apply, would facilitate the orderly development of the balance of the NEC Property. To be clear, NEC was not proposing that consent approval be given to an area smaller than the demised premises under the Lease. Quite the opposite. NEC proposed that consent approval be given to an area larger than the demised premises. In those circumstances, I am not persuaded that such a proposal amounted to a failure to provide “all reasonable cooperation” required by para. 3(b) of the Order.

[70] The second part of the allegation asserts that NEC’s proposal that consent approval should not apply to the No Build Zone provisions of the Lease was contrary to the Consent Application and a breach of the Order. Article XXII of the Lease deals with common areas. Sections 22.01 to 22.04 of the Lease allow McDonald’s, and its customers, the right to use the parking areas and other outdoor common areas of the shopping plaza and prohibit NEC from building on any part of the common areas shown with hatch marks on Schedule “E-4” to the Lease. The hatched area constitutes a significant portion of NEC’s Property.

[71] The MPlan Report proposed that consent approval not apply to the No Build Zone Lease provisions as those provisions “sterilize the NEC property and therefore do not meet the Planning Act requirements referred to above. The condition is intended to ensure that consent to the 1st renewal term does not freeze development on the retained lands and removes any restriction that would otherwise prevent development from occurring in a phases, with the south west corner of the property potentially be redeveloped last” [sic].

[72] McDonald’s alleges that this proposal in the MPlan Report is contrary to the Consent Application. I am not persuaded that it is. First, the Consent Application, the Denton’s covering letter, and the IBI Report did not make any mention of the Lease’s No Build Zone provisions. It is difficult to see how the MPlan Report’s proposal could be inconsistent with a matter that was not disclosed by McDonald’s in its Consent Application. Indeed, it is not clear from the record why the IBI Report failed to address the implications of the Consent Application for the Lease’s No Build Zone provisions.

[73] Further, the MPlan Report’s proposal is consistent with the numerous representations made by the IBI Report that approval of the Consent Application would not prevent growth and development from occurring on the rest of the Property.

[74] Finally, the Lease’s renewal terms are subject to the Planning Act. McDonald’s is not entitled as of right to consent approval under s. 50(3)(f) of the Planning Act. McDonald’s must demonstrate to the Committee of Adjustment that the consent it seeks is consistent with the planning principles relevant to the granting of such consent. Within two months of the filing of the Consent Application, Town staff clearly signalled the need for McDonald’s to provide a concept plan and planning justification, which in part would address the impact of any consent approval on the future development of the remainder of the Property. NEC had a legitimate interest in ensuring that the Committee of Adjustment was aware of provisions of the Lease, such as the No Build Zone provisions, that could impact such future development.

[75] Accordingly, I conclude that the three conditions of approval proposed in the MPlan Report reflected legitimate concerns of NEC, as owner of the remainder of the Property, about relevant issues that McDonald’s had not identified in its Consent Application. On their face the proposed conditions were not designed to defeat the Consent Application, but to support the granting of consent approval that took into account NEC’s legitimate concerns. As a result, I do not see the content of the MPlan Report, including its proposed conditions of approval, as constituting a breach by NEC of its obligation to provide “all reasonable cooperation” under the Order.

Fourth allegation: The mere filing of the MPlan Report breached the Order

[76] McDonald’s advances one final argument. It contends that the mere filing of the MPlan Report constituted an act of contempt because it resulted in the Committee of Adjustment deferring consideration of the Consent Application. I am not persuaded by this submission. Para. 3(b) of the Order did not sanction a process in which McDonald’s was permitted to proceed with its Consent Application on a kind of ex parte basis, with no ability for the landowner, NEC, to raise legitimate planning issues or point out inaccuracies in McDonald’s application. The evidence discloses that at various points NEC sought to provide some input into the application but was rebuffed by McDonald’s. In those circumstances, it is understandable that NEC would want to place before the Committee of Adjustment information it thought relevant to a complete consideration of the Consent Application and its approval on a basis that was fair to the legitimate interests of both tenant and landlord. In the circumstances, I do not regard NEC’s filing of the MPlan Report as a breach of para. 3(b) of the Order.

D. Conclusion

[77] By way of summary, I am not satisfied that McDonald’s has established, beyond a reasonable doubt, that NEC’s filing of the MPlan Report constituted a failure by NEC to provide “all reasonable cooperation” to obtain Planning Act consent.

[78] Consequently, I dismiss McDonald’s contempt motion.

VI. NEC’S CROSS-MOTION

[79] I have treated the relief sought by NEC in paras. (a) through (d)(ii) of its notice of motion as forms of defence to McDonald’s contempt motion. As I have been able to decide the contempt motion on other grounds, it is not necessary to consider those requests for relief by NEC.

[80] In para. (d)(iii) of its notice of motion NEC seeks further explanation of the meaning of para. 3(b) of the Order. As a single judge, I cannot vary the order made by a panel which, in effect, is the nature of NEC’s request. In any event, the Order is clear and speaks for itself; no further explanation is required.

[81] Accordingly, I dismiss NEC’s motion.

VII. DISPOSITION

[82] For the reasons set out above, I dismiss the motions brought by McDonald’s and NEC.

[83] Should any party decide to seek costs of the motions, it may file brief (no more than 7 pages) cost submissions within 10 days of the release of these reasons. The party against whom costs are sought may file brief (no more than 7 pages) responding submissions within 10 days thereafter.

“David Brown J.A.”

[1] Planning Act, s. 50(3): No person shall convey land by way of a deed or transfer, or grant, assign or exercise a power of appointment with respect to land, or mortgage or charge land, or enter into an agreement of sale and purchase of land or enter into any agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more unless,

(f) a consent is given to convey, mortgage or charge the land, or grant, assign or exercise a power of appointment in respect of the land or enter into an agreement in respect of the land …

[2] The case law on this issue is sparse. In Peel Financial Holdings Ltd. v. Western Delta Lands Partnership, 2003 BCCA 551, [2003] B.C.W.L.D. 890, at paras. 11-17, a single judge of the British Columbia Court of Appeal relied on the provisions of the Court of Appeal Act, R.S.B.C. 1996, c. 77, to conclude that he had the jurisdiction to hear a contempt motion to enforce an order made by a single judge of the Court of Appeal.

[3] Pursuant to the terms of the Lease and a 2015 Second Amending Agreement.