COURT OF APPEAL FOR ONTARIO

CITATION: Markham (City) v. Ross, 2024 ONCA 161

DATE: 20240229

DOCKET: COA-23-CV-0068

van Rensburg, Roberts and Gomery JJ.A.

BETWEEN

The Corporation of the City of Markham

Applicant (Respondent)

and

Martin Ross

Respondent (Appellant)

Arkadi Bouchelev, for the appellant

Chris Barnett and Andrew Rintoul, for the respondent

Heard: February 16, 2024

On appeal from the judgment of Justice Suzan Fraser of the Superior Court of Justice dated December 6, 2022, with reasons reported at 2022 ONSC 6891.

REASONS FOR DECISION

[1] Martin Ross appeals a judgment granting the Corporation of the City of Markham’s application to enforce various rights under a Heritage Easement Agreement registered on the title of Mr. Ross’s property in Unionville, Ontario. The application judge held that Mr. Ross had breached his obligations under the Agreement, and that these breaches entitled the City to enter upon the property to conduct remedial work at Mr. Ross’ expense. The application judge also granted a permanent injunction preventing Mr. Ross from undertaking any further work on the rear yard of the property in breach of the Agreement and any applicable municipal by-laws.

[2] The appellant’s Unionville property consists of a house built between 1859 and 1870, known as the John M. Ramer House, as well as the land on which it sits. The Agreement was entered into by the City and previous owners of the property and notice of the easement was registered on title in 2004 under ss. 37(3) of the Ontario Heritage Act, R.S.O. 1990, c. O.18. Under the Agreement, the owner is prohibited from making certain types of alterations to the property without the City’s prior written approval. Some prohibitions are specific to the house. Others pertain to the land on which it sits. For example, under s. 2.8 of the Agreement, the owner is prohibited from committing “acts of waste” on the land without the City’s prior written approval. This includes erecting any “building, sign, fence or other structure of any type whatsoever”, allowing any “changes in the general appearance or topography of the lands”, except for the maintenance of existing improvements, and (with some exceptions) removing or cutting trees.

[3] The appellant purchased the property, subject to the Easement Agreement, in 2011. He applied for tax reductions for the 2013, 2014, 2016 and 2017 taxes years pursuant to the City’s Heritage Property Tax Reduction Program and received tax rebates of $1,164 and $1,372 for the latter two years.

[4] Beginning in the spring of 2021, the appellant began cutting down trees and regrading his backyard. He then laid a 60 foot by 80-foot concrete pad for a hockey rink and installed a cabana made from one or more repurposed shipping containers. All these steps were taken without the City’s authorization, and before the appellant sought permits required for the work.

[5] When the City was alerted to the appellant’s actions, it sent him a series of notices between May 2021 and September 2022, advising him that he was in breach of the Agreement and municipal by-laws. It also gave him verbal warnings. The appellant did not restore the property to its original state, although he did plant some trees. Over this same period, the appellant was charged under the Provincial Offences Act, R.S.O. 1990, c. P.33 and convicted of violating the City’s tree preservation by-law, the Building Code Act, 1992, S.O. 1992, c. 23, and the Fire Code and Fire Protection and Prevention Act, 1997, S.O. 1997, c. 4. His application for a retroactive Heritage Permit was denied in late September 2021.

[6] The City commenced its application for orders to enforce the Easement Agreement in April 2022. In her December 2022 judgment, the application judge found that the appellant had violated s. 2.8 of the Agreement. She rejected his argument that it prohibited only activities that might negatively affect or detract from the architectural value of the house. Reading the Agreement as a whole, she concluded that the parties intended “to cede a large measure of control over the Property, including the grounds, to the City.” She found that there was “no question” that the appellant had breached the Agreement.

[7] The appellant has not identified an extricable error of law or a palpable and overriding mixed error of fact and law in the application judge’s interpretation of the Agreement, her appreciation of the evidence, or her assessment of the remedies sought by the City.

[8] The appellant contends that the application judge failed to interpret the appellant’s obligations under s. 2.8 in the context of the Agreement’s objectives, or to meaningfully consider evidence that the City’s reaction to the work on the property was based not on a genuine desire to preserve the heritage aspects of his property but was instead motivated by political or other purposes. He relies, in particular, on a report by City staff which recommended that the appellant be retroactively granted a Heritage Permit.

[9] The appellant advanced these same arguments at the application hearing. The application judge considered and rejected them. This court must defer to the application judge’s assessment of the evidence in the absence of any palpable or overriding error. We see none here.

[10] The appellant contends that the application judge’s decision sets a dangerous precedent because she found that the Agreement gives the City the sole discretion to decide if the appellant has breached his obligations and whether any such breach has been sufficiently remedied. The City acknowledged in oral argument, however, that it must exercise its discretion in good faith. As this court stated in Marshall v. Bernard Place Corp. (2002), 2002 CanLII 24835 (ON CA), 58 O.R. (3d) 97 (C.A.), at para. 20:

The requirement of honesty and good faith applies whether the exercise of discretion is measured by an objective or subjective standard … No contractual discretion is absolute, in the sense of authorizing the capricious or arbitrary exercise of the discretion. Greenberg confirmed that even a broadly stated contractual discretion is not "unbridled" and is subject to established limits. Further, as illustrated in Inglis, even where the operative standard of reasonableness is an objective one, it can only be satisfied if the discretion or opinion at issue was "reasonably formed" in the circumstances. [Citations omitted.]

[11] We are satisfied that this case does not establish a precedent allowing the City to exercise an unfettered discretion to interfere with a property owner’s rights. The outcome was driven by the specific facts of this case. The appellant violated the Easement Agreement on any reasonable reading of s. 2.8. There is no evidence that the City acted capriciously, arbitrarily, or in bad faith. The application judge found that the appellant continued to violate the Agreement despite receiving notices and verbal warnings and being charged and convicted of breaching building code, fire code, and municipal by-law requirements. She found the situation was so exceptional that it warranted the granting of both declaratory relief and a permanent injunction.

[12] The appeal is therefore dismissed. The appellant is ordered to pay costs of $24,000 to the respondent.

“K. van Rensburg J.A.”

“L.B. Roberts J.A.”

“S. Gomery J.A.”