Ontario Court of Justice

Date: December 1, 2017

Between

Oshawa (City) Appellant

— and —

536813 Ontario Limited Respondent

Heard: September 13, 2017

Submissions: October 7 and 27, 2017

Reasons for Judgment released: December 1, 2017

Counsel:

V. Sukdeo, R. Vanderlinde — Counsel and Prosecutor for the Appellant

R.J. Fenn, A. Wilson, A.L. Tomlinson — Counsel for the Respondent

Felix J.:

Table of Contents

I. Decision on Appeal II. Decision regarding Costs III. Jurisdictional Framework for the Appeal IV. Standard of Review V. The Appellant's Position VI. Analysis of the Judgement at Trial on the Merits VII. The Decision to Order Costs VIII. Conclusion: Costs

Introduction

[1] The Building Code Act (Ontario), 1992, S.O. 1992, c. 23 imposes the requirement of a permit prior to constructing or renovating buildings in Ontario. The enforcement of this provincial legislation in Oshawa has been delegated to the Corporation of the City of Oshawa. Prosecutions of building code violations are conducted by counsel and paralegal prosecutors appearing on behalf of the City of Oshawa pursuant to Part X of the Provincial Offences Act (Ontario), R.S.O. 1990, c. P. 33.

[2] On November 4, 2013, the corporate respondent was charged with failing to obtain a building permit prior to renovating an aircraft hangar contrary to s. 8(1) of the Building Code Act. The aircraft hangar in issue was built by a real estate corporation named Hangarminiums in 2009 as part of a complex of aircraft hangars at the Oshawa Airport. Ultimately the aircraft hangars were sold to individual aircraft owners. The corporate respondent is a corporation solely owned by a local businessperson named Mr. Philip Sciuk. He owns one of the Hangarminium aircraft hangars located at the Oshawa Airport through his corporation. He is a pilot who conducts flights from the Oshawa Airport. He maintains and stores three aircraft in his airport hangar.

[3] There is no dispute that Mr. Sciuk commenced construction on an addition to his aircraft hangar without obtaining a building permit. The respondent obtained legal advice that guided him in his decision. He believed that his aircraft hangar was subject to federal jurisdiction and that provincial legislation did not apply.

[4] At trial, the respondent (the defendant at trial) brought an application seeking a ruling that the Building Code Act did not apply to his aircraft hangar because of federal jurisdiction over matters of aeronautics. Counsel for the respondent argued that the constitutional law doctrine of interjurisdictional immunity justified such a ruling. The respondent sought an order quashing the Information, quashing the related summons on Mr. Sciuk, and costs. The trial justice granted the application and quashed the Information charging the corporate respondent.

[5] This Court has comprehensively reviewed the voluminous detailed trial record. The trial took many days. Many exhibits were filed. Extensive facta and submissions were provided. On appeal, the parties have cooperated to efficiently and thoroughly present their respective arguments including extensive facta and written submissions. This judgment on appeal will not reproduce the extensive trial record. My challenge is to match the efficiency of the appellant and the respondent on appeal by providing a clear judgment so that the parties may understand my reasoning.

I. Decision on Appeal

[6] For the reasons that follow, the appeal of the Order quashing the Information is dismissed. I need not address the summons issue. The respondent submits that the reasons of the trial justice are "lengthy, complex, scholarly, accurate, legally correct, factually correct, and in accordance with the standards of fairness during and throughout the trial process." I agree.

[7] The learned Justice of the Peace, as the trial justice, absorbed a vast record over five days of evidence and days of submissions. The trial justice received evidence and submissions concerning complicated constitutional law concepts. In a written judgment spanning 139 paragraphs, the trial justice provided a clear and comprehensive roadmap to the decision on the application. The trial justice did not err in quashing the information, nor did she shift the onus on the application.

[8] Having reviewed the entire trial record in this matter, it is my respectful view that there was arguable merit to both positions advanced at trial. The trial justice carefully, comprehensively, and efficiently analyzed the complex issues involved in addressing the supreme constitutional law of Canada.

[9] The trial justice found that the respondent's property was part of the Oshawa Airport. While the Federal Government engaged in the sale of land, this did not evidence an intention to cede jurisdiction over aeronautics. As a result, the Building Code Act could not trench on matters of federal jurisdiction. The constitutional law doctrine of interjurisdictional immunity applied to immunize the respondent from any attempt by the City of Oshawa to enforce provincial law in these particular circumstances.

[10] The trial justice's decision on the application speaks admirably to the Court's role in providing guidance to the parties on a complex constitutional legal issue. Indeed, this guidance was explicitly requested of the Court, and the trial justice delivered.

II. Decision regarding Costs

[11] There is a high test for ordering costs.

[12] Costs against the prosecution are relatively rare in criminal and quasi-criminal litigation.

[13] Costs against the prosecution in the absence of a proven breach of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c. 11 — rarer still.

[14] The trial justice erred by ordering costs in the amount of $111,000.00 plus HST. Given the serious ramifications of such a finding to the proper administration of justice, the perception of justice, the public perception of the City of Oshawa, and the impact on the individual prosecutors in the case, a clear evidentiary basis was required.

[15] The evidentiary record did not support a finding that the conduct of the prosecutors constituted "a marked and unacceptable departure from the reasonable standards expected of the prosecution". Nor did the evidentiary record justify costs against the City of Oshawa.

[16] The costs order is set aside.

III. Jurisdictional Framework for the Appeal

[17] This Court sits as a statutory reviewing Court. The Provincial Offences Act does not explicitly set out a statutory route of appeal from a decision to quash an Information. The authority to review must be explained for jurisdictional purposes.

[18] I find that this appeal should be characterized as a "Part III" appeal governed by s. 121 of the Provincial Offences Act akin to an appeal against acquittal. In R v. Jewitt, [1985] 2 S.C.R. 128, the Supreme Court of Canada explained at paragraph 37:

[Q]uashing an indictment is tantamount to an acquittal where (a) the decision to quash is not based on defects in the indictment or technical procedural irregularities; and (b) the decision is a final decision resting on a question of law alone, such that if the accused were charged subsequently with the same offence he or she could plead autrefois acquit.

[19] In R. v. Courtice Auto Wreckers, 2014 ONCA 189, at paragraph 18, the Court of Appeal concluded that the analysis adopted in Jewitt should apply to the interpretation of s. 116(1)(b) of the Provincial Offences Act.

[20] The trial justice's ruling on the application was not based on a defect in the information or technical procedural irregularities. It was based on a determination of a question of law such that if the respondent was charged subsequently with the same offence, he could plead autrefois acquit. I find that this Court has jurisdiction to address the prosecution appeal pursuant to s. 116(1)(b) of the Provincial Offences Act.

IV. Standard of Review

[21] The parties agree that the test on appeal is governed by the principles set out in the well-known case Housen v. Nikolaisen, 2002 SCC 33: (1) questions of law are reviewable on a standard of correctness; (2) questions of fact or mixed fact and law are reviewable for palpable and overriding error.

V. The Appellant's Position

[22] The central argument in support of the appellant's position concerns the trial justice's application of the interjurisdictional immunity doctrine. The appellant submits that the trial justice erred by:

1. Misapplying the doctrine of interjurisdictional immunity;
2. Failing to articulate how s.8 of the Building Code Act trenched on the constitutionally protected core of federal competence over aeronautics;
3. Failing to articulate how the test for "impairment" required by the doctrine of interjurisdictional immunity was established;
4. Misapprehending the evidence of impairment which at best established a de minimis case; and,
5. Conflating federal paramountcy and interjurisdictional immunity.

[23] Additionally, the appellant argued that the trial justice:

1. Failed to render a decision on a s.8 Charter application;
2. Failed to render a decision on a "disclosure" motion; and,
3. Improperly delayed a decision on the s. 11(b) Charter application.

[24] For the reasons that follow, none of these arguments support appellate review.

VI. Analysis of the Judgement at Trial on the Merits

[25] I conclude that the trial justice correctly found that the defence of interjurisdictional immunity applied given the record on the application. It is not the role of this Court to conduct a trial de novo or substitute alternative views for those held by the trial justice. Consequently, there is no basis to intervene.

[26] I will explain this finding by referencing the following issues:

1. Federal Jurisdiction over "Aerodromes";
2. The Location of the Respondent's Property;
3. Ownership of Land is not Determinative;
4. The Operating and Options Agreement; and,
5. Interjurisdictional Immunity.

A. Federal Jurisdiction over "Aerodromes"

[27] The trial justice applied the guidance of the Supreme Court of Canada in Construction Montcalm Inc. v. Min. Wage. Com., [1979] 1 S.C.R. 754, Greater Toronto Airports Authority v. Mississauga (City), 50 O.R. (3d) 641 (C.A.), and Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39 in finding that the Federal Government's core competence in the area of aeronautics (and "aerodromes") applied to the circumstances on the application.

[28] The trial justice received uncontradicted evidence that the City of Oshawa owned and operated the Oshawa Airport subject to the terms of an agreement known as the Operating and Option Agreement. Further, the Airport Manager testified that the City of Oshawa held the requisite Airport Operating Certificate necessary to operate the airport. This Certificate had been issued by the Federal Government through Transport Canada. The Airport Manager had also sent an email to the respondent in 2008 stipulating Transport Canada's maintenance of jurisdiction albeit concerning another property at the Oshawa Airport. Finally, there was evidence that pursuant to federal regulation, the Oshawa Airport must be managed by an approved Airport Manager in accordance with the terms of the Transport Canada approved Airport Operations Manual.

[29] The trial justice found that the Federal Government power over aerodromes necessarily contemplated the design of an airport, its dimensions, and the specifications associated with related buildings and structures. The respondent's aircraft hangar was such a related building and/or structure.

[30] The trial justice found that there was binding precedent specifically on the point at issue in the trial – the protected core of federal power over aeronautics and the fact that provincial building code enactments trench on that core. As such, the trial justice held that the Federal Government maintained jurisdiction over matters of aeronautics. These findings were correct on a proper interpretation of relevant binding legal precedent. In addition, the trial justice relied upon the viva voce evidence of the Airport Manager to reinforce the finding on a factual basis as it directly applied to the Oshawa Airport.

B. The Location of the Respondent's Property

[31] The trial justice held that the Federal Government's jurisdiction over aeronautics was relevant to the proper characterization of the respondent's property, that the respondent's property was an integral physical part of the Oshawa Airport, and that the respondent's use of the property was related to matters of aeronautics and aviation.

[32] These findings were available on the evidence and documented in the judgment at trial. In particular, the following evidence from the Airport Manager supported the trial justice's finding:

1. The respondent's property was situated on "apron 2", which, from an operational perspective, was considered part of the airport;
2. "Apron 2" met the definition of "aerodrome" in the Aeronautics Act, R.S.C. 1985, c. A-2 and was specifically set aside for the movement and servicing of aircraft;
3. "Apron 2" was specifically documented in the approved Airport Operations Manual as one of the aprons of the Oshawa Airport;
4. Notwithstanding the fact that federal regulation required the Airport Manager to regularly update the Oshawa Airport Certificate and the Airport Operations Manual for accuracy, the Airport Manager did not make any changes referable to the respondent's property;
5. Aeronautical publications published by NAV Canada accurately depicted the Oshawa Airport as including "Apron 2" and the respondent's property integrally connected to the airport's aprons, taxiways, and runways;
6. Ownership of property was irrelevant to operational responsibilities of the Airport Manager;
7. The City of Oshawa possessed the requisite Airport Operating Certificate issued by Transport Canada;
8. The respondent's property was located within a secured and fenced area at the Oshawa Airport; and,
9. The Airport Manager required the respondent to place specific safety lighting on his building in order to comply with federal regulation, failing which the Airport Manager would have notified Transport Canada to address enforcement and compliance.

[33] The trial justice's judgment also cited other evidence in support of the conclusion including:

1. The un-contradicted testimony of Mr. Sciuk that he used his property to facilitate his aeronautics activities – to store and maintain aircraft for the purpose of safely accessing the Oshawa Airport;
2. City of Oshawa zoning by-laws defined "airport" to include airport hangars;
3. The Operating and Options Agreement regarding the sale of the subject property required that the airport hangars be constructed such that they were indistinguishable from other hangars; and,
4. The City of Oshawa marketed the Hangarminiums lands as key to aeronautics and aviation uses at the Oshawa airport rather than private property.

[34] These conclusions were reasonable and available on the basis of the record.

C. Ownership of Land is not Determinative

[35] The trial justice held that the Federal Government enjoyed jurisdiction over all aeronautics matters in Canada and all "aerodromes" regardless of land ownership.

[36] The record produced at trial supports this finding.

[37] The Airport Manager testified that the Aeronautics Act definitions govern what land is part of an "aerodrome" and that an aerodrome operator need not own all of the land captured by the definition of "aerodrome". He further testified that the Aeronautics Act did not acknowledge any jurisdictional distinction based on land ownership. The trial justice observed that the definitions of "airport" and "aerodrome" in the Aeronautics Act and the City of Oshawa zoning by-laws did not refer to ownership of land and that the definitions of "airport" and "aerodrome" were interpreted functionally with a view to facilitating the Federal Government's mandate in aeronautics.

[38] The trial justice squarely addressed the fact that the respondent's property had been sold by the Federal Government. The Court held that it was important to place the sale of land in context. Any sale was explicitly subject to the terms of the Operating and Options Agreement which did not place provincial law above federal concerns around aeronautics. As such, the trial justice concluded that ownership of land was not the singular definitive answer to the constitutional issue raised by the application.

D. The Operating and Options Agreement

[39] At a certain level, the prosecution's argument at trial was attractive. The Federal Government had sold the respondent's property. The sale was expressly conditional upon Transport Canada stipulating that the land was surplus to the needs of the Oshawa airport. The prosecution argued that if the Federal Government specifically acknowledged this fact, how could the respondent's property be integral to an aeronautics jurisdictional claim? The Operation and Options Agreement appeared to explicitly disavow the retention of the property for aeronautics purposes – the sole federal concern.

[40] The prosecution's point was clear – the sale of federal land mutually and explicitly deemed surplus to the needs of the airport is powerful evidence of the Federal Government's express intention to relinquish control over the property for all purposes including aeronautics. Bolstering this argument was the fact that the respondent's airport hangar had originally been built pursuant to a Building Code Act permit. The prosecution's position was that provincial law governed any renovations or alterations to such a building.

[41] The prosecution theory was heavily dependent on how the Operation and Options Agreement was interpreted. The trial justice's judgment demonstrates a clear and comprehensive understanding of the Operating and Options Agreement. It was filed as an exhibit at trial and sets out the following available information:

1. The Minister of Transport retained regulatory authority and enforcement powers concerning standards for the safety and security of the aviation industry and travelling public;
2. "Airport Lands" was specifically defined;
3. Section 2.01.01 required the Airport Manager to operate the Airport as an "aerodrome" in accordance with the agreement and the Aeronautics Act;
4. The definition of "aerodrome" in the agreement was identical to the definition in the Aeronautics Act;
5. Section 1.09.01 of the agreement specified that the agreement will be interpreted in accordance with Ontario law but that it is subject to paramount or applicable federal laws;
6. Section 1.09.01 further specified that the Federal Government was not limiting, waiving, or derogating from any Federal Crown prerogative;
7. Section 2.01.02 required any subcontractor secured by the Airport Manager to abide by terms equally as stringent as those provided the Operating and Option Agreement, any breach of those terms was a breach of the Operating and Option Agreement, and the Airport Operator remained liable to the Federal Government;
8. The Airport Operator was not permitted to enter into leases, licenses or concession agreements with a term greater than twenty years without the prior written consent of the Federal Government;
9. The termination of operations required six-months notice to the Federal Government and set out circumstances where the Federal Government could exercise an option to repurchase land;
10. The Airport Operator was permitted to sell property unnecessary to the management, maintenance, or operation of the airport, subject to a requirement of notice to the Minister of Transport and the terms concerning revenue account remittances; and,
11. The Airport Operator was not permitted to assign, transfer, or lease the Airport absent consent from the Minister of Transport.

[42] The trial justice noted that the agreement specified that federal law was paramount, the Federal Government was not ceding jurisdiction, and that the Airport Operator was to diligently and carefully manage and operate the airport as an "aerodrome" in accordance with federal law. Further, the trial justice found that there was nothing in the Operating and Options Agreement or in the record on the application evidencing the Federal Government's express or implied waiver of jurisdiction over aeronautics concerning the respondent's property.

[43] The record produced on the application clearly supports the trial justice's interpretation of the Operating & Option agreement and related documentation. It is not insignificant that the trial justice's findings, and approbation of those finds on review, rests emphatically on the record produced on the application.

[44] The prosecution had ample notice of the respondent's reliance on interjurisdictional immunity. The application was served on the Federal Government.

[45] If the Federal Government intended to cede jurisdiction over the respondent's property and other related Hangarminium properties it would have been a simple matter to evidence that intention (e.g., by obtaining an affidavit from the responsible federal official). While the onus was on the respondent as the applicant, this simple step would have laid waste to the interjurisdictional immunity defence.

E. The Doctrine of Interjurisdictional Immunity

[46] There is little purpose in repeating the detailed and extensive arguments made at trial and on appeal concerning the application of the doctrine of interjurisdictional immunity. In my respectful view, the Responding Factum of the Respondent, at paragraphs 14 to 33, succinctly and correctly outlines the contours of the doctrine of interjurisdictional immunity.

[47] While I agree with the appellant that the burden of proof on the application was with respondent (as the applicant at trial), I disagree that the respondent was obliged to present positive evidence as a precondition to reliance on the defence. The evidence was available on the record produced on the application.

[48] The trial justice explicitly cited the analysis in COPA and relied upon the viva voce evidence of the Airport Manager to conclude that the application of the Building Code Act to the respondent's airport hangar could have a far reaching impact over the federal power to decide the design, manner of construction, and specifications of "aerodromes". The trial justice relied upon the Airport Manager's evidence to conclude that the Business Code Act could seriously and manifestly trench on the federal core power around aeronautics by dictating the construction of a building such as an airport hangar.

[49] The trial justice did not reverse the burden of proof or conflate interjurisdictional immunity and federal paramountcy. The trial justice explicitly addressed the impairment requirement and the "seriously affects" test in paragraphs 105 to 110 of the decision on the application. Every single important argument raised by the prosecution at trial was addressed in the trial justices' judgment.

[50] As it concerns the application, the issues required careful analysis and application to a unique factual record. The trial justice admirably satisfied the obligation to provide clear reasons and clearly demonstrated the path of reasoning employed.

VII. The Decision to Order Costs

A. Introduction: Costs

[51] In two reported judgments, Oshawa (City) v. 536813 Ontario Ltd, 2017 ONCJ 116 and Oshawa (City) v. 536813 Ontario Ltd., 2016 ONCJ 665, the trial justice found jurisdiction to order costs, set out the basis for ordering costs, and determined the quantum of those costs.

[52] The trial justice articulated nine factors as the basis for the order of costs:

1. The City of Oshawa as the prosecutor was no "ordinary litigant";
2. The prosecution witnesses were employees of the City of Oshawa and lacked independence;
3. The City of Oshawa showcased the respondent's property and other Hangarminium properties as part and parcel of the Oshawa Airport in public documents;
4. The bad conduct of the City of Oshawa concerning building permit requirements;
5. The conduct of the City of Oshawa concerning the Oshawa Airport jurisdiction issue as contrasted with the Region of Durham's approach;
6. The prosecutor's failure to provide relevant disclosure;
7. The prosecutor's use of resolution discussions at trial;
8. Clear jurisprudence holding that the Federal Government has broad and exclusive jurisdiction over aeronautics; and,
9. Clear jurisprudence holding that because of the doctrine of interjurisdictional immunity, provincial building codes do not apply to airport-related buildings.

[53] On appeal, it is unnecessary to decide whether or not the trial justice was correct in finding that the Court enjoyed jurisdiction to order costs in the absence of a proven breach of the Charter. Nor is it necessary to examine the approach used to quantify costs. In my respectful view, the trial justice succumbed to palpable and overriding error in making the order. The evidentiary record produced during the proceeding did not justify costs. I will explain the basis for setting aside the costs order through examination of the following factors:

1. The status of the prosecutors;
2. The Corporation of the City of Oshawa;
3. The performance of the prosecution's witnesses;
4. The marketing of the Oshawa Airport;
5. The absence of a proven Charter breach;
6. "Disclosure" of the Airport Operations Manual;
7. The use of resolution discussions;
8. The constitutional issue; and,
9. The test for costs.

B. The Status of the Prosecutors

[54] The trial justice noted that the Crown was no "ordinary litigant" and that the prosecutors were required to prosecute in a fair and impartial manner focused on the merits of the case and the public interest.

[55] The trial justice was correct in holding the prosecutors to this high standard.

[56] First of all, the Attorney General – Ontario, as the Chief Law Officer, maintains ultimate responsibility for the proper administration of justice: (See Ministry of the Attorney General Act, R.S.O. 1990, c. M. 17). Second, the prosecutors appearing on this case were subject to Part X of the Provincial Offences Act and the accompanying "transfer agreement" per Part X also known as the Memorandum of Understanding mandating a performance standard for prosecutions: Provincial Offences Act, s. 162. The Memorandum of Understanding is a lengthy document comprehensively outlining the relationship between the municipality and the Attorney General. In particular, it contains the following important provisions:

1. The preamble maintains the Attorney General's responsibility for the integrity of the administration of justice;
2. Section 1.53 expressly requires the municipality to prosecute Building Code Act matters;
3. Sections 2.0 to 2.14 address the requirements of prosecutorial independence, fairness and impartiality, competence and integrity, and the timeliness of prosecutions;
4. Section 2.2 governs the supervision of prosecutors who are not lawyers and directs that reporting relationships are structured so that prosecutorial discretion cannot be influenced by members of council, financial officers, or other municipal agencies;
5. Section 2.3.1 requires the Municipality to ensure that prosecution polices are applied impartially, fairly, reasonably, and consistently such that prosecutors are permitted to exercise their discretion in a fair and impartial manner free from influence or bias;
6. Section 2.4 requires that the prosecutors take an oath attesting to an intention to prosecute in accordance with the principles set out in the agreement and the laws of Canada and Ontario;
7. Other provisions address circumstances of potential or actual conflict; and,
8. Other provisions address the supervision of this agreement by the Attorney – General and the requirement that the municipal prosecution members consult with the Crown Attorney on any significant legal issue.

[57] While the prosecutors at trial were not agents of the Attorney General per se, prosecuting in accordance with Part X of the Provincial Offences Act and the Memorandum of Understanding mandates a prosecutorial standard that includes prosecutorial independence, fairness, impartiality, competence, and integrity: (See the excellent review of this area in Sheilagh Stewart, STEWART on Provincial Offences Procedure in Ontario, 3rd ed. (Canada: Earlscourt Legal Press, 2011)).

[58] While the trial justice was correct to expect this high standard in prosecutions, the trial justice erred by impugning the conduct of the specific prosecutors appearing on the case and determining that costs were appropriate. I find that there was no basis in evidence to find that the prosecution of the respondent was directed by the City of Oshawa for self-interest and financial gain. The trial justice erred in co-mingling perceived motives associated with the City of Oshawa and the approach taken by prosecution team appearing at trial. The Court succumbed to error by dislodging the independent role of the prosecutor and impugning prosecutorial standards in the absence of evidence to support such findings.

C. The Corporation of the City of Oshawa

[59] At paragraph 29 of the November 3, 2016 judgment on costs the trial justice held:

In the matter before me, however, the Prosecutor is not a Crown, but rather an employee and agent of the City of Oshawa, which stood to gain materially. It has more at stake than prosecuting in the public interest. In the future, the City intends to bring further development to other parts of the Oshawa Airport lands and the City's demand for building permits brings with it revenues for the City. The City stands to profit from such development, not just for the sale of the land, but also from building permits it claims developers will need. It is incumbent upon the City to take care in exercising its discretion to charge a party under the Building Code Act, 1992 and must be very diligent to ensure it exercises its prosecutorial powers fairly, impartially and in the public interest. The standard of measure in discharging discretion of whether to prosecute a matter is a factor I have taken into consideration in deciding whether costs will be awarded.

[60] This passage contains the kernel of the fatal flaw running through the decision on costs. The trial justice misapprehended the role of the prosecutors conducting Part III prosecutions pursuant to the Part X of the Provincial Offences Act. The trial justice speculatively attributed financial motivations to the City of Oshawa and then visited those findings upon the prosecution of the respondent and the specific prosecutors in the case in the absence of an evidentiary record supporting this finding. Specifically, the trial justice held that the City of Oshawa used "it's prosecutor" in an unfair manner for the benefit of the City of Oshawa's interests: See Oshawa (City) v. 536813 Ontario Ltd., 2016 ONCJ 665, paras. 36-37, 39-41.

[61] This is a very serious conclusion for several reasons. It punctures the important independent role held by the prosecutors pursuant to Part X of the Provincial Offences Act and the Memorandum of Understanding with the Attorney General – Ontario. Given the terms of the prosecutorial "download" to the municipality, this finding struck at the very foundation of fair prosecutions and the public perception of the administration of justice. This finding called into question the prosecutors' adherence to Part X of the Provincial Offences Act with the accompanying consequences set out pursuant to Attorney General oversight. This finding also called into question the professional ethics, duties, and responsibilities the prosecuting lawyer and prosecuting paralegal must adhere to as members of the Law Society of Upper Canada.

[62] In paragraph 51 of the judgment on costs the trial justice held:

While the City of Oshawa has an obligation to prosecute in the public interest, in this case the broad public interest appears to be overtaken by the City's own self-serving interest. . . . [Emphasis added]

[63] I agree with the respondent's submission that such a finding is the pinnacle of abuse of authority. Given the responsibilities associated with Part X of the Provincial Offences Act and the Memorandum of Understanding, the notion that a person or persons employed by the City of Oshawa directed the prosecution of the respondent for financial gain would compromise the prosecutorial independence of the prosecutors involved and inflict enormous damage to the public proper administration of justice. But there was no factual basis in evidence to support this finding. The trial justice noted that the broad public interest appeared to have been overtaken by the City of Oshawa's self-interest.

[64] The City of Oshawa, much like many other cities in Ontario and Canada, is made up of individuals who perform services on behalf of the residents of Oshawa and Durham Region. There is a City Manager, a City Council, a Mayor, and many other persons working in various public service departments. Neither party called evidence on the issue of costs directed at this issue. Decision-making individuals working at the City of Oshawa were not subpoenaed and examined with respect to the issues of influence on the prosecutors, direction of the prosecution, or the approach to land sales at the Oshawa Airport.

[65] Given the magnitude of this finding, the trial justice had an obligation to carefully set out the actual evidence supporting the specific finding that the prosecutors had been compromised. Given the evident concern, the trial justice could have provided notice of these concerns and invited the parties to address the concerns with evidence and or submissions specifically on point. First of all, the prosecutors and counsel for the respondent would have had an opportunity to squarely address the issue by direct evidence on point and submissions. Second, the prosecutors, notified of this concern, could have considering having uninvolved counsel address the bias issue. The City of Oshawa might have sought leave to address the issue. For example, evidence could have been presented squarely addressing the procedures concerning land sales and marketing of the Oshawa Airport or rebutting the concern that a person or persons had compromised the prosecutorial integrity of the prosecutors appearing on the case.

[66] While it is true that aspects of the submissions in this case impugned the conduct of the prosecutors and the City of Oshawa, the trial justice was required to observe the distinction between suspicion, speculation, and fact. The submissions of counsel were not evidence.

[67] The trial justice erred in concluding that there was no distinction between the entity known as the City of Oshawa and the prosecutors appearing on the case. In this sense, the trial justice comingled conclusions reached about the motivations of the City of Oshawa and then imputed those motivations to the specific prosecution team appearing on the prosecution in the absence of evidence.

D. The Performance of the Prosecution's Witnesses

[68] The failure to differentiate between the prosecutors appearing at trial and the entity known as the City of Oshawa infected the reasoning of the trial justice such that irrelevant factors were considered on the issue of costs. The trial justice held at paragraphs 30 to 35 of the costs judgment:

Prosecution witnesses are City employees:

[30] Not only is the Prosecutor an employee of the City of Oshawa, but so, too, are all of its witnesses. The City of Oshawa, as Prosecutor, proffered no independent witnesses. From the evasive and sometime contradicting manner in which these witnesses answered questions asked by defence counsel, it is obvious that a bias in favour of their employer exists.

[31] Mr. Cook has been a Building Inspector with the City of Oshawa for over twelve years. In providing testimony, I found him to be evasive and he occasionally contradicted himself, if it was self-serving to do so. When questioned by the City's legal counsel, the Prosecutor in these proceedings, he most often did not hesitate to respond. When questioned by the respondent's counsel, he often appeared to lack knowledge of what might easily be perceived as basic comprehension of issues.

[32] Mr. Stephen Wilcox, as the Oshawa Airport Manager, is also an employee of the prosecuting City of Oshawa. Repeatedly in his responses, he attempted to avoid stating whether the Hangarminium project, which included the respondent's hangar, was a part of the Oshawa Airport. In spite of his participation in developing the Airport Business Plan, which made clear representations of the Hangarminiums as a positive marketing addition to this Plan, he tried to side step the issue of whether this development was part of the Oshawa Airport complex. As Airport Manager, he is required by Transport Canada to prepare and submit an Airport Operations Manual accurately describing the runways and buildings. In spite of showing the Hangarminium development in the aerodrome diagrams, he tried to get around accepting that the respondent's hangar was part of the Oshawa Airport complex.

[33] In response to Mr. Sciuk's initial inquiries about purchasing some of the lands in the northern section of the Oshawa Airport upon which to build his own hangar, in a January 30, 2008 letter, Mr. Wilcox was anything but reluctant to advise Mr. Sciuk of the need to retain aviation or aviation related uses. Yet at trial, Mr. Wilcox attempted to dodge questions pertaining to "use". Instead he repeated advised that, as Airport Manager, his mandate relates only to the operations and safe functioning of the Airport.

[34] Mr. Wilcox presented with significant credentials in the field of aeronautics; however, his evasive responses or inability to respond to some of the questions asked by defence counsel was, at time, at odds with his credentials. It was only after aggressive questioning by defence counsel that Mr. Wilcox reluctantly admitted that the Hangarminium development, including the respondent's property, might be considered germane to the field of aeronautics and perhaps a component of the Oshawa Airport complex. In the end, the Airport Manager did accept that the Federal Government had not surrendered its rights to permit only aviation or aviation-related uses on these surplus lands.

[35] I have cited many instances wherein the City of Oshawa's witnesses were evasive, contradicted themselves and were less than forthcoming with knowledge individuals with their experience and credentials should have known. I agree with the defence submissions that the credibility of the City's witnesses, all of whom are City employees, was seriously undermined by their inability or reluctance to answer simple questions put to them by defence counsel. This conduct was a patent contrast to and exhibited an obvious bias towards their readiness to answer questions asked by their employer, the City of Oshawa.

[69] I defer to the trial justice's assessment of the witnesses and the credibility issues relied upon by the trial justice to come to a decision on the respondent's application concerning interjurisdictional immunity. The trial justice's conclusions as to the credibility of these witnesses was available on the record produced. The trial justice listened to these witnesses and experienced the evidence first hand. There is no basis to interfere with the credibility findings reached by the trial justice.

[70] But the trial justice erred in relying on the credibility and performance of the witnesses as part of the justification to order costs. The trial justice also erred in levying costs against the prosecutors because of the poor performance of the witnesses. As explained throughout this judgment, it is important to draw a distinction between the entity known as the City of Oshawa and the prosecutors appearing before the Court. If the conduct of a person or persons employed by City of Oshawa was such that costs were appropriate, the trial justice was obliged to consider what jurisdiction the Court had to order costs against the City of Oshawa or individuals associated to that entity, give notice of the issue, and receive submissions.

[71] Costs should not have been levied against the prosecutors for the misconduct of witnesses in the absence of specific factual findings that the prosecutors participated in the misconduct: R. v. Tiffin, 2008 ONCA 306, at paras. 96-101. To characterize the prosecution witnesses as employees of the City of Oshawa was not relevant to this issue. The poor performance of the witnesses should not have been attributed to the conduct of the prosecutors or the prosecution of the case absent an evidentiary foundation.

E. The Marketing of the Oshawa Airport

[72] The trial justice found that the City of Oshawa was interested in marketing the Oshawa Airport for business investment purposes and the attendant revenues generated from the use of the airport, developmental levies, and permits. The trial justice sourced this finding, in part, on materials filed on the application. But the trial justice also engaged in irrelevant speculation by concluding at paragraph 26 of the judgment:

I find the City of Oshawa cannot use the hangar for its self-serving purposes and then have its prosecutor attempt to exclude the hangar from the airport complex when it may find it does not serve the City well.

[73] That the City of Oshawa promoted the Oshawa Airport in the manner depicted in the record on the application relied on by the trial justice is not necessarily inconsistent with the prosecution position that the respondent's building was subject to the provincial building code. Nor is the conduct of the City of Oshawa definitive with respect to the defence of interjurisdictional immunity.

[74] In paragraph 41 of the judgment on costs the trial justice compared the conduct of the City of Oshawa with the conduct of the Region of Durham in returning development charges. On the application itself, the trial justice properly held that the conduct of the Region of Durham could not bind the City of Oshawa. The Region of Durham's conduct remained irrelevant to the issue of costs.

F. The Absence of a Proven Charter Breach

[75] This issue must be addressed on appeal because of the submissions of counsel at trial and the submissions presented on appeal.

[76] Counsel for the respondent brought an application pursuant to ss. 11(b) and 8 of the Charter. The s. 11(b) application was dismissed. The decision was rendered at the specific request of the parties. The parties were seeking the Court's guidance on the legal issue. Neither party wanted the legal issues to be resolved by way of an 11(b) decision. It is disingenuous, on appeal, for the Appellant to suggest that the timing of the s.11(b) decision constitutes an error given that record.

[77] The Appellant also submits that the failure to provide a ruling on the s.8 Charter application was an error. I do not agree. The trial justice did not render a judgment on the s.8 Charter argument concerning the City of Oshawa inspector's access to the respondent's property. The trial justice's decision on the constitutional application was tantamount to an acquittal. The trial did not continue. There was no need to render a decision on the s.8 argument given the Information had been quashed and the limited record on the s.8 issue.

[78] During submissions on costs counsel for the respondent specifically asserted that the evidentiary record established a breach of the Charter and that the reasons of the trial justice on the merits supported this finding. This point was woven into both written and oral submissions notwithstanding the fact that the trial justice had not found a breach of the Charter. If a Charter issue is to be litigated at any stage of a proceeding (even at the submissions stage of a proceeding), the responding party is entitled to notice of the clear basis for the application and both parties should have the opportunity to call evidence and provide submissions.

[79] Reviewing the judgments as a whole, it does not appear that the trial justice found a Charter breach en route to the costs order. The trial justice founded jurisdiction to order costs in conduct not specifically captured by a formal Charter breach. In this sense, it appears that the submissions suggesting the prosecution had breached the Charter were not relied upon by the trial justice and there was no error associated with this area of the analysis.

G. "Disclosure" of the Airport Operations Manual

[80] There was significant disagreement at trial concerning the "disclosure" of the Airport Operations Manual in effect at the time of the allegations. The trial justice cited the prosecution failure to produce the Airport Operations Manual in force at the time of the allegations as one of the factors relevant to the order of costs.

[81] It is clear that the Airport Operations Manual was an important piece of information because the Airport Manager was required by law to maintain and update this document to ensure that it accurately described the physical properties of the "aerodrome". Counsel for the respondent relied on the failure to produce the relevant Airport Operations Manual as part of the circumstances around delay on the s.11(b) application and submitted that it was also relevant to "full answer and defence". The trial justice permitted the respondent to bring a "motion for disclosure" during the submissions stage of the proceedings. The prosecution objected to this procedure. It is plain on the record that the prosecution sought clarification concerning the "motion for disclosure".

[82] The circumstances surrounding the request(s) for the Airport Operations Manual should not have weighed against the prosecution on the question of costs for several reasons.

[83] First, while the record is somewhat unclear with respect to requests for the version of the Airport Operations Manual that was in force at the time of the allegations before the Court, it appears, based on submissions by counsel for the respondent, that a specific request for the relevant version of the Airport Operations Manual was made by email on the eve of trial (i.e. midnight): (See Oshawa (City) v. 536813, Transcript of Proceedings, (October 15, 2015) at pp. 24 – 30.

[84] Second, there was no formal Stinchcombe application to require the prosecution to produce the manual until arguably an oral application during final submissions. The Airport Manager received a subpoena to produce the Airport Operations Manual and a manual was produced. That it was not the manual governing the timeframe of the allegations was not the fault of the witness nor the prosecution – the subpoena did not specify what edition to produce. The parties jointly resolved the issue and agreed to proceed. Counsel for the respondent, appropriately stipulated that he was not accusing the prosecution of deliberately withholding evidence: (See Oshawa (City) v. 536813, Transcript of Proceedings, (November 12, 2015) at pp.23-24. The requests for production did not constitute a formalized application for production or disclosure of the relevant Airport Operations Manual.

[85] Third, the prosecution was arguably correct – the Airport Operations Manual was not "first party" Stinchcombe disclosure. Leaving aside the issue of whether it was in the hands of the prosecution or a third party, it was clearly irrelevant to a prosecution for failing to obtain a building permit. The Airport Operations Manual was, however, critically relevant to the defence of interjurisdictional immunity. In that vein the respondent at trial sought production of a relevant piece of information that was necessary to the constitutional application led as a defence to the allegation. The subpoena did not specify a particular amendment version. Apart from this deficiency, the approach taken by the respondent was entirely appropriate. While the issue was not formally litigated, so the complete record on this issue is unknown, it was not unreasonable for the prosecution to take the view that the Airport Operations Manual was not relevant to the building code prosecution. That the Airport Manager produced an Airport Operations Manual when he attended court does not detract from this position. The characterization of the Airport Operations Manual as first party disclosure, a third party record, or relevant evidence worthy of production did not occur in this trial, because the justice was never asked to rule on the issue by way of formal application.

[86] Fourth, given the importance of the Airport Operations Manual to the defence of interjurisdictional immunity, the respondent, as the applicant, was responsible for obtaining the evidence relevant to its defence as the applicant. That the Airport Manager was reasonably requested to bring the manual "off his shelf" was not a formal request.

H. Use of Resolution Discussions

[87] I have no quarrel with the trial justice's treatment of the inappropriate use of resolution discussions. But this conduct could not add much, if anything, to the rationale and the high test for costs.

[88] That the prosecutors in this case referenced these discussions was met by appropriate judicial comment but should not have been a factor used to order costs.

I. Litigation concerning the Constitutional issue

[89] In ordering costs, the trial justice held that the jurisprudence clearly provided jurisdiction over aeronautics to the Federal Government and the prosecutors in the case refused to accept this clear binding jurisprudence. Further, the trial justice held that the jurisprudence made it clear that provincial building codes could not trench on airport buildings.

[90] With sincere respect, the fact that a 139 paragraph judgment was delivered belies the assertion that the result was self-evident. These were complex legal and constitutional issues, for which the trial justice was assisted by extensive oral and written submissions provided by the parties. The trial justice explicitly recognized the complexity of the issues and the public interest in a decision on the merits of the constitutional argument: (See for example, Oshawa (City) v. 536813, 2016 ONCJ 287, at paras. 138 – 139; Oshawa (City) v. 536813, 2017 ONCJ 116, at para. 33)

[91] This finding also ignores the fact that the parties requested the Court's guidance on the issue. The 11(b) Charter application was explicitly delayed so that a decision on the merits of the argument would be provided.

[92] Finally, the unique factor in this case was the peculiar features of the arrangement between the Federal Government and the City of Oshawa memorialized in the Operating and Options agreement. The impact of these factors had not been specifically litigated before this case.

[93] In my respectful view, it was available to the prosecution to question the application and the limits of the doctrine of interjurisdictional immunity given the specific features of the arrangement between the Federal Government and the City of Oshawa. The finding that interjurisdictional immunity applied to the peculiar facts at the Oshawa Airport was neither obvious nor a forgone conclusion.

[94] There was, at a minimum, an arguable case for both sides. There was no jurisdiction to punish the prosecutors for litigating these issues.

J. The Test for Costs

[95] The costs order stipulates that the trial justice ordered costs against the "Prosecution", the "City of Oshawa" and the "Prosecutor, the City of Oshawa". The costs order itself does not specifically detail the names of the prosecutors, but it appears from a review of all three judgments that the trial justice sought to punish both the prosecutors in personam and the entity known as the City of Oshawa.

[96] If the trial justice's costs order is viewed as an order partially addressing the conduct of the prosecutors in this case, it must be emphasized that a costs order against a lawyer is a rare occurrence and is subject to a high threshold: Quebec (Director of Criminal and Penal Prosecutions) v. Jodoin, 2017 SCC 26, at paras. 25-26.

[97] The standard for awarding costs is "a marked and unacceptable departure from the reasonable standards expected of the prosecution": Jodoin, at para. 27; R. v. Fercan Developments Inc., 2016 ONCA 269; and R. v. Martin, 2016 ONCA 840.

[98] Given the errors outlined in this judgment I find that there was insufficient foundation to substantiate the high threshold test for costs: (See the comprehensive analysis of this threshold by Justice P. C. West in R. v. Fercan Developments Inc., 2014 ONCJ 779 at paras. 65 – 99).

[99] Assuming the trial justice had jurisdiction to order costs absent a formal breach of the Charter, the record did not support the test for costs against the prosecutors in personam or the City of Oshawa.

[100] The discretionary decision to order costs is entitled to significant deference on appeal. It is reviewable only if incorrect principles of law were applied, palpable and overriding error occurred in assessing the facts, or if a patent injustice is apparent: R. v. Fercan Developments Inc., 2016 ONCA 269, at para. 91.

[101] In my respectful view, palpable and overriding error occurred.

K. Stay of the Costs Order

[102] An ancillary issue on this appeal concerns the jurisdiction and test for staying the costs order on appeal.

[103] On March 22, 2017 Local Administrative Justice M. Block ordered that the parties provide written materials concerning the application to stay the costs order.

[104] I assumed carriage of this application and the appeal from Justice Block on March 22, 2017. On May 29, 2017 I received submissions concerning the application for a stay of the costs order. After ordering and reviewing a transcript of the proceedings before Justice Block on March 22, 2017, I granted the stay of the costs order pending the determination of the appeal with reasons to follow.

[105] These are my reasons.

[106] Section 116(1)(e) of the Provincial Offences Act specifically provides for an appeal regarding costs.

[107] There does not appear to be any specific section in the Provincial Offences Act addressing the power to order an interim stay of a costs order pending appeal.

[108] There does not appear to be direct or binding authority on this issue. There are cases that cite civil law concepts to assist with this exercise and focus on the difficulty in recouping costs in the event of a successful appeal: (See for example, the discussion in R. v. Innocente, 2001 NSCA 97 and R. v. Taylor, [2007] N.S.J. No. 10 (C.A.)). There are other cases that address staying an order of a Court in criminal matters: (See for example, the Ontario Court of Appeal endorsing the test in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] S.C.J. No 17 staying a DNA Order pending appeal in the absence of specific statutory authority in the Criminal Code of Canada or R. v. Taylor, 2006 BCCA 297, where the Court of Appeal stayed a costs order pending appeal because it was necessary to preserve the subject matter of the appeal.)

[109] I granted a stay of the costs order for several reasons:

1. The appeal involved a significant and important issue – which level of government enjoyed jurisdiction over the Oshawa Airport;
2. The Appellant sought to appeal the very jurisdiction of the trial justice to order costs in the absence of a Charter breach;
3. The Appellant's materials demonstrated a threshold merit to the appeal;
4. Costs would have been sourced from public funds;
5. There was no mechanism available to ensure that the costs award would not be dispersed by the time of the hearing of the appeal;
6. There was no undertaking by the respondent to preserve the proceeds of the costs order pending appeal;
7. The appeal was scheduled a few months away;
8. The respondent took no position with respect to the stay of the costs award pending appeal (Note: Notwithstanding the submissions of the Appellant, I accept the distinction relied upon by counsel to the respondent between "not being opposed" or "no position" and consenting to the motion); and,
9. Section 134(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides jurisdiction for an appeal court to make interim orders to prevent prejudice to a party pending appeal.

[110] I determined that the power to stay a costs order pending appeal was reasonably necessary to accomplish my role as a reviewing court given s. 116(1)(e) of the Provincial Offences Act and that jurisdiction was necessarily implied: R. v. 974649 Ontario Inc., 2001 SCC 81, at paras. 70-71; Nishnawbe Aski Nation v. Eden, 2011 ONCA 187, at para. 34; and R. v. Romanowicz, 45 O.R. (3d) 506 (C.A.), at paras. 59-60.

[111] For all of these reasons, I found that I had jurisdiction to order a stay of the costs order pending appeal and that it was proper to make such an order.

[112] It is not entirely clear that the test for civil injunctive relief in RJR-MacDonald is applicable to the circumstances in this case. But even if that test was utilized, I would have granted the stay. There was some merit to the appeal given the jurisdictional argument and the issues around the Operating and Options Agreement. I was further satisfied that irreparable harm could occur given the potential disbursement of public money used to pay the costs award. The inconvenience to the Appellant was demonstrably greater than the inconvenience to the respondent given the hearing of the appeal was only a few months away.

VIII. Conclusion: Costs

[113] The costs order is set aside.

[114] There will be no costs associated with the appeal.

Released: December 1, 2017

Signed: "Justice M.S. Felix"

Footnotes

[1] The preamble to the Memorandum of Understanding explicitly requires that the terms be consistent as they pertain to every municipal partner.

[2] The written submissions provided by the respondent at trial concerning costs were not filed as an exhibit and were not part of the appeal record. The record reveals that they were provided to the trial justice and relied upon. The written submissions were requested and received from the respondent on November 17, 2017 and are now marked as Exhibit 1 on the Appeal to complete the record.

[3] There was significant confusion about which amended version of the Airport Manual was relevant. There was evidence from the Airport Manager that proposed amendments to the Airport Manual would be followed notwithstanding formal approval had not been received from Transport Canada. There was evidence that at times approval could take a few years. Even counsel for the respondent confirmed at one point that amendment four was the relevant document.

[4] The paralegal appearing on the case for the prosecution is governed by the Law Society of Upper Canada. There is no reason to distinguish the two prosecutors based on their differing status.