Corporation of the Township of Dymond v. Minister of Municipal Affairs and Housing et al.

[Indexed as: Dymond (Township) v. Ontario (Minister of Municipal Affairs and Housing)]

68 O.R. (3d) 126

[2003] O.J. No. 4193

Court File No. 576/03

Ontario Superior Court of Justice

Divisional Court

McRae, Dunnet and Jennings JJ.

October 22, 2003

Municipal law -- Restructuring -- Amalgamation -- No common law or statutory requirement that municipalities included in restructuring proposal be given opportunity to be heard by Minister before amalgamation order made -- Municipal Act, 2001, S.O. 2001, c. 25 -- Municipal Act, R.S.O. 1990, c. M.45, s. 25.2 -- O. Reg. 216/96.

In February 2001, the Township of Dymond passed a by-law adopting Terms of Reference for a Restructuring Committee, as did the Towns of Haileybury, New Liskeard and Cobalt. In May 2002, Cobalt withdrew from the restructuring process. In November 2002, the Restructuring Committee adopted for recommendation to the Councils of the three remaining municipalities a restructuring proposal for their amalgamation. December 17, 2002 was the date set for all three Councils to vote on the proposal but, on that date, Dymond resolved to delay its vote until February 2003. Meanwhile, the Towns of Haileybury and New Liskeard voted and passed resolutions supporting the proposal. The result was that under s. 25.2 of the Municipal Act and O. Reg. 216/96, support of the proposal by a majority of the three municipalities, representing a majority of their total electors, on its face met the requirements of the legislation for the necessary "double majority" support for the proposal.

The restructuring proposal was submitted to the Minister of Municipal Affairs and Housing by the two Towns on December 18, 2002. On February 18, 2003, the Council of Dymond Township voted not to support the restructuring proposal. On February 21, 2003, the Minister made an order amalgamating the Towns of Haileybury and New Liskeard and the Township of Dymond. Dymond sought judicial review and submitted that: (1) the Minister should have proceeded in accordance with the new Act, the Municipal Act, 2001, which provided discretion, as opposed to the former mandate, to the Minister to make the order; (2) the Minister breached the principles of natural justice; (3) the Minister's order was contrary to the spirit and intent of the Act; and (4) since the only Terms of Reference adopted by Dymond were those which included Cobalt, Dymond was not bound by a double majority process which did not include Cobalt.

Held, the application should be dismissed.

The Minister had no alternative but to issue the order. All the pre-conditions, including the "double majority" requirement had been met. The rights of the parties had accrued before the coming into force of the new Act. There was no common law or statutory requirement that municipalities included in a restructuring proposal be given an opportunity to be heard by the Minister before an order is made. The votes in favour of the proposal met the requirements of the Act and the regulations, and the proposal met the object, spirit and policy of the legislation. The fact that Cobalt was included in the Terms of Reference but not included in the proposal was irrelevant. Accordingly, the application for judicial review should be dismissed. [page127]

APPLICATION for judicial review.

Cases referred to

Apotex Inc. v. Canada (Attorney General), 1994 47 (SCC), [1994] 3 S.C.R. 1100, 176 N.R. 1, 59 C.P.R. (3d) 82, affg (1993), 1993 3004 (FCA), [1994] 1 F.C. 742, 69 F.T.R. 152n, 162 N.R. 177, 51 C.P.R. (3d) 339 (C.A.), affg (1993), 1993 17518 (FC), 66 F.T.R. 36, 49 C.P.R. (3d) 161 (sub nom. Apotex Inc. v. Merck & Co.); Barrick Gold Corp. v. Ontario (Minister of Municipal Affairs and Housing) (2000), 2000 16929 (ON CA), 51 O.R. (3d) 194, 193 D.L.R. (4th) 635, 15 M.P.L.R. (3d) 183 (C.A.), affg (1999), M.P.L.R. (3d) 148 (Ont. S.C.J.); Bruce (Township) v. Ontario (Minister of Municipal Affairs and Housing) (1998), 1998 7155 (ON CA), 41 O.R. (3d) 309, 164 D.L.R. (4th) 443, 48 M.P.L.R. (2d) 201 (C.A.), affg (1998), 1998 14632 (ON SC), 37 O.R. (3d) 171, 45 M.P.L.R. (2d) 92 (Gen. Div.)

Statutes referred to

Municipal Act, R.S.O. 1990, c. M.45, s. 25.2 Municipal Act, 2001, S.O. 2001, c. 25

Rules and regulations referred to

O. Reg. 216/96 ("Municipal Act"), ss. 1, 4(2)(i)

Counsel

George H. Rust D'Eye and Barnet H. Kussner, for applicant. Leah Price, for respondents Corporation of the Town of Haileybury and Corporation of the Town of New Liskeard. Kim Twohig and Yeta Herscher, for respondent Minister of Municipal Affairs and Housing.

[1] Endorsement BY THE COURT:-- The Township of Dymond seeks judicial review to set aside a municipal restructuring order made by the Minister of Municipal Affairs and Housing on February 21, 2003, which effectively amalgamated the Towns of Haileybury and New Liskeard and the Township of Dymond.

[2] The applicant asserts that as a result of a study process, which its inhabitants and a majority of the members of its council understood to be exploratory and non-binding, the applicant now finds itself the subject of an order by the Minister to amalgamate, contrary to the wishes of its inhabitants and its council.

[3] There is no challenge or allegation of bad faith to any action taken by any municipality and no challenge to the resolutions passed by the responding municipalities supporting the restructuring proposal. Nor is it suggested that the restructuring proposal was in any way deficient, or that there was any failure to meet the statutory pre-conditions to the exercise by the Minister of her statutory power to issue a restructuring order under the Municipal Act, R.S.O. 1990, c. M.45 (the "Act").

[4] Counsel for the applicant candidly conceded that if the order was properly made pursuant to the Act, the process met the letter, if not the spirit, of the law. [page128]

[5] On February 21, 2001, the council of the applicant unanimously adopted Terms of Reference for a Restructuring Committee by by-law, as did the responding municipalities, along with the Town of Cobalt. In May 2002, the Town of Cobalt withdrew from participating in the restructuring process. The applicant did not at any time withdraw from the restructuring process set in motion by its adoption of the Terms of Reference.

[6] In accordance with the terms of Reference, the restructuring process culminated in the preparation of a restructuring proposal. The proposal provided for the amalgamation of the applicant with the Towns of Haileybury and New Liskeard and was made available to the public in November 2002.

[7] The applicant was provided with considerable information regarding the restructuring process, including the possibility of a "double majority" vote that could result in the applicant being amalgamated without its consent. The impact of restructuring was discussed on numerous occasions over several years with members of the applicant's council, who participated in many meetings that took place prior to the vote on the restructuring proposal.

[8] Danny Whalen, Randy Winters and the applicant's chief administrative officer, John Telfer, urged the other members of council to attend the meetings of the Restructuring Committee. Despite these urgings, Glenda Labelle attended only two meetings of the Committee and Mark Alexander attended none at all.

[9] Regardless, all of the applicant's councillors were kept informed by reports from Whalen, Winters and Telfer and by circulation to them of Minutes of the Restructuring Committee. None of the applicant's witnesses raised any objections or concerns about what was going on at the Restructuring Committee. As well, reports and recommendations were regularly sent by the Restructuring Committee to the councils of the participating municipalities for information and input.

[10] Concessions were made by the other municipalities to satisfy concerns raised by representatives of the applicant. Further, as late as December 17, 2002, the applicant's council unanimously passed a by-law, which provides for a Tax Stabilization Reserve Fund to offset the anticipated tax increase resulting from amalgamation.

[11] Public information sessions were held in December 2002. December 17, 2002, was the date set for voting on the proposal by the councils of the three municipalities. On that date, the majority of the applicant's council resolved to delay the vote on the proposal until February 2003. [page129]

[12] No steps were taken by the applicant to inform the councils of Haileybury and New Liskeard, before they voted on the proposal, that the applicant did not want to be included in the proposal.

[13] The councils of Haileybury and New Liskeard did vote on the date set for voting on the proposal and passed resolutions supporting the proposal. As a result, the proposal was supported by the requisite majority of municipalities and electors, pursuant to s. 25.2 of the Act and Regulation 216/96 (the "Regulation").

[14] No steps were taken by the applicant before the proposal was submitted to the Minister to inform the councils of Haileybury and New Liskeard that the applicant did not want the proposal submitted to the Minister.

[15] After the restructuring proposal and supporting documentation were sent to the Minister, numerous ratepayers petitioned the Minister not to amalgamate the applicant with the Towns of Haileybury and New Liskeard. No submissions were made to the Minister by ratepayers or by the applicant's council. Further, this application was not brought until more than nine months after the proposal was submitted to the Minister and seven months after the order was signed.

[16] The basis for the challenge to the Minister's order is as follows:

1. The Minister did not have jurisdiction to issue an order under the Act and she should have proceeded in accordance with the Municipal Act, 2001, S.O. 2001, c. 25 (the "new Act"), which came into force on January 1, 2003;

2. The Minister breached the principles of natural justice by failing to give the applicant an opportunity to be heard before making the restructuring order;

3. The order is contrary to the spirit and intent of the Act; and

4. The Town of Cobalt must be treated as having been included in the proposal for purposes of the operation of the "double majority" rule, because it was included in the original Terms of Reference, which were never amended.

[17] We are of the view that the Municipal Act, 2001 does not apply. As of December 20, 2002, the necessary material was in the hands of the Minister, which required the Minister to issue an order implementing the restructuring proposal, pursuant to subsection 25.2(4) of the Act. [page130]

[18] The Minister had no alternative but to issue the order. All the pre-conditions, including the "double majority" requirement, had been met. The rights of the applicant and the responding municipalities had accrued prior to the coming into force of the new Act. See Apotex Inc. v. Canada (Attorney General), 1993 3004 (FCA), [1994] 1 F.C. 742, 51 C.P.C. (3d) 339, affd 1994 47 (SCC), [1994] 3 S.C.R. 1100, 59 C.P.R. (3d) 82. The restructuring order was therefore made under the proper statutory authority.

[19] There is no provision in the Act and no requirement at common law that the municipalities included in a restructuring proposal under s. 25.2 be given an opportunity to be heard by the Minister before an order is made. Thus there was no denial of natural justice in the circumstances.

[20] The applicant and the other municipalities interested in restructuring met and prepared a proposal after a two-year period of consultation and study. To meet the "double majority" requirement, the elected council of each municipality included in the proposal agreed to vote on the proposal on a date agreed to by the municipalities.

[21] The Towns of Haileybury and New Liskeard had the majority of electors and the votes of their councils in favour of the proposal met the support requirements under the Act and the Regulation. For these reasons, the proposal met the object, spirit and policy of the legislation, as described in Barrick Gold Corp. v. Ontario (Minister of Municipal Affairs and Housing) (2000), 2000 16929 (ON CA), 51 O.R. (3d) 194, 193 D.L.R. (4th) 635 (C.A.).

[22] The "double majority" rule only applies to those municipalities included in the restructuring proposal (ss. 1 and 4(2)(i) of the Regulation). The fact that the Town of Cobalt was included in the Terms of Reference, but not included in the proposal, is irrelevant. Further, the applicant took no steps to challenge the authority of the Restructuring Committee.

[23] We note that actions have been taken by the Transition Board, including negotiations for employment and other contracts to implement the new municipality, in order to comply with the Minister's order stipulating that the new municipality will commence on January 1, 2004.

[24] The evidence of members of the applicant's council confirms that well before the date set for voting on the proposal in December 2002, they were aware of the consequences of the "double majority" requirement and how it could adversely affect the applicant should the applicant decide not to amalgamate.

[25] We are of the view that the Minister's order resulted from an open, inclusive, consultative process that was carried out in accordance with the Act and engaged the support of the majority [page131] of the localities affected by it and of the total number of electors in the localities affected by it. See Barrick Gold, at para. 65.

[26] As the statutorily prescribed pre-conditions to the order were met, we see no reason to exercise our discretion to grant the equitable relief sought by the applicant. The facts in this case are not so egregious as to justify our interfering with the political process undertaken by the applicant and the responding municipalities. See Bruce (Township) v. Ontario (Minister of Municipal Affairs and Housing) (1998), 1998 7155 (ON CA), 41 O.R. (3d) 309, 164 D.L.R. (4th) 443 (C.A.).

[27] The application is dismissed. We are of the view that, in the circumstances, this is not a proper case for an award of costs.

Application dismissed.