DIVISIONAL COURT FILE NO.: 705/01
DATE: 2003/04/17
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
R.A. BLAIR R.S.J., LANG J. AND J. MACDONALD J.
IN THE MATTER OF the Approval of a certain
Proposal by the Toronto District School Board
to dispose of the Humber Heights Centre in
Etobicoke
B E T W E E N:
HUMBER HEIGHTS OF ETOBICOKE RATEPAYERS INC.
Applicant
Dennis A. Trinaistich, for the Applicant
- and -
TORONTO DISTRICT SCHOOL BOARD
Respondent
Harry Underwood and Erica J. Baron, for the Respondent
HEARD: February 7, 2003
R E A S O N S
THE COURT:
Introduction
[1] Humber Heights of Etobicoke Inc., a ratepayer's association, applies for a declaration that the approval of a lease by the Toronto District School Board (“the Board”) is void for procedural unfairness.
[2] The site in question, located in the Humber Heights area of Etobicoke, was a public junior school until it was closed in 1982. Since then it has been used for various purposes, initially for adult education and latterly for storage. The ratepayers are not concerned about the loss of the school buildings, which only occupy 22% of the site, but rather about the land surrounding the buildings. Since the school closure, that surrounding land has been used by the community residents as a park for themselves, their children and their pets. The ratepayers are concerned about the loss of this, the only green space in their neighbourhood.
[3] The Board proposes to lease the property for a 50-year term to Oakwood Retirement Communities Inc. (“Oakwood”). Oakwood, a private company, proposes to demolish the buildings and to develop a seniors’ complex, including a 192-bed long-term care facility, a 196-bed retirement home and a 49-unit seniors’ apartment. There is a current need for such facilities in the area.
[4] The ratepayers challenge the Board’s approval of this lease on the grounds that the Board owes them a duty to act fairly in the circumstances, and that it breached that duty by approving the lease without notice to them and without public input.
[5] It is common ground that this court's jurisdiction does not extend to the merits of the Board proposal. It is restricted to a consideration of procedural fairness including whether the Board owed a duty of fairness to the ratepayers in the circumstances and whether it breached that duty.
The Statute
[6] The statutory provisions that govern the disposition of surplus property by a school board give a board the "power to sell, lease or otherwise dispose of any school site … (a) on the adoption of a resolution that the site … is not required for the purposes of the board": the Education Act, R.S.O. 1990, c. E.2, s. 194(3)(a). In this context, the purposes of a school board relate to its education mandate. In addition, the Act empowers the Minister to make regulations governing the sale or lease of a school site. Regulation 444/98, made in accordance with the Act, provides that a board shall not dispose of a site without issuing a proposal to such public bodies as the French-language school boards, the Roman Catholic board, the university, the municipality, the Crown and other like bodies. Such a proposal was issued in this case in September 2000. None of the relevant bodies made a responding offer within the specified 90-day period.
[7] In those circumstances, section 12(1) of the Regulation allows the board to dispose of the property at fair market value to any other body or person. The Regulations contain no requirement for public notice or a public hearing.
The Policy
[8] The applicants rely on what they assert is a general duty of fairness owed by the Board to the local residents, and a breach of that duty. As evidence of such a relationship, the ratepayers rely on the Board’s Policy Number G.05 entitled “Leasing of Surplus Properties” (the “Policy”), which was adopted by the Board on May 10, 2000.
[9] In addition to addressing other matters, the Policy requires the Board to have regard to certain “Guiding Principles” when considering the lease, or otherwise disposition, of its surplus school space. Included in these are the following:
The TDSB, when considering the long-term lease of surplus school sites, will endeavour to retain public access to the open space, subject to the requirements of the future tenant(s).
The local community will be informed regarding potential alternative uses for those school facilities that have been declared surplus to the educational needs of the Toronto District School Board.
[10] The Policy also sets out Administrative Procedures including the need for a demographic analysis of long-term student needs in the community. The analysis is to form the basis for establishing the term of any lease agreement. The Policy stipulates that after the demographic analysis has been completed, the Board will issue a proposal to lease or otherwise dispose of the property to the public entities mentioned above, in accordance with Regulation 444/98. If no offer is received from that process – as was the case here – the Policy provides that the Facility Services branch of the Board will “recommend to the Board a suitable use(s) and tenant(s)”, based upon certain criteria. The Policy then states:
- Facility Services, along with the local trustee, will hold a community meeting, and notify all residents within a 500-m radius of the closed school:
• to present the recommended use(s) and tenant(s) for the closed school; and
• to receive input regarding the proposed use(s) and tenant(s) for the closed school(s)
Facility Services will forward a report to the Board recommending a tenant(s) for the closed school facility(s) for its consideration.
Upon the Board approval of a tenant for the closed school facility, Facility Services will begin negotiations with the tenant and do all things necessary to secure the tenant(s) in the closed school facility.
[11] Policy G.05 was voluntarily adopted by the Board rather than statutorily mandated. There is no evidence that it was published or otherwise circulated to the community, or that the residents or any affected person knew of its existence until after the events in issue in this case. This voluntary guideline is in contrast to the statutorily mandated guideline required for the closing of a school - a requirement not included for the disposition of a former school site.
The Procedure
[12] In August 2000, after completion of the demographic "needs" analysis, the Board decided that the school site would continue to be surplus to its educational needs in the long term, and that it would dispose of the property. The proposal notifying the alternative public bodies of the site's availability was made and the 90-day response period passed without any response. On November 22, 2000, the Board issued a memorandum to its members presenting the proposed business terms for the lease to Oakwood, and recommending the negotiation of terms. The Report noted that a public meeting would be coordinated and that, after the expiry of the 90-day period, the parties could proceed with execution of the lease. On February 22, 2001, a binding letter of agreement was executed subject to various conditions including satisfaction of zoning requirements. A public meeting was called for April 24, 2001. That meeting took place but was not successful. Those in attendance were angry at what was, and what was acknowledged to be, a "done deal" to lease the site to Oakwood.
The Issues
[13] The following issues are to be determined:
Did the Board owe a duty to the ratepayers to act fairly in making and acting upon its decision to enter into the long-term lease of the surplus school property to Oakwood?
If there were such a general duty of fairness, what was the extent of that duty?
Did the Board breach any such duty?
The Standard of Review
[14] It is well established that decisions made by elected bodies in the exercise of a statutory power and discretion are entitled to a certain deference and will not be interfered with unless the decision-maker has exceeded its jurisdiction or has failed to comply with the rules of natural justice and procedural fairness: see, for example, Vecchiarelli v. Toronto Catholic District School Board, [2002] O.J. No. 2458 (Div. Ct.), and cases cited therein. The Board is such a body.
[15] Where a tribunal’s decision is attacked on the basis of a denial of natural justice, however, it is not necessary for the Court to engage in an assessment of the standard of review in terms of “correctness”, “reasonableness” or “patent unreasonableness”. The question is whether the rules of procedural fairness or the duty of fairness have been adhered to: see Moreau-Bérubé v. New Brunswick (Judicial Council), (2002), 2002 SCC 11, 209 D.L.R. (4th) 1 (S.C.C.), at paras. 74-75; London (City) v. Ayerswood Development Corp., 2002 3225 (ON CA), [2002] O.J. No. 4859 (C.A.) at para. 10.
[16] In this case, then, the question is whether the Board has breached a duty to act fairly in the decision-making process. The judicial review is limited to a consideration of the procedure followed by the Board. It is not for the Court to review the merits of the Board’s decision to dispose of the property as surplus or its decision to lease to Oakwood.
Existence of a Duty of Fairness
[17] There has emerged from the authorities a duty of fairness in the administrative law context that is flexible and depends upon the context in which it arises. Not all decision-making capacity imposes such a duty, however. As Lord Pearson said in Pearlberg v. Varty, [1972] 1 W.L.R. 534 at 547:
Where some person or body is entrusted by Parliament with administrative or executive functions there is no presumption that compliance with the principles of natural justice is required, although as 'Parliament is not to be presumed to act unfairly,' the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fairness…. Administrative or executive efficiency and economy should not be too readily sacrificed.
[18] In determining whether a duty of fairness is owed by a public body to a person or group of persons, it is necessary to consider the nature of the decision, the relationship between the public body and those affected, and the effect of the decision on those affected. This principle is well summarized in the following passages from the Reasons of L’Heureux-Dubé J. in Knight v. Indian Head School Division No. 19, 1990 138 (SCC), [1990] 1 S.C.R. 653, at 669 – 670:
The existence of a general duty to act fairly will depend on the consideration of three factors: (i) the nature of the decision to be made by the administrative body; (ii) the relationship existing between that body and the individual; and (iii) the effect of that decision on the individual’s rights. This Court has stated in Cardinal v. Director of Kent Institution, supra,[^1] that whenever those three elements are to be found, there is a general duty to act fairly on a public decision-making body (LeDain J. for the Court at p. 653).
On the other hand, not all administrative bodies are under a duty to act fairly. Over the years, legislatures have transferred to administrative bodies some of the duties they have traditionally performed. Decisions of a legislative and general nature can be distinguished in this respect from acts of a more administrative and specific nature, which do not entail such a duty . . . [citations omitted] . . . The finality of the decision will also be a factor to consider. A decision of a preliminary nature will not in general trigger the duty to act fairly, whereas a decision of a more final nature may have such an effect.
[19] On behalf of the Applicant, Mr. Trinaistich argued that the school property in question is a community asset that is vested in a public body operated by elected officials. Collateral to this school use – or, more accurately, former school use – is the green space surrounding the buildings. Because of the importance of this space to the people in the community, he submitted, the Board owes a common law duty, first to inform the public about what is proposed and, secondly, to provide an opportunity for meaningful community input about whether the proposed use should proceed. In this case, “the heart of the decision making was conducted out of public view”.
[20] While there is a certain political ring to this argument, we are not persuaded that there is any room to import a common law requirement for a public hearing into circumstances where – as is the case here – the Legislature has provided a statutory and regulatory scheme for the disposition of surplus property by a school board and has omitted any requirement for a public hearing from that scheme.
[21] In any event, based on the criteria outlined above, we conclude that the Board did not owe a general duty of fairness to the Applicant or its members. The nature of the decision, itself, may point towards such a duty. It involves the disposition of surplus public school property, and the decision in that respect appears to be final. However, both the relationship between the Board and the ratepayers, in the context of this decision, and the question of what “rights” if any the ratepayers have vis-à-vis the Board concerning the use of the lands as parkland, both militate towards a lack of such a duty.
[22] In considering whether a general duty of fairness arises in the circumstances, the above criteria must be considered in the context of the Board’s statutory mandate, i.e., to promote the educational needs of the community. From an educational perspective, the Applicant does not take serious issue with the Board’s conclusion that the Humber Heights School site remained surplus to the community’s educational needs. Moreover, the Applicant recognizes that this Court has no jurisdiction to deal with the merits of the Board’s decision, or the Needs Study, and presented no sustainable argument that the Needs Study conducted by the Board was procedurally unfair or flawed.
[23] Thus, the decision at issue is neither the closure of the School in 1982, nor the decision that it be declared surplus in the year 2000, but rather the decision to enter into a long-term lease of the property to a tenant who, the Applicant’s members fear, will eliminate the green space they have become accustomed to using and that has otherwise been available to the community. The Board’s decision was one dealing with the disposition of an asset that is no longer needed to fulfill its educational mandate and, indeed, that is very costly for it to maintain since it represents space that is no longer funded by the Provincial Government.[^2]
[24] The Board therefore argues that while it may have a general duty to act fairly towards those persons who would be affected by its “educational” decisions – such as parents of school children with respect to a school closing – such a duty does not encompass an obligation to residents who have become accustomed to using the outdoor space as parkland and who object to the loss of that community use. We agree. The residents – including the members of the Applicant – who use and have used the green space for parkland may well have a variety of “interests” in the site; but they do not thereby acquire any legal rights, duties or privileges vis-à-vis the Board in that respect.
[25] In Vanderkloet et al. v. Leeds & Grenville County Board of Education (1985), 1985 1976 (ON CA), 51 O.R. (2d) 577 the Court of Appeal dealt with a situation where a board of education had decided in camera to reorganize three elementary schools under its jurisdiction because of declining enrolment by having all students up to grade 2 attend one school and all of the junior and intermediate students attend two other schools. The Court held that the effect of the board’s action was not to close a school, but only to reallocate students within the school district. It went on to deal, however, with the question of procedural fairness. At p. 585, Dubin J.A. said:
I am not satisfied that the principles of procedural fairness are applicable to a board of education, an elected public body, who, in good faith and within the jurisdiction assigned to it by the Legislature, resolve to reallocate the student body with its school district.
[Dubin J.A. then quoted at length from the judgment of Arnup J.A. in Re Abel et al. and Advisory Review Board (1981), 1980 1824 (ON CA), 31 O.R. (2d) 520 reviewing the principles governing the procedural duty of fairness, including those enunciated in Re Nicholson and Haldimand-Norfolk Regional Board of Com’rs of Police, 1978 24 (SCC), [1979] 1 S.C.R. 311, and concluded, at p. 586:]
In my opinion, the Board in passing the impugned resolutions was not affecting “the rights, interests, property, privileges or liberties of any person”, . . .
[26] If the parents of school children who have been moved to different schools are not owed a duty of fairness and do not acquire “rights” in that context, we do not see how residents who have simply become accustomed to using a closed school site as parkland over the years can be said to have acquired “rights” in relation to the Board’s decision to dispose of the property or to be owed such a duty.
[27] Absent considerations to which we will come to in a moment concerning the Board’s Policy G.05, the Board’s legal obligations are to comply with the statutory requirements of the Education Act and any governing Regulations thereunder. It has done so in this case.
Policy G.05
[28] The question remains, however, whether the Board has imposed a duty of fairness on itself, or raised a legitimate expectation of such duty, by its adoption of Policy G.05. We conclude that neither is the case.
[29] First, the Policy is a discretionary guideline, not mandated by the Education Act or any Regulation. The statutory scheme for disposition of property owned by school boards is to be contrasted with the statutory requirements governing boards in the context of school closings. Section 8(1)26 of the Education Act provides that the Minister of Education may create guidelines requiring school boards to implement policies regarding school closures and s. 171(1)7 permits school boards to close schools in accordance with school closure policies established in accordance with such guidelines. There are no such requirements, however, in the context of the disposition of an already closed school. In the absence of any statutory requirements or Ministry guidelines, the Board was entitled to adopt whatever policies it thought fit as to the disposition of property and – subject to considerations of “legitimate expectations” – to deviate from such policies if it wished.
[30] Secondly, we are not satisfied that the Board is precluded by the doctrine of legitimate expectations from deviating from the Policy. Mr. Trinaistich submitted that the Policy was put in place and adopted by the Board at its meeting in May 2000 as a guide to the Board in its decisions affecting the disposition of surplus school properties, including the Humber Heights School site. He argued that the Policy establishes public expectations as to the minimum standards for procedural fairness in relation to such dispositions. The Policy imposes on the Board a responsibility to act fairly and publicly, he concludes, and establishes a process for informing the public and for receiving meaningful input from the public before decisions are made and the assets disposed of.
[31] In substance, the principle of “legitimate expectation” involves the proposition that when a public authority has promised to follow a certain procedure – either expressly or through the existence of a regular practice that a claimant can reasonably expect to continue – the authority will be held to that procedure: see, for example, Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), 1990 31 (SCC), [1990] 3 S.C.R. 1170 at 1204; Rural Dignity of Canada v. Canada Post Corp. (1992), 7 Admin. L.R. (2d) 242 (Fed C.A.) at 257, leave to appeal refused (1992), 7 Admin. L.R. 242 (S.C.C.); Sunshine Coast Parents for French v. Sunshine Coast Sch. Dist. No. 46 (1990), 1990 260 (BC SC), 49 B.C.L.R. (2d) 252 (B.C.S.C.). In Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), Sopinka J. explained the rationale for the principle in this fashion, at 1204:
- The principle developed in these cases is simply an extension of the rules of natural justice and procedural fairness. It affords a party affected by the decision of a public official an opportunity to make representations in circumstances in which there otherwise would be no such opportunity. The court supplies the omission where, based on the conduct of the public official, a party has been led to believe that his or her rights would not be affected without consultation.
[32] Those seeking to rely on the principle must show that they had knowledge of the procedural policy asserted, however, and that they relied upon it: Sunshine Coast Parents for French v. Sunshine Coast Sch. Dist. No. 46, supra, at 262. Here, there is no evidence that Policy G.05 was published or otherwise disseminated amongst the community or to the members of the Applicant. Nor is there any evidence that anyone affected relied upon it. We find that there was no regular practice or policy with respect to prior consultation with the community, of which the community or the members of the Applicant were aware and which they could reasonably expect to be continued or followed.
[33] Policy G.05 was voluntarily adopted by the Board. Absent knowledge of and reliance on it by the ratepayers, the Board was entitled to deviate from it if it so desired. The principle of legitimate expectations is an equitable principle, and the Board’s decision must be considered in the context of its mandate and the factual matrix in which its decision was being made. Its conduct was consistent with its core educational mandate and it was required to move ahead with reasonable expedition at the peril of losing the long-term financial benefits of the proposed leasing of its surplus property since Oakwood was in danger of losing its Ministry of Health funding for the project. We have alluded earlier in these Reasons[^3] to the financial difference of approximately $332,000.00 per year between the present situation and the situation if the Oakwood project proceeds. This represents a considerable savings to the Board, and to the taxpayers – to whom the Board has a duty of fiscal responsibility.
[34] In any event, we are not persuaded that the Board acted in breach of Policy G.05.
[35] We accept the Applicant’s submissions that the long-term lease to Oakwood was “a done deal” before the public meeting was held on April 24, 2001 and that the Board had no intention to consult with the community or accept any community input about the decision to dispose of the surplus school site by means of the long-term lease to Oakwood, or about any alternative uses of the property. However, there is nothing in the Policy to indicate that prior community consultation is a pre-condition to the Board entering into an agreement with a proposed tenant. The Guiding Principles of the Policy stipulate that the local community “will be informed” of the potential alternative uses for the school facilities that have been declared surplus. The Policy’s Administrative Procedures call for a community meeting to be held “ to present” the recommended use and tenant, and “to receive input regarding” the proposed use and tenant.
[36] We do not read these provisions to outline a procedure whereby the community was to have, or could reasonably expect to have, some sort of political veto over the Board’s decision, or even the right to put forward other alternative use suggestions for consideration. The language of the Policy is consistent with the Board’s interpretation of it, namely that the purpose of the meeting was not to solicit input on alternative uses to which the school property may be put, but rather to provide the community with the opportunity to be heard as to the shape of the use to which Oakwood intended that it be put and how the proposed development would unfold. There was some evidence that Oakwood was willing to consider reasonable suggestions from the public regarding its development and to permit some continued community use of the property to the extent possible.
[37] We conclude that the Board’s interpretation of the Policy, in the circumstances, was not unreasonable.
Disposition
[38] In the result, then, the Application must be dismissed.
[39] Counsel have filed written submissions with respect to costs, which we have reviewed. The Board is entitled to its costs of the Application, which we fix at $20,000 plus disbursements plus GST.
R.A. Blair R.S.J.
Lang J.
DATE: April 17, 2003
J. Macdonald J.
DIVISIONAL COURT FILE NO.: 705/01
DATE: 2003/04/17
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
R.A. BLAIR R.S.J., LANG J. AND
J. MACDONALD J.
IN THE MATTER OF the Approval of a certain
Proposal by the Toronto District School Board
to dispose of the Humber Heights Centre in
Etobicoke
B E T W E E N:
HUMBER HEIGHTS OF ETOBICOKE RATEPAYERS INC.
Applicant
- and -
TORONTO DISTRICT SCHOOL BOARD
Respondent
REASONS
THE COURT
Released: April 17, 2003
[^1]: 1985 23 (SCC), [1985] 2 S.C.R. 643 (S.C.C.).
[^2]: At present the unfunded cost of the site to the Board is approximately $130,000 per year. The proposed lease to Oakwood will engender revenues of $202,500.00 per year. Thus, the “swing” for the Board is approximately $332,000.00 per year, a considerable savings to the taxpayers – to whom the Board does have a duty of fiscal responsibility.
[^3]: See footnote 2.