COURT FILE NO.: 647/01, 696/01, 383/02, 384/02, 518/02
DATE: 20030221
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, FORESTELL and PARDU JJ.
B E T W E E N :
CITY OF MISSISSAUGA
Appellant
Thomas R. Lederer/Susan E. Friedman, for the Appellant
ERIN MILLS CORPORATION LIMITED, MEADOWPINES DEVELOPMENT CORPORATION, CENTURY CITY DEVELOPMENT LIMITED, ORLANDO CORPORATION, 1251941 ONTARIO LIMITED, 593416 ONTARIO INC., 488236 ONTARIO INC., PARK RIDGE INDUSTRIAL DEVELOPMENT LTD., RICHILL CONSTRUCTION LIMITED, TOP FLIGHT VENTURES INC., PEEL PROPERTIES INC.
Respondents
Lynda J. Townsend Renaud, for the Respondents Orlando Corporation et al;
Mark Noskiewicz/Richard Storrey for the Respondent Erin Mills Development Corp.
AND B E T W E E N. :
THE REGIONAL MUNICIPALITY OF PEEL
Appellant
Ira T. Kagan, for the Appellant
- and -
MID-AIRPORT DEVELOPMENTS LTD. (“MID-AIRPORT)
Respondent
Garth Walkden, for the Respondent
AND B E T W E E N :
REGIONAL MUNICIPALITY OF HALTON AND THE CORPORATION OF THE CITY OF BURLINGTON
Appellants
Robert Doumani/Patricia Foran, for the Appellants
- and -
GUGLIETTI BROTHERS INVESTMENTS LIMITED, ROWHEDGE CONSTRUCTION LIMITED, PALETTA INTERNATIONAL CORPORATION and CAMBRIDGE SHOPPING CENTRE
Respondents
Mark Noskiewicz/Richard Storrey, for Guglietti Brothers Investments Limited and Rowhedge Construction Limited
Scott Snider for Paletta International Corporation
AND B E T W E E N :
GUGLIETTI BROTHERS IINVESTMENTS LIMITED and ROWHEDGE CONSTRUCTION LIMITED
Appellants
Mark Noskiewicz/Richard Storrey, for the Appellants
- and -
REGIONAL MUNICIPALITY OF HALTON
Respondent
Robert Doumani/Patricia Foran, for the Respondent
AND B E T W E E N :
BY-WAYS CONSTRUCTION INC.
Appellant
Scott Snider, for the Appellant
- and -
THE CORPORATION OF THE CITY OF BURLINGTON; THE REGIONAL MUNICIPALITY OF HALTON
Respondents
Robert Doumani/Patricia Foran, for the Respondents
HEARD: December 16, 17, 18, 19, 2002
Pardu, J.
[1] These appeals heard together raise a common issue of liability of developers to pay a tax on new development pursuant to the Development Charges Act, S.O. 1997 c. 27. The appeals turn on the interpretation of transitional provisions contained in Ontario Regulation 82/98.
[2] Section 17(1) and (2) of that regulation provides,
The following rules apply with respect to credits given or required to be given under section 14 of the Old Act:
The owner or former owner of land is entitled to the recognition of a credit towards a development charge imposed under a development charge by-law passed under the new Act by the council of the municipality that gave the credit.
If there is a conflict between a development charge by-law passed under the new Act and an agreement referred to in paragraph 3, the provisions of the agreement prevail over the by-law, to the extent of the conflict.
[3] The essential question is the meaning of “credit” and “conflict”. When can it be said that a by-law requiring payment of a development charge “conflicts” with obligations contained in a subdivision agreement entered into before the development charges regime came into force?
[4] New development results in increased infrastructure costs to a municipality for roads, sewers, fire protection and a host of other services. Before 1989, the contributions to be made by developers to these costs were dealt with by each municipality separately, by lot levies contained in agreements between a developer and a municipality.
[5] The Minister of Municipal Affairs could require developers to enter into an agreement with a municipality, as a condition of approving a subdivision agreement or severance of land. Each municipality developed its own policies regarding subdivision agreements and lot levies.
[6] In 1989 the Province adopted the first Development Charges Act (“Old DCA”) R.S.O. 1990 c. D.9. The purpose was to replace the diverse system of lot levies with a homogeneous regime for the payment by developers of contributions to growth-related capital costs.
[7] In 1998 the old DCA was repealed and the second Development Charges Act, 1997 S.O. 1997 c.27 (the “1997 DCA”) came into force. These two statutes comprehensively regulate development charges. Under the Planning Act regime lot levies were settled by the terms of agreements required for subdivision approval. Development charges under the newer statutory regimes generally were assessed at a time much closer to construction when the developer applied for a building permit. A developer who had paid lot levies in full or in part, but did not apply for a building permit until after adoption of the old DCA, or the 1997 DCA would have been required to pay infrastructure related costs twice. To avoid this result the Legislature adopted transitional provisions in both the old DCA and the 1997 DCA.
[8] The transitional provision in the Old DCA provided,
14(1) If an owner or a former owner has, before the coming into force of a development charge by-law, paid all or any portion of a charge related to development pursuant to an agreement under section 51 or 53 of the Planning Act or a predecessor thereof with respect to land within the area to which the by-law applied, the municipality shall give a credit for the amount of the charge paid.
14(4) If a conflict exists between the provisions of a development charge by-law and an agreement referred to in subsection (1) or (2), the provisions of the agreement prevail to the extent of the conflict.
[9] Although this section of the Old DCA has been repealed, section 17 of the regulations under the 1997 DCA refers to it. On March 1, 1998 the 1997 DCA Regulation 82/98 came into force. The opening paragraph of s. 17 provides,
The following rules apply with respect to credits given or required to be given under section 14 of the old Act.
[10] Section 17(5) of the regulation set time limits for a developer to apply to a municipality for recognition of a credit for amounts paid under the Planning Act regime. The application had to “set out the amount of the credit that is sought and the services to which the applicant claims the credit should be applied.” (17(6)).
[11] The municipality had to “give each applicant written notice of whether the municipality agrees or refuses to recognize the credit in accordance with the application” (17(7)) and time limits were fixed for the response.
[12] If the municipality recognized the credit requested or did not respond in time, the applicant was entitled to the credit requested (17(8)).
[13] An applicant dissatisfied with the decision had the right to appeal to the Ontario Municipal Board, by filing “with the clerk of the municipality, within 30 days after the applicant receives the notice of the municipalities refusal, a notice of appeal” (17(10)).
[14] Pursuant to section 17(11),
If a notice of appeal under paragraph 10 is filed with the clerk of the municipality, the clerk shall,
(i) compile a record that includes a copy of the application and the notice of the municipality’s refusal,
(ii) forward a copy of the notice of appeal and the record to the secretary of the Ontario Municipal Board within 30 days after the notice is received, and
(iii) provide any other information and material that the Board may require in respect of the appeal.
[15] The Ontario Municipal Board holds a hearing to deal with the appeal, on notice to the parties, and determines whether the appellant is entitled to the recognition of a credit, and if so the amount of the credit to be recognized and the services to which it relates. (17(12), (13), (14), (15).
[16] Sections 96(1) and (4) of the Ontario Municipal Board Act, R.S.O. 1990 c. 0.28 provide,
96(1) An appeal lies from the Board to the Divisional Court, with leave of the Divisional Court, on a question of law.
96(4) Save as provided in this section and in sections 43 and 95,
(a) every decision or order of the Board is final; and
(b) no order, decision or proceeding of the Board shall be questioned or reviewed, restrained or removed by prohibition, injunction, certiorari or any other process or proceeding in any court.
Standard of Review
[17] It is important to note that the privative clause does not apply to appeals on a question of law.
[18] As Bastarache J. noted in Pushpanathan v. Canada, [1998] 1 S.C.R. 982 at paragraphs [26] and [27],
[26] The central inquiry in determining the standard of review exercisable by a court of law is the legislative intent of the statute creating the tribunal whose decision is being reviewed. More specifically, the reviewing court must ask: “[W]as the question which the provision raises one that was intended by the legislators to be left to the exclusive decision of the Board?” (Pasiechnyk v. Saskatchewan (Workers’ Compensation Board), [1997] 2. S.C.R. 890, at para. 18, per Sopinka, J.).
[27] Since U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, this Court has determined that the task of statutory interpretation requires a weighing of several different factors, none of which are alone dispositive, and each of which provides an indication falling on a spectrum of the proper level of deference to be shown the decision in question. This has been dubbed the “pragmatic and functional” approach. This more nuanced approach in determining legislative intent is also reflected in the range of possible standards of review. Traditionally, the “correctness” standard and the “patent unreasonableness” standard were the only two approaches available to a reviewing court. But in Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748, a “reasonableness simpliciter” standard was applied as the most accurate reflection of the competence intended to be conferred on the tribunal by the legislator. Indeed, the Court there described the range of standards available as a “spectrum” with a “more exacting end” and a “more deferential end” (para. 30).
[19] Bastarache J. went on to analyze the factors to be taken into account in determining the standard of review (paragraphs [29] -[38]) which include,
(a) the presence or absence of a private clause,
(b) the expertise of the tribunal, and the relationship between that expertise and the particular decision-making role in question,
(c) the purpose of the enabling act as a whole, and the particular provision,
(d) the nature of the problem, “legal” or “factual”.
[20] In this case, I conclude that the standard of review is “correctness”.
[21] As noted s. 96 of the OMBA permits an appeal on a question of law with leave, and the privative clause does not apply to those appeals.
[22] At their heart, the 1997 DCA and the old DCA created regimes for taxation on development. The interpretation of “credit” and “conflict” and the application of s. 17 of Ont. Reg. 82/98 to pre-existing subdivision agreements raise legal issues which have very little factual component and which do not involve specialized expertise on the part of the Board.
[23] Courts have accorded a higher degree of deference to decisions of the OMB which involve application of its well recognized expertise in land use and planning. For example, in London (City) v. Ayerswood Development Corp [2002] O.J. No. 400, (Divisional Court) at paragraph 5 in the decision appealed, “the Board found that one 12 storey apartment building with appropriate site plan control measures would be “appropriate and desirable” and would have minimal environment impact on the existing slope and on the two abutting neighbours. The Board found that the amended proposal was reasonable, responsible and represented good planning.”
[24] In 6 & 7 Developments v. Hudson’s Bay Co., [2000] O.J. No. 3255, the Board’s task was to determine whether construction of a shopping centre was in the public interest and the evidence it needed to address that issue.
[25] Other kinds of decisions to which similar deference has been accorded to the OMB, include decisions about whether social housing should be included in the redevelopment of railway lands,[^1] whether a mall should be expanded,[^2] the frequency of review of Official Plans,[^3] or whether medical dental offices should be a permitted use.[^4]
[26] As noted in Stein-Peters v. Ontario [2001] O.J. No. 1839 (Divisional Court), an appeal from a decision of the OMB rejecting an appeal against a zoning by-law allowing a maximum of 36 units,
“To answer this question requires an interpretation of the Planning Act and therefore is at the heart of the Board’s jurisdiction and expertise. Accordingly, the decision of the Board on this point should be upheld unless it is patently unreasonable.”
[27] The issues raised by these appeals are very different. The essential question is “who pays, the developer or the taxpayers of the municipality?” The bipartite dispute does not turn on policy and planning factors, but is closer to pure statutory and contractual interpretation.
[28] Deference may also be accorded to some specialized tribunals on questions of law, but the role played by the tribunal in its domain of expertise is an important factor. For example, in Pezim v. British Columbia, [1994] 2 S.C.R. 557, the Securities Commission set policies and rules governing the conduct of the participants in financial markets, and had broad investigatory and prosecutorial powers. The question of what was a “material change” in the affairs of an issuer relied heavily upon the Commission’s knowledge of the markets.
[29] The role played by the OMB in interpreting s. 17 of Ont. Reg. 82/98 is very different. It sits in appeal from a decision of a municipal council. The 1997 DCA and regulation 82/98 comprehensively prescribes the rules applicable to development charges. In this particular context, the Board has no investigatory role and no real supervisory role apart from deciding the appeal on relatively narrow grounds, compared to, for example, the broad powers exercisable by the OMB in Re Mod-Aire Homes Ltd. And Town of Bradford (1990), 72 O.R. (2d) 683 (Div. Ct.), under s. 50 of the Planning Act 1983, S.O. 1983 c.1.
Analysis
[30] My approach to the interpretation of s. 17 of Regulation 82/98 is guided by the principles expressed in Sullivan and Driedger on the Construction of Statutes, 4th ed. (Toronto: Butterworth’s, 2002) at p.1,
Today there is only one principle or approach, namely the words of an act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
and at pp. 158-9,
Governing principle. It is presumed that the legislature avoids superfluous or meaningless words, that it does not pointlessly repeat itself or speak in vain. Every word in a statute is presumed to make sense and to have a specific role to play in advancing the legislative purpose. In Hill v. William Hill (Park Lane) Ltd., Viscount Simons wrote:
[Al]though a Parliamentary enactment (like parliamentary eloquence) is capable of saying the same thing twice over without adding anything to what has already been said once, this repetition in the case of an Act of Parliament is not to be assumed. When the legislature enacts a particular phrase in a statute the presumption is that it is saying something which has not been said immediately before. The rule that a meaning should, if possible, be given to every word in the statute implies that, unless there is good reason to the contrary, the words add something which would not be there if the words were left out.
In R. v. Proulx, Lamer, C.J. wrote:
It is a well accepted principle of statutory interpretation that no legislative provision should be interpreted so as to render it mere surplusage.
As these passages indicate, every word and provision found in a statute is supposed to have a meaning and a function. For this reason courts should avoid, as much as possible, adopting interpretations that would render any portion of a statute meaningless or pointless or redundant.
[31] The City of Mississauga essentially argued that the Board’s only role in hearing appeals under s. 17 of Ont. Reg. 82/98 is to calculate the dollar amount of lot levies paid pursuant to the subdivision agreement, for credit against development charges owing. This argument relies on the necessity to specify the dollar amount of the credit sought in the application, referred to in s. 17(6), the default resolution of the credit application “in the amount set out in the application” (17(8) and the Board’s duty to determine “the amount of the credit to be recognized.” This interpretation would render 17(2) meaningless.
[32] If the Board’s only function were to calculate the amount paid or the value of services provided in lieu of payment, there would be no scope for the operation of 17(2) which provides,
If there is a conflict between a development charge by-law passed under the new Act and an agreement referred to in paragraph 3, the provisions of the agreement prevail over the by-law to the extent of the conflict.
[33] At the opposite extreme, it was argued on behalf of some of the developers, that whenever a developer had paid all or part of a lot levy required by a subdivision agreement, the subdivision agreement conflicted with the development charge by-law and the developer was exempt from development charges in whole or on a proportional basis. Where there has been such part or full performance, the argument goes, asking for development charges alters the contractual obligations of the parties, and conflicts with that agreement, unless the municipality reserved to itself in the contract the right to unilaterally and retroactively alter the developer’s obligation to pay lot levies. This interpretation means that every payment of a lot levy will create a conflict.
[34] This interpretation would leave no room for the calculation of “credits” for any amounts paid as lot levies against development charges. Further, the authority to demand development charges is accorded by the 1997 DCA, not by subdivision agreements, and a municipality need not find authority to exact development changes in a subdivision agreement. That would be for the most part an illusory exercise; many of the subdivision agreements antedate the old DCA and the 1997 DCA by many years. Neither party would have contemplated the new legislation when those agreements were negotiated. Almost every agreement would understandably be silent about the possibility of development charges.
[35] Further, section 14(1) of the Old DCA provides,
If an owner or a former owner has, before the coming into force of a development charge by-law, paid all or any portion of a charge related to development pursuant to an agreement under section 51 or 53 of the Planning Act or a predecessor thereof with respect to land within the area to which the by-law applied, the municipality shall give a credit for the amount of the charge paid.
This contemplates that a developer who has paid all or part of lot levies required by a subdivision agreement would get a credit against development charges. Performance in whole or in part does not exempt the developer from payment of development charges.
[36] S. 17(1) of the 1997 DCA provides that,
The owner or former owner of land is entitled to the recognition of a credit toward a development charge imposed under a development charge by-law passed under the new act by the council of the municipality that gave the credit.
[37] The regulation contemplates that a developer who has paid all or part of lot levies required by a subdivision agreement would still be liable for development charges.
[38] Having rejected these two extremes, when can it be said that demanding development charges upon application for a building permit conflicts with a subdivision agreement containing provision for lot levies?
[39] The Court of Appeal addressed the meaning of “conflict” in section 14(4) of the Old DCA in Hammerson Canada Inc. v. Peel (Regional Municipality) [2001] O.J. No. 2468. At paragraph (4) the court noted,
The Act thus gave the municipalities the power to impose development charges by by-law where, previously, such levies could only be imposed by agreement. The provisions of existing agreements prevail over any charges imposed under the new legislation but only to the extent of the conflict between the provisions of the by-law and the provisions of the agreement. The appellant can point to no provision of the Financing Agreement that presents any such conflict. The Agreement and the By-law can stand together. The former does not address development charges on non-residential development. The latter does. There is no conflict.
[40] The agreements and the development charge by-laws can stand together, unless the agreement contains provisions which exempt a developer from payment related to infrastructure costs under future statutory regime such as the 1997 DCA.
[41] Payment of lot levies pursuant to a subdivision agreement does not in itself constitute a conflict with a development charges by-law; something more is required.
[42] The Supreme Court of Canada addressed the issue of whether there was a conflict between the requirements of different legislative regimes in 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town) 2001 SCC 40. It was argued that a municipal by-law which was more restrictive of pesticide use than regimes established by provincial and federal legislation was inoperative because it conflicted with federal and provincial legislation. The court referred to Attorney General for Ontario v. City of Mississauga (1981), 15 M.P.L.R. 212 (Ont. C.A.).
One of the competing tests to Multiple Access suggested in this litigation is based on Attorney General for Ontario v. City of Mississauga (1981), 15 M.P.L.R. 212 (Ont. C.A.). In that case, decided before Multiple Access, Morden J.A. saw “no objection to borrowing in this field, relevant principles of accommodation which have been developed in cases involving alleged federal-provincial areas of conflict. In both fields great care is, and should be, taken before it is held that an otherwise properly enacted law is inoperative” (p.232). He added, at p. 233, the important point that “a by-law is not void or ineffective merely because it ‘enhances’ the statutory scheme of regulation by imposing higher standards of control than those in the related statute. This is not conflict or incompatibility per se” (quoting Township of Uxbridge v. Timber Bros. Sand & Gravel Ltd. (1975), 7 O.R. (2d) 484 (C.A.)).
[43] The Supreme Court concluded that the appropriate test to apply when assessing whether a by-law conflicted with a different legislative regime was to ask whether the two regimes could co-exist. As noted at paragraph 38,
A true and outright conflict can only be said to arise when one enactment compels what the other forbids.” See also Law Society of Upper Canada v. City of Barrie (2000), 46 O.R. (3d) 620 (Sup. Ct.) at pp. 628-30: “Compliance with the provincial Act does not necessitate defiance of the municipal By-law; dual compliance is certainly possible.”; Huot v. Ville de Saint-Jérome, J.E. 93-1052 (C.S.) at pp. 19-20: [TRANSLATION] “A finding that a municipal by-law is inconsistent with a provincial statute (or a provincial statute with a federal statute) requires, first, that they both deal with similar subject matters, and second, that obeying one necessarily means disobeying the other. Imposition of a more onerous obligation on top of a less rigorous one is not a conflict.
[44] I apply the same analysis to assessing whether there is a conflict between the two infrastructure cost regimes, the one under the Planning Act and the other pursuant to the 1997 DCA; that is, between a subdivision agreement and a development charge by-law. If payment of a development charge is not forbidden by the subdivision agreement there is no conflict. Silence is not enough, nor is imposition of a further payment obligation. I can see no public policy reason why this mode of reasoning should not be applied by analogy to successive statutory regimes and to assessing whether there is a conflict between a development charge by-law and a subdivision agreement.
Fettering
[45] As noted in paragraph 74 of Mississauga’s factum at common law,
“Municipalities do not have the power to enter into contractual relations the effect of which would be to impinge on the legislative power of succeeding councils in respect of any matter affecting the public.”
However, in this case, the constraint on the municipality’s ability to collect development charges resulting from a conflict with a subdivision agreement is expressly authorized by s. 17(2) of Ont. Reg. 82/98.
Subdivision Agreements
[46] I turn then to an analysis of each of the subdivision agreements in issue in these appeals and the OMB’s decision in each case.
Mississauga v. Erin Mills Corp. et al, 647/2001.
[47] It follows from the foregoing that the OMB erred in law when it concluded at page 24,
“The Board finds that development charges under the new By-law are a form of lot levy. The application of the new By-law requires the appellants to pay virtually the same charge related to development twice. The Board finds that the reopening of the lot levy agreements and the requirement that the appellants pay additional sums for the same thing, before a building permit will issue, constitutes a conflict between the new By-law and the lot levy agreements, for the purposes of section 17(2) of the Regulation.”
[48] The agreements between the City of Mississauga and the Respondents do not foreclose the imposition of development charges under a future and different statutory regime such as the 1997 DCA. There is therefore no conflict, and the decision of the OMB allowing the Respondents’ appeals from the decisions of the City of Mississauga is set aside, thereby restoring the Mississauga decisions on the Respondent’s credit claim applications. There was no dispute about the calculations made by Mississauga.
Regional Municipality of Peel v. Mid-Airport Developments Ltd., 696/2001.
[49] The OMB accepted the argument of Mid-Airport described at page 12 of the Board’s reasons,
“Mid-Airport takes the position that its obligations under the subdivision agreement have been performed and that the Region’s request for a further financial contribution reopens the subdivision agreement that has already been fully performed. It argues that the reopening of the agreement and the requirement that further amounts be paid towards the same thing, is a conflict between the new By-law and the subdivision agreement.”
At page 16, the Board concluded that unless the subdivision agreement gave the Region the right to retroactively and unilaterally vary payments made on account of lot levies, that the subdivision agreement conflicted with the development charge by-law.
[50] Again, for the reasons expressed earlier, the Board erred in law. There was nothing in the subdivision agreement which foreclosed development charges pursuant to the new legislative regime. The appeal is allowed. The Board’s decision is set aside, thereby restoring Peel Region’s decision on the Respondent’s credit claim application, as there was no dispute as to the Region’s calculations.
Paletta & By-ways Construction v. Halton and Burlington, 518/02
Guglietti and Rowhedge v. Halton, 384/02
Halton & Burlington v. Con-Drain, Guglietti, Rowhedge, Paletta Cambridge, 383/02.
[51] Both developers and municipalities appeal from various aspects of decision 0776 dated June 07/2002 of the OMB.
[52] The Board concluded that development charge by-laws which require payment on top of the lot levies specified in a subdivision agreement and paid by a developer conflict with that agreement and that the developer is therefore entitled to a credit against all development charges which might ever be payable, whenever the developer applies for a building permit. The member noted at page 22 of the decision,
“The statutory direction requires that in the event of a conflict between the provisions of an agreement and those of a by-law passed pursuant to the Development Charges Act, the agreement shall prevail to the extent of the conflict. It is therefore material to the matters before the Board, that one should find whether or not a conflict exists and to delimit the extent of the conflict should one exist, thereby preserving the integrity of the agreement. Neither the Act itself nor regulations under the Act prescribes the context of the conflict or the circumstances which would give rise to it. Based on the evidence, the Board will conclude that the conflict in question is essentially whether and to what extent might a subsequent by-law impose new or additional development impact fees in place of or additional to those already confirmed through a development agreement, thereby creating an inconsistency.”
And at page 29,
“…a conflict arises when the owner has met the full obligation of the agreement to pay the amount established at the time established, but the municipality by a subsequent by-law or policy would seek to contradict, reverse, amend, modify or override the provisions of the agreement. Similarly, it must be concluded that a conflict exists when the agreement unambiguously exempts the owner from development levies on a class of use, and the municipality would seek to revisit that exemption by requiring payments under a future by-law or policy for the development of such lands…”
The Board finds that the only instance wherein the municipality may apply a new Development Charge By-law to lands under Development levy agreement is where there is a proposed change in use, where the terms of payment have not been met, where the agreement expressly provides for a later municipal payment schedule, or where the terms of agreement permit.
[53] The Board essentially concluded that where an agreement fixed an amount and time for payment of lot levy, but did not reserve to the municipality the right to unilaterally demand more money on account of infrastructure costs, the agreement conflicted with the development charges by-law and the developer was therefore exempt from any development charges whenever it applied for a building permit. For the reasons expressed earlier, the Board erred in adopting this definition of conflict.
[54] The Board applied this erroneous approach to several appeals before it.
City of Burlington & Guglietti Plan 20M-480
City of Burlington & Guglietti-Rowhedge & Con-Drain Plan 525
City of Burlington & Paletta Plan 446
[55] In each case the agreement provided that the developer would pay the city the “capital contributions set out in the Sixth Schedule”.
[56] Schedule 6 fixed the amount of levy per hectare, and added,
“Capital Contributions are payable in full at the time of the execution by the Owner of this Agreement. If, by resolution, the Council of the City of Burlington has changed its general Schedule of Capital Contributions charged on commercial and industrial plans of subdivision and on commercial and industrial blocks in mixed use plans of subdivision prior to the City of Burlington advising the Director of Regional Planning or such other applicable agency that all applicable conditions have been satisfied, the Capital Contributions payable to the City will be in accordance with such changed general Schedule of Capital contributions.”
[57] The developers argue that this provision restricted the City’s ability to change “Capital Contributions” to circumstances where the “general Schedule of Capital Contributions charged on commercial and industrial” land was changed before the developer had satisfied the conditions under the subdivision agreement, and for that reason, since these developers had satisfied all conditions, no development charges were payable.
[58] This argument assumes that development charges are essentially the same as lot levies contained in subdivision agreements. The subdivision agreements address only the latter and do not contemplate the new and different regimes created by the old and new DCA. As Osbourne J. noted in Re Ontario Cancer Treatment and Research Foundation and Corporation of the City of Ottawa et al., 38 O.R. (3d) 224 at page 249,
“In my view the D[evelopment] C[harge] scheme should be assessed for what it is, not on the basis of an assessment of what it replaced.”
[59] I find that there is no conflict between these agreements and the development charge by-law.
[60] The decision of the Board granting a “credit” to the full amount of any future development charges payable for all applicable services is set aside. Counsel for the City of Burlington thought it likely that there was no dispute as to the calculation of the amounts paid as lot levies under the subdivision agreements, and the calculation of the credit, but asks that the matter be remitted back to the OMB before a differently constituted board for hearing as to the quantum of the credit in the event the parties are unable to agree, and an order will issue to that effect
Region of Halton Appeals
Paletta – Plan 20M-232
[61] In this case, the subdivision agreement provided:
“Capital Contributions will not be required with respect to the redevelopment and/or new development of commercial and/or industrial lands.”
[62] Unlike other agreements which fixed an amount and date for payment of lot levies, this agreement focused on the future.
[63] While “Capital Contributions” is a broad term which could admit of some ambiguity, the general sense is that the developer would not have to make payments in the future for infrastructure costs for commercial and/or industrial lands. This conflicts with the development charges by-law in that exacting the charge under the DCA files in the face of the agreement that such charges would not be demanded. Accordingly, the Region of Halton appeal in relation to Plan 20M-232 (Palleta) is dismissed.
Appeal by Guglietti – Rowhedge
Plan 480
[64] In this case the board dismissed the developer’s appeal.
[65] At the time this agreement was executed there were no regional levies; the agreement is silent with respect to development charges which might be demanded in the future. This does not conflict with the DCA bylaw and the appeal by the developer is dismissed.
Appeal by Guglietti & Con-Drain
Plan 20M-525
[66] In this case the Board gave a credit for all Capital Contributions paid. The developer appeals from that decision, seeking a credit for any future development charges. Again, this agreement specified an amount and date for payment of the lot levies, but said nothing about demands under any future regime. There is no conflict and the developer’s appeal is dismissed.
Appeal by By-Ways Construction Inc.
Plan 608
[67] In this case the subdivision agreement, dated May 8, 1955, was signed by the developer and the former Township of Trafalager. The developer claims a credit only for amounts paid, specified in the agreement as
“a capital contribution towards the cost of the municipal sewage treatment plant and truck mains to be installed by the Township, computer at the rate of $500 per acre….”
[68] The Board concluded, at page 34,
“From the evidence, the Board finds that the agreement referred to cannot be seen to be a prohibition against the Region applying its development charges to the subject lands. The Regional Municipality was not a party to the agreement since it did not then exists and nothing should not obstruct its proper exercise of function. Since the City no longer administers the waste water treatment function it cannot address the issue. Yet contributions were made for one service. The Board finds that the Region is empowered to apply its development charges for all its services to the subject lands while giving a credit in respect of the waste water service and charges component.”
[69] Section 77(7) of the Municipality of Halton Act, 19783, S.O. 1973, c.70 provides:
“(7) With respect to any agreements entered into by any municipality or local board thereof in the Regional Area respecting the interception, collecting, disposing or discharging of sewage, except as provided for in subsection 8, the Regional Corporation shall stand in the place and stead of such municipality or local board for all purposes of any such agreement”
[70] The parties do not dispute that the Township of Trafalgar did not exist in 1973. It therefore is not a municipality within the meaning of s.77(7) of the Regional Municipality of Halton Act and the Region does not therefore stand in the contractual shoes of the former township. Accordingly, no conflict can arise between the Region’s DCA bylaw and the 1955 agreement and the Region need not give credit for amounts paid pursuant to that agreement. The appeal of By-Ways Constructioin Inc. is therefore dismissed.
[71] Paragraph (5) of the Board’s decision, on page 44, implements the Board’s erroneous view of “conflict” and is set aside.
[72] The Board also deleted section 28 of the Halton’s Development Charge By-law.
[73] That provision extended the Region’s transitional policy on development charges to November 30, 1999 provided that the building permit application was received on or before September 30, 1999. This transitional policy provided that no development charges would be required on the first building permit for a lot or block, for properties governed by agreements executed between October 1988 and April 1999 where lot levies had been paid.
[74] The Board held, at page 41,
“Recognition of credit under the Act proceeds simply on the basis of the existence of a conflict, and where the agreement ties payment without qualification to the execution of the agreement, it is unacceptable for the municipality either by By-law and even less through a reference to its transitional policies to override the implications of the conflict. The Board agrees with the appellant that section 28, seeks to diminish the purpose and effect of the Act and Regulations by interposing arbitrary criteria for payment of credits (on building permits rather than on execution of agreements as may have been concluded, and by a date determined without regard to the provisions of the Act). In the overall, section 28, if approved potentially frustrates the parent By-law and it must be deleted.”
[75] The Board held that section 28 of the by-law restricted availability of an exemption where levies had been paid, to the first lot or block only, and that since payment of the levies pursuant to a subdivision agreement conflicted with a development charge by-law, and gave a credit for all development charges which might be payable, Section 28 improperly restricted the scope of credits available. Given this court’s interpretation of “conflict” the by-law provides more generous treatment to developers than required by the new DCA and may stand.
[76] The Region’s appeal against the decision at page 42, paragraph 1(b) is allowed, and that decision is set aside, thereby restoring section 28 of the Development Charges by-law 117-99.
Ineligible Services
[77] Section 2(4) of the 1997 DCA provides,
2.(4) A development charge by-law may not impose development charges to pay for increased capital costs required because of increased needs for any of the following:
The provision of cultural or entertainment facilities, including museums, theatres and art galleries but not including public libraries.
The provision of tourism facilities, including convention centers.
The acquisition of land for parks.
The provision of a hospital as defined in the Public Hospitals Act.
The provision of waste management services.
The provision of headquarters for the general administration of municipalities and local boards.
Other services prescribed in the regulations.
[78] Some subdivision agreements required payment for these kinds of costs, related to what are now ineligible capital costs. Halton argues that developers are not entitled to any credit for these payments.
[79] S. 64(1) of the 1997 DCA expressly gave developers the right to apply for a refund in relation to contributions for ineligible capital costs where the developer provided services in lieu of payment of the development charge pursuant to section 13 of the old DCA.,
64.(1) The following apply with respect to a development charge by-law that expires or is repealed during the transition period or expires, under section 62, at the end of the transition period:
- Within 20 days after the expiry or repeal of the development charge by-law, the clerk of the municipality shall give written notice of the expiry or repeal of the by-law and of the last day for applying for a refund of ineligible credits given under section 13 of the old Act which shall be the day that is 80 days after the day the by-law expires or is repealed.
This may imply that no relief is available when the developer paid money instead of performing services for ineligible services. It is difficult to see any rationale for such a distinction.
[80] Section 14(1) of the old DCA provides that if an owner who paid all or part of a charge related to development pursuant to a subdivision agreement, the municipality had to give credit for the monies paid. The old DCA did not distinguish between eligible and ineligible capital costs.
[81] Section 17 of the new DCA states, “The following rules apply with respect to credits given or required to be given under section 14 of the old Act.” This suggests that credits for ineligible capital costs are still alive. Section 17(1) requires the council of the municipality that gave the credit to recognize that credit in favour of the owner.
[82] I agree with the Board’s decision that no distinction should be drawn between “eligible” and ineligible” payments pursuant to subdivision agreements in calculating the credit to be recognized, and dismiss the Region’s appeal against paragraph 1(a) of the Board’s order amending section 27 of By-law 117-99, and dismiss the Region’s appeal from the OMB’s decision in relation to Paletta and Cambridge Shopping Centre requiring credits be given for ineligible services.
[83] Paletta has abandoned its appeal in relation to Plan 1496.
[84] Counsel may make written submissions as to costs within 30 days, in the event the parties are unable to agree.
Pardu, J.
I AGREE – THEN, J.
I AGREE – FORESTELL, J.
Released:
COURT FILE NO.: 647/01, 696/01, 383/02, 384/02, 518/02
DATE: 20030221
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CITY OF MISSISSAUGA, et al.
Appellants
- and –
ERIN MILLS CORPORATION LIMITED, MEADOWPINES DEVELOPMENT CORPORATION, CENTURY CITY DEVELOPMENT LIMITED, ORLANDO CORPORATION, 1251941 ONTARIO LIMITED, 593416 ONTARIO INC., PARK RIDGE INDUSTRIAL DEVELOPMENT LTD., RICHILL CONSTRUCTION LIMITED, TOP FLIGHT VENTURES INC., PEEL PROPERTIES INC., et al.
Respondents
REASONS FOR JUDGMENT
Pardu J.
Released: February 21, 2003
[^1]: Canadian National Railway Co. v. Toronto [1992] O.J. No. 1114 [^2]: L’Charm Shopping Centres Ltd. V. Addemand-Norfolk [2000] O.J. 2191 [^3]: United Club Holidays v. Caledon [1998] O.J. No. 1316 [^4]: London v. Rose [1994] O.J. No. 1515