ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 07-0887
DATE: 20120425

BETWEEN:

ALVIN LINDHORST Plaintiff – and – THE CORPORATION OF THE TOWN OF COLLINGWOOD Defendant

Alvin Lindhorst, in person

Courtney Raphael, for the Defendant

HEARD: April 11, 2012

RULING ON INTERLOCUTORY MOTIONS

Boswell j.

OVERVIEW OF THE MOTIONS :

[ 1 ] Mr. Lindhorst attended a tax sale in the Town of Collingwood (“Collingwood”). Two properties were involved. He tendered low bids on both. Higher bids were accepted. He commenced a lawsuit against Collingwood seeking damages. He says the higher bids were invalid and ought to have been rejected in favour of his own.

[ 2 ] Collingwood moves for summary judgment, arguing that Mr. Lindhorst’s claim does not raise a genuine issue requiring a trial. In response, Mr. Lindhorst moves for production of certain records from Collingwood and asks that summary judgment be granted in his favour, asserting that the only genuine issue for trial is an assessment of his damages. For the reasons that follow, summary judgment is granted in favour of the Defendant. The Plaintiff’s motions are dismissed.

THE ISSUES:

[ 3 ] The competing summary judgment motions require the Court to determine if there is a genuine issue requiring a trial to resolve. To make that determination, I will proceed through the following analysis:

(i) First, I will consider the statutory framework that governs tax sales;

(ii) Next, I will comment briefly on the rules of interpretation that the Court must apply when considering that statutory framework;

(iii) I will then briefly canvas the principles that apply generally to summary judgment motions;

(iv) I will pause to examine Mr. Lindhorst’s request for further production; and,

(v) Finally, I will review the four specific issues Mr. Lindhorst raised with respect to the tax sales in issue in these proceedings and explain why they do not raise a genuine issue for trial.

[ 4 ] Before going further, I note that I raised with the parties the issue of whether this action was properly constituted. More specifically, whether proceedings ought properly to have been commenced by way of an application for judicial review. Without elaborating on the arguments of the parties, suffice it to say that both sides agreed that the proceedings were properly constituted and I have proceeded on that basis. In other words, and notwithstanding my own misgivings on the point, I will accept the parties’ agreement that the proceedings are properly brought by way of a claim for damages and will not address the matter of whether an application for judicial review was the appropriate process.

[ 5 ] To understand the analysis that follows, it is necessary to have a basic understanding of the facts of the case.

THE BASIC FACTS:

[ 6 ] The facts are not complicated, nor significantly disputed. They may be briefly stated.

[ 7 ] On July 9, 2005, Collingwood placed an advertisement in the Ontario Gazette indicating that it would be conducting a tax sale, by public tender, of two properties within its municipal boundaries. Mr. Lindhorst does not take issue with the form and substance of the advertisement. The description of the lands is not in issue and I will refer to them as Parcel 1 and Parcel 2.

[ 8 ] Mr. Lindhorst read the advertisement and called Collingwood to ask that a tender package be mailed to him. Upon receipt of his tender package, he called Collingwood to advise them that their tender form was labelled “Form 8” instead of “Form 7”. Prior to the sale in issue here, Collingwood had last conducted a tax sale in 2001. The Rules were amended in 2003 and the tender form number changed from Form 8 to Form 7, though the substance of the form remained the same in all other respects.

[ 9 ] The tender form sent out by Collingwood mirrored the form prescribed by the Rules, save for the inclusion of headings added by a municipal employee. To assist tendering parties, a former Collingwood tax collector had added the headings “Step One”, “Step Two” and so on, to the various component parts of the tender form (the “Step Headings”).

[ 10 ] The tax sale was scheduled to proceed at Collingwood’s municipal offices on August 10, 2005. The tenders received by Collingwood were opened at just after 2:00 p.m. Mr. Lindhorst was present during the opening of the tenders. In fact, he sat directly to the right of the Deputy Clerk and observed carefully as each tender envelope was opened.

[ 11 ] The highest bidder for Parcels 1 and 2 was the same person – Marco Oppedisano. He bid $33,000 for Parcel 1 and $21,500 for Parcel 2. Mr. Lindhorst was not close in terms of his bids for either parcel. He had bid $4,300 for Parcel 1 and $4,600 for Parcel 2. Mr. Lindhorst was, in fact, the fifth highest bidder on Parcel 1. Collingwood’s position is that he was also the fifth highest bidder on Parcel 2. He claims to have been the fourth highest. For the reasons that follow, nothing turns on this minor disagreement.

[ 12 ] Mr. Oppedisano’s bids were submitted on Collingwood’s tender form, marked “Form 8” with the Step Headings included. Mr. Lindhorst complained during the opening of tenders that Mr. Oppedisano’s envelopes had not been labelled correctly. Collingwood disagreed and ultimately accepted his tenders.

[ 13 ] Collingwood kept the tenders and deposit cheques for the two highest bidders for each parcel and returned the others to the parties who submitted them, including Mr. Lindhorst. Mr. Lindhorst did not, unfortunately, retain copies of his tender forms.

[ 14 ] Mr. Lindhorst wrote to Collingwood on August 24, 2005 and raised the following issues with respect to the sales of Parcels 1 and 2:

Parcel 1:

(i) The envelope containing Mr. Oppedisano’s bid did not contain the words “Tax Sale” and should have been rejected;

(ii) The second highest tender was not accompanied by the proper deposit of 20% and ought to have been rejected;

(iii) The third and fourth highest tenders were also submitted in envelopes that did not reference “Tax Sale” and ought to have been rejected;

(iv) Many other tenders were not on Form 7; and,

(v) His tender was the fifth highest in value but was in proper form and ought to have been accepted.

Parcel 2:

(i) The envelope containing Mr. Oppedisano’s bid did not contain the words “Tax Sale” and should have been rejected;

(ii) The second highest bid was not on Form 7 and ought to have been rejected;

(iii) The third highest bid was in an envelope that did not reference “Tax Sale” and ought to have been rejected;

(vi) Many other tenders were not on Form 7; and,

(vii) His tender was the fourth highest in value but was in proper form and ought to have been accepted.

[ 15 ] The issues raised by Mr. Lindhorst in his correspondence to Collingwood, were carried over into his Statement of Claim and form the basis for his assertion that Collingwood improperly accepted tender bids not in proper form, while improperly rejecting his bids.

[ 16 ] Mr. Lindhorst filed an affidavit in response to Collingwood’s motion for summary judgment and in support of his own similar motion. In his affidavit, Mr. Lindhorst responded to a number of allegations made by Collingwood in its motion materials. He did not, however, provide an evidentiary foundation for the assertions he made about the impropriety of the tender bids accepted by Collingwood, nor did he establish in evidence that his bid was in proper form.

[ 17 ] That said, Collingwood’s motion materials include copies of Mr. Oppedisano’s bid envelopes, as well as his tenders. The Court is, accordingly, in a position where it can at least assess their compliance with the Rules.

[ 18 ] Mr. Oppedisano’s tender envelopes were marked in the same fashion for both Parcels 1 and 2 and read as follows:

TENDER BID

Sale of Concession 11 Part Lot 43 RP51R-551 Part 9

Town of Collingwood, County of Simcoe

101 x 150

4331 080 012 0409 000

Attn: Marjory Leonard – Treasurer

(Note: the envelope for Parcel 2 was in the same format, but reflected a different registration number and tax roll number appropriate to Parcel 2)

[ 19 ] Having set out the basic background facts, I will proceed with the analysis as described above.

ANALYSIS:

A. The Statutory Procedure for Tax Sales

[ 20 ] To understand Mr. Lindhorst’s claims, it is necessary to appreciate the basic structure of a tax sale.

[ 21 ] Tax sales are governed by the Part XI of the Act. Essentially, a sale is advertised in the Ontario Gazette – a weekly publication of the province’s legal notices and regulations. Interested parties are invited to submit bids in a prescribed form directed to the municipal treasurer. At an appointed time and place the tender bids are opened publicly and the subject property sold to the highest bidder, who has a designated time period in which to complete the transaction.

[ 22 ] At issue in this proceeding is the manner in which the subject sales were conducted. A tax sale is, pursuant to s. 379(5) of the Act, to be conducted in accordance with the prescribed Rules, which are found in Ontario Regulation 181/03 , as amended.

[ 23 ] Of particular importance to this proceeding are the provisions relating to tendering, as found in s. 6 of the Rules:

6. (1) A tender shall be in Form 7 and shall be,

(a) typewritten or legibly handwritten in ink;

(b) accompanied by a deposit of at least 20 per cent of the tender amount, which deposit shall be made by way of money order or by way of bank draft or cheque certified by a bank or trust corporation;

(c) submitted in a sealed envelope which indicates on it that it is a tax sale and provides a short description or municipal address of the land sufficient to permit the treasurer to identify the parcel of land to which the tender relates; and

(d) addressed to the treasurer.

(2) A tender shall relate to only one parcel of land.

[ 24 ] The opening of tenders is addressed at s. 9 of the Rules:

9 . (1) The treasurer, at a place in the municipality that is open to the public, shall open the sealed envelopes containing the tenders as soon as possible after 3 p.m. local time on the last date for receiving tenders.

(2) The sealed envelopes shall be opened in the presence of at least one person who did not submit a tender, which person may be a municipal employee.

(3) After opening the sealed envelopes, the treasurer shall examine their contents and shall reject every tender that,

(a) is not equal to or greater than the minimum tender amount as shown in the advertisement;

(b) does not comply with section 6;

(c) includes any term or condition not provided for in this Regulation; or

(d) has been withdrawn as set out in subsection 8 (1).

(4) After complying with subsection (3), the treasurer shall reject all but the two highest of the remaining tenders.

(5) Every rejected tender shall be returned to the tenderer together with the tenderer’s deposit, if any, and a statement of the reason for rejection.

[ 25 ] Mr. Lindhorst asserts that the Rules are to be very strictly interpreted, such that any variation from the prescribed process must result in the rejection of the offending bid. The interpretation of the Rules is a matter of some disagreement between the parties, so I will pause to comment briefly on the principles of statutory interpretation.

B. Principles of Statutory Interpretation

[ 26 ] The basic principles of statutory interpretation were recently addressed by Watt J.A. in R. v. Mahmood, 2011 ONCA 693 . He noted, at para. 105, that interpreting a statutory provision requires the court,

…to read the words in the subsection 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: Rizzo & Rizzo Shoes Ltd. (Re) , 1998 837 (SCC) , [1998] 1 S.C.R. 27 , at para. 21 . We are also to give the provision such fair, large and liberal construction and interpretation as will best ensure the attainment of its object, according to its true intent, meaning and spirit: Rizzo , at para. 22 ; Interpretation Act , R.S.C. 1985, c. I-21, as amended, s. 12 ; and Bell ExpressVu Ltd. Partnership v. Rex , 2002 SCC 42 , [2002] 2 S.C.R. 559 , at paras. 26-27 .

[ 27 ] Though it was repealed in July 2007, the Interpretation Act , R.S.O. 1990, c. I.11 was in force and effect at the time of the subject tax sale. Section 10 of that Act echoed the comments of Justice Watt, as above. It provided that all statutes are remedial and should be given such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the statute, according to its true intent, meaning and spirit. In addition, s. 28(d) provided that where a statutory form is prescribed, deviations from it, not affecting the substance or calculated to mislead, do not vitiate it.

[ 28 ] Neither party provided the Court with any authority directly on the issue of the object and intent of the Rules . That said, they appear relatively obvious. The forfeiture of one’s land is an extraordinary remedy. The Rules provide for a fixed and orderly process “designed to ensure the land owner who is in arrears receives fair and just process in the taking and sale of her property” (see Lindhorst v. The Corporation of the City of Cornwall , 2010 ONSC 3882 at para. 35 ).

[ 29 ] With these principles in mind, I will turn now to a discussion of the merits of the parties’ respective motions for summary judgment.

C. Summary Judgment

[ 30 ] Pursuant to Rule 20.04 of the Rules of Civil Procedure , summary judgment is to be granted where the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence.

[ 31 ] In determining whether a genuine issue for trial exists, the Court must consider the evidence submitted by the parties and is entitled to expect that each party will put its best foot forward on the motion: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 7979 (ON SC) , 28 O.R. (3d) 423 (Gen. Div.), at p. 434. In other words, the Court is entitled to proceed on the basis that the record contains all the evidence which the parties will present if there is a trial: Cuthbert v. T.D. Canada Trust , 2010 ONSC 830 () , [2010] O.J. No. 630, 88 C.P.C. (6th) 359 (S.C.) at para. 12 . Following amendments to the Rule, effective January 1, 2010, the Court is entitled to weigh the evidence of each party, evaluate the credibility of any deponent, and draw any reasonable inference arising from the evidence: Rule 20.04(2.1).

[ 32 ] The leading case on the interpretation of the amended summary judgment rule is Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 [ Combined Air ]. In Combined Air , the Court of Appeal developed what it described as a “new departure and fresh approach to the interpretation and application of the amended Rule 20.” This fresh approach was described, at paragraphs 50 and 51 of the decision, as the "full appreciation test". The test requires the motion judge to ask the following question: “Can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?" As Lauwers J. noted in Van v. Qureshi, 2011 ONSC 5746 , at para. 45 , citing Healey v. Lakeridge Health Corp ., 2010 ONSC 725 , aff'd 2011 ONCA 55 () , 103 O.R. (3d) 401, the new test requires the court to determine whether the "forensic machinery of a trial" is necessary in order to gain a full appreciation of the evidence and issues involved in the proceeding.

[ 33 ] The decision in Combined Air does not in any way alter the established burdens on each of the parties to a summary judgment motion. At para. 100, the Court observed:

As the moving parties, the respondents bore the legal burden to demonstrate that there was no genuine issue requiring a trial. As the responding party, Combined Air bore an evidentiary burden to respond with evidence setting out specific facts showing there is a genuine issue requiring a trial: see Esses v. Bank of Montreal , 2008 ONCA 646 , 241 O.A.C. 134, at para. 44 .

[ 34 ] Given Mr. Lindhorst’s evidentiary burden, in responding to Collingwood’s motion for summary judgment, it is necessary, as a preliminary matter, to examine his request for additional production. In view of the obligation on each party to put its best foot forward, it would be unfair to proceed to assess the merits of the motion if Collingwood has failed to produce relevant and probative documents to Mr. Lindhorst.

The Production Issue

[ 35 ] Mr. Lindhorst moves for production of documentation listed in an appendix to his Motion Record dated February 24, 2012. He includes a list of undertakings, but has not clearly identified what undertakings were answered and what remain outstanding. I accept Collingwood’s evidence that all undertakings, save one, have been answered. The one outstanding undertaking involves asking Collingwood’s treasurer about her recollection of a phone conversation with Realtax Inc., a service offering tax sales advice and assistance. It is not of particular significant to the summary judgment motions.

[ 36 ] In addition to the answer to the outstanding undertaking, Mr. Lindhorst seeks a further and better Affidavit of Documents from Collingwood to include additional material he has identified. A list of his requests appears below. In respect of each item sought, I have set out my views in terms of relevance, materiality and/or proportionality. Ultimately, I am not ordering any of the documents sought to be produced because summary judgment is being granted in favour of Collingwood. In my view, none of the productions sought impact on the issues to be determined on the summary judgment motions. Mr. Lindhorst seeks the following:

(i) Roll Book Information – specifically the assessed property values for Parcels 1 and 2 both at the time of the subject sales and presently. This information is relevant to Mr. Lindhorst’s claim for damages and, subject to my decision to grant summary judgment, ought to have been produced;

(ii) Documentation supporting advice received from Realtax Inc. In my view, Mr. Lindhorst has failed to establish a basis on which this evidence should be produced. As opinion on the ultimate issue to be determined by the Court, it’s admissibility is questionable. While it may nevertheless be relevant, it also appears to be covered by litigation privilege;

(iii) Copies of Collingwood’s accounting records with respect to the sales of Parcels 1 and 2. Mr. Lindhorst raised in argument an assertion that Collingwood has failed to establish that the actual sales of Parcels 1 and 2 were completed in accordance with the terms of the Rules. But he did not raise this issue in his pleadings and, as the pleadings are presently constituted, the evidence is not relevant;

(iv) Copies of documents sent to Realtax and to Collingwood’s solicitors in support of Collingwood’s request for advice – legal or otherwise – on issues raised by Mr. Lindhorst about the sales. Specifically, Mr. Lindhorst is looking for full copies of the tender packages of all bidders higher than him. In my view, the request that Collingwood determine if Realtax or its solicitors have copies of the relevant tender documents was reasonable;

(v) Copies of information packages sent out to prospective tenderers for tax sales both before and after the subject sales. There does not appear to be any relevance to any sales conducted by Collingwood before or after the subject sales and I would not have ordered production of this material; and,

(vi) Copies of all emails between employees of Collingwood regarding the subject sales. This request is overly broad. Collingwood’s position is that it has produced all relevant correspondence. I would not have made such a blanket order for production.

[ 37 ] The motions for summary judgment can readily be disposed of in the absence of the additional production sought. Even in those limited areas where I believe additional production was warranted, such production would not have any material impact on the determination of the issues now before the Court. I will move on, therefore, to address the specific defects in the tax sales process alleged by Mr. Lindhorst.

D. The Alleged Defects in the Sale Process

[ 38 ] Mr. Lindhorst attacks the validity of the sales to Mr. Oppedisano on the following bases:

(i) The tender envelopes were not properly marked;

(ii) The tenders were not on Form 7;

(iii) The tender forms used contained headings that deviated from the prescribed form; and,

(iv) Collingwood failed to complete the sales transactions in compliance with the Rules.

[ 39 ] I will review each issue in turn.

(i) The Envelopes

[ 40 ] Mr. Lindhorst’s strongest argument is that the envelopes submitted by Mr. Oppedisano do not conform with Rule 6(c) and should have been rejected by the treasurer pursuant to Rule 9(3)(b). Mr. Lindhorst has used this same argument in other tax sale litigation: see Lindhorst v. The Corporation of the Town of Kingsville , 2007 41435 and Lindhorst v. The Corporation of the City of Cornwall , 2010 ONSC 3882 . His position is that the Rules are very clear and any deviation from them must result in a rejection of a tender. He says the treasurer has no discretion to deviate from the Rules.

[ 41 ] Recall that Rule 6(c) requires that tenders must be “submitted in a sealed envelope which indicates on it that it is a tax sale and provides a short description or municipal address of the land sufficient to permit the treasurer to identify the parcel of land to which the tender relates.”

[ 42 ] There is no dispute that Mr. Oppedisano provided a description of the lands sufficient to permit the treasurer to identify the parcels in issue. The dispute arises because of the absence of the words “tax sale” on Mr. Oppedisano’s envelopes. But, to be clear, the Rule does not require the use of the exact phrase “tax sale”. It merely provides that the envelope has to indicate that it is a tax sale. In this instance, the envelopes were marked “tender bid”, addressed to the treasurer and setting out the description of the very lands that were subject to the tax sale. This was the only tax sale being conducted at the time by Collingwood and in fact they had not done a sale prior to this since 2001. In my view, the envelope was sufficiently descriptive to identify it as a tender for a specific tax sale.

[ 43 ] I have identified the object of the Rules as ensuring the land owner receives just and fair process in the sale of his or her lands. Ensuring that tender envelopes are properly marked, serves a dual purpose in furtherance of that object. First, it enhances the likelihood that all tenders are received into the right hands – those of the treasurer – and all are taken into consideration at the time of the opening of the envelopes. At the same time, those parties who do not properly mark their envelopes will not have cause to complain if their tender ends up on the wrong desk and is not included in the process.

[ 44 ] In this case, the envelopes were sufficiently clearly marked so as to comply with Rule 6(c) and to ensure that the purpose and intent of the Rule was met. In my view, Collingwood was right not to reject Mr. Oppedisano’s bids on the basis of any alleged irregularity with his envelopes.

(ii) Use of Form 7

[ 45 ] Rule 6(1) provides that all tenders must be in Form 7. In this instance, Mr. Oppedisano’s tenders were, in form and content, in accordance with Form 7, save that the form was entitled Form 8. There is no dispute that Form 8 as used in this case was the same in substance as the prescribed Form 7. In my view, it would be a perverse finding to conclude that Mr. Oppedisano’s bids were invalid because the form he used said “Form 8” instead of “Form 7”, where the content was the same as that prescribed by the Rules, and where Mr. Oppedisano completed the very form provided to him by Collingwood.

[ 46 ] The purpose of using a prescribed form is to ensure that every tenderer includes the same information, in the same format, making comparisons between tenders clear and easy. That purpose was not in any way subverted by the use of a document marked Form 8, where the content was the same as the prescribed Form 7.

[ 47 ] Lindhorst v. The Corporation of the Town of Kingsville , as above, was a case involving a tax sale in June 2004. Mr. Lindhorst had submitted a tender on Form 8. The Rules were amended in May 2003, changing Form 8 to Form 7. Mr. Lindhorst did not complain about his own or anyone else’s use of Form 8 in that case, even though, as here, Rule 6(1) prescribed the use of Form 7. The presiding judge, Justice Aston, found that the use of Form 8 was not fatal to any tender bid using it. I agree. It is nothing more than an insignificant irregularity.

(iii) Alterations to Form 7

[ 48 ] Similarly, the use of the Step Headings in the tender form circulated by Collingwood does not undermine the integrity of the form. It remains, in substance, the same form as prescribed by the Rules. The Step Headings are, in my view, a deviation from the prescribed form, not affecting its substance or calculated to mislead. As such, the deviation does not vitiate the form.

[ 49 ] Again, it would be a perverse result for Collingwood to reject a bid based on the use of a form prepared and circulated by Collingwood itself.

(iv) The Transfer of the Lands

[ 50 ] Mr. Lindhorst argued at the motion that Collingwood had failed to establish that Mr. Oppedisano completed the purchase transaction as required by the Rules. This argument fails for two reasons. First, Mr. Lindhorst did not plead any such failure as a component of his claim. Second, Mr. Lindhorst is seeking damages from Collingwood for an alleged breach of a statutory duty. He bears the legal and evidentiary onus of establishing the breach. He has no evidence to support the assertion that the sales were not completed in a compliant manner.

[ 51 ] In the result, Mr. Lindhorst has failed to satisfy the Court that there were any irregularities with Mr. Oppedisano’s tenders that ought to have invalidated them. In my view, the evidence clearly supports a finding that the tax sales were conducted in compliance with the Rules, that Mr. Oppedisano’s tenders were compliant with the Rules and that the sales transactions were completed in a compliant manner. Mr. Lindhorst’s claim raises no genuine issue for trial and must be dismissed. There are, moreover, two additional bases upon which to reject Mr. Oppedisano’s claim and I will canvass them briefly.

E. Additional Shortcomings

[ 52 ] As indicated, Mr. Lindhorst had the fifth highest bid on Parcel 1 and the fourth highest bid on Parcel 2. For his claim to succeed, he must prove not only that Mr. Oppedisano’s bids should have been rejected, but that all other higher bids ought to have been rejected as well. The evidence filed on the motions for summary judgment fails to do so.

[ 53 ] Finally, Mr. Lindhorst must establish that his tenders were submitted in accordance with the Rules. He has failed to do so.

CONCLUSION:

[ 54 ] For all of the foregoing reasons, I am satisfied that Mr. Lindhorst’s claim does not raise a genuine issue for trial. This is not a case where the full forensic machinery of a trial is necessary to make a determination of the issues on their merits. In fact, it is far from it.

[ 55 ] The parties may address me in writing on the issue of costs. Each may submit written submissions of no more than 2 pages (not including Costs Outlines) on a 14 day turnaround. The Defendant is to serve and file its submissions by May 9, 2012 and the Plaintiff by May 23, 2012. Submissions should be filed with the judges’ secretaries’ office in Newmarket.

Boswell J.

Released: April 25, 2012