Court File and Parties

COURT FILE NO.: CV-11-430531

DATE: 2012-07-11

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Botany Hill Developments Ltd. v. The Corporation of the Town of Oakville,

BEFORE: Michael G. Quigley J.

COUNSEL: William D. Dunlop, for the Plaintiff/Responding Party David G. Boghosian, for the Defendant/Moving Party

HEARD: May 8, 2012

Endorsement

[1] On this motion, the Town of Oakville seeks to recover costs from Botany Hill under rule 37.09 (3). The Town was the responding party on a motion brought against it by Botany Hill for an interim injunction, but that motion has never been heard and the Town says it has been abandoned. As such, the Town says it should have its costs against Botany Hill on a substantial indemnity basis totaling $36,932.43, plus the costs of this motion.

[2] Rule 37.09 provides for costs consequences of abandoned motions. It contemplates that a party who makes a motion may abandon it by delivering a notice of abandonment. As well, where a party serves a notice of motion but does not file it or appear at the hearing, that party will be deemed to have abandoned the motion unless the court orders otherwise. Subsection 3 of rule 37.09 directs that a responding party on whom a notice of motion was served is entitled to be paid the costs of the motion forthwith where motion is abandoned or deemed to have been abandoned, unless the court orders otherwise.

[3] In this case, the dispute between these parties relates to a landslide that occurred on the high, steep slope that runs from the back of the plaintiff’s property at 151 Randall Ave. in Oakville down to the Sixteen Mile Creek. That landslide caused a precarious situation because it exposed part of the foundation of the building on the Randall Avenue property, and there was a concern that the foundation might not be adequately supported and could give way. Part of the slope was owned by the plaintiff, Botany Hill, but the greater part running down to the creek is owned by the Town of Oakville. As a result, in order to have the damage repaired, Botany Hill brought a motion against the Town on July 13, 2011 seeking an interim injunction requiring the Town to remediate and shore up the collapsed slope. The relief sought as specified in its July 13, 2011, Notice of Motion was for:

an interim and interlocutory mandatory order requiring the Defendant to immediately take all necessary steps to stabilize the portion of the Defendant’s Property (as hereinafter defined) that comprises the valley lands of the Sixteen Mile Creek below the top of bank that is adjacent to the Plaintiff’s Property (as hereinafter defined) to prevent further slope failure on an interim basis;

[4] Botany Hill brought its motion on an urgent basis returnable on July 14, 2011. The Town says it's solicitors worked late into the night on July 13 to prepare for that urgent return date, but when it came before Pollak, J. the next day in Motion Scheduling Court, she allowed one further days delay, but then on July 15 endorsed the record that the matter was to be traversed to Justice Grace the same day to determine the issue of urgency. Based on the agreement of counsel for the moving party plaintiff, Botany Hill, which was evidently made that day, she ordered that costs would be payable by Botany Hill and on a substantial indemnity basis if it was not successful in establishing urgency before Justice Grace.

[5] When the matter came before Justice Grace that day, however, he adjourned the motion to August 8 or 12, 2011 for three hours, and importantly, notwithstanding Pollak J.’s endorsement, he reserved the July 14 and 15 costs to the judge who would actually hear the motion.

[6] Grace J also wrote a lengthy, thorough and detailed endorsement that day, an endorsement that reviewed in detail the history of the matter leading up to that day and that specifically noted the growing scope of the dispute and acceleration of steps between the parties as the erosion situation deteriorated. In the first two weeks of July, 2011, the matter accelerated at a feverish pace. It started with the Town attending on-site on June 30, 2011 and issuing the first of the orders made requiring the plaintiff “to remedy an unsafe building.” A meeting was requested, however, it was not arranged for reasons that were unclear to Justice Grace. Then, on July 4, Terraprobe Inc. issued its preliminary report to Botany Hill. On July 5, solicitors for Botany Hill again wrote to the Town and the Town retained outside counsel.

[7] A second order was issued against Botany Hill on July 7, 2011, requiring that it provide an engineer’s report outlining the remedial steps necessary to make the building safe and to obtain a building permit for the required work. Astonishingly, as Justice Grace noted, that order granted Botany Hill only the impossibly short period of four days to obtain those materials. That same day, Belanger Engineering was retained, visited the site, and released its interim report only days later, on July 13, referring to the “precarious condition of the site,” “a catastrophic failure,” and the caution that “failure could happen at any time to the slope without any warning whatsoever.”

[8] Thus, it was clear to Grace J. that this matter was taking off between the parties as he wrote at paras. 12-15:

12 This matter was already escalating. The parties began to act or to respond with feverish intensity which continued today.

13 Materials have been short served. Liberties have been taken with procedural rules. Fingers are being pointed.

14 By the time this matter arrived, the requests of Botany Hill were being made on an "interim” basis pending argument on the merits. The requests are contained in items one and two of Aird & Berlis’s July 14, 2011 letter.

15 The position of Botany Hill is essentially this: this matter is urgent. The orders evidence the fact the building is unsafe and that fast action is required. The building or at least a portion of it could fall at any time because the slope is so unstable. The effects could be catastrophic for Botany Hill, its tenants and potentially for members of the general public if they are using the slope or are on Sixteen Mile Creek. Steps have to be taken immediately to ensure that no harm is occasioned.

(references to motion record omitted)

[9] Moreover, it seems plain that Justice Grace had no doubt in his mind that there was some urgency and that the matter of the slope needed to be dealt with on an urgent basis – paragraph 18 of his endorsement is clear in that regard – in the sense that remediation work was required immediately. But that did not necessarily mean that an urgent determination was required relative to Botany Hill’s request for interim injunctive relief, because by that time the Town had issued its orders requiring Botany Hill to bring the slope into compliance. Further, he noted that point regardless of the compensation issue, in observing that “the collapse of any portion of [the building] is not desirable whether compensation could be sought or not.” So beyond observing the need for repairs to be made expeditiously, and being willing to have the court intervene again if the constructive dialogue between the parties did not continue to permit that to happen, he was prepared to permit the issue of a permanent injunction and the other causation and responsibility disputes between Botany Hill and the Town, and the issue of who would ultimately pay for the remediation work, to await resolution on another day.

[10] That is essentially what caused the injunction motion itself to become moot. It became moot because the Town of Oakville had issued the orders requiring the plaintiff, Botany Hill, to remediate the slope, and to do so at its own expense.

[11] The motion was to return in August but was adjourned by Himel J., on consent, to September 6, 2011, and then to November 16, 2011, and then to January 12, 2012, all on consent. New counsel was then retained by Botany Hill who sought to have the motion adjourned to May 8, 2012 to address the costs of what the Town’s counsel now says is an abandoned motion.

[12] It was well after the September 6 motion date had passed that the final experts reports of both the plaintiff and the defendant were received,[^1] but importantly, it was prior to that date and at a time when the plaintiff was still advancing its proceeding to obtain injunctive relief against the Town that the only expert report that was available was the Terraprobe preliminary report commissioned by the plaintiff and prepared by its experts. However, that report did explain the causes of the landslide, at least in the opinion of the plaintiff's expert at that time. That report formed the basis or foundation for the plaintiff's claim of relief against the Town. It was dated July 4, 2011. At that point it was not contested, and thus would likely have supported the plaintiff’s position.

[13] So after the appearance before Grace J., and in the face of the Town’s orders made against it under its municipal authority, Botany Hill retained the services of CSL Group to repair the slope, as it had been ordered by the Town, and it paid for that work to be done. It constructed a retaining wall and took other remedial measures to prevent further erosion, and to prevent the potential for a catastrophic event resulting from such erosion.

[14] Obviously the injunction requiring the slope to be repaired and seeking costs of doing so was no longer urgent because the slope is repaired, and the questions of causation, responsibility and compensation could thus proceed at a more leisurely pace. All of the remediation construction work was completed by May 3, 2012, and Terraprobe has now inspected and is satisfied with the remediation work that has been performed. However, since the entire cost of the repair work has been borne by Botany Hill, it seeks to recover those sums in damages from the Town and it issued its Statement of Claim against the Town making that claim on April 10, 2012.

[15] Further the expert’s reports have now been prepared and served. The Town’s expert’s report suggests that the cause of the landslide was water runoff from the plaintiff's parking lot located at the top of the slope. It is important, however, that while the need for injunctive relief may now be moot insofar as the slope has now been repaired by the plaintiff at the order of the Town, there has been no hearing on the merits. No judicial determination has been made of causation, regardless of what the content of the competing experts’ reports may be.

[16] The Town claims that they have been put to a lot of trouble in responding to a claim that they say is without merit, and in being forced to get materials quickly before the court to respond to the plaintiff's claim and its request for interim injunctive relief. Further, since the plaintiff performed the remedial work at the order of the Town, the party against which it has made its claim I might note, then obviously the need for an injunction requiring the Town to repair the slope has become moot. But this, says the Town, is deemed abandonment and it claims that Botany Hill ought to pay its costs. It relies principally on three decisions, Phasecom Systems Inc. (c.o.b. Mastec Canada) v. Systems 2 Communications Inc.,[^2] and Manos Foods International Inc. v. Coca-Cola Ltd,[^3] and Yang v. Mao[^4] to support its position.

[17] In my view, however, the Town of Oakville is not entitled to succeed on this application for the simple reason that the plaintiff’s motion was not abandoned under rule 37.09(1). Neither, in my view, was there any basis to conclude that it was deemed to be abandoned under rule 37.09(2).

[18] First, I accept that there was a situation of urgency at the time that the plaintiff, Botany Hill, brought its motion against the Town. The Town says that the motion was without merit, and was frivolous and could not succeed, but it is difficult to accept that contention in the face of Justice Grace’s careful and thorough 28 paragraph endorsement addressing the question of urgency as it related to this matter.

[19] Secondly, while the interim injunctive relief originally sought may have become moot when the Town undercut the plaintiff’s motion and ordered the plaintiff to perform the remediation work itself, and at its own cost, the relief that is sought by the plaintiff is both interim and permanent. The merits of the parties’ positions on causation have not yet been heard. In my view there remains a triable issue between the parties relating to causation and future responsibility should the slope behind 151 Randall again collapse or subside.

[20] Thus, while part of the proceeding may have been rendered moot by the orders made by the Town against the plaintiff, the remaining part of the proceeding is not moot and it is not completed. It will move forward with the claims made in the Statement of Claim. Moreover, it is significant as Justice Grace’s endorsement shows that the reason the plaintiff’s motion became moot was not as a result of its conduct but rather as a result of the Town’s order telling the plaintiff to correct the problem, and to do so at its own expense.

[21] Against that background, and when the prospects of the plaintiff’s claim for interim injunctive relief against the Town were effectively neutered by the Town’s action to require Botany Hill to do the remediation work, I see no merit in the Town’s position on this application or foundation to conclude either that the plaintiff has abandoned its motion and claim or that its conduct causes it to be deemed to have abandoned its motion. The plain and simple fact is that the action commenced by the plaintiff has not been discontinued or settled, and there has never been any adjudication by this court as to who bears responsibility for the landslide, nor have any judicial findings been made about what caused it to occur. Moreover, I find nothing in the endorsement of Pollak J., that either binds me to order costs against the plaintiff, or that requires me to order them paid on a substantial indemnity scale. Obviously, Grace J. felt the same way in reserving the costs to the motions judge. In any event, the precondition to Pollak J.’s endorsement is not met, since I find that Justice Grace did find that there was some urgency present last July 15th.

[22] At the end of the day, it is plain that rule 37.09 does not oblige the court to order costs against the moving party here, even if an abandonment had been found to have occurred or had been deemed to arise, both of which I have found not to be the case. I am under no obligation to do so because the language of the rule specifically grants the court discretion “to order otherwise.”

[23] Moreover, I find that the authorities advanced by the Town are not helpful and are distinguishable in the circumstances. Unlike in Phasecom Systems Inc. (c.o.b. Mastec Canada) v. Systems 2 Communications Inc., there was no impropriety in the motion that was brought by the plaintiff and here the matter was simply adjourned, unlike that case where the relief was refused. Thus, in that case, even though neither of the steps referred to in the rules had been taken, the court concluded a deemed abandonment had occurred noting that there is no closed list of deemed abandonment events. Without comment on whether I believe there is merit to that suggestion by T. Ducharme J., it will suffice for present purposes to indicate that I do not find those circumstances to be present here, and I see no similar actions here by the plaintiff.

[24] The defendant relies upon Manos Foods to show that the plaintiff could never have succeeded in obtaining a mandatory interim injunction against the Town, because it could never demonstrate irreparable harm, according to the Town’s counsel. However, it seems to me that question is not so clear cut, and indeed Justice Grace alludes in his endorsement to the prospect of the building owned by Botany Hill collapsing. In my view, it is wishful reverse thinking by the Town to make that claim, especially in the face of its action in issuing repair orders that caused the interim injunction motion to become moot, but the permanent injunction request remains, and is part of what must be adjudicated on at trial, when issues of causation and responsibility are determined.

[25] Similarly, Yang v. Mao cannot govern the result here. It is distinguishable. Unlike in that case where no acceptable explanation for the withdrawal of the injunction motion was proffered by the plaintiffs, nor had they provided any indication that the action would be pursued further, in this case the determination of causation and responsibility remains a live question in an ongoing proceeding where the plaintiff, Botany Hill, continues to seek compensation from the Town. This is not a case where the Town has been put to the expense of replying to the plaintiff’s interim injunction request “only to have the motion abandoned or withdrawn when responding materials are served,” and where an award of solicitor and client costs is necessary to punish against an abuse, but rather a case where the defendant claims that the plaintiff has abandoned its claim, when the reality is that it was its own conduct that caused at least the interim injunction to become moot. It had the right to do so, but it ought not to be able to recover costs against the plaintiff when it used the powers it has as a municipality to undermine at least the plaintiffs interim claim.

[26] In the result, the Town’s motion under rule 37.09 is dismissed. I would note at this point that in correspondence issued prior to this motion being argued, counsel for the plaintiff did offer to consent to these costs being determined by the trial judge, but that offer was refused. Nevertheless, this dismissal is without prejudice to the Town to raise the issue of those costs again at trial, in the context of adjudication on the merits of the parties’ positions, and a determination of causation and responsibility at that time. Further, in the event that the plaintiff's claim does not proceed to trial or for further adjudication on the merits, then the defendant Town will be at liberty at that time to renew its claim to recover these costs from the plaintiff.

[27] As the successful party on this motion, and given that it offered to settle this costs issue on consent, the plaintiff Botany Hill, shall have its costs of $2,500 for its appearance in response to this motion, payable forthwith. Order to go accordingly.

Michael G. Quigley J.

Date: July 11, 2012

[^1]: The report of AMEC Environment and Infrastructure for the Town is dated January 2012. [^2]: [2005] O.J. No. 46 (S.C.J.O.). [^3]: [1997] O.J. No. 1877 (Ont. Ct. (Gen. Div.)). [^4]: 1995 CanLII 7052 (ON SC), [1995] O.J. No. 1323 (Ont. Ct. (Gen. Div.)).