SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-12-454709

DATE: 2013/01/11

RE: 2233782 Ontario Inc. v. Portwell Developments Inc.

BEFORE: Moore J.

COUNSEL:
Thomas W. Arndt, for the Applicants

Thomas J. Dunne, Q.C. and Laura Van Soelen, for the Respondents, Portwell and Parallax

E N D O R S E M E N T

[1] This is a motion for injunctive relief involving neighbours who own or occupy adjacent commercial properties on Wellington Street West in Toronto. The Respondents (“Portwell”) are developing a condominium building next door to the Applicants’ (“Bar Wellington”) property. The condominium is under construction and has been so for the past year.

[2] Ten of the eleven floors of the condominium structure have now been erected. The target date for completion and occupancy is the spring of 2013.

[3] The Bar Wellington is housed in an historic property. There are no current plans for redevelopment of that property but it is conceded that redevelopment will be complicated by the historic property designation. It is asserted in this matter that by designing openings in the west wall of the Portwell condominium and covering those with translucent cladding, Portwell will further complicate and likely eliminate the chances of successfully obtaining development approval for any future redevelopment of the Bar Wellington property in the future.

[4] Bar Wellington therefore seeks an injunction preventing the completion of the Portwell condominium with the complained of translucent cladding and an order directing redesign of the exterior cladding on the west wall to effectively eliminate the transmission of light through that wall.

[5] Bar Wellington insists that the west wall design was the subject of negotiations and agreement between the parties before the Committee of Adjustment for the City of Toronto and, later, the Ontario Municipal Board dealt with the matter and the latter issued its approval for the project and that agreement formed the basis upon which Bar Wellington supported Portwell’s application for that approval. The existence of such an agreement is denied by Portwell.

[6] The parties disagree upon the degree of translucency of the panels to be installed on the west wall, whether for industry parlance purposes they are windows or not and upon the implications of same to future redevelopment of the Bar Wellington property.

[7] Given the length of time that has elapsed from the project approval stage through building of the exterior structure of the condominium to the present, this motion, if successful, will result in additional expense, delay of project completion for Portwell and inconvenience for its condominium unit purchasers. Deciding this motion therefore involves a balancing of the interests of the parties in the circumstances of this unique case.

Positions of the Parties

[8] Bar Wellington submits that it does not wish to stop the condominium project but only to have it completed in a manner consistent with the agreement it insists the parties came to before government approvals were sought and ultimately obtained. More specifically, it relies on a negative covenant in that agreement: that the west wall will not have any windows in it whatsoever and in exchange, Mr. Parrott would agree to support the Portwell development approval process. This, Bar Wellington insists, constitutes a serious issue to be tried and supports its application for injunctive relief.

[9] The property upon which the Bar Wellington building stands is owned by the numbered company, of which Mr. Parrott is a principal. Although he is not a plaintiff in his own right, it was Mr. Parrott who dealt with the principal of Portwell, Mr. Sweeney.

[10] Bar Wellington asserts that Mr. Parrott was consistent throughout his dealings with Mr. Sweeney that he did not wish windows in the west wall of the Portwell condominium for fear that the presence of windows would interfere with his private enjoyment and future use and development of the Bar Wellington property.

[11] Bar Wellington submits that, by its breach of the negative covenant, Portwell has exposed the plaintiffs to irreparable harm that cannot be quantified or compensated for by damages.

[12] It insists that the balance of convenience favours Bar Wellington and that if an injunction is granted, no specific harm will be sustained by Portwell, which went forward with construction in the face of the within litigation and must be taken to have done so at its own risk.

[13] Bar Wellington has provided this court with an undertaking to abide by an order concerning damages that the court may make as a result of granting an injunction.

[14] Portwell also focuses attention on the fact and status of the litigation between the parties relative to the construction approval and building phases of the project. It argues latches on the part of Bar Wellington. The condominium structure is now virtually complete, with only one more floor to be poured. The plaintiffs’ delay is unexplained and extensive and this application should have been brought forward far sooner. Indeed, Portwell points to correspondence between counsel by which Portwell invited Bar Wellington to do just that but to no expeditious end.

[15] Portwell submits that Bar Wellington has not filed expert evidence to establish that future use or privacy issues will arise if the project is completed according to current design and construction specifications, all of which have been shared between the parties before and during the course of construction. There is no evidence that future building rights will be impaired.

[16] Whatever discussions Mr. Parrott had with Mr. Sweeney regarding windows in the west wall and a variance necessitated thereby at the Committee of Adjustment stage, those did not lead to an agreement let alone a negative covenant as asserted by Bar Wellington. The evidence establishes that the need for a variance evaporated when Portwell decided to proceed with a west wall design that did not include vision glass windows but rather included translucent panels.

[17] Portwell shared its drawings and specifications with Bar Wellington and received no complaint from Mr. Parrott. In the result, Portwell insists that the only agreement between the parties was an agreement to proceed forward with translucent panels in the west wall and that agreement binds Mr. Parrott in these proceedings and was also accepted by city counselor, Adam Vaughan and the neighborhood committee.

Analysis

[18] The parties agree that the Supreme Court of Canada has established a three-pronged test applicable to the question of whether to grant and interlocutory injunction. First, the applicant must establish that there is a serious question to be tried; second, the court must consider whether the moving party will suffer irreparable harm if the injunction is not granted; and third, the court must weigh the balance of convenience to determine whether the moving party will suffer greater harm if the injunction is not granted than the responding party will suffer if the injunction is granted.[^1]

[19] Upon the evidence before the court on this application, there are contractual issues for determination but Bar Wellington has not established a serious issue to be tried can only arise from its characterization of the negative covenant asserted. Quite apart from the fact that the covenant itself addresses Mr. Parrott’s support only at the Committee of Adjustment stage, there is a very real issue as to whether that covenant was superseded by the subsequent agreement asserted by Portwell [that translucent panels were acceptable] or that no agreement was reached at all.

[20] By e-mail dated 19 May 2010, Mr. Sweeney wrote to Mr. Parrott confirming that windows would be eliminated from the west wall and replaced with a design incorporating metal spandrel panels and/or fire rated glass block masonry consistent with sketches provided to Mr. Parrott that day

[21] Then, by letter of 26 May 2010, Mr. Parrott wrote to The Committee of Adjustment confirming that he met with Mr. Sweeney and expressed to him opposition to any windows on the party wall. He went on to confirm that Mr. Sweeney indicated that he will be removing windows from the design and therefore also removing the request for a variance.

[22] Mr. Parrott was given a drawing of the revised plan for the west wall dated 15 June 2010 which clearly shows incorporation of glass block panels on the wall. There is no subsequent evidence of a stated position by Mr. Parrott or his counsel that glass blocks or translucent panels were unacceptable going forward.

[23] The evidence on this motion establishes that the parties and their lawyers continued to negotiate issues arising from the condominium project, including in 2011. Portwell prepared and tendered a comprehensive development agreement for Mr. Parrott's consideration. That agreement was never finalized. By letter dated 25 October 2011, Mr. Parrott's lawyer, Grant Kerr, wrote saying:

Richard Parrott has asked the writer to reply to you and to state our clients view regarding the outstanding issues between our two positions.

First, to be absolutely clear, nothing is going to move forward until a definitive comprehensive agreement is concluded.

He then went on to enumerate nine specific issues including the demand for business interruption compensation, in respect of which he asked the question: "just look at his patio space and the number of seats. Who is going to want to sit on the patio when construction is underway? The answer is-no one!

[24] Conspicuous by its absence in Mr. Kerr’s letter was any reference to a pre-existing agreement or negative covenant relating to windows or replacement of same by translucent panels.

[25] I am not persuaded that the applicants have established a serious issue to be tried as characterized by them to involve a negative covenant having been given by the respondents in exchange for Mr. Parrott's support at the Committee of Adjustment stage.

[26] As to the matter of irreparable harm that the applicant might suffer if an injunction is not granted, I see none established on the record before the court on this application. Whether or when Bar Wellington or Mr. Parrott may seek to redevelop the property is entirely unclear. The nature of any redevelopment, the extent to which it will be complicated by the fact that the building on the property has been designated to be of historic significance and/or anticipated complications arising from the current design of the west wall of the Portwell condominium are equally unclear. There is no expert evidence before me suggesting, let alone establishing, that future use or privacy rights on the adjacent land will be adversely affected by the installation and use of translucent panels on the west wall of the Portwell condominium.

[27] In the result, Bar Wellington has not established, for purposes of this application, that it will suffer harm, let alone irreparable harm, if this court does not issue injunctive relief in its favour. On the other hand, the evidence adduced by Portwell confirms that the structure is substantially complete and that by enjoining completion according to current design specifications for the translucent panels in question and requiring that they be redesigned will necessarily produce construction and completion delays, additional building costs and inconvenience to Portwell and unit buyers. The balance of convenience tips dramatically in favour of Portwell in this regard.

[28] In any event, I find myself in full agreement with Portwell in its criticism of the applicants for delay in pursuing the relief sought on this application.

[29] Rather than negotiating toward a development agreement to permit of an expeditious construction of the condominium project in terms acceptable to the parties, Mr. Parrott, through his lawyer, Mr. Kerr, refused to deal with construction issues until nine economic issues were resolved first.

[30] In addition, Bar Wellington threatened to bring this application to court on 23 March 2012 but motion materials were not served until 14 November 2012. I have been provided with no explanation for the delay in service. Delay on the part of the party bringing an injunction motion forward may operate as a bar to an award of injunctive relief.[^2]

[31] Furthermore, Portwell is quite right in submitting that latches is a defense to an equitable claim if, by delaying in bringing a proceeding, the plaintiff has either acquiesced in the defendant's conduct or caused the defendant to alter its position in reasonable reliance on the plaintiff's acceptance of the status quo.[^3]

[32] Bar Wellington's delay was unreasonably long in the circumstances of this case and Portwell acted reasonably in moving into and through the construction phase of the condominium project in the face of Mr. Kerr's adamantly stated position that concessions on economic issues had to be granted before a development agreement could be achieved. This coupled with Bar Wellington's silence on the suitability of translucent panels on the west wall left Portwell in a most difficult position. Bar Wellington's delay is fatal to its success on this application.

[33] In any event, an injunction is, by its nature, an extraordinary, equitable remedy that should be granted only in the clearest of cases;[^4] this is not by any means a clear case for Bar Wellington.

[34] Although written and oral arguments in this case focused upon the injunction that might follow from the installation of translucent panels on the west wall, the notice of motion identified other relief as well, including relief by way of mandatory orders. In large measure, events have overtaken the concerns behind those additional claims. With one floor left to pour, for example, Bar Wellington’s earlier concerns about personal injury and/or property damage from the operation of overhead cranes are now largely academic and were not pursued before me.

[35] As to mandatory orders, they are rarely granted[^5] and none are warranted at this point in this matter.

Disposition

[36] This motion is dismissed with costs to the Defendants/Respondents in an amount to be agreed upon or fixed by me.

[37] Counsel were directed, before the motion was heard, to exchange costs outlines and reasonable costs demands along with their reasonable expectations of the costs their clients should be required to pay in the event that their clients were ordered to be paying parties. Costs outlines were filed at the end of the day. In the event that costs issues remain, counsel may submit brief written submissions to me within 30 days, each submission to be five pages in maximum length and must address the demands and expectations matters discussed as directed.

Moore J.

DATE: 11 January 2013

[^1]: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311, [1994] S.C.J. No. 17 at para. 43

[^2]: Webster v. BCR Construction, [2012] O.J. No. 2169 (SCJ), at para 93.

[^3]: Canpages Inc. v. Quebecor Media Inc., [2008] O.J. No. 2169 (SCJ), at para 16.

[^4]: Van Wagner Communications Co., Canada Penex Metropolis Ltd., [2008] O.J. No. 190 (SCJ), at para. 30.

[^5]: Injunctions and Specific Performance, the Honourable Mr. Justice Robert J. Sharpe (Aurora: Thomson Reuter, 2010) at 1-10.2