SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: CV-13-493479
DATE: 20140714
RE: METRO1 DEVELOPMENT CORPORATION LTD., Applicant
AND:
CITY OF TORONTO, Respondent
BEFORE: Chapnik J.
COUNSEL:
Barnet H. Kussner and Brendan O’Callaghan and
Julia Croome Tim Carre
for the Applicant for the Respondent
HEARD: July 8, 2014
ENDORSEMENT
[1] This is an application for declaratory relief by Metro1 Development Corporation Ltd. (“Metro1”), the development arm of Tuggs Incorporated (“Tuggs”). Tuggs operates a restaurant and bar formerly known as the Boardwalk Restaurant and now operating as Trinity Taverna (“the Restaurant”) on lands owned by the City of Toronto (“the City”) in Woodbine Beach Park at 1675-1681 Lakeshore Boulevard East (“the Lands”).
[2] By an agreement dated June 2, 2010 (“the Agreement”), Tuggs contracted with the City to lease the Restaurant’s building for a 21-year term, during which Tuggs has the exclusive licence to sell food and beverage within the Lands.
[3] This dispute between Tuggs and the City relates to the requirement of the City’s Chief Building Official (“CBO”) that Tuggs pay a parkland levy in order to obtain a building permit to carry out improvements on the Lands.
[4] The applicant says resolving this dispute is a matter of the interpretation of various statutes as they apply to the facts in this case and hence a matter of law. It seeks the following orders:
(a) A declaration that, pursuant to the Agreement, the applicant’s redevelopment on the Lands is exempt from payment of any parkland levy under s. 415-30(A)(9) of the Toronto Municipal Code (“Municipal Code”) and s. 42 of the Planning Act, R.S.O. 1990, c. P.13 (“Planning Act”);
(b) In the alternative, if the court finds that the applicant is obligated to pay parkland levies to the City, a declaration that the applicant has already paid such fees or their equivalent in full; or
(c) In the alternative, an order converting this application to an appeal pursuant to s. 25(1) of the Building Code Act, 1992, S.O. 1992, c. 23 (“BCA”), and exercising the court’s discretion to extend the time for commencement of such an appeal for the purposes of this application.
[5] According to the respondent, the issue of laches in light of the operation of s. 25(1) of the BCA is a threshold issue that must be determined first and that may end the matter.
[6] I agree.
[7] The laches issue turns upon the answers to two questions:
What was the appropriate procedure for the applicant to have taken in order to contest the decision of the CBO?
If the proper procedure was to appeal the decision pursuant to s. 25(1) of the BCA, should the court exercise its discretion to convert this application to an appeal pursuant to s. 25(2) of the BCA?
issue no. 1 – procedure
[8] What was the proper procedure for the applicant to have taken in order to contest the decision of the CBO?
[9] The background to this case is set out in comprehensive detail in the parties’ respective facta and for the reasons that follow, I will not repeat it all here. A review of the key facts leading to the filing of this application will suffice.
[10] As noted, the parties entered into the Agreement on June 2, 2010.
[11] On August 3, 2011, the applicant submitted an application for a building permit to carry out a proposed expansion of the Restaurant’s building, including a two-story addition that would approximately double its size.
[12] Upon receipt of the permit application, the CBO for the City reviewed it for compliance with applicable law, as required by s. 8(2) of the BCA. She advised Tuggs on September 14, 2011, that City of Toronto By-law No. 1020-2010 applied to the proposed development pursuant to s. 42(6) of the Planning Act. (By-law No. 1020-2010 amended Article III of c. 415 of the Municipal Code, which itself is a compilation of by-laws. The contents of Article III of c. 415 will be referred to collectively as the “Park Levy By-law”.) As such, the applicant was required to pay a park levy of $34,535.68 (“the Park Levy”) prior to the issuance of the building permits. The applicant paid the levy under protest pursuant to s. 42(12) of the Planning Act, and the building permits were issued on September 15, 2011.
[13] Construction of the applicant’s addition to the Restaurant commenced in the fall of 2011 and was completed in 2012.
[14] On October 11, 2011, the applicant brought an application before the Ontario Municipal Board (“OMB”) pursuant to s. 42 of the Planning Act to contest, inter alia, the payment of the Park Levy.
[15] Subsections 42(10) and 42(12) of the Planning Act provide:
(10) In the event of a dispute between a municipality and an owner of land on the value of land determined under subsection (6.4), either party may apply to the Municipal Board to have the value determined and the Board shall, in accordance as nearly as may be with the Expropriations Act, determine the value of the land and, if a payment has been made under protest under subsection (12), the Board may order that a refund be made to the owner.
(12) If there is a dispute between a municipality and the owner of land under subsection (10), the owner may pay the amount required by the municipality under protest and shall make an application to the Municipal Board under subsection (10) within 30 days of the payment of the amount.
[16] The problem with the applicant’s application to the OMB was that s. 42(10) specifically limits the jurisdiction of the OMB to a determination of the value of the land. It does not give the OMB jurisdiction to interpret the Park Levy By-law or to overturn the decision of the CBO. When this was brought to the applicant’s attention in the proceedings before the OMB, counsel agreed to adjourn this aspect of the OMB application, and an order was made by the OMB on January 11, 2013, on consent, adjourning the application sine die.
[17] On November 25, 2013, the applicant commenced this application under rule 14.05(3) of the Rules of Civil Procedure for a declaration that it is exempt from the payment of the Park Levy.
[18] The respondent contends that an application before this court is an improper procedure to challenge the CBO’s decision and would circumvent the established statutory scheme available to a person who claims to be aggrieved by an order or decision made by the CBO. The proper procedure for the applicant to have taken, submits the respondent, was an appeal under s. 25(1) of the BCA.
[19] Section 25(1) of the BCA reads as follows:
(1) A person who considers themself aggrieved by an order or decision made by the chief building official, a registered code agency or an inspector under this Act (except a decision under subsection 8(3) not to issue a conditional permit) may appeal the order or decision to the Superior Court of Justice within 20 days after the order or decision is made.
[20] The specific question of whether an application for declaratory relief under rule 14.05(3) of the Rules of Civil Procedure or an appeal under s. 25(1) of the BCA is the appropriate procedure in the applicant’s circumstances was addressed by Corbett J. in Toronto District School Board v. Toronto (City), 2014 ONSC 3605, at paras. 7-8:
The TDSB structures its application as a request for a declaration pursuant to Rule 14.05(3) of the Rules of Civil Procedure….
The City takes the position that the TDSB has not approached the dispute correctly. This is, at its heart, an appeal from the decision of the City’s Chief Building Official (“CBO”) that the Proposal does not fit within the Exemption. I agree with the City. This is not a case where the court is asked to strike down a provision in a by-law for vagueness. Rather, this case concerns, directly, whether the Proposal fits within the Exemption, the precise subject-matter of the CBO’s decision. It is not appropriate for the court to provide a broad advisory opinion on the meaning of the Exemption, except so far as it is necessary to do so to decide the matters in issue between the parties. [Footnotes omitted.]
[21] In that case, the court converted the application, which was initiated in a timely fashion, to a s. 25(1) appeal and, in the end, deferred to the CBO.
[22] In the instant case, the CBO determined that the Park Levy was necessary to establish that the permit application complied with applicable law. Section 8(2) of the BCA states as follows:
(2) The chief building official shall issue a permit referred to in subsection (1) unless,
(a) the proposed building, construction or demolition will contravene this Act, the building code or any other applicable law…. [Emphasis added.]
[23] Section 415-28 of the Park Levy By-law (which as noted, was enacted pursuant to s. 42 of the Planning Act) holds that payments required to be made “shall be made prior to the issuance of the first above ground permit for the land to be developed.”
[24] Clearly, the CBO’s decision that the Park Levy be paid prior to the issuance of the building permit was “an order or decision made by the chief building official” as that phrase is used under s. 25(1) of the BCA. This triggers the appeal provision in s. 25(1).
[25] In my view, the scheme established by s. 25 of the BCA cannot be circumvented by the applicant’s application for declaratory relief under rule 14.05(3). The proper forum to have brought the application would have been as an appeal to this Court from the decision of the CBO.
[26] Thus, the answer to the first question is that the proper procedure for the applicant to challenge the CBO’s decision that the Park Levy By-law applied to the permit application was to appeal the CBO’s decision under s. 25(1) of the BCA. It has not done so.
Issue 2 – EXTENSION OF TIME FOR AN APPEAL
[27] As noted, s. 25(1) of the BCA provides that an appeal under that section may be brought before the Superior Court within 20 days after the CBO’s decision was made.
[28] The CBO’s decision to impose the Park Levy was communicated to the applicant on September 14, 2011. Therefore, the time within which the applicant was entitled to commence an appeal under s. 25(1) of the BCA expired in October 2011. The applicant commenced this application on November 25, 2013, over two years later and 11 months after the OMB granted the adjournment.
[29] Section 25(2) of the BCA provides for an extension of the appeal deadline in the following circumstances:
(2) A judge to whom an appeal is made may, upon such conditions as the judge considers appropriate, extend the time for making the appeal before or after the time set out in subsection (1), if the judge is satisfied that there is reasonable grounds for the appeal and for applying for the extension.
[30] The question arises: should this court exercise its discretion to convert this application to an appeal pursuant to s. 25(1) of the BCA and also exercise its discretion to extend the time for the commencement of such an appeal under s. 25(2) of the BCA?
[31] As noted, Corbett J. in the Toronto District School Board case dismissed the applicant’s request for a declaration in similar circumstances. In that case, the application under rule 14.05 was commenced within a reasonable time, and was heard as an appeal under s. 25(1) of the BCA.
[32] In the facts and circumstances before me, I have determined that this is not a case in which it is appropriate to exercise my discretion in the applicant’s favour, for the following reasons.
[33] According to the applicant, its principal is an experienced developer of lands in Toronto. Moreover, he was, at all material times, represented by experienced counsel. Yet there has been no reasonable explanation for the failure to commence an appeal of the CBO’s decision in accordance with the clear statutory mandate. Further, there is no explanation as to why the applicant did not commence this application until November 25, 2013, eleven months after the granting of the adjournment by the OMB.
[34] Three years have now passed since the time the applicant was served with the CBO’s decision. To permit an appeal at this late date would be inconsistent with the legislature’s clear intent, expressed in s. 25(1), to provide for the expeditious resolution of such appeals.
[35] I accept the respondent’s contention that an extension of time to commence an appeal now would cause prejudice to the City. The Park Levy was paid to the City in September 2011, and I accept the submission of the City that the funds have long since been allocated for use in connection with the purposes established in the Park Levy By-law. Not only would it likely interfere with the allocation of funds set out in the legislative scheme but such an extension would present a serious challenge to the City to obtain the necessary witnesses and prepare for trial.
[36] This prejudice is significant when contrasted with the applicant’s situation. The applicant has received the benefit of the permit for which the Park Levy was incurred, and has long since completed the construction of and profited from a substantial expansion to the size and capacity of the Restaurant.
[37] The City complains that proceeding at this late date would open the floodgates for other aggrieved persons to make payments under protest and proceed with appeals years after construction is completed. While I do not accept the floodgates argument in total, such a situation may well provide a new avenue of appeal in which individuals could pay the levy under protest, ignore the provision in 25(1) of the BCA and then bring an application under the general Rule 14.05 years later.
[38] The City also submits that allowing an appeal in this case would contravene the two-year limitation period established by s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. In light of s. 2(1)(b) of the Limitations Act, 2002, I am not convinced that that statute applies to the present dispute. However, it is worth noting that if it did, the applicant’s appeal would be well out of time. The commencement of an appeal now, nearly three years after payment of the funds, would allow the applicant to circumvent the provisions of the Limitations Act, 2002 and deprive the City of the defence afforded under that Act. There is something to be said for the element of finality.
[39] Finally, our courts have held that a decision on questions of mixed fact and law by the CBO is entitled to considerable deference due to the nature of the matters and the expertise of the decision-maker: see e.g. Gallos v. Toronto (City) (2008), 51 M.P.L.R. (4th) 178 (Ont. S.C.), aff’d 2009 ONCA 843, 63 M.P.L.R. (4th) 172, at para. 10; Runnymede Development Corp. v. 1201262 Ontario Inc. (2000), 2000 22337 (ON SC), 47 O.R. (3d) 374 (S.C.), at para. 29; Berjawi v. Ottawa (City), 2011 ONSC 236, at para. 9. I note that the court in Berjawi stated, at para. 12, that “[m]ost of the determinations made by CBO’s in the context of by-law interpretation are mixed questions of fact and law.” That is clearly the case here. The CBO was obligated and did apply the Park Levy By-law provisions to the particular facts and circumstances before him. Though such deference does not mean that the applicant’s appeal would be futile, it does mean that there is a lower likelihood of success than if the standard of review was correctness.
conclusion
[40] As a result of my decision on these issues, this court need not deal with the other matters raised by the parties. I do, however, note in passing that the stipulations in the Agreement clearly state that the responsibility to apply for and obtain all applicable permits and licenses relating to the use of the premises lay with the applicant (see Articles 3.1 and 3.2 of the Agreement). Article 3 of the Agreement imposes on Tuggs an obligation to comply with all applicable laws pertaining to restaurants or bars in the City of Toronto.
[41] In my view, the applicant’s assertion that the City would be the party responsible to make the necessary payments contravenes and is inconsistent with the terms of the Agreement. Indeed, pursuant to Article 3.5(b), upon written approval of its plans and designs, Tuggs was required to proceed to develop permit drawings and apply for all necessary permits “at its sole cost and expense” (emphasis added). This would indicate that there are no “reasonable grounds for the [applicant’s] appeal,” as required in s. 25(2) of the BCA.
[42] In the result, this application is dismissed.
[43] The applicant submitted a Costs Outline claiming costs on a partial indemnity basis in the sum of $34,088.81; and the respondent’s request was for partial indemnity costs of $25,033.69 on that basis.
[44] Upon considering the criteria established in rule 57.01, the plethora of materials filed and the submissions of counsel, in my view, the sum of $25,000 is fair, reasonable and within the reasonable expectations of the parties.
[45] Order to go for costs in the respondent’s favour in the all-inclusive sum of $25,000 to be paid by the applicant forthwith.
CHAPNIK J.
Date: July 14, 2014