CITATION: 118143 Ontario Inc. v. City of Mississauga, 2015 ONSC 3691

COURT FILE NO.: 02-BN-4967

DATE: 2015 06 25

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

118143 ONTARIO INC. CARRYING ON BUSINESS AS CANAMEX PROMOTIONS AND NEIL RITCHIE CARRYING ON BUSINESS AS AFFORDABLE PORTABLES

E. Marshall Green and Christopher Salazar, for the Plaintiffs

Plaintiffs

• and -

THE CORPORATION OF THE CITY OF MISSISSAUGA

Ted Frankel and Colin Pendrith, for the Defendant

Defendant

HEARD: January 20,21,22,23,24,27,28,29,30,31, 2014; February 3 and 4, 2014; March 10, 2014; April 14, 2014; and May 12, 2014

AMENDED

REASONS FOR JUDGMENT

EMERY J

[1] The plaintiffs bring this action against the City of Mississauga for the wrongful enforcement of a bylaw they say never applied to them. They seek damages in the amount of $7.5 million for the confiscation of property and economic loss they claim the City caused them by its negligence when it enforced the bylaw.

[2] The plaintiff 118143 Ontario Inc., which carries on business as Canamex Promotions (“Canamex”), is a company owned and operated by Robert Irwin. Mr. Irwin started the Canamex business of manufacturing portable signs for sale to companies in Canada and the United States in 1994. Although Canamex was primarily in the business of manufacturing signs, it would rent larger signs to customers from time to time.

[3] The plaintiff Neil Ritchie joined Mr. Irwin at Canamex to manage the rental of signs directly to customers. In 1999, Mr. Ritchie purchased a portion of the fleet of signs from Canamex that it would rent directly to customers, and started his own business of leasing portable sign to customers within the City of Mississauga as Affordable Portables (“Affordable”).

[4] The regulation of the persons or companies leasing portable signs and the placement of those signs within the municipal boundaries of Mississauga was governed by various bylaws when the plaintiffs launched their respective businesses. Through a myriad of enacted bylaws, changes in provincial legislation and representations allegedly made by city employees, the plaintiffs’ claim that 163 signs they employed between them on May 1, 2002 were lawfully erected at customer locations. It is therefore the plaintiffs’ position that those signs were “grandfathered” and not subject to enforcement under bylaw number 0054-2002 (the “2002 bylaw”) that came into effect that day.

[5] The plaintiffs’ claim based on the “grandfathered” status of the 163 signs on May 1, 2002 is not only a building block to establish liability, but a major element in the quantification of the damages claimed. According to the prevailing legislation that permitted “grandfathering” of signs as well as section 33 of the 2002 bylaw itself, those signs that were lawfully erected on that date would remain exempt from the requirements of the 2002 bylaw provided there is no substantial alteration made to them.

[6] The plaintiffs allege that the campaign by the City of Mississauga to publicize the enforcement of the 2002 bylaw before and after it came into force curtailed their sales efforts and the willingness of customers to lease signs from each of them on 30-60-90 day programs. The plaintiffs further allege that the “blitz” programs conducted in May and July 2002 when 20 signs were removed by City forces demonstrated the City’s intention to enforce the 2002 bylaw against the plaintiffs. This demonstrated intention caused the plaintiffs to remove the balance of the 163 signs from their locations in August, 2002. The plaintiffs claim that the City caused the plaintiffs economic loss in the form of the enhanced profits they would have otherwise earned, and the competitive advantage they would have enjoyed, because those signs were not governed by the 2002 bylaw.

[7] It will be a central determination of this action whether the City of Mississauga as a public authority owed a private law duty of care to one or both plaintiffs given the context of the claims made.

FACTUAL BACKGROUND

The Plaintiffs

[8] Robert Irwin started Canamex in 1994. Mr. Irwin originally came from Saskatchewan and had encountered mobile signs with a black background and changeable letters in Western Canada. Upon arriving in Ontario, Mr. Irwin went to work for a sign manufacturer in Etobicoke. Through that employment he developed a network of contacts in the sign industry. Canamex would later manufacture signs to sell in Canada and the United States to purchasers within Mr. Irwin’s network of contacts.

[9] Neil Ritchie is also from Saskatchewan. Mr. Irwin called up Mr. Ritchie to ask if he would come to work for him in Ontario. Mr. Ritchie was working as a mechanic at the time. Mr. Irwin had by this time acquired the rights to an awning cleaning business, which was seasonal in nature. Mr. Ritchie came to work for Mr. Irwin to clean awnings for half the year, after which he would return to his work as a mechanic for the balance of the year.

[10] Mr. Irwin testified that when he and Mr. Ritchie learned in 1996 that the City of Mississauga was not enforcing the 1994 bylaw that regulated small portable signs, he decided on behalf of Canamex to get into the sign business. He described how the signs were easy to construct. Canamex would purchase the required materials to construct the signs. The frames were generally of a nut and bolt assembly. The welding for the frames was done off premises, and Canamex would have the frames powder coated for resistance to the elements. Mr. Irwin also stated that the mobile signs were easy to maintain, and that Canamex was not required to bring a sign into the shop for maintenance.

[11] The rental opportunities seemed limitless. Portable (used interchangeably with “mobile”) signs were attractive to business customers who desired flexible and timely advertising. Restaurants would advertise specials, retail establishments would advertise discounts, and start-up shops could advertise they were open for business.

[12] A sign would not only advertise the customer’s message, but also became a source of advertising for the Canamex business because the Canamex name was generally displayed at the bottom of the sign face or on the frame of the sign itself.

[13] Canamex entered the sign leasing business because the City of Mississauga did not require a permit for the leasing of smaller portable signs to customers. Canamex constructed and offered signs of less than 16 ft.² to customers. Signs of that size were well received by the market, especially since they did not require a permit.

[14] The parties submitted an Agreed Statement of Facts which was marked as Exhibit 16 at trial. It is important to state that it was an agreed fact that there are mobile signs of two sizes in this action that are material. The first is a 3’ x 5’ (15 ft.²), and the second size most material to this action is 4’ x 8’ (32 ft.²). The signs have two sign faces that are black, with movable white or colored letters. The signs do not contain images and are limited to text only.

Legislative Framework

[15] In order to understand the legislative framework in place on material dates central to the plaintiffs claim, I propose to first set out the sections of the Municipal Act in force at the time, and the existing bylaws of the day.

[16] The Municipal Act is the primary source of powers given to a municipality to enact bylaws within the jurisdiction prescribed by statute. The Municipal Act, RSO 1980, c.302 provided the City of Mississauga with the jurisdiction to pass bylaws.

[17] The Municipal Act gave the City the power to pass bylaws for prohibiting and regulating signs and other advertising devices under section 210, paragraph 141. By section 210, paragraph 143, the City was given the power to pass bylaws to require the production of plans of all signs to be erected, displayed, altered or repaired and to provide for the charging of fees and the issuing of a permit certifying approval of that sign.

[18] In 1981, the City of Mississauga passed bylaw 49-81 (the “1981 sign bylaw”) which applied to all signs in the City of Mississauga. The 1981 sign bylaw provided that:

no person shall erect, display, alter or repair any sign, sign structure or advertising device upon any land, either publicly or privately owned, within the city unless he has a permit issued under this bylaw.

[19] The 1981 sign bylaw required every applicant to submit an application and other required documentation to the building department and to pay an application fee for a permit of the lesser of $50 or 60 cents a square foot of sign area. If the application met all of the requirements of the 1981 sign bylaw, a permit was issued by the chief building official.

[20] Under the 1981 sign bylaw, a sign was defined as:

any medium including its structure and other component parts which is used or capable of being used to attract attention to a specific matter other than itself, for identification, information or advertising purposes.

[21] In 1983, the City passed bylaw 876-83, being a bylaw to prohibit and regulate the posting of portable signs (the “1983 portable sign bylaw”). A “portable or relocatable sign” was defined as:

any sign which is specifically designed or intended to be readily moved from one location to another, and which does not rely on a building or fixed foundation for its structural support, and shall include all signs commonly known as “A-board” or “mobile signs”.

[22] In 1984, the City passed bylaw 995-84, being a bylaw to license, regulate and govern persons carrying on the business of leasing mobile signs (the “1984 mobile sign licencing bylaw”). Pursuant to the 1984 mobile sign licencing bylaw, all persons carrying on the business of leasing mobile signs in the city were required to apply for a business license from the office of the City Commissioner of Public Works “or his designate.”

[23] The 1984 mobile sign licencing bylaw contained an exposure restriction that allowed for a maximum exposure 14 days for one mobile sign on a particular lot, followed by a minimum waiting period of six weeks before another mobile sign permit could be issued for that lot.

[24] In 1988, the City passed bylaw 38-88 (the “1988 sign bylaw”), which repealed and replaced the 1981 sign bylaw. The 1988 sign bylaw was a consolidation of the 1981 bylaw and the 1984 mobile sign licencing bylaw. The definition of “sign” in the 1988 sign bylaw did not change from the definition of “sign” set out in the 1981 sign bylaw. The 1988 sign bylaw continued to govern all signs and other advertising devices including mobile signs. The 1988 sign bylaw prohibited all signs and advertising devices unless a permit was obtained under the 1988 sign bylaw. The 1988 sign bylaw did not specifically define “mobile signs”.

[25] The 1988 sign bylaw, like the 1981 sign bylaw, required that an application with all required documentation be made for a sign permit to the planning and building department. Any sign permit would be issued by the Commissioner of Planning and Building. The sign permit application under the 1988 sign bylaw required a completed application form and, among other things, plans and drawings in scale and showing a site plan of the lot boundaries, location of existing buildings and the access points to the lot from major streets.

[26] By 1994, the Municipal Act had changed. The Municipal Act, RSO 1990, c.45 in Section 210, paragraph 146 authorized the Council of the City of Mississauga to pass a bylaw for the prohibiting or regulation of signs or other advertising devices or any class of both signs or devices. Section 210, paragraph 147 authorized a Council to pass a bylaw for licencing, regulating and governing persons who carried on the business of leasing mobile signs. Under the authority of section 210, paragraphs 146 and 147, the City of Mississauga passed bylaw number 301-94 on July 13, 1994.

[27] The City passed Bylaw 301-94 (the “1994 mobile sign bylaw”), which licensed, regulated and governed all persons who carry on the business of leasing mobile signs and regulated mobile signs. Under the 1994 mobile sign bylaw, a portable sign required a portable sign permit unless expressly excluded.

[28] Under the 1994 mobile sign bylaw, all classes of mobile signs required a permit and those leasing mobile signs were required to be licensed by the City.

[29] All mobile sign permit applications under the 1994 mobile sign bylaw were required to be submitted to and permits were issued by the licencing section of the City’s Corporate Services Department. Applications for a permit under the 1994 mobile sign bylaw were not made to the building section of the Planning and Building Department which oversaw the 1988 sign bylaw.

[30] Under the 1994 mobile sign bylaw, the documentation required by the 1988 sign bylaw to apply for a mobile sign permit was no longer required. The 1994 mobile sign bylaw required a mobile sign permit application, including a completed application form, fee and a sketch showing the location of the proposed sign in relation to the boundaries of the lot and any adjacent streets.

[31] Under bylaw 301-94, mobile signs were classified according to size:

class A - not exceeding 50 ft.²

class B - not exceeding 16 ft.²

class C - a “sandwich board”, not exceeding 6 ft.²

[32] All three classes of signs classified under bylaw 301-94 required a permit.

[33] The 1994 mobile sign bylaw required permit fees of $60, $40 and $30 for Class A, B and C mobile signs respectively.

[34] The 1994 mobile sign bylaw contained a 21 day exposure restriction to mobile signs. Under the bylaw, no mobile sign permit could be obtained at a municipal address until 21 days had transpired after the expiration of the previous mobile sign permit for the same address.

[35] Bylaw number 301-94 set out a number of purposes for its enactment. One of those purposes described it as desirable to enact the bylaw to license, regulate and govern persons who carried on the business of leasing mobile signs. Another purpose described it as desirable to enact a bylaw which imposed restrictions on the number of sign permits to be issued to an individual for signs in order to limit the amount of time a sign would be placed in one location for the purpose of maintaining and preserving the integrity of the urban landscape.

[36] Also under the 1994 mobile sign bylaw, a commercial or industrial complex could be granted up to a maximum of two portable sign permits so long as the frontage of the complex was 200 feet in length.

[37] The mobile sign permit application forms provided by the licencing section of the Corporate Services Department of the City under the 1994 mobile sign bylaw contained only references to the 1994 mobile sign bylaw. No reference to the 1988 sign bylaw was made on the application forms for a mobile sign permit from the City between 1999 and 2001.

[38] It is an agreed fact that both plaintiffs were properly licensed by the City of Mississauga to lease mobile signs under the applicable bylaw up to and including 2002.

[39] Certain amendments to the prevailing Municipal Act were made when the Ontario legislature enacted the Savings and Restructuring Act in 1996. Section 24(3), known as the “sunset” provision, read as follows:

24(3) A by-law of a local municipality … licencing a business under any Act passed before this section comes into force expires the earlier of five years after the day this section comes into force and the day it is repealed by the local municipality….

[40] Section 24(3) came into force on January 30, 1996.

[41] The City of Mississauga did not repeal bylaw number 301-94 until the enactment of new bylaw 54-02 (the “2002 bylaw”), which took effect on May 1, 2002. In addition to repealing bylaw number 301-94, the 2002 bylaw repealed the 1988 sign bylaw.

[42] The 2002 bylaw contains section 33 which states that:

33. EXISTING SIGNS

This by-law does not apply to any permanent sign or permanent advertising device that is lawfully erected or displayed on the day this by-law comes into force, if the sign or advertising device is not substantially altered. The maintenance of the sign or advertising device or a change in the message displayed shall not be deemed in itself to constitute an alteration. (emphasis added)

[43] The amendments to the Municipal Act made by the Savings and Restructuring Act were directed to streamlining municipal powers to license and regulate certain activities within the physical borders and legal jurisdiction of municipalities. These amendments were directed toward structuring a general licencing power for use by municipalities such as the City of Mississauga under what became the Municipal Act, S.O. 2001, c.25 (the “Municipal Act, 2001”).

[44] Section 24(3) of the Savings and Restructuring Act amended section 210.146 (i) of the Municipal Act, RSO 1990, chapter M. 45. This paragraph read, upon enactment, as follows:

210.146(i) no bylaw passed under this paragraph that prohibits or regulates signs or other advertising devices, applies to a sign or advertising device that is lawfully erected or displayed on the day the bylaw comes into force, if the sign or advertising device is not substantially altered, and the maintenance and repair of the sign or advertising device or a change in the message displayed shall be deemed not in itself to constitute an alteration.

[45] This was the provision of the Municipal Act that limited the City of Mississauga to enact bylaws to regulate signs on May 1, 2002. The section was continued in section 99 the Municipal Act 2001 which now reads as follows:

99(1) a bylaw of a municipality respecting advertising devices, including signs, does not apply to an advertising device that was lawfully erected or displayed on the day the bylaw comes into force if the advertising device is not substantially altered, and the maintenance and repair of the advertising device or a change in the message or contents displayed is deemed not in itself to constitute a substantial alteration.

The Dispute

[46] In 1999, Mr. Irwin sold a portion of his fleet of signs owned by Canamex to Mr. Ritchie. From that time on, Mr. Ritchie operated a mobile sign leasing business under the business name Affordable Portables (“Affordable”).

[47] Mr. Irwin would occasionally rent larger signs to preferred Canamex customers. He would obtain the required permits under the 1994 mobile sign bylaw on those occasions.

[48] Mobile sign providers and businesses leasing those signs would obtain permits for mobile signs pursuant to the 1994 mobile sign bylaw, as required, between January 30, 1996 and May 1, 2002 through the Corporate Services Department at the City of Mississauga.

[49] The Corporate Services Department administered the 1994 mobile sign bylaw through its enforcement division.

[50] In a letter dated April 19, 1999, Mr. Shayne Turner, Manager of Bylaw Enforcement for the Corporate Services Department of the City, wrote to Canamex as a company licensed by the City of Mississauga to supply mobile signs to customers. Mr. Turner advised Canamex that the sign unit of the City’s bylaw enforcement department had been requested to take a more proactive approach with respect to enforcing the provisions of the 1994 mobile sign bylaw with respect to encroachment of signs onto public property for safety and liability reasons. Mr. Turner therefore requested cooperation from Canamex to ensure that it placed all mobile signs on the private property to which the sign applied. The letter gave notice to Canamex that the City would exercise its authority under the 1994 mobile sign bylaw to remove an offending sign with or without notice to the owner or renter of the sign if found to encroach on public property. Mr. Irwin testified that he does not recall getting this letter from the City.

[51] When making an inquiry about obtaining a permit on January 28, 2000, Mr. Irwin spoke over the telephone with Ms. Sandra (“Sunny”) Karpowech. Ms. Karpowech was an enforcement officer in the bylaw enforcement department. Ms. Karpowech informed Mr. Irwin during that call that the City was now exempting signs up to 32 ft.² from the provisions of the 1994 mobile sign bylaw that required a permit.

[52] On January 31, 2000, Mr. Irwin wrote a letter on behalf of Canamex to the Corporate Services Department to confirm that portable signs of less than 32 ft.² were exempt from the permit requirements of the 1994 mobile sign bylaw, and to thank the City for that exemption.

[53] Mr. Irwin gave evidence that he relied upon the statement and immediately purchased materials to construct a number of signs of not more than 32 ft.² that would fit this exemption.

[54] Ms. Karpowech issued an email at 3:43 p.m. on January 28, 2002 to Luci Dilkus, a sign inspector with the enforcement office to confirm that Canamex had paid for sign permits that did not require a permit payment because of the nature and size of the sign it was leasing to a customer, and to provide credit to Canamex for two signs for which permits had been obtained in her bylaw enforcement area.

[55] Mr. Irwin next spoke with Ms. Karpowech over the telephone on February 3, 2000 to advise her that he was producing signs that were less than 32 ft.² to lease. On that call, Ms. Karpowech informed him that her superior, Mr. Shayne Turner, had reconsidered this decision.

[56] Mobile signs that were more than 16 ft.² but less than 32 ft.² would be considered class A signs.

[57] Approximately three weeks later, Mr. Irwin was informed by Mr. Shayne Turner that a class A sign of 32 ft.² or less would not be exempt from the provisions of 1994 mobile sign bylaw after all, and would require a permit and be subject to restrictions of time and use. Mr. Turner wrote a letter dated March 2, 2002 to confirm this position to Canamex, which he concluded by stating:

Please understand that we must rely on the bylaw to regulate the subject class A signs and it is not our desire or intention to lift those provisions which would clearly result in a proliferation of unregulated temporary signage.

As a result of the foregoing, please be advised that we are requiring that your company or your clients obtain portable sign permits for all class A portable signs as described in the provisions of the bylaw. Failure to obtain the required permits may result in action taken by city forces pursuant to the provisions of the bylaws.

Should you wish to discuss this matter please contact me directly at (905) 896-5652.

[58] Mr. Irwin responded quickly by scheduling a meeting with municipal councillor L. Cliff Giles on March 6, 2000. This meeting was also attended by Elaine Buckstein, Director of Enforcement, and Shayne Turner, Manager of Bylaw Enforcement for the City of Mississauga. On March 7, 2000, councillor Giles wrote to Mr. Irwin at Canamex to confirm that it was acknowledged by the City at the meeting that the interpretation given by staff on January 28, 2000 to him was misguided, and that there was no intent on the part of staff to mislead him or his company. Councillor Giles took the opportunity to reiterate that it was the City’s position that the subject signs required temporary permits as class A portable signs pursuant to portable sign bylaw 301-94, as amended.

[59] Councillor Giles acknowledged in the letter that Mr. Irwin had requested a “twelve-month window” to use the subject signs without requiring permits under the bylaw, so that he might recover the expenditures he had referred to at the meeting. Councillor Giles confirmed that it was indicated by himself and staff at the meeting that this proposal was not a viable option and would be in direct contravention of the bylaw.

[60] Councillor Giles also confirmed in the letter dated March 7, 2000 that Ms. Buckstein had indicated at the meeting that she would review this matter with staff and would respond to Mr. Irwin directly. She also invited Mr. Irwin’s written comments with respect to Mr. Turner’s letter dated March 2, 2000 and the issues discussed at the meeting.

[61] Councillor Giles confirmed in the letter dated March 7, 2000 that Mr. Irwin had indicated to Ms. Buckstein at the meeting the previous day that he would provide the addresses and business names for those locations where the subject signs were currently displayed, including the dates when the signs were erected, and the rental for each sign.

[62] Mr. Giles also took the opportunity to acknowledge that Mr. Irwin had agreed not to rent any more of the subject signs to businesses under the pretext that permits were not required. Mr. Giles indicated it was significant that this had been a request made by Mr. Turner on February 15, 2000 and that Mr. Irwin had indicated at the time that he would not abide by it.

[63] Mr. Giles also remarked in the letter dated March 7, 2000 that counsel and staff at the City were concerned that the provisions of the 1994 mobile sign bylaw as well as the bylaw relating to permanent signs may not adequately address the current trends and issues that concerned the City about advertising signage. He confirmed that a full-scale review of the City’s sign bylaws was underway and that staff was committed to ensuring that Mr. Irwin’s company was given the opportunity to comment on recommendations when they became available for public consultation.

[64] Mr. Irwin wrote a letter to Mayor Hazel McCallion dated March 7, 2000 to recount the reversal of the City’s position on permits from the representation made by Ms. Karpowech on January 28, 2000. In referring to the meeting with Mr. Giles, Mr. Irwin confirmed telling Mr. Giles that he’d invested approximately $10,000 and had requested a window of time to operate his business without requiring permits for his signs to recover that investment.

[65] Mr. Irwin attended meetings with Ms. Buckstein on March 13 and March 23, 2000. After the meeting on March 13, Mr. Irwin wrote to Ms. Buckstein on March 14, 2002 to again revisit his telephone conversation with Ms. Karpowech about the “deregulation” of class A signs from the 1994 mobile sign bylaw, and how the current treatment of class B and class C signs could not be supported by the bylaw. Ms. Buckstein responded in a letter dated March 21, 2000 to confirm that the information Ms. Karpowech had given to him with respect to the exemption of class A signs from the 1994 mobile sign bylaw was incorrect. She explained that Ms. Karpowech was referring to the sign bylaw review project underway at the City when she spoke about the matter going before council. Ms. Buckstein also explained that council had made the decision of not requiring permits for class B and C signs in 1997. Ms. Buckstein provided him with the letter from the City to sign companies dated March 25, 1997 setting out the City’s position with regard to bylaw 301-94, described as the portable sign bylaw in his letter, and how the City intends to enforce the provisions of this bylaw.

[66] At the second meeting with Ms. Buckstein and Mr. Turner on March 23, 2000, Mr. Irwin continued to discuss the concept of exempting 32 ft.² signs from the provisions of the 1994 mobile sign bylaw. This meeting continued at the Canamex office on March 28, 2000 relating to the issue of portable signs leased by Canamex.

[67] After that third meeting on March 28, 2000, Mr. Turner wrote a letter to Mr. Irwin dated April 6, 2000. It was in this letter that Mr. Turner confirmed the following decisions culminating from those meetings:

1. You have agreed not to rent any more mobile signs larger than sixteen (16) square feet without first obtaining temporary sign permits from this office, in accordance with By-law 301-94, as amended

2. With regard to the signs leased by your company between January 31 and March 3, 2000, as indicated on the attached list provided by your company, it has been determined that the subject signs can remain displayed at each location until the date indicated in the END column on the attached list, at which time you have agreed to remove them. Further, you have agreed to obtain temporary sign permits for each sign for the last twenty-one (21) days of each time period listed. Therefore, each sign permit will expire on the expiry date indicated on the list and the sign must be removed. New temporary sign permits may be obtained for the subject locations, however the display period will not begin until at least twenty-one (21) days after the sign has been removed, in accordance with the By-law.

3. With regard to the use of A-frame signs, as depicted in the attached photograph, the City’s current practice is not to require temporary sign permits for this type of sign. It is important to understand that this practice is subject to change. Any such change in practice would be communicated in writing to all affected parties in advance of coming into effect.

[68] Mr. Turner’s letter attached the list from Canamex and a photograph of an A-frame sign described in the letter. He concluded the letter by stating that although permits were not currently required for A-frame signs, it was important for Mr. Irwin to understand that this practice was subject to change, and that all other regulations and bylaw relating to private property, safety, etc. would apply to the placement of those signs.

[69] Mr. Turner subsequently sent a letter dated June 8, 2000 to Canamex indicating that staff had reported to him that signs continued to be displayed without portable sign permits or the removal of signs, contrary to the agreement confirmed in his letter dated April 6, 2000. Mr. Turner advised Mr. Irwin and Canamex in this letter that the City would require all class A mobile signs erected by Canamex that did not have a portable sign permit be removed by 12:00 p.m. on Friday, June 9, 2000, or staff would begin to remove those signs. Any such signs removed by the City would be impounded and subject to the relevant retrieval fees as prescribed by portable sign bylaw 301-94, as amended.

[70] Mr. Irwin noted in his evidence that this letter did not mention the conversion of class A signs to A-frame signs.

[71] Mr. Irwin held a lengthy telephone conversation with Mr. Turner, Ms. Buckstein and Janice Baker on June 8, 2000 after he received Mr. Turner’s letter dated June 8 by fax. Mr. Irwin explained to Mr. Turner and his colleagues how landlords had become concerned with A-frame signs because of damage to grass underneath the base of the sign. It was determined at that time that Mr. Irwin could install legs on A-frame signs to elevate them from the ground and still have them qualify as A-frame signs that did not require sign permits. The deadline set by Mr. Turner’s letter dated June 8, 2000 that Canamex remove mobile signs that had not been issued permits was extended to 4:00 p.m. on Monday, June 12, 2000 during this call.

[72] Mr. Irwin testified that at no time did bylaw 38-88 come up for discussion with him.

[73] Mr. Irwin proceeded with measures to install legs on his A-frame signs and to convert each of his class A signs to an A-frame sign with legs. He testified that he never had trouble with enforcement proceedings by the City about these signs he leased to customers around Mississauga during this time.

[74] In August 2000, the City of Mississauga commenced its bylaw review. The City determined it would bring in a new bylaw regime, although it was unknown at the time when that new bylaw would be enacted. Mr. Irwin acknowledges that the City had contracted with a consultant, Martin Rendl Associates, to review the prevailing bylaws and their current role, and that he was invited to a meeting to provide input.

[75] Mr. Irwin also had the opportunity to meet with Mayor McCallion on August 7, 2001 to discuss his concerns with respect to the mobile sign bylaw situation in the City of Mississauga.

[76] Council for the City of Mississauga passed the 2002 sign bylaw on January 31, 2002, to take effect on May 1, 2002. It was an agreed fact at trial that during the months leading up to May 1, 2002, the City conducted an active advertising campaign warning sign companies, persons who rented signs, and landlords of those properties where mobile signs were placed that they could be liable to fines if the new sign regulations were not followed. At no time did the City include in this advertising campaign a specific reference to the possibility that certain signs were legal nonconforming or grandfathered signs, or that there were any relevant provisions of the Municipal Act that might confer that status on signs in certain circumstances.

[77] On January 31, 2002, the City of Mississauga issued a news release stating that City Council had approved a new sign bylaw to consolidate three previous bylaws, being sign bylaw 38-88, portable sign bylaw 301-94 and the election sign bylaw 557-78. This news release was followed by articles published in the Mississauga News on February 10, 2002 and February 24, 2002 containing quotes from various councillors about the new bylaw.

[78] The City published a brochure titled “Signs in the City” notifying business owners that the new sign bylaw 0054-2002 54-02 had been enacted, and outlining the requirements for all sign types, permit applications and penalties for contraventions. This brochure also indicated that the new sign bylaw would be fully enforced when it took effect on May 1, 2002. The brochure was unequivocal that it would govern all signs including, but not be limited to, permanent, banner, sidewalk, window, directional, new development, construction, inflatable signs, and plywood boards, as well as portable (mobile) signs, but I note the brochure did state “with some exceptions”. The brochure went on to explain that it would be the responsibility of business and property owners to ensure compliance with sign regulations. Provided that all signs comply with the sign bylaw, property owners would be able to decide the types and number of signs they would allow on their property.

[79] The brochure also set out enforcement and penalties available to any contravention of the new bylaw, by stating:

The City may immediately remove any signs that are erected or displayed in contravention of the sign bylaw or if they cause a safety hazard. A person who contravenes any portion of the sign bylaw is guilty of an offense and may be liable to a fine of not more than $5000, exclusive of costs.

[80] Some weeks prior to May 1, 2002, Canamex and Affordable sought legal advice with respect to the impact of the 2002 bylaw on their businesses. Canamex and Affordable retained Mr. E. Marshall Green of the firm Graham, Wilson and Green (as it then was) to consider this matter and to represent their interests with the City.

[81] In early April 2002, Mr. Green advised the City that Canamex and Affordable took the position that the 2002 bylaw would not apply to their signs because those signs were grandfathered.

[82] On and about April 9, 2002, Mr. Green exchanged letters with the City regarding the inconsistent enforcement of the 1994 mobile sign bylaw and the potential that the mobile signs leased out by Canamex and Affordable were not subject to the 1994 mobile sign bylaw, or to the incoming 2002 sign bylaw.

[83] None of the signs owned or leased by Canamex or Affordable were removed by the City between April 9, 2002 and May 7, 2002.

[84] At no time during the discussions through letters or telephone calls between April 9 and May 7, 2002 did counsel for Canamex and Affordable suggest, nor did the City agree or acknowledge that the 1994 mobile sign bylaw had expired as of January 30, 2001.

[85] On April 25, 2002, Mr. Green wrote a letter dated April 25, 2002 on behalf of Canamex and Affordable to Ms. Wendy Kwok of the legal department for the City of Mississauga. It is in this letter that Mr. Green on behalf of each Canamex and Affordable takes the position that the signs each of them had in place prior to January 31, 2002 were “grandfathered”. Mr. Green asked the City to consider allowing the signs that Canamex and Affordable would confirm were currently in place to remain as long as they were desired by the customers and as long as Mr. Green was proceeding in good faith with a court challenge to determine the validity of that position. If the court challenge was lost, Mr. Green proposed that Canamex and Affordable would arrange to reimburse the City with any permit fees that would have otherwise applied.

[86] Mr. Beaman, legal counsel in the office of the City Solicitor responded on behalf of the City. Mr. Beaman wrote to Mr. Green on April 26, 2002 to advise him that he had not given any indication that Canamex and Affordable would be provided notice prior to the removal of a particular sign. He confirmed an earlier telephone conversation with Mr. Green that his instructions were to defend the sign bylaw as it was written. He advised Mr. Green that until his client, the City of Mississauga advised him otherwise, city staff would proceed with enforcing bylaw number 54-02 as of May 1, 2002.

[87] On April 26, 2002, Mr. Beaman wrote a second letter to Mr. Green. In this letter, Mr. Beaman advises Mr. Green that he had now received instructions that the City would be proceeding with its enforcement program. He states “your clients leave their unauthorized signs in place at their peril.”

[88] Mr. Green wrote back to Mr. Beaman on May 2, 2002 to say that if the City removed any of their signs lawfully erected or displayed on May 1, 2002, it will be under protest and in no way an admission that his clients had lost any advantage of section 210(146)(i) of the Municipal Act, or to forfeit any right to damages from lost revenue, which he stated to be about five dollars per day, per sign.

[89] On May 3, 2002, Mr. Green wrote to Mr. Beaman to indicate the intentions of Canamex and Affordable to apply for permits for some or all of the signs then lawfully erected. He stated that this would be done without prejudice to the rights as determined by the court. Mr. Green took this further occasion to restate the position of Canamex and Affordable that “those signs may continue to legally stay at those locations where they were located on May 1, 2002 and that you (Mississauga) must treat them as “grandfathered” and only removable by attrition.” Mr. Green also stated that any permit fees paid under protest would be added as damages, and recognized this to be a reasonable way of mitigating damages from lost revenues indicated in his letter of May 2, 2002.

[90] Mr. Green had the statement of claim issued on behalf of the plaintiffs on May 29, 2002 and served on the City shortly thereafter. The statement of claim contains the allegation that the 1994 mobile sign bylaw had sunsetted on January 30, 2001.

[91] It is an agreed fact that on July 30, 2002, the City seized and impounded a number of signs belonging to the plaintiffs. The basis for seizing and impounding a given sign was, according to the City, that the sign was on City property. The City did not respond to the request laid out in Mr. Green’s letter dated May 3, 2002.

[92] Mr. Irwin testified that Canamex was diligent to ensure that all signs were removed from public property before the new 2002 sign bylaw took effect on May 1, 2002. He sent a letter dated May 1, 2002 on behalf of Canamex to Mr. John Oates, Zoning Administrator the City of Mississauga to advise him that Canamex and Affordable had worked diligently to relocate all portable signs believed to be encroaching on City property, and to advise Mr. Oates that they would react to the placement of any signs that they could not identify as being on City property. Mr. Irwin states that he never received a response from Mr. Oates to this letter.

[93] The period following May 1, 2002 was a confusing one for Canamex and Affordable. In the course of implementing the new bylaw regime, it came to the attention of Canamex and Affordable that a number of their signs on City property had been taken down by the City.

[94] The signs removed and confiscated by the City in May 2002 represented by the photographs taken and received in evidence subject to a $200 retrieval fee, and a storage cost of $20 a day for each sign. Mr. Irwin conceded that he does not believe he retrieved any of the signs from the City compound. He stated he did not do so because he “had ample signs other than those” and that he had no market for those further signs.

[95] The City also issued 16 notices of contravention to Canamex after May 1, 2002 for displaying a sign without having a permit.

[96] The court heard further evidence that Canamex and Affordable took down several more signs in May 2002 to reduce the number of signs they might have to remove at a later date.

[97] On July 30, 2002, the City conducted a “blitz” on portable signs. Those signs owned by Canamex or Affordable that were removed during this blitz were taken to a storage facility. Canamex or Affordable knew they would have to pay a retrieval fee and storage costs to the City to have those signs returned. Acting with the belief that the City would be taking down and confiscating the rest of the signs, Canamex and Affordable went out and removed all of the remaining signs they owned and had leased to and located with customers.

[98] Canamex introduced records showing 93 mobile signs leased and on-site at customer locations as of May 1, 2002. This record shows the name of each customer leasing a particular sign, the address where the sign was located for the customer, the start date of that lease, the last date invoiced and whether the location was a single tenant or multitenant location.

[99] Mr. Irwin testified that he and Mr. Ritchie hired a gentlemen known only as Roy around May 1, 2002 to move or relocate signs arguably on City property. Roy was also instructed to take photographs of signs and their placement at all designated locations. Mr. Irwin could not recall Roy’s last name, and Roy was not called as a witness at trial.

[100] Canamex also filed records of 11 mobile signs rented to customers and on-site as of May 1, 2002 that the City of Mississauga removed on July 30, 2002. These records show the name of the customer, location for the sign, start date for the sign lease and last date invoiced. These signs are included in the larger list of the 93 signs in place on May 1, 2002.

[101] Photographs taken by Mr. Ritchie of signs stored at the City compound in May 2002 were marked as an exhibit. In a letter dated May 22, 2002, Mr. Green advises Mr. Beaman that three of Mr. Ritchie signs were impounded by City workers and were being stored at the storage facility at Royal Windsor Drive and Southdown Road. Mr. Green told Mr. Beaman in this letter that these signs are piled in a disorganized fashion, which ensures that they will be damaged. He also stated that the signs were worth about $600 each, and were being stored in a manner below the standard of care which the owners are entitled to expect from the City. Mr. Green informed Mr. Beaman that his clients would hold the City liable for any damage done to those signs.

[102] Mr. Beaman responded that the City denied liability for the decision of Mr. Green’s clients to defy the bylaw. He also stated that he trusted that Mr. Green’s clients would redeem the signs at the earliest possible opportunity by paying the required fees and taking possession of them.

[103] By the end of August 2002, Mr. Irwin states that the sign business was substantially depleted. He and Mr. Ritchie had already picked up the rest of their signs. Customers renting signs from either business were by this time purchasing permits for those signs.

[104] Mr. Irwin describes how customers would lease signs on a 30, 60 or 90 day program if they took an extended rental program. The customer would pay upfront on entering the rental arrangement. It was customary to rent out a lot of signs on long-term basis. Mr. Irwin states that because of the time limits required by the 2002 sign bylaw, neither Canamex nor Affordable could offer long-term rentals because there is no long-term continuous exposure for a sign permitted under the 2002 bylaw.

[105] Mr. Irwin testified that customers started to rescind their long-term leasing arrangements when they learned of the incoming 2002 bylaw. As the effective date drew closer, Mr. Irwin found that he could not pick up long-term leases as easily and growth slowed for his business.

[106] Mr. Irwin admitted that he had no written leases or agreements with customers. His record-keeping for repeat and long-term business was reflected in his invoicing to various customers.

[107] Mr. Irwin described how the expense side of the business was relatively minor for a sign with an extended exposure. All he was required to do was to deliver and erect the sign and then to put a message on the face of the sign for the customer. He would offer to arrange one free message on the set-up. He states that the maintenance for the signs was fairly insignificant as the frames were well-built and no repair or maintenance was necessary. In fact, most of the maintenance to the signs was the changing of the message for customers.

[108] A sign that was not grandfathered from bylaw 54-2002 (a “NGF sign”) required a permit that would involve the payment for a permit fee. The sign had limited exposure of 21 days followed by a 21 day holiday. The business that leased the sign could only obtain six permits per year, and multi-business plazas could only hold two permits at a time. Permit documents and applications required a start and end date, a letter from the landlord, and a site plan, among other requirements.

[109] By comparison, a grandfathered sign (a “GF sign”) could stand 365 days a year without takedown intervals, and would incur no permit fees. The only maintenance required would be to change the message. The only expenses for a GF sign would be to deliver and remove it, and to change the message periodically.

[110] Mr. Irwin testified that a GF sign would last indefinitely. He stated that it was made of medium density material for outside use. The frame and face was water resistant and would last for several years. The metal frame was powder coated and the sign could be anchored to the ground. He stated that he could not recall any signs that he had lost to wind and rain as of 2003. He also testified that only one sign had gone missing because of theft during that time.

[111] Mr. Irwin testified that the balance of the signs that had not been taken by the City were stored behind his garage at home. Some of those signs were converted to larger signs to employ in his business, and other signs simply rotted away.

[112] Mr. Irwin also gave evidence about the technology of the signs he made in 2002. Signs with changeable letters were by far the most common in those days.

[113] He believed there would be a market for A-frame signs, provided they were recognized and treated as GF signs.

[114] Mr. Irwin provided Mr. Hards, the expert retained by Mr. Green’s office as the expert to provide an opinion on the economic loss suffered by Canamex and Affordable, with what financial records he could provide. However, he stated that there had been a computer theft at his office that prevented him from providing Mr. Hards with much of the evidence he required.

[115] The plaintiffs served a supplementary request to admit asking the City to admit the list of addresses for which had been granted mobile sign permits in 2008, 2010 and 2011, where at least one mobile sign permit had been granted during those years. That supplementary request to admit was entered as an exhibit. The City’s response, subject to the clarification that the admission is only with respect to the addresses listed in Schedule A of the supplementary request to admit, was also entered as an exhibit. Those addresses where signs with permits were located in 2008, 2010 and 2011 correspond with the addresses listed in the exhibit filed by Canamex showing the names of customers and location of Canamex signs as of May 1, 2002.

The Rule 21 Motion heard in 2003

[116] The plaintiffs brought a motion under Rule 21.01(1)(a) on a question of law after commencing the action. The motion was heard by Justice Howden on November 17, 2003. On the motion, the plaintiffs sought the following relief:

1. Declaratory relief that bylaw 301-94 expired on either July 13, 1999 or January 30, 2001.

2. That section 33 of bylaw 54-2002 is void and of no effect or in the alternative, that the word “permanent” which appears within that section be struck from the section.

3. That accordingly, the 163 signs of the plaintiffs which were in place on May 1, 2002 are not subject to bylaw 54-2002.

[117] The factum on the motion before Justice Howden also shows that the plaintiffs intended to seek certain injunctive relief on that motion, namely:

(i) that the City be required to return to both plaintiffs those signs belonging to them which were impounded by the City; and

(ii) that the plaintiffs be entitled to the return of those signs that were legally in place on May 1, 2002 to the places where they were on that date, and that the City be restrained from further impounding any of those signs.

[118] For reasons released on January 30, 2004, Justice Howden found that bylaw 301-94 was a bylaw licensing a business within the meaning of section 24(3) of the Savings and Restructuring Act, which amended the Municipal Act. He also found that any aspect of bylaw 301-94 relating to the regulation of signs was not severable from the bylaw as a whole. Justice Howden went on to find that bylaw 301-94 was subject to the sunsetting provisions of section 24(3), and declared that bylaw 301-94 is deemed to have expired in January 30, 2001.

[119] Justice Howden also ordered, on consent, that the word “permanent” should be struck from section 33 of the new sign bylaw, being 54-2002.

[120] Of note, Justice Howden did not deal with that part of the plaintiff’s motion seeking injunctive relief.

[121] The City appealed Justice Howden’s order. The appeal was heard on June 18, 2004. Justice Blair, writing for the court, agreed with Justice Howden’s reasoning and dismissed the appeal. Justice Howden recognized in his reasons that the plaintiff took the position that if bylaw 301-94 expired on January 30, 2001, the interval until the enactment of bylaw 54-2002 became a time of no sign regulation in the City Mississauga. According to this argument, this would mean that the signs erected during that gap were lawfully erected and enjoyed protected status under section 210.146(i) of the Municipal Act (as it was in 2001).

[122] Justice Howden did not go further in his decision to make this finding. However, Justice Blair followed this reasoning on appeal to conclude as follows:

[13] I would therefore uphold the motion judge’s finding that bylaw 301-94, taken as a whole, is a bylaw licensing a business, and that it therefore expired on January 30, 2001. There being no other city bylaw in its place until May 1, 2002, there was no operative bylaw regulating and governing the respondents portable signs in the City of Mississauga during the intervening 15 months.

[123] I consider that legal finding to be a fact that is binding upon me in this case.

[124] After the appeal, the City amended its statement of defense to plead that the 1988 sign bylaw applied to mobile signs and to the plaintiffs, and that in the absence of obtaining a permit for mobile signs in place on May 1, 2002, the signs owned by both plaintiffs were not “lawfully erected” to qualify for grandfathered status under the 2002 bylaw. The City included this defense in a fresh as amended statement of defense in 2007.

Neil Ritchie

[125] Neil Ritchie purchased a fleet of signs in 1999 from Canamex. He would rent them out for $125 per month, $115 a month for two months and $99 a month for three months. The most popular sign program was the three-month program.

[126] Mr. Ritchie described his business routine when a sign would come up for renewal. On the day before the renewal date, he would call of the customer to renew the sign rental, and collect the rent. Most of his clients carried on business in multi-business plazas. He states that if one customer did not renew a sign rental, he would shop that sign to other tenants.

[127] Mr. Ritchie testified that expenses were relatively low for operating his sign business in 1999. He initially rented a small space for Mr. Irwin. Eventually, he moved to his own space in Brampton.

[128] Mr. Ritchie never turned a customer down that needed to sign. If the customer required a new sign, he would refer that customer to Mr. Irwin at Canamex.

[129] Mr. Ritchie states that because there was no permit required for class B and C signs, there was no limit on the number of signs to employ.

[130] It is significant to note that Mr. Ritchie was never involved in discussions with the City about the exemption of class A signs from any bylaw, with or without conversion to the A-frame structure. He states that he was always in close contact with Mr. Irwin, who kept him informed of what those discussions entailed.

[131] Mr. Ritchie also has no knowledge of how it came about that the City would allow A-frame signs. He understands that these discussions took place through Mr. Irwin’s negotiations with the City. Mr. Ritchie states that upon learning that the City was prepared to exempt A-frame signs on legs from the 1994 mobile sign bylaw, he assisted Mr. Irwin to convert class A signs to A-frame signs, and to add legs to those signs.

[132] Mr. Ritchie agreed that he was never given anything in writing to say that permits would be required for A-frame signs.

[133] Mr. Ritchie testified that he never received anything in writing to advise him that bylaw 38-88, or any previous bylaw other than the 1994 mobile sign bylaw applied to mobile signs in his business between 1999 and May 1, 2002. He states that if he had been told that another bylaw applied, he would have approached the City to ask what was required of him in order to comply with it. He states that if he had been required to apply for permits to rent signs, he would have made the necessary applications.

[134] Mr. Ritchie concedes that there was an environment of uncertainty when the new bylaw was passed on January 31, 2002. He does not recall seeing the news release dated January 31, 2002 from the City.

[135] On or about April 30, 2002, Mr. Ritchie took photographs of all locations where his signs were rented. He moved the signs that may have been placed on public property in an attempt to make sure that they were located on private property and not offside with the City. He also documented the list of all 70 locations where he had signs as of April 30, 2002. The existence and location of those signs was not challenged by the City.

[136] After May 1, 2002, many of these signs were removed by the City or picked up by Mr. Ritchie at the customer’s request so that there were 46 signs remaining at locations in Mississauga as of June 18, 2002. It is Mr. Ritchie’s evidence that customers would ask Affordable to pick up signs that they understood required permits under the new sign bylaw so that they would not be fined.

[137] According to Mr. Ritchie, it was the brochure from the City circulated to members the public after January 1, 2002 and the consequent newspaper articles that diminished his business. Mr. Ritchie refers to the letter from Orlando Corporation dated June 13, 2002 as an example of a landlord patrolling the compliance of its tenants with the new sign bylaw 54-2002. That letter stated, in part, as follows:

The City of Mississauga has recently passed a new stringent sign by-law no. 54-2002 regulating the use of signs in the City including “portable” signs. This by-law regulates the number of signs permitted on a site and also regulates various other aspects of any portable sign a tenant may wish to use. Many portable signs have been installed in the Heartland Town Centre and some of these signs appear periodically without proper permits. These contraventions expose Orlando Corporation, as well as the offending party, to fines and proceedings under the by-law to a maximum of $5,000.00 per contravention.

In order to ensure compliance with the by-law while providing portable signage to our tenants at competitive rates, Orlando Corporation has selected one sign company who has been authorized to approve (on behalf of Orlando) and install mobile sign(s) and obtain proper sign permits on your behalf.

[138] The letter from Orlando Corporation went on to identify C Me Mobile Signs in Mississauga as the designated sign company it had selected for tenants to rent mobile signs from to ensure that proper sign permits were obtained on their behalf.

[139] Mr. Ritchie does not recall the issue of grandfathering, or the use of that term in 2002. It would appear that the City did not recognize the concept of grandfathering, and no reference to grandfathering of a sign was made in any notice of contravention issued by the City after May 1, 2002.

[140] The impact of the new bylaw before 2002 affected the rental rates Affordable would charge to its customers. Mr. Ritchie explained that an NGF sign requiring a permit would rent for $195 for 21 days, plus a permit fee of $100, plus GST, regardless of the dimension of the sign. By comparison, a GF sign had no exposure limits. Affordable could rent smaller signs for $99 a month, or larger signs from between $125-$150 a month, plus GST.

[141] Mr. Ritchie also testified that his costs would remain stable for a GF sign. The costs for a GF sign would remain low if the sign stayed in the same location. He states that it was uncommon for him to remove a sign once it was in place.

[142] The signs Mr. Ritchie purchased from Canamex in 1999 were fairly new. He still has two of those signs that are the same size. One is still out on rental and the other is in good condition.

[143] Mr. Ritchie testified about the maintenance required for the signs. He stated that he would lubricate the nut and bolt assembly on a periodic basis, and would replace the tracks that held the sign letters in place from time to time. He stated that all maintenance could be done on-site.

[144] By 2006, when Mr. Irwin finally exited the sign rental business, Mr. Ritchie purchased the balance of the signs owned by Canamex, including those behind Mr. Irwin’s shop. He used portions of those signs, notably the rail and would, to reconstruct other signs. He is still using some of those signs made of that material.

[145] Mr. Ritchie testified that there is tremendous competition to rent signs today. This competition stems from the number of permits that are required. New business won by Affordable comes at an additional cost as Mr. Ritchie must comply with the requirements of the 2002 sign bylaw which requires him to obtain permits and to abide by the time and exposure limits under that bylaw.

[146] Mr. Ritchie stated that he has only ever had one sign stolen. None of the signs have been stolen since May 2002. He states that he has only had one sign hit by a car. Otherwise, any of the signs out on lease could have been repaired on site.

[147] Mr. Ritchie allowed Mr. Hards to review his records from 1999 to 2003. Mr. Ritchie did the bookkeeping for Affordable himself at first, including the preparation of all invoices, receipts and tax returns. He gave those documents to his bookkeeper to put into final form for Mr. Hards.

[148] Mr. Ritchie identified the list of Affordable mobile signs erected as of May 1, 2002, along with photographs of those signs, as part of the Joint Exhibit Book marked as an exhibit at trial. Of note was the A-frame sign advertising “Telus Mobility” at 30 Eglinton Avenue West in Mississauga that showed the message displayed on both sides of the sign. The information recorded on that exhibit shows the data first invoiced on September 11, 2000. The sign along Eglinton was located there continuously starting on September 20, 2000 until August 1, 2002.

[149] Mr. Ritchie explained that the system governing sign bylaws in Mississauga has been hard to work with because of the multiple roadblocks he as a businessman has encountered. He did not learn of the grandfathering concept until he and Mr. Irwin retained Mr. Green as counsel in 2002.

[150] The plaintiffs called Katherine Duic as a witness to give evidence as a long term customer of Mr. Ritchie’s. In fact, she was the only customer of either plaintiff called as a witness.

[151] Ms. Duic is the sole proprietor and operator of Salon Hairworks at 2760 Derry Road West in Mississauga. Salon Hairworks is located in a multitenant plaza. Ms. Duic has owned and operated Salon Hairworks for 17 years.

[152] Ms. Duic testified that she rented a sign from Affordable continuously from September 1999 to August 2002 on a “nonstop” basis. She states that the signs did a fantastic job of advertising her shop. Her business depends on walk-in business 365 days a year. When the new sign bylaw came into effect, she saw a dramatic difference in her business, and a decline in her customers per day. She stated that during the 21 day period of each cycle that she was not permitted to display the sign, customers would mention to her that she did not appear to be advertising.

[153] Ms. Duic recalls speaking with the landlord in 2013 and being told that she would have to wait for a permit for a sign rental in May 2014.

[154] Ms. Duic cannot recall if Mr. Ritchie ever told her that he was required to remove the sign he had been renting to her continuously between 1999 and 2002. She can’t remember if Mr. Ritchie offered to obtain a permit for that sign in 2002, although she is sure that she was willing to pay for the permit.

[155] Ms. Duic admitted that Salon Hairworks has a permanent sign on the pylon post in front of the plaza where her business is located. She states that it is a very small sign and that it does not provide the information a mobile sign conveys to members of the buying public. A mobile sign advertises not only the location and telephone number of Salon Hairworks, but also what new service her business offers, and any monthly special. When she has a mobile sign in front of her business, customers tell her the sign conveys the special she is offering and 90% of those customers book an appointment or have her provide the service at the time.

[156] When cross-examined, Ms. Duic work confirmed that she would actually pay the same rate of $90 each month to Affordable. She agreed that paying $90 a month over 12 months means that she is paying $1080 a year. Over the 34 or so months she rented the sign continuously from Affordable between 1999 and 2002, she would have paid approximately $3000 in rental expense. She also admitted that she was aware that she could purchase a sign for around $600.

[157] Ms. Duic stated that that she would rather pay someone to change the letters than own her own sign, even though it costs her more. She states that she did not want to invest in looking after the sign, to keep it clean or to do whatever was required for maintenance.

[158] Ms. Duic is in the business of selling and promoting grooming and aesthetics. She stated that she would want a newer looking sign and that she is willing to pay up to $150 a month “as long as she can have it”, and the sign is a good looking sign.

[159] Ms. Duic stated that she is currently renting a large sign that requires a permit. If she has to pay a permit fee, she is going to rent a larger sign.

[160] The plaintiffs also called John Shooten, who operates a sign business in Hamilton. Mr. Shooten was called to testify about the impact of a new sign bylaw passed by the City of Hamilton on his business.

[161] Mr. Shooten testified that he had no typical customer for his business. He rents out portable signs to car lots, retail outlets and grocery stores. He stated that portable signs are much cheaper to rent, and the message on those signs would be seen by 50,000 cars going by.

[162] Mr. Shooten was also called to testify about the grandfathering provisions in the Hamilton bylaw. He was referred to a list of legal nonconforming mobile signs in the City of Hamilton. On an objection made by Mr. Frankel, a voir dire was conducted as to the admissibility of that document. I found it to be inadmissible on two grounds. First, the document had not been included in the plaintiffs’ affidavit of documents, and no advance disclosure had been made to the City. Second, I found the document to be hearsay because its origin was unknown and its source and content did not provide the reliability to the court required by the principled approach to the hearsay rule: R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787 (S.C.C.).

[163] Mr. Shooten testified generally about the grandfathering provisions of the Hamilton bylaw. He explained that grandfathered signs are more popular than non-grandfathered signs because they do not require a permit and the sign could be displayed all year long by tenants. He testified that he has had certain long-term tenants, some as long as 19 years. However, he also admitted that the signs sometimes require occasional maintenance. While a portion of the original sign may remain intact, some requires replacement. He described how he replaced the wood and track of the sign when required. He stated that the sign could be repaired by repairing or replacing a piece of it. He explained that the sign could always be fixed on site, if needed.

[164] Under cross-examination, Mr. Shooten admitted that to maintain a good-looking sign, certain maintenance should be done every two years. This maintenance is done on a sign by sign basis. More signs than not require maintenance, including the replacement of parts to maintain the good look of the sign. Sometimes, the top part of the sign would come off the legs, and a repaired sign containing brand-new parts would be reinstalled.

[165] Mr. Shooten admitted that of his 19 signs grandfathered he has leased out for the past 19 years in Hamilton, none of those signs were purchased from Canamex. Mr. Shooten also admitted that none of those signs were purchased for Affordable.

[166] The plaintiff also called Joe Pouget. Mr. Pouget has owned and operated a mobile sign business in Hamilton, Haldimand County and the City of Burlington for many years.

[167] Mr. Pouget described how he has maintained grandfathered signs in Stoney Creek, which is now within the City of Hamilton. He described how grandfathered signs are better than non-grandfathered signs as grandfathered signs encounter less wear and tear from having to be installed and reinstalled or moved. They also benefit the customer, who is not required to pay permit fees and abide by other restrictions imposed by the bylaw.

[168] Mr. Pouget stated that the repair of a given sign depends on location, wind and sun exposure.

[169] Mr. Pouget agreed that none of his signs are of an A-frame variety. He also stated that he can move 6 to 8 portable signs at the time in the trailer. On the other hand, mobile signs are moved one at a time. They are moved like a trailer, with wheels. Once they are in location, the wheels are taken off. This makes the signs different than the signs at issue in Mississauga in this case.

[170] Mr. Pouget does not sell into Mississauga as it is a different urban center than his territory.

[171] Mr. Pouget admitted that there are periods when grandfather signs are not rented out in Stoney Creek. He also conceded that he often receives bartered services in return for renting signs to businesses, such as to the fitness centre. These transactions are generally negotiated directly with the business.

[172] Mr. Pouget also explained the practice of trading with another sign company for the use of one of his signs that is grandfathered. In return, he would get the use of the grandfathered sign owned by that other company at another location. In some cases, this might require him to pay something to the property manager.

ANALYSIS

Onus of Proof

[173] Each of the plaintiffs have brought this action against the City of Mississauga. There was no assertion made, or evidence given that the plaintiffs were operating as a partnership or in concert in some other fashion to join their legal interests together. I consider each of them to be separate plaintiffs who have the burden of proving their respective cases against the City both as to liability and as to damages.

[174] I propose to follow the argument made by the plaintiffs in the closing submissions of their counsel, except where the argument was based on alternative grounds that I have found not to apply.

Does Bylaw 38-88 Apply?

[175] It was only after the Court of Appeal dismissed the appeal of Justice Howden’s Order that the City amended its statement of defence to plead that bylaw 38-88 had always applied to the plaintiffs. This defence was raised to provide the basis for the City’s position that the plaintiffs were required to obtain permits for each of the signs in their respective fleets on January 30, 2001. If bylaw 38-88 had always applied to the plaintiffs and their businesses, those signs leased to customers after January 30, 2001 without obtaining permits under that bylaw would not have grandfather status.

[176] The plaintiffs rely on four grounds to argue that the 1988 bylaw did not apply to their signs:

A. the City is prohibited by res judicata and issue estoppel from pleading and relying on the 1988 Bylaw;

B. The 1988 Bylaw was repealed by implication by the 1994 Bylaw when it was passed;

C. The 1988 Bylaw was not applicable to mobile signs; and/or

D. The Plaintiffs were expressly or impliedly exempted from the 1988 Bylaw in any other bylaw that might be applicable to mobile signs.

A. Issue Estoppel

[177] The plaintiffs argue that the City is barred by res judicata and issue estoppel because of the decision given by Justice Howden on a question of law under Rule 21, which was upheld by the Court of Appeal in 2004. This, they argue, is a final answer to the question of whether there was a bylaw governing sign regulation in the City of Mississauga on January 30, 2001 after bylaw 301-94 was found to have expired on that date. The plaintiffs argue that the defendants did not raise bylaw 38-88 as an argument they could have argued as applicable on the motion and at appeal. As a consequence, the City is now estopped from invoking bylaw 38-88 to rely upon.

[178] The plaintiffs rely on Hoque v. Montreal Trust of Canada, 1997 NSCA 153, [1997] N.S.J. No. 430 in which the Nova Scotia Court of Appeal summarized the principle of res judicata to be that “parties must bring forward all of the claims and defenses with respect to the cause of action at issue in the first proceeding and that, if they fail to do so, they will be barred from asserting them in a subsequent action”.

[179] The Court of Appeal for Ontario condensed the test for issue estoppel in Minott v. O’Shanter Development Co., 1999 CanLII 3686 (ON CA), [1999] O. J. No. 5 from the discussion found in Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248 into the following three parts:

(1) that the same question has been decided;

(2) that the judicial decision which is set to create the estoppel was final; and,

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.

[180] The Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] S.C.J. No. 46 confirmed the test from Angle v. MNR, and expanded on scope of the discretion the court may exercise in appropriate circumstances. The court retains a broad discretion that is called upon only when all three parts of the test are satisfied, and is necessarily case specific. The exercise of discretion may be required where, in all of the circumstances, the operation of issue estoppel would work an injustice.

[181] It must be remembered that the motion under Rule 21 heard by Justice Howden on November 17, 2003 specifically requested a ruling in the form of a declaration that “all mobile signs legally in place on the 1^st of May 2002 are not subject to bylaw 54-2002”. This question necessarily involved an examination of the facts and the application of relevant legal principles to determine if there was no bylaw in place after the expiry of bylaw 301-94 on January 30, 2001 because of the provisions of section 24(3) of the Savings and Restructuring Act.

[182] The plaintiffs referred me to the two factums they had filed on the motion before Justice Howden, and to their appeal factum. In those factums, the plaintiffs requested a ruling from the court that the expiry of bylaw 301-94 would mean that “no valid sign bylaw was in existence on January 30, 2001 and therefore any and all of the plaintiffs portable signs that were erected on or after that day were lawfully erected”.

[183] Justice Howden’s decision provided a thorough review the Savings and Restructuring Act that amended the Municipal Act in 1996 to cause any bylaw of a municipality with respect to the licensing a business to expire of five years after the day that section came into force. Neither the plaintiffs or, it would seem, the City was aware that bylaw 301-94 had expired by operation of the statute.

[184] Justice Howden recognized the plaintiff’s position on the motion in paragraph 5 of his decision that if bylaw 301-94 expired on January 30, 2001, then the 15 month period that followed the date that bylaw 54-2002 went into effect on May 1, 2002 became a time of no sign regulation in the City of Mississauga. Justice Howden then articulates the plaintiffs’ position on the motion, or as a logical extension of that argument by stating “This would mean that signs erected during that period were lawfully erected and had protected status under section 210.146(i) of the Municipal Act as it was in 2001.”

[185] Justice Howden did not set out that conclusion later in his reasons, even after he finds that bylaw 301-94 was in essence a bylaw licensing a business and therefore subject to the sunsetting provisions of section 24(3) of the Savings and Restructuring Act. Justice Howden declared that bylaw 301-94 is deemed to have expired on January 30, 2001 as the final disposition of the issue on the motion.

[186] It is significant that the City did not include any reference to bylaw 38-88 in its factum at either the motion level or on appeal. The issue was therefore left open for Justice Blair to conclude that, as there was no other City bylaw in place regulating the leasing and placement of signs in Mississauga until May 1, 2002, there was no operative bylaw regulating and governing the plaintiffs’ portable signs in the City of Mississauga during the intervening 15 months between January 30, 2001 and May 1, 2002.

[187] The City takes a position that the motion under Rule 21 was argued before Justice Howden on the issues raised by the pleadings in 2003, and that bylaw 38-88 was not pleaded at the time and therefore formed no part of the issues before the court. I disagree with this characterization of the City’s strategy at the time. Clearly the issue of bylaws of any description governing the leasing of mobile signs and the effect of the sunset provisions of the Savings and Restructuring Act were central to the motion before Justice Howden on a question of law. Although the motion materials were not before me at trial, the facta of the plaintiffs made it clear enough for Justice Howden to summarize the plaintiff’s position in paragraph 5 of his decision.

[188] I therefore find that the issue of whether bylaw 38-88 was in effect on January 30, 2001 was not an issue before Justice Howden on the motion or before the Court of Appeal.

[189] I also find that the decision of the Court of Appeal upholding Justice Howden’s decision was final to satisfy the second part of the test for issue estoppel.

[190] I find that the parties to the motion and on appeal of that motion were the same parties as the litigants before me at this trial.

[191] Notwithstanding facts that satisfy each of the three parts of the test for issue estoppel, the court reserves the discretion not to apply issue estoppel even if all three parts of the tests are satisfied: Minott v. O’Shanter Development Co. and Danyluk v. Ainsworth Technologies Inc. Even though the City did not raise bylaw 38-88 in the evidence or in argument before Justice Howden or the Court of Appeal, it would have been reasonable for the City to argue the application of bylaw 38-88 at the time. The plaintiffs’ motion was brought on a question of law that would substantially shorten the trial. If bylaw 38-88 was material to the legal framework of the action, it should have been raised by the City. The City cannot argue now that if the plaintiffs did not raise it as an issue, it was not justiciable under Rule 21. It is not as though the plaintiffs’ motion was a motion for summary judgment which would have required an all-encompassing evidentiary basis to frame the question. See Leadbeater v. Ontario, 2001 CanLII 28341 (ON SC), 16 C.P.C. (5^TH) 119 (SCJ).

A. Repeal by implication

[192] The plaintiffs argue in the alternative that the enactment of bylaw 301-94, which was inconsistent with the provisions of bylaw 38-88, had the legal effect of repealing the 1988 bylaw by implication. The plaintiffs cite Daniels v. White, 1968 CanLII 67 (SCC), [1968] S.C.R. 517 where the Supreme Court of Canada quotes 36 Halsbury, 3^rd ed., page 465, at paragraph 28:

Repealed by implication is not favoured by the courts for it is to be presumed that Parliament would not intend to effect so important a matter as the repeal of the law without expressing its intention to do so. If, however, provisions are enacted which cannot be reconciled with those of an existing statute, the only inference possible is that Parliament, unless it failed to address its mind to the question, intended that the provisions of the existing statute should cease to have effect, and in intention so evinced is as effective as one expressed in terms. The rule is, therefore, that one provision repeals another by implication if, but only if, it is so inconsistent with or repugnant to that other that the two are incapable of standing together. If it is reasonably possible so to construe the provisions as to give effect of both, that must be done: and their reconciliation must in particular be attempted if the later statute provides for its construction as one with the earlier thereby indicating that Parliament regarded them as compatible, or if the repeals expressly affected by the latter statute are so detailed that failure to include the earlier provision amongst them must be regarded as such an indication.

(Emphasis Added)

[193] Further, the plaintiffs rely on the subsequent case from the Supreme Court of Canada in Levis (ville) c. Côté, [2007] S.C.R. 591 where the following principles are found at paragraphs 47 and 48:

The starting point in any analysis of legislative conflict is that legislative coherence is presumed, and an interpretation which results in conflict should be eschewed unless it is unavoidable. The test for determining whether an unavoidable conflict exists is well stated by Professor Côté in his treatise on statutory interpretation:

According to case law, to statutes are not repugnant simply because they deal with the same subject: application of one must implicitly or explicitly preclude application of the other. (P.-A. Côté, The Interpretation of Legislation in Canada (3^rd ed. 2000), at p. 350)

Thus, a law which provides for the expulsion of a train passenger who fails to pay the fare is not in conflict with another law that only provides for a fine because the application of one long did not exclude the application of the other (Toronto Railway v. Paget, 1909 CanLII 10 (SCC), 42 S.C.R. 488 (S.C.C.)). Unavoidable conflicts, on the other hand, occur when two pieces of legislation are directly contradictory or where their current application would lead to unreasonable or absurd results. A law, for example, which allows for the extension of a time limit for filing an appeal only before it expires is in direct conflict with another law which allows for an extension to be granted after the time limit has expired (Massicotte v. Boutin, 1969 CanLII 97 (CSC), [1969] S.C.R. 818 (S.C.C.)). (Emphasis Added)

[194] The plaintiffs submit that comparison of bylaw 38-88 and bylaw 301-94 shows such differences in the two bylaws as to be irreconcilable. The difference in the maximum exposure requirements for a sign under the 1988 bylaw contrasted with the 1994 bylaw and the administration of those bylaws by separate departments within the City are two of those differences to suggest the latter repealed the former by implication.

[195] It is for legislative authorities to repeal legislation enacted by that legislative authority, and not for the court to declare enactments repealed by implication unless it is unavoidable to do so. A previous piece of legislation may serve some purpose other than standing in contrast to a later piece of legislation. Bylaws enacted by a local municipality are legislative enactments of that municipality. I do not find under all the circumstances that bylaw 301-94 repealed by law 38-88 by implication. In fact, the City of Mississauga knew or must have known that bylaw 30-88 remained a bylaw on the books and must be taken to have intended that it remain a bylaw until it was expressly repealed by bylaw 54-2002. That express act of repealing the 1988 bylaw is confirmatory evidence that the City knew and intended the 1988 bylaw to remain in effect until it was repealed, and the bylaws are presumed not to conflict with one another unless the application of one implicitly or explicitly precludes application of the other: Levis (ville) c. Côté.

B. Bylaw 38-88 was never applicable

[196] The plaintiffs next turn to the question of whether the 1988 bylaw was not applicable to mobile signs in the first place. The plaintiffs rely on evidence in support of this argument that shows:

• The 1988 Bylaw, while having a “general definition” for sign, had no specific definition of portable or mobile sign, even though it had specific definitions for many other kinds of signs

• Bylaw 876-83 which preceded the 1988 Bylaw was specifically a Portable Sign Bylaw and had a specific definition for same

• Bylaw 876-83 was not repealed by the 1988 Bylaw but was repealed by the 1994 Bylaw

• Amendments were made to the 1988 Bylaw right up to 2001, several of which amendments added definitions for specific types of signs – none of which related to mobile or portable signs

• In the report to Council leading up to the passage of the 1994 Bylaw, no mention is made of the 1988 Bylaw as a bylaw governing mobile signs

• In the reports leading up to the 2002 Bylaw, such as the draft and final Rendl reports, the 1988 Bylaws referred to as the bylaw governing permanent, not portable signs

• The application form for portable sign up to 2002 made no reference to the 1988 Bylaw, but only reference to the 1994 Bylaw

• In all of the discussions that the plaintiffs had with any and all City officials, no mention was ever made of the 1988 Bylaw nor were the application requirements under the 1988 Bylaw ever required

• While the legal interpretation of this is obviously left to the Court, Mr. Turner admitted that section 4 of the 1988 Bylaw in his opinion as an enforcement officer, was capable of interpretation that it did not apply to portable signs.

[197] In evidence consistent with those facts, Mr. Turner also testified that a mobile sign permit was not available under bylaw 38-88 to members of the public while he was employed by the City. If a member of the public seeking to purchase a permit under bylaw 30-88 made an application, that application would have been directed to the Corporate Services Department and required to make an application under bylaw 301-94 prior to 2001.

[198] Similarly, Ms. Karpowech testified that the application form for a permit from the Corporate Services Department at the City of Mississauga specifically refers to bylaw 301-94. At no place on the application form is reference made to bylaw 38-88. I find that the 1988 bylaw was not applicable to mobile signs, and for that reason Council for the City of Mississauga enacted bylaw 301-94.

C. Plaintiffs were exempted from bylaw 38-88

[199] The plaintiffs state as a final argument that they were specifically exempted from the application requirements of the 1988 bylaw or any other bylaw otherwise regulating portable signs within the City of Mississauga.

[200] In Foley v. Shamess, 2008 CarswellOnt. 4769, also 2008 ONCA 588 the Court of Appeal concluded from a review of the law that a municipality has a broad discretion in determining how it will enforce its bylaws, as long as it acts reasonably and in good faith. The evidence shows that the City made the conscious decision in 1997 of not requiring permits for class B and C signs and to exempt any class A signs not greater than 32 ft.² if converted into an A-frame type of sign from bylaw 301-94. There was no evidence given at trial that the City told the plaintiffs at any time that the 1988 bylaw would otherwise apply to their signs, or that bylaw 30-88 would apply to their signs instead of bylaw 301-94.

Conclusion on the applicability of bylaw 38-88

[201] I therefore conclude that bylaw 38-88 did not apply to the plaintiffs’ signs by virtue of issue estoppel because it could have and should have been raised by the City in 2004. The evidence further supports the finding that the City implicitly exempted the plaintiffs’ signs from bylaw 38-88 whether or not the plaintiffs or the City put their minds to that bylaw at all, when the City expressly gave the plaintiffs’ an exemption for their signs from bylaw 301-94 as the bylaw it was using to regulate the leasing of mobile signs in Mississauga.

[202] I therefore find that bylaw 38-88 did not apply to the plaintiffs before or after January 30, 2001.

Duty of Care

[203] Since bylaw 38-88 did not apply to the plaintiffs on or after January 30, 2001, there was no operative bylaw regulating and governing the plaintiffs’ portable signs in the City of Mississauga. Accordingly, there was no operative bylaw regulating any portable or mobile signs in the City of Mississauga until the enactment of bylaw number 54-2002 on May 1, 2002.

[204] The plaintiffs base their claim for negligence against the City for the steps taken to enforce or to threaten the enforcement of that bylaw against the plaintiffs, their signs and customers as though the bylaw applied to them. They claim that this negligence caused them the damages they seek in this action. The plaintiffs claim that the City owed them a duty of care at law, and that the conduct of the City fell below the standard of care required to meet that duty of care.

[205] The plaintiffs called evidence at trial to support their position that the 93 signs owned by Canamex and the 70 signs owned by Affordable on lease at various locations in the City of Mississauga were lawfully erected on May 1, 2002 when By-law 54-2002 came into force. The plaintiffs claim, based on this finding, requires a further finding that the City owed a duty of care to each plaintiff not to enforce the 2002 By-law against signs owned by each plaintiff that were lawfully erected.

[206] Counsel for the plaintiffs advised the Court at the start, throughout and on closing that they rely on the decision in Rausch v. Pickering 2013 ONCA 740, [2013] O.J. 5584 (Ont. C.A) as authority to find the City owed a duty of care to ensure it had a valid basis to seek enforcement of the 2002 bylaw before taking the steps that it did.

[207] The Court of Appeal in Rausch was sitting on appeal of a decision from a motion to strike a statement of claim brought under Rule 21.1(b). The City takes the position that the nature of the decision under appeal in Rausch and the facts of that case are entirely different and distinguishable from the matters at issue with the plaintiffs. The City from beginning to end has relied upon the decision of the Supreme Court of Canada in Welbridge Holdings Ltd. v. Greater Winnipeg (Municipality), 1970 CanLII 1 (SCC), [1971] S.C.R. 957 to absolve the City from any negligent enforcement of an invalid statute if those acts were carried out in good faith.

[208] The City also relies upon section 450 (formally section 331.3 of the Municipal Act, RSO 1990, ch. M. 45 as amended) of the Municipal Act 2001 that states:

450. No proceeding based on negligence in connection with the exercise or non-exercise of a discretionary power or the performance or non-performance of a discretionary function, if the action or inaction results from a policy decision of a municipality or local board made in a good faith exercise of the discretion, shall be commenced against,

(a) a municipality or local board;

(b) a member of a municipal council or of a local board; or

(c) an officer, employee or agent of a municipality or local board. 2001, c. 25, s. 450.

[209] The first step in the analysis of the plaintiffs’ claim against the City for the negligent enforcement of the 2002 bylaw involves an inquiry into whether the City owed a duty of care to the plaintiffs under all of the circumstances. A duty of care is owed when the two part test pronounced in Anns v. Merton London Borough Council, [1970] A.C. 728 by the House of Lords is satisfied. Lord Wilberforce in Anns set out the test this way:

First, one has to ask whether, as between the alleged wrongdoer and the person who has suffered damages there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter - in which a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty of the class of person to whom it is owed or the damage to which a breach of it may give rise.”

[210] The test in Anns has been continued in Canada in cases such as Kamloops v. Neilson, 1984 CanLII 21 (SCC), [1984] 2 S.C.R. 2 and Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537.

[211] In Kamloops v. Neilson, Justice Wilson focused on the principles necessary to find a duty of care owed by a local authority such as a municipality to individuals in a civil action. Justice Wilson discussed how Lord Wilberforce in Anns analyzed the powers and duties of the local authority to determine whether the local authority is making “policy” decisions or “operational” decisions, and that a local authority is a public body whose powers and duties are definable in terms of public rather than private law. However, in some circumstances the law imposes a private law duty on a public body towards individuals over and above, or perhaps alongside, public law powers and duties. It is this duty of care, if found, that enables individuals to whom the duty of care is owed to sue the local authority for damages in a civil action.

[212] The difficulty in such cases is always to determine the circumstances where such a private law duty of care should be found. Lord Wilberforce stated in his speech in Anns that the first step is to analyse the powers and duties of the local authority to determine whether those powers and duties require it to make "policy" decisions or "operational" decisions. His Lordship states at page 754:

Most, indeed probably all, statutes relating to public authorities or public bodies, contain in them a large area of policy. The courts call this "discretion" meaning that the decision is one for the authority or body to make, and not for the courts. Many statutes also prescribe or at least presuppose the practical execution of policy decisions: a convenient description of this is to say that in addition to the area of policy or discretion, there is an operational area. Although this distinction between the policy area and the operational area is convenient, and illuminating, it is probably a distinction of degree; many "operational" powers or duties have in them some element of "discretion." It can safely be said that the more "operational" a power or duty may be, the easier it is to superimpose upon it a common law duty of care.

[213] In Rausch, Justice Epstein addressed the statutory framework providing the context for the issues on appeal. This is a necessary step in the duty of care analysis under Anns as discussed in Kamloops v. Nielsen, and later in Cooper v. Hobart. This is therefore the logical place to start in the analytical process here as well.

[214] Section 101 of the Municipal Act in force on January 30, 2002 reads as follows:

Jurisdiction of councils

101. (1) Except where otherwise provided, the jurisdiction of every council is confined to the municipality that it represents and its powers shall be exercised by by-law.

By-law not to be quashed because unreasonable

(2) A by-law passed by a council in the exercise of any of the powers conferred by and in accordance with this Act, and in good faith, shall not be open to question, or be quashed, set aside or declared invalid, either wholly or partly, on account of the unreasonableness or supposed unreasonableness of its provisions or any of them. R.S.O. 1990, c. M.45, s. 101.

[215] Further, section 102 of the Municipal Act in force on January 30, 2002 reads as follows:

General power

102. Every council may pass such by-laws and make such regulations for the health, safety, morality and welfare of the inhabitants of the municipality in matters not specifically provided for by this Act and for governing the conduct of its members as may be deemed expedient and are not contrary to law. 1994, c. 23, s. 54.

[216] Even though the provisions of the Municipal Act empowering the City of Mississauga to pass bylaws to prohibit or regulate signs does not raise a statutory duty of care, it is also important to consider those provisions to determine if they preclude a claim based on the finding of a duty of care at common law against the City. In this case, that kind of provision was found in section 331.3, now section 450 of what is now the Municipal Act 2001, which reads as follows:

Policy decisions

450. No proceeding based on negligence in connection with the exercise or non-exercise of a discretionary power or the performance or non-performance of a discretionary function, if the action or inaction results from a policy decision of a municipality or local board made in a good faith exercise of the discretion, shall be commenced against,

(a) a municipality or local board;

(b) a member of a municipal council or of a local board; or

(c) an officer, employee or agent of a municipality or local board. 2001, c. 25, s. 450.

[217] The plaintiffs do not take the position that the 2002 bylaw is not properly enacted. The plaintiffs take the position that the City is liable from the negligent enforcement of the bylaw where the City as a statutory authority failed to properly satisfy itself with respect to its jurisdiction to enforce the bylaw prior to taking enforcement measures.

[218] In order for the court to find liability on the part of the City, the plaintiffs must establish that the City owed a duty of care to the plaintiffs. A duty of care can be a common law duty of care or a statutory duty of care. I find from a review of the statutory provisions of the Municipal Act in force on May 1, 2002 that no statutory duty of care was owed by the City because the language of the enabling sections to pass bylaws prohibiting or regulating signs do not identify or contemplate an individual or any ascertainable segment of the citizenry in Mississauga.

[219] In Rausch, Justice Epstein took the opportunity to explain the distinction between a duty of care owed by the defendant to a plaintiff as distinct from any standard of care that may be owed:

The legal principles regarding the duty of care

37 The foundation of a claim in negligence is the recognition of a duty of care owed by the defendant to the plaintiff. A duty of care is not a duty to do anything specific: the duty is to take reasonable care to avoid causing foreseeable harm to those with whom one is in a relationship of proximity.

38 An error frequently made is conflating the duty of care with the standard of care. They are discrete concepts. As the Supreme Court of Canada wrote in Stewart v. Pettie, 1995 CanLII 147 (SCC), [1995] 1 S.C.R. 131, at para. 32, "the question of whether a duty of care exists is a question of the relationship between the parties, not a question of conduct." The question of what conduct is required to satisfy the duty is a question of the appropriate standard of care. This important point is expressed in Carolyn Sappideen & Prue Vines, Fleming's The Law of Torts, 10th ed. (Sydney: Thomson Reuters, 2011), at pp. 123-24:

The general standard of conduct required by law is a necessary complement of the legal concept of "duty". There is not only the question "Did the defendant owe a duty to be careful?" but also "What precisely was required of the defendant to discharge it?" Indeed, it is not uncommon to encounter formulations of the standard of care or of some particular precaution that an actor in the defendant's position should take in terms of "duty", as when it is asserted that a motorist is under a duty to keep a proper lookout or that a person has (or has not) a duty to warn another of a certain risk. But this method of expression is best avoided. In the first place, the duty issue is already sufficiently complex without fragmenting it further to cover an endless series of details of conduct. "Duty" is more appropriately reserved for the problem of whether the relation between the parties (like manufacturer and consumer or occupier and trespasser) warrants the imposition upon one of an obligation of care for the benefit of the other, and it is more convenient to deal with individual conduct in terms of the legal standard of what is required to meet that obligation. Secondly, it is apt to obscure the division of functions between judge and jury or the distinction between questions of law and fact. It is for the court to determine the existence of a duty relationship and to lay down in general terms the standard of care by which to measure the defendant's conduct; it is for the jury or judge sitting alone to translate the general into a particular standard suitable for the case in hand and to decide whether that standard has been attained or the duty breached.

39 The existence of a duty of care simply means that the defendant is in a relationship of sufficient proximity with the plaintiff that he or she ought to have the plaintiff in mind as a person foreseeably harmed by his or her wrongful actions. It is not a duty to do anything specific; it is a duty to take reasonable care to avoid causing foreseeable harm: Ryan v. Victoria (City), 1999 CanLII 706 (SCC), [1999] 1 S.C.R. 201, at paras. 25-27.

40 If a duty of care is recognized, then the standard of care necessary to discharge the duty and whether it has been breached will be determined at trial.

[220] It is therefore necessary for the plaintiffs to prove that the City owed them a duty of care as the foundation for any claim they are making. This duty of care is relationship based. If there is no duty of care, there can be no finding of liability. A standard of care for the City to meet only arises as an issue if there is a duty of care to form the basis for liability at all.

[221] In order to find a duty of care at common law, the plaintiff must satisfy the two-step test from the Anns case, which was woven into the law of Canada in Kamloops v. Nielsen. To satisfy the first step of the test in Anns, it is for the plaintiff to establish on a prima facie basis the presence of a duty of care by demonstrating reasonable foreseeability of harm and a proximate relationship between the plaintiffs and the City. The court will first consider whether the relationship between the parties falls into any recognized categories where a duty of care has been found. Such categories include owners and users of property, operators of motor vehicles to one another, and , of course, neighbors. If the facts do not suggest a relationship recognized by past cases, then it is appropriate for the court to engage in the examination of the relationship, if any, on which the reasonable foreseeability of harm and the proximate aspects of the test might be measured. Policy considerations arising from or relevant to the nature of the relationship between the parties must be examined to determine if they support a finding of proximity. If a proximate relationship is found and the reasonable foreseeability of harm to the proposed defendant is shown, the plaintiff has satisfied the first step of the Anns’ analysis.

[222] On the second stage of the Anns’ test, the evidentiary burden will shift to the defendant to show there are additional policy considerations that should eliminate or limit the prima facie duty of care found under the first part of the Anns’ test.

[223] Whether the plaintiffs have demonstrated that the City could reasonably foresee that taking steps to enforce the 2002 bylaw without considering whether the signs located at customers on May 1, 2002 were lawfully erected would cause harm to the plaintiffs is a very real question. Municipalities are presumed to know the law: Rausch, at paragraph 88. The 2002 bylaw was directed to regulating those entities who would display signs. It was reasonable for the City to contemplate that those entities would lease signs from sign companies, and that the regulation for the display of signs would impact the companies who supply those signs to end-users. Therefore, if the 2002 bylaw that required the payment for a permit and imposed restrictions on the exposure of a sign was grandfathered under section 210.146(i) of the Municipal Act, the harm to the sign company was reasonably foreseeable if enforced by the City without regard to that special status.

[224] I find on the evidence that the signs each plaintiff had out on lease as of May 1, 2002 were lawfully erected within the meaning of the Municipal Act and section 33 of the 2002 bylaw. Those signs were therefore “grandfathered” and exempt from the provisions of the bylaw that would otherwise apply to them.

[225] The question of whether the City and the sign companies had a proximate relationship is a different question. I do not consider the positions of the City and the plaintiffs in relation to each other to fall within a recognized category of proximate relationships because of the unique character of the sign business and the powers the City was given to regulate signs in the 21^st century marketplace. There was no evidence given at trial that the City targeted each plaintiff by this new bylaw. It is clear from the Rendl report that all signs displayed throughout the municipal corridors of Mississauga, including portable and mobile signs, had grown beyond tasteful proportions and had become something of an urban blight by the year 2000. The 2002 bylaw found its form and voice resulting in the Rendl report, and was directed at all sign users as well as sign companies. Indeed, the Rendl report itself informs the analysis of the very policy concerns a vital and rapidly expanding municipality should have to regulate sign usage on public as well as private property.

[226] In order for the court to find a proximate relationship, there must be the framework for a relationship to begin with. Although the City had interacted with Mr. Irwin personally and as the principal of Canamex, the same cannot be said of a relationship with Mr. Ritchie. The evidence is conclusive from the testimony of Mr. Irwin and Mr. Turner as well as from Mr. Ritchie on cross-examination that he did not speak to, meet or exchange correspondence with the City, except for his involvement in the consultative process.

[227] A “close and direct” relationship between the defendant and a plaintiff is relevant to the issue of proximity. In Rausch, the court was sitting on appeal of a Rule 21 motion where the allegations are essentially taken to be proven as fact for the purposes of the motion. Justice Epstein, on considering whether the plaintiff had pleaded a reasonable cause of action, found that the bylaw enforcement officer had focused his attention on Mr. Rausch, and had informed him directly of the steps he would take. These steps ranged from issuing an order to comply to laying a provincial offense charge and the removal of his wild boars. Justice Epstein states that, in doing so, the City targeted Mr. Rausch. This was sufficient to provide a platform for finding a relationship of some proximity to support a cause of action.

[228] On the first step of the Anns test, I find that the City owed a prima facie duty of care based on a reasonable foreseeability of harm and a proximate relationship to Canamex, but not to Mr. Ritchie.

[229] Moving to the second step of the Anns’ test, the court must examine any policy concerns that would negate or limit the prima facie duty of care. On this step, policy considerations “are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally”: Cooper v. Hobart.

[230] As the City is a statutory actor, it is at this stage that the court must consider whether the City’s decision to take steps in contemplation of, or to enforce the 2002 bylaw vis-à-vis sign companies and sign users was an operational or a policy decision.

[231] Generally speaking, local authorities such as municipalities will not be held liable in negligence for implementing policy decisions. However, even though a local authority may have some immunity for making a policy decision, the carrying out of that policy decision may be considered operational in nature and therefore attract liability if by doing so the local authority falls below the standard of care required to discharge the duty of care owed: Kamloops v. Nielsen.

[232] Policy decisions have been recognized as those “dictated by financial, economic, social or political factors or constraints”. Policy decisions generally include an element of discretion to exercise. Policy functions are often seen as legislative, or quasi-judicial in nature. Operational decisions have been identified as those based on “administrative direction, expert or professional opinion, technical standards or general standards of reasonableness” criteria. The performance of decisions, or the enforcement of rules, regulations and bylaws involve less discretion to exercise, and is often seen as “operational” in nature.

[233] The statutory defense provided to the City under section 450 of the Municipal Act 2001 for policy decisions is consistent with this approach, provided they are made in good faith. The statutory defense provided by section 450 does not shield the City from operational decisions.

[234] The plaintiffs base their claim on two essential initiatives taken by the City to enforce the new bylaw. First, the City embarked on a publicity campaign when it published and distributed the “Signs in the City” brochure, and issued a press release that set off a storm of newspaper coverage about the new bylaw that would take effect in May 1, 2002. The plaintiffs state that the brochure and the press release did not provide that signs in place at customer locations on May 1, 2002 when the bylaw took effect would be grandfathered as lawfully erected signs, or to otherwise identify situations where the new bylaw would not apply.

[235] Second, the plaintiffs state that the City removed signs in the early days of May 2002 after the bylaw took effect (the first blitz) and later in July 2002 (the second blitz) without regard to their grandfathered status. The plaintiffs state that the advertising campaign consisting of the brochure and press release caused uncertainty in the marketplace and reluctance of customers to lease signs after May 1, 2002 unless they complied with the 2002 bylaw. The plaintiffs argue that the publicity campaign, compounded by the confiscation of up to 20 signs from the plaintiffs culminated in their decision to remove all remaining signs from their May 1, 2002 locations in August 2002.

[236] In my view, the City’s decision to publicize the effective date of the 2002 bylaw and its effect on the citizenry and business community throughout the City Mississauga by circulating the brochure and issuing the press release was a policy decision protected by section 331.3 (now section 450) of the Municipal Act.

[237] The plaintiffs submit that it was this publicity campaign that caused the uncertainty in the marketplace, leading to the reluctance of customers to lease signs whether grandfathered or not. This publicity campaign, coupled with the signs removed by the City in early May and in July 2002, resulted in the plaintiffs’ decision to remove the rest of the signs in August 2002.

[238] I further find that these steps do not amount to an enforcement of the bylaw, but were rather an exercise of discretion to implement policy, namely to attain the objectives for the orderly regulation of signs propounded in the Rendl report as well as to ensure that private signs do not clutter and trespass upon public lands.

[239] I also find that had the City not removed the 20 customer signs from public land in May and July, 2002, the plaintiffs would have removed those signs along with the rest in August 2002.

[240] I am concerned that finding there to be no policy reason to deny a duty of care exists would open up the City to indeterminate liability. The Supreme Court of Canada in Holland v. Saskatchewan (Minister of Agriculture, Food and Rural Revitalization), 2008 SCC 42 examined the question of indeterminate liability in the context of the second step of the Anns’ test. The plaintiffs argue that the negligence of the City stems from its failure to consider whether it had the statutory authority to enforce the 2002 bylaw against the plaintiffs. I find that the plaintiffs allegations that the City decided to implement and enforce the bylaw is a claim that the City acted without the statutory authority to enforce the bylaw at all. It is therefore my view that the Holland case applies to include indeterminate liability as a factor to consider as a policy consideration.

[241] If the City were found to owe a duty of care to one or both plaintiffs as sign companies, it would open the City up to indeterminate liability because every sign company, and sign customer who leased signs in the City of Mississauga during the 15 month gap could possibly have a claim because all permits under bylaw 301- 94 expired on the 31^st day of December in the year they were issued. Since bylaw 301-94 expired by operation of law on January 30, 2001, all portable and mobile signs deployed after December 31, 2001 and prior to May 1, 2002 were arguably “lawfully erected.” That is a risk for which the City of Mississauga had no reasonable foreseeability, and it is contrary to the public interest of municipal taxpayers as well as to sign companies and their customers who did not have grandfathered signs. This approach is consistent with the view on indeterminate liability expressed by the Supreme Court in Cooper v. Hobart at paragraphs 54 and 55.

[242] I therefore find that the City owed no duty of care to Canamex. If I am wrong about the City having no proximate relationship with Mr. Ritchie above, I find that the City had no duty of care to either Canamex or Mr. Ritchie on the application of step two of the Anns’ test.

DAMAGES

Causation

[243] I now propose to review the general basis of the damages claimed by each of the plaintiffs, even though I have found the City owes no duty of care to either of them to support a finding of liability. Canamex and Affordable each claim imputed damages for the loss of the grandfathered status of their signs between May 1, 2002 and May 31, 2011. They each claim these damages for lost profits over income earned, or that could have been earned over regulated signs under the 2002 bylaw to quantify their economic loss over a 20 year arc between 2011 and June 1, 2031.

[244] The plaintiffs have the burden of proving what damages they have suffered. That burden of proof includes showing that the wrongful acts of the City caused the damages claimed. In this case, causation is as much a part of either plaintiffs’ claim to prove as any other part.

[245] The Court of Appeal in Ault v. Canada (Attorney General), 2011 ONCA 147, [2011] O. J. No. 845 approved the “but for” test to find causation between the negligent conduct alleged, and the loss or injury claimed in this way:

45 The "but for" test recognizes that compensation for negligent conduct should only be made where there is a substantial connection between the injury and the defendant's conduct: Resurfice Corp. v. Hanke, 2007 SCC 7, [2007] 1 S.C.R. 333, at para. 23. In assessing the issue of "substantial connection", courts consider whether the damages claimed were a reasonably foreseeable result of the defendant's negligence. In cases where there is not a substantial connection between the damages and the negligence, the damages are said to be too remote for recovery.

[246] In order for the plaintiffs to prove an entitlement to damages for all or part of the amounts claimed, each of them would have to establish that “but for” the wrongful acts of the City, the injury or loss that the plaintiff has allegedly suffered would not have occurred. In order to do this, I must consider whether there is a substantial connection between the injury or loss and the City’s conduct. Where a substantial connection between those damages and wrongful conduct alleged against the City cannot be found, the damages are said to be too remote for recovery.

Economics of Sign Life

[247] Mr. Hards explained that the following four characteristics are important for the purpose of a damages analysis relating to the economics and the income-producing nature of a sign:

1. The useful life of a mobile sign. This includes the physical attributes of the sign, as well as the effect of section 99 of the Municipal Act that provided for the grandfathering of lawfully erected signs as of May 1, 2002;

2. The effect of regulation. This relates to the permit requirements and exposure restrictions under the 2002 bylaw;

3. The pricing advantages of a grandfathered sign. This includes Mr. Hards discussion about how a grandfathered sign could earn 1.7 times more prior to May 1, 2002;

4. The cost advantage of a grandfathered sign. This includes an analysis about how non-grandfathered signs require greater overhead for the sign leasing company in the form of higher maintenance costs because of the wear and tear of transportation and rotation, the related increased payroll and other costs.

[248] Of these characteristics, the most fundamental for the purposes of the income loss calculation would be the useful life of a mobile sign. The longevity of a sign that was lawfully erected when the 2002 bylaw came into effect on May 1, 2002 depends upon it not being “substantially altered”. The term “substantially altered” is not defined in the 2002 by law, or in section 99 of the Municipal Act 2001.

[249] Mr. Frankel introduced two bylaws from the City of Hamilton during his cross-examination of Mr. Pouget. Bylaw number 06-243 defined an existing sign that would qualify as a grandfathered sign under that bylaw in paragraph 3.5.1 as follows:

3.5.1 any sign that is lawfully erected, located, or displayed on the day this bylaw comes into force may continue to be erected, located, or displayed provided it is not substantially altered in a manner that would bring it into noncompliance or increase its noncompliance with this bylaw. Anything done to preserve the condition of a sign or to prevent the deterioration of a sign, including the restoration of a signed by removing or replacing worn out, missing, damaged or broken parts, or a change in the message or copy displayed by the sign does not in itself constitute a substantial alteration.

[250] The Concise Oxford English Dictionary, 12^th edition (Oxford University Press-2011) does not define the term “substantial alteration” as a unified term. The term “alter” is defined as 1. “a change in character, appearance, or composition.” The term “substantial” is an adjective defined as “1. of considerable importance, size, or worth; 2. concerning the essentials of something; and 3. real and tangible rather than imaginary.” From these definitions I take it that an alteration would be a change in the character, appearance or composition of a sign, and a substantial alteration would be considered a real change in the character appearance or composition of considerable importance, including the size and value of the sign.

[251] From this definition I conclude that a change in the character, appearance or composition to alter the sign, or to make an alteration, to preserve and protect the sign from deterioration, and to provide substituted parts would not amount to a “substantial alteration” of a sign under the bylaw enacted by the City of Hamilton. The City of Hamilton built in those changes to the bylaws to ensure that they are treated as exceptions to the definition of “substantial alteration”. That is language the City of Mississauga chose not to employ.

[252] Any important change to the character, appearance or composition of a portable sign beyond rearranging or replacing letters on the face of the sign, or the maintenance and repair of the sign could constitute a substantial alteration under Mississauga bylaw 54- 2002. Therefore, if there is something more done to the sign than the maintenance, repair or changing of the letters to convey a new message that is an important change to the character, appearance or composition of the portable sign, it has been substantially altered.

[253] The importance of ensuring signs remain in a safe condition and installed in a safe manner is conveyed by paragraph 30 of the 2002 bylaw relating to the maintenance of signs. The bylaw requires in subsection (1) the owner of any sign to maintain or cause such design to be maintained in a proper state of repair, so that such sign remains completely operative at all times and does not become unsafe, defective or dangerous. At subsection (2), the bylaw provides that the maintenance or repairs using materials identical to the materials of the component being maintained or repaired, does not constitute an alteration so as to require a permit to be issued. This underscores the precise nature of what may be considered a substantial alteration elsewhere in bylaw 54-2002.

Financial information relied upon

[254] The plaintiffs filed the Damages Report dated December 17, 2010 prepared by Mr. Thomas Hards of Grant Thornton, Special Advisory Services. The plaintiffs filed the report as Exhibit 18 in addition to calling Mr. Hards to provide opinion evidence as their economic loss expert.

[255] Mr. Hards relied primarily on subjective information provided by each Mr. Irwin and Mr. Ritchie. He also relied upon the financial documents they provided. Mr. Hards relied upon Schedule A-9 attached to his report that provided a reconciliation of historic financial statements for the years 1999, 2000, 2001, 2002, and 2003 for Affordable. Similarly, Mr. Hards attached schedule C7, being the compiled statement of income and calculation of the percentage of profit for the years ended May 31, 2000, 2001, 2002, and 2003 for Canamex.

[256] I found the evidence given by each of the plaintiffs relating to their income and expenses to be deficient. No proper financial statement was introduced as evidence to support the evidence each of them gave in testimony, or to support assumptions relied upon by Mr. Hards for his economic loss analysis.

[257] I acknowledge at this point the evidence of Mr. Irwin that his computer containing financial information was stolen in the intervening years. Mr. Ritchie also gave evidence that he looked after his own bookkeeping during the first years of his business. However, the financial information for each plaintiff should have been preserved in the form of a copy or as primary documents for each plaintiff to properly introduce as foundational evidence.

[258] Mr. Hards used the following financial information he was given by the plaintiffs:

1. From Canamex, federal T2 Corporation Income Tax Returns for the year ending May 31, 2001 showing net income of $7,856, and for the year ending May 31, 2002, net income of $5,946.

2. From Mr. Ritchie for Affordable, a Statement of Income for each of the years 1999, 2000 and 2001 ending December 31, that shows the following gross profit:

1999 $7,190

2000 $59,931

2001 $84,321

The Role of an expert

[259] Mr. Frankel took issue with a correction Mr. Hards recommended to certain financial information provided by Mr. Ritchie for Affordable. On page 12 of his report, Mr. Hards describes how he had detected an error made by Mr. Ritchie in his financial records because he had included the cost of signs each year in his cost of sales. Mr. Hards brought this issue to Mr. Ritchie’s attention and Mr. Ritchie undertook to have the financial statements corrected for the years 1999 to 2000 to provide more accurate accounting. Mr. Frenkel states that Mr. Hards has therefore compromised himself as an expert for the plaintiffs because he participated in a revision of the evidence on which he then based his opinion.

[260] The courts have generally disapproved of experts who take on a participating role as an advocate, and frown upon any role a litigation expert may fill other than to offer an impartial and independent opinion on matters before the court. The decision of Justice Strathy (as he then was) in Gould v. Western Coal Corp., 2012 ONSC 5184 is a frank reminder of the courts discerning view on such conduct. The objection raised by Mr. Frankel is similar to that concern discussed by Justice Ricchetti in Blatherwick v. Blatherwick, 2015 ONSC 2606, which was released after closing submissions in this case. In paragraphs 352 and 360, Justice Ricchetti discusses how the involvement of an expert in correcting financial information on which to base her or his opinion raises serious questions about that expert’s objectivity and independence. Justice Ricchetti goes on to explain that if that expert’s objectivity and independence is compromised, it goes to the reliability of the assumptions made by the expert, and the degree of reliability that can be placed on her or his opinions.

[261] I find here that Mr. Hards did not conduct himself to the extent of the expert in Blatherwick. Mr. Hards obviously felt compelled to call Mr. Ritchie’s attention to an error that he should have corrected simply to conform with generally accepted accounting principles. Further, Mr. Hards disclosed this corrective measure on page 12 of his report to make it known it to counsel for the City and to the court. Whether Mr. Ritchie made that correction or not may impact the damages calculation elsewhere, but it should not be held against Mr. Hards.

[262] Mr. Hards provided an analysis based on three theories of economic loss for the plaintiffs:

1. Base loss: the difference between the loss of revenue of a grandfathered sign (either in place or removed before May 1, 2002) at existing rates and revenue from a non-grandfathered sign regulated by the 2002 bylaw;

2. Growth loss: revenue that would come from each plaintiff holding back on expanding his footprint in the mobile sign market in Mississauga because of the legislative uncertainty between January 30, 2001 and May 1, 2002. Under this theory, the uncertainty essentially interrupted the growth pattern of each business; and

3. Pricing advantage loss: the loss that occurred in the pricing of a grandfathered sign over a non-grandfathered sign. This theory is based on the concept that a non-grandfathered sign will necessarily be priced at a higher rate than a grandfathered sign to make up for exposure restrictions, and that a grandfathered sign price would rise to match a non-grandfathered sign rental rate.

[263] Mr. Hards factored in a probability of 4% for a sign not surviving over time at its original location as of May 1, 2002. He also factored in a probability of eight sign locations not surviving over the time projected for his damages calculation.

[264] Even if the City did owe a duty of care, I find it was within the power of the plaintiffs to obtain an interim or interlocutory injunction to restrain the City from taking any steps to implement the 2002 bylaw against the plaintiffs, their customers and the 163 grandfathered signs. The case here is unlike Rausch, where the court found that it would be unreasonable for Mr. Rausch to apply to the Normal Farm Practices Protection Board under the Farming and Food Production Protection Act, 1998 to determine if raising his herd of wild boars within the City of Pickering was a normal farm practice, and therefore beyond the reach of the ensnaring bylaw. The plaintiffs retained counsel shortly after enactment of the 2002 bylaw but before the effective date on May 1, 2002. They commenced their action within days after the effective date of the bylaw, and brought a motion within that action for various orders, including injunctive relief. There was no evidence before me about why the plaintiffs did not seek an interim or an interlocutory injunction prior to or on the hearing of the motion under Rule 21 from Justice Howden, even though his reasons indicate that it was part of the relief sought on the motion. Even though Justice Howden did not grant injunctive relief, there is no indication from his decision that he denied it.

[265] It therefore appears that the plaintiffs could have sought injunctive relief at or after the motion on November 17, 2003, as or a term of any adjournment to preserve the status of grandfathered signs and the benefits they conferred. The failure to do so, by each plaintiff, in my view, is a failure to mitigate the damages each of them claims.

[266] I find that the plaintiffs would not have earned any revenue at all beyond August 2002 because they picked up their own signs, thereby removing the causal link between the alleged wrongful enforcement of the 2002 bylaw by the City, and their own loss. Even without the removal of the signs, I find that the plaintiffs would not have been entitled to damages for the base loss calculation or the growth loss claimed because the evidence does not show they diminished their marketing or sales during the critical period.

[267] The plaintiffs should have sought an interlocutory injunction as soon as possible after the effective date of the 2002 bylaw on May 1, 2002 to mitigate their damages. As it took until January 30, 2004 for the motion to be heard and determined, the damages for loss of profit would be limited to $42,000 (Schedule C3) for Canamex and $79,535 (Schedule A3) for Mr. Ritchie based on Mr. Hards calculations for a pricing loss advantage until the grandfathered signs were restored. I do not accept that the plaintiffs would have suffered a loss of revenue for any greater time had this protection been obtained. Subject to any substantial alteration to remove the grandfathered status from the signs in place on May 1, 2002, these amounts would have compensated the plaintiffs for any intervening loss.

[268] Even without obtaining interim relief, I find that the signs of each plaintiff would have required substantial alteration after a minimum of two years and a maximum of four years because of the evidence given by Mr. Irwin that signs behind his garage rotted within a similar period of time. I do not accept that the same sign could stand up to the elements at a customer location with minimal maintenance and repair for the indefinite period claimed by the plaintiffs. I refer to Mr. Shooten’s evidence that more signs than not require maintenance every two years. This degree of maintenance would cross the line from the maintenance and repair of a grandfathered sign to constitute a substantial alteration under the Mississauga bylaw.

[269] I also find it significant that Ms. Duic gave evidence that she would have continued to rent grandfathered signs from Mr. Ritchie, provided they were good looking signs. Over time, Mr. Ritchie would have had to make important changes to the character, appearance or composition of her signs to ensure those signs met Ms. Duic’s standards.

[270] I also find that the Canamex claims for projected economic loss came to an end in 2006 in any event when Mr. Irwin and Canamex exited the sign rental business. He gave evidence that when he left the business, he sold the remainder of his fleet of signs to Mr. Ritchie, including the signs stored behind his garage from 2002.

[271] I also note with interest that Mr. Ritchie incorporated a company in 2006 to carry on Affordable’s sign business. That company is not a party to the action and no financial statements for it were produced in evidence.

CONCLUSION

[272] I would therefore dismiss the action of each plaintiff.

[273] If the City of Mississauga seeks costs, I would invite costs submissions in writing by July 15, 2015, with written submissions in response from the plaintiffs by August 14, 2015. The City shall then have until August 31, 2015 to serve written submissions in reply, if any. Written submissions shall consist of no more than ten (10) pages, not including a bill of costs or supporting case law. All submissions may be filed at the trial coordinators’ office and addressed to my judicial assistant, Sherry McHady, at the Judges’ Chambers in the Brampton Courthouse at 7755 Hurontario Street, in Brampton.

EMERY J

Released: June 25, 2015

CITATION: 118143 Ontario Inc. v. City of Mississauga, 2015 ONSC 3691

COURT FILE NO.: 02-BN-4967

DATE: 2015 06 25

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

118143 ONTARIO INC. CARRYING ON BUSINESS AS CANAMEX PROMOTIONS AND NEIL RITCHIE CARRYING ON BUSINESS AS AFFORDABLE PROTABLES

Plaintiffs

• and -

THE CORPORATION OF THE CITY OF MISSISSAUGA

Defendant

AMENDED

REASONS FOR JUDGMENT

EMERY J

Released: June 25, 2015