COURT FILE NO.: 15-2635

DATE: 20151009

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lynn Foley and Colleen Foley (Applicants)

-and-

The Corporation of the Town of St. Marys (Respondent)

BEFORE: Justice D. R. Aston

COUNSEL: Martha Cook, for the applicant

Eileen P.K. Costello, for the respondent

HEARD: September 15, 2015

ENDORSEMENT

[1] The applicants challenge the heritage designation of their commercial property at 135 Queen Street E., St. Marys. The designation, made by a municipal by-law under the authority of s. 29(1) of the Ontario Heritage Act, RSO 1990 c. O18 (the OHA), includes both the building situate on the property and “all of the original interior features” from 1884. The town claims that the latter specifically includes a wall clock, walnut showcases, counters and mirrors.

[2] One effect of the designation is that the property, as described, cannot be “altered” without the subsequent approval of municipal council. (see s. 33(1) of the OHA)

[3] The applicants ask that the by-law be quashed, or alternatively that the wall clock, walnut showcases, counters and mirrors be severed from the designation.

Was notice of the proposed by-law properly given?

[4] Section 29(3) of the OHA provides that notice of the intention to designate a property “shall be served on the owner of the property” and published in a newspaper having general circulation in the municipality. Under s. 29(4), that notice must contain “an adequate description of the property” and statements and descriptions explaining the cultural heritage value and heritage attributes of the property. It is also to set out the process for objecting to the designation.

[5] In this case, the by-law specifically recites in its preamble that notice was given to the owners and no objection was received. The applicants dispute the fact that they had notice and contend that the by-law is therefore void.

[6] Section 67 of the OHA provides that the required notice under s. 29(3) “is sufficiently given” or delivered if served “by mail to the last known address of the person to whom delivery or service is required to be made”. It can also be personally served or sent by commercial courier to the person’s last known address. In this case the municipality chose to serve its notice by ordinary non-registered mail. Apparently one of the numbers in the postal code of the applicants’ address was incorrect. The applicants depose that the notice was never received by them. The municipality asserts that the notice was never returned by the post office.

[7] The applicants concede that they were aware of the municipality’s intention to designate the property as early as 2007. They do not dispute that the property is unique and has heritage attributes. However, they assert that the extent of the designation to include “all the original interior features” was never properly brought to their attention.

[8] In St. Peter’s Evangelical Lutheran Church v. Ottawa, 1982 60 (SCC), [1982] 2 S.C.R. 616, the Supreme Court of Canada addressed the issue of what consequence flows from imperfect compliance with the notice provision in s. 67 of the OHA. It observed that a municipality’s right to designate a property is not susceptible to challenge on the merits and the only protection for a landowner is procedural. The notice requirements “are not merely a formal requirement but one of substance”. See pages 623 (last paragraph) to 627 for the full discussion of the point.

[9] In my view, the municipality bears the onus of proving the applicants had notice of the proposed by-law and the specifics that would be included in the designation. The municipality has failed to prove that it gave notice in the manner specified in s. 67 of the OHA.

Should the by-law be quashed for failure to give notice in the manner provided in s. 67 of the Act?

[10] The applicants submit that failure to give notice as specified in s. 67 of the OHA renders the by-law void ab initio on the basis that such service is a condition precedent to the municipality’s jurisdiction or authority. The municipality submits that imperfect notice may make the by-law voidable but not void ab initio. It then relies on s. 273(5) of the Municipal Act, 2001, which provides that “any application to quash a by-law, in whole or in part, shall be made within one year after the passing of the by-law”. In this case, the by-law was passed February 27, 2008. The applicants were aware of the designating by-law (and its specifics) no later than August 2009. This application to quash it was not initiated until March 30, 2015.

[11] Counsel for the applicants submits that even if her clients had had actual advance notice of the municipality’s intentions and had been in attendance at the council meeting when the designating by-law was passed that they could nevertheless challenge its validity more than seven years later. I do not accept that submission. It is founded on the assumption that s. 67 is an exhaustive code for the manner by which notice is to be given. However, in St. Peter’s Evangelical Lutheran Church v. Ottawa, S.C.C. supra. at page 627, McIntyre J. writing for the court stated “the manner in which that notice may be given is prescribed in s. 67 of the Act, which is reproduced above. While I would not consider that s. 67 provides the only manner of giving notice, it is my opinion that some positive step in that regard must be taken.” [emphasis added]

[12] In this case, the Town of St. Marys took a positive step in attempting to provide notice by mail. It recognized its notice obligation to the applicants. The error in one number of the six digit postal code is in sharp contrast to a case like St. Peter’s Evangelical Lutheran Church where a municipality does not make a good faith effort to provide advance notice. Though the notice did not comply with s. 67, the applicants acknowledged on cross-examination that they were aware from the notice published in the newspaper of the municipality’s intent to pass the by-law designating the property prior to the adoption of that by-law. Moreover, the applicants in this case had already advised the municipality in prior discussions that they were fully aware of the municipality’s intention to pass a designating by-law and though they were not consenting to such a by-law, they would not be participating in the by-law process. It was hardly surprising to the municipality in these circumstances that it received no objection in response to its notice by mail. There was nothing to alert the municipality to any issue or problem over the notice it had mailed out.

[13] An owner who had actual notice of an intended designating by-law and its particulars (notwithstanding that notice was not strictly in accordance with s. 67) should not be able to rely on lack of notice to quash the by-law. Notice inadequately given may nevertheless have been actually received. It follows that a technically defective notice is an irregularity rather than a prerequisite to the power or jurisdiction of the municipality. I find that the failure to strictly comply with s. 67 of the OHA may render a designating by-law voidable but it does not render it void ab initio.

[14] In this case, the limitation period in s. 273(5) of the Municipal Act, 2001 is dispositive of the application to quash the by-law. See Clements v. Toronto (City), 1959 163 (ON CA), [1960] O.R. 18 (C.A.) at para. 7.

[15] The application to quash the by-law, including the alternative claim to quash it in part by severing “all of the original interior features” from the designation is dismissed.

Do “the original interior features” include the wall clock, walnut showcases, counters and mirrors?

[16] During the course of submissions, counsel for both sides requested this court to address the scope of what the designation entails. The designation of “all of the original interior features” is supplemented by copied photographs in Schedule A to the by-law. Those photos include the wall clock, cabinets and counters now in dispute. The applicants submit that chattels or personal property cannot be the subject of a designation, only fixtures that become part of the realty.

[17] In Part IV of the OHA, the part which confers the municipality’s jurisdiction to designate a property of cultural heritage value, “property” is defined as “real property and includes all buildings and structures thereon”. See s. 26 of the Act. This definition is in contrast to the definition of property in Part II of the Act, which pertains to the Ontario Heritage Trust. Section 4 of the Act states that for the purposes of the Ontario Heritage Trust “property” means “real and personal property”.

[18] I accept the submission of counsel for the applicants that the jurisdiction and authority of a municipality under Part IV is limited to real property, including fixtures. The municipality can include “interior features” of a building in the designation. For example, it would not be uncommon for staircases, doors, elevators, decorative ceilings and a whole host of other “interior features” to be included in a heritage designation. In this case, to the extent that “original interior features” are fixtures, the by-law at issue is not ultra vires. To the extent that such designation includes chattels it is ultra vires. The question is whether the walnut wall mounted cabinets, walnut floor cabinets and wall clock are chattels or fixtures.

[19] The ease with which an item may be removed from the realty and the degree of damage such removal would cause are relevant considerations. In this case, the wall clock can simply be lifted off its hook by one person and it has been removed for cleaning or maintenance from time to time. Counsel for the applicants emphasizes that the items at issue here are easily detached and can be removed without damage to the structure of the building. I accept the evidence of Mr. Frayne, a custom cabinet maker, that: (1) the floor cabinets are only affixed to the building by their own weight and can be disassembled and moved without damage to the building; (2) the wall mounted cabinetry would be more difficult to remove without damage, but it could be done; and (3) the wall clock can easily be lifted off the hook or nail that it hangs on.

[20] The leading cases on the distinction between chattels and fixtures are Stack v. T. Eaton Co., 1902 CarswellOnt 399 (Div. Ct.) and Royal Bank v. Maple Ridge Farmers’ Market Ltd., 1995 CarswellBC 375 (S.C.). Having reviewed what counsel have referred to as the “multi-part tests or rules” from these cases, two principles in particular seem most germane on the facts of this case. They may be paraphrased as follows: 1) objects that are only attached to a building by their own weight are not part of the realty unless there is evidence to show they were intended to be part of the building; and 2) an affixed object will be considered a fixture unless there is evidence to show it is affixed only with the intention of making better use of the chattel itself, and not the improvement of the property generally. Expressed the other way around, an object will be considered a chattel unless there is evidence it is affixed with the intention of improving the property or the premises as a whole.

[21] Though easily removed, the clock is in fact affixed to the wall. It loses its characterization as a chattel if there is evidence to show it was affixed with the purpose or intention of improving the premises as a whole. The evidence here establishes that the clock was designed for the jewelry store at the same time as the counters and cabinets, or shortly thereafter. I find that the ornate appearance and craftsmanship of the clock seems specifically designed to complement the rest of the décor, in particular the walnut and glass cabinets and counters. It is described as a “magnificent tall wall clock mounted by the window on the east wall that has been an important feature of the rich interior ornamentation for as long as can be remembered”. It is reasonable to infer that the clock was a showpiece item calculated to add to the ambience of a store selling fine jewelry.

[22] There is no cogent evidence to the contrary. The weight of the evidence does not establish that the wall clock was affixed “only with the intention of making better use of the chattel itself and not for the improvement of the property generally”. On balance, I find the wall clock is a fixture in the context of the OHA.

[23] For similar reasons, the cabinets, counters, showcases and mirrors are also fixtures. The evidence establishes that they were designed and installed for the express purpose of attracting customers and selling jewelry through an enhancement of the realty. The wall clock, cabinets and counters were purposefully designed and built into the store for a specific purpose. They were used for that purpose and never moved again in over 100 years.

[24] The general description of “all of the original interior features” in the designating by-law is not ultra vires on its face. Though that description must be understood to include only fixtures, the specific items at issue on this application are fixtures, not chattels.

[25] The application is therefore dismissed.

[26] If counsel are unable to agree on costs, brief written submissions may be made within the next 20 days.

“Justice D. R. Aston”

Justice D. R. Aston

Date: October 9, 2015