Superior Court of Justice - Ontario

COURT FILE NO.: CV-12-0189 DATE: 2016-09-20

B E T W E E N:

Ian Bodnar, Plaintiff

• and - The Corporation of the City of Thunder Bay, Defendant

COUNSEL: Michael Cupello, for the Plaintiff Dawne Latta, for the Defendant

HEARD: August 24, 2016, at Thunder Bay, Ontario

BEFORE: Mr. Justice W.D. Newton

Decision On Motion

Overview

[1] The defendant City moves for summary judgment dismissing Mr. Bodnar’s claim on the ground that the claim is res judicata (issue estoppel) or otherwise an abuse of process, arguing that the issue in this proceeding has already been decided in Bodnar v. Thunder Bay (City), [2014] O.M.B.D. No. 705, a September 10, 2014 decision of the Ontario Municipal Board (the “Decision”).

The Issue in this Action

[2] In this action, Mr. Bodnar seeks a declaration as to which of 2 Rural Access Rd. permits is “the original and true copy of the permit; and that the benefits from that permit remain valid and subsisting.”

[3] The permit process starts with the applicant, Mr. Bodnar in this case, completing an application which then, after approval, becomes the permit. The application was completed by Mr. Bodnar and is in his hand writing and was approved in 1996. The copy of the application in the City’s file states that the purpose of the application is to allow access to lots 64, 63, and 62. The application in Mr. Bodnar’s possession is identical but for the addition, after 62, of the following additional lot numbers: 65, 66, 67, 68, 69, 70, 45, 46, 47, 48, 49, 50, and 51. What is also different is that Mr. Bodnar’s version has for contractor’s name “unknown at present” whereas that space in the copy in the City’s file is blank.

[4] The inference is either that the City was negligent in its record-keeping or that Mr. Bodnar altered the application after the fact.

[5] In the statement of claim, Mr. Bodnar asserts the following additional facts.

[6] After the approval of whichever application was approved, the City passed a new official plan prohibiting new roads or extensions in the area covered by the 1996 permit.

[7] Mr. Bodnar sought an amendment to the official plan.

[8] On October 18, 2010, City Council passed a resolution which provided that a portion of the official plan “be amended to include Red Pine Way fronting the 16 lots… to recognize the approval historically granted to the applicant under Bylaw 239 – 94 prior to the repeal of that bylaw.”

[9] Subsequently, at a City Council meeting held without notice to Mr. Bodnar, the proposed bylaw amendment was defeated following a closed session.

The Issue at the O.M.B. and the Resulting Decision

The Issue

[10] In the Decision, the Board identified the main issue before it as follows:

3 The main issue for the Board in this appeal is whether it would be appropriate to amend the City’s Official Plan to allow the road extension based upon a permit that was issued by the City to the Appellant for an extension of Red Pine Way in 1996. In addition, the Board must consider the proposed Official Plan Amendment in the context of the provisions of the Planning Act (“Act”), the Provincial Policy Statement (“PPS”), and in relation to the direction and intent of the Official Plan.

[11] The Board also identified three sub-issues as critical to its decision:

31 After considering the evidence in relation to this appeal, the Board’s determinations regarding the following three issues are critical for making this decision. First, has it been demonstrated that the permit issued for the extension of Red Pine way is still valid and in force, second what is the extent of the permission for extension of Red Pine Way given to the Appellants, and third, is there a planning rationale to support the Official Plan Amendment whether or not the permission to extend the road is valid?

Mr. Bodnar’s Position

[12] Mr. Cupello, for the Appellants, indicated that he would not call expert planning evidence because Mr. Bodnar’s case “depended upon recognition of a historical approval given by the City for the extension of Red Pine Way” (para. 6). Mr. Bodnar’s position was that he had a valid permit for the extension:

[T]he Appellants contend that they have a valid permit for the extension. They maintain that the permit issued by the City in 1996 allowed for the construction of Red Pine Way to the Lawrence Road extension. Once constructed and assumed by the City, it would provide frontage on an opened public road for the 14 lots that they want to develop and the two lots under other ownership. (para. 24)

[13] Mr. Cupello submitted that the existence of the permit was a sufficient basis on which to amend the Official Plan. He relied on Kim v. Mississauga (City), [1996] O.J. No. 2534 “in which the Court determined that an Interim Control By-law could not prevent the construction of a building for which a building permit for a part of the construction had been issued” (para. 33).

[14] Mr. Cupello further argued that if the Board could not approve the full extension then it “at least approve the Amendment to allow the extension to provide access to the end of Lot 64” (para. 54).

The City’s Position

[15] The City took the position that the validity of the permit was in question and that, if valid, the permit would only provide access to lots 62, 63, and 64 (para. 30). The City also took the position that the validity of the permit was beyond the Board’s jurisdiction (para. 32). Mr. Cupello did not strongly oppose the City’s position on the jurisdictional issue with regards to the validity of the permit (para. 33).

The Board’s Decision

[16] The Board found that the permit was issued under By-law No. 239-1984 and enacted under the Municipal Act (para. 39). The Board stated that “the issue of the validity and enforceability of the permit involves questions of law that are beyond the Board’s jurisdiction” (para. 39). The Board went on to state at para. 40:

If there is a valid permission, then the Appellants may have the right to extend the road. However, for the purposes of making a decision about this appeal, the Board must be convinced that a valid permission exists in order to consider approving the Official Plan Amendment. The Board cannot come to this conclusion based upon the evidence that has been provided.

[17] The Board stated that the permit allowed access to Lot 64, but found that, even if valid, there was no basis for access to all lots as submitted by the Appellants (para. 54). The Board also stated that if the validity of the permit was proven, “Council would be in a position to consider a revised application by the Appellants…” (para. 72).

[18] The Board concluded as follows:

78 From the evidence at this hearing the Board has concluded that determination of the validity of the permit is not within the Board’s jurisdiction. The Board cannot base its approval on the historic permission given, particularly without confirmation that there is a valid permission to extend Red Pine Way. Even if the permission to extend the road is valid, the Board would need sufficient planning evidence to ensure that the Official Plan Amendment was appropriate.

79 Furthermore, the evidence has not established that the past permission given to the Appellants would allow the extension of Red Pine Way beyond the west limit of Lot 64.

80 The Board has no planning basis for approving either the proposed Official Plan Amendment or a revised Official Plan Amendment which would allow the road extension to Lot 64. The Planning evidence at the hearing conclusively demonstrated that the proposed Official Plan Amendment is not consistent with the PPS and does not comply with a number of objectives and provisions of the City’s Official Plan.

81 Based upon the above considerations, the Board finds that the proposed Official Plan Amendment is not appropriate and cannot be approved. The Board will dismiss the appeal and not approve the Official Plan Amendment. [emphasis added]

The Law

Issue Estoppel and Abuse of Process – General Principles

[19] In Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S. C. R. 77 the Court dealt with both issue estoppel and abuse of process.

[20] Arbour J. described issue estoppel as follows:

23 Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel), which precludes the relitigation of issues previously decided in court in another proceeding. For issue estoppel to be successfully invoked, three preconditions must be met: (1) the issue must be the same as the one decided in the prior decision; (2) the prior judicial decision must have been final; and (3) the parties to both proceedings must be the same, or their privies (Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC 44, at para. 25, per Binnie J.).

[21] Arbour J. also observed that “[j]udges have an inherent and residual discretion to prevent an abuse of the courts process” (at para 35) and that the doctrine of abuse of process “is used in a variety of legal contexts” (at para. 36). Further, she stated:

37 …Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where the strict requirements of issue estoppel (typically the privity/mutuality requirements) are not met, but where allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice. (See, for example, Franco v. White (2001), 53 O.R. (3d) 391 (C.A.); Bomac Construction Ltd. v. Stevenson, [1986] 5 W.W.R. 21 (Sask. C.A.); and Bjarnarson v. Government of Manitoba (1987), 38 D.L.R. (4th) 32 (Man. Q.B.), aff'd (1987), 21 C.P.C. (2d) 302 (Man. C.A.).)(at para 37)

51 Rather than focus on the motive or status of the parties, the doctrine of abuse of process concentrates on the integrity of the adjudicative process. Three preliminary observations are useful in that respect. First, there can be no assumption that relitigation will yield a more accurate result than the original proceeding. Second, if the same result is reached in the subsequent proceeding, the relitigation will prove to have been a waste of judicial resources as well as an unnecessary expense for the parties and possibly an additional hardship for some witnesses. Finally, if the result in the subsequent proceeding is different from the conclusion reached in the first on the very same issue, the inconsistency, in and of itself, will undermine the credibility of the entire judicial process, thereby diminishing its authority, its credibility and its aim of finality.

52 In contrast, proper review by way of appeal increases confidence in the ultimate result and affirms both the authority of the process as well as the finality of the result. It is therefore apparent that [page110] from the system’s point of view, relitigation carries serious detrimental effects and should be avoided unless the circumstances dictate that relitigation is in fact necessary to enhance the credibility and the effectiveness of the adjudicative process as a whole. There may be instances where relitigation will enhance, rather than impeach, the integrity of the judicial system, for example: (1) when the first proceeding is tainted by fraud or dishonesty; (2) when fresh, new evidence, previously unavailable, conclusively impeaches the original results; or (3) when fairness dictates that the original result should not be binding in the new context. This was stated unequivocally by this Court in Danyluk, supra, at para. 80.

53 The discretionary factors that apply to prevent the doctrine of issue estoppel from operating in an unjust or unfair way are equally available to prevent the doctrine of abuse of process from achieving a similar undesirable result. There are many circumstances in which the bar against relitigation, either through the doctrine of res judicata or that of abuse of process, would create unfairness. If, for instance, the stakes in the original proceeding were too minor to generate a full and robust response, while the subsequent stakes were considerable, fairness would dictate that the administration of justice would be better served by permitting the second proceeding to go forward than by insisting that finality should prevail. An inadequate incentive to defend, the discovery of new evidence in appropriate circumstances, or a tainted original process may all overcome the interest in maintaining the finality of the original decision (Danyluk, supra, at para. 51; Franco, supra, at para. 55).[emphasis added]

[22] The parties agree that the Decision is final and that the parties before that board and in this action are the same. Before further analysis can be undertaken, the issue in this action and the issue before the Board must be ascertained.

Analysis and Disposition

[23] This action will determine whether the permit allowed an extension of the road to three or to 14 lots.

[24] In its reasons, the Ontario Municipal Board acknowledged that it did not have jurisdiction to determine that issue (See para. 68 of the Decision above). The Board also acknowledged that the issue of which permit was valid was before the Courts. Nevertheless, the Board made comments, which I regard as obiter, that “the Board cannot conclude that the permit approved the full-length of the construction… and to access all of the lots” (See para. 54 of the Decision above). The conclusion that this comment is obiter is buttressed by the Board’s statement that “… The Board expects that if the validity of permission to extend the road is proven, Counsel would be in position to consider a revised application….” (See para. 72 of the Decision above).

[25] In Jain v. Valani, (2011) ONSC 1156, G.R. Strathy J., in discussing the Supreme Court of Canada decision of Danyliuk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, observed:

[22] The Supreme Court summarized the purpose of the law of issue estoppel at para. 18:

The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. The appellant chose the ESA as her forum. She lost. An issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.

[23] Similar observations were made by the Ontario Court of Appeal in Rasanen v. Rosemount Instruments Ltd., above, at para. 27. The Court of Appeal went on to describe, at para. 29, the nature of the inquiry that the court should make in determining whether the requirements of issue estoppel have been met:

The proper inquiry in deciding whether the requirements have been met is whether the question to be decided in these proceedings is the same as was contested in the earlier proceedings and was, moreover, so fundamental to the decision that it could not stand without the determination of that question: Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248 at 254-55, 47 D.L.R. (3d) 544, per Dickson J.; Spens v. Inland Revenue Com'rs, [1970] 3 All E.R. 295 (Ch. Div.) at 301, per Megarry J., quoting Bower and Turner, supra, at pp. 181-182.)

[24] In Angle v. Minister of National Revenue, referred to by the Court of Appeal in Rasanen, above, Dickson J. stated at 255 that “[I]t will not suffice if the question arose collaterally or incidentally in the earlier proceedings or is one which must be inferred by argument from the judgment.” He said that the question out of which the estoppel arises must have been fundamental to the decision arrived at in the earlier proceedings. [emphasis added]

[26] Since the Board did not have jurisdiction to determine which permit was valid, I find that it’s conclusions with respect to the validity of the permit are not “fundamental” to the Board’s decision. In my opinion, this analysis with respect to issue estoppel must also apply, to the abuse of process doctrine. That doctrine, as noted, is focused on the integrity of the adjudicative process. While the plaintiff led evidence before the Board attempting to prove that the permit it wanted was valid, their case was framed on the propriety of the City resiling from its prior resolution without notice to Mr. Bodnar. The Board approached the issue from a pure planning perspective. It is unfortunate that the parties wasted resources in leading evidence on this issue before the Board. That should not preclude the plaintiff from having a just determination of this issue on the merits in this court. Therefore, the City’s motion for summary judgment dismissing the plaintiff’s action on the grounds of issue estoppel and abuse of process is dismissed.

[27] If the parties are unable to agree to costs within 30 days, then the parties shall submit brief written submissions on costs within 45 days from the release of these reasons. Costs submissions are to be limited to three pages plus costs outline. If no cost submissions are received within 45 days, then costs will be deemed settled.

[28] Should the parties wish to arrange a short teleconference to set a schedule for the completion of the balance of the defendant’s summary judgment motion then they may do so by contacting the trial coordinator.

“Original signed by”____ The Hon. Mr. Justice W.D. Newton

Released: September 20, 2016