Gemterra Developments Corporation v. City of Toronto, 2017 ONSC 1776

COURT FILE NO.: CV-15-534507 DATE: 20170320

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

GEMTERRA DEVELOPMENTS CORPORATION Applicant – and – CITY OF TORONTO Respondent

COUNSEL: Mark Flowers and Kyle Gossen for the Applicant Brendan O’Callaghan and Tim Carre for the Respondent

HEARD: March 2, 2017

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] In this application, Gemterra Developments Corporation (“Gemterra”) sues the City of Toronto for repayment of $408,400, which it says was an overpayment of park levies imposed under the City’s Park Levy By-law. Gemterra also claims pre-judgment and post-judgment interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43.

[2] Gemterra owns a property near Sheppard Ave. East and Kennedy Road in the City, upon which it has built apartments, townhouses, and an amenities building. The size of the property is 1.3 hectares. Gemterra developed the property in two phases. Phase 1, which was completed in 2015, has a size of 0.74 hectares. Construction of Phase 2, which then began, has a size of 0.59 hectares.

[3] In this application, the issue to be decided is whether the two Phases of construction constituted one or two “development sites.” The number of development sites matters because Gemterra was obliged to pay park levies, and for developments larger than 1.0 hectares, the levy rate is 15%, which is what the City charged Gemterra for both Phases 1 and 2. For smaller development sites, the levy rate is 10%, which is what Gemterra submits it should have been charged for both Phases.

[4] Gemterra brings this application for a declaration that the park levy charge should have been 10%. Because of the intervention of a limitation period, it seeks a refund only with respect to the alleged overpayment for Phase 2. It seeks a refund of $408,400 plus pre and post-judgment interest under the Courts of Justice Act, R.S.O. 1990, c. 34.

[5] For the reasons that follow, I dismiss Gemterra’s application.

B. Statutory Provisions

[6] The relevant statutory provisions from the Planning Act, R.S.O. 1990, c. P.13 and the Building Code Act, 1992, S.O. 1992, c.23 are set out in Schedule “A” to these Reasons for Decision.

[7] The City of Toronto has a Park Levy By-law. More particular, the City enacted Article III of Chapter 415 of the Toronto Municipal Code, "Conveyance of Land for Park Purposes as a Condition of Development" under which it charges park levies pursuant to s. 42 of the Planning Act.

[8] Section 42 of the Planning Act empowers a municipality, by by-law, to require a developer of land to convey a portion of lands for parks or to require the developer to require a payment in lieu of a conveyance. This payment is commonly referred to as a “park levy.”

[9] Under Toronto’s Park Levy By-law, the amount of the levy is determined by applying a rate to the appraised value of the land. The By-law sets the rate for the park levy determined by the size of the "development site." For properties less than one hectare in size, the park levy rate is 10% of the appraised value of the land, whereas for properties 1 hectare to 5 hectares in size, the park levy is 15% of the appraised value of the land.

[10] For present purposes, the relevant provisions of the Park Levy By-law (Article III of Chapter 415 of the Toronto Municipal Code) are set out below:

ARTICLE III: Conveyance of Land for Park Purposes as a Condition of Development

(Adopted 2007-12-13 by By-law No. 1420-200713; amended 2010-08-27 by By-law No. 1020- 201014]

§ 415-21. Definitions.

As used in this article, the following terms shall have the meanings indicated:

BUILDING PERMIT APPLICATION-An application submitted to and accepted by the Chief Building Official for an above grade building permit that complies with the applicable zoning by-law and with all technical requirements of the Building Code Act, 1992 including payment of all applicable fees.

DEVELOPMENT

A. The construction, erection or placing of one or more buildings or structures on land.

B. The making of an addition or alteration to a building or structure that has the effect of substantially increasing the size or usability of the building or structure.

C. The redevelopment of land through the removal of one or more buildings or structures to permit such development.

D. The laying out and establishing of a commercial parking lot.

E. The conversion of a building or structure originally proposed for an exempted or nonresidential use, to another use.

§ 415-22. Conveyance of land for parks purposes.

As a condition of development of land the owner of the land shall convey or cause to be conveyed to the City, land for park or other public recreational purposes in the following manner:

A. For residential uses, land equal to 5 percent of the land to be developed.

B. For non-residential uses, land equal to 2 percent of the land to be developed.

C. Where the development of a single parcel of land is proposed for both residential uses and non-residential uses, the respective rates set out in §§ 415-22A, 415-22B and 415-23 will be allocated proportionally according to the floor space of the respective uses.

§ 415-23. Alternative rate.

Despite § 415-22A, as a condition of development of land for residential use in a parkland acquisition priority area, the owner of the land shall convey or cause to be conveyed to the City, the greater of the amount set out in § 415-22A, or land at a rate of 0.4 hectares for each 300 dwelling units proposed provided that:

A. For sites less than one hectare in size, the parkland dedication will not exceed 10 percent of the development site, net of any conveyances for public road purposes.

B. For sites one hectare to five hectares in size, the parkland dedication will not exceed 15 percent of the development site, net of any conveyances for public road purposes.

C. For sites greater than five hectares in size, the parkland dedication will not exceed 20 percent of the development site, net of any conveyances for public road purposes.

§ 415-24. Cash-in-lieu of land dedication.

A. Despite§ 415-22, where the size, shape or location of land proposed for parkland dedication is deemed by Council to be unsuitable for parks or public recreation purposes, Council may require payment of cash-in-lieu of land.

B. Despite§ 415-23, where the size, shape or location of land proposed for parkland dedication in parkland acquisition priority area is deemed by Council to be unsuitable for parks or public recreation purposes, Council may require payment of cash-in-lieu of land, provided:

(1) that the value of the cash-in-lieu does not exceed:

(a) Ten percent of the value of the development site, net of any conveyances for public road purposes, for sites less than one hectare in size.

(b) Fifteen percent of the value of the development site, net of any conveyances for public road purposes, for sites one hectare to five hectares in size.

(c) Twenty percent of the value of the development site, net of any conveyances for public road purposes, for sites over five hectares in size.

(2) In no case, will the residential parkland dedication, cash-in-lieu or combination thereof, be less than 5 percent of the development site or the value of the development site, net of any conveyances for public road purposes.

§ 415-25. Cash-in-lieu; allocation.

A. Any payment of cash-in-lieu of land in accordance with § 415-24A will be used for the acquisition of new parkland or the improvement of parks and recreational facilities in accordance with the following allocation and the cash-in-lieu allocation policy:

§ 415-27. Administrative authority.

The General Manager Parks, Forestry and Recreation is authorized to determine the specific combination of land and/or cash in lieu of land on a site specific basis in accordance with this article and the City's Official Plan policies.

§ 415-28. Timing of conveyance or payment.

The conveyance of land or payments required to be made under this article shall be made prior to the issuance of the first above-ground building permit for the land to be developed.

§ 415-29. Valuation of land.

A. All appraisals of land value shall be carried out under the direction of the Executive Director, Facilities and Real Estate and shall be determined in accordance with generally accepted appraisal principles.

B. The cost of any appraisal undertaken by the City shall be paid for by the owner.

C. The value of the land shall be determined as of the day before the day of issuance of the first building permit in respect of the development.

D. The conveyance of land or payment of cash in lieu of land shall be taken into consideration in determining an appropriate credit with respect to the amount of money or land which may be required in connection with the further development of the subject lands:

(1) Where land has been conveyed to the City for park or other public recreational purposes, exclusive of highways and floodplain lands;

(2) Where a payment of cash in lieu of such conveyance has been received by the City in accordance with this article; (3) Pursuant to the provisions of sections 42, 51.1 or 53 of the Planning Act.

C. Factual Background

[11] In September 2010, Gemterra acquired a 1.3 hectare-sized parcel of land near the intersection of Sheppard Ave. East and Kennedy Road in the City of Toronto for the purposes of a residential construction project.

[12] Gemterra decided to construct its project in two phases. Phase 1 has a site of 0.74 hectares in size. Phase 2, the site adjacent to the east, has a size of 0.59 hectares.

[13] The development of Phase 1 was to be comprised of: a 20-storey 282-unit apartment building, 14 townhouse units, and an amenities building. The development of Phase 2 was to be comprised of: a 21-storey 262-unit apartment building and 20 townhouse units. Phases 1 and 2 share the amenities building constructed on Phase 1. They also share a common driveway and a common underground parking garage.

[14] On May 5, 2011, Gemterra applied for minor variances in respect of the Phase 1 and Phase 2 sites.

[15] On May 12, 2011, Gemterra applied for site plan approval for Phases 1 and 2. The covering letter to the application noted, however, that the City would be issuing site plan approvals for the two Phases separately.

[16] On November 28, 2011, Gemterra applied for a zoning by-law amendment for the Phase 1 and 2 lands and for adjacent lands to the south, known as the Agincourt Mall lands. During the zoning by-law amendment process, Gemterra asked to be relieved of park levies but the City’s lawyer advised that he would only support the requested amendment with a park levy based on a 15% cap. Throughout the zoning amendment process both Gemterra and the City treated Gemterra's project as a single development of a 1.3 hectare-sized site with construction to proceed in phases.

[17] On February 3, 2012, the Ontario Municipal Board (“OMB”) approved the minor variances.

[18] On July 13, 2012, the zoning by-law amendment was approved by City Council.

[19] On January 15, 2013, pursuant to s. 8 of the Building Code Act, Gemterra applied for a building permit for Phase 1.

[20] On January 17, 2013, the City’s Planning Department wrote to Gemterra advising that the City had approved the site plan for Phase 1.

[21] In response to the Phase 1 building permit application, the City’s Building Division requested the City’s Real Estate Services Division to appraise Phase 1 to determine the amount of the the park levy, and GSI Real Estate & Planning Advisors Inc. was retained to prepare an appraisal. It is the practice of the City to appraise the property based on the size of the improvements. With respect to a residential apartment this means the property is appraised based on square footage of the building being constructed on the land. In other words, the size of the land itself is not a direct factor in the appraisal.

[22] On January 21, 2013, Brian Varner, Manager, Policy & Appraisal Services in the City’s Real Estate Services Division, wrote Gemterra and requested payment of $1,104,750 for the Phase 1 park levy. The levy was calculated based on the Phase 1 area of 0.74 hectares and “an assumed total development site area” of 1.3 hectares. The levy was calculated using a 15% rate plus an appraisal fee and HST.

[23] On January 30, 2013, the City issued a conditional building permit for Phase 1, which allowed construction to get underway. The conditional permit agreement between Gemterra and the City used the legal description for the 1.3-hectare parcel of land. Gemterra paid the $1,104,750.00 park levy for Phase 1.

[24] On March 12, 2013, Gemterra and the City signed a Site Plan Agreement for Phase 1.

[25] On November 6, 2014, the City issued a final building permit for Phase 1 and construction was completed.

[26] On December 9, 2014, Gemterra applied for a building permit for Phase 2. At the time of this second permit application, Gemterra continued to be the owner of the 1.3 hectare-sized property.

[27] In response to the building permit application for Phase 2, the City required Gemterra to submit separate applications for each of the three municipal addresses that comprised Phase 2; namely: 195 Bonis Ave. (the apartment building); 205 Bonis Ave. (a townhouse block); and, 215 Bonis Ave. (a townhouse block).

[28] The City’s Building Division sent the City’s Real Estate Services Division three separate appraisal requests for 195 Bonis Ave., 205 Bonis Ave., and 215 Bonis Ave. respectively.

[29] On February 12, 2015, Mr. Varner wrote Gemterra and requested the payment of park levies of $889,350 for 195 Bonis Ave., $136,200 for 205 Bonis Ave., and $199,650 for 215 Bonis Ave.

[30] The Phase 2 appraisals were based on the value of the three segments of Phase 2 as of 2015, as opposed to the value as of the day before the first building permit was issued for Phase 1 on January 30, 2013. The levies were calculated using a 15% rate plus an appraisal fee and HST.

[31] On May 26, 2015, a Condominium Plan for Phase 1 was registered in the Land Registry Office.

[32] On July 28, 2015, the City issued a conditional building permit for Phase 2, and Gemterra paid $1,238,163.24 on account of park levies. The payment was accompanied by a letter stating that the levies were being paid without prejudice to Gemterra’s position that it overpaid by $408,400.

[33] On July 30, 2015, the City’s Planning Department wrote to Gemterra that the City had approved the site plan for Phase 2.

[34] On January 22, 2016, Gemterra signed a Site Plan Agreement with the City for Phase 2. The conditional permit agreement between Gemterra and the City used the legal description for the 1.3-hectare parcel of land.

[35] It may be noted that the various planning approvals in the case at bar involved different sized landholdings. The zoning by-law amendment applied to Gemterra’s land and the adjacent Agincourt Mall lands, which is approximately 12.4 hectares in size. The minor variances were for all of Gemterra’s land but the site plan approvals were for the Phase 1 and Phase 2 lands discretely as were the building permit applications. In this regard, it may be noted that Gemterra applied for a consolidated site plan approval but the City granted the site plans separately.

D. Discussion and Analysis

1. The City’s Jurisdictional Argument

[36] The City makes a jurisdictional argument, which I need not and will not resolve to determine this application.

[37] As I understand the City’s jurisdictional argument, the essence of it is that the application before the Court, which is made pursuant to rule 14 of the *Rules of Civil Procedure*, R.R.O. 1990, Reg. 194, for the interpretation of a by-law, should be treated as an appeal of a decision of the Chief Building Officer under s. 25 of the *Building Code Act*, which states:

Appeal to court

25. (1) A person who considers themself aggrieved by an order or decision made by the chief building official, a registered code agency or an inspector under this Act (except a decision under subsection 8 (3) not to issue a conditional permit) may appeal the order or decision to the Superior Court of Justice within 20 days after the order or decision is made.

Extension of time

2. A judge to whom an appeal is made may, upon such conditions as the judge considers appropriate, extend the time for making the appeal before or after the time set out in subsection (1), if the judge is satisfied that there is reasonable grounds for the appeal and for applying for the extension.

[38] If the application is treated as an appeal under s. 25 of the Building Code Act, then, according to the City, as a matter of the standard of appellate review, the court is obliged to show deference to the specialized expertise of the Chief Building Officer in making the necessary mixed determinations of fact and law required to interpret and to apply the City’s Park Levy By-law. The City submits, therefore, that the Chief Building Officer’s decision was both reasonable and correct and, therefore, Gemterra’s application should be dismissed.

[39] Gemterra submits that s. 25 of the Building Code Act does not apply to the present situation because the application does not concern “an order or decision made by the chief building official, a registered code agency or an inspector,” and, rather, the application simply seeks “the interpretation of a … municipal by-law” under rule 14.05(3)(d) of the *Rules of Civil Procedure*. It submits that it is the City, not the Chief Building Officer, that interpreted its Park Levy By-law and the City’s interpretation and application of the By-law was legally incorrect. In the alternative, Gemterra submits that if this application is treated as an appeal from the Chief Building Officer, the result of the appeal is the same as the outcome of the application because a reviewable error was made by the Chief Building Officer, whose decision was incorrect, and the City should be ordered to refund the overpayment for the park levies for Phase 2.

[40] For the purposes of deciding this application, I need not resolve the jurisdictional argument. I rather assume, without deciding, that the application simply seeks an interpretation of the City’s Park Levy By-law. I shall consider Gemterra’s arguments about interpretation on their merits and I shall ignore the City’s jurisdictional argument.

2. Gemterra’s Argument

[41] Gemterra’s substantive argument is that “development site” is not defined in the Park Levy By-law, but that term should be defined to correspond with the word “development” which is defined in the By-law to include, among other things, “the construction, erection or placing of one or more buildings or structures on land.” Gemterra submits, therefore, that the requirement to pay a park levy is triggered by the “construction, erection or placing of one or more buildings or structures on land,” which, in turn, is triggered by the issuance of a building permit.

[42] Gemterra observes that none of the other development approvals; i.e., official plans, zoning by-laws, minor variances, subdivisions, site plans, etc., actually allow construction, but a building permit allows a site to be constructed with one or more buildings, and, thus, the idea of a development site must be connected to the building permit process. Therefore, Gemterra submits that it is the size of the land for which a building permit is issued that determines the size of the development site.

[43] Gemterra submits that this interpretation is confirmed by the provisions of the Park Levy By-law that address the appraisal of the land for the development site. With respect to cash-in-lieu payments under the By-law, the word “value” is used specifically in reference to the “development site,” and the By-law states that “the value of the land shall be determined as of the day before the day of issuance of the first building permit in respect of the development.” Thus, Gemterra submits that the “first building permit in respect of the development” defines the “development site”, as opposed to some other site, and the City must determine the value of the entire “development site” as of the day before it issues the first building permit in respect of the development on that development site.

[44] Gemterra submits that its interpretation of the By-law is consistent with some but not all of the conduct of the City in interpreting and applying its Park Levy By-law. Gemterra notes that the City charges the park levy when a building permit is issued and it appraises the land as of the date of the issuance of the building permit, which is what the City did for Phases 1 and 2. This conduct is consistent with the idea that the building permit defines what a development site is. Gemterra notes, however, that proceeding as it did, which was to treat the two Phases as separate development sites for the purposes of the issuance of the building permit and for the purposes of appraising the land, the City breached its obligation to have the land appraised as of the time of the issuance of the first building permit. In other words, if the City viewed the Phase 1 and Phase 2 Development Sites as a single “development site,” it was required, by the Park Levy By-law, to determine the value of both the Phase 1 and the Phase 2 lands as of January 29, 2013, when the first building permit was issued for the development site.

[45] Gemterra submits that if the City had intended that the term “development site” was not to encompass phases, it could have easily stated this in the Park Levy By-law. For example, the City could have used language similar to that found in §492-2 of Chapter 492 of the City’s Municipal Code, which concerns green roofs:

… no person shall construct a green roof or cause a green roof to be constructed unless a permit therefor has been issued by the Chief Building Official. Notwithstanding the foregoing, where a development consists of two or more buildings under a Complete Site Plan Application and the buildings are to be constructed on a phased basis, the first phase of the development shall comply with the Green Roof requirements of this chapter for the building permit being issued and any Green Roof area provided in excess of the minimum Green Roof area required may be applied to subsequent phases of the development.

[46] Relying on L.D.C.M. Investments Ltd. v. Newcastle (Town), 1975 CarswellOnt 392 (Div. Ct.) at para. 33; Thunder Bay (City) v. Potts, 1982 CarswellOnt 820 (H.C.J.) at paras. 21-22; Seguin (Township) v. Grin, 2004 CarswellOnt 2895 (S.C.J.) at para. 36, rev’d on other grounds 2005 CarswellOnt 1459 (C.A.), Gemterra submits that where the provisions of a by-law “are of doubtful meaning in their application to the lands in question, that doubt must be resolved in favour of the owner.”

[47] Further noting that a park levy is a form of tax, relying on OMERS Realty Management Corp. v. Peel (Regional Municipality), 2000 CarswellOnt 3138 (S.C.J.) at para. 41, aff’d 2001 CarswellOnt 2503 (C.A.); Ontario Cancer Treatment & Research Foundation v. Ottawa (City), 1998 CarswellOnt 495 (C.A.) at para. 96; Ontario Property Assessment Corp. v. Praxair Canada Inc., 2002 CarswellOnt 75 (Div. Ct.) at para. 30; Ambler v. Municipal Property Assessment Corp., Region No. 07, 2006 CarswellOnt 3258 (S.C.J.) at para. 14, Gemterra submits that where there is a lack of clarity in the interpretation of the provisions of a taxing statute, the statute is to be interpreted in favour of the taxpayer.

3. The Principles of Statutory Interpretation

[48] The case at bar is a case of statutory interpretation, and in this section of my Reasons for Decision, I shall set out the principles of statutory interpretation that I shall apply to the analysis below.

[49] When a court is called upon to interpret a statute, its task is to discover the intention of the legislator as expressed in the language of the statute: R. v. Dubois, [1935] S.C.R. 378 at p. 381; Goldman v. The Queen, [1980] 1 S.C.R. 976. Legislation shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects: Legislation Act, S.O. 2006, c. 21, Sched. F, s. 64 (1).

[50] The approach to interpretation is teleological or purposeful and to interpret a statute, the words of the statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the statute, the object of the statute, and the intention of the legislator: Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27 at paras. 18-23; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559.

[51] To interpret a statute, the court should look at the Act as a whole and attempt to find an interpretation that is in harmony with the entire legislative scheme including the regulations and forms: Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550 at p. 559; Mavi v. Canada (Attorney General) (2009), 98 O.R. (3d) 1 (C.A.) at paras. 92-96; Re Can. Western Natural Gas Co. Ltd. and Shell Canada Resources Ltd. (1980), 118 D.L.R. (3d) 607 (Alta. C.A.).

[52] To interpret a statute, the court must, in every case, undertake a contextual and purposive analysis to determine whether real ambiguity exists; i.e., whether the language is reasonably capable of more than one meaning: Bell ExpressVu Limited Partnership v. Rex, supra at para. 30; York (Regional Municipality) v. Winlow (2009), 99 O.R. (3d) 337 (C.A.) at paras. 42-43.

[53] If the words of the statute, when read in their context including the purpose and objective of the statute, are precise and unambiguous, then the words should be given their natural and ordinary sense: Grey v. Pearson (1857), 6 H.L.C. 61; Sussex Peerage Case (1844), 11 Cl. & F. 85. The court's role is to interpret the statute - not enact it; if the sense of the words of the statute is clear and unambiguous, the court must interpret the words literally and in accordance with their plain meaning even if the consequences are absurd or unjust: R. v. McIntosh, [1995] 1 S.C.R. 686 at p. 704; R. v. Huggins, 2010 ONCA 746 at paras. 17-18; Victoria (City) v. Bishop of Vancouver Island, supra.

[54] A genuine or real ambiguity in a statute means that after considering the words of the statute in their entire context, they are reasonably capable of having more than one meaning in which case the court may resort to external interpretive aids and other principles of interpretation to resolve the ambiguity: Bell ExpressVu Ltd. Partnership v. Rex, supra at paras. 28-29; Canadian Oxy Chemicals Ltd. v. Canada (Attorney General), [1999] 1 S.C.R. 743 at para. 14; Zacharias v. Zurich Insurance Co., 2013 ONCA 482 at para. 40; Westminster Bank Ltd. v. Zang, [1966] A.C. 182 at p. 222 (H.L.).

[55] To interpret a statute, the words of the stature are interpreted in their ordinary grammatical sense unless there is something to show that the Legislature intended to use the words in a special sense: Victoria City v. Bishop of Vancouver Island (1921), 59 D.L.R. 399 (P.C.) at p. 402; Xerox of Canada Ltd. v. Regional Assessment Commissioner, Region No. 10, [1981] 2 S.C.R. 137.

[56] The ordinary grammatical sense of a word, as understood by a competent reader, is used to interpret the word, in the absence of a reason to qualify or reject the ordinary meaning. Reasons to reject the ordinary meaning include the legislator defining or declaring the meaning to be given to the word. There is a presumption in favour of ordinary meaning rather that a technical meaning: Pfizer Co. v. Deputy Minister of National Revenue (Customs & Excise), [1984] 2 S.C.R. 232.

[57] When a statute is addressed to a specialized audience about a technical subject, the ordinary grammatical sense of its words may give way to the technical meaning of the words: Unwin v. Hanson, [1891] 2 Q.B. 115 (C.A.) at p. 119; Great Western Railway Co. v. Carpalla United Clay Co. Ltd., [1909] 1 Ch. 218 at p. 236.

[58] The principles that should guide the courts in interpreting tax legislation are as follows: (1) the interpretation of tax legislation is subject to the ordinary rules of statutory instruction; (2) a legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it, and that purpose must be identified in light of the context of the statute, its objective and the legislative intent; (3) this teleological approach will favour the taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions, which formerly strictly construed taxing provisions thus favouring the taxpayer and which strictly construed exemptions thus favouring the tax department; (4) substance should be given over form to the extent that this is consistent with the wording and objective of the statute; (5) only a reasonable doubt, not resolved by the ordinary rules of interpretation will be settled by recourse to the residual presumption in favour of the taxpayer: Québec (Communauté Urbaine) v. Corp. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3; Buanderie Central de Montréal Inc. v. Montreal (City), [1994] 3 S.C.R. 29; Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536; Bronfman Trust v. The Queen, [1987] 1 S.C.R. 32; Schwartz v. Canada, [1996] 1 S.C.R. 299.

4. The Interpretation of Development Site in the Park Levy By-law

[59] In my opinion, the interpretation of “development site” is straightforward, unambiguous, not technical, and not tied to the size of lands for which improvements are to be made pursuant to a building permit.

[60] In accordance with the above principles of statutory interpretation, the words “development site” can be interpreted in their ordinary grammatical sense, and the words have the ordinary meaning “of the place where development occurs”, which, in the context of the City’s Park Levy By-law, more expansively means “the place where the owner of the land (the developer) constructs, erects, or places one or more buildings or structures, makes a substantial addition or alteration to a building or structure, removes one or more buildings or structures in order to develop the land, establishes a commercial parking lot, or converts a building or structure from an exempted or non-residential use to another use.

[61] This everyday meaning of the words reads the words of the Park Levy By-law in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the statute, the object of the statute, and the intention of the legislator and yields no absurdity or ambiguity. There is no reason to employ any presumptions about the interpretation of municipal by-laws or about the interpretation of revenue raising statutes to reach the straightforward meaning that development site is the place where development occurs.

[62] In circumstances where development occurs in phases, as it did in the case at bar, the common, every day, literal meaning of “development site” as meaning “the place where development occurs” simply begs the question of whether each phase is a separate development site or whether each phase is the development of a single development site where development occurs progressively.

[63] The circumstance that separate building permits are applied for the phases of a development project does not answer but rather continues to beg the answer to the question of whether there was just one development site or whether there was more than one development site. The genuine question is whether phased construction differentiates or demarcates different development sites.

[64] In other words, where construction occurs in phases, the determination of what is one or more development sites is a fact-based determination considering such factors as: the singularity or changes of ownership of the land; the singularity or the severance of the land holding (subdivision control); the nature of the project, the nature and progress of the development approvals; the lapsing of development approvals; changes and revisions in the project; changes in the development approvals; the timing of the construction work; changes in the timing of the construction; and changes in circumstances, including changes in the economics of the project.

[65] In the case at bar, the factual background establishes that the location for Gemterra’s construction project was a 1.3-hectare parcel of land that was to be developed in two phases but the phases did not demarcate two development sites. The fact that separate building permits were obtained did not demarcate two development sites. The fact that different building permits were obtained for the apartment buildings and the several townhouse developments did not demarcate more than one development site.

[66] The circumstance that a fact-based determination is required to determine what is a “development site” does not make the Park Levy By-law ambiguous, and the fact-based determination of what is a development site does not entail that there is more than one meaning of development site to choose from. Development site means the place where development occurs, which will be readily apparent in most cases, although where development is staged in phases, it may be necessary to make a factual determination whether the development is to occur at two separate or distinct places or sites.

[67] There is no ambiguity in the Park Levy By-law but the By-law requires a fact-based determination of what is the development site in each particular case. In the immediate case, there never was more than one development site and nothing changed by the sequencing of the construction or by the sequencing of the building permits. Other than being a factor in determining whether there is one or more than one development site, the circumstance of more than one building permit application is not determinative of what is the development site nor is it determinative of the size of the development site for which the permit or permits are granted.

[68] I can envision factual scenarios where the 1.3-hectare sized parcel of land near the intersection of Sheppard Ave. East and Kennedy Road in the City of Toronto might have yielded more than one development site. Visualize the scenario that it is purchased by Gemterra and then severed into two separate landholdings, one of which is conveyed along with rights of way to a different owner that holds the severed lands for future development while Gemterra applies only for a building permit for its remnant landholding. This, scenario, is not what occurred in the immediate case, and, in my opinion, it was appropriate for the City to regard Gemterra’s two-phased project as the development of a site larger than 1.0 hectare in size.

[69] It may be that in correctly determining that there was only one development site on Gemterra’s lands that the City erred in appraising the Phase 2 lands as of the date of the building permit application for the Phase 2 lands rather than as of the day before the day of issuance of the first building permit in respect of the development site, but I need not decide that issue for the purposes of deciding whether or not the City correctly regarded Gemterra’s lands as one development site.

[70] I simply note that proceeding to do appraisals in the way that it did would make no difference to the City or to the developer unless there was a marked change in the value of the lands in the interim, but, even then, the developer would have the benefit of not having to pay park levies in advance of putting a shovel into the lands being developed.

E. CONCLUSION

[71] For the above reasons, I dismiss Gemterra’s application.

[72] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the City’s submissions within 20 days from the release of these Reasons for Decision followed by Gemterra’s submissions within a further 20 days.

Perell, J.

Released: March 20, 2017

Schedule “A” – Statutory Provisions

Planning Act, R.S.O. 1990, c. P.13, s. 41(1), 42 and 51.1 - [Pre-Bill 73 / pre-December 3, 2015]

Site plan control area

41. (1) In this section,

“development” means the construction, erection or placing of one or more buildings or structures on land or the making of an addition or alteration to a building or structure that has the effect of substantially increasing the size or usability thereof, or the laying out and establishment of a commercial parking lot or of sites for the location of three or more trailers as defined in subsection 164 (4) of the Municipal Act, 2001 or subsection 3 (1) of the City of Toronto Act, 2006, as the case may be, or of sites for the location of three or more mobile homes as defined in subsection 46 (1) of this Act or of sites for the construction, erection or location of three or more land lease community homes as defined in subsection 46 (1) of this Act.

Conveyance of land for park purposes

42. (1) As a condition of development or redevelopment of land, the council of a local municipality may, by by-law applicable to the whole municipality or to any defined area or areas thereof, require that land in an amount not exceeding, in the case of land proposed for development or redevelopment for commercial or industrial purposes, 2 per cent and in all other cases 5 per cent of the land be conveyed to the municipality for park or other public recreational purposes.

Definition

(2) For the purposes of subsection (3),

“dwelling unit” means any property that is used or designed for use as a domestic establishment in which one or more persons may sleep and prepare and serve meals.

Alternative requirement

(3) Subject to subsection (4), as an alternative to requiring the conveyance provided for in subsection (1), in the case of land proposed for development or redevelopment for residential purposes, the by-law may require that land be conveyed to the municipality for park or other public recreational purposes at a rate of one hectare for each 300 dwelling units proposed or at such lesser rate as may be specified in the by-law.

Payment instead of conveyance

(6) The council of a local municipality may require the payment of money to the value of the land otherwise required to be conveyed under this section in lieu of the conveyance.

No building without payment

(6.1) If a payment is required under subsection (6), no person shall construct a building on the land proposed for development or redevelopment unless the payment has been made or arrangements for the payment that are satisfactory to the council have been made.

Determination of value

(6.4) For the purposes of subsections (6) and (6.2), the value of the land shall be determined as of the day before the day the building permit is issued in respect of the development or redevelopment or, if more than one building permit is required for the development or redevelopment, as of the day before the day the first permit is issued.

Disputes

(10) In the event of a dispute between a municipality and an owner of land on the value of land determined under subsection (6.4), either party may apply to the Municipal Board to have the value determined and the Board shall, in accordance as nearly as may be with the Expropriations Act, determine the value of the land and, if a payment has been made under protest under subsection (12), the Board may order that a refund be made to the owner.

Same

(11) In the event of a dispute between a municipality and an owner of land as to the amount of land or payment of money that may be required under subsection (9), either party may apply to the Municipal Board and the Board shall make a final determination of the matter.

Payment under protest

(12) If there is a dispute between a municipality and the owner of land under subsection (10), the owner may pay the amount required by the municipality under protest and shall make an application to the Municipal Board under subsection (10) within 30 days of the payment of the amount.

Parkland

51.1 (1) The approval authority may impose as a condition to the approval of a plan of subdivision that land in an amount not exceeding, in the case of a subdivision proposed for commercial or industrial purposes, 2 per cent and in all other cases 5 per cent of the land included in the plan shall be conveyed to the local municipality for park or other public recreational purposes or, if the land is not in a municipality, shall be dedicated for park or other public recreational purposes.

Other criteria

(2) If the approval authority has imposed a condition under subsection (1) requiring land to be conveyed to the municipality and if the municipality has an official plan that contains specific policies relating to the provision of lands for park or other public recreational purposes, the municipality, in the case of a subdivision proposed for residential purposes, may, in lieu of such conveyance, require that land included in the plan be conveyed to the municipality for park or other public recreational purposes at a rate of one hectare for each 300 dwelling units proposed or at such lesser rate as may be determined by the municipality.

Payment in lieu

(3) If the approval authority has imposed a condition under subsection (1) requiring land to be conveyed to the municipality, the municipality may, in lieu of accepting the conveyance, require the payment of money by the owner of the land,

(a) to the value of the land otherwise required to be conveyed; or

(b) where the municipality would be entitled to require a conveyance under subsection (2), to the value of the land that would otherwise be required to be so conveyed.

Determination of value

(4) For the purpose of determining the amount of any payment required under subsection (3), the value of the land shall be determined as of the day before the day of the approval of the draft plan of subdivision.

Application

(5) Subsections 42 (2), (5) and (12) to (16) apply with necessary modifications to a conveyance of land or a payment of money under this section.

Building Code Act, 1992, S.O. 1992, c.23

CONSTRUCTION AND DEMOLITION

8 (1) No person shall construct or demolish a building or cause a building to be constructed or demolished unless a permit has been issued therefor by the chief building official.

Application for permit

8(2) An application for a permit to construct or demolish a building may be made by a person specified by regulation and the prescribed form or the form approved by the Minister must be used and be accompanied by the documents and information specified by regulation.

Issuance of permits

8 (3) The chief building official shall issue a permit referred to in subsection (1) unless,

(a) the proposed building, construction or demolition will contravene this Act, the building code or any other applicable law;

Conditional permit

(3) Even though all requirements have not been met to obtain a permit under subsection (2), the chief building official may issue a conditional permit for any stage of construction if,

(a) compliance with by-laws passed under sections 34 and 38 of the Planning Act and with such other applicable law as may be set out in the building code has been achieved in respect of the proposed building or construction;

(b) the chief building official is of the opinion that unreasonable delays in the construction would occur if a conditional permit is not granted; and

(c) the applicant and such other person as the chief building official determines agree in writing with the municipality, upper-tier municipality, board of health, planning board, conservation authority or the Crown in right of Ontario to,

(i) assume all risk in commencing the construction,

(ii) obtain all necessary approvals in the time set out in the agreement or, if none, as soon as practicable,

(iii) file plans and specifications of the complete building in the time set out in the agreement,

(iv) at the applicant's own expense, remove the building and restore the site in the manner specified in the agreement if approvals are not obtained or plans filed in the time set out in the agreement, and

(v) comply with such other conditions as the chief building official considers necessary, including the provision of security for compliance with subclause (iv).

Appeal to court

25. (1) A person who considers themself aggrieved by an order or decision made by the chief building official, a registered code agency or an inspector under this Act (except a decision under subsection 8 (3) not to issue a conditional permit) may appeal the order or decision to the Superior Court of Justice within 20 days after the order or decision is made.

Extension of time

(3) A judge to whom an appeal is made may, upon such conditions as the judge considers appropriate, extend the time for making the appeal before or after the time set out in subsection (1), if the judge is satisfied that there is reasonable grounds for the appeal and for applying for the extension.

Effect of appeal

(3) If an appeal is made under this section in respect of a matter in which a question is pending before the Building Code Commission, the proceeding before the Commission is terminated.

Powers of judge

(4) On an appeal, a judge may affirm or rescind the order or decision and take any other action that the judge considers the chief building official, registered code agency or inspector ought to take in accordance with this Act and the regulations and, for those purposes, the judge may substitute his or her opinion for that of the official, agency or inspector.

ONTARIO REGULATION 332/12 (BUILDING CODE)

1.4.1.3. Definition of Applicable Law

(1) For the purposes of clause 8 (2) (a) of the Act, applicable law means,

(a) the statutory requirements in the following provisions with respect to the following matters:

(xxi.l) section 42 of the Planning Act with respect to the payment of money or making arrangements satisfactory to the council of a municipality for the payment of money, where the payment is required under subsection 42 (6) of that Act

COURT FILE NO.: CV-15-534507 DATE: 20170320

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

GEMTERRA DEVELOPMENTS CORPORATION Applicant – and – CITY OF TORONTO Respondent

REASONS FOR DECISION

PERELL J.

Released: March 20, 2017