Valastro v. City of London, 2017 ONSC 773

CITATION: Valastro v. City of London, 2017 ONSC 773

COURT FILE NO.: 2545-16

DATE: 2017/02/08

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Annamaria Valastro, Applicant

AND:

The Corporation of the City of London, Respondent

AND:

Rygar Properties, Respondent

BEFORE: Justice M. A. Garson

COUNSEL: The Applicant, self-represented Danilo Popadic, for the Respondent, the City of London Ian Wallace, for the Respondent, Rygar Properties

HEARD: January 6, 2017

ENDORSEMENT

Introduction

[1] It is trite to state that conservation, preservation and protection of the heritage of Ontario is an important and laudable goal[^1]. As such, courts must balance the interests of the community against those of individual property owners. Municipalities are often placed in the difficult position of trying to give effect to this delicate balance when heritage designations are sought or demolition permits are issued.

[2] The applicant purports to file an appeal under s. 25(1) of the Building Code Act (“BCA”) regarding a Make Safe Order made and demolition permit issued by the City of London (“the City”) for the properties at 479-489 Talbot Street and 93-95 Dufferin Avenue in London, Ontario (“the Properties”). The applicant submits that the permit for demolition was issued contrary to s. 34(30) of the Planning Act and that the Order to Make Safe improperly allowed for demolition prior to the removal of the Properties from the heritage inventory list.

[3] The applicant further brings a claim against the City for neglect of duty contrary to s. 8(11) of the BCA.

Background Facts and Positions

[4] The Properties are owned by Rygar Properties Inc. (“Rygar”). The Properties were listed as Priority 1 and Priority 2, respectively, on the City’s inventory of Heritage Resources, pursuant to s. 27 of the Ontario Heritage Act.

[5] On September 15, 2015, the City of London’s Planning and Environment Committee held a meeting concerning the future of the Properties. At the meeting, the London Advisory Committee on Heritage (“LACH”) recommended to the committee that the Properties should be designated as cultural heritage sites under the Ontario Heritage Act.[^2] Rygar informed the committee of its intent to submit an application for a Zoning By-law amendment to redevelop the site, and indicated that it was in the process of completing a Heritage Study on the properties. This application for rezoning was eventually passed by the City on September 13, 2016.

[6] The City spent considerable time and resources working with Rygar to evaluate and advocate for all opportunities to conserve the heritage attributes of the Properties into the redevelopment.

[7] On July 5, 2016, Deputy Chief Building Official, Peter Kokkoros, and Manager of Property Standards, and Structural Engineer, Sean McHugh, conducted an investigation of the Properties and found a number of issues relating to the structural integrity of the Properties that qualified as “unsafe conditions” as defined in s. 15.9(2) of the BCA. As a result of these findings, the City Building Inspector, Phil Vivyurka, issued 6 “Unsafe Building – Order to Make Safe” orders requiring Rygar to demolish or repair the buildings located on the Properties. As of October 16, 2016, the cost of repair for 479-489 Talbot alone was estimated to be $1,323,000.

[8] Concerns of deterioration were initially raised with the City on September 21, 2015. The applicant claims that the City has not demonstrated why an investigation was not undertaken sooner.

[9] On August 16, 2016, Rygar issued a written notice to City Council of its intention to demolish the buildings. This notice was issued in accordance with the time requirements in s. 27(3) of the Heritage Act.

[10] On September 6, 2016, the City held a public participation meeting concerning an application brought to the City regarding the future state of the Properties. Rygar presented a report recommending introduction of a by-law to amend the zoning by-law in conjunction with an application for heritage designation of the Properties under Part IV of the Ontario Heritage Act. The proposed application included commemoration of the heritage aspects of the Properties and the retention, salvaging and incorporation of aspects of the original buildings in the new development[^3].

[11] On September 13, 2016, City Council accepted the recommendations and passed By-law Z-1.162518. The applicant submits that there was no discussion on the heritage designation of the Properties when the application was passed. The City counters that in passing the by-law, City Council made a clear decision not to designate the properties as heritage buildings, and that such a decision was echoed during the October 11, 2016 Council meeting when City Council clarified that in passing the zoning by-law amendment, Council intended for the properties not to be designated under the Heritage Act.

[12] On October 3, 2016, a report was brought to the Planning and Environment Committee recommending that the Properties be removed from the City’s Inventory of Heritage Resources. These recommendations were accepted by City Council on October 11, 2016.

[13] On October 19, 2016, Rygar submitted its application for a Permit to Construct or Demolish the buildings on the Properties. The permits were issued on October 21, 2016.

[14] On October 7, 2016, a few days prior to Rygar’s application for a permit to demolish, the applicant appealed the zoning by-law to the Ontario Municipal Board (“OMB”). The appeal was dismissed by the OMB on December 23, 2016.

Issues

[15] The following three issues are raised by the applicant:

(1) Did the Deputy Chief Building Official breach s. 34(30) of the Planning Act and s. 8(2) of the BCA when he issued the demolition permits prior to the resolution of the OMB appeal?

(2) Was it appropriate to issue an order to allow for the demolition of a building prior to its removal from the Heritage Inventory List?

(3) Did the actions or omissions of the City of London constitute neglect of duty in violation of s. 8(11) of the BCA?

Standard of Review

[16] Although municipal decisions are provided a wide degree of deference on review, when the decision on appeal requires judicial review on the determination of the law or a legal interpretation of a statute, the standard of review is that of correctness: see Oriole Park Resort Inc. v. Middlesex Centre (Municipality) (2008), 174 A.C.W.S. (3d) 524 (Ont. S.C.J.), at para. 7; 2161907 Ontario Inc. v. St. Catharines (City), 2010 ONSC 4548, 192 A.C.W.S. (3d) 1005, at para. 12.

Preliminary Matter

[17] I note that the applicant proceeded by way of an application in this matter. I am not sure that is the appropriate originating process in these circumstances, given that the matter is primarily an appeal under s. 25(1) of the BCA. However, in light of Rule 14.05(d), I am prepared in the circumstances[^4] to accept that the process is sufficient to permit the matter to proceed, particularly in light of the need to secure the most just, expeditious and least expensive determination of the proceeding on the merits.

Standing

[18] Although the City accepts that the applicant meets the test for an “aggrieved” person under s. 25 of the BCA, they argue that she lacks standing to challenge the Make Safe Orders.

[19] Under s. 25(1) of the BCA:

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

[20] Even if I accept that she meets the test for an aggrieved person, s. 25 (1) of the BCA clearly stipulates a 20 day time period to appeal. The Make Safe Orders were issued on July 8, 2016, thus potentially barring by statute her ability to appeal under S. 25 (1) of the BCA.

[21] The applicant may well have failed to demonstrate that she is an aggrieved party. She has not on the basis of the materials filed before me, established any basis for a claim for any damages, nor has she demonstrated that the City owes her a duty of care. Although she may be aggrieved by Rygar’s decision to demolish, I see little basis to find that she is aggrieved by the Make Safe Orders.

[22] Additionally, much of her relief requested cannot be granted by this court. As the City points out, the applicant is not seeking the interpretation of any municipal by-law or resolution to determine the existence or non-existence of any rights. The applicant requests declaratory relief, which is not the proper subject of a s. 25(1) BCA appeal: see Dysart (Municipality) v. Haliburton Forest & Wild Life Reserve Ltd., 2016 ONSC 956, 263 A.C.W.S. (3d) 781, at para. 53.

[23] Her appeal to the OMB has been dismissed thus potentially rendering her claim under s. 8(2) of the BCA and s. 34(30) of the Planning Act moot.

[24] Nonetheless, in light of the City’s position, I will address the arguments raised.

(i) Does a breach of s. 34(30) of the Planning Act contravene s. 8(2) of the Building Code Act?

[25] Section 8(2) of the BCA states that:

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;

“Applicable law” is defined in O. Reg. 332/12 s. 1.4.1.3 and includes “(f) by-laws made under section 34 or 38 of the Planning Act”.

[26] Section 34(30) of the Planning Act reads:

If one or more appeals have been filed under subsection (19), the by-law does not come into force until all of such appeals have been withdrawn or finally disposed of, whereupon the by-law, except for those parts of it repealed or amended under subsection (26) or as are repealed or amended by the Lieutenant Governor in Council under subsection (29.1), shall be deemed to have come into force on the day it was passed.

[27] The applicant argues that the term “applicable law” should be read broadly to include all of s. 34 of the Planning Act, not just by-laws made under the Act.

[28] In support of her argument, the applicant cites Ottawa (City) v. Ottawa (City) Chief Building Official (2003), 2003 CanLII 49413 (ON SCDC), 180 O.A.C. 48 (Ont. Div. Ct.), at para. 141, which found that applicable law within the meaning of s. 8(2) of the Building Code must only include statutes that have a logical and real nexus to the subject and purpose of the Act. The applicant argues that s. 34(30) of the Planning Act has a logical and real nexus to the subject and purpose of the BCA and therefore must be taken into consideration.

[29] The applicant also proposes that an appeal brought in accordance with s. 34(30) of the Planning Act stays not only the zoning amendment, but also the demolition of the buildings that are subject to the amendment.

[30] When City Council passed Zoning Amendment Z-1.162518, it was intended that the Properties were not to be designated as heritage buildings. Additionally, the amendment provided for heritage commemoration of the Properties, stating that the original building materials and facades would be preserved. This was confirmed by City Council members during the October 11, 2016 City Council meeting.[^5] The applicant argues that the zoning amendment included the intention that Properties will be demolished. Therefore, the issue of demolition is an inherent part of the zoning amendment and should be stayed along with the enactment of the by-law once an appeal is made.

[31] The City suggests that a more narrow approach should be taken, and that the legislator’s choice of inclusion of some sections of the Planning Act and not others was an intentional exclusion of those sections. Section 1.4.1.3 of the BCA specifically lists a variety of sections, regulations and statutes that qualify as “applicable law”, and while it includes by-laws made under s. 34 it intentionally does not include zoning by-laws affected by s. 34(30) of the Planning Act.

[32] If a narrow reading of s. 1.4.1.3 is adopted, then only by-laws enacted under s. 34 of the Planning Act are considered “applicable law” for the purpose of s. 8 (2). Section 34(30) is not a by-law, nor does it bring by-laws into force. Rather, its use stays by-laws from coming into force and therefore would not satisfy these criteria.

[33] The City emphasizes that the applicant’s claim essentially boils down to the argument that a demolition permit should not have been issued under s. 8(2) of the BCA because s. 34(30) of the Planning Act prohibits it. Section 34(30) of the Planning Act does not prohibit demolition outright, it simply stays the by-law from coming into force until an appeal is dealt with. While the changes enacted by the by-law may have reasonably contemplated demolition of the current buildings, the by-law itself did not permit demolition. Therefore staying the by-law under s. 34(30) would not have stayed demolition.

[34] This sentiment was echoed by City Council during the October 11, 2016 City Council Meeting. When asked about what the impact of issuing a permit for demolition would be on the appeal, an unknown agent for City Council stated that the appeal of the re-zoning application was a separate issue from the issue of demolition and clarified that the re-zoning application grants future uses that are not predicated on a specific building being present on the site.[^6]

[35] I reject the applicant’s contention that the decision to issue the permit to demolish is inextricably linked to the decision to permit the zoning amendment. They are separate and distinguishable decisions.

[36] In any event, the applicant’s appeal to the OMB regarding Z-1.162518 was dismissed by the Board on December 23, 2016, thereby rendering this argument moot.

[37] Accordingly, this argument fails and I find that s. 34(30) of the Planning Act does not prohibit the City from issuing the demolition permit under s. 8(2) of the BCA.

(ii) Was it appropriate to issue an order that allowed for the buildings to be demolished before they were removed from the Heritage Inventory List?

[38] The applicant argues that the City erred by issuing an Order to Make Safe which allowed for the demolition of the Properties prior to the removal of them from the Heritage Inventory List.

[39] The City submits that neither the BCA nor the Ontario Heritage Act specifies that a property listed on a s. 27 Heritage Register is immune from orders issued under s. 15.9 of the BCA (an Order to Make Safe), and that the applicant has failed to produce any authority to support her position.

[40] Section 27 of the Ontario Heritage Act designates that the municipality “shall keep a register of property situated in the municipality that is of cultural heritage value or interest”. Properties can be registered under s. 1.1 and 1.2 of the Act.

[41] The Act only lists restrictions on demolition for properties registered under s. 1.2. Section 27(3) states:

If property included in the register under subsection (1.2) has not been designated under section 29, the owner of the property shall not demolish or remove a building or structure on the property or permit the demolition or removal of the building or structure unless the owner gives the council of the municipality at least 60 days’ notice in writing of the owner’s intention to demolish or remove the building or structure or to permit the demolition or removal of the building or structure. [emphasis added]

[42] There is no restriction on the demolition of properties registered under s. 1.1.[^7]

[43] Additionally, according to the timeline presented by the City, the actual permit for demolition was not issued until after the Properties were removed from the Heritage Inventory List. The City’s Order to Make Safe only contemplated the demolition of the building. It did not permit it. In order for Rygar to demolish the property it would have had to still apply for a permit, which it did.

[44] Accordingly, this argument fails and I find that the City acted appropriately in issuing the permit for demolition.

(iii) Neglect of Duty in violation of s. 8 (11) of the Building Code Act

[45] The applicant argues that the City neglected their duty to the public by failing to investigate claims of deterioration of the property in a timely fashion, resulting in further deterioration of the Properties to the point beyond reasonable repair contrary to s. 8(11) of the BCA.

[46] Section 8(11) of the BCA provides that “no person shall construct or demolish a building or cause a building to be constructed or demolished except in accordance with this Act and the building code.”

[47] The City argues that it did not contribute to the demise of Camden Terrace through neglect of duty, nor did the City have a duty of care in this regard to the applicant or to the public.

[48] In order for the court to make a finding of liability for negligence on the part of the City, the applicant must establish that the City owed her a duty of care: see 11843 Ontario Inc. v. Mississauga (City), 2015 ONSC 3691, at para. 218.

[49] Additionally, absent actions conducted in bad faith, the BCA provides immunity to chief building officials when acting in their capacity under the Act. Section 31(1) states:

No action or other proceeding for damages shall be instituted against the director, a member of the Building Code Commission or the Building Materials Evaluation Commission, or anyone acting under their authority, a person conducting an inquiry under s. 30, a chief building official, an inspector or an officer for any act done in good faith in the execution or intended execution of any power or duty under this Act or the regulations or for any alleged neglect or default in the execution in good faith of that power or duty.

[50] The Ontario Court of Appeal considered what constitutes bad faith in wpd Sumac Ridge Wind Inc. v. Kawartha Lakes (City), 2016 ONCA 496, 132 O.R. (3d) 529 (Ont. C.A.), at para. 83, endorsing the following statement from H.G. Winton Ltd. v. North York (Borough) (1978), 1978 CanLII 1566 (ON SC), 20 O.R. (2d) 737 (Ont. Div. Ct.):

To say that Council acted in what is characterized in law as "bad faith" is not to imply or suggest any wrongdoing or personal advantage on the part of any of its members. But it is to say, in the factual situation of this case, that Council acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of a municipal government.

[51] The onus of proving bad faith rests with the party alleging it and requires that the applicant demonstrate that the municipality acted in a manner other than in the public interest: see Uukkivi v. Lake of Bays (Township), 134 A.C.W.S. (3d) 909, at para. 31.

[52] Additionally, while a municipality has a duty to the public to enforce its by-laws, absent bad faith and unreasonableness, it has broad discretion in determining how it will enforce its by-laws: see Foley v. Shamess, 2008 ONCA 588, 297 D.L.R. (4th) 287, at para. 29. Municipalities are not liable to the public for failing to take a specific action, so long as they enforce their by-laws in good faith and in a reasonable manner.

[53] The applicant states that the City acted unreasonably, and while the applicant does not specifically use the term bad faith, it can be implied from her arguments. The applicant says that concerns of deterioration were initially raised with the City on September 21, 2015, and an Order to Make Safe was not issued until July 8, 2016. Additionally, the applicant states that Mr. Kokkoros did not investigate the interior of the building, and therefore did not adequately investigate the complaint. The applicant further takes issue with the fact that the City, in their Order to Make Safe, allowed Rygar to demolish the buildings.

[54] There is evidence to suggest that the buildings were in decline for a number of years. At the September 6, 2016 public participation meeting a former owner of some of the buildings located on the property spoke to the poor condition of the buildings starting in 1977. [^8] Additionally, at the October 6, 2016 meeting, Councillor Hubert indicated that the current owner, Rygar, purchased the properties after they were in deep decline. However, the applicant did not take issue with the time period prior to September 2015, only the time period from September 2015 until June 2016. Given that this time period was little under a year, it cannot be found that the actions of the City were unreasonable. The applicant did not provide any materials to the court to provide any factual foundation for a finding of unreasonableness during this period.

[55] Accordingly, this claim must fail.

Demolition by Neglect

[56] Although not specifically argued in her factum, the applicant’s “relief claimed” section seeks an order or declaration that the City contributed to the demise of the building by neglect.

[57] Demolition by neglect is a colloquial term used to describe the process by which an owner of a designated heritage building neglects the building until it deteriorates beyond reasonable repair. There is no mention of this term in any of the applicable statutes.

[58] The City states that demolition by neglect does not violate the BCA because it is not a recognized form of demolition. Under the BCA, demolishing requires an act of removal, and buildings that fall into disrepair due to neglect do not fall under the definition of “demolish” under s. 1(1) of the Act.

[59] Additionally, it is unclear how the City would be found liable for demolition by neglect. The City is not responsible for the upkeep of a building. Municipalities are required to enforce its by-laws, which places a requirement on the City to inspect potentially hazardous buildings and issue Orders to Make Safe. However, there is no obligation on the city to take specific steps such as issuing repairs: see Foley.

[60] At no point were the properties required to be demolished. The Order to Make Safe provided Rygar with the options of repair or demolition. Although repairs may have been prohibitively expensive, they were still possible. This was confirmed multiple times by City Staff at the aforementioned City Council meetings.

[61] The Properties were also not designated as heritage buildings, and as mentioned above, there is no evidence that demolition is prohibited for properties listed on the heritage inventory.

[62] It would be impracticable to impose and enforce this standard sought by the applicant on the City. If the City were held to this standard, any property that required maintenance (i.e. aging roof shingles, or deteriorating bricks or siding) could potentially fall into the broad concept of demolition by neglect. Disrepair does not equate with demolition. This argument must fail.

Summary

[63] It is important that community members ensure that municipalities and their employees act properly and that our heritage be protected and preserved.

[64] However in this matter, the applicants’ frustrations are not the result of improper or unfair exercise of discretion by city council.

[65] The decisions made in this matter by City employees and by City Council were based on full information, subject to extensive public input, supported by expert evidence, and made in accordance with statutory requirements.

[66] Simply put, the applicant disagrees with the discretion exercised by city staff and city council members.

[67] The proper forum for the expression of such frustration and disagreement is the ballot box - not the courthouse.

[68] As a private property owner Rygar acted within its legal rights by giving proper notice of its intent to demolish and by complying with the prescribed timelines under the Heritage Act. In fact, other than the Heritage Act timelines, nothing would have prevented Rygar from applying for a demolition permit at an earlier stage in the proceedings, even without a formal plan for development.

[69] City council could have exercised it discretion differently. It was free to accept or reject the advice from LACH. Its decision was made in good faith, and with the appropriate and necessary degree of fairness, openness, impartiality and reasonableness required of a municipality.

[70] The powers of the City of London are not absolute when dealing with unsafe properties. Further, property owners are almost always free to exercise their right to demolish a property in the face of a Make Safe Order.

Conclusion

[71] For the above reasons, the application is dismissed.

Costs

[72] Rygar appeared in this matter solely to address the issue of costs arising from a related application (court file #2401) brought by the applicant seeking an injunction restraining Rygar from demolishing certain townhouses on the property. Costs of that application were reserved to me.

[73] The applicant filed a Notice of Discontinuance on court file #2401 on December 30, 2016, thereby ending Rygars’ involvement in the current application.

[74] Rygar seeks its costs in accordance with Rule 37.09(3) of the Rules of Civil Procedure in the amount of $15,286.00, inclusive of HST and disbursements on a partial-indemnity scale.

[75] Rygar argues that it was successful in resisting the injunction application at several court appearances, which resulted in the applicant formally abandoning the injunction application. Further, Rygar submits that the applicant never commenced an action, failed to prove standing to bring the application, and failed to file sufficient materials to meet the threshold for the granting of an injunction.

[76] The City also seeks its costs, on a partial indemnity scale, of $1,889.34, inclusive of fees and disbursements. The City relies on s. 447.7(1) of the Municipal Act, for the proposition that costs can be awarded to a municipality where counsel is a salaried officer of the municipality. The City argues that the applicant failed to produce proper or complete materials necessitating numerous court appearances and delays. The City further submits that parties without financial means are not immune to cost consequences.

[77] The applicant argues that there should be no award of costs in these circumstances. She argues that she never received Rygar’s Bill of Costs, that Rygar abruptly cancelled a meeting set to discuss matters, and voiced concerns about contaminated soil that, since demolition, sits open and is allowed to dispose with the wind.

[78] As earlier stated, I acknowledge the legitimate role of those in our community that seek to preserve our heritage. However, when their actions cause others to incur substantial expenses and generate significant materials and attend numerous court appearances, cost consequences will arise if they are unsuccessful.

[79] Based on my earlier observations that the applicant may well lack standing to advance many of her claims and that much of her efforts became moot once the buildings were demolished, I have little difficulty concluding that her conduct unnecessarily lengthened the proceedings.

[80] I also take into account the amount of costs the unsuccessful party could reasonably expect to pay in these circumstances.

[81] I commend the applicant for her careful and well organized, albeit unsuccessful, presentation of her arguments. They were coherent, clear and concise. She clearly put a considerable amount of time and effort into this endeavor. She is a passionate advocate for heritage and preservation rights.

[82] The City properly allocated only 10% of the total time spent in preparing materials to related court file #2401.

[83] I agree that Rygar was successful in the injunction motion and is entitled to receive some of its costs.

[84] I am also mindful that Rygar may well have incurred additional charges in relation to its mortgage financing of the Property as a result of delays in demolition brought on by the application injunction motion.

[85] The applicant is not a novice when it comes to self-representation or seeking injunctive relief. She must appreciate that cost consequences may arise if she is unsuccessful.

[86] In all of the circumstances, a fair and balanced award is as follows:

i. the applicant shall pay the City costs of $1,000.00 inclusive of HST and disbursements, payable within 180 days; and

ii. the applicant shall pay Rygar costs of $6,500.00 inclusive of HST and disbursements, payable within 180 days.

Post-Script

[87] The applicant filed a Notice of Discontinuance with respect to court file #2401 and the enclosed costs order brings that matter to an end. Similarly, this endorsement speaks only to court file #2545 and brings that matter to an end. I would urge the applicant to engage in a dialogue with the parties with respect to next steps on related court file #2666, given the substantial overlap with the matters dealt with herein.

“Justice M. A. Garson”

Justice M. A. Garson

Released: February 8, 2017

[^1]: See Ontario Heritage Act [^2]: See s. 29 (3) [^3]: At the meeting, there was a recognition of the considerable time spent by the City staff dealing with the issue. Forty members of the public attended the open invitation to participate in the discussion of the competing interests at play. A clear recommendation emerged from the meeting that the development sought by Rygar be permitted. The issue of heritage designation was determined at this meeting. [^4]: The applicant is self-represented and has certainly made her best efforts to advance the matter. Rules 1.04 and 1.05 support the matter moving forward at this time. [^5]: See Tab 7 of the Motion Record at 58 minutes. [^6]: See Tab 7 of the Motion Record at 1 hour 17 minutes. [^7]: The evidence doesn’t make clear which subsection the properties were registered under but for these circumstances, I presume it was under s. 1.1. However, even if it was under s. 1.2, Rygar issued a written notice to the City of its intention to demolish the buildings on August 16, 2016. It applied for a demolition permit on October 19, 2016, 63 days after providing written notice and therefore within the timeline. [^8]: See Tab 7 of the Motion Record at 1 hour and 45 minutes.