COURT FILE NO.: CV-16-129230

DATE: 20190507

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CORPORATION OF THE TOWN OF RICHMOND HILL, Applicant/Respondent

AND:

2285473 ONTARIO INC., 2285364 ONTARIO INC., JEFF REID and KATHY REID, Respondents/Appellants

BEFORE: Dawe J.

COUNSEL: Charles A. Painter, Counsel, for the Applicant/Respondent

Neil G. Wilson, Counsel, for the Respondents/Appellants

HEARD: March 15, 2019

ENDORSEMENT

[1] This motion arises out of a long-running and acrimonious dispute between the planning authorities of the Corporation of the Town of Richmond Hill (“Richmond Hill”) and the Respondents/Appellants (hereinafter referred to collectively as “the Respondents”). In 2011 the Respondents constructed two semi-detached buildings on adjacent parcels of land on Bathurst Street[^1] in an area of Richmond Hill that is zoned for single-family houses. Richmond Hill alleges that the buildings were constructed with certain features that were not shown on the approved building plans, and has applied to this Court for an order pursuant to s. 38 of the Building Code Act, 1992 directing the Respondents to bring the buildings into compliance.[^2]

[2] Richmond Hill’s main concern is that the specific design variations at issue here appear to be meant to facilitate converting the buildings from single-family dwellings into multi-unit apartment buildings, contrary to the applicable zoning bylaw. For this reason, Richmond Hill has refused the Respondents’ applications for retroactive approval of these design modifications. The Respondents have in turn brought multiple appeals from these refusals to this Court pursuant to s. 25(1) of the Building Code Act.[^3] In February 2017 Mulligan J. directed that all of these related proceedings be consolidated and heard together. The parties appeared before me on March 15, 2019 in part to schedule dates for this combined hearing – which has now been set to be argued on October 3 and 4, 2019 – and to establish a litigation plan.[^4]

[3] However, Richmond Hill also seeks an interim court order that would direct the Respondents to “not use, permit or continue occupancy” of the two buildings:

… other than as a single family dwelling in the Third Density Residential (R3) zone, pursuant to the Town of Richmond Hill’s Zoning Bylaw 2353, as amended by Bylaw 33-05, and any other use or occupancy is prohibited.

In substance, this proposed order would be the functional equivalent of an interlocutory injunction prohibiting the Respondents from using the buildings in a manner that is already prohibited by the zoning bylaw, breaches of which are already a penal offence under s. 67 of the Planning Act. The practical consequence of the proposed order would be to increase the penalties that could be brought to bear against the Respondents if they were found to be breaching the bylaw during the period the order would be in effect. The maximum punishment for the s. 67 Planning Act offence is a fine, whereas violating a court order can result in contempt proceedings or charges under s. 127(1) of the Criminal Code, both of which are potentially punishable by imprisonment.

1) Factual background

[4] While I will not attempt to summarize in full detail the voluminous documentary evidence that has been tendered by the parties, a brief overview of the relevant facts is needed to provide some background context for Richmond Hill’s request.

[5] In 2011, Richmond Hill gave the Respondents planning permission to build the two buildings, which are essentially mirror images of one another. It is undisputed that the buildings as constructed included certain features that had not been shown on the original approved plans. Among other things, the rear balconies on each floor of the two buildings were joined together by interconnecting stairs, additional sinks were installed on all floors, and various other changes were made to the interiors. According to Richmond Hill, the clear purpose of these design changes was to facilitate dividing each of the two buildings into four separate apartments, with one apartment on each of the three floors and a fourth in the basement, for a total of eight apartments between the two buildings.

[6] However, there is a significant disagreement between the parties over whether these alterations were actually never approved by the Richmond Hill planning authorities. According to the Respondents, they sought and were granted permission to make most of these changes, which they say were reflected on a second revised set of building plans that they filed with the Richmond Hill planning office a few months after the original plans were filed. The Respondents maintain that not all of the changes they made to the buildings actually required planning approval, and contend that the only design change for which they neglected to obtain proper approval was the addition of the extra sinks. For its part, Richmond Hill appears to be disputing that any revised plans were ever filed or approved.

[7] According to Richmond Hill, at some point after the buildings were constructed the Respondents divided them into separate apartments and began renting out the units, contrary to the local zoning bylaw. When the Richmond Hill planning authorities discovered this in 2016 they obtained and executed a search warrant. Among other things, their search of the building revealed that fully-equipped kitchens and bathrooms had been constructed on each floor and in the basements, that separate locking entry doors and doorbells had been installed on each level, and that coin-operated laundry machines had been installed in the basements. Richmond Hill also obtained evidence from various people who described themselves as the Respondents’ rental tenants.

[8] As a result of Richmond Hill’s 2016 investigation the Respondents were charged with various provincial offences, namely: (i) charges under the Building Code Act for allegedly constructing the buildings in a manner that did not conform to the approved plans; and (ii) charges under the Planning Act for allegedly breaching the applicable zoning bylaw by using the buildings as multi-unit rental apartments.[^5] However, in 2018 the York Region Prosecutor’s Office withdrew all of the charges against the Respondent on the basis that it was not in the public interest to continue with the prosecution.

[9] In December 2018, a few months after the prosecution of the Respondents was discontinued, Richmond Hill conducted a new inspection of the properties, which revealed that the Respondents had removed the separate locks on the entry doors to the upper-floor units and taken the stoves out of all but the main floor kitchens. However, Richmond Hill remains highly suspicious of the Respondents’ intentions, and notes that it would be very easy for the Respondents to reinstall the door locks and the kitchen stoves in order to convert the buildings back into multiple apartments.

[10] The Respondents have filed affidavit evidence asserting that the buildings are currently being used in compliance with the zoning bylaw. Specifically, they maintain that Jeff and Kathy Reid currently live in one of the buildings with Jeff’s elderly and ailing mother, and that the Reids’ daughter lives in the other building with two housemates. Richmond Hill disputes the veracity of this evidence, maintaining that the daughter’s two ostensible housemates had been tenants at the time of the 2016 search and had each lived in their own separate apartment. According to Richmond Hill, the Respondents’ claim that these former apartment tenants are now sharing an entire house with the Reids’ daughter is “clearly and patently false”.

[11] More generally, Richmond Hill argues that even if the Respondents are currently complying with the zoning bylaw, it would be very easy for them to replace the locks and stoves and go back to using the buildings as multi-unit rental apartments. This is what motivates Richmond Hill’s request for what would be in substance an interlocutory injunction barring the Respondents from using the buildings other than as single-family homes.

2) Analysis

[12] Courts of equity were traditionally reluctant to grant injunctions that were intended to increase the available penalties for criminal or quasi-criminal offences. However, in his leading text on the law of injunctions, Justice Robert Sharpe of the Ontario Court of Appeal, writing extrajudicially, notes that the modern Anglo-Canadian trend is for courts to intervene “where the law has been ‘flouted’ and the statutory penalty has proved to be an inadequate sanction”.[^6] As he explains:

The rationale in this type of case seems clear: despite the absence of actual or threatened injury to persons or property, the public’s interest in seeing the law obeyed justifies equitable intervention where the defendant is a persistent offender who will not be stopped by the penalties provided by statute.[^7]

[13] Private litigants who seeks interlocutory injunctions must ordinarily demonstrate that they will suffer “irreparable harm” if the injunction is not granted. However, this requirement is applied less strictly in cases where the moving party is a municipal government seeking an injunction to enforce compliance with a bylaw. As McDonald J. noted in Markham (Town) v. Eastown Plaza Ltd., [1992] O.J. No. 1716 at para. 11 (Gen. Div.):

[A] municipality, by virtue of its obligations to its citizens, is in a different position from an ordinary litigant and this special status gives rise to special considerations which prevail in situations such as this one.

In Newcastle Recycling Ltd. v. Clarington (Municipality), 2005 CanLII 46384 (Ont. C.A.), Juriansz J.A. observed (at para. 32):

Where a municipal authority seeks an injunction to enforce a bylaw which it establishes is being breached, the courts will refuse the application only in exceptional circumstances.

To the same effect, in Municipality of Metropolitan Toronto v. N.B. Theatrical Agencies, Inc., 1984 CanLII 2092 (Ont. H.C.), Craig J. noted:

A municipality whose duty is to enforce its bylaws need not show that it will suffer irreparable harm in the same way that must be established by a private plaintiff. Where bylaws of a municipality are being flagrantly violated a court ought to assist the municipality by granting interlocutory relief.

Richmond Hill argues that the principles established in these and other similar cases justify making the interim order it now seeks.

[14] In my view, however, it was a critical factor in these cases that the breach of the bylaw at issue was ongoing. For instance, in Markham v. Eastown Plaza Ltd., supra, the defendants continued to operate a fast-food restaurant that did not comply with a local zoning bylaw up to the point that the court issued an interim injunction. Similarly, in Innisfil (Town) v. Innisfil Land Holdings Inc., 2003 CanLII 26184 (Ont. S.C.J.), the defendants had been operating a go-kart track in violation of a bylaw for a number of years, and “[w]hen [they] were told of the breach, they ignored it.”[^8] In N.B. Theatrical Agencies, supra, it was “clear that the respondent [was] carrying on the business of an adult entertainment parlour without a licence in breach of the bylaw and in open defiance of its requirements,” while in Springwater (Township) v. 829664 Ontario Ltd., [2008] O.J. No. 810 (S.C.J.) the evidence “establishe[d] beyond any doubt” that one of the respondents was committing ongoing bylaw violations.

[15] Conversely, I am not satisfied that a municipality can properly obtain an injunction designed to increase the penalties that can be imposed for a future bylaw infraction merely by showing that the defendant has breached the bylaw at some point in the past. Rather, to adopt Sharpe J.A.’s language, I believe the municipality must demonstrate that its bylaws are being “flouted” by the defendant, such that it can be inferred that “the statutory penalty has proved to be an inadequate sanction”.[^9]

[16] The difficulty Richmond Hill faces in this case is that the present evidential record does not unambiguously establish that the Respondents are “persistent offender[s] who will not be stopped by the penalties provided by statute”.[^10] To the contrary, while Richmond Hill has presented a strong case that the Respondents may have always intended to convert the buildings into rental apartments and that they actually did so in breach of the bylaw in 2016, the evidence also suggests that the experience of being prosecuted for the 2016 breach may have had at least some deterrent effect.

[17] The most recent inspection conducted by Richmond Hill in December 2018 revealed that the Respondents were no longer using the two buildings as conventional rental apartments. Although Richmond Hill has attacked Jeff Reid’s general testimonial credibility, it has presented no evidence contradicting his claim that he now lives in one of the two buildings with his wife and his mother, in compliance with the bylaw. With respect to the second building, Richmond Hill takes the position that the Reids’ daughter’s purported living arrangement is a sham and that the two ostensible “housemates” are in reality still tenants who actually live in separate apartments in the building, albeit without lockable front doors or kitchen stoves.

[18] The question of whether the Reids’ daughter’s current living arrangement does or does not comply with the zoning bylaw will be a matter for the judge who conducts the October, 2019 hearing to resolve, with the benefit of a full evidential record.[^11] For present purposes, however, it strikes me as significant that the Respondents are seemingly making at least some attempt to comply with the letter of the bylaw. Even if their efforts are ultimately found to be inadequate, it cannot in my view be said that they are presently “flouting” the bylaw – that is, treating it with “contemptuous disregard”^12 – or that the threat of a fine under the Planning Act would be inadequate to compel their compliance if the court determines that they are in breach.

[19] Richmond Hill emphasizes that it would be very easy for the Respondents to return the buildings to the state they were in before the 2016 charges and to resume using them as rental apartments, and argues that it lacks the resources to constantly monitor the Respondents’ compliance with the zoning bylaw. However, the proposed court order would do nothing to enhance Richmond Hill’s ability to detect future bylaw infractions, but would simply increase the potential punishments that could be brought to bear if any infractions were established. In the absence of compelling evidence that the deterrent effect of the statutory penalties for a bylaw breach are demonstrably inadequate, I am not satisfied that Richmond Hill’s resource-driven enforcement constraints justify making an order that would increase the range of penalties for a bylaw breach beyond the level that the legislature has deemed appropriate.

[20] Accordingly, I am not prepared to make the interim order Richmond Hill seeks. The motion is therefore dismissed.

[21] I should emphasize that nothing in these reasons should be understood as commenting on the merits of either Richmond Hill’s s. 38 Building Act application or the Respondents’ s. 25(1) Building Act appeals, or as expressing any opinion as to what form of final order might be appropriate. The judge who hears the case in October 2019 will be in a much better position to decide these matters after hearing full submissions and with the benefit of a full evidential record.

[22] When this motion was heard I indicated that I would invite the parties to provide written submissions on costs once I had released my ruling. I would ask that the Respondents provide their written costs submissions within two weeks of the date of the release of this judgment. Richmond Hill will then have two weeks to file its response, and the Respondents may then file a reply within one week.

DAWE J.

Date: May 7, 2019

[^1]: The two numbered company Respondents each own one of the two buildings, which are located at 9193 and 9193A Bathurst Street in Richmond Hill. The Respondent Jeff Reid is the president of one of the numbered companies (2285364 Ontario Inc.) and his wife, the Respondent Kathy Reid, is the president of the other numbered company (2285473 Ontario Inc.). Each are directors of both companies.

[^2]: Court File CV-16-129230-00.

[^3]: Court Files DC-16-128894, DC-16-128887, CV-16-128633, CV-16-129230, CV-19-138875.

[^4]: On consent, I also directed that an additional s. 25(1) Building Code Act appeal that was filed by the Respondents earlier this year (Court File No. CV-19-138875) be joined with the proceedings that had previously been ordered joined in February 2017.

[^5]: The Respondents maintain that during the course of the prosecution they received disclosure from the York Region Prosecutor’s Office that included what they maintain are copies of the revised building plans that they had filed and which had been approved by Richmond Hill. However, Richmond Hill apparently disputes the authenticity of these plans, maintaining that it does not have copies of them in its own files. Indeed, Richmond Hill’s Director of Building Services goes so far as to allege that if these revised plans existed they must have been purloined from Richmond Hill’s files by someone acting on the Respondents’ behalf. There does not appear to be any concrete evidence supporting this theory.

[^6]: R.J. Sharpe, Injunctions and Specific Performance (loose-leaf) at ¶3.210.

[^7]: Sharpe, supra at ¶3.230.

[^8]: Supra, at para. 24.

[^9]: Sharpe, supra at ¶3.210.

[^10]: Sharpe, supra at ¶3.210.

[^11]: Richmond Hill has indicated that it will be seeking to compel the two housemates and the other alleged 2016 apartment tenants to attend for out-of-court examinations pursuant before the scheduled October 2019 hearing date.