Court File and Parties
Court File No.: 72/11 Date: 2020-03-06 Ontario Superior Court of Justice
Between: The Corporation of the City of Kawartha Lakes, Plaintiff – and – Wayne Gendron, Liana Gendron, Doug C. Thompson Ltd., Her Majesty the Queen in Right of Ontario, Technical Standards and safety Authority, D.L. Services Inc., R. Ian Pepper Insurance Adjusters Inc., Farmers’ Mutual Insurance Company and Les reservoirs D’Acier De Granby Inc., Defendants
Counsel: Christine Carter, for the plaintiff Martin Forget, for Wayne Gendron and Liana Gendron Ryan McConaghy, for TD Bank
Heard: February 14, 2020
Before: S.T. Bale J.
Reasons for Decision
[1] Wayne and Liana Gendron move for an interlocutory injunction restraining the City of Kawartha Lakes from selling their home, pending disposition of a motion relating to the validity and amount of the lien placed on the home by the City, pursuant to s. 100.1(5) of the Environmental Protection Act. The City opposes the granting of the injunction sought.
[2] Pursuant to s. 373(2) of the Municipal Act, 2001, the City will be in a position to sell the home on March 29, 2020. Gendron’s motion relating to the validity and amount of the lien and a bar motion brought by the City were scheduled for hearing during the Central East trial sittings in November 2019. However, the motions were not reached, with the result that they are now scheduled for hearing during the sittings commencing May 19, 2020.
[3] If the injunction is not granted and the Gendrons are successful on the motions, they will have been deprived of an opportunity to save their home, at least in part because of a scarcity of judicial resources. If the injunction is granted and the Gendrons are unsuccessful, the City’s sale of their home will have been delayed for a mere seven weeks.
[4] In opposing the injunction, counsel for the City argues the following:
- that the Gendrons are estopped from seeking injunctive relief, as a result of an agreement pursuant to which they withdrew a Divisional Court appeal from a decision of the Environmental Review Tribunal;
- that the issue of whether the Gendrons are entitled to an interlocutory injunction was previously determined in the City’s favour and is therefore res judicata;
- that the Gendrons have not, in any event, met the test for an interlocutory injunction; and
- that the Gendrons have failed to provide an undertaking concerning damages.
[5] For the reasons that follow, I am unable to accept the City’s position. An interlocutory injunction will issue prohibiting the City of Kawartha Lakes from selling the Gendrons’ home, pending final disposition of this action, or further order of the court. In the circumstances described, there will also be an order that this matter be given priority during the May 2020 sittings.
Background Facts
[6] The City issued an order requiring the Gendrons to compensate it for expenses incurred in remediating an oil spill originating on their property. Pursuant to s. 100.1(5) of the Environmental Protection Act, the order entitled the City to a priority lien on the property enforceable under s. 1(2.1) of the Municipal Act, 2001. The Gendrons appealed the order to the Environmental Review Tribunal. The tribunal reduced the amount to which the City was entitled to a lien from $471,691.44 to $313,005.08.
[7] While the ERT appeal was pending, the City commenced this action in which it also claimed its remediation expenses. The City subsequently entered into settlement agreements with all defendants except the Gendrons and their insurer, Farmers’ Mutual Insurance Company. A motion for approval of the settlements, and for a bar order, is pending.
Analysis
Estoppel
[8] The Gendrons commenced an appeal from the ERT decision to the Divisional Court under s. 100.1(16) of the Environmental Protection Act. In September 2018, the parties entered into an agreement pursuant to which the appeal was withdrawn. One of the terms of the agreement was that the City would not advertise the home for sale before June 30, 2019. The City argues that it relied upon that term of the agreement in consenting to the withdrawal of the appeal, and that the Gendrons should not be allowed to resile from the agreement.
[9] At the time of the withdrawal of the Divisional Court appeal, the Gendrons could reasonably have expected the motions to be heard by the end of June 2019. However, one of the reasons why they were not heard was the City’s failure to produce documents to which the Gendrons had been found to be entitled. The balance of the documents ordered to be produced were not produced until August 2019.
[10] Promissory estoppel is an equitable defence. Given the delay occasioned by the City, it is in no position to argue that the Gendrons should be barred from proceeding with this motion.
Res Judicata
[11] The City argues that the issues on this motion are res judicata as a result of the dismissal of a previous injunction motion by Sosna J. I disagree, for the following reasons.
[12] First, the motion heard by Sosna J. was for an order that the City “reverse” the lien against the Gendrons’ property or, in the alternative, that the ERT order be stayed pending disposition of their Divisional Court appeal.
[13] Sosna J. held that the request for an order that the lien be reversed was a request for a mandatory injunction and that the Gendrons had not met the “strong prima facie case” test applicable to interlocutory mandatory injunctions. In doing so, however, he found that “at its highest”, the Gendrons’ case would have satisfied the test of “serious issue to be tried” applicable to interlocutory prohibitive injunctions (paragraph 43).
[14] Although Sosna J. refused to grant the requested mandatory injunction, he did grant an injunction prohibiting the City from proceeding with a sale of the property pending disposition of the Gendrons’ Divisional Court appeal (paragraph 59). The City argues that this was a stay pending appeal rather than an injunction but in making the order, the court specifically relied upon s. 101(1) of the Courts of Justice Act, and in disposing of the Gendrons’ alternative request for a stay pending appeal, held, in effect, that such a stay would be within the exclusive jurisdiction of the Divisional Court (paragraph 58).
Merits of Current Motion
[15] Counsel for the City argues that the order requested amounts to a mandatory injunction and that therefore, the Gendrons must demonstrate a strong prima facie case. She argues that the order would require the City to take positive steps such as calling to inform their lawyer that the injunction had been granted and perhaps putting some steps on hold. I disagree. The requested injunction is clearly prohibitive. Unlike the order requested of Sosna J., the order now requested does nothing more than prohibit the City from selling the property, until the case is finally disposed of. There is no evidence to support the position that the City would have to take any steps to reverse a process now underway. As a result, the first step of the test to be met is whether there is a “serious question to be tried.” The threshold is a low one:
Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and third tests, even if of the opinion that the plaintiff is unlikely to succeed at trial. A prolonged examination of the merits is generally neither necessary nor desirable: RJR-MacDonald Inc. v. Canada (Attorney General) , [1994] 1 S.C.R. 311 , at pp. 402-3 .
[16] Gendron’s position is neither frivolous nor vexatious. There are serious questions to be tried which will determine the final amount they owe to the City, and any reduction in that amount will increase their chances of saving their home. The City argues that the $325,000 received from the settling defendants was applied to remediation costs other than those upon which the ERT order was based. The Gendrons argue that a sale of their home to satisfy the full amount of the ERT award will result in double recovery. They point to the fact that the agreements pursuant to which the City’s claims against their co-defendants were settled were not specific to any particular invoices. They argue that $148,686.91 of the amounts received from the co-defendants was used by the City to pay fees not recoverable in this action.
[17] In addition, there is a question of costs. On the bar motion, the City requests that the action be dismissed as against the Gendrons, with costs payable to the City. The Gendrons’ position is that costs should follow the event, upon the dismissal of the action against them. If the Gendrons are successful on this issue, the costs to which they would become entitled would go a long way toward satisfying the ERT award (if not all the way).
[18] The Gendrons argue that the ERT award should be set aside on the ground of abuse of process. Although this issue is not for me to decide at this stage, it is my view that the power to set aside an order of the ERT lies within the exclusive jurisdiction of the Divisional Court, under both s. 101.1(16) of the Environmental Protection Act, and s. 6(1) of the Judicial Review Procedure Act.
[19] The Gendrons argue that the failure of the City to disclose its settlement agreements with the settling defendants should result in the ERT order being set aside, and in doing so, rely upon Aecon Buildings, a Division of Aecon Construction Group Inc. v. Brampton (City), 2010 ONCA 898 . Although it is my view that this court does not have jurisdiction to set aside the ERT order, the failure to disclose could conceivably be relevant to the disposition of the costs of this action.
[20] Based upon the limited scope of the review on the merits appropriate at this stage, I am unable to conclude that the Gendrons’ position is either frivolous or vexatious.
[21] If the Gendrons are ultimately successful, they will face irreparable harm through the loss of their home, if the sale is not enjoined, as will TD Bank. As the court pointed out in 1331679 Ontario Ltd. v. Brampton (City) , 92 O.R. (3d) 621, at para. 37 , under s. 379(14) of the Municipal Act, the City has no duty to obtain the highest or best price for the land.
[22] The balance of convenience overwhelmingly favours the granting of an interlocutory injunction. If the sale is enjoined, the City will suffer nothing but a short delay. It will continue to have security for the full amount of its claim. If the sale proceeds, the Gendrons will lose their home, as well as any right to redeem their interest by payment of the amount eventually found to be due and owing.
[23] The City argues that the interlocutory injunction should be denied as a result of the Gendrons’ failure to provide an undertaking concerning damages. However, given that the City will continue to have security for the full amount of its claim, it is difficult to see how the order could cause damage. I also note that in granting the injunction on the previous occasion, Sosna J. accepted that the Gendrons are impecunious, and held that the issue was therefore moot (paragraph 54).
Disposition
[24] For the reasons given, there will be an order prohibiting the City of Kawartha Lakes from selling the Gendrons’ home pending final disposition of this action, or further order of the court. There will also be an order that this matter be given priority during the May 2020 sittings.
[25] If the parties are unable to agree on costs, I will consider brief written argument provided that it is delivered to monica.mayer@ontario.ca no later than April 10, 2020.