COURT FILE NO.: CV-19-623680
DATE: 20210602
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Don Mills Residents Inc.
Applicant
– and –
City of Toronto and C/F Realty Holding Ltd.
Respondents
Conner Harris and Sarah Spitz, for the Applicant
Roberto E. Zuech and Molly Lowson, for the Respondents
HEARD: February 16, 2021
REASONS FOR DECISION
FERGUSON J.:
[1] In 2010, the City of Toronto (the "City"), C/F Realty Holdings Ltd. ("CF"), and the Don Mills Residents Inc. (the "DMRI") entered into minutes of settlement (the "minutes"). The minutes dealt with several issues, but the provisions at issue here concern the construction of a community centre in the Don Mills neighbourhood. These parties entered into the minutes in the context of settling planning appeals at the Ontario Municipal Board (the "OMB"), brought by CF for Phase 2 of a redevelopment at the Don Mills Centre (“DMC”). The settlement led to the OMB’s approval of Official Plan Amendment No. 587 ("OPA 587") and Zoning By-law No. 342‑2011 ("ZBL 342-2011").
[2] The minutes set in place a framework for the Phase 2 redevelopment of the DMC. Included in the minutes, among other things, are provisions requiring CF to construct a community centre located at 966 Don Mills Road (the "DMCC"). The DMRI’s position is that CF and/or the City is obligated to build the DMCC at that location. The respondents’ position is that the minutes do not require the City to construct, maintain, or operate the DMCC and that the planning situation has changed since the minutes were entered into.
[3] The DMRI requests the following relief:
(a) an order for declaratory relief as set out in paragraphs 1 (a) – (c) of the notice of application;
(b) an order for injunctive relief as set out in paragraphs 1 (d) – (g) of the notice of application;
(c) an order directing a trial to determine consequential damages arising from the City’s breach of the minutes.
[4] The City requests an order dismissing the application. The application is dismissed.
BACKGROUND FACTS
A. The minutes are a framework for the Phase 2 redevelopment at the DMC
[5] The DMC comprises land southwest of the Don Mills Road and Lawrence Avenue East intersection. It currently includes the Shops at Don Mills outdoor shopping centre. CF owns the land and is undertaking the redevelopment of the DMC.
[6] In 2007, CF initiated an appeal to the OMB for the Phase 2 redevelopment of the DMC. In March 2010, minutes were provided to the OMB as part of a resolution to that appeal process. CF and the City were parties to the appeal and the OMB granted the DMRI party status. On May 25, 2010, the OMB allowed the appeal, withholding the final order pending receipt of the final official plan amendment and zoning by-law.
[7] The minutes create a framework for the implementation of the Phase 2 redevelopment and the community benefits to be secured in a section 37 agreement (pursuant to the Planning Act). In addition to provisions regarding the proposed DMCC, the minutes also include provisions dealing with four other areas: land exchange and arena lease, parkland obligations and cash-in-lieu, easements and rights-of-way, and servicing.
[8] At the time they entered into the minutes, it was the City's intention that the framework set out in the minutes be implemented through a section 37 agreement, and various other agreements, outlined in the minutes. The DMRI was aware of this.
[9] The minutes contain, among other things, the following provisions regarding the DMCC:
CF will construct or cause to be constructed a publicly accessible community centre (the "CC") that has floor space area of at least 48,570 sq. ft. The value of the CC shall be based on the City's present benchmark of $350.00 per sq. ft. multiplied by the floor space area of 48,570 sq. ft. for a total of $17 million. The per sq. ft. benchmark value of $350.00, as well as the total value of the CC, will be indexed annually based upon 2010 dollars.
Unless otherwise mutually agreed upon by the General Manager, Parks, Forestry, and Recreation of the City of Toronto (the "GM") and CF, the CC will include among its principal functional components a competition-size swimming pool, fitness area, running/ walking track, meeting rooms, gymnasium and auditorium (which may be combined with the gymnasium). In addition, at the option of CF, but subject to the provisions of Schedule B, the CC may include a partial or complete level of underground parking.
CF shall provide letters of credit (collectively, the "LCs"), in a form satisfactory to the City Solicitor, as set out in paragraph 6 of Schedule B and in the aggregate amount of $17 million (indexed annually from 2010 dollars) to secure the substantial completion of construction of the CC by the deadline set out in section 5 above. In the event that the CF Landlord fails to substantially complete (as determined in accordance with the Construction Lien Act (Ontario)) the CC by October 12, 2020, the City may draw down on the LCs to the extent necessary to pay the costs it incurs to complete the construction of the CC. If the LCs are drawn down by the City, then the Ground Lease as defined in section 9 shall automatically be terminated (without any further action by the parties thereto).
The CC will be operated by a community centre operator (the "Operator") selected by CF, acceptable to the GM, and in consultation with DMRI. The Operator will be an arms-length not-for-profit organization.
[10] In addition, the minutes state that CF must satisfy the City's environmental policies with respect to the conveyance of lands, including the DMCC lands, which require a record of site condition to be filed to demonstrate that the lands are in a suitable environmental state. CF has not yet satisfied these policies.
[11] In addition to executing the section 37 agreement, the following agreements and documents must be negotiated and executed to implement the framework set out in the minutes. The DMRI will not be a party to any of these agreements.
▪ site plan agreement to build the community centre;
▪ ground lease between the City and CF for a term of 49 years (section 9);
▪ sublease between CF and third party operator (section 9(a));
▪ potential subleases from CF to retail/medical/other users of non-community centre uses on community centre lands (section 9(b));
▪ arena lease (section 12(a));
▪ easement documents in relation to access to CC lands (section 12(c));
▪ agreement of purchase and sale for the option to CF to purchase the arena (section 13);
▪ escrow agreement for the park conveyance (section 18);
▪ easement documents re public access easements (section 25);
▪ municipal infrastructure agreement and/or other servicing agreements that may be required (section 26);
▪ revised Phase 1 site plan agreement to accord with the minutes (section 28);
▪ schedule C-1 #1 contemplates easement documents re hydro lands (a portion of Block G owned by Toronto Hydro).
[12] The minutes state that the parties "will cooperate to achieve the intent of this settlement in a timely fashion". The intent of the minutes is achieved through the execution of the section 37 agreement, and the other agreements required by the minutes. The minutes themselves do not implement or secure any of the community benefits described therein, including the DMCC.
B. The section 37 agreement implementing the intent of the minutes
[13] Pursuant to section 37 of the Planning Act, the City may grant increases in permitted height and/or density through a zoning by-law in exchange for community benefits. Section 37 benefits are provided primarily in the local community in which the development is located. These benefits may include cash-in-lieu contributions, which are monetary funds towards local benefits or capital facilities, and in-kind contributions whereby the developer will directly provide or construct the community benefit. Pursuant to section 37(3) of the Planning Act, the City may require the owner to enter into one or more agreements with the municipality, known as section 37 agreements.
[14] On February 25, 2011, the section 37 agreement between the City and CF was registered. The DMRI is not a party to the section 37 agreement, as it is not the owner of the Phase 2 redevelopment lands. The section 37 agreement is the means by which the City secured the community benefits outlined in the minutes from CF.
[15] Since the DMRI is not a party to the section 37 agreement, revisions can be made without its consent or approval. The agreement permits that CF and the City "… may modify, revise, or amend this agreement from time to time and upon the consent of both parties in writing…". This provision is not limited to any particular matter within the agreement. The section 37 agreement has been amended several times, all by the City with CF, without the consent or approval of the DMRI.
C. City council adopts staff recommendation to proceed with the CRC
[16] At its meeting on July 16-18, 2019, City council adopted staff recommendations to proceed with the "preferred facility," which is the development of the 125,000 sq. ft. Celestica Recreation Centre (“CRC”), to serve the communities within the broader Don Mills corridor. City council decided not to proceed with the "alternate proposal," which consisted of two smaller recreation facilities, one 27,000 sq. ft. community centre at the site of the DMCC and one 100,000 sq. ft. community centre at the CRC site.
[17] Specifically, the recommendations adopted by City council directed staff to implement its decision by:
• initiating amendments to the existing section 37 agreement for the DMC, as it pertains to the provisions of the DMCC, and the Don Mills Civitan Arena land agreement;
• initiating a zoning by-law amendment, as it pertains to the provisions of the DMCC, and potential alternative community uses for that site;
• initiating an official plan amendment, as necessary; and
• reporting to City council regarding the final form of the recommended zoning by‑law amendment and any official plan amendment.
[18] City council also directed staff to undertake a review of other public uses that may be accommodated at the DMCC site.
[19] The staff recommendations adopted by City council were contained in a report for action to City council, titled "Planning Recreation Facilities for the Don Mills Communities", dated June 19, 2019 (the "report").
[20] In 2010, when the minutes were agreed to, there was limited development or growth proposed or anticipated in the Don Mills corridor, This area is approximately bounded by York Mills Road in the north, Leslie Street in the west, the Don River in the east, and the southern boundary of the Flemingdon Park/hydro corridor south of Eglinton Avenue East.
[21] The report summarized how best to provide recreation facilities within the Don Mills corridor, as a result of the following recent developments: (i) increased and projected population growth in the corridor; (ii) the construction of the Eglinton Crosstown Light Rail Transit (the "LRT"); (iii) the approval of a new mixed-use community at the northwest quadrant of Eglinton Avenue East and Don Mills Road; and (iv) the City’s securing an approximately 5.5 acre park within that new community, on which the proposed CRC will be built.
D. The Don Mills corridor sees transformational change
(i) Increased and projected population growth in the corridor
[22] Since the minutes were executed in 2010, the Don Mills corridor has seen transformational change and population growth (both current and projected). This is particularly the case in the area surrounding the intersection of Don Mills Road and Eglinton Avenue East. Of the anticipated population growth of about 25,000 residents, three quarters will be concentrated at this intersection. This transformation is attributed in large part to the planning and implementation of the LRT and the approval of a large scale mixed-use development on a large tract of land about 60 acres in size, located at the northwest corner of Don Mills Road and Eglinton Avenue East (the "Celestica site"). In addition to the 2,050 residential units approved through the DMC Phase 2 redevelopment, between 2011 and 2018, 12,650 residential units were approved in the area.
[23] In 2014, the City proceeded with the final approvals and implementation strategy to enable the construction of the LRT. In 2014, the City also adopted the Eglinton Connects Planning Study, which made the intersection of Don Mills Road and Eglinton Avenue East (where an Eglinton crosstown LRT station is located) a focus area for intensification.
[24] The Celestica site is located about 1000 metres directly south of the DMC site. Historically, this site was the home to IBM Canada and then Celestica Inc. This site was used for offices and manufacturing and did not permit residential development. This changed in 2018, when the Celestica site was approved for mixed-use development.
[25] As part of the mixed-use redevelopment proposed for the Celestica site, the City secured 5.58 acres of parkland and a site for a large recreation facility. This site will be the location of the 125,000 sq. ft. CRC, including a new twin-pad ice arena, which will replace the aging single ice pad Civitan Arena at the DMC.
[26] The CRC will have the following features, in keeping with the new planning policies:
• a single large integrated facility of 125,000 sq. ft.;
• one of the largest facilities in the City, featuring a twin-pad arena that can be converted to multi-use indoor sports for year-round use;
• a full-size gym with a walking track;
• multi-purpose rooms and amenity space;
• an aquatic facility that includes a six-lane pool and leisure pool; and,
built adjacent to a large one hectare (2.5 acre) park offering the opportunity for users to enjoy both indoor and outdoor recreation experiences.
E. The City’s consultation efforts regarding the Celestica Recreation Centre
[27] The City conducted public consultation regarding the proposed community centre options in the Don Mills corridor throughout the first half of 2019. The public consultation effort engaged more than 525 local residents and stakeholders through focus groups, pop-up consultations, online feedback forms, and a public open house meeting. The City consulted with the DMRI on March 13, 2019.The DMRI also hosted a public town hall on June 6, 2019, which was attended by City staff, who answered attendees' questions.
[28] The DMRI had previously voiced its support for relocating the Don Mills Civitan Arena to the Celestica lands, in an email dated June 12, 2016. In another email, Brian Story, then President of the DMRI, acknowledged that the Celestica site is less than one kilometre from the Don Mills Civitan Arena, with "excellent access from Don Mills".
[29] In general, the majority of the public engaged favoured the CRC.There was broad public support for a single, consolidated multi-use site that is accessible from rapid transit and located in proximity to high population areas. There was also recognition that the CRC would enhance equity of access to recreational programming because it would be closer to where the projected population growth is concentrated at Don Mills Road and Eglinton Avenue, and closer to a City‑designated neighbourhood improvement area.
[30] Pursuant to section 7 of the minutes, the DMRI was consulted regarding the search for a community centre operator. In April 2017, a steering committee comprised of City staff, local residents, and the ward councillor was struck to identify an arm’s-length not-for-profit operator, as required by the section 37 agreement.Various members of the DMRI participated in the steering committee. The committee met several times.Various potential operators were considered, including the YMCA, YWCA, Boys and Girls Club, Variety Village and Better Living Health and Community Services.
[31] The potential operators were unsuitable for various reasons. They lacked experience operating large complex community recreation centres, did not have financial capacity and/or required municipal subsidy, land ownership and/or capital investments as conditions of their agreement to operate.Members of the DMRI were aware of these challenges through their participation on the steering committee.
[32] In August of 2018, after the opportunity for the community centre on the Celestica lands emerged, City staff advised the steering committee that there was a need for more review and consultation of community needs, given the changes to the area since 2010.
F. The DMRI’s application against CF is dismissed
[33] The DMRI issued a notice of application against the City and CF on July 12, 2019. The DMRI's application as against CF was dismissed on July 13, 2020.
Appeal routes:
[34] Decisions and non-decisions of City council about proposed zoning by-law amendments and official plan amendments may be appealed to the LPAT by proponents and affected parties, such as local residents and ratepayers’ groups (including the DMRI). The LPAT has exclusive jurisdiction in all matters within its jurisdiction and has authority to hear and determine all questions of law or of fact.
ANALYSIS
[35] Are the minutes of settlement a binding and enforceable contract?
Context and the Planning Act regime:
[36] The City submits that nothing in the minutes obligates it to construct, operate or maintain the DMCC. Among other reasons, the minutes state that CF, not the City, "will construct or cause to be constructed" the DMCC. The City relies on the context of the Planning Act regime to support its contention that it is not bound by the minutes.
[37] The DMRI submits that the text of the agreement and the surrounding circumstances demonstrate the parties’ intention to create a binding contract. The parties’ lengthy negotiations, multiple offers, and agreement on essential terms of the settlement demonstrate an intention to be bound. The DMRI further submits that the age of an agreement and changing circumstances are irrelevant considerations in contractual interpretation. They argue that the minutes should be read and interpreted based only on the minutes themselves and the circumstances in which they were executed.
[38] Adopting this approach would ignore the Planning Act regime, which is the context in which the planning appeals were brought that led to the minutes. In Sattva Capital Corp. v. Creston Moly Corp., the Supreme Court outlined the correct approach to contract interpretation. The court stated:
"…a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:
No contracts are made in a vacuum: there is always a setting in which they have to be placed. . ."[1]
[39] As the City points out, the DMRI’s position does not consider that the land-use planning process is amenable to change. The Planning Act recognizes that the needs of an area may change over time due to various factors, including land uses, transportation infrastructure, community services and facilities, population growth, and policy direction. The Planning Act is designed so that zoning by-laws and official plans may be amended from time to time to reflect changes in an area. Specifically, sections 17, 22, and 34 of the Planning Act set out the manner in which amendments are made to official plans and zoning by‑laws and provide how appeals to such amendments can be made.
[40] Municipalities must exercise their powers in the public interest. This is an open and transparent process, with opportunities for persons and groups to participate. If persons and groups who have participated in the process are not content with a municipal approval of a zoning by-law or Official Plan amendment, they may appeal the decision to the LPAT, where the planning merits can be reviewed. The LPAT has expertise in land-use planning decision-making in Ontario. It is routinely asked to determine what constitutes good planning for a community, taking into account the opinions of various parties, including municipalities, developers, community groups and planners. I therefore reject the DMRI’s assertion that community groups would be left with no way of enforcing their rights under settlement agreements if the City’s position is accepted.
[41] The DMRI also argues that because the minutes are part of a settlement agreement, they should be interpreted in the same manner as ordinary contracts. However, this does not assist the DMRI, given the distinction between commercial contracts and planning agreements recognized in the jurisprudence.
[42] In Hi-Rise Structures Inc. v. Scarborough (City), the Court of Appeal for Ontario considered the OMB's authority to amend an executed site plan agreement. In that case, a developer wanted to amend a site plan agreement to permit further development. The City of Scarborough refused. The OMB felt that the site plan agreement, in the context of the Planning Act, was final and, further, that there was no language in the agreement to permit a further amendment. The Divisional Court reversed the OMB decision and the City appealed its decision to the Court of Appeal. In dismissing the City's appeal, the Court of Appeal held that:
The entire Planning Act is designed to assure that the powers delegated to municipalities are subject to review by the Municipal Board [now LPAT] … The ongoing planning for future use of land must serve a broad range of community interests, and review by the Municipal Board offers assurance that all interests are considered. Further, planning cannot be done at one time, for all time, and the [Planning] Act is therefore structured to contemplate amendments to Official Plans and zoning by-laws. To hold that a site plan agreement cannot be changed without the consent of the municipality would alter the entire philosophy of the planning process … a site plan agreement must be viewed primarily as a planning instrument, remaining a contract for enforcement purposes from time to time, but amenable to the change which is inherent in all planning.[2]
[43] The Court of Appeal specifically recognized the difference between planning agreements and commercial contracts, stating,
Site plan agreements are simply not commercial agreements in the traditional sense. They represent the public interest in the finite planning of a portion of the municipality. If the owner feels that the council is being unreasonable in its requirements, an appeal can be taken to the Municipal Board.[3]
[44] Furthermore, the court was clear that, though provisions of the Planning Act state that "every decision or order of the [OMB] is final," this did not mean that all decisions were "everlasting".[4] The court recognized that such a reading may "prevent a fresh consideration of the planning of the community" and do a "disservice to the broader community interest".[5]
[45] Similarly, in this case, I cannot interpret the minutes as a contract that is final and everlasting. To do so would be to require the express consent of the DMRI before any further amendments could be made to the applicable zoning by-law, official plan and the section 37 agreement in this matter. This interpretation, as in Hi-Rise, "would alter the entire philosophy of the planning process", as it would not permit any further amendments to the planning instruments (without the consent of the DMRI) required to take into account the future use of land to serve the broader community interests.
[46] Subsequent case law has embraced the notion that agreements made under the Planning Act are different from commercial contracts.[6] In addition, this court has held that these types of agreements are "planning instruments," subject to changes in public policy and law.[7]
[47] It is incumbent on the City to make evidence-based decisions consistent with the Planning Act and related policies, City council direction, and feedback from public engagement processes. Their decision-making on whether to construct the CRC or the DMCC reflects this responsibility. Council decided, at its July 2019 meeting, to proceed with the CRC and not to proceed with the proposed DMCC. This decision was based on a staff report that was prepared after extensive public consultation was undertaken reviewing how best to provide recreation facilities in the Don Mills corridor. In making its recommendation, the staff report took into account recent transformative developments in the Don Mills corridor area. This was all reasonable.
[48] Were I to find that the minutes are a binding contract and award specific performance, this would thwart the intent of the Planning Act philosophy. It would also complicate, or possibly prevent, any planning decisions made by council regarding the provision of recreation facilities in the DMC. It would essentially mean that the City could not maximize the benefits of the 125,000 sq. ft. CRC.
Further agreements required:
[49] The City also argues that additional agreements and planning instruments are necessary for the minutes to be binding. The DMRI’s position is that these agreements and instruments do not affect the construction of the DMCC.
[50] The minutes are a step removed from being considered a planning contract. Even if the minutes are read in isolation of the Planning Act regime, they fail to create a binding contract, as they leave many essential terms dependent on further agreements.
[51] The minutes set out the framework for the Phase 2 redevelopment of the DMC site as requiring further agreements, such as the section 37 agreement, to implement the intent of the minutes. At most, the minutes outline a planning framework to be implemented via the execution of various planning instruments, such as the zoning by-law amendment and official plan amendment approved by the OMB, the section 37 agreement executed by the City and CF, and several other agreements yet to be executed.
[52] The DMRI is not a party to the section 37 agreement and is not entitled to be a party to any of the other agreements required to implement the community centre provisions in the minutes. The minutes do not govern a contractual relationship between the City and the DMRI. The DMRI was a party to the minutes by virtue of the fact that it was a party to the appeal at the OMB. It is not obligated to provide anything in furtherance of the proposed DMCC, as would a regular party entering into a binding contract. It was left up to the City and CF to enter into, negotiate and execute all necessary agreements and documents, as well as to ensure that all environmental approvals are obtained that are required to give effect to the provisions set out in the minutes. If the minutes are read as a binding contract, it would mean that a party with no obligations under the minutes would be entitled to dictate whether amendments can be made to the planning instruments and agreements required to be executed by the City and the owner of the lands.
[53] The Court of Appeal for Ontario’s reasoning in Bawitko Investments Ltd v. Kernels Popcorn supports this finding. The court held:
When the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. In other words, in such circumstances the "contract to make a contract" is not a contract at all.[8]
[54] Furthermore, the Federal Court of Appeal has held:
[W]hether or not a "subject to formal agreement" clause precludes a finding of agreement is a question of construction. That question focuses on whether the execution of the further contract is a condition or term of the bargain, or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through … in the former case, there is no enforceable contract, in the latter, there is.[9]
This court has also stated that "in order for there to be a binding contract, the parties must agree on all of the essential terms of the agreement.[10]
[55] The minutes do not meet these requirements in this case. They are a “contract to make a contract”,[11] and do not in themselves create the obligation proposed by the DMRI. The execution of a section 37 agreement and other agreements are conditions or terms of the minutes and the DMRI is not a party to any of them. The section 37 agreement is the formal planning instrument that secures the DMCC. The construction of the DMCC is also conditional on the execution of the other required agreements. If these agreements, such as the 49-year ground lease (between the City and CF) and the long term sublease (between CF and an operator yet to be determined), fail to be executed for whatever reason, the DMCC as set out in the minutes cannot come to fruition. Similarly, if the lands on which the proposed community centre rests fail to be remediated to the environmental standards required by the City, the City is not obligated to accept the conveyance of the lands and thus the community centre cannot be built as envisioned by the minutes.
[56] The minutes contemplate potential changes to the functional components of the community centre. Section 4 of the minutes states that "unless otherwise mutually agreed upon by the General Manager, Parks, Forestry and Recreation of the City of Toronto, and [CF], the community centre will include…". Thus, the minutes explicitly anticipate potential changes to the very essence of the community centre - its functional components - without consultation or consent of the DMRI.
CF, not the City, is obligated to construct DMCC:
[57] The DMRI submits that section 6 of the minutes should be read as creating an obligation on the City to build the DMCC in the event of non-completion by CF. This section states that CF will provide letters of credit in the amount of $17 million “to secure the substantial completion of construction of the CC by the deadline set out in section 5[..]”. I do not accept this interpretation of that section. Section 6, in part, states that "in the event that [CF] fails to substantially complete the Don Mills Community Centre…the City may draw down on the [letters of credit] …to complete the construction". This is the wording the DMRI relies on for their submission that the City is required to build the DMCC. However, section 6 is a discretionary provision, used by the City to give the letters of credit some teeth. In other words, this provision gives the City the option of drawing down on the letters of credit and completing the community centre should CF fail to do so.
[58] The minutes do not create obligations on the City to either construct or operate the DMCC. The only obligation regarding construction is contained in section 2, which states that "CF will construct or cause to be constructed a publicly accessible community centre that has floor space area of at least 48,570 sq. ft." Reading the minutes as a whole, giving the words in sections 2 and 6 their "ordinary and grammatical meaning", it is clear that CF is the only party obligated to construct the DMCC.[12]
[59] There was never any intention that the City would construct the community centre. This is supported by City council's confidential instructions to accept the settlement offer, which were made public on February 24, 2010. Page 4 of those instructions states that, "[t]he Minutes of Settlement commit the applicant [CF] to construct and provide to the City, a new 48,570 sq. ft. community centre, valued at $17 million". This interpretation is further supported by CF. In a letter dated April 1, 2020 that CF provided to the DMRI as a result of this litigation, it states:
"At the time of entering into: (i) the Minutes of Settlement … (ii) the Section 37 Agreement… and (iii) the Section 37 Amending Agreement …C/F Realty Holdings Ltd. intended to build a community centre that satisfied the specifications of the Minutes of Settlement on the CC Lands (as defined in the Minutes), in accordance with its obligations under the respective agreements."
Clearly, the intention of the City and CF, at the time the minutes were entered into, was that CF would build the proposed DMCC as set out in the minutes.
The CRC is a better use of resources than the DMCC:
[60] Because I have found that the minutes of settlement do not require the City to construct the DMCC, I will now consider the City’s arguments for why the CRC is a better choice than the DMCC. I find that it is.
[61] Since the minutes were agreed to in 2010, the City has established new policies, in keeping with evolving provincial planning policies and its official plan, to guide the planning and development of recreation facilities. These policies include the facilities master plan, a corresponding implementation strategy, and associated community recreation centre design guidelines.
[62] The facilities master plan states that prior to initiating the design of any new recreation facility, a planning review of the area must be undertaken to consider factors such as changes in: population and growth, service area, new facilities and park opportunities, usage of existing and nearby facilities, overall trends in recreation demand, design standards and programming and operating efficiencies. The plan also recognizes the high construction and maintenance costs of community recreation centres. Therefore, decisions regarding capital improvements must be evidence-based to achieve maximum value.
[63] The City made the following arguments in support of constructing the CRC instead of the DMCC. Larger, integrated multi-use community recreation facilities draw from a larger catchment of users than smaller, single-use facilities and focus resources on spaces that promote greater public access and inclusive programming and create a more efficient use of staff resources. Larger multi-use centres are more efficient and provide better value for money. On a per square foot basis, larger centres tend to be more cost efficient to build (i.e. mobilization, start-up, multiple construction crews and project management teams) and operate due to economies of scale. Overall service levels are higher and the cost per operating hour less when comparing one large facility against two smaller ones.
[64] Additionally, one large, multi-purpose community recreation centre has the potential to serve approximately 10 to 15 percent more residents than two mid-size facilities, as contemplated by the alternate proposal, both now and in the future.The CRC would support longer operating hours than a smaller facility due to higher overall utilization rates and operational costs savings from an economy of scale.
[65] The CRC would serve mostly the same catchment area as would the DMCC, but with the added benefit of serving more communities who need it. The CRC is 900 metres away from the proposed DMCC. As a result, the CRC would serve 30 percent more users (about 18,000 residents).It would also serve the Flemingdon Park and Thorncliffe Park communities, which have a high proportion of low‑income, vulnerable, newcomer and other equity-seeking residents. The average household income of the population served by the DMCC is $89,310, while the average household income of the population south of Eglinton Avenue East in proximity to the CRC is $58,439, according to the 2016 census.
[66] Unlike the DMCC, which would be operated by a third-party community centre operator, the CRC will be operated by City of Toronto‑Parks, Forestry and Recreation Division, offering a range of programs and services provided at facilities across the City.
[67] Due to site size and facility requirements, the DMCC would need to have an undersized pool facility (i.e. a single tank configuration with fewer than six lanes). This would not meet the aquatic programming needs of the community or the City's design best practices of offering two pool tanks.
[68] It would also be easier to construct the CRC in compliance with the requirements of the Accessibility for Ontarians with Disabilities Act design guidelines. In particular, the space required to accommodate change rooms, washrooms, overall facility circulation, and an accessible elevator would add additional costs to the construction of the DMCC.
[69] Moreover, the amount of money identified in the minutes and the section 37 agreement is no longer sufficient to construct the DMCC.The $17 million cost was based on a $350 per square foot indexed value ($21 million as of June of 2019), which is no longer a viable benchmark for the construction of a new community centre.This assessment is based on recently constructed, publicly and competitively tendered City community centres.
[70] The City points out that it has a responsibility to serve the public by maximizing the efficiency of the expenditure of scarce public resources and addressing both existing and anticipated service gaps. The CRC is adjacent to a public park, serves a larger population, is in closer proximity to anticipated growth, is on a rapid transit line, with longer operating hours, more diverse programming, greater accessibility, and is more cost efficient than the DMCC. Compromising on the design and location of the community centre would result in underserving the recreational program needs of the current and future populations within the Don Mills corridor.
[71] I accept that the CRC would better serve the Don Mills community and would be a better use of public resources than the DMCC.
REMEDY
Specific performance is not appropriate:
[72] The DMRI seeks declaratory orders from this court that the minutes of settlement require, among other things, the construction of the DMCC on the Community Centre Lands and no other location. It also seeks a permanent injunction requiring the construction of the DMCC on these lands. This essentially amounts to an order for specific performance, and I decline to grant it for the following reasons.
[73] This court has held that "generally the court will not order a contract to build or to repair to be specifically performed."[13] There is an exception to the general rule that a court will not enforce specific performance of a building contract, but it is not applicable in these circumstances. In the case of a purchaser of a home and a builder, this court held that in order for the exception to apply, a plaintiff must establish:
(i) that the building work, of which he seeks to enforce the performance, is defined by the contract; that is to say, that the particulars of the work are so far definitely ascertained that the court can sufficiently see what is the exact nature of the work of which it is asked to order the performance;
(ii) that the plaintiff has a substantial interest in having the contract performed, which is of such a nature that he cannot adequately be compensated for breach of the contract by damages; and
(iii) that the defendant has by the contract obtained possession of land on which the work is contracted to be done.[14]
In this case, none of these elements favour the DMRI.
[74] As has been detailed, the minutes set out a framework for the Phase 2 redevelopment at the DMC. This framework required that CF and the City enter into a section 37 agreement and other agreements and planning documents to facilitate the redevelopment, including the provision of the proposed DMCC.
[75] The minutes do not set out with any specificity the nature of the work that the DMRI is asking this court to order to be performed. At best, the minutes state that a community centre, with a floor space area of at least 48,570 sq. ft., is to be constructed by CF at 966 Don Mills Road. The minutes do not address the multitude of issues that need to be agreed upon before the construction could begin, such as an agreed upon design and what the community centre will contain. For construction to be completed, these issues would need to be dealt with through many more agreements and documents, including architectural and structural drawings.
DMRI has not suffered damages:
[76] The DMRI has not demonstrated how it would suffer any damages as a result of the non‑completion of the DMCC. The DMRI does not own the lands at 966 Don Mills Road and has not provided evidence to support its assertion that it has suffered losses in property value or other individual damages. The DMRI also has another means of recourse, as previously mentioned. The planning instruments required to implement City council's decision not to proceed with the DMCC have yet to be presented to and considered by council. If the zoning by-law amendments and, if necessary, official plan amendments, are eventually put forward and adopted by council, they may be appealed to the LPAT under the provisions of the Planning Act. The DMRI will have the opportunity to appeal these decisions, if they are made, and raise the minutes in that forum.[15]
CONCLUSIONS
[77] To summarize, this application is dismissed for the following reasons:
(i) the minutes do not require the City to construct, maintain or operate the DMCC;
(ii) the planning situation has changed since the minutes were entered into as set out above in paragraphs 21 to 26;
(iii) the DMRI is not a party to the various agreements set out above at paragraph 11;
(iv) the DMRI is not a party to the section 37 agreement between the City and CF as it is not an owner of the Phase 2 redevelopment lands. Since it is not a party to the agreement, revisions can be made without its consent or approval.
[78] If the parties cannot agree on costs, I am prepared to receive brief submissions from the plaintiff by June 21, 2021 and from the defendant by 14 days thereafter. Any cost submissions may be emailed to my assistant at: lorie.waltenbury@ontario.ca.
Released: June 2, 2021
COURT FILE NO.: CV-19-623680
DATE: 20210602
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Don Mills Residents Inc.
Applicant
– and –
City of Toronto and C/F Realty Holding Ltd.
Respondents
REASONS FOR DECISION
J.E. Ferguson J.
Released: June 2, 2021
[1] Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, at para. 47 [Sattva Capital].
[2] Hi-Rise Structures Inc. v. Scarborough (City) (1992), 1992 7739 (ON CA), 10 O.R. (3d) 299, 94 DLR (4th) 385 (C.A.), at para. 16.
[3] Ibid, at para. 15.
[4] Ibid, at para. 22.
[5] Ibid, at paras. 21-22.
[6] London (City) v. Wonderland Power Centre Inc., 2007 19792 (Ont. S.C.), at para. 51.
[7] Simcoe Muskoka Catholic District School Board v. Collingwood (Town), 2007 44182 (Ont. S.C.) at paras. 17, 25.
[8] Bawitko Investments Ltd v. Kernels Popcorn, 1991 2734 (Ont. C.A.), at para. 21.
[9] Apotex Inc. v. Allergan Inc., 2016 FCA 155, 399 DLR (4th) 549, at paras. 38-39.
[10] Georgian Windpower v. Stelco, 2012 ONSC 3759, at para. 122.
[11] Kernels Popcorn, supra note 9.
[12] Sattva Capital, supra note 2, at para. 47.
[13] See e.g. Tanenbaum v. W.J. Bell Paper Co., 1960 119 (ON SC), [1956] O.R. 278, 4 DLR (2d) 177, at para. 53 [Tanenbaum], Greek Canadian v. Clergy Properties Limited, 2014 ONSC 5156, at para. 28.
[15] Snopko v. Union Gas Ltd., 2010 ONCA 248, 100 O.R. (3d) 161, at para. 27; Great Land (Westwood) Inc. v. The Regional Municipality of York, 2016 ONSC 5975, at paras. 38-39.