Court File and Parties

COURT FILE NO.: C-483-17 DATE: 20220315 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Geil Style Enterprises Inc. and Jason Geil, Plaintiffs AND: The Corporation of the Township of North Dumfries, Defendant

BEFORE: Justice D.A. Broad

COUNSEL: Michael J. Paiva and Gwen Croser, for the Plaintiffs/Responding Parties Daniel W. Veinot, for the Defendant/Moving Party

HEARD: March 3, 2022

Endorsement

Background

[1] The plaintiff Geil Style Enterprises (“Geil Enterprises”) has operated a large-scale fill importation business (the “fill operation”) on property (the “property”) located at 1943 Roseville Road, in the Township of North Dumfries (the “Township”) since it acquired the property in 2003.

[2] The plaintiff Jason Geil (“Geil”) is the principal of Geil Enterprises.

[3] As part of the fill operation Geil Enterprises has continued to alter the grade of the property without first obtaining a permit to do so pursuant to the Township’s By-law 2612-14 (the “Current Fill By-Law’) which came into force on February 3, 2014. Geil Enterprises failed to obtain a permit for the fill operation pursuant to the predecessor to the Current Fill By-Law, By-law 2392-09 (the “Original Fill By-Law”) which came into force on December 7 2009 until February 9, 2011. This permit was revoked by the Township on June 3, 2014,

[4] The Township took a series of enforcement steps against Geil Enterprises under the Original Fill By-law and the Current Fill By-law commencing in May 2010 and continuing to October 2021, and took enforcement steps against Geil personally in December 2021.

[5] The Current Fill By-law, passed by Council of the Township pursuant to subsection 142(2) of the Municipal Act, 2001, S.O. 2001, c. 25, provides at section 2.1 that “no person shall Alter, or permit or cause any Alteration within the Township without a Permit.” Section 2.2 provides that “no person shall fail to comply with any term or condition of a Permit.”

[6] “Alteration” is defined by section 1.1(a) of the Current Fill By-law as the “placement or Dumping of Fill on land, the removal of Topsoil from land, and/or the alteration of the Grade of land by any means, and “Alter” and “Altered” shall have a corresponding meaning.”

[7] “Permit” is defined by section 1.1 (k) as “a permit to Alter land issued by the Township” under the by-law.

[8] Section 11.3 of the Current Fill By-law provides that a permit issued under the Original Fill By-law shall be deemed a Permit under the Current Fill By-law and shall be subject to all provisions of it.

[9] Section 8.4 of the Current Fill By-law provides that, subject to section 11.3, its provisions shall not apply to Alterations undertaken prior to its final passing, and for greater certainty,

(a) any Alteration carried out following the passing of the bylaw shall be undertaken in compliance with all of its provisions, including the requirement that a Permit be obtained; and

(b) any continuation of an Alteration commenced prior to the passing of the bylaw shall require a Permit in respect of that portion or stage of the Alteration carried out following the passing of the by-law.

[10] The Current Fill By-law provides at section 6.1 that the Municipal Law Enforcement Officer may, if he/she has reasonable grounds to believe that a contravention of the by-law has occurred, make an order requiring the discontinuance of the contravening activity. Pursuant to section 9.1 a person who contravenes any provision of the by-law may be charged with an offence.

[11] There is no dispute that large quantities of fill have been and continue to be imported to the property daily as part of the fill operation, nor is there a dispute that neither Geil Enterprises nor Geil hold a permit issued pursuant to the Current Fill By-law.

[12] By Statement of Claim issued June 30, 2017, and amended January 8, 2018 (the “Geil Action”), Geil Enterprises and Geil brought an action against the Township seeking the following relief:

(a) a declaration that they are exempt from the Current Fill By-law, or are exempt from the importation of fill and alteration of land provisions of that bylaw, and in the alternative, a declaration that they are not in violation of the Current Fill By-law;

(b) a declaration that they were exempt from the Original Fill By-law or benefited from an exemption from the importation of fill and alteration of land provisions of that by-law, and in the alternative, a declaration that they did not violate the Original Fill By-law;

(c) an order enjoining the Township from enforcing the Current Fill By-law;

(d) a declaration that they are exempt from any future by-law enacted by the Township with the effect of attempting to restrict their construction and development of the berm on the property; and

(e) an order prohibiting the Township from enforcing any further by-law attempting to restrict their ongoing construction and development of the berm

[13] By Statement of Defence and Counterclaim dated June 30, 2017, the Township defended the Geil Action and counterclaimed for an interim and permanent injunction restraining Geil Enterprises and Geil from placing or dumping fill, removing topsoil, or altering the grade of the property, without first having obtained a permit issued by the Township pursuant to the Current Fill By-law.

[14] The Township has brought a motion for summary judgment seeking dismissal of the Geil Action and a permanent injunction pursuant to its Counterclaim, Counsel advised that the motion for summary judgment is currently scheduled to be heard in the month of July 2022.

Motion by the Township for an interlocutory injunction

[15] As part of the same Notice of Motion claiming summary judgment, the Township moved for an interim and interlocutory injunction enjoining and restraining Geil Enterprises and Geil from placing or dumping fill on, removing topsoil from, or altering the grade of the property without having obtained a permit issued by the Township under the Current Fill By-law.

[16] The Township has filed an Undertaking as to damages as required by r. 40.03 of the Rules of Civil Procedure.

[17] Section 440 of the Municipal Act, 2001 provides that a municipality may apply to the court for an order restraining any contravention of any of its by-laws in addition to any other remedy and to any penalty imposed by the by-law in issue.

Test for the granting of an interlocutory injunction

[18] The traditional test for the granting of an interlocutory injunction was confirmed in the case of RJR–MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385 as follows:

1. the moving party must establish a serious question to be tried;

2. the moving party must show that it will suffer irreparable harm if the injunction is not granted; and

3. the balance of convenience favours the granting of an injunction. This involves a consideration of which party will suffer greater harm if the injunction is granted or refused.

[19] Notwithstanding acceptance of the general rule that a plaintiff need only establish a serious question to be tried, an exception was recognized by the Supreme Court of Canada in RJR–MacDonald for a case where the result of the interlocutory motion will in effect amount to a final determination of the action. In these situations, the "serious issue to be tried" test may be elevated to a "strong prima facie case" or a "strong chance of success" test: see Black v. City of Toronto, 2020 ONSC 6398, 152 O.R. (3d) 529, at para. 41.

[20] As observed by Justice Sharpe in his text Injunctions and Specific Performance, 2nd ed., at para. 2.210, it is essential as a matter of justice that the strength of the case be the predominant consideration where, practically speaking, the result of the interlocutory motion will effectively finally determine the proceeding.

[21] The plaintiffs cite Tay (Township) v. Fan, 2018 ONSC 6375 as an example of a case where a municipality sought an interlocutory injunction to prevent the continued contravention of a zoning bylaw and the court found that the “strong prima facie case” threshold applied, on the basis that the granting of the interlocutory injunction would be tantamount to a final order (see para. 29). The plaintiffs submit that a similar finding should be made in the case at bar.

[22] I am unable to accept this submission. In Tay (Township) the municipality sought an injunction where the respondents were growing cannabis in an area not zoned for that type of activity. Boswell, J. noted the respondents’ position that an injunction would completely shut down their growing operations, requiring them to destroy their plants and relocate (see para. 27).

[23] There is no evidence before the Court in the case at bar that the granting of an injunction will require Geil Enterprises to destroy or dispose of any property or relocate pending the determination of the Geil Action on its merits on summary judgment or at trial. Moreover, there is nothing to suggest that the injunction will have run its course by the time the case reaches trial. As indicated, the Township’s summary judgment motion, which will determine whether there is a genuine issue requiring a trial in the Geil Action, is scheduled to be heard in July of this year.

[24] Tay Township does not stand for the proposition that the “strong prima facie case” standard applies in every case in which a municipality seeks interlocutory injunctive relief under section 440 of the Municipal Act, 2001.

[25] I find that the first prong of the RJR-MacDonald test, namely whether there is a “serious question to be tried” is applicable in the case at bar.

[26] As noted by Boswell, J. at para. 6 of Tay Township the "serious issue to be tried" threshold is very low as it ordinarily requires an applicant to establish little more than that the case is not frivolous or vexatious.

[27] There can be no doubt that the question of whether Current Fill By-law applies to the fill operation of the plaintiffs is a serious question to be tried, and that the Township’s position that it does apply is not frivolous or vexatious.

[28] Having found that the “serious issue to be tried” and not the “strong prima facie case” standard applies, it is not necessary nor is it appropriate to consider the following submissions advanced by the plaintiffs:

(a) the Current Fill By-law is unenforceable or invalid as it is targeted at the plaintiffs or specifically designed to assist the Township in overcoming legal difficulties against them;

(b) the plaintiffs’ use of the property is a legal non-conforming use and that the application of the principle of “legal non-conforming use” is not limited to zoning by-laws passed under the Planning Act, R.S.O. 1990, c. P.13;

(c) at common law property owners have a right not only to continue a legally non-conforming use, but to reasonable flexibility in that use, including evolution, intensification and expansion;

(d) the Township cannot extinguish the plaintiffs’ common law rights by passing a site-alteration by-law that they cannot comply with;

(e) the intention of the Township in enacting the Current Fill By-law was to “grandparent” existing fill projects, including that of the plaintiffs.

[29] The foregoing arguments were advanced by the plaintiffs on the premise that the “strong prima facie case” standard applied. In my view these submissions on the merits of the plaintiffs’ case are most appropriately advanced in response to the Township’s motion for summary judgment or at trial.

Irreparable harm

[30] There is ample authority for the principle that a municipality seeking to enforce a bylaw is not required to demonstrate irreparable harm or satisfy the court that the balance of convenience is in its favour.

[31] In the case of Metropolitan Toronto (Municipality) v N.B. Theatrical, [1984] O.J. No. 3062 (H.C.J.) Craig, J. stated as follows at para. 24:

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

[32] After citing the foregoing passage from N.B. Theatrical E. MacDonald, J. offered the following observations at para. 11 of Markham (Town) v Eastown Plaza Ltd., [1992] O.J. No. 1716 (Ont. Gen Div.):

On the basis of these authorities, I am satisfied that the 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. The irreparable harm if this injunction is not granted is to the municipality, who has obligations to its citizens to enforce and maintain by-laws designed for what may be referred to as the quiet enjoyment of its citizens. The municipality, to put it most simplistically, has a duty to protect its residents by the passing and implementation of by-laws. The citizens have a right to quiet enjoyment and in addition, and perhaps most importantly, from a policy perspective, its citizens have a right to anticipate that the by-laws of the town will be adhered to. For these reasons, I am of the view that the balance of convenience favours the municipality in these circumstances.

[33] The foregoing passages from N.B. Theatrical and Eastown Plaza Ltd. and the reasoning that they exemplify were adopted by Greer, J. in the case of Innisfil (Town) v. Innisfil Land Holdings Inc., [2003] O.J. No 2163 (S.C.J.) at paras. 23-24.

[34] More recently, in the case of Springwater (Township) v. 829664 Ontario Ltd., [2008] O.J. No. 810 McIsaac, J. noted at para. 7 that a municipality moving for injunctive relief to restrain non-compliance with a bylaw is not required to establish the existence of irreparable harm as a precondition, citing Eastown Plaza Ltd. as well as Thompson-Nicola (Regional District) v. Galbraith, [1998] B.C.J. No. 1436 (B.C. S.C.) where Smith, J. stated at para. 2:

The test for the granting of an interim injunction pursuant to the Municipal Act is different than the test at common law. Municipalities are not subject to equitable rules with respect to the enforcement of their by-laws; the balance of convenience and apprehended damage are irrelevant when a Court is asked to restrain the clear breach of a by-law even if the granting of an injunction in effect grants the whole relief sought: Kamloops (City) v. Baines (1996), 32 M.P.L.R. (2d) 264 (B.C. S.C.) at 265. Where the Court finds a flagrant contravention of the by-law, it will find irreparable harm by implication in the mockery that is made of its by-laws by the open breaching of them: Cowichan Valley (Regional District) v. Schon Timber Ltd. (December 21, 1994), Doc. Duncan S4209 (B.C. S.C.) [reported (1994), 25 M.P.L.R. (2d) 249 (B.C. S.C.)].

[35] The record confirms that the non-compliance with the Current Fill Bylaw by the plaintiffs in the case at bar has existed since the bylaw came into force and continues to be flagrant. The Township pointed to evidence produced by Geil that, between October 1 2021 and February 14, 2022, 11,638 trucks dumped fill on the property, representing 85 trucks per calendar day over that period. Mr. Paiva for the plaintiffs maintained that there was an average of 85 “loads” of fill per day deposited on the property, rather than “trucks.” Regardless of this discrepancy, the fill operation is demonstrably extensive and is being carried on without the issuance of a Permit pursuant to the Current Fill Bylaw. The plaintiffs have not demonstrated any intention of complying with the Current Fill By-law.

[36] In response to the foregoing authorities respecting the application of the irreparable harm and balance of convenience standards to municipalities seeking to enforce by-laws, the plaintiffs refer to the cases of Town of Grand Valley (Corporation of) v Walker, 2018 ONSC 4915 and Aubrey v. Prince (Township), (2001), 52 O.R. (3d) 274 (S.C.J.). In the former case the plaintiff municipality seeking to enforce a zoning by-law was unsuccessful in obtaining interlocutory injunctive relief pending trial. In the latter case the municipality was unsuccessful on a motion for summary judgment for a mandatory injunction to remove property owners from their permanent residences for breaching a zoning bylaw.

[37] I am unable to find that either of these cases assist the plaintiff in countering the established principles embodied in N.B. Theatrical, Eastown Plaza Ltd., Innisfil Land Holdings Inc., Springwater (Township) and Galbraith.

[38] In Walker the municipality sought to enjoin the continued operation of a small trucking business carried on secondary to a residential use for alleged noncompliance with the applicable zoning bylaw. The business had been carried on continuously by the 63-year-old defendant for 38 years without any previous enforcement proceedings having been taken by the municipality.

[39] Tzimas J. found that there were triable issues as to whether the defendant’s trucking business complied with the former zoning bylaw and was a legal non-conforming use, and whether the doctrines of laches and estoppel applied to prevent the municipality from enforcing the by-law against him. Ultimately, she exercised her discretion to refuse to grant the interlocutory injunction sought by the municipality pending the determination of the issues of non-conforming use and laches and estoppel at trial, noting significantly at paras. 60 - 61 that “the manner of enforcement ought not to be left to the whims or dictates of property owners or developers” and “on this point, the Town's motives are squarely in issue.”

[40] These factors are not at issue in the case at bar. There is no suggestion that the Township, in seeking interlocutory injunctive relief, is motivated by the “whims or dictates of property owners or developers” or by any considerations other than to see its bylaw enforced.

[41] The case of Aubrey v. Prince (Township) also dealt with the application of the doctrines of laches and estoppel. The municipality took the position that the residences in question were situated in an area zoned “summer cottage” by its zoning bylaw which only permitted seasonal residences with no year-round occupation. At para. 13 Stortini, J. found that the jurisprudence holding that estoppel cannot excuse a party from a statutory obligation and is not available to invalidate any laws, does not absolutely rule out the application of the doctrine, citing the following passage from Toronto (City) v. San Joaquin Investments Ltd. (1978), 18 O.R. (2d) 730 (H.C.J.) at p. 742, per Steele, J.:

The doctrine of estoppel normally does not apply to a municipal corporation but where lands have been used and acknowledged as having been used over a period of almost 50 years and a municipality applies for an equitable remedy such as an injunction consideration should be given to this usage and recognition.

[42] It is clear on the record in the case at bar that at no point did the Township acquiesce in the plaintiffs’ non-compliance with the Current Fill Bylaw and before that with the Original Fill Bylaw. With respect to the Current Fill Bylaw, the Township took the following enforcement steps:

June 3, 2014 - it revoked the previous permit issued under the Original Fill Bylaw and issued a work order requiring discontinuance of the importation of fill;

July 30, 2014 - the Chief Building Official of the Township issued an Order to discontinue activity until Geil Enterprises acquired a fill permit under the Current Zoning Bylaw;

Sept 24, 2014 - the plaintiffs were charged with an offence under the Current Fill Bylaw for failure to comply with the work order and the order to discontinue activity, resulting in conviction of five charges on May 25, 2017;

October 6, 2021 – Geil Enterprises was charged with breach of the Current Fill Bylaw; and

December 10, 2021 – Geil was charged with breaching the Current Fill Bylaw.

[43] I find the Walker and Aubrey cases to be clearly distinguishable, and that the presumption of irreparable harm to the Township has not been displaced.

Balance of convenience

[44] The plaintiffs submit that they would be severely harmed if the injunction is granted, and that the balance of convenience favours them. They say that the fill operation would essentially be shut down, which would have the effect of terminating the employment of three individuals including Geil. They will continue to incur monthly expenses despite the shut-down, such as the monthly payments on a bulldozer lease. The plaintiffs also submit that third parties, being customers with which they have ongoing contracts, would be adversely affected, and that an injunction may, as a result, expose the plaintiffs to liability to those third parties for breach of contract.

[45] In Innisfil Land Holdings Inc. at para.23 Greer, J. adopted the following passage from N.B. Theatrical Agencies Inc. at para. 25:

Here it is said that the respondent will sustain damages if the applicant is granted the relief sought herein. That appears to be true; it may even be forced out of business or into bankruptcy. But the respondent was aware of the risk. It has elected to carry on this business operation without respect for the law and in open contravention of the provisions of the by-law. If the respondent succeeds at trial, it can be adequately compensated in damages. In my opinion the balance of convenience favours the applicant.

[46] In my view these considerations also apply in the case at bar.

[47] There is no evidence that the plaintiffs have applied for issuance of a permit under the Current Fill By-law and accordingly there is no evidence that the Township has denied them a permit. The plaintiffs’ suggestion that any application for a permit would be unsuccessful by reason of the authority conferred on the Township Chief Building Office by section 3.8 of the Current Fill By-law to decline to issue a permit for certain enumerated reasons was acknowledged by counsel for the plaintiffs to be speculative.

[48] In his Reasons granting an interlocutory injunction against Geil Enterprises, Geil and Geil’s then spouse Janet Ann Bratton retraining their breach of the Original Fill By-law, reported at 2010 ONSC 4271, Taylor, J. noted, at para. 25, that the purpose of the by-law was to “regulate activities on lands within the Township to address matters such as stormwater management, runoff onto adjacent land, consistency of elevation of adjoining lands, slope of lands, and dust control, traffic control, noise control and hours of operation involved in fill or grading operations.” He found these to be meritorious objectives.

[49] There is no basis to suggest that the purpose of the Current Fill By-law is materially different than as stated by Justice Taylor in reference to the Original Fill By-law.

[50] In my view, the Township has a compelling interest in seeking to enforce in the public interest the democratically enacted by-law authorized by subsection 142(2) of the Municipal Act, 2001.

[51] With respect to the plaintiffs’ claim of the risk of economic loss, the court was informed, and it was not disputed, that Geil Enterprises entered into the bulldozer lease on September 29, 2020, well after Geil became aware of the Township’s position that the fill operation was in breach of the Current Fill By-law.

[52] The plaintiffs led no evidence of any specific contractual obligations to third parties which would expose them to liability in the event that an interlocutory injunction was granted. Indeed, on cross-examination, Geil acknowledged that he was at liberty to terminate at any time and without notice the importation of fill to the property by Kingdom Construction, the customer importing by far the largest volume of fill, and Tetra Trucking.

[53] With respect to the impact of an injunction on the third-party contractors, the plaintiffs pointed to no authority that the court should take into account the private, as opposed to public, interests of non-parties on the balance of convenience analysis on an application for an interlocutory injunction.

[54] In any event, if it is ultimately found that an interlocutory injunction should not have been granted, the plaintiffs may be compensated for any loss that they may suffer as a consequence by an award of damages, pursuant to the Undertaking as to damages posted by the Township.

[55] I find that the balance of convenience clearly favours the Township and that, as a consequence, an interlocutory injunction restraining the continuation of the plaintiffs’ fill operation pending final disposition of this proceeding should issue. It is appropriate that the injunction be ordered to come into effect on the third day following the order being made to permit the plaintiffs to rearrange their affairs, without increasing the rate of fill imported to the property in the interim.

Disposition

[56] On the basis of the forgoing, it is ordered as follows:

(a) Pending the final adjudication of this proceeding, and the entering and issuing of the order if a permanent injunction in favour of the defendant is granted, an interlocutory injunction is granted restraining the plaintiffs, their servants, agents and all other persons having knowledge of this Order, directly or indirectly, from placing or dumping fill on, removing topsoil from, or altering the grade of the property known municipally as 1943 Roseville Road, in the Township of North Dumfries in the Regional Municipality of Waterloo, without first having obtained a permit issued by the Corporation of the Township of North Dumfries pursuant to By-law 2612-14 enacted on February 3, 2014;

(b) the foregoing interlocutory injunction shall come into effect at 12:01 a.m. on March 18, 2022.

Costs

[57] Counsel are strongly encouraged to agree on costs. If they are unable to do so, they may deliver written submissions on costs - the defendant within 14 days of the date of release of this Endorsement and the plaintiffs within 10 days of receipt of the defendant’s submissions. The defendant may deliver reply submissions within 5 days of receipt of the plaintiffs’ submissions. The initial submissions shall not exceed five (5) double-spaced pages, exclusive of Bills of Costs or Costs Outlines and Offers to Settle. Any reply submissions shall not exceed 3 pages. All submissions shall be delivered by email to the Trial Coordinator at Brantford at the email address utilized for the release of this Endorsement.

[58] In the event that no costs submissions are received within the timeline set forth above, the parties will be deemed to have settled the issue of costs.

[59] In the event that a party does not intend to make submissions on costs, that party shall advise the court accordingly.

D.A. Broad, J. Date: March 15, 2022