Court File and Parties

COURT FILE NO.: CV-22-00681717-0000 DATE: 2023-05-31 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JOHN THOMAS SUTTON and ROSALYN MARGARET SUTTON Applicants – and – NICOLAOS IKONOMAKIS and PENELOPE IKONOMAKIS Respondents

Counsel: Nicolas Businger, for the Applicants Ryan Hauk, for the Respondents

HEARD: AUGUST 31, 2022

VELLA J.

REASONS FOR DECISION

[1] The Suttons commenced this application seeking relief arising from Minutes of Settlement in relation to a dispute with the Ikonomakis, relating to the latter’s proposed building of a new three-story house. The Suttons and Ikonomakis are neighbours who formerly had a neighbourly relationship. Unfortunately, their relationship has become acrimonious owing to disputes over whether or not the Ikonomakis strayed from the plans attached to the Minutes of Settlement sufficiently such as to constitute a breach warranting either permanent injunctive relief or specific performance.

[2] The main complaints by the Suttons, as advanced in their Notice of Application, are that the Ikonomakis’ subsequent, City-approved, building plans seem to show elements contrary to the drawings agreed to in the Minutes of Settlement. In particular, the plans show a third-story deck and patio doors which, if built, would overlook the Suttons’ backyard and could cause privacy concerns. The Ikonomakis have also added soil to a section of their backyard in the plans, which could possibly injure the Suttons’ nearby cherished Sugar Maple tree.

[3] The Suttons were also seeking an order permitting them to register an expanded mutual right of way on title to the Ikonomakis’ property (a mutual driveway) as agreed upon between these parties. Since the hearing of the application, the parties did manage to resolve this matter, as advised in a subsequent case conference, with the result that the requisite expanded mutual right of way (“ROW”) is now registered on title to the Ikonomakis’ property.

[4] The Suttons rely on rr. 14.05(3(g) and (h) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[5] According to the evidence filed, the construction of the new house by the Ikonomakis was already under way and scheduled for completion in the Fall of 2022 – shortly after this hearing was conducted. However, no request for interlocutory relief was made by the Suttons.

Background Facts

[6] By way of brief background, the Suttons own 215 High Park Avenue (Toronto) and the Ikonomakis own 213 High Park Avenue. The Suttons and Ikonomakis each bought their respective houses in 2009.

[7] In 2020, the Ikonomakis applied to the City of Toronto for variances to the applicable zoning by-laws to build a new house which included, among other items, a 34-foot-high plain wall that would be built adjacent to the Suttons’ rear deck. In August 2020, the City’s Committee of Adjustments approved the requested variances over the objections of the Suttons and others. The Suttons appealed to the Toronto Local Appeal Body (“TLAB”).

[8] The parties resolved the pending appeal by Minutes of Settlement dated April 21, 2021 (the “Minutes”). Of particular importance to this application, the Ikonomakis agreed to alter their original drawings in accordance with drawings that were attached as Schedule B to the Minutes (the “Revised Zoning Drawings”). The TLAB appeal was resolved on this basis and the TLAB accepted this resolution.

[9] Following the resolved appeal, in September 2021, the Ikonomakis submitted plans to the City (“Building Permit Plans”) that the Suttons claim were inconsistent with the Revised Drawings; most notably because they purported to show the addition of a third-floor deck with patio doors and would add soil and retaining walls in their backyard to raise the ground level by about one-half metre. According to the Suttons, this change “threatens” to cause drainage runoff into their back yard and “threatens” the well-being of their Sugar Maple tree. The Suttons claim that the soil in question would fall within the Tree Protection Zone of their tree, relying on the City’s Tree Protection Policy and Specifications for Construction Near Trees (Exhibit K to the Sutton Affidavit).

[10] The Ikonomakis respond that the Revised Zoning Drawings did not deal with outdoor landscaping or grading issues which fall under the scope of the subsequent building permit requirements, and in any event the raised soil level is in an area that does not abut the Suttons’ back yard. Furthermore, the concerns that the raised soil level will impact drainage on the Suttons’ property and damage the Sugar Maple tree are speculative. In addition, they have no intention of building a deck or adding patio doors to the third floor. Rather, they were required to lower the two originally drawn third-floor windows (depicted in the Revised Zoning Drawings) closer to floor level because of a Building Code, O. Reg. 322/12, requirement that they have an egress within a stipulated distance from the ground for fire escape purposes. To resolve this Building Code issue, they decided to combine the two windows into one large window in or around the same area space, if not smaller than the originally depicted two windows.

[11] The Ikonomakis also submit that the blueprint of the house is no bigger than was depicted in the Revised Drawings, and that they have built the house in substantial compliance with the Revised Zoning Drawings as per the Schedule C “Condition” attached to the Minutes.

[12] The Condition in Schedule “C” states:

The proposed dwelling shall be constructed substantially in accordance with the revised drawings prepared by Abbott Design Ltd., which are attached as Schedule “A” to the Minutes of Settlement filed with the TLAB. [Emphasis added.]

This condition was expressly stipulated in the Minutes as a joint “request that the TLAB impose the condition of approval attached hereto as Schedule “C” (the “Condition”) pursuant to ss. 45(9) of the Planning Act”. The TLAB did impose the Condition on the Ikonomakis. In any event, section 6 of the Minutes further stipulated that the Ikonomakis would implement and construct “the Revised Proposal in accordance with the Revised Drawings and Condition”, whether or not Condition C was imposed by the TLAB.

[13] The Minutes also stipulate that the parties agree to expand the Mutual ROW (as reflected in Schedule “D”) and to “jointly make best efforts to effect such Mutual ROW Expansion”. The Suttons complain that, at the time of the hearing, the Ikonomakis had refused to make efforts to register the Mutual ROW. However, at the subsequently held case conference, counsel advised that this had resolved, and that the Mutual ROW had been registered, such that this ground of relief was now on consent.

[14] The Ikonomakis submit that the context from which the Minutes arose is important; namely, from a resolution of an appeal that dealt exclusively with zoning concerns. The subsequent Building Permit Plans that contain the soil grading and revised window on the third-floor rear wall that the Suttons say depart from the Revised Zoning Drawings -address grading and Building Code requirements which were not the subject of the Revised Drawings.

[15] The Suttons agree that the Ikonomakis required a third-floor egress to meet the requirement of the Ontario Building Code (ss. 9.9.9.1(2)(b)(ii) and 9.9.9.1.(3)), but that they could have satisfied that requirement by building a balcony at the front of the house rather than at the back. The Suttons would not have objected to a balcony at the front because that would not infringe on privacy in their own backyard.

Analysis

[16] I have reviewed the evidence and find that the Suttons’ concerns, based on the existing evidentiary record, do not amount to a breach of the Minutes of Settlement. Furthermore, I find that the Ikonomakis’ ultimate Building Permit Plans as approved by the City (that contain some variations from the Revised Zoning Drawings such as the third deck window placement) are in “substantial compliance” with the Revised Zoning Drawings appended to the Minutes.

[17] First, there is no expert evidence from the Suttons to substantiate their drainage concerns or any potential damage to the Sugar Maple tree as a result of the Ikonomakis’ decision to raise the ground level in one section of their back yard. The only evidence filed by the Suttons was the affidavit of John Sutton with exhibits. Furthermore, I agree with the Ikonomakis that, when considering the Minutes of Settlement as a whole, the express words of the Minutes, and the circumstances from which it was developed [1], the Ikonomakis’ were not foreclosed by the Minutes from making minor adjustments as required in the Building Permit phase of development. The application, and resulting appeal, focused on the minor variance to zoning bylaws requested by the Ikonomakis, and not the surrounding grading or other Building Code requirements that became the subject of the subsequent Building Permit Plans. Therefore, it was not the mutual objective intention of the parties to place fixed parameters on the grading, including any requirement for retaining walls or raising of the soil required for the Ikonomakis’ compliance with Building Code requirements in the next phase of obtaining City approvals (Sattva v. Creston Moly Corp, 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 47-48, 57-58). This ruling does not foreclose any future claim the Suttons may have based in tort should it come to pass that their Sugar Maple tree is harmed, or their property damaged by any drainage issues emanating from the Ikonomakis’ property and their addition of soil to their backyard.

[18] As for the third-floor deck concern, the Revised Zoning Drawings do not depict any such deck or balcony but rather depict a flat roof, and the evidence demonstrates that the Ikonomakis have not built and are not intending to build a third-floor deck or balcony, nor insert balcony doors. The way in which the Ikonomakis dealt with the Building Code requirement to have a third-floor egress is not contrary to their contractual obligation to substantially comply with the Revised Zoning Drawings. The slight lowering of the window on the third floor and combining the two windows into one window to allow access from the ground by ladder falls within “substantial compliance” under Condition C of the Minutes. This interpretation accords with the commercial efficacies in the circumstances under which the Minutes evolved and were concluded; namely, as resolving a zoning appeal and the reasonable expectation that Building Code requirements might require minor alterations to the Revised Zoning Drawings in the Building Permit phase of development (8254125 Canada Inc. v. Celernus Investment Partners Inc., 2019 ONSC 3144, at para. 9). The Suttons did not lead expert evidence suggesting that their privacy concerns would be impacted by this minor alteration. Accordingly, this change to the Revised Zoning Drawings is not a breach of the Minutes.

[19] The Suttons allege that the Ikonomakis have acted in bad faith and failed to perform their contractual duties honestly and reasonably, contrary to the common law and the provision in the Minutes that require the parties “to act reasonably and with good faith in respect of all dealings between them pursuant to these Minutes” (Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, at paras. 63 and 65; C.M. Callow Inc. v. Zollinger, 2020 SCC 45, 452 D.L.R. (4th) 44, at para. 2). It is clear on the evidentiary record that distrust and irritation developed with respect to the Suttons and Ikonomakis on both sides. Communication could have been clearer and more responsive to concerns raised. However, while none of the parties have acted in a particularly positive and constructive (some may say neighbourly) manner, the Suttons have not proven that the Ikonomakis breached their contractual or common law duty to act in good faith with respect to the implementation of the Minutes.

[20] Accordingly, the application is dismissed.

[21] I have received the respective cost outlines from the parties. If the parties cannot agree on costs (and, without prejudging the matter, there may be some merit to the parties agreeing to walk away from costs), I will accept written submissions, not to exceed 3 typed pages, from the Respondents within 10 days from release of these reasons, and from the Applicants within 10 days thereafter.

Justice S. Vella Released: May 31, 2023

Footnotes

[1] As a resolution to the Suttons’ appeal of the Committee of Adjustments’ zoning decision approving the Ikonomakis’ initial variance application.