Court File and Parties

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Halton Region Conservation Authority, Applicant AND: Peter Thomas and Jean Thomas, Respondents

BEFORE: Justice Mills

COUNSEL: K. Jull and E. Bordman, for the Applicant A. Bouchelev, for the Respondents

HEARD: August 14, 2023

Endorsement

[1] The Applicant obtained a time-sensitive interim injunction on February 17, 2022, to restrain the Respondents from transferring, selling, or gifting their farm property unless they complied with the Remediation and Probation Orders previously issued by the Ontario Court of Justice. The motion was then adjourned to March 31, 2022, for a full hearing on the merits. At the return of the motion, the Respondents consented to an order extending the interim injunction and adjourned the matter to the hearing of the application on August 29, 2022.

[2] The Respondents now seek damages on the basis the injunction was an excessive overreach and unnecessary, obtained on the basis of a one-sided, incomplete and distorted account of the events which had occurred between the parties. They allege it denied them the opportunity to sell the farm property at the height of the real estate market over the winter of 2022. At the hearing of the application, counsel conceded any damages are limited to the period between February 17, 2022 and March 31, 2022, after which the interim injunction continued with the consent of the Respondents.

[3] Ex parte injunctions require full and fair disclosure be made to the Court. Although the initial hearing proceeded on notice and the Respondents had an agent appear on their behalf, they submit the notice provided was insufficient and therefore the application was effectively made without notice. Functionally, it was the equivalent of an ex parte proceeding, and the Applicant was therefore under a duty to make full, fair, and frank disclosure of all known and material facts. The Respondents submit this was not done.

[4] As it is an extraordinary remedy, Rule 40.03 of the Rules of Civil Procedure requires a party seeking an injunction to provide an undertaking to the Court to abide by any order concerning damages if it is ultimately established that the issuance of the injunction has caused damage to the responding party for which compensation ought to be paid. The Applicant provided such an undertaking to the Court at the time the injunction was granted.

[5] I do not accept the initial hearing should be treated as an ex parte proceeding, nor am I satisfied the issuance of the injunction has caused harm or damage to the Respondents. I therefore decline to make any order respecting damages.

Background Facts

[6] The parties have a long history of litigation dating back to July 2015. In 2018, the Respondents were convicted by Justice of the Peace Farnand of four offences each for violating s. 28 of the Conservation Authorities Act by unlawfully undertaking development without permission within 120 metres of a provincially significant wetland. The Respondents built a horse-riding ring on the property without obtaining the necessary approval of the Applicant. The Respondents were sentenced to remediate the property, a fine was imposed and a Probation Order was issued. The finding of guilt was affirmed by Justice Baldwin of the Ontario Court of Justice on May 17, 2021, but following the R. v. Kienapple principles, the convictions were reduced from four counts to one count for each Respondent and the associated fines were reduced. The Remediation and Probation Orders were largely upheld. The Probation Order was amended to extend the timeline for remediation to permit completion of the work by May 16, 2022. The Remediation Order was registered on title to the property. None of the orders prohibited the Respondents from selling the property.

[7] The remediation of the property was not completed by May 16, 2022. The Respondents had retained an environmental geoscientist to provide advice regarding a remediation plan, but they had made no other tangible effort to address the Remediation Order by the time of the interim injunction.

[8] The Respondents did however list the property for sale, advertising the riding ring as a feature. They also unilaterally attempted to have the Remediation Order removed from title to the property in November 2021 and again in February 2022. The removal of the Remediation Order would have allowed the Respondents to provide clear title in the event of a sale of the property. The Registrar for Land Titles refused to discharge the Remediation Order without a further court order. Before one could be obtained by the Respondents, the Applicant commenced this proceeding.

[9] The Respondents accepted a conditional offer to purchase the property on January 16, 2022. The purchasers refused to waive the conditions and by the end of that month, the sale was aborted. A significant concern expressed by the potential purchasers was the apparent misrepresentation of the riding ring as an amenity of the property when it was in fact subject to a removal order.

[10] These facts were known to the Applicant, and they were disclosed at the initial hearing on February 17, 2022.

[11] The Respondents had signed a Suspension of Listing Agreement on February 7, 2022, and a prior agreement had been reached between the parties to hold back $250,000 of the sale proceeds if the January 2022 offer had resulted in a transaction to ensure the remediation was completed. These facts were not disclosed at the initial hearing on February 17, 2022. The opinion of the Respondents’ geoscientist that a remediation plan could not be completed during the winter months and that there were contradictory terms of the Remediation Order which needed to be clarified before compliance could be effected, was also not disclosed at the initial hearing.

Analysis and Application of the Law

[12] Proper notice of the application and of the initial hearing date was provided to the Respondents. Their counsel of record at the time was first put on notice of the potential injunction by letter dated January 19, 2022, and he was then served with the Notice of Application and the motion materials in accordance with the Rules of Civil Procedure on February 3, 2022. The Respondents were also informed of the February 17, 2022 hearing date at that time. Immediately upon learning their retained counsel would not represent the Respondents on the motion, they were personally served with the Notice of Application and the motion materials on February 9, 2022. A copy of the materials was also provided to their new counsel on that day.

[13] Regrettably, the Respondents’ counsel of choice was not able to attend on the return date, so an agent was sent to request an adjournment. The Applicant consented to the adjournment request, but the Respondents refused to provide an undertaking to confirm the adjournment would cause no prejudice. The interim injunction was therefore granted as a term of the adjournment to ensure the status quo was maintained pending a return of the motion on March 31, 2022, a date convenient to and chosen by counsel. The Respondents had ample time to prepare brief responding materials and to instruct the agent as to the terms of any adjournment request. None of the facts known to both parties were materially in dispute. The only issue was the preservation of the status quo.

[14] The Respondents rely on the decision of Perell J. in Wang v. Feng, 2023 ONSC 2315 which was a motion for a Mareva injunction first brought without notice in respect of a debt enforcement action. The motion was adjourned for proper notice to be given and then subsequently adjourned further to permit the respondent to retain and instruct counsel. An interim Mareva injunction was granted pending the return of the hearing without the benefit of materials from the responding party. It was ultimately discovered the applicant had failed to disclose numerous material and important facts that might have significantly affected the decision to grant the interim injunction. The injunction was set aside. This decision is easily distinguished. The merits of that action were very much in dispute and the numerous omissions and misrepresentations were material to the merits.

[15] Conversely, the Respondents in this matter had already been convicted of an offence and were subject to the Probation and Remediation Orders. The Applicant, as a public body, is presumed to be acting in the interests of the public by ensuring the property was remediated. It is in the public interest to protect and preserve the provincially significant wetlands. There is also the presumption of irreparable harm. There were no exceptional circumstances warranting the refusal of an injunction. See Lake Simcoe Region Conservation Authority v. Eng, 2021 ONSC 4425, at paras. 22, 23 and 33.

[16] The interim injunction was limited in scope and only restrained the Respondents from transferring, selling, or gifting the property until such time as it was remediated, as previously ordered. The Respondents were free to deal with the property provided they complied with the Remediation Order. They eventually did so in October 2022. The property was returned to its original state or sufficiently so, as to be acceptable to the Applicant.

[17] The Applicant did not oppose an order formally declaring compliance with the Remediation Order and they consented to its removal from title to the property. The Applicant did oppose the motion to set aside the interim injunction orders, arguing there should be no appearance it conceded the interim injunction was in any way inappropriate or unnecessary.

[18] The interim injunction was appropriate in the circumstances and was merited based on the materials filed and submissions made by the Applicant. The suspension of the listing agreement did not provide the Applicant with any assurance the property would not be re-listed for sale or sold privately during the period of the adjournment. The Suspension of Listing Agreement did not prohibit the Respondents from selling the property. It simply put on pause the listing agreement signed with their real estate broker until July 2022 such that there would be no marketing or showings of the property during the suspension period. The agreement could easily have been terminated and it did not have any bearing on a private sale.

[19] The prior agreement respecting the holdback of funds was in respect of the aborted transaction. It was not an express agreement by the Respondents that would attach to any future sale.

[20] The opinion of the geoscientist was not relevant to the issue before the Court which was the risk the property would be sold without the Respondents complying with the Remediation Order. The challenges they may face in effecting the remediation was not material. The only material issue was that the Respondents had not, as at the date of the hearing, complied with the Remediation Order.

[21] I concede it would have been preferable for the Applicant to disclose these facts at the February 17, 2022 hearing, however it was not under a positive obligation to do so. I am satisfied proper notice was provided to the Respondents and I do not accept their submission that the hearing proceeded effectively on an ex parte basis.

[22] If I am wrong, I am satisfied that disclosure of these facts would have had no material effect on the relief granted. The interim injunction was necessary to protect the public interest and to maintain the status quo for the six weeks pending the return of the motion. The Respondents must be taken to have conceded the interim injunction was necessary pending a hearing of the application as they consented to its continuance. No materials were filed by the Respondents for the March 31, 2022 hearing. There was no suggestion at that time that the Applicant had failed to make full and fair disclosure. There was no indication that any damages were being suffered as a result of the interim injunction.

[23] The Remediation Order is issued against the Respondents in their personal capacity; it is not an order that attaches to the land. Therefore, if the Respondents had been successful in negotiating a sale of the property prior to the commencement or completion of the remediation, there was no means by which to enforce the Remediation Order against the new purchasers. The Respondents could have easily avoided their obligation to remediate with a sale of the property. By obtaining an interim injunction to restrain the Respondents from dealing with the property prior to its remediation, the Applicant was seeking to protect the environmentally sensitive wetlands and in doing so, was acting in the best interests of the public.

[24] To be entitled to damages arising from the granting of an injunction, the Respondents must show they would have been successful on the merits of the application. See Ralph’s Auto Supply (B.C.) Ltd. v. Ken Ransford Holdings Ltd., 2020 BCCA 120, at para. 100. Where there is no assessment of the merits, there should be no presumption the undertaking may be enforced. The merits of this application were never judicially determined as the Respondents remediated the property making moot the requirement for a permanent injunction and the other relief sought in the Notice of Application.

[25] The conduct of the Respondents, or perhaps more appropriately their failure to take the necessary and appropriate action to remediate the property as they were ordered to do, can be viewed as being inequitable. Further, the Applicant, as a public body, was acting in the public interest to preserve the status quo until a determination of the rights. See Attorney General for Ontario v. Harry et al.; Attorney-General for Ontario v. Yeotes et al.. In these special circumstances, I exercise my discretion and find that the Respondents are not entitled to a determination of any damages sustained pursuant to the undertaking given by the Applicant. Having reached this conclusion, I also conclude there is no necessity for an assessment of damages hearing.

[26] The Respondents’ motion is dismissed.

[27] Having been successful on the motion, the Applicant is presumptively entitled to its costs. If the parties are unable to agree on quantum, written submissions limited to two pages, double-spaced, may be made together with a Bill of Costs and any written offers to settle. The Applicant shall have ten days to file; the Respondents shall have seven days thereafter to respond. There shall be no right of reply.

Justice J. E. Mills

Date: September 25, 2023