Court File and Parties

COURT FILE NO.: CV-19-0159 DATE: 2024/01/12 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Richard Campbell, Lisa Campbell, Bradley Pilla and Susan Lynn Pilla, Plaintiffs AND 2535727 Ontario Inc. o/a Shouldice Trucking and Corporation of the Township of Augusta, Defendants

COUNSEL: J. Michael Hickey, for the Plaintiffs Pino Cianfarani and Megan Van Kessel, for the Defendant, Corporation of the Township of Augusta (moving party). Charlene Kavanagh, for the defendant 2535727 Inc. o/a Shouldice Trucking

HEARD: September 6, 2023 Ottawa, (by Zoom video conference)

Reasons for Decision (Motion for Summary Judgement)

Justice Charles T. Hackland

Overview

[1] This is a summary judgement motion brought by the defendant Corporation of the Township of Augusta (the Township), seeking summary judgement dismissing the plaintiffs’ claim on the basis there is no issue requiring a trial. The plaintiffs are residential landowners whose properties are adjacent to land owned by the defendant Shouldice Trucking (Shouldice) on which Shouldice operates a trucking terminal. The plaintiffs’ action against Shouldice is framed in negligence and nuisance and is not the subject of this motion.

[2] The plaintiffs’ action against the Township is based on breaches of an alleged duty of care. Specifically, the plaintiffs assert that the Township owed them a duty of care to ensure that Shouldice complied with applicable bylaws, including the Township official plan, zoning bylaw and the site plan agreement. The plaintiffs assert that the Township did not act reasonably and in good faith in all of the circumstances of this case and did not exercise its statutory discretion in good faith.

The Issue

[3] Both parties agree the question before the court is: Does the Township owe the Plaintiffs a duty of care in respect of the matters at issue in this litigation? The plaintiffs, as responding parties have not suggested that summary judgement is an inappropriate mechanism to address these issues. In the court’s view the question to be decided is fundamentally whether the Township has acted in bad faith in carrying out its statutory duties. The Township’s actions are subject to a statutory and common law immunity for its policy decisions, i.e. there is no duty of care owed to the plaintiffs, as long as the Township exercised its powers in good faith.

The Facts

[4] In January 2017, Shouldice Trucking purchased a property (the Shouldice property) immediately to the north of the plaintiffs’ respective residential properties. Just prior to the purchase of the Shouldice property, engineers or consultants retained by Shouldice submitted to the Township an application for site plan control, to permit parking for 23 trucks on the north side of an existing building on the Shouldice property. The Township considered the application to be for the development of what it termed a “trucking terminal” for the parking of 23 transport tractor trucks (not trailers) and as a dispatch centre for the transport tractors.

[5] The Shouldice property is designated “Highway Commercial” in the Township’s zoning bylaw 2965. The plaintiffs argue persuasively that a trucking terminal is not included as a permitted use in the Highway Commercial zone. In contrast, a trucking terminal is a permitted use in certain of the Industrial Zones in the Township zoning by-law. However, the Town Council and its Planning Advisory Committee were acting on the advice of a planning consultant in their interpretation of the relevant zoning by-laws. The Township subsequently approved the site plan application and implemented it through the enactment of a municipal bylaw.

[6] The plaintiffs submit that on an interpretation of Township Bylaw 2965 in its ordinary and plain meaning, the Shouldice trucking terminal is not a permitted use in the Highway Commercial Zone and thus the Site Plan Agreement should never have been approved and enacted as a bylaw. The plaintiffs contend the misidentification of the relevant zoning by-law should be viewed as evidence of bad faith on the Township’s part.

[7] In October 2018, Shouldice commenced its business operations on the Shouldice property. By mid-December 2018 and continuing through January and February 2019, the plaintiffs experienced serious disruption to the enjoyment of their respective properties as a result of Shouldice Trucking’s operation of its trucking terminal. The plaintiffs complained of truck headlights and high-powered light standards lighting up their houses and backyards, and about excessive noise from the trucks idling for lengthy periods, and the noise of horns, air brakes, and backup beepers throughout the day and night causing sleepless nights and a “sickening” odour of diesel fuel fumes.

[8] The plaintiffs complain that the Township took no effective steps to deal with these problems, which persisted for months notwithstanding letters of complaint from the plaintiffs and their solicitors to the Township. The plaintiff commenced the present proceeding in October 2019.

[9] The Township accepted the plaintiffs’ position that Shouldice’s operation of its trucking terminal was not in compliance with the site plan agreement. The Township encouraged Shouldice to submit a new revised site plan application which required carrying out engineering studies including noise and light control studies and other remediation. The plaintiffs complain that the resulting new site plan agreement constituted further bad faith conduct on the part of the Township, because, as described in paragraph 24 of the affidavit of the plaintiff Richard Campbell:

Although fully aware of the complaints of the Plaintiffs and knowing that Shouldice Trucking was operating in breach of the existing site plan, the Township encouraged Shouldice Trucking to submit a new amended site plan application for an expansion of the parking lot to accommodate even more additional truck parking spaces in closer proximity to the plaintiffs’ properties... The original site plan application was for all parking spaces to be located to the north of the building on the Shouldice property. The new site plan included twenty-eight new parking spaces to the west of the building. There is no buffer between the new parking spaces and the Plaintiffs properties… Without any further consultation with the Plaintiffs, the Township approved the new site plan agreement on May 9th 2022.

[10] It is notable that the new amended site plan application, including the engineering studies and other investigations, were carried out at a time when the current legal proceeding had been commenced and the plaintiffs were represented by counsel. The plaintiffs state “without any further consultation with the plaintiffs, the Township approved the new site plan agreement on May 9, 2022”. The plaintiffs do not suggest that they were precluded from viewing expert’s reports or providing input or were not consulted with respect to the new amended site plan application. No steps were taken to challenge the amended site plan application or the resultant bylaw. The plaintiffs’ zoning arguments, summarized above, were apparently not pressed.

Discussion

[11] Since the Supreme Court’s decision in Wellbridge Holdings Ltd. v. Greater Winnipeg (Municipality), [1971] S.C.R. 957, the law is well settled that public authorities, such as municipalities, charged with making decisions in the general public interest, including land use planning decisions, ought to be free to make those decisions without being subjected to a private law duty of care.

[12] In Ontario, this legal principle is codified in section 450 of the Municipal Act, 2001, S.O. 2001, c. 25. This section provides that municipalities cannot be held liable for negligence in connection with discretionary actions or inactions resulting from policy decisions made in good faith.

[13] The plaintiffs contend the Township’s decisions pertaining to the Shouldice property should be characterized as operational in nature and not as policy decisions.

[14] The Supreme Court recently clarified the distinction between policy decisions and operational decisions in Nelson (City) v. Marchi, 2021 SCC 41. The purpose of immunity for core policy decisions is the preservation of the separation of powers. Subjecting policy decisions to a private law duty of care would constitute an inappropriate overstepping of the judiciary into the role of the legislature and the executive.

[15] In the present case, elected officials made the decision to allow the operation of a trucking terminal on the Shouldice property. This decision was made only after the site plan agreement was reviewed by various municipal officials and by the Township’s Planning Advisory Committee and the agreement was approved by the enactment of a by-law, which is a legislative act. Courts have held that site plan agreements are primarily planning instruments and involve significant aspects of public interest.

[16] In this case, the Township Council made a decision pertaining to the public interest and the courts are precluded from interfering in the absence of bad faith. The Township points out that their decision remains a policy decision even if the plaintiffs’ allegation of improper application of the zoning by-law is accepted. The Township appropriately relies on case law holding that the following municipal decisions were policy decisions: the approval of a replotting (subdivision) plan without obtaining the necessary engineering studies, Bowen v. Edmonton (City), (1977) 80 DLR (3d) 50; the amendment of a zoning by-law to permit a development in conflict with the official development plan MacNeill v. Saskatoon (City of), 2001 SKQB 300 and, the amendment of planning bylaws following a deficient bylaw review process involving reliance on faulty surveys Neufeld v. Mountain View (County), 2014 ABQB 443.

[17] The burden of proof falls on the plaintiffs to substantiate their allegation that the Township has acted in bad faith, see Valastro v. London (City) 2017 ONSC 773 at paras 30 and 39. The plaintiffs’ allegations of bad faith against the Township are summarized in their factum at paras 48-49:

Knowing that the Plaintiffs had serious complaints and concerns regarding the adverse impacts including truck headlights and high-powered light standards lighting up the Plaintiffs’ houses and backyards, excessive noise from trucks idling for lengthy periods, horns, air brakes, and back-up beepers throughout the day and night causing sleepless nights and the sickening odour of diesel fumes and the involvement of the police, they failed to act fairly to address the Plaintiffs’ concerns. There was a complete lack of due diligence or careful examination of the Plaintiffs’ concerns by the Township. Nobody from the Township or its consultants attended the Plaintiffs properties or consulted with the Plaintiffs to address their concerns even though they had been advised by their own solicitor that the uses of the Shouldice Property were contrary to the Township’s Official Plan and Zoning Bylaw. Instead, the Township, in the face of overwhelming evidence that a trucking terminal was not a Permitted Use under the Township Planning Bylaw on the Shouldice Property, acted in an egregiously unreasonable fashion in encouraging Shouldice Trucking to submit a new site plan application for even more transport truck parking on the Shouldice property. [49] The unreasonableness of the by-law may be given in evidence to establish want of good faith in the council who passed it.

[18] Bad faith normally entails acting arbitrarily, capriciously, dishonestly, or with any ulterior motive against the plaintiffs, see London Taxicab Owners et al. v. Corporation of the City of London, 2013 ONSC 1460 at para 49. The plaintiffs submit that the concept of bad faith can also encompass acts that are so markedly inconsistent with the relevant legislative context that a court cannot reasonably conclude that they were performed in good faith or were so patently unreasonable that they exceeded governmental discretion. The Ontario Court of Appeal commented on what constitutes bad faith on the part of a municipality, by stating:

To say that Council acted in what is characterized in law as "bad faith" is not to imply or suggest any wrongdoing or personal advantage on the part of any of its members. But it is to say, in the factual situation of this case, that Council acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of a municipal government Grosvenor v. East Luther Grand Valley (Township) 2007 ONCA 55.

Summary and Disposition

[19] In the court’s view the evidence on this motion falls well short of any of these suggested standards of bad faith. Essentially the plaintiffs’ position is that bad faith ought to be inferred from the Township’s conduct in entering into a site plan agreement with Shouldice for the operation of a trucking terminal when that usage, on the plaintiffs’ interpretation, was not permitted by the relevant zoning by-law and secondly, when Shouldice was found to be operating its trucking terminal in contravention of the original site plan agreement, the Township failed to pursue any effective enforcement mechanism and instead negotiated an amended site plan agreement to, in effect, allow Shouldice to expand its use of the property, to the further detriment of the plaintiffs’ use and enjoyment of their property.

[20] The contention that operating a trucking terminal violates the relevant by-law is an arguable proposition which has not been adjudicated and which is not clear enough to form the basis for an inference of bad faith against the Township. Township councils have the right to be wrong without that constituting bad faith. As to the amended site plan agreement, the Township took a conciliatory approach to addressing the ongoing problems between the trucking terminal operation and the plaintiffs, rather than by prosecutions and by-law enforcement or taking steps to shut down the trucking terminal. This was a policy decision open to the Township and involved an assessment of the public interest and falls within section 450 of the Municipal Act. The Township carefully assessed the noise and lighting issues and other engineering concerns before approving the amended site plan agreement. The plaintiffs were represented by counsel at the time and there is no suggestion they were precluded from providing appropriate input into the process.

[21] Nothing in these reasons should be seen as precluding the plaintiffs from pursuing their present claims against Shouldice Trucking based on the torts of negligence and nuisance. However, for the reasons provided, summary judgement is granted dismissing the plaintiffs’ claims against the Township. Shouldice Trucking’s crossclaim against the Township is also dismissed.

Costs

[22] The court has a considerable discretion in awarding costs. The plaintiffs have suffered a considerable disruption to their enjoyment of their respective properties which could well have been mitigated by a more balanced approach to these issues by the Township. The Township’s actions do not amount to bad faith conduct against the plaintiffs but in all the circumstances, the court declines to make any award of costs against the plaintiffs.

Justice Charles T. Hackland Date: January 12, 2024