Court File and Parties

COURT FILE NO.: CV-22-00000533-0000 DATE: 20240208 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Navdeep Singh Dhaliwal, Applicant AND 2768220 Ontario Inc., Respondent

BEFORE: Justice Spencer Nicholson

COUNSEL: J. Goudy for the Applicant L. Armstrong for the Respondent

HEARD: November 1, 2023

Reasons

NICHOLSON J.:

[1] This is an application for specific performance relating to three identical Agreements of Purchase of Sale (“Agreements”) in respect of three parcels of five-acre land (Lots 4, 5 and 6) located in Thorndale, Ontario. The Agreements were each conditional on obtaining consent severance approval by the Municipality.

[2] The Respondent purported to terminate the Agreements on the basis that the governing Municipality would not consent to severances of the subject parcels of land.

[3] This application was originally scheduled to be argued on February 1, 2023. However, the parties agreed to an adjournment to submit a severance application to the Municipality on a “without prejudice” basis. The Respondent did so, with input from the Applicant’s engineers. The Municipality refused to consent to the severance.

Background

[4] The Applicant, Navdeep Dhaliwal, is the principal of DLH Carriers Inc. and DLH Transportation Inc., two commercial trucking companies transporting cargo within Canada and the United States.

[5] The Respondent, 2768220 Ontario Inc. (“276 Ontario”), is the owner of an approximately 90-acre property located in Thorndale, Ontario (near London). The principal of 276 Ontario is Robert Pattyn (“Robert”).

[6] The evidence discloses that the Respondent had acquired the property in September of 2020. Phillip Pattyn (“Phillip”), Robert’s cousin, had been the vendor’s listing agent on the property when the Respondent purchased it.

[7] A planning and engineering firm, “SBM”, was engaged by the Respondent shortly thereafter to explore development of the property. In early October 2020, SBM sent a conceptual plan to sever as many lots as possible on the property to the Municipality for a pre-consultation meeting. The pre-consultation meeting took place on October 10, 2020, and involved the principal planner at the Municipality. According to Mr. Moniz, the principal engineer at SBM, the planner did not want to grant severance for some lots without knowing the full extent of the master plan for the entirety of the lands.

[8] SBM prepared subsequent revisions to the conceptual plan following the pre-consultation meeting. The evidence discloses that SBM’s final version of its conceptual plan was completed by January 12, 2021.

[9] It is Robert’s evidence that he was not actively marketing the property for sale. Phillip had been contacted by another potential purchaser in respect of three other lots (Lots 1, 2 and 7). In fact, the Respondent entered into a similar conditional agreement of purchase and sale in respect of Lots 1, 2 and 7.

[10] By cover letter dated February 3, 2021, SBM sent an application to sever Lots 1, 2 and 7 to the Municipality. The cover letter states:

“The RETAINED LANDS which is a large area of 27.8 ha will be the subject of a future plan of subdivision for industrial purposes.”

[11] Meanwhile, the Applicant was seeking a centralized location along the Highway 401 corridor from which to operate his trucking businesses. The evidence discloses that the Applicant had purchased approximately 10 acres of property in Woodstock adjacent to the 401 in 2018. It is the Applicant’s evidence that it was not his intention to use this land for his trucking businesses and it was an investment only. However, I note that the Applicant did apply for re-zoning to commercial use prior to acquiring that property.

[12] In January 2021, the Applicant learned that parts of the Respondent’s land were available for purchase. It is the Applicant’s evidence that the subject property was perfect for his trucking business, as he was looking for land in the London area.

[13] The Applicant contacted Phillip and through Phillip, the Applicant submitted offers to purchase Lots 4, 5 and 6, which formed part of the “Retained Lands” described in the conceptual plan. The offers were for $600,000 per lot.

[14] The Respondent counter-offered at a price of $650,000 per lot, and that offer was accepted.

[15] All communication between Mr. Dhaliwal and Robert took place through Phillip. Robert and Mr. Dhaliwal never communicated directly with each other.

The Agreements of Purchase and Sale

[16] In February of 2021, the parties executed three Agreements in respect of the three separate five-acre parcels of land, Lots 4, 5, and 6. The Applicant paid a $10,000 deposit in respect of each of the lots. The purchase price agreed upon was $650,000 per lot. The closing date was April 4, 2022.

[17] The Agreements were prepared using the Ontario Real Estate Association Form 100 by Phillip. OREA Form 100 contained Clause 15, which reads as follows:

15. PLANNING ACT: This Agreement shall be effective to create an interest in the property only if Seller complies with the subdivision control provisions of the Planning Act by completion and Seller covenants to proceed diligently at Seller’s expense to obtain any necessary consent by completion.

[18] The parties agree that there are two ways to comply with the subdivision control provisions of the Planning Act, R.S.O. 1990, c. P-13—consent severance or plan of subdivision approval. The evidence on this application indicates that the plan of subdivision approval route is a much more expensive and time-consuming process than a consent severance.

[19] Schedule A to the Agreements specified that severance consents, not a plan of subdivision approval, would be the required method to comply with the Planning Act. Schedule A to each Agreement contained the following clause:

“This offer is conditional upon the Seller obtaining, at the Seller’s expense, a consent to sever the property as follows: (AS PER SCHEDULE B). Unless the Seller gives notice in writing delivered to the Buyer personally or in accordance with any other provisions for the delivery of notice this Agreement of Purchase and Sale or any Schedule thereto not later than 11:59 pm on APRIL 4, 2022, that this condition is fulfilled, this Offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to sign any requisite documents required for the above condition and do all things reasonably necessary in support of the satisfaction of the condition. The Seller understands and acknowledges that the Seller shall be responsible for satisfying any conditions imposed for approval of the severance. The Seller shall obtain a reference plan prepared by an Ontario Land Surveyor suitable for registration purposes in the Land Registry Office in which the said property is located.”

[20] I note that Schedule B are the draft plans of subdivision prepared by SBM that show the lots.

[21] The Agreements provided that the Applicant could assign the Agreements to another person, persons or corporations and it was his intention to assign the Agreements to a holding company for his businesses.

[22] The closing date for the Agreements could be extended or shortened if the Municipality needed more or less time to “finish the lots”.

[23] Clause 26 of the Agreements provided as follows:

“26. AGREEMENT IN WRITING: If there is a conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard pre-set portion hereof, the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement including any Schedule attached hereto, shall constitute the entire Agreement between Buyer and Seller. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein. For the purposes of this Agreement, Seller means vendor and Buyer means purchaser. This Agreement shall be read with all changes of gender or number required by the context.”

[24] There is a disagreement between the parties whether Phillip was acting as agent for the Buyer or Seller. I note that there is a Confirmation of Co-operation and Representation Form 320 which describes Phillip as having “entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and the Buyer, with their consent”. This form was initialed by both parties. In my view, little turns on this issue given that I am not relying on contra proferentem in interpreting the Agreements.

The Respondent Purports to Terminate the Agreements

[25] Nine months passed following the execution of the Agreements without any communication between the parties. Then, on October 15, 2021, Phillip sent a text message to Mr. Dhaliwal stating:

“Closing is delayed not sure when. Still working on front pieces. Will be in touch when find out more info.”

[26] On December 22, 2021, the Applicant received an email message from Phillip which attached mutual release forms and stated:

“Unfortunately the seller doesn’t have any time lines for the creation of these lots. Him and his lawyer have instructed me to send mutual releases on the condition of severance from the seller. It’s been over a year of trying to get these done and we have no finish line in sight. Once any time lines come available you will be contacted. Not what I anticipate but this is what’s happening.”

[27] The Applicant was dissatisfied with the Respondent’s position. On February 7, 2022, the Applicant’s lawyer wrote to Phillip to advise that it was the Applicant’s intention to complete the transactions in accordance with the Agreements, including extending the closing dates if required in order to obtain severance consents from the Municipality.

[28] Phillip responded:

“These were conditional. Please contact sellers lawyer Brad Bain Lerners. They aren’t severing these lots.”

[29] The Applicant submitted cautions under the Land Titles Act, RSO 1990, c. L-5 in respect of the lots. He also pre-paid the land transfer tax.

[30] The Applicant’s lawyer also wrote several times to Mr. Bain, without response. On April 6, 2022, having heard nothing from Mr. Bain or the Respondent, the Applicant commenced this application for specific performance.

[31] Certificates of pending litigation were obtained, eventually unopposed, on June 1, 2022.

[32] In the meantime, the Applicant began to develop his property in Woodstock to operate his trucking businesses. The businesses have been running out of the Woodstock location.

[33] The Respondent did not make any application to sever Lots 4, 5 and 6 prior to the without prejudice application made in 2023. The hearing in respect of that application occurred on June 26, 2023. The Municipality refused to sever Lots 4, 5 and 6 on consent.

[34] According to Robert, he was told by the Municipality that consent for severance of Lots 1 and 2 were conditionally approved. However, all of the remaining lots within the subject property had to be severed by way of a plan of subdivision. He was further advised that the plan of subdivision could not proceed until a storm water management pond was constructed. The Municipality was prepared to complete the pond, but that project was still in its infancy. Robert estimated that it would take three to five years to complete the plan of subdivision process.

[35] Of note, the Respondent does intend to proceed with a plan of subdivision for the subject property, at least as of the date of Robert’s cross-examination, conducted May 11, 2022. Mr. Moniz confirmed during his cross-examination that SBM was working on a plan of subdivision in respect of the property for 276 Ontario.

[36] However, it is Robert’s evidence that given the uncertainty of when the Municipality may begin construction on the storm drain, the Respondent is waiting to begin that process as it does not wish to incur costs that could ultimately be thrown away.

What did the Respondent know, and when?

[37] The timing of when Robert knew that the Municipality would not agree to consent severance of Lots 4, 5 and 6 is in issue. Mr. Dhaliwal asserts that the Respondent knew in advance of signing the Agreements that the Municipality would not consent to the severance and that a plan of subdivision was required.

[38] Mr. Moniz, the engineer acting for SBM, was cross-examined. He confirmed that SBM knew by February 3, 2021, when it submitted the severance application for Lots 1, 2 and 7, that the balance of the lands would have to be divided by a plan of subdivision. He believed that the principal planner for the Municipality made Robert aware of that as well.

[39] That is consistent with SBM’s cover letter dated February 3, 2021, which described that the “retained lands”, which included Lots 4, 5 and 6, would be divided by a plan of subdivision.

[40] In his affidavit sworn August 14, 2023, Robert deposes that when the consent application in respect of Lots 1, 2 and 7 was prepared in early January 2021, “it was the intention to have the retained lands be the subject of a future plan of subdivision”. However, it is his position that this was not set in stone.

[41] Robert testified that it was not until a March 29, 2021 council meeting that he was told that the Municipality would not agree to an application for a consent severance in respect of Lots 4, 5 and 6.

[42] Mr. Moniz’ evidence on this point differs. On his cross-examination, Mr. Moniz testified that by March 9, 2021, the plan was to apply for consents to sever Lots 1, 2 and 7, but the balance of the property was to be dealt with through a future industrial plan of subdivision. This included Lots 4, 5 and 6. He testified that by March 9, 2021, the Respondent already knew that the Municipality required a plan of subdivision for Lots 4, 5 and 6.

[43] On March 9, 2021, the Municipality sent notice of a council meeting at which the consent severance of Lots 1, 2 and 7 would be voted on.

[44] On March 29, 2021, the council met virtually to discuss the proposed consent severance of Lots 1, 2 and 7. The meeting was available on Youtube and was available as an exhibit to this application. I have reviewed the council meeting video. Robert and two engineers from SBM, including Mr. Moniz, participated virtually in the meeting.

[45] The meeting focussed on Lots 1, 2 and 7. Lots 4, 5 and 6 were never explicitly discussed.

[46] During the meeting, the Municipality’s principal planner indicates that the balance of the property was to be developed by way of future plan of subdivision. Robert confirmed that it is his intention to move ahead with a “plan of subdivision on the site sooner than later”.

[47] The Municipality conditionally approved severance for Lots 1 and 2. Severance of Lot 7 was deferred. Other than describing that the retained lands would proceed by way of plan of subdivision, no one in the meeting suggested at that time that Lots 4, 5 and 6 could not proceed by way of consent severance.

[48] The consent applications in respect of Lots 1 and 2 subsequently lapsed. According to the Respondent, it was unable to fulfill the time-limited conditions imposed by the Municipality.

[49] From the council meeting, it is apparent that Robert did not learn for the first time, at least not while on camera, that a plan of subdivision was contemplated in respect for the lots other than Lots 1 and 2.

[50] I find as a fact that Robert planned as of late January 2021 to proceed with a plan of subdivision in respect of the balance of his lands, which included Lots 4, 5 and 6. However, I accept that despite this intention, it was not immutable such that when he was subsequently presented with an offer for Lots 4, 5 and 6 it was still open to the Respondent to revisit that plan.

[51] However, by March 9, 2021, I am persuaded that the Respondent’s preferred course was to proceed with a plan of subdivision in respect of Lots 4, 5 and 6. This is consistent with the evidence of Mr. Moniz, with the council meeting and with the fact that the Respondent never made an application for a consent severance in respect of Lots 4, 5 and 6.

Position of the Parties

[52] The Applicant seeks an order for specific performance and takes the position that since the Municipality will not consent to sever the lots, the Respondent is obligated to create Lots 4, 5 and 6 by plan of subdivision, at its own costs, and complete the transaction. The Applicant thus seeks an order compelling the Respondent to make that application, complete the plan of subdivision and transfer the lots to the Applicant.

[53] Alternatively, the Applicant seeks damages and proposes that I order the trial of an issue with respect to damages.

[54] The Respondent argues that the Applicant is seeking to re-write the Agreements by asking the court to compel the Respondent to comply with the Planning Act by way of a plan for subdivision.

Legal Analysis

[55] This case involves two parties engaged in a negotiated commercial transaction culminating in the Agreements. The principles of contractual interpretation apply.

[56] As stated in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, the court must take a practical, common-sense approach in order to determine “the intent of the parties and the scope of their understanding”. To do so, the court 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 the formation of the contract.

[57] In the commercial context, contracts should be interpreted in a manner consistent with good business sense and to avoid commercial absurdity.

[58] The Applicant also argues that the Respondent had a duty to perform its contractual obligations honestly and in good faith (see: Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 SCR 494).

[59] The Applicant relies upon Dynamic Transport Ltd. v. O.K. Detailing Ltd., [1978] 2 SCR 1072. In that case, the Supreme Court of Canada held that where an agreement of purchase and sale has subdivision approval as a condition precedent to the obligation to complete the transaction, there is an implied term that the vendor will use best efforts to secure the subdivision approval.

[60] The Supreme Court of Canada stated as follows (at page 1084):

There are many cases in which provisions of a contract were subject to the condition precedent of an approval or a licence being obtained, and one party was by inference in the circumstances held to have undertaken to apply for the approval or licence; see Hargreaves Transport Ltd. v. Lynch; Brauer & Co. (Great Britain) Ltd. v. James Clark (Brush Materials) Ltd.; Société d’Avances Commerciales (London) Ltd. v. Besse & Co. (London) Ltd.; and Smallman v. Smallman. This type of case is merely a specific instance of the general principle that “the court will readily imply a promise on the part of each party to do all that is necessary to secure performance of the contract”: 9 Hals. (4th ed.), p. 234, para. 350: see also Chitty on Contracts, “General Principles”, (23rd ed.) p. 316, para. 698, where it is said: “The court will also imply that each party is under an obligation to do all that is necessary on his part to secure performance of the contract.”

[61] The Supreme Court added:

“…The vendor is under a duty to act in good faith and to take all reasonable steps to complete the sale. I cannot accept the proposition that failure to fix responsibility for obtaining planning approval renders a contract unenforceable. The common intention to transfer a parcel of land in the knowledge that a subdivision is required in order to effect such transfer must be taken to include agreement that the vendor will make a proper application for subdivision and use his best efforts to obtain such subdivision.”

[62] The Supreme Court quoted from Hogg v. Wilkin (1974), 5 O.R. (2d) 759, at p. 761:

“In this contract the only inference to be drawn is that it was the vendors’ obligation to make the application. An application for such consent would have to be carried out in good faith to its logical conclusion by presentation of same to the committee, the necessary appearance before the committee and furnishing any answers or material that would be reasonably within the power of the vendors to supply if requested by that committee.”

[63] In Bhasin, supra, the Supreme Court of Canada referred to Dynamic Transport Ltd. as an example of an obligation to act in good faith in furtherance of contractual obligations.

[64] In John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd., 63 O.R. (3d) 304, [2003] O.J. No. 350, (Ont. C.A.), the Ontario Court of Appeal interpreted the clause in a standard agreement of purchase and sale that required the vendor to comply with the subdivision control provisions of the Planning Act. The vendor had taken initial steps to obtain severance approval, which was granted, subject to certain conditions, one of which was the extension of a road. The vendor intended to appeal the Municipality’s condition, but then took the position that it was entitled to treat the agreement of purchase and sale as terminated. The purchaser sued for specific performance.

[65] The Court of Appeal upheld Lax J.’s order for specific performance, requiring the vendor to comply with the conditions imposed upon it by the municipality as part of the consent severance application. The chief condition was extending a municipal road.

[66] In the case before me, as a matter of contractual interpretation, the Respondent expressly agreed in Schedule A to “sign any requisite documents required for the above condition and do all things reasonably necessary in support of the satisfaction of the condition”. Unlike in Dynamic Transport Ltd., this was an express allocation by the parties of the responsibility to obtain a consent severance.

[67] I find that the Respondent, up until the without prejudice severance application, made no application for a consent severance in respect of Lots 4, 5 and 6, despite being expressly obligated to do so. It was, in my view, insufficient to infer that the Municipality would not agree to a consent severance in respect of those lots because of the position that it had taken with respect to any other lots.

[68] The Respondent cannot rely on its failure to apply for the consent severance as a basis for avoiding the contract (see: Aldercrest Developments Ltd. v. Hunter et al., [1970] 2. O.R. 562-569).

[69] In any event, up until the time that the Respondent purported to terminate the Agreements, there was no suitable proof that the Municipality would not grant a consent severance, as that had not even been discussed in the council meeting.

[70] However, as a matter of contractual interpretation, the Applicant is not entitled, in my view, to compel the Respondent to undertake a plan of subdivision in order to complete this transaction. The parties in this case, unlike in Dynamic Transport, never contemplated that the Respondent would proceed by way of plan of subdivision. Rather, pursuant to Schedule A, the Respondent was only required to obtain consent approval.

[71] The Applicant argues that if the consent severance is not obtained, the default provision under Clause 15 of the Agreements requires the Respondent to proceed by way of plan of subdivision. I disagree. Rather, Schedule A provides that unless the Seller provides written notice prior to 11:59 pm on April 4, 2022, that a consent severance has been obtained, the Agreement is null and void. In my view, making the Agreement null and void in Schedule A makes it clear that the vendor is not obligated to take the further step of obtaining a plan of subdivision in the event that a consent severance is not obtained.

[72] In these Agreements, Schedule A is, in my view, a complete “code” for the seller’s obligations in terms of compliance with the Planning Act. Schedule A is in conflict or discrepant with Clause 15, which obligates the vendor to comply with the subdivision control provisions and to proceed diligently to do so, which includes one of the two methods of obtaining consent. Schedule A only calls for the Seller to pursue a consent severance. Accordingly, to the extent that Clause 15 would otherwise require the Respondent to proceed with a plan of subdivision, it is superseded by Schedule A by operation of Clause 26 of the Agreements.

[73] Had the parties wished to require the Seller to proceed by way of a plan of subdivision in the event that a consent severance was not obtained, they could have included that language in the Agreements. They did not do so.

[74] Thus, it is my opinion that Clause 15 has no operation in the within Agreements.

[75] The important distinction between the case at hand and Dynamic Transport is that the parties here did turn their mind to the Planning Act and expressly agreed that only a consent severance was to be sought. It was also expressly agreed that should the consent severance not be obtained prior to April 4, 2022, the transaction would be at an end, unless the inability to obtain a consent severance was simply a matter of the Municipality requiring additional time to “finish the lots”.

[76] The evidence in this case, including the ultimate rejection of the without prejudice application for severance, indicates that this was not simply that the Municipality required more time to “finish the lots”. I am satisfied that the Municipality was not going to grant a consent severance within any commercially reasonable time frame.

[77] The Applicant, by asking this court to impose upon the Respondent an obligation to seek a plan of subdivision, is attempting to re-write the Agreements. On the evidence before me, a plan of subdivision is a far more expensive and time-consuming process. Forcing the Respondent to pursue a plan of subdivision fundamentally impacts the value of the transaction to both parties by giving the Applicant something he did not bargain for. This would not accord with “good business sense”.

[78] The Applicant argues that the Respondent knew prior to entering into the Agreements that the Municipality would not grant a conditional severance with respect to Lots 4, 5 and 6. He points to the cover letter from SBM to the Municipality dated February 3, 2021 enclosing the consent severance application in respect of Lots 1, 2 and 7. The Applicant also relies upon Mr. Moniz’ evidence during his cross-examination where he confirmed that SBM knew by February 3, 2021 that the balance of the lands would have to be divided by a plan of subdivision.

[79] Thus, it is argued that the Respondent was not acting in good faith.

[80] I accept that the Respondent, even with an intention to proceed by way of plan of subdivision, was still entitled to enter into an agreement by which a consent severance was anticipated. Thus, whether or not the Respondent intended to proceed by way of plan of subdivision does not really add much to the case. The fact remains that the Respondent obligated itself to make best efforts to obtain a consent severance. It thus acquired a good faith duty to pursue a consent severance application.

[81] How can the court remedy this situation?

[82] Contractual remedies are intended to provide the non-breaching party with what the contract was to provide. This can be accomplished by awarding damages to the innocent party to provide that party with the financial equivalent of performance (see: Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, at para. 68).

[83] In Lucas, the Court of Appeal then proceeded to address when it was appropriate to grant specific performance. The Court noted that damages may not, in some cases, afford a complete remedy. However, a party seeking specific performance must establish a fair, real and substantial justification by showing that damages would be inadequate to compensate for its loss of the subject property.

[84] In Semelhago v. Paramedevan, [1996] 2 SCR 415, the Supreme Court of Canada stated as follows, at para. 15:

[15] Moreover, the claim for specific performance revives the contract to the extent that the defendant who has failed to perform can avoid a breach if at anytime up to the date of judgment, performance is tendered. In cases such as the one at bar, where the vendor reneges in anticipation of performance, the innocent party has two options. He or she may accept the repudiation and treat the agreement as being at an end. In that event, both parties are relieved from performing any outstanding obligations and the injured party may commence an action for damages. Alternatively, the injured party may decline to accept the repudiation and continue to insist on performance. In that case, the contract continues in force and neither party is relieved of their obligations under the agreement. As is elaborated in McGregor on Damages (13th ed. 1972), at p. 149:

Where a party to a contract repudiates it, the other party has an option to accept or not to accept the repudiation. If he does not accept it, there is still no breach of contract, and the contract subsists for the benefit of both parties and no need to mitigate arises. On the other hand, if the repudiation is accepted this results in an anticipatory breach of contract in respect of which suit can be brought at once for damages…

Thus, the claim for specific performance can be seen as reviving the contract to the extent that the defendant who has failed to perform can avoid a breach if, at any time up to the date of judgment, performance is tendered. In this way, a claim for specific performance has the effect of postponing the date of breach.

[85] The Applicant in the case before me has made a claim for specific performance, thereby opting to continue the Agreements.

[86] In Dynamic Transport Ltd., at page 1087, Dickson J. made a declaration that the contract was binding in accordance with its terms, including the implied term that the vendor would seek subdivision approval. Accordingly, he compelled the vendor to make and pursue a bona fide application as may be necessary to obtain registration of the approved plan of subdivision. If the vendor did not do so, the purchaser was entitled to damages as found by the trial judge. In the event that a bona fide application was rejected, the claim for specific performance was dismissed, as was the claim for damages.

[87] Lax J., at the trial level, in John E. Dodge v. 805062 Ontario Ltd., 56 O.R. (3d) 341. [2001] O.J. No. 4397, ordered specific performance.

[88] The Court of Appeal described in John E. Dodge at paras. 8 and 9, that the import of Lax J.’s decision was that:

[8] …Under the Planning Act, where an approval authority such as the Committee of Adjustment has imposed conditions to a severance, the consent to sever is not final until all conditions have been satisfied and, if the conditions are not satisfied within one year, the application is deemed refused. As severance approval for the property had expired, the judgment of Lax J. required Magna to reapply to the Committee to seek severance approval, appeal to the OMB any unacceptable conditions imposed by the Committee and, subject to the OMB’s decision, comply with all severance conditions.

[9] Magna appealed the judgment of Lax J. and brought a motion for a stay before Charron J.A. on October 22, 2001. Charron J.A. ordered Magna to prepare and file an application for severance approval with the Committee and if unacceptable conditions were once again imposed, to proceed with an appeal to the OMB. The remainder of the judgment was stayed.

[89] Thus, the Court of Appeal required Magna to comply with the conditions attached to the consent severance, unless an OMB appeal was successful.

[90] In the case before me, I would have ordered that the Respondent make an application for consent severance in respect of Lots 4, 5 and 6, and comply with any conditions that the Municipality might impose in the event that the application was accepted. Had the application been rejected, it would then be appropriate to consider that the offers are “null and void” and treat the transaction as at an end.

[91] In my view, such a result is consistent with Dynamic Transport Ltd., John E. Dodge, and most important, the pact reached by the parties as evidenced by the Agreements.

[92] The parties made a “without prejudice” application for a consent severance in respect of Lots 4, 5 and 6 on May 8, 2023. The Applicant’s planning expert was permitted to review and amend the application prior to its submission to the Municipality. On June 26, 2023, the council held a hearing during which it rejected the consent severance application. It delivered a Notice of Decision dated July 5, 2023 in which it set out its reasons for withholding consent, which included:

(a) That the applications are not consistent with the Provincial Policy Statement. (b) Conformity with the County of the Middlesex Official Plan and the Municipal of Thames Centre Official Plan would not be maintained. (c) The requirements of the Zoning By-Law would not be satisfied. (d) The matters set out in Section 51(24) of the Planning Act would not be satisfied.

[93] The Notice provides that an appeal of the decision could be made to the Ontario Land Tribunal before July 25, 2023. No appeal was taken from the decision.

[94] I have considered what impact the “without prejudice” description of the application for consent approval should have. The endorsement of McArthur J. dated February 1, 2023 includes the following:

4. This severance application and its results shall be without prejudice to the rights of either party in relation to the request for specific performance and the relief sought in this application.”

[95] During oral argument, it was apparent to me that the parties had different views of what “without prejudice” meant. It seemed to me that the Applicant believed that “without prejudice” implied that the result of the consent application should not be relied upon for the purpose of my decision. It was my impression that the Respondent’s position was that although it made the “without prejudice” application it was not obligated to do so.

[96] Regardless of the “without prejudice” nature of the consent severance application that was made, I am not prepared to compel the parties to re-submit the application. I have already found that the Respondent was required to make that application. It has now done so. It would be redundant to require the Respondent to re-submit the application again. The Applicant did participate meaningfully in the process by having its engineers review the application.

[97] In this case, the parties included a contractual remedy in the event that a consent severance would not be forthcoming by April 4, 2022—termination of the Agreements and the return of the Applicant’s deposits.

[98] There is no injustice to holding both parties to their agreement. The Respondent was obligated to apply for a consent severance. It has now done so. The Applicant only bargained to receive Lots 4, 5 and 6 if the Municipality agreed to consent severance. The Municipality has now made it clear that such consent is not forthcoming. Therefore, the Applicant is getting precisely what he bargained for.

[99] Accordingly, I would dismiss the application for specific performance. However, the Applicant is entitled to the return of his deposits, with interest calculated to the date of this decision.

[100] If the parties are unable to agree upon costs of this Application, the Respondent shall serve and file written submissions, not to exceed three pages in length, double spaced, by no later than March 1, 2024. The Applicant shall serve and file its written submissions within the same parameters by March 11, 2024. The submissions should be emailed to the London court staff, who will forward the submissions to my attention.

“Justice S. Nicholson” Justice Spencer Nicholson Date: February 8, 2024