Municipal & Planning Law Reports

MUNICIPAL & PLANNING LAW REPORTS Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit municipal

VOLUME 29 (Cited 29 M.P.L.R. (5th))

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[Indexed as: 1694192 Alberta Ltd. v. Lac La Biche (County) (Subdivision and Development Appeal Board)] 1694192 Alberta Ltd., Appellant and Subdivision and Development Appeal Board of Lac La Biche County and Lac La Biche County, Respondents and Patrick Leibel, Respondent by Order Alberta Court of Appeal Docket: Edmonton Appeal 1303-0110-AC 2014 ABCA 319 Ellen Picard, Jack Watson, Brian O’Ferrall JJ.A. Heard: May 27, 2014 Judgment: October 1, 2014 Municipal law –––– Development control — Development permits — Prac- tice and procedure –––– Authority approved developer’s development permit — Authority published notice of approval in local newspaper but failed to provide written notice of approval to adjacent landowners as required by s. 24(3) of county’s land use by-law within time frame contemplated — Developer began construction pursuant to permit — County discovered that s. 24(3) notice requirement was not complied with — Authority sent written notices to adjacent landowners — Adjacent landowner appealed development permit — Subdivi- sion and Development Appeal Board found it had jurisdiction to hear appeal — Board found that development permit should be revoked and allowed appeal — Developer appealed — Appeal dismissed — Section 24 of land use by-law contemplated two different notices — Section 24(2) provided for publication in local newspaper within ten working days of decision on development permit and s. 24(3) provided notice by regular mail within five working days to adjacent landowners — There was no provision in land use by-law that dealt with effect of non-compliance with notice provision to adjacent landowners under s. 24(3) — Rights of adjacent landowner to appeal had to be determined by statu- 2 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th) tory construction — Section 24(3) notice given beyond five-day period specified in land use by-law and breached mandatory requirement of land use by-law — However, breach of mandatory provision of enactment should not nullify everything that hinged on it — Notice given of development permit was first and only notice given to adjacent landowner and adjacent landowner’s rights were not cancelled by authority’s breach of limitation period imposed on it — Board’s decision fell within range of legally acceptable outcomes in light of legislative scheme and relevant contextual factors — Reasonable for board to find that development permit was not consistent with land use by-law. Municipal law –––– Development control — Development permits — Juris- diction and powers — Development appeal board –––– Authority approved developer’s development permit — Authority published notice of approval in local newspaper but failed to provide written notice of approval to adjacent landowners as required by s. 24(3) of county’s land use by-law within time frame contemplated — Developer began construction pursuant to permit — County discovered that s. 24(3) notice requirement was not complied with — Authority sent written notices to adjacent landowners — Adjacent landowner appealed development permit — Subdivision and Development Appeal Board (SDAB) found it had jurisdiction to hear appeal — Board found that development permit should be revoked and allowed appeal — Developer appealed — Appeal dismissed — Correctness applied to challenge to whether SDAB had jurisdiction to proceed with appeal, in light of facial departure from imperative language in land use by-law — Reasonableness standard for whether SDAB committed any error of law in its interpretation and application of s. 87 of land use by-law to this development permit — Board’s decision fell within range of legally acceptable outcomes in light of legislative scheme and relevant contextual factors — Reasonable for board to find that development permit was not consistent with land use by-law. Cases considered: A.T.A. v. Alberta (Information & Privacy Commissioner) (2010), [2010] 8 W.W.R. 457, 1 Admin. L.R. (5th) 60, 474 A.R. 169, 479 W.A.C. 169, 316 D.L.R. (4th) 117, 2010 CarswellAlta 94, 2010 ABCA 26, 21 Alta. L.R. (5th) 30, [2010] A.J. No. 51 (Alta. C.A.) — considered A.T.A. v. Alberta (Information & Privacy Commissioner) (2011), 339 D.L.R. (4th) 428, 2011 CarswellAlta 2068, 2011 CarswellAlta 2069, 2011 SCC 61, (sub nom. Alberta Teachers’ Association v. Information & Privacy Commissioner (Alta.)) 424 N.R. 70, 52 Alta. L.R. (5th) 1, 28 Admin. L.R. (5th) 177, [2012] 2 W.W.R. 434, (sub nom. Alberta (Information & Privacy Commissioner) v. Alberta Teachers’ Association) [2011] 3 S.C.R. 654, (sub nom. Alberta Teachers’ Association v. Information and Privacy Commis- sioner) 519 A.R. 1, (sub nom. Alberta Teachers’ Association v. Information 1694192 Alberta Ltd. v. Lac La Biche (County) 3

and Privacy Commissioner) 539 W.A.C. 1, [2011] S.C.J. No. 61 (S.C.C.) — considered Alberta (Minister of Education) v. Canadian Copyright Licensing Agency (2012), 38 Admin. L.R. (5th) 214, 2012 CarswellNat 2419, 2012 Car- swellNat 2420, 2012 SCC 37, 347 D.L.R. (4th) 287, 102 C.P.R. (4th) 255, 432 N.R. 134, (sub nom. Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright)) [2012] 2 S.C.R. 345, [2012] S.C.J. No. 37 (S.C.C.) — referred to Alliance Pipeline Ltd. v. Smith (2011), 328 D.L.R. (4th) 1, 56 C.E.L.R. (3d) 161, 16 Admin. L.R. (5th) 157, [2011] 1 S.C.R. 160, 2011 SCC 7, 2011 Car- swellNat 202, 2011 CarswellNat 203, 102 L.C.R. 1, 412 N.R. 66, [2011] S.C.J. No. 7, [2011] A.C.S. No. 7 (S.C.C.) — referred to Berardinelli v. Ontario Housing Corp. (1978), 8 C.P.C. 100, 90 D.L.R. (3d) 481, 23 N.R. 298, 1978 CarswellOnt 462, 1978 CarswellOnt 596, [1979] 1 S.C.R. 275, [1978] S.C.J. No. 86 (S.C.C.) — referred to Bowen v. Edmonton (City) Council (1977), 2 Alta. L.R. (2d) 112, 1977 CarswellAlta 15, 3 A.R. 63, 75 D.L.R. (3d) 131, [1977] A.J. No. 560 (Alta. C.A.) — followed British Columbia (Securities Commission) v. McLean (2013), (sub nom. McLean v. British Columbia Securities Commission) 347 B.C.A.C. 1, (sub nom. McLean v. British Columbia Securities Commission) 593 W.A.C. 1, 64 Ad- min. L.R. (5th) 237, 2013 CarswellBC 3618, 2013 CarswellBC 3619, 2013 SCC 67, [2014] 2 W.W.R. 415, 366 D.L.R. (4th) 30, (sub nom. McLean v. British Columbia Securities Commission) 452 N.R. 340, 53 B.C.L.R. (5th) 1, (sub nom. McLean v. British Columbia (Securities Commission)) [2013] 3 S.C.R. 895, [2013] S.C.J. No. 67 (S.C.C.) — referred to Cameron Corp. v. Edmonton (Subdivision and Development Appeal Board) (2012), 2012 ABCA 254, 2012 CarswellAlta 1485 (Alta. C.A.) — referred to Canada Trustco Mortgage Co. v. R. (2005), (sub nom. Canada Trustco Mortgage Co. v. Canada) 2005 D.T.C. 5523 (Eng.), (sub nom. Hypoth`eques Trustco Canada v. Canada) 2005 D.T.C. 5547 (Fr.), [2005] 5 C.T.C. 215, 2005 SCC 54, (sub nom. Minister of National Revenue v. Canada Trustco Mortgage Co.) 340 N.R. 1, 2005 CarswellNat 3212, 2005 CarswellNat 3213, 259 D.L.R. (4th) 193, [2005] 2 S.C.R. 601, [2005] S.C.J. No. 56 (S.C.C.) — referred to Carrier Sekani Tribal Council v. British Columbia (Utilities Commission) (2010), 325 D.L.R. (4th) 1, 406 N.R. 333, (sub nom. Rio Tinto Alcon Inc. v. Carrier Sekani Tribal Council) [2010] 4 C.N.L.R. 250, (sub nom. Rio Tinto Alcon Inc. v. Carrier Sekani Tribal Council) [2010] 2 S.C.R. 650, 2010 Car- swellBC 2867, 2010 CarswellBC 2868, 2010 SCC 43, (sub nom. Rio Tinto Alcon Inc. v. Carrier Sekani Tribal Council) 225 C.R.R. (2d) 75, 11 Admin. L.R. (5th) 246, 96 R.P.R. (4th) 1, [2010] 11 W.W.R. 577, 9 B.C.L.R. (5th) 4 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

205, 54 C.E.L.R. (3d) 1, 293 B.C.A.C. 175, 496 W.A.C. 175, [2010] A.C.S. No. 43, [2010] S.C.J. No. 43 (S.C.C.) — referred to Catalyst Paper Corp. v. North Cowichan (District) (2012), 34 Admin. L.R. (5th) 175, 2012 CarswellBC 17, 2012 CarswellBC 18, 2012 SCC 2, 11 R.P.R. (5th) 1, [2012] 2 W.W.R. 415, 340 D.L.R. (4th) 385, 26 B.C.L.R. (5th) 1, 93 M.P.L.R. (4th) 1, 425 N.R. 22, 316 B.C.A.C. 1, 537 W.A.C. 1, [2012] 1 S.C.R. 5, [2012] S.C.J. No. 2, [2012] A.C.S. No. 2 (S.C.C.) — referred to Coventry Homes Inc. v. Beaumont (Town) Subdivision & Development Appeal Board (2001), 18 M.P.L.R. (3d) 135, 277 A.R. 278, 242 W.A.C. 278, 2001 ABCA 49, 2001 CarswellAlta 188, (sub nom. Coventry Homes Inc. v. Beaumont (Town)) 197 D.L.R. (4th) 255, [2001] A.J. No. 219 (Alta. C.A.) — followed Edmonton Police Service v. Furlong (2013), 50 Admin. L.R. (5th) 259, 2013 ABCA 121, 2013 CarswellAlta 443, 544 A.R. 191, 567 W.A.C. 191, 78 Alta. L.R. (5th) 414 (Alta. C.A.) — referred to Emeric Holdings Inc. v. Edmonton (City) (2009), 53 M.P.L.R. (4th) 170, 2009 CarswellAlta 257, 2009 ABCA 65, 447 W.A.C. 31, 448 A.R. 31, 77 R.P.R. (4th) 1, [2009] 4 W.W.R. 197, 308 D.L.R. (4th) 464, 3 Alta. L.R. (5th) 1 (Alta. C.A.) — referred to Grey v. Pearson (1857), 29 L.T.O.S. 67, 6 H.L.C. 61, [1843-60] All E.R. Rep. 21, 10 E.R. 1216 (U.K. H.L.) — considered Imperial Oil Ltd. v. Calgary (City) (2014), 83 C.E.L.R. (3d) 181, 374 D.L.R. (4th) 489, 70 Admin. L.R. (5th) 119, 26 M.P.L.R. (5th) 35, 2014 ABCA 231, 2014 CarswellAlta 1136 (Alta. C.A.) — referred to Irving Pulp & Paper Ltd. v. CEP, Local 30 (2013), 52 Admin. L.R. (5th) 1, (sub nom. Irving Pulp & Paper Ltd. v. Communications, Energy and Paperworkers Union of Canada, Local 30) 1048 A.P.R. 1, (sub nom. Irving Pulp & Paper Ltd. v. Communications, Energy and Paperworkers Union of Canada, Local 30) 404 N.B.R. (2d) 1, (sub nom. C.E.P.U., Local 30 v. Irving Pulp & Paper, Ltd) 77 C.H.R.R. D/304, 2013 SCC 34, 2013 Car- swellNB 275, 2013 CarswellNB 276, 359 D.L.R. (4th) 394, (sub nom. Irving Pulp & Paper Ltd. v. Communications, Energy and Paperworkers Union of Canada, Local 30) 445 N.R. 1, 231 L.A.C. (4th) 209, (sub nom. Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper Ltd.) 285 C.R.R. (2d) 150, D.T.E. 2013T-418, (sub nom. CEPU, Local 30 v. Irving Pulp & Paper) 2013 C.L.L.C. 220-037, (sub nom. Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd.) [2013] 2 S.C.R. 458, [2013] S.C.J. No. 34, [2013] A.C.S. No. 34 (S.C.C.) — referred to Kiewit Energy Canada Corp. v. Edmonton (City) Subdivision and Development Appeal Board (2013), 2013 ABCA 407, 2013 CarswellAlta 2327, 16 M.P.L.R. (5th) 25, 87 Alta. L.R. (5th) 287, 566 A.R. 90, 597 W.A.C. 90 (Alta. C.A.) — referred to 1694192 Alberta Ltd. v. Lac La Biche (County) 5

Kiewit Energy Canada Corp. v. Edmonton (Subdivision and Development Appeal Board) (2014), 2014 CarswellAlta 607, 2014 CarswellAlta 608, [2014] S.C.C.A. No. 27 (S.C.C.) — referred to M.A.H.C.P. v. Nor-Man Regional Health Authority Inc. (2011), D.T.E. 2011T- 803, 2011 CarswellMan 606, 2011 CarswellMan 607, 2011 SCC 59, (sub nom. Nor-Man Regional Health Authority Inc. v. M.A.H.C.P.) 2012 C.L.L.C. 220-004, 96 C.C.E.L. (3d) 1, (sub nom. Manitoba Assn. of Health Care Professionals v. Nor-Man Regional Health Authority Inc.) 212 L.A.C. (4th) 93, (sub nom. Manitoba Assn. of Health Care Professionals v. Nor- Man Regional Health Authority Inc.) 340 D.L.R. (4th) 1, (sub nom. Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc.) 423 N.R. 95, [2012] 2 W.W.R. 619, 29 Admin. L.R. (5th) 1, (sub nom. Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health Care Professionals) [2011] 3 S.C.R. 616, (sub nom. Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc.) 275 Man. R. (2d) 16, (sub nom. Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc.) 538 W.A.C. 16, [2011] A.C.S. No. 59, [2011] S.C.J. No. 59 (S.C.C.) — referred to Maduke v. Leduc (County) No. 25 (2010), 2010 ABCA 331, 2010 CarswellAlta 2151, [2010] A.J. No. 1260 (Alta. C.A.) — referred to Masellis v. Edmonton (City) Subdivision & Development Appeal Board (2011), 2011 CarswellAlta 856, 83 M.P.L.R. (4th) 239, 2011 ABCA 157, 505 A.R. 231, 522 W.A.C. 231 (Alta. C.A.) — considered McCauley Community League v. Edmonton (City) (2012), 522 A.R. 98, 544 W.A.C. 98, 2012 CarswellAlta 383, 2012 ABCA 86, 60 Alta. L.R. (5th) 1, 35 Admin. L.R. (5th) 181 (Alta. C.A.) — referred to New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, 2008 CSC 9, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 Car- swellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9, [2008] A.C.S. No. 9 (S.C.C.) — referred to Public Performance of Musical Works, Re (2012), 38 Admin. L.R. (5th) 1, 2012 CarswellNat 2378, 2012 CarswellNat 2379, 2012 SCC 35, 102 C.P.R. (4th) 204, (sub nom. Shaw Cablesystems G.P. v. Society of Composers, Authors and Music Publishers of Canada) 347 D.L.R. (4th) 235, (sub nom. Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada) 432 N.R. 1, (sub nom. Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada) [2012] 2 6 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

S.C.R. 283, [2012] S.C.J. No. 35, [2012] A.C.S. No. 35 (S.C.C.) — referred to R. v. W. (C.K.) (2005), 2005 ABCA 446, 2005 CarswellAlta 1882, 204 C.C.C. (3d) 380, 376 A.R. 107, 360 W.A.C. 107, [2006] 3 W.W.R. 443, 53 Alta. L.R. (4th) 274, [2005] A.J. No. 1753 (Alta. C.A.) — followed Reference re Broadcasting Act, S.C. 1991 (Canada) (2012), 106 C.P.R. (4th) 241, 352 D.L.R. (4th) 433, [2012] 3 S.C.R. 489, 2012 SCC 68, 2012 Car- swellNat 4810, 2012 CarswellNat 4811, (sub nom. Reference re Broadcasting Act) 437 N.R. 124 (S.C.C.) — referred to Rizzo & Rizzo Shoes Ltd., Re (1998), 1998 CarswellOnt 1, 1998 CarswellOnt 2, 50 C.B.R. (3d) 163, [1998] 1 S.C.R. 27, 33 C.C.E.L. (2d) 173, 154 D.L.R. (4th) 193, 36 O.R. (3d) 418 (headnote only), (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 221 N.R. 241, (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 106 O.A.C. 1, (sub nom. Adrien v. Ontario Ministry of La- bour) 98 C.L.L.C. 210-006, 36 O.R. (3d) 418 (note), 36 O.R. (3d) 418, [1998] S.C.J. No. 2 (S.C.C.) — referred to Stewart v. Lac Ste. Anne (County) Subdivision & Development Appeal Board (2006), 2006 ABCA 264, 2006 CarswellAlta 1209, 397 A.R. 185, 384 W.A.C. 185, 274 D.L.R. (4th) 291, 64 Alta. L.R. (4th) 13, 25 M.P.L.R. (4th) 161, [2006] 11 W.W.R. 595, 53 Admin. L.R. (4th) 126 (Alta. C.A.) — referred to Tymchak v. Edmonton (Subdivision & Development Appeal Board) (2012), 2012 CarswellAlta 89, 2012 ABCA 22, 61 Alta. L.R. (5th) 396, 519 A.R. 295, 539 W.A.C. 295 (Alta. C.A.) — referred to Willick v. Willick (1994), 6 R.F.L. (4th) 161, 119 D.L.R. (4th) 405, 173 N.R. 321, 125 Sask. R. 81, 81 W.A.C. 81, [1994] 3 S.C.R. 670, [1994] R.D.F. 617, 1994 CarswellSask 48, 1994 CarswellSask 450, [1994] S.C.J. No. 94, EYB 1994-67936 (S.C.C.) — considered Young Estate v. TransAlta Utilities Corp. (1997), 1997 CarswellAlta 975, 98 C.L.L.C. 220-032, [1998] 4 W.W.R. 1, 55 Alta. L.R. (3d) 183, 209 A.R. 89, 160 W.A.C. 89, 1997 ABCA 349, [1997] A.J. No. 1114 (Alta. C.A.) — referred to 321665 Alberta Ltd. v. Mobil Oil Canada Ltd. (2013), 2013 ABCA 221, 2013 CarswellAlta 992, 2 C.C.L.T. (4th) 188, 82 Alta. L.R. (5th) 124, [2013] 10 W.W.R. 758, (sub nom. 321665 Alberta Ltd. v. Exxon Mobil Canada Ltd.) 553 A.R. 293, (sub nom. 321665 Alberta Ltd. v. ExxonMobil Canada Ltd.) 583 W.A.C. 293 (Alta. C.A.) — referred to 321665 Alberta Ltd. v. Mobil Oil Canada Ltd. (2014), 2014 CarswellAlta 62, 2014 CarswellAlta 63, [2013] S.C.C.A. No. 341 (S.C.C.) — referred to 1694192 Alberta Ltd. v. Lac La Biche (County) (Subdivision and Development Appeal Board) (2013), 2013 ABCA 272, 2013 CarswellAlta 1296 (Alta. C.A.) — referred to 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 7

Statutes considered: Municipal Government Act, R.S.A. 2000, c. M-26 Generally — referred to s. 13 — referred to s. 640(2)(d) — referred to s. 645 — referred to s. 686(1)(b) — considered s. 688(1) — considered

APPEAL by developer from decision of Subdivision and Development Appeal Board revoking development permit.

R. Noce, Q.C., L.D. Kumpf (Student-at-Law), for Appellant S.C. McNaughtan, Q.C. (Agent), for W.W. Barclay, for Respondent, Subdivi- sion and Development Appeal Board of Lac La Biche County G.F. Chivers, for Respondent, Lac La Biche County J.W. Murphy, Q.C., for Respondent, by Order Patrick Leibel

Per curiam: I Introduction 1 The main issue on this appeal involves balancing the right of a developer to proceed with a development, once approved, with the right of persons affected to contest that development. All development has effects. Disallowance of development also has effects. So land use is regu- lated by government: Municipal Government Act, RSA 200 c M-26 (“MGA”). Land use bylaws seek to give both developers and others affected a fair chance to be heard in the course of that regulatory process. On the other hand, positive planning and development is desirable and it only works effectively if there is both certainty and finality in that process.

II Circumstances 2 In this case, the Municipal Planning Commission for the County of Lac La Biche [the “Authority”] approved a development permit to the appellant, 1694192 Alberta Ltd, (“1694”) on October 5, 2012. The permit related to the development of a campground on a parcel at the end of a township road. The parcel was included in a subdivision plan that also included an area of lots called Poplar Point. This was a discretionary use situation within the Lac La Biche Area Structure Plan as within an agri- 8 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

cultural land use district. The land purchase by 1694 was conditional on development approval being granted by the County. 3 The Authority published notice of the approval in the local newspaper promptly thereafter on October 9, 2012 under s 24(2) of the County’s Land Use Bylaw No. 12-024 [“LUB”]. The Authority then issued the Development Permit to 1694 on October 16, 2012. But in so doing, the Authority neglected to provide written notice of the approval to adjacent landowner Patrick Leibel (“Leibel”) and to the other adjacent landowner as required by s 24(3) of the LUB within the time frame contemplated. No appeals were filed in response to the s 24(2) newspaper publication within the time provided for so doing. 4 Under s 26(1)(a) of the LUB, a development permit, once issued, “shall not be valid until the Development Permit conditions, except for those of a continuing nature, have been fulfilled and no notice of appeal has been served on the Subdivision and Development Appeal Board (“SDAB). Under s 26(1)(b) of the LUB, if such appeal is launched, “such permit shall not be valid until the decision of the Board is issued in writing”. 5 On October 31, 2012, 1694 removed the conditions for the sale of the land and, on January 3, 2013, began construction pursuant to the Devel- opment Permit starting with tree removal and road work. On January 15, 2013, the County Administration discovered that the s 24(3) requirement had not been complied with. All notice requirements must be done by the Authority. Section 24(1) provides for notice to the applicant developer, and s 24(2) provides for notice in the newspaper. Section 24(3) provides as follows: 24(3) In addition to SECTION 24(2), within five (5) working days of a decision on a Development Permit application approving a Permit- ted Use that proposes a variance to any of the regulations of this By- law or a Discretionary Use, the Development Authority shall send a notice, by regular mail, to landowners Adjacent to the Site subject to the Development Permit, based on Land Ownership information contained in the Lac La Biche County Assessment Roll. This notice shall provide Adjacent landowners with information on the decision, and outline their right of appeal. [emphasis added] 6 The entirety of s 24 is set out below. On February 14, 2013, the Au- thority attempted to remedy the situation of its failure to provide s 24(3) notice by then sending written notices to the two adjacent landowners 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 9

which included the respondent, Liebel. Leibel appealed the development permit approval by an extensive letter dated February 27, 2013 that set out many forms of objection. The Authority by letter dated March 5, 2013, issued a stop order to 1694 under s 645 of the MGA to discontinue the development. 7 After a hearing on March 25, 2013, the SDAB found that it had jurisdiction under the MGA to hear the appeal by Leibel despite the reliance of 1694 on the development permit. The SDAB agreed that the non-adjacent neighbours were outside the time limit to appeal. But it ruled that, having accepted that the Leibel appeal was within time and therefore was “valid”, it would hear submissions from the other local opponents to the development, saying those parties would nevertheless be “allowed to voice their issues as parties opposed to the development”. 8 In preparation for the hearing, 1694 had attempted to develop evidence that Leibel had de facto notice, constructive or otherwise, of the development. This was to make up for the notice defect under s 24(3) of the LUB even though 1694 was not responsible for the defect. 1694 was, however, unable to establish that fact of de facto notice, howsoever constructive. SDAB therefore proceeded on the basis that Leibel had not got- ten any notice of the development permit within s 24(3) of the LUB. 9 At the hearing, the SDAB referred to s 87 of the LUB that provides for specific regulations respecting campground development: Section 87 Campgrounds (1) In determining the appropriateness and suitability of a Site for a proposed Campground Development, the Development Authority shall consider such factors as accessibility, compatibility with Adja- cent land Uses, environmental sensitivity, physical suitability, and serviceability of the Site itself. (3) There shall be a minimum distance separation of 1,000 m (3,280 ft) between any tourist Campground facilities and the boundary of a multi-Lot Subdivision or a Confined Feeding Operation. 10 The SDAB also noted some interpretational difficulty arising from s 87(3) of the LUB which requires a “minimum distance separation of 1,000 m” between any such campground development and the “boundary of a multi-lot subdivision”. Poplar Point was found to be such a “multi- lot subdivision” although the LUB did not define that term. 11 The SDAB noted a number of “issues” raised by the Authority that had adjusted the earlier conditions imposed, notably by cutting the stalls 10 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

from 200 as planned by 1694 to 62 stalls, as a ‘phase 1’ for the development. 12 It is plain from the reasons of the SDAB that it was moved to accept many of the concerns raised not only by Leibel but by others who had not appealed within the time limit applicable to them. Counsel for 1694 argued that the various objections offered against the development had the effect of banning campground development altogether, despite it being a discretionary use, and that the sum and substance of the opposition was to amend the LUB by eliminating the possibility of such a development use. 13 By its reasons dated April 3, 2013, the SDAB had three essential reasons for its decision. First, it concluded that the 1,000 metre distance should not be calculated from the centre of the development, but between “closest property lines” and therefore the development could not conform with s 87(3) of the LUB. The SDAB added that it would not have granted a variance from that distance requirement had a variance been requested (which it had not), “as it would be incompatible with existing land uses in the neighboring area, and would materially interfere with and effect (sic) the use and enjoyment of neighboring parcels of land”. 14 Second, having regard to s 87(1) of the LUB, the road access was of particular concern. Issues of safety into and out of the campground on the available roads, the suitability of the road for the type and amount of traffic contemplated, and the amount of dust which would reasonably be expected from that traffic were all factors to be considered. 15 Third, the SDAB concluded that, prior to the permit decision, the development proposal did not conform with s 66(2) of the LUB concerning adequate fire protection and the preparation of a fire hazard assessment. Access to the location via the township road for emergency vehicles (as well as other large vehicles that might be expected to use it) were amongst the list of concerns raised by Leibel and others in the vicinity. SDAB therefore found the development permit should be revoked and upheld Leibel’s appeal.

III Grounds of Appeal and Standard of Review 16 Leave was granted on the following two questions with sub-elements as follows: 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 11

(a) What is the status of a development permit that is issued after a possible error or omission with respect to service of the permit on adjacent landowners, including (i) What is the legal effect of a notice of a permit given after the five day period for service required in the Land Use Bylaw? (ii) Once the development permit is issued, does the Subdivi- sion and Development Appeal Board have continuing jurisdiction to deal with any subsequent appeal of the permit? (iii) When does the development permit create an issue estoppel precluding any further attacks on its validity? (iv) Is the Applicant still able to challenge the validity of the notice of appeal, having regard to its participation in, and the position taken at the Subdivision and Development Ap- peal Board hearing? (b) Did the Subdivision and Development Appeal Board commit any error of law in its interpretation and application of s 87 of the Land Use Bylaw to this development permit? [1694192 Alberta Ltd. v. Lac La Biche (County) (Subdivision and Development Appeal Board), 2013 ABCA 272 (Alta. C.A.).] 17 Leave was not granted on another point concerning an alleged appearance of bias, arising notably because some members of the SDAB visited the site. 18 Section 688(1) of the MGA provides for a statutory appeal from the SDAB on questions of law or jurisdiction. This Court has held that to the extent that an extricable transcendent (i.e. beyond the parties’ interests) question of law or jurisdiction arises, review is for correctness: Cameron Corp. v. Edmonton (Subdivision and Development Appeal Board), 2012 ABCA 254 (Alta. C.A.) at paras 3-8. Nonetheless, “[s]ome deference is extended to questions of law if the expertise of the Board is engaged, and to the application of the law to particular sets of facts”: see Emeric Holdings Inc. v. Edmonton (City), 2009 ABCA 65 (Alta. C.A.) paras 8-9, 448 AR 31; Maduke v. Leduc (County) No. 25, 2010 ABCA 331 (Alta. C.A.) paras 5-6, 2010 CarswellAlta 2151 (Alta. C.A.); McCauley Community League v. Edmonton (City), 2012 ABCA 86 (Alta. C.A.) para 18, (2012), 522 A.R. 98 (Alta. C.A.); Cameron Corp. at para 6; Kiewit Energy Canada Corp. v. Edmonton (City) Subdivision and Development Appeal Board, 2013 ABCA 407 (Alta. C.A.) para 12, 12 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

(2013), 566 A.R. 90 (Alta. C.A.), leave denied [2014] S.C.C.A. No. 27 (S.C.C.). 19 The SDAB was not required to show deference to the Authority: Stewart v. Lac Ste. Anne (County) Subdivision & Development Appeal Board, 2006 ABCA 264 (Alta. C.A.) at paras 9-12, (2006), 397 A.R. 185 (Alta. C.A.). But, practically speaking, it would seem logical for the SDAB to pay at least some respectful attention to determinations involving technical expertise or factual awareness that the Authority might possess. As a result, it would not be an error of law for the SDAB to show some deference to the Authority on topics of that sort: compare Edmonton Police Service v. Furlong, 2013 ABCA 121 (Alta. C.A.) paras 15-24, (2013), 544 A.R. 191 (Alta. C.A.). 20 In our view, correctness applies to the various elements of the first ground of appeal, which can be restated generally to be a challenge to whether the SDAB had jurisdiction to proceed with the appeal, in light of the passage of the time and, more specifically, in light of the facial departure from imperative language in the LUB. As to the first question (a), we are satisfied that the conclusion of the SDAB that it had jurisdiction to entertain the appeal was correct, having regard to the specific wording of this LUB. We are not persuaded that any form of estoppel applies to this situation as against either the appellant or the SDAB. 21 As to the second question (b), we are satisfied that reasonableness is the correct standard of review. The standard of correctness only governs: (1) a constitutional issue; (2) a question of general law that is both of central importance to the legal system as a whole and outside the tribunal’s specialized area of expertise; (3) the drawing of jurisdictional lines between two or more competing specialized tribunals; and (4) a “true question of jurisdiction or vires”: see New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9 (S.C.C.) paras 58-61, [2008] 1 S.C.R. 190 (S.C.C.); Alliance Pipeline Ltd. v. Smith, 2011 SCC 7 (S.C.C.) para 26, [2011] 1 S.C.R. 160 (S.C.C.); Imperial Oil Ltd. v. Calgary (City), 2014 ABCA 231 (Alta. C.A.) para 33, (2014), 83 C.E.L.R. (3d) 181 (Alta. C.A.). A question that is by express dictate of the controlling statute one for which correctness would apply would arguably be another exception. As to this question, we are satisfied that the SDAB reached a reasonable conclusion. 22 To be clear, although we refer above to the first question as having elements that raise matters of SDAB jurisdiction, we are not venturing an opinion about the scope of what might raise “a true question of jurisdic- 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 13

tion or vires” in relation to the interpretation of a LUB — even its interpretation on a point of law. The questions here are not interpreted as simply being aimed at deciding if the SDAB erred in law but whether, as a matter of law of importance to the legal system (and not exclusively within the special expertise of the SDAB) it lacked legal capacity (jurisdiction) in doing what it did. For a true jurisdictional question, a single ‘rule of law’ answer in law is necessary. Accordingly, if we take at least some parts of that question as involving a true jurisdictional question, correctness is the standard of review, whether or not correctness might also be a proper standard of review on other matters. 23 Not every interpretation of a notice provision in an LUB will necessarily carry such weighty jurisdictional implications even if a question of law is involved. Nor for that matter will the use of legal language or the use of legal terms of art in an LUB raise such. One might compare Public Performance of Musical Works, Re, 2012 SCC 35 (S.C.C.) at para 16, [2012] 2 S.C.R. 283 (S.C.C.); British Columbia (Securities Commission) v. McLean, 2013 SCC 67 (S.C.C.) paras 21-22, [2013] 3 S.C.R. 895 (S.C.C.); M.A.H.C.P. v. Nor-Man Regional Health Authority Inc., 2011 SCC 59, [2011] 3 S.C.R. 616 (S.C.C.); Irving Pulp & Paper Ltd. v. CEP, Local 30, 2013 SCC 34, [2013] 2 S.C.R. 458 (S.C.C.). 24 But even if we are wrong in our interpretation of the matter that at least some elements of the stated question should be reviewed for correctness rather than reasonableness, the format of the questions in the context of this case leads to the conclusion that the range of reasonable answers comes down to one: see British Columbia (Securities Commission) v. McLean, 2013 SCC 67 (S.C.C.) at para 38, [2013] 3 S.C.R. 895 (S.C.C.) (“It will not always be the case that a particular provision permits multiple reasonable interpretations. Where the ordinary tools of statutory interpretation lead to a single reasonable interpretation and the administrative decision maker adopts a different interpretation, its interpretation will necessarily be unreasonable — no degree of deference can justify its acceptance; see, e.g. Dunsmuir, at para 75; Mowat, at para 34.”). 25 In the present instance, as to the second question, the resolution of matters of mixed fact and law (and mostly facts) having to do with “minimum distance separation” as well as having regard to factors such as “accessibility, compatibility with Adjacent land use, environmental sensitivity, physical suitability and serviceability of the Site itself” is not such as fits any of the exceptions thus mentioned: compare Carrier 14 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Sekani Tribal Council v. British Columbia (Utilities Commission), 2010 SCC 43 (S.C.C.) para 78, [2010] 2 S.C.R. 650 (S.C.C.). An extricable question of law fitting one of the exceptions to reasonableness review is not apparent. The presumption of reasonableness review is not rebutted.

IV Analysis 26 Section 640(2)(d) of the MGA provides that a land use bylaw “must provide for how and to whom notice of the issuance of a development permit is to be given”. Section 24 of the Lac La Biche Land Use Bylaw 12-024, sets out the notification process for development permits issued by the County [“LUB”]. Section 24 contains five subsections. Unfortu- nately, two of those subsections are numbered s 24(2) and s 24(3). They read: SECTION 24 NOTIFICATION OF DEVELOPMENT PERMITS (1) Within five (5) days of a decision on a Development Permit application, the Development Authority shall send a notice of the decision by regular mail, to the applicant, indicating the disposition of the application. (2) Within ten (10) working days of a decision on a Development Permit application for a Permitted Use that proposes a variance to any of the regulations of this Bylaw, or any Discretionary Use, the Development Authority shall publish a notice in a newspaper circu- lating in the County, indicating the legal description, municipal address, the nature of the approved Development, whether a variance has been issued, and the right of appeal. (3) In addition to SECTION 24 (2), within five (5) working days of a decision on a Development Permit application approving a Permitted Use that proposes a variance to any of the regulations of this Bylaw or a Discretionary Use, the Development Authority shall send a notice, by regular mail, to landowners Adjacent to the Site subject to the Development Permit, based on land Ownership Information contained in the Lac La Biche County Assessment Roll. This notice shall provide Adjacent landowners with information on the decision, and outline their right of appeal. SECTION 24 NOTIFICATION OF DEVELOPMENT PERMITS continued (2) A permit issued pursuant to this PART does not come into effect until fourteen (14) days after the date of issuance is first publicized as described in SECTION 24 (2). Any Development proceeded with by 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 15

the applicant prior to the expiry of this period is done solely at the risk of the applicant. (3) Any development near a Major or Secondary Highway requires notification to Alberta Transportation. Buffer zones are: a. within 300 meters of a Highway; b. within 800 meters of any Major Intersection. 27 Accordingly, s 24 appears to contemplate two different types of notices: publication in the local newspaper within 10 working days of a decision on a development permit and notice by regular mail within five working days to adjacent landowners. By the terms of the second s 24(2), however, development permits come into effect 14 days after publication of the notice in the newspaper as “described” in the first s 24(2), at the “risk of the applicant”. We were not pointed to any provision of the LUB or MGA dealing with the effect for non-compliance with the notice provision to adjacent landowners under s 24(3). Nor were we pointed to any jurisdiction on the part of the SDAB to extend the time set out in the LUB. 28 Appeals from the development permit appeal process are governed by s 686(1) of the MGA which states in part: 686(1) A development appeal to a subdivision and development appeal board is commenced by filing a notice of the appeal, containing reasons, with the board within 14 days, ... (b) in the case of an appeal made by a person referred to in section 685(2)[“any person affected by an order, decision or development permit”], after the date on which the notice of the issuance of the permit was given in accordance with the land use bylaw. 29 Section 25(4) of the LUB goes on to distinguish between the time limit for filing an appeal for applicants and that for all other persons “claiming to be affected”. It reads: SECTION 25 DEVELOPMENT PERMIT APPEAL PROCESS ... (4) An appeal to the Subdivision and Development Appeal Board is commenced by filing a notice of the appeal, containing the reasons for the appeal, to the Secretary of the Subdivision and Development Appeal Board within fourteen (14) days from the date of issuance, 16 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

(a) in the case of an appeal made by an applicant: (i) the date on which the person receives notice of the decision or order or the issuance of the Devel- opment Permit; or ... (b) in the case of an appeal by another person claiming to be affected, after the date on which the notice of the issuance of the Development Permit was published in accordance with SECTION 24(2). 30 Accordingly the MGA and the Land Use Bylaw establish an appeal period. Appeals must be filed, in the case of persons claiming to be affected, 14 days “after the date on which the notice of the issuance of the Development Permit was published in accordance with SECTION 24(2)”: s 25 (4) of the LUB. The respondent Leibel’s position creates the risk of a somewhat indefinite limitation period, because it would attach the 14 day period to the last point in time of the date fixed by operation of s 24(3) of the LUB. The respondent Leibel’s position would be stronger, of course, if s 25(4)(a)(i) of the LUB applied to it and if s 25(4)(b), which is structured as a form of alternative to s 25(4)(a)(i), did not. Venturing an interpretation of these provisions would trigger consideration of what is the difference between “the person” and “another person claiming to be affected”. Since an adjacent landowner would almost necessarily be “affected”, the language of these notice provisions of the LUB is indeed problematic. 31 The possibility of an indefinite appeal period is not a trivial matter. The language of s 24 of the LUB does not suggest an open-ended appeal period geared to actual subjective notice, even to adjacent landowners. This Court has emphasized that appeal periods cannot remain dormant, but potentially viable, until personal awareness as that would inject “in- calculable uncertainty into a planning process otherwise designed to achieve both certainty and finality”: Coventry Homes Inc. v. Beaumont (Town) Subdivision & Development Appeal Board, 2001 ABCA 49 (Alta. C.A.) para 32, (2001), 277 A.R. 278 (Alta. C.A.); see also Masellis v. Edmonton (City) Subdivision & Development Appeal Board, 2011 ABCA 157 (Alta. C.A.) paras 36-48, (2011), 505 A.R. 231 (Alta. C.A.). 32 Similarly, however, it does not appear to be logically consistent with the language of the LUB to conclude that the rights of an adjacent landowner to object to development could be swept aside without any notice to that person whatsoever, constructive or otherwise. As pointed out in 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 17

Bowen v. Edmonton (City) Council (1977), 3 A.R. 63, 75 D.L.R. (3d) 131 (Alta. C.A.) at para 14: A right to apply for leave to appeal from a decision is illusory if it can be lost before a party knows what the decision is and how he is affected by it. Such persons have equally with the “appellant” some right to know of the decision, and in the present case it is provided by the by-law itself: [notice by ordinary mail to interested persons] 33 This Court in Bowen also recognized at para 26 that “the computation of time for an application for leave cannot, for obvious reasons, be left with an indefinite commencement date”. The Court in Bowen, accordingly, looked at the form of constructive notice (ordinary mail) and characterized the limitation as 30 days from the time the written decision was rendered to that interested party, and wrote: 17 This provision is a necessary complement to s. 128(6)(b) of the Act if an intelligible operation is to be accorded to s. 146(2). It provides in mandatory terms a means of communication of the decision not only to the appellant in the proceedings before the board, but to other designated persons. It would indeed create a state of confusion and uncertainty, and would fail to give a homogeneous construction to the various sections of the Act dealing with appeals to a Develop- ment Appeal Board and to this Division, to find that the computation of time for the purposes of s. 146(2) commenced at any other time than that upon which the board had fully rendered its decision in accordance with the requirements in that respect which I have noted. 34 The source of the dilemma in this case is in the language of the LUB. 35 One side of the dilemma is the suggestion that the developer is entitled to rely on the permit after the expiry of the time limits discernible under the LUB and calculated as if the Authority had complied with the LUB notice provisions. That time limit would run even if an adjacent landowner gets no notice whatsoever constructively or otherwise of his right to appeal it to the SDAB despite the LUB. 36 The other side of the dilemma is the suggestion that this developer and any other developer affected by this LUB should have to linger in limbo until the Authority gives the mail notice provided for adjacent landowners under s 24(3), despite the imperative language of the LUB, an insistence quite understandable in the commercial development world. Addressing this dilemma in turn raises the question whether the language of the LUB can be read as an harmonious and workable whole. 18 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

37 The parties here emphasize different aspects of the LUB and MGA. 1694 contends that nothing in the LUB or MGA allowed the Authority to extend the time for notice to the adjacent landowner beyond the mandatory five day period - particularly retroactively. 1694 also says that the Authority was functus officio. The respondent says that the 1694’s position is inconsistent with s 686(1)(b) of the MGA, which provides that the appeal period ends 14 days “after the date on which the notice of the issuance of the permit was given in accordance with the land use bylaw”, which the respondent urges includes notice under s 24(3) to adjacent landowners, whenever that “undischarged statutory duty” is performed. 38 Statutory construction is engaged. 39 The core principle of statutory interpretation was encapsulated by Professor Driedger more famously in his 2nd Edition of Construction of Statutes [Toronto: Butterworth’s] in 1983, but it actually dates back to his first edition in 1974 where at page 67 he wrote: Today there is only one principle or approach, namely the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. 40 Consistent with Driedger’s core principle, it is foundational that legislation should be read “to harmonize the components of legislation inas- much as is possible, in order to minimize internal inconsistency”: Willick v. Willick, [1994] 3 S.C.R. 670 (S.C.C.) at para 24. That is part of the problem here. It is also a well-established principle of statutory interpretation that a legislature does not intend absurd consequences such as consequences that are incompatible with the object of a statute: Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27 (S.C.C.), at 43: Coventry Homes at para 33. 41 Put another way in R. v. W. (C.K.), 2005 ABCA 446 (Alta. C.A.) at para 40, (2005), 204 C.C.C. (3d) 380 (Alta. C.A.): “The very first rule of statutory interpretation is to read the statute as a whole, and try to make all its parts fit and work together: Cˆot´e, Interpretation of Legislation in Canada, 308-11 (3d ed 2000); Driedger, Construction of Statutes, 89-92 (2d ed. 1983).” See also Sullivan on the Construction of Statutes, 5th ed (Markham, Ont: LexisNexis, 2008). 42 Lord Wensleydale in Grey v. Pearson (1857), 10 E.R. 1216 (U.K. H.L.) wrote at p 1234 about reading a specific part of an enactment: [T]he grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity or some repugnance or 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 19

some inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity and inconsistency, but no further. 43 This Court has recognized that, to balance the right of a developer to proceed with a development once approved with the right of affected persons to contest the approved development, a party seeking to appeal has a “limited window in which to contest it”. That window of opportunity starts to run when the affected party has actual or constructive notice of the issuance of the development permit: Coventry Homes at para 29; Masellis v. Edmonton (City) Subdivision & Development Appeal Board, 2011 ABCA 157, 505 A.R. 231 (Alta. C.A.) at para 39. 44 The respondent forcefully argues that counsel for 1694 conceded before the SDAB, and the SDAB reasonably found, that there had been no actual or constructive notice to the respondent before February 14, 2013, at which time he received the County’s letter. For this reason, the respondent argues that he was entitled to appeal on getting that notice. This argument sets to one side the question whether the newspaper notice should have been treated as a form of de facto albeit constructive notice to Leibel. As attractive as the point may be, this Court is not in a position to re-try that question. In any event, were posting in the local newspaper, by itself and automatically, regarded as proof a form of constructive notice sufficient to substitute for s 24(3), then s 24(3) would cease to have any significant purpose. It might be that in a given case, such posting, coupled with evidence that the adjacent landowner should have learned of the development permit, would meet the test in Bowen and Coventry Homes. But on the record before the SDAB, that was not the case. 45 The tautology rule of construction is not hospitable to the idea that compliance with s 24(2) should obviate any need to comply with s 24(3) especially when the framers of the LUB clearly targeted two different categories of persons. Framers do not include words for nothing: see Alberta (Minister of Education) v. Canadian Copyright Licensing Agency, 2012 SCC 37 (S.C.C.) at para [47], [2012] 2 S.C.R. 345 (S.C.C.); Berardinelli v. Ontario Housing Corp. (1978), [1979] 1 S.C.R. 275 (S.C.C.), at 283, (1978), 90 D.L.R. (3d) 481 (S.C.C.); 321665 Alberta Ltd. v. Mobil Oil Canada Ltd., 2013 ABCA 221 (Alta. C.A.) para.24, (2013), 82 Alta. L.R. (5th) 124 (Alta. C.A.), leave denied, [2013] S.C.C.A. No. 341 (S.C.C.). Furthermore, as was said in Reference re Broadcasting Act, S.C. 1991 (Canada), 2012 SCC 68 (S.C.C.) para 43, [2012] 3 S.C.R. 489 (S.C.C.): “Absurdity also refers to situations 20 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

where the practical effect of one piece of legislation would be to frustrate the purpose of the other (L´evis, at para 54; Sullivan, at p. 330).” Rather than set certainty off against notice, the effort must be to reconcile the language of the LUB. 46 There is considerable force in 1694’s argument that the Authority has no jurisdiction to extend or alter the LUB and the time limitations therein. But that is not what has happened. What the Authority did was to give the notice under s 24(3) of the LUB beyond the five day period specified in the LUB. In so doing, the Authority, arguably, did not act “in accordance” with the LUB, and in particular breached a requirement of the LUB worded in mandatory (imperative) language binding upon itself, and not upon either the adjacent neighbour or the developer. And neither the developer nor the adjacent landowner was responsible for that breach. 47 The first two of the stated questions, viz. questions (a)(i) and (a)(ii), therefore, are whether the Authority giving that notice to the adjacent landowner belatedly was void or a nullity, as argued by 1694, and that it had no legal effect such as to trigger an ability of the adjacent landowner to appeal as also argued by 1694. 48 The proposed answers by 1694 to the first two elements of the first question on which leave was granted were as succinctly expressed at the hearing of the appeal as follows: (i) What is the legal effect of a notice of a permit given after the five day period for service required in the Land Use Bylaw? Answer: “Zero.” The appellant submits that the notice had no juridical significance and could not open the door to a valid appeal by Leibel. (ii) Once the development permit is issued, does the Subdivision and Development Appeal Board have continuing jurisdiction to deal with any subsequent appeal of the permit? Answer: “No.” The appellant submits that the Authority had no jurisdiction and was functus officio when it purported to give that notice under s 24(3) of the LUB. 49 This raises the recurring issue of the legal significance of a failure of an officer or tribunal of the state to comply with a mandatory provision of an enactment. The Supreme Court of Canada did not find that issue to arise in A.T.A. v. Alberta (Information & Privacy Commissioner), 2011 SCC 61 (S.C.C.) paras 73-76, [2011] 3 S.C.R. 654 (S.C.C.). This Court, at 2010 ABCA 26 (Alta. C.A.), had opined that the implications of a 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 21

breach of a mandatory provision by a state agency did arise. This Court ventured an approach intended to resolve those implications in a princi- pled manner different from measuring the Chancellor’s foot. The Su- preme Court in A.T.A. adverted to the problem of consequences flowing from such breaches. Without rehearsing this Court’s discussion in A.T.A., a key point in the judgment of this Court was that a breach of a mandatory provision of an enactment should not nullify everything that hinges on it, regardless of curability and/or prejudice. 50 The answer to the “legal effect” question above in this specific case must be consistent with the object of the notice provisions of the LUB. It should conform to policy indicated by the evident intent of not merely the framers of the LUB but also indicated by the various references in the MGA to giving notice to adjacent landowners. On the premise that the notice given of a development permit albeit well past the five day limit in the LUB was the first and only notice given to the adjacent landowner Leibel (thus said to have started the clock to run as regards his right of appeal), Leibel’s rights were not stymied or cancelled merely because the Authority breached the limitation period imposed on it to give such notice. 51 In the large majority of situations, it should be that a landowner or developer can satisfy the SDAB that the adjacent landowner had de facto notice functionally equivalent to that required by s 24(3) of the LUB. If so - this being a factual matter duly inquired into by counsel for 1694 for the purposes of the hearing before the SDAB here - the situation could be quite different from what faces the Court presently. For example, commencement of the work in a manner visible to or likely to come to the attention of, the adjacent landowner, as in Masellis, arguably might constitute such de facto notice. The effect of that notice could then be considered in light of the framework and policies of the LUB and MGA, notably the need for certainty and finality. 52 To find that the written notice subsequently given by the Authority to the respondent Leibel was, in this case, legally able to furnish Leibel with an ability to appeal under the LUB would be a balanced interpretation of the ambiguities of this LUB which could reconcile the right of Leibel, the adjacent landowner to notice under the LUB and MGA with the right of the developer, originating outside of the LUB itself but regu- lated through it, to acquire a parcel and then to develop his property. As said, the effort of the Court must be to try to reconcile the different interests and objectives reflected in the difficult wording of s 24 of the LUB: 22 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

see also Canada Trustco Mortgage Co. v. R., 2005 SCC 54 (S.C.C.) para 10, [2005] 2 S.C.R. 601 (S.C.C.). 53 Unless and until the problems arising from the existing wording of this LUB are adequately addressed, developers might consider taking additional steps to protect and re-assure their interests before commencing work. 54 It should also be self-evident that this case specific ruling should be no comfort to an Authority for default of its obligations under an LUB. Municipalities with similar language in their LUB could consider clarifi- cation of that language, albeit consistently with the MGA: see s 13 of MGA; Tymchak v. Edmonton (Subdivision & Development Appeal Board), 2012 ABCA 22 (Alta. C.A.) para 21, (2012), 519 A.R. 295 (Alta. C.A.). 55 It is appropriate for completeness to work further through the questions stated in the leave grant. The third element of the first question is as follows: “When does the development permit create an issue estoppel precluding any further attacks on its validity?” This question does not need to be answered in any elaborate manner, because it is plain that on the facts here, the honest reliance of the developer upon the development permit cannot operate as an estoppel against Leibel, who made no representation or agreement to 1694 concerning the development or the permit. 56 Finally, as regards the fourth element of the first stated question, this comes down to the respondent’s objection to 1694 raising the jurisdictional argument for the first time on appeal after conceding jurisdiction before the SDAB or by not seeking judicial review of the stop order made by the Authority. Jurisdiction of the Court cannot be conferred or denied by consent: Young Estate v. TransAlta Utilities Corp., 1997 ABCA 349 (Alta. C.A.) para 43, (1997), 209 A.R. 89 (Alta. C.A.). 1694 was entitled to assert that that the Authority lacked jurisdiction to give the triggering notice under s 24(3) of the LUB after more than five days. Any concession at the SDAB level that the appellant could not satisfy the SDAB that Leibel got any notice, constructive or otherwise, did not obviate that right of appeal. 57 As for the second question on which leave was granted, namely the interpretation of s 87 of the LUB, these aspects of the decision of the SDAB are reviewed for reasonableness as noted above. The standard of reasonableness in the context of a by-law requires that the outcome fall within a reasonable range of legally acceptable alternatives in light of the 1694192 Alberta Ltd. v. Lac La Biche (County) Per curiam 23

legislative scheme and contextual factors relevant to the exercise of the power under the by-law: see Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5 (S.C.C.). There is ordinarily margin of appreciation involved where the question is the application of the by-law to a set of facts. In our view, it was reasonable for the SDAB to find that the development permit was not consistent with the language in s 87 and for that matter s 66 of the LUB.

V Conclusion 58 In the result, although recognizing the misfortune that befell the appellant 1694, the Court concludes that the appeal must be dismissed. Appeal dismissed. 24 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

[Indexed as: Jono Developments Ltd. v. North End Community Health Assn.] Jono Developments Ltd., Appellant v. The North End Community Health Association, The Richard Preston Centre for Excellence Society, and The Micmac Native Friendship Society and Halifax Regional Municipality, Respondents Nova Scotia Court of Appeal Docket: C.A. 415197 2014 NSCA 92 MacDonald C.J.N.S., Farrar, Bryson JJ.A. Heard: May 14, 2014 Judgment: October 9, 2014 Municipal law –––– Municipal contracts — Tenders — Sale of municipal property –––– Dispute arose over sale of surplus school property by regional municipality (“HRM”) to J Ltd. — Community groups sought judicial review of HRM’s decision to sell property to J Ltd. — Community groups alleged that HRM breached duty of fairness owed to them by not following HRM procedures for disposal of surplus schools, and that HRM breached its charter by selling property below market value — Reviewing judge accepted these arguments and quashed HRM’s decision approving sale — J Ltd. appealed — Appeal allowed; order set aside — HRM owed duty of fairness to community groups — As to content of duty of fairness, reviewing judge presented positions of parties for various factors, but did not conduct his own analysis or indicate where on spectrum he believed duty fell — This failure led him to conclude that duty of fairness could only be satisfied by adherence to procedure for disposal of surplus schools — His approach and ultimate conclusion on scope of duty of fairness were incorrect — Significant degree of fairness was owed to community groups, which included participation in disposal process — Duty amounted to opportunity to advance proposal and to have it considered by HRM on criteria other than simply price offered for property — Deviations from procedure in request for proposals process were not substantial enough to constitute breach of procedural fairness duty on ground of legitimate expectations — Process, as followed, afforded sufficient procedural rights to satisfy duty owed to community groups — Process was consistent and predictable, request for proposals was advertised, and community groups were afforded participatory rights in substantial way and their proposals were considered on more than just financial basis — Trial judge failed to properly apply standard of review with respect to determining that HRM’s interpretation of “market value” was unreasonable — There was Jono Developments v. North End Community Health 25

difficulty in following logic of reviewing judge’s reasons for concluding market value of property was $4 million — J Ltd. was not willing buyer at $4 million, as there was not competing bid of at least $3,925,000 — That condition not being met, J Ltd.’s bid of $3 million was evidence of what willing buyer would pay for property — Reviewing judge’s failure to properly consider HRM’s rationale for selling to J Ltd. for $3 million price and his reliance on conditional bid in determining market price was error. Municipal law –––– Municipal liability — Practice and procedure — Ac- tions — Costs — Miscellaneous –––– Dispute arose over sale of surplus school property by regional municipality (“HRM”) to J Ltd. — Community groups sought judicial review of HRM’s decision to sell property to J Ltd. — Commu- nity groups alleged that HRM breached duty of fairness owed to them by not following HRM procedures for disposal of surplus schools, and that HRM breached its charter by selling property below market value — Reviewing judge accepted these arguments and quashed HRM’s decision approving sale — Re- viewing judge awarded costs to community groups in amount of $30,125.77, with J Ltd. paying 25% and HRM paying 75% — J Ltd. appealed — Appeal allowed; order set aside — Deviations from procedure in request for proposals process were not substantial enough to constitute breach of procedural fairness duty on ground of legitimate expectations — Process, as followed, afforded sufficient procedural rights to satisfy duty owed to community groups — Trial judge failed to properly apply standard of review with respect to determining that HRM’s interpretation of “market value” was unreasonable — Any costs paid by J Ltd. and HRM to community groups were to be returned — J Ltd. was entitled to costs in amount of $15,000 in proceedings below plus disbursements, payable equally by respondents — HRM was not entitled to any costs in proceedings below — J Ltd. was entitled to costs of $6,000 plus disbursements on this appeal — HRM was not entitled to costs on this appeal. Administrative law –––– Requirements of natural justice — Right to hearing — Duty of fairness –––– Dispute arose over sale of surplus school property by regional municipality (“HRM”) to J Ltd. — Community groups sought judicial review of HRM’s decision to sell property to J Ltd. — Community groups alleged that HRM breached duty of fairness owed to them by not following HRM procedures for disposal of surplus schools, and that HRM breached its charter by selling property below market value — Reviewing judge accepted these arguments and quashed HRM’s decision approving sale — J Ltd. appealed — Appeal allowed; order set aside — HRM owed duty of fairness to community groups — As to content of duty of fairness, reviewing judge presented positions of parties for various factors, but did not conduct his own analysis or indicate where on spectrum he believed duty fell — This failure led him to conclude that duty of fairness could only be satisfied by adherence to procedure for disposal of surplus schools — His approach and ultimate conclusion on 26 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th) scope of duty of fairness were incorrect — Significant degree of fairness was owed to community groups, which included participation in disposal process — Duty amounted to opportunity to advance proposal and to have it considered by HRM on criteria other than simply price offered for property — “Nature of decision and process followed” factor attracted moderate duty of fairness — As to “nature of statutory scheme”, enactment of procedure evidenced HRM’s intention to provide community groups with significant duty of fairness — “Impor- tance of decision” factor attracted moderate level of fairness — Procedure gave rise to “legitimate expectations” on part of parties but was not determinative of duty of fairness required in this case — Legitimate expectations was just one factor to be considered in formulation of duty of fairness — Factor of “decision- maker’s own choice of procedures” pointed to moderate degree of fairness — Deviations from procedure in request for proposals process were not substantial enough to constitute breach of procedural fairness duty on ground of legitimate expectations — Process, as followed, afforded sufficient procedural rights to satisfy duty owed to community groups — Process was consistent and predictable, request for proposals was advertised, and community groups were afforded participatory rights in substantial way and their proposals were considered on more than just financial basis. A dispute arose over the sale of surplus school property by the regional municipality (“HRM”) to J Ltd. Several community groups sought judicial review of HRM’s decision to sell the property to J Ltd. They alleged that HRM breached the duty of fairness owed to them by not following HRM procedures for the disposal of surplus schools, and that HRM breached its charter by selling the property below market value. The reviewing judge accepted these arguments and quashed HRM’s decision approving the sale. The reviewing judge awarded costs to the community groups in the amount of $30,125.77, with J Ltd. paying 25% and HRM paying 75%. J Ltd. appealed. Held: The appeal was allowed and the order set aside. Per Farrar J.A. (Bryson J.A. concurring): HRM owed a duty of fairness to the community groups. The decision to sell the surplus school was a decision related to a particular situation and was not so close to the legislative end of the spectrum to preclude a duty of fairness. The decision to dispose of the school affected the rights or interests of the community groups sufficiently to fulfill the test articulated in case law. As to the content of the duty of fairness, the reviewing judge presented the positions of the parties for the various factors, but did not conduct his own analysis or indicate where on the spectrum he believed the duty fell. This failure led him to conclude that the duty of fairness could only be satisfied by adherence to the procedure for the disposal of surplus schools. His approach and ultimate conclusion on the scope of the duty of fairness were incorrect. A significant degree of fairness was owed to the community groups, which included participation in the Jono Developments v. North End Community Health 27 disposal process. The duty amounted to an opportunity to advance a proposal and to have it considered by HRM on criteria other than simply the price offered for the property. The “nature of the decision and the process followed” factor attracted a moderate duty of fairness. As to the “nature of the statutory scheme”, the enactment of the procedure evidenced HRM’s intention to provide the community groups with a significant duty of fairness. The “importance of decision” factor attracted a moderate level of fairness. The procedure gave rise to “legitimate expectations” on the part of the parties but was not determinative of the duty of fairness required in this case. Legitimate expectations was just one factor to be considered in the formulation of the duty of fairness. The factor of the “decision-maker’s own choice of procedures” pointed to a moderate degree of fairness. Deviations from the procedure in the request for proposals process were not substantial enough to constitute a breach of the procedural fairness duty on the ground of legitimate expectations. The process, as followed, afforded sufficient procedural rights to satisfy the duty owed to the community groups. The process was consistent and predictable, the request for proposals was advertised, and the community groups were afforded participatory rights in a substantial way and their proposals were considered on more than just a financial basis. The trial judge failed to properly apply the standard of review with respect to determining that HRM’s interpretation of “market value” was unreasonable. There was difficulty in following the logic of the reviewing judge’s reasons for concluding the market value of the property was $4 million. J Ltd. was not a willing buyer at $4 million, as there was not a competing bid of at least $3,925,000. That condition not being met, J Ltd.’s bid of $3 million was evidence of what a willing buyer would pay for the property. The reviewing judge’s reasons did not reveal any deference to HRM’s determination of market price. The reviewing judge in effect limited the “reasonable range” of market value to bids that were equal or higher than the highest bid submitted in the process. HRM’s decision to sell to J Ltd. “as is” was justified and supported by the record. The reviewing judge appeared to ignore the very logical conclusion put forward in a staff report recommending the sale at $3 million. The reviewing judge’s failure to properly consider HRM’s rationale for selling to J Ltd. for the $3 million price and his reliance on the conditional bid in determining market price was an error. Any costs paid by J Ltd. and HRM to the community groups were to be returned. J Ltd. was entitled to costs in the amount of $15,000 in the proceedings below plus disbursements, payable equally by the respondents. HRM was not entitled to any costs in the proceedings below. J Ltd. was entitled to costs of $6,000 plus disbursements on this appeal. HRM was not entitled to costs on this appeal. 28 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Per MacDonald C.J.N.S (dissenting): The appeal should be dismissed. There was a disagreement with the majority’s ultimate conclusion that HRM met its duty of fairness to the community groups. It was not accepted that the reviewing judge did not conduct his own analysis of the applicable factors or indicate where on the spectrum he believed the duty fell. The reviewing judge was abundantly aware of his obligation to consider the factors in question. For him, HRM’s failure to follow its policy was an overriding factor that, on its own, resulted in a breach of its duty of fairness. HRM did not meet its duty of fairness. The impugned process left the community groups little, if any, hope. Non-profit groups were at a major disadvantage with respect to almost half of the available points in the evaluation material. The flawed process left non-profit groups with no realistic chance of success. Concerning the factors applicable to duty of fairness, it was agreed that legitimate expectations was but one factor to be considered. However, it was an important one, where the respondents had a right to expect meaningful participation. A heightened degree of fairness should be attached to this category. More was required than an ability to participate and to be judged on criteria other than simply price. The community groups were denied a right to meaningful participation in the process and to not have a score card stacked against them. Cases considered by Farrar J.A.: Agraira v. Canada (Minister of Public Safety and Emergency Preparedness) (2013), 360 D.L.R. (4th) 411, 2013 CarswellNat 1983, 2013 CarswellNat 1984, 2013 SCC 36, 52 Admin. L.R. (5th) 183, 16 Imm. L.R. (4th) 173, [2013] 2 S.C.R. 559, 446 N.R. 65, [2013] S.C.J. No. 36 (S.C.C.) — followed Apotex Inc. v. Canada (Attorney General) (2000), 188 D.L.R. (4th) 145, 255 N.R. 319, 24 Admin. L.R. (3d) 279, 6 C.P.R. (4th) 165, 2000 CarswellNat 889, [2000] 4 F.C. 264, 180 F.T.R. 278, 2000 CarswellNat 3266, [2000] F.C.J. No. 634 (Fed. C.A.) — considered Attaran v. University of British Columbia (1998), 1998 CarswellBC 92, 4 Ad- min. L.R. (3d) 44, [1998] B.C.J. No. 115 (B.C. S.C. [In Chambers]) — considered Baker v. Canada (Minister of Citizenship & Immigration) (1999), 1 Imm. L.R. (3d) 1, [1999] 2 S.C.R. 817, 14 Admin. L.R. (3d) 173, 174 D.L.R. (4th) 193, 1999 CarswellNat 1124, 1999 CarswellNat 1125, 243 N.R. 22, [1999] S.C.J. No. 39 (S.C.C.) — followed Bendahmane v. Canada (Minister of Employment & Immigration) (1989), [1989] 3 F.C. 16, 26 F.T.R. 122 (note), 61 D.L.R. (4th) 313, 95 N.R. 385, 1989 CarswellNat 45, 8 Imm. L.R. (2d) 20, 39 Admin. L.R. 1, 1989 Car- swellNat 630 (Fed. C.A.) — referred to Bowater Mersey Paper Co. v. C.E.P., Local 141 (2010), 2010 C.L.L.C. 220-022, (sub nom. Bowater Mersey Paper Co. v. Communications, Energy & Paperworkers Union of Canada, Local 141) 289 N.S.R. (2d) 351, (sub nom. Jono Developments v. North End Community Health 29

Bowater Mersey Paper Co. v. Communications, Energy & Paperworkers Union of Canada, Local 141) 916 A.P.R. 351, (sub nom. CEPU, Local 141 v. Bowater Mersey Paper Co.) 2010 C.C.L.C. 220-022, 2010 CarswellNS 152, 2010 NSCA 19, 3 Admin. L.R. (5th) 261, 192 L.A.C. (4th) 193 (N.S. C.A.) — referred to Campbell v. Saskatchewan (Workers’ Compensation Board) (2012), 2012 Car- swellSask 348, 2012 SKCA 56, 35 Admin. L.R. (5th) 305, [2012] 8 W.W.R. 1, 393 Sask. R. 246, [2012] S.J. No. 318 (Sask. C.A.) — considered Centre hospitalier Mont-Sina¨ı c. Québec (Ministre de la Santé & des Services sociaux) (2001), (sub nom. Mount Sinai Hospital Center v. Quebec (Minister of Health & Social Services)) 200 D.L.R. (4th) 193, (sub nom. Mount Sinai Hospital Centre v. Quebec (Minister of Health & Social Services)) 271 N.R. 104, 2001 SCC 41, 2001 CarswellQue 1272, 2001 CarswellQue 1273, 36 Admin. L.R. (3d) 71, (sub nom. Mount Sinai Hospital Center v. Quebec (Minister of Health & Social Services)) [2001] 2 S.C.R. 281, 2001 CSC 41, [2001] S.C.J. No. 43, REJB 2001-24843 (S.C.C.) — considered Congrégation des Témoins de Jéhovah de St-Jérôme-Lafontaine c. Lafontaine (Municipalité) (2004), (sub nom. Congrégation des témoins de Jéhovah de St-Jérôme-Lafontaine v. Lafontaine (Village)) 241 D.L.R. (4th) 83, 323 N.R. 1, 2004 SCC 48, 2004 CarswellQue 1545, 2004 CarswellQue 1546, 49 M.P.L.R. (3d) 157, (sub nom. Congrégation des témoins de Jéhovah de St- Jérôme-Lafontaine v. Lafontaine (Village)) [2004] 2 S.C.R. 650, 2004 CSC 48, 17 Admin. L.R. (4th) 165, 121 C.R.R. (2d) 261, [2004] S.C.J. No. 45, REJB 2004-66514 (S.C.C.) — followed Fisher Park Residents Assn. Ltd. v. Ottawa (City) Board of Education (1986), 33 D.L.R. (4th) 411, 57 O.R. (2d) 468, 1986 CarswellOnt 1114 (Ont. H.C.) — followed G. (T.) v. Nova Scotia (Minister of Community Services) (2012), 316 N.S.R. (2d) 202, 2012 CarswellNS 282, 2012 NSCA 43, 18 R.F.L. (7th) 54, [2012] N.S.J. No. 215 (N.S. C.A.) — referred to G. (T.) v. Nova Scotia (Minister of Community Services) (2012), 2012 Car- swellNS 413, [2012] S.C.C.A. No. 237, [2012] C.S.C.R. No. 237 (S.C.C.) — referred to Gillingham v. Corner Brook / Deer Lake / St. Barbe School Board District No. 3 (1998), 1998 CarswellNfld 190, (sub nom. Gillingham v. Corner Brook/Deer Lake/St. Barbe School District No. 3) 55 C.R.R. (2d) 146, 169 Nfld. & P.E.I.R. 1, 521 A.P.R. 1, [1998] N.J. No. 212 (Nfld. T.D.) — considered Hong Kong (Attorney General) v. Ng (1983), [1983] 2 All E.R. 346, [1983] 2 A.C. 629 (Hong Kong P.C.) — followed Kelly v. Nova Scotia Police Commission (2006), 43 Admin. L.R. (4th) 260, 241 N.S.R. (2d) 300, 767 A.P.R. 300, 2006 NSCA 27, 2006 CarswellNS 83, [2006] N.S.J. No. 78 (N.S. C.A.) — considered 30 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

M. (N.N.) v. Nova Scotia (Minister of Community Services) (2008), 2008 NSCA 69, 57 R.F.L. (6th) 1, 268 N.S.R. (2d) 109, 857 A.P.R. 109, 2008 Car- swellNS 398, 295 D.L.R. (4th) 193, [2008] N.S.J. No. 323 (N.S. C.A.) — referred to Mavi v. Canada (Attorney General) (2011), 2011 CarswellOnt 4429, 2011 Cars- wellOnt 4430, 2011 SCC 30, 332 D.L.R. (4th) 577, 417 N.R. 126, 97 Imm. L.R. (3d) 173, (sub nom. Canada (Attorney General) v. Mavi) [2011] 2 S.C.R. 504, 108 O.R. (3d) 240 (note), 19 Admin. L.R. (5th) 1, 279 O.A.C. 63, 108 O.R. (3d) 240, [2011] S.C.J. No. 30 (S.C.C.) — followed Mega International Commercial Bank (Canada) v. Canada (Attorney General) (2012), 2012 FC 407, 2012 CarswellNat 1550, 2012 CF 407, 2012 Car- swellNat 5127, 407 F.T.R. 232 (Eng.) (F.C.) — followed Mercier-Néron v. Canada (Minister of National Health & Welfare) (1995), (sub nom. Mercier-Néron v. Canada (Ministre de la Santé nationale & du bien- etreˆ social)) 98 F.T.R. 36, 1995 CarswellNat 1884, [1995] F.C.J. No. 1024 (Fed. T.D.) — referred to Nanaimo (City) v. Rascal Trucking Ltd. (2000), 20 Admin. L.R. (3d) 1, 183 D.L.R. (4th) 1, 2000 CarswellBC 392, 2000 CarswellBC 393, 2000 SCC 13, 251 N.R. 42, 2000 CSC 13, 132 B.C.A.C. 298, 215 W.A.C. 298, [2000] 1 S.C.R. 342, [2000] 6 W.W.R. 403, 76 B.C.L.R. (3d) 201, 9 M.P.L.R. (3d) 1, [2000] S.C.J. No. 14 (S.C.C.) — followed North End Community Health Assn. v. Halifax (Regional Municipality) (2012), 2012 CarswellNS 179, 994 A.P.R. 1, 314 N.S.R. (2d) 1, 2012 NSSC 92, [2012] N.S.J. No. 118 (N.S. S.C.) — followed North End Community Health Assn. v. Halifax (Regional Municipality) (2012), 2012 NSSC 330, 2012 CarswellNS 679, 1018 A.P.R. 162, 321 N.S.R. (2d) 162, 2 M.P.L.R. (5th) 297, [2012] N.S.J. No. 508 (N.S. S.C.) — referred to Old St. Boniface Residents Assn. Inc. v. Winnipeg (City) (1990), 2 M.P.L.R. (2d) 217, [1991] 2 W.W.R. 145, 75 D.L.R. (4th) 385, 116 N.R. 46, 69 Man. R. (2d) 134, [1990] 3 S.C.R. 1170, 1990 CarswellMan 383, 46 Admin. L.R. 161, 1990 CarswellMan 235, EYB 1990-67192, [1990] S.C.J. No. 137 (S.C.C.) — followed Potter v. Halifax Regional School Board (2002), 2002 NSCA 88, 2002 Car- swellNS 264, (sub nom. Potter v. Board of Education of Halifax Region) 206 N.S.R. (2d) 18, (sub nom. Potter v. Board of Education of Halifax Re- gion) 645 A.P.R. 18, 215 D.L.R. (4th) 441, [2002] N.S.J. No. 297 (N.S. C.A.) — considered Qi v. Canada (Minister of Citizenship & Immigration) (1995), 33 Imm. L.R. (2d) 57, 1995 CarswellNat 1552, [1995] F.C.J. No. 1615 (Fed. T.D.) — referred to R. v. North & East Devon Health Authority (1999), [1999] Lloyd’s Rep. 306, [2001] Q.B. 213, (sub nom. Coughlan, Ex parte) [2000] 3 All E.R. 850 (Eng. C.A.) — referred to Jono Developments v. North End Community Health 31

Schmidt v. Secretary of State for Home Affairs (1969), [1969] 1 All E.R. 904, [1969] 2 Ch. 149 (Eng. C.A.) — considered Wile v. Barkhouse (2011), 2011 NSCA 50, 2011 CarswellNS 356 (N.S. C.A.) — considered

Cases considered by MacDonald C.J.N.S. (dissenting): Baker v. Canada (Minister of Citizenship & Immigration) (1999), 1 Imm. L.R. (3d) 1, [1999] 2 S.C.R. 817, 14 Admin. L.R. (3d) 173, 174 D.L.R. (4th) 193, 1999 CarswellNat 1124, 1999 CarswellNat 1125, 243 N.R. 22, [1999] S.C.J. No. 39 (S.C.C.) — referred to in a minority or dissenting opinion Statutes considered: Halifax Regional Municipality Charter, S.N.S. 2008, c. 39 Generally — referred to s. 58 — considered s. 58(1) — considered s. 58(2) — considered s. 58(3) — considered s. 58(4) — considered s. 59 — considered s. 61(5) — considered s. 61(5)(b) — considered s. 63 — considered s. 63(1) — considered Municipal Government Act, S.N.S. 1998, c. 18 Generally — referred to Rules considered: Civil Procedure Rules, 2009, N.S. Civ. Pro. Rules Generally — referred to R. 77 — considered Words and phrases considered: legitimate expectations doctrine [Per Farrar J.A. (Bryson J.A. concurring):] The legitimate expectations doctrine originated in England as a threshold mechanism for establishing entitlement to procedural fairness. In Schmidt v. Secretary of State for Home Affairs, [1969] 2 Ch. 149 (Eng. C.A.), Lord Denning held that an administrative decision-maker may be obligated to afford a person the opportunity to make representations, provided “he has some right or interest, or, I would add, some legitimate expectation, of which it would not be fair to deprive him without hearing what he has to say” (p.170). In time, the doctrine also served to define the content of the fairness duty in cases where, by representation or past practice, decision-makers 32 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

had led those affected to expect specific procedural safeguards, as in Hong Kong (Attorney General) v. Ng, [1983] 2 A.C. 629 (Hong Kong P.C.). See also D. Wright, “Rethinking the Doctrine of Legitimate Expectations in Canadian Ad- ministrative Law” (1997), 35 Osgoode Hall L.J. 139...... While the doctrine has expanded in recent years under English law, where it may operate to secure substantive relief (see R. v. North & East Devon Health Authority (1999), [2001] Q.B. 213 (Eng. C.A.)), its function in Canadian law has remained a part of the procedural fairness duty...... The legitimate expectations doctrine exists to ensure governmental actions in dealing with the public are fair, predictable and not arbitrary. It is important to keep this rationale in mind when determining, not only whether there are legitimate expectations, but whether those expectations have been fulfilled.

APPEAL by purchaser of surplus school land from judgment quashing, on judicial review, decision of regional municipality to approve sale.

William L. Ryan, Q.C., Maggie Stewart, for Appellant Ronald A. Pink, Q.C., David Wallbridge, Kelly McMillan, for Respondents, The North End Community Health Association, The Richard Preston Centre, for Excellence Society and the Micmac Native Friendship Society Martin C. Ward, Q.C., for Respondent, Halifax Regional Municipality

Farrar J.A.: Introduction 1 This appeal concerns the sale of a surplus school property, St. Pat- rick’s Alexandra Elementary School (the Property) by the respondent Halifax Regional Municipality (HRM) to the appellant Jono Develop- ments Limited (Jono). 2 The other respondents, the North End Community Health Associa- tion, the Richard Preston Centre for Excellence Society, and the Micmac Native Friendship Society (the Community Groups), sought judicial review of HRM’s decision to sell the Property to the appellant. They alleged that HRM breached the duty of fairness owed to them by not following HRM Procedures for the Disposal of Surplus Schools. They also argued that HRM breached the Halifax Regional Municipality Charter, S.N.S. 2008, c. 39 (the Charter) by selling the property below market value. Jono Developments v. North End Community Health Farrar J.A. 33

3 In a decision dated September 24, 2012 (2012 NSSC 330 (N.S. S.C.)), Justice David MacAdam accepted the Community Groups’ arguments and quashed HRM’s decision that approved the sale of the Property. 4 The reviewing judge subsequently awarded costs to the Community Groups in the amount of $30,125.77 with Jono paying 25% and HRM paying 75%. 5 Jono appeals, alleging the judge erred in allowing the motion for judicial review and in requiring Jono to pay a portion of the costs award.

Background 6 In September 2000 HRM received a staff report on Policy and Proce- dure for the Disposal of Surplus Schools (the Procedure). The report out- lines “a set of procedures to ensure that HRM has all of the information it requires, in a standardized format, when it is called upon to determine the future disposition of surplus school properties.” 7 The Procedure was approved as a policy pursuant to the Municipal Government Act, S.N.S. 1998, c. 18 and continued under the Charter. HRM’s policy, resolution and by-law-making powers are described at ss. 58 and 59 of the Charter: Resolutions, policies, by-laws 58(1) The Council shall make decisions in the exercise of its powers and duties by resolution, by policy or by by-law. (2) The Council may exercise any of its powers and duties by resolution unless a policy or a by-law is required by an enactment. (3) The Council may exercise by by-law any of the duties and powers that it may exercise by resolution or policy. (4) The Council may exercise by policy any of the duties and powers that it may exercise by resolution. ... 59 (1) Before a policy is passed, amended or repealed the Council shall give at least seven days’ notice to all Council members. (2) The Council may adopt different policies for different areas of the Municipality. (3) In addition to matters specified in this Act or another Act of the Legislature, the Council may adopt policies on any matter that the Council considers conducive to the effective management of the Municipality. 34 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

8 HRM’s powers regarding municipal property and the acquisition, sale, and lease of municipal property are set out at ss. 61(5) and 63, which provide, in part: Powers of Municipality regarding property 61(5) The Municipality may ... (b) sell property at market value when the property is no longer required for the purposes of the Municipality .... Sale or lease of municipal property 63(1) The Municipality may sell or lease property at a price less than market value to a non-profit organization that the Council considers to be carrying on an activity that is beneficial to the Municipality. (2) A resolution to sell or lease property referred to in subsection (1) at less than market value shall be passed by at least a two thirds majority of the Council present and voting. (3) Where the Council proposes to sell property referred to in subsection (1) valued at more than ten thousand dollars at less than market value, the Council shall first hold a public hearing respecting the sale. 9 The Procedure provided that when HRM received notice that a school was surplus, Building Management Services (BMS) would (i) assess the property, (ii) prepare a budget, (iii) schedule interim maintenance, and (iv) request internal (or Business Unit) proposals for future use of the property. Commercial Real Estate Services was required to commission an appraisal to establish the property’s “market value.” 10 If HRM decided not to retain the property for its own use, the Proce- dure required the following steps to be taken: 7. On receipt of that information, CGPP [Community Grants and Partnering Program] will evaluate any interest that may have been expressed by local community groups or grant applicants for the use of the school for community purposes. CGPP shall: (a) advise all such community groups that they are required to submit a written proposal within 90 days, setting out the com- position of the group, its purpose and management structure including office-bearers, the nature of the activities proposed, a financial statement, a business plan for the first five years, and a clear statement of the terms they are prepared to offer for the purchase or lease of the property; and (b) evaluate all submissions and assess their viability. Any submission that is deemed feasible and meets HRM’s fiscal goals Jono Developments v. North End Community Health Farrar J.A. 35

for the accommodation of community programs shall be carried forward as a recommendation to Executive Management and Council. 8. In the event that no proposals are received from community groups or grant applications, or that any proposals which are received are not supported by CGPP, CRES shall take steps to put the property on the market, subject to Council’s approval. 11 The September 2000 staff report raised the question of criteria for evaluating the competing interests of community groups who submit proposals pursuant to the Procedure. It also acknowledged a distinction between sales at market value and at less than market value. It stated: Criteria for Evaluating Competing Interests: Criteria for evaluating competing interest from community groups will be developed by Community Grants and Partnering Program staff in collaboration with the Grants Committee and a sub-committee to include representation from Regional Council. This effort fits within the existing terms of reference for the Grants Committee and will not require added Municipal Clerk support. Market Sale vs. Less Market Sale: Sale of a surplus building on the open market at full value must always be considered a desirable option, however the intent of the procedure is to allow staff and Council to evaluate all disposal options together and not independently of one another, in order to seek the best overall value for the Municipality. No criteria for evaluating proposals were ever developed. 12 Between September 19, 2000 and January 2013 HRM disposed of eighteen surplus school properties. In none of the eighteen school dispos- als did HRM follow the Procedure. Sixteen of the schools were disposed of in a consistent manner providing for solicitation of both community and private proposals through a public process. 13 The record indicates the Procedure was never considered or even discussed after it was approved. The minutes of various HRM meetings, after the Procedure was discovered, shed some light as to the councillors’ understanding of the reasons why the policy had been disregarded. Being mindful that their views are not all consistent, I find that of Councillor Sloane most compelling when she offered the following account of what may have happened: Never been tested. It’s almost like never been kissed. Never been tested, never been used, never been even brought into the fold of our 36 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

policy. Yet it sat there for 11 years. And Your Worship, it took me going on the internet and finding this with the most smallest (sic) of print to see that we had a former school surplus policy. And on De- cember 13th when I asked about it, not one person in this room knew what I was talking about.

The Request for Proposals 14 In March 2008, the Halifax Regional School Board formally declared the Property to be surplus to its requirements. In March 2009, the School Board approved the closure of the school at the end of the 2010/11 school year. On September 1, 2011, HRM took vacant possession of the Property. 15 Market value was evaluated by Colliers International (Atlantic) Valu- ation and Advisory Services (Colliers) in a Valuation Report dated March 30, 2011. Three scenarios for market value were presented: 1) Market Value of Property As Is: $1,000,000 2) Prospective Market Value — maintain old school/ redevelop remainder: $3,000,000 3) Prospective Market Value — demolish all buildings and redevelop: $4,300,000 16 The Colliers Report recommended that the Property go to the market unpriced because the “values are based on the extraordinary assumptions/limiting conditions that the property can be rezoned and that residential multi-unit dwellings will be permitted on the site and that the maximum unit yield resembles the maximum unit yield as currently permitted under the Halifax Peninsula R-3 zone.” 17 On June 28, 2011, HRM issued a Request for Proposals (RFP 11-039) inviting proposals for the purchase and re-development of three surplus school properties including the Property. It was posted to HRM’s website on June 28, 2011 and was advertised in the Chronicle Herald on July 6, 9, 13 and 16, 2011. In the RFP, the appraised value of the Property was listed at $4.3 million. The Procedure was not referred to in the RFP. 18 RFP 11-039 stated: “The purpose of this RFP is to determine the level of interest in the purchase and redevelopment of these surplus school properties by both Not-For-Profit and/or For-Profit organizations.” Fur- ther, RFP 11-039 explained the intent of the process as follows: HRM is interested in proposals that lead to a comprehensive and in- tegrated use of each site which may be accomplished through the res- Jono Developments v. North End Community Health Farrar J.A. 37

toration and re-use of the existing building or the redevelopment of the property for various commercial, institutional and other land uses, which are complementary to existing developments in the surrounding area, and which generally enhance the community. INTENT FOR NON PROFIT GROUPS: Legislation permits the sale of surplus municipal property at less than market value to registered non-profit organizations (i.e. a society, Ca- nadian charity, a non-profit cooperative). Such requests are evaluated relative to other proponents (both private and non-profit), including, but not limited to, any additional request for municipal subsidy such as real property tax assistance and deed transfer tax. All groups who are applying for less than market value MUST be a registered non- profit group at the time of the submission of the RFP. Proponents requesting less than market value sale shall demonstrate how their program and service delivery aligns with HRM’s jurisdictional mandate or organizational priorities. 19 Appendix “A” of the RFP sets out the Proposal Evaluation Criteria for the Property: Criteria Max Score Examples/Topics 1. Understanding of Intent 30 Intent for develop- and Objectives ment/use 2. Qualification and Expe- 25 Property owner- rience ship/development experience 3. Proponent’s Financial 25 Previous develop- Capability ment, asset portfo- lio, shareholders equity, mortgage pre-approval, experience with previous government funded programming 4. Financial Offer 20 Offer-proximity and relation to market value Total 100 38 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Participation of Community Groups in the RFP Process 20 By the end of 2009, all three Community Groups were aware that St. Patrick’s Alexandra Elementary School would be closing. Both the North End Community Health Association (NECHA) and the Micmac Native Friendship Society (Friendship Centre) had been told as early as April 2009 that HRM would eventually issue a RFP and that this would be the appropriate time to submit a proposal. 21 The Richard Preston Centre for Excellence Society (Preston Centre), a combination of eight pre-existing community groups, including Corn- wallis Street Baptist Church, had only recently been formed at the time of the RFP. However, on February 28, 2011, Reverend Rhonda Britton wrote to the Halifax Regional School Board on behalf of Cornwallis Street Baptist Church, indicating that the Church would like to acquire the Property. The letter was copied to Mayor Peter Kelly, but no further correspondence was exchanged with HRM until Reverend Britton became aware of the RFP on its closing date in August 2011. 22 Both NECHA and the Friendship Centre became aware of the RFP, participated in the July 20 pre-proposal conference site tour, and submitted proposals prior to the August 12, 2011 deadline. The Preston Centre submitted a proposal by the extended deadline of August 26, 2011. 23 Each of the Community Groups offered a purchase price of one dollar ($1.00).

Jono Participation in RFP Proposal 24 Jono proposed to purchase and develop the Property as a mixed use development which would include residential, affordable housing, community and commercial uses. The Property was offered on an “as is” and “as zoned” basis. As observed in the Colliers Report, any development project would require re-zoning and/or a development agreement. 25 Jono submitted two proposals. Option “A” was an unconditional bid of $3 million, with no requirements for changes to zoning or approval of a development agreement, to be increased by increments of $75,000 over the highest bid to a maximum of $4 million. 26 Jono’s Option “A” was the only unconditional bid. HRM assessed Jono’s proposal as having a net present value of $3,110,965 based on assumptions related to carrying costs, forgone tax revenues and interest rates, as outlined in the information report prepared by HRM staff. Jono Developments v. North End Community Health Farrar J.A. 39

27 In Option “B”, Jono offered $3.75 million, to be increased by increments of $150,000 over the highest bid to a maximum of $4.75 million but this proposal was conditional on the approval of a development agreement. HRM staff assessed the net present value of this proposal at $3,242,956. 28 After the RFP closed, a seven-person committee, including Peta-Jane Temple, the Team Lead of Grants and Contributions (Community and Recreational Services), evaluated and scored all proposals according to the criteria outlined in the RFP. Ms. Temple, in particular, was charged with evaluating the proposals from non-profit organizations for “viability” and “program alignment of the non-profit proponents to HRM’s objectives and mandate.” The Community Groups all received lower marks for “Financial Capability” than the private developers, as well as zero marks out of twenty for “Financial Offer.” 29 HRM staff prepared a report on November 21, 2011 which described HRM’s options as follows: • The recommended offer of $3,000,000 by Jono Developments Ltd. is without any limiting conditions. This offer will facilitate the sale of the subject property within a reasonable period following HRM’s approval for the award. • An alternative offer that Jono Developments Ltd. presented was contingent on the approval of a Development Agreement with a value of $3,750,000. However, after considering the time value of money, municipal property holding costs, lost property tax revenue and a 5% contingency for the risk inherent in the process, the stronger financial return in today’s dollars is the recommended unconditional offer of $3,000,000. 30 In other words, HRM staff determined that the risks associated with making the sale conditional on the approval of a development agreement were too great. It recommended that HRM Regional Council accept Jono’s Option “A” unconditional bid of $3 million. 31 On December 13, 2011, HRM Council met and passed a resolution to authorize the Mayor and Municipal Clerk to enter into an Agreement of Purchase and Sale with Jono, as recommended in the Staff Report. 32 Around this time, the Community Groups learned of the existence of the Procedure, and the fact that it had not been followed in the process leading to the sale of the Property. The Community Groups objected to HRM’s actions. In response, HRM Council passed a motion to rescind its 40 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

decision on January 10, 2012, one day after representatives of Jono had executed an Agreement of Purchase and Sale. HRM also requested a further report from HRM staff on the matter. 33 In their Supplementary Staff Report, dated January 19, 2012, HRM staff conceded that the Municipality had failed to follow the Procedure and determined that it had been breached in the following ways: 1) Building Management Services did not send HRM an information report that a school would be given to HRM by HRSB in six months; however, media reports, emails and correspondence (written and verbal) were sent to Executive Management Team and Area Councillors. 2) HRM did not formally deem the Property surplus to municipal requirements; however, it was declared surplus to municipal requirements by Administration, reaffirmed in the November Budget approved by HRM, and no new programs or services were funded for this property; 3) Community groups were only solicited through an open proposal call; 4) HRM Staff compared community proposals against proposals of private developers; 5) HRM Staff decided to put the Property on the open market without first seeking approval by HRM to do so. 34 On January 24, 2012, HRM passed a resolution to approve the Pro- perty as surplus to Municipal Requirements, to repeal the Procedure and to authorize the Mayor and Municipal Clerk to enter into an Agreement of Purchase and Sale of the Property to Jono, subject to the repeal of the Procedure. 35 On January 31, 2012, HRM passed a motion to repeal the Procedure and approved the sale to Jono for $3 million.

Decision under appeal 36 On February 1, 2012, the Community Groups filed a Notice for Judi- cial Review, seeking an order quashing HRM’s decision to sell the Pro- perty to Jono. The Community Groups also filed an emergency motion for a stay to prevent the imminent sale of the Property to Jono. The emergency stay was granted by Duncan J. on February 1, 2012, and was extended pending the outcome of the application for judicial review by order of Wood J. dated February 16, 2012. Jono Developments v. North End Community Health Farrar J.A. 41

37 As noted earlier, the application for judicial review was granted on September 24, 2012 and HRM’s decision to approve the sale was quashed with costs to the Community Groups. Jono appeals the judicial review decision and the costs award.

Issues 38 Jono raises three issues, broken down as follows: Issue #1: Did the reviewing judge err in law in finding that HRM breached a duty of fairness to the Community Groups? (a) Did HRM owe the Community Groups a duty of fairness? (b) What was the content of that duty? (c) Was the duty of fairness discharged? Issue #2: Did the reviewing judge err in law by determining that HRM’s interpretation of “market value” was unreasonable? Issue #3: Did the reviewing judge err in law by ordering Jono to pay costs to the Community Groups? 39 I will address the standard of review when dealing with each issue.

Issue #1 Did the reviewing judge err in law in finding that HRM breached a duty of fairness to the Community Groups?

Standard of Review 40 This issue addresses the reviewing judge’s substantive findings on the judicial review. The appropriate approach for a court of appeal to take when reviewing the lower court’s decision in a judicial review was addressed by the Supreme Court of Canada in Agraira v. Canada (Minister of Public Safety and Emergency Preparedness), 2013 SCC 36 (S.C.C.): 45 The first issue in this appeal concerns the standard of review applicable to the Minister’s decision. But, before I discuss the appropriate standard of review, it will be helpful to consider once more the interplay between (1) the appellate standards of correctness and palpable and overriding error and (2) the administrative law standards of correctness and reasonableness. These standards should not be confused with one another in an appeal to a court of appeal from a judgment of a superior court on an application for judicial review of an administrative decision. The proper approach to this issue was set out 42 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

by the Federal Court of Appeal in Telfer v. Canada (Revenue Agency), 2009 FCA 23, 386 N.R. 212 (F.C.A.), at para. 18: Despite some earlier confusion, there is now ample authority for the proposition that, on an appeal from a decision disposing of an application for judicial review, the question for the appellate court to decide is simply whether the court below identified the appropriate standard of review and applied it correctly. The appellate court is not restricted to asking whether the first-level court committed palpable and overriding error in its application of the appropriate standard. 46 In Merck Frosst Canada Lt´ee c. Canada (Ministre de la Sant´e), 2012 SCC 3, [2012] 1 S.C.R. 23 (S.C.C.), at para. 247, Deschamps J. aptly described this process as “‘step[ping] into the shoes’ of the lower court” such that the “appellate court’s focus is, in effect, on the administrative decision” (emphasis deleted). 47 The issue for our consideration can thus be summarized as follows: Did the application judge choose the correct standard of review and apply it properly? 41 The reviewing judge correctly identified the principle that no standard of review analysis governs judicial review, where the complaint is based upon a denial of natural justice or procedural fairness. (See for example, G. (T.) v. Nova Scotia (Minister of Community Services), 2012 NSCA 43 (N.S. C.A.), leave to appeal refused, [2012] S.C.C.A. No. 237 (S.C.C.), at ¶90). 42 Instead, a court will intervene if it finds an administrative process was unfair in light of all the circumstances. This broad question, which en- compasses the existence of a duty, analysis of its content and whether it was breached in the circumstances, must be answered correctly by the reviewing judge (see: G. (T.) v. Nova Scotia (Minister of Community Ser- vices), supra, at ¶8; Bowater Mersey Paper Co. v. C.E.P., Local 141, 2010 NSCA 19 (N.S. C.A.), ¶28; M. (N.N.) v. Nova Scotia (Minister of Community Services), 2008 NSCA 69 (N.S. C.A.), ¶40; and Kelly v. Nova Scotia Police Commission, 2006 NSCA 27 (N.S. C.A.), ¶21-33.

Existence of a duty of fairness 43 The reviewing judge embarked on a duty of fairness content analysis following Baker v. Canada (Minister of Citizenship & Immigration), [1999] 2 S.C.R. 817 (S.C.C.) before assessing the threshold issue of whether a duty was owed at all. This omission by the reviewing judge is Jono Developments v. North End Community Health Farrar J.A. 43

of little consequence as, for the reasons that follow, I am satisfied that HRM owed a duty of fairness to the Community Groups. 44 In Congrégation des Témoins de Jéhovah de St-Jérôme-Lafontaine c. Lafontaine (Municipalité), 2004 SCC 48 (S.C.C.), the Supreme Court of Canada stated: 3 A public body like a municipality is bound by a duty of procedural fairness when it makes an administrative decision affecting individual rights, privileges or interests: Cardinal v. Director of Kent Insti- tution, [1985] 2 S.C.R. 643; Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735; Martineau v. Matsqui Institution Disciplinary Board, [1980] 1 S.C.R. 602; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311. 45 The first requirement is that the decision be ‘administrative,’ as opposed to ‘legislative’. 46 Justice Oland in Potter v. Halifax Regional School Board, 2002 NSCA 88 (N.S. C.A.) provides a helpful explanation of the distinction: [39] [...] I have found the following passage from S.A. De Smith’s text, Judicial Review of Administrative Action, [3rd ed.], 1973 London: Stevens at p. 60 on the distinction between administrative and legislative acts helpful for my analysis: The distinction between legislative and administrative acts is usually expressed as being a distinction between the general and the particular. A legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act cannot be exactly defined, but it includes the adoption of a policy, the making and issue of a specific direction, and the application of a general rule to a particular case in accordance with the requirements of policy or expediency or administrative practice. [40] The classification of an act as legislative or administrative is not always easily done. There is a great diversity of administrative decision-making with decision-makers ranging from those primarily adjudicative in function to those that deal with purely legislative and policy matters: see Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623, [1992] S.C.J. No. 21 at para 27. Where a particular decision-making power falls on this continuum is a consideration in determining the application and extent of any duty of fairness. [...] I agree with Brown and Evans that those decisions closer to the “legislative and general” end of the spectrum usually have two characteristics: gener- 44 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

ality (the power is of “general application and when exercised will not be directed at a particular person”) and a broad policy orientation in that the decision creates norms rather than decides on their application to particular situations: see D. Brown & J. Evans, Judicial Re- view of Administrative Action in Canada, looseleaf (Toronto: Can- vasback Publishing, 1998) vol. 2 at para 7:2330. In my view, when the Board decides to close a specific school or specific schools, it is applying, among other things, policy and general considerations but to particular situations. Such decisions are not, in my view, so close to the legislative and general end of the spectrum as to foreclose entirely any duty to act fairly. [Emphasis added] 47 Similarly, the decision to sell the surplus school is a decision related to a particular situation and is not so close to the legislative end of the spectrum to preclude a duty of fairness. 48 Further, it has been recognized that public interest may give rise to a duty of fairness if an applicant has (i) a genuine interest in the matter, (ii) the issue is justiciable, (iii) there is a serious issue to the tried and (iv) there is no other reasonable and effective manner for the issue to be resolved (see Donald Brown & John Evans, Judicial Review of Administra- tive Action in Canada, (loose-leaf (updated May 2013) (Toronto: Can- vasback, 1998) at 4-44 and 7-54). 49 I agree with and adopt the following remarks of Wood J. in North End Community Health Assn. v. Halifax (Regional Municipality), 2012 NSSC 92 (N.S. S.C.), when granting the interim stay as accurately describing the public interest of the Community Groups: [37].... It is clear that there is a shortage of suitable premises in the neighbourhood served by the three applicants. Schools are not like other residential and commercial structures. They are designed and built to be public facilities and include meeting spaces, offices and recreational areas. The presence of a gymnasium is particularly attractive to the Micmac Native Friendship Centre. [38] In HRM schools only become available for acquisition after they are declared to be surplus by the School Board. This is likely to occur only once in a generation in most neighbourhoods. [39] According to the affidavit of Dr. Margaret Casey, the North End Community Health Association has been searching for a new location, without success, for the last seven years. 50 The circumstances of the Community Groups are such that HRM’s decision to dispose of the School affects their rights or interests suffi- Jono Developments v. North End Community Health Farrar J.A. 45

ciently to fulfill the test articulated in Congrégation des témoins de Jého- vah, supra. 51 I conclude HRM owed a duty of fairness to the Community Groups.

Content of the Duty of Fairness 52 I now turn to the content, or degree of procedural fairness that applies to the particular case. In Kelly v. Nova Scotia Police Commission, supra, Cromwell J.A. (as he then was) wrote: [20] Given that the focus was on the manner in which the decision was made rather than on any particular ruling or decision made by the Board, judicial review in this case ought to have proceeded in two steps. The first addresses the content of the Board’s duty of fairness and the second whether the Board breached that duty. (...) [21] The first step — determining the content of the tribunal’s duty of fairness - must pay careful attention to the context of the particular proceeding and show appropriate deference to the tribunal’s discretion to set its own procedures. The second step — assessing whether the Board lived up to its duty — assesses whether the tribunal met the standard of fairness defined at the first step. The court is to intervene if it is of the opinion the tribunal’s procedures were unfair. In that sense, the court reviews for correctness. But this review must be conducted in light of the standard established at the first step and not simply by comparing the tribunal’s procedure with the court’s own views about what an appropriate procedure would have been. Fair- ness is often in the eye of the beholder and the tribunal’s perspective and the whole context of the proceeding should be taken into account. Court procedures are not necessarily the gold standard for review. 53 In Baker, supra, Justice L’Heureux-Dub´e set out what have become the guiding principles to define the content of the duty: 21 The existence of a duty of fairness, however, does not determine what requirements will be applicable in a given set of circumstances. As I wrote in Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653, at p. 682, “the concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case”. ... 22 ... I emphasize that underlying all these factors is the notion that the purpose of the participatory rights contained within the duty of procedural fairness is to ensure that administrative decisions are made using a fair and open procedure, appropriate to the decision being made and its statutory, institutional, and social context, with an 46 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

opportunity for those affected by the decision to put forward their views and evidence fully and have them considered by the decision- maker. [Emphasis added] She then goes on to describe five non-exhaustive factors to consider, which can be summarized as follows: 1. the nature of the decision being made and the process followed in making it; 2. the nature of the statutory scheme and the “terms of the statute pursuant to which the body operates;” 3. the importance of the decision to the individual or individuals affected; 4. the legitimate expectations of the person challenging the decision; and 5. the choices of procedure made by the agency itself, particularly when the statute leaves to the decision-maker the ability to choose its own procedures, or when the agency has an expertise in determining what procedures are appropriate in the circumstances. See Baker, supra, at ¶ 23-28. In Mavi v. Canada (Attorney General), [2011] 2 S.C.R. 504 (S.C.C.), Justice Binnie reiterated that this list is non-exhaustive (¶42). 54 The reviewing judge presented the positions of the parties for each factor set out in Baker, but did not conduct his own analysis or indicate where on the spectrum he believed the duty fell. Failure to do so led him to conclude that the duty of fairness could only be satisfied by adherence to the Procedure. In my view both his approach and his ultimate conclusion on the scope of the duty of fairness were incorrect. I will explain further in the course of reviewing each of the Baker factors.

(i) The nature of the decision and the process followed 55 HRM’s decision concerned how to dispose of former school property. In doing so, HRM must evaluate individual proposals against specific criteria, which to some extent resembles an adjudicative process. It then must exercise its discretion in choosing the appropriate purchaser. The nature of the decision falls in the middle of the spectrum between discretionary and adjudicative. As conceded by the respondent Community Groups in this appeal, and contrary to their submissions at trial, this factor attracts only a moderate duty of fairness. Jono Developments v. North End Community Health Farrar J.A. 47

(ii) The nature of the statutory scheme 56 HRM gets its authority from the Charter. The Charter itself is silent on the procedure HRM must follow on how to dispose of municipal property. However, while being mindful that the Charter is generally worded so as to permit HRM to govern flexibly, the Charter authorizes HRM to enact policies to govern its decision-making. With respect to the disposal of surplus school property, it has done so by enacting the Procedure. 57 The enactment of the Procedure evidences HRM’s intention to provide the Community Groups with a significant duty of fairness.

(iii) Importance of the Decision to those Affected 58 The decision is important to the Community Groups and, as argued by them, to the broader community in the North End of Halifax. In support of this argument, I refer back to Wood J.’s comments quoted earlier recognizing the importance of the decision to the Community Groups, to which I add his following comment in that same decision: 51 Whether HRM is required to follow its approved Disposal Proce- dure, and whether community groups can hold them accountable for not doing so, is an important issue for these applicants. It is also an important issue for the broader community. ... 59 The affidavits of Dr. Margaret Casey, Reverend Rhonda Britton, and Pamela Glode-Desrochers also outline the respondents’ particular interest in the Property. For instance, since 2005, NECHA has been searching actively for a larger space in the North End of Halifax in order to serve its clients; the Property would respond to that need. The Friendship Cen- tre, for its part, is interested in the Property because its current buildings are in a poor state of repair, and also because of the presence of a gymnasium, which the Friendship Centre could use to offer a number of its youth programs. 60 The reviewing judge observed: [29] ... Issues with “broader policy implications for the entire community” as opposed to “local issue[s] affecting the lives of residents of a neighbourhood” have been held to demand a moderate level of procedural fairness: Heritage Trust of Nova Scotia v. Halifax (Regional Municipality), 2007 NSSC 28, at para. 93. ... 61 The Community Groups submit that the present situation is similar to that of the church applying for re-zoning in Congregation des T´emoins de Jehovah, supra where the Supreme Court of Canada found that a heightened duty of fairness applied. With respect, I disagree. The Court 48 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

noted that the municipal decision in that case affected the Congregation’s practice of its religion; a constitutionally protected right. Here, this Pro- perty is sought by the Community Groups for the purpose of community programming. The stakes are clearly distinguishable. 62 I consider that this factor attracts a moderate level of fairness.

(iv) Legitimate Expectations of those challenging the decision 63 The reviewing judge’s conclusion appears to be driven entirely by his reasoning under Baker’s fourth factor, i.e., whether the Community Groups had a legitimate expectation that the Procedure would be followed. As a result, I will address this factor in some length. It is useful to repeat his conclusion on this point: 38. ... The intention to follow the Procedure was implicit in Council’s decision to enact it. I do not believe that the applicants’ lack of actual knowledge deprived them of the right to assume that Council would abide by its own enactments. They could legitimately expect Council to follow its own Procedure. ... 49 I am satisfied that Council owed a duty of procedural fairness to the applicants in the process of disposing of the property. That duty extended no further than to act in good faith and observe HRM’s own Procedure, as enacted by Council. 64 To equate the content of the Procedure with the content of the duty of fairness without further analysis was an error, which contaminated the reviewing judge’s ultimate conclusion. Although, in some cases, a representation may define the content of the duty, the existence of legitimate expectations is just one factor to be considered in the formulation of the duty of fairness. I will explain further.

(a) History and Rationale 65 It is worth briefly articulating the rationale for and history of the legitimate expectations doctrine: The principal rationale for holding an administrative agency to its procedural undertakings, rules or past practice is that individuals are entitled to expect that governmental bodies will honour the undertakings they have given, either expressly or by implication, particularly where there has been reliance on them. Secondly, when procedures have been adopted or practices established, it would amount to arbitrary conduct for an agency to fail to comply with them in some ma- Jono Developments v. North End Community Health Farrar J.A. 49

terial respect, since amendments to rules should generally be prospective in operation. [Emphasis added] (Brown/Evans at 7-23/24, footnotes omitted.) 66 The legitimate expectations doctrine originated in England as a threshold mechanism for establishing entitlement to procedural fairness. In Schmidt v. Secretary of State for Home Affairs, [1969] 2 Ch. 149 (Eng. C.A.), Lord Denning held that an administrative decision-maker may be obligated to afford a person the opportunity to make representations, provided “he has some right or interest, or, I would add, some legitimate expectation, of which it would not be fair to deprive him without hearing what he has to say” (p.170). In time, the doctrine also served to define the content of the fairness duty in cases where, by representation or past practice, decision-makers had led those affected to expect specific procedural safeguards, as in Hong Kong (Attorney General) v. Ng, [1983] 2 A.C. 629 (Hong Kong P.C.). See also D. Wright, “Rethinking the Doc- trine of Legitimate Expectations in Canadian Administrative Law” (1997), 35 Osgoode Hall L.J. 139. 67 The Supreme Court of Canada first addressed the doctrine in Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170 (S.C.C.), where Sopinka J. stated as follows: 73 It appears, however, that at bottom the appellant’s submission is that the conduct of the Committee created a legitimate expectation of consultation. The appellant cites the decision of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service, [1984] 3 All E.R. 935. The principle is also discussed in the leading cases of Attorney General of Hong Kong v. Ng Yuen Shiu, [1983] 2 All E.R. 346 (P.C.), and R. v. Hull Prison Board of Visitors, ex parte St. Germain, [1979] 1 All E.R. 701 (C.A.). It is also referred to in the following Canadian cases: Re Multi-Malls Inc. and Minister of Transportation and Communications (1976), 14 O.R. (2d) 49; Re Canadian Occidental Petroleum Ltd. and District of North Vancou- ver (1983), 148 D.L.R. (3d) 255; [page1204] Gaw v. Commissioner of Corrections (1986), 2 F.T.R. 122 and Re Bruhn-Mou and College of Dental Surgeons of British Columbia (1975), 59 D.L.R. (3d) 152. 74 The principle developed in these cases is simply an extension of the rules of natural justice and procedural fairness. It affords a party affected by the decision of a public official an opportunity to make representations in circumstances in which there otherwise would be no such opportunity. The court supplies the omission where, based 50 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

on the conduct of the public official, a party has been led to believe that his or her rights would not be affected without consultation. 68 While the doctrine has expanded in recent years under English law, where it may operate to secure substantive relief (see R. v. North & East Devon Health Authority (1999), [2001] Q.B. 213 (Eng. C.A.)), its function in Canadian law has remained a part of the procedural fairness duty. The Supreme Court in Agraira provided the following overview of its role and application: 95 The specific conditions which must be satisfied in order for the doctrine of legitimate expectations to apply are summarized succinctly in a leading authority entitled Judicial Review of Administra- tive Action in Canada: The distinguishing characteristic of a legitimate expectation is that it arises from some conduct of the decision- maker, or some other relevant actor. Thus, a legitimate expectation may result from an official practice or assurance that certain procedures will be followed as part of the decision-making process, or that a positive decision can be anticipated. As well, the existence of administrative rules of procedure, or a procedure on which the agency had voluntarily embarked in a particular instance, may give rise to a legitimate expectation that such procedures will be followed. Of course, the practice or conduct said to give rise to the reasonable expectation must be clear, unambiguous and unqualified. (D. J. M. Brown and J. M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at §7:1710; see also Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services), 2001 SCC 41, [2001] 2 S.C.R. 281, at para. 29; Canada (Attorney General) v. Mavi, 2011 SCC 30, [2011] 2 S.C.R. 504, at para. 68.) 96 In Mavi, Binnie J. recently explained what is meant by “clear, unambiguous and unqualified” representations by drawing an anal- ogy with the law of contract (at para. 69): Generally speaking, government representations will be considered sufficiently precise for purposes of the doctrine of legitimate expectations if, had they been made in the context of a private law contract, they would be sufficiently certain to be capable of enforcement. 97 An important limit on the doctrine of legitimate expectations is that it cannot give rise to substantive rights (Baker, at para. 26; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at Jono Developments v. North End Community Health Farrar J.A. 51

p. 557). In other words, “[w]here the conditions for its application are satisfied, the Court may [only] grant appropriate procedural remedies to respond to the ‘legitimate’ expectation” (C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29, [2003] 1 S.C.R. 539, at para. 131. [Emphasis added] 69 The Supreme Court of Canada in Centre hospitalier Mont-Sina¨ı c. Qu´ebec (Ministre de la Sant´e & des Services sociaux), 2001 SCC 41 (S.C.C.), states explicitly that pre-existing knowledge of a policy is not a necessary requirement to trigger legitimate expectations: 30 ... the weight of authority and principle suggests that an applicant who relies on the doctrine of legitimate expectations may show, but does not necessarily have to show, that he or she was aware of such conduct, or that it was relied on with detrimental results. This is because the focus is on promoting “regularity, predictability, and certainty in government’s dealing with the public”: S. A. de Smith, H. Woolf and J. Jowell, Judicial Review of Administrative Action (5th ed. 1995), at p. 417, to which the editors add, at p. 426, that insisting on estoppel-type requirements would involve unfair discrimination between those who were and were not aware of the representation and would benefit the well-informed or well-advised. It would also en- courage undesirable administrative practice by too readily relieving decision-makers of the normal consequences of their actions.... 70 This rationale was discussed further by Evans, J.A. (concurring in the result) in Apotex Inc. v. Canada (Attorney General), [2000] F.C.J. No. 634 (Fed. C.A.): 122. When a legitimate expectation arises from an agency’s past practice, or non-statutory procedural guidelines, it serves to preclude procedural arbitrariness, not the actual expectation of the individual who may have been unaware of its existence. ... 71 The legitimate expectations doctrine exists to ensure governmental actions in dealing with the public are fair, predictable and not arbitrary. It is important to keep this rationale in mind when determining, not only whether there are legitimate expectations, but whether those expectations have been fulfilled. 52 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

(b) Did legitimate expectations arise in this case? 72 I am satisfied that the content of the Procedure gives rise to a legitimate expectation that the Community Groups would be entitled to participate in HRM’s decision to dispose of surplus school properties in a substantially similar manner to the one set out therein. In my view, the legitimate expectations in this case count toward a more stringent duty of fairness under the Baker analysis than would otherwise be the case. 73 I say this because if it were as simple as equating the representation giving rise to legitimate expectations with the broader duty of fairness, as the reviewing judge here determined — there would be no need for the fourth step in the Baker analysis. Any deviation from the established procedure, regardless of how trivial it may be, would always result in a breach of the duty of fairness. 74 The existence of legitimate expectations and whether those expectations have been fulfilled goes into the broader discussion of whether or not there has been a breach of the duty of fairness.

(c) The Role of Legitimate Expectations 75 In Baker, L’Heureux-Dub´e J. described the doctrine’s purpose and function as follows: 26 Fourth, the legitimate expectations of the person challenging the decision may also determine what procedures the duty of fairness requires in given circumstances. Our Court has held that, in Canada, this doctrine is part of the doctrine of fairness or natural justice, and that it does not create substantive rights: Old St. Boniface, supra, at p. 1204; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at p. 557. As applied in Canada, if a legitimate expectation is found to exist, this will affect the content of the duty of fairness owed to the individual or individuals affected by the decision. If the claimant has a legitimate expectation that a certain procedure will be followed, this procedure will be required by the duty of fairness: Qi v. Canada (Minister of Citizenship and Immigration) (1995), 33 Imm. L.R. (2d) 57 (F.C.T.D.); Mercier-N´eron v. Canada (Minister of National Health and Welfare) (1995), 98 F.T.R. 36; Bendahmane v. Canada (Minister of Employment and Immigration), [1989] 3 F.C. 16 (C.A.). Similarly, if a claimant has a legitimate expectation that a certain result will be reached in his or her case, fairness may require more extensive procedural rights than would otherwise be accorded: D. J. Mullan, Administrative Law (3rd ed. 1996), at pp. 214-15; D. Shapiro, “Legitimate Expectation and its Application to Canadian Jono Developments v. North End Community Health Farrar J.A. 53

Immigration Law” (1992), 8 J.L. & Social Pol’y 282, at p. 297; Canada (Attorney General) v. Human Rights Tribunal Panel (Can- ada) (1994), 76 F.T.R. 1. Nevertheless, the doctrine of legitimate expectations cannot lead to substantive rights outside the procedural domain. This doctrine, as applied in Canada, is based on the principle that the “circumstances” affecting procedural fairness take into account the promises or regular practices of administrative decision- makers, and that it will generally be unfair for them to act in contravention of representations as to procedure, or to backtrack on substantive promises without according significant procedural rights. [Emphasis added] 76 Although it has been found that it is possible for legitimate expectations to define the content of the fairness duty, it should be noted that the cases cited for that proposition all concerned individuals whose expectations arose from government letters or pamphlets, and so were chiefly concerned with holding decision-makers to their promises in a given situation, rather than avoiding arbitrariness on a larger scale. (See Qi v. Canada (Minister of Citizenship & Immigration), [1995] F.C.J. No. 1615 (Fed. T.D.); Mercier-N´eron v. Canada (Minister of National Health & Welfare), [1995] F.C.J. No. 1024 (Fed. T.D.); and Bendahmane v. Canada (Minister of Employment & Immigration), [1989] 3 F.C. 16 (Fed. C.A.)). 77 Binnie J.’s statement in Mavi, supra, that “It will be a breach of the duty of fairness for the decision maker to fail in a substantial way to live up to its undertaking” (¶68) confirms that the issue is whether the process, overall, is fair. 78 He makes reference to Brown and Evans, which provides that: It will be a breach of the duty of fairness for the decision-maker to fail in a substantial way to meet the procedural standards that it had promised in its assurance, intimated by its conduct, prescribed in its rules or policy. [p. 7-26] [emphasis in original]. 79 Their text further states that “when procedures have been adopted or practices established, it would amount to arbitrary conduct for an agency to fail to comply with them in some material respect” [p. 7-24] [emphasis added] 54 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

80 Most recently, in Agraira v. Canada (Minister of Public Safety and Emergency Preparedness), supra, the Supreme Court described the doctrine’s operation as follows: If a public authority has made representations about the procedure it will follow in making a particular decision, or if it has consistently adhered to certain procedural practices in the past in making such a decision, the scope of the duty of procedural fairness owed to the affected person will be broader than it otherwise would have been. [para. 94] [Emphasis added] 81 Brown and Evans cite several cases in support of their claim that a fairness breach will not result when procedural standards have been met in a “substantial way.” The examples which turn on this distinction do not specifically address the legitimate expectations doctrine; however, they do recognize that fairness should be the central consideration when deciding whether to insist on strict compliance with a guideline. 82 In Fisher Park Residents Assn. Ltd. v. Ottawa (City) Board of Educa- tion (1986), 33 D.L.R. (4th) 411 (Ont. H.C.), the Board had instituted a policy for school closures, as required by Ministerial guidelines. In this case, it was argued that the policy: 1) did not meet the requirement of the guidelines because it failed to set out a firm chronology for decision- making; and 2) had not been followed on the facts of the case because it was amended mid-stream to alter the community consultation process. In refusing to interfere with the decision, the court said as follows: [...] the policy developed by an individual board is not to be regarded nor scrutinized in the same way as a legislative enactment would be. In my view, the amendments envision a board’s policy as a means of obtaining a fair procedure for the closing of schools. Thus, the substance of what is done is crucial rather than the technicalities. It must always be borne in mind that we are dealing with an administrative or management function and not with a judicial function, nor quasi- judicial function. Accordingly, a crucial central consideration is whether or not the plaintiffs have been treated fairly or unfairly. To this I think the plain answer is they have not been treated unfairly. [...] [p. 420] 83 Eberle J. further went on to say that the key issue was whether or not the public had been treated unfairly, and held that it had not been, in light of the ample time provided in which to prepare briefs and make submissions to the Board. He also found significance in the fact that the Board Jono Developments v. North End Community Health Farrar J.A. 55

was conducting an administrative function, rather than affecting legal rights of individuals. Although this case was decided before Baker and does not address the legitimate expectations doctrine directly, this analysis is consistent with a contextualized understanding of fairness in light of all the circumstances. However, his conclusion that “real and substantial prejudice” would have to be established in order to intervene would not seem to be in keeping with current understandings of procedural fairness or legitimate expectations. 84 Likewise, in Gillingham v. Corner Brook / Deer Lake / St. Barbe School Board District No. 3, [1998] N.J. No. 212 (Nfld. T.D.), there was an alleged lack of compliance with a school closure policy. Again, although without reference to legitimate expectations, the trial judge was satisfied that the policy was “more than substantially complied with” for the following reasons: 43 [...] On the evidence, Ms. Gillingham did have meaningful impact into the report prepared pursuant to step three, the report did contain information concerning the educational impact for the students involved, the 30-day response time provided for in step five of the school closure policy was given, and to say that the parents of the Cox’s Cove students were not advised of the closure of the Cox’s Cove School at the end of the 1997-98 school year is to be unreasonable. Some of the Applicants were at the May 25 meeting when the Board vote on the closure was taken. There was extensive media cov- erage and a letter on the subject was circulated by the principal of the Cox’s Cove School to all the parents on or about June 16. That there was no letter from the Board to each parent I do not consider a short- coming of any significance in the circumstances. 85 Although these cases do not grapple specifically with the doctrine, they illustrate the results of an approach in which fairness is the central question.

(d) Application of Legitimate Expectations to the Duty of Fairness 86 The Supreme Court of Canada has discussed the doctrine of legitimate expectations in various cases. The earliest, and most helpful in the context of this question, is Old St. Boniface, supra, wherein Sopinka J. concluded the judgment with the following statement: 75 The planning and zoning process is an elaborate structure designed to enable all those affected not only to be consulted but to be heard. The appellant availed itself of this process by making representations before the Community Committee. Even if the conduct of 56 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

this Committee raised expectations on the part of the appellant, I am of the opinion that this would not justify this Court in mounting onto the elaborate statutory scheme yet another process of consultation. [Emphasis added] 87 This comment indicates that it is not necessary to give precise effect to legitimate expectations, so long as the process at issue is fair in light of all the circumstances. 88 Similarly, in Attaran v. University of British Columbia, [1998] B.C.J. No. 115 (B.C. S.C. [In Chambers]), the British Columbia Supreme Court held that fairness would not require strict compliance with the university’s internal Consultation Policy. In that case, which was mentioned in Justice MacAdam’s reasons, the decision rested on a finding that expectations had not been raised, both because the policy had not been followed consistently and the petitioners did not have knowledge of it at the relevant time. However, Holmes J. went on to say that, even assuming expectations existed, he did not find “the failure of the University to follow the detail or the chronology set out in the Consultation Policy fatal to a decision on fees being made. It would suffice if an opportunity for ex- pression of views as generally contemplated by the Consultation Policy occurred” (¶73). He also reiterated at (para. 85) that “any legitimate expectation of consultation regarding the fee increases was adequately met by the process followed, however imperfect, confused and cumbersome it was.” 89 Campbell v. Saskatchewan (Workers’ Compensation Board), 2012 SKCA 56 (Sask. C.A.) was disposed of on the basis that the decision below was unreasonable. However, the Court considered allegations of unfairness on the grounds that the Board declined to hold a hearing, despite having published a policy which stated a hearing would be granted on request and having made similar representations to the parties. The Court expressed its understanding of the legitimate expectations doctrine as follows: 75 [...] In Baker, the Court commented that where there is a legitimate expectation that a particular procedure will be followed, this will affect the content of the duty of fairness owed to the individuals affected by the decision, and the expected procedure will normally be required by the duty of fairness. [Emphasis added] 90 After discussing the strength of the legitimate expectations argument on the facts, the Court said that “[t]he factor of legitimate expectations Jono Developments v. North End Community Health Farrar J.A. 57

strongly supports the appellant’s position that fairness was denied in this case.” (para. 76). However, they were explicit that such a conclusion did not end the analysis, and went on to say that “the most important considerations in this case lie in the importance of the issue to the appellant and the nature of the issues that the Board was called upon to decide” (¶77). 91 Similarly, in Mega International Commercial Bank (Canada) v. Canada (Attorney General), 2012 FC 407 (F.C.), the doctrine was not triggered on the facts of the case. Nevertheless, Montigny J.’s reasons are instructive: 33 Moreover, the duty of fairness is flexible and depends on an appreciation of the context of the particular statute and the rights affected. As such, several factors are relevant to determining the content of the duty of fairness, of which the legitimate expectations of the individual or corporation challenging the decision is only one among others. Of equal importance will be the nature of the decision being made and the process followed in making it, the nature of the statutory scheme and the terms of the statute pursuant to which the body operates, the importance of the decision to the individual or individuals affected, and the choices of procedure made by the agency itself [...]

(e) Were the expectations fulfilled? 92 As noted above, the existence of legitimate expectations does not end the inquiry. As per the rationale described by Brown and Evans above, the concerns addressed by this doctrine are only engaged when there has been a failure to comply with the legitimate expectations in a “material respect.” 93 It is useful, at this point, to repeat Binnie, J.’s comments in Mavi: 68 Where a government official makes representations within the scope of his or her authority to an individual about an administrative process that the government will follow, and the representations said to give rise to the legitimate expectations are clear, unambiguous and unqualified, the government may be held to its word, provided the representations are procedural in nature and do not conflict with the decision maker’s statutory duty. Proof of reliance is not a requisite. See Mount Sinai Hospital Center, at paras. 29-30; Moreau-B´erub´e v. New Brunswick (Judicial Council), 2002 SCC 11 (CanLII), 2002 SCC 11, [2002] 1 S.C.R. 249, at para. 78; and C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29 (CanLII), 2003 SCC 29, [2003] 1 S.C.R. 539, at para. 131. It will be a breach of the duty of fairness for 58 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

the decision maker to fail in a substantial way to live up to its undertaking: Brown and Evans, at pp. 7-25 and 7-26. [Emphasis added] 94 Thus, where legitimate expectations are engaged, a breach of the duty of fairness can be established if there is a substantial deviation from the authority’s representation, but not every contravention will give rise to a breach of the fairness duty. 95 Similarly, I reiterate the words of Justice L’Heureux-Dub´e in Baker, supra: 22 ... I emphasize that underlying all these factors is the notion that the purpose of the participatory rights contained within the duty of procedural fairness is to ensure that administrative decisions are made using a fair and open procedure, appropriate to the decision being made and its statutory, institutional, and social context, with an opportunity for those affected by the decision to put forward their views and evidence fully and have them considered by the decision- maker. ... 26 ... [I]t will generally be unfair for [administrative decision makers] to act in contravention of representations as to procedure, or to backtrack on substantive promises without according significant procedural rights. [Emphasis added] 96 In this case, the RFP granted the Community Groups participatory rights that were substantially similar to those contemplated in the Proce- dure. They had an opportunity to make proposals for the disposal of the surplus property, and those proposals were considered by HRM staff on more than just a financial basis. 97 Specifically, although the Procedure stipulated that community groups who had expressed an interest in the Property were to be given 90 days to prepare a proposal, both of the respondent groups who expressed interest before release of the RFP were advised that proposals would be called for as early as 2009. They also participated in the site tour and made comprehensive submissions. The Preston Centre, which did not formally express interest prior to the RFP, was able to prepare and submit a proposal by the extended deadline. 98 Secondly, the Procedure provided that HRM would consider the proposals of community groups before those of private developers, but did not imply that such groups had any pre-emptive right. In fact, as noted Jono Developments v. North End Community Health Farrar J.A. 59

earlier, the September 2000 Staff Report that accompanied the Procedure stated that sale “on the open market at full value must always be considered a desirable option, however, the intent of the procedure is to allow staff and Council to evaluate all disposal options together and not independently of one another”. 99 Thirdly, while the Procedure mandated that community and for-profit proposals were to be considered sequentially, only those community submissions deemed feasible and which met “HRM’s fiscal goals for the accommodation of community programs” were to be carried forward as a recommendation to Executive Management and HRM. 100 Furthermore, the Procedure did not specify the criteria for evaluating feasibility or alignment with fiscal goals and did not guarantee that HRM would select any of the recommended submissions. 101 Finally, although community submissions were not evaluated separately by the Community Grants Partnership Program as dictated by the Procedure, the Team Lead of Grants and Contributions participated in both drafting the RFP and evaluating non-profit submissions within the RFP committee. 102 In my view, the process as carried out did not differ substantially from the representations found in the Procedure. 103 To conclude on this factor, the Procedure gave rise to legitimate expectations on the part of the parties but is not determinative of the duty of fairness required in this case. Legitimate expectations is just one factor to be considered in the formulation of the duty of fairness. I will now turn to the fifth factor discussed in Baker.

(v) Decision-maker’s own choice of procedures 104 McLachlin C.J. in Congregation des T´emoins de Jehovah, supra, (¶5) reframed the fifth Baker factor as “the nature of the deference accorded to the body,” and this factor recognizes that some decision-makers are given significant latitude in their choice of procedures, and may possess a degree of expertise in crafting them. 105 In this case, this factor is complicated by the fact that HRM chose two different procedures, one officially enacted, and another through its practice. However, both policy and practice envisioned participatory rights for community groups and neither set out specific criteria by which to evaluate their submissions. Any conflict between these procedures is not so great as to undermine the fact that HRM was free to 60 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

choose its own process and so should be accorded a measure of deference in that choice. This factor points to a moderate degree of fairness.

Summary on the Content of Procedural fairness owed 106 The foregoing analysis suggests that a significant degree of fairness was owed to the Community Groups, which included participation in the disposal process. I agree with Jono’s submission that the duty owed to the Community Groups amounted, in the circumstances, to an opportunity to advance a proposal and to have the proposal considered by HRM on criteria other than simply the price offered for the property.

Was there a Breach of the duty of fairness? 107 I turn now to an application of the above principles to the circumstances of this case to determine whether the procedures followed respected the duty of procedural fairness owed to the Community Groups. 108 As established above, deviations from the Procedure in the RFP process were not substantial enough as to constitute a breach of the procedural fairness duty on the ground of legitimate expectations. I further find that the process as followed afforded sufficient procedural rights as to satisfy the duty owed to the Community Groups. 109 First, the RFP process was consistent and predictable, as HRM had used it to sell 16 of 18 surplus schools in the past decade. HRM consistently represented by conduct and communications, to both the general public and the Community Groups specifically, that the Municipality would follow the RFP process that was, in fact, used for the sale of the Property. 110 Further, the RFP was advertised on the HRM website and in the Chronicle Herald as HRM’s chosen process for the sale of the Property. The Community Groups were duly notified and able to put forth meaningful offers. 111 Third, the Community Groups were afforded participatory rights substantially similar to those contemplated by the Procedure. 112 In conclusion, I am satisfied that the RFP process followed was sufficient to discharge the duty of procedural fairness owed to the Commu- nity Groups. The process was consistent and predictable, the Community Groups were duly notified and made aware of the process, the RFP Jono Developments v. North End Community Health Farrar J.A. 61

granted the Community Groups participatory rights in a substantial way and their proposals were considered on more than just a financial basis. 113 I would allow this ground of appeal.

Issue #2 Did the reviewing judge err in law by determining that HRM’s interpretation of “market value” was unreasonable?

Standard of Review 114 As I have already explained, in looking at the reviewing court’s decision, the issue for our consideration is whether the reviewing judge chose the correct standard of review and applied it properly (Agraira, supra, ¶47). 115 The reviewing judge held: [81] I am satisfied that Council was required to be correct in interpreting the scope of its power to sell the property under the HRM Charter. That is to say, the standard to be applied to Council’s determination of whether it could sell the property for less than market value was correctness. However, the determination of what the market value actually was is a question to be reviewed on a standard of reasonableness. 116 In my view, the reviewing judge correctly identified the appropriate standard of review. However, he failed to properly apply it. 117 The Community Groups argued, and the reviewing judge agreed, that HRM breached s. 61(5)(b) of the Charter by selling the Property for less than market value. 118 With respect, I have some difficulty in following the logic of the reviewing judge’s reasons for concluding the market value of the property was $4 million. 119 The reviewing judge determined that “market value” could be informed by an appraisal, but was primarily defined by the open market: 98 An appraisal is an estimate, albeit one provided by a person with knowledge and experience in valuing property. Such estimates are often accepted, including by courts, when there is no other readily available evidence of market value. However, as the phrase suggests, “market value” is the value of a property on the market. This means the “open” market, in circumstances where there are no unique or temporary factors that may serve to drive up or down the price being offered. These circumstances are, in part at least, reflected in the different appraisal figures contained in the Colliers report. 62 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

120 His reasoning is summarized as follows: 101 Market value being the amount that a willing buyer will pay on the open market, the question is what constitutes market value in these circumstances. Obviously, one figure meeting that definition could be the actual sale price. However, there is another figure that meets the definition as well. JONO was prepared to pay $4 million for the Property “as is” in the event that there were competing bids. Council was willing to accept $3 million. I infer that Council would have accepted $4 million. Consequently, there was a willing buyer and a willing seller at a price of $4 million. JONO’s willingness to pay $4 million in the event there was a competing bid meant that it was a willing buyer at that price. By starting at $3 million, JONO was attempting to obtain the property at a price lower than it was actually willing to pay. 102 The HRM Charter provides that Council may not sell municipal property at less than market value unless the sale is to a non-profit organization. To sell the property for a price less than a willing buyer was willing to pay amounted to a sale at less than market value. In other words, the price ultimately agreed to was lower than the price the buyer had expressed a willingness to pay for the property “as is.” The HRM Charter did not permit Council to sell the property at this price in these circumstances. In these circumstances, “market value” was not the estimate, but the amount a willing buyer would pay. [Emphasis added] 121 The reasoning of the reviewing judge has a fatal flaw. There were no competing bids. A conditional bid would require adjustment downward to account for the impact of the conditions before it can be considered as comparable evidence of what a willing buyer would pay on the open market. Jono was not a willing buyer at $4 million. Jono’s Option “A” bid was for $3 million. Jono’s willingness to pay any more than that was conditional on the existence of bids higher than $3 million. In order for Jono to be a “willing buyer” at $4 million, there would have to be a competing bid of at least $3,925,000. This condition was not met and, consequently, Jono’s bid of $3 million was evidence of what a willing buyer would pay for the Property. 122 The reviewing judge’s finding that the “market value” was established by Jono’s apparent willingness to buy at $4 million misses an important point. The willingness was conditional and the condition was never fulfilled. It cannot be reflective of the open market. Jono Developments v. North End Community Health Farrar J.A. 63

123 Further, the reviewing judge’s reasons do not reveal any deference to HRM’s determination of market price. 124 In Nanaimo (City) v. Rascal Trucking Ltd., 2000 SCC 13 (S.C.C.), the Supreme Court of Canada set out the rationale for affording municipalities deference in administrative decision-making: 35 In light of the conclusion that Nanaimo acted within its jurisdiction in passing the resolutions at issue, it is necessary to consider the standard upon which the courts may review those intra vires municipal decisions. Municipal councillors are elected by the constituents they represent and as such are more conversant with the exigencies of their community than are the courts. The fact that municipal coun- cils are elected representatives of their community, and accountable to their constituents, is relevant in scrutinizing intra vires decisions. The reality that municipalities often balance complex and divergent interests in arriving at decisions in the public interest is of similar importance. In short, these considerations warrant that the intra vires decision of municipalities be reviewed upon a deferential standard. 125 Determining “market price” is not as simple as identifying the highest bid. The bids that were received for the Property differed not only in price offered, but also in terms of the type of development proposed and conditions of sale. In order to compare the bids, the Municipality calculated a net present value of the bids, adjusted for the estimated carrying costs, forgone taxes and risk associated with each proposal. The net present value of the four bids ranged between $2,665,108 and $3,242,956. 126 In addition to the net present value of the bids, it was reasonable for HRM to consider, as it did, the different development proposals, conditions of sale, and levels of experience for managing the development and/or operation the property. 127 In effect, the reviewing judge limited the “reasonable range” of market value to bids that were equal to or higher than the highest bid submitted in the RFP. 128 If HRM was unreasonable for selecting anything but the highest bid, notwithstanding the other considerations and interests engaged by the disposal of a surplus municipal property, then there is no discretion or deference given to the HRM decision. If the definition of “market value” is limited only to the highest bid, HRM would be required to choose only the highest bidder or risk breaching the Charter. The definition of “market value” must be sufficiently broad to allow HRM to choose between a 64 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

range of bids based on factors that related to HRM’s jurisdiction and functions as set out in the Charter. 129 HRM’s decision to sell to Jono “as is” was justified and supported by the record. 130 The reviewing judge appears to ignore what I consider to be the very logical conclusion put forward in the Staff Report when it recommended the sale at $3 million. I will excerpt the relevant portions of that Staff Report: The recommended offer of $3M by Jono Developments Limited is without limiting conditions. This offer will facilitate the sale of the subject property within a reasonable period following Council’s approval for the award. An alternative offer that Jono Developments Limited presented was contingent on the approval of a Development Agreement with a value of $3,750,000.00. however, after considering the time value of money, municipal property holding costs, lost property tax revenue and a 5% contingency for the risk inherent in the process, the stronger financial return in today’s dollars is the recommended unconditional offer of $3M. 131 The Staff Report then goes on to value Jono’s total net present value offer at $3,110,965.00. 132 This is against the backdrop of the Colliers’ Report which estimated that the current market value of the property as is was $1 million. The market value, if it was partially redeveloped, was $3 million and the prospective market value if the entire property redeveloped was $4.3 million. 133 In these circumstances, Jono was offering the equivalent of approximately $3.1 million for the property “as is” which Colliers had estimated to be worth $1 million. 134 The logic of HRM’s decision to sell to Jono at $3 million is borne out by the record. There were no other bidders over and above $3 million. That in and of itself serves as the best evidence of market value of the property. 135 In my view, the reviewing judge’s failure to properly consider HRM’s rationale for selling to Jono at the $3 million price and his reliance on the conditional bid in determining the market price was an error. Jono Developments v. North End Community Health Farrar J.A. 65

Issue #3 Did the reviewing judge err by ordering Jono to pay costs to the Community Groups? 136 This issue has become somewhat of a moot point as I am prepared to allow the appeal and set aside the order of MacAdam, J. As a result, I would order that any costs paid by Jono and HRM to the Community Groups be returned. 137 I would also order that Jono be entitled to costs in the amount of $15,000 in the proceedings below plus disbursements to be agreed upon or taxed, payable equally by the respondents. I would not award any costs to HRM in the proceedings below. 138 Finally, I would award costs of $6,000 plus disbursements as agreed upon or taxed to Jono by the Community Groups on this appeal. I would not award any costs to HRM on this appeal. 139 However, had it not been for overturning the decision of the reviewing judge, I would not have interfered with the costs decision below. 140 The reviewing judge has a broad discretion in awarding costs under Rule 77. We will not interfere unless he relied on a wrong principle of law, or his decision is “so clearly wrong as to amount to a manifest injustice” (Wile v. Barkhouse, 2011 NSCA 50 (N.S. C.A.), ¶11). 141 Jono was added as an Interested Party to these proceedings as required by the Civil Procedure Rules. Jono participated throughout the proceedings filing submissions and making representations to the court. It was in every respect a full party to the proceedings. 142 Although I have some sympathy for the position put forward by Jono that costs should not have been awarded against them in any event of the cause below because it was, essentially, an innocent party protecting its rights, I am not satisfied that the reviewing judge applied a wrong legal principle in reaching his conclusion or that a manifest injustice would result. As a result, absent allowing the appeal, I would not have interfered with the costs award below.

Conclusion 143 The appeal is allowed, the order of MacAdam, J. dated January 24, 2013, is set aside. The costs paid by HRM and Jono to the Community Groups shall be repaid to HRM and Jono. Jono shall have costs of the proceedings below in the amount of $15,000 plus disbursements to be taxed or as agreed upon. 66 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

144 Jono shall have its costs of this appeal in the amount of $6,000 plus disbursements payable by the Community Groups. 145 There shall be no costs awarded to HRM in the proceedings below or on this appeal.

MacDonald C.J.N.S. (dissenting): Background 146 I accept my colleague Farrar J.A.’s thorough review of the facts and issues at play in this matter. I also agree with a good portion of his legal analysis. For example, I agree that the Municipality owed the respondent Community Groups a duty of fairness in the circumstances and that the (breached) policy impacted that duty. As my colleague suggests, this is so despite the fact that the Community Groups were unaware of the policy at the time they submitted their proposals. In other words, the mere passage of the policy created a legitimate expectation that it would be honored. At the same time, I also agree that this policy breach should not automatically lead to a breach of the duty of fairness. Instead, it was one of several factors (albeit significant) to be considered in the entire circumstances of this case. 147 I also agree with my colleague on the secondary issues, namely, that the Municipality did not sell the land to Jono below market value (contrary to its Charter) and that it was legitimate for the reviewing judge to award costs against the developer, even though it was not part of the main dispute between the Municipality and the Community Groups. 148 However, I disagree with my colleague’s ultimate conclusion that the Municipality met its duty of fairness to the Community Groups. I do so for the following reasons. 149 First of all, I do not accept my colleague’s assertion (at ¶54) that the motions judge “did not conduct his own [Baker] analysis or indicate where on the spectrum he believed the duty fell”. In my view, the motions judge was abundantly aware of his obligation to consider the Baker v. Canada (Minister of Citizenship & Immigration) [1999 CarswellNat 1124 (S.C.C.)] factors. In fact, he enunciated them from each party’s perspective. But, for him, the Municipality’s failure to follow its policy was an overriding factor that, on its own, resulted in a breach of its duty of fairness. In other words, finding one factor to be dispositive of an issue does not equate to a failure to conduct an analysis. Instead, his analysis was simplified because of the dominance of this one factor. Jono Developments v. North End Community Health MacDonald C.J.N.S. 67

150 That said, regardless of the judge’s approach to this issue, and as my colleague correctly observes, it ultimately falls to us to decide if the Mu- nicipality breached its duty of fairness. My colleague is convinced that the Municipality met its duty. However, as I will explain, I am convinced that it did not. 151 I begin with this basic premise. The policy (although honoured in the breach) at a minimum recognized that non-profit community groups, such as the respondents, serve a positive purpose within the community. This would therefore command, at the very least, a reasonable chance of success when submitting proposals. Yet, in my view, the impugned process offered these groups little, if any, hope. In fact, I need look no further than the evaluation material and corresponding summary sheet to see that their efforts appeared doomed from the get-go: Profit Non Profit Criteria Max Jono Develop- United Mythos North Mic- Rich- Score ments Ltd. Gulf End mac ard Health Preston Centre Centre for Ex- cellence Option Option AB Understanding 30 25 25 15 15 25 17 10 Alignment to HRM Vision, Objectives for site Qualifications/ 25 21 21 18 17 20 15 5 Experience Ca- pability, Deliv- ery & Schedule Financial Capa- 25 23 23 20 20 18 12 5 bility Subtotal 80 69 69 53 52 63 44 20 Financial 20 19 20 19 16 0 0 0 Total 100 88 89 72 68 63 44 20 152 Consider the four categories, beginning with the “financial” compris- ing 20%. It should come as a surprise to no one that the Community Groups got zeros in this category. They are not investors. This is a clear example of how the policy breach jeopardized the Community Groups’ 68 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

chances. In clear language, the policy directed that proposals from non- profit groups be assessed separately and in advance. Here, by comparing them directly using this scoring sheet, the non-profit groups started a full 20 points behind Jono, the successful for-profit competitor. 153 Then consider the “financial capability” for another 25%. Here again, the policy breach manifests itself with the non-profit groups scoring significantly lower. By their very mandate, non-profit groups will score lower than for-profit groups in this category. Thus, combining these two categories, we see the non-profit groups at a major disadvantage for almost half of the available points. Furthermore, there is nothing in the remaining two categories to counter this virtually insurmountable disadvantage. 154 As well, it is instructive to consider the scoring scheme for the two other schools included in this request for proposals. Specifically, where St. Patrick’s Alexandra had 45 combined points at play for these two categories, Gordon Bell and West Chezzetcook had only 40 and 30 re- spectively. So, for reasons unclear from the record, there was even less hope for non-profit groups to acquire St. Patrick’s Alexandra. 155 Also noteworthy is the concluding paragraph of the request for proposal’s backgrounder entitled “Added Value for Profit Organizations”: HRM is interested in maximizing the value of expenditures as it re- lates to achieving additional value that would further benefit HRM and its operation, as well as its community of citizens and their tax based funding. As such, proponents are encouraged to consider, develop and propose added value concepts, programs, components and the like that would further enhance the proposed acquisition represented in this RFP. Remember, when making your submission, these properties have been enjoyed by many HRM residents; As such, it will be important to showcase how your group will incorporate the “added value” concept. This invites for-profit organizations to incorporate community enhance- ment initiatives into their proposals as opposed to strictly commercial offerings. Although no points were specifically designated for such initiatives, this enticement is clearly designed to give for-profit proponents a leg up over non-profit groups. This was not lost on at least one councillor on the evening of the vote: COUNCILLOR SLOANE: ...So I’d like to know why we have a process that basically gives a proponent for profit an actual... actual Jono Developments v. North End Community Health MacDonald C.J.N.S. 69

bonus points for including not-for-profit. But if you’re not-for-profit, you don’t get any bonus points. This whole RFP thing seems to be a little odd, Your Worship, and I’m just wondering if that could be explained to me, of why we give bonuses to those that have money but we don’t give bonuses to those that are actually doing work in the community. MAYOR KELLY: Could we have staff, please? MR. STICKINGS: Thank you, Your Worship, through the councillor. In the process there are no bonus points issued to a private sector proponent for offering not-for-profit in this particular case. Their proposal came forward with affordable housing and a strong community consultation component. Those were not mandatory. COUNCILLOR SLOANE: Well, actually, in your package, your RFP package, it states on page 12, if I’m not mistaken... that it talks about added value and that a person can seem to be given... I don’t know if it’s points or just consideration, but it’s there. So I’m just... I’m concerned that here we have for-profit and a not- for-profit bidding on the same thing, going down the same road, when we know that one is being given added value, as they call it, and the other isn’t. And why are we putting not-for-profits and profits together when we have an actual way in which we do business that I just showed you on the Elmo? That shows that we’re supposed to be following a policy and a means to go forward by first looking at the community first and then going out, if no one wants it in the community. I’m very concerned that we’re not following our own process here. MAYOR KELLY: Staff, respond, please. MS. TEMPLE: Thank you, Your Worship. To Councillor Sloane, there is added to the RFP a section called “value added”, and that is to ask the for-profit sector ... and that could also apply to non-profit groups as well. Not exclusive. VOICE: (inaudible — mic off) MS. TEMPLE: Some non-profit groups may be financially quite capable of putting in a competing offer. I would also point out in the scoring schedule the least points are awarded for the financial offer. In this case, it was 20 out of 100 points. So really, the weighting of the scoring is more to the intent of the proposal and the broader public benefit. COUNCILLOR SLOANE: But how can you actually weigh a non- profit to a for-profit? A for-profit can walk into a bank and say, “I 70 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

need a loan because I plan on doing this, this, and this.” A non-profit actually has to raise money, maybe sell their building so that they can actually invest in something else. MS. TEMPLE: Through Your... COUNCILLOR SLOANE: I don’t think they’re equal. MS. TEMPLE: Through Your Worship to the councillor, every effort is made to look at the... not only the programing merits of the non-profit proponents, if there are any, but also their financial status. In this particular case, the RFP did ask for the submission of financial statements by the non-profit group. This was for us to assess their financial abilities. All of them had the opportunity to approach a bank or a funding agency. They could demonstrate that ability. 156 Furthermore, this document formed the only basis of the staff report to Council recommending Jono as the successful candidate. In short, this flawed process, in my view, left the non-profit groups with no realistic chance of success. 157 With this background, let me now turn to the guiding Baker factors. I will use my colleague’s approach (at ¶54 to 104) as a foundation, since I agree with much of what he offers.

The Baker Factors The nature of the decision making process 158 I accept my colleague’s conclusion that this factor attracts a moderate level of fairness.

The nature of the statutory scheme 159 I agree that this attracts a significant level of fairness.

Importance of the decision to those affected 160 My colleague acknowledges, and I agree, (at ¶58-59) that this decision was important not just to the respondent Community Groups but for the broader community. He would attach a “moderate” level of fairness. I am prepared to take judicial notice that the work done by these groups is vital to the health and well-being of any vibrant community. I would attach a heightened level of fairness. Jono Developments v. North End Community Health MacDonald C.J.N.S. 71

Legitimate expectations of those challenging the decision 161 This consideration reflects the main issue on appeal and my colleague has offered a very detailed analysis of the legal principles engaged. He concludes with this: ¶102 To conclude on this factor, the Procedure gave rise to reasonable expectations on the part of the parties but is not determinative of the duty of fairness required in this case. The reasonable expectations is just one factor to be considered in the formulation of the duty of fairness. I will now turn to the fifth factor discussed in Baker. 162 As noted, I agree that this consideration is but one factor to be considered. However, in my view, it is an important one where the respondents had a right to expect meaningful participation. I would attach a heightened degree of fairness to this category.

Decision maker’s own choice of procedures 163 I accept that this final factor attracts a moderate level of fairness for the reasons articulated by my colleague (at ¶103-104).

Conclusion 164 My colleague, following his detailed application of the Baker factors, settles on this duty owed by the Municipality to the Community Groups: ¶105 The foregoing analysis suggests that a significant degree of fairness was owed to the Community Groups, which included participation in the disposal process. I agree with Jono’s submission that the duty owed to the Community Groups amounted, in the circumstances, to an opportunity to advance a proposal and to have the proposal considered by HRM on criteria other than simply the price offered for the property. 165 Of course I agree that a “significant degree of fairness” was owed here in light of the breached policy. However, my colleague’s parameters extend only to “an ability to participate” and to be judged “on criteria other than simply the price”. In my view, that does not go far enough. Instead, as I have explained above, the groups deserved a right to meaningful participation in the process and to not have a score card stacked against them. This they were denied. 72 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Disposition 166 For all these reasons, I would dismiss the appeal with costs to the respondent Community Groups. Appeal allowed; order set aside. Toronto District School Board v. Toronto (City) 73

[Indexed as: Toronto District School Board v. Toronto (City)] Toronto District School Board, Applicant (Appellant) and The City of Toronto, Respondent (Respondent on Appeal) and Harbord Village Residents Association, Intervenor Ontario Superior Court of Justice (Divisional Court) Docket: Toronto 299/14 2014 ONSC 5494 Then, Aston, Swinton JJ. Heard: August 22, 2014 Judgment: September 30, 2014 Municipal law –––– Zoning — Judicial interpretation of zoning by-laws — Interpretation — Accessory use –––– City’s chief building officer determined that exemption in by-law did not permit proposed use of one of school board’s secondary schools where private company would refurbish and operate sports recreational facility on school property and share facility with school — Board appealed — Application judge held that officer’s decision was reasonable and appeal was dismissed — Board appealed — Appeal dismissed — Application judge erred in interpretation of exemption in by-law — There were no words in by-law that indicated that teaching or instruction must be delivered by employees or agents of board in order for exemption to apply — Application judge erred in law in focusing on whether proposed activity was carried out by board employees or on behalf of board when issue was whether proposed use was only for teaching or instructional purposes — Use must only be for teaching or instructional purposes or accessory to those purposes — Officer’s finding that bulk of company’s use would not include instructional component was reasonable — Proposed use did not fall within exemption because it was not only for teaching or instructional purposes — Company’s use could not be said to be naturally or normally incidental to school’s use of facilities — Application judge properly upheld officer’s decision. Cases considered by Swinton J.: Aon Inc. v. Peterborough (City) (1999), 1999 CarswellOnt 924, 96 O.T.C. 34, 1 M.P.L.R. (3d) 225, [1999] O.J. No. 1225 (Ont. Gen. Div.) — referred to Berjawi v. Ottawa (City) (2011), 2011 CarswellOnt 438, 2011 ONSC 236, 79 M.P.L.R. (4th) 280, [2011] O.J. No. 379 (Ont. S.C.J.) — followed 74 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Doublerink Arenas Ltd. v. North York (City) Chief Building Official (1996), 1996 CarswellOnt 2680, 33 M.P.L.R. (2d) 158, 9 O.T.C. 172 (Ont. Gen. Div.) — distinguished Greater Victoria School District No. 61 v. Oak Bay (District) (2006), 264 D.L.R. (4th) 100, 51 B.C.L.R. (4th) 288, 2006 BCCA 28, 2006 CarswellBC 91, 18 M.P.L.R. (4th) 43, 221 B.C.A.C. 254, 364 W.A.C. 254 (B.C. C.A.) — referred to Ottawa (City) v. Ottawa (City) Chief Building Official (2003), 2003 CarswellOnt 5280, 45 M.P.L.R. (3d) 29, 180 O.A.C. 48, [2003] O.J. No. 4530 (Ont. Div. Ct.) — followed St. Mary’s Cement Inc. v. Clarington (Municipality) (2012), 356 D.L.R. (4th) 448, 299 O.A.C. 357, 2012 ONCA 884, 2012 CarswellOnt 15841, 5 M.P.L.R. (5th) 89, 72 C.E.L.R. (3d) 1 (Ont. C.A.) — referred to Statutes considered: Building Code Act, 1992, S.O. 1992, c. 23 s. 25 — referred to s. 26 — considered Planning Act, R.S.O. 1990, c. P.13 Generally — referred to s. 34(1) — considered

APPEAL by school board from judgment reported at Toronto District School Board v. Toronto (City) (2014), 25 M.P.L.R. (5th) 140, 2014 ONSC 3605, 2014 CarswellOnt 8016 (Ont. S.C.J.), dismissing board’s application to establish recreational facility on property of high school.

Gordon Petch, Zaid Sayeed, for Applicant / Appellant Kristen Franz, Nicholas Rolfe, for Respondent / Respondent on Appeal Tim Gleason, Sean Dewart, for Intervenor

Swinton J.:

1 The Toronto District School Board (“the Board”) appeals from the decision of Corbett J. (“the application judge”) dated June 13, 2014, in which he dismissed the Board’s appeal from a decision of the City of Toronto’s Chief Building Official (“CBO”). The CBO had determined that an exemption found in s. 11(1)2 of City of Toronto By-law 438-86 (“the By-law”) did not permit a proposed use of one of the Board’s secondary schools whereby a private company would refurbish and operate a sports recreational facility on the school property and share the facility Toronto District School Board v. Toronto (City) Swinton J. 75

with the school. The application judge held that the decision of the CBO was reasonable. 2 At issue in this appeal is the proper interpretation of the exemption in the By-law and its application to the facts in evidence. Although I do not agree with the interpretation of the By-law given by the application judge, I would nevertheless dismiss the appeal, as the decision that the exemption does not apply to the Board’s proposal is amply supported by the evidence.

Factual Background 3 In September 2013, the Board submitted an application to the CBO for Preliminary Project Review (“PPR”) of a proposed sports facility to be located on the property of Central Technical School (“the School”). The application was submitted on behalf of the Board by the principal of Razor Management Inc. (“RMI”), a private company. 4 The Board intends to enter into a 20 year agreement with RMI whereby RMI will remediate the sports field of the School through de- contamination of polluted ground, installation of artificial turf on the playing field, resurfacing of the track, installation of an inflatable dome (to be inflated from November to April), and construction of a clubhouse containing change rooms, washrooms and office space. RMI will maintain and manage the facility without cost to the Board. 5 The School will have exclusive use of the facilities from 7 AM to 5 or 6 PM on school days during the school year. RMI will have the use of the facilities from 5 or 6 PM to midnight on school days and all day on school holidays, weekends and during the summer months. RMI plans to charge a fee to individuals and groups who wish to use the sports field for activities such as adult and children’s soccer, football and frisbee. According to the evidence, the School will have use of the facilities approximately 30% of the time and RMI 70% of the time. 6 The area in which the School is located is zoned R4. Along with residential uses, public schools are a permitted use. Section 11(1)2 of the By-law contains a “permissive exception” applying to school board lands that allows the Toronto District School Board and the Toronto Catholic District School Board to further develop land owned by them under certain conditions without the need to comply with other requirements of 76 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

the By-law relating to matters such as height, massing, setbacks and parking. The exemption states: Notwithstanding anything hereinbefore contained, none of the provisions of this by-law or of any restrictive by-law applies: (1997-0422) 2. to any land, building or structure that, on June 16, 1986, was owned by the Board of Education for the City of Toronto or the Met- ropolitan Separate School Board as long as the land, building or structure is used only for teaching or instructional purposes, including purposes accessory thereto, provided the land, building or structure, and any addition thereto, is or was originally constructed for these purposes (425-93) [emphasis added] ... 7 The By-law also defines “accessory” as Where used to describe a use, building or structure, means that the use, building or structure, is: (i) naturally and normally incidental, subordinate in purpose or floor area, or both, and exclusively devoted to a principal use, building or structure; and (1995-0190) ... 8 In a decision dated September 13, 2013, a Zoning Examiner determined that the Proposal did not satisfy the requirement that the proposed use be “only for teaching or instructional purposes”, nor was it accessory to those purposes, given that the proposed use was a private recreational facility. The decision stated, The proposed air supported structure over the existing playing field and new permanent building, intended for private use after school hours, will not be solely dedicated to educational purposes. 9 The Board then sought approval for a minor variance from the Com- mittee of Adjustment, which was refused in April 2014. That decision is under appeal to the Ontario Municipal Board. 10 In the meantime, the Board commenced proceedings in the Superior Court of Justice in February 2014, seeking a declaration that the exemption in the By-law applied to the Proposal. In materials filed for the court proceeding, Mario Angelucci, Director and Deputy Chief Building Of- ficer for the City of Toronto, Toronto and East York District, filed an affidavit dated April 28, 2014 stating that he had reviewed the Proposal, and he confirmed the decision of the Zoning Examiner. Toronto District School Board v. Toronto (City) Swinton J. 77

The Decision of the Application Judge 11 Although the court proceeding commenced as an application for a declaration, the application judge characterized the proceeding as an appeal from the CBO under s. 25 of the Building Code Act, 1992, S.O. 1992, c. 23. After granting an extension of time to appeal, he heard and dismissed the appeal. 12 The application judge interpreted the exemption as applying only where the land, building and structure owned by the Board is used for teaching or instructional purposes delivered by the Board and its employees or by those working on behalf of the Board (Reasons, para. 26). 13 While the application judge did not expressly state that RMI’s proposed use was not a “purpose accessory thereto”, it is evident from his reasons that he concluded that the proposed use was not accessory to teaching and instructional purposes. For example, in paras. 35 and 36, he discussed “non-school use of school facilities”, and concluded that it was reasonable to interpret the exemption as not prohibiting incidental use of school facilities that would not change the overall nature of the premises as a school. Earlier in his reasons, when he discussed the summary and disposition of the application, he had stated that “[c]ommercial exploita- tion of TDSB facilities is not a ‘school use’ of TDSB premises”. While incidental commercial use might be permitted, RMI’s proposed commercial use was not an “incidental use” of the Board’s facilities. Accord- ingly, the application judge concluded that the CBO’s decision that the exemption did not apply was reasonable.

The Issues on Appeal 14 An appeal lies to the Divisional Court pursuant to s. 26 of the Build- ing Code Act. 15 On this appeal, the appellant argues that the application judge erred in interpreting the exemption to apply only where teaching and instructional activities are carried out by or for the Board. In doing so, he is said to have improperly interpreted the zoning by-law to regulate the “user”, rather than the “use” of the property. As he had concluded in paragraph 23 of his Reasons that the activities to be carried out by RMI were of the same “nature”, “quality” and “virtue” and for the “same essential purposes” as the Board’s activities in the facilities, it follows that the exemption should apply. As well, the appellant argues that the application judge erred in failing to provide any reasons why the RMI use was not an accessory use, as permitted by the By-law. 78 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

16 The City of Toronto also takes issue with the interpretation of the exemption as applying only where teaching and instructional activities are carried out by or for the Board. However, the City argues that the decision is, nevertheless, correct, because the activities proposed by RMI are not “only teaching or instructional” in nature and purpose. Rather, RMI proposes to operate a private recreational facility. Moreover, the City argues that the application judge did deal with the “accessory use” argument, as he held that the commercial activity of RMI was not an incidental use of the School property, as required by the definition of accessory use in the By-law. 17 The intervenor, Harbord Village Residents Association, argues that the legal interpretation of the exemption adopted by the application judge was correct, in that the proposed use must be for school purposes delivered by the named school boards in order for the exemption to apply. In the alternative, the intervenor argues that the application judge improperly overruled the CBO’s finding of fact that a large percentage of the activity contemplated would not be “only” for teaching and instructional purposes. Hence, the exemption does not apply.

The Standard of Review 18 The application judge correctly held that the standard of correctness applies with respect to questions of law determined by the CBO. How- ever, with respect to questions of fact and mixed fact and law, the decision is to be reviewed on a standard of reasonableness (Berjawi v. Ottawa (City), [2011] O.J. No. 379 (Ont. S.C.J.) at para. 12). 19 On an appeal from the decision of the application judge, a standard of correctness applies with respect to questions of law. With respect to questions of fact, the standard is that of palpable and overriding error. With respect to questions of mixed fact and law, the standard is palpable and overriding error unless there is an extricable legal principle (Ottawa (City) v. Ottawa (City) Chief Building Official, [2003] O.J. No. 4530 (Ont. Div. Ct.) at paras. 92).

Did the application judge err in his interpretation of the exemption? 20 The exemption in the By-law applies to lands, building or structures of the Board that were owned by it on June 16, 1986 if the land, building or structure is “used only for teaching or instructional purposes”. While the Zoning Examiner spoke of “educational purposes” in his decision and Toronto District School Board v. Toronto (City) Swinton J. 79

the application judge spoke of “school use”, the words used in the By- law are “only for teaching or instructional purposes.” 21 The application judge held that the teaching or instructional activities must be delivered by teachers or other employees of the Board or those acting on behalf of the Board. However, there are no words in the By- law indicating that the teaching or instruction must be delivered by employees or agents for the Board in order for the exemption to apply. 22 Indeed, the interpretation adopted by the application judge is inconsistent with previous court rulings that a municipality does not have jurisdiction to adopt a zoning by-law restricting the “user” of the lands, rather than the use, unless the legislation clearly permits such a restric- tion of a specific user (see, for example, Greater Victoria School District No. 61 v. Oak Bay (District), 2006 BCCA 28 (B.C. C.A.) at para. 25). There are no provisions of the Planning Act, R.S.O. 1990, c. P.13 and, in particular, s. 34(1) of that Act (the power to adopt zoning by-laws), per- mitting such discrimination among users. 23 In my view, the application judge erred in law in focussing on whether the proposed activity was carried out by Board employees or on behalf of the Board. Rather, the question to be determined, in the application of the By-law, was whether the proposed use was “only for teaching or instructional purposes.” 24 In interpreting a by-law, as with other statutes, one looks first to the ordinary meaning. While the words “teaching or instructional purposes” are not defined by the By-law, the Oxford English Dictionary, 4th ed., defines “teaching” as “the imparting of information or knowledge; the occupation, profession or function of a teacher.” “Instruction” is defined as “act of instructing; teaching, education; the knowledge etc. taught; an instructive rule, a precept; information given to a person about a particular fact; a direction, an order.” 25 The words of the By-law are clear: the use of the school site must be only for teaching or instructional purposes. There is no requirement that the teaching or instruction must be delivered by or for the Board. 26 The appellant also argues that the exemption in the By-law should be interpreted in a manner consistent with the Toronto Official Plan, which 80 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

provides in section 3.2.2.4 that shared use of school facilities will be encouraged. It states, The addition of other uses on school sites, including other community service facilities, residential unit or office space, is permitted provided all uses can be adequately accommodated. 27 It is true that Official Plans can assist in the interpretation of zoning by-laws, given that zoning by-laws are the means to implement official plans (St. Mary’s Cement Inc. v. Clarington (Municipality), 2012 ONCA 884 (Ont. C.A.) at para. 21). However, the zoning by-law is the applicable law to be applied (Aon Inc. v. Peterborough (City) (1999), 1 M.P.L.R. (3d) 225 (Ont. Gen. Div.)) at para. 18; Doublerink Arenas Ltd. v. North York (City) Chief Building Official (1996), 33 M.P.L.R. (2d) 158 (Ont. Gen. Div.) at para. 6). 28 Here, the By-law is clear: the use must be only for teaching or instructional purposes or accessory to those purposes.

Does the exemption for teaching or instructional purposes apply? 29 The appellant argues that the application judge made a finding of fact that the activities to be carried out by RMI had the same essential purposes as those carried out by the Board (see paragraph 23 of his Rea- sons). Accordingly, the appellant argues, the exemption should apply. 30 In my view, the application judge did not make a finding of fact that RMI’s use was only for teaching or instructional purposes. At most, the comment in paragraph 23 was obiter dicta, and not a finding of fact, for he stated in paragraph 24 that RMI’s use was not a “school use”. He then stated that this finding was beside the point, as “the issue is not whether the Proposal would be a ‘school use’ of the property, or some other kind of ‘use’” but rather whether the exemption applied. 31 In any event, if the application judge did make a finding that the activities of RMI were “only teaching or instructional” in purpose, he made a palpable and overriding error of fact. When one looks at the application filed by RMI and the information provided respecting the similar operation of an inflatable dome at Monarch Park Collegiate, it is evident that the proposed activities are not “only” for teaching or instructional purposes. It is true that there may be an instructional component to children’s sports such as soccer. However, one cannot characterize the adult soccer and frisbee leagues as having an instructional purpose. Nor does individual payment for use of the track suggest there is any instructional Toronto District School Board v. Toronto (City) Swinton J. 81

component. Rather, much of RMI’s proposed use is for private recreational activities. 32 The CBO’s finding that the bulk of the RMI use would not include an instructional component was a reasonable finding of fact, based on the information provided to the City. Given this finding of fact, it follows that the proposed use did not fall within the exemption, because it was not “only” for teaching or instructional purposes. 33 The remaining question to be addressed is whether the proposed use has a purpose accessory to teaching or instructional purposes.

Did the application judge err in holding that the proposed use was not accessory? 34 To qualify as an accessory purpose, the proponent must satisfy three criteria: the use is naturally and normally incidental; it is subordinate in purpose or floor area, or both; and it is exclusively devoted to a principal use, building or structure. The CBO held that the private use of the facilities for recreational purposes approximately 70% of the time was not a natural use of school property nor normally incidental to school use. Therefore, it was not a permissible accessory use. 35 The application judge held that RMI’s proposed commercial use was not “incidental” to school use, and therefore, the CBO’s conclusion was reasonable. While the application judge made no explicit reference to the definition of accessory use in the By-law, it is evident that he was applying the proper test. 36 Given the evidence, RMI’s use cannot be said to be “naturally and normally incidental” to the School’s use of the facilities. A commercial recreational use of the type proposed is not a natural or normal use of school property. Nor is the use incidental, given the commercial recreational use would occupy 70% of the time the facility is in operation. In- deed, the evidence shows that the Monarch Park facility, which is somewhat smaller than the facility proposed here, has 10,000 users a week. The School has 1,800 students. 37 The appellant relies on Doublerink Arenas Ltd., cited above, to support its argument that the proposed use is incidental. That case involved the use of property owned by York University for the construction and operation of a commercial ice rink facility that would be shared by a private company and the university. The application judge in that case held that the commercial use was permitted by the applicable by-law, a 82 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

by-law that is differently worded from the By-law in the present case. Notably, among uses explicitly permitted on York’s lands was “accessory commercial use to a university use”. “Accessory use” was defined as a “use naturally and normally incidental to, subordinate to and devoted exclusively to the main use of the premises.” 38 Unlike the York by-law, there is no reference to a permitted commercial use of Board lands in the present By-law. The CBO reasonably concluded that the private recreational use proposed was not naturally and normally incidental to the teaching and instructional activities carried out by the School on the site, nor was it naturally and normally incidental to school use. Accordingly, the application judge properly upheld the CBO’s decision.

Conclusion 39 For these reasons, the appeal is dismissed. 40 The intervenor does not seek costs and none are awarded to it. 41 If the appellant and the City cannot agree on costs, counsel may make brief written submissions on costs through the Divisional Court office within 21 days of the release of this decision. Appeal dismissed. JUNVIR Investments Ltd. v. Mun. Property Assessment Corp. 83

[Indexed as: JUNVIR Investments Ltd. v. Municipal Property Assessment Corp., Region No. 09] Junvir Investments Ltd., Appellant and Municipal Property Assessment Corporation and the City of Toronto Ontario Superior Court of Justice (Divisional Court) Docket: 204/14 2014 ONSC 5471 Perell J. Heard: September 16, 2014 Judgment: September 22, 2014 Municipal law –––– Municipal tax assessment — Practice and procedure on assessment appeals and objections — Right of appeal — Question of fact or law –––– Applicant owned four properties where it operated independent grocery store — Grocery store building was located on one property and other properties comprised parking lot — Assessment review board assessed current value of applicant’s properties at $4,288,000 for 2008 — Applicant applied for leave to appeal board’s decision — Leave to appeal granted — It was arguable that board decided current value of property by reference to value at which most similar land in vicinity was assessed — Result of limiting itself only to most similar properties was that board assessed independent grocery store at substantially higher amount than grocery stores associated with food chains — Approach would arguably be legal error because board had to have regard to similar lands and not just to most similar land — There was good reason to doubt correctness of board’s decision on legal issue — Arguably, board changed calculus of s. 44 of Assessment Act from comparing subject property to similar properties to comparing subject property to “properties approaching identical (near equivalency)” — This was methodological change — It was difference in kind, not factual matter of degree — Arguably, this was error of law — Matter was of sufficient importance to justify granting leave to appeal. Cases considered by Perell J.: A. Merkur & Sons Ltd. v. Ontario Regional Assessment Commissioner, Region No. 14 (1978), 1978 CarswellOnt 504, 7 M.P.L.R. 191, 91 D.L.R. (3d) 764, 21 O.R. (2d) 797, 9 O.M.B.R. 158 (Ont. C.A.) — considered Mullabrack Inc. v. Ontario Property Assessment Corp., Region No. 16 (2000), 2000 CarswellOnt 4886, 140 O.A.C. 136, [2000] O.J. No. 4855 (Ont. Div. Ct.) — referred to 84 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Regal Stationery Co. v. Ontario Regional Assessment Commissioner, Region No. 11 (1984), 27 M.P.L.R. 239, 6 O.A.C. 227, 16 O.M.B.R. 489, 48 O.R. (2d) 152, 1984 CarswellOnt 542 (Ont. Div. Ct.) — considered Trizec Equities Ltd. v. Ontario Regional Assessment Commissioner, Region No. 27 (1988), 1988 CarswellOnt 549, 37 M.P.L.R. 175, (sub nom. Trizec Equities Ltd. v. Ont. Regional Assessment Commission, Region No. 27) 27 O.A.C. 203, [1988] O.J. No. 182 (Ont. Div. Ct.) — referred to 508306 N B Inc. v. Ontario Property Assessment Corp., Region No. 13 (Septem- ber 4, 2001), Doc. Complaint No. 1301257, [2001] O.A.R.B.D. No. 540 (Ont. Assess. Review Bd.) — referred to Statutes considered: Assessment Act, R.S.O. 1990, c. A.31 Generally — referred to s. 43.1 [en. 1997, c. 5, s. 28] — considered s. 44 — considered s. 44(2) — considered s. 44(3) — considered

APPLICATION for leave to appeal from Ontario Assessment Review Board decision reported at JUNVIR Investments Ltd. v. Municipal Property Assessment Corp., Region No. 09 (2014), 2014 CarswellOnt 11770 (Ont. Assess. Review Bd.).

Stanley M. Makuch, Matthew Schuman, for Appellant Francis X. Shea, Marc McLaren-Caux, for Municipal Property Assessment Corporation

Perell J.:

1 Junvir Investments Ltd. owns 438, 442, 444, and 446 Summerhill Av- enue in the City of Toronto, where it operates an independent grocery store known as “Summerhill Market”. The grocery store’s three-storey building is located at 446 Summerhill Avenue, and Junvir Investments’ other properties comprise the parking lot. Pursuant to the Assessment Act, R.S.O. 1990, c. A.31, in an Amending Decision dated August 26, 2014, the Assessment Review Board determined the current value of Junvir In- vestments’ four properties to be $4,288,000 for the taxation year 2008. 2 Junvir Investments submits that the correct current value is $1,784,171 and that the Board erred in its current value assessment. It seeks leave to appeal to the Divisional Court to have the Board’s decision set aside. JUNVIR Investments Ltd. v. Mun. Property Assessment Corp. Perell J. 85

3 Pursuant to s. 43.1 of the Assessment Act, an appeal lies to the Divi- sional Court, with leave of the Divisional Court, on a question of law. The motion now before the Court is Junvir Investments’ motion for leave to appeal on a question of law. 4 The test for leave to appeal a decision of the Board is that the Court must be satisfied that: (1) there is some reason to doubt the legal correctness of the Board’s decision; and (2) the appeal involves an important question of law; Canadian National Railway Company v. Municipal Pro- perty Assessment Corporation., 2013 ONSC 7802 (Div. Ct.) at paras. 3- 4; Mullabrack Inc. v. Ontario Property Assessment Corp., Region No. 16, [2000] O.J. No. 4855 (Ont. Div. Ct.). 5 Junvir Investments submits that the Board erred in law in determining the current value of the property as required by s. 44(2) of the Assess- ment Act, which provides that (with emphasis added): “For taxation years before 2009, in determining the value at which any land shall be assessed, reference shall be had to the value at which similar lands in the vicinity are assessed.” Junvir Investments submits that the Board also erred in law by contravening s. 44(3) of the Act that requires that the value “be equitable having reference to similar real properties in the vicinity”. 6 To be more precise, the Board’s alleged error concerned how it had reference to “similar lands in the vicinity.” 7 At the hearing before the Board, the parties agreed that the current value for the Summerhill Market should be determined by applying a capitalization rate of 9.5% to a fair market rental (FMR) for the subject property to be determined by reference to comparable rented properties in the vicinity. At the hearing, the Municipal Property Assessment Cor- poration (“MPAC”) submitted nine allegedly comparable rented properties, one of which was a grocery store known as Pusateri’s. The other alleged comparables, all rented commercial premises, were six Shopper’s Drug Marts, a bank, and a restaurant. At the hearing, Junvir Investments submitted nine comparable rented properties, all of which were grocery stores, including an independent grocery store known as Sun Valley Market. 8 Although it had ten grocery stores in the vicinity, in making its FMR assessment, the Board relied on just two grocery stores, Pusateri’s and 86 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Sun Valley Market. In its Reasons for Decision, the Board stated at paras. 81, 95, 97-99, with my emphasis added: 81. The parties agree that a crucial finding for the Board is the character of the real property. Having regard to the evidence and submissions of the parties, I agree with Junvir that the subject building is a purpose-built grocery store rather than a typical one-storey commercial retail property. Other than its split level operation, it has all of the physical attributes of a “typical” grocery store and functions as a grocery store...... 95. None of MPAC’s comparables are purpose-built grocery stores other than the Lawrence Avenue Pusateri’s, located on an arterial road with parking, a GLA [gross leasable area] of 10,000 sq. ft. and a FMR of $25...... 97. Junvir’s comparables are comprised of eight grocery chain stores and one independent grocery store, the Sun Valley Market. All are situated on arterial roads. Four of the comparables have much larger GLAs than the subject property and presumably have larger site areas. The Board examined the remaining comparables ... and finds the last property, the Sun Valley Market to be the most similar to the subject property. Both Pusateri’s and the Sun Valley Market have the same economic issues (economies of scale) affecting the Summerhill Market as they are not chain stores, which will affect their FMR. They are both located in predominately single-fam- ily residential neighbourhoods, have reasonably similar GLA and a FMR of $25. I find all these factors more encompassing and persua- sive than looking at the GLA and the line of “best fit” in isolation. 98. The range of FMR for the seven comparable grocery stores is $8.30 to $25. Given the economic differences between Pusateri’s and Sun Valley Market and the larger chain stores, and in the valuation methodology, the Board determines that the FMR of $25 derived from the two most comparable properties should be applied to the subject building for the 2006, 2007, and 2008 taxation years. .... 99. In finding these two properties to be the most similar, the Board is not stating that they are the same as Summerhill Market, but that they too are anomalies not captured by the GSM [“Grocery Store Model”]. The dilemma is that the subject property does not fit com- fortably into either “box” proposed by the parties. ... It is evident that a different approach is required for smaller free-standing grocery stores. JUNVIR Investments Ltd. v. Mun. Property Assessment Corp. Perell J. 87

9 Without deciding the matter, it appears to me to be arguable that what the Board did is decide the current value of the property by reference to the value at which the most similar lands in the vicinity are assessed. The result of limiting itself to only the most similar properties is that the Board assessed Summerhill Market, an independent grocery store, at a substantially higher amount than the grocery stores that were associated with food chains. 10 This approach arguably would appear to be a legal error because s. 44(2) of the Assessment Act directs the Board to have regard to “similar lands” (lands being plural) and not just to the “most similar” lands. And s. 44(3) of the Act requires that the assessment be equitable having reference to “similar real properties” in the vicinity not just to the “most similar real properties” in the vicinity. 11 If the above argument is correct, then there is good reason to doubt the correctness of the Board’s decision on a legal issue and, in my opinion, the matter is of sufficient importance to justify granting leave to appeal. 12 Relying on Regal Stationery Co. v. Ontario Regional Assessment Commissioner, Region No. 11 (1984), 48 O.R. (2d) 152 (Ont. Div. Ct.) and A. Merkur & Sons Ltd. v. Ontario Regional Assessment Commissioner, Region No. 14 (1978), 21 O.R. (2d) 797 (Ont. C.A.), the Respondent MPAC submits that the above argument is incorrect. It submits that it is a question of fact in each case what is similar real property in the vicinity of a subject property. In short, MPAC submits that the Board made no error in determining the comparable properties, which is a fact-based exercise. 13 Under the established law, the Board is obliged to have regard to the general nature, character, and function of comparable properties to determine similarity. Similarity can relate to factors such as design, size, age, amenities, construction, and location. Similarities and differences have to be determined and balanced one against the other, and once considered, the Board makes a factual finding; see: Canadian National Railway Company v. Municipal Property Assessment Corporation, supra (Div. Ct.); Trizec Equities Ltd. v. Ontario Regional Assessment Commissioner, Region No. 27, [1988] O.J. No. 182 (Ont. Div. Ct.); 508306 N B Inc. v. Ontario Property Assessment Corp., Region No. 13, [2001] O.A.R.B.D. No. 540 (Ont. Assess. Review Bd.), leave to appeal refused unreported, (28 June 2002), Court File No. 59841/01, (Div. Ct.). 88 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

14 Notwithstanding the argument of MPAC, and again without deciding the matter, which will be decided by a panel of the Divisional Court, I am not persuaded that there is not good reason to doubt the decision of the Board. 15 The point is subtle, but the outcome profound, and, in my opinion, it is arguable that what the Board did is to change the calculus of s. 44 of the Assessment Act, from comparing the subject property to similar properties to comparing the subject property to properties approaching the identical (near equivalency), which is a methodological change, a difference in kind, not a factual matter of degree, and arguably an error of law. 16 For the above reasons, I grant leave to appeal with costs reserved to the panel hearing the appeal. Leave to appeal granted. Hiscock Estate v. St. Johns (City) 89

[Indexed as: Hiscock Estate v. St. Johns (City)] Estate of Geraldine V. Hiscock, as represented by Judith Frizzell, Executrix, Appellant and City of St. Johns, Respondent Newfoundland and Labrador Supreme Court (Trial Division) Docket: 201301G1956 2014 NLTD(G) 110 Deborah J. Paquette J. Heard: December 10, 2013 Judgment: September 29, 2014 Municipal law –––– Municipal tax assessment — Valuation — Miscellane- ous –––– Property was re-zoned from “Rural, Open Space and Open Space Re- serve” to “Comprehensive Development Area”, and plan was further modified to provide for residential development for lands above 190 metre contour line — Change in value of land for municipal tax assessment purposes went from $243,100 to $5,201,600 — Upon assessment review, valuation of property for tax purposes was reduced — Executrix of estate appealed — Appeal allowed — Assessment Review Commissioner erred in law and exceeded jurisdiction in failing to accord executrix procedural fairness — Commissioner’s determination did not meet standard of correctness — Significant increase in estate property’s value was several million dollars; complexity associated with new combination of property uses captured by zoning classification; rights at stake for beneficiaries of estate; legitimate expectation of executrix that she would be assisted at hearing by senior assessor; and non-disclosure of key information, denying her opportunity to prepare for appeal, were factors for consideration regarding procedural fairness — Procedural fairness could have been addressed with postponement to permit opportunity to study property breakdowns and comparables and seek legal or other specialized representation if necessary — New hearing ordered. Cases considered by Deborah J. Paquette J.: Baker v. Canada (Minister of Citizenship & Immigration) (1999), 1 Imm. L.R. (3d) 1, [1999] 2 S.C.R. 817, 14 Admin. L.R. (3d) 173, 174 D.L.R. (4th) 193, 1999 CarswellNat 1124, 1999 CarswellNat 1125, 243 N.R. 22, [1999] S.C.J. No. 39 (S.C.C.) — followed Labatt Brewing Co. v. St. John’s (City) (2011), 2011 CarswellNfld 387, 2011 NLCA 75, 344 D.L.R. (4th) 478, 981 A.P.R. 100, 315 Nfld. & P.E.I.R. 100, 91 M.P.L.R. (4th) 6, 32 Admin. L.R. (5th) 291 (N.L. C.A.) — followed 90 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Montreal (City) v. Sun Life Assurance Co. of Canada (1950), [1950] S.C.R. 220, 1950 CarswellQue 48, [1950] 2 D.L.R. 785 (S.C.C.) — considered Moreau-Bérubé c. Nouveau-Brunswick (2002), (sub nom. Conseil de la magistrature (N.-B.) v. Moreau-Bérubé) 245 N.B.R. (2d) 201, (sub nom. Conseil de la magistrature (N.-B.) v. Moreau-Bérubé) 636 A.P.R. 201, [2002] 1 S.C.R. 249, 2002 SCC 11, 2002 CarswellNB 46, 2002 CarswellNB 47, 36 Admin. L.R. (3d) 1, (sub nom. Nouveau-Brunswick (Conseil de la magistrature) v. Moreau-Bérubé) 281 N.R. 201, (sub nom. Moreau-Bérubé v. New Brunswick (Judicial Council)) 209 D.L.R. (4th) 1, 2002 CSC 11, [2002] S.C.J. No. 9, REJB 2002-27816 (S.C.C.) — considered New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, 2008 CSC 9, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 Car- swellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9, [2008] A.C.S. No. 9 (S.C.C.) — followed Peter Kiewit Sons Co. v. Municipal Assessment Agency Inc. (2009), 285 Nfld. & P.E.I.R. 145, 879 A.P.R. 145, 2009 NLTD 13, 2009 CarswellNfld 18 (N.L. T.D.) — considered Schrader, Re (2010), 293 N.S.R. (2d) 263, 2010 NSCA 90, 2010 CarswellNS 734, (sub nom. Director of Assessment (N.S.) v. Schrader) 296 N.S.R. (2d) 263, (sub nom. Director of Assessment (N.S.) v. Schrader) 940 A.P.R. 263 (N.S. C.A.) — considered St. John’s (City) v. Hotel NFLD 82 - A Joint Venture (2003), 225 Nfld. & P.E.I.R. 323, 672 A.P.R. 323, 2003 NLSCTD 78, 2003 CarswellNfld 126, 38 M.P.L.R. (3d) 42, [2003] N.J. No. 133 (N.L. T.D.) — followed Statutes considered: Assessment Act, 2006, S.N. 2006, c. A-18.1 Generally — referred to s. 17 — considered s. 18 — considered s. 39 — considered s. 39(3) — considered s. 39(5) — considered

APPEAL by ratepayer from review of assessment of property.

Ken Byrne, for Appellant Linda Bishop, for Respondent Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 91

Deborah J. Paquette J.: Introduction 1 This appeal concerns the municipal taxation reassessment of a large tract of vacant land located at Kenmount Road in St. John’s, belonging to the Estate of Geraldine V. Hiscock. In early 2012 the City of St. John’s approved the St. John’s Municipal Plan Amendment Number 457 which re-zoned the property from “Rural, Open Space and Open Space Re- serve” to “Comprehensive Development Area — Kenmount Land Use Zones”. Two months later, Plan Number 457 was further modified to provide as follows with respect to residential development for lands above the 190 meter contour line: Section 5.1.4 Development Above the 190 Metre Contour Elevation Notwithstanding any other provisions of these Regulations, no residential development utilizing on-site water and/or sewer services shall be permitted above the 190 metre contour elevation. 2 The Estate property has five zones: Comprehensive Development Area Kenmount Road, Open Space, Rural, Residential Kenmount and Watershed. 3 The change in the value of the land for municipal tax assessment purposes was dramatic, going from $243,100.00 to $5,201,600.00. Ms. Judith Frizzell, the Executrix of the Estate, appealed this valuation to the Assessment Review Commissioner on the grounds that it was assessed higher than its market value. In response, the City initially reduced its assessment to $4,186,955.00 and when provided with a revised survey by the Executrix, further reduced the valuation to $3,823,615.00. Following her appeal hearing, the Commissioner assessed the land at $3,800,000.00. The Executrix takes issue with the correctness of the Commissioner’s decision.

Issues 4 The Executrix asserts that she was denied procedural fairness in the conduct of the hearing. She also submits that the Commissioner incorrectly applied the law respecting municipal tax assessment or, alternatively, exceeded his jurisdiction in his mistaken interpretation of the material circumstances of the Estate property, noting in particular the significant prohibitions respecting development. 92 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Legal Framework 5 The appeal before this Court is governed by section 39 of the Assess- ment Act, 2006, SNL 2006, C.A-18 (the “Act”): Appeal to Trial Division 39.(1) A party aggrieved by a decision of a commissioner may appeal from that decision to a judge of the Trial Division in the judicial centre in which the real property is located upon giving written notice to all parties and to the Trial Division within 30 days after the mailing or delivery to that person of the decision of the commissioner. (2) The practice and procedure relating to appeals under the Judica- ture Act, and the Rules of the Supreme Court, 1986 apply to proceedings under this section. (3) An appeal of a decision of a commissioner under subsection (1) may be made on a question of law or jurisdiction. (4) A commissioner may be represented by counsel and heard on an appeal under this section. (5) The court shall either confirm or vacate the decision of the commissioner and where vacated the court shall refer the matter back to the commissioner with the opinion of the court as to the error in law or jurisdiction and the commissioner shall deal with the matter in accordance with that opinion. 6 Subsection 39(3) specifies that an appeal may be taken from a decision of the Commissioner on a question of law or jurisdiction. Before proceeding to the merits of this appeal, I will set out the standard of review applicable in these proceedings.

Standard of Review 7 Both parties referred to the decision of the Newfoundland and Labra- dor Court of Appeal in Labatt Brewing Co. v. St. John’s (City), 2011 NLCA 75 (N.L. C.A.), wherein Harrington, J.A., writing for the majority, held that the standard of review with respect to the legal interpretation of sections 17 and 18 of the Act was one of correctness: 27. In Dunsmuir, the Supreme Court stated that a standard of review based on correctness applies to questions of general law. At para. 60 Justices Bastarache and LeBel wrote: [60] ... courts must also continue to substitute their own view of the correct answer where the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 93

specialized area of expertise” (Toronto (City) v. C.U.P.E., [2003] 3 S.C.R. 77 at para. 62, per LeBel J.). Because of their impact on the administration of justice as a whole, such questions require uniform and consistent answers. Such was the case in Toronto (City) v. C.U.P.E., which dealt with complex common law rules and conflicting jurisprudence on the doctrines of res judicata and abuse of process — issues that are at the heart of the administration of justice (see para. 15, per Arbour J.). [Underlining added.] 28. In BCE Place Limited v. Municipal Property Assessment Corpo- ration, 2010 ONCA 672, the Court of Appeal discussed the standard of review regarding municipal assessment appeals in Ontario in the post-Dunsmuir era. At para. 17, Rosenberg J.A., wrote for a unani- mous panel: [17] In my view, the pre-Dunsmuir jurisprudence has already determined the standard of review in a satisfactory manner. In a series of cases, the Divisional Court has found that the standard of review on questions of law is correctness, even where the Board is interpreting its home statute. See Municipal Property Assessment Corp. v. Minto Developments Inc. (2003), 2 M.P.L.R. (4th) 89, and 1098748 Ontario Ltd. v. Ontario Property Assessment Corp., Region No. 11 (2001), 143 O.A.C. 121. And the Divisional Court reached the same conclusion in the post- Dunsmuir decision in Toronto (City) v. Wolf (2008), 241 O.A.C. 41 Divisional Court pointed out in those cases the Board’s decisions are not protected by a privative clause and that there is a statutory appeal with leave to the Divi- sional Court on questions of law (s. 43.1 of the Act). (paragraphs 27 and 28) 8 The Supreme Court of Canada in New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9 (S.C.C.) explains the standard of review for questions of law and jurisdiction, at paragraph 128: 128. Secondly, administrative action must be founded on statutory or prerogative (i.e. common law) powers. This too is a simple idea. No one can exercise a power they do not possess. Whether or not the power (or jurisdiction) exists is a question of law for the courts to determine, just as it is for the courts (not the administrators) to have the final word on questions of general law that may be relevant to the resolution of an administrative issue. The instances where this Court 94 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

has deferred to an administrator’s conclusion of law outside his or her home statute, or a statute “intimately” connected thereto, are ex- ceptional. We should say so. Instead, my colleagues say the court’s view of the law will prevail where the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”. 9 The Court in Dunsmuir also considered the applicable standard of review on questions of procedural fairness and breach of natural justice, at paragraph 129: 129. Thirdly, a fair procedure is said to be the handmaiden of justice. Accordingly, procedural limits are placed on administrative bodies by statute and the common law. These include the requirements of “procedural fairness”, which will vary with the type of decision maker and the type of decision under review. On such matters, as well, the courts have the final say. The need for such procedural safeguards is obvious. Nobody should have his or her rights, interests or privileges adversely dealt with by an unjust process. Nor is such an unjust intent to be attributed easily to legislators. Hansard is full of expressions of concern by Ministers and Members of Parliament regarding the fairness of proposed legislative provisions. There is a dated hauteur about judicial pronouncements such as that the “justice of the common law will supply the omission of the legislature” (Cooper v. Wandsworth Board of Works (1863), 14 C.B. (N.S.) 180, 143 E.R. 414 (C.P.), at p. 420). Generally speaking, legislators and judges in this country are working with a common set of basic legal and constitutional values. They share a belief in the rule of law. Con- stitutional considerations aside, however, statutory protections can nevertheless be repealed and common law protections can be modified by statute, as was demonstrated in Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor [page252] Control and Licensing Branch), [2001] 2 S.C.R. 781, 2001 SCC 52. (underlining added) 10 I find that the standard of review applicable in these proceedings is that of correctness.

Procedural Fairness 11 It was not disputed by the parties that the Commissioner relied upon documentation prepared by the City, dealing with the zoning breakdown and comparable sales, in arriving at the valuation of the property. 12 The Executrix relies upon the following facts, taken from the transcript of the appeal hearing and her Affidavit filed in these proceedings, Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 95

as evidencing a denial of procedural fairness in the conduct of her appeal. These documents formed part of the Appeal Book entered by the Consent of the Parties. On receipt of the Notice of Assessment assessing the Estate property at over $5 million on 17 December 2012, she telephoned a Senior Assessor with the City who agreed to assist her with the appeal application and who told her that it was not necessary to retain legal counsel as the hearing was informal. She was also directed to another Senior Assessor to ascertain if there was a breakdown of the various zones; how much was designated in each zone; and the applicable rates for each zone. 13 She followed up by telephone with the Senior Assessor on 20 Decem- ber 2012 and was told that there was no breakdown of different zones, they were all treated the same. The Executrix stated that he further told her that he would be at the hearing to help her to get a fair assessment, noting that her assessment was excessive. As it turned out, this individual was not present at the hearing. The Executrix received no further documentation from the City until the hearing date on 4 February 2013. 14 The Senior Assessor for purposes of the hearing, Mr. Cheeseman, acknowledged to the Commissioner that he had only taken over the assessment file for the Estate that morning and that the City had prepared a zone breakdown, which he was seeing for the first time. It was only after the appeal hearing had commenced that the Executrix received a copy of the zoning breakdown. She was never provided with a copy of the comparable sales, assembled by the City in justification of their assessment and subsequently considered by the Commissioner in making his decision. The City declined a request by the Executrix for a copy of the comparables, making them available only to the Commissioner. The transcript of the hearing contains the following statement by Mr. Cheeseman to the Executrix during his presentation of the comparable sales to the Commissioner, at page 8: I can’t give you a copy of these sales, they can go to the Commissioner. 15 The Executrix maintains that she did not have an opportunity to prepare a response to information relied upon by the City and the Commis- sioner, and that she was thereby prejudiced by this, noting that the Com- missioner stated in his decision: Mr. Cheeseman submitted thirteen sales which he used to support the assessed value of the subject property. A copy was given to the Appellant. 96 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

16 The Commissioner also wrote: The rates applied to the various categories of land are supported by the comparable sales he (the assessor) provided. There is no evidence provided by the Appellant to show these values are incorrect. 17 The Executrix takes issue with these statements, maintaining that she was never given a copy of the comparables. The fact that the Executrix was not given a copy of the comparable sales was recorded in the transcript of the proceedings but the Commissioner failed to address it, incorrectly stating in his reasons that she had this information. 18 The City did not provide evidence to rebut these facts, but took issue with the Executrix’s assertion that she was denied procedural fairness. The City submits that the Executrix at no time advised the Commissioner that she did not understand the proceedings or express her dissatisfaction with the hearing, or request an adjournment. The City also counters that the Executrix could have prepared her own table of comparable sales or retained professional assistance, but chose not to do so. 19 In Moreau-Bérubé c. Nouveau-Brunswick, 2002 SCC 11 (S.C.C.), at paragraph 75, the Supreme Court of Canada addressed the application of the rules of natural justice before administrative bodies. Justice Arbour wrote: 75. The duty to comply with the rules of natural justice and to follow rules of procedural fairness extends to all administrative bodies acting under statutory authority (see Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643, at p. 653; Baker, supra, at para. 20; Therrien, supra, at para. 81). Within those rules exists the duty to act fairly, which includes affording to the parties the right to be heard, or the audi alteram partem rule. The nature and extent of this duty, in turn, “is eminently variable and its content is to be decided in the specific context of each case” (as per L’Heureux-Dubé J. in Baker, supra, at para. 21). Here, the scope of the right to be heard should be generously construed since the Judi- cial Council proceedings are similar to a regular judicial process (see Knight, supra, at p. 683); there is no appeal from the Council’s decision (see D. J. M. Brown and J. M. Evans, Judicial Review of Ad- ministrative Action in Canada (loose-leaf), vol. 1, at pp. 7-66 to 7- 67); and the implications of the hearing for the respondent are very serious (see Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105, at p. 1113). Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 97

20 The Supreme Court of Canada in Baker v. Canada (Minister of Citizenship & Immigration), [1999] 2 S.C.R. 817, 174 D.L.R. (4th) 193 (S.C.C.) explained at paragraph 21 that the extent of the duty of procedural fairness to be accorded a party to a hearing must be determined with a consideration of the “specific context of each case”: 21. The existence of a duty of fairness, however, does not determine what requirements will be applicable in a given set of circumstances. As I wrote in Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653, at p. 682, “the concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case”. All of the circumstances must be considered in order to determine the content of the duty of procedural fairness: Knight, at pp. 682-83; Cardinal, supra, at p. 654; Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170, per Sopinka J. 21 The Court also articulated the relevant considerations relating to the level of procedural fairness, at paragraph 22: 22. Although the duty of fairness is flexible and variable, and depends on an appreciation of the context of the particular statute and the rights affected, it is helpful to review the criteria that should be used in determining what procedural rights the duty of fairness requires in a given set of circumstances. I emphasize that underlying all these factors is the notion that the purpose of the participatory rights contained within the duty of procedural fairness is to ensure that administrative decisions are made using a fair and open procedure, appropriate to the decision being made and its statutory, institutional, and social context, with an opportunity for those affected by the decision to put forward their views and evidence fully and have them considered by the decision-maker. 22 The factors for consideration are set out in paragraph 23 to 28: 23. Several factors have been recognized in the jurisprudence as relevant to determining what is required by the common law duty of procedural fairness in a given set of circumstances. One important consideration is the nature of the decision being made and the process followed in making it. In Knight, supra, at p. 683, it was held that “the closeness of the administrative process to the judicial process should indicate how much of those governing principles should be imported into the realm of administrative decision making”. The more the process provided for, the function of the tribunal, the nature of the decision-making body, and the determinations that must be made to reach a decision resemble judicial decision making, the more likely it is that procedural protections closer to the trial model will be 98 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

required by the duty of fairness. See also Old St. Boniface, supra, at p. 1191; Russell v. Duke of Norfolk, [1949] 1 All E.R. 109 (C.A.), at p. 118; Syndicat des employ´es de production du Qu´ebec et de l’Acadie v. Canada (Canadian Human Rights Commission), [1989] 2 S.C.R. 879, at p. 896, per Sopinka J. 24. A second factor is the nature of the statutory scheme and the “terms of the statute pursuant to which the body operates”: Old St. Boniface, supra, at p. 1191. The role of the particular decision within the statutory scheme and other surrounding indications in the statute help determine the content of the duty of fairness owed when a particular administrative decision is made. Greater procedural protections, for example, will be required when no appeal procedure is provided within the statute, or when the decision is determinative of the issue and further requests cannot be submitted: see D. J. M. Brown and J. M. Evans, Judicial Review of Administrative Action in Can- ada (loose-leaf), at pp. 7-66 to 7-67. 25. A third factor in determining the nature and extent of the duty of fairness owed is the importance of the decision to the individual or individuals affected. The more important the decision is to the lives of those affected and the greater its [page839] impact on that person or those persons, the more stringent the procedural protections that will be mandated. This was expressed, for example, by Dickson J. (as he then was) in Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105, at p. 1113: A high standard of justice is required when the right to continue in one’s profession or employment is at stake .... A disciplinary suspension can have grave and permanent consequences upon a professional career. As Sedley J. (now Sedley L.J.) stated in R. v. Higher Education Funding Council, ex parte Institute of Dental Surgery, [1994] 1 All E.R. 651 (Q.B.), at p. 667: In the modern state the decisions of administrative bodies can have a more immediate and profound impact on people’s lives than the decisions of courts, and public law has since Ridge v. Baldwin, [1963] 2 All E.R. 66, [1964] A.C. 40 been alive to that fact. While the judicial character of a function may elevate the practical requirements of fairness above what they would otherwise be, for example by requiring contentious evidence to be given and tested orally, what makes it “judicial” in this sense is principally the nature of the issue it has to determine, not the formal status of the deciding body. Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 99

The importance of a decision to the individuals affected, therefore, constitutes a significant factor affecting the content of the duty of procedural fairness. 26. Fourth, the legitimate expectations of the person challenging the decision may also determine what procedures the duty of fairness requires in given circumstances. Our Court has held that, in Canada, this doctrine is part of the doctrine of fairness or natural justice, and that it does not create substantive rights: Old St. Boniface, supra, at p. 1204; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at p. 557. As applied in Canada, if a legitimate expectation is found to exist, this will affect the content of the duty of fairness owed to the individual or individuals affected by the decision. If the claimant has a legitimate expectation that a certain procedure will be followed, this procedure will be required by the duty [page840] of fairness: Qi v. Canada (Minister of Citizenship and Immigration) (1995), 33 Imm. L.R. (2d) 57 (F.C.T.D.); Mercier-N´eron v. Canada (Minister of National Health and Welfare) (1995), 98 F.T.R. 36; Bendahmane v. Canada (Minister of Employment and Immigration), [1989] 3 F.C. 16 (C.A.). Similarly, if a claimant has a legitimate expectation that a certain result will be reached in his or her case, fairness may require more extensive procedural rights than would otherwise be accorded: D. J. Mullan, Administrative Law (3rd ed. 1996), at pp. 214-15; D. Shapiro, “Legitimate Expectation and its Applica- tion to Canadian Immigration Law” (1992), 8 J.L. & Social Pol’y 282, at p. 297; Canada (Attorney General) v. Human Rights Tribunal Panel (Canada) (1994), 76 F.T.R. 1. Nevertheless, the doctrine of legitimate expectations cannot lead to substantive rights outside the procedural domain. This doctrine, as applied in Canada, is based on the principle that the “circumstances” affecting procedural fairness take into account the promises or regular practices of administrative decision-makers, and that it will generally be unfair for them to act in contravention of representations as to procedure, or to backtrack on substantive promises without according significant procedural rights. 27. Fifth, the analysis of what procedures the duty of fairness requires should also take into account and respect the choices of procedure made by the agency itself, particularly when the statute leaves to the decision-maker the ability to choose its own procedures, or when the agency has an expertise in determining what procedures are appropriate in the circumstances: Brown and Evans, supra, at pp. 7-66 to 7-70. While this, of course, is not determinative, important weight must be given to the choice of procedures made by the agency itself 100 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

and its institutional constraints: IWA v. Consolidated-Bathurst Packaging Ltd., [1990] 1 S.C.R. 282, per Gonthier J. 28. I should note that this list of factors is not exhaustive. These principles all help a court determine whether the procedures that were followed [page841] respected the duty of fairness. Other factors may also be important, particularly when considering aspects of the duty of fairness unrelated to participatory rights. The values underlying the duty of procedural fairness relate to the principle that the individual or individuals affected should have the opportunity to present their case fully and fairly, and have decisions affecting their rights, interests, or privileges made using a fair, impartial, and open process, appropriate to the statutory, institutional, and social context of the decision. 23 In Baker, a significant factor to be taken into consideration in determining the appropriate level of procedural fairness, is the importance of the decision to the taxpayer. Here the reassessment places a dramatically different financial burden on the Estate. The Executrix must consider the interests of the beneficiaries and the outcome of the appeal will have a major impact on her administration of the Estate. 24 The circumstances also reveal that she had been given some assurance that a Senior Assessor would be present to assist her at the hearing and that there were no zoning breakdowns for her to study. 25 Arbour, J. in Moreau-B´erub´e considers procedural fairness from the perspective of a party’s legitimate expectations, at paragraph 78: 78. I am not persuaded by any of these arguments. The doctrine of reasonable expectations does not create substantive rights, and does not fetter the discretion of a statutory decision-maker. Rather, it operates as a component of procedural fairness, and finds application when a party affected by an administrative decision can establish a legitimate expectation that a certain procedure would be followed: Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at p. 557; Baker, supra, at para. 26. The doctrine can give rise to a right to make representations, a right to be consulted or perhaps, if circumstances require, more extensive procedural rights. But it does not otherwise fetter the discretion of a statutory decision-maker in order to mandate any particular result: see D. Shapiro, Legitimate Expectation and its Application to Canadian Immigration Law (1992), 8 J. L. & Social Pol’y 282, at p. 297. Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 101

26 Of central importance to procedural fairness is the opportunity to fully present one’s case before a tribunal. In Baker this is described as follows, at paragraph 30: 30. The next issue is whether, taking into account the other factors related to the determination of the content of the duty of fairness, the failure to accord an oral hearing and give notice to Ms. Baker or her children was inconsistent with the participatory rights required by the duty of fairness in these circumstances. At the heart of this analysis is whether, considering all the circumstances, those whose interests were affected had a meaningful opportunity to present their case fully and fairly. The procedure in this case consisted of a written application with supporting documentation, which was summarized by the junior officer (Lorenz), with a recommendation being made by that officer. The summary, recommendation, and material was then considered by the senior officer (Caden), who made the decision. 27 It follows that procedural fairness includes the requirement that the Executrix know the City’s reasons for a reassessment of over $5 million. Harrington, J. (as he then was) states in Peter Kiewit Sons Co. v. Municipal Assessment Agency Inc., 2009 NLTD 13 (N.L. T.D.), at paragraphs 32 and 33: 32. With regard to assessment notices to a taxpayer, Green C.J. of this Court in St. John’s (City) v. Hotel Nfld 82, [2003] N.J. No. 133; 255 Nfld. & P.E.I.R. 323, at paragraph 111 held: Procedural fairness requires that the taxpayer know what he or she is facing so that a proper response can be made. 33. The Supreme Court in Nicholls v. Cumming (1887), 1 S.C.R. 395 at para. 5 considered the extent to which compliance with a statutory requirement of a notice of assessment was directory or mandatory: Can any court properly say, that proceedings, which the Legislature has required should be taken to protect taxpayers from unequal or unjust taxation, may be dispensed with, by holding that they are directory, and, therefore, non-essential? I think not. On the contrary, I think reason and authority show the proper rule to be, that provisions, intended for the security of the ratepayer, to enable him to know, with reasonable certainty, for what real and personal property he is taxed, and the amount, are essential conditions, and, if not observed, he is not legally taxed. (emphasis added) 102 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

28 Having considered the law, I am satisfied that the Executrix was not given the level of procedural fairness that she was entitled to in the circumstances of her hearing. In so deciding I have considered the following factors: The significant increase in the Estate property’s value, mea- sured in several million dollars; the complexity associated with the new combination of property uses captured by “Comprehensive Development Area — Kenmount Land Use Zones”; the rights at stake for the beneficiaries of the Estate; the legitimate expectation held by the Executrix that she would be assisted at the hearing by a Senior Assessor; and the non- disclosure of key information, thereby denying her the opportunity to prepare for the appeal. 29 Procedural fairness could have been addressed with a postponement of the hearing to permit the Executrix an opportunity to study the various property breakdowns and comparables and seek legal or other specialized representation if she considered that necessary. The complexity of the zoning was acknowledged by the Commissioner who stated that he could not “get a picture” of the reassessed land and the zoning changes without the City’s breakdown. (Transcript, page 6). 30 I am satisfied that the breach of the rules of natural justice flowing from this denial of procedural fairness constitutes an error of jurisdiction, necessitating that the Commissioner’s decision be vacated and the matter returned to the Commissioner for a full rehearing. 31 Subsection 39(5) precludes the Court from conducting a new hearing, but provides that the Court offer an opinion as to the error in law or jurisdiction. In relation to the denial of procedural fairness, in order to safeguard the integrity of this rehearing, the Commissioner shall specify timeframes in advance of the hearing date in which full disclosure shall be made by the parties of all documentation and other evidence they will rely upon. 32 My finding that there was a breach of the rules of natural justice through the denial of procedural fairness is sufficient to vacate the Com- missioner’s decision and refer it back for rehearing. I will nonetheless refer to the other matters advanced by the Executrix in her application. 33 The Executrix has also submitted that the Commissioner erred in law through “speculation” as to the property’s future use as opposed to actual use, as mandated by the Act and court decisions. Alternatively, she argues that the Commissioner made a jurisdictional error in finding that there had been a change in use of the property, when in fact the evidence established that development has been prohibited by the City until a de- Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 103

termination that the lands can be serviced for urban development, including an ongoing water storm sewer- storm water runoff study which must first be completed and the resolution of the lack of water/sewer infrastructure. 34 Mr. Cheeseman also addressed the development restrictions in response to a question from the Commissioner as the whether the lands fell within a Comprehensive Development Area, at pages 9 - 10 of the transcript: It’s a CDA zone. They couldn’t develop it. With the CDA Zone, you can develop it under the regulations. I just got a printoff this morning from our planners. Permitted uses is existing uses, reconstruction, replacement of any additions to existing buildings that were there, if council sees fit, with the exception of uses listed, but no development may be permitted in this comprehensive area until such time as the City’s Department of Planning and Engineering determines that the area is available for service urban development. Council will consider the rezoning of lands in this comprehensive development area to an appropriate zone to accommodate a development. So that’s the regulations that are there in place. 35 Section 10 of the St. John’s Development Regulations describes the limitations respecting development: Comprehensive Development Area — Kenmount Road (CDA — Kenmount) Zone Permitted Uses (a) Existing Uses (b) Reconstruction and replacement of and additions to existing buildings provided that Council may refuse permission for a replacement or reconstruction or addition if Council is of the opinion that such a Development would adversely affect the development of the Comprehensive Development Area. With the exception of uses listed above, no Development may be permitted in this Comprehensive Development Area until such time as the City’s Department of Engineering determines that the area is available for serviced urban development. Council will consider the rezoning of lands in this Comprehensive Development Area to an appropriate zone to accommodate a development. 36 When asked by the Commissioner whether that meant that that an individual “can’t do anything until the Council says that”, Mr. Cheese- man agreed. (Transcript, page 10). 104 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

37 Prohibitions relating to development of the property were also before the Commissioner in a document titled: Planning Development and Engi- neering, City of St. John’s, “Terms of Reference: Preparation of a Com- prehensive Land Use Development Plan for Lands above the 190 meter Contour — Kenmount Road, St. John’s, NL” (2013). 38 Likewise, Mr. Cheeseman addressed this issue as well in response to a statement by the Executrix respecting one of the “comparable” properties. She alluded to the fact that the property owners there could likely install a well and septic system. Mr. Cheeseman acknowledged, as follows, that this was not the case with the subject property, at pages 17 - 18 of the transcript: ... Well, no, they have to fix all these problems first because of the major sewer easement and the wetlands, and they have to cure all those problems. 39 At the end of the hearing the Commissioner agreed to consider a revised survey of the property to be provided by the Executrix stating, at p. 24 of the transcript: ..If you can provide a copy of your survey plan to Mr. Cheeseman, he can at least check on the size and make an adjustment for that part of it. I’ll review the rest of the information that he spoke about and he’s given, and see whether I think it’s reasonable and come up with a decision on the value after that. 40 The Commissioner also stated during the proceedings, at page 26 of the transcript: The Assessment Act actually requires them to do a valuation of market value today whatever that is today. 41 Counsel for the City stated that the “actual value” of the property means the price that can be obtained for it in the marketplace. It was the City’s position that the Commissioner appropriately considered the comparable sales presented to him. 42 Nothing in the Commissioner’s decision, however, explains the manner in which he factored into his analysis the existing prohibitions on development or the property’s relationship to the characteristics of the comparables in the marketplace. It is accordingly not possible for the Ap- pellant or this Court to ascertain whether the Commissioner’s conclusion properly reflected the actual value of the Estate property as required by section 17 of the Act. Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 105

43 Section 17 of the Act provides: 17. (1) An assessor shall assess real property at actual value. (2) The actual value of the real property under subsection (1) shall be made by determining the actual value of the real property as of the base date. (3) In forming an assessment for the purpose of subsection (1) an assessor shall have regard to the assessment of other properties in the city or municipality being assessed to ensure that the taxation falls in a uniform manner upon the real property that is subject to taxation in the city or municipality. (4) An assessor may assess buildings, structures or portions of them that are in the process of construction, alteration or enlargement at actual value and include the assessment on the next annual assessment roll. (5) Except as provided in subsection 18(3), this section does not apply to special purpose property. 44 The following case law provides guidance on the subject of municipal taxation assessment. In St. John’s (City) v. Hotel NFLD 82 - A Joint Ven- ture, 2003 NLSCTD 78 (N.L. T.D.) Green, C.J.T.D. (as he then was) examined the history and objectives of the legislation. At paragraphs 68 - 71 he writes: 68. In a broad sense, of course, the object of the assessment of legislation is to ensure that taxpayers owning property in the City pay tax calculated by reference to a property value that is periodically determined according to a defined standard and is applied equitably to all taxpayers, except those groups who are specifically exempted. The achievement of those broad objectives, however, occurs within, and is constrained by, the specific legislative scheme that is currently operative. That scheme, as has been noted previously, has changed over the years. Although certain legislative provisions have continued to be carried forward as part of the new legislative scheme, the changes in the conceptual scheme will nevertheless have an effect on the scope of their operation in particular circumstances, if they are to operate harmoniously, rather than at odds with, the revised concepts that have been subsequently introduced. 69. The key change that has to be taken into account in interpreting the scope of s. 57 is, in my view, the implementation in 1995 and 1996 of periodic valuation as of particular base dates. 70. The Act clearly contemplates that general assessments will not and should not be made annually. Rather, the Act requires that they 106 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

be made as of fixed and regular dates with stipulated periods in between. Annual adjustments to an assessment made during part of the general assessment process are only permitted in the intervening years between general assessments where the specific criteria set forth in s. 57 apply. 71. The Act provides for a three year assessment cycle determined by reference to base dates. Within two years of a particular base date, a general assessment must be conducted assigning market values to all properties as of the previous base date. Those assessment levels then become operative for the purposes of imposition of tax two years after the base date that was used for the calculation. There is therefore inherent in this system a possibility that valuation at a particular point in time will become dated as a result of market changes which have occurred since the last base date. Nevertheless, the notion of imposition of tax on the basis of potentially outdated valuations is inherent in the base date valuation system. 45 Valuation comparables and speculative values are discussed in Schrader, Re, 2010 NSCA 90 (N.S. C.A.), at paragraph 12 wherein the Nova Scotia Court of Appeal upheld the Utility and Review Board’s ex- clusion of speculative values in its analysis of the comparable market data analysis. In upholding the Board’s valuation, the Nova Scotia Court of Appeal also noted that their conclusions respecting the comparables were “clear” and capable of being “sufficiently” understood. 46 The Court in Schrader referred to the decision of the Supreme Court of Canada in in Montreal (City) v. Sun Life Assurance Co. of Canada, [1950] S.C.R. 220, [1950] 2 D.L.R. 785 (S.C.C.) at paragraph 4: The Board followed the well known principle from Sun Life Assurance of Canada v. Montreal (City), [1950] 2 D.L.R. 785 (S.C.C.), affirmed [1952] 2 D.L.R.81 (P.C.), that an assessment is supposed to value existing use, not future potential as would be valued in an expropriation. 47 The Supreme Court of Canada in Sun Life discusses the timeframe of a municipal assessment at page 3: I need not insist on the point that a municipal valuation for assessment purposes is not to be made in accordance with the rules laid down with regard to the valuation of a property for expropriation purposes. One main ground why such a course should not be followed is that the expropriation of a property means the permanent divesting of the owner and should legitimately, therefore, take into account the present value and all the prospective possibilities of the Hiscock Estate v. St. Johns (City) Deborah J. Paquette J. 107

property, while the municipal valuation is, generally speaking, only made for one year, or, in the case of the City of Montreal, for three years, with certain provisions for modification if certain events happen, such as alteration, improvement, fire, etc. The rule was laid down by Lord Parmoor in Great Western and Metropolitan Railway Companies v. Kensington Assessment Committee [[1916] 1 A.C. 23 at 54.], that in such a case “the hereditament should be valued as it stands and as used and occupied when the assessment is made.” In the yearly valuation of a property for purposes of municipal assessment there is no room for hypothesis as regards the future of the property. The assessor should not look at past, or subsequent or potential values. His valuation must be based on conditions as he finds them at the date of the assessment. In particular, in the present case, there was no ground for considering any other condition, as no suggestion of any kind appears in the record that there was, throughout the period of assessment, a prospect of any change. 48 Nothing in the Commissioner’s reasons demonstrates that he considered the evidence to ascertain whether the value was consistent with this particular property and the characteristics of the City’s selection of comparable properties. He offers no explanation other than to state: The rates applied to various categories of land are supported by the comparable sales he provided. There is no evidence provided by the Appellant to show that these values are incorrect. Therefore I accept the values as submitted. 49 As noted above, the Executrix was never provided the comparable sales. 50 Finally, the Applicant has requested that the matter not be referred to the Commissioner, as contemplated by the Act, but instead be referred to a different Commissioner. No facts were advanced to demonstrate a conflict of interest of the Commissioner or to identify any other disqualify- ing factors such as a reasonable apprehension of bias and no legal authority was provided to support the request for a new Commissioner. The City opposed the request, stating that there is only one Commissioner appointed to hear these matters. While it is foreseeable that circumstances may present in which an alternate Commissioner be named for a rehearing, no such grounds have been raised or established here such as would prevent the Commissioner from embarking on a new hearing in accordance with the Act and the reasons set out in this decision. 108 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Conclusion 51 Based on the foregoing, I am satisfied that the Commissioner erred in law and exceeded his jurisdiction in failing to accord the Executrix the procedural fairness necessary in the conduct of the appeal hearing, in accordance with the rules of natural justice. 52 Pursuant to subsection 39(5) of the Act, the matter is referred back to the Commissioner for a full rehearing as to whether the property assessment was in accordance with section 17 of the Act. 53 The Commissioner shall provide sufficient explanation in his decision as to identify the basis for his valuation. 54 The Commissioner shall specify the filing date for all documentation relied upon by the parties to the rehearing and direct that each party shall provide the other with such documentation reasonably in advance of the hearing. 55 The Appellant shall have her costs in accordance with Column Three of the Scale of Costs. Appeal allowed. Free v. Magnetawan (Municipality) 109

[Indexed as: Free v. Magnetawan (Municipality)] David Free, Plaintiff and Municipality of Magnetawan, Defendant Ontario Superior Court of Justice Docket: 126/09(SIM) 2014 ONSC 3635 D.J. Gordon J. Heard: March 24-26, 2014 Judgment: September 8, 2014* Municipal law –––– Municipal liability — Miscellaneous –––– Wrongful dismissal — In early March 2009, E, chief administrative officer/clerk (“CAO/clerk”) of defendant municipality, informed mayor and council of his resignation — On April 8, 2009, subsequent to conversation and emails with E, by-law was passed appointing plaintiff as acting CAO/clerk — Council continued to advertise for permanent replacement for E — Plaintiff invoiced municipality for his services through his consulting company — On June 10, 2009, council passed resolution terminating services of this company — By-laws would subsequently be passed to repeal earlier by-law that had appointed plaintiff — Another person was permanently appointed to position in July 2009 — Plaintiff brought action for wrongful dismissal — Plaintiff claimed he was offered and accepted three-year contract — Municipality stated that appointment was temporary — Action dismissed — Evidence that no offer of permanent employment was presented to plaintiff was preferred over plaintiff’s evidence — Plaintiff’s claim of three-year contract was rejected — Relevant by-law clearly indicated council’s intention to appoint plaintiff as acting or temporary CAO/clerk — Plaintiff did not apply for permanent position — Municipality’s established practice was to appoint acting CAO/clerk before making permanent appointment — Plaintiff’s appointment was temporary, due to expire once decision was made for permanent replacement — While by-law repealing plaintiff’s appointment was not passed until July 8, 2009, entitlement to compensation for plaintiff’s services came to end with resolution passed on June 10, 2009 — Given temporary nature of position, and expectation it would be brief, no notice of termination was required — Negotiations for provision of services were determinative — Invoicing system was consistent with municipality’s practice —

*Additional reasons at Free v. Magnetawan (Municipality) (2014), 2014 ONSC 6885, 2014 CarswellOnt 16564 (Ont. S.C.J.). 110 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

As long as he was acting CAO/clerk, plaintiff, or his company, was independent contractor — Plaintiff was never employee — Position was temporary, therefore, there could be no damage award. Labour and employment law –––– Employment law — Nature of employment relationship — Relationships distinct from employment relationship — Independent contractor –––– In early March 2009, E, chief administrative officer/clerk (“CAO/clerk”) of defendant municipality, informed mayor and council of his resignation — On April 8, 2009, subsequent to conversation and emails with E, by-law was passed appointing plaintiff as acting CAO/clerk — Council continued to advertise for permanent replacement for E — Plaintiff invoiced municipality for his services through his consulting company — On June 10, 2009, council passed resolution terminating services of this company — By- laws would subsequently be passed to repeal earlier by-law that had appointed plaintiff — Another person was permanently appointed to position in July 2009 — Plaintiff brought action for wrongful dismissal — Plaintiff claimed he was offered and accepted three-year contract — Municipality stated that appointment was temporary — Action dismissed — Plaintiff’s claim of three-year contract was rejected — There was no document accepted as establishing contract of employment as claimed, thus it became necessary to make determination based on evidence tendered — Relevant by-law clearly indicated council’s intention to appoint plaintiff as acting or temporary CAO/clerk — Plaintiff did not apply for permanent position — Municipality’s established practice was to appoint acting CAO/clerk before making permanent appointment — Plaintiff’s appointment was temporary, due to expire once decision was made for permanent replacement — Given temporary nature of position, and expectation it would be brief, no notice of termination was required — Appointment to position of CAO/clerk, either temporary or permanent, did not create employment relationship — Negotiations for provision of services were determinative; there was no dispute it was to be $45 per hour and certain expenses — Invoicing system was consistent with municipality’s practice — As long as he was acting CAO/clerk, plaintiff, or his company, was independent contractor — Plaintiff was never employee — Position was temporary, therefore there could be no damage award. Evidence –––– Admissibility — Relevance — Materiality –––– In early March 2009, E, chief administrative officer/clerk (“CAO/clerk”) of defendant municipality, informed mayor and council of his resignation — On April 8, 2009, subsequent to conversation and emails with E, by-law was passed appointing plaintiff as acting CAO/clerk — Council continued to advertise for permanent replacement for E — Plaintiff invoiced municipality for his services through his consulting company — On June 10, 2009, council passed resolution terminating services of this company — By-laws would subsequently be passed to repeal earlier by-law that had appointed plaintiff — Another person was permanently appointed to position in July 2009 — Plaintiff brought action for wrongful dis- Free v. Magnetawan (Municipality) 111

missal — Plaintiff claimed he was offered and accepted three-year contract — Municipality stated that appointment was temporary — Action dismissed — If emails are accepted as contract between parties, parol evidence rule would apply and extrinsic evidence would not be admissible — Evidence pertaining to emails, and with respect to employment relationship was tendered — Such evidence was not extrinsic in respect to terms of contract — Rather, evidence is relevant to issue of whether email exchange as presented at trial actually occurred — Evidence that no offer of permanent employment was presented to plaintiff was preferred over plaintiff’s evidence — Plaintiff’s claim of three-year contract was rejected — Plaintiff’s appointment was temporary, due to expire once decision was made for permanent replacement — Negotiations for provision of services were determinative — Invoicing system was consistent with municipality’s practice — As long as he was acting CAO/clerk, plaintiff, or his company, was independent contractor — Plaintiff was never employee — Posi- tion was temporary, therefore, there could be no damage award. Cases considered by D.J. Gordon J.: Eli Lilly & Co. v. Novopharm Ltd. (1998), 227 N.R. 201, 152 F.T.R. 160 (note), 1998 CarswellNat 1061, 1998 CarswellNat 1062, 161 D.L.R. (4th) 1, [1998] 2 S.C.R. 129, 80 C.P.R. (3d) 321, [1998] S.C.J. No. 59 (S.C.C.) — referred to Spark v. Generex Pharmaceuticals Inc. (1999), 1999 CarswellOnt 3893, 48 C.C.E.L. (2d) 272, [1999] O.J. No. 4541 (Ont. S.C.J.) — referred to Stevenson v. Dandy (1920), [1920] 2 W.W.R. 643, 1920 CarswellAlta 128 (Alta. C.A.) — referred to Statutes considered: Evidence Act, R.S.O. 1990, c. E.23 Generally — referred to Municipal Act, 2001, S.O. 2001, c. 25 Generally — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 26 — considered

ACTION for wrongful dismissal.

G. Sheppard, for Plaintiff I. St. John, for Defendant 112 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

D.J. Gordon J.:

1 David Free claims damages against the Municipality of Magnetawan (“Magnetawan”) for wrongful dismissal.

Background 2 In early March, 2009, Earl Evans informed the Mayor and Council- lors of Magnetawan of his resignation as Chief Administrative Of- ficer/Clerk (“CAO/Clerk”). He had just been appointed as the Deputy Clerk of the City of Brampton. Council directed MR. Evans to advertise for his replacement. 3 Mr. Free and Mr. Evans made contact. Their discussion led to an informal meeting with Richard Smith, then Mayor to Magenetawan on March 23, 2009. Thereafter, Mr. Free attended a Council meeting on March 30, 2009. A discussion took place in closed session. Immediately following Mr. Free was appointed Deputy Clerk in open session. 4 Mr. Evans left Magnetawan in early April, 2009. On April 8, 2009, Mr. Free was appointed Acting CAO/Clerk. 5 Council continued to advertise for a permanent replacement for Mr. Evans. Mark Urbanski attended a Council meeting on May 27, 2009 for this purpose. He would later be appointed to position in July, 2009. 6 Mr. Free had been invoicing Magnetawan for his services through his consulting company, D. R. Free & Associates, a division of Quality Management Systems Inc. On June 10, 2009, Council passed a resolution terminating the services of this company. By-laws would subsequently be passed to repeal the earlier by-law that had appointed Mr. Free. 7 Mr. Free commenced this action in July 2009.

Dispute 8 The primary dispute between the parties is the nature of Mr. Free’s appointment; that is, as a temporary or acting CAO/Clerk or on a permanent basis. Mr. Free says he was offered and accepted a three year contract. Magnetawan’s position is that the appointment was temporary and only to cover the time period until a permanent replacement for Mr. Ev- ans was found. 9 A secondary dispute is whether it was Mr. Free or his consulting company that was retained to provide services to Magnetawan. Free v. Magnetawan (Municipality) D.J. Gordon J. 113

Litigation 10 The Statement of Claim was issued on July 13, 2009. Pursuant to an Order, granted by Flynn J. on October 9, 2009, a fresh, as amended Statement of Claim was served. In this pleading, Mr. Free sued Magnetawan along with the mayor, Richard Smith, two councillors, Kris Nicholls and Patti Paul, and Mr. Urbanski. Damages were claimed for wrongful dismissal and defamation. 11 In a separate action, Mr. Free also sued the Municipality of Meaford, his former employer, and others. There was a third action issued in To- ronto, the details of which were not provided. By Order granted by Ram- say J. on September 10, 2010 the three actions were to be tried together in Simcoe, unless otherwise directed by the trial judge. 12 On February 21, 2014, I granted an Order, on consent, dismissing the within action against the personal defendants. 13 At the commencement of trial, counsel reported that all claims in the consolidated action, save for the wrongful dismissal claim against Magnetawan, had been resolved.

The Pleadings 14 A brief review of the pleadings is necessary given the plaintiff’s oral motion at the end of trial seeking to amend his Statement of Claim. 15 In the fresh, as amended, Statement of Claim, Mr. Free claimed damages of $180,000.00 for wrongful dismissal. The pleading was prepared by Mr. Free’s former counsel, now retired. It is a long and rambling document of 117 paragraphs, much being related to the defamation claim. The pleading is poorly drafted, containing impermissible statements of evidence. 16 In any event, the essential allegations of Mr. Free are as follows: a) he was appointed Deputy Clerk on March 30, 2009; b) he was appointed CAO/Clerk on April 8, 2009; c) the position of Clerk is a statutory public office; and d) his employment was improperly terminated, without notice or cause, on June 10, 2009. The logical interpretation of the claim is one based on notice. The motion to amend seeks to make it based on contract of a fixed term. 17 The Statement of Defence of Magnetawan, dated January 22, 2010 denies the allegation that Mr. Free was an employee. Rather, 114 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Magnetawan alleges that, at the request of Mr. Free, D.R. Free & Associ- ates were retained to provide the services. Further, the defendant asserts the appointing by-law is for an office, not employment. 18 Magnetawan also alleges the understanding between the parties was that their relationship was intended to be brief and temporary, that D.R. Free & Associates would provide services on an interim basis until a permanent CAO/Clerk was appointed. Termination, it says, on June 10, 2009 was lawful and expected, no notice or reason being required.

The Evidence i) Documents 19 In a case involving a municipality, a full and complete documentary record is expected. For reasons not fully given, or explored by counsel, the relevant documents, including most by-laws, resolutions and minutes of meetings, are missing from the municipal office. 20 The accuracy or legitimacy of other documents is in dispute. Of particular interest, in this regard, are computer generated documents. A forensic examination, again for reasons not provided, has not occurred. In result, I am left with an incomplete evidentiary record, thus making determination of the issues more difficult than necessary.

ii) Mr. Evans — Former CAO/Clerk 21 Reference is made to the former CAO/Clerk of the Magnetawan as part of the background to this case. 22 Mr. Evans was the CAO/Clerk from August 2007 to early April 2009. He had similar positions with other municipalities prior to moving to Magnetawan. 23 On August 22, 2007, Council passed By-Law No. 2007-21 appointing Mr. Evans as Acting CAO/Clerk. By-law 2007-26, passed on November 14, 2007, would appoint him as CAO/Clerk, thus removing the “acting” designation. 24 Mr. Smith and Mr. Evans reported Council’s practice being initially appointing an Acting CAO/Clerk before making a final or permanent appointment. The initial period was treated as an independent contract, Mr. Evans submitting invoices for his time at the prescribed hourly rate, mileage and accommodation expense, but with no benefits. Free v. Magnetawan (Municipality) D.J. Gordon J. 115

25 On being appointed Acting CAO/Clerk, Mr. Evans said he was directed by Council to advertise for a permanent replacement. He did so and, as well, submitted his own application. Mr. Evans was the successful candidate, becoming the permanent CAO/Clerk in November 2007. At this point, Mr. Evans reported being hired as an employee of Magnetawan with the usual benefits, including a pension plan through OMERS. 26 In late 2008, Mr. Evans decided to move on in his career and applied for the position of Deputy Clerk for the City of Brampton. In early March 2009, he was informed that he was the successful candidate. Mr. Evans advised Mr. Smith and the councillors that he was resigning to commence a new position on April 6, 2009. 27 Council instructed Mr. Evans to immediately commence the process of searching for his replacement. Mr. Evans placed the usual advertisements in the local newspaper and on the AMCTO website. He also con- tacted colleagues with other municipalities to inquire as to interest in the position. The closing date for the first advertisement was March 27, 2009. 28 The process resulted in contact between Mr. Free and Mr. Evans.

iii) Other Candidates 29 Mr. Evans reported that no applications were received in response to the initial advertisement. However, as a result of contacting colleagues, Mr. Evans spoke to Ms. McRae who held a similar position with the municipality in Simcoe County. A meeting was arranged. 30 Discussions with Ms. McRae were not successful. Mr. Smith and Mr. Evans advised that the remuneration Ms. McRae expected was more than Magnetawan was prepared to pay. 31 Mr. Free said he understood there were gender issues with Council.

iv) Preliminary Discussions 32 Mr. Free and Mr. Evans each say it was the other that made the initial contact. Regardless, they had an initial telephone discussion. They knew each other from their prior positions with different municipalities in the County of Grey. Mr. Free expressed an interest in the position. Mr. Ev- ans invited Mr. Free to meet with the mayor. 33 On March 23, 2009, Mr. Free met with Mr. Smith and Mr. Evans informally at a restaurant in Huntsville. They had a discussion. 116 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

34 Mr. Free reports being informed by Mr. Smith at this meeting that the position would be permanent and full-time. He says the discussion was about this experience and with current local government issues. Mr. Free felt it was a positive meeting. 35 Mr. Smith described the meeting as an interview of Mr. Free for the interim position of CAO/Clerk. Mr. Evans said reference was made to the same model used when he started, namely as Acting CAO/Clerk, permanent if and when Council was pleased with the performance. 36 Mr. Free denied there was any suggestion at this meeting that the position would be temporary. 37 Mr. Free was invited to attend the Council meeting on March 30, 2009.

v) Council Meeting- March 30, 2009 38 Council moved into a closed session to have a discussion with Mr. Free at this meeting. 39 Mr. Free’s recollection is that the Mayor and councillors expressed satisfaction with his qualifications and the discussion involved a three- year contract. He produced minutes of the closed session that were initially prepared by Mr. Evans and altered by himself when converting from Word Perfect to Word. Mr. Evans said the document was not prepared by him and was not an accurate account of the meeting. 40 These minutes indicate the mayor recommended Mr. Free be hired initially for the position of Deputy Clerk and then CAO/Clerk after the departure of Mr. Evans in April. Mr. Free is recorded as saying he would need time to make sure this was the right move for him in the long term. No reference is made to a three year contract. 41 The minutes of the open session of this Council meeting were also provided by Mr. Free. There was no challenge to this document. The mayor is recorded as calling the meeting regarding a “temporary replacement” for Mr. Evans. After referring to going into and returning from closed session, the minutes indicate a resolution being passed approving the terms and conditions discussed in Closed Session for hiring Mr. Free as Deputy Clerk. By-law 2009-11 was then passed, appointing Mr. Free as Deputy Clerk. A copy of the by law was tendered in evidence. This document is also not in dispute. 42 Mr. Evans indicated the purpose of the meeting was for all members of council to meet Mr. Free and to discuss the temporary process. He Free v. Magnetawan (Municipality) D.J. Gordon J. 117

referred to the prior model on his appointment in 2007 in this regard. The acting or temporary position, he said, was the subject matter being discussed. 43 Mr. Smith reported the terms discussed at the meeting of Council being the same as at the initial meeting on March 23, 2009, namely a temporary, not permanent, position. He referred to the anticipated role of Mr. Free to assist council in reviewing applications that would be received for the permanent replacement for Mr. Evans.

vi) The Email Exchange 44 The Council meeting, both open and closed, was recorded as commencing at 1:00 p.m. and adjourning at 1:37 p.m. following passing of By-law 2009-11. Mr. Free returned to his home in Simcoe after the meeting. 45 At trial, the basis of Mr. Free’s wrongful dismissal claim was said to be based on contract having regard to the following email exchange: Earl Evans 31, March 2009 3:41 PM To: David Free RE: CAO Position — Magnetawan Hi David- Thank you for the email response. This is satisfactory for council and constitutes an agreement on their behalf. On personal note you may want to tidy this up with a formal contract in the future. Again, congratulations and best of Luck. I will be in touch. Earl Evans CAO/Clerk Municipality of Magnetawan ______David Free 31 March 2009 10:51 AM To: Earl Evans RE: CAO Position- Magnetawan Hi Earl Thanks for the phone call, and sorry for not being more specific in my response today. 118 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

a. I will commit to a 3 year engagement as the CAO/Clerk for Municipality of Magnetawan b. Magnetawan commits to a 3 year engagement contract and the municipality shall provide procedural fairness in aspects of employment of David Free in accordance with common law c. I accept the terms as described in your email pertaining to compensation at $45.00 per hour, 40 hours per week (to be reviewed every 6 months) d. Time worked to be flexible in light of relocation issues and evening meetings of council e. I accept the expenses for travel are in accordance with the Hiring Policy bylaw f. Employment Benefits to be provided in accordance with the Hiring Policy g. I accept the daily maximum of $125.00 with receipts during relocation period of up to 1 year while moving to the area. I trust the above will suffice of an official acceptance of the terms of appointment/contract. D. Free ______David Free 31 March 2009 6:33 AM To: Earl Evans RE: CAO Position — Magnetawan Hi Earl I accept the conditions as described. All of this is best developed within a contract and bylaw but I accept the terms as described below. D. Free ______Earl Evans 30, March 2009 3:48 PM To: David Free RE: CAO Position- Magnetawan Hi David- I hope you had a good drive home. Free v. Magnetawan (Municipality) D.J. Gordon J. 119

I was directed by Council to finalize the compensation details of your appointment as follows: Position of Chief Administrative Officer and Clerk to be appointed by bylaw April 8, 2009 Full Time Position (contract to be developed) Remuneration: $45.00 per hour, 40 hours per wee Benefits to be provided in accordance with Hiring Policy bylaw Relocation Expenses: Meals and Accommodation as per Hiring Pol- icy with a Daily maximum of $125.00 with receipts. You will have to work out the long-term arrangements with council like I did. Council also requested a two-year commitment and would prefer a 3 year commitment to the position of CAO/Clerk from yourself. Annual salary increases based on a positive performance review with possible bonus. Please let me know ASAP by email that you agree to these terms. Please accept my congratulations and best wishes in this position Earl Evans CAO/Clerk Municipality of Magnetawan 46 As hereafter discussed, Mr. Evans denies sending and receiving these emails. 47 Although Mr. Free said he retrieved the emails from the Magnetawan computer in June 2009, he did not produce or make any reference to them until April 2013. He said they had been “trashed” on his computer at some point. Mr. Free reported retrieving the emails after his examination for discovery in July 2012. 48 Mr. Free also says the minutes of the Closed Session of the Council meeting on April 8, 2009, prepared by him, confirm a formal contract established by these emails. These minutes were not tendered in evidence by Mr. Free. Rather, his counsel reported such would be done when Mr. Evans testified. However, Mr. Evans could not identify the document as he had left Magnetawan on April 3, 2009 and was not in attendance at the Council meeting on April 8, 2009. In result, the document was not proven. 49 Mr. Evans acknowledged there was likely an email exchange with Mr. Free following the Council meeting on March 30, 2009 but testified the documents tendered by Mr. Free are not those emails. 120 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

50 Mr. Evans stated he was not involved in any discussions with the Mayor or Councillors as to the terms and conditions of Mr. Free’s appointment outside of the council meeting. He would only communicate with Mr. Free if instructed to do so by council. This, he said, did not occur. Rather, Mr. Evans reported the actual terms and conditions of the temporary appointment of Mr. Free were discussed in the closed session of council when Mr. Free was present. 51 On reviewing the purported email exchange, Mr. Evans identified the following items he relied on in concluding these emails were not sent by him: a) the terms of the appointment were discussed in Closed Session; b) he would not communicate unless instructed by Council to do so and would not make a commitment on behalf of Council by email; c) he was not instructed by Council to do so; d) the reference to becoming CAO/Clerk was illogical as the appointment was only as Deputy Clerk; e) the language used is inconsistent with his practice, for example he would not refer to relocation expenses per hiring policy, possible bonus, constitutes agreement on behalf of Council or add personal comments in an email; f) the reference to a 40 hour work week was incorrect, it being 37.5 hours; g) the reference to benefits under the hiring policy was also incorrect as it was the personnel policy that applied; h) a bonus was not appropriate in a municipal setting; and i) there are a number of mistakes, such as: 1) the date is on the right- he always puts it on the left; 2) the date has a common after the number- should not happen on an automated email; 3) “Thank you” — always try to be grammatically correct and would not say this; 4) “Luck” — would not capitalize; and 5) “On a personal note” — would not use the phrase in a business email. 52 Mr. Smith had not seen these emails prior to trial. He indicated that the terms and conditions of Mr. Free’s appointment were discussed in the Free v. Magnetawan (Municipality) D.J. Gordon J. 121

Closed Session of council on March 30, 2009. These emails, he said do not reflect that discussion and further, Mr. Evans would not have com- municated an offer of position that council had not approved. 53 As previously mentioned, a forensic examination of the computers was not arranged. Mr. Free reported his computer being stolen in January 2011. Mr. Evans said his understanding was that Magnetawan was unable to produce emails from five years ago.

vii) Council Meeting- April 8, 2009 54 At the meeting of Council on April 8, 2009, By-law No. 2009-14 was passed appointing Mr. Free to the position of “Acting” CAO/Clerk. 55 As previously mentioned, the minutes of Closed Session were to be tendered in the examination of Mr. Evans. While done so, Mr. Evans could not identify the document. 56 Mr. Free said the reference to “Acting” in the by-law was a mistake. He was present at the meeting but reported the by-law as having been previously prepared by Mr. Evans. He indicated asking Council to remove the term but such was not done. 57 Mr. Evans acknowledged the possibility he prepared By-law 2009-14 as it was in the style of Magnetawan by-laws. He had left the municipality several days prior to this Council meeting and, therefore, could not comment as to what may have occurred. All that Mr. Evans could say is that the appointment of an Acting CAO/Clerk was consistent with Coun- cil’s approach. 58 Mr. Smith reported the by-law appointing Mr. Free as Acting CAO/Clerk as being accurate. The appointment at this Council meeting, he said, was meant to be temporary and that the intention was for Mr. Free to assist Council in finding a permanent replacement for Mr. Evans. 59 In cross-examination, Mr. Free was referred to a local newspaper article published April 16, 2009 announcing his being appointed as a temporary replacement for Mr. Evans and quoting him as saying Council was seeking applications for the permanent position. Mr. Free had no recollection of speaking to a newspaper reporter at the time, saying he does not talk to the media as that is the job of members of Council.

viii) Invoicing 60 Mr. Free incorporated Quality Management Systems Inc. some years ago. He reported establishing a consulting business, D.R. Free & Associ- 122 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

ates, as a division of the company in 2005. Mr. Free had been an independent contractor on prior occasions. 61 Throughout the time period Mr. Free was engaged with Magnetawan, he submitted invoices weekly in the corporate name for his services at the agreed upon hourly rate of $45.00 plus travel, accommodation and meal expenses and GST. All regular invoices were paid. The subsequent invoices, dated June 10, 2009 claiming overtime of $6426.00 was not paid. 62 Mr. Free said he understood he was an employee of Magnetawan. He reported that Mr. Smith instructed him to submit invoices instead. Al- though he objected, Mr. Free said he did not want to “rock the boat” and felt the situation would be corrected in a few months. 63 Mr. Free referred to Mr. Smith instructing the Treasurer, Ms. Saun- ders, as to the invoicing system. He said Ms. Saunders voiced her objection, wanting to pay him as an employee. 64 Ms. Saunders reported processing the invoices received from Mr. Free and payment of same. She said there was no discussion regarding the process and that Mr. Free never raised the issue as to the manner of payment. Ms. Saunders also advised there was no conversation with Mr. Smith as to the payment system. 65 Mr. Smith was expecting invoices from Mr. Free as had been the practice with Mr. Evans in 2007. He reported Mr. Free requesting the invoices be presented by his company. Mr. Smith said there was no discussion as to changing the payment system.

ix) Subsequent Events 66 Mr. Free commenced working at Magnetawan on April 6, 2009. Mr. Evans had left him a list of outstanding matters such as the 2009 budget and various by-laws. In fact, two lists were presented in evidence, dated March 31, 2009 and April 3, 2009, the reason for which is unclear although not contentious. Neither list made reference to the search for a permanent CAO/Clerk. 67 In March 2009, Mr. Evans had placed two advertisements on the AMCTO website. The first had a closing date of March 27, 2009. The second advertisement had a closing date of April 17, 2009. Mr. Evans advised that no responses had been received prior to his departure. Mr. Free would report to Council on May 26, 2009 that nine applications had been submitted. Free v. Magnetawan (Municipality) D.J. Gordon J. 123

68 Prior to the Council meeting on May 13, 2009 Mr. Smith reported receiving a telephone call from Mr. Urbanski. Mr. Urbanski was one of the applicants but had not received a response from Mr. Free. He inquired of Mr. Smith if his application was being considered or not. In Closed Session, Mr. Smith said he asked Mr. Free about the CAO search and responses to their advertisement. 69 Mr. Urbanski was invited to the Council meeting on May 27, 2009. He also attended the Council meeting on June 16, 2009 and was subsequently appointed as the CAO/Clerk in July 2009. 70 Mr. Free did not apply for the position as, he said, he had already been hired as the permanent CAO/Clerk on a three year contract. 71 According to Mr. Free, there was conflict with the mayor from the outset, including matters pertaining to the appointment of the Fire Chief and negotiations to lease certain property. Mr. Free felt Mr. Smith exceeded his authority. Mr. Smith reported Council having to deal with contentious matters in the Spring of 2009 but did not indicate any particular problems. In cross-examination, Mr. Smith said Mr. Free did a reasonable job for the municipality. 72 Leading up to the Council meeting on May 27, 2009 Mr. Free prepared a report identified as Council Report #2009-16, dated May 26, 2009. Two different copies of the report were presented in evidence, one produced by Magnetawan, the other by Mr. Free. Both are said to have been written by Mr. Free and they follow the same general format. 73 The primary difference in the documents is the reference to the status of Mr. Free. In the Magnetawan production, Mr. Free is said to describe his position as “interim CAO/Clerk”. In the production by Mr. Free, the reference is simply “CAO/Clerk”. 74 In these reports, Mr. Free describes a number of matters dealt with since he commenced his duties on April 6, 2009. He goes on to describe other items that should be addressed and then suggests that once done Magnetawan may not require a “fulltime” CAO/Clerk. He offers several alternatives, such as a part-time or shared CAO/Clerk. 75 Mr. Free also comments on the CAO/Clerk search, including the qualifications of candidates. He does not recommend any of the candidates. 76 At trial, Mr. Free said someone must have inserted the term “interim” in the Magnetawan production as it was never in the original report. The 124 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

purpose of the report, he said, was to report to council on work he had done and offer suggestions for Council to consider. 77 No minutes of the May 27, 2009 Council meeting were produced by either party. As previously mentioned, part of the Closed Session involved a discussion with Mr. Urbanski. 78 Mr. Free stated that one Councillor asked him if he would move to Magnetawan. He reported an affirmative response was provided and, further, that he was already the CAO/Clerk for the municipality. 79 Mr. Smith indicated there was somewhat of a dispute amongst members of Council at the May 27, 2009 meeting. He said Councillor Paul asked Mr. Free if he had considered the permanent position and that Mr. Free’s response was he did not know and that he would have to consult with his wife. 80 A series of emails followed this meetings, as follows: a. Councillor Paul to Mr. Free, Mr. Smith and others on June 4, 2009, saying: Hi David, Thanks for letting me know you have spoken to your wife about moving to our area. When I heard of your interest in the position of CAO longer term in our Municipality at the meeting last week it was new to me. We had received your report of your feelings about the position being able to be done in a part-time way. I am not convinced about that. I would like to have another interview with Mark Urbanski and consider the 2 proposals which we now seem to have on the table. Thanks again. Patti Paul b. Mr. Free to all members of Council on June 4, 2009 saying: Council I am please accept the offer of the above as discussed during the in-camera session of the May 27th Council. I have discussed the opportunity presented with my wife and both believe it would be an interesting opportunity. David Free c. Mr. Free to all members of Council on June 9, 2009 saying: Council Free v. Magnetawan (Municipality) D.J. Gordon J. 125

In an effort to comply with the resolution from last night’s Council meeting, I have been able to obtain the services of a local qualified Municipal Clerk who would be willing to be present for the above meeting. The individual is not available until Tuesday (any time during the day) June 14th. I have not made any calls other than to secure a qualified municipal clerk knowing this might have been the greatest challenge of the resolution passed last night. The desired meeting date of Thursday June 11th is therefore a challenge if it is an imperative Council’s preference of not having me present at the same. Please let me know ASAP if Tuesday June 13th is workable so that I can organize the appropriate parties. I surmise that a 1:00 pm meeting would be appropriate based on Mr. Uban- ski’s drive time from Brantford to Magnetawan. For the record, organizing this interview does not change in any form or fashion, my position of having accepted the position as CAO/Clerk last week as offered. I did not expect or surmise that my acceptance of the position would have caused such a great controversy or divide within Council such as witnessed last night. It was honestly believed that the offer was from all of Council not a few. I am disappointed at the unwarranted allegations and mis- perceptions given by certain Council members related to my tenure, successes and specific roles and reporting structures within the Magnetawan municipal organization. David Free 81 Mr. Smith advised that Council did not offer the permanent position to Mr. Free on May 27, 2009. Rather, he said only one councillor was in favour of so doing. Mr. Smith went on to say he understood Mr. Free to believe that he was accepting an offer from Council. 82 Another email was referred to by Mr. Free, this one coming from Councillor Tod on June 5, 2009 saying: David. I could get in trouble for this but this letter was sent to me by mistake by Kris Nicholls. Obviously Dick has a plan in mind regarding you. Keep this to yourself. Frankt 83 The attachment is said to be correspondence from the mayor to Coun- cillor Paul and Nicholls suggesting a method of getting out of the fulltime arrangement with Mr. Free. The correspondence was not proven as 126 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

to its truth and contents. Mr. Smith strennously denied ever authoring such a document. He added that Mr. Free was never hired as the permanent CAO/Clerk and suggested someone had created the document and put his name on it. 84 None of the four Councillors were called to testify at the trial by either party. 85 Mr. Free’s last day at work was on June 10, 2009. At Council meeting that day, a resolution was passed terminating the services of D.R. Free & Associates effective June 12, 2009. On July 8, 2009 By-law No. 2009-48 was passed by council to repeal By-law 2009-14 that had previously appointed Mr. Free as Acting CAO/Clerk. 86 Following the termination, Mr. Smith reported Mr. Free to have requested payment of $135,000.00 which was declined. Mr. Free, he said, indicated he would commence litigation and contact the Ombudsman. Mr. Smith also made reference to an investigation by the Ontario Provin- cial Police over eleven months that exonerated Council.

Damage Claim 87 In final submissions, Mr. Sheppard presented calculations for the damage claim based on a three year contract less ten weeks of actual service. The total claim for 146 weeks of “salary”, plus interest and pension, was $330,011.30. Mr. St. John did not challenge the amount, only entitlement. 88 The damage calculation is on the same basis that D.R. Free & Associ- ates had invoiced and been paid, namely $1800 per week plus GST or HST.

Issues 89 Reference was made at the outset as to the nature of the dispute between the parties. In final submissions, counsel identified the issues requiring determination as involving: a) amending the Statement of Claim; b) fixed term contract or temporary position; c) employee or independent contractor; and d) damages. Free v. Magnetawan (Municipality) D.J. Gordon J. 127

Analysis 90 There is no dispute regarding applicable legal principles. The case is essentially fact driven.

i) Amending the Statement of Claim 91 In closing submissions, Mr. Sheppard requested an order, nunc pro tunc, amending the Statement of Claim to conform with the evidence at trial so as to allow the claim to be alleged as based on a three year employment contract and damages of $330,000.00. Mr. St. John opposes, saying he was defending a claim for $180,000.00 as had been pleaded in the fresh as amended Statement of Claim. 92 Disclosure of the purported emails, on which the contract is said to be based, did not occur until April, 2013. Until then, this was a notice case. 93 Mr. Sheppard was retained in January 2013. The concept of a fixed term contract was not raised until the pre-trial conference in January 2014. A motion to amend was not served as the case was listed for trial, according to Mr. Sheppard. I disagree, leave of the Court could and should have been sought to amend. 94 Rule 26, Rules of Civil Procedure, provides that leave to amend a pleading at any stage of an action shall be granted unless prejudice cannot be compensated by costs or adjournment. 95 Mr. St. John was aware of the allegation of a fixed term contract since production almost a year ago. While the amount of the claim may not have been disclosed, he and his client would have been able to calculate it based on prior payments to D.R. Free & Associates. Notice had been provided by Mr. Sheppard, on March 6, 2014, of the plaintiff’s intention to rely on the emails at trial, as required by the Evidence Act. 96 Hence, the defendant cannot say it was unaware of the nature of the claim being advanced. 97 Although I am of the view the amendment should have been requested much earlier, so that the defendant and the Court had a full appreciation of the nature of the claim, I am not persuaded any significant prejudice would result from this late amendment. 98 Accordingly, the motion is granted. I do so reluctantly. The matter may re-surface on the issue of costs. 128 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

ii) Was This a Fixed Term Contract? 99 The position of Mr. Free is that the email exchange on March 30 and 31, 2009 constitutes an offer and acceptance and, hence, established a three year contract. Magnetawan says the emails did not occur as presented. 100 Correspondence exchanged between parties is admissible in evidence regarding the issue of formation of a contract. See: Stevenson v. Dandy, [1920] 2 W.W.R. 643 (Alta. C.A.), at paragraph 82, citing Wigmore on Evidence, Can. Ed. Vol. iii, sec 2152. Emails are simply an electronic form of correspondence. 101 If the emails are accepted as the contract between the parties, the parol evidence rule would apply and extrinsic evidence would not be admissible. See: Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129 (S.C.C.) at paras.54-55. 102 Mr. Sheppard made known his reliance on the parol evidence rule at the outset of trial. Evidence pertaining to the emails, and indeed, with respect to the employment relationship was tendered. Such evidence is not extrinsic in respect to the terms of the contract at this stage. Rather, the evidence is relevant to the issue of whether the email exchange as presented at trial actually occurred. 103 The onus is on the plaintiff, on a balance of probabilities, to prove the contract. I am not persuaded he has done so for several reasons: a) having regard to the documents not in dispute; b) evidence challenging the emails; c) inconsistencies and other problems in the evidence of Mr. Free.

a) Other Documents 104 The Clerk is a mandatory position for a municipality under the Muni- cipal Act. 105 A CAO has become a permitted position and is now a common practice. Contrary to Mr. Free’s assertion, an “Acting” clerk is allowed on a temporary basis to avoid a vacancy in the office. 106 By-law No. 2009-14, passed on April 8, 2009 appointed Mr. Free to the position of Acting CAO/Clerk. The by-law is a clear representation of the intentions of Council. The by-law was never amended. It was only repealed, by By-law No. 2009-48 on July 8, 2009, after Mr. Free had left Magnetawan. Free v. Magnetawan (Municipality) D.J. Gordon J. 129

107 By-law No. 2009-48 supports the conclusion Mr. Free’s appointment was temporary. Further support for that proposition is found in the by- laws passed in 2007 when Mr. Evans was likewise appointed Acting CAO/Clerk and then as CAO/Clerk. 108 The appointment of an Acting or temporary CAO/Clerk is also a logical decision. The municipality had to deal with the resignation of Mr. Evans. A vacancy in the office of Clerk is not permitted. The hiring process for such a position takes time. A temporary appointment allows such to occur with minimal disruption.

b) Evidence Challenging The Emails 109 Mr. Smith stated that Council did not authorize or direct Mr. Evans to communicate an offer of employment to Mr. Free. There are no Council minutes requiring any communication, the terms having been discussed in Closed Session. However, the critical evidence on this issue comes from Mr. Evans. 110 Mr. Evans denied the email exchange occurring as presented in evidence by Mr. Free. More importantly, he articulated a number of reasons, including the lack of direction from Council. 111 The detailed examination of the emails by Mr. Evans was most per- suasive as it went beyond a mere denial. He identified a number of items in the documents, such as language he would not use, mistakes including the location of the date and grammatical errors. My impression of Mr. Smith’s manner of communicating is that he is most attentive to detail and formality in a business email. 112 I accept Mr. Evan’s evidence that a comma should not appear in the date on an automated email. I also accept his evidence that he always put the date on the left. Indeed, I note with some interest that the dates on all other emails tendered in evidence, including those from Mr. Free, are on the left side. 113 Mr. Evans acknowledged there was likely an email exchange but such would not have involved an offer of employment. Otherwise, cross-examination did not weaken his evidence. 114 Mr. Evans has no interest in this case other than his professional repu- tation. His evidence, in my view, was credible and reliable. The attention to detail, as opposed to generic denial, was most helpful in resultant analysis. 130 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

c) The Evidence of Mr. Free 115 Mr. Free’s explanation for the late disclosure of the emails is troubling. He commenced this action in July 2009, within a month of termination. No doubt, his then counsel would have informed him of the neces- sity of disclosure and production of all relevant documents. Other documents in this time period of lesser importance, such as the email from Mr. Tod, were disclosed. Yet these emails were not. Surely, having retrieved the emails from the Magnetawan computer in June 2009, as he testified, would have resulted in them being fresh in his mind a month later. 116 An attempt was made to rely on documents not proven in evidence as to the truth of their contents, including the Minutes of Closed Session on April 8, 2009 and the attachment to Mr. Tod’s email dated June 5, 2009 117 Of some interest, the Minutes of Closed Session on March 30, 2009 were initially prepared by Mr. Evans but altered by Mr. Free. Neverthe- less, there was no mention of a fixed term contract even though this event preceded the purported emails. Mr. Free is recorded as saying he needed time to make sure this was the right move for the long term. This is inconsistent with his evidence at trial. Mr. Free would have prepared those minutes in April 2009. 118 There is an obvious concern with the two different Council Reports dated May 26, 2009. They should be the same. Mr. Free claims the Magnetawan production was altered by inserting “interim” in describing the CAO/Clerk position. No evidence was tendered to support his belief. I find Magnetawan production to be accurate as it is consistent with By- law No. 2009-14 and related evidence. 119 Regardless, even in Mr. Free’s production there was no reference to a three year contract, saying only that his position was “permanent”. Yet in his report, Mr. Free is commenting on the applications recently received and is making suggestions for Council to consider regarding the future of the position of CAO/Clerk. 120 Mr. Free attempted to draw Ms. Saunders into the debate with reference to invoicing and the mayor’s involvement. She declined to do so and, indeed clearly stated there were no such discussions as Mr. Free alleged. Ms. Saunders was a most credible witness. She had no interest in this lawsuit and was not challenged in cross-examination. Free v. Magnetawan (Municipality) D.J. Gordon J. 131

121 Lastly, throughout the litigation process Mr. Free has taken a number of different positions, all inconsistent with the claim of a fixed term contract. 122 The fresh as amended Statement of Claim indicates this was a notice case, with Mr. Free, in essence, being an employee of indefinite duration. He also relied on the purported offer from Mr. Smith on March 23, 2009 of a permanent position. Mr. Free then communicates, on June 6, 2009 the acceptance of Council’s offer on May 27, 2009 but at trial said he had already accepted the offer on March 31, 2009. Further, in the prior motion for summary judgment Mr. Free sought damages equivalent to four months of notice, made no reference to a fixed term contract but reported an offer from Council of 22 months to the end of its term. 123 Mr. Free blames his former counsel for the documentation on the summary judgment motion. These many inconsistencies are troubling, particularly when numerous documents are referred to in the affidavits on the motion, yet no mention was made of the email exchange. 124 Mr. Free was an experienced municipal Clerk and would understand the importance of documents. To suggest he was unaware of the relevance of the emails for four years is simply not believable. I reject his evidence in this regard.

d) Summary 125 For the foregoing reasons, I do not accept Mr. Free’s assertion as to the accuracy of the emails. I do accept Mr. Evan’s evidence that no offer of permanent employment was presented. 126 Accordingly, I reject the claim of Mr. Free regarding a fixed term contract of three years. 127 What, then, was the agreement?

iii) The Agreement 128 There being no document accepted as establishing a contract of employment as claimed, it becomes necessary to make the determination based on the evidence tendered. The question now becomes whether the agreement was for an indefinite or temporary position. 129 Having rejected the purported email exchange, the evidence, in my view was overwhelming. 130 As previously stated, By-law No. 2009-14 clearly indicated Council’s intention to appoint Mr. Free as Acting or Temporary CAO/Clerk. The 132 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

closing date for the second advertisement was April 17, 2009. Mr. Free reviewed the nine applications received in response to the advertisement. Council net with Mr. Urbanski on several occasions. Mr. Free did not apply for the permanent position. The established practice of Magnetawan was to appoint an Acting CAO/Clerk before making a permanent appointment. 131 On all of the evidence, I conclude the appointment of Mr. Free was temporary, to expire once a decision was made for a permanent replacement. While By-law 2009-48, repealing Mr. Free’s appointment, was not passed until July 8, 2009, the entitlement to compensation for Mr. Free’s services came to an end with the resolution passed on June 10, 2009. Given the temporary nature of the position, and the expectation it would be brief, I conclude no notice of termination was required.

iv) Employee or Independent Contractor 132 The appointment to the position of CAO/Clerk, either temporary or permanent, does not create an employment relationship. The negotiations for the provision of services is what is determinative. Here, there is no dispute such was to be $45.00 per hour and certain expenses. 133 There was dispute as to whether it was Mr. Free or Mr. Smith who directed payment for services on invoices presented. Regardless, only Mr. Free could direct payment to his company. 134 In Mr. Free’s Request to Admit, dated February 28, 2014, he asserts: The parties agreed that remuneration would be made payable to a private company controlled by the plaintiff, rather than to the plaintiff personally. 135 In Magnetawan’s response, it simply says “admits”. 136 While not determinative, the invoicing system was consistent with Magnetawan’s practice. As long as he was the Acting CAO/Clerk, I find that Mr. Free, or his company, was an independent contractor. He never was an employee.

v) Damages 137 In the event my analysis is incorrect on the above issues, I propose to briefly comment on damages. Free v. Magnetawan (Municipality) D.J. Gordon J. 133

138 The now amended claim seeks a damage award of $330,0111.30, as follows: a) salary $ 289,044.00 b) prejudgment interest $ 7, 892.30 c) OMERS contribution $ 33,075.00 139 The salary is calculated for 146 weeks, being the remainder of the purported three year contract, plus GST or HST. 140 Mr. St. John did not address the calculation of damages in his submissions, other than to oppose the amendment of the Statement of Claim. 141 Mr. Sheppard submits damages resulting from the termination of a fixed term contract of employment are to be assessed for the balance of the term. In general, I agree. See: Spark v. Generex Pharmaceuticals Inc., 1999 CarswellOnt 3893 (Ont. S.C.J.) at paras 34 and 35, citing E.E. Mole & M.J. Stendon, eds., Butterworths’ Wrongful Dismissal Practice Manual, looseleaf (Markam: Butterworths, 1999); and Professor Wad- dams, The Law of Damages, 3rd ed. (Auror: Canada Law Book, Inc. 1997). 142 The plaintiff has a duty to mitigate even where the contract for employment is for a fixed term. See: Spark, supra, at para. 37. However, Magnetawan did not plead mitigation, presented no evidence on the topic and did not cross-examine Mr. Free on his efforts to obtain further employment. Hence, mitigation is not a factor requiring determination. 143 I have concluded the position was temporary and there can be no damage award. 144 If the position was of an indefinite nature, in the circumstances of this case a damage award equivalent to four months notice, or $31,000.00 (rounded), would not be unreasonable. 145 If the position was for a fixed term of three years, the damage award would be the equivalent of the salary for 146 weeks, or $262,800.00. GST and HST would be added if the contract is based on the prior invoicing, although that would be inconsistent with the purported emails. There was no evidence as to the calculation of the pension contribution but the amount was not challenged and is likely reasonable. 146 For the foregoing reasons, the action is dismissed. If the parties are unable to agree on the issue of costs, brief written submissions are to be 134 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th) delivered to my chambers in Cayuga within 30 days of the release of this decision. Action dismissed. Vancouver Board of Parks and Recreation v. Williams 135

[Indexed as: Vancouver Board of Parks and Recreation v. Williams] Vancouver Board of Parks and Recreation, Plaintiff and Brody Williams, Anthony Gauthier aka Anthony Guitar, Audrey Siegl, Dan Wallace, Stella August, Jane Doe, John Doe and other unknown persons, Defendants British Columbia Supreme Court Docket: Vancouver S147397 2014 BCSC 1871 Duncan J., In Chambers Heard: September 29, 2014 Judgment: September 30, 2014 Remedies –––– Injunctions — Procedure on application — Adjournment of application — Miscellaneous –––– Plaintiff Board of Parks and Recreation brought application for interlocutory injunction requiring defendants and all other persons having knowledge of order to forthwith remove all structures, tents, shelters, objects, and things owned, constructed, maintained, placed, or occupied by them which were located in park — Board was ready to proceed with its application — Submissions were made in support of adjournment — Adjournment to certain specified date was appropriate — Defendants should have adjournment to marshal evidence and submissions about injunction and, if one was granted, about how it was to be carried out — Vast majority of people residing at park must have known day was coming when board turned to courts for legal redress — Timeframe was not so long as to drastically increase risks articulated by counsel for board, nor so short as to completely prejudice ability of defendants to demonstrate impact of interlocutory injunction on them — Court was prepared to make interim order governing conditions at park to alleviate as many of concerns that police and fire personnel had articulated as could be done in interim order — Court was also prepared to go so far as to direct creation of list of persons living at park, so city officials could get realistic and current idea of how many of them actually needed housing. Cases considered by Duncan J., In Chambers: Vancouver Board of Parks & Recreation v. Mickelson (2003), 2003 CarswellBC 1997, 2003 BCSC 1271, 38 C.P.C. (5th) 110, 41 M.P.L.R. (3d) 82, [2003] B.C.J. No. 1892 (B.C. S.C.) — followed Vancouver (City) v. O’Flynn-Magee (2011), 2011 BCSC 1647, 2011 Car- swellBC 3205, [2012] 3 W.W.R. 575, 91 M.P.L.R. (4th) 197, 26 B.C.L.R. 136 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

(5th) 155, 342 D.L.R. (4th) 190, 15 C.P.C. (7th) 370, [2011] B.C.J. No. 2305 (B.C. S.C.) — followed Victoria (City) v. Adams (2008), 88 B.C.L.R. (4th) 116, 50 M.P.L.R. (4th) 210, [2009] 4 W.W.R. 303, 2008 CarswellBC 2156, 2008 BCSC 1363, 299 D.L.R. (4th) 193 (B.C. S.C.) — considered Statutes considered: Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 Generally — referred to s. 7 — considered Constitutional Question Act, R.S.B.C. 1996, c. 68 Generally — referred to

RULING concerning adjournment.

B. Parkin, B.D. Jordan, for Plaintiff B. Williams, for himself Anthony Gauthier aka Anthony Guitar, for himself D. Wallace, for himself G. Jackson, for S. August T.M. Pontin, D.J. Larkin, for Agatha Reid, John Allen, Scott Bonnyman, and other unknown persons

Duncan J., In Chambers (orally):

1 The Vancouver Board of Parks and Recreation, (hereafter the “Parks Board”), applies for an interlocutory injunction requiring the defendants and all other persons having knowledge of the order to forthwith remove all structures, tents, shelters, objects, and things owned, constructed, maintained, placed, or occupied by them which are located on lands known as Oppenheimer Park in Vancouver. 2 The application is rooted in the disobedience of City of Vancouver by-laws by individuals who have occupied the park since approximately July 17, 2014. 3 The Parks Board also applies for conditions relating to setting fires or the use of other burning materials, depositing garbage or refuse in the park, and so on. Along with these conditions, the Parks Board seeks enforcement clauses to permit City workers and, if necessary, members of the Vancouver Police Department, to ensure the dismantling and removal of structures and objects in the park. Vancouver Board of Parks and Recreation v. Williams Duncan J. 137

4 Several of the named defendants appeared in person, specifically Brody Williams, Anthony Guitar, and Dan Wallace. Mr. Williams also appeared on behalf of Audrey Siegl, who was unable to attend on Sep- tember 29. Stella August was represented by counsel, Ms. Jackson, for the limited purposes of the first appearance. Finally, Mr. Pontin and Ms. Larkin appeared as counsel for Agatha Reid, John Allen, and Scott Bon- nyman, three individuals who currently reside in the park. 5 Counsel for the Parks Board is ready to proceed with its application. Mr. Pontin, Ms. Jackson, Mr. Wallace, and Mr. Williams all made submissions in support of an adjournment to enable them to amass and file materials in response to the application. I will deal with their submissions in turn. 6 Mr. Pontin sought an adjournment of 10 days to enable his clients to properly respond to the application. He was retained last Friday afternoon. Mr. Pontin advised that the vast majority of people living in the park are homeless. Most are vulnerable and marginalized people who live in poverty, many of whom are victims of abuse, addiction, and are suffering from mental health difficulties. Mr. Pontin says there are Char- ter issues at play and that by-laws similar to the ones at issue here have been found to contravene the Charter. In particular, Mr. Pontin says the s. 7 right to life, liberty, and security of the person is engaged. This in turn elevates the test the Parks Board must meet to secure the injunction, in his submission. 7 Mr. Pontin acknowledges the Parks Board’s concerns which ground the injunction application are legitimate, but argues that to achieve the necessary balancing there needs to be a proper record before the court, not a rushed hearing on a single day’s notice. He identifies several areas of concern that, in his submission, require evidence and argument: • First, the court needs to hear evidence about the impact of the injunction, as well as what plan will be in place to transition people out of the park and into new housing situations. • Second, the Parks Board’s materials leave the reader with the impression that all that can be done has been done to assist the homeless in the park. By contrast, people affected do not see it that way. Mr. Pontin characterizes this as an information gap, citing anecdotal examples of people in the park who are unaware of the options the City of Vancouver has to offer homeless people. He emphasizes the need for time to facilitate the process of con- necting people with appropriate services. 138 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

• Third, further argument and evidence is needed concerning the viability of available shelter space. • Fourth, the timing of the order, if one is granted, is a delicate matter in terms of how it is to be carried out. Some of the housing the City of Vancouver has to offer to persons displaced by an injunction will not be available until the middle of October. 8 To substantiate the submission that carrying out any order is a delicate matter and to fortify the contention that there is an information gap, Mr. Pontin took me through an affidavit sworn by Wendy Pederson. Ms. Pederson lives and works in the Downtown Eastside and interviewed several people in the park about circumstances unique to each of them which complicate their housing situation. One of them, a veteran of mili- tary service in Afghanistan, has encountered significant barriers to obtaining financial assistance and does not do well in crowded, noisy shelters because he has Post-Traumatic Stress Disorder. Other examples are cited in Ms. Pederson’s affidavit. 9 Finally, Mr. Pontin disputes that there has been a change in conditions at the park in the past few days necessitating an urgent response to the encampment. He maintains that if the encampment at the park is dismantled, it will spread any public order issues out across the city, instead of keeping them contained in the park area. He points to data about incident reports in the park which, in his submission, does not reflect an up- ward trend in negative behaviours. 10 Mr. Pontin acknowledges the affidavit evidence from a fire official detailing concerns about safety, such as the use of fires and candles in the park, but suggests these concerns can be the basis of a short-term tailored order pending a full hearing of the application. 11 Mr. Wallace spoke for himself and on behalf of the people of the Salish, Musqueam, Xats’alanexw, Heiltsuk, and Haida Nations who live at the park. He echoed the concerns of Mr. Pontin that the defendants have not had sufficient time to retain legal counsel or collect evidence to assist the court. He himself received the affidavits filed by the Parks Board midway through the hearing on Monday, and advised me he did not have an opportunity to review them prior to making his initial submissions. 12 Mr. Wallace is involved as part of the core group that started the encampment at the park and he remains involved to ensure aboriginal rights are protected as the matters progress. He referred to the fact that there is Vancouver Board of Parks and Recreation v. Williams Duncan J. 139

security in the camp and they work hard to keep the peace there. If the camp is dismantled, he says it will simply spread any problems to other areas of the Downtown Eastside. Mr. Wallace also says that people at the camp have access to services they may not have access to if they live elsewhere. He maintains the campers have been working with police and fire officials on health issues and that policing thus far has been carried out in a very respectful manner. If there are concerns about security, he is prepared to go back to his group to work on calming things down. 13 Mr. Wallace candidly acknowledges that one day the park will have to be vacated, but for the time being he characterizes the camp as a dem- onstration of civil disobedience aimed at changing policies on homelessness. 14 Mr. Guitar initially sought to be removed as a named defendant, but he advises he is also one of the original founders and wishes his name to stay on the proceedings. He adopted the submissions of Mr. Wallace concerning the need for an adjournment. 15 Mr. Williams adopted the submissions of Mr. Wallace on his behalf and on behalf of Ms. Siegl. 16 Finally, Ms. Jackson in her capacity as counsel with limited retainer to appear for Ms. August, asked that Ms. August’s name be removed from the pleadings, as she does not reside at the camp. She is a native elder who has been at the camp supporting a group of people on a spiri- tual healing journey. Ms. August is unaware of the offers of housing from the City and feels that shelters are not an option, as the park is actually safer and cleaner, though she does not have a structure or tent there. In the alternative, if her name is not removed from the pleadings, she too would need time to prepare to properly respond. 17 Mr. Parkin, for the Parks Board, acknowledges that named individuals may wish to retain counsel, but suggests they can utilize the services of Mr. Pontin and his co-counsel, Ms. Larkin so the application can proceed expeditiously. On the issue of the defendants wishing to file materials, Mr. Parkin quite correctly points out that this is an interlocutory application, not a trial of constitutional issues or of what is available to homeless people. 18 Mr. Parkin took me through recent authorities in this area of jurisprudence, specifically Vancouver Board of Parks & Recreation v. Mickel- son, [2003] B.C.J. No. 1892 (B.C. S.C.) which dealt with a tent city at Thornton Park in Vancouver, as well as Vancouver (City) v. O’Flynn- 140 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

Magee, [2011] B.C.J. No. 2305 (B.C. S.C.) which dealt with the Occupy Movement’s residency at the Vancouver Art Gallery. 19 Mr. Parkin acknowledged the decision of this Court in Victoria (City) v. Adams, 2008 BCSC 1363 (B.C. S.C.) was most favourable to the defendants as it dealt with the constitutional validity of by-laws concerning the use of public spaces, but maintains that case is distinguishable on the basis that the by-law at issue there was different and the evidence here is better concerning how displaced persons are to be housed. 20 He points out that even in the Adams litigation, constitutional arguments were not entertained by the court at the interlocutory injunction stage. When such an argument is raised there must, of course, be notice to the Attorney General under the Constitutional Question Act. 21 The Parks Board submits the evidence is clear that the individuals living at the encampment are not willingly leaving but are, in fact, delib- erately flouting the by-laws. Any concerns the park residents have about an orderly transition, he says, can be addressed in the order and therefore there is no reason to adjourn the application for the defendants to adduce evidence. He says the campers appear to evince an intention to stay as long as they can and show no intention to leave without a court order. 22 Mr. Parkin took me through the affidavits filed in support of the injunction which detail the shelter space that is currently available and the efforts of the City to assist people to move into those spaces. It appears that most who are offered the spaces decline them. The fact that there is available shelter is relevant to moving forward with the injunction, but the fact that it does not meet the requirements that are being articulated by park residents is not relevant, in counsel’s submission. 23 Mr. Parkin expressed the concern that any delay allows for more disorderly conduct. He pointed to media reports about a splinter group ap- parently intending to set up camp elsewhere in the City of Vancouver. 24 In support of the concerns about disorderly conduct, the Parks Board filed the affidavit of Joe Foster, the Assistant Chief of Emergency Man- agement in the Vancouver Fire and Rescue Services. Mr. Foster has attended the park numerous times since its inception in July and has observed ceremonial fires in the vicinity of flammable objects, candles inside tents, other instances of open flames, smoking inside tents or temporary structures, a volume of combustible materials near possible igni- tion sources, and tents in such close proximity to each other that there is Vancouver Board of Parks and Recreation v. Williams Duncan J. 141

a real potential for a fire to move quickly from one tent to another. Ac- cess by the Fire Department in such circumstances is problematic. 25 Of more concern is an observation Mr. Foster made on September 3rd. He saw smoke billowing out of a makeshift structure in the park and called the Fire Department. Park residents pulled a sleeping man out of the tent. Inside the tent, Mr. Foster observed a candle had caused card- board and wood to smoulder and burn, creating the smoke. 26 Mr. Foster has also seen, on his frequent visits to the park, many fights take place; an individual wildly swinging a weapon; buckets of urine and feces kept in tents; and rats in and around the tents. He also deposes to the fact that when he began visiting the park, there appeared to be an identifiable leadership group, but says that now those persons are not present as often as before, and his impression is the camp has become more volatile and less structured. 27 Mr. Foster’s observations are largely mirrored by those of Inspector Howard Chow of the Vancouver Police Department. He has monitored the camp’s evolution since July and has documented incident reports. He deposes that there was an incident where a man threatened a woman with a bat; that a convicted sex offender was seen in the park on playground equipment; and a golf club was used as a weapon in a fight between residents. Further, Inspector Chow deposes there is reason to believe that evidence of a homicide in another jurisdiction is or may be secreted in a tent in the park. 28 Inspector Chow is of the view there is an ongoing subtle, but detecta- ble, escalation in problematic and criminal behaviour in the park. The initially cooperative nature of dealings with the residents has been re- placed by a situation where officers will not go into the camp without backup. Added to this is an increasing amount of money being spent in a small area of the city by way of policing costs. 29 I pause to note that counsel for the defendants and the defendants themselves tend to downplay the observations of Inspector Chow as typical of life on the Downtown Eastside and better contained in a small area than spread out. I do not accept this characterization. The police concerns are valid and documented. Maintaining that compressing the difficulties into a small geographical area is a better use of police resources is a false economy. The close quarters and deteriorating living conditions in the park appear to be propelling the situation towards further and greater instances of disregard for the law. 142 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

30 Taking into account the submissions I have heard and the law governing interlocutory injunctions, I conclude that the defendants should have an adjournment to marshal evidence and submissions about the injunction and, if one is granted, about how it is to be carried out. I am mindful of the fact that Mr. Pontin seeks a 10-day adjournment because of the unique situation he faces with a potential client base of hundreds of people whose lives are far from certain or stable. I am mindful of the fact that Mr. Wallace and others have not yet retained counsel, but wish to do so. 31 That said, the vast majority of the people residing at the park must have known the day was coming when the Parks Board turned to the courts for legal redress, notwithstanding the patience and restraint that City officials, police, and fire personnel have shown in their dealings with people living in the park. 32 Balancing the interests of both sides, I have concluded that an adjournment to next Monday, October 6, is appropriate. This timeframe is not so long as to drastically increase the risks articulated by counsel for the Parks Board, nor so short as to completely prejudice the ability of the defendants to demonstrate the impact of an interlocutory injunction on them. 33 This adjournment does not come without a price to residents of the park. I am prepared to make an interim order governing conditions at the park to alleviate as many of the concerns that police and fire personnel have articulated as may be done in an interim order. I am also prepared to go so far as to direct the creation of a list of persons living at the park, so City officials can get a realistic and current idea of how many of them actually need housing. 34 I anticipate that two days should be sufficient to fully hear both sides, and I would anticipate rendering a decision quite quickly after hearing the submissions of both sides. 35 So counsel and named defendants, those are my reasons with respect to the adjournment. The injunction application will be heard next Mon- day, October 6, 2014 starting at ten o’clock. Order accordingly. Methuku v. Barrow 143

[Indexed as: Methuku v. Barrow] Sridhar Reddy Methuku, Applicant and Dave Barrow, Respondent Ontario Superior Court of Justice Docket: Newmarket CV-14-118114-00 2014 ONSC 5277 M.L. Edwards J. Heard: September 5, 2014 Judgment: September 12, 2014 Municipal law –––– Council members — Conflict of interest — Voting on measure –––– Applicant councillor was both resident of town as well as candidate for position of mayor in upcoming municipal election scheduled for fall of 2014 — Respondent had been mayor of town since 2006 — Respondent was obliged, both by declaration of office as well as provisions of Municipal Con- flict of Interest Act, to declare all pecuniary interests that he had in any matter before council or committee of council — In April 2013, town’s budget committee met to approve 2013 draft operating budget of town and forwarded it for consideration by council — Amongst various items that were referenced in 2013 draft operating budget was reference to approved budget for 2012 for engagement and marketing account, item involving $84,300 — At meeting, second councillor presented motion that respondent personally repay town $10,800 for over-expenditure in account — Minutes of meeting made it clear that respondent spoke against motion and did not declare any conflict of interest — Motion was defeated — Applicant councillor brought application seeking declaration that mayor was in conflict of interest — Application dismissed — There was no evidence to support any suggestion that respondent misappropriated funds from account, nor that any funds were used from this account for personal purposes — Affidavit of commissioner of corporate and financial services for town made it clear that there was no over expenditure in account — Assuming account had been overspent, there was no by-law that authorized town and any of its officials to seek restitution or reimbursement for any over expenditure within town budgeted item — What was sought in present case was for elected official to bear personal responsibility for alleged over expenditure within budget, albeit over expenditure for which elected official derived no personal benefit — Motion on conflict of interest was moved by one of respondent’s political rivals who later sought mayor’s seat in forthcoming political municipal election — Motion’s sole purpose was creation of appearance of impropriety on respondent’s part — Respondent had not contravened s. 5 of Act by speaking and voting on motion 144 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th) because town did not have power to require someone like respondent to repay personal expenses for which there had been over expenditure. Cases considered by M.L. Edwards J.: Blyth v. Northumberland (County) (1990), 1990 CarswellOnt 456, 2 M.P.L.R. (2d) 155, 75 O.R. (2d) 576, [1990] O.J. No. 2166 (Ont. Gen. Div.) — followed Greene v. Borins (1985), 28 M.P.L.R. 251, 18 D.L.R. (4th) 260, 8 O.A.C. 141, 50 O.R. (2d) 513, 1985 CarswellOnt 666 (Ont. Div. Ct.) — considered Hervey v. Morris (2013), 9 M.P.L.R. (5th) 96, 2013 ONSC 956, 2013 Carswell- Ont 2774 (Ont. S.C.J.) — considered Magder v. Ford (2013), 2013 CarswellOnt 387, 2013 ONSC 263, 355 D.L.R. (4th) 142, 7 M.P.L.R. (5th) 1, 52 Admin. L.R. (5th) 127, 113 O.R. (3d) 241, 302 O.A.C. 333 (Ont. Div. Ct.) — followed Mondoux v. Tuchenhagen (2011), (sub nom. Tuchenhagen v. Mondoux) 107 O.R. (3d) 675, 2011 ONSC 5398, 2011 CarswellOnt 11438, 88 M.P.L.R. (4th) 234, 284 O.A.C. 324, [2011] O.J. No. 4801 (Ont. Div. Ct.) — referred to Statutes considered: Municipal Act, 2001, S.O. 2001, c. 25 s. 11(2) — considered s. 11(3) — considered Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 Generally — referred to s. 4(h) — considered s. 4(k) — considered s. 5 — considered s. 5(1) — considered s. 9 — considered s. 9(1) — considered s. 10(2) — considered

APPLICATION for declaration of conflict of interest under s. 5(1) of Municipal Conflict of Interest Act.

John Mascarin, Jody Johnson, for Applicant Charles Loopstra, Daron Earthy, for Respondent Methuku v. Barrow M.L. Edwards J. 145

M.L. Edwards J.: Overview 1 Municipal politicians are often called upon to deal with the grassroots issues which concern the day to day lives of local residents. These same politicians are required to maintain the highest of standards when it comes to situations when they may find themselves in a possible conflict of interest. While most municipal politicians undoubtedly know when they may be in a potential or real conflict of interest, the Municipal Con- flict of Interest Act, R.S.O. 1990 c. M.50 (“the MCIA”), and specifically section 5(1) thereof, makes clear that elected representatives must refrain from participating in the discussion of, and voting on matters in which they could be influenced because the matter might impact their personal financial interests. 2 The issue which this court is called upon is to determine whether or not the respondent Dave Barrow, the present Mayor of the Town of Richmond Hill (“The Town”), failed to disclose a pecuniary interest necessitating his removal from office when he voted on a motion that he “personally repay the Town $10,800 for the over-expenditure in the En- gagement and Marketing Account...”

The Facts 3 The applicant, Sridhar Methuku, is both a resident of the Town as well as a candidate for the position of mayor in the upcoming municipal election scheduled for the fall of 2014. The applicant filed his nomination papers as a candidate for the Office of Mayor on February 7, 2014 and commenced this application on March 11, 2014. 4 The respondent, Dave Barrow, is the Mayor of the Town and has occupied this position since 2006. The respondent’s involvement in municipal politics dates back to 1978 when he first served as a ward counsellor for the Town. Like the applicant, the respondent is also a candidate for the position of mayor in the fall election. 5 In his position as mayor, the respondent like all other members of council, has taken the mandatory declaration of office which provides in part: I will disclose any pecuniary interest, direct or indirect, in accordance with the Municipal Conflict of Interest Act. 6 There is no dispute between the parties that the respondent is obliged, both by the aforesaid declaration as well as the provisions of the MCIA, 146 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

to declare all pecuniary interests that he has in any matter before council or a committee of council, and that in addition to such declaration he would be obliged to refrain from discussing, speaking to and voting on any matters in which he had a pecuniary interest. In point of fact the respondent had, on a number of occasions prior to the occasion in question, declared pecuniary interests in various matters and thus fulfilled his obligations under the MCIA. 7 On April 11, 2013, the Town’s Budget Committee of the Whole of the met to approve the 2013 draft operating budget of the Town and forwarded it for consideration by council on April 15, 2013. Amongst the various items that were referenced in the 2013 Draft Operating Budget, was reference to the approved budget for 2012 for the Engagement and Marketing Account (“The Account”), an item involving $84,300. 8 At the meeting on April 11, 2013 one of the Town counsellors, Coun- sellor Perrelli, presented a motion (“The Motion”) to amend the main motion which provided: That the Mayor personally repay the Town $10,800 for the over-expenditure in the Engagement and Marketing Account... 9 There is no evidence to support any suggestion that the respondent misappropriated funds from the Account, nor that any funds were used from this Account for personal purposes. 10 Counsellor Perrelli, like the applicant and the respondent, is also a candidate for the position of mayor in the upcoming elections. 11 When the motion was brought by Counsellor Perrelli, the minutes of the meeting make clear that the respondent did not declare any conflict of interest and in fact stated: ...I don’t sense that I am personally responsible for the use of all of those funds. I do all that on behalf of all members of council and all members of council have participated in the events that we spon- sored. So I certainly can’t support this. 12 A recorded vote was taken on the motion and the respondent voted to defeat it. 13 It is important to note as a factual matter that in regard to the question of whether or not the Engagement and Marketing Account was over budget, this court had the affidavit evidence of Dean Miller who is the Commissioner of Corporate and Financial Services at the Town of Rich- mond Hill. One of Mr. Miller’s responsibilities includes the overall func- tional, operational and budget management for the Corporate and Finan- Methuku v. Barrow M.L. Edwards J. 147 cial Services Department, which includes all of the expenditures for the mayor and council offices. Mr. Miller’s affidavit was not challenged by the applicant in cross-examination. With respect to the issue of the alleged over expenditure Mr. Miller states in his affidavit: On November 25, 2012, at a regular meeting I had with the Mayor to review the expenditures and status of the Mayor and Council Offices budget, the Mayor indicated to me that he had two expenditure requests that had not been anticipated and that would significantly exceed the budget allocation for the Engagement and Marketing Ac- count. Since it was the [sic] nearing the end of the fiscal year for budget purposes, and it was likely the Engagement and Marketing Account would go over budget, he sought my advice with respect to further expenditures in relation to the budget. The two significant expenditures he sought my advice on were: a) A request by Counsellor Beros for reimbursement in the amount of $5,011 for tote bags that had been purchased and distributed by the Richmond Road Watch Committee at the Richmond Hill Santa Claus parade that month; and b) A request from the Richmond Hill Pipe Band for forgiveness of rental fees for the use of the Town’s facilities in the amount of $2,433. Since the Town did not have a forgiveness policy for facility rentals, any forgiveness for this rental fee would have to be allocated to another Town account. I agreed with the Mayor to review the Mayor and Council Offices budget to see if these requests could be accommodated and if the Engagement and Marketing Account could go over budget by approximately $10,000. As Commissioner, I have authority pursuant to section 8.2 of the Fi- nancial Control By-law to re-allocate up to 2% of the total Corporate and Financial Services budget totalling $18,805,800, so long as the total expenditures in the department does not exceed the budgeted amount. In this case, I exercised my authority to exceed the sub-sub- allocation to the Engagement and Marketing Account because the total amount within the Corporate and Financial Services budget, as well as the total amount within Mayor and Council Offices budget, was under budget in amounts greater than the overage anticipated. On January 29, 2013, I confirmed to the Mayor that both requests had been successfully accommodated within the Mayor and Council Offices budget and that an overage over budget or approximately $10,000 was not an issue. 148 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

14 A review of the aforementioned paragraphs from Mr. Miller’s affidavit makes it quite clear that in fact the alleged over expenditure in the Account had been accommodated within the mayor’s budget, and there was therefore in fact no over expenditure for which the mayor, or anyone else, could be held responsible.

Position of the Applicant 15 Counsel for the applicant seeks a declaration that the respondent was in a conflict of interest when he spoke to the motion and did not declare any conflict of interest. In the event this court were to find that the mayor failed to comply with his obligations under section 5(1) of the MCIA, then counsel for the applicant seeks a declaration that the mayor’s seat in the Town of Richmond Hill should be declared vacant and that the respondent should be disqualified from seeking office for a period of up to seven years. As well, counsel for the applicant seeks an order requiring the respondent to make restitution to the Town in the amount of $10,800. 16 While Section 5(1) of the MCIA requires someone like the respondent to declare “any pecuniary interest” “in any matter”, pecuniary interest is not defined. Counsel for the applicant argues that pecuniary interest has been interpreted as one generally involving money or a financial interest, see Mondoux v. Tuchenhagen, 2011 ONSC 5398 (Ont. Div. Ct.) at para. 31. It is further argued that the matter to be discussed or voted upon need only have the potential to affect a pecuniary interest of the member in order for the member to then be in contravention of section 5 of the MCIA, see Greene v. Borins (1985), 28 M.P.L.R. 251 (Ont. Div. Ct.) at para. 42. 17 On the facts before this court counsel for the applicant stressed that this court does not need to concern itself with whether or not the underlying motion had, or could have any legal validity. In other words, it makes no matter whether or not the Town had any legal basis to order the respondent to make restitution of the alleged $10,800 expenditure. It also made no matter whether in fact there had been an over expenditure. In essence, it is argued the evidence of Mr. Miller is of no concern to this court’s ultimate decision. Fundamentally, counsel for the applicant argues that where there was the potential for the respondent to be required to make restitution, then the mayor had an obligation to declare the conflict of interest and not to speak to the motion. Methuku v. Barrow M.L. Edwards J. 149

Position of the Respondent 18 Counsel for the respondent raises a number of issues in response to the application, the first of which engages a discussion of whether or not this application is barred by the limitation period set forth in section 9(1) of the MCIA. If this court comes to the conclusion that the limitation period does not apply, then counsel for the applicant argues that the provisions of section 5 of the MCIA do not apply, and that the exceptions set forth in section 4(h) and 4(k) of the MCIA do apply. Finally, counsel for the respondent argues that even if the exceptions set forth in section 4(h) and (k) of the MCIA do not apply, that the respondent in fact did not violate section 5 of the MCIA.

The Limitation Period 19 Dealing first of all with the issue of whether or not this application is barred by the limitation period set forth in section 9(1) of the MCIA, this court is required to engage in an examination of whether or not the application was brought within six weeks after the fact comes to an electors knowledge that a member may have contravened section 5 of the MCIA. As to when the limitation period begins to run, Gilmore J. in Hervey v. Morris [2013 CarswellOnt 2774 (Ont. S.C.J.)] 2013 CanLII 13654, held that the onus of demonstrating a contravention of the limitation set forth in section 9 was on the respondent to demonstrate on a balance of probabilities, that the applicant had some knowledge which would lead someone like the applicant to believe that a breach of the MCIA had occurred. 20 It is clear that the purpose of section 9 of the MCIA is, as Gilmore J. indicated in Hervey, to impose a strict time limit so as to protect elected officials and ensure that applications like the one before the court is brought on a timely basis. 21 In this case the application concerns a vote that occurred on April 11, 2013. The application was not commenced until almost one year later, March 11, 2014. The applicant’s evidence is that he only became aware of the potential issue engaging the question of whether or not the respondent was in a conflict when he read an article which had been posted on the website of an organization known as the Richmond Hill Watchdog Committee. The article was posted on the Watchdog Committee website on February 23, 2014, and the applicant says that he read the article on February 24, 2014. As previously noted, the applicant is a candidate for 150 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

election in the forthcoming Richmond Hill municipal election and had filed his nomination papers on February 7, 2014. 22 The applicant, according to evidence elicited through his cross-examination, had been attending council and/or committee meetings and reading the minutes published on the Town’s website since 2011. The applicant is a well-educated individual, having a Masters in Computer Science from Boston University. A thorough review of the cross-examination transcript of the applicant leaves this court with the impression that he had a relatively poor memory for many of the issues for which he was cross-examined, yet had no doubt that the date when he first became aware of the issue that now engages this court was when he read the Watchdog Committee article on February 24, 2014. 23 While the timing of the applicant’s filing of his election materials in early February and the ultimate discovery of the respondent’s potential conflict is very suspicious, I am not satisfied that the respondent has satisfied the onus of establishing on a balance of probabilities that the applicant knew of the issue which would engage section 5 of the MCIA at any earlier time period than what he has testified to; i.e. February 24, 2014.

Does the Exception Set Forth in Section 4(h) or Section 4(k) of the MCIA Apply to the Respondent’s Alleged Pecuniary Interest? 24 The MCIA provides at section 4(h) as follows: Where s. 5 does not apply 4. Section 5 does not apply to a pecuniary interest in any matter that a member may have, (h)...by reason only of the member being a member of a board, commission, or other body as an appointee of a council or local board; or (k) by reason only of an interest of the member which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member. 25 Counsel for the respondent argues that the only basis for the proposition inherent in the motion that the respondent “repay” any amount to the Town is based on the fact that the mayor had authority for approving expenses to be paid from the Account. It is argued that because the alleged pecuniary interest of the respondent in the motion arose only by reason of the respondent’s position being the mayor, that section 4(h) of the MCIA applies. Methuku v. Barrow M.L. Edwards J. 151

26 The provisions of section 4(h) are to provide an exemption to the requirements of section 5 of the MCIA in situations where a pecuniary interest arises solely from the member being appointed by his or her council as a member of a board, commission or other body. 27 In Blyth v. Northumberland (County), [1990] O.J. No. 2166 (Ont. Gen. Div.) at para. 38, Crossland J. adopted the “common sense” interpretation of section 4(h) set forth in Makuch in Canadian Municipal and Planning Law at page 312 as follows: Further it is to be noted that the Municipal Conflict of Interest Act 1983, section 4(h), an exception to the conflict rules is made in the case of interests arising solely from being appointed by council as a member of a board, commission or other body. Makuch in Canadian Municipal and Planning Law, supra at page 312, referred to this exception as “common sense” and further stated: Such interests in body, public duties similar to those of the member as a counsellor or board member in any conflict must be accepted since private or personal interests are not involved. Accordingly, I am of the opinion that the three members of council who also served on the Board of Health do not have a conflict of interest in voting on the by-laws in question. 28 I agree with the position of counsel for the applicant that it was not the respondent’s position on the Budget Committee that gave rise to the pecuniary interest. The fact that the respondent was sitting as a member of the Budget Committee of the whole of the Town of Richmond Hill does not engage the provisions of section 4(h) of the MCIA. 29 As to the application of section 4(k), it cannot be said that if the Town of Richmond Hill had the authority to order the respondent to make restitution of $10,800, that such an amount was so “remote or insignificant” in its nature that it could not reasonably be regarded as likely to influence the member. In my view, neither section 4(h) or 4(k) provides any assistance to the respondent in this matter.

Did the Respondent Violate Section 5 of the MCIA? 30 The purpose of section 5 of the MCIA is to ensure there is trans- parency in the municipal decision-making process. Part of what makes a democracy work is the knowledge that the electorate can rely on its decision-makers to make decisions uninfluenced by their own self-interest or pecuniary interest. 152 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

31 The determination of whether section 5 of the MCIA has been violated engages a fundamental question as to whether or not the matter to be voted upon had the potential to affect the pecuniary interest of the member. See Greene v. Borins (1985), 28 M.P.L.R. 251 (Ont. Div. Ct.) [251] at para. 42. 32 The definition of the term “matter” has been the subject matter of a recent decision of the Divisional Court in Magder v. Ford, 2013 ONSC 263 (Ont. Div. Ct.). In that regard, the Divisional Court stated: While we agree with the application judge that the MCIA can apply to Code matters, it does so only if the member has a direct or indirect ‘pecuniary interest’ in the matter before Council. Therefore, to determine whether there has been a contravention of s. 5(1), one must begin with an inquiry into the matter before Council. In our view, it is not correct, as the respondent argues and the application judge appears to have accepted (Reasons at para. 15), that a member is precluded from speaking whenever a Code violation is before the Council, just because Council has the power to impose a financial penalty. The pecuniary interest of the member must be a real one. Unless the report of the Integrity Commissioner recom- mends an economic sanction, or if there is some real likelihood that a financial penalty is contemplated, the member is not precluded from speaking to a report on his conduct. There is no reason to preclude a member from speaking to a report recommending a reprimand or requesting an apology. Given the importance of procedural fairness and especially the right to be heard, the individual should not be precluded from speaking, absent a real financial interest that has crystallized. Moreover, since a pecuniary interest results in a prohibition against participation in a public meeting which, if not obeyed, attracts a se- vere penalty, it is appropriate to strictly interpret the pecuniary interest threshold. [Emphasis added] 33 When the respondent spoke to the motion and ultimately voted against the motion did the respondent have, to use the words of the Divi- sional Court in Magda, supra, a pecuniary interest that was “real”. The answer to this question must flow from an analysis of whether the Budget Committee, and by implication the Town, had the jurisdiction or power to order the respondent to make restitution or re-pay the over expenditure in the Account. Methuku v. Barrow M.L. Edwards J. 153

34 Factually, the affidavit of Mr. Miller makes clear that there was no over expenditure in the Account. However, my analysis of whether the committee or the Town had the power implicit in the motion to order restitution will assume that in fact the Account had been overspent. 35 A Municipality is a creature of statute and it can only exercise those powers conferred on it by statute. It is conceded by Mr. Loopstra, counsel for the respondent, that the Municipal Act has, in its most recent itera- tion, broadened the powers of a Municipality. Nonetheless, the powers of a Municipality must be found within the statute. 36 Mr. Mascarin, counsel for the applicant, argues that the broad powers conferred upon a Municipality by the Municipal Act to govern its own affairs does not preclude a Municipal council from seeking financial redress and to look after the financial management of the Municipality. Amongst the enhanced powers found in the Municipal Act is the power provided by section 9 which provides: A Municipality has the capacity rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act. [Emphasis added] Mr. Mascarin argues that with this enhanced power a Municipality, on facts similar to those before the court could, like any natural person, re- cover any over-payment. The difficulty with this argument, however, lies in the fact that a natural person can only sue where he or she has a legal cause of action. I fail to see where such a legal cause of action arises on the facts before this court. 37 Mr. Mascarin argues that section 11(2) of the Municipal Act, and specifically subsection 3, allows a Municipality to pass by-laws respecting the “financial management of the Municipality and its local boards”. There is no by-law in the Town of Richmond Hill that would authorize the Town and any of its officials to seek restitution or reimbursement for any over expenditure within a Town budgeted item. I was not directed to any similar authority, of any Municipality within the Province of On- tario, where any Municipality had passed a by-law that would allow for a Municipality to seek restitution or reimbursement in a similar situation. This is not a situation where a Municipality is seeking repayment of personal expenses that a counsellor or Mayor may have improperly charged to his or her expense account. Such a factual situation may result in an entirely different disposition. What is sought in this case is for an elected official to bear personal responsibility for an alleged over expenditure 154 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

within a budget, albeit an over expenditure for which the elected official derived no personal benefit. 38 While there may be many members of society who would see it as a positive development where a politician could be held responsible for spending in excess of a budgeted item, such responsibility can only flow where there is statutory authority to do so. There is no statutory authority from my review of the Municipal Act, even with its enhanced powers, that would allow a Municipality to seek restitution or reimbursement in a situation like the one before this court. 39 If, as I have found the Town did not have the authority to order the respondent to repay or make restitution for an overpayment in the Ac- count, what then is the implication with respect to the respondent having spoken to and voted on the motion? The answer to this question can be found in the decision of the Divisional Court in Magder, where at paragraph 72 the court stated: Given that the imposition of the financial sanction under Decision CC 52.1 was a nullity because council did not have the jurisdiction to impose such a penalty, Mr. Ford had no pecuniary interest in the matter on which he voted at council on February 7, 2012 — namely, the revocation of the Decision CC 52.1. 40 The motion that was before the Budget Committee on April 11, 2013 was a motion that sought to impose personal responsibility on the respondent for repayment/restitution. The motion sought to impose a penalty on the respondent where the committee and the Town ultimately would have had no power to force the respondent to make such repayment or restitution. The motion was ultra vires the committee. The committee, and ultimately the Town, would never have had jurisdiction to impose the penalty that essentially was being sought as against the respondent. 41 Counsel for the applicant argues that the requirements of section 5(1) of the MCIA apply in respect of “any matter” in which a council member has any pecuniary interest where the member “is present at a meeting of the council...at which the matter is the subject of consideration”. Counsel for the applicant then suggests that the position of the respondent would lead to an unworkable result if “any matter” were to be read down as meaning any “valid matter” or “authorized matter”. 42 Mr. Mascarin’s argument with respect to the implications of the respondent’s argument concerning the vires of the committee’s motion was addressed by Mr. Mascarin in an article entitled Eyes Wide Shut — Wil- Methuku v. Barrow M.L. Edwards J. 155

ful Blindness and a Conflict of Fordian Proportions, [2013] 6 D.M.P.L. (2d) January 2013. At page 11 of his critique of the decision of Hackland J. in Magder v. Ford, Mr. Mascarin states: The requirements under subsection 5(1) of the MCIA apply in respect of “any matter” in which a council member has any pecuniary interest where the member “is present at a meeting of the council...at which the matter is the subject of consideration.” It would lead to an unworkable result if “any matter” were to be read down as meaning any “valid matter” or “authorized matter” (or some other similar term). This would lead to uncertainty as to the application of the statue. First, it would put a member of council in the position that he or she would have to make a legal determination that a matter before council was “legally valid”. Second, it would erode the policy basis of the prohibition67 by potentially allowing council members to sometimes address a matter in which they have a pecuniary interest if the matter is somehow legally questionable. Third, it would create confusion and chaos with respect to the application of any order under the MCIA if a subsequent court challenge invalidates a by-law, resolution or other municipal action. 43 Politicians, and municipal politicians in particular, make decisions every day. Politicians are in the business of making decisions. As members of society we expect that our legal representatives will make informed and correct decisions. One of the decisions that a politician, like the respondent has to make, in situations like the one which the respondent was confronted with, is whether or not he has a real pecuniary interest in the matter that might be discussed by council. On the facts before this court I have determined that the committee, and ultimately the Town, would not have had any legal authority to require the respondent to make restitution or repayment. As such, the respondent did not have a pecuniary interest that was a real one. 44 If, however, to address the concerns of Mr. Mascarin that there could be chaos created by the final disposition I have adopted in this matter, such chaos is fundamentally addressed by reason of the fact that someone like the respondent will have to make the fundamental decision when confronted with a potential conflict as to whether or not his pecuniary interest is real. If a municipal politician makes the wrong judgment call and it is ultimately found to be a matter in which the municipal politician did in fact have a pecuniary interest, and that the pecuniary interest was a real one and thereafter proceeded to speak to and vote on a motion, then the municipal politician in that situation has made the wrong choice and 156 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

the wrong decision. In that situation the municipal politician, absent the saving provisions of section 10(2) of the MCIA, would likely result in the position of the hypothetical politician having his or her position declared vacant, and ultimately an inability to run in any future elections for seven years. 45 When the respondent spoke to this matter and indicated that he did not feel that he was personally responsible for the funds, and that he was speaking on behalf of “all members of council”, the respondent made a decision that he did not have a personal pecuniary interest that was a real one. If the facts were different and the committee and/or the Town had the power prescribed to require someone like the respondent to repay personal expenses for which there had been an over expenditure and thereafter chose to speak to and vote on such a motion the decision of this court would, in all likelihood, be quite different. 46 The purpose of the MCIA, and specifically section 5, is to ensure that municipal politicians who find themselves in a potential conflict of interest declare that conflict so that society will know the decisions made by those elected to high office, and in whom the electorate can expect the highest of standards, will be held accountable in situations where there has been a failure to comply with section 5(1). 47 The applicant stated when cross-examined on his affidavit that the respondent broke the law and he had to be held accountable for breaking the law. He was specifically asked during the course of his cross-examination what his position was in the event this court decided that counsel did not have the authority to order the Mayor to pay back $10,800 for the alleged over expenditure. The applicant’s response to this very specific question was as follows: The thing is, the Mayor broke the law. He has to be held accountable. That’s all. 48 The respondent did not break the law because he did not have any real financial interest in the matter that was before the committee. The committee and the Town never had the authority to order restitution or repayment of the $10,800. The motion that was put before the committee was a motion moved by one of the respondent’s political rivals who is now seeking the Mayor’s seat in the forthcoming political municipal election. The motion had as its sole purpose, the creation of an appearance of impropriety on the part of the respondent. The motion if approved would have been a nullity, and as such in accordance with the Methuku v. Barrow M.L. Edwards J. 157

determination of the Divisional Court in Magder, the respondent did not contravene section 5 of the MCIA by speaking and voting on the matter. 49 As I have found that section 5 of the MCIA had not been violated by the respondent, it is not necessary to deal with the saving provisions of section 10(2) of the MCIA. 50 As to the question of costs, if counsel for the parties cannot agree on costs I will receive written submissions limited to three pages in length, to be received within 10 days from the date of receipt of these reasons. Application dismissed. 158 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

[Indexed as: Lavis Contracting Co. v. Coores Construction Inc.] In the Matter of the Construction Lien Act, R.S.O. 1990, c. C.30 Lavis Contracting Co. Limited, Plaintiff and Coores Construction Inc. and Municipality of Central Huron, Defendants Ontario Superior Court of Justice Docket: Goderich 23-2011 2014 ONSC 5479 T.A. Heeney R.S.J. Heard: September 4, 2014 Judgment: September 22, 2014 Construction law –––– Construction and builders’ liens — Loss or discharge of lien — Compliance with requirements –––– Defendant was hired by municipality to complete road, water, and sewer main reconstruction — Plaintiff was sub-contracted by defendant to provide related services and completed work — Defendant experienced difficulties obtaining payment from municipality and plaintiff prepared Claim for Lien under Construction Lien Act — Since work in question was performed on public highway, lien was preserved by personal service of Claim for Lien to Clerk of municipality — Plaintiff attended at municipal office and delivered claim to Deputy Clerk, who delivered it to Clerk same day — Delivery was within prescribed period for preservation of lien — Defen- dant argued that service was not in compliance with Act because plaintiff did not personally deliver claim directly to Clerk — Motion dismissed — Delivery of claim to Clerk by Deputy Clerk constituted compliance with Act — Nothing in Act required delivery to Clerk to be made by lien claimant directly — Pur- pose of service is to provide actual notice of Claim for Lien to Clerk, and that was clearly accomplished — Literal interpretation requiring service only on Clerk would lead to absurdity as it would be impossible to preserve lien if Clerk happened to be unavailable — Alternative basis to dismiss motion is found in Municipal Act, 2001, which provides municipality may appoint Deputy Clerks with all powers and duties of Clerks, including power and duty to receive notices of Claims for Lien. Cases considered by T.A. Heeney R.S.J.: Arvanitelis v. Gorchynski (1997), 97 O.A.C. 57, 37 M.P.L.R. (2d) 39, 1997 CarswellOnt 142, [1997] O.J. No. 211 (Ont. C.A.) — considered Lavis Contracting Co. v. Coores Construction Inc. T.A. Heeney R.S.J. 159

Wicken (Litigation Guardian of) v. Harssar (2004), 2004 CarswellOnt 1858, 240 D.L.R. (4th) 520, 49 C.P.C. (5th) 76, 73 O.R. (3d) 600, (sub nom. Wicken v. Harssar) 186 O.A.C. 344, 11 C.C.L.I. (4th) 150, [2004] O.J. No. 1935 (Ont. Div. Ct.) — followed Statutes considered: Construction Lien Act, R.S.O. 1990, c. C.30 Generally — referred to s. 34(2) — considered s. 45(2) — considered Municipal Act, R.S.O. 1990, c. M.45 s. 284(5) — considered Municipal Act, 2001, S.O. 2001, c. 25 Generally — referred to s. 228(2) — considered

MOTION by defendant to declare plaintiff’s lien claim is invalid.

David A. Reid, for Plaintiff Matthew R. Todd, for Defendant, Coores Construction Inc.

T.A. Heeney R.S.J.:

1 In this motion, the defendant Coores Construction Inc. (“Coores”) seeks a declaration that the lien claim of the plaintiff is invalid because the plaintiff failed to preserve its lien in accordance with the provisions of the Construction Lien Act, R.S.O. 1990, c. C-30 (“the Act”). It also seeks an order for the return of the bond which was posted as security to vacate the lien. 2 The relevant facts are simple and uncontested. Coores was hired by the Municipality of Central Huron to complete road, water and sewer main reconstruction. The plaintiff was a sub-contractor of Coores, and supplied top coat paving and related services. It completed its work on November 12, 2010. 3 Coores experienced difficulties obtaining payment from the Munici- pality due to delay issues, and as a result the plaintiff was not paid in full for its work. The plaintiff therefore took steps to prepare a Claim for Lien under the Act. 4 Since the work in question was performed on a public highway, a lien is not preserved by registration against the land but instead by personal 160 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

service of the Claim for Lien. Section 34(2) of the Act provides as follows: (2) Where a claim for lien is in respect of a public street or highway owned by a municipality, the copy of the claim for lien shall be given to the clerk of the municipality. 5 On December 24, 2010, Gord Lavis, the principal of the plaintiff company, attended at the municipal office of the Municipality of Central Huron and asked to speak with the Clerk. He was told that she was not present, and so he asked to speak with Kevin McLlwain, who was the Chief Administrative Officer as well as the Deputy Clerk. Mr. Lavis delivered the Claim for Lien to Mr. McLlwain. There is no question that this delivery took place within the period prescribed under the Act for preservation of a lien. 6 Mr. McLlwain wrote a letter that was filed in evidence, confirming that he received the Claim for Lien. He also stated that he delivered the document to the Clerk, Brenda MacIsaac, the same day he received it. 7 Coores submits that service of the Claim for Lien was not made in accordance with s. 34(2) of the Act, because it was not delivered to the Clerk. Accordingly, it submits that the lien was not preserved within the time prescribed by the Act, and asks that an order issue under s. 45(2) declaring that the lien has expired. 8 The simple answer to this submission is that the Claim for Lien was, in fact, delivered to the Clerk within the prescribed time. Mr. Lavis gave it to the Deputy Clerk, and he, in turn, delivered it to the Clerk the same day. Section 34(2) of the Act has been complied with. There is nothing in that section requiring that delivery to the Clerk be made by the lien claimant himself. 9 In Arvanitelis v. Gorchynski, [1997] O.J. No. 211 (Ont. C.A.), the Court of Appeal considered a case involving a slip and fall accident, where s. 284(5) of the Municipal Act required notice to be given to the Clerk or head of the municipality by registered mail or service, within seven days. Counsel for the plaintiff faxed notice of the accident to the Clerk’s Department of the Borough of East York as well as to the Clerk of the Municipality of Metropolitan Toronto. Since the accident happened in the City of Toronto, notice should have been sent to the Clerk of the City of Toronto. 10 The Court carefully tracked the path that the fax took en route to the office of the Clerk of the City of Toronto. The accident happened on Lavis Contracting Co. v. Coores Construction Inc. T.A. Heeney R.S.J. 161

Friday, February 11, 1994. The faxes were sent to and received by the wrong entities on Thursday, February 17, 1994. Metro’s fax was forwarded on to the City of Toronto’s mailroom by the next day, but the date stamp applied by the office of the Clerk of the City of Toronto indicated that it was not received by that office until Monday, February 21, 1994, ten days after the accident. The Court held that the seven-day limitation period had not been complied with. 11 One may infer from the Court’s analysis that had the Clerk of the City of Toronto actually received the forwarded fax within the seven-day limitation period, service would have been proper, even though it had been indirect. 12 I am satisfied that s. 34(2) of the Act has been complied with because a copy of the Claim for Lien was, in fact, delivered to the Clerk within the prescribed period. The fact that it was delivered by the Deputy Clerk and not by the lien claimant is, in my view, irrelevant. The purpose of service is to provide actual notice of the Claim for Lien to the Clerk, and that was clearly accomplished. 13 There is, however, an alternative basis upon which the motion should be dismissed. Section 228(2) of the Municipal Act, 2001, S.O. 2001, c. 25, provides as follows: (2) A municipality may appoint deputy clerks who have all the powers and duties of the clerk under this and any other Act. 14 It is undisputed that Mr. McLlwain was duly appointed by the Munic- ipality of Central Huron as Deputy Clerk, and that he held that status at the time the Claim for Lien was delivered to him. 15 Mr. Reid, for the plaintiff, submits that s. 228(2) serves to delegate all of the powers and duties of the Clerk of a municipality to the Deputy Clerk, under the Municipal Act and “any other Act”. This includes dele- gation of the power and duty to receive notices of Claims for Lien under s. 34(2) of the Act. I agree with this submission. 16 In Wicken (Litigation Guardian of) v. Harssar, [2004] O.J. No. 1935 (Ont. Div. Ct.), the Court reviewed certain basic principles of statutory interpretation. At paras. 27 and 28, the Court said this: If a statute is susceptible of two interpretations, the interpretation that avoids absurdity is to be preferred (Datacalc Research Corp. v. Can- ada, [2002] T.C.J. NO. 99, 2002 D.T.C. 1479 (Tax Ct.), at para. 54). According to F. Bennion, Statutory Interpretation, 4th ed., (London: Butterworths, 2002), the concept of “absurdity” actually encom- 162 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

passes several components. The presumption against an “absurd” interpretation means the avoidance of (1) an unworkable or impractical result, (2) an inconvenient result, (3) an anomalous or illogical result, (4) a futile or pointless result, (5) an artificial result, or (6) dispropor- tionate counter-mischief. 17 At para. 32, the Divisional Court also quoted with approval from R. Sullivan, Driedger on the Construction of Statutes, (3rd ed., 1994), where the author described the principles of coherence and consistency at pg. 288 of his text: The meaning of words in legislation depends not only on their immediate context but also on a larger context which includes the Act as a whole and the statute book as a whole. The presumptions of coherence and consistency apply not only to Acts dealing with the same subject but also, albeit with lesser force, to the entire body of statue law produced by a legislature. ... Therefore, other things being equal, interpretations that minimize the possibility of conflict or incoherence among different enactments are preferred. 18 The question here is whether s. 34(2) of the Act should be interpreted literally such that only the Clerk, and no-one else, is to be served with a Claim for Lien under the Act; or, whether s. 34(2) should be interpreted in light of s. 228(2) of the Municipal Act, such that service may also be effected on the Deputy Clerk, to whom is delegated all of the powers and duties of the Clerk. 19 A literal interpretation leads, in my view, to an absurdity. Both counsel agree that time is usually of the essence in construction lien matters. Liens are often registered, or in the case of municipalities served, at the eleventh hour. If service could be effected only on the Clerk and no-one else, it would be impossible to preserve a lien if the Clerk happened to be on vacation, or on sick leave, or otherwise unavailable. Such a result is unworkable and impractical, since a Clerk could well be away from the office for several weeks at a time. 20 Interpreting s. 34(2) to permit service on the Deputy Clerk avoids this absurdity, and renders both statutes coherent and consistent. 21 For all of these reasons, I am satisfied that service was properly effected under s. 34(2) of the Act. Accordingly, the motion is dismissed. 22 With respect to costs, Mr. Reid is seeking partial indemnity costs of $5,000. Mr. Todd indicated that his partial indemnity costs would have Lavis Contracting Co. v. Coores Construction Inc. T.A. Heeney R.S.J. 163

been $3,300 had he been successful. I am satisfied, however, that the materials filed and time spent by the responding party exceeded that of the moving party. 23 Costs are awarded to the plaintiff, payable by the defendant Coores, fixed at $4,500 all inclusive. Motion dismissed. 164 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

[Indexed as: Racco v. Ontario (Chief Electoral Officer)] Sandra Yeung Racco, Applicant and Greg Essensa, Chief Electoral Officer of Ontario, Anna Di Ruscio, Returning Officer for the Electoral District of Thornhill, Sharon Rossi, Election Clerk for the Electoral District of Thornhill, Gene Balfour, David Bergart, Erin Goodwin, Cindy Hackelberg and Gila Martow, Respondents Ontario Court of Justice Docket: Hamilton 14-90000431 2014 ONCJ 498 P.D. Tetley J. Heard: June 18, 2014 Judgment: June 18, 2014 Public law –––– Elections — Remedies for defeated candidates — Re- counts — In federal and provincial elections — Miscellaneous –––– Appli- cant candidate SYR and respondent candidate GM were candidates in same electoral district in general provincial election — Following close of polls, Elec- tions Ontario officials advised SYR that based on tallying of votes, she had been elected by margin of 85 votes over GM — After official tabulation on following day, returning officer determined that GM was elected by margin of 85 votes — SYR’s campaign officials identified inconsistencies between tallies — SYR brought application for recount of ballots — Application granted — SYR established prima facie case for recount pursuant to s. 71(1)(a) of Election Act, and more significantly, s. 71(1)(b) of Act, on ground that returning officer had improperly tabulated vote — Discrepancies that saw unofficial results from election night indicating 85-vote victory for SYR, with subsequent official tally of same results indicating that GM had won election by exact same differential could not be reconciled — Given that election results hang in balance of relatively modest number of votes when considered in context of the whole, electorate could not be assured that their democratic will had been accurately determined absent requested recount. Cases considered by P.D. Tetley J.: Goos v. Lampard (1986), 53 Sask. R. 64, 1986 CarswellSask 156 (Sask. Q.B.) — considered Haig v. R. (1993), 1993 CarswellNat 1384, (sub nom. Haig v. Canada) [1993] 2 S.C.R. 995, 1993 CarswellNat 2353, (sub nom. Haig v. Canada) 16 C.R.R. (2d) 193, (sub nom. Haig v. Canada) 156 N.R. 81, (sub nom. Haig v. Can- Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 165

ada) 105 D.L.R. (4th) 577, (sub nom. Haig v. Canada) 66 F.T.R. 80 (note), EYB 1993-67294, [1993] S.C.J. No. 84 (S.C.C.) — considered Rafferty v. Mauro (2007), 2007 CarswellOnt 7693, 2007 ONCJ 573 (Ont. C.J.) — considered Swansea Election, Re (1963), 40 D.L.R. (2d) 282, [1963] 2 O.R. 525, 1963 CarswellOnt 210 (Ont. C.A.) — considered Statutes considered: Election Act, R.S.O. 1990, c. E.6 Generally — referred to s. 65 — referred to s. 67 — referred to s. 67(2) — considered s. 70 — considered s. 71 — considered s. 71(1) — considered s. 71(1)(a) — considered s. 71(1)(b) — considered s. 71(1)(c) — considered

APPLICATION by election candidate for recount of ballots in her electoral district in respect of general provincial election.

J. Siegel, M. Francis, for Applicant G. Janoscik, for G. Martow J. Ayres, J. Batty, S. Lemke, for Elections Ontario

P.D. Tetley J. (orally): Background Information: 1 In new judge’s school they tell you that there are a couple of rules you should follow. One is try not to sit after 4:30 in the afternoon and never make a decision after that point in time if you can avoid it. Tonight the exigencies of the moment prevent studied deliberation of the matter in issue. I was thinking, when I read the materials that you have collec- tively managed to put together in very short order, that many of you were also wishing there was a little enlargement of time permitted by the Act itself. Consequently, I am indebted to all of you. I appreciate this is an unusual circumstance that brings us all together. It is an unusual procedure, generally, and in fact a unique one in my experience. 2 This is not the stock and trade of a criminal court judge but the thought process involved and the analysis is something that we apply on 166 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

a daily basis. I have certainly been aided and assisted by the high quality of the materials you have all provided. I want to thank you for the materials. I am mindful that they were prepared in very short order. I am certain that behind every one of you is one or two others that have been working hard over the course of the last few nights to bring this application before the court. 3 I am also mindful of the fact that there are a lot of people that have a direct or indirect interest in this Application. Fortunately, the outcome of the election doesn’t turn on this decision. In a democracy that might well be the case when we know the results of the election. The future of the two people most directly involved in the application, their immediate future will be impacted, along with those that have supported them throughout the election process. 4 More importantly I am mindful of the fact that we are dealing with 50,000 voters. 50,000 individuals chose to exercise their franchise by voting in this election. Of particular concern are the 44,000 plus that cast their votes in favour of the two candidates most directly affected by the results of this application. 5 This will be a true oral judgment. I will provide written reasons in a more coherent fashion subsequently. I will endeavour to do that in short order. 6 I will briefly review the application record itself. I propose to cite the highlights of the affidavit material that has been filed on behalf of the respondent and the election officials which has been helpful in making the determination that I have made. 7 I am also indebted to our Law Clerk here at the Ontario Court of Justice, Sara Amini, for her help. This matter, as you know, has unfolded fairly rapidly this afternoon. I was minding my own business - at least I thought I was - when the assignment came my way shortly after 3:00. So I have had a crash course in the Elections Act. I have managed to take a look through the Act. I don’t know why I never did that before. It is quite an interesting piece of legislation that covers almost everything one can think of to do with elections. We will focus primarily on a limited portion of that Act.

The Application: 8 The Applicant, Sandra Yeung Racco, makes application for an order seeking a recount of ballots in respect to the recent general election in the Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 167

Province of Ontario which was held on June 12, 2014. The application is based on Section 71 of the Election Act. A claim for costs was also made but I suspect the primary focus of the application is the request for the recount itself. 9 The background information is not in dispute; it is set out in the application record. A 2014 general election in the Province of Ontario, as we all know, was conducted on June 12th. Ms. Yeung Racco was a candidate for the Liberal party in the electoral district of Thornhill and Gila Martow was the candidate for the Progressive Conservative party in the same electoral district. There were four other candidates for election in the electoral district of Thornhill. 10 Ms. Anna Di Ruscio - and I apologise if I’m doing a disservice to the pronunciation of any of the names - is the returning officer for the electoral district in issue and Sharon Rossi was the election clerk for that same electoral district. 11 Following the close of polls on June 12, 2014, Elections Ontario officials advised Ms. Yeung Racco’s campaign that it received tallies from all polls and that Ms. Yeung Racco, based on the tallying of the votes cast, had been elected with 21,837 votes compared to the 21,752 votes received by Ms. Martow, the apparent second place finisher. Those results, I gather, were posted by the election officials on their website and it was believed, I think by all concerned and widely reported, that Ms. Yeung Racco had in fact been elected. 12 The total votes cast, as I indicated at the outset, between the two candidates was 44,069. There were 275 polls election day. Some of the polls, I gather, feature multiple polling stations and four advanced polls. A total of approximately 50,090 votes were cast in all during the course of the provincial election in Thornhill. The vote differential between the two candidates was widely reported as being 85 votes. That was the recorded differential on election night when the results were posted shortly before midnight, on Election Ontario’s website. It appeared, as I’ve noted, that the victor was Ms. Yeung Racco. 13 The votes that were reported, as I understand the affidavit material that has been filed, particularly from election officials, were unofficial results. The official tabulation that takes place in every election, was held the following day, June 13, 2014 pursuant to the provisions of Section 65 and 67 of the Elections Act. 168 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

14 Both Ms. Yeung Racco and Ms. Martow had their respective campaign managers in attendance. Their representatives were provided with copies of the election night returns, a document that is entitled Unofficial Return From The Records. We have a copy of that document in the affidavit materials. This document confirmed the election night results and indicated the unofficial results that showed Ms. Yeung Racco to be the victor by 85 votes. 15 During the subsequent official tabulation the Elections Ontario officials read out the hard copy tally reports returned from the deputy returning officers in charge of each poll. I gather these are a summary of the votes from each poll. The ballots cast are not reviewed individually. The summary, or tally of the votes, is noted on an envelope that contains the ballots. The vote totals are read out and added. At the conclusion of the reading of these reports it was determined that there was an 85 vote difference in the tallies received, but this time the tallies totalled as follows: Ms. Yeung Racco 21,783 and Ms. Martow 21,868. This discrepancy, surprisingly and perhaps coincidentally, totalled 85 votes but this time in favour of Ms. Martow. As a consequence Ms. Di Ruscio declared that Ms. Martow had been officially elected. 16 Subsequently, officials from Ms. Yeung Racco’s campaign, based on reports from scrutineers present for the counting of the ballots on election night at the various polls, identified what the application record suggests, are numerous inconsistencies between the tallies for Ms. Yeung Racco and Ms. Martow. These so called “inconsistencies” were included in the vote tallies in the election night tabulation results report. Two ballots cast in favour of Ms. Yeung Racco were asserted to have been improperly rejected. These ballots are referenced in the affidavit material of Ms. Yeung Racco’s campaign manager. 17 The existence of these assertions of material fact is supported in the affidavit of Milton Chan who was, and is, I gather, Ms. Yeung Racco’s campaign manager. Mr. Chan was in attendance at the official tabulation the following day. 18 In addition another scrutineer, Paul Crisostomo, has provided affidavit evidence in the applicant’s materials that a ballot cast in one of the polls, that indicated a contended clear intention to vote for Ms. Yeung Racco, was improperly rejected because of an incidental mark in the vicinity of the name of another candidate. Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 169

The Jurisdiction of the Court: 19 Section 70 and 71 of the Election Act provide that a judge of this court may appoint a time and place to recount votes cast at the election in an electoral district. A recount may be ordered upon the application of a candidate or an elector if it is made to appear in the affidavit material, (Section 71(1)(a) and (b)) that, (a) “A deputy returning officer has improperly counted any ballot or improperly rejected any ballot or made an incorrect statement of the number of ballots cast for any candidate.” Or, (b) “The returning officer has improperly tabulated the votes.” Or, and I should reference Subsection (c) in passing which refers to Subsection 67(2) of the Elections Act, which is not applicable here, that directs that, “When a difference between two candidates is 25 votes or less the returning officer must make the application for a recount.” The returning officer is mandated to make the application in those circumstances. 20 Consequently, the applicant, this is not disputed, is entitled to bring this application and the court has jurisdiction to hear the application. I am satisfied the appropriate parties have all been notified. We have affidavits of service confirming that. 21 The applicant contends that the sworn affidavit evidence, provided by the applicant or on her behalf establishes that the conditions of both Sub- section 71(1)(a) and 71(1)(b) have been met. Namely that the deputy returning officer has improperly rejected a ballot, or more than one ballot, and that the returning officer has improperly tabulated the votes. I have indicated the affidavit material filed in support of the application, which I have read, including affidavits from Mr. Chan, the campaign manager, and Paul Crisostomo. I have considered the contents of these affidavits. 22 In response, in addition to oral argument, I have an affidavit received from Haley Gotfrid, who is the campaign manager for Ms. Martow. Ms. Gotfrid indicates in her affidavit that she had understood the result of the Ontario Provincial election for the riding of Thornhill was that the election had been won by Ms. Yeung Racco. I must say I would think that assessment would be shared by most of the voters of that riding, at least on election night, and that Ms. Martow had placed second by a margin of 85 votes. 23 Ms. Gotfrid indicates that on June 13th she attended at the official tabulation of results conducted by the returning officer for Thornhill. While attending the official tabulation the returning officer read out the results of each poll, as indicated by the Statement Of Polls. As the results were being read out Ms. Gotfrid indicated she compared the results to the 170 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

certificates of result of polls that her campaign scrutineers had been provided on election day. It was evident to her that there were inconsistencies between the statement of polls and the certificates of result of polls. As a result, the candidate for whom she was the campaign manager, had in fact received 85 more votes than Ms. Yeung Racco. Ms. Gotfrid concludes her affidavit, and it was a point that forms the essence of the submission in response, that there was no dispute taken by the applicant to the tabulation of the statements and polls by the returning officer. By that I take it to mean there is no dispute regarding the mathematical calculation or tabulation of the results which now see Ms. Martow the winner of the election by 85 votes. There is reference in the affidavit to the fact that a recount is a costly proceeding, not only for the elections officials who bear primary responsibility for the process, but also to Ms. Martow. I have not lost sight of that fact. 24 In addition to the affidavit materials filed and submissions received from both applicant and respondent, helpful information has been received from the election officials themselves. I have reviewed and considered the materials filed on behalf of the Chief Electoral Officer of On- tario and I am indebted to the counsel that have attended here today on behalf of the Chief Electoral Officer. 25 From the review of those materials, the process with respect to the determination of the official and unofficial election results is along the following lines. After the June 12, 2014 election, once the returning officer received the required reports from all of the polling stations, the returning officer conducts a tabulation. Subsequently, at the official tabulation, which occurred in this case the following day, the returning officer compiles the results for each candidate from the reported results from each polling station. Ballots are not counted at the official tabulation. The ballots are sealed and secured on election night immediately after they are counted by election officials on site at the various polling locations within any given electoral district. 26 Candidates and their scrutineers are entitled to be present at the official tabulation. I don’t think the candidates were present but they both had their campaign managers or close representatives taking part in the official tabulation process. At the conclusion of the official tabulation the returning officer declared the candidate with the most votes to be elected and the returning officer reported these results to the Chief Electoral Of- ficer and returned the election documents to that office. Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 171

27 At the official tabulation the unofficial election results previously submitted by the election officials from the various polling stations via telephone on the night of the election, are reviewed. It was these unofficial results that were erroneously, if the current count is correct, reported on election night. Reliance on these unofficial vote tabulations led to the Liberal candidate being concluded to have won the election when the official count the next day showed a different result. 28 The differences between the two tallies are referenced in the materials filed. The discrepancies in the vote totals are attributed to transposition and other minor clerical errors without further explanation. 29 At the conclusion of the official tabulation, the returning officer, as I have indicated declared the candidate with the most votes to be elected. That resulted in Ms. Martow being declared the winner of the Thornhill riding. 30 The affidavit of Ms. Di Ruscio, the returning officer for the electoral district of Thornhill, indicates that she conducted the official tabulation as required pursuant to Section 65 and 67 of the Elections Act on June 13, the day following the election. The returning officer didn’t declare an elected candidate before this time although the media did. After the polls were closed the unofficial tabulations where made available due to public interest. As I have indicated, this occurred shortly before midnight on the night of the election. These unofficial results were, I gather, telephoned in to Ms. Di Ruscio’s office and were in turn made available to the public on the Elections Ontario website. The vote tallies indicated Ms. Yeung Racco as having the most votes by a plurality of 85. On June 13th, at the commencement of the official tabulation after 2:00 p.m., the returning officer provided the representatives with their unofficial candidate vote total. Over the next couple of hours they compared those results with the actual forms filled out by election officials in order to catch any clerical errors. The returning officer noted that there were some data entry errors and reviewed them with the representatives. At the conclusion of the official tabulation the returning officer declared Ms. Martow to be the winner by the same 85 vote plurality. 31 That is a rather imprecise summary of the evidence adduced on the application. I apologise to all concerned that I am not able to do greater justice to the materials presented in the brief time permitted. The applicant asserts that there are two main grounds for the application to be granted: First the question of a prospect that some ballots have been improperly rejected or that have not been counted as they might have been. 172 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

It is asserted in the material and the affidavit evidence filed to support this submission that certain ballots were rejected that might be subject to dispute. Accordingly, given the closeness of the race, a consideration of those ballots, two are referenced specifically, should be given and a recount ordered. 32 I think the respondent’s position in reply is a reasonable one. There must be spoiled ballots in every election, ballots where while one candidate appears to be indicated there is a mark in relation to another candidate’s name that might make it difficult to ascertain the voter’s intention. I gather, and it is conceded by the applicant, that as a matter of course there are a number of people who attend to vote but actually don’t cast a vote. Their ballots are returned without any candidates being indicated. That much is conceded by the applicant. If that were the only ground I would accept the respondent’s position with respect to the inadvisability of a recount on those grounds alone. 33 The more difficult issue arises from the dichotomy between the unofficial and the official tallies. The unofficial tallies manifested themselves shortly before midnight. This count would have seen the Liberal candidate the victor by 85 votes. These vote totals were subsequently found to be unreliable on the next day when a further official count was conducted. Based on a review of the tally of the votes cast, it may be that a minor clerical error or some other transposition of numbers might have accounted for the discrepancy between the official and unofficial vote totals. The basis for that conclusion is not made clear, even in the material of the returning officer.

Applicable Legal Considerations: 34 I’ll turn now to the legal considerations that apply to the determination of the application. In a judgment of Justice DiGiuseppe on a similar application back in 2007 involving John Rafferty as the applicant. (See Rafferty v. Mauro, 2007 ONCJ 573 (Ont. C.J.)). I do not believe there is any dispute that the applicable process is properly set out in the analysis in that judgment. I don’t propose to read it but I will read some of the highlights. 35 Section 71 of the Election Act states as follows, “For the purpose of determining the candidate who obtained the highest number of votes and within the four days, Sunday being ex- cluded, following the official tabulation made by the returning officer, a judge may appoint a time and place to recount the votes cast Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 173

at the election, in the electoral district upon the application of a candidate or elector if it is made to appear by affidavit that (a)...”, and I’ll just read (a) and (b) because they are the Subsections that apply here, “...a Deputy Returning Officer has improperly counted any ballot or improperly rejected any ballot or made an incorrect statement of the number of ballots cast by any candidate.” 36 While I appreciate the campaign manager for the Liberal candidate may suggest that that is exactly what happened and has proffered a couple of examples to support the contention, I do not think the Act should be interpreted as broadly as to suggest whenever a circumstance involving a disputed ballot occurs, that a recount automatically ensues. I can’t imagine that is the law or we would be having recounts, as the respondent’s counsel suggests, in probably every election with respect to every candidate. 37 I think we are primarily concerned here with Subsection (b) of Sec- tion 71. That is, whether or not a prima facie case has been established that the returning officer has improperly tabulated the vote. 38 Reference to Section 67(2) which deals with margins of victory of less than 25 votes. I appreciate that section does not have application here. What is particularly germane is the fact that the margin of victory is very slight, particularly when one views the vote differential as between the two candidates amounts to 85 votes within the total of 44,000 plus votes cast for those two candidates. That is a very slim margin. I appreciate there is limited judicial guidance here because these recounts are so rare. But I have to think that consideration of such a close vote has to be a significant factor in the deliberations of the presiding judge in the determination as to whether or not discretion might be exercised to direct a recount, particularly when the count of those votes, unofficial or not, is found to vary from morning to night. 39 The onus is on the applicant to establish one of the grounds set out in Section 71(1). The onus is discharged, I accept counsel’s submission that it is a relatively modest standard, if “it is made to appear by affidavit” that one of the enumerated grounds exist. How the words ‘made to appear’ are to be interpreted are referenced in a citation from Justice Roach in another decision, Swansea Election, Re, [1963] 2 O.R. 525 (Ont. C.A.). And Justice Roach states as follows, “The statute requires that it be made to appear that one or other of those matters in fact occurred. He must...”, in this case she must, 174 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

“...establish a prima facie case, and he does not do that by merely stating the he believes that one or other of them occurred.” 40 One has to be mindful, when there is reference to ballots that might have been counted that perhaps weren’t counted, that those are ballots that in the view of a campaign official or a party official, that should have been counted. I do not think that is what the test in Section 71(1) was designed to address. 41 One has to look at the facts objectively and consider whether or not the prima facie threshold has been met. One has to consider the affidavit materials in their entirety. There are a litany of errors that were cited by Justice DiGiuseppe in the Rafferty case. The vote differential between the two candidates in that election was even less: 41. 42 In the case before me, it is difficult to ascertain from the affidavit material, including reference to the affidavit material from the independent party, if I can characterise the elections officials in that way, as to exactly what happened here. I appreciate we can speculate on that issue. Perhaps the phone call to the election official detailing the results on the night of the election were erroneous or a number got transposed or there were, as referenced in the returning officer’s affidavit, perhaps minor clerical errors. Having read all the materials, and I did have a chance to read all the materials, one cannot ascertain exactly what transpired. 43 It is interesting to note in the legislation that even if the “threshold” consideration has been met there is still discretion in the Court, an overriding discretion, as to whether or not to order a recount. In an admoni- tion from Justice Walker, the Saskatchewan Court of Appeal, in another case called Goos v. Lampard, 1986 CarswellSask 156 (Sask. Q.B.) I note, Recount proceedings will not be ordered as a matter of course. It is the duty of the Court to prevent unnecessary proceedings. 44 Particularly, and I’ll add, costly ones like this. “But there can be no hard and fast rule as to the exercise of this judicial discretion, for the moment that happens the judicial discretion of the judge is fettered.” 45 This case provides direction that not every close election warrants a mandatory recount, unless there is a mandated review. Even in those circumstances the judge has discretion even if the vote differential is only 25. 46 The conclusion I have reached here is that the discrepancies that saw the unofficial results from the night of the election indicating an 85 vote Racco v. Ontario (Chief Electoral Officer) P.D. Tetley J. 175

victory for the Liberal candidate, Ms. Yeung Racco, with the subsequent official tally of these same results indicating that Ms. Martow had won the election by the exact same differential cannot be reconciled. 47 I appreciate one count is unofficial and it’s the official result that counts. But I do not know how the electorate in Thornhill, particularly the 44,000 plus people that voted for the two candidates, can be assured that their votes were properly counted. It may well be that there was a clerical error or a mistake on the night of the election that resulted in the unofficial results being tallied incorrectly. I appreciate these results are posted on an unofficial basis. I do not wish this conclusion to be viewed as a critique of the election officials. I am not certain that anything is amiss. But isn’t that what an election is all about? To determine with certainty who has been elected by the democratic will of the majority of the voters. 48 I am certain that the unofficial return from records brought great joy to the camp of Ms. Yeung Racco on the election night. The 85 vote differential similarly brought consternation to her opponent’s camp. 49 It is difficult, based on the record here, to know with certainty, whether the results of polls that were officially tabulated accurately represent the will of the voters. I am none the wiser for the affidavit material filed. I found the affidavit of the returning officer to be particularly compelling. I am quite certain Ms. Di Ruscio tallied the votes accurately. She would have been surrounded by representatives, maybe not literally but they would have been on scene, of the two candidates in aid of that task. There is no dispute, as responding counsel indicates, that those were the numbers. I am just not certain we can be assured that those are the numbers. 50 The accumulation of the concerns referenced by the applicant are per- suading in my view. I do not want to unfairly minimize the ballot issue but I conclude it is a relatively modest one. 51 However, when the vote is so close, in terms of one candidate being elected or not, it seems to me that the threshold consideration, as referenced in the legislation, must be given a “liberal” interpretation. I cannot imagine that those who voted for whatever candidate is subsequently concluded to have won, or alternatively lost, this election would be satisfied with anything less. I appreciate the electorate doesn’t make this determination, a criminal court judge of the Ontario Court Of Justice makes this determination. That said, I am mindful of the fact that there are a lot 176 MUNICIPAL & PLANNING LAW REPORTS 29 M.P.L.R. (5th)

of people interested in this proceeding who are not here, in fact there are 50,000 of them who reside just down the road. 52 I conclude with a comment that is attributed to Justice Cory. It is referenced in the other case that was cited by applicant’s counsel that deals with when is a ballot a valid ballot. It is a comment in the case of Haig v. R., [1993] 2 S.C.R. 995 (S.C.C.) at page 1058 in which Justice Cory indicates the following. The right to vote is a fundamental importance to Canadians and to Canadian democracy. 53 And to that I would add that every Canadian, specifically for the purpose of this application, every voter in the riding of Thornhill, should rest assured that the vote they cast in the democratic process last week has been properly tabulated and the candidate who secures the most votes duly elected. After reading this application material and listening to the concerns raised by the applicant, in view of the noted discrepancies, and given that the election results hang in the balance of a relatively modest number of votes when considered in the context of the whole, I conclude the electorate cannot be assured that their democratic will has been accurately determined absent the requested recount. 54 In my view, for those reasons, the applicant has established a basis prima facie case for the requested relief. I conclude that there is, at the very least, a case to be addressed and that the only way to address that case is by the requested recount. The recount is therefore ordered in relation to the grounds referenced in both Section 71(1)(a) to a lesser extent and of more significance, for the reasons I’ve endeavoured to elicit without great clarity given the hour and the exigencies of time, under Section 71(1)(b). I think the electorate would demand nothing less, quite frankly, in these circumstances. 55 An order shall therefore issue for the reasons I’ve referenced in the form, if that’s acceptable to all concerned, indicated at Tab 3 of the materials provided on behalf of the Chief Electoral Officer of Ontario directing that a recount be held. 56 MATTER ADJOURNED Application granted.