Court Of Appeal Summaries (August 3 ' 7, 2020)

• Published date: 11 August 2020
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

Please find below our summaries of the civil decisions of the Court of Appeal for Ontario for the week of August 3 to 7, 2020.

Shergar Development Inc. v. Windsor (City) confirms the power of the then OMB to award costs against a party whose land is expropriated when that party fails to accept a reasonable settlement offer made by the expropriating authority and takes unreasonable positions.

In Walia v. 2155982 Ontario Inc., the Court upheld a motion judge's determination that an interest clause in a mortgage was unenforceable pursuant to section 8 of the Interest Act because the interest rate increased subsequent to default under the mortgage.

Becker v. Walgate deals with the determination of a property line between waterfront properties.

Finally, in Grasshopper Solar Corporation v. Independent Electricity System Operator, a breach of contract case, the Court discusses the doctrines of estoppel by convention and promissory estoppel.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

CIVIL DECISIONS

Shergar Development Inc. v. Windsor (City), 2020 ONCA 490

[Rouleau, Hoy and Hourigan JJ.A.]

Counsel:

John Doherty, Anne Tardif, Roberto Aburto and Michelle Cicchino, for the appellant

Stephen Waqué, Gabrielle Kramer, Patrick Brode, Julie Lesage and Andrew Baker, for the respondent

Keywords: Administrative Law, Municipal Law, Land Use Planning, Expropriations, Statutory Interpretation, Civil Procedure, Costs, Offers to Settle, Expropriations Act, R.S.O. 1990, c. E.26, ss. 25, 32, Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 43, Rules of Civil Procedure, Rule 49, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Popack v. Lipszyc, 2016 ONCA 135, Toronto Area Transit Operating Authority v. Dell Holdings Ltd, [1997] 1 S.C.R. 32, Re Rotenberg et al. and Borough of York (No. 2) , 1976 CanLII 735 (ON CA),

facts:

This case has a long and tortuous history spanning 22 years, and involves the expropriation by respondent of the "Subject Lands" along the Detroit River in Windsor owned by the appellant.

On December 8, 1995, the appellant acquired the Subject Lands and another parcel of land (the "Railcut Lands") from the Canadian Pacific Railway Company (the "CPR") for a total consideration of $750,000. The CPR took back a mortgage in the amount of $562,500. On April 29, 1998, the respondent expropriated the Subject Lands for completion of a waterfront park. The appellant retained ownership of the Railcut Lands. On December 21, 1998, after months of delay because the appellant would not grant access to the Subject Lands, the respondent served a joint offer of compensation on the appellant and the CPR in the amount of $500,000, in accordance with s. 25(1) of the Ontario Municipal Board Act (the "Section 25 Offer"). The appellant's then counsel advised that his client would accept the offer. When the respondent inquired as to the amount of the CPR's security interest in order to allocate the compensation between the CPR and the appellant, the appellant refused to cooperate. It maintained that it was not required to provide an allocation of compensation between itself and the CPR. The failure of the appellant to provide this information frustrated the ability of the respondent to pay out the Section 25 Offer and resulted in the acceptance of the Section 25 Offer being effectively withdrawn.

After various intervening proceedings in both the Federal Court and the Superior Court, the appellant finally took steps to commence an expropriation arbitration on July 5, 2013, when it issued its claim for compensation, after the CPR had already issued its own claim earlier that year. The respondent later made individual offers of settlement to each of the CPR and the appellant. The CPR accepted the offer of $400,000 made to it. In exchange, the respondent obtained an assignment of all of the CPR's rights to compensation as determined by the OMB. The respondent's offer of settlement to the appellant, made on June 2, 2015, was equivalent in value to $1,208,155 in compensation for the appellant's interest in the Subject Lands (the "2015 Offer"). The appellant did not accept the 2015 Offer.

The OMB hearing to determine compensation commenced in February 2016. The appellant called two appraisers to provide expert evidence of market value who valued the Subject Lands at $3,937,000 and $5,150,000 respectively. In its May 25, 2016 decision, the OMB rejected the evidence of the appellant's appraisers, and stated it was concerned that neither appraiser had "fulfilled their duty to provide the Board with opinion evidence that [was] fair, objective and non-partisan," and that one of the opinions was "inadequate, inappropriate and unreasonable" and his conclusion "unreliable".

The OMB found that the Subject Lands' value was $710,000, consistent with the respondent's appraisal evidence. The OMB concluded that the amount owed to the CPR for its mortgage interest in the Subject Lands was $443,167 and that the appellant's residual interest in the compensation was $266,832.

The OMB awarded the appellant its costs of the proceeding. The respondent successfully sought a rehearing before the OMB pursuant to s. 43 of the Ontario Municipal Board Act, solely on the issues of interest and costs. In its decision on the rehearing (the "Rehearing Decision"), the OMB concluded that the 2015 Offer constituted "the amount offered by the statutory authority" and granted costs in favour of the respondent following the date of the 2015 Offer.

The appellant appealed the Rehearing Decision to the Divisional Court. The Divisional Court found the OMB's decision to be reasonable, relying on the fact that s. 32 also applies to "no land taken" (injurious affection) claims, for which the statutory authority is not required to serve an s. 25 offer. The Divisional Court also concluded that the OMB acted reasonably in awarding costs against an expropriated party. The court held that the purpose of the discretion afforded to the OMB under s. 32 is to encourage an expeditious settlement of claims on an equitable basis.

issues:

1. Did the Divisional Court err in deciding that the reasonableness standard of review applies?

2. Did the Divisional Court err in upholding the following decisions by the OMB:

a. The "amount offered by the statutory authority" in s. 32 of the Ontario Municipal Board Act refers to any offer made by the respondent, not just an offer made pursuant to s. 25; and

b. The 2015 Offer was not dealt with in the Ontario Municipal Board Act, and regard can, therefore, be had to Rule 49 of the Rules of Civil Procedure in exercising the Board's discretion under s. 32(2), and costs can be awarded against the appellant.

holding:

Appeal dismissed.

reasoning:

1. No. The proper standard of review with respect to the interpretation of the Ontario Municipal Board Act was correctness. However, the exercise of discretion to award costs is afforded considerable deference, and is not subject to a standard of review of correctness.

2. a...