10718 Nfld. Inc. Applicant And: The City of St. John's Respondent, 2018 NLSC 82

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : 10718 Nfld. Inc. v. St. John's (City) , 2018 NLSC 82 Date : April 17, 2018 Docket : 201701G7490 Between: 10718 Nfld. Inc. Applicant And: The City of St. John's Respondent Before: Justice Frances J. Knickle Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: November 16, 2017 December 19, 2017 Appearances: Jerome P. Kennedy, Q.C. Appearing on behalf of the Applicant Ian F. Kelly, Q.C. Appearing on behalf of the Respondent Daniel M. Glover Authorities Cited:

CASES CONSIDERED: Shell Canada Products Ltd. v. Vancouver (City), (SCC), [1994] 1 S.C.R. 231; ImmeublesPort Louis Ltée v. Lafontaine (Village), (SCC), [1991] 1 S.C.R. 326; Citipark Inc. v. Hamilton (City) (2000), 20M.P.L.R. (3d) 23, 8 C.L.R. (3d) 178 (Ont. Sup. Ct.); Swift Current (City) v. Leslie (No. 2), (SK CA), [1920] 1W.W.R. 467, 52 D.L.R. 532 (Sask. C.A.); United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19; TrimartInvestments, Ltd. v. Gander (Town), 2015 NLCA 32; Archean Resources Ltd. v. Newfoundland (Minister of Finance), 2002 NFCA 43;Sun Life Assurance Co. of Canada v. St.

John’s (City), 2006 NLCA 62; 122-124 Avenue Road Holdings Inc. v. Toronto (City) (1991), (ON SC), 36 M.V.R. (2d) 104, 6 O.R. (3d) 661 (Ct. J. (Gen. Div.)); Focaccia Holdings Ltd. v. Summer Village ofParkland Beach (Subdivision and Development Appeal Board), 2014 ABCA 132; Green v. Bank of Montreal (1999), 15 P.P.S.A.C. (2d)143, 2 M.P.L.R. (3d) 178 (Ont. Ct. J. (Gen. Div.)); Seralanca Inc. v. Sudbury (City) (1981), (ON SC), 12 A.C.W.S.(2d) 238, 36 O.R. (2d) 1 (H.C.J.); RVB Managements Ltd. v. Rocky Mountain House (Town), 2014 ABQB 51; Seidel v. TelusCommunications Inc., 2011 SCC 15; Rogers v.

City of Toronto (1915), (ON SC), 33 O.L.R. 89, 21 D.L.R. 475 (S.C.);John Mackay & Co. v. Toronto (City) (1919), 48 D.L.R.151, (UK JCPC), [1919] 3 W.W.R. 253 (Ont. P.C.); CollavinoBrothers Construction Co. v. Winsor (City), (ON SC), [1972] 3 O.R. 455, 28 D.L.R. (3d) 466 (H.C.J.); MidnightMarine Ltd. v. Lloyd’s Underwriters, 2010 NLCA 64; Lamontagne v. Quebec Railway, Light & Power Co., (1914), (SCC), 22 D.L.R. 222, 50 S.C.R. 423; Constructions Scarmar Ltée/Scarmar Constructions Ltd. v. Geddes Contracting Co., [1989]B.C.W.L.D. 2210, [1989] C.L.D. 1135 (C.A.); Wonderland, Cleethorpes East Co. Amusement Co. Ltd. v.

British Railways Board, [1963]2 All E.R. 775 (H.L.) STATUTES CONSIDERED: Urban and Rural Planning Act, 2000, S.N.L., c. U-8; St. John’s Development Regulations (City of St.John’s, 2018) City of St. John’s Act, R.S.N.L. 1990, c. C-17; Planning Act, R.S.O. 1990, c. P. 13;

Interpretation Act, R.S.N.L. 1990, c. I-19 TEXTS CONSIDERED: Ian MacF Rogers, Q.C., The Law of Canadian Municipal Corporations, Second Edition, looseleaf (Toronto:Thomson Reuters, 2017) AUTHORS CITED: The Honourable Thomas A. Cromwell, Siena Anstis & Thomas Touchie, “Revisiting the Role of Presumptions ofLegislative Intent in Statutory

Interpretation”,

(2017) Vol. 95 No. 2 C.B.R. 297 REASONS FOR JUDGMENT Knickle, J.: INTRODUCTION [1] This is an application by 10718 Nfld. Inc. (the “Developer”) against the City of St. John’s (the “City”). The application hasarisen out of a dispute over the next steps in a construction project for a multi-purpose development, commonly known as the “Galway”Development (“Galway”). The Applicant, the Developer, seeks relief by way of extraordinary remedies in the nature of a declarationand mandamus. BACKGROUND FACTS [2] Galway occupies over 970 hectares (2,400 acres).

The development is proceeding in stages and is anticipated to take severalyears to complete. Galway will include residential, industrial and commercial areas. The residential development could comprise asmany as 5,000 units. The design has required re-zoning and major additions to civic infrastructure. The Developer advises that it hasinvested over 95 million dollars in the project to date. According to the City, most of the development is still at the conceptual stage. [3] Until this application, the development progressed without difficulty; as much as can be the case with a complex project ofthis nature.

Since 2011, the Developer has made the various and necessary applications; including applications to re-zone several areasto permit particular developments. The City has responded accordingly.

In some cases, the City has given what is called “approval inprinciple”; in other instances, the City has responded with comments and advised of needed revisions before formal approval can begiven. [4] Given the complexity of the project, the City advises it is not unusual that some development commence in advance offormal approval by way of the mandatory development agreement. [5] In May of 2017, one development agreement was executed by the parties for the area known as CP-11; however, there arestill several agreements outstanding. [6] Over the course of the summer and autumn of 2017, a dispute arose between the Developer and the City over the content ofthe remaining development agreements.

The Developer’s Position

[ 7 ] The Developer objects to what the City describes as a “standard arbitration clause” to be included in the outstanding development agreements. The Developer objects, notwithstanding that it approved the identical clause in the development agreement for area CP-11. [ 8 ] The City’s proposed arbitration clause states: The Developer agrees to the following arbitration process for conditions contained in the Agreement: (

a) Where a difference arises between the parties bound by this Agreement, and where the difference arises out of the

interpretation, application, administration or alleged violation of this Agreement, and including any question as to whether a matter is arbitrable, one of the Parties may notify the other party in writing of its desire to submit to arbitration the difference or allegation for arbitration and the notice shall contain the n of the name of the person appointed to be an arbitrator by the party giving the Notice; (

b) The party to whom the notice is given shall within five (5) days after receiving the notice, name the party whom it appoints to be an arbitrator and advise the party who gave the notice of the name of its appointee; (

c) The two arbitrators names in accordance with its provisions shall within five (5) days after the appointment of the second of them, name a third arbitrator who shall be the Chairperson of the Arbitration Board; (

d) Each party who is required to name a member of the arbitration Board shall pay the remuneration and expenses of that member and the parties shall pay equally the remuneration and expenses of the Chairperson; (

e) The decision of the arbitration board shall be given within fourteen (14) days following the appointment of the Chairperson. It is understood, however, that the Arbitration Board shall not be authorized to make any decision inconsistent with the stipulation of this Agreement, not to delete, alter, or amend any art thereof; (

f) Notwithstanding Section(e), the decision of the arbitration board shall be binding upon the parties; (

g) The arbitration shall be conducted in accordance to the rules set out under the Arbitration Act,

Chapter 8, R.S.N.1990, c.A- 14 as amended for the Province of Newfoundland. [ 9 ] The Developer asserts that the proposed arbitration clause precludes its ability to access courts to resolve conflicts between it and the City arising from the development agreements. Under the clause, once notice is given, the arbitration process is set in motion and is mandatory. There is no dispute that but for the proposed clause, should a disagreement arise between the parties, the Developer would have recourse to the Court to commence legal action. [ 10 ] The Developer now seeks redress in this Court.

Initially, the Developer sought: - a declaration that the City exceeded its legislative authority requiring the arbitration clause before approving the development; - a declaration that it was improper for the City to act in a manner that denied a citizen access to the Courts; and - a declaration and Order for mandamus requiring the City to comply with its governing legislation insofar as the approval of the Development Agreements between the Developer and the City must be approved by City Council, not city staff. [ 11 ] In the written brief, the nature of the relief sought evolved.

The Developer no longer asserted that the City has no authority to include arbitration clauses in its developments agreements, but instead sought an Order in the nature of mandamus to compel the City to include wording that confirms the Developer’s right to access the courts. [ 12 ] At the same time, the Developer also sought a declaration from the Court that, in these circumstances, the Developer is not required to sign the proposed development agreements, and a further Order of mandamus “compelling the City to address the issuance of development agreements”. The Developer also seeks costs.

The Respondent’s Position [ 13 ] The City submits the proposed arbitration clause is not only within its jurisdiction or authority under the Development Regulations , but is reasonable exercise of that authority, given the nature of development agreements, and in particular the complexity of

the Galway development. [14] The City advises it is seeking only to ensure that the development proceeds effectively and efficiently. The City submits it hasa duty to ensure the welfare of its citizens, by ensuring not only is any development in compliance with planning laws, but that it occursin a cost-effective manner without unduly burdening its citizens. The City maintains that the proposed arbitration clause has been in useby the City for “approximately the past two decades” in several developments agreements.

The City submits to accede to theDeveloper’s request will mean there would be no requirement that the Developer seek arbitration, and would render arbitration clausemeaningless. [15] The parties are at an impasse. The development cannot proceed without the formal approval by the City of the pendingdevelopment agreements, and the Developer objects to the proposed arbitration process as a term of that approval. Issue to be Decided [16] Does the City possess the authority to require mandatory arbitration as a term of approval of a development in a developmentagreement?

ANALYSIS [17] Notwithstanding the Developer advanced multiple complaints as to the City’s conduct and exercise of authority, the only issueto be decided is whether or not the City is acting within its jurisdiction in insisting on mandatory arbitration in the outstandingdevelopment agreements. [18] The other complaints did not raise questions of jurisdiction and it is not for this Court, in an application for judicial review, todictate to the City how to exercise authority properly conferred or within its jurisdiction. [19] However, the City’s insistence on including mandatory arbitration over the objection of the Developer raises a jurisdictionalissue because the insistence on the clause is not strictly a matter of the City’s ability to contract, of which there is no issue between theparties, but a matter of the City’s authority in the regulation of development. [20] Being a creature of statute, the City has only those powers given to it either expressly by its enabling legislation, or as arenecessarily implied or incidental to those powers expressly given.

As stated by the Supreme Court of Canada in Shell Canada ProductsLtd. v. Vancouver (City), [1994] 1 S.C.R. 23 at paragraph 24: 24. … As creatures of statute, however, municipalities must stay within the powers conferred on them by the provincial legislature. InR. v. Greenbaum, (SCC), [1993] 1 S.C.R. 674, Iacobucci J., speaking for the Court, stated, at p. 687: Municipalities are entirely the creatures of provincial statutes. Accordingly, they can exercise only those powers which are explicitlyconferred upon them by a provincial statute. [21] In Immeubles Port Louis Ltée v.

Lafontaine (Village), (SCC), [1991] 1 S.C.R. 326, Gonthier, J. stated, atparagraph 44: 44. A municipality, which is a creature of statute, has only the powers expressly delegated to it or resulting directly from powers sodelegated. Acting otherwise goes to the very existence of the power, since the administrative authority has no jurisdiction to act as it isdoing. … [22] In Citipark Inc. v. Hamilton (City) (2000), 20 M.P.L.R. (3d) 23, 8 C.L.R. (3d) 178 (Ont. Sup. Ct.), the issue to be resolved wassimilar to the issue in the present circumstances. Molloy, J. stated, at paragraph 3: 3.

The sole issue for me to determine is whether the City has the authority to regulate the matters in question as part of its statutorypower to license businesses. The starting point for any such analysis must be the empowering statute, followed by a consideration of thespecific provisions of the by-law under attack and whether they fall within the terms of the empowering statute. Case authority dealingwith similar empowering provisions or similar by-law provisions will be of some assistance, but must be applied with care if theirstatutory underpinnings differ from those before the Court.

See also Swift Current (City) v. Leslie (No. 2), (SK CA), [1920] 1 W.W.R. 467, 52 D.L.R. 532 (Sask. C.A.) atparagraph 8. [23] In deciding what the legislation permits, the modern view is to take a “broad and purposive” approach; looking at the words ofthe legislation in its “entire context”, and the words “in their ordinary sense, harmoniously with the scheme of the Act” (See United TaxiDrivers’ Fellowship of Southern Alberta v. Calgary (City), [2004] 1 S.C.R. 485, 2004 SCC 19) at paragraph 8, and Trimart Investments,Ltd. v.

Gander (Town), 2015 NLCA 32, per Hoegg, J.A., speaking for a unanimous court at paras. 15 – 20). [24] The Court must seek the

interpretation that “best ensures the objects of the Act and its true meaning” (see Trimart Investmentsat paragraph 17, citing Green, J.A. (as he then was) in Archean Resources Ltd. v. Newfoundland (Minister of Finance), 2002 NFCA 43 atparagraph 22). [25] As stated in Ian MacF. Rogers, Q.C., The Law of Canadian Municipal Corporations, Second Edition, looseleaf (Toronto:Thomson Reuters, 2017):

349 The proposition that local authorities are confined within the limits of their express powers does not mean that they are limited to theprecise terms of the grant and that the power to do each particular act must be specifically delegated. Municipalities may also exercisepowers which are necessarily or fairly implied, or incidental to, their express powers. Implied powers are not limited to those which areindispensably necessary to carry into execution those expressly granted, but they are implied from the necessity that the latter may bemore completely executed.

Implied powers may arise by natural implication from a grant of an express power or by logical inferencefrom the purposes and functions of the corporation with which they must be in consonance. [26] See also 122-124 Avenue Road Holdings Inc. v. Toronto (City) (1991), (ON SC), 36 M.V.R. (2d) 104, 6O.R. (3d) 661 (Ct. J. (Gen.

Div.)), citing from the above excerpt in Canadian Municipal Law, and further, where Rogers states at 359-60: The legislature may frame the terms of a specific grant of authority to enable the council to do any act necessary to implement the grant,but it may sometimes leave the means of exercising a power undefined. In both cases, so long as the means adopted are reasonablydirected to the accomplishment of the act authorized the court will imply the power to proceed in this manner.

There is no express authority in the governing legislation [27] Development within the City is regulated under the Urban and Rural Planning Act, 2000, S.N.L., c. U-8 (“URPA”), and St.John’s Development Regulations (City of St. John’s, 2018) (the “Development Regulations”). As stated in Sun Life Assurance Co. ofCanada v. St. John’s (City), 2006 NLCA 62 at paragraph 55, per Mercer, J A.: 55. The purpose of the URPA, considered in the light of accepted interpretative principles, is to provide the statutory basis fordevelopment control throughout the Province.

In respect of urban planning it establishes a structural framework for the development,adoption and amendment of municipal plans, and regulations to implement the same.

Section 13 of the URPA states the requirements fora municipal plan in terms which, on their face, are comprehensive. …. [28] And paragraph 58 where, Mercer, J.A. stated: 58. … the URPA, Municipal Plan and Development Regulations on their face comprise a detailed and comprehensive planningregime for the development within the City…. [29] The Development Regulations are made pursuant to the URPA under sections 35 and

Section 5.1.1 of the DevelopmentRegulations made pursuant to URPA, states: 5.1.1 All Development within the City shall be carried out and maintained in accordance with these Regulations and any other by-law orregulations enacted by Council. [30] If the City possesses the necessary statutory authority to impose mandatory arbitration as part of the terms of approval in adevelopment agreement, that authority must be found either expressly, or by necessary implication as incidental to that express authorityunder URPA, or the Development Regulations. [31] Under

section 5.1.2 of the Development Regulations, no development can be carried out unless either a Development Permithas been issued or a Development Agreement has been approved. The more complex developments involve a development agreement,or in the case with Galway, several development agreements and permits. [32] On the one hand, a development agreement is a contract. However, as one of the two ways in which development is approved,development agreements are a key mechanism the City has at its disposal to control development. [33] In Focaccia Holdings Ltd. v.

Summer Village of Parkland Beach (Subdivision and Development Appeal Board), 2014 ABCA132 at paragraph 30, development agreements under the relevant legislation were described: 30. The “development agreement” mandated by the Act is clearly a contract and normal contractual remedies are available. However,it is also a specialized type of contract which has a public law or regulatory aspect. Development agreements do not just represent abargain struck between the developer and municipality, but are also one of the regulatory tools by which the municipality controlssubdivision and development.

Development agreements work in combination with development permits, subdivision approvals, andmunicipal by-laws. … [34] It is this peculiar dual nature of development agreements that is the source of the conflict in this case. The proposed clausecannot be treated solely as a negotiated clause, but also a regulatory requirement by which the City must find its authority either expressor implied in the legislation. [35] Upon review of the URPA and the Development Regulations, and other legislation touching on the City’s authority generally(such as the City of St. John’s Act, R.S.N.L. 1990, c.

C-17) (“CSJA”), there is no express statement conferring authority for the City torequire mandatory arbitration as part of a development agreement. [36] Nor could the City, when asked by the Court during the hearing of this matter, point to any express statutory authority for theCity to require mandatory arbitration in a development agreement. For example, sections 340.19-340.24 of the CSJA, expressly providesfor mandatory arbitration as the means by which disputes arising out of collective bargaining with the City’s fire fighters are to beresolved. [37] No similar

section exists under URPA, or the Development Regulations; notwithstanding that the URPA contemplates disputeresolution and enforcement of development permits as part of the control of development. See for example sections 35(1)(e)(vi) and 36(2)(

g) of the URPA. [38] As there is no such express authority, if the authority exists it must arise by implication, or as being necessarily incidental to

the express authority the City does possess. There is no implied authority in the legislation [39] There is no basis in the URPA or Development Regulations from which the necessary authority to require mandatory arbitrationcan be implied; or arises as necessarily incidental to the express authority that does exist. [40] While it is not necessary for each and every action of the City to be expressly authorized, there must be some basis in theenabling legislation for implying the authority to require mandatory arbitration. [41] For example, in Green v.

Bank of Montreal (1999), 15 P.P.S.A.C. (2d) 143, 2 M.P.L.R. (3d) 178 (Ont. Ct. J. (Gen. Div.)), theOntario Court of Justice (relying on the reasoning in Independent Business Assn. v. Vancouver (City), (BC CA),[1988] B.C.W.L.D. 1435, 24 B.C.L.R. (2d) 96 (C.A.)) found that the municipality in question could make an assignment of its rightsunder a subdivision agreement; notwithstanding there was nothing in the legislation that expressly permitted such an assignment. [42] The Court was satisfied the necessary authority could be found under section 51(26) of the Planning Act, R.S.O. 1990, c.

P. 13,which gave the municipality the authority to “enforce its rights under a subdivision agreement.” At paragraphs 58 - 60, the Court stated: 58. … In my view the right to enforce is equivalent to the right to take whatever steps are necessary to see that what is to be done forthe benefit of the municipality under a Subdivision Agreement gets done. 59. In this case the Town chose to exercise its power to enforce by making the Assignment. In doing so it acted for the benefit of theTown.

As a result the Town did not have to contract with somebody to do the work; it did not have to monitor the work; and it avoidedbeing on the wrong end or incurring the expense of defending a lawsuit with the Bank for drawing down on the Performance Guarantee. 60. I therefore find that the Town acted within its jurisdiction in making the Assignment. [43] In Seralanca Inc. v.

Sudbury (City) (1981), (ON SC), 12 A.C.W.S. (2d) 238, 36 O.R. (2d) 1 (H.C.J.), theOntario High Court found that the express statutory ability to “sell land” included the implied authority to take back a mortgage on thatsale as a “long” and “inherent” power arising from the power to sell. [44] In both of these cases the Court found a relationship between the authority that was exercised and the express authority that wasgranted.

The implied powers arose “logically” and “naturally” from the express power and were reasonable “means” for exercising thepower that was express. [45] But there is nothing in the Development Regulations or URPA from which the ability to require arbitration as part of theapproval of an application for development, arises logically or naturally by implication.

Section 5.4.2 of the Development Regulations does not provide the necessary authority [46] The City submitted

section 5.4.2(1), of the Development Regulations as a source of implied authority to require mandatoryarbitration in a development agreement.

Section 5.4.2 is the

section on development agreements and states: 5.4.2 Development Agreement

(1) A Development Agreement shall set out the terms of Council's approval, and shall be signed by the applicant and the City Clerkwithin six (6) months of the approval granted by Council.

(2) Approval given to a Development under a Development Agreement is automatically null and void if the applicant or the operator ofany facilities allowed under the Development Agreement is, in the opinion of Council, in violation of any of the terms of theDevelopment Agreement or any other approvals for permits issued subsequent thereto.

(3) A Conservation/Mitigation Plan Agreement shall be entered into between the applicant and Council where an EnvironmentalAnalysis Report (EAR), or a Land Use Impact Assessment (LUIA) has been required by Council and this Agreement shall specify: (

a) the contents of a Conservation/Mitigation Plan; (

b) applicable development fees; (

c) the timing and phasing of the implementation of the Conservation/ Mitigation Plan; (

d) the duration of the Agreement;

(

e) any penalties or fines for the violation of the Agreement.

(4) Any violation of the terms of the Agreement shall result in the immediate cessation of the Development and, if damages haveresulted, the full restitution therefore, together with any other penalties, fines, actions, and so forth as may be applicable in this instance. [Emphasis added] [47] The City relies on the phrase in 5.4.2. (1) “A Development Agreement shall set out the terms of Council’s approval” asproviding it with the necessary implied authority. [48] There is no doubt that

section 5.4.2 states that council “shall” set the terms of the approval in a development agreement. Thisis express authority for the City to determine the terms of the approval of development agreement and supports why a developmentagreement is more regulatory tool than freely negotiated contract: only the City decides the terms. [49] But as a regulatory instrument, and not a freely negotiated contract, a contextual review of the Development Regulations doesnot support an

interpretation of the phrase “shall set out the terms” to include mandatory arbitration. [50] The development agreement represents the regulatory approval for development, and in accordance with URPA and theDevelopment Regulations. So the “terms” of the approval must relate to what URPA and the Development Regulations require before theCity will so approve.

In other words, the “terms of the approval” are not an unlimited set of contractual terms the City might want tonegotiate, but are those terms that reflect what the Development Regulations and URPA require before development can be approved. [51] To imply that the City has the authority to require mandatory arbitration as a “term of approval” of a development agreementwould be to defacto enact regulation for mandatory arbitration in development agreements. Such an implication would be contrarysettled principles of statutory

interpretation. [52] Legislation cannot operate to remove an existing right, without clearly expressing such an intention, or such intention isnecessarily implied in the legislation (see Lamontagne v. Quebec Railway, Light & Power Co. (1914), (SCC), 22 D.L.R.222, 50 S.C.R. 423 at paragraph 10; Constructions Scarmar Ltée/Scarmar Constructions Ltd. v. Geddes Contracting Co., [1989]B.C.W.L.D. 2210, [1989] C.L.D. 1135 (C.A.)). Ambiguity as to the intent, should be resolved in maintaining the right in question:Wonderland, Cleethorpes East Co. Amusement Co. Ltd. v.

British Railways Board, [1963] 2 All E.R. 775 (H.L.) at 778. (See TheHonourable Thomas A. Cromwell, Siena Anstis & Thomas Touchie, “Revisiting the Role of Presumptions of Legislative Intent inStatutory

Interpretation”

(2017) Vol. 95 No. 2 C.B.R. 297). [53] In the absence of express language so granting such a limitation (which, as discussed earlier, is within the City’s enablinglegislation to so enact), it would be contrary to the above settled principles to imply the authority to impose such a limitation on adeveloper as a term of its approval for a development. [54] The above is so, notwithstanding the efficacy of including arbitration as part of a development agreement. The utility andefficacy of arbitration in a development agreement was observed in RVB Managements Ltd. v. Rocky Mountain House (Town), 2014ABQB 51.

In that case, the developer alleged (among several allegations) that the municipality had acted in “bad faith” by havingunnecessarily resorted to arbitration under a development agreement. In finding no bad faith, the Court stated at paragraph 202: 202. … The Development Agreement provides for arbitration to resolve disputes quickly and expeditiously. On a policy basis, itwould be unwise to conclude that simply accessing the arbitration process multiple times could give rise to complaints of bad faith.

Newissues can arise, and it would be wrong to penalize parties for accessing the dispute resolution mechanism to which they have agreed.Arbitration clauses are included in order to avoid litigation every time an issue cannot be resolved. … [55] In a complex multi-purpose development, such as is the case here, resolving disputes by way of arbitration may provide a time-efficient and cost-effective alternative to litigation, and in this regard, the City’s rationale for the inclusion of arbitration as a disputeresolution mechanism, in development agreements is sound (See Seidel v.

Telus Communications Inc., 2011 SCC 15 at paragraph 23). [56] Nor is there any dispute that, as a corporate entity, the City enjoys the ability to enter into a contract. See

section 19 of theInterpretation Act, R.S.N.L. 1990, c. I-19 and Independent Business Assn. citing Rogers v. City of Toronto (1915), (ONSC), 33 O.L.R. 89, 21 D.L.R. 475 (S.C.); and John Mackay & Co. v. Toronto (City) (1919), 48 D.L.R.151, (UK JCPC),[1919] 3 W.W.R. 253 (Ont. P.C.) at 155. Having the authority to contract, absent any limitation imposed by enabling or otherapplicable legislation, would include the ability to agree to arbitration (see for example, Collavino Brothers Construction Co. v.

Winsor(City), (ON SC), [1972] 3 O.R. 455, 28 D.L.R. (3d) 466 (H.C.J.) and Swift Current at paragraphs 6 and 7). [57] But while the ability to contract might give the City the authority to agree to arbitration, this does not include the insistence ofarbitration as a term of approval of development agreement. That insistence must find its authority in the Development Regulations as awhole and read harmoniously with all the regulations and URPA. As stated in Trimart at paragraph 19, per Hoegg, J.A. : 19. A broad and purposive approach to

interpretation of municipal legislation does not mean that a municipality can accord itselfauthority to take actions which fall outside of its statutory grant. A municipality is a creature of statute and has only the authorityconferred on it by its enabling legislation (R. v. Greenbaum, (SCC), [1993] 1 S.C.R. 674 (S.C.C.), page 687, andConception Bay South (Town) v. Dawe, 2001 NFCA 19, 205 Nfld. & P.E.I.R. 258 (Nfld. C.A.), paragraph 110). It can only exercisepowers which are explicitly authorized or found to be authorized after determining the true meaning of the legislation.

If authorization forthe municipal action is not found in the statute, properly and purposively construed, then the action will be held to be ultra vires themunicipality and will not be permitted. [58] See also Midnight Marine Ltd. v. Lloyd’s Underwriters, 2010 NLCA 64, per Barry, J.A. at paragraph 37:

37. So in ascribing meaning to language, whether statutory or contractual, judges have moved away from exclusive reliance upon words used and adopted the concept of giving meaning to words in their context, considering the grammatical and ordinary sense of the words along with the purpose of the one drafting them, with the object of arriving at the best approximation of the shared expectations that the parties to the relevant communication succeeded in creating in each other. [ 59 ] There is simply nothing in the URPA or the Development Regulations that lends itself to so broad an

interpretation of

section 5.4.2. [ 60 ] A review of the development agreement for CP-11, signed in May 2017, supports that the meaning of “terms of approval” is circumscribed by the URPA and the Development Regulations . [ 61 ] For example, the Development Regulations expressly speak to the authority of the City to require certain financial guarantees as a condition for development. Under Regulation 5.12, Council can require financial guarantees from a developer, and Council has the discretion to determine the “form” of that guarantee.

Section 5.12 states: 5.12 Council may require a developer to make such financial provisions as may be necessary to guarantee the payment of assessments, entire site reinstatement, and to enforce the carrying out of “any other condition attached to a permit, or licence. Financial provisions in this

section shall be in such form as may be determined by Council [ 62 ] This authority flows from

section 38 of the URPA which states: 38.

(1) A council or regional authority responsible for regulations made under this Part may, in those regulations, require that a person, before starting a development, make financial provisions to guarantee the payment of service levies, ensure site reinstatement and to enforce the carrying out of another condition attached to a permit or licence. [ 63 ] Given this, it is not surprising that the development agreement signed in May of 2017 for CP-11, contained several clauses relating to the Developer’s obligation to provide financial security or guarantees – as one of the “terms” of approval. [ 64 ] Under

section 5.4.2(2), approval by Council for a development can be rendered null and void by Council in certain circumstances: if the applicant, or anyone operating facilities under the terms of the agreement is in the opinion of “Council” in violation of any of those terms.

As with the requirement for financial guarantees, the development agreement for CP-11 also contains several clauses giving the City the authority, at its sole discretion, to consider the agreement “voidable” with seven days’ notice to the developer (clauses 14 -16). [ 65 ] In fact, upon review of the development agreement for CP-11, all the clauses contained within reflect various aspects of the regulatory requirements for development in the Development Regulations or URPA .

The development agreement CP-11 was submitted by the parties as being typical of development agreements. [ 66 ] That all of the clauses of the development agreement for CP-11 (except the one now before the Court), can find their basis in the Development Regulations, supports that the meaning of “shall set the terms of approval”, insofar as particular terms are required by the City and not negotiated, is confined to what is specifically required by the Development Regulations , or the URPA . [ 67 ] Further, the URPA and the Development Regulations establish a forum and procedure, other than arbitration, for the resolution of (at least some) disputes by the establishment of the appeal board. [ 68 ] While there is no quarrel that both appeal board and arbitration procedures might exist side by side addressing different issues, only the appeal board procedure was established under the URPA and the Development Regulations as being a directed route for resolving disputes. [ 69 ] Given that there could have been a mandatory arbitration process enacted as well, but there was not, and at the same time, a different mandatory dispute resolution mechanism has been expressly enacted, to imply “term of approval” under

section 5.4.2, to include mandatory arbitration in a development agreement, would be to imply a statutory dispute resolution mechanism that the legislators chose not to so implement in the control of development. [ 70 ] For the above reasons, to the extent the City requires a developer to agree to mandatory arbitration as a term of term of approval for development in a development agreement, the City is acting beyond its statutory authority as established under URPA and the Development Regulations .

There is no express authority, and the authority cannot be implied upon a contextual review of the legislation and regulations. The City did not act in bad faith [ 71 ] The Developer submitted the City only seeks to have the arbitration clause as a way of precluding the Developer from taking legal action against the City. The Developer did not pursue this allegation with vigor at the hearing.

It was clear that the City’s deponents in their affidavits strongly contested many of the factual assertions in support of bad faith or improper conduct alleged by the Developer. [ 72 ] Neither party sought to cross-examine the other’s deponents on their affidavits. [ 73 ] On the material that was before the Court, the Developer’s contention cannot be sustained. To the contrary, on a review of all the materials placed before the Court, it is evident that the City has gone to great lengths to accommodate the Developer.

In particular, the City agreed to implementing the development agreement related to CP-11 and permitting the Developer to build multiple residential

units in that area, notwithstanding that the necessary infrastructure had yet to be completed. [ 74 ] The City’s desire to use arbitration as a means to resolve disputes arising in a development agreement is not in bad faith but is reasonable. As discussed earlier, there are many reasons why arbitration would be agreeable to both any municipality and Developer. As the City advised, it has used arbitration in development agreements for over 20 years.

As the cases show, arbitration is ubiquitous in all areas of contract, including development agreements. [ 75 ] Likewise, the application for mandamus to compel the City to address the issuance of development agreements is without merit and is dismissed. There was no basis in the material provided to establish that there was an “issue” to be addressed (beyond the jurisdictional issue of whether or not the City possessed the necessary authority to require arbitration as part of a development agreement). It is unclear what the Developer was seeking with this request. COSTS [ 76 ] The Applicant had mixed success.

The City, while initially seeking to have the application dismissed, in oral argument advised the Court that it was seeking guidance on the availability of the mandatory arbitration clause. The City has conducted its dealings with the Developer in good faith, and there was a genuine issue to be resolved in determining the extent of the City’s authority. In these circumstances, there shall be no costs. CONCLUSION [ 77 ] The application for a declaration that the City cannot require mandatory arbitration as a term of approval of development in a development agreement is allowed.

To the extent the City requires arbitration as a term of approval of a development under the Development Regulations and the URPA , it is acting beyond its jurisdiction. [ 78 ] The application for mandamus is dismissed. [ 79 ] There will be no costs. _____________________________ Frances J. Knickle Justice