Kevin Hope v. Fay Hope, 2013 SKPC 176

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2013 SKPC 176 Date: October 30, 2013 File: NB05-13 Location: North Battleford _____________________________________________________________________________ Between: Kevin Hope and Fay Hope - and - R.M. of Parkdale #498 Self-Represented For the Plaintiffs Bruce W. Wirth For the Defendant _____________________________________________________________________________ JUDGMENT D.J.

KAISER , J _____________________________________________________________________________ [ 1 ] The plaintiffs bring action against the defendant municipality claiming the return of $5,040.00 paid by them to the defendant as servicing fees pursuant to a servicing agreement that the plaintiffs and the defendant entered into as provided for in

Part VIII of The Planning and Development Act, 2007 , S.S., c. 13.2, hereinafter referred to as the PDA . More specifically, the position of the plaintiffs is that the defendant could not lawfully charge them these fees because they were not in respect of a “capital cost” as defined in s. 168 of that Act.

FACTS [ 2 ] The plaintiffs purchased two parcels of land at Turtle Lake, Saskatchewan that had been a part of the business and premises known as the Turtle Lake Lodge. The parcels are described as Parcel J, Plan 99-B 05436 and Parcel B, Plan 81-B-03549 and are within the defendant municipality. The plaintiffs intended to subdivide these parcels into smaller lots and sell the lots at a profit. [ 3 ] On March 4, 2011, the plaintiffs applied to the Ministry of Municipal Affairs for a Certificate of Approval allowing them to subdivide Parcel J into five lots.

Municipal Affairs forwarded a copy of the application to the defendant for its comments. Among other things, Municipal Affairs inquired as to whether the defendant required the applicants (being the plaintiffs herein) to enter into a servicing agreement pursuant to s. 172 of the PDA. The defendant was of the view that it did require a servicing agreement, and in due course prepared that agreement and provided it to the plaintiffs.

Paragraphs 4.5 and 4.6 were and are as follows: 4.5 To pay the Municipality off-site service fees totaling (sic) Five Hundred Dollars ($500.00) for each parcel in the “Plan” which the Municipality shall use, at a time, to be determined by council, to make improvements to municipal infrastructure such as landfill improvements which are required by the development of the lots shown on the “Plan”. 4.6 To pay the Municipality off-site service fees totaling (sic) Six Hundred and Thirty-five Dollars ($635.00) for each parcel in the “Plan” which is the amount equivalent to the amount collected from other properties in the area which was required for the sewage lagoon construction and will provide for ongoing maintenance of this facility. [ 4 ] The plaintiffs executed the agreement on September 15, 2011 and on the same day, paid to the defendant the sum of $5,675.00 in respect of these two paragraphs.

The defendant executed the agreement on September 20, 2011. [ 5 ] On October 3, 2011, the various requirements of the Act having been met, the Community Planning Branch of the Ministry of Municipal Affairs issued a Certificate of Approval in respect of the subdivision. By the terms of the servicing agreement, the above described fees became non-refundable upon the issuance of this certificate. [ 6 ] The plaintiffs also sought subdivision of Parcel B. The subdivision process was delayed, at least in part, because the parcel had to be re-zoned from commercial to residential.

Somewhere in this process, the plaintiffs formed the opinion that the fees set out in paragraphs 4.5 and 4.6 above were not lawful because neither constituted a “capital cost”, as defined in s. 168 of the Act . It appears that, in the proposed servicing agreement for Parcel B, the defendant initially requested the payment of these fees and the plaintiffs objected. The defendant then sought legal advice and removed the request for these fees. The defendant did however request fees for the realignment of a particular roadway.

The plaintiffs availed themselves of the provisions allowing for an appeal to the Municipal Board, (s. 176) and for reasons that are largely unrelated to the present matter, the Board held that the proposed fee for realigning the roadway must be deleted. [ 7 ] By the time that the plaintiffs became aware of the appeal provisions, the time for appealing the fees pertaining to Parcel J had expired. The plaintiffs asked the defendant to agree to an extension of time for taking the appeal, and the defendant declined.

However, in reviewing the matter, the defendant did realize that it had earlier charged the prior owner of Parcel J a levy of $635.00 in respect of the sewage lagoon. Accordingly it remitted this sum to the plaintiffs, thereby reducing the plaintiffs’ expenditure from a total of $5,675.00 to $5,040.00, which is the sum now claimed by the plaintiffs. [ 8 ] It is not clear when the plaintiffs became aware of the legal provisions relating to capital costs, but the Statement of Claim alleges that it was in April of 2012. However, they did not commence this action until October 12, 2012.

This was more that one year after the issuance of the Certificate of Approval (October 3, 2011), which gives rise to argument over the applicable limitation period set out in ss. 344(1) of The Municipalities Act , S.S. 2005, c. M-36.1. [ 9 ] The defendant did construct a new sewage lagoon that provides service to the five lots created out of Parcel J.

That process began in August of 2007 when Saskatchewan Environment advised the defendant that the existing lagoon was unacceptable, and stated that any new subdivision application would have to provide alternate sewage disposal methods or facilities before such new application could be approved. The defendant began plans for a new lagoon and in this respect passed a bylaw for 2008 authorizing a special tax of

$200.00 per lot for each lot in the recreational hamlets or subdivisions to be served by the new lagoon. They did the same thing for 2009 and 2010, and in June of 2011 passed a similar bylaw authorizing a tax of $35.00 per lot applicable to 2011. Thus a total of $635.00 per lot was charged by way of special taxes, which is no doubt the source of that figure in paragraph 4.6. [ 10 ] I am satisfied that the physical construction of the lagoon took place in 2010 and 2011. The actual date of completion of physical construction is not clear, but it was certainly sometime in 2011.

A permit to operate the facility was issued by the Saskatchewan Ministry of Environment in December of 2010. However, the administrator of the defendant municipality testified that the permit was issued because the first of the two cells required in the facility was ready to receive effluent, though the second was not. The permit was issued on the understanding that the effluent would go into the first cell, and that the second cell would soon be completed. I accept this as true. [ 11 ] There is a dearth of evidence as to exactly when the physical part of the lagoon was completed.

The last date that payments were made in respect of lagoon construction was October 12, 2011, though it would appear that these were likely the holdbacks required by The Builders Lien Act , and hence do not reflect that actual date the physical work was completed. The ability to establish this date lies with the defendant and it did not lead evidence establishing that date. I note that paragraph 4.6, above set out, appears to contemplate maintenance of an existing facility.

On the whole of the evidence, I find that the physical work was actually completed just prior to September 15, 2011, when the plaintiffs paid the fees to the defendant. On the other hand, I am also satisfied that when the plaintiffs applied for subdivision, and the defendant was required to decide if it would require a servicing agreement from the plaintiffs, the work had not been physically completed. In fact that last bylaw authorizing the special tax was passed well after the date of the subdivision application. [ 12 ] The timing of landfill improvements was much different.

At the time that the plaintiffs applied for subdivision, and at the time when they entered into the agreement and paid the fees, the defendant knew that it was going to have to make landfill improvements in the not too far distant future, but had no set plans to do so. That began to change on approximately December 6, 2011, when the defendant was notified by letter from the Ministry of Environment that the current facility did not conform to a new Code of Practice adopted by the Ministry and upgrades would be necessary. This is all well after the funds at issue in the present matter were paid.

CAUSES OF ACTION AND NATURE OF RELIEF SOUGHT [ 13 ] The Statement of Claim appears to have been drafted by the plaintiffs, as opposed to the clerk of the court. This is not unusual when a plaintiff is represented by a member of the Law Society. Neither plaintiff is so represented nor are either presently members of the Law Society. However, the male plaintiff does hold the degree of Bachelor of Law from the University of Saskatchewan, and did practice law for a number of years.

He left the practice to pursue a career, apparently quite successfully, as assistant to a Member of Parliament, which member in due course became a prominent cabinet minister. After the male plaintiff left this career, the plaintiffs began an importing business, including wholesale and retail operations. They are now semi-retired. [ 14 ] I raise the matter of their experience because of the wording of the Statement of Claim. The claim appears to focus on alleged misrepresentation by the defendant to the plaintiff. The word “representations” is used in paragraph 9, and “misrepresentations” is used in paragraph 15.

From the general wording of the claim, it is clear that the complained of misrepresentation pertains to the meaning of the legislation with specific reference to “capitol (sic) cost”. The problem faced by the plaintiffs is that ss. 344(1) of The Municipalities Act sets a one year limitation period in claims for recovery of damages. Successful claims for misrepresentation are addressed through the awarding judgment for damages. This will be dealt with further in this judgment. [ 15 ] Given the foregoing, the plaintiffs have tried to refocus their claim as being based upon the law of mistake.

The word “mistake” is not used in the Statement of Claim, though one could infer an allegation of mistake given the plaintiffs’ alleged reliance on representations to the effect that the fees were required. Funds paid by mistake may be recovered by way of restitution and not damages and hence fall outside the ambit of ss. 344(1) . [ 16 ] The plaintiffs also ask that I find that the bylaws authorizing the special taxes (totalling $635.00, per lot) are invalid. This is in effect a request that I quash the bylaws.

There is no mention of the bylaws in the Statement of Claim, and while there was some questioning of the way in which the bylaws were passed, the request to quash them only came up in argument. Further, the bylaws authorizing the special taxes have only the slightest marginal relevance to the issue of recovery of the monies paid by the plaintiffs.

[ 17 ] In argument, the plaintiffs have asked that I find that a particular document (the November lagoon statement being the last document under Tab 38 of Exhibit C-1) is a complete fabrication intended to mislead and defraud the Court, among others. The male plaintiff says that this document was the doing of the administrator and asks that I find that she acted fraudulently and otherwise dishonestly. The submissions made by the male plaintiff are extremely inflammatory and do not, other than as above, bear repeating.

The document in issue contains errors, but the evidence does not demonstrate that these were anything more than errors. Despite the male plaintiff’s exhortations otherwise, I am not satisfied that there was any intentional irregularity on the part of the defendant or its administrator. In any event, nothing in this judgment turns on that document. ISSUES 1. Should or can this Court quash the bylaws authorizing the special taxes? 2.

Does this Court have jurisdiction to deal with the plaintiffs’ claim for recovery of the off-site service fees called for in the servicing agreement, or is the matter of the fees and the servicing agreement within the sole jurisdiction of the Saskatchewan Municipal Board? 3. To what extent are the plaintiffs’ claims barred by ss. 344(1) of The Municipalities Act ? 4. If this Court has jurisdiction and if the claim is not statute barred, are the plaintiffs entitled to judgment for the sums claimed? THE LAW AND ITS APPLICATION TO THIS MATTER 1.

Should or can this Court quash the bylaws authorizing the special taxes? [ 18 ]

Section 358 of The Municipalities Act , S.S. 2005, c. M-36.1 provides: 358(1) Subject to subsections (2) and (3), any voter of a municipality may apply to the court to quash a bylaw or resolution in whole or in part on the basis that: (

a) the bylaw or resolution is illegal due to any lack of substance or form; (

b) the proceedings before the passing of the bylaw or resolution do not comply with this or any other Act ; or (

c) the manner of passing the bylaw or resolution does not comply with this or any other enactment.

(2) An application pursuant to this

section must be made to the court within 60 days after the bylaw or resolution is passed.

(3) No application may be made pursuant to this

section to quash a bylaw described in

section 167.

(4) A judge of the court may require an applicant to provide security for costs in an amount and manner established by the judge.

(5) A judge of the court may quash the bylaw or resolution in whole or in part and may award costs for or against the municipality and determine the scale of costs.

(6) If no application is made pursuant to subsection (1), the bylaw or resolution is binding, notwithstanding any lack of substance or form in the bylaw or resolution, in the proceedings before its passing or in the time or manner of its passing. [ 19 ] The present request falls within ss. 358(1)(

b) and (c). The same Act defines “court” in ss. 2(1)(

k) as: “court”, other than in sections 48 and 108, subsection 163(6) and sections 167, 178 and 202, means the Court of Queen’s Bench. Given that s. 258 is not one of the sections mentioned in this definition, it follows that “court” where it occurs in ss. 258(1) means the Court of Queen’s Bench. Accordingly, this Court does not have jurisdiction in respect of an application under s. 258.

[20] Courts also have the power to quash bylaws through judicial review by way of certiorari. (Morton v. Loon Lake (RuralMunicipality No. 561), 2011 SKQB 264). However, the power to grant certiorari lies with the Court of Queen’s Bench and not thisCourt. [21] I therefore hold that this Court has no power to quash the bylaws in question. [22] There are two further reasons, both sufficient unto themselves, why the plaintiffs will not have the requested order. First ofall, the claim did not give the defendant notice of this request and so I would not grant it.

Secondly, the time limit mandated in ss. 258(1)has not been met. 2.

Does this Court have jurisdiction to deal with the plaintiffs’ claim for recovery of the off-site service fees called for in theservicing agreement, or is the matter of the fees and the servicing agreement within the sole jurisdiction of the SaskatchewanMunicipal Board? [23] The defendant argues that the jurisdiction to resolve the claims made by the plaintiffs falls exclusively to the SaskatchewanMunicipal Board, and cites in support of this proposition cases pertaining to assessment and taxation pursuant to The Municipalities Actand its predecessors.

While I will be turning to those cases subsequently in this judgment, they essentially hold that Parts X and XI ofthe present Municipalities Act, and the similar provisions of predecessor legislation, “...represent a complete statutory code governing theassessment and taxation of property, including the effect of appeals of assessment and the imposition and payment of taxes resulting fromunsuccessful appeals” (Hensrud v. Regina (City) (1994), (SK KB), 119 Sask. R. 97 (QB) at paragraph 31, per BarclayJ.).

Disputes pertaining to matters addressed within the code must be resolved through the processes set out in the code, and not by resortto courts of original jurisdiction. Therefore, except for the appeal to the Saskatchewan Court of Appeal provided for in The MunicipalBoard Act, there is no judicial involvement in matters of assessment and taxation of property. [24] The present issue comes down to a question of whether

Part VIII of The Planning and Development Act, 2007, S.S. 2007, c.P-13.2, as it was during 2011, combined with The Municipal Board Act, constitutes a complete statutory code governing servicing feessuch that any dispute relevant to such fees must be resolved within the processes set out in that code. I note that The Planning andDevelopment Act, 2007 and particularly

Part VIII, was amended effective May 15, 2012. The fact of this amendment may have escapedthe notice of the litigants, so that, at least at times, reference was made to the present wording rather than the wording of that Part duringthe relevant time period being the year 2011. In this judgment I will be referring to the legislation as it then was, unless stated otherwise. [25]

Part VIII is entitled “Development Levies and Servicing Fees”. Obviously it deals with both development levies andservicing fees. Both devices are used to finance, in part, capital costs for infrastructure projects that are associated with either existinglots (development levies), or lots being created through subdivision (servicing fees). Capital costs are defined in

section 168, as: In this Part, “capital cost” means the municipality’s estimated cost of providing construction, planning, engineering and legal servicesthat are directly related to the matters for which development levies and servicing agreement fees are established pursuant to sections169 and 172, as the case may be. [26] The 2012 amendment added the words “but does not include any cost of maintaining roadways, other related infrastructureand public facilities” to the end of the section. In my view, this was done only for clarification purposes and did not change the originalmeaning. [27] Sections 169 to 171, inclusive, deal with the imposition of development levies.

Section 172 deals with servicing fees. Subsection 1 provides: If there is a proposed subdivision of land, the municipality in which the subdivision is located may require a subdivision applicant toenter into a servicing agreement to provide services and facilities that directly or indirectly serve the subdivision.

[ 28 ] In the present matter, the defendant municipality did require the plaintiffs to enter into a servicing agreement as per this subsection. [ 29 ] Subsection 2 sets out that the applicant cannot get approval of the subdivision unless a required servicing agreement is entered into. Subsection 3 sets out what may be contained within the agreement. Subsection 4 precludes the use of servicing agreements in certain situations. Subsection 5 requires the subdivision applicant to enter into the servicing agreement within 90 days and subsection 6 provides that this period can be extended by mutual agreement. [ 30 ]

Section 173 deals with the provisions that may be contained within development levy agreements and servicing agreements.

Section 174 requires that these levies and fees be held in accounts separate and apart from the municipality’s other funds, and that the funds be used to pay for the capital costs or debts associated with the capital costs or returned to the property owners.

Section 175 sets out that the municipality may register the agreement against the title of the subject land. [ 31 ]

Section 176 reads: 176(1) Subject to subsections (3) to (5), within 30 days after the date of the council’s written request for payment of development levies or servicing agreement fees, an applicant or an owner of land may appeal to the Saskatchewan Municipal Board: (

a) the application of the development levies and servicing agreement fees; or (

b) the factors considered in the calculation of development levies and servicing agreement fees.

(2) Subject to subsections (3) to (5), if a council requires an applicant or an owner of land to enter into a development levy agreement or servicing agreement and the parties are unable to enter into the agreement within 90 days after receipt by the council of the application for a development permit or subdivision, verified complete by the development officer, the applicant or owner may appeal to the Saskatchewan Municipal Board to determine: (

a) whether or not an agreement is necessary; and (

b) the terms and conditions of the agreement.

(3) The council and the applicant or the owner of the land may agree to extend the periods for making appeals pursuant to this section.

(4) Notwithstanding subsection (1) or (2), if the council has been declared an approving authority pursuant to subsection 13(1), any appeal by the applicant or the owner of land pursuant to subsection (1) or (2) must be made, in the first instance, to the Development Appeals Board.

(5) A decision of the Development Appeals Board pursuant to subsection (4) may be appealed to the Saskatchewan Municipal Board in accordance with

section 226. [ 32 ] The plaintiffs argue that the provisions of s. 176 do not apply to an existing contract and that the appeals provided for in that

section can only be taken prior to entering into the servicing agreement. They argue that the wording used applies prospectively and not retrospectively. In making this argument the plaintiffs reference the PDA as it existed after the 2012 amendments.

My analysis will focus on the PDA as it existed in 2011, though some reference will be made to the Act in its post amendment form. [ 33 ] Subsection 2 (which became subsection 4 as a result of the 2012 amendments) deals with the period prior to execution of an agreement, and gives the applicant for subdivision the power to appeal the question of whether a servicing agreement is required at all to the Saskatchewan Municipal Board, and if required, what the terms and conditions of the agreement should be.

This appeal may be taken anytime following 90 days after council’s receipt of the owner’s application for subdivision. In other words, the applicant for subdivision, unhappy with the position taken by the municipality can appeal to the Board and argue that applicability of fees to the situation and if applicable, what the quantity of the fees should be. It clearly operates in circumstances where no agreement has been reached, and is therefore clearly prospective in its operation.

In my view, the remedy provided in this subsection is no longer available once an agreement is entered into. [ 34 ] Subsection 1 provides for an appeal “...within 30 days after the date of the council’s written request for payment of

development levies or servicing agreement fees...”. While the precise meaning of this provision is not immediately obvious, it is my view that it contemplates a situation where a servicing agreement has already been entered into. If it only operates before the agreement is entered into, this provision would be redundant because ss. 2 already provides for much the same appeal. Further, s. 173 clearly contemplates payment of fees over time on an installment or progress payment basis. The triggering event for the running of the 30 day period is the written request for payment.

This could occur years after the servicing agreement is entered into. Further, in my view the right of appeal exists even if the payment has been made, provided not more than 30 days have passed since the request. In this respect ss. 1 operates retrospectively. [ 35 ] In my view, the 2012 amendments do not change any of the foregoing. The appeal provisions dealt with in ss. of the 2011 PDA , are found in ss. 1 and 2 of the 2012 PDA . Subsection 1 provides for requesting payment of “...a fee provided in a servicing agreement entered into pursuant to

section 172...”. Again in my view, this contemplates a situation where an agreement already exists. [ 36 ] The plaintiffs’ argument is that the ordinary law of contract takes over once the agreement is entered into. I have already indicated that I do not accept the position that the appeals only apply prior to entering into the agreement. However, even if that is not the case, I do not think that the ordinary law of contract would take over. Servicing agreements are agreements mandated by statute. They do not necessarily constitute contracts.

For instance, there is no requirement for mutual consideration. [ 37 ] The Municipal Board Act , S.S. 1988-89, c. M-23.2 establishes the Saskatchewan Municipal Board and sets out its jurisdiction, powers and duties.

Section 17 gives jurisdiction to the Board to hear appeals under the PDA .

Section 20 provides that the Board hear and determine any question of fact or law as to matters within its jurisdiction. Further, that

section gives the Board broad powers to obtain expert or technical support, authorize its designated persons to enter onto property to inspect, to not be bound by the technical rules of evidence and accept evidence in whatever form it considers appropriate. [ 38 ]

Section 40 deals with the finality of the Board’s decisions. Subsection (1) provides: Except where otherwise specifically provided: (

a) every decision or order of the board is final; and (

b) no order, decision or proceeding of the board shall be questioned or reviewed, restrained or removed by prohibition, injunction, certiorari or any other process or proceeding in any court. [ 39 ] Obviously the legislature has deemed it appropriate to give great deference to the decisions of the Board, which deference greatly exceeds the deference given to the decisions of this Court. The ensuing subsections give the Board power to review and revise its own decisions. [ 40 ]

Section 53 provides for registration of an order of the Board in the Court of Queen’s Bench and enforcement of the order through the powers of that Court. [ 41 ]

Section 33 provides for referral of questions of law or jurisdiction by the Board to the Court of Appeal, by way of stated case.

Section 33.1 gives any person affected by an order of the Board the power to appeal an order on a question of law or jurisdiction, with leave of the Court of Appeal. [ 42 ] In comparison, Parts X and XI of The Municipalities Act , S.S. 2005, c. M-36.1, dealing with assessment and taxation of land, provide an unhappy taxpayer or municipality with an initial appeal to the Board of Revision. The taxpayer has 30 days from the mailing of the assessment notice to file the appeal (s. 223 to s. 242). The decision of the Board of Revision is subject to further appeal to the Saskatchewan Municipal Board (s. 243 to s. 256).

The Municipal Board Act provides that the Board can hear the appeal, and the Board has the same powers in determining the appeal that it has in respect of appeals under the PDA . [ 43 ] As mentioned above, the provisions of Parts X and XI of The Municipalities Act , have been held to be a complete statutory code, such that courts of original jurisdiction have no jurisdiction in the matters dealt with in those Parts. The case law in support of this

proposition is as follows: Hensrud v. Regina (City) (1994), (SK KB), 119 Sask. R. 97 (QB), affirmed at (1994), (SK CA),125 Sask. R. 209 (CA) Fresh Pack Potatoes v. Saskatoon (1997), (SK KB), 155 Sask. R. 22 (QB) Pacific Regeneration v. Buckland (2000), 2000 SKQB 415 , 198 Sask. R. 268 (QB) Stewart v. Flett's Springs (2009), 2009 SKPC 20 , 329 Sask.

R. 115 (PC), affirmed at 2009 SKQB 240 [44] In Hensrud, Barclay J. held that this legislation represented a complete code, and hence equitable concepts like estoppel hadno application. [45] In Fresh Pack Potatoes the plaintiff alleged that the City was negligent in assessing the plaintiff’s property. Madame JusticeBlacklock Linn held that given the provisions of the applicable municipal legislation (almost identical to the present Municipalities Act)and The Municipal Board Act the court had no jurisdiction to hear and determine the issues raised in the plaintiff’s claim.

In respect ofthe legislative scheme, she wrote at paragraph 13: Similarly in this case, there is a significant process to deal with the plaintiff's complaints, and that process has the same hallmarks ofspeed, informality, expertise and reduced cost, as well as the important aspect of certainty and finality to the municipalities. I disagreewith the plaintiff that this is a case where the court should use its supervisory jurisdiction. I also disagree that the plaintiff's Statement ofClaim raises jurisdictional questions.

Where, as here, the sole issue is whether the plaintiff's property has been valued too high andtherefore whether too much tax was paid, then the plaintiff is limited to the appeal process that has been established by legislation.Whether the assessments are right or wrong, the court cannot review the city assessor's decision. [46] The learned justice noted the significance of the assessment roll which is used as a significant part of the budget calculation. [47] The scheme of the PDA and The Municipal Board Act has the same hallmarks of speed, informality, expertise and reducedcost.

It also has the aspect of certainty and finality beneficial to the municipality. The characteristics are important to the municipality,and they are also important for developers. Developers need to know what their costs are going to be in order to determine whether theywill go ahead with a development. As well speed is often very important in the competitive world of land development. Thus thesecharacteristics serve both sides of the servicing agreement. There is no equivalent of an assessment roll in capital projects undertaken bymunicipalities.

Nonetheless, certainty of revenue around such projects is important to the budgeting process, because money that doesnot come to the municipality through fees of this kind must be made up through general taxation or other sources of revenue. [48] Pacific Regeneration is notable for its consideration of Schick v. Edenwold No. 158 (Rural Municipality) (1988), (SK KB), 67 Sask. R. 117 (Q.B.).

Schick held that a taxpayer may sue to recover taxes paid in prior years where the taxes wereimproperly assessed and imposed in excess of the taxing authority's jurisdiction, and that the taxpayer is not required to avail himself ofthe statutory appeal procedure. In Pacific Regeneration, Madam Justice Rothery held that amendments subsequent to Schick brought thequestion of jurisdiction to tax property within the scheme so that questions of jurisdiction must be dealt with exclusively through theappeal structure of the legislation. [49] In Stewart v.

Flett's Springs, Jackson J. dealt with a situation where the defendant municipality had mistakenly assessed theplaintiff for taxes on land that he did not own. The plaintiff paid these taxes over an extended period of time, before anyone realized theerror. He sued for recovery of these mistakenly paid taxes. Judge Jackson held that, even in this rather extreme situation, the Court wasbound by Fresh Pack Potatoes, and hence no judicial intervention was permissible. [50] The judgment of Madame Justice Jackson in Moldowan v.

SGEU (1995), (SK CA), 134 Sask.R. 210; 101W.A.C. 210 (S.K.C.A.)was referred to in Fresh Pack Potatoes, particularly in respect of the prospect of shared or concurrent jurisdictionbeing granted to a Board and yet remaining with the regular court system. Moldowan is a case where an employee brought action in theCourt of Queen’s Bench against the union to which she belonged, alleging negligence on the part of the union and failure to meet itsstatutory obligation by failing to represent her in her dispute with her employer. Clearly the Labour Relations Board had jurisdiction to

deal with matters of that kind. The question was whether the Court also had jurisdiction to deal with the claim and grant a remedy, if appropriate. In paragraph 29, having earlier noted that the plaintiff was out of time to obtain a remedy through the LRB, Madame Justice Jackson wrote: We cannot look only at the Board's remedial powers at the time the action was brought. We must look at the Board's powers from the beginning of the union's failure to appoint its representative. From then, the Board was empowered to order the union to act for Ms. Moldowan and to enforce the order if the union failed to comply.

We cannot say the Board had exclusive jurisdiction if the union member acted promptly, but shared jurisdiction with the courts if the union member did not do so. (Italics added.) [ 51 ] In the present matter, the Municipal Board initially had jurisdiction to deal with the plaintiffs’ claim, and the power to grant an effective remedy. The plaintiffs did not request that remedy within the time lines provided by the statute, and hence have no available remedy through the Board.

Clearly the holding in Moldowan is that we must examine the question of whether the Court has jurisdiction in the circumstances that existed when the cause of action arose, rather than at the time that the plaintiffs commenced their action. To put it another way, this Court can only now have jurisdiction to now deal with this matter if it also had jurisdiction to deal with the matter back in September and October of 2011.

The plaintiffs’ failure to appeal to the Board cannot have the result of conferring on this Court jurisdiction that did not previously exist. [ 52 ] Did this Court have concurrent jurisdiction with the Municipal Board back in September of 2011? For the following reasons I have concluded that it did not. The legislation clearly grants to the Board the power to deal with the plaintiffs’ claim, and affords the Board wide powers in addressing the claim (as for instance in s. 20 of its Act ). The framework is such that the claim will be addressed quickly.

It will not have to await its time for hearing among all of the other wide assortment of cases that are dealt with in this Court and in the Court of Queen’s Bench. Jurisdictional questions go directly to the Court of Appeal, rather than first going to the Court of Queen’s Bench, and then to the Court of Appeal. All of this will and does lead to early resolution. [ 53 ] Concurrent jurisdiction inevitably leads to the prospect of inconsistent findings or decisions.

In Moldowan , at paragraph 30 , Madame Justice Jackson wrote: The chambers judge made out a good case for how the courts and the Board could share jurisdiction, but there could be many incidents where the Board and the courts might come to different conclusions on the same facts, i.e., where the Board does not find a breach and the court does. This would call into question the whole process. [ 54 ] In matters of the present kind, it is entirely possible that the Board could come to a conclusion and perhaps years later, the Court could come to the opposite conclusion.

The needed certainty and finality spoken of by Blacklock J. in Saskatoon Fresh Pack Potatoes (paragraph 13 ) would be illusory. Moreover, the hallmarks of speed, informality, expertise and reduced cost, spoken of by Blacklock J. in the same paragraph, and by Jackson J.A. in Moldowan in paragraph 36 would not exist. [ 55 ] Finally, the statutory scheme of the PDA has much in common with The Municipalities Act . Each deals with a requirement by a municipality that a person owning land within the municipality pay money to the municipality that relates to that land.

It matters little whether the requirement to pay is labelled as a tax, a levy or a fee. Further, both Acts ultimately provide for largely the same appellate procedure. [ 56 ] I am satisfied that this Court did not have jurisdiction to deal with this matter in September of 2011 and does not now have such jurisdiction. I conclude that the PDA , combined with The Municipal Board Act constitute a code for resolution of all claims relating to service fees as set out in

Part VIII of the PDA . It follows that this Court does not have the jurisdiction to deal with the plaintiffs’ claim. 3. To what extent are the plaintiffs ’ claims barred by ss. 344(1) of The Municipalities Act ? [ 57 ] Bearing in mind that I may be in error in my conclusion that I am without jurisdiction to hear and determine the present matter, I will go on and address the further issues.

[ 58 ] The exact cause of action relied upon by the plaintiffs is not clear from the wording of the claim. The factual allegations contained in the claim could conceivably support an action for misrepresentation. As earlier noted, the word “representations” is used in paragraph 9, and the word “misrepresentations” is used in paragraph 15. The evidence is inadequate to support a claim for fraudulent misrepresentation. Innocent misrepresentation is dealt with through recision, which cannot be accommodated in the present matter, and is not requested.

Recision would mean that the entire subdivision would have to be undone, complete with a reversal of land titles registrations. That is not a viable remedy. That leaves the possibility of negligent misrepresentation.

The remedy for negligent misrepresentation is damages. [ 59 ] Subsection 344(1) of The Municipalities Act , provides: Notwithstanding The Limitations Act , no action is to be brought against a municipality for the recovery of damages after the expiration of one year from the time when the damages were sustained, and no such action is to be continued unless service of the statement of claim is made within that one-year period. [ 60 ] An action based upon negligent misrepresentation is an action for the recovery of damages and therefore is subject to this subsection. [ 61 ] All parties take the position that the discoverability principle applies to this subsection and I will be approaching the matter on that basis.

It is well accepted that this principle relates to facts that could not have been discovered with reasonable diligence. It does not relate to ignorance of the law or a mistake of law ( Hill v. Alberta (Registrar of Land Agents) , 1993 ABCA 75 ). Where the time period for a limitation appears to have expired, and a plaintiff relies upon the discoverability principle in support of a position that it has not expired, the plaintiff bears the onus of proving that the facts were not discoverable through the exercise of reasonable diligence ( Langenburg (Town) v.

Gamey , 2010 SKCA 11 ). [ 62 ] In the present matter, all of the relevant facts appear to have been known to the plaintiffs in September of 2011. The moneys were paid, not because of a lack of awareness of the facts, but because of a lack of knowledge of the law. The result is that the limitation period had expired for any action where the plaintiffs sought recovery of damages.

Hence, any claim based upon negligent misrepresentation is statute barred. [ 63 ] As an aside, it is my view that no claim based upon misrepresentation could have otherwise succeeded, because only misrepresentations of fact are generally actionable. The plaintiffs argued that the defendant misrepresented the fact that other people had paid these service fees. I am not satisfied that this was ever so represented to the plaintiffs, or if so represented, that this was false.

The misrepresentation here, if there is one, is that the defendant inferred that service fees of this kind could be lawfully charged to the plaintiffs. If that representation was made, it is a representation as to the law and it is not actionable. [ 64 ] The reality is that the present factual scenario does not fit well within the concepts of misrepresentation. It does however fit reasonably well within the law of mistake. The word “mistake” is not to be found in the plaintiffs’ claim. However, the facts alleged in the claim are demonstrative of a mistake.

Pleadings in Small Claims are much less formal than in other courts, and it is my view that a claim based upon mistake is properly before the Court. Both sides argued the law of mistake in their oral and written submissions. [ 65 ] Where the Court finds that a remedial mistake has been made by the parties, the Court is making a finding of unjust enrichment. It is remedied through restitution, rather than damages, and hence ss. 344(1) has no application to such a claim. The applicable limitation period is the common two year limitation and it had not expired before commencement of this action. 4.

If this Court has jurisdiction and if the claim is not statute barred, are the plaintiffs entitled to judgment for the sums claimed? [ 66 ] If the plaintiffs can succeed, it can only be on the basis of restitution arising through a mistake of law. Such an action is premised on the proposition that paragraphs 4.5 and 4.6 of the Servicing Agreement were illegal. In September of 2011, both parties accepted that the municipality could lawfully require payments of this kind from the plaintiffs, and entered into the servicing agreement accordingly.

The plaintiffs now say that the municipality could not lawfully require them to pay these fees. The defendant municipality

maintains that they could lawfully charge these fees. [67] For ease of reference, I repeat paragraphs 4.5 and 4.6: 4.5 To pay the Municipality off-site service fees totaling (sic) Five Hundred Dollars ($500.00) for each parcel in the “Plan” which theMunicipality shall use, at a time, to be determined by council, to make improvements to municipal infrastructure such as landfillimprovements which are required by the development of the lots shown on the “Plan”. 4.6 To pay the Municipality off-site service fees totaling (sic) Six Hundred and Thirty-five Dollars ($635.00) for each parcel in the“Plan” which is the amount equivalent to the amount collected from other properties in the area which was required for the sewagelagoon construction and will provide for ongoing maintenance of this facility. [68] The question is whether these fees as expressed in these paragraphs constitute “capital costs” as defined in s. 168 of the PDA.

Again for ease of reference, I set out that provision: In this Part, “capital cost” means the municipality’s estimated cost of providing construction, planning, engineering and legal servicesthat are directly related to the matters for which development levies and servicing agreement fees are established pursuant to sections169 and 172, as the case may be. [69] Paragraph 4.5 sets out a fee that is to be used at a time to be determined by council to make improvements to infrastructure. Obviously this is to take place sometime in the future.

The reference to landfill improvements is included by way of illustration orexample only. It is not the only form of infrastructure contemplated by the paragraph. In September of 2011, council had no immediateplans to make landfill improvements or other improvements to which these fees were to be applied. The definition of capital costrequires that there be an “estimated cost” of providing the services. Given that council had nothing specifically in mind, no cost couldhave been “estimated”.

Therefore, the fees charged pursuant to paragraph 4.5 were not in respect of a capital cost, and accordingly wereunlawful. [70] Paragraph 4.6 calls for fees of $635.00 per lot. The passage “...which is the amount equivalent to the amount collected fromother properties in the area which was required for the sewage lagoon construction...” explains how that sum was arrived at and includesa description of how the funds collected from others were used.

However the purpose and application of the specific fees required to bepaid by the plaintiffs was to “...provide for ongoing maintenance of this facility.” Here facility references the sewage lagoon. As amatter of common sense, capital cost and maintenance are very different and mutually exclusive concepts. However, the analysis mustbe performed according to the specific definition of capital cost in the Act. In the definition, capital cost is the “...cost of providingconstruction, planning, engineering and legal services...”.

Maintenance is not one of the listed costs, and therefore maintenance (asidealtogether from common sense) is not included within the definition of “capital cost”. It follows that the defendant could not lawfullycharge to the plaintiffs the fee described in paragraph 4.6. [71] This is perhaps an appropriate moment to recognize that the Saskatchewan Municipal Board has the power to, in effect,rewrite the agreement, and this Court does not.

Therefore, had this matter gone to the Board, and had the Board come to the sameconclusion that I have come to with respect to paragraph 4.6, the Board might have rewritten that paragraph to require the plaintiffs topay a fee for the sewage lagoon given that the lagoon, while fully constructed, had not been fully paid for. [72] I am satisfied that at the time the agreement was entered into and the fees were paid, neither party was aware that these feeswere unlawful. There is no need to point the finger of blame at either party. The fact is that reasonable arguments can be advancedagainst both of them.

The reality is that the fees were charged, collected and paid through a mutual mistake of law. [73] Traditionally in the law of mistake and restitution a distinction had been drawn between mistakes of fact and mistakes of law. Mistakes of law supposedly could not lead to restitution because everyone is deemed to know the law. That proposition was subject tomany exceptions and much criticism, academic and otherwise. For practical purposes the distinction was ended in Canada by theSupreme Court of Canada in Air Canada v. British Columbia, (SCC), [1989] 1 SCR 1161. Mr. Justice La Forest wroteat p. 1201:

In my view the distinction between mistake of fact and mistake of law should play no

part in the law of restitution.

Both species of mistake, if one can be distinguished from the other, should, in an appropriate case, be considered as factors which can make an enrichment at the plaintiff's expense "unjust", or "unjustified". [ 74 ] The Air Canada case also stands for the proposition that “...where an otherwise constitutional or intra vires statute or regulation is applied in error to a person to whom, on its true construction, it does not apply, the general principles of restitution for money paid under a mistake should be applied, and, subject to available defences and equitable considerations, the general rule should favour recovery” (headnote of SCR). [ 75 ] Municipalities are creatures of statute and have only the powers given to them by statute.

They do not have the general powers enjoyed by individuals or private corporations. Here entry into this agreement in these circumstances was beyond the power of this municipality. The fees were charged and paid through a misapplication of a valid law. There is no equitable or other principle that would bar recovery. [ 76 ] Accordingly, if I am in error in my finding that I am without jurisdiction, I would award judgment to the plaintiffs in the sum of $5,040.00, plus the cost of issuance of the claim and the costs of service, if any.

MISCELLANEOUS MATTERS [ 77 ] The plaintiffs allege that the defendant failed to set aside the money paid by the plaintiffs in a separate trust account, as required by the legislation. I am satisfied that the defendant did so set aside the funds paid by the plaintiffs, and that even had it not, this would not give rise to a cause of action on the plaintiffs’ part.

SUMMARY [ 78 ] I have concluded that this Court is without jurisdiction to hear and determine this matter, and therefore the action is dismissed. [ 79 ] If my conclusion as to jurisdiction is wrong, I would find for the plaintiffs as above set out. Dated this 30 th day of October, 2013. _______________________________ D.J. Kaiser, J