) ) CITY OF TORONTO Appellant – v. –, 2023 ONSC 898

CITATION : City of Toronto v. Ocean Club Residences Inc., 2023 ONSC 898 DIVISIONAL COURT FILE NO.: 318/20 Local Planning Appeal Tribunal File No .: DC150005 DATE: 20230208 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Sachs, Lederer, Lococo, JJ IN THE MATTER OF an appeal under Section 37(1) of the Local Planning Appeal Tribunal Act , 2017, SO 2017, c 23 , as amended, from the Decision of the Local Planning Appeal Tribunal dated August 7, 2020, leave to appeal granted by D.L. Corbett J on April 8, 2022. AND IN THE MATTER OF appeals by Ocean Club Residences Inc., Phantom Developments Inc., B-Major Homes (Ontario) Inc., Empire Communities

(2183) Lakeshore Blvd Ltd., Kingbird Developments Inc., and Monarch Waterview Development Limited under subsection 22(2) of the Development Charges Act , 1997, S.O. 1997, c.27 , as amended BETWEEN: ) ) CITY OF TORONTO Appellant – and – OCEAN CLUB RESIDENCES INC., PHANTOM DEVELOPMENTS INC., B-MAJOR HOMES (ONTARIO) INC., EMPIRE COMMUNITIES

(2183) LAKESHORE BLVD LTD., KINGBIRD DEVELOPMENTS INC., and MONARCH WATERVIEW DEVELOPMENT LIMITED Respondents ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Robert A. Robinson and Timothy Carre , for the Appellant Patrick Bakos , for the Respondents ) HEARD in Toronto by video conference: January 17, 2023 Lederer J. Introduction [ 1 ] This is an appeal from the Local Planning Appeal Tribunal. The decision being appealed is dated August 7, 2020.

Since then, the Local Planning Appeal Tribunal has been incorporated, with other agencies into a new tribunal, the Ontario Land Tribunal. [1] The decision determined, among other things, that a group of developers (the respondents to this appeal) should have been granted credits against the development charges they would otherwise have been required to pay in support of developments they were each seeking to construct within the same general area of the City of Toronto. The City is appealing that decision.

Development Charges [ 2 ] Generally, development charges are the means by which municipalities in Ontario obtain the funds to pay for services (for example: sewer, water and roads [2] ) necessary to incorporate any proposed development into the overall servicing structure the municipality provides. Local services, those that connect the development to that overall servicing structure, are provided by the developer of the property involved. The value of the development charge is not separately assessed as representing the actual cost of the infrastructure required to service each individual development proposal.

Rather, the charge is applied through the passage of a by-law which includes, among other things: • the rules for determining if a development charge is payable and for determining the amount of the charge, and

• the area of the municipality to which the by-law applies. [3] [ 3 ] In preparation for the passage of a development charge by-law, the council of the municipality is required to complete a background study.

The background study includes, among other things: • estimates of the anticipated amount, type and location of development, in the municipality, and • an examination, for each service to which the by-law would relate, of the long-term capital and operating costs for the capital infrastructure required for the service. [4] [ 4 ] The substance of a development charge by-law is founded on the work and results of the background study.

The by-law is to be passed within one year following the completion of the study. [5] [ 5 ] The decision being appealed is with respect to a complaint against the development charge imposed under the authority of Development Charges By-Law No. 1347-2013. [6] Subject to any specific agreement to the contrary, entered into between the council and the person required to pay the development charge, the by-law required any development charge to be paid as of the date a building permit was issued. [7] Counsel for the City advised the court, and the by-law confirms, that the calculation of any specific charge reflects services identified in the background study.

They can be specific (for example: the “Spadina Subway extension”) but for the most part are generalized (for example: “Transit (balance)”, “Parks and Recreation”, “Police”, “Fire”, “Roads and Related”, “Water”, “Sanitary Sewer” and “Storm Water Management”). [8] The amount of the charge depends on the type of development: for residential development the charge is calculated per unit to be constructed, the base value depending on the type of unit (“Singles and Semis”, “Multiples 2+ Bedrooms”, “Multiples 1 Bedroom and Bach.”, “Apartments 2 Bedrooms and Larger”, “Apartments 1 Bedroom and Bach.” and “Dwelling Room”) and for non-residential according to the amount of gross floor area. [9] The rates associated with each of the types of residential units and for non-residential development increased over time . [10] Thus, as noted above, and as submitted by counsel for the City, the assessment of the charge does not address the specific service requirements of the particular development but is the result of a mathematical calculation multiplying, in the case of a residential development, the number of each of the various unit types and, in the case of non-residential development, the number of square metres by value of the development charge associated with each of them.

Background [ 6 ] The respondents to this appeal are the owners of various lands proposed for development in a “precinct” now known as Humber Bay Shores. For those familiar with the evolution of development in the City of Toronto, this is an area formerly known as the “motel strip”. It was, as that name suggests, the home of a group of well-worn, if not dilapidated motels. In relatively recent times, it has been subject to significant redevelopment, as noted by the City, approximately 5,000 new residential units, principally in condominium towers.

The developments being brought forward by the respondents are a continuation of this change. [ 7 ] Zoning By-laws play a foundational role in the use and development of land in Ontario, in this case, in the City of Toronto. Zoning by-laws implement the Official Plan which sets out the general policies applicable to land use in the municipality to which it applies. Zoning by-laws implement those policies.

They dictate how land may be used, the types and dimensions of buildings that can be constructed, the uses to which they can be put and where they can be located. [11] Where the Official Plan allows for it, the municipality may pass a zoning by-law which, by the placing the symbol “H” as applicable to the land affected, may delay the development of the land for whatever land use is to be put there. [12] The City of Toronto Official Plan recognizes holding provisions as a tool that helps the municipalities create the necessary community infrastructure.

There are instances where the intended use and zoning is known but development cannot take place until specific facilities are in place. The zoning by-law that imposes the holding provision (“places an “H” symbol over the zoning”) spells out the conditions that must be met before the “H” symbol is removed and the lands opened to be developed. [13] [ 8 ] The land that the respondents seek to develop was subject to a zoning by-law which imposed an (

H) Holding Symbol. It had the effect of halting development. The respondents’ traffic experts submitted reports which identified and recommended various infrastructure improvements that were required to support the development that was being proposed. As a condition of enacting a by-law to remove the (

H) Holding symbol, the City required the respondents to enter into a Core Infrastructure Agreement which dealt with the provision of specified improvements that would support the proposed development. The Core Infrastructure Agreement was entered into on February 18, 2014. It required the respondents to undertake the work to provide certain identified road and sewer works valued at $502,333 and for a cash contribution in the amount of $1,530,000 to be used by the City to fund other specified road and sewer works.

Counsel for the City advised the court that, on the one hand, the respondents have completed the work they undertook to perform (the work valued at $502,333) and, on the other hand, the respondents had made the required cash contribution (the $1,530,000) and the City had completed the work it was to pay for. This was all in furtherance of satisfying the conditions necessary to have the (

H) Holding symbol removed such that the development could proceed.

Section 28.4 of the Core Infrastructure Agreement begins: The City acknowledges that nothing in this Agreement prohibits an Owner or Owners from applying to the City for applicable development charge credits… [ 9 ] Prior to entering the Core Infrastructure Agreement, the respondents delivered a report prepared by the Altus Group titled: “Humber Bay Shores DC Credit Eligibility Analysis”. [14] It outlines the basis on which development charge credits were proposed, not claimed.

By way of example, with respect to roads: Based on the local service guidelines in the City’s 2008 Background Study [which is not the study the applicable development charge by-law is based on] the road improvements to Park Lawn and Lake Shore would be eligible for DC credits.

This means the works will either be funded entirely by the developers (with full rebate on their DC’s owing for the transportation component), or any costs over and above the amount of DC’s owed would be eligible for DC credits to be paid for by other future developments and their DC credits to be paid for by other future developments and their DC revenues. Therefore, while a project may be considered DC eligible, it does not necessarily mean it will impose a cost on the municipality. [15] [ 10 ] And, with respect to sanitary sewer works:

As the City was unaware of the need for this project prior to the work done by Schaeffers [an engineering firm], the Unallocated Improvement guidelines on page 130 of the 2008 DC Study [which, I repeat, is not the study the applicable development charge by-law is based on] would appear to govern the proposed sanitary sewer work.

As the existing pipes are not operating at full capacity, the rehabilitation work proposed to be done would provide additional capacity to accommodate the proposed developments, which would qualify it as a DC creditable item. [16] [ 11 ] Nothing was said in the facta filed or the submissions made by counsel, about the substance of this report other than to identify the author who subsequently was a witness at the hearing of the Local Planning Appeal Tribunal and whose evidence was accepted by it.

It is difficult to see how this report could have provided anything specific as to the issue of development charge credits as raised before the Tribunal. The report is dated December 11, 2012 which is to say not only before the Core Infrastructure Agreement was entered into but also before the applicable development charge by-law had been passed. Accordingly, it is not surprising that the City had made no decision as to the availability of any development charge credits at the time the Core Infrastructure Agreement was entered into.

Nonetheless, as will become apparent later in these reasons, the Local Planning Appeal Tribunal, in its decision, relies on this report. It blames the problems that it believes ensued on the failure of the City to respond to this “request for DC Credits” [17] for two years, until December 23, 2014. [ 12 ] On March 7, 2014 the respondent, Ocean Club Residences Inc., paid, to the City, as development charges $6,428,804.16 in connection with the issuance of building permits for its development. Some months later, on July 31, 2014 the respondent, Phantom Developments Inc., did the same.

It paid $4,713,357.00, as development charges related to the issuance of the building permits it required. [18] [ 13 ] The decision of the Local Planning Appeal Tribunal allowed the claim for credit that was made, that is the value of the work performed by the respondents pursuant to Core Infrastructure Agreement being $502,333 and the cash contribution made to pay for work undertaken by the municipality being $1,530,000 for a total of $2,032.333.

Presumably, this was to be set off against the payment of development charges noted above as having been made by the respondents, Ocean Club Residences Inc. and Phantom Developments. There is no demonstration of any amount that any of the other respondents [19] have made as payments on account of development charges and no explanation as to how the credits are to be distributed between them. I take this from the last paragraph of the decision of the Local Planning Appeal Tribunal.

It states: The Tribunal Orders that the Appeals of the Appellants’ Complaints relating to the availability of Development Charge Credits are allowed and the total amount of $2,032,333, as claimed by the Appellants, is to be credited against the Development Charges paid by the Appellants to the City, refunded to the Appellants in accordance with s. 25(1) of the Development Charges Act, 2017 , together with interest payable in accordance with s. 25(2), and apportioned as between the Appellants, by them, in accordance with their mutual agreement. [20] The Legislative Treatment of Credits and the Process [ 14 ] The provision of credits in lieu of the payment of development charges arises through ss. 38(1) and (2) of the Development Charges Act which state:

(1) If a municipality agrees to allow a person to perform work that relates to a service to which a development charge by-law relates, the municipality shall give the person a credit towards the development charge in accordance with the agreement.

(2) The amount of the credit is the reasonable cost of doing the work as agreed by the municipality and the person who is to be given the credit. [ 15 ] On its face, what this demonstrates is that presumptively development charges represent an obligation to pay the cost of services to which a development charges by-law relates but that, with the agreement of the municipality, a developer may undertake some part of the work and receive a credit for the value of that work as against the development charges that would, in the normal course, be payable. [ 16 ] As perceived by the respondents, the report dated December 11, 2012 and “delivered on or about December 14, 2012” [21] stands as their request for development charge credits. [22] As already noted, given the timing, it is not surprising that the City did not immediately respond. [ 17 ] When there are concerns regarding the processing of development charges, the Development Charges Act provides a means by which an owner or developer can complain.

The means for, and substance of, such complaints are presented by s. 20(1) which provides: 20

(1) A person required to pay a development charge, or the person’s agent, may complain to the council of the municipality imposing the development charge that, (

a) the amount of the development charge was incorrectly determined; (

b) whether a credit is available to be used against the development charge, or the amount of the credit or the service with respect to which the credit was given, was incorrectly determined ; or (

c) there was an error in the application of the development charge by-law. [Emphasis added] [ 18 ] The City received three letters of complaint under this section: • on May 28, 2014 from Ocean Club Residences Inc., [23]

• on July 31, 2014 from Phantom Developments Inc. [24] and • on May 11, 2015 from Humber Bay Shores Landowners Group (representing Monarch Waterview Development Limited, B-Major Homes (Ontario) Inc., Kingbird Developments Inc. and Empire Communities (2183 Lakeshore Blvd. Ltd.). [25] [ 19 ] Each of the letters describes the concern for the increase in development charges said to have been occasioned by the delay of the City in finalizing and executing the Core Infrastructure Agreement, in turn causing a delay in the lifting of the (

H) Holding symbol until after February 1, 2014 [26] (the day the development charges increased). The respondents objected to having to pay the increased development charges which they see as having been brought about by the delay of the City. This is an issue which the Local Planning Appeal Tribunal found it had no jurisdiction to deal with and which the court refused to grant leave to appeal (see: fn. 18 herein).

However, in each case the letter also raised a concern as to the availability and the amount of any development charge credits: The credits available to be used against DCs, and the amount of the credits or services with respect to which credits were given, were incorrectly determined. [27] [ 20 ] The City staff had taken the position that none of the works involved were eligible for development charge credits. This was confirmed by letter dated December 23, 2014 from the office of the City Solicitor. It dealt with the complaint letters of Ocean Club Residences Inc. and Phantom Developments Inc.

As has already been noted, the third letter of complaint, the one from Humber Shores Landowners Group was not delivered until May 11, 2015.

The letter from the City Solicitor addressed “the development charge for proposed City works within the Humber Bay Shores area.” [28] The letter reviewed the works in question, both roads and sewers, and found them to be local in nature and, on that basis not susceptible to a development charge or credit. [ 21 ] Section 22(2) of the Development Charges Act provides: A complainant may also appeal to the Ontario Land Tribunal if the council of the municipality does not deal with the complaint within 60 days after the complaint is made by filing with the clerk of the municipality a notice of appeal. [ 22 ] Relying on this section, Ocean Club Residences Inc. and Phantom Developments Inc. launched appeals which, at the time, were to the Ontario Municipal Board which was subsequently replaced by the Local Planning Appeal Tribunal.

By letter to the office of the City Clerk dated June 15, 2016 the four members of the Humber Shores Landowners Group (Monarch Waterview Development Limited, B-Major Homes (Ontario) Inc., Kingbird developments Inc. and Empire Communities (2183 Lakeshore Blvd.) Ltd.) launched a third appeal. [29] The three complaints were consolidated and heard together by the Local Planning Appeal Tribunal [30] over seven days. [31] [ 23 ] In coming to a decision with respect to the appeal of the complaints, the Local Planning Appeal Tribunal had, and the Ontario Land Tribunal now has, the power to do whatever could have been done by the City. [32] The City’s authority (and therefore that of the Tribunal) is outlined in s. 20(6) of the Development Charges Act : After hearing the evidence and submissions of the complainant, the council may dismiss the complaint or rectify any incorrect determination or error that was the subject of the complaint. [ 24 ] It was pursuant to this authority that the Local Planning Appeal Tribunal found that a development charge credit, in the amount of $2,032,333, should have been recognized and, pursuant to s. 25(1) of the Development Charges Act ordered that amount be refunded. [33] It is that finding that is the subject of this appeal.

Leave to Appeal [ 25 ] This appeal was brought under s. 37 of the Local Planning Appeal Tribunal Act, 2017 [34] : Subject to any general or special Act, an appeal lies from the Tribunal to the Divisional Court, with leave of the Divisional Court, on a question of law, except in respect of matters arising under

Part IV. [Emphasis added] [ 26 ] Leave to appeal was granted by order of this court made on April 8, 2022. [35] The decision granted leave on three questions of law, as follows: 1. Did the LPAT err by determining that its jurisdiction on appeal under the complaints procedure established by subsection 20(1) of the DC Act includes the jurisdiction to review the refusal or failure by a municipality to grant a credit pursuant to subsection 38(1) of the DC Act? 2.

Did the LPAT err by determining that, if it has jurisdiction to determine entitlement under subsection 38(1) of the DC Act it can award a development charge credit in respect of work that was not performed by the respondents but in respect of which they made a financial contribution? 3.

Did the LPAT err by failing to dismiss the Not Timely Complaint on the basis that it did not meet the statutory requirements for commencing a complaint under subsections 20(1) and (2) of the DC Act? [36] Standard of Review [ 27 ] The respondent owners and developers, in the Factum filed on their behalf, were at some pains to argue that the standard of review was reasonableness. It isn’t. This is made clear in the, by now seminal, case of Canada (Minister of Citizenship and Immigration) v.

Vavilov [37] : It should therefore be recognized that, where the legislature has provided for an appeal from an administrative decision to a court, a court

hearing such an appeal is to apply appellate standards of review to the decision. This means that the applicable standard is to be determined with reference to the nature of the question and to this Court’s jurisprudence on appellate standards of review. Where, for example, a court is hearing an appeal from an administrative decision, it would, in considering questions of law, including questions of statutory

interpretation and those concerning the scope of a decision maker’s authority, apply the standard of correctness in accordance with Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235, at para. 8 .

Where the scope of the statutory appeal includes questions of fact, the appellate standard of review for those questions is palpable and overriding error (as it is for questions of mixed fact and law where the legal principle is not readily extricable ): see Housen , at paras. 10, 19 and 26-37 . [38] [Emphasis added] [ 28 ] The “Decision on the Motion for Leave to Appeal” [39] notes that the three questions for which leave to appeal was granted are “questions of law”. To the extent that it was proposed that these are issues of mixed fact and law, I note that there are no material facts in dispute.

The issues raised which reflect on the proper understanding on the development charges regime are “readily extricable”. [ 29 ] The standard of review is correctness. Analysis [ 30 ] I begin this analysis with an observation as to the approach taken by the parties and the Local Planning Appeal Tribunal. The parties, the City on the one hand and the developers on the other, interpret the legislation as entirely supportive of the results which most benefits each of them.

The City proposes that it retains an absolute and complete discretion as to whether or not a development charge credit should be granted in any given circumstance. In this case it has determined, as is its right not to allow any credit. The developers express the view that the work they have done and the money they have paid to fund works being undertaken by the City was not local and should all (both the value of work they performed and the money they paid) be allowed as a credit to whatever development charges they would otherwise be required to pay.

The Local Planning Appeal Tribunal, for its part, finds that there is a problem with the way the City has dealt with this request for credits. As understood by the Local Planning Appeal Tribunal, the City delayed for two years in responding to the request for development charge credits.

To fail now to allow those credits for cash contributions made by the developers would, as seen by the Local Planning Appeal Tribunal, be contrary to the intent and purpose of the Development Charges Act . [40] It “essentially agrees with the arguments advanced by the [developers]” [41] and characterizes the actions of the City as unreasonable. The City’s approach is referred to as self-serving. It is said to have ignored the legislation and the evidence. [42] The problem is that none of these perspectives lead to a proper and comprehensive understanding of the legislative regime.

Question 1: Did the Local Planning Appeal Tribunal have the jurisdiction to review the refusal or failure by a municipality to grant a credit pursuant to subsection 38(1) of the DC Act? [ 31 ] I start with the City, and the first of the three questions. The City submits that its discretion is absolute to the point that the Local Planning Appeal Tribunal is without jurisdiction to review its refusal to grant the credits requested by the developers. Section 20(1)(

b) of the Development Charges Act allows for a complaint as to whether a credit is “available”. As perceived by the City, it is not the “availability” of a credit that is being raised by this complaint, rather it is the “eligibility” of the developers to receive a credit. “Eligibility”, the City says is not properly the subject of a complaint and is left to the City to determine in its singular and absolute discretion.

In making this submission the City relies on other sections of the Development Charges Act that refer to eligibility which, the City submits, demonstrates the understanding of the legislature that eligibility is a concern separate, different from, and independent of, “availability”. In short, if the legislature had intended that “eligibility” was to be the subject of complaints, it would have said so. [ 32 ] In particular, counsel for the City referred to s. 65 of the Development Charges Act. The current Development Charges Act was promulgated in 1997.

There was a predecessor being the Development Charges Act in place since 1990. [43]

Section 65 of the current Act appears within the part of the legislation entitled “Transition”. It concerns the treatment of “eligible credits”. The term is defined in contradistinction to “ineligible credits” that are referred to in s. 64. This is the use of a different word for a different purpose. “The holder” of an “eligible credit” was entitled to credit “under a development charge by-law under this [the new] Act, of the same municipality, under whose by-law the eligible credit was given.” In that case “the holder” of the credit was known. The substance of the pre-existing credit was also known. The question answered by the

definitions was which of those credits would carry over, be “eligible”, under the new legislation. [ 33 ] Section 20(1)(

b) raises a different concern. We know who is going to get a credit, it is the person who did the work. The question is whether that work qualifies to be credited. It is not a question of whether an established credit is eligible to be recognized under a new regime but whether a credit is “available” for the work performed. That answer provided by the City can be the subject of a complaint and, where appealed to it, the subject of a hearing and consideration by the Local Planning Appeal Tribunal. [ 34 ] The recognition that the Local Planning Appeal Tribunal, pursuant to s. 20(1)(

b) of the Development Charges Act , has the jurisdiction to consider the complaint made does not finally deal with the issue raised by the first of the three questions. Although not properly framed as a question of jurisdiction, there is a subsidiary concern as to whether the conditions precedent to such a consideration have been met. Does the work done qualify? For this I turn to s. 38(1) of the Development Charges Act. The presumption is that the development charge will be paid.

However, the clause makes plain that the municipality and the developer may agree that, instead of paying some part of the charge, the developer will undertake some part of the work required to properly provide services to the development area, in which case, the municipality is required to provide a credit against the development charge that would otherwise be paid. Section 38(2) provides that the value of the credit will be the “reasonable cost of doing the work” as the municipality and the developer agree. [ 35 ] In this case, there is such an agreement.

The Core Infrastructure Agreement provides that the developers who are parties to it, will do work the agreement outlines at a cost it specifies to the total of $502,333. Contrary to the position taken by the City, it does not have the discretion to determine whether there should be a development charge credit. Section 38(1) is clear, with an agreement in place, the “municipality shall give the person a credit towards the development charge”.

The discretion the City does have is whether to enter into an agreement “to allow a person to perform work that relates to a service to which a development charge by-law relates.” Having

entered into such an agreement, the City is obliged to provide a credit valued pursuant to s. 38(2). [ 36 ] The City demurs. It submits that s. 38(1) requires a second and independent agreement to provide the credit. In other words, a municipality could “allow” a developer to perform work necessary to deliver a service it would otherwise be required to provide and then refuse to grant a credit. There is nothing in s. 38(1) that would support this. The second reference to “agreement” in s. 38(1) (“…the municipality shall give the person a credit towards the development charge in accordance with the agreement” ) is introduced by the

article “the” which refers the reader back to the agreement “to allow a person to perform work…”. There is only one agreement, in this case the Core Infrastructure Agreement. Insofar as the developers have performed the work required (counsel for the City advised they have), the City is obliged to give a credit in the amount agreed to, being $502,333.

Question 2: Can the Local Planning Appeal Tribunal award a development charge credit in respect of work that was not performed by the respondents but in respect of which they made a financial contribution? [ 37 ] Here, it is the position taken by the developers that goes too far and rubs against the clear meaning of the statutory regime. Section 38(1) provides that the municipality shall give a credit for “work performed”. As put forward by the developers and accepted by the Local Planning Appeal Tribunal, “work performed” includes cash contributions.

This proposes a regime different from one founded on the payment of development charges, that is the payment of money to fund improvements that will be undertaken by the municipality with credits provided if, and only if, the municipality and the developer agree that the latter will undertake some part of the improvements and, as a result, will be credited with the cost of the work so performed and the development charges it would otherwise be required to pay reduced accordingly. [ 38 ] It is true that the noun “work” or “works” is not defined in the Development Charges Act. The first rule of statutory

interpretation is that, absent ambiguity, words are to be given their plain and ordinary meaning. “Works” to be performed refers to the doing of a task. [44] In this case providing the service. It does not include a cash contribution that pays others, in this case the municipality, to take on the responsibility to undertake and perform that work. [ 39 ] It may also be true that nothing in the “Local Service Guidelines” distinguishes between cash payments or work performed. But what do they do?

The full title is “Guidelines Re Landowner Emplacement of Local Services Under Development Agreement.” This is consistent with the stated purpose of the Guidelines: The following guidelines set out, in general terms, the size and nature of engineered infrastructure that is included in the study as a development charge project, versus infrastructure that is considered as a local service to be emplaced separately by landowners , pursuant to a development agreement. [45] [Emphasis added] [ 40 ] It is not surprising that these Guidelines say nothing that distinguishes work performed from cash contributed.

That’s not what they are concerned with. What they do is to provide assistance in distinguishing between development charge projects and local services.

The Guidelines list the factors that those making that determination should, “among other factors” have regard to: …the nature, type and location of the development and any existing and proposed development in the surrounding area, as well as the location and type of services required and their relationship to the proposed development and to the existing and proposed development in the area… [46] [ 41 ] None of this touches on the need to consider whether “performing works” includes cash contributions.

To the contrary, the reference to “the size and nature of engineered infrastructure” and the “local service to be emplaced separately by landowners” suggests the doing of the work not supplying the funds. It does not follow that because nowhere is it said that “performing works” does not include “cash contributions” it must be that it does. [ 42 ] As it is, in this case, the Core Infrastructure Agreement does define “works”. The definition does not include cash contributions: “Works” means the Fully Shared Works and the Partially Shared Works as described in

Schedule “B”. [47] [Emphasis added] [ 43 ]

Schedule B is entitled “Description of Works and Costs”. It has three subheadings:

(1) Fully Shared Works and

(2) Partially Shared Works. These are the items defined as “Works” for the purposes of the Core Infrastructure Agreement and includes those services which make up work performed by the developers and valued at $502,333. The third Subheading is “Cash Payment Required”. This includes the $1,530,000 cash contribution made by the developers for work that counsel for the City advised has been undertaken and completed by it. These costs are not included in the definition of “works” in the Core Infrastructure Agreement.

Nonetheless, the recognition of cash contributions as works has resulted in a decision, made by the Local Planning Appeal Tribunal, that provides a credit for the cash contribution made on account of the services provided (the $1,530,000). This is contrary to the agreement made by the parties. I point out that counsel for the City advised that the particular services were not included within the background study that supports the present development charges by-law. However, as a result of the payment made, the (

H) Holding symbol was removed from the lands affected expediting their availability for development. The agreement allowed for the services involved to be constructed sooner than the City had planned and the lands to be available for development sooner than the developers could otherwise have expected. [ 44 ] The developers rely on clause 28.4 of the Core Infrastructure Agreement: The City acknowledges that nothing in this Agreement prohibits an Owner or Owners from applying to the City for applicable development charge credits.

Any such application must be made and determined prior to an Owner or the Precinct Company undertaking any of the works with respect to which the development charges credit is sought. The Owners acknowledge that this

section does not

fetter City Council’s discretion in considering any such application. [ 45 ] This clause does nothing to advance a recognition of cash contributions, made under the Core Infrastructure Agreement or elsewhere, as “work preformed”. It does nothing other than allow that applications for development credits may be made and dealt with by the City in the normal course. I suggest it goes further. It recognizes that work is, as it is ordinarily understood (tasks to be performed).

The idea that you have to apply for a credit on account of a cash contribution before you make the contribution, or agree on the amount seems, at best, impractical. [ 46 ] I point out that the Core Infrastructure Agreement was signed February 18, 2014 two years after the Altus report, the report dated December 11, 2012 and which is said to be the demonstration of application for credits. [48] In other words, the amount to be paid as a cash contribution was not finally agreed to until two years after the supposed application that it be treated as a credit against development charges.

In this case, pursuant to the Core Infrastructure Agreement, the cash contribution (the $1,530,000) was to be paid at the time the agreement was entered into (February 18, 2014). [49] The development charges were paid by Ocean Residences Inc. on March 7, 2014 and by Phantom Developments Inc. on July 31, 2014. This being so, why make the cash contribution at all? Why not just pay the development charge when it became due? [ 47 ] The Local Planning Appeal Tribunal sees this differently.

In its view the City delayed in responding to the request for credits such that the developers had no option but to make the contributions, presumably in order to have the (

H) Holding symbol lifted so that development could proceed: One of the City’s arguments is that it makes no sense for an owner/developer to pay the City cash for costs to cover certain services and then turn around and get a refund in the form of a credit for that same amount, and the City submits that only the required prior agreement of the parties would avoid the necessity of the payment and repayment.

Unfortunately, this argument by the City strikes the Tribunal as somewhat disingenuous since the City’s perceived conundrum with the scenario would fail to exist if it responded to the Appellant’s request for [ sic ] DC Credits when first asked. It is clear from the evidence that the Appellants requested the DC Credits early on, and when the City delayed responding for two years, the only recourse was to proceed with the work and pay the requested contributions and a way to the response, and appeal as necessary. [50] [Emphasis added] [ 48 ] What is the delay that is being relied on?

The Council of the City of Toronto, at its meeting on June 8 and 9, 2010, authorized “the entering into of a financially secured agreement” with the property owners “to implement the Humber Bay Shores Landowners Precinct plan…” but its terms remained to be negotiated. The staff report noted that the agreement “would seek to ‘legally secure the timing and phasing of the road dedication, environmental review, construction of on-and-off site road improvements at the applicant’s expense, as per the ultimate road network structured in the guidelines’” [51] This foresaw what became the Core Infrastructure Agreement.

It was not entered into until February 18, 2014. In the meantime on December 11, 2012, the Altus report was delivered and, on this basis, the claim for development charge credits is said to have been made.

It is those two years (December 11, 2012 to February 18, 2014) which the Local Planning Appeal Tribunal says represent the delay which compromises the City’s position that paying cash and then receiving a credit for it “makes no sense.” The complaint letters, which were delivered to the City and were then referred to Local Planning Appeal Tribunal, review the years between 2012 and 2014 as seen by the complainants.

They state that “despite several delays caused by the City and its various departments, including Toronto Water” (none of which are explained in the letters), the developers were “able to have the Core Infrastructure Agreement ready for the City’s approval during the City Council Meeting which took place on December 16-18, 2013”. It was not put before council at that time. Toronto Water wanted changes made.

The agreement was considered by the Community Council on January 15, 2014 and approved by City Council on February 18, 2014. [52] It was on December 23, 2014 that the City advised that no development charge credits would be granted. [ 49 ] To my mind, asserting this two year “delay” supports the position of the Owners in their claim for credits, fails in a fundamental way, to understand the planning process and the contribution of development charges to that process. Planning is undertaken to organize the evolution of our communities for the benefit of those who do, and will, live and work there.

Development charges contribute by arranging for the funding of the services that those developments will require, within the time frame that predicted demographics suggest and the process sets. There is no right for developers to commence development whenever they are ready. It is the municipality that has to be prepared. In this case the lands in question were zoned with an (

H) Holding symbol because the municipality was not prepared. This is not a question of the City delaying the consideration of a credit. This circumstance is not driven by when the developer requested the credit but by the Core Infrastructure Agreement by which the developers agreed to undertake some work to provide some of the required services (for which they receive the credit of $502,333) and to make a cash contribution to the City so that it could do work it would not, in the normal course, have undertaken at the time (the $1,530,000).

The Core Infrastructure Agreement does not define the cash contribution as work and, therefore, it would not qualify for a credit under s. 38(1) of the Development Charges Act. [ 50 ] Nonetheless the Local Planning Appeal Tribunal found that the cash contributions are eligible for development charge credits. But on what basis? [ 51 ] Daryl Keleher was the author of the Altus Report. He was a witness at the hearing conducted by the Local Planning Appeal Tribunal. He was referred to as the only witness qualified with expertise in development charges.

Within the evidence he provided was a reference to s. 5(1) para. 7 of the Development Charges Act . Section 5(1) outlines “the method that must be used, in developing a development charge by-law, to determine the development charges that may be imposed”. Paragraph 7 notes that “… Capital costs necessary to provide the increased services must be estimated”. [53] Daryl Keleher went on to refer to s. 5(3) para. 2 which provides that for the purposes of s. 5(1) para. 7 the “Costs to improve land if incurred by a municipality are capital costs”.

The Local Planning Appeal Tribunal proceeded to explain the conclusions provided by Daryl Keleher: In the absence of any definition of “works” in the legislation, and with the recognition that costs to improve the lands may be estimated for the purposes of administering the DC regime DC credits can, in Mr. Kelleher’s view, be granted for both cash paid by an owner to the City to cover the cost of performing DC eligible work and payment to the owner to undertake the completion of the work. The

tribunal accepts this approach as correct. [54] [ 52 ] How the understanding that the cost of improving land may be estimated leads to a conclusion that DC credits may be granted for both cash contributions or to cover the cost of performing DC eligible works is not explained.

What is clear is that, like the consideration of s. 38(1) and the Local Service Guidelines, this position relies on the absence of a definition which specifically excludes “cash contributions” as works to conclude they are to be included as such for the purposes of granting DC credits. [ 53 ] In furtherance of its determination that “cash contributions” are works, the Local Planning Appeal Tribunal relies on s.38(2) of the Development Charges Act . In its decision the Tribunal quotes the

section as providing that the amount of a DC credit is “… the reasonable cost of doing the work as agreed by the municipality and the person who is to be given the credit.” It notes that the “section does not direct that the DC Credit is the reasonable cost of the work performed by the owner.” From this the Local Planning Appeal Tribunal concludes that “[t]he plain meaning of the

section could thus be interpreted to include that the reasonable cost of the work reimbursed to the City by the owner or the reasonable cost of the work performed by the owner.” [55] [ 54 ] The understanding of the

section advanced does not support the conclusion arrived at. It may be that a developer with an option to purchase conditional on the necessary approvals being in place (not yet the owner) could undertake work to provide some of the needed services. Pursuant to s. 38(1), assuming there was an agreement between that prospective owner and the municipality, the developer would get a credit for the work it performed. This does not change what “work performed” means or suggest that a cash contribution made by a non-owner would be recognized as work performed such that it would be eligible for a credit.

This discussion concerns who may get a credit, not what qualifies for a credit. [ 55 ] The Local Planning Appeal Tribunal goes beyond the legislation and considers the Core Infrastructure Agreement. It finds that this agreement “clearly provided for cash contributions from the [owners] that were directly tied to the reasonable cost of potentially DC Credit eligible work.” [56] It does not so provide.

To make the point, the Local Planning Appeal Tribunal provides what it takes to be an example: That the contribution was directly tied to the improvements of the DC Credit eligible services is emphasized under the agreement which provided that if the specified roadway improvements were not to be constructed in relation to item 2.1(f) (Improvements to the intersection at $250,000) the cash contribution was to be returned to the [owners]. [57] [ 56 ] This mischaracterizes the cash contribution being referred to. Clause 2.1(

f) states: 2.1 The Precinct Company upon execution of the Agreement shall submit to the City by way of certified cheques payable to the “City of Toronto”, the following amounts: ….. (

f) Improvements regarding east and westbound left turn at Marine Parade Drive of Park Lawn Road/Marine Parade Drive/Lake Shore Boulevard West signalized intersection in the amount of $250,000.00 (HST included) … as indicated in

Schedule B. [58] [ 57 ] The Core Infrastructure Agreement goes on to say that if, in the end, the construction of these improvements is not recommended, the City will return the $250,000 cash payment. [59] This does not propose the granting of a credit. It would be a refund of money paid, but not used for its intended purpose. [ 58 ] In any case, by the terms of the Core Infrastructure Agreement, this cash contribution is not eligible for a credit. It is not “work”. As already referred to, in the Core Infrastructure Agreement “work” is defined as those items referred to in

Schedule B to the agreement, as “Fully Shared Works” and “Partially Shared Works”. The improvements noted in clause 2.1(

f) are neither of these. On

Schedule B they are shown as a “Cash Payment Required”. [60] This cash payment is not work, either understood in its ordinary meaning or as specifically defined under the Core Infrastructure Agreement and, accordingly, is not eligible for a development charge credit. [ 59 ] The Local Planning Appeal Tribunal arrives at the conclusion that cash contributions are included in “work performed” in an effort to align what the words say with its perception of the intent and purpose of the Development Charges Act : There is no stated or implied reference in the subsection defining the amount of the DC credits that requires that the owner must have performed the work to support the calculated credit.

Accordingly, if payment is made by the owner to the City for that “reasonable cost of doing the work” then arguably the intent and purpose of the DC Act is satisfied, and a DC credit is available. [61] [ 60 ] To do this the Local Planning Appeal Tribunal has gone beyond the plain and ordinary meaning of the legislation: The

section [s.38(1)] indeed does not specifically provide for the circumstances where the municipality allows a person to contribute to the performance of the work that involved DC -related services to prevent the similar disadvantage to the owner.

However, in the Tribunal’s view in light of the form of s. 38(2), and the overall intent and purpose of the DC Act, it must go beyond the wording to understand the ordinary meaning of section, in the context of the intention of the DC regime addressed by the whole of the legislation. [62] [Emphasis added] [ 61 ] The problem with the approach taken by the Local Planning Appeal Tribunal is that it is not directed to an assessment of the words and meaning of the legislation.

Rather the assessment is directed to responding to the perceived delay in the City’s response to what it sees as the initial claim for development credits. A delay, the Local Planning Appeal Tribunal believes was unreasonable and

took advantage of the developer’s need to move forward with their developments: [63] The application for the DC Credits was, on the evidence, done well in advance of the undertaking of all the works at issue. It was the City that clearly delayed providing its response some two years after the justification report and request for the DC Credits was provided, as the [developers] continued to move forward with the Development. It was the City who thereafter denied the DC credit claims leading to these proceedings.

In the Tribunal’s view the CIA cannot be interpreted as closing the door to the Appellant’s claims [ sic ] for DC Credits, but rather to preserving them for consideration under s. 20(1)(

b) and sections 38 and 39 of the DC Act . [64] [ 62 ] It was the role of the Local Planning Appeal Tribunal to apply the law, not to reshape it to comply with its sense of the equities involved. When any Tribunal drifts over that line, it enters the realm of policy and what the policy should be. That is for the legislature. [ 63 ] Cash contributions are not “work performed” and are not eligible for treatment as development charge credits.

Question 3: Did the LPAT err by failing to dismiss the Not Timely Complaint on the basis that it did not meet the statutory requirements for commencing a complaint under subsections 20(1) and (2) of the DC Act. [ 64 ] Was the third of the three complaints out of time? [ 65 ] Section 20(2) of the Development Charges Act requires that a complaint must be made by no later than 90 days after all or part of the development charges are payable. [65] Pursuant to s. 26(1) of the Act a development charge is payable upon the issuance of a building permit. [66] The third of the complaints, the one filed on behalf of the Humber Bay Shores Landowners Group, referred to the concerns of four individual developers, as follows: • Monarch Waterview Development Limited which complained with respect to three properties, two of which (68 Marine Drive and 2151-2153 Lake Shore Blvd.

West) had paid development charges (the first on January 31, 2021 and the second on July 31, 2014) but filed their complaints in the letter dated May 11, 2015 more than 90 days later. For the third property there was no known development proposed and thus no expectation as to when any development charge would be payable. • Kingbird Development Inc. which complained with respect to one property (2169-2171 Lake Shore Blvd.

West) where, like the third Monarch Property there was no known development and no expectation as to when any development charge would be payable. • Empire Communities (2183 Lakeshore Blvd.) Ltd. which complained with respect to one property (2183 Lakeshore Blvd. West) where the complaint was made before there was any requirement to pay the development charge, meaning there was no established amount against which any credit could be given and the 90-day limitation had not begun to run. • B-Major Homes (Ontario) Inc. which complained with respect to two properties, 2143 and 2147 Lakeshore Blvd.

West where, like the Empire Communities property, the complaint was made before anyone was required to pay a development charge, meaning there was no established amount against which any credit could be given and the 90-day limitation had not begun to run. [ 66 ] From this, there were properties in three different circumstances: • two owned by Monarch Waterview where the complaints were filed outside the 90-day limitation period set by s. 20(2), • two, one owned by Monarch Waterview and one by Kingbird Developments where there was no known development and, it follows, no expectation of when any development charge would be payable, and • three, two owned by B-Major Homes and one by Empire Communities where the complaint was made before any development charges were required to be paid. [ 67 ] The Local Planning Appeal Tribunal found no merit in the argument that any of these complaints should not be allowed to proceed.

Why? Again, as before, in the view of the Local Planning Appeal Tribunal the fault lay with the City and the delay attributed to it by the Tribunal: Given the City’s delay in responding to the clear requests for the DC Credits, and the timing of the removal of the Holding symbol, the Tribunal is unable to conclude that there are any fatal flaws to the manner in which the complaints were filed, and now before the Tribunal. [67] [ 68 ] The alleged delay by the City does not present the Local Planning Appeal Tribunal with the opportunity to set aside the statutory direction provided by the Development Charges Act.

There is no authority that allows the Tribunal to extend the time limitation set by the statute. These are not, as referred to by the Tribunal, “technical filings”. They reflect a substantive right to complain but only within the 90 days that the legislation prescribes. As put by the Ontario Assessment Review Board: If the Legislature had intended to grant this Board the power to extend the timeline set out in subsection 357(7) of the Municipal Act, 2001 it would have done so expressly, as it has in other contexts.

The Legislature’s choice to omit that language here is an indication that it did not intend to make this deadline flexible.… [68] [ 69 ] On the other hand, when a complaint is made in circumstances where there is no known development proposal or no requirement to pay a development charge has been established, a complaint that a credit has been earned but not granted must, at a first review, be seen as premature. Not only would the time period within which a complaint could be made not have started to run, no right to a credit would have been triggered.

However, in this case, the foundational planning is being undertaken under a precinct plan. The developers in the area have joined together under the auspices of a precinct company to take forward their common interest in this area of the City. It is in this context that each of the six developers have signed, and are parties to, the Core Infrastructure Agreement. [69] In

some fashion they have, between themselves, determined who and how the works under

Schedule B that are to be undertaken by them are to be shared, who will make the cash contributions provided for and how any credits obtained will be distributed. Understood in this way the complaint letter delivered on May 11, 2015 is not the commencement of a new claim but the addition of interested parties to the existing claim.

As put by counsel for the respondents: It is worth noting that all DC credit requests were made by the entire set of Landowners as a whole and denied by the City altogether as a whole. [70] [ 70 ] All of the works for which DC credits are sought were works shared among all of the landowners as provided in the Core Infrastructure Agreement. The complaint letter of May 11, 2015, delivered on behalf of the four landowners it references, does not add to the amount being claimed as a credit or to the substance of the submissions made in claiming those credits.

It does not raise any new issue as to the division of the cost of the work, the cash contribution to be made or any credit that may be awarded. It was neither too late (out of time) nor too early (premature). It was in furtherance of the complaint already and properly made. Conclusion [ 71 ] As to the first of the three questions for which leave was granted, the Local Planning Appeal Tribunal (now the Ontario Land Tribunal) has jurisdiction pursuant to s. 20(1)(

b) to determine whether a development charge credit is available to be used against the development charges that were imposed.

In this case, the respondents are granted a credit for the works undertaken by them, pursuant to s. 38(1) of the Development Charges Act and the Core Infrastructure Agreement to the value of $502,333. [ 72 ] As to the second question for which leave was granted, no credit can be awarded for cash contributions made by the respondents on account of work to be undertaken by the City of Toronto. [ 73 ] As to the third question for which leave was granted, the complaint made as of May 11, 2015 was not out of time or premature.

Costs [ 74 ] The parties had agreed as to costs based on the assumption that one or the other of them would be successful. As it is success is mixed. This being so the parties are to see if they can resolve the issue of costs and to advise the court as to any agreement. If they cannot agree, they are to provide submissions in writing no longer than four pages double spaced, exclusive of any Bill of Costs or caselaw being relied on. The submissions are to be uploaded on to Caselines, within ten days of the issuance of these reasons. _______________________________ Lederer, J.

I agree _______________________________ Sachs, J. I agree _______________________________ Lococo, J. Released: February 8, 2023 CITATION : City of Toronto v. Ocean Club Residences Inc., 2023 ONSC 898 DIVISIONAL COURT FILE NO.: 318/20 Local Planning Appeal Tribunal File No .: DC150005 DATE: 20230208

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Sachs, Lederer, Lococo, JJ IN THE MATTER OF an appeal under Section 37(1) of the Local Planning Appeal Tribunal Act , 2017, SO 2017, c 23 , as amended, from the Decision of the Local Planning Appeal Tribunal dated August 7, 2020, leave to appeal granted by D.L. Corbett J on April 8, 2022. AND IN THE MATTER OF appeals by Ocean Club Residences Inc., Phantom Developments Inc., B-Major Homes (Ontario) Inc., Empire Communities

(2183) Lakeshore Blvd Ltd., Kingbird Developments Inc., and Monarch Waterview Development Limited under subsection 22(2) of the Development Charges Act , 1997, S.O. 1997, c.27 , as amended BETWEEN: CITY OF TORONTO Appellant – and – OCEAN CLUB RESIDENCES INC., PHANTOM DEVELOPMENTS INC., B-MAJOR HOMES (ONTARIO) INC., EMPIRE COMMUNITIES

(2183) LAKESHORE BLVD LTD., KINGBIRD DEVELOPMENTS INC., and MONARCH WATERVIEW DEVELOPMENT LIMITED Respondents REASONS FOR JUDGMENT Lederer, J. Released: February 8, 2023