ONTARIO MUNICIPAL BOARD - AWARD OF COSTS

ONTARIO MUNICIPAL BOARD - AWARDING OF COSTS

C.M. Loopstra, Q.C., and Quinto M. Annibale

The recent decision of the Ontario Municipal Board to Award costs against City of Toronto Alderman Dale Martin in the World Trade Centre decision1 has once again raised the question of what the appropriate role of the Ontario Municipal Board in awarding costs should be.

The decision received much media coverage because it involved a high profile local politician. From a legal perspective, however, it was notable because it marked somewhat of a departure from principles which the Board has laid down in previous decisions. At first blush, it seemed as though the board was "punishing" the alderman for refusing to live with the majority decision of council. In fact, a Globe & Mail article reported the decision in part as follows:

It (the Board) said Mr. Martin "abused the process" because he should have been willing to live with the majority decision of council.2

A careful analysis of the decision, however, makes it clear that the award of costs was made largely because in the Board's opinion, the alderman "wasted the Board's time." The Board found that no real issue was raised as part of the alderman's case, and that in fact, the only witness produced by him actually assisted the developer’s case. The Board held:

The Board is concerned, however, that the appellant’s only witness actually supported the city's case. The Board is also concerned that the appellant failed to offer the Board any alternative to what the city was proposing, even after acknowledging that both the city and the developer had tried unsuccessfully to use the other three options for providing assisted housing before ending up with the cash-in-lieu option. The appellant did not even offer an alternative in terms of either a formula for arriving at, or any actual amount of money payment. Surely to find that something is inappropriate, an appropriate alternative should be demonstrated to the Board.3

The Ontario Municipal Board's jurisdiction to award costs in an OMB hearing stems from section 96 of the Ontario Municipal Board Act. That section reads as fo11ows:

96( 1) the costs of and incidental to any proceeding before the Board, except as herein otherwise provided, shall be in the discretion of the Board and may be fixed in any case at a sum certain or may be taxed.

(2) The Board may order by whom and to whom any costs are to be paid, and by whom the same are to be taxed and allowed.

(3) The Board may prescribe a scale under which such costs shall be taxed.4

EXERCISE OF DISCRETION

The discretion vested in the Board by this section is quite broad. A review of the Board's decisions dealing with costs however, provides an insight into how this discretion has been exercised to date.

One of the most comprehensive decisions is that of Mr. A.J.L. Chapman in Re Murray Planning Area Official Plan Amendment 6 (No. 2).5 That decision dealt directly with an application under section 96 of the Ontario Municipal Board Act for costs against a municipality. The award followed the successful appeal by a homeowner of an official plan amendment and draft plan of subdivision approval.

The Board held that in the circumstances of the case, an award of costs under section 96 was not warranted. It reasoned that although the OMB is given wide discretion under section 96 to award costs, traditionally it has not done so on the same basis that courts of law do: that is, costs do not, as a general rule, follow the event in an OMB hearing. The rationale which the Board gave for this was that people coming to the Board ought not to risk having to pay costs to have their views heard if their appeals are unsuccessful. The principle the Board said applies equally to municipalities as it does to individuals:

It seems to me that all persons, and I include municipal councils, appearing before the Ontario Municipal Board on planning matters ought not to have to worry that if they express their views and fail they run the risk of having to pay costs simply because they failed. If that were the rule we would soon face the problem of citizens, including municipal councils, staying away from the Board in droves and suppressing their anxieties and concerns over planning matters rather than run the risk of having to pay substantial sums in the event their views did not find favour with the Board.6

What seems to have influenced the Board in this decision is the fact that the municipality's conduct in passing the amendment was in keeping with its usual procedures in matters such as the one before the Board - it obtained professional advice from planners, it held a public meeting and it retained other experts to assist it in the process. The Board found that the reason the municipality went ahead with the amendment and approval of the official plan and plan of subdivision was that it placed reliance on a letter from a government agency which turned out to be in error. This was not a sufficient reason to award costs.

There are cases however, in which the Board has in fact awarded costs against a municipality. Typically, these were cases where a municipality had failed to follow a procedural requirement in the passing of a by-law and a ratepayer challenged the action of the municipality, as in Re Town of Tecumseh Zoning By-law 1685 (1986);7 or the municipality argued a point which had already been decided, as in City of Toronto v.. Dankiw et al. (1983);8 see also Town of Fort Erie and Battey (1986).9 Similarly, there are cases when the Ontario Municipal Board has awarded costs to a municipality against a developer as in Re Township of King and C.A.H. Holding Limited et al.10 where the Board on an application by a developer to amend the Official Plan to permit expansion of an Urban Centre by plan of subdivision refused the request and awarded substantial costs on a party and party basis.

SUMMARY OF PRINCIPLES

The following is a brief summary of the principles the Board has employed in exercising its discretion when awarding costs over the last few years:

1. That an effort be made not to discourage people from appearing before the Board. The Board has stated that the nature of the planning process is such that it operates most effectively with maximum public participation.11

2. The sophistication of the applicant.12

3. The technical level of the objection. In the Stornelli decision, supra, the Board seemed to suggest that in "technical battles between lawyers," (it was a motion), the Board might be more inclined to award costs to the successful party, as courts do.

4. Whether the issues raised are important, complex or novel.13

5. Whether the objectors or applicants are appearing in good faith and have legitimate concerns to present to the Board.14

6. Whether the appeal is made for political reasons.15

7. Whether there is an unnecessary adjournment, withdrawal or other delay.16

8. Whether the application or appeal has any merit.17

9. Whether the issue has already been determined.18

10. Whether the matter has come before the Board as a result of some procedural irregularity on the part of the municipality.19

11. Whether the appeal will determine "theoretical" questions only.20

The cases in their totality seem to reveal the tendency among board members to award costs as an exception rather than a rule. In Gilbert and the Town of Oakville for instance, Mr. S.R. Cole stated that:

While it is the B.oard's usual practice to not award costs, the facts and the conclusions drawn therefrom by the Board in this case, warrant a variation from such practice.21

WORLD TRADE CENTRE DECISION

The World Trade Centre decision is cited under the eighth factor above. The main reason the Board gave for making the award of costs against Alderman Martin was that his appeal had no merit. The decision was supportable on that basis once the Board made the factual finding that Alderman Martin had not raised a legitimate issue. However, one of the issues raised by Mr. Martin was that the City of Toronto Official Plan, in adopting a system of "bonusing" permitted by section 36 of the Planning Act was too vague. In the World Trade Centre decision, the developer York Hanover, had been given more density in exchange for a cash contribution to an assisted housing fund. It was Alderman Martin's concern that the official plan did not contain sufficient criteria for determining when such an "exchange" would be appropriate and that the Act gave no guidance on this point. One would think this might be a legitimate issue worthy of the Board's consideration. However, with respect to the latter issue, the Board stated plainly:

Council for the appellant, although very inventive in his approach, failed to show that there were any defects in either the Official Plan Amendment 392 or By-law 420-87, according to section 36 of the Planning Act. The fact that this section of the Act had never been tested before should not determine whether or not time has been wasted in this hearing.

The question of whether section 36 even permits substitutions of cash for services as other "matters" has never been tested either. Theoretically, the higher density is permitted so that a municipality can exact a greater contribution of services from the developer. By allowing a cash contribution there exists a danger not that the specific social service will not be provided at all, as this is ensured by the existence of a separate fund, but that the service will be provided in a less desirable location. Some have theorized that this type of planning leads to the "ghettotization" of social housing. This may have been the concern Alderman Martin had in taking the case to the Board.

If this is so, and one can only speculate as to what arguments Martin's counsel made before the Board, then perhaps an award of costs was unmerited, in which case this decision would stand out as an anomaly to the Board's previous dicta on the awarding of costs.

PROPER ROLE OF THE BOARD

In any event, the World Trade Centre decision begs the question as to what the proper role of the Board should be in awarding costs. Few will argue that the Board's concern with not wanting to discourage individuals from appearing before the Board with their views is not a legitimate one. Balanced against this of course is the danger that comes with not having any established rules or procedures. There may be a lack of consistency when the Board exercises its discretion.

One alternative may be to establish specific rules and regulations with respect to costs, so that in appropriate circumstances, a successful party will be awarded costs, which could be assessed by an assessment officer under the jurisdiction of the Ontario Municipal Board. Such an officer in assessing the amount of costs could consider:

(a) the complexity of the proceeding,

(b) the importance of the issue;

(c) the duration of the hearing;

(d) the conduct of any party;

(e) whether the hearing was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution;

(f) a party's denial or refusal to admit anything that should have been admitted; and

(g) any other matter relevant to the assessment of costs.

New rules for the Board were recently enacted pursuant to the Ontario Municipal Board Act. It is interesting to note that the question of costs was not addressed therein. This may be a signal from the Board that it is satisfied with its present procedure. One can only speculate.

MUNICIPAL WORLD FEBRUARY 1988

1. Copthorne Limited and Dale Martin: Referral of Proposed Amendment 392 to the Official Plan for the City of Toronto etc. (September 9, 1987) (R830202 0870068) - Supplementary reasons delivered September 25, 1987 and October 22, 1987
   
2. Globe and Mail, September 16, 1987
   
3. Op. Cit., pp. 18 and 19
   
4. R.S.O. 1980, c.347, section 96
   
5. (1983) 15 O.M.B.R. 192
   
6. Ibid., p. 193
   
7. (1986) 18 O.M.B.R. 497
   
8. (1983) 16 O.M.B.R. 153
   
9. (1986) 19 O.M.B.R. 189
   
10. (1981) unreported decision by W.H.J. Thompson, Board File #R802697
    
11. See Re Murray Planning Area Official Plan Amendment 6 (no. 2) at footnote 5; see also Luigi Stornelli Limited v. City Centre Capital Limited 30 M.P.L.R. 18
    
12. Brommit v. The Town of Oakville (1983) 15 O.M.B.R. 425
    
13. Attia and Jacobs v. Kellner (1983) 16 O.M.B.R. 278; Carriero v. Reg. Assess. Commissioner Region No. 9, 29 M.P.L.R. 18
    
14. Trillium Place Housing v. City of Woodstock (1985) 17 O.M.B.R. 471; and Attia and Jacobs, supra, at footnote 13
    
15. Re Pellham Planning Area Official Plan Amendment 9, supra; and Town of Fort Erie and Victor Battey and Susan Battey (1986) 19 O.M.B.R. 189
    
16. Village of Creemore v. Dumyat Investments Limited (1986) 18 O.M.B.R. 480
    
17. Stornelli (supra at footnote 11); Brommit (supra at footnote 12); Dankiw (supra at footnote 8); World Trade Centre (supra at footnote 1)
    
18. Dankiw (supra at footnote 8)
    
19. Tecumseh (supra at footnote 7)
    
20. Erie and Battey (supra at footnote 9)
    
21. (1986) 19 O.M.B.R. 168
    

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