Consortium Developments (Clearwater) Ltd. v. Sarnia (City) et al., (1996) 92 O.A.C. 321 (CA)

• Judge: McMurtry, C.J.O., McKinlay and Osborne, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 06, 1996
• Jurisdiction: Ontario
• Citations: (1996), 92 O.A.C. 321 (CA)

Consortium Dev. Ltd. v. Sarnia (1996), 92 O.A.C. 321 (CA)

MLB headnote and full text

The Corporation of the City of Sarnia and The Lambton County Roman Catholic Separate School Board (respondents) v. Consortium Developments (Clearwater) Ltd. (appellant)

(C22666)

The Corporation of the City of Sarnia and the Lambton County Roman Catholic Separate School Board (respondents) v. Kenneth MacAlpine, James Pumple and MacPump Developments Ltd. (appellants)

(C22672)

Indexed As: Consortium Developments (Clearwater) Ltd. v. Sarnia (City) et al.

Ontario Court of Appeal

McMurtry, C.J.O., McKinlay and Osborne, JJ.A.

September 6, 1996.

Summary:

The Town of Clearwater and the City of Sarnia amalgamated. Sarnia passed a resolution directing a public inquiry under s. 100(1) of the Municipal Act into property transactions in Clearwater prior to the amal­gamation. A commissioner was appointed. Property developers applied for judicial review to quash the resolution. They argued that the inquiry's terms of reference exceeded the municipality's jurisdiction. The commissioner, without hearing submissions from the property developers, determined not to adjourn the inquiry pending the hearing of the application for judicial review. The property developers applied for removal of the commissioner.

The Ontario Divisional Court, in a judg­ment reported 81 O.A.C. 96, dismissed the application for removal of the commissioner.

The property developers issued summonses to individual council members. The munici­pality applied to quash the summonses.

The Ontario Divisional Court, in a judg­ment reported 81 O.A.C. 102, quashed the summonses. The property developers applied to quash the resolution.

The Ontario Divisional Court, in a judg­ment reported 83 O.A.C. 241, dismissed the application to quash Sarnia's resolution. The property developers appealed all three judg­ments.

The Ontario Court of Appeal dismissed the appeal.

Administrative Law - Topic 2087

Natural justice - Constitution of board or tribunal - Bias - General - [See Administrative Law - Topic 2088 ].

Administrative Law - Topic 2088

Natural justice - Constitution of board or tribunal - Bias - Apprehension of - Property developers applied for judicial review to quash a municipal resolution setting up an inquiry into property transactions involving public funds - The inquiry commissioner, without hearing submissions from the developers, declined to adjourn the inquiry pending the hearing of the judicial review application - The developers claimed they were denied natural justice and sought the removal of the commissioner - They objected to the commissioner taking private advice from commission counsel and relying on that advice without hearing from interested parties - The Ontario Divisional Court declined, in the absence of bias or reasonable apprehension of bias, to prohibit the commissioner from continuing with the hearing - The Ontario Court of Appeal affirmed this decision - See paragraphs 31 to 32.

Administrative Law - Topic 7921

Public inquiries - Creation of - General - The City of Sarnia passed a resolution directing a public inquiry into property transactions involving public funds (Munucipal Act, s. 100(1)) - Property developers sought to quash the resolution arguing, inter alia, that the resolution was ultra vires because it infringed on the federal criminal law power, was vague, did not comply with s. 100(1), and was an attempt to investigate affairs beyond Sarnia's jurisdiction - The Ontario Divisional Court refused to quash the resolution on these grounds and allowed the public inquiry to proceed - The Ontario Court of Appeal affirmed this decision - See paragraphs 37 to 81.

Constitutional Law - Topic 6963

Provincial jurisdiction (s. 92) - Municipal institutions - Extent of subject matter - Public inquiries - The City of Sarnia passed a resolution directing a public inquiry into property transactions involving public funds (Municipal Act, s. 100(1)) - Property developers argued that the resolution was ultra vires because it was a substitute for a police investigation and infringed on the federal criminal law power - The Ontario Court of Appeal affirmed an Ontario Divisional Court decision that held that the pith and substance of the resolution was to inquire into the good government of the municipality and, in particular, the conduct of its public business - This matter fell within provincial powers under the Constitution Act, 1867 (i.e., s. 92(8)(municipal institutions) and s. 92(16) (matters of local or private nature)) - See paragraphs 57 to 78.

Constitutional Law - Topic 7517

Provincial jurisdiction (s. 92) - Matters of local or private nature - Public inquiries - [See Constitutional Law - Topic 6963 ].

Evidence - Topic 5607

Witnesses - Competency and compellability - Compellability - Boards and tribunals - Members of municipal council - The City of Sarnia passed a resolution directing a judicial inquiry under s. 100 of the Municipal Act into certain property transactions involving public funds - Property developers challenged the legal and constitutional validity of the municipality's resolution - No records were kept of the deliberations that took place in the municipal council - The developers issued summonses to individual council members in order to obtain background evidence as to the intent and purpose of the municipality in proposing the resolution to hold the inquiry - The Ontario Divisional Court quashed the summonses, stating that the intent of decision makers was irrelevant - The Ontario Court of Appeal affirmed this decision - See paragraphs 22 to 30.

Municipal Law - Topic 413

Councils - Resolutions - Quashing of - Grounds - Purpose of resolution not authorized by empowering statute - The Town of Clearwater and the City of Sarnia amalgamated - Sarnia passed a resolution under s. 100(1) of the Municipal Act directing a public inquiry into property transactions in Clearwater prior to the amalgamation, including Clearwater's dealings with a school board - Property developers applied to quash the resolution, arguing that it purported to investigate the school board's affairs and was therefore beyond Sarnia's jurisdiction - The Ontario Divisional Court rejected this argument - The court stated that the mere fact that one item in the resolution concerned a sale of land to the school board did not make it an inquiry into school board affairs - The Ontario Court of Appeal affirmed this decision - See paragraphs 79 to 81.

Municipal Law - Topic 415

Councils - Resolutions - Quashing of - Grounds - Resolution unconstitutional - [See Constitutional Law - Topic 6963 ].

Municipal Law - Topic 416

Councils - Resolutions - Quashing of - Grounds - Vagueness - A municipality passed a resolution directing a judicial inquiry under s. 100(1) of the Municipal Act into certain property transactions involving public funds - Property developers applied to quash the resolution, arguing vagueness - The application was dismissed - The Ontario Court of Appeal held that the municipality "has specified the 'matter' to be investigated, and that matter is a limited, defined series of transactions ... Public funds were used to purchase two properties at what appears to be substantially inflated prices, the [municipality] is holding a mortgage which may be unenforceable and [a developer] has steadfastly refused to disclose its principals. Again, the transactions are described in sufficient detail to direct the commissioner as to the subject matter of the inquiry" - See paragraphs 49 to 56.

Municipal Law - Topic 1519

Powers of municipalities - Particular powers - Inquiries - A municipality passed a resolution directing a judicial inquiry under s. 100(1) of the Municipal Act into certain property transactions involving public funds - The Ontario Court of Appeal discussed the authority of municipalities to pass a resolution under s. 100(1) and the history of this provision - The court noted that s. 100(1) established a "branch" inquiry process: one branch for alleged misconduct, the other for "good government" and "the public business" - The court held that the municipality's resolution to inquire into "good government" and "the public business" was within its jurisdiction - The municipality would also have had jurisdiction respecting alleged misconduct - The Municipal Act did not require the municipality to specify under which branch of s. 100(1) it purported to act - See paragraphs 37 to 48.

Cases Noticed:

MacPump Developments Ltd. v. Sarnia (City) (1994), 75 O.A.C. 378; 20 O.R.(3d) 755 (C.A.), refd to. [para. 16].

Irving Oil Ltd., Canaport Ltd., Kent Lines Ltd. and Thorne's Hardware Ltd. v. National Harbours Board, [1983] 1 S.C.R. 106; 46 N.R. 91; 143 D.L.R.(3d) 577, refd to. [para. 22].

Starr et al. v. Houlden, [1990] 1 S.C.R. 1366; 110 N.R. 81; 41 O.A.C. 161, refd to. [para. 23].

R. v. Morgentaler, [1993] 3 S.C.R. 463; 157 N.R. 97; 125 N.S.R.(2d) 81; 349 A.P.R. 81; 107 D.L.R.(4th) 537, consd. [para. 24].

Ontario Adult Entertainment Bar Association v. Metropolitan Toronto (Municipality) (1995), 86 O.A.C. 161; 129 D.L.R.(4th) 81 (Div. Ct.), consd. [para. 25].

Agnew v. Ontario Association of Architects (1987), 26 O.A.C. 354; 64 O.R.(2d) 8 (Div. Ct.), refd to. [para. 30].

Ontario (Attorney General) v. Grady (1988), 34 C.R.R. 289 (Ont. H.C.), consd. [para. 32].

Westray Mine Public Inquiry, Re - see Phillips et al. v. Richard, J.

Westray Families' Group see Phillips et al. v. Richard, J.

Phillips et al. v. Richard, J., [1995] 2 S.C.R. 97; 180 N.R. 1; 141 N.S.R.(2d) 1; 403 A.P.R. 1; 124 D.L.R.(4th) 129, consd. [para. 32].

United Steelworkers of America, Local 9332 v. Richard, J. - see Phillips et al. v. Richard, J.

Allan v. Bushnell T.V. Co. (1969), 1 D.L.R.(3d) 534 (Ont. H.C.), refd to. [para. 36].

Milk Board (B.C.) v. Grisnich et al., [1995] 2 S.C.R. 895; 183 N.R. 39; 61 B.C.A.C. 81; 100 W.A.C. 81; 126 D.L.R.(4th) 191, consd. [para. 45].

893472 Ontario Ltd. v. Whitchurch-Stouffville (Town) (1991), 7 M.P.L.R.(2d) 296 (Ont. Gen. Div.), refd to. [para. 47].

Howard v. Toronto (City) (1927), 61 O.L.R. 563 (C.A.), refd to. [para. 47].

McKay v. R. (1965), 53 D.L.R.(2d) 532 (S.C.C.), refd to. [para. 47].

R. v. Greenbaum (M.), [1993] 1 S.C.R. 674; 149 N.R. 114; 61 O.A.C. 241, refd to. [para. 47].

Mississauga Hydro Electric Commission v. Mississauga (City) (1975), 13 O.R.(2d) 511 (Div. Ct.), dist. [para. 51].

Ratnagopal v. Attorney General, [1970] A.C. 974 (P.C.), dist. [para. 54].

Canada (Attorney General) et al. v. Royal Commission of Inquiry on the Blood System in Canada (1996), 115 F.T.R. 81 (T.D.), refd to. [para. 59].

O'Hara and Kirkbride v. British Columbia, [1987] 3 W.W.R. 362 (B.C.C.A.), affd. [1987] 2 S.C.R. 591; 80 N.R. 127; 45 D.L.R.(4th) 527, refd to. [para. 59].

Robinson v. British Columbia - see O'Hara and Kirkbride v. British Columbia.

Canadian National Railway Co. v. Courtois and Commission de la santé et de la sécurité du travail (Qué.) et al., [1988] 1 S.C.R. 868; 85 N.R. 260; 15 Q.A.C. 181, consd. [para. 61].

Faber v. Québec (Procureur général) et Québec (Ministre de la Justice) et autres, [1976] 2 S.C.R. 9; 6 N.R. 1 (Fr.); 8 N.R. 29 (Eng.), refd to. [para. 65].

Di Iorio and Fontaine v. Warden of the Common Jail of Montreal (City) et al., [1978] 1 S.C.R. 152; 8 N.R. 361, consd. [para. 65].

Keable and Quebec (Attorney General) v. Canada (Attorney General) et al., [1979] 1 S.C.R. 218; 24 N.R. 1, consd. [para. 66].

O'Hara and Kirkbride v. British Columbia, [1987] 2 S.C.R. 591; 80 N.R. 127; 45 D.L.R.(4th) 527, refd to. [para. 67].

Phillips et al. v. Richard, J. (1993), 117 N.S.R.(2d) 218; 324 A.P.R. 218; 100 D.L.R.(4th) 79 (C.A.), refd to. [para. 71].

British Columbia Securities Commission v. Branch and Levitt, [1995] 2 S.C.R. 3; 180 N.R. 241; 60 B.C.A.C. 1; 99 W.A.C. 1; 97 C.C.C.(3d) 505; 123 D.L.R.(4th) 589, refd to. [para. 72].

Statutes Noticed:

Inquiries Act, R.S.C. 1985, c. I-11, sect. 2 [para. 40].

Municipal Act, R.S.O. 1990, c. M-45, sect. 100(1) [para. 13].

Public Inquiries Act, R.S.O. 1990, c. P-41, sect. 2 [para. 40]; sect. 9(1) [para. 77].

Authors and Works Noticed:

Canada, Law Reform Commission, Commissions of Inquiry: A New Act (1977), Working Paper No. 17, pp. 7 to 11 [para. 41].

Ontario, Legislative Assembly of Ontario, Hansard, Official Report of Debates, Second Session, 34th Parliament (1989), generally [para. 23].

Counsel:

Stephen T. Goudge, Q.C., and Susan J. Stamm, for the appellant, Consortium Developments (Clearwater) Ltd.;

Harvey T. Strosberg, Q.C., for the appellants, Kenneth MacAlpine, James Pumple and MacPump Developments;

George Rust-D'Eye and Barnet H. Kussner, for the respondent, City of Sarnia.

This appeal was heard on June 24, 25, and 26, 1996, by McMurtry, C.J.O., McKinlay and Osborne, JJ.A., of the Ontario Court of Appeal.

The decision of the Court of Appeal was released on September 6, 1996, by McMurtry, C.J.O.