Pedwell v. Pelham, (2003) 174 O.A.C. 147 (CA)

• Judge: Weiler, Rosenberg and Armstrong, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 16, 2002
• Jurisdiction: Ontario
• Citations: (2003), 174 O.A.C. 147 (CA)

Pedwell v. Pelham (2003), 174 O.A.C. 147 (CA)

MLB headnote and full text

Temp. Cite: [2003] O.A.C. TBEd. MY.032

Robert Pedwell, Keith Pedwell, Mary Pedwell, Linda McLean and Landpark Homes Inc. (plaintiffs/respondents) v. The Corporation of The Town of Pelham and Robert Judge (defendants/appellants)

(C30587)

Indexed As: Pedwell et al. v. Pelham (Town) et al.

Ontario Court of Appeal

Weiler, Rosenberg and Armstrong, JJ.A.

May 9, 2003.

Summary:

Peacock sold agricultural lands to Pedwell. In order to avoid the provisions of the Planning Act which would require an approved subdivision plan, Peacock created 19 one acre lots and one 60 acre parcel from the lands and transferred them to Pedwell's nominees by means of a testamentary devise. Peacock died shortly thereafter. Landpark Homes offered to purchase 15 of the lots subject to the condition that building permits be obtainable. Landpark applied for the building permits. The Town was concerned about the development and it passed an interim control bylaw which provided that no one could use land or erect a building within land zoned agricultural. Pedwell, his nominees, and Landpark (the plaintiffs) appealed under s. 15 of the Building Code Act from the chief building official's refusal to issue the building permits. They also commenced an action for damages against the Town and the chief building official. The Town subsequently passed a zoning amendment bylaw to increase the minimum lot size from one acre to 1.5 acres, which in effect defeated the plaintiffs' development plans. The plaintiffs also applied to quash the zoning amendment bylaw on the ground that it was passed in bad faith.

The Ontario Court (General Division), in a decision reported at 72 O.T.C. 280, allowed the plaintiffs' appeal under the Building Code Act and ordered the chief building official to issue the building permits subject to Landpark obtaining Health Unit approval. The court also found that the interim control bylaw and the zoning amendment bylaw were passed in bad faith and quashed the zoning amendment bylaw. The court ordered the Town to pay the plaintiffs damages arising from the refusal to issue the building permits. The parties subsequently made submissions with respect to costs and prejudgment interest.

The Ontario Court (General Division), in a decision reported at 92 O.T.C. 50, rejected an argument in favour of a blending of interest rates and fixed the rate of prejudgment interest at the rate provided for in the Courts of Justice Act, which was 13.5% in the second quarter of 1990 when the cause of action arose. The court also ordered the Town to pay the plaintiffs' costs on a solicitor and client basis.

The Ontario Superior Court, in a decision reported at [2000] O.T.C. Uned. 254, allowed an amendment to the statement of claim to permit the plaintiffs to claim an additional amount by reason of the losses allegedly suffered as a result of their inability to invest the funds from the sale of the lands. The plaintiffs attempted to show that they would have invested some of the money in high return investments. The court found the evidence speculative and used the Courts of Justice Act rate of 13.5%

The Town and the chief building official appealed, arguing, inter alia, that the trial judge erred: (1) in allowing the Building Code Act appeal and directing that building permits issue; (2) in finding that the interim control bylaw and the zoning amendment bylaw were passed in bad faith and in quashing the latter; (3) in setting the rate of prejudgment interest at the Courts of Justice Act rate; and (4) in awarding solicitor client costs.

The Ontario Court of Appeal held that the trial judge erred in using the rate of 13.5% with respect to the plaintiffs' claim for losses suffered as a result of their inability to invest the funds from the sale of the lands. The court held that the more reasonable measure of the loss would be the blended rate of 6.5%. The court also concluded that the trial judge erred in awarding the plaintiffs solicitor and client costs. The court held that the plaintiffs were entitled to their costs of the action on a party and party basis to the date of an offer to settle and thereafter on a solicitor and client basis. The appeal was otherwise dismissed.

Damages - Topic 1537

General damages - Elements of general damages - Loss of opportunity to invest - Successful plaintiffs claimed an additional amount by reason of the losses they allegedly suffered as a result of their inability to invest the funds from the sale of certain lands - The plaintiffs attempted to show that they would have invested some of the money in high return investments - The trial judge found the evidence speculative and used the Courts of Justice Act rate of 13.5% - The Ontario Court of Appeal held that the trial judge erred - The burden was on the plaintiffs to establish this part of their case - They did not introduce satisfactory evidence about how they would have used the money or how the purported investments would have fared over the relevant period - In those circumstances, there was no justification for using the 13.5% rate, which was almost the peak rate over the relevant period - The court held that the more reasonable measure of the loss would be the blended rate of 6.5% - See paragraph 77.

Interest - Topic 5009

Interest as damages (prejudgment interest) - Prejudgment interest - Calculation of (incl. rate) - The trial judge awarded the plaintiffs damages and fixed the rate of prejudgment interest at the rate provided for in the Courts of Justice Act, which was 13.5% in the second quarter of 1990 when the cause of action arose - On appeal, the defendants submitted that it would have been more appropriate to fix a blended rate since there had been a fluctuation in the rates over the years leading up to the trial - The Ontario Court of Appeal rejected the argument - The trial judge was not persuaded that fluctuation in the rates alone was a sufficient reason to depart from what he considered was the plaintiffs' prima facie right to the interest rate in accordance with s. 128 of the Act - The court saw no error in principle in his reasons - See paragraph 75.

Land Regulation - Topic 3202

Land use control - Building or development permits - Right to issue of - [See Land Regulation - Topic 3207 ].

Land Regulation - Topic 3207

Land use control - Building or development permits - Conditions precedent to issue of - Lots sold to Pedwell were created from agricultural lands and transferred by means of a testamentary devise in order to avoid the provisions of the Planning Act which would require an approved subdivision plan - Landpark Homes offered to purchase 15 of the lots and applied for building permits - The Town was concerned about the development and passed an interim control bylaw, which provided that no one could use land or erect a building within land zoned as agricultural - Pedwell and Landpark appealed under s. 15 of the Building Code Act from the chief building official's refusal to issue the building permits - The trial judge allowed the appeal and ordered that the building permits issue, subject to Landpark obtaining Health Unit approval - The Ontario Court of Appeal affirmed the decision - The fact that Landpark had not obtained Health Unit approval, a condition precedent to the granting of a building permit, was not fatal to its appeal where the Town and the Health Unit had shared the same concern about the development and the Health Unit had said that it would not process the applications for approval until the problems with the Town had been sorted out - See paragraphs 39 to 43.

Municipal Law - Topic 1704

Liability of municipalities - General and definitions - Bad faith - [See Municipal Law - Topic 3853 ].

Municipal Law - Topic 3844

Bylaws - Quashing bylaws - Grounds for judicial interference - Invalid purpose - [See Municipal Law - Topic 3853 ].

Municipal Law - Topic 3853

Bylaws - Quashing bylaws - Grounds for judicial interference - Lack of good faith - Lots sold to Pedwell were created from agricultural lands and transferred by means of a testamentary devise in order to avoid the provisions of the Planning Act which would require an approved subdivision plan - Landpark Homes offered to purchase 15 of the lots and applied for building permits - The Town was concerned about the development and passed an interim control bylaw, which provided that no one could use land or erect a building within land zoned as agricultural - The Town also subsequently passed a zoning amendment bylaw to increase the minimum lot size from one acre to 1.5 acres, which in effect defeated Pedwell's development plans - The trial judge found that the interim control bylaw and the zoning amendment bylaw were passed for the purpose of frustrating Pedwell's development plans and that they were passed in bad faith - The trial judge quashed the zoning amendment bylaw - The Ontario Court of Appeal found no basis to interfere with the trial judge's conclusion - See paragraphs 70 to 73.

Municipal Law - Topic 6263

Actions against municipality - Restrictions - Statutory restrictions - The plaintiffs applied to quash a municipal bylaw - The application was heard together with the plaintiffs' action for damages against the Town - The Town consented to that procedure - On appeal, the Town raised for the first time s. 200 of the Municipal Act - That section provided that a proceeding could not be brought for anything done under a bylaw that was invalid "until one month after the bylaw has been quashed or repealed" - The Ontario Court of Appeal held that it would be manifestly unfair to require the plaintiffs to begin their damage action all over again because of an issue that could and should have been raised at the first instance - See paragraphs 49 to 51.

Practice - Topic 7063

Costs - Party and party costs - Counsel fees - Special or additional counsel - The respondents were almost completely successful on an appeal and were entitled to costs of the appeal on a partial indemnity basis - The respondents had been represented by one set of counsel at trial - On appeal, some of the respondents had retained new counsel - The respondents submitted bills of costs that exceeded $100,000 - The Ontario Court of Appeal awarded the respondents one set of counsel fees in the amount of $45,000 - The court considered that the interests of all of the respondents were identical and yet there seemed to have been little collaboration between the respondents' counsel in their preparation - That resulted in duplication of work and the incurring of unnecessary costs - See paragraph 80.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - [See Practice - Topic 7468 ].

Practice - Topic 7468

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Against the Crown or governmental bodies - A trial judge awarded costs against a Town on a solicitor and client basis because the Town had maintained its position that the plaintiffs' building lots were illegal, it had used an interim control bylaw to freeze the plaintiffs' development and it had passed a zoning amendment bylaw, which the trial judge found was passed in bad faith - The Ontario Court of Appeal held that the trial judge erred in fixing costs on a solicitor and client scale on that basis where he had acknowledged that the Town officials had acted in what they thought was the public interest - See paragraph 78.

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues or points not previously raised - [See Municipal Law - Topic 6263 ].

Cases Noticed:

Ontario (Attorney General) v. Montemurro et al. (1993), 60 O.A.C. 98; 12 O.R.(3d) 1 (C.A.), refd to. [para. 15, footnote 1].

Niagara-on-the-Lake (Town) v. Gross Estate - see Ontario (Attorney General) v. Montemurro et al.

Housen v. Nikolaisen et al. (2002), 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577 (S.C.C.), refd to. [para. 22].

Campeau Corp. v. Gloucester (Township) et al. (1979), 22 O.R.(2d) 652 (C.A.), affing. (1978), 21 O.R.(2d) 4 (H.C.), refd to. [para. 44].

Welwood et al. v. Farrell et al., [2002] O.T.C. 286; 29 M.P.L.R.(3d) 1 (Sup. Ct.), refd to. [para. 47].

Burns v. Perth South (Township), [2001] O.T.C. 399; 54 O.R.(3d) 266 (Sup. Ct.), refd to. [para. 47].

Shaver Hospital for Chest Diseases v. Slesar et al. (1979), 15 C.P.C. 97 (Ont. C.A.), refd to. [para. 50].

Browne v. Dunn (1893), 6 R. 67 (H.L.), refd to. [para. 50].

Equity Waste Management of Canada et al. v. Halton Hills (Town) (1997), 103 O.A.C. 324; 35 O.R.(3d) 321 (C.A.), refd to. [para. 58].

Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231; 163 N.R. 81; 41 B.C.A.C. 81; 66 W.A.C. 81; 110 D.L.R.(4th) 1, refd to. [para. 70].

Hall v. Toronto (City) (1979), 23 O.R.(2d) 86 (C.A.), refd to. [para. 73].

Counsel:

Peter T.M. Haney and Thomas Bielby, for the appellants;

Thomas Richardson and Katherine King, for the respondents, Robert Pedwell, Keith Pedwell, Mary Pedwell and Linda McLean;

Evert Van Woudenberg, for the respondent, Landpark Homes Inc.

This appeal was heard on October 16, 2002, before Weiler, Rosenberg and Armstrong, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Rosenberg, J.A., and was released on May 9, 2003.