



COURT OF APPEAL FOR ONTARIO

CITATION: North Elgin Centre Inc. v.
    McDonalds Restaurants of Canada Limited, 2021 ONCA 173

DATE:  20210317

DOCKET: M51329 & M51679

(C63933)

Brown J.A.
    (Motions Judge)

BETWEEN

North
    Elgin Centre Inc.

Applicant
    (Respondent)

(Responding
    Party/Moving Party on cross-motion)

and

McDonalds
    Restaurants of Canada Limited

Respondent
    (Appellant)

(Moving
    Party/Responding Party on cross-motion)

Andrew Parley,
    Margaret Robbins and Sean Blakeley, for the moving party/appellant, McDonalds
    Restaurants of Canada Limited

Jeffrey E. Streisfield, for the moving
    party on the cross-motion/respondent, North Elgin Centre Inc.

Heard: December 7 and 8, 2020 by video
    conference

REASONS
    FOR DECISION

I.         OVERVIEW

[1]

McDonalds Restaurants of Canada Limited (McDonalds)
    moves for an order declaring North Elgin Centre Inc. (NEC) in contempt of the
    order of a panel of this court dated January 29, 2018 (the Order). That Order
    was made in respect of the renewal of a lease between NEC, as landlord, and
    McDonalds, as tenant, for commercial property located in Richmond Hill,
    Ontario (the Lease).

[2]

The Order declared that the Lease had been
    renewed for a first renewal term running from March 11, 2017 to March 10, 2027.
    Since the renewal term requires consent approval under s. 50(3)(f) of the
Planning
    Act
, R.S.O. 1990, c. P.13,
[1]
para. 3(b) of the Order states:

McDonalds shall, within 30 days of the date
    of the issuance of the reasons by the Court, bring an application for the
    consent required under s. 50(3)(f) of the
Planning Act
and the
    Respondent, [NEC], shall provide all reasonable cooperation to obtain that
    consent.

[3]

McDonalds alleges that NEC has acted in ways
    that breached the Orders requirement that it provide all reasonable
    cooperation to obtain the
Planning Act
consent.

[4]

NEC has brought a cross-motion that seeks
    declaratory relief in the nature of defences to the contempt motion, as well as
    directions regarding its obligations under para. 3(b) of the Order.

[5]

Contempt proceedings proceed in two stages: a
    liability phase, followed by a penalty phase:
Carey v. Laiken
, 2015
    SCC 17, [2015] 2 S.C.R. 79, at para. 18. These are my reasons for the liability
    phase of McDonalds contempt motion.

[6]

As I will explain below, I dismiss McDonalds
    motion. Given the basis for my conclusion that NEC is not in contempt of the
    Order, it is not necessary to decide the issues raised by NECs cross-motion,
    so I dismiss that motion.

II.       JURISDICTION

[7]

McDonalds initially sought to bring its contempt
    motion before the panel that made the Order. The panel invited submissions from
    the parties on the appropriate procedure to hear the contempt motion. NECs
    submissions disclosed that it intended to bring a cross-motion seeking
    directions as to whether the Lease was void because
Planning Act
consent was not obtained before the expiry of 21 years or, alternatively,
    directions about what NEC could do or not do having regard to paragraph 3(b)
    of the Courts Order.

[8]

The panel advised that a settlement conference
    would take place before Pardu J.A., which occurred on June 10, 2020. No
    settlement was reached. By order dated June 19, 2020, Pardu J.A. gave
    directions regarding the hearing of the motions (the Directions Order).

[9]

The Directions Order provided that the motion
    for contempt and a motion for directions and for declaratory relief, if brought
    by North Elgin, be heard together by a single judge of the Court of Appeal.
    However, [t]his is without prejudice to the right of the judge hearing both
    motions to determine whether the court has jurisdiction to give the declaratory
    relief sought.

[10]

Neither party objects to a single judge of this
    court hearing the motions.

[11]

Although the parties were not able to locate any
    jurisprudence of this court on the issue of the jurisdiction of a single judge
    to hear a contempt motion to enforce a panel order,
[2]
I am satisfied that the combined operation of the
Courts of
    Justice Act
, R.S.O. 1990, c. C.43 (
CJA
), and the
Rules of
    Civil Procedure
provides such jurisdiction.

[12]

The
Rules of Civil Procedure
apply to
    all civil proceedings in the Court of Appeal, subject to a few exceptions which
    do not apply to these motions: r. 1.02(1). Rule 60.11(1) requires that a
    contempt order to enforce an order requiring a person to do an act must be
    obtained on motion to a judge in the proceeding in which the order to be
    enforced was made. Where the order to be enforced is one made by the Court of
    Appeal, a contempt motion therefore must be brought in the Court of Appeal.

[13]

Section 7(2) of the
CJA
provides that a
    motion in the Court of Appeal shall be heard and determined by one judge,
    subject to the exceptions enumerated in s. 7(3), none of which include a
    contempt motion. I therefore conclude that a single judge of this court has the
    jurisdiction to hear a contempt motion to enforce an order made by a panel of
    the court.

III.      BACKGROUND FACTS

A.

The lease renewal dispute

[14]

NEC owns a parcel of land at the north-east
    corner of Yonge Street and Bernard Avenue on which it operates a shopping plaza
    (the Property). Under the Lease that commenced March 11, 1997, NEC leases
    part of the Property to McDonalds, which operates a restaurant on the demised
    premises.

[15]

The initial term of the Lease was for 20 years,
    expiring on March 10, 2017, with McDonalds having options to extend the term
    for two additional consecutive terms of ten years each.
[3]


[16]

The Property is located within a planning
    intensification area, known as a Key Development Area (KDA), in the 2010 Richmond
    Hill Official Plan. In 2016, the Town of Richmond Hill (the Town) initiated a
    process to prepare a secondary plan and zoning by-law for the KDA. As part of
    that process, NEC provided Town staff with a concept plan and parking strategy
    for the future development of the Property. The concept plan contemplates a
    high-density, mixed use, transit supportive development on the Property and
    shows that eventually a residential tower may be located on the site presently
    occupied by the McDonalds restaurant. In late 2017, NEC and other area
    landowners appealed the secondary plan and zoning by-law to the Local Planning
    Appeal Tribunal.

[17]

Section 19.10 of the Lease provides that it is
    subject to the
Planning Act
. As noted, s. 50(3)(f) of that Act provides,
    in part, that no person shall enter into any agreement that has the effect of
    granting the use of or right in land directly or by entitlement to renewal for
    a period of twenty-one years or more unless  (f) a consent is given to convey,
    mortgage or charge the land, or grant, assign or exercise a power of
    appointment in respect of the land or enter into an agreement in respect of the
    land. Section 19.10 of the Lease places the obligation on the landlord, NEC,
    to seek any
Planning Act
consent.

[18]

In 2016, a dispute arose over McDonalds
    exercise of its first right to renew the term of the Lease for an additional 10
    years. The dispute went to court, where the application judge found that the
    Lease had come to an end in March 2017 as McDonalds had failed to comply with
    the renewal provision: 2017 ONSC 3306, 87 R.P.R. (5th) 303.

[19]

In January 2018, this court allowed McDonalds
    appeal, declaring the Lease had been renewed for the first 10-year renewal term
    and referring the rent dispute for the renewal term to arbitration: 2018 ONCA
    71, 87 R.P.R. (5th) 315, at para. 13. This court then dealt, at para. 14, with
    the need to obtain consent under the
Planning Act
for the first
    renewal term:

With regard to McDonalds claim for an order
    requiring North Elgin to specifically perform its obligation to obtain a
Planning
    Act
consent, we note that the end of the 21
st
year under the
    Lease is fast approaching. We proposed to the parties in oral argument that the
    most sensible order would be one in which McDonalds was permitted to
    immediately bring an application for the consent, and North Elgin would provide
    all reasonable cooperation to obtain the consent. The parties were agreeable to
    that order, and it shall issue.

[20]

Para. 3(b) of the Order set out the parties
    obligations in respect of the
Planning Act
consent application,
    including requiring NEC to provide all reasonable cooperation to obtain that
    consent.

B.

The Consent Application

Events from February until October 2018

[21]

McDonalds retained Dentons Canada LLP to
    prepare and file the
Planning Act
consent application (the Consent Application).
    Dentons had the Consent Application signed by Mr. Renzo Belluz, a NEC
    representative, and filed it with the Town on February 1, 2018.

[22]

The Consent Application stated it sought [c]onsent
    to a long term lease for a McDonalds restaurant. The covering letter for the
    application stated:

The subject McDonalds Restaurant has been
    operating on the property for some time. The implementing (subject) lease
    permits McDonalds Restaurant to use part (approximately 1,200 sq. m.) of our
    clients property (as depicted on the enclosed Site Plan), along with
    non-exclusive rights for access and parking over the remainder of the property
    (therefore, easement approvals are not required).

The subject lease was for an initial term of
    twenty (20) years with a lease commencement date of March 1997.
The lease has two (2) options to
    extend for ten (10) years each. It is these extensions that require Planning
    Act approval.

As you are aware, the
Planning Act
requires leases of this length of time and nature (i.e. not part of a building
    and not the entire site) to be approved by the Committee of Adjustment when the
    term extends beyond twenty-one (21) years less a day.

It is respectfully submitted that this
    application for consent to a lease supports the orderly development of the
    neighbourhood, is consistent with the Zoning By-law and complies with all of
    those matters that one must have regard to pursuant to Section 51(24) of the
Planning
    Act
, and that a plan of subdivision is not appropriate in this
    circumstance. [Emphasis added.]

[23]

Town staff responded on March 21, 2018 advising
    that:

In order to understand the implications of the
    proposed consent, a Concept Plan (Section 5.2 of the OP) with a Planning
    Justification are required to demonstrate how the application conforms with the
    long term vision of the Towns new Official Plan and recently adopted Yonge and
    Bernard Key Development Area Secondary Plan.

[24]

In March and April 2018 emails sent to Dentons,
    Town staff raised a concern about how a long-term lease might freeze development
    on the Property to single storey buildings, which would not be in keeping with
    the Official Plan.

[25]

In the summer of 2018 McDonalds obtained from
    NEC copies of concept plans NEC had prepared in 2017 for the development of the
    entire Property. McDonalds took the position that the 2017 concept plans did
    not make provision for a site for its restaurant and asked NEC to submit
    revised concept plans to the Town.

[26]

By letter dated August 9, 2018, NECs counsel
    confirmed that NEC is not only consenting to your client's application for
Planning
    Act
approval but has even allowed the application to be made by your
    client in its name. As far as the Town of Richmond Hill (the Municipality) is
    concerned, NEC is 100% behind the application for the
Planning Act
approval. The letter noted that:

3. The reason the Municipality requested a
    Planning Justification Report in support of your clients application is
    because your clients application conflicts with and creates issues arising
    from (i) the Zoning By-Law, (ii) the Official Plan and (iii) an Interim Control
    By-Law

4. Toward the bottom of page 4 of your letter,
    you are asking NEC to provide a planning justification report outlining what
    is needed in order for the restaurant to comply. However, it is strictly your
    clients obligation to prepare and submit the Planning Justification Report
    supporting its application that has been requested by the Municipality

5. You also seem to believe that any NEC
    concept plans have affected your clients application. That is manifestly
    incorrect. What is relevant are the Municipalitys Zoning By-Law, Official Plan
    and Interim Control By-Law. While there is a non-conforming use for the leased
    lands, your client must nevertheless satisfy the Municipality with respect to
    its application for the
Planning Act
approval sought. It is simply up
    to your client to once and for all proceed with and submit a Planning
    Justification Report which will hopefully persuade the Municipality to approve
    the application for
Planning Act
approval.

[27]

By October 2018 McDonalds had retained Mr. Mike
    Crough, of the IBI Group, to assist with the Consent Application. In October
    2018 the IBI Group discussed with the Town the requirements for a Planning
    Justification Report. The IBI Group prepared an initial draft report but,
    according to an affidavit sworn by Mr. Crough, there followed a period of
    inactivity on the file and the IBI Group did not communicate with McDonalds
    for several months.

November 2018 until June 2019: the rent arbitration

[28]

It appears that McDonalds did not revive the
    work of the IBI Group until after the completion of the rental rate arbitration
    in June 2019.

[29]

The rental rate arbitration was held in February
    and May 2019, with an Award issued on June 26, 2019. In that proceeding,
    McDonalds obtained the production of the lease with one other tenant at the
    shopping plaza. NEC initially sought to appeal the Award but abandoned its
    application to do so.

June through August 2019: McDonalds Planning
    Justification Report

[30]

In June 2019, McDonalds asked NEC to provide
    copies of current leases for other tenants in the shopping plaza so they could
    be used in the Consent Application. Extensive correspondence ensued between
    counsel for the parties, in which McDonalds sought certain information from
    NEC that it needed to prepare a Planning Justification Report and in which NEC,
    in turn, sought access to the entire draft report. I need not delve into the
    details of the back-and-forth for present purposes. Suffice it to say that on
    September 10, 2019 McDonalds filed with the Town a Planning Justification
    Report prepared by the IBI Group (the IBI Report).

September through November 2019: Town staffs response to the IBI
    Report

[31]

By email dated September 20, 2019, Town staff
    informed counsel for the parties that:

This is to advise that staff has reviewed the [IBI
    Report] and is prepared to concur with the conclusions and recommendations
    contained therein, provided the owner confirms in writing that he is aware of
    both the proposed lease and the pending development proposal to permit high
    density residential development on the subject lands.

[32]

McDonalds immediately sought from NEC the
    written confirmation asked for by the Town. Confirmation from NEC was not
    forthcoming, for reasons set out in NEC counsels October 2, 2019 email to
    McDonalds:

The IBI report filed by McDonald's in support
    of the consent application (the September 2019 report) contains inaccurate statements
    (opinions) regarding the future development potential and timing of the NEC
    lands  which are acknowledged to be within a KDA and MTSA.

There appear to be at least two issues  (1)
    the temporal impact of a consent and (2) the spatial extent of any consent on the
    NEC lands.

1. The lease was renewed for a 10 year
    term (not up to 18 years and 4 months). This was not disclosed in the IBI
    report, and if disclosed may well support a consent limited to a 10 year term -
    which would expire in 2027.

2. In any event, the lease contains a no build
    zone clause (lease par 22.03 and schedule E4) - which consists of the entire
    NEC site. This clause (and its impact) was not disclosed or discussed in the
    IBI report, nor made known to the city planner or planning department who now
    request an acknowledgement letter from NEC. (Of course, the City knows that there
    is a Secondary Plan and Zoning Bylaw before LPAT for approval).

NEC does not wish to be a party to an
    application that potentially misrepresents information to the decision making tribunal
    (the committee of adjustment).

The question therefore is how we address these
    matters going forward  which is why a meeting has been requested in advance of
    a consideration to returning to the court for directions. I am available on
    Friday but prefer Monday Oct 7 in the AM. Please confirm. [Emphasis added.]

[33]

Further correspondence ensued, including NECs
    advice that it intended to meet with Town staff. The IBI Group wrote to the
    Town and provided a copy of the Lease. That resulted in Town staffs November
    1, 2019 email to the parties that stated, in part:

In the interim, staff has carefully reviewed
    your e-mail below and are therefore satisfied the Owner is aware of both the
    proposed lease and the pending development proposal to permit high density
    residential development on the its land holdings. Given the above, we no longer
    believe a meeting is necessary and are prepared to move forward with the
    application for consent. Please advise if you concur.

[34]

Then, on November 8, 2019, Town staff further
    advised:

Consent application B012/18 has been placed
    into our priority queue for the January 2020 circulation. Our internal meeting
    takes place on December 10, 2019 and applicants will be notified by email by
    the end of the week if they have been scheduled. Please open the
    acknowledgement letter contained in that email to advise you when signs are
    available for pick-up and the date staff reports will be ready.

December 2019: the MPlan Report

[35]

On December 6, 2019, a few days prior to Town
    staffs scheduled internal meeting, NEC filed a report prepared by MPlan Inc.
    as NECs input on the Consent Application.

[36]

The MPlan Report commented on the Consent Application
    and the IBI Group Report. The MPlan Report made the following recommendations
    concerning the consent application:

In order for the proposed Consent Application
    to be supportable, the following CONDITIONS OF APPROVAL are necessary and
    reasonable:

1. The Consent shall be limited to 8
    years, being the remaining portion of the renewal term. The owner or McDonalds
    may apply for a further Consent should McDonalds seek to renew the lease for
    the 2
nd
renewal term.

Reason: The Lease was only renewed for the 1
st
renewal term.

2. The Consent shall apply to the area
    of land shown on Appendix B.

Reason: Appendix B ensures that the subject
    lands can be redeveloped in phases, if necessary, in accordance with the
    Provincial, Regional and Municipal mandated intensification policies including
    provision of more affordable housing options including purpose built rental
    units, while providing for McDonalds continued use of the severed lands for
    the remainder of the renewal term.

3. The consent approval does not apply
    to, and no sanction is given to, Section 22.03 and Schedule E-4 to the Lease
    and to Sections 22.01, 22.02 and 22.04 of the Lease.

Reason: The No Build Zone provision and
    related sections sterilize the NEC property and therefore do not meet the
    Planning Act requirements referred to above.
The
    condition is intended to ensure that consent to the 1
st
renewal term
    does not freeze development on the retained lands and removes any restriction
    that would otherwise prevent development from occurring in a phases, with the
    south west corner of the property potentially be redeveloped last.
[Emphasis
    added.]

[37]

In general terms, ss. 22.01 to 22.04 of the
    Lease allow McDonalds, and its customers, the right to use the parking areas
    and other outdoor common areas of the shopping plaza and prohibit NEC from
    building on any part of the common areas shown with hatch marks on Schedule
    E-4 to the Lease. The hatched area constitutes a significant portion of NECs
    Property.

[38]

In response to the MPlan Report, on December 12,
    2019 Town staff advised that the Consent Application has been deferred until
    such a time that it has been determined what the actual request is and the
    owner is satisfied.

[39]

On December 17, 2019, the IBI Group wrote to the
    Town stating, in part:

I do not agree with the conditions or
    modifications proposed in the North Elgin Report. Specifically, I do not agree
    with the proposal to reduce the time period nor the expanded spatial area
    proposed.

[40]

In January 2020, Town staff advised NECs
    counsel that: (i) the Committee of Adjustment considered the Consent
    Application to be incomplete, hence the deferral; and (ii) the Committee of
    Adjustment would require the Propertys owner to be satisfied with the Consent
    Application and would ensure that the Consent Application and submitted
    drawings were complete.

C.

THE MOTIONS

[41]

McDonalds alleges that by filing the December 2019
    MPlan Report NEC breached para. 3(b) of the Order, which requires NEC to
    provide all reasonable cooperation for the Consent Application. McDonalds
    seeks a declaration that NEC is in contempt of the Order, the imposition of a
    fine on NEC, and an order requiring NEC to withdraw the MPlan Report from the
    Consent Application.

[42]

NECs cross-motion has two aspects. First, NEC
    seeks certain declarations that would operate, in effect, as defences to the
    contempt motion. Specifically, NEC seeks orders that the Lease came to an end in
    March 2018, 21 years after its commencement, with the result that the contempt
    motion is moot. Second, NEC seeks an order explaining what para. 3(b) of the
    Order requires it to do.

IV.     CONTEMPT: THE GOVERNING PRINCIPLES

[43]

Civil contempt consists of the intentional doing
    of an act which is prohibited by a court order:
Carey
, at para. 26. As
    summarized in
Carey
, at paras. 32 to 35, civil contempt has three
    elements that must be established beyond a reasonable doubt:

(i)

the order alleged to have been breached must
    state clearly and unequivocally what should and should not be done. An order
    may be found to be unclear if: it is missing an essential detail about where,
    when or to whom it applies; it incorporates overly broad language; or external
    circumstances have obscured its meaning;

(ii)

the party alleged to have breached the order
    must have had actual knowledge of it. Actual knowledge may be inferred from the
    circumstances or an alleged contemnor may attract liability on the basis of the
    wilful blindness doctrine; and

(iii)

the party allegedly in breach must have
    intentionally done the act that the order prohibits or intentionally failed to
    do the act that the order compels.
All that is required
    to establish civil contempt is proof beyond a reasonable doubt of an
    intentional act or omission that is in fact in breach of a clear order of which
    the alleged contemnor has notice
:
Carey
, at para. 38. Contumacy 
    the intent to interfere with the administration of justice  is not an element
    of civil contempt and lack of contumacy is therefore not a defence:
Carey
,
    at para. 29.

[44]

With civil contempt, where there is no element
    of public defiance, the purpose of a contempt order is seen primarily as
    coercive rather than punitive, with the court attempting to obtain compliance
    with its order:
United Nurses of Alberta v. Alberta (Attorney General)
,
    [1992] 1 S.C.R. 901, at p. 943, per Sopinka J., in dissent;
Chiang (Re)
,
    2009 ONCA 3, 93 O.R. (3d) 483, at para. 11. To that end, r. 60.11 of the
Rules
    of Civil Procedure
contemplates that a judge may set aside a finding of
    contempt if the contemnor subsequently complies with the order or otherwise
    purges his or her contempt or, in exceptional circumstances, where new facts or
    evidence have come to light after the contempt finding was made:
Carey
,
    at paras. 62, 64 and 66.

[45]

As the contempt power is discretionary, courts
    have consistently discouraged its routine use to obtain compliance with court
    orders. It should be used cautiously and with great restraint; it is regarded
    as an enforcement power of last, not first, resort. So, where an alleged
    contemnor acted in good faith in taking reasonable steps to comply with the
    order, the judge entertaining a contempt motion generally retains some
    discretion to decline to make a finding of contempt. As well, a judge may
    properly exercise his or her discretion to decline to impose a contempt finding
    where it would work an injustice in the circumstances of the case:
Carey
,
    at paras. 36-37.

[46]

As a procedural matter, the party seeking a
    finding of contempt must clearly specify the act or omission that constitutes
    the contempt. The usual requirement is that the notice of motion set out the
    particulars of the alleged contempt:
Bell ExpressVu Limited Partnership v.
    Corkery
, 2009 ONCA 85, 94 O.R. (3d) 614, at paras. 17, 20 and 42-45;
Rocca
    Dickson Andreis Inc. v. Umberto Andreis
, 2013 ONSC 5508, 111 W.C.B. (2d)
    587 (Div. Ct.), at para. 20; and
Dare Foods (Biscuit Division) Ltd. v. Gill
,
    [1973] 1 O.R. 637 (H.C.), at p. 639.

V.

APPLICATION OF THE GENERAL PRINCIPLES

A.

Framing the key issue in dispute

[47]

There is no dispute that NEC knew about and
    understood the Order. On his examination, Mr. Renzo Belluz, a principal of NEC
    and a practising planning lawyer, acknowledged that he had read the Order and
    understood what it required NEC to do. Further, the evidence clearly shows that
    NEC retained MPlan to prepare and file the report on its behalf. As a result,
    the filing of the MPlan Report with the Town certainly was an intentional act
    by NEC. As acknowledged in MPlans filing letter of December 6, 2019, the MPlan
    Report served as NECs input to the Consent Application, as well as a review
    of the IBI Report.

[48]

The key issue then boils down to whether the
    filing of the MPlan Report was a breach of para. 3(b) of the Order that
    required NEC to provide all reasonable cooperation to obtain [the] consent
    sought by McDonalds from the Town pursuant to the
Planning Act
.

[49]

That is the issue I intend to address in the
    balance of these reasons. Before doing so, I wish to address two issues raised
    by the parties.

[50]

First, in its factum McDonalds points to
    conduct by NEC other than the filing of the MPlan Report that it alleges
    disrupted the Consent Application process, such as delays by NEC in responding
    to communications by McDonalds and NECs refusal to comply with simple
    requests from McDonalds and the Town. Apart from the fact that McDonalds did
    not plead in its notice of motion that such conduct amounted to acts of
    contempt, in my view the conduct did not materially affect the prosecution of
    the Consent Application. Notwithstanding McDonalds own delay of close to 10
    months in prosecuting the Consent Application, the reality was that by early
    November 2019 Town staff had advised McDonalds that they were prepared to move
    forward with the Consent Application, which had been placed in the priority
    queue for circulation.

[51]

Second, on its part NEC asserts, by way of a
    defence to the contempt motion, that no Lease existed after March 2018, following
    the expiry of 21 years from the commencement of the Lease, with the result that
    the contempt motion is moot. However, as of December 6, 2019, when NEC filed
    the MPlan Report, the Consent Application was very much alive and before the
    Towns Committee of Adjustment for consideration. The MPlan Report, which
    purported to provide the Committee of Adjustment with NECs input on the
    Consent Application, did not take the position that the Lease was at an end and
    therefore the Committee of Adjustment should or could not consider the Consent
    Application. Instead, NEC took the position that the Consent Application could
    be supported, subject to conditions set out in the MPlan Report. Given that
    position, I do not consider it necessary to determine what appears to be a defence
    constructed after-the-fact in response to the contempt motion and which is
    inconsistent with the position NEC took in the MPlan Report.

[52]

Accordingly, the balance of these reasons will
    focus on what I regard as the determinative issue, namely: whether NECs filing
    of the MPlan Report was a breach of para. 3(b) of the Order.

[53]

I will proceed with some caution. Although
    consideration of the Consent Application by the Committee of Adjustment has
    been deferred, the application remains alive. Consequently, I will decide the
    contempt motion but in a manner that recognizes the future conduct of the
    Consent Application lies within the jurisdiction of the Committee of Adjustment.

B.

The positions of the parties

[54]

McDonalds takes the position that by filing the
    MPlan Report, NEC directly opposed the Consent Application. While the MPlan
    Report nominally supported the Consent Application, by including conditions for
    granting consent approval the report effectively opposed the relief sought by
    McDonalds.

[55]

McDonalds contends that by retaining MPlan to
    prepare and file the Report, NEC directly and deliberately hindered the Consent
    Application in breach of the Order or, alternatively, acted in a manner
    indifferent, reckless or willfully blind to conduct carried out in violation of
    the Order.

[56]

In response, NEC submits that the Order did not
    prohibit it from filing the MPlan Report. The IBI Report contained errors and
    material omissions that the MPlan Report sought to correct. As well, the MPlan
    Report contains planning reasons and explanations to the Committee of
    Adjustment as to how the Consent Application could be approved.

C.

Analysis

The context in which to assess the
    allegations of contempt

[57]

Section 19.10 of the Lease stipulates that it is
    subject to the
Planning Act
. In considering the Consent Application,
    the Committee of Adjustment will consider the renewal of the Lease in the
    context of the various public planning instruments and policies in effect. Town
    staff pointed this out to McDonalds in its March 21, 2018 communication that
    requested McDonalds to file a concept plan, together with a Planning Justification
    Report.

[58]

Some 17 months after the Town had made its
    request, McDonalds sought to satisfy it by filing the IBI Report. McDonalds
    did not provide NEC with the report for review before submitting it; NEC
    received a copy of the report the day before its filing. The IBI Report went
    into great detail about the implications of the renewal of the Lease for
    planning policies contained in instruments issued by various levels of
    government.

[59]

Three aspects of the IBI Report are of
    particular relevance to the contempt motion:

(i)      The Consent Application signed by NECs representative
    referred simply to a consent for a long term lease for a McDonalds
    Restaurant. The February 1, 2018 covering letter from Dentons indicated that
Planning
    Act
approval was sought for the two ten-year options to extend under the
    Lease. The IBI Report indicated that consent was being sought for the two
    renewal periods. The IBI Report did not disclose that the Order only renewed
    the Lease for the first 10-year renewal term;

(ii)     The IBI Report included a sketch, Figure 4-1, that outlined
    in red the demised premises that are subject to the proposed extension of the
    Lease. The report states that the proposed extension of the existing lease
    area would occupy approximately 7% of the total site area, and does not include
    vehicular or pedestrian access points to external roads. The area covers the
    existing McDonalds restaurant building, immediately adjacent walkway and
    landscape areas, the existing drive through lane, a small portion of the
    westerly internal drive aisle, and two accessible parking spaces. This point
    is repeated in the reports conclusion, which states that [t]he spatial extent
    of the lease is based on existing and approved development on the subject
    lands, which permits the stand-alone McDonalds restaurant; and

(iii)     The IBI Report emphasized in several places that
the Consent Application and the Lease would not prevent
    growth and development from occurring on the NEC Property
. For example, s.
    5.1.1. of the IBI Report stated that [t]he area of the lands not subject to
    the proposed extension of the existing lease provides sufficient space and
    frontage for phased or complete development/re-development in the future, should
    that occur.

[60]

On its face, the filing of the MPlan Report was
    NECs attempt to draw to the Committee of Adjustments attention certain
    aspects of the Consent Application that it thought affected its interest as
    owner of the Property, of which the demised premises formed only a small part.
    The MPlan Report stated that it intended to provide NECs input to the
    Consent Application, comment on the IBI Report, and respond to requests by Town
    staff that it confirm it was aware of and supported the Consent Application.

[61]

The Committee of Adjustment has not denied the
    Consent Application; it has deferred considering the application until the
    parties provide it with requested clarification.

[62]

That is the context in which McDonalds allegation
    that NEC has breached the Orders requirement that NEC provide all reasonable
    cooperation must be assessed.

[63]

I shall now consider McDonalds allegation that by
    filing the MPlan Report NEC breached para. 3(b) of the Order.

First allegation: The MPlan Report opposed
    the Consent Application

[64]

McDonalds alleges that the MPlan Report is
    explicitly contrary to the Consent Application because it does not support the
    application. I am not persuaded by that submission. A plain reading of the
    MPlan Report reveals that it supports a consent application, a point
    acknowledged on cross-examination by Mr. Crough from IBI. However, the MPlan Report
    proposed three conditions of approval. As I will explain in the next few
    paragraphs, I conclude that NEC had a legitimate interest in proposing the
    conditions of approval and by doing so did not breach its obligation to provide
    all reasonable cooperation.

Second allegation: The MPlan Report improperly proposed a temporal
    limit on the consent

[65]

McDonalds next alleges that the MPlan Report is
    explicitly contrary to the Consent Application because it proposed that consent
    approval be limited to the initial 10-year renewal period, not to the two
    10-year lease renewal options contained in the Lease. While it is true that
    NECs proposal to limit consent approval is inconsistent with McDonalds
    application to obtain approval for the two renewal periods, NECs proposal does
    not amount to a breach of para. 3(b) of the Order. Since the Order only
    declared that the Lease had been renewed for the first 10-year renewal term,
    NECs obligation to provide reasonable co-operation under para. 3(b) of the
    Order only extended to an application that sought approval for the first renewal
    period sanctioned by this court.

Third allegation: The MPlan Report improperly proposed a
    geographical limit on the consent

[66]

McDonalds alleges that the MPlan Report is
    explicitly contrary to the Consent Application by proposing that any consent
    provided be geographically limited in a manner that conflicts with McDonalds
    rights under the Lease. This allegation has two parts.

[67]

The first part of the allegation asserts that one
    condition of approval proposed by the MPlan Report would modify the area to
    which any consent would apply to ensure that NEC could redevelop the rest of
    the Property in accordance with applicable planning intensification policies
    and plans. It is true that the MPlan Report proposed such a modification, but the
    modification was more spatially favourable to McDonalds than that contained in
    the IBI Report and was consistent with the extent of the demised premises under
    the Lease.

[68]

Over the years, the Lease had undergone several
    amendments that expanded the size of the demised premises, in large part to
    enable McDonalds to expand the restaurants drive-through. Under the Lease,
    the demised premises were L-shaped. The IBI Report proposed, in Figure 4-1, that
    the lands for which consent be given track the L-shape of the demised premises.

[69]

The MPlan Report proposed that consent approval
    be given to a larger, rectangular area of the Property that would include the
    L-shaped demised premises, together with additional parts of the Property. The
    MPlan Report contended that the larger, more regular shape of the area, to
    which consent approval should apply, would facilitate the orderly development
    of the balance of the NEC Property. To be clear, NEC was not proposing that
    consent approval be given to an area smaller than the demised premises under
    the Lease. Quite the opposite. NEC proposed that consent approval be given to
    an area larger than the demised premises. In those circumstances, I am not
    persuaded that such a proposal amounted to a failure to provide all reasonable
    cooperation required by para. 3(b) of the Order.

[70]

The second part of the allegation asserts that NECs
    proposal that consent approval should not apply to the No Build Zone provisions
    of the Lease was contrary to the Consent Application and a breach of the Order.
    Article XXII of the Lease deals with common areas. Sections 22.01 to 22.04 of
    the Lease allow McDonalds, and its customers, the right to use the parking
    areas and other outdoor common areas of the shopping plaza and prohibit NEC
    from building on any part of the common areas shown with hatch marks on
    Schedule E-4 to the Lease. The hatched area constitutes a significant portion
    of NECs Property.

[71]

The MPlan Report proposed that consent approval
    not apply to the No Build Zone Lease provisions as those provisions sterilize
    the NEC property and therefore do not meet the Planning Act requirements
    referred to above. The condition is intended to ensure that consent to the 1
st
renewal term does not freeze development on the retained lands and removes any
    restriction that would otherwise prevent development from occurring in a phases,
    with the south west corner of the property potentially be redeveloped last [
sic
].

[72]

McDonalds alleges that this proposal in the
    MPlan Report is contrary to the Consent Application. I am not persuaded that it
    is. First, the Consent Application, the Dentons covering letter, and the IBI
    Report did not make any mention of the Leases No Build Zone provisions. It is
    difficult to see how the MPlan Reports proposal could be inconsistent with a
    matter that was not disclosed by McDonalds in its Consent Application. Indeed,
    it is not clear from the record why the IBI Report failed to address the
    implications of the Consent Application for the Leases No Build Zone provisions.

[73]

Further, the MPlan Reports proposal is
    consistent with the numerous representations made by the IBI Report that approval
    of the Consent Application would not prevent growth and development from
    occurring on the rest of the Property.

[74]

Finally, the Leases renewal terms are subject
    to the
Planning Act
. McDonalds is not entitled as of right to consent
    approval under s. 50(3)(f) of the
Planning Act
. McDonalds must
    demonstrate to the Committee of Adjustment that the consent it seeks is
    consistent with the planning principles relevant to the granting of such
    consent. Within two months of the filing of the Consent Application, Town staff
    clearly signalled the need for McDonalds to provide a concept plan and
    planning justification, which in part would address the impact of any consent
    approval on the future development of the remainder of the Property.  NEC had a
    legitimate interest in ensuring that the Committee of Adjustment was aware of
    provisions of the Lease, such as the No Build Zone provisions, that could
    impact such future development.

[75]

Accordingly, I conclude that the three
    conditions of approval proposed in the MPlan Report reflected legitimate
    concerns of NEC, as owner of the remainder of the Property, about relevant
    issues that McDonalds had not identified in its Consent Application. On their
    face the proposed conditions were not designed to defeat the Consent
    Application, but to support the granting of consent approval that took into
    account NECs legitimate concerns. As a result, I do not see the content of the
    MPlan Report, including its proposed conditions of approval, as constituting a
    breach by NEC of its obligation to provide all reasonable cooperation under
    the Order.

Fourth allegation: The mere filing of the
    MPlan Report breached the Order

[76]

McDonalds advances one final argument. It
    contends that the mere filing of the MPlan Report constituted an act of
    contempt because it resulted in the Committee of Adjustment deferring
    consideration of the Consent Application. I am not persuaded by this
    submission. Para. 3(b) of the Order did not sanction a process in which
    McDonalds was permitted to proceed with its Consent Application on a kind of
ex
    parte
basis, with no ability for the landowner, NEC, to raise legitimate planning
    issues or point out inaccuracies in McDonalds application. The evidence
    discloses that at various points NEC sought to provide some input into the
    application but was rebuffed by McDonalds. In those circumstances, it is
    understandable that NEC would want to place before the Committee of Adjustment
    information it thought relevant to a complete consideration of the Consent Application
    and its approval on a basis that was fair to the legitimate interests of both
    tenant and landlord. In the circumstances, I do not regard NECs filing of the
    MPlan Report as a breach of para. 3(b) of the Order.

D.

Conclusion

[77]

By way of summary, I am not satisfied that
    McDonalds has established, beyond a reasonable doubt, that NECs filing of the
    MPlan Report constituted a failure by NEC to provide all reasonable
    cooperation to obtain
Planning Act
consent.

[78]

Consequently, I dismiss McDonalds contempt
    motion.

VI.

NECS CROSS-MOTION

[79]

I have treated the relief sought by NEC in
    paras. (a) through (d)(ii) of its notice of motion as forms of defence to McDonalds
    contempt motion. As I have been able to decide the contempt motion on other
    grounds, it is not necessary to consider those requests for relief by NEC.

[80]

In para. (d)(iii) of its notice of motion NEC
    seeks further explanation of the meaning of para. 3(b) of the Order. As a
    single judge, I cannot vary the order made by a panel which, in effect, is the
    nature of NECs request. In any event, the Order is clear and speaks for
    itself; no further explanation is required.

[81]

Accordingly, I dismiss NECs motion.

VII.

DISPOSITION

[82]

For the reasons set out above, I dismiss the
    motions brought by McDonalds and NEC.

[83]

Should any party decide to seek costs of the
    motions, it may file brief (no more than 7 pages) cost submissions within 10
    days of the release of these reasons. The party against whom costs are sought
    may file brief (no more than 7 pages) responding submissions within 10 days
    thereafter.

David
    Brown J.A.





[1]

Planning
    Act
, s. 50(3): No person shall convey land by way of a deed or transfer, or
    grant, assign or exercise a power of appointment with respect to land, or
    mortgage or charge land, or enter into an agreement of sale and purchase of
    land or enter into any agreement that has the effect of granting the use of or
    right in land directly or by entitlement to renewal for a period of twenty-one
    years or more unless,



(f) 
    a consent is given to convey, mortgage or charge the land, or grant, assign or
    exercise a power of appointment in respect of the land or enter into an
    agreement in respect of the land



[2]
The
    case law on this issue is sparse. In
Peel Financial Holdings Ltd. v. Western
    Delta Lands Partnership
, 2003 BCCA 551, [2003] B.C.W.L.D. 890, at paras.
    11-17, a single judge of the British Columbia Court of Appeal relied on the
    provisions of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77, to conclude
    that he had the jurisdiction to hear a contempt motion to enforce an order made
    by a single judge of the Court of Appeal.



[3]
Pursuant to the terms of the Lease and a 2015 Second Amending
    Agreement.


