



COURT OF APPEAL FOR ONTARIO

CITATION: Foley v. St. Marys (Town), 2016 ONCA 528

DATE: 20160704

DOCKET: C61268

Pepall, Tulloch and Pardu JJ.A.

BETWEEN

Lynn Foley and Colleen Foley

Applicants

(Appellants)

and

The Corporation of the Town of St. Marys

Respondent

(Respondent)

Martha Cook, for the appellants

Timothy J. Hill, Eileen P. Costello and Meghan A. Cowan,
    for the respondent

Heard: June 13, 2016

On appeal from the judgment of Justice D.R. Aston of the
    Superior Court of Justice, dated October 9, 2015.

ENDORSEMENT

Background

[1]

This appeal concerns a municipal heritage designation of a landmark
    commercial property located in the downtown core of St. Marys, Ontario.

[2]

In 1884, a two-storey brick and stone commercial building with a clock
    tower was constructed at 135 Queen Street East in St. Marys for a local
    jeweller. For over a century, the building was home to the family jewellery
    shop. In keeping with its purpose, the shops interior contained walnut
    showcases, counters, mirrors and a tall wall clock. These interior features are
    stated to be original and some are referenced in an 1884 St. Marys newspaper
    article.

[3]

In 2004, the appellants, Lynn Foley and Colleen Foley, purchased the
    property from the family jewellers and leased it until 2010.

[4]

In the fall of 2007, the respondent, the Corporation of the Town of St.
    Marys (the Town), wrote to the appellants to introduce the possibility of a heritage
    designation. The Town subsequently contacted them to ask whether they had an
    interest in having the property designated as a heritage building, as it was
    unique and historic. The Town representative spoke about the heritage
    designation possibility with Mr. Foley, who advised that he was not interested
    in participating in the process. The Town later advised that they planned to
    proceed without the appellants support.

[5]

By letter dated January 4, 2008, the Town attempted to provide formal
    written notice to the appellants of its intention to pass a bylaw designating
    the building as a heritage building. Although the street address was correct,
    the last number in the appellants postal code was not (the correct number was
    9 instead of 7). Despite the fact that the notice was not returned to the Town,
    the appellants say that they never received it.

[6]

The appellants did admit to seeing the Towns notice of intent to designate
    that was published in the newspaper in accordance with the provisions of the
Ontario
    Heritage Act
, R.S.O. 1990, c. O. 18 (the 
OHA
). The Town did not
    receive any objections to the designation.

[7]

On February 27, 2008, the Town passed bylaw No. 14-2008, which
    designated the appellants property a heritage building. The designation
    included the original exterior and interior heritage attributes. The latter
    consisted of the walnut showcases, counters, mirrors and the wall clock. The Town
    wrote to the appellants on March 5, 2008 advising them of the designation. The
    designation was also reported in the local newspaper, on March 8, 2008.

[8]

In August 2009, the appellants successfully applied for, and received,
    municipal heritage funding from the Town based on the heritage designation. In
    their application, the appellants noted that the property was the one building
    in St. Marys that had remained virtually unchanged, both inside and out since
    1884.

[9]

The appellants again successfully applied for additional heritage
    funding from the Town in October 2009. In total, the appellants received
    $13,000 from the Town, a significant sum for St. Marys in this regard.

[10]

On December 2, 2009, the Town registered the heritage designation bylaw
    on title to the appellants property in accordance with the provisions of the
OHA
.

[11]

In early 2010, Mr. Foley attended a Town council meeting where he was
    presented with a designation plaque, which noted the buildings unique original
    exterior and interior features.

[12]

While the buildings features were in keeping with its 19
th
and 20
th
century purpose as a jewellery store, they proved not to be
    so popular in June 2010, when the appellants listed the property for sale. The
    appellants received little interest from their listing and placed the blame on the
    heritage designation of the interior features.

[13]

Correspondence ensued between the appellants and the Town. On September
    6, 2013, the appellants solicitor wrote to the Town complaining that his
    clients had not received the Towns correspondence enclosing the original
    notice of intention to designate and that they were unaware that the Town had
    intended to designate items of personal property.

Notice of Application

[14]

Ultimately, the appellants commenced court proceedings and issued a
    notice of application on March 30, 2015. The notice of application was styled
    as an: APPLICATION UNDER section 273 (1) of the
Municipal Act, 2001
,
    S.O. 2001, c. 25.

[15]

The appellants applied for an order quashing the bylaw for illegality
    and, in the alternative, severing those parts of the bylaw that purported to
    designate the interior features, fixtures and chattels of the building. They
    also sought interlocutory injunctive relief and damages for unlawful
    interference.

[16]

The notice of application stated that:

[P]ursuant to s. 273 (1) of the
Municipal Act, 2001
,
    S.O. 2001, c. 25 as amended, this Honourable Court may quash a by-law of a
    municipality in whole or in part for illegality.

[17]

In addition to s. 273 of the
Municipal Act, 2001
, the
    appellants also relied on s. 101 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43;
rr. 14, 38 and 39
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194; and ss. 26,
    29, 32 and 33 of the
OHA
.

Application Judges Decision

[18]

The application judge dismissed the application. Given the error in the
    postal code, he concluded that the Town could not meet its onus of proving that
    notice was properly given under s. 67 of the
OHA
. However, he found
    that the appellants had actual notice of the notice of designation and failure
    to strictly comply with s. 67 of the
OHA
rendered the designating
    bylaw voidable, and not void
ab initio
as argued by the appellants.

[19]

He then held that the one year limitation period in s. 273(5) of the
Municipal
    Act, 2001
was dispositive of the application to quash. He therefore
    dismissed the application, including the alternative claim to quash the bylaw
    in part by severing all reference to the interior features from the
    designation.

[20]

Having dismissed the application, the application judge stated that
    during the course of submissions, counsel for both sides requested that he
    address the scope of the designation. He acceded to the request. He then concluded
    that the Towns authority to designate was limited to real property including fixtures,
    but  that the walnut showcase, counters, mirrors, and the wall clock, were fixtures.

[21]

The appellants argue that the application judge erred in finding that the
    heritage designation was not void
ab initio
given the lack of notice
    and for concluding that the interior features were fixtures, rather than
    chattels, and that they were therefore real property.

Analysis

[22]

The relevant provisions of the
Municipal Act, 2001
are ss.
    273(1) and (5). They state:

273(1)   Upon the application of any person, the Superior Court
    of Justice may quash a by-law of a municipality in whole or in part for illegality.

(5)          An application to quash
    a by-law in whole or in part, subject to section 415, shall be made within one
    year after the passing of the by-law.

[23]

The application judges conclusion that the one year limitation period
    was dispositive of the appellants application was fully supported by the
    record. The bylaw was passed on February 27, 2008 and the notice of application
    was issued on March 30, 2015.

[24]

The record clearly established that the appellants had knowledge of the
    heritage designation. As noted by the application judge, the appellants concede
    that they were aware of the Towns intention to designate the property as early
    as 2007. They were aware of the notice of intention to pass the bylaw that was
    published in the local newspaper in January 2008. In 2009, they twice applied
    for, and twice received, municipal heritage funding based on the designation
    and in February 2010, at a public meeting, they received a designation plaque
    which referenced both the exterior and interior features of the building. The
    bylaw was also registered on title in 2009. The application judge found that
    they were aware of the designating bylaw (and its specifics) no later than
    August 2009, almost six years before the bringing of the application.

[25]

The application judges conclusion was also fully supported by the law. In
    reaching his determination, he relied on
Re Clements & Toronto
,
[1960] O.R. 18 (C.A.). That decision
    dealt with a largely similar predecessor provision of the
Municipal Act,
    2001
and an application to quash.  A lower court had quashed a bylaw on
    the basis that it was void
ab initio
. Relying on the limitation period
    in the
Municipal Act
, this court overturned the decision due to the
    failure of the applicant to bring the notice of application within one year
    after the passing of the bylaw. It did so notwithstanding the finding that the
    bylaw was void
ab initio
.

[26]

The cases relied upon by the appellants differ from the case under
    appeal. First,
Las Vegas Strip Ltd. v. Toronto (City)
(1996), 30 O.R. (3d) 286 (Ct. J. (Gen. Div.)), affd
    on other grounds (1997) 32 O.R. (3d) 651
, did not involve a request
    for the statutory remedy of quashing a bylaw under the
Municipal Act,
but
    a request for declaratory relief.  As Sharpe J. (as he then was) noted, at
    para. 12, it is clear on the authorities that s. 138 [s. 273(5)s predecessor]
    has no application to a proceeding such as the present for declaratory relief.
    Only cases that sought the statutory remedy of quashing the bylaw pursuant to the
Municipal Act
were caught by the statutory one year limitation.

[27]

Secondly,
Gray v. Oshawa (City)
, [1971] 3 O.R. 112 (H. Ct. J.),
    revd on other grounds [1972] 2 O.R. 856, an expropriation case, similarly
    involved a request for declaratory relief. The trial judge noted that the
    action did not seek to quash the bylaw and therefore the statutory one year
    limitation period was inapplicable.

[28]

To summarize, a party may commence proceedings to quash a bylaw under s.
    273 of the
Municipal Act, 2001
by way of application. Such a
    proceeding is captured by the statutory one year limitation period. Alternatively,
    a party may commence an application or an action for declaratory relief. Such a
    proceeding is distinct from the statutory remedy of quashing a bylaw under s.
    273, and as such, is not captured by the one year limitation period.

[29]

Here, there is no question that this proceeding was framed as an
    application to quash under s. 273 of the
Municipal Act, 2001
. Both the
    title of the proceedings and the enumerated grounds support this conclusion. Accordingly,
    the one year limitation provision applies.

[30]

Moreover, this is not simply a technical analysis. On an application, a
    party need only respond to the case asserted against it. Had declaratory relief
    been sought, a different strategy may have ensued, including the development of
    a more detailed record and a request for a trial of the issue.

[31]

The limitation period contained in s. 273(5) of the
Municipal Act,
    2001
also disposes of the request to quash the bylaw in part by severing
    those portions of the bylaw that purport to designate the interior features.

[32]

The application judge was correct in dismissing the application in full
    on the basis of the limitation period. There is therefore no need to address
    his findings on the scope of the designation.

Disposition

[33]

For these reasons, the appeal is dismissed. As agreed, the appellants
    shall pay the respondent $11,000 in costs, inclusive of disbursements and
    applicable tax.

S.E. Pepall J.A.

M. Tulloch J.A.

G. Pardu J.A.


