Coming from the Superior Court’s Mr. Justice T. A Heeney, November 25th of 2022, Strathroy-Caradoc was looking to get a leave to appeal a decision of the Ontario Land Tribunal dating back to July 4th, 2022, stating that the Ontario Land Tribunal had jurisdiction in this matter. The Tribunal also made an interim order requiring Strathroy-Caradoc to issue all permits necessary for the connection to sewage and water services in the identified service area including the Holiday Inn Express hotel, mini storage facility and the new gas station beside the Centre Road Tim Hortons location.
Mr. Justice T. A. Heeney ruled that while he was making no judgment as to whether the Tribunal’s decision was wrong, he concluded that Strathroy-Caradoc’s submission had merit, and that the information needed to fulfill the appeal in this perspective had been met. The leave to appeal the decision of the Tribunal was granted. Currently servicing is being allowed for only the three permits mentioned. Strathroy-Caradoc Mayor Colin Grantham has said to myFM that Council will be discussing what’s next in this ordeal at their meeting next Monday.
Here is a timeline from what myFM has learned.
– This servicing agreement came into effect on October 1st, 2003. Back then, Adelaide Metcalfe wished to provide water and sewage to that area along a highway within their boundaries, but did not have services in that area. Strathroy-Caradoc required a second water transmission line themselves, and had the option of either twinning an existing line, or building a new line, which could be shared with Adelaide Metcalfe.
– After 3 years of extensive negotiations, both communities entered into the agreement. Thus Strathroy-Caradoc would provide sewage treatment and potable water supply to Adelaide Metcalfe for specified lands in the service area, for a term of 10 years commencing October 1st, 2003, with an option for a 5-year renewal term, on conditions specified in the agreement, totalling 15 years which brought the agreement to renegotiating status in 2018. Following that, both Municipalities agreed to a further extension of the agreement for a term of 6 months, up to and including March 31st, 2019.
– They continued extensive negotiations after that with the hopes of reaching a new deal, but were unsuccessful, but they both kept operating “within the spirit of” the agreement, while negotiations were ongoing well into 2022, eventually leading into Adelaide Metcalfe on April 19th, 2022, delivering a Notice of Request for Arbitration to the Tribunal.
– Shortly thereafter, Adelaide Metcalfe brought a motion before the Tribunal seeking an order confirming that the Tribunal had jurisdiction to deal with the issues raised, and for an interim order requiring Strathroy-Caradoc to continue to provide services, and to allow new connections for properties in the service area.
– On April 28, 2022, Strathroy-Caradoc commenced an application before the Superior Court seeking a declaration that the agreement was no longer in force, coupled with a request for injunctive relief. That matter came before Garson J. on May 27, 2022. In his endorsement, he granted the adjournment request of Adelaide Metcalfe, in order that the Tribunal could decide whether it would be assuming jurisdiction. It is not clear on the material filed on this motion what the present status of that proceeding is, but it ultimately has no relevance to the present motion for leave to appeal.
– Adelaide Metcalfe’s motion before the Tribunal was heard on June 28, 2022 by David L. Lanthier, Vice Chair. In its decision, dated July 4, 2022, the Tribunal ruled that it had jurisdiction to hear and resolve the issues raised in the Notice of Request for Arbitration. It also made an interim order requiring Strathroy-Caradoc to issue all permits necessary for water and sewage connections to be provided to three specified developers in the service area.
– The term of the agreement, as extended, expired on March 31st, 2019. The date that Adelaide Metcalfe gave “notice” that negotiations on a new agreement were to commence was not evident in the materials filed, but since the agreement provided that such negotiations “shall commence no later than” 6 months before the end of the term, the latest date that the notice from Adelaide Metcalfe could have been delivered would have been September 30th, 2018.
– At that point, either party had the right to request arbitration by the Tribunal, and that request had to be made within one year from the date of notice by Adelaide Metcalfe, so the latest the request for arbitration could have been delivered would have been September 30th, 2019.
– The request for arbitration was not delivered until April 19th, 2022, more than 30 months out of time, and since no agreement to continue was reached by the end of the extended term, and neither party requested arbitration within one year after the notice from Adelaide Metcalfe, Strathroy-Caradoc was at liberty to terminate the services provided under the agreement….HOWEVER
– the Tribunal concluded that the parties did not intend the summary termination of the agreement. It also concluded that the agreement of the parties to be bound by the decision of the Tribunal on an arbitration, contained in an agreement that had, by its own terms, expired more than three years before arbitration was requested, and thus gave jurisdiction to the Tribunal to hear and determine the issues raised in the request for arbitration.
– Strathroy-Caradoc submitted that the Tribunal made extricable errors of law by ignoring the express words of the agreement; by incorrectly considering surrounding circumstances subsequent to entering into the agreement. Extricable errors are when there are errors in the construction and interpretation of agreements, such as by failing to read the contract as a whole, straining to find ambiguity where none exists, and deviating significantly from the text of the clause.
– Justice Heeney stated that he found there was great merit in Strathroy-Caradoc’s submission that it flies in the face of the clear, unambiguous words of the agreement itself; that the Tribunal failed to consider relevant evidence as to surrounding circumstances at the time the agreement was originally executed; that the Tribunal allowed its interpretation of the clause to be overwhelmed by evidence of surrounding circumstances that occurred long after the agreement was executed, and in particular the events since 2018 or so; that it failed to follow a pragmatic and common sense approach to contract interpretation; and that it erred in its application of appellate jurisprudence.
– Justice Heeney went on to say while he was making no judgment as to whether the Tribunal’s decision was wrong, he concluded that the information needed to fulfill the appeal in this perspective had been met. The leave to appeal the decision of the Tribunal was granted.
