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OMB Awards Costs Against Residents Group in Aggregate Proceeding

Nov 13, 2015

In a decision by Vice-Chair Zuidema, dated 5 November 2015, [see decision here] the Ontario Municipal Board (the “Board”) issued a cost award of $110,000 against a residents association in favour of Preston Sand and Gravel Company (“Preston”).  In its decision, the Board found that the conduct by Concerned Residents Association of North Dumphries (“CRAND”) at a hearing on the merits [see decision here] was egregious and deserving of the award against it, based on several grounds under the Board’s Rules of Practice and Procedure (the “Rules”).

Hearing on the Merits

Prior to the commencement of the hearing on the merits, CRAND requested an adjournment on the same day that its expert witness statements were due, pursuant to the the Board’s procedural order.  The adjournment was denied and CRAND failed to deliver its witness statements.  

On the first day of the hearing, CRAND brought a motion to file an expert witness statement from a toxicologist.  In dismissing the motion, the Board found that counsel did not adequately explain why CRAND failed to alert the Board or other parties in advance that the witness statements would not be filed when due and that CRAND would be seeking leave to file them at a later date.

Subsequent to the Board issuing its motion decision, counsel for CRAND withdrew on the basis that he believed the Board had lost confidence in him.  At the time of his withdrawal, counsel expressed concern that if CRAND was required to proceed without counsel, a serious miscarriage of justice would result.  Against the objections of Preston and the Township of North Dumpfries, the Board granted a two month adjournment for the purpose of allowing CRAND to retain alternate counsel. 

Upon resumption of the proceedings, CRAND’s new counsel brought a motion to remove the Board member on the basis of an allegation of bias.  The Board refused the motion finding that CRAND was attempting to reargue the previous motion and using the bias complaint as a mechanism to delay the hearing.  In its decision, the Board remarked that simply being dissatisfied with a procedural ruling does not establish bias on the part of the decision-maker and noted that CRAND had failed to appeal the Board’s previous motion ruling.  Subsequent to the Board issuing its ruling on the bias motion, counsel asked to be released explaining that his retainer extended only for the motion.

Following the motion, the hearing on the merits proceeded at which CRAND failed to call any expert evidence.  In closing arguments, CRAND’s agent stated that its sole reason for continuing through the end of the case was to preserve its ability to launch an appeal of the Board’s decision.

Divisional Court Proceedings

CRAND brought an application at Divisional Court for an extension of time to file its motion for leave to appeal the Board’s decision with respect to the hearing on the merits. [see decision here] In dismissing the application, the Court found that counsel’s failure to file a timely appeal, due to inadvertence as a result of counsel’s upcoming vacation was an insufficient explanation for the delay.  

In addition, the Court found that CRAND’s application materials focused on a question of fact rather than law.  A question of law is a prerequisite to grounding an appeal of a Board decision to the Divisional Court.
At a subsequent proceeding to determine costs, [see decision here] CRAND argued that it was a public interest litigant deserving of the Court’s discretion to order that the parties bear their own costs.  The Court rejected CRAND’s request, finding that it failed to establish that it was a true public interest litigant without personal, proprietary or pecuniary interest in the outcome of the proceeding.

Board Motion for Costs

Preston brought a motion for over $220,000 in costs against CRAND which was heard after the Divisional Court proceedings concluded.  In granting Preston’s motion for $110,000, the Board found that various actions by CRAND represented conduct cited in the Board’s Rules that may attract a cost award.

Rule 103 provides:

103. Circumstances in Which Costs Order May be Made The Board may only order costs against a party if the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or if the party has acted in bad faith. Clearly unreasonable, frivolous, vexatious or bad faith conduct can include, but is not limited, to:

(a) failing to attend a hearing event or failing to send a representative when properly given notice, without contacting the Board;

(b) failing to give notice without adequate explanation, lack of co-operation with other parties during prehearing proceedings, changing a position without notice to the parties, or introducing an issue or evidence not previously mentioned or included in a procedural order; 

c) failing to act in a timely manner or failing to comply with a procedural order or direction of the Board where the result is undue prejudice or delay; 

(d) a course of conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events; 

(e) failing to present evidence, continuing to deal with issues, asking questions or taking steps that the Board has determined to be improper; 

(f) failing to make reasonable efforts to combine submissions with parties of similar interest; 

(g) acting disrespectfully or maligning the character of another party; and 

(h) knowingly presenting false or misleading evidence.

The first action cited by the Board as conduct that was frivolous and unreasonable attracting costs pursuant to Rule 103(b), was CRAND’s failure to give notice that it would not be calling expert witnesses until Preston concluded its evidence in chief. 

CRAND did not seek to amend its witness list which included experts.  In addition, CRAND did not advise the Board that it wished to scope its issues list which included air quality and planning issues.  CRAND called no expert evidence to substantiate the issues raised.  In the Board’s opinion, CRAND’s conduct required Preston to incur additional expenses to present evidence which might not have been required had CRAND been forthright about its intentions.

The Board also cited Rule 103(c) with respect to CRAND’s failure to comply with the procedural order by not filing witness statements on time, without a reasonable explanation.  When the Board denied CRAND’s motion to serve witness statements late, CRAND allowed its counsel to withdraw from representation which necessitated the adjournment resulting in an undue delay of the proceedings.  The delay in turn caused unacceptable prejudice to Preston. 

With respect to Rule 103(d), the Board cited six motions brought by CRAND throughout the course of the hearing on the merits establishing a course of conduct necessitating unnecessary adjournments.  The Board found that the motions were brought only to delay or frustrate the process.  In addition, the Board found that CRAND’s failure to use the adjournment for the purpose of securing alternate counsel to be an abuse of process because public resources used for the Board’s calendar were lost.

The Board also found that CRAND acted disrespectfully pursuant to Rule 103(g) when its agent texted while one of Preston’s witnesses was giving evidence to specifically address issues raised by CRAND. 

Finally, the Board found that CRAND’s conduct in refusing to disclose the names of  its members, on the basis that there were many scattered all over the county, to be  misleading conduct pursuant to Rule 103(h).  It was eventually disclosed to the Board the CRAND’s total membership numbered seven, of which four were family members of CRAND’s agent.
In reaching its decision, the Board considered whether an award of costs stifles public participation and determined that based on the facts in the case before it, nothing could be farther from the truth.

Author(s): Peter Gross

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