Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on unauthorized above-grade construction without a building permit on contaminated land.

• Compliance with site plan agreement conditions, particularly the requirement for a Record of Site Condition (RSC), was at issue.

• The Town’s enforcement of building code provisions, including stop work and demolition orders, was challenged.

• Respondents argued for continued opportunity to obtain permits rather than immediate demolition.

• Environmental remediation obligations and the adequacy of risk assessment proposals were scrutinized.

• The court considered whether demolition was the appropriate remedy for persistent non-compliance with statutory and contractual obligations.

Facts of the case

The dispute arose from the redevelopment of 599 Kingston Road West, Ajax, Ontario, a property historically used for automotive sales and repair, resulting in significant soil and groundwater contamination. In 2015, 1940475 Ontario Inc. (“194 Corp”) acquired the property with the intention, alongside First Avenue Properties, to construct a four-storey mixed-use building. Over several years, the developers submitted multiple site plan applications and environmental reports to the Town of Ajax, culminating in a Site Plan Agreement (SPA) in July 2021. This agreement required, among other things, the filing of a Record of Site Condition (RSC) with the Ministry of the Environment, Conservation and Parks (MECP) before any above-grade building permit could be issued.

Despite these requirements, First Avenue commenced and continued above-grade construction without the necessary permits and without completing the required environmental remediation or obtaining an RSC. The Town issued a conditional permit only for below-grade work, but inspections were not completed as mandated. Multiple orders to comply and stop work orders were disregarded, and construction continued in violation of both municipal and provincial regulations.

Policy terms and clauses at issue

The SPA’s Condition 31 was central, mandating an RSC prior to any above-ground permit issuance, with limited discretion for below-grade work. The Conditional Building Permit Agreement (CBPA) further reinforced that a full permit would not be granted absent an RSC. The applicable legislation included section 38 of the Building Code Act, 1992, which empowers the court to order compliance or other remedies, including demolition, where construction occurs without proper permits.

Course of events and procedural history

Despite clear contractual and statutory requirements, First Avenue persisted in unauthorized construction, repeatedly ignoring municipal orders and court injunctions. The Town, after multiple warnings and attempts to secure compliance, sought a court order for demolition of all above-grade construction built without a permit. The respondents argued that demolition would be disproportionate and that they should be allowed more time to secure the necessary approvals, especially as they had shifted from remediation to a risk assessment approach for managing contamination.

Court’s analysis and reasoning

The court emphasized the public interest in enforcing building codes and environmental protections, noting that the legislative scheme exists to safeguard health and safety. The judge found that First Avenue’s actions were deliberate and calculated, not the result of unforeseen circumstances. The court rejected arguments that demolition would be unfair or that the Town’s actions were punitive, highlighting the need to deter willful non-compliance and maintain respect for the law. The judge also noted that the risk assessment approach proposed by First Avenue was not part of the original agreement and did not excuse the ongoing breaches.

Ruling and outcome

The Ontario Superior Court of Justice granted the Town’s application, ordering the demolition and removal of all above-grade construction carried out without a building permit. The court found this to be the only just and appropriate remedy given the persistent and egregious non-compliance by First Avenue. The Town of Ajax was the successful party. The decision did not specify an exact monetary award, but the demolition order itself represents the substantive remedy granted in favor of the Town. If any costs or further monetary awards are to be determined, the decision does not provide those figures.