Executive Summary: Key Legal and Evidentiary Issues

• Allocation of responsibility for a $703,340.67 off-site levy under a commercial land purchase agreement between the vendor (Silvera) and purchaser (Glamorgan).
• Proper interpretation of key contractual clauses (including clauses 5.5, 7.11, 8.13 and 11.1) to distinguish subdivision-related servicing costs from development-specific obligations.
• Significance of the City of Calgary’s Off-Site Levies Bylaw and municipal practice in determining whether levies relate to subdivision of the “Original Lands” or to Glamorgan’s specific development project.
• Use of the factual matrix and surrounding circumstances (including the Municipal Government Act and City practice) to resolve apparent tension between broad “off-site levies” wording and development-permit obligations.
• Evidentiary value of expert opinion on municipal development practices and off-site levies in the Established Area of Calgary in clarifying how and when such levies are typically triggered and assessed.
• Impact of both parties’ sophistication and their failure to expressly allocate a known, material levy amount on the court’s objective assessment of contractual intention.

Background and parties

This case arises from a dispute between Glamorgan Landing Estate LP (and its general partner) as purchaser, and Silvera for Seniors as vendor, over who must bear a substantial off-site levy charged by the City of Calgary as a condition for issuing a development permit for a seniors housing project. Silvera, a non-profit seniors housing provider, owned a large parcel of land in Calgary (the “Original Lands”) that it intended to have developed for seniors housing. After obtaining zoning and subdivision approval, it created separate parcels, one of which (the “Lands”) was later sold to Glamorgan. Glamorgan is a real estate development entity controlled through the Spray Group and led by an experienced developer, Brian Stoddard. Silvera’s lead representative was its chief development officer, Lorne Robertson. Both representatives had significant experience in subdivision, land use, and development processes with the City of Calgary. The parties initially explored a partnership or joint-venture structure but ultimately agreed that Silvera would sell the Lands to Glamorgan, with Glamorgan to undertake the actual development.

The transaction and development process

Silvera first advanced the project by moving the Original Lands through the municipal processes needed for development. It obtained zoning and then subdivision approval, which required it to pay for or arrange extensive on-site and near-site infrastructure—such as roads, sidewalks, utilities and other services—to bring municipal services to the edges of the newly created parcels. As part of the subdivision, Silvera was required to enter a Road Cost-Sharing Agreement (RCA) with the City of Calgary dated August 21, 2020, to extend 50th Avenue SW to serve the subdivided lands, and Silvera agreed to share road extension and related costs. Glamorgan, once it became purchaser of the Lands, would later pay its proportionate share of these RCA costs. After rejecting a partnership structure, the parties negotiated an “Agreement of Purchase and Sale” under which Silvera agreed to sell, and Glamorgan agreed to purchase, the Lands for $5,583,600, subject to specified adjustments. The Agreement was executed on January 28, 2021, and closed on February 17, 2021, after conditions were waived. In accordance with common real estate development practice, Glamorgan was allowed to pursue a development permit before it actually obtained title.

The City’s off-site levies regime

The dispute centres on an off-site levy charged by the City under Bylaw 2M2016, the Off-Site Levies Bylaw. The bylaw distinguishes between “Greenfield Areas” and the “Established Area” of Calgary, with different treatment for each. The Lands were in the Established Area. In that area, off-site levies are used to fund water and wastewater treatment infrastructure upgrades necessitated by new population growth. The expert witness, engineer Kris Compton, explained that for projects in the Established Area the City’s current practice since 2016 has been to impose off-site levies at the development permit stage, not at subdivision. While the Off-Site Levies Bylaw and the Municipal Government Act still contemplate that levies may also be imposed in connection with subdivision, in practice the City calculates and charges them when it approves a specific development permit, based on the details of the proposed development. Those details include the number and type of residential units, gross commercial area, and equivalent population per hectare under the bylaw’s formulae.

The development permit application and the levy

On December 11, 2020, Glamorgan applied to the City for a development permit for a seniors housing project consisting of two apartment buildings and an amenity building, totalling about 278 units. On January 15, 2021, the City issued its “detailed team review,” which included a preliminary estimate of the off-site levy that would apply: $703,340.67. That figure was later confirmed as a condition of the development permit issued on July 9, 2021, and released on September 8, 2021. Both parties knew that an off-site levy would apply and, by mid-January 2021, each knew the specific amount that would be charged—before the Agreement of Purchase and Sale was signed. Mr. Stoddard, using his knowledge of the City’s bylaw, had even prepared his own estimate of the levy. Despite the size of the levy (approximately 12.6% of the purchase price), the parties never expressly addressed which of them would be responsible for paying it. There was no evidence of any negotiations or explicit allocation of the levy in their discussions, and neither side relied on parol evidence to support its interpretation; both asked the court to decide based strictly on the contractual wording and the objective factual matrix.

Other development-related financial obligations

While the off-site levy became the focal point of the litigation, the case also described other development-related obligations. First, under the RCA, Silvera had already agreed with the City to share in road extension and related infrastructure costs, and Glamorgan later paid its agreed proportion of those RCA amounts. Second, the City required Glamorgan to upgrade a water main to serve a fire hydrant at a cost of $673,885.70. Glamorgan advised Silvera that, if that charge were payable, it would seek reimbursement from Silvera. Glamorgan ultimately succeeded in separate litigation contesting that charge, so the water main costs did not drive the allocation dispute in this action. Third, Glamorgan paid for driveway aprons and similar works over City sidewalks necessary to serve its project. It did not seek reimbursement for those works from Silvera and accepted them as part of its development obligations. Together, these items illustrated the range of municipal and infrastructure costs associated with bringing the Lands from raw subdivided parcels to a fully permitted, build-ready seniors housing project.

Key contractual clauses and policy-type terms

The core of the dispute was how the Agreement of Purchase and Sale allocated responsibility for off-site levies and related charges. Several clauses functioned like “policy terms” that divided municipal and infrastructure cost risk between vendor and purchaser. Clause 5.5, in the closing provisions, authorized Glamorgan to apply for and pursue the development permit for construction of improvements on the Lands. Importantly, it provided that the purchaser “shall be responsible for all costs associated with the [development permit] Application.” Silvera, as the registered owner, agreed to sign necessary documents to support the application, with Glamorgan indemnifying it for any financial covenants Silvera was required to give to the City. The clause signalled that Glamorgan would bear the costs associated with advancing the specific development permit, while Silvera would cooperate as landowner without assuming those costs. Clause 7.11, in the vendor’s representations and warranties, played a central role. Simplified, it contained three interrelated elements: first, subject to clause 8.13, Silvera represented that at closing there would be no outstanding reserve obligations in respect of the Lands and that Silvera would be responsible for all “Servicing Costs” not specific to Glamorgan’s development; second, it defined “Servicing Costs” broadly to include payments and obligations relating to off-site work or costs, dedications for reserves (or cash-in-lieu), acreage assessments, “off-site levies,” frontage charges, off-site development obligations, contributions to oversized improvements, and other obligations to contribute to or reimburse the vendor, the City, or others for municipal infrastructure costs that would customarily be required as conditions of subdivision approval; third, it stated that Glamorgan would “only be responsible for conditions of the development permit that relate to the Purchaser’s specific development project on the Lands.” The definition of “Servicing Costs” was drafted broadly and expressly included “off-site levies,” which Glamorgan later argued must encompass the disputed levy. However, the definition was textually anchored to obligations “customarily” required by the subdivision authority as conditions of subdivision, i.e., those tied to creation of separate title to the Lands. Clause 8.13, to which clause 7.11 was expressly made subject, reinforced this structure. It provided that, as of closing, the property would be “net lands,” free and clear of all obligations relating to Servicing Costs or any similar amounts payable to the City, except those relating solely to Glamorgan’s development permit. It further stated that the Lands would be free from all off-site development obligations that could have been paid or charged at the time of subdivision and free from obligations to contribute or reimburse Silvera, the City or others for municipal infrastructure. Clause 8.13 acknowledged that, when the subdivision plan creating the Lands was registered, the City did not require off-site levies to be paid by Silvera. As a result, there remained a potential that, at development permit stage, some “non-development related” off-site levies could be imposed. In that event, Silvera was granted an option either to pay such levies from sale proceeds at closing or to reduce the purchase price by an equivalent amount, in which case it would reimburse Glamorgan once Glamorgan showed evidence of having to pay those levies. Finally, clause 11.1 dealt generally with “adjustments,” allocating responsibility for “municipal property and local improvement taxes, rates, utilities, levies and other charges accrued against the Lands” between the parties according to the period before and after closing. This clause used the generic term “levies” in the context of standard real property adjustments, rather than as a specific carve-out for off-site levies triggered by the development permit.

The parties’ competing interpretations

Glamorgan’s position was that the broad language in clause 7.11, especially the express reference to “off-site levies,” made Silvera contractually responsible for the City’s $703,340.67 off-site levy. It argued that this was an ongoing or upcoming levy at the time of the Agreement and that the drafting showed a vendor-side assumption of those obligations. Glamorgan also contended that the levy was not “specific” to its development project but was more properly seen as a general infrastructure cost associated with Silvera’s earlier subdivision and the City’s overall servicing of the area. Silvera argued, in contrast, that the Agreement drew a deliberate line between (a) costs, including any levies, connected to the earlier subdivision process—which it accepted as its own responsibility—and (b) costs and conditions that arose from Glamorgan’s own development permit and its specific seniors housing project, which were allocated to Glamorgan. Silvera relied on the repeated distinction in clauses 5.5, 7.11 and 8.13 between obligations linked to the subdivision that created the Lands and those tied to the purchaser’s particular development. It emphasized that the disputed off-site levy was calculated solely on the basis of Glamorgan’s proposed buildings and unit count, as specified in its development permit application, and therefore fell squarely within Glamorgan’s development-specific obligations.

Use of expert evidence and the factual matrix

The court accepted Mr. Compton’s expert evidence on the City’s off-site levy practices in the Established Area and admitted his opinion after addressing a challenge to his independence. He explained that, since 2016, the practical “trigger” for off-site levies in the Established Area had been the development permit, not subdivision, because levies are best calculated when the precise development is known. However, the bylaw and the Municipal Government Act still preserve the legal possibility of levies being imposed at subdivision. The judge treated this backdrop as part of the factual matrix: the parties, both sophisticated and advised by counsel, operated in a regulatory environment where, in theory, two classes of levies could exist—those tied to subdivision and those tied to a specific development permit—even though the City’s current practice focused on the latter. This context supported reading the Agreement as allocating any subdivision-related or residual off-site levies to Silvera, while leaving Glamorgan to bear levies that flowed directly from the details of its project.

The court’s analysis of contractual interpretation

Applying modern principles of contractual interpretation, the court emphasized that it must give primacy to the words of the contract read as a whole, in light of the surrounding circumstances, while disregarding the parties’ subjective intentions. The judge noted the repeated drafting pattern: Glamorgan is to be responsible for “all costs associated with the [development permit] Application,” and for “conditions of the development permit that relate to the Purchaser’s specific development project,” while Silvera accepts liability for Servicing Costs and similar obligations associated with subdivision and the creation of the Lands as “net lands.” The court read the definition of “Servicing Costs” in clause 7.11, including its reference to “off-site levies,” as aimed at levies and charges that “would customarily be required to be performed or be levied or charged by the subdivision authority as a condition of subdivision approval to create separate title to the Lands.” That qualifying language, together with the cross-reference to clause 8.13, prevented Glamorgan from treating the term “off-site levies” in isolation. The judge found that the disputed levy was not a subdivision-related obligation but was entirely dependent on the nature and scale of Glamorgan’s chosen development—278 units in the specific building configuration proposed in its application. In the court’s view, the “pith and substance” of the key clauses was an allocation of any subdivision-based or residual off-site levies to Silvera and of development-specific off-site levies to Glamorgan.

Outcome and disposition

Ultimately, the court held that the $703,340.67 off-site levy imposed by the City as a condition of Glamorgan’s development permit was specifically tied to Glamorgan’s proposed development project and not to the subdivision of the Original Lands. Under the Agreement of Purchase and Sale, liability for that levy fell on Glamorgan, not on Silvera. The court therefore dismissed Glamorgan’s claim for judgment against Silvera in the amount of $703,340.67. Silvera was the successful party in the action. The judgment did not fix any specific amount of costs payable; instead, the court invited the parties to return if they could not agree on costs. As a result, while Silvera succeeded in having the claim dismissed and avoided liability for the $703,340.67 off-site levy, there was no positive monetary award or quantified costs order stated in this decision in its favour, and the exact total amount of any costs or monetary recovery in favour of Silvera cannot be determined from this judgment alone.