Municipality obligated to permit property owners to connect to supply lines

Municipal Law – Development control – Development agreements and conditions

Developer was required by municipality to construct sewer and water infrastructure at its own cost, which infrastructure would ultimately connect to existing municipal system. Pursuant to subsequent development agreement (DA), owners of “benefiting properties” would be required to enter into agreement with developer for sharing of cost of infrastructure before they could connect to it. Developer paid $255,953.44 to construct required extension of trunk sanitary sewer and watermain, and ownership of it was transferred to municipality. Municipality installed sewer and water lines to accommodate homes in nearby area, and they were connected to extension constructed by developer without any cost-sharing requirement apart from municipality’s costs. Developer brought action against municipality for damages for breach of contract or for restitution. Action dismissed. Interpretation of provision in DA that promoted sensible result was that neighbouring developers, not property owners, were obliged to enter into cost-sharing agreements with developer. Central purpose of DA was to impose all costs of sewer and water infrastructure on developer, because that was consistent with official plan, whose objective was that such expense be incurred by developers rather than municipality. Although not specifically required by official plan, municipality followed common practice that other developers who might subsequently benefit from such “front-end” costs would be required to contribute to them. Provision restricted requirement of cost-sharing agreement to specific situation: only if infrastructure built by developer serviced or aided in development of adjoining lands. Dispute resolution mechanism in DA supported this interpretation, since other developers could be expected to make use of this mechanism whereas individual property owners could not. Further, s. 55 of Public Utilities Act was relevant to interpretive exercise, since municipality had obligation to permit individual property owners to connect to line of supply of public utility.

MAC 5 Corp. v. The Corporation of the City of Belleville (2020), 2020 CarswellOnt 629, 2020 ONSC 440, Hurley J. (Ont. S.C.J.).

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