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Discretion – Good Faith

Posted on June 9, 2021 | Posted in Construction, Five Liners

Dominus/Cityzen Brampton SWQRP Inc. v. City of Brampton 2020 Ont SCJ

A site plan agreement allowed for a security deposit of $646,000 and gave the City the discretion to release part of it. The developer had done everything other than approximately $50,000 of work. It had not been able to do that because of opposition from neighbouring landowners. The City refused to reduce the security to $50,000, probably because the neighbouring landowners had also sued the City and the developer. The judge noted that the City was wearing two hats: the first as the municipal regulator and the second as the actual owner/user of the development. The court held that the City had exercised its discretion in bad faith. The fact that the City had been sued in its capacity as owner did not give it a right to set off possible future damages against the security deposit obtained in its capacity as municipal regulator.

 

Jonathan Speigel

 

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.

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