The Town of Niagara-on-the-Lake and the resident group SORE have been denied recovery of legal costs totalling more than $600,000 in a dispute over plans from 2018 to implement a heritage designation for the Rand Estate.

The town and the group Save Our Rand Estate (SORE) had sought substantial compensation for legal fees incurred in the dispute with Solmar (Niagara 2) Inc. and Two Sisters Resorts Corp., but on Monday the Ontario Land Tribunal rejected all of the arguments put forward.

The town was seeking compensation totalling more than $246,000 while SORE sought $365,000 in costs.

Lord Mayor Gary Zalepa said via email on Tuesday that he “has not yet had a chance” to read the decision and would comment after fully reviewing it.

In his detailed 57-page ruling, tribunal vice-chair David Lanthier conceded it is rare for the tribunal to award costs.

He dismissed the arguments of the town and SORE that developer Benny Marotta’s companies had behaved in a way that would require them to provide financial compensation.

Lanthier emphasized that to order repayment of legal costs, the town and SORE had to convince the tribunal that there was misconduct on the part of the developer – but he summarily rejected all the arguments put forth.

He acknowledged the arguments between the parties sometimes often were “heated” and acrimonious, but said the tribunal process is much different than the adversarial “winner and loser” approach common in courtroom litigation.

The ruling favours the developer and is critical of some of the positions and arguments put forth by the town and SORE.

One main argument was that, after about three years of preparation, in 2021 Marotta’s companies withdrew their objections to a town plan to designate the historic estate just five weeks before a planned Conservation Review Board hearing.

The town and SORE claimed this was an unreasonable move that amounted to misconduct by the companies, but Lanthier rejected that.

The timing was “are reasonable, legitimate and not an abuse of process,” he said in his decision.

“The fact that the town and (SORE) have expended significant time and expense to get to the point of the withdrawal is, in and of itself, also not relevant.”

It was one of several points on which he ruled against the town and SORE, including: extensive procedural arguments over the “surviving elements of the Dunington-Grubb landscape” attributes; complaints that Marotta’s companies are “overly litigious” and have a history of commencing and abandoning appeals in a way that amounts to an abuse of process; arguments that statements were made that maligned and were disrespectful to the town; and intentional delays by the developer that amounted to “unreasonable, frivolous, vexatious conduct or bad faith conduct.”

“The tribunal will only consider exercising its discretion where it is persuaded that the party against whom costs are sought has demonstrated misconduct that is clearly unreasonable, frivolous, vexatious or in bad faith,” Lanthier wrote in dismissing the case.

Considering the evidence as a whole, he concluded both the town and SORE were “errant in their characterization of the owners, and themselves, within the proceeding. In many respects, the submissions of the town and (SORE) as to costs have adopted a civil litigation viewpoint akin to a proceeding before the courts resting very much upon an assumption that they have emerged as the ‘winners,’ with their time ‘wasted’ in the proceeding.”

He also said the town’s evidence and submissions “belie an authoritative assertion that ultimately their notices of intent to designate the heritage features were absolute and correct. This is misplaced as the owners had the legislated right to exercise their objections to the intended designations.”

He also was critical of all sides for their “entrenched” positions and singled out SORE for its “intent to continue to challenge the owners’ development plans, which include a presumption that (SORE) will utilize its team of experts to determine what form of residential development would be feasible on lands which they do not own, but which may possess heritage attributes.”

After a detailed review of all the evidence, Lanthier said he concluded the Marotta companies’ conduct “was not unreasonable, vexatious, or inappropriate,” as the town and SORE argued.

 “Applying the objective reasonable standard, there is nothing that would lead a reasonable person to conclude that the totality of the owners’ conduct in the proceeding was remarkably unreasonable, unfair or such that it is deserved to compensate” the town or SORE with costs.

 SORE spokesperson Judy McLeod said the group “is, of course, disappointed, but not entirely surprised” by the ruling on costs.

The tribunal rarely awards costs unless conduct is clearly unreasonable, vexatious or in bad faith, she said.

“Both SORE and the town believed that this was one of those rare cases where the conduct of the Marotta companies was egregious enough to merit a costs sanction by the tribunal,” she said.

“The Marotta companies argued that the tribunal did not even have the jurisdiction to award costs and further that SORE was not entitled to costs in any event,” she added.

The tribunal rejected those arguments “but held that the conduct of the Marotta companies did not rise to that rare level of entitling the town or SORE to costs.”

She noted the tribunal said “both the town and SORE received significant costs awards for the failed court challenge by the Marotta group of the same heritage designation bylaws. We will content ourselves with that.”