CFL In Ottawa One Step Closer: Court Says No To Friends And Will We See Appeal?

By Graydon Ebert

Ottawa is one step towards the redevelopment of Lansdowne Park and the return of CFL football to the city. On Monday the Ontario Court of Appeal rejected the appeal of Friends of Lansdowne Inc., a community group, to strike down the by-law passed by City Council in June 2010 which gave approval to the Lansdowne Park partnership with Ottawa Sports and Entertainment Group (OSEG).

This decision was the latest in a long line of court action with Friends of Lansdowne losing at both the Ontario Municipal Board and Ontario Superior Court of Justice before its recent loss at the Court of Appeal.

By the way, here’s a copy of the Court of Appeal decision.

The 3 Big Issues That Were Appealed

The Friends of Lansdowne appeal was based on three grounds:

Issue 1: Unfair Bonus?

They challenged certain aspects of the plan as being against anti-bonusing provisions in the Municipal Act. These provisions prohibit a municipality from providing a bonus to a commercial entity.

The real purpose of this is to prevent municipalities from providing unfair incentives to businesses to come to their municipality or favouring one business over another. The court has said that you look at whether an unfair advantage has been given by the municipality and in doing so you look to both sides of the arrangement to ensure the municipality’s obligations are matched by benefits flowing to it.

The Friends argued at trial that when you look at certain aspects of the plan, the city favoured OSEG. The Court disagreed saying that there were benefits and obligations going both ways. The risk and the reward of the partnership was reasonably balanced between the City and OSEG. That was key.

Issue 2: Bad Faith?

They Friends also alleged that the City negotiated in bad faith. The Court said there was no bad faith. The court had some concerns about the plan negotiation and approval process but when you looked at the plan as a whole, these concerns did not amount to bad faith.

Issue 3: Competitive Bidding

Finally, the Friends argued that the by-law was outside of the City’s jurisdiction because the partnership agreement breached how the City is supposed to buy things. The City has a policy and by-law in place for the purchasing of goods, construction and services. It’s supposed to mark it a competitive process. The policy, though, does allow for a waiver of the competitive bidding process and replacing it with negotiation where there is an absence of competition and there is really only one supplier of the goods or services.

The City relied on that exception believing that the proposal was for land development rather than for the purchase of goods, services or construction and that negotiation was an acceptable replacement for competition because OSEG was the only entity that could bring a sports franchise to the table. The Court declared that the City complied with the law - the negotiation and evaluation of the proposal essentially met the required process under the procurement policy.

Not Surprising Decision

The Court of Appeal’s decision is not surprising. Courts are loathe to quash a by-law without any evidence of illegality or bad faith. It is the municipality’s jurisdiction to decide what is best and court will only encroach on that jurisdiction if the by-law is illegal or if is unreasonable and passed in bad faith.

Is An Appeal Likely?

Probably not.

The Friends can request that the Supreme Court of Canada hear the case. Problem is that Court typically only hears cases of national importance and in areas of unsettled law.

Since this case is not of national importance (except maybe to CFL fans) and does not touch on any areas of unsettled law, it doesn’t seem like this case fits the profile of a case the Supreme Court would hear.

Friends of Lansdowne may be left with no alternative but to live with the Lansdowne Park plan, a plan they have fought hard to defeat both legally and politically.