A property owner can often feel helpless when a municipality starts telling them what to do with their land or when a municipality leaves them out of a development project. This week’s case commentary will look at two important cases involving municipalities that were found to be acting in contravention of their respective governing legislation.
When enacting a new by-law that would have a significant impact on the well-being of a property owner, the municipality must act in good faith and also ensure that they do so in an open and transparent way that is in accordance with provincial legislation. If not, a by-law can be quashed through judicial review. The following cases are recent examples of where the court found that the actions of the municipalities were not proper and, as a result, the by-laws were both quashed.
ULTRA VIRES BY-LAWS
The first case that resulted in the court quashing a municipality’s bylaw was Clublink v Town of Oakville, 2018 ONSC 7395. Justice Morgan ultimately found that the by-law was ultra vires and that the municipality acted in bad faith.
Clublink owns Glen Abbey, which is a prestigious golf course located in Oakville that was designed by Jack Nicklaus in 1976. Since that time, it has been an important site for many major golf events, including playing host for the Canadian Open multiple times. Clublink is now proposing to transform a portion of Glen Abbey into residential housing, but the Town of Oakville (the “Town”) is opposed to this project and has moved to block it.
Justice Morgan points out that the overarching controversy between the parties relates to the future of the Glen Abbey property; however, he also notes that the overall controversy is not what the court had been asked to address. In fact, the court had been asked to focus on the question of whether the particular by-law in issue ought to be quashed, as requested by Clublink.
Clublink had submitted a redevelopment plan for transforming Glen Abbey golf course into residential housing. Immediately after Clublink had submitted its plan, Oakville’s Town Council approved a Cultural Heritage Landscape Conservation Plan (the “Conservation Plan”), as well as five Cultural Heritage Landscape by-laws (the “CHL By-laws”) to uphold the authority of the Conservation Plan. This was done on the heels of the Town’s By-Law 2017-138, enacted on December 2017 (the “Designated By-law”), which made Glen Abbey, along with a neighbouring property, a cultural heritage property under s. 29 of the Ontario Heritage Act, RSO 1990, c. 0.18 (“OHA”). The combination of the by-laws effectively prevented Clublink from making any changes to the services it provides, including preventing Glen Abbey from undergoing the proposed changes to transform sections of the golf course into residential housing.
Clublink sought to quash the CHL By-laws, including the Conservation Plan.
Clublink argued that the CHL By-laws and the Conservation Plan were ultra vires (beyond the powers of) the Town, and therefore takes issue with the Town’s authority to enact them. Essentially, Clublink contends the CHL By-laws and Conservation Plan seeks to accomplish indirectly what they cannot do directly, and that is to compel the property owner to continue with a particular use of the property. Section 11 (8) of the Municipal Act, 2001, S.O. 2001, c. 25, effectively established areas where municipalities are not to tread, unless otherwise providing a service in relation to culture, parks, recreation and heritage.
S. 11 (8) of the Municipal Act, provides:
(8) The power of a municipality to pass a by-law under subsection (3) under the following spheres of jurisdiction does not, except as otherwise provided, include the power to pass a by-law respecting services or things provided by any person, other than the municipality or a municipal service board of the municipality, of the type authorized by that sphere:
1. Public utilities.
2. Waste management.
3. Highways, including parking and traffic on highways.
4. Transportation systems, other than highways.
5. Culture, parks, recreation and heritage.
6. Parking, except on highways. 2006, c. 32, Sched. A, s. 8.
Clublink submitted that the CHL By-laws and the Conservation Plan ought to be quashed on the basis that they were ultra vires and made in bad faith. The Town by-passed the restriction to pass by-laws under “service or things” by characterizing its by-laws as being in the sphere of “culture, parks, recreation and heritage”.
The Town contends that the general application of the CHL By-laws and the Conservation Plan were intended to protect the natural landscape of cultural heritage landmarks, not just Glen Abbey. The Town denies that Clublink’s property has been singled out, and that the CHL By-laws were intended to protect roughly 30 properties that have been identified as having cultural heritage value. Further, the Town argues that they are acting in accordance with the Municipal Act, and is implementing a cultural heritage strategy that it has been mandated to pursue.
Justice E.M. Morgan was essentially presented with the question whether the CHL By-laws and the Conservation Plan negates the operating effect of the Municipal Act. If it does, then the law would be found to be ultra vires. In that regard, he found that the regulation of Glen Abbey by way of the CHL By-laws and the Conservation Plan of the provision of “service or things” by a private landowner in respect of “Culture, parks, recreation and heritage” does amount to a direct contradiction to the prohibition in s. 11(8)5 of the Municipal Act.
After determining that the action was ultra vires, for largely academic purposes, Justice Morgan also proceeded to determine whether the CHL By-laws and the Conservation Plan would also be quashed due to being enacted in bad faith. In doing so, he noted that ultra vires and bad faith are not unrelated, and one is often a good indicator of the other. Some indicators of bad faith, for the purpose of this case, included: questionable timing, decisions made under false pretenses, lack of notice, and parties being singled out.
As mentioned, the Conservation Plan was conveniently introduced immediately after Clublink’s proposal for course redevelopment. On top of that, no other businesses or property owners have been targeted in the Conservation Plan other than Clublink, and although the CHL By-laws are applicable to all landscapes, its application has been solely aimed at Glen Abbey. Justice Morgan held that the preservation of Ontario’s heritage should be accomplished at the cost of the community at large, not at the cost of an individual property owner. To knowingly act otherwise is an expression of bad faith. Thus, the impugned by-laws, as well as the Conservation Plan, would have also been quashed by reason of bad faith.
PATENTLY UNREASONABLE BY-LAWS
The second case resulting in the City’s by-law being quashed was Brodylo Farms Ltd. v Calgary (City), 2019 ABQB 123. In this matter, Justice W.P. Sullivan found that the City failed to comply with the Municipal Government Act, RSA 2000, c M-26 (“MGA”).
The City of Calgary had enacted By-law 48P2015, which approved an Area Structure Plan (“ASP”) for the community of Providence. Brodylo Farms is located within the community of Providence, but just outside the “ASP” development; however, they argued that the ASP would impact the functioning of the farm, especially the Farm’s 50 acres of wetlands.
The ASP adopted through By-law 48P2015 approved a massive commercial development in Providence, but failed to include a master drainage plan. The Brodylo’s took exception with this particular aspect of the ASP because, without a proper drainage plan, the Farm’s wetlands would be severely compromised. Moreover, the Brodylos contended that the failure of the City to include a master drainage plan was in contravention of the MGA.
In particular, the Brodylos argued that the City Council made a patently unreasonable error because the ASP did not comply with section 633 (2) of the MGA, which states that an area structure plan “must describe” the general location of public utilities, which include drainage and irrigation systems or works. On December 8, 2015, the City Council approved the ASP without a master drainage plan, a staged master drainage plan or a description of the general location of a drainage or irrigation systems or works.
Justice Sullivan agreed with the Brodylos and determined that the City’s passing of the ASP was patently unreasonable as it failed to include a proper drainage strategy. As a result, he quashed the bylaw that approved the ASP.
These two cases demonstrate that municipalities may have far reaching powers to enact by-laws to promote their agendas; however, that power is not unfettered and municipalities are required to act in a manner consistent with the legislation that governs them. Moreover, the municipality must be acting in good faith, and cannot effectively target property owners to pursue their own agenda.
In the event you or your clients have concerns that by-laws are being promoted that seem to single out your property, or that are not transparent, speak to a lawyer to ensure that your interests are being protected. Land is often the biggest investment a person makes and you need to ensure that your interests are protected from unreasonable hardships. Never just assume that because it is the municipality that is behind any particular change that the municipality is acting lawfully.
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