DATE: 20060508
DOCKET: C43573
COURT OF APPEAL FOR ONTARIO
SIMMONS, CRONK and ROULEAU JJ.A.
B E T W E E N :
ESSEX 143 JOINT VENTURE LTD.
Michael Fleishman for the appellant
Applicant
(Respondent in Appeal)
- and -
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by THE MINISTER OF TRANSPORTATION
Myron W. Shulgan, Q.C. for the respondent
Respondent
(Appellant in Appeal)
Heard: February 10, 2006
On appeal from the order of Justice Anthony E. Cusinato of the Superior Court of Justice dated April 28, 2005.
ROULEAU J.A.:
1This appeal invites this court to consider the scope and application of s. 38(2)(f) of the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50 (the P.T.H.I.A.).
2In March 2005, Essex 143 Joint Venture Ltd. (the developer) applied for an order determining its rights under s. 38(2)(f) of the P.T.H.I.A. In particular, it asked whether it had to obtain a permit from the Minister of Transportation before it could proceed with a proposed residential subdivision located within 800 metres of a controlled-access highway.
3By order dated April 28, 2005, the application judge granted declarations that a residential development is not a use of land that is subject to the Minister’s approval pursuant to s. 38(2)(f) of the P.T.H.I.A. and that the developer was permitted to proceed with its residential development without a permit from the Minister under s. 38(2)(f).
4The province appeals the order on several bases, including that the application judge erred by incorrectly characterizing the development as being residential when the uncontradicted evidence established that it was the residential phase of a mixed-use (residential/commercial) development.
5For reasons that follow, I would grant the appeal, set aside the application judge’s order and substitute in its stead, a declaration that the respondent requires a permit under s. 38(2)(f) of the P.T.H.I.A. prior to proceeding with the proposed residential subdivision. In my view, the application judge framed the issue too narrowly. The facts of this case required him to consider the context in which the residential development was proceeding. This context included the fact that the residential development was a part of a mixed-use development that had already received a permit allowing the first commercial phase of the development to proceed.
Background
6The developer owned a 140-acre parcel of land adjacent to Highway 3 in the Town of Essex. It proposed a mixed-use development for the site. Approximately eighty-three acres would be for residential use and the balance for commercial use.
7From the outset, the developer recognized that, in order for it to develop these lands, it would have to obtain amendments to the official plan, zoning changes and permits pursuant to the P.T.H.I.A. The relevant sections of the P.T.H.I.A., sections 38(2)(f) and 38(11), read as follows:
38 (2) Despite any general or special Act, regulation, by-law or other authority, no person shall, except under a permit therefor from the Minister,
(f) use any land, any part of which lies within 800 metres of any limit of a controlled-access highway, for the purposes of a shopping centre, stadium, fair ground, race track, drive-in theatre or any other purpose that causes persons to congregate in large numbers; or
38 (11) The Minister may issue permits under this section in such form and upon such terms and conditions as he or she considers proper and may in his or her discretion cancel any such permit at any time.
38 (2) Malgré toute autre loi générale ou spéciale, un règlement, un règlement municipal ou une autre autorité, nul ne doit, sauf en vertu d’un permis délivré par le ministre accomplir l’un des actes suivants :
f) utiliser un bien-fonds dont une partie est située dans les 800 mètres d’une limite d’une route à accès limité, aux fins d’un centre commercial, d’un stade, d’un champ de foire, d’un terrain de courses, d’un ciné-parc ou à d’autres fins qui donnent lieu à un rassemblement nombreux de personnes;
38 (11) Le ministre peut délivrer des permis en vertu du présent article dans la forme et aux conditions qu’il estime appropriées et, s’il le juge opportun, annuler ces permis.
8In 2000, the developer took steps to secure the approvals required to allow the project to proceed.
9In March 2000, the transportation planning consultant retained by the developer advised the Ministry of Transportation about the proposed mixed-use development and asked the Ministry what concerns it may have that should be addressed in the traffic study that the consultant was undertaking.
10The Ministry responded, advising that the development came within the Ministry’s permit control area and would require Ministry permits and approvals prior to construction.
11Also in 2000, the developer sought changes from the Town of Essex to the industrial zoning and official plan designations of the property. The changes were to reflect the proposed mixed residential/commercial use of the land.
12On January 15, 2001, the Town of Essex passed a by-law giving its approval to the requested changes to the official plan and directing that the proposed changes be submitted to the Ministry of Municipal Affairs and Housing for its approval.
13When official plan amendments are submitted to the Ministry of Municipal Affairs and Housing, they are circulated within the government and, as part of this process, a determination of the need for the issuance of Ministry of Transportation permits pursuant to s. 38(2)(f) of the P.T.H.I.A. is made. The potential traffic generation and traffic volumes are significant factors in making this determination.
14In this case, upon review of the proposed changes, the Ministry of Transportation determined that “commercial building/land use and sign permits” were required.
15The amendments to the official plan and the zoning changes were implemented.
16As part of the ongoing communication between the developer and the Ministry of Transportation, the developer advised that it wished to proceed with the development of the property in phases. Phase 1 concerned a commercial use portion of the development, consisting of a grocery store, a Canadian Tire store and an automobile dealership, as well as the associated parking.
17In response to the developer’s application for a permit under s. 38(2) of the P.T.H.I.A. to proceed with phase 1, the Ministry of Transportation advised that, prior to issuing a permit for the phase 1 portion of the development, certain improvements to an intersection had to be carried out. The Ministry indicated to the developer that once an agreement was reached on the required improvements, the Ministry preferred entering into an agreement with the Town of Essex for funding and implementing the improvements and the Town could then recover these costs from the developer.
18Agreement was then reached on the needed improvements and, as proposed by the Ministry, it entered into a June 30, 2004 agreement with the Town of Essex to fund and implement the improvements to the intersection required to allow phase 1 to proceed. Significantly, a recital in that agreement stipulated that the development, defined as the entire parcel, came within the permit provisions of the P.T.H.I.A. The agreement also provided that the permit that was to be issued authorizing phase 1 would have annotated to it the stipulation that the permit was subject to the terms of the June 30, 2004 agreement. On the record before us, it does not appear that the developer challenged the Ministry’s inclusion of this condition to the issuance of the permit for phase 1.
19After proceeding with the commercial phase of the mixed-use development, the developer determined to proceed with the residential phase. The residential phase involves approximately 400 residential units on eighty-three acres of the site. Rather than applying for the issuance of a permit pursuant to s. 38(2)(f) of the P.T.H.I.A., the developer brought the present application.
Position of the parties before the application judge
20On the application, the developer took the position that s. 38(2)(f) of the P.T.H.I.A. has no application to residential uses and that it applies only to land located within 800 metres of a controlled access highway where the land was to be used as “a shopping centre, stadium, fairground, racetrack, drive-in theatre or any other purpose that causes persons to congregate in large numbers”. It argued that the phrase “any other purpose that causes persons to congregate in large numbers” should be read in the context of the listed purposes. According to the developer, the common theme of the listed purposes was that they would all cause large numbers of people to exit the premises at the same time, thereby causing traffic congestion. The proposal to build residences on eighty-three acres of the site was therefore outside of the scope of the Act.
21The province submitted that the general purpose of the P.T.H.I.A. is to control traffic and that the Minister’s discretion to refuse or grant a permit must be exercised having regard to traffic planning requirements (see: Re Multi-Malls Inc. v. Ontario (Minister of Transportation and Communications) (1977), 14 O.R. (2d) 49 (C.A.)). It then took the position that:
(a) under s. 38(2)(f) of the P.T.H.I.A., the entire 140 acre mixed-use residential/ commercial development proposed by the developer required permits from the Minister of Transportation; and
(b) in any event, the proposed residential sub-division phase of the development, by itself, would cause people to congregate in large numbers as compared to the previous use of the land as a vacant field.
Analysis
22In reaching the decision that “a Minister’s permit for residential development is not required within the provisions of s. 38(2)(f)” of the P.T.H.I.A., the application judge, in my view, framed the issue too narrowly. The issue before him was not whether s. 38(2)(f) of the P.T.H.I.A. contemplated that a residential development in the nature of the developer’s proposed residential phase, as a stand alone project, would require a permit from the Minister of Transportation. Rather, the issue was whether, on the facts of this case, the residential phase of the mixed-use development required a permit before the developer could proceed. The residential phase of the project could not be dealt with in isolation. I say this for two reasons.
23First, although the application judge found that the developer did not concede that a permit was required for the residential use, it is clear that it was contemplated from the outset that the residential portion of the development would be part of one single mixed commercial/residential project. The conduct of both the developer and the Ministry of Transportation was consistent with this approach.
24The developer represented the project as a mixed-use development in the original contact made with the Ministry by its transportation planning consultant in March 2000. The developer continued to take this position throughout the process of amendment to the official plan and in the application for the phase 1 permit.
25The Ministry also considered the whole of the development as one project. It is apparent that, from the Ministry’s perspective, phase 1 approval was granted on the understanding that the developer would prepare a traffic impact study and apply for permits before proceeding with any further phase of the development. The Ministry did indicate that the actual traffic volumes experienced at the intersection as a result of having proceeded with phase 1 may well impact on the need for additional highway improvements to support further phases.
26Further, the Ministry of Transportation consistently responded to the developer on the basis that the whole of the development was subjected to the permit requirements of the P.T.H.I.A. This position is reflected in the agreement entered into between the Minister and the Town of Essex that allowed phase 1 to proceed. As I noted previously, this agreement specified that the permit issued to the developer for phase 1 would be made subject to the terms of the agreement.
27Second, making the phase 1 permit subject to the terms of the agreement between the Town of Essex and the Ministry served to confirm that the permit requirements of s. 38(2)(f) of the P.T.H.I.A. extended to all phases of the mixed-use development. The imposition of terms and conditions on the issuance of a permit is authorized by s. 38(11) of the P.T.H.I.A. In my view, by making the permit subject to the terms of the agreement between the Town of Essex and the Ministry, these terms became “terms and conditions” of the permit as contemplated by s. 38(11). The imposition of those terms and conditions was not challenged by the developer and they must therefore be complied with.
28Specifically, the recital in the agreement that the “development [meaning the full 140 acres] comes within the scope of the permit provisions of sections 2, 38(2)(a), (b), (c), (d), (e), (f) and 38(11), of the [P.T.H.I.A.]”, when considered in the light of the Ministry’s and developer’s consistent position to that point that it was a mixed-use project, clearly indicates that the approval of the permit for phase 1 was given on the understanding and condition that the developer obtain permits for all future phases of that mixed-use development. The developer cannot now seek to disaggregate the mixed development and proceed with each portion of the development as a separate stand-alone project.
29Having reached this conclusion, it is not necessary for me to determine whether, standing alone, a residential development of the type proposed by the developer would fall within the terms of s. 38(2)(f) of the P.T.H.I.A. or whether, when one phase of a development requires a permit, the Act allows the Minister to require that all phases of the development be subject to permits.
Disposition
30In the result, I would allow the appeal, set aside the application judge’s April 28, 2005 order in its entirety and substitute in its stead a declaration that the respondent requires a permit under s. 38(2)(f) of the P.T.H.I.A. prior to proceeding with the proposed residential subdivision.
31Costs should follow the event both here and below. Accordingly, the appellant is entitled to its costs on a partial indemnity basis fixed at $7,000 for the appeal and $10,000 for the proceedings below, inclusive of GST and disbursements.
“P.S. Rouleau J.A.”
“I agree J.M. Simmons J.A.”
“I agree E.A. Cronk J.A.”