COURT FILE NO.: 248/07

DATE: January 29, 2008

SUPERIOR COURT OF JUSTICE – DIVISIONAL COURT – ONTARIO

RE: BEECHRIDGE FARMS INC. (Applicant/Moving Party)

and

THE CORPORATION OF THE TOWN OF AJAX and THE REGIONAL MUNICIPALITY OF DURHAM (Respondents)

COUNSEL: Linda Rothstein and Eileen Costello, for the Moving Party

Andrew Biggart, for the Town of Ajax

Matthew Gaskell and Jason Hunt for the Region of Durham

HEARD: January 18, 2008

E N D O R S E M E N T

MOLLOY J:

Introduction

[1] Beechridge seeks leave to appeal from a decision of a Review Panel of the Ontario Municipal Board (“OMB”) dated May 3, 2007 (“the Review Decision”).

[2] Beechridge owns 60 hectares of land in Ajax and applied in 2006 to change the designation of that land from employment use to residential use, so that the lands could be developed. The Town of Ajax refused that application. Beechridge appealed to the OMB. There was a pre-hearing process which, among other things, determined that the hearing would proceed in three phases and set an issues list for each phase. Phase One would address land supply, economics and market issues. This included population forecasts, employment forecasts, the available inventory of employment and residential lands and the expected demands for each going forward to 2021 and 2031. Phase Two would deal with planning issues with respect to the proposed development of the lands if the designation was changed to residential at the conclusion of Phase One. Phase Three would be a catch-all of other matters, including an assessment of the “most appropriate land uses” and transportation issues.

[3] The Phase One Hearing proceeded before OMB Member Rogers over a period of 12 weeks, during which there were a number of procedural rulings. On September 25, 2006, following the completion of the Phase One hearing, Member Rogers released a decision (“the Phase One Decision) granting Beechridge’s application to change the designation of the land to residential.

[4] The Town of Ajax (“Ajax”) and the Regional Municipality of Durham (“Durham”) applied to the OMB under s. 43 of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 (“the Act”) for a review of the Phase One Decision and two earlier procedural rulings made during the Phase One hearing. A review hearing was held, following which the two-member Review Panel issued the Review Decision directing a new hearing, based on three findings of procedural unfairness and/or breaches of natural justice. It is from this decision that Beechridge now seeks leave to appeal.

The Test

[5] The parties agree on the test for leave to appeal. Before granting leave to appeal, I must be satisfied that: (a) there is reason to doubt the correctness of the Review Decision; and (b) the Board’s error involves a question of law of “sufficient importance to merit the attention of the Divisional Court”.

[6] The parties also acknowledge that if I find the test for leave to appeal is not met on any one of the three bases found by the Review Panel, then that is sufficient to deny leave to appeal to this Court.

The Adjournment Issue

[7] One of the grounds cited by the Review Panel as justifying a new hearing was the Member’s refusal to grant an adjournment of the Phase One hearing in order to permit Durham and Ajax to consider the implications of provincial legislation that had just come into force. The Review Panel found this to be procedurally unfair and not in the public interest.

[8] On Friday, June 16, 2006, pursuant to the Places to Grow Act, 2005, S.O. 2005, c.13, the Province of Ontario released the Growth Plan for the Greater Golden Horseshoe, an area which includes the subject lands. At this point, there had already been 19 hearing days at the Phase One hearing and the evidence of Beechridge had been completed. The hearing was scheduled to resume on Monday, June 19, 2006 at which point Durham would begin to present its evidence. Three hearing days were scheduled for that week.

[9] The Places to Grow Act and the related Growth Plan are part of a comprehensive provincial initiative to address land planning issues and economic growth throughout the province over a period of the next 30 years. It is binding on municipalities and regions and requires land use planning to comply with its prescribed population and employment forecasts, density targets, intensification targets and activity rates. Both Ajax and Durham had intended to call expert evidence on these issues, and that evidence had been prepared based on numbers and projections that were different from those in the new Growth Plan.

[10] On the afternoon of Friday June 16, 2006, Durham attempted, by conference call with the OMB Member, to bring a motion for an adjournment. The Member refused to hear the request by telephone and directed that the motion be made at the resumption of the hearing, on Monday morning, June 19. When the hearing resumed, counsel for Durham, supported by Ajax, requested an adjournment of the three hearing dates scheduled for that week so that Durham and Ajax could consider the implications of the new legislation. The Member refused to grant the adjournment unless the moving parties could demonstrate that the new regime would apply to the hearing. At that point, the Regulation dealing with applicability of the new regime (Reg 311/06) was available in draft form only and was silent as to its effect on ongoing hearings. Counsel for Ajax and Durham also argued that regardless of whether the hearing would be governed by the new Growth Plan, there could be an impact on the nature of the evidence they would call and that an adjournment was also needed for that purpose.

[11] The OMB Member refused the adjournment, ruling that since the Regulation did not specify that the Growth Plan would have retroactive effect, it would not apply to the hearing before her. The hearing then continued. The evidence of Durham and Ajax did not address the new data from the Growth Plan and the Member restricted questioning on the issue, ruling it to be irrelevant.

[12] At the time the Member refused the adjournment, counsel for Durham asked for a written ruling on the point, which the Member issued on July 10, 2006. By that time, an amending Regulation had been passed, which provided that the hearing “shall be continued and disposed of as if the [Growth] Plan had not come into effect”: O. Reg. 324/06, s. 3 (1.1). In her written reasons for denying the adjournment, the Member referred to this regulation as reinforcing her original determination that the new legislation did not have retroactive effect. She also confirmed that she had required counsel to establish that the Growth Plan applied to the hearing as a condition to granting the adjournment and that the reason she had refused the adjournment was because she had determined that the Growth Plan was not retroactive. She held, at page 3:

Given that legislation is not deemed to be retroactive, unless clearly and specifically provided for in the legislation or the regulations, the Board ruled that the Growth Plan does not apply to these proceedings. The Board will, as it is bound to do by virtue of Issue 10 contained in the Procedural Order governing these proceedings, hear argument on the weight it should give to the kind of policy thrust contained in the draft Growth Plan, along with other policy initiatives. However, this Board is not bound by the provisions of the Growth Plan in these proceedings.

[13] The Review Panel held that the Member’s refusal of the requested adjournment was a “clear violation” of the “rules of natural justice or procedural fairness” and noted with favour the comments of the Divisional Court decision in Stalove v. College of Physicians and Surgeons [1988] O.J. No. 1426 that “in considering an adjournment, the concerns of both parties and the public interest must be considered.” The Review Board, then held (at page 7):

To deny a modest request for a three-day adjournment to assess the implications of far reaching legislation is not in this panel’s view in the public interest.

[14] The Review Panel further stated:

Much has also been said regarding what Growth Plan evidence was permitted during the Hearing. It is this panel’s opinion that the Board imposed unreasonable constraints in this regard and was procedurally unfair as a result.

[15] The Review Board stopped short of ruling that the Member had erred in law with respect to the application of the Growth Plan to the Phase One hearing. However, it was argued before the Review Panel, as it was argued before me, that since the Member was correct in her ruling as to the Growth Plan not having retroactive effect, there was no harm done by refusing the adjournment. Further, it was argued, if the Growth Plan was not relevant to the issues in the hearing, restricting examinations of witnesses about the Plan could not be procedurally unfair. The Review Panel addressed the issue of relevance by referring to the OMB decision in James Dick Construction Ltd. v. Caledon (Town) (2003), 50 M.P.L.R 311, 47 O.M.B.R. 87 which outlined the circumstances when a decision maker would need to hear evidence about forward looking legislation and stated (at page 8) that the Clergy principle (which would prevent the application of policy enacted after the application was commenced) “is not justification for the rulings made by the Board”.

Analysis

[16] The power accorded to the OMB under s. 43 of the Act as to when it will order a rehearing is a broad one and is not to be interpreted narrowly: Russell v. Shanahan, 2000 17036 (ON CA), [2002] 52 O.R. (3d) 9 (C.A.). The OMB’s Rules of Practice and Procedure provide that the Board will hear a motion to review a decision where there is a violation of the rules of natural justice or procedural fairness: Rule 115(b). The Review Panel’s decision in this case falls squarely within those parameters.

[17] I have no reason to doubt the correctness of the Review Panel’s determination that the refusal of the adjournment in this case was procedurally unfair and a denial of natural justice. The Review Panel’s reasons on this point are succinct, but adequate to discern the basis for their decision.

[18] It is indeed not difficult to conclude that the Member’s refusal to grant an adjournment in the circumstances was unreasonable and unfair to the parties. There was no particular urgency that required proceeding that day and no prejudice to any party as a result of an adjournment, particularly given the very limited delay requested. The Board Member commented in her written ruling that “no time was allowed to the parties opposite, who opposed the adjournment request, to prepare for the argument”, but appears to have given no consideration at all to the unfairness of requiring the parties requesting the adjournment to argue the applicability of the legislation right then and there. Those parties were requesting an adjournment so that they could consider the impact of the new legislation in a reasoned manner, including considering with their experts how this might change the accuracy of the data in their reports. They were met with the illogical hurdle of demonstrating how the legislation would have an impact on the hearing, as a precondition of obtaining an adjournment to consider how the legislation would have an impact on the hearing. This is particularly problematic given the extensive and far-reaching nature of the legislation and Growth Plan. Put simply, there was no reasonable basis for refusing the adjournment. It was unfair to Ajax and Durham to force them to call their evidence without the opportunity to consider their position in light of these changes.

[19] I also have no reason to doubt the correctness of the Review Panel’s finding that the “Clergy principle” cannot be a justification for the ruling made by the Board Member. The Clergy principle is a presumptive rule that the OMB will apply only those planning practices and policies that were in effect at the time the application under consideration was made. This principle provides parties in the midst of a hearing with some degree of certainty as to the rules and policies that will apply, rather than having those rules shift every time there is a policy change within the municipality or region. However, the Clergy principle is not a strict unvarying principle. The manner in which new land planning policies may have an impact on a hearing that is already underway is not simply a question of retroactivity. The substantive and procedural requirements of the new regime might have no application whatsoever. However, land planning and predictions around land planning are fluid and the OMB Review Panel was alive to the fact that ignoring what is likely to happen in the future is not always consistent with the public interest.

[20] There are many ways the new regime and Growth Plan could have a potential impact on issues in the Phase One hearing. The Board Member mentioned only one of those: the consideration of Issue 10, (“What weight if any should be given to the Provincial, Regional and Town initiatives, objectives and non-official plan policies with respect to employment lands and economic development?”) and described it as the weight to be given to the “policy thrust” of the Growth Plan.

[21] Counsel for Ajax and for Durham argue that there are many other ways in which the Growth Plan could affect the evidence at the hearing, and ultimately the outcome. For example, under the new regime, the policy for the Ajax area is to ensure there is sufficient employment land to allow for economic development. The Growth Plan points to the problem of urban sprawl and in particular to employment lands being converted from their intended uses, thereby limiting future opportunities. Municipalities are required to bring their planning in line with the Growth Plan. Compliance by Ajax and Durham with the Growth Plan may well have an impact on how the town and the region will develop into the future. In particular, if the policy underlying the Growth Plan is successful, there will be more industry and other employment in the region, and less use of its land for residences to accommodate the urban sprawl from Toronto. If those policies are followed, existing forecasts may no longer be accurate with respect to what the region will look like, how many people will live there, what kind of people will live there, and where they will work. Issue 2 in the Phase One hearing is the appropriate population forecast for Ajax for 2021 and 2031. Issue 3 is the appropriate population forecast for 2021 and 2031. Issues 7 and 8 entail a consideration of whether the Beechridge lands will be required for employment use or for residential use over the planning periods of 2021 and 2031. The population rates and employment rates and the requirement of land for each will likely be affected by the Growth Plan. However, the expert witnesses called by Ajax and Durham were unable to adapt their predictions and forecasts to take this into account.

[22] In James Dick Construction (the OMB decision referred to by the Review Panel), OMB Member Krushelnicki referred to the Clergy principle as “normally” applying, but noted that there are well-established cases providing for some variance from this rule. He stated (at paragraph 4, that new policy passed after the application had been commenced could be “admissible and relevant, but not determinative”. He held at paras 44-45:

44. In short the Board is authorized to conclude when it is fair to apply the Clergy principle and should undoubtedly do so in the vast majority of cases. And equally, it has the authority to conclude when the circumstances of a case warrant the application of another principle. For instance, it may choose in its procedural discretion to consider and apply more recent policies and more modern standards that are consistent with a compelling public interest.

45. To conclude otherwise is to require the current practices and policies, no matter how reasonable, must be ignored or given so little weight as to be made virtually trivial, in all cases where the date of the application precedes them. This would amount in some cases to a willful blindness, that would prevent the decision-maker when determining the merits of an application – even where it is reasonable to do so – to apply criteria, standards and tests that are based on the most current research and information.

[23] What is apparent from the case law is that the applicability of a new planning regime, particularly one as far-reaching as the Growth Plan here, is not a simple, black or white issue. Further, the impact of the new planning principles is not a simple question of law that can be answered by determining whether or not the implementing legislation is retroactive. The issues are grey; and they are tinged with policy, not pure law. The Review Panel recognized this in its decision. It decided that, in all of the circumstances, it was procedurally unfair and a denial of natural justice to refuse to adjourn the hearing so that the parties affected could make reasoned and informed submissions as to the effect of the Growth Plan and the extent to which the evidence at the hearing should address that. In so deciding the Review Panel was dealing with matters of fair procedure and policy, both of which are within its core area of expertise. As such, it is entitled to considerable deference. I find no basis to interfere.

Conclusion

[24] The Review Panel did not make a definitive finding as to the correct determination on the admissibility of evidence related to the Growth Plan, not have I. The Review Panel’s decision is based on a breach of rules of procedural fairness and natural justice with respect to the adjournment issue. In the result, I find I do not have reason to doubt the correctness of the Review Tribunal’s decision on this issue. Therefore, the test for leave to appeal is not met. Since this ground alone would be sufficient to justify the review Panel’s decision to order a rehearing, it is not necessary for me to consider whether it would have been appropriate to grant leave to appeal on the other grounds advanced. Accordingly, this application for leave to appeal is dismissed. If the parties are unable to agree on the appropriate costs disposition, I can be spoken to.

MOLLOY J.

Date: January 29, 2008