COURT FILE NO.: 236/08

DATE: 20090525

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

swinton, low AND KARAKATSANIS JJ.

B E T W E E N:

CITY OF TORONTO

Appellant

• and -

ROMLEK ENTERPRISES, THREE R AUTO BODY, HIGHLAND CREEK COMMUNITY ASSOCIATION and GREGORY McCONNELL

Respondents

Robert A. Robinson and Kirsten Franz, for the Appellant

Alan B. Dryer and Adam J. Brown, for the Respondents Romlek Enterprises and Three R Auto Body

HEARD at Toronto: April 3, 2009

SWINTON J.:

Overview

1This is an appeal, with leave, from a decision of the Ontario Municipal Board dated April 28, 2008, in which the Board allowed an appeal from the Committee of Adjustment of the City of Toronto (the “City”) and authorized four minor variances. At issue in this appeal is the reasonableness of the Board’s decision to grant the variances.

Background

2Romlek Enterprises and Three R Auto (‘the respondents”) applied for minor variances to permit the construction of a three storey apartment-style retirement home at the junction of Old Kingston Road and Morrish Road in the Highland Creek Community area of Scarborough. The land is currently used as a parking lot and an auto body repair and towing business.

3Surrounding land uses include a one/two storey commercial plaza to the north, a used car dealership to the south, a one storey commercial plaza to the east, and open space and a two storey commercial plaza to the west. The applicable zoning by-law does not permit residential uses.

4The proposed development comprises a total floor area of 6,886 square metres and consists of a mixed use building containing a three storey apartment building for retirees with 90 residential units, associated parking spaces and retail floor space. The gross floor area of the commercial retail space is approximately 145 square metres.

The Planning Context

5Municipalities like the City of Toronto enact official plans pursuant to s. 16 of the Planning Act, R.S.O. 1990, c. P.13 (the “Act”) that establish goals, objectives and policies to manage and direct physical change in the city. The subject property is governed by the Official Plan policies for the City of Toronto, as well as a Secondary Plan known as the “Highland Creek Community Secondary Plan”.

6Subsection 24(1) of the Act provides that no by-law shall be passed for any purpose that does not conform with the Official Plan.

7The Toronto Official Plan designates the site and surrounding area as a “Mixed Use Area”, which is described as an area “made up of a broad range of commercial, residential and institutional uses, in single use or mixed use buildings, as well as parks and open spaces and utilities.”

8Secondary Plans form part of Chapter 6 of the Official Plan. According to Policy 5.2.1 of the Official Plan, Secondary Plans “set the stage for reurbanization of a defined area to stimulate and guide development in keeping with the Plan’s objectives”. They are designed to bring a more detailed level of clarity to the broader policy objectives of the Official Plan for specific communities.

9Policy 5.6 of the Official Plan sets out policies for the interpretation of the Official Plan and specifically addresses the relationship between the Official Plan and a Secondary Plan. Policies 5.61 and 5.6.6 read as follows:

5.6.1 The plan should be read as a whole to understand its comprehensive and integrative intent as a policy framework for priority setting and decision making.

5.6.6 The policies of this Plan apply to the areas subject to Secondary Plans contained in Chapter Six, except in the case of conflict, the Secondary Plan will prevail.

10Policy 1.4 of the Highland Creek Community Secondary Plan imposes a specific density limit on residential use in the area, stating:

The core area of the Highland Creek Community, which is located in the Highland Creek Village in the vicinity of Kingston and Morrish Roads, is designated Mixed Use Areas, providing for a variety of uses, including residential uses at a density not exceeding 37 units per hectare. Development within the Village will proceed in accordance with the urban design guidelines for the area.

11The subject property is within the core area of the Highland Creek Community and has a lot area of 0.38 hectares. The proposed 90 residential units would amount to a density of 268 units per hectare.

12Although the Official Plan designates the property as falling within a Mixed Use Area, the underlying zoning by-law, City of Scarborough By-law Number 10827 (the “zoning by-law”), applies further restrictions to the site. It does not allow residential uses within this particular area of larger Mixed Use Area designated by the Official Plan.

13The zoning by-law designates the site as “Highway Commercial” and “Places of Worship”. Permitted uses within a Highway Commercial zone include Day Nurseries and Highway Commercial uses. The latter are defined as those which require a location adjacent to a major traffic artery, are not suited to shopping centres or which perform a “specialized commercial function”. Some of the contemplated specialized commercial functions are enumerated in the by-law and include automobile service stations, funeral homes, hotels and motels, office uses, recreational uses, and public garages.

14The zoning by-law also restricts the maximum gross floor area of a building to 40% of the lot area.

The Decision of the Committee of Adjustment

15The respondents applied for four minor variances pursuant to s. 45(1) of the Act: to allow a mixed use building not permitted by the zoning by-law; an exemption from the requirement to cover the loading/garbage area; a reduction in the minimum setback from the centre line of Morrish Road; and an increase in the gross floor area of the building from 40% of the lot area, as allowed by the zoning by-law, to 183% of the lot area. Subsequently, the coverage sought was increased to 205% of the lot area.

16Subsection 45(1) of the Act provides:

The committee of adjustment, upon the application of the owner of any land, building or structure affected by any by-law that is in effect under section 34 or 38, or a predecessor of such sections, or any person authorized in writing by the owner, may, despite any other Act, authorize such minor variance from the provisions of the by-law, in respect of the land, building or structure or the use thereof, as in its opinion is desirable for the appropriate development or use of the land, building or structure, if in the opinion of the committee the general intent and purpose of the by-law and of the official plan, if any, are maintained

17The City’s Committee of Adjustment refused the application on October 17, 2007 because the variances did not meet the general intent and purpose of the zoning by-law, as the Highway Commercial zone is not intended to provide for residential uses in a mixed use building. As well, the proposed gross floor area of 183% of the lot area would allow a built form not contemplated by the zoning by-law (which would allow coverage of 40% of the lot area). Finally, the Committee held that the variances were not minor.

18The respondents appealed this decision to the Board.

The Board’s Decision

19The Board heard evidence from the respondents’ planner, Robert Dragicevic, and from the City’s planner, Paul Galvin, and allowed the appeal, authorizing the variances.

20The Board member received opinion evidence from Mr. Dragicevic giving an explanation and interpretation of the Official Plan and accepted his evidence that the proposal met the Mixed Use Area designation of the Official Plan. The Board also appears to have accepted Mr. Dragicevic’s view that the density cap in the Secondary Plan applies to semi-detached homes and townhouse developments, but not the proposed mixed use.

21The Board also accepted the opinion evidence of Mr. Dragicevic that the variance to the zoning by-law maintained the general intent and purpose of the zoning by-law. At p. 10 of the reasons, the member stated,

In this case, the Applicant is faced with a decades-old Zoning By-law that hinders his ability to develop his lands in a manner that responds to the City’s changing demographics and positively contributes to the character of Highland Creek Village at this intersection. A degree of flexibility that supports the upper-tier Official Plan Mixed Use designation is appropriate in this case by varying the list of permitted uses for the subject site to include a retirement residence. The Board determines that the variance to permit the use is a minor one and the general intent and purpose of the Zoning By-law is maintained.

22The member also held that the variances were desirable for the appropriate development of the lands and gave significant weight to Mr. Dragicevic’s opinion that the variances, whether considered individually or cumulatively, were minor.

23The Board concluded that a flexible approach to the zoning by-law was appropriate in this case, stating (at p. 15 of the Reasons):

In these particular circumstances, Mr. Dragicevic’s interpretation and expert planning evidence related to the performance standards of the decades-old Highway Commercial use contained in the Zoning B-law [sic] were persuasive when considered in light of all the relevant and more recent policies of the City of Toronto Official Plan as cited, particularly where no discernible or adverse impacts have been established by the City’s planner.

The Board determines that a retirement residence in excess of the 40% coverage standard, with the requested setbacks and provision of a screened garbage and loading area, is a supportable and worthy development for the subject lands for all of the reasons given and as supported by the professional land use planning evidence of the Applicant’s planner.

The Standard of Review

24The application of s. 45(1) of the Act raises questions of mixed fact and law. However, an appeal lies to this Court from a decision of the Board only on a question of law, with leave of the Court (Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 96(1)).

25The courts, on appeal, have applied a standard of reasonableness in respect of questions of law that engage the specialized expertise of the Board (London (City) v. Ayerswood Development Corp., 2002 3225 (ON CA), [2002] O.J. No. 4859 (C.A.) at para. 7; Vincent v. DeGasperis, 2005 24263 (ON SCDC), [2005] O.J. No. 2890 (Div. Ct.) at para. 30 ). As the application of s. 45(1) engages the planning expertise of the Board, the standard of reasonableness applies in this appeal.

26According to the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190,

[R]easonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But is it also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. (at para. 47)

Analysis

27Pursuant to s. 45(1) of the Act, a “minor variance” may be approved if the “general intent and purpose of the by-law and of the official plan” are maintained. The general principles to be applied in determining if a minor variance should be approved are the following:

1. the variance must be minor;

2. it must be desirable for the appropriate development or use of the land, building or structure;

3. it must maintain the general intent and purpose of the zoning by-law; and

4. it must maintain the general intent and purpose of the official plan.

(Vincent v. DeGasperis, supra at para. 9)

28The City submitted that the Board failed to properly apply the four part test, specifically by failing to consider whether the variances were minor, having regard to the size of the proposed variances, and whether they maintained the general intent and purpose of the zoning by-law and the Official Plan. In addition, the Board erred in law in its interpretation of the Official Plan and the zoning by-law.

29The respondents submitted that the Board properly heard and weighed expert evidence regarding whether the variances were minor and made findings based on that evidence. Their position is that the Board’s decision was a reasonable one.

30In my view, the Board’s decision was unreasonable. The Board made errors of law by failing to properly apply the test under s. 45(1) of the Act. It failed to give proper consideration to the general intent and purpose of the zoning by-law and failed to properly interpret and apply the applicable Official Plan policies. As well, it failed to consider whether the variances, taken as a whole, were minor, given the degree to which they departed both from the Official Plan and the zoning by-law. As a result, its decision cannot be said to fall within a range of possible, acceptable outcomes, and it should be set aside.

The Official Plan

31Before approving a minor variance, the Board must be satisfied that the variance maintains the general intent and policy of the Official Plan. The respondents submitted that this part of the test under s. 45(1) requires the Board (or the Committee of Adjustment, as the case may be) to determine if the general intent and purpose of the Official Plan has been met, not whether there has been compliance with each specific provision.

32The Board focussed on the compatibility of the proposed development with the Mixed Use Area designation in the Official Plan. In doing so, it failed to consider and apply Policy 5.6 of the Official Plan, which states that in case of conflict, the policies of the Secondary Plan will prevail. Although the Official Plan designates the site as a Mixed Use Area and does not impose any density restrictions on the uses permitted, the Highland Creek Community Secondary Plan included a specific density cap of 37 units per hectare for residential uses. The Board was required by Policy 5.6.6 of the Official Plan to give precedence to this density limit; it did not so do. Rather, it gave approval for a residential development with a density of 268 units per hectare. That level of density is clearly incompatible with the density permitted by the Secondary Plan, which is to govern the Board’s considerations.

33Moreover, the Board gave an unreasonable interpretation to the density limit found in the Secondary Plan. It accepted Mr. Dragicevic’s view that this limit applied only to grade-related development such as semi-detached and townhouse developments and was not applicable to the subject development.

34The proper interpretation of the Official Plan and the Secondary Plan is not a factual matter to be decided based on opinion evidence from planners, but rather a question of law (Toronto (City) v. 2059946 Ontario Ltd., [2007] O.J. No. 3021 (Div. Ct.) at para. 4). The Board member was required to interpret these documents himself. The interpretation he accepted, that the density limit would not apply to the mixed residential use proposed, is not consistent with and is not a reasonable construction of the words of the Secondary Plan. There is nothing in Policy 1.4 of the Secondary Plan that suggests the density limit is meant to be limited to townhouse forms of development and not meant to apply to the apartment residence proposed. The Policy states,

The core area of the Highland Creek Community … is designated Mixed Use Areas, providing for a variety of uses, including residential uses at a density not exceeding 37 units per hectare. (emphasis added)

35The decision to grant the variance was, therefore, unreasonable: first, because it clearly fails to give priority to the Secondary Plan as required; and second, because it entails a substantial departure from the density limit for residential use in the Secondary Plan and is, therefore, inconsistent with the general intent and purpose of the Official Plan.

36That the approval is unreasonable is demonstrated by the fact that had this approval proceeded through an application for rezoning, as suggested by the City, an Official Plan amendment would have been required to permit the proposed density limit, as it is over seven times that permitted by the Secondary Plan. Subsection 24(1) of the Act prohibits a by-law that does not conform with the Official Plan. The Board failed to address the question of how a proposed variance would be consistent with the general purpose and intent of the Official Plan, where the proposal would otherwise require an amendment to the plan.

The Zoning By-law

37The Board was required to find that the proposed variances maintained the general intent and purpose of the applicable zoning by-law. It reached an unreasonable decision because of the failure to consider the general intent and purpose of the by-law and because it erred in the interpretation it gave to the by-law.

38The applicable zoning is Highway Commercial use, which does not permit any residential uses. However, the Board appears to have reasoned that the zoning by-law should be given less weight than the Official Plan, because the zoning by-law was adopted in 1972, while the Official Plan is more recent.

39Moreover, the Board reasoned that while residential uses were not permitted, hotel and motel uses were permitted, and the residential use was “akin” to the permitted hotel and motel use.

40Those conclusions are unreasonable, given the wording of the by-law and its apparent intent and purpose. First, in determining whether a proposed minor variance maintains the general purpose and intent of the zoning by-law, the Board must consider the existing by-law, regardless of its age. Therefore, by giving less weight to the zoning by-law because it was adopted in 1972, the Board erred in law. Second, by the terms of s. 45(1) of the Act, the compatibility of the variance with the general intent and purpose of the zoning by-law is a separate consideration from compatibility with the intent and purpose of the Official Plan. Therefore, the Board erred in weighing one against the other and giving greater weight to the Official Plan.

41Third, the Board erred in equating a residential use with the hotel/motel use in the Highway Commercial zone explicitly permitted by the zoning by-law. Residential use is a separately recognized use within the zoning by-law system. This is not a case where a type of use has arisen not previously contemplated and for which some categorization needs to be found. Where a residential use is intended to be permitted by the zoning by-law, the by-law permits the residential use in clear and unambiguous language. For example, the zoning by-law contains the following residential categories: “S” (Single-Family Residential); “T” (Two-Family Residential); “ST” (Street Townhouse Residential); and “M” (Multiple-Family Residential). No such language appears in the Highway Commercial zone.

42Moreover, the hotel/motel use is listed as one example of a “specialized commercial function”. There was no discussion by the Board as to how a residential apartment building performs a similar commercial function.

43The Board gave an unreasonable interpretation to the by-law in analogizing the residential use with the hotel/motel use permitted in the Highway Commercial zone. In doing so, it failed to engage the issue before it – is the proposed residential use compatible with the general intent and purpose of the zoning by-law, given that residential use is not a permitted use at this location?

44Furthermore, the Board failed to consider the provision in the zoning by-law restricting the gross floor area of all buildings to 40% of the lot area. The City expert gave evidence that the coverage rules would permit a one storey building with at-grade parking. Therefore, even if the proposed residential use is akin to hotel/motel use, the proposed development is a three storey building. The by-law would not permit a hotel of that size to be built on this lot.

45Pursuant to s. 45(1) of the Act, the Board was required to determine the general intent and purpose of the zoning by-law, including the restriction on coverage. Instead, it approved coverage of 205% of the lot area without considering the by-law limitation and its intent and purpose. That was unreasonable.

Were the variances minor?

46There is no definition of “minor variance” in the Act. The case law indicates that a flexible approach should be taken to determine if a variance is minor, “relating the assessment of the significance of the variance to the surrounding circumstances and to the terms of the existing by-law” (Fred Doucette Holdings Ltd. v. Waterloo (City), 1997 16235 (ON SC), [1997] O.J. No. 6292 (Div. Ct.) at para. 21). In Vincent v. DeGasperis, supra, the Court observed that “minor” involves consideration of both size and impact (at para. 12).

47In the present case, the Board failed to give reasons explaining why the variances granted were properly considered minor. It proceeded on the basis that it could accept the opinion evidence of the respondents’ planner to that effect and treat this issue as a factual matter to be decided on the basis of expert evidence. As indicated above, that in itself is an error, as it was the Board’s duty to interpret the Official Plan and by-law instruments. Most importantly, the Board failed to indicate why permitting a residential use in an area not zoned for residential was minor, as this is a significant alteration of the use of the land.

48Moreover, the Board failed to indicate why an increase in density from 37 units per hectare to 268 units per hectare and an increase in lot coverage from 40% to 205% were minor.

49The Board referenced this Court’s decision in Fred Doucette Holdings Ltd., supra as standing for the principle that the Board is justified in varying a provision of a zoning by-law in order to allow a use, based on the circumstances of the case. However, in that case, the variance held to be minor permitted a portion of a retail floor area to be used for the sale of food products not processed on the site, while the by-law only permitted the retail sale of food products processed on the site. The Court noted that the variance did not significantly alter the use of the land, and the existing by-law already contemplated retail sales.

50In the present case, in contrast, the proposed use is not permitted by the zoning by-law, and the proposed development departs significantly from the density cap in the Secondary Plan and the coverage provision in the by-law. Viewed cumulatively or individually, these variances cannot reasonably be said to be minor.

Conclusion

51The Board’s decision to grant these minor variances was unreasonable, given its failure to properly apply the test in s. 45(1) of the Act and its interpretation of the Official Plan and zoning by-law. Therefore, the appeal is allowed.

52As set out above, given the significance of the departures from the general intent and purpose of the zoning by-law and Official Plan, this is not a case where the variances can be said to be minor. Therefore, it is not appropriate to send the matter back to the Board for a rehearing. The order of the Board is set aside, and the appeal by the respondents from the decision of the Committee of Adjustment is dismissed.

53As agreed by the parties, the City, as the successful party, is awarded costs of the appeal in the amount of $15,000.00 payable by the respondents.

Swinton J.

Low J.

Karakatsanis J.