COURT FILE NO.: 09-DV-1542

ONTARIO

SUPERIOR COURT OF JUSTICE

(DIVISIONAL COURT)

B E T W E E N:

CITY OF OTTAWA

Timothy C. Marc, for the Moving Party

Moving Party

• and -

THE TDL GROUP CORPORATION

Michael S. Polowin, for the Responding Party

Responding Party

HEARD: October 13 and 16, 2009

BEFORE: Madam Justice Toscano Roccamo

DECISION

Nature of Proceedings

[1] The City of Ottawa (“the City”) moves for leave to appeal to the Divisional Court from an Order dated July 28, 2009 of the Ontario Municipal Board (“the Board”) by Vice Chair Campbell repealing Section 3 of By-Law 2008-250.

Background

[2] After a process of public consultation lasting approximately five years, on June 25, 2008, the City passed the Comprehensive Zoning By-Law 2008-250 (“CZBL”) pursuant to Section 34(1) of the Planning Act, R.S.O. 1990, c. P.13, as amended, which permits municipalities to enact zoning by-laws regulating the use of land and buildings.

[3] The primary purposes of the CZBL were to harmonize the existing by-laws of the 11 former, pre-amalgamation area municipalities, and to implement in those areas, the Official Plan of the City adopted on May 14, 2003.

[4] The parties agree that Section 34(9)(a) of the Planning Act limits the City’s authority to do so, to the extent that any by-law enacted under Section 34 does not apply:

To prevent the use of any land, building or structure for any purpose prohibited by the by-law if such land, building or structure was lawfully used for such purpose on the day of the passing of the by-law, so long as it continues to be used for that purpose.

[5] Section 3 of the CZBL provides as follows:

3. (1) Nothing in this section affects subsection 34(9) of the Planning Act, R.S.O. 1990, Excepted Lands and Buildings, which addresses non-conforming uses.

(2) No person will repair or rebuild any part of any building housing or otherwise used in connection with a non-conforming use, except as set out in subsection (3).

(3) When a building, structure, facility or otherwise, including septic and other servicing systems, used in connection with a non-conforming use is damaged or demolished, the non-conforming right is not extinguished if: (By-law 2008-462)

(a) the damage or demolition was involuntary;

(b) the building is repaired or re-occupied before the expiry of two years; and

(c) the building continues to be used for the same purpose after it is repaired as it was used before it was damaged or demolished.

(4) Non-conforming rights are extinguished:

(a) where the damage, demolition or removal of a building is not involuntary;

(b) where a damaged building is not repaired or re-occupied before the expiry of two years; or

(c) where the non-conforming use,

(i) is abandoned, or

(ii) is changed without permission from the Committee of Adjustment.

(5) This section applies, with all necessary modification, to a non-complying building.

(6) Despite subsection (2), an addition to an existing principal building; a new accessory building, or an addition to an accessory building on land that is legally non-complying with respect to lot width or lot area is permitted if:

(a) the addition or new accessory building conforms to all other provisions of this by-law; and

(b) no additional dwelling units, rooming units or secondary dwelling units are created.

(7) Despite subsection (5):

(a) a permitted use in a building or lot that does not comply with the regulatory provisions of this by-law may change to another permitted use without the need for a minor variance from the Committee of Adjustment, provided that the regulatory provisions are no more restrictive for the new use.

(b) the construction of an addition to a building or a permitted projection into a yard of a building that does not comply with the provisions of this by-law, is permitted without the need for a minor variance from the Committee of Adjustment, provided that:

(i) where compliance of certain provisions has been met with the existing building, compliance must be maintained;

(ii) any addition or a permitted projection into a yard to a non-complying building that proposes to expand the existing non-complying building envelope must move towards compliance with the zoning regulations such that the extent of the proposed addition falls at least halfway between the required provision and existing non-complying situation; and (By-law 2009-164);

(iii) despite subclause 3(7)(b)(ii), this provision does not apply to building height or parking.

(8) Despite Section 2 – Compliance with Zoning By-law, development is permitted on any vacant lot existing as of the date of adoption of this by-law and which lot is legally non-complying with respect to lot width or lot area provided:

(a) the proposed use is a use permitted in the zone in which the lot is located;

(b) the proposed use does not contravene any other zone provisions; and

(c) the lot is zoned RU, V1, V2, V3 or VM.

(Emphasis added)

[6] The City received over 70 appeals regarding the enactment of the CZBL, only 16 of which did not qualify as valid appeals. One such valid appeal was that of The TDL Group Corporation (“TDL”), launched to challenge the validity of Section 3 of the CZBL. This appeal, along with others, was heard by the Board on June 18, 2009.

[7] At the hearing, the Board received evidence from the City’s land use planner, David Leclair, with respect to the City’s intention in passing Section 3 of the CZBL.

The Order Appealed

[8] At page 3 of the Decision, the Board found as follows:

…section 3 of the CZBL permits a property owner to rebuild or make repairs to a building with a non-performing use, or which is non-complying, if the rebuilding or repairs are “involuntary”. That is, the repair or rebuilding is required following an event like a fire or a flood. However, if a property owner repairs or rebuilds voluntarily, to maintain, upgrade or modernize the building, the non-conforming or non-complying right is lost. [David] Leclair, [a land use planner who testified at the Board hearing] on behalf of the City, confirmed that this is the effect of section 3 of the CZBL and reflects the City’s intent to gradually phase out existing legal non-conforming uses. (Emphasis added)

[9] At pages 8 to 11, the Board comprehensively reviewed and distinguished the authorities now cited by the City in support of its motion for leave to appeal.

[10] At pages 10 to 11 of its Decision, the Board made the following findings:

As noted above, the Board finds, on the evidence of the City’s witness, Mr. Leclair, that section 3 of the CZBL has the effect of causing a landowner to lose a right to a legal non-conforming use if that owner voluntarily repairs or replaces its building, even if the footprint of the building remains the same as the building which contained the legal non-conforming use. Mr. Leclair testified that the City’s intent in enacting section 3 of the CZBL was to encourage the gradual disappearance of legal non-conforming uses.

The Board finds, on a clear reading of section 34(9)(a) of the Act that such a municipal intent and effect of a zoning by-law is not permitted by the Act. Section 34(9)(a) prohibits a municipality from passing a zoning by-law “to prevent the use of any land, building or structure for any purpose prohibited by the by-law if such land, building or structure was lawfully used for such a purpose on the day of the passing of the by-law so long as it continues to be used for that purpose”. Therefore, a by-law provision like section 3 of the CZBL which operates to prevent such a use with the intent of “encouraging” the cessation of the legal non-conforming use cannot stand.

The cases cited by the Appellant, especially the decisions of the Supreme Court of Canada, Central Jewish Institute v. City of Toronto and Saint-Romuald (City) v. Olivier affirm the right of a landowner to continue with a legal non-conforming use. In fact, the Supreme Court of Canada decisions stand for the proposition that such a use may be expanded within the confines of the building, may be “intensified” as part of the pre-existing activity, and finally, of particular relevance to the case at hand, may see “renewal and change” (Saint-Romuald (City) v. Olivier).

The Board finds that section 3 of the CZBL specifically operates to prohibit such “renewal and change”. Mr. Leclair, on behalf of the City, agreed that if the Appellant replaced the windows in one of its stores or updated the exterior, the Appellant would lose its right to the legal non-conforming use under section 3 of the CZBL. Neither section 34(9)(a) of the Act, nor the decisions of the Supreme Court of Canada permit such a result.

With the respect to “continuity of use”, the Board finds that the intention of the landowner is significant. The Appellant would not lose its right to its legal non-conforming use during a closure for a voluntary repair or even replacement of the building. The Board notes the words of the Court in Rotstein v. Oro-Medonte (Township of): “…intention is a relevant factor to be considered in the case of a long-established pattern of use”.

In Mohammed v. Dysart (Municipality) Building Official the Court specifically considered “interruptions in use for purposes of such things as renovations or repairs, or for reasons beyond the control of the owner” and found they come within section 34(9) of the Act. The Board notes that repairs and renovations as contemplated in this case are specifically voluntary, or instigated by the landowner, as contrasted to “reasons beyond the control of the owner”. Certainly that Court found, and this Board finds, that there is nothing in section 34(9)(a) of the Act that provides that a right to a legal non-conforming use is lost if renovations or repairs are voluntary or within the control of the owner.

Finally, the Board has considered the validity of the two-year limitation period set out in subsection 3(3) and 3(4) of the CZBL. Again, there is nothing in section 34(9)(a) which allows for the extinguishment of a landowner’s right to a legal non-conforming use if repairs or renovations are not completed before the expiry of two years. As noted above, “intention” is determinative. If a landowner demonstrates a continuous intention to continue a long-established pattern of usage, there is no loss of its right, regardless of the time it takes to complete repairs.

The Board allows the appeal and finds that section 3 of the CZBL, in its entirety, improperly narrows, amends and restricts the right of a property owner to a legal non-conforming use, contrary to section 34(9)(a) of the Planning Act. Section 3 of the CZBL is beyond the jurisdiction of the City.

The Issues

[11] The issues to be determined by this motion relate to the following questions of law:

(a) Did the Board err in law in failing to properly interpret the Planning Act, R.S.O. 1990, c. P.13, s. 34(9), in particular clause 34(9)(a), in ordering the repeal of Section 3 of the CZBL on the basis that a legal, non-conforming use can continue after voluntary damage or demolition?

(b) Did the Board err in law in ordering the repeal of subsections 3(6), (7) and (8) of the CZBL, which was not sought by TDL?

[12] The City submits that subsections 3(6) to 3(8) provide for rights to non-complying uses not extended by clause 34(9)(a) but within a municipality’s authority to enact under the general powers to enact zoning by-laws in Section 34(1). There was no evidence before the Board to suggest that these three subsections were inappropriate from a planning perspective nor unlawful from a legal perspective. Rather, the evidence from the planners called by both TDL and the City supported these provisions.

[13] TDL agrees that subsections 3(6) to 3(8) of the CZBL should be restored.

[14] Accordingly, TDL submits that should leave to appeal be refused, it would consent to a rehearing of the matter before the Board in respect of Sections 3(6) to (8) of the CZBL, pursuant to Section 43 of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28, as amended.

[15] I am satisfied that this would be the most expeditious and cost-effective way to address the motion before me insofar as it relates to Sections 3(6) to (8) of the CZBL.

The Test for Leave

[16] The parties agree that an appeal lies from the Board to the Divisional Court, with leave of the Court, only on a question of law. A two-pronged test for granting leave to appeal applies as follows:

(a) Is there some reason to doubt the correctness of the decision of the Board?

(b) Does the decision involve a point of law of sufficient importance to merit the attention of the Divisional Court?

Ontario Municipal Board Act, R.S.O. 1900, c. O.28, s. 96 Gaudaur v. Etobicoke (City) (1997), 1997 16234 (ON SC), 35 O.R. (3d) 551 at 566 (Div. Ct.)

Standard of Review

[17] The parties also agree that in determining the appropriate standard of review, the court must apply the test as set out by the Supreme Court of Canada in Dunsmuir v. New Brunswick:

In summary, the process of judicial review involves two steps. First, courts ascertain whether the jurisprudence has already determined in a satisfactory manner the degree of deference to be accorded with regard to a particular category of question. Second, where the first inquiry proves unfruitful, courts must proceed to an analysis of the factors making it possible to identify the proper standard of review.

The analysis must be contextual. As mentioned above, it is dependent on the application of a number of relevant factors, including: (1) the presence or absence of a privative clause; (2) the purpose of the tribunal as determined by interpretation of enabling legislation; (3) the nature of the question at issue, and; (4) the expertise of the tribunal. In many cases, it will not be necessary to consider all of the factors, as some of them may be determinative in the application of the reasonableness standard in a specific case.

Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at paras. 62-64

[18] The City submits that in the present case, while the question of whether to permit the extension or enlargement of a valid legal, non-conforming use pursuant to Section 45 of the Planning Act is part of the regular jurisdiction and practice of the Ontario Municipal Board, the question of the existence of a legal, non-conforming right and its entitlements pursuant to clause 34(9)(a) is not a matter that is regularly considered by the Board. It is, therefore, submitted that given the nature of this question of law, the standard of review is correctness.

[19] While the City is correct that no one case squarely deals with the Board’s ability to consider its jurisdiction under Section 34(9) of the Planning Act, I am satisfied from a review of all of the jurisprudence that the Board has specialized expertise in interpreting the provisions of the Planning Act, including Section 34, and in applying its underlying policies.

[20] As stated by the Ontario Court of Appeal in London (City of) v. Ayerswood Development:

Questions of law that engage the specialized expertise of the Board, such as the interpretation of its own statute, attract a standard of reasonableness. Questions of law that are of general application for which the Board has no special expertise are reviewed on a standard of correctness.

London (City of) v. Ayerswood Development (2002), 2002 3225 (ON CA), 167 O.A.C. 120 at para. 7 (C.A.) See also Toronto (City) v. Romlek Enterprises, [2009] O.J. No. 2232 at para. 25 (Div. Ct.)

[21] However, in cases where the Board is dealing with appeals involving the interpretation of the Planning Act, the standard of review is that of reasonableness. As stated by the Divisional Court in R&G Realty Management v. North York (City):

[T]he Board is a highly specialized tribunal in a technical field not part of the normal expertise of the Court. [This factor] support[s] a higher degree of deference.

To the extent that this appeal involves questions of law, those issues relate to the interpretation and application of the Planning Act and related planning documents, specifically the City’s Official Plan… The Supreme Court of Canada has noted that deference is owed to a decision maker with specialized expertise interpreting its home statute or a closely related statute … The Board has specialized expertise in planning matters, including the interpretation of its constitutive and related enactments.

I am therefore of the view that the applicable standard of review for this appeal is that of reasonableness.

R&G Realty Management v. North York (City), 2009 CarswellOnt 4717 at paras. 5-7 (Div. Ct.)

[22] Moreover, in Toronto (City) v. R&G Realty Management Inc. the Divisional Court also found that the standard of review is reasonableness in granting leave to appeal from a decision of the Board on a question of law that involves the application of statutes and policies within the particular expertise of the Board. The Divisional Court found:

The standard of review on an appeal from the OMB on a question of law attracts deference when the question of law involves the application of statutes and policies within the particular expertise of the Board. This is such a case. Accordingly, the test on this leave application is whether there is reason to doubt the reasonableness of the Board decision: Essex (City) v. Material Handling Problems Solvers Inc., [2003] O.J. No. 4619 (Div. Ct.).

Toronto (City) v. R&G Realty Management Inc. (2009), 62 O.M.B.R. 58 at para. 6 (Div. Ct.)

[23] I, therefore, find the appropriate standard of review in the case before me, is reasonableness.

Analysis and Conclusion

[24] TDL raised no serious quarrel to challenge the City’s assertion that the documentary evidence before the Board indicated that the zoning by-laws of a number of former area municipalities, now amalgamated into the City of Ottawa, contained provisions similar to Section 3 of the CZBL.

[25] However, TDL submits that the evidence before the Board did not establish the province-wide application of provisions similar to those found in Section 3 of the CZBL, such as to transcend the particular interests of the City in this matter.

[26] In my opinion, despite the absence of any evidence before the Board as to province-wide application, the legality of Section 3 of the CZBL and of similar by-laws enacted by the former area municipalities amalgamated into the City, is of sufficient importance to warrant the attention of the Divisional Court.

[27] The City defends the impugned provisions of the CZBL on the basis that it is the general intention of planning legislation to eventually eliminate non-conforming uses and replace them with permitted uses. The City relies on the evidence of its planner, Mr. Leclair, as being consistent with this policy.

[28] On the other hand, the City admits that the interpretation of Section 3 of the CZBL is open to considerable debate, such as to arguably run afoul of Section 34(9) of the Planning Act. First, it is admitted that without any clear distinction between “voluntary” damage in Section 3(3), and “involuntary” damage in Section 3(4) of the CZBL, the By-Law triggers termination of a legal non-conforming use in circumstances where a property owner undertakes repair, maintenance or the upgrade of an existing structure without alteration of its pre-existing use, and without encroaching beyond the existing footprint of the original structure. Secondly, the City admits the Board received evidence from its own planner, Mr. Leclair, who agreed that an act of maintenance such as replacing windows in a building could amount to involuntary damage terminating a legal non-conforming use. Thirdly, the City also admits that there were no temporal limitations in Section 34(9) of the Planning Act which would legitimize the loss of a legal non-conforming right pursuant to Section 3 of the CZBL, if a building is not repaired or reoccupied before the expiry of two years.

[29] The City invites this court to simply accept that its position with respect to the definition of “damage” in the By-Law is evolving, and to remit the matter back to the Board to rewrite the offending provisions. On the other hand, the City posits that this court may nonetheless conclude that voluntary “demolition” of a structure as under Section 3(4) of the CZBL justifies termination of legal non-conforming rights in the absence of any intention to continue the non-conforming use at the time the by-law was passed, coupled with an interruption in continuity or physical existence of the structure.

[30] In making these arguments, the City relies heavily on what was apparently a patent change in use in 884709 Ontario Ltd. v. Ottawa (City), 1992 CarswellOnt 516 (Gen. Div.) at para. 6. However, the evidence put before the Board by the City’s planner, Mr. Leclair, as to a mere act of maintenance in changing windows triggering termination of a legal non-conforming use, is evidence that falls well short of that received by the court in 884709 Ontario Ltd., supra.

[31] The City also made repeated reference to the decision of the Ontario Court of Appeal in Haldimand-Norfolk (Regional Municipality) v. Fagundes, 2000 CarswellOnt 2041 at paras. 17-19 in support of its assertion that in order to establish bona fide intention to preserve a legal non-conforming use, the intention to continue prior use must be coupled with continuation of the actual use of the property so far as is possible. To illustrate the point, the City also referred me to the more recent decision of this court in Gallos v. Toronto (City), 2008 CarswellOnt 6758 (Sup.Ct.) where the Court found a legal non-conforming use was lost to a property owner who deliberately altered a commercial enterprise within the footprint of a structure or building to gain the benefit of a liquor license available only to a structure or building whose size was stipulated in the by-law in that case. The owner’s subsequent expansion did not allow the owner to restore a lawful non-conforming use which predated the expansion.

[32] In my opinion, the Board carefully considered these and other cases offered by the City, including the decision of the Ontario Court of Appeal in Heutinck v. Oakland (Township), 1997 CarswellOnt 4653, and reasonably concluded that the results could be distinguished in circumstances where loss of non-conforming rights fell on the heels of a fundamental change in use by a property owner after the passing of a by-law.

[33] More importantly, I find no cause to question the Board’s reasoned consideration and application of the decisions of the Supreme Court of Canada in Central Jewish Institute v. Toronto(City), 1948 3 (SCC), [1948] S.C.R. 101 and Saint-Romuald (City) v. Olivier, 2001 SCC 57, [2001] 2 S.C.R. 898 to the facts before me. I observe that the court in Central Jewish Institute at pp. 103 and 111 upheld a property owner’s rights to expand a lawful non-conforming use within the confines of its existing footprint where the agreement to remodel the property did not preclude demolition and repair of its exterior. Moreover, the Board specifically applied the latter reasoning in Saint-Romuald, where Justice Binnie described the entitlement encompassed by the doctrine of acquired rights to be premised upon “ ‘the real and reasonable expectations’ of the landowner… ‘[N]ormal evolution’ may occur in some uses with the passage of time, and … ‘a use protected by acquired rights may…adapt to the demands of the market or the technology’ ” (para.19.) While Justice Binnie acknowledged the limitation to the changes which may be brought about in the case of intensification of pre-existing uses to a building, he concluded that continuation in use, even at an intensified level, is clearly protected so long as the character of the structure is not so different in terms of impact on the community, as to result in an altogether different use (para 25). In any case, the court’s objective in examining the effect of the zoning by-laws on the scope of acquired rights is to maintain a fair balance between the individual landowner’s interest and the community’s interest (para. 34). Justice Binnie laid out the factors to consider in approaching the issue of limitation on acquired rights as follows:

1. It is firstly necessary to characterize the purpose of the pre-existing use (Central Jewish Institute, supra). The purpose for which the premises were used (i.e., “the use”) is a function of the activities actually carried on at the site prior to the new by-law restrictions.

2. Where the current use is merely an intensification of the pre-existing activity, it will rarely be open to objection. However, where the intensification is such as to go beyond a matter of degree and constitutes, in terms of community impact, a difference in kind (as in the hypothetical case of the pig farm discussed above), the protection may be lost.

3. To the extent a landowner expands its activities beyond those it engaged in before (as where a custom picture-framing shop attempted to add a landscaping business in Nepean (City) v. D’Angelo (1998), 49 M.P.L.R. (2d) 243 (Ont. Ct. (Gen. Div.)), the added activities may be held to be too remote from the earlier activities to be protected under the non-conforming use. In such a case, the added activities are simply outside any fair definition of the pre-existing use and it is unnecessary to evaluate “neighbourhood effects”.

4. To the extent activities are added, altered or modified within the scope of the original purpose (i.e., activities that are ancillary to, or closely related to, the pre-existing activities), the Court has to balance the landowner’s interest against the community interest, taking into account the nature of the pre-existing use (e.g., the degree to which it clashes with surrounding land uses), the degree of remoteness (the closer to the original activity, the more unassailable the acquired right) and the new or aggravated neighbourhood effects (e.g., the addition of a rock crusher in a residential neighbourhood is likely to be more disruptive than the addition of a fax machine). The greater the disruption, the more tightly drawn will be the definition of the pre-existing use or acquired right. This approach does not rob the landowner of an entitlement. By definition, the limitation applies only to added, altered or modified activities.

5. Neighbourhood effects, unless obvious, should not be assumed but should be established by evidence if they are to be relied upon.

6. The resulting characterization of the acquired right (or legal non-conforming use) should not be so general as to liberate the owner from the constraints of what he actually did, and not be so narrow as to rob him of some flexibility in the reasonable evolution of prior activities. The degree of this flexibility may vary with the type of use. Here, for example, the pre-existing use is a nightclub business which in its nature requires renewal and change. That change, within reasonable limits, should be accommodated.

7. While the definition of the acquired right will always have an element of subjective judgment, the criteria mentioned above constitute an attempt to ground the Court’s decision in the objective facts. The outcome of the characterization analysis should not turn on personal value judgments, such as whether nude dancing is more or less deplorable than cowboy singing. I am unable, with respect, to accept as legally relevant my colleague’s observation that “[w]hereas erotic entertainment seeks to sexually arouse the audience by the stripping and suggestive behaviour engaged in by the performers, country and western shows seek to entertain by providing a showcase for the special talents of singers, musicians and dancers” (para. 76). Serious music is also commonly thought to arouse the passions profoundly, but in terms of acquired rights, music stores should not be differentiated by whether they offer Muzak or Mozart.

(para.39)

[34] I find no reason to conclude from the Board’s Reasons that it ran afoul of this approach.

[35] The Ontario Court of Appeal in Ottawa (City) v. Capital Parking Inc. (2002), 2002 41644 (ON CA), 59 O.R. (3d) 327 at pp. 336 and 337 applied the reasoning in Saint-Romuald to the effect that where performance standards imposed by the enactment of a by-law do not alter the nature of the use, but interfere with the real and reasonable expectations flowing from the use to which the property was put before the by-law was enacted, those performance standards interfere with acquired rights.

[36] In specific reference to Capital Parking, supra, where it engaged the reasoning applied in Saint-Romuald, the Board concluded that acquired rights entitled property owners to some flexibility in the operation of the use, including normal evolution of some uses. The Board concluded that normal evolution of use could encompass demolition and rebuilding of a property within its footprint with the intention to continue the use of the building or structure as it existed prior to the enactment of a by-law. I find no error in the Board’s reasoning in this respect.

[37] In concluding that Section 3 of the CZBL operated to frustrate the normal evolution of a legal non-conforming use through renewal and change, the Board accepted the reasoning in Rotstein v. Oro-Medonte (Township of) (2002), 34 M.P.L.R. (3d) 266 (Ont.Sup.Ct.) and Mohammed v. Dysart (Municipality) Building Official (2003), 45 M.P.L.R. (3d) 282 (Ont.Sup.Ct.) in support of the proposition that where a landowner demonstrates a long established pattern of use, there is no loss of rights that flows from interruption in use for renovations or repairs, whether or not within the control of the property owner, and regardless of the time needed to effect repairs. Again, I find no cause to doubt the Board’s reasoning in this regard.

[38] In attempting to allay any concerns over the potential loss of non-conforming rights where damage is not repaired and a building not re-occupied before the expiry of two years, the City counters that, in accordance with custom, if the City issues a building permit, the right to effect the repairs crystallizes without risk of loss of acquired rights. Leaving aside the fact that no evidence was proffered in support of this custom, the case law cited by the City, including Country Pork Ltd. v. Ashfield (Township), 2002 CarswellOnt 2492 (C.A.) and Pedwell v. Pelham (Town), 2003 CarswellOnt 1701 (C.A.), does not contain the reassurance offered by the City. These cases refer to crystallization of rights which would compel a municipal authority to issue a building permit where the request for a permit complied with the law at the time an application was made; that is, prior to a new by-law which alters permitted use or performance standards. As such, I cannot find any error in the reasoning of the Board where it found that nothing in Section 34(9)(a) of the Planning Act allows acquired rights to legal non-conforming uses to be extinguished if repairs or renovations are not completed before the expiry of two years.

Conclusion

[39] Save and except where my order supports the agreement of counsel to restore the provisions of Section 3(6) to (8) of the CZBL, I am satisfied the Board’s decision in this matter was well reasoned and correct. I am unable to conclude that any aspect of the Board’s decision falls short of the standard of review. The motion for leave to appeal to the Divisional Court is, therefore, dismissed with costs payable by the City to TDL.

Costs

[40] I have received Costs Outlines from both parties in this matter. The City’s Costs Outline reflects that it would have sought fees in the amount of $6,560 plus disbursements of $141.20 had it been successful on the motion. The fees claimed on a partial indemnity rate are in accordance with the City’s Fees By-Law which specifies that Legal Services is to claim $160 per hour for legal counsel.

[41] By contrast, the Costs Outline from TDL reflects partial indemnity fees including counsel fee for appearance on the motion of $24,511.75 and substantial indemnity fees, including counsel fee for appearance on the motion, in the amount of $29,736 plus disbursements in the amount of $1,331.29.

[42] I note that both parties emphasize the complexity of the proceedings and the importance of the issues in reference to the factors set out in Rule 57.01(1) in support of the costs claimed in this matter. In addition, TDL points to conduct on the part of the City that unduly lengthened the duration of the proceeding. In particular, TDL submits that the City conceded in oral argument that there were flaws in Section 3 of the CZBL as it is currently written and that if granted leave the City would seek an order to remit the matter to the Board for a hearing. As previously noted, TDL argued this relief could have been sought by the City without seeking leave to appeal to the Divisional Court pursuant to Section 43 of the Ontario Municipal Board Act and Rules 110 to 118 of the Ontario Municipal Board Rules. As such, TDL argues this motion by the City of Ottawa was unnecessary.

[43] In my opinion, given the importance of the legal issues raised by this matter, I would not be inclined to award substantial indemnity costs notwithstanding the alternate route available to the City to seek relief in this matter. I add that, notwithstanding the complexity of the motion acknowledged by both parties before me, the disparity in partial indemnity fees claimed is quite significant and cannot be explained solely by reference to the application of the City Fees By-Law.

[44] After having considered my comments in respect of costs, if the parties are unable to arrive at some agreement with respect to costs, they shall deliver brief submissions of no longer than five pages in length in addition to a Bill of Costs and time dockets within 30 days and I shall fix costs.

Madam Justice Toscano Roccamo

DATE RELEASED: November 9, 2009