Court File No.: 194/09

Released: 20091028

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Re: SmartCentres Inc. et al, Applicants and City of Toronto, Respondent

Before: Karakatsanis J.

Counsel: Alan Lenczner and Dennis Wood, for the Applicants

Brendan O’Callaghan, Thomas H. Wall, and Jessica Braun for the Respondent, the City of Toronto

Eric K. Gillespie and Karen L. Dawson, for the East Toronto Community Coalition

Heard at Toronto: October 6, 2009

ENDORSEMENT

[1] The Applicants seek leave to appeal two decisions of the Ontario Municipal Board (OMB): the decision dated March 3, 2009 refusing an application to amend the Official Plan and the zoning bylaw to permit a mixed use commercial and retail development; and the decision dated April 21, 2009, dismissing a request to review that decision pursuant to s. 43 of the Ontario Municipal Board Act, R.S.O. 1990, c. O28 (OMBA).

[2] Appeals from the OMB to the Divisional Court lie only on a question of law pursuant to s. 96 of the OMBA. The finding or determination of the Board upon any question of fact within its jurisdiction is binding and conclusive.

Background

[3] The Applicants sought approval of a large scale, primarily retail development in lands that were designated ‘industrial’ in the 1994 Official Plan. The relevant issue in the proceedings was whether the proposal complied with Policy 9.18 (b) of the 1994 Official Plan. The OMB stated that the purpose of Policy 9.18 was to discourage the loss of industrial lands. Policy 9.18 (b) states:

Council will not consider redesignation of industrially-designated land so as to permit any non-industrial use … without first having considered a study of the area …. Amongst other things, such study shall have regard for: …:

(a) the number and types of industrial firms and employees in the areas that would be adversely affected;

(b) the impact on any surrounding industrial lands that would not be redesignated;

[4] The 2002 Official Plan made changes with respect to the lands surrounding the subject property. The surrounding lands previously designated ‘industrial’ were designated ‘employment area’ lands. There were no lands designated industrial in the 2002 Official Plan. Additional uses were permitted for those properties now subsumed under ‘employment area’ lands, including some office and retail uses. Under the new Official Plan, and new policy 4.6.3, large scale retail uses could be approved through a bylaw amendment rather than an Official Plan amendment, provided, among other considerations, that “the functioning of other economic activities within the Employment Areas and the economic health of nearby shopping districts are not adversely affected.” While the surrounding properties are subject to the 2002 Official Plan, the subject property remained under the ‘industrial’ designation and the 1994 Official Plan.

[5] The OMB recognized that with the approval of the 2002 Official Plan, there were technically no longer any surrounding ‘industrial’ lands as they had been subsumed in the employment district and designated ‘employment area’ lands. The Board concluded: “it is reasonable and appropriate to infer for the purposes of test Policy 9.18 that surrounding industrial lands are those formerly designated industrial lands now having an Employment Area designation.” The OMB therefore considered the impact on the surrounding lands that were designated ‘industrial’ in the 1994 Official Plan (and ‘employment area’ in the 2002 Official Plan) and concluded that the proposal did not represent good planning, would destabilize the area and did not satisfy the test under Policy 9.18(b) of the 1994 Official Plan. As a result, it dismissed the application for an amendment to permit the proposed mixed use commercial/retail development.

[6] The Applicants submit that the Board erred:

• in applying Policy 9.18 because there were no longer any surrounding ‘industrial’ lands; by substituting the word “industrial” with the words “employment area”; in equating policy 9.18 under the 1994 Official Plan with policy 4.6.3 under the 2002 Official Plan; and in augmenting Policy 4.6.3 with the concept of “retail contagion”.

• in failing to properly exercise its jurisdiction under s. 43 of the OMBA.

Leave to Appeal

[7] In granting leave the Court must be satisfied that:

(a) there is some reason to doubt the legal correctness of the Board's decision on a question of law; and

(b) the question of law is of sufficient importance to warrant the attention of the Divisional Court.

[8] I need not be satisfied that the decision is wrong, or even probably wrong. I must be satisfied that there is some reason to doubt the legal correctness of the Board’s decision on a question of law.

[9] Interpretation of an Official Plan raises questions of law. Such questions of law engage the policy expertise of the OMB and attract a standard of reasonableness.

Analysis

[10] I am not satisfied that there is good reason to doubt the OMB was reasonable in considering the impact of the proposal on the surrounding lands formerly designated ‘industrial’ and now designated ‘employment area’. To conclude that Policy 9.18 was rendered inapplicable as a result of the revisions with the 2002 Official Plan, would result in the OMB assessing the project without considering the impact of the proposal on the surrounding lands. Those lands, formerly designated ‘industrial’, continued under a successor designation and continued to be restricted to the former uses under the existing by-law. In this context, reference to the ‘industrial/now employment’ lands is a factual description of the surrounding lands.

[11] Clearly, the 2002 Official Plan permitted wider uses for the ‘employment area’ lands previously designated ‘industrial’. Furthermore, large retail uses could be approved through a by-law amendment and did not require an Official Plan amendment. However, the OMB did not hold that the ‘industrial’ and ‘employment area’ designations were identical; nor did it equate Policy 9.18 with Policy 4.6.3. The OMB stated: “it is undeniable that the intent to protect industrial/employment lands from threatening land uses is maintained between Policy 9.18 and Policy 4.6.3.” The OMB was entitled to apply its policy expertise to determine that the policies shared similar purposes and were connected. In any event, in refusing to grant the application, the OMB clearly assessed the application under Policy 9.18 of the 1994 Official Plan.

[12] I am not persuaded that the finding of ‘retail contagion’ based upon expert and other evidence before it raises a question of law or would have the effect of ‘reading out’ Policy 4.6.3. The OMB was entitled to consider evidence relating to any adverse impact on the surrounding area, even if would also be a consideration in an application to amend the zoning by-law. The Board used the concept of ‘retail contagion’ to assess the impact on planning certainty and stability of land use in the neighbouring lands. At the very least this is a question of mixed fact and law and engages the expertise of this highly specialized tribunal.

[13] Finally, the OMB’s concluding comments with respect to whether a future similar application would comply with Policy 4.6.3 under the 2002 Official Plan were obiter and not binding.

[14] The OMB decision is policy based and invoked the Board’s expertise as a planning tribunal to interpret and apply the Official Plan policies. At the conclusion of a lengthy hearing, the OMB was persuaded that the proposal did not constitute good planning and would very likely destabilize the area including the formerly designated industrial lands within the context of Policy 9.18 of the 1994 Official Plan. I am not persuaded that there is some reason to doubt the legal correctness of the Board's original decision on a question of law.

[15] With respect to the s. 43 request to rehear, the Board dismissed the request for review of the original decision on the basis that the “substantive issues in the Request are now before the Divisional Court in the Notice of Motion for Leave to Appeal”. The Board’s right to review decisions under s. 43 of the OMBA is broad and discretionary. I am not persuaded that there is reason to doubt that the Board exercised its discretion reasonably.

[16] Leave to appeal is denied. Counsel’s joint submission that $10,000 was a reasonable quantum is appropriate in these circumstances. The Respondent shall have its costs of $10,000.

Karakatsanis J.

Released: October , 2009