Court File and Parties

CITATION: Rosen v. Corporation of the Town of Blue Mountains, 2012 ONSC 4215

DIVISIONAL COURT FILE NO.: 41/12

DATE: 2012/07/19

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Sheldon Rosen and The Lodges at Blue Mountain Corporation

and:

Corporation of the Town of Blue Mountains

BEFORE: Herman J.

COUNSEL: Stanley M. Makuch, Konstantine J. Stavrakos, for the Moving Parties

Leo Longo, Andrea Skinner, for the Responding Party

HEARD at Toronto: June 7, 2012

ENDORSEMENT

[1] The moving parties, Sheldon Rosen and The Lodges at Blue Mountain Corporation, (“LBM”) seek leave to appeal from the decision of the Ontario Municipal Board (the “Board”), which denied their appeal of interim control by-laws and amendments to the Official Plan and zoning by-laws.

[2] As the Board indicated in its reasons: “It is the use of single detached dwellings in low density areas for STA [short term accommodation] that is at the heart of the dispute in these proceedings”.

[3] LBM submits that the Board made several errors of law:

(i) The Board erred in its interpretation of s. 38 of the Planning Act, R.S.O. 1990 c. P.13, which deals with interim control by-laws;

(ii) The Board erred when it concluded that there was sufficient planning justification for the amendments to the Official Plan and zoning by-laws;

(iii) The Board erred when it concluded that the amendments were not inconsistent with the Provincial Policy Statement (“PPS”) and Official Plans;

(iv) The Board erred when it concluded that the amendments did not constitute “people zoning”;

(v) The Board erred when it concluded that the amendments did not contravene the Human Rights Code;

(vi) The Board erred in approving further amendments, which constituted fundamental changes;

(vii) The Board denied procedural fairness in approving further amendments and in failing to provide disclosure of the minutes of an in camera meeting.

The Facts

[4] This case involves the regulation of “Short Term Accommodation” (“STA”) in the Town of the Blue Mountains (“The Town”).

[5] The Town is a four seasons recreation and resort destination, with more than 730,000 visitors a year.

[6] An STA is an accommodation in a residence (as opposed to a hotel, motel, bed and breakfast) of 30 days or less.

[7] Of the 5,619 residential buildings in the Town, about 2,932 are permanently occupied. Many of the remaining dwellings are rented to visitors.

[8] LBM manages the rental of approximately 65 dwellings for their owners. It also owns approximately 15 residential units in the Town, 14 of which are rented for STA use.

[9] According to a survey conducted by LBM, all of its rentals were for periods of less than 30 days and therefore all qualify as STA’s.

[10] Twenty of LBM’s units fall within the areas in which STA’s are not permitted. (The Board, in its reasons, indicates that LBM could continue to operate these units as legal non-conforming uses. However, LBM argues that there are difficulties with the provisions for non-conforming use.)

[11] Over the years, the Town has received complaints from permanent residents about noise, parking, garbage, nuisance, mischief and vandalism, which were believed to have been perpetrated by some occupants of STA units.

[12] In 2006, the Town held a public information meeting in respect of a comprehensive zoning by-law. The Town heard complaints from permanent residents regarding STA’s.

[13] The Town proposed amendments to its Official Plan and its zoning by-laws to restrict STA’s. On October 13, 2007, the Town convened a statutory public meeting to provide notice of the draft amendments.

[14] On February 4, 2008, the Town passed Interim Control By-Law NO. 2008-12 to prohibit, for a period of six months, the use of any land, building or structure for the purpose of an STA on all lands zoned residential. Subsequently, the prohibition in higher density residential areas was lifted.

[15] Council also directed staff to review the issue of STA uses and proceed with the development of draft Official Plan and zoning by-law amendments.

[16] On April 2, 2008, staff presented a report, entitled “Short Term Accommodation Study”, to Council. It recommended changes to the Official Plan and the zoning by-law and indicated that the proposed restrictions were a response to complaints the Town had received from the public related to garbage, noise, parking, overcrowding and safety.

[17] On May 12, 2008, the Town held a second statutory public meeting to present the proposed changes.

[18] On July 7, 2008, Council passed a further Interim Control By-Law, which extended the prohibition period to a total of two years. This was based on staff’s recommendation that more time was needed to complete the study related to STA uses before completing the proposed amendments to the Official Plan and the zoning by-law.

[19] On January 12, 2009, Council adopted Amendment No. 11 to the Official Plan (“OPA 11”), which established policies for STA use as well as amendments to zoning by-laws.

[20] On February 27, 2009, the Corporation of the County of Grey approved OPA 11.

Appeal to the Board

[21] LBM appealed the decision of Council to adopt interim control by-laws, the amendment to the Town’s Official Plan and the amendments to zoning by-laws, which dealt with the regulation of STA’s in the Town.

[22] LBM had four grounds of appeal:

(i) The interim by-laws and amendments were an attempt to regulate the user, rather than the use of the land;

(ii) There was no proper planning justification. No land use study had been undertaken pursuant to s. 38 of the Planning Act;

(iii) There was no evidence that demonstrated any negative impact unique to accommodations of 30 days or less;

(iv) The amendments were not consistent with the Provincial Planning Statement (“PPS”) and did not conform with the Town of Blue Mountain Official Plan and Strategic Plan.

[23] In its decision, issued on June 22, 2011, the Board approved certain amendments to the Official Plan and the zoning by-laws that had been introduced by another party, Blue Mountain Resorts Limited (“BMR”), but otherwise dismissed the appeal.

Test for Leave to Appeal

[24] Section 96 of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 provides that an appeal lies from the Board to the Divisional Court, with leave of the Divisional Court, on a question of law.

[25] Leave to appeal will only be granted if the moving party can demonstrate: (i) there is some reason to doubt the correctness of the decision; and (ii) the question of law is of sufficient importance to warrant the attention of the Divisional Court.

[26] Reason to doubt the correctness of the decision means that the correctness of the decision is “open to very serious debate” (Menkes Lakeshore Ltd. v. Toronto (City), 2007 ONSC 65611 (Div. Ct.), 2007 CarswellOnt 4637, 37 M.P.L.R. (4th) 42, 56 O.M.B.R. 391, 228 O.A.C. 1 (Div. Ct.) at para. 4) or “open to substantial doubt” (Orangeville District Home Builders Association v. The Corporation of the Town of Orangeville, 2011 ONSC 1639 (Div. Ct.) at para. 6).

[27] The proper interpretation of the Planning Act, the consideration of matters of provincial interest, the interpretation and application of an Official Plan, and the conformity of a proposed development with an Official Plan are all questions of law (Toronto (City) v. 2059946 Ontario Ltd. (2007), 38 M.P.L.R. (4th) 176 (Ont. Div. Ct.) at para. 4).

[28] With respect to the second branch of the test for leave to appeal, that is, that the matter be of sufficient importance to warrant the court’s attention, consideration should be given to matters that are of public, rather than private, importance or matters that raise important issues of law or the administration of justice (Menkes Lakeshore Ltd. at para. 14).

[29] For the purpose of considering whether leave should be granted, it is helpful to consider the standard of review if leave were granted. In that case, the Divisional Court would review the Board’s decision on a standard of reasonableness where the question of law engaged the specialized expertise of the Board. Where, on the other hand, the question of law involved a matter of general application and did not engage the specialized expertise of the Board, the standard of review would be correctness (City of Ottawa v. The TDL Group Corporation, [2009] O.J. No. 4811(Div. Ct.) at paras. 20-22; Orangeville District Home Builders at para. 6).

Interpretation of s. 38 - the Interim Control By-Laws

[30] LBM argued before the Board that there was no proper planning justification for the Town to adopt the interim control by-laws.

[31] The Board found that the interim control by-law was an appropriate response to the growing concerns with STA uses in the community. It disagreed that there was no proper planning rationale. After years of trying various responses to residents’ concerns, which proved to be insufficient, the Town was justified in taking a different approach.

[32] Section 38(1) of the Planning Act, R.S.O. 1990, c. P.13 enables a municipality to pass an interim control by-law. It provides that, where a council has directed that a review or study be undertaken with respect to land use planning policies, it may pass a by-law for a period not to exceed one year, prohibiting the use of land, buildings or structures.

[33] The purpose of an interim control by-law is to provide breathing space during which the municipality may study a problem and determine the appropriate response. The power to enact an interim control by-law is “an extraordinary one”. Interim control by-laws have been referred to as “powerful zoning tools” (RSJ Holdings Inc. v. London (City), 2007 SCC 29, [2007] 2 S.C.R. 588 at para. 27).

[34] The direction of a review or study is a precondition to the enactment of an interim control by-law. In LBM’s submission, this precondition is not only a procedural requirement. It is also a substantive one.

[35] In addition to this precondition, the Board has articulated various principles and criteria in its consideration of interim control by-laws. These include: s. 38 must be interpreted strictly; the municipality must substantiate the planning rationale; the by-law must conform with the official plan; the authorized review must be carried out fairly and expeditiously; and there should be sufficient urgency or a pressing concern so as to warrant its imposition (Burlington (City) Interim Control Zoning By-law 61-2005 (Re) (2006), 52 OMBR 449 (OMB) at pp. 454-455 (2006), citing Nolan v. McKillop (Township) (1987), 36 M.P.L.R. 82 at pp. 86-87; Hamilton (Township) Interim Control By-Law 92-65 (Re) (1993), 29 OMBR 129 (OMB) at p. 337).

[36] LBM asserts that the Board did not address whether the staff study met the requirements of s. 38. It points to the principles articulated in the Burlington case, which include requirements that the municipality substantiate the planning rationale behind the interim control by-law and the by-law conform with the official plan and the PPS.

[37] The Board found that the interim control by-law and its extension gave staff the needed time to carry out the study without the potential to compound the problem with more STA’s in areas of concern. Furthermore, the study was expeditious and it followed proper planning principles.

[38] In addition to the staff report, the Board had considerable evidence before it with respect to the nature and magnitude of the problem, as well as evidence that the Town had tried other responses to the problem, which had proved to be ineffective.

[39] While the Board did not specifically refer to the principles applicable to interim control by-laws that had been articulated in other cases, its decision addressed the need for the study and the interim control by-laws, the nature of the problem and the ineffectiveness of other solutions, the expeditious manner in which the study was carried out, the application of proper planning principles and the consistency with the Official Plans and the PPS (which I deal with in more detail, below).

[40] While LBM may disagree with the findings of fact made by the Board, I cannot conclude that there is a reason to doubt the correctness of the decision on a question of law.

Justification for the amendments

[41] LBM submits that the Board did not ensure that there had been a proper review, analysis or justification for the interim control by-laws and the amendments to the Official Plan and the zoning by-laws.

[42] In particular, LBM argues that the Board did not review the substance of the problem, alternative solutions, the impact on tourism and the limitations on non-conforming use. It did not compare complaints involving STA’s to complaints involving other types of accommodations. There was no objective evaluation of the quality and complaints.

[43] The Board heard from a variety of witnesses. LBM’s witnesses were a land use planner, a traffic engineer, an economist, and a visitor and user of LBM’s facilities. The Town’s and BMR’s witnesses were a land use planner, an OPP officer, a traffic engineer, the director of planning and building services for the Town, and a land use planner retained by BMR.

[44] In addition, the Board heard from 13 city residents with respect to their personal experiences, only one of whom spoke against the proposal.

[45] The Board concluded that the complaints were well-founded. The evidence of conflict was categorical. There was convincing evidence of incompatibility with low density residential neighbourhoods. It found no reason to doubt the veracity of the residents’ testimony, which was extensive. It had photographs before it that documented the conditions. It heard evidence of the challenges the OPP encountered in managing the situation.

[46] I cannot conclude that there is reason to doubt the correctness of the Board’s decision on a question of law. It had considerable evidence before it of the problem of STA’s in low density residential neighbourhoods. The Board undertook a thorough analysis of that evidence. It considered LBM’s objections. The Board took into account the fact that the Town had tried other ways to resolve the problem, without success. It concluded that the proposal was a reasonable response to the situation and represented good planning.

Inconsistency with the Provincial Policy Statement and the Official Plans

[47] LBM submits that the Board erred when it failed to determine that the interim control by-laws and the proposed amendments ran counter to the PPS, the Town Official Plan and the County of Grey Official Plan.

[48] Section 3(5) of the Planning Act requires that decisions of a municipal council be consistent with PPS’s. Section 24 requires conformity with official plans.

[49] In Toronto (City) v. 2059946 Ontario Ltd., Lax J. stated that the proper interpretation of an official plan and the conformity of a proposed development with an official plan are questions of law (at para. 4).

[50] LBM points to provisions of the PPS and the County Plan that refer to the goals of promoting tourism and economic development. It submits that the interim control by-laws and amendments are inconsistent with those goals.

[51] The Board rejected this argument. It found that the purpose of the amendments was not to eliminate or limit access to STA units. Rather, STA’s were directed to locations with appropriate levels of servicing and infrastructure, where the intensity of use could be better accommodated and where future growth needs could be met. This was in keeping with the policies of the PPS “for a strong, liveable and healthy community and will provide opportunities for sustainable tourism development”.

[52] With respect to the compatibility between the amendments and the County of Grey Official Plan, the Board found that STA units were distinct commercial entities with the goal of making a profit. These commercial entities had the potential to conflict with the character and stability of existing neighbourhoods because of the constant turnover of people and the difficulty in controlling noise and other nuisances. The Board found that the evidence of conflict was categorical. The Town had to ensure that there was compatibility between the commercial STA use and the existing residential neighbourhoods.

[53] The Board referred to s. 3.17 of the Town’s Official Plan which provides that where different land uses abut, every effort shall be made to avoid potential conflicts, and buffering shall be used where appropriate. The Board considered and rejected LBM’s argument that buffering and mitigating measures could be employed. It concluded that the expectation was that low density residential neighbourhoods would be reserved for permanent dwellings and the protection of the integrity and character of these neighbourhoods should be the paramount objective when considering the establishment of commercial uses in those neighbourhoods.

[54] I cannot conclude that there is reason to doubt the correctness of the decision on a question of law with respect to this issue. The promotion of tourism and economic development cannot be looked at in isolation from other legitimate goals, such as the preservation of the residential nature of certain neighbourhoods. The Board considered the PPS and the two Official Plans, as well as the various interests at stake, and concluded that the amendments were an appropriate response.

[55] The Board gave a detailed consideration to the conformity of the amendments with the provisions of the PPS and the Official Plans. Its reasons stand in contrast to the reasons for decision under review in the case of Toronto (City) v. 2059946 Ontario. In that case, the court granted leave to appeal on a number of questions, including whether the approved use was contrary to the City’s Official Plan Policies and Provincial Policies. Lax J. noted at para. 17: “Apart from a passing reference to ‘the existing statutory and policy framework’, there is no indication that the Board gave any consideration to these issues.”

People-zoning

[56] LBM contends that the amendments constitute unacceptable “people zoning”. In its submission, they are an unacceptable attempt to zone on the basis of the personal characteristics of a person who occupies an STA.

[57] The Board rejected this argument, finding nothing in the definition of an STA to suggest that any personal characteristic of a potential occupant was central to the restrictions imposed.

[58] The leading case on “people zoning” is R. v. Bell, 1979 SCC 36, [1979] 2 S.C.R. 212. In that case, the court considered a by-law that prohibited the use of a dwelling unit by unrelated persons. Writing for the majority, Spence J. stated that “land zoning by people zoning”, that is zoning based on personal characteristics or qualities, was not within the scope of The Planning Act. The legislature never intended to authorize zoning by reference to the relationship of the occupants, rather than to the use of the building.

[59] LBM points to the decision in Mueller v. Tiny (Township), 1976 CarswellOnt 368 (Ont. H.C.J.), in which the court considered the definition of a “seasonal dwelling” in a by-law: “ ‘seasonal dwelling’ means a dwelling used for vacation and recreational purposes by a person who maintains and regularly resides in a permanent dwelling at another location”. Garrett J. held that the by-law was void and illegal for uncertainty and it dealt with a subject the Legislature never intended to deal with, that is, the sort of persons who would be excluded from using summer cottages.

[60] The by-law in Mueller referred to the person using the premises, rather than to the use of the premises. However, the Board in this case referred to numerous decisions that held that references to continuous habitation and permanent residence related to the use of the land and the building, not to the person.

[61] LBM distinguishes these cases on the basis that none of them found that the purpose or effect of the by-laws was to zone by way of personal characteristics.

[62] I do not agree with LBM’s characterization. The purpose and the effect of the amendments under consideration are to provide a regulatory scheme for STA use in the Town. They target the use of the land, not the personal characteristics or qualities of the individuals who use that land. As such, they cannot be said to be people zoning.

The Human Rights Code

[63] In LBM’s submission, the amendments discriminate against persons whose place of origin is outside the Town, contrary to the Human Rights Code, R.S.O. 1990, c. H.19.

[64] Section 2(1) of the Human Rights Code provides that every person has a right to equal treatment with respect to the occupancy of accommodation, without discrimination on the basis of a number of grounds, including place of origin.

[65] Section 11(1) extends the scope of the protections against discrimination to situations where the requirement, qualification or factor is not discrimination on a prohibited ground on its face, but it results in the exclusion, restriction or preference of a group of persons who are identified by a prohibited ground of discrimination.

[66] The Board rejected LBM’s assertion. In doing so, it found that the STA units were not residential housing units. Rather, they provided optional accommodation for recreation purposes. The Board indicated that the goal of the provision in the Code was to prevent discriminatory practices and systemic barriers to adequate and affordable housing.

[67] I have some difficulty with the Board’s reasons, although they appear to have been made in response to LBM’s submission that the STA units provided affordable housing. The prohibitions against discrimination in the Code extend well beyond accommodation in residential housing units. They include the right to equal treatment with respect to services, goods and facilities (s. 1). If, for example, a by-law prohibited persons of a particular gender, race or country of birth from renting an STA for a recreational purpose, it would contravene the Code.

[68] In my opinion, the difficulty with LBM’s position lies not in the distinction between residential and recreational accommodation, but in the distinction between “place of residence” and “place of origin”. LBM contends that the amendments discriminate against individuals who are not resident in the Town. However, it has been determined in numerous cases that “place of residence” on its own is not a prohibited ground of discrimination and is not the same as “place of origin” (see Gardezi v. Insurance Corporation of British Columbia, 2010 BCHRT 262; Dobbin v. Canada (Department of Fisheries and Oceans), [2005] FC 1020; Fisher v. Chicopee Park Dental, [2012] O.H.R.T.D. No. 564).

[69] I therefore arrive at the same conclusion as the Board, that is, the amendments do not constitute discrimination under the Code, although I do so for different reasons.

In Camera meeting and modifications

[70] At the beginning of the hearing before the Board, LBM brought a motion for an order that changes Town Council had approved at an in camera meeting in July 2010 were beyond the power of the Board and the Town had violated procedural requirements.

[71] The Board denied the motion. In the opinion of the Board, the motion was premature because the modifications had not yet been presented to the Board for approval.

[72] During the course of the hearing, BMR presented the modifications. The Board found that the proposed changes were not fundamental and did not change the essence, purpose or effect of the regulatory scheme for STA use in the Town. The Board approved the changes.

[73] LBM also sought disclosure of the minutes of an in camera meeting of Council at which, it says, the modifications were approved. The Board denied the request on the basis that Council’s instructions to its legal counsel were properly given and received in a closed session.

[74] LBM alleges that there were five errors:

(i) the modifications that were approved by the Board were improperly made by the Town at an in camera meeting;

(ii) the Board’s power to modify cannot be used to cure defective processes;

(iii) the modifications changed the nature of the Official Plan and the by-laws and therefore went beyond the authority of the Board under s. 17(50) and s. 34(26) of the Planning Act;

(iv) the effect of the modifications was to change the case LBM had to meet without providing LBM with an adequate opportunity to respond, contrary to the requirements of procedural fairness; and

(v) the Board denied LBM procedural fairness when it did not order disclosure of the minutes of the in camera meeting.

[75] I find no reason to doubt the correctness of the Board’s decision that the motion was premature. There were no proposed modifications before the Board at the time the motion was made.

[76] Furthermore, if the Board had the authority to make modifications to the proposed amendments, there was no precondition that the modifications be subject to public notice. The Town did, however, post notice of the proposed revisions on its website and publish the revisions in the newspapers.

[77] It therefore comes down to two issues: (i) Did the Board have the authority to approve the modifications?; and (ii) Was LBM denied procedural fairness?.

[78] The provisions of the Planning Act that deal with the Board’s authority to make modifications are s. 17(50) and s. 34(26):

17. (50) On an appeal or a transfer, the Municipal Board may approve all or part of the plan as all or part of an official plan, make modifications to all or part of the plan and approve all or part of the plan as modified as an official plan or refuse to approve all or part of the plan. [underlining added]

18. (26) The Municipal Board may,

(a) dismiss the appeal; or

(b) allow the appeal in whole or in part and repeal the by-law in whole or in part or amend the by-law in such manner as the Board may determine or direct the council of the municipality to repeal the by-law in whole or in part or to amend the by-law in accordance with the Board’s order.

[79] LBM’s principal argument is that the changes that were presented by BMR were not modifications pursuant to s. 17(50) but represented fundamental changes. The Board determined that the changes were modifications, which provided clarification and eliminated ambiguities.

[80] The meaning of “modification” under s. 17 (50) was considered by the Court of Appeal in Cloverdale Shopping Centre Ltd. et al. v. Township of Etobicoke et al, 1966 ONCA 205, [1966] 2 O.R. 439 at 454 (C.A.). Aylesworth J.A. stated:

I cannot agree that the nature of the change in the original proposed amendment falls outside the term “modification”. That term by Murray’s New English Dictionary is defined as “limiting, qualifying making changes without altering its essential nature or character”. The Shorter Oxford English Dictionary defines the word as “limitation, restriction, qualification making changes without altering the essential nature…partial alteration”. The word has also been held judicially to include the meaning of “vary”: Souter v. Souter, [1921] N.Z.L.R. 716, and even to include the meaning of “extend or enlarge”: Stevens v. General Steam Navigation Co., [1903] 1 K.B. 890.

Upon a consideration of the Act as a whole, I conclude that the scheme and object of the legislation demands a liberal as opposed to a restrictive interpretation of the word “modifications”. Certainly, I can find no indication in the legislation of any intention to narrowly confine the application of the word. I would hold that the word as used in the Act is synonymous with “vary” or “amend”…

[81] The issue, then, is whether the modifications in question altered the essential nature or character of the initial proposal.

[82] In support of its position, LBM provided the Board with an affidavit from Garry Stamm, a specialist in economic matters related to settlement planning and governance of municipal government. In response, the Town provided an affidavit from Gord Russell, a contract planner with the Town and a registered professional planner.

[83] In LBM’s submission, the changes were extensive and fundamental. It points, in particular, to four changes: (i) the addition of a four guest room limit to the definition of an STA; (ii) the change from a permissive approach to prohibiting STA’s; (iii) the replacement of the word “people” with “resident”; and (iv) the imposition of new and more onerous performance and parking standards.

[84] With respect to the addition of a four guest room limit to the definition of STA, the original version of the definition had no reference to the number of bedrooms. Rather, it limited an STA to eight occupants. The modification retained the number of occupants and added a guest room limit.

[85] In Mr. Stamm’s opinion, the result of the addition of the four guest room was a reduction in the number of available units and was therefore a fundamental change. According to Mr. Russell, Town Building staff had advised that the occupancy of each bedroom or guest room would be assessed as having a capacity of two persons per room where people would be sleeping. Therefore, the number of guestrooms for eight people would be four.

[86] LBM’s second concern is that the approach to STA’s under OPA 11 is changed from one in which STA’s were permitted to one in which they are prohibited. However, the modifications to OPA 11 did not represent any change in policy. It was clear prior to the introduction of the modifications that the Town’s intention was to prohibit STA units in certain residential areas. The original version of the zoning by-law provided that STA’s would not be permitted in areas zoned R1-R4.

[87] LBM’s third concern is that the changes replace the word “person” with “resident”. In the opinion of Mr. Stamm, this creates an additional, subjective requirement and legislates a new discriminatory distinction between people who are in rental accommodations of the same premises for a period of 30 days are less and those who are in rental accommodations for a period of 31 days or more. As I have indicated elsewhere, it is my opinion that such a distinction goes to use, not to people, and is not discriminatory.

[88] LBM’s final concern is that new and more rigorous standards have been applied with respect to matters such as buffering and parking.

[89] In my opinion, these changes do not alter the fundamental character of the proposal that was before the Board and, as such, qualify as modifications within the meaning of s. 17(50) of the Act.

[90] The second issue is whether LBM was denied procedural fairness, either because it was denied disclosure of the notes of the in camera meeting or because it was denied an adequate opportunity to respond to the proposed modifications.

[91] The Board denied LBM’s request for disclosure of the notes on the basis that the meeting was held for the purpose of Council giving instructions to its legal counsel.

[92] The Town says that at the closed meeting, Council obtained legal advice and provided its legal counsel with directions related to potential changes. Two days after the meeting, the Town’s legal counsel circulated a set of proposed amendments to the parties, including LBM, indicating that “Council has endorsed the concept of requesting that the OMB modify OP#11 and [the zoning by-laws] to better reflect its intentions respecting planning regulations concerning STAs”.

[93] Section 239(2) of the Municipal Act, 2001, S.O. 2001, c.25 provides that a meeting of council may be closed to the public if the subject matter being considered is litigation or potential litigation and advice that is subject to solicitor-client privilege.

[94] LBM points to the decision in RSJ Holdings Inc. v. London (City), 16 M.P.L.R. (45h) 1, 2005 ONCA 43895, 205 O.A.C. 150 (C.A.). In that case, the Court of Appeal found that the motion judge had erred in concluding that the closed meetings were permissible. The City had suggested that the subject matter was potential litigation because there was a statutory right of appeal by a person affected by the by-law or because the by-law could be subject to a motion to quash. However, the Court indicated that it was clear that the subject matter being considered by the committees was the interim control by-law and not litigation or potential litigation.

[95] The facts in the case at hand are very different than those in RSJ Holdings. The parties here were in the midst of litigation. The interim control by-law and the Official Plan and zoning by-law amendments were under appeal.

[96] The evidence supports the Board’s finding as to the purpose of the meeting. I therefore have no basis upon which to doubt the correctness of its decision to deny disclosure of the notes of that meeting.

[97] LBM also argues that the effect of the modifications was to change the case LBM had to meet without providing LBM with an adequate opportunity to respond. There is, however, no evidence that LBM was not provided with an adequate opportunity to respond.

[98] Counsel for the Town provided LBM with a copy of the proposed modifications in mid-July 2010, long before the commencement of the hearing at the Board. Although there had been several prehearing conferences by this time, the distribution of the proposed modifications took place before the final exchange of witness statements. The Board, in its reasons, indicates that “[the] modifications were not challenged by LBM”. There is no indication that LBM requested an adjournment or an opportunity to call reply evidence after BMR presented the modifications.

[99] In these circumstances, I cannot conclude that there was a denial of procedural fairness.

Conclusion

[100] For the reasons set out above, I conclude that there is no reason to doubt the correctness of the Board’s decision on questions of law.

[101] Accordingly, leave to appeal is denied.

[102] The Town is the successful party and is therefore entitled to costs. Each party presented a costs outline. LBM’s legal costs totaled $92,318.29. The Town seeks costs of $25,000, inclusive.

[103] The proceeding was, no doubt, important to the parties. The issues have an important public interest component. While some of the issues were complex, the parties had argued the same issues before the Board. In view of LBM’s costs outline, it would be difficult for LBM to argue that the amount sought by the Town is excessive or beyond the amount LBM would expect to pay.

[104] Costs are awarded to the Town in the amount of $20,000, inclusive.

Herman J.

Date: July 19, 2012