Overview

[1] The Appellant, Mr. Leandro, owns property in the Respondent Town of New Tecumseth (the “Town”). He is also the president of a company that operates a micro-cultivation facility with a license under the Cannabis Act, S.C. 2018, c. 16.

[2] The Appellant’s property is zoned for agricultural use under the Town’s “Zoning By-law”. The relevant bylaw’s definition of “agricultural” excludes a “Medical Marihuana Production Facility.” That by-law was not amended after the passage of the Cannabis Act in 2018, which legalized cannabis for non-medical use.

[3] The Town continued to take the position that anyone seeking to produce and/or process cannabis pursuant to a license issued by Health Canada in an agricultural zone required a Zoning By-law amendment.

[4] Mr. Leandro applied for such an amendment, but the Town Council denied his application. Mr. Leandro appealed this decision to the Ontario Land Tribunal (the “OLT”). He also brought an application before the Normal Farm Practices Protection Board (“NFPPB”) for a determination that the operation of a micro-cultivation cannabis production facility is a normal farm practice and that the Town’s Zoning By-law interferes with this practice. Under s.6(1) of the Farm and Food Production Protection Act, 1998, S.O. 1998, c. 1, “[n]o municipal by-law applies to restrict a normal farm practice carried on as part of an agricultural operation.”

[5] After launching his appeal to the OLT and bringing his application to the NFPPB, Mr. Leandro retained legal counsel. He then brought an application to the Ontario Superior Court of Justice seeking a determination that, based on a plain reading of the text of the Town’s Zoning By-law, he was entitled to grow, harvest, dry and package cannabis on his property. His argument was that the relevant by-law prohibited a medical marihuana production facility, and he was not operating a medical marihuana production facility. Mr. Leandro’s OLT appeal and NFPPB application were, with the consent of both parties, held in abeyance by both adjudicative bodies pending a determination of Mr. Leandro’s application to the Superior Court.

[6] Mr. Leandro’s Superior Court application came before J.R. McCarthy J. on December 22, 2021. On that date the application judge, on his own initiative, and after hearing from both parties that they were prepared to argue the application, determined that the application was premature because the OLT and NFPPB proceedings had not run their course. He also determined that either of these proceedings could render the Superior Court application moot. Therefore, he adjourned Mr. Leandro’s Superior Court application sine die, returnable to him on ten days’ notice, by either party.

[7] This is an appeal from that decision. The Appellant argues that the application judge erred in applying the principles of prematurity and mootness to justify adjourning his Superior Court application on an indefinite basis. According to him, it is only in that application that he can get the determination he is seeking – namely that the activity he is pursuing on his property is legal under the applicable Zoning By-law. If this is the case, there is no need for him to pursue his OLT appeal or his NFPPB application.

[8] If Mr. Leandro’s position on this issue is accepted and the interlocutory order below is set aside, he seeks to have this Court determine the issue on the application.

[9] For the reasons that follow, I would grant the appeal, set aside the order below and make a determination that the zoning by-law at issue does not prohibit Mr. Leandro from growing, harvesting, drying and packaging cannabis on his property.

Factual Background

The Parties

[10] Mr. Leandro is the owner of a property municipally known as 5776 11th Line, Cookstown, Ontario (the “Property”). The Property is located in the Town. Mr. Leandro is also the President and sole shareholder of Stinky Greens Organic Limited (the “Company”), which has been issued a licence under the Cannabis Act to operate a Micro-Cultivation Facility.

[11] Through his Company Mr. Leandro wishes to continue to grow, harvest, dry and package cannabis on the Property in accordance with the licence he has been issued.

The Town’s Zoning By-Law

[12] The Property is zoned as “Agricultural 1 (A1)” under the Town’s Zoning By-Law 2014-126 (the “Zoning By-Law”). This zoning permits agricultural uses and an agricultural processing establishment.

[13] Section 13 of the Zoning By-Law defines “agricultural” as follows:

A use of a lot, building or structures for the purpose of the growing of field crops, flower gardening, truck gardening, berry crops, forestry, mushroom farming, tree crops, nurseries, aviaries, apiaries, removal of sod or farms for the grazing, breeding, raising, boarding of livestock, or any other similar uses carried on in the field of general agriculture, including selling, packaging, treating, warehousing, or sorting of produce, crops or livestock produced. “Agricultural” shall have a corresponding meaning. The definition shall not include a Medical Marihuana Production Facility.

[14] The same section defines “agricultural processing establishment” as:

A lot, building or structure used for the processing of products directly derived from agricultural, including forestry, and may include the processing, storage and transport of such products locally grown. The amount of water required for processing shall not exceed 4,500 cubic litres per day.

[15] Mr. Leandro and the Company do not operate a Medical Marihuana Production Facility. The growing, harvesting, drying, and packaging of cannabis grown on the Property uses much less than 4,500 cubic litres of water per day.

The Official Plan

[16] The Property is designated as “Agricultural” under the Town’s Official Plan. The Official Plan defines “Agricultural Uses” as including the “growing of crops”. It contains no restrictions on the nature of the crops that may be grown.

[17] Section 34(1) of the Planning Act, R.S.O. 1990, c. P.13 requires councils of local municipalities to pass zoning by-laws if they wish to restrict the use of land.

The Events Leading to the Court Application

[18] Town staff took the position that the Zoning By-Law prohibited Mr. Leandro from growing and processing a cannabis crop on the Property even though he had a federally issued licence to do so. They advised him that he had to file a rezoning application to obtain permission from the Town to carry on those activities. Mr. Leandro did so prior to retaining counsel.

[19] After he filed his rezoning application, Town staff released a report recommending that his application be granted. The Town Council refused to approve the application. Mr. Leandro filed an appeal to the OLT from this decision. As described above, he also filed a NFPPB application for a declaration that the Zoning By-Law was interfering with a “normal farming practice”.

[20] After filing his appeal to the OLT and his NFPPB application Mr. Leandro retained legal counsel. He then brought the application which is the subject of these proceedings. With the consent of counsel for the Town, both the OLT and the NFPPB stayed the proceedings before them pending a determination of Mr. Leandro’s court application.

[21] Mr. Leandro has been operating the micro-cultivation production facility since 2020. The Town has agreed not to prosecute him pending the completion of the proceedings he has commenced.

The Application Judge’s Decision

[22] As noted above, the application judge determined that the application was premature and possibly moot. He therefore adjourned the application sine die, returnable to him on ten days’ notice, pending the outcome of the OLT appeal and the NFPPB application.

[23] According to the application judge in his oral reasons:

Should the applicant be successful on either the appeal or the Board application, the court would not need to hear this application as the sole issue in dispute would be moot. There would be no truly adversarial context within which this court would need to adjudicate. I am aware of no particular circumstances which can justify the expenditure of limited judicial resources to resolve the issue at this juncture.

[24] He also found that:

The principle of prematurity also plays a role in the present consideration. The courts should be reluctant to intercede in the processes and procedures of administrative bodies until those bodies have fully adjudicated on matters which are within their respective jurisdictions. This is especially the case where the applicant or respondent would both have the right to appeal or seek judicial review of the decisions of those respective bodies.

[25] Central to the application judge’s conclusion respecting mootness and prematurity was his view that, “[t]he issue that this court is being asked to adjudicate upon is the very issue which is squarely before [the OLT and the NFPPB].” Therefore, “the outcome of those proceedings will very likely leave no live issue for this court to determine as a court of first instance”.

[26] Mr. Leandro sought leave to appeal to the Divisional Court from the application judge’s decision. Leave was granted on May 30, 2022.

Standard of Review

[27] There is no issue that the applicable standard of review is the one that applies to appeals. In this case, Mr. Leandro submits that the Application Judge committed an error of law when he adjourned his application based on mootness and prematurity. Therefore, the applicable standard of review is correctness.

Position of the Parties

[28] Mr. Leandro submits that the application judge erred when he failed to appreciate that the issue in dispute on the court application was not the same issue that was before the OLT or the NFPPB. Neither of those administrative bodies had the jurisdiction to determine the issue that was before the application judge, namely whether the Zoning By-law prohibited his use of the Property. In fact, both proceedings presumed that the Zoning By-law prohibited those uses. If it did not, there would be no need to apply for a rezoning amendment, or for a declaration that the Zoning By-Law was interfering with a “normal farming practice.”

[29] Mr Leandro also argues that if we agree that the application judge erred when he adjourned his application, this court should deal with the issue raised in the application. Pursuant to s. 134(1)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43 “[u]nless otherwise provided, a court to which an appeal is taken may, (a) make an order or decision that ought to or could have been made by the court or tribunal appealed from”.

[30] According to Mr. Leandro, the Zoning By-Law permits the growing and processing of field crops within a building on the property. Cannabis is a field crop. The only restriction on this use in the Zoning By-Law is to prohibit a Medical Marihuana Production Facility. He does not operate a Medical Marihuana Production Facility.

[31] The Town argues that the application judge was correct when he found that if Mr. Leandro was successful on either of the two administrative proceedings he had commenced, there would be no need for the court to determine the application that forms the basis for this appeal. Therefore, he appropriately applied the principles of mootness and prematurity to adjourn Mr. Leandro’s application.

[32] The Town also submits that if this Court finds that the application judge erred, the matter should be returned to the Superior Court for a determination.

[33] In the event that this Court decides to hear the issue at the heart of the application, it is the Town’s position that the Zoning By-Law applies to prohibit the use of a micro-cultivation cannabis production facility in the agricultural zone. According to the Town, interpreting the Zoning By-Law requires a consideration of the Town Council’s intent when passing the by-law. Doing so reveals that the Town Council considered the impacts of a marihuana production facility as a land use and determined that the appropriate location for such uses were in the “industrial zones”. Thus, the legislative intent was to permit marihuana production in industrial zones and to specifically prohibit such use in the agricultural zones.

[34] The Town also argues that a fair and liberal interpretation of the Zoning By-law permits a cannabis production facility in the industrial zones and prohibits it in the agricultural zones. According to the Town, cannabis is not a regular agricultural crop. It is heavily regulated and requires significant security measures atypical for crops, such as security fencing, lighting, and federally issued licences for the crop to be grown legally. The Town’s intention was to prohibit cannabis production in the agricultural and rural zones. The legalization of cannabis through the Cannabis Act provided a number of licenses for the production of cannabis. The Town submits that the Zoning By-Law definition of Medical Marihuana Production Facility includes the production of medical marihuana or cannabis and is not limited to medical marihuana. The definition also requires that licences be issued by the federal Minister of Health to produce and process cannabis. Thus, the Zoning By-Law is not restricted only to medical marihuana production facilities and ought to include any type of cannabis production. In making this submission, the Town argues that the courts have taken the position that they are not to be too critical or demand too much of a municipality and that they should interpret their by-laws benevolently and support them if possible.

Analysis

The application judge erred when he adjourned the Superior Court application

[35] Central to the application judge’s finding that the application should be adjourned on the basis of prematurity and mootness is his conclusion that,“[t]he issue that this court is being asked to adjudicate upon is the very issue which is squarely before [the OLT and the NFPPB]” The Town concedes that this finding is not correct and that the issue of interpreting the meaning of the Zoning By-Law is not within the jurisdiction of either the OLT or the NFPPB.

[36] As the Supreme Court of Canada made clear in Borowski v. Canada (Attorney General), 1989 123 (SCC), [1989] 1 S.C.R. 342 at para. 15:

[T]he doctrine of mootness is part of a general policy that a court may decline to decide a case which merely raises a hypothetical or abstract question. The general principle applies when the decision of the court will not have the effect of resolving some controversy affecting or potentially affecting the rights of the parties.

In this case, neither of the administrative proceedings will resolve the issue of whether the Zoning By-law prohibits the operation of a Micro-Cultivation Facility pursuant to a license issued under the Cannabis Act. Even if Mr. Leandro were to be successful under one or both of his administrative applications, this issue will remain a live one.

[37] One consideration that drives the doctrine of mootness is a concern for scarce judicial resources. In this case, the result of the application judge’s decision is to force Mr. Leandro to pursue two proceedings in two forums that make up part of the Ontario justice system (which, broadly defined, does include administrative tribunals) when the premise for proceeding in those forums may not exist. If the Zoning By-law does not prohibit the activity at issue, there is no need for a rezoning amendment or a finding that the activity is a “normal farming practice.” A rational use of the justice system’s resources would dictate that the first thing to do is to determine if the Zoning By-law does prohibit the activity. Again, it is conceded that this can only be done by the court.

[38] With respect to prematurity, it is a doctrine that prohibits the appeal or judicial review of decisions made during the course of a proceeding before an administrative tribunal has completed its proceedings. Its purpose is to avoid the fragmentation and costs associated with forays into court before a tribunal has completed its process. Underlying the doctrine is the realization that only at the end of the process can it be known whether there is any necessity to appeal or judicially review an impugned decision: see Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, 111 O.R. (3d) 561, at para. 69. In the present case, the application was not an attempt to appeal or judicially review the decisions of either the OLT or the NFPPB. It was a separate application to ask the court to determine an issue that was not before either of those tribunals and that neither could determine. Thus, the doctrine of prematurity has no application.

[39] For these reasons, I find that the application judge erred when he adjourned Mr. Leandro’s application. He should have acceded to the parties’ request that he hear the application.

This court should proceed to hear the application

[40] The Town did not dispute Mr. Leandro’s assertion that this court has the jurisdiction to hear the application and that deciding whether to do so involves the exercise of our discretion.

[41] The Town objects to this court’s exercising its discretion in favour of hearing the application (as opposed to referring it back to the Superior Court for a hearing), based on a potential, future effect on appeal rights. If the application is heard by a single judge of the Superior Court, an appeal lies to the Court of Appeal, as of right. If the application is heard by the Divisional Court, an appeal lies to the Court of Appeal, but only with leave.

[42] Weighed against the possible prejudice to appeal rights is the fact that Mr. Leandro must incur the costs of and delay associated with appearing on another hearing before the Superior Court to argue a point that he was prepared to argue once and has now been argued. This prejudice is greater than the prejudice associated with possibly having to seek leave before being able to appeal this decision to the Court of Appeal.

The Zoning By-law does not prohibit the operation of a micro-cultivation facility pursuant to a licence issued under the Cannabis Act

[43] The modern principles of statutory interpretation apply to the interpretation of a municipal by-law. Thus, the interpretation of a by-law involves consideration of the text of the by-law, the intent of the municipal council, and the purpose and scheme of the by-law as a whole: see St. Mary’s Cement Inc. (Canada) v. Clarington (Municipality), 2012 ONCA 884, 356 D.L.R. (4th) 448, at para. 17.

[44] For ease of reference, the relevant text of the Zoning By-law is reproduced again below.

[45] The Zoning By-law sets out the following with respect to the use of property that is designated as agricultural:

A use of a lot, building or structures for the purpose of the growing of field crops, flower gardening, truck gardening, berry crops, forestry, mushroom farming, tree crops, nurseries, aviaries, apiaries, removal of sod or farms for the grazing, breeding, raising, boarding of livestock, or any other similar uses carried on in the field of general agriculture, including selling, packaging, treating, warehousing, or sorting of produce, crops or livestock produced. “Agricultural” shall have a corresponding meaning. The definition shall not include a Medical Marihuana Production Facility.

[46] It goes on to describe an “agricultural processing facility” in the following terms:

A lot, building or structure used for the processing of products directly derived from agricultural, including forestry, and may include the processing, storage and transport of such products locally grown. The amount of water required for processing shall not exceed 4,500 cubic litres per day.

[47] As already noted, the Town does not dispute the following facts:

(a) Marihuana is a “field crop”

(b) Mr. Leandro’s micro-cultivation processing facility requires considerably less than 4,500 cubic litres of water per day; and

[48] Given this, the express language of the Zoning By-law would suggest that it does not prohibit the activity that Mr. Leandro is engaged in on his Property.

[49] The Town disagrees. In doing so it argues that the language of the by-law encompasses not just a Medical Marihuana Production Facility, but any cannabis production facility that operates pursuant to a license granted by the federal government. In making this submission the Town relies on the definition of Medical Marihuana Production Facility contained in the by-law. That text reads:

“Medical Marihuana Production Facility” shall mean the use of land, building or structure to possess, produce, sell, provide, ship, deliver, transport, test or destroy medical marihuana or cannabis authorized by a license issued by the federal Minister of Health, pursuant to Section 25 of the Marihuana for Medical Purposes Regulation, SOR/2013-119, under the Controlled Drugs and Substances Act, SC 1996, as amended from time to time.

[50] The Town points to the phrase “medical marihuana or cannabis” and the fact that the activities are authorized by a license issued by the federal Minister of Health to argue that the use of the word “Medical Marihuana Production Facility” encompasses the activity being carried on by Mr Leandro. He is operating a facility that produces cannabis pursuant to a license issued by the federal government.

[51] The problem with this submission is that even if it could be argued that the phrase “medical marihuana or cannabis” could be taken as denoting either “medical marihuana” or “cannabis” as opposed to “medical marihuana” or “medical cannabis” (which I do not accept), the definition is very specific as to the type of license that must be in place to capture the activity in the definition. It is a license issued under s. 25 of the Marihuana for Medical Purposes Regulation ( which has since been repealed). Mr. Leandro’s license was not issued under this regulation. Therefore, his activity is not captured under the definition of “medical marihuana production facility.”

[52] The Town also argues that even if the exact words of the by-law do not capture the activities at issue, the law requires that courts not be too technical when interpreting municipal by-laws. They should be read broadly and purposively with a view to ensuring that the legislative intent of the council that passed the by-law is achieved.

[53] The Town submits that the legislative intent of the council that passed the Zoning By-law in 2014 is clear. It wished to treat cannabis production in a way that was different from other farming activities because of the concerns it had about security, light and odour. Thus, it was not prepared to permit cannabis growing or production on any property zoned “agricultural”. It was only prepared to do so in certain areas that were zoned “industrial”.

[54] The Town states that the Zoning By-law was prompted by federal legislation that permitted individuals and entities to produce medical marihuana pursuant to a federally issued license. Council had concerns and asked the Town staff to provide options for the appropriate zoning of this type of facility.

[55] Town staff prepared a report, which is dated May 5, 2014 (the “Report”). The Town relied on the Report to support its submission that there was clear evidence that the intention of the Town when it passed the Zoning By-law was to limit all cannabis growing and production to certain areas that were zoned “Industrial”.

[56] The Report’s stated objective is to “seek Council direction regarding Medical Marihuana Production Facilities in the Town”. Neither the objective nor the Report make any reference to any other kind of cannabis production facilities; not surprising since when Report was prepared, and the Zoning By-law passed there were no other cannabis production facilities that could be licensed under federal legislation.

[57] The Report went on to discuss the fact that the definition of “agriculture” in place at the time could be interpreted as permitting Medical Marihuana Production Facilities as an “agricultural” use.

[58] In discussing the proposed facilities, the Report makes it clear that Medical Marihuana Production Facilities “require producers to obtain licenses from Health Canada that will only allow for large scale production of medical marihuana facilities”.

[59] Mr. Leandro possesses a license to operate and own a micro-cultivation facility. The restrictions in effect for this type of facility necessitate that they operate on a much smaller scale than Medical Marihuana Production Facilities. For instance, the holder of micro-cultivation license must clearly delineate a surface area (also know as “canopy space”) that does not exceed 200 square metres. The license-holder can only cultivate, propagate, or harvest all of part of the cannabis plant within the canopy space. Mr. Leandro operates his facility in an air-conditioned building. Further, of the 278 square metre canopy space allowance to grow the cannabis crop in the building, only 176.5 square metres are being utilized.

[60] The Report then goes on to give Council several options for dealing with Medical Marihuana Facilities, the first of which was that the definition of agriculture in the Zoning By-Law be amended to exclude them. This is the option Council adopted.

[61] The Report offers no basis for finding that there is evidence that Council’s intention in passing the Zoning By-law was to exclude other smaller types of marihuana production facilities. Again, it is difficult to find that such an intention could have existed when at the time that the Zoning By-Law was passed no other types of cannabis production facilities were legal under federal law.

[62] Thus, contrary to the submissions of the Town, there is no evidence that when the Town Council passed the Zoning By-law their intention was to prohibit the location of any cannabis production facility in an area zoned as agricultural. Therefore, there is no need to distort the express wording of the Zoning By-law to give effect to an intention that may not have been clearly expressed. From the evidentiary record before us, the intention of Council when it passed the Zoning By-law was to prohibit large scale Medical Marihuana Production Facilities from being located on land zoned as agricultural. It was not to prohibit a facility such as Mr. Leandro’s, which is a smaller micro-cultivation facility.

Conclusion

[63] For these reasons the appeal is allowed, the application judge’s order is set aside, and a declaration shall issue that the Town’s Zoning By-law does not prohibit the growing, harvesting, drying and packaging of cannabis unless such actions are carried out in a Medical Marihuana Production Facility. Failing any agreement, the parties shall make short written submissions on the question of costs. Mr. Leandro shall file his submissions within 10 days of the release of these reasons and the Town shall have 10 days thereafter to respond.

Sachs J.

I agree _______________________________

Backhouse J.

I agree _______________________________

Lococo J.

Released: February 13, 2024

CITATION: Leandro v. New Tecumseth (Town of), 2024 ONSC 886

DIVISIONAL COURT FILE NO.: DC-23-1387

DATE: 20240213

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Sachs, Backhouse and Lococo JJ.

BETWEEN:

GUISEPPE LEANDRO

Appellant

– and –

TOWN OF NEW TECUMSETH

Respondent

REASONS FOR JUDGMENT

SACHS J.

Released: February 13, 2024

Leandro v. New Tecumseth (Town of), 2024 ONSC 886

Case Summary

Overview

Factual Background

The Parties

The Town’s Zoning By-Law

The Official Plan

The Events Leading to the Court Application

The Application Judge’s Decision

Standard of Review

Position of the Parties

Analysis

The application judge erred when he adjourned the Superior Court application

This court should proceed to hear the application

The Zoning By-law does not prohibit the operation of a micro-cultivation facility pursuant to a licence issued under the Cannabis Act

Conclusion

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 5

Legal Tests 3

Legislation 5