CITATION: The City of Toronto v. Home Depot Holdings Inc., 2010 ONSC 1669
DIVISIONAL COURT FILE NO.: 527/09
DATE: 20100322
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
THE CITY OF TORONTO
R. Andrew Biggart, for the Applicant
Applicant
- and -
HOME DEPOT HOLDINGS INC.
Steven A. Zakem and Patrick Harrington, for Respondent
Respondent
HEARD at Toronto: March 9, 2010
H. Sachs J.
INTRODUCTION
[1] The City of Toronto (the “City”) seeks leave to appeal to the Divisional Court the decision of the Ontario Municipal Board (the “Board”) dated October 21, 2009. In that decision the Board determined that the Respondent (“Home Depot”) was entitled to develop a large retail store upon lands designated as “Employment Areas” pursuant to Toronto’s Official Plan without going through a municipal comprehensive review.
[2] Pursuant to the provisions of the Growth Plan for the Greater Golden Horseshoe Area (the “Growth Plan”), a conversion to a non-employment use within a designated Employment Area is not permitted without a municipal comprehensive review. The Growth Plan is clear that a “Major Retail” use is considered a non-employment use. Home Depot admits that the Board’s decision must conform to the Growth Plan and that Home Depot is seeking to develop the lands in question for a Major Retail use.
[3] The Board decided that by virtue of a policy that had been passed by Toronto City Council and approved by the Board shortly prior to the provincial government passing the legislation that implemented the Growth Plan there was no “conversion” to a non-employment use within a designated Employment Area and, therefore, no comprehensive municipal review was required.
[4] The City argues that in coming to the decision they did the Board erred in law. Because of this there is good reason to doubt the correctness of their decision. Further, the City submitted that the Board’s decision has broad-reaching implications for the land use planning process in Ontario. Therefore, leave to appeal should be granted.
[5] Home Depot resists the City’s application on three bases. First, counsel for Home Depot argue that the application is premature. Second, they say that the Board committed no error of law and that there is no reason to doubt the correctness of the Board’s decision. Third, they submit that the matter concerns a policy that is unique to the City, not likely to affect other developments and hence is of no general importance.
[6] On November 28, 2002, the City approved a new Official Plan that, among other things, contained policies with respect to uses permitted upon lands designated as “Employment Areas.” One of those policies was Policy 4.6.3 Pursuant to Policy 4.6.3:
Large scale, stand alone retail stores…are not permitted in Employment Areas in the Central Waterfront and are only permitted in other Employment Areas fronting onto major streets as shown on Map 3, that also form the boundary of the Employment Areas through the enactment of a zoning by-law…
[7] On April 9, 2003, Home Depot filed a Notice of Appeal with the Ministry of Municipal Affairs and Housing with respect to Policy 4.6.3. Home Depot was concerned that the effect of the policy would be to prohibit the location of new large-scale retail stores on major streets that did not form part of the boundary of the Employment Areas.
[8] Negotiations ensued between the City and Home Depot. These negotiations resulted in a settlement in the form of a new policy being inserted in the Official Plan, Policy 4.6.4. Policy 4.6.4 provides as follows:
Consideration may also be given to permit large-scale and stand-alone retail stores in locations on major streets, as shown on Map 3, that do not form part of the boundary of Employment Areas, other than in the Central Waterfront, only by way of an Official Plan Amendment, if it can be demonstrated, among other matters, that: …
[9] On June 5, 2006, the parties presented the settlement that resulted in Policy 4.6.4 to the Board for approval. The Board approved the settlement that day. Eleven days later the Province of Ontario released the Growth Plan for the Greater Golden Horseshoe, including Toronto. The Growth Plan was enacted pursuant to the Places to Grow Act, 2005, S.O. 2005, c. 15. Subsection 14(2) of the Places to Grow Act states that, despite any other act, a growth plan prevails in the case of a conflict between a growth plan and an Official Plan or a zoning by-law. Subsection 14(1) requires that all decisions made under the Planning Act by the Board or by a municipal council conform with the growth plan applicable to the growth plan area.
[10] Section 2.2.6.5 of the Growth Plan for the Greater Golden Horseshoe states:
Municipalities may permit conversion of lands within employment areas, to non-employment uses, only through a municipal comprehensive review where it has been demonstrated that …
For the purposes of this policy, major retail uses are considered non-employment uses.
[11] In December of 2006, six months after the Growth Plan came into effect, Home Depot filed an application to amend the City’s Official Plan in order for Home Depot to obtain permission to develop a Home Depot Store and other retail uses totaling approximately 295,000 square feet. Home Depot also filed a companion re-zoning application. The proposed development was to be located within an Employment Area on a major street that did not form part of the boundary of the Employment Area. As such, the application was filed pursuant to Policy 4.6.4. In the summer of 2007, Home Depot’s consultant planner was told that the City was now considering that the applications did not conform to the Growth Plan.
[12] On January 18, 2008, Home Depot appealed its applications to the Board. Based on an earlier order of the Board, the parties on appeal – the City and Home Depot – agreed to phase the appeal: Phase 1 would address the “threshold” issue as to whether the proposed retail development upon the designated Employment Areas land was prohibited by the Growth Plan from taking place without a municipal comprehensive review. Phase 2 would consider the site specific merits of Home Depot’s proposed development.
[13] The Board first heard Home Depot’s appeal on Phase 1 in November of 2008. On January 29, 2009, the Board released a decision finding that the applications did not require a municipal comprehensive review and permitting Home Depot’s applications to proceed to a hearing on their merits.
[14] The City sought from the Board Chair a review of the Board’s decision. The Board Chair ordered that the matter be reheard by a different panel. The second hearing on Phase 1 occurred in September of 2009.
THE BOARD’S DECISION
[15] On October 21, 2009, the second panel of the Board released its decision on Phase 1. Again, the Board decided that Home Depot’s applications could proceed without a municipal comprehensive review as they did not constitute a conversion of employment areas as contemplated by Section 2.2.6.5 of the Growth Plan. The City is applying for leave to appeal this decision.
[16] The Board accepted that its decision must be in accordance with the Growth Plan and that Home Depot’s application was an application to develop a Major Retail use within a designated Employment Area. Under the Growth Plan, a Major Retail use is a non-employment use. As such, if the proposed development constituted a “conversion” from employment to non-employment use under the Growth Plan, the development could only be permitted through a municipal comprehensive review.
[17] The Board decided that a “conversion” is a change of status from employment use to non-employment use in an Employment Area. However, according to the Board, “if the principle or permission for a proposed use for large retail commercial is already ‘established, authorized or contemplated,’ in an employment area, no conversion would be required.”
[18] In the view of the Board, by approving and adopting Policy 4.6.4 the City had authorized, permitted or contemplated the large scale retail use proposed by Home Depot in its applications to amend the Official Plan and to re-zone, and, therefore, Home Depot’s application did not constitute a conversion of lands within an employment area to non-employment uses. In arriving at its decision, the Board pointed to the fact that when the City settled Home Depot’s appeal by approving Policy 4.6.4, the City must have been aware of the proposed provisions of the Growth Plan.
[19] While not before this Court, after the first decision of the Board, City Council enacted an Official Plan Amendment pursuant to the Conformity Exercise required under the Places to Grow Act. That amendment deleted Policy 4.6.4. Home Depot has appealed the deletion of this policy. That appeal is pending before the Board.
THE TEST FOR LEAVE TO APPEAL
[20] The test for granting leave to appeal an interlocutory decision to the Divisional Court is set out in rule 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. This motion is brought pursuant to rule 62.02(4)(b). Pursuant to r. 62.02(4)(b), leave is to be granted if the City meets the following criteria:
There appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
SHOULD LEAVE TO APPEAL BE GRANTED?
Prematurity
[21] In this case the Board has rendered its decision on Phase 1 only. The site-specific merits of Home Depot’s proposed development have yet to be considered and decided upon by the Board.
[22] The Divisional Court has repeatedly held that it will refrain from fragmenting proceedings before administrative tribunals. Fragmentation causes both delay and interruption to statutory administrative proceedings. It can also result in an overuse of scarce judicial resources. Thus, except in extraordinary circumstances, it is preferable to allow the proceedings to be completed before the tribunal (Ackerman v. Ontario (Provincial Police), 2010 ONSC 910 (Div. Ct) at paras. 11-19; Ontario College of Art v. Ontario (Human Rights Commission) (1993), 11 O.R. (3d) 798 (Div. Ct.) at pp. 799-800; Gore v. College of Physicians & Surgeons of Ontario (2008), 92 O.R. (3d) 195 (Div. Ct.) at para. 66). This proposition applies equally to situations where the Board has bifurcated its own hearing to address preliminary issues raised by the parties (Maplehurst Bakeries Inc. v. Brampton (City) (1999), 44 O.R. (3d) 667 (Div. Ct.) at para. 2; Eastpine Kennedy-Steeles Ltd. v. Markham (Town), [2000] O.J. No. 809 (Div. Ct.) at paras. 3-5).
[23] There is reason to believe that this may be one of those extraordinary cases where it would be appropriate for the Divisional Court to provide guidance on the issue before all of the proceedings before the Board are completed. The question at issue in Phase 1 is one that will not be affected by any of the evidence that is led in Phase 2. Further, the answer to the question could be determinative of the proceedings. The City’s appeal raises a fundamental question about the application of the Growth Plan and, specifically, what constitutes a “conversion” within the meaning of that Plan. That question may be of significance not only for the development in question, but for other developments in areas that are subject to the Growth Plan. Guidance from this court on appeal may not only result in a more economic process in this proceeding, but may also save time and expense in other applications that may engage the same issue. Thus, while the issue of prematurity can be revisited by the panel hearing the appeal, I am satisfied that the opportunity to address the matters raised in this appeal should not be foreclosed at this stage.
Is there good reason to doubt the correctness of the Board’s decision?
[24] Appeals to the Divisional Court from the Board only lie on a question of law (Ontario Municipal Board Act, R.S.O. 1990, c.O-28, s. 96(1)). I am satisfied that the subject of this appeal is a question of law concerning the interpretation of various statutory instruments and policies. As put by the Board in its decision
Ours is a finding of law, based on our analysis of the texts of the Official Plan and the Growth Plan within the proper statutory framework and guided by the relevant jurisprudence. (p. 7)
[25] In assessing whether there is good reason to doubt the correctness of the Board’s interpretation under r. 62.02(4)(b), I must be satisfied that the decision is open to serious debate. I do not need to conclude that the decision is wrong or probably wrong (Holt v. Anderson (2005), 143 A.C.W.S. (3d) 121 (Ont. Div. Ct.); Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 282 at 284 (Gen. Div.).
[26] The threshold determination at the leave stage is different from the standard of review assessment by the panel hearing the appeal. The panel hearing the appeal may well decide the question of law was one within the unique expertise of the Board, and that the standard of review applicable to the Board’s decision is reasonableness. This reasonableness standard requires a court to assess the “process of reasoning used” by the Board to reach its decision and to consider whether the Board’s interpretation “was within the range of reasonable interpretations of the statutory provision in issue” (Taub v. Investment Dealers Assn. of Canada, 2009 ONCA 628, 98 O.R. (3d) 169 (C.A.) at para. 30.). Thus, on appeal, it is not enough for a court to conclude that it would interpret the provisions at issue differently than the tribunal.
[27] In its October 21, 2009 decision, the Board found that Policy 4.6.4, when read in the context of Policy 4.6.3, constitutes “authorization, permission or contemplation” of large scale retail stores in the Employment Areas. As such there was no “conversion” within the meaning of the Growth Plan. As the Board saw it, both policies perform the same function — they set out the prescriptions for the locational limitations of large scale retail outlets. The Board stated, “Section 4.6.3 addresses the limitations at the edge of the Employment Areas. In contrast, Section 4.6.4 addresses the limitations of the interior of the Employment Areas”(p. 11).
[28] In arriving at its decision, the Board considered the difference in language between Policy 4.6.3 and Policy 4.6.4, namely that in Policy 4.6.3 large scale retail stores are “permitted” within Employment Areas fronting onto major streets that are not in the Central Waterfront and in Policy 4.6.4 “consideration may … be given to permit” large scale retail stores on major streets in the interior of an Employment Area. In the Board’s view, the jurisprudence demands an interpretation of Official Plans that is “large, liberal and purposive,” rather than “punctilious, fastidious and narrow”(Board Decision at p. 13 citing Bele Himmel Investments v. City of Mississauga, [1982] O.J. No. 1200 (Div. Ct.)). Applying this principle the Board found that the difference in wording was not significant.
[29] In my view, there is good reason to question whether the Board’s interpretation of the provisions in issue is correct. In comparing the wording of policies 4.6.3 and 4.6.4, there is a clear difference between “permitting” a use and being prepared to “consider” whether to permit a use. This difference would not render Policy 4.6.4 meaningless. As Home Depot’s lawyers made clear, without Policy 4.6.4, the Official Plan might be interpreted as having “prohibited” the use in question within the interior of an Employment Area. By implementing Policy 4.6.4, City Council made it apparent that this was not the case. The use was not “prohibited,” but neither was it “permitted.”
[30] This then raises the question of whether the Board’s interpretation of the Growth Plan is open to serious debate, such that there is reason to doubt the correctness of its decision. The Board found that if an Official Plan contains a provision that stipulates that consideration may be given to amending that Plan to include a use in a particular area, the use has been “authorized, permitted or contemplated” and therefore, there is no “conversion” within the meaning of the Growth Plan. In my view, there is good reason to question whether this is the case and further, whether the decision of the Divisional Court in Bele Himmel can be used to sustain such an interpretation.
Does the proposed appeal involve a matter of such importance that leave to appeal should be granted?
[31] The Board’s interpretation of what constitutes a “conversion” from lands designated as Employment Areas to non-employment use under the Growth Plan has implications for the land use planning process in Ontario. The Board’s finding that if a proposed use has been contemplated in principle within an Official Plan then there is no “conversion” limits the application of the Growth Plan and undermines the legislative intention to prohibit Major Retail uses from being introduced within Employment Areas without a municipal comprehensive review. This is an issue that extends beyond the interests of the parties and should be addressed by the Divisional Court.
CONCLUSION
[32] For these reasons I am granting the motion for leave to appeal. With respect to the question of costs, they shall follow the event: whoever is successful on the appeal is entitled to the costs of this motion. For the guidance of the panel on the appeal, on the agreement of the parties, I would fix the partial indemnity costs of this motion at $10,000.00.
H. Sachs J.
Released: March 22, 2010
CITATION: The City of Toronto v. Home Depot Holdings Inc., 2010 ONSC 1669
DIVISIONAL COURT FILE NO.: 527/09
DATE: 20100322
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
H. Sachs J.
BETWEEN:
The City of Toronto
Applicant
- and –
Home Depot Holdings Inc.
Respondent
REASONS FOR JUDGMENT
SACHS J.
Released: March 22, 2010