CITATION: City of Toronto v. SheppBonn Ltd. 2014 ONSC 5964

DIVISIONAL COURT FILE NO.: 264/14

DATE: 20141014

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT – TORONTO

RE: CITY OF TORONTO v. SHEPPBONN LTD.

BEFORE: NORDHEIMER J.

COUNSEL: B. O’Callaghan & K. Franz, for the moving party

S. Waqué & I. Tang, for the respondent

HEARD: October 9, 2014

E N D O R S E M E N T

[1] The City of Toronto seeks leave to appeal from the decision of the Ontario Municipal Board dated May 15, 2014 in which the OMB determined that it had jurisdiction to decide whether site plan control applied to a proposed change to the use of the respondent’s property. At the conclusion of the hearing, I granted leave to appeal with reasons to follow. I now provide those reasons.

[2] The respondent owns a property located on Shepherd Avenue East in Toronto. It proposed to lease this property to a tenant who would use the property to operate a health and wellness school. Considerable alterations would need to be made to the interior of the building in order to be able to put the building to this use. The tenant applied to the City for building permits. The City refused to issue building permits because of its position that site plan control applied to the property under the relevant by-law and, thus, various plans and drawings were required.

[3] The respondent applied to the OMB for directions under s. 114(7) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Schedule A. That section reads:

The owner of land or the City may make a motion for directions to have the Ontario Municipal Board determine a dispute about whether a matter referred to in paragraph 1 or 2 of subsection (5) is subject to site plan control.

[4] The City objected to the jurisdiction of the OMB to hear the matter on the basis that the decision as to whether site plan control applied under the by-law was a matter for the Chief Building Official to determine under the Building Code Act, 1992, S.O. 1992, c. 23, subject to any appeal therefrom to the Superior Court of Justice.

[5] The OMB heard both the respondent’s motion for directions and the City’s objection. In its decision, the OMB held that it had jurisdiction pursuant to s. 114(7) of the COTA. It is important to recite the precise findings of the OMB that are found at paras. 48 & 49 of its decision. The OMB said:

[48] With respect to the Motion by the City, the Board finds that it does not have the jurisdiction to make a determination as to whether or not the CBO of the City was correct to refuse to issue a building permit to the Respondent for failure to comply with s. 114 of the COTA as that is a question exclusively for the Superior Court to decide pursuant to the provisions of the OBCA.

[49] The Board after having carefully considered all of the evidence before it as well as the arguments of counsel, agrees with counsel for SheppBonn’s submission and finds that it does have jurisdiction pursuant to s. 114(7) of the COTA to make a determination as to whether site plan control applies in this case.

[6] With due respect to the OMB, there appears to me to be a fundamental conflict in the findings made in these two paragraphs. The Chief Building Official refused to issue a building permit on the basis that the property in question was subject to site plan control. If a proposal constitutes “development” as that term is defined in s. 114, and the property is subject to site plan control, then the party seeking a building permit must submit various plans and drawings, as set out in s. 114(5), to the City for approval. It is difficult to see how the OMB could determine that it did not have jurisdiction to determine if the Chief Building Official was correct to refuse a building permit, based on her conclusion that the property was subject to site plan control, while at the same time determining that it did have the jurisdiction to determine whether site plan control applied in this case. A conclusion on the latter question directly affects the result on the former question.

[7] Two central questions arise in this case. One is regarding the standard of review applicable to the OMB’s decision. The City says that the standard of review is correctness because the OMB is deciding a true question of jurisdiction. The respondent says that the standard of review is reasonableness because the OMB was interpreting a statute that is closely connected to its core function.

[8] I must say that it seems to me that the appropriate standard of review in this case is correctness. The central issue is whether the OMB has jurisdiction to decide whether site plan control applies to this property. That issue would appear to raise a true question of jurisdiction. In Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, Bastarache and LeBel JJ. said, at para. 59:

Administrative bodies must also be correct in their determinations of true questions of jurisdiction or vires. […] “Jurisdiction” is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. The tribunal must interpret the grant of authority correctly or its action will be found to be ultra vires or to constitute a wrongful decline of jurisdiction: [citation omitted]

[9] The respondent submits that the subsequent decision in McLean v. British Columbia (Securities Commission), 2013 SCC 67, [2013] 3 S.C.R. 895 modifies the above statement from Dunsmuir. In particular, the court in McLean held that an administrative decision maker’s “interpretation of its home or closely-connected statutes” should be subject to deference on judicial review. However, directly after making that point, the majority in McLean, through Moldaver J., said, at para. 32:

First, this Court has long recognized that certain categories of questions -- even when they involve the interpretation of a home statute -- warrant review on a correctness standard (Dunsmuir, at paras. 58-61)

I note that the same paragraph from Dunsmuir that I have quoted above is cited as one of those categories where the correctness standard applies. Consequently, I do not believe that McLean modifies the clear statement in Dunsmuir that true questions of jurisdiction are to be reviewed on a standard of correctness.

[10] I do acknowledge, as the respondent points out, that on a review of the authorities it does not appear that the City has taken a consistent position as to whether the OMB has such jurisdiction or not. However, any inconsistency in the City’s position is not relevant to the question. The OMB either has jurisdiction or it does not. No party can confer jurisdiction on the OMB if there is no statutory basis for it.

[11] The test for leave to appeal is set out in Essex (City) v. Material Handling Problems Solvers Inc. where Blair J. said, at para. 3:

It is well established that to obtain leave to appeal, the moving party must establish:

a) that the proposed appeal raises a question of law;

b) that there is reason to doubt the correctness of the decision of the O.M.B. with respect to the question of law raised; and,

c) that the question of law raised is of sufficient general or public importance to merit the attention of the Divisional Court.

[12] There does not appear to be any dispute between the parties that the question raised here is one that involves a question of law.

[13] As I have already indicated, it seems to me that there is reason to doubt the correctness of the decision of the OMB based on the content of its own reasons. The only way of reconciling those two paragraphs of the OMB’s decision is if one concludes that there is concurrent jurisdiction on the issue. That finding would then raise the question how, if there is a disagreement between the Chief Building Official and the OMB (as there is in this case), the disagreement gets resolved. Among other problems is that, while there is a statutory right of appeal from the Chief Building Official to the Superior Court of Justice, there is no right of appeal from the OMB: COTA, s. 114(8).

[14] There is, however, an additional reason to doubt the correctness of the decision based on the language of s. 114 of the COTA. There is no dispute that, under the City’s by-law, all of the City of Toronto has been designated as being subject to site plan control, subject to certain exemptions contained in the by-law. Section 114(5) prohibits any person from undertaking any “development” (which is a defined term in s. 114) in the designated area unless the City approves plans showing the location of all facilities along with drawings for each building.

[15] As I earlier set out, s. 114(7) gives jurisdiction to the OMB to “determine a dispute about whether a matter referred to in paragraph 1 or 2 of subsection (5) is subject to site plan control”. The matters under paragraphs 1 or 2 of s. 114(5) are wide and varied. For example, the required drawings can include provisions for interior walkways, stairs, elevators and escalators. They can also include issues such as the character, scale, appearance and design features of buildings and sustainable design elements, including without limitation trees, shrubs, hedges, plantings or other ground cover, permeable paving materials, street furniture, curb ramps, waste and recycling containers and bicycle parking facilities.

[16] While it may be that s. 114(7) is not particularly well worded, the subsection appears to provide that the OMB has jurisdiction to decide if one or more of these specific aspects of any given proposal is subject to site plan control. That is very different from deciding whether the proposal as a whole is subject to site plan control. That latter jurisdiction would appear to be conferred on the Chief Building Official under the provisions of the Building Code Act, 1992, S.O. 1992, c. 23.

[17] I would also note that under s. 114(15) of the COTA, the OMB is given authority to approve the plans and drawings required under s. 114(5) if the City delays in giving approval or if the owner of the lands is not satisfied with any conditions imposed by the City. Again this jurisdiction can only arise if the proposal is subject to site plan control. It would seem odd for the Legislature to expressly grant these subsidiary authorities to the OMB but leave the primary authority, that is whether site plan control even applies, unmentioned.

[18] None of this is to say that the OMB’s decision is in error but it does give further reason to doubt the correctness of the decision.

[19] Lastly, I am satisfied that this issue raises matters of sufficient general or public importance to merit the attention of the Divisional Court. I reach that conclusion for two reasons. One is the fact that this issue appears to arise not infrequently, as the authorities demonstrate, and, thus, it is desirable that the issue be settled. The other is that, while this case arises under the COTA, there is the equivalent provision to s. 114(7) in s. 41(4.2) of the Planning Act, R.S.O. 1990, c. P. 13. It is therefore an issue that has an effect for most municipalities throughout the Province.

[20] For these reasons, the motion for leave to appeal was granted. While I fixed the costs of the motion at $7,500 inclusive of disbursements and HST, I left the disposition of those costs to the panel hearing the appeal.

NORDHEIMER J.

DATE: October 14, 2014