Court File and Parties

CITATION: NIAGARA-ON-THE-LAKE v. TWEED FARMS INC., 2020 ONSC 3664

COURT FILE NO.: DC-20-85

DATE: 2020/06/11

SUPERIOR COURT OF JUSTICE – ONTARIO

(DIVISIONAL COURT)

RE: THE TOWN OF NIAGARA-ON-THE-LAKE, Moving Party

AND:

TWEED FARMS INC. and 2470689 ONTARIO INC., Responding Parties

BEFORE: Justice David A. Broad

COUNSEL: Brent K. Harasym and Robert Di Lallo, for the Moving Party

Michael S. Polowin, Roberto D. Aburto and Carolina Campos, for the Responding Party Tweed Farms Inc.

Russell Cheeseman and Stephanie Fleming, for the Responding Party 2470689 Ontario Inc.

HEARD: June 8, 2020

ENDORSEMENT

Background

[1] The moving party the Town of Niagara-on-the-Lake (the “Town”) seeks leave to appeal the decision of Member T.F. Ng of the Local Planning Appeal Tribunal (the “Tribunal”) dated March 26, 2020 in LPAT File No. PL 190456 (the “decision”)[^1]. The motion is made pursuant to s. 37(1) of the Local Planning Appeal Tribunal Act, 2017, S.O. 2017, c. 23, Sched. 1 (the “LPAT Act”) which provides that:

(1) Subject to any general or special Act, an appeal lies from the Tribunal to the Divisional Court, with leave of the Divisional Court, on a question of law, except on matters arising under Part IV.

[2] The decision was made in the context of appeals to the Tribunal brought by the responding parties Tweed Farms Inc. (“Tweed Farms”) and 2470689 Ontario Inc. (“2470689”) (the “Tribunal Appeals”) from the passage by the Town of By-law No. 5169-19 (the “Extension ICBL”) on July 15, 2019 which extended Interim Control By-law No. 5089-18 (the “Original ICBL”) enacted on August 27, 2018. The Original ICBL restricted the use of all lands in the municipality for any cannabis related land use for a period of one (1) year until August 27, 2019. The Extension ICBL extended the period of prohibition of cannabis related land use until July 15, 2020.

[3] The decision was issued following a case management conference to set a procedural order and list of issues for the Tribunal Appeals. At the case management conference Member Ng considered a motion brought by Tweed Farms and 2470689 seeking approval of a procedural order establishing a list of five (5) issues for the Tribunal Appeals and a cross-motion brought by the Town seeking the determination of the following question:

Does the tribunal have jurisdiction pursuant to an appeal under s. 38(4.1) of the Planning Act, R.S.O. 1990, c. P. 13 (the “Planning Act”) to consider and adjudicate on the underlying reasons and issues for the enactment of the Original ICBL when it hears the appeal of the Extension ICBL?

Statutory Context

[4] Section 38 of the Planning Act governs the passage by local municipalities of interim control by-laws and appeals from their passage to the Tribunal.

[5] Subsection 38(1) empowers the council of a local municipality to pass an interim control by-law prohibiting the use of land, buildings or structures within the municipality or within a defined area or areas thereof, for, or except for, such purposes as are set out in the by-law for a specified period not to exceed one year. In order to pass an interim control bylaw, the council must have directed that a review or study be undertaken in respect of land use planning policies in the municipality or in any defined area or areas thereof.

[6] Subsection 38(2) provides as follows:

(2) the council of the municipality may amend an interim control by-law to extend the period of time during which it will be in effect, provided the total period of time does not exceed two years from the date of the passing of the interim control by-law.

[7] Prior to the amendments to s. 38 enacted pursuant to the Building Better Communities and Conserving Watersheds Act, 2017, S.O. 2017, c. 23, in force on April 2, 2018, there was no differentiation between the appeal rights that applied to an original interim control by-law passed pursuant to subsection 38(1) and an extension interim control by-law passed pursuant to subsection 38(2). Any person or public body could appeal to the Ontario Municipal Board (the “OMB”) (now the Tribunal) within the times stipulated, by filing a notice of appeal setting out the objection to the by-law and the reasons in support of the objection.

[8] The amendments to s. 38 changed the appeal rights in respect of interim control by-laws. Subsection 38(4) now confers only on the Minister a right to appeal the passing of a by-law under subsection 38(1) to the Tribunal.

[9] The appeal rights conferred on any person or public body other than the Minister are now set out in subsection 38(4.1) as follows:

(4.1) any person or public body who was given notice of the passing of a by-law under subsection (2) may, within 60 days after the date of the passing of the by-law, appeal to the Tribunal by filing with the clerk of the municipality a notice of appeal setting out the objection to the by-law and the reasons in support of the objection.

The Decision

[10] Member Ng dismissed the Town’s motion which sought to prohibit the Tribunal from considering and adjudicating upon the underlying reasons and issues for the passage of the Original ICBL and to limit the issue on the Tribunal Appeals to the question of whether the decision of the Town council to pass the Extension ICBL was permissible. He allowed the motions of Tweed Farms and 2470689, in part, by approving their proposed procedural order with modifications to the issues such that the issues before the Tribunal are as follows:

(a) is the Extension ICBL ultra vires the Town in that it does not authorize the continuation of a bona fide study?

(b) is the Extension ICBL ultra vires the Town in that it was not passed for legitimate land-use planning grounds?

(c) does the Town have authority to review and regulate cannabis-related land uses through an interim control by-law?

[11] In support of the decision Member Ng made the following findings:

(a) the purpose of the Planning Act is to encourage transparency and accountability of municipalities: decision, at para. 23;

(b) the purpose of s. 38(2) is to enable the extension of an interim control by-law but the municipality must show why there is a need for the extension, and transparency and accountability for the decision dictates that reasons founding the Original ICBL be disclosed by the municipality in establishing its passing of the Extension ICBL: decision, at para. 23;

(c) the Extension ICBL is enacted to continue the effect of the Original ICBL: decision, at para. 27;

(d) issues related to the purpose or rationale for the Original ICBL can be canvassed since the extension was made to continue the land-use prohibition provided by the Original ICBL pending further study and review: decision, at para. 27;

(e) the underlying study and review of the Original ICBL needs to be looked at to see if a further study and review is required to support the extension: decision, at para. 27;

(f) the Town’s contention that the only issue relates to the Extension ICBL is not consistent with its purpose which is to give effect to the land-use restrictions provided for in the Original ICBL: decision, at paras. 29-30; and

(g) issues related to the Original ICBL will be relevant to determine whether the Extension ICBL is founded on a study or a need for further study and review: decision, at para. 30.

Test for Leave to Appeal

[12] The parties agree that, in order to obtain leave to appeal, the Town must establish that:

(a) there is reason to doubt the correctness of the decision at issue; and

(b) the point of law is of sufficient importance to merit the attention of the Divisional Court.

See Avery v. Pointes Protection Assn., 2016 ONSC 6463, 91 O.M.B.R. 185 (Div. Ct.) at para. 23.

Prematurity of the Motion for Leave to Appeal

[13] The parties are agreed that since the proposed appeal is from an interlocutory decision of the Tribunal, the question of whether the motion for leave to appeal has been brought prematurely must be considered as a preliminary threshold matter.

[14] It is well established that, as a general rule, the Divisional Court will not fragment proceedings before administrative tribunals by hearing appeals from interlocutory decisions in the absence of exceptional or extraordinary circumstances: see Richmond Hill (Town) v. Yonge Bayview Holdings Inc., 2013 ONSC 2252, 11 M.P.L.R. (5th) 74 (Div. Ct.) at para. 16 and Ontario College of Art v. Ontario (Human Rights Commission) (1992), 1993 3430 (ON SCDC), 99 D.L.R. (4th) 738 (Div. Ct.) at pp. 740-741.

[15] Moreover, Harvison Young J. (as she then was) confirmed at paras. 17 and 18 of Richmond Hill that:

(a) there is a need to avoid a piecemeal approach to judicial review of administrative action, as fragmentation causes both delay and interruptions in administrative proceedings;

(b) it is preferable to allow matters to run their full course before the tribunal and then, if necessary, consider all legal issues arising from the proceedings at their conclusion;

(c) matters raised at a preliminary stage may no longer be of interest after the conclusion of an administrative tribunal’s proceeding; and

(d) it is generally advisable to consider the issues within the context of a full evidentiary record.

[16] The Town, in reliance on the case of Ottawa (City) v. Greater Ottawa Home Builders Assn., 2013 ONSC 5062, 77 O.M.B.R. 450 (Div. Ct.), submits that, where the matter on appeal is a pure question of law that may be determined without an evidentiary record, the appeal should proceed.

[17] At para. 20 of Ottawa (City) Ray J. stated as follows, citing as authority the cases of Toronto (City) v. Home Depot Holdings Inc., 2010 ONSC 1669, 71 M.P.L.R. (4th) 109 (Div. Ct.) and Richmond Hill:

The courts have generally been reluctant to hear appeals in interlocutory situations where a full record is not available and have preferred to await a full evidentiary record. However, in situations where a pure matter of law may be determined without an evidentiary record, then in those rare situations, the appeal should proceed.

[18] It is noteworthy that Ottawa (City) did not involve a proposed appeal from a procedural order determining the issues for an appeal before the OMB.

[19] In the context of an appeal to the OMB seeking to set aside a zoning by-law, the appellants in Ottawa (City) brought a motion before a single member of the OMB on a question of law challenging the jurisdiction of the City to pass the by-law on the basis that its provisions were outside Council’s competence. The Board member disposed of the motion by holding that certain provisions of the by-law were within the City’s jurisdiction, certain provisions were not, others were sent back to the City to reconsider, and one provision was deferred. The provisions that were sent back were ordered to be reconsidered, revised and approved by resolution of council and then to come back to the OMB without the need for further consideration or consultation.

[20] Although he agreed that a full evidentiary record was not required, Ray J. found that to permit the appeal to go forward would inevitably give rise to a piecemeal approach since the final language of the by-law was not yet known and leave to appeal was therefore denied.

[21] The only case cited by counsel for the Town in which an exceptional or extraordinary circumstance was found to justify the granting of leave to appeal a non-final decision is Home Depot, a decision of Sachs J.

[22] The proposed appeal in Home Depot, like that in Ottawa (City), was not from a procedural order determining the issues for an appeal before the OMB, but rather was from a decision of the OMB on the first phase (Phase 1) of an appeal from a failure of City Council to pass an Official Plan amendment and zoning by-law amendment for a proposed development which the City determined did not conform to the Provincial Growth Plan.

[23] On consent of Home Depot and the City, the OMB ordered the appeal to be bifurcated or phased: Phase 1 to address the “threshold” issue of whether the proposed development was prohibited by the Growth Plan from taking place without a municipal comprehensive review, and Phase 2 to consider the site-specific merits of the proposed development.

[24] The OMB heard Phase 1 and found that the development applications did not require a municipal comprehensive review and permitted them to proceed to a hearing on their merits. This determination was upheld following a review by a different panel. The City applied for leave to appeal the Phase 1 decision of the second panel.

[25] On the issue of prematurity, Sachs J. made reference to the repeated holding by the Divisional Court that it will refrain from fragmenting proceedings before administrative tribunals and that, except in extraordinary circumstances, it will be found to be preferable to allow the proceedings to be completed before the tribunal, a proposition that applies equally to situations where the OMB has bifurcated its own hearing to address preliminary issues raised by the parties.

[26] Sachs J. went on to find that the proposed appeal was an extraordinary case justifying a departure from the well-established line of authority which sought to avoid fragmentation, stating as follows at para. 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.

[27] The issue of prematurity was revisited by the full panel hearing the appeal: see Home Depot Holdings Inc. v. Toronto (City), 2010 ONSC 6071, 78 M.P.L.R. (4th) 204 (Div. Ct.). Although the panel upheld Sach J.’s determination on the prematurity issue in the particular circumstances of the case, it reinforced at paras. 24-26 the Court’s long-standing reluctance to hear applications for judicial review or appeals taken in the course of proceedings before administrative tribunals in order to avoid fragmentation of the process and delay.

[28] In upholding the determination of Sachs J. on the issue of prematurity, Swinton J., writing for the panel, emphasized at para. 28 the “exceptional circumstances of [the] case” given the significance of the issue concerning the meaning of a conversion within the Province’s Growth Plan, not only for the parties to the case, but for other cases as well.

[29] In summary, the extraordinary nature of the circumstances in Home Depot justifying a departure from the long-standing principle that fragmentation of proceedings before administrative tribunals should be avoided may be seen from the following factors:

(a) the motion for leave arose in the context of a bifurcated appeal before the tribunal and related to a decision on the “threshold” issue on the first phase. The appeal to the Divisional Court, if successful, would fully dispose of the appeal before the tribunal. Thus, the decision sought to be appealed could be seen more as a final order on Phase 1 of the bifurcated hearing than a true interlocutory order such as a procedural order;

(b) the question on Phase 1 of the bifurcated hearing dealt with the application of Provincial policy governing developments within a specific geographical area (the Golden Horseshoe, including the City of Toronto) and therefore could be seen to be significant to a defined class of land owners, namely those within the areas subject to the Growth Plan; and

(c) guidance from the Divisional Court, as noted by Sachs J., may save time and expense, not only in the particular case but also in other applications engaging the same issue.

[30] In contrast, an appeal of the procedural order in the case at bar would not have the potential to dispose of the appeal before the Tribunal, would not resolve an issue respecting development rights of land owners within a defined geographical area, and would not result in any significant saving of time and expense, since pursuant to the procedural order, the hearing of the appeal has been set for only two days.

[31] In granting leave to appeal in Home Depot Sachs J. emphasized that the circumstances were exceptional and therefore fell outside of the well-established principle discouraging fragmentation. The full panel of the Divisional Court re-emphasized that determination. The fact that the circumstances in Home Depot were truly extraordinary is exemplified by the fact that it represents the only reported case in which leave to appeal has been granted in respect of a non-final order or decision of the Tribunal or its predecessor the OMB.

[32] Rule 19.01(a) of the Tribunal’s Rules of Practice and Procedure provides that at the request of a party, on its own initiative, or as may be required by law, the Tribunal may convene a prehearing conference in order to, among other things, determine the issues raised by an appeal. There is therefore nothing extraordinary about the Tribunal determining the issues at a prehearing conference. It is acknowledged by the responding parties that the Town will be in a position to argue the issue advanced by its motion before Member Ng, and depending on the outcome of the Tribunal Appeals, to seek leave to appeal the final decision to the Divisional Court on that issue.

[33] In my view to grant leave to appeal from a procedural order setting the issues for the appeals in these circumstances would represent an unwarranted encroachment on the principle discouraging fragmentation of administrative tribunal proceedings and would only lead to unjustified delay. The fact that a full evidentiary record may not be necessary to address the question of law that is the subject of the proposed appeal is not determinative of the prematurity question. The delay which would be occasioned by the proposed appeal is also an important factor. The risk of delay is particularly acute in respect of appeals relating to a by-law extending an interim control by-law, as in this case, as the extended term of the by-law may very well be expired before an appeal of the procedural order setting the issues will have been finally disposed of, rendering the Tribunal Appeals moot. As noted by O’Driscoll J. in the case of Eastpine Kennedy-Steeles Ltd. v. Markham (Town) (2000), 10 M.P.L.R. (3d) 269 (Div. Ct.) at para. 3, such delay may be exacerbated by possible appeals, with leave, to the Court of Appeal and to the Supreme Court of Canada.

[34] In light of my finding that the motion for leave to appeal is premature, it is not necessary to address the issues of whether there is good reason to doubt the correctness of the decision and whether the question is of sufficient importance to merit the attention of the Divisional Court.

Disposition

[35] The Town’s motion for leave to appeal is therefore dismissed.

Costs

[36] Unfortunately, the parties have been unable to agree upon costs. Each of the parties have submitted Costs Outlines and have requested an opportunity to make brief written submissions on costs. I would encourage the parties to renew their efforts to settle the question of costs if possible.

[37] If the parties are unable to agree, the responding parties may make written submissions as to costs within 14 days of the release of this Endorsement. The moving party shall have 10 days after receipt of the responding parties’ submissions to respond. Each party’s written submissions shall not exceed three (3) double-spaced pages. Any authorities referred to shall be hyperlinked. The submissions shall be deposited to the Dropbox set up for the filing of documents in this matter. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

D.A. Broad, J.

Date: June 11, 2020

[^1]: Tweed Farms Inc. & 2470689 Ontario Inc. v Niagara-on-the-Lake (Town), 2020 24865, 2020 CarswellOnt 4530 (ON LPAT).