Supreme Court of Canada

Texact Canada v. City of Vanier, [1981] 1 S.C.R. 254

Date: 1981-03-19

Texaco Canada Limited (Plaintiff) Appellant;

and

The Corporation of the City of Vanier (Defendant) Respondent.

1981: February 25; 1981: March 19.

Present: Laskin C.J. and Dickson, Beetz, McIntyre and Lamer JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Municipal law—By-laws—Municipal Act provision for licensing and regulating of public garages authority for passing by-law imposing restrictions of business premises—Whether or not authority to license or regulate a specified trade or business included by-laws touching on amenities of premises from which trade or business carried on—The Municipal Act, R.S.O. 1970, c. 284, s. 354(1), para. 131.

The municipal by-law challenged by the appellant provided for the erection of a fence or the planting of a hedge along the property lines of public garages not adjacent to the street. This by-law had been enacted by the respondent muncipality pursuant to a provision of The Municipal Act permitting by-laws “for licensing and regulating the owners and operators of public garages…”. The issue was whether a municipality, authorized to pass by-laws for “licensing and regulating” specified trades and businesses, could include in its by-laws provisions touching on the amenities of the premises from which the trade or business was conducted.

The Ontario Court of Appeal sustained the decision of the trial judge who found the restriction to be of regulatory nature falling within the authority conferred upon the municipality to license and regulate.

Held: The appeal should be allowed.

The impugned provision of respondent’s by-law did not relate to the business that was being licensed and regulated; it had nothing to do with the character of the business, nor with any factors touching its conduct. Rather, it was concerned with esthetic considerations of the property from which the business was conducted. Even if it were not a restriction on the use of the property to require that premises used as public garages be satisfactorily fenced or hedged, it did not follow that

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such a requirement was regulatory of the licensed business.

Re Cities Service Oil Co. Ltd. and City of Kingston (1956), 1956 CanLII 419 (ON SC), 5 D.L.R. (2d) 126, applied.

APPEAL from a judgment of the Court of Appeal for Ontario[^1], dismissing an appeal from a decision of Maloney J. Appeal allowed.

John T. Morin and Gavin MacKenzie, for the appellant.

Gaston Carbonneau, for the respondent.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—The issue in this case, shortly put, is whether a municipality, which is authorized to pass by-laws “for licensing and regulating” specified trades and businesses, e.g. the owners or operators of public garages, may include in such by-laws provisions touching the amenities of the premises on which the trade or business is carried on, as by requiring a closed fence or a hedge along the property lines save those adjacent to a street.

The matter arises in this case under an amended by-law of the respondent municipality enacted under subs. 354(1), para. 131, of The Municipal Act, R.S.O. 1970, c. 284. This provision is found in a part of The Municipal Act headed “Trades and Businesses” and reads that by-laws may be passed “For licensing and regulating the owners or operators of public garages, and for fixing the fees for such licences, and for revoking such licences, and for imposing penalties for breaches of such by-law and for the collection thereof. The challenged provision of the by-law as amended, is as follows:

Every applicant or licensee shall:

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erect and maintain a six foot closed fence constructed with materials and in a manner approved by the Superintendant of Inspection or plant and maintain a hedge having a minimum height of four feet and a maximum height of six feet along all property lines other than the property line or lines adjacent to a street.

The question of the validity of this term of the by-law came before Maloney J. who purported to distinguish the judgment of McRuer C.J.H.C. in Re Cities Service Oil Co. Ltd. and City of Kingston[^2]. He concluded as follows:

In my view, a requirement that a property occupied and used in the business of a public garage should be fenced or hedged to a certain extent is not a by-law restricting the use of the property in which the business is carried on, but is, in essence, a restriction of a regulatory nature falling within the authority conferred upon the municipality to license and regulate the operators of public garages.

This view of the matter was sustained in short oral reasons by the Ontario Court of Appeal. Leave was granted to bring the case here, the Court granting leave being informed that the issue is of wide importance in various municipalities in Ontario.

What is urged by the appellant is that the challenged provision of the by-law is concerned with the use of land on which the licensed business is carried on and is the type of provision which comes under s. 35 of The Planning Act, R.S.O. 1970, c. 349. By-laws under s. 35 require the approval of the Ontario Municipal Board. It was submitted further that there are other provisions of The Municipal Act, e.g. subs. 354(1), paras. 19-24, that authorize by-laws respecting fences and that s. 35a of The Planning Act also gives express power to municipalities with respect to fences. What was chiefly relied on, however, was the principle said to emerge from the Cities Service Oil case and I turn to a consideration of its rationale.

The case involved the exercise by a municipality of a power similar to that which was exercised by the respondent here, namely, a power to pass by-laws licensing, regulating and governing the

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owners or keepers of automobile service stations. The challenged by-law in the Cities Service Oil case provided, inter alia, in s. 3 thereof for a special minimum street frontage (clause (b)) and for certain minimum distances of pump islands from the street line and for longer minimum distances of buildings of automobile service stations from the street line (clause (c)). An application to quash s. 3 of the by-law (and with it s. 4 as being intimately associated with s. 3) came before McRuer C.J.H.C. who quashed these provisions. He said this, in the course of his reasons, at p. 130:

While I am not required to decide how far a municipal council can go in passing licensing by-laws which may restrict in some measure the use of the property, I feel convinced that para, (b) of s. 3 is a restriction on the use of property that can only be passed under s. 390 of The Municipal Act. It obviously has nothing to do with the owner or keeper of the service-station. It has to do with the use that land may be put to for a service-station and it requires that before an owner of a service-station may be licensed the lot on which the service-station is situated must have a minimum street frontage of 150 lineal feet except on corner lots where the minimum street frontage shall be 100 ft. This, in my opinion, is a restriction on the use of land as distinct from a measure regulating or governing the owners or keepers of service-stations. To uphold this by-law would be to give municipalities a power in the guise of licensing to pass restrictive by‑laws which might have very wide ramifications. It may well be that it is undesirable in many localities that a service-station should be on a lot with less than 150 lineal feet frontage or less than 10,000 square feet, but this is not a matter, in my opinion, that can be controlled under licensing powers. It is something that a council has power to control by exercising those powers given to it under s. 390 with the approval of the Municipal Board.

And, further, at p. 131, he referred to:

…the distinction between a by-law that provides for licensing, regulating and governing owners and keepers of automobile service-stations for the purposes of controlling a business in its character, and the way in which

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it is carried on on a particular property, and a by-law which purports to restrict the use to which that property is to be put and to limit the size of the property on which a particular business is to be carried on. It necessarily follows that a by-law requiring buildings to be a certain distance from the street-line cannot be passed under licensing powers of a municipal council. That being true, the whole of s. 3 is in my opinion invalid.

In my opinion, the principle that emerges from the Cities Service Oil case, a principle which I accept, applies here. The impugned provision of the respondent’s by-law does not relate to the business that is being licensed and regulated; it has nothing to do with the character of the business, nor with any factors touching its conduct. Rather, it is concerned with esthetic considerations, with the external appearance of the property on which the business is being carried on. It compels an amenity that will have a neighbourhood appeal in the sense of protecting neighbouring property or insulating such property to some degree from an adjoining public garage. The desirability of a fence, or hedge, is not the question that has to be answered but rather whether it falls within the power under which alone it is authorized.

Maloney J. sought to distinguish the Cities Service Oil case but I cannot accept his characterization of the challenged provision. Even if the learned Judge be correct in his view that it is not a restriction of the use of property to require that the premises used in the business of a public garage be fenced or have a hedge, it does not follow, in my view, that such a requirement is regulatory of the licensed business. It was not suggested that this provision could be validated, even if invalid standing alone, by being swallowed up by other valid terms of the by-law. Counsel for the respondent appeared to take a position of this nature by pointing to other allegedly valid provisions, one being a provision requiring lighting of the premises if the business be carried on after dusk. I have no difficulty in seeing this as a regulation of the business but the same character cannot be attributed to the requirement of a fence or hedge along the property lines other than those

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adjacent to a street.

Counsel for the appellant pointed to other provisions of the by-law which he alleged to be of doubtful validity but they are not involved in this appeal and I leave them out of consideration. Being of the opinion that the challenged provision is outside of the licensing and regulatory power which is relied upon to sustain it, I would allow the appeal, set aside the judgments below and direct that an order issue to strike out the challenged provision as being ultra vires. The appellant is entitled to costs throughout.

Appeal allowed with costs.

Solicitors for the appellant: Campbell, Godfrey & Lewtas, Toronto.

Solicitors for the respondent: Filion, DeGagné & Gascon, Vanier.

[^1]: (1979), 1979 CanLII 2804 (ON CA), 106 D.L.R. (3d) 706; (1979), 1979 CanLII 72 (ON CA), 27 O.R. (2d) 415.

[^2]: (1956), 1956 CanLII 419 (ON SC), 5 D.L.R. (2d) 126.