Supreme Court of Canada

St. Peter’s Evangelical Lutheran Church v. Ottawa, [1982] 2 S.C.R. 616

Date: 1982-11-23

The Trustees of St. Peter’s Evangelical Lutheran Church, Ottawa (Plaintiffs) Appellants;

and

The Council of the Corporation of the City of Ottawa and the Corporation of the City of Ottawa (Defendants) Respondents.

File No.: 16445.

1982: April 1; 1982: November 23.

Present: Dickson, Estey, Mclntyre, Lamer and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Municipal law—Heritage building—Application to demolish—Statute required municipal consent—Deemed consent in absence of notice of decision within ninety-days of application date—Appellants not given formal notice but knew of decision to refuse application—Partial demolition effected on assumption of deemed consent—Whether or not appellants attained right to demolish by operation of statute—The Ontario Heritage Act, 1974 (Ont.), c. 122, now R.S.O. 1980, c. 337, ss. 34, 67—Interpretation Act, R.S.O. 1980, c. 219, s. 10.

This appeal arose from an application for judicial review of a by-law designating a house purchased by appellant Trustees to be a heritage property. The Ontario Heritage Act, which required the City’s consent for the demolition of a heritage building, provided that that consent would be deemed given if the City did not either consent to or refuse the application within ninety days of the application to demolish. The appellants received no formal notice of the City’s decision within that period as provided in s. 34(2) of the Act and proceeded to partially demolish the building on the assumption that consent was deemed to be given. The City obtained an injunction restraining further demolition. The lower courts found that the Trustees knew of the Council’s decision—made in the form of a by-law passed within the ninety-day period—to deny the application to demolish and to expropriate the property. The issue was whether or not the appellants had attained the right to demolish their building pursuant to the statute.

Held (Estey J. dissenting): The appeal should be allowed.

Per Dickson, McIntyre, Lamer and Wilson JJ.: The notice provisions, even given a liberal interpretation as

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required by the Interpretation Act, cannot be justifiably set aside. Considered in the context of the whole Act, these procedural requirements were of substance and not of mere form for they were the landowner’s only protection in the face of the City’s otherwise indefeasible rights. The set time limits and the notice provisions determined the period during which the landowner’s rights were suspended and fixed the date on which those rights could be reasserted. Equating knowledge on appellants’ part with notice given by the City, and, treating the deeming provision as a rebuttable deeming, did not fit the Act’s statutory framework. The City was deemed to have consented to the appellants’ application to demolish because it failed to meet the specific statutory requirements that formed the condition precedent to its retaining control of the property.

Per Estey (dissenting): The statute is fairly and properly interpreted and ensures the attainment of the Act’s objects according to its true intent and spirit when knowledge is equated with notice. Appellants had “knowledge” at every stage of the process and were given notice by their presence in the Council meeting. Council, accordingly, did “cause notice of its decision to be given to the owner”, both literally and substantially. The provision deeming consent to demolish in the absence of notification of Council’s decision within the ninety-day period must be interpreted as “deemed to be so until the contrary is proved”. Council here took appropriate action within the ninety-day period by denying the application to demolish and undertaking expropriation by by-law. The City was bound by its decision until the by-law denying permission to demolish was repealed. The 180-day period during which action by the City was to be taken automatically began to run. Council’s action did not need to be announced in the manner prescribed by s. 34(2) to fix the time for the commencement of the running of the 180-day period.

APPEAL from a judgment of the Ontario Court of Appeal (1980), 1980 70 (ON CA), 118 D.L.R. (3d) 528, 30 O.R. (2d) 740, 14 M.P.L.R. 51, dismissing an appeal from a judgment of Craig J. dismissing an application for judicial review of a by-law. Appeal allowed, Estey J. dissenting.

Gordon F. Henderson, Q.C., and Emilio Binavince, for the appellants.

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D.V. Hambling, Q.C., and J.L. O’Brien, for the respondents.

The judgment of Dickson, McIntyre, Lamer and Wilson JJ. was delivered by

MCINTYRE J.—This appeal arises from an application for judicial review of a municipal by‑law. The application was dismissed by the Supreme Court of Ontario and an appeal of that decision to the Ontario Court of Appeal was also dismissed. The case involves a consideration of the effect of s. 34(3) of The Ontario Heritage Act, 1974 (Ont.), c. 122, now R.S.O. 1980, c. 337 (the Act). That subsection provides that where the council of a municipality within ninety days of receiving the application neither consents to nor refuses an application to demolish a property, designated under the Act as having historical or architectural value, it will be deemed to have consented to the application.

The appellants are the owners of the land and buildings known as 136 Bay Street in the City of Ottawa, hereinafter referred to as ‘the property’. It was acquired by the appellants in 1974, in the words of one of the members of the Church, “to enhance and protect” the Church property which is located on an adjacent lot. There was a house situate on the property and in March of 1977 the appellants applied for a permit to demolish it. No reply or acknowledgment of this application was received. In January, 1979 a further request was made for a demolition permit and again no formal reply or acknowledgment was received. On June 6, 1979 the Council of the City of Ottawa passed By-law 157-79, pursuant to s. 29 of the Act, which had the effect of designating the property as one of historical or architectural value. It was conceded by the appellants that the statutory provisions relating to the designation by-law were properly complied with and that the by-law was accordingly effective to designate the property under the Act. As a result of the designation, the appellants, as owners of the property, were prohibited by the provisions of s. 34(1) of the Act from demolishing the building without the consent in writing of the Council and it is clear that the appellants were aware of this fact.

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The appellants on June 27, 1979 applied to the Council for consent in writing to demolish the building on the property. The letter setting forth this application was, according to the respondents’ evidence, received on June 29, 1979. The letter also informed the Council that a formal application for a permit to demolish the building, which was required under the Building Code Act, R.S.O. 1980, c. 51, and the City by-laws, would be made the following week to the City’s building inspector. This later application was received by the City on July 4, 1979.

The Council held a meeting on September 19, 1979 and adopted as By-law 261-79 a report of the Ottawa Planning Board, numbered 18a, recommending that the application for permission to demolish the building be denied, and a report of the Board of Control, numbered 19, recommending that “expropriation proceedings be initiated to acquire the Heritage building at 136 Bay Street”. The second report included as recommendation No. 4 the statement that “the Department [of Community Development] be instructed to meet representatives of the Church to discuss purchase and/or other solutions”. It was conceded that no written notice regarding the refusal to permit demolition was sent to the applicants prior to October 26, 1979.

On October 27, 1979 the appellants commenced demolition of the building and it was substantially demolished. On the same day, the City obtained an ex parte injunction preventing further demolition which was served on the appellants on October 29, 1979. As well the appellants received on October 29 a letter from the City, dated October 26, 1979, refusing to consent to demolition, and a notice of intention to expropriate. This was the only formal notice received from the City after the Council meeting of September 19.

The City commenced an action for an injunction and damages against the appellants and for a continuation of the injunction until trial. The appellants commenced proceedings for judicial review of By-law 157-79 (the designation by-law). The two proceedings were argued together on

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common evidence before Craig J. He continued the injunction against further demolition until trial and dismissed the application for judicial review on January 9, 1980. An appeal from this dismissal was dismissed in the Court of Appeal on November 20, 1980.

It is clear from the evidence, and in fact it was conceded, that no publication in a newspaper and no written notice, such as is contemplated in s. 67 of the Act, regarding the intention of the Council to refuse permission to demolish the building was given to the appellants. Section 67 provides:

67.—(1) Any notice or order required to be given, delivered or served under this Act or the regulations is sufficiently given, delivered or served if delivered personally or sent by registered mail addressed to the person to whom delivery or service is required to be made at his last known address.

(2) Where service is made by mail, the service shall be deemed to be made on the seventh day after the day of mailing unless the person on whom service is being made establishes that he did not, acting in good faith, through absence, accident, illness or other cause beyond his control, receive the notice or order until a later date.

(3) Any notice required to be published in a newspaper having general circulation in the municipality in which a property is situate shall be published in that newspaper once for each of three consecutive weeks.

No formal notice of the City’s position was given until after the ninety-day period in s. 34(2) of the Act had elapsed on September 27 (ninety days from June 29) or, if the formal application received by the City on July 4 is considered to be the effective date, then not later than October 4 (ninety days from July 4). It is also clear from the evidence, however, that over a period of some two years discussions had taken place between representatives of the appellants and the City regarding these matters. There had been correspondence between them and in later months there had been newspaper publicity which gave a clear indication that the City did not intend to permit the demolition of the building. It is also true that at least two members of the appellants’ church were present at the meeting of the Council on September 19, 1979 and, while it is not clear what they could have

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inferred from what they heard, they were aware at least that up to that point the City had not consented to their application.

In the trial court, Craig J. did not consider that the admitted failure of the Council to give notice of its decision to the owners was fatal to the Council’s position. He concluded on the evidence that the appellants were well aware of the “true purpose and intention of the City” and considered that the word ‘deemed’ in s. 34(3) should be “interpreted in this context to mean ‘deemed until the contrary is proved’”. Concluding then that the appellants knew that the City opposed and would not consent to the application, he declined to apply the deeming provision and dismissed the application for judicial review. In the Court of Appeal, MacKinnon A.C.J.O., with whom the other members of the court agreed, considered that the City had given notice of its decision to the appellants and dismissed the appeal. Jessup J.A. added that all acts are deemed remedial by s. 10 of the Interpretation Act and that he would dismiss the appeal for the reasons given by Craig J. In this he was agreeing with Craig J.’s view that the deeming provision should have a liberal construction in these circumstances and not be applied strictly so as to deem the Council’s consent conclusively.

In this Court, the appellants argued that under the provisions of s. 34(2) of the Act the City was required, within ninety days from the receipt of the appellants’ application for a demolition permit, to reach a decision. It was required either to consent to the application or to refuse it and prohibit any demolition for a further period of 180 days from the date of such decision. The City was required to give notice. Since the Council did neither, within ninety days, the deeming provision in s. 34(3) resulted in a conclusive deeming that the respondent City had consented to the application. It was further contended that the common law right of the property owner could not be taken away without the use of clear statutory language and there was no such language in the Act. In fact,

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it was contended that the language was clear to the effect that notice was required in the manner provided in s. 67 of the Act, and that the failure in this respect by the respondents was fatal to their position.

The respondents contended that the issue between the parties was limited to the simple question of notice. It was argued that under s. 34(2) of the Act notice had been given to the appellants by the course of dealings between the parties and by the information the representatives of the appellants would have acquired as a result of attendance at the meeting of the Council on September 19, 1979. There was no requirement for written notice. In any event, any notice required was replaced by notice in fact. It was also argued that the deeming provision in subs. (3) could not come into effect because, by a true construction of the Act, the deeming provision meant ‘deemed until the contrary has been shown’, not ‘conclusively deemed’. Accordingly it followed, since it was clearly known by the appellants that the respondents had not, in fact, consented and had refused to consent, that the contrary had been shown. The deeming provision was not effective then to assist the appellants and the appeal should fail.

Section 34 of The Ontario Heritage Act is set out hereunder:

34.—(1) No owner of property designated under this Part shall demolish or remove any building or structure on such property or permit the demolition or removal of any building or structure on such property unless he applies to the council of the municipality in which the property is situate and receives consent in writing to such demolition or removal.

(2) The council, after consultation with its local advisory committee, where one is established, shall consider an application under subsection 1 and within ninety days of receipt thereof shall,

(a) consent to the application; or

(b) refuse the application and prohibit any work to demolish or remove any building or structure on the property for a period of 180 days from the date of its decision,

and shall cause notice of its decision,

(c) to be given to the owner and to the Foundation; and

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(d) to be published in a newspaper having general circulation in the municipality,

and its decision is final.

(3) The applicant and the council may agree to extend the time under subsection 2 and, where the council fails to notify the applicant of its decision within ninety days after the notice of receipt is served on the applicant or within such extended time as may be agreed upon, the council shall be deemed to have consented to the application.

(4) Notwithstanding subsection 1, where the period of 180 days prohibiting any work to demolish or remove any building or structure on a property under clause b of subsection 2 has expired and the owner has not agreed to an extension of such period, or where the extension of time agreed upon by the owner and the council under subsection 3 has expired, the owner may proceed to demolish or remove the building or structure on the property subject to the provisions of any other Act or regulation thereunder.

(5) Where,

(a) the council consents to an application under clause a of subsection 2, or is deemed to have consented to an application under subsection 3; or

(b) the period of 180 days under clause b of subsection 2 has expired or where the extension of time agreed upon by the owner and the council under subsection 3 has expired and the demolition or removal of the building or structure on the property has been completed,

the council shall pass a by-law repealing the by-law or part thereof designating the property and shall cause,

(c) a copy of the repealing by-law to be served on the owner and on the Foundation;

(d) notice of the repealing by-law to be published in a newspaper having general circulation in the municipality;

(e) reference to the property to be deleted from the Register referred to in subsection 1 of section 27; and

(f) a copy of the repealing by-law to be registered against the property affected in the proper land registry office.

The Ontario Heritage Act was enacted to provide for the conservation, protection and preservation of the heritage of Ontario. There is no doubt that the Act provides for and the Legislature intended that municipalities, acting under the

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provisions of the Act, should have wide powers to interfere with individual property rights. It is equally evident, however, that the Legislature recognized that the preservation of Ontario’s heritage should be accomplished at the cost of the community at large, not at the cost of the individual property owner, and certainly not in total disregard of the property owner’s rights. It provided a procedure to govern the exercise of the municipal powers, but at the same time to protect the property owner within the scope of the Act and in accordance with its terms. Virtually all argument in this Court centred upon the construction and effect of this section and, particularly, subs. (3), the ‘deeming’ provision. The respondents have contended for a liberal construction of the Act and the appellants for a strict construction. The distinction between the two approaches is conveniently set out in E.A. Dreidger, The Construction of Statutes, at pp. 148-49, in this manner:

The early doctrine of equitable construction was followed by the theory of “strict” and “liberal” construction. Statutes were regarded as falling into one or two broad classes—penal and remedial. Penal statutes (which included not only statutes imposing a penalty for violation, but also revenue statutes and statutes interfering with the liberty or property of the subject) were to be construed strictly, and remedial statutes were to be construed liberally.

What the boundaries of these two classifications were has never been clearly defined; what is a remedial statute to one may be penal to another; and a statute could in some aspects be regarded as penal and in others as remedial. The two methods of construction also are not clearly defined, and in their application probably meant no more than this: in the case of a remedial statute the judges may bring in everything they can within the maximum scope of the language used; in the case of a penal statute they must not bring in anything unless they are compelled to do so by clear language. The difference is one of elasticity.

The learned author went on, however, to point out that the importance of this categorization of approaches to a statutory construction may have

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been diminished by reason of the Interpretation Act provision relating to the construction of all statutes, where he said:

Whatever distinction there was between these two classifications or these two methods of construction has been abolished by statute. The Interpretation Act provides that “every enactment shall be deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects”. All statutes, therefore, are now “remedial” and must be “liberally” construed.

Nevertheless the concepts of “strict” and “liberal” construction constantly appear in the decisions and it is frequently said that taxing statutes must be strictly construed.

This point was taken in the Court of Appeal by Jessup J.A. Section 10 of the Ontario Interpretation Act, R.S.O. 1980, c. 219, provides:

10. Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of any thing that the Legislature deems to be for the public good or to prevent or punish the doing of any thing that it deems to be contrary to the public good, and shall accordingly receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.

In the Ontario Court of Appeal, as well as in the High Court, the purpose of the Act, that is the preservation and protection of Ontario’s heritage, was recognized and the statute was characterized as remedial. MacKinnon A.C.J.O. said:

We are of the view that the matter really comes to a narrow compass on the particular and peculiar facts of this case. It should be said at the opening that the object and purpose of The Ontario Heritage Act is clear. It is to preserve and conserve for the citizens of this country inter alia, properties of historical and architectural importance. The Act is a remedial one and should be given a fair and liberal interpretation to achieve those public purposes which I have recited.

The Ontario courts have adopted the approach dictated by s. 10 of the Interpretation Act and they have construed the statute in the purposive manner. In this they have given effect fully to the avowed purpose of The Ontario Heritage Act.

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Accepting the approach so taken, I am not of the view, however, that in an effort to give effect to what is taken to be the purpose of the statute it is open to the court of construction to disregard certain provisions of the Act. The whole Act must be construed. It must be construed to give effect to the purpose above described but also to have regard for many provisions of the Act, particularly ss. 34 and 67, the purpose of which is to protect the interests of the landowner concerned. To ignore these provisions, or to read them down to where they are deprived of any real significance, is not to construe the statute but to decline to assign any meaning to certain of the words that were used by the Legislature.

In pursuance of the expressed purpose of the Act, the Legislature set up a detailed scheme of procedure which, if followed, would achieve the objects of the enactment and at the same time protect the landowners to the extent prescribed by the Legislature. To protect the heritage of Ontario the municipalities were given power to designate property of their choice and to suspend thereby many of the rights of private ownership. These provisions of the Act should be given force and effect to secure the goals of the Legislature. To protect landowners, the Legislature provided certain procedures including those set out in s. 34, together with the provisions of s. 67, which are the ones with which we are concerned. These provisions, too, must have their effect.

It should be observed that the protective provisions of s. 34 do not enable the landowner to interfere with the City’s right to designate, protect, and to acquire the property. The City’s right in this respect is indefeasible as long as it complies with the legislative directions as to its procedure but it should be noted that, in the face of this indefeasible right on the part of the City, the only protection left for the landowner is procedural. The statute has said in the clearest possible terms that the landowner may not demolish without consent. It has then said that when the landowner applies for consent all is held in suspension for ninety days during which time the City Council must make a decision. It may consent or it may refuse and prohibit demolition for a period of 180

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days from the date of its decision. It clearly then has the power, with which the landowner may not interfere, to hold all in suspension for a period of 270 days while reaching its ultimate decision regarding the property. To comply with the procedure set forth in the statute, all that is required in protection of the landowner’s interest is the taking of a decision and the giving of notice. The manner in which that notice may be given is prescribed in s. 61 of the Act, which is reproduced above. While I would not consider that s. 67 provides the only manner of giving notice, it is my opinion that some positive step in that regard must be taken. Section 34 of the Act was enacted for the protection of the landowner. The notice provision of subs. (2) is not merely a formal requirement but one of substance. It is there to insure that the landowner will know what decision has been made and the date of that decision. He will thus be aware of the date of commencement of any additional time period set running by the decision so that he will be able, with some degree of certainty, to make such lawful disposition or use of his property as may be permitted under the Act. To read down the notice provision as was done by the courts below is not to construe s. 34(2), but simply to ignore it and by so doing to remove the protection given to the landowners by the Legislature.

I observe at this point that the importance of the notice provision is given weight by the fact that s. 34(3) provides a sanction for failure to notify in the form of the deeming provision. Furthermore, s. 34(4) provides that, even where notice is given under s. 34(2) and the additional period of 180 days referred to in s. 34(2)(b) becomes available to the Council, the landowner may, upon the expiration of that period or any extension which may be agreed upon, proceed to demolish the building or structure on the land unless, of course, the City has acted to acquire the property under s. 36. The observance of the notice provisions and the specified time limits is therefore of fundamental importance. They fix and determine the commencement and duration of the period or periods during which

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the landowner’s rights are suspended and thereby fix the date upon which they may be reasserted.

It is therefore my opinion that, even accepting the argument of the respondents regarding statutory construction and giving the Act that broad, liberal construction mandated by s. 10 of the Interpretation Act, the setting aside of the notice provisions which reflect a significant part of the legislative intent cannot be justified. The notice provisions must, in my view, be observed and carried out as provided in the statute.

Considering as I do that the notice provisions in s. 34(2) should be complied with and noting that they were not, consideration must now be given to the consequences of non-compliance. Notice was required to be given within the ninety-day period. This period was up on September 27, 1979 or at latest on October 4, 1979. Nothing in the nature of a written or formal notice was given or received until late October. We are squarely confronted with the deeming provision in s. 34(3) which provides that if the Council fails, within ninety days after receipt of the application for demolition, to make known its decision and give notice as required under the Act, the Council shall be deemed to have consented to the application.

The Court of Appeal was of the view that there was no occasion to invoke the deeming provision. It considered that the appellants were notified by the presence of two representatives at the council meeting of September 29, 1979. Craig J. in the High Court, however, dealt with the deeming provision by considering it to be rebuttable. He said:

In my opinion, as I have indicated, the applicant did have notice, although not a formal notice required by the Ontario Heritage Act,… [s. 67].

I am satisfied that the applicant was well aware of the true purpose and intention of the City. Accordingly, for these reasons the word “deemed” should be interpreted in this context to mean “deemed until the contrary is proved”, because in my opinion the contrary has been proved.

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In my opinion, neither approach is sustainable in the present case. The first depends upon equating knowledge on the part of the appellants with notice given by the respondent City and the second depends upon treating the deeming provision as creating a rebuttable deeming, neither of which concepts can, in my view, fit the statutory framework created by the Act. It is true, of course, that the words ‘deemed’ or ‘deeming’ do not always import a conclusive deeming into a statutory scheme. The word must be construed in the entire context of the statute concerned. Where a statute sets up a scheme for the employment of special powers by a municipal body and clearly provides a detailed procedure which will protect the municipal authority and make lawful the exercise of those powers, and then provides a specific sanction for failure to follow the statutory procedure in the form of a deeming provision, it is difficult, indeed, to conclude that a conclusive deeming was not intended. Any other conclusion would frustrate and break down the whole scheme of the Act designed specifically to accomplish both the preservation of the heritage of Ontario and the protection of landowners. The construction contended for by the respondents and accepted in the other courts would enable the City, on receipt of an application to demolish, to hold the landowner in suspense for longer periods than are contemplated in the Act, making it impossible for the landowner to exercise the rights given to him under s. 34 to compel or seek to compel the performance by the City of its obligation under s. 34(5). The purpose of s. 34 is to give the City time to consider its position. The combined effect of the specific time limits imposed, the specific direction to decide and notify, the provisions of s. 67 giving a method by which notice may be given, and the deeming provision is to give an element of finality to the proceedings. In other words, by failing to act within the ninety-day period the City has been deemed to have consented to the appellants’ application to demolish, not because it has in fact consented but because it has failed to observe specific statutory provisions, the compliance with which is a condition precedent to its right to retain control of the property.

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I would allow the appeal with costs to the appellants throughout and direct the passage by the Council of a by-law repealing that part of the designating by-law affecting the property as directed in s. 34(5) of the Act.

The following are the reasons delivered by

ESTEY J. (dissenting)—By an application for judicial review of a by-law enacted by the City of Ottawa the appellants bring into issue their right to demolish a building owned by the church after it had been declared by the by-law in question to be a heritage building under The Ontario Heritage Act, 1974 (Ont.), c. 122. There is no dispute that the by-law in question, no. 157-79, was validly enacted by the City of Ottawa pursuant to The Ontario Heritage Act. What is at issue is whether the appellants thereafter and pursuant to the terms of the statute attained the right to demolish their building which they partially did under circumstances which I shall describe later.

The rationale for the conservation of the building as a heritage site is explained in a report to Ottawa City Council entitled: “Conservation of the Sole Surviving Example of Settlement Era Upper Town, Conservation of 136 Bay Street”:

RATIONALE

The property at 136 Bay Street is an outstanding heritage building, having been erected prior to 1854 by Captain William T. Clegg of the Royal Engineers, Ordinance Paymaster, artist, and assistant in route selection for the Rideau Canal. It was subsequently lived in by other notable individuals and is the sole surviving settlement era residence in what was Upper Town, the upperclass residential section of Bytown…

Further, the property is a significant element in the Queen Street Heritage Area, the last area of late nineteenth century residential architecture to the west of downtown and the setting for Christ Church Cathedral and the cliff marking the city centre’s western edge.

The property was acquired by the appellants in May of 1974 and was operated as a rooming house until May 1, 1979. It is adjacent to the main

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church property and it was the desire of the trustees to demolish the building with a view to expansion of the church grounds and parking facilities. On March 21, 1977 the appellants filed an application with the Building Inspection Division of the City of Ottawa for a permit to demolish the building. There followed a series of intermittent discussions between City officials and representatives of the appellants which were inconclusive; the following notations appear on the application: “Pastor has been speaking to Mr. Ham [a planner employed by the City]”, and “Heritage File No.—136-H-12-146. Do not issue”. On June 30, 1977 the Pastor wrote to the Inspector of the Property Standards Division of the City, which letter included the following:

We are anxious to pursue demolition of 136 Bay Street for much needed parking and to clean up the area. However, it looks as if we will have to see what the “Heritage Committees” have to say about this property. We have met with the Chairman, Heritage Committee, Ottawa, and explained fully our situation to him.

If it is felt that 136 Bay Street falls into the category of a “Heritage Home” we will want to hear from the Heritage authorities immediately what monies they are willing to make available for the renovation of this building. We have made the Chairman of the Heritage Committee, Ottawa, aware of your Work Order and actions required.

The City of Ottawa, at a Council meeting of June 15, 1977, received a preliminary Central Area Heritage Report identifying the property as “heritage”. On February 21, 1979, the Council approved in principle a report recommending the protection and conservation of the area, specific mention being made of 136 Bay Street. On April 4, 1979 the City established its intention to designate the building as a heritage property. By registered letter dated April 19, the intention to designate was communicated to the appellants and they were given thirty days in which to object.

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NOTICE OF INTENTION TO DESIGNATE

TAKE NOTICE that the Council of The Corporation of the City of Ottawa on the 4th day of April 1979, established its intention to designate the lands and buildings known municipally as 136 Bay Street as a property of architectural and historical value or interest under The Ontario Heritage Act, 1974.

STATEMENT OF REASONS FOR THE PROPOSED DESIGNATION:

“The two and one-half storey stone residence at 136 Bay Street is recommended for designation as being of architectural and historical value. Erected prior to 1866, the T‑shaped structure has a rear stone portion of post-Georgian character. The front section has segmental and semi-circular arched windows and an offset entranceway more characteristic of the 1870’s. Descendants state that the building was the residence of Captain T. Clegg, prior to his retirement. Mr. Gustavius Wick-stead, Chief Law Clerk, House of Commons, resided there from 1866 through the turn of the century.”

NOTICE OF OBJECTION to the designation may be served on the Clerk, within thirty (30) days of the 20th day of April, 1979.

No objection was received in response to the above notice and the City adopted By-law 157‑79 on June 6, 1979 designating the property pursuant to s. 29 of The Ontario Heritage Act, supra, as a property of architectural and historical value. Notice of the designation by-law was communicated to the appellants by registered letter dated July 12, 1979. The appellants made application for a permit to demolish the building which application was made either on June 29, 1979 or on July 4, 1979 and it matters not which for the purposes of these proceedings. The statute requires that the City respond to such application within ninety days, otherwise it shall be deemed to have consented to the application. The ninety-day period expired on October 2, 1979 (based on my assumption that the application for the permit was made on July 4, 1979). Crucial to the disposition of this appeal is s. 34 of the Act, the operative parts of which are as follows:

34.—(1) No owner of property designated under this Part shall demolish or remove any building or structure on such property or permit the demolition or removal of

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any building or structure on such property unless he applies to the council of the municipality in which the property is situate and receives consent in writing to such demolition or removal.

(2) The council, after consultation with its local advisory committee, where one is established, shall consider an application under subsection 1 and within ninety days of receipt thereof shall,

(a) consent to the application; or

(b) refuse the application and prohibit any work to demolish or remove any building or structure on the property for a period of 180 days from the date of its decision,

and shall cause notice of its decision,

(c) to be given to the owner and to the Foundation; and

(d) to be published in a newspaper having general circulation in the municipality,

and its decision is final.

(3) The applicant and the council may agree to extend the time under subsection 2 and, where the council fails to notify the applicant of its decision within ninety days after the notice of receipt is served on the applicant or within such extended time as may be agreed upon, the council shall be deemed to have consented to the application.

(4) Notwithstanding subsection 1, where the period of 180 days prohibiting any work to demolish or remove any building or structure on a property under clause b of subsection 2 has expired and the owner has not agreed to an extension of such period, or where the extension of time agreed upon by the owner and the council under subsection 3 has expired, the owner may proceed to demolish or remove the building or structure on the property subject to the provisions of any other Act or regulation thereunder.

(5) Where,

(a) the council consents to an application under clause a of subsection 2, or is deemed to have consented to an application under subsection 3; or

(b) the period of 180 days under clause b of subsection 2 has expired or where the extension of time agreed upon by the owner and the council under subsection 3 has expired and the demolition or removal of the building or structure on the property has been completed,

the council shall pass a by-law repealing the by-law or part thereof designating the property…

[Page 634]

At a meeting of September 19, 1979, Ottawa City Council considered a report from the Ottawa Planning Board entitled “Application for permission to demolish the Clegg House” which recommended:

That the application of St. Peter’s Lutheran Church for permission to demolish the Clegg House, 136 Bay Street, be denied.

as well as a report from the Board of Control entitled “Conservation of the sole surviving example of settlement era Upper Town, Conservation of 136 Bay Street” which recommended:

That expropriation proceedings be initiated to acquire the heritage building at 136 Bay Street…

The two recommendations were adopted by Council in By-law 261-79. It may be noted that the following commentary on the “Background” forms part of the latter report.

Discussions with the Church have indicated that no compromise, alteration in their plans, or voluntary financial solution is anticipated. The Church remains adamant in its intention to demolish the building.

The report was amended before adoption by by-law to include the further recommendation:

The Department be instructed to meet representatives of the church to discuss purchase and/or other solutions.

The action taken with respect to denial of permission to demolish included a comment by the Commissioner of Finance which presumably formed a part of the report confirmed by By-law 261-79 which stated:

Denial of permission to demolish will allow six additional months for the City to develop an effective, permanent method for preservation. Consideration of such methods is underway.

I do not conclude that these related considerations in any way detract from the two decisions embodied in By-law 261-79.

[Page 635]

There are findings of fact in each court below that the appellants knew of the action taken by the Council of the City of Ottawa in its meeting of September 19 and there is ample evidence on the record to support the concurrent findings of knowledge in the appellants of the refusal of the application for demolition by the Council of the respondent. It may be briefly summarized:

(a) At the Council meeting on September 19 two of the Trustees of the appellants were present;

(b) The Secretary of the appellants, prior to the meeting, reviewed the draft recommendations which Council confirmed in By-law 261;

(c) The Secretary of the appellants submitted a letter, on the instructions of the Board, to the respondent Council relating to the proposed expropriation of the property which letter was received and dealt with by the respondent Council at the meeting on September 19; the letter contains the following: “The Trustees of the Church oppose the recommendation of the Board of Control and the Ottawa Planning Board for expropriation…”;

(d) The Secretary of the appellants had read the newspaper accounts, dated September 20, 1979, of the meeting of the respondent Council on September 19.

Before returning to the interpretation problems raised by s. 34, the history of the events can be shortly completed. The respondents attempted to deliver a notice, including a copy of the minutes of the Council meeting of September 19, to the appellants on October 26 but service of these documents was refused by a person on the premises of the church. On the following day (Saturday, October 27), somewhere between 7 and 8.45 in the morning, the appellants partially demolished the building. Injunction proceedings were then taken restraining the appellants from completing the demolition and this order continues to this date.

[Page 636]

I return to the question of the proper application of the provisions of s. 34, supra, in these proceedings. The Ontario Heritage Act, supra, sets forth a procedure whereby municipalities may designate properties within their boundaries as being of historic or architectural value or interest and thereafter may take proceedings to acquire such properties for permanent preservation. Section 29 of the Act was invoked by the respondent upon the passage of By‑law 157-79 in connection with the property in question. The succeeding sections of the Act then provide for the care, custody and ownership of the designated property. Section 34, for example, prohibits demolition except on authorization issued pursuant to that section and thereafter the Council shall either permit or refuse demolition and if the former, shall repeal the by-law designating the property under s. 29. Under s. 36 the Council may acquire by purchase, expropriation or otherwise any property designated under the statute.

The appellants here made application under s. 34(1) for approval of demolition. The application was denied. No notice in the sense of a written notice was given to the appellants by the respondent within the ninety-day period nor did the respondent cause any notice of its decision to be published in a newspaper in the City of Ottawa. In the facts of this case we have only the knowledge of the appellants of the refusal of the application as so found by the courts below, within the ninety-day period. Problems immediately arise relative to the effect:

(1) in law of the failure to deliver written notice to the owner under 2(c); and,

(2) of the deeming provision in subs. (3) which says in essence:

where the council fails to notify the applicant of its decision within ninety days after the notice of receipt is served on the applicant… council shall be deemed to have consented to the application.

It is to be noted at once that the terminology with respect to notice under subs. (2) is different from that of subs. (3). In subsection (2) the Council “shall cause notice… to be given” to the owner

[Page 637]

and in subs. (3) the provision is: “where the council fails to notify the applicant” within ninety days after “notice of receipt is served on the applicant”. There would appear to be a distinction between notice being given to the owner in subs. (2) and the requirement of notification to the applicant under subs. (3). Furthermore, the notice of receipt issued by the council must be “served” on the applicant under subs. (3). The verb ‘to serve’ is not employed in subs. (2). A similar contrast can be found with s. 29(3) which requires the Council to “serve” the notice of intention to designate the property in the first place.

Another problem arises from the phraseology employed by the Legislature in subs. (2)(b). This provision requires the Council to act within ninety days of receipt of the application by either consenting to or refusing the application. Clause (b) may go further and require a decision to prohibit demolition apart from the refusal of the application for demolition. The subsection reads: “The council… shall… refuse the application and prohibit any work to demolish… [the] building… for a period of 180 days…” Counsel for the appellants urged an interpretation whereby the conjunctive ‘and’ would be read as splitting the decision into two parts and requiring the Council not only to announce a refusal of the application but to announce a prohibition of demolition for 180 days. Here the by-law simply refuses the application for demolition. It would, in my view, put an undue strain on the language adopted by the Legislature to require the municipality when denying the application to go further and repeat the entire subs. 2(b). It is to be noted that in subs. (5)(b), when the 180-day period has expired, Council shall repeal the designating by-law. This clearly lays out a statutory scheme whereby the effect of a refusal of an application to demolish is to sterilize the property for a period of 180 days at the end of which, failing other authorized action by the Council, the Council must repeal the designating by-law. In my view, a proper construction of subs. (2)(b) does not require Council to decide on a refusal of a demolition application to prohibit demolition for 180 days; that result flows from the

[Page 638]

decision of denial of the application.

Subsection (2) goes on to require the Council, upon reaching a decision under clauses (a) or (b), to cause “notice” of this decision (and I note the word decision is in the singular) “to be given to the owner” and “to be published in a newspaper”. There is no requirement that the notice be in writing or that it be “served” on the owner. Nor indeed is there any requirement that the Council actually insert notice in a newspaper by way of advertisement or otherwise, but simply to cause notice to be published in a newspaper. Here the decision was indeed published in the newspaper and the evidence indicates one or more officers or trustees of the appellants saw the newspaper. I do not believe that the intention of the Legislature was to allow casual newspaper reports not “caused” by the Council to suffice as notice under subs. (2)(d). What therefore is the effect of the failure by Council to insert a notice of its decision in a local newspaper? I share the view, with respect, of the courts below that subs. (2)(d) is directory only and that its failure to publish in a local newspaper does not operate to invalidate the decision to deny the application for demolition authority.

As to the effect of subs. (2)(c) some help can be obtained by reading that provision in conjunction with subs. (3). Both subsections require the Council to cause a notice to be given to the owner or to notify the owner of the decision of the Council within the ninety-day period. Subsection (3) goes on to provide that upon failure to notify the applicant within the prescribed period “the council shall be deemed to have consented”. The deeming, be it noted, runs only to the requirement of notice under subs. (2)(c) and not publication under (2)(d). What then is the proper meaning in these circumstances of the deeming provision in subs. (3)? In Hickey v. Stalker (1923), 1923 494 (ON CA), 53 O.L.R. 414, [1924] 1 D.L.R. 440 (C.A.), Middleton J. was called upon to construe the meaning of the word “deemed”. His Lordship pointed out that the word imported one of two meanings, that is to say it meant either

[Page 639]

“deemed conclusively” or “deemed until the contrary is proved”, and then continued at p. 419:

I think this modified meaning should be given to the word as found in our statute, for it will not only save the legislation from being unjust but also from being absurd. That it is the duty of the Court, in seeking the true legislative intention of an Act, which undoubtedly is the sole duty of the Court, to regard the possible consequences of alternative constructions of ambiguous expressions, has been determined in many cases.

In this Court, Cartwright J., as he then was, on behalf of himself and Chief Justice Kerwin, adopted the interpretation of Middleton J. in the case of Gray v. Kerslake, 1957 21 (SCC), [1958] S.C.R. 3. His Lordship stated at p. 9:

In the case at bar, and in many cases which can easily be imagined, to construe the word “deemed” in s. 134(1) as “held conclusively” would be to impute to the Legislature the intention (i) of requiring the Court to hold to be the fact something directly contrary to the true fact,…

In that case the Court was concerned with the interpretation of a section of The Insurance Act, R.S.O. 1950, c. 183, which said:

134.—(1) A contract is deemed to be made in the Province:

(a) if the place of residence of the insured is stated in the application or the policy to be in the Province…

On the facts of that case the contract of insurance was made and was to be performed wholly outside the province. The contrary to the presumptive conclusion was proved and in fact admitted in the proceedings. The Court declined to apply the conclusive interpretation to the word ‘deemed’. The other members of the Court did not express an opinion on this aspect of the case.

The only reference in the statute to the mechanics of notice is to be found in s. 67(1) which provides:

67.—(1) Any notice or order required to be given, delivered or served under this Act or the regulations is sufficiently given, delivered or served if delivered per-

[Page 640]

sonally or sent by registered mail addressed to the person to whom delivery or service is required to be made at his last known address.

This provision I find to be of no help because it again does not specify whether the notice is required to be in writing and uses all three verbs—given, delivered or served—when providing that the notice is sufficiently given, delivered or served “if delivered personally”. The stipulation that notice “is sufficiently given… if delivered personally” does not modify the requirement beyond that stated in s. 34(2)(c) that “notice… be given”. The question therefore reduces itself to whether or not knowledge can be equated with notice, for we have here a finding in the courts below of knowledge. Section 10 of The Interpretation Act, R.S.O. 1970, c. 225, requires that all statutes be given “such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit”. In this appeal we are concerned with a statute of general effect clearly enacted for the benefit of the public at large and which establishes a simple procedure whereby both the public interest and the interest of the owner of the property in question can be served. Here, on the facts as found by the courts below, the owners of the property fully participated in the process inaugurated and carried forward under the provisions of The Ontario Heritage Act. There is no question of lack of knowledge, consultation or participation by the appellants at any stage of the process, either from its beginnings when designation occurred or where expropriation was undertaken in opposition to the written pleas of the appellants. In these circumstances, in my view, the statute is fairly and properly interpreted when knowledge is indeed equated with notice. The deeming provision in subs. (3) should, in my view, be interpreted as “deemed to be so until the contrary is proved”. Here the appellant owners were given notice by their presence at the Council meeting in question and thus both literally and substantially the Council did “cause notice of its decision to be given to the owner”. The owner was fully apprised of the decision and hence has received “notice” thereof, albeit informally and not in writing.

[Page 641]

The Council, having taken the necessary step in denying the application for authority to demolish, proceeded in accordance with the statutory directives by undertaking expropriation by by-law pursuant to s. 36 of the Act. The Council therefore is not required by s. 34(5) to repeal the designating by-law, the appropriate action having been taken within the prescribed ninety-day period.

Finally, it was submitted by counsel for the appellants that in order for the action of Council to be decisive, it must be announced in the manner prescribed by subs. (2) in order to “bind” the city and in order to fix the time for the commencement of the running of the 180-day period within subs. (2)(b). We are not here concerned with the situation which would result in the event a council of a municipality were to repeal the rejection by-law. Until By-law 261-79 has been repealed, the City is, in the sense of the argument, “bound” by its decision. It follows that under subs. (2)(b) the 180-day period automatically commenced to run with the refusal of the application for the demolition permit.

For these reasons I would dismiss the appeal with costs.

Appeal allowed with costs, ESTEY J. dissenting.

Solicitors for the appellants: Vice and Hunter, Ottawa.

Solicitor for the respondents: D.V. Hambling, Ottawa.