SUPREME COURT OF CANADA

Citation: London (City) v. RSJ Holdings Inc., [2007] 2 S.C.R. 588, 2007 SCC 29

Date: 20070621

Docket: 31300

Between:

Corporation of the City of London

Appellant

and

RSJ Holdings Inc.

Respondent

Coram: Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.

Reasons for Judgment:

(paras. 1 to 43)

Charron J. (Binnie, LeBel, Deschamps, Fish, Abella and Rothstein JJ. concurring)

london (city) v. rsj holdings

Corporation of the City of London Appellant

v.

RSJ Holdings Inc. Respondent

Indexed as: London (City) v. RSJ Holdings Inc.

Neutral citation: 2007 SCC 29.

File No.: 31300.

2006: November 15; 2007: June 21.

Present: Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.

on appeal from the court of appeal for ontario

Municipal law — By‑laws — Validity — Open meeting requirement — Municipality discussing and approving interim control by‑law at closed meetings contrary to open meeting statutory requirement — Whether meetings properly closed because interim control by‑laws may be passed without prior notice or hearing under provincial planning legislation — If open meeting requirement breached, whether Court of Appeal properly exercised its discretion to quash by‑law for illegality — Municipal Act, 2001, S.O. 2001, c. 25, ss. 239, 273 — Planning Act, R.S.O. 1990, c. P.13, s. 38.

The City appellant passed an interim control by‑law which effected a one‑year freeze on all land development along a particular corridor. RSJ, one of the affected land owners, applied for an order quashing the by‑law for illegality on the ground that the City discussed, and then effectively decided to pass the by‑law at two closed meetings, contrary to the City’s statutory obligation under s. 239(1) of the Municipal Act, 2001, to hold council and committee meetings in public. The Ontario Superior Court of Justice dismissed RSJ’s application, but the Court of Appeal set aside that decision and quashed the by‑law. The City’s argument before this Court was that its meetings fell within the exception in s. 239(2)(g) of the Municipal Act, 2001 because, under s. 38 of the Planning Act, an interim control by‑law may be passed without prior notice and without holding a public hearing. Alternatively, the City argued that the Court of Appeal erred in quashing the by‑law in the absence of any prejudice to RSJ.

Held: The appeal should be dismissed.

The interim control by‑law provisions contained in the Planning Act in no way obviate the statutory requirement to hold public meetings under s. 239 of the Municipal Act, 2001. It cannot be implied from the dispensation with any notice and hearing requirements under s. 38(3) of the Planning Act, that s. 38 authorizes the holding of a closed meeting within the meaning of the exception found in s. 239(2)(g). The City’s duty to give advance notice and to hold a public meeting at which interested citizens have the right to make representations is entirely distinct from its obligation to hold its meetings in public. Dispensing with notice and a hearing as permitted under s. 38(3) enables a municipal council to act expeditiously in passing an interim control by‑law whenever circumstances may require that it do so and, as such, this is consistent with the nature of this extraordinary zoning tool. However, the discussions on the interim control by‑law must still be conducted in open public session. The open meeting requirement set out in s. 239 concerns a citizen’s rights to observe municipal government in process and reflects a clear legislative choice for increased transparency and accountability in the decision‑making process of local governments. [4] [30‑32]

The Court of Appeal properly exercised its discretion in quashing the by‑law for illegality under s. 273 of the Municipal Act, 2001. In exercising its discretion, the court cannot act in an arbitrary manner, and the discretion must be exercised judicially and in accordance with established principles of law. On the question of deference, municipalities do not possess any greater institutional expertise on the issue of “illegality” than the courts. Furthermore, when a municipal government improperly acts with secrecy, this undermines the democratic legitimacy of its decision, and such decisions, even when intra vires, are less worthy of deference. In this case, the City acted within its jurisdiction in passing the interim control by‑law, but illegality under s. 273 is not strictly confined to matters of jurisdiction. The failure to comply with statutory procedural requirements may also provide sufficient grounds for quashing. The City’s conduct in closing the two meetings in question was neither inadvertent nor trivial and the short public session during the course of which the interim by‑law was passed without debate or discussion along with several other by‑laws did nothing to cure the defect. While RSJ did not have the right to notice of the City’s intention to pass the by‑law nor any right to make representations at a public hearing, it did have the right, along with other citizens, to a transparent and open process. In these circumstances, the contention that RSJ suffered no prejudice cannot be accepted. The Court of Appeal was correct to conclude that the potentially draconian effects of interim control by‑laws accentuate the need for the courts to jealously require that the meeting in which an interim control by‑law is discussed be open to the public as required by s. 239(1) of the Municipal Act, 2001. In the circumstances, quashing the by‑law was an entirely appropriate remedy. [4] [37‑43]

Cases Cited

Referred to: Country Pork Ltd. v. Ashfield (Township) (2002), 2002 41578 (ON CA), 60 O.R. (3d) 529; Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231; Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342, 2000 SCC 13; Immeubles Port Louis Ltée v. Lafontaine (Village), 1991 82 (SCC), [1991] 1 S.C.R. 326.

Statutes and Regulations Cited

Emergency Management and Civil Protection Act, R.S.O. 1990, c. E‑9, s. 2.1(1), (3), (7).

Municipal Act, 2001, S.O. 2001, c. 25, ss. 150, 238(1), 239, 273.

Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. M.56.

Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 36.

Planning Act, R.S.O. 1990, c. P.13, ss. 34(12), (13), 38.

Planning and Municipal Statute Law Amendment Act, 1994, S.O. 1994, c. 23.

Authors Cited

Doumani, Robert G., and Patricia A. Foran. Ontario Planning Act and Commentary, 2004/2005 ed. Markham, Ont.: LexisNexis Butterworths, 2004.

O’Connor, M. Rick. Open Local Government 2: How crucial legislative changes impact the way municipalities do business in Canada. St. Thomas, Ont.: Municipal World, 2004.

Ontario. Commission on Freedom of Information and Individual Privacy. Public Government for Private People. Toronto: The Commission, 1980.

Ontario. Legislative Assembly of Ontario. Hansard – Official Report of Debates, No. 162, 3rd Sess., 35th Parl., November 28, 1994.

Ontario. Ministry of Municipal Affairs. Open Local Government. Toronto: Queen’s Printer, 1992.

Ontario. Report of the Provincial/Municipal Working Committee on Open Meetings and Access to Information. Toronto: The Committee, July 1984.

APPEAL from a judgment of the Ontario Court of Appeal (Labrosse, Rosenberg and Gillese JJ.A.) (2005), 2005 43895 (ON CA), 205 O.A.C. 150, 16 M.P.L.R. (4th) 1, [2005] O.J. No. 5037 (QL), setting aside a decision of Rady J. (2005), 10 M.P.L.R. (4th) 88, [2005] O.J. No. 252 (QL), dismissing an application to quash a by‑law. Appeal dismissed.

George H. Rust‑D’Eye, Barnet H. Kussner and Kim Mullin, for the appellant.

Alan R. Patton and Analee J. M. Fernandez, for the respondent.

The judgment of the Court was delivered by

Charron J.—

1. Overview

1 On January 19, 2004, the City of London (“City”) passed an interim control by-law which effected a one-year freeze on all land development along the Richmond Street Corridor between Huron and Grosvenor Streets. RSJ Holdings Inc., one of the affected land owners, applied for an order quashing the by-law for illegality on the ground that the City discussed, and then effectively decided to pass the by-law at two closed meetings, contrary to the City’s statutory obligation under s. 239(1) of the Municipal Act, 2001, S.O. 2001, c. 25, to hold council and committee meetings in public.

2 RSJ’s application was dismissed in first instance on the basis that the closed meetings in question fell within the statutory exception under s. 239(2)(e), allowing for a closed meeting when potential litigation is the subject matter under consideration. Having so concluded, the application judge found it unnecessary to deal with the City’s additional contention that the closed meetings were also authorized under s. 239(2)(f) because the subject matter under consideration was subject to solicitor-client privilege. In response to RSJ’s appeal to the Court of Appeal for Ontario, the City reiterated its claims to litigation privilege and solicitor-client privilege. In addition, the City took the position that the closed meetings were authorized under another statute, hence triggering the exception under s. 239(2)(g). The Court of Appeal for Ontario rejected the City’s arguments, set aside the application judge’s decision, and quashed the by-law.

3 The City appeals from this decision on the ground that its closed meetings were authorized under another statute. Since neither notice nor public hearing is required before the passing of an interim control by-law under the provisions of the Planning Act, R.S.O. 1990, c. P. 13, the City contends that it may hold a closed meeting under s. 239(2)(g) when the subject matter under consideration is an interim control by-law. Alternatively, the City argues that the Court of Appeal erred in quashing the by-law in the absence of any prejudice to RSJ.

4 I would dismiss the appeal. In my view, the Court of Appeal was correct in concluding that the interim control by-law provisions contained in the Planning Act in no way obviate the statutory requirement to hold public meetings under s. 239 of the Municipal Act, 2001. I also conclude that the Court of Appeal properly exercised its discretion in quashing the by-law. The open meeting requirement reflects a clear legislative choice for increased transparency and accountability in the decision-making process of local governments. I do not accept the contention that RSJ has not suffered prejudice. If anything, the enactment of an interim by-law, given its powerful nature and potential draconian effect on affected land owners, enhances the need for transparency and accountability. Further, the City’s disregard of its statutory obligation to hold public meetings in this case was neither inadvertent nor trivial. In the circumstances, quashing the by-law was an entirely appropriate remedy.

2. Facts and Proceedings Below

5 In September 2003, a group of residents of London, Ontario, who lived around Richmond Street complained to the City about the increase of student housing in their residential neighbourhood. In response, the City’s Planning Committee passed a resolution on September 29, 2003, requesting the City Solicitor to study the issue.

6 In November 2003, RSJ bought a residential property on Richmond Street with the intention of demolishing the existing building and constructing four individual residential units in its place. To this end, between November 2003 and January 2004, RSJ submitted to the City a site plan for approval, applied for a demolition permit, and applied for a building permit. The City took no action in respect of RSJ’s applications.

7 In response to the Planning Committee’s request of September 29, 2003, the City Solicitor delivered a report to the Planning Committee at its meeting of December 8, 2003. The City Solicitor reported on the prospect of regulating the number of bedrooms in a dwelling unit, and on the use of s. 150 of the Municipal Act, 2001, to license student housing as a business but made no reference to the possible enactment of an interim control by-law.

8 In January 2004, the City considered the Richmond Street issue during the course of two meetings that were closed to the public. It is these two closed meetings that are at the heart of this appeal.

9 The City’s Planning Committee, composed of seven City Council members, held the first closed meeting on January 12, 2004. The Planning Committee’s public agenda revealed that a confidential matter was to be discussed at that meeting but did not disclose what it concerned. At the meeting, the Planning Committee considered a report by the City’s acting general manager of planning and development. The report recommended that a land use study be undertaken for properties along the Richmond Street Corridor between Huron and Grosvenor Streets, because of the concerns that had been expressed regarding the “potential impacts of [residential] intensification on the surrounding neighbourhood” (“Planning Report of R. Panzer”, Tab 11B in appellant’s record, at p. 71). The Planning Committee also considered a draft interim control by‑law which, if passed, would freeze all development in an area that included the part of Richmond Street where RSJ’s property was located.

10 The second closed meeting was held on the evening of January 19, 2004. The evening began with a public meeting of the 19-member City Council. Included on the public agenda was an item entitled “Committee of the Whole, in camera”. The Committee of the Whole is a standing committee of the City Council comprising all 19 members of the City Council. Its role is to make recommendations to the City Council. The agenda did not reveal the subject matter of the scheduled in camera meeting. The agenda also listed 14 by-laws that were to be read a first, second and third time. No reference was made to an interim control by-law in this list.

11 The City Council rose at 7:57 p.m. and went into the Committee of the Whole for its closed meeting. The City agrees that, during this closed meeting, the Committee of the Whole discussed not only the Solicitor’s report but also the planning report and the proposed interim control by-law that would freeze development around Richmond Street. The Committee of the Whole made two recommendations: first, that a land use study be undertaken concerning the area covered by the proposed interim control by-law; and, second, that City Council approve the proposed interim control by-law.

12 The City Council resumed in a regular public session at 10:22 p.m. The public meeting lasted until 10:30 p.m. During this eight-minute session, the City Council introduced, gave three readings to, and passed 32 by-laws, including the impugned interim by-law, without public debate or discussion.

13 RSJ brought an application under s. 273(1) of the Municipal Act, 2001 for an order quashing the interim control by-law for illegality on the ground that the City had contravened the general obligation under s. 239(1) of the Municipal Act, 2001 to hold all meetings in public. The Ontario Superior Court of Justice dismissed RSJ’s application ((2005), 10 M.P.L.R. (4th) 88). The application judge accepted the City’s contention that both meetings of January 12 and 19 fell within the exception under s. 239(2)(e) of the Municipal Act, 2001 which allows municipal councils to hold closed meetings where the subject matter concerns “litigation or potential litigation”. The application judge reasoned that there was no doubt that RSJ, in light of its investment in the Richmond Street property, would challenge the interim control by-law and therefore a real potential for litigation existed at the time of the closed meetings. Having so concluded, the application judge found it unnecessary to deal with the City’s additional contention that the meetings were also authorized under s. 239(2)(f) which allows for closed meetings where the subject matter concerns advice that is subject to solicitor-client privilege.

14 The application judge further held that any votes taken during the two closed meetings were procedural only and, as such, were permissible under s. 239(6)(b) of the Municipal Act, 2001. Finally, the application judge held that the City’s failure to comply with s. 239(4), which requires the City to state by resolution the general nature of the matter to be considered at the closed meeting, caused no prejudice and in no way affected the substantive validity of the by-law.

15 RSJ appealed the decision to the Court of Appeal for Ontario ((2005), 2005 43895 (ON CA), 16 M.P.L.R. (4th) 1). The City reiterated its argument that the meetings were properly closed because they concerned potential litigation under s. 239(2)(e), and advice that was subject to solicitor-client privilege under s. 239(2)(f). In addition, the City submitted that the meetings fell within the exception under s. 239(2)(g), which allows for a closed meeting where the subject matter under consideration is a matter in respect of which a committee or council may hold a closed meeting under another Act. The City argued that, since neither notice nor public hearing is required before the passing of an interim control by-law under the provisions of the Planning Act, this constitutes “a matter in respect of which ... a closed meeting” can be held “under another Act” within the meaning of s. 239(2)(g). The Court of Appeal rejected all three arguments, and quashed the interim control by-law for illegality.

16 The City appeals this decision on the ground that the closed meetings were authorized under s. 239(2)(g) of the Municipal Act, 2001. Alternatively, it argues that the by-law should not be quashed.

3. Analysis

3.1 The Open Meeting Requirement

17 As we shall see, s. 239 of the Municipal Act, 2001 requires that all municipal meetings be open to the public, except where the subject matter being considered at the meeting falls within one of seven categories expressly set out in the statute. However, before reviewing the relevant statutory provisions, it may be useful to recall the state of affairs that existed in Ontario prior to the enactment of s. 239.

18 Prior to 1995, whether a meeting was open to the public or not generally depended not on the subject matter under consideration, but on the type of meeting being held. In Ontario, as well as under various provincial statutes, regular council meetings were generally open to the public while committee and other meetings were closed and could only be opened at the discretion of council (M. R. O’Connor, Open Local Government 2: How crucial legislative changes impact the way municipalities do business in Canada (2004), at p. 25). It is particularly noteworthy that one recurring problem mentioned in the 1984 Ontario Report of the Provincial/Municipal Working Committee on Open Meetings and Access to Information was that “some municipal councils employ lengthy, in-camera special and committee meetings to discuss matters under debate and then ratify their decision in full council in a few minutes, with minimal discussion” (p. 2). See also, the report of the Ontario Commission on Freedom of Information and Individual Privacy (“Williams Commission”), Public Government for Private People (1980). In the hope of thereby fostering democratic values, and responding to the public’s demand for more accountable municipal government, these reports recommended compulsory open meetings of municipal councils and committees, subject to narrow exceptions.

19 These recommendations were acted upon by the Government of Ontario in the early 1990s (Ontario, Ministry of Municipal Affairs, Open Local Government (1992), at pp. 2-3 and 31) and Bill 163 (the Planning and Municipal Statute Law Amendment Act, 1994, S.O. 1994, c. 23) adopted the open meeting requirement that is now contained in s. 239 of the Municipal Act, 2001. The open meeting requirement was intended to increase public confidence in the integrity of local government, by ensuring the open and transparent exercise of municipal power (Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 162, November 28, 1994, at p. 7978 (Pat Hayes)).

20 Against this brief historical backdrop, I will now review the relevant statutory provisions.

21 Section 239(1) of the Municipal Act, 2001 broadly requires that municipal meetings be open, while s. 239(2) lists the exceptions to this requirement:

239. (1) Except as provided in this section, all meetings shall be open to the public.

(2) A meeting or part of a meeting may be closed to the public if the subject matter being considered is,

(a) the security of the property of the municipality or local board;

(b) personal matters about an identifiable individual, including municipal or local board employees;

(c) a proposed or pending acquisition or disposition of land by the municipality or local board;

(d) labour relations or employee negotiations;

(e) litigation or potential litigation, including matters before administrative tribunals, affecting the municipality or local board;

(f) advice that is subject to solicitor-client privilege, including communications necessary for that purpose;

(g) a matter in respect of which a council, board, committee or other body may hold a closed meeting under another Act.

22 The imperative “shall” in s. 239(1) demonstrates that, in the normal business of municipal government, meetings will be transparent and accessible to the public. The importance of open meetings is reinforced by the permissive “may” in s. 239(2), which allows but does not require municipal governments to close a meeting when its subject matter falls within one of the seven exceptions. By contrast, s. 239(3), which does not concern us on this appeal, requires that a meeting be closed to the public if the subject matter relates to the consideration of a request under the Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. M.56.

23 The words “committee” and “meeting” are broadly defined in s. 238(1) of the Municipal Act, 2001, as follows:

“meeting” means any regular, special, committee or other meeting of a council or local board.

“committee” means any advisory or other committee, subcommittee or similar entity of which at least 50 per cent of the members are also members of one or more councils or local boards;

It is uncontested that the closed meetings held on January 12 and 19, 2004, were meetings as defined in s. 238(1) since all of the members of both the Planning Committee and the Committee of the Whole were also members of the City Council.

24 Under the statute, even closed meetings are subject to some public scrutiny, as s. 239(4) requires public notice of the holding of the meeting and of its general subject matter. It reads as follows:

239. . . .

(4) Before holding a meeting or part of a meeting that is to be closed to the public, a municipality or local board or committee of either of them shall state by resolution,

(a) the fact of the holding of the closed meeting; and

(b) the general nature of the matter to be considered at the closed meeting.

The City concedes that it breached s. 239(4) in this case.

25 The open meeting requirement is further reinforced in ss. 239(5) and 239(6) with respect to the taking of a vote. A meeting may only be closed to the public during a vote where the closed meeting is permitted or required under subss. (2) and (3) and the vote is for a procedural matter only or for giving directions or instructions to certain specified persons. These provisions read as follows:

239. . . .

(5) Subject to subsection (6), a meeting shall not be closed to the public during the taking of a vote.

(6) Despite section 244 [which generally prohibits voting by ballot or other method of secret voting], a meeting may be closed to the public during a vote if,

(a) subsection (2) or (3) permits or requires the meeting to be closed to the public; and

(b) the vote is for a procedural matter or for giving directions or instructions to officers, employees or agents of the municipality, local board or committee of either of them or persons retained by or under a contract with the municipality or local board.

26 The City no longer contends that the impugned meetings concerned matters that were subject to litigation or solicitor-client privilege and, in my view, rightly so. The City’s sole argument is that its meetings fell within the exception in s. 239(2)(g) of the Municipal Act, 2001 because, under the provisions of the Planning Act, an interim control by-law may be passed without prior notice and without holding a public hearing. I therefore turn to the relevant provisions of the Planning Act.

3.2 Interim Control By-Laws Under the [Planning Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html)

27 Interim control by-laws are powerful zoning tools by which municipalities can broadly freeze the development of land, buildings and structures within a municipality. The power to enact an interim control by-law has been aptly described as “an extraordinary one, typically exercised in a situation where an unforeseen issue arises with the terms of an existing zoning permission, as a means of providing breathing space during which time the municipality may study the problem and determine the appropriate planning policy and controls for dealing with the situation” (R. G. Doumani and P. A. Foran, Ontario Planning Act and Commentary (2004 ed. 2004/2005), at p. 46). As the wording of the Planning Act makes clear however, there are few statutory constraints on the use of this “extraordinary” power.

28 As the City correctly notes, the sole statutory precondition, which has been fulfilled in this case, is that council first direct that a land use study take place concerning the area covered by the interim control by-law. The governing provision is s. 38 of the Planning Act, the relevant parts of which read as follows:

38. (1) Where the council of a local municipality has, by by‑law or resolution, 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, the council of the municipality may pass a by‑law (hereinafter referred to as an interim control by‑law) to be in effect for a period of time specified in the by‑law, which period shall not exceed one year from the date of the passing thereof, prohibiting the use of land, buildings or structures within the municipality or within the defined area or areas thereof for, or except for, such purposes as are set out in the by‑law.

(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.

(3) No notice or hearing is required prior to the passing of a by‑law under subsection (1) or (2) but the clerk of the municipality shall, in the manner and to the persons and public bodies and containing the information prescribed, give notice of a by‑law passed under subsection (1) or (2) within thirty days of the passing thereof.

(4) Any person or public body to whom notice of a by‑law was given under subsection (3) may, within sixty days from the date of the passing of the by‑law, appeal to the Municipal Board 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.

29 The City argues that since the public has no right to advance notice of the proposed interim control by-law and no right to participate in the process of passing such a by-law, it follows that, at least by implication, the enactment of an interim control by-law is a “matter in respect of which a council . . . may hold a closed meeting under another Act” within the meaning of s. 239(2)(g) of the Municipal Act, 2001. I disagree.

30 The City’s duty to give advance notice and to hold a public meeting at which interested citizens have the right to make representations is entirely distinct from its obligation to hold its meetings in public. In order to understand what kind of notice and hearing is in effect dispensed with under s. 38(3), it is instructive to look at ss. 34(12) and 34(13) of the Planning Act which set out the usual notice and hearing requirements that must be met before a zoning by-law may be passed under that section. These provisions currently read as follows:

34. . . .

(12) Before passing a by-law under this section, except a by-law passed pursuant to an order of the Municipal Board made under subsection (11) or (26),

(a) the council shall ensure that,

(i) sufficient information and material is made available to enable the public to understand generally the zoning proposal that is being considered by the council, and

(ii) at least one public meeting is held for the purpose of giving the public an opportunity to make representations in respect of the proposed by-law; and

(b) in the case of a by-law that is required by subsection 26(9) or is related to a development permit system, the council shall ensure that at least one open house is held for the purpose of giving the public an opportunity to review and ask questions about the information and material made available under subclause (a)(i).

(13) Notice of the public meeting required under subclause (12)(a)(ii) and of the open house, if any, required by clause (12)(b),

(a) shall be given to the prescribed persons and public bodies, in the prescribed manner; and

(b) shall be accompanied by the prescribed information.

31 The dispensation with any notice and hearing requirements under s. 38(3) of the Planning Act enables a municipal council to act expeditiously in passing an interim control by-law whenever circumstances may require that it do so and, as such, it is consistent with the nature of this extraordinary zoning tool. By way of example, RSJ filed affidavit evidence from a London City councillor describing how, in July 1992, the City Council became aware that a property owner had begun cutting down trees on his property, creating a risk of damage to the land and adjoining land. The property was zoned “Open Space”. London City Council therefore urgently convened a special session at 10:00 a.m. on July 3, 1992 to consider, discuss, and ultimately pass an interim control by-law in respect of a particular property. No advance notice or hearing was required. However, all discussions were conducted in open public session.

32 This example demonstrates the clear distinction between a citizen’s right to notice and participation, and his or her right to observe municipal government in process. The open meeting requirement set out in s. 239 of the Municipal Act, 2001 concerns the latter. In my view, nothing contained in s. 38 of the Planning Act authorizes the holding of a closed meeting within the meaning of the exception found in s. 239(2)(g) of the Municipal Act, 2001. A clear example of another Act that falls within this exception can be found under s. 2.1(7) of the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E-9 (“Emergency Management Act”). It reads as follows:

2.1 . . .

(7) The council of a municipality shall close to the public a meeting or part of a meeting if the subject matter being considered is the council’s approval for the purpose of subsection (5).

The Emergency Management Act requires municipalities to “develop and implement an emergency management program” in order to “identify and assess the various hazards and risks to public safety that could give rise to emergencies and identify the facilities and other elements of the infrastructure that are at risk of being affected by emergencies” (ss. 2.1(1) and 2.1(3)). Hence, for obvious security reasons related to the confidential nature of some information contained in this emergency management program, the Emergency Management Act explicitly allows municipalities to hold meetings that are closed to the public (s. 2.1(7)). In stark contrast, there is nothing concerning the nature of an interim by-law or in the language of s. 38 of the Planning Act that lends support to the City’s contention.

33 I therefore conclude that the City breached s. 239 of the Municipal Act, 2001 by closing its committee and council meetings of January 12 and 19, 2004 during its discussion of the interim control by-law No. C.P. 1438-33. The remaining question is whether the Court of Appeal properly exercised its discretion to quash the City’s interim control by-law for this illegality. I therefore turn to the question of remedy.

3.3 Quashing a By-Law for Illegality

34 RSJ’s application was brought under s. 273 of the Municipal Act, 2001. The relevant parts of this provision read as follows:

273. (1) Upon the application of any person, the Superior Court of Justice may quash a by-law of a municipality in whole or in part for illegality.

(2) In this section,

“by-law” includes an order or resolution.

(4) The court may direct that nothing shall be done under the by-law until the application is disposed of.

(5) An application to quash a by-law in whole or in part . . . shall be made within one year after the passing of the by-law.

35 “Illegality” is not defined under the statute. In its ordinary meaning, it is a broad generic term that encompasses any non-compliance with the law. However, s. 273 must be read in conjunction with other provisions. Under s. 38(4) of the Planning Act, an appeal from an interim control by-law lies to the Ontario Municipal Board (OMB). In turn, s. 36 of the Ontario Municipal Board Act, R.S.O. 1990, c. O. 28, gives the OMB exclusive jurisdiction “in all cases and in respect of all matters in which jurisdiction is conferred on it by this Act or by any other general or special Act”.

36 In first instance, the City raised the threshold question whether the court should entertain the application or defer the matter to the OMB. Based on principles established in Country Pork Ltd. v. Ashfield (Township) (2002), 2002 41578 (ON CA), 60 O.R. (3d) 529 (C.A.), the application judge assumed jurisdiction, stating as follows (at paras. 26-27):

In determining whether the court ought to assume jurisdiction in this case, it is necessary to consider the nature of the attack: Country Pork Ltd. v. Ashfield (Township) (2002), 2002 41578 (ON CA), 60 O.R. (3d) 529 (Ont. C.A.). Section 273(1) of the Act is “not a vehicle for consideration of the merits of a municipality’s decision to pass the bylaw, or whether it conforms to proper municipal planning principles” (at p. 542). Those matters are for the OMB and fall within its specialized expertise.

Based on the material before me and the applicants’ submissions during argument, I am satisfied that this application involves “a direct frontal attack on the underlying validity and legality of the bylaw” as set out in Country Pork (supra), thereby attracting the jurisdiction of the Superior Court. I am not being asked to rule on the merits of the City’s decision nor whether proper planning principles were considered.

37 In my view, this approach is sound. While the language in s. 273(1) of the Municipal Act, 2001 is broad, the supervisory jurisdiction of the Superior Court, when considered in context, is more limited and should not be read as usurping the role of the OMB and its specialized expertise. The question of jurisdiction is no longer before this Court. Nonetheless, the City argues that the overarching principle which should govern the court on a s. 273 review of a municipal by-law is one of deference. While this approach may be appropriate on a review of the merits of a municipal decision, in my view, the City’s argument is misguided here. Municipalities are creatures of statute and can only act within the powers conferred on them by the provincial legislature: Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231, at p. 273. On the question of “illegality” which is central to a s. 273 review, municipalities do not possess any greater institutional expertise than the courts — “[t]he test on jurisdiction and questions of law is correctness”: Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342, 2000 SCC 13, at para. 29.

38 In light of the particular statutory provision that occupies us — the open meeting requirement — I would add the following comment on the principle of deference. The dissent of McLachlin J. (as she then was) in Shell Canada is often cited as a broad statement of the deference that courts owe to municipal governments. In large part, this deference is founded upon the democratic character of municipal decisions. Indeed, McLachlin J. recognized that deference to municipal decisions “adheres to the fundamental axiom that courts must accord proper respect to the democratic responsibilities of elected municipal officials and the rights of those who elect them” (p. 245). Municipal law was changed to require that municipal governments hold meetings that are open to the public, in order to imbue municipal governments with a robust democratic legitimacy. The democratic legitimacy of municipal decisions does not spring solely from periodic elections, but also from a decision-making process that is transparent, accessible to the public, and mandated by law. When a municipal government improperly acts with secrecy, this undermines the democratic legitimacy of its decision, and such decisions, even when intra vires, are less worthy of deference.

39 The power to quash a by-law for illegality contained in s. 273(1) of the Municipal Act, 2001 is discretionary. Of course, in exercising its discretion, the court cannot act in an arbitrary manner. The discretion must be exercised judicially and in accordance with established principles of law. Hence, when there is a total absence of jurisdiction, a court acting judicially will quash the by-law. In other cases, a number of factors may inform the court’s exercise of discretion including, the nature of the by-law in question, the seriousness of the illegality committed, its consequences, delay, and mootness. For a helpful discussion on the discretionary power to quash a municipal by‑law, see Immeubles Port Louis Ltée v. Lafontaine (Village), 1991 82 (SCC), [1991] 1 S.C.R. 326.

40 In this case, it is not contested that the City acted within its jurisdiction in passing the interim control by-law. There is only one statutory precondition to passing an interim control by-law, namely the stipulation in s. 38(1) of the Planning Act requiring a municipal council to direct that a land use study be undertaken, and the City complied with that condition. Further, the interim control by-law was voted on and passed during an open meeting of the City Council in compliance with the voting requirements for passing a by-law. However, illegality under s. 273 is not strictly confined to matters of jurisdiction. The failure to comply with statutory procedural requirements that do not go to jurisdiction may nonetheless provide sufficient grounds for quashing.

41 In this case, I would not interfere with the Court of Appeal’s exercise of discretion. The City’s conduct in closing the two meetings in question was neither inadvertent nor trivial. In fact its council meeting of January 19, 2004 was conducted in a manner that is rather reminiscent of the problems reported more than 20 years ago that led to the passing of the statutory open meeting requirement. It is worth repeating the words of the Working Committee quoted earlier: “some municipal councils employ lengthy, in-camera special and committee meetings to discuss matters under debate and then ratify their decision in full council in a few minutes, with minimal discussion”. In my view, the eight-minute public session during the course of which the interim by-law was passed without debate or discussion along with 31 other by-laws did nothing to cure the defect.

42 Further, while RSJ did not have the right to notice of the City’s intention to pass the by-law nor any right to make representations at a public hearing, it did have the right, along with other citizens, to a transparent and open process. The Court of Appeal was correct to conclude that the potentially draconian effects of interim control by-laws accentuate the need for the courts to jealously require that “the meeting in which an interim control by-law is discussed be open to the public as required by s. 239(1) of the Act” (para. 27). In these circumstances, I do not accept the contention that RSJ suffered no prejudice.

4. Disposition

43 For these reasons, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: WeirFoulds, Toronto.

Solicitors for the respondent: Patton Cormier & Associates, London.