[1] Southgate Public Interest Research Group (“SPIRG”) brings this Application under the Ontario Building Code Act, 1992 (the “Act”) for an Order appealing the decision of the Chief Building Official (the “CBO”) of The Corporation of the Township of Southgate (the “Town”) to issue Building Permit No. 2452D/2012 (the “Building Permit”) to Lystek International Inc. (“Lystek”) for the construction of a facility to be owned and operated by Lystek (“Lystek Facility”).

[2] The relevant portions of s. 25 of the Act provide as follows:

(1) A person who considers themself aggrieved by an order or decision made by the chief building official, a registered code agency or an inspector under this Act (except a decision under subsection 8 (3) not to issue a conditional permit) may appeal the order or decision to the Superior Court of Justice within 20 days after the order or decision is made.

(4) On an appeal, a judge may affirm or rescind the order or decision and take any other action that the judge considers the chief building official, registered code agency or inspector ought to take in accordance with this Act and the regulations and, for those purposes, the judge may substitute his or her opinion for that of the official, agency or inspector.

[3] On such an appeal, the Court stands in the shoes of the CBO from whose decision the appeal is brought, and can make any decision which the CBO ought to have made when issuing the building permit.

[4] SPIRG seeks an order “rescinding” the Building Permit.

[5] The central issue is whether the CBO properly issued the Building Permit under s. 8 of the Act.

[6] The relevant portions of s. 8 of the Act provide:

(1) No person shall construct or demolish a building or cause a building to be constructed or demolished unless a permit has been issued therefore by the chief building official.

(2) The chief building official shall issue a permit referred to in subsection (1) unless,

(a) the proposed building, construction or demolition will contravene this Act, the building code or any other applicable law;

(emphasis added)

[7] Regulation 350/06 under the Act defines “applicable law” for the purpose of s. 8(2) of the Act. Under section 1.4.1.3(1)(e) of the said regulation, all by-laws made under s. 34 and 38 of the Planning Act, R.S.O. 1990, c. P.13 are applicable law. Consequently, the parties agree that “applicable law” includes compliance with the zoning by-laws of the Town.

[8] The duty of the CBO to issue a permit once compliance is shown "is absolute." The CBO does not have any residual discretion as to whether to issue a building permit.

The Background

[9] The subject property is located at Part of Lots 235 and 236, Concession 2, SWTSR (Proton), in the Township of Southgate, in the County of Grey (the “Subject Property”). The Subject Property was formerly in the Village of Dundalk.

[10] Prior to 2011 the Subject Property was owned by the Town.

The Town’s 2002 Zoning By-law

[11] On May 22, 2002 the Town passed Zoning By-law No. 19-2002 (“2002 Zoning By-law”). The 2002 Zoning By-law prohibits “the use of land for or except for such purposes as set out in the by-law and prohibiting the erection or use of buildings or structures for or except for such purposes.”

[12] The 2002 Zoning By-law provided the following for land zoned as “M1”:

22.1 No person shall within any Industrial Zone (M1) use any land, build or erect, alter or use any building or structure, except in accordance with the following provisions:

22.1 Permitted Uses

(f) Light or Dry Industry

22.2 Regulations for Uses Permitted in Subsection 22.1

(a) All development must be on municipal water and sewer services.

“Industry, Dry” means the use of land, building or structure for the manufacturing, assembly, storage or processing of goods or materials in which large quantities of water are not consumed and/or large quantities of effluent are not discharged.

[13] On August 20, 2003, the 2002 Zoning By-law was amended to re-zone the Subject Property from Agricultural to General Industrial (M1) (“M1 Zoning”).

The Town’s 2009 Zoning By-Law

[14] On February 4, 2009, the Town further amended the 2002 Zoning By-law to its currently in-force version (the “2009 Zoning By-law”). The 2009 Zoning By-law continues the prohibition on the construction on or use of the land except in compliance with the permitted uses set out in the 2009 Zoning By-law.

[15] Prior to passing the 2009 Zoning By-law there were two versions of the by-law in circulation. It appears that one version of the proposed amendment made minor changes to the 2002 Zoning By-Law (“Version One”). However, the Town ultimately had decided to make more significant changes to 2002 Zoning By-Law. It was this latter version of the proposed amendments to 2002 Zoning By-Law which was circulated to governmental agencies and the public (“Version Two”).

[16] Version Two amended the permitted uses on M1 lands by replacing Dry Industry with “General Industry” and a specific permitted use of a “Waste Processing Facility.”

[17] On February 4, 2009 the Town Council believed it had passed Version Two as the 2009 Zoning By-law. The Town continued to believe that Version Two was the applicable 2009 Zoning By-law for several years. The Town identified Version Two in its website as the applicable, in force, 2009 Zoning By-law.

[18] As a result, the Town believed that waste processing facility was a permitted use on M1 lands and hence, on the Subject Property.

Sale to Lystek

[19] The Town negotiated the sale of the Subject Property to Lystek for the purpose of constructing and operating a “waste processing facility.” The parties entered into an Agreement of Purchase and Sale, dated June 20, 2011 (the “Agreement of Purchase and Sale”).

[20] The Agreement of Purchase and Sale provided that:

a) The Subject Property was to be used as a “waste processing facility.” The Town confirmed that the Subject Property was zoned to permit a waste processing facility. Lystek would use the Subject Property as a waste processing facility for the diversion of various organic waste materials from land filling and to process these wastes for end use as a fertilizer product for the agricultural sector; and

b) The Town was to service the Subject Property prior to construction or use of the Lystek Facility. Specifically, the Agreement of Purchase and Sale provided:

No building, structure or use accessory thereto shall be constructed or commenced until,

(iii) the Township of Southgate has completed the servicing of the Property in accordance with its Municipal Servicing Standards with public road access containing municipal sewer water and storm sewer. Servicing of the Property should include water, sanitary sewers and hydro (customer to be responsible for transformer costs) to the Property lot line.

Southgate will be responsible for the following and will,

Sell fully serviced land in the Industrial Park to allow the Company to build its facility as previously described. Fully serviced land consists of water, sanitary sewers, hydro, [and] service to the property line or as provided by the utility provides excluding the Company’s need for electrical transformers.

The Lystek Facility

[21] The Lystek Facility is designed to accept a total of 150,000 tonnes per year of biosolids, septage and organic feedstocks which will be processed into a liquid fertilizer product for commercial sale. The Lystek’s process uses a combination of heat generated by steam from a boiler, alkali, and high shear mixing to breakdown the material into the final product.

[22] Lystek’s building permit application dated November 3, 2011 sets out that the proposed new construction, with a project value of approximately $5,000,000, includes a building with an area of 20,500 square feet. The Lystek Facility includes washrooms, a laboratory and a small kitchen.

[23] The Lystek Facility may require municipal water for staff washrooms, the laboratory, and the kitchenette area. For its processing, Lystek may require water for the dilution of the incoming biosolids and for the generation of steam from the boiler. The Design and Operations Report for the Lystek Facility states:

It is expected that the majority of process water requirements at the Centre will be satisfied by the incoming feedstocks, clean surface water taken from the on-site retention ditch and clean surface water take from above the final product lagoon storage covers. Potable water may be used if required.

[24] Lystek anticipates that the Lystek Facility could require an average of 5,000 litres per day of potable water from the municipal supply for its daily operations.

[25] The Design and Operations Report indicates that the Lystek Facility may discharge wastewater from the office and laboratory areas into the sanitary sewers. In addition:

in the unlikely event that excess process water is generated by the Centre, this will also be discharged to the sanitary sewer, pending confirmation that the quality of this liquid is within the sewer-use by-law specifications for the Township.

[26] The Town has allocated three equivalent residential units of sewage capacity and four equivalent residential units of municipal water capacity for the Lystek Facility. The municipal water usage will be measured in the usual way, a water meter. The Town required Lystek to install a sewage meter, to ensure that its discharge to the municipal sewers could be measured against the limitation imposed.

The Current and Applicable Zoning By-Law

[27] In December 2011, it was apparent that public opposition to the proposed Lystek facility had arisen.

[28] As a result of the opposition to the development, the Town realized it had inadvertently passed Version One on February 4, 2009. The Town, upon realizing its error, re-posted on December 7, 2011 Version One as the in-force zoning by-law.

[29] All parties agree that Version One of the Town’s By-law is the applicable zoning by-law for the Subject Property (“2009 Zoning By-law").

[30] S. 2.3 of the 2009 Zoning By-law provides:

2.3 Licences and Permits

(a) In addition to fulfilling the requirements of this By-law, no person shall

commence to erect, alter or repair any building or structure without first

obtaining building permit from the Municipality, where necessary.

(b) No municipal permit or licence shall be issued where said permit is

required for a proposed use of land or the proposed erection, alteration,

enlargement, or use of any building or structure that is in violation of any

provision of this By-law.

[31] The Subject Property remains zoned M1.

[32] “General Industrial” is the title of the M1 Zone, but it is not listed as a permitted use in this, or any other, zone.

[33] The 2009 Zoning By-law defines the term “Industrial, General” as:

the use of land, building(s) or structure(s) for the manufacturing, assembly, storage or processing of goods or materials, not otherwise defined in this By-law.

[34] I am not persuaded that the title to the M1 Zone is relevant to the issues to be decided in this application as it is the specified permitted uses described within the M1 Zone that must be considered and not the general wording of the heading of the M1 Zone.

[35] The 2009 Zoning By-law provides that the use of any land, building, or structure in the M1 Zone is restricted to the specified permitted uses listed in s. 22.1, which includes “Light or Dry Industry.”

[36] The definition of “Industry, Dry” was amended in the 2009 Zoning By-law to read as follows:

[A] use which could exist without the necessity of a municipal water and municipal sewage system to accommodate it and is one where only waste water discharges are from employee washrooms and/or waste water used for cooling or pressure testing of equipment, washing of accessory vehicles and similar ancillary uses.

(emphasis added)

[37] M1 Zone provides certain regulations for uses to the developments in the M1 Zone. Section 22.2 (a) of the M1 Zone provides as follows:

22.2 Regulations for Uses Permitted in Subsection 22.1

(a) all development must be on municipal water and sewer services.

(emphasis added)

The Problem

[38] The difficulty that the Town found itself on December 7, 2011 is not an enviable one. It sold the Subject Property to Lystek for the construction and operation of a waste processing facility, a permitted use specifically set out in Version Two, the applicable zoning by-law, or so the Town believed. The Town had assured Lystek it would receive a building permit to construct its facility.

[39] At the same time, the public had become aware of what was to be built on the Subject Property and, as is sometimes the case, the neighbours did not want this type of facility built and operated near them.

[40] SPIRG sent a letter on December 7, 2011 objecting to the proposed Lystek facility and urging the Town not to pass a by-law ratifying the sale of the Subject Property to Lystek and advising that SPIRG would appeal any building permit issued to approval Lystek.

[41] A further amendment to the Zoning By-law or a site specific zoning by-law amendment or a minor variance, requiring public notice and further approvals, might now be problematic for the Town.

The Building Permit Application and the CBO’s Decision

[42] On November 3, 2011, Lystek applied for a building permit for the construction of the Lystek Facility on the Subject Property.

[43] On December 14, 2011, SPIRG sent a letter to the CBO demanding that he make his own decision, acting independently, as the CBO.

[44] The CBO relied on the following:

(a) his considerable expertise and experience in dealing zoning compliance;

(b) a legal opinion from outside counsel regarding the 2009 Zoning By-law and the Dry Industry permitted use;

(c) advice from a planner in the Town’s Planning Department;

(d) SPIRG’s written submissions; and

(e) His own enquiries and information received in response.

[45] There are two additional specific items which the CBO relied on in coming to his conclusion which have become an issue between the parties:

(a) Lystek’s confirmation it “could” operate without Town services:

Lystek has specifically advised the Township that it is able to operate its waste processing facility within the constraints imposed by the definition "Industry, Dry" under the Zoning By-law.

It is unfair to the CBO to suggest that he simply relied on what Lystek “confirmed.” He didn’t do that. He did what appears to be a thorough review of Lystek’s Facility and proposed operations, made enquiries and determined that the statements appeared to be reasonable. He had no reason to doubt the statements made by Lystek that the Lystek Facility could be operated without municipal services. He concluded that the municipal services were only a “back up” or for “unexpected" use which would be "unlikely". The CBO was entitled to rely on the assurances of Lystek with respect to the nature of the proposed use in coming to his determination unless there was some reason(s) to believe that his reliance would be unreasonable based on the information known or available to him. See Vandenheede Farms Ltd. v. Norfolk (County), 2011 ONSC 1525, 2011 CarswellOnt 1440 (SCJ).

There was no reason for the CBO to believe the information and assurances he received from Lystek was not accurate. Therefore, his reliance on these assurances was reasonable.

(b) The Town’s intention was to pass Version Two, which included a specific permitted use for a waste processing facility:

In my view, under both Version 1 and Version 2 of the Zoning By-law, it was the intention of the Township Council to permit waste processing that had a Certificate of Approval from the Ministry to occur on the Lystek lands.

I am not persuaded this was a relevant consideration. I agree with SPIRG that it was incumbent on the CBO to make an independent decision as to whether the Lystek Facility was a permitted use under the M1 Zone. See Peter Kiewet Sons C. v. Tillsonburg (Town), (2002) 28 M.P.L.R. (3d) 277 (ON SCJ) at para. 82. What the Town may have wanted or intended to provide by way of Version Two becomes irrelevant when, the zoning by-law the Town actually passed, was Version One. Version One is the applicable and governing law against which Lystek’s proposed use was to be considered.

[46] The CBO concluded that Lystek’s use was a Dry Industry, a permitted use on the Subject Property.

[47] During the CBO’s review, the CBO did not consider the impact of s. 22.2 (a) of 2009 Zoning By-law which states that “all development must be on municipal water and sewer services.” It was also not addressed by legal counsel or the planner that CBO had consulted. It was not addressed in the materials filed by the parties prior to July 19, 2012 or by any legal counsel prior to it becoming an issue late in the day on July 19, 2012.

[48] The CBO was fully aware, when he granted the Building Permit, that municipal water service would be immediately available to the Lystek Facility. However, the CBO also knew the municipal sewer services will not to be available to the Subject Property for up to two years.

[49] The CBO’s focus was whether the Lystek Facility was a Dry Industry. The CBO testified that:

It is reasonable to categorize Lystek's proposed use as Dry Industry because its manufacturing processes “could exist” without municipal services. The CBO was satisfied that Lystek complied with this Zoning By-law criterion because, after advising Lystek that municipal services were unlikely to be available to the property for up to two years, Lystek indicated that it did not require sewers as it was planning to direct all of the sewage discharge from the site into their lagoons for further processing. The CBO was reasonably satisfied with that position so long as Lystek obtained a Certificate of Approval from the Ministry of the Environment.

In coming to the conclusion that the Lystek Building falls within the Dry Industry use under the Zoning By-law, reliance was placed on advice from Lystek that the proposed waste processing facility is designed such that it does not require municipal water for its processing operation and the only requirement for water is a small amount of water for staff washrooms, the laboratory, kitchenette area and some water for the boiler, which does not have to come from a municipal source.

Moreover, Lystek has provided assurances to the CBO that the only wastewater discharge from the plant will be from the washrooms and lunch rooms and that the organic material processing does not itself result in any wastewater discharge. In order to ensure that it would comply with this assurance, the Township amended the site plan agreement with Lystek to limit the use of water and sewage to an amount that in the opinion of the CBO is consistent with the use of water for staff washrooms, the laboratory, kitchenette area and some water for the boiler.

[50] During the building permit review, the CBO, to ensure the Town would be able to keep track of the amount of water and sewage use by the Lystek facility, in addition to a water meter, required Lystek to install a sewage use meter through an amended site plan agreement.

[51] On February 2, 2012, Doug Kopp, the Chief Building Official of the Town issued the Building Permit authorizing Lystek to construct the Lystek Facility.

The Hearings

[52] On February 26, 2012, SPIRG commenced this application.

[53] The matter came before this court on July 19, 2012. At that time the only issues before the court were whether SPIRG had standing and whether the Lystek facility was a Dry Industry, a permitted use on the Subject Property.

[54] At this hearing, it was common ground that municipal water connections are and will be immediately available at the Subject Property and will be connected; however, municipal sewer connections are not expected to be available for up to two years but will be connected when the municipal sewer services are available.

[55] The potential significance of s. 22.2 (a) – “All development must be on municipal water and sewer services” was raised as an issue for the first time on July 19, 2012.

[56] The hearing was adjourned to September 4, 2012 to permit further evidence, cross-examinations and submissions on the issue of s. 22.2 (a) of the M1 Zone.

The Status of the Lystek Facility

[57] The Lystek Facility is currently under construction. Much of the work has been done. No doubt considerable expense has been incurred by Lystek.

The Issues

[58] There are three major issues to be decided:

A. Does SPIRG have standing?

B. Is the Lystek Facility a Dry Industry?

C. Must the Lystek Facility be on municipal services?

[59] Let me briefly deal with one alternative argument by Lystek. Lystek submitted the Lystek Facility was a “manufacturing plant”. This submission has no merit. The definition of manufacturing plant in the 2009 Zoning By-law is:

“Manufacturing Plant” means a building or structure in which a product is fabricated and from which such product is shipped to a wholesale or retail outlet.

[60] Lystek is in no reasonable sense “fabricating” anything. Further, Lystek is not shipping its “product” to a wholesale or retail outlet. The suggestion that Lystek’s holding lagoons on its property are a “wholesale or retail outlet” is simply not reasonable in the circumstances of this case.

The Standard of Review

[61] The onus rests on SPIRG to demonstrate that the CBO’s decision should be reversed. See 1218897 Ontario Ltd. v. Toronto (City) Chief Building Official, 2005 CanLII 39872 (ON SC), [2005] O.J. 4607 (SCJ) at para 4 and William F. White Ltd. v. Toronto (City) Chief Building Official (1999), 1999 CanLII 14809 (ON SC), 44 O. R. (3d) 750 (SCJ) at p. 760.

[62] The standard of review of a decision of a CBO issuing a building permit under the Act will depend on the nature of the decision. Where the decision involves a question of law, it should be reviewed on a standard of correctness. Where the decision involves a question of mixed fact and law that is within the CBO’s area of expertise, it should be reviewed on a standard of reasonableness. See Vandenheede Farms Ltd. v. Norfolk (County), 2011 ONSC 1525, 2011 CarswellOnt 1440 (SCJ) at para 7, 13; Runnymede Development Corp. v. 1201262 Ontario Inc., (2000) 2000 CanLII 22337 (ON SC), 47 O.R. (3d) 374 (SCJ); and Rotstein v. Oro-Medonte (Township), (2002), 34 M.P.L.R. (3d) 266 (ONSCJ) at para. 17

[63] Judicial deference should be accorded to the decision made by the CBO in appropriate circumstances. The appropriate degree of deference will vary depending upon the remoteness or closeness of the issue in question to one of law within the Court's area of expertise, or one of fact within the CBO's more specialized ambit of knowledge, training and expertise. The more the CBO's decision depended upon factual determinations within the special expertise of the CBO, the more deferential will be the standard of appellate review.

[64] Justice Hackland in Berjawi v Ottawa (City) (2011), 2011 ONSC 236, 79 MPLR (4th) 280 (SCJ) at para. 12, described the standard of review as follows:

Considering these principles, it must be recognized that municipal planning and zoning are specialized areas which fall within the expertise of the CBO. Most of the determinations made by CBOs in the context of by-law interpretation are mixed questions of fact and law. This requires a significant degree of deference for all but purely legal questions. For most issues, the standard of review will be reasonableness.

[T]o be upheld on a reasonableness standard, the decision must fall within a range of possible, acceptable outcomes which are defensible in respect of the facts and both the law.

[65] The standard of review is not fixed at either correctness or reasonableness but rather is a spectrum between these two standards depending on the various factors. This was described by Justice Molloy in Runnymede supra at para 5:

The Supreme Court of Canada has ruled that the appropriate standard of review under a statutory right of appeal is “a function of many factors” and that, depending on those factors, “the standard may fall somewhere between correctness, at the more exacting end of the spectrum, and patently unreasonable, at the more deferential end”: Canada (Director of Investigation and Research Competition Act) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748 at p. 765, 144 D.L.R (4th) 1. The factors specifically identified by the court (at pp. 766-75) were the terms of the statute granting the rights of appeal; the nature of the problem before the tribunal; the applicable law administered by the tribunal, properly interpreted in light of its purpose; and the expertise of the tribunal.

[66] I reject SPIRG’s submission that the CBO did not exercise independent judgment. From the evidence available at this hearing, the CBO, aware of the issues which had arisen regarding the zoning by-laws and the opposition by SPIRG, was extremely thorough and independent in his review and consideration of Lystek’s building permit application.

[67] There are two decisions made by the CBO in connection with the issuance of the Building Permit which this court must consider.

CBO’s decision as to whether the Lystek Facility is a Dry Industry

[68] All parties agree that the question of whether the Lystek Facility is a Dry Industry is a question of mixed fact and law, and attracts a standard of reasonableness.

[69] SPIRG suggests that the determination of whether a “waste processing facility” is a permitted use in the M1 Zone is a question of law which attracts a standard of review of correctness. I disagree. SPIRG asks the wrong question. The CBO did not have to determine generally whether a waste processing facility is a permitted use in the M1 Zone. The M1 Zone does not exclude waste processing facilities. The M1 Zone does not expressly permit waste processing facilities. The M1 Zone permits Dry Industry use on the Subject Property. The Town chose to describe the permitted uses in the manner it saw fit. In the case of a Dry Industry, the Town chose only to define that permitted use on the basis of the use or potential non-use of municipal services. That parameter in the definition of Dry Industry is what must guide the CBO in his determination whether the Lystek Facility is a Dry Industry and not the generic question asked by SPIRG. As a result, the CBO had to determine whether the Lystek Facility’s use or non-use of municipal services met the definition of Dry Industry, regardless of whether Lystek Facility is a waste processing facility or not.

[70] On this latter question, the CBO’s decision on this issue was predominantly a factual one. The predominant issue the CBO had to consider was whether the Lystek Facility “could exist” without municipal services. There were no competing interpretations of this phrase in the definition of Dry Industry.

[71] The CBO embarked on a fact finding determination as to whether the Lystek Facility, based on all the information he had (which was substantial and included Lystek’s Design and Operation materials) “could exist” without municipal services.

[72] I am also mindful of the criticism raised by SPIRG that the CBO considered the Town’s intention of adding “waste process facility” as a permitted use in Version Two. SPIRG submits that this court should afford no or little deference to the CBO’s decision in this matter. I am not persuaded that because one factor may have been extraneous is necessarily fatal to the CBO’s decision or that little or no deference should be given to the CBO’s decision. It is simply a factor in this court’s consideration as to whether the CBO’s decision was reasonable in light of all relevant factors.

[73] I do point out that SPIRG, while attacking the CBO’s use of the Town’s Version Two to determine the Town’s intent for the M1 Zone, SPIRG uses the same Version Two to suggest that, if the Town intended to include a “waste processing facility” in Version Two, it must mean that a “waste processing facility” was not permitted in Version One. SPIRG's position on the use of Version Two is not entirely consistent.

[74] I conclude the standard of review on this issue, whether the Lystek Facility is a Dry Industry, is one of reasonableness. The decision must fall within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law. See Walsh v Spolnik, (2008) 48 M.P.L.R. (4th) 239 (ON SCJ) at para. 25.

CBO's decision on the applicability of s. 22 .2 (a) of the 2009 Zoning By-law

[75] When dealing with the legal interpretation of paragraph 22.2(a) of the 2009 Zoning By-law, it is clear from the submissions of all counsel, that the proper interpretation and application of this provision is predominantly a legal exercise. It is a legal question as to whether this provision is mandatory and directory to all developments in the M1 Zone.

[76] As a result, the standard of review on this issue is much closer to one of correctness.

The approach to issuance of building permits

[77] Under subsection 8(2)(a) of the Act, the CBO must issue a building permit unless the proposed building or construction will contravene the Act, the Building Code, O. Reg. 350/06 (the “Building Code”) or any other applicable law.

[78] By-laws made under section 34 or 38 of the Planning Act, are applicable law for the purposes of s. 8(2)(a) of the Act. The 2009 Zoning By-law is a by-law made under section 34 of the Planning Act and is, therefore, applicable law for the purpose of the issuance of a building permit.

[79] I accept SPIRG’s submission that the Official Plan or Provincial Policy Statements (“PPS”) may be considered by this court when interpreting a zoning-by-law where ambiguity exists or where those documents contain information which might otherwise assist in the understanding or proper interpretation of the language of the zoning by-law. See. Oxbow Lake Cottagers Assn. v. Lake of Bays (Township), (2006), 26 M.P.L.R. (4th) 137 (ON SCJ) at para. 43.

[80] However, in this case, I am not persuaded that resorting to these additional documents is necessary or desirable for the proper interpretation of the 2009 Zoning By-law. Neither of these documents defines Dry Industry. Neither of these documents deals with a situation where the permitted use in a zoning by-law is based on the need or lack of need of municipal services. Even if there had been ambiguity in the definition of Dry Industry there is nothing in the Official Plan or the PPS which assists in clarifying or interpreting the definition of Dry Industry. However, there is no ambiguity in the Town’s definition of what constitutes a Dry Industry. The Town chose to proceed with its zoning by-laws in the manner it did and was prepared to permit a use on M1 Zone lands which met the definition of Dry Industry, whether or not the use was a waste processing facility or some other type of facility.

Judicial Interpretation

[81] The modern principle of statutory interpretation, articulated by Elmer Driedger and endorsed by the Supreme Court of Canada as the preferred approach, is:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

See Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. At page 1 and Re Rizzo & Rizzo Shoes Ltd, 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27 at para. 21.

[82] This modern approach, consistent with the fundamental principles of statutory interpretation requires this court to look at the wording of the by-law in its entire context, including the words used, the purpose and scheme of the Town’s Zoning By-laws as a whole, any competing interpretations as well as any other relevant factor which bears on the proper interpretation of the 2009 Zoning By-law. See Bayshore Shopping Centres Ltd. v. Nepean (Township), 1972 CanLII 8 (SCC), [1972] S.C.R. 755 at para. 9.

1. Does SPIRG have standing?

[83] Standing in this case is determined pursuant to the wording of the Act. Section 25(1) of the Act provides as follows:

Any person who considers themselves aggrieved by an order or decision made by an inspector or chief building official under this Act or the regulations, except a decision not to issue a conditional permit under subsection 8(3), may, within twenty days after the order or decision is made, appeal the order or decision to a judge of the Superior Court of Justice. (emphasis added)

[84] While the test is framed in a subjective manner, courts have read in an objective element:

Though the section appears on its face to express a purely subjective tests, the court requires some threshold to be applied in order to maintain the integrity of the process, focus scarce judicial resources, and ensure that the appeal procedure is not open to misuse by those who simply have some personal axe to grind and “feel” aggrieved without any nexus of interest or effect to the decision. (emphasis added)

Rotstein v. Oro-Medonte (Township), supra, at para. 18

[85] The Divisional Court has confirmed that standing requires the establishment of some interest in the impugned decision:

While the word “aggrieved” is not to be understood in some traditional sense relating to a person’s legal interest, nevertheless, the legislature clearly intended that some threshold test be applied and it would be inappropriate to leave the whole matter either to the subjective whim of the appellant or solely to the discretion of the court. (emphasis added)

Friends of Toronto Parkland v. Toronto (City) (1991), 6.O.R. (3d) 196; 1991 CanLII 7145 (ON SC), [1991] OJ No 2205 (Div. Ct.) at pp. 7, 10, 12

[86] Lystek submits that the Application Record, contains the affidavit of Raymond Duhamel, a planner and does not set out who or what SPIRG is, what interests it has or its members have in the CBO’s decision to appeal or that SPIRG is aggrieved by the CBO’s decision.

[87] Lystek accepts that the threshold for standing is low but must nevertheless be met by SPIRG and submits SPIRG has failed to meet this threshold.

[88] While I accept Lystek’s submission as it relates to the lack of information regarding SPIRG in the Application Record, this court’s decision must be made on the entire evidentiary record, not just SPIRG’s Application Record.

[89] When reviewed, the evidentiary record includes Lystek’s own evidence that:

• “This application is brought by the Southgate Public Interest Research Group (“SPIRG”), a group of residents of the Township of Southgate who are opposed to the construction and operation of a processing facility.....”

• A number of SPIRG members were identified by the Lystek foreman who “lives in the area and knows many of these people”.

• SPIRG has been involved in lobbying the Town’s Council with respect to this matter for “months”;

• SPIRG members had attended Lystek’s public meetings with respect to this project and were “blogging” statements that Lystek’s Mr. Mosher made at the public meeting; and

• The Ministry of Environment were aware of SPIRG’s objections, the consideration of which, by the Ministry, might delay Lystek’s approvals.

[90] Another factor to be considered is that until Lystek’s factum was served, did Lystek raise any issue with respect to SPIRG’s standing. This gave SPIRG little or no opportunity to file materials to deal with this issue explicitly.

[91] The evidentiary record also includes references in the CBO’s affidavit that it considered, in a serious manner, the objections raised by SPIRG. Clearly, the CBO did not feel compelled to simply dismiss SPIRG’s objections as an organization which had no interest in the Lystek Facility or the CBO’s decision as to whether to grant a building permit. In fact, the CBO’s counsel responded, in writing, to some of SPIRG’s objections.

[92] I also note that in Action No. 12-190, a companion action to this one, heard the same morning before me on July 19, 2012, Ms. Anna-Marie Fosbrooke, one of SPIRG's members, describes SPIRG as “an incorporated resident’s ground and a defendant in this action, as well as a resident and ratepayer of the Township of Southgate...”

[93] I accept the statement by Justice Hackland in Berjawi et al v. The City of Ottawa et al. supra, at para. 8:

Although s. 25 of the Building Code Act sets out a broad test for standing, I accept that an appellant’s belief that he or she is “aggrieved” must be reasonable and not fanciful and should demonstrate some nexus or connection between the decision complained of and some legitimate interest of the appellant. That test is fully satisfied in this case. Neighbouring land owners have a clear interest in land use in their immediate neighbourhood and in seeing that proposed construction does not contravene municipal by-laws. The evidence filed in the City’s motion record fully sets out the nature of the neighbours’ concerns with this project. The City itself recognized the neighbours’ legitimate interest in these issues by participating in an extended dialogue, by correspondence and public meetings. In the court’s opinion, the applicants are reasonably and appropriately interested in the issues raised and clearly have standing to bring this appeal.

[94] The only reasonable conclusion is that SPIRG is a corporation whose membership consists of neighbours and residents of the Town who oppose the Lystek Facility. Their legitimate interest in the issuance of the Building Permit appears to have been acknowledged by the parties and third parties such as the Ministry of Environment. The record provides evidence that SPIRG has a demonstrated and real nexus between the CBO’s decision and SPIRG’s legitimate interests.

Conclusion

[95] I am satisfied that SPIRG has standing to bring this appeal.

2. Is the Lystek facility a Permitted USe?

(a) Inconsistent with planning policy and practice in Ontario

[96] SPIRG’s first submission is that:

On a plain reading of the definition of “Industry, Dry” in the context of the 2009 Zoning By-Law as a whole, including the circumstances in which it was passed, and with proper consideration of planning policy and practice in Ontario, a waste processing facility, such as the Lystek Facility, is not a Dry Industry use.

[97] I do not accept this submission. SPIRG relies on the heading of “General Industry” in the M1 Zone and concludes that, when the Official Plan, the PPS and the Public Utility Zone is considered, a waste processing facility is not a Dry Industry.

[98] There are a number of difficulties with this submission:

i. The CBO does not go behind the planning decisions made by the Town when the Town has enacted zoning by-laws. In this case , the CBO must accept and apply the 2009 Zoning By-law. The SPIRG submission would in essence require the CBO to go behind the Town’s 2009 Zoning By-law to determine whether to issue a building permit. To use Justice Lane’s language in Albert Bloom Ltd. v. Bentinck (Township) Chief Building Official (1996) 1996 CanLII 8020 (ON SC), 29 O.R. (3d) 681 (SCJ) at para. 23 – “It is the language that controls the determination of what is allowed, not the opinion of planners as to what might be sensible.” (emphasis added);

ii. The Town’s Official Plan is a broad policy for the Town’s development. However, when zoning by-laws are passed by the Town, the enacted zoning by-laws are deemed to be in compliance with the Town’s Official Plan. See s. 24(4) of the Planning Act;

iii. There is nothing in the PPS that is binding on the Town. Even if the Town chooses to ignore the PPS and the 2009 Zoning By-law is inconsistent with the PPS, the PPS is not applicable law under the Act; and

iv. Finally and most importantly, SPIRG’s submission ignores the clear and unambiguous language of what is a permitted use in the M1 Zone and what constitutes a Dry Industry. If the Town had not defined what it meant by Dry Industry, I accept that it might be necessary to consider what a Dry Industry is commonly understood in planning and whether it has a recognized meaning or interpretation amongst municipal planners. This was the situation in Albert Bloom, ante. However, in this case, the Town chose to define Dry Industry and that definition must govern whether the proposed development is a Dry Industry. What a planner might believe a Dry Industry includes or should include is not relevant if it is inconsistent with the manner the Town chose to define Dry Industry.

[99] Let me deal with some of the specific submissions raised by SPIRG.

[100] SPIRG submits that the definition of Dry Industry should be interpreted to require the use to be an “industrial” use (i.e. for the manufacturing, assembly, storage or processing of goods or materials) since the M1 zone is one of the “Industrial Zones.” Even if I had accepted SPIRG’s attempt to qualify the definition of Dry Industry with the definition of “Industrial, General,” I would have concluded the Lystek Facility is an industrial use as it “processes goods or materials,” namely, biosolids, septage and organic feed stocks into a fertilizer product. I would not have accepted Mr. Duhamel’s opinion regarding whether it makes planning sense to exclude a waste processing facility as an industrial use. The Town could have specifically excluded this as an industrial use it had chosen to do so. In fact, the evidence supports the conclusion the Town believed that a waste processing plan was an industrial use because a waste processing facility was to have been included in Version Two.

[101] I also reject SPIRG’s submission that, because the Town had included a “waste processing facility” as a permitted use under theM1 Zone in Version Two, it must have intended to add a new and distinct use not captured in the list of permitted uses in Version One. There is no evidence to support this submission. Perhaps, this argument might have had more force if the Town’s Version Two had not removed Dry Industry and inserted “waste processing facility” leading to a consideration as to whether there was a distinction between the two uses. However, by removing Dry Industry and inserting waste processing facility, it leads to the question whether the Lystek Facility would or could fit under both permitted uses - Dry Industry in Version One and/or waste processing facility in Version Two. The conclusion that SPIRG urges is mere speculation.

[102] SPIRG further submits that because a waste process facility is a permitted use in the Town’s Public Utility Zone, it cannot be Dry Industry. I disagree. In the Town’s Public Utility Zone, the Town chose to characterize the permitted use based on occupation and utilization of the lands by or on behalf of governments or utility agencies. Clearly, a waste processing facility operated by Lystek would not qualify as a permitted use under the Public Utility Zone. As a result, SPIRG’s submission that it is a permitted use under the Town’s Public Utility Zone implicitly excludes a waste processing facility under the M1 Zone, is rejected.

(b) Fails to meet the criteria for a permitted use in M1 Zone

[103] SPIRG’s second submission is that the Lystek Facility is not a permitted use in the (General Industry) M1 Zone.

[104] The proper approach for the CBO in this case was as follows:

a) First, what is the real "use" to be carried out at the proposed development? The “use” described by Lystek in its application is not necessarily determinative. What is material is a thorough review and understanding of Lystek's proposed development. See 883929 Ontario Ltd., Re (2011), 69 O.M.B.R. 229;

b) Secondly, what is the zoning of the Subject Property? The zoning of the Subject Property is (General Industrial) M1 Zoning;

c) Thirdly, what permitted use does the (General Industrial) M1 Zoning allow on the Subject Property? M1 Zoning permits Dry Industry - a defined term with certain prescribed characteristics relating to the use and need for municipal services and sewage discharge; and

d) Fourthly, applying those prescribed characteristics of what is a permitted use on the Subject Property and considering those same prescribed characteristics in the proposed development, does the proposed development meet those prescribed characteristics? In this case, the relevant prescribed characteristics are whether the Lystek Facility could exist without municipal services and complies with the limitations on sewage discharge.

Is the Lystek Facility a “General Industrial” use?

[105] The 2009 Zoning By-law defines General Industrial as follows:

"Industrial, General" means the use of land, building(s) or structure(s) for the manufacturing, assembly, storage or processing of goods or materials, not otherwise defined in this By-law.

[106] It is clear from the description of what Lystek proposes to do at the Lystek Facility (which is not in dispute) is to process various materials (biosolids, septage and organic feedstocks) into a liquid fertilizer product. Clearly, the Lystek Facility is a “General Industrial” use based on the definition in the 2009 Zoning By-law.

Is the Lystek Facility a Dry Industry?

[107] A proper starting point is the definition of Dry Industry in section 3.109 of the 2009 Zoning By-law which provides:

Industry, Dry” is a use which could exist without the necessity of a municipal water and municipal sewage system to accommodate it and is one where only waste water discharges are from employee washrooms and/or waste water used for cooling or pressure testing of equipment, washing of accessory vehicles and similar ancillary uses.

(emphasis added)

[108] The Town chose to define Dry Industry not based on the type of operations to be carried on by the owner but rather,

• whether the proposed development could exist without municipal services, and

• where only waste water discharges are from washrooms, certain specified and ancillary uses.

[109] I will come back to the Town’s conjunctive use of the two criteria. There were no submissions made by SPIRG with respect to the second portion of the definition of Dry Industry.

[110] The question should not be posed as SPIRG proposes - whether “Industry, Dry” includes a waste processing facility. Different waste processing facilities may have very different requirements for municipal services. Some might be able to exist without municipal services. Some might not. Some might require process sewage discharge from its normal operations. Some might not.

[111] SPIRG’s planner takes too simplistic an approach – he considers that the inclusion of a waste processing facility in Dry Industry does not constitute good planning. I am not persuaded this is a relevant consideration. This court does not and should not embark upon an examination as to whether the 2009 Zoning By-law does or does not constitute good planning. It is the application of the Town’s 2009 Zoning By-law to the proposed development that is to be considered.

[112] The Town had many options to it as to how it might define Dry Industry. If the Town had wanted to define Dry Industry based on other criteria such as what might be understood in customary planning parlance, it could have done so but it chose not to. If the Town had wanted to define Dry Industry based on the type of operations that were to be carried out in the proposed development, it could have done so but it chose not to. If the Township had wanted to limit the type of uses that could fit within the definition of “Industry, Dry,” it could have done so expressly, as it did for “Industrial, Extractive” and “Industry, Light”. It chose not to do so.

[113] The definition of Dry Industry involves a deliberate choice of words by the Town to make the sole criteria potential usage of municipal services.

[114] The proper question is whether the proposed Lystek facility is one which falls within the definition of Dry Industry set by the Town.

i) Could the Lystek Facility exist without municipal services?

[115] Lystek advised the Township it is able to operate the Lystek Facility within the constraints imposed by the definition "Industry, Dry" under the 2009 Zoning By-law. The CBO relied on this advice, as part of his review, in coming to his determination to issue the Building Permit.

[116] The CBO considered the “Design and Operations” of the Lystek Facility to determine its need and usage of municipal water and sewage. The CBO was satisfied upon his review that:

i. for municipal water services, the Lystek Facility was designed such that it would not require municipal water for its processing operation and the only possible requirement for water is a small amount of water for staff washrooms, the laboratory, kitchenette area and some water for the boiler, which water does not have to come from a municipal source; and

ii. for municipal sewage services, the Lystek Facility did not require sewers as it was planning to direct all of its sewage discharge into their lagoons and further, Lystek was content that municipal sewer services would not be available for up to two years. After connection with municipal sewers, discharge by Lystek would be limited to the washrooms, laboratory and kitchenette as well as the unlikely need for unexpected discharge of limited amounts.

[117] SPIRG’s submissions refer to potential water and sewage usage already identified above and by the CBO. SPIRG speculates as to whether the Lystek Facility will have greater need for municipal water or sewage connection. However, as will be seen below, this is simply potential municipal service use which is “unlikely” or “unexpected” use in the future.

[118] Let me review Lystek’s municipal water and municipal sewage requirements:

a) Lystek might use municipal water for its staff washrooms, laboratory and kitchenette area and may require municipal water for its process requirements; and

b) Lystek may, potentially, if there is a municipal sewage connection, discharge wastewater from its washrooms and may discharge excess process water into municipal sewers.

Municipal Sewer Services

[119] As for municipal sewer services, it is clear that the Lystek facility can operate without municipal services. The proof is the fact Lystek agreed to build and operate the Lystek Facility despite the fact municipal services would not be available for several years.

[120] Lystek’s representative testified during the cross examinations as follows:

… from a sanitary sewer servicing standpoint we've agreed that we are able and willing to operate for a period of time until the municipality has put in all the sanitary services to this area. So we were prepared to proceed irrespective of that being completely serviced in that respect. That was something that we had given some relief on. Obviously that entails the fact that the process, water discharge, is not an important or big element and we have multiple redundancies on how to handle the process.

[121] Equally important, Lystek’s Design and Operations Report provide that the operations would be “net water deficient,” that is, not require municipal water service and will not discharge wastewater into the municipal sewer system. Lystek’s organic material processing does not normally result in any wastewater discharge because of the nature of the process: the organic biosolids which are the primary feedstock for the plant are comprised primarily of water (75% water and 25% solids in a semi-solid state). It is only in unexpected or unlikely events that any process water might be discharged into the municipal sewers when they are connected. The Design and Operations Report provided:

In the unlikely event that excess process water is generated by the Centre, this will also be discharged to the sanitary sewer, pending confirmation that the quality of this liquid is within the sewer-use by-law specifications for the Township.

[122] As for the wastewater discharge from its washrooms, laboratory or kitchenette, Lystek confirmed that it can and would use this wastewater into its lagoons for processing.

[123] It is also important to note that the size restriction on the sewer discharge pipe will restrict Lystek’s discharges, providing further confirmation it is only in “unexpected” and “unlikely” events that process water will be discharged into the municipal sewers.

[124] As a result, the CBO’s determination that Lystek “could exist” without municipal sewer services was reasonable.

Municipal Water Services

[125] The Lystek system is a virtually dry process. It does not require any municipal water as part of the processing system. The only requirement for potable water is a small amount of water for staff washrooms, the laboratory, and kitchenette, which do not have to come from municipal sources.

[126] Whatever minimal use of water is required for the purposes of processing can be satisfied from non-purchased (i.e. non-municipal) sources such as ground water and surface water. The Lystek Facility is designed to capture and use these sources of water.

[127] Certain of the systems (for example the fire protection systems) are designed to have the ability to use municipal water but even then, the ability to access municipal water is a secondary or tertiary backup because of the ability to access water from existing sources such as the storm water ponds and stand pipes in the existing Lystek Facility design.

[128] Similarly in unusual circumstances, such as prolonged drought, the system could call upon municipal water sources, if needed, for example, to access make up water for the boiler. However this would be an unlikely or unexpected call upon municipal water.

[129] I am satisfied that the CBO’s determination the Lystek facility could exist without municipal water supply was a reasonable decision.

[130] However, the CBO simply didn’t end his enquiries by accepting Lystek’s assurances regarding municipal water and sewer use. The Town amended the site plan agreement with Lystek, to limit the use of water and sewage to a defined limited amount that, in the opinion of the CBO, was consistent with the assurances received. The Town allocated three equivalent residential units of sewage capacity and four equivalent residential units of municipal water capacity for the Lystek Facility. To further ensure that the Town could be able to keep track of the amount of water and sewage use of the Lystek facility, the Town took the additional step of requiring installation of a sewage use meter after the permit was issued (a water meter measuring municipal water use would be installed in the normal course).

[131] This provided further confirmation to the CBO that Lystek’s Facility complied with the Dry Industry definition in the M1 Zoning.

[132] I must add that the fact municipal service connections will be made (some now and some later) does not make a difference to the above analysis because the language used in the definition of Dry Industry is “could exist,” not “will exist.”

[133] "Could" means "used to indicate possibility." See Oxford Dictionary definition. The question is therefore, whether there is possibility the Lystek Facility could exist without municipal services. The answer is yes.

[134] As a result, I conclude that the Lystek Facility meets the first requirement of the definition of Dry Industry.

ii) Is the Waste Water discharge limited to washrooms, certain defined and ancillary uses?

[135] As stated above, SPIRG did not make any submissions on whether the Lystek Facility met this part of the definition of Dry Industry. The sole submission by SPIRG was that: “in the event that excess process water is generated by the Lystek Facility, it will be discharged to the sanitary sewer.”

[136] The Lystek Facility operations provide that:

• any discharge to the municipal sewer is not a part of Lystek’s normal operations. In fact, Lystek would prefer to recapture the waste discharge into its lagoons for its process use;

• Lystek’s sewage discharge is still subject to meeting the municipality’s sewage requirements;

• The size of the municipal sewer connection would restrict any major sewage discharge;

• The total municipal sewage discharge is limited to three equivalent residential units of sewage capacity. Given the existence of washrooms, a kitchenette and the laboratory, there is very little residual sewage capacity for Lystek; and

• There will be a sewage meter to ensure that the sewage is severely limited.

[137] It is clear that the municipal water discharge for washrooms is permitted under the definition of Dry Industry.

[138] I have no doubt that waste water discharge from a kitchenette and laboratory would fall within the “ancillary uses” in the definition of Dry Industry. No submissions to the contrary were made.

[139] As set out above, the Lystek Facility can operate without a municipal sewer connection and proposes to do so for several years. Does the fact that there is a possibility, in “unlikely” or “unexpected” circumstances that Lystek might discharge its process waters into the municipal sewers mean it is not a Dry Industry?

[140] I am not persuaded that having a sewage connection for an unlikely or unexpected circumstances would mean the use is not one which "could exist" without municipal services. To interpret the zoning by-laws to exclude a permitted use where there is the potential for an “unlikely and unexpected” use as a "secondary or tertiary back up" would be unnecessarily restrictive.

[141] It is much more compelling that Lystek, in normal operations, will and can meet the criteria that it will not discharge into municipal sewers. The evidence is that the Lystek Facility can exist for several years without a municipal sewage connection.

[142] Does that fact that in the future it will have a municipal sewer connection as a contingency mean it is no longer a Dry Industry at that time? I am not persuaded that in these circumstances, having a contingency plan for a municipal sewer connection would not meet the second portion of the definition of Dry Industry. I am satisfied it does.

Conclusion

Was the CBO’s decision to issue a building permit in these circumstances reasonable?

[143] The CBO’s determination that the Lystek facility was a permitted use as a Dry Industry was a reasonable determination.

[144] Not only was the CBO’s application of the 2009 Zoning By-law reasonable - it was in my view, correct and in keeping with the purpose and intent of the Zoning By-law.

3. Must the Lystek Facility be on municipal services?

[145] To repeat, s. 22.2(a) in M1 Zoning requires the following for all permitted uses:

All development must be on municipal water and sewer services.

[146] Zoning by-laws affect the rights of landowners by restricting what they may do with their lands. The purpose is to set standards for the entire community and to ensure the entire community develops in accordance with these standards. To achieve this, landowners must be able to read and understand zoning by-laws and what they must or must not do to develop their lands. Where a conscious decision is made to include this language in some of the zoning by-laws and not others, it is fair to assume that the Town addressed its mind to the issue as to when developments “must” be connected to the municipal services and when the Town will not insist on municipal services being connected.

[147] Section 34(5) of the Planning Act expressly gives the Town authority to prohibit the use of land unless municipal services are connected. This jurisdiction was given to the municipalities to avoid the decision in Re O’Donnell and City of Belleville (1968)1 O.R. 361 (HCJ) where it was determined the municipality could not impose a restriction to be connected to municipal services on a landowners.

[148] The Town and Lystek filed additional materials to deal specifically with this issue. Mr. Kopp stated;

...I understood it to mean that were permitted use in the M1 Zone requires servicing (water and sewer), it must be on municipal water and sewer services, as opposed to any other form of servicing such as private on-site services (e.g. wells and septic systems) or communal services.

[149] The basis for Mr. Kopp’s understanding is important in this case. He stated he had a discussion with the Town’s external planning consultants, Mr. Slade, in 2000 shortly after amalgamation. Mr. Slade’s understanding was that the provision meant “where a permitted use... requires servicing...it must be on municipal water and sewer services as opposed to any other form of servicing...” Mr. Slade provided no affidavit or is there any evidence as to why Mr. Slade had this interpretation of s. 22.2(a). Mr. Kopp accepted Mr. Slade's explanation and it became his understanding.

[150] Mr. Kopp goes on to state that his understanding also arises from the fact other zone categories are either silent or are permissive. I am not persuaded that this assists Mr. Kopp. Mr. Kopp's reference to other zone categories does not explain why the mandatory language is used in M1 Zone and why permissive language is used in other zones.

[151] I conclude Mr. Kopp’s understanding does not assist in the task of properly interpreting s. 22.2(a).

[152] No explanation was proffered by Mr. Kopp as to why the language in 22.2(a) was not clarified to be consistent with his understanding since 2000. There have been a number of opportunities in the past 12 years for the Town to clarify the language in the M1 Zone.

[153] With respect to the applicability to the Lystek Facility, the Town’s position is that the condition only applies IF municipal services are required for the Lystek Facility but since the Lystek Facility could exist without municipal services, the condition does not apply. The Town would have this court read into s. 22.2 (a) the following words as a pre-amble – “If municipal services are necessary for the development.....”

[154] Mr. Kopp stated that the Town has never applied or enforced s. 22.2 (a) to impose a positive obligation on each and every permitted use in the M1 Zone to be physically connected to municipal services if the services were not required. Mr. Kopp attached two building permits issued for self storage units as evidence where no municipal water or sewer services were required for these developments and none were required by the Town. Mr. Kopp suggests that if municipal services were required to be made, these developments might not have proceeded due to the cost. That may be the case but it ignores the ability of the Town to issue a site specific zoning amendment or a minor variance. Of course, the other option for the Town would have been to clarify the language used in s. 22.2(a) of the M1 Zone to ensure consistency with what Mr. Kopp understands and acts on.

[155] This interpretation would essentially ignore the words “All” and “must” used in s. 22.2(a) of this part of M1 Zone.

[156] I do not accept the Town’s interpretation of the above provision. The CBO's interpretation is not correct. The Town’s interpretation strains the clear and unambiguous language of the M1 Zone. The interpretation is also inconsistent with the provisions of the 2009 Zoning By-law which provides in s. 2.7(b):

In this By-law the word "shall" is mandatory and directory; words used in the present tense include the future; words in the singular number include the plural and words in the plural include the singular number. Words imparting the masculine gender shall include the feminine and the converse.

[157] I have a difficult time understanding and accepting that where the 2009 Zoning By-law uses “shall,” or where a similar word such as “must” is used, it is not “mandatory or directory.” I find Mr. Kopp's understanding to be a very strained interpretation.

[158] In my view, the Town carefully determined where it would and would not require a development to be on municipal services. There is a reasonable and fiscal rationale for the Town to require developments to be connected to its municipal services. The Town has paid for the services to be installed and, by requiring the developments to be connected to its services, the costs of the services are recouped by the Town. SPIRG correctly points out that the Town would not want all the development in this particular ECO park, which the Town has already brought municipal water and will bring municipal sewers at great expense to the residents of the Town, to not be connected.

[159] I am also supported in my interpretation by the Town's conduct. The Town executed the Agreement of Purchase and Sale which provided that no building would be constructed until municipal services were available to the Subject Property. This requirement was mandatory. This provision in the Agreement of Purchase and Sale is consistent with the court's interpretation of s. 22.2(a).

[160] The Town submits that requiring each new development to be connected would result in absurd results. I disagree. The Town ignores the fact that IF a particular development does not want or need municipal services to be connected or it is financially prohibitive, there is always available the possibility of a minor variance or a site specific re-zoning amendment to avoid the requirement of a connection to municipal services.

[161] Let me deal with the several examples the Town alleged result in commercial absurdity if the provision was read in a mandatory manner:

a) The Town’s submission that no new lot could be created in M1 without sewer connection is simply wrong. Section 22.1 states that no person shall within the M1 Zone “use any land, build or erect, alter or use any building or structure, except in accordance with the following provisions:” It is the use or use any building or structure that must comply with the provisions of s. 22 of the M1 Zone. Therefore, if there is to be one of the permitted uses carried out on the land or the building on the land, it would have to be connected to the municipal services;

b) The Town also suggests that there might be developments which might not need water or sewer such as a Contractor’s Yard or a self storage facility. It may be true that such developments may not want or need any washrooms or other facilities using water or sewers. However, there are ways to deal with that through minor variances or site specific zoning where necessary;

c) The Town also suggests that a garage, shed, boathouse or dock would, in other zones, require municipal water and sewer hook-ups. I do not read the Town’s 2009 Zoning By-law as requiring this. It requires the development, being the permitted use of the land or the building on the land, to have the municipal connections. The provision does not require multiple municipal service connections or even additional service connections to the ancillary use buildings. Any suggestion that a dock, garage, shed, boathouse would require a further and separate municipal service connection would no doubt be met with ridicule; and

d) The Town suggests that there would be an inconsistency between the requirement that Dry Industry is one which “could exist” without municipal services and the requirement that the Dry Industry development must be on municipal services. This is mere speculation by Mr. Kopp. It is clear from the definition of Dry Industry that washrooms and ancillary uses are contemplated in the permitted uses in the M1 Zone. It would be hard to imagine an industrial building without at least some washrooms for the employees which means that water and sewer connections, municipal or otherwise, might be needed. I simply do not see an inconsistency.

Conclusion

[162] Section 22 (2) (a) uses clear and unambiguous language – the development must be connected to municipal services.

[163] The only logical conclusion is that the Town intended and has made “mandatory and directory” for all the permitted uses in the M1 Zone that the development be connected to municipal services.

Conclusion

[164] I am satisfied that the CBO should not have issued the Building Permit without it being a requirement that no occupation or use of the Lystek Facility would be permitted until such time as the municipal service connections had been made and were operational.

Remedy

[165] The Town passed a resolution on August 1, 2012 to accelerate the timing of the remaining work required to complete the municipal sewer services to the Subject Property, thereby permitting Lystek to connect to the municipal sewer services at some time in the future.

[166] The Town submits that, should this court conclude municipal services must be connected to the Lystek Facility, this court should require as a condition of the building permit issuance that full municipal water and sewers be connected and operational prior to any occupancy or use of the Lystek Facility. The CBO has confirmed he would comply with such a requirement. Lystek has undertaken to comply with such a requirement.

[167] SPIRG rejects any continued construction of the Lystek Facility or an order which prohibits occupancy until such time as the municipal services are connected. SPIRG would, of course, require the Lystek Facility to be taken down and the lands restored.

[168] However, SPIRG’s position, if accepted, would do nothing except cause Lystek to expend considerable monies now to demolish and restore the lands AND when the municipal services are available to be connected, reconstruct the Lystek Facility. No doubt, SPIRG hopes that this would be financially unappealing and would bring the project to an end.

[169] Requiring Lystek to demolish and restore the Subject Property makes little sense. It is also not required by the 2009 Zoning By-law in the circumstances of this case.

[170] SPIRG submits that, to do what the Town now requests as its alternative submission, is tantamount to the issuance of a “conditional permit” under the Act. It is possible for the CBO to issue a conditional permit provided that the conditions in s. 8 of the Act are met. The relevant sub sections provide:

(3) Even though all requirements have not been met to obtain a permit under subsection (2), the chief building official may issue a conditional permit for any stage of construction if,

(a) compliance with by-laws passed under sections 34 and 38 of the Planning Act and with such other applicable law as may be set out in the building code has been achieved in respect of the proposed building or construction;

(b) the chief building official is of the opinion that unreasonable delays in the construction would occur if a conditional permit is not granted; and

(c) the applicant and such other person as the chief building official determines agree in writing with the municipality, upper-tier municipality, board of health, planning board, conservation authority or the Crown in right of Ontario to,

(i) assume all risk in commencing the construction,

(ii) obtain all necessary approvals in the time set out in the agreement or, if none, as soon as practicable,

(iii) file plans and specifications of the complete building in the time set out in the agreement,

(iv) at the applicant’s own expense, remove the building and restore the site in the manner specified in the agreement if approvals are not obtained or plans filed in the time set out in the agreement, and

(v) comply with such other conditions as the chief building official considers necessary, including the provision of security for compliance with subclause (iv).

(3.1) A principal authority may, in writing, delegate to the chief building official the power to enter into agreements described in clause (3) (c) and may impose conditions or restrictions with respect to the delegation.

(4) In considering whether a conditional permit should be granted, the chief building official shall, among other matters, have regard to the potential difficulty in restoring the site to its original state and use if required approvals are not obtained.

(emphasis added)

[171] SPIRG submits there is not sufficient evidence before this court to determine whether or not the CBO could or would have issued a conditional permit. I agree. However, I do not accept that imposing a requirement the CBO not issue an occupancy permit until the development is connected to municipal services would be a conditional building permit.

[172] All applicable law has been complied with. The proposed use is permitted by the 2009 Zoning By-law. What we are now dealing with is a regulation for the construction requirements of the development. "Use" is different from a construction regulation or requirement.

[173] S. 22.1 of the M1 Zone describes the permitted uses. The M1 Zone by-law goes on as follows:

22.2 Regulations for Uses Permitted in Subsection 22.1

(a) All development must be on municipal water and sewer services.

(b) Minimum Lot Frontage 30 metres (99 ft)

(c) Minimum Lot Area 1860 m2 (20,021 ft2)

101

(d) Maximum Lot Coverage 50%

(e) Minimum Front Yard 15 metres (50 ft)

(f) Minimum Interior Side Yard 7.5 metres (25 ft) except that the

minimum interior side yard abutting a residential, commercial, open space or institutional use or zone shall be 11 metres (36 ft).

(g) Minimum Exterior Side Yard 11 metres (36 ft)

(h) Minimum Rear Yard 7.5 metres (25 ft) except that the

minimum interior side yard abutting a residential, commercial, open space or institutional use or zone shall be 15 metres (50 ft).

(i) Maximum Height 11 metres (36 ft)

[174] This regulation governs what is to be built and how it is to be built on the lands. The CBO is responsible to ensure that the plans submitted as part of the application conform to these "regulations". The CBO is thereafter responsible to ensure that the construction is consistent with the plans he approved. If construction does not, the CBO can take steps to stop construction, issue orders etc. If the final building does not comply with the approved plans, the CBO can, amongst other remedies, withhold an occupancy permit which would prohibit occupancy or use of the building.

[175] Withholding occupancy for non-compliance with the requirements is consistent with s. 11 of the Act which provides:

(1) Except as authorized by the building code, a person shall not occupy or use a building or part of a building that is newly erected or installed or permit it to be occupied or used until the requirements set out in this section are met.

[176] A simple analogy is a new home building permit which requires that the new home to be connected to municipal water and sewers. In the Town’s R1 to R4 Zones municipal service connection is required. That doesn’t mean the building permits do not get issued for new homes in these zones. It simply means that the new home cannot be occupied until the municipal connections are made and operational. This can happen during construction of the new home or even after the new home has been completely built. However, until these connections are made and operational, the new home owner cannot occupy the new home.

[177] This same rationale applies to industrial buildings. The Building Permit issued in this case requires Town inspection and testing including the building sewers and water services pipes. Clearly, these municipal service connections can and often occur during the construction of the building.

[178] There is no requirement that the municipal services must be at the property line for connection prior to the issuance of the building permit. The Town could be constructing the municipal services into the area at the same time the building is being constructed. There may be risks involved to the land owner to start the construction without the municipal services being available at the lot line. However, that does not mean the owner cannot choose to accept that risk that the municipal services won't be delay or perhaps even cancelled.

[179] All Building Permits issued under the M1 Zone should provide that the development will be connected to municipal water and sewers prior to any occupancy or use. S.22.2 (a) only requires that the development be on municipal services for the permitted use. It does not require that the municipal services be available at the lot line when the building permit application is made, approved or the construction is ongoing. Again, the Town could have provided for that but chose not to. The fact the municipal sewer line may not be available for months or years doesn’t change the ability to build the building in anticipation of that service line PROVIDED the building is not used until that municipal connection is made.

[180] This is not a situation where the municipal sewer service might never be brought to the Subject Property. The Town obligated itself to bring services to Subject Property in its agreement with Lystek. The timeline has been expedited by the Town. By providing that the Lystek Facility cannot be occupied or used until the municipal connections are made and fully operational meets with the intent of the M1 Zone. The use of the building won't commence until such time as all requirements in the 2009 Zoning By-law has been met, including s. 22.2 (a).

[181] It is unknown whether the actual Lystek Facility approved plans show both municipal water and sewer connections. It may be that this requirement is already set out in the Lystek approved plans as it was contemplated that there be an immediate municipal water connection and subsequently, a municipal sewer connection as well. I will proceed as though no such requirement is set out in the Lystek Building Permit.

[182] The CBO should have ensured that requirement in s. 22.2 (a) would be complied with prior to occupancy or use of the Lystek Facility.

[183] No submissions were made in this regard but let me deal with one minor matter. The Agreement between Lystek and the Town provided that no construction would commence until the municipal connections were in place to the Subject Property. This does not change the above analysis. The CBO was not bound by the terms of the Agreement between Lystek and the Town. This is not applicable law under the Act. The CBO was bound to issue the building permit provided the Act and applicable law was complied with. The CBO does not embark upon a review and interpretation of the Agreement. In any event, it is clear that neither Lystek nor the Town insisted on compliance with this term of the Agreement.

[184] As this court has the jurisdiction to make any decision that the CBO could and should have made, the following requirement shall be included in the Lystek Building Permit:

The Lystek Facility shall be fully connected to the Town’s municipal water and sewer services, which connections shall be fully operational, prior to any temporary or permanent occupancy permit will be granted for the use or operation of the Lystek Facility.

Costs

The parties shall arrange for an attendance before me to address the issue of costs. Costs Outline’s shall be served and filed by both parties in advance of the attendance.

Ricchetti J.

Date: October 2, 2012

OWEN SOUND COURT FILE NO.: 12-040

DATE: 20121002

SUPERIOR COURT OF JUSTICE – ONTARIO

(Central West Region – Brampton)

RE:

Southgate Public Interest Research Group

Applicant

AND:

The Corporation of the Township of Southgate, Lystek International Inc. and Douglas Kopp

Respondents

ENDORSEMENT

Ricchetti J.

Date: October 2, 2012

The Application

The Background

The Town’s 2002 Zoning By-law

The Town’s 2009 Zoning By-Law

Sale to Lystek

The Lystek Facility

The Current and Applicable Zoning By-Law

The Problem

The Building Permit Application and the CBO’s Decision

The Hearings

The Status of the Lystek Facility

The Issues

The Standard of Review

CBO’s decision as to whether the Lystek Facility is a Dry Industry

CBO's decision on the applicability of s. 22 .2 (a) of the 2009 Zoning By-law

The approach to issuance of building permits

Judicial Interpretation

1. Does SPIRG have standing?

Conclusion

2. Is the Lystek facility a Permitted USe?

(a) Inconsistent with planning policy and practice in Ontario

(b) Fails to meet the criteria for a permitted use in M1 Zone

Is the Lystek Facility a “General Industrial” use?

Is the Lystek Facility a Dry Industry?

i) Could the Lystek Facility exist without municipal services?

Municipal Sewer Services

Municipal Water Services

ii) Is the Waste Water discharge limited to washrooms, certain defined and ancillary uses?

Conclusion

Was the CBO’s decision to issue a building permit in these circumstances reasonable?

3. Must the Lystek Facility be on municipal services?

Conclusion

Conclusion

Remedy

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Expert Witnesses

Issues

Statutory Provisions 4

Legal Tests 2

Legislation 3