CITATION: Allied Properties v. 1064249 Ontario Inc., 2016 ONSC 6665

COURT FILE NO.: CV-16-549951

DATE: 2016-10-26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Allied Properties REIT, 460 King Street West Inc. and 1301585 Ontario Limited, Applicants

AND:

1064249 Ontario Inc., Respondent

BEFORE: Madam Justice Kristjanson

COUNSEL: David S. Reiter and Meghan A. Cowan, for the Applicants Patrick Di Monte for the Respondent

HEARD: September 6, 2016

ENDORSEMENT

[1] The Applicants (collectively, "Allied Properties") are seeking a statutory injunction pursuant to section 380 of the City of Toronto Act, S.O. 2006, c. 11, Sch A ("COTA") to restrain the use of the Respondent's property as a commercial parking lot on the grounds that it contravenes City of Toronto By-Law 438-86 (the "Zoning By-law"). The Respondent has conceded that it is operating a commercial parking lot on the property at 464 King Street West contrary to the Zoning By-law. It argues that the commercial parking lot use is a legal non-conforming use. I find that the present use is not a legal non-conforming use and an injunction should issue pursuant to section 380 of COTA, together with related declaratory relief.

ISSUES

[2] I consider the following issues on this application.

(1) What is the test for issuing an injunction pursuant to section 380 of COTA?

(2) Do the Applicants have standing to bring this application?

(3) Have the Applicants established that the Respondent is operating a commercial parking lot in clear breach of the Zoning By-law?

(4) Has the Respondents established that the parking lot is a legal non-conforming use within the meaning of the Zoning By-law?

(5) Should a statutory injunction issue in the circumstances?

Issue #1: Statutory Injunction under Section 380 of COTA

[3] The first question is the test to be applied in order to obtain an injunction under section 380 of COTA. Section 380 of COTA provides, under the heading "Power to Restrain":

380. If any city by-law or by-law of a local board of the City under this or any other Act is contravened, in addition to any other remedy and to any penalty imposed by the by-law, the contravention may be restrained by application at the instance of a taxpayer or the City or local board.

[4] A statutory injunction under COTA does not require the applicant to meet the three-part test set out in RJR --MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 SCR 311 at para. 43, which applies to the granting of an interim injunction. Rather, I adopt the analysis of Gilmore J. in Regional Municipality of York v. DiBlasi, 2014 ONSC 3259 (DiBlasi), regarding the requirements for a statutory injunction under s. 440 of the Municipal Act, 2001, SO 2001, c 25, which is identical to the COTA statutory injunction provision. She held at para. 62:

In seeking a statutory injunction, the factors that would normally be considered in an application for an equitable injunction do not apply. Irreparable harm and balance of convenience do not need to be considered because the public authority is presumed to be acting in the best interests of the public and a breach of the law is considered to be irreparable harm to the public interest.

[5] The burden on the applicant to establish a clear breach of the by-law. However, I hold that in order to defeat the granting of a statutory injunction under COTA, the responding party must do more than show that it has an "arguable defence", which was the standard adopted in Peachland (District) v. Peachland Self Storage, 2011 BCCA 466 ("Peachland") (in chambers) at para. 30, and applied in DiBlasi. I note that the issue in Peachland respecting an "arguable defence" arose in the context of analyzing cases where the validity of a by-law and the presumption of validity were in issue. Where the issue on "clear breach" gives rise to a defence of invalidity or unenforceability of a municipal by-law, then the "arguable defence" analysis may apply (see for example Saanich (District) v. Island Berry Co., 2008 BCSC 614 ("Saanich") at paras. 28-30). The analysis does not apply in the context of a case such as this where the issue is application of a by-law which has not been attacked on the grounds of invalidity.

[6] Where the issue is the application of a valid by-law, the respondent must demonstrate there are exceptional circumstances to justify the exercise of the Court's residual discretion to not grant the injunction (see Saanich at paras. 20-21, and Newcastle Recycling Ltd. v. Clarington (Municipality), 2005 46384 (ON CA) at para. 32 ). There is a public interest in ensuring that municipal by-laws are obeyed, which underlies the legislature's decision to provide for a statutory injunction by a taxpayer to restrain the contravention of a by-law.

[7] The test for issuance of a statutory injunction under s. 380 of COTA where the validity or enforceability of a by-law is not in issue is:

(1) The applicant must establish that it is a taxpayer in the City of Toronto;

(2) The applicant must establish a clear breach of the by-law;

(3) The burden shifts to the respondent, to establish that there are "exceptional circumstances" such that the injunction should not issue;

(4) The court may issue the statutory injunction or exercise its residual discretion to decline to issue the injunction.

Issue #2: Do the Applicants Have Standing?

[8] The applicants 460 King Street West Inc. and 1301585 Ontario Limited own and pay municipal taxes in Toronto. As such they meet the statutory requirement for standing. The applicant Allied Properties REIT owns the two taxpaying entities.

Issue #3: Is There a Clear Breach of the By-Law?

[9] The burden is on Allied Properties to establish a clear breach of the zoning by-law. I find that it has done so.

[10] The Respondent is using the property as a commercial parking lot open to the public at large. The Respondent concedes that it is not operating in compliance with the Zoning By-law. Allied Properties relies on the affidavits of Paul Stagl, a Registered Professional Planner. The evidence establishes that there is a clear breach of the by-law, in that the current use of the property as a commercial parking lot is not permitted by the Zoning By-law, and it is not subject to any site-specific amendment, exception or permissions.

[11] At the present time, the Zoning By-law (438-86) is in effect; it came into force on July 20, 1993. There is a new "Citywide By-Law", 596-13, which has yet to come into force, and is subject to numerous appeals. Once all appeals are disposed of, the Citywide By-law will be deemed to have been in force as at May 9, 2013. Since the Citywide By-law is not yet in force, I consider only the Zoning By-law in this decision.

Issue #4: Is The Parking Lot a Legal Non-Conforming Use?

[12] The Respondent defends the application on the grounds that the present use is a legal non-conforming use and as such, does not violate the Zoning By-law. The Respondent must establish on the evidence that a lawful commercial parking lot has operated continuously and uninterrupted since the passage of the Zoning By-law in 1993. In essence, zoning by-laws are subject to statutory protection for legal non-conforming uses. If a property is being used in a manner that contravenes a zoning by-law, the zoning by-law cannot be enforced so long as: (i) the property was lawfully being put to that use on the day the applicable zoning by-law was passed, and (ii) the property continued, uninterrupted, in that use after the passage of the zoning by-law. If the legal non-conforming use is stopped at some point following the passage of the zoning by-law, then the protection is lost and the provisions of the zoning by-law will apply.

[13] The Municipal Property Assessment Corporation Assessment Roll information reflects that the property was being used as an accessory use lot for customer parking for the adjacent Spadina Hotel, rather than stand-alone commercial parking lot, from 1993 through 1996. As a result, the current use does not qualify for legal non-conforming use protection. I accept the evidence of Mr. Stagl that under the Zoning By-law, accessory use lot is a different use than stand-alone commercial parking lot use. There was no cross-examination on the affidavits of Mr. Stagl.

[14] The Respondent relies on the affidavit of Faisal Mehboob, who is the son of an officer and director of the Respondent. Mr. Mehboob conceded on cross-examination that his affidavit, as least as it respects zoning issues and the history of Toronto by-laws, was based on information provided by his lawyer, and that the historical information was also based on research done by the lawyer and provided to Mr. Mehboob.

[15] Of importance, although Mr. Mehboob's affidavit traces the history of the property from 1917 until 1960, it does not set out the use of the property from 1960 to the time that the Respondent purchased the property in November, 1995. This is the critical time period to establish a legal non-conforming use, and the Respondent has failed to do so on the evidence. Mr. Mehboob gave evidence that at the time the Respondent purchased the lands in November, 1995 it was being used as a parking lot, but he does not address the issue of accessory lot use. At the time of the purchase there was a compliant parking lot use (as an accessory), and a non-compliant use (commercial parking lot). I accept Mr. Stagl's evidence on this point, that it was originally a compliant use, but fell out of compliance when it moved from the accessory lot to parking lot use.

[16] Mr. Mehboob's evidence with respect to the present zoning, the legal non-conforming use status, and the City's permitting of the continued use as a principal use parking lot, are all refuted by the evidence of Mr. Stagl, which I accept.

[17] The Respondent also argued that since CIBC owned the land which was leased to the Spadina Hotel, this constituted a "commercial parking" use (since the Spadina Hotel paid money to CIBC under the lease, which would constitute a "charge.") The affidavit evidence on this point is that in 1960, the Imperial Bank of Commerce leased the property to the company operating the Spadina Hotel for $900.00 per year for ten years. There is no evidence as to the arrangement in 1993, and the MPAC Assessment Rolls clearly reflect "customer parking" at the relevant time, from 1986 through 1996. From 1997 onwards, the MPAC rolls show a change in use to "Parking lot – without parking garage." I reject the Respondent's argument on this point, given the lack of evidence at the critical period, and the cogency of Mr. Stagl's planning evidence.

[18] I find that the Respondent has not established that the property has continuously and without interruption been a legal non-conforming use since the passing of the Zoning By-law.

Issue #5: Should the Injunction Issue?

[19] Allied Properties have standing to bring the application for a statutory injunction. They have established a clear breach of the Zoning By-law. The Respondent has not established that the present commercial parking lot use is a legal non-conforming use. There are no other exceptional circumstances. As a result, I grant the application for a statutory injunction and declaratory relief as follows:

(a) A declaration that the operation of a parking lot at the property at 464 King Street West, Toronto constitutes a contravention of the provisions of City of Toronto Zoning By-Law 438-86;

(b) A declaration that the operation of the parking lot is not a legal non-conforming use; and

(c) An order pursuant to s. 380 of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, that restrains the Respondent from operating a parking lot at 464 King Street West in contravention of City of Toronto Zoning By-law 438-86.

COSTS

[20] The Applicants seek their costs of this application. If the parties are not able to reach an agreement as to costs, the Applicants may make their costs submissions to me in writing by November 2, and the Respondents by November 7. Each party is restricted to three pages (not including the Bill of Costs).

Kristjanson J.

Date: October 26, 2016