Court File and Parties

Court File No.: 1609/17 Date: 2018-11-01 Ontario Superior Court of Justice

Between: SOUTHSIDE CONSTRUCTION MANAGEMENT LIMITED, Applicant – and – THE CORPORATION OF THE TOWN OF INGERSOLL, Respondent

Counsel: John D. Goudy, for the Applicant Kelly Nenniger, for the Respondent

Heard: October 3, 2018

Before: Grace J.

A. Introduction

[1] Southside Construction Management Limited acquired a vacant thirty-three acre parcel of land at the southwest corner of Harris Street and Clarke Road in Ingersoll, Ontario in October, 2004 (the “Lands”). Highway 401 runs along the southern boundary.

[2] Southside intends to develop the property. The Lands are zoned Highway Commercial and are designated as HC-9.

[3] Section 12.3.9 of the Town of Ingersoll’s zoning by-law relates specifically to the Lands. At issue is the scope of one of its provisions. A long list of permitted uses is delineated or incorporated by reference in section 12.3.9.1. Three terms were defined in the paragraphs that followed. The provision that is central to the parties’ dispute appears next. Under the heading “Community Shopping Centre”, section 12.3.9.2.4, reads:

The gross leasable commercial floor area for a community shopping centre containing permitted uses in the HC-9 Zone shall not be greater than 4,645 m 2 (50,000 ft 2 ). [Italics in original]

[4] The Corporation of the Town of Ingersoll (“Ingersoll” or “Town”) takes the position that a project involving more than 50,000 square feet cannot be built on the Lands unless Southside first applies for and obtains an amendment to the zoning by-law and the County of Oxford Official Plan.

[5] Southside disagrees. The developer notes that the phrase “community shopping centre” is undefined. The meaning of the phrase “Shopping Centre” is, however, set forth in section 4.0 of the zoning by-law as follows:

…a building or group of buildings designed, developed, owned and managed as a unit containing six or more separated spaces for lease or occupancy by commercial uses or business or professional offices . [Italics in original]

[6] That definition applies, Southside argues, to a “community shopping centre”. If Southside’s position is accepted, the size restriction of 50,000 square feet would not apply unless the developer’s plans involve a commercial project containing “six or more separated spaces for lease or occupancy”. The applicant seeks a declaration that accords with its interpretation of the zoning by-law.

[7] Ingersoll opposes the application on the basis of jurisdiction and interpretation. The Town advanced a two prong response. First, the municipality argues that the court should decline to make any determination at this time. The Lands are currently used for agricultural purposes. Southside has not filed an application with the municipality disclosing the nature of the development it contemplates. No permit or approval has yet been sought. Consequently, the Town submits that this proceeding is premature. Second, the Town argues that the 50,000 square foot size restriction applies to any project irrespective of the number of units it is designed to contain. I will deal with the issues of prematurity and interpretation in turn.

B. Prematurity

[8] The respondent relies on 296616 Ontario Ltd. v. Richmond Hill (Town) (1977) , 14 O.R. (2d) 787 (C.A.) (“ Richmond Hill ”). In that case an agreement of purchase and sale was conditional on the landowner obtaining a declaration that the property could be used for legal non-conforming commercial purposes including a medical clinic. The order sought had been granted at first instance. In allowing the appeal, Brooke J.A. said, at para. 9:

It is only upon the actual facts that the Court can declare the rights of the parties, and it cannot be said that, where those facts have not yet occurred, the situation is within the type contemplated by [the] Rule…

[9] The Court of Appeal declined the applicant’s alternative request that the court modify, rather than set aside, the order made at first instance. At para. 11 Brooke J.A. explained:

By adopting this course, it was again contended the Court will resolve future differences between the parties. However, this is not the function of this Court in this type of application. There is no pending issue between the parties to these proceedings, which raises the question of construction of the by-law and the right of the landowner as to present use, and the Court will not make an order on the basis of an assumed set of facts to resolve future matters.

[10] While no authority was mentioned, Richmond Hill did not establish a new principle. In J.E. Gibson Holdings Ltd. v. Principal Investments Ltd. , [1963] 2 O.R. 507 (C.A.) (“ Gibson ”) the court was asked to declare that a clause in a lease served to renew the arrangement for successive 21-year terms. The Court of Appeal addressed a preliminary objection that the application was premature because the initial term of the lease still had several years to run.

[11] At para. 10, Laidlaw J.A. summarized the state of the law in these terms:

I am quite in accord with judicial opinion expressed in numerous cases and the general principle that the jurisdiction of the Court to make a declaration which will arise in the future is to be exercised sparingly. However, I am persuaded that determination of the question in issue is not academic. It is of such practical importance and the circumstances are such that the jurisdiction of the Court should be exercised at the present time.

[12] The court decided that the matter should proceed because the issue raised was not hypothetical or speculative. The tenant had agreed to sell its interest in the lease pursuant to a contract that required the interpretation of the clause be settled by agreement with the landlord or by order of the court. On behalf of the Court of Appeal, Laidlaw J.A. concluded:

…I am persuaded that determination of the question in issue is not academic. It is of such practical importance and the circumstances are such that the jurisdiction of the Court should be exercised at the present time.

[13] The Town argued that Gibson is distinguishable. Fourteen years have passed since the Lands were acquired. They remain vacant. Southside’s plan for the Lands, if formulated, has not been disclosed. The contemplated use is unknown. So, too, is the proposed development’s size. The Town submits that the court should allow the usual statutory approval process to unfold if and when Southside makes formal application for development approval.

[14] On the other hand, Southside submitted that this case is similar to Gibson. The applicant’s president, Vito Frijia, deposed that the company “is holding the Property with the intention of developing it in the future for commercial uses in accordance with the Zoning By-Law.” [^1] In order to obtain a building permit, the developer must provide a great deal of information, pay fees and provide deposits. Embarking on a time-consuming and expensive process is wasteful because it is already known that there is disagreement concerning the interpretation of a key provision the zoning by-law contains. Consequently, the court’s involvement is necessary and appropriate before Southside prepares and submits an application for development.

[15] I agree with Southside’s position on this point. While its future plans have not been fully disclosed, the developer is clearly contemplating a development that contains less than six units and exceeds 50,000 square feet. Furthermore and as noted, the contentious section of the zoning by-law is not one of general application. Rather it relates specifically and exclusively to the Lands. I am satisfied the court is being asked to resolve a current dispute that is of practical importance to the parties. I turn to the issue of interpretation.

C. Interpretation

i. The Applicable Principles

[16] The issue raised on this application is a question of law: Niagara River Coalition v. Niagara-on-the-Lake (Town) , 2010 ONCA 173 , 2010 CarswellOnt 1332 (C.A.) at para. 43. [^2] For that reason, the bulk of the affidavits filed by the parties are inadmissible because they consist of the affiants’ opinion concerning the appropriate interpretation of the zoning by-law. The interpretive exercise is for the court to undertake.

[17] In addressing the parties’ arguments, it is crucial that the distinction between the Official Plan and the zoning by-law be maintained. The differences were well explained in Aon Inc. v. Peterborough (City) , [1999] O.J. No. 1225 (Gen. Div.) . At paras. 17 and 18, Howden J. wrote in part:

The Official Plan, when duly approved…sets out the overall direction and policies for the future physical development and the cultural, economic and environmental ambience of a municipality…The zoning by-law, once enacted and all appeals therefrom having been dealt with by the Board, is the law which prohibits certain uses or buildings except for the purposes set out in the by-law…The two documents are meant to be inter-related in that, by s. 24 [of the Planning Act ], the zoning by-law must conform with the Official Plan. By s. 24(4), when a zoning by-law comes into effect, it is “conclusively deemed” to be in conformity with the Official Plan…

Thus, while certainly normal rules of statutory construction are properly held to apply to zoning by-laws, they are a somewhat unusual type of law in their statutorily required inter-relationship with the Official Plan. A proper contextual approach to their interpretation requires that zoning by-laws should be interpreted in their ordinary and plain meaning in light of the by-law as a whole and its policy derivation and basis within the Official Plan. However, it must be borne in mind that it is the zoning by-law which is the applicable law…It is therefore a zoning by-law which must implement or convert the Official Plan into a body of law regulating the use of land and it does so only to the extent that it actually sets forth in its provisions, interpreted in their ordinary sense in light of the policy framework of the official plan and the context of the by-law as a whole.

[18] The approach was adopted and summarized concisely in Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia (Trustees of) , 2015 ONCA 494 . Writing on behalf of the Court of Appeal, Tulloch J.A. said at para. 23:

The general approach to statutory interpretation requires the words of the provision here to be read in their entire context and according to their grammatical and ordinary meaning, harmoniously with the scheme and object of the By-law as a whole and the intention of the drafters… [^3]

ii. The Official Plan and the Zoning By-Law

[19] The Official Plan for the County of Oxford differentiates between areas within and outside the core of Ingersoll. The former is described as the “Central Area” and the latter as “Service Commercial Areas”.

[20] The importance of the Central Area from a planning perspective is illustrated by section 9.3.1 of the Official Plan. It outlines the strategic aims of Ingersoll’s Council. They include the following:

Promote the Central Area as the heart of the community and promote the Central Area as a people place in order to maintain its role as the focal point of the community for residents and businesses.

Promote the long term viability of the Central Area by ensuring that commercial uses outside the Central Area are compatible and complementary to the Central Area function.

[21] Southside’s property is in a Service Commercial Area. Section 9.3.3 of the Official Plan explains the contemplated use of those parts of the municipality:

Service Commercial Areas provide locations for a broad range of commercial uses that, for the most part, are not suited to locations within the Central Area because of their requirements for large lot area, access or exposure requirements or due to compatibility conflicts with residential development…

The Service Commercial designation applies to those areas which primarily cater to the commercial needs of the travelling public or a broader market area with requirements for large sites that cannot be accommodated in the Central Area…[Italics in original]

[22] The genesis of the provision in issue in this application is a 2006 proceeding before the Ontario Municipal Board (the “O.M.B.”). The Official Plan had been amended in 2004 to require a retail market study for properties designated as Service Commercial and involving development of more than 25,000 square feet. For projects involving more than 50,000 square feet, a “major” Official Plan amendment was required too. Southside filed an appeal challenging those modifications. [^4]

[23] The O.M.B. allowed Southside’s appeal. At page 7 of his July 11, 2006 decision, O.M.B. member M.A.F. Stockton wrote:

The Board finds…that a requirement in the County Official Plan for a market study only for developments exceeding 50,000-square feet is appropriate in the context of these lands in the Town of Ingersoll, that it represents good planning, and that the County Official Plan should be amended accordingly. [Italics in original]

[24] The O.M.B. ordered that the Official Plan be:

modified so that the Southside-owned Service Commercial lands are exempt from the requirements of Section 9.3.3.1 for a Retail Market Impact Study for development under 50,000 square feet, and requiring a Retail Market Impact Study for development over 50,000 square feet rather than a Major Review of Commercial Policies and Official Plan Amendment [^5]

[25] Revisions to section 9.3.3.1 of the Official Plan were subsequently approved by the O.M.B. The changes outlined in the Board’s September 29, 2006 order continue to be in force. Under the heading “Scale-Related Policies and Study Requirements”, the section now provides in part:

Community shopping areas offering a range of goods and services which cater to the convenience shopping and service needs of community residents and the traveling public are a permitted use in the Service Commercial designation.

Community shopping areas are permitted to locate in the Service Community designation immediately adjacent to the Highway 401 corridor. Such community shopping areas will have between 930 and 4,645 square meters (10,000 to 50,000 square feet) of gross leasable commercial floor area .

Development proposals above 4,645 square meters (50,000 square feet) of gross leasable commercial floor area per site will require the preparation of a retail market study to the satisfaction of the County of Oxford and the Town of Ingersoll to determine the impact on the planned retail function of the Ingersoll Central Area and to determine the feasibility of the location of the use in the Central Area…The impact study should evaluate the potential to locate the use in the Central Area as a first priority…

Proposals to expand or add new service commercial areas and that propose development greater than 4,645 square metres (50,000 square feet) will require an Official Plan amendment…

[26] Section 12.0 of the zoning by-law applies to all properties in the Highway Commercial or HC Zone. Permitted uses are listed and general requirements with respect to matters such as lot area, frontage, depth and building height are specified. Section 12.3 contains “special provisions” applicable to the ten properties within the HC Zone.

[27] As noted, the Lands bear designation HC 9. Section 12.3.9 of Ingersoll’s zoning by-law applies specifically to Southside’s property. That section, as currently worded, was also added by the September 29, 2006 order of the O.M.B. Changes were made because the Board had concluded that a wider range of uses should be permitted on Southside’s property.

[28] Some of the provisions added by the O.M.B. have already been set forth. For ease of reference and to put this part of the decision in context, they bear repetition.

[29] Section 12.3.9 starts with a list of permitted non-residential uses. An earlier listing of allowed purposes applicable to all of the Highway Commercial or HC Zones is incorporated by reference. Eight more are added in 12.3.9.1. Examples of the total of forty permitted uses include a service station, a bank, a bowling alley, a convenience store, a restaurant, a hotel or motel, a motor vehicle dealership, a supermarket, a drug store and a health club.

[30] Section 12.3.9.2 follows. It provides:

Notwithstanding any provisions of [the zoning by-law] to the contrary, no person shall within any HC-9 Zone use any lot, or erect, alter or use any building except in accordance with the following provisions

[31] Definitions of “Supermarket/Food Store”, “Automotive and Household Supplies Retail Store” and “Gross Leasable Commercial Floor Area” are set forth in the three subsections that follow.

[32] The first two definitions are not relevant to this dispute. Interestingly, however, “supermarket/food store” and “automotive and household supplies retail store” were two of the eight additional uses added by section 12.3.9.1.

[33] The third definition is of significance. In part it reads:

Gross Leasable Commercial Floor Area means the area in which tenants pay rent for what are commonly referred to as stalls and which is exclusive to tenant occupancy include basements, mezzanines and upper floors, measured from the centre line of joint partitions and from outside wall faces. [Italics in original]

[34] The concluding portion of the definition describes areas that are excluded from the calculation such as washrooms, boiler rooms, mechanical and electrical storage areas and exterior spaces.

[35] Section 12.3.9.2.4 appears next. The text is preceded by the heading “Community Shopping Centre”. Those words had not appeared before in the portion of the zoning by-law applicable to the Lands. The section provides:

The gross leasable commercial floor area for a community shopping centre containing permitted uses in the HC-9 Zone shall not be greater than 4,645 square metres (50,000 square feet).

[36] Section 12.3.9.2.5 completes the substantive portion of the zoning by-law devoted to the Lands. It serves to incorporate by reference other sections of the zoning by-law “that are consistent with the provisions herein contained”.

iii. The Interpretation advocated by Southside and Ingersoll’s Response

[37] As noted, the phrase “Community Shopping Centre” is not defined anywhere in the zoning by-law.

[38] Southside submits that the definition of “Shopping Centre” found in section 4.0 of the zoning by-law applies. As mentioned earlier it reads:

“SHOPPING CENTRE” means a building or a group of buildings designed, developed, owned and managed as a unit containing six or more separated spaces for lease or occupancy by commercial uses or business or professional offices. [Italics in original]

[39] In light of that definition, Southside maintains that a commercial development containing five or fewer units is not a “community shopping centre” and therefore not subject to the 50,000 square foot limitation.

[40] The Town argues that the definition of “shopping centre” has no application to the portion of the zoning by-law that is specific to Southside’s property. It notes that the various subsections that follow section 12.3.9.2, including the one relating to a Community Shopping Centre, are expressly stated to apply “[n]otwithstanding any provisions of By-Law Number 04-4160”. That is the number assigned to the zoning by-law.

[41] The positions of the parties are irreconcilable. Is Southside’s interpretation the correct one thus entitling the developer to the declaration it seeks?

iv. Analysis and Decision

[42] The genesis of the portion of the zoning by-law in issue is the 2006 O.M.B. decision. The Board decided that:

…the Southside-owned Service Commercial lands are exempt from the requirements…for a Retail Market Impact Study for development under 50,000-square feet… [^6]

[43] However, the Official Plan could require:

…a Retail Market Impact Study for development over 50,000-square feet rather than a Major Review of Commercial Policies and Official Plan Amendment… [^7]

[44] The O.M.B.’s September 29, 2006 order approved the amendments to the Official Plan and the wording of the zoning by-law specifically applicable to the Lands at the same time. Undoubtedly, the provisions of section 12.3.9 of the zoning by-law were intended to conform with the Official Plan as s. 24(1) of the Planning Act requires.

[45] The amended Official Plan requires a retail market impact study for “[d]evelopment proposals above…50,000 square feet…of gross leasable commercial floor area per site”: section 9.3.3.1.

[46] Official Plan amendments are necessary for “[p]roposals to expand or add new service commercial areas and that propose development greater than…50,000 square feet”: section 9.3.3.1.

[47] References in the Official Plan to “gross leasable commercial floor area” and to “50,000 square feet” are repeated in section 12.3.9.2.4 of the zoning by-law. In the Official Plan, those words were used in the context of “development proposals”. Those words do not appear in the portion of the zoning by-law that applies to the Lands. “Community shopping centre” appears instead.

[48] The same phrase is found in one other location: in connection with a parcel of property designated as HC-6. [^8] Nowhere is the wording defined.

[49] Southside isolates two of the words. It notes that “Shopping Centre” is one of the terms found in the definitions portion of the zoning by-law. [^9] It is there that Southside draws the phraseology on which it relies: “six or more separated spaces for lease or occupancy by commercial uses”.

[50] There are several problems with the applicant’s position. First, it ignores the fact that according to section 2.3.3 of the zoning by-law the definitions are to apply to “words that appear in italicized text”. No portion of the phrase “community shopping centre” is italicized.

[51] Second, the use of that term is to be contrasted with that used in the context of the property owned by another developer Sifton Properties Limited and designated as HC-10. Section 12.3.10.1 allows the permitted uses on Sifton’s parcel to “take the form of a shopping centre”.

[52] Admittedly, “shopping centre” is not italicized in that section either. Notably, however, the word “community” does not appear. Some meaning must have been intended. It cannot be merely superfluous.

[53] Even if section 4.0 of the zoning by-law is applicable, the definitions apply “unless the context requires otherwise”. [^10] The inclusion of “community” means that “shopping centre” is no longer a stand-alone phrase. That alone changes the context.

[54] That becomes even more evident when considered in light of the Official Plan. Section 9.3.3.1 distinguishes between businesses in the core (the Central Area) and the non-core (the Service Commercial Area) areas of the Town. “Community shopping areas” are mentioned in provisions dealing with the latter region. According to the Official Plan, “Community shopping areas are permitted to locate in the Service Commercial designation immediately adjacent to the Highway 401 corridor.” That is precisely where the Lands are located.

[55] The next sentence in section 9.3.3.1 of the Official Plan refers to “50,000 square feet…of gross leasable commercial floor area .” There is no reference to a shopping centre, a community shopping centre or to any other structure. Clearly the limitation was intended to apply to the square footage of a structure accommodating a community shopping area: a building housing one or more of the listed businesses that offer “a range of goods and services which cater to the convenience shopping and service needs of community residents and the traveling public”: section 9.3.3.1 of the Official Plan. [^11] At no time is anything said which suggests that the number of units was part, let alone the source, of concern.

[56] In my view, when section 12.3.9.2.4 of the zoning by-law is read in context and according to its grammatical and ordinary meaning, harmoniously with the scheme and object of the By-law as a whole, it is clear that the definition of “Shopping Centre” does not apply to the phrase “community shopping centre”. The latter is not confined to a 50,000 square foot plus commercial development that consists of six or more separated spaces for lease or occupancy. The declaration Southside seeks cannot issue.

[57] The applicant suggested that the Town takes the position that every development on the Lands will be a “community shopping centre”. The court must avoid any temptation to go any further than it has. This dispute only involved Southside’s request for a declaration that accorded with its interpretation of the community shopping centre provision. The court was not asked to and did not decide any other question. Ingersoll did not issue a notice of application of its own. It did not seek any substantive relief beyond an order dismissing Southside’s request for a declaratory order.

D. Conclusion and Costs

[58] For the reasons given, the application is dismissed.

[59] Written cost submissions not exceeding five pages may be provided to me through Judges’ Administration by the close of business on November 19 in the case of the Town and on December 5, 2018 by Southside.

“Justice A.D. Grace”

Grace J.

Released: November 1, 2018

Footnotes

[^1]: This excerpt is drawn from para. 13 of the affidavit of Vito Frijia sworn July 12, 2017 (the “Frijia affidavit”). [^2]: Had the issue involved a determination of whether the by-law, as properly interpreted, applied to a specific proposal for development, the question would have been one of mixed fact and law: Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia (Trustees of) , 2015 ONCA 494 at para. 22. [^3]: Citing Ontario (Minister of Finance) v. Ontario (Information and Privacy Commissioner) , 2014 SCC 36 , [2014] 2 S.C.R. 3 at para. 18. [^4]: Other provisions and other appeals were also dealt with by the O.M.B. at the same time. [^5]: That aspect of the decision is found at page 9, item 2. [^6]: The excerpt is drawn from page 9 of the decision. [^7]: Ibid. [^8]: See section 12.3.6.2.3. [^9]: Section 4.0. [^10]: Those words are included in the preamble to the definitions that follow in section 4.0. [^11]: In Oshawa Wholesale Ltd. v. Canadia Niagara Falls Ltd. , [1972] 1 O.R. 481 (C.A.), the Court of Appeal affirmed the lower court’s decision that a shopping centre was not permitted by a by-law that allowed retails stores, supermarkets and uses which were accessory to them. The trial judge had accepted evidence that “a shopping centre was an overall, inter-related and inter-dependent project; that a shopping centre was a distinct use and a different use from the use of its individual shops or stores.”