Cité de Sillery v. Sun Oil Co. and Royal Trust Co., [1964] SCR 552

Supreme Court of Canada

Cité de Sillery v. Sun Oil Co. and Royal Trust Co., [1964] S.C.R. 552

Date: 1964-04-28

La Cité de Sillery (Defendant) Appellant;

and

Sun Oil Company Limited (Plaintiff) Respondent;

and

The Royal Trust Company (Intervenant) Respondent;

and

Le Conseil des Ports Nationaux and Ben Bushenbaum Mis-En-Cause.

1963: May 30, 31; 1964: April 28.

Present: Taschereau C.J. and Cartwright, Fauteux, Abbott and Judson JJ.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC.

Municipal corporations—Zoning by-law—Lands formerly used for industrial purposes classified as residential—Whether by-law discriminatory and an abuse of power—Code of Civil Procedure, art. 50.

The plaintiff oil company brought an action based on art. 50 of the Code of Civil Procedure against the defendant municipality to have a general zoning by-law declared null and void in so far as it concerned a lot in which the plaintiff claimed an interest. By way of an aggressive intervention, the Royal Trust also asked for the nullity of the by-law in respect of certain other lots in the same zone and, subsidiarily, that it be declared that it had an acquired right in the commercial and industrial use of such lots and that the said by-law could not affect

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that use. The only industrial activity which had been carried on in recent years within that zone was a modest lumber business on part of the property in which the Royal Trust was interested. This had ceased three years prior to the adoption of the by-law. No complaint was made against the adoption of the by-law until some ten years after it had been in affect. The trial judge quashed the by-law in so far as the properties in question were concerned on the ground that it constituted a discriminatory, unjust and abusive exercise of the discretion conferred by the statute. That judgment was affirmed by the Court of Appeal. The municipality appealed to this Court.

Held: The appeal should be allowed and the action and the intervention dismissed.

It is well established that the supervisory powers of the Superior Court under art. 50 of the Cole of Civil Procedure over the acts of municipal councils are only to be exercised under exceptional circumstances. The Court could not merely substitute its opinion for that of the municipal authority. In order to declare null the by-law, the Court must find that, as to the lots in question, there had been discrimination and an abuse of power equivalent to fraud which had caused a flagrant injustice. Admittedly any zoning by-law is discriminatory. The burden of proving fraud or abuse of power was upon the plaintiff, and no such fraud or abuse of power by the municipality has been established.

As to the subsidiary argument that the intervenant had an acquired right in the commercial and industrial use of lots held by it and that the by-law could not affect such use, it could not succeed. The by-law provided for the protection of non-conforming use of land at the time it came into force, but if that use was discontinued it could not be resumed at a later date. Consequently, since acquired rights of the intervenant to the commercial or industrial use of these lots, if such existed at the time the by-law came into force, were protected, it was not necessary to intervene in the present action in order to protect them.

APPEAL from a judgment of the Court of Queen's Bench, Appeal Side, Province of Quebec1, affirming a judgment of Miquelon J. Appeal allowed.

Jean Turgeon, Q.C., and Jacques Drouin, Q.C., for the defendant, appellant.

François de B. Gravel, for the plaintiff, respondent, Sun Oil Co.

Maurice Gagné, Q.C., for the intervenant, respondent, Royal Trust Co.

The judgment of the Court was delivered by

Abbott J.:—This appeal is from a majority judgment of the Court of Queen's Bench2 affirming a judgment of the Superior Court which maintained (1) an action by the

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respondent Sun Oil Company Limited against appellant declaring illegal, null and void a general zoning by-law of appellant municipality in so far as it concerns beach lot No. 286–1 of the Parish of St. Colomban de Sillery, in which respondent Sun Oil claimed an interest and (2) the intervention of the respondent The Royal Trust Company es qualité, asking similar conclusions in respect of certain other beach lots in the same area.

The relevant facts are not now in dispute. They are fully set out in the judgments below and for the purpose of this appeal can be summarized as follows.

In 1949, under the terms of its charter, and in particular the provisions of s. 20 of 11 Geo. VI, c. 90, the appellant adopted a comprehensive zoning by-law No. 267, dividing the whole of the municipality into twenty-four zones. The municipality is situated on the North Shore of the St. Lawrence River immediately to the west of the city of Quebec and is largely residential in character, most of the residential area being north of a cliff which borders the river. At the bottom of this cliff is a strip of land running the full extent of the frontage of the municipality, varying in depth from about 100 feet to 500 feet, with the tracks of the Canadian National Railway running quite close to the shore. Beyond these river-front properties there are beach lots extending to low-water mark which are in large part covered twice daily by the tide.

Prior to the enactment of by-law No. 267, industrial operations had been carried on at various points along these river-front lots and in the alleged interest of preserving the residential character of the city, the by-law classified those sections as industrial where such activities were then being carried on, but the other portions were classified as generally residential allowing various accessory service activities such as grocery stores, service stations, and the like. This resulted in the establishment along the river front of six separate zones, three of which were industrial and three, including the area under consideration, residential.

The zone which contains the properties in which the respondents are interested—designated Zone CX—is classed as residential and is some 2800 feet long. The zones to the east and west of Zone CX are classed as industrial and contain a number of oil storage tanks. There are no oil

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storage tanks in Zone CX and, apart from the railway tracks, the only industrial activity which had been carried on in recent years within that zone, was a modest lumber business on part of the property in which the respondent The Royal Trust Company is interested. This had ceased in 1946 prior to the adoption of the zoning by-law. While these beach lots appear at one time to have been commercially exploited they had not been put to any use for some time prior to the enactment of the zoning by-law. As Montgomery J. has pointed out, if the by-law was valid when enacted, it cannot be rendered invalid by changes in the economic situation that subsequently occurred.

No complaint was made by the respondents or the owners of other properties concerned against the adoption of by-law No. 267 until some ten years after it had been in effect. No proceedings were taken by any ratepayer under arts. 411 et seq. of The Cities and Towns Act, R.S.Q. 1941, c. 233, within the delay provided by the statute, to quash the zoning by-law either in whole or in part.

The present proceedings arose out of a desire by the respondent, Sun Oil Company Limited, to construct an oil storage plant and marine terminal on the westerly of the two beach lots in Zone CX, namely lot No. 286–1, having a superficial area of 1,075,000 square feet. It had entered into an undertaking, on September 13, 1958, to purchase the said lot from the then owner, the mise-en-cause Bushenbaum, for the sum of $50,000 provided it could obtain the necessary permits and licenses to construct such a plant. Bushenbaum had purchased the property for $15,000 in 1953, over three years after the enactment of the zoning by-law.

On March 31, 1958, the Sun Oil Company Limited also made an offer to the other respondent, The Royal Trust Company, to purchase the other half of the beach lot area, lot No. 270–2 having an approximate superficial area of 900,000 square feet—and three other lots to the north of the railroad, namely Nos. 270–1, 271 and 273, as well as three deep-water lots, for the sum of $150,000, under a similar condition that they could build thereon an oil storage plant.

Applications for permits were made to the appellant municipality and refused by reason of the provisions of its

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by-law No. 267. The Sun Oil's offer to The Royal Trust Company expired, but its interest in Lot No. 286–1, owned by Bushenbaum, persists, and on January 9, 1959, Sun Oil took the present action to have the by-law declared null and void in so far as Lot No. 286–1 was concerned.

The respondent, The Royal Trust Company, as the testamentary executor of the Estate of the late Dame Margaret Alleyn, widow of the late Hon. John Sharpies, the owner of lots 270–1, 270–2, 271, 272 and 273, by its aggressive intervention also asked that the zoning by-law be declared null and void in so far as the said five lots were concerned and, subsidiarily, that it be declared that it had an acquired right in the commercial and industrial use of such lots, and that the said by-law could not affect that use.

The learned trial judge maintained both the main action and the intervention, held that the zoning by-law constituted, in respect of the beach lots 286–1, 270–1, 270–2 and 273, a discriminatory, unjust and abusive exercise of the discretion conferred by the statute, and he quashed the by-law in so far as those properties are concerned. That judgment was confirmed by the Court of Queen's Bench, Hyde and Montgomery JJ. dissenting.

The action and the intervention are based on art. 50 of the Code of Civil Procedure which reads:

Art. 50. Excepting the Court of King's Bench, the Courts within the jurisdiction of the Legislature of Quebec, and bodies politic and corporate within the Province are subject to the supervision and reforming power of the Superior Court, in such manner and form as by law provided, save in matters declared by law to be of the exclusive competency of such courts, or of anyone of the latter, and save in cases where the jurisdiction resulting from this article is excluded by some provision of a general or special law.

It is well established that the supervisory powers of the Superior Court under that article over the acts of municipal councils and other like bodies, are only to be exercised under exceptional circumstances. The Court cannot merely substitute its opinion for that of the municipal authority. The relevant principles were succinctly stated by Pratte J. in La Corporation de St. Joseph de Beauce v. Lessard3:

Le champ d'application de l'art. 50 C.P. a été si souvent exploré qu'il serait fastidieux de passer en revue les nombreux arrêts auxquels il a donné lieu et qui en ont fixé les limites. Rappelons seulement que, suivant une jurisprudence constante, il y a lieu à l'action de l'art. 50 C.P., à l'encontre

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des procédés municipaux, dans le cas d'excès de pouvoirs, dans le cas de fraude, et aussi lorsqu'une violation de la loi ou un abus de pouvoir équivalant à fraude a pour effet une injustice flagrante.

Applying these principles to the present case, in order to declare null the decision taken by the appellant as expressed in its by-law No. 267, the court must find that, as to the lots in which the respondents are concerned, there had been discrimination and an abuse of power equivalent to fraud which had caused a flagrant injustice.

Admittedly any zoning by-law is discriminatory in the sense that it forbids the construction of certain types of buildings, or the carrying on of certain activities in a zoned area, and permits others. That result flows from the exercise of the statutory authority to enact zoning by-laws in the public interest. As my brother Judson stated in Township of Scarborough v. Bondi4:

The mere delimitation of the boundaries of the area affected by such a by-law involves an element of discrimination. On one side of an arbitrary line, an owner may be prevented from doing something with his property which another owner, on the other side of the line, with a property which corresponds in all respects except location, is free to do.

Similarly in Canadian Petrofina Limited v. Martin and City of St. Lambert5, my brother Fauteux after discussing the decision of the Privy Council in City of Toronto v. Trustees of the Roman Catholic Separate Schools of Toronto6, said at p. 458:

What was then said by Lord Cave may be stated concisely as follows, for the purpose of this case. The whole object and purpose of a zoning statutory power is to empower the municipal authority to put restrictions, in the general public interest, upon the right which a land owner, unless and until the power is implemented, would otherwise have to erect upon his land such buildings as he thinks proper. Hence the status of land owner cannot per se affect the operation of a by-law implementing the statutory power without defeating the statutory power itself. Prior to the passing of such a by-law the proprietary rights of a land owner are then insecure in the sense that they are exposed to any restrictions which the city acting within its statutory power may impose.

The burden of proving fraud or abuse of power was upon the respondents, and for the reasons which they have given I share the view expressed by Hyde and Montgomery JJ. that no such fraud or abuse of power by the municipal council of appellant municipality has been established.

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As a subsidiary argument counsel for the respondent, The Royal Trust Company, submitted that it had an acquired right in the commercial and industrial use of the lots held by it and that the zoning by-law could not affect such use. This argument was based primarily upon a text of by-law No. 267 containing in s. 73 a definition of "use", which in the French version reads:

USAGE.—L'objet pour lequel un terrain, un bâtiment, une structure ou ses dépendances sont employés, occupés ou destinés à être employés ou occupés.

In referring to this definition Hyde J. cited a text which did not include the words "un terrain", and this difference was pointed out by my brother Fauteux at the hearing before us. It is now conceded that the official text of the by-law does not contain the words "un terrain" in s. 73.

The words "destinés à être employés ou occupés", in s. 73, clearly refer to a building in course of construction but not yet completed. This interpretation is consistent with the terms of s. 351 of the by-law. That section provides that a building, which at the coming into force of the by-law, is used or destined to be used for a purpose prohibited under the by-law, shall not be enlarged, rebuilt or structurally altered unless thereafter it is used for a permitted purpose.

Non-conforming use of land at the time the zoning by-law came into force is protected under s. 352, but if that use is discontinued it may not be resumed at a later date. Acquired rights of The Royal Trust Company to the commercial or industrial use of the beach lots, if such existed at the time the by-law came into force, are protected under s. 352. It was not necessary to intervene in the present action in order to protect them.

For the foregoing reasons, as well as for those of Hyde and Montgomery JJ., with which I am in respectful agreement I would allow the appeal and dismiss the action and the intervention. The appellant is entitled to its costs throughout.

Appeal allowed with costs.

Attorney for the defendant, appellant: J. Drouin, Quebec.

Attorneys for the plaintiff, Sun Oil Co.: Gravel, Thomson & Gravel, Quebec.

Attorneys for the intervenant, Royal Trust Co.: Prevost, Gagné, Flynn, Chouinard & Jacques, Quebec.