Saint-Romuald (City) v. Olivier, 2001 SCC 57, [2001] 2 SCR 898

Saint-Romuald (City) v. Olivier, [2001] 2 S.C.R. 898, 2001 SCC 57

City of Saint-Romuald                                                                                       Appellant

v.

Claudette Olivier, Louise Bolduc, Roger Bolduc,

all three carrying on business as “Les Immeubles

Jancloroc enr.”, and 9010-4407 Québec Inc.                                               Respondents

Indexed as:  Saint-Romuald (City) v. Olivier 

Neutral citation:  2001 SCC 57.

File No.:  27210.

2000:  December 5; 2001:  September 27.

Present:  McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Major, Bastarache, Binnie and Arbour JJ.

on appeal from the court of appeal for quebec

Municipal law – Zoning by-laws – Scope of acquired rights – Legal non-conforming use – Definition of purpose of a pre-existing use – Variation, extension or alteration of a use – Nightclub substituting nude dancers for western signers – Whether change in form of entertainment constitutes illegal replacement of original non‑conforming use with other non-conforming use – Whether change in form of entertainment amounts to forfeiture of acquired right to operate nightclub.

The individual respondents are owners of a building located within the territory of the appellant City where country and western entertainment had been presented since 1990.  In 1991, a new zoning by-law came into force under which uses “restaurant or bar with entertainment” and “restaurant or bar with erotic entertainment or films” are not permitted although they are not expressly prohibited.  The by-law also provides that a non-conforming use protected by acquired rights may not be replaced by another non-conforming use.  In 1994, the respondent corporation bought out the business and began operating a bar which presented entertainment involving nude dancers.  The appellant tried to obtain an order requiring the cessation of what it regarded as the unlawful replacement of one non-conforming use by another.  The Superior Court dismissed the appellant’s application on the ground that the respondents enjoyed acquired rights.  The Court of Appeal affirmed that decision.

Held (L’Heureux-Dubé, Gonthier and Bastarache JJ. dissenting):  The appeal should be dismissed.

Per McLachlin C.J. and Major, Binnie and Arbour JJ.:  The Act Respecting Land Use Planning and Development allows Quebec municipalities to regulate acquired rights, prevent their substitution by other non-conforming uses, and prohibit their extension and alteration.  The municipality may not, however, order the cessation of such uses unless they have been abandoned or interrupted for “a reasonable period” no shorter than six months.  Here the municipality did not purport to prohibit the alteration of acquired rights nor did it purport to suppress nude dance bars under the Cities and Towns Act.  The general language of s. 9 of the by-law is not sufficient to constitute an express prohibition sufficient to overcome the respondents’ acquired rights.

Under the doctrine of “acquired rights”, while the respondents are not entitled to use the premises for any use within a category previously permitted under the by-law but only to continue to use the premises as they were when the new by-law was passed, they are given some flexibility in the operation of that use.  In general, merely continuing the precise pre-existing activity, even at an intensified level, is protected unless the intensification is of such a degree as to create an altogether different use.  Both remoteness and neighbourhood effects have a role to play in the proper disposition of this type of case.  Each contributes to the real and natural expectation of the landowner.  The landowner overreaches itself if (i) the scale or intensity of the activity can be said to bring about a change in the type of use, or if (ii) the addition of new activities or modification of old ones is seen by the Court as too remote from the earlier activities to be entitled to protection, or if (iii) the new or modified activities can be shown to create undue additional or aggravated problems for the municipality, the local authorities, or the neighbours.  The factors are balanced against one another.

The issue of limitations on the respondents’ acquired right should therefore be approached as follows:  (1) It is firstly necessary to characterize the purpose of the pre-existing use actually carried on at the site.  (2) Where the current use is merely an intensification of the pre-existing activity, it will rarely be open to objection unless the intensification is such as to constitute a different use altogether.  (3) To the extent a landowner expands its activities beyond those it engaged in before, the added activities may be held to be too remote from the earlier ones to be protected under the non-conforming use.  In such a case, it is unnecessary to evaluate “neighbourhood effects”.  (4) To the extent activities are added, altered or modified within the scope of the original purpose, the Court has to balance the landowner’s interest against the community interest, taking into account the nature of the pre-existing use, the degree of remoteness and the new or aggravated neighbourhood effects.  The greater the disruption, the more tightly drawn will be the definition of the pre-existing use or acquired right.  (5) Neighbourhood effects, unless obvious, should be established by evidence if they are to be relied upon.  (6) The resulting characterization of the acquired right should not be so general as to liberate the owner from the constraints of what he actually did, and not be so narrow as to rob him of some flexibility in the reasonable evolution of prior activities.  (7) While the definition of the acquired right will always have an element of subjective judgment, the criteria mentioned above constitute an attempt to ground the Court’s decision in the objective facts.  The outcome of the characterization analysis should not turn on personal value judgments.

Substitution of nude dancers for western singers is not such an extreme variation in the nightclub or cabaret formula as to constitute a wholly different and therefore unprotected use.  The respondents’ pre-existing use can appropriately be characterized as the commercial offering of a combination of food, drink, ambiance and lawful entertainment to the public.  The switch to a different form of entertainment is within this general nightclub purpose.

Per L’Heureux-Dubé, Gonthier and Bastarache JJ. (dissenting):  Acquired rights confer immunity on the actual use of land being exercised before a change to the by-law, while merely contemplated use will not enjoy the same immunity.  If the use undertaken after the change to the by-law is of the same nature as the actual use under the former by-law, it will be protected by acquired rights.  In order to determine whether the nature of the use has changed, the use that was actually exercised prior to the prohibition created by the by-law must first be defined.  Whether a change in the nature of the use has occurred must be determined on the basis of the real and natural expectations of the user and the extent to which the amendments serve the purposes of land-use by-laws.  Nevertheless, each case turns on its own facts and the nature of the use protected by acquired rights must be determined by the court having regard to the unique facts of each situation.

The appellant prohibited uses “restaurant or bar with entertainment” and “restaurant or bar with erotic entertainment or films” by not expressly permitting them.  The requirement for such an express prohibition on presenting erotic entertainment, which the lower courts sought to impose, is unnecessary, since it is based directly on the erroneous use of the “category” approach, which holds that the exercise of a use that falls within a category prescribed by the enacting authority creates an acquired right that extends to any use that falls within that category.

The real and natural expectations of the owner of a country and western bar do not include operating a bar with nude dancers, there being a significant difference in the nature of the two types of entertainment.  However, that distinction becomes even more germane when we examine it with the objectives of harmonious development and welfare, which land use legislation is intended to advance, in mind.  Efforts to advance those objectives may indeed be informed by considerations of a moral nature, as long as those considerations relate to the primary purposes of the by‑laws.  In the instant case, one use has indeed been illegally replaced by another, rather than the same use being continued.  This change results in loss of the protection conferred by acquired rights.

Cases Cited

By Binnie J.

Followed:  Central Jewish Institute v. City of Toronto, [1948] S.C.R. 101; considered: Campbellton (City) v. Thompson (1994), 151 N.B.R. (2d) 1; Lordon v. Pitman (1980), 33 N.B.R. (2d) 23; referred to:  Heutinck v. Oakland (Township) (1997), 42 M.P.L.R. (2d) 258; Vancouver (City of) v. Victoria Block Ltd. (1964), 45 D.L.R. (2d) 118; Glenelg (Township) v. Davis (1992), 10 M.P.L.R. (2d) 260; Nanaimo (City) v. Brickyard Enterprises Ltd., [1993] B.C.J. No. 992 (QL); Appleby v. Erie Tobacco Co. (1910), 22 O.L.R. 533; Macievich v. Anderson, [1952] 4 D.L.R. 507; Rylands v. Fletcher (1868), L.R. 3 H.L. 330; Re Daly and City of Vancouver (1956), 5 D.L.R. (2d) 474; Re Lorne Park (1913), 30 O.L.R. 289; Boykiw v. Calgary (City) Development Appeal Board (1992), 90 D.L.R. (4th) 558; Re Dinnick and McCallum (1913), 28 O.L.R. 52; Regina Auto Court v. Regina (City) (1958), 25 W.W.R. 167; Canadian Occidental Petroleum Ltd. v. District of North Vancouver (1983), 148 D.L.R. (3d) 255; Toronto (City of) v. Wheeler (1912), 4 D.L.R. 352; R. v. Howard (1884), 4 O.R. 377; R. v. Clark Bros. & Hughes Ltd., [1925] 1 D.L.R. 49; Soudure Mobile D. Pilon Inc. v. Larose, [1990] R.L. 93; O’Sullivan Funeral Home Ltd. v. City of Sault Ste. Marie, [1961] O.R. 413; Kiss v. Phil Dennis Enterprises Ltd. (1974), 46 D.L.R. (3d) 196; Perth (Town) v. Perth Mews Ltd. (1991), 7 M.P.L.R. (2d) 259; Magdalena’s Rest Home Ltd. v. Etobicoke (City) (1992), 12 M.P.L.R. (2d) 316; Moncton (City) v. Como (1990), 103 N.B.R. (2d) 286; Borins v. Toronto (City) (1988), 50 R.P.R. 43; 382671 Ontario Ltd. v. London (City) Chief Building Official (1996), 32 M.P.L.R. (2d) 1; R. v. Grant (1983), 23 M.P.L.R. 89; Regina ex rel. Skimmings v. Cappy (1952), 103 C.C.C. 25; R. v. Kelly Landscape Contractors Ltd. (1980), 13 M.P.L.R. 67; Val-d’Or (Ville de) v. 2550-9613 Québec Inc., [1997] R.J.Q. 2090; East Barnet Urban District Council v. British Transport Commission, [1962] 2 Q.B. 484; Thames Heliports PLC v. London Borough of Tower Hamlets (1996), 74 P. & C.R. 164; Bridgewater (Town of) v. Chuckran, 217 N.E.2d 726 (1966); Conforti v. City of Manchester, 677 A.2d 147 (1996); Belleville (Town of) v. Parrillo’s, Inc., 416 A.2d 388 (1980); Cape Resort Hotels, Inc. v. Alcoholic Licensing Board of Falmouth, 431 N.E.2d 213 (1982); Prince Edward Island Museum and Heritage Foundation v. Charlottetown (City) (1998), 161 Nfld. & P.E.I.R. 56; Nepean (City) v. D’Angelo (1998), 49 M.P.L.R. (2d) 243.

By Gonthier J. (dissenting)

Chutes-de-la-Chaudière (Municipalité régionale de comté des) v. Compagnie 1846-0832 Québec Inc., [1994] R.J.Q. 618; Huot v. L’Ange-Gardien (Municipalité de), [1992] R.J.Q. 2404; Toronto v. Board of Trustees of R.C. Separate Schools for Toronto, [1925] 3 D.L.R. 880; Central Jewish Institute v. City of Toronto, [1948] S.C.R. 101; Syndics des écoles protestantes de la Cité d’Outremont v. Cité d’Outremont, [1951] Que. K.B. 676; Lafontaine (Municipalité du Village) v. Ouellette, [1976] C.S. 1488; Montréal  (Ville de) v. Bijouterie Lucien Gervais Inc., [1981] J.M. 21; Bernard v. Ville de Belœil, C.A. Montréal, No. 500-09-000857-896,  November 29, 1990, J.E. 91-20; Anjou (Ville d’) v. Vanier, C.A. Montréal, No. 500- 09-001305-788, J.E. 83-325; Soudure Mobile D. Pilon Inc. v. Larose, [1990] R.L. 93; Girard v. St-Irénée (Municipalité de), [2000] R.J.Q. 2689; St-Michel-Archange (Municipalité de) v. 2419-6388 Québec Inc., [1992] R.J.Q. 875; Saint-Raymond (Ville) v. Entreprises Benoît Demers Inc., [1996] Q.J. No. 4387 (QL); Squillante v. Zoning Board of Appeals of the City of Hartford, 1997 Conn. Super. Lexis 2612; Marzocco v. City of Albany, 629 N.Y.S.2d 847 (1995); Val-d’Or (Ville de) v. 2550-9613 Québec Inc., [1997] R.J.Q. 2090; Moncton (City) v. Steldon Enterprises Ltd. (2000), 225 N.B.R. (2d) 11; Young v. American Mini Theatres, Inc., 427 U.S. 50 (1976); Renton (City of) v. Playtime Theatres, Inc., 475 U.S. 41 (1986); 538745 Ontario Inc. v. Windsor (City) (1988), 64 O.R. (2d) 38.

Statutes and Regulations Cited

Act Respecting Land Use Planning and Development, R.S.Q., c. A-19.1, ss. 113, 227 [am. 1993, c. 3, s. 78; am. 1994, c. 32, s. 21].

Cities and Towns Act, R.S.Q., c. C-19, ss. 410, 414.

Civil Code of Québec, S.Q. 1991, c. 64, art. 947.

Criminal Code , R.S.C. 1985, c. C-46 , ss. 163(2) (b), 167 , 173(1) .

Municipal Act, R.S.O. 1990, c. M.45, s. 225 [am. 1996, c. 1, Sched. M, s. 13].

Saint-Romuald By-law 273-90, ss. 7, 9, 10, 11, 16, 22, 204.

Authors Cited

Giroux, Lorne.  “Questions controversées en matière de droits acquis”, dans Développements récents en droit municipal (1994).  Cowansville:  Yvon Blais, 1994, 131.

Grand Larousse de la langue française, t. 1. Paris: Librairie Larousse, 1971, “cabaret”.

Grand Robert de la langue française, t. 2, 2^e éd.  Paris: Le Robert, 1986, “cabaret”.

Kagan, Ira T.  “But I Do Not Want to Be Legal” (1993), 13 M.P.L.R. (2d) 252.

McQuillin, Eugene.  The Law of Municipal Corporations, 3rd ed.  Revised vol. 8A by Julie Rozwadowski and James Solheim.  Mundelein, Ill.: Callaghan, 1994.

Milner, James Bryce.  Community Planning: A Casebook on Law and Administration.  Toronto:  University of Toronto Press, 1963.

APPEAL from a judgment of the Quebec Court of Appeal, [1999] Q.J. No. 215 (QL), affirming a decision of the Superior Court dismissing the appellant’s application for an order requiring the cessation of a non-conforming use.  Appeal dismissed, L’Heureux-Dubé, Gonthier and Bastarache JJ. dissenting. 

Jacques Tremblay and Bertrand Gobeil, for the appellant.

François Marchand, for the respondents.

The judgment of McLachlin C.J. and Major, Binnie and Arbour JJ. was delivered by

1                                   Binnie J. – The Court’s objective on this appeal is to find the proper balance between an individual’s right to the continued use and enjoyment of his or her property and the power of the community, expressed through the local municipality, to enhance, by changing the land use regulations, the amenities of surrounding and other affected landowners.  As the case arises in Quebec, the specific issue raised is the limitation of previously acquired rights under the Civil Code.  However, as this is a public law matter, the principles of land use regulation applicable in the common law provinces concerning legal non-conforming uses are also relevant.

2                                   The facts are straightforward.  The respondents’ country and western cabaret was renamed L’Extase (“Ecstasy”) and the singing cowboys and cowgirls were replaced by nude dancers.  Business improved.  The bar was said to be [translation] “very busy”. The police increased surveillance, but their heightened interest seemed related to a concern over potential impaired drivers (a concern they have with other bars and nightclubs as well) and the opportunity to look for people against whom warrants were outstanding or who were thought to be in breach of court orders.  The evidence was that there was no problem of discipline within the bar itself.  Further, there was no evidence that nude floor shows attract more clients in trouble with the law than regular bars or that L’Extase in fact attracted a more problematic clientele than it did when it was a country and western bar.

3                                   My colleague Gonthier J. takes the view that by changing the form of entertainment the respondents forfeited their acquired right to operate the nightclub.  With respect, I believe such a result would tilt the balance too far in favour of the municipality.  I agree with the conclusion of the unanimous Quebec Court of Appeal and would dismiss the appeal.

I.  The Issue

4                                   The facts and applicable enactments are outlined in my colleague’s reasons for judgment.  I fully agree with his rejection of the “categorical” approach.  This is the theory under which an owner, whose use of land does not conform to a new by-law, nevertheless has an “acquired right” to expand, alter or modify an existing use to include anything and everything permitted on that land under the “use category” defined in the prior law (if indeed there was a prior law).  While the “categorical” approach may produce a fair result on the facts of this case, it does so only because the categories of use created by the prior by-law were quite narrow.  The word “cabaret”, which was the operative “use” category in the previous by-law, is quite precisely defined in Le Grand Robert de la langue française (2nd ed. 1986), vol. 2, at p. 242, inter alia, as:

[translation]

2.  Establishment presenting satirical, musical or other types of entertainment where patrons may drink, dine or dance.  A Café concert; nightclub. 

and in Grand Larousse de la langue française (1971), vol. 1, at p. 551:

[translation]

2.  Small establishment presenting artistic or satiric entertainment where patrons may drink, sometimes dine, dance ....

5                                   However, as my colleague Gonthier J. demonstrates, the “categorical” approach is wrong in principle and will often deliver a result that unduly favours individual landowners at the expense of the community interest.  The protected “acquired right” properly relates only to the status quo.  It does not protect a potential or contemplated use that has never materialized.  A similar rule prevails in the common law provinces:  see Heutinck v. Oakland (Township) (1997), 42 M.P.L.R. (2d) 258 (Ont. C.A.), at para. 6:

Central to this analysis is our reliance upon the well established rule that the nature of a non-conforming use is not defined by reference to definitions in the by-law.  Rather, it must be determined by reference to the use to which the property was put at the time the by-law was passed.

To the same effect, see:  Vancouver (City of) v. Victoria Block Ltd. (1964), 45 D.L.R. (2d) 118 (B.C.C.A.), at p. 121; Glenelg (Township) v. Davis (1992), 10 M.P.L.R. (2d) 260 (Ont. C.A.); Nanaimo (City) v. Brickyard Enterprises Ltd., [1993] B.C.J. No. 992 (S.C.) (QL), at para. 20.  The acquired right is no more than a right to carry on using the land for the purpose to which it was in fact previously being put.  The issue, of course, is how widely or narrowly to circumscribe the description of the purpose of that “pre-existing use”.

II.  The Pre-Existing Use

6                                   As stated, the premises in question here have been used as a nightclub (or “cabaret”) for many years.  Such use is no longer permitted in the relevant zone under the revised provisions.  Choice of a broad definition (“nightclub”) or a narrow definition (“country and western nightclub”) of the pre-existing use will largely determine the outcome of the appeal. 

7                                   The necessity of making a careful choice of definition requires us to look realistically at the business being conducted on the premises prior to the new zoning by-law.  Nightclubs or “cabarets” constitute a fickle industry.  They rise and fall on swings of popularity.  Their operators are forever in search of a “winning formula”.  Location, we are told, is basic, but beyond that the elements of food, drink, ambiance and entertainment are endlessly varied to generate customer interest.  A few years ago, customers may have flocked to hear western singers accompanied by steak and potatoes.  Some still do.  Irish pubs usually offer Irish melodies, but may have to be transformed next season into a different ambiance offering Karaoke.  Last year’s successful disco may give way to this year’s Texas line dancers.  Land used for these purposes serves merely as a platform for a business offering a marketable mix of food, drink and lawful entertainment to the public.

8                                   The appellant takes the position that substitution of nude dancers for western singers is such an extreme variation in the nightclub or cabaret formula as to constitute a wholly different use.  I do not agree.  It is open to the municipality as a legislator to introduce such value judgments into its land use controls (as it did here under the new by-law), but I do not think the landowner’s “acquired right” to continue to carry on business can retroactively be truncated in this way on the present state of the law.

III.  The Role of Zoning

9                                   Private law has long protected adjoining owners in the enjoyment of the amenities of their land.  Article 947 of the Civil Code of Québec, S.Q. 1991, c. 64,  protects that enjoyment, as does the tort of nuisance at common law.  Thus neighbours obtained an injunction in nuisance against a tobacco factory that emitted “noxious odours” in Appleby v. Erie Tobacco Co. (1910), 22 O.L.R. 533 (Div. Ct.), and on the same basis successfully opposed the establishment of a dog hospital in a residential area in Macievich v. Anderson, [1952] 4 D.L.R. 507 (Man. C.A.).  The doctrine of Rylands v. Fletcher (1868), L.R. 3 H.L. 330, imposes virtually absolute liability on owners who bring on their land “anything likely to do mischief if it escapes” and causes damage to a neighbour, unless the escape was due to the neighbour’s default (pp. 339-40).  These private law remedies were designed, in a general sense, to protect neighbourhood amenities.

10                               The objectives of modern zoning were also accomplished to some extent by private arrangement using restrictive covenants as in Re Daly and City of Vancouver (1956), 5 D.L.R. (2d) 474 (B.C.S.C.), and building schemes as in Re Lorne Park (1913), 30 O.L.R. 289 (H.C.).  These earlier developments in the law are noted in Boykiw v. Calgary (City) Development Appeal Board (1992), 90 D.L.R. (4th) 558 (Alta. C.A.), at p. 563, and described in some detail in J. B. Milner, Community Planning (1963), at p. 357 et seq.  Initially, local government occupied itself with noxious uses, and established building standards in the interest of fire prevention and safety. 

11                               The objection to more sophisticated land use controls, when they emerged as an instrument of good government, was that they were to some extent confiscatory of the owner’s rights:  see Re Dinnick and McCallum (1913), 28 O.L.R. 52 (C.A.), at p. 58, Regina Auto Court v. Regina (City) (1958), 25 W.W.R. 167 (Sask. Q.B.), at pp. 168-69; and Canadian Occidental Petroleum Ltd. v. District of North Vancouver  (1983), 148 D.L.R. (3d) 255 (B.C.S.C.), at p. 269.

12                               To counter the concern about confiscation without compensation, lawful existing uses came to be protected under the concept of “acquired rights” both under the Civil Code in Quebec, and by judicial interpretation in the common law provinces: Toronto (City of) v. Wheeler (1912), 4 D.L.R. 352 (Ont. H.C.), per Middleton J., at p. 353:

[I]t is, I think, a sound principle that the Legislature could not have contemplated an interference with vested rights, unless the language used clearly required some other construction to be given to the enactment.

See also R. v. Howard (1884), 4 O.R. 377 (Q.B.), at p. 381, and R. v. Clark Bros. & Hughes Ltd., [1925] 1 D.L.R. 49 (Man. C.A.), at pp. 51 and 53.

13                               It is against that background that the modern regime of land use controls, with their inherent tension between the owner’s interest in putting its own property to what it regards as the optimal use and the municipality’s interest in having all of the land within its boundaries organized in a plan which it thinks will maximize the benefits and amenities for all inhabitants, should be interpreted.

IV.  The Applicable Legislation

14                               An Act Respecting Land Use Planning and Development, R.S.Q., c. A-19.1, authorizes Quebec municipalities to regulate the use of land by dividing their territories into zones to which are allocated various groups and classes of uses.  This is to be done:  [translation] “based on common characteristics of land occupation relating to volume, nuisance, compatibility, use and aesthetics” (s. 16 of the new zoning by-law).  The impact of a particular land use on neighbouring lands is clearly a key concern, which is shared by common law jurisdictions.  The loss of amenities by noise and air pollution, increased traffic, increased demands on municipal services, or other disruptions, may conveniently be referred to as “neighbourhood effects”.  The minimization of such adverse effects on surrounding owners or the community as a whole is one of the principal objectives of zoning controls.

15                               With respect to acquired rights (or legal non-conforming uses), s. 113(18) of the provincial Act allows Quebec municipalities to regulate them, prevent their substitution by other non-conforming uses, and to prohibit their extension and alteration.  The municipality may not, however, order the cessation of such uses unless they have been abandoned or interrupted for “a reasonable period” no shorter than six months.  In other words, the provincial legislation not only respects the doctrine of acquired rights, but makes it clear that municipalities must do so as well.

16                               Here the municipality did not purport to prohibit the alteration (or “modification”) of acquired rights, although it was empowered to legislate in that regard under s. 113(18)(c) of the provincial Act.  Nor, as the Court of Appeal pointed out, did it purport to suppress nude dance bars under the Cities and Towns Act, R.S.Q., c. C-19, whether under s. 414 (“decency and good morals”) or s. 410 (“general welfare in the territory of the municipality”).  We therefore do not need to decide whether such a prohibition would have been valid or effective under the existing law.

17                               Exercising its statutory powers of delegated legislation, the City of Saint-Romuald did enact zoning by-law No. 273-90, which came into force on May 22, 1991.  The appellant places weight on s. 9 of the by-law which provides:

[translation]

9.  Permitted Uses

The uses listed in the specification grid correspond to the description of uses set out in chapter IV.  A line appearing opposite a class of uses means that all principal uses in that class are permitted, to the exclusion of all other uses.  [Gonthier J.’s emphasis.]

18                               In the appellant’s submission, the underlined words constitute a specific prohibition of the respondents’ non-conforming use.  Read in that way, of course, it is a prohibition of all non-conforming uses, and if applied in derogation of acquired rights would serve to nullify them.  On this point, I prefer the view taken by the Quebec Court of Appeal that the general language of s. 9 is not sufficient to constitute an express prohibition sufficient to overcome the respondents’ acquired rights.

V.  Scope of the “Acquired Right”

19                               Under the doctrine of “acquired rights”, the respondents were not only entitled to continue to use the premises as they were when the new by-law was passed, but was given some flexibility in the operation of that use.  My colleague Gonthier J. notes that regard is to be had in such cases to “the real and reasonable expectations” of the landowner caught by changes in the zoning (para. 63 (emphasis deleted)).  Gonthier J. also acknowledges (at para. 62) that “normal evolution” may occur in some uses with the passage of time, and that “a use protected by acquired rights may be exercised more intensively (Anjou (Ville d’) v. Vanier, C.A. Montréal, No. 500-09-001305-788, J.E. 83-325; Huot v. L’Ange-Gardien (Municipalité de), [[1992] R.J.Q. 2404 (C.A.)]; Soudure Mobile D. Pilon Inc. v. Larose, [1990] R.L. 93 (C.A.)) and adapt to the demands of the market or the technology that are relevant to it (Chutes-de-la-Chaudière [(Municipalité régionale de comté des) v. Compagnie 1846-0832 Québec Inc., [1994] R.J.Q. 618 (C.A.)], at p. 624, Tourigny J.A. dissenting)”.  In my view, that is what happened here.

20                               Similar flexibility also exists at common law.  Thus in Central Jewish Institute v. City of Toronto, [1948] S.C.R. 101, a legal non-conforming use (private school) previously carried on only in part of the building was lawfully extended throughout the entire building, per Kellock J., at p. 114:

I do not think that the use made of the premises by the appellant after the school term recommenced in September was for a different purpose within the meaning of the statute from the use being made of them on July 24th.  [Emphasis added.]

21                               At this point, a distinction should be drawn between the type of legal non-conforming use and the intensity of such use.  A legal non-conforming nursing home, for example, may want to double its 15 beds.  The type of use would remain the same, but the intensity of that use would be substantially increased.

A.  Intensity of Use

22                               The respondents’ nightclub has substantially increased its business since switching from cowboy singers to nude dancers.  There are more customers.  More cars.  More noise.  Assuming for the moment that the “type” of use has not changed, is this increased intensity of use a basis for objection? 

23                               In Central Jewish Institute, supra, this Court concluded that so long as the type of use was continued (private school facilities), the owner was not limited to the then existing intensity (at the relevant time only the kitchen and a ground floor room of the building were used for school purposes).  Rather, the appellant was entitled to expand the non-conforming use throughout its building.  To some extent, the Court’s treatment of intensity of use was tied to the specific text of the provincial Act (which extended the immunity to the building itself), but the case has subsequently been applied more generally (I think correctly) to sanction increases in intensity of use so long as the same type of use is continued.  My colleague, Gonthier J., has referred to the Quebec authorities.  A similar principle operates in the common law provinces:  see Canadian Occidental Petroleum, supra, at p. 268 (expanded manufacture of hazardous substances); O’Sullivan Funeral Home Ltd. v. City of Sault Ste. Marie, [1961] O.R. 413 (H.C.) (infrequent use of a funeral parlour no bar to expanded activity); Kiss v. Phil Dennis Enterprises Ltd. (1974), 46 D.L.R. (3d) 196 (Ont. H.C.) (where, at p. 202, the court noted approvingly that “the proposed change is one of degree, and not of kind of use”); Perth (Town) v. Perth Mews Ltd. (1991), 7 M.P.L.R. (2d) 259 (Ont. Ct. (Gen. Div.)) (the legal non-conforming right to use pinball machines in one part of the building was extended to all of it); Magdalena’s Rest Home Ltd. v. Etobicoke (City) (1992), 12 M.P.L.R. (2d) 316 (Ont. Ct. (Gen. Div.)) (rest home expanded from 15 to 17 beds); Moncton  (City) v. Como (1990), 103 N.B.R. (2d) 286 (Q.B.) (expansion of existing equipment storage and repair business); Borins v. Toronto (City) (1988), 50 R.P.R. 43 (Ont. Dist. Ct.) (conversion of office space); 382671 Ontario Ltd. v. London (City) Chief Building Official (1996), 32 M.P.L.R. (2d) 1 (Ont. Ct. (Gen. Div.)) (addition of a unit in an apartment building). 

24                               There are, however, some limitations at the outer boundaries of increasing the intensity of use.  This appears from the decision of Cory J.A. (as he then was) in R. v. Grant (1983), 23 M.P.L.R. 89 (Ont. C.A.), where the court refused to allow a legal non-conforming two-unit apartment building to be further subdivided into four units.  While the precise result may to some extent conflict with this Court’s decision in Central Jewish Institute, supra (which was not cited by Cory J.A.), even Central Jewish Institute proceeded on the basis that the expansion of school activity would be reasonable and limited – in that particular case limited to the existing building.

25                               In general, merely continuing the precise pre-existing activity, even at an intensified level, is clearly protected, but the intensification may be of such a degree as to create a difference in kind.  A family farm which has a few pigs on the fringe of a town may continue as a legal non-conforming use, but the result may be otherwise if it is sought to expand its pork operation into “factory in the country” type intensive pig farming.  While in one sense the “use” has continued, in another sense its character has been so altered as to become, in terms of its impact on the community, an altogether different use.

26                               In the more usual type of situation, a non-conforming commercial use in a residential neighbourhood that enjoys increasing business should not ordinarily be penalized for its success by losing its “acquired right” to operate, even if a by-product of that success is some increased traffic and noise. 

27                               The analogous U.S. principle is succinctly stated in McQuillin, The Law of Municipal Corporations (3rd ed. rev. 1994), vol. 8A, at p. 126:

The distinction is between an increase in the amount of business, even a great increase, which does not work a change in use, and an enlargement of a nonconforming business so as to be different in kind in its effect on the neighborhood.  [Emphasis added.]

28                               This is a high threshold which it is unnecessary to explore on this appeal.  Based on the evidence here, no valid objection could be taken to the respondents’ nightclub based on increased intensity of use.

B.  Type of Use

29                               The appellant argues that a nightclub offering western music is a different type of use than a nightclub presenting nude dancers.  This is the real battleground between the appellant and the respondents. 

30                               A “use” may include a number of activities.  A nightclub, as stated, serves food and drink and provides entertainment.  The question here is how many of these activities, and of what nature, can be added, subtracted or modified before it can no longer be called the same “type” of use?

31                               In Regina ex rel. Skimmings v. Cappy (1952), 103 C.C.C. 25 (Ont. C.A.), Oakwood Stadium in Toronto, a general venue for sports activities, was modified to accommodate stock car racing.  The neighbours complained about the increased noise and disruption.  The municipality launched a by-law prosecution.  The stadium owners defended on the basis of a legal non-conforming use.  The majority of the Court of Appeal, per Laidlaw J.A., acquitted the stadium owners on the basis that they operated a “general purpose” stadium whose permissible program (which presumably accorded with the owners’ “real and natural expectation”) was not limited to the type of specific events on “the day of the passing of the by-law” but included “public exhibitions and performances of all kinds” (p. 32).  The dissenting judge concluded that the pre-existing use had been limited to certain types of exhibitions and performances, and stock car racing was obviously not included because the owners had been required to undertake a “substantial expenditure of money and complete reconstruction of the facilities so as to enable motor-racing to be carried on” (p. 29).  The interesting question is why the majority took a broad view of the existing use and the dissent took a narrow view.  Both of these views were sustainable on the facts.  The majority seemed influenced by the idea of remoteness, i.e., that the new activity, while different, was not remote but was closely related to what had gone before.  Although “neighbourhood effects” were not mentioned by the dissenting judge, I think it fair to say that if the facts were reversed so that the stadium had been reconstructed to eliminate stock car racing in favour of less noisy exhibitions such as walk-a-thons or lawn tennis, the neighbours (and the dissenting judge) might have taken a more expansive view of the pre-existing use.

32                               The more recent common law jurisprudence on “non-conforming uses” is no less divided than the Quebec jurisprudence on “acquired rights”:  see I. T. Kagan, “But I Do Not Want to Be Legal” (1993), 13 M.P.L.R. (2d) 252.  The more restricted end of the definitional spectrum is illustrated by R. v. Kelly Landscape Contractors Ltd. (1980), 13 M.P.L.R. 67 (Ont. Co. Ct.), where it was held that a legal non-conforming business which grew flowers for sale could not lawfully sell the flowers (or fertilizers, etc.) from its premises.  The added business, while closely related, was not the same.

33                               The more generous end of the definitional spectrum is illustrated by Campbellton (City) v. Thompson  (1994), 151 N.B.R. (2d) 1 (C.A.), where a landowner was permitted to add a rock-crusher to its existing non-conforming quarry operation.  The trial judge had concluded that crushing rock was a different activity than extraction, and upheld the municipality’s objection.  This was reversed by the Court of Appeal which applied its previous decision in Lordon v. Pitman (1980), 33 N.B.R. (2d) 23, in asking itself whether the introduction of the “new element” changed “the essential general use of the land” (para. 10).  The added activity, it decided, did not do so.  Again, the trial judge’s narrower view of the pre-existing use (extraction and sale of rock) was as open on the facts as the broader view taken by the Court of Appeal (a quarry operation includes an activity reasonably incidental thereto).  The trial judge was worried about the neighbourhood effects of the added activity.  The Court of Appeal seems to have decided the case on considerations of remoteness.

34                               In my view, both remoteness and neighbourhood effects have a role to play in the proper disposition of this type of case.  Each contributes to what Gonthier J. refers to as the real and natural expectation of the landowner.  The Court’s objective is to maintain a fair balance between the individual landowner’s interest and the community’s interest.  The landowner overreaches itself if (i) the scale or intensity of the activity can be said to bring about a change in the type of use, as mentioned above, or if (ii) the addition of new activities or the modification of old activities (albeit within the same general land use purpose), is seen by the court as too remote from the earlier activities to be entitled to protection, or if (iii) the new or modified activities can be shown to create undue additional or aggravated problems for the municipality, the local authorities, or the neighbours, as compared with what went before.  The factors are balanced against one another.  Thus, adding a metal panel beating operation to an automobile repair shop in a residential neighbourhood will probably (despite the logical business affinity) be characterized as a new type of use, whereas a local non-conforming grocer store use that adds an innocuous fax machine – clearly an activity unrelated to selling groceries – will likely succeed (assuming someone wished to challenge it) by defining its prior operation as a “convenience store” rather than a “grocery store”.

35                               The relevance of remoteness is self-explanatory, but the relevance of neighbourhood effects perhaps requires some discussion.  The balancing of interests takes place in the framework of zoning control.  The Quebec law, as mentioned, expressly takes neighbourhood effects into account in the legislative establishment of use categories.  The by-law in this particular case speaks of [translation] “volume, nuisance, compatibility, use and aesthetics”, and see Val-d’Or (Ville de) v. 2550-9613 Québec Inc., [1997] R.J.Q. 2090 (C.A.)).  It stands to reason that in attempting to accommodate the landowner’s real and natural expectation of the continuation of the status quo, and to properly maintain the balance between the interests of the landowner and the community, the Court should also have these “neighbourhood effects” in mind in considering the situation of a landowner who has somewhat modified or extended pre-existing activities within the same general use category.  The adverse impact of neighbourhood effects generated by added or modified activities constitutes one of the guiding principles under the somewhat different regulatory systems in Britain (see, for example, East Barnet Urban District Council v. British Transport Commission, [1962] 2 Q.B. 484, and Thames Heliports PLC v. London Borough of Tower Hamlets (1996), 74 P. & C.R. 164 (C.A.), and in the United States (see Bridgewater (Town of) v. Chuckran, 217 N.E. 2d 726 (Mass. 1966), at pp. 727-28, Conforti v. City of Manchester, 677 A.2d 147 (N.H. 1996), at p. 150, Belleville (Town of) v. Parrillo’s Inc., 416 A.2d 388 (N.J. 1980), and Cape Resort Hotels, Inc. v. Alcoholic Licensing Board of Falmouth, 431 N.E.2d 213 (Mass. 1982), at p. 217).  In those jurisdictions, as in Canada, planning is concerned not only with the physical use of land but also with any adverse effects of such uses on the surrounding area.  It is appropriate to carry that concern forward into the Court’s consideration of added, altered or modified activities which are claimed to be protected by the prior existing use. 

36                               This approach is implicit in some of the Quebec cases.  In  Soudure Mobile D. Pilon Inc. v. Larose, [1990] R.L. 93 (C.A.), the repair of cars was the legal non-conforming use on the original lots.  The owner then intensified this use, in part by extending it to a newly acquired adjacent lot (one which had not previously been used for car repairs).  In addition, the owner began to store snow plowing and excavation vehicles on the property.  The court issued an order essentially restricting the intensity of the activity and prohibiting the storage of the snow plowing and excavation vehicles.  Beauregard J.A. – who dissented in part but not on this point –  demonstrated his awareness, at pp. 105-6, of the impact of the increased activity on the complainant neighbours:

[translation]  The neighbours, who had never really been bothered by the Laurentide operation, soon realized that the Soudure Mobile operation was causing a variety of problems for them:  continual comings and goings on the site, excessive noise; word done outside normal business hours and on weekends; accumulation of garbage on the property; storing and cutting of wood on the property; repairs done outside the workshop building; using the property for parking heavy equipment that belonged to a logging company and a  snow removal company; using an adjacent lot (lot 488-49) that did not enjoy “acquired rights” for additional parking, and clearing the property of trees that had served as a screen between the workshop and some of the neighbouring homes . . . .

Thus neighbourhood effects appear to have been factored into the view taken by Beauregard J.A. that the current property use was not fully protected by acquired rights.  This seems also to be the underlying factor in the decision of Chamberland J.A. in Val-d’Or (Ville de) v. 2550-9613 Québec Inc., supra, quoted by Gonthier J. at para. 82.

37                               A concern for the twin criteria of remoteness and neighbourhood effects is also, I think, implicit in Prince Edward Island Museum and Heritage Foundation v. Charlottetown (City) (1998), 161 Nfld. & P.E.I.R. 56 (P.E.I.S.C.).  A museum and heritage foundation had for many years used its parcel of land, which included several buildings, for museum-related activities.  In 1979, its operation became a legal non-conforming use.  Subsequently, the owners began to expand the activities in one of the buildings (“the Carriage House”) to include receptions and dinners catered by a local hotel.  Some of these soirées were for fundraising purposes.  The neighbours objected to the added noise and commotion.  Notwithstanding the owner’s ingenious efforts to tie its hospitality activities to museum functions (e.g., it argued it would “make heritage more palatable by concealing it in another activity such as a concert” (para. 15)), DesRoches J. concluded that the hospitality functions were too remote from the prior non-conforming use to be permitted.

38                               At the same time, though, he permitted other added or altered museum activities, including a gift shop, a genealogy centre for research and facilities for public lectures.  Although the rationale is not articulated in his reasons, it is apparent that the activities he upheld created fewer adverse neighbourhood effects than those he found to be prohibited, and were, indeed, not the subject of public complaint. 

C.  Summary of Approach

39                               I therefore approach the issue of limitations on the respondents’ acquired right as follows:

1.                It is firstly necessary to characterize the purpose of the pre-existing use (Central Jewish Institute, supra).  The purpose for which the premises were used (i.e., “the use”) is a function of the activities actually carried on at the site prior to the new by-law restrictions.

2.                Where the current use is merely an intensification of the pre-existing activity, it will rarely be open to objection.  However, where the intensification is such as to go beyond a matter of degree and constitutes, in terms of community impact, a difference in kind (as in the hypothetical case of the pig farm discussed above), the protection may be lost.

3.                To the extent a landowner expands its activities beyond those it engaged in before (as where a custom picture-framing shop attempted to add a landscaping business in Nepean (City) v. D’Angelo (1998), 49 M.P.L.R. (2d) 243 (Ont. Ct. (Gen. Div.)), the added activities may be held to be too remote from the earlier activities to be protected under the non-conforming use.  In such a case, the added activities are simply outside any fair definition of the pre-existing use and it is unnecessary to evaluate “neighbourhood effects”.

4.                To the extent activities are added, altered or modified within the scope of the original purpose (i.e., activities that are ancillary to, or closely related to, the pre-existing activities), the Court has to balance the landowner’s interest against the community interest, taking into account the nature of the pre-existing use (e.g., the degree to which it clashes with surrounding land uses), the degree of remoteness (the closer to the original activity, the more unassailable the acquired right) and the new or aggravated neighbourhood effects (e.g., the addition of a rock crusher in a residential neighbourhood is likely to be more disruptive than the addition of a fax machine).  The greater the disruption, the more tightly drawn will be the definition of the pre-existing use or acquired right.  This approach does not rob the landowner of an entitlement.  By definition, the limitation applies only to added, altered or modified activities.

5.                Neighbourhood effects, unless obvious, should not be assumed but should be established by evidence if they are to be relied upon.

6.                The resulting characterization of the acquired right (or legal non-conforming use) should not be so general as to liberate the owner from the constraints of what he actually did, and not be so narrow as to rob him of some flexibility in the reasonable evolution of prior activities.  The degree of this flexibility may vary with the type of use.  Here, for example, the pre-existing use is a nightclub business which in its nature requires renewal and change.  That change, within reasonable limits, should be accommodated. 

7.                While the definition of the acquired right will always have an element of subjective judgment, the criteria mentioned above constitute an attempt to ground the Court’s decision in the objective facts.  The outcome of the characterization analysis should not turn on personal value judgments, such as whether nude dancing is more or less deplorable than cowboy singing.  I am unable, with respect, to accept as legally relevant my colleague’s observation that “[w]hereas erotic entertainment seeks to sexually arouse the audience by the stripping and suggestive behaviour engaged in by the performers, country and western shows seek to entertain by providing a showcase for the special talents of singers, musicians and dancers” (para. 76).  Serious music is also commonly thought to arouse the passions profoundly, but in terms of acquired rights, music stores should not be differentiated by whether they offer Muzak or Mozart.

VI.  Application to the Facts

40                               As stated earlier, I believe the respondents’ pre-existing use can appropriately be characterized as the commercial offering of a combination of food, drink, ambiance and lawful entertainment to the public.

41                               The switch to a different form of entertainment, as in the change from western-style concerts to nude dancers, is within this general nightclub purpose.  The substitution of nude dancers is no more remote in law than would be the substitution of karaoke singing.  My colleague Gonthier J. takes the view that nude dancing raises “considerations of a moral nature” (para. 77) that presumably would not be raised by karaoke singing, but in my view, with respect, it is not our function to create a moral hierarchy of different forms of entertainment.  Objectively speaking, there is no problem of remoteness.  There is no replacement of one use by a different use.

42                               While it appears that the substitution of nude dancing has improved the business, the municipality does not rely on an intensification of the existing use as a disqualification.

43                               There is no serious evidence of adverse neighbourhood effects.  My colleague Gonthier J. relies on the comment of Constable Gelly about increased police surveillance, but the municipality made no effort to demonstrate a link between criminal elements and nude dancing.  The police themselves did not make much of a point of added surveillance and the trial judge went out of his way to say that there was no problem of discipline within the premises.  In my view, if the appellant’s case were to rest on adverse neighbourhood effects, a better evidentiary base ought to have been provided.

44                               In terms of  “added” activities, my colleague Gonthier J. points out that the respondents created five private viewing booths in which a customer and the dancer were distanced from the general audience.  This, he points out, is a form of private entertainment.  The uncontradicted evidence, however, was that there was no sexual touching and that nothing occurred in the booth that did not occur in the general viewing area.  Admission to the booths was open to any member of the public.  Morality apart, I do not see how this changes the legal nature of the use, any more than would be the case if an ordinary restaurant sought to upgrade its facilities by offering private dining-rooms.

VII.  Conclusion

45                               In my view, the change in entertainment offered by the respondents did not constitute the illegal replacement of the original non-conforming use with a different and therefore unprotected non-conforming use.

46                               If nude dancing is thought to be objectionable on moral or other grounds, the topic could be further considered by legislators rather than by judicial curtailment of acquired rights.

47                               I would therefore dismiss the appeal with costs to the respondents.

English version of the reasons of L’Heureux-Dubé, Gonthier and Bastarache  JJ. delivered by

Gonthier J.  (dissenting) —

I.  Introduction

48                               This appeal deals primarily with the extent of the protection conferred by acquired rights in Quebec municipal law.  The issue to be determined is the limits of the protection where the use initially exercised has been transformed.  Specifically, the Court must decide in the instant case whether acquired rights continue to exist when a bar that had been presenting country and western entertainment subsequently becomes a bar that presents erotic entertainment.

II.  Facts

49                               The respondents Claudette Olivier, Louise Bolduc and Roger Bolduc are owners of a building located within the territory of the appellant City of Saint-Romuald.  Since 1990, several tenants in succession have operated a bar in the building, presenting country and western entertainment.  At the time, the City’s zoning by-law (C‑600) permitted the operation of  [translation] “cabarets” in the zone where the building is located.  However, a new zoning by-law, No. 273‑90, came into force on May 22, 1991.  Like a number of other by-laws of its type, it sets out the authorized and prohibited uses for a given zone, using a grid known as the [translation] “specifications grid” (s. 7).  Different uses are first divided into “groups” and then into “classes”.  Uses are allocated to the various classes [translation] “based on common characteristics of land occupation relating to volume, nuisance, compatibility, use and aesthetics” (s. 16).  This type of classification enables the City to authorize or to prohibit an entire class of uses or a specific use, at its option.  To this end, ss. 9 to 11 of the by-law state:

[translation]

9.    Permitted Uses

The uses listed in the specifications grid correspond to the description of uses set out in chapter IV.  A line appearing opposite a class of uses means that all principal uses in that class are permitted, to the exclusion of all other uses.  [Emphasis added.]

10.  Other Permitted Use

Where a principal use is specifically permitted, this means that even if the class corresponding to that use is not permitted, that particular use is permitted.

11.  Prohibited Use

Where a principal use is specifically prohibited, this means that even if the class corresponding to that use is authorized, that particular use is prohibited.

50                               In the new by-law, uses [translation] “restaurant or bar with entertainment” (585) and [translation] “restaurant or bar with erotic entertainment or films” (586) — which correspond to the former use “cabaret” — are in the [translation] “commercial services” class (s. 22).  For the zone in which the building is located, there is no line opposite “commercial services” on the specifications grid.  Moreover, uses 585 and 586 are not shown on the grid as expressly permitted.  Although use [translation] “hotel, motel, guest house” (181) is also part of the “commercial services” class, it is shown on the grid as expressly prohibited. The new by-law also governs the issue of acquired rights, in part.  It specifically provides, inter alia, that a non-conforming use protected by acquired rights may not be replaced by another non-conforming use (s. 204).

51                               In the fall of 1994, after buying out the business from the owner of the country and western bar, the respondent 9010-4407 Québec Inc. began operating a bar which presented entertainment involving nude dancers.  The appellant then decided to apply to the Superior Court under s. 227 of the Act Respecting Land Use Planning and Development, R.S.Q., c. A‑19.1, for an order requiring the cessation of what it regarded as the unlawful replacement of one non-conforming use by another.

III.  Relevant Statutory Provisions

52                      Act Respecting Land Use Planning and Development, R.S.Q., c. A-19.1

CHAPTER IV

MUNICIPAL PLANNING BY-LAWS

DIVISION I

ZONING BY-LAWS

113.  The council of a municipality may adopt a zoning by-law for its whole territory or any part thereof.

A zoning by-law may include provisions regarding one or more of the following objects:

                                                                    . . .

(3)  to specify, for each zone, the structures and uses that are authorized and those that are prohibited, including public uses and buildings, and the land occupation densities;

                                                                    . . .

(18)  to regulate non-conforming structures and uses protected by acquired rights,

(a)  by requiring that a non-conforming use protected by acquired rights cease if such use has been abandoned, has ceased or has been interrupted for such period of time as it may define, which must be a reasonable period, taking into account the nature of the use, but must not in any case be shorter than six months;

(b)  by stipulating that a non-conforming use or structure protected by acquired rights shall not be replaced by another non-conforming use or structure;

(c)  by prohibiting the extension or alteration of a non-conforming use or structure protected by acquired rights, or by establishing conditions under which a non-conforming use or structure protected by acquired rights may be extended or altered; [Emphasis added.]

TITLE III

SANCTIONS AND RECOURSES

227.  The Superior Court may, at the request of the Attorney General, the regional county municipality, the municipality or any other interested person, order the cessation of

(1)  a use of land or structure incompatible with a zoning by-law, subdivision by-law, building by-law, a by-law provided for in section 116 or 145.21 or an interim control by-law, or with a plan approved in accordance with section 145.19 or with an agreement under section 145.21;

IV.  Judgments under Appeal

A.  Superior Court

53                   Bergeron J. relied on the Quebec Court of Appeal decision in Chutes‑de‑la‑Chaudière (Municipalité régionale de comté des) v. Compagnie 1846-0832 Québec Inc., [1994] R.J.Q. 618, in which Baudouin J.A. held that in zoning matters, where the issue is whether there has been a change in use, the reference point to be used is the categories created by the enacting authority.  Bergeron J. added that in this case, three of the four judges found in favour of preserving an acquired right where the new use was not specifically prohibited and where it was in the same category under the by-law as the prior use.

54                   Applying these principles to the case between the parties, he held: (i) that the respondents enjoyed acquired rights to operate a “cabaret”; (ii) that a bar that presents entertainment with erotic dancers is a cabaret; and (iii) that neither the Cities and Towns Act, R.S.Q., c. C-19, nor the new by-law expressly prohibits entertainment with erotic dancers.  He therefore dismissed the City’s application.

B.                    Court of Appeal (Michaud C.J.Q. and LeBel and Dussault JJ.A.), [1999] Q.J. No. 215 (QL)

55                   The court agreed, per Dussault J.A., with the trial judge’s finding that the extent of the acquired rights is determined by the categories set out in the by-law.  Like the trial judge, he was therefore of the view that, absent an express prohibition in the new by-law, the respondents enjoyed an acquired right to operate a “cabaret”.

56                   After reviewing the specifications grid, Dussault J.A. found that although no line had been entered opposite the “commercial services” category, which meant that the principal uses in that class were not permitted, nonetheless use “restaurant or bar with erotic entertainment or films” (586) was not shown on the grid as expressly prohibited. There was nothing to prevent the municipality from enacting such a prohibition; in fact, it had expressly prohibited the use “hotel, motel, guest house” (181) which is part of the same class.  Stating that this factor was [translation] “a decisive factor in the outcome of the case” (para. 17), Dussault J.A dismissed the municipality’s appeal.

V.  Issues

57                   The issues are as follows:

A.  What is the extent of the protection conferred by acquired rights in municipal zoning matters?

B.  Is the change from a bar that presents country and western entertainment to a bar that presents erotic entertainment a replacement of one non-conforming use by another, resulting in the loss of acquired rights?

VI.  Analysis

A.  Acquired Rights

58                   Quebec municipal law is based both on the principles developed by the common law courts and on the relevant provincial legislation.  We also know that the rules governing the protection of acquired rights vis-à-vis land use by-laws were first developed by the courts and that the law was later “codified”, to some extent, by the Act Respecting Land Use Planning and Development, s. 113 of which refers to “acquired rights”.

59                   The protection conferred by acquired rights reflects a compromise between the principle that a statute takes immediate effect and the rights of ownership, as pointed out by Chouinard J.A. of the Quebec Court of Appeal in Huot v. L’Ange-Gardien (Municipalité de), [1992] R.J.Q. 2404, at p. 2409:

[translation]  Although it is not easy to define “ acquired rights” with precision, let us say that it is a necessary compromise that limits rational land development while protecting the equity of the property owners and possibly of others who have made some non-conforming but legal and legitimate use prior to a statute or regulation.

60                   If these rights were not recognized, the provisions of the municipality’s land use by-law would apply in their entirety, without regard for whatever use of the land had been exercised prior to the by-law coming into force.  If the use  being made of the land were to be prohibited, the user would be unjustly deprived of the tangible exercise of his or her rights of ownership by the stroke of a pen.

61                   Acquired rights therefore confer immunity on the actual use being exercised before the change to the by-law, while merely contemplated use will not enjoy the same immunity  (E. McQuillin, The Law of Municipal Corporations (3rd  ed. rev.), vol. 8A, at p. 37; Toronto v. Board of Trustees of R.C. Separate Schools for Toronto, [1925] 3 D.L.R. 880 (P.C.); Central Jewish Institute v. City of Toronto, [1948] S.C.R. 101).  This distinction between a prior actual use and a potential use that has not yet materialized, between a right that exists and is being exercised and a mere ability, is a decisive factor in delineating acquired rights in municipal zoning matters.  The distinction has in fact been recognized many times by the Quebec courts (see, in particular, Syndics des écoles protestantes de la Cité d’Outremont v. Cité d’Outremont, [1951] Que. K.B. 676, and Lafontaine (Municipalité du Village) v. Ouellette, [1976] C.S. 1488, referring to Toronto v. Board of Trustees and Central Jewish Institute, supra; see also Montréal (Ville de) v. Bijouterie Lucien Gervais Inc., [1981] J.M. 21 (C.A.), and Bernard v. Belœil (Ville de), C.A. Montréal, No. 500-09-000857-896, November 29,1990, J.E. 91-20).

62                   This does not mean, however, that the doctrine of acquired rights fails to take into account the normal evolution that will occur in some uses with the passage of time.  Accordingly, a use protected by acquired rights may be exercised more intensively (Anjou (Ville d’) v. Vanier, C.A. Montréal, No. 500-09-001305-788, J.E. 83-325; Huot v. L’Ange-Gardien (Municipalité de), supra;  Soudure Mobile D. Pilon Inc. v. Larose, [1990] R.L. 93 (C.A.)) and adapt to the demands of the market or the technology that are relevant to it (Chutes‑de-la-Chaudière, supra, at p. 624, Tourigny J.A. dissenting).  However, its original nature must always remain the same.

63                   If the use undertaken after the change to the by-law is of the same nature as the actual use under the former by-law, it will be protected by acquired rights.  If, on the other hand, it is even minimally different, the protection will be lost.  That is, I reiterate, because any use that has not yet materialized must, as a general rule, be excluded from the sphere protected by acquired rights.  Therefore, in order to determine whether the nature of the use has changed, the use that was actually exercised prior to the prohibition created by the by-law must first be precisely defined.  Based on that preliminary determination, the real and reasonable expectations flowing naturally from the exercise of that concrete use can be taken into account.  On that point, in Syndics des écoles protestantes de la Cité d’Outremont, supra, at p. 692, Bissonnette J. held:

[translation] It is well known that acquired rights are part of our patrimony and cannot be taken away without causing a grave injustice and depriving us of what we had a right to expect in their regard.  In order to know and understand the extent of these rights, we need only ask what the real and natural expectation of the school board was prior to 1925, before the municipal by-law was enacted.  [Emphasis added.]

64                   While this part of the analysis of the nature of the use relates mainly to the protection of individual rights of ownership, it will also have to be determined whether the changes in the use of the land are relevant, having regard to the primary purposes of zoning by-laws, such as harmonious land development and the well-being of the inhabitants (McQuillin, supra, at p. 99).  An affirmative response to this question will tend to demonstrate that the nature of the protected use has been altered and will mean the loss of the acquired rights.  In my view, this approach allows a balance to be struck between individual rights and the collective interests that the zoning by-law is designed to further.

65                   In addition, although s. 113 of the Act Respecting Land Use Planning and Development allows municipalities to regulate certain aspects of acquired rights, it is still up to the courts to determine whether those rights are lost when an initial prohibited use is replaced by a different prohibited use.  Because that question, by its very nature, can arise only out of a precise fact situation, only a court will be in a position to resolve it.  A municipality may of course decide to override the protection provided by acquired rights by passing a by-law for that express purpose.  Very different questions will then arise.  In this case, however, the only question that is presented is whether one use has been replaced by another, and it is inevitably up to the courts to determine the outcome of that question.

66                   That being said, it is then apparent that the lower courts erred in suggesting that acquired rights must be determined on the basis of categories or classes of uses created by by-laws.  The approach taken by those courts derives from the reasons of Baudouin and Proulx JJ.A. in Chutes-de-la-Chaudière, supra.  In that case, the issue was whether there had been a loss of acquired rights when the protected use, the manufacture of heating systems, boilers and burners, had subsequently been replaced by the manufacture of prefabricated sections of acrylic polymer concrete.  In the meantime, any industrial use had been prohibited by the Regional County Municipality’s interim control by-law.  That by-law, and documents from the municipal affairs department, grouped those two uses together in the same categories, that is, in [translation] “metal product manufacturing industries” and [translation] “manufacturing industries”.  Noting how strict the Quebec courts are on the question of protecting acquired rights, Baudouin J.A. held (at p. 625):

[translation] . . .  while that strict approach can be understood where there is no statute or by-law governing the matter, it seems to me that the situation must be different when the enacting authority has specifically provided rules dealing with acquired rights and changes in use.  I am then of the view that reference must be made to the statute or by-law itself.  [Emphasis added.]

67                   Concurring with this analysis, Proulx J.A. was of the view that the earlier case law, which applied the test of the nature of the operation or the type of product manufactured, could not be applied because the context of the by-law had to be considered in order to interpret the word “use”.  Tourigny J.A., dissenting, rejected that methodology, stating that she was in favour of holding to a factual analysis.

68                   This approach, which I would describe as the “category” approach for the purposes of this discussion, suggests that the protection conferred by acquired rights extends to any use included in the by-law category to which the use exercised prior to the change in the by-law belongs.  Accordingly, the implementation of one use would trigger a protection that extends to all potential uses included in the same category.  It seems plain to me that this analysis misses the mark because it deviates from the factual source from which the protection of the acquired rights derives.  Although s. 113, para. 18 of the Act Respecting Land Use Planning and Development delegates to municipalities the power to make certain rules concerning acquired rights, that provision cannot have operated to change the very nature of these rights.  Rather, the judicial definition of those rights has been recognized and incorporated by the legislature.

69                   Moreover, in the absence of any previous zoning by-law, it seems to me that this approach cannot be used to determine the extent of acquired rights.  In that situation, we must either fall back on the traditional concrete analysis or recognize acquired rights to whatever use is being exercised on the land, which will make any attempt at land use planning quite futile.  Even if a prior by-law exists, the “category” analysis automatically, and without applying any other consideration, uses categories created for a specific purpose (establishing authorized and prohibited uses for a part of a territory) for a completely different purpose (determining the protection conferred by acquired rights).  Relying on categories such as these, which are sometimes overly general or even residual, creates a risk both of granting disproportionate protection to those who enjoy the acquired rights and significantly fettering municipal planning powers.  Tourigny J.A. sounded that warning in Chutes-de-la-Chaudière, supra, at p. 624, when she observed:

[translation]  If we review the list drawn up by the Department, we find, for example, that group 39 is entitled “miscellaneous manufacturing industries”.  I cannot imagine that a category such as this can confer any  right whatsoever, in terms of determining identity of use, or that someone can claim to have acquired rights based on belonging to a sub-group that is described so vaguely and is so insignificant.

The provisions of the interim control by-law classifying industries have been enacted so that permits may be issued in zones where industrial use is permitted.  In my view, therefore, this classification also cannot be the basis for claiming identity of use for the purpose of establishing acquired rights in zones where the use is non-conforming.

70                   In general, those comments reflect the criticism of the “category” analysis made by Professor Lorne Giroux in his article “Questions controversées en matière de droits acquis” published in Développements récents en droit municipal (1994), 131, at pp. 148‑52 (see also Girard v. St-Irénée (Municipalité de), [2000] R.J.Q. 2689 (Sup. Ct.)).

71                   In the instant case, the lower courts first recognized, based on the “category” analysis, that the respondents enjoyed acquired rights to operate a “cabaret”, and then went on to consider whether bars that present erotic entertainment were expressly prohibited by the new zoning by-law.  In my view, the requirement for such an express prohibition is unnecessary, since it is based directly on the erroneous use of abstract categories to determine the extent of the protection conferred by acquired rights.

72                   In any event, after reviewing the specifications grid for the zone in question, I am satisfied that the appellant in fact prohibited uses “restaurant or bar with entertainment” (585) and “restaurant or bar with erotic entertainment or films” (586) by refraining from inserting a line opposite the “commercial services” class.   In fact, in St-Michel-Archange (Municipalité de) v. 2419-6388 Québec Inc., [1992] R.J.Q. 875, at p. 883, the Quebec Court of Appeal held:

[translation] Although the Act Respecting Land and Use Planning and Development requires municipal corporations to provide for authorized and prohibited uses in each zone within the municipality, it does not require a zone by zone listing of all prohibited uses.  The exercise of the power to prohibit may be exercized by implication, if certain authorized uses are listed, or expressly, if specific uses are prohibited.

73                   Both the respondents and Dussault J.A., for the Court of Appeal, observed that use “hotel, motel, guest house” (181) is expressly prohibited on the grid, although it belongs to the same class.  They concluded that if the municipality had really wanted to prevent establishments that present erotic entertainment from being protected by acquired rights, it could have done the same thing in respect of use 586.  It seems, however, that the specific prohibition of use 181 only became necessary because of the express authorization of use [translation] “restaurants and places where meals and beverages are served” (581), which could have been relied on as authority to operate a hotel, motel or guest house.  Accordingly, the fact that this was specified leaves no room for an interpretation a contrario of the by-law, whereby the appellant would be required to expressly isolate use 586 in order to prohibit it.

74                   Since I am satisfied that zoning by-law 273-90 prohibits uses 585 and 586, the issue that remains to be determined is whether replacing a country and western bar by a bar that presents erotic entertainment constitutes the replacement of a non-conforming use by another non-confirming use, which is prohibited by both the doctrine of acquired rights and s. 204 of the appellant’s zoning by-law.

B.  Replacement of Use

75                   As indicated above, a change in the nature of the use actually made prior to the zoning amendment will result in loss of the immunity conferred by acquired rights.  Whether such a change has occurred must be determined on the basis of the real and natural expectations of the user and the relevance of the changes as regards the purposes of land use by-laws.  Nevertheless, each case turns on its own facts and the nature of the use protected by acquired rights must be determined by the court having regard to the unique facts of each situation.

76                   In the instant case, a country and western bar was replaced by a bar that presented erotic entertainment.  The respondents contend that the building has never housed anything but a bar with entertainment and that the nature of the entertainment provided should not have any effect on acquired rights.  With respect, I am unable to agree with that assertion.  First, I do not believe that the real and natural expectations of the owner of a country and western bar include operating a bar with nude dancers.  There is a significant prima facie difference in the nature of the entertainment being presented.  Whereas erotic entertainment seeks to sexually arouse the audience by the stripping and suggestive behaviour engaged in by the performers, country and western shows seek to entertain by providing a showcase for the special talents of singers, musicians or dancers.  That difference is further apparent in some of the physical alterations made to the building and the business it houses because of the transformation from a country and western bar to a bar with nude dancers.  Among other things, five closed booths were added so that customers could be offered erotic dances in a private setting.  I further find it relevant to note the contrast between private dances performed in booths and country and western entertainment presented in public.  In my view, these factors provide further support for the impression that one use has indeed been replaced by another, rather than that the same use has been continued.

77                   The foregoing exercise therefore plainly leads me to finding that there is an obvious difference between a bar that presents country and western entertainment and a bar that presents erotic entertainment, even if we disregard individual opinion about the moral value of erotic entertainment.  However, that distinction becomes even more germane when we examine it with the objectives of harmonious development and welfare, which land use legislation is intended to advance, in mind.  Efforts to advance those objectives may indeed be informed by considerations of a moral nature, as long as those considerations relate to the primary purposes of the by­-laws.  For example, it would obviously be proper, for the purposes of those by-laws, to distinguish between establishments that serve liquor and establishments that do not.  A fortiori, it should be apparent that there is a fundamental difference between an establishment that presents country and western entertainment and another establishment that presents entertainment of an erotic nature. As well, the observation that both types of entertainment are legal does nothing to advance the analysis, since by definition, land use planning presupposes a classification of legal uses for the purposes of dividing and organizing the territory.

78                   Nonetheless, the nature of an activity must be defined in reference to the perception and values of the society.  Accordingly, while it may be legal to operate establishments that present erotic entertainment, those establishments have a particular social and moral connotation that justifies treating them as distinct for land use planning purposes.  First, the kind of entertainment presented involves an increased possibility of indecent excesses and illegal acts (see, for example, s. 163(2) (b) of the Criminal Code , R.S.C. 1985, c. C‑46 :  exhibiting an indecent show; s. 167:  immoral theatrical performance; and s. 173(1): indecent act).  Second, that kind of entertainment tends to condone the violation of respect for and the dignity of the performers, whose sexuality and persons are then subservient to and exploited for lewd and commercial purposes.  And third, it is worth noting that the police officer, Gelly, testified at trial that the opening of an establishment presenting erotic entertainment prompted the police service to tighten its surveillance in the surrounding neighbourhood, and that it was attracting a criminal element.

79                   The decisive question of whether the conversion of an establishment that presents entertainment that is devoid of any sexual or erotic aspect into an establishment that presents erotic entertainment means that the protection offered by acquired rights is lost has only seldom been addressed by the courts.  In Quebec, there is only Saint-Raymond (Ville) v. Entreprises Benoît Demers Inc., [1996] Q.J. No. 4387 (QL) (Sup. Ct.), in which Goodwin J. held that a transformation of this sort had resulted in replacement of one prohibited use by another, and led to the loss of the acquired rights.  The courts of the other provinces of Canada do not seem to have had occasion to deal specifically with this question.  The American courts, however, have examined it on a few occasions.

80                   In Squillante v. Zoning Board of Appeals of the City of Hartford, 1997 Conn. Super. Lexis 2612, the plaintiffs had obtained a certificate of occupancy from the municipality to operate a “Café Liquor” (p. 2).  At the time the certificate was issued, it would have been open to them to present “adult” entertainment under the by-laws then in force.  However, there was nothing in the evidence to show that they had done any such thing.  The city then amended its zoning by-laws, and “adult” entertainment establishments were prohibited in the zone where the plaintiffs’ business was located.  The plaintiffs subsequently began to operate an establishment of that nature.  The city had issued a notice of violation to the plaintiffs, who then claimed that their activities were protected by acquired rights.  The court rejected that argument, stating, at pp. 12‑13:

[T]he simple fact is that the record reflects that no adult entertainment was actually being provided on the premises prior to the time the municipal code was amended on May 9, 1994, to exclude adult entertainment from a B-1 zone.

Accordingly, because a “Café Liquor” and an adult entertainment establishment are entirely different in nature, operation of the former could not mean that operation of the latter was protected by acquired rights.

81                   In Marzocco v. City of Albany, 629 N.Y.S.2d 847 (App. Div. 1995), the petitioner had purchased a tavern featuring male strippers as entertainment, which catered primarily to the area gay population.  That use was prohibited by the zoning by-laws in force, but was protected by acquired rights.  The petitioner first replaced the male strippers with topless female dancers.  He then decided to surrender his liquor licence and establish a “juice bar”, and present totally nude female dancers and other forms of erotic entertainment.  He therefore applied to the City of Albany Board of Building, Zoning and Housing Appeals for permission to change the use of the premises.  When the request was denied, he turned to the courts, which affirmed the Board’s decision.  The Appellate Division of the New York State Supreme Court held, at p. 848:

Initially, we agree with Supreme Court that there is rational basis and substantial evidence in the record to support respondent’s factual determination that petitioner’s change in the character of his property was sufficient to require a use variance. . . . Notably, the abandonment of petitioner’s tavern trade and surrender of his liquor license freed him from the restrictions (and the public from the protections) of the Alcoholic Beverage Control Law and the rules of the State Liquor Authority.  In the same connection, the primary purpose and profit motive of the business changed from the sale of food and beverages, with adult entertainment a mere incidental attraction, to the exhibition of nude dancing, thereby effecting a fundamental change in the character of the clientele and, as a consequence, the impact of the business on the neighborhood. [Emphasis added.]

82                   The dissimilarity between a country and western bar and a bar that presents entertainment involving nude dancers is also revealed by a line of more general cases concerning the validity of land use planning provisions governing establishments that present erotic entertainment.  In Val-d’Or (Ville de) v. 2550-9613 Québec Inc., [1997] R.J.Q. 2090 (C.A.), it was argued that the distinction made by the municipality between [translation] “taverns, bars and night clubs” and establishments that present entertainment with male and female nude dancers was discriminatory, as that term is understood in administrative law.  Chamberland J.A., writing for the Court of Appeal, rejected that argument and stated in his reasons, at p. 2095:

[translation] It is clear from the evidence in this case that the adoption of the zoning by-law (June 7, 1993) and the decision to refuse the [respondent’s] request to amend the by-law (July 17, 1995) were based on considerations involving the proximity of a church and an elementary school, child protection, crime prevention and the safety and welfare of the public, as well as the improvement of the image of downtown Val-d’Or.  These are relevant considerations in zoning and urban planning matters.

The distinction was therefore held to be permitted under the Act Respecting Land Use Planning and Development.  As well, in Moncton (City) v. Steldon Enterprises Ltd. (2000), 225 N.B.R. (2d) 11 (Q.B.), it was concluded that a by-law adopted under the Community Planning Act, R.S.N.B. 1973, c. C-12, prohibiting the operation of “adult cabarets” within the city, was valid.  Those cases are also consistent with the opinion stated by the United States Supreme Court regarding the validity of similar zoning ordinances (Young v. American Mini Theatres, Inc., 427 U.S. 50 (1976); Renton (City of) v. Playtime Theatres, Inc., 475 U.S. 41 (1986)).

83                   As a final point, I consider it worth noting that in Ontario, the Municipal Act, R.S.O. 1990, c. M.45, specifically delegates to municipalities the power to regulate “adult entertainment parlours” (see, for example, 538745 Ontario Inc. v. Windsor (City) (1988), 64 O.R. (2d) 38 (C.A.)).  Section 225 of that Act provides:

(1) By‑laws may be passed by the councils of local municipalities for licensing, regulating, governing, classifying and inspecting adult entertainment parlours or any class or classes thereof and for revoking or suspending any such licence and for limiting the number of such licences to be granted, in accordance with subsection (3).

                                                                    . . .

(3) Despite subsection 257.2 (4), a by‑law passed under this section may define the area or areas of the municipality in which adult entertainment parlours or any class or classes thereof may or may not operate and may limit the number of licences to be granted in respect of adult entertainment parlours or any class or classes thereof in any such area or areas in which they are permitted.

84                   To conclude, I believe that these are significant indications that the distinction between a bar that presents country and western entertainment and a bar that presents entertainment involving nude dancers is relevant in the exercise of general land use planning powers.

85                   I am of the view therefore that operating a bar that presents erotic entertainment constitutes the illegal replacement of the original non-confirming use by a different non-conforming use.  Replacing the one with the other accordingly results in loss of the protection conferred by acquired rights.

VII.  Conclusion

86                   For these reasons, I would allow the appeal, set aside the judgment of the Court of Appeal, and order the respondents to immediately cease using the premises located at 643 4th Avenue in Saint-Romuald as a bar that presents erotic entertainment, with costs throughout.

Appeal dismissed with costs, L’Heureux-Dubé, Gonthier and Bastarache JJ. dissenting.

Solicitors for the appellant:  Pothier Delisle, Sainte-Foy.

Solicitors for the respondents:  Daignault & Associés, Québec.