Soo Mill & Lumber Co. v. City of Sault Ste-Marie, [1975] 2 SCR 78

Supreme Court of Canada

Soo Mill & Lumber Co. v. City of Sault Ste-Marie, [1975] 2 S.C.R. 78

Date: 1974-05-27

Soo Mill & Lumber Company Limited (Plaintiff) Appellant;

and

The Corporation of the City of Sault Ste-Marie (Defendant) Respondent.

1974: February 15, 18; 1974: May 27.

Present: Laskin C.J. and Judson, Ritchie, Pigeon and Dickson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Municipal Corporations—Planning—Zoning By-law—Temporary “holding category”—The Planning Act, R.S.O. 1970, c. 349, ss. 1(h), 35(1), 35(22)—The Municipal Act, R.S.O. 1970, c. 284, s. 241(2).

The appellant held eight consecutively numbered lots on a plan of subdivision, which were zoned “residential” under the official plan. The permitted uses for the designation normally would have included triplex dwellings, apartment dwellings and multiple attached dwellings, however, notwithstanding the zoning, the property had not been considered ready for development and the suffix “H” had been added to the zoned designation, the result of which was to place the land in a “holding category”. As the property had, by reason of size, nature and location, no practical use save as the site of multiple-family residences the effect of the zoning by-law was to freeze development of the property and to sterilise it in terms of present use. The trial Judge held s. 40 of the by-law was ultra vires since it involved a temporary zoning or development freeze for which there was no statutory authority. The Court of Appeal disagreed and held in addition that s. 40 was not prohibitory even though in practical terms it prevented any meaningful use of the land.

Held: The appeal should be dismissed with costs.

Per Laskin C.J. and Judson, Ritchie and Dickson JJ.: Planning policies reflected in an “official plan” (as defined in s. 1 (h)) of the The Planning Act, R.S.O. 1970, c 349 and by-laws implementing such plan are to be liberally construed. The appellants’ assertion of invalidity on the grounds that the by-law was prohibitory of the use of the land fails because a freeze on development following the precepts of an

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official plan and an implementing zoning by-law does not offend s. 35(1) of The Planning Act when agricultural and related uses and pre-existing uses are permitted. There was no bad faith and it was open to the respondent City in exercise of its discretion to freeze development. It is not legally objectionable that the removal of the land from its “holding category” may have to be prompted by an application for a development conforming to the official plan. The enactment in the by-law of provisions envisaging possible changes does not fetter future legislative discretion either as to continuation, amendment or repeal.

Per Pigeon J.: Section 35(22) of The Planning Act, R.S.O. 1970, c. 349, indicates an intention to authorize discriminatory prohibition of the use of land, in the exercise of s. 35(1), by providing for relief by way of appeal to the Municipal Board.

[Sanbay Developments Ltd. v. City of London, [1975] 1 S.C.R. 485 referred to]

APPEAL from a judgment of the Court of Appeal for Ontario[1] allowing an appeal from a judgment of O’Driscoll J. Appeal dismissed with costs.

G.E. Julian, and J.F. Kelleher, for the appellant.

R.J. Rolls, Q.C., and L.P.D. Staples, for the respondent.

The judgment of Laskin C.J. and Judson, Ritchie and Dickson JJ. was delivered by

THE CHIEF JUSTICE—The issue in this appeal is the validity of s.40, as amended, of Zoning By-law 4500 of the City of Sault Ste. Marie, passed on October 21, 1968, in implementation of an Official Plan of even date adopted by the City. This plan, replacing an earlier one, provided, inter alia, as follows:

Zoning By-Law

The implementing Zoning By-law will translate the intent and policies of The Official Plan into appropriate legal regulations applicable to land and land uses in the entire Planning Area.

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Certain Areas designated for specific land uses on the Official Plan may be zoned otherwise under a “holding Category¹ in order to delay their development for their designated use until they appear to be ready for such development and until the standards appropriate to the designated use can be satisfied. Under the “holding category” the lands may be zoned for agricultural use, for parks or recreational use, for open space uses, for other temporary uses, for existing uses (preferably with a restriction prohibiting all enlargement) or for their designated use with a suffix “H” to indicate a temporary holding status. Prior to zoning lands under a holding category the municipality shall be satisfied that the use permitted by such zoning will not exert any adverse effect upon any adjacent existing use, will not jeopardize the future development of the land in conformity with the official plan designation and that all services deemed necessary are provided. When Council receives application for a development project which is deemed suitable by Council and which is in accordance with the designation and policies of the official plan, the holding category may be removed from the implementing by-law by an amending by-law without any need for an amendment to the plan.

Section 40 of the By-law in its original form, so far as relevant, was in these words:

Notwithstanding any other provisions of this by-law, if any zone symbol shown on a zoning map is followed by the suffix “H”, while the said zone symbol indicates a proposed future zone designation for the lands in the zone so marked, no person shall use land in such zone or erect or use buildings thereon for any purpose except the following:

1. Any use being carried on on such land or in a building thereon on the day of the passing of this by-law,

2. cultivation of land,

3. production of field crops,

4. truck, flower and market gardening,

5. grazing for horses, cattle and sheep,

6. temporary stand for the sale of farm produce produced on the premises,

7. home occupation,

8. accessory use…

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By-law 69-133 of June 2, 1969 amended s. 40 by, inter alia, deleting the words “while the said zone symbol indicates a proposed future zone designation for the lands in the zone so marked”.

The appellant corporation is the owner of eight consecutively numbered lots on a plan of subdivision, being vacant land surrounded by multiple family residences to the north, single family residences to the west, a railway right of way to the south and by vacant land owned by the respondent City to the east. The appellant’s property is designated “residential” under the Official Plan and is zoned R.M. 10H on Map No. 20 of By-law 4500. Permitted uses under the R.M. 10 category in s. 23 of By-law 4500 include triplex dwelling, apartment dwelling and multiple attached dwelling. Because the appellant’s property was not considered ready for development when By-law 4500 was passed, the suffix “H” was added to its zone designation. In the result, the property, which by reason of its size, nature and location had no practical use save as a building site for multiple family residences, was sterilized in respect of any effective use. Admittedly, it could not be used for cultivation or for grazing or for any other of the limited permitted uses set out in s. 40 respecting land in a holding category.

An action challenging the validity of s. 40, as being beyond the respondent City’s powers under what is now s. 35 of The Planning Act, R.S.O. 1970, c. 349, was tried by O’Driscoll J. who concluded that the challenged provision created a temporary zoning or freeze for which there was no statutory authority. He came to this decision on a consideration of s. 40 in its original form, the amendement by By-law 69-133 not having been proved at the trial. However, when it was drawn to his attention by the City, he refused to change or vary his decision. He did not pass upon the question, argued

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strongly in this Court and which was considered by the Ontario Court of Appeal, namely, that s. 40 was invalid as in effect prohibitory and hence offensive to s. 35 (1) of The Planning Act which authorizes the passing of by-laws “for prohibiting the use of land, for or except for such purposes as may be set out in the by-law”.

The Ontario Court of Appeal, in reasons delivered by Jessup J.A., rejected the ground upon which O’Driscoll J. proceeded and held, in addition, that s. 40 was not prohibitory even though the practical effect upon the appellant was to foreclose any meaningful use of its land. The learned judge in the Court of Appeal met the submission of unreasonableness (flowing from the sterilization of practical use) by invoking s. 241(2) of The Municipal Act, R.S.O. 1970, c. 284 (which forbids Courts to invalidate by-laws passed under that Act on the ground of unreasonableness) and adapting it by way of judicial policy to planning or zoning by-laws.

In this Court, the appellant pressed three points: first, that s. 40 amounted to a prohibition of land use and, in that light, was discriminatory against the appellant; second, that since it envisaged its ultimate repeal as provided by the Official Plan, it necessarily involved a commitment by the respondent to remove the suffix “H” and it was beyond the powers of a municipal council to bind itself to such future action; and, third, s. 40 amounted to zoning by permit rather than through a by-law setting out permitted uses as required by s. 35(1) of The Planning Act. Before dealing with these submissions, it is germane to point out that all three are related attacks upon zoning schemes which look to controlled development and resort to holding categories as a method of maintaining orderly growth through retention of power to tighten or relax, as social and economic circumstances indicate, the overall programme of development

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portrayed in an Official Plan. The legal question whether such schemes comport with the words of The Planning Act, and especially with the straightforward words in s. 35, has given rise to a range of attacks upon them, such as those exhibited in this case and in the recent decision of this Court in Sanbay Developments Ltd. v. City of London[2].

I do not call upon any special or novel principle of interpretation in approaching The Planning Act from the viewpoint of giving effect to its purpose. Although the Act contains no directory preamble, the definition of “official plan” in s. 1(h) and the elaborate system of approvals and checks which are associated with the adoption of an Offical Plan, indicate to me that planning policies reflected in such a Plan should be liberally construed as (in the words of s. 1 (h)) “designed to secure the health, safety, convenience or welfare of the inhabitants of the area” in which the Plan operates. Implementing by-laws (which by s. 19 of the Act must be in conformity with the purposes of the Plan) are hence integrated with it and deserve similar liberal consideration.

The first and the third submissions of the appellant are related in their thrusts because they depend on conclusions that there are, for all practical purposes, no permitted uses, that this is impermissible, and that in such circumstances the holding category amounts to a discrimination against the appellant, leaving it in the position of seeking approval of a development on an individual basis. The fact is, as counsel for the respondent contended, that the removal of the suffix “H”, as contemplated by the Official Plan, would leave the property zoned R.M. 10, and appellant would then be in the position of being able to proceed with a development under that category without the requirement of any further permit respecting

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land use. I do not regard it as legally objectionable that the removal of the suffix may have to be prompted by an application for a development project conforming to the Official Plan. This is an obvious method of development control and cannot in itself be regarded as offensive to The Planning Act. In this respect, s. 40 of the by-law challenged in the present case offers less of a target of attack than did the by-law provision unsuccessfully challenged in the Sanbay case.

On the main point whether there was in this case a prohibition, either total or practically so, of the use of the appellant’s land, in violation of s. 35(1) of The Planning Act and amounting to discrimination against the appellant, I am of the opinion that the appellant’s assertion of invalidity should be rejected. Its submission amounts to a contention that unless the holding category permitted a development use there would be both a transgression of s. 35(1) and an unlawful discrimination in respect of its land. The fact of a freeze on development, in accordance with the precepts of the Official Plan as implemented by the zoning by-law, does not amount to a violation of s. 35(1) when agricultural and related uses (and pre-existing uses) are permitted. Nor can the appellant complain of discrimination merely because the result of the freeze is to sterilize its land in respect of development when this has been done in the context of an overall Official Plan and a general zoning by-law in furtherance thereof. There was no suggestion of bad faith on the part of the respondent in bringing the appellant’s land within the holding category. That was a discretion which was reposed in the municipality under the zoning scheme.

The second point of attack by the appellant was, in effect, a reformulation of the temporary zoning objection which found favour with O’Driscoll J. It was contended that just as it

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would be invalid for a municipality to make a by-law irrevocable (unless, of course, authorized by provincial legislation), so it is invalid to compel revocation or repeal in the future, which is what is contemplated in respect of s. 40. I think the analogy is self-defeating. The power to enact is equally the power to repeal; and the fact that a by-law contains within its terms provisions that envisage possible changes therein by the enacting authority (subject to other required approvals) does not mean that one municipal council has withdrawn discretion from a successor either as to the continuation of the by-law or as to its amendment at a particular time. There is simply a declared policy which is left to the administration of the municipal council in office at a particular time. The distinction between temporary and other by-laws (save as a by-law may expire by a built-in provision for its expiration) is without legal significance.

I would dismiss the appeal with costs.

PIGEON J.—I would hesitate to agree with the Chief Justice’s construction of s. 35(1) of The Planning Act if s. 35(22) did not clearly indicate the intention of the Legislature to authorize discriminatory prohibition of the use of land, by making provision for relief in individual cases through the intervention of the Municipal Board on appeal by the owner of the land.

Subject to this observation, I agree with the Chief Justice.

Appeal dismissed with costs.

Solicitors for the appellant: Osler, Hoskin & Harcourt, Toronto.

Solicitors for the respondent: Faskin & Calvin, Toronto.