Schickedanz Properties B.C. Ltd. v. Fernie (City of)

2002BCCA0260 Citation: Schickedanz v. City of Fernie Date: 20020419 2002 BCCA 260 Docket: CA028541 Registry: Vancouver COURT OF APPEAL FOR BRITISH COLUMBIA BETWEEN: SCHICKEDANZ PROPERTIES B.C. LTD. APPELLANT (Plaintiff) AND: CORPORATION OF THE CITY OF FERNIE RESPONDENT (Defendant) Before: The Honourable Madam Justice Newbury The Honourable Mr. Justice Hall The Honourable Madam Justice Levine R. Burke Counsel for the Appellant C.S. Murdy Counsel for the Respondent Place and Date of Hearing: Vancouver, British Columbia 22 February 2002 Place and Date of Judgment: Vancouver, British Columbia 19 April 2002 Written Reasons by: The Honourable Mr. Justice Hall Concurred in by: The Honourable Madam Justice Newbury The Honourable Madam Justice Levine Reasons for Judgment of the Honourable Mr. Justice Hall: Background: [1] The appellant Schickedanz Properties B.C. Ltd. ("Schickedanz") appeals from an order of Wilkinson J. pronounced May 14, 2001. The decision is reported at (2001), 21 M.P.L.R. (3d) 115. The issue in the case is whether or not Schickedanz is liable to pay to the Corporation of the City of Fernie ("Fernie") approximately $180,000 in development cost charges for a building permit it obtained for the construction of a hotel premises on land situated in that city. I understand that the money has been paid but that it was agreed between the parties that Fernie would repay the money if a court found the project ought to be exempt from the development charge levied by Fernie. [2] In 1998, Schickedanz purchased a 33 unit hotel situated on four separate parcels of land in Fernie. Schickedanz wished to develop the property to replace the existing hotel with a new 96 unit hotel and related commercial development. The project had some complexity because Schickedanz wished to purchase four small parcels of closed road and lane allowance adjacent to the property and intended ultimately to amalgamate all of the parcels into three lots. The old roadways were controlled by Fernie but the ultimate ownership of the land was with the Province of British Columbia. [3] By February 1999, Schickedanz had reached an agreement with Fernie to purchase these parcels but all concerned were aware that ultimate approval of the transfers would be required from the Province in whom title was vested. In May 1999, as a step in the contemplated development of the project, Schickedanz applied for a development permit and a development variance permit. [4] In May 1999, Fernie introduced Bylaw No. 1826, described as a Development Cost Charge Bylaw ("the Development Bylaw"). It appears the new bylaw was introduced because of some doubt concerning the efficacy of the former applicable bylaw. The new bylaw was given first and second reading in May 1999 but was not formally adopted by Council until September 13, 1999. Schickedanz said that it only learned of the Development Bylaw upon its adoption on September 13, 1999. [5] Between May and July 1999, Schickedanz and officials of Fernie discussed the proposed project and on July 12, 1999, the Council approved a development variance. In August 1999, representatives of Schickedanz continued to meet with city officials in order to obtain a partial building permit for the foundations for the proposed development. Schickedanz wanted to get the foundations completed before the arrival of cold weather. The permit was issued and the work was done on the foundations. [6] In 1996, Fernie had adopted Bylaw No. 1706, which dealt with the process for the subdivision of land in the city. This bylaw provided that final approval of a subdivision would be granted only if preliminary approval had been previously received. Applications for subdivision were to be made to the clerk of the city. On July 13, 1998, Fernie adopted a by-law entitled "Subdivision and Development Servicing Bylaw No. 1727 ("the Subdivision Bylaw") which provided for "preliminary layout approval" and "final approval" and authorized an applicant to make a submission under the Subdivision Bylaw for preliminary review. It is not expressly provided in this By-law that an applicant for preliminary subdivision approval need be an owner of property. However, I should think it reasonable that only an owner or representative of an owner would be involved in such an application. On August 16, 1999, a representative of Schickedanz applied to the Approving Officer, Ms. Bridarolli, seeking subdivision approval for subdivision of the hotel land and the closed road allowance property that Schickedanz had agreed to purchase. On August 23, 1999, Ms. Bridarolli responded to the representative of Schickedanz as follows: We acknowledge receipt of your August 16th, 1999 letter with which you indicated you were submitting: [1] Recent Tax Certificates (TX 55) [2] Cheque for $425.00 for subdivision application fees [3] Authorization letter from your client, Schickedanz Properties B.C. Ltd. [4] Restrictive Covenant documents from your clients lawyer [5] Two mylar and eight prints of the subdivision plan. Firstly, the Restrictive Covenant documents were not submitted. Secondly, we are returning all the enclosures to you for safekeeping at this time with one exception; we have retained one paper print of the Subdivision Plan. The final phase of the road closure process has just been initiated - the Petition to the Minister for vesting of the closed road into the name of the City for sale to Schickedanz. The Petition and related items must be sent off to Kamloops Land Title Office and to the Regional Ministry of Transportation and Highways Office for written comment/approval. Those comments/approvals must then be sent off to the Minister of Municipal Affairs for the appropriate approvals. This process may take some time. We would also like to review the right-of-way plans and agreements, which we have agreed, will be provided and registered concurrently with the Subdivision Plan by your client's lawyer. One further matter, all signatures required on the Plan of Subdivision should appear before submitting an application for signature of the City's Approving Officer. The City's Engineer will allow installation of services to and through the site and excavation for the foundation of the building to proceed provided your clients engineer or project manager confirms that the works are within the surveyed subdivision areas. If you have any questions or need clarification on the contents of this communication, don't hesitate to call. [7] It was not until November 22, 1999, that the Provincial Ministry of Municipal Affairs vested title in fee simple to the closed road allowances in the City of Fernie. In early March 2000, Fernie, pursuant to the earlier agreement, transferred this property to Schickedanz. At this time, the subdivision plan for the lands was also registered in the Land Title Office. On March 19, 2000, Schickedanz paid, under protest, a development cost charge of $179,731.20 required by Fernie in order to obtain a building permit for construction of the hotel development. [8] On July 28, 2000, Schickedanz commenced an action against Fernie claiming, firstly, that Bylaw No. 1826, the Development Bylaw, was invalid and, secondly, that in any event, it did not apply to the development because the development was exempted by both s. 943 of the Local Government Act, R.S.B.C. 1996, c. 323, and by Fernie's implementation policy relating to Bylaw No. 1826, which policy had been adopted shortly after the adoption of this Development Bylaw. [9] Fernie filed a Statement of Defence denying that the development was exempted by either the provisions of the Local Government Act or the implementation policy relating to Bylaw No. 1826. [10] Section 943 of the Local Government Act provides in its relevant portion as follows: If, after [1] ..., or [2] an application for a subdivision of land within a municipality has been submitted to an approving officer and the applicable subdivision fee has been paid, a local government adopts a bylaw under this Part that would otherwise be applicable to that subdivision, the bylaw has no effect with respect to that subdivision for a period of 12 months after it was adopted unless the applicant agrees in writing that it should have effect. (emphasis added) [11] The apparent intent of the implementation policy adopted relevant to the Development Bylaw was that what were defined as "in-stream" applications would be exempted from development cost charges imposed under the terms of the Development Bylaw. An "in-stream" application was defined to mean, inter alia: Applications, for which the application forms have been completed, the application fees have been paid and all required supporting documentation necessary to make the application complete have been submitted and accepted by the City as a legitimate application. [12] Under the section titled "Implementation" in Fernie's October 1999 implementation policy, an "in-stream application" for a building permit involving an application for a subdivision was to be treated as follows: An "in-stream application" for a building permit which involves a subdivision where the subdivision application has been received prior to the adoption date of the Development Cost Charges Bylaw will be exempt from the bylaw, provided the building permit application is brought to a successful conclusion no later than one (1) year from the adoption date of the bylaw. Analysis: [13] The appellant, Schickedanz, argues that it is entitled to the benefit of both the above noted exemption provisions: the statutory provision and the bylaw implementation policy. It would seem that if it could bring itself within the terms of either, it would be entitled to be exempted from paying the development cost charges assessed by Fernie. The respondent Fernie argues that the appellant falls under neither exemption provision and submits that the appellant has been properly assessed the development cost charges of approximately $180,000 under the Development Bylaw. [14] As Wilkinson J. noted in his Reasons for judgment, in order for the appellant to succeed in its argument concerning the s. 943 exemption, it would have to establish that it had applied for a subdivision of land before the Development Bylaw had been adopted. The trial judge acceded to the respondent's argument that the appellant could not claim this exemption because at the relevant time, in August 1999, Schickedanz was not yet the owner of a portion of the proposed lands, namely the four disused road allowances. The trial judge said this on the subject, beginning at para. 37: A much more serious objection is that on August 16, 1999 when the application was made, the plaintiff did not own that part of the proposed lands consisting of the four parcels making up the closed roads and lane. The City takes the position that this case is not similar to a situation where lands were under the control of the applicant or where lands were owned by the City and had been agreed to be sold to the applicant. In fact, the lands were owned and controlled by a third party, the Province of British Columbia, and as is pointed out in the approving officer's letter, the process to seek the requisite approval and transfer to the City had just been initiated. Bylaw 1706, which sets out the procedures for application to subdivide land, contains the following: APPLICATION 3 (1) Application for an amendment or a permit shall be made by the owner of the land involved or by a person authorized by the owner. (2) Applications for amendments, permits, variances or subdivisions shall be made to the clerk on the applicable sample forms contained in Appendix A attached to and forming a part of this bylaw and prescribed in the procedures manual prepared by the City. Bylaw Number 1727, the subdivision and development servicing bylaw contains the following: Definition 2.1 In this bylaw unless the context requires otherwise: "Applicant" means a person applying for the approval of a subdivision pursuant to the provisions of the Land Title Act or a person applying for development other than a subdivision, whether as the owner of the property proposed to be subdivided or developed or as agent for the owner or his contractor ... "Owner" in respect of real property means the registered owner of an estate in fee simple and includes (a) the tenant for life under a registered life estate; (b) the registered holder of the last registered agreement for sale; (c) the holder or occupier of land held in the manner mentioned in sections 409 and 410 of the Municipal Act; [3] an indian who is an owner under the letters patent of a municipality incorporated under section 10 of the Municipal Act. In my view, the argument of the City of Fernie must be accepted. The land was owned by an independent third party and there is no evidence of any assurance that the third party would transfer the property. The authorities are clear that an application for preliminary approval will be treated in much the same way as an application for final approval in fixing the time of commencement of "in-stream" applications in cases such as this but in this case the plaintiff was not in a position to make any application for subdivision. [15] The trial judge also found, based on his conclusion that the appellant was not in a position in August 1999 to apply for subdivision of the lands, that it could not bring itself within the terms of the Development Bylaw implementation policy relating to "in-stream applications." He said at para. 46 of the Reasons: The plaintiff argues that under implementation policy (b), its application for subdivision was brought to a successful conclusion on March 9, 2000, a date within one year from the adoption date of the bylaw. This argument relies on the acceptance of its position that a subdivision application has been received prior to the adoption date of the DCC bylaw. I have already found that even though the application for subdivision was only for preliminary approval, it was not made by a person owning or acting for the owner of the lands involved. That ruling is fatal to the operation of implementation policy (b) as well. [16] In this case, it is important to consider certain terminology found in the Subdivision Bylaw. In the definition section of this bylaw, an "Applicant" is defined as follows: means a person applying for the approval of a subdivision, pursuant to the provision of the Land Title Act, or a person applying for development other than subdivision, whether as the owner of the property proposed to be subdivided or developed or as agent for the owner or his contractor. In that same definition section, "Owner" is defined as: In respect of real property ... the registered owner of an estate in fee simple,... (emphasis added) [17] The appellant points out in argument that by the provisions of s. 8.2 of the Subdivision Bylaw, an applicant is permitted, before causing a plan of subdivision to be prepared and submitted for approval, to make a submission for preliminary review. It is submitted that the process adopted by the representative of Schickedanz in August 1999 was just such a procedure. I have no doubt that the application made at that time was at least an application seeking preliminary, if not final, approval of the subdivision plan relating to the lands. However, it seems to me that the insuperable problem facing the appellant regarding that submission is that it was not then the owner, and indeed would not be the owner for several months, of a portion of the lands for which it was seeking subdivision approval. In my view, this circumstance serves to distinguish this case from cases such as Fernco Development Ltd. v. Nanaimo (City), [1990] B.C.J. No. 2906 (B.C.C.A.), Gardner Construction Ltd. v. Parksville (City) (1995), 126 D.L.R. (4th) 355, B.C.J. No. 1459 (B.C.C.A.) and Whitehawk Developments Ltd. v. Delta (District) (1991), 4 M.P.L.R. (2d) 99, (B.C.S.C.), all cases relied upon by the appellant in this Court. With regard to the case of Yuen v. Oak Bay (District) (1992), B.C.J. No. 202, I would simply note that the main issue argued in that case concerned the status of certain bylaws as opposed to the timing of any preliminary application for subdivision approval. [18] Although I consider as dispositive, the fact that the appellant was not, in August 1999, the "owner" of all of the land for which it was seeking subdivision approval, it also seems to me that there is considerable force in the respondent's argument that the building permit application could not be held to be an "in-stream application" under the implementation policy associated with Development Bylaw because "all required supporting documentation necessary to make the application complete [had not] been submitted and accepted by the City as a legitimate application." The procedure to obtain the required approvals was, on the contrary, very much an ongoing process that was still in progress as late as May 2000. The appellant had been given credit for, and was permitted an exemption from, paying further development fees for the portion of the development comprising the foundation work, as the application for this work had been received prior to implementation of the Development Bylaw. I do not consider that Schickedanz was entitled to exemption from development charges levied on the remainder of the development, however, having regard to the timing of receipt of required plans and the application for a building permit for the balance of the building. That application was not actually made until 2000, several months after passage of the Development Bylaw. [19] I do not consider, in view of the conclusion I have reached on the main issues, of ownership and the state of progress of the application, that it is necessary to resolve the differing interpretations the parties placed in argument on the term "that subdivision" contained in s. 943 of the Local Government Act. [20] In my view, the learned trial judge was correct in his conclusion that the appellant was liable on the facts of this case for the development charges levied by Fernie. I would accordingly dismiss the appeal. "The Honourable Mr. Justice Hall" I AGREE: "The Honourable Madam Justice Newbury" I AGREE: "The Honourable Madam Justice Levine"