Markborough Properties Inc. v. Dartmouth (City)

Markborough Properties Inc. v. Dartmouth (City) Court Court of Appeal Date 1996-11-26 Citation 1996 NSCA 220 Docket 127725, CA 127823 Judge/Registrar/Adjudicator Freeman, Gerald B. (Honourable Justice) (CA); Pugsley, Ronald N. (Honourable Justice); Roscoe, Elizabeth A. (Honourable Justice) (CA) Document Type Decision Decision Content C.A. No. 127823 C.A. No. 127725 NOVA SCOTIA COURT OF APPEAL Cite as: Markborough Properties Inc. v. Dartmouth (City), 1996 NSCA 220 Freeman, Roscoe and Pugsley, JJ.A BETWEEN: MARKBOROUGH PROPERTIES INC. ) Michael Moore and J.D. IRVING, LIMITED, carrying on ) for the Appellant - Markborough business under the firm name and style of ) KENT BUILDING SUPPLIES ) Alexander Beveridge and ) James M. MacGowan, Q.C. ) for the Appellant - Kent Appellants ) ) - and - ) ) CITY OF DARTMOUTH/HALIFAX ) Michael Moreash REGIONAL MUNICIPALITY, its ) for the Respondent - Municipality successors by Statute to the City of ) Dartmouth ) Respondent ) Jack A. Innes, Q.C. ) for the Respondent - Can Euro - and - ) ) CAN-EURO INVESTMENTS LIMITED ) Appeal Heard: ) October 2, 1996 Respondent ) ) Judgment Delivered: ) November 26, 1996 THE COURT: Appeal allowed without costs per reasons for judgment of Freeman, J.A.; Roscoe and Pugsley, JJ.A. concurring. Freeman J.A.: The City of Dartmouth, now part of the Halifax Regional Municipality, negotiated a development agreement with the appellant J.D.Irving Limited for construction of one of its Kent Building Supplies stores on property owned by the appellant Markborough Properties Inc. The agreement followed a lengthy process involving public participation required by the Planning Act, R.S.N.S. 1989, c.346. Specific amendments were made to Dartmouth's Municipal Planning Strategy and Land Use By-Law, The eleven-acre site intended for the Kent store adjoins the north side of Mic Mac Mall, a major shopping centre which is also owned by Markborough. The respondent Can-Euro Investments Limited owns undeveloped land north of the Kent site and, just north of that, two apartment buildings, 15-storey Horizon Court with 306 units and three-storey Garden Stone Estates with 86 units. Can-Euro appealed Council's decision approving the development agreement to the Nova Scotia Utility and Review Board. By decision April 25, 1996, the Board referred three provisions of the development agreement, ss. 9.1, 9.2 and 14, back to council for further consideration. Sections 9.1 and 9.2 govern truck access to and from the site; Section 14 identifies matters considered by the parties to be insubstantial which can be negotiated between them without involving public process. This appeal is from that decision of the Board. The Issues The appellant raises four issues: ISSUE #1 What is the scope of judicial review to be applied by the Nova Scotia Court of Appeal in an appeal from a decision of the Board? ISSUE #2 What is the scope of the Board's jurisdiction in hearing Development Agreement appeals under the Planning Act? ISSUE #3 Did the Board err in law or exceed its jurisdiction in referring Sections 9.1 and 9.2 of the Development Agreement back to Council for reconsideration? ISSUE #4 Did the Board err in law or exceed its jurisdiction in referring Section 14 of the Development Agreement back to Council for reconsideration? Issue No. 1 - The Scope of Review Pursuant to s. 30(1) of the Utility and Review Board Act, 1992 S.N.S, c. 11, there is a full right of appeal to this Court from the Board on questions of jurisdiction or on questions of law. That subsection provides: 30(1) An appeal lies to the Appeal Division of the Supreme Court from an order of the Board upon any question as to its jurisdiction or upon any question of law, upon filing with the Court a notice of appeal within thirty days after the issuance of the order. Two recent cases of this Court have considered the jurisdiction of this Court to review Board decisions and the Board's role and jurisdiction in appeals under the Planning Act: Heritage Trust of Nova Scotia et al. v. Nova Scotia Utility and Review Board et al. (1994), 128 N.S.R.(2d) 5 and Kynock v. Bennett et al. (1994), 131 N.S.R.(2d) 334. In both cases this Court upheld the decisions of the municipal councils. In Heritage Trust, Hallett, J.A. said at p. 35 : There is an appeal to this court from the Board's decisions on questions of law or jurisdiction. There is no appeal to this court on findings of fact by the Board; findings of fact will stand. It is only if the Board has erred in law in the interpretation of the relevant statutory provisions of the Planning Act or other relevant legislation or erred in its interpretation of the intent of the municipal planning strategy (the Plan) of the Bylaws or committed jurisdictional error that would give rise to a successful appeal to this court. In Kynock, Hallett, J.A. said at p. 344 : The jurisdiction of this court is limited by the Utility and Review Board Act to questions of law and jurisdiction. This court has a duty to intervene if the board misinterprets the legislation which confers jurisdiction on the board and, as a result, exceeds its jurisdiction or if the board misinterprets the law which it is required to apply in its decision‑making process. On these issues the policy of judicial deference does not come into play given the scope of appeal to this court from a board decision. The board's findings of fact within jurisdiction are final and conclusive (s.26 Utility and Review Board Act). At p. 341 of Kynock, Hallett, J.A. concludes as follows: Central to the judicial review process is to ascertain the intent of the legislators as to the extent of the jurisdiction conferred on a tribunal and the extent to which the legislators have limited or expanded the scope of review to be exercised by the courts in their supervisory capacity. . . . On questions as to the extent of its jurisdiction, a tribunal must be correct in its interpretation of the statute under which it derives its authority and if it is wrong the courts do not hesitate to interfere even in the face of a strong privative clause (Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; 150 N.R. 161.) Issue No. 2 - The Board's Jurisdiction The development of land pursuant to development agreements is authorized by ss. 55 and 73 of the Act. The Board's jurisdiction on an appeal of a council's approval of a development agreement is set forth in s. 78 of the Act. The relevant subsections are as follows: (4) The Board shall determine whether the proposed agreement is consistent with the intent of the municipal planning strategy. (5) The Board shall (a) confirm the decision of the council; (b) make any decision the council could have made; or (c) refer the matter back to the council for further consideration. (6) The Board shall not interfere with the decision of the council unless the decision cannot reasonably be said to be consistent with the intent of the municipal planning strategy. In Heritage Trust, at pp. 35-36 the Court said: . . . the Legislature by enacting s. 78(6) of the Planning Act clearly intended to restrict the scope of the Board's powers to interfere with a decision of a municipality approving the entry into a development agreement pursuant to s. 55 of the Planning Act. While s. 78(4) of the Planning Act requires the Board to determine whether the proposed agreement is consistent with the intent of municipal planning strategy, subs. (6) clearly states that the Board "shall not interfere with the decision of the Council unless the decision cannot reasonably be said to be consistent with the intent of the municipal planning strategy". This restriction on the scope of the Board's powers to interfere with such decisions respecting development agreements is consistent with the objective of the Planning Act, as set out in that Act, to place the primary responsibility for planning with the municipalities. The ultimate question before the Board was to determine if the development agreement was reasonably consistent with the intent of the municipal planning strategy. (Halifax County (Municipality) v. Maskine and Ghosn, supra) These principles were reaffirmed in Kynock at p. 342. The Board's planning appeal role was summarized at p. 52 of Heritage Trust: The planning policies contained in the Plan give City Council the necessary flexibility it needs in planning decisions. The policies should be given a pragmatic interpretation so as to achieve the objectives of the policies. The bylaws should be interpreted in a manner consistent with the interpretation of the policies as they are the means to implement the policies. The Planning Act imposes on municipalities the primary responsibility in planning matters. The Act gives the municipal council the authority to enter into development by contract which permits developments that do not comply with all the municipal bylaws (s.55 of the Act). In keeping with the intent that municipalities have the primary responsibility in planning matters, the Legislature has permitted only a limited appeal from their decisions (s. 78 of the Act). . . . Prior to entering into the development agreement the City of Dartmouth on July 18, 1995, enacted by-law c.724 which includes the following amendments to its municipal planning strategy relevant to the exercise of the Board's jurisdiction in the present matter: Chapter 5 (e) Regional Retail Facilities - Lands to the North of MicMac Mall MicMac Mall is an established regional shopping area. The expansion of commercial development in this area will include major regional users. In order to mitigate the effects of this development, through site planning, building and operating controls, any proposed development of the property shall only be considered by development agreement. Policy C-18 It shall be the intention of City Council to consider commercial development, including regional retail facilities by development agreement, on land that is designated Commercial and shown on Map 9i. In considering the approval of such agreements, Council shall include the consideration of matters which reduce the effects of commercial development and operations on adjacent residential uses, including but not limited to: (i) buffering and separation distances; (ii) the preservation of mature vegetation and other desirable natural features; (iii) hours of operation (iv) landscaping of the site and parking lots; (v) truck routes; (vi) maintenance of the site; (vii) limitations on outdoor storage, display and uses; and (viii) architectural considerationrs (refers to compatibility as it relates to adjacent neighbourhoods); (ix) any and all other matters applicable to the development of the lands as set out in Policy IP-C. Policy C-19 Notwithstanding Policy C-18 no development agreement on the lands shown by Map 9i shall permit the following: a) automotive sales, rental, service or repair uses; b) drinking establishments, adult entertainment uses, amusement centers and fast food restaurants; c) except for uses which are accessory to the main use of the land, outdoor storage and display uses, including temporary uses such as flea markets and amusement fairs; and d) industrial uses. On the same day By-Law C-725 was enacted amending the land use bylaw to permit commercial use of the site by development agreement. Both by-laws received ministerial approval on August 4, 1995. Issue No. 3 - Truck Access Ss. 9.1 and 9.2 of the development agreement provide as follows: 9.1 The Developer agrees that the shipping or delivery of large-volume customer or contractor orders using vehicles having more than one rear axle and/or the capability of carrying more than 8,600 kilograms of cargo shall not be permitted to originate from the lands nor shall such vehicles be permitted to be stationed on the lands. 9.2 All construction vehicles and construction equipment and all trucks capable of carrying more than 8,600 kilograms in weight shall, both during and after construction of the development, use the following route: Highway 111 to the MicMac Boulevard exit, following MicMac Boulevard to the first entrance to MicMac Mall, across the lands of MicMac Mall to the driveway system labelled "truck route" on Schedule "B". Notwithstanding the above, alternate routes may be used for motor vehicles or construction equipment which cannot pass under the overpass at Highway 111/MicMac Boulevard. The Board's finding with respect to these sections is as follows: Sections 9.1 and 9.2 of the proposed development agreement deal with truck traffic. As explained to the Board by Roger Wells, a planner with the City of Dartmouth, the intent was both to limit the size of trucks which would visit the Kent store and to direct trucks along a specific route. A careful review of the wording indicates that the limit on size is restricted to vehicles which are stationed on the property and to vehicles which originate from the site. There is nothing to restrict larger vehicles from entering and exiting the site. Construction vehicles and construction equipment and all larger vehicles are required to use the specified truck route. There is no penalty specified if a vehicle does not comply with either section 9.1 or 9.2. In the Board's opinion, these two sections of the proposed development agreement do not meet the intent of Policy C-18. The appellant suggests the Board was mistaken in assuming it was the intention of the parties to prevent large vehicles from entering and exiting the site. Deliveries to a major retailer, as well as construction of the building, necessitate the use of large trucks. To prohibit them could defeat the purpose of the development agreement. It is difficult to read into Policy C-18 an intention to banish large trucks. It merely requires Council to consider the effect of truck routes on adjacent residential uses. The inclusion of Sections 9.1 and 9.2 in the development agreement reflects such consideration and so appears consistent with the amended municipal development strategy. Large trucks making deliveries to the Kent store are restricted to a specified route. Deliveries from the store would be more significant to nearby residential uses because they likely would occur on a regular and frequent basis. These are under the control of the Developer, and here truck size has been restricted. I would allow this ground of appeal and set aside the order that sections 9.1 and 9.2 be returned to council for reconsideration. Issue No. 4 - Insubstantial Matters Section 14 of the Development Agreement provides as follows: 14.0 Modifications 14.1 The following modifications to this agreement are deemed to be insubstantial and may be considered by means of a resolution by City Council: (a) any change in the permitted uses of the lands as specified in Section 2.1, except that the following uses are not permitted: - drinking establishments; - automotive sales, rental, service or repair; - adult entertainment uses and amusement centres; - fast-food restaurants; - outdoor storage and display uses including the temporary use of the lands by activities such as, but not limited to, flea market and amusement fairs; - industrial uses; (b) changes to the building's exterior design, size, materials, location on the site, or colour of the main walls (excluding accent trim colours), as specified in section 3.0; (c) any change in the location of the walkway and associated landscaping connecting the Horizon Court roadway to the building, as illustrated by Schedule "B". Such relocation may be considered if and when development plans for the abutting property are presented to the City prior to construction of the walkway by the Developer. The purpose of this relocation would be to coordinate and optimize pedestrian access between the two developments; (d) any change in the location or nature of outdoor storage or display, as specified in section 10.0; (e) any change in the signage for the development, as specified in section 12.0; and (f) any change in the permitted hours of operation, as specified in section 13.0. The identification between the parties of insubstantial matters is contemplated by s.73 of the Planning Act, the first three subsections of which provide: 73 (1) A council shall approve the entering into of an agreement, or an amendment thereto, pursuant to Section 55 or 56, by resolution. (2) An agreement may identify matters which are not considered by the parties to be substantial. (3) Before approving the entering into of an agreement, or the amending of an agreement, except an amendment of a matter in an agreement that the parties have identified as not substantial, the council shall hold a public hearing at which oral and written submissions shall be received. A resolution approving the amendment of an insubstantial matter is not subject to an appeal to the Board under s. 78 of the Act. However all matters approved by resolution of council, substantial or insubstantial, must be consistent with the municipal planning strategy pursuant to s. 45 of the Act: 45. The adoption by a council of a planning strategy shall not commit the council to undertake any of the projects therein suggested or outlined but shall prevent the undertaking by the council of any development within the scope of the planning strategy in any manner inconsistent or at variance therewith. Section 2 of the Act provides: 2 The purpose of this Act is to . . . (b) enable municipalities to assume the primary authority for planning within their respective jurisdictions, consistent with their urban or rural character through the adoption of municipal planning strategies, land-use by-laws and subdivision by-laws consistent with the policies and regulations of the Province; (c) establish a consultative process which will ensure the right of the public to have access to information and participate in the formulation of policies, regulations strategies and by-laws, including the right to be notified and heard before decisions are made under this Act; and (d) provide for the fair, reasonable and efficient administration of this Act, in order that sound development may be encouraged. The Board made the following findings with respect to s.14 of the Development Agreement: The proposed development agreement has specific provisions governing the use of the land, the hours of operation, the building’s exterior design, size, location on the site, location of the walkway and associated landscaping connecting the Horizon Court roadway to the site, location of outdoor storage, and signage. All of these items come within the various criteria under Policy C-18. Section 14 of the proposed development agreement, however, permits any of these matters to be modified and these modifications are deemed to be insubstantial and not subject to the normal proceedings under the Planning Act for amendments to development agreements, including an appeal to the Board. While some of the possible changes could be minor there is the potential for major changes to be made to the agreement without the need for public participation or the possibility of an appeal. It appears to the Board that section 14 of the proposed agreement is unnecessarily broadly worded if it were only meant to cover the situations which the City, Markborough and Kent told the Board were intended. The effect of this broadly worded section is to put in question whether the proposed development agreement is within the intent of the M.P.S. The Board continued: Under section 14 of the proposed development agreement the hours of operation could be changed and this would have a clear impact on the residential neighbourhood. The location of the building could be changed and this could impact negatively on the Appellant's tenants. The use of the building can be changed so long as it does not offend clause (a) of section 14.1. This still leaves a variety of uses which might well be incompatible with the residential neighbourhood. In the Board's opinion the inclusion of section 14 in the proposed development agreement means that those sections of the proposed agreement which attempted to address matters which would "reduce the effects of commercial development and operations on adjacent residential uses" have the potential of being nullified. The Board, therefore, determines that the proposed development agreement is not consistent with the intent of the M.P.S. The Board concludes: The effect of section 14 of the proposed development agreement permitting so much of the agreement to be modified means that Council's decision to enter into the proposed development agreement cannot be said to be reasonably consistent with the intent of the M.P.S. The concern of the Board is that s.14 is unnecessarily broadly drafted and may result in circumvention of the intention of the municipal planning strategy beyond the control of the Board. It points to potentials for abuse which the appellant argues are unduly speculative. If it is assumed, as it must be, that the municipality and the developer will continue to act in good faith, and that, moreover, the municipality will continue to exercise its primary authority for planning in a responsible manner, s. 14 does not appear unreasonable. As the legislature recognized in providing that insubstantial matters could be dealt with by resolution, it would be unduly onerous to the parties to require a public process for minor changes. Any change made must be consistent with the municipal planning strategy. Any attempt to make substantial changes in the guise of insubstantial ones would be a serious abuse. Even if the board's appeal jurisdiction were avoided, judicial review might be available. Perhaps the most obviously questionable provision in s.14 is the designation of change of use of the lands as an insubstantial matter, for the use to which lands are put is a primary planning concern. Considered pragmatically and in context, however, any changes of use which the parties could reasonably anticipate would be minor ones incidental to the main use of the building permitted by the development agreement in section 2.1.1(a): A commercial building used for the retail sale of hardware supplies, housewares and building materials, plus attached areas used for the retail sale of garden supplies and greenhouse plants. Policy C-19 of the municipal planning strategy specifies all uses which would be objectionable, and that list is duplicated in s.14. That provision makes it impossible for any changes in use to be inconsistent with policy C-19. Any other changes in use would likely be to offer services similar to those in the comprehensive range of retail services now offered in the immediate vicinity in MicMac Mall, with a similar impact on residential use. I do not consider s.14.1(a) respecting minor changes of use to be inconsistent with the intent of the municipal planning strategy. S. 14.1(b) refers to Changes to the building's exterior design, size, materials, location on the site, or colour of the main walls (excluding accent trim colours), as specified in section 3.0. Section 3.0 provides: 3.1 The building's size, exterior architectural design, articulation and materials shall be as generally illustrated by Schedules "B" and "C". 3.2 The building shall be a single storey structure not to exceed 127,800 square feet in gross floor area, plus an attached greenhouse and outdoor garden centre which shall not exceed a combined floor area of 12,700 square feet. 3.3 Exterior building materials shall be the following: (a) Building: - eastern (front) facade: tilt-up concrete panels - other facades: steel cladding - Roof treatment: Ethylene Propylene Diene Monomer (EPDM) membrane 3.4 The exterior colour of the building shall be off-white. The EPDM roof membrane and HVAC units shall be white or off-white. Green and yellow accent trim is permitted on the front facade only, and changes in accent trim colours may be permitted without the requirement for an amendment to this agreement. 3.5 The location (footprint) of the building on the lands shall be as generally illustrated by Schedule "B". Minor modifications to the location and size of the building may be permitted upon written approval of the development officer, provided that any exterior dimension does not increase by more than two (2) feet and the location (footprint) does not move by more than five feet in any direction. The Board's concern is that the size and location of the building could be changed and this could impact negatively on the respondent Can-Euro's tenants. Section 3.0 requires some interpretation. The Board's concerns would be justified if the "insubstantial" changes s.14.1(a) permits were as broad as they appear to be on its face. However, the parties can hardly have meant to include unrestricted changes in the size and location of the building as insubstantial matters; s.14.1(a) must be read in light of s.3.0. Section 3.5 defines "minor modifications" which may be permitted upon written approval of the development officer, subject to the requirement of a resolution of council in s.14.1. These are the measure of the insubstantial amendments to the agreement which council can make by resolution without involving the public process. The preliminary wording of s.14 makes it clear the intention was not to permit these changes merely at the discretion of the development officer without amending the agreement. Section 3.4 permits changes to the accent trim colours without amending the agreement, and these were specifically excluded in s.14.1 (b). Therefore the pragmatic interpretation is that the parties intended that the changes to size and location mentioned in s.14.1(b) be limited to the changes defined in s.3.5 which, given the contemplated size of the building, are neither substantial nor contrary to the intent of the municipal planning strategy. Section 14.1(c) permits changes to the walkway and associated landscaping "if and when" development plans for the abutting property are presented to the city to "coordinate and optimize pedestrian access between the two developments." It is not contrary to the intent of the strategy to consider such changes insubstantial. Changes in the location or nature of outdoor storage or display, signage and hours of operation are also included as insubstantial matters in sections 14.1(d), (e) and (f), Hours of operation and limitations on outdoor storage, display and uses are specifically included in Policy C-18 as matters which Council must consider in its consideration of the approval of development agreements as matters which "reduce the effects of commercial development and operations on adjacent residential uses". Therefore they are not inherently insubstantial matters and it is problematical to identify them as such. The Board was understandably concerned that the language of s.14 was too sweeping. Amendments of an insubstantial nature which were contemplated under these headings should have been identified. The question for the Board, and for this court, is whether the decision of council to adopt the development agreement in this form "cannot reasonably be said to be consistent with the intent of the municipal planning strategy." In the development agreement, apart from s.14, council has fulfilled the requirement that matters specified in the municipal planning strategy be considered. Provisions have been made with respect to each of the criteria that reflect a concern with mitigating the effect of the development on residential users. On the other hand, as s.14 now stands, serious consideration must be given to the Board's concern that amendments by resolution of council are possible which could nullify the mitigating effects of the municipal planning strategy on the development agreement. In particular, sections 10, 12 and 13 of the agreement, which relate to sections 14.1(c), (d) and (f), are broadly drawn. Once a "matter" has been identified by the parties as insubstantial, there is no obvious provision in the Planning Act for re-identifying it as substantial, even though a proposed amendment relating to it may be of major substance. Therefore it is important that insubstantial matters identified by the parties be described in specific terms. The municipal planning strategy must be considered in the context of the Planning Act, which includes the legislative intention that the public have the right to information and participation in all substantial matters under s.2(c), and that the Board have jurisdiction on appeal to determine whether a council has conformed with its municipal planning strategy. The identification of insubstantial matters under s.73(2) must not be used in a manner that permits the legislative intent to be defeated. These are perils and pitfalls to be recognized and avoided. It should be noted, however, that s. 73(2) merely says "an agreement may identify matters which are not considered by the parties to be substantial." That is a matter of convenience for the parties and, if not challenged, enables them to by-pass public process provisions. However it does not appear to be binding on affected persons who are not parties. When a designation of an insubstantial matter gives rise to an amendment of substance with effects contrary to the intention of the municipal planning strategy, or to other planning legislation, that amendment is subject to challenge. If the matter is outside the appeal process, there remains the prospect of judicial review. However, in my view these concerns are largely hypothetical in the present appeal because they do not relate to an actual amendment, and merely signal how the parties may choose to proceed if an amendment becomes necessary. The council, entrusted with the primary authority for planning, has a duty to refuse to enact a resolution approving an amendment which it considers contrary to the strategy, or it may refuse to act without public participation. The broad language of s.14 should be more specific, but it cannot support a finding that council's decision to enter the development agreement "cannot reasonably be said to be consistent with the intent of the municipal planning strategy." As Hallett J. said at p., 52 of Heritage Trust: Planning decisions often involve compromises and choices between competing policies. Such decisions, are best left to elected representatives who have the responsibility to weigh the competing interests and factors that impact on such decisions. So long as a decision to enter into a development contract is reasonably consistent with the intent of a municipal planning strategy the Nova Scotia Utility and Review Board has no jurisdiction to interfere with the decision (s.78(6)). ...Neither the Board nor this court should embark on their review duties in a narrow legalistic manner as that would be contrary to the intent of the planning legislation. Policies are to be interpreted reasonably so as to give effect to their intent; there is not necessarily one correct interpretation. This is implicit in the scheme of the Planning Act and in particular in the limitation on the Board's power to interfere with a decision of a municipal council to enter into development agreements. I would allow the appeal with respect to s.14 as well and set aside the Board's order that s.14 be returned to council for reconsideration. This is a tribunal appeal which I would allow without costs. Freeman, J.A. Concurred in: Roscoe, J.A. Pugsley, J.A. C.A. No. 127823 C.A. No. 127725 NOVA SCOTIA COURT OF APPEAL BETWEEN: MARKBOROUGH PROPERTIES ) INC. and J.D. IRVING LIMITED ) ) REASONS FOR Appellant ) JUDGMENT BY: ) FREEMAN, J.A. - and - ) ) CITY OF DARTMOUTH/HALIFAX ) REGIONAL MUNICIPALITY ) ) Respondent ) ) - and - ) ) CAN-EURO INVESTMENTS LTD. ) ) Respondent