Ottawa (City) v. Capital Parking Inc.

Ottawa (City) v. Capital Parking Inc. Collection Decisions of the Court of Appeal Date 2002-04-24 Docket numbers C37159 Judges Doherty, David H.; Weiler, Karen Merle Magnuson; Charron, Louise Vivianne Subject Civil Decision Content DATE: 20020424 DOCKET: C37159 COURT OF APPEAL FOR ONTARIO DOHERTY, WEILER and CHARRON JJ.A. BETWEEN: ) ) Barbara A. McIsaac THE CORPORATION OF THE CITY ) and Michael Polowin OF OTTAWA ) for the appellant ) Appellant ) ) - and - ) Terry McEwan ) and Janet Bradley CAPITAL PARKING INC. ) for the respondent ) Respondent ) ) Heard: February 27, 2002 ) On appeal from the decision of McGarry J. dated August 20, 2001, reported at 21 M.P.L.R. (3d) 87, quashing the conviction imposed on the respondent by Gireault J.P., October 25, 1999 and upheld by White P.C.J., March 14, 2000. DOHERTY J.A.: I [1] The respondent, Capital Parking Inc. (“Capital”), has operated a public parking garage at 151 Bay Street (the “property”) in the City of Ottawa since 1991. Under Ottawa’s present comprehensive zoning by-law, enacted in 1975 (By-Law Z-2K), a public parking garage cannot be operated at that location. Prior to 1975, the comprehensive zoning by-law (By-Law A2-64) permitted the operation of a public parking garage. It is common ground that the property has been used as a public parking garage since 1974 and that Capital’s use of the garage for public parking is a legal non-conforming use within the meaning of s. 34(9) of the Planning Act, R.S.O. 1990, c. P.13, as amended. [2] Section 17 of Part II of By-Law Z-2K applies to all parking spaces in the city, including those in public parking facilities. Counsel referred to s. 17 as a performance standard by-law. It includes requirements that aisles in parking facilities have a minimum width and that those aisles provide unobstructed access from the parking space to a driveway. Identical provisions were found in By-Law A2-64. [3] When Capital took over the operation of the parking facility in 1991, it decided to switch its operations to valet parking. Valet parking permitted Capital to park cars in the aisles of the parking facility thereby increasing its revenues. The valet parking led to complaints by condominium owners, who used parking facilities in the lower levels of the parking garage, that the aisles on the upper levels were obstructed by parked cars. Subsequently, the Corporation of the City of Ottawa (the “City”) charged Capital with breaching s. 17 of By-Law Z-2K by: [F]ailing to provide the required aisle width and obstructing access to the required aisle. [4] An agreed statement of facts was filed at trial. The last three paragraphs succinctly set out the competing positions and the issue to be decided: 9. Capital Parking Inc. has pleaded not guilty to the charge claiming that, because its use as a public parking lot is a legal non-conforming use, the provisions of the zoning by-law do not apply. 10. The City claims that, even though the use is legally non-conforming, the performance standards of Ottawa’s zoning by-law still apply. 11. The issue before the Court is whether the Defendant, which enjoys a legal non-conforming use as a public garage, is subject to the performance standards of Ottawa’s zoning by-law. [5] The Justice of the Peace convicted Capital concluding that s. 17 of By-Law Z-2K applied to Capital’s legal non-conforming use. In her view, s. 17 did not diminish the legal non-conforming use of Capital. [6] Capital’s appeal was dismissed by His Honour Judge White (Ontario Court of Justice) who said: … section 34(9) of the Planning Act, while providing that a municipality may not pass a zoning bylaw which prevents the continuation of a valid nonconformings use, does not prohibit a municipality from regulating such use, provided of course that the regulation is not merely intended to defeat or restrict such nonconforming use. [7] Capital was successful on its further appeal to the Ontario Superior Court of Justice. McGarry J. concluded that none of By-Law Z-2K could apply to property that is exempt from the by-law as a legal non-conforming use. McGarry J. opined that any attempt by a municipality to regulate a legal non-conforming use must find its authority in something other than s. 34 of the Planning Act. [8] Carthy J.A. granted leave to appeal from the decision of McGarry J. I would allow the appeal and restore the conviction. II [9] Ottawa enacted By-Law Z-2K under the authority of s. 34(1) of the Planning Act. That section provides in part: 34.(1) Zoning by-laws may be passed by the councils of local municipalities: 1. For prohibiting the use of land, for or except for such purposes as may be set out in the by-law within the municipality or within any defined area or areas or abutting on any defined highway or part of a highway. …. 4. For regulating the type of construction and the height, bulk, location, size, floor area, spacing, character and use of buildings or structures to be erected or located within the municipality or within any defined area or areas or upon land abutting on any defined highway or part of a highway, and the minimum frontage and depth of the parcel of land and the proportion of the area thereof that any building or structure may occupy. [10] The statutory authority for Capital’s legal non-conforming use rests in s. 34(9)(a) of the Planning Act: (9) No by-law passed under this section applies, (a) to prevent the use of any land, building or structure for any purpose prohibited by the by-law if such land, building or structure was lawfully used for such purpose on the day of the passing of the by-law, so long as it continues to be used for that purpose; III [11] I do not understand Capital to argue that the City could not regulate the use of the property as a public parking garage by means of performance standards in a zoning by-law when that use was itself permitted by the by-law. Prior to the enactment of By-Law Z-2K, the operator of the public parking facility on the property was required to comply with the performance standards in By-Law A2-64. Capital does argue, however, that where the lawfulness of the use of the property as a public parking facility flows from its status as a legal non-conforming use, the City cannot regulate that use under the authorities of s. 34 of the Planning Act. Capital recognizes that it could not have lawfully operated a valet parking facility under By-Law A2-64 which permitted use of the property as a public parking facility, because of the limits imposed by the performance standards. Capital submits, however, that it can lawfully operate a valet parking operation when its entitlement to use the property as a public parking facility rests on its legal non-conforming use status. [12] Capital’s right to operate a public parking facility on the property has its root in By-Law A2-64 which permitted that use, and in the actual use of the property for that purpose at the time that By-Law Z-2K was passed. The issue that must be decided on this appeal is whether subjecting Capital to performance standards identical to those found in By-Law A2-64 can be said to “prevent” the use of the property as a public parking garage within the meaning of s. 34(9) of the Planning Act. IV [13] Capital relies on Central Jewish Institute v. The Corporation of the City of Toronto, [1948] S.C.R. 101, to support its claim that no part of a zoning by-law can apply to regulate a legal non-conforming use. In Central Jewish Institute, supra, Toronto applied for an injunction prohibiting the Institute from using its property to operate a school. Part of that property was being used as a school when the City passed a by-law prohibiting that use. The central issue before the court was whether the Institute’s use of part of the building as a school entitled it to claim legal non-conforming use status for the entire property. [14] Section 406(2)(a) of The Municipal Act, R.S.O. 1937, c. 255 read: No by-law passed under this section shall apply to any land or building which, on the day of the passing of the by-law, is used or erected for any purpose prohibited by the by-law, so long as it continues to be used for that purpose …. [15] The Supreme Court of Canada unanimously held that the exemption from the by-law applied to the entire building and not merely to the use as it was manifested when the by-law was passed. Capital relies particularly on the words of Kellock J. at p. 113: I agree with the view of the statute taken by my brother Rand that the use being made of the building here in question on the day of the passing of the by-law was sufficient to bring it within the very words of s. 406(2) and as the building and the lands appurtenant were being used by the appellant for a purpose not permitted by the by-law, the by-law does not apply to them. [Emphasis added.] [16] Capital contends that the last sentence in the above-quoted passage is dispositive of this appeal. McGarry J. agreed with this submission stating at para. 10: [10] However, I take note that in Jewish Central Institute, supra[,] that the Court, as noted by Kellock J., did not apply the by-law. That holding is relevant to my decision as I interpret that decision to mean that a whole zoning by-law is not applicable to a building when it is determined that the lawful non-conforming use exemption applies …. [17] I do not think that the words of Kellock J. dictate the result in this case. In Jewish Central Institute, supra, the by-law under attack contained only a prohibition. Once that prohibition was found inapplicable because of the legal non-conforming use exemption, then there was nothing left of the by-law. The court was not called upon to decide whether performance standards in a zoning by-law regulating a permitted use must also fall when confronted by a legal non-conforming use exemption. [18] Jewish Central Institute, supra, is also distinguishable on its facts. In Jewish Central Institute, supra, there was no suggestion that the use of the property as a school was in any way regulated by a by-law or otherwise when the school operation was undertaken. This case would be closer to Jewish Central Institute, supra, on its facts if the performance standards found in the present by-law had no equivalent in the predecessor by-law. [19] Finally, in considering the effect of the language used by Kellock J., regard must be had to the change in the legislation. Kellock J. was applying a statute that began with the words “no by-law under this section shall apply to any land or building …”. He was clearly tracking the language of the statute in his reasons. The comparable language of s. 34(9) speaks in more circumscribed terms. It directs that no by-law applies “to prevent the use of any land, building or structure …”. To the extent that a by-law passed under s. 34 of the Planning Act does not prevent the use of the property it would not appear to be caught by the legal non-conforming use exemption as it is currently framed, even if it has some impact on the use of the property. [20] Capital also relies on City of Toronto v. San Joaquin Investments Ltd. (1978), 18 O.R. (2d) 730 (H.C.J.), aff’d. on other grounds (1979), 26 O.R. (2d) 775 (C.A.), leave to appeal to S.C.C. refused (1980), 26 O.R. (2d) 775n. In that case the City of Toronto sought an injunction prohibiting the defendants from operating a parking lot on certain property owned by them. Steele J. held that the defendants had used the property as a parking lot prior to the enactment of the by-law prohibiting that use. Under the prior by-law, the property could be used as a parking lot. Steele J. concluded that the defendants had established a legal non-conforming use. [21] The City then argued that when the defendants used the property as a parking lot under the previous by-law, they had not complied with all of the regulations in that by-law referable to the use of the property as a parking lot. The City argued that non-compliance with these regulations rendered the defendants’ use of the property unlawful and removed it from the legal non-conforming use exemption. Steele J. rejected this argument, at pp. 741-742, holding that it was the use of the property and not the regulations governing that use which determined whether the property was entitled to the legal non-conforming use exemption. [22] The issue raised here is different than that considered by Steele J. The City does not contend that the property should lose its legal non-conforming use status because an operator failed to comply with performance standards in effect prior to the enactment of By-Law Z-2K. Rather, it submits that requiring Capital to adhere to performance standards in By-Law Z-2K that are identical to those in place when Capital’s entitlement to a legal non-conforming use exemption arose does not “prevent” the use of the property for the purpose for which it was used when By-Law Z-2K was passed. [23] Capital also places reliance on MacNutt v. The Queen, [1972] 5 W.W.R. 402 (B.C. Co. Ct.). Mr. MacNutt operated a trucking and hauling business for many years before the passing of a by-law which restricted the use of his property to residential purposes. The same by-law imposed various regulations on the use of the property, including a requirement that material and equipment be stored within buildings. Prior to the passing of this by-law, Mr. MacNutt’s use of his property was not subject to any municipal zoning and so was “entirely unrestricted”. [24] Mr. MacNutt was charged with breaching some of the regulations in the by-law, including the requirement that all equipment be stored within a building. He was convicted at trial. The County Court judge set aside the conviction on the basis that no part of the zoning by-law could restrict Mr. MacNutt’s use of his property. The appeal judge said at pp. 404-405: I am quite satisfied that the appellants have failed to observe the restrictions on the use of their land imposed by these sections of the bylaw, but these restrictions can only, in my opinion, be said to apply to permitted uses. They are not of general application, and cannot operate so as to regulate the manner in which a non-conforming use is enjoyed, or to abate a nuisance occasioned thereby … … It seems to follow inexorably that land to which a valid non-conforming use is attached is in the same position as unzoned land so far as regulation is concerned. It is outside the ambit and scope of a zoning by-law, though not, of course, immune from bylaws which deal with general matters such as health and the abatement of nuisances. [Emphasis added.] [25] MacNutt, supra, has been applied in other cases: e.g. Princeton (Town) v. Hepner (1989), 47 M.P.L.R. 10 at 17 (B.C. S.C.). Certainly, the language in the above-quoted passage is broad enough to support the position taken by Capital. There is, however, one significant difference between MacNutt, supra, and this case. Before the enactment of the by-law containing the regulations under which Mr. MacNutt was charged, there were no restrictions on his right to use his property for the purpose of conducting his business. In this case, the right of the operator of the property to use it as a public parking facility was subject to restrictions immediately prior to the enactment of By-Law Z-2K. Those restrictions were set out in the performance standards of By-Law A2-64 and were identical to the restrictions found in By-Law Z-2K. [26] The distinction between unrestricted and restricted use at the time the legal non-conforming use arises was important to the reasoning in MacNutt, supra. In MacNutt, supra, the appeal judge viewed the by-laws and regulations in the by-laws as interfering with Mr. MacNutt’s unrestricted right to use the property for the purposes of his business. He was disinclined to apply the regulations against Mr. MacNutt because they restricted a previously unrestricted right of usage. Here the operator of the public parking facility on the property did not have an unrestricted right of use prior to the enactment of By-Law Z-2K prohibiting the use. Applying performance standards identical to those previously in place would not seem to impose any new restrictions on the use of the property. [27] Capital further submits that its decision to use valet parking is nothing more than a decision to park more cars in the public parking facility than had previously been parked there. Capital relies on a long line of authority that holds that the mere intensification of a legal non-conforming use does not deprive the property of its legal non-conforming use status: e.g. Central Jewish Institute, supra; Magdalena’s Rest Home Ltd. v. Etobicoke (City) (1992), 12 M.P.L.R. (2d) 316 (Ont. Gen. Div.); Rogers, Canadian Law of Planning and Zoning, looseleaf, (1973) at pp. 210.42-210.44; Kagan, “But I Do Not Want to be Legal” (1993), 13 M.P.L.R. (2d) 252 at 253-260. [28] The City does not quarrel with the proposition that an increase in use does not necessarily result in the loss of a legal non-conforming use status. It argues, however, correctly in my view, that this line of authority is not dispositive of the issue raised here. None of those cases where the use was intensified involve a situation in which the more intensive use would have been unlawful immediately before the legal non-conforming use status came into being. It is one thing to claim that restrictions introduced for the first time in zoning by-laws enacted when a property has a legal non-conforming use status cannot be used to limit that use, and quite another thing to say that restrictions that applied to the property prior to it acquiring a legal non-conforming use status cannot be continued after the property acquires that status. V [29] The case law does not answer the question raised on this appeal, but it does show the way to that answer. As Binnie J. recently observed in Saint-Romuald (City) v. Olivier (2001), 204 D.L.R. (4th) 284 at paras. 1 and 34 (S.C.C.), the resolution of disputes over the right to and the extent of a legal non-conforming use requires the courts to balance the individual’s right to the continued use and enjoyment of property with the broader planning interests of the community. [30] The legal non-conforming use doctrine rests on the principle that zoning by-laws which introduce new restrictions on the use of property should not deny landowners their right to use their property in the same manner they did prior to the introduction of those restrictions. In Saint-Romuald (City), supra, at para. 39, Binnie J. stressed that the characterization of an acquired right could not free the owner from the constraint of the actual use at the time the limitation was introduced, but should also not be so restrictive as to deny any flexibility in the evolution of that use. Earlier at para. 19 he said: [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). Gonthier J. also acknowledges (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” … and adapt to the demands of the market or technology that are relevant to it … [Emphasis added.] [31] In his dissenting reasons, Gonthier J. said at paras. 62-63: [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 [citations omitted] and adapt to the demands of the market or the technology that are relevant to it [citations omitted]. However, its original nature must always remain the same. [Emphasis in original.] [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 expectation flowing naturally from the exercise of that concrete use can be taken into account …. [Emphasis added.] [32] Saint-Romuald (City), supra, was concerned with how much an operator could alter the use of the property and still claim a legal non-conforming use exemption from the zoning by-law. The issue raised by this appeal is how far a municipality can use its zoning power to regulate use without interfering with the operator’s legal non-conforming use. I see these two questions as different sides of the same coin. The approach adopted by both Binnie J. and Gonthier J. can be applied to determine whether the performance standards contained in By-Law Z-2K interfere with Capital’s acquired rights of usage. [33] To borrow the words of Gonthier J., if the performance standards altered the “nature” of the legal non-conforming use to which the property could be put, then those performance standards would interfere with Capital’s acquired rights. Similarly, and again borrowing the words of Gonthier J. (as Binnie J. did), if the performance standards did not alter the nature of the use of the property, but did interfere with Capital’s “real and reasonable expectations” flowing from the use to which the property was put before By-Law Z-2K was enacted, then again those performance standards would interfere with Capital’s acquired rights. [34] Just as with the question of whether an operator has gone beyond the scope of his or her acquired rights in altering the usage, the question of whether the municipality has interfered with those acquired rights can only be determined on a case-by-case basis. The crucial factual feature of this case is that the present performance standards are identical to the standards under the previous by-law. [35] Immediately prior to the enactment of By-Law Z-2K, the property was subject to performance standards that were identical to those found in By-Law Z-2K. It cannot be said that including those same performance standards in By-Law Z-2K in any way changed the nature of the actual use of the property. Quite the contrary, by including identical performance standards in By-Law Z-2K, the City maintained the nature of the actual use of the property. Nor can Capital maintain that when By-Law Z-2K was passed, the operator of the property had a “real and reasonable expectation” that it would be entitled to operate a public parking facility free of the very regulations that existed under By-Law A2-64. The operator’s only real and reasonable expectation could have been that it would be entitled to continue operating its business under the new by-law as it had under the old by-law. That operation included compliance with the performance standards. In fact, that is precisely what the operator did, and it was not until 1991 when Capital arrived on the scene that the operator claimed it was not required to comply with the performance standards. [36] I am satisfied that the performance standards in By-Law Z-2K do not prevent Capital from exercising its right to use the property for the purpose for which it was being used immediately before By-Law Z-2K was passed. To accept Capital’s argument would be to hold that a legal non-conforming use can be more than a shield against interference with acquired rights, but that it can also create new rights. I reject that argument. VI [37] I would allow the appeal, set aside the order of McGarry J. and restore the conviction. Counsel agree that this is not a case for costs. RELEASED: “APR 24 2002” “DD” “Doherty J.A.” “I agree K.M. Weiler J.A.” “I agree Louise Charron J.A.”