Oakville (Town) v. Read

Oakville (Town) v. Read Collection Decisions of the Court of Appeal Date 2011-01-11 Neutral citation 2011 ONCA 22 Docket numbers C52175, M38488 Judges Simmons, Janet M.; Cronk, Eleanore Ann; MacFarland, Jean Louise Subject Civil Decision Content CITATION: Oakville (Town) v. Read, 2011 ONCA 22 DATE: 20110111 DOCKET: C52175 M38488 COURT OF APPEAL FOR ONTARIO Simmons, Cronk and MacFarland JJ.A. BETWEEN The Corporation of the Town of Oakville Respondent (Respondent) and Wayne Read and Laura Duncan c.o.b as Read Farms Applicants (Appellants) A. M. Robinson and A. Stephens, for the appellants Read Farms R. Andrew Biggart, for the respondent the Corporation of the Town of Oakville Heard: November 23, 2010 On appeal from the order of the Divisional Court (Justice Lynne Leitch, Justice Michael R. Dambrot and Justice Katherine Swinton) dated January 29, 2010. MacFarland J.A.: OVERVIEW [1] This is an appeal from the order of the Divisional Court (Leitch, Dambrot and Swinton JJ.) dated January 29, 2010 with leave of this court (Goudge, Sharpe and Armstrong JJ.A.) granted May 25, 2010. [2] The Divisional Court ordered that the decision of the Normal Farm Practices Protection Board (the “Board”) dated January 23, 2008, be set aside and that the appellants’ application to that Board be dismissed. [3] The Board had ordered that a zoning by-law from the Town of Oakville (the “town”), which does not include farming as a permissible use of the lands, be stayed as against the agricultural activities of Read Farms. In addition to setting aside the decision of the Board, the Divisional Court dismissed Read Farms’ application to the Board and awarded costs against the appellants in the sum of $22,000. The appellants appeal from that decision. [4] The appellants are tenants of developers who own the subject lands. Rather than pay rent for the use of the lands, they are paid by the landowner to farm the lands and are permitted to keep any proceeds earned from their operation. [5] The town describes this activity as a “tax grab”. Farm lands are subject to lower property taxes than are residential or industrial lands. The appellants respond that they are engaged in “assessment farming”, which is a legitimate farm practice that should be exempted from the town’s zoning by-law. THE FACTS [6] The subject lands are divided into two parcels, on either side of Rebecca Street in the town. These lands were once owned by Shell Canada Ltd. (“Shell”). The lands were formerly used as an oil refinery site and are said to be contaminated. In 1983, Shell remediated the lands and obtained Certificates of Approval from the Minister of the Environment under the Environmental Protection Act, R.S.O. 1990, c. E. 19 for the development of the lands. The hearing at the Board concerned only the northern lands. [7] Shell sold these lands in 1999 to Urban Core Builders Consortium Inc. which, in turn, entered into a one year farm lease on August 31, 2001, with Wayne Read, one of the appellants and a partner of Read Farms. While the terms of the lease provide only for a nominal payment of $2 by the lessee to the lessor, the lessor developer pays to the lessee farmer $300 per workable acre each year. This payment has been described as “reverse rent”. [8] In alternate years, the appellants grow winter wheat on the lands which they sell for human consumption but which they cannot sell for animal consumption. In the other years they rotate barley and clover crops which they do not harvest but plough under. These restrictions are the result of a Ministry of Environment Order, which also provides that the northern lands cannot be used for residential occupation. [9] But for the reverse rent payment from the owner of the lands to the appellants, the farming operations carried out on the subject lands each year would result in a financial loss to the appellants. [10] In July 2002, the owner of the lands was charged with: “Using land for a purpose not permitted, namely farming/growth of crops contrary to Town of Oakville By-law 1984-63.” The zoning by-law was passed by Council on November 22, 1984 and approved by the Ontario Municipal Board on August 1, 1985. The subject lands are presently zoned “E1” – employment zone 1, providing for office, daycare, drive through facility, hotel, light industrial, vehicle repair or vehicle dealership; “E2” – employment zone 2, providing for a broad range of employment uses, including outside storage, transportation terminal and waste processing station; and “T1” providing for other commercial uses. There is no mention of farming or agriculture being a permitted use. PROCEDURAL HISTORY [11] The appellants, after the charge was laid, brought the within application pursuant to s. 6(2) of the Farming and Food Production Protection Act, 1998, S.O. 1998, c. 1 (the “Act”) before the Board for a determination as to whether their operation was a normal farm practice for the purpose of the non-application of the municipal by-law. That charge remains in abeyance pending the outcome of this litigation. [12] Sections 6(1) and 6(2) of the Act provide: (1) No municipal by-law applies to restrict a normal farm practice carried on as part of an agricultural operation. (2) A person described in subsection (3) or a municipality may apply to the Board, in a form acceptable to it for a determination as to whether a practice is a normal farm practice for purposes of the non-application of a municipal by-law. [13] It was on the basis of this section that the appellants made their application to the Board. After it became aware of the application, the town brought a motion before the Vice Chair of the Board seeking an order dismissing the appellants’ application for want of jurisdiction by the Board or, in the alternative, an order refusing to hear the appellants’ application to the Board. The Board identified the issues on the motion as follows: 1. Was this a proper case for the Board to refuse to hear the application based upon a lack of jurisdiction? 2. Was this a proper case for the Board to refuse to hear the application because the main purpose of the application is other than to be able to carry on a normal farm practice, as provided in s. 6(5)? 3. Was this a proper case for the Board to refuse to hear the application pursuant to s. 8(1) of the Act because the application is frivolous, vexatious or not made in good faith? [14] The Board dismissed the motion. On the first issue, the Vice Chair held that there was sufficient information in the application to “attract the jurisdiction of the Board”. He opined that to allow the introduction of evidence by way of affidavit on a motion to challenge jurisdiction would amount to pre-judging the case without the benefit of a full hearing with viva voce evidence and cross-examination. He concluded that the appellants’ allegations of the essential elements required by s. 6 to establish jurisdiction of the Board were sufficient to “attract jurisdiction” and that the Board should proceed to a full hearing. I do not read this as deciding the issue of jurisdiction at this stage but, rather, as holding that there was sufficient information in the application to permit a hearing to proceed where the issue of jurisdiction might be fully explored on viva voce evidence. [15] As to the second issue, the town alleged that the primary reason for the appellants’ application was to reduce the landowner’s realty tax obligation to the town. There were significant tax savings to the landowner if the appellants were permitted to continue farming operations on these lands. On this issue, the Vice Chair concluded that the appellants had raised “agricultural issues” that were not without merit when viewed in the context of the factual situation. As the determinations made would have significant ramifications for farmers, developers and municipalities, he would not refuse a hearing under s. 6(5) of the Act. [16] As to the third issue, the Vice Chair concluded that the application raised novel and genuine issues and was not frivolous, vexatious or made in bad faith. [17] The town appealed this ruling to the Divisional Court. The appeal was dismissed. The farm owners argued there was no right to appeal the Vice Chair’s decision because it was an interim or interlocutory ruling rather than a final order. They also argued that the court ought not to entertain the appeal because it was premature. [18] The Divisional Court agreed with the farm owners’ position that it ought not to intervene. In its reasons, the Divisional Court concluded that s. 8(2) of the Act authorizes an appeal by any “party to a hearing” and that the Board had not yet held a hearing. All that the Board had decided was that it would hold a hearing on the merits. The court held that even if there was a right of appeal from a preliminary ruling, the Board had not made any ruling on its jurisdiction and it was careful not to make any finding on the merits. The Divisional Court concluded that the Board should be permitted to proceed with a hearing, wherein: The Board will be required in that process to interpret its own legislation and consider the nature of its own jurisdiction under that legislation. The Board ought to be given the opportunity to make that determination first before this Court intervenes. If the Board errs and exceeds its jurisdiction, there is an appeal right and any decision this Court may make at that stage will be informed not only by a full evidentiary record, but also by the views of the Board. [19] The matter then proceeded to a hearing before the Board and in reasons released January 23, 2008, the majority of the Board granted the application and ordered that the town’s By-law No. 1984-63 be stayed as against the applicants’ agricultural activities. In his dissenting reasons, the Chair of the Board (former Vice Chair) would have dismissed the application. [20] The town appealed the decision of the Board to the Divisional Court, which allowed the appeal and dismissed the appellants’ application. That court concluded, inter alia, that the majority reasons of the Board were so deficient as to constitute “no reasons”. Before this court, the appellants and the respondent agree that the majority reasons are deficient and that if this were the only error, the appropriate disposition would have been to remit the matter to the Board for re-hearing. I agree that the majority reasons of the Board are merely conclusory and lack any analysis of the evidence, the relevant statutory provisions and the issues. However, this case does not fall to be determined on the insufficiency of the majority’s reasons, nor was that the basis on which the Divisional Court allowed the appeal and dismissed the appellants’ application. [21] The Divisional Court went further and concluded that it was able to dispose of the appeal without the need to return the matter to the Board. As it stated in paras. 47 and 48 of its reasons: [47] But in the end, in my view, we are at liberty to decide for ourselves the question of whether or not Read Farms was conducting a normal farm practice because it is readily answered as a matter of law without the need to resolve any conflict in the evidence lead by the parties. Since our conclusion does not depend on any evidence that is in dispute, I will not further review the evidence lead in relation to this issue. [48] The matter of law that I have in mind involves the proper interpretation of the Act. While ordinarily this Court is obliged to defer to a tribunal’s interpretation of its own statute, no deference is owed in a case such as this one where the majority makes no effort to explain either the meaning they attribute to the language of their home statute or its application to the evidence before them. [22] The court went on to conclude that as a matter of law, “farming” was not a “farm practice” and further that normal farm practices are “farming techniques and methods that are of a requisite standard or established and followed by similar agricultural operations (see Bluewater at para. 50).” The court concluded that farming merely describes the use to which the land is put. The appellants’ position was simply that they were prohibited from farming. The court held at para. 53 that s. 6 of the Act was intended as a “shield to protect legitimate farmers with legitimate farming operations from having the use of normal farm practices restricted.” [23] Essentially, the Divisional Court applied the Act and concluded that the appellants’ farming operation was not a “normal farm practice” and hence s. 6(1) did not apply. The court allowed the appeal, set aside the decision of the Board and dismissed the application. [24] For the reasons that follow, I agree with the disposition made by the Divisional court and I would dismiss the appeal. ANALYSIS [25] The analysis must begin with a consideration of the zoning by-law that is the subject of the application and which governs the use of the lands in question. The subject lands are presently zoned “E1” – employment zone 1; “E2” – employment zone 2; and “T1” providing for other commercial uses. There is no mention of farming or agriculture being a permitted use. [26] The appellants brought their application under s. 6(2) of the Act and sought an order from the Board that would permit them to carry on their farming operation on the subject lands. In my view, in effect, they sought to be exempted from the zoning by-law in circumstances where they have not tried to establish a legal non-conforming use. [27] In considering the purpose of the Act, regard must be had to the preamble (see Hill and Hill Farms Ltd. v. Bluewater (Municipality) (2006), 82 O.R. (3d) 505 (C.A.), at para. 19). [28] The preamble provides: It is desirable to conserve, protect and encourage the development and improvement of agricultural lands for the production of food, fibre and other agricultural or horticultural products. Agricultural activities may include intensive operations that may cause discomfort and inconveniences to those on adjacent lands. Because of the pressures exerted on the agricultural community, it is increasingly difficult for agricultural owners and operators to effectively produce food, fibre and other agricultural or horticultural products. It is in the provincial interest that in agricultural areas, agricultural uses and normal farm practices be promoted and protected in a way that balances the needs of the agricultural community with provincial health, safety and environmental concerns. [29] The preamble speaks of protecting the development and improvement of agricultural lands in agricultural areas. It does not purport to extend protection to lands that have been legitimately zoned for non-agricultural purposes by the town where the appellants do not have legal non-conforming use status. [30] It is readily apparent that the statute is concerned with the activities and practices that occur on agricultural lands. It is about farming – and about balancing the interests of farmers in carrying out their farming operations with the interests of adjacent landowners who may be impacted by those practices. [31] It is clear from the Hansard debates that the Act seeks to achieve a balance between the rights of farmers and the rights of neighbouring residents. During the debate of Bill 146 (which became the current Act), several members commented on this balance to be struck by the new legislation. In particular, one of the members commented: In closing, this bill will lead to better, more informed bylaws. It will improve the public understanding regarding agriculture in Ontario. This bill seeks to establish a balance between the right of farmers to conduct their business and the rights of residents to live in our rural communities. [32] The Act is primarily concerned with nuisance lawsuits by neighbouring residents. This Act replaced the former Farming Practices Protection Act, R.S.O. 1990, c. F.6 and added a wider variety of nuisances that would be covered. This is also confirmed in the preamble, which recognizes that agricultural activities may cause discomfort and inconveniences to those on adjacent lands. As one member of the legislature stated: “We want to be able to make sure that with those who move from small urban or large urban areas into the farm area, for reasons usually of quality of life, that won’t affect the ability of farmers to carry out their chosen field, so to speak.” [33] With respect to s. 6(1) of the Act, the Hansard debates reveal that the main concern over municipal by-laws was that they might become “unduly restrictive” or “unnecessarily restrictive” and therefore interfere with legitimate agricultural operations. One member of the legislature put it this way: The new act would deal constructively with emerging concerns around unduly restrictive municipal bylaws. The ministry, farm groups and municipalities will work together to increase awareness among municipal decision-makers about modern farming practices so that the future bylaws can be drafted with full recognition of the demands of running a farming operation. [34] The numerous references in the debates about the concern for “unduly restrictive” or “unnecessarily restrictive” municipal by-laws make it clear that the Act was intended to deal with municipal by-laws that limit the ability of normal farm practices to be carried out on land that was meant for farming purposes. A municipal zoning by-law that has designated land as non-farming land does not fall within the purview of s. 6(1) of the Act, as it is not a by-law that is unduly restrictive of legitimate farming practices. Rather, the zoning by-law is a complete and legitimate prohibition on the use of the land for farming purposes. To read the Act as being applicable to zoning land use would mean that farmers could set up farms wherever they wanted, even in areas that have been designated for other legitimate land use purposes. That could not have been the intention of the legislature. [35] Section 1(1) of the Act defines such terms as “agricultural machinery and equipment”, “agricultural operation”, “farmer” and “normal farm practice”. Similarly, s. 1(2) speaks to interpretation and lists what the terms “agricultural operation”, and “agricultural, aquacultural, horticultural or silvicultural operation” shall be construed to include. A list of activities follows – all of which might generically be referenced to activities which relate to various farming activities – such as draining, irrigating or cultivating land; the production of eggs, cream and milk; ground and aerial spraying; and activities that are a necessary but ancillary part of an agricultural operation such as the movement of transport vehicles for the purpose of the agricultural operation. These activities presuppose that farming itself is permitted on the land. [36] Section 2 of the Act provides that a farmer is not liable in nuisance to any person for a disturbance resulting from an agricultural operation carried on as a normal farm practice. The Board itself, which is constituted under the Act, is the “Normal Farm Practices Protection Board”. As the name implies, it is there to protect “normal farm practices”. It hears applications from persons affected by a disturbance from an agricultural operation. [37] As noted above, s. 6(1) provides that: “No municipal by-law applies to restrict a normal farm practice carried on as part of an agricultural operation.” An application to the Board under s. 6 may be made by farmers or by those who want to engage in a normal farm practice. [38] The Act is not concerned with land use; it presupposes that the use of the land is properly agricultural. Nowhere in the Act is there any provision to change land use to agricultural where it is not otherwise permitted. The jurisdiction of the Board to deal with municipal by-laws is narrow. Section 6(15) sets out the four factors the Board must consider in determining whether a practice is a normal farm practice: 1. The purpose of the by-law that has the effect of restricting the farm practice. 2. The effect of the farm practice on abutting lands and neighbours. 3. Whether the by-law reflects a provincial interest as established under any other piece of legislation or policy statement. 4. The specific circumstances pertaining to the site. [39] Section 7 provides that municipal by-laws that have the effect of restricting the times during which a vehicle may travel will not apply where the vehicles are engaged in farm related activities and there is no road that could serve as a reasonable alternative. [40] Section 9 provides that the Board’s decisions are to be consistent with directives, guidelines or policy statements issued by the Minister of Agriculture, Food and Rural Affairs (the “Minister”). [41] What this application before the Board really sought was a ruling that would permit the appellants to carry on their farming operations on lands that are not zoned for farming. It had nothing to do with whether their practice was a “normal farm practice” for the purpose of the non-application of the zoning by-law. In my view, the Board has no jurisdiction to make such an order and the Act has no application in these circumstances. As the Vice Chair (now Chair) of the Board noted in his decision on the town’s preliminary motion on jurisdiction: Although this Board has made a number of decisions giving relief to farmers under Section 6 of the Act with respect to the regulatory portions of zoning by-laws, I am not aware of any case before this Board where relief has been granted in relation to the use provisions of a zoning by-law. [42] That is precisely the difference. The Board may have power to order that some restrictive provision of a zoning by-law does not apply so as to restrict a normal farm practice which is carried on as part of an agricultural operation, but it has no jurisdiction to grant relief from the use provisions of a zoning by-law. [43] As to the appellants’ submission that this court’s decision in Bluewater provides to the contrary, that is a misreading of that case. Bluewater had nothing to do with land use. All that Bluewater determined was that the term “municipal by-law” in s. 6 included a municipal zoning by-law. In Bluewater, farming was permitted by the zoning by-law and what the applicant sought was a variance from the setback requirements of the zoning by-law – a case very different from the case before us. [44] The modern approach to statutory interpretation requires the courts to consider the applicable legislation in its entirety and to read the impugned provision harmoniously with the scheme of the statute in question. In addition to the preamble making reference to “agricultural lands”, s. 10 of the Act makes reference to certain regulations that the Act allows the Minister to make. Section 10(a)(iii) says that the Minister may make regulations, “prescribing, for the purpose of the definition of ‘agricultural operation’, other agricultural activity, conducted on, in or over agricultural land” (emphasis added). [45] The fact that the normal farming practice must be a practice that is carried out on land for which farming is permitted is further confirmed by s. 6(16) of the Act, which sets out the three types of decisions that the Board can issue. Section 6(16)(c) says that the Board can determine that a farm practice will be a normal farm practice “if the farmer makes specific modifications in the practice within the time set out in the decision.” If the subject lands in question are not zoned for agricultural purposes, there is nothing a farmer can do to bring his farm practice in compliance with the definition of “normal farm practice” in the Act. This is because s. 6(1) deals only with restricted practices, not with land uses. [46] Therefore, when s. 6(1) is read in conjunction with the preamble and other provisions of the Act, it is readily apparent that the Board only has jurisdiction to consider the applicability of by-laws to normal farming practices that are carried out on agricultural lands. The Act does not permit circumvention of legitimate municipal planning regarding the land use designations of various lands. [47] For these reasons, it is my view that the Act has no application in these circumstances and I would dismiss the appeal. [48] Costs to the respondent, fixed in the sum of $15,000, inclusive of disbursements and applicable taxes. RELEASED: January 11, 2011 “J. MacF.” “J. MacFarland J.A.” “I agree Janet Simmons J.A” “I agree E. A. Cronk J.A.”