Municipal Planning and
Liability: When can a Town
be Sued?
Presentation to Professional Municipal Administrators
April 21, 2016
STEPHEN F. PENNEY, PARTNER
SYDNEY B. BLACKMORE, ASSOCIATE
© 2016 Stewart McKelvey all rights reserved
Overview
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Authority to Plan
– Legislative authority
Challenges to Planning Decisions
– Appeals under s. 42 of URPA 2000
– Common types of challenges
Policy Decision Immunity
Municipal Immunity
Allegations of Bad Faith:
– Bias
– Misfeasance of Public Office
Hypothetical A
Hypothetical B
Hypothetical C
Planning and Zoning: Best practices
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Introduction
Zoning is a form of planning by a municipality,
but the term “planning” is a concept of broad
significance. It seeks to promote the public
interest both by regulating the use of private
property and by directing future development in
the municipality…
• Ian MacF. Rogers, QC and Alison S. Butler, QC, Canadian Law of
Planning and Zoning , 2nd ed, vol 1 (Toronto: Thomson Reuters
Canada Limited, 2012)
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Authority to Plan
In NL, legislation assigns a municipal council or regional
authority the authority to plan and exercise control over
municipal land use.
Planning legislation contemplates overall planning for the
entire territory of the municipality via a municipal plan,
whereas zoning by-laws generally define and restrict the
types of land uses permissible in specific areas of the
municipality.
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Authority to Plan
Municipal planning and development processes are prescribed
by Part II and Part III of the Urban and Rural Planning Act, 2000
(the “URPA 2000”):
• allows municipalities to devise and adopt a municipal plan,
also prescribes the process whereby a municipality may
amend a municipal plan
Part V of the URPA 2000 grants the ability of a municipality to
enact zoning by-laws and Regulations.
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Authority to Plan
There are other provincial statutes that affect or govern planning matters:
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Building Standards Act, RSNL 1990, c B-8;
Buildings Accessibility Act, RSNL 1990, c B-10;
City of Corner Brook Act, RSNL 1990, c C-15;
City of Mount Pearl Act, RSNL 1990, c C-16;
City of St. John’s Act, RSNL 1990, c C-17;
Colonial Building Act, RSNL 1990, c C-23;
Condominium Act, RSNL 1990, c C-29;
Environmental Protection Act, RSNL 2002, c E-14.2;
Expropriation Act, RSNL 1990, , c E-19;
Forestry Act, RSNL 1990, c F-23;
Historic Resources Act, RSNL 1990, c H-4;
Labrador and Inuit Land Claims Agreement;
Land’s Act, RSNL 1991, c 36;
Municipalities Act 1999, RSNL 1999, c M-24;
Pippy Park Commission Act, RSNL 1990, c P-15;
St. John’s Municipal Council Parks Act, RSNL 1990, c S-4;
Uniform Building and Accessibility Standards Act, SS 1983-84, c U-1
Also, the Occupancy and Maintenance Regulations, CNLR 1021/96 apply to municipalities and
provide requirements relating to buildings, structures, dwellings, fences, sheds, garages,
parking lots, driveways, landscaping
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Challenges to Planning
Decisions
Appeals to Regional Appeal Board
• Municipality has erred in its application of its municipal plan, regulations, bylaws when making a decision
• Insufficiency of reasons in rejecting an application
Judicial Review
• Councillors showing conflict of interest/bias when making a decision
• Insufficiency of reasons in rejecting an application
Lawsuits/Municipal liability
• Councillors showing conflict of interest/bias when making a decision
• Councillors exhibited bad faith in making a decision
• Negligence, negligent misrepresentation, interference with contractual
relations
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Challenges to Planning
Decisions
Some claimants will allege that a municipality has improperly decided a
zoning or planning issue.
Part VI of URPA 2000 allows appeals of planning decisions to be heard by a
ministerially appointed regional appeal board. There are four Regional Appeal
Boards:
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West Newfoundland Regional Appeal Board
Central Newfoundland Regional Appeal Board
Eastern Newfoundland Regional Appeal Board
Labrador Regional Appeal Board
The appeal period is 14 days measured from the time the applicant
receives the decision.
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Challenges to Planning
Decisions
Section 42(1) of the URPA 2000 allows the prescribed zoning appeal
board to hear appeals regarding the following 4 prescribed zoning
matters:
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an application to undertake a development;
a revocation of an approval or a permit to undertake a development;
the issuance of a stop work order; and
a decision permitted under this or another Act to be appealed to the
board.
Per s. 42(2), a decision of a council, regional authority or authorized
administrator to adopt, approve or proceed with a plan, scheme,
development regulations and amendments and revisions of them is final
and not subject to an appeal.
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Challenges to Planning
Decisions
Case law upholds that where the legislature has seen fit to
create zoning appeal boards, the court will often give
deference to the board’s decisions and not usurp its
jurisdiction.
However, s. 46(2) of the URPA 2000 does allow for zoning
appeal board decisions to be appealed to court on a
“question of law or jurisdiction”.
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Judicial Review
The law requires that Councillors not bring a closed mind to any
municipal decision-making process.
Seanic Canada Inc v St. John’s (City), 2014 NLTG 7
• Seanic applied to the City to rezone the property in order to
construct a seniors/ assisting living residence. The majority of
council rejected the application.
• Seanic applied for judicial review citing conflict of interest, bias,
prejudgment and inadequacy of reasons
• Court allowed the application, determined one councillor had a
“closed mind” on the rezoning application as councillor testified that
his mind was “made up” before the council meeting to vote on the
proposed rezoning application
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Judicial Review
Seanic Canada Inc v St. John’s (City), 2014 NLTG 7
• Court sent decision back to the City to decide, noted
that the law requires a councillor may not bring a
closed mind to any future vote on the manner. Thus,
the Court suggested that the subject councillor be
asked to confirm on record at City meeting that he
does not have a closed mine on the issue, and if not
so prepared to confirm, then to recuse himself from
voting
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Policy Decision Immunity
• Policy vs. Operational Decisions
• The common law shields municipalities from injuries that
result from policy decisions, but not operational
decisions.
• Generally, the decision to do something is a policy
decision. The execution of that decision is operational.
– i.e. You don’t have to do anything, but if you decide
to do something, then you have to do it right.
• In other words, everything on the front line is likely
operational, not policy.
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Policy Decision Immunity
What is a policy decision?
• Does not need to be in writing
• Can be a decision to either engage in, or refrain from, an
activity
• Can be at any level of the organization
• The decision involves the balancing of priorities in recognition
of finite resources
• Eg. The decision to reduce the number of daily inspections at
a playground is a policy decision where immunity applies.
However, the failure of the Town to conduct those daily
inspections is an operational matter which amounts to a policy
execution failure by the Town and attracts liability (Pritchett v
Gander, 2001 NLCA) .
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Policy Decision Immunity
• If the decision is determined to be operational,
or a policy decision not in good faith, then a
standard of care analysis is undertaken.
• The standard of care is assessed in light of all
the surrounding circumstances including, for
example, budgetary restraints and the
availability of qualified personnel and equipment.
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Municipal Immunity
Supreme Court of Canada in Wellbridge Holdings v. Greater
Winnipeg (Municipality), [1971] SCR 957, has held that as
long as a municipality exercises its legislative or quasi-judicial
functions in good faith, it cannot be found liable for negligence
in the exercise of such authority.
Additionally, a municipality which exercises legislative or
quasi-judicial functions in a bona fide manner without malice
is immune from liability to persons injured as a result of
reliance on the by-law or resolution if it is later held to be ultra
vires or otherwise invalid.
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Municipal Immunity
...Municipalities perform functions that require them to take multiple and sometimes conflicting interests into
consideration. To ensure that political disputes are resolved democratically to the extent possible, elected
public bodies must have considerable latitude. Where no constitutional issues are in play, it would be
inconceivable for the courts to interfere in this process and set themselves up as arbitrators to
dictate that any particular interest be taken into consideration. They may intervene only if there is
evidence of bad faith...
...the concept of bad faith can encompass not only acts committed deliberately with intent to cause harm,
which corresponds to the classical concept of bad faith, but also acts that are so markedly
inconsistent with the relevant legislative context that a court cannot reasonably conclude that
they were performed in good faith. What appears to be an extension of bad faith is, in a way, no
more than the admission in evidence of faith that amount to circumstantial evidence of bad faith
where a victim is unable to resent direct evidence of it. [emphasis added]
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Enterprises Sibeca v Freighsburg (Municipality), 2004 SCC 61 at paras 24-26.
Note that municipal immunity was not applied in Crawford v Town Torbay,
2008 NLTD 161, where resident was awarded damages following Town’s
breach of development regs where bad faith was not alleged or proven.
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Allegations of Bad Faith:
Misfeasance in Office
• A council, councillors and planners could be found liable for
abuse of office or misfeasance in office. Such actions are
typically seen as an intentional tort, where a public officer
intentionally injures a member of the public through deliberate
and unlawful exercise of a statutory power, which is
distinguishable from negligence.
• Two distinguishing elements include:
1. Deliberate unlawful conduct in the exercise of public
functions; and
2. Awareness that the conduct is unlawful and likely to
injure the plaintiff.
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Hypothetical A
Touton Cove reviews a property owner’s application to build a dwelling on its property
during a March council meeting. The property is located in a designated heritage area of
the Town. The Town approves the application without issuing a public advertisement or
notice to neighbouring property owners about the application. Two weeks later, the March
meeting minutes are published on the Town’s website.
A neighbour to the applicant discusses the new dwelling with several Town councillors
within 14 days of the meeting minutes being published online. The councillors do not tell
the neighbour of a right to appeal the Town’s decision. In May, the property owners begin
to build the dwelling.
In July, the neighbour speaks with a Department of Municipal Affairs representative who
advises that he has a right to appeal the approval of the dwelling. The neighbours file an
appeal with its respective zoning appeal board one week later.
QUESTION: Is this appeal permissible under URPA 2000?
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Hypothetical A
Answer: Although it should not have been permitted, the appeal was
allowed per URPA, 2000.
Petty Harbour-Maddox Cove (Town) v Eastern Newfoundland
Regional Appeal Board, 2015 NLTD(G) 111
• The Board held that decision of Town was to be vacated, with matter
remitted back to town.
• The Town appealed, arguing that the Board erred:
(1) by allowing the appeal to proceed as the neighbours’ appeal
was beyond the 14-day appeal period and by someone other
than the original applicant;
(2) by setting aside a discretionary decision of town council, which
is prohibited via s. 42(11); and
(3) In its review of the Town’s decision.
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Petty Harbour-Maddox Cove v Eastern NF Regional
Appeal Board, 2015 NLTD(G) 111
The Court dismissed the Town’s appeal.
• For the timeliness argument, the Court aligned with
previous cases finding that s. 42(2) of URPA, 2000 must
be read to allow third parties to file an appeal within 14
days of “notification to the public of the decision
appealed from”. The Court was satisfied that the Board’s
finding that the posting of the March Meeting Minutes on
the Town’s website did not constitute meaningful notice
to the neighbours of the approved dwelling. Thus, the
Board’s decision that the appeal was timely was
considered a reasonable decision.
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Petty Harbour-Maddox Cove v Eastern NF Regional
Appeal Board, 2015 NLTD(G) 111
• For the discretionary decision argument, the
Court held that the Board did not substitute its
decision for the decision made by the Town.
Instead, the Board concluded that the Town had
not followed its Regulations and remitted the
matter back to be dealt with by council.
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Petty Harbour-Maddox Cove v Eastern NF Regional
Appeal Board, 2015 NLTD(G) 111
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What does this mean for you?
Third parties are able to appeal a planning and zoning decision to a zoning
appeal board and should be advised of this right to appeal if they approach
a councillor or Town representative regarding a decision.
Publish all planning and zoning decisions on your municipal website, as well
as any Council meeting minutes which discusses an application where a
planning and zoning decision will be rendered.
When making the decision, ensure the Town provides sufficient clarification
on why the Town made the decision to either approve or reject the
application.
Adhere to your municipal by-law and regulations regarding planning and
zoning applications.
If the applicant’s property remains in a designated area that requires special
considerations, such as a heritage zone, ensure the Town comments on
how the proposed development meets these special conditions, or
conversely, how it does not meet any such conditions.
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Hypothetical B
A. Developer Ltd. applies to Touton Cove to develop a new subdivision. The
Town grants development permits to A. Developer Ltd. to complete certain
works, including road paving. 123 Developer Ltd. purchases all lands from A.
Developer Ltd. Although the Town does not outright ask 123 Developer Ltd. to
complete road paving in the subdivision, the Town continues to issue building
permits to 123 Developer Ltd.
The Town eventually advises 123 Developer Ltd. that it will not issue any
further building permits until roadways in the subdivision are completed to a
satisfactory standard.
QUESTION: Was the Town right to withhold further building permits?
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Hypothetical B
Answer: The Town acted in bad faith in withholding approval of the building permits
Marlay Construction v. Mount Pearl (Town), 1989 CarswellNfld 20
(NLSCTD)
• The Court determined that the obligation to pave roadways by
former developer was not a covenant that would run with the land
following purchase of land by plaintiff.
• Further, a municipality must grant a building permit to an applicant
who meets the requirements specified by regulations or legislation.
Here, the municipal regulations regarding building permits stated
that that no permit shall be issued until the developer had complied
with all provisions of Land Use Zoning, Subdivision and
Advertisement Regs.
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Marlay Construction v. Mount Pearl (Town), 1989
CarswellNfld 20 (NLSCTD)
• The Court held that the Town’s withholding of the
permit was an attempt to coerce the plaintiff, who
had no obligation to perform the work, to complete
road paving of public roads.
What does this mean for you?
• Cannot disregard municipal plan and regulations
and exhibit conduct that is unreasonable, arbitrary
and without a degree of fairness, openness and
impartiality. If so, your decision will be overturned if
challenged
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Hypothetical C
A. Mining Company Ltd. applies to Touton Cove in November 2013 for a mineral exploration
permit in an area nearby a municipal water shed, also to develop an access road. The Town
defers the application until it receives the Department of Environment and Conversation’s
Environment Preview Report (EPR). The EPR is released in October 2014 and the Town
publishes a discretionary use notice in its local newspaper in December 2014.
The Town holds a public briefing session on January 13, 2015 chaired by an independent
planning consultant. A briefing report was submitted by the consultant to the Council on
January 23, 2015. Other items submitted to Council include the EPR, a petition opposing the
proposed development signed by 866 individuals and a petition from cabin owners in the area
opposed to the proposed development.
Council considers and refuses the company’s application at a February 2015 council meeting
and notified the company via letter correspondence in March 2015. The letter indicates that
Council accepts the recommendations outlined in the briefing report submitted by the
consultant and advises of the company’s right to an appeal. The Town’s reasons for the refusal
were “sparse”. The company appeals the Town’s decision to its regional zoning appeal board.
Did the Town properly refuse the company’s application?
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Hypothetical C
Answer: Despite good faith efforts, the Town failed to appropriately
notify the applicant of its refusal
Eagleridge International Limited v. Town of Holyrood (Eastern NF
Regional Appeal Board Decision, July 22, 2015)
• The Board determined that the Town had the authority to refuse the
subject application; that the Town did its due diligence in reviewing
the application in accordance with the Town’s Development
Regulations; and believes the Town acted in good faith when
deciding to refuse the application.
• However, the Town erred by not including reasons for refusal in its
decision letter to the applicant mining company as required under its
Development Regulations
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Eagleridge International Limited v. Town of Holyrood
(Eastern NF Regional Appeal Board Decision, July 22,
2015)
• The Board vacated the Town’s decision to refuse the application,
Town to reconsider the application at a Regular Meeting of Council
and render a decision on the application and issue a new decision
letter to applicant
What does this mean for you?
• Availing of independent consultants in planning and zoning matters
is recommended, however must ensure to follow through with other
requirements under municipal regulations, by-laws, etc. in rendering
municipal decision
• When refusing a planning and zoning applicant, it is a Town’s
responsibility to provide notice in writing and state the reasons for
refusal along with right to appeal information
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Planning & Zoning
Best Practices
• Councillors do not show a “closed mind” or outright bias against
applications/applicants (eg. be objective in comments made during
Town council meetings, via media outlets or on social media);
• Ensure that decisions are compliant with relevant municipal plan,
regulations and by-laws, as “acts…so markedly inconsistent with the
relevant legislative context” are also evidence of bad faith;
• Rather than review planning and zoning matters at a council
meeting, which can lead to allegations of bad faith, consider:
– Delegating authority to the Town Clerk and assigning a Planning
Committee to meet on planning and zoning issues; or
– Have a designated Planning Committee review all planning and
zoning issues before a Council Meeting and give
recommendations to Council prior to rendering a decision.
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Planning & Zoning
Best Practices
• Important for councillors to restrict exercise of planning
and zoning authority to municipal matters only; eg.
Crown Land applications requires completion of a
Municipal Recommendation Form, this is not meant to
be used as a way to control zoning;
• Towns with websites should be publishing all planning
and zoning decisions online, as it may be useful in
providing notice of a decision to interested third parties;
• If a Town is uncertain how to proceed with any given
planning and zoning issue, contact a planning consultant
for independent advice;
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