Okotoks (Town) v. Foothills (Municipal District No. 31), 2012 ABQB 53

Court of Queen ’ s Bench of Alberta Citation: Okotoks (Town) v. Foothills (Municipal District No. 31), 2012 ABQB 53 Date: 20100123 Docket: 1101 07464 Registry: Calgary Between: Town of Okotoks Applicant - and - Municipal District of Foothills No 31 and Alberta Foothills Properties Ltd. Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice T.F. McMahon _______________________________________________________ Nature of the Application [ 1 ] The Town of Okotoks ( “ Okotoks ” ) applies for a declaration that a bylaw of the Municipal District of Foothills No 31 ( “ MD ” ) is invalid and void pursuant to

section 536 of the Municipal Government Act , RSA 2000, c. M-26 ( “ MGA ” ). The second Respondent on this Application is Alberta Foothills Properties Ltd. ( “ the Developer ” ) is the developer involved with the land in question. [ 2 ] Okotoks and the MD are adjacent municipalities.

[ 3 ] In 1998, each municipality enacted a bylaw entering into an inter-municipal development agreement ( “ IDP ” ) pursuant to

section 631 of the MGA . The IDP dealt with the land use and density limits for lands along the common border of the MD and Okotoks. In early 2010, the two municipalities also entered into a joint planning agreement ( “ JPA ” ) with the objective of creating a long-term development strategy and successful joint planning. [ 4 ] On August 11, 2010, the MD passed Bylaw 25/2010 which adopted an Area Structure Plan ( “ ASP ” ) allowing for a development known as Wind Walk. Okotoks says that the ASP permits urban-style development and density on the border lands which is contrary to the IDP and the JPA.

The proposal would see the development of 458 residential units and 80,300 square feet of commercial space. [ 5 ] The IDP by

section 631 and the ASP by

section 633 are statutory plans – that is, they are contemplated by the MGA . The JPA is an agreement between the two municipalities. [ 6 ] Okotoks seeks an order declaring the Bylaw void on four grounds: 1. Breach of

section 638 of the MGA . 2. Breach of the provisions of the IDP adopted by Okotoks and the MD. 3. Breach of the JPA signed by Okotoks and the MD. 4. That the bylaw was passed in a manner contrary to fair procedure. Factual Background [ 7 ] The first public hearing by the MD for the Wind Walk ASP opened on September 3, 2009. Okotoks voiced its concerns with the proposal. In January 2010, the JPA was entered into. It provided certain lands, including the Wind Walk lands, would be the subject of joint planning. On February 11, 2010, the MD re-opened the public hearing.

Okotoks repeated its concerns with the proposal. The MD passed the first reading of the ASP on February 18, 2010. [ 8 ] Okotoks continued its objections saying, amongst other things, that the proposal was contrary to the JPA.

On August 11, 2010, the MD gave second and third reading approval to the Wind Walk ASP after holding an in-camera meeting with the developer. [ 9 ] By an email of August 12, 2010, the MD advised Okotoks that third and final reading had been given to Bylaw 25/2010 authorizing adoption of the Wind Walk ASP. [ 10 ] On September 9, 2010, Okotoks filed an appeal to the Municipal Government Board regarding the ASP pursuant to

section 690 of the MGA . The appeal was heard between June 6 - 16, 2011 on the merits. As at this date, that hearing has not been concluded. [ 11 ] In December 2010, and again in January 2011, the two municipalities engaged in mediation as required by

section 690. The mediation was unsuccessful. [ 12 ] This originating Notice of Motion was filed June 3, 2011.

[ 13 ] The essential argument made by Okotoks is that the Wind Walk ASP would permit much higher density than would be permitted by the IDP or the JPA. The IDP would permit lower density country residential development. Thus Okotoks argues that the ASP and the IDP are inconsistent and so contrary to

section 638 of the MGA . [ 14 ] This Court has said in considering

section 638 that inconsistency exists only where compliance with one bylaw will necessarily mean non-compliance with the other: Barker v. Palmer [2005] ABQB 815, at para 30. The MD and the Developer say that while the IDP and the JPA reference country residential, they do not preclude other forms of development and that in the opinion of the MD, there is no inconsistency. Statutory Provisions and Rules MGA, Challenging Bylaws and Resolutions Application to the Court of Queen ’ s Bench 536(1) A person may apply to the Court of Queen ’ s Bench for (

a) a declaration that a bylaw or resolution is invalid, or (

b) an order requiring a council to amend or repeal a bylaw as a result of a vote by the electors on the amendment or repeal.

(2) A judge may require an applicant to provide security for costs in an amount and manner established by the judge. Procedure 537 A person who wishes to have a bylaw or resolution declared invalid on the basis that (

a) the proceedings prior to the passing of the bylaw or resolution, or (

b) the manner of passing the bylaw or resolution does not comply with this or any other enactment must make an application within 60 days after the bylaw or resolution is passed. Validity relating to public participation 538 Despite

section 537, a person may apply at any time (

a) for a declaration that a bylaw is invalid if (

i) the bylaw is required to be put to a vote of electors and the vote has not been conducted or if the bylaw was not given the required approval in such a vote, (ii) the bylaw is required to be advertised and it was not advertised, or

(iii) a public hearing is required to be held in respect of the bylaw and the public hearing was not held, or (

b) for an order requiring a council to pass a bylaw as a result of a vote by the electors. MGA , Intermunicipal Development Plans 631(1) Two or more councils may, by each passing a bylaw in accordance with this Part or in accordance with sections 12 and 692, adopt an intermunicipal development plan to include those areas of land lying within the boundaries of the municipalities as they consider necessary.

(2) An intermunicipal development plan (

a) may provide for (

i) the future land use within the area, (ii) the manner of and the proposals for future development in the area, and (iii) any other matter relating to the physical, social or economic development of the area that the councils consider necessary, and (

b) must include (

i) a procedure to be used to resolve or attempt to resolve any conflict between the municipalities that have adopted the plan, (ii) a procedure to be used, by one or more municipalities, to amend or repeal the plan, and (iii) provisions relating to the administration of the plan. MGA , Plans consistent: 638 All statutory plans adopted by a municipality must be consistent with each other.

MGA , Intermunicipal Disputes: 690(1) If a municipality is of the opinion that a statutory plan or amendment or a land use bylaw or amendment adopted by an adjacent municipality has or may have a detrimental effect on it and if it has given written notice of its concerns to the adjacent municipality prior to second reading of the bylaw, it may, if it is attempting or has attempted to use mediation to resolve the matter, appeal the matter to the Municipal Government Board by

(

a) filing a notice of appeal and statutory declaration described in subsection (2) with the Board, and (

b) giving a copy of the notice of appeal and statutory declaration described in subsection (2) to the adjacent municipality within 30 days after the passing of the bylaw to adopt or amend a statutory plan or land use bylaw.

(2) When appealing a matter to the Municipal Government Board, the municipality must state the reasons in the notice of appeal why a provision of the statutory plan or amendment or land use bylaw or amendment has a detrimental effect and provide a statutory declaration stating (

a) the reasons why mediation was not possible, (

b) that mediation was undertaken and the reasons why it was not successful, or (

c) that mediation is ongoing and that the appeal is being filed to preserve the right of appeal. Rules of Court Originating application for judicial review 3.15(1) An originating application must be filed in the form of an originating application for judicial review if the originating applicant seeks from the Court any one or more of the following remedies against a person or body whose decision, act or omission is subject to judicial review: (

a) an order in the nature of mandamus, prohibition, certiorari, quo warranto or habeas corpus; (

b) a declaration or injunction.

(2) Subject to rule 3.16 [Originating application for judicial review: habeas corpus], an originating application for judicial review to set aside a decision or act of a person or body must be filed and served within 6 months after the date of the decision or act, and rule 13.5 [Variation of time periods] does not apply to this time period. A Preliminary Issue [ 15 ] Okotoks insists through one of its counsel that this is not a judicial review but an application for a declaration only.

Counsel insist that what is sought is not an order quashing the bylaw but merely a declaration that the bylaw is invalid or beyond the MD ’ s powers. The argument is made in the face of the Originating Notice of Motion which is styled as an “ Application for Judicial Review ” and which describes itself as “ an application brought pursuant to

section 536 of the Municipal Government Act, RSA 2000, c. M-26 and Judicial Review to declare a bylaw invalid and void ” . In addition, Rule 3.15(1)(

d) requires that a party seeking a declaration proceed by an application for a judicial review. [ 16 ] The argument is made, I conclude, in an effort to spin the application away from the limitation issues raised by

section 3.15(2). [ 17 ] I have no doubt that this is in fact an originating application for a judicial review and so Rule 3.15(2) can apply.

[18] In any event, the authorities are clear that Rule 3.15(2) applies to applications framed as being for declaratory relief:Athabasca Chipewyan First Nation v. Alberta (Miniser of Energy), 2011 ABCA 29, at para 23, quoting from Papachase Indian BandNo, 136 v. Canada, 2004 ABQB 655: I accordingly conclude that seeking a declaration is not an effective strategy to avoid the six-month limitation period for quashing adecision. Limitations Issue [19] The MD and the Developer first argue that Okotoks is out of time in bringing this application. They rely on the 60-daylimitation in

section 537 of the MGA and the six-month limitation in Rule 3.15(2). The impugned bylaw was passed August 11, 2010.This originating Notice of Motion was filed June 3, 2011 so that both time periods have been exceeded. Okotoks argues that neitherlimitation applies to this case. A.

Section 537 of the MGA [20] Okotoks argues that this

section is limited to appeals on procedural issues and not substantive issues such as the validity orlegality of a bylaw. Okotoks points to the language in the

section “the proceedings prior to the passing of the bylaw” and “the manner ofpassing the bylaw” as confirming that the limitation is restricted to appeals on procedural issues. They say there is no limitation in theMGA as to appeals on substantive issues. [21] Reliance is placed upon Urban Development Institute v. Rocky View (Municipal District No. 44), [2002] ABQB 651 wherethe Court said at para 32: Thus, it does not appear that this

section applies to cases where the substance of the bylaw itself is being challenged as invalid. Rather,the Legislature intended it to apply to procedural grounds of challenge only. As the question here is whether the Bylaw exceeds theauthority of the MD as provided for in the Municipal Government Act and not whether the actual procedure in passing the Bylaw wasappropriate, the limitation period set out in

section 537 does not apply. [22] In that case, the MD had by bylaw imposed “transportation infrastructure fees” which were challenged as being ultra vires ofthe MD. [23] In United Taxi Drivers Fellowship of Southern Alberta v. Calgary (City), 2002 ABCA 131 , [2002] 8 W.W.R. 51,the Alberta Court of Appeal held that

section 537 did not apply where a city bylaw purported to restrict the number of taxi licencesbecause “the basis for the requested declaration of invalidity is that the City acted beyond its power, not that the City failed to complywith the MGA or another enactment in the proceedings prior to the passage of the Bylaw, or the manner of passing it.” (Para 163) Thatdecision was reversed on other grounds by the Supreme Court of Canada reported at 2004 SCC 19 , [2004] 1 S.C.R. 485. [24] The MD relies upon Associated Cab Limousine Ltd. v. Calgary (City) 2003 ABCA 215.

The Court declared invalid a bylawpassed in a closed meeting and overturned a Queen’s Bench decision made in Chambers in which it held that the application was time-barred by virtue of

section 537. In doing so, however, the Court of Appeal said at para.22:

Section 537 of the MGA requires a person who wishes to have a bylaw or resolution declared invalid because procedural requirementswere not met, to "make an application within 60 days after the bylaw or resolution is passed." That time limit does not apply in this casebecause the defect is not merely procedural. [25] I conclude that

section 537 deals solely with procedural issues. The only procedural issue raised by Okotoks here relates tothe in-camera meeting between the MD and the Developer after the public hearing and before final passage of the bylaw. The result isthat

section 537 does not bar the remaining issues. I will deal with the in-camera issue separately. B. Rule 3.15(2)

[ 26 ] The first argument of Okotoks is that Rule 3.15 is inapplicable because they seek declaratory relief and not judicial review. I have already disposed of that argument. [ 27 ] The real issue is whether an inconsistency within the meaning of

section 638 goes to jurisdiction, or is it a decision or act to which Rule 3.15(2) applies? [ 28 ] The Alberta Court of Appeal in United Taxi at para 162 said in relation to the predecessor rule: But Rule 753.11(1) is inapplicable. No relief is sought to set aside "a decision or act". What is sought is a declaration of invalidity of parts of a bylaw due to lack of jurisdiction.

In such cases, R.753.11(2) does not affect the ability of a court to decide the municipality lacked the jurisdiction under its constituent legislation. [ 29 ] More recently, in Athabasca Chipewyan , the Alberta Court of Appeal dealt with judicial review of five oil & gas leases granted by the Minister of Energy to Shell Canada Ltd. The motion was brought by the Band outside the six-month limitation period. At the Court of Queen ’ s Bench, the motion was summarily dismissed. That decision was upheld by the Court of Appeal.

In doing so, the Court quoted at length from Papachase in which Slatter J. (as he then was) at paras. 113 and 114, said: In my view the better

interpretation is that the limitation period prevents all challenges to the decision, including the ability to challenge the alleged voidness of the decision. In the end, this is largely a matter of statutory

interpretation: when the Legislature enacted the limitation period, did it intend to apply it only to errors of law on the face of the record, or also to jurisdictional errors? The purpose of the limitation period is to bring certainty to administrative decisions, and there is no obvious reason why the Legislature would exempt a large body of decisions from the rule. [ 30 ] The Court in Papachase was faced by an application by descendants of an Indian band asserting a void or wrongful surrender of certain lands more than a century ago.

The Court in Athabasca Chipewyan at page 23 characterized the situation in Papachase as an attack on “ an administrative decision or act ” . [ 31 ] Okotoks does not attack the authority of the MD to pass a bylaw authorizing an ASP. The MD clearly has the statutory authority to do so. This is a different case from a municipality which levies a development fee when it had no jurisdiction to do so ( Urban Development Institute ).

The MGA grants a municipality the authority to pass a bylaw adopting an ASP. [ 32 ] The issue taken here by Okotoks is with the content of this ASP, some of which it says conflicts in a planning sense with the IDP and so contravenes

section 638 of the MGA .

That is, the objection is not that the MD has no authority to pass an ASP bylaw but that the planning details of this particular ASP may conflict with the other statutory plan, the IDP. “ As long as the delegate acts bona fide , the courts will generally be very reluctant to second guess its opinion, with the result that it is impossible to assert that the delegate ’ s action is ultra vires . ” Jones and De Villars, “ Principles of Administrative Law ” , 5th ed., pg. 144. [ 33 ] Put yet another way, it is not that an ASP bylaw is ultra vires the MD but that the decision of the MD to approve this particular development proposal conflicts in some way with the IDP.

That in my view is a decision of the MD which is within the contemplation of Rule 3.15(2). [ 34 ] If this were not so, the Developer argues with some justification, then it would never have certainty that its planned development could proceed, even as it invested time and money into planning, design and construction. In this context, the Developer quotes Love v. Flagstaff (County) Subdivision and Development Appeal Board , [2002] ABCA 292, at para 27: Central to these values is the need for certainty and predictability in planning law.

Although expropriation of private property is permitted for the public, not private, good in clearly defined and limited circumstances, private ownership of land remains one of the fundamental elements of our Parliamentary democracy. Without certainty, the economical development of land would be an unachievable objective. Who would invest in land with no clear indication as to the use to which it could be put? Hence the importance

of land use bylaws which clearly define the specific uses for property and any limits on them. [ 35 ] In so far as the particulars of the ASP may be detrimental to Okotoks, they have the remedy afforded by

section 690 of the MGA . [ 36 ] Accordingly I find that the relief sought by Okotoks is time-barred by Rule 3.15(2). The In-camera Meeting [ 37 ] Had I found otherwise in respect of Rule 3. 15(2), I would have to consider whether

section 538(a)(iii) gave Okotoks a remedy. Given my decision that all of Okotoks claims are barred by Rule 3.15(2) this and the other issues need not be considered. Result [ 38 ] At the conclusion of argument, counsel discussed reserving this decision on the merits until after the receipt of a decision expected from the Municipal Government Board. However, given my decision on the limitation issue, awaiting the decision of the Municipal Government Board is no longer necessary. [ 39 ] The application is dismissed. [ 40 ] Costs, if not agreed to, may be spoken to. Heard on the 17 th day of January, 2012.

Dated at the City of Calgary, Alberta this 23 rd day of January, 2012. T.F. McMahon J.C.Q.B.A. Appearances: Gilbert J. Ludwig Wilson Laycraft and Frederick A. Laux, Q.C. Shores Jardine LLP for the Applicant

Joanne Klauer MacPherson Leslie & Tyerman LLP for the Respondent Municipal District of Foothills No 31 K. Hugh Ham Jennifer Sykes Municipal Counsellors for the Respondent Alberta Foothills Properties Ltd.