2014 SKCA 119 Date:, 2014 SKCA 119

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2014 SKCA 119 Date: 2014-11-18 Between: Docket: CACV2605 Town of Pilot Butte Prospective Appellant - and - Aaron Enterprises Inc. Prospective Respondent Before: Whitmore J.A. (in Chambers) Counsel: Jeff N. Grubb, Q.C. for the prospective appellant Randall Sandbeck, Q.C. for the prospective respondent Application: From: PAC 2013-0021 Heard: November 12, 2014

Disposition: Leave to appeal granted Written Reasons: November 18, 2014 By: The Honourable Mr. Justice Whitmore Whitmore J.A. I. Introduction [ 1 ] The prospective appellant, the Town of Pilot Butte (the Town), applies for leave to appeal the August 22, 2014, decision of the Planning Appeals Committee of the Saskatchewan Municipal Board (SMB). II. Background [ 2 ] The proposed respondent, Aaron Enterprises Inc. (Aaron) and its sole shareholder, applied to the Town to develop certain lands owned by the respondent in the municipality.

Two phases have been completed and the Town, according to its custom, required Aaron to enter into a servicing agreement to pay service fees related to the third phase of the development.

The Town proposed a service agreement as contemplated by s. 172(1) of The Planning and Development Act, 2007 , SS 2007, c P-13.2 (the Act ), but Aaron and the Town have been unable to agree on a service fee. [ 3 ] Aaron applied to the Saskatchewan Municipal Board pursuant to s. 176(4) of the Act , which provides if the parties are unable to enter into a servicing agreement (pursuant to s. 172 of the Act ) a party may apply to the SMB for decision. [ 4 ] The SMB, in its decision of August 22, 2014, determined that the servicing agreement proposed for Aaron could not include future capital costs, and ordered that Aaron be required to pay one-half of the servicing fee to the Town upon receipt of approval of the proposed subdivision by the Director of Community Planning and the balance within 180 days after receipt of the Director’s written approval and the municipality’s written construction approval. [ 5 ] The Town raises the following grounds of appeal in its draft notice of appeal: THAT the appeal is taken upon the following grounds: (

a) The SMB erred in law in its

interpretation and application of subsection 172(3) (

b) of the Act by holding that the Town was required to negotiate with the Prospective Respondent, the amount of the servicing fees to be paid by the Prospective Respondent in relation to its proposed subdivision, and that such negotiation required the Town to agree on a servicing fee rate that the Prospective Respondent would pay that was less than the servicing fee rate the Town requires of other land developers. (

b) The SMB erred in law in its

interpretation and application of

section 168 and subsection 172(3) (

b) of the Act by concluding that the future capital costs the Town estimated it will incur could not be incorporated into the calculation of the servicing fee rate the Town could require the Prospective Respondent to pay in relation to its proposed subdivision. (

c) The SMB erred in law by reaching a decision regarding the timing of payments of the servicing fee that was not based on the evidence before it. III.

Jurisdiction [ 6 ] Pursuant to s. 33.1 of The Municipal Board Act , SS 1988-89, c M-23.2, a party may appeal a decision of the SMB on a question of law or a question concerning the jurisdiction of the SMB, with leave of a judge of the Court of Appeal. [ 7 ] This Court, in Schalk v Regina (City) , 2000 SKCA 140 [ Schalk ] , held the following in relation to an appeal pursuant to s. 33.1 of The Municipal Board Act : 7 As I have noted, leave to appeal may be granted if two prerequisites are satisfied. The question must be one of law.

It must be one that merits the consideration of the Court. 8 … For a question to be sufficiently meritorious to place before the Court either the judge hearing the application for leave must have a doubt, if not a serious doubt, about whether the tribunal appealed from correctly decided the question, or the question must be of such broad importance that it deserves the attention of and the determination by a higher authority irrespective of whether the judge has any doubt about the correctness of the tribunal’s resolution. [ 8 ] Thus, while Bayda C.J.S. emphasized in para. 7 that merit was the sole consideration beyond whether the question was one of law or jurisdiction, in para. 8 he went on to say that merit encompassed both the question of whether the decision appealed from is correct and the question of whether the issue is of such broad importance that this Court should review it. [ 9 ] In Saskatoon v North Ridge Development Corp. , 2013 SKCA 62 , 417 Sask R 64 , Jackson J.A. considered an application for leave to appeal an interlocutory decision of the Assessment Appeals Committee of the Saskatchewan Municipal Board, also pursuant to

s. 33.1 of The Municipal Board Act . Jackson J.A. held the following: 8 The starting point for the matter is s. 33.1 of The Municipal Board Act , which grants a restricted right of appeal to this Court on a question of law or on a question concerning the jurisdiction of the Saskatchewan Municipal Board.

Section 33.1(

b) provides that this right is exercisable only with leave of a judge of this Court. … 14 First, this is an interlocutory decision. The proposed appellant asks this Court to offer an opinion on the

interpretation of The Cities Act , S.S. 2002, c. C-11.1 divorced from the question of whether the amendment to the notice of appeal should be granted -- or indeed what should happen if the amendment is granted. Given this, the appropriate test is clearly that established by Rothmans, Benson & Hedges Inc. v. Saskatchewan , 2002 SKCA 119 , 227 Sask. R. 121.

The appeal, as cast at this point, is neither of sufficient merit to warrant the attention of the Court or of sufficient importance to the proceedings, to the field of practice, to the state of the law, or to the administration of justice generally to warrant determination by the Court. 15 Second, I do not have a serious doubt about the correctness of the decision at least at this stage of the proceeding (see Schalk at para. 8 ). … [ 10 ] In Behenna v Rural Municipality of Rudy No. 284 , 2012 SKCA 14 , 385 Sask R 240 , Lane J.A. applied the Rothmans ’s test to an application for leave to appeal made under s. 33.1 of The Municipal Board Act . [ 11 ] Thus, the applicant must satisfy the Court that the two branches of the Rothmans ’s test are met.

The questions being: (

a) first, is the proposed appeal of sufficient merit to warrant the attention of the Court of Appeal? and (

b) second, is the proposed appeal of sufficient importance to the proceedings before the Court or the field of practice or the state of law or to the administration of justice generally to warrant determination of the Court of Appeal? IV.

Discussion [ 12 ] I am of the view that the questions raised by the Town are indeed questions of law and therefore I will turn to the issue of whether the SMB made an error of law in its decision and whether the questions raised are of such broad implications that they require the attention of this Court. [ 13 ] The Town submits it may require a subdivision applicant to enter into a servicing agreement pursuant to s. 172(1) of the Act , and concedes the Act may imply that the specific terms of such an agreement are subject to negotiation.

Nevertheless, s. 172(3) of the Act states that servicing agreements may provide for the payment of service fees that the council may establish for the capital cost of certain services. In addition, servicing agreements may provide for time limits pursuant to s. 172(3) of the Act , and may also contain such assurances as to performance as the council may consider necessary. [ 14 ] Accordingly, the Town submits that it is a matter for the discretion of the municipality to establish servicing fees.

The Act provides guidelines on what can be included as servicing fees, and only certain capital costs may be included in a servicing agreement. Once the municipality establishes the servicing rate, however, developers must pay the fees based upon that rate. The municipality, according to the Town, may require all developers to pay the same rate. [ 15 ] The Town submits its council has an obligation to ensure that it properly estimates and calculates the capital costs that it will incur in providing services and it is this calculation that allows a council to establish the servicing fee.

According to the Town, the right of the subdivision applicant to have the issue reviewed by the SMB through a hearing does not override a municipality’s ability to set those fees. [ 16 ] Aaron submits that the legislation is clear. The Board has the jurisdiction and the discretion to consider the fees to be charged (s. 176(4)). Thus, the appeal is without merit. [ 17 ] I am of the view that the Town has met the threshold of the first branch of the test, namely, that the applicant must show that the appeal is not prima facie frivolous or vexatious.

In my view, the appeal is not predestined to fail. [ 18 ] Further, I am of the view that the question of who may set servicing fees raises an issue of broader importance and has application to all subdivision applicants in municipalities subject to the SMB. Leave is therefore granted. Costs shall be in the cause. DATED at the City of Regina, in the Province of Saskatchewan, this 18th day of November, A.D. 2014. “Whitmore J.A.” Whitmore J.A.