E.Z. Automotive Ltd. v Regina (City), 2019 SKCA 38

Court of Appeal for Saskatchewan Docket: CACV3374 Citation: E.Z. Automotive Ltd. v Regina (City) , 2019 SKCA 38 Date: 2019-04-30 Between: E.Z. Automotive Ltd. Applicant/Prospective Appellant (Respondent, Appellant by Cross-Appeal) And City of Regina Respondent/Prospective Respondent (Appellant, Respondent by Cross-Appeal) Before: Jackson (in Chambers) Disposition: Leave to appeal granted On Application From: PAC 2018-0018 & 2018-0019, Regina Application Heard: March 27, 2019 Counsel: Travis Avery for the Appellant Paul Wagner for the Respondent Jackson J.A. [ 1 ] E.Z.

Automotive Ltd., the applicant, applies for leave to appeal a decision of the Planning Appeals Committee of the Saskatchewan Municipal Board issued on January 16, 2019, pursuant to s. 33.1 of The Municipal Board Act , SS 1988-89, c M-23.2 .

The application is opposed by the City of Regina. [ 2 ] For ease of reference, the following table collates the legislation, community plans, organizations and decisions referred to in this application: Legislation and Community Plans The Municipal Board Act , SS 1988-89, c M-23.2 The Planning and Development Act, 2007 , SS 2007, c P-13.2 [ Planning Act ] City of Regina, bylaw No 9250, Regina Zoning Bylaw (29 June 1992) [ Bylaw or Zoning Bylaw ] City of Regina,

schedule “A” to bylaw No 2013-48, Design Regina, Part A – Citywide Plan: The Official Community Plan (20 March 2014) [Official Community Plan] City of Regina,

schedule “B” to bylaw No 2013-48, Design Regina, Part B – Secondary Plans: The Official Community Plan (20 March 2014) [Secondary Plan] Organizations City of Regina [City] E.Z Automotive Ltd. [applicant or E.Z.] Planning Appeals Committee [Committee] Regina Development Appeals Board [Development Board or DAB] Saskatchewan Municipal Board [SMB] Decisions [E.Z. Automotive Ltd.] v Regina (City) , Appeal No 5/18 (8 June 2018), Regina Development Appeals Board [ Development Board Decision ] Regina (City) v E.Z.

Automotive Ltd. , PAC 2018-0018 and 2018-0019 (16 January 2019) Planning Appeals Committee [ Committee Decision ] [ 3 ] On January 2, 2018, the City issued an order to comply, requiring the applicant to “cease operation of the salvage yard” on the property owned by it by May 15, 2018, pursuant to s. 242(4) of the Planning Act . The order to comply stated that an inspection had been performed on November 6, 2017, and that it “revealed that the development or form of development is in contravention of

Section 9C.3.9(3) of the Regina Zoning Bylaw No. 9250 ”. [ 4 ] The applicant appealed the order to comply to the Development Board on February 1, 2018.

On June 8, 2018, the Development Board dismissed the appeal but added a caveat ( Development Board Decision at 21): It is the decision of the Development Appeals Board that the Appeal be DENIED, and that the Order to Comply be CONFIRMED, after modifying the date for compliance to October 31, 2018, and with the following condition that the Respondent make clear the number of junked vehicles that can remain on the properties in order for the Appellant to access parts for their automobile repair service . (Underline emphasis added) [ 5 ] Both the applicant and the City appealed the decision of the Development Board to the Committee.

The City appealed on the basis that the Bylaw “contains no standard number of junked vehicles that can be present on a property” in the zone in question and the City “cannot impose an arbitrary number of junked vehicles when no such development standard exists in the Zoning Bylaw and when the land-use itself is prohibited”. Further, the City submitted that the Planning Act does not authorize the “issuance of a compliance order to the City”.

[ 6 ] The applicant also appealed to the Committee, stating these as its grounds: Issue No. 1: The DAB [Development Board] erred in law by failing to revoke the Order to Comply under

section 221(a) [of the Planning Act ]. The Official Community Plan requires the retention of existing local and neighbourhood commercial spaces; maintain existing approved employment areas supported by secondary plans; an orderly regulatory environment assuring transparency, predictability and fairness; and that all City decisions which deviate or inhibit these ideals are not supported or approved. Issue No. 2: The DAB erred in law by failing to quash the Order to Comply under

section 221(b). Issue No. 3: The DAB erred in law and jurisdiction by unlawfully delegating its authority to vary an Order to Comply back to the City, one of the litigants in this matter. [ 7 ] As will be seen from the applicant’s third ground, the parties were united on one front. Neither party wanted the City to determine the number of junked vehicles that could remain on the property, but it is unclear whether the City opposed the presence of any junked vehicles on the premises.

Clearly, the applicant wanted to be able to retain some junked vehicles on its property because of its business model. [ 8 ] In an affidavit filed with the Development Board, one of the principals of the applicant described its business model as follows: 5. We purchase wrecked vehicles from SGI for the purpose of using the parts to repair other vehicles which have been damaged . The damaged vehicles come into our shop as SGI claims after someone has been in an accident. … 7. We work with SGI to try to use “quality recycled parts” where we can to keep the costs of repair below these amounts .

This allows us to fix and repair vehicles that would otherwise be considered total losses if only new parts were used. This results in less wrecked vehicles and means that our customers don’t have to go buy a new vehicle. SGI encourages us to use quality recycled parts, and this is reflected in our KPI score for accreditation purposes . … 12. As a result of our business model there is [a] constant stream of wrecked vehicles on our property . Some, like the inspections and the SGI claims, do not belong to us. They belong to our clients. We try to keep these vehicles on our property for as little time as possible.

We try to encourage our inspection clients to only have their vehicle on our property while we are inspecting it, but sometimes people just drop them off. We discourage this practice. We try to fix the SGI repair claims as soon as we can but sometimes we get stuck waiting for new parts on back order. Sometimes we have to wait while we try to source a quality used part too. 13. Most of the wrecked vehicles on the property do belong to us though . We buy them from SGI in response to receiving a claim for the purpose of using the parts to repair the claim.

We remove parts from the wrecked vehicles as and when we need them . Often times we swap out a damaged part from the claim vehicle for the quality recycled part off the wrecked vehicle. We don’t strip all of the parts off of wrecked vehicles as they come in. But we keep an eye out for quality parts we know are likely going to be needed for a future claim. If a wrecked vehicle has many useful parts on it we will keep for a while . If a wrecked vehicle doesn’t have any useful parts we get rid of it. … 16.

Our value added is that we invest the time and energy to source quality used parts from wrecked vehicles, we invest the labour and energy to remove the quality used part from the wrecked vehicle, and we install the quality used part on SGI repair claims. We do this on an as needed basis. 17. We have a niche clientele. A lot of them live in the residential neighbourhood next to us, but not all of them. Most of them drive older or used vehicles. Most of them wouldn’t be able to buy a new vehicle if their car was written off. Some of them have a hard time paying their SGI deductible. 18.

If we can’t have wrecked vehicles on our property we can’t run our business the way we do, and we can’t service our niche clientele . [ 9 ] The Development Board appears to have accepted the applicant’s evidence, at least to some extent, and held that the applicant should be able to continue with its business model in some form, particularly as it found that “other auto repair shops use salvaged vehicles” ( Development Board Decision at 18). On appeal, the Committee did not accept the Development Board’s

interpretation of the Bylaw or the prescription found in the Official Community Plan, holding the following [ Committee Decision ]: [6] The Committee finds the Board made a mistake when it required the City to allow salvage vehicles to remain on the property in contravention of the City’s Zoning Bylaw 9250 (Bylaw). … [17] … the storage of junked vehicles on the subject property is not a permitted use regardless of its relationship to the auto repair business. … [28] The Committee allows the appeal and denies the cross-appeal. We reinstate the Order. E.Z. has three months from the date of this decision to comply with the Order.

[ 10 ] In this application for leave to appeal the Committee Decision to the Court of Appeal, the applicant puts forward a number of grounds but, in oral argument, submitted that whether leave should be granted turns on these allegations of error (as taken from its memorandum of law): 12. … The Prospective Appellant submits that the [Committee]: a. Failed to provide sufficient reasons in its decision; b. Failed to consider the appropriate standard of review, and corresponding deference, applicable to the DAB’s [Development Board] decision; c. Failed to consider relevant factors mandated by

section 221(

a) of the PDA [ Planning Act ]; d. Failed to consider a relevant bylaw within its jurisdiction; e. Failed to apply generally accepted principles of statutory

interpretation to the zoning Bylaw and other relevant bylaws; and f. Based its decision on costs on an irrelevant factor. [ 11 ] It is convenient to divide the above grounds into two groups: (

a) First Group of Questions: b. Failed to consider the appropriate standard of review, and corresponding deference, applicable to the DAB’s decision; e. Failed to apply generally accepted principles of statutory

interpretation to the Zoning Bylaw and other relevant bylaws; (

b) Second Group of Questions: a. Failed to provide sufficient reasons in its decision; c. Failed to consider relevant factors mandated by

section 221 (

a) of the [ Planning Act ]; d. Failed to consider a relevant bylaw within its jurisdiction. [ 12 ] In my view, the First Group of Questions are best stated as follows: (

a) Did the Committee err by applying the wrong standard of review to its consideration of the Development Board Decision ? (

b) Did the Committee incorrectly apply the correct standard of review? Specifically, did the Committee err in law by finding the Development Board had erred when it interpreted the Bylaw as permitting some junked vehicles could remain on the property as an aspect of permitted uses under the Bylaw of “Automobile sales and service” or “Repair shop”? [ 13 ] The issue at this stage becomes whether leave should be granted in relation to the First Group of Questions. From the City’s perspective, the question before the Development Board was whether the applicant was operating a “salvage yard”.

From the applicant’s perspective, the question was whether the permitted uses in the Bylaw of “Automobile sales and service” or “Repair shop” permit the storage of some junked vehicles. The Development Board appears to have agreed with the applicant as to the nature of the question. As I have indicated, the Development Board appears to have held that the applicant could not operate a “salvage yard” but it could retain some junked vehicles as part of its automobile repair business. [ 14 ] The Committee asked whether the Development Board had made “a mistake in its decision” ( Committee Decision at para 5).

It then held that the Development Board had made a “mistake when it required the City to allow salvage vehicles to remain on the property in contravention of the City’s Zoning Bylaw 9250” (at para 6), including having “made a mistake in its

interpretation of the Bylaw by failing to acknowledge that a Salvage and Recycling Yard is a defined use in the Bylaw by way of the [ Standard Industrial Classification Manual 1987 ] and is a prohibited use” in the zone in question (at para 17). [ 15 ] I have concluded that leave should be granted in relation to the First Group of Questions. I cannot say that an appeal in relation to these questions is “destined to fail” ( Saskatoon (City) v North Ridge Development Corporation , 2015 SKCA 13 para 55 , 451 Sask R 265).

While there are several aspects to the questions that the applicant has posed, the Committee’s reasoning makes it at least arguable that the Development Board answered a question – to the applicant’s detriment – not placed before it, i.e., whether the storage of any junked vehicles at all is part of the auto repair business. As to sufficient importance, if error has been made, it would materially affect the result.

The selection and correct application of the standard of review by administrative tribunals continue to be significant issues and, in that regard, can be said to “transcend the particular” in their implications.

Importance to the litigant is not the prevailing consideration in determining whether leave should be granted, but I do note, according to the evidence, the applicant will not be able to continue with its present business model if it cannot have any junked vehicles on its premises. [ 16 ] This brings me to the Second Group of Questions. [ 17 ] For reference, I will repeat the grounds I have identified as the Second Group of Questions: a. [The Committee] Failed to provide sufficient reasons in its decision; c. Failed to consider relevant factors mandated by

section 221 (

a) of the [ Planning Act ]; [and] d. Failed to consider a relevant bylaw within its jurisdiction.

[ 18 ] The Second Group of Questions is related to the First Group of Questions in the following way. The Development Board held as part of its findings that the “Official Community Plan consists of broad policy statements and does not provide a specific definition as to what compatibility within a neighbourhood means nor does it provide a specific framework for regulating the character of neighbourhoods” ( Development Board Decision at 19).

It is not clear to what extent the Development Board’s conclusion that “some junked vehicles” should remain on the property was influenced by the applicant’s submissions regarding the Official Community Plan. [ 19 ] In its written submissions to the Committee, the applicant appeared to concede that it cannot keep vehicles that have no potential recycling value for repair purposes – and it cannot stack vehicles pending a wholesale removal of junked vehicles when salvage prices are advantageous to it – but that it should be able to keep on its premises those vehicles that have useable parts for the purposes of future claims. [ 20 ] The applicant’s arguments before the Committee on this point included the following: Argument: This business has existed for years in an approved mixed use employment area according to the OCP [Official Community Plan].

The entirety of the OCP supports protecting this existing light industrial/commercial business. The only

section which supports the City’s position applies exclusively to “new development” as opposed to existing ones (page 377). The OCP expressly identifies E.Z.’s Winnipeg street property as an Existing Approved Employment Area adjacent to a Built Neighbourhood (page 375). The Secondary Plan expressly identifies E.Z.’s Winnipeg street property as a Mixed Industrial/Commercial land use zone (page 330). Given this designation the sections of the OCP mentioned above all apply. The only

section of the OCP relied upon by the City relates to Health and Safety. Curiously, zero evidence of any health or safety concerns relating the E.Z.’s business was presented to the DAB [Development Board] and zero argument concerning health and safety relating to E.Z.’s business was presented to the DAB. Rather, the City’s sole arguments related to visual nuisance. E.Z.’s operation was not a concern at the time the secondary plan specifically dealing with this area was made. It was not a concern when the City needed money from E.Z. for land.

Indeed in all previous dealings with the City E.Z.’s business was considered lawful, and E.Z. has complied with all previous bylaw enforcement measures. [ 21 ] These arguments were, of course, resisted by the City. In its submissions to the Committee, the City wrote as follows: [6] The City has acknowledged that the use of the property to be an auto body repair shop (“Repair Shop” as defined in the Zoning Bylaw ) and has not disputed that claim. The Development Officer issued approval of a permit in 2008 for a minor building repair (Record p. 198).

The permit listed the use of the building as “Automobile Repair” (Record, p. 199). The simultaneous use of the property as a Salvage and Recycling Yard likely was not apparent to the Development Officer at that time as there was no suggestion in the permit that Automobile Salvaging had been taking place (Record, p. 23). The City has never authorized use of the property as a Salvage and Recycling Yard as defined by the Zoning Bylaw (Record p. 72), despite the Appellant’s claims on page 4 of the Submission. More than one use of the property can exist at one time, either as a principle or accessory use.

The use of Salvage and Recycling Yard is not permitted on the Subject Property (Record p. 74, 75). [ 22 ] The Committee allowed the City’s appeal and provided reasons for doing so. It also dismissed the applicant’s appeal, but it appears the Committee did not provide written reasons explaining why it did so.

The style of cause on the Committee Decision shows that each of the parties is both an appellant and a respondent and the concluding paragraph of the Committee Decision shows that the applicant’s “cross-appeal” was dismissed but, beyond this, no mention is made of the applicant’s arguments in support of continuing any aspect of its business model (or the City’s arguments in response). [ 23 ] I am thus persuaded that leave should also be granted in relation to these two additional questions: (

a) Did the Committee err in law by failing to provide sufficient reasons with respect to the applicant’s appeal before it? (

b) Did the Committee err in law by failing to give effect to s. 221(

a) of the Planning Act ? [ 24 ] Given the Development Board’s decision with respect to the Official Community Plan, and Committee’s apparent lack of reasons on point, I find that these questions are sufficiently meritorious to warrant leave. As with the First Group of Questions, I also find that these two questions are sufficiently important to the decision under appeal, particularly when taken together with the questions for which I have already granted leave.

I do not, however, grant leave in relation to the applicant’s final suggested question of law in the Second Group of Questions, i.e., “Failed to consider a relevant bylaw within its jurisdiction”. In its written argument on this application, the applicant put forward the following submission in relation to leave being granted in relation to this issue: 59. The fact that the Proposed Appellant had been the subject of enforcement measures under the City of Regina Fire Bylaw was drawn to the attention of the SMB [Committee].

In 2010 the Proposed Appellant was required to invest in fencing in order to properly store the junked vehicles located on the premises. 60. The SMB made no attempt in its decision to try to reconcile this past enforcement measure with the current Order to Comply. Yet issues relating to The Fire Safety Act are clearly within the SMB’s jurisdiction by virtue of

section 18.1 of The Municipal Board Act , SS 1989-89, c M-23.2. This argument was expressly rejected by the Development Board and I see no merit to it. [ 25 ] That brings me to the final question of law raised by the applicant: Did the Committee base “its decision on costs on an irrelevant factor”?

[ 26 ] I am not persuaded to grant leave in relation to this question as it lacks merit. The applicant asked the Committee to award costs, regardless of the outcome, because of what the applicant saw as the City’s aggressive treatment. The Committee Decision addresses that issue: [24] In its written submission, E.Z. alleged that throughout the course of this proceeding “… the City has been engaged in unacceptable, callous, and oppressive litigation conduct, and therefore requests that the SMB [Committee] orders an assessment of its costs for the entirety of the proceeding on a solicitor–client basis”. [25] The Saskatchewan Municipal Board (SMB) has the authority to make a costs award under

section 58 of The Municipal Board Act . The SMB has the authority to fix the costs or to have them taxed/assessed. [26] E.Z. correctly submitted that there is no case authority setting out the criteria to be satisfied for a party to prevail in its request for costs to be ordered in a proceeding. This fact, in our view, illustrates the extreme reluctance of the SMB to award costs.

Accordingly, it is clear that it would require significant misconduct on the part of a party to receive an award of costs by the SMB. [ 27 ] Upon review of E.Z.’s submissions with respect to this issue, we have determined that the City’s actions during the [Development] Board hearing and this proceeding do not warrant an award of costs. [27] In its memorandum of law, the applicant argues that the Committee “based its decision not to award costs on the absence of judicial consideration of

section 58 of The Municipal Board Act ” (at para 67). I do not read the Committee Decision in that manner. Rather, I conclude that the Committee’s reason for declining to award costs is stated in the Committee Decision : the City’s actions “do not warrant an award of costs” (at para 27). Thus, I would not grant leave in relation to this question. [ 28 ] In its draft notice of appeal, the applicant asked that if leave were granted in relation to any of the above matters that consideration be given to granting leave in relation to a series of procedural questions arising from those grounds of appeal: 4. THAT the appeal is taken upon the following grounds:

i) The investigative process resulting in the Order to Comply breached procedural fairness in that it failed to provide the Appellant with an adequate opportunity to provide an informed response before the Order to Comply was issued; ii) The issuance of the Order to Comply breached procedural fairness in that it did not provide the evidentiary basis for the Order to Comply; iii) The initial hearing in front of the Development Appeals Board gave rise to a reasonable apprehension of bias because the public notice issued pursuant to section 222(3) of The Planning and Development Act , 2007, SS 2007, c P-13.2 , presupposed the answer to the issue in front of the Development Appeals Board; iv) The initial hearing in front of the Development Appeals Board breached procedural fairness because the evidentiary basis for the Order to Comply and the rationale supporting the Order to Comply were provided to the Appellant 6 days before the initial hearing date;

v) The initial hearing in front of the Development Appeals Board breached procedural fairness because the City of Regina, in its capacity as a litigant in the proceeding, failed to honour its duty to disclose relevant information … . [ 29 ] The applicant acknowledges that grounds i), ii), iv) and

v) were cured by the Development Board’s granting of adjournments to permit proper disclosure and preparation. The applicant admits further that it would not be possible to set aside the Committee Decision as a result of these grounds but asks that this Court grant declaratory relief in order to provide guidance to the parties. It also asks that costs be awarded in this Court because of the additional costs that it had to incur because of the adjournments. [ 30 ] The applicant did not provide authority that would permit leave to be granted on such footings.

Accordingly, leave will not be granted in relation to these issues. As to the ground involving bias, the applicant also acknowledges in its memorandum of law that “it subsequently received a fair hearing in front of the DAB”. Again, in light of this admission, I can see no basis upon which leave could be granted in relation to this issue. [ 31 ] In

summary, leave is granted in relation to these questions of law: (

a) Did the Committee err by applying the wrong standard of review to its consideration of the Development Board Decision ? (

b) Did the Committee incorrectly apply the correct standard of review? Specifically, did the Committee err in law by finding the Development Board had erred when it interpreted the Bylaw as permitting some junked vehicles could remain on the property as an aspect of permitted uses under the Bylaw of “Automobile sales and service” or “Repair shop”? (

c) Did the Committee err in law by failing to provide sufficient reasons with respect to the applicant’s appeal before it? (

d) Did the Committee err in law by failing to give effect to s. 221(

a) of the Planning Act ? [ 32 ] The applicant is given leave to revise its notice of appeal in accordance with these reasons and to submit it to me for my approval prior to its being served and filed.

[ 33 ] Counsel for the City advised that no costs were being sought regardless of the outcome. If the applicant is successful in its appeal to the Court, it shall have costs for this Chambers motion. “Jackson J.A.” Jackson J.A.