Homex Realty v. Wyoming

Homex Realty v. Wyoming
Collection
Supreme Court Judgments
Date
1980-11-12
Report
[1980] 2 SCR 1011
Judges
Laskin, Bora; Martland, Ronald; Ritchie, Roland Almon; Dickson, Robert George Brian; Beetz, Jean; Estey, Willard Zebedee; Chouinard, Julien
On appeal from
Ontario
Subjects
Municipal law
Decision Content
Supreme Court of Canada
Homex Realty v. Wyoming, [1980] 2 S.C.R. 1011
Date: 1980-11-12
Homex Realty and Development Company Limited (Respondent) Appellant;
and
The Corporation of the Village of Wyoming (Appellant) Respondent.
1980: February 27; 1980: November 12.
Present: Laskin C.J. and Martland, Ritchie, Dickson, Beetz, Estey and Chouinard JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Municipal law—By-laws—Planning legislation—Subdivision control—Refusal by successor in title to great majority of subdivision lots to carry out provisions of subdivision agreement—Appellant’s lots deemed not to be plan of subdivision by by-law—By-law enacted without notice—Connection between appellant’s water main and municipal water system forbidden by separate by-law until conditions met—Whether or not by-laws should be quashed—Discretionary nature of judicial review—The Planning Act, R.S.O. 1970, c. 349, s. 29—The Interpretation Act, R.S.O. 1970, c. 225, s. 17—The Judicial Review Procedure Act, 1971, 1971 (Ont.), c. 48—The Registry Act, R.S.O. 1970, c. 409—The Municipal Act, R.S.O. 1970, c. 248, ss. 283, 284, 285.
The appellant disputed an order of the Ontario Court of Appeal upholding two by-laws of the respondent municipality. The issues turned on the interpretation of s. 29 of The Planning Act and the jurisdiction or authority of the courts under The Judicial Review Procedure Act, 1971.
As a condition of registration of a plan of subdivision in the Village of Wyoming, Atkinson, the owner and subdivider of the parcel of land, entered into an agreement with the Village for the installation of municipal services in the subdivision. This agreement, dated January 22, 1968, and registered September 26, 1975, provided in a general way for the owner’s providing “all the requirements financial and otherwise, of the Corporation re surfacing of roads, installation of services and drainage”. The agreement also prevented the sale of the lands in question until the agreement had been fully carried out, except with the consent of the Village, but the provision did not provide that consent would operate to release Atkinson from his obligation to the Village. Before any services were installed, Homex bought the great majority of the lots on the subdivision with the Village’s consent. There was some question as to wheth-
[Page 1012]
er or not Homex had undertaken to assume the obligations of the original subdivider. Nevertheless, when protracted negotiations between the Village and Homex concerning the installation of services proved fruitless, the Village, in April 1976, pursuant to s. 29(3) of The Planning Act and without notice to Homex, enacted by-law 7 deeming the lots purchased by Homex not to be a registered plan of subdivision. Homex, in September 1976, made application for judicial review for an order quashing by-law 7 and, while the application was pending, checkerboarded its lots.
In November 1975, Homex and the Village negotiated the installation of services along the only street requiring them. By-law 6, enacted in December 1975, provided that it was the policy of the Village that it would neither assume responsibility for a water pipeline constructed by Homex nor permit its connection to the municipal water supply system. Homex coupled an application in judicial review to quash by-law 6 with the application for an order to quash by-law 7.
Held (Ritchie and Dickson JJ. dissenting): The appeal should be dismissed.
Per Laskin C.J. and Martland, Beetz, Estey and Chouinard JJ.: Homex, through its president, undertook to assume the obligations undertaken by the first subdivider under the subdivision agreement. Further, Homex intended to convey the lots as purchased on this subdivision without the installation of any services leaving the expense to the Village and other inhabitants.
Wherever a statute authorized the interference with property or other rights and was silent as to whether or not the agency in question was required to give notice prior to the intervention in such rights, the courts would “supply the omission of the legislature” and require the agency in question to afford the subject an opportunity of being heard before it proceeded. The application by the courts of this old principle depended on the nature of the action being undertaken by a body, such as a municipal council.
The statutory framework, the nature of the action being taken by the Village Council, and the general circumstances prevailing at the time had to be taken into account in determining the appropriate interpretation applicable to s. 29(3) of The Planning Act. The statute did not expressly require notice to the affected landowners; nevertheless, Council was aware that Homex would oppose by-law 7. The by-law had some characteristics of a community interest by-law and also
[Page 1013]
represented the purported culmination of an inter partes dispute conducted on adversarial lines between Homex and the Council. Council’s action was not in substance legislative but rather quasi-judicial in character so as to attract the principle of notice and the consequential doctrine of audi alteram partem. The statute did not displace the rule of audi alteram partem and the resultant duty in Council to hear first and decide later. There was no hearing in the formal and ordinary sense by the Council and, while each side was fully aware of the other’s position, Homex did not receive an opportunity to make known its position once fully aware of the Council’s final position.
The order of judicial review, sought with reference to by-law 7, was in the nature of certiorari. The discretionary nature of this remedy is undoubted, and a party may by his conduct disentitle himself to relief. The remedy was denied in the special circumstances of the case: the attempts by Homex to avoid the burden of the Atkinson agreement; the avoidance, through checkerboarding, of Village regulation should the by-laws be invalid; and the fact that the Village’s action, made even more urgent by the litigation possible, was the only course open to it.
There was no basis for quashing by-law 6. The by-law simply recorded an agreement between the Village and the landowner, and announced the Village’s policy with reference to the pipeline. Passage of by-law 6 was not tied to Homex’s disposition of its lands in plan 567 and was not tainted by bad faith.
The form of proceedings taken was free from any deficiency in its statutory base. Either The Judicial Review Procedure Act, 1971 or the quashing provisions of The Municipal Act were open and appropriate.
Per Dickson and Ritchie JJ., dissenting: Where the by-laws in question affected the land or property of specified individuals, the courts implied a common law duty to be heard. This duty was not precluded by implication by the requirement of notification after passage of the by-law.
There was no reason why the Wiswell principle should have been applied restrictively, or why it should not have been applied in this case. The entitlement to notice and a hearing did not depend on there being a conflict between two private owners, which the municipality had to resolve. The right to a hearing did not spring from the
[Page 1014]
fact that there were competing groups or individuals, some opposed to the by-law but from the fact that the by-law interfered, in particular, with the private property rights of this one owner.
The public interest was best served by affording the private interest full disclosure and a fair opportunity to be heard. There was no a priori reason why the private interest should yield abjectly to the public interest. The Village could undoubtedly pass the by-law if it were in the public interest, but, prior to deciding in favour of the public interest, the Council should have heard the landowner’s submissions. An act could not be labelled “legislative” for the purpose of dispensing with fairness. Although a sophisticated owner, given prior notice, could “checkerboard” and defeat the intent of the section, it was for the legislature to decide that prior notice was not necessary. Further, the requirement of both prior and subsequent notice was not redundant: the earlier notice permitted representations from those who wished to protest and the subsequent notice informed all concerned of the action taken.
The right to procedural fairness no longer demanded an a priori classification of a process as judicial or quasi-judicial. It was not particularly important that the function of the municipality was classified as “legislative” or “quasi-judicial”. Rather, it was necessary to look at the nature of the function and to the facts of each case. The by-law in question was not of wide and general application, but was rather aimed at deliberately limiting the rights of the appellant, entitling it to some procedural safeguards—at a minimum, notice of the proposed by-law and the opportunity to be heard. The prolonged negotiations between the Village and Homex did not satisfy the onus placed on the Village and did not result in waiver of notice for Homex had been given no indication of the Village’s intention to enact the impugned by-laws.
[Cooper v. Wandsworth Board of Works (1863), 14 C.B. (N.S.) 180; Bishop v. Ontario Securities Commission, [1964] 1 O.R. 17; Re Buhler and Rural Municipality of Stanley (1977), 72 D.L.R. (3d) 447; R. v. Brighton Corporation; Thomas Tilling, Lim., Ex parte (1916), 85 L.J. K.B. 1552; R. v. Liverpool Corporation, Ex parte Liverpool Taxi Fleet Operators’ Association, [1972) 2 Q.B. 299; Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] S.C.R. 957; Re Zadrevec et al. and Town of Brampton, [1973] 3 O.R. 498; Re Hershoran and City of Windsor et al. (1973), 1 O.R. (2d) 291; Alliance des Professeurs catholiques de Montréal v. Commission des Relations ouvrières de la province de
[Page 1015]
Québec et al, [1953] 2 S.C.R. 140; Calgary Power Ltd. v. Copithorne; [1959] S.C.R. 24; Re Orangeville Highlands Ltd. et al. v. Attorney General of Ontario and Township of Mono et al. (1975), 8 O.R. (2d) 97; Wiswell et al. v. Greater Winnipeg, [1965] S.C.R. 512; Re Braeside Farms Ltd. et al. and Treasurer of Ontario et al. (1978), 20 O.R. (2d) 541; Re McMartin and City of Vancouver (1968), 70 D.L.R. (2d) 38; P.P.G. Industries Canada Ltd. v. Attorney General of Canada, [1976] 2 S.C.R. 739; Harelkin v. University of Regina, [1979] 2 S.C.R. 561; Cock v. Labour Relations Board (1960), 26 D.L.R. (2d) 127; Re de Havilland Aircraft of Canada Ltd. and City of Toronto (1980), 27 O.R. (2d) 721, referred to.]
APPEAL from a judgment of the Court of Appeal for Ontario[1], allowing an appeal from a judgment of the Divisional Court quashing the municipal by-laws in question on an application for judicial review.
J. Edgar Sexton, Q.C., and Brian Morgan, for the appellant.
Lyle F. Curran, Q.C., for the respondent.
The judgment of Laskin C.J. and Martland, Beetz, Estey and Chouinard JJ. was delivered by
ESTEY J.—The appellant disputes an order of the Ontario Court of Appeal upholding two by‑laws of the respondent municipality being by-laws nos. 6 and 7, passed by the Village Council in 1975 and 1976. The issue turns on the interpretation of s. 29 of The Planning Act, R.S.O. 1970, c. 349, and the jurisdiction or authority of the courts under The Judicial Review Procedure Act, 1971, 1971 (Ont.), c. 48. In relating the essentials of the history of this matter, the appellant is referred to as Homex and the respondent municipality as the Village or the Council.
One Atkinson owned a parcel of land in the Village of Wyoming, County of Lambton, consisting of about 25 acres and in March of 1968 registered a plan of subdivision of that parcel as no. 567 in the Registry Division of Lambton. As a condition of such registration Atkinson entered into an agreement with the Village for the installation of municipal services on the land comprised in
[Page 1016]
this subdivision. This agreement was dated January 22, 1968 but was not registered until September 26, 1975 perhaps because it was not until sometime in 1973 that The Planning Act, supra, was amended to provide for the registration of such subdivision agreements and for their enforceability against subsequent owners of the land. This agreement provided in a general way for the provision by Atkinson, the owner, of “all the requirements, financial and otherwise, of the Corporation re surfacing of roads, installation of services and drainage”.
Before any services were installed on this subdivision, Homex entered into an agreement with Atkinson for the purchase of 25 lots on the subdivision and this agreement was performed by the delivery by Atkinson to Homex of a deed to which, pursuant to the subdivision agreement, the Village consented. This deed was registered in May 1973. Atkinson, the vendor, retained three lots on the subdivision. Some time prior to the sale by Atkinson to Homex, Atkinson had conveyed to the Village two lots pursuant to the subdivision agreement. There are two lots on the subdivision owned by third parties not involved in this litigation. There is some dispute as to whether Homex was to be bound by and to perform the subdivision agreement on behalf of Atkinson. In the original documentation filed in the Supreme Court of Ontario there is to be found an affidavit completed by Norman Redick, the president of Homex, and sworn on July 28, 1976 and which affidavit is referred to in the notice of motion for judicial review. In the record filed before this Court, such an affidavit appears and paragraph 4 thereof states in part as follows:
No mention was made in this deed [from Atkinson to Homex] of the assumption by Homex of any of the obligations of Atkinson under the subdivision agreement made by him with the Village nor did Homex assent to any such assumption at such time.
However, in Appendix A of the respondent’s factum, there is set forth a page 2 of an affidavit sworn by the president of Homex and filed before the Divisional Court and the Court of Appeal which states in part as follows:
[Page 1017]
4. That by this agreement Homex agreed to assume the obligation of Atkinson under a subdivision agreement made by him with the Corporation of the Village of Wyoming regarding park allowance. A copy of this subdivision agreement was registered against the lands of Homex by the Town Solicitor, William M’Clean Dawson, on September 25, 1975, with registration number 375351.
An examination of the original documentation filed on this appeal in this Court reveals that the affidavit, completed by Redick as president, was filed in support of the application for judicial review in the Divisional Court and forwarded to the Court of Appeal for the hearing of the appeal in the Divisional Court. It sets out as page 2 thereof the excerpt of the affidavit I have copied above from the respondent’s factum. In what appears to be an explanation for this discrepancy, counsel for the respondent in his factum states:
That affidavit [being the excerpt copied above in which Homex agreed to assume at least some of the obligations of the subdivision agreement] was filed by the Appellant’s then solicitor by mistake; however, it is submitted that it is an accurate statement as to Homex’s agreement with Atkinson.
It is strange indeed that what purports to be the original affidavit appended to the originating notice of motion has a retyped page 2 setting forth the affidavit which appears in the record filed in this Court. This page 2 has obviously been typed on a different typewriter, appears in double space as compared to the single spacing of the balance of the affidavit, and the insert alone has been initialled only by the person (signature illegible) who took the affidavit of Mr. Redick. The mystery is deepened by the fact that the jurat does not reveal any date of re‑execution of the affidavit. I have no hesitation in finding for the purposes of disposing of this appeal that the affidavit in support of the application for judicial review was as filed in its original form and, should it become important to the disposition of this appeal, I would without hesitation find that on the record the president of Homex indeed had knowledge of the existence and the content of the subdivision agreement between Atkinson and the Village dated January 26, 1970 and that Homex, through its president, undertook to assume the obligations of Atkinson thereunder.
[Page 1018]
I come to this conclusion as regards the entire contents of the agreement notwithstanding the limitation in the offer to purchase of the incorporated terms of the agreement to those regarding the “park allowance”. This handwritten excerpt seems to me to read as follows:
present, subdivision agreement with the Village regards park allowance to be accepted by the purchaser. Wire[?] fence to be erected jointly with the purchaser and vendor.
As to the agreement itself, it was signed on behalf of Homex by Redick who then witnessed his own signature, and finally witnessed the execution of the agreement by the vendor. After the agreement was executed, Homex obtained the consent of the Village on March 23, 1970 to the conveyance of these lands from Atkinson to Homex. In his affidavit of uncertain date, the president of Homex says that “no reference is made in the deed” to the subdivision agreement. However, it hardly can be said that Homex in these circumstances was unaware of the existence of such an agreement. If one need further support for such a conclusion, it is to be found in the affidavit of the vendor, Atkinson, where he says in part that Redick was “well acquainted with the requirements and details” of the agreement before the contract was entered into between Homex and Atkinson; and that it was “clearly understood between him and me before the said contract was made that Homex would be responsible for satisfying the requirements of the Corporation of the Village of Wyoming…”. The affidavit went on to state that for so undertaking the obligations of Atkinson, Homex was accorded a reduction in price of $5,000. This affidavit was not answered by Homex nor was Atkinson cross-examined upon it. The Court of Appeal concluded (and with respect I agree) that Homex knew of the services agreement at the time of the conveyance of the land to Homex. The Divisional Court made no finding on this matter.
The subdivision agreement between Atkinson and the Village entered into prior to the registration of plan of subdivision 567 provided in part:
[Page 1019]
The Owner hereby covenants and agrees with the Corporation to satisfy all the requirements, financial and otherwise, of the Corporation re surfacing of roads, installation of services and drainage.
There is no specific reference to the engineering specifications for the work to be done in connection with the installation of roads and services, nor is there any reference to the requirements for park allowances which were referred to in the agreement of sale to Homex. The contract prohibits the sale of any of the lands in question by Atkinson until the agreement has been fully carried out except on the consent of the Village, but such provision does not provide that the consent will operate to release Atkinson from his obligation to the Village.
Before proceeding further with the narrative, it is important to pause and observe that at this stage of events Homex was the owner of all the lots in the subdivision fronting on Norman Street, except two lots which had been conveyed by Atkinson to the Village and two other lots owned by third parties which fronted on another street which had already been serviced, and no issue arises herein with respect to those two lots. The lots retained by the vendor, Atkinson, do not front on Norman Street. The waterline was installed by Homex on Norman Street and the other services and installations mentioned in the subdivision agreement were to be installed on that street but in fact were not so installed.
After the sale to Homex by Atkinson was completed negotiations ensued between the Village and Homex for the installation of services on this plan of subdivision.
These negotiations between Homex and the Village proved abortive although numerous documents were proffered by the Village. In his cross-examination on his affidavit, Redick perhaps reveals the reason why these protracted negotiations came to nought when he stated:
Q. That’s what you really want. Everything to be done on local improvement?
A. I think it should be done that way in this case.
[Page 1020]
Q. Yes. That’s your proposal?
A. I think it should be done that way.
If it be relevant to the outcome of these proceedings, the conclusion must be reached from an examination of the record, and particularly the cross-examination of the president of Homex, that Homex had indeed purchased these lands from Atkinson with the intention at the time, or thereafter acquired, of conveying the lots on this subdivision without the installation of any services so as to leave to the Village and the other inhabitants thereof the cost of providing these services on some basis or other, but not at the expense of Homex.
After the negotiations between the parties (which spread over a period of a year and a half) with respect to the installation of services had proved fruitless, the Village, without any notice to Homex, enacted by-law no. 7 on April 1, 1976 pursuant to s. 29(3) of The Planning Act, supra, whereby the parts of registered plan no. 567 indicated in the by-law (and being those lots purchased by Homex)
are hereby designated as parts which shall be deemed not to be a registered plan of subdivision for the purposes of subsection (2) of Section 29 of The Planning Act.
In September 1976 Homex made application by way of judicial review for an order quashing by-law 7. While this application was pending before the Divisional Court, Homex checkerboarded the lots received by it from Atkinson on plan 567. By checkerboarding, reference is made to the procedure discussed in detail in Re Herman et al. and Kalbfleisch et al.[2] and Reference re Certain Titles to Land in Ontario[3] and adopted by conveyancers on occasion in the Province of Ontario to escape the strictures of The Planning Act, supra. By this technique, Homex conveyed to a series of third parties, including Robert C. Redick, Norman C. Redick, Orville A. Redick, Daniel J. Redick, and others, so many lots as were necessary to produce a situation in which neither Homex nor any other single registered owner, other than the vendor Atkinson and the Village, held contiguous
[Page 1021]
lots on this plan of subdivision. Thus if by-law 7 be ineffective so that plan of subdivision 567 remains fully registered under The Planning Act, supra, and The Registry Act, R.S.O. 1970, c. 409, then Homex has apparently so arranged its land holdings as to make it immune from further regulations which may be adopted by the Village under The Municipal Act, R.S.O. 1970, c. 284, with regard to the lots held by and for it on plan 567. On the other hand, if by‑law 7 is effective, then the attempt to checkerboard has failed and Homex will be unable to convey, without further permission from the Village, any of its holdings on plan 567. I pause to point out that this rather unusual record is silent as to what declarations of trust, if any, are extant between the registered owners of some of the lots on 567 and Homex. The affidavit of one Catherine Clark Dawson simply sets out the state of the abstract of title as it existed on some date prior to the date her affidavit was taken, being September 6, 1977. The statement is made by the respondent in its factum that the lands were checkerboarded by Homex prior to the hearing of the application by the Divisional Court. This statement remains unanswered by the appellant and I take it, for the purposes of disposing of this appeal, that these lands were indeed so checkerboarded.
Almost as a sidelight to this main activity, Homex and the Village, in November 1975, entered into discussions concerning the installation of a water line on Norman Street which, as already stated, is the only street on the subdivision requiring services, and on which front the lots checkerboarded by Homex. The record contains a letter dated November 7, 1975 from the Village to Norman Redick, presumably in his capacity as president of Homex, answering a letter from him which is not in the record, and advising Redick of a decision reached by the Council of the Village:
in regards to the installation of the 6″ water line and fire Hydrant [sic].
Their decision as follows: “That council reply to the letter from N. Redick, giving him the privelege [sic] of installing a watermain on Norman Street, providing he assures council in writing that no further services are
[Page 1022]
installed without signing an agreement with the village; the granting of such privelege [sic] shall in no way constitute a complete subdivision agreement, nor shall it inhibit the reopening of negotiations with Mr. Redick”.
Thereafter the Village Council enacted by-law no. 6 on December 29, 1975 without any further notice to or dealings with Homex in the matter. After a recital of a request by Homex for permission to install a water pipeline on Norman Street, paragraph 2 of by-law no. 6 provides:
2. It is the policy of the Council of the Corporation of the Village of Wyoming that the said water pipe line in Norman Street from Superior Street to approximately the north limit of Lot 7 according to said Plan 567 shall not be assumed or taken over by the Corporation and no connection shall be permitted to be made to the said water pipe line and no water shall be supplied through the said water pipe line and the said water pipe line shall not form part of the municipal water supply system of the Village of Wyoming until authorized by a futher [sic] by-law of the Corporation of the Village of Wyoming.
Homex coupled an application in judicial review to quash this by-law with the application already mentioned for an order quashing by-law no. 7.
Although some of the issues herein raised are common to both by-laws 6 and 7, the larger question arises concerning the latter by-law and I therefore first deal with the validity of by-law no. 7.
The provisions in The Planning Act, supra, relating to the conveyance of land are found in s. 29, of which subss. (2) and (3) are here relevant:
(2) No person shall convey land by way of a deed or transfer, or grant, assign or exercise a power of appointment with respect to land, or mortgage or charge land, or enter into an agreement of sale and purchase of land or enter into any agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more unless,
(a) the land is described in accordance with and is within a registered plan of subdivision; or
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(b) the grantor by deed or transfer, the person granting, assigning or exercising a power of appointment, the mortgagor or chargor, the vendor under an agreement of purchase and sale or the grantor of a use of or right in land, as the case may be, does not retain the fee or the equity of redemption in, or a power or right to grant, assign or exercise a power of appointment with respect to, any land abutting the land that is being conveyed or otherwise dealt with; or
(c) and (d)—not here applicable
(e) a consent is given to convey, mortgage or charge the land, or grant, assign or exercise a power of appointment with respect to the land or enter into an agreement with respect to the land.
(3) The council of a municipality may by by-law designate any plan of subdivision, or part thereof, that has been registered for eight years or more, which shall be deemed not to be a registered plan of subdivision for the purposes of subsection 2.
Subsection (3) does not expressly require notice before the passage of any by-law authorized by the subsection, nor does the terminology of the subsection raise any necessary implication of a requirement of notice. Subsections (8), (9), (10) and (11) may be of some assistance in construing subs. (3), particularly as to whether it requires the giving of notice prior to the passage of a by-law such as by-law no. 7.
(8) A certified copy or duplicate of every by-law passed under subsection 3 shall be lodged by the clerk of the municipality in the office of the Minister.
(9) A by-law passed under subsection 3 is not effective until the requirements of subsections 10 and 11 have been complied with.
(10) A certified copy or duplicate of every by-law passed under this section shall be registered by the clerk of the municipality in the proper registry or land titles office.
(11) The clerk of the municipality shall send by registered mail notice of the passing of a by-law under subsection 3 to each person appearing by the last revised assessment roll to be the owner of land to which the by-law applies, which notice shall be sent to the last known address of each such person.
[Page 1024]
Subsection (11) would indicate that the question of notice was of concern to the legislators and perhaps might be construed as indicating that, having expressly considered the question, the only notice prescribed is a notice after the passage of the by-law which, by subs. (9), is a condition precedent to the effectiveness of the by-law.
It should be noted that by an amendment to The Planning Act, supra, brought into effect by 1978 (Ont.), c. 93, s. 2(4), subss. 9 and 11 were repealed and the substituted sections deliberately and expressly provide that a notice is not a condition precedent to the effectiveness of a by-law passed under subs. (3); and a further procedure is prescribed for the hearing of persons who complain within a prescribed time after receipt of notice under subs. (11). Section 17 of The Interpretation Act, R.S.O. 1970, c. 225, provides:
The repeal or amendment of an Act shall be deemed not to be or to involve any declaration as to the previous state of the law.
The courts of course are concerned only with the state of the rights of the parties under the statute as it existed at the time of the passage of the by-law, and accordingly the interpretation of s. 29(3) as it then stood is not affected by subsequent legislative action.
The courts long ago developed the general proposition that wherever a statute authorizes the interference with property or other rights and is silent as to whether or not the agency in question is required to give notice prior to the intervention in such rights, the courts will “supply the omission of the legislature” and require the agency in question to afford the subject an opportunity of being heard before it proceeds: Cooper v. Wandsworth Board of Works[4]; S.A. de Smith, Judicial Review of Administrative Action, 4th ed., at p. 161. Whether or not the courts today will invoke this principle of interpretation may depend upon the nature of the action being undertaken by a body such as a municipal council. There are instances where the omission of the prerequisite notice is not supplied
[Page 1025]
by the courts, as, for example, where the statute in question, by its very nature and by the legislative framework there adopted by the Legislature, must be read as precluding the requirement of prior notice. The Ontario Court of Appeal, for example, in Bishop v. Ontario Securities Commission[5], so construed s. 19 of The Securities Act, R.S.O. 1960, c. 363. Roach J.A., in speaking for the Court, stated:
The whole purpose of the Act might be defeated if the chairman could make an order or ruling under that section only on notice to the person or company affected and after a hearing. Many days might elapse between the giving of the notice to the persons or company sought to be affected and the conclusion of the hearing during which time those persons or that company if dishonest and disreputable could continue to prey upon the public and plunder and fleece many people. For that reason it was essential to the purpose of the Act that the chairman should be empowered to act promptly and without notice to the person or company sought to be affected. The chairman’s first duty is to the public and in empowering him to discharge that duty the Legislature has by appropriate legislation at the same time protected the person or company affected by the order by giving to him on it at their election the right to have the order reviewed by the Commission. (at p. 23)
The Planning Act of Manitoba (1975 (Man.), c. 29) contained at the time in question a provision identical to s. 29 (11). Subsequently, the Manitoba statute was amended (1977 (Man.), c. 35, s. 34) to prescribe a notice to affected parties as a condition precedential to the validity of a by-law enacted pursuant to a provision comparable to s. 29(3) of the Ontario statute. The effect of this amendment is precisely the opposite to that of the 1978 Ontario amendment. Prior to the adoption by the Manitoba Legislature of the 1977 amendment, the Court of Appeal in Re Buhler and Rural Municipality of Stanley[6] found that a by-law passed without notice was invalid and therefore quashed, not, however, by reason of the lack of notice but rather on the basis of bad faith in which the courts found the council to have acted.
[Page 1026]
In determining the appropriate interpretation applicable to s. 29(3) of The Planning Act, supra, the statutory framework, the nature of the action being undertaken by the Village Council, and the general circumstances prevailing at the time of the action by the Village Council must be taken into account.
The Village Council is, of course, entirely a creature of statute. It derives all its power, its status, its rights as well as its limitations from various provincial legislation of which The Municipal Act, supra, may be said to represent the core. This legislation has assigned a wide range of activities and responsibilities to the municipal council which have been variously categorized by the courts through the years. In some instances the council acts purely as a sub-legislature enacting legislation within the ambit of the authorizing statute for the general governance of the region in respect of which the council is given its statutory authority. In other instances, as for example in the granting or withholding of individual licences pursuant to applications, the courts have classified the municipal activity as “judicial”: R. v. Brighton Corporation; Thomas Tilling, Lim., Ex parte[7], and in so exercising their judicial function
… they are bound to act judicially. It is their duty to hear and determine according to law, and they must bring to that task a fair and unbiased mind. (per Sankey J. at p. 1555)
More recently, in R. v. Liverpool Corporation, Ex parte Liverpool Taxi Fleet Operators’ Association[8], Lord Denning has stated:
It is perhaps putting it a little high to say they are exercising judicial functions. They may be said to be exercising an administrative function. But even so, in our modern approach, they must act fairly: and the court will see that they do so. (at p. 308)
This aspect of municipal law is addressed by Laskin J. (as he then was) in Welbridge Holdings Ltd. v. Greater Winnipeg[9], at pp. 968-969:
[Page 1027]
The defendant is a municipal corporation with a variety of functions, some legislative, some with also a quasi-judicial component (as the Wiswell case determined) and some administrative or ministerial, or perhaps better categorized as business powers.
…
A municipality at what may be called the operating level is different in kind from the same municipality at the legislative or quasi-judicial level where it is exercising discretionary statutory authority.
The act of passing by-law 7 is an exercise of the Council’s legislative function. En route to that exercise there may have been a decisional process but that factor does not, in my view, alter the characterization at law of the Council’s action, or append thereto other consequences at law. This problem was examined in Welbridge, supra, at p. 969 where Laskin J. (as he then was) stated:
A narrower basis of liability is, however, proposed in the present case, one founded only on the failure to carry out the anterior procedural requirements for the enactment of By‑law No. 177. Although those requirements were held in the Wiswell case to be expressions of a quasi-judicial function, this did not mean that the hearing to which they were relevant was a step unrelated to the legislative exercise in which the defendant was engaged.
It is clear that the passage of the by-law, if effective, has stripped Homex of its freedom to exercise the right of conveyance given by the provincial planning statute. On the other hand, it is equally clear that the balance of the township, that is to say the local ratepayers, may well be seriously affected by the action of Homex if the latter is successful in avoiding the consequences of the deregistration of plan 567. One effect would appear to be that the other inhabitants would be obligated in theory, or in fact, or both, to service the lots of subdivision 567 as and when they may be occupied by residences. It was submitted by the respondent that the argument of a notice requirement in these circumstances answers itself. The power granted the Village under s. 29(3) would be defeated by the response in fact taken by Homex in checkerboarding its lands prior to hearing of the application to quash. Thus we have the opposing
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considerations of Wandsworth, supra, and Bishop, supra.
The Ontario Court of Appeal in Re Zadrevec et al and Town of Brampton[10] was concerned with the action of a municipal council which, as here, had failed to give notice to affected parties of proposed by-laws rezoning their lands. Such by-laws, before they could become effective in law, required the approval of the Ontario Municipal Board. Prior to that approval an action was taken under The Municipal Act, supra, to have the by-laws in question declared void. The Court found that the Legislature, by imposing the approval of the Board as a condition precedent to the validity of the by-laws, had removed from the Municipal Council and transferred to the Board
… the judicial process which the council in the absence of such transfer would have been required to discharge. (per Kelly J.A. at p. 504);
and continuing at p. 507:
It is my opinion that the Legislature has indicated its intention that the other provisions it has made relieve the Council of the obligation to act judicially in adopting the amendment to the official plan and that Council, being aware that the procedure it was following would result in an opportunity for all parties to be heard by the Board and of the Board to exercise its judgment, was relieved of the obligation to act judicially as it would have been required to do if the Legislature had not made such other provisions. Consequently, there was no denial of natural justice in the action of Council and the by‑law adopting the amendment is not liable to be declared void on that account.
In somewhat similar circumstances a municipality was required by the courts to give notice prior to the enactment of a by-law which rendered forfeit the right of redemption by the payment of arrears of taxes: Re Hershoran and City of Windsor et al.[11] The statute was silent as to notice but the Divisional Court found that the city council lost jurisdiction on failing to notify the landowner of its impending action by by-law and hence the by-law was quashed. It is interesting to note that the by-law in question