On June 21, 2007, the Supreme Court of Canada released a decision dismissing the appeal of the City of London (the "City") from a decision of the Ontario Court of Appeal in respect of an interim control by-law (the "By-law") that had been challenged by RSJ Holdings Inc. ("RSJ") for illegality.
In order to address the concerns of a group of residents living around Richmond Street about an increase of student housing in their neighbourhood, the City passed the By-law in January 2004, thereby freezing all development along Richmond Street between Huron and Grosvenor Streets. RSJ Holdings, as landowner with the intention of developing a parcel of land within the frozen area, applied to the Ontario Superior Court of Justice for an Order quashing the by-law for illegality. It argued that, contrary to the City's obligation under section 239(1) of the Municipal Act, 2001 to hold council and committee meetings in public, the City had decided the pass the by-law in camera.
The Superior Court of Justice dismissed RSJ's application, but on appeal, the Ontario Court of Appeal set aside the Superior Court's decision and quashed the By-law.
The City appealed to the Supreme Court of Canada, and argued that the in camera meetings were permissible pursuant to section 239(2)(g) of the Municipal Act, 2001 because section 38 of the Planning Act allowed the City to pass an interim control by-law without prior notice, and without holding a public hearing. The Supreme Court held that the Court of Appeal was correct in concluding that the interim control by-law provisions contained in the Planning Act in no way obviated the statutory requirement to hold public meetings under section 239 of the Municipal Act, 2001.
There were a few passages of particular note in the Supreme Court's decision. For instance:
The Supreme Court made general comments about the nature of interim control by-laws as follows: "interim control by-laws are powerful zoning tools by which municipalities can broadly freeze the development of land, buildings and structures within a municipality. The power to enact an interim control by-law has been aptly described as an 'extraordinary one, typically exercised in a situation where an unforeseen issue arises with the terms of an existing zoning permission, as a means of providing breathing space suring which time the municipality may study the problem and determine the appropriate planning olicy and controls for dealing with the situation.' "
The Supreme Court affirmed the approach of the judge of the Superior Court of Justice in assuming jurisdiction to determine the legality of the By-law on the basis of the Ontario Court of Appeal's decision in Country Pork Ltd. v. Ashfield (Township). Although an appeal to the Ontario Municipal Board lay in respect of the passage of an interim control by-law pursuant to section 38(4) of the Planning Act, the applications judge had assumed jurisdiction stating that "the application involves a direct frontal attack on the underlying validity and legality of the by-law, thereby attracting the jurisdiction of the Superior Court."
With respect to the deference owed to municipal governments, the Court added to the dissenting reasons of McLachlin, J. in Shell Canada Products Ltd. v. Vancouver (City), which have been broadly cited for the proposition that courts owe deference to municipal governments. The Court said: "in large part, this deference is founded upon the democratic character of municipal decisions. Indeed, McLachlin J. recognized that deference to municipal decisions 'adheres to the fundamental axiom that courts must accord proper respect to the democratic responsibilities of elected municipal officials and the rights of those who elect them.' Municipal law has changed to require that municipal governments hold meetings that are open to the public, in order to imbue municipal governments with a robust democratic legitimacy. the democratic legitimacy of municipal decisions does not spring solely from periodic elections, but also from a decision-making process that is transparent, accessible to the public, and mandated by law. When a municipal government improperly acts with secrecy, this undermines the democratic legitimacy of its decision, and such decisions, even when intra vires, are less worthy of deference."
The Supreme Court's decision helpfully draws together some of an Ontario municipality's obligations under the Planning Act and Municipal Act, 2001, as well as a number of common law principles relating to municipalities. It is available here.