



COURT OF APPEAL FOR ONTARIO

CITATION: Cobalt (Town) v. Coleman (Township), 2019 ONCA 134

DATE: 20190222

DOCKET: C65608

Pepall, Trotter and
    Harvison Young JJ.A.

BETWEEN

Town of Cobalt

Applicant (Appellant)

and

Township of Coleman

Respondent (Respondent)

Michael F. Sirdevan, for the appellant

Raivo Uukkivi and Adrianna Pilkington, for the
    respondent

Heard: February 8, 2019

On appeal from the judgment of Justice James A.S. Wilcox of
    the Superior Court of Justice, dated June 14, 2018, with reasons reported at
    2018 ONSC 3713, 76 M.P.L.R. (5th) 166, and the order dated September 10, 2018,
    with reasons reported at 2018 ONSC 5297.

Trotter J.A.:

A.

introduction

[1]

This appeal concerns a tract of land (the property) situated in the
    Township of Coleman (Coleman), in the District of Timiskaming. The property
    is owned by the nearby Town of Cobalt (Cobalt). Recently, Cobalt has been
    using the property to conduct a large-scale aggregate extraction operation.
    Coleman objects to this use, alleging that it is not compliant with its current
    zoning by-law.

[2]

Cobalt brought an application seeking a declaration that its use of the
    property for aggregate extraction is a permitted use. The application was dismissed.
    The application judge found that the extraction operation is not a permitted
    use under Colemans zoning by-law and is not a legal non-conforming use
    pursuant to s. 34(9) of the
Planning Act
, R.S.O. 1990, c. P.13. In a
    separate ruling, he awarded Coleman costs, on a partial indemnity scale, in the
    amount of $85,000 (inclusive of fees, disbursements and taxes).

[3]

Cobalt appeals from both orders.

B.

background

(1)

The Property and its Historical Use

[4]

The property is 114.67 acres in size. A road runs through the property,
    cutting it into west and east portions, which are zoned differently. The
    property was transferred by the Province of Ontario to Cobalt on July 4, 1972
    by Letters Patent. The Letters contained the following restriction: IT IS A
    CONDITION of these Letters Patent that the Land shall be used only as a
    municipal park. This restriction was removed in 2002.

[5]

From 1972 to 1997, Cobalt used the property as a municipal park and
    campground, known as Sharpe Lake Park. While there may have been some quarrying
    on the property prior to it being acquired by Cobalt, the extent of this
    activity was unclear. Nevertheless, it had ceased by 1970. As discussed below,
    any aggregate extraction after 1970 was secondary and incidental to the primary
    use of the property as a park. The aggregate was used to service the needs of
    the park, such as creating an entrance road, parking areas, internal roads and
    camp sites, and for other municipal uses in Cobalt outside of the park (i.e.,
    winter sand).

[6]

Following the closure of the park in 1997, Cobalt was unsure about what
    it wanted to do with the property. At one point, it considered selling it.  In
    2013, Cobalt entered into an agreement with Miller Paving Ltd. (Miller) for
    Miller to extract aggregate from the property. A large-scale aggregate
    extraction operation is currently ongoing.

(2)

Applicable Zoning By-Laws

[7]

Coleman passed its first zoning by-law in 1985 (85-9). Under this
    by-law, the entirety of the property was zoned as Open Space, with specified
    residential and non-residential uses. Coleman passed another zoning by-law in
    2006 (06-01), replacing the 1985 by-law. Under the 2006 by-law, the western part
    of the property is zoned as Development and only permitted existing
    non-residential uses in the Development zone. The eastern part of the property
    is zoned Shoreline Residential. The only permitted non-residential use is a
    marine facility. This is the portion of the property where commercial aggregate
    extraction currently takes place.

(3)

The Application Judges Reasons

[8]

The application judge provided detailed reasons for his decision. I
    review only those parts of his decision that are necessary to dispose of this
    appeal.

[9]

The application judge held that the 2006 by-law does not permit the
    operation of a pit or quarry on either of the zoned parts of the property.

[10]

After
    conducting a thorough review of the historical use of the property, the
    application judge explained why Cobalt failed to establish that its current use
    of the property is a legal non-conforming use. In 1970, before the property was
    acquired by Cobalt, there was some indication of quarrying having taken place
    at an earlier time, but this activity had ceased. Referring to the meagre evidence
    concerning unworked and terminated gravel pits, the application judge said,
    at para. 33: When they were used, by whom, to what extent they were used, and
    for what purpose are unknown.

[11]

The
    application judge reviewed Cobalts plans to develop the property after the
    park closed in 1997. Initially, at least, commercial aggregate extraction was
    not on Cobalts radar. By way of example, in its 2001 Sharpe Lake Proposal,
    the Cobalt Economic Development and Planning Committee made no mention of a pit
    or quarry being on site. A subsequent appraisal obtained by Cobalt for the
    purpose of potentially selling the property did not mention workable gravel pits
    or extractive activity. Affidavits from long-time residents, some of whom were
    involved in municipal affairs, were collectively equivocal. As the application
    judge said, at para. 42:

the affidavits were contradictory as to whether there had
    been a pit on or extraction from the property. What they reveal is that, if any
    extraction took place, it was small scale, such that some people were not aware
    of it, and [it] was done for purposes related to the park or for other
    municipal purposes. Furthermore, I find that the evidence shows that the
    extraction was done  in what is now the R4 [Shoreline Residential] zone.

[12]

In
    reviewing correspondence between Cobalt and Coleman about the proposed use of
    the land, which included Colemans opposition to aggregate extraction, the
    application judge referred to an August 23, 2005 letter from Cobalt asserting that
    there was an existing aggregate pit on the property, and that it appeared to be
    a legal non-conforming use. The application judge observed, at para. 53: This
    appears to be the first time that Cobalt alleged there was an existing pit and
    that it qualified as a non-conforming use.

[13]

Ultimately,
    the application judge found that there was no evidence of prior aggregate
    extraction in the Development zone. With respect to the Shoreline Residential
    zone, he held that there was evidence of at least a minimal amount of historical
    extraction: at para. 55. This was sufficient to require an assessment to determine
    whether the current operation is a legal non-conforming use under s. 34(9) of the
Planning Act
.

[14]

In
    undertaking the legal non-conforming use analysis, the application judge applied
    the relevant authorities, including the leading case of
Saint-Romuald
    (City) v. Olivier
, 2001 SCC 57, [2001] 2 S.C.R. 898. He concluded that
    Cobalt failed to discharge its onus of proving that the commercial extraction
    operation is a legal non-conforming use.

[15]

The
    application judge found that historically there was limited and small scale
    extraction for municipal purposes that was conducted on a small part of the
    whole property, leaving the rest essentially untouched and available for uses
    such as the park: at para. 66. He concluded that: The use of the property for
    extraction was secondary and incidental. The essential character of the
    property was preserved.

[16]

The
    application judge contrasted this historical use with the current commercial
    operation, which he characterized as consuming the property. Importantly, applying
Saint-Romuald
, he found, at para. 67, that the present use extends
    beyond a mere intensification of a pre-existing use: It is a use of a
    different kind. It is not just a reasonable evolution of a prior activity.

[17]

Lastly,
    he concluded that the affidavit evidence established the diminution of
    peoples enjoyment of the property and of Sharpe Lake itself: at para. 68.

[18]

As
    the successful party, Coleman sought costs on a full indemnity scale, in the
    amount of $199,329.84. The application judge accepted Cobalts submission that
    Coleman was attempting to recoup fees over the full course of the long-standing
    dispute between the parties. Based on the costs associated only with the
    application, he awarded costs of $85,000, on a partial indemnity scale.

C.

analysis

(1)

The Legality of the Aggregate Extraction Operation

[19]

The
    appellant accepts that the application judge properly identified the legal
    principles concerning legal non-conforming uses. However, it alleges that the application
    judge failed to properly apply those principles to the facts of this case. I disagree.

[20]

The
    appellant contends that the application judge erred by failing to first
    determine whether the activity presently conducted on the property is permitted
    by the 2006 by-law before moving to the question of whether the activity is a
    legal non-conforming use. He made no such error. As noted in para. 7 of these
    reasons, the only permitted non-residential use in the Shoreline Residential
    zone is a marine facility. In the Development zone, the by-law permits only
    existing non-residential uses. Thus, interpreting the by-law leads directly to
    an examination of the historical use of the property. The application judges
    reasons at paras. 25 and 69 directly conclude that the current extraction
    activity is not permitted by the 2006 by-law based on his findings regarding
    the historical use of the property, and the language of the by-law.

[21]

On
    the issue of whether the extraction activity is permitted as a legal
    non-conforming use, this case involves a straightforward application of
Saint-Romuald
.
    Cobalt had the onus of establishing the requirements for a legal non-conforming
    use: see
Feather v. Bradford (Town)
, 2010 ONCA 440, 268 O.A.C. 239, at
    paras. 26-27; and
Lee v. 1435375 Ontario Ltd
.
, 2013 ONCA 516, 310
    O.A.C. 187, at para. 46. The application judge found that Cobalt failed to do
    so.

[22]

As
    the application judge recognized, the historical record was far from clear.
    There were many uncertainties and unanswered questions. There was an
    evidentiary basis for the application judge to find that, when the 1985 by-law
    was passed, the essential purpose of the property was its use as a municipal
    park. Any aggregate extraction was ancillary to this purpose.

[23]

There
    was evidence that, once the property was no longer used as a park (post-1997,
    but prior to the 2006 by-law), Cobalt may have expressed a desire to conduct
    aggregate extraction. However, it is not the intended use of a property that is
    important. To prove a legal non-conforming use, it must be shown that the land was
    actually used for this purpose. As Binnie J. explained in
Saint-Romuald
,
    at para. 5: It does not protect a potential or contemplated use that has never
    materialized...The acquired right is no more than a right to carry on using the
    land for the purpose to which it was
in fact
previously being put
    (emphasis in original).

[24]

There
    is no basis to disturb the application judges findings that, until 2013, any
    aggregate extraction that had occurred on the property was minor and
    incidental, being ancillary to the essential character of the property as a
    municipal park and campground. On the record before him, the application judge
    was entitled to reach this conclusion. In doing so, he committed no palpable
    and overriding error.

[25]

The
    central issue in this case is whether the commencement of a large-scale
    commercial extraction operation was a mere intensification of an existing use
    or use of a different kind. As Binnie J. held in
Saint-Romuald
, at
    para. 25: In general, merely continuing the precise pre-existing activity,
    even at an intensified level, is clearly protected, but the intensification may
    be of such a degree as to create a difference in kind. In more general terms,
    Binnie J. explained, at para. 34:

The Courts objective is to maintain a fair balance between the
    individual landowners interest and the communitys interest. The landowner
    overreaches itself if (i)
the scale or intensity of the activity can be said
    to bring about a change in the type of use
, as mentioned above, or if (ii)
    the addition of new activities or the modification of old activities (albeit
    within the same general land use purpose), is seen by the court as too remote
    from the earlier activities to be entitled to protection, or if (iii)
the
    new or modified activities can be shown to create undue additional or
    aggravated problems for the municipality, the local authorities, or the
    neighbours, as compared with what went before
. The factors are balanced
    against one another. [Emphasis added.]

Binnie J. added that this assessment must be grounded
    in objective facts: at para. 39.

[26]

The
    application judges conclusion that Cobalt had failed to discharge its onus
    turned on item (i), and to a lesser degree item (iii), in the above-quoted
    passage from
Saint-Romuald
. The evidentiary record permitted the
    application judge to find that the change in use of the property  from a
    municipal park and campground (with some incidental extraction of sand and
    gravel) to a large-scale commercial extraction operation  was a change in the
    type of use. He also observed that the change impacted on the community in an
    adverse way. Although the evidentiary foundation for this second finding was
    not nearly as robust, I am not able to conclude that the application judge
    erred in the balancing required by
Saint-Romuald
.

[27]

The
    situation in this case is analogous to the example provided by Binnie J. at
    para. 25 of
Saint-Romuald
:

A family farm which has a few pigs on the fringe of a town may
    continue as a legal non-conforming use, but the result may be otherwise if it
    is sought to expand its pork operation into a factory in the country type
    intensive pig farming.  While in one sense the use has continued, in
    another sense its
character
has been so altered as to become,
    in terms of its impact on the community, an altogether different use. [Emphasis
    in original.]

This example helps to illustrate where the line should
    be drawn. A determination of whether there is a change in the type of use is
    not a matter of simply identifying the precise pre-existing use. The character
    of that use must also be considered. Just as a family pig farm expanded into a pork
    factory in the country becomes a different use, in this case too, the
    expansion from incidental extraction for municipal purposes to large-scale
    commercial extraction has altered the character of the use such that it has become
    a different use altogether.

[28]

The
    application judge did not err in concluding that the extraction operation is
    not a permitted use under Colemans zoning by-law and is not a legal
    non-conforming use under the
Planning Act
. I would dismiss the appeal
    from the application judges refusal of Cobalts request for a declaration.

(2)

Appeal from the Costs Order

[29]

As
    noted above, the application judge awarded Coleman $85,000 in costs, inclusive.
    Cobalt argues that the proper award is in the range of $40,000.

[30]

I
    am not persuaded that the application judge made any error in principle, or
    that the costs order is plainly wrong: see
Hamilton v. Open Window Bakery
    Ltd
.
, 2004 SCC 9, [2004] 1 S.C.R 303, at para. 27.

[31]

Although
    the award was substantial, approximately $12,000 was consumed by disbursements.
    The fees claimed, when considered on a partial indemnity scale, were not disproportionate
    in the circumstances. I note that the decision resolved a long-standing dispute
    with a great deal at stake, both monetarily for Cobalt and to the community of
    Coleman. The application judges findings and conclusions on the issue of costs
    are entitled to deference on appeal: see
Boucher v. Public Accountants
    Council for the Province of Ontario
(2004), 71 O.R. (3d) 291 (C.A.), at
    para. 19. There is no reason to interfere.

D.

Disposition

[32]

I
    would dismiss the appeal. The parties agreed on the quantum of costs payable to
    the successful party on appeal. Accordingly, I would award costs to Coleman in
    the amount of $25,000, inclusive of disbursements and applicable taxes.

Released: SEP FEB 22 2019

Gary Trotter J.A.

I agree. S.E. Pepall J.A.

I agree. A. Harvison-Young J.A.


