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Tuesday, August 9, 2022
Town denies wrongdoing, says it acted legally in development freeze

In an ongoing legal battle between Hummel Properties Ltd. and the Town of Niagara-on-the-Lake, the municipality says it acted legally when it implemented a bylaw to freeze all development in Old Town.

Hummel, a prominent Niagara developer, is suing to quash the bylaw for illegality under Ontario's municipal and planning acts.

He alleges that in planning the bylaw — which involved a special council meeting just days after new councillors were sworn-in in December 2018 — Lord Mayor Betty Disero and “at least one” other councillor-elect acted in bad faith to target one developer and conspired to plan the bylaw before councillors had taken their oaths.

Among a long list of allegations, Hummel claims Disero and now-resigned councillor Stuart McCormack started work on the bylaw Nov. 22, 2018, almost two weeks before council was sworn in, with all of council being guided to approve it on Dec. 5.

Hummel is also suing for damages associated with the development freeze.

In response to a factum filed in court by Hummel's lawyers, the town says council had every right to call the special meeting and pass the bylaw, and that no rules were broken by the mayor or council-elect in planning the statute before councillors had taken their oaths.

The town claims it is “an integral component of good and efficient government that informal discussions and collaboration occur between councillors regarding constituent issues and proposed solutions.”

It is asking the court to dismiss the application in its entirety and award the municipality “substantial” costs, town lawyer Terrence Hill says in the document.

The town’s response, filed March 10, says despite the timing of the meetings, council acted in good faith and “denies any non-compliance with procedural or statutory requirements.”

The town disputes Hummel's arguments one by one and says protecting NOTL's heritage resources has been a “longstanding objective” and that it needed to implement the development freeze while it addressed “deficiencies” in the town’s 1994 official plan — which hadn’t been updated since 2005.

Prior to instituting the development freeze, “events had occurred in the town which had sparked a renewed public call for strengthened policies to protect heritage resources and to put a freeze on development in the Old Town until new policies could be studied, reviewed and adopted,” the town says.

While the town's response did not identify those events, it later acknowledges it was “widely known that the town’s constituents had expressed concerns surrounding the Randwood development.”

Hummel alleges the town targeted the companies of Benny Marotta, another prominent developer, who planned to build a hotel and subdivision on the Rand Estate properties — land that had already been zoned for Marotta’s intended use. However, a vocal backlash from a resident group called Save Our Rand Estate made the contentious development a major issue during the 2018 election period.

The town’s response did not address Hummel's allegations of its failure to include the interim control bylaw on the meeting's agenda, but said the town is not required to give public notice of an interim control bylaw.

In response to Hummel's claim that the town didn't undertake a study in relation to the development freeze — a requirement under the Planning Act — the town says there is no stipulation that the study needs to be directly related to the interim control bylaw, only that a study be undertaken.

“The Planning Act prescribes only one statutory condition for the enactment of interim control bylaws: the requirement that the municipality direct that a review or study be undertaken,” the response says.

The town argues its review of the official plan constitutes a study, as council was trying to address land use policies.

On Nov. 11, 2019, council extended the development freeze for a second year. Hummel also claims the extension of the bylaw, which council later repealed in June 2020, was not justified by any study.

The town argues its review of the official plan continued through 2019 and that it extended the freeze in case of an appeal to the amendment of the town's official plan — which had been amended, but was subject to an appeal period of 20 days. 

“Accordingly, there was concern by council that should the (bylaw) be repealed and the (amendment) be appealed, the town would be left without the compatibility policy amendment required to protect development of Old Town.”

“Subsequently, council’s concerns materialized, and the official plan amendment was appealed, preventing the lifting of the (bylaw),” the town says.

Regarding accusations of illegality under procedural bylaws, the town says there are “different standards of review” depending on the “extent to which the illegality in question involves a question of law and the extent to which it affects the democratic legitimacy of its decision.”

In response to bad faith allegations that councillors held meetings in secret before being sworn in, the town argues the Municipal Act defines a “meeting” as any meeting of council in which “a quorum of members is present and members discuss or otherwise deal with any matter in a way that materially advances the business or decision-making of the council, local board or committee.”

The town's position is that councillors didn't have meetings, but rather informal “discussions” between individual councillors and therefore it wasn't in contravention of any laws.

Hummel argues those discussions did materially advance the town’s decision-making, in that Disero requested council to prepare the draft bylaw Nov. 22, and that McCormack had emailed planning director Craig Larmour about the draft bylaw prior to being sworn in. He alleges the efforts were co-ordinated in advance by the council-elect at the time.

In response to Hummel's argument that the town did not live up to its own procedural laws by only giving one day's notice before calling the meeting to implement the bylaw, the town claims it technically didn’t need to give notice of the special meeting in advance.

The town says its own procedural bylaw was “ambiguous regarding the procedure in calling special or emergency meetings.”

The procedural bylaw says a special meeting must be announced “no later than the Thursday prior to the meeting except in the case of an emergency.”

The procedural bylaw doesn't “define or place limitations on what constitutes an emergency” and the town says the mayor and council can decide if circumstances warrant an emergency meeting.

Hummel alleges when the town did file notice on Dec. 4 the agenda was purposely cryptic and meant to hide council’s intention to pass the development freeze bylaw.

The town argues that, again, “there’s no legislative provision” that requires it to describe agenda items in any “specific manner.”

And, even if Hummel’s accusations of breaching procedural bylaw are found to be true, the town says the court doesn’t need to quash the bylaw, since it is not ultra vires, or beyond the authority of the town.

“While the town denies Hummel’s allegations that a breach of a procedural requirement occurred … the court’s power to quash a bylaw that is not ultra vires is entirely discretionary.”

The town argues the court’s consideration should not be based on whether it broke the law, but rather “the spirit and with the object of ascertaining whether there has been a substantial compliance with all other requirements of the statute, and not of finding some slight or trivial departure on which to hinge a decision adverse to the validity of the bylaw.”

The town also says no advance notice or hearing is required before passing an interim control bylaw.

“Accordingly, a reasonable inference can be made that the spirit and object of the legislation supports a finding that a departure from a procedure bylaw amounts to a mere technical breach and is not sufficient grounds to quash the bylaw.”

Hummel claims the town’s justification of an official plan review — which he said was to do with the Rand Estate and a problem with the height of the proposed hotel, not the zoning — did not constitute a land use study.

The town argues “land use” is not defined in the Planning Act and that a “broad and purposive approach” should be used to interpret the meaning of land use.

The town didn’t mention McCormack in its filing, but said Larmour and former manager of planning Eric Withers prepared the draft bylaw for council to approve.

Hummel’s argument cites a case against the City of St. Catharines, in which it was found not to have legitimate planning grounds for an interim control bylaw, but was a “political measure intended to appease certain ratepayers.”

The town argues the situation is not the same in NOTL and that the people opposed to the St. Catharines development were more concerned about the “category of people” the housing would attract.

In response to claims of bad faith in targeting Marotta, the town says “it was widely known that the town’s constituents had expressed concerns surrounding the Randwood development.”

It argues, however, that council members are “not prohibited from considering the views of their constituents in enacting policy decisions.”

The town relies on another judgment which found that “a court should not be quick to find bad faith because members of a municipal council, influenced by their constituents, express strong views against a project.”

It also cites the case of a “teen disco” project in Ottawa where the city passed an interim control bylaw to review its zoning.

“(The judge) accepted that the teen disco project was the catalyst behind the enactment of the interim control bylaw but found that while council had the intention of stopping the project – in response to public reaction – they did so in order that the study might develop a zoning policy that would be in the public interest of that area, which was unobjectionable.”

The town says “constituents’ expressed concerns of rapid development occurring in Old Town, regardless of a specific catalyst, reflects a good faith exercise of democratic governance.”

Unless the court upholds the bad faith claim against the town, the town argues Hummel is not able to sue for any damages associated with the bylaw.