Section 57(1) of the Planning Act (the “Act”) allows a council authorized to grant consents the ability to issue what is known as a “certificate of validation”. These certificates state that a prior contravention of the subdivision control provisions of the Act are deemed to have never had the effect of preventing the conveyance of land or the creation of an interest in land.
Put simply, a validation certificate corrects a Planning Act breach that has already occurred – it “turns back the clock” to re-fuse the chain of title.
For example, if John Smith owned Parcel A, and then purchased the abutting Parcel B, the effect of the transaction may be that Parcels A and B merge into a single parcel on title – even if they have independent parcel identification numbers (PINs).
If Parcels A and B have merged, and John Smith then sells Parcel A to Tim Jones – a third party – the sale is invalidated as it breaches section 50 of the Act. In addition, if Tim Jones registered a mortgage on title to Parcel A, the mortgage would also be invalidated.
In this case, a validation certificate for the sale of Parcel A would validate that conveyance as well as the subsequent mortgage by deeming that the contravention of s.50 of the Act to never have prevented the conveyance of Parcel A (thus also validating the subsequent mortgage).
Validation certificates must include both the effect of the validation and a precise legal description of the land subject to the offending conveyance. The certificate becomes legally “valid” from the moment it is issued and has the retroactive effect of curing any other earlier conveyancing mistakes or errors. Though typically used to cure prior contraventions, the issuance of a certificate is not dependent on a subsequent transaction and may be applied for in anticipation of a conveyance or mortgage.
Unlike other Planning Act applications, the stated registered owner of the subject land need not be the applicant for a validation certificate. In fact, there is no restriction on who can make the application. There is often good reason for this latitude. For example, the bank in the example above may seek to enforce the mortgage that was invalidated by the conveyance of Parcel A after its merger with Parcel B. Often it is a frustrated owner of land or mortgagee that applies for a validation certificate.
While the authority to grant validation certificates is vested in the council or a committee authorized to give consents under Section 53 of the Act, applications for validation certificates are not governed by the same procedural rules, submission or notice requirements. This follows logically as validation certificates do not create a new lot – they seek only to restore previously existing lot lines that were inadvertently lost. Also, the need for a validation certificate is often only discovered on the eve of a transaction’s closing. Especially in the context of a residential transaction, when moving trucks are packed and ready to unload, applications for validation certificates require a swift response.
In issuing a validation certificate, a council or committee shall have regard to the same criteria as when considering a consent application (found in subsection 51(24) of the Act). Additionally, Ontario Regulation 144/95 requires the validation certificate to conform to (but not comply with) any applicable official plan, zoning by-law or ministerial zoning order.
These criteria should be accessed in light of the applicable circumstances.
The overall intent of Section 57(1) is to provide a method of fixing an inadvertent breach of the Act in order to avoid the requirement of a consent application.
In some cases, a parcel may not (or may no longer) comply with applicable zoning by-law standards. But for the ability to obtain a validation certificate, the owner would be required to apply for a consent to re-sever the parcel. This may also require a variance or rezoning application, to ensure compliance with the applicable zoning by-law. However, the consent, variance and rezoning application processes are far more onerous and may create an undue burden and risks in the circumstances. Therefore, as the regulation specifically requires conformity (rather than compliance) with applicable zoning, the question of unnecessary cost, legal non-conforming status, the burden of addressing an inadvertent error and fairness should be considered in assessing whether a council or committee should grant a validation certificate.
Limitations on Good Faith: Usanovic and Insurers’ Obligations in Respect of Statutory Limitation Periods
Ontario law imposes a duty of good faith and fair dealing on both insurers and those whom they insure. However, the parameters of this duty are not always clear. While it is established law that insurers must adjudicate their claims fairly and in a timely manner, courts are left to determine additional elements of the duty of good faith on a fact-specific basis.
Recently, the Ontario Court of Appeal was asked to extend the duty of good faith to require an insurer to notify an insured of a statutory limitation period under the Limitations Act, 2002. Generally speaking under the Act, plaintiffs seeking to commence legal proceedings must do so within 2 years of the date on which they discovered the injury, damage, or loss in question. In Usanovic v. Penncorp Life Insurance Co. , the Ontario Court of Appeal held that insurers are not obligated as part of their duty of good faith to notify insureds of this limitation period.
Fadil Usanovic purchased an insurance policy from Penncorp Life Insurance Co. in 1999. The Policy insured Usanovic against disability arising from accidents and sickness, among other things.
In September 2007, Usanovic fell from a roof and suffered various injuries. He made a claim under the Policy and received disability benefits until November 2011, when Penncorp terminated his benefits because he was no longer “totally disabled” as defined in the Policy. Through counsel in January 2012, Penncorp advised Usanovic that in order to receive further benefits, he was required to submit medical records to prove that he was “unable to engage in any and every occupation for which he was reasonably fit by reason of his education, training, and experience.” Usanovic did not provide Penncorp with any medical records.
In early 2015 Usanovic consulted a lawyer who advised him of the limitation period under the Act. At this time, Usanovic became aware that he should have commenced an action against Penncorp within 2 years of the day on which he discovered the “injury, loss or damage”. Usanovic commenced an action against Penncorp in April 2015, approximately 3.5 years after Penncorp terminated his benefits.
The Arguments and the Decision
In the lower court, Usanovic argued that Penncorp was bound by its duty of good faith to notify him of the limitation period under the Act when it denied his claim. He argued that the limitation period did not begin to run until Penncorp gave such a notice. The motion judge rejected these arguments, stating that (1) the limitation period began to run when Usanovic received Penncorp’s denial letter on January 12, 2012; and, (2) requiring Penncorp to notify Usanovic of this fact would create a “substantial shift” in the boundaries of an insurer’s duty of good faith.
In the Ontario Court of Appeal, Usanovic argued on the basis of consumer protection legislation that the duty of good faith should require insurers to notify insureds of the applicable statutory limitation period. The Court of Appeal upheld the motion judge’s decision. Strathy C.J.O. declined to invoke consumer protection law in this context. He stated that while an insurer’s duty of good faith requires it to “give as much consideration to the welfare of the insured as to its own interests” , this did not rise to the level of a fiduciary duty, wherein the insurer would be required to hold the insured’s interests as paramount to its own interests.
Strathy C.J.O. further held that Usanovic’s proposed expansion of the insurer’s duty of good faith would in essence overrule the discoverability provisions of the Act. If Usanovic’s argument was to stand, then in every case the insurer’s notification of the limitation period would trigger the start of the limitation period, as opposed to the insured’s discovery of his or her loss, injury, or damage. This would bring ambiguity – rather than clarity – to the understanding of the statute.
What Does Usanovic Mean for Insurers in Ontario?
Once again our partners have been named in the 2018 Canadian Legal Lexpert Directory as Leading Practitioners in Property Development for Toronto and the GTA.
Congratulations to Jeff Davies, Kim Beckman, Mark Flowers and Michael Melling for being recognized as leading lawyers in a competitive marketplace.
To be included in the directory is an honour and acknowledgement of excellence by a practitioner’s own peers and colleagues.
On March 1, 2018 the Ontario Municipal Board (the “Board”) released a decision on the low-rise regulations (Chapter 10) of the Toronto Zoning By-Law 569-2013. A copy of the Decision is available here.
A number of regulations that are often the subject of minor variance applications were changed, or will be changed, as a result of the Decision.
The Board did two things:
First, it ordered that a number of regulations be reviewed, and revised pursuant to its direction. These regulations are mostly related to the way height is calculated – so that it is more consistent with the old by-law standards. It also includes review of dormer width, some parking provisions, and the definition of basement and first floor. A focus for the review is on provisions that have led to difficulties building on lots less than 12 metres. Click here for Table of Regulations Undergoing Further Review
Second, the Board ordered that a number of regulations be approved or approved as modified. Approved provisions relate generally to the categories of:
• Height – Roof slope restrictions and height of Structures such as antennas and flagpoles
• Building Length and Depth – How to measure and maximums
• Gross Floor Area Calculations – How to calculate and when attics are included
• Setbacks and Separation – Minimum side yard setback and distance between Residential Buildings on the same lot
• Platforms – When platforms are permitted encroachments into setbacks, when platforms are exempt from lot coverage calculations, and that balconies are permitted to be within 0.2m of finished floor height instead of having to be the same.
• Ancillary Buildings – Where they are permitted, maximum height and size, and when setbacks or separation distances apply
• Parking – Where it is permitted and where the access is to come from
• Height of Structures on a Building – Includes mechanical elements
Davies Howe “…lands the top prize in this year’s GTHA ranking for its consistently solid performance in a large number of highly complex and contentious appeals.” #1 Development Law Firm in the NRU’s 2017 annual ranking for the GTHA.
“Davies Howe wraps up another great year by moving up one spot to take the penultimate place in our Toronto rankings”. #2 Development Law Firm in the NRU’s 2017 annual ranking for Toronto.
Davies Howe will continue to lead the way in 2018 in the new planning landscape as we transition from the OMB to LPAT (Local Planning Appeal Tribunal) and continue to work in Toronto’s recently established TLAB (Toronto Local Appeal Body) process.
Building solutions. Planning success.
The Building Better Communities and Conserving Watersheds Act, 2017 (“Bill 139”) received Royal Assent on December 12, 2017. This means that Bill 139 is in force. However, the substantial amendments contained in the Schedules to Bill 139 which impact the future processing of Planning Act applications will not come into force until a day to be named by proclamation by the Lieutenant Governor of Ontario. Current indications are that the Proclamation Date will occur after the rules and regulations governing the new appeals tribunal are complete, anticipated in the spring of 2018.
The most substantial changes in the new legislation relate to the Planning Act approval and appeal process, including the enactment of the Local Planning Appeal Tribunal Act, 2017 (the “LPAT Act”) and significant changes to the Planning Act. The amendments will repeal the Ontario Municipal Board Act and continue the Ontario Municipal Board (the “OMB”) under the name of the Local Planning Appeal Tribunal (the “LPAT’’). Changes to other legislation including the Conservation Authorities Act, were also incorporated in this Bill.
While many question marks remain, one thing is clear: Bill 139 will change Ontario’s land use planning system as we know it.
Bill 139 contains substantive limits on rights of appeal from municipal decisions on Official Plans and Zoning By-law amendments (“OPAs and ZBLAs”) and significant procedural changes to the planning appeals process. The appeal grounds for applications for site plan, plans of subdivision, consents and minor variances remain unchanged.
Prior to the enactment of Bill 139, the grounds for appeal for Official Plans and zoning by-laws have been broad and fairly easy to satisfy. Appeals are filed with the municipality or approval authority and then forwarded to the OMB for a Hearing de novo; in other words, the OMB could consider all the evidence independently. The OMB was not limited to determining if the original decision was wrong or unreasonable. Their mandate was to determine if the proposed plan represented good planning and met all policy tests.
The LPAT’s role in assessing proposed OPAs and ZBLAs is much more restricted and is based on very limited grounds for appeal.
For appeals of a municipally adopted or approved Official Plan or OPA, and zoning by-law passed by a municipality, the only basis upon which an appeal can be filed is by showing that the part of the Official Plan which is of concern to the appellant is inconsistent with provincial policy statements or fails to conform with or conflicts with a provincial plan, or fails to conform with the applicable upper tier plan.
For appeals of privately initiated applications for OPAs and appeals of refusals of zoning by-laws, appellants have to demonstrate both:
- How the existing Official Plan or zoning by-law is inconsistent with provincial policy statements, fails to conform with or is in conflict with a provincial plan, or fails to conform with the upper tier Official Plan; and,
- How the requested Official Plan achieves consistency and conformity with the provincial policies and plans and the upper tier Official Plan, as applicable.
Thus, the grounds of appeal are very limited and no longer allow for the very broad “good planning” grounds previously permitted. As indicated above, the conformity test requires an applicant to establish that the existing parts of the Official Plan or zoning by-law are inconsistent with and fail to conform to relevant provincial policy and plans. Unless an Official Plan has yet to undergo a conformity exercise, it will be difficult for an applicant to satisfy this part of the test. These grounds may be easier to satisfy for ZBLA appeals, where, as in many cases, municipal zoning by-laws have not been updated to bring them into conformity with more recent OPAs.
In addition, the appeal periods for non-decision have been extended. For OPAs and ZBLAs accompanying OPAs the new period would be 210 days. For standalone ZBLAs, the time has been extended to 150 days.
There are also circumstances where appeals are no longer permitted. For example, where a municipality has included policies in its Official Plans identifying major transit station areas and providing for use, height and density policies in these areas, these policies will no longer be appealable, nor could these policies be amended by private application without permission of the municipality.
Furthermore, where the Minister of Municipal Affairs and Housing is the approval authority of an Official Plan or OPA, there will be no ability to appeal the Minister’s decision to approve the document, even if substantially modified from the plan adopted by the municipality. Municipalities are also precluded from appealing in this circumstance. This restriction is particularly significant in the context of municipal comprehensive reviews. Under Bill 139, only the upper tier or single tier municipality can undertake a municipal comprehensive review, including matters relating to settlement boundary expansions and employment conversions. Because many of these decisions are subject to Ministerial approval, in most cases municipal comprehensive review decisions will not be appealable.
One of the most notable changes going forward is the “two-phase” appeal process which will apply to OPA and ZBLA appeals.
The first-stage of the appeal process is demonstrating to the LPAT that the conformity test referred to above, as applicable, has been met. At this stage, the legislation provides that the LPAT “may”, not “shall”, hold an oral hearing. Even if the appeal proceeds to an oral hearing, parties cannot adduce evidence or call/examine witnesses. Evidence would be based primarily on the written record which was before council when it made its decision. Thus, if an oral hearing is permitted it would be based on this record and oral submissions of the parties. A memorandum from the Ontario government seems to suggest that parties’ oral submissions will be limited to a 75 minute period.
Note that this restriction on adducing evidence and calling witnesses also applies to a non-decision of a subdivision application. Bill 139 is silent on the ability to call witnesses or adduce other evidence with respect to all other planning applications and thus, at this time, the right to do so does not appear to be precluded.
During the first-stage of the appeal process, if the LPAT finds that the conformity test is not met, the appeal does not proceed any further. The appeal is dismissed.
If the LPAT finds that the conformity test is met, the application is returned to Council for an opportunity to make a “second decision”.
If Council makes a decision when the matter returns to it, the applicant can appeal to the LPAT again on the same grounds.
If Council fails to make a decision within the prescribed time frame, the applicant can appeal to the LPAT on any ground.
At this stage, the ability to call evidence and examine witnesses is not specifically precluded under the LPAT Act. However, the Minister has the authority to make regulations governing the practices and procedures of the LPAT and may propose to similarly limit the “second decision” appeals to oral submissions with strict timelines.
In relation to the second appeal, if the LPAT determines that the appellant has met the applicable tests, the LPAT may modify or approve the requested amendment. If the applicable test is not met, the LPAT is required to refuse the appeal.
The hurdles of this new process have led many to choose to file appeals with the OMB prior to the enactment of Bill 139. On December 7, 2017 the Ontario government released proposed transition regulations for public comment on the Environmental Registry. The Regulation proposes that the following appeals are protected and will be subject to the current legislative regime to be dealt with by the OMB:
- Appeals filed before December 12, 2017; and
- Appeals filed before Proclamation (to be determined) if an application is complete before December 12, 2017.
Any applications completed after December 12, 2017, if appealed, are to be dealt with under the new rules and considered by the LPAT. Likewise any appeals filed after Proclamation, will be considered by the LPAT under the new rules.
While the proposed transition Regulations are reassuring for clients with applications in queue with the OMB, there is no guarantee that they will be passed in their current form. Even if they are, the future of planning appeals in Ontario promises to be a whole new world.
Major mass transit projects are popping up across Ontario, encouraged in part by major investments from the Provincial and Federal governments. The cities of Toronto, Mississauga, Brampton, Hamilton, Kitchener-Waterloo and Ottawa are all working on building or expanding transit systems with Light Rail Transit (LRT). Other municipalities are making substantial investments in faster bus systems, including dedicated Bus Rapid Transit (BRT). These projects have the potential to be among the most transformational city-building projects to date for their respective cities, but this major infrastructure work often brings significant disruption on the way to completion.
A major impact of transit development for property owners along the route is the significant expropriation work often necessary to accommodate expanded transit. Municipal right-of-way widenings are often needed which can mean governments look to expropriate parts of properties, or sometimes entire properties along a transit route. When this happens, the expropriating authority has significant powers to take land for their use under Ontario’s Expropriations Act.
Expanded rapid transit may bring public benefits, but those benefits must be balanced with the protection of existing property interests. The basic principle for expropriation compensation was set out by the Supreme Court in Toronto Area Transit Operating Authority v. Dell Holdings Ltd.  1 SCR 32:
There is a presumption that owners will be fully compensated for all losses resulting from an expropriation – this includes costs for reasonably incurred professional fees from challenging compensation amounts.
The Expropriations Act sets out the procedures available to owners to ensure that they are properly compensated for the property they have lost. The Act also provides that owners are reimbursed for the reasonable professional fees that they incur to achieve this. The goal of the Act is to make owners whole.
Therefore, owners need not worry. While expropriations for major transit infrastructure have increased in recent years and will likely continue to do so for the foreseeable future, affected landowners should receive fair compensation for loss of private property.
On August 15th, 2017, in association with Urban Land Institute Toronto, Davies Howe LLP hosted a roundtable presentation and discussion on the new Growth Plan for the Greater Golden Horseshoe. The new Growth Plan was released on May 18th and came into force July 1st, 2017 as part of the Province of Ontario’s Coordinated Land Use Planning Review.
Davies Howe LLP was pleased to host this event in our new office, which showcased the capacity and functionality of our new multi-purpose boardroom.
The firm proudly looks forward to hosting more events in our new office.