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CMHC v. North Vancouver (District), 2000 BCCA 142



CMHC v. North Vancouver (District)

2000 BCCA 142

Date: 20000224

Docket: CA024522

Registry: Vancouver














The Honourable Mr. Justice Esson


The Honourable Mr. Justice Cumming


The Honourable Mr. Justice Donald



Peter G. Voith and Simon R. Wells


Counsel for the Appellant

Daniel R. Bennett and R.M.



Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

November 25 and 26, 1999


Place and Date of Judgment:

Vancouver, British Columbia

February 24, 2000

Written Reasons by:

The Honourable Mr. Justice Esson


Concurred in by:

The Honourable Mr. Justice Cumming

The Honourable Mr. Justice Donald


[1]  CMHC appeals a decision of Madam Justice Humphries refusing to quash a number of related bylaws passed by the respondent District.  In my view, the chambers judge reached the right conclusion for the right reasons. However, in deference to the forceful submissions made by counsel for the appellant seeking to persuade us to a different conclusion, I will explain my reasons for rejecting those submissions.

[2]  The facts are set out in the reasons of Humphries J., which are now reported at 1998 3840 (BC SC), (1998), 51 B.C.L.R. (3d) 351, 45 M.P.L.R. (2d) 214 (S.C.).  Because of the nature and extent of the land involved and because the landowner is CMHC, the factual background is unusual and in some respects unique.  The downzoning effected by the two sets of bylaws affects a very large area in a fast-growing urban community.  The total affected area is about 1,180 acres of which some 630 acres are owned by CMHC and some 550 acres by the respondent District.  From 1969 until 1995 it was intended by the District that the Urban Reserve Districts be developed for residential purposes.  The Official Community Plan adopted in 1990 provided for the construction of 2,150 homes on about 600 of the 980 acres.  The balance, although zoned "residential", was designated under the Community Plan as “Parks, Recreation and Wilderness”.

[3]  The 1997 rezoning dealt with an area of about 200 acres known as “Northlands” which is contiguous to the southern border of the Urban Reserve Districts.  It had also been intended to be the subject of residential development.  Part of it was owned by CMHC, part by the District.

[4]  The total area is second growth forest, undeveloped except for some trails for hiking and other recreational uses.  It sits at the foot of the southern slope of Mount Seymour.  A substantial area to the north of the affected land is also owned by CMHC but has, since CMHC acquired it in 1969, been subject to the same zoning as that imposed by the impugned bylaws, i.e., “Parks, Recreation and Open Space” (“PRO”).

[5]  The land now owned by CMHC was acquired in 1928 by the federal Crown for defence purposes.  For many years, a large part of it was occupied by the Blair Rifle Range operated by the Department of National Defence.  The land was conveyed to CMHC, a federal Crown corporation, in 1969 to be available for housing development.  In 1928, the area was remote from centres of population and, even in 1969, that part of the District which lies east of the Seymour River was quite thinly populated.  Since then, there has been intensive development in that area.  The 550-acre area owned by the District was intended to be made available for residential development as the District has done in other areas.  It appears that the revenue from land sales has been an important source of revenue to the District.

[6]  Prior to the rezoning, the area had been zoned “RS 1-one acre”, which permits a single family home to be built on a one acre lot.  For some time before the rezoning, there had been discussions between CMHC and municipal staff with a view to beginning development of the lands in accordance with the 1990 official community plan.  CMHC says that the discussions were moving towards development "without question" but the District says that wording overstates the degree of certainty.  It points to the fact that the only step which it had taken by 1995 was to begin arranging a preliminary study under the title "Reconnaissance and Environmental Assessment" with the purpose of identifying "which area must be protected" and which should be "available for development".  However, it seems clear that until 1995 there was a seeming consensus that some parts of the Urban Reserve Districts would be developed for residential purposes.

[7]  It also seems clear that by then, many residents of the District had concluded that the area should not be developed and that it should be retained in its natural state.  A group of citizens organized an active pressure group under the name Group United Around Responsible Development (GUARD) to work towards that end.  Starting in the spring of 1995, strong public pressure was exerted, including a petition signed by some 10,000 citizens, calling on Council (which has seven members including the mayor) to take steps to prevent development.

[8]  At first, only three members of Council appeared to support taking any steps more active than proceeding with the reconnaissance and environmental assessment but by June 1995, a majority voted to instruct staff to pursue rezoning and on October 23, 1995, all six councillors voted for the rezoning and the related amendment of the community plan.  Only the mayor opposed.

[9]  The permitted uses under PRO are:

[1]  any of the following federal, provincial, or municipal uses: park, children’s animal farm, camping ground, trailer park, boat launching area, or place of historical or geological interest

[2]  recreation grounds, the keeping and raising of fish, except fish farming; the keeping and training of dogs; and, the operations of botanical gardens, marinas, stadiums, golf courses, ski resorts, cemeteries and restricted watershed areas.

It should be noted that the word “park” occurs only in subparagraph (a), which specifies the “federal, provincial, or municipal uses”.  The uses permitted to CMHC as a private landowner are those set out in subparagraph (b).  Although it is common ground that CMHC, as an emanation of the Crown, is not bound by municipal bylaws, it also accepts as a matter of policy that it will be bound by the bylaws as if it were a private owner in the full sense.

[10] The first of two proceedings brought by CMHC was launched in November, 1995 by way of a petition seeking to set aside the bylaws passed on October 23 as well as two bylaws passed at the same time which amended the Official Community Plans to accord with the new rezoning.  That order was sought pursuant to s.313 of the Municipal Act, R.S.B.C. 1979, c.290 ("the Act") and s.2 of the Judicial Review Procedure Act, R.S.B.C. 1979, c.209.  The petition also sought declarations that the amending bylaws are void for illegality.

[11] The petition alleges that the amending bylaws are invalid because they are:

(a)  enacted in excess of the District’s statutory jurisdiction, in bad faith and without a proper planning purpose;

(b)  unlawfully discriminatory;

(c)  enacted unfairly and in conflict of interest; and

(d)  unreasonable.

Several pages of particulars follow those broad allegations.

[12] Similar bylaws relating to the Northlands area were passed unanimously on July 21, 1997 by a differently constituted council.  The petition seeking to have those set aside was filed on August 15, 1997.  The allegations in that petition are essentially the same with some differences to take account of events which occurred up to the point of passage of the second set of bylaws.

[13] The hearing before Humphries J. in 1998, proceeded on affidavit evidence.  The evidence adduced by CMHC consisted of several affidavits sworn by Mr. Tse who, as Senior Project Manager, was responsible for managing CMHC’s properties in the District.  To some extent, his affidavits set out matters which he heard or observed in the course of his dealings with the District, but for the most part they consist of a great volume of records of one kind or another which are connected to the affected lands.  The evidence introduced by the District was in the form of affidavits sworn by Mr. Torry, the District’s Manager of Planning.  As such he worked closely with the mayor and councillors in relation to matters of planning and development, including having an advisory and drafting function in connection with the impugned bylaws.

[14] For the purposes of the appeal, appellant’s counsel concentrated on the facts set out in, or which might be inferred from, some 33 documents and some limited aspects of the evidence of Mr. Tse and Mr. Torry.  Most of the other documents, some of them extremely voluminous, seem to have little if any direct connection with the rezoning, although some are of interest for historical reasons.  The majority of the extracts relied on by the appellant are taken from minutes of Council and other bodies such as the District Advisory Planning Commission.  The minutes are maintained in a relatively skeletal form, often recording only the wording of a motion and the result of the vote.  A number of Council meetings were held in camera, particularly after November, 1995 when litigation was underway.  There is a reference in September, 1995 to an opinion having been received from the District's solicitors "regarding private property in Mountain Forest/Cove Forest Urban Reserve Areas" but privilege was maintained as to the contents of the opinion.

[15] It appears that the matter of rezoning was first raised before Council by Councillor Crist on April 18, 1995 when he produced a report re: “Cove Forest and Mountain Forest” which reads as follows:




1.   Both Cove Forest and Mountain Forest in the Seymour Area and currently designated as development areas under the Seymour Official Community Plan be preserved as Park, Recreation and Open Space; and

2.   Staff be requested to change the Seymour Official Community Plan accordingly.



The people of Seymour have expressed a strong desire to maintain both Cove Forest and Mountain Forest as Recreation areas.  The taxpayers of Canada have spent money for trail network in that area and the people have come to expect that this money would not be spent in vain.  In the absence of a Rapid Transit extension to North Vancouver an additional 2,000 homes in the area would exacerbate the existing traffic problems even more.



[16] Councillor Crist's resolution, in the terms of his recommendation, was defeated but Council passed a resolution asking staff to report at the next meeting on the current status of the areas in question.

[17] On May 1, Council heard several persons who spoke in support of preserving the “Cove Forest and Mountain Forest”.  It defeated a resolution by Councillor Cuthbert that action on the “wildlife reconnaissance and environment” study be deferred and that staff be instructed to report by June 1 "outlining options to gauge public opinion on the proposed two neighborhoods”.  However, on June 5, Councillor Cuthbert's motion that staff prepare plans to alter the land use designation to "PRO" was passed with only the mayor voting against.  That step was taken in face of negative recommendations from staff.  In September, Council received a report from the Manager of Planning on the subject of "Private Property Affected by Mountain Forest/Cove Forest Proposed Re-zoning”.  Reference is made therein to a letter from the District’s solicitors regarding that matter.  That report noted:

Based on a title search of the properties within the two neighborhoods, CMHC and the District are the largest owners. However, there are seven legal private parcels in Mountain Forest and seven legal private parcels in Cove Forest.



The reference to "private parcels" is to lots in the affected area which had been acquired by individuals with the intention of building their residences in those locations.  Those properties, and a few others similarly situated in the Northlands area, were excepted from the amending bylaws so that the owners retain the right to build.  That is the basis for CMHC's complaint of unlawful discrimination.

[18] On September 20 Mr. Torry, after reporting in some detail to Council on the bylaws that would be required, recommended that the bylaws be introduced and referred to public hearing on October 11.  He noted in his report:

The District and Canada Mortgage and Housing Corporation lands are currently zoned Single-Family Residential One Acre Zone.


The existing policy designations and zoning for the other individual land owners will not be altered by any of these bylaws.


Under the heading “Conclusion” Mr. Torry said:


The change in policy designations for Mountain and Cove Forest will result in the loss of 2150 new housing units and approximately $146,000,000 in land sales revenue. However, a further 600 acres of land will be preserved as a natural wilderness area.



[19] The reference to loss of revenue was to the loss which would be incurred by the City from not being able to market its property as residential property.  The appellant submits that the last sentence, by treating the whole of the 600 acres as being reserved as a natural wilderness area, demonstrates that even senior staff was of the view that passing the rezoning bylaws would result in the CMHC land as well as that of the District remaining as wilderness.  At about the same time, the District’s Advisory Planning Commission met to consider a number of pieces of business including the proposed rezoning and "strongly recommended" that Council not proceed with that rezoning, but that the matter be considered by the community at large by way of a referendum once various analyses were completed.  On the same day, the District’s Parks Advisory Committee met and, after hearing from Mr. Torry regarding the proposed rezoning, passed a motion expressing its support for the existing Official Community Plan and its view that there was no compelling reason for rezoning the whole of the affected area as PRO.

[20] The public hearing, which was well attended, was held on October 11.  The Manager spoke at some length, outlining the history to that point, including the several negative recommendations.  A brief summary of each of the six bylaws which would be required was presented.  The purpose of the two rezoning bylaws was stated to be:

To preserve that area identified as Cove Forest as an Open Space area.




To preserve that area identified as Mountain Forest as an Open Space area.



"Open Space area" is a term apt to describe both the public and private uses permitted by the bylaw (supra, para.9)  The four bylaws dealing with Official Community Plans each described the purpose as being to delete a particular area “from future neighborhood development”.  Amongst the representations opposing the bylaws was an extensive written submission from the Chamber of Commerce.

[21] On October 23, with all members of Council present, the six bylaws received second and third reading and were adopted with only the mayor voting against.  A motion was then moved:

THAT staff prepare a Parks Dedication Bylaw(s) for the Cove and Mountain Forest Urban Reserve areas along with a report outlining the process and possible specific timing for an early referendum date for formal public approval of the dedication.



That motion was passed without dissent.

[22] CMHC attaches great importance to that motion as proving most clearly that Council intended the passage of the rezoning bylaws to result in the property of CMHC as well as of the District becoming a park.  Mr. Tse, who was present at the meeting, said it was his impression that the bylaw was directed to all of the property affected by the rezoning.  Mr. Torry’s response to that is that the bylaw applied, and as a matter of law could only apply, to land owned by the District.  The requirement for dedication is to be found in s.533 of the Act which reads:

533.(1)   The council of a city, town, district or village municipality may, with the assent of the electors, by bylaw dedicate for a public purpose real property owned by the municipality.

(2)  Notwithstanding subsection (1), the assent of the electors is not required for the dedication, by any means whatever, of real property for highways or of real property of an area of 5000 m2 or less for any other public purpose



[23] Similarly, counsel for CMHC attaches great significance to the fact that the District’s documents including the minutes of meetings make little distinction between the land owned by the District and land owned by CMHC.  The entire rezoning process is generally referred to as rezoning to "Park, Recreation and Open Space".  That, it is submitted, shows that it was Council’s intention to turn CMHC’s land, as well as that of the District, into parkland.  The fact is that Park, Recreation and Open Space is the title of the zoning classification which as previously pointed out provides for quite different uses depending on whether the land is public or private.  The title may be more appropriate to describe the uses in s.-s. (a) than to describe those in s.-s. (b) although, as noted earlier, "Open Space" is descriptive of both sets of uses.  In any event, it appears that the zoning classification has been on the books in that form since about 1965 and is one to which reference was often made over the years.

[24] Some of the other evidence relied on by CMHC is in the nature of statements made from time to time by at least two of the councillors which seem to indicate that they saw the effect of the rezoning as being to retain the CMHC and District land as park or wilderness.  There were also statements to that effect made by representatives of GUARD and others who supported the rezoning.  In some of those statements the opinion is expressed that the CMHC lands are public lands “for which we have already paid”, and therefore should be available for public purposes.  It is on the basis of such matters that CMHC contends that Council should have been found to have acted, as its petition asserts: in bad faith and without a proper planning purpose, in an unlawfully discriminatory manner and to have enacted the bylaws unfairly, unreasonably and in conflict of interest and thus to have acted beyond its statutory jurisdiction.

[25] Before dealing with those issues, I will consider the first ground of appeal advanced by CMHC:

1.   The hearing judge erred by according the District unwarranted deference in her judicial review of the impugned bylaws. This was a fundamental error which contributed to her more specific errors.



That ground is based primarily on the chambers judge’s reliance on certain language of this court in MacMillan Bloedel v. Galiano Island Trust Committee 1995 4585 (BC CA), (1995), 10 B.C.L.R. (3d) 121 and in the reasons of McLachlin J. (now C.J.C.) for the minority in Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231.  The appellant also submits that the chambers judge erred in failing to give effect to the "narrow, pro-interventionist approach" which it submits is mandated by the majority judgment in Shell for all cases of judicial review of actions of a municipal council.

[26] I will consider first the submissions based on Shell. At issue in that case was the validity of resolutions passed in 1989 by the City Council of Vancouver providing that the City would do no business with Shell Canada “until Royal Dutch/Shell [the parent company of Shell Canada] completely withdraws from South Africa”.  Shell Canada applied to quash the resolutions.  At first instance, Maczko J. held that the City, by seeking to use its statutory power to decide with whom it would do business in order to “affect matters in another part of the world”, exceeded its statutory powers under the Vancouver Charter.  This court (Southin, Toy, and Cumming, JJ.A.) reversed that decision but the Supreme Court of Canada, by a 5-4 majority, restored it.  The majority reasons are those of Sopinka J., and the minority reasons are those of McLachlin J.

[27] The reasons of McLachlin J. include a comprehensive discussion of the subject of judicial review of the acts and decisions of municipal councils.  The term "narrow pro-interventionist approach" is taken from this passage at p.244 of those reasons:

The weight of current commentary tends to be critical of the narrow, pro-interventionist approach to the review of municipal powers, supporting instead a more generous, deferential approach:  S. M. Makuch, Canadian Municipal and Planning Law (1983), at pp. 5-6; McDonald, supra; Arrowsmith, supra, at p. 219. Such criticism is not unfounded. Rather than confining themselves to rectification of clear excesses of authority, courts under the guise of vague doctrinal terms such as “irrelevant considerations”, “improper purpose”, “reasonableness”, or “bad faith”, have not infrequently arrogated to themselves a wide and sweeping power to substitute their views for those of the elected representatives of municipalities. To the same effect, they have “read in” principles of statutory construction such as the one which states that a by-law cannot affect “common law rights” unless the statute confers authority to do so “in plain language or by necessary implication”; City of Prince George v. Payne, 1977 161 (SCC), [1978] 1 S.C.R. 458, at p. 463. The result is that, to quote McDonald (at p. 79), “despite the court’s protestations to the contrary, they do, in fact, interfere with the wisdom which municipal councils exercise”.



[28] The issue which divided the majority and minority was stated thus by McLachlin J. at p.252:

     My colleague adopts a narrow view of the welfare of the inhabitants of the City.  He asserts that the City’s Resolutions effect a purpose “without any identifiable benefit to its inhabitants” (p. 280) and speaks of “matters external to the interests of the citizens” (p. 279). He appears to define “municipal purposes” essentially in terms of provision of basic services to the inhabitants of the City.



[29] The majority treated the issue as being confined to the narrow question whether the City of Vancouver exceeded its statutory authority by passing a resolution which had the object of influencing events outside the borders of the City and which served no municipal purpose.  Sopinka J. said at p.274:

But the reasonableness of the Resolutions is not in issue here - the issue is whether the City had the authority to pass them.

[30] He summarized his decision at p.280:

I have concluded, as did the trial judge, that the purpose of the Resolutions is to affect matters beyond the boundaries of the City without any identifiable benefit to its inhabitants.  This is a purpose that is neither expressly nor impliedly authorized by the Vancouver Charter and is unrelated to the carrying into effect of the intent and purpose of the Vancouver Charter.



[31] The majority judgment is of course binding authority for what it decides, viz., powers conferred upon municipal councils by statute must, even in the absence of express words of limitation, be confined to effecting "municipal purposes", i.e., the provision of basic services to the inhabitants of the city.  In this case, in passing the impugned bylaws, Council was clearly exercising a power expressly conferred upon it.  The effect of its decision was to serve a basic municipal purpose, that of regulating the use of land.  I see nothing in the majority reasons in Shell which expresses or implies any disagreement with the broad conclusions of McLachlin J., quoted supra, insofar as they relate to municipal purposes as defined by the majority.  The majority reasons do not require that a "narrow pro-interventionist approach" be taken on judicial review of a council's exercise of its powers to enact bylaws for municipal purposes.  They are silent on that point.

[32] As a matter of interest I note a more recent decision of the Supreme Court which seems consistent with the espousal by McLachlin J. in Shell of a more deferential approach than has prevailed in the past.  In Consortium Developments (Clearwater) Ltd. v. Sarnia (City) et al, 1998 762 (SCC), [1998] 3 S.C.R. 3, the Supreme Court upheld a resolution of Council to establish a judicial inquiry under the Ontario Municipal Act.  The appellants in seeking to set aside the resolution, submitted that they should have been allowed to call evidence of surrounding circumstances, including the intent of the individual members of Council, to show that the true purpose of the resolution was to obtain evidence of criminal offences by individuals and thus exceeded provincial powers.  As to that, Binnie J. for the court, said in paras. 43-45:

Leaving aside the division of powers issue that prevailed in Starr the appellants cannot succeed simply by showing that some members of Council may have had in mind one aspect of the s. 100 jurisdiction while others had in mind a different aspect of the s. 100 jurisdiction. The Resolution was in writing. Members of Council voted for the written text. The Commissioner is bound by the written text. The question is whether the municipality, as opposed to the individual members of its Council, had jurisdiction to do what it did. See British Columbia (Milk Board) v. Grisnich, 1995 106 (SCC), [1995] 2 S.C.R. 895, at para. 5.


[44] This case provides a good illustration of why the rule in Thorne's Hardware, supra, is salutary. In that case the Court was invited to conclude that the federal Cabinet was motivated by crass and improper financial considerations to extend the boundaries of St. John Harbour to include new deep water liquid bulk terminal facilities which Irving Oil and its wholly owned subsidiaries had carefully located outside the previous harbour limits. The result was that harbour dues not previously payable at the new facility became payable. Dickson J. for the Court said, at p. 112:


Counsel for the appellants was critical of the failure of the Federal Court of Appeal to examine and weigh the evidence for the purpose of determining whether the Governor in Council had been motivated by improper motives in passing the impugned Order in Council. We were invited to undertake such an examination but I think that with all due respect, we must decline. It is neither our duty nor our right to investigate the motives which impelled the federal Cabinet to pass the Order in Council. ...


[45] The motives of a legislative body composed of numerous persons are "unknowable" except by what it enacts. Here the municipal Council possessed the s. 100 power and exercised it in the form of a resolution which speaks for itself. While some members of the present or previous Sarnia Council may have made statements which suggest a desire to unmask alleged misconduct, the inquiry will not be run by city councillors but by Commissioner Killeen, a Superior Court judge, who will take his direction from the s. 100 Resolution, not from press reports of comments of some of the city politicians. Accordingly the courts below were correct to quash the summonses and strike from the record certain other evidence. While courts should be slow to interfere with a party's effort to build its case, they should set aside summonses where, as here, the evidence sought to be elicited has no relevance to a live issue in the judicial review applications ...



[33] Whatever the weight to be given to the observations of the minority in Shell, the more important question in this case is: the weight to be given to the decision of this court in MacMillan Bloedel.  That decision is consistent with the view of McLachlin J. that the courts, in interpreting the scope of powers of municipal authorities, ought to take more generous and deferential approach than in the past and should confine themselves to rectifying clear excesses of authority rather than using the terms such as "improper purpose" and "bad faith" to substitute the court's view of what is right for the view of the elected representatives.

[34] The findings made at trial in MacMillan Bloedel closely parallel those which CMHC submits should be made in this case.  As Finch J.A. said at p.182:

[179] I return to the learned trial judge's conclusions in this case, measured against the powers conferred on the defendant by the Islands Trust Act and by the Municipal Act. He found the defendants' true motives to be to prevent, or at least to delay, residential subdivision, development and sale of the plaintiff's lands, and their long term intentions to be to obtain, in effect, park lands in several of the plaintiff's holdings by ensuring that no logging or only carefully controlled logging took place.


[180] In my respectful view, both of these goals are clearly within the objects expressed in s.3 of the Act "to preserve and protect the trust area and its unique amenities and environment ..."


[181] Accepting the learned trial judge's conclusions that the trustees' expressed motives did not conform with their real motives, that is to say that they acted for an ulterior purpose, does not lead me to conclude that the trustees exceeded their powers. Both the true and the expressed motives support the exercise of powers that are within the scope of the legislative grant. I think the learned trial judge erred because he did not have his mind directed to the effect of the Islands Trust Act, and to the powers conferred by ss.3, 4(4) and 27(1) when read together with the relevant provisions of the Municipal Act.



[35] The appellant submits that MacMillan Bloedel is distinguishable because the decision was based on the unique provisions of s.3 of the Islands Trust Act which read:

3.   The object of the trust is to preserve and protect the trust area and its unique amenities and environment for the benefit of the residents of the trust area and of the Province generally,...



[36] But clearly the decision also depended on the provisions of the Municipal Act.  In the passage just quoted, Finch J.A. linked the provisions of the two statutes as did Southin J.A. in this passage at p.173:

[130] ...I see nothing in any provision of the Islands Trust Act or the Municipal Act which prevents this downzoning which is intended to prevent development while the governing authority gathers up all the advice and information it thinks helpful relating to the lands in issue and thereupon coming to a solution which it perceives to be in the long-term best interests of the community. Land use issues are difficult. Once land is developed, undoing the development, if it is harmful to the public interest or what some people perceive to be the public interest, is next to impossible. I have said, "this downzoning" because it was implemented pursuant to both s.963 (1) of the Municipal Act and s.3 of the Islands Trust Act. If there were no s.3 of the Islands Trust Act, I might be of a different opinion but s.3 is not a mere piety. To put it another way, these by-laws, were enacted for the purposes or the objects of s.3 as well as for the health and welfare of the inhabitants of Galiano Island. They therefore had a lawful purpose.


. . .

[132] In my opinion, the learned judge did misapprehend the concept of bad faith essentially because he did not found his analysis on the broad express powers conferred by the Municipal Act and the broad legislative intent expressed in s.3 of the Islands Trust Act.



[37] The "broad express powers" referred to by Southin J.A. are those exercised by the District in this case.  Those powers are set out in s.903 of the Municipal Act, R.S.B.C. 1996, c.323 which reads:

903  (1)  A local government may, by bylaw, do one or more of the following:

* * *

         (c)  regulate within a zone

(i)the use of land ...

[38] It should be noted that until 1985, the Municipal Act included a statement of the objects for which a municipal government could regulate the use of land.  The relevant section was:

716(2) In making regulations under this section, the council shall have due regard to


(a)  the promotion of health, safety, convenience and welfare of the public;


(b)  prevention of the overcrowding of land and preservation of the amenities peculiar to any zone;


(c)  the securing of adequate light, air and access;


(d)  the value of the land and the nature of its present and prospective use and occupancy;


(e)  the character of each zone, the character of the buildings already erected and the peculiar suitability of the zone for particular uses; and


(f)  the conservation of property values.


[39] The removal of that limiting language, broad as it was, indicates a legislative intention to broaden rather than narrow the scope of the zoning powers under the Municipal Act.

[40] In MacMillan Bloedel, this court reversed the trial decision which had struck down, on grounds of bad faith, a bylaw restricting development of a very large area of land. The facts of MacMillan Bloedel are, in significant respects, strikingly similar to those in the case at bar.  MacMillan Bloedel had in 1951 acquired over one-half of the 15,000 acres which make up the total land area of the island.  Because of growing opposition by residents to its logging operations, the company decided to sell its land for residential use.  The "trust committee" which under the Municipal Act has the power and authority of a Regional District Board, enacted bylaws which removed any residential capacity from much of the land.  One change was to increase the minimum parcel size to 50 acres.

[41] MacMillan Bloedel's action to quash the bylaws succeeded at trial.  The trial judge held that the committee’s true purpose was to effect a change in logging practices and to acquire or preserve the land without expropriation.  He held the bylaws to be discriminatory, passed in bad faith and for an ulterior motive or purpose which was beyond the powers of the defendant.  The grounds upon which this court reversed that decision are summarized thus in the B.C.L.R. headnote:

     PER FINCH J.A. (WOOD J.A. concurring):  The history of the Islands Trust Act indicates a legislative intent to increase the powers of local trust committees.  It also shows an intent to give an increased effect to the object statement contained in s.3. The courts should be slow to find bad faith in the conduct of democratically elected representatives acting under legislative authority, unless there is no other rational conclusion. The trial judge found the defendant’s true motives to be to prevent or at least to delay residential subdivision, development and sale of the plaintiff’s lands, and its long-term intention to obtain, in effect, park lands in several of the plaintiff’s holdings by ensuring that no logging, or only carefully controlled logging, took place. Both of those goals were clearly within the s.3 object “to preserve and protect the trust area and its unique amenities and environment...” Accepting that the defendant’s expressed motives did not conform with its real motives, in that it acted for an ulterior purpose, that did not mean it exceeded its powers. An ulterior purpose that is within the ambit of the delegated power is not an improper purpose. The trial judge erred because he failed to direct his mind to the effect of the Islands Trust Act and to the powers conferred thereby when read together with the Municipal Act.

     PER SOUTHIN J.A.:  It is not an immutable principle that a by-law may not discriminate or be aimed at a particular landowner, or that a by-law may not have as its objectives what the trial judge found to be the defendant’s objectives, or that a body such as the defendant have a “valid planning purpose” for a by-law. The only immutable principle of law is that a body with a power to enact subordinate legislation must act within the powers conferred.  Here, the by-laws were enacted for the purposes and objects of s. 3 of the Islands Trust Act as well as for the health and welfare of the inhabitants of Galiano Island. They therefore had a lawful purpose and were within the powers conferred.

[42] As a matter of interest, I note that the judgment of this court was pronounced on August 10, 1995, a few weeks before the Mountain Forest and Cove Forest lands were downzoned.

[43] Because s.3 of the Islands Trust Act expressly provided that the object of the trust was to preserve and protect the trust area and its unique amenities and environment, it was given more weight in the reasoning of this court in MacMillan Bloedel than the less specific provisions of the Municipal Act.  But it does not follow that the powers conferred under the Municipal Act would not allow the District to pursue the object of preserving and protecting the amenities and environment of the area for the benefit of the residents of the District.  While s.3 provides a point of distinction between MacMillan Bloedel and this case, it does not make that case inapplicable as an authority.  The decision is not confined to issues arising under the Islands Trust Act.  That being so, I conclude that the chambers judge did not err in adopting the statement by Finch J.A. in para. 178 of MacMillan Bloedel that:

In my view courts should be slow to find bad faith in the conduct of democratically elected representatives acting under legislative authority, unless there is no other rational conclusion.



[44] That statement is hardly revolutionary.  CMHC concedes that it has long been settled law that, as Finch J.A. said at p.177:

     By-laws are presumed to have been enacted in good faith, unless the contrary has been proven by the person attacking the by-law ...



[45] I conclude that the first ground of appeal must fail.  The chambers judge did not apply an inappropriate standard of review to the bylaws.

[46] The second ground of appeal is expressed thus in the appellant's factum:

2.   The hearing judge erred by failing in several respects to evaluate the evidence with a view to determining Council's actual purpose behind the bylaw, by reversing the onus of proving an initial ultra vires purpose, and by requiring CMHC to prove its case to a heightened standard of proof.



[47] The contention that the onus was reversed and that CMHC was required to prove its case to a "heightened standard of proof" appears essentially to be a reiteration of the first ground of appeal.  The substance of the second ground appears to be that the chambers judge failed to direct herself to finding "Council's actual purpose behind the bylaw".  What she did find was that the purpose of Council in passing the bylaws was "... to restrict residential development in this area and prevent large scale development generally" and that:

There is ample evidence that Council was concerned about traffic and infrastructure, as well as the effect on the area generally of increased density, and thus decided to prevent further development in the area.



[48] It is important to note that CMHC takes no issue with that conclusion or with the further conclusion that restriction of residential development is "a valid planning purpose and a legitimate regulation of land use which is within the District's jurisdiction".  The submission, as I understand it, is that Council had to go further and establish that it had a valid purpose for changing the zoning to PRO.

[49] Some confusion arose from the manner in which this submission was developed.  The chambers judge took the argument to be that the District must establish that Council had formed a positive intention for the owner of the land to use it for one of the purposes authorized by PRO such as golf course or cemetery.  As to that, the chambers judge said:

In my view, Council has to plan for the ultimate uses in a general sense; that is it must consider the appropriate re-zoning designation.  Here, that designation is PRO.  I am not prepared to take the duty upon Council further and state that it must have in mind and plan for a specific use or uses within that designation.



[50] In this court, counsel for CMHC did not attempt to support the submission that Council could not downzone without identifying a specific use to which the owner would put the land within the new designation.  The submission now is that Council failed to "consider the appropriate rezoning designation".  That failure is said to be demonstrated by evidence from which it might be inferred that one or more councillors did not understand that the change to PRO zoning would leave CMHC, as the owner, free to decide what use should be made of the land and would not result in the land continuing as a wilderness park.  This contention rests primarily upon a number of statements made before and after the rezoning by individual members of the public and groups who urged that the land should be kept as a park.  At least two councillors expressed themselves in the same vein although one of those, who expressed himself to that effect in a letter to the editor in November, 1996, appears at that time to have been only a candidate for Council in the election of that year.  He was a member of Council at the time of the adoption of the second group of bylaws in 1997.

[51] There is no clear evidence that the mayor or any of the councillors expressly stated that the downzoning would not have the effect of preserving the land as park.  Nor is there clear evidence that any of them said that the effect would be to preserve CMHC's land as park.  The chambers judge expressed this view of the matter:

Those Council members, in particular the member who put forward the resolution for the bylaws, simply appear not to have understood the difference between what they could do and what they wanted to do, but apparently their planning staff did and drafted the bylaws setting out appropriate zoning and community plan designations.



[52] Having reviewed the evidence, I incline to the view that if there was any misunderstanding of that kind on the part of any Council members, it was dispelled before the passage of the first set of bylaws. There is no evidence that the majority, either in 1995 or 1997, were under such a delusion.

[53] There obviously was considerable potential for confusion because the rezoning proposals dealt with both the District lands and that owned by CMHC.  The effect of the rezoning, so far as it related to the District's land, was to rezone to "park".  With respect to CMHC's land, it was to rezone to permit the various uses set out in s.-s.(b) of the PRO designation.  Another factor which contributed to a degree of confusion in the discussion is that CMHC's land, having been owned directly by the federal Crown and never having been developed after its transfer to CMHC remained, in the eyes of some, public land for which taxpayers "had already paid".

[54] It is asserted in CMHC's factum that other zoning designations exist which would be more suitable than PRO for achieving the admittedly valid goal of precluding residential development.  But no designation was identified and, from reading of the bylaw, I doubt that there is any.  As a matter of interest, I note that at one time CMHC considered a golf course development on the property although it says it does not now regard that as a practical option.

[55] There is no doubt that by rezoning the property as it did, Council restricted the development potential of the land in a way that is not palatable to CMHC.  It does not follow that the rezoning was unlawful.

[56] The case most relied on by the appellant is Hauff v. City of Vancouver (1981), 12 M.P.L.R. 125 (B.C.S.C.), aff'd 1981 437 (BC CA), (1981), 28 B.C.L.R. 276 (C.A.).  That involved waterfront properties along Point Grey Road which the City had attempted over a period of many years to acquire for park purposes.  One aspect of that policy was upheld in City of Vancouver v. Simpson, [1997] 1 S.C.R. 71 which turned on an approving officer’s refusal to allow subdivision.  The issue in Hauff was the validity of a zoning bylaw which reduced the maximum development potential of certain lots by reducing the area which could be taken into account in calculating maximum building floor space.  That bylaw was found invalid on the ground that the aldermen who voted for it did so with the underlying intention of reducing the values of the properties to allow the City to more easily acquire them.  That intention had been publicly expressed by the City manager and at least a majority of Council.

[57] There is no such finding in this case and, in my view, no evidence on which such a finding could be made. There is no evidence of any policy on the part of the District to acquire the property.  What is present is the admittedly proper purpose of preventing a large area of land which has never been developed from being the subject of intense development.  In deciding to treat its adjoining lands in the same way, Council accepted that it would be foregoing potential revenue of the order of $146 million from the sale of its lands.

[58] Even if it could be found that the downzoning of CMHC's land had the effect of creating a "holding zone" to prevent CMHC from using the land while the District considered its future plans, I do not accept that that would render the downzoning unlawful.  The case cited for the proposition that Council cannot downzone for holding purposes is Karamanolis v. Port Coquitlam 1978 402 (BC CA), (1978), 8 B.C.L.R. 282 (C.A.).  That decision was based on the language of s.707A of the Act as it stood at that time which expressly conferred the power to "prohibit any particular use or uses in any specified zone ..." .  The word "particular" was held to preclude the municipality from zoning to prohibit any uses.  Neither that section nor any equivalent is to be found in the present statute.

[59]  I do not suggest that the rule for which Karamanolis has been so often cited no longer exists.  It may well be, despite the changes in the legislation, that a municipality would generally be found to exceed its powers by rezoning to effectively preclude the owner from using the land.  To treat an individual owner of a lot in that way might well be so unreasonable as to be beyond the powers of the municipality.  In this case, the District recognized that by excluding from the rezoning bylaws a number of individually owned lots which had been acquired for residential purpose.  CMHC complains that that is unlawful discrimination against it.  I agree it is discrimination but not that it is unlawful.  The circumstances of CMHC are so clearly different from those of the individual owners that it would be unreasonable to not treat them differently.

[60]   There are obvious policy reasons which justify the District's decision to remove the land from the threat of immediate residential development.  Whether the decision was a wise one is not for the court.  But it is undoubtedly legitimate for a municipality to consider preserving large areas as parks or other uses which constitute open space.  The effect of the rezoning was essentially to preserve for some period into the future the status quo which has existed with this land since CMHC acquired it and indeed before that.  It may well be that many residents of the municipality, perhaps including the councillors who voted for rezoning, had in mind that if the land remains as it is for a time some arrangement may be worked out with the federal Crown to permit part or all of the land to be retained as park.  As Southin J.A. said in MacMillan Bloedel at p.175:

In my opinion, a by-law which, upon its true construction, does not effect a purpose which would be illegal cannot be struck down because of the hopes or desires of the members of the council who enact it.



[61] Because of the scope of the interest involved here and the other unique aspects of the facts, the decision most nearly in point is that in MacMillan Bloedel.  I refer again to the passage in the reasons of Finch J.A. (quoted, supra, para. 35) holding that the Trustees acted lawfully in rezoning:

... to prevent, or at least to delay, residential subdivision, development and sale of the plaintiff's lands, and their long term intentions to be to obtain, in effect, park lands in several of the plaintiff's holdings by ensuring that no logging or only carefully controlled logging took place.



[62] Here, the District rezoned to achieve similar goals.  In all the circumstances, it is my view that they acted within their statutory authority in so doing.  I would not give effect to the second ground of appeal.

[63] Little need be said about the remaining three grounds.  The third alleged error is the finding that the District did not unlawfully discriminate against CMHC by excluding from the bylaws a number of lots owned by individuals.  The chambers judge accepted that the distinction between those lots and CMHC's land was made on the basis of the size of the parcels.  CMHC contends that any justification for discrimination had to be proved by evidence from councillors that that was what they had in mind.  There is no basis in law for imposing such an onus.  As I have already indicated, it is a reasonable inference from the whole of the circumstances that there was a reasonable basis for discriminating.  I would not give effect to this ground of appeal.

[64] The fourth alleged error is with respect to the mandatory requirement of s.882 of the Municipal Act, R.S.B.C. 1996, c.323 which reads:

882(3) After first reading of a bylaw adopting a community plan, the council must, in sequence, do the following:


(a)  examine the plan in conjunction with

(i)  its most recent capital expenditure program under section 329 ...


to ensure consistency between them.



[65] To that issue the judge applied the presumption of regularity.  In the circumstances, I conclude that that was appropriate.

[66] The fifth alleged error is in finding that council complied with its statutory obligation to give adequate notice.  I find no error in the judge's conclusion on this point.

[67] I would therefore dismiss the appeal.










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