The legal nonconforming rights trilogy in Ontario

The concept of legal nonconforming rights (also known as "acquired rights" or "grandfathering") has undergone a great deal of evolution and clarification in recent years. The municipal group at Gowling WLG is proud to have participated in a number of the cases that have solidified property owners' rights.

Legal nonconforming rights are one of the most powerful protections afforded to landowners under land use planning law. The concept provides that, simply put, zoning by-laws cannot apply retroactively. If a use of land, a building, or a structure was legal on Monday, a zoning by-law passed that day cannot render it illegal by Tuesday.

The concept is codified in s. 34(9) of the Planning Act, which explicitly provides that a zoning by-law cannot prohibit the use of land, a building, or a structure that was lawfully commenced on the date the by-law was passed. Under the common law, the protections for legally nonconforming rights are even stronger. A series of decisions dating back to the 1950s, including from the Supreme Court, have established that owners also have a right to evolve or reasonably expand or intensify a legally nonconforming use, provided that the evolution, expansion or intensification does not cause undue adverse impacts on the surrounding neighbourhood or area.

For clarification, "legally" and "lawfully" has nothing to do with building permits. It is simply a measurement of whether the use was allowed by zoning bylaws. Indeed, if a structure predates zoning bylaws on the property, then it is permitted to continue.

Despite their importance to landowners, the full scope of legal nonconforming rights are often not well understood, either by the property owners that benefit from them, their lawyers, land-use planners, or the municipal decision-makers that must respect them. Legal nonconforming rights are also a frequent source of tension between landowners and municipalities. Too often, municipal decision-makers intentionally seek to curtail property owners' legally nonconforming rights, viewing those rights as mere impediments to municipal policy, rather than important and established legal protections. It is a truism that "planners like to plan".

However a trilogy of cases successfully argued by Gowling WLG Ottawa's Municipal Group have clarified the state of the law in Ontario regarding legal nonconforming rights in Ontario. This series of cases commenced in 2009 with the Ontario Municipal Board's ("OMB") decision in Re TDL Group Corp.,^[1] which was subsequently upheld by the Ontario Divisional Court.^[2] In 2018, the OMB relied on TDL in Brougham v. South Frontenac,^[3] which further expanded the protections for legally nonconforming uses. Finally, in 2020, the Local Planning Appeal Tribunal ("LPAT", the successor to the OMB) completed the Trilogy with its decision in Fraser v. Rideau Lakes.^[4]

Together, these cases have clarified and expanded clarified and expanded the protections and flexibility for property owners with legally non-conforming rights, including by rendering zoning bylaws and Official Plans ultra vires when they purported to limit or eliminate those rights.

The Supreme Court's formulation of nonconforming rights – Central Jewish Institute and Saint Romuald

Two Supreme Court of Canada decisions, separated by more than 50 years, form the basis of our Trilogy of cases. In the first, Central Jewish Institute,^[5] the Supreme Court established that because the protection of legally nonconforming rights attaches to a building, a nonconforming use of only part of a building can later be expanded to the entire building, as of right. For example, a legally nonconforming restaurant that occupies only the first floor of a building can expand to the second floor, even after the enactment of a zoning by-law purporting to prohibit the use in that location.

In the second decision, Saint-Romuald,^[6] the Supreme Court confirmed that under the common law, property owners have a right not only to continue a legally nonconforming use, but also to reasonable flexibility in that use, including evolution, intensification, or expansion. Writing for the majority, Justice Binnie outlined seven principles to delineate limitations on the owner's acquired rights:

1. The nature of the legally nonconforming use is defined as the activities actually carried out at the site prior to the new by-law restrictions.
2. Where the current use is a mere intensification of the pre-existing activity, as opposed to a difference in kind, it will rarely be open to objection.
3. New activities that expand beyond the pre-existing uses may not be protected under the non-conforming use.
4. When activities that are ancillary or closely related to the pre-existing use are added, the Court must balance the landowner's interest against the community interest, taking into account: a) the degree to which the pre-existing use clashes with surrounding uses; b) the degree of remoteness of the new activity to the pre-existing use; and c) the aggravated neighbourhood effects of the new activity.
5. Neighbourhood effects must be established by evidence.
6. The characterization of the acquired right must be appropriately tailored to as to allow for reasonable evolution of prior activities.
7. The definition of the acquired right will always have a subjective element, but should be grounded in the objective analysis outlined above.^[7]

In short, this decision established that legally nonconforming rights can expand, evolve, or intensify, provided that the change does not result in undue adverse impacts to the surrounding neighbourhood. Yet, despite this clear direction, actually compelling municipalities to recognize this right to flexibility and evolution is often not so simple.

Each of the Trilogy cases has applied Saint-Romuald in the context of Ontario land use planning law. In so doing, these cases have clarified and expanded the protections afforded to nonconforming uses under the common law, and have invalidated planning instruments that sought to curtail property owners' rights to reasonable flexibility and evolution of their nonconforming uses.

Case #1: Re TDL Group

In 2008, the City of Ottawa enacted a new City-wide Comprehensive Zoning By-law (the "CZBL"). In an effort to phase out legally nonconforming uses across the City, s. 3 of the CZBL purported to extinguish nonconforming rights where a legally nonconforming or noncomplying ^[8] building was damaged, demolished or removed voluntarily, or where an involuntarily damaged building was not repaired or re-occupied within 2 years. The appellant challenged this provision on the basis that it was contrary to s. 34(9) of the Planning Act and ultra vires.

The OMB agreed with the appellant, ruling that s. 34(9) of the Planning Act clearly prohibits a municipality from passing a by-law to prevent a legally nonconforming use. The Board held that:

The cases cited by the Appellant, especially the decisions of the Supreme Court of Canada, Toronto (City) v. Central Jewish Institute and Saint-Romuald (Ville) c. Olivier affirm the right of a landowner to continue with a legal non-conforming use. In fact, the Supreme Court of Canada decisions stand for the proposition that such a use may be expanded within the confines of the building, may be "intensified" as part of the pre-existing activity, and finally, of particular relevance to the case at hand, may see "renewal and change" (Saint-Romuald (Ville) c. Olivier)^[9]

The Board emphasized that, when determining whether non-conforming and non-complying rights survive, the intention of the landowner is paramount. As a result, voluntary repair or replacement of elements of the non-conforming or non-complying building does not automatically extinguish non-conforming rights:

With the respect to "continuity of use", the Board finds that the intention of the landowner is significant. The Appellant would not lose its right to its legal non-conforming use during a closure for a voluntary repair or even replacement of the building...

…there is nothing in section 34(9)(a) of the Act that provides that a right to a legal non-conforming use is lost if renovations or repairs are voluntary or within the control of the owner.^[10]

In short, the Board found that property owners have an absolute right to voluntarily demolish all or part of a legally nonconforming building or structure within the same building envelope, without losing that any acquired nonconforming rights, provided that they demonstrate an intention to continue the use. The OMB ruled that the offending provisions of the CZBL were ultra vires and unenforceable, and the Board's ruling was subsequently upheld by the Ontario Divisional Court, which found no error in the Board's reasoning and denied leave to appeal.^[11]

The City of Ottawa seeking leave to appeal to the Divisional Court was an important element in this story. Since the OMB and LPAT are administrative tribunals, their decisions are merely persuasive in subsequent cases. The Divisional Court's confirmation of the decision in TDL took a persuasive decision and made it law across Ontario, a fact which became important in the new two cases of the Trilogy.

Case #2: Brougham v. South Frontenac (Township)

Brougham, the second case in the Trilogy, involved similar issues to those before the OMB in TDL. In 2016, the Township of South Frontenac amended its Comprehensive Zoning By-law in an effort to phase out all structures located within the bylaw-required 30-metre shoreline setbacks. This setback was repeated in the Township's Official Plan. Interestingly, the 30 metre setback was, as it is across Ontario, based on an extremely dated study, which itself said that it needed to be updated every 5 years, and with respect to specific lakes' environmental sensitivity.

The Township's amendments provided that reconstruction of a building located within the 30 metre setback was prohibited where: more than 50% of the exterior load-bearing walls were voluntarily removed; or the structure was involuntarily destroyed, either partially or completely, and the property owner did not apply for a building permit to reconstruct within 1 year. Furthermore, the Township's amendments prohibited any expansion of the footprint of a legally nonconforming/noncomplying building.

Although the Township was aware of the TDL decision, it claimed that the protections in s. 34(9) of the Planning Act only applied to nonconforming uses (land, buildings or structures whose use was no longer permitted) as opposed noncomplying buildings (buildings or structures that no longer conformed to performance standards). The Township's position was that buildings located within the 30 metre setback were noncomplying, and therefore did not benefit from the protection of s.34(9) of the Planning Act.

On appeal, the OMB sided with the appellants and quashed the Township amendments in their entirety as ultra vires. To begin with, the Board agreed with the appellants that the term "noncomplying" is simply a term of art with no basis in the Planning Act and that there is no basis for distinguishing between "nonconforming" and "noncomplying" uses under the Act. Any legally established land, building or structure that no longer conforms with a zoning by-law is protected under s. 34(9) and the common law, regardless of whether the nonconformance is in terms of use or performance standards.^[12] In short, the ostensibly "noncomplying"" structures located within the Township's 30 metre shoreline setback were equally protected under the Planning Act and the common law.

Having made this finding, the Board concluded that it was bound by the Divisional Court's ruling in TDL that concluding owners of legally nonconforming/noncomplying buildings and structures have an absolute right to demolish and reconstruct within the same building envelope, and that this right cannot be taken away, including through arbitrary time limits on that reconstruction. As such, the Township amendments were ultra vires insofar as they sought to curtail property owners' rights to demolish and reconstruct their buildings and structures within the 30-metre waterfront setback.^[13]

Critically, the Board also agreed with the appellants that the case law surrounding nonconforming rights also supported a right to reasonable expansion or enlargement of a legally nonconforming/noncomplying building. Such expansion may not occur as of right, and landowners must seek permission to expand a legally nonconforming/noncomplying building or structure (under s. 45(2)(a)(i) of the Planning Act, as distinct from a "minor variance" application under s.45(1)). However, the Board confirmed that municipalities may not enact planning instruments prohibiting such expansions, and that they must consider requests to expand or enlarge legally nonconforming/noncomplying uses under the framework set out by the Supreme Court in Saint-Romuald. ^[14]

Case #3: Fraser v. Rideau Lakes (Township)

Fraser, the final case in the Trilogy, represents precisely the type of request for enlargement of a legally nonconforming/ noncomplying building contemplated by the Board in South Frontenac. The applicant owned a legally nonconforming cottage located within the 30 metre waterfront setback mandated by the Township's zoning by-law. He proposed to demolish the existing cottage, and to replace it with a somewhat larger dwelling on essentially the same footprint, within much of the new square footage to be added on a second floor.

The language of the Planning Act makes it clear that property owners may apply to a Committee of Adjustment for permission to expand a legally nonconforming use under s. 45(2)(a)(i) of the Planning Act. Notwithstanding this clear language, the Township planning staff initially insisted that the applicant instead apply for a minor variance under s. 45(1). Even after conceding its initial error during the course of the LPAT hearing, the Township took the position that an application for permission to expand under s. 45(2)(a)(i) must still satisfy an analysis similar to the "four tests" required for a minor variance under s. 45(1).

In particular, the Township insisted that an application under s. 45(2)(a)(ii) must demonstrate conformity with the OP. In this case, the Township's OP stated that no development within 30 meters of the shoreline would be permitted unless compliance with the setback was not a reasonable possibility due to the nature of the individual property. Accordingly, and based on Township staff's recommendation, the Committee of Adjustment refused the application for permission under s. 45(2)(a)(ii), in large part due to lack of conformity with the OP.

On appeal, the LPAT first confirmed that contrary to the Township's initial position, an application under s. 45(2) is not subject to the "four tests." Rather, such applications must be evaluated on the basis of:

1. whether the application is desirable for appropriate development of the subject property; and
2. whether the application will result in undue adverse impacts on the surrounding properties and neighbourhood.^[15]

Crucially, the Tribunal agreed with the applicant that there is no basis for considering the intent and purpose of the Official Plan when considering applying this test.^[16] The Tribunal also agreed that in light of Saint Romuald and the previous cases in the Trilogy, this analysis was subject to a number of caveats and nuances.

To begin with, the Tribunal rejected the Township's contention that undue adverse impact should be considered for the entire structure, as opposed to only the proposed expansion. Instead, the Tribunal sided with the applicant in finding that since TDL and South Frontenac confirmed that there is an absolute right to demolish and rebuild a legally nonconforming/noncomplying structure within the same building envelope, then the s. 45(2) test only applies to the proposed expansion. Anything within the existing nonconforming/noncomplying envelope may be reconstructed as of right, and undue adverse impact must be determined only with respect to the proposed expansions to the existing nonconforming structure.^[17]

Furthermore, the Tribunal found that any purported undue adverse impacts of an expansion must be demonstrated by objective evidence, and such evidence must be capable of overriding a property owner's right to reasonable evolution of their nonconforming/noncomplying building, as recognized in Saint Romuald. Moreover, planning instruments cannot impose criteria for expansion so rigorous that they in effect prohibit any expansion or evolution of nonconforming/noncomplying rights:

to the extent that a planning instrument, including an Official Plan, seeks to impose criteria for expansion of nonconforming uses that are so stringent as to not allow for the type of balancing required by Saint-Romuald, those instruments are ultra vires and should be given no force and effect.^[18]

In this case, the Township's OP did not permit this reasonable evolution, instead seeking to bar any expansion of legally nonconforming structures located within the 30 metre shoreline setback, unless development in an alternative location was impossible. The Tribunal agreed with the applicant that in light of TDL and South Frontenac, such policies were ultra vires. In any event, the applicant was not required to demonstrate conformity with the intent and purpose of the OP when applying for permission under s.45(2).

Finally, in a comment with implications beyond simply applications to reconstruct or expand legally nonconforming/noncomplying buildings, the Tribunal emphasized that: "there is no basis in law to justify refusing the Application simply because the possibility of a hypothetical alternative for development may exist."^[19]

Conclusion

Taken together, TDL, South Frontenac and Fraser have applied the principles set out in Saint Romuald and other decisions to Ontario land use planning law, bringing much-needed clarity to an often murky area of law. These cases have established a number of concrete principles that constitute essential protections for property owners:

• There is no basis for distinguishing at law between nonconforming land, buildings or structures (where the use is no longer permitted) and noncomplying land, buildings or structures (where the performance standards are no longer met). Both are equally protected under s. 34(9) of the Planning Act and the common law;
• Property owners have an absolute right to demolish and rebuild legally nonconforming/noncomplying structures within the same building envelope. Any planning instrument that seeks to prohibit such a right is ultra vires;
• The right to rebuild a demolished or destroyed legally nonconforming/ noncomplying structure is not subject to a strict time limit, so long as the owner evidences an intention to continue the use. Any planning instrument that imposes a strict time limit (particularly a short one) is ultra vires;
• Property owners have a right to reasonable flexibility, evolution, and expansion of legally nonconforming/ noncomplying uses, land, building and structures, provided the evolution or expansion does not cause undue adverse impacts on the surrounding neighbourhood. The framework set out in Saint Romuald governs such evolution or expansion;
• Applications to reconstruct and expand a legally nonconforming/ noncomplying building should be evaluated under s.45(2) of the Planning Act as opposed to s.45(1);
• The test for an application for permission to expand under s.45(2) is: a) whether the application is desirable for appropriate development of the subject property; and b) whether the application will result in undue adverse impacts on the surrounding properties and neighbourhood;
• When applying the test under s.45(2), only the proposed expansion may be evaluated for undue adverse impacts;
• The intent and purpose of the official plan is not a relevant consideration when applying the test under s.45(2); and,
• In order to refuse the application the undue adverse impacts of the proposed expansion must be demonstrated by objective evidence, and must be sufficient to override the property owner's right to reasonable flexibility, evolution and expansion.

All of these principles significantly affect landowners' rights, and understanding of them vary from municipality to municipality. Typically, they are better understood in larger urban centers, and less so in more rural or cottage-oriented community. However, they are too often a source of consternation and misunderstanding for planners in both kinds of municipalities.

Jacob Polowin is an associate in Gowling WLG's Municipal Law Group and Michael Polowin is a partner and National Group Leader in Gowling WLG's Municipal Law Group. Michael was counsel on all three of the Trilogy cases; Jacob was counsel on Brougham and Fraser.