Nova Scotia Court of Appeal
Citation: Northern Construction Enterprises Inc. v. Halifax (Regional Municipality), 2015 NSCA 75
Date: 20150728
Docket: CA 428571
Registry: Halifax
Between:
Northern Construction Enterprises Inc.
Appellant
v.
The Halifax Regional Municipality,
Dwight Ira Isenor and Staceylee Rudderham
Respondents
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Judge: |
Beveridge, J.A.
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Motion Heard: |
July 16, 2015, in Halifax, Nova Scotia
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Written Release: |
July 28, 2015
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Held: |
Motion dismissed with costs
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Counsel: |
Peter M. Rogers, Q.C., for the appellant E. Roxanne MacLaurin for the respondent Halifax Regional Municipality Edward A. Gores, Q.C. for the Attorney General of Nova Scotia (watching brief only) |
Reasons for judgment:
INTRODUCTION
[1] Halifax Regional Municipality (HRM) enacted a by-law that prohibited “Extractive facilities” in Districts 14 and 17. Included in these districts is the Aerotech Business Zone (AE-4).
[2] Northern Construction Enterprises (Northern) wants to operate an aggregate quarry near the Halifax Stanfield International Airport in the Aerotech Business Zone. It needs provincial approval to do so. It applied to the Department of Environment for that approval. It was denied as Northern could not provide proof of municipal authorization to conduct the proposed activity on that site.
[3] HRM refused to issue a development permit to Northern on the basis that the proposed aggregate quarry operations included “Extractive facilities”.
[4] Northern litigated. First, it appealed the development officer’s refusal to issue the permit to the Utility and Review Board. Secondly, it brought proceedings in the Nova Scotia Supreme Court for a declaration that the by-law was ultra vires and of no force and effect.
[5] The Utility and Review Board dismissed the appeal from the refusal of the development permit (2013 NSUARB 28). The Nova Scotia Supreme Court dismissed Northern’s application for a declaration that the by-law was invalid (2014 NSSC 166).
[6] Northern appealed both decisions to this Court. The appeals were heard together. In separate reasons, the appeal from the Utility and Review Board was dismissed (2015 NSCA 43); but the appeal from the Nova Scotia Supreme Court was allowed (2015 NSCA 44). As a consequence, this Court declared HRM’s by-law for Districts 14 and 17 prohibiting “Extractive facilities” on quarry sites to be invalid.
[7] HRM applied on June 24, 2015 to the Supreme Court of Canada for leave to appeal the judgment of this Court that declared the by-law, as drafted, to be invalid (File No 36504). HRM moved that I, as a single judge of this Court, stay the effect of our judgment pending its application for leave to appeal.
[8] I heard HRM’s motion on July 16, 2015. At the conclusion of the hearing, the motion was dismissed with reasons to follow.
[9] Before delving into the evidence and arguments advanced by the parties on this motion, it is useful to briefly set out the legal framework engaged by this motion.
LEGAL FRAMEWORK
[10] The Supreme Court Act authorizes the Supreme Court of Canada, a provincial appeal court, or a judge of either court to order that proceedings be stayed. This jurisdiction is located in s. 65.1 of the Supreme Court Act, R.S.C. 1985, c. S-26, as amended. It reads:
65.1 (1) The Court, the court appealed from or a judge of either of those courts may, on the request of the party who has served and filed a notice of application for leave to appeal, order that proceedings be stayed with respect to the judgment from which leave to appeal is being sought, on the terms deemed appropriate.
[11] The potential relief is not limited to a stay of execution in the traditional sense, but extends to making an order that preserves matters between the parties to ameliorate prejudice pending final resolution of the dispute. Rule 62 of the Supreme Court Rules provides:
62. Any party against whom a judgment has been given, or an order made, by the Court or any other court, may make a motion to the Court for a stay of execution or other relief against such judgment or order, and the Court may give such relief on the terms that may be appropriate.
[12] The scope of this power is not in dispute (T.G. v. Nova Scotia (Minister of Community Services), 2012 NSCA 71; Morrison Estate v. Nova Scotia (Attorney General), 2009 NSCA 116; RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311; Baier v. Alberta, 2006 SCC 38). As expressed by Sopinka and Cory JJ. in RJR-MacDonald Inc. :
30 ... We are of the view that the Court is empowered, pursuant to both s. 65.1 and r. 27 [now r.62], not only to grant a stay of execution and of proceedings in the traditional sense, but also to make any order that preserves matters between the parties in a state that will prevent prejudice as far as possible pending resolution by the Court of the controversy, so as to enable the Court to render a meaningful and effective judgment. The Court must be able to intervene not only against the direct dictates of the judgment but also against its effects. This means that the Court must have jurisdiction to enjoin conduct on the part of a party in reliance on the judgment which, if carried out, would tend to negate or diminish the effect of the judgment of this Court. In this case, the new regulations constitute conduct under a law that has been declared constitutional by the lower courts.
[13] The remedy to grant a stay is a discretionary one, governed by the same principles as applications for interlocutory injunctions (Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110; RJR-MacDonald Inc. v. Canada (Attorney General), supra). The court’s primary focus is on the three part test: is there a serious question to be resolved (as opposed to a frivolous or vexatious one); would the applicant suffer irreparable harm if a stay was not granted; and which of the two parties would suffer the greater harm from the grant or refusal of the relief being requested (the balance of convenience).
[14] With this basic framework in mind, I turn to the details of the motion.
BACKGROUND AND DETAILS OF THE MOTION
[15] There is no need to recount the intricacies of the legislative schemes, arguments, and reasons that ultimately led to HRM’s application for leave to appeal. Bare bones are sufficient.
[16] The Province has sole control over the location of pits and quarries. HRM has never disputed this legal reality. What is left to HRM is, by its Charter (a provincial statute - Halifax Regional Municipality Charter, S.N.S. 2008, c. 39), the authority to pass land-use by-laws that regulate “the location of developments adjacent to pits and quarries”.
[17] Relying on this legislative authority, HRM passed s. 2.29 of the Land Use By-law for Planning Districts 14 and 17. The by-law prohibits “Extractive facilities” in those districts. Extractive facilities are defined as meaning all buildings, aggregate plants, material storage areas and weigh scales associated with extractive uses, but not those structures or storage areas that are fundamental to the activities of mining or extraction.
[18] The effect of this by-law is to prevent an aggregate quarry from producing aggregate. It can remove the overburden and blast rock, but cannot clean, crush or store the aggregate.
[19] The judgment of this Court is that in light of the overall legislative scheme, the province granted express authority over developments adjacent to quarries, and retained its authority over quarries. Hence, the by-law that purported to prohibit activities at a quarry site was beyond its legislative authority.
[20] HRM and Northern filed affidavit materials to support their respective positions on the requested stay. There was no cross-examination.
[21] The only substantive affidavit filed by HRM was from Ms. Kelly Denty, manager for Development Approvals, Planning and Development. She deposed that it was through planning and development regulations that HRM protects the public interest by recognizing the needs and concerns of the citizens, and by helping to reduce land-use conflicts.
[22] With respect to feared harm should the stay not be granted, Ms. Denty described the vision that HRM has had (since 1985) for the AE-4 zone and the impact that extractive facilities may have. This is what she said:
11. That the AE-4 zone lies within the Airport Industrial Designation. This designation contemplates the development of industries at the leading edge of modern technology, as well as for uses which will substantially benefit from the airport location. Attached hereto as Exhibit B are the provisions in the MPS which relate to the Airport Industrial Designation.
12. That extractive facilities are not compatible with Council’s vision for the Airport Industrial Designation. The establishment of extractive facilities in the AE-4 zone could create conflicts with existing developments, and could affect future development within the zone. The establishment of extractive facilities within the zone has the potential to negate the development scheme which was envisioned and implemented for the plan area after extensive public consultation.
13. That if extractive facilities for the processing aggregate are permitted within the AE-4 zone, contrary to the Municipality’s zoning and permitting requirements, the land use conflict that the Municipality is trying to prevent would already be established prior to any review of the Court of Appeal’s decision by the Supreme Court of Canada. In such case, any intrusive effect that extractive facilities would have on adjacent properties and the vision of Council for the future development of the plan area and would be irreparable.
14. That a stay is required in order to provide interim protections within this plan area, and other plan areas within the Municipality that regulate the location of extractive facilities.
[23] Robert MacPherson, P. Eng. is the president of Scotian Materials Limited, successor company to Northern. He deposed that capital expenditures of several millions of dollars have been made since 2011 by the respondent in its efforts to acquire and begin operating the quarry. Concern was expressed that a potential delay of up to three years would cause severe financial distress such that the company may not have the ability to financially sustain itself for such a lengthy period without income from the aggregate quarry site. Estimated annual revenue from the proposed site is $2.4 million.
[24] With respect to the status of its application to the Department of Environment for approval, Mr. MacPherson advised that the respondent had updated its application. It is presently under review, and has not yet been granted by the Department of Environment.
[25] Mr. MacPherson reiterated some of the information already well documented in the record. In particular, that the nearest resident to the proposed aggregate quarry was 1.5 km distant. The closest development to the proposed aggregate quarry is a sister company, Maritime Fencing which supports the respondent’s application for an aggregate quarry. The next closest development is a site occupied by Clean-Earth Technologies.
[26] With respect to the types of development that actually exist in the AE-4 zone he deposed:
14. I am familiar with the Clean-Earth Technologies site, which is much closer to the airport than our proposed quarry site, and the site features large piles of remediated and unremediated contaminated soil. Soil arrives and leaves their site by truck and, from my observations on numerous occasions, the site is not used for any aero-space purpose or other purpose associated with the airport proximity.
15. Our proposed quarry is located in the AE-4 zone within that Designation. Existing developments in the AE-4 zone include a hotel, a race track, a car storage lot for auto auctions, a clay pit, a fence contractor and a former aggregate quarry none of which I understand to be used for any aero-space or airport purpose except to the extent that the hotel is intended to obtain clientele from air traffic
[27] Mr. MacPherson’s affidavit described what would happen if the stay was not granted, but HRM was ultimately successful on its appeal:
23. If a stay is not granted, and if Scotian obtains an Industrial Approval from the Department of Environment, Scotian will transport to the site and assemble a rock crushing spread, which could be disassembled and taken elsewhere if it were ultimately held the Supreme Court of Canada that the bylaw is valid.
24. In the event that the Supreme Court of Canada were to overturn the Court’s decision and the legal effect of the impugned section of the bylaw were accordingly restored, Scotian would cease to operate rock crushers or other so-called “extractive facilities” and the site will be left as a quarry with no extractive facilities, as I am advised by Mr. Rogers and do believe is currently not prohibited by the Halifax Regional Municipality bylaw for Districts 14 and 17.
APPLICATION OF THE TEST
[28] With these details in mind, I will turn to the three-part test.
Serious/arguable issue to be resolved
[29] HRM has no appeal as of right to the Supreme Court. Accordingly, the traditional test for a stay of proceedings changes. HRM must show not only that its appeal raises arguable issues, but also that their leave application demonstrates a serious or arguable issue for leave being granted by the Supreme Court of Canada (Turf Masters Landscaping Ltd. v. T.A.G. Developments Ltd. (1995), 144 N.S.R. (2d) 326 (C.A. in chambers); Minister of Community Services v. B.F., 2003 NSCA 125; T.G. v. Nova Scotia (Minister of Community Services), supra.; Higgins v. Nova Scotia (Attorney General), 2013 NSCA 118).
[30] There is considerable force to the respondent’s argument that HRM has not shown that its proposed appeal is arguably one of national or public importance. HRM filed a copy of its Notice of Application for Leave to Appeal, including its Memorandum of Argument.
[31] The legal issue identified by HRM in its Application for Leave is that this Court failed to follow the interpretative principles for legislation that empowers municipalities articulated by the Supreme Court of Canada in United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), [2004] 1 S.C.R. 485, and as applied by this Court in Halifax (Regional Municipality) v. Ed DeWolfe Trucking Ltd., 2007 NSCA 89.
[32] The Memorandum of Argument identifies the “following issues of national importance”:
What is the proper application of the law relating to the interpretation of municipal legislation for the purpose of ascertaining municipal powers? Did the Court of Appeal err in concluding that the Province of Nova Scotia had not conferred legislative authority upon the municipality to regulate by Land-Use By-Law the location of rock crushing equipment and other essential aggregate production activities? In doing so, did the Court of Appeal err….[particulars omitted]
[33] No other legislative scheme in Canada is mentioned, nor conflicting authorities from provincial courts of appeal. There is no suggestion of a need to clarify or resolve conflicting authorities, or that a decision by the Supreme Court would have any impact beyond the narrow Nova Scotia landscape. HRM simply asserts that the Court erred in how it applied the interpretative guidelines identified by the Supreme Court of Canada to the Halifax Regional Municipality Charter.
[34] The Municipal Government Act, S.N.S. 1998, c. 18 contains similar provisions to HRM’s Charter, but the record is silent about other municipalities in Nova Scotia enacting by-laws along the lines of By-Law 2.29 prohibiting extractive facilities.
[35] But there is certainly some suggestion that, at least in constitutional cases, the “threshold is a low one” (RJR-MacDonald Inc. at para. 54). I am not sure the present proceedings fall into such a category, but I am unable to say that the Application for Leave is frivolous or vexatious. I will turn to the remaining two parts of the test.
Irreparable harm
[36] I am not satisfied from the materials and submissions that HRM would suffer irreparable harm if a stay were not granted. Recall what Manager Denty deposed: the establishment of extractive facilities in the AE-4 zone “could create conflicts with existing developments”; and “could affect future developments”; they have “the potential to negate the development scheme”. She added that if extractive facilities [the aggregate crushers etc.] are permitted then the land-use conflict would be established before the Supreme Court of Canada could rule; in such a case “any intrusive effect that extractive facilities would have on adjacent properties and the vision of council for the future development of the plan area and would be irreparable.”
[37] Speculation about what things ‘could’ occur, ‘potential’ negative impacts and conclusionary statements of irreparable impact hardly suffice. Furthermore, the record is not supportive.
[38] The closest residential property is approximately 1.5 km distant. It is unknown if that particular resident sought to participate in the proceedings before the Utility and Review Board. A number of local residents did, along with a ratepayers association. The Board ruled that the proposed intervenors had not established on a balance of probabilities that they would be adversely affected by the decision under appeal, nor genuinely suffer, or be seriously threatened with any form of harm prejudicial to their interests (2012 NSUARB 149 at paras. 83, 94-97, 107)
[39] The closest existing development is Maritime Fencing which supports the aggregate quarry. In the other direction is Clean-Earth Technologies, operating an industrial contaminated soil facility for remediating hydrocarbon-contaminated soils. The record does not permit a reasonable inference to be drawn that they or future developments would be negatively impacted by the operation of the respondent’s aggregate quarry pending the outcome of the leave application, if the Department of Environment issues a permit for them to do so.
[40] Under this part of the test the issue is whether a refusal to grant the requested relief could so adversely affect the applicant’s interests that the harm could be not remedied if the eventual decision on the application for leave, and appeal to the Supreme Court does not accord with the motion for the stay (RJR-MacDonald Inc. at para. 58). In this regard, it is the nature or type of harm that is key. Sopinka and Cory JJ. put it thus:
[59] "Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, [1985] 3 W.W.R. 577 (B.C.C.A.)). The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration (Hubbard v. Pitt, [1976] Q.B. 142 (C.A.)).
[41] The harm that HRM claims is its inability to rely on By-Law 2.29 to prevent the respondent or other potential applicants from operating an aggregate quarry in the interim. The By-Law, if it is valid, only pertains to Districts 14 and 17. There is no evidence that the respondent or anyone else is seeking regulatory approval to operate an aggregate quarry in those districts. The uncontested evidence in the affidavit of Mr. MacPherson is that he knows of no other suitable land in the Districts 14 and 17 planning area for quarry development.
[42] The position that HRM will suffer irreparable harm is tenuous at best.
Balance of convenience
[43] HRM argues that the “public interest” is a special factor that must be considered in assessing not just irreparable harm, but also where the balance of convenience lies. I agree that, as a general rule, it is considered at both stages. In RJR-MacDonald Inc., Sopinka and Cory JJ. summarized the factors to be considered on an application for interlocutory relief in a Charter case
[80] The third branch of the test, requiring an assessment of the balance of inconvenience, will often determine the result in applications involving Charter rights. In addition to the damage each party alleges it will suffer, the interest of the public must be taken into account. The effect a decision on the application will have upon the public interest may be relied upon by either party. These public interest considerations will carry less weight in exemption cases than in suspension cases. When the nature and declared purpose of legislation is to promote the public interest, a motions court should not be concerned whether the legislation actually has such an effect. It must be assumed to do so. In order to overcome the assumed benefit to the public interest arising from the continued application of the legislation, the applicant who relies on the public interest must demonstrate that the suspension of the legislation would itself provide a public benefit.
[81] We would add to this brief summary that, as a general rule, the same principles would apply when a government authority is the applicant in a motion for interlocutory relief. However, the issue of public interest, as an aspect of irreparable harm to the interests of the government, will be considered in the second stage. It will again be considered in the third stage when harm to the applicant is balanced with harm to the respondent including any harm to the public interest established by the latter.
[44] In RJR-MacDonald Inc. the applicants sought a stay of the effect of the decision of Quebec Court of Appeal upholding the constitutional validity of regulations governing tobacco advertising. In other words, it wanted a court order preventing the government from being able to enforce legislation that had been found to be constitutionally valid. Here, the respondent has been successful in establishing that one aspect of HRM’s by-law that purported to prohibit extractive facilities on a quarry site was not valid. No other by-law has been declared invalid. There is no request to enjoin government action.
[45] It is the inverse, government action is being asked to be allowed to continue despite a considered decision by this Court that HRM lacks the authority to prohibit the conduct in question. There may well be some circumstances where it is appropriate and just to stay the effects of a decision declaring a by-law invalid, but not on this record.
[46] If it turns out that the Supreme Court of Canada grants leave and ultimately decides that the by-law is valid, what is the extent and nature of the harm to HRM if the stay is not granted? It has failed to identify any identifiable harm to anybody should the respondent operate an aggregate quarry with rock crushing equipment. There are no floodgates of pending quarries. The residents of the Districts failed to establish any objective evidence that they would be adversely impacted by the operation of an aggregate quarry with rock crushing equipment before the Nova Scotia Utility and Review Board. Part of the Board’s analysis is as follows:
94 The Board also notes that scissor lift tests demonstrated that the quarry will not be visible from the nearest residence.
95 Additionally, the Board notes the uncontroverted evidence of Mr. Tomaselli and Mr. Ciccone regarding dust and noise, which leads it to find that, on the evidence before the Board, it cannot be reasonably said that dust or particulate matter or noise will have any impact on any of the proposed Intervenors.
96 The Board, therefore, finds there is no objective evidence on which it could fairly conclude that the subjective beliefs of the proposed Intervenors qualify them as aggrieved persons.
97 The Board notes in particular that the closest of the proposed Intervenors resides at a distance of 1.624 km from the proposed quarry development, and some were as far away as 8 km. While the Board accepts that distance is not a determinative factor, in light of the expert evidence before the Board, it is an objective factor in this case which must be given significant weight.
[47] HRM chose not to adduce any evidence otherwise, nor cross-examine Mr. MacPherson on his affidavit where he described the existence in HRM of three major aggregate quarry sites (in other Districts) in very close proximity to residential developments that grew up around those existing quarries.
[48] If leave to appeal is granted, and the appeal ultimately successful, the respondent agrees to cease operation of the rock crushing equipment.
[49] On the other hand, if the stay is granted, but HRM is not successful in its Supreme Court of Canada proceedings, the respondent is left without recourse for a loss of a very significant income stream. HRM refuses to provide an undertaking for damages that would be caused by a stay in the event the appeal proceedings are unsuccessful.
[50] In these circumstances, the balance of convenience plainly favours the respondent.
[51] For all of these reasons, the motion for a stay is dismissed with costs payable to the respondent in the amount of $1,750.00, inclusive of disbursements, payable forthwith in any event of the cause.
Beveridge, J.A.