Exercise Due Diligence – Not Blind Reliance – When Dealing With Municipal Authorities

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Exercise Due Diligence – Not Blind Reliance – When Dealing With Municipal Authorities

May 5, 2014

By James Mosher, at McInnes Cooper

On May 2, 2014 the Supreme Court of Canada decided a party can’t rely on a municipality’s actions – or lack of actions – to defend itself against charges it violated a municipal zoning by-law. Parties dealing with municipal authorities should exercise due diligence – and not blind reliance.

The municipality charged a public parking lot owner for violating a zoning by-law. The owner defended itself with the estoppel defence: it said the municipality’s own actions over the years precluded it from asserting the lot violated the by-law. For example, the municipality:

paid the owner when municipal activities prevented use of some of the parking spaces
charged property taxes on the lot at the non-residential rate
installed a sign on city property directing the public to the lot

The SCC disagreed, confirming that a municipality can’t deviate from its by-law or authorize a party to do so (unless there is legislation permitting it) – and it can’t be forced to do so through estoppel:

A party can’t rely on estoppel to defend itself against a regulatory offence in the face of a valid and explicit law – like the zoning by-law here

Courts have only applied the doctrine of estoppel against public authorities where the representative’s promises were lawful or were consistent with a statutory discretion

Estoppel could force a public authority to exercise a discretion in a particular way, but ensuring by-law compliance and by-law enforcement are not discretionary

The decision was based on a Quebec by-law, but the estoppel defence and the principles apply across Canada. The message is a simple one – proper due diligence is key:

More Than Zoning By-Laws. The by-law in this case was a zoning by-law, but the decision likely applies equally to any type of municipal by-law.

Independent Verification. Owners (and purchasers) of residential or commercial property should verify the acceptable property uses by referring to the applicable zoning by-law, municipal plan or rural plan – and not relying on a municipal official’s confirmation that the use of the property is acceptable.

Municipal Officials’ Scope. An individual or company (or their legal counsel) should review the applicable laws and satisfy themselves that a municipal official is permitted to give the advice or grant the discretion in the matter in which it’s sought – or be unable to rely upon the advice given.

Click here to read the SCC’s decision in Immeubles Jacques Robitaille inc. v. Québec (City) 2014 SCC 34.

Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Municipal Law Team or our Real Estate Team to discuss this topic or any other legal issue.

McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2014. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at publications@mcinnescooper.com to request our consent.

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