Superior Court Grants Summary Judgment Motion Dismissing Action Seeking to Quash Municipal By-law

On May 3, 2023, the Township of Oro-Medonte was successful in having an action dismissed on a summary judgment motion. The underlying action was brought by the Oro-Medonte Property Owners' Association. They sought to quash a municipal by-law that would impose infrastructure connection charges for residents who are currently connected to a private water distribution system in Horseshoe Valley Resort, once connected to the Township's municipal water distribution system.

The Property Owners' Association asserted that the by-law was illegal because it amounted to a tax, was a development charge, and that the subject fees had no real nexus with the by-law because the water distribution system in place was already historically assumed and operated by the Township.

Justice Smith dismissed those arguments in their entirety and ruled in favour of the Township. In doing so, he found there was no genuine issue requiring a trial. That determination was made entirely on the basis of the documentary evidence. There was no demonstrable need for any viva voce evidence, and in fact, the plaintiff had no knowledge beyond what was contained in the documentary record. Justice Smith further observed and agreed with the Township that the proceeding, which was improperly commenced by way of an action, ought to have been commenced by an application given the language in s. 273(1) of the Municipal Act, 2001, relating to quashing by-laws. Importantly, he stated that the choice of proceeding was not merely a technical violation.

On the Township’s evidence, Justice Smith was convinced that the private water distribution system is, and has always been, a private system owned by the resort owners. Nevertheless, he agreed that the issue of ownership was a red herring given the uncontested evidence and engineering reports that demonstrated that the system needed to be substantially upgraded and replaced, regardless of the system’s ownership.

Justice Smith reinforced that municipalities have broad powers to regulate their own affairs under the Municipal Act, 2001, and that deference is owed to decisions made pursuant to such powers. When it comes to challenging municipal decisions, courts have repeatedly held that such decisions are presumed to be valid and are made in good faith, absent evidence of illegality. By-laws cannot be quashed on the basis of any perceived unreasonableness. They can, however, be found illegal due to bad faith. In this case, there was no such allegation or evidence to suggest bad faith on the part of the Township.

Not only do municipalities have broad powers, but when it comes to regulating drinking water systems, municipalities are obligated under the Safe Drinking Water Act to ensure that drinking water distribution systems meet safety standards, are in proper working order and in a good state of repair. This is particularly relevant considering the tragic events of Walkerton.

Ultimately, Justice Smith concluded that the Township acted as a responsible Council should. He stated, “the Township was acting within its statutory authority when it passed the impugned by-law. Council had an obligation imposed on it by the Safe Drinking Water Act, and by its role as an operating authority, to act in the matter as it did.” He further commended the Township’s efforts stating “[t]he steps Council took were both appropriate to the matter at hand and were a proper response to pressing municipal issues. That would be the expected response from a Council conducting its affairs in an appropriate and responsible manner, regardless of who actually owns the water system under its purview.” Finally, he noted “[t]he methodology employed by the Council leading up to its consideration of the fees and charges by-law significantly exceeded the obligations of a municipal council in passing such a by-law.”

Aird & Berlis represented the Township of Oro-Medonte with a team including Christopher Williams (Municipal & Land Use Planning) and Brian Chung (Litigation).