In this decision, the Ontario Superior Court of Justice held that the use of a property for the extraction of aggregates was not permitted under the applicable zoning bylaw.
The case involved a parcel of land in the Coleman Township — known as the "Cobalt pit property" —that was owned by the Town of Cobalt. Cobalt sought a declaration that its use of the property for aggregate extraction was permitted. The applicable zoning bylaw in Coleman Township zoned a portion of the property as "residential" and another as "development." The residential zone did not permit pits or quarries, while the development zone permitted existing non-residential uses.
In declining to grant the declaration, the Court found that Cobalt did not carry on any extraction activities in the development zone and thus such activity was not an existing non-residential use. As for the residential zone, the Court considered whether historical aggregate extraction in that area amounted to a legal non-conforming use of the property, and concluded that it did not, primarily because the extraction had increased significantly in scale since 2013 and differed in kind from the historical extraction that had been conducted on the land. As a result, the Court determined that the large-scale commercial extraction that Cobalt wished to continue was not a permitted use of its property.
In 2011, Gastem Inc. undertook a petroleum exploration project within the Municipality of Ristigouche-Partie-Sud-Est (Municipality) and proceeded with the development of a drilling platform on private land. In March 2013, at the request of residents, the Municipality enacted a bylaw designed to protect water sources by prohibiting drill sites within a two-kilometre radius around any artesian or surface well. The bylaw also banned the introduction of any chemical substance into the soil likely to affect water quality.
Gastem's exploration activities contravened the new bylaw. Gastem commenced litigation, alleging that the Municipality adopted the bylaw in an illegal, targeted and untimely manner in order to prevent Gastem from continuing its activities. Gastem sought approximately C$2M in damages. The Municipality sought to have the action dismissed on the basis that it amounted to an abuse of process.
Superior Court Justice Nicole Tremblay dismissed Gastem's claims on the basis that the Municipality has a duty to protect its waterways in accordance with provincial government regulations and applicable laws. The Court held that Gastem failed to demonstrate that the bylaw was enacted in bad faith. Further, the balance of convenience clearly favoured Municipal interests in the circumstances. The Court also ordered Gastem to pay costs in the amount of 50% of the Municipality's legal fees, and an additional C$10,000 to cover public relations expenses incurred by the Municipality.
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