Court of Appeal weighs in on Application of Vavilov to Local Governments

Last year, the Supreme Court of Canada in the decision of Canada (Minister of Immigration) v Vavilov, 2019 SCC 65 (“Vavilov”), revised the test for determining the applicable standard of review in judicial review decisions. Following Vavilov, the default standard of review is reasonableness, subject to a few very specific exceptions. For a more detailed analysis of Vavilov see a summary of the decision previously published on our website here.

As most types of local government decisions do not fall into the limited exceptions, we have been waiting to see how the new judicial review test and framework will play out in the context of local government decisions. We recently provided analysis of a local government judicial review in the post-Vavilov world conducted by the BC Supreme Court, which can be found here.

Now, the BC Court of Appeal has released its first decision which applies Vavilov in the local government context, in the case of 1120732 BC Ltd. v Whistler (Resort Municipality), 2020 BCCA 101 (the “Whistler Decision”). The Whistler Decision was a challenge to a zoning amendment bylaw and a licensing bylaw that sought to regulate tourist accommodation in Whistler by requiring owners of properties in that zone to enter into a rental pool management agreement with a third party. The appellant advanced several arguments which are summarized below. The Court’s handling of these arguments provide insight into how local government decisions will be reviewed going forward.

1. Jurisdiction of the local government as a separate issue.

When the Whistler Decision was initially argued at BC Supreme Court, the Court applied a two-step analysis where it first looked at the jurisdiction of the council to enact the bylaw on a standard of correctness, and then the decision of council to adopt the bylaw on a standard of reasonableness. This was the standard approach pre-Vavilov.

On appeal, the appellant argued that the two-step analysis still applied post-Vavilov. Accordingly, the decision that Whistler had the authority to enact the bylaw and its decision to adopt the bylaw, were two separate considerations. The court rejected this argument as it would require the court to assess the correctness of Whistler’s statutory authority to adopt the bylaw, contrary to the intent of Vavilov. In making this conclusion, Justice Tysoe referred to passages from Vavilov which remind the reviewing court to refrain from embarking on its own analysis or deciding the issues themselves. Rather, the role of the reviewing court is to look at the record as a whole to understand whether the local government reasonably interpreted and applied its authority.

2. Reasonable interpretation of the statutory authority.

The appellant also argued that, if correctness did not apply to the question of jurisdiction, that the precise language of s. 479 of the Local Government Act restricts the reasonable interpretations of authority to enact the bylaw down to a single option.

Justice Tysoe rejected the argument that there could be only one reasonable interpretation of s. 479. Reasonableness review takes its shape from the context of the decision and the court will assess the extent of the constraints that limit the extent of the reasonable outcomes for the decision maker. In this case, the wording of s. 479 when read in the context of the purposes of the Community Charter and the Local Government Act, provides local governments with the flexibility to respond to the different needs and changing circumstances of their communities.

Given the broad authority under s. 479 for local governments to regulate the use of land, buildings and other structures by way of zoning bylaws, there was more than one reasonable interpretation of the local government’s statutory authority.

3. Regulation of “use” versus “users”.

Lastly, the appellant argued that the adoption of the zoning bylaw was unreasonable because Whistler sought to regulate “users”, whereas s. 479 of the Local Government Act, permits a local government to regulate, by bylaw, the use of lands, buildings and other structures. Therefore, a key consideration of the Whistler Decision was whether the regulation of a user was prohibited and whether this made the adoption of the bylaw unreasonable. Following an analysis of past jurisprudence which dealt with the regulation of use versus user, Justice Tysoe stated that it is not settled law in BC that a bylaw may not regulate users in any way since “regulation of use will often have the effect of regulating users at least to some extent”. However, the Court was clear that discriminatory regulation of user is prohibited.

In concluding, the Court of Appeal reasoned that there were at least three ways the council could reasonably have concluded that it had the authority to enact the impugned bylaw:

  1. The regulation of users is permitted so long as it is not unreasonably discriminatory;
  2. Protecting the use of the lands for tourist accommodation was a valid land use management rationale; and
  3. The zoning bylaw was not regulating users of the land (ie the owners) but regulating the rental pool manager.

The adoption of bylaws do not typically include a single set of coherent reasons which set out the local government’s reasoning. Therefore, the reviewing court must assess the record of the bylaw’s adoption as a whole to assess whether the outcome was reasonable in light of the relevant law and facts. In this case, given that there were reasonable grounds on which the local government could have enacted the bylaw, Whistler’s decision was held to be reasonable.

Of note, where the board or council of a local government is making decisions which do not result in a single set of written reasons, a court reviewing that decision may delve into everything that was before the local government when making its decision. Therefore, local governments should be mindful of what is included in the record of their decisions to support the reasonableness of their actions.