In a decision issued on 14 October 2014, the Divisional Court in City of Toronto v. SheppBonn Ltd. granted a motion by the City of Toronto (the “City”) for leave to appeal from a decision of the Ontario Municipal Board (the “Board”) in which the Board decided that it had jurisdiction to determine whether a proposal was subject to site plan approval.
SheppBonn applied for a Building Permit for interior renovations to a building located in a mixed use zone that permitted a wide range of commercial and residential uses. The City’s Chief Building Official (“CBO”) refused to issue a Building Permit, on the basis that the property was subject to site plan control and therefore, an application for site plan approval was required. Section 114(5) of the City of Toronto Act ("COTA") provides:
Approval of plans or drawings
No person shall undertake any development in an area designated under subsection (2) unless the City or, where a referral has been made under subsection (15), the Ontario Municipal Board has approved one or both, as the City may determine, of the following:
1. Plans showing the location of all buildings and structures to be erected and showing the location of all facilities and works to be provided in conjunction therewith and of all facilities and works required under clause (11) (a).
2. Drawings showing plan, elevation and cross-section views for each building to be erected, except a building to be used for residential purposes containing less than 25 dwelling units...
SheppBonn refused to submit a site plan application and brought a Motion for Directions (the “SheppBonn Motion”) to the Board under section 114(7) of COTA which provides:
Dispute about scope of site plan control
The owner of land or the City may make a motion for directions to have the Ontario Municipal Board determine a dispute about whether a matter referred to in paragraph 1 or 2 of subsection (5) is subject to site plan control.
In response, the City brought a motion seeking an Order from the Board that it lacked jurisdiction to determine the correctness of the CBO’s refusal to issue the Building Permit (the “City’s Motion”).
The City argued that the CBO’s decision to withhold the Building Permit was not a question of the scope of site plan control under COTA section 114(7) which, it argued, only becomes relevant once a site plan application is submitted. Since SheppBonn had not submitted an application, no right of appeal existed under the COTA.
The City took the position that under the circumstances, the appropriate remedy for the CBO’s decision was an appeal to Superior Court, pursuant to the Building Code Act (“BCA”). Section 25(1) of the BCA provides:
A person who considers themself aggrieved by an order or decision made by the chief building official, a registered code agency or an inspector under this Act (except a decision under subsection 8 (3) not to issue a conditional permit) may appeal the order or decision to the Superior Court of Justice within 20 days after the order or decision is made.
The Board found that it did have jurisdiction, noting that it was charged with addressing matters related to site plan control and applying its specialized expertise under section 41 of the Planning Act, which is similar to section 114 of the COTA.
Divisional Court Decision
The Court applied a correctness standard to the Board’s decision. In declining to apply a reasonableness standard, the Court held that since the Board was deciding a true question of jurisdiction, under Dunsmuir v. New Brunswick the Board must make a correct determination.
In finding that there was reason to doubt the correctness of the Board’s decision, the Court cited the following language from it’s decision:
 With respect to the Motion by the City, the Board finds that it does not have the jurisdiction to make a determination as to whether or not the CBO of the City was correct to refuse to issue a building permit to the Respondent for failure to comply with s. 114 of the COTA as that is a question exclusively for the Superior Court to decide pursuant to the provisions of the OBCA.
 The Board after having carefully considered all of the evidence before it as well as the arguments of counsel, agrees with counsel for SheppBonn's submission and finds that it does have jurisdiction pursuant to s. 114(7) of the COTA to make a determination as to whether site plan control applies in this case.
Noting, a fundamental conflict between the two paragraphs, the Court stated:
It is difficult to see how the OMB could determine that it did not have jurisdiction to determine if the Chief Building Official was correct to refuse a building permit, based on her conclusion that the property was subject to site plan control, while at the same time determining that it did have the jurisdiction to determine whether site plan control applied in this case. A conclusion on the latter question directly affects the result on the former question.
In the Court’s opinion, the only way to reconcile the two paragraphs above, would be to determine that the Superior Court and the Board have concurrent jurisdiction, which necessarily raises the question of how to reconcile a disagreement between the CBO and the Board, as in the case at bar.
In addition, the Court noted that the question of whether a specific aspect of a development proposal is subject to site plan control (i.e. a question of scope under section 114 of the COTA), is very different from deciding whether site plan control applies to a proposal as a whole.
These unanswered questions led the Court to hold that while it did not conclude the Board had made an error, it did leave doubt as to the correctness of the Board’s decision and raised questions of law of sufficient public importance to merit the Court’s attention, given that the issue arises not infrequently and similar site plan appeal provisions are contained in the Planning Act, thus affecting municipalities throughout the Province.