Government of BC Validates Zoning Bylaw

The principal issue in this case was whether a British Columbia municipality can lawfully buy and sell land use zoning in exchange for amenities. The BC Supreme Court determined that the buying and selling of land use zoning as between the Resort Municipality of Whistler and the developer, Nita Lake Lodge Corp., was illegal and was not authorized by the applicable municipal legislation (the Local Government Act of BC).

The plaintiffs commenced proceedings on October 8, 2003 challenging a zoning bylaw enacted by the Resort Municipality of Whistler, which would have allowed the construction of a 4-storey hotel and train station on a three-acre parcel of lakeshore on Nita Lake, one of the smallest of five lakes in Whistler. The impugned zoning bylaw would also have allowed the construction of fourteen residential homes and an employee housing block on an adjacent 23-acre parcel.

The plaintiffs, who owned property at the opposite end of Nita Lake, sought a declaration that the zoning bylaw was illegal on three grounds, the first of which was that the Resort Municipality of Whistler was engaged in the illegal buying and selling of land use in exchange for amenities. The court relied on the authority of the Supreme Court of Canada’s decision in Pacific National Investments Ltd. v. Victoria (City), [2000] 2 S.C.R. 919 for the proposition that specific legislative authority is required to allow land use bargaining between a developer and a municipal council and found that in enacting the impugned bylaw the municipality had acted outside the scope of its empowering legislation.

The BC Local Government Act permits a municipality to increase the density of a development in exchange for “amenities” or “housing.” However, the Court found that the bylaw in question did not only increase the permitted density for the development, but also changed the permitted use of the property. The Court determined that the Act did not permit a municipal government to make “land use zoning” conditional upon the provision of amenities or housing by the developer.

The bylaw was declared illegal. The municipality and the developer appealed the decision.

On May 20, 2004, the Government of British Columbia validated the bylaw by special legislation under the Municipalities Enabling and Validating Act (No. 3), despite the decision of the Supreme Court. No amendment to the Local Government Act has been proposed.

The plaintiffs, Keith Lambert and Rosalyn Lambert, were represented by George Macintosh, Q.C., and Susan Horne of Farris. Mitchell Gropper, Q.C., also of Farris, was actively involved with the file.

The defendant, the Resort Municipality of Whistler, was represented by Reece Harding and Sukhbir Manhas of Lidstone, Young, Anderson.

The defendant, Nita Lake Lodge Corp. was represented by Darrell Roberts, Q.C. of Miller Thomson LLP.