Executive Summary: Key Legal and Evidentiary Issues

• Availability of judicial review where a statutory appeal with leave on questions of law exists under s. 24(1) of the Ontario Land Tribunal Act.
• Characterization of procedural fairness as a “question of law” that must be pursued through the statutory appeal route rather than judicial review.
• Effect of withdrawing a draft plan of subdivision appeal under s. 51(36) of the Planning Act on the participatory and substantive rights of non-appellant parties.
• Jurisdiction of the Ontario Land Tribunal to impose, or indirectly compel, private cost-sharing agreements through conditions of draft plan approval or zoning instruments.
• Proper use and limits of holding (“H”) provisions and subdivision conditions as public-law planning tools rather than mechanisms to enforce purely private cost-sharing arrangements.
• Whether late-breaking settlements and resulting loss of an issues list item can amount to a breach of procedural fairness for a non-appellant party.

Factual background

Caledon Residences Inc. (CRI) owned a residential subdivision known as Caledon Estates. It had funded infrastructure that it said also benefited the neighbouring lands owned by 1685078 Ontario Inc., referred to in the decision as Sunshine Group. Sunshine Group applied for approval of a draft plan of subdivision to redevelop its property as a residential subdivision, and for a zoning by-law amendment (ZBA). The Town of Caledon failed to make decisions on these applications. As a result, Sunshine Group appealed both the draft plan and ZBA matters to the Ontario Land Tribunal (OLT) under ss. 34(11) and 51(34) of the Planning Act. CRI sought and obtained party status in the Sunshine Group appeals. Its sole focus was to secure a cost-sharing condition so that Sunshine Group would contribute to the infrastructure costs that CRI claimed also served the Sunshine Group development. The OLT’s issues list for the draft plan appeal included three specific CRI issues: whether Sunshine Group’s development benefited from infrastructure installed by CRI, whether cost sharing should be a condition of draft plan approval, and what the wording of such a cost-sharing condition should be. A multi-day OLT hearing was scheduled for December 9, 2024.

Settlement and withdrawal of the draft plan appeal

On December 6, 2024, three days before the hearing, Sunshine Group and the Town reached Minutes of Settlement. The settlement provided for Sunshine Group to withdraw its draft plan of subdivision appeal and for the Town and Sunshine Group to ask the OLT, on consent, to approve the ZBA in the form attached to the Minutes. The settlement did not include any cost-sharing condition in favour of CRI. Sunshine Group notified both CRI and the OLT of the settlement. When the hearing convened on December 9, 2024, the OLT heard submissions about the proposed withdrawal of the draft plan appeal and the settlement of the ZBA appeal. The ZBA appeal remained before the Tribunal as a settlement hearing between Sunshine Group and the Town. CRI remained a party but had no identified issues on the ZBA appeal’s issues list.

Submissions before the Ontario Land Tribunal

CRI advanced two main positions before the OLT. First, it asked the Tribunal to refuse Sunshine Group’s request to withdraw the draft plan appeal so that CRI could still argue its cost-sharing issues on the merits. It relied on the York decision to say that an appellant does not have an absolute right to withdraw an appeal and that the Tribunal could refuse withdrawal in exceptional circumstances. Second, when the Tribunal accepted the withdrawal, CRI requested alternative relief in connection with the ZBA. It asked either that the Tribunal withhold its final order on the ZBA until a cost-sharing agreement between Sunshine Group and CRI was concluded, or that the Tribunal impose a holding (“H”) symbol on the ZBA, to be removed once such a private cost-sharing agreement was finalized. CRI also argued that, had it received settlement materials 10–15 days in advance (which it characterized as usual practice), it could have brought a motion to amend the ZBA issues list to add a cost-sharing issue. The Tribunal rejected this, finding that settlements are often finalized on the eve or even the morning of a hearing, and that there was no usual practice of filing settlement materials 10–15 days beforehand.

Statutory framework and the Tribunal’s decision

The Planning Act allows appeals to the OLT on both draft plan approvals and zoning by-law amendments, and specifically sets out what happens when a non-decision draft plan appeal is withdrawn. Section 51(36) provides that if such an appeal is withdrawn, the Tribunal must notify the approval authority, which may then proceed to make its own decision under s. 51(31). The OLT held in its December 24, 2024 reasons that it would not withhold its final order on the ZBA or add a holding symbol as a way to force or condition approval on a private cost-sharing agreement between CRI and Sunshine Group. In its view, approving a ZBA on the basis that a cost-sharing agreement must be entered into would, in substance, amount to requiring two private parties to contract with one another, which was outside the Tribunal’s jurisdiction and not an appropriate use of the zoning or holding-symbol tools. The Tribunal distinguished York and found there were no exceptional circumstances warranting refusal of Sunshine Group’s withdrawal of the draft plan appeal. CRI later sought an internal review. The OLT Vice-Chair concluded there was no convincing and compelling error of law and dismissed the request.

Proceedings in the Divisional Court

CRI brought an application for judicial review to the Divisional Court, arguing that its right to procedural fairness had been breached when the OLT declined to allow it to advance its cost-sharing case after Sunshine Group’s settlement and withdrawal. CRI contended that it was owed a high degree of procedural fairness under the Baker factors, given that it had been a full party at every step: it had filed issues, served expert and reply witness statements, attended experts’ meetings and case management conferences, and was prepared to call evidence and conduct cross-examinations at a multi-day hearing. CRI emphasized that it had less than one business day’s notice that the draft plan issues list—including its cost-sharing issues—would effectively be removed from the Tribunal’s jurisdiction, depriving it of any realistic opportunity to adjust its strategy or seek amendments to the ZBA issues list. CRI also claimed it had a legitimate expectation, based on the Tribunal’s rules and practice, that its cost-sharing issues would be addressed at the scheduled hearing. It argued that the Tribunal should have treated the situation as “exceptional” and refused the withdrawal, or at minimum structured the ZBA approval (through withholding an order or using a holding symbol) so as to ensure that cost sharing could still be adjudicated.

Issues before the Divisional Court

The Divisional Court framed two central issues. First, it had to decide whether judicial review was appropriate, given the existence of a statutory right of appeal on questions of law under s. 24(1) of the Ontario Land Tribunal Act, which can only be pursued with leave of the Divisional Court. Second, if judicial review were properly before it, the Court had to determine whether the OLT’s handling of the withdrawal and its refusal to entertain cost-sharing relief under the ZBA appeal breached CRI’s right to procedural fairness, including any legitimate expectations grounded in the Tribunal’s processes.

Divisional Court’s analysis of judicial review versus appeal

The Court began by addressing whether it should exercise its discretion to hear the judicial review at all. Relying on Yatar and related authorities, it stressed that courts must ask at the outset whether judicial review is suitable in light of any available statutory appeal scheme. It accepted that CRI’s complaint was exclusively about procedural fairness. It then held that procedural fairness is a legal standard and that whether an administrative tribunal has complied with its duty of fairness is therefore a question of law. Because s. 24(1) of the Ontario Land Tribunal Act clearly channels questions of law from OLT decisions into a leave-to-appeal process to the Divisional Court, the Court concluded that allowing judicial review in this kind of case would undermine the Legislature’s choice to subject such questions to leave. Following earlier Divisional Court authority in Humberplex, the Court held that the statutory appeal route (with leave) is a “meaningful and adequate” remedy for questions of law, including alleged breaches of procedural fairness. CRI had simply chosen not to seek leave because it doubted it could satisfy the public-importance component of the leave test, and the time to do so had expired—though an extension of time could still be sought. Those strategic choices did not justify bypassing the statutory path via judicial review. On that basis, the Court declined to exercise its discretion to entertain the judicial review application.

Divisional Court’s analysis of procedural fairness and jurisdiction

Recognizing the unusual circumstances and the parties’ interest in guidance, the Court went on, in the alternative, to address the merits of the procedural-fairness claim. It held that once Sunshine Group withdrew its draft plan appeal, s. 51(36) of the Planning Act automatically dictated the next steps: the appeal was at an end, the OLT’s role on that file ceased, and jurisdiction reverted to the approval authority (the Town) to make the primary subdivision decision. In that statutory framework, CRI—being a non-appellant party—no longer had rights before the Tribunal on the draft plan matter after withdrawal. The Court reasoned that the consequences CRI faced, including loss of the ability to argue cost sharing, were a foreseeable risk inherent in being a non-appellant participant in an appeal. The Baker factors and common-law fairness duties applied while the appeal was alive, but could not extend the Tribunal’s jurisdiction after the legislature had mandated what happens upon withdrawal. On the ZBA front, the Court found no legal basis for the OLT to condition the zoning approval on a private cost-sharing agreement between CRI and Sunshine Group, whether by withholding its final order or by imposing a holding symbol. It noted that holding symbols under s. 36 and subdivision conditions under s. 51(26) are tools for municipalities or approval authorities to secure public-interest planning objectives through agreements with applicants, not mechanisms for tribunals to force agreements solely between private landowners. Authorities such as Shelving and Racking confirmed that it was inappropriate to use holding symbols to compel municipal involvement in private disputes about shared obligations. Even if CRI had been permitted to amend the ZBA issues list and argue cost sharing, the Court was not persuaded that the Tribunal would have had jurisdiction to require Sunshine Group to enter into a cost-sharing agreement or to use its approval powers to achieve that result indirectly. On this analysis, there was no breach of procedural fairness in how the OLT dealt with the late settlement, the withdrawal of the draft plan appeal, or the ZBA approval.

Outcome and significance

In the result, the Divisional Court dismissed CRI’s application for judicial review. It held, as a matter of principle, that challenges framed as procedural fairness complaints about OLT decisions must ordinarily proceed by way of the leave-to-appeal mechanism in s. 24(1) of the Ontario Land Tribunal Act, not by judicial review. On the alternative merits analysis, the Court confirmed that the withdrawal of a non-decision draft plan appeal under s. 51(36) of the Planning Act ends the Tribunal’s jurisdiction over that appeal, and that the OLT cannot use zoning approvals or holding symbols to compel or leverage purely private cost-sharing agreements between adjacent landowners. The decision underscores the litigation risks for non-appellant parties who rely on another party’s appeal to advance cost-sharing or similar claims, and clarifies that planning tools such as holding provisions and subdivision conditions remain public-law instruments rather than private enforcement mechanisms. The successful party was 1685078 Ontario Inc. (Sunshine Group), which obtained dismissal of the judicial review and an order that CRI pay its costs in the fixed amount of $10,000, while the Town of Caledon did not seek any costs, so the total monetary amount awarded in favour of the successful party in this decision was $10,000.