Executive Summary: Key Legal and Evidentiary Issues

• The Town of Buchans issued a demolition order under section 404(1)(f) of the Municipalities Act without specifying which of the three statutory grounds applied to the property.

• Board's written reasons were not sufficiently transparent, justifiable, or intelligible for the parties to understand whether or how the decision-maker decided the issue.

• Conflicting evidence emerged regarding whether the Town conducted its own inspection or merely relied on a neighbour's observations of the property's condition.

• The Mayor's November 13, 2018 letter contradicted his hearing testimony about personally inspecting the property, creating uncertainty about the basis for the demolition order.

• Procedural fairness obligations, informed by the Baker factors, required the Board to provide adequate reasons given the severity of ordering property destruction without compensation.

• The remainder of the record shows that the Town's primary issue was GGR's refusal to pay property taxes.

Background and the property at issue

GGR Holdings Limited (GGR) owns a vacant property located at 59 Church Street, Lot 89D, in the Town of Buchans, Newfoundland and Labrador. The property is an end unit of a five-unit residential townhouse. The dispute arose when the Town of Buchans, at a council meeting on August 28, 2019, passed Motion #271-2019 ordering GGR to demolish the property under section 404(1)(f) of the Municipalities Act, 1999. The order further required GGR to restore the site to its original state and to restore the end of the adjacent property to a state that protects it from "all types of weather and climate."

The Town's actions and stated reasons

The Town invoked section 404(1)(f) of the Municipalities Act, which permits a council to order demolition where a property is (i) in a dilapidated state, (ii) in the opinion of the council, unfit for human habitation, or another use for which it is then being used, or (iii) a public nuisance. However, the Town's demolition order referred to this section in its entirety and did not specify which of the three conditions applied to the property. The council meeting minutes recorded only that the Mayor said he spoke to the Department of Health Service NL and Fire Emergency Services in Grand Falls-Winsor to get someone to act on getting the property demolished, and that "after discussions with these organizations, it came down to that the Town has to issue a demolition order to have the property torn down." The minutes do not show that the Council discussed the state of the property or why it should be demolished. The remainder of the record shows that the Town's primary issue is GGR's refusal to pay property taxes.

The appeal to the Regional Appeal Board

GGR appealed the demolition order to the Central Newfoundland Regional Appeal Board under the Urban and Rural Planning Act, 2000. On March 9, 2020, the Board dismissed the appeal and confirmed the Town's order. In its decision, the Board stated that the Council does have the right to order the repair, that the Council had responded to a complaint from a resident, and that the Council's letter of November 13, 2018, to GGR referenced the Town's inspection, noting that there were issues with a falling ceiling, extreme mold, and overall deteriorating conditions. The Board concluded that the Town properly applied section 404(1)(f) when it issued the demolition order. Like the Town, however, the Board did not specify which of the three conditions in section 404(1)(f) it was referencing.

Contradictions surrounding the property inspection

A central issue on appeal was whether the Town had actually conducted its own inspection of the property. The Mayor in his November 13, 2018 letter to GGR stated that when he arrived at the property, he did indeed find the door wide open and was able to establish there was at that time no one inside, but that "those residents who could see the property through the open door viewed fallen ceilings, extreme mold, and overall deteriorating conditions." This suggests that the Mayor merely reported on what someone else saw. However, at the Board hearing, the Mayor testified that he personally entered the property. He stated that he went in, walked up the stairs, looked around, came down, and walked out, and that "the demolition order … is based on my observations." The Court found that if this is so, it contradicts his letter of November 13, 2018, where he does not mention he actually inspected the house. Furthermore, the Board does not mention that the Mayor inspected the house but instead accepts his November letter. Thus, the Town may have merely reported observations made by a neighbour, not by any Town official.

The Court's analysis of procedural fairness

Justice Alexander MacDonald applied the Baker factors to assess the Board's obligation to provide adequate written reasons. Given that the Board's decision concerned whether the Town can destroy a citizen's property, and that the citizen's property would be destroyed without compensation, the Court found that a high degree of procedural fairness was owed. The reasons were required to be sufficiently transparent, justifiable, and intelligible for the parties to understand whether or how the decision-maker decided the issue, as stated by Justice McGrath (as she then was) in St. John's (City) v. 10718 Nfld. Inc., 2018 NLSC 194. The applicable standard of review for questions of procedural fairness was correctness, as established in Barron v. Eastern Newfoundland Regional Appeal Board, 2021 NLSC 150.

Two errors of law identified

The Court identified two specific errors of law. First, the Board erred when it did not consider whether the Town should have identified which of the three conditions in section 404(1)(f) it relied on. Each ground is different and carries different legal implications — for instance, the Council might have concluded that the property was unfit for human habitation, which may be a discretionary opinion that the Board might have concluded it cannot overrule under section 42(11) of the URPA. Alternatively, if the demolition order was based on one or more of the other grounds, the Board might have concluded that it can overrule the Town. Without knowing which condition applied, GGR could not know how or what it can appeal. Second, the Board erred when it did not adequately address whether the Town conducted its own inspection of the property. The Court found that if the Town orders the demolition of GGR's property, it must at the very least conduct its own inspection to determine the state of the property, and it cannot rely only on statements from a neighbour who may have an interest in the outcome of the inspection.

Ruling and outcome

The Court allowed GGR's appeal and vacated the Board's decision. The matter was referred back to the Central Newfoundland Regional Appeal Board with the Court's opinion that the Board should have concluded that the Town must identify what part of section 404(1)(f) of the Municipalities Act it relies on, and then provide reasons why the property falls within one of these conditions. Additionally, the Board should decide whether the Town conducted an inspection or, in the absence of its own inspection, can rely on another's evidence. The Court did not address the remaining grounds of appeal, including whether the Board could consider the factual basis on which the Town made the demolition order and whether the Town could order a rectification of the adjacent property common wall, though it noted the Board's general conclusions without reasons are not sufficient. GGR, as the successful party on the appeal, is entitled to its costs; however, no specific monetary amount was determined by the Court.