Executive Summary: Key Legal and Evidentiary Issues

• Scope of the common law duty of procedural fairness owed by a municipal council when rescinding previously approved Terms of Reference (TOR) for a developer-led area structure plan (ASP).
• Whether Canada (Minister of Citizenship and Immigration) v Vavilov expands the duty to give formal reasons beyond what was established in Baker v Canada, particularly in the municipal decision-making context.
• Application of the Baker factors to determine if fairness required formal reasons and an opportunity for the developer to amend the TOR before rescission.
• Use of an internal Request for Decision and the surrounding record to infer reasons and assess the reasonableness of a council resolution passed without formal reasons.
• Interaction between municipal planning obligations (MGA, regional Growth Plan, Municipal Development Plan) and a developer’s expectations and interests in proceeding with a large residential ASP.
• Assessment of whether rescinding the TOR, rather than affording other procedural options, was an aberrant or unreasonable municipal response in light of new regional planning requirements.

Factual background

Western Securities Limited owned land in Rocky View County that it sought to develop through a residential project known as the Gardner Area Structure Plan (Gardner ASP). The County’s Council had previously approved Terms of Reference on January 12, 2021 for a wholly developer-funded ASP that would guide future growth on those lands. The TOR required the Gardner ASP to align with three key planning documents: the Calgary Metropolitan Region Board (CMRB) Interim Growth Plan, the County’s Municipal Development Plan (the County Plan/MDP), and the Elbow View Area Structure Plan. The TOR also contained a flexibility clause (paragraph 8) stating that if County policies regarding the preparation of ASPs changed or were updated, the project could proceed in accordance with Council-approved policy “and would not require amendment.”

In 2022, the regional and local planning context shifted. The CMRB adopted a new Growth Plan, replacing the Interim Growth Plan, and the County rescinded the TOR for the neighboring Elbow View Area Structure Plan, immediately east of the Gardner project. The County’s Planning Manager subsequently advised Western that, because of the new regional requirements, administration would recommend that Council rescind the Gardner ASP TOR as well. Western was told it could request to speak to Council or submit a letter responding to administration’s recommendation. The Planning Manager later provided Western with a draft Request for Decision that identified policy-alignment concerns and again indicated that Western could make submissions, even though the item was not a public hearing and there was no automatic right to be heard. Western did not, in the end, request to appear or submit written materials.

On November 29, 2022, the Department issued a formal Request for Decision recommending rescission of the TOR. It noted that, contrary to expectations, little substantive work had been done on the Gardner ASP and no public engagement had occurred. It further concluded that, under the new Growth Plan and the MDP, the Gardner ASP would be treated as a “new hamlet,” subject to strict limits on maximum area, demonstrated market need, and appropriate location within the existing settlement pattern. The proposed ASP area significantly exceeded the new hamlet area cap, market demand would be difficult to justify given existing capacity in other growth areas, and the lands were not contiguous with existing settlement areas, especially after the Elbow View TOR had been rescinded. Later that day Council passed a resolution, with minimal recorded wording, rescinding the Gardner ASP TOR.

The application for judicial review

Western brought an application for judicial review, arguing that the County’s decision to rescind the TOR was both procedurally unfair and substantively unreasonable. On procedural fairness, Western contended that Council was obliged to provide formal reasons explaining the decision and to give Western a clear opportunity to submit an amended TOR before any rescission occurred. It argued that the Supreme Court’s decision in Vavilov had shifted the judicial review culture toward justification and imposed a heightened duty to provide reasons, especially where decisions have serious economic consequences. Western also argued that the Baker factors, when applied to this case, pointed to a high level of procedural protection.

The County responded that its duty of procedural fairness was modest in this context and that it had been met. It emphasized that the decision being challenged was not approval or rejection of an ASP itself, but rather rescission of TOR, leaving Western free to advance a fresh or amended TOR at any time. The statutory framework, the County said, simply required that the resolution be passed at a public meeting with quorum, which occurred. It pointed to the series of communications from the Planning Manager—providing the draft Request for Decision, flagging the policy-alignment concerns, and explicitly inviting Western to address Council or submit written comments—as satisfying any common law duty to inform the developer of concerns and provide an opportunity to respond. The County also disputed any duty to provide formal reasons for a council vote, particularly in light of the practical difficulty of capturing multiple councillors’ individual reasons in a single written set of reasons.

Policy framework and the disputed TOR clause

A central feature of the dispute was the interplay between the TOR and evolving planning policies. As noted, the TOR originally required alignment with the CMRB Interim Growth Plan, the MDP, and the Elbow View ASP, and later had to be measured against the new CMRB Growth Plan. The new Growth Plan capped the size of new hamlet growth areas at 260 hectares (640 acres), imposed a requirement to show demonstrated market demand and growth pressure, and mandated that any new hamlet be appropriately located within the existing settlement pattern. The County’s planning staff concluded that the Gardner ASP would exceed the maximum area, face difficulty demonstrating market need given existing capacity in other designated growth areas, and be improperly situated as it was not contiguous with other settlements after Elbow View’s TOR was rescinded.

Western placed considerable reliance on paragraph 8 of the TOR, which stated that, where there were changes or updates to County policies regarding the preparation of ASPs, the project could proceed under updated policy “and would not require amendment.” Western argued that this language created a legitimate expectation that, as planning policies evolved, it would have the chance to adjust the project and continue rather than face simple cancellation of the TOR. The Court agreed that the TOR as a whole signaled flexibility and ongoing communication, but held that paragraph 8 was expressly limited to “County policies” about the preparation of ASPs. It did not extend to changes in regional instruments such as the CMRB Growth Plan or the MDP in a way that guaranteed Western a right to incorporate any and all changes without amending the TOR, or a guaranteed opportunity to submit an amended TOR before rescission.

Procedural fairness analysis

Justice Bercov assessed procedural fairness using the Baker factors and Western’s attempt to extend Vavilov into this domain. On the first Baker factor, the nature of the decision and process, the Court held that a council resolution rescinding TOR is not closely analogous to a judicial proceeding: it is a policy and planning step about whether to continue with a framework for an ASP, not a final adjudication of rights. Importantly, the decision related only to the TOR and did not bar Western from returning with fresh or amended TOR in the future. This pointed toward a lower level of procedural entitlements.

Under the statutory scheme factor, the Court acknowledged there was no statutory appeal from the council resolution but stressed that the decision was not determinative of whether development could ever occur on the lands. Western remained free to propose new TOR that complied with the New Growth Plan and MDP; thus the absence of an appeal did not, in context, justify a heightened duty of fairness. On the importance of the decision to Western, the Court declined to infer from the record that the decision rendered the lands undevelopable. Even if development became more difficult or less profitable, the Court was not persuaded that it was the rescission itself, as opposed to the new planning framework, that stopped development.

Regarding legitimate expectations, the Court accepted that the TOR contemplated continuing communication and some flexibility as policy evolved. However, it found no clear representation—whether in the TOR, in legislation, or through established municipal practice—that Western would always be allowed to proceed without TOR amendment or be guaranteed a pre-rescission opportunity to amend. Paragraph 8 was interpreted narrowly as applying to County policies on ASP preparation, not to all levels of planning instruments.

The Court also placed weight on the municipality’s choice of procedures. Producing unified, formal reasons for a council vote is difficult where councillors may agree on an outcome for differing reasons. Vavilov itself, the Court observed, expressly contemplates decisions such as municipal bylaws where the duty of fairness will not always demand written reasons, and it does not convert every municipal resolution into a reason-giving exercise. Ultimately, Justice Bercov concluded that the level of procedural fairness owed here was at “the lower end,” requiring that Western be informed of the policy-alignment concerns and given an opportunity to respond, but not mandating formal written reasons or a guaranteed opportunity to submit a revised TOR before rescission.

On the facts, those lower-end requirements were satisfied. Western received the draft Request for Decision outlining the policy concerns, met with the Planning Manager to discuss them, and was explicitly invited—twice—to speak to Council or submit written comments. Western chose not to do so. The Court held that these steps were enough to discharge the duty of fairness.

Reasonableness review under Vavilov

Turning to the substantive reasonableness of the decision, Justice Bercov applied Vavilov’s framework and confirmed that reasonableness is the presumptive standard of review, with no applicable exceptions. The analysis focused on both the outcome and the decision-making process, asking whether the resolution fell within a range of acceptable, defensible outcomes based on an internally coherent chain of reasoning that fit the governing law and facts.

Western argued that, absent recorded deliberations or formal reasons, there was no way to reconstruct a rational basis for the decision. It maintained that the “record” contemplated in Vavilov was limited to council debates and policy statements, not administrative recommendations from staff, and that the Request for Decision was merely bureaucratic opinion, not evidence of Council’s reasoning. It further argued that Council had obligations under Part 17 of the Municipal Government Act to balance individual and public interests, and that failing to show any consideration of the consequences for the developer rendered the decision arbitrary and unreasonable.

The County countered that courts, particularly after Vavilov and cases like Koester v Wheatland County, may look to the whole record, including staff reports and the broader statutory and policy context, to infer the rationale behind a council resolution. It framed the reasonableness question in two steps: whether the statutory and regulatory scheme was reasonably followed, and whether, in light of all the facts, rescinding the TOR was aberrant, overwhelming, or a choice no reasonable municipality would make. The County emphasized that at all relevant times it was subject to the MGA and the Calgary Metropolitan Region Board Regulation, which required ASPs to comply with regional growth plans and to obtain CMRB approval. Since the TOR no longer aligned with the New Growth Plan and MDP, allowing the project to proceed under outdated TOR would likely lead to an ASP that the CMRB would not approve.

The Court adopted the broader approach to the record. It rejected Western’s narrow view that only debates and formal policy statements could elucidate the rationale. The Request for Decision formed part of the record, and given that it was prepared specifically to obtain a decision from Council and that no other substantive materials went before Council, it was reasonable to infer that Council relied on it. From this, the Court concluded that Council’s reasons were clear in substance: the Gardner ASP TOR was inconsistent with the MDP and the new CMRB Growth Plan, and any ASP based on those TOR would likely fail to secure required regional approval.

Having identified this rationale, the Court held that the statutory and regulatory framework had been reasonably followed. Council met statutory requirements for passing a resolution and acted in accordance with a legal regime that obliged it to ensure ASPs complied with growth and development plans. The decision to rescind the TOR, while one of several possible options, was not aberrant or outside the range of reasonable responses. The Court acknowledged that Council might instead have adjourned to seek further analysis, invited Western to propose amendments, or allowed the TOR to remain in place while testing its viability before the CMRB. But reasonableness does not require that the municipality choose the least disruptive or most developer-friendly option, only that its choice be defensible. In circumstances where Western had not provided any new information, did not articulate proposed amendments, and did not participate in the Council meeting despite invitations to do so, Council had no reason to doubt the planning staff’s assessment or to believe that a viable amendment path existed.

The Court also addressed Western’s argument that Council failed to grapple with the consequences of rescission for the developer. It held that the primary hardships—loss of the specific Gardner ASP concept and sunk costs—flowed not from the rescission itself but from the binding requirement that ASPs comply with the New Growth Plan and MDP. Whatever procedure Council might have followed, Western could not reasonably expect to proceed with a non-compliant ASP. Moreover, the rescission did not legally prevent Western from bringing forward a revised TOR structured to meet the new regional and municipal requirements. In that context, the absence of explicit, recorded balancing of developer versus public interests did not render the decision unreasonable.

Outcome and consequences for the parties

In the end, Justice Bercov dismissed Western’s application for judicial review. The Court found that the common law duty of procedural fairness, as informed by Baker and properly understood in light of Vavilov, did not require Council to provide formal written reasons or a guaranteed pre-rescission opportunity to submit amended TOR. The duty was instead satisfied by the County’s advance notice of policy concerns, provision of the draft Request for Decision, meeting with Western, and explicit invitations to make oral or written submissions—opportunities Western did not take up. On substantive review, the Court held that Council’s decision was reasonable: it complied with the statutory framework, had a discernable and coherent rationale rooted in regional and municipal planning obligations, and did not represent an aberrant or irrational choice among available options.

Rocky View County, as the respondent and defending party, emerged as the successful party in the litigation. The Court did not, however, fix any specific monetary award, damages, or costs in the decision. Instead, it directed that if the parties could not agree on costs, they might each submit written argument of up to five pages within 20 days, leaving the quantum of any costs award to be determined later. As a result, the total monetary amount ordered in favor of the successful party cannot be determined from this decision alone.