Thursday, May 15th, 2008 ::: Law: The Oakville Case

The Town of Oakville’s strict billboard regulations were struck down by the Ontario Superior Court early this year on Charter of Rights grounds. The Court ordered Oakville to issue permits for about twenty 6′ x 12′ billboards to Vann Media.

On Thursday a hearing took place for Oakville’s appeal and in this blog post we tell you what happened in excruciating detail. We think that this case will have a huge impact on the shape of Toronto’s new billboard by-law, especially if the Court rules that Oakville’s practice of allowing transit shelter ads in locations prohibited by the sign by-law undermines the purpose of the by-law. Not surprisingly a City of Toronto staffer was in attendance.

When the word JUDGE appears, it can be any one of the three presiding judges.

Note that Oakville’s by-law allows billboards but only in what Vann calls a “dead end” industrial zone (the E2 zone); and Oakville’s complete prohibition on billboards was struck down by the Ontario Court of Appeal so Vann argues that the new law is a de-facto ban.

We think dead end streets are where billboards belong so we’re hoping for a huge victory for Oakville. Also note that the Supreme Court of Canada ruled that a municipality can restrict the maximum size of sign to less than industry standards (200 square feet) and Oakville chose 80 square feet.

As in any appeal, the most important part comes when the judges ask questions. Of course, every thing is a paraphrase and I use shortcuts so the people in person sound a lot more articulate and smart than I make them out to be.

Note that the moment of destiny for Oakville and Vann Media comes when the judge says “Bus Shelters!”

[Barnet Kussner of WeirFoulds starts out for Oakville]

JUDGE: Could it be argued that what the lower court did is it looked at the by-law and said that Oakville just made a minimal effort to comply with the previous Court of Appeal ruling that they can’t ban billboards entirely? ie the lower court didn’t say Oakville acted in bad faith.

KUSSNER: Municipal council is presumed to act in good faith. Allegations of bad faith were raised and rejected. The essence of Judge Gray’s finding was the same effect as a ruling that Oakville acted in bad faith.

JUDGE: I’m not sure I follow that the lower court found bad faith. The lower court found that the locations the billboards can be built in Oakville are uneconomical. This is may not be bad faith. It may suggest that the town is trying to prevent billboards from going up in good faith by creating a web of regulations that makes Vann’s signs impractical in financial effect.

KUSSNER: I have two responses to that. First the decision starts by stating that Oakville acted to “avoid the import” of the Ontario Court of Appeal’s previous decision. That suggests an improper purpose. That’s asserted throughout the ruling. There is a big difference between avoiding the import and creating a practical matrix of provisions for regulating signs under good faith. There was no basis to conclude that Oakville was acting to avoid the import of the Court of Appeal’s ruling.

Secondly, Vann has certain expectations in terms of industry standards that it expects to achieve. But the Supreme Court said that the Town can restrict size to less than industry standards. Vann’s position is that Oakville can’t take advantage of the Supreme Court to limit size unless it eliminates the other restrictions to make the signs conform to industry standards of visibility. This was argued at the lower court level by myself, but Gray’s decision says nothing of this argument. That’s a problem.

Here we have industry standards being given total prominence over the policy decision of the town and that conflicts with the Supreme Court ruling. The remedy that Gray crafted - ordering the Town to issue the permits - is not reconcilable with standards of remedial precision.

Vann raises the issue of transit shelter ads. The purpose of the signs by-law is to limit the proliferation of structures in the streetscape. Oakville said why not use the existing structures of the transit shelters to have third party ads. Note that the law allows billboards only on vacant lots - the town wants to minimize structures and minimize visual impact.

JUDGE: How is this contract set up for shelters?

KUSSNER: The shelter contract is with the Town. The advertising on buses is via OT. There was a public process followed by the signing of the transit shelter contract.

JUDGE: [asks about bus ads]

KUSSNER: We are taking about “rolling spectaculars.” buses completely covered in ads. The distinction is that they aren’t a full time fixture of the landscape like billboards. They are temporary.The thinking is that the shelters are providing a public good; offsetting the cost of delivering a public service with ads. None of these considerations applied to Vann’s signs. It is apples to oranges to compare the transit shelter ads to Vann’s boards

[Oakville submits that Vann didn't participate in the public consultations]My friend submits that the Town has the onus to consult with Vann during the public process that proceeded the by-law. The record demonstrates that Vann did not participate in the process. Nobody in the sign industry objected to the by-law. Vann simply submitted a perfunctory letter at the end of the process complaining that Oakville did not take the 52 sign locations that Vann had picked out into consideration.

In effect Vann says that the town has a specific obligation to consult directly with Vann while in fact the Town has many competing interests it must balance.The law allows billboards in the E2 zone. Out of the industrial zones, T1, E1 and E2, E2 actually allows the broadest land uses. The heavier industrial operations like the Ford plant are in the E2 zone.

JUDGE: Vann has 52 sites where it wants to build a sign. The court ordered Oakville to issue permits for 21. Out of the remaining 31 where are they?

KUSSNER: Spread around. One in open space, in commercial zones.

The town has something called “Prestige Industrial” where it wants a higher esthetic.

JUDGE: [law only allows billboard in vacant lots] Is there any evidence as to how many vacant lots there are in the E2 zone?

KUSSNER: Nothing on the record.

JUDGE: Do I read this correctly… At the end of the day all this by-law has done is permit nine billboards. We go from 0 under the old law that was struck down to nine of 80 square feet.

KUSSNER: Yes

JUDGE: So we go from 0 to 9 and the entire outdoor advertising industry will compete to put up these 9 signs in Oakville?

[note: these 9 sites are in completely unwanted locations so nobody is competing for them.]

KUSSNER: Yes. 9 is not an outlandishly small number. There are other municipalities like Aurora and Newmarket that ban them entirely so the 9 number is within the spectrum. Richmond Hill has a cap of 6 billboards. Viewed in that context 9 is not an outlandish number. Oakville has pressing and substantial objectives.In Markham, billboards are allowed only on vacant lots.

JUDGE: In Newmaket and Aurora and Richmond Hill there were no challeges to those by-laws right? So we could have a different result if there were challenged. [What?]

KUSSNER: Possibly. But if you look at Nichol Township, the court ruled that zero billboards was appropriate.

JUDGE: In Richmond Hill, on Yonge Street they would have a difficult time keeping billboards out, no?

KUSSNER: Possibly.Section 99 of the Municipal Act mandates that any new by-law respecting signs grandfathers in existing legal signs. So if you accept Vann’s position that the by-law is unconstitutional you should strike down the law without ordering the town to issue these 21 permits. The town should be entitled to start anew with a “clean slate” unencumbered by grandfathered positions.

[Originally Judge Gray issued an order to issue permits for 11 signs; it was later discovered that additional signs were in the E2 zone, so they judge's order represented 21 signs].

Judge Gray said that his decision stands whether it represents 21 signs or 11 signs. This violates the doctrine of remedial precision. We don’t even know what subsections of the by-law are violated by each sign.

[15 minute break]

KUSSNER: The town solicitor advises me that the bus shelter contract expires this year. The town could renew it, or it could not.

I would like to talk about the contextual approach. I spoke of two factors in my factum: #1 The need for a deferential approach to decisions of elected Councils and #2 The need for a contextual approach to the type of expression Vann seeks to convey.This is not Vann’s right to commercial expression at stake here but the expression of advertisers who would advertise on Vann’s signs.

We know from the Rendl affidavit that most of the users of these signs would be national or regional companies. The proliferation of other media allows this kind of expression and we know that outdoor advertising represents a very small part of the mediascape. While outdoor advertising is declining, lots of municipalities are bringing in restrictions on billboards, other media is growing, such as the internet. This media can be used to advertise the same things that can be seen on the signs Vann seeks to build.

In addition, transit shelters and buses can be used to convey these messages.In ordering Oakville to issue the permit, what we have is a “one strike and you’re out” system of municipal law. Oakville should be allowed to re-write the law if it is found to be unconstitutional.

JUDGE: Is there evidence that Oakville used the least restrictive means to achieve its objectives?

KUSSNER: When a court is scrutinizing a policy decision of an elected council, the court shall not question the precise point at which the decision is drawn.In terms of the minimal impairment test, we are talking about a series of criteria that other municipalities have adopted. Ottawa, Barrie have similar setback requirements. We have provisions and setbacks that these other municipalities have. In Ottawa, billboard permits are good for only 5 years, in Oakville the permits are good forever.

JUDGE: How are these other municipalities relevant if this is a “test case?”

KUSSNER: Courts recognize that democratically elected bodies has to answer to a range of interests. Does the Town’s restrictions fall within an acceptable range? The other by-laws show that it does. Courts have found that complete prohibition meets minimal impairment in some cases. In the Vancouver case [an illegal Titan Outdoor roof sign] they completely banned roof signs. Court of Appeal found the ban to meet minimal impairment tests. Court said that roof signs are constructed for commercial expression. They don’t achieve the same political expression as posters and handbills.

Gray took a sledgehammer approach to the by-law. He struck down the entire by-law when only select parts of it were under attack. He then ordered Oakville to issue permits based on one particular criteria. This logic is internally inconsistent.

If the by-law has to be re-written, the Town should be permitted to begin with a “clean slate” unencumbered with 21 grandfathered locations.

[Lunch break. Law Society restaurant highly, highly recommended. John Crossingham for Vann makes his case.]

CROSSINGHAM: I want to talk about 3 things. #1 Why the law fails the proportional and minimal impairment tests #2 The problems in dealing with the Town #3 Why the remedy should be upheldThe town fully understands that circulation and visibility are essential to effective third party advertising. However, there is no evidence that the town took circulation or visibility into account when writing their by-law.

JUDGE: The industry says circulation and visibility are important. But where does it say in law that you have to meet industry standards?

CROSS: To communicate you have to be able to reach people.

JUDGE: If you are standing at a corner and saying the earth will end, the Town of Oakville should give you a microphone? Where do I get circulation and visibility in the law? Where does it say that unless you have circulation you have a charter breach?

CROSS: Oakville acknowledges that unless you have circulation you can’t communicate effectively.

JUDGE: Are these criteria from the Canadian Outdoor Advertising Association?

CROSS: COMB, Canadian Outdoor Measurement Bureau, rates signs. They establish criteria.

JUDGE: Your criteria sound like they come straight out of COMB

CROSS: Oakville did not consider the need to effective communication at all. This is why the by-law does not meet minimal impairment. This is a question of fact not law.

JUDGE: If this is a fact, not law, where do I find this? Is it in the lower court decision?

CROSS: It is in the affidavits. [Crossingham points out exactly where. Judges read it.]

JUDGE: But the affidavit doesn’t talk about criteria. It’s just a general statement. You say the municipality did not consider the criteria of the industry, where is the evidence?

CROSS: The onus is on Oakville to justify the impairment.

JUDGE: If they don’t satisfy the industry, that’s one thing. But there was a public consultation. All you did in terms of consultation was write a letter that says we have 51 locations and you should deal with the 51 locations.

CROSS: But in the public consultation process they didn’t discuss setbacks at all. It is clear that Oakville didn’t look at industry standards.

JUDGE: My problem is with the 21 signs. What you say would apply to Nichol [where the total ban on billboards was upheld] as well but they have none.

CROSS: The municipality didn’t go through the balancing process.

JUDGE: Why? How do we know balancing hasn’t been met?

CROSS: They have to prove it. My expert, Paznar, says Vann has only one economical site under this by-law.

JUDGE: He says one site. Is there any evidence about the 2nd site? Would a second site become available if there was a modest change in the by-law? Is there any evidence that there was a mean spirited exclusion of Vann’s sites?

CROSS: The criteria that were circulated for public consultation has no nuts and bolts. No setback talk. They were just nebulous concepts.

JUDGE: But it is almost a penetrating glance at the obvious that you will have setback requirements.

CROSS: First party signs have different setback requirements than third party signs. Yet, they do the same thing.

JUDGE: Is there evidence that they do the same thing? They have similarities but they have different functions.

CROSS: They do similar things.

JUDGE: You say the law only leaves you with one location, but aren’t you reverse-engineering this? Aren’t you saying that there is no minimal impairment because you have no locations rather than saying that there is no minimal impairment because of the setback rules? Say I give you a residential setback 300 Metres, and I plug that into the map, and you get zero signs?

CROSS: Look at the intention of the by-law. It only allows signs on vacant land. Look at the way the by-law works - these lands will be developed and the by-law requires the signs to be removed once the lots get developed. the mid-to-long term effect is a de facto ban. That shows the intent is to ban billboards. The by-law was designed so the townspeople can avoid seeing the signs. Freedom of expression was not considered a factor when the law was written. [He points to something in report written by Martin Rendl, Oakville's sign consultant]

JUDGE: Who is Martin Rendl? [These judges haven't read most of the documents before them; apparently that's the way it works. They just read the factums before hearings. Nevertheless, the factums mention Rendl about 15 times so this question is telling.]

CROSS: The expert for Oakville

JUDGE: [looking at the Rendl report] The 4th paragraph talks about circulation and visibility.

CROSS: Exactly, so we know that the town understands that.

JUDGE: Your expert says one site is economical? Where is that?

CROSS: [Gives paragraph of Paznar affidavit. Judges appear to read the affidavit for about 45 seconds, a long silence]. On the issue of whether the combination of factors creates a de facto ban, I point to Buchannan v. London (CarswellOnt 5374). My point is that because the signs have to be on a vacant lot, those lots will be re-developed. They explicitly say they want people to be able to avoid looking at the signs.

JUDGE: No they aren’t saying that. They are saying that they want people to not see a big ad for a car when they walk out of their home.

CROSS: You can do that if you live beside a transit shelter.

JUDGE: But you are challenging the 200 metre residential setback.

CROSS: But look at the shape of the industrial area in Oakville. It snakes through the town, through the industrial areas. In other towns the 200M setback would allow signs but not in Oakville.

My client is criticized for not applying for minor variances but the staff report that supported the sign by-law said that locations for third party signs should be determined in the by-law itself not by variance applications.

JUDGE: Oakville is required by this judgment to grant sign permits in the E2 zone. They can’t refuse based on setback. Your client can therefore build right up to the lot line? All the 21 signs can be built up to the lot line?

CROSS: My client is respecting setback. Oakville has the site plans for each of the locations. Gray crafted a remedy that provided relief to Vann without creating a situation where you have out-of-control signage.

JUDGE: Going back to Scachter v. Canada I’m not sure how that case helps you. You’re not talking about Vann’s rights to free speech, you’re talking about his customer’s rights.

CROSS: That was raised in the previous proceedings and rejected. I am talking on behalf of Vann right now and I have freedom of expression.

JUDGE: Was there any evidence of what the demand was for billboards in Oakville?

CROSS: My client’s base is local businesses. As the community grows, the ability of a business to attract customers by word of mouth diminishes.

JUDGE: Local radio?

CROSS: How many stations are there on the dial? And what are the odds of you listening to a local Oakville station? Print media is the same. How do you get your message out?

JUDGE: Bus shelters!

CROSS: The shelters existed during the previous proceeding and were dealt with. That by-law was struck down. Where the evidence is taking you is that the municipality wants to ban signs on private land. They have not afforded the same protections on public land.Their argument is that the transit shelter is not a new structure in the streetscape but the by-law also bans billboard wall signs. This is pure hypocrisy.

JUDGE: How about these “prestige industrial” zones?

CROSS: We’re not in them. E2 is not prestige industrial.

JUDGE: Do you have a position on each of the individual restrictions on billboards?

CROSS: Section 25 of our factum.[The Town now gets a rebuttal]

KUSSNER: I’ll take 10 minutes. We have no dispute that visibility and circulation are important. Problem is according to the Paznar affidavit he states that in order for a sign that is 80 square feet to meet his visibility standards, it must be placed closer to the roadway than an industry standard 200 square feet. This would amount to giving with one hand and taking with another because the Supreme Court said Oakville has the right to limit the signs to 80 square feet. We submit that the industry must accept the lower standard. Paznar’s analytics are flawed because they don’t take into account what Oakville gained at the Supreme Court. In fact I asked Pazner point blank during cross examination if he was compensating for the non-industry standard size.

JUDGE: Where was that?

KUSSNER: Tab 18, Page 379. [Kussner then reads from the Paznar affidavit where Paznar says he compensated for the lower size]

[The last answer "A. Yes" is given by Paznar.] That is the underling approach that is infused in the Paznar analysis. It is flawed because it doesn’t take into account the Supreme Court verdict in the earlier proceeding.Regarding participation in the consultation. Other sign companies participated. Nobody saw fit to make objections. Vann never objected and said we don’t like the setbacks. All Vann said was we have these locations and you should build your by-law around our locations.Vann’s interest is a financial one. There is no evidence that the public is hampered if the locations are not granted.

JUDGE: How about impairment? Where is the evidence of minimal impairment?

KUSSNER: You will find that the town was mindful of this. Nobody said what about my rights to be minimally impaired during the consultation. You will also find in the Final Staff Report that the setbacks were listed and Vann had the ability to comment on all the setback requirements.

CROSSINGHAM: My friend said a factual inaccuracy. The by-law process didn’t have specific setback requirements listed. The setback requirements only appeared when the by-law was presented to committee, and by then it was way to late to do anything.

KUSSNER: The proposed by-law was provided to Vann before the meeting of the committee.

[They discuss costs]

KIM MULLIN FOR OAKVILLE: We have a bill of costs at $24,000 for the appeal. If only part of our appeal is granted, and the billboard regulations are struck down but the rest of the by-law is upheld, there should be no costs to either party.

CROSSINGHAM: I have never challenged the rest of the by-law. If only the billboard regulations are struck down, there should be a costs award.

MULLIN: Actually his factum states: “An order that the appeal be dismissed.” Today is the first day he says the rest of the by-law can stay.[Crossingham has appeal costs that are 3/4 of Oakville]

CROSSINGHAM: I submit that the appeal costs should be the same for both parties.

JUDGE: But the appellant has a more difficult job. They have the onus of showing the lower court made an error.

[Judges reserve decision, say they have lots of other cases, may take a while, but they say you'll hear from them when they make the decision.]