On judicial review, a B.C. Court held that the District’s decision not to grant business licenses for short-term rentals accords with the relevant business license and zoning bylaws.

Administrative law – Decisions reviewed – Municipal councils – Municipalities – By-laws – Planning and zoning – Permits and licences – Judicial review — Compliance with legislation

Mailloux v. Tofino (District), [2018] BCJ No 6987, 2018 BCSC 2298, British Columbia Supreme Court, December 24, 2018, LA Loo J

The petitioners were townhouse owners in Tofino who rented out their units as short-term rentals. They applied for business licenses to operate their short term rentals in 2017 from the defendant, the Corporation of the District of Tofino (the “District”), a local government incorporated under the Community Charter, SBC 2003, c. 26.

The petitioners took the position that when the townhomes were built between 1998-2001, pursuant to the zoning bylaws in force at the time (the “1997 Zoning Bylaw”), and the terms of the restrictive covenant against the lands which were zoned RM2, the townhouse units could be rented out for more than one night but less than 30 nights. The petitioners argued that, notwithstanding amendments to the zoning bylaws which permits short-term rentals in some zones, but not in RM2, their short-term rentals are a lawful non-conforming use of the lands and that a business license is not required to operate their short-term rentals.

Upon receipt of the petitioners’ applications, the Business License Inspector determined that there was reasonable cause to refuse business licenses on the basis that a short-term business does not comply with the business license regulation bylaws or the 1997 Zoning Bylaw. The decision was upheld by the District Council on appeal because the short-term rental businesses did not comply with the current or prior zoning bylaws and because a lawful non-conforming use had not been established.

On judicial review, the Court considered whether the District Council, in making its decision, properly interpreted its own zoning bylaws and business license bylaws. The Court held that the decision should be reviewed on a standard of reasonableness.

The petitioners’ argument largely centered around interpretation of definitions in the 1997 Zoning Bylaw. The petitioners argued that the definition of “Dwelling” included a building occupied as a sleeping place, and did not contain any limitation or control on the duration of use as a sleeping place.

The Court accepted the District’s argument that the petitioners’ assessment of the definitions in the 1997 Zoning Bylaw does not take into account the definition of “Dwelling, Townhouse” which clearly applied to the properties in question and required occupation as the permanent home or residence of one family. The Court upheld the District Council’s decision and dismissed the petition.

This case was digested by JoAnne G. Barnum, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact JoAnne G. Barnum at jbarnum@harpergrey.com.

To stay current with the new case law and emerging legal issues in this area, subscribe here.