The future of city planning fights in Ontario is to be decided by a panel of three Toronto judges, with cities fearing the return of the ways of the controversial Ontario Municipal Board.

Last week, the Divisional Court heard arguments from the City of Toronto, a development group and others about how a long-controversial appeals process for proposed developments should be conducted going forward.

After a day and a half of arguments, the panel is expected to provide direction ahead of a major appeal being heard at the end of May that could determine whether the city’s plans for a park over the downtown rail corridor could be disrupted by development.

In 2017, the province dramatically changed how land use disputes — like those over whether a skyscraper can be built next to a school or townhomes next to a noisy rail yard — are dealt with, enacting new legislation that got rid of the controversial Ontario Municipal Board (OMB).

That provincial tribunal, with appointed adjudicators who were ultimately responsible for what got built where in Toronto and elsewhere, was replaced with a new one, the Local Planning Appeal Tribunal, and new rules. The new rules were meant to show more deference to the decisions of elected councils like Toronto’s, who approve or reject development applications in the first place.

But a Toronto case where a consortium of developers that wants to build towers over the rail corridor is appealing the city’s plans to build a Rail Deck Park has raised questions about how the new process should work. The case — one of the first major appeals before the new tribunal — prompted the tribunal itself to ask the Divisional Court to make a determination on several key issues.

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The answer to those questions will determine whether the new tribunal will operate as the city believed the previous Liberal government intended — to, at a first hearing simply review the decision already made by the municipality — or whether it will allow new evidence at that hearing, which would allow the old OMB process that was seen to often favour developers looking to relitigate their applications, creep in.

The city argued last week that the new rules were intended to prevent new evidence from being introduced at the first hearing.

Allowing new evidence would be “back to the old days” and what were called “de novo” or “as new” hearings, argued city lawyer Brendan O’Callaghan in a second-floor Osgoode Hall courtroom last week.

At the first hearing, he said, the role of the tribunal is only to review whether the decision made by council does or does not adhere to various provincial policies in place — which O’Callaghan said should be “based upon what council had before it when it made its decision.”

Under the old OMB system, anyone appealing a decision of council could say they simply didn’t agree with that decision and have a hearing that considered the application from scratch, allowing appointed adjudicators to decide whether a development was good planning as though the municipal decision had never been made. Adjudicators could either allow the development, deny it, or permit in some form they prescribed.

Under the new rules, the appeal is limited to whether the decision of a council adhered to various provincial policies in place — a significant change. At a first hearing, the rules say that if the tribunal members disagree with the city’s decision, they can only send it back to the city for review.

O’Callaghan said it would be “prejudicial” and “illogical” to tell the city it got a decision wrong based on evidence it had never seen.

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A second hearing, if required, allows for new evidence and is essentially a “de novo” hearing like under the OMB.

If new evidence was also allowed at the first hearing — including through cross-examination of witnesses — O’Callaghan asked the court, “then what is the purpose of that second hearing?”

Lia Magi, a lawyer for the City of Mississauga, which is intervening in the case, spelled out that the tribunal would already have everything it needed at the first hearing to review a council decision, with requirements for municipalities to forward an extensive record of what preceded a decision on a development application.

But lawyer Ira Kagan, representing Craft Acquisitions Corp. and P.I.T.S. Development Inc., argued the ambiguity of the legislation allows for witnesses to be cross-examined, including on issues not raised by the tribunal.

That’s because, he and others argued, the legislation does not specifically preclude cross-examination.

Kagan noted the appeals process has changed in “dramatic” ways, limiting the scope of the first hearing, but not in all the ways, he said, the city had hoped.

He argued the large volume of records provided to the tribunal make the task of reviewing and understanding whether a municipality’s decision adheres to provincial policy “impossible.”

The case that ended up before the courts stems from an appeal about the city’s plans to build a decked park between Bathurst St. and Blue Jays Way. The plans clash with a later application by the development group for an eight-tower development.

In 2017, council voted to designate the space over the rail corridor as a public park, which would prevent any development there. The developers, who claim to already hold some air rights and have an agreement to purchase the others over the corridor, appealed that decision. Council also rejected the developer’s application, which was also appealed.

The appeal over the city’s decision to designate the space for use as a public park is what triggered the questions to the Divisional Court.

That appeal is scheduled to be heard by the LPAT starting May 27. The panel of judges said it was aware of the time constraint and reserved its judgment to a later date.