Executive Summary: Key Legal and Evidentiary Issues

• Validity and reasonableness of the municipality’s decision to cancel previously approved PIIA and amended PIIA for the developers’ project after non-compliance with imposed conditions.
• Extent to which procedural fairness was respected when Lac-Brome council adopted the May 2025 resolution annulling the PIIA approvals without a more specific prior notice.
• Interpretation and effect of the express clause in the 2024 PIIA resolution allowing the council to cancel the approval if the owner failed to meet listed conditions or any municipal regulation.
• Legality and opposability of the interim control resolution and the Règlement de contrôle intérimaire (RCI) adopted in 2025, including compliance with the powers and procedures under the Loi sur l’aménagement et l’urbanisme.
• Allegations that the RCI and related measures were an abusive, bad-faith use of municipal regulatory power amounting to an expropriation-type interference with the developers’ acquired rights.
• Burden on the developers to prove illegality, bad faith or arbitrariness sufficient to overturn municipal decisions that benefit from presumptions of validity and good faith, and whether that burden was met.

Background and development project

The dispute arises from a large multi-residential development in Lac-Brome known as “Les jardins de Lac-Brome,” undertaken by Société de développement United ltée (SDU) and a related company, 9471-0712 Québec inc. The developers planned a project of ten buildings, each with eight dwelling units, on the territory of the Ville de Lac-Brome. To proceed, they required and obtained municipal approvals in the form of Plans d’implantation et d’intégration architecturale (PIIA), a planning tool provided for by the Loi sur l’aménagement et l’urbanisme (L.A.U.). In July 2022, the municipal council adopted Resolution 2022-07-234 approving the initial PIIA application filed by SDU for the ten-building project. As the first building was constructed, changes were made to its exterior appearance. SDU therefore sought an amended PIIA in 2024 to reflect these architectural modifications. In July 2024, the council adopted Resolution 2024-07-195 approving the amended PIIA, still covering ten buildings of eight units each. This approval came with additional and precise conditions that the developers accepted.

Conditions attached to the amended PIIA

The 2024 resolution imposed several key obligations on the developers. First, all plans and drawings for the project had to bear the seal of an architect and be approved by the municipality’s urban planning department, at least for the first building constructed. The developers also had to notify the department of the completion date of construction of that first building so that the municipality could inspect it and confirm its conformity with the approved and architect-sealed plans. A further requirement was that construction of the first three buildings of the project be completed by 31 December 2025 in accordance with the approved plans and drawings, with municipal inspections to verify compliance. There were also conditions related to the vegetative landscaping plan for the first building. To secure performance, the resolution required the developers to provide financial guarantees in the form of sureties of $50,000 and $10,000. Additionally, the municipality’s written approval for connecting the first building to the municipal water and sewer systems was made conditional on submission of plans to the urban planning department that were certified under an architect’s seal. Crucially, the resolution expressly reserved to the council the right to cancel the PIIA approval if the owner failed to comply with the listed conditions or any applicable municipal by-law. This cancellation clause later became central to the legality of the municipality’s decision to revoke both the original and amended PIIA.

Non-compliance by the developers and cancellation of the PIIA

Despite repeated communications from Lac-Brome officials, including the Director of the Clerk’s Office and Legal Affairs, the developers did not fulfil the essential conditions imposed in July 2024. They never submitted architect-sealed plans or drawings, nor did they clearly declare completion of the first building so that it could be inspected for conformity. The obligation to complete the first three buildings by the end of 2025 was not on track to be met, and by May 2025 it was evident that the deadline would not be respected. The required financial guarantees of $50,000 and $10,000 were also never provided, despite numerous promises. At the time of the hearing in March 2026, the developers still had not produced the financial security or the architect-certified plans, and no concrete offer to cure these omissions had been made, even though they were asking the court to annul municipal resolutions so they could continue the project. In response, and relying on the explicit cancellation clause in the 2024 resolution, the municipal council adopted Resolution 2025-05-143 in May 2025. This new resolution annulled the 2022 and 2024 resolutions approving the original and amended PIIA. The city then notified the developers that they were no longer authorized to continue construction of their project.

Adoption of the interim control resolution and RCI

Later in 2025, Lac-Brome decided to undertake a broader urban planning review focused particularly on its downtown area, in light of housing accessibility and heritage preservation concerns identified in its housing policy and strategic planning documents. To manage development while this review was underway, the council chose to use the interim control regime under the L.A.U. In August 2025, it adopted an interim control resolution setting out the intent to establish an interim control by-law (Règlement de contrôle intérimaire, RCI) in connection with a revision of its urban plan. In September 2025, an avis de motion was passed for the future adoption of the RCI, and on 1 October 2025 the council adopted the RCI itself. The regulation entered into force on 23 October 2025 and was of limited duration, valid for one year. Its preamble referred specifically to the policy concerns of housing accessibility and heritage preservation that the city wished to address through its planning revision. The city maintained that the RCI and the preceding resolution were adopted in compliance with the procedural framework of the L.A.U., particularly article 112.6, and that no approval from the regional county municipality (MRC) was required in the circumstances—a view confirmed by the MRC of Brome-Missisquoi.

Developers’ claims and procedural posture

The developers brought a remodified originating application dated 20 November 2025. They asked the Superior Court to annul the May 2025 resolution cancelling the PIIA and to declare that the earlier 2022 and 2024 resolutions approving the PIIA and amended PIIA were revived. They also sought declarations of nullity—or at least inopposability—of the August 2025 interim control resolution and the October 2025 RCI, and claimed more than $20 million in damages. The judgment under review addresses only the public-law and declaratory aspects: the judicial review of the municipal resolutions, the judgment declaratory claims, the request for nullity of the RCI, and a mandamus remedy. The court explicitly holds the damages component in abeyance; it is not adjudicated in this decision. The developers argued that the municipality had irregularly and unlawfully cancelled the PIIA conditions and then adopted the RCI in an abusive, bad-faith manner aimed solely at blocking their already approved development. They claimed that the shift to revising the urban plan and adopting interim control measures was merely a pretext to stop their project “in catastrophe” without any legitimate planning justification. They further contended that the city’s actions, including retroactive cancellation of the 2022 and 2024 resolutions and the adoption of the interim control resolution and RCI, amounted to a serious infringement of their acquired rights, effectively freezing the project, impairing their ability to sell, finance or continue development, and approximating an expropriation without compensation. They also took the position that the RCI was invalid because Lac-Brome had not obtained a certificate of conformity from the MRC.

Municipality’s defence and legal framework

Lac-Brome replied that it had acted within the powers conferred by the L.A.U. Articles 111 and 112.2 and following permit a municipality that intends to adopt or revise its urban plan to pass an interim control resolution and an RCI to manage development while the new planning framework is prepared. The city argued that the RCI fell squarely within the range of reasonable regulatory measures contemplated by this scheme, addressing genuine urban planning concerns about the downtown area, housing accessibility, heritage, and servicing infrastructure. The municipality stressed that it is presumed to act in good faith and for the public interest, and that municipal by-laws enjoy a presumption of validity. The burden therefore rested on the developers to prove illegality, bad faith, or arbitrariness sufficient to displace those presumptions. On the PIIA cancellation, Lac-Brome characterized its May 2025 resolution as a reasonable exercise of its discretion, justified by the developers’ persistent failure to meet clear conditions they had accepted in July 2024, including the architect-sealed plans and financial guarantees. Regarding the RCI, the city argued that the adoption process complied with statutory requirements, was adequately motivated in its preamble, and did not require MRC approval as alleged by the developers.

Standard of review and procedural fairness

Both parties accepted that the applicable standard of review for the municipal decisions was reasonableness. The developers, however, contended that with respect to procedural fairness—whether the city respected “équité procédurale” when cancelling the PIIA—the court should not show deference and should instead assess correctness. Lac-Brome maintained that cancelling the PIIA did not trigger heightened procedural fairness obligations and, in any event, the May 2025 decision was not final in the sense that the developers could still have filed a new application that complied with the conditions relating to architect-sealed plans and financial guarantees. The Superior Court confirmed that, following the Supreme Court’s guidance in cases such as Catalyst Paper and Vavilov, the overarching standard was reasonableness. Its task was to consider whether the municipal decisions were within the range of possible, acceptable outcomes, in light of the process leading to their adoption and the wide variety of factors a municipal council may legitimately consider. On procedural fairness, the court found no evidence of a serious breach. While acknowledging that Lac-Brome could have provided a more specific prior notice before adopting Resolution 2025-05-143 cancelling the PIIA, the judge held that the city’s approach did not transgress fundamental fairness standards and was both reasonable and, in the court’s view, correct.

Assessment of the PIIA cancellation

The judge placed considerable weight on the explicit text of the 2024 amended PIIA resolution, which clearly set out the obligations of the developers, reserved the city’s right to cancel the approval for non-compliance, and was adopted without contemporaneous objection or challenge by the developers. The obligations were tied to legitimate municipal planning and enforcement concerns, and there was no indication they had been imposed arbitrarily or capriciously. The evidence showed sustained communication from municipal representatives over more than ten months, repeated reminders about the outstanding conditions, and repeated promises from the developers that were never honoured. In that context, the court characterized the developers’ conduct as lacking seriousness and marked by lax management of their project. Given the cancellation clause in the 2024 resolution and the complete failure to meet the central conditions—architect-sealed plans and financial guarantees—the council’s decision in May 2025 to invoke that clause and annul both PIIA approvals was viewed as predictable, justified and within its discretionary powers. The judge concluded that the developers had not met their burden of showing that the cancellation decision was unreasonable. The process was not tainted by a serious procedural unfairness, and the decision fell well within the spectrum of outcomes a reasonable municipal council could adopt in such circumstances.

Validity and opposability of the interim control measures

Turning to the interim control resolution and the RCI, the court examined both the procedural steps and the substantive planning objectives put forward by Lac-Brome. The city had adopted the resolution and regulation within the statutory framework of the L.A.U., preceded their adoption with appropriate notices, and articulated in the preambles specific public-interest motives relating to housing and heritage in the municipal centre. The judge accepted that the RCI reflected a genuine urban planning initiative to revise the city’s urban plan and manage development while that revision proceeded, especially in the downtown sector. The fact that this process coincided in time with the end of the PIIA approvals for the developers’ project did not, in itself, demonstrate that the measures were targeted only at them or that they constituted an abuse. The court found the city’s explanations credible and reasonable and rejected the argument that the RCI was ultra vires or invalid for lack of an MRC certificate of conformity, noting that the MRC itself had confirmed that no such approval was required in the circumstances. More broadly, the judge reaffirmed that a municipal council must pursue the collective interest of its citizens, and that tension between that collective interest and the interests of a particular developer does not by itself prove bad faith or abuse of power.

Alleged expropriation-like effect and acquired rights

The developers contended that the combined effect of cancelling the PIIA and imposing the RCI froze their project, undermined their acquired rights and amounted, in substance, to an expropriation without compensation. They pointed to the financial and operational consequences: difficulties in selling, financing and advancing the development, and the inability to plan further buildings on their land. The court recognized that the measures had serious negative consequences for the developers, but emphasized that these consequences were largely traceable to their own failure to comply with the conditions they had accepted. The judge considered that the developers had effectively engineered their own predicament by not providing the required plans, guarantees, and progress on construction before the PIIA approvals were cancelled. The coincidence between that cancellation and the launch of the broader planning review did not transform the city’s actions into an expropriatory scheme, particularly in light of the public-interest planning objectives animating the RCI.

Outcome and financial consequences

In conclusion, the Superior Court held that the developers’ criticisms of Lac-Brome’s conduct were unfounded. The city’s decisions to cancel the PIIA and to adopt the interim control resolution and RCI were found to be within its legislative powers, taken through processes free from serious procedural unfairness, and supported by reasonable planning justifications. The court therefore rejected all claims for judicial review, declaratory relief, nullity of the RCI and mandamus. The Ville de Lac-Brome is the successful party in this judgment. The court ordered that all such claims be dismissed with costs against the developers, but it did not quantify the costs, and the separate claim for more than $20 million in damages was expressly left unresolved in this decision. As a result, while the municipality prevailed entirely on the public-law and regulatory issues, the total monetary amount actually awarded in its favour in this judgment cannot be determined, beyond the fact that it is entitled to its legal costs in an unspecified amount.