Development permit cancelled without authority not cured by de novo hearing

Limiting appeals board to present matters would perpetuate previous error by development branch

Development permit cancelled without authority not cured by de novo hearing
Edmonton Zoning Bylaws require that cannabis retail stores be at least 200 meters apart from each other

The Alberta Court of Appeal has ruled that the cancellation of a development permit for a cannabis retail store without authority to do so was not cured by a de novo hearing of the Subdivision and Development Appeal Board (SDAB).

In Mahal & Sons Inc v Edmonton (City of), 2022 ABCA 22, Mahal & Sons inquired with the city’s Development and Zoning Services Branch (Development Branch) in January 2020 about procuring a permit for cannabis retail sales. Mahal was advised that the application would be automatically refused because the site of an existing cannabis store development permit from 2019 was within 200 meters of the proposed site. Since Edmonton zoning bylaws prohibited cannabis stores to be within 200 meters of each other, Mahal would have to wait for the permit to expire on April 24, 2020.

In March 2020, the Development Branch received a similar application from Indergit Basi and similarly advised that the application would be automatically refused. Around this time, however, the Development Branch knew that the site for the 2019 permit was not going to be used for cannabis retail and on March 16, they purported to cancel the 2019 permit.

Mahal inquired again on April 15 and was told that the 2019 permit was still valid. But the next day, the Development Branch issued a development permit for cannabis retail sales to Basi.

On April 21, Mahal once again contacted the Development Branch but was advised that a permit was already issued to Basi. Since Basi’s site was also within 200 meters, Mahal’s application would once again be rejected.

Mahal appealed to the SDAB. They argued that the Development Branch had no jurisdiction to cancel the 2019 permit and therefore lacked authority to issue the Basi permit. However, instead of addressing the issues raised, the SDAB ruled that the appeal was a de novo hearing and considered only matters existing at the time of the appeal hearing. Since the 2019 development permit had already expired by the date of the hearing, the SDAB ruled that there was no impediment in the issuance of the Basi permit and dismissed Mahal’s appeal.

On appeal, Mahal argued that the SDAB misapprehended the nature of a de novo hearing.

The appeal court agreed.

This case presents an exception to the rule that the SDAB’s authority to decide appeals de novo meant that it was not required to review the development authority’s decision for error, said the court. Here, the development officer had no authority to cancel the 2019 development permit and this error was not cured by the de novo hearing. Rather, it perpetuated the error, said the court.

The appeal court would have ordinarily remitted the decision back to the SDAB for a new hearing. However, based on the unique circumstances of the case, the appeal court granted the unusual remedy of cancelling the Basi development permit, notwithstanding Basi’s liberty to reapply for it.

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