Growing Without Losing Acquired Rights: To What Extent Can a Business Expand Its Activities Under Zoning Laws?

Acquired Rights: Intensification vs. Extension of a Non-Conforming Use

This case, in which the Municipality of Laurierville (the “Municipality”) opposed Denis Côté and Les Véhicules JC Inc. (“Véhicules JC”), provides a concrete and current example of how the rules governing the intensification and extension of acquired zoning rights are applied, as well as how the courts define the actual use of a property.

In this case, the Municipality asked the court to order Denis Côté and Véhicules JC to cease all commercial use, other than the repair of motor vehicles, in the garage located on their property, to remove any stored items not intended for residential use, and to restore the premises to their original condition. The Municipality’s main complaint concerned the storage of vehicles on the lot owned by Denis Côté, where Véhicules JC operates.

The defendants contested the claim and, in a counterclaim, sought a ruling from the court that the repair of motor vehicles in the garage, the storage of vehicles in the backyard, and the storage of parts in the barn were protected by acquired rights.

The trial court ruled in favour of the defendants on these claims. The Court of Appeal upheld the trial court’s judgment and dismissed the Municipality’s appeal. This case addresses two important principles regarding acquired rights: first, the distinction between the intensification and the extension of a non-conforming use; and second, the rule that the use of a property is determined by the activities actually carried out on the site rather than by the purpose of the business using it.

The Background: The Growing Automotive Repair Business

The case dates back to 1985, when Denis Côté acquired a property located in an agricultural zone that was then being used as a flower shop. As early as 1988, Denis Côté began operating an auto repair business in the garage and stored vehicles on the property, since he used parts from those vehicles for repairs. On February 12, 1990, the Municipality’s first zoning bylaw was adopted. As of that date, automotive repair businesses and the sale of used vehicles were not permitted in the zone; the Municipality acknowledged, however, that the mechanical repair work carried out in the garage constituted a non-conforming use protected by acquired rights, since these activities began before the bylaw took effect.

In May 2013, the automotive repair business operated on the property was taken over by Jimmy Côté, the son of Denis Côté, who founded Véhicules JC. In addition to mechanical repairs, Véhicules JC purchased vehicles in bulk; about 60 vehicles were repaired each month on the property, and business activity increased significantly between May 2013 and 2016.

In February 2022, the Municipality filed a lawsuit under the ALUPD to put an end to certain uses on the property, primarily the storage of vehicles; the defendants argued, however, that the repair of motor vehicles in the garage, the storage of vehicles in the backyard, and the storage of parts in the barn were protected by acquired rights. The trial court ruled in their favour on these claims. The Court of Appeal upheld the judgment and denied the Municipality’s appeal. The central question: intensification or expansion?

The Municipality argued that the scale of Véhicules JC’s operations since 2013 exceeded what could be protected by acquired rights. Two distinct legal concepts come into play here: the intensification and the expansion of uses protected by acquired rights (Saint-Romuald [City] v. Olivier, 2001 SCC 57).

Intensification: When the Activity Gains Momentum

Case law has long recognized that the intensity of a use protected by acquired rights may increase; protection is lost only if the increase in intensity is so significant that the activity is no longer of the same nature, or if the nature of the use is altered to the point of making it completely different in terms of its effects on the community.

Expansion: When a Use Takes Up More Space

An expansion (or extension) refers primarily to the area occupied by the non-conforming use and is a concept distinct from a change in the intensity of a protected activity. Some zoning bylaws specifically address this possibility.

The Court of Appeal acknowledged that there was a terminological misunderstanding in the trial court’s reasoning between the intensification of a use and the expansion of its area, but it held that this confusion was not decisive, since the zoning bylaw in effect at the time specifically permitted a single expansion of the non-conforming use within the zone where it was being exercised, prior to the subsequent municipal bylaw entering into force, and without any further limitation on the area.

The Municipality argued that the expansion of the non-conforming use could not be done gradually and that a zoning amendment in 2017 had eliminated the right to extend it. The Court of Appeal concluded that, in this case, the expansion had been finalized before the 2017 bylaw took effect, as the evidence showed that the entire area of the property was already being used for vehicle storage as early as 1988.

Ultimately, the Court of Appeal found no error in the trial judge’s conclusion that the increase in outdoor storage was not so significant as to render it a different type of activity.

The Key Principle: The Actual Use of the Land, Not the Company’s Intended Purpose

The second major lesson from this case concerns the very manner in which a use is classified for zoning purposes. The Municipality argued that the activities carried out since 2013 should be classified as the wholesale sale of used vehicles—a non-protected use—rather than mechanical repair accompanied by incidental storage.

The Court of Appeal rejected this argument, citing previous decisions (Municipalité de Saint-Joseph-du-Lac v. Hamel, 2022 QCCA 247; Municipalité de Saint-Apollinaire v. 6669174 Canada inc., 2023 QCCA 30): Use protected by acquired rights is determined by the nature of the activities actually carried out on the site, not by the nature of the business operated there.

Applying this principle, the Court of Appeal confirmed that the storage of vehicles on the property was incidental to the operation of an auto repair shop and not to wholesale activities, since the City failed to demonstrate that lots of vehicles were on display for sale or that cars in inventory for sale were parked in the yard.

By arguing that Véhicules JC’s objective was wholesale sales rather than mechanical repairs, the Municipality erroneously focused on the nature of the business instead of examining the activities actually carried out on the property.

What Businesses Need to Know About Acquired Rights

This case highlights that a company’s growth and the protection of its acquired rights are not mutually exclusive, provided that the evolution of its activities remains true to their original nature. A rapidly growing business does not necessarily lose its acquired rights simply because it is expanding, but it must be able to demonstrate that this growth is consistent with the historical use of the land, without altering its nature, while complying with municipal bylaws regarding increases in land area.

Companies whose operations rely on non-conforming use protected by acquired rights therefore have every reason to rigorously document the evolution of their operations even before a municipal dispute arises.

Are you planning to modify, intensify or expand the activities carried out on a property that has acquired rights? If you have any questions regarding the protection of your acquired rights, the compliance of your activities with applicable zoning bylaws, or a municipal dispute, please contact Isabelle Landry.