Annapolis Group Inc. v. Halifax Regional Municipality

Annapolis Group Inc. v. Halifax Regional Municipality
Collection
Supreme Court Judgments
Date
2022-10-21
Neutral citation
2022 SCC 36
Case number
39594
Judges
Wagner, Richard; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud
On appeal from
Nova Scotia
Subjects
Expropriation
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36
Appeal Heard: February 16, 2022 Judgment Rendered: October 21, 2022 Docket: 39594
Between:
Annapolis Group Inc. Appellant
and
Halifax Regional Municipality Respondent
- and -
Attorney General of Canada, Attorney General of Ontario, Attorney General of Nova Scotia, Attorney General of British Columbia, Canadian Constitution Foundation, Ontario Landowners Association, Canadian Home Builders’ Association and Ecojustice Canada Society Interveners
Coram: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
Joint Reasons for Judgment: (paras. 1 to 80)
Côté and Brown JJ. (Wagner C.J. and Moldaver and Rowe JJ. concurring)
Joint Dissenting Reasons: (paras. 81 to 153)
Kasirer and Jamal JJ. (Karakatsanis and Martin JJ. concurring)
Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.
Annapolis Group Inc. Appellant
v.
Halifax Regional Municipality Respondent
and
Attorney General of Canada,
Attorney General of Ontario,
Attorney General of Nova Scotia,
Attorney General of British Columbia,
Canadian Constitution Foundation,
Ontario Landowners Association,
Canadian Home Builders’ Association and
Ecojustice Canada Society Interveners
Indexed as: Annapolis Group Inc. v. Halifax Regional Municipality
2022 SCC 36
File No.: 39594.
2022: February 16; 2022: October 21.
Present: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
on appeal from the court of appeal for nova scotia
Expropriation — State regulation of land use — Constructive taking of private property by public authority — Land owner suing municipality and alleging that municipality’s regulatory measures have deprived it of all reasonable or economic uses of its land, resulting in constructive taking without compensation — Whether acquisition of beneficial interest in property under constructive taking test requires land to actually be taken from owner and acquired by public authority — Whether intention of public authority relevant to analysis of constructive taking claim.
Over time from the 1950s, Annapolis acquired 965 acres of land (the “Lands”) with the intention of eventually securing enhanced development rights and reselling it. In 2006, Halifax adopted a planning strategy to guide land development in the municipality, including the Lands, over a 25‑year period. The strategy reserved a portion of the Lands for possible future inclusion in a regional park. It also zoned the Lands as “Urban Settlement”, which denotes an area where urban forms of development may occur and as “Urban Reserve”, which identifies land that could be developed beyond the 25‑year horizon. These designations contemplate future service development, but for serviced development to occur on the Lands, Halifax must adopt a resolution authorizing it. Beginning in 2007, Annapolis made several attempts to develop the Lands. Ultimately, by resolution in 2016, Halifax refused to initiate the secondary planning process, and Annapolis sued, alleging a constructive taking, misfeasance in public office, and unjust enrichment. With respect to the constructive taking claim, Annapolis contends that Halifax’s regulatory measures have deprived it of all reasonable or economic uses of the Lands, resulting in a constructive taking without compensation.
Halifax sought summary dismissal of Annapolis’ constructive taking claim. The motion judge dismissed Halifax’s motion, finding that Annapolis’ constructive taking claim raised vast genuine issues of material fact requiring a trial. On appeal by Halifax, the Court of Appeal held that Annapolis’ constructive taking claim did not have a reasonable chance of successfully establishing, as required by Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227 (“CPR”), an acquisition by Halifax of a beneficial interest in the Lands or flowing from the Lands — which necessitated that the Lands actually be taken from Annapolis and acquired by Halifax — and the removal of all reasonable uses of the Lands. It was also of the view that Halifax’s intended use for the Lands was not relevant to the constructive taking analysis. The Court of Appeal struck the claim.
Held (Karakatsanis, Martin, Kasirer and Jamal JJ. dissenting): The appeal should be allowed and the order of the motion judge restored.
Per Wagner C.J. and Moldaver, Côté, Brown and Rowe JJ.: The Court of Appeal erred in holding that an “acquisition of a beneficial interest” under the constructive taking test established by the Court in CPR requires land to actually be taken from an owner and acquired by the state. A “beneficial interest” is to be broadly understood as an “advantage”; as such, the interest acquired by the state can fall short of an actual acquisition by the state. Further, the Court of Appeal erred in holding that evidence of the state’s intended use of the impugned land is irrelevant to a claim for constructive taking. There are genuine issues of material fact arising from Annapolis’ constructive taking claim to be tried. It should therefore be allowed to proceed to trial.
Constructive taking is the preferable term for expropriation through regulation as it more accurately captures the nature of the state action at issue and the effect on the landowner. A “taking” is a forcible acquisition by the Crown of privately owned property for public purposes. It may take the form of a constructive taking (effective appropriation of private property by a public authority exercising its regulatory powers), or a de jure taking (formal expropriation), by (in the case of land) taking title. Not every instance of regulating the use of property amounts to a constructive taking. Governments and municipalities holding delegated provincial regulatory authority validly regulate land in the public interest without effecting “takings”, properly understood. The line between a valid regulation and a constructive taking is crossed where the effect of the regulatory activity deprives a claimant of the use and enjoyment of its property in a substantial and unreasonable way, or effectively confiscates the property.
The test to show a constructive taking is that stated by CPR, properly understood. The test provides that the reviewing court must decide: (1) whether the public authority has acquired a beneficial interest in the property or flowing from it (i.e. an advantage); and (2) whether the state action has removed all reasonable uses of the property. The jurisprudence, upon which the CPR test was expressly stated as resting, supports an understanding of “beneficial interest” as concerned with the effect of a regulatory measure on the landowner, and not with whether a proprietary interest was actually acquired by the government. That same jurisprudence supports the view that “beneficial interest” refers not to actual acquisition of the equity that rests with the beneficial owner of property, connoting rights of use and enjoyment, but to an advantage flowing to the state. To require actual acquisition would collapse the distinction between constructive (de facto) and de jure takings — a distinction which CPR explicitly preserves. If a constructive taking requires an actual taking, then it is no longer constructive. Furthermore, interpreting “beneficial interest” broadly (as meaning a benefit or an advantage accruing to the state) ensures CPR’s coherence with previous jurisprudence, which did not understand “benefits” in the strict equitable sense of that term. CPR merely sought to affirm, and not alter, the law of constructive takings.
This interpretation is supported by the wording under the first part of the CPR test: “a beneficial interest in the property or flowing from it”. An interest flowing from the property affirms that a “beneficial interest” can be more broadly understood as an advantage, and need not be an actual acquisition. Such an interpretation gives effect to the Court’s acknowledgement of a common law right to compensation where the two‑part CPR test is satisfied. It accords with imperatives of justice and fairness, which underpin the Court’s assessment of expropriation claims, and remedies situations where cases do not neatly fit within the expropriation legislative framework. As the test focusses on effects and advantages, substance and not form is to prevail. A court deciding whether a regulatory measure effects a constructive taking must undertake a realistic appraisal of matters in the context of the specific case, including but not limited to (a) the nature of the government action, notice to the owner of the restrictions at the time the property was acquired, and whether the government measures restrict the uses of the property in a manner consistent with the owner’s reasonable expectations; (b) the nature of the land and its historical or current uses; and (c) the substance of the alleged advantage.
The public authority’s intention is not an element of the test for constructive taking at common law. The mischief addressed by the doctrine is one of advantages and effects, not that a public authority acted in bad faith or with an otherwise ulterior motive. However, intention can be relevant to the inquiry. The underlying objective pursued by a public authority may provide supporting evidence for a constructive expropriation claim, but it is neither necessary nor sufficient. The assessment of intent has proved to be helpful in distinguishing between mere regulations in the public interest and takings requiring compensation at common law. What ultimately matters, however, irrespective of matters of intent, is whether the state-imposed restrictions on the property conferred an advantage on the state that effectively amounts to a taking.
In the instant case, the motion judge’s legal conclusions that (1) a constructive taking need only have the effect of defeating the landowner’s reasonable use of land; and (2) the state’s intent may be relevant in assessing whether all reasonable uses of the land has been removed, were legally correct. The Court of Appeal did not identify any legal error or patent injustice that would justify interfering with the motion judge’s decision to dismiss Halifax’s summary judgment motion on the basis of the existing triable issues. Two disputed factual issues are particularly material to the CPR test. First, it is disputed whether Halifax is promoting the Lands as a public park; this is material because, if proven, it would tend to support Annapolis’ claim that Halifax acquired a beneficial interest in the Lands. Preserving a park in its natural state may constitute an advantage accruing to the state, thus satisfying the “acquisition” element of CPR. Second, it is disputed whether Halifax, by allegedly treating the Lands as a public park, has eliminated all uses of the Lands except service development, which is conditional upon the approval of Annapolis’ secondary planning applications. This is material because, if proven, it may arguably support Annapolis’ claim that it has lost all reasonable uses of its property. If Annapolis can prove at trial that Halifax is unlikely to ever grant a secondary planning approval, this is clearly material to its constructive taking claim, as all reasonable uses of the land may be shown to have been eliminated where a permit needed to make reasonable use of the land is refused, such that the state has effectively taken away all rights of ownership.
Per Karakatsanis, Martin, Kasirer and Jamal JJ. (dissenting): The appeal should be dismissed. There is disagreement with the majority’s proposed changes to the CPR precedent and with how the majority applies the law in the instant case. Partial summary judgment dismissing Annapolis’ de facto taking claim was properly granted as that claim has no real chance of success.
First, there is disagreement with the majority’s view that the first element of the CPR test, which requires “an acquisition of a beneficial interest in the property or flowing from it”, should be replaced with the much broader notion of an advantage, whether or not a proprietary interest was actually acquired by the government. Instead, the Court should retain the CPR test for a de facto taking, which insists that a proprietary interest be acquired. CPR and the authorities it cited show there is no de facto taking unless there is both acquisition of a beneficial interest in the property or flowing from it and a removal of all reasonable uses of the property. The interest must be proprietary — not merely an advantage — and the acquisition must correspond to the deprivation. The majority has provided no basis for the Court to depart from the acquisition requirement as framed in CPR. The majority does not suggest that such a departure from precedent is needed to keep the common law in step with the evolution of society, to clarify a legal principle, or to resolve any inconsistency in the law, which are some of the usual grounds justifying evolution of the common law. To the contrary, courts in common law Canada have applied the CPR test without difficulty, and no court has expressed concerns that the test is unworkable or unnecessarily complex. CPR is settled law and there is no reason to change it. Furthermore, the majority’s reformulation of the acquisition requirement and departure from CPR as precedent has significant ramifications. It dramatically expands the potential liability of municipalities engaged in land use regulation in the public interest and throws into question the settled law that a refusal to up‑zone (i.e., re‑zoning to enlarge the permissible uses of land) is not a de facto taking.
Second, there is disagreement with the majority’s view that a public authority’s intention is a material fact in a claim for a de facto taking. This is also an unwarranted departure from CPR and the Court’s prior jurisprudence. Intention is not an element of the test for a de facto or constructive taking; it is equally not a material fact supporting such a claim. Although the public authority’s intention may provide narrative background or context or may be relevant to an administrative law claim that its actions were ultra vires as having an improper purpose or being in bad faith, it is not relevant to a de facto taking claim, which is concerned with the effect of the public authority’s actions, not with its intention.
In the instant case, there is no material fact in dispute on either branch of the CPR test for a de facto taking. Firstly, Halifax has acquired no beneficial interest in the Lands or flowing from them. It has simply refused to up-zone the Lands. Neither Halifax’s 2016 municipal resolution refusing to up‑zone the Lands nor Halifax’s alleged acts of encouraging the public to trespass raises any genuine issue of material fact that Halifax has acquired a beneficial interest in the Lands or flowing from them. The municipal resolution merely preserved the status quo by refusing to allow lands that have always been vacant and treed and situated next to a protected wilderness area to be developed into serviced residential communities. Halifax’s adoption of a municipal resolution refusing to up‑zone the Lands also cannot be a basis for a de facto taking claim because the resolution did not result in Halifax acquiring any proprietary interest in the Lands. Moreover, a public authority does not and cannot acquire a proprietary interest by encouraging others to trespass.
Secondly, the uncontradicted evidence is that Annapolis has been deprived of no reasonable uses, let alone all reasonable uses, of the Lands. The zoning and uses of the Lands remain entirely unchanged. The Lands remain vacant and treed, just as they have been since Annapolis acquired them. Annapolis has the same rights with respect to the Lands that it had prior to Halifax’s resolution in 2016. Halifax’s refusal to up‑zone the Lands in 2016 thus did not deprive Annapolis of any reasonable uses of the Lands. It simply disappointed Annapolis’ hope of developing them. More importantly, even if Annapolis could somehow show that Halifax will never up‑zone the Lands, that could not establish that Annapolis has lost all reasonable uses of the Lands. The Lands have never been used for serviced development, they have always been vacant and treed. The majority’s assertion amounts to saying that a refusal to up-zone vacant land can give rise to a de facto taking merely if all potential reasonable uses are prohibited. That would upset the settled law reflected in the jurisprudence, and it would eliminate Halifax’s statutory and common law protection from liability for refusing to up‑zone. Removal of all reasonable uses of the land must be assessed in relation to both its potential uses as well as the nature of the land and the range of reasonable uses to which it has actually been put.
Cases Cited
By Côté and Brown JJ.
Applied: Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227; considered: The Queen in Right of the Province of British Columbia v. Tener, [1985] 1 S.C.R. 533; Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98, 177 D.L.R. (4th) 696; Lynch v. St. John’s (City), 2016 NLCA 35, 400 D.L.R. (4th) 62; Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101; Montréal (Ville) v. Benjamin (2004), 86 L.C.R. 161; referred to: Lorraine (Ville) v. 2646‑8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; Toronto (City) v. Ontario (Attorney General), 2021 SCC 34; Compliance Coal Corporation v. British Columbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215; Sun Construction Company Limited v. Conception Bay South (Town), 2019 NLSC 102, 87 M.P.L.R. (5th) 256; Genevieve Holdings Ltd. v. Kamloops (City) (1988), 42 M.P.L.R. 171; Steer Holdings Ltd. v. Manitoba, [1992] 2 W.W.R. 558, aff’d (1992), 99 D.L.R. (4th) 61; Purchase v. Terrace (City) (1995), 26 M.P.L.R. (2d) 126; Harvard Investments Ltd. v. Winnipeg (City) (1995), 129 D.L.R. (4th) 557; Attorney‑General v. De Keyser’s Royal Hotel, [1920] A.C. 508; London and North Western Railway Co. v. Evans, [1893] 1 Ch. 16; Belfast Corporation v. O.D. Cars Ltd., [1960] A.C. 490; Ulster Transport Authority v. James Brown & Sons, Ltd., [1953] N.I. 79; Farber v. Royal Trust Co., [1997] 1 S.C.R. 846; C.M. Callow Inc. v. Zollinger, 2020 SCC 45; Ville de Léry v. Procureure générale du Québec, 2019 QCCA 1375, 12 L.C.R. (2d) 132; Ville de La Prairie v. 9255‑2504 Québec inc., 2020 QCCS 307, 2020 CarswellQue 2737; Spénard v. Salaberry‑de‑Valleyfield (Cité de), [1983] C.S. 725; Dupras v. Ville de Mascouche, 2022 QCCA 350, aff’d in part 2020 QCCS 2538, 15 L.C.R. (2d) 262; Wallot v. Québec (Ville), 2011 QCCA 1165, 24 Admin. L.R. (5th) 306; Municipalité de Saint‑Colomban v. Boutique de golf Gilles Gareau inc., 2019 QCCA 1402, 12 L.C.R. (2d) 313; Meadowbrook Groupe Pacific inc. v. Ville de Montréal, 2019 QCCA 2037, 2019 CarswellQue 12262; Ville de Québec v. Rivard, 2020 QCCA 146, 15 L.C.R. (2d) 242; Ville de Saint‑Rémi v. 9120‑4883 Québec inc., 2021 QCCA 630; Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494; Coady v. Burton Canada Co., 2013 NSCA 95, 365 D.L.R. (4th) 172; Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89, 58 C.L.R. (4th) 1.
By Kasirer and Jamal JJ. (dissenting)
Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227; Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101; The Queen in Right of the Province of British Columbia v. Tener, [1985] 1 S.C.R. 533; Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98, 177 D.L.R. (4th) 696; Friedmann Equity Developments Inc. v. Final Note Ltd., 2000 SCC 34, [2000] 1 S.C.R. 842; R. v. Salituro, [1991] 3 S.C.R. 654; FortisBC Energy Inc. v. Surrey (City), 2013 BCSC 2382, 112 L.C.R. 89; Compliance Coal Corporation v. British Columbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215; Genesis Land Development Corp. v. Alberta, 2009 ABQB 221, 471 A.R. 1, aff’d 2010 ABCA 148, 477 A.R. 390; Kalmring v. Alberta, 2020 ABQB 81, 11 Alta. L.R. (7th) 177; Altius Royalty Corporation v. Alberta, 2021 ABQB 3, 23 Alta. L.R. (7th) 105, aff’d 2022 ABQB 255; Club Pro Adult Entertainment Inc. v. Ontario (2006), 27 B.L.R. (4th) 227, rev’d in part 2008 ONCA 158, 42 B.L.R. (4th) 47; Railink Canada Ltd. v. Ontario (2007), 95 L.C.R. 17; Taylor v. Dairy Farmers of Nova Scotia, 2010 NSSC 436, 298 N.S.R. (2d) 116, aff’d 2012 NSCA 1, 311 N.S.R. (2d) 300; Lynch v. St. John’s (City), 2016 NLCA 35, 400 D.L.R. (4th) 62; Sun Construction Company Limited v. Conception Bay South (Town), 2019 NLSC 102, 87 M.P.L.R. (5th) 256; Gosse v. Conception Bay South (Town), 2021 NLCA 23, 16 L.C.R. (2d) 123; KMK Properties Inc. v. St. John’s (City), 2021 NLSC 122, 19 M.P.L.R. (6th) 150; Dennis v. Canada, 2013 FC 1197, 114 L.C.R. 1, aff’d 2014 FCA 232; Calwell Fishing Ltd. v. Canada, 2016 FC 312; Anglehart v. Canada, 2016 FC 1159, [2017] 2 F.C.R. 74, aff’d 2018 FCA 115, [2019] 1 F.C.R. 504; Northern Cross (Yukon) Ltd. v. Yukon (Energy, Mines and Resources), 2021 YKSC 3, 16 L.C.R. (2d) 1, rev’d in part 2021 YKCA 6, 79 C.C.L.T. (4th) 179; Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5; Ulster Transport Authority v. James Brown & Sons, Ltd., [1953] N.I. 79; Montréal (Ville) v. Benjamin (2004), 86 L.C.R. 161; Lorraine (Ville) v. 2646‑8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577, rev’g 2016 QCCA 1803, 2 L.C.R. (2d) 299; Pillenière, Simoneau v. Ville de Saint‑Bruno‑de‑Montarville, 2021 QCCS 4031, 19 M.P.L.R. (6th) 275; Dupras v. Ville de Mascouche, 2022 QCCA 350; Ville de Léry v. Procureure générale du Québec, 2019 QCCA 1375, 12 L.C.R. (2d) 132; Wallot v. Québec (Ville), 2011 QCCA 1165, 24 Admin. L.R. (5th) 306; Municipalité de Saint‑Colomban v. Boutique de golf Gilles Gareau inc., 2019 QCCA 1402, 12 L.C.R. (2d) 313; Meadowbrook Groupe Pacific inc. v. Ville de Montréal, 2019 QCCA 2037, 2019 CarswellQue 12262; Ressources Strateco inc. v. Procureure générale du Québec, 2020 QCCA 18, 32 C.E.L.R. (4th) 231; Ville de Québec v. Rivard, 2020 QCCA 146, 15 L.C.R. (2d) 242; Ville de Saint‑Rémi v. 9120‑4883 Québec inc., 2021 QCCA 630; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89, 58 C.L.R. (4th) 1; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45; Warman v. Law Society of Alberta, 2015 ABCA 368, 609 A.R. 83; Condominium Corp. No. 0321365 v. Cuthbert, 2016 ABCA 46, 612 A.R. 284; Rudichuk v. Genesis Land Development Corp., 2020 ABCA 42, 98 Alta. L.R. (6th) 339; Wallbridge v. Brunning, 2018 ONCA 363, 422 D.L.R. (4th) 305.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms , s. 26 .
Civil Code of Québec, art. 952.
Expropriation Act, R.S.N.S. 1989, c. 156, ss. 6, 24.
Halifax Mainland Land Use By‑Law.
Halifax Regional Municipality Charter, S.N.S. 2008, c. 39, ss. 65, 227 to 229, 232(2), 237.
Municipal Government Act, S.N.S. 1998, c. 18, ss. 212 to 214, 217(2), 222.
Nova Scotia Civil Procedure Rules, r. 13.
Wilderness Areas Protection Act, S.N.S. 1998, c. 27.
Authors Cited
Côté, Pierre‑André, in collaboration with Stéphane Beaulac and Mathieu Devinat. The Interpretation of Legislation in Canada, 4th ed. Toronto: Carswell, 2011.
Emerich, Yaëll. Droit commun des biens: perspective transsystémique. Montréal: Yvon Blais, 2017.
Hamill, Sarah E. “Common Law Property Theory and Jurisprudence in Canada” (2015), 40 Queen’s L.J. 679.
Horsman, Karen, and Gareth Morley, eds. Government Liability: Law and Practice. Toronto: Thomson Reuters, 2022 (loose‑leaf updated May 2022, release 1).
Lavoie, Malcolm. “Canadian Common Law and Civil Law Approaches to Constructive Takings: A Comparative Economic Perspective” (2010), 42 Ottawa L. Rev. 229.
LeChasseur, Marc-André. “L’expropriation de facto au Canada et la transcendance des solidarités”, dans Service de la qualité de la profession du Barreau du Québec, vol. 509, Développements récents en droit municipal. Montréal: Yvon Blais, 2022, 71.
Makuch, Stanley M., Neil Craik and Signe B. Leisk. Canadian Municipal and Planning Law, 2nd ed. Toronto: Thomson Carswell, 2004.
Pelletier, Simon, et Frédéric Côté. “Développements récents en matière d’expropriation déguisée: distinction entre les recours en nullité, en dommages pour responsabilité extracontractuelle d’un organisme public et en expropriation déguisée”, dans Service de la qualité de la profession du Barreau du Québec, vol. 468, Développements récents en droit de l’environnement. Montréal: Yvon Blais, 2019, 303.
Todd, Eric C. E. The Law of Expropriation and Compensation in Canada, 2nd ed. Scarborough, Ont.: Carswell, 1992.
Warchuk, Paul A. “Rethinking Compensation for Expropriation” (2015), 48 U.B.C. L. Rev. 655.
APPEAL from a judgment of the Nova Scotia Court of Appeal (Beveridge, Farrar and Derrick JJ.A.), 2021 NSCA 3, 17 L.C.R. (2d) 21, 455 D.L.R. (4th) 349, 8 M.P.L.R. (6th) 165, [2021] N.S.J. No. 4 (QL), 2021 CarswellNS 4 (WL), setting aside a decision of Chipman J., 2019 NSSC 341, 17 L.C.R. (2d) 1, [2019] N.S.J. No. 491 (QL), 2019 CarswellNS 817 (WL). Appeal allowed, Karakatsanis, Martin, Kasirer and Jamal JJ. dissenting.
Peter H. Griffin, Rebecca Jones, Scott Rollwagen and Amy Sherrard, for the appellant.
Michelle Awad, K.C., Martin Ward, K.C., and Jeremy Ryant, for the respondent.
Dayna Anderson, for the intervener the Attorney General of Canada.
Robert B. Lawson and Vanessa Glasser, for the intervener the Attorney General of Ontario.
Written submissions only by Edward A. Gores, K.C., for the intervener the Attorney General of Nova Scotia.
Phong Phan and Tim Quirk, for the intervener the Attorney General of British Columbia.
Malcolm Lavoie and Adrienne Funk, for the intervener the Canadian Constitution Foundation.
Brandon Kain and Adriana Forest, for the intervener the Ontario Landowners Association.
Written submissions only by Shane Rayman and Conner Harris, for the intervener the Canadian Home Builders’ Association.
Randy Christensen and Sarah McDonald, for the intervener Ecojustice Canada Society.
The judgment of Wagner C.J. and Moldaver, Côté, Brown and Rowe JJ. was delivered by
Côté and Brown JJ. —
TABLE OF CONTENTS
Paragraph
I. Overview
1
II. Factual Background
5
III. Judicial History
11
A. Supreme Court of Nova Scotia, 2019 NSSC 341, 17 L.C.R. (2d) 1 (Chipman J.)
11
B. Nova Scotia Court of Appeal, 2021 NSCA 3, 455 D.L.R. (4th) 349 (Beveridge, Farrar and Derrick JJ.A.)
14
IV. Issues
16
V. Analysis
17
A. Overview of the Law of Takings
17
B. “Beneficial Interest”
27
(1) Manitoba Fisheries
28
(2) Tener
32
(3) Defining the Nature of a “Beneficial Interest”
38
(4) Conclusion on “Beneficial Interest”
44
C. Disguised Expropriation in Quebec Civil Law
46
D. Intention
51
E. Application
58
(1) Halifax’s Alleged Acquisition of a Beneficial Interest in the Annapolis Lands
64
(2) Halifax’s Alleged Removal of All Reasonable Uses of the Annapolis Lands
69
VI. Disposition
80
I. Overview
[1] This appeal calls upon the Court to clarify the circumstances in which state regulation of land use may effect a de facto or (as we will refer to it) “constructive” taking of private property.
[2] The appellant, Annapolis Group Inc., contends that the respondent, Halifax Regional Municipality, improperly used its regulatory powers to effectively seize Annapolis’ land for use as a public park without compensation. Halifax says that Annapolis’ claim is a veiled attempt to make taxpayers foot the bill for a decades‑long development gamble. It sought summary dismissal of this part of Annapolis’ claim, while permitting other claims (for misfeasance in public office and unjust enrichment) to proceed to trial.
[3] Although unsuccessful at first instance, Halifax persuaded the Nova Scotia Court of Appeal that it should apply this Court’s judgment in Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227 (“CPR”), to strike that claim. Annapolis asks this Court to restore its claim in respect of the alleged constructive taking and allow it to proceed to trial.
[4] We would allow Annapolis’ appeal. The Court of Appeal, in our respectful view, misapplied CPR and summary judgment principles. Read in harmony with the jurisprudence upon which it was decided, CPR signifies that a constructive taking occurs where: (1) a beneficial interest — understood as an advantage — in respect of private property accrues to the state, which may arise where the use of such property is regulated in a manner that permits its enjoyment as a public resource; and (2) the impugned regulatory measure removes all reasonable uses of the private property at issue. Further, the Court of Appeal erred by holding that Halifax’s intention is irrelevant to applying the second part of that analysis. This leaves genuine issues of material fact arising from Annapolis’ claim to be tried. Annapolis is entitled to adduce evidence at trial to show that, by holding Annapolis’ land out as a public park, Halifax has acquired a beneficial interest therein; and that, because Halifax is unlikely to ever lift zoning restrictions constraining the development of Annapolis’ land, Annapolis has lost all reasonable uses of its property. Further, and in support of the latter proposition, Annapolis may adduce evidence of Halifax’s intention in not doing so.
II. Factual Background
[5] Over time from the 1950s, Annapolis acquired the subject property, comprising 965 acres of land (“Annapolis Lands” or “Lands”), with the intention of eventually securing enhanced development rights and reselling it.
[6] In 2006, Halifax adopted the Regional Municipal Planning Strategy, a guide for land development in the municipality, including the Annapolis Lands, over a 25‑year period. While the Planning Strategy reserved a portion of the Annapolis Lands for possible future inclusion in a regional park, it also zoned the Lands as “Urban Settlement” and “Urban Reserve”. Urban Settlement denotes an area where urban forms of development may occur. Urban Reserve identifies land that could be developed beyond the 25‑year horizon. These designations thus contemplate — but do not permit — future residential serviced development. For serviced development to occur on the Annapolis Lands, Halifax must adopt a resolution authorizing a “secondary planning process” and an amendment to the applicable land use by‑law. The applicable by‑law is the Halifax Mainland Land Use By‑Law, also adopted in 2006.
[7] In 2014, Halifax adopted a revised version of the Planning Strategy. The Urban Settlement and Urban Reserve designations were maintained, and thus the zoning of the Annapolis Lands did not change, and has not changed since 2006. Nor were the conceptual boundaries for the potential park altered.
[8] Beginning in 2007, Annapolis made several attempts to develop the Lands. Ultimately, by resolution dated September 6, 2016, Halifax refused to initiate the secondary planning process, and Annapolis sued, alleging a constructive taking, misfeasance in public office, and unjust enrichment.
[9] At issue in this appeal is Annapolis’ allegation of a constructive taking. Specifically, Annapolis says that Halifax’s regulatory measures have deprived it of all reasonable or economic uses of its land, resulting in a constructive taking without compensation, contrary to ss. 65 and 237 of the Halifax Regional Municipality Charter, S.N.S. 2008, c. 39, and ss. 6 and 24 of the Expropriation Act, R.S.N.S. 1989, c. 156. It alleges in particular that Halifax has acquired a beneficial interest in the Lands by exercising dominion over them so as to effectively create a public park at Annapolis’ expense. According to Annapolis, members of the public hike, cycle, canoe, camp, and swim on the Lands, are encouraged to do so by Halifax, and Halifax financially supports organizations that also encourage people to use the Lands as a park. Further, signs posted on the Lands allegedly depict the municipality’s logo and phone number, and a media article quotes a municipal employee referred to as “the city staffer overseeing the park’s creation”.
[10] On March 11, 2019, Halifax moved for partial summary judgment of Annapolis’ claim, pursuant to r. 13 of the Nova Scotia Civil Procedure Rules. In its motion, Halifax sought the dismissal of Annapolis’ constructive taking claim and urged the motion judge to find that, as a matter of law, a constructive taking cannot result from Halifax refusing to amend the Planning Strategy and associated land use by‑laws. Annapolis resisted the motion, arguing that its claim raises genuine issues of material fact requiring a trial.
III. Judicial History
A. Supreme Court of Nova Scotia, 2019 NSSC 341, 17 L.C.R. (2d) 1 (Chipman J.)
[11] The motion judge dismissed Halifax’s partial summary judgment motion. He agreed with Annapolis that its constructive taking claim raised “vast” genuine issues of material fact requiring a trial, including:
(a) whether Halifax had erected signage on the Lands depicting Halifax’s logo on various trails;
(b) whether a Halifax employee had been “overseeing the park’s creation”;
(c) whether the Lands would be treated as development lands and not parklands;
(d) the existence of clauses in the Planning Strategy that mandate consideration of policy concepts without committing Council to adopt the policy, and clauses discussing an urban settlement designation boundary;
(e) discovery evidence to the effect that Halifax had decided that the Annapolis Lands would be treated as development lands, not parklands; and
(f) correspondence between counsel, including letters containing Halifax’s denial of Annapolis’ allegations.
[12] The motion judge also identified a triable issue in affidavit evidence suggesting the possibility of an ulterior motive on Halifax’s part — specifically, to reserve part of the Annapolis Lands for a public park. In this regard, he relied on Lorraine (Ville) v. 2646-8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577, which involved a claim under Quebec’s Expropriation Act, CQLR, c. E‑24. In Lorraine, this Court affirmed that, where property is expropriated outside a legislative framework for an ulterior motive (such as to avoid paying an indemnity), a “disguised” expropriation occurs. In the motion judge’s view, disguised expropriation under the law of Quebec may be equated to constructive expropriation as that concept was understood by this Court in The Queen in Right of the Province of British Columbia v. Tener, [1985] 1 S.C.R. 533.
[13] In light of the foregoing, the motion judge concluded Annapolis’ constructive taking claim should proceed to trial. Expropriation cases, he said, are fact‑specific and offer different scenarios in which a constructive taking claim may succeed, and this case is no different. He added that the facts material to the constructive taking claim were “sufficiently interwoven” with Annapolis’ two other causes of action, such that “to deny Annapolis’ right to pursue this claim would not appreciably shorten pre-trial procedures or the trial” (para. 44). Thus he did not find the proportionality principle, as described in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, to support granting summary judgment.
B. Nova Scotia Court of Appeal, 2021 NSCA 3, 455 D.L.R. (4th) 349 (Beveridge, Farrar and Derrick JJ.A.)
[14] The Court of Appeal held that Annapolis’ constructive taking claim did not have a reasonable chance of successfully establishing, as CPR requires, an acquisition by Halifax of a beneficial interest in the Annapolis Lands or flowing from the Lands, and the removal of all reasonable uses of the Lands. Citing Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98, 177 D.L.R. (4th) 696, it held that limiting the use of land or reducing its value through regulation is insufficient. For Halifax to acquire a “beneficial interest” in the Annapolis Lands, land “must actually be taken” from Annapolis and acquired by Halifax (para. 71). This did not occur. Even had Halifax placed signage on the property to encourage its use by the public, this would, at most, have constituted a trespass by those using the lands. Annapolis has the same rights with respect to the Lands under the Planning Strategy that it has had for years. Nothing has changed. Nor, in the Court of Appeal’s view, would adopting a development plan constitute a taking. It simply allows a municipality to set future development goals and to ensure land will be developed (or not) accordingly.
[15] Finally, it said, Halifax’s intended use for the Lands is not relevant to the constructive taking analysis. Improper motive is not proof of a constructive taking, and Lorraine does not dictate a contrary conclusion.
IV. Issues
[16] The foregoing account presents the issues to be decided:
(a) Did the Court of Appeal err in holding that an “acquisition of a beneficial interest” under the constructive taking test established by this Court in CPR requires land to “actually be taken” from an owner and acquired by the state? If not, should the CPR test be revisited?
(b) Did the Court of Appeal err in holding that evidence of the state’s intended use of the impugned land is irrelevant to a claim for constructive taking?
V. Analysis
A. Overview of the Law of Takings
[17] It is useful to begin with a brief overview of the law of takings. Given the facts of this appeal, our focus is on expropriation through regulation — which, again, we refer to as a “constructive taking” in preference to other commonly applied terms such as “de facto” or “regulatory taking”, as in our view it more accurately captures the nature of the state action at issue and the effect on the landowner (see e.g., M. Lavoie, “Canadian Common Law and Civil Law Approaches to Constructive Takings: A Comparative Economic Perspective” (2010), 42 Ottawa L. Rev. 229).
[18] A “taking” is a “forcible acquisition by the Crown of privately owned property . . . for public purposes” (K. Horsman and G. Morley, eds., Government Liability: Law and Practice (loose‑leaf), at § 5:1). It may take the form of a constructive taking (effective appropriation of private property by a public authority exercising its regulatory powers), or a de jure taking (formal expropriation), by (in the case of land) taking title.
[19] To be clear, not every instance of regulating the use of property amounts to a constructive taking. Governments and municipalities holding delegated provincial regulatory authority (Toronto (City) v. Ontario (Attorney General), 2021 SCC 34, at para. 2) validly regulate land in the public interest without effecting “takings”, properly understood (see Compliance Coal Corporation v. British Columbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215, at para. 91). The line between a valid regulation and a constructive taking is crossed where the effect of the regulatory activity deprives a claimant of the use and enjoyment of its property in a substantial and unreasonable way, or effectively confiscates the property (Horsman and Morley, at § 5:2). Put simply, “in order for a Crown measure to effect a constructive taking of property, private rights in the property must be virtually abolished, leaving the plaintiff with ‘no reasonable use’ of the property” (Horsman and Morley, at § 5: