Venne v. Quebec (Commission de la Protection du Territoire Agricole)

Venne v. Quebec (Commission de la Protection du Territoire Agricole)
Collection
Supreme Court Judgments
Date
1989-04-20
Report
[1989] 1 SCR 880
Case number
19689
Judges
Beetz, Jean; Lamer, Antonio; Wilson, Bertha; Le Dain, Gerald Eric; La Forest, Gérard V.
On appeal from
Quebec
Subjects
Civil law
Environmental law
Notes
SCC Case Information: 19689
Decision Content
Venne v. Quebec (Commission de la protection du territoire agricole), [1989] 1 S.C.R. 880
Commission de protection du
territoire agricole du QuébecAppellant
v.
Daniel-Joseph VenneRespondent
and
Honourable Minister of Agriculture
Attorney General of Quebec, representing
Her Majesty the Queen in right of QuebecMis en cause
and
City of St-HubertMis en cause
and
Winzen Land Corporation Ltd.Mis en cause
indexed as: venne v. quebec (commission de la protection du territoire agricole)
File No.: 19689.
1987: May 11, 12; 1989: April 20.
Present: Beetz, Lamer, Wilson, Le Dain* and La Forest JJ.
on appeal from the court of appeal for quebec
Environmental law -- Protection of agricultural territory -- Application of law -- Acquired rights -- Seller reserving right of ownership over lots sold until selling price paid in full -- Lots included in designated agricultural region after sale but before ownership of lots transferred to buyer -- Whether seller can alienate lots without authorization of Commission de protection du territoire agricole -- Whether clause reserving ownership is suspensive condition retroactive to date of contract of sale -- Whether buyer has "acquired right" to conveyance of ownership -- Whether statute retroactive because it affects agreements concluded before it took effect -- Act to preserve agricultural land, S.Q. 1978, c. 10, ss. 1(3), 29, 101 -- Civil Code of Lower Canada, arts. 1079, 1085, 1089.
Civil law -- Obligations -- Sale -- Seller reserving right of ownership over lots sold until selling price paid in full -- Whether seller's obligation to convey ownership of lots once price paid conditional obligation or obligation with term -- Civil Code of Lower Canada, arts. 1079, 1085, 1089.
On May 14, 1977, respondent bought two subdivided lots from Winzen, a commercial corporation specializing in the purchase and sale of real estate for residential development, and signed a standard sale contract. Under this agreement, respondent undertook to pay the purchase price in 84 monthly instalments. Winzen, for its part, retained ownership of the two lots and only undertook to transfer the right of ownership thereof after the monthly payments had been made in full. At the time the Act to preserve agricultural land took effect on November 9, 1978, Winzen had not yet transferred the right of ownership to respondent because the selling price had not yet been fully paid. As the Act, and in particular ss. 26 to 30, presented an obstacle to proceeding with the residential development, Winzen applied to the Commission de protection du territoire agricole to exclude from the designated agricultural region all the land bought by it, and alternatively, it asked for authorization to alienate the lots already sold but to which it still retained the right of ownership. Its requests were denied.
Without the Commission's authorization, Winzen transferred the right of ownership in two lots to respondent by notarial deeds on March 25, 1982, after the latter had prepaid the balance of the selling price. Respondent then applied to the Superior Court for declaratory relief declaring him to be owner of two lots he claims to have bought from Winzen by an agreement signed before the Act came into effect. The Superior Court allowed the application and the judgment was affirmed by the Court of Appeal.
The appeal at bar raises two issues: (1) is the obligation imposed on Winzen by the standard contract to convey ownership of the lots when the selling price has been paid in full a suspensive conditional obligation retroactive to May 14, 1977, when the Act had not yet taken effect? and (2), if the standard contract did not create a suspensive conditional obligation, are the rights Winzen and respondent conferred on each other before the Act took effect "acquired rights" to which the Act cannot be applied?
Held: The appeal should be allowed.
The standard contract did not create a suspensive conditional obligation and accordingly the retroactivity mentioned in art. 1085 does not apply. The "condition" referred to in arts. 1079 et seq. C.C.L.C. is "an event future and uncertain", extrinsic to the legal relationship, on which the existence of an obligation depends. The payment of the price by respondent does not fall in this category: he was obligated to pay the price, just as Winzen was obligated to convey the immoveable property, within a certain time. The obligations on either side were obligations with a term (arts. 1089 et seq. C.C.L.C.), not conditional obligations. They existed once the standard contract had been signed, even though their performance was in abeyance. In any synallagmatic contract performance of its obligations by one of the parties depends on performance by the other, but that does not make the obligations conditional within the meaning of the Civil Code. The rule of the correlativity of obligations means that adopting the contrary position would transform into conditional obligations with retroactive effect deferred obligations resulting from synallagmatic contracts.
The rights conferred by the standard contract are not "acquired rights" that fall outside the scope of the Act. Division IX of the Act, and in particular s. 101, defines all the acquired rights which can be set up against application of the Act. Other rules developed by the courts accordingly cannot have the effect of conferring acquired rights other than those specified by the Act or of conferring them in a way not contemplated by the Act. The presumption that vested rights cannot be affected is only a rule of construction and, by adopting the provisions of Division IX of the Act, the legislator intended to override this rule of construction and replace it with a complete and exhaustive code of the rules applicable to the matter.
In the case at bar, the acquired right claimed by respondent is not a right mentioned in s. 101. That section protects only the right to dispose of a lot, but not that of obtaining the ownership of it. Moreover, respondent does not meet the conditions listed in s. 101. The lots bought were never used for other than agricultural purposes and he never obtained a building or any other permit which could be described as a "permit authorizing use". Nor can respondent benefit from acquired rights through Winzen. The acts listed by Winzen, and in particular the subdivision of lots, taken separately or as a whole do not constitute effective use of the lots for a purpose other than agriculture. On the contrary, the use of the two lots by Winzen or respondent appears to be use for agricultural purposes, since the legislative definition of the word "agriculture" includes fallow land.
Finally, the Act, and especially s. 29, applies to all alienations occurring after it took effect on November 9, 1978. The definition of the word "alienation" in s. 1(3) refers to "any conveyance of property", and not to prior agreements by which the parties may have undertaken to make such a conveyance. The notarial deeds of March 25, 1982 are according to their express language conveyances of property and they are subsequent to the date on which the Act took effect. Section 29 of the Act must be applied to them without giving it retroactive effect, even though the agreements which led to these deeds were made before the date on which the Act took effect. The notarial deeds concluded by respondent and Winzen are therefore voidable under s. 30 of the Act.
Cases Cited
Applied: Attorney General of Quebec v. Expropriation Tribunal, [1986] 1 S.C.R. 732; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; distinguished: Dulac v. Nadeau, [1953] 1 S.C.R. 164; disapproved: Lefebvre v. Commission de protection du territoire agricole du Québec, J.E. 82-1153 (Sup. Ct.), aff'd J.E. 84-720 (C.A.); referred to: Veilleux v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000; Gauthier v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000; Lebel v. Winzen Land Corp., [1989] 1 S.C.R. 000, rev'g C.A. Mtl., No. 500‑09‑001549‑823, November 11, 1985; Winzen Land Corp., C.P.T.A.Q., No. 010345, September 21, 1979; Winzen Land Corp. v. Commission de protection du territoire agricole du Québec, [1981] C.A. 383, aff'g Sup. Ct. Mtl., No. 500‑05‑004153‑803, February 16, 1981; Chateau‑Gai Wines Ltd. v. Institut National des Appellations d'Origine des Vins et Eaux‑de‑Vie, [1975] 1 S.C.R. 190; Commander Nickel Copper Mines Ltd. v. Zulapa Mining Corp., [1975] C.A. 390; Ouellet v. Procureur général du Québec, Sup. Ct. Québec, No. 200‑05‑000747‑803, July 11, 1980; Acme Village School District (Board of Trustees of) v. Steele‑Smith, [1933] S.C.R. 47.
Statutes and Regulations Cited
Act to preserve agricultural land, S.Q. 1978, c. 10 [now R.S.Q., c. P‑41.1], ss. 1(1), (3), 12, 18, 22 to 25, 26, 27, 28, 29, 30, 55, 70, 72, 82, 98, 101, 116, 117.
Civil Code of Lower Canada, arts. 1023, 1079, 1085, 1089, 1476, 1478.
Authors Cited
Ghestin, Jacques. "Réflexions d'un civiliste sur la clause de réserve de propriété", D.1981.Chron.1.
Mazeaud, Henri et Léon, Jean Mazeaud et François Chabas. Leçons de droit civil, t. II, vol. I, 7e éd. Paris: Montchrestien, 1985.
Planiol, Marcel, et Georges Ripert. Traité pratique de droit civil français, t. 7, 2e éd. Paris: Librairie générale de droit et de jurisprudence, 1954.
APPEAL from a judgment of the Court of Appeal for Quebec, [1985] C.A. 703, affirming a judgment of the Superior Court. Appeal allowed.
Gérard Beaupré, Q.C., and Louis Bouchart‑d'Orval, for the appellant.
Jean Bruneau, Q.C., for the respondent.
Michel Delorme, for the mis en cause the city of St‑Hubert.
Robert Dulude, Q.C., for the mis en cause Winzen Land Corp.
//Beetz J.//
English version of the judgment of the Court delivered by
BEETZ J. --
I - Introduction
This is an application for declaratory relief. In it respondent Daniel‑Joseph Venne is asking the Court to declare that he is owner of two lots he claims to have bought from the mis en cause Winzen Land Corporation Ltd. (Winzen) by an agreement signed before the Act to preserve agricultural land, S.Q. 1978, c. 10 (the Act), came into effect. Initially, the application also asked the Quebec Superior Court to recognize respondent's right to use the two lots for purposes other than agriculture. At the hearing of the application in the Superior Court, however, respondent verbally withdrew this latter request.
The appeal deals in part with the provisions of the Act considered by the Court in Veilleux v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000, and Gauthier v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000, judgment in which was rendered at the same time as the case at bar. It also concerns a matter of pure civil law, namely the legal effects of the agreements signed by the parties in the instant case.
Finally, mention should be made of the connection between this appeal and Lebel v. Winzen Land Corp., [1989] 1 S.C.R. 000, in which the appellant sought authorization to institute a class action on behalf of people who had concluded with Winzen agreements identical to those at issue in the case at bar, agreements involving lots located in the same designated agricultural region.
Although judgment was rendered on the same day in these four appeals, it should be mentioned for the reader's convenience that the reasons for judgment were written in the following order: Veilleux, Gauthier, the case at bar and Lebel.
II - Facts
The facts are complex but for the most part they are not in dispute. They have led to a number of other proceedings, in particular before the Commission de protection du territoire agricole du Québec (the Commission).
Winzen is a commercial corporation specializing in the purchase and sale of real estate for residential development. In 1974 and 1975 Winzen bought original lots 1 to 4 and 222 to 227 of the cadastre of the parish of Ste‑Famille de Boucherville, now located in the city of St‑Hubert, the mis en cause. Winzen then obtained approval for a subdivision plan subdividing the original lots for residential development. At the time the St‑Hubert zoning by law required the lots bought by Winzen to be zoned "RX" (deferred residential). This type of zoning does not allow the land to be used for residential purposes but reserves it for these purposes in the indefinite future. The use proposed by Winzen therefore would have required a new zoning by‑law to be adopted.
Before the city of St‑Hubert amended its zoning by‑law to allow such a use, Winzen began selling the subdivided lots to people interested in acquiring residential property or making an investment. At the time these sales were made, the land was not the subject of any use for residential development.
On May 14, 1977, respondent bought from Winzen two lots numbered 224‑260 and 2‑78 and signed a document titled "Contract for Deed". Under this agreement respondent undertook to pay a total of $7,926 in 84 consecutive monthly payments of $106, commencing on May 1, 1977. Winzen, for its part, retained ownership of the two lots and only undertook to deliver possession and to transfer the right of ownership thereof after the monthly payments had been made in full.
Several clauses of this agreement need to be cited. It begins on the first page with the following provisions:
CONTRACT FOR DEED
. . .
WINZEN LAND CORPORATION LIMITED, As Vendor, agrees to sell to:
PURCHASER'S NAME: Daniel Joseph Venne . . .
and said Purchaser agrees to buy from the said Vendor the below listed lands . . .
The agreement then gives the numbers and sizes of the lots, the total price of each lot and the total price of the two lots payable in 84 monthly instalments of $106. The parties' rights and obligations are set out in detail on the reverse:
The Parties agree that the said sale shall be on the following terms:
1.(a)The Vendor will convey to the Purchaser a marketable title to the above‑mentioned lot(s), in accordance with the laws of the Province of Quebec.
(b)This Contract for Deed shall not be registered until payment in full has been made of the Total Purchase Price.
(c)Upon payment in full of the above Total Purchase Price, the Purchaser may enter into possession of the above‑mentioned lot(s). Within sixty days after such payment in full, the Purchaser shall be entitled to obtain from the Vendor a Deed of Sale which shall be executed before the Vendor's notary at the Vendor's expense up to which time title to the said property shall remain vested in the Vendor.
2.The Purchaser binds and obliges himself to pay the balance in equal and consecutive monthly payments as shown above . . . The Purchaser shall have the right to prepay the balance of the Total Purchase Price, in part or in whole, without penalty.
. . .
4.The parties do hereby agree that for a period of three years from the date hereof, should the Purchaser wish to sell the land herein, or any part thereof, then the Vendor shall be given the first right of refusal on any sale by the Purchaser. This shall be done by written notice from the Purchaser to the Vendor, setting out the terms on which the Purchaser is prepared to sell and the Vendor shall then be given 5 banking days from the receipt of such notice to accept such terms. Should the Vendor not accept these terms within the said time then the Purchaser may sell the lands on these terms to any other Purchaser. The intent of this paragraph is to give the Vendor first opportunity to purchase any or all of this land on terms acceptable to any other Purchaser.
5.This contract and the rights and interest hereunder are transferable by the Purchaser without the written consent of the Vendor, provided that the Purchaser informs the Vendor in writing of such transfer and provided that the Purchaser shall not be in default under the terms of this Contract, and provided further that the transferee shall in writing assume all obligations of this Agreement and the Purchaser shall continue to remain liable therefor until all the obligations on his part to be performed herein shall have been completed.
. . .
8.All rights and remedies of the Vendor may be exercised cumulatively.
. . .
13.Should the Purchaser fail to make any payments required under the terms of this agreement, and should such failure continue for a period of 60 days thereafter, then the Vendor shall terminate all of the Purchaser's rights hereunder by Notice of Default. The Purchaser agrees upon such termination to forfeit to the Vendor as liquidated damages all payments made hereunder and all right, title, and interest of the Purchaser in and to the subject property (together with appurtenances and improvements, if any) and forthwith to surrender to the Vendor peaceable possession of the property.
14.In the event the Vendor unwilfully defaults in respect of its obligations hereunder, then the Vendor, at its option, shall either cure each such default within 60 days of being required by the Purchaser by written notice so to do or the Vendor shall repay to the Purchaser any monies paid hereunder for each lot where the default has not been cured, and the Vendor shall upon such repayment be relieved from any further obligations and/or liabilities hereunder as it relates to the lot for which repayment has been made. The Purchaser shall, but at the Vendor's expense, execute any documents in order to assist the Vendor in giving effect to this paragraph.
It should also be noted that the "Contract for Deed" signed by respondent is a standard form contract signed by persons purchasing Winzen land in the St‑Hubert area. It is identical to the contract at issue in Lebel v. Winzen Land Corp. Only the names of the parties, the description of the lots purchased, the price and the terms of payment had to be added.
The Act took effect on November 9, 1978. It prohibits use of a lot for a purpose other than agriculture (s. 26) and subdivision (s. 28) in a designated agricultural region or agricultural zone (s. 55), except with authorization from the Commission. Section 29 prohibits the alienation of a lot by a person reserving a right of alienation over a contiguous lot:
29. No person may, in a designated agricultural region, except with the authorization of the commission, effect the alienation of a lot while retaining a right of alienation on a contiguous lot or on a lot that would otherwise be contiguous if it were not separated from the first by a public road.
The alienation of one or several contiguous lots or of lots which would be contiguous if they were not separated by a public road shall not be made in favour of more than one person, except with the authorization of the commission.
The surface of a lot in respect of which a right is recognized in virtue of Division IX is not deemed contiguous.
Alienation is defined in s. 1 of the Act:
1. In this Act, unless the context requires otherwise,
. . .
(3) "alienation" means any conveyance of property, including sale with a right of redemption, emphyteutic lease, alienation for rent, transfer of a right contemplated in section 3 of the Mining Act (1965, 1st session, chapter 34) and transfer of timber limits under the Lands and Forests Act (Revised Statutes, 1964, chapter 92), except ....
There then follow three exceptions that do not apply here.
The penalty associated with these prohibitions is contained in part in ss. 30 and 82:
30. Subdivision or alienation made in contravention to section 28 or 29 may be annulled.
Any interested person, including the Procureur général, the commission or the municipal corporation where the lot is situated may apply to the Superior Court to have such nullity declared.
82. The Superior Court may order the cancellation of all rights, privileges and hypothecs created or resulting from any deed in contravention of sections 26 to 29, 55 and 70.
At the time the Act took effect, Winzen had sold 1,883 lots but had only transferred the right of ownership by registered deed for 850 of these. That left 1,033 bought by some 600 purchasers to whom Winzen had not yet transferred the right of ownership, because the selling price had not yet been fully paid. At that time, respondent was one of these 600 purchasers. Winzen also transferred a number of lots to the municipality to be used in the laying of streets and the eventual provision of parks. Winzen still had 426 lots for sale.
As the Act, and in particular ss. 26 to 30, presented an obstacle to proceeding with the residential development, Winzen applied to the Commission on July 13, 1979. It asked the Commission to exclude from the designated agricultural region all the land bought by it in the St‑Hubert area, and alternatively, it asked for authorization to alienate the lots already sold but in which it still retained the right of ownership. The Commission dismissed the two requests because most of the land in question is used for agricultural purposes, because it is well suited to such purposes and because the city of St‑Hubert did not need it to accommodate its population: Winzen Land Corp., C.P.T.A.Q., No. 010345, September 21, 1979.
The following is part of the Commission's reasons:
[TRANSLATION] In the Commission's opinion what counts is that on all this land or these lots there is currently no street, building, development or move towards development, on ground which is well suited for agriculture, and the greater part of which is currently in fact being used for agricultural purposes. Even if it were not, its high agricultural potential would allow it to be reclaimed.
. . .
This part of the evidence disclosed that water and sewage services could not be provided to all the lots covered by the application without changes to the existing infrastructure; and even then there is no guarantee that these services would not place an additional burden on the filtration plant of the municipality of Longueuil, which is already overloaded. According to the evidence, the changes to the system to serve these lots are currently estimated to cost some $15,000,000.
Finally, the town planner for the city of St‑Hubert, forecasting continued annual population increases of 4 to 6 percent, gave the Commission a projection of the municipality's requirements for development purposes until 1996. He testified that the reserved area in the provisional plan left the municipality 3,600 acres of undeveloped land south of Boulevard Laurier, where he said development should be undertaken in the next twenty years. His development assumption of 4 percent per annum would require 3,400 acres by 1996. Even on the optimistic assumption of 6 percent per annum, with the same density of five housing units per acre, he testified that for the next ten years there was ample land in the reserved area.
. . .
Finally, applicant reduced its claim at the hearing simply to authorization from the Commission to confer the registered titles for 1,033 lots which were the subject of the promises for sale, and also to alienate the remaining 426 lots. In the Commission's opinion acceding to such a request would simply be to depart from the language of ss. 29 and 31 of the Act unnecessarily without giving the purchasers any right or excluding them from the effect of the provisions of s. 26 of the Act. The position would have been the same after an amendment of the municipal zoning by‑law applicable to these lots.
I have cited lengthy extracts from this decision to emphasize the fact that the Commission's refusal was based on the criteria stated in s. 12 of the Act:
12. In rendering a decision or giving its advice on a matter referred to it, the commission shall particularly take into consideration the biophysical conditions of the soil and of the environment, the possible uses of the lot for agricultural purposes and the economic consequences thereof, and the repercussions that the granting of the application would have on the preservation of agricultural land in the municipality and the region, and on the homogeneity of the farming community and farming operations.
The Commission's decision is unimpeachable provided Winzen had no acquired rights at the time the Act took effect.
Winzen subsequently asked the Commission to review this decision in accordance with the power conferred on it by s. 18 of the Act. This application was dismissed because Winzen had not submitted any valid ground for review.
Following these failures Winzen challenged the Commission's decisions by a motion for evocation. As the Commission is protected by a privative clause, Winzen argued that it did not have the very jurisdiction Winzen had relied on; Winzen contended that the Commission should have recognized the acquired rights and declared that its authorization was not necessary, or that it was giving its authorization if it had jurisdiction. According to Benoît J. of the Superior Court, who heard the motion for evocation, Winzen maintained that [TRANSLATION] "it would have been tempted to ignore the Commission" ‑‑ which it ultimately did -- but it chose this procedure for reasons of caution as it appeared vis‑à‑vis third parties to be the owner of the 1,033 lots at issue. In support of its motion for evocation Winzen argued that the "Contracts for Deed" are sales subject to a suspensive condition which, because of the retroactivity enacted by art. 1085 C.C.L.C., are deemed to have been completed before the Act took effect and are not covered by it. Winzen further argued that the purchasers have an acquired right to the transfer of the right of ownership. Benoît J. dismissed these two arguments because in his opinion the "Contract for Deed" was only a promise of sale subject to a suspensive condition and because at the time the Commission rendered its decision Winzen was still the owner of the lots in question (Sup. Ct. Mtl., No. 500‑05‑004153‑803, February 16, 1981).
In the Court of Appeal (Winzen Land Corp. v. Commission de protection du territoire agricole du Québec, [1981] C.A. 383), Winzen made the same arguments and they were dismissed for the same reasons. However, L'Heureux‑Dubé J.A., as she then was, added at p. 386 that Winzen cannot plead for another in claiming acquired rights on behalf of the many purchasers who are not parties to this case:
[TRANSLATION] In the alternative, appellant submitted that "even admitting for purposes of argument that these contracts constitute a promise of sale, the purchasers nevertheless had an acquired right to the title, a right which has not been taken from them by law".
I would perhaps agree with this proposition of appellant if it was the purchasers who had asserted before the Commission the rights they claimed to have. Not only did the purchasers not appear before the Commission, they were not even impleaded before the Commission and are not parties to the case in the Superior Court or in our Court.
Under what rule can appellant plead for another, especially in a case where the possibility of conflicts of interest is so manifest?
Without deciding what powers the Commission may have in this respect, the purchasers may if they wish assert their rights before the Commission or in some other way.
Montgomery J.A., who agreed with L'Heureux‑Dubé J.A., also wrote at p. 387:
If Appellant wishes to obtain a declaration that the Act does not apply to this land or to have its rights clarified in any other way, it should apply to the civil courts and implead any other interested parties.
Paré J.A. agreed with his two colleagues.
As will be seen below, I respectfully disagree with the reasons of the Court of Appeal and of the Superior Court, although in my opinion the two courts arrived at the correct conclusions, namely that the Commission had jurisdiction.
In any case, the judgments of the Superior Court and of the Court of Appeal now have the effect of res judicata between the Commission and Winzen. Respondent Venne was not a party to those proceedings. However, it is he who has submitted the complete text of these judgments and the decisions of the Commission in support of his motion here.
By suggesting that the parties object in some other manner, the Court of Appeal in my opinion ran a risk which materialized, that of rendering two contradictory judgments.
Despite the Commission's repeated refusal to authorize Winzen to transfer the right of ownership and despite the judgments of the Superior Court and Court of Appeal affirming the Commission's jurisdiction and so, by implication but of necessity, deciding that Winzen could not lawfully, because of s. 29, transfer the right of ownership without the Commission's authorization, Winzen did in fact transfer the right of ownership to respondent for each of his two lots after he had prepaid the balance of the selling price over two years before it was due. This alienation was effected by notarial deeds on March 25, 1982. The two deeds are similar except as to the description of the lot and the selling price. I cite the main parts of each:
[TRANSLATION]
BEFORE . . .
Notary at Montréal, Province of Quebec,
Canada;
APPEARED:
WINZEN LAND CORPORATION LTD., a legally established corporation . . . acting and represented herein by . . . duly authorized thereto . . .
. . .
Hereinafter referred to as "THE SELLER",
WHO hereby sells with the usual legal guarantees, free and clear of all debts, encumbrances and hypothecs whatever, to:
Mr. DANIEL JOSEPH VENNE . . .
Hereinafter referred to as "THE PURCHASER"
here present and accepting, the following immoveable property, to wit:
D E S C R I P T I O N
. . .
POSSESSION AND CONDITIONS
By these presents the purchaser becomes, as of this date, absolute and indefeasible owner of what is sold hereby, with immediate possession, on the following charges and conditions, which he undertakes to observe, to wit:
. . .
P R I C E
This sale is made for and in consideration of the sum of FOUR THOUSAND ONE HUNDRED AND EIGHTY‑NINE DOLLARS ($4,189) . . . which the seller acknowledges receiving from the purchaser and for which full and final release is given.
SPECIAL CLAUSE
That the said deed of sale is made in accordance with a promise of sale under private seal dated May 14, 1977, a copy of which is attached to the original hereof after being certified as true and signed ne varietur by the parties hereto with and in the presence of the undersigned notary.
On June 9, 1982, respondent filed the application for declaratory relief which began the instant proceedings. The two main conclusions it sought are as follows:
[TRANSLATION] TO DECLARE the alienation made to applicant by the mis en cause Winzen Land Corporation Ltd. in the notarial deeds, Exhibit R‑2, of the immoveable property hereinafter described, to be good, legal and valid for all purposes . . .
. . .
TO AUTHORIZE applicant to use the immoveable property and/or lots in question for a purpose other than agriculture . . .
According to the transcript, the second conclusion was verbally discontinued at the Superior Court hearing.
The first conclusion is ambiguous. Despite its wording, what respondent really wants to know is whether the two notarial deeds transferring the right of ownership of the lots to him were concluded in breach of s. 29 of the Act, and whether he has acquired rights allowing him to obtain such transfer. However, even if s. 29 was infringed and respondent had no acquired rights, it does not follow that the deeds are void. As s. 30 of the Act provides, they are simply voidable and there is nothing to indicate that their annulment has been requested. This being the case, and although respondent remains owner of the lots until such annulment takes place, it cannot however be said that the alienation to him by Winzen was "legal and valid for all purposes". In such a case, in my opinion, the application should simply be dismissed in view of the way in which the conclusions sought were framed.
Further, both in its inscription in appeal in the Court of Appeal and in the submission it filed with this Court, appellant Commission asked the Court to declare that the notarial deeds of March 25, 1982 are voidable under s. 30 of the Act; and in my opinion, this request should be granted if s. 29 was infringed and if respondent had no acquired right to the alienation effected by those deeds.
Before concluding the statement of facts, I should say a few words about the only one which is disputed, very late in my opinion and for the first time in this Court. In its written submission, the mis en cause Winzen stated that with regard to one of the two lots at issue, lot 2‑78, Winzen did not retain a right of alienation over the contiguous lots, and this would place the lot beyond the scope of s. 29. Winzen referred in this regard to Exhibit R‑4, a subdivision plan for the residential development filed by the witness Victor Zenkovich at respondent's request. The plan is practically indecipherable and there is nothing specific or conclusive on the point in the witness Zenkovich's testimony. In fact, the "testimony" to explain the plan to the trial judge came mostly from counsel. Moreover, the judge made no distinction between the two lots, nor did the Court of Appeal, where Jacques J.A. wrote:
[TRANSLATION] The question is whether the notarial deeds of March 1982 recording alienation of the lots in question are valid and legal in light of this prohibition [that contained in s. 29], as the condition of contiguity has been met. [Emphasis added.]
([1985] C.A. 703, at p. 705)
There was also no distinction made in this regard between the 1,033 lots, including those of respondent, referred to in the earlier proceedings.
Finally, even if counsel for Winzen had succeeded in showing such an absence of contiguity, which in my view is not the case, the problem would remain in its entirety as to the other lot. As counsel quite candidly admitted at trial, the case at bar is a test case:
[TRANSLATION]
The COURT:
In fact, you have taken test lots to make a test case.
Mr. BRUNEAU
That's right.
Mr. DULUDE:
That's right, to make a test case.
The COURT:
It's a test case -- that's right.
Mr. BRUNEAU:
Definitely.
In these circumstances, in my opinion, counsel for Winzen cannot dispute this point at this stage of the proceedings.
On the other hand, the fact that this is a "test case" perhaps explains the inexplicable. One cannot help wondering what interest respondent could have in claiming lots which henceforth can only be used for agriculture but which would clearly seem to be too small for such a use.
III - Points at Issue
The parties were in general agreement on the points at issue, but framed them differently. I will summarize them in my own words. However, for a proper understanding of the first of these points, it will first be necessary to cite in part the two articles of the Civil Code of Lower Canada relied on by respondent and Winzen. These are arts. 1079 and 1085, which are contained in a section titled "Of Conditional Obligations":
1079. An obligation is conditional when it is made to depend upon an event future and uncertain, either by suspending it until the event happens, or by dissolving it accordingly as the event does or does not happen.
. . .
1085. The fulfillment of the condition has a retroactive effect from the day on which the obligation has been contracted . . .
It is also worth citing art. 1089, which defines a term:
1089. A term differs from a suspensive condition inasmuch as it does not suspend the obligation, but only delays the execution of it.
The first point at issue may be summarized as follows: is the obligation imposed on Winzen by the "Contracts for Deed" of May 14, 1977, to convey ownership to respondent a suspensive conditional obligation, the condition being performance by respondent of his own obligation to pay the price? If so, in view of art. 1085, the transfer of ownership would be retroactive to May 14, 1977, when the Act had not yet taken effect; it would therefore not be covered by the Act.
The second point at issue is as follows: if the "Contracts for Deed" of May 14, 1977, did not create a suspensive conditional obligation, are the rights Winzen and respondent conferred on each other before the Act took effect "acquired rights" to which the Act cannot be applied?
I will state my conclusions forthwith: the "Contracts for Deed" did not create a suspensive conditional obligation and the rights conferred by this agreement are not "acquired rights" that fall outside the scope of the Act.
Before leaving the subject of the points at issue, I feel it is necessary to emphasize that both the parties and the lower courts kept well away from the judicial and academic controversies regarding promises of sale to which arts. 1476 and 1478 of the Civil Code have given rise. Several of the parties called the "Contracts for Deed" promises of sale. Monet J.A. regarded them as "pre‑contracts". Jacques J.A. wrote that they were bilateral promises of sale; but whatever the label attached to these agreements in passing, the primary concern was with their content and this was undoubtedly correct, as the express provisions of the "Contracts for Deed" do not give rise to the controversies surrounding the interpretation of arts. 1476 and 1478.
In my opinion, the "Contracts for Deed" are actually instalment sales, except that they are sales of immoveable, the taking of possession is deferred, and the transfer of the right of ownership is also deferred until a notarial deed is executed, such execution to be effected after the payment of the price by the purchaser. Once again, however, the question of how these agreements are to be described was not really discussed and my classification of them as "instalment sales" is merely a suggestion.
IV - Judgments of Lower Courts
In the Superior Court Vaillancourt J. allowed respondent's application for two reasons. First, he considered that the "Contracts for Deed" signed on May 14, 1977, conferred on respondent the [TRANSLATION] "right to be declared owner" and that this right was [TRANSLATION] "subject to a condition which is also legal and not voidable". He relied on several writers, including Planiol and Ripert, Traité pratique de droit civil français (2nd ed. 1954), from which he cited the following passage in vol. 7, p. 392, No. 1040:
[TRANSLATION] If a new law is passed in the interval between the agreement and the fulfillment of the condition, it will not apply to the obligation which remains subject to the old law, as if it had been from the outset. This result has sometimes been explained by saying that if the new law is inapplicable, this is because the conditional creditor already had an acquired right when it came into effect, and the rule against retroactive legislation suffices to exclude it. The explanation is incorrect: the conditional creditor does not yet have a right, and if his debt is subsequently covered by repealed legislation, this is the effect of the retroactive nature of the condition, not the anticipated existence of a right in his favour.
According to Vaillancourt J., this right to the transfer of the right of ownership is acquired -- despite what Planiol and Ripert say about it in the passage quoted -- and the judge's second reason is that respondent cannot be deprived of it without giving the Act retroactive effect.
The Court of Appeal dismissed the Commission's appeal, Monet J.A. dissenting: [1985] C.A. 703. However, McCarthy and Jacques JJ.A., making up the majority, came to the same conclusion for different reasons.
McCarthy J.A. considered that the payment of the price b