RICHARD GOSSE Applicant And: TOWN OF CONCEPTION BAY SOUTH Respondent - v. –, 2019 NLSC 126

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Gosse v. Conception Bay South (Town) , 2019 NLSC 126 Date : June 25, 2019 Docket : 201801G6047 Between: RICHARD GOSSE Applicant And: TOWN OF CONCEPTION BAY SOUTH Respondent - AND – Docket : 201801G6102 Between: CHRISTOPHER BUTLER Applicant And: TOWN OF CONCEPTION BAY SOUTH Respondent Before: Justice David B. Orsborn Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: June 6, 2019

Summary: Richard Gosse and Christopher Butler claimed that their properties had been constructively expropriated by the Town of Conception Bay South by virtue of a Town resolution restricting development in an area designated by the Town as a flood zone. The properties in question are wholly or partly in the flood zone. Held : The applications were dismissed. Neither Gosse nor Butler satisfied the stringent requirements for a finding of common law constructive expropriation.

The resolution restricted but did not prohibit development and did not remove all rights of ownership or all reasonable uses of the properties. Appearances: Daniel W. Bennett Appearing on behalf of the Applicants Jerome P. Kennedy, Q.C. and Amanda M. Buis Appearing on behalf of the Respondents Authorities Cited: CASES CONSIDERED: Butler v. Town of Conception Bay South , 2017 NLTD(G) 196; Lynch v. St. John’s (City) , 2016 NLCA 35 ; Mariner Real Estate Ltd. v. Nova Scotia (Attorney General) , 1999 NSCA 98 ; STATUTES CONSIDERED: Urban and Rural Planning Act, 2000 , SNL 2000, c. U-8 .

REASONS FOR JUDGMENT Orsborn, J. : INTRODUCTION [ 1 ] Richard Gosse and Christopher Butler claim that their properties have been constructively expropriated—effectively confiscated—by the Town of Conception Bay South (the “Town”). [ 2 ] The Town commissioned an engineering firm to assist in developing a Stormwater Management Plan for the Sweetwater Brook drainage basin (“catchment area”). Part of the study involved the identification of the floodplain area—the area to which water would flow and in which it would accumulate in various rainfall conditions.

The study outlined a “100-year” flood line and recommended that, for the purpose of controlling development in the floodplain, a 15-metre buffer zone be established on either side of the flood line. (In total, referred to in this decision as the “flood zone”). [ 3 ] In October 2014, the Town Council passed the following resolution: Be it so resolved that approval be given to restrict all development within the designated 1:100-year flood zone and 15 metre buffer as indicated in the Steadywater Brook Stormwater Management Plan, and update the Municipal Plan as required. [ 4 ] The resolution is not yet part of the Municipal Plan—See the Urban and Rural Planning Act, 2000, SNL 2000, c.

U-8 (“ URPA ”). [ 5 ] Christopher Butler and Richard Gosse each own property that is either wholly (Butler) or partially (Gosse) in the flood zone. They have asked the Court for a declaration that, by virtue of the above resolution, their properties have been constructively expropriated by the Town and that they therefore have a right to engage the statutory process for claiming compensation for expropriation. Issue [ 6 ] Does the October 2014 resolution result in constructive, or de facto , expropriation of the Butler and Gosse properties? If so, should declaratory relief be granted? discussion

The Butler Property: 449-455 Conception Bay Highway, CBS (also referred to as being on Donnybrook Road) [ 7 ] There are two buildings on this property—a shed and a greenhouse—and there is also an area used for growing vegetables. (See affidavit of Corrie Davis, the Town’s Director of Planning and Development). [ 8 ] The property is zoned OSC—Open Space Conservation—a category which has limited permitted uses—conservation, T’Railway Park, cultural, telecommunications structures and antenna, and utilities. Discretionary uses available are agriculture, public parks, wharves, marinas and docks.

A single residential dwelling is neither a permitted nor a discretionary use. [ 9 ] Butler has made a number of attempts to develop or otherwise deal with his property. [ 10 ] On October 8, 2014, he submitted to the Town an application to construct a residential dwelling. This application was turned down because of the OSC zoning restrictions. The Town’s letter of rejection, in part: The subject property is zoned Open Space Conservation. In the Open Space Conservation zone, single dwellings are not listed as a permitted or discretionary use.

In accordance with Regulation 10.8 of the Town’s Development Regulations, uses that are not specifically listed as permitted or discretionary uses in a zone are not permitted. As a result, your proposed development does not comply with the Town’s Development Regulations. [ 11 ] A subsequent appeal of the Town’s decision was filed with the Eastern Regional Appeal Board; the appeal was dismissed. Butler filed an appeal with this Court pursuant to

section 46 of URPA —the appeal has not been pursued. [ 12 ] In September 2015, Butler applied to have the Town rezone his property from OSC to Residential Medium Density. The application was denied on the basis that the Stormwater Management Plan identified the property “to be within the 100-year floodplain and buffer where no further development is permitted because of flooding risk”. [ 13 ] In April 2016, Butler submitted another application for a permit to build a residential dwelling.

That application was denied on the basis of the OSC zoning; the Town’s rejection letter added: In addition, this property lies within the 1:100-year flood zone and 15 metre buffer identified in the Steadywater Brook Storm Water Management Plan. It is incumbent upon the Town to ensure that development occurs in a safe manner with no potential hazards such as flooding. [ 14 ] Butler then served a Purchase Notice on the Town and the Minister of Municipal Affairs pursuant to

section 96 of URPA . This statutory process provides for, in effect, a deemed expropriation when the exercise of municipal regulatory development authority renders land “incapable of reasonably beneficial use”. The Purchase Notice was refused on the basis that the Purchase Notice provisions were not available since development is prohibited for environmental reasons—see URPA ,

section 98 ; the Minister was also not of the view that the property was incapable of reasonably beneficial use. An application for judicial review of the Minister’s decision was dismissed—see Butler v.

Town of Conception Bay South , 2017 NLTD(G) 196. [ 15 ] Undaunted, Butler has now asked the Court to find that his property has been constructively expropriated; that is, although the formal expropriation process has not been engaged, the restrictions imposed by the 2014 resolution have, in fact, taken his property, or at least a beneficial interest in it, from him. [ 16 ] The Town argued that, in view of Butler’s earlier attempts to seek redress for his inability to develop his property, this present application is an abuse of process and that the issues engaged have already been decided. [ 17 ] I do not agree.

The permit and rezoning applications do not involve the same issues. The Purchase Notice litigation comes closer, particularly in terms of the assessment of the potential uses of the property. However, the issue of the Town’s actual acquisition of a beneficial interest in Butler’s property—more on this later—was not in issue in the Purchase Notice case, a case which considered the statutory compensation process set out in sections 96 - 98 of URPA . Further, I note that the decision both of the Minister and of the Court turned on the

interpretation and application of

section 98 of URPA , the conclusion being that the Purchase Notice process was not available when the development restriction was for the purpose of “protecting a watershed area or for another environmental reason …”. I note further that, in the Court’s decision, Justice Stack was careful to point out that the issue of constructive expropriation was not before him. [ 18 ] One cannot fault Butler for resorting to all available means to address the development restrictions imposed by both the OSC zoning and the 2014 resolution.

His claim for relief based on constructive expropriation—a common law claim which depends on the establishment of certain circumstances—has not been previously advanced or considered. Accordingly, this claim is not an abuse of process. The Gosse Property: 456-470 Conception Bay South Highway [ 19 ] Only a portion—approximately 60 percent—of this property falls within the flood zone. In turn, a portion of the flood zone property is zoned OSC, the balance being Residential Mixed.

While not completely clear, it appears that Gosse is seeking a declaration that all of the property within the flood zone has been constructively expropriated and that the remainder of the property—regardless of zoning—has been injuriously affected, thus giving rise to a claim for compensation on both accounts.

The evidence of Corrie Davis is to the effect that as a whole, the Gosse property appears to have been used for the parking of commercial vehicles such as buses, trailers and limousines. [ 20 ] Since the claims involve similar legal issues and are put forward on a common factual basis, I will deal with them together. Any reference to Butler should be taken as referring to Gosse unless the context clearly indicates otherwise. [ 21 ] Robin Summers, a civil engineer, provided reports that explain the concepts of drainage catchment area, floodplain area, and

flood buffer zone. He did not take issue with the delineation of the flood zone and agreed that it is in the public interest for a municipality to develop a stormwater management plan which identifies areas at risk and outlines strategies to lessen or otherwise deal with the potential consequences of flooding. [ 22 ] As I appreciate Mr. Summers’ evidence—given in a balanced manner—it points out that there are avenues other than development restrictions that can be utilized to address the risk of flooding.

As he put it in his affidavit: Common engineering storm water principles tell me that larger culvert structures, well defined waterway channels that contain flows, waterway berms, and property filling that puts property elevations above flood elevations will all help in removing properties from a flood zone….

There are engineering methods to mitigate flooding, however, there are costs and resulting implications in many circumstances to these mitigation measures.… I can, without question, state that if the Town did allow these owners to fill their properties to raise the elevation to an appropriate height, this would put the properties above any anticipated flood level.

I also estimate that the backfill requirements to achieve an appropriate height would not be that significant. … [T]he only caveat with filling my client’s property to a level freeing it of the flood zone, would be the consequential effects, as the excess water would flow to another property or area, increasing the food water elevation of that area. [ 23 ] In his 2018 report, Butler suggested that the designation by the Town of the flood zone area was for “the purpose of a catchment area for flooding”.

However, when testifying, he acknowledged that the Town did not create the catchment area, which is simply an area into which water flows by virtue of elevation and topography. As noted, I take his evidence as being directed to the point that a municipality could install infrastructure that may—albeit with consequential effects—change the configuration of the catchment area by changing or otherwise diverting the natural flow of water.

And, again as noted, I take his evidence to suggest that by allowing certain development following infilling—an increase in elevation of property—the potential of flood damage to the property in question can be reduced or eliminated, but not without the possibility of adverse consequences to nearby landowners. [ 24 ] Summer’s evidence was offered to support the view that a municipality has options to address flooding risk other than blanket restrictions on development.

The argument is that a restriction on development avoids expenditure on infrastructure and effectively orders that property in the flood zone remain available to collect the flow of water when flooding occurs. The conclusion, as I appreciate the argument, is that by so doing, the Town has acquired a beneficial interest in the property by asserting, in effect, that the Town has taken to itself the right to control the natural flow of water on and around the property.

The 2014 Resolution [ 25 ] I reproduce it here for ease of reference: Be it so resolved that approval be given to restrict all development within the designated 1:100-year flood zone and 15 metre buffer as indicated in the Steadywater Brook Stormwater Management Plan, and update the Municipal Plan as required. [ 26 ] The Resolution has not yet been incorporated into the Municipal Plan—see URPA ,

section 10 and

section 25 . However, the Town takes the position that it is guided by the Stormwater Management Plan and the resolution as “a matter of policy”. [ 27 ] Accordingly, there is an issue as to whether the resolution is of any legal effect and whether it has the legal capacity to ground a finding of constructive expropriation. I raised this issue with the parties; both agreed that I should hear the matter as if the resolution were a regulation duly adopted and incorporated into the Municipal Plan.

This seems to me to be a rather problematic course to adopt; nonetheless, in view of the positions of the parties, I will consider the case as presented. [ 28 ] The Town introduced evidence to suggest that the resolution does not in fact prohibit development in the flood zone, but rather only “restricts” it. [ 29 ] Corrie Davis deposed: 11. In practise, a restriction on development within the 1:100-year flood zone and 15m buffer does not mean that any and all development would be prohibited. 12.

The Town has approved development within the 1:100 flood zones and 15m buffer for Steadywater Brook Storm Water Management Plan.

For example, in 2018 an access from Greeleytown Road to 25 Busseys Road which lies within the 1:100 flood zone and 15m buffer and crosses Steadywater Brook was upgraded. [ 30 ] However, I note that when the Town refused Butler’s 2015 request to rezone his property from OSC, it did so in the following terms—(the reference to Donnybrook Road is to Butler’s property): Be it so resolved that a request to redesignate and rezone land fronting on Donnybrook Road from Open Space Conservation (OSC) to Residential Medium Density (R-2) be denied on the grounds that Donnybrook Brook Stormwater Management Plan identified the subject property to be within the 100-year floodplain and buffer where no further development is permitted because of the flooding risk. [ 31 ] I also note that the Town’s response to Butler’s 2016 application for a building permit could be read as suggesting a ‘no development’ application of the resolution. [ 32 ] These decisions from the Town perhaps reflect no more than an unfortunate choice of wording.

They may conceivably be relevant if the Court was reviewing a decision of the Town. But the present application raises the effect of the 2014 resolution as passed. Based on the wording of the resolution and the evidence of Mr. Davis, I accept that the resolution, in and of itself, does not prohibit all development but rather restricts development on property within the flood zone, however zoned. In other words, where

zoning may otherwise permit a requested development, the 2014 resolution would not preclude the development entirely, but may permit it to proceed, perhaps with conditions. [ 33 ] I do note that there is no evidence of either Butler or Gosse having submitted an application for either a discretionary or a permitted use under the OSC zoning, and accordingly, no evidence of any application being rejected solely on the basis of the 2014 resolution. [ 34 ] The resolution does not yet have legal effect. (But see paragraph 27 above.) It may well be the case that when the Town’s Municipal Plan is formally amended, the floodplain regulation may reflect the provincial “Policy for Flood Plain Management”, which policy contemplates that, for land under provincial jurisdiction, development in a floodplain may be “permitted with conditions”. [ 35 ] In Lynch v.

St. John’s (City) , 2016 NLCA 35 , the Court of Appeal reviewed the law on constructive expropriation. [ 36 ] Two elements must be established by the claimant: (

i) The acquisition by the municipal authority of a beneficial interest in the property or flowing from it; and (ii) Removal of all reasonable uses of the property. [ 37 ] Findings of constructive expropriation are extremely rare in Canada. [ 38 ] Lynch cites with approval several passages from the decision of Cromwell, J.A. (as he then was) in Mariner Real Estate Ltd. v. Nova Scotia (Attorney General) , 1999 NSCA 98 . [ 39 ] From paragraph 39 of Lynch , referring to paragraphs 38-42 of Mariner : [38] The scope of claims of de facto expropriation is very limited in Canadian law.

They are constrained by two governing principles. The first is that valid legislation (primary or subordinate) or action taken lawfully with legislative authority may very significantly restrict an owner’s enjoyment of private land…. [39] De facto expropriation is conceptually difficult given the narrow parameters of the Court’s authority which I have just outlined. While de facto expropriation is concerned with whether the “rights” of ownership have been taken away, those rights are defined only by reference to lawful uses of land which may, by law, be severely restricted.

In short, the bundle of rights associated with ownership carries with it the possibility of stringent land use regulation. … [42] In this country, extensive and restrictive land use regulation is the norm. Such regulation has, almost without exception, been found not to constitute compensable expropriation. It is settled law, for example, that the regulation of land use which has the effect of decreasing the value of the land is not an expropriation.

As expressed in Ian MacF Rogers, Canadian Law of Planning and Zoning (looseleaf, updated to 1999) at s.5.14, “The law permits the appropriation of prospective development rights for the good of the community but allows the property owner nothing in return.” … [ 40 ] And from paragraph 40 of Lynch : Cromwell J.A. observed, at paragraph 47, that compensation for de facto expropriation has rarely been awarded in Canada: [47] In light of this long tradition of vigorous land use regulation, the test that has developed for applying the Expropriation Act to land use restrictions is exacting and, of course, the respondents on appeal as the plaintiffs at trial, had the burden of proving that they met it.

In each of the three Canadian cases which have found compensation payable for de facto expropriations, the result of the governmental action went beyond drastically limiting use or reducing the value of the owner’s property…. [48] In reviewing the de facto expropriation cases, R.J. Bauman concluded, and I agree, that to constitute a de facto expropriation, there must be a confiscation of “...all reasonable private uses of the lands in question.”: R.J. Bauman, ”Exotic Expropriations : Government Action and Compensation” (1994), 54 The Advocate 561 at 574.

While there is no magic formula for determining (or describing) the point at which regulation ends and taking begins, I think that Marceau, J.’s formulation in Nilsson is helpful. The question is whether the regulation is of “ sufficient severity to remove virtually all of the rights associated with the property holder’s interest .” (at para 48). [Underlining in original.]

[ 41 ] In Lynch , the court found that the land use controls—for the purpose of ensuring a continued high quality municipal water supply—effected the appropriation of the landowners’ beneficial interest in the ground water flowing over the land in question.

As Barry, J.A. put it at paragraph 60: It is sufficient to conclude, as I do, that the Legislature and the City purported to take away the Lynches’ right to appropriate the groundwater on their land and to give the City a beneficial interest in the Lynch property, consisting of the right to a continuous flow of uncontaminated groundwater downstream to the City’s water facilities. [ 42 ] In this case, there is much to be said for the argument that, to the extent that the resolution absolutely prohibits development, the Town has taken from Butler the right to manage the flow of ground water on his property.

Through the use of infrastructure and development controls, the Town is attempting to manage the flow of water in the flood zone, all with the purpose of managing the potential consequences of flooding. Thus, and again to the extent that the resolution actually prohibits development, the Town has reserved to itself the right to manage the flow of water on the property. [ 43 ] But I do not need to decide whether or not there has been a taking by the Town sufficient to satisfy the first necessary element of constructive expropriation.

I say this for two reasons. [ 44 ] Firstly, the resolution on its face does not prohibit development. Rather, it restricts development, and the evidence is that some development has been permitted within the flood zone. It may be that circumstances could present that could establish that the manner in which the resolution was being applied amounted to an absolute prohibition. That is not the case here, some unfortunate Council wording notwithstanding (see paragraphs 30-32, supra ).

There is no evidence of any specific development application being rejected solely on account of the 2014 resolution. [ 45 ] Secondly, I am not satisfied that either Butler or Gosse have established that “virtually all of the aggregate incidents of ownership” have been taken away. Butler has a shed, a garage and vegetable garden on his property. Gosse uses his property, at least in part, as a parking lot for commercial vehicles. There is no evidence that these uses are to be restricted or eliminated.

These continued and permitted uses of the lands are a far cry from being simply a “right to keep the land unused in its natural state” ( Lynch , paragraph 63 ). [ 46 ] The line between regulation and confiscation has not been crossed.

SUMMARY AND CONCLUSION [ 47 ] Neither Butler nor Gosse has established the requisite elements of constructive e expropriation. The applications for declaratory relief are dismissed with Column 3 costs, with costs on the hearing of this matter being for one counsel only. Any taxation of costs should ensure that there is no double counting of costs by virtue of there being two separate Court applications. _____________________________ David B. Orsborn Justice