2020 NLSC 19, 2020 NLSC 19

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Hickey (Re) , 2020 NLSC 19 Date : February 6, 2020 Docket : 201901G2758 In The Matter of the Quieting of Titles Act , R.S.N.L. 1990, c.

Q-3 , and amendments thereto; And In The Matter of all that piece or parcel of land situate at civic number 74-88 Duff's Road, in the Town of Holyrood, Electoral District of Harbour Main, in the Province of Newfoundland and Labrador, Canada; And In The Matter of an Application by James Hickey, of the Town of Harbour Main, in the Province of Newfoundland and Labrador, Canada Before: Justice Daniel M. Boone Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: December 17, 2019

Summary: T he Applicant purchased property in a municipal tax sale. He applied to quiet the title to the property. The Crown opposed the application, claiming that the property was Crown land. The Court determined that, although a municipal tax sale extinguishes the title of all others, it does not affect the interests of the Crown. The claim of the Crown was not defeated by laches or estoppel. Appearances: Keith S. Morgan Appearing on behalf of the Applicant

Donald E. Anthony Appearing on behalf of Her Majesty in Right of Newfoundland and Labrador Shane R. Belbin Appearing on behalf of the Town of Holyrood Authorities Cited: CASES CONSIDERED: Savoie v. Savoie (1979), (NB CA), 25 N.B.R. (2d) 541, [1979] 2 A.C.W.S. 10 (C.A.);Prevost v. Marsman (1987), (NS CA), 76 N.S.R. (2d) 83, 189 A.P.R. 83 (C.A.); Begg v. East Hants (Mun.) (1987), (NS SC), 80 N.S.R. (2d) 320, 200 A.P.R. 320 (S.C. (T.D.)); Kirton v. Frolack, (ON SC), [1973] 2O.R. 185, 33 D.L.R. (3d) 281 (H.C.J.); Devereaux v.

Saunders, (1977), 26 N.S.R. (2d) 301, 40 A.P.R. 301 (S.C. (T.D.)), aff’d (NS CA), 26 N.S.R. (2d) 283, 40 A.P.R. 283 (S.C. (App. Div.)); United Taxi Drivers’ Fellowship of Southern Alberta v.Calgary (City), 2004 SCC 19; Zeitel v. Ellscheid, (SCC), [1994] 2 S.C.R. 142; Canada (Attorney General) v. Thouin,2017 SCC 46; Carter v. Pasadena (Town) (2000), (NL SC), 197 Nfld. & P.E.I.R. 178, 591 A.P.R. 178 (Nfld. S.C.(T.D.)); M. (K.) v. M. (H.), (SCC), [1992] 3 S.C.R. 6; Kenora (Town) Hydro Electric Commission v. Vacationland DairyCo-operative Ltd., (SCC), [1994] 1 S.C.R 80; Mount Sinai Hospital Centre v.

Quebec (Minister of Health and SocialServices), 2001 SCC 41; Hill v. Nova Scotia (Attorney General), (SCC), [1997] 1 S.C.R. 69. STATUTES CONSIDERED: Municipalities Act, S.N. 1999, c. M-24; Quieting of Titles Act, R.S.N.L. 1990, c. Q-3;

Interpretation Act,R.S.N.L. 1990, c. I-19; Assessment Act, R.S.N.L. 1990, c. A-18; Lands Act, S.N.L. 1991, c. 36; Municipalities Act, 1999, S.N.L. 1999, c.M-24. TEXTS CONSIDERED: Garner, Bryan A., Black’s Law Dictionary, 9th ed. (St. Paul: Thomson Reuters, 2009). REASONS FOR JUDGMENT Boone, J.: INTRODUCTION [1] The issue to be resolved in this case is whether a tax sale under the Municipalities Act, S.N. 1999, c. M-24, conveys clear titleto the purchaser sufficient to defeat a claim that the property is Crown land.

If that question is answered in the negative, then it will benecessary to consider whether the equitable concepts of laches or estoppel preclude the Crown from asserting ownership of the property. FACTS [2] James Hickey (the “Applicant”) claims the property at 74-88 Duff’s Road, Holyrood (the “Property”), under a tax deed datedNovember 23, 2003, from the Town Council of the Town of Holyrood (the “Town”). The recitals in the deed state that: (

i) the owner of the Property was liable to the Town for real property tax; (ii) notice of arrears was served (by posting on the Property); (iii) the arrears were not paid; (iv) the Town resolved to sell the Property by public auction; and (

v) the Applicant made an acceptable bid to purchase the Property at the public auction. [3] The operative words of the tax deed stated that the Town conveyed to the Applicant “all of its right, title and interest in and to”the Property. [4] The Property is 1.360 hectares of vacant, forested land fronting on Duff’s Road. Much of Duff’s Road runs through similarlyvacant and forested land.

There are several developed residential properties located on one side and also across the road from theProperty. [5] The Notice of Tax Arrears posted on the property stated the following: According to our records this property came into arrears of taxes in the year 1996 when Owner Unknown was responsible for paymentof the taxes. Payment was not made on these tax arrears for the following years: 1996, 1997, 1998, 1999, 2000, 2001 and 2002. 2003. [6] There was no evidence offered by the parties as to how this Property came to be assessed for taxes or assigned a civic

number. Neither counsel for the Town nor the Crown could explain the statutory or regulatory mechanism that triggered the assessment. [ 7 ] The Applicant applied for a Certificate of Title under the Quieting of Titles Act , R.S.N.L. 1990, c. Q-3 . He served that application on the provincial Crown.

The Crown responded to that notice with correspondence asserting that after “detailed review”, it had determined that the property “is Crown lands”. [ 8 ] At a prior hearing of the quieting application, Justice McGrath directed that the questions of the effect of the tax deed and the application of the doctrines of laches and estoppel be heard before a final decision on the quieting would be rendered. Justice McGrath also ordered that the Town of Holyrood could participate in this hearing as an intervenor.

STATUTORY PROVISIONS [ 9 ] Resolution of the question of the effect of the tax deed is an exercise in statutory

interpretation. In this case, certain statutory provisions also bear on consideration of the application of laches and estoppel against the Crown: Municipalities Act, 1999, S.N.L. 1999, c. M-24 112.

(1) A council may impose an annual tax, to be known as "the real property tax", on the owners of real property within the municipality. … 118 . The following real property is exempt from the real property tax: (

a) real property belonging to Canada or a province of Canada; … 134.

(1) Taxes fixed, established and imposed in respect of real property, including the real property tax, business tax, where the owner of the business is also the owner of the real property occupied by that business, and water and sewage tax, where the water and sewage system services the real property owned by the person who is taxed for that service, together with interest owing on those taxes, constitute a lien upon that real property except where the real property is sold for tax arrears by the council. … 137.

(1) Where taxes on real property owed under this Part are in arrears, the clerk shall serve upon the owner and encumbrancers of the real property to which the taxes apply a notice signed by the clerk which shall contain (

a) a general description of the real property affected; (

b) the amount of arrears of taxes owing in respect of the real property, the year in which the arrears of taxes were imposed and the person in whose name the real property was then assessed; and (

c) a statement that the real property is liable to be sold under this Act for the arrears, with interest and the expenses of and incidental to the arrears unless they are paid within 60 days from the date of the notice. …

(3) Where the owner of the real property taxed under this

Part is unknown or the clerk has not been able to obtain information respecting ownership or encumbrances, the notice shall be posted in a conspicuous place on the real property affected.

… 139 . After the time limit indicated in the notice required to be given under

section 137, the council on the application of the clerk shall, by resolution, direct that the real property be sold. 140 .

(1) The clerk shall immediately upon receipt of a copy of the resolution referred to in

section 139 proceed to advertise the real property referred to in the resolution for sale by public auction at a time and place that shall be stated in the advertisement. … 141 .

(1) At the time and place mentioned in the notice of sale the clerk shall, unless the arrears of taxes and interest and the expenses incidental to those proceedings and sale are then, or have been previously, paid to him or her, proceed to sell at public auction the real property or portions of the real property that in his or her judgment are sufficient to pay those taxes, interest and expenses. … 143 .

Where real property is sold for taxes and the sale is set aside for an error, irregularity or other cause, the lien on the real property shall not as a result be discharged but shall continue for the same time as if the date of the setting aside were the date on which the sale took place and the property may again be sold unless the taxes, interest and expenses against it are paid. … 146 …

(3) Where real property has been sold under this Act for arrears of taxes, the council shall give to the purchaser a valid conveyance in the name of the municipality signed by the mayor or chairperson and the clerk or the person appointed by council and sealed by the municipality. … 147 . The conveyance referred to in

section 146 shall be conclusive evidence that the provisions of this Act with reference to the sale of the real property described in that conveyance have been fully complied with, and everything necessary for the legal perfection of that sale has been performed, and shall have the effect of vesting the real property in the purchaser, his or her executors, administrators or assigns absolutely free from encumbrances. S.N. 1999, c. 38 39.

(2) Section 147 of the Act is amended by adding immediately after the word "encumbrances" the words "of the municipality". S.N. 2011, c. 7

Section 147 of the Act is amended by deleting the words "of the municipality" and substituting the words "except a claim of the

Crown and an easement".

Interpretation Act , R.S.N.L. 1990, c. I-19 12. No provision in

an Act is binding on the Crown or affects the Crown or the Crown's rights or prerogatives unless it is expressly stated in it that the Crown is bound by it. Assessment Act , R.S.N.L. 1990, c. A-18 2 .

In this Act (a) "assess" means to value a property for tax purposes whether by an inspection to determine its fair market value or by use of an adjustment multiplier, and "assessment" has a corresponding meaning; ( a.1 ) "assessment agency" means the corporation incorporated under the Corpo r ations Act to conduct assessments under this Act; (b) "assessor" means a person designated by the director as an assessor and who is employed by the assessment agency to carry out assessments under this Act; … 3.

(1) Where a tax is imposed on property by a council, all the property in the municipality, whether or not it is subject to taxation, shall be assessed in accordance with this Act, but if a property is not assessed the failure to assess that property does not affect the validity of the assessment of the remaining property in the municipality. … Lands Act , S.N.L. 1991, c. 36 2. In this Act … (b) "Crown lands" means (

i) all lands within the province, except (

A) lands that may be in the use or occupation of a department of the government of the province or of an officer or servant of a department as an officer or servant,

(

B) those lands that may, before the enactment of this Act, have been lawfully set apart or appropriated for a public purpose, and (

C) lands lawfully alienated from the Crown, (ii) lands referred to in subsection 21(1) and subsection 22(2), (iii) lands considered to be Crown lands under

section 55, and (iv) lands declared to be abandoned lands under

Part II; … 36.

(1) Notwithstanding a law or practice to the contrary, no period of possession of Crown lands after December 31, 1976 , counts for the purpose of conferring upon a person an interest in the lands so possessed unless the period is permitted to count as against the Crown for the constitution of that interest under or by virtue of

an Act of the province, or as a condition of a grant, lease, licence or other document validly made or issued by or on behalf of the Crown under that Act. ANALYSIS [ 10 ] The Applicant says that application of principles of statutory

interpretation leads to the conclusion that the effect of the tax deed from the Town was to vest in him full and clear legal title to the Property. Even if this is not the correct

interpretation, then the Applicant argues that his payment of taxes in reliance on the tax deed and paying taxes in response to Notices of Assessment estops the Crown from asserting a position in derogation from it, or the passage of time without action by the Crown precludes it from now asserting ownership. [ 11 ] The position of the Crown is that the tax deed could not, and did not, affect the status of the property as Crown land.

As to the equitable arguments, the Crown says that the actions of the municipality in taxing the property or selling it for tax arrears could not create an estoppel as against the Crown, that estoppel by conduct does not in any event lie against the Crown, and the application of the doctrine of laches to the alienation of land is specifically precluded by the Lands Act . [ 12 ] The Town participated in this proceeding to assist the Court in understanding the process of tax sales, and it did not support either party.

The Effect of the Tax Deed [ 13 ] By the terms of the tax deed, the Town conveyed to the Applicant “all of its right, title and interest in and to” the Property. If not for the operation of

section 146 and 147 of the Municipalities Act, 1999 , S.N.L. 1999, c. M-24 , the deed would have had no effect because the Town had no right, title or interest in the Property to convey. Under

section 134 of the Act, a municipal tax claim constitutes a lien on the property “except where the real property is sold for tax arrears by the council”. [ 14 ] This brings us to consideration of the effect of the statutory provisions governing municipal tax sales. [ 15 ]

Section 141 of the Municipalities Act, 1999 authorizes the Town to sell, by public auction, property in respect of which there are tax arrears owing. [ 16 ] Once a bid for the subject property is accepted at public auction,

section 146 mandates the council to provide the successful bidder with a “valid conveyance in the name of the municipality”. Validity speaks to sufficiency of form, imposing a requirement only that the instrument be effective in accordance with its terms. [ 17 ] The important provision to consider in order to resolve this issue is

section 147 of the Municipalities Act, 1999 . I parse the wording in this way. First, the

section states that a tax deed is conclusive evidence that the Act has been fully complied with and the sale legally perfected. [ 18 ] Second, the

section states that the effect of a tax deed is to vest the real property in the purchaser. The

interpretation of this part of the provision is at the heart of this matter. [ 19 ] Third, the

section states that the vesting of the property in the purchaser is “free from all encumbrances”. Soon after the Municipalities Act, 1999 was passed, this

section was amended to add the limiting words “of the municipality”. This had the effect of precluding the municipality from asserting a statutory lien over the property sold. In 2011 – after the date of the tax deed in question – this

section was amended again to add an exception so that this part of the provision now reads: “absolutely free from all encumbrances except a claim of the Crown and an easement”. The Applicant relies on the inserted phrase “except a claim of the Crown” to support his argument that this tax deed, which predated the amendment, divested the Crown. I will return to consider this argument after considering

the meaning of the statutory statement that the effect of the deed is to vest the real property in the purchaser. The Conveyance … shall have the effect of Vesting the Real Property in the Purchaser, his or her Executors, Administrators or AssignsAbsolutely [20] The Applicant argues that a municipal tax deed under the Municipalities Act, 1999 provides the purchaser with a good, rootedtitle to the property, regardless of the quality of the title that the delinquent taxpayer had to the property.

The Crown relies on a line ofcases that holds that a tax deed can only convey the extent of interest that the delinquent taxpayer had in the property, and cannot defeatthe interest of the true owner who was not aware of the tax liability. The Crown also argues that, in any event, the Municipalities Act,1999 is not binding on the Crown. [21] The line of authority relied upon by the Applicant is best represented by the New Brunswick Court of Appeal decision in Savoiev. Savoie (1979), (NB CA), 25 N.B.R. (2d) 541, [1979] 2 A.C.W.S. 10 (C.A.). That case concerned a contest overtitle to land sold for taxes in 1946.

The defendant claimed title based on a chain of title originating in a Crown Grant. The plaintiffclaimed title based on the tax deed. At the time that the land was assessed and then sold for taxes, it was in the possession of a personwho stood outside the chain of title on which the defendant relied. The defendant claimed that the tax deed did not defeat his paper titlebecause the property taxes had been assessed to the person in possession who was not the true owner. The trial judge decided the contestin favour of the paper-title holder, holding that the tax deed did not defeat his title.

The Court of Appeal, at paragraphs 27-31, disagreed,relying on established authority: 27 It has long been the law, subject to the varied provisions of different acts, that a valid tax sale extinguishes every claim upon theland and confers a clear title in fee simple. See:

(1) Tomlinson v. Hill (1885), 5 Gr. 231

(2) Soper v. Windsor (1914), (ON CA), 32 O.L.R. 352

(3) Re Hunt and Bell (1915), 35 O.L.R. 256

(4) Robertson v.

Daley (1886), 11 O.R. 352. 28 It is noted in (1) that: It is quite clear, I think, that the land tax is made or charged upon the property itself, to the payment of which all personshaving any interest in the land are bound to taxes; and it follows that a conveyance by the sheriff in pursuance of the sale for arrears oftaxes operates as the extinguishment of every claim upon the land and confers a first title under the Act of Parliament. 29 It is stated in (2) that: The deed creates a new commencement of title. 30 It is stated in (3) that: A subsequent sale and conveyance for taxes has the effect of conveying the land, free from any claim under the covenant,to the tax purchaser. 31 In the circumstances of the instant case, I would allow the appeal and confirm the validity of the Sheriff’s deed to John T.LeClair, his heirs, and successors in title, the last of which is the appellant, Daniel Savoie. [22] As the New Brunswick Court of Appeal noted, the question before it turned – as does the question before me – on the wordingof the statute providing for the tax sale.

However, in all essential respects, the operative provisions of the Rates and Taxes Act, R.S.N.B.1927, c. 190, are to the same effect as the Municipalities Act, 1999. In particular,

section 161 of the New Brunswick statute providedthat: The Sheriff shall sell the land ... to the highest bidder ... and shall execute the deed, Form 1, to the purchaser thereof, his heirs and

assigns, and such deed when duly executed, acknowledged and registered with an affidavit of the Sheriff or his deputy endorsed thereon,Form K. and made and taken before any person authorized to make acknowledgments of deeds, that the property so conveyed is legallyseized, advertised, sold and conveyed, shall pass and convey to the purchaser named therein the title and fee simple, of, in and to suchlands, and shall vest such title in the said purchaser subject only to debts due the Crown and to the right of redemption under section166. [23] The right of redemption referred to was a right in the person claiming to be the legal or equitable owner of property sold fortaxes to redeem it from the tax sale purchaser by paying the price paid at auction plus 15%. [24] The Crown relies on a different line of authority that holds that the purchaser under a tax deed takes only the interest that thatthe person assessed for, and in default of, taxes had in the property at the time of the sale.

The best statement (see also Prevost v.Marsman (1987), (NS CA), 76 N.S.R. (2d) 83, 189 A.P.R. 83 (C.A.); Begg v. East Hants (Mun.) (1987), (NS SC), 80 N.S.R. (2d) 320, 200 A.P.R. 320 (S.C. (T.D.)); Kirton v. Frolack, (ON SC), [1973] 2 O.R. 185, 33D.L.R. (3d) 281 (H.C.J.)), of this position is that expressed by Cowan C.J.T.D. in the Nova Scotia case of Devereaux v. Saunders,(1977), 26 N.S.R. (2d) 301, 40 A.P.R. 301 (S.C. (T.D.)), aff’d (NS CA), 26 N.S.R. (2d) 283, 40 A.P.R. 283 (S.C.(App. Div.)), at paragraph 32: 32 While the

section in question purports to give a certain effect to a tax deed, it is, in my opinion, apparent that the

section does not,in all circumstances, clear up defects of title of the kind referred to in the various written requisitions delivered to the defendant by theplaintiffs' solicitor. For example, while the

section provides that the deed shall be conclusive evidence that all the provisions of the Act,with reference to the sale of the land described in the deed, have been fully complied with, and every act and thing necessary for the legalperfection of such sale has been duly performed, it may be shown that the lands which have been sold and which have been assessed bythe Municipality, are not, in fact, owned by the person assessed.

If, for example, the Municipality erroneously assesses lands owned byone person in the name of another person, and then proceeds to sell the lands under the tax sale provisions, the resulting deed does not, inmy opinion; deprive the true owner of title. … [25] The statutory provision for tax sale under consideration in Devereaux – Assessment Act, R.S.N.S. 1967, c. 14, s. 178 – was,again, similar to that under consideration in Savoie, and the one at issue in this case: 178 Such deed shall be conclusive evidence that all the provisions of this Act with reference to the sale of the land therein describedhave been fully complied with, and every act and thing necessary for the legal perfection of such sale has been duly performed, and shallhave the effect of vesting the said land in the grantee, his heirs or assigns, in fee simple, free and discharged from all encumbranceswhatsoever. [26] There has been no case cited to me in which our Court has interpreted the tax sale provisions of the Municipalities Act, 1999. [27] I prefer the

interpretation of s.147 of the Municipalities Act, 1999 advocated for by the Applicant: a tax deed under thatprovision conveys good, rooted title to the property, regardless of the quality of the title that the delinquent taxpayer had to the property. [28] This

interpretation is consistent with the express words of

section 147: “The conveyance … shall have the effect of vesting thereal property in the purchaser, his or her executors, administrators or assigns absolutely”. The word “vest” used as a verb is defined in this manner in Black’s Law Dictionary (9th ed. 2009): 1. To confer ownership (of property) upon a person. 2. To invest (a person) with the full title to property. 3. To give (a person) animmediate, fixed right of present or future enjoyment. [29] The vesting under the tax deed described in

section 147 is absolute and therefore intended to be without restriction or condition. [30] The modern method of statutory

interpretation endorses a broad and purposive approach, recognizing that legislation isremedial, and ascribing ordinary meaning and ordinary grammatical sense to the words of the enactment. This approach applies equallyto municipal legislation: United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19, paragraphs 6 and 8: 6 The evolution of the modern municipality has produced a shift in the proper approach to the

interpretation of statutes empoweringmunicipalities. This notable shift in the nature of municipalities was acknowledged by McLachlin J. (as she then was) in Shell CanadaProducts Ltd. v. Vancouver (City), (SCC), [1994] 1 S.C.R. 231 (S.C.C.), at pp. 244-245. The “benevolent” and “strict”construction dichotomy has been set aside, and a broad and purposive approach to the

interpretation of municipal powers has beenembraced: Nanaimo, supra, at para. 18.… … 8 A broad and purposive approach to the

interpretation of municipal legislation is also consistent with this Court’s approach tostatutory

interpretation generally. The contextual approach requires “the words of

an Act . . . to be read in their entire context and in theirgrammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature”:Elmer A. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87; Bell ExpressVu Ltd. Partnership v. Rex,[2002] 2 S.C.R. 559, 2002 SCC 42 (S.C.C.), at para. 26. This approach is also consistent with s. 10 of Alberta’s

Interpretation Act,R.S.A. 2000, c. I-8, which provides that every provincial enactment must be given a fair, large and liberal construction and

interpretationthat best ensures the attainment of its objects. [31] The taxing provisions of the Municipalities Act, 1999 are designed to provide municipalities with funding for effectivegovernance and service. Tax collection is a necessary aspect of that process, and tax sales are one instrument of collection that thelegislation provides. However, a completed tax sale does more than collect arrears of municipal tax. It also replaces a defaultingproperty owner with another who presumably will pay property taxes in the future. A system of fair municipal taxation requires the

burden of taxation to be distributed over all property owners. It would be unfair if a property owner could default on taxes and yetmaintain ownership of property while neighbouring owners bear greater burden of the cost of municipal services. [32] The effectiveness of municipal tax collection would be undermined if the tax sale did not extinguish the interests of all ownersand convey good, rooted title to the purchaser. As stated by Justice Major in the majority decision in Zeitel v. Ellscheid, (SCC), [1994] 2 S.C.R. 142, at paragraph 20: 20 Finally, it is necessary to consider the objects of the MTSA.

The statute exists to allow property which is the subject of tax arrearsto be sold by a municipality. As purchasers must be assured of the integrity of title, the legislature has stated that, with few exceptions,once a tax deed is issued, it is final and binding…. [33] There is no imperative to interpret the statute in order to protect the interest of an owner who is not named on the assessmentroll. Under the Municipalities Act, 1999, all owners of assessed land are liable for taxes.

As stated by the New Brunswick Court ofAppeal in Savoie at paragraph 28 “[T]he land tax is made or charged upon the property itself, to the payment of which all persons havingany interest in the land are bound to taxes; and it follows that a conveyance by the sheriff in pursuance of the sale for arrears of taxesoperates as the extinguishment of every claim upon the land and confers a first title …”. A person who asserts an ownership interest inland within a municipality should know that the property is subject to tax. The attachment of tax to the land under

section 134 of theMunicipalities Act, 1999 does not depend on notice of assessment to the taxpayer. Moreover, the auction of property for tax arrears onlyproceeds after notice to the public. A person who considers that they are a true owner can avoid the tax sale by paying the taxes due onthe land. [34] The purpose of the legislation does not require that the tax sale purchaser bear the risk of defective title.

Indeed, in the case atbar it would be impossible for a purchaser or bidder at auction to assess the title of the person to whom the assessment notices weredirected: the evidence before me established that the taxes were only ever assessed to “unknown owner”. There is no means by which tosearch the title to land under our Registry system except by reference to the name of a putative owner. [35] Consequently, a completed tax sale provides the purchaser with clear title, subject only to the rights of the Crown that I willnext consider.

The Act is not binding on the Crown and a Tax Sale does not Extinguish Crown title [36] Unfortunately for the Applicant, the Crown is claiming that the property which he purchased by tax sale is Crown land. It istherefore necessary to consider whether Crown title is extinguished by a tax sale. I have decided that it is not. [37]

Section 12 of the

Interpretation Act provides that no statute is binding on the Crown unless it expressly states that it does so.This provision is the codification of a common law principle that holds that the interests of the Crown are not adversely affected bylegislation unless the legislation so provides. Consistent with the evolution of that common law principle, provisions for Crownimmunity such as that in

section 12 have been interpreted to include allowance for the Crown being bound if that follows by necessaryimplication from the words of the enactment read in context: Canada (Attorney General) v. Thouin, 2017 SCC 46. [38] The Municipalities Act, 1999 does not expressly bind the Crown. [39] Moreover,

section 118(

a) of the Municipalities Act, 1999 exempts real property belonging to the provincial and federal Crownfrom property taxation. [40] The Municipalities Act, 1999,

section 147, was amended in 2011 to provide that a tax deed conveyed the property free fromencumbrances "except a claim of the Crown and an easement". The Applicant argues that after 2011 Crown title is unaffected by a taxsale, but this amendment would not have been necessary unless Crown title was previously extinguished by a tax sale. [41] I reject this argument. The context and history of the amendment shows that the words “except a claim of the Crown” wereadded to modify the word encumbrances. An encumbrance is a claim against the title to property that diminishes the value of, but doesnot connote, title.

A claim by the Crown that property is Crown land is not an encumbrance but a title claim adverse to, and inconsistentwith, the title of another claimant. [42] If Crown property is exempt from taxation, then it follows that a municipality cannot sell Crown property for arrears of taxesand Crown title cannot be adversely affected by a tax sale. [43]

Section 2(

b) of the Lands Act defines Crown lands as all land in the province except land that is otherwise dedicated to specificpublic use or that has been lawfully alienated from the Crown. The Lands Act provides a comprehensive description of the manner inwhich Crown land may be alienated: by grant, lease, licence or adverse possession before 1977. An

interpretation of the MunicipalitiesAct, 1999 that allows a tax sale to extinguish Crown title would conflict with the Lands Act. [44] Indeed, if it were otherwise, then this would give municipalities effective control over Crown land within a municipality. Amunicipality could assign a civic number to unoccupied Crown land, tax it to “unknown owner” and then alienate the property from theCrown by tax sale. This is what appears to have happened in this case. [45] Consequently, the tax sale in this case does not preclude the Crown from asserting that the property is Crown land.

Laches [46] The Applicant relies on the doctrine of laches. [47] The doctrine of laches is a defence based on delay and acquiescence. It is a defence to an equitable and not a legal claim: Carter v. Pasadena (Town) (2000), (NL SC), 197 Nfld. & P.E.I.R. 178, 591 A.P.R. 178 (Nfld. S.C.(T.D.)); M. (K.)

v. M. (H.), (SCC), [1992] 3 S.C.R. 6. The doctrine has no application in the circumstances of this case in which theCrown is asserting its legal title in the context of the Applicant’s application for a quieting certificate. Estoppel [48] The Applicant relies on the doctrine of estoppel.

He says that he relied on the actions of the assessors from the MunicipalAssessment Agency in assessing the property and of the Town of Holyrood in accepting the payment of municipal taxes and that theCrown ought not to be allowed to assert a position contrary to his ownership of the property. [49] Although it is a creature of statute, the Town is not a Crown agent. Its powers do not include the power to protect the interestsof the Crown in Crown land, or to alienate Crown land.

Neither the acceptance of municipal taxes by the Town, nor its sale of the property for tax arrears, constitutes anaction or representation by the Crown on which the taxpayer could rely to establish estoppel. [50] The record before the Court does not allow for any conclusion to be drawn as to whether the assessment of the property by theMunicipal Assessment Agency could constitute a representation or action that would underpin an estoppel argument.

There was noevidence presented as to how this unoccupied, vacant land came to be assigned a civic number and included on the assessment roll. [51] In any event, however, an estoppel does not lie against the Crown except in very narrow circumstances and never in acircumstance where it would result in an outcome contrary to a statute: Kenora (Town) Hydro Electric Commission v. VacationlandDairy Co-operative Ltd., (SCC), [1994] 1 S.C.R 80; Mount Sinai Hospital Centre v. Quebec (Minister of Health andSocial Services), 2001 SCC 41; Hill v. Nova Scotia (Attorney General), (SCC), [1997] 1 S.C.R. 69.

In his concurringjudgment in the Mount Sinai case, Binnie J., at paragraph 47, put it this way: 47 … Public law estoppel clearly requires an appreciation of the legislative intent embodied in the power whose exercise is sought tobe estopped. The legislation is paramount. Circumstances that might otherwise create an estoppel may have to yield to an overridingpublic interest expressed in the legislative text. As stated in St. Ann’s Island Shooting & Fishing Club Ltd. v.

R., (SCC),[1950] S.C.R. 211 (S.C.C.), per Rand J., at p. 220: “there can be no estoppel in the face of an express provision of a statute” (emphasisadded). See also R. v. Dominion of Canada Postage Stamp Vending Co., (SCC), [1930] S.C.R. 500 (S.C.C.). [52] The legislative context in this case includes not only the Municipalities Act, 1999 and the Assessment Act, but also the LandsAct. The Lands Act provides for the means by which Crown land can be alienated from the Crown and there is no provision in that Actfor alienation by municipal assessment.

There is no requirement in the Assessment Act or the Municipalities Act, 1999 that the Ministerresponsible for the administration of Crown lands review property to be included in the assessment roll in order to determine whether theproperty might be claimed as Crown land. [53] Therefore, neither the assessment of this property for taxes nor the collection of taxes creates an estoppel precluding the adverseclaim of the Crown in the Applicant’s quieting application.

CONCLUSION [54] As noted at the outset, Justice McGrath directed that the questions of the effect of the tax deed and the application of thedoctrines of laches and estoppel be heard before a final decision on the quieting would be rendered. [55] I have determined that the tax deed did not extinguish the interest of the Crown in the property, that the equitable defence oflaches has no application to this matter and that the doctrine of estoppel does not preclude the Crown from asserting an adverse claim inthe Applicant’s quieting of title application. [56] There is nothing in this decision that predetermines the outcome of the adverse claim by the Crown.

It may be that theApplicant can establish that Crown title has been alienated in a manner allowed by the Lands Act. If the determination is made that thisproperty is Crown land, then the effect of that determination on the validity of the tax deed may have to be considered in a separateproceeding. [57] I leave the issue of costs of this application to be decided at the determination of the adverse claim of the Crown. The Town ofHolyrood did not seek its costs. _____________________________ Daniel M. Boone Justice