index investments inc. First applicant And: DERRICK SPRACKLIN Second APPLICANT And: STANLEY MARSHALL v. ELIZABETH MARSHALL, 2023 NLSC 112

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Index Investments Inc. v. Paradise (Town) , 2023 NLSC 112 Date : August 3, 2023 Docket : 202001G5525 Between: index investments inc. First applicant And: DERRICK SPRACKLIN Second APPLICANT And: STANLEY MARSHALL AND ELIZABETH MARSHALL tHIRD APPLICANTS And: TOWN COUNCIL OF THE TOWN OF PARADISE RESPONDENT Before: Justice Sandra R. Chaytor Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: November 18 - 19, 2021; November 9, 2022 and January 26, 2023

Summary: The Applicants own properties within the jurisdiction of the Respondent town. The Respondent conducted a municipal plan reviewfollowing which it adopted a new municipal plan and development regulations. Pursuant to the new regulatory regime, the Applicants’properties were rezoned. The Applicants applied pursuant to Rule 54.02 of the Rules, for judicial review of the rezoning decision and sought an order of certiorarito quash the decision. They contended that the rezoning decision was an improper use of the Respondent’s authority under the URPA.

Alternatively, the Applicants sought a declaration that the portion of their properties zoned conservation had been constructivelyexpropriated by the Respondent. Held: With respect to the judicial review of the rezoning decision, the Court found that the Applicants had failed to establish that theRespondent had improperly used its statutory authority or that the decision was otherwise unreasonable. The Court further found that the Applicants had failed to meet the two-prong test for constructive expropriation.

They had not establishedthat because of the rezoning, the Respondent had acquired a beneficial interest in, or flowing from, the properties. Nor had theApplicants established that the rezoning resulted in a removal of all reasonable uses of the portion of the properties zoned conservation. The Application was dismissed, with costs to the Respondent. Appearances: Michael J. Crosbie, K.C. Appearing on behalf of the Applicants Stephen F. Penney Appearing on behalf of the Respondent Authorities Cited: CASES CONSIDERED: Canada (Minister of Citizenship and Immigration) v.

Vavilov, 2019 SCC 65; Mariner Real Estate Ltd. v. NovaScotia (Attorney General), 1999 NSCA 98; Trimart Investments Ltd. v. Gander (Town), 2015 NLCA, 32; Canadian Pacific Railway v.Vancouver (City), 2006 SCC 5; Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36; Lynch v. St. John’s (City), 2016NLCA 35; Manitoba Fisheries Ltd. v. R., (SCC), [1979] 1 S.C.R. 101; British Columbia v. Tener, (SCC), [1985] 1 S.C.R. 533 STATUTES CONSIDERED: Urban and Rural Planning Act, 2000, S.N.L. 2000, c. U-8; Municipalities Act, 1999, S.N.L. 1999 c.

M-24 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REGULATIONS CONSIDERED: Town of Paradise Development Regulations, created under the authority of the Urban and RuralPlanning Act, 2000, S.N.L. 2000, c. U-8

TEXTS CONSIDERED: Ian MacFee Rogers , The Law of Canadian Municipal Corporations , 2nd ed. Vol II, (Toronto: Carswell, 2023) REASONS FOR JUDGMENT Chaytor, J. : INTRODUCTION [ 1 ] This case is a judicial review about whether a town, as part of its mandatory municipal plan review, made a reasonable decision to rezone property belonging to the Applicants. It is also about whether the Town constructively expropriated portions of the properties by rezoning them as conservation. [ 2 ] The Applicants own adjacent parcels of vacant undeveloped land in the Town of Paradise (the “Properties”).

The location of the Properties is described in the Application as being south of the system of trails known locally as the “Trailway” and near the Topsail River. [ 3 ] Under the authority of the Urban and Rural Planning Act, 2000 , S.N.L. 2000, c.

U-18 (the “ URPA ”), the Town Council of the Town of Paradise (the “Town”) approved the Town of Paradise Municipal Plan 2004-2014 (the “ 2004 Municipal Plan ”) and the Town of Paradise Development Regulations 2004-2014, (the “ 2004 Development Regulations ”). [ 4 ] Pursuant to the 2004 Development Regulations , the entirety of the Properties were zoned as Residential Subdivision Area (“RSA”). [ 5 ] The permitted uses for the Properties within RSA zoning were “maintenance and operation of existing uses, conservation”.

Pursuant to this zoning, the Applicants could submit a Subdivision Development Plan (“SDP”) for approval.

The decision to approve a SDP was discretionary with the Town. [ 6 ] In 2014, as required by the URPA , the Town initiated a review of the 2004 Municipal Plan and the 2004 Development Regulations (the “ Municipal Plan Review ”). [ 7 ] The Municipal Plan Review ultimately resulted in the approval by the Town, on February 16, 2018, of a new municipal plan (the “ 2016 Municipal Plan” ) and development regulations (the “ 2016 Development Regulations ”). [ 8 ] Pursuant to the 2016 Development Regulations , there was a change in the zoning of the Properties.

Portions of the Properties were zoned Rural Residential (the “Rural Residential Properties”). The remainder of the Properties was zoned Conservation (the “Conservation Properties”). [ 9 ] The purpose of Rural Residential zoning is to provide opportunities for low-density, rural residential development where piped services are not planned. Permitted uses of property in this zoning are: home office; family child care, single-detached dwelling, and urban agriculture.

Its discretionary uses are: animal, bed and breakfast, general service, home-based business and telecommunication towers. [ 10 ] The purpose of Conservation zoning is to provide a natural buffer around streams, ponds, wetlands and areas of known hazard. It has three permitted uses: conservation; home office (existing dwellings); and, maintenance and operation of existing uses.

Its discretionary uses are: boathouses; docks and wharves; residential accessory buildings; recreation open space (walking trails); and telecommunications towers. [ 11 ] The Applicants contend that this is a significant “down-zoning” of the Properties. [ 12 ] They submit that the decision to rezone the Properties constituted an improper use of the Town’s statutory authority pursuant to the URPA . Thus they apply pursuant to Rule 54.02 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D (the “ Rules ”) for judicial review of the decision. [ 13 ] In particular, the Applicants seek an order of certiorari to quash the rezoning of the Properties. The Applicants further seek an order of mandamus directing the Town to continue to zone the Properties as RSA or, alternatively, to zone the entirety of the Properties as Rural Residential. [ 14 ] If the Applicants are not successful on the judicial review aspect of this Application, they seek a declaration that, because of the change in zoning, the Conservation Properties were constructively expropriated by the Town.

The Applicants would then seek to claim that the Rural Residential Properties were injuriously affected by the expropriation. [ 15 ] With respect to the judicial review issue, the Town submits that it acted within its statutory authority in rezoning the Properties. The decision, they say, was reasonable. In the event that the Court were to find otherwise, the Town submits that the appropriate remedy is not mandamus .

The Town submits the Court cannot make the decision as to the appropriate zoning of the Properties; rather the matter should be remitted to the Town to determine the zoning. [ 16 ] Regarding the alleged constructive expropriation, the Town submits that the Applicants have not met the test to establish a constructive taking by the Town occurred because of the rezoning decision.

ISSUES: [ 17 ] The following are the issues for determination: 1. What is the standard of review? 2. Did the Town properly exercise its statutory authority in its decision to rezone the Properties? 3. Alternatively, were the Conservation Properties constructively expropriated by the Town because of the rezoning? 4.

What is an appropriate award for costs? disposition [ 18 ] The standard of review is reasonableness. [ 19 ] The Applicants did not meet the burden of establishing that the Town improperly exercised its statutory authority in making the decision to rezone the Properties or that the decision was otherwise unreasonable. [ 20 ] The Applicants did not establish that the Conservation Properties were constructively expropriated because of the rezoning. [ 21 ] The Application is dismissed.

The Town shall have its costs on the basis of Column 3 of the Scale of Costs under Rule 55 of the Rules . [ 22 ] I will explain why I have reached this decision. analysis Issue 1: What is the Standard of Review? [ 23 ] A judicial review begins with a determination of the appropriate standard of review. [ 24 ] The parties agree that the standard of review is reasonableness. I agree. I will briefly explain why. [ 25 ] The Supreme Court of Canada revisited the standard of review framework in Canada (Minister of Citizenship and Immigration) v. Vavilov , 2019 SCC 65 .

The presumption is that the standard of review is reasonableness. This presumption can be rebutted in two types of situations. The first is where the legislature has statutorily prescribed a standard of review or where it has provided for an appeal from the administrative decision. The second is where the question on review falls into one of the categories of questions that the rule of law requires to be reviewed on a standard of correctness.

These include constitutional questions, general questions of law of central importance to the legal system or jurisdictional questions. [ 26 ] Neither of the rebuttal situations are applicable. This judicial review is brought by way of Rule 54 of the Rules . There is no statutorily prescribed standard of review or appeal mechanism. Nor does this case concern a question of constitutional significance or true jurisdiction. Issue 2: Did the Town properly exercise its statutory authority in its decision to rezone the Properties?

Assessing Reasonableness – The Legal Framework [ 27 ] The Applicants, as the parties challenging the Town’s decision, bear the burden of proving on a balance of probabilities that the decision was not reasonable. [ 28 ] Through Vavilov , the Supreme Court provided extensive instruction on the nature of reasonableness review and the test the Applicants must meet to satisfy their burden. The Role of Reasons [ 29 ] Vavilov highlights that, while the two main doctrines of administrative law - duties of procedural fairness, and substantive review ​​- are legally distinct, they may affect one another.

This is particularly so with respect to whether there is a duty to provide reasons for a decision. Typically, this issue is an aspect of procedural fairness. [ 30 ] At paragraphs 77 and 81 of Vavilov , the Supreme Court wrote: 77 It is well established that, as a matter of procedural fairness, reasons are not required for all administrative decisions. … 81 … The starting point for our analysis is therefore that where reasons are required, they are the primary mechanism by which administrative decision makers show that their decisions are reasonable — both to the affected parties and to the reviewing courts.

It follows that the provision of reasons for an administrative decision may have implications for its legitimacy, including in terms both of whether it is procedurally fair and of whether it is substantively reasonable.

[ 31 ] Vavilov gave guidance for circumstances where judicial review occurs in the absence of reasons. In reference to the specific example of a municipal bylaw, the Supreme Court wrote at paragraph 137: Admittedly, applying an approach to judicial review that prioritizes the decision maker's justification for its decisions can be challenging in cases in which formal reasons have not been provided.

This will often occur where the decision-making process does not easily lend itself to producing a single set of reasons, for example, where a municipality passes a bylaw … However, even in such circumstances, the reasoning process that underlies the decision will not usually be opaque.

It is important to recall that a reviewing court must look to the record as a whole to understand the decision, and that in doing so, the court will often uncover a clear rationale for the decision: Baker , at para. 44 For example, as McLachlin C.J. noted in Catalyst , "[t]he reasons for a municipal bylaw are traditionally deduced from the debate, deliberations, and the statements of policy that give rise to the bylaw": para. 29.

In that case, not only were "the reasons [in the sense of rationale] for the bylaw ... clear to everyone", they had also been laid out in a five-year plan: para. 33 Process and Outcome [ 32 ] Reasonableness review is equally concerned with the process by which a decision is made as it is with the outcome of the decision itself ( Vavilov at paragraph 83 ). This is so whether or not reasons are required. [ 33 ] The duty of the Court is to assess whether the decision under review is the product of a rational chain of analysis that takes into account both a matter’s legislative context and its factual circumstances.

Even where an outcome is nominally “reasonable,” the decision as a whole may still be quashed as unreasonable if the decision-making process was in some way irredeemably flawed. [ 34 ] In Vavilov , the Supreme Court provided a definition for reasonableness review that specifically emphasizes the role played by proper process. It stated that a reasonable decision is one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker.

The reasonableness standard requires that a reviewing court defer to such a decision ( Vavilov at paragraph 85 ). The Test [ 35 ] In assessing the reasonableness of the Town’s decision, I must keep in mind the principle that the exercise of public power must be justified, intelligible and transparent to the individuals subject to it ( Vavilov at paragraph 95 ). [ 36 ] Reasonableness is a single standard, the constraints of which are determined by the context in which a given decision is to be made ( Vavilov , at paragraph 89 ).

There is no rigid multi-step test that must be undertaken each time a court assesses whether a decision is reasonable. [ 37 ] To determine whether the Town’s decision is reasonable, I must develop an understanding of the Town’s reasoning process.

To make this determination, I am to ask whether the decision bears the hallmarks of reasonableness — justification, transparency and intelligibility — and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision ( Vavilov at paragraph 99 ). [ 38 ] Therefore a reasonable decision is: (1) based on an internally coherent and rational chain of analysis.

In other words, is justified, transparent, and intelligible; and (2) justified in relation to the facts and law that constrain the decision maker. [ 39 ] With respect to the first principle, Vavilov emphasizes “internally coherent reasoning,” applies more significantly to situations where reasons are required. This does not mean decisions that do not require reasons are permitted to be incoherent, but rather acknowledges that assessing a decision-maker’s chain of reasoning takes on special significance when reasons are provided. [ 40 ] A reasonable decision is based on reasoning that is both rational and logical.

I must be able to trace the Town’s reasoning without encountering any fatal flaws in its overarching logic. There must be a line of analysis within the given reasons that could reasonably have led the Town from the evidence before it to the conclusion at which it arrived in rezoning the Properties. Ultimately, I must be satisfied that the Town’s reasoning “adds up” ( Vavilov at paragraphs 102 and 104 ). [ 41 ] With respect to the second principle, reasonableness depends upon the constraints imposed by the legal and factual constraints that provide context for the decision.

At paragraph 106 of Vavilov , the Supreme Court listed a number of elements (not intended to be exhaustive) that will generally be relevant in evaluating whether a decision is reasonable. These are:

(1) The governing statutory scheme, said likely to be the “most salient” aspect in the legal context of a decision; (2) other relevant statutory or common law; (3) the principles of statutory

interpretation; (4) the evidence before the decision-maker; (5) the submissions of parties; (6) the past practices and decisions of the decision-maker; and (7) the potential impact of the decision on the affected individuals. [ 42 ] In matters involving municipal by-laws, the determination of whether a decision is reasonable will significantly depend on the enabling legislation and the Record. In the language of Vavilov, these are, respectively, “the legal constraints and the factual constraints.”

[ 43 ] Therefore, to be successful in establishing that the Town’s decision to rezone the Properties was unreasonable and therefore should be quashed, the Applicants must show that the zoning decision was not justified, transparent, and intelligible, or that it was made outside the allowable legal and factual constraints. [ 44 ] I will now apply this legal framework to my assessment of the reasonableness of the Town’s decision.

The Legal Constraints [ 45 ] As noted in Vavilov , the enabling legislation is likely to be the “most salient” aspect to the legal context of the Town’s decision. [ 46 ] With respect to judicial review of a municipality’s zoning power, that enabling legislation is the URPA. I will review the relevant provisions. [ 47 ] Subsections 2(

h) and (

l) set out the following

definitions: 2. In this Act (h) "development regulations" means regulations made under sections 34 to 38; … (l) "plan", unless the context indicates otherwise, means a regional plan and a municipal plan established under

section 8 or 10. [ 48 ]

Section 5 states: 5. A person is not entitled to compensation for a reduction in the value of that person’s interest in land or for a loss or damage to that person’s interest in land resulting from the application of this Act or a plan authorized under this Act. [ 49 ]

Section 12 notes that plans and development regulations are equally binding on municipalities, councils, and people undertaking development within the subject area. [ 50 ]

Section 13 sets out plan requirements. Relevant provisions include the following: 13.

(1) A plan and development regulations made under this Act and amendments to them shall be certified by a person who is a fellow or full member of the Canadian Institute of Planners.

(2) A plan shall … (

c) divide land into land use classes and the use that may be made in each class and shall include prohibited uses of land;

(3) A plan may, with respect to a planning area … (

f) provide for the protection, use and development of environmentally sensitive lands; (

g) provide for storm water control and erosion control; … (

j) provide for the non-removal of trees and vegetation and for other environmental matters including requiring that environmental studies be carried out prior to undertaking specified developments; … [ 51 ]

Section 28 imposes an obligation on the Town to review its municipal plan and development regulations not more than every

five years. Regular review of plans and development regulations is a legislative imperative. [ 52 ]

Section 35 establishes the authority in the Town to enact development regulations to ensure compliance with the municipal plan. Subsections 35(1)(

a) and (

b) state: 35.

(1) A council or regional authority shall, to ensure that land is controlled and used only in accordance with the appropriate plan or scheme, make development regulations: (

a) respecting land use zoning and shall require for that zoning, a map that divides the planning area into land use zones; (

b) indicating permitted, prohibited and discretionary uses of land in each land use zone. [ 53 ] This review of the relevant provisions show that the URPA sets up a scheme whereby the Town is compelled to continually create its planning document and associated development regulations. The two documents work in tandem with one another. Both have relevance to the ultimate determination of whether the Town’s decision to rezone the Properties was reasonable. [ 54 ] The URPA also establishes process obligations. [ 55 ]

Section 14 places obligations on the Town, during the preparation of a plan and development regulations, to provide consultation opportunities to interested persons, community groups, and others to be able to give input and receive information. [ 56 ] Pursuant to

section 15, a review of a proposed plan and development regulations is not to proceed until consultation has been completed. The proposed plan, the proposed development regulations, documentation related to consultation are then to be submitted to the provincial government for review. [ 57 ] Following the provincial government review,

section 16 states that the Town may vote to adopt the proposed plans and development regulations. [ 58 ] Following adoption of the proposed plan and development regulations, there are further public notice and consultation requirements including pursuant to: •

Section 17: the Town must advertise notice of the adoption of the proposed plan and development regulations in locally circulated newspapers; •

Section 19: when a proposed plan and development regulations are adopted, the Town is to appoint a commissioner to hold a public hearing under sections 18 and 21; •

Section 20: a person or an association of persons may submit to the Town written objections or representations concerning the proposed plan and development regulations; and •

Section 22: following the public hearing, the commissioner is to prepare a report to submit to the Town along with copies of the evidence received. [ 59 ] Following receipt of the commissioner’s report, the Town may, under

section 23, amend the proposed plan and development regulations and may hold another public hearing, or they may approve the proposed plan without having another hearing, or without making changes. [ 60 ] When the municipal plan and development regulations are approved, subsection 23(4) requires that the Town submit the plan, development regulations, commissioner’s report, objections, and representations to the provincial government. [ 61 ] Following receipt by the government,

section 24 stipulates that the responsible minister is to review the plan, development regulations, and other documents to determine if they are contrary to law or policy. Where the minister determines they are not contrary to law or policy, the minister shall register the plan and development regulations. [ 62 ] When the municipal plan and development regulations are registered, the Town is to publish notice in the Gazette and a locally circulated newspaper.

The Factual Constraints [ 63 ] The Record shows, that in March 2014, the Town began the process to review the 2004 Municipal Plan . CBCL Limited was retained to assist in the process.

A planning committee comprised of citizens and stakeholders was formed to provide input and recommendations to the Town throughout the process. [ 64 ] CBCL Limited prepared and presented to the Town a report entitled Paradise Municipal Plan Review – Background Report dated December 1, 2014 (the “Background Report”). [ 65 ] CBCL Limited retained Golder Associates Ltd. to conduct a preliminary slope stability assessment related to the Topsail Bluff and White Cove Hills areas of the Town. This was in response to an amendment that was proposed to the development regulations to facilitate development in these areas.

Golder Associates Ltd. prepared a Draft Preliminary Slope Stability Assessment Report dated September 2015 (the “Golder Report”). It forms part of the Record. [ 66 ] The Record demonstrates that public consultation played a significant role in the Municipal Plan Review in advance of the drafting and signing into force of the 2016 Municipal Plan and 2016 Development Regulations . This is evident from the following: • In October and November 2014, there were advertisements of public consultation events through mainstream and social media. • In November 2014, the Town held a public open house and drop-in session.

It also conducted interviews with individuals and focus group sessions with business and community groups. • In March 2015, the Town published a survey seeking input regarding the Municipal Plan Review from residents and property and business owners in the Town. It received a significant number of responses to the survey. A

summary of the results of this process was compiled for consideration by the Town. • In April 2015, the Town published a YouTube video of the Municipal Plan Review . • In May 2016, the Town issued public notices of a public presentation of a draft of the new municipal plan followed by a presentation of the draft plan to the public. • In June 2016, the Town issued a public notice advising the public of the availability of the draft municipal plan on the Town’s website. [ 67 ] As part of the review, in 2016 and 2017, the Town approved two sets of revisions to the proposed plan and development regulations following periods of public consultation.

Following the revisions, the Town published notices of the revised drafts and invited further public submissions. [ 68 ] In July 2017, the Town adopted the proposed new municipal plan and development regulations and advertised notices in The Telegram and the Shoreline in accordance with the requirements under

section 17 of the URPA . [ 69 ] Elaine Mitchell was appointed as the commissioner for the public hearing. The public hearing was held in August 2017, following which Ms. Mitchell issued the required report recommending adoption of the proposed new municipal plan and development regulations. [ 70 ] The commissioner’s report notes concerns received from property-owners (other than the Applicants) whose properties were rezoned Conservation. In one such case, Ms.

Mitchell suggested that the Town assess the proposed Conservation zoning in the vicinity of the land in question to ensure it was applied in accordance with the municipal plan. [ 71 ] The commissioner’s report also directly speaks to a relationship between steepness and Conservation zoning, albeit in a different area than the Properties. Ms. Mitchell wrote that several residents expressed concern that the Conservation zone “along Topsail Bluff” will negatively impact their properties and potential for future development.

She wrote that, in her opinion, [T]he Conservation zone is in place to safeguard the public by preventing development in hazardous areas such as the steep slopes along Topsail Bluff. It appears that the Town has already recognized these concerns and has commissioned a geo-technical study into slope stability.

Until this study has been reviewed and the implications of reducing the Conservation zone assessed, I recommend the Open Space designation and Conservation zoning remain as proposed. [emphasis added] [ 72 ] There is no record of the Applicants having attended the public hearing or of bringing any concerns to the attention of the Town during the consultation period. [ 73 ] The Town approved the 2016 Municipal Plan and 2016 Development Regulations and submitted them to the provincial government for registration. [ 74 ] On March 28, 2018, the provincial government registered the 2016 Municipal Plan and 2016 Development Regulations .

This included the rezoning of the Properties. [ 75 ] The Record contains subsequent communications between the Town and the Applicants. The judicial review is solely with respect to the Town’s decision to rezone the Properties pursuant to the 2016 Municipal Plan and 2016 Development Regulations . It is not

a review of any decision or outcome arising from any discussions between the parties after the rezoning decision. However, if these communications give insight into the considerations made by the Town at the time of the rezoning, they may be relevant to the reasonableness of the decision under review. It is in this context that I have considered those communications. [ 76 ] Through these communications, the Applicants were provided the reason for the rezoning as understood by the Town at the time its decision was made.

The discussions therefore provide some insight into the factual constraints upon which the Town made its decisions. These communications also are relevant to justification as a hallmark of whether the decision is reasonable. [ 77 ] In a letter dated September 25, 2018, Gerry Spracklin, sole shareholder of the Applicant, Index Investments Inc., wrote to the Town’s Director of Planning and Protective Services. Mr.

Spracklin wrote that he recently became aware of the rezoning, which—in relation to the collective property of the Applicants—resulted “in [a] substantial loss of value and revenue.” [ 78 ] Communications were entered into between the Applicants and representatives of the Town addressing possible solutions to the concerns raised.

During these communications, it was relayed to the Applicants that the Conservation zoning of their properties was related to slope steepness. [ 79 ] In an email dated February 26, 2020, Lisa Niblock, the Town’s Chief Administrative Officer, wrote to the Applicants acknowledging that they were not aware of the rezoning and did not provide feedback during the consultation process. [ 80 ] Through an email communication to the Applicants on March 2, 2020, Ms.

Niblock provided a document prepared by the Town’s staff entitled “Slope Map – Explanation and Methodology.” The purpose of the document was to provide explanation of the technical work undertaken to establish the Conservation zone.

Assessing the Reasonableness of the Decision [ 81 ] I find that the Applicants failed to establish that the rezoning decision of the Town was unreasonable. [ 82 ] The Applicants submit that the Town’s decision to rezone the Properties was unreasonable because it involved an improper use of authority by the Town. [ 83 ] The Applicants rely upon comments of Cromwell J.A. (as he then was) in Mariner Real Estate Ltd. v.

Nova Scotia (Attorney General) , 1999 NSCA 98 , at paragraph 50 , in which he noted the difference between constructive expropriation claims and administrative law challenges to the legality or appropriateness of planning decisions. Cromwell J.A, stated in that context that zoning by-laws may be attacked as ultra vires if they are enacted for a confiscatory or other improper purpose and such purpose is not one authorized by the relevant grant of zoning power. [ 84 ] The Town is a creature of statute and only has the authority conferred on it by its enabling legislation.

It must operate within the confines of the URPA . Otherwise, its decision will not withstand judicial review. An assessment of the by-law making powers of a municipality is in essence an exercise in statutory

interpretation. [ 85 ] The Applicants point to the comments in The Law of Canadian Municipal Corporations, 2nd ed. Vol II, (Toronto: Carswell, 2023) at 17-7, which note courts have frequently applied the rule of strict construction that common law rights cannot be held to have been taken away or affected by a by-law passed under its authority unless it is so expressed in clear language. [ 86 ] In Trimart Investments Ltd. v. Gander (Town) , 2015 NLCA 32 , at paragraph 19 , the Court of Appeal stated that a broad and purposive approach to

interpretation of municipal legislation does not mean that a municipality can accord itself authority to take actions which fall outside of its statutory grant. It can only exercise powers which are explicitly authorized or found to be authorized after determining the true meaning of the legislation. If authorization of the municipal action is not found in the statute, properly and purposively construed, then the action will be held to be ultra vires the municipality and will not be permitted. [ 87 ] The modern principle of statutory

interpretation applies. This was reiterated by the Supreme Court in Vavilov at paragraph 117 : … [T]he words of a statute must be read "in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament". … [ 88 ] The Applicants in making their submission as to the improper use of authority by the Town, advance three interrelated arguments: 1.

The Town had no authority to “totally prohibit all uses” of the Conservation Properties; Within this argument, the Applicants also submit that Conservation zoning is not applicable to the Properties. Thus by zoning a portion of the properties as Conservation, the Town also acted outside its authority. As part of this argument, the Applicants also questioned the sufficiency of the Town’s reasons. I have separated these points into a separate sub-issue entitled 1(b) “The Inapplicability and Inexplicability of the Conservation Zone”. 2. The Town did indirectly what should have been done directly; and 3.

The Town has allowed “no reasonable use” of the Conservation Properties. [ 89 ] Although I will consider each of the points raised by the Applicants separately (as the Applicants have done in their written brief), I have considered that these points are components of the same concept, namely that the Applicants contend the Town improperly used its authority.

1(

a) The Town had no authority to “totally prohibit all uses” [ 90 ] The Applicants submit that the rezoning decision is unreasonable because Conservation zoning prohibits all reasonable use of the Properties and the Town has no statutory authority to prohibit all uses. [ 91 ] The Applicants state that the purpose of the URPA is to authorize reasonable use of land, “not to state that a class of land can have no uses.” The emphasis of the URPA is on use rather than prohibition.

They further submit that if the wording of the URPA , being restrictive legislation, is ambiguous, it should be read in favour of the common law rights of the Applicants as the property-holders. [ 92 ] Specifically, the Applicants contend that the URPA does not expressly allow a municipality to establish a zone with only one land use class, or a zone with no land class uses. [ 93 ] They contend sections 13(2)(

c) and 35(1)(

a) of the URPA intends that there be more than one land use class (or zone) and that each class (or zone) shall state what use of land – discretionary, permitted and prohibited can be made of land in that land use class (or zone). The Applicants submit that the Town creating a land use class (or zone) which states no actual permitted uses, or states only prohibited uses, is a failure to state uses for a land use class (or zone).

This, they say, is tantamount to creating a “no-use” class and is contrary to the intention of the URPA and the authority it confers on the Town [ 94 ] The Applicants submit that the Town has divided the Conservation Properties into one land use class which prohibits all uses of the land or allows no reasonable uses. [ 95 ] For reasons stated later in this decision, I do not accept that the Applicants have established that the rezoning removed all reasonable uses of the Conservation Properties. At this point, I will address the Applicants’

interpretation of these sections of the URPA . [ 96 ] I do not interpret the URPA as limiting the powers granted to the Town in the manner suggested by the Applicants. Nor do I find that the URPA is ambiguous in this respect. [ 97 ] The purpose of the URPA is to provide municipalities, including the Town, with the ability and authority to regulate, through zoning, land use within its jurisdiction. [ 98 ] In making their submission, the Applicants emphasize the plural usage of the word “classes” in subsection 13(2)(

c) and “zones” in subsection 35(1)(

a) of the URPA. They say the use of the plural is indicative that there have to be land use class es , not just one land use class . [ 99 ] The Applicants’ reliance on the pluralization of “classes” and “zones” is grammatically tenuous. In my view, a more reasonable reading of subsections 13(2)(

c) and 35(1) is that the Town has the authority to create different zones respecting different portions of land within its jurisdiction. This is the means by which a municipality can create zones such as RSA, Rural Residential, and Conservation all within the same community. In this case, these are the multiple “classes” of land use allowable under

section 13 of the URPA . [ 100 ] The Applicants submit that the Legislature’s intention in enacting the URPA was such that there must be permitted and/or discretionary uses for all property within a municipality. Therefore, the Town is not authorized to have property zoned so as to prohibit all uses. [ 101 ] I do not accept this argument. I find that the URPA does in fact allow this to happen. [ 102 ] The URPA grants the Town authority to provide for the protection of environmentally sensitive areas.

Section 98 of the URPA expressly contemplates a prohibition of development in an area when done for an environmental reason. [ 103 ] In any event, I do not conclude that the Town through its rezoning decision has prohibited all uses of the Conservation Properties. [ 104 ]

Section 9.29 of the 2016 Development Regulations stipulates permitted and discretionary uses of land within Conservation zoning areas. The utility and reasonableness of these uses with respect to the Conservation Properties is dealt with further in this decision. At this point, it is sufficient to state that the Town has not created a “no-use” class as the Applicants contend. 1 (

b) The Inapplicability and Inexplicability of the Conservation Zone [ 105 ] The Applicants submit that the Town failed to provide adequate reasoning and justification for the Conservation zoning. The Applicants contend that the Conservation zoning is not applicable to the Properties. They submit that this zoning is intended for environmentally sensitive areas and hazardous areas such as unstable slopes. They contend that the reason given for the decision – being excessive sloping - is unfounded. [ 106 ] As such, the Applicants submit that the reason behind the Town’s

interpretation and application of its statutory zoning authority is not a reasonable justification and not logically coherent.

Therefore, by making the Conservation designation the Town acted outside its authority and made an unreasonable decision. [ 107 ] The Applicants further submit that if there is any ambiguity as to whether the Conservation zoning pertains to the Properties, the Court must interpret the regulation in favour of the Applicants and leave their private property rights undisturbed. [ 108 ] I do not accept the Applicants’ submission that the Town failed to provide adequate reasoning for its decision.

Nor do I find that the Town acted outside its authority and made an unreasonable decision in applying the Conservation zoning to a portion of the Properties. [ 109 ] The requirement for reasons is technically an aspect of procedural fairness rather than standard of review, but even so in Vavilov , the Supreme Court specifically acknowledged that by-laws passed by municipalities do not readily lend themselves to reasons.

[ 110 ] I do not have formal reasons for the rezoning of the Properties as this occurred in the context of a Municipal Plan Review as opposed to an individual and specific decision relating to the Properties. I have looked at the Record of the Municipal Plan Review , as a whole, in an effort to understand the Town’s decision. [ 111 ] I am able to determine from the Record the reasoning process underlying the Town’s decision.

I find that the Town was concerned about the sloping of the land comprising the Conservation Properties. [ 112 ] The Record demonstrates the Town’s concern regarding sloping and the connection of this concern to Conservation zoning. [ 113 ] The stated purpose of Conservation zoning is to provide a natural buffer, not only around streams, ponds and wetlands, but also areas of known hazard . [ 114 ] The Golder Report was commissioned as part of the Municipal Plan Review . Although it is not specific to the Properties, it raised concerns with sloped areas including stability issues.

This was evidence before the Town at the time of making its decision that indicated a relationship between steep slopes and increased risks. [ 115 ]

Section 6.1 of the 2016 Municipal Plan is entitled “Environmentally Sensitive Areas”. It states that the Town will protect environmentally sensitive areas by identifying, maintaining, and enhancing important elements or features of the natural environment including physically unstable lands. This includes steep slopes and/or unstable soil. [ 116 ]

Section 6.5. of the 2016 Municipal Plan is entitled “Hazard Areas”. It is contained in a

chapter entitled “Environmental Quality”.

Section 6.5 states that it is important for the Town to ensure the safety of residents by preventing development in areas such as on “steep or unstable slopes.” [ 117 ]

Section 6.5.1 articulates a ‘Hazard Lands’ policy. It includes preventing development in undeveloped rural areas including where steep topography make the land unsuitable for development. [ 118 ]

Section 4.2 of the Background Report states that slopes over 10% are relatively more expensive to build on and require more complicated foundations and utility connections. [ 119 ] The commissioner’s report drew specific attention to circumstances concerning grade and its effect on Conservation zoning. In referencing another area where sloping was of concern, namely the “Topsail Bluff” area, the commissioner noted that the Town had commissioned a geo-technical study on slope stability.

The commissioner recommended that, until the supplementary studies were conducted, it was advisable to keep Conservation zoning in place. [ 120 ] The Background Report contains slope and elevation maps including Figure 11 that depict slopes of 20% or greater in the Conservation Properties area. [ 121 ] The Applicants allege that a portion of the Conservation Properties is less steep than asserted by the Town.

If that is so, it is not clearly shown on the Record of evidence available to the Town at the time of making its decision. [ 122 ] Regardless, reasonableness review does not require a standard of perfection; rather decisions must be made within the applicable factual and legislative constraints. [ 123 ] The Town’s decision to zone steeper sloped areas as Conservation was not an arbitrary decision or one targeted at the Applicants.

Although it resulted in an oddly shaped portion of the Properties being zoned Conservation, the Conservation zone designation appears consistent with the slope mapping contained in the Background Report. [ 124 ] I do not find any ambiguity in the wording of the 2016 Municipal Plan or 2016 Development Regulations. A purpose of Conservation zoning is to provide a buffer around areas of known hazard. I am able to follow the logic of the Town’s decision.

Steep Slopes were the hazard of concern in the Town’s decision to designate as Conservation the portions of the Properties with slopes of 20% or more. [ 125 ] I conclude that the decision of the Town to rezone the Conservation Properties based on sloping issues was within the Town’s zoning authority granted pursuant to the URPA . [ 126 ] The Town’s decision was based on reasoning that is both rational and logical.

I was able to trace the Town’s reasoning and determine the line of analysis that could reasonably have led the Town to the conclusion at which it arrived in rezoning the Conservation Properties. [ 127 ] The Record does not readily reveal precisely when the Applicants were advised that the reason for the rezoning was due to the Town’s concern with sloping. It is clear however that they were in fact so informed as demonstrated in the communications between the parties after the zoning had taken effect.

While the parties may disagree as to the amount and severity of sloping, the Applicants acknowledge that sloping is the reason for the decision. I find that any duty by the Town to provide reasons was met. [ 128 ] The Applicants have not established that the Town acted outside its statutory authority when it zoned a portion of the Properties as Conservation. 2.

The Town did indirectly what should have been done directly [ 129 ] The Applicants submit that the Town cannot exercise its statutory authority to do indirectly what it has authority to do, and should do, directly through applicable legislation. [ 130 ] The Applicants contend that the change in the zoning of the Conservation Properties means the land is to be preserved in its natural state. Therefore, the Town is in essence establishing a park without paying for the acquisition of the land.

[ 131 ] The Applicants raised this as part of the judicial review because they contend that this was an unreasonable use of the Town’s zoning power. Any attempt to create a park, they submit, should have followed the provisions in the Municipalities Act, 1999 , S.N.L. 1999 c.

M-24 (“ Municipalities Act ”) and specifically the provisions that give the Town authority to purchase or expropriate land for park purposes by paying for the property. [ 132 ] Under section 111(1) of the URPA , statutory powers granted to the Town by the URPA are in addition to the power conferred upon the Town under the Municipalities Act. [ 133 ] The Applicants state that consequently, the Town’s zoning or class-setting authority pursuant to the URPA has to be interpreted with and in addition to its authority under the Municipalities Act concerning the creation of parks. [ 134 ] Although the Applicants have raised this issue on the judicial review component of this case, it is in essence their expropriation argument.

In my view, whether or not there was an expropriation, for any purpose , is better left to its own independent analysis under the second issue rather than assessed through the lens of judicial review. [ 135 ] In any event, I cannot conclude based on the Record that the Town acquired or established a park by virtue of the Conservation zoning. There is nothing in the Record to show that this has happened or to enable me to infer that the Town’s purpose in rezoning the Properties was for such future use. [ 136 ] The URPA grants the Town authority to create land use zones in the nature of Conservation zoning.

The stated purpose of Conservation zoning is to provide a natural buffer zone around certain areas including those of known hazard. [ 137 ] The Record demonstrates that the reason for the Conservation zoning was due to concerns with slope of the land – not for present or future purposes of creating a public recreational area or park. 3.

The Town has allowed “no reasonable use” of the Conservation Properties [ 138 ] The Applicants’ submit that the Conservation Properties have been deprived of all reasonable use and that the URPA does not grant the Town the power to remove all reasonable uses of land through zoning. It is in this respect, they say the Town improperly used its authority. [ 139 ] Consideration of the relevant provisions of the URPA causes me to disagree. [ 140 ] Section 96(2)(

a) of the URPA allows a land-owner to serve a purchase notice on a municipality where a development permit has been denied and the land “has become incapable of reasonably beneficial use.” [ 141 ] In enacting this provision, the legislature recognized that the URPA ’s application might result in situations where land has been deprived of all reasonable use. In such circumstances, it provides affected property-owners a mechanism through which to receive compensation. [ 142 ]

Section 96 is an exception to the general rule provided for under

section 5 of the URPA that loss of value is non-compensable. [ 143 ]

Section 98 of the URPA however acts as an exception to the exception. It stipulates that where development is prohibited in an area due to environmental reasons, no compensation is owing to the property owner by way of a purchase notice, notwithstanding that the land is no longer capable of reasonably beneficial use. [ 144 ] Given that the URPA allows this to occur and specifically provides immunity to the Town in certain situations, I am unable to conclude that the URPA does not permit the Town to remove all reasonable uses of land through zoning in certain circumstances. [ 145 ] In any event, as articulated in the

section of this decision dealing with constructive expropriation, I do not conclude that the Town has allowed no reasonable use of the Conservation Properties. Overall Analysis and Conclusion on Judicial Review [ 146 ] This judicial review arises not as the result of a bylaw that targeted a specific piece of property or because the Town denied a development permit regarding a specific piece of property.

Rather, it arises directly from the actions of the Town in the wake of carrying out and implementing its mandatory Municipal Plan Review . [ 147 ] Vavilov indicates that reasonableness review is as much concerned with process as it is with outcome. [ 148 ] The Town had stringent statutory requirements to meet in conducting the Municipal Plan Review . These were legal constraints on the Town. [ 149 ] I find that the Town complied with the procedural requirements prescribed by the URPA . [ 150 ] Throughout the Municipal Plan Review , the Town allowed for ample public consultation and feedback from property owners.

It engaged in a comprehensive consultation and review process. Attempts were made to notify affected stakeholders of the Municipal Plan Review . The purpose of this consultative process is to increase transparency, one of the hallmarks of reasonableness. [ 151 ] Multiple opportunities for public comment were offered during the review period. A public hearing was held for affected parties to voice their concerns. Individual property owners raised concerns as to whether their land was appropriately zoned Conservation due to

slope. These concerns were reflected in the commissioner’s report. [ 152 ] The Applicants did not participate in this process. That is not determinative of whether the decision was reasonable. Vavilov instructs that I am to look at the evidence placed before the Town as the decision-maker. [ 153 ] The Record shows that the notice and advertisement provisions under the URPA were fulfilled. The Applicants had an opportunity to participate in consultation. They did not do so.

Had the Applicants done so, it is reasonable to conclude the Town would have been attentive to their concerns as they were for other property holders who raised concerns during the process. [ 154 ] The reason for the Town rezoning the Conservation Properties was due to sloping concerns. This was based upon the information presented to the Town through the Municipal Plan Review process.

The Town was entitled to rely upon the information obtained through the process that indicated a relationship between steep slopes and increased risks in making its decision to zone as Conservation properties believed to have slopes equal or greater than 20%. [ 155 ] The Town followed the process mandated by the URPA and came to an intelligible decision. I conclude that the hallmarks of justification, transparency, and intelligibility were met. [ 156 ] The decision of the Town to rezone the Properties was reasonable.

The decision ought to be afforded deference in these circumstances. [ 157 ] The judicial review portion of the Application is dismissed. Issue 3: Were the Conservation Properties constructively expropriated by the Town because of the rezoning? The Evidence [ 158 ] In considering this issue, I have the evidence of the Record from the judicial review portion of the Application. [ 159 ] In addition, the Application was supported by brief affidavits of the Applicants: Gerry Spracklin as President of Index Investments Inc., Derrick Spracklin, Stanley Marshall and Elizabeth Marshall.

These are standard form affidavits attesting to the affiants having knowledge of the facts contained in the Application and those facts being true to the best of their knowledge information and belief. [ 160 ] The Application states, in part, the following: • As of 2012, Town officials knew through contact with the Applicants that they intended to develop the Properties into residential building lots as permitted by the RSA zoning. • Town officials knew that the Properties were going to be developed once the adjacent and nearby residential lots and services were developed. • Before Index purchased its property in 2012, Gerry Spracklin contacted Town officials to confirm there were no issues with development of the property and potential residential development of the property was confirmed to him by those officials. • The Applicants did not know about the change in zoning.

No one from the Town contacted them to advise them of it. • Under the new zoning most of the Properties went from being developable as residential housing to being un-usable park land. • The Properties have been down-zoned from being developable for residential housing to not being developable in any manner. [ 161 ] Attached to the Application were a number of exhibits which counsel for the Applicants referenced in submissions.

The exhibits attached to the Application are not noted, however, to be exhibits to a specific Applicant’s Affidavit nor are the exhibits specifically referenced in the affidavits as would normally be expected in putting evidence before the Court.

Notwithstanding this irregularity, given that the Application is grounded in standard form affidavits of the Applicants, I have considered the exhibits which contain communications involving the Applicants. [ 162 ] The exhibits attached to the Application included a number of maps and excerpts from a report dated July 7, 2020, of the engineering firm retained by the Applicants, MAE Design Limited. The report states that it is the understanding of the author that the limits for the Conservation zoning were defined by the Town based on the existing land slope.

Where the land slope exceed 20%, the property would be taken into the Conservation zone. The report indicates that a review was carried out resulting in the opinion that some of the land zoned as Conservation did not have a slope greater than 20%. [ 163 ] The author of the report was not called to testify, nor was there affidavit evidence adduced from any representative of MAE Design Limited. Therefore, there was no

interpretation of the maps or explanation for what appeared to be a discrepancy between maps in the size and area of the Conservation Properties (eg. Exhibits 7 and 11). [ 164 ] As the MAE Design Report was not properly adduced into evidence, I cannot rely upon its contents or opinions expressed in terms of the topography or size of the Conservation area. [ 165 ] On this point, the most I can glean from the evidence based upon the contents of the Application and the statements by Gerry Spracklin (contained in email communications attached as exhibits to the Application) is that the Applicants dispute that the entirety of the Conservation Properties has 20% sloping.

[ 166 ] Attached as exhibit 10 to the Application is a document which counsel for the Applicants submitted was prepared by Gerry Spracklin (although it is not signed by him). It includes several statements including that the Conservation zone resulted in “a tremendous loss of property that rendered development out of the question.” This document also references numerous emails and a meeting between the Applicants and the Town since November 2018 to try to resolve the problem but with no solution having been found. [ 167 ] The Record contains a letter from Gerry Spracklin to the Town in September 25, 2018.

In that letter, similar comments were made. Mr. Spracklin wrote that the Applicants had previously discussed future development and possible combinations of their properties. He further wrote that the impact of the new Conservation zone was quite substantial and that they had lost the ability to develop their properties “to the maximum potential”. Mr.

Spracklin further wrote that this resulted “in substantial loss of value and revenue”. [ 168 ] Exhibits attached to the Application include email communications, after the rezoning had been effected, between Town officials and Gerry Spracklin in which the parties appear to be exploring potential solutions to the Applicants’ concerns arising from the rezoning. [ 169 ] In an email dated February 26, 2020, Lisa Niblock wrote to the Applicants indicating that the Respondent would receive proposals on how to develop the subject property within the guidelines of the 2016 Municipal Plan , or would review information concerning the “tightening up” of the Conservation zone should the Applicants invest in this. [ 170 ] The final email exchanges between the parties include an email from Gerry Spracklin on September 8, 2020 and a response by Ms.

Niblock to the Applicants dated September 15, 2020. [ 171 ] Through the September 8, 2020 email, Mr. Spracklin sent along documents from MAE Design Ltd. who he states the Applicants engaged to establish a more realistic view of the grade percentages. Mr. Spracklin indicates that 20% - 30% of the Conservation Properties have less than the Town’s criteria of 20% slopes. He continues by writing: “We recognize and appreciate that the Town has offered to work with us to come to a compromise, regarding development of this property, however this will not work for us.

At this time and even in the foreseeable future we have no plans to develop this property and we do not see ourselves spending thousands of dollars on a development design that may never occur. We also do not wish to put impediments to any future owners.” [ 172 ] Mr. Spracklin further notes in this correspondence that from a negotiating point of view, the Applicants offered the Town to keep 10% of the Properties as greenspace for any future development (or other use). The Town had refused this offer. He wrote that the Town had put forward the offer of working together, which the Applicants must decline.

He concluded by stating they were still open to negotiations but it must be equitable to them. [ 173 ] In her response to Mr. Spracklin on September 15, 2020, Ms. Niblock stated the methodology utilized by the Town is more accurate than the information provided by MAE Design. She wrote further that, the offer of 10% of the land is a requirement for all developments within the Town and is not a negotiable item. Lastly, she wrote any path forward would require more engineering on the part of the Applicants.

She concludes with a statement that she hopes they can meet to “discuss options to move your development ahead responsibly.” The Test [ 174 ] The Applicants must meet the two-prong test articulated by the Supreme Court of Canada in Canadian Pacific Railway v. Vancouver (City ), 2006 SCC 5 to establish that there has been constructive expropriation (the “ CPR test”). They must prove, on a balance of probabilities, that:

i) The Town acquired a beneficial interest in, or flowing from, the Conservation Properties; and ii) There was a removal of all reasonable uses of the Conservation Properties. [ 175 ] Recently the majority decision in Annapolis Group Inc. v Halifax Regional Municipality , 2022 SCC 36 , at paragraphs 25 and 41 , emphasized that the CPR test remained unchanged, and that prior constructive taking jurisprudence remained good law. [ 176 ] The majority in Annapolis at paragraph 4, summarized the test as follows: … Read in harmony with the jurisprudence upon which it was decided, CPR signifies that a constructive taking occurs where: (1) a beneficial interest — understood as an advantage — in respect of private property accrues to the state, which may arise where the use of such property is regulated in a manner that permits its enjoyment as a public resource; and (2) the impugned regulatory measure removes all reasonable uses of the private property at issue. [ 177 ] Annapolis primarily provided clarity regarding the first branch of the CPR test concerning the nature of the interest the public authority must receive in order to constitute constructive taking. [ 178 ] The interest is best understood as an “advantage” which can be something less than an actual taking ( Annapolis at paragraph 25). [ 179 ] Thus, for the Applicants to establish constructive taking, they need not prove that their property was actually taken, but must prove the Town received some advantage as a result of alleged taking. [ 180 ] The majority in Annapolis at paragraph 77, noted: … [In] most cases, a public authority will not benefit from a refusal to up-zone vacant land.

As such, even if all reasonable uses of land

are eliminated by a zoning refusal, the first element of the CPR test for a constructive taking would not ordinarily be met. … [181] Canadian courts have been reluctant to find constructive expropriation results from restrictions placed by government authoritieson property usage and development. This is because in Canada land use regulation is to be expected. In Mariner, Cromwell J.A. stated atparagraph 42: In this country, extensive and restrictive land use regulation is the norm. Such regulation has, almost without exception, been found notto constitute compensable expropriation.

It is settled law, for example, that the regulation of land use which has the effect of decreasingthe value of the land is not an expropriation. [182] In Lynch v. St.

John’s (City), 2016 NLCA 35, the Newfoundland and Labrador Court of Appeal, citing Mariner, stated atparagraph 45, that land use regulation has rarely been found to constitute compensable expropriation in Canada and that the regulation ofland use, even when it has the effect of decreasing the value of land, is not usually found to be a compulsory taking. [183] Bearing these principles in mind, I will now consider whether the Applicants have met the two-prongs of the CPR test.

i) Did the Town acquire a beneficial interest in, or flowing from, the Conservation Properties? The Law [184] To meet the first prong of the CPR test, the Applicants must prove on the balance of probabilities that the Town acquired abeneficial interest in, or flowing from, the Conservation Properties. [185] The majority in Annapolis provided significant commentary in describing the nature of the beneficial interest an applicant mustdemonstrate in order to make out a compensable claim for constructive taking. [186] Annapolis originated as an application for

summary judgment by the City of Halifax in response to a claim of constructiveexpropriation by Annapolis. Annapolis alleged that Halifax improperly used its regulatory powers to seize lands for use as a public park.The Nova Scotia Court of Appeal sided with the City in granting

summary judgment.

In doing so, it found that the requisite “beneficialinterest” necessitated that the land actually be taken from an owner and acquired by the City. [187] Annapolis was successful in its appeal to the Supreme Court of Canada. [188] The Supreme Court clarified that the “beneficial interest” prong of the test requires the applicant to demonstrate that the publicauthority derived an advantage, in effect, from private property, not that the authority formally acquired a proprietary interest in the land(Annapolis at paragraph 41). [189] The “advantage” that Annapolis alleged Halifax gained was the promotion of their property for use as a public park withouthaving to compensate them for it.

In deciding in favour of Annapolis, the Supreme Court found that the question of whether Halifaxpromoted the use of the Annapolis lands as a park was material to whether the City had gained an advantage. The Supreme Court madeno finding that Annapolis’ lands were in fact constructively taken as evidence had not yet been led on this point. However the facts asalleged by Annapolis were material to the CPR test so it was inappropriate to enter

summary judgment. Annapolis was entitled to anopportunity to adduce evidence to support the allegations at trial. [190] The majority in Annapolis emphasized that they were not changing the requirements of the CPR test, rather they were clarifyingthem. Therefore, a review of previously decided constructive expropriation cases is helpful in assessing the types of advantages that maymeet the first prong of the CPR test. [191] Manitoba Fisheries Ltd. v.

R., (SCC), [1979] 1 SCR 101, is a foundational case on the law of constructive taking.It involved a claim from a fishing enterprise that had historically purchased fish from fisherman in Manitoba for sale interprovincially.The federal government introduced legislation that gave a Crown corporation the exclusive right to carry on interprovincial fishmarketing. [192] Manitoba Fisheries Ltd. sued the federal government claiming compensation for its loss of business including for loss ofgoodwill. The Supreme Court held that a business’s goodwill was part of its property the same as their tangible assets.

The effect of thelegislation was the acquisition of that goodwill by the Crown corporation. [193] In Annapolis, at paragraph 29, the Supreme Court explained how the legislation in Manitoba Fisheries conferred a benefit to thegovernment that it would not otherwise have had but for the plaintiff company’s deprivation.

That benefit was the monopoly created bythe legislation which allowed the government to acquire the advantage that Manitoba Fisheries Ltd. previously enjoyed from itsreputation and connections. [194] Central to the outcome in Manitoba Fisheries was the fact that the government was found to have received, in effect, theadvantage of the goodwill possessed by the plaintiff company. The majority’s reasons in Annapolis highlight how the law ofconstructive taking does not require the public authority to actually appropriate an individual’s property in order to entitle the claimant tocompensation.

However, the applicant must demonstrate that the public authority has received an actual benefit as a result of its action. [195] In British Columbia v. Tener, (SCC), [1985] 1 SCR 533, the respondent individuals were registered owners ofmineral rights that previous landowners had assumed through a Crown grant. Since the original grant, the land had been subsumed

within a provincial park. While the respondents continued to own the mineral rights in the park, the conditions governing resource extraction became restrictive and the owners were denied the necessary park use permits to explore or work their claims. Eventually they were advised that no new exploration or development would be permitted under the park policy. [ 196 ] The central issue in Tener was whether the Crown’s refusal to grant a park use permit amounted to constructive taking giving rise to a compensable claim.

In finding that it did, Estey J., wrote at paragraphs 20 and 21: 20 The denial of access to these lands occurred under the Park Act and amounts to a recovery by the Crown of a part of the right granted to the respondents in 1937. This acquisition by the Crown constitutes a taking from which compensation must flow. Such a conclusion is consistent with this court's judgment in Man. Fisheries Ltd. v. R. … 21 This process I have already distinguished from zoning, the broad legislative assignment of land use to land in the community.

It is also to be distinguished from regulation of specific activity on certain land, as for example, the prohibition of specified manufacturing processes. This type of regulation is akin to zoning except that it may extend to the entire community: … Here, the action taken by the government was to enhance the value of the public park. The imposition of zoning regulation and the regulation of activities on lands, fire regulation limits and so on add nothing to the value of public property.

Here the government wished, for obvious reasons, to preserve the qualities perceived as being desirable for public parks, and saw the mineral operations of the respondents under their 1937 grant as a threat to the park. The notice of 1978 took value from the respondents and added value to the park. The taker, the government of the province, clearly did so in exercise of its valid authority to govern. It clearly enhanced the value of its asset, the park. The respondents are left with only the hope of some future reversal of park policy and the burden of paying taxes on their minerals.

The notice of 1978 was an expropriation and, in my view, the rest is part of the compensation assessment process. [ 197 ] Tener is in accordance with the test as stated in CPR and clarified in Annapolis . The public authority gained an enhancement in the value of the land that was subject to a provincial Parks Act and which was actively being promoted and used as a park. [ 198 ] The Supreme Court’s comments in Tener with respect to zoning are of additional importance to the case before me.

As noted, the distinguishing line between whether a regulation amounts to a constructive taking rather than “mere” zoning is specifically the question of whether the public authority has assumed a benefit. [ 199 ] The evidentiary record in Tener enabled the Supreme Court to find that the regulation had “added value” to the existing park.

That finding was instrumental—when coupled with the complete deprivation of the respondents’ ability to exploit their mineral rights— to the conclusion that the public authority committed a constructive taking. [ 200 ] As noted in Annapolis , at paragraphs 32-37, the important finding in Tener was not that the government had actually taken the subject mineral rights themselves, but rather that they, in effect, had improved public property by taking the advantages the mineral rights would normally have afforded.

Without this assumption by a public authority of a beneficial interest in the nature of an advantage, there would be nothing “taken” so as to afford a property-holder a right to compensation. [ 201 ] Mariner held that restriction of development generally does not result in the acquisition of an interest in land by a regulating authority. In that case there was no evidence that the economic value of the Crown’s land had been enhanced ( Mariner , at paragraphs 105-106). [ 202 ] In Mariner, the plaintiffs owned land in areas designated “beaches” under the provincial Beaches Act .

The responsible minister prohibited development of land within designated areas and specifically rejected applications from the plaintiffs for permits to construct houses. The plaintiffs brought an action for a declaration that the designation of their property as “beach” and the subsequent prohibition of development effectively amounted to expropriation.

The court concluded that freezing development in a beach zone for environmental protection did not constitute a “taking” sufficient to establish constructive expropriation. [ 203 ] While the reasons in Mariner are largely couched in the language and entitlements afforded by the provincial expropriation legislation, Mariner was influential on the development of the CPR test.

This is particularly so with respect to the role the “beneficial interest” branch serves to the constructive taking doctrine as a whole. [ 204 ] At paragraphs 82, 94 and 95, Cromwell, J.A. wrote: 82 It follows that, where the effect of land use regulation is to eliminate virtually all the normal incidents of ownership, this will be reflected in the market value of the land .

It is not, however, the decline in market value that constitutes the loss of an interest in land, but the taking away of the incidents of ownership reflected in that decline. … 94 … In other words, the effect of the regulatory scheme [in Tener ] was not only to extinguish the mineral rights of the respondents, but to re-vest them in the Crown… 95 The respondents place great weight on comments of Estey, J. in Tener to the effect that the action taken by the government was to enhance the value of the park.

These comments, while on their face supportive of the respondents' position, must be read in the context of Estey, J.'s statements in the case that an expropriation necessarily involves the acquisition of land and that the extinguishment of the Teners' mineral rights constituted, in effect, the re-acquisition of such rights by the Crown. I do not think, with respect, that his statements to the effect that the re-acquisition enhanced the value of the park takes away from his holding that the Crown re-acquired in fact, though

not in law, the mineral rights which constituted land under the applicable definition. … [emphasis added] [ 205 ] Mariner underscores why it is insufficient for a party merely to show a devaluation of property in order to ground a claim for compensation under the doctrine of constructive taking.

In other words, should a party not establish that the government has gained an “advantage” accompanying a removal of the incidents of ownership, then - at best - they have established that the devaluation was an exercise of regulatory authority with respect to zoning. [ 206 ] This approach was reinforced in Annapolis at paragraph 43: Mariner illustrates that regulation alone will not satisfy the test for a constructive taking; there must be something more "beyond drastically limiting use or reducing the value of the owner's property" (p. 716).

When this threshold is crossed — that is, where all reasonable uses have been removed — a regulation may be, " in effect , confiscation" (p. 727 (emphasis added)). To be clear, Mariner does not stray from focussing on both the effect of the taking and the advantage acquired by the government, as required by this Court's jurisprudence and affirmed in the test set out in CPR.

Rather, and consistent with both Manitoba Fisheries and Tener , Mariner asked whether the effect of the regulation was to remove an interest in land. [ 207 ] In CPR , the plaintiff railway company sought to develop a railway corridor for residential or commercial purposes as it was no longer being used for transportation. The City of Vancouver wanted to preserve the corridor for transportation purposes and adopted a by-law that designated the corridor as a public thoroughfare for transportation and “greenways” like heritage walks, nature trails, and cyclist paths.

The effect of the by-law was to freeze redevelopment of the corridor and to confine the plaintiff to uneconomic uses of the land. The plaintiff claimed that the property was subject to constructive expropriation. The Supreme Court determined that the plaintiff had not established either branch of the CPR test. [ 208 ] With respect to the requirement that the city acquire a beneficial interest, McLachlin C.J.C. wrote at paragraphs 32 and 33: 32 First, CPR has not succeeded in showing that the City has acquired a beneficial interest related to the land.

To satisfy this branch of the test, it is not necessary to establish a forced transfer of property. Acquisition of beneficial interest related to the property suffices… 33 CPR argues that, by passing the ODP By-law, the City acquired a de facto park, relying on the observation of Southin J.A. that "the by-law in issue now can have no purpose but to enable the inhabitants to use the corridor for walking and cycling, which some do (trespassers all), without paying for that use" (para. 117). Southin J.A. went on to say: "The shareholders of ...

CPR ought not to be expected to make a charitable gift to the inhabitants" (para. 118). Yet, as Southin J.A. acknowledged, those who now casually use the corridor are trespassers. The City has gained nothing more than some assurance that the land will be used or developed in accordance with its vision, without even precluding the historical or current use of the land. This is not the sort of benefit that can be construed as a "tak[ing]". [ 209 ] In CPR , the Supreme Court found that the City of Vancouver did not appropriate the subject lands for use as a park by passing the impugned by-law.

The by-law was passed as an aspect of planning for future use of the land. The land itself had not been promoted as a park and Vancouver did not gain an advantage that would render compensation payable. [ 210 ] In Lynch , the nature of the advantage secured by the City of St. John’s was central to the determination that the property had been the subject of a constructive taking. The Lynches’ property was located in the watershed for bodies of water upon which the city relied. The City denied the Lynches all forms of development of their property.

They were required to maintain the property “unused in its natural state” with its groundwater uncontaminated so that the City could have a continuous flow of pristine groundwater for its water supply. [ 211 ] In deciding in favour of the Lynches, the Court of Appeal found that the City acquired the tangible benefit of the continuous flow of groundwater by taking away the Lynches’ beneficial interest in the groundwater ( Lynch at paragraph 60 ). [ 212 ] In Lynch , the purpose of the by-law was to protect the purity and flow of the groundwater in the watershed to ensure the continued viability of the water supply.

In this context, the “advantage” received by the City is relatively straightforward. The City did not actually “take” title to the groundwater, but by preventing any development from occurring, it deprived the Lynches of all the benefits of owning the property. [ 213 ] The majority in Annapolis wrote favourably of the Lynch decision, and quoted the portions of the decision relevant to finding that the branches of the CPR test were satisfied.

In a discussion of the evidentiary role played by the intention of the public authority, the majority, at paragraph 55, wrote: … [t]he court referred to the City's express intention "to take away the Lynches' right to appropriate the groundwater on their land" so as to secure the City's "right to a continuous flow of uncontaminated groundwater downstream to [its] water facilities" (para. 60). Moreover, the City took the view that securing this objective required the prohibition of "all activity on the Lynch property" (para. 62 ).

The City's intention, as implemented by its officials, thus indicated that the land in issue had been constructively taken. [ 214 ] The foregoing review of the jurisprudence clarifies that in order to find compensable constructive taking, it is imperative that the Applicants prove that the Town

[…]