Annapolis Group Inc. Appellant v. Halifax Regional Municipality, 2022 SCC 36

SUPREME COURT OF CANADA Citation: Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36 Appeal Heard: February 16, 2022 Judgment Rendered: October 21, 2022 Docket: 39594 Between: Annapolis Group Inc.

Appellant and Halifax Regional Municipality Respondent - and - Attorney General of Canada, Attorney General of Ontario, Attorney General of Nova Scotia, Attorney General of British Columbia, Canadian Constitution Foundation, Ontario Landowners Association, Canadian Home Builders’ Association and Ecojustice Canada Society Interveners Coram: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.

Joint Reasons for Judgment: (paras. 1 to 80) Côté and Brown JJ. (Wagner C.J. and Moldaver and Rowe JJ. concurring) Joint Dissenting Reasons: (paras. 81 to 153) Kasirer and Jamal JJ. (Karakatsanis and Martin JJ. concurring) Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports .

Annapolis Group Inc. Appellant v. Halifax Regional Municipality Respondent and Attorney General of Canada, Attorney General of Ontario, Attorney General of Nova Scotia, Attorney General of British Columbia, Canadian Constitution Foundation, Ontario Landowners Association, Canadian Home Builders’ Association and Ecojustice Canada Society Interveners Indexed as: Annapolis Group Inc. v. Halifax Regional Municipality 2022 SCC 36 File No.: 39594. 2022: February 16; 2022: October 21.

Present: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ. on appeal from the court of appeal for nova scotia Expropriation — State regulation of land use — Constructive taking of private property by public authority — Land owner suing municipality and alleging that municipality’s regulatory measures have deprived it of all reasonable or economic uses of its land, resulting in constructive taking without compensation — Whether acquisition of beneficial interest in property under constructive taking test requires land to actually be taken from owner and acquired by public authority — Whether intention of public authority relevant to analysis of constructive taking claim.

Over time from the 1950s, Annapolis acquired 965 acres of land (the “Lands”) with the intention of eventually securing enhanced development rights and reselling it. In 2006, Halifax adopted a planning strategy to guide land development in the municipality, including the Lands, over a 25-year period. The strategy reserved a portion of the Lands for possible future inclusion in a regional park. It also zoned the Lands as “Urban Settlement”, which denotes an area where urban forms of development may occur and as “Urban Reserve”, which identifies land that could be developed beyond the 25-year horizon.

These designations contemplate future service development, but for serviced development to occur on the Lands, Halifax must adopt a resolution authorizing it. Beginning in 2007, Annapolis made several attempts to develop the Lands. Ultimately, by resolution in 2016, Halifax refused to initiate the secondary planning process, and Annapolis sued, alleging a constructive taking, misfeasance in public office, and unjust enrichment.

With respect to the constructive taking claim, Annapolis contends that Halifax’s regulatory measures have deprived it of all reasonable or economic uses of the Lands, resulting in a constructive taking without compensation. Halifax sought

summary dismissal of Annapolis’ constructive taking claim. The motion judge dismissed Halifax’s motion, finding that Annapolis’ constructive taking claim raised vast genuine issues of material fact requiring a trial. On appeal by Halifax, the Court of Appeal held that Annapolis’ constructive taking claim did not have a reasonable chance of successfully establishing, as required by Canadian Pacific Railway Co. v.

Vancouver (City) , 2006 SCC 5 , [2006] 1 S.C.R. 227 (“ CPR ”), an acquisition by Halifax of a beneficial interest in the Lands or flowing from the Lands — which necessitated that the Lands actually be taken from Annapolis and acquired by Halifax — and the removal of all reasonable uses of the Lands. It was also of the view that Halifax’s intended use for the Lands was not relevant to the constructive taking analysis. The Court of Appeal struck the claim. Held (Karakatsanis, Martin, Kasirer and Jamal JJ. dissenting): The appeal should be allowed and the order of the motion judge restored.

Per Wagner C.J. and Moldaver, Côté , Brown and Rowe JJ.: The Court of Appeal erred in holding that an “acquisition of a beneficial interest” under the constructive taking test established by the Court in CPR requires land to actually be taken from an owner and acquired by the state. A “beneficial interest” is to be broadly understood as an “advantage”; as such, the interest acquired by the state

can fall short of an actual acquisition by the state. Further, the Court of Appeal erred in holding that evidence of the state’s intended use of the impugned land is irrelevant to a claim for constructive taking. There are genuine issues of material fact arising from Annapolis’ constructive taking claim to be tried. It should therefore be allowed to proceed to trial. Constructive taking is the preferable term for expropriation through regulation as it more accurately captures the nature of the state action at issue and the effect on the landowner.

A “taking” is a forcible acquisition by the Crown of privately owned property for public purposes. It may take the form of a constructive taking (effective appropriation of private property by a public authority exercising its regulatory powers), or a de jure taking (formal expropriation), by (in the case of land) taking title. Not every instance of regulating the use of property amounts to a constructive taking. Governments and municipalities holding delegated provincial regulatory authority validly regulate land in the public interest without effecting “takings”, properly understood.

The line between a valid regulation and a constructive taking is crossed where the effect of the regulatory activity deprives a claimant of the use and enjoyment of its property in a substantial and unreasonable way, or effectively confiscates the property. The test to show a constructive taking is that stated by CPR , properly understood. The test provides that the reviewing court must decide: (1) whether the public authority has acquired a beneficial interest in the property or flowing from it (i.e. an advantage); and (2) whether the state action has removed all reasonable uses of the property.

The jurisprudence, upon which the CPR test was expressly stated as resting, supports an understanding of “beneficial interest” as concerned with the effect of a regulatory measure on the landowner, and not with whether a proprietary interest was actually acquired by the government. That same jurisprudence supports the view that “beneficial interest” refers not to actual acquisition of the equity that rests with the beneficial owner of property, connoting rights of use and enjoyment, but to an advantage flowing to the state.

To require actual acquisition would collapse the distinction between constructive ( de facto ) and de jure takings — a distinction which CPR explicitly preserves. If a constructive taking requires an actual taking, then it is no longer constructive. Furthermore, interpreting “beneficial interest” broadly (as meaning a benefit or an advantage accruing to the state) ensures CPR ’s coherence with previous jurisprudence, which did not understand “benefits” in the strict equitable sense of that term. CPR merely sought to affirm, and not alter, the law of constructive takings. This

interpretation is supported by the wording under the first part of the CPR test: “a beneficial interest in the property or flowing from it”. An interest flowing from the property affirms that a “beneficial interest” can be more broadly understood as an advantage, and need not be an actual acquisition. Such an

interpretation gives effect to the Court’s acknowledgement of a common law right to compensation where the two-part CPR test is satisfied. It accords with imperatives of justice and fairness, which underpin the Court’s assessment of expropriation claims, and remedies situations where cases do not neatly fit within the expropriation legislative framework. As the test focusses on effects and advantages, substance and not form is to prevail. A court deciding whether a regulatory measure effects a constructive taking must undertake a realistic appraisal of matters in the context of the specific case, including but not limited to (

a) the nature of the government action, notice to the owner of the restrictions at the time the property was acquired, and whether the government measures restrict the uses of the property in a manner consistent with the owner’s reasonable expectations; (

b) the nature of the land and its historical or current uses; and (

c) the substance of the alleged advantage. The public authority’s intention is not an element of the test for constructive taking at common law. The mischief addressed by the doctrine is one of advantages and effects, not that a public authority acted in bad faith or with an otherwise ulterior motive. However, intention can be relevant to the inquiry. The underlying objective pursued by a public authority may provide supporting evidence for a constructive expropriation claim, but it is neither necessary nor sufficient.

The assessment of intent has proved to be helpful in distinguishing between mere regulations in the public interest and takings requiring compensation at common law. What ultimately matters, however, irrespective of matters of intent, is whether the state-imposed restrictions on the property conferred an advantage on the state that effectively amounts to a taking.

In the instant case, the motion judge’s legal conclusions that (1) a constructive taking need only have the effect of defeating the landowner’s reasonable use of land; and (2) the state’s intent may be relevant in assessing whether all reasonable uses of the land has been removed, were legally correct. The Court of Appeal did not identify any legal error or patent injustice that would justify interfering with the motion judge’s decision to dismiss Halifax’s

summary judgment motion on the basis of the existing triable issues. Two disputed factual issues are particularly material to the CPR test. First, it is disputed whether Halifax is promoting the Lands as a public park; this is material because, if proven, it would tend to support Annapolis’ claim that Halifax acquired a beneficial interest in the Lands. Preserving a park in its natural state may constitute an advantage accruing to the state, thus satisfying the “acquisition” element of CPR .

Second, it is disputed whether Halifax, by allegedly treating the Lands as a public park, has eliminated all uses of the Lands except service development, which is conditional upon the approval of Annapolis’ secondary planning applications. This is material because, if proven, it may arguably support Annapolis’ claim that it has lost all reasonable uses of its property.

If Annapolis can prove at trial that Halifax is unlikely to ever grant a secondary planning approval, this is clearly material to its constructive taking claim, as all reasonable uses of the land may be shown to have been eliminated where a permit needed to make reasonable use of the land is refused, such that the state has effectively taken away all rights of ownership. Per Karakatsanis, Martin, Kasirer and Jamal JJ. (dissenting): The appeal should be dismissed. There is disagreement with the majority’s proposed changes to the CPR precedent and with how the majority applies the law in the instant case. Partial

summary judgment dismissing Annapolis’ de facto taking claim was properly granted as that claim has no real chance of success. First, there is disagreement with the majority’s view that the first element of the CPR test, which requires “an acquisition of a beneficial interest in the property or flowing from it”, should be replaced with the much broader notion of an advantage, whether or not a proprietary interest was actually acquired by the government. Instead, the Court should retain the CPR test for a de facto taking, which insists that a proprietary interest be acquired.

CPR and the authorities it cited show there is no de facto taking unless there is both acquisition of a beneficial interest in the property or flowing from it and a removal of all reasonable uses of the property. The interest must be proprietary — not merely an advantage — and the acquisition must correspond to the deprivation. The majority has provided no basis for the Court to depart from the acquisition requirement as framed in CPR .

The majority does not suggest that such a departure from precedent is needed to keep the common law in step with the evolution of society, to clarify a legal principle, or to resolve any inconsistency in the law, which are some of the usual grounds justifying evolution of the common law. To the contrary, courts in common law Canada have applied the CPR test without difficulty, and no court has expressed concerns that the test is unworkable or unnecessarily complex. CPR is settled law and there is no reason to change it. Furthermore, the majority’s reformulation of the

acquisition requirement and departure from CPR as precedent has significant ramifications. It dramatically expands the potential liabilityof municipalities engaged in land use regulation in the public interest and throws into question the settled law that a refusal to up-zone(i.e., re-zoning to enlarge the permissible uses of land) is not a de facto taking. Second, there is disagreement with the majority’s view that a public authority’s intention is a material fact in a claim for a defacto taking. This is also an unwarranted departure from CPR and the Court’s prior jurisprudence.

Intention is not an element of the testfor a de facto or constructive taking; it is equally not a material fact supporting such a claim. Although the public authority’s intentionmay provide narrative background or context or may be relevant to an administrative law claim that its actions were ultra vires as havingan improper purpose or being in bad faith, it is not relevant to a de facto taking claim, which is concerned with the effect of the publicauthority’s actions, not with its intention. In the instant case, there is no material fact in dispute on either branch of the CPR test for a de facto taking.

Firstly, Halifaxhas acquired no beneficial interest in the Lands or flowing from them. It has simply refused to up-zone the Lands. Neither Halifax’s 2016municipal resolution refusing to up-zone the Lands nor Halifax’s alleged acts of encouraging the public to trespass raises any genuineissue of material fact that Halifax has acquired a beneficial interest in the Lands or flowing from them. The municipal resolution merelypreserved the status quo by refusing to allow lands that have always been vacant and treed and situated next to a protected wildernessarea to be developed into serviced residential communities.

Halifax’s adoption of a municipal resolution refusing to up-zone the Landsalso cannot be a basis for a de facto taking claim because the resolution did not result in Halifax acquiring any proprietary interest in theLands. Moreover, a public authority does not and cannot acquire a proprietary interest by encouraging others to trespass. Secondly, the uncontradicted evidence is that Annapolis has been deprived of no reasonable uses, let alone all reasonableuses, of the Lands. The zoning and uses of the Lands remain entirely unchanged.

The Lands remain vacant and treed, just as they havebeen since Annapolis acquired them. Annapolis has the same rights with respect to the Lands that it had prior to Halifax’s resolution in2016. Halifax’s refusal to up-zone the Lands in 2016 thus did not deprive Annapolis of any reasonable uses of the Lands. It simplydisappointed Annapolis’ hope of developing them. More importantly, even if Annapolis could somehow show that Halifax will neverup-zone the Lands, that could not establish that Annapolis has lost all reasonable uses of the Lands.

The Lands have never been used forserviced development, they have always been vacant and treed. The majority’s assertion amounts to saying that a refusal to up-zonevacant land can give rise to a de facto taking merely if all potential reasonable uses are prohibited. That would upset the settled lawreflected in the jurisprudence, and it would eliminate Halifax’s statutory and common law protection from liability for refusing toup-zone.

Removal of all reasonable uses of the land must be assessed in relation to both its potential uses as well as the nature of the landand the range of reasonable uses to which it has actually been put. Cases Cited By Côté and Brown JJ. Applied: Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227; considered: The Queen inRight of the Province of British Columbia v. Tener, (SCC), [1985] 1 S.C.R. 533; Mariner Real Estate Ltd. v. Nova Scotia(Attorney General), 1999 NSCA 98, 177 D.L.R. (4th) 696; Lynch v. St. John’s (City), 2016 NLCA 35, 400 D.L.R. (4th) 62; ManitobaFisheries Ltd. v.

The Queen, (SCC), [1979] 1 S.C.R. 101; Montréal (Ville) v. Benjamin (2004), (QCCA), 86 L.C.R. 161; referred to: Lorraine (Ville) v. 2646-8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577; Hryniak v. Mauldin,2014 SCC 7, [2014] 1 S.C.R. 87; Toronto (City) v. Ontario (Attorney General), 2021 SCC 34; Compliance Coal Corporation v. BritishColumbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215; Sun Construction Company Limited v. ConceptionBay South (Town), 2019 NLSC 102, 87 M.P.L.R. (5th) 256; Genevieve Holdings Ltd. v. Kamloops (City) (1988), 42 M.P.L.R. 171; SteerHoldings Ltd. v.

Manitoba, (MB KB), [1992] 2 W.W.R. 558, aff’d (1992), (MB CA), 99 D.L.R.(4th) 61; Purchase v. Terrace (City) (1995), 26 M.P.L.R. (2d) 126; Harvard Investments Ltd. v. Winnipeg (City) (1995), (MB CA), 129 D.L.R. (4th) 557; Attorney-General v. De Keyser’s Royal Hotel, [1920] A.C. 508; London and North WesternRailway Co. v. Evans, [1893] 1 Ch. 16; Belfast Corporation v. O.D. Cars Ltd., [1960] A.C. 490; Ulster Transport Authority v. JamesBrown & Sons, Ltd., [1953] N.I. 79; Farber v. Royal Trust Co., (SCC), [1997] 1 S.C.R. 846; C.M. Callow Inc. v.Zollinger, 2020 SCC 45; Ville de Léry v.

Procureure générale du Québec, 2019 QCCA 1375, 12 L.C.R. (2d) 132; Ville de La Prairie v.9255-2504 Québec inc., 2020 QCCS 307, 2020 CarswellQue 2737; Spénard v. Salaberry-de-Valleyfield (Cité de), [1983] C.S. 725;Dupras v. Ville de Mascouche, 2022 QCCA 350, aff’d in

part 2020 QCCS 2538, 15 L.C.R. (2d) 262; Wallot v. Québec (Ville), 2011QCCA 1165, 24 Admin. L.R. (5th) 306; Municipalité de Saint-Colomban v. Boutique de golf Gilles Gareau inc., 2019 QCCA 1402, 12L.C.R. (2d) 313; Meadowbrook Groupe Pacific inc. v. Ville de Montréal, 2019 QCCA 2037, 2019 CarswellQue 12262; Ville de Québecv. Rivard, 2020 QCCA 146, 15 L.C.R. (2d) 242; Ville de Saint-Rémi v. 9120-4883 Québec inc., 2021 QCCA 630; Bhasin v. Hrynew,2014 SCC 71, [2014] 3 S.C.R. 494; Coady v. Burton Canada Co., 2013 NSCA 95, 365 D.L.R. (4th) 172; Shannex Inc. v. DoraConstruction Ltd., 2016 NSCA 89, 58 C.L.R. (4th) 1.

By Kasirer and Jamal JJ. (dissenting) Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227; Manitoba Fisheries Ltd. v. TheQueen, (SCC), [1979] 1 S.C.R. 101; The Queen in Right of the Province of British Columbia v. Tener, (SCC), [1985] 1 S.C.R. 533; Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98, 177 D.L.R. (4th) 696;Friedmann Equity Developments Inc. v. Final Note Ltd., 2000 SCC 34, [2000] 1 S.C.R. 842; R. v. Salituro, (SCC),[1991] 3 S.C.R. 654; FortisBC Energy Inc. v. Surrey (City), 2013 BCSC 2382, 112 L.C.R. 89; Compliance Coal Corporation v.

BritishColumbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215; Genesis Land Development Corp. v. Alberta, 2009ABQB 221, 471 A.R. 1, aff’d 2010 ABCA 148, 477 A.R. 390; Kalmring v. Alberta, 2020 ABQB 81, 11 Alta. L.R. (7th) 177; AltiusRoyalty Corporation v. Alberta, 2021 ABQB 3, 23 Alta. L.R. (7th) 105, aff’d 2022 ABQB 255; Club Pro Adult Entertainment Inc. v.Ontario (2006), (ON SC), 27 B.L.R. (4th) 227, rev’d in

part 2008 ONCA 158, 42 B.L.R. (4th) 47; Railink CanadaLtd. v. Ontario (2007), 95 L.C.R. 17; Taylor v. Dairy Farmers of Nova Scotia, 2010 NSSC 436, 298 N.S.R. (2d) 116, aff’d 2012 NSCA1, 311 N.S.R. (2d) 300; Lynch v. St. John’s (City), 2016 NLCA 35, 400 D.L.R. (4th) 62; Sun Construction Company Limited v.Conception Bay South (Town), 2019 NLSC 102, 87 M.P.L.R. (5th) 256; Gosse v. Conception Bay South (Town), 2021 NLCA 23, 16L.C.R. (2d) 123; KMK Properties Inc. v. St. John’s (City), 2021 NLSC 122, 19 M.P.L.R. (6th) 150; Dennis v. Canada, 2013 FC 1197,

114 L.C.R. 1, aff’d 2014 FCA 232; Calwell Fishing Ltd. v. Canada, 2016 FC 312; Anglehart v. Canada, 2016 FC 1159, [2017] 2 F.C.R.74, aff’d 2018 FCA 115, [2019] 1 F.C.R. 504; Northern Cross (Yukon) Ltd. v. Yukon (Energy, Mines and Resources), 2021 YKSC 3, 16L.C.R. (2d) 1, rev’d in

part 2021 YKCA 6, 79 C.C.L.T. (4th) 179; Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2,[2012] 1 S.C.R. 5; Ulster Transport Authority v. James Brown & Sons, Ltd., [1953] N.I. 79; Montréal (Ville) v. Benjamin (2004), (QC CA), 86 L.C.R. 161; Lorraine (Ville) v. 2646-8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577, rev’g 2016QCCA 1803, 2 L.C.R. (2d) 299; Pillenière, Simoneau v. Ville de Saint-Bruno-de-Montarville, 2021 QCCS 4031, 19 M.P.L.R. (6th) 275;Dupras v. Ville de Mascouche, 2022 QCCA 350; Ville de Léry v. Procureure générale du Québec, 2019 QCCA 1375, 12 L.C.R. (2d)132; Wallot v.

Québec (Ville), 2011 QCCA 1165, 24 Admin. L.R. (5th) 306; Municipalité de Saint-Colomban v. Boutique de golf GillesGareau inc., 2019 QCCA 1402, 12 L.C.R. (2d) 313; Meadowbrook Groupe Pacific inc. v. Ville de Montréal, 2019 QCCA 2037, 2019CarswellQue 12262; Ressources Strateco inc. v. Procureure générale du Québec, 2020 QCCA 18, 32 C.E.L.R. (4th) 231; Ville deQuébec v. Rivard, 2020 QCCA 146, 15 L.C.R. (2d) 242; Ville de Saint-Rémi v. 9120-4883 Québec inc., 2021 QCCA 630; Hryniak v.Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89, 58 C.L.R. (4th) 1; R. v.

ImperialTobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45; Warman v. Law Society of Alberta, 2015 ABCA 368, 609 A.R. 83;Condominium Corp. No. 0321365 v. Cuthbert, 2016 ABCA 46, 612 A.R. 284; Rudichuk v. Genesis Land Development Corp., 2020ABCA 42, 98 Alta. L.R. (6th) 339; Wallbridge v. Brunning, 2018 ONCA 363, 422 D.L.R. (4th) 305. Statutes and Regulations Cited Canadian Charter of Rights and Freedoms, s. 26. Civil Code of Québec, art. 952. Expropriation Act, R.S.N.S. 1989, c. 156, ss. 6, 24. Halifax Mainland Land Use By-Law.

Halifax Regional Municipality Charter, S.N.S. 2008, c. 39, ss. 65, 227 to 229, 232(2), 237. Municipal Government Act, S.N.S. 1998, c. 18, ss. 212 to 214, 217(2), 222. Nova Scotia Civil Procedure Rules, r. 13. Wilderness Areas Protection Act, S.N.S. 1998, c. 27. Authors Cited Côté, Pierre-André, in collaboration with Stéphane Beaulac and Mathieu Devinat. The

Interpretation of Legislation in Canada, 4th ed.Toronto: Carswell, 2011. Emerich, Yaëll. Droit commun des biens: perspective transsystémique. Montréal: Yvon Blais, 2017. Hamill, Sarah E. “Common Law Property Theory and Jurisprudence in Canada” (2015), 40 Queen’s L.J. 679. Horsman, Karen, and Gareth Morley, eds. Government Liability: Law and Practice. Toronto: Thomson Reuters, 2022 (loose-leafupdated May 2022, release 1). Lavoie, Malcolm. “Canadian Common Law and Civil Law Approaches to Constructive Takings: A Comparative Economic Perspective”(2010), 42 Ottawa L. Rev. 229.

LeChasseur, Marc-André. “L’expropriation de facto au Canada et la transcendance des solidarités”, dans Service de la qualité de laprofession du Barreau du Québec, vol. 509, Développements récents en droit municipal. Montréal: Yvon Blais, 2022, 71. Makuch, Stanley M., Neil Craik and Signe B. Leisk. Canadian Municipal and Planning Law, 2nd ed. Toronto: Thomson Carswell, 2004.

Pelletier, Simon, et Frédéric Côté. “Développements récents en matière d’expropriation déguisée: distinction entre les recours en nullité,en dommages pour responsabilité extracontractuelle d’un organisme public et en expropriation déguisée”, dans Service de la qualité de laprofession du Barreau du Québec, vol. 468, Développements récents en droit de l’environnement. Montréal: Yvon Blais, 2019, 303. Todd, Eric C. E. The Law of Expropriation and Compensation in Canada, 2nd ed. Scarborough, Ont.: Carswell, 1992. Warchuk, Paul A. “Rethinking Compensation for Expropriation” (2015), 48 U.B.C. L. Rev. 655.

APPEAL from a judgment of the Nova Scotia Court of Appeal (Beveridge, Farrar and Derrick JJ.A.), 2021 NSCA 3, 17L.C.R. (2d) 21, 455 D.L.R. (4th) 349, 8 M.P.L.R. (6th) 165, [2021] N.S.J. No. 4 (QL), 2021 CarswellNS 4 (WL), setting aside a decisionof Chipman J., 2019 NSSC 341, 17 L.C.R. (2d) 1, [2019] N.S.J. No. 491 (QL), 2019 CarswellNS 817 (WL). Appeal allowed,Karakatsanis, Martin, Kasirer and Jamal JJ. dissenting. Peter H. Griffin, Rebecca Jones, Scott Rollwagen and Amy Sherrard, for the appellant. Michelle Awad, K.C., Martin Ward, K.C., and Jeremy Ryant, for the respondent.

Dayna Anderson, for the intervener the Attorney General of Canada. Robert B. Lawson and Vanessa Glasser, for the intervener the Attorney General of Ontario.

Written submissions only by Edward A. Gores , K.C. , for the intervener the Attorney General of Nova Scotia. Phong Phan and Tim Quirk , for the intervener the Attorney General of British Columbia. Malcolm Lavoie and Adrienne Funk , for the intervener the Canadian Constitution Foundation. Brandon Kain and Adriana Forest , for the intervener the Ontario Landowners Association. Written submissions only by Shane Rayman and Conner Harris , for the intervener the Canadian Home Builders’ Association. Randy Christensen and Sarah McDonald , for the intervener Ecojustice Canada Society.

The judgment of Wagner C.J. and Moldaver, Côté, Brown and Rowe JJ. was delivered by Côté and Brown JJ. — TABLE OF CONTENTS Paragraph I. Overview 1 II. Factual Background 5 III. Judicial History 11 A. Supreme Court of Nova Scotia, 2019 NSSC 341 , 17 L.C.R. (2d) 1 (Chipman J.) 11 B. Nova Scotia Court of Appeal, 2021 NSCA 3 , 455 D.L.R. (4th) 349 (Beveridge, Farrar and Derrick JJ.A.) 14 IV. Issues 16 V. Analysis 17 A. Overview of the Law of Takings 17 B. “Beneficial Interest” 27

(1) Manitoba Fisheries 28

(2) Tener 32

(3) Defining the Nature of a “Beneficial Interest” 38

(4) Conclusion on “Beneficial Interest” 44 C. Disguised Expropriation in Quebec Civil Law 46 D. Intention 51 E. Application 58

(1) Halifax’s Alleged Acquisition of a Beneficial Interest in the Annapolis Lands 64

(2) Halifax’s Alleged Removal of All Reasonable Uses of the Annapolis Lands 69 VI. Disposition 80 I. Overview [ 1 ] This appeal calls upon the Court to clarify the circumstances in which state regulation of land use may effect a de facto or (as we will refer to it) “constructive” taking of private property. [ 2 ] The appellant, Annapolis Group Inc., contends that the respondent, Halifax Regional Municipality, improperly used its regulatory powers to effectively seize Annapolis’ land for use as a public park without compensation. Halifax says that Annapolis’ claim is a veiled attempt to make taxpayers foot the bill for a decades-long development gamble. It sought

summary dismissal of this part of Annapolis’ claim, while permitting other claims (for misfeasance in public office and unjust enrichment) to proceed to trial. [ 3 ] Although unsuccessful at first instance, Halifax persuaded the Nova Scotia Court of Appeal that it should apply this Court’s judgment in Canadian Pacific Railway Co. v. Vancouver (City) , 2006 SCC 5 , [2006] 1 S.C.R. 227 (“ CPR ”), to strike that claim. Annapolis asks this Court to restore its claim in respect of the alleged constructive taking and allow it to proceed to trial. [ 4 ] We would allow Annapolis’ appeal. The Court of Appeal, in our respectful view, misapplied CPR and

summary judgment principles. Read in harmony with the jurisprudence upon which it was decided, CPR signifies that a constructive taking occurs where: (1) a beneficial interest — understood as an advantage — in respect of private property accrues to the state, which may arise where the use of such property is regulated in a manner that permits its enjoyment as a public resource; and (2) the impugned regulatory measure removes all reasonable uses of the private property at issue. Further, the Court of Appeal erred by holding that Halifax’s intention is irrelevant to applying the second part of that analysis.

This leaves genuine issues of material fact arising from Annapolis’ claim to be tried. Annapolis is entitled to adduce evidence at trial to show that, by holding Annapolis’ land out as a public park, Halifax has acquired a beneficial interest therein; and that, because Halifax is unlikely to ever lift zoning restrictions constraining the development of Annapolis’ land, Annapolis has lost all reasonable uses of its property. Further, and in support of the latter proposition, Annapolis may adduce evidence of Halifax’s intention in not doing so. II. Factual Background

[5] Over time from the 1950s, Annapolis acquired the subject property, comprising 965 acres of land (“AnnapolisLands” or “Lands”), with the intention of eventually securing enhanced development rights and reselling it. [6] In 2006, Halifax adopted the Regional Municipal Planning Strategy, a guide for land development in themunicipality, including the Annapolis Lands, over a 25-year period. While the Planning Strategy reserved a portion of the AnnapolisLands for possible future inclusion in a regional park, it also zoned the Lands as “Urban Settlement” and “Urban Reserve”.

UrbanSettlement denotes an area where urban forms of development may occur. Urban Reserve identifies land that could be developed beyondthe 25-year horizon. These designations thus contemplate — but do not permit — future residential serviced development. For serviceddevelopment to occur on the Annapolis Lands, Halifax must adopt a resolution authorizing a “secondary planning process” and anamendment to the applicable land use by-law. The applicable by-law is the Halifax Mainland Land Use By-Law, also adopted in 2006. [7] In 2014, Halifax adopted a revised version of the Planning Strategy.

The Urban Settlement and Urban Reservedesignations were maintained, and thus the zoning of the Annapolis Lands did not change, and has not changed since 2006. Nor were theconceptual boundaries for the potential park altered. [8] Beginning in 2007, Annapolis made several attempts to develop the Lands. Ultimately, by resolution datedSeptember 6, 2016, Halifax refused to initiate the secondary planning process, and Annapolis sued, alleging a constructive taking,misfeasance in public office, and unjust enrichment. [9] At issue in this appeal is Annapolis’ allegation of a constructive taking.

Specifically, Annapolis says that Halifax’sregulatory measures have deprived it of all reasonable or economic uses of its land, resulting in a constructive taking withoutcompensation, contrary to ss. 65 and 237 of the Halifax Regional Municipality Charter, S.N.S. 2008, c. 39, and ss. 6 and 24 of theExpropriation Act, R.S.N.S. 1989, c. 156. It alleges in particular that Halifax has acquired a beneficial interest in the Lands by exercisingdominion over them so as to effectively create a public park at Annapolis’ expense.

According to Annapolis, members of the public hike,cycle, canoe, camp, and swim on the Lands, are encouraged to do so by Halifax, and Halifax financially supports organizations that alsoencourage people to use the Lands as a park. Further, signs posted on the Lands allegedly depict the municipality’s logo and phonenumber, and a media

article quotes a municipal employee referred to as “the city staffer overseeing the park’s creation”. [10] On March 11, 2019, Halifax moved for partial

summary judgment of Annapolis’ claim, pursuant to r. 13 of the NovaScotia Civil Procedure Rules. In its motion, Halifax sought the dismissal of Annapolis’ constructive taking claim and urged the motionjudge to find that, as a matter of law, a constructive taking cannot result from Halifax refusing to amend the Planning Strategy andassociated land use by-laws. Annapolis resisted the motion, arguing that its claim raises genuine issues of material fact requiring a trial. III. Judicial History A. Supreme Court of Nova Scotia, 2019 NSSC 341, 17 L.C.R. (2d) 1 (Chipman J.) [11] The motion judge dismissed Halifax’s partial

summary judgment motion. He agreed with Annapolis that itsconstructive taking claim raised “vast” genuine issues of material fact requiring a trial, including: (

a) whether Halifax had erected signage on the Lands depicting Halifax’s logo on various trails; (

b) whether a Halifax employee had been “overseeing the park’s creation”; (

c) whether the Lands would be treated as development lands and not parklands; (

d) the existence of clauses in the Planning Strategy that mandate consideration of policy concepts without committingCouncil to adopt the policy, and clauses discussing an urban settlement designation boundary; (

e) discovery evidence to the effect that Halifax had decided that the Annapolis Lands would be treated as development lands,not parklands; and (

f) correspondence between counsel, including letters containing Halifax’s denial of Annapolis’ allegations. [12] The motion judge also identified a triable issue in affidavit evidence suggesting the possibility of an ulterior motive onHalifax’s part — specifically, to reserve part of the Annapolis Lands for a public park. In this regard, he relied on Lorraine (Ville) v.2646-8926 Québec inc., 2018 SCC 35, [2018] 2 S.C.R. 577, which involved a claim under Quebec’s Expropriation Act, CQLR, c.

E-24.In Lorraine, this Court affirmed that, where property is expropriated outside a legislative framework for an ulterior motive (such as toavoid paying an indemnity), a “disguised” expropriation occurs. In the motion judge’s view, disguised expropriation under the law ofQuebec may be equated to constructive expropriation as that concept was understood by this Court in The Queen in Right of the Provinceof British Columbia v.

Tener, (SCC), [1985] 1 S.C.R. 533. [13] In light of the foregoing, the motion judge concluded Annapolis’ constructive taking claim should proceed to trial.Expropriation cases, he said, are fact-specific and offer different scenarios in which a constructive taking claim may succeed, and thiscase is no different. He added that the facts material to the constructive taking claim were “sufficiently interwoven” with Annapolis’ twoother causes of action, such that “to deny Annapolis’ right to pursue this claim would not appreciably shorten pre-trial procedures or thetrial” (para. 44).

Thus he did not find the proportionality principle, as described in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87,to support granting

summary judgment. B. Nova Scotia Court of Appeal, 2021 NSCA 3, 455 D.L.R. (4th) 349 (Beveridge, Farrar and Derrick JJ.A.) [14] The Court of Appeal held that Annapolis’ constructive taking claim did not have a reasonable chance of successfullyestablishing, as CPR requires, an acquisition by Halifax of a beneficial interest in the Annapolis Lands or flowing from the Lands, andthe removal of all reasonable uses of the Lands. Citing Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98, 177

D.L.R. (4th) 696, it held that limiting the use of land or reducing its value through regulation is insufficient. For Halifax to acquire a“beneficial interest” in the Annapolis Lands, land “must actually be taken” from Annapolis and acquired by Halifax (para. 71). This didnot occur. Even had Halifax placed signage on the property to encourage its use by the public, this would, at most, have constituted atrespass by those using the lands. Annapolis has the same rights with respect to the Lands under the Planning Strategy that it has had foryears. Nothing has changed.

Nor, in the Court of Appeal’s view, would adopting a development plan constitute a taking. It simply allowsa municipality to set future development goals and to ensure land will be developed (or not) accordingly. [15] Finally, it said, Halifax’s intended use for the Lands is not relevant to the constructive taking analysis. Impropermotive is not proof of a constructive taking, and Lorraine does not dictate a contrary conclusion. IV. Issues [16] The foregoing account presents the issues to be decided: (

a) Did the Court of Appeal err in holding that an “acquisition of a beneficial interest” under the constructive taking testestablished by this Court in CPR requires land to “actually be taken” from an owner and acquired by the state? If not, should the CPRtest be revisited? (

b) Did the Court of Appeal err in holding that evidence of the state’s intended use of the impugned land is irrelevant to aclaim for constructive taking? V. Analysis A. Overview of the Law of Takings [17] It is useful to begin with a brief overview of the law of takings.

Given the facts of this appeal, our focus is onexpropriation through regulation — which, again, we refer to as a “constructive taking” in preference to other commonly applied termssuch as “de facto” or “regulatory taking”, as in our view it more accurately captures the nature of the state action at issue and the effecton the landowner (see e.g., M. Lavoie, “Canadian Common Law and Civil Law Approaches to Constructive Takings: A ComparativeEconomic Perspective” (2010), 42 Ottawa L. Rev. 229). [18] A “taking” is a “forcible acquisition by the Crown of privately owned property . . . for public purposes” (K.

Horsmanand G. Morley, eds., Government Liability: Law and Practice (loose-leaf), at § 5:1). It may take the form of a constructive taking(effective appropriation of private property by a public authority exercising its regulatory powers), or a de jure taking (formalexpropriation), by (in the case of land) taking title. [19] To be clear, not every instance of regulating the use of property amounts to a constructive taking. Governments andmunicipalities holding delegated provincial regulatory authority (Toronto (City) v.

Ontario (Attorney General), 2021 SCC 34, at para. 2)validly regulate land in the public interest without effecting “takings”, properly understood (see Compliance Coal Corporation v. BritishColumbia (Environmental Assessment Office), 2020 BCSC 621, 13 L.C.R. (2d) 215, at para. 91). The line between a valid regulation anda constructive taking is crossed where the effect of the regulatory activity deprives a claimant of the use and enjoyment of its property ina substantial and unreasonable way, or effectively confiscates the property (Horsman and Morley, at § 5:2).

Put simply, “in order for aCrown measure to effect a constructive taking of property, private rights in the property must be virtually abolished, leaving the plaintiffwith ‘no reasonable use’ of the property” (Horsman and Morley, at § 5:13 (emphasis added)). [20] A series of lower court judgments affirm that, in general, Canadian courts require a “total loss of the plaintiff’sinterest in property for the Crown’s action to constitute a taking” (Horsman and Morley, at § 5:13; see also Lynch v. St. John’s (City),2016 NLCA 35, 400 D.L.R. (4th) 62; Sun Construction Company Limited v.

Conception Bay South (Town), 2019 NLSC 102, 87M.P.L.R. (5th) 256). Courts have, therefore, dismissed claims for compensation where the regulation left the owner some reasonable usefor the property (Genevieve Holdings Ltd. v. Kamloops (City) (1988), 42 M.P.L.R. 171 (B.C. Co. Ct.); Steer Holdings Ltd. v. Manitoba, (MB KB), [1992] 2 W.W.R. 558 (Man. Q.B.), aff’d (1992), (MB CA), 99 D.L.R. (4th) 61 (Man.C.A.); Purchase v. Terrace (City) (1995), 26 M.P.L.R. (2d) 126 (B.C.S.C.); Harvard Investments Ltd. v. Winnipeg (City) (1995), (MB CA), 129 D.L.R. (4th) 557 (Man.

C.A.)). [21] At common law, taking of property by the state must be authorized by law, and triggers a presumptive right tocompensation which can be displaced only by clear statutory language showing a contrary intention — that is, an intention not tocompensate (see P. A. Warchuk, “Rethinking Compensation for Expropriation” (2015), 48 U.B.C. L. Rev. 655, at pp. 656 and 678-81).This was recognized in Attorney-General v.

De Keyser’s Royal Hotel, [1920] A.C. 508 (H.L.), wherein Lord Atkinson stated: “Therecognized rule for the construction of statutes is that, unless the words of the statute clearly so demand, a statute is not to be construedso as to take away the property of a subject without compensation” (p. 542). Explaining the rule’s rationale, His Lordship cited toLondon and North Western Railway Co. v.

Evans, [1893] 1 Ch. 16 (C.A.), at p. 28, per Bowen L.J., saying, at p. 542: The Legislature cannot fairly be supposed to intend, in the absence of clear words shewing such intention, that one man’s property shallbe confiscated for the benefit of others, or of the public, without any compensation being provided for him in respect of what is takencompulsorily from him. Parliament in its omnipotence can, of course, override or disregard this ordinary principle . . . if it sees fit to doso, but, it is not likely that it will be found disregarding it, without plain expressions of such a purpose.

Lord Parmoor agreed with Lord Atkinson that this rule was “well-established” and that “justice requires that statutes should not beconstrued to enable the land of a particular individual to be confiscated without payment”, absent clear words to the contrary(De Keyser’s Royal Hotel, at pp. 576 and 579). [22] It is important to stress that the rule contemplates that governments have the power to immunize themselves fromliability to pay compensation for a taking.

While, as we explain, we do not “expand” that liability but merely affirm it, the point is thatgovernments may effect takings without paying compensation, so long as the enabling statute clearly expresses that intention. Notably, in

CPR, the legislation at issue — the Vancouver Charter, S.B.C. 1953, c. 55 — immunized the City from compensating landowners forany loss as a result of the restrictions on land development and use (CPR, at paras. 12, 19 and 36-37). From the standpoint ofgovernment, the exigencies of the rule are modest and easily satisfied. [23] This Court first applied the rule in De Keyser’s Royal Hotel in Manitoba Fisheries Ltd. v. The Queen, (SCC), [1979] 1 S.C.R. 101. Ritchie J., for the Court, cited this passage from Lord Radcliffe’s speech in Belfast Corporation v.

O.D.Cars Ltd., [1960] A.C. 490 (H.L. (N.I.)), at p. 523, at p. 110, with approval: On the one hand, there would be the general principle, accepted by the legislature and scrupulously defended by the courts, that the titleto property or the enjoyment of its possession was not to be compulsorily acquired from a subject unless full compensation was affordedin its place. Acquisition of title or possession was “taking.” Aspects of this principle are found in the rules of statutory

interpretationdevised by the courts, which required the presence of the most explicit words before an acquisition could be held to be sanctioned by anAct of Parliament without full compensation being provided, or imported an intention to give compensation and machinery for assessingit into any Act of Parliament that did not positively exclude it. This vigilance to see that the subject’s rights to property were protected, sofar as was consistent with the requirements of expropriation of what was previously enjoyed in specie, was regarded as an importantguarantee of individual liberty.

It would be a mistake to look on it as representing any conflict between the legislature and the courts. Theprinciple was, generally speaking, common to both. [24] That the rule in De Keyser’s Royal Hotel is one of common law answers Halifax’s submission that interpreting theprotection narrowly against uncompensated takings avoids “creat[ing] a common law back door to constitutionalizing rights which wereexcluded deliberately from the Charter” (R.F., at paras. 108-09).

It is, of course, true that the framers of our Constitution did not includethe protection of property rights in the Canadian Charter of Rights and Freedoms (see Warchuk, at pp. 658-59). But the Charter is not,and never has been, the sole source of Canadians’ rights against the state; in particular, the common law also affords protections ofindividual liberty. Nor is the scope of common law rights dependent on whether such rights are also entrenched in the Charter.

Whilethis follows as a matter of logic, s. 26 of the Charter itself affirms that “[t]he guarantee in this Charter of certain rights and freedoms shallnot be construed as denying the existence of any other rights or freedoms that exist in Canada.” [25] This legal backdrop brings us to CPR, and its elaboration of the common law rule in the form of a two-part test forshowing a constructive taking: “. . . (1) an acquisition of a beneficial interest in the property or flowing from it, and (2) removal of allreasonable uses of the property . . .” (para. 30 (emphasis added), citing Mariner, at p. 716; Manitoba Fisheries; Tener).

The issuespresent in this appeal require us to consider the meaning of a “beneficial interest in the property or flowing from it” under the first part ofthat test. In bringing greater clarity to this aspect of the CPR test, we do not change the doctrine of constructive takings, but simply applyit to the facts of the present dispute. As we will explain, the Court in CPR did not use “beneficial interest” in the technical sense that itcarries in the domain of equity.

Rather, a “beneficial interest” is to be more broadly understood as an “advantage” — hence the Court’scoupling of “beneficial interest” with the phrase “or flowing from [the property]”. Clearly, if the interest acquired by the state can be onewhich flows from the property, what must be shown by the property owner can fall short of an actual acquisition by the state. [26] Further, we must also decide the relevance, if any, under the second part of the test of the public authority’s intendeduse of the land.

B. “Beneficial Interest” [27] The Court of Appeal, it will be recalled, held that the first part of the test stated in CPR — the “acquisition of abeneficial interest in the property or flowing from it” — requires Annapolis to show that Halifax actually acquired the Lands. Decidingwhether this is so requires that we give meaning to the expression “beneficial interest”, as it was used in CPR. In our view, that meaningis best appreciated by considering the authorities upon which CPR relied in stating that condition, and especially this Court’s decisions inManitoba Fisheries and Tener.

As we will explain, doing so reveals that actual acquisition is not necessary; rather, the obtaining byHalifax of an advantage in respect of the Lands suffices.

(1) Manitoba Fisheries [28] Manitoba Fisheries Ltd. was a private commercial fishery. In 1969, Parliament enacted the Freshwater FishMarketing Act, R.S.C. 1970, c. F-13, which granted a federal Crown corporation a commercial monopoly on the export of fish fromManitoba, and delegated power to the corporation to grant licenses to private enterprises like Manitoba Fisheries to continue operatingnotwithstanding the Act. Manitoba Fisheries did not receive such a license, and eventually the constraints of the Act put ManitobaFisheries out of business.

In such circumstances, the Act required the federal government to transfer funds to the Province of Manitoba,which would then compensate affected businesses, such as Manitoba Fisheries. Manitoba, however, refused to compensate ManitobaFisheries (pp. 103-5). [29] Significantly, the monopoly created by the Act conferred an economic advantage upon the state, but not an actualacquisition of property. It is true that, relying on Ulster Transport Authority v.

James Brown & Sons, Ltd., [1953] N.I. 79 (C.A.),Ritchie J. held that Manitoba Fisheries’ loss of goodwill deprived the company of property that was acquired by the corporation (p. 110).But this rested on his view that the government had acquired an advantage through the acquisition of a statutory monopoly that entitledit to benefits that would otherwise have flowed to the company. This

interpretation is made plain in Ritchie J.’s conclusion that“[goodwill] is the whole advantage, whatever it may be, of the reputation and connection of the firm”, and that the monopoly“completely extinguished” the appellant’s goodwill, leaving customers with no choice but to do business with the corporation (p. 107(emphasis added)).

In other words, the monopoly created by the Act restricted competition in the industry, thereby allowing the state toacquire all of the advantage that Manitoba Fisheries had previously enjoyed on the basis of its reputation and connections. [30] Just as significantly, the Court was also concerned about the effect of the taking on the property holder. Thateffect — the loss of the business — was regarded as a taking or acquiring of Manitoba Fisheries’ business by the state (p. 118).

Apersuasive consideration for Ritchie J. was that, “[u]ntil the creation of the Corporation by the Act, persons wishing to purchasefreshwater fish from Manitoba could purchase such fish from [Manitoba Fisheries] or other firms in the industry. After the creation of the

Corporation such purchases could be made only from the Corporation or its agents” (p. 109).

This led him to conclude: “Once it is accepted that the loss of the goodwill of the appellant’s business which was brought about by the Act and by the setting up of the Corporation was a loss of property and that the same goodwill was by statutory compulsion acquired by the federal authority, it seems to me to follow that the appellant was deprived of property which was acquired by the Crown” (p. 110). [ 31 ] That the Court in Manitoba Fisheries ascribed significance to the effects on the property holder is underscored by Ritchie J.’s reliance on Ulster Transport Authority .

The relevant passage cited Lord MacDermott’s observations in that case: We are not dealing here with a “mere” prohibition or with a prohibition which is essentially regulatory in character. We are dealing with what I have held to be, according to the intention of the Legislature, a device for diverting a definite part of the business of furniture removers and storers from the respondents and others to the appellants. If that is right, the result must be the same whether section 5(1) of the Act of 1920 sounds in pith and substance or in effect or partly in one and partly in the other.

Wherever else a prohibition directed to other ends might lead, the relevant prohibition cannot but constitute a taking if my views as to its effect and underlying intention are correct. [Emphasis added.] ( Ulster Transport Authority , at p. 116, as cited in Manitoba Fisheries , at p. 111.) Adopting the reasoning in Ulster Transport Authority , Ritchie J. concluded that the impugned regulation “ had the effect of depriving the appellant of its goodwill as a going concern and consequently rendering its physical assets virtually useless and that the goodwill so taken away constitutes property of the appellant for the loss of which no compensation whatever has been paid” (p. 118 (emphasis added)).

(2) Tener [ 32 ] The Court in Tener , as in Manitoba Fisheries , also focussed on the effect of a regulatory measure and the advantage acquired therefrom by the government. The Teners were the registered holders of mineral claims on lands later included in a provincial park. The Province of British Columbia imposed increasingly onerous conditions governing the exploitation of natural resources in the park, until the Teners were informed that no new exploration or development would be permitted, thus denying them the possibility of exploiting their mineral claims (pp. 536-38 and 552).

The central issue on appeal to this Court was whether the Teners were entitled to compensation under the relevant legislation. [ 33 ] In finding for the Teners, Estey J., for the majority, revealed his concern that the regulation had the effect of (or, as he put it, “amount[ed] to”) securing an advantage by confining all reasonable uses of the property to the Province’s preferred use as a provincial park.

As Estey J. explained, while there had been “no regulation qua minerals which reduced the value of these minerals or the opportunity of the respondents to remove them”, 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” (p. 563 (emphasis added)). [ 34 ] Thus Estey J.’s analysis in Tener adhered closely to that in Manitoba Fisheries . The Teners retained their mineral rights.

In securing the advantage of preserving “qualities perceived as being desirable for public parks” (p. 564) by regulating away the Teners’ ability to exercise those rights, the Province had effectively “recover[ed] [. . .] the right granted to the [Teners]” (p. 563). [ 35 ] Wilson J., concurring in the result, focussed on the nature of the Teners’ interest. She described that interest as “in the nature of a profit à prendre comprising both the mineral claims and the surface rights necessary for their enjoyment” (p. 540).

But the Province could not take the actual profit à prendre , being a registrable interest under British Columbia’s land registry system, without actually taking actual title. Hence Wilson J.’s emphasis that the holder of a profit à prendre “owns . . . mineral claims and the right to exploit them through the process of severance” (p. 541 (emphasis added; emphasis in original deleted)). So understood, the interest held by the Teners had not been actually acquired, since the Province did not itself obtain a right of exploitation.

What the Province did acquire by preventing the Teners from exploiting their mineral rights was an advantage — specifically, preserving the land as a provincial park in the public interest. [ 36 ] That the Province need not to have been shown to have actually acquired a proprietary interest for the Teners to establish a constructive taking, and that the focus is instead on the effect on the landowner of the advantage gained by the land use regulation, is highlighted by Wilson J.’s reasons: In my view, this is a case of expropriation under s. 11(

c) of the Park Act to which the Highways Act applies. I reach this conclusion on the basis that the absolute denial of the right to go on the land and sever the minerals so as to make them their own deprives the respondents of their profit à prendre. Their interest is nothing without the right to exploit it. The minerals in situ do not belong to them. Severance and the right of severance is of the essence of their interest. . . .

While the grant or refusal of a licence or permit may constitute mere regulation in some instances, it cannot be viewed as mere regulation when it has the effect of defeating the respondents’ entire interest in the land .

Without access the respondents cannot enjoy the mineral claims granted to them in the only way they can be enjoyed, namely by the exploitation of the minerals. [Emphasis added; p. 550.] [ 37 ] We note that Wilson J. expressly rejected the Crown’s submission that “it is not enough to show that what the Crown did prevented the respondents from realizing on their interest or rendered it worthless” (p. 551). Instead, the Teners had to show “that the Crown has appropriated their interest to itself, that the interest which previously belonged to the respondents now belongs to the Crown” (p. 551) .

(3) Defining the Nature of a “Beneficial Interest” [ 38 ] In our view, the foregoing jurisprudence — upon which the CPR test was expressly stated as resting — supports an understanding of “beneficial interest” as concerned with the effect of a regulatory measure on the landowner, and not with whether a proprietary interest was actually acquired by the government.

Conversely, that same jurisprudence supports the view that “beneficial interest”, as that term appears in the first part of the test stated in CPR , refers not to actual acquisition of the equity that rests with the beneficial owner of property connoting rights of use and enjoyment, but to an “advantage” flowing to the state. We say this for two reasons. [ 39 ] First, to require actual acquisition would collapse the distinction between constructive ( de facto ) and de jure takings — a distinction which CPR explicitly preserves (paras. 30-37).

Simply put, if a constructive taking requires an actual taking, then it is no longer constructive. It follows that the Court of Appeal’s requirement of an actual acquisition of the Annapolis Lands cannot be necessary to satisfy the CPR test for a constructive taking. [ 40 ] Secondly, interpreting “beneficial interest” broadly (as meaning a benefit or advantage accruing to the state) ensures CPR ’s coherence to Manitoba Fisheries and Tener , neither of which understood “benefits” in the strict equitable sense of that term.

Again, the references to those authorities in CPR demonstrate that CPR merely sought to affirm, and not to alter, our law of constructive takings. This

interpretation is supported by the explicit wording under the first part of the CPR test: “. . . a beneficial interest in the property or flowing from it . . .” (para. 30 (emphasis added)). An interest flowing from the property affirms that a “beneficial interest” can be more broadly understood as an advantage, and need not be an actual acquisition. [ 41 ] To be clear, we are not “depart[ing] from precedent” (para. 111), as our colleagues contend. We aim to illuminate CPR , not overrule it. Our colleagues say that courts “have applied the CPR test without difficulty” (para. 112).

With respect, this misses the point. The key question is whether the lower courts have applied the CPR test correctly . In our respectful view, many of them have not. Indeed, the Court of Appeal itself misapprehended the law in this case, by asserting that CPR requires an actual expropriation to establish a constructive taking. As we have explained, and as the authorities confirm, CPR — properly understood — trains the court’s eye on whether a public authority has derived an advantage, in effect , from private property, not on whether it has formally acquired a proprietary interest in the land.

To hold otherwise would be to erase the long-standing distinction between de jure and de facto expropriation from Canadian law. [ 42 ] As a final observation, we acknowledge that, in addition to Manitoba Fisheries and Tener , the Court in CPR also cited to Mariner . But this does not affect our analysis. Mariner concerned the Province of Nova Scotia’s designation of privately owned land as a beach under a provincial statute that subjected it to stringent conservation regulations.

When the Minister refused the respondents’ applications to build homes on the land, they sought a declaration that the Crown had expropriated their lands, entitling them to compensation.

Cromwell J.A. (as he then was), writing for the Nova Scotia Court of Appeal, held that the respondents’ loss of economic value did not amount to an advantage acquired by the provincial authority (see generally Mariner , at pp. 713-16). [ 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 ( Mariner , at p. 722, referring to Tener ).

(4) Conclusion on “Beneficial Interest” [ 44 ] In sum, we affirm that the test to show a constructive taking is that stated by CPR , properly understood. The reviewing court must decide: (1) whether the public authority has acquired a beneficial interest in the property or flowing from it (i.e. an advantage); and (2) whether the state action has removed all reasonable uses of the property. This gives effect to this Court’s acknowledgement of a common law right to compensation where the two-part CPR test is satisfied.

It accords with imperatives of justice and fairness, which underpin the court’s assessment of expropriation claims, and remedies situations where cases do not neatly fit within the expropriation legislative framework and would otherwise “fall between the cracks” (Warchuk, at pp. 686 and 690). [ 45 ] To this, we would add that, because the test focusses on effects and advantages , substance and not form is to prevail. A court deciding whether a regulatory measure effects a constructive taking must undertake a realistic appraisal of matters in the context of the specific case, including but not limited to: (

a) The nature of the government action (i.e., whether it targets a specific owner or more generally advances an important public policy objective), notice to the owner of the restrictions at the time the property was acquired, and whether the government measures restrict the uses of the property in a manner consistent with the owner’s reasonable expectations; (

b) The nature of the land and its historical or current uses. Where, for example, the land is undeveloped, the prohibition of all potential reasonable uses may amount to a constructive taking. That said, a mere reduction in land value due to land use regulation, on its own, would not suffice; and (

c) The substance of the alleged advantage. The case law reveals that an advantage may take various forms. For example, permanent or indefinite denial of access to the property or the government’s permanent or indefinite occupation of the property would constitute a taking ( Sun Construction , at para. 15). Likewise, regulations that leave a rights holder with only notional use of the land, deprived of all economic value, would satisfy the test.

It could also include confining the uses of private land to public purposes, such as conservation, recreation, or institutional uses such as parks, schools, or municipal buildings. C. Disguised Expropriation in Quebec Civil Law [ 46 ] The parties and several interveners invoked civil law authorities in this appeal. The conceptual similarities between

the common law doctrine of constructive takings and the civil law doctrine of disguised expropriation have been highlighted by someauthors (Lavoie, at pp. 241-45; M.-A. LeChasseur, “L’expropriation de facto au Canada et la transcendance des solidarités”, in Servicede la qualité de la profession du Barreau du Québec, vol. 509, Développements récents en droit municipal (2022), 71; Y. Emerich, Droitcommun des biens: perspective transsystémique (2017), at pp. 225-27 and 235-37).

We refer to civil law principles “for the purpose ofexplanation and illustration”, bearing in mind that Quebec precedents serve as persuasive, rather than binding, authority (Farber v. RoyalTrust Co., (SCC), [1997] 1 S.C.R. 846, at para. 32; see also C.M. Callow Inc. v.

Zollinger, 2020 SCC 45, at para. 58).To be clear, our analysis does not disregard the distinct features of the respective doctrines from either legal tradition (Callow, atpara. 158, per Brown J., concurring). [47] The doctrine of disguised expropriation in Quebec civil law is founded upon art. 952 of the Civil Code of Québec(“C.C.Q.”): “No owner may be compelled to transfer his ownership except by expropriation according to law for public utility and inreturn for a just and prior indemnity.”

Article 952 establishes a presumption against uncompensated expropriation by the state, as doesthe common law through the rule in De Keyser’s Royal Hotel, as we have explained (P.-A. Côté, in collaboration with S. Beaulac andM. Devinat, The

Interpretation of Legislation in Canada (4th ed. 2011), at pp. 511-13). In the context of municipal regulations, an ownersubject to disguised expropriation may challenge the validity or operability of the bylaw under administrative law principles or,alternatively, claim an indemnity for disguised expropriation under art. 952 (Lorraine, at para. 2; S. Pelletier and F.

Côté,“Développements récents en matière d’expropriation déguisée: distinction entre les recours en nullité, en dommages pour responsabilitéextracontractuelle d’un organisme public et en expropriation déguisée”, in Service de la qualité de la profession du Barreau du Québec,vol. 468, Développements récents en droit de l’environnement (2019), 303). [48] Quebec courts have recognized that art. 952 C.C.Q. establishes a no-fault liability scheme for disguised expropriation,in contrast to administrative law challenges to the validity of a bylaw based on the municipality’s improper motive (see Ville de Léry v.Procureure générale du Québec, 2019 QCCA 1375, at para. 17; Montréal (Ville) v.

Benjamin, (Que. C.A.), atpara. 57; Ville de La Prairie v. 9255-2504 Québec inc., 2020 QCCS 307, 2020 CarswellQue 2737 (WL), at para. 29; Spénard v.Salaberry-de-Valleyfield (Cité de), [1983] C.S. 725). It is now well established in the jurisprudence on disguised expropriation that thecriterion applicable to such claims is whether the state action [translation] “remov[es] all reasonable uses of the immovable” (Dupras v.Ville de Mascouche, 2022 QCCA 350, at para. 27 ; see also Wallot v. Québec (Ville), 2011 QCCA 1165, 24 Admin. L.R. (5th)306, at para. 42; Municipalité de Saint-Colomban v.

Boutique de golf Gilles Gareau inc., 2019 QCCA 1402, at para. 64; MeadowbrookGroupe Pacific inc. v. Ville de Montréal, 2019 QCCA 2037, 2019 CarswellQue 12262 (WL), at para. 29; Ville de Québec v. Rivard,2020 QCCA 146, at para. 64; Ville de Saint-Rémi v. 9120-4883 Québec inc., 2021 QCCA 630, at para. 25 ). For this reason,disguised expropriation under art. 952 C.C.Q. requires no element analogous to the “acquisition” branch of the CPR test.

A bylaw thatremoves all reasonable uses of the property suffices, on its own, to effect a disguised expropriation in Quebec civil law. [49] There are, however, exceptions that permit us to compare disguised expropriation to constructive takings at commonlaw. The Quebec Court of Appeal’s decision in Benjamin provides one such example. In that case, the owner’s claim based on thedecades-old bylaw was prescribed.

But the Court of Appeal held that [translation] “in the very particular circumstances of this case”(para. 62), the combination of zoning restrictions and the City’s use of the land as an extension of its park justified awarding anindemnity for disguised expropriation (paras. 65 and 82). [50] The criteria applied by the Quebec Court of Appeal in Benjamin “pla[y] a functionally similar role” (Bhasin v.Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, at para. 44) to the “deprivation” and “acquisition” requirements of the CPR test.Accordingly, and as we discuss below, we regard Benjamin and analogous Quebec cases as having persuasive authority in assessingconstructive taking claims.

These rulings, we emphasize, are useful for illustrative purposes only in applying the CPR test. In this case,we need not draw on Quebec authorities to fill a doctrinal gap in the common law or to modify or otherwise develop existing legal rules(Callow, at para. 123, per Brown J., concurring, and para. 191, per Côté J., dissenting). D. Intention [51] The courts below disagreed on whether the intention of a public authority is relevant to the analysis of constructivetaking claims.

The motion judge, at para. 35, cited this Court’s definition of disguised expropriation articulated in Lorraine, at para. 2,which included “an ulterior motive”, and concluded that this was equally applicable to finding a constructive taking at common law(para. 36). The Court of Appeal, however, held that “[m]otive is not a material fact in the context of a [constructive] expropriation claim”(para. 82). [52] Respectfully said, neither position is correct. The public authority’s intention is not an element of the test forconstructive takings at common law.

Again, the mischief addressed by the doctrine is one of advantage and effects, not that a publicauthority acted in bad faith or with an otherwise ulterior motive. Indeed, this Court held in CPR that, even if the City’s purpose were to“enable the inhabitants to use the corridor for walking and cycling,” its bylaw, in effect, neither encouraged trespassing nor prevented thehistorical and current use of the land (para. 33) and therefore could not be said to have deprived the landowner of all reasonable uses. [53] This does not mean, however, that intention is irrelevant to the inquiry.

Indeed, the case law we discuss belowsuggests that the objectives pursued by the state may be some evidence of constructive taking. Stated differently, the intention to takeconstructively, if proven by the claimant, may support a finding that the landowner has lost all reasonable uses of their land (inasmuch asa finding of this effect can be supported by evidence that such an effect was intended). But the absence of evidence of the state’sintention does not preclude a property holder’s claim. It follows that intent may constitute a “material fact” in the context of aconstructive taking claim.

We stress, however, that the focus of the inquiry must remain on the effects of state action. [54] A brief review of the jurisprudence illustrates the supporting role of intention in assessing constructive taking claims.In Manitoba Fisheries, at p. 111, as we have already recalled, Ritchie J. endorsed a passage from Ulster Transport Authority highlightingthe relevance of intention in constructive taking cases. The key portion of this passage merits repeating: “. . . the relevant prohibitioncannot but constitute a taking if my views as to its effect and underlying intention are correct” (emphasis added).

Thus the objectivepursued by the state was considered (Ulster Transport Authority, at pp. 113 and 116; Manitoba Fisheries, at pp. 111-13) indistinguishing between a mere regulatory prohibition and the constructive taking of a business through the establishment of a public

monopoly. [ 55 ] Likewise, in Lynch — which Halifax acknowledges was correctly decided — the Court of Appeal of Newfoundland and Labrador treated the City’s intention in refusing to allow any development on the subject watershed land as germane to whether a constructive taking had occurred. In concluding it had, the 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. [ 56 ] The Quebec Court of Appeal’s decision in Benjamin further illustrates how intent may support a finding of a constructive taking. There, a zoning bylaw designated the claimant’s property as a “park”, and the City [ translation ] “knowingly” used the land in issue as an extension of its own park for 14 years (para. 50).

The City — inadvertently at first — installed a fence and lampposts and created a trail on the claimant’s land, which was effectively incorporated into an adjacent public park. The City then manifested its intention to achieve that very effect by refusing to remove the fence after receiving a demand letter from the claimant. On appeal, the City offered to remove the fence and lampposts, but only if the claimant accepted to adequately maintain his own land for public safety.

The Court of Appeal characterized the City’s behaviour as an [ translation ] “abuse of right” and underscored its lack of “goodwill” to either formally expropriate the claimant’s land or permit reasonable uses thereof (paras. 49, 54 and 59). The plans transparently set out by the City thus indicated that the claimant would continue to be deprived of all reasonable uses of his land indefinitely.

In these circumstances, the City’s intent buttressed the finding of disguised expropriation arising from the bylaw and the persistent use of the claimant’s land. [ 57 ] In short, the underlying objective pursued by a public authority may provide supporting evidence for a constructive taking claim. But it is neither necessary nor sufficient. The case law indicates that the assessment of intent has proved helpful in distinguishing between mere regulations in the public interest and takings requiring compensation at common law.

What ultimately matters, however, irrespective of matters of intent, is whether the state-imposed restrictions on the property conferred an advantage on the state that effectively amounts to a taking ( Tener , at pp. 563-65, per Estey J., and pp. 551-52, per Wilson J.; Manitoba Fisheries , at p. 118). E. Application [ 58 ] The foregoing explains why, in our respectful view, the Court of Appeal erred by granting Halifax’s application for

summary judgment dismissing Annapolis’ constructive taking claim. While the Court of Appeal saw “nothing on the facts . . . that could be remotely considered to be a taking of the Annapolis Lands and a corresponding deprivation of all reasonable uses of the lands” (para. 85), as we have explained, it is well-established in our law that zoning which effectively preserves private land as a public resource may constitute a “beneficial interest” flowing to the state, as contemplated in CPR , where it has the effect of removing all reasonable uses of that land.

Further, we have already explained why the motion judge did not err by considering Halifax’s alleged intent with respect to the Annapolis Lands in his application of the CPR test. [ 59 ] More specifically, we agree with the motion judge’s identification of the material facts to be determined (at paras. 25-26 and 36), arising from: • September, 2019 correspondence between counsel demonstrating [Halifax]’s denial of the allegations in the amended Statement of Claim at paras. 20, 21, 61, 71 and 79. (exhibits EE and FF) • Signage erected on Annapolis’ property depicting [Halifax]’s logo on various trails. (exhibits AA, BB and 1) • December 18-23, 2008 The Coast

article quoting [Halifax] employee Peter Bigelow “. . . the city staffer overseeing the park’s creation”. (exhibit U, p. 743 especially) • Ms.

Denty’s discovery evidence to the effect that when the 2006 [Planning Strategy] was finalized, the decision was made that Annapolis’ property would be treated as development lands, not parklands. (exhibit A, pp. 54, 55) • [The Planning Strategy], clause 1.7.1 denoting what [Halifax] Council “shall consider”. “This ter[m] denotes the mandatory consideration of policy concepts but does not commit [Halifax] Council to the eventual adoption of policy in secondary planning strategies”. (exhibit D, p. 175) • [The Planning Strategy], clause 3.1 and the discussion of “S-2” and S-3” the “Urban Settlement Designation Boundary”. (exhibit D, pp. 195, 196) . . . • Ms.

Denty’s discovery evidence as per the transcript and the clarifications in [Halifax] counsel’s October 16, 2019 correspondence (exhibit C at p. 905 and exhibit A at pp. 859-860). . . .

. . . Mr. Hattie’s affidavit[, elements of which] “point to the possibility of an ulterior motive” on the part of [Halifax]. [ 60 ] The importance of making findings on these points flows from the motion judge’s correct legal conclusions that (1) a constructive taking need only have the effect of defeating the landowner’s reasonable use of land; and (2) the state’s intent may be relevant in assessing whether all reasonable uses of land has been removed. [ 61 ] The Court of Appeal did not identify any legal error or “patent injustice” that would justify interfering with the motion judge’s decision to dismiss Halifax’s

summary judgment motion on the basis of the foregoing triable issues ( Coady v. Burton Canada Co. , 2013 NSCA 95 , 365 D.L.R. (4th) 172, at para. 19 ). At most, it can be said that the Court of Appeal merely disagreed with the motion judge’s exercise of discretion. This does not provide a sufficient basis for appellate intervention. [ 62 ] Further, the Court of Appeal erred in its r. 13.04 analysis. In Shannex Inc. v. Dora Construction Ltd. , 2016 NSCA 89 , 58 C.L.R. (4th) 1, at para. 34 , the Nova Scotia Court of Appeal set out a five-part sequential test on a r. 13.04 motion for

summary judgment. The first part of the test asks whether the challenged pleading discloses a “genuine issue of material fact”, either pure or mixed with a question of law. If yes, it should not be determined by

summary judgment. [ 63 ] There was no need for the Court of Appeal to proceed beyond the first Shannex step. The motion judge correctly decided that Annapolis’ pleadings contain disputed material facts, mixed with questions of law, and the evidence before the motion judge failed to negate the existence of genuine issues of material fact for trial. We therefore see no basis on which to disturb the motion judge’s conclusion that Annapolis’ pleadings in support of its constructive taking claim disclose “vast issues of material fact to be determined” at trial (para. 25). Indeed, two disputed factual issues are particularly material to the CPR test.

(1) Halifax’s Alleged Acquisition of a Beneficial Interest in the Annapolis Lands [ 64 ] First, it is disputed whether Halifax is promoting the Annapolis Lands as a public park, for instance by encouraging public use and holding them out as a park, as Annapolis alleges. This disputed fact is material because, if proven, it would tend to support Annapolis’ claim that Halifax acquired a “beneficial interest” in the Lands, as we have explained it.

Preserving a park in its natural state may constitute an advantage accruing to the state, thus satisfying the “acquisition” element of CPR . [ 65 ] To be clear, we reject the Court of Appeal’s formalistic position that a public authority’s alleged encouragement and financial support of trespass can never amount to an acquisition of a beneficial interest. Several cases support the proposition that whether a public authority treats private lands as an extension of a public park is a key fac

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