Annapolis Group Inc. v. Halifax Regional Municipality, 2019 NSSC 341

SUPREME COURT OF Nova Scotia Citation: Annapolis Group Inc. v. Halifax Regional Municipality , 2019 NSSC 341 Date: 20191120 Docket: Hfx No. 460474 Registry: Halifax Between: Annapolis Group Inc. Plaintiff v. Halifax Regional Municipality Defendant D E C I S I O N Motion for Partial

Summary Judgment Judge: The Honourable Justice James L. Chipman Heard: November 15, 2019, in Halifax, Nova Scotia Written Decision: November 20, 2019 Counsel: Martin C. Ward, Q.C., for the Applicant/Defendant Peter H. Griffin, Amy Sherrard and Rebecca Jones, for the Respondent/Plaintiff By the Court: Introduction [ 1 ] This is a motion for partial

summary judgment brought by the Defendant, Halifax Regional Municipality (HRM). HRM initially filed a notice of motion on March 11, 2019 and this was amended (to reflect the November 15, 2019 hearing date) and filed November 5, 2019. On September 18, 2019 HRM filed a brief, book of authorities and affidavit of HRM clerk, Kevin Arjoon. On November 4, 2019 HRM filed a reply brief with further authorities. [ 2 ] The Plaintiff, Annapolis Group Inc. (Annapolis), opposes the motion.

On October 18, 2019, Annapolis filed their brief, book of authorities and affidavits of Annapolis President, Archie Hattie, and their outside counsel’s law clerk, Grace Tsakas. Ms. Tsakas’ original signed affidavit was filed on October 21, 2019. [ 3 ] On November 15, 2019 the Court heard oral argument. None of the affiants were cross-examined. During Annapolis’ submissions, exhibit 1 was entered by consent; a color photograph of a trail map board referable to the lands in issue showing the HRM logo. Background [ 4 ] The file discloses that I became case management judge on March 26, 2019.

In the months since, I have released two written decisions ( Annapolis Group Inc. v. HRM , 2019 NSSC 139 and 2019 NSSC 264 ) referable to interim motions. Following the conclusion of the last motion on July 29, 2019, I convened a brief case management conference to discuss the status of matters and next steps. During the conference this hearing date was confirmed along with the filing dates.

[ 5 ] In the lawsuit, Annapolis seeks damages against HRM for alleged de facto expropriation, abuse of public office and unjust enrichment. HRM brings the within motion seeking partial

summary judgment dismissing the claim of de facto expropriation and confirming as a matter of law that de facto expropriation cannot result from HRM refusing to amend the Regional Municipal Planning Strategy (RMPS) and associated land use by-laws. Annapolis resists the motion, in the main on the basis that the de facto expropriation claim raises genuine issues of material fact requiring a trial. [ 6 ] At paras. 1 and 2 of the statement of claim (amended March 22, 2017), Annapolis pleads: 1. By statute, the Halifax Regional Municipality (“HRM”) cannot take private property without paying just compensation.

And yet it has de facto but effectively, and intentionally, expropriated lands belong to Annapolis Group Inc. (“Annapolis”) for use as a public park. In doing so, HRM has breached sections 65 and 237 of the Halifax Regional Municipality Charter (the “ Charter ”) and sections 6 and 24 of the Expropriation Act (the “ Expropriation Act ”), and committed the torts of de facto expropriation (taking) without compensation and abuse of public office. HRM is liable for damages as a result. As well, HRM has unjustly enriched itself at Annapolis’ expense and is liable for restitution. 2.

While the Charter gives HRM the authority to acquire private lands for public use, it also provides that HRM “shall, within one year of the effective date of the zoning, acquire the land” (section 237(2)). HRM has expressly refused to engage in the statutory zoning to avoid its obligation to compensate Annapolis fairly for the taking of its property. Instead, HRM has prevented Annapolis from making any use of its lands, and has thus effectively acquired those lands for use as a de facto park for nothing. [ 7 ] At para. 126(

a) of the amended statement of claim, Annapolis requests relief for “constructive or de facto expropriation”. [ 8 ] HRM filed its amended defence on April 5, 2017. At para. 63, HRM denies the expropriation allegation as follows: 63. The Municipality denies that as a result of Regional Council’s decision the Plaintiff’s lands have been taken as a park without compensation. Annapolis retains the same development rights in respect of the development of its lands which it had since before the adoption of the 2006 Regional Plan.

It has the right to request that Council consider a plan amendment to initiate secondary planning in accordance with the criteria in Policy S-2 and Policy S-3 of the 2014 Regional Plan. Evidence [ 9 ] Mr. Arjoon’s affidavit is brief; the purpose is to introduce into evidence planning resolutions, as follows (paras. 7 – 13 of Mr. Arjoon’s affidavit): 7. On June 27, 2006, Halifax Regional Council passed a resolution adopting the Regional Municipal Planning Strategy (the “2006 RMPS”) and amending the Regional Subdivision By-Law and the Land Use By-Laws of HRM.

Attached hereto and marked as Exhibit “A” is a certified copy of the resolution. 8. Attached hereto and marked as Exhibit “B” is a certified copy of the 2006 RMPS. 9. On November 16, 2010, Halifax Regional Council passed a resolution deferring consideration of whether to initiate a Secondary Planning Process for the Highway 102 West Corridor Lands. Attached here and marked as Exhibit “C” is a certified copy of the resolution. 10. On June 25, 204, Halifax Regional Council passed a resolution repealing the 2006 RMPS and adopting the Regional Municipal Planning Strategy (2014) (the “2014 RMPS”).

Attached hereto and marked as Exhibit “D” is a certified copy of the resolution. 11. Attached hereto and marked as Exhibit “E” is a certified copy of the 2014 RMPS. 12. On September 6, 2016, Halifax Regional Council passed a resolution refusing to initiate secondary planning for the Highway 102 West Corridor lands at that time. Attached hereto and marked as Exhibit “F” is a certified copy of the resolution. 13. Attached hereto and marked as Exhibit “G” is a certified copy of the Halifax Mainland Land Use By-Law . [ 10 ] Ms.

Tsakas’ affidavit provides post-discoveries correspondence between counsel for the parties along with discovery transcript excerpts from Kelly Denty, HRM’s designated manager for discovery (Rule 14.14). [ 11 ] Mr. Hattie’s affidavit is extensive. It is divided into sixteen sections comprising 154 paras. Attached to Mr. Hattie’s affidavit are 32 exhibits providing background to the matters in issue.

Summary Judgment -- Governing Law [ 12 ] Justice Jamieson recently had cause to review the

summary judgment rule in Trout Point Lodge v. Automattic Inc. , 2019 NSSC 317 , and her comments at para. 21 provide helpful background: 21 Civil Procedure Rule 13 governs motions for

summary judgment. A motion for

summary judgment can result in the dismissal of a claim or of a defence in its entirety or of a portion or portions of a claim or defence. It is a mechanism available to litigants who are able to meet the Rule 13.04 test ( Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89 ) which poses five sequential questions and thereby, avoid the necessity of a trial of a claim or of a defence that has no prospect of success. Where

summary judgment is appropriate, the considerable costs of a trial of the claim or defence are saved, as are court resources. While dealing with a very different Ontario Rule of Civil Procedure, the Supreme Court of Canada said that

summary judgment rules should be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. Justice Karakatsanis, for the unanimous Court, said in Hryniak v. Mauldin , 2014 SCC 7 : 1 Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive

and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot affordto go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication ofcivil cases, the development of the common law is stunted. 2 Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordableaccess to the civil justice system.

This shift entails simplifying pre-trial procedures and moving the emphasis away from theconventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure andaccess struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair andjust. 3

Summary judgment motions provide one such opportunity... ... 5 To that end, I conclude that

summary judgment rules must be interpreted broadly, favouring proportionality and fair access to theaffordable, timely and just adjudication of claims. [Emphasis added] [13] In Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89, Justice Fichaud’s five sequential questions read as follows: [34] I interpret the amended Rule 13.04 to pose five sequential questions: • First Question: Does the challenged pleading disclose a “genuine issue of material fact”, either pure or mixed with a questionof law? [Rules 13.04(1), (2) and (4)] If Yes, it should not be determined by

summary judgment. It should either be considered for conversion to an application under Rules13.08(1)(

b) and 6 as discussed below [paras. 37-42], or go to trial. The analysis of this question follows Burton’s first step. A “material fact” is one that would affect the result. A dispute about an incidental fact - i.e. one that would not affect the outcome - willnot derail a

summary judgment motion: 2420188 Nova Scotia Ltd. v. Hiltz, 2011 NSCA 74, para. 27, adopted by Burton, para. 41, andsee also para. 87 (#8). The moving party has the onus to show by evidence there is no genuine issue of material fact. But the judge’s assessment is based on allthe evidence from any source. If the pleadings dispute the material facts, and the evidence on the motion fails to negate the existence of agenuine issue of material fact, then the onus bites and the judge answers the first question Yes.[Rules 13.04(4) and (5)] Burton, paras. 85-86, said that, if the responding party reasonably requires time to marshal his evidence, the judge should adjourn themotion for

summary judgment.

Summary judgment isn’t an ambush. Neither is the adjournment permission to procrastinate. Theamended Rule 13.04(6)(

b) allows the judge to balance these factors. • Second Question: If the answer to #1 is No, then: Does the challenged pleading require the determination of a question of law,either pure, or mixed with a question of fact? If the answers to #1 and #2 are both No,

summary judgment “must” issue: Rules 13.04(1) and (2). This would be a nuisance claim withno genuine issue of any kind – whether material fact, law, or mixed fact and law. • Third Question: If the answers to #1 and #2 are No and Yes respectively, leaving only an issue of law, then the judge “may” grant ordeny

summary judgment: Rule 13.04(3). Governing that discretion is the principle in Burton’s second test: “Does the challengedpleading have a real chance of success?” Nothing in the amended Rule 13.04 changes Burton’s test. It is difficult to envisage any other principled standard for a

summaryjudgment. To dismiss summarily, without a full merits analysis, a claim or defence that has a real chance of success at a later trial orapplication hearing, would be a patently unjust exercise of discretion. It is for the responding party to show a real chance of success. If the answer is No, then

summary judgment issues to dismiss the ill-fatedpleading. • Fourth Question: If the answer to #3 is Yes, leaving only an issue of law with a real chance of success, then, under Rule 13.04(6)(a):Should the judge exercise the “discretion” to finally determine the issue of law? If the judge does not exercise this discretion, then: (1) the judge dismisses the motion for

summary judgment, and (2) the matter with a“real chance of success” goes onward either to a converted application under Rules 13.08(1)(

b) and 6, as discussed below [paras. 37-42],or to trial. If the judge exercises the discretion, he or she determines the full merits of the legal issue once and for all. Then the judge’sconclusion generates issue estoppel, subject to any appeal. This is not the case to catalogue the principles that will govern the judge’s discretion under Rule 13.04(6)(a). Those principles willdevelop over time. Proportionality criteria, such as those discussed in Hryniak v. Mauldin, 2014 SCC 7 , [2014] 1 S.C.R. 87, willplay a role. A party who wishes the judge to exercise discretion under Rule 13.04(6)(

a) should state that request, with notice to the other party. Thejudge who, on his or her own motion, intends to exercise the discretion under Rule 13.04(6)(

a) should notify the parties that the point isunder consideration. Then, after the hearing, the judge’s decision should state whether and why the discretion was exercised. The reasons

for this process are obvious: (1) fairness requires that both parties know the ground rules and whether the ruling will generate issue estoppel; (2) the judge’s standard differs between

summary mode (“real chance of success”) and full-merits mode; (3) the judge’s choice may affect the standard of review on appeal. [ 14 ] The Nova Scotia Court of Appeal has recently affirmed these principles and steps on motions for

summary judgment under CPR 13.04 in SystemCare Cleaning and Restoration Limited v. Kaehler, 2019 NSCA 29 (reversing Kaehler v. SystemCare Cleaning & Restoration Ltd. , 2018 NSSC 219 , on other grounds). The role of the motions judge is not to weigh evidence, draw inferences or make credibility findings (see Hatch Ltd. v. Atlantic Sub-Sea Construction and Consulting Inc. , 2017 NSCA 61 at paras. 24 – 32 ). Accordingly, I have considered the within uncontested affidavit evidence in a limited manner.

Positions of the Parties HRM [ 15 ] HRM says that the challenged pleading does not have a real chance of success because Regional Council’s decision not to initiate the secondary planning process requiring an amendment to the RMPS and Halifax Mainland Land Use By-Law , is a wholly discretionary decision. They say it does not meet the requirements for de facto expropriation; i.e., that being a regulatory action which would take a beneficial interest in Annapolis’ land, precluding all reasonable uses of the property.

HRM takes the position that their decision merely maintains the status quo with respect to uses and zoning and as such, does not take a propriety interest nor remove any existing land use. [ 16 ] HRM notes that Annapolis alleges that HRM de facto expropriated its property through its decision not to initiate secondary planning of its lands. HRM says that the legal requirements for de facto expropriation are both an acquisition of a beneficial interest in the property and removal of all reasonable uses of the property.

HRM argues that since there is no genuine issue of material fact with regard to the facts in respect of either of those requirements, then there can be no issue of material fact affecting the outcome of the motion. In the result, HRM asserts that as a matter of law, de facto expropriation cannot result from what has taken place (and pleaded) and therefore their motion must be granted. [ 17 ] HRM submits that there can be no genuine issue concerning the material facts by virtue of their source.

Material facts raised in this motion with respect to Annapolis’ claim of de facto expropriation are extracted from the pleadings, applicable land use planning and development legislation, by-laws, and policies followed by HRM in respect of all development considerations. The remaining material facts are the specific legislative actions taken by Regional Council in respect of the Annapolis’ lands as evidenced by the affidavit of Mr.

Arjoon. [ 18 ] HRM argues that while there may be genuine issues of material fact in relation to the other causes of action raised in the statement of claim, they are not material to the outcome of this motion. For example, Annapolis’ pleading alleges bad faith by HRM in the course of the dealings between the parties including the back-and-forth during the secondary planning application, the facilitation process, and Council’s final determination not to approve Annapolis’ application in 2016.

While the denial of these allegations may raise genuine issues of material fact in relation to the other causes of action, these issues are not material to the claim for de facto expropriation or the outcome of this motion, according to HRM. [ 19 ] HRM submits that it has done nothing more than preserve the status quo with respect to the ownership and use of Annapolis’ property. HRM asserts that it has not changed the zoning nor taken any other regulatory action to alter the existing permissible uses of the property.

HRM argues that it has simply exercised its statutory discretion not to amend the existing RMPS and Land Use By-Law to permit serviced development as an enhanced use of the lands. Annapolis [ 20 ] Annapolis says that there are a host of material facts in dispute concerning the de facto expropriation claim. For example, they point out that HRM denies various material facts, including: (

i) HRM planned to designate the Annapolis’ property as parkland in the RMPS but decided not to proceed with that designation to avoid the legal requirement to purchase the lands within one year of such designation; (ii) HRM decided to instead designate the Annapolis property for serviced development, which was their intended use long before the RMPS, but drew a “conceptual boundary” for a Regional Park over virtually all of the Annapolis’ property; (iii) HRM never intended to consider or advance Annapolis’ application for secondary planning in good faith.

Instead, it has obstructed development of the Annapolis property because it wants them for a Regional Park; and (iv) Despite HRM’s refusal to designate the Annapolis Lands as parkland, HRM Staff repeatedly promoted the Annapolis Lands as part of its Regional Park and broadly encouraged and promoted their use by the public without regard for HRM’s obligations.

HRM did so in order to benefit: (1) its relationship with the public that expects a Regional Park and (2) the Province of Nova Scotia to which HRM committed a Regional Park, all the while avoiding payment for the fair market value of the Annapolis Lands. [ 21 ] Annapolis adds that even absent the above material facts in dispute that their claim for de facto expropriation has a reasonable chance of success and should proceed to trial. They add that the motion is premature because there are further documents and discovery which will shed more light on the issues that need to be determined at trial. Analysis

Material Facts In Dispute [22] In keeping with Shannex, I must first address whether the amended statement of claim discloses a genuine issue of material fact,either pure or mixed with a question of law. Of course, a material fact is one that would affect the result. It is for HRM, as moving partyto demonstrate there is no genuine issue of material fact with respect to Annapolis’ de facto expropriation claim. I must assess this on allof the evidence from any source. Here, the Court has the uncontested affidavit evidence of Mr. Arjoon, Mr. Hattie and Ms.

Tsakas. [23] HRM takes issue with Annapolis’ approach on the motion. For example, in the second para. of their reply brief, HRM states: The parties are in agreement that

summary judgment can only be granted where there is no genuine issue of material fact that must bedetermined at trial. Annapolis’s strategy in response to the motion, however, appears to be to inundate the Court with facts that are eithernot material to de facto expropriation or not relevant at all, both by affidavit and in a fact-heavy brief. [24] HRM continues by asserting that Annapolis refers to facts that are material to the other causes of action it has plead; i.e., unjustenrichment and bad faith or malfeasance in public office.

HRM points out that our Court of Appeal has made it clear that facts are onlymaterial when they affect the result (see Shannex at para. 34) [25] In response to this, Annapolis says they wanted to put their best foot forward in marshalling as much relevant evidence aspossible. In my view, they have responded appropriately. Indeed, on the basis of the evidence there can be no question that there arevast issues of material fact to be determined. In this regard, Mr.

Hattie’s affidavit discloses a number of genuine issues of material fact indispute, inclusive of: • September, 2019 correspondence between counsel demonstrating HRM’s denial of the allegations in the amended Statement ofClaim at paras. 20, 21, 61, 71 and 79. (exhibits EE and FF) • Signage erected on Annapolis’ property depicting HRM’s logo on various trails. (exhibits AA, BB and 1) • December 18-23, 2008 The Coast

article quoting HRM employee Peter Bigelow “… the city staffer overseeing the park’screation”. (exhibit U, p. 743 especially) • Ms.

Denty’s discovery evidence to the effect that when the 2006 RMPS was finalized, the decision was made that Annapolis’property would be treated as development lands, not parklands. (exhibit A, pp. 54, 55) • RMPS, clause 1.7.1 denoting what HRM Council “shall consider”. “This terms denotes the mandatory consideration of policyconcepts but does not commit HRM Council to the eventual adoption of policy in secondary planning strategies”. (exhibit D, p. 175) • RMPS, clause 3.1 and the discussion of “S-2” and S-3” the “Urban Settlement Designation Boundary”. (exhibit D, pp. 195, 196) [26] As well, Ms.

Tsakas’ affidavit demonstrates the existence of material facts in dispute; for example: • Ms. Denty’s discovery evidence as per the transcript and the clarifications in HRM counsel’s October 16, 2019 correspondence(exhibit C at p. 905 and exhibit A at pp. 859-860). De Facto Expropriation [27] In order to properly assess this motion, I have carefully gone over the expropriation cases submitted by the parties: Lorraine (Ville) v. 2646-8926 Québec inc., 2018 SCC 35 Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5 R. v. Tener, (SCC), [1985] 1 SCR 533 Hartel Holdings Co. Ltd. v.

City of Calgary, (SCC), [1984 1 SCR 337 Manitoba Fisheries Ltd. v. The Queen, (SCC), [1979] 1 SCR 101 Lynch v. St. John’s, 2016, NLCA 35 535534 British Columbia Ltd. v. White Rock, 2001 BCSC 1381, 2003 BCCA 93 Alberta (Minister of Infrastructure) v. Nilsson, 2002 ABCA 283 64933 Manitoba Ltd. v. Manitoba, 2000 MBQB; affi’d 2002 MBCA 96 Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), 1999 NSCA 98 Casamiro Resource Corp v. British Columbia (Attorney General), (1991) (BC CA), 80 DLR (4th) 1, 26 ACWS (3d)(BCCA) Canadian Pacific Railway v. Vancouver (City), 2002 BCSC 1507 Burmah Oil Co. Ltd. v.

Lord Advocate, [1965] AC 75, [1964 2 All ER 348 Attorney-General v. De Keyser’s Royal Hotel Ltd., [1920] AC 508, [1920] All ER Rep 80

[28] Claims for de facto expropriation are relatively rare and restrictive in Canadian law. To establish de facto expropriation,Annapolis ultimately has to meet the requirements of the Expropriation Act, R.S.N.S. 1989, c. 56. While at the Nova Scotia Court ofAppeal, Justice Cromwell provided helpful guidance on de facto expropriation in Mariner Real Estate Ltd. v. Nova Scotia (AttorneyGeneral), (NSCA), writing at para. 38: 38 The scope of claims of de facto expropriation is very limited in Canadian law.

They are constrained by two governing principles.The first is that valid legislation (primary or subordinate) or action taken lawfully with legislative authority may very significantlyrestrict an owner's enjoyment of private land. The second is that the Courts may order compensation for such restriction only whereauthorized to do so by legislation.

In other words, the only questions the Court is entitled to consider are whether the regulatory actionwas lawful and whether the Expropriation Act entitles the owner to compensation for the resulting restrictions. [29] After noting that extensive and restrictive land use regulation without compensation is almost without exception, the norm, the Court of Appeal referred to the below (para. 42) from E.C.E. Todd, The Law of Expropriation and Compensation in Canada, (2nd 1992)at pp. 22 – 23: Traditionally the property concept is thought of as a bundle of rights of which one of the most important is that of user.

At common lawthis right was virtually unlimited and subject only to the restraints imposed by the law of public and private nuisance. At a later stage inthe evolution of property law the use of land might be limited by the terms of restrictive covenants. Today the principal restrictions on land use arise from the planning and zoning provisions of public authorities. By the imposition,removal or alteration of land use controls a public authority may dramatically increase, or decrease, the value of land by changing thepermitted uses which may be made of it.

In such a case, in the absence of express statutory provision to the contrary an owner is notentitled to compensation or any other remedy notwithstanding that subdivision approval or rezoning is refused or development is blockedor frozen pursuant to statutory planning powers in order, for example, to facilitate the future acquisition of the land for public purposes."Ordinarily, in this country, the United States and the United Kingdom, compensation does not follow zoning either up or down ... (but)a taker may not, through the device of zoning, depress the value of property as a prelude to compulsory taking of the property for apublic purpose. [30] Notably, in his concurring reasons in Mariner, Justice Hallett stated as follows at para. 113: 113 To prove a de facto expropriation, an owner of an interest in land as defined in the Expropriation Act, R.S.N.S. 1989, c. 56 mustconclusively prove that there has been, in effect, a confiscation of all reasonable private uses of the interest in the land in question and anacquisition of the same by the statutory authority.

That is what occurred in The Queen in Right of British Columbia v. Tener et al., (SCC), [1985] 1 S.C.R. 533. [31] Further, as outlined in Mariner and by the Supreme Court of Canada in Canadian Pacific Railway Co. v. Vancouver (City), 2006SCC 5, to have a chance at success the claimant (Annapolis) must be able to establish that a regulatory action by a statutory authority(HRM) leads to: 1. The acquisition by the authority of a beneficial interest in the property or flowing from it; and 2.

The removal of all reasonable uses of the property [32] Through this motion, HRM says that as a matter of law de facto expropriation cannot result from HRM refusing to amend theRMPS and the associated land use by-laws. HRM asserts that the case law establishes Annapolis has no chance of success on the defacto expropriation claim because they cannot demonstrate the above two requirements.

HRM adds that Annapolis has incorrectlysubmitted that motive or bad faith is a requirement or element of de facto expropriation. [33] Annapolis counters by going over the same caselaw but emphasizing that the jurisprudence is not as straight forward as HRMsuggests. [34] I have carefully assessed HRM’s legal arguments in the context of this partial

summary judgment motion. While HRM mayultimately prevail in persuading the trial judge, we are obviously well before that stage. Given the evidence on this motion and the stateof the law with respect to de facto expropriation, I am not prepared to grant the requested partial

summary judgment. With respect to thegenuine issues of material fact in dispute, I have previously commented on the contents of the Hattie and Tsakas affidavits (see paras. 25and 26, infra). [35] As for de facto or constructive expropriation, the concept is addressed by the Supreme Court of Canada in Chief JusticeWagner’s opening paras. in Lorraine (Ville) v. 2646-8926 Québec inc., 2018 SCC 35: 1 The concept of expropriation concerns the power of a public authority to deprive a property owner of the enjoyment of theattributes of his or her right of ownership.

Because of the importance attached to private property in liberal democracies, the exercise ofthe power to expropriate is strictly regulated to ensure that property is expropriated for a legitimate public purpose and in return for a justindemnity. In Quebec, the Expropriation Act, CQLR, c. E-24, limits the exercise of this power and lays down the procedure to befollowed in this regard. 2 When property is expropriated outside this legislative framework for an ulterior motive, such as to avoid paying an indemnity, theexpropriation is said to be disguised.

Where a municipal government improperly exercises its power to regulate the uses permitted withinits territory in order to expropriate property without paying an indemnity, two remedies are therefore available to aggrieved owners.They can seek to have the by-law that resulted in the expropriation declared either to be null or to be inoperable in respect of them. If thisoption is no longer open to them, they can claim an indemnity based on the value of the property that has been wrongly taken from them. [my emphasis added]

[36] In argument Annapolis’ counsel equated “disguised” expropriation to de facto or constructive expropriation. In the context ofthe within motion I am certainly prepared to entertain this

interpretation. I would add that there is ample evidence in Mr. Hattie’saffidavit to point to the possibility of an ulterior motive on the part of HRM. [37] In the earlier Supreme Court decision of British Columbia v.

Tener, (SCC), [1985] 1 SCR 533, the owners ofmineral claims on lands later designated as a public park successfully advanced a claim for compensation for constructive expropriation.The Crown gradually imposed more onerous conditions for the exploitation of those claims, and then ultimately told the owner that nonew licenses for exploitation of the claims would be granted. [38] The Court found that the actions of the Crown were an effective expropriation of the plaintiff’s mineral claims.

Justice Esteydetermined that the actions of the Crown took value from the respondents and added value to the park; noting at para. 21: 21 This process I have already distinguished from zoning, the broad legislative assignment of land use to land in the community. Itis also to be distinguished from regulation of specific activity on certain land, as for example, the prohibition of specified manufacturingprocesses.

This type of regulation is akin to zoning except that it may extend to the entire community: see Re Bridgman and Toronto, (ON SC), [1951] OR 489 at 491, [1951 3 DLR 814 (HC), for an example of such regulation. Here, the action taken bythe government was to enhance the value of the public park. The imposition of zoning regulation and the regulation of activities onlands, fire regulation limits and so on add nothing to the value of public property.

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

Thenotice of 1978 was an expropriation and, in my view, the rest is part of the compensation assessment process. [39] The Court noted that this destruction of value had a benefit to the Crown as: (

a) it acquired a negative right by virtue of not having to compensate the respondent for future mineral development (byforestalling development through the legislation it passed); and (

b) it acquired a positive right by preventing the plaintiff from exercising their development rights, which permitted the Crown tofurther establish its park. (Tener, at para. 9) [40] Justice Cromwell considered the Tener principles in Mariner, albeit ultimately finding that they did not apply on the facts of thecase before our Court of Appeal (see paras. 65 and 66).

The constructive expropriation claim was dismissed, with Justice Cromwellcommenting at para. 89: 89 … The respondents, while asserting that all reasonable uses of the land are precluded by the operation of the Act andRegulations, have not shown that they would be denied the required permits with respect to such other reasonable or traditional uses ofthe lands. In short, there is an absence of evidence relating to environmentally appropriate development plans on the land in question,and an absence of evidence of refusal of permission for the respondents to engage in other reasonable or traditional uses.

These, incombination, result, in my opinion, in the respondents having failed to establish that virtually all incidents of ownership have, by theeffect of the Act and Regulations, been taken away. [41] In Lynch v. St. John’s, 2016 NLCA 35, the plaintiff owned lands located in a watershed zone. When the plaintiff acquired thelands, the Crown grant included groundwater. The City subsequently removed this right by imposing building restrictions on the landthat fell within the watershed zone. In concluding that St.

John’s constructively expropriated the land Justice Barry’s comments at paras.66 and 67 are instructive: 66 In the present case, once the Court concludes that there has been a constructive expropriation, the provisions of sections 101 and105 of the City Act may be applied to allow for compensation. In

section 105, the reference to the council having power to expropriateprivate property "where necessary, for preventing the pollution of the waters" becomes applicable when a Court finds a compulsorytaking has occurred. A de facto expropriation may be treated as a trigger for the expropriation process, without unduly straining thelanguage of the statute. Compensation must then be paid as determined by arbitration if no agreement is reached on the amount. In thepresent case, the fact that a compulsory taking occurred establishes that the Council believed it was necessary.

The evidence establishesthat the restrictions on building and other activity on the Lynch property were imposed to prevent pollution of the waters of Little Pond,from which water is pumped on an intermittent basis to supplement the Windsor Lake water supply. 67 The trial judge in the present case concluded, at paragraph 60: 60 The property of the Applicants is presently in its natural state and there is nothing in the facts before me upon which theRespondent could justify the use of its expropriation powers under

section 105. To the contrary, the Respondent has thus far performedits statutory duty of ensuring a wholesome supply of water through the regulatory measures adopted in

section 104. Therefore, on thefacts before me the Applicants' claim of constructive expropriation cannot be grounded in this provision. With respect, the trial judge has erred by failing to recognize that once the Court determines, as it should, that the regulatory measuresadopted in

section 104 amount to de facto or constructive expropriation, the conclusion must follow that the City has decided theconstructive expropriation is necessary for pollution control. The unchallenged affidavit evidence from the City makes a case that abuffer zone, where no residential building is permitted, is the best management approach for ensuring pure and wholesome water asmandated by the City Act. This is an assertion by the City that the restrictions on the Lynch property are necessary for preventingpollution. Compensation then becomes available through the provisions of sections 101 and

Section 105 may be relied upon by theLynches as a statutory basis for seeking compensation, with

section 101 mutatis mutandis setting out the process to be followed.

[ 42 ] Having carefully reviewed the expropriation cases, it is fair to say that they offer at times creative

interpretations on what may constitute a taking. Without question they are fact specific and offer different scenarios in terms of when a de facto expropriation claim may succeed. [ 43 ] What has not been placed before the Court is an expropriation case which has been the subject of

summary judgment. In any event, on this motion there is ample evidence demonstrating material facts in issue mixed with a question of law. Whereas the record is still incomplete, I am of the emphatic view that the issue of de facto expropriation must be left – along with the other two main claims of Annapolis – for the trial judge, who will have the benefit of the complete record for adjudication. [ 44 ] In all of the circumstances, I have determined that Annapolis’ de facto expropriation claim raises genuine issues of material fact requiring a trial.

I would add that these material facts are sufficiently interwoven with the two other main causes of action such that to deny Annapolis’ right to pursue this claim would not appreciably shorten pre-trial procedures or the trial. In this regard I do not find proportionality (as addressed by the Supreme Court of Canada in Hryniak ) to be a determinative factor on this motion. Costs [ 45 ] This motion involved extensive briefs, particularly on de facto expropriation. The successful party’s main affidavit was extensive and I have already characterized this as an appropriate response.

Although the motion did not involve cross-examination and took less than a full day, I recognize significant time and effort would have been required to mount the successful response. [ 46 ] When asked what would be appropriate costs on the motion, HRM suggested $5,000.00 and Annapolis asked for a figure closer to $10,000.00. In all of the circumstances of this case managed special time motion, I award $7,500.00 costs payable by the unsuccessful party, HRM to Annapolis on a forthwith basis. I would ask Annapolis’ counsel to prepare the required Order. Chipman, J.