OTTAWA — A trial can proceed over whether Halifax Regional Municipality improperly used its regulatory powers to effectively seize land for use as a public park without compensation, the Supreme Court of Canada has ruled.
The legal dispute began when Annapolis Group Inc. filed a court action against Halifax, claiming it was not only blocking attempts to develop the company's land but promoting the area's use by the public — in effect expropriating the space.
Beginning in the 1950s, Annapolis acquired the property, now totalling 965 acres, with the aim of securing development rights.
In 2006, Halifax adopted a strategy for land development in the municipality, including the Annapolis lands, over a 25-year period. It reserved a portion of the lands for possible inclusion one day in a regional park, but also zoned the area for possible residential development.
For development to take place on the lands, Halifax must adopt a resolution authorizing a "secondary planning process" and an amendment to the relevant land use bylaw.
Annapolis has made several attempts to develop the lands. By means of a 2016 resolution, Halifax refused to begin the secondary planning process, and Annapolis went to court.
In 2019, a judge denied the municipality's bid to summarily dismiss the expropriation element of the company's claim. Other aspects, alleging misfeasance in public office and unjust enrichment, were allowed to proceed to trial.
However, an appeal court overturned the decision and dismissed the expropriation claim, saying although Annapolis cannot use the area as it wishes, that does not amount to the municipality taking the land.
The appeal court's ruling prompted the developer to bring its case to the Supreme Court.
In its 5-4 decision Friday, the top court said there are genuine issues of fact arising from the claim to be decided at trial.
The court noted the established test to show a "constructive taking" — its preferred term for expropriation through regulation — involves two considerations.
In applying the test, a court must decide whether the public authority has acquired a beneficial interest in the property — that is, an advantage. Second, it must determine whether the state action has removed all reasonable uses of the property.
In the Annapolis case, it is disputed whether Halifax is promoting the lands as a public park, a majority of the court noted. It said this is a relevant factor because, if proven, it would tend to support Annapolis' claim that Halifax acquired a beneficial interest in the lands.
The second part of the test could also be explored in a hearing, the Supreme Court found.
"If Annapolis can prove at trial that Halifax is unlikely to ever grant secondary planning approval, this is clearly material to its constructive taking claim," wrote Suzanne Côté and Russell Brown on behalf of the majority.
"In our view, all reasonable uses of 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."
This report by The Canadian Press was first published Oct. 21, 2022.
Jim Bronskill, The Canadian Press
