Annapolis Group Inc. v. Halifax Regional Municipality (2022 SCC 36)
In a majority decision held on October 21, 2022, the Supreme Court of Canada allowed an appeal in favour of Annapolis Group (“Annapolis”), a land owner suing the Halifax Regional Municipality (“Halifax”), alleging that the municipality’s regulatory measures have deprived it of all reasonable or economic uses of its land, resulting in constructive taking without compensation. The 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 acted as interveners in the case.
In the 1950s, Annapolis started buying lands in Halifax, Nova Scotia with plans to develop and resell the property, acquiring 965 acres of land overtime. In 2006, Halifax adopted a planning strategy for land development in the municipality, including the lands owned by Annapolis (the “Lands”), over a 25-year period. Halifax’s planning strategy reserved a portion of the Lands for a public park with the rest zoned for “serviced development”, such as residential neighbourhoods. For serviced development to occur, Halifax must adopt a resolution authorizing a “secondary planning process” and make an amendment to the land use by-law. Starting in 2007, Annapolis made several unsuccessful attempts to develop the Lands. Ultimately, by resolution in 2016, Halifax refused to initiate the secondary planning process, and Annapolis sued the municipality, alleging that Halifax had expropriated private property for a public park which amounted to a constructive taking as part of its suit, among other claims.
In 2019, Halifax sought summary dismissal of Annapolis’ constructive taking claim, which was eventually ruled in favour of Annapolis and appealed by Halifax. At the Court of Appeal, it was held that Annapolis’ constructive taking claim did not have a reasonable chance of success as required by Canadian Pacific Railway Co. v. Vancouver (City). The Court of Appeal subsequently struck the claim.
In review of the case, a majority of the Supreme Court found that Annapolis’ claim of constructive taking raises disputed issues of fact that must be decided at trial, based on the constructive taking test set out in Canadian Pacific Railway Co. v. Vancouver (City). The Court found two parts to the test for establishing a constructive taking:
- the test must show the government has acquired a beneficial interest in the property or flowing from the property; and
- the test requires showing the proposed regulatory measures would remove all reasonable uses of the private property.
In consideration of the test, the Court subsequently ruled that 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. The appeal was ultimately allowed and the case will proceed to trial.
In its ruling, the Court clarified that the requirement for the government to acquire a beneficial interest should be interpreted broadly, to mean some kind of advantage flowing to the government. This approach expands the scope of compensation for constructive takings, and will have important implications in a number of areas, including municipal law.
The majority decision of the Court adopted the language and arguments contained in the Canadian Constitution Foundation’s factum on a number of points, including the broad approach to the beneficial interest requirement, the indicia for a taking, and the characterization of past case law. Miller Thomson is proud that its counsel’s submissions were of assistance to the Court in this important case.
Miller Thomson represented the Canadian Constitution Foundation in the successful proceedings with a team led by Malcolm Lavoie and comprised of Adrienne Funk, Jordon Magico and Megan Kennedy (Commercial Litigation).
