Annapolis Applied in Alberta - Constructive Taking

530556 Alberta Ltd. v His Majesty the King in right of the Province of Alberta Ministry of Transportation and the City of Chestermere (ABKB, Court File 2101 02876)

Background

The Plaintiff owned land next to the Trans-Canada Highway. Historically, the Plaintiff had operated a campground and waterslide park on the lands, but over time, he closed the campground and park and let them slide into disrepair. The lands became an attractive nuisance for youth, who posted YouTube videos of the “abandoned”  waterslide and buildings.

In 2009, the City of Chestermere annexed the lands. In 2011, the City passed a land use amendment designating the lands as an Interim Commercial District to recognize the potential for these lands to be used as part of the Trans-Canada Highway realignment and a new interchange. In 2011, the Plaintiff applied for a development permit to develop a hotel and convention centre. The City circulated the application to Alberta Transportation (AT). AT responded that the lands may be needed in the future, and the City’s development authority refused to issue a development permit. The Plaintiff did not appeal to the then Municipal Government Board (now, the Land and Property Rights Tribunal).

In 2013, the Plaintiff commenced a lawsuit against AT for de facto expropriation. In 2019, the lawsuit was dismissed for long delay. In 2022, in an effort to revive the cause of action, the Plaintiff applied for two development permits – one for a hotel and convention centre and the other for a campground. The City sought advice from AT. The statutory time to respond to the Plaintiff’s applications passed, and Plaintiff treated it as a deemed refusal and appealed to the City’s subdivision and development appeal board. The SDAB declined to hear the appeal stating that it had no jurisdiction since statutory appeal period had expired. The Plaintiff did not appeal the SDAB’s decision to the Alberta Court of Appeal under the statutory regime of the Municipal Government Act. Instead, the Plaintiff commenced a new constructive taking action for $19.4 million against AT and the City.

Annapolis Group Inc. v Halifax Regional Municipality[1]  

Between the Plaintiff’s two lawsuits, the Supreme Court of Canada in Annapolis clarified the doctrine of constructive taking. The two-part test for constructive taking is that stated by Canadian Pacific Railway Co. v Vancouver (City)[2], properly understood: 

• Whether the public authority acquired a beneficial interest in the property or flowing from it (i.e., an advantage), and
• Whether the state action has removed all reasonable uses of the property.

The SCC said the regulation of land use alone does not meet the test for constructive taking. There must be deprivation of the use and enjoyment of the property in a substantial and unreasonable way, leaving the plaintiff with no reasonable use.

The Proceedings

The Plaintiff brought an application for summary judgment, and the two defendants brought cross-applications. Both Defendants denied that there had been a constructive taking. In addition, AT argued a limitations defence and abuse of process, and the City argued that the Plaintiff should have used the statutory appeal under the Municipal Government Act.

The Decision

Application Judge Mason dismissed the Plaintiff’s application for summary judgment and granted AT and the City’s applications, thereby dismissing the action. In the reasons, the judge made three noteworthy findings:

• Constructive taking is not a continuing tort or cause of action.
• The Municipal Government Act’s planning appeal provisions are an adequate remedy, and challenges to municipal planning decisions do not give rise to a civil cause of action.
• Restrictions under a land use bylaw do not amount to “use”, and the refusal to issue a development permit, where there are other permitted and discretionary uses, does not remove all reasonable uses of the property as required by Annapolis to found a civil action for constructive taking.

Each constructive taking case turns on its facts. In this case, the Province and municipality succeeded.

Brownlee LLP 

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[1] 2022 SCC 36

[2] [2006] 1 SCR 227