Federal Court of Appeal overturns Northern Gateway approval

The Federal Court of Appeal has quashed the decision by the Federal Cabinet to approve the Northern Gateway pipeline project on the basis that Canada failed to consult adequately with First Nations on the pipeline route.  With changes to the National Energy Board Act made by the previous government, pipeline projects like the Northern Gateway project are subject only to a review by the National Energy Board.  The NEB then makes a recommendation to the Federal Cabinet, which has the ultimate say in whether a project is approved.

The appeal court ruled that Canada failed in its approach to consultation with First Nations on the project, noting that the government carried out consultations in a "brief, hurried and inadequate" way.

Read the decision at: Federal Court of Appeal.

Sask Court rules that no compensation payable on expropriation of road

A Saskatchewan municipality passed a by-law to expropriate a roughly 2-acre road parcel from a quarter section of privately-owned land.  The affected landowners applied unsuccessfully to the Court  of Queen's Bench to quash the by-law, following which the issue of compensation for the expropriation was set to be determined.  In a decision released last October, the Court ruled that, in the circumstances of this particular case, no compensation was payable for the taking.

The road had actually been constructed by the municipality in 1980 to provide access to nearby lands. The 2-acre roadway cut across an 8-acre triangular piece of the quarter section, which was cut off from the remainder of the lands by a railway line.  The landowners (and/or their predecessors-in-title) had acquiesced in the construction and continuing use of the road.  The municipality had continued to maintain the road since its construction.

In 2004, the landowners applied to subdivide the quarter section to turn the 8 acre parcel into a one-lot subdivision.  This prompted the municipality to raise a concern about the maintenance of the road access across the property.  Eventually, the one-lot subdivision proposal turned into a two-lot proposal.  Between 2004 and 2011, the municipality and the landowners attempted to negotiate a resolution.  The municipality offered to purchase the 2-acre parcel in December, 2010, but no agreement was reached.  In March, 2011, the municipality passed its expropriation by-law.

In determining compensation, the Court of Queen's Bench found that the highest and best use of the land being taken was not a two-lot subdivision as proposed by the landowners.  The Court found that a two-lot subdivision was not a "reasonably probable use of the eight acre parcel" and that "there was no reasonable expectation that such a subdivision would occur."  For one thing, the road access issue was holding up any approval of a two-lot subdivision.  There was also evidence that the subdivision would not meet setback requirements.

The Court then looked at the effect of the taking on the eight-acre parcel as a whole: "what, then, should the applicants be paid, taking account of the value of the road parcel? Based on the before and after method, the applicants should receive the difference between the value of the eight acre parcel that they owned prior to the expropriation, and the value of the approximately six acre site that they will have after the expropriation. That calculation accounts for the value of the road parcel, the damage to the remaining six acre parcel, and any increased value to the remaining land arising from the work to be done - that is, the maintenance of a public road - on the road parcel. "

On the basis that the highest and best use of the land affected was as an eight-acre one-lot subdivision, the Court concluded that no compensation was payable: "Given that the transfer of the road parcel without compensation was an unavoidable cost of a single lot subdivision, the value of the eight acre parcel for a single lot subdivision was the same before and after the expropriation of the road parcel. The applicants accordingly suffered no loss as a result of the expropriation. Indeed, and as noted by counsel for the respondent, the expropriation of the road parcel puts the applicants one step closer to having the legal access that is a requirement for any subdivision. As such, it is a special benefit to the applicants."

The Court would have reached the same conclusion had the highest and best use of the land been agricultural: "no compensation is payable - even if the highest and best use of the eight acre parcel was the existing agricultural use. The road parcel is already used for the road, and is not available for agricultural use. As such, loss of title to the road parcel would not affect the value of the quarter section for agricultural purposes. "

Read the decision at: Colhoun v Rural Municipality of Lumsden No. 189.

Sask Court of Appeal orders solicitor-client costs for landowner wrongfully expropriated

The appellant succeeded in obtaining an order in the Court of Queen’s Bench quashing a municipal bylaw expropriating a portion of his farm land. In consequence, he asked the Chambers judge to order the municipality to pay him the costs he had incurred in having the bylaw set aside. His solicitor-client costs, he said, amounted to $64,498.92. The Chambers judge declined to award him costs on a solicitor-client basis and instead, awarded him the fixed sum of $3,000 payable by the municipality. He then brought an appeal to the Court of Appeal for Saskatchewan.

Saskatchewan courts had already confirmed that it is within the discretion of the Chambers judge to award solicitor-client costs in the context of expropriation and related matters.  The Court of Appeal in this decision noted that, while there was no authority for the proposition that solicitor-client costs must be awarded in expropriation cases, "there is, however, a substantial body of literature suggesting, as a matter of fairness, that persons whose private land has been taken from them by means not of agreement but of compulsory expropriation should generally be able to recover their reasonable legal and other costs, responsibly incurred, in responding to the expropriation."

The Court of Appeal remitted the matter back to the Chambers judge to assess the landowner's reasonable solicitor-client costs, concluding: "The appellant’s land was taken from him through no fault on his part pursuant to a process in which he had no input. As it turns out, the land was unlawfully expropriated, yet the appellant had to go to court at his expense to establish the wrongdoing and recover his land. As in Sask Water, equity cries out that the appellant should get some relief."

Read the decision at: Goodtrack v The Rural Municipality of Waverley No 44.

Saskatchewan Court allows recreational development in ranchland to go forward

A number of ranch land owners in the R.M. of Loon Lake, Saskatchewan asked the Court of Queen's Bench to quash or overturn by-laws that rezoned 44 acres owned by Kenneth and Patricia Prosser from agricultural to recreational use.  In order to allow for development proposed by the Prossers, the R.M. needed to change the Land Use Concept Map and Zoning District Map, which establish the general land use and development goals of the R.M. as set out in its Basic Planning Statement.

The landowners first challenged the by-laws on the basis that they were illegal due to a lack of substance.  They asserted that the bylaws were passed for an illegal purpose, that being solely for the economic consideration of allowing the recreational development.  The Court ruled that economic considerations were not the sole considerations of the R.M. council in passing the by-laws.

The second challenge was on the basis that the by-laws were not passed according to the proper process.  The Court disagreed.

The third challenge was that the by-laws were inconsistent with the general goal of the Basic Planning Statement, which is to maintain the agricultural character of the municipality by protecting prime agricultural land from being taking out of production, restricting lakeshore development to properties already zoned lakeshore development and not allowing lakeshore development within one mile of intensive livestock operations.  The R.M. acknowledged the importance of these points in the Basic Planning Statement, but argued that they should not be to the absolute exclusion of all other development contemplated within the Statement.  The Court agreed this was a reasonable interpretation of the Statement.

The fourth challenge by the landowners was based on minimum distance separation requirements related to intensive livestock operations.  The Court found that the requirements did not preclude development of a recreational subdivision and noted that the proposed development was to be on marginal grazing land rather than prime agricultural land.  The livestock facilities affected were not considered intensive by the R.M. council.  The Court reviewed this issue and found that this decision of the council was reasonable.

The fifth challenge to the by-laws was that they lacked landowner support.  The Court confirmed that it was for the R.M. council to decide what is in the best interests of the R.M. as a whole.  The public had been given an opportunity to be heard on the proposed development, but the decision was to be made by the councillors.

The sixth challenge by the landowners was that the site conditions were not suitable for the proposed development.  The Court found there was a lack of evidence to support this position.  The members of council viewed the site and the conditions of the site and reached a "constructive and reasonable decision" that the site was suitable for the development.

The seventh basis for challenging the by-laws was that there was insufficient demand for development of this sort to warrant a new development.  The Court found this was a "narrow and unrealistic approach" to what is in the best interest of the R.M. as a whole.  Members of council were aware of a "strong demand for lakeshore lots in this area of Saskatchewan".

The eighth and final basis for challenge by the landowners was an alleged failure by the council to have regard to concerns set out in section 10.1 of the Basic Planning Statement (development review criteria).  Based on affidavit evidence from the R.M., the Court found that those concerns were considered in the passing of the by-laws.

Justice Acton of the Queen's Bench concluded as follows:

Based upon the law in Saskatchewan as previously stated, the decision of council in amending the Land Use Concept Map and the Zoning Bylaw must be reasonable.

The decision of the council of the R.M. was reasonable, transparent and well thought out based on its jurisdiction and the reasons set out earlier in this judgment. Council has shown an understanding of the sometimes competing concerns respecting the maintaining of primary agricultural land, the encouragement of development of agricultural activities, and the need to develop lakeshore developments on marginal lands adjoining bodies of water for recreational purposes.

The applicants are unhappy with the proposed development. They have ranched for generations in the peaceful solitude and tranquillity of the area.

Their desire to maintain this lifestyle is understandable.

However, council has a responsibility to all inhabitants of the R.M. It must make decisions based on the best interests of all of the inhabitants of the R.M. As stated in s. 31 of the PDA, the Official Community Plan is to provide a comprehensive policy framework to guide the physical, environmental, economic, social and cultural development of the municipality. This is a broad and general policy which must guide the R.M.

Council has decided that the approval of this recreational development is in the long-term best interest for the advancement of the respondent municipality without preventing the continued use and development of the ranch lands in the area by local residents.

Council’s decision is in a range of reasonable, possible decisions.

Read the decision at: Morton v Loon Lake (Rural Municipality No 561).