The Supreme Court of Canada has ruled a developer’s lawsuit against Halifax can go ahead, overturning an earlier decision by the Nova Scotia Court of Appeal.

Annapolis Group filed a claim against HRM in June 2017, alleging the municipality effectively expropriated its land without compensation. It sought $119 million in damages.

The land is part of a long-promised park in the Blue Mountain-Birch Cove Lakes area. Halifax regional council voted in September 2016 against rezoning the developer’s 965-acre (390-hectare) property to allow a subdivision.

A map showing Annapolis Group’s lands in yellow, with the municipality’s oft-disputed conceptual park boundary dotting through it.

In 2019, HRM lawyers argued the court should throw out the de facto expropriation claim without going to trial. The first judge disagreed, but the Nova Scotia Court of Appeal unanimously sided with HRM.

“There are simply no facts in dispute that would relate to the de facto expropriation claim,” Justice David Farrar wrote.

“Annapolis has the same rights with respect to its lands that it had prior to Council’s resolution on September 6, 2016. Nothing has changed.”

In June 2021, the Supreme Court of Canada agreed to hear an appeal from Annapolis.

As the Halifax Examiner reported in 2021, the case attracted several interveners, including the Nova Scotia, BC, and federal governments. They were interested in the court’s interpretation of the test for de facto expropriation. That test is derived from a 2006 Supreme Court of Canada decision, Canadian Pacific Railway Co. v. Vancouver (City).

The test, referred to as CPR, requires two elements, “an acquisition of a beneficial interest in the property or flowing from it, and … removal of all reasonable uses of the property.” Annapolis argued the test shouldn’t require actual acquisition, just the deprivation of “the reality of proprietorship.”

Canada’s highest court rules for Annapolis

The court heard the case in February 2022, and released its decision on Friday. As first reported by CBC, it took Annapolis’ side in a 5-4 decision with the majority side written by justices Suzanne Côté and Russell Brown.

The majority found the lower appeals court failed in its interpretation of the legal test for de facto expropriation, or “constructive taking.”

“Simply put, if a constructive taking requires an actual taking, then it is no longer constructive. It follows that the Court of Appeal’s requirement of an actual acquisition of the Annapolis Lands cannot be necessary to satisfy the CPR test for a constructive taking,” Côté and Brown wrote.

The “beneficial interest” laid out in the test should be interpreted as an “advantage,” the majority ruled. That means it’s enough for Annapolis to prove that Halifax is receiving some “advantage” by not allowing the development. That’s for Annapolis to prove at trial.

The dissenting opinion, written by justices Nicholas Kasirer and Mahmud Jamal, sides with the appeals court, arguing Annapolis is asking the court to depart from precedent, and it has.

CPR and the authorities it cited show there is no de facto taking unless there is both the acquisition of a beneficial interest in the property or flowing from it and a removal of all reasonable uses of the property. The interest must be proprietary — not merely an ‘advantage’ — and the acquisition must correspond to the deprivation,” Kasirer and Jamal wrote.

What’s next?

The developer’s entire lawsuit against HRM can now go ahead. It also includes a claim of “abuse of public office and unjust enrichment.”

The remainder of the case was effectively on hold pending the Supreme Court of Canada decision. The parties will now need to schedule a trial date.

Parks Canada is working with Halifax to create a national urban park in Blue Mountain-Birch Cove Lakes.

Zane Woodford is the Halifax Examiner’s municipal reporter. He covers Halifax City Hall and contributes to our ongoing PRICED OUT housing series. Twitter @zwoodford

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  1. I read in the comments section of the Globe & Mail that the 5 member majority were all appointed by Steve Harper’s government and the 4 member minority were all appointed by Justin Trudeau’s government.   Maybe an interesting political commentary on property rights.
    Will the Province now designate these lands as a “special planning area” to avoid any public consultations or Regional Council approval?