[2001] 1 F.C. 305
T-1843-99
The Estate of the Late Emerson Woodburn, Edith Woodburn and Douglas Woodburn (Plaintiffs)
v.
National Capital Commission (Defendant)
Indexed as: Woodburn Estate v. National Capital Commission (T.D.)
Trial Division, Heneghan J.—Ottawa, February 23; August 29, 2000.
Expropriation — National Capital Commission (NCC) abandoning purpose for which land expropriated (Greenbelt) — Declaring land surplus, obtaining rezoning and selling at huge profit — In absence of “colourable scheme”, no common law or statutory right in former owner to reacquire land — Whether or not expropriating authority acting within statutory authority irrelevant upon this motion — NCC granted summary judgment dismissing action but not costs in circumstances (profit realized, that farm land taken to prevent urban sprawl sold after rezoning for highway commercial).
In 1961, the National Capital Commission (NCC) expropriated part of the plaintiffs land in the township of Gloucester for inclusion in the Greenbelt surrounding the National Capital Region. The acquisition was completed in 1963, for $110,000. The plaintiffs continued to occupy the expropriated land as tenant farmers. In the early 1990s, the NCC determined that the land was no longer necessary for the Greenbelt and declared it surplus. Thereafter, the plaintiffs unsuccessfully attempted to reacquire the land from the Commission. In 1997, the land was rezoned for commercial use. In 1999, the NCC sold the land to an Ontario numbered corporation for $6,702,000. The Woodburn family did not submit a bid.
The plaintiffs’ statement of claim sought a declaration that they were entitled to acquire the land and mandamus for that relief, a declaration that NCC hold title as trustee or constructive trustee, an injunction and damages (including punitive and exemplary). This was a motion by the NCC seeking dismissal of these claims by summary judgment.
The plaintiffs did not contest the legality of the expropriation proceedings, but claimed to have an interest in the land arising both from common law and statute, specifically a right to reacquire those expropriated lands which are no longer in use by the NCC as part of the Greenbelt.
The plaintiffs relied on the decision in National Capital Commission v. Munro, [1965] 2 Ex. C.R. 579, in which it was held that expropriated owners had no cause of action against the NCC if the use for which the land was taken was later abandoned so long as the abandonment was not part of a colourable scheme. The plaintiffs submitted that this case, by inference, gave rise to a common law right to reacquire land upon abandonment of the original purpose for which it was expropriated. The plaintiffs further suggested that the facts were such as to raise the possibility that the NCC may have taken part in a colourable scheme. The plaintiffs also asserted a statutory right pursuant to The Lands Clauses Consolidation Act, 1845, a statute of the United Kingdom, which the plaintiffs argue was incorporated into Canadian law by virtue of the Colonial Laws Validity Act, 1865. Finally, the plaintiffs submit that the defendant acted outside its authority in rezoning the land and selling it.
Held, the motion should be allowed.
Neither the National Capital Act nor the Expropriation Act provided for the situation where an expropriating authority abandons the purpose for which land had been taken. The Munro case did not recognize a common law right to reacquire expropriated land. It stands for the proposition that an expropriating authority may abandon the purposes for which land was expropriated, as long as the abandonment was not part of a colourable scheme. The words “colourable scheme” are problematic as their meaning is ambiguous. They do, however, suggest duplicity and impropriety.
There was no evidence that the NCC had participated in a colourable scheme. In particular, there was no evidence that the 1961 expropriation proceedings were motivated by an intention to bank land holdings for future sale at a financial gain.
Nor could the plaintiffs rely upon The Lands Clauses Consolidation Act, 1845 as conferring a statutory right to reacquire this property. While the plaintiffs were not given a first option to purchase, they were at liberty to participate in the bidding process, but chose not to do so.
The question of whether the defendant was or was not acting within its statutory authority did not affect the ultimate issue in this motion for summary judgment. Even if the defendant was acting outside of its statutory authority, the fact remains that the expropriation was legal and, based on Munro, the defendant was within its legal competence to change the purpose for which the land was expropriated.
Based on the current state of the law, the motion for summary judgment had to be granted. However, considering the fact that the Greenbelt was conceived as a “buffer zone” against encroaching urban sprawl, the NCC’s actions in having this property rezoned from institutional government to highway commercial would seem to be more consistent with encouraging urban sprawl than with resisting the erosion of green areas. In view of that, as well as the huge profit realized by the NCC from the expropriation and subsequent sale of the land, the defendant’s motivation in declaring the land surplus, securing its rezoning and then selling it could be questioned. In these circumstances, there was no order as to costs.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Colonial Laws Validity Act, 1865 (U.K.), 28 & 29 Vict., c. 63.
Courts of Justice Act, R.S.O. 1990, c. C.43.
Expropriation Act, R.S.C. 1952, c. 106, ss. 24, 35(1).
Lands Clauses Consolidation Act, 1845 (The) (U.K.), 8 & 9 Vict., c. 18, s. 128.
National Capital Act, S.C. 1958, c. 37, s. 13.
National Capital Act, R.S.C., 1985, c. N-4, ss. 2 “National Capital Region”, 10(1) (as am. by R.S.C., 1985 (4th Supp.), c. 45, s. 3), (2).
Statute of Westminster, 1931, 1931 (U.K.), 22 Geo. V, c. 4 [R.S.C., 1985, Appendix II, No. 27].
CASES JUDICIALLY CONSIDERED
APPLIED:
Granville Shipping Co. v. Pegasus Lines Ltd., [1996] 2 F.C. 853 (1996), 111 F.T.R. 189 (T.D.); Kanematsu GmbH v. Acadia Shipbrokers Ltd., [2000] F.C.J. No. 978 (C.A.) (QL); National Capital Commission v. Munro, [1965] 2 Ex. C.R. 579.
REFERRED TO:
Woodburn v. National Capital Commission, [1999] O.J. No. 4286 (S.C.) (QL).
MOTION for summary judgment seeking dismissal of the plaintiffs’ claims for inter alia, a declaration that they were entitled to reacquire land which the NCC had expropriated for the Greenbelt, but later declared surplus, rezoned and sold at an enormous profit. Motion granted but no order as to costs.
APPEARANCES:
S. Russell Kronick for plaintiffs.
Kevin P. Nearing for defendant.
SOLICITORS OF RECORD:
Goldberg, Shinder & Kronick, Ottawa, for plaintiffs.
Borden Ladner Gervais, Ottawa, for defendant.
The following are the reasons for order and order rendered in English by
[1] Heneghan J.: The National Capital Commission (the defendant) brought a motion for summary judgment seeking dismissal of the claims advanced against it by the estate of the late Emerson Woodburn, Edith Woodburn and Douglas Woodburn (the plaintiffs).
[2] The motion for summary judgment followed the commencement of an action by the plaintiffs against the defendant in which the plaintiffs sought, among other things, a declaration that they are entitled to acquire certain land situate in the township of Gloucester, regional municipality of Ottawa-Carleton. The plaintiffs also seek an order directing the reconveyance of these lands to them upon such terms and conditions as the as the Court may set.
[3] The statement of claim details the prayer for relief as follows:
(a) a declaration that the plaintiffs are entitled by law and by right to acquire title to those lands situated in the city of Gloucester in the province of Ontario and more particularly described as Part Lot 21, Concession 3 (Ottawa Front), geographic township of Gloucester, Regional Municipality of Ottawa-Carleton, designated as Parts 1, 2, 3 and 4 on Plan 4R-12756 being PIN No. 04351 0015 (hereinafter referred to as the land);
(b) a mandatory order that the defendant (hereinafter referred to as the NCC) convey title to the lands to the plaintiffs in accordance with and upon such terms and conditions as may be determined by this Honourable Court;
(c) a declaration that the NCC holds title to the lands as trustee, or alternatively as a constructive trustee, for and on behalf of the plaintiffs;
(d) an interim and interlocutory injunction restraining the NCC, its servants agents and employees, and any other person on its behalf, from selling, disposing, alienating or in any way dealing with the land in any other manner whatsoever until the trial or other disposition of this action or any further or other order of this court;
(e) damages including punitive and exemplary damages of $1,000,000 in addition to rescission;
(f) prejudgment and postjudgment interest as provided by the Courts of Justice Act [R.S.O. 1990, c. C.43];
(g) costs as between solicitor and client; and
(h) such further and relief as may seem just.
Facts
[4] The land in question is legally defined as Part Lot 21, Concession 3 (Ottawa Front), geographic township of Gloucester, Regional Municipality of Ottawa-Carleton, designated as Parts 1, 2, 3 and 4 on Plan 4R-12756 being PIN No. 04351 0015 (the land).
[5] The area of this land is 21 acres. It had been part of the Woodburn farm and was expropriated in 1961 by the National Capital Commission from Emerson Woodburn for inclusion in the Greenbelt which surrounds the National Capital Region. The total area of land expropriated was some 56-57 acres.
[6] In July 1963, the National Capital Commission completed its acquisition of title to the land when Emerson Woodburn and Edith Woodburn signed a “Ninety Day Purchase-Compensation Option”. In October 1963, Emerson Woodburn granted the property by deed to the National Capital Commission for the consideration of $110,000. The deed specifically provided that Edith Woodburn barred her dower in the land.
[7] Following the defendant’s expropriation of the said land, the plaintiffs continued to occupy it as tenant farmers pursuant to a series of leases created with the defendant. The last of these leases was a 20-year lease which ended on March 31, 1994.
[8] In 1988, Mr. Emerson Woodburn died. The sole beneficiary of his estate was Edith Woodburn.
[9] In the early 1990s, the defendant completed a study and determined that the land which was expropriated from the late Emerson Woodburn was no longer necessary for the Greenbelt. The land was declared surplus by the defendant. Following this declaration, the plaintiffs unsuccessfully initiated various attempts to reacquire the land from the defendant.
[10] In 1997, the National Capital Commission sought to have the land severed and re-zoned for commercial use. The plaintiffs unsuccessfully contested the decision to rezone the land, including an appeal to the Ontario Municipal Board. That appeal was heard in 1998 and again the plaintiffs were unsuccessful. In 1998, the severance and the rezoning were confirmed. The land was rezoned from institutional government to highway commercial.
[11] At this time, Mr. Douglas Woodburn, who is the son of the late Emerson Woodburn, again notified the defendant that he wished to reacquire the land in order to farm it, but his efforts were to no avail. In December, 1998 the Chair of the National Capital Commission informed Mr. Douglas Woodburn that if he wished to reacquire the land then he would have to bid for the land like any other interested party.
[12] In or about February 1999, the defendant called for bids to purchase the lands as rezoned. An agreement was made between the National Capital Commission and a developer for the sale and purchase of the land. The offer to purchase came from 938966 Ontario Inc. a subsidiary of Canril Corporation and was for the amount of $6,702,000. The Woodburn family did not submit a bid.
[13] Following the sale of the land, Edith Woodburn commenced an action in the Superior Court of Ontario claiming an interest in the land. On August 4, 1999 a certificate of pending litigation was issued and registered against title to the land. The certificate was issued on an ex parte basis.
[14] The defendant successfully sought an order vacating the certificate, and on November 8, 1999, the Ontario Superior Court issued a decision setting aside the certificate of pending litigation [[1999] O.J. No. 4286 (QL)]. In his written reasons, Mr. Justice Panet granted the relief sought by the defendant. Mr. Justice Panet found that the plaintiffs did not have an interest in the land for the purpose of maintaining the certificate of pending litigation. The plaintiffs have appealed that decision.
The Plaintiffs Claim an Interest in Land
[15] The expropriation proceedings in 1961 were taken pursuant to the National Capital Act, S.C. 1958, c. 37, section 13. That section provides as follows:
13. (1) The Commission may, with the approval of the Governor in Council, take or acquire lands for the purpose of this Act without the consent of the owner, and, except as otherwise provided in this section, all the provisions of the Expropriation Act, with such modifications as circumstances require, are applicable to and in respect of the exercise of the powers conferred by this section and the lands so taken or acquired.
(2) For the purposes of section 9 of the Expropriation Act the plan and description may be signed by the Chairman or General Manager of the Commission.
(3) The compensation for lands taken or acquired under this section, or for damage to lands injuriously affected by the construction of any work by the Commission, shall be paid by the Commission as though the lands were acquired under the other provisions of this Act, and all claims against the Commission for such compensation or damage may be heard and determined in the Exchequer Court of Canada in accordance with sections 46 to 49 of the Exchequer Court Act; but nothing in this subsection shall be construed to affect the operation of section 34 of the Expropriation Act.
[16] Section 13 of the National Capital Act, supra, incorporates by reference the Expropriation Act, R.S.C. 1952, c. 106. Subsection 35(1) of the Expropriation Act, supra, states that title to expropriated lands will be vested in Her Majesty. Subsection 35(1) provides:
35. (1) All lands, streams, watercourses and property acquired for any public work shall be vested in Her Majesty and, when not required for the public work, may be sold or disposed of under the authority of the Governor in Council.
[17] It is important to note for the purposes of the motion for summary judgment that the plaintiffs do not contest the legality of the expropriation proceedings which commenced in 1961. Rather, they claim to have an interest in the land arising both from common law and statute, specifically a right to reacquire those expropriated lands which are no longer in use by the National Capital Commission as part of the Greenbelt.
[18] With respect to the common law right, the plaintiffs rely on the words of Mr. Justice Gibson in National Capital Commission v. Munro, [1965] 2 Ex. C.R. 579, at page 645:
In my opinion, all of these uses are within the legal competence of the National Capital Commission under its power contained in s. 13 of the National Capital Act provided any acquisition of lands is made in good faith for the purposes set out in s. 10(1). On the abandonment of such purposes, if such abandonment is not part of a colourable scheme, the National Capital Commission, subject to the provisions of s. 14, may sell such lands for private use and no right or interest remains in the original owners. There is also no obligation on the part of the National Capital Commission to continue any particular use of lands after the acquisition of the same by it pursuant to s. 13 of the Act, and therefore no cause of action against the National Capital Commission can arise at any time in favour of the original owners of any lands by reason of the abandonment by the latter, in good faith, of any use which constituted the original purpose for the acquisition of such lands. [Emphasis added.]
The plaintiffs submit that this passage, by inference, gives rise to a common law right to reacquire land upon abandonment of the original purpose for which it was expropriated.
[19] Secondly, the plaintiffs assert a statutory right pursuant to The Lands Clauses Consolidation Act, 1845 (U.K.), 8 & 9 Vict., c. 18, section 128. This section provides as follows:
CXXVIII. Before the Promoters of the Undertaking dispose of any such superfluous Lands they shall, unless such Lands be situate within a Town, or be Lands built upon or used for Building Purposes, first offer to sell the same to the Person then entitled to the Lands (if any) from which the same were originally severed; or if such Person refuse to purchase the same, or cannot after diligent Inquiry be found, then the like Offer shall be made to the Person or to the several Persons whose Lands shall immediately adjoin the Lands so proposed to be sold, such Persons being capable of entering into a Contract for the Purchase of such Lands; and where more than One such Person shall be entitled to such Right of Pre-emption such Offer shall be made to such Persons in succession, one after another, in such Order as the Promoters of the Undertaking shall think fit.
[20] The plaintiffs argue that this Imperial legislation has been incorporated into Canadian law by virtue of the Colonial Laws Validity Act, 1865 (U.K.), 28 & 29 Vict., c. 63. The plaintiffs further submit that this section remains part of Canadian law as it has not been affected by the Statute of Westminster, 1931, 1931 (U.K.), 22 Geo. V, c. 4 [R.S.C., 1985, Appendix II, No. 27].
Colourable Scheme & Statutory Authority of National Capital Commission
[21] The plaintiffs also submit that the words of Justice Gibson in Munro, supra, contemplate the reacquisition of expropriated land by the original owner upon abandonment when abandonment forms part of a colourable scheme.
[22] The plaintiffs maintain that the actions of the National Capital Commission in this case, in selling surplus lands for a significant purchase price, raise the possibility of participation by the Commission in a colourable scheme which would be contrary to the purposes of the Act.
[23] Finally, the plaintiffs claim that the defendant acted outside its authority in rezoning the land and selling it. They also allege that there are serious policy considerations raised by the actions of the National Capital Commission which has been granted, by statute, the extraordinary right to expropriate private lands for particular purposes. In support of this argument the plaintiffs refer to subsections 10(1) [as am. by R.S.C., 1985 (4th Supp.), c. 45, s. 3] and 10(2) of the National Captial Act [R.S.C., 1985, c. N-4].
[24] Subsection 10(1) identifies the purposes of the National Capital Commission as follows:
10. (1) The objects and purposes of the Commission are to
(a) prepare plans for and assist in the development, conservation and improvement of the National Capital Region in order that the nature and character of the seat of the Government of Canada may be in accordance with its national significance; and
(b) organize, sponsor or promote such public activities and events in the National Capital Region as will enrich the cultural and social fabric of Canada, taking into account the federal character of Canada, the equality of status of the official languages of Canada and the heritage of the people of Canada.
[25] Subsection 10(2) describes the ways in which the National Capital Commission can act in the discharge of its statutory authority:
10. …
(2) The Commission may, for the purposes of this Act,
(a) acquire, hold, administer or develop property;
(b) sell, grant, convey, lease or otherwise dispose of or make available to any person any property, subject to such conditions and limitations as it considers necessary or desirable;
(c) construct, maintain and operate parks, squares, highways, parkways, bridges, buildings and any other works;
(d) maintain and improve any property of the Commission, or any other property under the control and management of a department, at the request of the authority or Minister in charge thereof;
(e) cooperate or engage in joint projects with, or make grants to, local municipalities or other authorities for the improvement, development or maintenance of property;
(f) construct, maintain and operate, or grant concessions for the operation of, places of entertainment, amusement, recreation, refreshment, or other places of public interest or accommodation on any property of the Commission;
(g) administer, preserve and maintain any historic place or historic museum;
(h) conduct investigations and researches in connection with the planning of the National Capital Region;
(i) generally, do and authorize such things as are incidental or conducive to the attainment of the objects and purposes of the Commission and the exercise of its powers.
[26] The mandate of the National Capital Commission is specifically related to the “development, conservation and improvement of the National Capital Region”. The term “National Capital Region” is defined in the relevant legislation as follows:
2. …
…
“National Capital Region” means the seat of the Government of Canada and its surrounding area, more particularly described in the schedule.
Analysis
[27] Before embarking on the analysis of the motion for summary judgment, it must be kept in mind that the plaintiffs are not seeking the judicial review of the decision of the defendant to either declare the land surplus, rezone the land or sell the land. Instead, the plaintiffs have sought relief based on the legal arguments that they retain an interest in land.
[28] For the purposes of the present motion, I must determine, having regard to the principles for summary judgment stated in Granville Shipping Co. v. Pegasus Lines Ltd., [1996] 2 F.C. 853 (T.D.) whether there is a genuine issue for trial. This case provides a detailed list of the factors to be considered upon a motion for summary judgment.
[29] I would also note that more recently, the Federal Court of Appeal in Kanematsu GmbH v. Acadia Shipbrokers Ltd., [2000] F.C.J. No. 978 (QL) made the following comments at paragraph 13 which are also relevant to the present matter in terms of the evidence that must be adduced on a motion for summary judgment:
The decision of this Court in Feoso Oil Ltd. v. The Sarla, interpreting the Federal Court Rules, is a leading authority on the subject of summary judgment. It has mandated that on a motion for summary judgment both sides must file such evidence as is reasonably available to them on the issues pleaded and which could assist the Court to determine if there is a genuine issue for trial. The responding party cannot rest on its pleadings and must give specific facts showing there is a genuine issue for trial.
[30] Expropriation is a creature of statute. The National Capital Commission has been granted that power by Parliament. On the evidence before me, it appears that the statutory requirements covering the expropriation of the Woodburn lands have been met. Furthermore, the plaintiffs have clearly said that they do not contest the validity of the expropriation. Their quarrel is with the disposition of the expropriated land now that the National Capital Commission has declared the land surplus to its needs.
[31] There is no provision in either the National Capital Act, supra or in the Expropriation Act, supra which addresses the situation here, that is the legal consequences of a decision by the expropriating authority to abandon the purpose for which the land was expropriated.
[32] Section 24 of the Expropriation Act, supra deals with the situation where the expropriating authority abandons the expropriated lands, but there is no evidence that such abandonment occurred here. In this case, the National Capital Commission has abandoned the use it formerly made of the land but it has not abandoned the land itself.
[33] I do not accept the arguments made about a common law right to reacquire the land which right is said to arise by inference from the remarks of Mr. Justice Gibson in National Capital Commission v. Munro, supra. Indeed, I interpret the comments of Mr. Justice Gibson to mean that the National Capital Commission can abandon the purposes for which land was expropriated, as long as the abandonment is not part of a colourable scheme.
[34] The words “colourable scheme” are problematic as their meaning is ambiguous. They suggest duplicity and impropriety. In the context of this case, the plaintiffs argue that the planned disposition of the former Woodburn lands is part of a colourable scheme. However, there is no evidence that this is the case.
[35] The basis for alleging participation by the National Capital Commission in a “colourable scheme” lies in the facts about the initial acquisition of the land and its current proposed disposition. In 1961, the National Capital Commission expropriated a block of land comprising some 56-57 acres which had been farmed by the Woodburn family since 1945. The compensation for the expropriation was $110,000.
[36] The National Capital Commission did not enter into physical possession of the land but leased it to Emerson Woodburn who continued to farm it. The land was used for farming until 1994 when the National Capital Commission refused to renew the lease.
[37] In 1999, subsequent to applications for severance and rezoning, a portion of the expropriated land was the subject of an agreement for sale for the sum of $6,702,000. The proposed use of the land was for commercial use. The purpose for which it was expropriated was for inclusion in the Greenbelt around the National Capital Region, a buffer against urban sprawl.
[38] The substantial price which the National Capital Commission will receive from the sale of the land, together with its proposed use in commercial development after nearly 40 years of its use as part of the Greenbelt, may invite speculation. However, in the absence of evidence that the expropriation proceedings in 1961 were motivated by an intention to bank land holdings in anticipation of a future sale for financial gain, I am not prepared to conclude that the National Capital Commission is party to a colourable scheme.
[39] Similarly, I am not persuaded that the plaintiffs can rely upon The Lands Clauses Consolidation Act, 1845, supra, as supporting their argument that they are entitled, by that statute, to a pre-emptive right to reacquire the expropriated lands.
[40] In my view, section 128 of that statute, if applicable, only confers on an affected landowner a first option to repurchase the expropriated lands, subject to other provisions of that statute. While the plaintiffs here were not given a first option to purchase, they were certainly at liberty to participate in the bidding process. The plaintiffs chose not to do so.
[41] The remaining argument advanced by the plaintiffs relates to the policy implications of the actions of the National Capital Commission in selling expropriated lands to generate monies for its continuing operations. This question presents the additional inquiry whether the rezoning and selling of the said land fall within the statutory authority of the National Capital Commission.
[42] The question of whether the defendant is or is not acting within its statutory authority does not affect the ultimate issue which is at stake in the present motion for summary judgment. Even if the defendant was acting outside of its statutory authority, and I emphasize that I am making no finding in that regard, the fact remains that the expropriation of the land was legal and based on Munro, the defendant is within its legal competence to change the purpose for which the said land was expropriated. There is also no mechanism in Canadian law by which the land in this case would revert to the Woodburns, save perhaps where the facts of the case merit an application of the comments made by Justice Gibson in Munro, supra.
[43] Accordingly, based on the current state of the law with regard to expropriation and summary judgment as well as on the pleadings on which this motion is based, I am of the opinion that the motion for summary judgment should be granted. I am not persuaded that the plaintiffs have shown that there is a genuine issue for trial in this case.
[44] However, I would close by saying that I am not unsympathetic to the situation in which the Woodburns find themselves. Their land was expropriated against their will in order to create the Greenbelt. The land itself remained farmland as the defendant entered into a series of leases with the Woodburns. Then, pursuant to a study, the land was declared surplus.
[45] Considering the fact that the Greenbelt was conceived as a “buffer zone” against encroaching urban sprawl, the steps taken by the National Capital Commission to declare the land surplus and to obtain a rezoning of the land from institutional government to highway commercial seem more consistent with accommodation of urban sprawl, rather than resistance to the erosion of green areas. When one considers this, in combination with the fact that the sale of the land generated a profit for the National Capital Commission of $6,7 million dollars, one cannot help but question the motivation of the defendant in declaring the land surplus, rezoning the land and selling it. Accordingly, although the conclusion in law is inevitable, one cannot help but feel considerable sympathy for the Woodburns.
ORDER
[46] The motion for summary judgment is granted. Having regard to the circumstances of this case, there is no order as to costs.