Schrager, Cotnam, Hardy

Appeal from a judgment of the Superior Court granting an action in nullity of municipal by-laws and to claim an indemnity for disguised expropriation. Allowed; the judgment is set aside in part and the case is referred back to the trial judge.

The respondents had approval for a residential subdivision on a wooded lot located on the appellant city’s territory. The election of a new municipal council, however, led to the adoption of a series of amendments to the municipal by-laws which, according to the respondents, made any residential subdivision of the land impossible. The respondents feel that the effect of the by-laws is akin to an expropriation within the meaning of art. 952 of the Civil Code of Québec (S.Q. 1991, c. 64) (C.C.Q.), the respondents claimed an indemnity for disguised expropriation. The trial judge agreed. The appeal raises questions about the interpretation of paragraph 16 of s. 113 of the Act respecting land use planning and development (CQLR, c. A-19.1).

After the appeal had been initiated, the National Assembly of Québec enacted An Act to amend the Act respecting municipal taxation and other legislative provisions (S.Q. 2023, c. 33). The purpose of sections 245 to 245.6 of the Act respecting land use planning and development, introduced by this law, was to regulate a municipality’s obligation to indemnify owners when measures adopted under the Act respecting land use planning and development have an expropriating effect. These provisions have come into force and the effect of the legislative amendments on the outcome of the appeal must be examined before the grounds of appeal are considered.

In s. 245 of the Act respecting land use planning and development, the legislator set out the circumstances in which an act performed under it entails an obligation to pay an indemnity in accordance with art. 952 C.C.Q. By doing so, the legislator redefined the analytical framework for determining whether it is “possible to make reasonable use of the immovable” while rejecting the interpretation of the applicable principles accepted in the case law on which the judge had relied. Indeed, the legislator specified that s. 245 of the Act was declaratory, thereby clearly expressing the intention to grant it a retroactive effect so that the new regime was immediately applicable.

The enactment of s. 245 of the Act respecting land use planning and development radically changes the outcome of the appeal for all the parties involved. The judge’s conclusion, based on the former law, that the regulatory measures adopted by the appellant city precluded [translation] “any reasonable use” of the respondent’s land, could not have taken the new applicable analytical framework into consideration. The interpretation of s. 245 of the Act respecting land use planning and development may seal the outcome of the dispute. There is no definition of [translation]  “high economic value” in the Act, but it is at the heart of the new legal framework. The interest of justice and the exceptional circumstances resulting from the enactment of s. 245 of the Act require the case to be returned to the court of first instance so that the judge can reassess it in light of the parameters set out in this new provision.

Legislation interpreted: s. 245 of the Act respecting land use planning and development

Text of the decision: http://citoyens.soquij.qc.ca