This month, in Sommet Prestige Canada inc. v. Ville de Saint-Bruno-de-Montarville, the Superior Court rendered a decision concluding at the disguised expropriation of the Plaintiffs, while confirming the application of the Supreme Court of Canada’s decision in Annapolis Group Inc. v. Halifax Regional Municipality (hereinafter “Annapolis“), rendered on October 21, 2022,  to Quebec law.

In the Sommet Prestige Canada Inc. decision, the Plaintiffs, owners of a 6-hectare lot called the Hirondelles woodland (“le boisé des Hirondelles”) and zoned residential, planned to subdivide the lots in order to build 30 properties. After several years of meetings and collaborative exchanges between the parties, a municipal works agreement was reached, the City made regulatory changes for the project, and the plaintiffs filed a subdivision plan.

However, following a citizen opposition and municipal elections, the new council and the new mayor, formally opposed to the Plaintiffs’ project, took several steps to put an end to it, including amending the urban planning by-laws applicable to the Plaintiffs’ land, in order to identify the Hirondelles woodland as a “protected natural environment”. Thus, despite the residential use of the woodland, the tree cutting standards and conditions imposed by the City’s by-laws had the effect of preventing any reasonable use of the land (par. 72).

Following a review of the applicable case law on disguised expropriation, including the Quebec Court of Appeal’s Dupras decision and the Supreme Court of Canada’s Annapolis decision, the Superior Court first reiterated the key principle that “a plaintiff alleging prejudice as a result of the adoption of a regulation may, at his or her sole discretion, seek damages without first attacking the validity of the regulation giving rise to the alleged injury, and that he or she may choose without constraint between these two types of remedies” (our translation, para. 46). Thus, contrary to the City’s claim, the Plaintiffs did not “have to obtain or seek the nullity or invalidity of the regulation in order to claim compensation” (para. 56).

In order to obtain compensation, the Plaintiffs had to show that the effects of the regulation amounted to a disguised expropriation. In particular, the Superior Court noted from the Supreme Court of Canada’s decision Annapolis that “if the regulation eliminates all reasonable uses of the property, there is disguised expropriation” (para. 61), and that this principle, being an authority for the lower courts, applies to Quebec law in this regard (para. 69). In the Sommet Prestige Canada Inc. decision, the effect of the regulations on the land was to permit only park, bicycle path, maple culture or silviculture uses, which did not represent a reasonable use of the land at all, especially given the residential zoning (para. 75).

Therefore, although the Act respecting land use planning and development allows municipalities to regulate the uses that may be carried on within its territory and the right to property is not absolute, the power to regulate cannot prohibit any reasonable use without any compensation, since the right to property is one of the pillars of our system of justice (para. 84).

We note that the City plans to appeal this decision. To be continued…

If you have any questions regarding disguised expropriation, please do not hesitate to contact our team.