While Save Sandy Beach activists, the Town of Hudson and developer Nicanco Holdings are waiting for an Appeals Court ruling on Nicanco’s right to backfill, a lower court decision involving a proposed project in South-Shore St. Bruno is setting precedent for municipalities and developers alike.
In a nutshell, it says municipalities have the authority to remove the right to develop — but developers have an equal right to market-value compensation.
The St. Bruno case has its roots in a 2006 land deal. Sommet Prestige Canada, a consortium whose majority owner is Senator Paul Massicotte, purchased six hectares of forested land adjacent to Mont Saint-Bruno provincial park. Working with the city over the next six years, Sommet drew up and submitted subdivision and architectural plans for Le Boisé des Hirondelles, a high-end 31-home development on large lots and maximum 40% footprints. Sommet would pay for all infrastructure — including close to $500,000 to the city to cover connection costs.
In May 2012, St. Bruno’s council approved the project, conditional on issuance of an Article 32 certificate of authorization from the environment ministry and the removal of one lot where wild ginseng grows in abundance.
While awaiting the Art. 32 CA — which hasn’t been issued to this day — citizen opposition to the project grew. Most wanted the forest maintained in its natural state. One group filed an injunction request that would halt any development. It was refused, with the judge pointing out that the action was premature because the project lacked ministerial approval.
November 2013 saw the election of a new mayor and council whose platform adamantly opposed the project. The new administration adopted a conservation plan and a strategic vision that would include a rewritten master plan and a wholesale bylaw revision.
In July 2014, the agglomeration of Longueuil — St. Bruno’s regional government — adopted an interim control resolution (RCI) designating Sommet’s woodlot as an ‘ecosystem of interest,’ thus limiting tree cutting and freezing any development. Sommet, still without a CA, filed a memo with the regional government reminding them of the development agreement and demanding that the ecosystem-of-interest designation be retracted. Over St. Bruno’s objections, the agglomeration changed the designation to ‘area to be studied’ while maintaining a temporary freeze on development.
December 2017: St. Bruno designates the woodlot as a protected natural area and adopts revised zoning and tree cutting bylaws which, in Sommet’s opinion, blocks any development. The developer launches legal action with the aim of striking down the city’s bylaws and demanding $15 million in compensation for what it terms disguised expropriation.
Almost two years went by before the sides agreed to split Sommet’s action in two. The compensation question would wait while the courts decided whether St. Bruno’s actions constituted disguised expropriation.
In February 2020, MELCC finally delivered its decision on Sommet’s infrastructure CA: rejected on grounds the project couldn’t proceed with St. Bruno’s bylaw revisions. Sommet’s response was to take the ministry before the administrative tribunal (TAQ). TAQ’s ruling: action suspended while Sommet’s complaint is litigated.
August 2020: St. Bruno petitioned the court to include Quebec’s solicitor-general in further actions on the grounds that Quebec should be on the hook in further disguised-expropriation proceedings. Likewise suspended while Sommet’s complaint is litigated.
That same month, Sommet modified its filing to demand annulment of MELCC’s CA refusal and re-examination in light of the proceedings underway.
On April 28, 2022, the Montreal Metropolitan Community piled on, adopting its own RCI identifying large sections of the Boisé as a “milieu terrestre d’interêt metropolitain.” Sommet’s response was to file another legal challenge. This, too is suspended pending the outcome of the original action.
The long-awaited showdown played out before Quebec Superior Court Lukasz Granosik over seven days in late November and early December 2022. Lawyers for the developers opened with a surprise gambit — Sommet wanted the court to decide whether this was a case of disguised expropriation. The developer no longer wished to challenge St. Bruno’s right to regulate development or protect the environment. The essence of their argument was that the end result effectively removed their right to develop, allowing them to demand compensation for that loss.
St. Bruno’s legal team objected to making disguised expropriation the key issue. They argued it should be subordinate to the legality of the process, and therefore outside the case at hand.
Ruling: disguised expropriation will cost
In his March 7/23 judgment, Judge Granosik found for the plaintiff and rejected St. Bruno’s contention that the disguised-expropriation issue shouldn’t be part of the action. At the heart of his 35-page ruling: Article 952 of the Quebec Civil Code.
No owner may be compelled to transfer his ownership except by expropriation according to law for public utility and in return for a just and prior indemnity.
“Given the evidence, I conclude that despite having maintained the residential zoning for Boisé des Hirondelles, the standards for tree cutting and regulations imposed by the municipality not only block any development, but any reasonable usage for this property […] this reglementation represents excessively severe norms for preserved natural areas.”
Judge Granosik recognized the municipality’s right to regulate development, particularly in environmentally sensitive areas. “It’s undeniable that municipalities, notably through their zoning powers, play an ever greater role in environmental management, whether in the protection of wetlands, or in this case, forest cover.”
However, that evolving right isn’t balanced by recognition of the right to property enshrined in Quebec’s Civil Code. “It is equally uncontestable that protection of the environment in all its dimensions constitutes a publicly useful cause, that as our court has affirmed, may have the effect of imposing an extra burden on the landowner. It remains, subject to legislation which currently does not exist, that when the burden results in a disguised expropriation, the cost of this measure should not fall on a sole landowner.”
Likewise, Judge Granosik rejected St. Bruno’s argument that nothing blocks the developer from selling the land as a greenspace.
“From this perspective, is this an example of suppression of “all reasonable usages of the property”? Effectively, this becomes the only applicable test, not its taxable value. Even if St. Bruno eloquently demonstrated of the existence of a market dedicated to the protection of natural areas and its ecological inhabitants, that isn’t the issue. Whether the Boisé des Hirondelles could be sold to specific organizations for a sum doubtless much less than its evaluation or its fair market value, is irrelevant. Uses are what count. And the uses permitted by the current regulation are insufficient to constitute reasonable usage.”
Unchallenged evidence showed that even if this property could be used as a sugarbush or managed woodlot, annual revenues were estimated at less than $1,000 — far below the acquisition value ($2 million) or the annual tax bill ($30,000). Evidence presented at the hearing established that organizations buying land for conservation purposes won’t pay more than $30,000 per hectare. Likewise, Saint Bruno’s contention that the owners could defray their costs with biking or walking trails, a community garden or urban agriculture were unreasonable, given the proximity of a provincial park and the residential zoning.
The judge is sympathetic to Saint-Bruno’s environmental protection concerns. Everyone wants to live surrounded by protected spaces, in harmony with nature, in the midst of dynamic ecosystems capable of providing eco-corridors for flora and fauna at risk, he writes. The public’s concern for the woodlot’s wild ginseng colonies is well founded and the current administration was within its rights to enact bylaws in keeping with that and other concerns. (Among the jurisprudence cited in his ruling is the 2001 ruling upholding the Town of Hudson’s famous pesticide ban.)
Granosik was satisfied that the urban planning measures adopted in St. Bruno were the result of a process that included analyis, consultation and deliberations by a newly elected administration whose electoral platform included stricter environmental controls. Moreover, the planning measures being challenged by the plaintiffs were in line with regional orientations and within the competencies of the municipal council.
But, he goes on, the city is wrong in arguing that it has the power to expropriate without compensation. “…such an extraordinary shift in our judicial paradigm — the possibility of being dispossessed without compensation as the result of a decision by the collectivity when the right to property constitutes one of the three columns in our judicial system, requires the legislator’s explicit language, which I do not find in this case.”
What I find significant is that this legislative-shortcoming argument has similarities to that invoked by Sandy Beach developer Nicanco Holdings in its case against the provincial environment ministry (MELCC). Recall that Nicanco is one of three developers whose certificates of authorization were annulled on the pretext that they hadn’t started work within a prescribed delay. As I noted in Another legal twist in Sandy Beach saga (thousandlashes.ca, Oct. 1/22) Superior Court judge David Collier restored Nicanco’s right to backfill Sandy Beach wetlands because the environment ministry failed to include retroactivity in a 2017 modification to its environmental protection act.
As I wrote in Sandy Beach: leave to appeal, Quebec appealed Collier’s ruling, effectively nullifying the certificates of authorization for Sandy Beach and two other developments. The appellate court heard all three parties on March 22. No date has been given for rulings.
Meanwhile, there’s growing anxiety among those counting on Quebec’s appeal to quash the Sandy Beach project once and for all.
As La Presse reported this past Friday, the Centre québécois du droit de l’environnement (CQDE), Nature Hudson and the Fonds d’héritage pour l’environnement are asking Quebec environment minister Benoit Charette to exercise his powers to determine whether Nicanco supplied the ministry with false data on the presence of endangered species and additional wetlands in Sandy Beach.
Specifically, they want the ministry to consider the contents of a 2021 study by TerraHumana Solutions and field notes taken by an environment ministry analyst. Hudson Mayor Chloe Hutchison said during a council meeting last year that the TerraHumana study was not receivable by the municipality because it was conducted on private land without authorization.
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