Costello and Dickhoff v. City of Calgary, [1983] 1 SCR 14

Supreme Court of Canada

Costello and Dickhoff v. City of Calgary, [1983] 1 S.C.R. 14

Date: 1983-01-25

Elizabeth Jean Costello and Mary Ann Dickhoff Appellants;

and

The City of Calgary Respondent.

File No.: 16559.

1982: May 12; 1983: January 25.

Present: Dickson, McIntyre, Chouinard, Lamer and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ALBERTA

Municipal law—Expropriation—Subject land held in joint tenancy—Notice requirement to one owner not met—Requirement stipulated by enabling statute—Whether or not expropriation by-law void or merely voidable—If voidable, whether or not void in circumstances—The Expropriation Procedure Act, R.S.A. 1970, c. 130, ss. 22, 23, 24, 25, 26—The Municipal Government Act, R.S.A. 1970, c. 246.

Appellants were the registered owners, as joint tenants, of land respondent claimed to have expropriated by by-law. One appellant, while claiming not to have been properly served, attended the council meeting when the expropriation by-law was presented. The other appellant, a non-resident of Alberta, was not served with notice within the time limits prescribed by statute. The issue here was whether the city’s failure to comply strictly with the service requirement of one of the two owners rendered the by-law void or merely voidable, and if the latter, whether the by-law should be declared void in the circumstances.

Held: The appeal should be allowed.

Where a power is given by statute to a municipal government to expropriate individual interests in land, the statutory conditions for the exercise of that power must be strictly complied with. Here, the expropriation by-law was void for non-compliance with the mandatory provisions relating to service of notice of meeting and therefore beyond the reach of the curative provisions of both The Expropriation Procedure Act and The Municipal Government Act. A line must be drawn to protect the citizen. Even though the departure from the statutory requirements was not significant, that line must be placed where the legislature chose to put it and not where individual judicial discretion might fix it on a case to case basis.

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Re Huson and South Norwich (1892), 19 O.A.R. 343, affirmed 21 S.C.R. 669; Re Ostrom and Township of Sidney (1888), 15 O.A.R. 372; In Re McCrae and Village of Brussels (1904), 8 O.L.R. 156; Township of Scarborough v. Bondi, [1959] S.C.R. 444; Wiswell et al. v. Metropolitan Corporation of Greater Winnipeg, [1965] S.C.R. 512; McDougal et al. v. Harwich Tp., [1945] 2 D.L.R. 442; Hopper v. Municipal District of Foothills No. 31 and Lancaster, [1976] 6 W.W.R. 610; St. Peter’s Evangelical Lutheran Church v. Ottawa, [1982] 2 S.C.R. 616, considered; City of Victoria v. MacKay (1918), 56 S.C.R. 524, referred to.

APPEAL from a judgment of the Alberta Court of Appeal (1981), 123 D.L.R. (3d) 256 [note] dismissing an appeal from a judgment of Medhurst J. Appeal allowed.

B.A. Crane, Q.C., A. Bloomenthal and J. Hanbury, for the appellants.

Adel A. Abougoush and Aaron Rynd, for the respondent.

The judgment of the Court was delivered by

MCINTYRE J.—This appeal involves consideration of the validity of By-law No. 8667 of the City of Calgary, passed on November 20, 1972, which expropriated certain real property of the appellants. They commenced proceedings for a declaration that the By-law is void and of no force and effect and that they are entitled to have the land re-registered in their names, as owners. The action was commenced in February of 1976, some three years and three months after the expropriation. It was dismissed at trial in the Court of Queen’s Bench of Alberta and on appeal was dismissed in the Alberta Court of Appeal. It comes to this Court by leave granted June 15, 1981.

Prior to the expropriation, the a pellants were the registered owners, as joint tenants, of the lands involved, which consisted of two parcels, one near the intersection of 50th Avenue and Macleod Trail South-East and the other, a smaller parcel, located on the corner of Macleod Trail and 50th Avenue.

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The appellants held the lands in trust for themselves and other members of the family of W.F. Costello, deceased, the husband of the appellant Costello and the father of the appellant Dickhoff. They operated a motel on the larger parcel and prior to the expropriation they engaged an architect who prepared plans for a development which would have involved the use of both sites in the motel operation and a substantial enlargement of the operation. The development did not go forward because of the expropriation. The statutory provisions governing expropriation by municipalites in Alberta are set out in Part 2 of The Expropriation Procedure Act, R.S.A. 1970, c. 130. Sections 22 to 25 are set out hereunder:

22. (1) Where a municipality is empowered to acquire land by expropriation, the land may be expropriated in the manner prescribed by this Part and not otherwise.

(2) Notwithstanding subsection (1), where a municipality owns or operates a utility and desires to expropriate land for the purpose of its pipe line or power line or installations incidental thereto it may, in the alternative, expropriate the land in the manner prescribed by Part 3 as if it were a company within the meaning of Part 3.

23. Nothing in this Part shall be construed as empowering a municipality to extend the boundaries of the municipality to include any land situated outside the municipality.

24. (1) Where a municipality desires to expropriate land for any purpose permitted by the authorizing Act, the municipality shall cause to be prepared and filed in the office of the secretary-treasurer or clerk of the municipality a plan of the land it proposes to expropriate.

(2) After filing the plan the municipality shall cause to be served upon the owner of the land to be expropriated a notice in writing, which shall set forth;

(a) a description of the parcel and of the estate or interest to be acquired therein;

(b) the purpose for which the land is to be used by the municipality;

(c) the amount that the municipality is ready to pay for the land to be expropriated;

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(d) the date, time and place at which a by-law will be first presented to the council of the municipality to authorize the expropriation;

(e) that a plan of the land to be expropriated is on file in the office of the secretary‑treasurer or clerk of the municipality and that the plan is available for inspection during specified reasonable hours;

(f) that the owner is entitled, before enactment of the by-law, to make representations to the municipality and set forth his reasons why the land should not be expropriated;

(g) that the amount of the compensation for the land will be ascertained and fixed by the Public Utilities Board, at a future date.

(3) A notice to an owner under subsection (2) may also set forth the amount the municipality is prepared to pay as damages for injurious affection but the inclusion of that amount in the notice

(a) does not bind the municipality in the event that the amount is not accepted by the owner, and

(b) does not constitute an admission by the municipality that any land or interest therein will be injuriously affected.

(4) The notice shall be served upon the owner not less than two weeks preceding the date that the by-law authorizing the municipality to expropriate the land is first presented to the council of the municipality.

(5) When the owner is not resident in Alberta, or his present address is unknown, the notice shall be served upon him by mailing the same to him at his latest known address not less than three weeks preceding the date the by-law is first presented to the council of the municipality.

(6) The notice shall also be published once a week for two consecutive weeks preceding the presentation of the by-law to the council of the municipality, in a newspaper having a general circulation in the municipality.

25. (1) Before enacting a by-law authorizing the expropriation of any land, a council shall have regard to the circumstances that appear to it to be relevant and, in particular but not so as to limit the generality of the foregoing, shall have regard to

(a) the recommendation, if any, of any of its departments or consultants retained by it,

(b) the objections of any interested party, and

(c) the needs and general good of the municipality.

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(2) The by-law authorizing the expropriation shall contain

(a) a description of the land and the estate or interest therein to be acquired,

(b) the purpose for which the land is to be used by the municipality, and

(c) the authority for the payment of such compensation as may be ascertained and fixed by the Board under this Act or as may be agreed upon.

(3) A certified copy of the by-law authorizing the expropriation and a plan of survey of the land expropriated shall be registered in the land registry.

(4) Notwithstanding subsection (3), the municipality is not required to register a plan of survey of the land to be expropriated if the by-law describes the land to be expropriated by a description that is satisfactory to the Registrar of Titles of the land registry.

Section 26 provides that the effect of registration of the by-law under Part 2 is to vest title to the land in the municipality. Sections 27 to 29 deal with compensation.

The appellants advanced several grounds of appeal but, however stated, they come collectively to a simply stated proposition. The appellants assert that they were not served with notice as required in s. 24 of The Expropriation Procedure Act and that they were thus deprived of their right to be heard at the meeting of council at which the By-law was passed. Further, they contend that the importance of giving notice is such that the so-called curative provisions of The Expropriation Procedure Act and The Municipal Government Act, R.S.A. 1970, c. 246, will not protect the respondent.

It was not argued that there was any failure by the City in the preparation and filing of the plan of the land to be expropriated, as required by s. 24(1) of The Expropriation Procedure Act, nor in the form and content of the Notice of Expropriation required to be served on the owners of the land under s. 24(2). There is a dispute only as to the sufficiency of service of the notice.

Section 24(4) contains the general requirement that notice shall be served on the owner not less than two weeks preceding the date upon which the expropriation by-law is first presented to the coun-

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cil. A special requirement appears in subs. (5) for an owner who is not resident in Alberta. In such case notice must be served upon him by mailing the notice to him at his last known address not less than three weeks preceding the date the by-law is first presented to the council. Mrs. Costello lived in Calgary and the sufficiency of service upon her must be considered with reference to subs. (4). Mrs. Dickhoff at the time concerned was resident in Ontario and the sufficiency of service upon her will fall for consideration under the provisions of subs. (5). Upon disputed evidence the trial judge found that proper service was made upon Mrs. Costello. He said, in dealing with the issue:

With respect to the service of the notice on Mrs. Costello there is a conflict in the evidence as to whether or not the document was actually served. In any event there is no doubt that she was present at the council meeting when the bylaw was presented. She, as well as the architect who attended with her, was given an opportunity of speaking to council. She stated that she did not understand what the City intended to do on that day. This is difficult to believe in view of the past dealings that she had with the City. She knew that the City wanted to acquire the land and in fact her lawyer had been informed of the intention of the City to commence expropriation proceedings. She knew that it was an important meeting and she so informed her son. There was ample opportunity for her to contact her lawyer or to ask for an adjournment so that she could do so but she chose to permit the City to proceed. Furthermore, even after the bylaw was passed she chose not to take any steps to challenge its validity until March 1976.

Under all the circumstances I find that Mrs. Costello was properly served and that if there was any irregularity in the service on her it was of such a nature as to make the bylaw voidable only and not void.

The Court of Appeal did not quarrel with this finding, dismissing the appeal as it did without recorded reasons. The finding in respect of service on Mrs. Costello was based upon the evidence and, in my opinion, the Court of Appeal was right in not disturbing it.

Regarding Mrs. Dickhoff, the trial judge found that the City served her by registered mail at her

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latest known address. The City, however, did not comply strictly with the provisions of s. 24(5) of the Act in that mailing was effected on November 3, 1972, some seventeen days before the meeting, whereas the subsection required mailing not less than three weeks before the meeting. The evidence was that the notice was received at Mrs. Dickhoff’s address on November 7, 1972 and an ‘acknowledgment of receipt’ card was returned to the City confirming this fact. I agree with the trial judge in his finding that this did not amount to a compliance with the statutory requirement of service upon a non-resident of the Province of Alberta.

The factual situation then is this. Mrs. Costello was served in accordance with the Act with notice of the meeting. She was in fact present at the meeting and she had the advice and assistance of her architect, Mr. Holman, who made representations on her behalf. She also spoke at the meeting. No legal defect other than that of service is alleged against the City, and it follows then that Mrs. Costello has no cause for complaint. Mrs. Dickhoff has an equal interest in this matter with Mrs. Costello, that of a joint owner and a co-trustee for herself and other members of the Costello family. She was not served with notice of the meeting in accordance with the statute by reason of a delay by the City in mailing the notice. It was mailed on November 3 and should have been mailed on October 30 or, at the latest, October 31. She did not attend the meeting nor make any representations regarding the matter.

The questions raised in this appeal are thus limited to consideration of the sufficiency of service upon Mrs. Dickhoff and they may be framed as follows: Does the failure of the City to comply strictly with the service requirement on one of two owners render the By-law void or merely voidable and, if the By-law is merely rendered voidable, should it be declared ‘void’ in the circumstances of this case?

It was argued for the appellant that the provisions of s. 24(2) of The Expropriation Procedure Act, together with those of s. 24(4) and (5), consti-

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tute mandatory directions which amount to conditions precedent to the exercise of the power of expropriation given to the council, which must be strictly complied with. Their observance is necessary in order to enable the landowner concerned to voice such objections as he or she may have to the proposed expropriation, and in order to enable the council in reaching a conclusion on the question to observe and comply with the mandatory provisions of s. 25(1)(b) of the Act, which require that: “Before enacting a by-law authorizing the expropriation of any land, a council shall have regard to …the objections of any interested party…”

The respondent contended that there had been service upon Mrs. Dickhoff and that any deficiency in time could, at most, render the By-law voidable and not void. It was argued that the evidence disclosed that the appellants were interested only in questions of compensation, that they had delayed for more than three years in bringing their proceedings, and that in these circumstances the curative provisions should be applied to render the By-law valid.

While each case must fall for decision upon its own peculiar facts and on the particular statutory provisions involved, and while in this branch of the law earlier decided cases are rarely of direct application and assistance, some reference to the authorities will be helpful. There are many cases dealing with this question. The courts have endeavoured to avoid interference with municipal enactments by an overly strict approach to their construction, but have generally insisted upon strict compliance with enabling legislation that authorizes municipalities to exercise extraordinary powers or pass by-laws concerning taxation, expropriation, or other interference with private rights. The general principles are well-known and conveniently stated in Rogers, The Law of Canadian Municipal Corporations, (2nd ed.), [§72.1] at p. 432, where the words of Chief Justice Hagarty in Re Huson and South Norwich (1892), 19 O.A.R. 343—which case was affirmed in this Court (21 S.C.R. 669)—appear as follows:

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The courts do not always insist on a rigid adherence to statutory requirements. In 1892 Chief Justice Hagarty, after drawing a distinction between objections apparent on the face of a by-law and defects in the preliminary steps prescribed by statute stated that “the Courts from the earliest date have striven to avoid undue strictness in the insistence of exact performance of statutable formalities, where they could see that the objection did not reach either to the clear omission of some condition precedent required to be performed; where a mistake had been made in perfect good faith and with an honest purpose of obeying the law, although unintentionally deviating from its strict formal observance—where the objection was wholly technical and nothing had occurred to create a suspicion of unfair dealing, and there was no reason whatever to believe that the result of the whole proceeding had been affected”.

Thus, the courts have hesitated to impose a high standard on municipal councils in the matter of exactitude of procedure and have been slow to interfere when their enactments are clearly within the ambit of their authority and the objection is only as to the procedure followed. This does not mean to say that in every case non-compliance with a statutory formality will be overlooked. Where it is provided that a power is to be exercised in a certain manner or after a prescribed condition has been complied with, it becomes necessary to determine whether any of these limitations on the grant of authority may be disregarded without entailing a nullification of an act done otherwise than in the prescribed manner. If, in order to carry out the essential purpose of the legislature, strict compliance with the statutory provisions appears to be a condition precedent to the exercise of the power, non-observance thereof is fatal to the validity of the by-law. On the other hand, where the community will suffer if the act is rendered nugatory and the essential purpose of the enactment will not be furthered by insistence upon an exact compliance, a deviation therefrom may be excused.

The learned author went on, at p. 433, to say:

A provision in a statute enacting a formality attached to the exercise of a grant of authority by by-law must be examined in each instance to determine whether it is mandatory or merely directory and accordingly whether a by-law is void or only voidable for non-compliance therewith. As a general rule, in the exercise of extraordinary powers conferred by legislation authorizing interference by the municipality with private rights, all conditions precedent to the exercise of such powers must be

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strictly complied with prior to the performance thereof, which, if done without specific statutory authority, would be tortious. Likewise with formalities required for the exercise of taxing and expropriation powers and other powers entitling local authorities to interfere with common law rights.

The rule binding a municipal council to strict compliance with statutory requirements when exercising extraordinary powers by by-law is of long standing. In Re Ostrom and Township of Sidney (1888), 15 O.A.R. 372, it was held that, where a month’s notice was required before passage of a by-law establishing a public highway, the month was to be computed exclusive of the first and last days. Failure to meet this requirement even by one day rendered the by‑law void. Osler J.A. said, at pp. 373-74:

…the objection to the sufficiency of the notice is a very formidable one, and one which when clearly made out the court is bound to give effect to.

It is essential to the validity of a by-law establishing or stopping up a road, by which the property of private persons may be compulsorily taken or the rights of the public extinguished, that the provisions of the statute under which it is passed shall be strictly observed.

In In Re McCrae and Village of Brussels (1904), 8 O.L.R. 156, a local improvement by-law was held by the Ontario Court of Appeal to be invalid for failure to give notice by personal service of the intention of the council to undertake work even where it was admitted that the affected property owners had seen public notices conveying information regarding the nature of the work and the intention of the council to proceed with it. Moss C.J.O. said, at p. 161:

It is proper that municipalities should be held to a strict compliance with these statutory requisites, and that they should not be permitted to endeavour to cure their default by evidence of knowledge aliunde.

In Township of Scarborough v. Bondi, [1959] S.C.R. 444, the validity of a municipal by-law, imposing certain building restrictions on a specific lot, was attacked for the reason that it had been

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passed without the approval of the Ontario Municipal Board. While separate judgments were written, the Court was unanimous in supporting the judgment of Cartwright J. (as he then was) which held the by-law to be void. The subject-matter of the by-law fell within the ambit of the council’s legislative power. It was noted that the council had acted in good faith and that the provisions of the by-law were themselves reasonable. The sole reason for declaring the by-law void was the failure to procure the approval of the Municipal Board. Cartwright J. said, at p. 448:

The council in passing by-law No. 7203 was exercising a power to the exercise of which the approval of the Board was necessary by the provisions of s. 390(9) of The Municipal Act; and, by s. 43, just quoted, it was expressly forbidden to exercise that power until the approval of the Board had been obtained. It results that by-law No. 7203 is a nullity.

In the case at bar it was, of course, the requirement of service of notice on Mrs. Dickhoff under s. 24(5) which was not met but the same principle applies to the failure to serve as did to the failure to procure the Board approval in Township of Scarborough v. Bondi, supra. In Wiswell et al. v. Metropolitan Corporation of Greater Winnipeg, [1965] S.C.R. 512, two of five judges (Hall and Martland JJ.) considered a rezoning by-law void, for failure of the council to follow its own procedural by-law and post notices of the hearing regarding the by-law on the premises affected. Cartwright and Spence JJ. concurred in the result and Judson J. dissented. Hall J., speaking for himself and Martland J., posed the question as he saw it, at p. 523, in these words:

The point to be decided is whether the failure to post the placards on the premises and proceeding to hold hearings on Dr. Ginsburg’s application to rezone in the absence of the Association when Metro knew that the Association would oppose any such application and was actually opposing the extension applications at that very time, vitiated By-law No. 177 and rendered it a nullity.

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In answering the question in the affirmative, he stressed the importance of the giving of notice and his judgment supports the view that the observance of notice provisions where individual rights are affected must be regarded as mandatory. To similar effect are such cases as City of Victoria v. Mackay (1918), 56 S.C.R. 524, and McDougal et al. v. Harwich Tp., [1945] 2 D.L.R. 442. In the McDougal case a petition for the creation of a drainage scheme, which would have affected municipal taxes, was opposed at a meeting in respect of which notice, as required by s. 16 of The Municipal Drainage Act of Ontario, had been given. The engineer’s report on the project was considered. The meeting ended and a further meeting was held about a month later in respect of which no notice was given when the engineer’s revised report was to be considered. The by-law passed at the second meeting was held to be invalid because of the absence of such notice. Gillanders J.A. said, at pp. 449-50:

In view of the fact that the matter had been rather fully discussed at the two informal meetings at the drain, it may be that the result would not have been different if proper notice had been given, but all interested parties had not been present at these meetings, nor had the appellants done anything to waive their right to notice of the meeting for consideration. In any event, the opportunity not having been offered, it cannot be assumed or concluded that none of the petitioning owners would, if notified and present, have withdrawn from the petition, as they had the right, at that time, to do. If but one of the petitioners had so withdrawn, the petition would then have failed to carry the necessary majority, and the council would not have been justified in proceeding to pass the by-law. The appellants had the right to have that opportunity offered to the interested parties. It cannot be concluded that the appellants have not been prejudiced. In the circumstances, the giving of the notice required was a statutory condition precedent, necessary to be observed in the circumstances to found the authority of the council for the by-law in question.

One is reluctant to interfere with the action of municipal councils in such matters, particularly where, as here, there is no suggestion of bad faith, and where the proposed drainage scheme as designed is not open to any serious criticism, but the objection is more than a mere technicality. The whole jurisdiction of the council in

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such a matter is statutory, and the provisions laid down by the statute giving the jurisdiction—provisions obviously designed for the protection of the rights of interested parties—cannot safely be disregarded, at least where observance is not waived, or it is not abundantly clear that complaining parties are not adversely affected, vide: Re Hodgins and Toronto (1896), 23 O.A.R. 80 and Re McCrae and Brussels (1904), 8 O.L.R. 156.

I observe as well that in Hopper v. Municipal District of Foothills No. 31 and Lancaster, [1976] 6 W.W.R. 610 (Alta. C.A.), Clement J.A. in a judgment which concurred in the result with that of Haddad J.A. (McDermid J.A. dissenting), in a case where in practical terms no service had been made of a notice of a council meeting concerning an expropriation by-law, said, at p. 618:

The provisions of s. 24(2) et seq. are mandatory. Their purpose, consonant with common law as far as the owner is concerned, is found in s. 25:

“25. (1) Before enacting a by-law authorizing the expropriation of any land, a council shall have regard to the circumstances that appear to it to be relevant and, in particular but not so as to limit the generality of the foregoing, shall have regard to

“(a) the recommendation, if any, of any of its departments or consultants retained by it,

“(b) the objections of any interested party, and

“(c) the needs and general good of the municipality.”

The owner shall be given notice, and the council shall have regard to his objections. It is apparent from the record that Hopper had objections that he wished to emphasize to council, and this was known at least to Poffenroth and Ball. We cannot speculate on the effect such objections might have had on the council: we are concerned only with the right of Hopper to make them.

There are many other cases of similar import which have clearly established the principle that, where a power is given by a statute to a municipal government to expropriate individual interests in land, the statutory conditions for the exercise of that power must be strictly complied with. The most recent case which dealt with this question is St. Peter’s Evangelical Lutheran Church v. Ottawa, [1982] 2 S.C.R. 616, where this Court

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held a municipal by-law, designating property as one of historical or architectural value, void because of the failure of the council to comply with the notice provisions of s. 34(2)(b) of The Ontario Heritage Act requiring the giving of notice of refusal of an application for a permit to demolish a building on the property in question. I regard the provisions as to service of notice of the meeting, contained in s. 24 of The Expropriation Procedure Act, to be mandatory and failure to comply with them will invalidate a by-law passed at such meeting.

It follows, in my opinion, that the expropriation By-law is void, by reason of the failure of the respondent to serve the appellant Dickhoff with notice as required by the Act. Being void the By-law is beyond the reach of the curative provisions of s. 26 of the Act and s. 397 of The Municipal Government Act. It may be said that the error of the respondent was a small one and that the departure from the statutory provisions regarding service of notice was not, in the circumstances of this case, significant. It may be said that the mailing was required to be made on October 30 or 31 (it was made on November 3, only three days late) and that the courts should relieve against such a minor failure. But then the question arises: how far should the courts go in relieving municipalities from following mandatory provisions regarding service where the interest of private citizens is threatened? If an error of three days is forgiveable, then what about one of four, or five, or ten days? Surely, the line must be drawn somewhere to give the citizen any protection. In my view, the line should be drawn where the Legislature chose to put it and not where individual judicial discretion may fix it on a case by case basis. Osler J.A. was of that view in Re Ostrom and Township of Sidney, supra. He said, at p. 377:

That notice is to be given in the prescribed manner to the persons who may be prejudicially affected by the act, in order, it may be supposed, to enable them to deliberate upon the courses they will adopt in reference to it and unless both the first and last days are excluded they do not get a whole month for that purpose.

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In accordance with this proposition I would, because of a clear failure by the respondent to comply with the service provisions in respect of Mrs. Dickhoff, allow the appeal with costs throughout and make the declarations and order sought.

Appeal allowed with costs.

Solicitors for the appellants: Conrad, Bloomenthal, Calgary.

Solicitor for the respondent: B.E. Scott, Calgary.