Hartel Holdings Co. Ltd. v. City of Calgary, [1984] 1 SCR 337

Supreme Court of Canada

Hartel Holdings Co. Ltd. v. City of Calgary, [1984] 1 S.C.R. 337

Date: 1984-05-03

Hartel Holdings Co. Ltd. Appellant;

and

The Council of the City of Calgary Respondent.

File No.: 17048.

1983: September 28 and 29; 1984: May 3.

Present: Ritchie, Estey, McIntyre, Chouinard and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ALBERTA

Municipal law—Zoning—Statutory plans—Expropriation—Land reserved by plans for park—Zoning preventing planned development—Given intention to create park, whether or not municipality forced to expropriate under s. 70(1) of The Planning Act, 1977—The Planning Act, 1977, 1977 (Alta.), c. 89 (now R.S.A. 1980, c. P-9), ss. 1(14), 45(1), 46, 53, 59(1), 61, 62(2), 65(a),(d), 66, 67(2),(5), 68, 69(1),(2), 70, 83(3).

Respondent adopted a number of plans for the creation of a public park in the City of Calgary. The appellant’s land which was prime residential property was included in the proposed park. Residential development was not a permitted use under the existing zoning by-law. Appellant offered to sell its land to the City but terms could not be agreed upon. Appellant believed a more favourable price could be obtained on an expropriation but the City refused to expropriate. Appellant sought mandamus and obtained an order directing the City to expropriate on the basis that s. 70 of The Planning Act required land designated for a park under a land use by-law to be acquired within six months of that designation or the by-law to be amended to designate another use. The City maintained s. 70 was not applicable. This appeal is from a judgment of the Court of Appeal overturning the order to expropriate and can only succeed if the land is found to have been “designated” for use as a park under a land use by-law.

Held: The appeal should be dismissed.

The expression “designated under a land use by-law” does not include designation under a statutory plan for such a broad interpretation would assign s. 70 a role inappropriate in the context of the Act as a whole. The statutory definition of land use by-law made no reference to statutory plans modifying the substance of the land use by-law. Moreover, the language of s. 70 would

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be strained and the legislative history of the section ignored if the distinction between statutory plans and land use by-laws were eroded. Statutory plans contained proposals only and were subject to subsequent refinement and revision. They gave the municipality an opportunity to plan over time before passing a land use by-law to implement the proposals. The land use by-law was the instrument which triggered s. 70. It represented the culmination of the planning process and the earlier plans could not be reverted to in order to find a “designation” within the meaning of s. 70.

The concept of bad faith could not be applied here. There is nothing inherently wrong with a zoning freeze or with a refusal to buy the owner out at a fair price.

Chrumka v. Calgary Development Appeal Board (1981), 18 M.P.L.R. 95, considered; Bridgeland-Riverside Community Association v. Calgary (1982), 18 M.P.L.R. 180; Tegon Developments Ltd. v. Edmonton (City of) (1977), 5 Alta. L.R. (2d) 63, affirmed at [1979] 1 S.C.R. 98; Hauff v. Vancouver (City of) (1980), 12 M.P.L.R. 125; Soo Mill & Lumber Co. Ltd. v. Sault Ste-Marie (City of), [1975] 2 S.C.R. 78; Sanbay Developments Ltd. v. London (City of), [1975] 1 S.C.R. 485; Vancouver (City of) v. Simpson, [1977] 1 S.C.R. 71, referred to.

APPEAL from a judgment of the Alberta Court of Appeal (1982), 131 D.L.R. (3d) 723, 18 Alta. L.R. 1, 36 A.R. 76, 17 M.P.L.R. 87, allowing an appeal from an order of mandamus made by Greschuk J. Appeal dismissed.

B.A. Crane, Q.C., and E.E. Dais, for the appellant.

Brand Inlow and Adel A. Abougoush, for the respondent.

The judgment of the Court was delivered by

WILSON J.—The appellant corporation’s complaint against the respondent City is that the City has, by freezing the zoning of its land with a view to its subsequent acquisition for a park, confiscated the value of the land as prime residential development property. The power of the City to do this under The Planning Act, 1977, 1977 (Alta.), c. 89 (now the Planning Act, R.S.A. 1980, c. P-9) is the issue on this appeal.

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1. The Facts

The appellant corporation is the owner of a parcel of land in the City of Calgary which it has been planning to develop for residential purposes since at least 1971. For the same length of time, however, the respondent City has had its eye on the appellant’s land along with other land in the vicinity with a view to the establishment of a public park in the Nose Hill area. The respondent has, over the course of time, refined its ideas about the proposed park and has adopted a number of plans reflecting those ideas.

On January 5, 1972 the Superintendent of the City’s Land Department informed the appellant that the Department was prepared to recommend the acquisition of its land for $6873 per acre. Nothing came of this recommendation but it is evidence of the City’s early interest in the aquisition.

The appellant’s land was classified as A-Agricultural under the municipal zoning by-law applicable in 1971. There were a variety of permitted uses for land so classified. These included, in addition to parks, farms of no less than twenty acres, schools or public buildings, and a variety of public and private recreational uses some of which offered limited possibilities for commercial exploitation. Private dwellings were permitted but the minimum site area of twenty acres meant that a zoning change would be necessary before the appellant’s plans for residential development could be put into effect. The appellant’s land was clearly classified in this way, as A-Agricultural permitting other uses, because s. 120(c) of The Planning Act, R.S.A. 1970, c. 276, the predecessor of s. 70 of The Planning Act, 1977, provided that the municipality could not zone land exclusively for parks or recreational facilities unless it owned all the land in the zone or acquired it within six months from the date of establishment of the zone.

On July 3, 1972 the City passed the first of the resolutions cited by the appellant as evidence of the City’s intention to freeze development of land

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for the creation of Nose Hill Park. This resolution deferred development of the area in question until completion of a sector plan and suggested that consideration be given to acquiring a major portion of the Hill for recreational purposes. The resolution was, in effect, a commitment to postpone any change in the then prevailing zoning by-law.

On April 16, 1973 the City passed a resolution restricting urban development on some 4100 acres in the Nose Hill area and requiring investigation by the City of all available means of acquisition of this land. On January 26, 1976 the City reduced the size of the proposed Nose Hill Park by deleting the westerly 1500 acres. The remaining 2600 acres included the appellant’s land.

On November 10, 1977 assent was given to The Planning Act, 1977, 1977 (Alta.), c. 89, and the Act itself came into effect on April 1, 1978. Pursuant to the provisions of the new Act the City adopted a number of statutory plans which included reference to the Nose Hill Park, the appellant’s land being included in the land making up the proposed park. The first of these was the Calgary General Municipal Plan adopted on March 12, 1979. This plan stated that “A plan will be prepared for the development of Nose Hill Park, and capital budget allocations will be made for the purchase of, and improvement to, the land affected”. In September 1979 the City passed an Area Structure Plan called Crowchild III which included reference to the “proposed Nose Hill Park”. In February 1980 the City adopted the Nose Hill Park Master Plan which had been prepared by the City Parks and Recreation Development and outlined the types of recreational activity and facilities which would be desirable in the park. As counsel for the respondent asserts, the Master Plan is a mere policy statement which does not occupy any place in the hierarchy of statutory plans under the Act. It was, however, incorporated in the City’s General Municipal Plan on June 17, 1980.

It seems fairly clear that the General Municipal Plan, Crowchild III and the Nose Hill Park Master Plan are all policy documents rather than

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regulatory documents. For example, the General Municipal Plan is divided into sectors such as “The River Valley System and Other Natural Areas” and “Park Land in General” and these are discussed under the headings “Policies”, “Implementation” and “Monitoring”. The Nose Hill Park Master Plan put forward three alternative park development concepts which are evaluated and recommendations made. The form and content of these documents differ markedly from the Calgary Land Use By-Law itself.

On March 3, 1980 the City enacted Land Use By-Law 2-P-80 to come into effect on March 31, 1980. Under this by-law the appellant’s land was zoned A-Agricultural and Open Space. There are five permitted uses under this category, namely essential public services, extensive agricultural uses, parks and playgrounds, single—detached dwellings, and utilities. As under the previous zoning by-law there is a twenty acre minimum site area making residential development of the type in which the appellant was interested impossible. A number of discretionary uses are also listed but none of them would appear to provide commercially attractive possibilities for the appellant. In substance, however, the by-law does not by itself change the position the appellant was in prior to its enactment as far as the development of its land is concerned.

The appellant had been aware for some time of the difficulties associated with the development of its land in light of the park proposals. In 1976 a land exchange with the City was proposed but this was not acceptable to the City. On October 6, 1978 the appellant applied for an amendment to the zoning law then in effect and for subdivision approval for its land and adjacent property for the purpose primarily of residential development. This application was refused by the City on April 9, 1979 and the appellant did not appeal nor is it contesting the propriety of the decision on this appeal.

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Concurrent with the development of its plan for the Nose Hill Park the City had authorized the acquisition of land in the park from its owners. Pursuant to this authority on July 17, 1979 Brian Musgrove of the City Land Department responded to an offer from the appellant that its land be sold to the City and that the procedures under The Expropriation Act, 1974 (Alta.), c. 27, be followed in establishing value. Mr. Musgrove acknowledged that the City was interested in acquiring the appellant’s land but indicated that an independent appraisal would be required. On March 7, 1980 Mr. Musgrove wrote to the appellant’s solicitor indicating that the respondent would, subject to appropriate approvals, be prepared to offer $6000 per acre. This was less than the $6873 the Land Department was prepared to recommend in 1972 for the same land and substantially less than the $30,000 per acre that was recommended in 1977 for the purchase of a nearby property. The appellant rejected the City’s offer, believing it could do better under the provisions of The Expropriation Act. Under that statute the value of the land would be determined by the Alberta Land Compensation Board on the basis of what a willing buyer would pay for it on the open market.

The City, however, decided to play a waiting game. It indicated that it was not prepared to go ahead with expropriation at that time. The appellant in turn demanded that the City comply with s. 70 of The Planning Act and acquire the property. When the City took the position that s. 70 was not applicable, the appellant brought an application for an order of mandamus requiring the City to take expropriation proceedings pursuant to s. 70(1) of the Act. On February 20, 1981 Greschuk J. granted the appellant’s application and ordered the City to commence expropriation proceedings within three months from the date of the order. On January 29, 1982 the Alberta Court of Appeal unanimously allowed the City’s appeal from this order.

The appellant acknowledges that it can only succeed on the appeal if its land was “designated” under Land Use By-Law 2-P-80 for use as a park. It submits that on a proper interpretation of

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s. 70(1) of the Act it was so designated. Section 70(1) reads as follows:

70 (1) If land is designated under a land use by-law for use or intended use as a municipal public building, school facility, park or recreation facility and the municipal corporation does not own the land, the council shall

(a) within six months from the date the land is so designated

(i) acquire the land or require it to be provided as reserve land pursuant to this Act, or

(ii) amend the land use by-law to designate the land for another use or intended use,

or

(b) within six months from the date the land is so designated commence proceedings to acquire the land or require it to be provided as reserve land and thereafter acquire it within a reasonable time.

Designation, the appellant says, can be effected in a number of ways—by land use maps attached to the by-law, through a statutory plan (which it alleges is what happened here) or by direct action of Council. In any of these ways, counsel submits, the land can be legally restricted and frozen for public use and s. 70(1) thereupon comes into play. The expression “designated under a land use by-law” should be given a large and liberal interpretation to cover all those methods of designation.

With respect, I cannot accept this submission. It assigns a role to s. 70 which is inappropriate in the context of the Act as a whole.

2. The Structure of The Planning Act

The structure of the Act discloses a fully integrated scheme of planning documents comprising various types of statutory plans and a land use by-law. Each document has a discrete role to play in the overall planning process. Plans are policy documents and set out proposals for future development. They may be subject to review and

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amendment from time to time as policies and proposals are refined. The land use by-law is the instrument by which the policies are finally implemented.

The Act is divided into eight parts, and of particular interest are Part 3 “Regional Plans and Statutory Plans” and Part 4 “Implementation of Plans”. Part 3 contains two divisions—“Division 1, Regional Plans” and “Division 2, Statutory Plans”. The adoption of a regional plan is mandatory under s. 45(1) and it is intended to provide both an element of future oriented planning and, if desired, an element of regulation. Thus s. 46 states:

46 A regional plan

(a) shall provide for the present and future land use and development of the planning region, and

(b) may regulate and control the use and development of land in the planning region.

Pursuant to s. 53 all by-laws, statutory plans, replotting schemes and land use by-laws must conform to the regional plan. No allegation has been made by the appellant in this case that the regional plan for Calgary contains any reference to the proposed Nose Hill Park.

Division 2, Statutory Plans, sets out three types of plans—General Municipal Plans, Area Structure Plans and Area Redevelopment Plans. The preparation of a General Municipal Plan is mandatory under s. 59(1). Area Structure Plans and Area Redevelopment Plans are discretionary tools whereby a municipality can plan in more detail for a designated area. Area Structure Plans must conform to the General Municipal Plan under s. 62(2)(a) and Area Redevelopment Plans must conform under s. 65(a) both to other statutory plans affecting the area and to land use by-laws.

The provisions describing what the various levels of statutory plans must contain, confirm, in my

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opinion, the planning as opposed to the regulatory nature of these documents. For example, s. 61 provides:

61 A general municipal plan shall

(a) describe

(i) the land uses proposed for the municipality,

and

(ii) the manner of and the proposals for future development in the municipality;

(b) designate or describe the areas of the municipality that would, in the opinion of the council, be suitable for an area structure plan or an area redevelopment plan or both;

(c) contain any other matters that the council considers necessary. [Emphasis added]

Area structure plans must describe “the sequence of development proposed for the area” (s. 62(2)(b)(i)); “the land uses proposed for the area” (s. 62(2)(b)(ii)); “the density of population proposed for the area” (s. 62(2)(b)(iii)); and “the general location of major transportation routes” (s. 62(2)(b)(iv)). (Emphasis added.) Section 65, in describing the contents of area redevelopment plans, continues the theme that these are plans and proposals and indeed s. 65(d) requires that plans “describe proposals for the acquisition of land for any public municipal use, school facilities, parks and recreation facilities or such other purposes as the council considers necessary”. (Emphasis added.) If, as counsel for the appellant suggests, statutory plans when read together with the land use by-law can trigger the application of s. 70, it seems rather odd that s. 65(d) should require an area redevelopment plan to describe proposals for the acquisition by the municipality of lands for public purposes.

Most municipalities are required to pass land use by-laws under s. 66 and logic and experience would tend to indicate that many parcels of land for which public use is contemplated will be zoned under a land use by-law in such a way that the public use contemplated is a permitted use under

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the existing zoning scheme. If the appellant is correct, the planned use of these lands for public purposes requires the municipality to acquire such lands within six months of the approval of such plans or change the plans to allow for alternative uses. The better view, it seems to me, is that statutory plans are designed to present proposals to which the municipality is committed rather than to implement them. Actual practice seems to confirm this since the extracts from Calgary’s General Municipal Plan with which we have been provided indicate a focus on the development of land use policies and mechanisms for the implementation of these policies rather than regulation which is carried out under the land use by-law.

Part 4, entitled “Implementation of Plans”, begins with Division 1—“Land Use By-Law”. It is in this Division that s. 70 is found. “Land use by-law” is defined in s. 1(14) as “a by-law of a council passed as a land use by-law in accordance with this Act and includes a by-law under section 19.4 of The Alberta Historical Resources Act”. In my view, the land use by-law is a distinct entity from plans. It is the primary tool whereby plans are implemented.

Pursuant to s. 66 the council of a municipality with a population of a thousand or more must pass a land use by-law and the land use by-law must divide the municipality up into zones (s. 67(2)(a)). The municipality may either designate zones as direct control zones pursuant to s. 68 or set up a scheme of permitted or discretionary uses with or without conditions pursuant to s. 69. The City pursued the latter option with respect to the appellant’s land.

In the zone in which the appellant’s land is located there are both permitted and discretionary uses of land under Land Use By-Law 2-P-80 and both of these are subject to conditions. Under s. 69(2) where a proposed use falls into the permitted use category and the proposed use complies with the conditions set out in the by-law, the development officers must issue a development permit; see

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Chrumka v. Calgary Development Appeal Board (1981), 18 M.P.L.R. 95. I believe the respondent is correct, therefore, in its assertion that there are types of development of the appellant’s land which the City must permit under the present by-law, notwithstanding the fact that various statutory plans call for the use of the appellant’s land as a park. In particular, single detached dwellings with a minimum site area of twenty acres are permitted uses. I do not think, therefore, that the appellant can make out a case that all development has been frozen as a result of the combined operation of the land use by-law and the statutory plans. On the other hand, it must be acknowledged that for all practical commercial purposes the development of the appellant’s land has been frozen. The respondent’s plan to use the land as part of a park has effectively deprived the appellant of the commercial opportunities afforded by the property. Furthermore, it is not clear that there is any obligation on the municipality under s. 67 or s. 69 to establish any permitted uses in a given zone. I do not think, therefore, that the existence of certain permitted uses in the zone in question in this case should be considered dispositive of the issue of interpretation with which we are faced.

Professor F.A. Laux, in his text The Planning Act (Alberta), discusses the relationship between statutory plans and land use by-laws. He says at pp. 28-29:

A general municipal plan must be in conformity with any regional plan that is in effect. Any area structure plan or area redevelopment plan must, likewise, be in conformity with the general plan. However, there is no express statutory requirement that the land use by-law, which implements municipal planning through a permit system, need conform to or be based upon a general municipal plan. The only reference contained in the Act in respect of the effect of a general municipal plan on land use is that contained in section 83(3) which calls upon a development appeal board to “comply with” a general municipal plan in determining appeals. Also, according to section 88, no subdivision of land is to be permitted by an approving authority unless the proposed subdivision conforms to the general municipal plan, where one is in effect. Under the old Act, where land was regulated by way of development control, any proposed development was required to conform to the gen-

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eral plan and, similarly, any zoning by-law was required to be “based upon” the general plan. A development appeal board was obligated to have “due regard to… the purpose, scope and intent of a general plan” and an approving authority was prohibited from approving a subdivision unless it also conformed to any existing general plan.

What is the purpose of having a general municipal plan if a land use by-law need not conform to the plan? In other words, if a municipality is entitled to prepare and adopt a general municipal plan and then proceed to ignore it in the planning document that really counts, the land use by-law, it is obvious that the whole purpose and intent of a general municipal plan would be defeated. It follows from that logic that the Legislature must have intended that there be at least substantial, if not complete, conformity between the two documents. Hence, if certain land use designations found in a land use by-law, either on the first passing of the by-law or later by amendment, are at complete variance with the spirit and intent of a general municipal plan, it would seem arguable that such designations would be ultra vires. This result, it is suggested, is necessary to ensure that a municipal council, after having so carefully laid out the scheme of things to come in the plan, does not proceed to regulate land use in an ad hoc and narrow fashion without regard to general planning.

Land use by-laws, in Professor Laux’s view, obviously occupy a separate place and function in the scheme of the Act from statutory plans. Professor Laux preserves this distinction in his discussion of s. 70 itself. He says at p. 51:

Section 70 applies only to use designations prescribed in a land use by-law and then only to the enumerated public uses. It does not apply to use designations or prohibitions contained in regional plans, statutory plans or any regulation made pursuant to the Act, including special planning area regulations made under section 144. (Note, however, that if the scheme of the Act is followed through, designation in regional and statutory plans will ultimately surface in the land use by-law). Also, it does not apply to designations of uses for public purposes other than those mentioned or designations of uses, which, although private in nature, may have the practical effect of negating any reasonable private use. Finally, it does not apply to zoning or development freezes, or the creation of holding zones. [Emphasis added].

The underlined comment is, in my view, significant because it illustrates the consequence of a

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separation of the functions of statutory plans from those of land use by-laws in the scheme of the Act. Section 70 ultimately forces the municipality’s hand and requires it to acquire land which it will use for public purposes within a reasonable time after it has made a firm commitment to dedicate the land to public use. On the other hand, it gives the municipality an opportunity to spend a considerable amount of time preparing plans and taking steps towards their implementation (such as setting up a fund for land acquisition) before it makes the “firm commitment” which triggers the application of the section. It seems to me that it is more consistent with the structure of the Act to preserve the distinction between land use by-laws and statutory plans than to erode it.

3. The Interpretation of Section 70

Counsel for the appellant makes two related submissions on the interpretation of s. 70. He says first that the expression «designated under a land use by-law” means something different from “designated in a land use by-law”. The difference, he submits, is that “under” is broader than “in” and enables a designation to be found in the plan behind the by-law. I find no merit in this submission since “under” and “in” are both used in s. 69(1) and clearly have reference to the specific land use by-law which the municipality is required to pass pursuant to s. 66(1) of the Act. The same words used in different sections of the same Act should be given the same meaning.

Counsel’s related argument is that the term “land use by-law” itself encompasses the land use by-law as modified by any statutory plans. The land use by-law, he says, should be read down to reflect the statutory plans. There are a number of problems with this submission. First, “land use by-law” is a defined term under s. 1(14) of the Act. The definition makes no reference to statutory plans modifying the substance of the land use by-law. Second, and more importantly, there is the need to preserve the distinction between land use by-laws and statutory plans which has already been adverted to. Third, there is the problem that if “land use by-law” can be modified or read down

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in light of statutory plans in the context of s. 70 it ought to be capable of being modified in the same way in the context of other sections. If we attempt to apply such a principle, however, we find that it results in a number of anomalies.

Under s. 69(2) a person is entitled to demand the issuance of a development permit if the use for which he seeks the permit is a permitted use prescribed in the land use by-law and if the development otherwise conforms to the land use by-law. In Chrumka v. Calgary Development Appeal Board, supra, Clement J.A. writing for the Alberta Court of Appeal emphasized the importance to landowners of the right to develop with respect to a permitted use. In Chrumka the appellant was a landowner who sought to build a single detached dwelling which was a permitted use under the applicable Calgary land use by-law. The same building could arguably also be characterized as a discretionary use. The appellant applied for a development permit and was granted a permit by the development officer on the basis that it was a permitted discretionary use. A neighbour appealed to the Development Appeal Board and the Board reversed the development officer’s decision and refused the permit. The Court of Appeal reversed the Development Board’s decision and held that, since single detached houses were a permitted use under the land use by-law, this was the end of the matter and neither the development officer nor the Board had any discretion to refuse a development permit.

The Court of Appeal in Chrumka did not consider the situation of a permitted use under the land use by-law which was inconsistent with one or more statutory plans. If the appellant’s contention is correct and land use by-laws are capable of being modified by statutory plans, the right of the landowner to demand a development permit for a land use permitted by the land use by-law would be undermined. Such a result would, in my view,

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be anomalous and I would be reluctant to adopt a construction which brought about this result.

The same type of argument can be made with respect to the power of development officers and development appeal boards to relieve from technical breaches of land use by-laws. These provisions are contained in s. 67(5) (development officers) and s. 83(3)(c) (development appeal boards). Under s. 67(5) a development permit may be approved:

67…

(5)… notwithstanding that the proposed development does not comply with the land use by-law if, in the opinion of the development officer,

(a) the proposed development would not

(i) unduly interfere with the amenities of the neighbourhood, or

(ii) materially interfere with or affect the use, enjoyment or value of neighbouring properties,

and

(b) the proposed development conforms with the use prescribed for that land or building in the land use by-law.

Section 83(3)(c) gives a virtually identical saving power. In each case, however, the saving power is restricted by the caveat that the proposed development must conform with the use prescribed in the land use by-law. If the uses prescribed in a land use by-law must be read down to accord with statutory plans, the scope of the saving power is narrowed considerably. In fact, the Court of Appeal in Bridgeland-Riverside Community Association v. Calgary (1982), 18 M.P.L.R. 180, held that the saving power in s. 83(3)(c) could not be restricted by the enactment of any plan. (See especially p. 185.) The construction of s. 83 adopted by Kerans J.A. in Bridgeland is not without its problems in that s. 83(3)(a) requires the Board to comply with any statutory plan in effect in determining an appeal and one might have thought that this express direction would bind the Board even if the land use by-law did not. (See Professor Jones’ criticism in (1982), 20 Alta. L.R. 494, at

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pp. 495-99.) At a minimum, however, the decision is an example of the extent to which the Alberta courts have come to regard the land use by-law rather than statutory plans as the primary implementation tool of the planning process.

It is not without significance also that s. 70(1)(a)(ii) gives the municipality the option to “amend the land use by-law to designate the land for another use or intended use” if it does not wish to acquire it. This would seem to indicate that the designation of the land for use as a park would take place in the land use by-law. It is logical to assume that the most effective way of removing the freeze on development would be to amend the instrument whereby the freeze was imposed.

The appellant submits also that the expression “use or intended use” as used in s. 70(1) implies an element of planning which is inconsistent with the designation of land for use as a park solely in a land use by-law. I do not find much merit in this submission. It seems to me that when a municipality makes a firm decision to create a park and manifests this decision in a land use by-law, this does not mean that the municipality must create the park immediately. This is particularly true of other uses mentioned in s. 70(1) such as municipal public buildings and school facilities. The municipality may, for example, designate the land for use for a school but it may be some time before a school is in place. Thus “intended use” in s. 70 is capable of meaning something different from proposed use as manifested in a statutory plan.

I cannot accept the submission of the appellant that the Court should construe the expression “designated under a land use by-law” broadly so as to include designation under a statutory plan. It puts a strained interpretation on the language of the section itself and it is not consonant with the different roles allotted to statutory plans and land use by-laws in the context of the Act as a whole. Moreover, the legislative history of the section

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seems to be against it. Under the 1963 legislation land could not be zoned as parkland unless the municipality owned the land at the time (The Planning Act, 1963 (Alta.), c. 43, s. 120(c)). The 1965 legislation allowed the municipality to create a parkland zone where it did not own the property but, if the land was not acquired within six months, the by-law ceased to be effective (The Planning Act, 1965 (Alta.), c. 70, s. 24(2)). The 1970 legislation applied only to zones in which the use or intended use of the land was only for parks or other specified public purposes. Under this scheme parkland could be a permitted or discretionary use of the land but, once the municipality decided that the land could be used only for a park, it had to acquire the land within six months (The Planning Act, 1970 (Alta.), c. 89, s. 16; The Planning Act, R.S.A. 1970, c. 276, s. 120(c)).

It is apparent that the Alberta legislature found the third approach the most suitable since it forms the basis of the present legislation. The legislation has gradually moved away from the situation in which the rights of the property owner were given paramount consideration towards the situation in which planning flexibility and the public interest are given paramountcy. The policy was given legislative expression in sections 2 and 4 of the 1977 statute. They provide:

2 The purpose of this Act and the regulations is to provide means whereby plans and related measures may be prepared and adopted to

(a) achieve the orderly, economical and beneficial development and use of land and patterns of human settlement, and

(b) maintain and improve the quality of the physical environment within which patterns of human settlement are situated in Alberta,

without infringing on the rights of individuals except to the extent that is necessary for the greater public interest. [Emphasis added]

4 Except as provided in this Act and in section 19.5 of The Alberta Historical Resources Act, nothing in this Act or the regulations or in any regional plan, ministerial regional plan, statutory plan, replotting scheme or

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land use by-law gives a person a right to compensation.

These sections indicate that the Alberta legislature has decided that if the rights of individuals and the public conflict, then to the extent necessary the “greater public interest” must prevail and that the compensation scheme envisaged under the Act is an exclusive one. This seems to be the balance which the legislature has struck and I see no basis upon which the Court can interfere with that balance.

4. The “Bad Faith” Doctrine

The appellant’s case in a nutshell is that by freezing its land with a view to its subsequent acquisition for a park the respondent has deprived the appellant of the potential value of its land for residential development. No doubt, this is true. The difficulty the appellant faces, however, is that in the absence of bad faith on the part of the respondent this seems to be exactly what the statute contemplates. The crucial rider is that the City’s actions must have been taken pursuant to a legitimate and valid planning purpose. If they were, then the resulting detriment to the appellant is one that must be endured in the public interest. To force the City to acquire land at the point when long range planning decisions are initially made would thwart rather than promote the planning process. It may be that the choice of the land use by-law as the triggering mechanism for the duty to acquire the land presents a great temptation to a municipality to “wait out” a potential developer in order to keep the acquisition price of the land down. Is there a point of time at which that tactic is no longer acceptable? Should there be a cut-off point? If so, it seems to me that, having regard to the competing interests of the owner and the municipality, the proper forum for imposing such a cut-off is the legislature.

The use of downzoning and other techniques by municipalities to keep down the price of land they expect to acquire in the future has been the subject of frequent litigation. The decisions make it clear that municipalities cannot abuse their powers by using them for an improper purpose. For example, in Tegon Developments Ltd. v. Edmonton (City of)

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(1977), 5 Alta. L.R. (2d) 63 (C.A.), affirmed [1979] 1 S.C.R. 98, the Edmonton City Council was disallowed from putting a freeze on the development of certain property in the hope that the province would designate the property under The Alberta Heritage Act. Similarly, in Hauff v. Vancouver (City of) (1980), 12 M.P.L.R. 125, the City of Vancouver’s attempt to pass a by-law for the express purpose of limiting property values with an eye to future acquisition was struck down.

In my view, however, this is not that kind of case. The City has not changed the zoning of the appellant’s land. It has simply refused to rezone it in his favour or buy him out at a fair price. There is nothing inherently wrong with a development freeze: see Soo Mill & Lumber Co. Ltd. v. Sault Ste-Marie (City of), [1975] 2 S.C.R. 78, and Sanbay Developments Ltd. v. London (City of), [1975] 1 S.C.R. 485, both decisions of this Court under the Ontario Planning Act.

In the former case the appellant argued that the creation by the respondent municipality of a “holding zone” freezing development of its property amounted to discrimination against it. Chief Justice Laskin rejected this argument in the following terms at p. 84:

Nor can the appellant complain of discrimination merely because the result of the freeze is to sterilize its land in respect of development when this has been done in the context of an overall Official Plan and a general zoning by-law in furtherance thereof. There was no suggestion of bad faith on the part of the respondent in bringing the appellant’s land within the holding category. That was a discretion which was reposed in the municipality under the zoning scheme.

Moreover, this Court’s decision in Vancouver (City of) v. Simpson, [1977] 1 S.C.R. 71, indicates that planned public acquisition of land for a park can be a legitimate reason for refusing to grant a building permit or, by extension, for a refusal of an application for rezoning. Exceptions are always

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made for situations involving bad faith but I think it is stretching the concept of bad faith beyond the breaking point to attempt to apply it in this case.

For the reasons given I would dismiss the appeal with costs. No costs were awarded against the appellant in the court below. In my view, however, the respondent is entitled to its costs when it is compelled to defend its judgment in this Court.

Appeal dismissed with costs.

Solicitors for the appellant: Barron, McGown, Edmonton.

Solicitor for the respondent: Adel A. Abougoush, Calgary.