Canada: The Superior Court Dismisses A Claim For Disguised Expropriation And Neighbourhood Annoyance In An Environmental Law Matter

On August 22, 2011, the Superior Court (Court) rendered judgment in Girouard v. Ville de Mont St-Hilaire1, an interesting decision in the field of both municipal and environmental law.

The facts can be summarized as follows. On August 7, 1992, the plaintiffs bought a plot of land located in the immediate vicinity of Mont St-Hilaire (Plot). The couple held the Plot for 12 years without building on it. Until 2003, the Plot was located in an area in which family housing was permitted, but at the risk of rock falls. In 2003, the City of Mont St-Hilaire (City) undertook studies and enlarged the zone in which construction was prohibited, by way of regulation. In 2004, the plaintiffs requested a construction permit for the Plot, which was refused based on the modified regulation. This regulation was later amended, but the property of the plaintiffs remained in the territory within which all new construction is still prohibited.

The plaintiffs contested the validity of this regulation and, subsidiarily, claimed damages from the City in the amount of $540,874 for disguised expropriation of their property, because of the loss of its market value. They also sued the Royal Institution for the Advancement of Learning and McGill University, as owners of a sector of the Mont St-Hilaire, alleging an abnormal neighbourhood annoyance because of the risk of falling rocks, and sought a court order so that stabilization works be performed to prevent rock slides or, in the alternative, a condemnation to pay damages.

The Superior Court dismissed the plaintiffs' action in favour both of the City of Mont St-Hilaire and of the Royal Institution and McGill University, with costs.

Firstly, the Court held that a municipal council has, pursuant to the Act Respecting Land Use Planning and Development, the power to independently regulate landslide zones, and to regulate or prohibit all or certain land uses, structures or works, taking into account the danger of rockfalls, or any other factor specific to the nature of a place which may be considered for reasons of public safety. Once this regulation has been validly adopted, the municipality is justified in refusing to issue a construction permit that would otherwise contravene its regulation.

The Court rejected the plaintiffs' argument that the regulation of the City constituted a disguised expropriation, without a fair and prior compensation. According to the Court, a party invoking disguised expropriation must establish that the City used its regulating power in bad faith, or for illegitimate or unreasonable purposes, which was not proven in this case.

With respect to the claim against the Royal Institution and McGill University, the Court explains that it cannot grant the injunction requested by the plaintiffs to perform stabilization works to prevent the risk of falling rocks. On the one hand, the conclusions sought are too vague to be executed and, on the other hand, they did not take into account the restrictions imposed by the "Conservation Agreement" with the Ministry of Environment, regarding the area of the Mont St-Hilaire at stake and prohibiting any activity which could disturb the ecosystem, except through ministerial authorization.

Moreover, the Court concluded that the risk of rock falls did not constitute an abnormal neighbourhood annoyance in the circumstances. The Court specified that the plaintiffs were aware of the landslide risk from the moment they bought the property, and that it would also be unfair to blame the Royal Institution and McGill University for this, given that the risk did not emanate from their actions, but was a natural phenomenon influenced by various environmental factors outside of human control. Consequently, the Court held that the risk of rockfalls was foreseeable at the time of purchase of the Plot, and that the plaintiffs thus accepted this inconvenience within the limits of Article 976 of the Civil Code of Québec.

McCarthy Tétrault was representing the Royal Institution for the Advancement of Learning and McGill University in this litigation.


1. 2011 QCCS 4273

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