Abbott et al. v. Canada, (2001) 203 F.T.R. 191 (TD)

• Court: Federal Court (Canada)
• Case Date: May 11, 2000
• Jurisdiction: Canada (Federal)
• Citations: (2001), 203 F.T.R. 191 (TD)

Abbott v. Can. (2001), 203 F.T.R. 191 (TD)

MLB headnote and full text

Temp. Cite: [2001] F.T.R. TBEd. AP.100

Allison G. Abbott, Margaret Abbott and Margaret Elizabeth McIntosh (plaintiffs) v. Her Majesty the Queen (defendant) and Canadian Pacific Hotels Corporation (intervenor)

(T-1168-96, 2001 FCT 242)

Indexed As: Abbott et al. v. Canada

Federal Court of Canada

Trial Division

Hargrave, Prothonotary

March 26, 2001.

Summary:

Between 1934 and 1959, the Crown granted the plaintiffs leases within a national park. The leases contained perpetual rights of renewal. The Crown argued that the leases were void, subject to severability, because perpetual renewal clauses were not authorized by the relevant legislation. The Crown sought a determination of two points of law. CP Hotels, which held leases with rights of renewals within different national parks, intervened.

A Prothonotary of the Federal Court of Canada, Trial Division, held that the Crown had legal authority to grant leases containing perpetual renewal clauses at the time they were granted. Alternatively, if the Crown lacked the legal authority, it was estopped from denying the perpetual renewal right.

Crown - Topic 655

Authority of ministers - Authority to enter agreements on behalf of Crown - Prior to 1959, the Crown leased land inside national parks to CP Hotels - The leases contained perpetual rights of renewal - A Minister of the Crown prescribed and settled the form of the leases and executed the leases on the Crown's behalf - The Crown argued that the leases were void because of the right to perpetual renewal - The relevant legislation enacted between 1930 and 1962 did not touch on renewals - A Prothonotary of the Federal Court of Canada, Trial Division, held that the Minister acted as agent for the Crown - The Crown, as principal, was obligated to fulfill its contractual obligations - The Prothonotary stated that the "authority of a Minister, as an agent, to bind the Crown subsists even though there may be neither specific legislative authority nor an Order in Council, so long as there are not statutory restrictions on the Minister's authority" - Therefore, the Crown could not avoid its obligations under the leases - See paragraphs 60 to 64.

Crown - Topic 1010

Contracts with Crown - General principles - Authority of employees and agents to bind Crown - [See Crown - Topic 655 ].

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - The Crown granted leases for property in National Parks which contained perpetual rights of renewal - The Crown argued that the leases were void, claiming, inter alia, a right of perpetual renewal was contrary to s. 4 of the Parks Act, 1930, which provided that all lands "shall be maintained and made use of so as to leave them unimpaired for the enjoyment of future generations" - A Prothonotary of the Federal Court of Canada, Trial Division, stated that "the better view is that the Parks Act of 1930 and legislation sets out certain standards, the breach of which results in an impairment and which either requires rectification, or could result in a cancellation of a lease. In effect, the purpose of the parks legislation is sufficiently served by the provisions and penalties in the Statutes and Regulations, for example, the Regulations made under section 7 of the Parks Act of 1930, which provides for the administration, protection, control, management and protection of parks and their resources and the prevention of nuisance in the parks and by the penalty provisions in the Act." - See paragraph 32.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - The Crown granted leases for property in National Parks which contained perpetual rights of renewal - The Crown argued that the leases were void, claiming that a right to perpetual renewal was contrary to the relevant legislation - A Prothonotary of the Federal Court of Canada, Trial Division, stated that to espouse the Crown's view that the leases were null and void, or that there was no right of renewal, would lead to a commercially absurd result and a result that would deprive park users of the ability to enjoy the parks - If the leases were too short, no substantial business enterprise would be interested in putting in facilities and amenities worthy of the parks and attractive to the public - Therefore, the Crown would not fulfill its statutory mandate to make the parks available to the public for their benefit, education and enjoyment - See paragraphs 33, 34 and 59.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - The Crown granted leases for property in National Parks which contained perpetual rights of renewal - The Crown argued that the leases were void, claiming that a right to perpetual renewal was contrary to the relevant legislation - A Prothonotary of the Federal Court of Canada, Trial Division, referred to Driedger's four points respecting the modern view of avoiding an absurdity when construing legislation - The Prothonotary stated that "To these four principles I would add a general rule pointed to ... in The Queen v. Walker [S.C.C.] ... that the Crown may not impeach its own act where there are two sets of regulations, one proper and one improper, under which the Crown might have acted, for the Crown's honour and for the benefit of the subject, the applicable construction is the one which will uphold the Crown's intent to make a good and proper grant." - See paragraphs 35, 36 and 48.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - Between 1934 and 1959, the Crown leased lots inside a national park to the plaintiffs - The leases contained perpetual rights of renewal - The Crown argued that the leases were void because the relevant legislation did not authorize perpetual renewals - A Prothonotary of the Federal Court of Canada, Trial Division, held that the Crown was authorized to grant the leases - Order in Council P.C. 2028 (1913) allowed for leases with continuous renewals, at least up to 1947 - P.C. 2028 was not repealed - Nothing in the Parks Act, 1930 or related regulations prevented the granting of perpetually renewable leases - They were silent on renewals - Order in Council P.C. 5045 (1947) provided that the Crown could issue leases not exceeding 42 years - P.C. 5045 provided that all "lease and licence forms shall be approved by the Deputy Minister of Justice" - There was no indication that the forms used after 1947 were not approved - Therefore, the Crown could not impeach the acts of its officers in using and issuing leases on those forms - See paragraphs 37 to 53.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - The Crown leased land inside national parks to CP Hotels' predecessor - The leases contained perpetual rights of renewal - The Crown argued that the leases were void - In particular, the Crown argued that a right of perpetual renewal was the equivalent of permanent alienation and thus contrary to s. 4 of the Parks Act, which provided that the parks were for the public and were to be left unimpaired for the enjoyment of future generations - A Prothonotary of the Federal Court of Canada, Trial Division, held that the perpetual lease was not a final disposition or alienation - The rights of renewal were expressly contingent upon strict compliance with the provisions of the lease - Upon a breach, the Crown could, at its option, re-take possession of the lands and make the lease invalid - The Crown's right to retake possession precluded any exclusive right of possession, enjoyment and disposal by the lessee, those rights being the hallmark of ownership - See paragraphs 57 and 58.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - Between 1934 and 1959, the Crown granted leases to the plaintiffs for property within national parks - The Crown also granted leases to CP Hotels' predecessor - The leases contained perpetual rights of renewal - A Prothonotary of the Federal Court of Canada, Trial Division, held that the Crown had legal authority to grant leases containing perpetual renewal clauses at the time they were granted - Alternatively, if the Crown lacked the legal authority, it was estopped from denying the perpetual renewal right - With respect to the plaintiffs, the Crown had taken a position reflecting an intention to allow the lessees to renew in perpetuity so long as they complied with the terms applicable to their leases - With respect to CP Hotels, it and its predecessor invested substantially in the property relying on the perpetual lease renewals, yet the Crown failed to advise of the inability to grant perpetually renewable leases or that it might disavow the leases - CP Hotels surrendered existing leases on the basis that the replacement leases would contain the same terms and conditions - See paragraphs 65 to 75.

Crown - Topic 6877

Crown lands - National and provincial parks - Leases - [See Crown - Topic 655 ].

Estoppel - Topic 1004

Estoppel in pais (by conduct) - General - Against Crown - [See sixth Crown - Topic 6877 ].

Estoppel - Topic 1163

Estoppel in pais (by conduct) - Representation - By conduct - Practice or course of conduct - [See sixth Crown - Topic 6877 ].

Real Property - Topic 245

General principles - Restrictions on alienation - Statutory - Effect of - [See fifth Crown - Topic 6877 ].

Statutes - Topic 1408

Interpretation - Construction where meaning is not plain - General principles - Avoidance of absurdity - [See second and third Crown - Topic 6877 ].

Statutes - Topic 6226

Operation and effect - Effect on earlier statutes - Implied repeals - General - A Prothonotary of the Federal Court of Canada, Trial Division, stated that "Driedger on the Construction of Statutes, ... points out that where there is subsequent legislation there is no implied repeal unless the continued operation of both provisions is judged to be impossible or otherwise unacceptable. While there may in some instances be a doctrine paramountcy, a ranking of legislation with subsequent legislation outranking earlier inconsistent provisions, the usual practice in Canada is to repeal legislation through the enactment of highly stylized provisions: 'repeal by implication is wholly inconsistent with ... [Canada's] ... approach to statute law.'" - See paragraph 39.

Statutes - Topic 6704

Operation and effect - Commencement, duration and repeal - Retrospective and retroactive enactments - Presumption against retrospectivity and retroactivity - A Prothonotary of the Federal Court of Canada, Trial Division, noted that "regulations passed after a lease has been granted cannot retroactively modify or take away terms already created and embodied in such a lease" - See paragraph 17.

Statutes - Topic 6910

Operation and effect - Commencement, duration and repeal - Repeal - By implication - [See Statutes - Topic 6226 ].

Cases Noticed:

R. v. Walker, [1970] S.C.R. 649, consd. [para. 4, footnote 1].

Athlumney, Re; Ex parte Wilson, [1898] 2 Q.B. 547, refd to. [para. 17, footnote 5].

Montreal Trust Co. et al. v. Canadian National Railway, [1939] 3 D.L.R. 497 (P.C.), refd to. [para. 27, footnote 6].

Verreault (J.E.) & Fils ltée v. Quebec (Procureur général), [1977] 1 S.C.R. 41; 5 N.R. 271, refd to. [para. 28, footnote 7].

CAE Industries Ltd. and CAE Aircraft Ltd. v. Canada, [1986] 1 F.C. 129; 61 N.R. 19 (F.C.A.), refd to. [para. 28, footnote 8].

Archbolds (Freightage) Ltd. v. Spanglett (S.) Ltd., [1961] 1 Q.B. 374 (C.A.), refd to. [para. 32, footnote 10].

St. Saviour's, Southwark (Churchwardens), Case (1613), 77 E.R. 1025, refd to. [para. 36].

Quebec v. Bank of Montreal, [1979] 1 S.C.R. 565; 25 N.R. 330; 96 D.L.R.(3d) 586, refd to. [para. 41, footnote 13].

R. v. Lyons, Prevedoros and McGuire, [1984] 2 S.C.R. 633; 56 N.R. 6; 58 A.R. 2; 14 D.L.R.(4th) 482, refd to. [para. 59, footnote 15].

Ouellette v. Canadian Pacific Railway Co., [1925] A.C. 569 (P.C.), refd to. [para. 60, footnote 16].

Canadian Pacific Railway Co. v. R. (1906), 38 S.C.R. 137, refd to. [para. 60, footnote 17].

Somerville Belkin Industries Ltd. v. Manitoba, [1987] 5 W.W.R. 553; 49 Man.R.(2d) 204 (Q.B.), affd. [1988] 3 W.W.R. 523; 51 Man.R.(2d) 232 (C.A.), refd to. [para. 63, footnotes 19, 20].

Public Utilities Act, Re, [1920] 1 W.W.R. 31 (Alta. C.A.), affd. [1921] 1 W.W.R. 655 (S.C.C.), refd to. [para. 63, footnotes 21, 22].

Cornish v. Abbington (1859), 4 H. & N. 549; 157 E.R. 956, refd to. [para. 67].

Greenwood v. Martins Bank, [1933] A.C. 51 (H.L.), refd to. [para. 69, footnote 23].

Queen Victoria and Niagara Falls Park Commissioners v. International Railway Co. (1928), 63 O.L.R. 49 (Ont. C.A.), refd to. [para. 70, footnote 24].

Statutes Noticed:

National Parks Act, S.C. 1930, c. 33, sect. 4, sect. 6(1), sect. 7(1)(g) [para. 20].

Authors and Works Noticed:

Cheshire, Geoffrey Chevalier, Fifoot, Cecil Herbert Stuart, and Furmston, M., The Law of Contract (11th Ed. 1986), p. 236 [para. 67].

Driedger, Elmer A., Construction of Statutes (2nd Ed. 1983), pp. 127, 128 [para. 60].

Driedger, Elmer A., Construction of Statutes (3rd Ed. 1994), pp. 85, 86 [para. 35]; 492 [para. 14]; 493 to 496 [para. 39, footnote 12]; 526 [para. 14].

Griffith and Street, Principles of Administrative Law (3rd Ed. 1963), pp. 46, 47 [para. 52].

Lordon, Paul, Crown Law (1991), p. 321 [para. 70].

Williams and Rhodes, Canadian Law of Landlord and Tenant (6th Ed. 1988), p. 14-26 [para. 50].

Counsel:

Arthur Stacey, for the plaintiffs;

Paul Edwards, for the defendant;

Judson Virtue, for the intervenor.

Solicitors of Record:

Thompson, Dorfman, Sweatman, Winnipeg, Manitoba, for the plaintiffs;

Duboff, Edwards, Haight & Schachter, Winnipeg, Manitoba, for the defendant;

Macleod Dixon, Calgary, Alberta, for the intervenor.

This matter was heard in Winnipeg, Manitoba, on May 11, 2000, by Hargrave, Prothonotary, of the Federal Court of Canada, Trial Division, who delivered the following judgment in Vancouver, British Columbia, on March 26, 2001.