SUPREME COURT OF NOVA SCOTIA
Citation: Lloyd MacLellan Construction Services Limited v. Halifax (Regional Municipality), 2014 NSSC 118
Date: 20140515 Docket: Hfx. No. 276935 Registry: Halifax
Between:
Lloyd MacLellan Construction Services Limited
-and-
Halifax Regional Municipality
LIBRARY HEADING
Judge: The Honourable Justice Robert W. Wright
Heard: March 24, 25 and 27, 2014 at Halifax, Nova Scotia
Written
Decision: May 15, 2014
Subject: Contractual and bad faith damages claim against Municipality.
Summary: A local developer planned to build an industrial park in the Goodwood area. In order to do so, it required an easement for a road to be built across HRM lands that would provide the necessary access to the lands to be developed. The developer and HRM staff reached an agreement on the terms for the granting of the easement but when it was submitted to Council for approval (in 2006) Council imposed a further condition that it be subject to an acknowledgment from the Minister of Environment that an environmental impact assessment be carried out should an application for an asphalt plant in the industrial park come forward (which was anticipated from a third party LaFarge).
Ultimately, the Minister declined to order such an assessment without which HRM refused to grant the easement and the entire project collapsed. In an earlier proceeding in this court, it was declared that the environmental protection condition thus imposed was beyond the authority or jurisdiction of HRM and was therefore ultra virus (the decision being in the exclusive domain of the Department of Environment). The plaintiff then sued HRM for damages based on a claim in contract or, alternately, bad faith damages.
Issues:
a. Was the Municipality in breach of a contractual duty to grant MacLellan an easement over its lands following the decision invalidating the environmental condition?
b. Did the Municipality act in bad faith by taking into account environmental concerns in dealing with its lands and if so, is it liable for damages?
Held:
(1) The passing of the motion by HRM conditionally approving the granting of the easement did not thereby form a contract between the developer and HRM; nor was a contract later formed residually by the striking down of the impugned condition.
(2) The court found that there was no deliberate or intentional exercise of bad faith on the part of Council in passing the motion that ultimately prevented the plaintiff’s proposed development when the environmental condition could not be met. Rather, Council simply chose the wrong means in trying to promote a legitimate objective of taking environmental protection concerns into account as part of the proposed agreement. Although this was the exercise of a business function by HRM for which there was no immunity in law, the plaintiff failed to establish the tort of abuse of public office. Neither was the court persuaded that the plaintiff could succeed in a claim for damages as an administrative law remedy outside the conventional tort analysis. The plaintiff’s claim was therefore dismissed.
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