'Taking' Property

Week 6

Find these slides online: https://webslides.baxterlab.ca/slides/property2025-26/06/
Category: Property 2025-26

Agenda

Class Poll: Expropriation
Weekly Problem
Context: Property and state regulation at the turn of the century
McLaren v Caldwell
Manitoba Fisheries Ltd

Class Poll: Expropriation

https://b.socrative.com/

Room name: BAXTERDAL

The Problem: After the Protest

The Making Space for Nova Scotians Act provides:

4 Where members of the public are exercising their freedom of collective association in outdoor spaces suitable for that activity, the Protection of Property Act, RSNS 1989, c 363 is of no force or effect.

[…]

7 Outdoor spaces where members of the public normally gather are hereby re-zoned to prohibit building development or the construction of permanent structures of any kind.

Assuming that Dalhousie was entitled to exclude protestors prior to the Making Space for Nova Scotians Act, did the Province of Nova Scotia expropriate Dalhousie’s land by enacting this legislation? If so, what can the University do about it?

Property and State Regulation at the Turn of the Century

New demands on the state to prioritize public works over private landownership. But such ’takings’ were not limited to the outright expropriation of private title.
“Nor is it possible to maintain that damages will afford an adequate remedy to the plaintiff. If he were confined to this method of redress he would, in effect, be forced to submit to partial expropriation of his property … without statutory authority for such an exercise of eminent domain.” (Anglin J, Canada Paper Co)
“Government hardly could go on if, to some extent, values incident to property could not be diminished without paying for every such change in the general law.” (Holmes J, Pennsylvania Coal Co. v Mahon)

Riparian Rights

Non-navigable: riparian owner owns the riverbed (and therefore the right to use the watercourse) to the centre-line of the river: ad medium filum aquae
Navigable: if river is navigable in fact, then there is a public right to navigation; title to the beds of these rivers is vested in the Crown

Riparian owner (land along watercourse) have certain common law rights to the watercourse
Earlier English rules about riparian rights (favouring private riparian owners) gave way to Canadian context (where some watercourses seen as crucial public infrastructure)
Difference between provinces, but basic Canadian rule = riparian rights differ depending on whether watercourse is “navigable” (public highway) or “non-navigable” (private property)
Non-navigable: riparian owner owns the riverbed (and therefore use rights to the watercourse) to the centre-line: ad medium filum aquae
Navigable: if river is navigable in fact, then there is a public right to navigation; title to the beds of these rivers is vested in the Crown
River is “navigable” if possible to navigate along its length (even if some impediments like rapids or falls along the way) (but this question is also one of interpretation before the court in McLaren)

McLaren v Caldwell - In the Courts

1847/52 - Ontario passes legislation re rivers and streams
1863 - Boale v Dickson: gives Ontario legislation restrictive interpretation
1880 - Chancery Court upholds Boale and grants McLaren an injunction
1881 - Ontario Court of Appeal overturns Boale
1882 - Supreme Court of Canada reinstates Boale and restores Mclaren’s injunction
1884 - JCPC overturns SCC decision (but on federalism grounds)

Procedural history

1847/52 - Ontario legislation re rivers and streams
1863 - Boale v Dickson: Court in Upper Canada gives Act restrictive interpretation (just confirms common law water rights as applying to rivers navigable at freshnets = Act does not apply to rivers made navigable through improvements)
Caldwell runs his logs through McLaren’s waterway
1880 - Chancery Court: upholds Boale and grants McLaren and injunction
1881 - OCA: overturns Boale and lower court decision = impossible to “read in” limitation on words of the Act (if “only streams without improvements”, would basically exclude all streams in the province)
1882 - SCC: restores Chancery decision, reinstates Boale interpretation, Mclaren gets injunction = turns on “expropriation” issue
1884 - JCPC: overturns SCC decision (but decided on broader federalism grounds)

McLaren v Caldwell - In the Federal Parliament

After Chancery decision, Ontario Legislature (Liberal) enacts Rivers and Stream Act (1881).
Federal Parliament (Conservative) disallows Rivers and Streams Act several times

Interpretation of statutes affecting property

How does the Ontario Court of Appeal interpret the provincial legislation at issue in McLaren v Caldwell?

What principle of statutory interpretation does Ritchie C.J., writing for the Supreme Court, use? What is the rationale offered for this principle?

OCA

Setting is a dispute between two competitors in the lumber business
McLaren owns land on both sides of the Mississippi River in Ontario and says that stream was not navigable before he added improvements (so: claims title to river bed)
At issue is whether the interpretation of the statute in Boale was correct (as upheld in the Chancery Court, i.e. Act only applies to streams navigable in their natural state)
OCA: policy behind the act is to encourage the lumber trade in the province
Interpretation: court cannot find any qualification in the Act on “all streams in Upper Canada”
NB: OCA deals with the case as a straightforward one of statutory interpretation based on the plain wording of the Act: i.e. no qualification on “all streams in Upper Canada” AND of legislative objective (i.e. encouraging the lumber industry)
Message is that OCA resolves the dispute on the basis of prioritizing competition: this is the goal of the statute, and there is nothing in the statute to qualify that aim in the case where improvements are made to streams to make them navigable
Held: appeal allowed, McLaren’s injunction overturned

SCC

Case comes before SCC on question of whether or not OCA’s attempt to overturn Boale is correct

ASK: How does the SCC approach the case and how does it differ from OCA?

Agrees with OCA that Act is to support the lumber industry by “clarifying” that streams non-navigable by boats but floatable by logs can be used as public highways. But NOT to “interfere” with private rights in naturally non-navigable, non-floatable streams at any time of year.
THEN SCC makes crucial move: if court were to adopt Caldwell’s interpretation of the statute, this would be tantamount to EXPROPRIATION without compensation (i.e. the taking away of certain property rights – EVEN IF title remains in the hands of the owner)
Although such an interpretation might be IMPLIED from the Act, this is insufficient to find that it produces an uncompensated expropriation

PRINCIPLE: the intention to expropriate land must be “clearly and unequivocally indicated”

There can be no doubt that statutes which encroach on the rights of the subject, whether as regards persons or property, should receive a strict construction, and if a reasonable doubt remains, which cannot be satisfactorily solved, the subject is entitled to the benefit of the doubt, in other words he shall not be injured or affected in his person or property, unless the intention of the Legislature to interfere with the one or take away the other is clearly and unequivocally indicated.

Why?

Because the court regards such an intention as “unreasonable and unjust” – which can only be legitimate if this intention is made clear and unequivocal
Because the court will not place itself in the position of balancing “private right” and “public good” – this is a role for the legislature, and so it’s intention must be clear

ASK: why is it “unreasonable and unjust” for the state to expropriate property?

ASK: what about Caldwell’s argument that it is unjust/unfair for individual private property owners to impede the lumber industry for operating (i.e. to stop logs from getting downstream to market)?

Court’s answer: land in its “natural” state is unfloatable – so that it is not McLaren who is excluding others from the streams on which he’s built improvements, this is a result of its natural condition

Interpretation of statutes affecting property

The recognized rule for the construction of statutes is that, unless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation (De Keyser’s Royal Hotel, cited in Manitoba Fisheries Ltd.)

Is the application of this principle of statutory interpretation in Manitoba Fisheries Ltd. consistent with McLaren v Caldwell?

Facts

Plaintiff is a company that purchases fish from fishers in Manitoba and is involved in process and sale of these fish to other provinces and US
Federal government passes Freshwater Fish Marketing Act creating Freshwater Fish Marketing Corp and gave it exclusive right to carry on business of fish exporting = monopoly
So Plaintiff was out of business and Act did not explicitly provide for any compensation

Result

SCC awards plaintiff compensation based on common law principle (Dr Keyser’s Royal Hotel): “The recognized rule for the construction of statutes is that, unless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation.”

NB: in McLaren, result is to interpret Act as not applying at all to McLaren’s river (so nothing is expropriated); here, result is to interpret Act as expropriation and to “read in” requirement for compensation.

ASK: does the latter interpretation create more of a direct conflict between the legislature and the courts?

Legal Basis for Compensation (McLaren v Caldwell)

Why, according to the federal Conservatives, should Ontario be required to pay compensation for “taking” McLaren’s property by enacting the Rivers and Steams Act (1881)? On what legal basis?

Ontario quite clearly intends to “expropriate” McLaren’s property using the 1881 Act. So what now? Are there any further legal protections afforded to McLaren in this situation?

Remember: no constitutional protections against uncompensated takings (like in the US – see Mahon)

McLaren gets his friends in the federal Parliament to exercise power of disallowance (nullify provincial legislation).

McCarthy (pro-disallowance):

Two ideas: expropriation must be exercised (1) in the public interest and (2) with compensation
Justification for nullification is that Ontario is attempting to expropriate owners’ property without compensation
Everyone is clear about lack of constitutional safeguards
BUT compensation for expropriation in Canada and in Britain is so much of a NORM, that it justifies Parliament in acting as a kind of quasi-constitutional court – EVEN THOUGH Ontario clearly has the legal power to do this
Basically, argument is that since power of expropriation has always been exercised “responsibly”, there has been no need for constitutional safeguards (“I challenge you to find counter-examples in the legislation”)

BUT: Blake never distinguishes context of “de jure” takings from “de facto” takings. How to distinguish?

Blake (anti-disallowance):

Conservative majority is in effect adopting the mantle of the court, which is not a suitable role for the legislature
“I am content that my rights of property, humble though they are, and those of my children, shall belong to the Legislature of my country to be disposed of subject to the good sense and right feeling of that Legislature and the good sense and right feeling of the people of that Province.”

How do we know when state action amounts to a compensable “taking” of property?

Pennsylvania Coal Co. v Mahon: state regulation that prevents coal mining where it would cause subsidence.
Manitoba Fisheries Ltd: state acquisition of “goodwill” in the appellant’s business.

Back to Section 7 of the Act in our hypo: even if government must, by common law principle, pay compensation where legislation isn’t crystal clear when government “takes” and “acquires” property, is compensation ever required when government is “regulating”?

Key ideas

The line between “exercise of the police power” and “expropriation” is one of degree and contingent on the facts–but where is the line? (Holmes in Mahon)
Is it enough to take/destroy the VALUE of the property (Holmes in Mahon)?
Must something be “acquired” by government (Manitoba Fisheries)?

Pennsylvania Coal Co

Holmes:

Kohler Act is unlawful
Prohibition on mining coal destroys all value in the coal and is therefore tantamount to appropriating/destroying
Ultimately a question of “where the loss should fall”. Because the home owner here knowingly acquired only the surface rights and therefore the risk of subsidence from coal mining, the state shouldn’t give them “greater rights than they bought”

Brandeis:

Ownership is not absolute – lots of examples (e.g. prevented from creating a nuisance); every exercise of regulation “takes” some sticks in the bundle of property in some way
Restriction here is simply a “prohibition of a noxious use”
Regulation of this type doesn’t cease to be for a public purpose just because it benefits some private individuals (like the homeowner in this case). What is relevant is the purpose of the regulation.

Manitoba Fisheries

ASK: to what extent must some interest in land be “acquired” by the state in order to find an expropriation?

Manitoba: court finds that government acquires the “goodwill” in plaintiff’s business
McLaren: less clear that Ontario is “getting” something. Could this be interpreted as Ontario acquiring a “public way”?

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