Who says law and property rights can't be riveting? Brace for a legal deep dive unravelling the complexities of the Short Term Rental Accommodations Act in British Columbia. It's not every day you get to compare it to governmental property seizure, but we dare to tread those intriguing waters. We pick apart the legal precedents for compensation in cases where the government appropriates property and delve into the Supreme Court of Canada's ruling in the Annapolis Grouping v. Halifax Regional Municipality case. And that's just the tip of the iceberg!
We also discuss building permits, how court decisions are interpreted, and even explore the Canlii website for a dose of free case law knowledge. This episode is a must-listen for anyone keen on property rights and the intricacies of the law!
Follow this link for a transcript of the case and links to the cases discussed.
Who says law and property rights can't be riveting? Brace for a legal deep dive unravelling the complexities of the Short Term Rental Accommodations Act in British Columbia. It's not every day you get to compare it to governmental property seizure, but we dare to tread those intriguing waters. We pick apart the legal precedents for compensation in cases where the government appropriates property and delve into the Supreme Court of Canada's ruling in the Annapolis Grouping v. Halifax Regional Municipality case. And that's just the tip of the iceberg!
We also discuss building permits, how court decisions are interpreted, and even explore the Canlii website for a dose of free case law knowledge. This episode is a must-listen for anyone keen on property rights and the intricacies of the law!
Follow this link for a transcript of the case and links to the cases discussed.
time for a regular segment with a barrister and solicitor, with mulligan defense lawyers. Michael mulligan with legally speaking here on cfax 1070 morning, michael, how we doing day. Good morning, I'm doing great. Always good to be here. There's been a lot of talk about the short term rental accommodations act in the various implications.
Michael Mulligan:I've heard some people suggest it's akin to the government's seizing property and I know that you have some thoughts on it this week indeed, and that's a really interesting insight and there's been a change in the law in canada about that very issue, uh, and so I expect there will be some form of legal challenge to this legislation, assuming it uh passes and this is probably the form it will take and the background of that uh comes from a proposition that's been around it common law for a very long time. There's a classic statement of it to in a case that dates back to eighteen, ninety three and the. The principal there is that where property real property, that's uh is uh confiscated by the government, there is a legal presumption, uh that the intention of the legislature was to provide compensation for it, unless there is very clear wording that says, no, we're taking a property with no compensation. Uh, and the. The classic statement of that proposition comes from a case that's london in the northwestern railway company. So it's a really old case and really what it amounts to, a sort of a principal of statutory interpretation. So the idea there would be sort of presuming that the legislature wants to act in a fair fashion and not to prize people of their property without their compensation seems like a pretty good principle, uh and uh. That principle is in a particularly important one uh, both in canada and in the uk uh, because in both exit, both uh canada and the uk, there is no constitutional protection for property rights uh, unlike in the united states uh, and so this, this is sort of a protection for that, as a matter of such interpretation and the common law.
Michael Mulligan:One of the uh really a good things about it uh is that it involves over time to take into account uh sort of changing uh circumstances, and indeed such an evolution occurred uh by the supreme court of canada just last year uh in a case called anapolis grouping versus the halifax regional municipality, and that case involves a company which uh started acquiring property back in the nineteen fifties near halifax, and they eventually acquired nine hundred and sixty five acres of land. They intended to eventually develop the property uh, and indeed the property was uh zoned in such a way uh that the contemplated future development that the language nearly used with service development, and they made a number of efforts to try to develop the land, starting in two thousand and seven various proposals to the local municipality, which had no success ultimately, and then finally in twenty sixteen, halifax adopted a resolution uh saying they were not going to initiate there what they call the secondary planning process, sort of what would be required to get municipal approval to proceed with developing this uh, and indeed this property, which was really undeveloped in the trees and so on on it, the uh municipality started referring to it asa, parkland uh, and uh, that's where it's at, and the company's soon uh, the municipality uh it halifax, saying that processing we're not going to permit you to develop it and suggesting that it can be used as parkland uh, amounted to constructively taking the property from them. And the interesting thing about that argument is usually, when the government is taking your property, it's going to be clear in the sense that you know they've taken your title away and built a road. And then it's very clear you've taken my property, is now a highway, my house is gone or whatever, but no, what happens when the municipality just says, well, we don't need to take your property, we'll just call it a park and won't let you build anything on it. Well, you still own it, I guess in some nominal way, but you could do nothing with it. And so that was the argument.
Michael Mulligan:And when they were sued, the municipality was sued, they said, well, this has no chance of success, we haven't taken your property, we've just refused to allow you to develop it. And that argument succeeded at the appeal level in Nova Scotia. But it got appealed to the Supreme Court of Canada in this case and the Supreme Court of Canada the majority there disagreed and they found that there is a there is legitimate scope for regulation involving land. We're all familiar with that right Sort of building codes or you know how big your house can be, or you know you can't put a slaughterhouse in downtown Victoria, whatever it might be right, all kinds of regulations we have.
Michael Mulligan:But they said that there is a line between effective, valid regulation and when the regulation goes so far as to this is a language used interferes with the enjoyment of the property in a substantial and unreasonable way or effectively confiscates the property, and where the effect of that is to virtually abolish any reasonable use of the language of the property, that amounts to a confiscation of the property and means that the owner could be entitled to compensation. In the absence of clear language which would say we're taking your property and you're getting nothing, which of course would be pretty. You know the Hugo Chavez, you know language saying the, you know the government is coming in and taking your factory, or whatever it might be, that would be probably some political response to the kind of clear legislative language that would be required to override this principle right. It would effectively amount to where nationalizing your property without compensation tough luck, and no doubt there would be political implications to that sort of a high-handed approach. And so this case sort of shifts the analysis from has the government taken it to? Have they sort of gone overboard with regulations such that they've removed all again reasonable use of the property? And so you could well imagine, in the context of this short-term rental legislation, an argument being made about whether the degree of regulatory control over the property amounts to first of all that and then second of all and this is also a component of it in order to get compensation for the effect of taking of your property.
Michael Mulligan:There is a concept in this case which involves there has to be a finding that some benefit has sort of public benefit has accrued.
Michael Mulligan:Right, if they just said, like you can't put a slaughterhouse in and there was no particular beneficial or benefit or advantage gotten by the state, you likely couldn't recover for that. But in the case the Supreme Court of Canada case, the sort of government or public benefit was this suggestion that by the municipality well, this is just like a park, go walk your dog, maybe off leash and so that was enough to constitute the kind of benefits that could result in a finding that there should be compensation for the company. And so here, under the short-term rental accommodation act, it's clear the government is saying yes, there's public benefit to this, we're going to have cheaper housing or more housing available, the same sort of benefit that might accrue by saying you know, you can go walk your dog in the park we are preserving by not allowing anything to be built on the land this person owned, and so on the language of this case. The argument would be whether the effect of that act right as that public benefit element.
Michael Mulligan:That seems likely. So, and then the issue would be is this the kind of, you know, a substantial and unreasonable interference with the use of property, such that you are effectively left with no other reasonable use of the property? Now that could be an argument, right? You might say, well, you just rent that out. But you hear some owners saying, look, I've got some tiny apartment that may not be subject to effective rental, for example. Right.
Michael Mulligan:And so the other thing to remember about all of this in this case right is it is an example of how the law evolves and responds to, you know, changes in circumstances over time. Right, when that original case they referred to for more than 100 years ago came out. Right, that would have been a time when you wouldn't have had the same sort of, you know, regulatory control over what people can do with their property. Right, which is not something that's existed always and forever. Right, the idea of zoning and bylaws and so on we're all used to them now, but those didn't always exist. They are, and the degree to which they exist is a relatively modern phenomenon, and so this case from the Supreme Court of Canada is an example of how right there can be adjustments to the common law to achieve generally what would this is one of the beauties of law. Right is generally the law is going to try to come to an outcome which people would broadly think to be fair and sort of you know, compliance with community values. Right and sort of the idea that you know the legislature is going to presume not, you know, we're going to presume the legislature isn't trying to unfairly confiscate people's property, we're going to have a strong presumption to the contrary is an example of that and this shows how that can evolve.
Michael Mulligan:And while I don't, I can't predict what the outcome would ultimately be to a challenge thing to the kind of restrictions that are proposed by that short-term rental accommodation act legislation, I can well imagine, reading this case, that there would be at least a an argument to be made about whether absolute, whether an absolute prohibition on renting out property for a short-term rental could at least arguably amount to a substantial and unreasonable interference with property rights.
Michael Mulligan:And, on the language of this case, you would then have to have an argument about whether there was any other reasonable use for the property and you would then have an argument about whether the government has taken some benefit for itself or some public benefit, and that part at least seems to be made out on the way the Supreme Court of Canada analyzed it in this case. So we'll have to keep an eye on this and see how that plays out. Of course, all of this is subject to all the usual political machinations of condo kings and changes in government and all of that. So it may well be there's some political response prior to there being a legal analysis. But the case demonstrates that there may well be a legal analysis to be had or a legal argument to be had about whether what the government's doing can be done without compensation under that act as it's currently written.
Adam Stirling:Fascinating, I have somebody texting me. Just for confirmation the style of cause of this case, it's Annapolis Group Incorporated versus Halifax Regional Municipality, correct.
Michael Mulligan:And the site for it would be. The neutral citation from the Supreme Court of Canada is 2022, scc 36. So if you type that into Google, or you went to the Supreme Court of Canada website or you go, there's another free site people may be interested in called Canley, which is a site that allows you to get access to all decisions that are reported, and it's free. The website for that is wwwcanleycanliorg, and that allows you to put in like a case name or the kind of citation that I just read, or even text from a case to find it. And then the other interesting thing about it is, if you find a case on Canley, it also allows you to click on a link and see other cases that have considered it Right, like, since this Supreme Court of Canada case in 2022, no doubt there would be other trial decisions and courts having to wrestle with.
Michael Mulligan:Well, what does this mean and how should we interpret it? And so you'd be able to read those as well to try to get a sense of how courts are handling it. This particular case the outcome of the Supreme Court of Canada decision was to send the case back or trial in Nova Scotia, and there can then be a trial and evidence led to sort out whether the particular scheme there and not allowing the company to develop this property meets the legal test that the Supreme Court of Canada is set out. So, anyway, that's a useful site. It used to be. You had to pay to get access to case law like that, which wasn't great, and this system is run by the Federation of Law Society, so all the law societies across the country contribute money to pay for it, and it provides access not only to lawyers but the public, so you can go there and read all of the decisions and read how they've been considered since. So that's candid.
Adam Stirling:Michael Mulligan with Mulligan Defense Lawyers, legally speaking, will continue right after this break. Back on the air here at C-5xten 70. Michael Mulligan with Mulligan Defense Lawyers, legally speaking. Michael up next, a credit card company and appeal a default judgment and attempted collections. How does it all fit together?
Michael Mulligan:It all fits together. So this is a case that was brought by Capital One, who had issued master cards to a couple and Capital One alleged that this couple didn't pay their master card bills. They were pretty big bills. When you told them up here it was $50,000, just shy out. So that's a pretty good master card. And the way it works is they were the company.
Michael Mulligan:Capital one was suing these people in provincial court small claims court to try to recover the money, and the first step in that process is you need to serve the person with the notice that you're suing them so they can respond to it. Right, yes, and the provincial court rules try to make that a little easier than how it would work in supreme court, to try to make it cheaper and more a user friendly, basically, and the rules provide that you can serve somebody using registered mail. That's one the ways you could do it, uh, and registered mail would ordinarily involve, you know, letter being delivered to you that you sign for, and so they'd be able to say, okay, well, we were trying to prove that you got notice of this thing in that way. Here. Capital one sent out the notice using express post, which is a service by the, the, you know post office. But it tracks the delivery of something but doesn't require a signature for it.
Michael Mulligan:And so what happened? Is they sent out this notice, uh, and I guess the tracking showed it got delivered to the mailbox, uh, and then there was no response to it. So, capital, one was able to get default judgment. And default judgment is what happens when you get sued and don't reply. Right, the other side wins.
Michael Mulligan:Yes and then what happened is the couple when they got served, they got personally served with the uh Notice of the default judgment, because I guess capital one, then one to get on with collecting their money. And the couple applied in provincial court to set aside the default judgment. And they showed up in court at that point they had a lawyer helping them and they said we didn't get that, we didn't get the notice, we don't know what happened to him, we never received it. And as soon as we got notice, here we are Uh, but to set aside a default judgment, you need to also show that you have some potential Defense to the case, right, so well, why should you now have a trial? Yes, and one of the arguments they made was well, the provincial court rules Also require that if you are suing somebody in provincial court, you need to do so in the court registry which is nearest to where the defendant lives or carries on business or or the transaction or events that resulted in the claim took place. And the couple said we live in Surrey. They sued us in the downtown Vancouver court registry. There's a court registry in Surrey. You sued us in the wrong one and they made that argument in provincial court and the judge there didn't have any time for it. He basically said no, we're not setting aside the default judgment.
Michael Mulligan:And so the couple appealed that decision to the BC Supreme Court. And it's an interesting decision. First of all, the Supreme Court judge who heard the Judicial review of the provincial court decision didn't take kindly to the reasoning of the provincial court judge. One of the interesting things about the decision is the Supreme Court judge Names the provincial court judge four times In his and I think it's his analysis of the decision, which is kind of unusual. Most of the time, just as a matter of sort of maybe courtesy, it's sort of it you don't usually on the appeal have the judge repeatedly named. I mean, if you want to figure it out, you could go to canly. We just talked about it. Click on the earlier decision. Yes, but in this case the Supreme Court judge took the time to personally name the provincial court judge four times and Criticize the judge, saying look, this wasn't adequate in terms of reasoning and your decision was unreasonable, and found that the couple ought to have their day in court.
Michael Mulligan:The other thing which is interesting there as you can tell that the counsel for capital one was obviously a bit concerned about the possible Implications of this.
Michael Mulligan:He had filed the athlete as a David, saying that over 15 years he had commenced 500 claims, presumably for capital one credit card companies he described as my clients From this downtown Vancouver provincial court registry and used express post and got default judgments.
Michael Mulligan:And so no doubt capital one is or at least counsel for capital one it's gonna be a little worried now that you've got a Supreme Court judgment finding that it was unreasonable To not allow this argument about whether the couple was served properly and as well With respect to service being effective by using express post without a signature Saying you know, it's just not clear, that's registered mail.
Michael Mulligan:These people say they never got it and when they did get something they showed up right away. And so the results here is going to be for both this couple and perhaps others who are being sued in that way. They will have an argument to be made and it will be interesting to see what the outcome is and probably in the course of things there are only going to be a few crocodile tears for capital one master card. And so this is a perhaps a victory for the couple and maybe the all the people that might be in that Position, and so the couple will have the default judgment set aside and they will get back and get to have their their day in court.
Adam Stirling:We have just over two minutes left. The next story is an interesting one. You think we can do it.
Michael Mulligan:Yeah, I think we can. So the last story for the day it's out of Surrey and it's a case involving a couple who built a home and then just kept on building. In addition to building the home, they built what we described as two structures which are two stories tall and Contained at least two rental apartments. While they were building these additional structures, I guess the building inspector noticed and said you don't have permits for these structures, stop building. And came out and put stop work orders up, stop building these things, which were then just ignored. And the couple wound up constructing these sort of add-ons to their house which they then rented out. And so this was an application brought by the city to have the add-ons destroyed, and the couple argued against it, saying well, hold on. One of the things they Cited was the British Columbia Homes for people and action plan to meet the challenge of today's today and deliver more homes for people faster. And they said look, yeah, we there thought enough housing In order to demolish our additions here Is excessive, and particularly in the context of providing rental units, which were indeed rented. And but that did not carry the day.
Michael Mulligan:The judge concluded there was no way to Retroactively get permits for these structures because they were too close to the property line, way over the maximum amount you were allowed to build, and even though the result of this was going to be at least two people getting evicted and the rental accommodations knocked down, the judge found you just can't count on those people, ignoring the stop work orders, building the things anyways and renting them out, and found that there was just no way that these things could be retroactively approved. There was no way to inspect them, and even if you could properly inspect them, they were just way too big and too close to the property line and every other problem. And so that's the result and I guess the the life lesson there is when you get the stop work order, have for building something, stop Lest you wind up in a circumstance where you're actually ordered to knock it down. So two less rental houses in Surrey. They should have gotten the permits.
Adam Stirling:Michael Morgan with Morgan offense lawyers, legally speaking during the second half of our second hour every Thursday. Pleasure, as always, until next week. Thanks so much. Have a great day.