Vincorp Financial Ltd v The Corporation of the County of Oxford : The Public Interest in Expropriation
5/28/2014 9:46 AM
In Vincorp Financial Ltd v The Corporation of the County of Oxford, 2014 ONSC 2580, the Ontario Superior Court of Justice released an interesting decision concerning the ability of a municipality to expropriate lands to sell to another business for the building of a factory. In doing so, the court looked at the idea of a “public purpose” in expropriation.
The case concerns the sale by the County of Oxford of 28 properties to provide a location for a car manufacturer to construct a new factory. The manufacturer required that the property be at least 1,000 acres in size. In February 2005, Oxford commenced the process of acquiring the 28 properties to provide for the development of the factory. Oxford negotiated the purchase of 27 of these parcels of land but was unable to negotiate the purchase of the 28th parcel, on which the plaintiffs operated a shopping mall. As a result, Oxford expropriated that parcel.
Amongst other issues, the court was asked to determine whether Oxford could lawfully expropriate the mall lands to transfer to the car manufacturer for the proposed development of the plant.
The court stated that there is no dispute that a municipality has the power to purchase land, and that this includes the power to expropriate land in accordance with the Ontario Expropriations Act. Furthermore, the court stated that it is not disputed that a municipality can expropriate lands and in turn sell them to a private party so long as the expropriation is in pursuit of the public interest. In looking at public interest, the court cited The Metropolitan Stores Limited v The City of Hamilton, 1945 CanLII 59, in which the plaintiff attacked a by-law which closed part of an alley, on the basis that it was not in the public interest. The court in that case recognized that a municipal council, familiar with local conditions, is in the best position of all parties to determine what is or is not in the public interest and that courts have refused to interfere with those decisions unless good and sufficient reason is established.
The court determined that in expropriating the mall lands for sale to the car manufacturer, Oxford expropriated for a valid public purpose, noting that municipalities have broad authority under the Ontario Municipal Act to deal with the “economic, social and environmental well-being of that municipality.” Here, the municipality expropriated the lands of an operating shopping mall to sell those lands to another business. The court found that the expropriation authorized by the by-law in question exactly addressed economic well-being. This case is an example of the discretion that courts may give to expropriating authorities to determine whether a particular expropriation would serve the public interest. In making such decisions, expropriating authorities are tasked with balancing the interests of the expropriated land owner with the potential benefit of the enterprise arising from the expropriation. Given the deference paid to the decision-makers, this power must be wielded with careful consideration in order to arrive at an outcome that is truly in the public interest.
If you have questions or would like to discuss this topic further, please contact Jeremy P. Smith at Patterson Law at 1-888-897-2001.
Please note that this article is meant to provide information only and is not intended to confer legal advice or opinion. If you have any further questions please consult a lawyer. Please note as well that many of the statements are general principles which may vary on a case by case basis.