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T-5337-78
Paddlewheel Village Limited (Plaintiff) v.
Commissioner of Yukon Territory and the Queen (Defendants)
Trial Division, Collier J.—Whitehorse, July 3 and 4; Vancouver, September 7, 1979.
Prerogative writs — Declaration and mandamus — Crown — Land in Yukon Territory — Reversionary interest — Proposal to subdivide lot into three lots — Lot located on outskirts of Whitehorse but included within Whitehorse city limits following extension of city boundary — Application for declaration that lot not subject to reversionary interest in favour of Federal Crown created by Territorial Lands Regula tions — Application for mandamus requiring Commissioner to approve or require changes in plan of subdivision — Whether or not the reversionary interest attached to the land, and if so, when — Whether or not the reversion applied given the nature of the subdivision — Territorial Lands Act, R.S.C. 1970, c. T-6, s. 4 — Yukon Act, R.S.C. 1970, c. Y-2, s. 46 — Territorial Lands Regulations, SOR/61-1, s. 7(1),(2).
In 1967, an agreement was concluded between the Federal Crown and a private individual for the purchase of raw land (subsequently lot 530) from the Crown, and on April 20, 1970, notification was given by the Minister permitting its registra tion. The lot was eventually sold to plaintiff. On April 24, 1972, the City of Whitehorse extended its boundaries and incorpo rated the land in question. Plaintiff, in 1977, proposed the subdivision of the lot into two lots and received the required approvals. While formal approval was still pending, however, plaintiff decided to apply to subdivide the lot into three lots. The Territorial Commissioner took no action on that applica tion. The Yukon Government raised the question of the Crown's reversionary interest—that on the subdivision of cer tain lots, one-third of the lots so subdivided revert to the Federal Crown. Plaintiff seeks a declaration that the lot is not subject to a reversionary interest and mandamus requiring the Territorial Commissioner to approve or disapprove the second plan of subdivision. The main issue is whether or not lot 530 is subject to the reservation and condition set out in paragraph 7(1)(b) of the Territorial Lands Regulations, and if so, when that reservation attached to the land.
Held, the applications are allowed. The original agreement for sale clearly falls within the words "Every agreement for sale ... of territorial lands ...". The reversionary condition set out in paragraph 7(1)(b) of the Territorial Lands Regulations then became part of the agreement and ran thereafter with lot 530. There is nothing which takes away from the Crown any rever- sionary rights. The expression "townsite lots" includes land, suitable for subdivision into lots, which is part of the site of an existing town, or in some cases, a proposed or contemplated town. The subdivided lots must be serviced by streets, services, and the other usual facilities and appendages. Those streets and
services must either exist or be proposed or contemplated. While the subdividing referred to in paragraph 7(l)(b) need not be that frequently carried out by a commercial developer, the draftsman had that situation in mind when he provided for the reversionary interest in respect of tracts of raw land, ten acres or more in size, being purchased and then later carved up into lots for commercial or residential purposes in a city or town. Lot 530 and the surrounding area could not, at any material time, be considered part of a townsite. Merely includ ing it within city boundaries did not convert it from a rural or partially developed area on the outskirts of a townsite into a townsite lot. The reservation, therefore, does not apply. The Commissioner has a duty to approve the plan in question or require that it be amended.
Nowlan v. Commissioner of the Yukon Territory S.C.Y.T. No. 359/77 (unreported, June 16, 1978), followed.
APPLICATIONS. COUNSEL:
I. J. Cable for plaintiff.
S. B. Horton for defendant Commissioner of
Yukon Territory.
G. O. Eggertson for defendant the Queen.
SOLICITORS:
Cable, Veale, Cosco & Morris, Whitehorse, for plaintiff.
S. B. Horton, Whitehorse, for defendant Commissioner of Yukon Territory.
Deputy Attorney General of Canada for defendant the Queen.
The following are the reasons for judgment rendered in English by
COLLIER J.: The plaintiff is the owner of lot 1004 Quad. 105-D/11. It is now within the bound aries of the City of Whitehorse in the Yukon Territory.
The plaintiff proposes to subdivide the lot into two. A subdivision plan was presented for approval to the defendant, the Commissioner of the Yukon Territory. A dispute arose as to whether the land in question was governed by subsection 7(1) of the Territorial Lands Regulations, SOR/61-1. That dispute gave rise to this lawsuit.
The Regulation provides, generally speaking, that on the subdivision of certain lots, one-third of the lots in the land so subdivided shall revert to the Federal Crown. I shall later set out, verbatim,
certain of the Regulations, including subsection 7(1).
In this litigation the plaintiff is claiming a decla ration that the lot in question is not fixed with the so-called reversionary interest. Further relief, in the nature of mandamus, is sought against the Commissioner, requesting him to approve the sub division plan or to require it to be amended.
A large part of the material facts is not in dispute. Lot 1004 was originally part of lot 530, in group 804 in the Yukon Territory. Another lot, 532, adjoins lot 530.
On January 25, 1965, Albert George ter Voert ("ter Voert") became the purchaser from the Fed eral Crown, under an agreement of sale, of lot 532.
On February 14, 1966, ter Voert applied to purchase lot 530. The land was to be used, in conjunction with lot 532, for a tourist campsite. An agreement of sale, dated October 11, 1967, between the Federal Crown and ter Voert, was entered into in respect of lot 530. The agreement provided the purchaser would, by September 1, 1969, put improvements, at a value of not less than $10,000, on the land. The purchaser also agreed, before letters patent issued, to have the land sur veyed by a Dominion land surveyor.
The survey was carried out and recorded under No. 55860 in the Canada Lands Surveys Records at Ottawa. It was registered in the Yukon Land Registration District on March 13, 1970.
On April 20, 1970, the Minister of Indian Affairs and Northern Development directed the Registrar of the Yukon Land Registration District to issue a certificate of title in respect of lot 530 to ter Voert. The certificate itself issued on April 23, 1970.
Both lots 530 and 532 were sold, shortly after, to Equity Investments (Yukon) Ltd. In respect of lot 530, the transfer was dated May 8, 1970, and registered May 21, 1970.
One Douglas Belley, in the summer of 1970, was employed by Equity Investments as manager of the lands. Tourist facilities and a campsite were being operated there.
Belley is now the president and majority share holder of the plaintiff. He has held those positions since June 1971.
Equity Investments sold lot 530 and lot 532 to the plaintiff. In respect of lot 530, the transfer was dated January 5, 1971, and was registered January 15, 1971. Title 341 "WW" was issued to the plaintiff.
I now set out section 7 of the Territorial Lands Regulations:
Sale of Territorial Lands
7. (1) Every agreement for sale and every grant of territo rial lands other than surveyed territorial lands in a townsite shall be deemed to contain the following reservations and conditions in addition to those prescribed by the Act:
(a) a reservation of such part or parts of the land as may from time to time be appropriated by Her Majesty in right of Canada for the purpose of a public road; and
(b) where the land sold has an area in excess of ten acres, the condition that if the owner subdivides the lands or any portion thereof into townsite lots one-third of the lots in the land so subdivided shall revert to the Crown.
(2) Lots to which the Crown is entitled under paragraph (b) of subsection ( 1 ) shall be selected as follows: the owner shall first select two lots and the land agent shall then select one lot for the Crown and this shall be repeated until all lots are selected.
Those Regulations were made pursuant to the Territorial Lands Act'. Section 4 of that Act is as follows:
SALE OR LEASE OF TERRITORIAL LANDS
4. Subject to this Act, the Governor in Council may author ize the sale, lease or other disposition of territorial lands and may make regulations authorizing the Minister to sell, lease or otherwise dispose of territorial lands subject to such limitations and conditions as the Governor in Council may prescribe.
The plaintiff wished to subdivide lot 530. Mr. Belley instructed Mr. J. F. Welter, a Dominion land surveyor. On November 22, 1977, a prelim inary sketch plan of the proposed subdivision was submitted to the City of Whitehorse. The proposal was to divide lot 530 into two lots, lot 530-1 and lot 530-2. A similar plan was sent to the Commis sioner on December 16, 1977, (Ex. 15). Provisional approval was given by the city on November 28, 1977, and by the Administrator of the Yukon
' R.S.C. 1970, c. T-6.
Territory on December 30, 1977.
I described the approval as provisional. Before formal approval is given, a survey must be carried out and the formal plan and field notes submitted. There were some changes made in the proposed boundary lines of the new lots. As well, the num bering of the lots was changed, from those set out above, to lot 1004 and lot 1005. The field work and survey were carried out between January 18 and January 25, 1978.
No one raised the question of, on this proposed subdivision of lot 530 into two, the Crown's right to a reversionary interest. I assume that was because subsection 7(2) of the Regulations con templates a subdivision into at least three lots before the Crown is entitled to select one.
While formal approval was still pending, Mr. Belley decided to apply for a subdivision into three lots. On January 12, 1978, a preliminary sketch plan was submitted. (Ex. 13.) The proposal was to divide lot 530 into three lots, described as lot 530-1, lot 530-2, and lot 530-3.
It was at this stage that the Government of the Yukon Territory raised the question of the Crown reversionary interest (see Ex. 18, dated February 7, 1978).
But the proceedings in respect of subdividing lot 530 into lots 1004 and 1005, nevertheless, con tinued. The City of Whitehorse gave formal approval on February 27, 1978. The Commissioner of the Yukon Territory gave his formal approval on March 14, 1978.
On April 19, 1978 (Ex. 19) a preliminary sketch plan of the proposed subdivision of lot 1004 into two lots was submitted. I presume this new plan was prepared, in substitution for the plan tendered on January 12, 1978, because the lot numbers had changed.
On April 25, 1978, Mr. Welter wrote to the Government of the Yukon Territory taking issue with its position that the reversionary Regulation applied. Ultimately the Government of the Yukon Territory replied, (Ex. 23) setting out its opposing views.
The matter had then reached an impasse. The Commissioner did nothing. He neither approved the plan submitted on April 25, 1978, nor did he require it be amended. It seems obvious the parties felt the matter would likely have to be resolved by litigation.
The main issue is whether lot 530 is subject to the reservation and condition set out in paragraph 7(1)(b) of the Regulations. There is some doubt, among the parties, as to which document in this case is deemed to contain the reservation in ques tion: the agreement of sale with ter Voert, dated October 11, 1967, or the notification (Ex. 3) dated April 20, 1970. In the Territorial Lands Act "grant" means, among other things, a notification.
At the time of the agreement of sale these lands were unsurveyed territorial lands. At the time of the notification they were surveyed. Counsel were, in argument, of the view that section 7 of the Regulations is not well drafted. I agree. Counsel also concurred that the first line of subsection 7(1) should be read as if there were a comma after "lands" and a further comma in the second line after the word "townsite". I, again, agree.
If one adopts a literal construction of the first line of subsection 7(1), both the agreement for sale and the grant, in this case, are deemed to contain the reservation set out in paragraph (b). The only caveat, in respect of the notification of April 20, 1970, is whether lot 530 was, at that time, "in a townsite".
As I understood Mr. Eggertson, counsel for the Queen, and Mr. Horton for the Commissioner, neither of them contended lot 530 was, at the date of the notification, "in a townsite". Both counsel took the view, however, that at the time of the proposed subdivision, in 1978, of lot 530 into 3 lots (or lot 1004 into 2), the plaintiff was subdividing "into townsite lots." This contention was primarily based on the enlarging, in 1971 or 1972, of the boundaries of the City of Whitehorse. That exten sion embraced lot 530 and a large area surround ing it. In argument, Mr. Horton said the effective date of the boundary extension was April 24, 1972. From that date on, the submission ran, lot 530 was in a "townsite"; any subdivision thereafter, into 3 or more lots, was into "townsite" lots.
All that raises the interpretation to be given to the word "townsite", used in this Regulation both as a noun and an adjective.
Before embarking on that task it is necessary, I think, to determine which document one should first go to, in order to decide whether the land here falls within the expression "townsite". In my view, the ter Voert agreement for sale clearly falls within the words "Every agreement for sale ... of territorial lands ...." The reversionary condition set out in paragraph (b) then became part of the agreement; it ran thereafter with lot 530.
Counsel for the plaintiff contended that if that were the case, the reversionary interest, deemed included in the agreement for sale, did not "sur- vive the turn-over of the administration of certain territorial lands by Her Majesty to the Yukon Territory." By Order in Council, dated August 19, 1970 (Ex. 29), the Crown transferred to the Yukon Territory "the administration of all right, title and interest" of the Crown in certain territo rial lands set out in a schedule to the Order in Council. Lot 530 was included.
Section 46 of the Yukon Act e was referred to:
Lands
46. The following properties, namely,
(a) lands acquired before or after the 1st day of April 1955 with territorial funds,
(b) public lands, the administration of which has before or after the 1st day of April 1955 been transferred by the Governor in Council to the Territory,
(c) all roads, streets, lanes and trails on public lands, and
(d) lands acquired by the Territory pursuant to tax sale proceedings,
are and remain vested in Her Majesty in right of Canada, but the right to the beneficial use or to the proceeds thereof is hereby appropriated to the Territory and is subject to the control of the Commissioner in Council; and any such lands, roads, streets, lanes or trails may be held by and in the name of the Commissioner for the beneficial use of the Territory.
It was argued the effect of section 46 was to give the Commissioner the right to make his own rules in respect of the administration and control of lands such as lot 530; the Commissioner had made
2 R.S.C. 1970, c. Y-2.
no requirement of a reversionary interest on sub division into townsite lots.
I do not quite understand that contention. But viewing it in the way it was propounded, there is nothing in section 46, in my opinion, which takes away from the Crown any reversionary rights. The land in question remains vested in the Crown. The reversionary right remains also, as I see it, vested in the Crown.
The remaining issue, then, is whether the plain tiff's proposed subdivision is into townsite lots. That is a difficult question.
All counsel said they had been unable to find any reported cases interpreting the expression "townsite". Counsel for the plaintiff relied on several elderly English decisions, interpreting the word "town". 3 The English decisions referred to are helpful, but inconclusive.
Dictionary meanings are in somewhat the same category. The dictionaries I consulted do not refer to the word "townsite". But I assume it can be said townsite implies the site of a "town". The Shorter Oxford English Dictionary (3rd ed.) 1965, defines "town", inter alia, as follows:
Now commonly designating an assemblage of buildings, public, and private, larger than a village, and having more complete and independent local government; applied not only to a "bor- ough", and a "city", but also to an "urban district", and sometimes also to small inhabited places below the rank of an "urban district".
The Living Webster Encyclopedic Dictionary of the English Language (1971) has a similar definition:
A collection of inhabited houses larger than a village and having more complete local government; a city or borough; ... the chief town or city of a district or country; the central area of a city; a municipal corporation, in New England, with less elaborate organization and powers than a city; a township, in states excluding New England; the townspeople.
I have endeavoured to find guidance from the meaning of "township" given in dictionaries or statutes. The Shorter Oxford Dictionary gives one description as follows:
5. U.S. and Canada. A division of a county having certain corporate powers of local administration (in the newer states, a division six miles square, and so called even when still unset tled); the same that in New England is called a town 1685. 6.
3 Elliott v. The South Devon Railway Company (1848) L.J. 17 Ex. 262. Lord Carington v. Wycombe Railway Com pany (1867-68) 3 L.R. Ch. App. 377. Falkner v. Somerset and Dorset Railway Company (1873) L.R. 16 Eq. 458.
In Australia, A site laid out prospectively for a town 1802.
A similar description is given in the Living Webster.
The Canada Lands Surveys Act 4 provided (sec-
tion 33) 5 :
... public lands shall be laid out in quadrilateral townships.
Each township contains thirty-six sections, each section being nearly one mile square (section 35) 5 .
Section 46 of the statute referred to the bound ary lines of "townships, sections, legal subdivisions or other authorized subdivisions of public lands". 6 But no definitions or descriptions of those words or phrases are given.
I note, also, the Land Titles Act 7 (which applies to territorial lands) contemplates subdivision (sec- tion 83), as well as subdivision for purposes of "laying the land out as a town-plot" (section 86). "Town-plot" is neither defined nor described. But it seems to contemplate what one would normally expect to find in a subdivision plan: roads, streets, passages, etc. (see particularly subsection 86(2)).
But all of the above is, I fear, of little help in coming to an accurate conclusion as to what the drafter of the Regulations had in mind when he used the expression "townsite lots".
In my view, that expression includes land, suit able for subdivision into lots, which is part of the site of an existing town, or in some cases, a proposed or contemplated town. The subdivided lots must, as I see it, be serviced by streets, services, and the other usual facilities and append ages. Those streets, services, etc. must either exist or be proposed or contemplated. While the subdi viding referred to in paragraph 7(1)(b) need not be that frequently carried out by a commercial developer, it seems to me the draftsman had that situation in mind when he provided for the rever- sionary interest in respect of tracts of raw land, 10
4 R.S.C. 1970, c. L-5.
5 Subsequently repealed by S.C. 1976-77, c. 30, s. 22.
6 Subsequently amended by S.C. 1976-77, c. 30, s. 26.
7 R.S.C. 1970, c. L-4.
acres or more in size, being purchased and then later carved up into lots for commercial or resi dence purposes in a city or town.
The evidence in this case shows that lot 530 and the area surrounding it, both before and after the extension of the City of Whitehorse boundaries, was not developed in what I would consider to be along townsite lot characteristics or lines. There was, and is, in the general area of lot 530, no lay-out of streets, roads or public thoroughfares in the usual sense. The lands in that area were, in 1967 and since, mainly publicly owned and, gener ally speaking, undeveloped. At lot 530 in particu lar, there were and are no public services, such as sewage, water, or mail delivery. Mr. Belley installed his own water and sewage systems. Elec tricity is not obtained from the city, but from a private company.
In my view, lot 530 and the surrounding area could not, at any material times, be considered part of a townsite. It was essentially in 1967 and in 1970 a rural, or partially developed area, on the outskirts of a townsite.
Merely including it within city boundaries in 1971 or 1972 did not, without more, convert it from that characterization into a townsite lot.
,The reservation, therefore, does not apply. There will be a declaration accordingly.
The Commissioner, pursuant to the Land Titles Plans Regulations, SOR/57-20, has a duty to approve the plan in question, or require it to be amended.
Following the decision of Maddison J. in Nowlan v. Commissioner of the Yukon Territory, 8 there will be an order in the nature of mandamus directing the Commissioner to approve the sketch- plan as submitted in respect of the proposed sub division of lot 1004, or to return it to the plaintiff for amendment. Any amendment required, cannot of course, include a reservation of one lot in favour of the Crown.
The plaintiff is entitled to its costs.
8 S.C.Y.T. No. 359/77 (unreported, June 16, 1978).
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