Donald G. Mitchell

The applicant railway company sought a declaration that its railway right‑of‑way lands were exempt from municipal taxation under s. 315(1) of the Municipal Act, 2001, on the basis that the lands were leased to another entity for valuable consideration.

The court examined the contractual arrangements between the railway owner, a rail users’ consortium, and a licensed rail operator governing the operation and maintenance of the railway line.

Applying principles distinguishing leases from licences, the court held the agreements did not grant exclusive possession or create a landlord‑tenant relationship but instead resembled a joint venture or operational arrangement.

The court further found that the consortium did not pay rent or other valuable consideration within the meaning of the statute.

As a result, the railway lands were not exempt from municipal taxation.

Following the dismissal of the plaintiff’s action, the court addressed costs submissions from the defendants.

The Township of Puslinch sought costs previously fixed at $23,400, which the plaintiff challenged as excessive and duplicative.

The court accepted that a portion of the Township’s costs duplicated a prior motion award and reduced the amount accordingly.

The court rejected the plaintiff’s argument that the award should be limited due to the plaintiff’s financial circumstances.

The Municipal Property Assessment Corporation also sought costs for the action and motion, which the court found reasonable in light of the extensive materials and history of the proceeding.