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.
