Venne v. Quebec (Commission de la Protection du Territoire Agricole), 1989 CanLII 84 (SCC), [1989] 1 SCR 880
Commission de protection du territoire agricole du Québec Appellant
v.
Daniel-Joseph Venne Respondent
and
Honourable Minister of Agriculture Attorney General of Quebec, representing Her Majesty the Queen in right of Quebec Mis en cause
and
City of St-Hubert Mis en cause
and
Winzen Land Corporation Ltd. Mis en cause
indexed as: venne v. quebec (commission de la protection du territoire agricole)
1987: May 11, 12; 1989: April 20.
Present: Beetz, Lamer, Wilson, Le Dain* and La Forest JJ.
on appeal from the court of appeal for quebec
Environmental law -- Protection of agricultural territory -- Application of law -- Acquired rights -- Seller reserving right of ownership over lots sold until selling price paid in full -- Lots included in designated agricultural region after sale but before ownership of lots transferred to buyer -- Whether seller can alienate lots without authorization of Commission de protection du territoire agricole -- Whether clause reserving ownership is suspensive condition retroactive to date of contract of sale -- Whether buyer has "acquired right" to conveyance of ownership -- Whether statute retroactive because it affects agreements concluded before it took effect -- Act to preserve agricultural land, S.Q. 1978, c. 10, ss. 1(3), 29, 101 -- Civil Code of Lower Canada, arts. 1079, 1085, 1089.
Civil law -- Obligations -- Sale -- Seller reserving right of ownership over lots sold until selling price paid in full -- Whether seller's obligation to convey ownership of lots once price paid conditional obligation or obligation with term -- Civil Code of Lower Canada, arts. 1079, 1085, 1089.
On May 14, 1977, respondent bought two subdivided lots from Winzen, a commercial corporation specializing in the purchase and sale of real estate for residential development, and signed a standard sale contract. Under this agreement, respondent undertook to pay the purchase price in 84 monthly instalments. Winzen, for its part, retained ownership of the two lots and only undertook to transfer the right of ownership thereof after the monthly payments had been made in full. At the time the Act to preserve agricultural land took effect on November 9, 1978, Winzen had not yet transferred the right of ownership to respondent because the selling price had not yet been fully paid. As the Act, and in particular ss. 26 to 30, presented an obstacle to proceeding with the residential development, Winzen applied to the Commission de protection du territoire agricole to exclude from the designated agricultural region all the land bought by it, and alternatively, it asked for authorization to alienate the lots already sold but to which it still retained the right of ownership. Its requests were denied.
Without the Commission's authorization, Winzen transferred the right of ownership in two lots to respondent by notarial deeds on March 25, 1982, after the latter had prepaid the balance of the selling price. Respondent then applied to the Superior Court for declaratory relief declaring him to be owner of two lots he claims to have bought from Winzen by an agreement signed before the Act came into effect. The Superior Court allowed the application and the judgment was affirmed by the Court of Appeal.
The appeal at bar raises two issues: (1) is the obligation imposed on Winzen by the standard contract to convey ownership of the lots when the selling price has been paid in full a suspensive conditional obligation retroactive to May 14, 1977, when the Act had not yet taken effect? and (2), if the standard contract did not create a suspensive conditional obligation, are the rights Winzen and respondent conferred on each other before the Act took effect "acquired rights" to which the Act cannot be applied?
Held: The appeal should be allowed.
The standard contract did not create a suspensive conditional obligation and accordingly the retroactivity mentioned in art. 1085 does not apply. The "condition" referred to in arts. 1079 et seq. C.C.L.C. is "an event future and uncertain", extrinsic to the legal relationship, on which the existence of an obligation depends. The payment of the price by respondent does not fall in this category: he was obligated to pay the price, just as Winzen was obligated to convey the immoveable property, within a certain time. The obligations on either side were obligations with a term (arts. 1089 et seq. C.C.L.C.), not conditional obligations. They existed once the standard contract had been signed, even though their performance was in abeyance. In any synallagmatic contract performance of its obligations by one of the parties depends on performance by the other, but that does not make the obligations conditional within the meaning of the Civil Code. The rule of the correlativity of obligations means that adopting the contrary position would transform into conditional obligations with retroactive effect deferred obligations resulting from synallagmatic contracts.
The rights conferred by the standard contract are not "acquired rights" that fall outside the scope of the Act. Division IX of the Act, and in particular s. 101, defines all the acquired rights which can be set up against application of the Act. Other rules developed by the courts accordingly cannot have the effect of conferring acquired rights other than those specified by the Act or of conferring them in a way not contemplated by the Act. The presumption that vested rights cannot be affected is only a rule of construction and, by adopting the provisions of Division IX of the Act, the legislator intended to override this rule of construction and replace it with a complete and exhaustive code of the rules applicable to the matter.
In the case at bar, the acquired right claimed by respondent is not a right mentioned in s. 101. That section protects only the right to dispose of a lot, but not that of obtaining the ownership of it. Moreover, respondent does not meet the conditions listed in s. 101. The lots bought were never used for other than agricultural purposes and he never obtained a building or any other permit which could be described as a "permit authorizing use". Nor can respondent benefit from acquired rights through Winzen. The acts listed by Winzen, and in particular the subdivision of lots, taken separately or as a whole do not constitute effective use of the lots for a purpose other than agriculture. On the contrary, the use of the two lots by Winzen or respondent appears to be use for agricultural purposes, since the legislative definition of the word "agriculture" includes fallow land.
Finally, the Act, and especially s. 29, applies to all alienations occurring after it took effect on November 9, 1978. The definition of the word "alienation" in s. 1(3) refers to "any conveyance of property", and not to prior agreements by which the parties may have undertaken to make such a conveyance. The notarial deeds of March 25, 1982 are according to their express language conveyances of property and they are subsequent to the date on which the Act took effect. Section 29 of the Act must be applied to them without giving it retroactive effect, even though the agreements which led to these deeds were made before the date on which the Act took effect. The notarial deeds concluded by respondent and Winzen are therefore voidable under s. 30 of the Act.
Cases Cited
Applied: Attorney General of Quebec v. Expropriation Tribunal, [1986] 1 S.C.R. 732; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; distinguished: Dulac v. Nadeau, [1953] 1 S.C.R. 164; disapproved: Lefebvre v. Commission de protection du territoire agricole du Québec, J.E. 82-1153 (Sup. Ct.), aff'd J.E. 84-720 (C.A.); referred to: Veilleux v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000; Gauthier v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000; Lebel v. Winzen Land Corp., [1989] 1 S.C.R. 000, rev'g C.A. Mtl., No. 500‑09‑001549‑823, November 11, 1985; Winzen Land Corp., C.P.T.A.Q., No. 010345, September 21, 1979; Winzen Land Corp. v. Commission de protection du territoire agricole du Québec, [1981] C.A. 383, aff'g Sup. Ct. Mtl., No. 500‑05‑004153‑803, February 16, 1981; Chateau‑Gai Wines Ltd. v. Institut National des Appellations d'Origine des Vins et Eaux‑de‑Vie, [1975] 1 S.C.R. 190; Commander Nickel Copper Mines Ltd. v. Zulapa Mining Corp., [1975] C.A. 390; Ouellet v. Procureur général du Québec, Sup. Ct. Québec, No. 200‑05‑000747‑803, July 11, 1980; Acme Village School District (Board of Trustees of) v. Steele‑Smith, [1933] S.C.R. 47.
Statutes and Regulations Cited
Act to preserve agricultural land, S.Q. 1978, c. 10 [now R.S.Q., c. P‑41.1], ss. 1(1), (3), 12, 18, 22 to 25, 26, 27, 28, 29, 30, 55, 70, 72, 82, 98, 101, 116, 117.
Civil Code of Lower Canada, arts. 1023, 1079, 1085, 1089, 1476, 1478.
Authors Cited
Ghestin, Jacques. "Réflexions d'un civiliste sur la clause de réserve de propriété", D.1981.Chron.1.
Mazeaud, Henri et Léon, Jean Mazeaud et François Chabas. Leçons de droit civil, t. II, vol. I, 7e éd. Paris: Montchrestien, 1985.
Planiol, Marcel, et Georges Ripert. Traité pratique de droit civil français, t. 7, 2e éd. Paris: Librairie générale de droit et de jurisprudence, 1954.
APPEAL from a judgment of the Court of Appeal for Quebec, [1985] C.A. 703, affirming a judgment of the Superior Court. Appeal allowed.
Gérard Beaupré, Q.C., and Louis Bouchart‑d'Orval, for the appellant.
Jean Bruneau, Q.C., for the respondent.
Michel Delorme, for the mis en cause the city of St‑Hubert.
Robert Dulude, Q.C., for the mis en cause Winzen Land Corp.
//Beetz J.//
English version of the judgment of the Court delivered by
I - Introduction
This is an application for declaratory relief. In it respondent Daniel‑Joseph Venne is asking the Court to declare that he is owner of two lots he claims to have bought from the mis en cause Winzen Land Corporation Ltd. (Winzen) by an agreement signed before the Act to preserve agricultural land, S.Q. 1978, c. 10 (the Act), came into effect. Initially, the application also asked the Quebec Superior Court to recognize respondent's right to use the two lots for purposes other than agriculture. At the hearing of the application in the Superior Court, however, respondent verbally withdrew this latter request.
The appeal deals in part with the provisions of the Act considered by the Court in Veilleux v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000, and Gauthier v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 000, judgment in which was rendered at the same time as the case at bar. It also concerns a matter of pure civil law, namely the legal effects of the agreements signed by the parties in the instant case.
Finally, mention should be made of the connection between this appeal and Lebel v. Winzen Land Corp., [1989] 1 S.C.R. 000, in which the appellant sought authorization to institute a class action on behalf of people who had concluded with Winzen agreements identical to those at issue in the case at bar, agreements involving lots located in the same designated agricultural region.
Although judgment was rendered on the same day in these four appeals, it should be mentioned for the reader's convenience that the reasons for judgment were written in the following order: Veilleux, Gauthier, the case at bar and Lebel.
II - Facts
The facts are complex but for the most part they are not in dispute. They have led to a number of other proceedings, in particular before the Commission de protection du territoire agricole du Québec (the Commission).
Winzen is a commercial corporation specializing in the purchase and sale of real estate for residential development. In 1974 and 1975 Winzen bought original lots 1 to 4 and 222 to 227 of the cadastre of the parish of Ste‑Famille de Boucherville, now located in the city of St‑Hubert, the mis en cause. Winzen then obtained approval for a subdivision plan subdividing the original lots for residential development. At the time the St‑Hubert zoning by law required the lots bought by Winzen to be zoned "RX" (deferred residential). This type of zoning does not allow the land to be used for residential purposes but reserves it for these purposes in the indefinite future. The use proposed by Winzen therefore would have required a new zoning by‑law to be adopted.
Before the city of St‑Hubert amended its zoning by‑law to allow such a use, Winzen began selling the subdivided lots to people interested in acquiring residential property or making an investment. At the time these sales were made, the land was not the subject of any use for residential development.
On May 14, 1977, respondent bought from Winzen two lots numbered 224‑260 and 2‑78 and signed a document titled "Contract for Deed". Under this agreement respondent undertook to pay a total of $7,926 in 84 consecutive monthly payments of $106, commencing on May 1, 1977. Winzen, for its part, retained ownership of the two lots and only undertook to deliver possession and to transfer the right of ownership thereof after the monthly payments had been made in full.
Several clauses of this agreement need to be cited. It begins on the first page with the following provisions:
CONTRACT FOR DEED
WINZEN LAND CORPORATION LIMITED, As Vendor, agrees to sell to:
PURCHASER'S NAME: Daniel Joseph Venne . . .
and said Purchaser agrees to buy from the said Vendor the below listed lands . . .
The agreement then gives the numbers and sizes of the lots, the total price of each lot and the total price of the two lots payable in 84 monthly instalments of $106. The parties' rights and obligations are set out in detail on the reverse:
The Parties agree that the said sale shall be on the following terms:
1.(a)The Vendor will convey to the Purchaser a marketable title to the above‑mentioned lot(s), in accordance with the laws of the Province of Quebec.
(b)This Contract for Deed shall not be registered until payment in full has been made of the Total Purchase Price.
(c)Upon payment in full of the above Total Purchase Price, the Purchaser may enter into possession of the above‑mentioned lot(s). Within sixty days after such payment in full, the Purchaser shall be entitled to obtain from the Vendor a Deed of Sale which shall be executed before the Vendor's notary at the Vendor's expense up to which time title to the said property shall remain vested in the Vendor.
2.The Purchaser binds and obliges himself to pay the balance in equal and consecutive monthly payments as shown above . . . The Purchaser shall have the right to prepay the balance of the Total Purchase Price, in part or in whole, without penalty.
4.The parties do hereby agree that for a period of three years from the date hereof, should the Purchaser wish to sell the land herein, or any part thereof, then the Vendor shall be given the first right of refusal on any sale by the Purchaser. This shall be done by written notice from the Purchaser to the Vendor, setting out the terms on which the Purchaser is prepared to sell and the Vendor shall then be given 5 banking days from the receipt of such notice to accept such terms. Should the Vendor not accept these terms within the said time then the Purchaser may sell the lands on these terms to any other Purchaser. The intent of this paragraph is to give the Vendor first opportunity to purchase any or all of this land on terms acceptable to any other Purchaser.
5.This contract and the rights and interest hereunder are transferable by the Purchaser without the written consent of the Vendor, provided that the Purchaser informs the Vendor in writing of such transfer and provided that the Purchaser shall not be in default under the terms of this Contract, and provided further that the transferee shall in writing assume all obligations of this Agreement and the Purchaser shall continue to remain liable therefor until all the obligations on his part to be performed herein shall have been completed.
8.All rights and remedies of the Vendor may be exercised cumulatively.
13.Should the Purchaser fail to make any payments required under the terms of this agreement, and should such failure continue for a period of 60 days thereafter, then the Vendor shall terminate all of the Purchaser's rights hereunder by Notice of Default. The Purchaser agrees upon such termination to forfeit to the Vendor as liquidated damages all payments made hereunder and all right, title, and interest of the Purchaser in and to the subject property (together with appurtenances and improvements, if any) and forthwith to surrender to the Vendor peaceable possession of the property.
14.In the event the Vendor unwilfully defaults in respect of its obligations hereunder, then the Vendor, at its option, shall either cure each such default within 60 days of being required by the Purchaser by written notice so to do or the Vendor shall repay to the Purchaser any monies paid hereunder for each lot where the default has not been cured, and the Vendor shall upon such repayment be relieved from any further obligations and/or liabilities hereunder as it relates to the lot for which repayment has been made. The Purchaser shall, but at the Vendor's expense, execute any documents in order to assist the Vendor in giving effect to this paragraph.
It should also be noted that the "Contract for Deed" signed by respondent is a standard form contract signed by persons purchasing Winzen land in the St‑Hubert area. It is identical to the contract at issue in Lebel v. Winzen Land Corp. Only the names of the parties, the description of the lots purchased, the price and the terms of payment had to be added.
The Act took effect on November 9, 1978. It prohibits use of a lot for a purpose other than agriculture (s. 26) and subdivision (s. 28) in a designated agricultural region or agricultural zone (s. 55), except with authorization from the Commission. Section 29 prohibits the alienation of a lot by a person reserving a right of alienation over a contiguous lot:
- No person may, in a designated agricultural region, except with the authorization of the commission, effect the alienation of a lot while retaining a right of alienation on a contiguous lot or on a lot that would otherwise be contiguous if it were not separated from the first by a public road.
The alienation of one or several contiguous lots or of lots which would be contiguous if they were not separated by a public road shall not be made in favour of more than one person, except with the authorization of the commission.
The surface of a lot in respect of which a right is recognized in virtue of Division IX is not deemed contiguous.
Alienation is defined in s. 1 of the Act:
- In this Act, unless the context requires otherwise,
(3) "alienation" means any conveyance of property, including sale with a right of redemption, emphyteutic lease, alienation for rent, transfer of a right contemplated in section 3 of the Mining Act (1965, 1st session, chapter 34) and transfer of timber limits under the Lands and Forests Act (Revised Statutes, 1964, chapter 92), except ....
There then follow three exceptions that do not apply here.
The penalty associated with these prohibitions is contained in part in ss. 30 and 82:
- Subdivision or alienation made in contravention to section 28 or 29 may be annulled.
Any interested person, including the Procureur général, the commission or the municipal corporation where the lot is situated may apply to the Superior Court to have such nullity declared.
- The Superior Court may order the cancellation of all rights, privileges and hypothecs created or resulting from any deed in contravention of sections 26 to 29, 55 and 70.
At the time the Act took effect, Winzen had sold 1,883 lots but had only transferred the right of ownership by registered deed for 850 of these. That left 1,033 bought by some 600 purchasers to whom Winzen had not yet transferred the right of ownership, because the selling price had not yet been fully paid. At that time, respondent was one of these 600 purchasers. Winzen also transferred a number of lots to the municipality to be used in the laying of streets and the eventual provision of parks. Winzen still had 426 lots for sale.
As the Act, and in particular ss. 26 to 30, presented an obstacle to proceeding with the residential development, Winzen applied to the Commission on July 13, 1979. It asked the Commission to exclude from the designated agricultural region all the land bought by it in the St‑Hubert area, and alternatively, it asked for authorization to alienate the lots already sold but in which it still retained the right of ownership. The Commission dismissed the two requests because most of the land in question is used for agricultural purposes, because it is well suited to such purposes and because the city of St‑Hubert did not need it to accommodate its population: Winzen Land Corp., C.P.T.A.Q., No. 010345, September 21, 1979.
The following is part of the Commission's reasons:
[TRANSLATION] In the Commission's opinion what counts is that on all this land or these lots there is currently no street, building, development or move towards development, on ground which is well suited for agriculture, and the greater part of which is currently in fact being used for agricultural purposes. Even if it were not, its high agricultural potential would allow it to be reclaimed.
This part of the evidence disclosed that water and sewage services could not be provided to all the lots covered by the application without changes to the existing infrastructure; and even then there is no guarantee that these services would not place an additional burden on the filtration plant of the municipality of Longueuil, which is already overloaded. According to the evidence, the changes to the system to serve these lots are currently estimated to cost some $15,000,000.
Finally, the town planner for the city of St‑Hubert, forecasting continued annual population increases of 4 to 6 percent, gave the Commission a projection of the municipality's requirements for development purposes until 1996. He testified that the reserved area in the provisional plan left the municipality 3,600 acres of undeveloped land south of Boulevard Laurier, where he said development should be undertaken in the next twenty years. His development assumption of 4 percent per annum would require 3,400 acres by 1996. Even on the optimistic assumption of 6 percent per annum, with the same density of five housing units per acre, he testified that for the next ten years there was ample land in the reserved area.
Finally, applicant reduced its claim at the hearing simply to authorization from the Commission to confer the registered titles for 1,033 lots which were the subject of the promises for sale, and also to alienate the remaining 426 lots. In the Commission's opinion acceding to such a request would simply be to depart from the language of ss. 29 and 31 of the Act unnecessarily without giving the purchasers any right or excluding them from the effect of the provisions of s. 26 of the Act. The position would have been the same after an amendment of the municipal zoning by‑law applicable to these lots.
I have cited lengthy extracts from this decision to emphasize the fact that the Commission's refusal was based on the criteria stated in s. 12 of the Act:
- In rendering a decision or giving its advice on a matter referred to it, the commission shall particularly take into consideration the biophysical conditions of the soil and of the environment, the possible uses of the lot for agricultural purposes and the economic consequences thereof, and the repercussions that the granting of the application would have on the preservation of agricultural land in the municipality and the region, and on the homogeneity of the farming community and farming operations.
The Commission's decision is unimpeachable provided Winzen had no acquired rights at the time the Act took effect.
Winzen subsequently asked the Commission to review this decision in accordance with the power conferred on it by s. 18 of the Act. This application was dismissed because Winzen had not submitted any valid ground for review.
Following these failures Winzen challenged the Commission's decisions by a motion for evocation. As the Commission is protected by a privative clause, Winzen argued that it did not have the very jurisdiction Winzen had relied on; Winzen contended that the Commission should have recognized the acquired rights and declared that its authorization was not necessary, or that it was giving its authorization if it had jurisdiction. According to Benoît J. of the Superior Court, who heard the motion for evocation, Winzen maintained that [TRANSLATION] "it would have been tempted to ignore the Commission" ‑‑ which it ultimately did -- but it chose this procedure for reasons of caution as it appeared vis‑à‑vis third parties to be the owner of the 1,033 lots at issue. In support of its motion for evocation Winzen argued that the "Contracts for Deed" are sales subject to a suspensive condition which, because of the retroactivity enacted by art. 1085 C.C.L.C., are deemed to have been completed before the Act took effect and are not covered by it. Winzen further argued that the purchasers have an acquired right to the transfer of the right of ownership. Benoît J. dismissed these two arguments because in his opinion the "Contract for Deed" was only a promise of sale subject to a suspensive condition and because at the time the Commission rendered its decision Winzen was still the owner of the lots in question (Sup. Ct. Mtl., No. 500‑05‑004153‑803, February 16, 1981).
In the Court of Appeal (Winzen Land Corp. v. Commission de protection du territoire agricole du Québec, [1981] C.A. 383), Winzen made the same arguments and they were dismissed for the same reasons. However, L'Heureux‑Dubé J.A., as she then was, added at p. 386 that Winzen cannot plead for another in claiming acquired rights on behalf of the many purchasers who are not parties to this case:
[TRANSLATION] In the alternative, appellant submitted that "even admitting for purposes of argument that these contracts constitute a promise of sale, the purchasers nevertheless had an acquired right to the title, a right which has not been taken from them by law".
I would perhaps agree with this proposition of appellant if it was the purchasers who had asserted before the Commission the rights they claimed to have. Not only did the purchasers not appear before the Commission, they were not even impleaded before the Commission and are not parties to the case in the Superior Court or in our Court.
Under what rule can appellant plead for another, especially in a case where the possibility of conflicts of interest is so manifest?
Without deciding what powers the Commission may have in this respect, the purchasers may if they wish assert their rights before the Commission or in some other way.
Montgomery J.A., who agreed with L'Heureux‑Dubé J.A., also wrote at p. 387:
If Appellant wishes to obtain a declaration that the Act does not apply to this land or to have its rights clarified in any other way, it should apply to the civil courts and implead any other interested parties.
Paré J.A. agreed with his two colleagues.
As will be seen below, I respectfully disagree with the reasons of the Court of Appeal and of the Superior Court, although in my opinion the two courts arrived at the correct conclusions, namely that the Commission had jurisdiction.
In any case, the judgments of the Superior Court and of the Court of Appeal now have the effect of res judicata between the Commission and Winzen. Respondent Venne was not a party to those proceedings. However, it is he who has submitted the complete text of these judgments and the decisions of the Commission in support of his motion here.
By suggesting that the parties object in some other manner, the Court of Appeal in my opinion ran a risk which materialized, that of rendering two contradictory judgments.
Despite the Commission's repeated refusal to authorize Winzen to transfer the right of ownership and despite the judgments of the Superior Court and Court of Appeal affirming the Commission's jurisdiction and so, by implication but of necessity, deciding that Winzen could not lawfully, because of s. 29, transfer the right of ownership without the Commission's authorization, Winzen did in fact transfer the right of ownership to respondent for each of his two lots after he had prepaid the balance of the selling price over two years before it was due. This alienation was effected by notarial deeds on March 25, 1982. The two deeds are similar except as to the description of the lot and the selling price. I cite the main parts of each:
[TRANSLATION]
BEFORE . . .
Notary at Montréal, Province of Quebec,
Canada;
APPEARED:
WINZEN LAND CORPORATION LTD., a legally established corporation . . . acting and represented herein by . . . duly authorized thereto . . .
Hereinafter referred to as "THE SELLER",
WHO hereby sells with the usual legal guarantees, free and clear of all debts, encumbrances and hypothecs whatever, to:
Mr. DANIEL JOSEPH VENNE . . .
Hereinafter referred to as "THE PURCHASER"
here present and accepting, the following immoveable property, to wit:
D E S C R I P T I O N
POSSESSION AND CONDITIONS
By these presents the purchaser becomes, as of this date, absolute and indefeasible owner of what is sold hereby, with immediate possession, on the following charges and conditions, which he undertakes to observe, to wit:
P R I C E
This sale is made for and in consideration of the sum of FOUR THOUSAND ONE HUNDRED AND EIGHTY‑NINE DOLLARS ($4,189) . . . which the seller acknowledges receiving from the purchaser and for which full and final release is given.
SPECIAL CLAUSE
That the said deed of sale is made in accordance with a promise of sale under private seal dated May 14, 1977, a copy of which is attached to the original hereof after being certified as true and signed ne varietur by the parties hereto with and in the presence of the undersigned notary.
On June 9, 1982, respondent filed the application for declaratory relief which began the instant proceedings. The two main conclusions it sought are as follows:
[TRANSLATION] TO DECLARE the alienation made to applicant by the mis en cause Winzen Land Corporation Ltd. in the notarial deeds, Exhibit R‑2, of the immoveable property hereinafter described, to be good, legal and valid for all purposes . . .
TO AUTHORIZE applicant to use the immoveable property and/or lots in question for a purpose other than agriculture . . .
According to the transcript, the second conclusion was verbally discontinued at the Superior Court hearing.
The first conclusion is ambiguous. Despite its wording, what respondent really wants to know is whether the two notarial deeds transferring the right of ownership of the lots to him were concluded in breach of s. 29 of the Act, and whether he has acquired rights allowing him to obtain such transfer. However, even if s. 29 was infringed and respondent had no acquired rights, it does not follow that the deeds are void. As s. 30 of the Act provides, they are simply voidable and there is nothing to indicate that their annulment has been requested. This being the case, and although respondent remains owner of the lots until such annulment takes place, it cannot however be said that the alienation to him by Winzen was "legal and valid for all purposes". In such a case, in my opinion, the application should simply be dismissed in view of the way in which the conclusions sought were framed.
Further, both in its inscription in appeal in the Court of Appeal and in the submission it filed with this Court, appellant Commission asked the Court to declare that the notarial deeds of March 25, 1982 are voidable under s. 30 of the Act; and in my opinion, this request should be granted if s. 29 was infringed and if respondent had no acquired right to the alienation effected by those deeds.
Before concluding the statement of facts, I should say a few words about the only one which is disputed, very late in my opinion and for the first time in this Court. In its written submission, the mis en cause Winzen stated that with regard to one of the two lots at issue, lot 2‑78, Winzen did not retain a right of alienation over the contiguous lots, and this would place the lot beyond the scope of s. 29. Winzen referred in this regard to Exhibit R‑4, a subdivision plan for the residential development filed by the witness Victor Zenkovich at respondent's request. The plan is practically indecipherable and there is nothing specific or conclusive on the point in the witness Zenkovich's testimony. In fact, the "testimony" to explain the plan to the trial judge came mostly from counsel. Moreover, the judge made no distinction between the two lots, nor did the Court of Appeal, where Jacques J.A. wrote:
[TRANSLATION] The question is whether the notarial deeds of March 1982 recording alienation of the lots in question are valid and legal in light of this prohibition [that contained in s. 29], as the condition of contiguity has been met. [Emphasis added.]
([1985] C.A. 703, at p. 705)
There was also no distinction made in this regard between the 1,033 lots, including those of respondent, referred to in the earlier proceedings.
Finally, even if counsel for Winzen had succeeded in showing such an absence of contiguity, which in my view is not the case, the problem would remain in its entirety as to the other lot. As counsel quite candidly admitted at trial, the case at bar is a test case:
[TRANSLATION]
The COURT:
In fact, you have taken test lots to make a test case.
Mr. BRUNEAU
That's right.
Mr. DULUDE:
That's right, to make a test case.
The COURT:
It's a test case -- that's right.
Mr. BRUNEAU:
Definitely.
In these circumstances, in my opinion, counsel for Winzen cannot dispute this point at this stage of the proceedings.
On the other hand, the fact that this is a "test case" perhaps explains the inexplicable. One cannot help wondering what interest respondent could have in claiming lots which henceforth can only be used for agriculture but which would clearly seem to be too small for such a use.
III - Points at Issue
The parties were in general agreement on the points at issue, but framed them differently. I will summarize them in my own words. However, for a proper understanding of the first of these points, it will first be necessary to cite in part the two articles of the Civil Code of Lower Canada relied on by respondent and Winzen. These are arts. 1079 and 1085, which are contained in a section titled "Of Conditional Obligations":
An obligation is conditional when it is made to depend upon an event future and uncertain, either by suspending it until the event happens, or by dissolving it accordingly as the event does or does not happen.
The fulfillment of the condition has a retroactive effect from the day on which the obligation has been contracted . . .
It is also worth citing art. 1089, which defines a term:
- A term differs from a suspensive condition inasmuch as it does not suspend the obligation, but only delays the execution of it.
The first point at issue may be summarized as follows: is the obligation imposed on Winzen by the "Contracts for Deed" of May 14, 1977, to convey ownership to respondent a suspensive conditional obligation, the condition being performance by respondent of his own obligation to pay the price? If so, in view of art. 1085, the transfer of ownership would be retroactive to May 14, 1977, when the Act had not yet taken effect; it would therefore not be covered by the Act.
The second point at issue is as follows: if the "Contracts for Deed" of May 14, 1977, did not create a suspensive conditional obligation, are the rights Winzen and respondent conferred on each other before the Act took effect "acquired rights" to which the Act cannot be applied?
I will state my conclusions forthwith: the "Contracts for Deed" did not create a suspensive conditional obligation and the rights conferred by this agreement are not "acquired rights" that fall outside the scope of the Act.
Before leaving the subject of the points at issue, I feel it is necessary to emphasize that both the parties and the lower courts kept well away from the judicial and academic controversies regarding promises of sale to which arts. 1476 and 1478 of the Civil Code have given rise. Several of the parties called the "Contracts for Deed" promises of sale. Monet J.A. regarded them as "pre‑contracts". Jacques J.A. wrote that they were bilateral promises of sale; but whatever the label attached to these agreements in passing, the primary concern was with their content and this was undoubtedly correct, as the express provisions of the "Contracts for Deed" do not give rise to the controversies surrounding the interpretation of arts. 1476 and 1478.
In my opinion, the "Contracts for Deed" are actually instalment sales, except that they are sales of immoveable, the taking of possession is deferred, and the transfer of the right of ownership is also deferred until a notarial deed is executed, such execution to be effected after the payment of the price by the purchaser. Once again, however, the question of how these agreements are to be described was not really discussed and my classification of them as "instalment sales" is merely a suggestion.
IV - Judgments of Lower Courts
In the Superior Court Vaillancourt J. allowed respondent's application for two reasons. First, he considered that the "Contracts for Deed" signed on May 14, 1977, conferred on respondent the [TRANSLATION] "right to be declared owner" and that this right was [TRANSLATION] "subject to a condition which is also legal and not voidable". He relied on several writers, including Planiol and Ripert, Traité pratique de droit civil français (2nd ed. 1954), from which he cited the following passage in vol. 7, p. 392, No. 1040:
[TRANSLATION] If a new law is passed in the interval between the agreement and the fulfillment of the condition, it will not apply to the obligation which remains subject to the old law, as if it had been from the outset. This result has sometimes been explained by saying that if the new law is inapplicable, this is because the conditional creditor already had an acquired right when it came into effect, and the rule against retroactive legislation suffices to exclude it. The explanation is incorrect: the conditional creditor does not yet have a right, and if his debt is subsequently covered by repealed legislation, this is the effect of the retroactive nature of the condition, not the anticipated existence of a right in his favour.
According to Vaillancourt J., this right to the transfer of the right of ownership is acquired -- despite what Planiol and Ripert say about it in the passage quoted -- and the judge's second reason is that respondent cannot be deprived of it without giving the Act retroactive effect.
The Court of Appeal dismissed the Commission's appeal, Monet J.A. dissenting: [1985] C.A. 703. However, McCarthy and Jacques JJ.A., making up the majority, came to the same conclusion for different reasons.
McCarthy J.A. considered that the payment of the price by respondent is not a condition within the meaning of art. 1079 of the Civil Code, and that Winzen's obligation to convey title, like that of paying the price, is an obligation with a term. There can thus be no question of the retroactivity specified in art. 1085. McCarthy J.A. nevertheless considered that the appeal should be dismissed because when the Act took effect Winzen was already bound to convey ownership, and respondent to pay the price for it under a valid contract in which the legislator is deemed not to have intended to interfere, because of the presumption against retroactive legislation.
According to Jacques J.A. [TRANSLATION] ". . . the transfer of the right of ownership is dependent on payment of the selling price". In his opinion this stipulation was a suspensive condition which, once met, was retroactive to the date of the contract, May 14, 1977. On this point Jacques J.A. concluded as follows (at p. 706):
[TRANSLATION] The prohibition enacted in s. 29 therefore does not apply to the deeds of March 1982. Those deeds can neither be read nor reconsidered without taking into account the bilateral promise out of which they arose; they are only a recognition that the suspensive condition has been met.
To the Commission's argument that such a conclusion amounts to recognizing acquired rights other than those protected by the Act in s. 101, Jacques J.A. replied inter alia that the section applies only to lots that can be used for agricultural purposes, which is not the case with respondent's lots because they are so small. Finally, Jacques J.A. relied on the rule against retroactive legislation.
Monet J.A., dissenting, began by writing in the case at bar that the matter should be resolved not by the rules of the civil law but by the provisions of the Act. However, in Lebel v. Winzen Land Corp., C.A. Mtl., No. 500-09-001549-823, November 11, 1985, judgment in which was rendered by the Court of Appeal at the same time as in the case at bar, he revised his opinion: he concurred with McCarthy J.A. in holding that the parties' obligations in the "Contracts for Deed" were obligations with a term, not conditional obligations. He held nonetheless that under the Act respondent did not have acquired rights and Winzen had to obtain the Commission's authorization before transferring the right of ownership to him.
V -First Point at Issue: Nature of Obligations to Transfer the Right of Ownership Imposed on Winzen by "Contracts for Deed"
In his reasons for judgment, McCarthy J.A. wrote (at p. 707):
[TRANSLATION] In my view, and with respect for the contrary opinion, there is no question of a conditional obligation here; accordingly, the retroactivity mentioned in art. 1085 C.C. does not apply. The "condition" referred to in arts. 1079 et seq. of the Civil Code is "an event future and uncertain" on which the existence of an obligation depends. The payment of the price by Venne does not fall in this category: Venne was obligated to pay the price, just as the Winzen company was obligated to convey the immoveable property, within a certain time. The obligations on either side were obligations with a term (arts. 1089 et seq. C.C.), not conditional obligations. They existed once the "Contract for Deed" had been signed, even though their performance was in abeyance. The same is true for the rights corresponding to the obligations.
In any synallagmatic contract performance of its obligations by one of the parties depends on performance by the other, but that does not make the obligations conditional within the meaning of the Civil Code . . . .
It is true that clause 13 of the "Contract for Deed" states that if the purchaser fails to pay one of the instalments on the price, the vendor will terminate all the rights of the purchaser, who "agrees upon such termination to forfeit to the Vendor as liquidated damages all payments made hereunder . . .". Similarly, clause 14 states that if the vendor "unwillingly defaults in respect of its obligations hereunder", he may repay the purchaser all he has received "and the Vendor shall upon such repayment be relieved from any further obligations . . .". However, these clauses by themselves cannot have the effect in my opinion of making the obligations on either side conditional obligations.
Monet J.A. wrote in Lebel v. Winzen Land Corp.:
[TRANSLATION] As we know, a condition is a future and uncertain event on which the existence of an obligation depends. What must be stressed here is that the event must be extrinsic to the legal relationship.
In principle, a sale on condition that the price will be paid is not a conditional sale but simply a sale; on this point, I agree with McCarthy J.A.
On this point, respondent and Winzen essentially adopted the position of Jacques J.A. Winzen also relied on the judgment of this Court in Dulac v. Nadeau, [1953] 1 S.C.R. 164, as authority for the argument that a sale with a reservation of ownership is a sale on a suspensive condition. In that case, the buyer making the promise had sold to a third party a house located on the property he had undertaken to buy by a promise of sale with reservation of ownership. The buyer who made the promise never paid the price and the validity of the sale made by him when he was not owner of the house was at issue. In my opinion, it is impossible to transpose the Court's reasoning in Dulac v. Nadeau. First, the Court did not have to decide whether the contract in question had been made under a suspensive condition, since no question of retroactivity was raised. Second, only Fauteux J. held that the contract in question had been made under a suspensive condition; Rinfret J. held that it was not, and Taschereau, Rand and Estey JJ. did not rule on the point. Dulac v. Nadeau therefore does not seem to me to be applicable here.
I concur with the reasons of McCarthy and Monet JJ.A., cited above.
One may also refer in this connection to the observations of Pigeon J. in Chateau‑Gai Wines Ltd. v. Institut National des Appellations d'Origine des Vins et Eaux‑de‑Vie, [1975] 1 S.C.R. 190, at p. 197, although they were made in a different context:
It may be argued that in any synallagmatic contract all stipulations are mutually in consideration one of the other. That is true, but it does not make of them suspensive conditions.
The rule of the correlativity of obligations means that adopting the contrary position would transform into conditional obligations with retroactive effect most deferred obligations resulting from synallagmatic contracts. In my opinion this extraordinary consequence would be inconsistent with the presumed intent of the parties, unless of course they have clearly stipulated to the contrary. However, the fact that they may have anticipated the possible insolvency of their fellow contracting parties and taken precautions or required security to protect themselves does not transform the parties' principal obligations into conditional obligations within the meaning of art. 1079 C.C.L.C.
The opinions of McCarthy and Monet JJ.A. are supported by French writers of considerable authority discussing legislation similar to arts. 1079 et seq. of the C.C.L.C.
I refer, for example, to the Leçons de droit civil by Henri and Léon Mazeaud, Jean Mazeaud and François Chabas, t. II, vol. I, Obligations: Théorie générale (7th ed. 1985), by François Chabas, at p. 1077:
[TRANSLATION]
- Characteristics and Validity of Condition
A. - Characteristics which event must
have to be a condition
- Future and uncertain event; event extrinsic to legal relationship. -- It has already been indicated that, for a condition to exist, the event chosen must be future and uncertain . . . .
The event must be extrinsic to the legal relationship. The legal relationship must be able to exist without the condition, which is only an aspect of it: an essential part of the contract therefore is never a condition. A sale on condition that the price will be paid is not a conditional sale but simply a sale: the payment of the price is a part of the sale, an intrinsic condition. The sale of immoveable property on condition that the purchaser marries, on the contrary, is a conditional sale: the contract may stand without the condition, which is only one aspect. Unfortunately, the courts have not always used strictly consistent terminology in this area. [Footnote references deleted.]
I also cite the following passages from an article titled "Réflexions d'un civiliste sur la clause de réserve de propriété", written by Professor Jacques Ghestin in Recueil Dalloz Sirey, 1981, Chronique-I, at pp. 4-5:
[TRANSLATION] However, it was argued that this could not be a term because the payment of the price is an uncertain event, especially in commercial relations. The writer of a recent noteworthy study also stressed the fact that "in credit sales . . . the solvency of buyers, especially business buyers, is precarious and difficult to estimate". However, this is used as a basis for saying that it would be "unprecedented to make the transfer of ownership depend on such an uncertain event". In actual fact, while it is true that the uncertain nature of the event considered is definitely the criterion for distinguishing a condition from a term, its application must still be defined.
For there to be a condition the event must first be objectively uncertain. Accordingly, the death of a given person may never be a condition, as that is certain, though its date is uncertain and it is thus an uncertain term. However, such objective uncertainty is not sufficient, it is also necessary that the parties have not taken the occurrence of the event as certain.
In a credit sale, the payment of the price is not regarded simply as a possibility but as a certainty. The purchaser's obligation is not conditional, but simply an obligation; and the fact that he may prove to be insolvent on the date of payment in no way affects this classification. If it were otherwise all credit sales would give rise merely to conditional obligations. This would still further aggravate the misuse of the word, which has been quite properly deplored.
The only purpose of the clause reserving ownership is to associate the transfer of ownership very closely with the payment of the price in full, to make it subject . . . to such payment. The payment is then a condition of the transfer, but the word "condition" is only used in its technical sense here. It no longer means an event the occurrence of which is uncertain and outside the control of the parties. It simply means there will only be a transfer if there is payment, just as a contract is only valid if it contains an agreement by the parties, an object and a cause.
It can thus be said that it is wrong to describe a clause reserving ownership in general as a suspensive condition. It is in fact simply a term which, according to the formula most often used, both by the courts and in practice, suspends the transfer until the price is paid in full.
It goes without saying, though it is perhaps better to make the point, that the obligations which these writers in my opinion properly regard as obligations with a term, and not as conditional obligations, are the principal obligations resulting from a synallagmatic contract. The position is usually different for the effects of subsidiary agreements which are often concluded to guarantee performance of the principal obligations, such as security, hypothec and the giving in payment clause. These are cases of true conditions within the meaning of art. 1079 C.C.L.C. Accordingly, the courts have more or less consistently regarded the giving in payment as a transfer of ownership on a suspensive condition with retroactive effect. I do not in any way wish to question these precedents.
I would also express a reservation as to the passage cited above from the Leçons de droit civil of Mazeaud and Chabas, according to which [TRANSLATION] "an essential part of the contract . . . is never a condition". (Emphasis added.) It seems to me that this probably goes too far and, in view of the rule of freedom of contract, the parties could agree otherwise by an express or even an implicit stipulation, provided that they are able to do so without depriving the contract of all its content. The parties could also stipulate that a true condition within the meaning of art. 1079 would not have retroactive effect, or that a simple term would have such effect. There is nothing in this that is prohibited by law or that is contrary to public order or good morals. (The foregoing is naturally said subject to the rule of relativity of contracts stated in art. 1023 C.C.L.C. and subject to the rules applicable to the registration of real rights.)
I would hasten to add, however, that there is nothing of this in the "Contracts for Deed" signed by the parties in the case at bar on May 14, 1977. I cite again the principal provisions found at the beginning:
WINZEN LAND CORPORATION LIMITED., As Vendor, agrees to sell to:
PURCHASER'S NAME Daniel Joseph Venne . . .
and said Purchaser agrees to buy from the said Vendor the below listed lands . . .
The Parties agree that the said sale shall be on the following terms:
1.(a)The Vendor will convey to the Purchaser a marketable title to the above mentioned lot(s), in accordance with the laws of the Province of Quebec.
(b)This Contract for Deed shall not be registered until payment in full has been made of the Total Purchase Price.
(c)Upon payment in full of the above Total Purchase Price, the Purchaser may enter into possession of the above-mentioned lot(s). Within sixty days after such payment in full, the Purchaser shall be entitled to obtain from the Vendor a Deed of Sale which shall be executed before the Vendor's notary at the Vendor's expense up to which time title to the said property shall remain vested in the Vendor. [Emphasis added.]
I do not see any of these provisions as containing express or implied stipulations of true conditions or retroactivity. On the contrary, I regard them as stipulations postponing the performance of the obligation to transfer the right of ownership until a term has been met, even an uncertain one.
In any case, it was not necessary to make the transfer of the right of ownership retroactive in order to protect Winzen's rights. Winzen retained the right of ownership until the execution of the notarial deed which was to take place after the price had been fully paid by the purchaser. In the meantime, registration of the "Contracts for Deed" was prohibited. Winzen also retained possession of the lots until payment in full. Winzen thus had a foolproof security. The retroactivity in art. 1085 would not have been of any use to it.
Finally, the notarial deeds of March 25, 1982, expressly stipulated that a transfer of the right of ownership would take place on the date of the deeds:
[TRANSLATION] By these presents the purchaser becomes, as of this date, absolute and indefeasible owner of what is sold hereby, with immediate possession, on the following charges and conditions . . . [Emphasis added.]
These deeds clearly convey property within the meaning of s. 1(3) of the Act. By these deeds, in my opinion, Winzen alienated the two lots without authorization from the Commission after the Act had taken effect, contrary to s. 29 of the Act, unless respondent had an acquired right to such alienation.
VI -Second Point at Issue: "Acquired Right" to Conveyance of Property and Retroactivity of Act
1. Introduction
Respondent maintained that even if the conveyance of property of the lots purchased on May 14, 1977, took place after the Act had taken effect, he had an acquired right to such conveyance at the time. The trial judge and Jacques J.A. agreed with him on this point.
Respondent and Winzen further argued that the Act should not be construed so as to give it retroactive effect by endowing it with a meaning that would alter the legal situation created before the Act took effect. The trial judge agreed with this argument, as did McCarthy and Jacques JJ.A.
Respondent and Winzen relied on two rules of construction which the courts have recognized as distinct, namely the presumption that vested rights are not affected and the presumption against retroactive legislation: Attorney General of Quebec v. Expropriation Tribunal, [1986] 1 S.C.R. 732, at pp. 741 and 744; and Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271, at pp. 279 and 282. I will therefore deal separately with the application of these two presumptions to the Act. I should however say at once that these rules are only rules of construction. Accordingly, they can only be used where the applicable legislation is ambiguous.
Finally, respondent submitted alternative arguments which related inter alia to the effect of the municipal zoning by‑laws in the context of application of the Act. I will deal briefly with these arguments after disposing of the two principal points of construction raised by respondent.
2. Acquired Right Cited by Respondent
The Act contains a division titled "Acquired Rights", Division IX, the chief provision of which is s. 101:
- A person may, without the authorization of the commission, alienate, subdivide and use for a purpose other than agriculture a lot situated in a designated agricultural region, in a reserved area or in an agricultural zone, to the extent that lot was being used or was already under a permit authorizing its use for a purpose other than agriculture when the provisions of this act requiring the authorization of the commission were made applicable to that lot.
This right exists only in respect of that part of the surface of the lot which was being used for a purpose other than agriculture or for which a permit authorizing use for a purpose other than agriculture had already been issued, when the provisions of this act requiring the authorization of the commission were made applicable to that lot.
Strangely, the trial judge did not cite this section and did not say a word about it. The only one of the three Court of Appeal judges who cited it and dealt with it was Jacques J.A., but in doing so he decided that the provision is not applicable (at pp. 706‑7):
[TRANSLATION] It is true that the right a creditor has subject to a suspensive condition may be described as an "acquired right". However, this is not the same right at issue in s. 101. The right concerned there results from use or a permit for use, not from a suspensive condition.
Further, the section can only be applied to lots capable of being used for agricultural purposes. The area of the lots at issue is 8,056 and 6,795 sq. ft. respectively; they are therefore not suited for agriculture; their use for agricultural purposes is purely academic.
While it is true that no one has acquired rights to what is simply an expectation of use of the ground, it is also true that the Act cannot strip anyone of his right of ownership indirectly, either by giving legislation retroactive effect or by imposing use of the ground which cannot be reasonable. Acquired rights are determined in relation to reality, not in the abstract. A single site and a lot of several acres cannot be considered in the same way. A statute limiting ground use also cannot be construed so as to make it amount to complete sterilization of the right of ownership.
With the greatest respect, these passages contain several errors.
To begin with the last, the Act is a zoning statute. Zoning legislation and by‑laws for the most part tend to "sterilize" part of the right of ownership, and some do so very drastically. The courts cannot on that account refuse to comply with such laws and apply them.
The courts cannot either, without usurping the functions of the Commission, decide that land is unsuited for agriculture and so remove it from the scope of the Act when that land has been expressly included in a designated agricultural region pursuant to ss. 22 to 25, as is the case with respondent's lots.
In my opinion, s. 101 applies to all land which is the subject of the prohibitions contained in ss. 26, 28 and 29 of the Act, and it quite clearly refers to the prohibitions enacted by those sections. The concept of an acquired right would be devoid of significance if it did not refer to the right of doing what is in other respects prohibited by law.
The prohibition primarily concerned in the case at bar is that of s. 29, namely the prohibition from alienating a lot if the owner retains a right of alienation over a contiguous lot. This section does not only apply, as Jacques J.A. held, to lots which can be used for agricultural purposes, because of their size or some other reason. It applies to all lots located in a designated agricultural region, provided that the condition of contiguity is met, and it is in the case at bar.
Appellant for its part maintained that Division IX of the Act, and in particular s. 101, defines all the acquired rights which can be set up against application of the Act. Appellant cited the following authorities in support of its argument: Commander Nickel Copper Mines Ltd. v. Zulapa Mining Corp., [1975] C.A. 390, at p. 392, and Ouellet v. Procureur général du Québec, Sup. Ct. Québec, No. 200‑05‑000747‑803, July 11, 1980. To these authorities should be added the judgment rendered by the Court today in Veilleux v. Quebec (Commission de protection du territoire agricole), in which the Court accepted the Commission's argument that "since the Act specifies the situations in which acquired rights can be invoked, these situations are the only ones that can confer acquired rights which derogate from the provisions of the Act". The Court held, inter alia, at p. 000:
The Act itself specifies the circumstances giving rise to acquired rights and other rules developed by the courts accordingly cannot have the effect of conferring acquired rights other than those specified by the Act or of conferring them in a way not contemplated by the Act.
I thus think that appellant's position is correct. Once again, the presumption that vested rights cannot be affected is only a rule of construction and, by adopting the provisions of Division IX of the Act, the legislator intended to override this rule of construction and replace it with a complete and exhaustive code of the rules applicable to the matter. It is hard to see how the legislator could have more clearly defined the scope of the acquired rights which can be relied on by litigants and the conditions for their exercise.
Respondent cannot claim any other acquired rights than those mentioned in s. 101. This section performs two functions. First, it defines the nature and scope of the acquired rights that can be relied on by litigants. Second, it lists the conditions such litigants must meet so they can claim these acquired rights. Respondent thus had to claim an "acquired right" covered by Division IX of the Act and show that he met the conditions necessary to obtain the acquired right he relied on.
What then is the acquired right claimed by respondent? It is the right to have ownership of the lots he purchased under the "Contracts for Deed" transferred to him. As Jacques J.A. observed at the start of the passage from his reasons which I cited above, [TRANSLATION] ". . . this is not the same right at issue in s. 101" (p. 706).
Certainly, the question is not as to the right to subdivide these lots or to use them for a purpose other than agriculture. The right which comes closest to the acquired right claimed by respondent, though it is not the same thing, is the right to alienate without the Commission's authorization in cases which would otherwise have been covered by s. 29 of the Act. The verb "alienate" is not defined by the Act, but it gives the following definition for the word "alienation", a definition which I cite again:
- . . .
(3) "alienation" means any conveyance of property, including sale with a right of redemption, emphyteutic lease, alienation for rent, transfer of a right contemplated in section 3 of the Mining Act (1965, 1st session, chapter 34) and transfer of timber limits under the Lands and Forests Act (Revised Statutes, 1964, chapter 92), except . . . [the exceptions listed are not relevant here].
I do not think the verb "alienate" refers both to the act of selling and the act of buying in the context of s. 101 of the Act. This verb should be interpreted so that it is the counterpart of the prohibition mentioned in s. 29. That provision applies to the sale of lots when the seller reserves a right of alienation over a contiguous lot so as to avoid the breaking up of agricultural land into units too small for agricultural purposes. If the provision prohibited the purchase of lots by an owner who already owned contiguous lots, it would not meet the objectives sought by the Act, which are to encourage the concentration of agricultural land. I therefore feel that s. 101 protects only the right to dispose of a lot, but not that of obtaining the ownership of it.
In any case, respondent does not meet the conditions listed in s. 101 of the Act. His testimony disclosed that he had never used the lots he bought under the "Contract for Deed" for other than agricultural purposes. This testimony also disclosed that he had never obtained a building or any other permit which could be described as a "permit authorizing use". It would be surprising if this were not so, since under the "Contract for Deed" respondent was not to obtain possession of the lots until the selling price was paid in full, that is after March 25, 1982.
Would the situation be otherwise if respondent could benefit from the rights acquired by Winzen, in the event that there were any? This is what Winzen argued in its submission, where it maintained that it had an acquired right itself to alienate the lots at issue to respondent without the Commission's authorization, because before the Act took effect these lots had actually been used for purposes other than agriculture. Winzen listed about a dozen acts which it said constituted use of the lots for a purpose other than agriculture. Among these acts Winzen mentioned respondent's intention to use at least one of the lots for residential purposes, the sizes of the lots, the deferred residential zoning imposed by the municipality, the subdivision of the land, the transfer of lots to the municipality for streets and parks, the objective sought by Winzen, namely the residential and industrial development of all its land, an application for services made to the city of St‑Hubert, the fact that the lots were taxed by the city of St‑Hubert not as agricultural land but as land under development, the registered sales of 850 lots and the unregistered sales of 1,033 lots. Winzen particularly emphasized the subdivision which, in its view, constituted use of the lots for a purpose other than agriculture.
In my opinion, none of these acts taken separately or as a whole constitutes effective use of the lots for a purpose other than agriculture. The Court ruled to this effect on similar facts in Gauthier v. Quebec (Commission de protection du territoire agricole), supra.
Additionally, the witness Zenkovich, representing Winzen, testified that nothing had been done to develop the lots Winzen wished to sell and they had no public utility services.
Winzen also cited Lefebvre v. Commission de protection du territoire agricole du Québec, J.E. 82‑1153, later affirmed by the Court of Appeal, J.E. 84‑720. These are the judgments disapproved by the Court in Gauthier v. Quebec (Commission de protection du territoire agricole).
I therefore conclude that neither respondent nor Winzen, who had the burden of establishing non-conforming use giving rise to acquired rights, was able to establish this. Indeed, the evidence tends to show the contrary.
The word "agriculture" is defined broadly in s. 1(1):
- In this act, unless the context requires otherwise,
(1) "agriculture" means the cultivation of the soil and plants, leaving land uncropped or using it for forestry purposes, or the raising of livestock, and, for these purposes, the making, construction or utilization of works, structures or buildings, except residences;
It follows that, contrary to the opinion of Jacques J.A. cited above, the legislator considers that land is used for agricultural purposes even if it is swampy land, a mossy hill of stone or fallow land. According to the undisputed findings of the trial judge respondent's lots, like those of some 600 other purchasers who do not yet have the right of ownership, are fallow land. The trial judge erroneously concluded that they were being used for purposes other than agriculture. In view of the legislative definition of this word, he should have come to the contrary conclusion.
In its submission Winzen argued that the word "agriculture" in s. 101 should be given its ordinary meaning, not that assigned to it by the Act. This is an untenable proposition which goes against every principle.
I would therefore dismiss the arguments of respondent and Winzen that respondent has an acquired right to the transfer of ownership of his lots.
3. Presumption Act not Retroactive
Respondent and Winzen maintained that the fact of giving the Act an interpretation affecting the legal relations between them before the Act came into effect amounts to making it retroactive. The trial judge and a majority of the Court of Appeal agreed.
With respect, I do not agree.
True retroactivity can generally be seen simply from reading a statute. Thus, in the case at bar, the Act provides in s. 117 that it will come into force on the date it receives assent, namely December 22, 1978, but s. 116 expressly makes it retroactive for just under two months:
- This Act has effect from 9 November 1978.
November 9, 1978, is the date the Act was tabled for first reading. The legislator undoubtedly wished to ensure that persons having interests in land included in designated agricultural regions and mentioned in Schedule A of the Act would not quickly take steps to attempt to avoid the effect of the Act before it came into force.
That is true retroactivity, but it does not affect the case.
What respondent and Winzen actually wish to avoid is not an interpretation making the Act retroactive but immediate application of the Act, on the ground that it affects the performance of agreements concluded before the Act took effect.
The Act, and especially s. 29, applies to all alienations occurring after it took effect. The aforesaid definition of the word "alienation" in s. 1(3) refers to "any conveyance of property", and not to prior agreements by which the parties may have undertaken to make such a conveyance. The notarial deeds of March 25, 1982 are according to their express language conveyances of property and they are subsequent to the date on which the Act took effect. Section 29 of the Act therefore can and must be applied to them without giving it retroactive effect, even though the agreements which led to these deeds were made before the date on which the Act took effect.
The Commission may have been right in arguing in its submission that this is the only essential question raised by the case and that the answer is as certain as the question is straightforward. However, though the parties may have complicated the matter by their arguments on the suspensive condition, the term and acquired rights, it seemed preferable and prudent to follow their lead in view of the judgments of the lower courts.
It is not unprecedented for a statute to affect agreements entered into or legal relationships created before it takes effect, without that making the statute retroactive.
Thus, in Acme Village School District (Board of Trustees of) v. Steele‑Smith, [1933] S.C.R. 47, a section of the School Act provided that, except in June of each year, no notice terminating a teacher's employment could be given by a school board without an inspector's prior authorization. It was held that this provision applied to a notice given after the new act came into effect with respect to a contract of employment entered into before it.
In Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, supra, a majority of the Court applied the new provisions of the Income Tax Act to appellant with respect to expenses incurred before the provisions came into effect, and held that it was not thereby giving them retroactive effect. Dickson J., as he then was, wrote for the majority at p. 279:
An amending enactment may provide that it shall be deemed to have come into force on a date prior to its enactment or it may provide that it is to be operative with respect to transactions occurring prior to its enactment. In those instances the statute operates retrospectively. Superficially the present case may seem akin to the second instance but I think the true view to be that the repealing enactment in the present case, although undoubtedly affecting past transactions, does not operate retrospectively in the sense that it alters rights as of a past time. [Emphasis added.]
(I think it should be pointed out that, unlike the French version, the original English version of this passage does not refer, at least literally, to "acquired rights".)
The same rules were applied by Chouinard J., speaking for the Court, in Attorney General of Quebec v. Expropriation Tribunal, supra.
In the case at bar, the Commission is not arguing that the Act applies to alienations that took place before the Act came into effect. It is also not contending that the "Contracts for Deed" were unlawful or invalid. What it is saying, and in my opinion correctly, is that they cannot in view of s. 29 be lawfully implemented by an alienation made without its authorization after the Act came into effect.
Other examples could be given where the Act affects prior agreements on the date it takes effect, without thereby being retroactive. The following example comes to mind. Sections 70 and 72 of the Act prohibit the removal of topsoil and lawn turf for purposes of sale unless the Commission has issued a permit authorizing this. If, before the Act took effect, the owner of a lot had concluded a contract with a contractor to remove the topsoil on his lot, if the Act had taken effect before the contract was performed and if the Commission denied the permit requested, such a contract surely could no longer be lawfully implemented. This consequence would result not from the retroactivity of the Act but from its immediate application.
I would therefore dismiss the argument of respondent and Winzen regarding retroactivity of the Act.
4. Other Arguments Raised by Respondent
In paragraph 16 of his application for declaratory relief, respondent makes the following arguments:
[TRANSLATION]
- -- WHEREAS further applicant submits the following arguments:
(i)According to the magistrates and/or authorized representatives of the city of St‑Hubert, mis en cause, in which the land owned by applicant is located, it is no longer possible to "return to agricultural use" for the 1,033 aforesaid lots;
(ii)The municipal zoning of these lots is RX deferred with a possibility for future residential zoning, and spaces for parks and streets have been transferred to the city of St‑Hubert by the mis en cause Winzen Land Corporation for such residential purposes;
(iii)At all times relevant to the case at bar the mis en cause, Winzen Land Corporation Ltd., and of necessity applicant also, has never benefited from the privileges given to cultivated land, with respect to the collection of taxes payable to the city of St‑Hubert, mis en cause;
These arguments are manifestly wrong. Questions of taxation and municipal zoning have no bearing on application of the Act. Under s. 98, the Act prevails over any inconsistent provision mentioned in this section:
- This act prevails over any inconsistent provision of a general law or special act applicable to a community, or to a municipal or county corporation.
It also prevails over any provision of a land use and development plan, a master plan or a zoning, subdivision or construction by‑law.
It would have been strange if someone could use his municipal tax bill or the relevant zoning by‑law to place himself outside the scope of the Act. If respondent and Winzen have complaints to make regarding their relations with the city of St‑Hubert, then they should apply to the appropriate authorities. I would therefore dismiss the arguments made by Mr. Venne in his application.
5. Conclusion
Section 29 of the Act applies to the deeds of alienation of March 25, 1982, concluded between Winzen and respondent, and the latter has no acquired right placing him outside the scope of this provision.
VII - Conclusions
I would allow the appeal, set aside the judgments of the Court of Appeal and the Superior Court, dismiss the application for declaratory relief and, allowing appellant's conclusion, I would declare that the two notarial deeds of sale executed by respondent and the mis en cause Winzen Land Corporation on March 25, 1982, are voidable under s. 30 of the Act to preserve agricultural land, the whole with costs throughout.
Appeal allowed with costs.
Solicitors for the appellant: Beaupré, Trudeau, Montréal.
Solicitor for the respondent: Jean Bruneau, Montréal.
Solicitors for the mis en cause the city of St‑Hubert: Bélanger, Sauvé, Montréal.
Solicitors for the mis en cause Winzen Land Corp.: Poliquin, Coutu, Bernier, Montréal.
*Le Dain J. took no part in the judgment.