Shergar Developments Inc. v. Windsor (City)


This case involved complicated property law issues and an allegation of bad faith against BLG’s client, the City of Windsor. The plaintiff had purchased former Canadian Pacific Railway (“CPR”) lands on the north and south sides of Riverside Drive. The two parcels were connected by land beneath a bridge on Riverside, but it was unclear who owned the bridge or the land beneath it. The lands to the north of Riverside ran along the Detroit River. The City had long intended to acquire those lands for inclusion in a riverfront park, but the applicable land use policies also permitted development. The lands to the south were developable but were landlocked except for the land under the Riverside bridge.

The owner sought permission to develop the southern parcel, but negotiations with the City were unsuccessful. The City ultimately decided to expropriate the owner’s northern parcel in order to protect its plans for a riverside park.

The owner commenced a civil suit, alleging bad faith on the part of the City. The owner also claimed that it had acquired the Riverside bridge and the land beneath it from CPR, such that its two parcels were contiguous. In support of this claim the owner asserted that Riverside Drive did not exist when CPR acquired the lands in 1888, and that CPR’s lands would therefore have included the land beneath the bridge.

BLG acted for the City and presented evidence that Riverside Drive did exist in 1888, and that railways do not acquire title to municipal roads when train tracks cross those roads. In addition, BLG established that CPR was prohibited under the Railway Act from expropriating municipal rights of way, so it could not have acquired the bridges or the land beneath them in that fashion.

The court agreed and found that CPR built the bridges but the City owned both the bridges and the land beneath them. The court also found that CPR had agreed to maintain the bridges in perpetuity because its agreement with the City included no expiry date. Finally, the court rejected the owner’s claims of bad faith with respect to the expropriation, finding instead that the City reasonably believed it had “no alternative” but to expropriate. The Court of Appeal affirmed the court’s decision. The City of Windsor saved millions of dollars as a result of this success.

Stephen Waqué, Frank Sperduti and Sean Gosnell are partners at Borden Ladner Gervais LLP and members of BLG’s EMER Group (Environmental, Municipal, Expropriation, and Regulatory Law). For more information on any of these professionals, please visit: www.blg.com.

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