This was an appeal of Justice Labrosse’s “remittal decision,” wherein he attempted to implement the instructions of an earlier 2021 Court of Appeal decision that struck two key sections of the 40% Agreements dealing with the use of the golf course lands. Justice Labrosse had carved out many provisions relating to the golf course. The City and the Coalition appealed that decision. The Coalition’s main argument was that the parties always intended for the golf course lands to remain as natural green, open and recreational space, whether as a golf course or not.
The Court of Appeal has rejected the City and the Coalition’s arguments and has dismissed the appeal. It concludes that the application judge, Justice Labrosse, reached the correct conclusion in effectively rendering all provisions relating to the golf course in the 40% Agreements inoperative.
First, the Court of Appeal did not engage with the Coalition’s arguments with respect to “severance” or the ability of the Court to carve out the provisions of the 40% Agreement to maintain greenspace. The Court of Appeal noted that applying severance in this case would call for new jurisprudence, which was not the original 2021 Court of Appeal decision’s 2021’s intent.
Second, the Court of Appeal concluded that Justice Labrosse was correct in determining that Campeau (now Clublink) and Kanata (now Ottawa) had intended, through “integrally related provisions,” to strike a balance between the 40% open space principle and allowing the golf course lands to evolve over time beyond its use as a golf course. The Court of Appeal concludes that the removal of the provisions imposing constraints on the conveyancing of the golf course lands back to Ottawa in the event that the golf course is no longer operated, however, fundamentally frustrated that balance. In other words, once s. 5(4) and 9 of the 1981 Agreement are removed (2021 decision), the bargain struck by the parties in relation to the golf course lands cannot be sustained. The Court of Appeal says that simply leaving the remaining provisions in effect, as urged by the City and supported by the Coalition, would require the golf course lands to be maintained for that purpose in perpetuity. Such an outcome would be at odds with the intent of the parties to the 1981 Agreement, which also was to ensure a pathway for the evolution of the use of the golf course lands. In other words, without the right to convey the land and the associated restrictions, the bargain between the parties to the 40% Agreements cannot be maintained.
Similarly, the Court of Appeal disagrees with Coalition’s argument that the 40% open space principle should remain enforceable even if the requirement to operate a golf course is not. Without the balance created by the 1981 Agreement, the Court of Appeal underlines, the bargain between the parties relating to the golf course lands is at an end, including the 40% open space provisions.
To the extent Clublink may receive a windfall by now being able to redevelop the golf course lands, the Court of Appeal concludes that that windfall is attenuated by the fact that it has maintained the golf course on the golf course lands since 1997, in addition to the declining revenue associated with this use of the property. Further, it is reasonable to infer that the purchase price Clublink paid included the possibility of redeveloping the land subject to the now void conveyance provisions contained in the 1981 Agreement. For these reasons, the Court of Appeal rejected the Coalition’s argument that Clublink would enjoy an unjustified windfall if the provisions in the 1981 Agreement and related contracts concerning the golf course lands are held to be void.
As a result of its analysis, the Court of Appeal declares that all provisions in the 1981 Agreement and related contracts relating to the golf course lands are to be considered void. Where provisions relate to the property as a whole, they are to be interpreted as no longer applying to the golf course lands. The Court of Appeal notes that Clublink will be able to pursue its proposed redevelopment of the golf course lands, and the City will no longer be able to withhold its consent in relation to that redevelopment.
Charles Daoust
Avocat / Lawyer