T-5337-78
Paddlewheel Village Limited (Plaintiff)
v.
Commissioner of Yukon Territory and the Queen
(Defendants)
Trial Division, Collier J.—Whitehorse, July 3 and
4; Vancouver, September 7, 1979.
Prerogative writs — Declaration and mandamus — Crown
— Land in Yukon Territory — Reversionary interest —
Proposal to subdivide lot into three lots — Lot located on
outskirts of Whitehorse but included within Whitehorse city
limits following extension of city boundary — Application for
declaration that lot not subject to reversionary interest in
favour of Federal Crown created by Territorial Lands Regula
tions — Application for mandamus requiring Commissioner to
approve or require changes in plan of subdivision — Whether
or not the reversionary interest attached to the land, and if so,
when — Whether or not the reversion applied given the nature
of the subdivision — Territorial Lands Act, R.S.C. 1970, c.
T-6, s. 4 — Yukon Act, R.S.C. 1970, c. Y-2, s. 46 —
Territorial Lands Regulations, SOR/61-1, s. 7(1),(2).
In 1967, an agreement was concluded between the Federal
Crown and a private individual for the purchase of raw land
(subsequently lot 530) from the Crown, and on April 20, 1970,
notification was given by the Minister permitting its registra
tion. The lot was eventually sold to plaintiff. On April 24, 1972,
the City of Whitehorse extended its boundaries and incorpo
rated the land in question. Plaintiff, in 1977, proposed the
subdivision of the lot into two lots and received the required
approvals. While formal approval was still pending, however,
plaintiff decided to apply to subdivide the lot into three lots.
The Territorial Commissioner took no action on that applica
tion. The Yukon Government raised the question of the
Crown's reversionary interest—that on the subdivision of cer
tain lots, one-third of the lots so subdivided revert to the
Federal Crown. Plaintiff seeks a declaration that the lot is not
subject to a reversionary interest and mandamus requiring the
Territorial Commissioner to approve or disapprove the second
plan of subdivision. The main issue is whether or not lot 530 is
subject to the reservation and condition set out in paragraph
7(1)(b) of the Territorial Lands Regulations, and if so, when
that reservation attached to the land.
Held, the applications are allowed. The original agreement
for sale clearly falls within the words "Every agreement for sale
... of territorial lands ...". The reversionary condition set out
in paragraph 7(1)(b) of the Territorial Lands Regulations then
became part of the agreement and ran thereafter with lot 530.
There is nothing which takes away from the Crown any rever-
sionary rights. The expression "townsite lots" includes land,
suitable for subdivision into lots, which is part of the site of an
existing town, or in some cases, a proposed or contemplated
town. The subdivided lots must be serviced by streets, services,
and the other usual facilities and appendages. Those streets and
services must either exist or be proposed or contemplated.
While the subdividing referred to in paragraph 7(l)(b) need
not be that frequently carried out by a commercial developer,
the draftsman had that situation in mind when he provided for
the reversionary interest in respect of tracts of raw land, ten
acres or more in size, being purchased and then later carved up
into lots for commercial or residential purposes in a city or
town. Lot 530 and the surrounding area could not, at any
material time, be considered part of a townsite. Merely includ
ing it within city boundaries did not convert it from a rural or
partially developed area on the outskirts of a townsite into a
townsite lot. The reservation, therefore, does not apply. The
Commissioner has a duty to approve the plan in question or
require that it be amended.
Nowlan v. Commissioner of the Yukon Territory S.C.Y.T.
No. 359/77 (unreported, June 16, 1978), followed.
APPLICATIONS.
COUNSEL:
I. J. Cable for plaintiff.
S. B. Horton for defendant Commissioner of
Yukon Territory.
G. O. Eggertson for defendant the Queen.
SOLICITORS:
Cable, Veale, Cosco & Morris, Whitehorse,
for plaintiff.
S. B. Horton, Whitehorse, for defendant
Commissioner of Yukon Territory.
Deputy Attorney General of Canada for
defendant the Queen.
The following are the reasons for judgment
rendered in English by
COLLIER J.: The plaintiff is the owner of lot
1004 Quad. 105-D/11. It is now within the bound
aries of the City of Whitehorse in the Yukon
Territory.
The plaintiff proposes to subdivide the lot into
two. A subdivision plan was presented for approval
to the defendant, the Commissioner of the Yukon
Territory. A dispute arose as to whether the land
in question was governed by subsection 7(1) of the
Territorial Lands Regulations, SOR/61-1. That
dispute gave rise to this lawsuit.
The Regulation provides, generally speaking,
that on the subdivision of certain lots, one-third of
the lots in the land so subdivided shall revert to the
Federal Crown. I shall later set out, verbatim,
certain of the Regulations, including subsection
7(1).
In this litigation the plaintiff is claiming a decla
ration that the lot in question is not fixed with the
so-called reversionary interest. Further relief, in
the nature of mandamus, is sought against the
Commissioner, requesting him to approve the sub
division plan or to require it to be amended.
A large part of the material facts is not in
dispute. Lot 1004 was originally part of lot 530, in
group 804 in the Yukon Territory. Another lot,
532, adjoins lot 530.
On January 25, 1965, Albert George ter Voert
("ter Voert") became the purchaser from the Fed
eral Crown, under an agreement of sale, of lot 532.
On February 14, 1966, ter Voert applied to
purchase lot 530. The land was to be used, in
conjunction with lot 532, for a tourist campsite.
An agreement of sale, dated October 11, 1967,
between the Federal Crown and ter Voert, was
entered into in respect of lot 530. The agreement
provided the purchaser would, by September 1,
1969, put improvements, at a value of not less than
$10,000, on the land. The purchaser also agreed,
before letters patent issued, to have the land sur
veyed by a Dominion land surveyor.
The survey was carried out and recorded under
No. 55860 in the Canada Lands Surveys Records
at Ottawa. It was registered in the Yukon Land
Registration District on March 13, 1970.
On April 20, 1970, the Minister of Indian
Affairs and Northern Development directed the
Registrar of the Yukon Land Registration District
to issue a certificate of title in respect of lot 530 to
ter Voert. The certificate itself issued on April 23,
1970.
Both lots 530 and 532 were sold, shortly after,
to Equity Investments (Yukon) Ltd. In respect of
lot 530, the transfer was dated May 8, 1970, and
registered May 21, 1970.
One Douglas Belley, in the summer of 1970, was
employed by Equity Investments as manager of
the lands. Tourist facilities and a campsite were
being operated there.
Belley is now the president and majority share
holder of the plaintiff. He has held those positions
since June 1971.
Equity Investments sold lot 530 and lot 532 to
the plaintiff. In respect of lot 530, the transfer was
dated January 5, 1971, and was registered January
15, 1971. Title 341 "WW" was issued to the
plaintiff.
I now set out section 7 of the Territorial Lands
Regulations:
Sale of Territorial Lands
7. (1) Every agreement for sale and every grant of territo
rial lands other than surveyed territorial lands in a townsite
shall be deemed to contain the following reservations and
conditions in addition to those prescribed by the Act:
(a) a reservation of such part or parts of the land as may
from time to time be appropriated by Her Majesty in right of
Canada for the purpose of a public road; and
(b) where the land sold has an area in excess of ten acres,
the condition that if the owner subdivides the lands or any
portion thereof into townsite lots one-third of the lots in the
land so subdivided shall revert to the Crown.
(2) Lots to which the Crown is entitled under paragraph (b)
of subsection ( 1 ) shall be selected as follows: the owner shall
first select two lots and the land agent shall then select one lot
for the Crown and this shall be repeated until all lots are
selected.
Those Regulations were made pursuant to the
Territorial Lands Act'. Section 4 of that Act is as
follows:
SALE OR LEASE OF TERRITORIAL LANDS
4. Subject to this Act, the Governor in Council may author
ize the sale, lease or other disposition of territorial lands and
may make regulations authorizing the Minister to sell, lease or
otherwise dispose of territorial lands subject to such limitations
and conditions as the Governor in Council may prescribe.
The plaintiff wished to subdivide lot 530. Mr.
Belley instructed Mr. J. F. Welter, a Dominion
land surveyor. On November 22, 1977, a prelim
inary sketch plan of the proposed subdivision was
submitted to the City of Whitehorse. The proposal
was to divide lot 530 into two lots, lot 530-1 and
lot 530-2. A similar plan was sent to the Commis
sioner on December 16, 1977, (Ex. 15). Provisional
approval was given by the city on November 28,
1977, and by the Administrator of the Yukon
' R.S.C. 1970, c. T-6.
Territory on December 30, 1977.
I described the approval as provisional. Before
formal approval is given, a survey must be carried
out and the formal plan and field notes submitted.
There were some changes made in the proposed
boundary lines of the new lots. As well, the num
bering of the lots was changed, from those set out
above, to lot 1004 and lot 1005. The field work
and survey were carried out between January 18
and January 25, 1978.
No one raised the question of, on this proposed
subdivision of lot 530 into two, the Crown's right
to a reversionary interest. I assume that was
because subsection 7(2) of the Regulations con
templates a subdivision into at least three lots
before the Crown is entitled to select one.
While formal approval was still pending, Mr.
Belley decided to apply for a subdivision into three
lots. On January 12, 1978, a preliminary sketch
plan was submitted. (Ex. 13.) The proposal was to
divide lot 530 into three lots, described as lot
530-1, lot 530-2, and lot 530-3.
It was at this stage that the Government of the
Yukon Territory raised the question of the Crown
reversionary interest (see Ex. 18, dated February
7, 1978).
But the proceedings in respect of subdividing lot
530 into lots 1004 and 1005, nevertheless, con
tinued. The City of Whitehorse gave formal
approval on February 27, 1978. The Commissioner
of the Yukon Territory gave his formal approval
on March 14, 1978.
On April 19, 1978 (Ex. 19) a preliminary sketch
plan of the proposed subdivision of lot 1004 into
two lots was submitted. I presume this new plan
was prepared, in substitution for the plan tendered
on January 12, 1978, because the lot numbers had
changed.
On April 25, 1978, Mr. Welter wrote to the
Government of the Yukon Territory taking issue
with its position that the reversionary Regulation
applied. Ultimately the Government of the Yukon
Territory replied, (Ex. 23) setting out its opposing
views.
The matter had then reached an impasse. The
Commissioner did nothing. He neither approved
the plan submitted on April 25, 1978, nor did he
require it be amended. It seems obvious the parties
felt the matter would likely have to be resolved by
litigation.
The main issue is whether lot 530 is subject to
the reservation and condition set out in paragraph
7(1)(b) of the Regulations. There is some doubt,
among the parties, as to which document in this
case is deemed to contain the reservation in ques
tion: the agreement of sale with ter Voert, dated
October 11, 1967, or the notification (Ex. 3) dated
April 20, 1970. In the Territorial Lands Act
"grant" means, among other things, a notification.
At the time of the agreement of sale these lands
were unsurveyed territorial lands. At the time of
the notification they were surveyed. Counsel were,
in argument, of the view that section 7 of the
Regulations is not well drafted. I agree. Counsel
also concurred that the first line of subsection 7(1)
should be read as if there were a comma after
"lands" and a further comma in the second line
after the word "townsite". I, again, agree.
If one adopts a literal construction of the first
line of subsection 7(1), both the agreement for sale
and the grant, in this case, are deemed to contain
the reservation set out in paragraph (b). The only
caveat, in respect of the notification of April 20,
1970, is whether lot 530 was, at that time, "in a
townsite".
As I understood Mr. Eggertson, counsel for the
Queen, and Mr. Horton for the Commissioner,
neither of them contended lot 530 was, at the date
of the notification, "in a townsite". Both counsel
took the view, however, that at the time of the
proposed subdivision, in 1978, of lot 530 into 3 lots
(or lot 1004 into 2), the plaintiff was subdividing
"into townsite lots." This contention was primarily
based on the enlarging, in 1971 or 1972, of the
boundaries of the City of Whitehorse. That exten
sion embraced lot 530 and a large area surround
ing it. In argument, Mr. Horton said the effective
date of the boundary extension was April 24, 1972.
From that date on, the submission ran, lot 530 was
in a "townsite"; any subdivision thereafter, into 3
or more lots, was into "townsite" lots.
All that raises the interpretation to be given to
the word "townsite", used in this Regulation both
as a noun and an adjective.
Before embarking on that task it is necessary, I
think, to determine which document one should
first go to, in order to decide whether the land here
falls within the expression "townsite". In my view,
the ter Voert agreement for sale clearly falls
within the words "Every agreement for sale ... of
territorial lands ...." The reversionary condition
set out in paragraph (b) then became part of the
agreement; it ran thereafter with lot 530.
Counsel for the plaintiff contended that if that
were the case, the reversionary interest, deemed
included in the agreement for sale, did not "sur-
vive the turn-over of the administration of certain
territorial lands by Her Majesty to the Yukon
Territory." By Order in Council, dated August 19,
1970 (Ex. 29), the Crown transferred to the
Yukon Territory "the administration of all right,
title and interest" of the Crown in certain territo
rial lands set out in a schedule to the Order in
Council. Lot 530 was included.
Section 46 of the Yukon Act e was referred to:
Lands
46. The following properties, namely,
(a) lands acquired before or after the 1st day of April 1955
with territorial funds,
(b) public lands, the administration of which has before or
after the 1st day of April 1955 been transferred by the
Governor in Council to the Territory,
(c) all roads, streets, lanes and trails on public lands, and
(d) lands acquired by the Territory pursuant to tax sale
proceedings,
are and remain vested in Her Majesty in right of Canada, but
the right to the beneficial use or to the proceeds thereof is
hereby appropriated to the Territory and is subject to the
control of the Commissioner in Council; and any such lands,
roads, streets, lanes or trails may be held by and in the name of
the Commissioner for the beneficial use of the Territory.
It was argued the effect of section 46 was to give
the Commissioner the right to make his own rules
in respect of the administration and control of
lands such as lot 530; the Commissioner had made
2 R.S.C. 1970, c. Y-2.
no requirement of a reversionary interest on sub
division into townsite lots.
I do not quite understand that contention. But
viewing it in the way it was propounded, there is
nothing in section 46, in my opinion, which takes
away from the Crown any reversionary rights. The
land in question remains vested in the Crown. The
reversionary right remains also, as I see it, vested
in the Crown.
The remaining issue, then, is whether the plain
tiff's proposed subdivision is into townsite lots.
That is a difficult question.
All counsel said they had been unable to find
any reported cases interpreting the expression
"townsite". Counsel for the plaintiff relied on
several elderly English decisions, interpreting the
word "town". 3 The English decisions referred to
are helpful, but inconclusive.
Dictionary meanings are in somewhat the same
category. The dictionaries I consulted do not refer
to the word "townsite". But I assume it can be said
townsite implies the site of a "town". The Shorter
Oxford English Dictionary (3rd ed.) 1965, defines
"town", inter alia, as follows:
Now commonly designating an assemblage of buildings, public,
and private, larger than a village, and having more complete
and independent local government; applied not only to a "bor-
ough", and a "city", but also to an "urban district", and
sometimes also to small inhabited places below the rank of an
"urban district".
The Living Webster Encyclopedic Dictionary of
the English Language (1971) has a similar
definition:
A collection of inhabited houses larger than a village and
having more complete local government; a city or borough; ...
the chief town or city of a district or country; the central area
of a city; a municipal corporation, in New England, with less
elaborate organization and powers than a city; a township, in
states excluding New England; the townspeople.
I have endeavoured to find guidance from the
meaning of "township" given in dictionaries or
statutes. The Shorter Oxford Dictionary gives one
description as follows:
5. U.S. and Canada. A division of a county having certain
corporate powers of local administration (in the newer states, a
division six miles square, and so called even when still unset
tled); the same that in New England is called a town 1685. 6.
3 Elliott v. The South Devon Railway Company (1848)
L.J. 17 Ex. 262. Lord Carington v. Wycombe Railway Com
pany (1867-68) 3 L.R. Ch. App. 377. Falkner v. Somerset and
Dorset Railway Company (1873) L.R. 16 Eq. 458.
In Australia, A site laid out prospectively for a town 1802.
A similar description is given in the Living
Webster.
The Canada Lands Surveys Act 4 provided (sec-
tion 33) 5 :
... public lands shall be laid out in quadrilateral townships.
Each township contains thirty-six sections, each
section being nearly one mile square (section 35) 5 .
Section 46 of the statute referred to the bound
ary lines of "townships, sections, legal subdivisions
or other authorized subdivisions of public lands". 6
But no definitions or descriptions of those words or
phrases are given.
I note, also, the Land Titles Act 7 (which applies
to territorial lands) contemplates subdivision (sec-
tion 83), as well as subdivision for purposes of
"laying the land out as a town-plot" (section 86).
"Town-plot" is neither defined nor described. But
it seems to contemplate what one would normally
expect to find in a subdivision plan: roads, streets,
passages, etc. (see particularly subsection 86(2)).
But all of the above is, I fear, of little help in
coming to an accurate conclusion as to what the
drafter of the Regulations had in mind when he
used the expression "townsite lots".
In my view, that expression includes land, suit
able for subdivision into lots, which is part of the
site of an existing town, or in some cases, a
proposed or contemplated town. The subdivided
lots must, as I see it, be serviced by streets,
services, and the other usual facilities and append
ages. Those streets, services, etc. must either exist
or be proposed or contemplated. While the subdi
viding referred to in paragraph 7(1)(b) need not
be that frequently carried out by a commercial
developer, it seems to me the draftsman had that
situation in mind when he provided for the rever-
sionary interest in respect of tracts of raw land, 10
4 R.S.C. 1970, c. L-5.
5 Subsequently repealed by S.C. 1976-77, c. 30, s. 22.
6 Subsequently amended by S.C. 1976-77, c. 30, s. 26.
7 R.S.C. 1970, c. L-4.
acres or more in size, being purchased and then
later carved up into lots for commercial or resi
dence purposes in a city or town.
The evidence in this case shows that lot 530 and
the area surrounding it, both before and after the
extension of the City of Whitehorse boundaries,
was not developed in what I would consider to be
along townsite lot characteristics or lines. There
was, and is, in the general area of lot 530, no
lay-out of streets, roads or public thoroughfares in
the usual sense. The lands in that area were, in
1967 and since, mainly publicly owned and, gener
ally speaking, undeveloped. At lot 530 in particu
lar, there were and are no public services, such as
sewage, water, or mail delivery. Mr. Belley
installed his own water and sewage systems. Elec
tricity is not obtained from the city, but from a
private company.
In my view, lot 530 and the surrounding area
could not, at any material times, be considered
part of a townsite. It was essentially in 1967 and in
1970 a rural, or partially developed area, on the
outskirts of a townsite.
Merely including it within city boundaries in
1971 or 1972 did not, without more, convert it
from that characterization into a townsite lot.
,The reservation, therefore, does not apply.
There will be a declaration accordingly.
The Commissioner, pursuant to the Land Titles
Plans Regulations, SOR/57-20, has a duty to
approve the plan in question, or require it to be
amended.
Following the decision of Maddison J. in
Nowlan v. Commissioner of the Yukon Territory, 8
there will be an order in the nature of mandamus
directing the Commissioner to approve the sketch-
plan as submitted in respect of the proposed sub
division of lot 1004, or to return it to the plaintiff
for amendment. Any amendment required, cannot
of course, include a reservation of one lot in favour
of the Crown.
The plaintiff is entitled to its costs.
8 S.C.Y.T. No. 359/77 (unreported, June 16, 1978).
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.