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Supreme Court limits role of Federal Court in municipal bylaw cases

|Written By Elizabeth Raymer
Christopher Williams of Aird & Berlis LLP says today is 'a good day for municipalities.'

The Federal Court does not have jurisdiction to decide whether a municipality’s bylaws apply to a company’s residential properties, the Supreme Court of Canada ruled today in Corporation of the City of Windsor v. Canadian Transit Company, in a 5-4 decision that left the majority and the dissent clearly at odds.

Writing for the majority, which included the chief justice, Justice Andromache Karakatsanis found that the case should be decided by the Ontario Superior Court of Justice, where the parties have already been engaged in proceedings relating to repair orders for Canadian Transit Company properties. 

“This is a good day for municipalities, who very much support access to justice, and the fact it will be local superior courts who will be deciding these important matters rather than the Federal Court,” says Christopher Williams of Aird & Berlis LLP in Toronto, who was lead counsel for the appellant, the Corporation of the City of Windsor.

“The key aspect [of the decision], in my opinion, was a confirmation of the limited and statutorily constrained role of the Federal Court, and flowing from that was the finding that it’s the superior courts who have the jurisdiction to determine constitutional applicability and constitutionality of municipal bylaws as they relate to federal undertakings.”

The case before the court was that of the Canadian Transit Company, which owns and operates the Canadian half of the Ambassador Bridge connecting Windsor, Ont. and Detroit, Mich. The company was incorporated in 1921 by An Act to Incorporate The Canadian Transit Company, or CTC Act, which empowered the company to construct, maintain and operate a general traffic bridge across the Detroit River, to purchase, lease or otherwise acquire and hold lands for the bridge, and to construct, erect and maintain buildings and other structures required for the convenient working of traffic over the bridge.

The CTC Act also declared the works and undertaking of the company to be for the general advantage of Canada, which triggered federal jurisdiction under the Constitution Act, 1867.

At issue in the case were the more than 100 residential properties in Windsor that the CTC had purchased with the intention of eventually demolishing the homes and using the land for maintenance and expansion of the bridge and its facilities. Most of the homes are now vacant and in varying states of disrepair. The City of Windsor issued repair orders against the properties pursuant to a municipal bylaw, but the CTC has not complied with the repair orders. The two parties have been engaged in proceedings relating to these repair orders in the Ontario Superior Court of Justice. The CTC also applied to the Federal Court for declarations to the effect that it has certain rights under the CTC Act that supersede the bylaw and the repair orders issued under it. 

The City of Windsor moved to strike the CTC’s notice of application, saying that the Federal Court lacked jurisdiction to hear the application. The Federal Court struck the CTC’s notice of application for want of jurisdiction. The appeal to the SCC dealt only with the preliminary issue of whether the Federal Court had jurisdiction to decide whether the Company must comply with the City’s bylaw and repair orders.

In dissenting reasons, Justices Michael Moldaver and Russell Brown, also writing on behalf of Justice Suzanne Côté, found that the Federal Court did indeed have jurisdiction to hear the CTC’s application, and that the City of Windsor’s appeal should be dismissed. “The Federal Court’s jurisdiction should be construed broadly,” the dissenting justices wrote, finding that s. 23(c) of the Federal Courts Act provided the necessary statutory grant of jurisdiction.

In separate dissenting reasons, Justice Rosalie Abella found that the appeal should be dismissed in part and a stay of the Federal Court proceedings entered. “The result of the Company [CTC] diverting the course of the proceedings into a jurisdictional side-show is obvious — additional expense and delay in aid of nothing except avoiding a determination of the merits for as long as possible. To date, that jurisdictional diversion has cost the public a delay of three years,” Justice Abella wrote, adding that there was no basis for further delaying the Ontario Superior Court proceedings.

“This [decision] is a potential constitutional game changer,” says Eugene Meehan of Supreme Advocacy LLP in Ottawa (Marie-France Major of Supreme Advocacy acted as co-counsel for intervener, the Federation of Canadian Municipalities, in the case).

“Going forward, we could see more division of power and jurisdiction-based cases being challenged in the courts,” Meehan told Legal Feeds. “Many federal matters have a significant impact at a municipal level throughout Canada. Pipelines, Canada Post mailboxes, cellphone towers all raise issues.”


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