Stop order runs loose in Kneehill County - A case review of Kneehill County v. Harvest Agriculture et al 2019 ABCA 506 (“Kneehill”)

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The Alberta Court of Appeal (the “CA”) in Kneehill upheld the issuance of a stop order issued by Kneehill County to compel the owner of the subject lands to operate a business (equestrian centre) and to extend privileges at the centre to adjacent lot owners in accordance with the area structure plan (the “ASP”).   In effect, the CA upheld the use of an extra-judicial remedy issued by a development officer without legal training to enforce a bylaw which was unlawful, denying the appellant the right to challenge the bylaw in the statutory appeal process provided to challenge the stop order and upholding the enforcement of positive obligations in reliance upon suspect authority.

The CA in Kneehill held:

  1. Planning legislation was not simply regulatory but could be prescriptive and positive obligations in the context of planning approvals are enforceable;
  2. The Subdivision and Development Appeal Board (the “SDAB”) may not rule on the legality of the bylaw that was the cornerstone of the stop order.

The facts

The Saddle Up Estates Area Structure Plan provided that the lands shall be developed as “…a 16-lot community around an equestrian center with related amenities (ASP para 2) . . . with … (each) lot owner to have… indoor arena access and access to designated recreation areas for riding purposes. (ASP Para. 3)

Condition 5 of the subdivision approval pursuant to which the stop order was issued states:  “The policies and plans within the Saddle Up Estates Area Structure Plan (Bylaw 1586) as approved by Kneehill County Council must be followed.” (emphasis added).

If the condition of subdivision approval had been to operate an equestrian centre rather than to comply with the ASP, it clearly would have been unlawful.

There was no dispute regarding non-compliance with the ASP.  The stop order followed. On appeal, the SDAB held that the subdivision authority could regulate only and interpreted the ASP accordingly – a land owner could not be compelled to develop her property.   The defense of the stop order in essence turned on an interpretation of the ASP bylaw which ensured the bylaw was legal. 

The law

Laux and Stewart-Palmer in Planning Law and Practice in Alberta (4th) edition addresses collateral attacks on bylaws as follows;

16.2 …”in rendering a decision, a [Board] may have applied a particular provision of a land use bylaw, that provision being the cornerstone of the board’s decision. In challenging the board’s decision it may be open to the applicant to argue that the bylaw provision was illegal.” 

Citing Tegon Developments v. Edmonton [1977] 81 DLR (3d) 543 CA affirmed by SCC at [1979] 121 D.L.R. (3d) in which the validity of a council resolution relied on by the development officer was held by the SCC (on appeal from the Alta CA via the SDAB) to be invalid – all under the statutory appeal process.  In Kneehill, the CA relied upon a prior decision of the CA in Coffman v. Ponoka County No. 3 1998 ABCA 269 (“Coffman”) which held that the SDAB could not review the validity of the underlying bylaw which is the basis for the issuance of a permit or stop order and must accept the bylaw as written.

The Municipal Government Act RSA 2000 Chapter M-26 (“MGA”) provides that an ASP should establish a framework for subsequent subdivision and development (s.633(1)) … and  must describe (i) the sequence of development proposed …,  (ii) the land uses proposed, …( emphasis added),  (iii) the density of population …, and (iv) the general location of major transportation routes and public utilities,   and  (b) may contain any other matters, including matters relating to reserves, as the council considers necessary. (emphasis added)

Every municipality must adopt a land use bylaw (a “LUB”) (s.640(1)) to prohibit or regulate and control the use and development of land and buildings in a municipality...(s. 640(1.1)” And must designate permitted or discretionary uses S.640(2)(b)(i) and (ii). The Kneehill County LUB designates equestrian centres as a discretionary use. 

 “A subdivision authority may impose (a) condition to ensure that …the statutory plan (ASP) … affecting the land … is complied with;(S.655(1).”

The decision

The Municipality argued that the MGA allowed the approving authority to impose positive obligations upon the applicant.  The land owners argued that the MGA was regulatory only, and dependent upon its application for the initiative of the land owner - that it is reactive and not prescriptive and the ASP must be interpreted accordingly.

The following extracts from the Kneehill decision provide the rationale of the CA:

..., nothing in the Act prevents an area structure plan incorporated into a planning bylaw from imposing positive obligations on a land owner or applicant for subdivision approval.” (para. 36)

s. 655(1)(a) of the Act expressly authorizes a subdivision authority to impose “ any conditions to ensure that…any statutory plans (ie. ASP’s)… are complied with.” (Para. 38))

The SDAB must comply with the bylaw then in effect and has no power to declare the bylaw invalid.” (Para. 39) citing the CA decision in Coffman.

Clearly the subdivision approval required compliance by the applicant with the provisions of the ASP – and that the ASP required the subject parcel to be developed and operated as an equestrian centre.  Furthermore there is extensive judicial authority referred to below holding that the SDAB is bound to accept and apply the bylaws as written.  This appears to be the only conclusion that the CA could reach, absent a detailed analysis of both Coffman and Focaccia.

The ASP is to contain the sequence for development, proposed land uses , proposed population density, transportation and utility routes (MGA s.633(2)(a) and “such other matters such as reserves as council considers necessary” (MGA s.633(2)(b)).  These elements are proposed, not mandatory.  No consideration was given to the following:

  1.   The SCC in Calgary v. Hartel Holdings [1984] 1 SCR 337, [1984] SCJ    No 17 states “Plans are policy documents and set out proposals for future development … The Land Use Bylaw is the instrument by which the policies are finally implemented.”                                         Confirming that ASP’s are not prescriptive, Laux and Stewart-Palmer Planning Law and Practice in Alberta Fourth Edition at page 5-21 “… the courts have stated that statutory plans … are not intended to regulate in any definitive way what can be done at the present time”
  2. The requirements of the ASP cannot be read in isolation of the land use bylaw which provides that a land use bylaw may prohibit or regulate but not mandate the use of land and development. Whether a person elects to develop or to continue to use her property for a use authorized by permit is voluntary.  
  3. “Whatever the particular document one is construing, when one finds a clause that sets out a list of specific words followed by a general term, it will normally be appropriate to limit the general term to the genus of the narrow enumeration that precedes it.” per La Forest J. National Bank of Greece v. Katsikonouris [1990] SCJ 95, [1990] 2 SCR 1029

    S.633(2)(b) which authorizes an ASP to address “…such other matters, including matters relating to reserves, as the council considers necessary.” should be interpreted to relate to matters which are generically similar to the items listed in s.633(2)(a) - land use, density, roadway alignments, sequence of development. These are matters which address subdivision design and land use. There is nothing in s. 633 that (a) allows the ASP to dictate that development occur contrary to the wishes of the owner, (b) allows the municipality to prescribe that others may utilize private lands for their personal pleasure, or (c) allows the municipality to specify the contents of sale agreements for the lots resulting upon subdivision of the lands.

  4. S. 617 of the Act states that the purpose of [Part 17] of the MGA  is to adopt plans to achieve orderly development “without infringing on the rights of individuals for any public interest except to the extent that  is necessary for the overall greater public interest.”  If requiring the development of land to enable its use by others for recreational purposes depriving the owner of both time and capital does not constitute “infringement’ beyond what is required in the greater public interest, it is hard to conceive what infringement would fall into that category.    

    “In interpreting legislation, our Court (the SCC) must be guided by long-standing and well-accepted principles of statutory interpretation.  One such principle states that potentially confiscatory legislation ought to be construed cautiously so as not to strip individuals of their rights without the legislation being clear as to this point” … “encroachments on the enjoyment of property should be interpreted rigourously and strictly …”    National Pacific Development Ltd. v.  Victoria (City) [2000] SCC 64 (CanLII), [2000] 2 SCR 919 at para. 26

    There can be little more confiscatory than requiring an individual to apply her capital and her time to a cause against her will, for the benefit of strangers. No rigourous interpretation of s. 633 would require a lot owner use her property for a use against her wishes for the benefit of others.

In response to the argument that the ASP could regulate only, the CA in Kneehill states: Para 37: “, nothing in the Act prevents an area structure plan incorporated into a planning bylaw from imposing positive obligations on a land owner or applicant for subdivision approval….”

On the other hand, nothing in the Act allows an ASP to impose positive obligations on a land owner. The positive obligations that are authorized to be imposed on a land owner by the Act under an agreement and relate to the infrastructure required to support the development or subdivision.         

Enforcing positive obligations 

The intent to expropriate or confiscate without compensation must be clearly expressed and exercised with extreme caution (Pacific National v Victoria SCC ibid).  Enforcing positive covenants takes both the time and capital of the individual to which the direction is imposed.  In any circumstance where positive obligations can be imposed upon an applicant for subdivision by the subdivision authority, the MGA is very specific, ie:  MGA ss. 650 and 655 require the applicant to enter into an agreement, the contents of which are prescribed in each of those sections. The MGA expressly requires the owner to provide land for roads or utilities without compensation (S.662) and for reserves (S.661).  In each instance, the positive obligation relates to the provision of public infrastructure essential to the functioning of the subdivision – not to operate a business.

The CA cites St.Paul-Butler to support its’ conclusion that positive covenants can be enforced under the MGA.  St. Paul-Butler relies entirely upon the decision of the CA in Focaccia (cited above).

The CA in Kneehill continues at Para 39:  “The respondents argue… that the ASP stated goals but did not regulate.  However this ignores the fact that the ASP was adopted by way of bylaw stated in mandatory terms and which had never successfully been challenged….. “The SDAB must comply with the bylaw then in effect and has no power to declare the bylaw invalid”: Coffman v. Ponoka (County No. 3) 1998 ABCA 269: Mather v Gull Lake (Summer Village of), 2007 ABCA 123 at para 21, 404 AR 125; Colledge v Calgary (Subdivision and Development Appeal Board), 2010 ABCA34 at para 28, 474 AR 250.  To the extent that the SDAB in the Decision ruled on the validity of the ASP, the Decision is not reasonable.”   (emphasis added) A review of Coffman is warranted.  

Coffman v. Ponoka County

In his appeal before the SDAB, Coffman alleged that the bylaw supporting the issuance of the development permit was ultra vires because council failed to hold a public hearing as prescribed by the Act.  A single member of the CA in dismissing the application for leave to appeal the decision of the SDAB states:

[10] "The applicants … seek an order quashing the development permit on the ground that it was issued pursuant to an illegal bylaw. But section 536 of the Municipal Government Act provides that an application to declare a bylaw invalid must be made to the Court of Queen’s Bench (emphasis added)…. [s. 536 actually states that the application “may” be made to the Court of Queen’s Bench.]  Moreover, section 687(3)(a) of the Municipal Government Act requires the SDAB to comply with the land use bylaw in effect. … In my view, there can be no reasonable prospect of success in establishing an error on the part of the SDAB for failing to make a decision it was never asked to make, and possibly could not make. In the absence of a declaration of invalidity of the Bylaw, the SDAB was mandated to presume its validity. So too must this Court. ….”

The SCC in Consolidated Maybrun Mines Ltd. v. The Queen [1998] SCR 706 at para 25 confirms that the validity of provisions of a bylaw may be collaterally attacked in proceedings to apply/enforce such provision ( ie  a stop order).  According to the SCC, the issue is whether or not the legislation supports the conclusion that the SDAB is an appropriate forum for that review.

MGA s.536 upon which the CA reliedstates:  “A person may apply to the Court of Queen’s Bench for (a) a declaration that a bylaw or resolution is invalid, …”  While s.536 provides one method for challenging the validity of a bylaw, it is not the only method of doing so.  S. 536 does not say that such application must be brought pursuant to this section, as the Court appears to have concluded.

MGA s. 687(3)(d) prescribes that subject to limited exceptions, the SDAB “must comply with the land use bylaw in effect.”    The first task of the SDAB should then be to determine which bylaws are in effect -  and to determine if a void bylaw is “in effect”.  Additionally at present s. 618.2 of the MGA states “No bylaw is binding in respect of a matter governed by this Part unless the bylaw is passed in accordance with this Part.”  If the bylaw is not binding, can it be in effect?

The corollary is that regardless of the reason the bylaw is invalid, the SDAB must enforce it as written.

The issue is compounded by the statement of the Court at para 10 in Coffman that “in the absence of a declaration of invalidity, the CA too must accept the validity of the bylaw.”  No justification for this statement appears in the decision.  The Judicature Act of Alberta RSA 200 C. J-2 gives the Court of Appeal “ the jurisdiction and power …to hear and determine (iii) all questions or issues of law…”.   .This validity of a bylaw is clearly a question of law - so we are left to ask why the CA may have determined that it too could not review the legality of the bylaw.  Perhaps:

(a) Validity of bylaw not raised at SDAB:

The CA may not be inclined to consider questions of law not raised at the SDAB, but with a series of decisions of the CA stating that the SDAB must accept the bylaw as written, raising the legality of the bylaw at that level now appears to be an exercise in futility.  Moreover most hearings before the SDAB are conducted by the affected parties without the benefit and burden of legal counsel, so questions of law are frequently not expressly addressed by the SDAB.  This also overlooks the primary reason for the oversight by the court of administrative tribunals – to ensure the rule of law prevails.

(b) Limitation period on application to quash

S. 537 requires that applications to challenge the validity of a bylaw on procedural grounds must be brought within 60 days of the passage of the bylaw.  Could this application have been out of time? 0

(c) Right of SDAB to determine Constitutional Issues

[12] “There is nothing in the MGA which gives the SDAB the power to determine constitutional issues nor is there a general power given to SDAB’s to determine issues of law.”  Kappo v SDAB (M.D. of Greenview No.16), 2003 ABCA 146 14 Alta LR (4th) 250,

There is nothing in the MGA that states that the SDAB cannot determine questions of law – in fact, it is called on to do so with regularity and the fact that an appeal lies to the CA on questions of law and jurisdiction presumes that the SDAB has jurisdiction to determine such questions.

The brief filed in the CA by the SDAB in Coffman, but not referenced in the CA decision states:

“S. 96 of the Constitution Act, 1867, requires the federal Government to appoint all superior, district and county court judges…” “If a person exercising the powers of a superior court has not been correctly appointed under section 96, his actions are complete nullities.”

The CA does not confirm that it relied on this argument although this issue did arise in Kappo v. SDAB Greenview (ibid). This statement fails to provide the complete effect of s. 96.

Tomko v. Labour Relations Board [1977] 1 SCR 112 held that an administrative tribunal may be clothed with power formerly exercised by section 96 courts so long as that power is merely an adjunct of, or ancillary to, a broader administrative or regulatory function.  

The SCC further held that whether an administrative board can rule on the validity of an enactment requires an assessment of the institutional setting in which the decision is made.  It is not the right to make the decision alone which determines its fate but the context in which it is made.  Reference re Residential Tenancies Act [1981] 1 SCR 714.

The SCC held that a preliminary determination where oversight was to be exercised by a superior court (that an appeal lies to a s. 96 court) suggests that the body is not exercising s. 96 powers.  Crevier v. Quebec [1981] 2 SCR 220

The jurisprudence surrounding s. 96 of the Constitution Act confirms that the SDAB can in fact make decisions of law and jurisdiction, including determination of the validity of the bylaw without violating s. 96.

The decision in Coffman has been consistently applied by the CA: see Mather v. Gull Lake   2007 ABCA 123; Boll et al v. Woodlands County   SDAB 2016 ABCA 344; Bass et al v. Calgary SDAB    2019 ABCA 139;  Fire & Flower Inc. v.  Edmonton SDAB    2019 ABCA 271.  

In the SCC decision in R. v. Klippert  1998 CanlII 821 [1998] 1SCR 737,  the validity of a stop order issued by the development officer was raised in proceedings brought before the provincial court to penalize Klippert for noncompliance with the stop order.  Klippert had not availed himself of the right of appeal to the DAB (predecessor to the SDAB) raising the question as to whether he could circumvent the statutory appeal process and raise the issue of the validity of the order before the provincial court.  The SCC held that not having availed himself of the right to appeal the issuance of the stop order to the DAB, he forfeited his right to challenge the validity of the order before the courts.  

The SCC held that to allow the provincial court to make this decision would undermine the purpose and integrity of the DAB and the administrative process established to address planning issues, given that the DAB is presumed to have expertise in planning matters and its only function is to hear appeals from decisions of the development officer or subdivision authority.

The SCC identified a number of factors to be considered in assessing the right of an administrative tribunal to consider questions of law or jurisdiction:

  1. the wording of the statute under which the order was issued;
  2. the purpose of the legislation;
  3. the existence of a right of appeal;
  4. the kind of collateral attack in light of the expertise of the tribunal;
  5. the penalty on conviction.

In the review of the Planning Act by the SCC, the procedures established for the appeal, the right of all to be heard, the further right of appeal to the Court of Appeal on questions of law or jurisdiction with leave, and the right of the DAB (predecessor to the SDAB) to confirm, refuse or vary the original decision or order, the SCC concluded that this was a full appeal for which a collateral attack on the order could occur at the DAB. While the CA in Coffman correctly states that there is no express authority given to the SDAB to rule on the validity of the bylaw, nothing in the legislation suggests that the SDAB lacks the jurisdiction to address the legality of the bylaw which is the foundation of the unlawful order.

The SCC held that because the DAB can rule on the vires of the order, having failed to appeal the vires of the order to the DAB, challenging the validity of the order before the provincial Court is prohibited, - meanwhile the CA held that the SDAB does not have jurisdiction to consider the vires of the permit or order founded on the illegality of a bylaw.  The decision of the full SCC in Klippert post-dates the decision of a single justice of the CA in Coffman by only 5 months - yet Coffman has not been reviewed in the context of Klippert.

Finally, on the issue of the role of the courts and the SDAB, planning legislation establishes very short limitation dates for appeals and requires timely decisions to ensure that development does not get unnecessarily delayed.  If the challenge to the stop order or permit relates to the validity of the underlying bylaw, to require the validity of the bylaw to first be determined by the Court of Queen’s Bench and then possibly to be followed by an appeal to the CA certainly undermines the timeliness of decisions – and is a less efficient use of judicial resources than having the initial decision made by the SDAB with an appeal to the CA if required.

Fcocaccia  reviewed

Facts   

Prior to completing the asphalt surface on the roadways in the subdivision as required by the development agreement, the developer became insolvent, and in its state of insolvency, transferred the lots then held by it to a related corporation. The Summer Village issued stop orders requiring the installation of the asphalt surface on the roadways within the subdivision to both the original developer as well as the related corporation to whom a number of lots had been transferred - ostensibly as "the person in possession of the lands". No order was issued to unrelated parties to whom lots had previously been transferred.   The SDAB upheld the stop orders. At the Court of Appeal, the appellants argued that S. 655 of the MGA authorizes the subdivision authority only to require as a condition of “subdivision approval” that the applicant enter into an agreement, which condition had been satisfied – essentially that no stop order could be issued for breach of the agreement. 

The Decision

Focaccia para 15, states:  "The interpretation of statutes is guided by one principle of interpretation. The words of the statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the statute, the object of the statute, and the intention of the legislature”

Focaccia para 17 states: ..." s. 655(1)(b) of the Act contemplates a subdivision condition that the developer “enter into an agreement . . . to do . . .” specified things. It is unreasonable to interpret that provision of the Act  as a condition “to agree to do, but not actually do” those things. ..”

Clearly the intent was that the servicing would be completed by the developer at its’ cost.  – and according to the CA, this objective is advanced by issuing a stop order against the developer and some lot owners. 

A contrary view

The one principle cited by the CA above to support its’ conclusion has three elements - each of which should be applied to s. 655 (1) (b) which states:

655 (1) “ The subdivision authority may impose the following conditions … on a subdivision approval issued by it;…(b) a condition that the applicant enter into an agreement with the municipality …”  to construct or install municipal improvements:

1. "grammatical and ordinary sense" - refers generally to the plain meaning of the language. The plain meaning of s. 655 is that the condition was satisfied by entering into the agreement. The plain meaning may be abandoned if its application provides an absurd result.  The court did not consider that construction of municipal infrastructure under a construction agreement would presumably provide the desired result and not be absurd.

2. "the object of the statute" – the MGA intends that the applicant for subdivision provide the municipal infrastructure required for its subdivision or development generally at its’ cost.  If this was the only objective of this section of the Act, the condition of approval would have simply required installation of the improvements.  But no developer nor lender would put millions of dollars into the ground without the security of the imminent registration of the subdivision plan, enabling the resultant lots to secure the cost of the infrastructure - recognizing that lots without services and servicing without lots are both of limited value.  Plan registration on execution of the agreement was commercially necessary to privatize servicing of new subdivisions.

S. 645 could readily have provided that a stop order could be issued to enforce a development agreement or that the terms of the development agreement were conditions of subdivision approval.  It did neither.  The silence of the MGA on this is deliberate.

3. "harmoniously with the scheme of the act" - Sullivan Construction of Statutes 6th edition para 8.32  “It is presumed that the legislature uses language carefully so that within the statute…the same words have the same meaning and different words have different meanings.”  The CA extended the definition of subdivision approval to include requirements of the development agreement - holding that the terms and conditions of the development agreement are conditions of subdivision approval.  As a result:

  1. MGA s.655 By the interpretation of the CA, as the subdivision authority can determine the conditions of approval, the subdivision authority could also dictate the terms of the development agreement. The subdivision authority may have little understanding of the engineering aspects, engineering drawings or specifications relevant to the municipal improvements required. The mandate of the subdivision authority is to review the subdivision plan for conformity to the statutory plans and land use bylaw - not to negotiate the development agreement.
  2.  MGA S.657(1)  An applicant for subdivision approval must submit to the subdivision authority the plan of subdivision for endorsement within one year from … of the date on which the subdivision approval is given to the application; ...".    S. 657 (2)  “On being satisfied that the …conditions (of subdivision approval) have been satisfied, the subdivision authority must endorse the plan…”

    The extended definition of subdivision approval requires that the terms of the development agreement be satisfied within one year, failing which the subdivision approval could lapse pursuant to s. 657(4).  The resulting commercial uncertainty would undermine the objective of the Act.   Most development agreements allow 2 years to complete underground servicing and 1 further year to complete surface improvements.

  3. MGA s.678 (2) provides that a subdivision appeal "may be commenced by filing a notice of appeal within 14 days after receipt of the written decision of the subdivision authority... "  The extended definition of “subdivision approval”  would allow an appeal to be filed within 14 days of receipt of the final development agreement - a date which normally follows the decision of the subdivision authority by weeks or months. 
  4. MGA S. 680(2)(e)  In determining an appeal, the board hearing the appeal  ...(e) may confirm, revoke or vary the approval or decision or any condition imposed by the subdivision authority or make or substitute an approval, decision or condition of its own;".   The SDAB would have the right to dictate the terms of the development agreement. 

There is a clear absence of harmony when the extended definition of subdivision approval incorporates the terms of the development agreement - but which harmony exists with the literal definition - " to enter into the agreement".

The Land Titles Act

The CA in Focaccia concluded that the caveat registered pursuant to the development agreement was an encumbrance charging the lands with the obligation to fulfill the undertakings contained the agreement. Further once the stop order caveat was registered, there was certainty of title, which is the objective of the Land Titles Act….  This conclusion is not consistent with s. 60 of the Land Titles Act.  In effect, the CA has concluded that the conditions of subdivision approval continue to bind future owners.  Nothing in the MGA supports this position since a caveat is simply a notice and the underlying obligations are to be found in another instrument. It is far from clear that the conditions of subdivision approval run with the land as they must be fully satisfied to obtain plan registration.  In effect, conditions of subdivision approval merge on registration of the plan.

Conclusion

The interpretation given to s. 645 of the MGA by the Court of Appeal in Focaccia does not meet the plain language test, the purpose test and is not in harmony with the scheme of the Act.  It is not consistent with the principle that positive covenants do not run with the lands.  Its effect may be to impose upon lot purchasers significant financial and construction obligations which they have no capability and no right to perform.  Nothing in the MGA vests in such lot purchasers a right to enter upon public lands to undertake any construction. To saddle lot purchasers with the obligation to perform all of the covenants contained in a development agreement at the very least and render each lot purchaser the guarantor of the developer should require specific provisions in the Act.  The decision in Focaccia if not overturned must be very limited in its application.

Until a subdivision plan is registered, the conditions of approval will govern when and if the plan can be registered.  The same cannot be said for conditions of a development permit, since development permits do run with the lands.  See Planning Law and Practice in Alberta 4th edition S. 9.2(3).  A development permit is simply confirmation that the development proposed is authorized by the land use bylaw or was at the time of development and that decision once made is binding on the municipality subject only to the limited right of revocation. That does not mean that the development agreement is binding upon successors in title unless the agreement is assigned, usually requiring consent of the municipality, and if its terms have been satisfied, there is no need to assign it.

In many ways, Kneehill represents the perfect storm - the definitive requirement to operate a riding stable was not appealed when the ASP was adopted nor when the subdivision approval was issued; enforcement of positive covenants by the Courts was unchallenged; and the right to contest ultra vires provisions in bylaws before the SDAB and the CA in proceedings to enforce the stop order is also denied. That is not to say that those conditions will not reappear and practitioners need to be wary.  In the result, an unlawful bylaw is enforced on threat of imprisonment or contempt of court contrary to the rule of law.

Until otherwise determined, real estate practitioners must presume the law to be as determined by the CA; that positive covenants and rights in personam, incorporated into a statutory plan can bind successors in title.  Legislative change may be required and may resolve the issue more quickly than awaiting further determination by the courts. While Coffman may arise for review relatively soon, expectations for review of Kneehill and review of Focaccia may be sometime away. The basis for a review of these decisions will also present some difficulties given the criteria established for review of CA decisions set out in Agricultural Financial Services Corporation v. Redmond 1998 ABCA 189.  Until then, property owners and developers remain at risk of stop orders.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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