Executive Summary: Key Legal and Evidentiary Issues

• Justice M.R. Gaston of the Court of King's Bench of Alberta quashed three municipal decisions relating to the sale and rezoning of reserve land in Blairmore.
   
• A resolution accepting Mr. Fulkerth's offer to purchase the property was adopted without any prior public hearing or notice, contrary to section 674(1) of the Municipal Government Act.
   
• Bylaw 1168, which removed the municipal reserve designation, followed a public hearing held after the property had already been sold, rendering the process predetermined.
   
• Members of the public at the Bylaw 1197 hearing were directed to limit submissions to rezoning while Mr. Fulkerth and municipal administration were permitted to address the underlying development.
   
• Correctness was applied as the standard of review for procedural fairness, guided by the factors set out in Baker v Canada.
   
• Each impugned decision was quashed and remitted to the municipality for reconsideration, with no monetary award addressed in the reasons.
   

Facts of the case

Patrol Base Inc., whose land overlooks a parcel of municipal reserve land in Blairmore, Alberta (Plan 0812254, Block 1, Lot 51MR), sought judicial review of three decisions of the Municipality of Crowsnest Pass. The property, undeveloped land supporting trees and grasses, was assessed at $20,000 in 2022. On September 25, 2023, a third party, Mr. Fulkerth, applied to purchase the property for $20,000. On October 17, 2023, Council accepted his offer through Resolution 17-2023-10-17, making the sale conditional only on Fulkerth covering costs associated with removing the municipal reserve designation, redistricting, subdivision, legal fees, and meeting certain completion and construction timelines. No public notice or hearing preceded adoption of the Resolution. On October 26, 2023, Fulkerth applied for a land use amendment to develop micro homes. Bylaw 1168, which removed the municipal reserve designation from the property, received first reading on November 21, 2023; notice was posted on the property, mailed to adjacent homeowners, and advertised in the local newspaper, and a public hearing was held on December 12, 2023, after which the bylaw passed. The Applicant sought judicial review of the Resolution and Bylaw 1168 on February 1, 2024. Bylaw 1197, rezoning the property from "Recreation and Open Space RO-1" to "Urban Tourism Accommodation and Recreation" to permit construction of an "urban resort," received first reading on July 9. Notice was posted on the Municipality's website, mailed to nearby landowners, and published in the local newspaper on July 31 and August 7, 2024. A hearing was held on August 27, 2024, after which Bylaw 1197 passed. The Applicant sought judicial review of Bylaw 1197 on October 25, 2024.

Policy and legislative provisions at issue

Section 674(1) of the Municipal Government Act requires that a public hearing be held and advertised before the sale, lease, or other disposal of municipal reserve land. Section 216(4) of the Act requires council to hear any person claiming to be affected by a proposed bylaw. Section 230(3) affords municipalities wide discretion over the procedure followed at public hearings. The Municipality's own Procedural Bylaw No. 1041, 2020 further governed the conduct of the Bylaw 1197 hearing: section 24.1(b) required administration to open with an introduction and overview, section 24.1(c) allowed members of the public to then speak, section 24.1(d) permitted councillors to question speakers and, once all speakers had finished, to question administration, and section 21.2(b) limited public submissions to matters within council's jurisdiction.

Reasoning and analysis

The court applied a correctness standard to determine whether the Municipality had complied with its duty of procedural fairness, assessed through the factors set out in Baker v Canada (Minister of Citizenship and Immigration). On the Resolution, the court rejected the Municipality's characterization of the transaction as a "conditional sale" falling outside section 674, finding that the only conditions attached related to the purchaser's payment of costs and timelines, not to any hearing outcome; the Resolution therefore constituted a sale of municipal reserve land requiring a public hearing that never occurred. On Bylaw 1168, the court found that because the property had already been sold before the hearing was held, the hearing could not offer any meaningful opportunity for public input and instead confirmed a predetermined outcome, rendering it a sham. On Bylaw 1197, the court did not need to resolve every procedural complaint given the invalidity of the underlying Resolution and Bylaw 1168, but separately found that reopening the hearing minutes after closing it to let Fulkerth speak was within the Municipality's discretion, while permitting administration to make new closing submissions, though contrary to the Procedural Bylaw and public expectations, did not alone amount to a breach. However, directing members of the public to confine their remarks to rezoning while later permitting Fulkerth and administration to speak at length about the underlying development did breach section 216(4) and demonstrated a real possibility of prejudice, particularly when considered alongside the earlier Resolution and Bylaw 1168 process.

Ruling and overall outcome

The court found in favour of the Applicant, Patrol Base Inc., quashing all three impugned decisions. The Resolution was quashed for breach of section 674(1) of the Municipal Government Act and lack of procedural fairness. Bylaw 1168 was quashed because the public hearing preceding it could not meaningfully consider public input, given the property had already been sold. Bylaw 1197 was quashed for breach of procedural fairness arising from the restriction placed on public submissions at the hearing. All three matters were remitted to the Municipality of Crowsnest Pass for rehearing. The decision does not address costs or any monetary award; no amount ordered, granted, or awarded can be determined from the reasons.