Supreme Court dismisses developer's lawsuit against City of St. John's over heritage designation
Judge says heritage status awarded to Bryn Mawr did not amount to city expropriation
The City of St. John's has won a long-standing court battle over the heritage designation it awarded to a home built more than a century ago.
The Newfoundland and Labrador Supreme Court on Friday ruled in favour of the city against the current and former owners of the home at 154 New Cove Rd. — known as both Baird Cottage and Bryn Mawr — who argued that the designation deprived them of "all reasonable uses of the property."
"Although the heritage designation restricts certain development of 154 New Cove Road insofar as it prevents Bryn Mawr from being demolished or the exterior altered without the approval of City council, it does not prohibit the use of 154 New Cove Road as a residential property or other development," wrote Justice Sandra Chaytor in her decision.
Former owner Mildred Steinhauer agreed in 2014 to sell the property to developer KMK Properties, which planned to build high-end family homes with a central park area, contingent on the existing house being demolished. Because the house had a provincial heritage designation, Steinhauer's demolition application was referred to the city's built heritage experts panel, which recommended city heritage status instead.
In May 2016, city council awarded Bryn Mawr heritage status, which also prevented the house's demolition. Steinhauer then sold the house the following month to KMK-affiliated company New Cove Road Holdings, which split the property into two parcels — one with vacant land the company has begun to develop, and the other with the house itself, which is now vacant.
The legal fight over the property began almost immediately, with lawyers for Steinhauer and KMK arguing that the city's heritage designation amounted to "constructive expropriation."
Chaytor disagreed, writing that the plaintiffs' argument needed to satisfy two points: first, that the city benefited from the heritage designation, and second, that the designation removed all possible reasonable uses of the property.
Legal argument fell short on two tests: judge
The judge said the plaintiffs' lawsuit fell short on both counts.
While the plaintiffs argued the city benefited in terms of "tourism and cultural enhancement," Chaytor said the designation is similar to the limitations placed on any property by city planning regulations.
As for the second point, Chaytor said the property retains several permitted and discretionary uses, including as a bed and breakfast, a boarding or lodging house, a duplex dwelling, home office, semi- or single-detached dwelling, subsidiary apartment, townhouses, recreational park or family home child-care services.
"Reasonable use of property in the context of meeting the test for constructive expropriation cannot be determined by the amount a purchaser paid for the property or the amount of return that the purchaser hoped to achieve from the transaction," wrote Chaytor, who dismissed the lawsuit and ordered the plaintiffs to pay court costs to the City of St. John's.