This case was heard in the Supreme Court of Nova Scotia.
Lloyd MacLellan Construction Services Limited ("MacLellan") applied to build an industrial park near the border of Halifax Regional Municipality ("HRM") boundary lines. Developing and operating the industrial park would require an easement (right of way) through property owned by the HRM, and so MacLellan had to secure the approval of the Municipal Council before the development could proceed. The Council indicated that it would not approve the proposal unless the Minister of Environment acknowledged that an environmental impact assessment would be carried out before an asphalt plant was developed in the industrial park. When the Minister of Environment indicated that an environmental impact assessment would not be required, the Council refused to grant the easement, and, ultimately, MacLellan’s plans for the project fell through. MacLellan then sued the HRM for breach of contract or, alternatively, for exercising bad faith in its business dealings.
The Court held that no contract had been created between MacLellan and the HRM, and that MacLellan was therefore not entitled to any damages for breach of contract. The Court also held that even though the Council had acted beyond its jurisdiction and authority by attempting to impose the requirement of an environmental impact assessment, the Council had not acted in bad faith while doing so. Although the Court held that the Council “chose the wrong means to try to achieve its objective,” it concluded that the Council’s attempt to protect the environment and balance public and private interests was legitimate.