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A man walks past a community garden along the CP Rail tracks near West 6th Avenue and Cypress Street in Vancouver on July 3, 2014.Darryl Dyck/The Globe and Mail

Canadian Pacific Railway Ltd. was within its rights to bulldoze some sheds and smash through community gardens along its unused Arbutus corridor, a judge has ruled, and the company can forge ahead with plans to store railcars on the abandoned line.

"The City did not and cannot claim any property interest in the Arbutus corridor, nor can the City assert such rights on behalf of others in response to the proposed use of the corridor" by CP, Chief Justice Christopher Hinkson of B.C. Supreme Court wrote in his judgment released Tuesday.

He dismissed the City of Vancouver's application that sought to prevent CP from resuming its clearing work along the line that hasn't been used to transport freight for more than 13 years.

CP agreed to temporarily stop the work in early November, after the city applied for an injunction to permanently halt the railway's clearing of garden plots and obstructions along the Arbutus corridor.

CP maintains that the nine-kilometre-long Arbutus corridor's potential value as a real estate development could be $400-million. The company has offered to sell the property to the city for $100-million, but civic officials have balked, countering that a more reasonable value is $20-million.

Condo dwellers who use community gardens, which weave through some of the most expensive property in Canada, say their plots are important.

The judge, however, sided with Calgary-based CP. "The gardeners, pedestrians, cyclists and motor vehicle operators who have been using the corridor have no right to such use," he said.

Chief Justice Hinkson said CP "will suffer irreparable harm if it is unable to even begin preparations for the resumption of rail use" along the urban stretch of land.

Mark Wallace, CP's vice-president of corporate affairs, said the country's second-largest railway has been steadfast in its belief that it has the right to safely restart the line as it sees fits.

"At the city's request, in good faith, we put down the lawnmower, so to speak," he said in an interview. "As we evolve our thinking on what we're going to do here, the primary purpose is storing railcars as our railyards run out of space for some of the storage. We think this is the perfect location to be able to do so."

Talks broke down between the city and CP last September as the two sides remained far apart on the valuation for the Arbutus property. "If the city gives us a call and would like to reactivate discussions, my phone is always on," Mr. Wallace said.

Vancouver Mayor Gregor Robertson said there are still avenues for the city to pursue, despite the court's dismissal of the city's application. "It's disappointing to see that ruling, but the city will continue to use all of our tools to ensure the federal government and the regulators address this issue," he said.

Civic officials have so far ruled out zoning for residential development, leaving the city to spar with CP over the plans for railcar storage. Developers are waiting for the city to shed light on whether it would be willing to entertain housing development in the longer term.

"We do have ongoing safety concerns in the corridor," Mr. Robertson said. "With the Canadian Transportation Agency, we have an opportunity to take next steps. We'll continue to press the case. Our concerns around safety have not gone away."

The mayor said questions linger, notably over whether CP has in fact abandoned the Arbutus line.

While the last freight train operated in 2001, CP said it wants to return the right-of-way to freight operating standards and use the tracks again, though this time for storing railcars. The Arbutus corridor is currently zoned for transportation.

The judge noted that CP argues that the line could be reactivated in three weeks after testing, repair and maintenance. CP has estimated that it will cost $320,000 to get the tracks in shape for railcar storage south of King Edward Avenue.

"This estimate does not include clearing third-party obstructions and crossing rehabilitation if any is required," Chief Justice Hinkson said. "The only candidate for a major crossing rehabilitation south of King Edward Avenue is 41st Avenue, at an estimated cost of approximately $80,000."