Casual Legal: Clarifying law on de facto expropriation

By Jessica Fleming
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

In a recent decision, the Supreme Court of Canada lowered the threshold for establishing that private land has been subject to a de facto expropriation. De facto expropriation means that although a public body may not have passed a particular law taking away private property, it has nevertheless put in place such extensive land use regulation that a private property owner can no longer use and enjoy his or her property as the owner would like.

The Supreme Court of Canada confirmed that a landowner must establish the following in order to claim de facto expropriation:

• That the public authority acquired a beneficial interest in the property
• That the regulation has removed all reasonable uses of the property.

With respect to the first element, the Supreme Court of Canada explained that the term "beneficial interest" means any advantage, in the broadest possible sense. In particular, in determining whether a public authority acquired an advantage, the Supreme Court indicated the focus of the analysis must be on the effect of the government's regulation on the landowner. That is, whether the landowner is no longer able to use and enjoy his or her property.

It is also worth noting that the Supreme Court of Canada indicated that the motivation of the public authority is a relevant factor to be considered when looking at the effect of regulation on the landowner.

In setting out that a "beneficial interest" simply means an advantage – a criterion that can easily be satisfied – the Supreme Court of Canada effectively lowered the threshold for establishing constructive expropriation. Prior to this decision, the benefit to the public authority needed to be a property right. This made it relatively difficult for property owners to prove de facto expropriation had occurred.

Therefore, in future, it will be easier for landowners to successfully argue their land has been constructively taken, thereby establishing a right to compensation as a result. On the flip side, public authorities will need to be mindful about how they regulate private lands.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or send an riskcontrol [at] abmunis.ca (email) to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.