Expropriation Law: 2021 A Year In Review

1. Halifax Regional Municipality v. Annapolis Group Inc., 2021 NSCA 3, 2021 CarswellNS 4 (NSCA)

2. Annapolis Group Inc. v. Halifax Regional Municipality, 2021 CarswellNS 455 (SCC)

The Plaintiff, Annapolis Group Inc. (Annapolis) claimed that Halifax Regional Municipality (Region) had de facto expropriated its lands by refusing to proceed with a secondary planning process, a mechanism that is required to advance the lands toward serviced development. Annapolis argued the Region was exercising dominion over its lands by encouraging members of the public to utilize the lands as a park, and had an ulterior motive to refuse the secondary planning process. The Region's motion for summary judgment of Annapolis's claim was dismissed, and the Region appealed that decision.

The Court of Appeal found that Halifax's refusal did not amount to a de facto expropriation. The Court reiterated the two elements that constitute a de facto expropriation – the taking of lands and a corresponding deprivation of all reasonable uses, and further summarized what qualifies as a de facto expropriation and what does not, as follows:^[1]

1. The acquisition must be one that confers a beneficial interest on the authority alleged to have expropriated the land. Land must actually be taken from an owner and acquired by the authority;
2. All reasonable uses to which the property could be put must be removed. The burden of proving all reasonable uses have been removed is on the land owner;
3. The freezing of development and restrictive land use regulation, in and of itself, does not amount to de facto expropriation;
4. The decrease in the value of land does not amount to de facto expropriation; and
5. The passing of a development plan does not constitute a taking, it simply allows a municipality to set a vision and course for future development and ensures the land will be used or developed in accordance with its vision.

The Court of Appeal also concluded that the motive of an expropriating authority is not a factor in the analysis of a de facto expropriation. Improper motive does not create an alternative way of proving the claim and cannot compensate for the failure to establish the required elements of a de facto expropriation. Where an authority has acted in an inappropriate manner, the Court noted that parties could more appropriately proceed with a cause of action for abuse of, or misfeasance in, public office.

Annapolis was unable to demonstrate that there was a deprivation of all reasonable uses of the lands, and its allegations of improper motive were not material to the claim.

On June 24, 2021, leave to appeal was granted to the Supreme Court of Canada, and the appeal will be heard in February 2022.