The Supreme Court of Canada says the zoning of a St. John’s, N.L., property as a watershed area should guide the process of compensating the owners for expropriation of the land.
In a 7-0 ruling on May 10, the top court says compensation should be assessed based on the limited uses allowed by the zoning, not as if a housing development could have proceeded.
A formal application by the owners to develop the property was rejected in 2013, and a court declared the land had been constructively expropriated, opening the door to compensation.
The Supreme Court says an authority cannot freeze a property’s development in anticipation of the need to acquire the land, effectively reducing the property’s value in order to reduce the compensation payable.
The court says that when determining a regulation’s effect on property value, the key question is whether the enactment was made with a view to the expropriation or, conversely, was an independent decision.
In its ruling, the Supreme Court says the watershed zoning was an independent enactment, and the market value assessment of the property must take into account it is limited to discretionary agriculture, forestry and public utility uses.
