In a recent decision (Devon Business Park Ltd. v. Alberta
Transportation), the Alberta Land Compensation Board held
that, when an expropriating authority acquires a portion of a large
parcel, if the land acquired is of a better quality than the rest
of the parcel, a premium must be paid to reflect the higher quality
of the portion taken. The principle should also be applicable to
the valuation of portions of unsubdivided land, generally, not just
in the case of expropriations.
A landowner challenged the compensation offered by Alberta
Transportation which had expropriated portions of three undeveloped
quarter sections for a proposed highway realignment. The portions
taken had existing highway frontage with superior visibility, use,
access and proximity to municipal services, compared to the balance
of the parent parcels. Alberta Transportation had valued the three
portions of land acquired as though each of the parent parcels were
internally homogenous—the same type and quality
throughout—and without making any allowance for the superior
quality of the portions taken.
The principle established in Alberta(Transport,
Minister) v. Bonaventure Sales Ltd. (Bonaventure) holds that,
when an unsubdivided portion of a large parcel is expropriated, the
fair market value of the portion acquired is determined by applying
the per hectare value of the entire site to the area of the smaller
portion taken. The Alberta Court of Appeal has limited the
Bonaventure principle to internally homogenous parcels and,
accordingly, the principle has not been applied where the portions
of the parent parcel acquired were zoned differently from, or were
for different uses than, the rest of the parent parcel.
Dentons Canada lawyer,
Kim Wakefield, Q.C., represented the landowner before the
Alberta Land Compensation Board. In its decision reported as
Devon Business Park Ltd. v. Alberta (Transportation), 2014
A.B.L.C.B. 12 (Devon Business Park), the Land Compensation Board
accepted the arguments advanced on behalf of the landowner and
expanded the exceptions to the Bonaventure principle to include not
only differences in zoning and use, but also situations where the
quality of the land taken was better than the quality of the
remainder of the parent parcel. The landowner was awarded
significantly greater compensation to that offered by Alberta
Transportation, together with interest and costs.
Impact on landowners
The decision in the Devon Business Park case represents an
advance in the principles governing the determination of fair
compensation to expropriated landowners. It points out the need for
landowners dealing with expropriating authorities to be aware of
their right to compensation and the basis on which compensation may
be awarded. Landowners who are approached by expropriating
authorities seeking to acquire property would be well advised to
consult legal counsel with experience in expropriation law to
advise them with respect to compensation and other aspects of
expropriation procedure. Although it is not widely known, in
Alberta and a number of other jurisdictions, the landowner's
reasonable costs of retaining legal counsel, appraisers and other
consultants are reimbursable by the expropriating authority.
Dentons lawyers have a breadth of expertise acting in expropriation
matters and are able to provide seasoned practical advice to both
landowners and expropriating authorities on their respective rights
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