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.

Background

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 and obligations.