The Supreme Court of Canada has given developers and property owners a major victory, making it easier for them to challenge governments over regulations that remove all reasonable uses of their lands.
Annapolis Group Inc., a developer, has amassed about 1,000 acres of land in the Halifax area since the 1950s. The municipal council of Halifax passed a regulation in 2016 affirming that no building on those lands would be permitted for some years. Annapolis accused the municipality of trying to take the lands for a park without saying so directly – and without paying the company for the lands.
Halifax said it was simply sticking to a long-term zoning plan that precluded development of certain lands for 25 years; it said it has no present plans for a park. When Annapolis sued, the city said the developer was asking taxpayers to insure it against losses caused by its own speculation. A judge refused to throw out the lawsuit, but the Nova Scotia Court of Appeal did just that, saying nothing even remotely like government stealing occurred. (The legal term is “forcible acquisition for public purposes,” a “taking,” “constructive taking” or “de facto expropriation.”)
The Supreme Court majority ruled that the Annapolis lawsuit can go to trial and set out a strong defense of property rights. To the extent that property rights are materially interfered with by governments in the future, this ruling should also give developers more rights to compensation.
NAIOP Chapters across Canada were in support of this application and are pleased with the result.
*The above should not be construed as legal advice.