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Readers know that from time-to-time, we like to cover the going’s on in the courts of our neighbors to the north. See here and here, for example. Although property rights are not a constitutional principle in Canada (the people did not include property as a fundamental constitutional right when the Constitution was amended last), there’s a lot for U.S. lawyers to learn from the way Canada law treats those from whom the government must expropriate property (either directly, or in what they call “de facto” or constructive takings (i.e., regulatory takings and inverse condemnation). In some ways, their system treats property owners slightly better than our constitutional system.

Well, here’s the latest in a case we’ve been following.

In St. John’s (City) v. Lynch, 2024 SCC 17 (May 10, 2024), the Supreme Court held that compensation in a de facto taking is calculated by excluding the effects of the challenged regulation. What they call up there the “Pointe Gourde principle” — the idea in expropriation valuation that the effects of “the scheme” should not influence the calculation of compensation — what we call “the scope of the project” rule, or even the “before and after” rule. 

Rather than continue to delve into areas well beyond our expertise and understanding, we’re going to refer you to a blog post by our Toronto friend and colleague Shane Rayman and his firm colleagues Conner Harris and Leah Cummings. They filed a friend-of-the-court factum on behalf of the Canadian Home Builders Association. The Court adopted much of their reasoning, by the way.

In “Supreme Court of Canada Clarifies Law of Constructive Takings,” they write:

The Court confirmed that the Pointe Gourde principle, also known as “screening out the scheme”, applies to constructive takings in the same way as it does to statutory or de jure expropriations. The Pointe Gourde principle is a common law rule invoked as part of the determination of market value when land is expropriated. The principle seeks to remove extrinsic influences associated with the taking, ignoring both increases and decreases in value caused by the expropriation scheme to avoid placing an economic burden on the expropriated owner or granting to them a windfall gain (para 37). The Court clarified the application of the Pointe Gourde principle and confirmed that land-use regulations undertaken “with a view to the expropriation” must be screened out when determining the market value of expropriated land. This is the case regardless of whether the taking is de jure or constructive.

Check both the opinion and their post out.

Many good lessons await for U.S. property lawyers.

St. John’s (City) v. Lynch, 2024 SCC 17 (Supreme Court of Canada, May 10, 2024)