Expropriation Compensation: How Far Does the “Highest and Best Use” Notion Extend?

In a Thomson Reuters article[1], our litigation lawyer Charlotte Fortin comments on the Québec Court of Appeal’s recent decision in which the Court analyzed the scope of the “highest and best use” notion in assessing compensation for expropriation.

On February 11, 2010, the Court of Appeal rendered its decision in Fernand Gilbert ltée v. Procureur général du Québec, granting Fernand Gilbert ltée’s appeal and thereby overturning the Tribunal administratif du Québec’s (“TAQ”) decision.

In its decision, the Court of Appeal primarily addressed the concept of “highest and best use” (“HBU”) in the context of expropriation. According to the judge, the HBU standard does not always have to be a use that is authorized or subject to a vested right at the time of the assessment but should rather be based on a broader perspective and a lesser likelihood of occurrence.

In addition to recalling some of the applicable principles in expropriation matters, this case also shows the potential effect of the Vavilov decision regarding the coherence of administrative authorities’ decisions. Beyond its legal significance in expropriation matters, Fernand Gilbert ltée is an example of how Vavilov can have an impact by restoring the dignity of the appeal process for administrative decisions and by allowing the relevant authorities to act in the event of a jurisprudential controversy within an administrative tribunal, thereby ensuring some degree of predictability of the law and limiting the possibility of contradictory judgments.

[1] Charlotte FORTIN, «Commentaire sur la décision Fernand Gilbert ltée c. Procureure générale du Québec – L’horizon de réalisation de l’usage le meilleur et le plus profitable en matière d’expropriation », in Repères, April 2022, La référence, EYB2022REP3446.