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ARTICLE · 20 SEPTEMBER 2018

Disguised Expropriation: Protecting Oil And Gas Interests

Borden Ladner Gervais LLP
Borden Ladner Gervais LLP
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Borden Ladner Gervais LLP

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The concept of expropriation concerns the power of a public authority to deprive a property owner of the enjoyment of the attributes of his or her right of ownership.

CanadaEnergy and Natural Resources

The concept of expropriation concerns the power of a public authority to deprive a property owner of the enjoyment of the attributes of his or her right of ownership.1 As the Supreme Court of Canada recently stated in the case of Lorraine (Ville) v 2646‑8926 Québec Inc., 2018 SCC 35, disguised (also known as de facto) expropriation involves an abuse of power which "occurs where a public body exercises its power of regulation unlawfully, that is, in a manner inconsistent with the purposes the legislature was pursuing in delegating the power ... it is the reasons for the act which must be assessed. The courts will accordingly determine whether the act is fraudulent, discriminatory, unjust or affected by bad faith, in which case it will be treated as an abuse of power".2  This occurs "[w]hen property is expropriated outside [the] legislative framework for an ulterior motive, such as to avoid paying an indemnity".3  In Lorraine, the Supreme Court considered the legitimacy

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