## Facts

- Mariner Real Estate Ltd. and related owners held beachfront lots at Kingsburg (often referred to as Kingston/Kingsburg Beach) in Nova Scotia and intended to build single-family homes.
- Nova Scotia designated the area as a protected beach under the **Beaches Act**, placing development and certain uses under a permit and approval regime administered by the **Minister of Natural Resources**.
- The owners applied for approval to build houses using standard construction methods and foundations.
- The Minister refused approval, citing risks to adjacent dunes and beach systems, including erosion and flooding concerns.
- The owners claimed the designation and refusal effectively rendered the lots valueless for their intended residential development and amounted to a constructive (de facto) expropriation requiring compensation under the **Expropriation Act**.
- At trial, the judge accepted that the regulatory effect and permit refusal had destroyed the economic value of the land for development and concluded that a de facto expropriation had occurred (granting relief for some, but not all, owners).
- Nova Scotia appealed the trial judgment to the Nova Scotia Court of Appeal.

## Issues

1. Whether the Beaches Act designation and the Minister’s refusal to approve residential construction amounted to an expropriation within the meaning of Nova Scotia’s Expropriation Act.
2. Whether a de facto expropriation requires both (a) a deprivation of the owners’ land interests amounting to loss of the incidents of ownership and (b) an acquisition by the Province of an interest in the land.
3. Whether severe diminution in economic value, without a proprietary acquisition by the Province, is sufficient to trigger compensation.

## Decision

- The Court of Appeal **allowed** the Province’s appeal.
- The trial declaration of expropriation was **set aside**, and the owners’ action was **dismissed**.
- The court held the Beaches Act restrictions and permit refusal did **not** amount to a de facto expropriation.
- Loss of economic value resulting from land-use regulation, standing alone, was not a “taking” of land within the Expropriation Act.
- The owners did not prove that **virtually all** incidents of ownership were removed.
- The owners also failed to show that the Province **acquired** an interest in their land as a result of the designation or permit refusal; conservation objectives and public benefits did not constitute acquisition of the regulated land.

## Legal Principles

- A constructive (de facto) expropriation generally requires **two elements**:  
  - the owner is deprived of an interest in land in a manner equivalent to losing virtually all meaningful incidents of ownership or reasonable uses; and  
  - the Crown acquires an interest in the land or a proprietary benefit tied to the land, not merely a public advantage.
- A **substantial drop in market value** caused by land-use controls does not, by itself, establish an expropriation; regulation that limits development is not automatically a compensable taking.
- The Crown’s receipt of a **public benefit** from environmental protection, or an increase in the utility or value of nearby public lands, is not the same as acquiring an interest in the regulated private land.
- In applying expropriation statutes, courts distinguish between (a) regulation that restricts use in the public interest and (b) measures that effectively transfer a proprietary interest to the state.
- The Expropriation Act is concerned with the taking of land interests; absent a taking and acquisition, compensation is not triggered merely because regulation is stringent.

## Conclusion

The Nova Scotia Court of Appeal held that Nova Scotia’s protected-beach regime and the Minister’s refusal to approve residential construction were land-use regulation, not a de facto expropriation, because the owners retained important incidents of ownership and the Province did not acquire a proprietary interest in the owners’ land, so no compensation was payable.


Mariner Real Estate Ltd. v. Nova Scotia (Attorney General), [1999] 178 N.S.R. 2d 294, 549 A.P.R. 294 (1999)