Executive Summary: Key Legal and Evidentiary Issues

• Whether compensation should follow the Town’s agricultural appraisal ($97,000) or the $187,500 price in the earlier Agreement for Sale.
• How the “value to owner” test under The Municipal Expropriation Act is informed by a prior negotiated sale between the same parties for the same land.
• The weight to assign an expert appraisal prepared without knowledge of the concluded Agreement for Sale and the parties’ seven-year negotiations.
• Proper interpretation of the clause requiring the Town to “seek approval” for subdivision by the possession date, and whether this made the agreement “defunct.”
• Relevance of the land’s imminent use for drainage, storm sewer management, and a back alley in assessing highest and best use, beyond pure agricultural use.
• Treatment of contractual benefits (continued farming rights, topsoil and berm obligations) when determining compensation on expropriation.

Facts and background

The Town of Birch Hills needed a strip of land along its eastern boundary for drainage, storm sewer management and a back alley behind existing homes. The affected land lay on NE-21-46-24-W2 and SE-21-46-24-W2. NE-21 was the home quarter and farmyard of Howard Ray Getz, who, through 101053489 Saskatchewan Ltd., operated an intensive grain farm on that and other nearby quarters.

From about 2010, the Town and Mr. Getz negotiated sporadically for the land, with the Town initially offering roughly $3,500–$3,700 per acre and Mr. Getz wanting $4,500 per acre. After seven years, they executed a May 31, 2018 Agreement for Sale for the lands shown on a Plan of Proposed Subdivision, at a global price of $187,500. The possession date was September 1, 2018. The agreement provided that if possession was moved or extended by consent, the vendor would carry taxes and amortized improvements to the new date, and the Town thereafter.

Several conditions reflected the project-specific nature of the transaction. The Town was to seek subdivision approval by the possession date; remove and deliver to the vendor any topsoil from alley construction; construct a berm to allow removal of an existing ditch block; fix the alley boundary as per a 2011 plan; pay all surveying and subdivision costs; and crucially, allow the vendor to continue farming any land not being used by the Town for as long as he owned the source quarters, without charge.

The Town did not pay by September 1, 2018. On September 4, Mr. Getz’s spouse inquired at the Town office but received no clear explanation or payment. On October 9, 2018, the Town’s solicitor wrote asserting that Mr. Getz no longer wished to proceed, stating that subdivision approval had taken longer than expected, asking for an extension, and warning that, failing agreement within 10 days, the Town would expropriate and only pay statutory “current fair market value,” with no contractual benefits. On October 10, Mrs. Getz emailed the Town’s CAO, saying they considered the contract expired when possession passed without payment, but adding they might renegotiate after harvest. The Town made no further effort to negotiate.

Instead, on November 1, 2018, the Town passed an expropriation bylaw and deposited a plan under sections 3 and 4 of The Municipal Expropriation Act, taking 44.68 acres from Mr. Getz and 1.21 acres from the corporation. A formal Notice to Expropriate followed on December 18, 2018. Subdivision approval was granted June 24, 2019, and title to the expropriated land transferred to the Town on August 16, 2019. The Town did not pay the respondents anything, nor pay funds into court, but it farmed the expropriated land and used the proceeds for municipal facilities. Contrary to the Agreement for Sale, it did not allow Mr. Getz to continue farming portions not yet used for works.

Issues and governing principles

The sole substantive issue was the amount of compensation for the expropriated land. The Town relied on an appraiser’s valuation of $97,000 based on agricultural use and comparable farmland sales in the region. The respondents argued they should receive at least $187,500, the contract price they had previously negotiated with the Town.

Under The Municipal Expropriation Act, where the parties cannot agree, a judge must determine compensation, considering the value of the land and improvements at the date of deposit of the expropriation plan, any damage to remaining land, and any enhancement in value to the residue that must be deducted. Saskatchewan follows the “value to owner” test from Diggon-Hibben and Luzny v Craik (Town), under which compensation is assessed from the owner’s perspective, incorporating market value, highest and best use, and any demonstrated special or enhanced value. Prior cases also confirm that negotiations and offers between the same parties about the same land can be weighed as part of the valuation exercise.

Evidence on valuation

The Town’s expert, appraiser Kimberley Maber, used the “before and after” and “across the fence” direct comparison methods, looking primarily at agricultural sales from 2017–2018 in the Rural Municipality of Birch Hills and, because of limited data, at sales in nearby rural municipalities and towns. She acknowledged the expropriated parcels were adjacent to the Town and identified in the Official Community Plan as potential future residential or highway commercial lands, but considered their highest and best use to be agricultural due to the lack of immediate development plans. On that basis, she concluded per-acre values of $2,100 (NE-21 portion) and $2,500 (SE-21 portion), totalling $97,000.

However, she had not been told about the Agreement for Sale, the seven-year negotiation history, or the Town’s specific infrastructure plans for the strip. She did not speak with Mr. Getz about any special attributes and assigned no separate value to his altered cross-highway access or to the former right he would have had to continue farming unused land under the agreement. She testified that knowledge of the Agreement for Sale would have led her to question how the parties arrived at that figure, although she noted her comparable-sales data did not support a $187,500 agricultural value.

The respondents tendered no competing appraisal but relied on the Agreement for Sale and negotiation history as strong evidence of value to the owner. Mr. Getz described NE-21 as his home quarter and operational base, and the SE-21 parcel as awkward “wasted” land from a farming perspective. They did not, however, quantify special value, alleged business disturbance, or the financial impact of changed access beyond general assertions. Nor did either party provide specific evidence of how much of the $187,500 might reflect ancillary benefits such as topsoil or the berm.

Court’s analysis

The judge held that the Agreement for Sale could not be dismissed as irrelevant or “defunct” for compensation purposes. First, properly construed, the condition about subdivision approval required only that the Town “seek approval” by the possession date; it was not a true condition precedent dependent on the actual grant of approval by that date. The Town offered no convincing explanation for missing the September 1 deadline or remaining silent after the September 4 inquiry. Its October 9 letter sought a retroactive extension under the shadow of a threat to expropriate at a lower figure.

Second, section 3 of the Act allows expropriation only when the municipality “cannot acquire the land by agreement.” Here the Town had in fact concluded such an agreement, with a defined price and detailed conditions aligning with its project needs. To then abandon that agreement and treat the land as ordinary farmland for valuation purposes was inconsistent with both the statute’s structure and the “value to owner” approach.

Third, consistent with prior authorities, the court regarded evidence of prior negotiations and offers as relevant indicators of what prudent, informed parties thought the property was worth. That logic was stronger here because negotiations had spanned seven years and culminated in a firm contract. The judge noted that the Appraisal Institute’s own definition of “market value,” quoted in Ms. Maber’s report, assumes a price reached between well-informed, self-interested parties under normal conditions—precisely the circumstances present in the Agreement for Sale.

In light of this, the court accorded reduced weight to the Town’s appraisal. It was grounded in agricultural comparables and prepared in ignorance of the agreement and of the Town’s very specific infrastructure purpose. The municipality was not seeking farmland generally; it needed this narrow strip next to town for its sewer and alley project, and that context had already been reflected in the negotiated price and conditions.

The court also considered whether there was evidence of special value or damage to the remaining land beyond what the global figure reflected and found little. Aside from NE-21 being a home quarter and the change in practical access between quarters, the respondents did not demonstrate measurable economic loss to their remaining holdings or any premium value unique to the expropriated portions. Nor was there evidence that the remaining land increased in value as a result of the works, so no offset was warranted under section 9.

As for the non-cash contractual benefits in the Agreement for Sale—the right to keep farming unused land, delivery of topsoil and construction of a berm—no party attempted to put a dollar figure on these, and the expert was not asked to do so. The judge therefore treated the $187,500 price as a global reflection of the parties’ negotiations and of value to the owner in the context of the Town’s planned works, rather than trying to break it into separate components.

Outcome

The court concluded that, on a proper “value to owner” assessment under The Municipal Expropriation Act, the best evidence of the land’s worth was the price in the Agreement for Sale, not the lower agricultural appraisal. It fixed compensation for the expropriated land at $187,500, to be prorated between Mr. Getz and 101053489 Saskatchewan Ltd. according to the acres taken from each. The Town of Birch Hills, which sought to pay only $97,000 based on its appraisal, was therefore unsuccessful. The respondents were the successful parties and obtained an order for payment of $187,500 in total as compensation. The judgment expressly left interest and costs, including any impact of a statutory tender, to be determined at a later hearing, so the ultimate total monetary recovery beyond the $187,500 principal amount had not yet been fixed.