This article summarizes the most significant expropriation cases of 2020 from across the country, as selected by Gowling WLG's National Expropriation Law Group. The decisions are not listed in rank order.
Know your forum
Section 29 of Alberta's Expropriation Act establishes an expropriated landowner's right to a determination of compensation. Subsection 29(1) provides that this compensation shall be determined by the Alberta Land Compensation Board, but subsection 29(3) provides that "when the expropriation is by the Crown, the owner may elect to have the compensation fixed by the [Alberta Court of Queen's Bench] and in that case the provisions of this Act relating to determination of compensation by the Board apply with all necessary modifications to the proceedings before the court." A series of cases released in 2020 demonstrates the importance of understanding the differences between these two decision making bodies.
The City of Edmonton applied to have three Applications for Determination of Compensation before the Alberta Land Compensation Board dismissed for delay. In Edmonton (City) v 1524416 Alberta Ltd, Edmonton (City) v. Capital Region MRI Ltd. and Edmonton (City) v. Autobuy Leasing Corp, the Board refused, finding that it did not have the authority to dismiss the applications due to delay. In reaching this decision, the Board considered the purpose of Alberta's Expropriation Act, which is to ensure that expropriated landowners are properly compensated and made whole. The provisions of the Act do not allow for dismissal due to delay. The Board determined that to dismiss the claims would be contrary to the purpose and scheme of the Act. Thus, the board had no jurisdiction to dismiss the claims due to delay, which would effectively eliminate the landowner's rights.
In Thoreson v. Alberta (Infrastructure) the Alberta Court of Appeal upheld the decision of an Alberta Court of Queen's Bench case management judge to strike an expropriated landowner's business loss claim for delay. The expropriation occurred in 2004, and the landowners brought an action against the Province of Alberta before the Alberta Court of Queen's Bench in 2005. The business loss portion of the claim was severed from the land compensation claim in 2009. After significant delay in advancing the claim and after missing numerous procedural order deadlines, the Province applied to strike the claim pursuant to Rule 4.31 of the Alberta Rules of Court. The case management judge noted that in the 14 years since the claim was initiated, there was nothing to prevent the landowners from advancing their business loss claim.
On appeal, the landowners argued that it would be contrary to the purpose of Alberta's Expropriation Act to permit the Province to avoid its duty to compensate by using the Rules of Court to have compensation claims dismissed. The Alberta Court of Appeal determined, however, that s. 29(3) of the Act required the Court to determine compensation, but not procedure, in accordance with the Expropriations Act, and that litigants would reasonably expect Court procedures to differ from those of an administrative tribunal. This case provides clear direction that the Alberta Rules of Court apply to expropriation claims brought in the Alberta Court of Queen's Bench, except to the degree that those rules conflict with the Expropriation Act. Expropriated landowners should be careful to consider the procedural differences between the Court and the Land Compensation Board between before choosing which forum will determine their claim.
Hedging your Bets: IA No taking cases in Superior Court and LPAT
An appellant landowner's residence suffered structural damage caused by vibrations from heavy truck traffic on an adjacent municipal road, including cracks in the walls, tiles, ceiling finishes and windows. The Appellant initially brought a claim for injurious affection (no taking) under the Expropriations Act. However, the OMB determined that it did not have jurisdiction to deal with the matter because the claim related to the use of the road, rather than its construction. The Appellant subsequently commenced an action in nuisance and negligence in Superior Court, which was summarily dismissed as being statute-barred.
On appeal, the Ontario Court of Appeal found that it was not "legally appropriate" for the Appellant to wait until after the OMB's decision to commence civil proceedings. Whether an alternative process will suspend a limitation period, pursuant to s.5(1)(a)(iv) of the Limitations Act, depends on the particular factual circumstances. The court noted that it has always been a principle of limitations law that a plaintiff knows, or could determine by the exercise of reasonable diligence, what legal principles apply. Further, the Appellant was on notice that there may be a forum issue when the Municipality challenged the jurisdiction of the OMB to determine the claim. The court found there was no evidence to explain why the Appellant chose to pursue the OMB route rather than commencing both an OMB proceeding and a civil action.
The Ontario Court of Appeal allowed the appeal in part, as a triable issue remained in respect of ongoing damages that took place within the two-year limitation period. However, the Appellant was not able to proceed with its full claim for damages. When assessing claims for injurious affection where no land is taken, it is a best practice to issue both a civil action in Superior Court, as well as a notice of arbitration with the Local Planning Appeal Tribunal.
Vavilov in Action: The new standard of review
The Divisional Court outlined the application of the standard of review on expropriation appeals in light of Canada (Minister of Citizenship and Immigration) v. Vavilov. As the Expropriations Act provides for a right of appeal to the Divisional Court, the applicable standard is the appellate standard set out in Housen v. Nikolaisen. The court further noted that the standard of review would be as follows:
- Questions of law – standard of correctness;
- Findings of mixed fact and law where the legal principle is readily extricable – standard of correctness;
- Findings of mixed fact and law where the legal principle is not readily extricable – palpable and overriding; and
- Findings of fact – palpable and overriding.
Substantively, the Divisional Court also considered the application of section 14(4)(b) of the Expropriations Act regarding whether "but for" the expropriation or the imminent prospect of expropriation, the property would have been "shovel ready" for development. The Claimant sought to rely on a higher valuation which relied on the property being shovel ready for development. The Claimant argued that the only reason the property was not "shovel ready" was due to the prospect of the expropriation, which led that Claimant to delay its applications. The court determined that any delay in submitting an application for site plan approval was within the control of the Claimant and was a conscious business decision. Therefore, the property was not "shovel ready"
Tribunal ancillary powers
In this case, Ontario's Local Planning Appeal Tribunal revisited its powers to make determinations of ancillary issues pursuant to its jurisdiction under Ontario's Expropriations Act. The Tribunal was required to determine the allocation of compensation following a settlement. The municipality made a joint offer of compensation to all interests registered on title to the lands (including a complex set of security holders). Determining the allocation of compensation among these security holders required the Tribunal to consider the interests of a mortgagee under the Land Titles Act. In its decision, the Tribunal observed its obligation under s. 29(1) of the Expropriations Act to "determine any compensation in respect of which a notice of arbitration has been served upon it," including the market value of each interest in the land.
The Tribunal does not have independent stand-alone jurisdiction to make exclusive and separate findings relating to interests in land; pure determinations relating to ownership, security interests, and other interests in land are the purview of the Ontario Superior Court. However, the Tribunal found that it not only had the ancillary power, but also the obligation, to make these determinations as part of carrying out its mandate under the Expropriations Act. Given this finding, the Tribunal went on to determine the priority of the security holders.
Previously expropriated easement valid for new project
Hydro Quebec was authorized to construct an electrical transmission line over several properties based on easements from 1972, and sought to rely on these easements to construct a new additional line. The owners of the lots in questions argued that the existing easements limited Hydro Quebec to that one line only (from 1972), not any further lines.
The Court of Appeal of Quebec found that Hydro Quebec could not rely on the easements in favour of the original transmission line to construct a new transmission line over the same properties. This was despite mention in various agreements that up to three lines could be accommodated through the easements. The Court of Appeal relied on certain documents which referred to the expropriation of the 1972 easements being done specifically for the purpose of the construction of the 1972 transmission line.
The Supreme Court of Canada overturned the Court of Appeal's decision finding that it made an error of law in substituting its opinion for that of the trial judge on a question of fact, regarding whether the documentation about the easements was restricted to the 1972 transmission line or could accommodate three transmission lines. The Supreme Court upheld the trial judge's finding that the actual agreements did not mention any restrictions on origin or destination of electricity, therefore the easements on the owners' lots authorized Hydro Quebec to construct the new projected transmission line.
Limitation of Actions Act not applicable to expropriation time periods
The Claimant met his obligation to file a written claim within the one-year period, as prescribed by section 47(1) of the Expropriation Act. However, the Claimant's claim was left dormant and around 26 years past the expropriation, the Minister of Transportation brought a motion seeking to determine whether the claim was statute-barred under the Limitation of Actions Act. Although the Claimant had filed his initial claim for compensation within the time prescribed by section 47(1) of the Expropriation Act, it was only in 2013, more than 20 years past the expropriation, that he filed his formal notice of arbitration. The Claimant argued that the Limitations of Actions Act does not apply to his claim to which the applicable limitation periods are prescribed instead by the Expropriations Act, and provides only that a claimant must file written particulars of the claim within one year after the damage was sustained or became known to him.
The New Brunswick Court of Queen's Bench found that the Expropriation Act is meant and intended to encompass all the time limits that are relevant to a claim for compensation. Further, section 2.2 of the Expropriation Act provides that where there is a conflict between a provision of this Act and a provision of any other general or special Act that does not expressly state that it supersedes this Act, the provision of this Act applies, and the Limitation of Actions Act does not contain any statement that it would supersede the Expropriation Act.
The court concluded that the Limitation of Actions Act did not apply to the claim, and the claim was not statute-barred.
*Leave to appeal was granted to the New Brunswick Court of Appeal on August 4, 2020.
Businesses band together to take on transit
In 2020, the Nova Scotia Utility and Review Board heard five injurious affection claims related to highway by-pass construction in Antigonish. The construction left the roadway unchanged in the vicinity of the claimants' properties, but the access points to that roadway and the properties' visibility from the highway changed considerably. While there was no formal consolidation of the proceedings, the claims were all heard within the same week, and the parties agreed that:
- The evidence put forward by witnesses for all claimants and the Province could be used in all of the proceedings;
- The Board could make one determination on liability that would apply to all of the proceedings; and that
- The parties would file one joint document book.
This case provides an interesting example of how a group of property owners who have all been impacted by a large transportation project can advance their claims in an efficient and cost-effective manner, particularly in jurisdictions where such claims cannot be brought as a class action. (Gowling WLG discusses a case where compensation claims for injurious affection were brought by way of class action in its article on Gautam v. South Coast British Columbia Transportation Authority.)
The Claimants also advanced a novel, but ultimately unsuccessful, argument regarding the impact of the highway construction on their businesses. In addition to arguments about how the construction affected vehicular access to their properties, the Claimants also argued that their properties became less visible from the highway and that visibility is an element of access. After undertaking a review of the law of injurious affection and nuisance, the Board observed that at its foundation, the law of expropriation deals with property rights. The Board determined that there was no authority that visibility from a highway is a property right or interest, and the Board found no reason to extend the scope of property rights in this case. As such, this loss of visibility did not amount to an actionable nuisance, and no compensation was awarded for injurious affection.
Appeal of Interim Award permitted
In 2016, it was determined that land owned by the Lynches within the St. John's Watershed Area had been constructively expropriated as of February 2013 as a result of the degree of restrictions on use imposed on them. From 2013, when the property was deemed to be constructively expropriated, to 2018 the City had the benefit of control and use of the Lynches' land for watershed purposes without having to pay anything for it. The Lynches applied to the Board for interim payment of compensation together with interest and certain interim costs and expenses, claiming that the City had the resources to drag out the compensation process as long as it wanted and thereby deny them access to their compensation entitlement. The Board made an interim award (but without any interest or costs and expenses), and rejected the City's argument that the absence of any express provision providing for the making of an interim award meant that the Board had no jurisdiction to make an award on an interim basis, emphasizing that the Expropriation Act should be read in a broad and purposive manner so as to ensure that the landowner whose property is taken receives full compensation.
The Lynches appealed to the Court of Appeal on the basis that the Board's decision not to award interest and any compensation claim expenses, expropriation litigation expenses or application expenses in the interim was unreasonable. The City submitted that no appeal lies to the Court of Appeal from an interim order of the Board, and in the alternative, that the Court ought to decline to entertain the appeal because the decision in question was merely procedural in nature, determining only the timing and order of decision-making.
The Court of Appeal found that section 32(5) of the Expropriation Act contemplates an appeal following an "award", a term undefined in the Act, and the scope of appeal must relate to the "findings" of the Board upon a question of law or fact in connection with the expropriation, or upon the question of the amount of compensation. The Court concluded that although the ultimate purpose of the expropriation hearing is to reach a final award of compensation for the land taken, an appeal is not limited to a legal or factual challenge to the quantum of the final award. Findings on questions of law or fact in connection with the expropriation can also be subjected to appellate review, which in principle would include decisions made during the process leading up to the final monetary award. The Court was satisfied, given the broad language employed in the appeal provision, the absence of any express provision excluding appeals from interim awards or even imposing a leave requirement, and the underlying principle of the legislation that section 32(5) encompasses the potential for an appeal from an interim decision.
The Court of Appeal further decided to exercise its discretion to hear the appeal on the basis that the City did not indicate any prejudice would accrue if the appeal were heard, and the Lynches established that delay in dealing with the issue is actually a benefit to the City.
The Shergar Development cases have been of much recent interest to lawyers and experts working in the expropriation field. This includes the Ontario Court of Appeal's decision from 2020. Given that we are counsel for the Appellant in the pending application for leave to appeal this decision before the Supreme Court of Canada, we will not comment on this case, but note that much commentary is available online.
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