Land expropriations underway for Ottawa and Hamilton LRTs

Phase 2 of Ottawa's LRT is going full speed ahead. Initial notices relating to expropriations were sent out in late June 2017. With numerous takings set to occur in 2018, it is time for land owners, tenants and mortgagees to evaluate potential claims, and ensure that they are positioned to protect their rights.[1]

On April 26, 2017, Hamilton City Council voted to approve the design plan and submit an updated Environmental Project Report to the Ministry of the Environment and Climate Change, for a new 14-kilometre LRT line that will run through downtown Hamilton along Main and King Streets, and Queenston Road. Subsurface utility engineering is currently ongoing, with major construction beginning in 2019. The Hamilton LRT is expected to be in service in 2024.

Expropriations have become more frequent as policies promoting rapid transit options and of intensification of urban areas have been implemented in Ontario; however, they remain rare for individual land owners. When faced with an expropriation, it is critical to ensure that one gets the right advice. This is necessary to ensure that misconceptions are dispelled and land rights protected.

This article sets out the answers to common myths, and some of the basic principles associated with expropriation. If you are faced with an expropriation, we recommend that you seek legal and expert advice.

The Indemnity Principle

In Toronto Area Transit Operating Authority v. Dell Holdings Ltd., the Supreme Court of Canada observed that expropriation has a significant impact on the expropriated owner. The Court further noted that the Expropriations Act is a remedial statute, which must be given a broad and liberal interpretation consistent with its purpose. The Supreme Court found indemnity to be the guiding principle. Furthermore, in the event of an ambiguity, it should not be interpreted to deprive common law rights unless that is the plain provision of the statute. These principles, when applied, create a presumption that whenever land is expropriated, compensation will be paid.

There is no blank cheque when faced with expropriation. Claims must be reasonably related to the expropriation; however, the principle is to try to place those impacted by expropriation in the same position they would have been in but for the expropriation.

What are Potential Claims under the Expropriations Act?

Compensation is generally set out in section 13 of the Act:

13. (1) Where land is expropriated, the expropriating authority shall pay the owner such compensation as is determined in accordance with this Act.

(2) Where the land of an owner is expropriated, the compensation payable to the owner shall be based upon,

but, where the market value is based upon a use of the land other than the existing use, no compensation shall be paid under clause (b) for damages attributable to disturbance that would have been incurred by the owner in using the land for such other use.

To particularize the quantum of each of these heads of damage, usually requires expert evidence. This typically includes a real estate appraiser for market value, and injurious affection while business loss experts address other disturbance and business damages (such as lost profits, and particularization of relocation costs).

Do I need to own the Expropriated Property to have a claim?

No. "Owner" under the Expropriations Act is very broadly defined as:

"owner" includes a mortgagee, tenant, execution creditor, a person entitled to a limited estate or interest in land, a guardian of property, and a guardian, executor, administrator or trustee in whom land is vested;

This definition provides express claims for tenants who are impacted by expropriation. It is recommended that tenants receive separate legal advice than the owner, to ensure that the expropriation is evaluated through their own interest.

In Eat'n Putt Ltd. v. Ontario Ministry of Transportation, the Divisional Court examined whether an owner whose business was expropriated and chose to start a replacement business as a minority shareholder would be entitled to relocation costs under s. 18 of the Act. The Court found that starting a replacement business, even under a different ownership structure, was a natural and reasonable consequence of the expropriation, so therefore, disturbance damages were awarded.[2]

Where no land is taken, there may still be a claim for injurious affection when a someone is impacted by an infrastructure project. For more information on injurious affection claims, see our article All aboard: expropriation and injurious affection in the age of the LRT.

Is there a cap on my costs that are to be paid by the expropriating authority?

There is no firm cap on costs that are to be paid by the expropriation authority. The Expropriations Act contemplates payment of reasonable legal, appraisal and other costs "actually incurred, subject to certain rules. For more information on costs pursuant to the Act, see our article The Expropriations Act: the indemnity principle and costs.