Revisiting five noteworthy expropriation cases from 2020

John: Welcome to this video summary of Gowling's Expropriation Law 2020: A Year in Review. This presentation is a an abridged video summary of our annual paper featuring the top expropriation cases in the past year. This summary presentation will highlight a number of important issues and key takeaways for those involved in the expropriation process. My name is John Doherty and I'm the leader of the Gowling's National Expropriation Law Group. Our National Expropriation Law Group represents both plaintiff land owners and government authorities across the country. A group of more than 20 practitioners is a multi-disciplinary team of lawyers, land use planners and clerks, from across all of our Canadian offices, and includes partners from our UK offices. We are presenting today on five of the most notable cases from four different jurisdictions across the country. Let me introduce our speakers.

Our first speaker is Alexandre Sami, from our Montreal office, who'll be speaking on a Supreme Court of Canada case out of Quebec. Alexandre is a partner in Gowling's Montreal office and in addition to expropriation matters his practice focuses on construction law and commercial litigation.

Our second speaker is Emily McCartney who will be speaking on a series of City of Edmonton decisions. Emily is an associate in the firm's Advocacy Group in the Calgary office. In addition to expropriation cases Emily acts as counsel in regulatory and environmental proceedings, commercial litigation and dispute resolution.

Our third speaker is Tristan Neill who will be speaking on a series of Nova Scotia cases. Tristan is an associate in Gowling's Waterloo Region office, practicing expropriation, planning and construction law. He is a member of the firm's National Municipal Law Group and Expropriation Law Group. Tristan is also a contributor to our annual Year in Review publication.

Our fourth speaker is Carolina Campos who will be speaking on the Ontario case Beniuk v Leamington. Carolina is an associate in Gowling's Ottawa office. Her practice focuses on expropriation, municipal and land use planning matters. Carolina is a member of Gowling's National Municipal Law Group and Expropriation Law Group. She is also a contributor to our annual Year in Review publication.

Our final speaker is Sahil Shoor, partner in our Waterloo office. His practice includes extensive experience in expropriation, construction law, land use planning and real property disputes. Sahil is also a contributor to our annual Year in Review publication. Alexandre, to start us off please tell us about this interesting Quebec case.

Alexandre: Thank you, John. As you mentioned I will be discussing the decision on the Supreme Court of Canada ... November 2020 in the Hydro-Quebec versus Matta matter. A bit of context. In March 2015, the ... [French language] authorized Hydro-Quebec to build the Chamouchouane-Bout-de-l'Île transmission line. Hydro-Quebec found that it would be easier to run the line through a corridor when it already had servitudes established in the 1970s for a purpose of a transmission line between the Jacques-Cartier substation near Quebec City and the Duvernay substation in Lavelle. Having been authorized by Order in Counsel to acquire these servitudes by way of expropriation, Hydro-Quebec had first served unpublished notices of expropriation, after which it had entered into notarized servitude agreements with the then land owners, describing the servitudes established and providing for various indemnities payable. In 2016, Hydro-Quebec began work on its new project. The respondent, Ms. Matta, and the other land owners refused Hydro-Quebec workers to enter their properties stating that the servitudes that Hydro-Quebec relied on were only for the transmission line that was built in the 1970s. They based their position on the Order in Counsel as well as the notices of expropriation. They believed that Hydro-Quebec was not allowed to use the same servitudes to build a new line. So what did the Supreme Court decide? The Supreme Court allowed the appeal and decided that Hydro-Quebec's electrical transmission servitudes are not restricted to the Jacques-Cartier-Duvernay line. It authorized Hydro-Quebec to build the new line and then the second electrical transmission line on the land owners' property based on the servitude agreements. The court indicated that the Order in Counsel, the notices of expropriation and the servitude agreements are different types of documents and that it is important to distinguish them from one another. The Order in Counsel is an administrative act intended to authorize the exercise of the power to deprive a property owner of the enjoyment of the attributes of his or her right of ownership. The notice of expropriation is an administrative act that constitutes and individualizes any servitude. As for the servitude agreement, it relates to the ordinary exercise of civil rights and to the privacy law rules of contract. The court concluded that the servitude agreements include a complete description of the servitudes. In these circumstances, the servitude agreements are the titles to which the owners of the ... land have a dominant land, must refer in exercising their respective rights rather than the Order in Counsel or the notices of expropriation. Because the servitude agreements are clear, the scope of the servitudes must be determined in light of their words. The servitude agreements do not mention any restrictions regarding the origin or the destination of the electricity. The servitudes are therefore not limited to the land between Jacques-Cartier and Duvernay substations. Therefore the servitudes on the respondent's lots authorize Hydro-Quebec to construct the new electrical line.

So in summary, the servitude acquired by expropriation is established by operation of law according to the classification set out in the Civil Court of Quebec. Therefore the parties can qualify it or even modify it. In this case, after serving and publishing the notices of expropriation, Hydro-Quebec signed servitude agreements with the respondent's predecessors in title. The servitude agreements, which were entered into after the Order in Counsel and the notice of expropriation, containing more faithful definition of the scope and terms for the exercise of the servitude of public utility than does the notice of expropriation. Since the servitudes are clear it's necessary to rely on their wording to determine their scope and to give effect to the clearly expressed intention of the parties. The court concluded that the servitude agreements allow Hydro-Quebec to place, replace, operate and maintain up to three electrical transmission lines. They do not mention any restrictions regarding the origin or destination of the electricity. The respondent's argument, based on the Order in Counsel and the notice of expropriation, that the servitudes are limited to the line between Jacques-Cartier and Duvernay substations must therefore fail. Relying on the servitude agreements Hydro-Quebec can build the Chamouchouane-Bout-de-l'Île line. Thank you and over to you, Emily.

Emily: Thank you. I'm going to be speaking today about the choice of forum for an owner in an action for compensation when property is expropriated by the Province of Alberta. As a brief overview the purpose of Alberta's Expropriation Act is to ensure that those who are subject to expropriation are properly compensated for made whole. So when the expropriating authority and the property owner can't agree on the amount of the proper compensation then, pursuant to the Expropriation Act, either the Land Compensation Board or the Court of Queen's Bench determines the proper compensation at the owner's election, if the expropriating authority is the Crown. So this is where the key points of this presentation arise. When the expropriating authority is a Municipality the owner does not have an election. They must proceed before the Alberta Land Compensation Board. But where the expropriating authority is the Province the owner can elect to proceed before the Board or before the Court of Queen's Bench. If it proceeded before the Court of Queen's Bench, the provisions of the Expropriation Act, relating to the determination of compensation by the Board, applied to the action before the court with all necessary modifications. That's the important point here. Proceeding before the court can in fact modify an owner's rights and responsibilities under the Expropriation Act if the Alberta Rules of Court conflict or provide for a different process. The one key difference is that the Alberta Rules of Court contain mechanisms to dismiss an action for a long delay in certain circumstances. That's exactly what happened in the case of Thoreson and Alberta Infrastructure which went to the Alberta Court of Appeal in 2020. In that case the expropriated owner elected to seek compensation through the court rather than the Land Compensation Board. The plaintiff in that case had made two separate claims. One was for business loss. One was for compensation. The claim of compensation was eventually determined by the court. But the second claim was not vigorously pursued and the Province applied to the court to strike the second claim as a long delay. The Court of Queen's Bench found, and the Alberta Court of Appeal agreed, that although the Expropriation Act does not provide for dismissal of claims for long delay, the Alberta Rules of Court does provide for that mechanism and that the rules applied. So the court dismissed that claim for long delay. The Alberta Court of Appeal specifically said that it would not be reasonable for a claimant to expect the same procedures in a court as it would find in administrative tribunal. Indeed the difference in procedure might be the reason why a claimant choses one forum over another.

When an owner seeks compensation through the Board process then only the Expropriation Act governs what the board may and may not do. So in Edmonton and 1523316 Alberta the Board found that it did not have authority to dismiss applications for compensation for long delay. The Board said that it does not have the power to eliminate a claimant's rights because of delay as this would be contrary to the purpose and scheme of the Expropriation Act. These two cases that I've mentioned therefore raise important considerations for an owner, who's property is expropriated by the Province of Alberta, as it is those owners who may elect to proceed before the Board or before the Court of Queen's Bench. That election should not be made lightly or hastily given the different powers and authorities available to the Board versus the court. One critical consideration is how long the claimant expects it will take for the actual value of the expropriated property to crystalize. This can be especially tricky in cases of partial expropriation where the Crown takes only a portion of land and leaves the rest behind. But the impact of the portion expropriated on the actual land value and business value may not be immediately apparent at the time of expropriation. If the circumstances are such that long delay is possible, or even probable, then seeking compensation through the court, rather than the Board, could put the owner at risk of an application to dismiss the claim for long delay, which it would not face in a Board proceeding. But conversely, that claimant would therefore not be able to avail itself of the more advantageous portions of the Alberta Rules of Court, only the Expropriation Act. These decisions are multi-faceted, and it's important for owners to seek legal advice as soon as they are notified of an intention to expropriate, in order to make the best possible decision on how to proceed at the outset and avoid unknowingly choosing a path that they may regret later on. Expropriation counsel can walk you through all of these advantages and disadvantages, of each forum, and assist you with making the best decision for your particular situation and your business. Thank you and over to Tristan.

Tristan: Thank you, Emily. In 2020, the Nova Scotia Utility and Review Board heard five injurious affection claims related to the reconfiguration of the Trans-Canada Highway in Antigonish. This highway by-pass construction resulted in claims by a number of business owners, Curry, Rhynold, Baker, Maceachern and Curry, against the Province of Nova Scotia pursuant to that Province's Expropriation Act. While the roadway was left unchanged in the vicinity of the claimant's properties, the access points to that roadway, and the properties visibility from the highway changed considerably. In the claimant's view these changes had a meaningful impact on their businesses. While there was no formal consolidation of the five proceedings, the claims were all heard within the same week and the parties agreed to a number of important procedural points, including: that the evidence put forward by witnesses for all claimants and the Province could be used in all of the proceedings; that 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. These procedural points promoted a more efficient, cost effective hearing of the injurious affection claims. With regards to the substance of the case, the claimants advanced a novel argument about the impact of the highway construction on their businesses. In addition to 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 the 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, the loss of visibility experienced by the business owners did not amount to an actionable nuisance and no compensation was awarded for injurious affection.

There are two key points to takeaway from this series of decisions. The first is that these decisions confirm that a loss of visibility does not amount to an actionable nuisance for which compensation can be awarded under Nova Scotia's Expropriation Act. Second, this series of cases 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. This may provide an alternative means of pursuing claims in jurisdictions, like most in Canada, where injurious affection claims cannot be brought as class actions. This is particularly relevant given how large scale transportation projects can affect a large number of land owners in a similar way. Up next, Carolina will be discussing a recent case from Ontario.

Carolina: Thank you, Tristan. So today I'll be discussing the risks of running into a limitations issue, when pursuing a claim in injurious affection, where no land is taken. These claims are notorious for their similarities to nuisance claims and it can be difficult to predict with certainty whether proceeding before the Local Planning Appeal Tribunal is the correct choice. In Beniuk and Leamington, appellate land owners spent years pursuing an injurious affection no land taken case only to discover that the appropriate forum and cause of action in their dispute was a nuisance claim in Superior Court. Unfortunately by that point the two year limitation period, provided by the Limitation Act, had long since expired. The Beniuk experience serves as an important reminder that parties cannot rely on waiting for the outcome of a tribunal proceeding to protect alternative claims from becoming statute-barred. To provide a bit more context, in 2009 the Beniuk's brought a claim for injurious affection no land taken under the Expropriation Act. The residence had 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 of the residence. By 2018, nearly a decade later, the Ontario Municipal Board determined it did not have jurisdiction over the Beniuk's claim, finding that the damage to the property had been caused by the use of the Municipal road and not by its construction, thereby taking it out of the purview of injurious affection. Immediately upon receiving the decision the Beniuk's commence a civil action in Superior Court claiming damages for nuisance and negligence. The Municipality moved for summary judgment and had the action successfully dismissed as being statute-barred. On appeal, the Beniuk's argued that the limitation period ceased to run while they had pursued their own OMB proceedings, relying on section 5(1)(a)(iv) of the Limitations Act. This section of the Act states that a claimant's discoverable on the day on which the claimant first knew, having regard to the nature of the injury, loss or damage, that a proceeding would be an appropriate means to seek remedy it. On the facts of this case, the Ontario Court of Appeal found that it was not legally appropriate for the appellant to wait until after the OMB's decision to have commenced civil proceedings, pursuant to that section of the Limitation Act. Ultimately, the Beniuk's were permitted to proceed with their claim and nuisance but only for the damage sustained in the previous 2 years. This was notwithstanding that they had experienced issues with the Municipal road for over a decade and all of this due to the limitations issue. So the key takeaway from this case is that parties cannot rely on waiting for the outcome of an existing proceeding in injurious affection where no land is taken to protect their rights to advance alternative claims. 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. Now over to Sahil.

Sahil: Thank you, Carolina. Good afternoon, everyone. The case that I'm going to speak to you about today is one of the first cases from Divisional Court of Ontario that considered and applied the standard review on expropriation matters, as for the guidance from the Supreme Court of Canada in the case of Canada (Minister of Citizenship and Immigration) and Vavilov. So the case that I'm talking to you about this morning is 1084372 Ontario Limited and City of Toronto. So this is the first case that applies that application of standard of review and as the Expropriation Act provides, in Ontario, a right of appeal to the Divisional Court, applicable standard of review is the appellate standard set out in the case of Housen. The court and the numbered company and the City of Toronto case further noted that the standard review would apply as follows: firstly with respect to the question of law, the standard of correctness would apply; secondly, findings of mixed fact and law where the legal principle is readily extricable, the standard of correctness would apply; thirdly, with respect to the findings of mixed fact and law where the legal principle is not readily extricable, palpable and overriding review would apply; and lastly, with respect to the findings of fact, the standard review would be palpable and overriding error. Furthermore, the Divisional Court considered substantially whether the application of section 14(4)(b) of the Expropriation Act in Ontario, which deals with market value of the land taken, and ... ... Divisional Court considered but for the expropriation, or the imminent prospect of the expropriation, what the property in question would have been shovel ready for development. Why was this relevant? Because the claimant in the numbered company and the City of Toronto case sought to rely on a higher valuation pertaining to the property being shovel ready for development, and the claimant argued that the only reason the property in question was not shovel ready was due to the prospect of an expropriation, which lead to the claimant's delay in submitting its application. The Court made a determination that any delay in submitting an application for the site approval was within the full control of the claimant and was a conscious business decision made by the claimant. Therefore the property was not shovel ready and therefore the highest and best use of the property was the use at the crunch time and not the use as purported by the claimant. Over to you, John, to conclude our session this morning.

John: Well thank you, everyone, for taking time today to view our summary presentations of five of the top expropriation cases in 2020 from across Canada. Our speakers have clarified for you some of the complex issues currently arising in expropriation law, and illustrated how this area of law intersects with other practice areas such as land use planning, environmental concerns, procedural options and the impact on property on business valuation issues. If we can assist you in the future, with any of these issues, please be sure to contact any one of us. Enjoy the rest of your day and stay safe. Thank you.