There has been little in terms of legislative reform in the
expropriation context for several decades. The common law has
assisted in providing guidance on how interest and cost provisions
in expropriation statutes should be interpreted. The cost and
interest provisions in the Expropriations Act are unique
and much different from standard civil litigation as no one chooses
to be expropriated. An understanding of these provisions is
critical in appreciating their role in settlement discussions,
mediation and hearings in the expropriation context.
The entitlement of expropriated property owners to recover their
reasonable legal, appraisal and other costs is an essential part of
the compensatory scheme pursuant to the Expropriations
In Toronto Area Transit Operating Authority v. Dell Holdings
Ltd.1, 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.2 These principles, when applied, create a
presumption that whenever land is expropriated, compensation will
Pursuant to subsection 32(1) of the Expropriations Act,
an owner, who is awarded 85% or more of the amount offered by the
expropriating authority, is entitled to an order directing the
expropriation authority to pay for her reasonable legal, appraisal
and other costs "actually incurred" for the purposes of
determining compensation.4 In those circumstances,
the Board has no discretion and it "shall" make an order
directing the statutory authority to pay the reasonable costs.
However, under subsection 32(2) of the Expropriations Act
the Board has the discretion to award or refuse costs where the
claimant is awarded less than 85% of the amount offered by the
The "amount offered" refers to the section 25 offer,
which must be made within three months after the registration of
the expropriation plan.6 The OMB has held that it
would exclude evidence of any other offer from an expropriating
authority, which the authority had served for the purpose of
improving its position with regards to
costs.7 Furthermore, where the expropriating
authority makes no section 25 offer, the OMB will presume that the
amount awarded is above the 85% threshold and will order the
authority to pay all reasonable costs.8 However,
where no offer is made and the claimant is unsuccessful in
obtaining compensation, courts have held that there is no
jurisdiction to award costs.9
Reasonable appraisal costs
In DDS Investments Ltd. v Toronto10,
Assessment Officer Argyropoulos found that many of the same
principles that apply to the question of reasonable legal costs
also apply to the issue of reasonable appraisal costs:
The function of the assessment officer is not to assess the
appropriate fee to be charged by the appraiser to the owner, but
rather to determine the quantum to be paid by the
The basis for assessing experts' fees has been stated in
these words: It is not enough that the claimant may have acted
reasonably in hiring an expert, but further, the fees of the expert
must have been reasonable....having regard to the qualifications
and experience of the appraiser, the hours spent and the hourly
rate charged by him and quality of the services rendered. All of
the foregoing factors must be considered in light of the complexity
of the issues and the amount involved in the
Injurious affection — no taking
There is limited jurisprudence when dealing with costs where no
land has been taken. In cases where there is injurious affection
with no taking, it has been argued that the Board should not read
the 85% reference as a precondition to the award of costs. That
could create the anomalous and potentially absurd result that the
authority could, arguably, by its failure to make any offer of
compensation oust the jurisdiction of the OMB to award reasonable
costs even to a successful claimant. Such an interpretation is
inconsistent with the intent of the indemnity principle underlying
the Act as articulated by the Supreme Court of Canada.
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