Reimbursement of Expropriation Legal Costs

An Owner’s Entitlement to Reimbursement of Legal Costs

The Expropriations Act R.S.O. 1990, c. E.26, as amended (the “Expropriations Act”) is designed to make an expropriated owner whole. Usually, expropriation matters are adjudicated by an administrative tribunal, which decides all issues, including costs, in accordance with the Expropriations Act.  A recent decision by Ontario’s highest court confirmed that the costs rules set out in the Expropriations Act apply even when an expropriation matter is appealed to the civil courts.

In the case of The Corporation of the City of Owen Sound ats. Naidal Incorporated, the expropriated owner was awarded compensation at the administrative level. The expropriating authority unsuccessfully appealed portions of the administrative decision to the Divisional Court. While the owner incurred costs in the amount of $23,586.84 responding to the appeal, the Divisional Court only awarded the owner $7,500.00, on the basis that the ordinary civil court costs rules applied.

The owner then appealed the Divisional Court’s $7,500.00 costs award to the Court of Appeal. The Court of Appeal awarded the owner $23,586.84, the amount the owner incurred to respond to the appeal at the Divisional Court, as well as $11,622.50, the amount the owner incurred to pursue the appeal at the Court of Appeal. The Court of Appeal accepted that, in order to make an owner whole, it should apply the Expropriations Act when deciding the costs payable to the owner successfully resisting an appeal by the expropriating authority.

This decision is good news for owners who are expropriated as it exemplifies Ontario’s highest court tipping its hat to the remedial nature of the Expropriations Act – that is, to put an owner in the same position it would have been in but for the expropriation of its property.