fbpx
jeff@goldsteinlawyers.ca 647-838-6740

On Pre-Construction Real Estate Disputes by our Occasional Counsel Peter Spiro

Cancelled Condo Projects and Arbitration versus Class Actions

Ritchie v. Castlepoint Greybrook Sterling Inc., 2020 ONSC 3840 (CanLII)by Peter S. Spiro

There have been news headlines in Ontario about major condominium construction projects being cancelled, leaving behind hundreds of disappointed buyers. The practice in the condominium industry is to sell the units in a project three or more years before the scheduled completion of construction. Buyers put down substantial deposits that lock them into that project. If it is cancelled two or three years later in a rising market, they will suffer large losses, because the cost of buying an alternative unit will be much higher.

In such situations, the buyers may attempt to group together to launch a class action against the developer. They have been unsuccessful in these attempts, as the class actions have failed to achieve certification by the courts.

The Agreement of Purchase and Sale (“APS”) in these projects is written in a way that is heavily stacked against the buyer, and that results in an inability to pursue a class action. However, I will point out below that there may sometimes be a different alternative, in the form of arbitration based on the Ontario New Home Warranties Plan Act, that can result in a damage award to buyers acting individually.

In the Ritchie v. Castlepoint case, the judge, Justice Perell, may have come to the right conclusion based on the law as it pertains to class actions, but I would respectfully submit that his analysis of the warranty provisions (a matter not properly before the court in any event) was flawed.

Ritchie v. Castlepoint

There was no material dispute about the facts in the case under discussion, Ritchie v. Castlepoint Greybrook Sterling Inc., 2020 ONSC 3840 (CanLII). In the spring of 2016, the defendant Castlepoint had sold 179 units in a condo project in Toronto’s Junction district. The target occupancy date was March 29, 2019. On October 23, 2017, Castlepoint sent letters to the buyers stating that the project was cancelled and it would be refunding their deposits. As observed by the judge:

[37] Castlepoint never did start construction. Castlepoint alleges that by the late summer and early fall of 2017, rising construction costs made the condominium financially unviable. Castlepoint’s financial projections indicated that the project would generate negative returns rather than the minimum level of profit required by project lenders to finance the construction of the condominium.

The buyers had their deposits locked into this project for a period of about 18 months. That happened to be a period of rapid price increases in Toronto’s condo real estate market. The average two-bedroom condo rose from about $440,000 in April of 2016 to about $590,000 in October of 2017.[1] Therefore, the purchaser of a cancelled unit had effectively lost about $150,000.

In ordinary business, when somebody enters into a contract, they are expected to carry through with their promises, barring extraordinary events such as natural disasters. To do otherwise is a breach of contract. The fact that the contracting party regrets the bargain because it now thinks it will be unprofitable is not a valid excuse. The party in breach must compensate the other party in monetary terms, e.g., for the loss of $150,000 per unit. That general principle is evaded by the contract used by the condo industry. They have a very thorough “exclusion clause” that is like the proverbial “get out of jail free card”. It states that under no circumstances is the buyer entitled to claim damages because the developer has terminated the contract.

The Exclusion Clause in the Condo Agreement of Purchase and Sale

An exclusion of liability clause, as its name implies, is a term that excludes liability under a contract if certain things happen. In most types of contracts that have such a clause, it relates to quite specific events, but in the standard condo developer’s Agreement of Purchase and Sale (“APS”) it is very broad and sweeping. It boldly states, in clause 28, that:

In the event that this Agreement is terminated through no fault of the Purchaser, the Deposit shall be returned to the Purchaser …. The Purchaser further acknowledges that theVendor shall not be liable for any damages or costs whatsoever incurred by the Purchaser resulting from the termination of this Agreement including…. The Purchaser acknowledges and agrees that this provision may be pleaded by the Vendor as a complete defence to any claim which may be made by the Purchaser against the Vendor. [Emphasis added]

The concept of an exclusion clause has a long history in Anglo-Canadian law. In the more distant past, Lord Denning, head of the Court of Appeal in England, propounded a doctrine that limited the scope of exclusion clauses. Based on Lord Denning’s doctrine, an exclusion clause that permitted a fundamental breach of the contract, which made the whole purpose of the contract a nullity, could not be enforced: “it cannot be fair that a contracting party could make a fundamental promise while simultaneously securing the right to have no liability in the event that he or she did not perform the fundamental promise.” Unfortunately for consumers, more conservative judges in the House of Lords later disavowed that doctrine, and this has been followed in Canada.

Justice Perell briefly surveyed the history of the legal approach to exclusion clauses. The leading case on this in Canada is the Supreme Court’s decision in Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways:

[53] In Tercon, discussed further below, the Supreme Court of Canada established a three-step approach to the application of exclusion clauses: (a) the first step is to determine whether as a matter of interpretation the exclusion clause applies to the circumstance of the case; (b) if the exclusion clause applies, the second step is to determine whether the clause was unconscionable at the time the agreement was made; and, (c) if the exclusion clause applies and it was not unconscionable, then the third step is to determine whether the court should refuse to enforce the cause because of the presence of an overriding public policy.

After conducting his analysis, Justice Perell concluded that the exclusion clause in this APS did not violate the Tercon principles and was therefore enforceable:

[90] Viewing the enforcement of Clause 28 as a matter of interpretation or considering its application or non-application as a matter of public policy, in my opinion, enforcing the clause is not contrary to the existence of an overriding public policy.

The Role of the Tarion Addendum from the Ontario New Home Warranties Plan Act

The Ontario New Home Warranties Plan Act (“ONHWPA”) is a consumer protection statute that aims to protect buyers both against physical defects in the construction and also against breaches related to the timing of completion. Regulation 273/04 under ONHWPA designates the Tarion Corporation as the administrator of the ONHWPA. Other regulations state that Tarion can specify various forms of “Addendum” that are to be mandatory additions to the APS for a new home purchase.

The Tarion Addendum requires the vendor to state the factors which will give it the right to terminate the agreement, such as the inability to obtain financing or zoning permission. If the vendor has made an honest effort to obtain financing, and has been unable to get it, the Addendum does allow it to terminate the agreement. The principles of contract interpretation imply that there must have been a good faith effort, and the vendor cannot get out of the agreement by merely pretending that it was unable to obtain financing and using it as an arbitrary excuse.

The role of the Tarion Addendum to the APS in Ritchie v. Castlepoint was raised by the plaintiffs, but quickly dismissed by Justice Perell, who decided that it did not make a difference in this case:

[83] Clause 28 is in some respects a codification of paragraph 11 of the Addendum, but if paragraph 11 is a different termination provision, it is was agreed to by the parties [sic] and the parties agreed that the Vendor shall not be liable for any damages or costs whatsoever incurred by the Purchaser resulting from the termination of this Agreement.

The important point that was not discussed here is that the Tarion Addendum has the power to override any provision in the APS, including the exclusion clause. Section 13 of the Addendum states:

13. Addendum Prevails

The Addendum forms part of the Purchase Agreement. The Vendor and Purchaser agree that they shall not include any provision In the Purchase Agreement or any amendment to the Purchase Agreement or any other document (or indirectly do so through replacement of the Purchase Agreement) that derogates from, conflicts with or is inconsistent with the provisions of this Addendum, except where this Addendum expressly permits the parties to agree or consent to an alternative arrangement. The provisions of this Addendum prevail over any such provision. [Emphasis added]

There is an additional provision in the Addendum stating that, if the vendor terminates the agreement, the purchaser who disputes the termination is entitled to seek arbitration. (Moreover, the vendor is required to pay for the costs of the arbitration.) There would be no point in having such a right to go to arbitration if the exclusion clause is a complete defence against paying damages, and therefore the exclusion clause is necessarily repudiated by the Tarion Addendum.

Developers appear to be aware of this. In one case in which the author participated, where the termination by the vendor was clearly without merit, the vendor made a substantial settlement payment to the purchaser in order to avoid the risk of going to arbitration.

Mandatory Arbitration under ONHWPA Precludes a Class Action

Section 17 of ONHWPA states that “every agreement between a vendor and prospective owner shall be deemed to contain a written agreement to submit present or future differences to arbitration,” and this requirement to go to arbitration is laid out in the Tarion Addendum.[2]

Therefore, while I would argue that the Tarion Addendum does confer rights that override the exclusion clause, this cannot be enforced in court. Therefore, a class action cannot be used to enforce the provisions of the Addendum.

ONHWPA explicitly ousts the jurisdiction of the courts in this area in favour of private arbitration. This usually takes place before a retired judge, whose fees are paid by the parties, at no expense to the government. Arbitration has some efficiency advantages, but one of the major downsides from the viewpoint of consumer protection is that arbitral decisions are not publicly reported. They do not create precedents, and consumers are often unaware of their right to make use of arbitration.

As the jurisdiction of the court is ousted, there cannot be a class proceeding, which must take place in court. There are a number of significant areas in which class proceedings are prevented by statutory provisions that mandate a different forum. For example, the Expropriations Act, RSO 1990, requires that claims for “injurious affection” (e.g., loss of business due to a major construction project blocking access) are required to be made before the Local Planning Appeals Tribunal. Therefore, when business owners sought damages for lost business due to construction of the streetcar right of way along St. Clair Avenue, their claim failed to achieve certification. That also happened to be a decision by Justice Perell, which was upheld by the Court of Appeal in Curactive Organic Skin Care Ltd. v. Ontario, 2012 ONCA 81 (CanLII):

[3] Contrary to the appellants’ assertion, the court’s jurisdiction can indeed be ousted in favour of an administrative tribunal through clear, explicit and unambiguous language in a statute…

Class actions are intended to provide access to justice where individual claims are too small to be feasible. Perhaps this is not so much a problem in the case of cancelled condo projects or expropriations, where the individual claims are more likely to be larger. Nevertheless, they are not always large enough to proceed individually, and a class action would often still be more efficient.

The pitfalls in this can be seen in British Columbia, where the principle of ousting the jurisdiction of the court has been taken to an extreme in the case of employment disputes. That province’s Employment Standards Act, RSBC 1996, provides that an employee whose rights (e.g., to overtime pay or vacation pay) have been violated shall complain to the Ministry of Labour. BC’s Court of Appeal has therefore ruled that no such claims can be brought by way of a class action: Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA 182 (CanLII). Ontario’s Employment Standards Act is similar to BC’s, but Ontario’s Court of Appeal has nevertheless ruled that class actions are permissible for claims for unpaid overtime and vacation pay.

Conclusion

This case, and others before it, have found that plaintiffs face difficult challenges in bringing a claim of this type via a class action. Recent amendments to Ontario’s Class Proceedings Act in Bill 161, which raise the standards that must be met for certification, will only make things more difficult. In such a situation, individuals who have suffered losses may be well advised to pursue individual claims under the Tarion Addendum, which may offer a better chance at claiming damages for the lost opportunity from a cancelled condominium project.

Peter Spiro is the principal of Spiro Law P.C. He acts as occasional counsel to Goldstein Law in expropriation and real estate litigation. This article is provided for general information, and not intended to apply to any individual case. You should seek legal advice pertaining to the facts of your particular case.

[1] https://toronto.listing.ca/condo-price-history.htm

[2] This was a key issue in yet another of the prolific Justice Perell’s decisions, where he ruled that a class action could not be used because of a mandatory arbitration clause found in a private contract, Heller v. Uber Technologies Inc., 2018 ONSC 718 (CanLII), <http://canlii.ca/t/hq4hk>. In that case, the Court of Appeal ruled that the arbitration clause was unconscionable and therefore unenforceable, upheld by the Supreme Court in Uber Technologies Inc. v. Heller, 2020 SCC 16 (CanLII), <http://canlii.ca/t/j8dvf>.

Does a Property or Business Owner Subject to an Expropriation have to pay legal fees?

The short answer is on. What follows is a more in depth overview:

Costs in Expropriation A Primer On Expropriation Law

Expropriation is one of the ultimate exercises of government authority and the Expropriations Act, RSO 1990, c. E-26 (the “Expropriations Act”) is designed to make landowners whole when their property is taken without their consent.  The Supreme Court of Canada held that the “whole purpose” of the Act is to provide the private land owner, who has been subject to the expropriation of property, with “full and fair compensation.”

Costs (s.32)

In expropriation proceedings the risk of counsel for the claimant not being paid is substantially lower than the risk would be when representing clients in normal litigation. In all but unusual circumstances, the expropriating authority is responsible for the payment of the claimants solicitor.  Section 32 of the Act generally provides for the recovery of full indemnity costs by an expropriated landowner.

s.32(1):

Where the amount to which an owner is entitled upon an expropriation or claim for 

injurious affection is determined by the Tribunal and the amount awarded by the Tribunal is 85 per cent, or more, of the amount offered by the statutory authority, the Tribunal shall make an order directing the statutory authority to pay the reasonable legal, appraisal and other costs actually incurred by the owner for the purposes of determining the compensation payable, and may fix the costs in a lump sum or may order that the determination of the amount of such costs be referred to an assessment officer.

The section is clear – the Board “shall” make an order. A successful owner is one who is awarded 85% or more of the amount offered by the authorities. For example, if an owner is provided $100.00 as an initial payment for the market value of the lands taken and ultimately recovers a total award of $86.00 for all damages including market value, the owner’s entitlement to costs is triggered. 

s.32(2):

Where the amount to which an owner is entitled upon an expropriation or claim for injurious affection is determined by the Board and the amount awarded by the Board is less than 85 per cent of the amount offered by the statutory authority, the Board may make such order, if any, for the payment of costs as it considers appropriate, and may fix the costs in a lump sum or may order that the determination of the amount of such costs be referred to an assessment officer who shall assess and allow the costs in accordance with the order and the tariffs and rules prescribed under clause 44 (d).

The language “the Board may make such order, if any, for the payment of costs as it considers appropriate” provides discretion for the Tribunal to make a costs award against the landowner in the event the owner does not achieve 85 per cent or more of the amount offered by the statutory authority.  When the authority is successful and a claim is dismissed entirely, the “below 85% threshold” in s. 32(2) of the Expropriations Act is engaged because the award is less than any offer presented by the authority. This section empowers the Board, where a claim has been dismissed, to deny costs to the claimant or order that the respondent (expropriating authority’s) costs be paid by the claimant. 

Which “Amounted Offered”? 

Some decisions held that an owner could recover full indemnity legal and appraisal costs in accordance with section 32(1) as long as it achieved 85 per cent or more of the expropriating authority’s offer made pursuant to section 25 of the Act (“Section 25 Offer”).  

Other decisions held that an owner was required to achieve 85 per cent of subsequent higher offers made by the expropriating authority, including those made pursuant to Rule 49 of the Rules of Civil Procedure, RRO 1990, Reg 194 (“Rule 49 Offer”).

Shergar v. Windsor (City) 2020 ONCA

Costs can be awarded to the statutory authority under s.32 of the Expropriations Act for settlement offers that were unreasonably rejected.  Previously, costs awards under s.32 were based on the amount of the s.25 offer made by the authority; however, this case expands the Tribunal’s scope to award adverse costs for any subsequent offer made by the authority.

What Costs are “Reasonable”?

The Board’s Rules of Practice and Procedure provide that where a matter is not covered in those rules, the Board may follow the Rules of Civil Procedure. The factors enumerated in rule 57.01 of the Rules, are instructive: 

Reasonable Costs under the Rules of Civil Procedure 

58.06 (1) In assessing costs the assessment officer may consider, 

  1. the amount involved in the proceeding; 
  2. the complexity of the proceeding;
  3. the importance of the issues; 
  4. the duration of the hearing;
  5. the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; 
  6. whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; 
  7. a party’s denial of or refusal to admit anything that should have been admitted; and 
  8. any other matter relevant to the assessment of costs

“Reasonableness” does not prevent costs from being in excess of total amount awarded as compensation.  In Johnson v. MTO LCR 296 1975, the compensation awarded was $60,000 and the costs $84,000. 

DIS-ALLOWING CLAIMANTS COSTS


Under the LPAT Rules of Practice and Procedure, the Tribunal may only order costs against a party if the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or if the party has acted in bad faith.

Costs – 23.09. Circumstances in Which Costs Order May be Made:


(a) failing to attend a hearing event or failing to send a representative when properly given notice, without contacting the Tribunal; 

(b) failing to give notice without adequate explanation, lack of co-operation with other parties during pre-hearing proceedings, changing a position without notice to the parties, or introducing an issue or evidence not previously mentioned or included in a procedural order; 

(c) failing to act in a timely manner or failing to comply with a procedural order or direction of the Tribunal where the result is undue prejudice or delay; 

(d) a course of conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events; 

(e) failing to present evidence, continuing to deal with issues, asking questions or taking LPAT Rules of Practice and Procedure April 3, 2018 – 28 – steps that the Tribunal has determined to be improper; 

(f) failing to make reasonable efforts to combine submissions with parties of similar interest; 

(g) acting disrespectfully or maligning the character of another party; 

(h) knowingly presenting false or misleading evidence; or 

(i) breaching a confidentiality requirement of a mediation, settlement conference or of a decision of the Tribunal in the hearing of the merits. The Tribunal is not bound to order costs when any of these examples occur as the Tribunal will consider the seriousness of the misconduct. 

PERTINENT CASES

Given the more recent trend by the LPAT to awards costs to an expropriating authority, counsel for claimants are wise to inform their clients about the potential cost consequences of proceeding with an unmeritorious claim. 

Shergar Development Inc. v. Windsor (City) 2020 ONCA 490 – Offers subsequent to S.25 are relevant in fixing costs

Costs can be awarded to the statutory authority under s.32 of the Expropriations Act for settlement offers that were unreasonably rejected.  Previously, costs awards under s.32 were based on the amount of the s.25 offer made by the authority; however, this case expands the Tribunal’s scope to award adverse costs for any subsequent offer made by the authority. 

HELD: Shergar refused to accept an offer equivalent to $1,208,155 when their interest was limited to $266,832. Shergar also frustrated and delayed the determination of the issue of the appropriate compensation to be awarded to the subject lands. The Court ruled that this conduct is worthy of censure. Shergar’s actions resulted in significant delay and frustration, wasting the Board’s valuable time. Shergar’s interpretation would otherwise permit the prospect of an unreasonable claimant delaying proceedings, running up legal costs, and wasting the Board’s resources, safe in the knowledge that unreasonable refusals of subsequent offers cannot adversely affect its entitlement to legal costs.

Pitblado v. Oakville 2006, 90 LCR 156, 2006 CarswellOnt 2574 (O.M.B.)

An otherwise narrow interpretation of the Act would require the authorities to guess the market value of the subject property at the outset. That said, the Board has rejected the authorities attempt to rely on a subsequent offer of compensation to determine the claimants entitlements to costs; as in this case where the authority attempted to rely on an offer made two years before the expropriation. 

Willies Car & Van Wash Ltd. v. Simcoe County – Failure to Avoid Unnecessary Costs

Claim was for injurious affection no land taken, and the claimant failed in its claim for the following reasons: 

  • The claim was statute-barred by the one-year limitation period set out in s. 22 of the Expropriations Act
  • The Appellant failed to meet the legal threshold for establishing injurious affection where no land is taken
  • The Appellant did not demonstrate that the Respondent’s construction caused any reduction in its business.
  • The Appellant did not present sufficient evidence to demonstrate that it suffered compensable damage.

The Board found that unnecessary costs could have been avoided if the Appellant had accepted the Respondent’s offer that was made early in the proceeding.  The Board also found that the offer was bona fide and intended to achieve a settlement of the claim before substantial costs were incurred. The Board concluded that the Appellant “at its own peril, ignored the offer as well as the challenges with respect to the facts of the case and the applicable law and must now face the consequences of its actions”. The Appellant’s conduct in refusing the offer was “unreasonable”. As a result, the Board stated that it should be responsible for some of the Respondent’s costs incurred in defending a claim that had no merit.

The Board substantially reduced the Respondent’s costs as follows:

  • Legal Costs: $60,009.20 (This was a 50% discount of $120,018.40).
  • Experts Costs: It discounted the expert costs by 40%. The starting point was $44,888.15, discounted to $26,934.00.
  • Total costs allowed: $86,943.20.

Disposal Services Ltd. v. Toronto 5 LCR 91, 1973 CarswellOnt 1358 – Where “Nil” Offer

Where there is solely a claim for injurious affection or whether the authority has failed to make an offer on expropriation and the Board dismisses the claim altogether, both sides will likely be ordered to bear their own costs up to the date of an offer, and if rejected, costs agent the claimant after that date. 

Whitnall v. Sarnia (City), 68 LCR 291, 1991 CarswellOnt 5346 (OMB)

  • Claimants failed in claim for injurious affection were no land had been taken 
  • Claimant refused two separate offers to settle and ultimately received no award of compensation at the hearing
  • Rule 49 of the Rules of Civil Procedure was applied and awarded costs to the respondent 

To incorporate the cost consequences of Rule 49 of the Rules (which was designed to dissuade frivolous claims by creating cost risks for Plaintiff’s), the Expropriations Act is a remedial statue…

Davoodian v. Dufferin Wind Power 2019 CanLII 101734 

Electrical transmission line installed that abutted the land owned by the claimants.  Business damages as a result of injurious affection from the construction of the transmission line was sought. The Respondent was totally successfully at the Hearing; the Claimant rejected two offers to settle; and the issues were not particularly novel. The Tribunal made an award of partial indemnity costs to be paid by the Claimant.

Disbursements

Hamilton v. Lax (1972) 47 LCR 84
https://www.canlii.org/en/on/onsc/doc/1992/1992canlii7656/1992canlii7656.html?autocompleteStr=hamilton%20(city)%20v.%20lax%20&autocompletePos=1#document

Interest charges on money borrowed to fund expropriation expenses will be disallowed where the owner had funds available from the advance payment paid by the authority to provide for those expenses.

Assessment Officer Decisions 

  • Where a hearing was unduly length and repetitive, the Board recommended a reduction in the counsel fee for 171/2 to 8 days; 
  • Where a claim for business loss was dismissed and the Board found no credible evidence to support the claim, it disallowed the counsel fee for the time involved presenting the claim; 
  • Separately registered owners failed to give evidence to support there were any separate or conflicting issues requiring each to be represented by separate counsel. The Board directed to Assessment Officer to disallow the separate legal costs of one of the two counse

Registered Property Owners in Expropriations

Municipalities in Ontario are engaging in the expropriation process to involuntarily purchase private property for various infrastructure works.  For example, in the City of Toronto, the authorities have acquired an interest in private property in order to accommodate the upgrading and enhanced of Donlands Subway Station.  See a copy of the summary of the project and of the expropriated property interests here.  This project is an important insofar as it enhances accessibility requirements at this subway station and complies with the legislative changes as implemented by the Accessibility for Ontarian’s with Disabilities Act, 2005 (AODA).

The City of Toronto posts a partial list of expropriated properties here.  In addition, prior to expropriation, the authorities are required to publish a notice of the application of intention to expropriate land once a week for three weeks in a local newspaper where the lands are situated (section 6(1) of the Expropriations Act).  In addition, the notice of the application of intention to expropriate is served on the registered owner(s) of the property.

Registered Owner is defined by the Expropriations Act as follows:

An owner of land whose interest in the land is defined and whose name is specified in an instrument in the proper land registry or sheriff’s office, and includes a person shown as a tenant of land on the last revised assessment roll; (“propriétaire enregistré”)

The above-referenced definition of the registered owner is rather broad and encompasses anyone with an interest in the property.  Tenants in common, individuals with small and limited ownership interests, mortgagees, other security-interest holders, lien-holders, those with spousal interests, and otherwise, are all entitled to notice of the expropriation and to have their rights preserved and protected in the expropriation process.  Authorities will generally require a Full and Final Release from all registered owners of the property in order to effectuate a payout on account of expropriation. As such, it can often require extensive time and coordination amongst the registered owners of the property if their interests are not all aligned.

Authorities typically prefer an amicable resolution with property owners related to expropriation claims, especially with respect to smaller, partial takings and temporary easement. However, given construction timelines and public budgets, authorities typically commence the expropriation process in parallel with attempts at an amicable resolution.  If a negotiated settlement with the expropriated property owner is not attainable, the more formal timelines and procedures of the Expropriations Act will be employed by the authorities in order to take possession of the lands and commence construction works.

 

Expropriation in Ontario

As we have discussed in our expropriation law blog posts, we represent property owners and business owners in claims against government authorities when land is involuntarily purchased for a public purpose. The Municipal Act 2001 S.O. 2001, c. 25, in Ontario, provides that the power of a Municipality to acquire land under the Municipal Act, or any other Act, includes the power to expropriate land in accordance with the Expropriations Act.

In order to authorize an expropriation of land, the municipality must obtain the consent of the governing council to carry out the property acquisition. Once approval is obtained from municipal council to proceed with the purchase of land, a Notice of Application for Approval to Expropriate Land is delivered to the property owner, following which a series of steps is taken by the authorities, typically including but not limited to as follows:

a) a Plan of Expropriation be obtained and registered on title to the Lands;

b) the Notice of Expropriation, Notice of Possession and Notice of Election be served upon the owners of the Lands;

c) an appraisal report for expropriation purposes be obtained to establish the market value of the Lands;

d) the owners of the Lands be served with an offer in accordance with Section 25 of the Expropriations Act;

e) payment of compensation offered pursuant to Section 25 of the Expropriations Act, be made upon acceptance by the owners of the Lands;

f) all necessary steps required to be taken to obtain possession of the expropriated Lands.

If the property owner does not accept the section 25 offer of compensation in full and final satisfaction of their rights in the property, the owner may commence further legal action, engage their own property appraiser, and proceed with negotiation at the Board of Negotiation or an arbitration process through the Local Planning Appeals Tribunal (LPAT) for a determination of the proceeds of expropriation.

Expropriations Update in Ontario

As we have discussed here and has been discussed here and here the municipal governments across Ontario are undertaking various infrastructure projects that require the expropriation of land from private property owners.  As Goldstein Law Firm, we specialize in expropriation law, having helped property and business owners in various projects across Ontario, including but not limited to the following:

Eglinton Crosstown
Hurontario LRT
Hamilton LRT
Speers Road Widening
Trafalgar Road Widening
Yonge Street Road Widening

If you are a property owner being impacted by any of the above-referenced construction projects or any other project across Ontario and you have received a Notice of Application for Approval to Expropriate Land, it is best to consult with an experienced expropriation lawyer to advise you of your rights.  We do not charge any up-front fees in expropriation matter, and authorities are required to reimburse all reasonable legal and professional fees incurred by the property owner through the course of the expropriation.

As such, there is absolutely no cost to you for contacting and consulting with an expropriation lawyer.  Call Goldstein Law at 647.838.6740 today!

Hamilton LRT Expropriations

Expropriation is the government taking of land. In preparation for constructing the Hamilton LRT, the government is purchasing property from private owners. A large quantity of land is being acquired by the government to accommodate the LRT project in Hamilton.

The City of Hamilton and Metrolinx are acquiring property in collaboration as required for the Hamilton LRT.  Metrolinx is responsible for all costs of acquiring the properties, including any injurious affection claims under the Expropriations Act.  The City acquires real property (i.e., fee simple interests, leaseholds, easements whether temporary or permanent, depending on the case) for the Project on behalf of Metrolinx.

For each property, the City obtains an appraisal or opinion of value to identify the market value of the property. Also, a survey is required.  Ultimately, the property owner and authorities will enter into an Agreement of Purchase and Sale for payment to the Owner of the following:

-Legal and appraisal costs incurred by the property owner;

-Penalties for prepayment and/or partial discharges of any mortgage or charge registered against the property;

-Relocation and/or equivalent reinstatement costs of the property owner;

-Disturbance damages, including business loss;

-Land transfer and other applicable taxes;

-Any other compensation as required by the Expropriations Act.

If you are a property owner subject to expropriation as a result of the Hamilton LRT project, please contact Goldstein Law for a free consultation today!

Viva Rapid Transit Corridor – Expropriations

The Town of Richmond Hill has obtained approval from local council to serve offers of compensation under section 25 of the Expropriations Act in Ontario to owners of lands who are being expropriated on Yonge Street for the vivaNEst bus rapid transit corridor.

York Region Rapid Transit Corporation (YRRTC) is undertaking improvements to facilitate public transit along Yonge Street by constructing dedicates lanes for Viva buses, along with enhanced boulevards. Starting in January 2015, local council approved the expropriation of properties, including permanent and temporary expropriations of fee simple interests and temporary easements for four-year periods, which are set to expire in March 2019. Given that construction is ongoing at this time, the Region needs to extend the temporary easements beyond March 2019. The new temporary easements that are being negotiated with property owners are to extend to April 2021.

The authorities will offer the property owner one of two options in accordance with the Expropriations Act:
(1) Full compensation for the market value of the expropriated land and damages for injurious affection, which accepted, will be in full satisfaction of any claims by the owner; and
(2) Payment for the market value of expropriated lands but not included an offer to pay any other damages. If the owner accepts this offer, they may reserve the right to bring claims in the future for additional compensation in accordance with the Expropriations Act.

It is generally in the property owners best interest to accept the second offer, and then endeavour to negotiate a full and final settlement thereafter. If you are a property owner or tenant that has been served with an offer of compensation under the Expropriations Act in Ontario, feel free to contact an expropriation lawyer at Goldstein Law Firm today.

Offers of Compensation – Approving Expropriations

An expropriating authority is required to obtain the approval of the local council or “approving authority” in order to carry out an expropriation. An example of such approval is contained here

In the link, attached, permission is sought from the City of Toronto to expropriate and acquire temporary construction easements to facilitate the construction of the Toronto Spadina Subway Extension Project. As we have discussed here, temporary easements are strips of land contained in a property owners parcel, which is required by the authorities for an indicated period of time to carry out construction work. The authorities do not seek to acquire permanent interests in such property; as when the construction work is completed, access will no longer be required to such land, and full ownership reverts back to the property owner, with no easement or otherwise attached thereto.

The expropriating authority will always require that the property owner signs a Full and Final Release in exchange for the payment of compensation for the expropriation. It is imperative that the property owner carefully reviews the terms of the Release to ensure that future claims are not barred should they arise. For instance, in the above-referenced case related to a temporary construction easement, if the works take longer than initially anticipated, the authorities may need to extend the duration of the easement, which will result in additional compensation for the property owner. However, if the Release is drafted in a way that precludes the property owner from obtaining additional compensation for an easement extension, then substantial funds could be lost.

Accordingly, and given that expropriating authorities are required to reimburse reasonable legal and professional fees under the Expropriations Act, it is advisable to consult with an expropriation lawyer before signing any agreement for compensation.