Ontario Land Tribunal
Tribunal ontarien de l’aménagement du territoire
ISSUE DATE:
September 09, 2024
CASE NO(S).:
OLT-22-003167
(Formerly LC190023)
PROCEEDING COMMENCED UNDER subsection 26(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended
Claimant:
12908 Highway 7 Inc.
Respondent:
His Majesty the King in Right of the Province of Ontario, as represented by the Ministry of Transportation
Subject:
Land Compensation
Property Address / Description:
Part of Lot 27, Concession 7
Municipality:
Town of Halton Hills
OLT Case No.:
OLT-22-003167
LC190023
OLT Lead Case No.:
OLT-22-003167
LC190023
OLT Case Name:
12908 Hwy. 7 Inc. v. HMK in Right of Ontario (Minister of Transportation)
PROCEEDING COMMENCED UNDER subsection 32(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended
Request by:
12908 Highway 7 Inc.
Request for:
Request for an Order Awarding Costs
Costs sought against:
His Majesty the King in Right of the Province of Ontario, as represented by the Minister of Transportation
Heard:
April 3, 2024, in writing
APPEARANCES:
Parties
Counsel
12908 Highway 7 Inc.
Conner Harris
(“Claimant”)
Sarah Spitz
His Majesty the King in Right of the
Eunice Machado
Province of Ontario, as represented
Brandon Fragomeni
by the Minister of Transportation
(“Respondent”)
DECISION DELIVERED BY ROBERT G. ACKERMAN AND ORDER OF THE TRIBUNAL
1This Motion for Costs is brought by the Claimant pursuant to subsection 32(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended (“Act”), as directed by the Tribunal in its Decision issued on March 22, 2024. This Member, on behalf of the Tribunal, heard this claim for compensation under subsection 26(1) of the Act from March 27, 2023 to March 31, 2023, by Video Hearing, followed by written submissions which were completed on May 8, 2024. The Tribunal released its decision on the merits on November 28, 2023, ordering that the Respondent pay compensation to the Claimant for damages for injurious affection in the amount of $176,660, together with statutory interest pursuant to section 33 and costs pursuant to section 32 of the Act, in amounts to be agreed between the Parties.
2On March 19, 2024, counsel for both Parties attended before this Member, advising that the quantum of statutory interest payable had been agreed and paid, but that the amount of costs payable remained unresolved. The Tribunal directed that the Parties proceed by way of written motion to the Tribunal to have the amount of the costs payable determined.
3The Tribunal has received the following materials from counsel for the Parties:
a. Claimant’s Motion Record on Costs;
b. Claimant’s Factum;
c. Claimant’s Brief of Authorities;
d. Respondent’s Motion Record; and
e. Respondent’s Notice of Response to Claimant’s Motion on Costs.
4The Claimant’s Motion Record on Costs contains the Claimant’s Bill of Costs and Supplementary Bill of Costs (together, the “BOC”) claiming the following amounts legal fees, expert fees, disbursements, and HST, which total $386,731.79:
a. Legal fees of Rayman Harris LLP incurred between October 23, 2018 and January 10, 2024 in the amount of $316,090.38, inclusive of HST;
b. Legal disbursements in the amount of $5,780.93, inclusive of HST;
c. Appraisal fees of Colliers in the amount of $18,834.37;
d. Legal fees of Thomson Rogers LLP in the amount of $7,179.14;
e. Consulting fees of Lehman & Associates in the amount of $3,164.00;
f. Supplementary legal fees, disbursements, and HST of Rayman Harris LLP incurred for the determination of costs between January 10, 2024 and April 3, 2024 in the amount of $35,682.97.
5The Claimant also requests an Order that the Respondent pay post-judgment interest at the prescribed rate on outstanding costs pursuant to section 129 of the Courts of Justice Act, RSO 1990, c. C.43 (“COJA”).
6In its notice of Response to the Claimant’s Motion of Costs, the Respondent does not take issue that it is liable to pay costs to the Claimant. The Respondent concedes there is no issue with respect to the solicitor’s disbursements and HST, the Appraisers fees and HST, and the fees and HST of the Claimant’s former counsel, Mr. Burton. The Respondent does take the position that certain amounts for legal fees are not reasonable and should be disallowed. These amounts, fall into the eight categories, in the amounts which are listed below. All amounts are net of HST unless otherwise indicated:
a. Change of Counsel – $1,732.50:
b. Solicitor/Client Assessment of Mr. Burton’s Account – $8,221.00 (inclusive of HST);
c. Request to Admit and Niagara Escarpment Commission (“NEC”) Witness Motions – $55,294;
d. Motion for Costs of Adjournment – $21,913;
e. Freedom of Information (“FOI”) Request – $693;
f. Interim Costs – $1,398;
g. Counsel’s time meeting with Mr. Abel, the contractor witness – $4,696;
h. Complete of Cost Recovery – $8,634;
i. Preparation of Bill of Costs – $8,403.75;
j. Lehman & Associates – $3,164 (inclusive of HST).
7Counsel for the Respondent submits that the legal fees of the Claimant should be reduced by the sum of $107,986.75, plus HST, and that the consulting fee of Lehman & Associates in the sum of $3,164, inclusive of HST, should be disallowed.
8If all of the Crown’s submissions are accepted, the fees payable would therefore be:
a. Legal fees of $285,226.25 reduced to $177,239.25, plus HST = $200,280;
b. Disbursements and HST of $5780.93 (unchanged);
c. Appraisal and HST of $18,834.37 (unchanged);
d. Consulting fees of $3,164 reduced to $0; and
e. Former counsel fees of $7179.14 totalling $$8,221, with HST, (unchanged).
9The Crown’s submissions posit that the total fees payable, inclusive of HST, are $232,074.44.
10The Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6, and the Act grant the Tribunal the jurisdiction and authority to fully determine costs in any expropriation proceeding.
11Costs under the Act are governed by section 32. Subsection 32(1) provides:
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 who shall assess and allow the costs in accordance with this subsection and the tariffs and rules prescribed under clause 44 (d). 2017, c. 23, Sched. 5, s. 35.
12As this was a no-land taken case, there was no statutory offer by the Respondent under section 25 of the Act. However, the Respondent did make an offer to the Claimant in the amount of $3,500. As the Tribunal awarded damages for injurious affection and disturbance in the amount of $204,160, the Tribunal determines that the 85% threshold was surpassed, and that subsection 32(1) of the Act has been engaged.
13Pursuant to R.R.O 1990, Reg. 364, a determination of a successful claimant’s costs under subsection 32(1) are to be considered quantum meruit, as on an assessment of costs as between a solicitor and his or her own client. This means that the Act provides for the full indemnity of an owner’s costs, subject only to the test of reasonableness.
14The Tribunal’s Rules of Practice and Procedure (“OLT Rules”) provide that where a matter is not covered in the OLT Rules, the Tribunal may apply the provisions of the Rules of Civil Procedure, RRO 1990, Reg 194 (“RCP”). The application of the RCP is in the discretion of the Tribunal. Rule 57.01(1) of the RCP sets out factors which may be considered by a Court when fixing or assessing costs. Counsel for the Claimant submits, and the Tribunal agrees, that the provisions of Rule 57.01(1) are instructive but not binding, in the exercise of the Tribunal’s discretion when fixing costs.
Claim for Costs for Change of Counsel – $1,732.50
Claim for Costs of Solicitor-Client Assessment of Prior Counsel – $8,221
15The Claimant’s previous counsel was Al Burton, who rendered a final account in the sum of $7,179.14, plus HST, totalling $8,221. The Claimant sought to have Mr. Burton’s account assessed under the Solicitors Act, R.S.O. 1990, c. S.15, and the BOC contains time and charges incurred with respect to the solicitor-client assessment. The amount of Mr. Burton’s final account is not disputed. However, counsel for the Respondent submits that the lawyers’ time and charges related to the change in counsel in the amount of $1,732.50, and to the solicitor-client assessment of Mr. Burton’s account, should not be the liability of the Respondent as these costs were not incurred for the purposes of determining the amount of the compensation payable. The Tribunal agrees that the time and charges were not incurred for the purposes of determining the amount of the compensation. Both amounts are accordingly disallowed.
Costs Claimed for Admissions Withdrawal Motion and NEC Witness Motion – $55,294
16These Motions were determined by a Panel of the Tribunal (“Motions Panel”) in its Decision issued on March 15, 2023.
17Admissions Withdrawal Motion -- The Hearing of this claim was originally scheduled for five days, beginning on December 5, 2022. On September 9, 2022, the Claimant had served a Request to Admit pursuant to Rule 51.02 of the RCP. Rule 51.03 required the Respondent to deliver a Response to the Request to Admit (“Response”) by September 29, 2022, failing which, it was deemed to admit the truth of the facts and the authenticity of the documents enumerated in the Request to Admit. The Respondent failed to comply with its procedural obligation and did not deliver its Response as required. About three weeks prior to the scheduled start of the Hearing the Respondent sought to withdraw its deemed admissions by delivery of its Response on November 15, 2022. The Claimant refused to consent to the late delivery of the Response, and the Respondent brought a Motion for an Order permitting it to withdraw the deemed admissions and to file its Response.
18NEC Witness Motion -- On November 23, 2022, the Respondent had served the Claimant with a witness statement for a proposed, unnamed witness, from the NEC. The Claimant objected to the late delivery of the witness statement, and to the possibility that such a witness would offer expert evidence, notice of which was well outside the timelines contained in the Procedural Order (“PO”) governing the conduct of the proceeding. The Claimant brought a Motion, to be returnable at the commencement of the Hearing, for an Order striking the witness statement, or in the alternative, limiting the testimony of the witness, and directing that the Respondent make further documentary production pertaining to the NEC, and for the costs of the Motion. Subsequently, as the Hearing was adjourned, the Respondent served a revised NEC witness statement which identified Amaraine Lavan, a professional planner in the employ of the NEC, as the NEC witness.
19As the Respondent’s fact witness became unavailable due to an illness, the Hearing did not proceed on December 5, 2022, and was rescheduled to begin on March 27, 2023. The two Motions were heard together by the Motions Panel (along with a third Motion described below) and were determined by the Tribunal’s Decision issued on March 15, 2023. Counsel for the Respondent submits that it should not be liable for the costs of the NEC Witness Motion and the Admissions Withdrawal Motion because it was successful on both Motions and because the Tribunal’s Decision of March 15, 2023 provided that “no costs of these motions are payable to either party”.
20Counsel for the Claimant disagrees that the Respondent was successful on both Motions and submits, firstly, that the Claimant was successful on the outcome of the NEC Witness Motion. The Tribunal observes that the revised witness statement of Ms. Lavan was served very late and proposed that she would provide opinion evidence to the Tribunal. The Tribunal agrees with the submission of counsel for the Claimant that the Respondent was not successful on this Motion as the result of the Tribunal’s Order was that the testimony of Ms. Lavan was limited to the introduction of relevant documents, and the witness could not venture into giving opinion evidence. Ultimately, Ms. Lavan’s evidence, and the NEC documents produced, had a significant impact on the outcome of the Hearing and the Tribunal’s finding in the Claimant’s favour. The Tribunal is of the view that, while the Respondent was successful on the Admissions Withdrawal Motion, the Motion would not have been necessary if the Respondent had complied with its procedural obligations in the first place.
21The Tribunal does not view the Tribunal’s Order of March 15, 2023, that “no costs of these motions are payable to either party”, as displacing the Tribunal’s authority and jurisdiction to determine costs under subsection 32(1) of the Act, as none of the factors which would engage subsection 32(1) were before the Motions Panel. In fact, it is readily apparent from the Decision of the Motions Panel that the costs under consideration were costs pursuant to Rule 23.9 of the OLT Rules, which permits a punitive order of costs to be made against a party where the conduct or course of conduct of the party was unreasonable. The Motions Panel found that neither party had been guilty of unreasonable conduct and declined to order costs. The Supreme Court of Canada determined in its Decision in Alliance Pipelines Ltd. v. Smith, 2011 SCC 7 (“Alliance Pipelines”) that a statutory right to legal, appraisal and other costs is very different from a determination of discretionary litigation costs by a trial judge in that, costs in an expropriation case are actually a component of the award of compensation. In the Alliance Pipelines Decision, Fish, J. cited with approval the Decision of the Alberta Court of Appeal in Thorensen v. Alberta (Minister of Infrastructure), 2007 ABCA 272 concerning the special nature of expropriation costs, which distinguish such costs from discretionary litigation costs:
Thus, a trial judge determining reasonable costs under section 39 [of the Expropriation Act, R.S.A. 2000, c. E-13] is not dealing simply with the usual order of civil costs that flow from litigation, nor does the judge have the same discretion with respect to those costs. A statutory right to legal, appraisal and other costs is something quite different from a determination of discretionary litigation costs by a trial judge, and while the judge must address the issue of reasonableness and special circumstances, these issues are addressed within the context of a recognition that the costs are part of the expropriation award.
22The Tribunal therefore finds that the issue of the Claimant’s expropriation costs was not before the Motions Panel, and that the costs determination made by the Motions Panel has no relevance whatsoever to the issue before the Tribunal on this Motion, which is the quantum of the Claimant’s reasonable costs incurred for the purpose of determining the amount of the compensation payable.
23The amount in the BOC attributable to the two Motions is $55,294. The Tribunal will consider that this total amount is to be equally split between the two Motions. With respect to the NEC Witness Motion, the Tribunal finds that the quantum is reasonable, that the costs were incurred for the purposes of determining the amount of the compensation, and fixes and allows the Claimant’s costs in the sum of $27,647, exclusive of HST. With respect to the Admissions Withdrawal Motion, while the Respondent was successful, the Motion was precipitated by the Respondent’s failure to comply with its procedural obligations. The Tribunal disallows the sum of $6,911.75 and fixes and allows the costs of the Admissions Withdrawal Motion in the sum of $20,735.25. The Tribunal finds that this is reasonable and that the costs were incurred for the purposes of determining the amount of the compensation. The amount fixed and allowed for these two Motions is therefore the sum of $48,382.25, exclusive of HST.
Motion for the Costs of the Adjournment of the Hearing – $21,913
24As stated above, the original Hearing date was adjourned as a result of the unavailability of the Respondent’s factual witness due to illness. The Claimant consented to the adjournment but sought an Order by way of Motion for its costs thrown away. The Motion was heard by the Motions Panel along with the NEC Witness Motion and the Admissions Withdrawal Motion. Counsel for the Respondent objects to the amount clamed for this item on the grounds that, while the Claimant had sought payment of its costs thrown away in the sum of $27,413, the Motions Panel determined that the Claimant’s costs thrown away as a result of the adjournment only amounted to the sum of $5,500. Counsel for the Respondent submits that the Claimant is now in effect seeking to vary that Order of the Motions Panel by increasing it by the sum of $21,913. The Tribunal disagrees. An issue regarding the Claimant’s expropriation costs was not before the Motions Panel. The issue which the Motions Panel was deciding was the quantum of costs thrown away because of the adjournment for which the Respondent was liable to reimburse the Claimant in any event of the cause (i.e., in any event of the outcome of the Merit Hearing). Costs thrown away are by their nature costs for hearing preparation steps which must be repeated due, for example, to the passage of time between the original adjourned hearing date and the rescheduled hearing date. It is obvious from reading the Decision that the Motions Panel found that only $5,500 of the $27,413 in hearing preparation costs was wasted preparation time that Claimant’s counsel would have to repeat in preparation for the rescheduled Hearing. The Motions Panel found that the balance of $21,913 was for hearing preparation work that would not require repetition. In this regard, the Tribunal takes note of the passage in paragraph 90 of the Motions Panel’s Decision of March 15, 2023, which states that Counsel for the Respondent argued, in opposing the Claimant’s request for interim payment of costs thrown away in the sum of $27,413, that “these costs would be covered if the Claimant was successful at the hearing”. The Claimant was successful at the Hearing. The Tribunal rejects the Respondent’s objection, finds that the quantum claimed is reasonable, that the costs were incurred for the purposes of determining the amount of the compensation, and fixes and allows the full amount of $21,913, exclusive of HST.
Claim for Costs of FOI Request – $693
25Counsel for the Respondent submits that it should not be liable for the costs of the FOI Request because the Claimant’s principal should have filed the request without the assistance of a lawyer. The Tribunal notes that the principals of the Claimant immigrated to Canada from Nicaragua and that the English language is their second language. The Tribunal finds that there is no merit in this objection, that the quantum claimed is reasonable, and that the costs were incurred for the purposes of determining the amount of the compensation. The amount of $693 is fixed and allowed in full.
Claim for Costs for Moton for Interim Costs – $1,398
26The BOC contains dockets totalling 3.8 hours to bring a motion for interim costs. The amount claimed is $1,398. Counsel for the Respondent objects to the allowance of this amount as such motion was never brought. The Tribunal agrees and the costs for this item are disallowed.
Claim for Counsel’s time meeting with John Abel – $4,696
27Counsel for the Respondent objects to this item on the basis that Mr. Abel was not called as a witness at the Hearing. The evidence of the Claimant’s appraisal witness, Samuel Linds, was that Mr. Abel provided a written quote to construct the internal loop driveway to cure the Claimant’s damages. Mr. Linds’ opinion as to the quantum of the Claimant’s damages was based upon Mr. Abel’s quote, and it was produced as page 58 of Mr. Linds’ Appraisal Report, which was marked as Exhibit 5 at the Hearing. The Tribunal’s determination of the quantum of the Claimant’s damages for injurious affection was based upon Mr. Linds’ opinion, which was informed by Mr. Abel’s quote. The Tribunal was advised during the evidentiary portion of the Hearing that Mr. Abel was standing by and was available to be called, but ultimately was not as the Respondent advised counsel for the Claimant that it would not be disputing the amount of Mr. Abel’s quote. The Tribunal accordingly finds that this objection is wholly without merit and that the claimed amount is reasonable. The Tribunal finds that the quantum claimed is reasonable, that the costs were incurred for the purposes of determining the amount of the compensation, and the Tribunal fixes and allows the claim in respect of this item in the full amount of $4,696, exclusive of HST.
Claim for Completion of Costs Recovery – $8,634
28Counsel for the Respondent objects to this item, which estimates the Claimant’s future costs to enforce and collect upon the costs Order to be made by this Tribunal. While costs to collect the amount of costs awarded are not costs incurred to determine the amount of the compensation, the Tribunal finds that the claim for an amount for this item should be allowed pursuant to Rule 57.01(1)(0.a) and (0.b) of the RCP, based upon the principle of indemnity and that such a cost would be within the reasonable expectation of the Respondent. The professional time estimate in support of the claim totals 16.5 hours. The Tribunal finds that the amount of this estimate is excessive since the Respondent is a Minister of the Crown. The Tribunal finds that the sum of $3,500, exclusive of HST, is reasonable, and fixes and allows the sum of $3,500 for this item, exclusive of HST.
Preparation of Bill of Costs – $8,403.75
29Counsel for the Respondent objects that the docketed time for preparation of the BOC at 19.75 hours for $8,403.75, is excessive. The Tribunal agrees and finds that 10 hours is a reasonable amount of time for preparation of the BOC. The Tribunal therefore assesses and allows this item in the amount of $4,255, exclusive of HST.
Lehman and Associates – $3,164
30Lehman & Associates is a land use planning firm which provided background and consulting advice to the Claimant. Counsel for the Respondent objects that it should not be liable for this amount because a report was not produced and Mr. Lehman was not called to testify. Counsel for the Claimant responds that the consulting advice was required to prepare a response to the Respondent’s position that the use of the Subject Property for commercial purposes and the existence of the entrance to Highway 7, which was closed by the Respondent, were both illegal. This is confirmed by the invoice of Lehman & Associates produced as Appendix B, Tab1, to the BOC. The invoice describes the services provided as “review and comment on appraisal report, policy review of Niagara Escarpment Plan, discussions with staff planners at NEC regarding history of use, research aerial photos and commentary on planning issues”. In view of the Tribunal’s findings and determination of the issues at the Hearing, the Tribunal finds that this invoice and its amount are reasonable and that the charges were necessarily incurred to determine the amount of the compensation payable. The Tribunal assesses and allows this item in the full amount of $3,164, inclusive of HST.
Post-Judgment Interest
31The Claimant asks that the Tribunal’s Order bear post-judgment interest at the prescribed rate pursuant to section 129 of the COJA. The Claimant asks that post-judgment interest should be calculated from the date of the Tribunal’s Decision on the merits, being November 28, 2023. Rule 23.11 of the OLT Rules provides that awards of costs made by the Tribunal may bear interest in the same manner as orders made under section 129 of the COJA, and the Tribunal so finds.
Summary
32The amounts assessed for professional fees, disbursements, and HST are:
Type of Fee
Fees
Disbursements
HST
Legal Fees
$289,075.50
$5,351.86
$38,213.81
Appraiser
$16,667.58
$2,166.79
Planner
$2,800.00
$364.00
Former Counsel
$6,353.22
$825.92
Totals
$314,896.30
$5,351.86
$41,570.52
TOTAL for fees, disbursements and HST – $361,818.68
Less costs paid – $6,215
TOTAL Amount payable = $355,603.68
ORDER
33The Tribunal Orders that:
a. The Respondent, His Majesty the King in Right of the Province of Ontario as represented by the Minister of Transportation, shall pay the sum of $355,603.68 to the Claimant, 12908 Highway 7 Inc.;
b. The costs of this Motion are fixed in the sum of $7,500, inclusive of HST; and
c. This Order bears interest at the rate of 5.3 per cent per annum, calculated from November 28, 2023.
“Robert G. Ackerman”
ROBERT G. ACKERMAN
MEMBER
Ontario Land Tribunal
Website: www.olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248
The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.