Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: May 12, 2026

CASE NO(S).: OLT-24-000081

PROCEEDING COMMENCED UNDER subsection 26(1) of the Expropriations Act, R.S.O. 1990, c. E.26, as amended

Claimant: Onnki Donburi Ltd., Tae Yeun Lee, and Jung Yeun Lee

Respondent: City of Toronto

Description: Determination of compensation

Reference Number: 02445385

Property Address: 40-42 Hayden Street, Toronto

Municipality: Toronto

OLT Case No.: OLT-24-000081

OLT Lead Case No.: OLT-24-000081

OLT Case Name: Onnki Donburi Ltd. et al v. Toronto (City)

PROCEEDING COMMENCED UNDER section 32 of the Expropriations Act, RSO 1990, c. E.26

Request by: Onnki Donburi Ltd., Tae Yeun Lee, and Jung Yeun Lee

Motion for: Order Awarding Costs

Costs sought against: City of Toronto

Heard: March 5, 2026 in person at the Ontario Land Tribunal, 655 Bay Street, Toronto

APPEARANCES:

Parties	Counsel
Onnki Donburi Ltd., Tae Yeun Lee, and Jung Yeun Lee (“Claimant”)	J. Doherty, J. Minnes
City of Toronto (“City”)	E. Rizwani

DECISION DELIVERED BY WILLIAM R. MIDDLETON AND FINAL ORDER OF THE TRIBUNAL

Link to Order

INTRODUCTION

1This Motion for the adjudication of costs (“Motion”) was made by the Claimant pursuant to section 32 of the Expropriations Act, RSO 1990, c E.26 (“Act”) and Rule 26.19, 26.20 and 26.21 of the Tribunal’s Rules of Practice and Procedure (“Rules”). Prior to the Motion, the Parties had settled on April 29, 2025, the Claimant’s claims for compensable damages arising from the expropriation carried out by the City (“Expropriation”) pertaining to the property located at 40-42 Hayden Street, Toronto, where the Claimant operated a restaurant as a commercial tenant under a lease.

2Given the settlement, no hearing was held by the Tribunal to determine the compensation claims under the Act. The Parties originally filed materials for this adjudication in writing pursuant to the Rules. Following its review of those materials, the Tribunal then directed an in-person hearing which was held on March 5, 2026, at the Tribunal’s offices (“Hearing”).

3The materials delivered for the Motion (collectively, totalling several thousands of PDF pages) were:

(a) Claimant’s Notice of Motion for Costs Assessment ;

(b) Claimant’s Motion Record;

(c) Claimant’s Factum;

(d) Claimant’s Costs Brief;

(e) Claimant’s Supplementary Motion Record;

(f) Claimant’s Supplementary Book of Authorities;

(g) Claimant’s Third Supplementary Costs Brief;

(h) Claimant’s Cost Summary Outline;

(i) Claimant’s Written Summary of Oral Submissions;

(j) Claimant’s Reply Chronology (long and shorter versions);

(k) City’s Motion Record

(l) City’s Request for Expropriation Costs;

(m) City’s Cost Motion Summary; and

(n) Minutes of Settlement between Claimant and City.

ISSUES

Analysis of Relief Sought and Arguments Made on the Motion

4The Claimant seeks recovery of legal, appraisal and other costs up to and including the delivery of the voluminous materials described in paragraph [3] above prior to the Hearing as set out in the table below, plus interest calculated pursuant to the Courts of Justice Act, RSO 1990, c C.43, from the date of the settlement. The Claimant also seeks an Order for payment of fees and costs incurred in relation to the Hearing.

[5]

In its written Motion summary delivered shortly before the Hearing, the City sought to reduce the Claimant’s alleged entitlement by “…a total reduction of $273, 781.38” along with a further reduction of 50% of all amounts being claimed by the Claimant in respect of this Motion. Presumably, this 50% reduction would then apply to the $224,682.78 in costs being the total of the amounts noted in the table above for the Supplementary Costs Brief, the Second Supplementary Costs Brief and the Third Supplementary Costs Brief. At the Hearing, the City’s counsel also suggested a commensurate reduction of the Claimant’s costs for the oral Hearing (which have not yet been quantified). Finally, in the same written Motion summary, the City argued that the Tribunal should award:

“Any further reduction in the Bill of Costs as the Tribunal sees fit based on the unreasonableness of Claimant’s counsel billing 1,200 hours for a matter with no hearings or motions which was settled after one 1-day in-person OLT led mediation.”

6In its originally filed Motion materials, the City also sought an Order against the Claimant for the City’s own costs. However, in responding to the Tribunal’s enquiry at the end of the City’s oral argument at the Hearing, counsel for the City withdrew that request. This was appropriate, since there is no basis or support provided for any costs award in favour of the City and none was contemplated by the settlement reached between the Parties (as is noted in more detail below in paragraph [17]).

7Prior to the Hearing, the Tribunal had encouraged the Parties to consider mediation of this costs dispute. Although the Claimant expressed willingness to do so, the City refused to proceed to mediation. While the Tribunal is reluctant to direct Parties to an expropriation costs dispute to engage in mediation, the Tribunal does strongly encourage this. Given that many expropriation proceedings have been successfully resolved through mediation in recent years, there is no reason to doubt that similar results could be achieved in expropriation costs disputes. The Tribunal now features a mediation roster of experienced members of the expropriation bar to assist parties and their counsel in resolving such matters. Costs motions increase expenses and delay for both Parties and mediation can often be a much faster and less expensive alternative.

8One of the reasons that the Tribunal directed an in-person Hearing was due to the inflammatory content contained in the Motion materials filed by the City’s counsel. Some examples were the following (below emphasis added):

(a) More than two counsel simultaneously represented the Claimant and acted on the matter, including two senior counsel, which significantly and unreasonably increased costs incurred by the Claimant;

(b) It is evident in this case that the Claimant’s counsel expended more time, and billed more hours, than necessary to arrive at a determination of compensation… The City states that the Claimant and its counsel did so due to an acute awareness that, in the normal course in accordance with the Expropriations Act, the public purse will “foot the bill”;

(c) Respectfully, if counsel and their client expended as much time as they claim to have spent to determine compensation then they spent far too much of it. In the present case, it would be unreasonable to make the taxpayer bare [sic] the burden of the Claimant’s conduct;

(d) It seems to have become common practice in this case for the Claimant to assign two or more counsel to simultaneously work on the matter, and to simultaneously attend all meetings and other procedural steps in the claim. This practice has burdened taxpayers with a significantly higher bill of costs related to this particular expropriation claim;

(e) …Adding up each of these docket entries, a total of $65,613.00 was billed for internal correspondence and meetings between the many assigned Claimant’s counsel… The City states the entire amount of $65,613.00 must be disallowed as a frivolous expenditure created only because the Claimant assigned more than one counsel to the file. These costs are an unreasonable expenditure incurred because the Claimant believed it would not face the financial consequence of its decision as opposed to being necessary to determine compensation;

(f) It is patently unreasonable for two senior counsel at a large national law firm to bill time on this simple expropriation matter;

(g) When experienced counsel expend time working on a claim for interim compensation, they did so knowing that no such entitlement exists, and that surely the City and Tribunal will reject paying such compensation or granting such relief, as the case may be. Therefore, the Claimant’s counsel expended time and money on the incorrect presumption that the taxpayer must foot the bill, and not their client;

(h) The City submits the entire amount of $30,776.00 in this respect should not be paid by the taxpayer to the Claimant. This amount constitutes a frivolous expenditure undertaken only because the Claimant incorrectly presumed the financial burden for these costs rests with the taxpayer;

(i) The costs incurred by the Claimant are a clear example of attempting to advance frivolous arguments and unjustifiably allocating its resources and directing its counsel’s time to “run up the bill” on the incorrect assumption that the Expropriations Act ensures costs are to be paid from the public purse regardless of the Claimant’s unreasonableness; and

(j) Simply put, the Claimant’s Costs Brief demonstrates that they have attempted to abuse the costs provisions of the Expropriations Act.

9As might be expected, the repetitive allegations described in paragraph [8] above inspired a very spirited defensive response from the Claimant’s counsel both in writing and during oral argument. Again, this significantly added to the time and expense associated with this Motion and Hearing.

10At the Hearing, when pressed by the Tribunal as to the evidentiary basis for the startling allegations set out in paragraph [8], counsel for the City adopted a more temperate tone and largely backed away from these criticisms. Counsel also admitted that they had no such supportive evidence to present.

11The Tribunal certainly understands that the City is – as indeed would be every other expropriating authority – justifiably concerned about the quantum of costs incurred by claimants in proceedings under the Act. However, the Tribunal strongly cautions against making unsupported allegations to portray high costs as being the result of deliberate efforts by a claimant or its legal counsel to ‘run up the bill at the expense of the taxpayer’. Costs proceedings under Rules 26 and section 32 of the Act should be treated like any other adjudicative proceeding before the OLT: allegations and claims should be based on fact and opinion evidence. Tribunal proceedings should not be seen as a forum to make vague, unsubstantiated, rhetorical accusations of ill motive. This does not assist the Tribunal in its determinations and this also unnecessarily increases the costs of these proceedings. These problems are exacerbated when such unsupported allegations are then withdrawn only after all materials have been prepared and filed.

12When a party to an expropriation costs adjudication strongly believes that excessive or unnecessary time charges or disbursements have been incurred, it should marshal appropriate fact and opinion evidence to support its contentions.

13In terms of fact evidence, expropriation authorities ought to consider producing evidence of their own inside or outside counsel’s dockets and costs. Doing so will enable the Tribunal to engage in some form of comparative analysis – although there might be good reasons why the costs of an authority and a claimant might differ in the circumstances of each case. However, without the benefit of any comparative analysis, the Tribunal will then be forced to rely on its own experience in reviewing legal costs invoices. As noted at the Hearing, this Vice Chair has decades of experience in reviewing legal costs in a wide variety of litigation proceedings throughout North America. Nonetheless, the Tribunal would still have benefitted from learning how the City’s internal legal efforts and dockets could be compared to those provided by the Claimant’s law firm – particularly where the City is sharply criticizing that firm’s ‘excessive docketing’ practices.

14Opinion evidence could also be tendered in an expropriation cost proceeding under the Act and the Rules. In some circumstances, an expropriating authority or a claimant could retain independent experienced expropriation counsel to offer opinion evidence concerning costs and disbursements claims made by a claimant. In fact, this has occasionally been done in past costs adjudications / assessments under the Act.

15Reliable independent opinion evidence offered by one or both parties would assist the Tribunal just as expert evidence does in the wide variety of other proceedings conducted by the Tribunal. Almost as importantly, the exchange of independent opinion evidence of this nature might also assist the decision-makers of both parties to an expropriation costs dispute to better assess the strength of their adjudicative position – and may promote a negotiated or mediated resolution. Of course, the opinions should not be constructed or presented in a way that might be seen to displace the exercise of the Tribunal’s discretion in making the ultimate determination. As a matter of clarity, the Tribunal is not directing parties in all future expropriation costs adjudications to now routinely commission such opinion evidence – this is simply one option to be considered.

16The absence of proper fact or opinion evidence may create an impression that costs adjudication proceedings before the Tribunal are sometimes rooted in other irrelevant motives – or are being pursued as a seemingly low-cost alternative to an authority having to make a ‘hard’ decision to pay or for a claimant to accept a lower amount than claimed. In any event, costs adjudications such as this proceeding, involving many thousands of pages of written materials, submissions and case law are certainly not ‘costs-free’ to either the Tribunal or the Parties. Ironically, as noted above, a protracted costs adjudication will often substantially increase the amount that an expropriating authority will itself incur and then eventually be ordered to pay to a claimant.

Costs Adjudication Analysis and Conclusions

(i) The Contract of Settlement

17Interestingly, in light of the City’s now-abandoned claim for its own costs in its Response to this Motion, there is no mention in the Minutes of Settlement reached by the Parties for:

(a) any liability of the Claimant in respect of the City’s costs;

(b) any resultant requirement for the City to submit a bill of costs to the Claimant for which the Claimant would be potentially liable to pay; or

(c) any agreed referral to the Tribunal or to ‘an assessment officer’ concerning the determination of the City’s costs.

18Thus, in terms of the costs issue, the material operative clause of the Minutes of Settlement was (below emphasis added):

Subject to the commencement of the dispute resolution process in respect of Costs (as defined below) as contemplated herein, it is understood by the Parties that, in addition to the Total Compensation, the City shall reimburse the Claimant for its reasonable legal, appraisal, and other costs (including disbursements and harmonized sales tax) actually incurred by the Claimant in the determination of compensation (the “Costs”), in a quantum to be agreed upon between the Parties or as determined by an assessment officer or the Tribunal if the Parties cannot agree, pursuant to Section 32(1) of the Act

19‘Total Compensation’ in the Minutes of Settlement was expressed as follows (below emphasis added):

The Parties acknowledge and agree that the Total Compensation is comprised of the following amounts:

(a) The sum of $1,190,000.00 (inclusive of HST) in Canadian funds as full and final compensation for any and all claims the Claimant may have pursuant to the Act resulting from the Expropriation;

(b) The sum of $110,000.00 (inclusive of HST) in Canadian funds as full and final compensation for any and all debts and liabilities of the Claimant to AMJ, inclusive of interest payable to AMJ, arising from AMJ’s moving and storage of the Claimant’s commercial restaurant equipment and material following the Expropriation; and

(c) The sum of $260,000.00 (inclusive of HST) in Canadian funds as full and final compensation for any and all debts and liabilities of the Claimant to The Manufacturers Life Insurance Company (“Manulife”) arising from the commercial lease, dated October 17, 2022, between the Claimant and Manulife for suite 122 at the Manulife Centre located at 55 Bloor Street West, in the City of Toronto.

…The Claimant and the City agree that the remaining amount of Total Compensation owing to the Claimant as of the date of this Agreement, being the sum of items described in Section 5(a) and Section 5(c), following payment by the City directly to AMJ of $110,000.00 on December 13, 2024 as agreed by the Parties, is $1,450,000.00 in Canadian funds (the “Remaining Payment”)…The Remaining Payment shall be paid by the City to the Claimant by no later than 60 days after execution of this Agreement.

20The underlined passages in paragraph [19] demonstrate that both the City and the Claimant agreed to a very specific allocation of the total compensation paid by the City. The Tribunal found this to be relevant since, despite this, the City’s counsel at the costs motion hearing argued that the efforts incurred by the Claimant’s counsel in seeking the AMJ and Manulife costs as ‘interim compensation’ were unwarranted and unreasonable.

21The Tribunal is not persuaded by these arguments, partly because the City ultimately paid a substantial portion of those costs as part of the settlement even though it denied the repeated requests made by the Claimant’s counsel to pay them as interim advances. Thus, the City essentially courted the risk of increased efforts and expense by the Claimant’s counsel by denying interim payments to the Claimant. Certainly, it was free to choose that strategy. However, it cannot now credibly argue that those efforts were completely unjustified.

(ii) The Tribunal’s Assessment of Reasonability

22In the absence of the type of evidence discussed above, the Tribunal is left to review the bill of costs, docket details and disbursement invoices submitted by the Claimant in light of the arguments made by both Parties’ counsel. This is a discretionary exercise aimed at assessing the reasonableness of the claimed costs. This is to be carried out in keeping with the principles set out by the Supreme Court of Canada in Dell Holdings v. Toronto Area Transit Operating Authority, [1997] SCR 32 and in several past Decisions of this Tribunal.

23The City argued in its oral and written submissions that the practice of having two or more counsel working (and billing) on an expropriations matter is unreasonable. Once again, no basis for this position was identified. Instead, the City presented this as a self-evident proposition. As noted above, had the City been able to establish that its own legal department – or alternatively an outside firm specializing in expropriation cases – only ever assigned one lawyer for certain tasks, its argument might be more compelling. However, there was no such evidence before the Tribunal. There was evidence from the Claimant’s materials which appeared to show that multiple City lawyers worked on this proceeding but, of course, no docket entries to show what occurred on a task-by-task basis.

24It has been the Tribunal’s past experience, derived from the review of many law firm invoices involving other expropriation proceedings, that it is not unusual for two or more lawyers to docket time for shared work efforts. Whether this is reasonable will depend on the circumstances of each particular case. The City’s bare legal argument has simply not convinced the Tribunal that it was unreasonable in this case.

25The City also cited a recent Decision of this Tribunal (and this Vice Chair) to support its position: Kareem George Saikaley v. Ottawa (City), 2025 CanLII 5384 (ON LT) (“Saikaley”). The Tribunal agrees that the general statements made in Saikaley remain relevant to this costs adjudication:

“…The Tribunal accepts that the relevant terms of its mandate and discretion to determine costs under the Act includes the discretion and jurisdiction afforded to assessment officers and neither Party to this Motion has argued otherwise. Thus, this Tribunal may decide to fix the sum of costs payable and in doing so, may also choose to apply the principles of quantum meruit…

…as a general principle, the Tribunal is and ought to be cognizant of the realities and vagaries of expropriation litigation and must be careful not to in effect ‘penalize’ the Claimants for testing their claim through the underlying proceedings or, for that matter, the City for defending them..

…the Tribunal’s view is that the reasonableness standard applies and that the costs at issue must be assessed based on the particular circumstances of each case. There are no binding rules to be derived from the observations made above that serve to restrict the Tribunal’s discretion in this case or in future proceedings.”

26On the other hand, the Tribunal was not persuaded that the excerpts from other costs jurisprudence referred to by the City are applicable here. Some of those cases involve costs determinations made after a full hearing when the conduct of the parties, and the merits of their positions taken prior to and throughout the hearing was demonstrated. As noted, this is not the situation here: no hearing was held and the relative strengths and weaknesses of each Party’s positions were never tested and assessed by the Tribunal. Other jurisprudence relied on by the City were decisions of assessment officers (one more than 40 years old) containing statements of views about the ‘public purse’ that are neither useful nor binding here. As stated above, the City conceded during oral argument that it had no credible evidence upon which it could be concluded that the Claimant’s law firm acted in a way that demonstrated an abuse of public funds – and that allegation was abandoned by the City at the Hearing.

CONCLUSIONS

27Upon assessing the totality of the evidence put forward by the Claimant’s counsel and by the City, and after conducting a careful, detailed review of the submitted fee dockets and disbursements of the Claimant’s law firm, and following the full consideration of the arguments made both orally and in writing by the Parties, the Tribunal reached the following conclusions:

(a) There is some duplication of time and activity by multiple lawyers of the Claimant’s law firm Gowlings (WLG Canada) LLP but the Tribunal disagrees with the City’s bare allegation that 1200 hours is somehow prima facie unreasonable;

(b) Given the protracted disputes between the City and the Claimant’s counsel which occurred during the conduct of this proceeding, it is unsurprising that the Claimant’s counsel expended a great deal of time and effort on behalf of its client in preparing for this Motion and Hearing. However, the Tribunal in exercising its discretion finds that some of the time expended was excessive and therefore unreasonable;

(c) Had the City not pursued the unsubstantiated allegations described in paragraph [8] above, it is apparent to the Tribunal that much less time and expense would have been incurred by the Claimant in respect of this Motion and Hearing;

(d) Subject to the above findings in (a) and (b), the time spent by the Claimant’s lawyers in pursuing interim compensation before the settlement was reached was understandable in terms of protecting the best interests of the Claimant and was reasonable for the reasons otherwise expressed in this Decision;

(e) Although it is possible that the efforts made by the Claimant’s counsel in prosecuting this case may have exceeded those made by the City’s legal department, the Tribunal was unable to evaluate this because the City chose not to provide any records of its own incurred time. In any event, this would be unsurprising given that the Claimant had never before been involved in an expropriation case and the City may be viewed as a ‘sophisticated’ expropriation litigant which has developed considerable expertise and efficiencies;

(f) By the time a settlement was reached, the Parties (or at least the Claimant) had largely completed preparations for a full hearing although ultimately none was required due to a successful mediation – which itself required substantial preparation;

(g) Insofar as the City’s arguments that this matter was ‘straightforward’ are concerned, the Tribunal is not in a position to fully assess the complexity of this proceeding since this costs adjudication did not involve a review of (i) the reports of the expert witnesses; (ii) the transcripts of the discoveries; (iii) the full extent of all productions made by the Parties; or (iv) any analysis of the merits of the case. The Tribunal does not conduct an enquiry into the full merits of the Claimant’s case nor of the City’s defences in a costs adjudication under Rules 26.19 b. That type of evaluation can occur only if a full hearing is completed as is contemplated by Rules 26.19 a.;

(h) After its review of the materials submitted for this Hearing, the Tribunal also determined that there is no basis to reduce the quantum of costs on the grounds that the case did not involve ‘novel or difficult issues of law’ or ‘exceptional circumstances’ as alleged by the City in argument or on the alleged basis that the Claimant made ‘rash business decisions’ or ‘failed to mitigate its losses’ – again, there is no proper evidentiary record before the Tribunal pertaining to these allegations;

(i) Further to points (g) and (h) above, as a general point, Parties to a Rules 26.19 b motion should avoid legal advocacy about “the merits” of the underlying case because it should be clear that the Tribunal is unable to properly and fairly evaluate such assertions. Cost adjudications are not an opportunity to ‘litigate’ the substantive issues of a case that the Parties have instead chosen to resolve without a hearing;

(j) The Tribunal determines that the legal fee component of the Claimant’s claims as billed and recorded by Gowlings (WLG Canada) LLP shall be reduced as is reflected in the Orders made below; and

(k) No reductions shall be made in respect of any of the claimed disbursements or of the invoices of any other professional service providers that are summarized in paragraph [4] above.

ORDER

28THE TRIBUNAL ORDERS THAT:

(a) The City of Toronto (“City”) shall pay to Onnki Donburi Ltd., Tae Yeun Lee, and Jung Yeun Lee (“Claimant”) costs in the amount of $1,183,919.75 (as described in paragraph [4] above), LESS the following reductions:

(i) 15% (fifteen percent) reduction of the fees of Gowlings (WLG Canada) LLP (“Gowlings”) in the amount of $656,784.88, being a reduction in the amount of $98,517.73; and

(ii) 10% (ten percent) reduction of the following fees of Gowlings: $103,798.98; $50,873.73; and $77,010.07, being a further reduction in the amount of $23,168.27.

(b) The City shall also pay to the Claimant the reasonable costs of the in-person hearing event conducted on March 5, 2026, in an amount as agreed upon by the Parties or as further adjudicated by this Tribunal in a written Motion under Rule 26.19 of the Tribunal’s Rules of Practice and Procedure (the “Rule”);

(c) Interest shall be paid by the City on the total costs payable to the Claimant pursuant to the above Orders as calculated from the date of this Decision in an amount as agreed upon by the Parties or as adjudicated by this Tribunal in a written Motion under the Rule; and

(d) This Vice Chair shall remain seized of all matters arising from the above Orders and any further motions or hearings in this proceeding.

“William R. Middleton”

WILLIAM R. MIDDLETON VICE-CHAIR

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.