Casual Legal: Legal costs in expropriations

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.  

By Greg Weber 

Reynolds Mirth Richards Farmer LLP 

Alberta Municipalities Casual Legal Service Provider  

One of the unique aspects of expropriation law is that expropriating municipalities are required to pay for the reasonable legal fees incurred by owners relating to the expropriation. This right of owners has been broadly interpreted by the courts and the Land and Property Rights Tribunal. For example: 

• Section 39 appears to only require authorities to pay for costs incurred “for the purpose of determining compensation”. However, this has been interpreted very broadly such that most legal work performed as a result of the expropriation would be covered by this provision, even if the legal work does not directly relate to the determination of compensation per se. For example, the Court of Appeal recently found that the legal costs incurred for a court application to extend the date the authority may take possession of the land are covered by section 39 even though the issue of possession does not directly relate to compensation.
• The bare wording of the Expropriation Act also suggests that it is only at the end of the matter that the authority would need to pay for the owner’s legal and appraisal costs. However, case law has developed to permit an owner to be paid for its legal costs on an interim basis. Although there is no set rule, the typical custom has been to pay for 75% of the face value of the costs with the remaining 25% to serve as a buffer for any potential unreasonable legal fees to be settled or determined at the end of the matter.
• The Court of Appeal in Ravvin Holdings Ltd. v Calgary (City), 1992 ABCA 262 (CanLii) has confirmed that the costs of an appraisal even before expropriation proceedings commence would be recoverable by an owner; the same logic holds true for legal fees.
• When a dispute over the reasonableness of legal costs arise, even the owner’s legal fees for bringing an application for payment would also typically be the responsibility of the municipality. 

When considering whether to expropriate, it is worth bearing in mind that the costs will be much greater than the market value of the land. This should be carefully considered in deciding what the municipality is prepared pay to resolve land acquisition disputes. 

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1.800.661.7673 or email casuallegal [at] abmunis.ca (casuallegal[at]abmunis[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please contact riskcontrol [at] abmunis.ca (riskcontrol[at]abmunis[dot]ca), or call 310.MUNI (6864) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.