The Claimants
collectively owned two abutting parcels of land in the City of Nepean, which were
expropriated to make way for Highway 416.
Following a determination of the issues
arising out of the expropriation, the Ontario Municipal Board ("OMB") ordered
the Claimants’ costs to be assessed pursuant to section 32 of the Expropriations
Act, R.S.O. 1990, c. E.26. The legal and professional accounts submitted totalled
$321,240.79.
As usual, the focal issue at the
assessment was the reasonableness of the legal fees incurred and claimed. The Ministry of
Transportation (the "Ministry") objected to the fees claimed on the basis that;
a.) some of the claims advanced in respect of legal work were on account for work done
before
the expropriation, and thus had no bearing on the
determination of the compensation
payable,
b.) the number of hours spent by the lawyers who worked on the file was excessive, and
there
was duplication of effort,
c.) the hourly rate charged by the lawyer with primary carriage of the matter was too
high, and
d.) the claim for costs included some $37,400.00 in bonuses paid to the Claimants' lawyer
following the OMB's decision, for which the Ministry argued
it was not liable.
The concerns over hours, duplication, and
rates are commonly raised and dealt with within the unique scenario involved in each case.
These would not render the assessment noteworthy. To claim a bonus is noteworthy, as is
the result. At the conclusion of the seven day assessment hearing, Assessment Officer
Lamoureaux awarded the Claimants over 90% of the total claimed, including an amount for
the bonus and in addition the costs of the assessment hearing itself.
On the issue of the legal fees, while
acknowledging some duplication of effort and some excessive time, Mr. Lamoureaux concluded
the vast majority of the fees claimed were reasonable. Picking up on the OMB's comment
that the conduct of the Ministry had been less than exemplary, Mr. Lamoureaux attributed
at least part of the increased legal cost and delay to the Ministry.
A critical issue for the Ministry, on
account of the legal fees claimed, was its liability for the bonus paid to the
Claimants’ solicitors, following the decision of the OMB. The Ministry argued
vigorously that it was not liable for the solicitor's bonus, and that this aspect of the
claim was unreasonable. It took the position that the assessment of a Claimant’s
costs generally should be construed strictly, since a third party and not the Claimants
themselves would be required to pay.
The Ministry also argued that forcing it
to pay the bonus claimed in this case would violate the intent of section 32 of the
Expropriations Act and would be contrary to public policy. This was a commonly held view,
expressed at may expropriation assessments. Interestingly, the Assessment Officer accepted
the Claimants' position, that "it is entirely appropriate for the solicitors to
adjust their fees to include a bonus for outstanding results achieved …". With
only a moderate discount, Mr. Lamoureaux awarded the Claimants $32,100.00 for the bonus
paid to their solicitor, concluding as follows:
After considering the case law submitted
by both parties, I am satisfied that his matter meets all the criteria which would warrant
the allowance of a bonus. However, in view of adjustments which I will make with respect
to time spent on this matter by the solicitors, as mentioned earlier, I will allow a bonus
of $15,000.00 plus GST in the amount of $1,050.00 on each of the two accounts for a total
of $32,100.00.
The "outstanding results" for
the Claimants at the hearing of this matter before the OMB concerned the compensation
obtained for the two parcels, and in particular the Board’s acceptance of the
appraisal evidence put forward by the Claimants as to the value of certain wetlands on the
property. The Ministry's appraiser separated "developable" land from
"undevelopable" land, assigning a value of $34,400 and $37,435 per acre to the
developable land on the Claimants' respective properties and a value of $5,463 per acre
for the undevelopable land on both properties. The Claimants' appraiser imputed a value of
$30,000 per acre for the entire area of the Claimants' land, which resulted in a higher
"bottom line" figure for the Claimants. The Board adopted the valuation put
forth by the Claimants’ experts and rejected the Ministry's evidence almost entirely.
In the end, Assessment Officer Lamoreaux
factored these results into his determination on costs. The Ministry admitted that the
Claimants' solicitor had done "an excellent job for his clients". Mr. Lamoreaux
observed that the Claimants' solicitor "faced a difficult situation where... the
opposition was determined to do all it could to have the value of the properties
discounted." The bonuses, Mr. Lamoreaux concluded, were justified.
This finding may assist successful
Claimants in the future. Arguably, if lawyers are entitled to bonuses, so could planners,
appraisers, accountants or anyone contributing to an "outstanding result". The
definition of "outstanding result" will no doubt be considered in future
decisions.
As to the costs of the assessment hearing
itself, Mr. Lamoureaux made a $6,000.00 allowance to reimburse the Claimants’
solicitor in the expropriation matter for his time in preparing and attending at the
assessment to justify his accounts. The Assessment Officer observed that such an allowance
may not be appropriate in the case of a taxation between a solicitor and his own client.
However, on the basis of the Claimants’ argument that they would be accountable for
these costs, and since a third party had been ordered to pay, Mr. Lamoureaux concluded it
was fair and equitable in the circumstances to make the allowance as part of the costs of
the assessment hearing.
On appeal, Metivier J. of the Divisional
Court upheld the Assessment Officer’s conclusions. In a very brief endorsement,
Metivier J. observed that while another may have exercised discretion differently, Mr.
Lamoureaux considered the appropriate factors and made no reversible error.
The decision is being appealed to the
Court of Appeal.