EXECUTIVE TIME
Authorities deny claims for "Executive Time" for two main reasons: the lack of evidence of financial loss resulting from time spent by the claimant on the expropriation, and the expectation that the claimant's solicitor will deal with expropriation matters on behalf of their clients.
With respect to evidence of financial loss, in Pay Less Gas Co. (1972) Ltd. v. British Columbia (74 LCR, 81) the British Columbia Expropriation Board stated that for Executive Time claims to succeed there must be evidence of financial loss to the claimant's business as a result of time spent by the claimant (or principals of a firm) on matters arising out of the expropriation. In some cases the Board has denied claims for Executive Compensation, either because there was no evidence of financial loss, or because the claim for Executive Time was already in the Board's award for business loss.
The other reason for denying such claims is the expectation that the claimant's solicitor will assume responsibility for carriage of the matter. As noted in Schwindt v. Ministry of Transportation (27 LCR, 205)
When an owner engages a solicitor much of the burden of the time and expense involved in the conduct of the matter should then shift from the owner to his solicitor.
In Whitechapel Estates Limited v. British Columbia (78 LCR, 32) limits were placed on what constituted Executive Time; time spent by the claimant meeting with counsel, meeting with expert witnesses, attending discoveries, and reviewing documents in preparation for the claim were among the items that were not considered compensable. Executive Time was deemed to be time spent on the direct consequences of expropriation.
Executive Time, if accepted by the Board, may in some cases be considered costs, rather than disturbance damage.
There are a number of land compensation cases that support the payment of executive compensation including:
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Pitts v. Ministry of Transportation and Communication (38 LCR, 361)
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Parkins v. Ministry of Transportation and Communications (32 LCR, 182)
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Captain Developments Ltd. v. Ontario (50 LCR, 176)
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Gray Coach Lines Ltd. v. City of Hamilton (1 LCR, 181)
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Pay Less Gas Co. (1972) Ltd. v. British Columbia (74 LCR, 81)
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415528 B.C. v. Greater Vancouver Sewerage and Drainage (79 LCR, 81)
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Linden v. Toronto (79 LCR, 288)
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There are also a number of cases where such compensation was not awarded:
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Beamish v. Regional Municipality of York (23 LCR, 259)
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Calgas Investments Ltd. v. Regional Municipality of York (29 LCR, 297)
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Bill's Frontier Restaurant Ltd. v. British Columbia (53 LCR, 175)
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L'Abri B.C. Ltd. v. School District No. 34 (Abbotsford) (52 LCR, 161)
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Vision Homes Ltd. v. Nanaimo (54 LCR, 103)
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Kliman v. School District No. 63 (Sannich) (54 LCR, 242)
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Bayview Builders Supply (1972) Ltd. v. British Columbia (59 LCR, 263)
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Sequoia Springs West Development Corp v. British Columbia (71 LCR, 97)
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Hertel v. British Columbia (62 LCR, 3)
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Roadmaster Auto Centre Ltd. v. Burnaby (City) (62 LCR, 124)
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Pentacostal Assemblies of Canada (in trust) v. British Columbia (66 LCR, 275)
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Some interesting, and sometimes contradictory, decisions by the Board related to Executive Compensation include the following:
The case of Parkins v. Ministry of Transportation and Communications involved the expropriation of 53 acres of land from a farm by the Ministry of Transportation. In their notice of arbitration the claimants sought — in addition to other compensation — disturbance damages pursuant to S.13(2)(b) for: "A great deal of her time consulting with her professional advisors, and in meeting with the respondent, both to mitigate her loss and to prepare her claim".
The time lost by the claimants did not involve any loss of wage; however, the Board felt that this was irrelevant as:
Loss of wages is not an essential element of proof in a claim for personal losses usually referred to as Executive Time...It would be unfair to deprive the applicant of an award under this head simply because she was not a wage earner
The Board agreed to compensate the claimant for Executive Time in this case, but only for time flowing from the natural consequences of the expropriation — not for the time spent by the claimant at the Hearing of Necessity. Based on the oral testimony of the claimant and his sister, including the claimant's diary chronicling time spent, the Board awarded $6,000 (the ruling made no reference to an hourly rate). Time claimed by a relative of the claimant was, however, denied.
In Gray Coach Lines Ltd. v. City of Hamilton, the Board ruled that Gray Coach — whose lands were expropriated by the City of Hamilton — could be compensated for time spent by in-house legal staff that were involved in settling compensation; this award was to be over and above legal costs. The costs were calculated on the basis of the hourly rate of solicitors.
In Captain Developments Ltd. v. Ontario, the Ministry of Transportation expropriated 4.08 ha of land on Highway 404 to construct a ramp. Captain Developments claimed $26,865 for the time of one of its executives at a rate of $100.00 an hour to cover the cost of dealing with the Ministry, consultants, and lawyers, and preparing for hearings. The Board accepted this claim without any evidence of Mr. Edward's salary stating: "$100 per hour seems not unreasonable for a person of his experience".
In Pay Less Gas Co. (1972) Ltd. v. British Columbia, the claimant operated a gas station that was expropriated and as a consequence relocated. The claimant's Manager of Real Estate and Development spent time finding an alternate site for the relocation of this station. The Board determined that it was reasonable to infer some loss to the claimant for this time spent and accordingly awarded the claimant $20,000.
In some of the following cases executive compensation was not awarded.
In Beamish v. Regional Municipality of York (23 LCR, 259) the Regional Municipality of York expropriated land from a property used by a construction company. The claimant sought disturbance damage of $93,000, for compensation of its various executives and employees who were involved in various discussions and negotiations with the authorities.
The claimant documented the meetings involving company executives and the time spent, and then applied hourly rates; these hourly rates were double what they were paid in salaries by their company. The claimant justified these high rates by claiming that in lieu of their own employees, consultants whose fees would be similar to the costs claimed would have attended these meetings.
The Board was of the opinion that an excessive number of hours were claimed and that there was no certainty that the hours claimed related to this expropriation matter. The Board also noted that the company showed no loss of profit during the entire period. The claim for Executive Time was dismissed in its entirety.
The claim for executive compensation was also denied in Calgas Investment Ltd. v. Regional Municipality of York. The case involved the expropriation of 1.48 acres of land from Calgas Investments Ltd for the construction of a water tower. The subject lands were proposed for a 20 lot subdivision, for which servicing capacity was not yet available — and hence the imminence of development was in question. The claimant made a modest request for Executive Time — $730.87 based on an hourly rate of $25.00. The hearing officer noted there was the lack of evidence that the claimant had made $25/hr for some years. The Board denied this claim stating such damages must be proven.
CONCLUSIONS
Executive Time may, in some circumstances, be a legitimate head of compensation. However, as noted in Whitechapel Estates Limited v. British Columbia : "The measure of compensation is not how much time a claimant or a principal may have spent on an expropriation, but rather whether the claimants suffered a financial loss".
Compensation for Executive Time should obviously not involve double recovery for work already undertaken by the claimant's lawyers or consultants.
From an authority's perspective — and based on the case law — it appears that where compensation is to be provided for Executive Time, it should not include:
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Time for matters that are not directly related to the expropriation (Hearings of Necessity, appeals to other tribunals).
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Time for individuals with no direct connection to the land (ie. friends or relatives of the claimant).
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Time for matters already compensated, including business loss.
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Time for claimants/principals that does not result in a financial loss for the claimant or business.
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-Mr. S. Robert Hazra MICP, is a Senior Arbitrations Officer, in the Property Office, for the Ministry of Transportation
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