Lonely Oak

Lonely Oak

Friday, January 31, 2014

Sask Court of Appeal orders solicitor-client costs for landowner wrongfully expropriated

The appellant succeeded in obtaining an order in the Court of Queen’s Bench quashing a municipal bylaw expropriating a portion of his farm land. In consequence, he asked the Chambers judge to order the municipality to pay him the costs he had incurred in having the bylaw set aside. His solicitor-client costs, he said, amounted to $64,498.92. The Chambers judge declined to award him costs on a solicitor-client basis and instead, awarded him the fixed sum of $3,000 payable by the municipality. He then brought an appeal to the Court of Appeal for Saskatchewan.

Saskatchewan courts had already confirmed that it is within the discretion of the Chambers judge to award solicitor-client costs in the context of expropriation and related matters.  The Court of Appeal in this decision noted that, while there was no authority for the proposition that solicitor-client costs must be awarded in expropriation cases, "there is, however, a substantial body of literature suggesting, as a matter of fairness, that persons whose private land has been taken from them by means not of agreement but of compulsory expropriation should generally be able to recover their reasonable legal and other costs, responsibly incurred, in responding to the expropriation."

The Court of Appeal remitted the matter back to the Chambers judge to assess the landowner's reasonable solicitor-client costs, concluding: "The appellant’s land was taken from him through no fault on his part pursuant to a process in which he had no input. As it turns out, the land was unlawfully expropriated, yet the appellant had to go to court at his expense to establish the wrongdoing and recover his land. As in Sask Water, equity cries out that the appellant should get some relief."

Read the decision at: Goodtrack v The Rural Municipality of Waverley No 44.

Tuesday, January 28, 2014

Inter-generational farm sale agreement rectified by Court of Appeal

A father and mother sold their farming business as a going-concern, including all real and personal property, to their son and daughter-in-law.  Everyone signed a memorandum of agreement outlining the terms of the transfer.  The memorandum listed various ways in which the purchase price could be satisfied, including a vendor take back mortgage for the real property.

Following the father's death, the mother brought an action for rectification of the memorandum on the basis that the total purchase price was incorrectly recorded; it was stated to be $222,444, which was $115,000 less than the fair market value of $337,444.  The mother testified at trial that the sale of the farming business was intended to be at fair market value.  Of note, the mother's action proceeded only against the daughter-in-law, who had by then separated from the son.  The son did not contest the request for rectification, and summary judgment was obtained against him.

The trial judge refused to grant rectification on two bases: 1) the mother had failed to meet the standard of proof for rectification, which was "convincing proof"; and, 2) the parties did not have a common intention as to the amount of consideration for the farm business at the time that they executed the agreement.

The Court of Appeal disagreed and granted the rectification, concluding: "Applying the ordinary civil standard of proof, and considering the surrounding documentary and oral evidence as a whole, in my view, the requirements for rectification based on common mistake are met. The parties had a common intention to enter into a transaction for a total selling price at fair market value, the fair market value is clear, and the fair market value was incorrectly expressed in the documentation. Unless rectification is granted, [the daughter-in-law] will be unjustly enriched."

Read the decision at: McLean v. McLean.

Thursday, January 23, 2014

OMB declines to award landowner pre-expropriation costs where expropriation did not proceed

The City of Hamilton moved successfully for the dismissal of expropriation-related Notices of Arbitration and Statements of Claim on the basis that the Ontario Municipal Board (OMB) had no jurisdiction to hear the matters; no expropriations had taken place.

The proposed expropriations related to construction in Hamilton for the 2015 Pan American Games, and the landowner claimants had retained counsel to advise them with respect to the land acquisition process.  The City and the landowners then entered into negotiations, and when offers were refused by the landowners, a notice of application for approval to expropriate was served.  However, not longer after that notice was sent the City decided that it did not require the properties in question, though it was still open to purchasing the properties for the amounts previously offered.

By that time, the landowners had incurred legal costs and forwarded to the City a Bill of Costs.  They then served Notices of Arbitration and Statements of Claim to commence a claim to the OMB for consequential damages arising from the City's abandonment of the expropriation.

The City asked the OMB to throw the claims out, which the OMB did.  The OMB confirmed that pre-expropriation costs are compensable when there is an expropriation, but found that costs are not generally compensable under the Expropriations Act where there is no expropriation.  The OMB decided that this was not a circumstance in which it could exercise its discretionary powers to find that the term "expropriation" applies to the overall process for the taking of land (as had been argued by the landowners) and not just to an expropriation commenced by way of a formal Notice of Expropriation.

The OMB concluded:

In the absence of a formal registered expropriation, an expropriating authority should not be bound to compensate for damages or costs in a case where there is a potential for an expropriation. Furthermore, in the absence of a taking of land, negotiations for the purchase of the lands does not, and should not, attract a claim for costs, merely because the potential buyer has the power, if fully exercised, to expropriate.

Landowners in Ontario should question whether to engage in any negotiations whatsoever with an expropriating authority prior to receiving a Notice of Expropriation without an agreement in place requiring the authority to pay the landowner's legal costs of the negotiations.

Read the decision at: Marsdin v. Hamilton (City).

Friday, January 17, 2014

Tuesday, January 14, 2014

A draconian administrative monetary penalty system

Last December, the Canadian Agricultural Review Tribunal (CART) set aside a Notice of Violation served by the CFIA as a nullity.  The party charged was accused of having possessed or disposed of an animal or thing known to be imported illegally, contrary to Section 15 of the Health of Animals Act; she had imported a horse from the US.  Under the Administrative Monetary Penalty (AMP) Regulations, the violation alleged is classed as "very serious" and comes with a $10,000 penalty.

In making a decision in the case, CART member Bruce La Rochelle did not have to consider the evidence of either party because he found that the proceedings were illegitimate from the beginning (ab initio).  He wrote, "The issue to be addressed is whether the offence under subsection 15(1) of the HA Act may be contemporaneously framed as a violation of absolute liability, given that knowledge is an essential component of the prohibited act."

In an offence of absolute liability, once the prosecution has proven the offending act beyond a reasonable doubt, there is liability.  There is no defence of due diligence available.  There is no knowledge or intent requirement.  Violations that are the subject of a Notice of Violation and the AMPs are supposed to be absolute liability offences.

However, Section 15 provides:

(1) No person shall possess or dispose of an animal or thing that the person knows was imported in contravention of this Act or the regulations.
(2) In any prosecution for an offence under subsection (1), an accused who is found to have been in possession of an animal or thing that was imported in contravention of this Act or the regulations shall be considered, in the absence of evidence to the contrary, to have known that the thing was so imported.

Knowledge on the part of the offending party is an explicit part of the offence, and yet CFIA issued a Notice of Violation where the issue of knowledge is not supposed to be a defence.  Member La Rochelle asked himself, "How can it be considered fair to [the accused] when the violation she is alleged to have committed involves knowledge as an essential component, yet she is legislatively prohibited from raising lack of knowledge as a defence?"

As set out in the Agriculture and Agri-Foods Administrative Monetary Penalties Act at Section 18, there is no defence available by reason that the accused "exercised due diligence to prevent the violation" or that he or she "reasonably and honestly believed in the existence of facts that, if true, would exonerate the person."

Member La Rochelle concluded that a contravention of Section 15 of the HA Act "cannot be legally constituted as a violation subject to an admininstrative monetary penalty or warning".  Therefore, the Notice of Violation in this case is a nullity.

Read the decision at: Maria K. Stanford v. Canada (CFIA).

Friday, January 10, 2014

Tingle voltage appeal dismissed by Ontario Court of Appeal

The Court of Appeal for Ontario has upheld the dismissal of a damage claim by dairy farmers who alleged tingle voltage or stray voltage as the cause of reduced milk production.  The trial judge accepted the expert evidence of the claimants that tingle voltage could cause the type of harm alleged, but found that it was not the cause in this case.  The Court of Appeal noted:

"The trial judge considered the whole of the evidence and importantly found that if tingle voltage had been the cause of the reduced milk production from 1997 forward, there would have been overt signs on the herd. He concluded that the evidence did not demonstrate such signs and accordingly the appellants had not established that the herd was being affected by tingle voltage. In his view, milk production had been relatively good in 1995 and 1996 and declined thereafter and there was no change in the hydro system that could account for the changes after 1997."

While the trial judge had found that Hydro One had breached the standard of care in failing to give adequate warning to farmers about the possible harms caused by tingle voltage, the lack of causation between the tingle voltage and the loss of milk production was fatal to the claim.  The trial judge found that the only cause of milk production loss proven on a balance of probabilities was inadequate labour, and the Court of Appeal declined to interfere with this finding.

Read the decision at: Cowan v. Hydro One Networks Inc.