Smith v. Alliance case heard by Supreme Court of Canada

The Supreme Court of Canada heard an appeal by Vernon Smith yesterday against a decision of the Federal Court of Appeal related to pipeline landowner compensation for damages.  The Federal Court of Appeal had overturned an arbitration decision that awarded Smith his unpaid costs of a court case that had been started and lost by Alliance Pipelines.  According to the Supreme Court's website, a decision in the case is under reserve or has been made but with reasons to follow.  My previous posts on this case are at:
July 2010; April 2010; January 2010.

Smith v. Alliance Pipeline appeal to be heard by Supreme Court of Canada on October 5th

The October 5th hearing date for the appeal by Alberta farmer Vernon Smith to the Supreme Court of Canada has been confirmed.  This is an appeal from a decision of the Alberta Court of Appeal which overturned an NEB Act arbitration committee decision that awarded Smith his costs of a court case initiated by Alliance Pipelines.  A number of other Alliance landowners had applied to intervene in the case, but the Supreme Court dismissed their application on June 7, 2010. 

The fact that the Supreme Court has chosen to hear this case signifies its importance and, perhaps, the need to clarify the law involved.  You can read the written arguments filed by the parties at:

Smith (Appellant) Factum

Alliance (Respondent) Factum

Recovering court costs as compensation for expropriation - OMB decision

With the Smith v. Alliance Pipeline case heading to hearing before the Supreme Court of Canada this October, I was surprised to hear that the Ontario Municipal Board, similar to the Pipeline Arbitration Committee under the National Energy Board Act, had itself made a decision in 2008 awarding court costs to landowners as part of the expropriation compensation process.  Farmland owned by Dale and Mary McKean was expropriated by the Ministry of Transportation (MTO), but not before the Superior Court of Justice had to decide exactly what land was available to be expropriated.  There was an issue as to whether certain portions of the farm were actually public roads that had never been opened.  If the lands were public roads, then no expropriation (and no compensation) was necessary.

The MTO was successful in the court case, and costs were awarded against the McKeans in the amount of $1,550.  The McKeans themselves had expended approximately $55,000 in legal costs.  Before the OMB, they sought to recover those costs under Section 32 of the Expropriations Act as costs incurred for the purpose of resolving their compensation claim related to the expropriation.  The OMB ruled in their favour:

The Board finds that if s. 32(1) is given its proper interpretation, the McKeans are entitled to compensation by the MTO for costs associated with the Court Proceedings. The Board finds that the McKeans actually incurred costs in association with the Court Proceedings and that these proceedings were for the purposes of determining compensation payable for the expropriation and injurious affection. But for the proceedings before the Court, the MTO could not have determined what lands would be expropriated or to what extent, and therefore what compensation would be payable to the McKeans.

As far as I know, this decision was not appealed and was not cited by the Federal Court of Appeal in its decision in the Smith v. Alliance Pipeline case.  While the facts of the two cases are not entirely the same, they are similar.  However, the main distinction between the cases is that in Smith the court costs were pursued as damages, while in McKean the court costs were pursued as costs under the Expropriations Act.  It seems less likely that court costs could be recoverable under the costs provision of the NEB Act since it provides only for costs incurred "in asserting that person's claim for compensation".

Read the decision at: McLean v. Ministry of Transportation.  Thanks to Lindsay Lake at my firm for bringing this decision to my attention.

Alberta landowners seeking to intervene in Supreme Court of Canada case in Smith v. Alliance Pipelines

A number of Alberta landowners including those involved in the Balisky matter that went before the Federal Court of Appeal (where it was determined that landowners in that case could be compensated for damages related to the National Energy Board's 30-metre control zone) have asked for leave to intervene in the upcoming Supreme Court of Canada hearing in Smith v. Alliance Pipelines.  That case, scheduled to be heard this October, deals with the authority of the Pipeline Arbitration Committee under the National Energy Board Act to award costs of a related court action as damages suffered by the landowner.  The arbitrator awarded the costs and the Federal Court of Appeal overturned the decision. 

It is certainly a rarity that a case like this proceeds to the Supreme Court.  Hopefully it will provide further clarity about the compensation arbitration process under the NEB Act. 

Also note that the Pipeline Arbitration Committee itself has declined to participate in the appeal.

Landowner Pipeline Court Costs Case to go to Supreme Court

The Supreme Court has granted leave to appeal from a decision of the Federal Court of Appeal that overturned an award of court costs to a pipeline landowner. In 1999, Alliance constructed a pipeline across Vernon Smith's Alberta property. A dispute arose over payment for restoration work Smith performed himself after the construction, and a claim was made for compensation before the Pipeline Arbitration Committee appointed under the National Energy Board Act. As part of that claim, Smith also claimed court costs related to an unsuccessful injunction action brought by Alliance. The Committee awarded Smith his costs (not already covered by the costs award of the court). The Federal Court of Appeal overturned the award. Now the Supreme Court will decide the issue.

A hearing has been scheduled tentatively for October 5, 2010 at 9:30 a.m.