CASUAL LEGAL: Interim Costs payable to Claimants when Expropriating Property

Attention: AMSC Members – Please distribute to all appropriate personnel

Interim Costs payable to Claimants when Expropriating Property

By Shauna Finlay

Reynolds Mirth Richards Farmer LLP

AMSC Casual Legal Service Provider

There have been a number of costs decisions that have been issued by the Land Compensation Board recently. These cases reinforce a number of principles that municipalities should consider when dealing with interim or other costs applications in the context of expropriation or related proceedings. 

Firstly, interim costs can be ordered to be paid by the Board in order to allow Claimants to be on equal footing with the expropriating authority. However, these costs can still be reviewed for reasonableness. The Alberta Court of Appeal has articulated a summary of the general principles to be followed in determining if costs are reasonable. These are that costs should:

1. reflect reasonable, economical and straightforward preparation and presentation as is necessary to properly present the owner’s case;
2. not include unnecessary work or other expenses or costs incurred through over-caution or over preparation; and
3. not be the result of misconduct, omission or neglect by the owner.

Secondly, the risk of overpayment in an award of interim costs is a valid consideration.

Thirdly, interim costs are generally awarded for 75% of costs, but this is subject to adjustment by the Land Compensation Board and subject to review for reasonableness. 

Fourthly, if expert and lawyer costs are found to be excessive and unreasonable, applications for interim costs may be denied entirely.

Finally, the Land Compensation Board does not have jurisdiction to pay advance costs where a party is advancing a claim under s. 534 of the Municipal Government Act. 

In expropriation proceedings, there is an obligation on authorities to make Claimants whole for advancing their claims. However, the principles above mean that this does not amount to a blank check. Claimants still need to expend resources wisely and reasonably in advancing the claim. 

To access AMSC’s Casual Legal Helpline, AUMA members can call toll-free to 1-800-661-7673 or email casuallegal [at] amsc.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] auma.ca, or call 310-AUMA (2862) to speak to AUMA’s Risk Management staff. Any Regular or Associate member of the AUMA can access the Casual Legal Service.

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.