5/1/2013 8:00 AM
As is typical in Canadian expropriation legislation, the Nova Scotia Expropriation Act allows for damages to be awarded for an owner’s disturbance. Disturbance damage is a loss suffered by an owner for having to vacate an expropriated property. This may include the cost of moving to new premises, the depreciation in value of machinery, equipment, or other materials through necessary removal or sale, the increased cost of doing business in the new premises, the disturbance or loss of business, or the chance of making profits or the loss or diminution in value of good will.
The Nova Scotia statute states that if the costs arising out of or incidental to the owner’s disturbance cannot practically be determined, there may be allowed instead a percentage of the market value of the land, to a maximum of 15%. In Dell Holdings, the Supreme Court of Canada found that the damage suffered by a developer, Dell Holdings, as a result of delay in the expropriation process, was recoverable as disturbance damages under the Ontario legislation. Dell Holdings had been forced to incur extra costs and lost profits related to its land development as a result of the uncertainty associated with delays on the part of the expropriating authority.
Disturbance damages, particularly (but not exclusively) for businesses, can be considerable. Taking into account costs of finding equally-suitable business premises, the costs of moving and transferring the business, loss of business and increased costs during the move, and amount awarded to offset depreciation in the profitability of a business resulting from a change in location, these amounts can quickly add up.
Disturbance damage is compensable whether an entire parcel is expropriated, or only a part. The Supreme Court of Canada has said that disturbance damage is compensable so long as the damage is the natural and reasonable consequence of the expropriation. The Court has also said that disturbance damage that arises between the announcement of a potential expropriation and the actual taking of land is compensable.
If you have questions or would like to discuss this topic further, please contact Jeremy P. Smith at Patterson Law at 1-888-897-2001.