The Shadow of Expropriation
2/4/2016 10:45 AM
In Toronto Area Transit
Operating Authority v Dell Holdings Ltd,  1 SCR 32, the Supreme
Court of Canada adopted reasoning from a decision of the House of Lords in
which a claimant had sought compensation for loss of profit which occurred
after the announcement of expropriation, but before the land was actually
taken. This period was referred to as the “shadow period”. In the case cited by
the Supreme Court of Canada, the majority of the Law Lords found that the
losses sustained in this period were caused by the expropriation and that the
corresponding damages should be awarded.
Justice Cory, for the majority, stated that
he was in complete agreement with the reasoning of the House of Lords. In Dell Holdings, Dell had suffered damages because its
development business was curtailed for more than two years while the authority
determined which portion of its land was needed for a Go-Train Station. Justice
Corey held that the increased cost of the claimant’s development business
during the shadow period between the announcement of potential expropriation
and the actual taking of the land were caused by the expropriations and were
therefore compensable as disturbance damages.
In Nova Scotia, this was referred to in Bishop (re), 2010 NSUARB 231 in which counsel for the
claimant argued that this same reasoning should apply to the costs portion of
the landowners’ compensation claim. Counsel argued that while Dell Holdings did not explicitly make a pronouncement on
whether the costs incurred in relation to the shadow period were compensable,
this would logically flow from the Expropriation Act.
Counsel argued that all claims caused by the expropriation must be covered,
including reasonable legal fees. The Board agreed, and held that compensation
for an expropriation in Nova Scotia is recoverable throughout the whole of the
expropriation process including the “shadow period”.
If you have questions or would like to
discuss this topic further, please contact Jeremy Smith at Patterson Law at
Please note that this article is meant to
provide information only and is not intended to confer legal advice or opinion.
If you have any further questions please consult a lawyer. Please note as well
that many of the statements are general principles which may vary on a case by