Expropriation Lawyer Explains Section 22 of the Expropriations Act

Pinning Down Section 22 of the Expropriations Act – Giving Notice of IA

Read time: 3-4 minutes

Section 22 of the Expropriations Act imposes a critical limitation period – Claimants must provide the authority with written notice of injurious affection (“IA”) one year after the damage was sustained or after it became known. If not, compensation claims for injurious affection are “forever barred.” This is strong language for legislation designed to make property owners whole. At some point, however, a line in the sand must be drawn.

A plain reading of section 22 outlines three key points: (1) notice must be given in writing; (2) notice must be given one year after the damage was sustained; (3) if notice was not given within one year after the damage was sustained, notice may also be provided after damages became “known” to the person – this is the elusive “discoverability” principle.

When does a Claimant know, or when should they know, they have an IA claim?  Even if we follow the general principle in Grooscors v. Ottawa, [2007] 92 L.C.R. 117 (O.M.B.), that s. 22 is triggered when the Claimant has “knowledge of the loss” as opposed to knowledge of the quantum of the loss, it is always difficult pinning down an exact date.

Do (or should) Claimants have knowledge of their loss:

• Within one year after delivery of the Notice of Expropriation where property is taken?
• When they receive a Section 25 offer and the authority’s appraisal report attributes amounts for injurious affection?
• When the “reasonable person” ought to have known of the first instance of a claim?
• When the project construction starts?
• When the project allegedly causing IA is completed?
• When the Claimant suspects that maybe a project is impacting its business?
• When the loss is quantified by an expert who provides their professional analysis that damages were actually incurred and caused by the construction/expropriation project?
• When a business accountant calculates a loss on year-end financial statements?

The case law has been generous to Claimants who have valid and un-vexatious compensation claims for IA, and this is appropriate.  In Willies Car & Van Wash Ltd. v. Simcoe (County) 2015, L.C.R. 39, OMB (upheld on appeal), the OMB noted that it is not reasonable to delay giving notice until after the full amount of the loss is calculated. Instead, the Board found that s. 22 notice was due one year after the Claimant knew that a road closure was the alleged cause of its income losses – the Board held that notice was due, at the latest, 12 months after a road closure was finalized and losses began to mount. The Board also noted that “the Claimant is also required to act diligently to inform itself of any loss giving rise to a claim.”

Section 22 seems to provide two possible pegs for notice: one year after damage was sustained, or one year when damage became known to the Claimant. The more generous limitation period seems to expire when damage becomes known and not one year after damage was sustained – arguably, it is possible to sustain damage without knowledge of that damage.  In my experience, many prospective Claimants are also unaware of limitation periods and receive misinformation that compensation for IA is insurmountable, further delaying notice.

Authorities can successfully bar IA claims with helpful facts; they need not wait until the final hearing to bring a motion to strike to the OMB. A Rule 21 or summary-judgment type motion could be brought under Rule 34 of the OMB Rules of Practice and Procedure striking out the claim as statute-barred or for lack of jurisdiction.  If the Claimant is a sophisticated party with access to legal counsel, had previous negotiations or made inquiries to the authority regarding construction impacts early on in the project, was situate in a heavy construction zone or should have truly known a project was impacting its business, the OMB might find that they knew or ought to have known of their claim sooner than the last possible date.

For losses spanning across several years, the authority could bring a motion striking out claims for years that Claimants failed to provide s. 22 notice.  Section 38 of the Ontario Municipal Board Act provides that powers of the Superior Court of Justice are exercisable by the Board, which should permit a motion striking the claim in its early stages.

However, in partial taking scenarios, IA claims for business damages can also be validly and distinctly claimed as disturbance damages under s.13(2)(b) and s.18. There is no statutory requirement to give the authority notice of disturbance damages where there is a taking. However, the ultimate 15-year limitation period set out in the Limitations Act would apply.

It is best practice to give notice of IA as soon as possible to preserve the rights of the property owner, until claims are further particularized and more information becomes known. Connect with a leading expropriation lawyer to protect your interests.