The Administrative Tribunal of Québec reconfirms the principles governing reimbursement of legal expenses
It has long been established that a party subject to expropriation is not entitled to the reimbursement of legal fees as damages caused by the expropriation. However, there are two exceptions to this rule: (1) where there has been bad faith or abuse of process by the expropriating party; and (2) where expropriation proceedings have been discontinued. This legal framework was recently reconfirmed by the Administrative Tribunal of Québec (“TAQ”) in Ferme Ménanmar v. Contrecœur (Ville), 2020 QCTAQ 01777.
The TAQ decision
On February 4, 2015, the town of Contrecœur (“Contrecœur”) served a notice of expropriation to the owners of Ferme Ménanmar (“Ménanmar”). The purpose of this expropriation was to put in place reception facilities to attract new transportation and logistics companies to the town. Following receipt of this notice, Ménanmar brought an action before the Superior Court in order to cancel the expropriation notice and suspend the proceedings before the TAQ. Over four years later, Contrecœur discontinued its expropriation proceedings. In light of the withdrawal, Ménanmar claimed damages of $278,574.09, which included $168,743.56 in legal fees.
Case law recognizes that a lawyer’s professional fees may be reimbursed where there has been discontinuance of expropriation proceedings. This principle is justified by the fact that the expropriated party has had to incur unnecessary professional fees. However, according to the TAQ, a court’s ruling on the quantum of damages to be awarded to an expropriated party must be predicated on whether the withdrawal itself resulted in damages that are directly related to the expropriation and its withdrawal.
That said, in this case, the TAQ found that Ménanmar encumbered the proceedings by attempting to stage, before the TAQ, the hearing that it would have had before the Superior Court. For this reason, the TAQ granted less than half of the fees claimed by Ménanmar, i.e. the sum of $73,322.00.
It is common practice to claim legal fees before the TAQ in expropriation matters. However, it should be remembered that the reimbursement of legal fees is an exception to the rule that such fees are not deemed to be damages.
Moreover, even when it is possible to obtain reimbursement of these costs—such as when the expropriation proceedings have been discontinued—the fact remains that the TAQ will only grant those fees that were reasonably incurred and directly related to the expropriation and its withdrawal.