February 28, 2000. ECB Control No.:
44/97/181 (69 L.C.R. 74)
Fredrick Reti and Mary Genevieve Reti |
of Sicamous |
I. Walls, Vice Chair|
Lesley Eames, AACI, P.App., Board Member
Greenwood, Board Member
Reinhard Burke, Counsel for the Claimants|
James Yardley, Counsel for the Respondent
The issue of costs in this matter was adjourned pending written reasons on compensation.
Those reasons were released on December 6, 1999. George and Mary Reti were awarded
compensation in the amount of $66,000 for loss in market value to their property.
This compensation was awarded pursuant to section 41(3) of the Expropriation
Act, R.S.B.C. 1996, c.125 ("the Act") for injurious affection with no land
 Relevant portions of section
45 of the Act are:
45 (6) On a claim
under section 41 (3), the board may award, in its discretion, costs to the claimant
or the expropriation authority.
45 (7) The costs payable
under subsection (3), (4), (5) or (6) are
the actual reasonable legal, appraisal and other costs, or
if the Lieutenant Governor in council prescribes a tariff of costs, the amounts
prescribed in the tariff and not the costs referred to in paragraph (a)
(9) If the board determines the amount of compensation or damages to which a person
is entitled, the amount of costs must be determined by the chair.
(10) In a determination of costs under...(9), the following considerations must
be taken into account:
(a) the number and complexity
of the issues;
(b) the degree of success taking into account
the determination of the issues, and
(ii) the difference
between the amount awarded and the advance payment under section 20....
the manner in which the case was prepared and conducted.
OF THE PARTIES
 The Retis submit
that they were successful at the hearing and are entitled to their costs. There
was an offer of settlement shortly before the hearing but it was for significantly
less money than they were awarded at the hearing.
makes four submissions:
45(6) of the Act, unlike situations where a portion of the claimant's land
has been taken, has no presumption that claimant is entitled to its costs. In
addition, the board has a discretion to award costs to the expropriation authority.
b The Retis in fact advanced four claims for compensation at
damage to property|
in market value of property|
of value to improvements not reflected in market value|
of use and enjoyment of their property |
they were successful in only one of these claims, the loss in market value of
the property, it would be appropriate to apportion costs in favour of the respondent
for the three issues in which they were unsuccessful.
c Sicamous alleges that the appraisal evidence relied on by the
Retis was not used by the board in coming to its conclusion on loss in market
value. Further, this evidence contained material that was outside the appraiser's
area of expertise which the board found had "no legal relevance". Under Rule 57(15)
of the Rules of Court an otherwise successful party may be denied costs for an
expert for which the party did not succeed. Sicamous submits that this principle
should be applied here to disentitle the Retis to reimbursement of costs for an
expert that was not accepted.
d Finally, Sicamous
submits that the respondent should be entitled to its costs for an application
prior to the compensation hearing, in which it sought an order to compel reattendance
of the claimants for discovery. The board did order reattendance but made no order
 The Retis
respond that the proper test for a disbursement for an expert report is whether
the disbursement was necessary and proper at the time that it was incurred. Van
Daele v Van Daele (1983), 56 B.C.L.R. 178 (C.A.). They submit that this should
be dealt with at a section 45(9) hearing before the chair rather than by the board
as part of the reasons for decision. They also submit that the facts that led
to the order for reattendance at an examination for discovery were not straightforward
and referred to their written submissions made at the time. Again they submit
that this matter should be dealt with at a section 45 hearing.
ANALYSIS AND CONCLUSION
the Act claimants who seek compensation for injurious affection with no
land taken do not enjoy the same presumption of entitlement to costs as claimants
who have had at least some part of their land expropriated. The board may award
costs to the claimant or to the expropriating authority. These costs may be awarded
in whole or in part. However, if the board exercises its discretion to award the
claimant all or part of its costs, then under section 45(7) of the Act the claimant
is entitled to its costs on the same basis as other claimants. See Jesperson's
Brake & Muffler Ltd. v. District of Chilliwack (No.2) (1993), 51 L.C.R. 62,
where a previous chair of this board, Chair Harvey, discusses some of the principles
of awarding costs in claims for injurious affection with no land taken.
are no criteria under section 45(6) as to how the board should exercise its discretion.
Unlike in Jesperson, we are deciding the issue of costs as a panel of the
board as a supplement to our decision on compensation. There may be a further
hearing before the chair under section 45(9) to actually determine the award for
reasonable legal, appraisal and other costs if the parties cannot agree. Subsection
45(10) lists a number of factors that the chair must consider in a hearing under
section 45(9) including the degree of success and the manner in which the case
was prepared and conducted.
of this board have sometimes commented on the complexities of the issues and the
relative time spent on different issues at the hearing to consider whether the
claimant should receive 100%, or some lesser percentage, of its legal or appraisal
costs. See Baines and Minister of Transportation (No.2) (1997), 62 L.C.R.
210 (B.C.E.C.B) for a review of factors considered by panels of this board in
deciding the level of costs that should be awarded.
this case the Retis have been successful in proving a significant part of their
primary claim. There is no advance payment in a claim of this sort and we note
that the respondent denied the claim and initially offered only $7,500 or 10%
of the 1995 market value if the market value decreased. Shortly before the hearing
date this offer increased to $30,000 including costs. In the circumstances, we
find that it was reasonable for the Retis to proceed to a hearing.
the other hand, we agree with Sicamous that there are some problems with respect
to the report from the claimants' appraiser, Danny Grant. As we said in our earlier
reasons, the articles appended to Grant's report on disease bearing pathogens
and chemicals were outside his area of expertise and were of no legal relevance.
While little time was spent on this evidence in chief, it was a relatively significant
issue in cross-examination. It is true that the board's rejection of expert evidence
does not necessarily mean that costs for that expert evidence should be rejected
or reduced. We agree with counsel for the Retis that the correct test is whether
a disbursement can be considered necessary and proper at the time that it was
incurred. See Van Daele v Van Daele. We appreciate that appraisers often
attach appropriate data to their reports about trends in such areas as population,
economic activity, construction levels and vacancy rates. We also recognize that
the appraisers in this case had difficulties in measuring the negative impact
of the sewage treatment plant on the Retis' property. Nonetheless, we wish to
emphasize that, in our opinion, attachment of a variety of scientific technical
articles collected by someone who has no expertise in this area, apparently to
support an implication that sewage treatment facilities create health risks, is
at no time necessary or proper or appropriate.
also have a concern with a claim for the loss of value to improvements not reflected
in the market value. As we noted in our earlier decision, the requirements for
a claim of this type under section 31(2)(b) had been clearly set out in an earlier
decision of this board, Branscombe v. British Columbia (1993), 51 L.C.R.
241. We think that it was unrealistic for the claimants to bring this claim for
loss of value to improvements in the circumstances in this case. The board does
not wish to inhibit novel and innovative arguments. However, we agree with the
comments of this board in Apland v British Columbia (Ministry of Transportation
and Highways) (1996), 60 L.C.R. 107 at 123 when it exercised its discretion
to award the claimant less than 100% of his costs:
their argument was novel, requiring on my part a close analysis of the scheme
of the legislation in order to determine the issue, it must have been evident
from any informed review of the language of the Act and the decided cases interpreting
it that the argument was fraught with difficulty and highly unlikely to succeed.
is true that, in Apland, the hearing focussed on this one issue that was
fraught with difficulty, whereas in this case the Retis have been successful in
their main claim for injurious affection. We acknowledge that there is some difficulty
in extracting the costs of advancing one argument amongst many.
the date of the hearing there was no tariff in place. Because they were successful
in their primary claim, in our opinion, the Retis are entitled to the majority
of their costs. We agree with Sicamous, however, that the articles attached to
the claimants' appraisal report on pathogens and chemicals associated with sewage
were not necessary or proper. We also agree that the claim for the loss of value
to improvements not reflected in the market value was unrealistic. After consideration
of the submissions and all the evidence at the hearing we award the Retis 90%
of their actual reasonable legal, appraisal and other costs.