Ontario Divisional Court Reminds Expropriated Owners: Evidence Is Key To Productive Use

• Published date: 17 January 2024
• Law Firm: Gowling WLG
• Author: Mr Jonathan Minnes, Kevin Dias and Andrea Leung

When does an owner cease to make productive use of land so as to attract interest prior to expropriation?

Under the Ontario Expropriations Act landowners are entitled to six per cent interest on the unpaid market value of expropriated (or injuriously affected) land. This can be a silver lining given the disruption caused by an unwanted land taking (although it provided for a more significant impact prior to the recent increase in interest rates). There is potential for interest to run prior to the expropriation provided the owner can satisfy the test of showing that productive use of the land ceased prior to the taking.

The key to obtaining this interest is proving both:

1. The productive use of the land.
2. When this productive use has actually ceased.

The Divisional Court in Eric Levin Holdings Inc. v Ministry of Transportation¹ has reminded commercial property owners that productive use can be at a loss when owners begin to lose tenants, and that claiming an alternative use (such as re-development potential) requires credible evidence of steps taken to achieve that use.

Background

The owner's property, which was improved with a one-storey multi-tenanted commercial building, was wholly expropriated on February 1, 2018 and then demolished. The primary use of the property, according to the owner, was to hold, improve, and enlarge the gross leasable area (GLA).

While...