Guidance on stays of proceedings under Quebec’s new expropriation law: Early court decisions set standards

Two recent Superior Court decisions — Pelletier c. Ville d’Alma and 9379-1242 Québec inc. c. Ville de Sept-Îles — have provided the first judicial interpretations of the new Loi concernant l’expropriation, which came into effect in December 2023. The revised law marks a significant departure from the previous regime by requiring expropriated landowners to actively seek a stay of proceedings (sursis) when contesting an expropriation. This article breaks down the key points from these decisions and offers guidance on how courts are approaching applications for a stay under the new legal framework.

Under Quebec’s previous expropriation regime, landowners challenging an expropriation benefited from an automatic stay of proceedings. This meant that as soon as a landowner contested the expropriation, the expropriating authority had to pause its actions until the legality of the expropriation was settled. The new Loi concernant l’expropriation, however, reverses this default position. Now, under Article 17 of the new law, the onus is on the landowner to demonstrate why a stay should be granted, using a three-part test:

• Appearance of right: The landowner must show that their contestation raises a serious issue to be tried.
• Serious or irreparable harm: The landowner must demonstrate that, without a stay, they will suffer serious or irreparable harm.
• Balance of inconveniences: The harm to the landowner from denying the stay must outweigh any harm to the expropriating authority from granting it.

These changes introduce a new layer of complexity for landowners and require a nuanced understanding of how to meet these criteria effectively. The Pelletier and Sept-Îles decisions are the first to address how courts will assess these criteria, making them significant precedents for the interpretation of the new law.

Appearance of right: A low threshold for contesting expropriations

Both decisions confirm that the appearance of right criterion is relatively easy to meet, even under the new expropriation regime. In Pelletier c. Ville d’Alma, the landowner argued that the City was not expropriating for a legitimate public purpose, but rather to transfer the land to third parties for a private residential development project and also to block his residential project. The Court found that this argument raised a serious legal question, which was sufficient to establish an appearance of right. Similarly, in 9379-1242 Québec inc. c. Ville de Sept-Îles, the landowner argued that the City’s intended use of the property—residential development—was nearly identical to what the landowner had already proposed, raising questions about whether or not such “substitution” by the City was a valid use of the power to expropriate.

In both cases, the Court emphasized that the appearance of right is a low bar: the landowner need not prove their case at this stage but must only show that their claim is not frivolous or vexatious. This is a crucial point for practitioners advising clients in expropriation disputes, as it signals that contesting an expropriation remains accessible even under the more stringent provisions of the new law.

Serious or irreparable harm: A broader interpretation beyond financial loss

The serious or irreparable harm criterion received a more detailed and nuanced analysis in both decisions. The courts clarified that, under the new law, serious or irreparable harm is not limited to situations where financial compensation is inadequate. Instead, the focus is on whether continuing with the expropriation proceedings would undermine the landowner’s ability to challenge the expropriation effectively or lead to irreversible changes to the property.

In Pelletier, the Court rejected the City of Alma’s argument that harm suffered via expropriation can be remedied through compensation, pointing out that allowing the expropriation to proceed would strip the landowner of the opportunity to develop the property as originally planned. The harm in question was not merely financial — it concerned the landowner’s right to pursue a specific development project. Similarly, in Sept-Îles, the Court found that if the City were allowed to subdivide or develop the property before the contestation was resolved, any future judgment nullifying the expropriation would be rendered ineffective. Thus, serious harm arises when actions taken during the expropriation process could undermine the very purpose of contesting the expropriation in the first place.

Both decisions make it clear that courts will interpret serious or irreparable harm more broadly, considering the overall impact on property rights and the potential frustration of the judicial process. This broad interpretation is particularly relevant when the land’s state or intended use could be significantly altered by the expropriating authority during the pendency of the proceedings.

Balance of inconvenience: Protecting procedural rights

The balance of inconvenience analysis in both Pelletier and Sept-Îles also weighed heavily in favor of the landowners. The courts noted that while a temporary delay might inconvenience the cities, this was minimal compared to the significant and potentially irreversible impact on the landowners’ rights. The courts also underscored that any prejudice to the cities would be limited in situations where both parties were prepared to move quickly on the merits. 

Practical takeaways

The Pelletier and Sept-Îles decisions provide critical guidance for legal practitioners navigating Quebec’s revised expropriation law. The key takeaways are:

• Low bar for appearance of right: The first element remains accessible, making it feasible to initiate a challenge under the new regime.
• Broad interpretation of serious or irreparable harm: Successful stay applications should emphasize the broader impact on property rights, beyond financial loss, particularly where the expropriation could alter the nature of the property or impede the landowner’s ability to obtain justice when contesting the expropriation.
• Importance of timing: Courts are likely to be more favorable to granting stays when the hearing on the merits can be heard on a reasonable time frame.

As these early decisions shape the legal landscape under the new Act, practitioners should remain vigilant and prepared to adapt their strategies in light of this evolving jurisprudence. The emphasis on a low threshold for appearance of right and the broader interpretation of serious harm suggests that the courts will prioritize the rights of landowners while ensuring that legitimate public purposes are not compromised.