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Expropriations (Ont) - Expropriations Act (EA)

. Eric Levin Holdings Inc. v Ministry of Transportation

In Eric Levin Holdings Inc. v Ministry of Transportation (Div Court, 2023) the Divisional Court considered the interest rate that applies to expropriated property, counted "from the date the owner ceases to reside on or make productive use of the land" [EA 33(1)] - here where the landowner claimed both a rental and a development use (which claim was dismissed on the evidence):
[3] Section 33(1) of the Act provides as follows:
Subject to subsection 25(4), the owner of lands expropriated is entitled to be paid interest on the portion of the market value of the owner’s interest in the land …to which the owner is entitled outstanding from time to time, at the rate of 6 per cent a year calculated from the date the owner ceases to reside on or make productive use of the land.
[4] In the case at bar, determining the date from which interest should run involved deciding two issues: (1) what was the productive use of the land and (2) when did that productive use cease.

....

[11] Regarding the rate of interest to be paid, s. 33(4) of the Act provides:
Where the Tribunal is of the opinion that any delay in determining compensation is attributable in whole or in part to the expropriating authority, the Tribunal may order the expropriating authority to pay to the owner interest under subsection (1) at a rate exceeding 6 per cent but not exceeding 12 per cent a year.
[12] The Appellant argued before the Tribunal that the Respondent was responsible for delay in determining the compensation eventually agreed upon by the parties and sought interest at the rate of 12 percent. The Tribunal dismissed the Appellant's claim. It held that it would be unfair to permit the Appellant to seek interest at a rate higher than 6 percent because such a claim had never been pleaded.

[13] The Tribunal's decision in this regard was a discretionary one. Section 13(4) of the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6, provides that, unless a Tribunal's failure to exercise its discretion causes a substantial wrong that affects the final disposition of a proceeding, the failure to exercise the discretion is not a ground for setting aside a decision of the Tribunal on an appeal. The Tribunal's refusal to permit the Appellant to pursue interest at a rate greater than 6 percent in this case caused no substantial wrong. As the Tribunal correctly pointed out, the Appellant had specified in three places in its claim that it was seeking interest "at 6 percent" and failed to take any steps to amend the claim in the process leading up to the hearing.

[14] Notwithstanding the Tribunal's refusal to allow the Appellant to pursue interest at 12 percent, the Tribunal went on to consider whether the Respondent was responsible for any delay. It held that both parties were responsible for the delay, as each approached the issue from a different perspective. The Tribunal's decision in this respect was a factual one and is subject to the palpable and overriding error standard of review. The Appellant has failed to establish any error, let alone an error of this nature. There was no error in concluding that both parties were responsible for the delay given that the amount of compensation eventually agreed upon represented a compromise between the parties' positions.

[15] Finally, the Appellant makes a claim for compound interest. The Appellant relies on this court's jurisdiction under s. 31(3) of the Act to make any order on an appeal that the Tribunal has the power to make to raise this claim for the first time on the appeal. Because it was raised for the first time before this court, the court did not have the benefit of the Tribunal’s view on the matter, which might well have been helpful since the Tribunal is an expert tribunal. This is important since compound interest is not mentioned in the Act and there is no Ontario authority that such a claim can be advanced. Arguments that were not advanced in the original hearing are not normally considered by an appellate court. In our view, this principle should be applied with respect to the Appellant’s claim for compound interest.
. 1353837 Ontario Inc. v. The Corporation of the City of Stratford

In 1353837 Ontario Inc. v. The Corporation of the City of Stratford (Div Court, 2022) the Divisional Court heard an Expropriations Act [s.31] appeal from the Ontario Land Tribunal. In these quotes the court reviews some principles applicable to calculating the value of an expropriated property under the Expropriations Act:
Compensation for Expropriation of the Property

[18] It is well-established that compensation payable under the Act may fall into four categories: market value, disturbance damages, damages for injurious affection, and business losses (see: Christopher Williams, Andrea Skinner and Matthew Helfand, Expropriation Law in Ontario, 1st ed. (Toronto: LexisNexis 2021)).

[19] In determining market value under the Act, it must be determined what a reasonably informed person would pay for the property based upon the property’s highest and best use (“HBU”) at the time using the knowledge available to the person as at the valuation date of, in this case, June 2009.

[20] The determination of market value of expropriated property is an exercise that commonly will require the assistance of opinions from real estate appraisers and other experts such as environmental consultants. In undertaking this exercise, different appraisers employing different appraisal techniques and various assumptions may arrive at different opinions as to the market value of the property.

[21] To determine the market value of property, the tests of legal permissibility, physical possibility, financial feasibility and maximum profitability are used (see: Williams et al, supra, at p. 42). Each one of these tests must be satisfied, and they must be considered sequentially. For instance, a use for property that may be financially feasible but is not legally permissible cannot be considered to be its HBU.
The court continues [at paras 22-39] to assess the appellant's argument, reflecting some of these principles at work.

. The Corporation of the City of Windsor v. Paciorka Leasehold Limited

In The Corporation of the City of Windsor v. Paciorka Leasehold Limited (Div Ct, 2021) the Divisional Court sets out some basics of Ontario expropriation law:
Expropriations Act

[6] The Expropriations Act governs the expropriation of private property in Ontario. Public authorities are required to compensate landowners in accordance with the provisions of the Act.

[7] Section 3(2) of the Expropriations Act provides that landowners are entitled to compensation for, amongst other things, the market value of the land, damages attributable to disturbance and damages for injurious affection.

[8] Section 14(1) of the Act defines “market value” as “the amount the land might be expected to realize if sold in the open market by a willing seller to a willing buyer”. When determining the market value of the lands, section 14(4)(b) of the Act prohibits accounting for “any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation”. This principle is typically referred to as “screening out” the expropriation scheme.

[9] Damages for injurious affection may be available where the public authority only acquires part of a landowner’s lands. Section 1(1) defines “injurious affection” as follows:
(i) the reduction in market value thereby caused to the remaining land of the owner by the acquisition or by the construction of the works thereon or by the use of the works thereon or any combination of them, and

(ii) such personal and business damages, resulting from the construction or use, or both, of the works as the statutory authority would be liable for if the construction or use were not under the authority of a statute…
[10] Section 33(1) of the Expropriations Act provides that a 6% interest rate is payable on the market value of the expropriated property and the amount of damages for injurious affection “calculated from the date the owner ceases to reside on or make productive use of the lands”.

[11] Where the public authority and the landowner do not agree on the compensation for an expropriation, the LPAT has authority to determine the amount of compensation.[1]





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Last modified: 08-06-23
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