This case involves a compensation claim arising from a typical road widening project.
The expropriating authority was a regional municipality engaged in a project to widen an
arterial road to four lanes. Before expropriation, the property was a single corner lot,
rectangular in shape, having frontages of 150 ft. on the arterial road and 140 feet on
the flanking street and improved with a dwelling occupied by the claimant as his personal
residence. A strip of land approximately 10 metres in width plus an additional triangle
of land at one corner was taken from the claimant's property. The dwelling was not
affected. The primary claims advanced included market value of land taken and reduction
in market value to the remainder. This fact pattern is very common.
At the hearing before a single member of the Ontario Municipal Board, the parties were in agreement on the value for the entire property at $173,250. The dispute related to the proper method for allocating the value of the parent parcel between the portion taken and the remainder. The claimant argued that the value of the land taken should be obtained by multiplying the value per frontage foot by the number of frontage feet taken. The claimant obtained a value per frontage foot by dividing the total value by the frontage on the flanking street, giving a value of $1,237.50 per front foot. This produced a claim of $52,861.67 for the land taken. Because of the irregular shape of the taking, this produced a higher unit value for the land taken than the land which remained. The claimant testified that in his opinion the land adjacent to the street was more valuable than the interior land. If evidence to support this opinion was put forward it is not disclosed in the reasons. The Board stated that the claimant called no experts to support his theory and relied entirely on his own testimony. The claimant was a retired construction manager and did not appear to have any appraisal expertise. It is not apparent why the claimant's value per front foot was obtained by using the frontage on the flanking street instead of the frontage on the arterial road other than the fact that this method produces the higher frontage foot value.
The Board rejected the claimant's method and instead allocated a pro-rata share of the market value of the entire lot to the portion taken. This produced a value per square foot of $8.25 or $16,912.50 for the land taken which was the value proposed by the authority. In this reviewer's experience, there will be cases where the parent parcel does not have an equal average value throughout but this case does not appear to be one of them. The method adopted by the Board here is the conventional method for valuing partial takings.
The second main issue was the claim for injurious affection. The claimant argued that but for the expropriation, he could have created two additional lots by subdivision. However, the expropriation had taken away this opportunity and he sought compensation as a result. Expropriation professionals will recognize this common fact pattern as well. The claimant gave testimony including sketches that were intended to demonstrate how he could have subdivided his property before the expropriation. The claimant had never actually applied for subdivision approval before the taking. The claimant did not call any expert planning or appraisal evidence on this issue, although it appears that he had previously summonsed a senior planner from the local planning authority to give evidence on his behalf and then changed his mind at the last minute. In the end, the planner did give testimony at the request of the expropriating authority. This evidence was not helpful to the claimant. The Board concluded that there was no reasonable probability of subdivision before the taking and dismissed the claim for injurious affection.
One of the reasons cited by the Board for concluding that there was no reasonable subdivision potential is that the claimant would have been required to dedicate a strip of land for the arterial road widening as a condition of subdivision approval. The Board doesn't go into detail on this point but it appears that the road dedication requirement might have left the claimant with insufficient land to meet other planning requirements. In addition, it is likely that the required road dedication would have been entirely at the claimant's expense with no compensation being payable for the land given up. This problem alone could have completely undermined the claimant's case for injurious affection.
The Board's reasons do not clearly indicate whether the claimant was a winner or loser. The award for market value appears to have matched the amount proposed by the authority at the hearing but it isn't clear whether the authority had made an advance payment and if so what the amount of the advance payment was.
The facts of this case amply illustrate the importance of expert advice when advancing a claim for compensation in expropriation cases. To obtain more on the market value issue than proposed by the authority the claimant had to prove either that the market value of the parent parcel was higher than the authority had estimated or that the land taken had a higher unit value than the land which remained. Either proposition could only have been proven with expert appraisal evidence. A claimant cannot win on market value issues without placing an independent appraisal opinion in evidence. It is also not apparent whether the claimant had the benefit of independent appraisal advice before setting the claim down for hearing. Although the reasons refer to an independent appraisal report described as the "Pestl Report" it is not clear whether this report was commissioned by the claimant or whether it was a report prepared at the authority's request, perhaps for the advance payment.
The same point must be made about the claim for injurious affection. This claim rested on the proposition that the highest and best use of the land before taking was for subdivision and that the taking had destroyed this use. This theory cannot be put forward in a convincing way without expert evidence. The issue required appraisal evidence at a minimum and probably also a planner. However, the claimant failed to use either type of expert. Unfortunately for the claimant, the municipal planner's evidence given for the authority ended any hope for additional compensation. Planning, like appraisal, is an art rather than a science so the municipal planner's opinion may not have been the only point of view. Without evidence to support the claim advanced, the outcome was a foregone conclusion.
While this case illustrates the value of expert assistance, it also raises the issue of
costs because experts don't come cheap. In many jurisdictions, owners can recover some or
all of their professional costs but their ability to do so is often conditioned upon the
final outcome. Recovery may also be delayed significantly requiring owners to finance the
costs in the interim. A risk averse claimant may simply choose not to engage experts in the
face of these problems.
One other issue deserves mention. It is entirely possible that the claimant in this case
did obtain expert advice in advance of the hearing which was to the effect that the sum
awarded was all that he could reasonably expect to obtain. Faced with that advice, the owner
may have decided to save the expense and proceed solely as a matter of principle without any
realistic expectation of winnning.
The claimant was represented by R.G. Chapman. S. O'Melia appeared for the expropriating
authority and J.S. Rogers appeared for the Town of Newmarket.