Focus On

Powers of municipality - Expropriation - Compensation - Valuation - Disturbance damages - Appeals

Thursday, September 15, 2016 @ 8:00 PM  

Appeal by the Province of Manitoba from the amount certified by the Land Value Appraisal Commission as compensation payable for expropriated property. In 2009, the province expropriated a portion of the respondents’ family farm for the purpose of realigning a provincial road and constructing a bridge over a river. At the time of the expropriation, there was a house, barn and other structures on the land. Following the expropriation, the respondents were granted a permit to use a portion of the old road as a driveway to access the new, re-aligned road. The respondents purchased new property and moved the house, various farm buildings (but not the barn) and the grain bins to the new property, along with the cows and the dairy operation. The Commission found that the respondents made a reasonable choice when they decided to purchase the new property and that the province’s lack of co-operation, including their attempts to put the respondents out of business, contributed to that decision. The Commission also concluded that the old barn could not be moved. In determining the “due compensation payable” to respondents, the Commission calculated the market value of the expropriated property and awarded various other amounts on the basis that they were costs, losses and expenses arising out of, or incidental to, the expropriation. The amount of compensation certified by the Commission was $2,735,543. The province sought to set aside or vary the amount certified by the Commission as compensation payable for the expropriated property. The province argued that some of the amounts certified by the Commission were contrary to the intent of the Expropriation Act, significantly over-compensated the respondents and were unreasonable.

HELD: Appeal allowed in part. The damages awarded for seeding and limestone were the natural and reasonable consequence of the expropriation and represented economic loss suffered by the respondents when they were required to vacate the property. The Commission provided reasonable explanations as to why those amounts did not duplicate the amounts for improvements on the expropriated property and why they were proper disturbance cost awards. The $90,000 awarded for the premium paid as a portion of the purchase price of the new property compensated the respondents for a cost or expense caused by the relocation. While the respondents purchased a larger property than was expropriated, there was no evidence they could have purchased a smaller property. The award of $310,880 to remove and relocate certain buildings and improvements from the expropriated property to the new property was an overpayment. The Commission erred in awarding the respondents the market value of the buildings in addition to relocation costs. The respondents were entitled to the actual cost to relocate the buildings with no reduction for salvage value, but not to be compensated for the market value of the buildings they kept. The award of $1,010,235 for the new dairy barn, the cost of new dairy equipment and the cost to build a new underground manure storage facility at the new property was to be reduced by $128,800, being the market value of the old barn. The respondents were entitled to compensation for the loss of the existing barn arising from the expropriation. The new barn was a proper disturbance cost. However, the Commission erred in awarding double recovery by failing to make any allowance for the market value or the salvage value of the old barn. The award for permanent increased costs was appropriate. The permanent increased costs were reasonable, would be incurred and were the consequence of the expropriation. The award of $7,200 for injurious affect to the remainder of the property was appropriate. The value to the respondents of the remaining land had been reduced and the Commission felt that it had been reduced by 15 per cent. The award of $18,900 for special advantage was reasonable. The award of $4,770 to compensate the respondents for the cost of finding another residence was not duplicative of the mileage award. With respect to the award for new equipment, there was no suggestion of double recovery and the award was reasonable. Harvesting and spraying costs were compensable business losses. The Commission’s reasons for awarding legal costs were neither transparent nor intelligible.