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EXPROPRIATION - Compensation - Business property

Monday, February 05, 2018 @ 11:24 AM  

Lexis Advance® Quicklaw®
Appeal by the Shuswap companies from the dismissal of claims for business losses resulting from a highway improvement project. The companies owned and operated a real estate development. They developed a new residential subdivision in 2006 called Highlands that sold quickly until 2009. In September 2009, the companies entered into an agreement with the province pursuant to which it would acquire land owned by the companies as part of a project to extend and improve the TransCanada Highway. The agreement set out the compensation payable to the companies and provided that they would retain the right to pursue a claim for business losses under the Expropriation Act. The companies were paid to relocate utilities and to remove and relocate signage. In June 2012, the companies filed a notice of civil claim, seeking compensation for business losses, the costs of moving utilities and the costs of a water bypass that ensured their customers’ water supply was not interrupted during the installation of utilities. In June 2014, the parties agreed that the claims would be limited to business losses only, settling all other issues. The Shuswap companies provided expert evidence in support of their claim, which the province challenged based on the decline in sales for Highlands prior to the agreement. The judge found that the companies failed to prove that a sales decline was attributable to the movement of the signage, the relocation of the sales office or the public’s perception respecting the highway project. The judge found that claims associated with moving the utilities were not business losses, but disturbance damages, barred by the parties’ settlement agreement.

HELD: Appeal dismissed. The judge gave due consideration to the expert reports submitted by the companies with respect to the decline in sales that had occurred subsequent to 2009. In the absence of evidence from any potential purchaser that they did not buy because of the highway project, it was open to the judge to find the expert evidence speculative at best. He was entitled to find that the companies’ failure to respond to a declining market, their failure to match price reductions offered by other developers and their lack of effective sales staff were the real causes of their declining sales. The permits pursuant to which the companies had initially located utilities within the highway right of way precluded their compensation with the associated costs.

Shuswap Lake Estates Ltd. v. British Columbia (Transportation and Infrastructure), [2018] B.C.J. No. 9, British Columbia Court of Appeal, R.J. Bauman C.J.B.C., J.J.L. Hunter J.A. and B. Fisher J., January 5, 2018. Digest No. TLD-Feb52018001