Supreme Court Rules on Municipal Expropriation Case

in Antrim Truck Centre Ltd. v. Ontario (Transportation), the Supreme Court of Canada ruled that reasonableness of interference is determined by balancing competing interests.

From 1978 until 2004, Antrim Truck Centre owned property on Highway 17 near the hamlet of Antrim where it operated a truck stop complex that included a restaurant and gas bar and enjoyed the patronage of drivers traveling along the highway. In September 2004, the Ministry of Transportation opened a new section of Highway 417 running parallel to Highway 17 near the appellant?s property. Highway 17 was significantly altered by the construction of Highway 417 and access to Antrim Truck Centre’s land was severely restricted. Motorists travelling on the new highway did not have direct access to its truck stop and so it was effectively put out of business at that location. Antrim Truck Centre brought a claim for damages for injurious affection before the Ontario Municipal Board under the Expropriations Act and was awarded $58,000 for business loss and $335,000 for loss in market value of the land. This decision was upheld on appeal to the Divisional Court. The Court of Appeal set aside the Board’s decision, however, finding that its application of the law of private nuisance to the facts was unreasonable because it had failed to consider two factors in its reasonableness analysis and because it had failed to recognize the elevated importance of the utility of the respondent?s conduct where the interference was the product of an essential public service.

The Supreme Court of Canada unanimously allowed the appeal, saying as follows:

“Highway construction by the Province of Ontario significantly and permanently interfered with access to the appellant’s land. The appellant claimed that this interference was unreasonable and sought an order for compensation before the Ontario Municipal Board. The Board awarded the appellant $393,000 as compensation for business loss and decline in market value of the land resulting from the highway construction. The Board’s award, however, was set aside by the Court of Appeal; it concluded that the interference with the appellant’s land had not been unreasonable given the important public purposes served by the highway’s construction. In effect, the Court of Appeal found that it was reasonable for the appellant to suffer permanent interference with the use of its land that caused significant diminution of its market value in order to serve the greater public good. The appellant asks this Court to reinstate the Board’s award.

The main question on appeal is this: How should we decide whether an interference with the private use and enjoyment of land is unreasonable when it results from construction which serves an important public purpose? The answer, as I see it, is that the reasonableness of the interference must be determined by balancing the competing interests, as it is in all other cases of private nuisance. The balance is appropriately struck by answering the question whether, in all of the circumstances, the individual claimant has shouldered a greater share of the burden of construction than it would be reasonable to expect individuals to bear without compensation. Here, the interference with the appellant’s land caused by the construction of the new highway inflicted significant and permanent loss on the appellant; in the circumstances of this case, it was not unreasonable for the Board to conclude that an individual should not be expected to bear such a loss for the greater public good without compensation.

. . .

The legal framework for the appeal is found in the law concerning injurious affection. Injurious affection occurs when the defendant’s activities interfere with the claimant’s use or enjoyment of land. Such interference may occur where a portion of an owner’s land is expropriated with negative effects on the value of the remaining property. Alternatively, it may arise where, although no land is expropriated, the lawful activities of a statutory authority on one piece of land interfere with the use or enjoyment of another property . . . . In this case, the appellant claimed compensation for injurious affection where no land is taken because the highway construction had significantly impeded access to its land.

. . .

Provided that the Board reasonably carried out the analysis in substance, it was not required to specifically enumerate and refer by name to every factor mentioned in the case law. As La Forest J. made clear in Tock, the factors he enumerated are simply examples of the sorts of criteria that the courts have articulated as being potentially of assistance in weighing the gravity of the harm with the utility of the defendant’s conduct. They do not make up either an exhaustive or an essential list of matters that must be expressly considered in every case. Failure to expressly mention one or more of these factors is not, on its own, a reviewable error.

The Board’s task was to determine whether, having regard to all of the circumstances, it was unreasonable to require the appellant to suffer the interference without compensation. The Board considered the evidence and the leading cases. Although it did not refer to them by name, the Board took into account the relevant factors in this case. In particular, it considered the extent of the changes to Highway 17, the fact that those changes were considered necessary for public safety, the appellant’s knowledge of–and involvement in–the plans to make changes to the highway, and the extent to which the appellant’s concerns about the new highway were taken into account by the respondent in its decision making. The Board concluded that the interference resulting from the construction of the highway was serious and would constitute nuisance but for the fact that the work was constructed pursuant to statutory authority . . . . There was no reviewable error in this approach.

Similarly in my view, the Board did not fail to take account of the utility of the respondent’s activity or fail to engage in the required balancing as the Court of Appeal concluded it had. As we have seen, the Board adverted to the importance of the highway construction. It did not, however, allow that concern to swamp consideration of whether it was reasonable to require the appellant to bear without compensation the burden inflicted on it by the construction. The Board properly understood that the purpose of the statutory compensation scheme for injurious affection was to ensure that individuals do not have to bear a disproportionate burden of damage flowing from interference with the use and enjoyment of land caused by the construction of a public work. It was reasonable for the Board to conclude that in all of the circumstances, the appellant should not be expected to endure permanent interference with the use of its land that caused a significant diminution of its market value in order to serve the greater public good.”