Compensation Provisions Deep-Dive (s.13-18)
s.13: Market Value Determination
Statute: "The compensation payable for land shall be based upon the market value thereof."
Key principles:
- Valuation date: Earlier of notice of expropriation service (Form 7) or plan registration (s.13(2))
- Highest and best use: Value based on property's optimal legal use, not current use
- Example: Agricultural land zoned industrial → valued at industrial land value, not farm value
- Special purchaser excluded: Cannot include premium a specific buyer would pay
- Example: Adjacent landowner would pay 20% premium to assemble parcels → premium excluded, use market value to typical buyer
- Forced sale discount: Not applicable - owner entitled to full market value despite forced sale
- Rationale: Public should bear cost of expropriation, not penalize owner for involuntary sale
Case law: Diggon-Hibben Ltd. v. The King [1949] S.C.R. 712 - market value defined as price willing buyer and willing seller would agree upon in open market
s.14: Special Difficulties in Relocation
Statute: "In determining compensation, there may be taken into account... any special difficulties in relocation."
Application:
- Medical needs: Elderly owner requires proximity to hospital (limited housing near hospitals) → additional compensation for difficulty relocating
- Business disruption: Specialized business (auto body shop with environmental permits) difficult to relocate → compensation for extended relocation period, permit transfers
- Cultural ties: Long-term residence in ethnic enclave (Portuguese community) → compensation for loss of community services access
Limits: Not unlimited - must be reasonable and causally connected to expropriation
s.18(1): Disturbance Damages Components and Limitations
Statute: "The owner... is entitled to be paid... (a) the market value of the land; (b) an allowance to compensate for disturbance."
Disturbance components:
- Moving costs: Reasonable costs of relocating household or business
- Legal and appraisal fees: Professional fees incurred due to expropriation
- Temporary accommodation: If relocation requires temporary housing
- Business losses: Revenue losses during reasonable relocation period
Limitations:
- Causation: Must be caused by expropriation (but-for test)
- Reasonableness: Costs must be reasonable (not gold-plated)
- Foreseeability: More liberal than tort law (broadly compensable if reasonably foreseeable)
- Mitigation: Duty to mitigate losses (cannot inflate costs unnecessarily)
Case law: Gossen v. Toronto (City) [2003] O.J. No. 4557 (Ont. Div. Ct.) - disturbance damages must be reasonable and causally connected
s.18(2): Injurious Affection from Construction vs. Permanent Use
s.18(2)(a): Injurious affection "from the carrying out of the works and not from the use of the works when constructed"
- Construction impacts: Temporary noise, dust, vibration, traffic disruption during construction period
- Quantification: Rent reduction during construction, business losses, property damage (cosmetic vibration damage)
s.18(2)(b): Injurious affection "from the use of the works after construction thereof"
- Permanent impacts: Ongoing noise from highway traffic, visual obstruction from transmission line, loss of privacy from elevated transit
- Quantification: Permanent value reduction (before/after market value)
Case law: Antrim Truck Centre Ltd. v. Ontario (Transportation) (2005), 75 O.R. (3d) 1 (C.A.) - four-part test for injurious affection:
- Damage must result from authorized public work
- Damage must be caused by execution or use of statutory powers
- Damage must result in diminished market value
- Damage must be special and not general (affects claimant specifically, not public generally)
s.18(3): Non-Compensable Items
Statute: "No compensation shall be paid for... (b) the loss of business or other income, or the loss of goodwill or any other intangible."
Business goodwill: NOT compensable
- Example: Restaurant loses 30% of customers due to highway relocation → no compensation for lost customer base
- Rationale: Goodwill is intangible, difficult to value, owner can rebuild elsewhere
Trade fixtures: Compensable (s.18(3) excludes "intangibles" but trade fixtures are tangible)
- Depreciated value of equipment, fixtures removed from premises
Revenue losses: Limited compensation
- Compensable: Losses during reasonable relocation period (disturbance damages)
- Not compensable: Ongoing business losses after relocation complete (lost income is intangible)
Procedural Requirements Analysis (s.5-12)
s.6: Approving Authority Requirements
Statute: "No land shall be expropriated by an authority except with the approval of the approving authority."
Approving authority (s.1 definitions):
- Municipal expropriations: Ontario Land Tribunal (OLT)
- Provincial Crown: Lieutenant Governor in Council (Cabinet)
- Agencies: Varies by enabling statute
Council resolution requirement:
- Municipality must pass resolution authorizing application for approval
- Resolution must identify specific lands and purpose
- Example: "RESOLVED that the City apply to the OLT for approval to expropriate Part 1 on Plan 59R-1234, being 123 Main Street, for construction of arterial road under Municipal Act, 2001, s.11"
s.7: Inquiry Officer Appointment and Report
Statute: "The approving authority may appoint a person to inquire into and report upon the proposed expropriation."
Purpose: Independent investigation of expropriation necessity, public interest
- Not adversarial hearing (officer investigates, not adjudicates)
- Officer reports to approving authority (recommendation, not binding decision)
Inquiry scope:
- Necessity of taking
- Alternative sites considered
- Impact on owners
- Public interest
Timeline: No statutory deadline (can delay approval process months)
s.9: 3-Month Registration Window (Computation, Expiry Consequences)
s.9(2): "Where an expropriation plan is not registered within three months after the approval becomes final, the approval expires and is of no effect."
Computation:
- Start: Date approval becomes final (approval date if no appeal filed, or appeal decision date)
- End: 90 calendar days later (NOT business days)
- No extension: If day 90 is weekend/holiday, deadline does NOT extend
Consequences of expiry:
- Approval void - cannot register plan
- Must re-apply for new approval (no guarantee of second approval)
- Delay, cost, political risk
Case law: Toronto (City) v. Crombie - strict interpretation of 3-month deadline, no discretion to extend
s.11: Service Requirements
s.11(1): Service methods - personal service, registered mail, substituted service
Personal service:
- Hand-deliver form to owner
- Proof: Affidavit of service (date, time, location, identification of person served)
Registered mail:
- Mail to owner's last known address
- Proof: Canada Post tracking showing delivery
- Deemed service: 5 days after mailing (even if not delivered)
Substituted service:
- If owner cannot be located or refuses service
- Court order required
- Methods: Post on property, publish in newspaper, serve on solicitor
Hearing and Appeal Provisions (s.19-30)
s.23: Hearing Request Timeline (Within 1 Year of Service)
s.23(1): "Any owner... may, not later than one year after service of the notice of expropriation upon the owner, require the expropriating authority to refer to the Tribunal for determination the question of compensation."
Limitation period: 1 year from Form 7 service (strictly enforced)
- Service date: Date Form 7 received (personal service) or 5 days after mailing (registered mail)
- Request deadline: 365 days later
- No extension: Discretion to extend, but must show special circumstances
Request method: Written notice to expropriating authority
- No specific form required (but should clearly state intention to refer to OLT)
s.27: OLT Jurisdiction and Powers
OLT role: Adjudicate compensation disputes (not expropriation approval)
Jurisdiction:
- Determine market value (s.13)
- Determine disturbance damages (s.18(1))
- Determine injurious affection (s.18(2))
- Cannot challenge expropriation itself (approval is final, only compensation disputed)
Powers:
- Hear evidence (appraisals, expert witnesses, owner testimony)
- Inspect property
- Award compensation (not bound by authority's offer or owner's claim)
s.30: Divisional Court Appeal (Errors of Law Only)
s.30: Appeal to Divisional Court "on a question of law"
Appealable:
- Legal errors (misinterpretation of statute, incorrect legal test)
- Procedural unfairness (denied opportunity to present evidence)
NOT appealable:
- Findings of fact (OLT's valuation conclusions are final)
- Weight of evidence (Divisional Court will not re-weigh appraisals)
Standard of review: Correctness (legal errors), reasonableness (mixed fact/law)
Case Law Application to Statutory Interpretation
Antrim Truck Centre - Injurious Affection Test
Facts: Highway realignment eliminates direct access to truck dealership
Test (four-part):
- Authorized work: Highway construction authorized by statute
- Statutory powers: Damage caused by exercise of statutory power (not negligence)
- Market value diminution: Property value decreased due to loss of access
- Special vs. general injury: Claimant specifically affected (not general public)
Application: All elements met → injurious affection compensable
Highway Properties - Business Losses Compensability
Facts: Hotel expropriation, owner claims lost business income
Holding: Business losses compensable only during reasonable relocation period
- Not compensable: Ongoing losses after relocation (s.18(3) excludes loss of income)
- Compensable: Revenue losses during 6-month relocation period (disturbance damages)
Gossen - Disturbance Damages Reasonableness
Facts: Owner claims $500,000 disturbance (moving, legal, business losses)
Holding: Disturbance must be reasonable and causally connected
- Moving costs reasonable: $25,000
- Legal fees excessive (claimed $150,000, awarded $40,000)
- Business losses inflated (claimed 2-year loss, awarded 6-month reasonable relocation)
Principle: Duty to mitigate, reasonableness standard