Toronto and Region Conservation Authority v. Gadzala et al., (2006) 211 O.A.C. 29 (DC)

• Judge: Chapnik, Epstein and Swinton, JJ.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: April 24, 2006
• Jurisdiction: Ontario
• Citations: (2006), 211 O.A.C. 29 (DC)

Conservation Authority v. Gadzala (2006), 211 O.A.C. 29 (DC)

MLB headnote and full text

Temp. Cite: [2006] O.A.C. TBEd. MY.006

In The Matter Of Section 31 of The Expropriations Act, R.S.O. 1990, c. E.26, As Amended

Toronto and Region Conservation Authority (formerly The Metropolitan Toronto and Region Conservation Authority) (respondent/appellant) v. A. Edward Gadzala, V & E Gadzala Holdings Limited and 412264 Ontario Limited (claimants/respondents on appeal)

(598/04)

City of Toronto (formerly City of Etobicoke) (respondent/appellant) v. A. Edward Gadzala, V & E Gadzala Holdings Limited and 412264 Ontario Limited (claimants/respondents on appeal)

(599/04)

Indexed As: Toronto and Region Conservation Authority v. Gadzala et al.

Court of Ontario

Superior Court of Justice

Divisional Court

Chapnik, Epstein and Swinton, JJ.

April 24, 2006.

Summary:

The City of Toronto and the Toronto and Region Conservation Authority (TRCA) appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the "Motel Strip" located on the shore of Lake Ontario in the former City of Etobicoke. The order awarded compensation arising out of: (a) the TRCA's expropriation of one metre strips from the southerly boundary of 2109 and 2113 Lakeshore Blvd. W. ("the House Properties") and 1.432 acres from 2143 Lakeshore Blvd. W. and 1.379 acres from 2147 Lakeshore Blvd. W. ("the Motel Properties") to extinguish riparian rights and permit development of a public amenity area (including a waterfront drive) along the Lake Ontario shoreline; and (b) the City's expropriation of the balance of the House Properties for a local park. At issue in the appeals was the market value of the Motel Properties and the House Properties, compensation for loss of riparian rights, damages for injurious affection, disturbance damages for delay, and disturbance damages for the loss of a parkland credit.

The Ontario Divisional Court allowed the TRCA’s appeal to the extent of deleting the $4,000,000 for disturbance damages for delay, but otherwise dismissed its appeal. The court allowed the City's appeal to the extent of deleting the $1,850,000 award for loss of opportunity to obtain a parkland credit and varied the order to award interest from January 19, 1998. The balance of the City's appeal was dismissed.

Expropriation - Topic 1058

Measure of compensation - Factors or considerations affecting valuation - Development schemes or plans - The City of Toronto and the Toronto and Region Conservation Authority appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the "Motel Strip" located on the shore of Lake Ontario in the former City of Etobicoke - At issue, inter alia, was whether the Board erred in assessing the market value of the motel properties at $2,100,000 rather than $94,450 - The Board’s valuation was based on a use for 28 stacked townhouses valued at $75,000 per unit - The Ontario Divisional Court held that the Board did not err - In particular, it made no error in in failing to consider the density transfer of 153 units when valuing the expropriated motel properties - Further, the right to compensation was not affected by the probability that the expropriated land would have been dedicated for parkland use if developed - See paragraphs 55 to 75.

Expropriation - Topic 1058

Measure of compensation - Factors or considerations affecting valuation - Valuation of reduction in value of remaining lands - Development schemes or plans - The City of Toronto and the Toronto and Region Conservation Authority appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the "Motel Strip" located on the shore of Lake Ontario in the former City of Etobicoke - The Pointe Gourde rule, as legislated in s. 14(4)(b) of the Expropriations Act, provided that in determining the market value of expropriated land, no account could be taken of any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation was made, or from any expropriation or imminent prospect of expropriation - The Ontario Divisional Court held that the Board did not err in applying the rule and valuing the property on a use for 28 stacked townhouses valued at $75,000 per unit - See paragraphs 76 to 85.

Expropriation - Topic 1058

Measure of compensation - Factors or considerations affecting valuation - Development schemes or plans - The City of Toronto and the Toronto and Region Conservation Authority (TRCA) appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties located on the shore of Lake Ontario - The TRCA submitted that the Board erred in concluding that, in addition to the market value of the land expropriated, the claimants were entitled to compensation for loss of riparian rights if the properties were going to be used for multi-family residential purposes - The TRCA argued that a condominium developer would not pay a premium for the shore and submerged lands and associated riparian rights, knowing that they would have to be dedicated for development purposes - The Ontario Divisional Court held that while the argument was factually sound, it was legally incorrect - The law required that the prospect of a dedication be ignored for the purposes of determining compensation - The compensation payable upon expropriation was not affected by the likelihood that, had the land not been expropriated and the owner had applied to develop it, then the land would likely have been dedicated - See paragraphs 128 to 141.

Expropriation - Topic 1202

Measure of compensation - Injurious affection or damage to unexpropriated portion - Valuation of reduction in value of remaining lands - The City of Toronto and the Toronto and Region Conservation Authority appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the Motel Strip located on the shore of Lake Ontario in the former City of Etobicoke - Rather than calculate an amount for damages for injurious affection, the Board left it to the parties to agree on a quantum, which was to be less than $1,860,000 - The Board held that there should be no set-off pursuant to s. 23 of the Expropriations Act, because the public works built in the area would benefit other adjacent landowners in the same way as the claimants - The Ontario Divisional Court held that the Board did not err on the issue of injurious affection - See paragraphs 87 to 94.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The City of Toronto and the Toronto and Region Conservation Authority (TRCA) appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the "Motel Strip" - The Board ordered the TRCA to pay $4,000,000 disturbance damages in respect of the claim for delay to the claimants' ability to redevelop the lands for residential purposes - This award was based on the Board's findings that from 1986 onward, the achievement of the TRCA's objectives delayed any meaningful development of the claimants' lands - The Ontario Divisional Court held that the Board erred in finding that the expropriation caused disturbance damages where there was no evidence that the claimants had an active business plan pertaining to the affected lands that was delayed by the expropriation process - Without evidence of this nature, the claimants could not establish that disturbance damages were a natural and reasonable consequence of the expropriation - See paragraphs 95 to 117.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The City of Toronto and the Toronto and Region Conservation Authority (TRCA) appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties in the "Motel Strip" - The Board ordered the TRCA to pay $4,000,000 disturbance damages in respect of the claim for delay to the claimants' ability to redevelop the lands for residential purposes - This award was based on the Board's findings that from 1986 onward, the achievement of the TRCA's objectives delayed any meaningful development of the claimants' lands - The Ontario Divisional Court held that the Board erred, inter alia, in implicitly attributing the entire period of delay from 1986 to the expropriation process - In the Motel Strip area, land use planning was very complex, focusing on comprehensive planning involving numerous stakeholders and a multitude of issues - The Board erred in not distinguishing between the adverse consequences that triggered a claim for compensation and those that did not, such as the time needed for the completion of this planning process - The Board also erred in failing to consider mitigation - There was considerable evidence that the claimants had ample opportunity to develop and/or sell their properties - See paragraphs 118 to 120.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The Ontario Divisional Court held that the Ontario Municipal Board erred in awarding $1,850,000 disturbance damages for the lost opportunity for parkland dedication in addition to $1,960,000 compensation for the market value of certain expropriated properties - First, it amounted to double recovery for market value - The properties had already been valued at their highest and best use, the development of 56 residential units - The bundle of rights and potentialities associated with the land included any ability to dedicate the properties as parkland and to obtain a parkland credit - There was no evidence that market value would be increased because of the opportunity to dedicate - Alternatively, the Board erred in determining that the claimants lost their "right" to a parkland credit, as they had no such right - Further, the claimants' inability to obtain a parkland credit was caused not by the expropriation, but by their decision to receive the market value of the lands on expropriation, rather than to dedicate the properties - See paragraphs 142 to 172.

Expropriation - Topic 2207

Practice and procedure - Appeals - Standard or scope of review by courts of decisions of boards - The City of Toronto and the Toronto and Region Conservation Authority appealed an order of the Ontario Municipal Board order dealing with compensation for the expropriation of properties - The Ontario Divisional Court stated that there were no pure questions of law raised in the appeal - Rather, the issues raised were questions of mixed fact and law - Given the Board's expertise in market valuation and expropriation, the appropriate standard of review on all the issues was reasonableness - However, where the Board made an award in the absence of supporting evidence or misapprehended the evidence, that was a reviewable error - See paragraphs 49 to 54.

Expropriation - Topic 2250

Practice and procedure - Evidence - General - [See Expropriation - Topic 2261 ].

Expropriation - Topic 2261

Practice and procedure - Evidence - Hearsay - The City of Toronto and the Toronto and Region Conservation Authority (the appellants) appealed an Ontario Municipal Board order dealing with compensation for the expropriation of properties - The appellants moved to have all references to a Globe & Mail article and the article itself struck from the record - The claimants cross-moved opposing this "unless the new public policy arguments" in the appellants' facta were deleted or struck - The claimants argued that the newspaper article directly contradicted the appellants' new policy arguments - Thus, if it was struck from the record, the policy arguments should incur a similar fate - The Ontario Divisional Court disagreed - The Globe & Mail article quoted a City employee explaining "... how we got a $100 million waterfront park for a fraction of its costs.” - The article was hearsay opinion evidence which was inadmissible and irrelevant to the hearing - The appellants' suggestion that the Board's award would "dramatically expand the scope of expropriation compensation" and "have an impact beyond the scope of this particular case limiting the use of expropriation to complete public projects" constituted argument only and was properly included in their materials - A comment about the alleged impact of the decision below was not fresh evidence - See paragraphs 42 to 45.

Cases Noticed:

Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1 S.C.R. 32; 206 N.R. 321; 97 O.A.C. 81, folld. [para. 34].

R. v. Palmer, [1980] 1 S.C.R. 759; 30 N.R. 181; 50 C.C.C.(2d) 193, refd to. [para. 43].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201; 160 D.L.R.(4th) 193, refd to. [para. 49].

Ryan v. Law Society of New Brunswick (2003), 302 N.R. 1; 257 N.B.R.(2d) 207; 674 A.P.R. 207; 223 D.L.R.(4th) 577; 2003 SCC 20, refd to. [para. 49].

Dr. Q., Re (2003), 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170; 223 D.L.R.(4th) 599; 2003 SCC 19, refd to. [para. 49].

747926 Ontario Ltd. et al. v. Board of Education of Upper Grand District (2001), 150 O.A.C. 295 (C.A.), appld. [para. 51].

Tri-Lag Corp. v. Board of Education of York Region District (2003), 169 O.A.C. 217 (Div. Ct.), appld. [para. 51].

Pollidor Holdings Ltd. v. Minister of Transportation and Communications (1986), 36 L.C.R. 1 (Ont. Div. Ct.), refd to. [para. 54].

Markpal Holdings Ltd. v. Municipality of Metropolitan Toronto (No. 2), 13 L.C.R. 270 (Ont. L.C.B.), refd to. [para. 72].

Meadow Acres Investments Co. v. Metropolitan Toronto (Municipality) (1985), 34 L.C.R. 158 (O.M.B.), affd. [1986] O.J. No. 2494 (Div. Ct.), refd to. [para. 72].

Kramer et al. v. Wascana Centre Authority et al., [1967] S.C.R. 237, refd to. [para. 78].

Starr v. Metropolitan Toronto (1969), 1 L.C.R. 40 (Ont. Co. Ct.), refd to. [para. 92].

Admiral Leaseholds v. Ottawa Carleton (Regional Municipality) (1983), 29 L.C.R. 142 (O.M.B.), refd to. [para. 92].

Parks et al. v. Ontario (Minister of Transportation) (1995), 56 L.C.R. 166 (O.M.B.), affd. (1997), 109 O.A.C. 1; 62 L.C.R. 252 (Div. Ct.), refd to. [para. 92].

Ontario (Minister of Transportation) v. Devine, [2002] O.A.C. Uned. 46; 76 L.C.R. 89 (C.A.), dist. [para. 98].

LaFleche v. Ontario (Minister of Transportation and Communications) (1975), 8 L.C.R. 77 (Ont. Div. Ct.), dist. [para. 98].

City Parking Ltd. v. Toronto (City) (1980), 20 L.C.R. 159; 110 D.L.R.(3d) 73 (Ont. Div. Ct.), refd to. [para. 108].

Black v. Brant (County) (1972), 1 L.C.R. 325 (Ont. L.C.B.), refd to. [para. 112].

Gagetown Lumber Co. v. New Brunswick (Attorney General), [1957] S.C.R. 44; 6 D.L.R.(2d) 657, refd to. [para. 137].

Costello and Dickhoff v. Calgary (City) (1997), 209 A.R. 1; 160 W.A.C. 1; 62 L.C.R. 161 (C.A.), refd to. [para. 159].

Congrégation des témoins de Jéhovah de St-Jérôme-Lafontaine v. Lafontaine (Village), [2004] 2 S.C.R. 650; 323 N.R. 1; 241 D.L.R.(4th) 83; 2004 SCC 48, refd to. [para. 169].

Entreprises Sibeca Inc. v. Frelighsburg (Municipalité) (2004), 325 N.R. 345; 2004 SCC 61, refd to. [para. 169].

R. v. Sheppard (C.), [2002] 1 S.C.R. 869; 284 N.R. 342; 211 Nfld. & P.E.I.R. 50; 633 A.P.R. 50; 162 C.C.C.(3d) 298, refd to. [para. 177].

R. v. Harper, [1982] 1 S.C.R. 2; 40 N.R. 255; 65 C.C.C.(2d) 193, refd to. [para. 177].

Counsel:

Paul R. Henry and Robert B. Lawson, for the respondent/appellant, Toronto and Region Conservation Authority;

Stephen Waqué and Sean L. Gosnell, for the claimants/respondents on appeal, in both actions;

John S. Doherty and Mark Wiffen, for the respondent/appellant, City of Toronto.

This appeal was heard at Toronto, Ontario, on December 12-15, 2005, by Chapnik, Epstein and Swinton, JJ., of the Ontario Divisional Court, who delivered the following decision on April 24, 2006.