Toronto (City) v. Simone Group Properties Ltd. et al., 2013 ONSC 341

• Judge: Kiteley, Swinton and Ducharme, JJ.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: December 20, 2012
• Jurisdiction: Ontario
• Citations: 2013 ONSC 341;(2013), 303 O.A.C. 354 (DC)

Toronto v. Simone Group Prop. Ltd. (2013), 303 O.A.C. 354 (DC)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MR.014

City of Toronto (appellant) v. Simone Group Properties Limited and Liberata Simone (respondents)

(299/12; 2013 ONSC 341)

Indexed As: Toronto (City) v. Simone Group Properties Ltd. et al.

Court of Ontario

Superior Court of Justice

Divisional Court

Kiteley, Swinton and Ducharme, JJ.

January 28, 2013.

Summary:

The City of Toronto expropriated land. The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act. The City appealed, challenging the Board's award of disturbance damages for business loss that occurred prior to the expropriation date and its failure to reduce the amount of market value compensation because of environmental contaminants on the property. The landowners cross-appealed the Board's refusal to award interest on the disturbance damages.

The Ontario Divisional Court allowed the appeal to the extent of correcting an arithmetical error. The court otherwise dismissed the appeal and cross-appeal.

Expropriation - Topic 342

Right to compensation - Mitigation - Reasonable remedial measures - What constitute - The City of Toronto obtained approval to expropriate industrial property in June 1992, but lacked funds to carry out the project - In June 2001, a project review report recommended the expropriation - The City expropriated the property on October 14, 2005, and served the landowners with Notice of Expropriation on November 9, 2005 - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act, including disturbance damages for business losses incurred as a result of pre-expropriation delay - The City appealed, asserting that the Board erred in failing to reduce the landowners' damages because of their failure to mitigate - The City asserted that the landowners could have avoided the business losses by selling their property to the City at any time after the expropriation was authorized in June 2001 - Section 30 of the Act allowed a claimant to convey title to the expropriated land without prejudice to the claimant's right to have the value determined by the Board at a later date - Instead, the landowners challenged the decision to expropriate and requested a Hearing of Necessity pursuant to s. 6(2) - The Ontario Divisional Court rejected the argument - The Board was aware of the need to consider mitigation and, in fact, reduced the award because of a failure to mitigate between April 1, 1998 and July 1, 1998 - The landowners were successful on the Hearing of Necessity as the report of the Inquiry Officer recommended against the expropriation of all of their land - City Council rejected that recommendation - However, it was reasonable for the landowners to invoke the process available to them under the Act - They should not be denied their losses incurred after the request for the Hearing of Necessity - The City, having decided to expropriate, was responsible for the losses caused by the expropriation process - See paragraphs 31 to 34.

Expropriation - Topic 1062

Measure of compensation - Factors or considerations affecting valuation - Environmental contamination - The City of Toronto expropriated land - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act - The City appealed, asserting that the Board should have made a deduction from the market value for the presence of environmental contaminants because the land was not pristine - The City relied on Tridan Developments Ltd. et al. v. Shell Canada Products Ltd. (Ont. C.A., 2002) - The Ontario Divisional Court rejected the argument - Tridan Developments did not set out a principle of law that the market value of a site with pollutants had to be reduced because of stigma - The Board accepted the evidence of the landowners' expert that there should be no reduction in market value because of the presence of the two contaminants as there was no risk to human health and remediation measures were not required - It carefully explained why it rejected the evidence of the City's experts (Uba and Guoth) supporting a $580,000 reduction - In particular, it rejected Uba's evidence because he rested his opinion that there had been a diminution of the property's value upon Guoth's estimate of the potential "ball park" worst scenario - The Board rejected Guoth's evidence and, consequently, did not accept Uba's evidence - It was reasonable for the Board to do so - See paragraphs 36 to 43.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The City of Toronto obtained approval to expropriate industrial property in June 1992, but lacked funds to carry out the project - The City expropriated the property on October 14, 2005, and served the landowners with Notice of Expropriation on November 9, 2005 - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act, including disturbance damages for business losses incurred as a result of pre-expropriation delay - The City appealed, asserting that the Board erred by, inter alia, failing to set out the legislative provision relied on - The Ontario Divisional Court rejected the assertion - It was obvious from the Board's reasons that it was applying s. 13(2)(b) of the Act, which allowed it to award compensation for "the damages attributable to disturbance" - Moreover, the Board correctly stated that "To be entitled to an award for disturbance damages, the Claimants bear the burden of proving that the damages claimed are the natural and reasonable consequence of the expropriation" - Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (S.C.C., 1997) made it clear that disturbance damages could be incurred in a period prior to formal invocation of the expropriation process and that damages which occurred before the actual expropriation could be caused by the expropriation process - See paragraphs 21 to 24.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The City of Toronto obtained approval to expropriate industrial property in June 1992, but lacked funds to carry out the project - In June 2001, a project review report recommended the expropriation - The City expropriated the property on October 14, 2005, and served the landowners with Notice of Expropriation on November 9, 2005 - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act, including disturbance damages for business losses incurred as a result of pre-expropriation delay - The City appealed, asserting that the Board erred by, inter alia, finding that the landowners suffered business losses as a result of the expropriation - The City asserted that if the expropriation process could be said to have begun in June 2001, the landowners suffered no business losses because of the expropriation decision as they had signed a five year lease in 2000 - Moreover, it asserted that the landowners were not entitled to lost profits as part of disturbance damages - The Ontario Divisional Court rejected the argument, holding that loss of business profits could be compensated as disturbance damages - Unlike in the cases relied on by the City, the landowners were not seeking future profits - They were seeking business losses that they claimed were caused as a result of the delay in the expropriation process - See paragraphs 25 to 27.

Expropriation - Topic 1305

Measure of compensation - Elements of compensation - Disturbance and inconvenience - General - The City of Toronto obtained approval to expropriate industrial property in June 1992, but lacked funds to carry out the project - The City expropriated the property on October 14, 2005, and served the landowners with Notice of Expropriation on November 9, 2005 - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act, including disturbance damages for business losses incurred as a result of pre-expropriation delay - The City appealed, taking issue with, inter alia, the Board's finding that the threat of expropriation caused the landowners to receive less than a reasonable market rate for rent in the period back to 1998 - The Ontario Divisional Court dismissed the appeal - The Board accepted the evidence of the landowners' expert that the landowners experienced diminished rents and protracted vacancy in the property from April 1, 1998 - That was the result of their inability to find a secure long term tenant at market rents because of the City's plan to expropriate the property - That was a reasonable conclusion for the Board to make on the evidence before it - While the City asserted that the landowners should have called the tenants as witnesses to discuss the issue of the rents paid, there was no need for them to do so, given the evidence of their expert about the impact of the contemplated expropriation on the rental income received - See paragraph 28.

Expropriation - Topic 1306

Measure of compensation - Elements of compensation - Business disturbance - [See all Expropriation - Topic 1305 ].

Expropriation - Topic 1668

Measure of compensation - Interest - Elements of compensation on which interest payable - The City of Toronto expropriated land - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act, including disturbance damages for business losses incurred as a result of pre-expropriation delay - The landowners asserted that the Board erred in not awarding interest on the disturbance damages - The Ontario Divisional Court rejected the assertion - In an obiter comment in 747926 Ontario Ltd. et al. v. Board of Education of Upper Grand District (2001), the Ontario Court of Appeal stated that there was no power to award interest on disturbance damages given under s. 33(1) of the Act - The Divisional Court was bound to respect that conclusion which was fully supported by the language of s. 33(1) - The fact that the Act contemplated interest payable on certain types of compensation suggested that the legislature did not contemplate the award of interest on other types of compensation - See paragraphs 48 to 50.

Expropriation - Topic 2207

Practice and procedure - Appeals - Standard or scope of review by courts of decisions of boards - The City of Toronto expropriated land - The Ontario Municipal Board awarded the landowners compensation under the Expropriations Act - The City appealed, challenging the Board's award of disturbance damages for business loss that occurred prior to the expropriation date and its failure to reduce the amount of market value compensation because of environmental contaminants on the property - The City asserted that the court owed no deference to the Board in its interpretation of the Act and therefore the standard of review on a question of law was correctness - The City relied on Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (S.C.C., 1997) (Dell) - The Ontario Divisional Court noted that Antrim Truck Centre Ltd. v. Ontario (Minister of Transportation) (Ont. C.A., 2011) cautioned that the statements about the standard of review in Dell should be read narrowly, given New Brunswick (Board of Management) v. Dunsmuir (S.C.C., 2008) - Antrim noted that the Board has expertise in the interpretation of the Act and legal questions closely related to it - The court concluded that the Board had to be correct in the legal principles to be applied to the determination of business losses, as that involved a question of law and the correct application of Dell - However, most of the City's arguments challenged the Board's application of legal principles to the evidence and its findings of fact - To the extent that the issues were ones of mixed fact and law or factual, the standard of review was reasonableness - See paragraphs 12 to 15.

Expropriation - Topic 2256

Practice and procedure - Evidence - Experts - [See third Expropriation - Topic 1305 ].

Expropriation - Topic 2260

Practice and procedure - Evidence - Evidence re injurious affection - [See third Expropriation - Topic 1305 ].

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, refd to. [para. 12].

Antrim Truck Centre Ltd. v. Ontario (Minister of Transportation) (2011), 281 O.A.C. 150; 2011 ONCA 419, refd to. [para. 13].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 13].

Toronto and Region Conservation Authority v. Gadzala et al. (2006), 211 O.A.C. 29; 266 D.L.R.(4th) 52 (Div. Ct.), refd to. [para. 15].

747926 Ontario Ltd. et al. v. Board of Education of Upper Grand District (2001), 150 O.A.C. 295; 56 O.R.(3d) 108 (C.A.), dist. [para. 26].

Bernard Homes Ltd. et al. v. Board of Education of York Catholic District School (2004), 188 O.A.C. 115 (Div. Ct.), dist. [para. 26].

Tridan Developments Ltd. et al. v. Shell Canada Products Ltd. (2002), 154 O.A.C. 1; 57 O.R.(3d) 503 (C.A.), refd to. [para. 42].

Statutes Noticed:

Expropriations Act, R.S.O. 1990, c. E-26, sect. 33(1) [para. 49].

Counsel:

Brendan O'Callaghan and Matthew Longo, for the appellant;

Anthony Caldwell and Joel Farber, for the respondents.

This appeal was heard on at Toronto, Ontario, on December 20, 2012, by Kiteley, Swinton and Ducharme, JJ., of the Ontario Divisional Court. Swinton, J., released the following decision for the court on January 28, 2013.