Court File and Parties

Court File No: 1633

Date: 2007-11-23

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Re: NEIL HENERY and LUCY HENERY Appellants (Claimants)

• and -

THE CORPORATION OF THE CITY OF LONDON Respondent (Respondent in Appeal)

Before: ASTON, HOWDEN and LOFCHIK, JJ.

Counsel: S. Rayman, for the Appellants J. Nichols, G. Belch and J. Page, for the City of London

Heard at London: November 20, 2007

By the Court

ENDORSEMENT

[1] Neil and Lucy Henery are claimants under the Expropriations Act as a result of a temporary easement taken by the City of London for the purpose of a road-widening project on Springbank Drive. The expropriation occurred on November 7, 2003 and expired on August 31, 2005. A notice of arbitration, statement of claim and reply followed in early 2006.

[2] This appeal is taken by Mr. and Mrs. Henery against a decision and order of the Ontario Municipal Board dated February 23, 2007 on two motions: (i) a refusal and production motion by the appellants; and (ii) a motion to strike paragraphs 19, 21, 22, 23 and 24 of the statement of claim, brought by the respondent City. The paragraphs in question form the portion of the appellants’ pleading claiming reduction in market value of what is described as “the remaining land” both during the term of the temporary easement when construction of the project was ongoing and following its expiry. The impacts from the widened, busier Springbank Drive and sidewalks are claimed to have depreciated the value of the “remaining lands” and to have caused “business loss” to the “remaining lands.”

[3] As to the production and refusal motion, the Board granted to the appellants relief in respect of certain refusals by the City to answer questions on discovery. However, it refused to order the City to produce settlement agreements and reports requested by the appellants despite the Board’s finding that those documents, relating to both the temporary takings east of the appellants’ property and the partial takings to the west, meet the test for production, i.e. semblance of relevance. The Board found that, as no application had been made under the Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c.M.56 (“MFIPPA”), an order known as M-852 on an application under MFIPPA applied to deny an order for production. The Board adopted the reasons of the inquiry officer for order M-852, a request for a police file on a hit and run accident by the Superintendent of Insurance for the Motor Vehicle Accident Claims Fund who was a party to the litigation arising from the accident. That decision may be distinguished on its facts as the Ottawa Carlton Police Services Board, the party from whom the information was being sought, was not a party to the litigation.

[4] On the motion to strike, the Board held that the claim for damages for injurious affection for loss of market value following expiry of the temporary expropriation of the easement and the end of construction, cannot stand. That finding applied to the claim for injurious affection under the first branch of the definition on a partial taking – s. 1(1)(a)(i): “the reduction of market value thereby caused to the remaining land of the owner by the acquisition or by the construction of the works thereon or by the use of the works thereon or any combination of them.” In doing so, the Board found that “this is a situation where no part of the construction of Springbank Drive remained on the Henerys’ property after the easement expired except perhaps the driveway extension to give the Henery’s access to it.” (Board’s decision, page 5).

[5] The Board followed Wilson v. London (City) (1999), 73 L.C.R. 255 (Div. Ct.). Wilson followed the English Court of Appeal decision in Edwards v. Minister of Transport, [1964] 2 Q.B. 135, that the statutory authority must have constructed or used the works on the portion of the land taken in order to support a claim under s. 1(1)(a)(i) of the Expropriations Act for injurious affection. This is known as the Edwards Rule, and though it was not recognized in the Royal Commission Report which led to the Ontario Expropriations Act, the insertion in s. 1(1)(a)(i) of the word “thereon” has been interpreted to invoke the Edwards Rule for claims under that provision.

[6] The issues in this case concern matters of law. The standard of review is correctness.

[7] In Wilson and the other authorities following it, there is a lack of a complete analysis in those cases using the modern approach to statutory interpretation enunciated in Sullivan and Driedger on the Construction of Statutes (4th Ed.) by R. Sullivan, (Butterworths) 2002 at p. 1:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context, and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27; Bell ExpressVu Partnership v. Rex (2002), S.C.C. 42;

The “Edwards Rule” and the interpretation in Wilson have not been subjected to the in depth analysis epitomized by Dell Holdings Ltd. v. T.A.T.O.A. (1997), 1997 400 (SCC), 60 L.C.R. 81 (S.C.C.)

[8] Nevertheless, there is no doubt that at this point in time, the Edwards Rule has been applied by this court and the Board as having been incorporated in s. 1(1)(a)(i) of the Act. This is so, despite criticism of its adoption in authoritative texts such as The New Law of Expropriation by J. Coates and S. Waqué (Carswell 1986) at para. 4.11.1 and The Law of Expropriation and Compensation in Canada (2nd Ed.) by E. C. E. Todd (Carswell 1992), at p. 340. The purposive approach to the Expropriations Act in Dell Holdings is not something to be discarded as the Board did in its decision, dismissing it as one of several cases not necessary to be paid attention to because, on the basis of the pleadings and no other evidence, the Board purported to find “no injury that is special or unforeseen or could not have been anticipated by the Henery’s when they purchased.” That remark, together with other speculative reasoning devoid of any factual record, is not properly part of an approach to a motion to strike where the pleadings are assumed to be true and no affidavit evidence was before the tribunal. The definition of injurious affection and the purpose of full and fair compensation to those expropriated attract no such onus to a claimant.

[9] Having heard the submissions of counsel, it is clear to us that there are fundamental flaws in the claimants’ present pleading which, even read generously, does not give fair notice of the claimants’ real position. For instance, there is no allegation in the statement of claim of the position assumed by the appellants’ counsel that part of the construction of the road-widening occurred on the appellants’ property and part of the works are situate on the appellants’ property. Furthermore, there is no linkage in the pleadings between the fact that the taking was a temporary easement and the claim of continuing reduction to the market value of the entirety of the appellants’ property. Throughout, injurious affection is referred to as a business loss, yet the appellants reportedly have withdrawn their claim for business loss in relation to a hair salon without any amendment of the pleading to clarify what business loss continues to be claimed and what does not. If a claim is withdrawn, the appropriate amendment should be made so that the Board and the opposing party have notice of the grounds for the claim. Delivery of particulars is not sufficient in these circumstances.

[10] Additionally, the statement of claim repeatedly refers to the “remaining lands”, seemingly assuming that this was a taking of part of the land permanently and not a temporary taking of a limited interest in the land. The entire property remains the property of the appellants as only a temporary partial interest was taken.

[11] If there is a claim to be made for continuing loss of market value in the form of injurious affection, in addition to the claim for the value of the temporary taking itself, it must be founded on a factual base set forth in the pleadings. It may well be that if part of the works and part of the construction were or are on the portion of the appellants’ land subject to the temporary easement as counsel alleges, this may be important if not vital to mounting a claim for loss resulting from the effect of the entire project. At present, that is not the case presented in the statement of claim.

[12] It was said by Justice Holmes that the life of the law is not logic but experience. Nevertheless one must recognize what has gone before in mounting a case attempting to make inroads into the application of existing law, such as challenging the limiting approach to s. 1(1)(a)(i) in Wilson v. City of London. As was stated by the Supreme Court of Canada in Hunt v. Carey Canada Inc. (1992), 959 at para. 52:

The fact that a pleading reveals “an arguable, difficult or important point of law” cannot justify striking out part of the statement of claim. Indeed, I would go so far as to suggest that where a statement of claims reveals a difficult and important point of law, it may well be critical that the action be allowed to proceed. Only in this way can we be sure that the common law in general, and the law of torts in particular, will continue to evolve to meet the legal challenges that arise in our modern industrial society.”

[13] In this case, the facts as put forth by counsel for the appellants, who did not draft their pleadings, indicate that there may be a viable claim under s. 1(1)(a)(i) for injurious affection, but it is not properly pleaded in the present statement of claim. Amendments are required in order to put forth the case as counsel suggests.

[14] Without being taken to agree with the reasons given by the Board, we cannot disagree with the Board’s conclusion to strike the paragraphs that it did as the pleading now stands. The claimants, of course, will have the right to amend the statement of claim and should do so forthwith, if they wish to put forth a supportable and tenable claim under s. 1(1)(a)(i) of the Expropriations Act.

[15] The claimants have the right to put forward a claim for personal and business losses under s. 1(1)(a)(ii) if there are facts properly supporting such a claim. In reaching this conclusion, we do not accept the Board’s arbitrary direction that “it will not permit the claimants to categorize damages as damages under s. 1(1)(a)(ii).” The appellants may allege facts and claim such damages as are consonant with their position and tenable in law. It is not for the Board or this court to prevent claims from being made within the parameters of the Act which may challenge the fine edges of those parameters.

[16] As to the Board’s refusal to order the productions requested, the Board found that the requested reports and settlement documents regarding properties to the west and to the east of the appellants’ property met the test in the Civil Rules which are incorporated into the Board’s rules of procedure. Those documents met the test of semblance of relevance, whether the properties involved were subject to takings of a limited interest only or to a partial taking of land, because those reports all involve a determination of market value which is relevant to part of the appellants’ claims. We have no reason to disagree with the Board’s finding. The M.F.I.P.P.A is made subject to the proper demands of the civil rules and the process of litigation. Section 51(1) and (2) of M.F.I.P.P.A. read:

(1) This Act does not impose any limitation on the information otherwise available by law to a party to litigation.

(2) This Act does not affect the power of a court or a tribunal to compel a witness to testify or compel the production of a document.

[17] The Board erred in law in presuming, despite the express words of s. 51 and the production rules of the Board and this court, that an application under the M.F.I.P.P.A. procedure was a condition precedent. It is not.

[18] In the result, the appeal is allowed from the Board’s refusal to order production of the requested reports and settlement documents in relation to properties neighbouring the appellants’ property, and those documents will be produced forthwith to counsel for the appellants, subject to the implied undertaking that they will only be used for the purpose of this claim under the Expropriations Act. The Board’s order to strike paras. 19, 21, 22, 23 and 24 of the statement of claim remains in place, subject to the right of the appellants to deliver an amended statement of claim within 20 days hereof. The respondent shall have 20 days to deliver an amended reply, if deemed necessary.

[19] If counsel are unable to agree on costs, written submissions may be made within 20 days.

“Justice D.R. Aston” Aston Sr. J.

“Justice P.H. Howden” Howden J.

“Justice T.R. Lofchik” Lofchik J.

Released: November 23, 2007