COURT FILE NO.: 376/05

DATE: 20070122

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: Canadian tire corporation V. chair of management board of cabinet

BEFORE: SMITH, E. MACDONALD AND CAMERON JJ.

COUNSEL: Ian Blue, Q.C. and Eunice Machado, for the Appellant

Thomas C. Marshall, Q.C., for the Respondent

HEARD: May 17 and 18, 2006 at Toronto

E N D O R S E M E N T

[1] In a 16-day hearing followed by 2 days of argument, the Ontario Municipal Board (“OMB”) dismissed claims by Canadian Tire Corporation (“CTC”) for compensation for injurious affection, business loss or disturbance damages to CTC’s property located at 7945 Bramalea Rd., Brampton. This is CTC’s former retail store 305. The property was located at the Southeast corner of Bramalea Rd. and Steeles Ave. and is abutted on the south by CNR right of way. South of the right of way was the right of way of future Highway 407.

Standard of Review

[2] Appeals are governed by s. 31 of the Expropriations Act, R.S.O. 1990, c.E.26. Owing to the expertise of the OMB we ought not to disturb findings of fact unless we conclude that the OMB’s findings constitute a palpable and overriding error. To decide otherwise would make the OMB hearing a necessary evil with little effect. Having heard and seen the viva voce witnesses, its finding deserves a deference similar to a trial judge.

[3] There being no privative clause or denial of appeal we are of the view that on questions of law the standard of review is correctness.

Legal Issues

[4] In 1976, before the retail store was built, the Ministry of Transport (“MOT”) issued a Building and Land Use Permit saying that the South entrance

will be tolerated as a temporary access. However at the request of the MOT or the Municipality the entrance will be removed and relocated at a minimum distance of 730 ft. from the CNR intersection with no claim against the MOT.

[5] In December, 1979, in seeking rezoning for a retail store, CTC conveyed to the Municipality land on the East side of Bramalea Rd. for the future widening of Bramalea Rd., subject to a right of way 730 ft. to the North. No right of way was granted over the South entrance.

[6] In 1980 the North access was built. The store opened in late 1980.

[7] In 1989 the acquired land as well as a part of the CTC property was designated as a “controlled access highway” to construct an overpass over Highway 407.

[8] On February 7, 1995, CMB, on behalf of the MOT, expropriated commercial, as opposed to retail, lands and the South access was closed.

[9] In November, 1995, CMB paid $6.7 million to CTC which released CMB from any further claims except:

a) injurious affection respecting the reduction of market value of the Remaining Lands, and

b) disturbance re: acquisition and development of Lots 5 and 6 for access and parking.

These are the claims that are the subject matters of this appeal.

[10] The overpass was completed and opened on June 14, 1997. Traffic increased following the opening. There was some queuing and inconvenience for traffic accessing the store from the right lane. There were people using the right lane to cut through the parking lot to travel east on Steeles Ave.

[11] In any event, the South entrance was of little utility to the retail store. However, the commercial traffic and employees had to now use the North entrance along with the retail customers.

[12] There could be no claim against the MOT for damages because of traffic problems arising out of the closing of the South entrance, owing to the release in 1976.

Expropriation Act Claims

[13] CTC is left with claims for injurious affection for loss of profits from the remaining lands not expropriated and disturbance damages.

[14] “Disturbance” is defined as a wrong done to an incorporeal hereditament by hindering or disquieting the owner in the enjoyment of it (Blacks Law Dictionary – 6th ed.). We can see no disturbance damages, especially in view of the 1976 exemption of damages for the closing of the South entrance.

[15] We do see damages for injurious affection attributable to a loss of profits. While profits increased, in that sales were up by 1% for the period from June 1997 until September 22, 1999, the customer count was down by 8%. However, we cannot say that this was not due substantially, if not entirely, to the closing of the South entrance. Traffic was up following the opening of the overpass in June, 1997. The profits were the highest ever in the year ended August, 1999.

[16] The OMB adopted an estimated expected growth rate in profits from June 1997 to September, 1999 of 2% per year, based on an expert’s opinion that population growth and purchasing power in store 305’s trading area was stagnant or decreasing unlike the areas of other stores, which it then found not to be comparable. The profits should not have been expected to grow more. While we see that the drop in sales was probably greater we cannot say that most, if not all, of the drop in sales was due to the shutting of the South entrance. There is no finding of how much was due to closing the South entrance and how much to other causes.

[17] For the period from September 22, 1999 to November 14, 2000, the opening of store 411 to the opening of a new and larger 305, profits were down by 18.8%.

[18] This latter amount can be explained by a “cannibalization” by store 411 of the sales of store 305, that is “where store A eats the lunch of store B”. It was estimated by CTC in an internal report prepared in September 1997 that the loss would be $3.6 million, the same amount. We think this must be ignored because it was CTC’s strategic marketing decision to open store 411.

[19] The decision to open a new 305 made in April, 1999 was consistent with CTC’s policy of relocating and opening larger stores to meet big box store competition. It would be impossible to compare the new store with old store profits and remove the element of corporate policy to move to the new store.

[20] Beyond November 15, 2000 we think the damages too speculative to warrant a finding. In April, 1999, before store 411 was opened, CTC made the decision to open a new and larger store 305 in a better location. The first offer to purchase was made on August 3, 1999. The land was purchased on December 8, 1999 and the store was opened on November 15, 2000.

[21] After the closing of old 305, the lands were retained by CTC and their use converted to a distribution centre. It is impossible to estimate the difference in value between the cost of the new and the value of the old. Again, it was in the context of moving to a larger store which had already been decided. We reject Mr. Blue’s claim for extra costs.

DECISION

[22] There was no palpable and overriding error in the OMB finding that the CTC did not have a valid claim for injurious affection, business loss or disturbance. We would dismiss the appeal.

COSTS

[23] If the parties cannot agree, costs may be addressed in writing. The respondent shall make his submissions to the President of the panel within 20 days and the applicant/appellant will reply within 15 days thereafter.

_____________________________

SMITH J.

_____________________________

E. MACDONALD J.

_____________________________

CAMERON J.

DATE: January 22, 2007