Antrim Truck Centre Ltd. v. Her Majesty the Queen in Right of the Province of Ontario, as represented by the Minister of Transportation [Indexed as: Antrim Truck Centre Ltd. v. Ontario (Minister of Transportation)]
106 O.R. (3d) 81
2011 ONCA 419
Court of Appeal for Ontario,
Doherty, Watt and Epstein JJ.A.
June 2, 2011
Expropriation -- Injurious affection -- Compensation -- Compensation for cost of relocating business only available under Expropriation Act where land is taken -- Expropriations Act, R.S.O. 1990, c. E.26.
Expropriation -- Injurious affection -- "Construction not the use" test -- Claimant owning truck stop on Highway 17 -- Province constructing new highway which rerouted traffic away from Highway 17 -- Ontario Municipal Board not erring in finding that interference with access to claimant's property was caused by construction and not use of new highway.
Expropriation -- Injurious affection -- Nuisance -- Claimant owning truck stop on Highway 17 -- For public safety reasons, respondent constructing new highway which rerouted traffic away from Highway 17 -- Ontario Municipal Board reasonably concluding that interference with claimant's property was substantial -- Board's analysis of whether interference was unreasonable was flawed as it failed to consider character of neighbourhood and any abnormal sensitivity of claimant and failed to recognize elevated importance of utility of respondent's conduct where interference is product of essential public service -- Interference not unreasonable.
Torts -- Nuisance -- Court required to balance competing interests of parties in determining whether plaintiff has successfully made out case in nuisance based on interference with use or enjoyment of property -- Plaintiff not required to prove that allegedly affected land is proximate to land from which interference emanates.
The claimant owned a successful truck stop on Highway 17. For public safety reasons, the respondent constructed a new section of Highway 417. As a result, traffic was rerouted away from Highway 17. Taking the position that the undertaking severely impeded the road access to the truck stop and therefore substantially interfered with its use and enjoyment of its property, the claimant applied to the Ontario Municipal Board (the "OMB") for a determination of the compensation to which it was entitled for injurious affection under the Expropriations Act. The OMB found that the claimant had made out the tort of nuisance, a necessary element of its claim based on injurious affection, and that the interference with the claimant's land was the result of the construction of Highway 417 rather than its use, also a necessary element of its claim. The OMB awarded the claimant damages of $393,000 for injurious affection. The respondent appealed to the Divisional Court and the claimant cross-appealed. The court found that the definition of and test for nuisance was a question of law that should be reviewed on a standard of correctness, and that the application of the law of nuisance was a question of mixed fact and law that engaged the OMB's expertise and was reviewable on a standard of correctness. It found that the standard of reasonableness applied [page82 ]to the Board's balancing of competing interests. It found that both the definition and the application of the "construction not the use" test should be reviewed on a standard of reasonableness. Finally, it found that the issue raised by the claimant with respect to damages was reviewable on a standard of correctness since it involved a question of law outside the Board's expertise. The court upheld the Board's finding that the claimant had made out the tort of nuisance and that the interference with the claimant's land was the result of the construction, not the use, of Highway 417. The appeal and cross-appeal were dismissed. The respondent appealed and the claimant cross-appealed.
Held, the appeal should be allowed; the cross-appeal should be dismissed.
The Divisional Court applied the appropriate standards of review.
To constitute a legal nuisance, the annoyance of discomfort must be substantial and unreasonable. The assessment of the unreasonableness of the interference is undertaken through the consideration of four factors: (1) the severity of the interference; (2) the character of the neighbourhood; (3) the utility of the defendant's conduct; and (4) the sensitivity of the plaintiff. In determining whether a plaintiff has successfully made out a case in nuisance based on interference with the use or enjoyment of the affected property, the court must balance the competing interests of the parties involved. A plaintiff is not required to prove that the land allegedly affected is proximate to the land from which the interference emanates. The OMB reasonably concluded that the interference with the claimant's property was substantial. However, its analysis of whether the interference was unreasonable was flawed. It failed to consider the character of the neighbourhood and any abnormal sensitivity of the claimant. Had it considered those factors, it would have found that they supported the reasonableness of the interference. Moreover, it failed to recognize the elevated importance of the utility of the respondent's conduct where the interference is the product of an essential public service. The actions of the respondent were not only socially beneficial, they were necessary. Had the OMB given the appropriate weight to that factor, the scales would have heavily tilted toward a finding that the interference was reasonable.
The OMB did not err in finding that the claimant satisfied the "construction not the use" test. The interference alleged was the change in the access to the truck stop. That was the product of the physical changes to Highway 17, which forced traffic travelling in one direction to take a detour to reach the property.
The OMB did not err in refusing to award compensation for the cost of relocating the truck stop. The Expropriation Act provides compensation for relocating a business only where land is taken. Where, as here, that is not the case, the entitlement to compensation is limited to the reduction in the market value of the land injuriously affected and personal and business damages.
APPEAL AND CROSS-APPEAL from decision of the Divisional Court (Wilson, Hill and Lax JJ.) (2010), 2010 ONSC 304, 100 O.R. (3d) 425, [2010] O.J. No. 156 (Div. Ct.) dismissing the appeal and cross-appeal from the order of the Ontario Municipal Board.
Cases referred toMandrake Management Consultants Ltd. v. Toronto Transit Commission, 1993 9417 (ON CA), [1993] O.J. No. 995, 102 D.L.R. (4th) 12, 62 O.A.C. 202, 11 C.E.L.R. (N.S.) 100, 15 M.P.L.R. (2d) 131, 40 A.C.W.S. (3d) 203 (C.A.), apld Airport Realty Ltd. v. Newfoundland (Minister of Works, Services, and Transportation), [2001] N.J. No. 245, 2001 NFCA 45, 205 Nfld. & P.E.I.R. 95, 39 Admin. L.R. 255, 44 R.P.R. (3d) 175, 108 A.C.W.S. (3d) 308; Archibald v. Canada (1893), 1893 186 (CA EXC), 3 Ex. C.R. 251; Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, 329 N.B.R. (2d) 1, 64 C.C.E.L. (3d) 1, 164 A.C.W.S. (3d) 727, EYB 2008-130674, J.E. 2008-547, [2008] CLLC Â220-020, 170 L.A.C. (4th) 1, 372 N.R. 1, 69 Imm. L.R. (3d) 1, 291 D.L.R. (4th) 577, 69 Admin. L.R. (4th) 1, 95 L.C.R. 65, D.T.E. 2008T-223; [page83 ]Jesperson's Brake and Muffler Ltd. v. Chilliwack (District), 1994 1662 (BC CA), [1994] B.C.J. No. 404, 40 B.C.A.C. 279, 88 B.C.L.R. (2d) 230, 45 A.C.W.S. (3d) 1240 (S.C.) [Leave to appeal to S.C.C. refused [1994] S.C.C.A. No. 177, 93 B.C.L.R. (2d) xxxvii]; R. v. Loiselle, 1962 72 (SCC), [1962] S.C.R. 624, [1962] S.C.J. No. 44, 35 D.L.R. (2d) 274; St. Pierre v. Ontario (Minister of Transportation and Communications), 1987 60 (SCC), [1987] 1 S.C.R. 906, [1987] S.C.J. No. 27, 39 D.L.R. (4th) 10, 75 N.R. 291, 22 O.A.C. 63, 40 C.C.L.T. 200, 45 R.P.R. 298, 4 A.C.W.S. (3d) 343, affg (1983), 1983 1890 (ON CA), 43 O.R. (2d) 767, [1983] O.J. No. 3219, 2 D.L.R. (4th) 558, 22 A.C.W.S. (2d) 455 (C.A.); Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (1997), 1997 400 (SCC), 31 O.R. (3d) 576, [1997] 1 S.C.R. 32, [1997] S.C.J. No. 6, 142 D.L.R. (4th) 206, 206 N.R. 321, J.E. 97-294, 97 O.A.C. 81, 45 Admin. L.R. (2d) 1, 36 M.P.L.R. (2d) 163, 7 R.P.R. (3d) 1, 60 L.C.R. 81, 68 A.C.W.S. (3d) 665; Windsor (City) v. Larson (1980), 1980 1573 (ON SC), 29 O.R. (2d) 669, [1980] O.J. No. 3706, 114 D.L.R. (3d) 477, 5 A.C.W.S. (2d) 56 (Div. Ct.), consd Other cases referred to 340909 Ontario Ltd. v. Huron Steel Products (Windsor) Ltd. (1992), 1992 7668 (ON CA), 10 O.R. (3d) 95, [1992] O.J. No. 1694 (C.A.), affg (1990), 73 O.R. (2d) 641, [1990] O.J. No. 997, 21 A.C.W.S. (3d) 1242 (H.C.J.); Antrim Truck Centre Ltd. v. Ottawa (City) (2010), 100 O.R. (3d) 425, [2010] O.J. No. 156, 2010 ONSC 304, 91 R.P.R. (4th) 41, 258 O.A.C. 1, 318 D.L.R. (4th) 229, 100 L.C.R. 32, 188 A.C.W.S. (3d) 718 (Div. Ct.), affg [2009] O.M.B.D. No. 1, 96 L.C.R. 100 (O.M.B.); Autographic Register Systems Ltd. v. Canadian National Railway Co., 1933 579 (CA EXC), [1933] Ex. C.R. 152; Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, [1996] S.C.J. No. 116, 144 D.L.R. (4th) 1, 209 N.R. 20, J.E. 97-632, 50 Admin. L.R. (2d) 199, 71 C.P.R. (3d) 417, 69 A.C.W.S. (3d) 586, REJB 1997-00386; Coady v. Port Hope (Town) (1987), 38 L.C.R. 66 (O.M.B.); Empringham Catering Services Ltd. v. Regina (City), [2002] S.J. No. 37, 2002 SKCA 16, [2002] 3 W.W.R. 286, 217 Sask. R. 138, 26 M.P.L.R. (3d) 1, 111 A.C.W.S. (3d) 949; Grace v. Fort Erie (Town), 2003 48456 (ON SC), [2003] O.J. No. 3475, [2003] O.T.C. 806, 42 M.P.L.R. (3d) 180, 125 A.C.W.S. (3d) 253 (S.C.J.); Gross v. Saskatoon (City), 1970 589 (SK QB), [1970] S.J. No. 289, 73 W.W.R. 272 (Dist. Ct.); Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; London (City) v. Ayerswood Development Corp., 2002 3225 (ON CA), [2002] O.J. No. 4859, 167 O.A.C. 120, 34 M.P.L.R. (3d) 1, 119 A.C.W.S. (3d) 664 (C.A.); Mid Transportation Services Ltd. v. Windsor (1994), 53 L.C.R. 71 (O.M.B.); Pinewood Recording Studios Ltd. v. City Tower Development Corp., [1996] B.C.J. No. 2322, 31 C.L.R. (2d) 1, 67 A.C.W.S. (3d) 71 (S.C.); R. v. MacArthur (1904), 1904 64 (SCC), 34 S.C.R. 570, [1904] S.C.J. No. 17, 24 C.L.T. 201; Royal Anne Hotel Co. v. Ashcroft (Village), 1979 2776 (BC CA), [1979] B.C.J. No. 2068, 95 D.L.R. (3d) 756 (C.A.); Smith v. Inco Ltd., [2010] O.J. No. 2864, 2010 ONSC 3790, 52 C.E.L.R. (3d) 74, 76 C.C.L.T. (3d) 92 [Appeal as of right to the C.A.]; St. Lawrence Cement Inc. v. Barrette, [2008] 3 S.C.R. 392, [2008] S.C.J. No. 65, 2008 SCC 64, EYB 2008-150682, J.E. 2008-2164, 170 A.C.W.S. (3d) 656, 61 C.C.L.T. (3d) 1, 299 D.L.R. (4th) 385, 382 N.R. 105, 40 C.E.L.R. (3d) 1; Susan Heyes Inc. v. Vancouver (City), [2011] B.C.J. No. 250, 2011 BCCA 77, 301 B.C.A.C. 210, 329 D.L.R. (4th) 92, 102 L.C.R. 81, 56 C.E.L.R. (3d) 243, 80 C.C.L.T. (3d) 1, 79 M.P.L.R. (4th) 163, 15 B.C.L.R. (5th) 47, [2011] 5 W.W.R. 252 [Leave to appeal to S.C.C. requested [2011] S.C.C.A. No. 175]; Tock v. St. John's Metropolitan Area Board, 1989 15 (SCC), [1989] 2 S.C.R. 1181, [1989] S.C.J. No. 122, 64 D.L.R. (4th) 620, 104 N.R. 241, J.E. 90-29, 82 Nfld. & P.E.I.R. 181, 1 C.C.L.T. (2d) 113, 47 M.P.L.R. 113, 18 A.C.W.S. (3d) 531; Walker v. Pioneer Construction Co. (1975), 1975 481 (ON SC), 8 O.R. (2d) 35, [1975] O.J. No. 2254, 56 D.L.R. (3d) 677 (H.C.J.) Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134 [as am.] [page84 ] Expropriations Act, R.S.O. 1990, c. E.26 [as am.], ss. 1 [as am.], (1) [as am.], (b), 18, 19, 21, 31 [as am.], (1), (2), (4) [as am.] Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 96 [as am.], (4) Authorities referred to Challies, George Swan, The Law of Expropriation, 2nd ed. (Montreal: Wilson & Lafleur Limited, 1963) Clerk, John Frederic, Clerk and Lindsell on Torts, 20th ed. (London: Sweet & Maxwell, 2010) Coates, John A., and Stephen F. Waqué, New Law of Expropriation, looseleaf (Toronto: Carswell, 2010) Fleming, John G., The Law of Torts, 9th ed. (Sydney: The Law Book Company, 1998) Linden, Allen M., and Bruce Feldthusen, Canadian Tort Law, 9th ed. (Markham, Ont.: LexisNexis, 2006) Murphy, John, Street on Torts, 12th ed. (Oxford: Oxford University Press, 2007) Pun, Gregory S., and Margaret I. Hall, The Law of Nuisance in Canada (Markham, Ont.: LexisNexis, 2010) Street, Harry, The Law of Torts, 6th ed. (London: Butterworths, 1976)
Douglas R. Adams, for respondent/appellant by way of cross- appeal. Leonard Marsello and William MacLarkey, for appellant/ respondent by way of cross-appeal.
The judgment of the court was delivered by
EPSTEIN J.A.: --
I. Overview
[1] In September 2004, the Province of Ontario completed a new four-lane section of Highway 417 near the Hamlet of Antrim, close to Ottawa. The reason for this undertaking was public safety. The new highway rerouted traffic away from Highway 17, the use of which had exceeded its design capacity. This overuse was causing so many accidents that the particular portion of Highway 17 in issue had acquired the name the "killer highway".
[2] This appeal involves the effect of the new Highway 417 on a truck stop, owned by the respondent, Antrim Truck Centre Ltd., which was, at the time the new portion of Highway 417 was built, located on the affected part of Highway 17. [page85 ]
[3] Antrim took the position that the undertaking severely impeded the road access to the truck stop and therefore substantially interfered with its use and enjoyment of its property. As a result, Antrim applied to the Ontario Municipal Board (the "OMB") for a determination of the compensation to which it was entitled from the appellant, Her Majesty the Queen in right of Ontario, as represented by the Minister of Transportation (the "MTO"), for injurious affection under the Expropriations Act, R.S.O. 1990, c. E.26. Antrim claimed compensation of $8,224,671 for "business damages", including the costs it incurred in relocating the truck stop to nearby Arnprior shortly after the new Highway 417 opened.
[4] The OMB, in its order of January 9, 2009 [[2009] O.M.B.D. No. 1, 96 L.C.R. 100 (O.M.B.)], awarded Antrim damages of $393,000 for injurious affection.
[5] The MTO appealed that order to the Divisional Court and Antrim cross-appealed the amount of the award. The decision was affirmed on appeal: (2010), 2010 ONSC 304, 100 O.R. (3d) 425, [2010] O.J. No. 156 (Div. Ct.).
[6] On its appeal from the decision of the Divisional Court, with the leave of this court, the MTO advances two main arguments. First, it submits that the Divisional Court erred in upholding the OMB's finding that Antrim had made out the tort of nuisance, a necessary element of its claim based on injurious affection. Second, the MTO contends that the Divisional Court erred in upholding the OMB's finding that the interference with the Antrim land was the result of the construction of Highway 417 rather than its use, also a necessary element of its claim.
[7] In its cross-appeal, Antrim contends that restitution principles should apply to allow it to recover its construction and relocation costs as business damages under s. 1(1)(b) of the Expropriations Act.
[8] For the reasons that follow, I would allow the appeal. While it is not necessary to consider the cross-appeal in these circumstances, I would dismiss the cross-appeal.
II. The Facts
[9] The facts are not in dispute.
[10] In 1978, Mr. and Ms. Cameron, as shareholders of Antrim, purchased the truck stop property from Ms. Cameron's mother. In the first few years, the Camerons lived in a trailer on the property and operated a small gas bar, restaurant and store frequented by truck drivers. Over the years, the Camerons' hard work paid off. By the time Highway 417 opened, the business had become highly successful and included a restaurant, bakery, [page86 ]gift shop, gas bar, offices, truck sales, leasing and service centre and diesel fuel bar.
[11] In 2003, its final full year of operation at the original location, the business generated gross revenue of over $15 million and employed more than 100 people.
[12] In 1978, when the Camerons acquired the property, they knew that the MTO was considering the construction of a new highway, the exact location of which had not been finalized.
[13] The MTO was sensitive to the impact a change in the highway configuration might have on Antrim's business. During the planning phase of the new highway, MTO officials discussed with the Camerons proposals for the alignment of the new road. The minutes of these meetings demonstrate that while the Camerons understood that a change was necessary, they were concerned about the survival of their business and what compensation might be available to them for any loss they suffered as a result of the new highway.
[14] Ultimately, the MTO adopted a plan to construct the new highway approximately 500 metres to the south of the Antrim property. For six weeks during the construction process, Highway 17 was blocked east of Antrim's property, but access to the property remained available via Regional Road 20, the route currently used to access the Antrim site from Highway 417.
[15] In September 2004, the MTO completed and opened the new section of Highway 417. Highway 17 was merged with Grant's Side Road one and a half kilometres to the east. Attached to these reasons and marked as "Schedule A", is a map showing the town of Antrim, the Antrim site and Highway 417 together with the driving distances between Highway 417 and the Antrim site for motorists travelling either east or west on the highway.
[16] As can be seen from this map, the construction of the new highway and the merger of Highway 17 and Grant's Side Road affected the access to the Antrim property. Traffic travelling either east or west on Highway 417 can now access the site by turning off onto Regional Road 20 and from there onto Highway 17. Once on Highway 17, the property is accessible as before. Whereas the property was previously located right on the highway, motorists travelling on Highway 417 must now drive approximately two kilometres to reach the truck stop.
[17] Several years prior to the construction of the new highway, the Camerons began to acquire property in the Arnprior area, approximately 15 kilometres from the Antrim site. Six weeks after the new highway opened, they moved their business to Arnprior, a move that turned out to be financially beneficial. [page87 ]
III. The Legislative Provisions
[18] The Expropriations Act sets out the conditions in which the Government of Ontario may expropriate land, the circumstances in which compensation will be available to the owners of land that is expropriated or injuriously affected by government actions and the nature of the compensation that will be available. As explained by Cory J. in Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (1997), 1997 400 (SCC), 31 O.R. (3d) 576, [1997] 1 S.C.R. 32, [1997] S.C.J. No. 6, at para. 19, the Act "is clearly a remedial statute enacted for the specific purpose of adequately compensating those whose lands are taken to serve the public interest".
[19] The claim here is based on "injurious affection" where the statutory authority (the MTO) does not acquire part of the claimant's land. Section 1 of the Expropriations Act sets out the basis of the compensation available under a claim of this nature:
"injurious affection" means, (a) where a statutory authority acquires part of the land of an owner, (i) the reduction in 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, and (ii) such personal and business damages, resulting from the construction or use, or both, of the works as the statutory authority would be liable for if the construction or use were not under the authority of a statute, (b) where the statutory authority does not acquire part of the land of an owner, (i) such reduction in the market value of the land of the owner, and (ii) such personal and business damages,
resulting from the construction and not the use of the works by the statutory authority, as the statutory authority would be liable for if the construction were not under the authority of a statute,
and for the purposes of this clause, part of the lands of an owner shall be deemed to have been acquired where the owner from whom lands are acquired retains lands contiguous to those acquired or retains lands of which the use is enhanced by unified ownership with those acquired[.]
[20] Finally, s. 21 of the Act provides that an expropriating authority must compensate an "owner of land for loss or damage caused by injurious affection". [page88 ]
IV. The Reasons of the Ontario Municipal Board
[21] The board correctly observed that to succeed on a claim for injurious affection, where no land has been acquired, the following legal tests had to be met: (a) The damage must result from an act rendered lawful by statutory powers of the person performing such act (the "statutory authority rule"). (b) The damage must be such as would be actionable under the common law, but for the statutory powers (the "actionable rule"). (c) The damage must be occasioned by the construction of the public work, not its use (the "construction not the use rule"). St. Pierre v. Ontario (Minister of Transportation and Communications), 1987 60 (SCC), [1987] 1 S.C.R. 906, [1987] S.C.J. No. 27, at p. 909 S.C.R.
[22] After acknowledging that there was no dispute that the statutory authority rule had been met, the board turned its attention to the actionable rule.
Nuisance
[23] The OMB noted that Antrim sought to satisfy the actionable rule by arguing that, were it not for the MTO's statutory authority, it would have a common law claim in nuisance on the basis that the MTO's actions restricted its common law right of access. The focus of Antrim's claim in nuisance was clearly how the new highway, and the associated reconfiguration of the local road network, affected the access to its property.
[24] With reference to the following passage from St. Pierre, the board identified the requirement that, in determining whether actionable nuisance has been established, the competing interests of the parties must be balanced [at para. 41]:
All highway construction will cause disruption. Sometimes it will damage property, sometimes it will enhance its value. To fix the Minister with liability for damages to every landowner whose property interest is damaged, by reason only of the construction of a highway on neighbouring lands, would place an intolerable burden on the public purse. Highways are necessary: they cause disruption. In the balancing process inherent in the law of nuisance, their utility for the public good far outweighs the disruption and injury which is visited upon some adjoining lands. The law of nuisance will not extend to allow for compensation in this case.
[25] The board reviewed the evidence relevant to its analysis of what it referred to as the "reasonableness of the [MTO's] actions". This review included the actual effect of the new road [page89 ]on access to the Antrim site, the fact that the new highway was built for safety reasons, that the MTO offered Antrim signage to identify its business from the new highway and the board's finding that the new interchange, used to access the property from Highway 417, was safe.
[26] The board then turned to [at para. 51] "contrasting the public benefits with the individual's detriment" and found that it was not satisfied that access on Highway 17 remained as before. Rather, due to its merger with an unpaved local road, Highway 17 had been reduced to a [at para. 54] "shadow of what it was before Highway 417".
[27] From there, the board went on to conclude that there was a [at para. 54] "serious impairment in nuisance".
The "construction not the use" test
[28] In regards to the other disputed issue, whether the interference with the access to Antrim's property was caused by the construction rather than the use of the new highway as required under s. 1(1)(b) of the Act, the OMB relied on the articulation of the test found in George S. Challies, The Law of Expropriation, 2nd ed. (Montreal: Wilson & Lafleur Limited, 1963), at p. 138, as adopted in Windsor (City) v. Larson (1980), 1980 1573 (ON SC), 29 O.R. (2d) 669, [1980] O.J. No. 3706 (Div. Ct.), at p. 675 O.R.:
The test of whether the property is actually damaged by operation or use is to consider whether the works as constructed, if left unused, would interfere with the actual enjoyment of the property; if not, no compensation is payable.
[29] The board used few words on its analysis and conclusion that the test had been met. It was the construction of Highway 417 that was responsible for the damage to Antrim's property as it [at para. 56] "effectively [ended] Highway 17 but for a dirt road extension".
Damages
[30] In terms of Antrim's damages, the board noted that in this case, where no land was taken, compensation under the Expropriations Act was limited to the reduction in the market value of the Antrim property and personal and business damages. Accordingly, based on Dell Holdings and ss. 18 and 19 of the Expropriations Act, which exclude disturbance damages and relocation costs from the compensation available for injurious affection, Antrim's principal claim based on the costs of the move to the Arnprior location could not succeed. Relying on the expert evidence provided by the MTO, the board concluded that Antrim [page90 ]had established a business loss of $58,000 and a loss in the market value of the affected property of $335,000, giving rise to total damages of $393,000.
V. The Reasons of the Divisional Court
Standard of review
[31] The Divisional Court began with the issue of the standard of review -- an issue about which the parties disagreed.
[32] Applying London (City) v. Ayerswood Development Corp., 2002 3225 (ON CA), [2002] O.J. No. 4859, 167 O.A.C. 120 (C.A.), Dell Holdings and Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, the court concluded that the following standards of review were applicable to the various issues raised on appeal.
[33] First, the court identified the definition of and test for nuisance as a question of law that should be reviewed on a standard of correctness. The court saw the application of the law of nuisance as a question of mixed fact and law that engages the board's expertise and therefore held it to be reviewable on a standard of reasonableness.
[34] The Divisional Court specifically focused on the parties' dispute over whether the examination of Antrim's claim in nuisance required the board to balance the public interest against Antrim's individual interest. On that issue, the court held that this was a question of law outside of the expertise of the OMB and that therefore the appropriate standard of review was correctness. However, the actual exercise of balancing these competing interests was found to squarely engage the expertise of the board and therefore the standard of reasonableness applied.
[35] While the Divisional Court recognized the interpretation of the "construction not the use" test as a question of law, it identified the issue, codified in the Expropriations Act, as being unique to the law of injurious affection and therefore within the specialized expertise of the board. Accordingly, the court concluded that both the definition and the application of this test should be reviewed on a standard of reasonableness.
[36] Finally, the issue raised by Antrim with respect to damages was held to be subject to a standard of review of correctness since it involved a question of law outside the board's expertise.
Nuisance
[37] The court agreed with the OMB's articulation of the correct test to prove a claim for injurious affection as that set out in [page91 ]St. Pierre and turned its attention to whether nuisance had been made out.
[38] The court agreed that nuisance can serve as a common law claim underlying injurious affection and, citing Tock v. St. John's Metropolitan Area Board, 1989 15 (SCC), [1989] 2 S.C.R. 1181, [1989] S.C.J. No. 122 and 340909 Ontario Ltd. v. Huron Steel Products (Windsor) Ltd. (1990), 73 O.R. (2d) 641, [1990] O.J. No. 997 (H.C.J.), affd (1992), 1992 7668 (ON CA), 10 O.R. (3d) 95, [1992] O.J. No. 1694 (C.A.), set out the following factors as being relevant to the determination of whether an interference will be actionable in nuisance: (1) the severity of the interference; (2) the character of the neighbourhood; (3) the utility of the defendant's conduct; and (4) the plaintiff's sensitivity.
[39] The Divisional Court also relied on the following definition of private nuisance adopted, at p. 914 S.C.R. of St. Pierre, and originally drawn from Harry Street, The Law of Torts, 6th ed. (London: Butterworths, 1976), at p. 219:
A person, then, may be said to have committed the tort of private nuisance when he is held to be responsible for an act indirectly causing physical injury to land or substantially interfering with the use or enjoyment of land or of an interest in land, where, in the light of all the surrounding circumstances, this injury or interference is held to be unreasonable.
[40] The court held that interference with access, short of complete obstruction, can amount to nuisance as long as the interference is "proximate and substantial". In expressing this view, the court relied on R. v. Loiselle, 1962 72 (SCC), [1962] S.C.R. 624, [1962] S.C.J. No. 44; Larson; Jesperson's Brake and Muffler Ltd. v. Chilliwack (District), 1994 1662 (BC CA), [1994] B.C.J. No. 404, 88 B.C.L.R. (2d) 230 (S.C.), leave to appeal to S.C.C. refused [1994] S.C.C.A. No. 177, 93 B.C.L.R. (2d) xxxvii; Airport Realty Ltd. v. Newfoundland (Minister of Works, Services, and Transportation), 2001 NFCA 45, [2001] N.J. No. 245, 205 Nfld & P.E.I.R. 95 (C.A.); Autographic Register Systems Ltd. v. Canadian National Railway Co., 1933 579 (CA EXC), [1933] Ex. C.R. 152; and Empringham Catering Services Ltd. v. Regina (City), 2002 SKCA 16, [2002] S.J. No. 37, 217 Sask. R. 138 (C.A.).
[41] The court found that the "interference was sufficiently proximate to support an actionable claim" and that the board's "decision in this regard was reasonable". It further held that the board reasonably concluded that the interference was substantial: "the Property, once on the busy Trans-Canada Highway, [page92 ]was now 'on a service or secondary road as opposed to a main road' ".
[42] The Divisional Court, relying on St. Pierre, held the balancing of public and private interests to be "inherent" to the law of nuisance. The court concluded that the OMB not only correctly realized the importance of balancing but also conducted an appropriate weighing of the competing interests. It further held that the board's findings were supported by the evidence. As a result, the Divisional Court determined that the board's conclusion that nuisance had been made out was reasonable.
The "construction not the use" test
[43] The Divisional Court relied on the explanation of the "construction not the use" test set out by Coates and Waqué in the New Law of Expropriation, looseleaf (Toronto: Carswell, 2010), at pp. 10-154.26-10.154.27:
The clearest examples of "use" as distinguished from "construction" would appear to be highway noise, or noise emanating from the operation of an airport. Another example is the contamination of land owned by a claimant adjacent to a buffer zone owned by a regional municipality next to an old landfill site: Barnside Sand & Gravel Ltd. v. Ottawa-Carleton (Regional Municipality) (2000), 71 L.C.R. 216 (O.M.B.). . . . . .
The clearest example of a loss resulting from "construction" is business loss arising from interference with access during the construction of a public work. Loiselle, supra and the [Larson] case seem to lie somewhat in the middle, but given the tenor of judicial thinking, it seems evident that where the completed work interferes with access to an owner's land he or she will be compensated for any loss which directly results from that interference.
[44] The court identified the leading case as Larson, which articulates the test to be applied as "whether the works as constructed, if left unused, would interfere with the actual enjoyment of the property". The court noted that, in this case, if Highway 417 were constructed but not used, traffic coming from the east would have to make a significant, three- directional detour to reach the truck stop. Observing that the OMB had the benefit of a site visit and that this issue engaged the board's expertise, the court concluded that the OMB's decision that the interference was the product of the construction of Highway 417, and particularly of the detour, was supported by the evidence and was reasonable.
[45] The Divisional Court, having agreed with the board that Antrim had satisfied the elements of injurious affection, dismissed the appeal. [page93 ]
The cross-appeal as to damages
[46] The Divisional Court rejected Antrim's submissions concerning its broader damage claim and agreed with the OMB that, given the wording of s. 1(1) of the Expropriations Act, it did not have jurisdiction to apply restitutionary principles in order to broaden Antrim's entitlement to compensation to include disturbance damages and damages for relocation costs.
[47] The court therefore dismissed the cross-appeal.
VI. The Issues
[48] The primary issues on the appeal are (1) whether the Divisional Court erred by failing to determine and apply the appropriate standard of review in its consideration of the various issues decided by the board that were raised on appeal; (2) whether the Divisional Court erred in upholding the board's determination that Antrim had made out a case in nuisance; (3) whether the Divisional Court erred in upholding the board's decision that the harm caused to Antrim was one of construction not use.
[49] The issue on the cross-appeal is (1) whether the Divisional Court erred in upholding the board's assessment of Antrim's damages.
VII. Analysis
A. The appeal
1. Standard of review
[50] The essence of the MTO's position with respect to the standard of review is that Dell Holdings established correctness as the standard of review for all issues appealed under s. 31 of the Expropriations Act. While Dell Holdings was decided prior to Dunsmuir, the MTO argues that the Divisional Court should nevertheless have deferred to this decision as Dunsmuir calls for deference to a standard of review already determined in authoritative jurisprudence.
[51] Antrim made no submissions on the issue of the standard of review.
[52] I disagree with the MTO's submission that Dell Holdings resolves the standard of review inquiry. In my view, the MTO [page94 ]takes the import of Dell Holdings too far. The issue before the Supreme Court in Dell Holdings was a narrow one -- whether disturbance damages could include losses arising from the delayed development of a property an expropriating authority considered, but ultimately declined to expropriate.
[53] In Dell Holdings, in addressing the issue of the standard of review, Cory J., writing for the majority, reasoned, at para. 48:
There is no effective privative clause applicable to the decisions of the Board. Rather s. 33(2) of the Expropriations Act (now s. 31(2)) provides that there is an appeal as of right to the Divisional Court "on questions of law or fact or both and the Divisional Court (a) may refer any matter back to the Board; or (b) may make any decision or order that the Board has power to make". Thus, not only is there no privative clause but a very wide power of appeal is granted. Nor is there any aspect of particular expertise involved in this decision. I would agree with the conclusion of the Court of Appeal that no particular deference should be accorded to a decision of the Board. That is to say the decision of the Board must be correct.
[54] In my view, this statement should be read narrowly to apply only to the issue under consideration in Dell Holdings. Clearly, Cory J. did not intend to establish the standard of review applicable to all OMB decisions or all issues that could potentially be raised on an appeal under s. 31 of the Expropriations Act. I refer to the specific observation made by Cory J. in the excerpted paragraph to the effect that the issue being considered in Dell Holdings did not involve any particular expertise. This sentence suggests that other issues considered by the board under the Expropriations Act that do engage the board's expertise may be reviewable on a different standard.
[55] Moreover, were this the intention of the majority in Dell Holdings, I do not see how it could remain valid in the light of Dunsmuir where the Supreme Court made it clear that the approach to the determination of the standard of review can vary significantly depending on, among other things, the issue being challenged. One issue determined by a tribunal that a party seeks to have reviewed may attract a different standard of review than another issue, even where both have been decided by the same tribunal under the same statute.
[56] My conclusion, then, is that the issues in this case do not fall into the category identified in Dunsmuir, where the standard of review has already been determined in a manner that fits the Dunsmuir approach. This means that on this appeal, the various standards of review identified by the Divisional Court must be individually examined to ensure that they comply with the analysis mandated by Dunsmuir, at paras. 55 and 64. This analysis involves the consideration of [page95 ] (1) the nature of the issue in question; (2) the existence of a privative clause; (3) the purpose of the tribunal as determined by its enabling legislation; and (4) the expertise of the tribunal.
[57] The privative clause set out in s. 96(4) of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 indicates an intention on the part of the legislature that the decisions of the board, in general, are to be treated with deference. It provides that (a) every decision or order of the Board is final; and (b) no order, decision or proceeding of the Board shall be questioned or reviewed, restrained or removed by prohibition, injunction, certiorari, or any other process or proceeding in any court.
[58] However, s. 31(4) of the Expropriations Act states that "[s]ection 96 of the Ontario Municipal Board Act does not apply to a decision or order of the Board made under this Act". This removes the effect of s. 96 from any appeal under the Expropriations Act, including this one. The wording of s. 31(1) and (2) of the Act, reproduced below, demonstrates clear legislative intent to ensure a full and robust right of appeal of decisions under the Act.
[59] Section 31 of the Expropriations Act provides:
31(1) An appeal lies to the Divisional Court from any decision or order of the Board in accordance with the rules of court, except that the appeal may be taken at any time within six weeks from the day the decision or order was served on the parties, and the period of any vacation of the court shall not be reckoned in computing such six weeks.
(2) An appeal under subsection (1) may be made on questions of law or fact or both and the Divisional Court, (a) may refer any matter back to the Board; or (b) may make any decision or order that the Board has power to make.
[60] Turning to the second factor identified in Dunsmuir, the board has a variety of functions under the Ontario Municipal Board Act, but, as I have said, its purpose under the Expropriations Act is to determine when government action will amount to compensable expropriation or injurious affection and, where it does, to determine the compensation owing. In doing so, it executes the Act's function as a "remedial statute enacted for the specific purpose of adequately compensating [page96 ]those whose lands are taken to serve the public interest" (Dell Holdings, at para. 19).
[61] This discussion of the board's purpose also sheds light on the issue of its expertise. As suggested in the reasons of the Divisional Court, the board should be viewed as having expertise in the interpretation of the Expropriations Act and legal questions closely related to the Act. Where the board considers questions of common law not closely related, it should be viewed as acting outside of the scope of its expertise.
[62] As explained in Dunsmuir, at paras. 51-54, in considering the nature of the issue in question, the court should have regard to whether the question asked is one of law, which will typically call for review on a standard of correctness, or whether it is a question of fact, discretion or policy, which will typically call for review on a standard of reasonableness. The court should also consider whether the board or tribunal is interpreting its own statute or otherwise has some particular expertise in the area, which may call for deference even where the question raised is one of law.
[63] Against this backdrop, I turn to the various issues under review.
[64] The first is the board's identification of the definition of and test for nuisance. Within this issue is the contentious question of whether the nuisance test includes balancing the interests of the party whose activity is the subject of the complaint and the party whose land is allegedly affected by that activity. I agree with what appears to be a consensus that correctness is the standard that applies to these issues.
[65] In my view, the application of the law of nuisance is reviewable on a standard of reasonableness. Once the law of nuisance is properly identified, there is good reason to defer to the board's determination of the facts and whether they satisfy the requirements of the legal test. The board is best positioned to appreciate the relevant facts and to apply those facts in deciding whether the interference with the claimant's land is substantial and unreasonable. These are clearly questions of mixed fact and law that do not lend themselves to objectively correct and incorrect answers. I see no reason why they would be reviewed on a standard of correctness: see the recent decision of the British Columbia Court of Appeal in Susan Heyes Inc. v. Vancouver (City), 2011 BCCA 77, [2011] B.C.J. No. 250, 15 B.C.L.R. (5th) 47 (C.A.), at para. 48, leave to appeal to S.C.C. requested [2011] S.C.C.A. No. 175.
[66] The MTO contends that the board failed to take into account all relevant evidence in determining the reasonableness of the MTO's actions, most notably the board's specific finding of [page97 ]fact that Antrim's access to Highway 417 was typical of other truck stops. It relies on this submission in support of its position that the Divisional Court should have reviewed the board's application of the test for nuisance to the facts on a standard of correctness. Citing Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, the MTO submits that where a decision maker properly identifies the legal test but misapplies the facts to the law, the decision maker has committed an error of law, reviewable on a correctness standard.
[67] I take no issue with the MTO's basic submission that a failure to take relevant evidence into account may amount to an error of law reviewable on a standard of correctness. As explained in Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, [1996] S.C.J. No. 116, at para. 39:
[I]f a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision- maker considers only A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C. If the correct test requires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law.
[68] While an error of this nature would attract review on a standard of correctness, this does not require that the board's application of the law of nuisance to the facts of this case, in its entirety, be reviewed on a standard of correctness. However, the omission upon which the MTO relies does not assist its argument. As I will explain later, it cannot necessarily be said that the board made an error of this nature.
[69] The next issue about which there is a dispute as to the standard of review is the Divisional Court's consideration of the board's interpretation and application of the "construction not the use" test on a standard of reasonableness. The MTO contends that the proper standard of review is correctness, its argument being that this "hypothetical question is a question of law".
[70] I disagree. The board clearly has expertise in the law of injurious affection. The "construction not the use" test is a key aspect of the injurious affection analysis. The experience the board gains in working with a test that is specifically set out in the Expropriations Act allows it to develop a particular expertise. This observation provides support for the Divisional Court's conclusion that both the interpretation and application of the test are reviewable on a standard of reasonableness. Furthermore, the application of the "construction not the use" test is a question of mixed fact and law, offering additional support for [page98 ]the Divisional Court's conclusion that this issue should be reviewed on a standard of reasonableness.
[71] With respect to the board's assessment of the amount, if any, to which Antrim is entitled for its injurious affection claim, I am of the view that the question raised by Antrim is a question of law that does not engage the expertise of the board and as such should be reviewed on a standard of reasonableness.
[72] In summary, I conclude that the Divisional Court applied the appropriate standards of review in its consideration of the various issues decided by the board that were raised on appeal.
2. Nuisance
The applicable legal principles
[73] As previously indicated, the MTO takes issue with the finding that Antrim established that the interference with the access to its property amounted to actionable nuisance at common law.
[74] Nuisance, a concept with its roots in medieval England, encompassed any "offence against civic order", including
innkeepers refusing to receive and entertain travellers; the making of impure or unseasonable malt; the casting of filth or carrion in the highway; allowing pigs to run freely; clogging up ditches; eavesdropping; sleeping in the day and walking by night; all open lewdness grossly scandalous; and women behaving as common scolds. Gregory S. Pun and Margaret I. Hall, The Law of Nuisance in Canada (Markham, Ont.: LexisNexis Canada, 2010), at p. 20.
[75] As society became more complex, particularly during and following the industrial revolution, so too did the definition of the law of nuisance (Pun and Hall, at pp. 18-32).
[76] The Supreme Court, at p. 1191 S.C.R. of Tock v. St. John's, a case where the plaintiff's property sustained damages from flooding as a result of the construction and maintenance of a storm sewer, illuminated the concept of nuisance by discussing its underlying rationale:
The assessment whether a given interference should be characterized as a nuisance turns on the question, simple to state but difficult to resolve, whether in the circumstances it is reasonable to deny compensation to the aggrieved party. The courts have traditionally approached this problem of reconciling conflicting uses of land with an eye to a standard based, in large part, on the formulations of Knight Bruce V.C. in Walter v. Selfe (1851), 4 De G. & Sm. 315, 64 E.R. 849, and Bramwell B. in Bamford v. Turnley (1862), 3 B. & S. 66, 122 E.R. 27, at pp. 83-84 and at pp. 32-33 respectively. There it was observed that the very existence of organised society depended on a generous application of the principle of "give and take, live and let live". It was therefore appropriate to interpret as actionable nuisances only those [page99 ]inconveniences that materially interfere with ordinary comfort as defined according to the standards held by those of plain and sober tastes. In effect, the law would only intervene to shield persons from interferences to their enjoyment of property that were unreasonable in the light of all the circumstances. See, also, Royal Anne Hotel Co. v. Ashcroft (Village), 1979 2776 (BC CA), [1979] B.C.J. No. 2068, 95 D.L.R. (3d) 756 (C.A.), at paras. 10-11.
[77] This quotation contains two important observations. First, the point is made that, unlike most other torts, nuisance focuses on the damage to the defendant as opposed to the conduct of the plaintiff. Second, there is reference to the concept of "give and take, live and let live" to which I will return when dealing with the issue of whether a balancing exercise is required in determining whether nuisance has been made out.
[78] In Mandrake Management Consultants Ltd. v. Toronto Transit Commission, 1993 9417 (ON CA), [1993] O.J. No. 995, 102 D.L.R. (4th) 12 (C.A.), at para. 18, this court followed suit in emphasizing the difficulty in applying the law of nuisance by referring to St. Pierre v. Ontario (Minister of Transportation and Communications) (1983), 1983 1890 (ON CA), 43 O.R. (2d) 767, [1983] O.J. No. 3219 (C.A.), affd 1987 60 (SCC), [1987] 1 S.C.R. 906, [1987] S.C.J. No. 27, at p. 18 D.L.R.:
What conduct amounts to a nuisance at common law is "incapable of exact definition" . . . There is perhaps no more impenetrable jungle in the entire law than that which surrounds the word "nuisance." It has meant all things to all men, and has been applied indiscriminately to everything from an alarming advertisement to a cockroach baked in a pie. There is general agreement that it is incapable of any exact or comprehensive definition.
[79] While the courts have recognized that the law of nuisance is, in fact, a nuisance, it is capable of a simple definition: "any activity or state of affairs causing a substantial and unreasonable interference with a claimant's land or his use or enjoyment of that land". John Murphy, Street on Torts, 12th ed. (Oxford: Oxford University Press, 2007), at p. 419; see, also, St. Lawrence Cement Inc. v. Barrette, 2008 SCC 64, [2008] 3 S.C.R. 392, [2008] S.C.J. No. 65, at para. 77; Clerk and Lindsell on Torts, 20th ed. (London: Sweet & Maxwell, 2010), at p. 1272; and Allen M. Linden and Bruce Feldthusen, Canadian Tort Law, 9th ed. (Markham, Ont.: LexisNexis, 2006), at p. 568.
The test for nuisance
[80] As can be seen from this definition, the test for nuisance, at its core, commands a two-part analysis. Fleming (The Law of Torts, 9th ed. (Sydney: The Law Book Company, 1998)) puts it simply, at p. 466: "[T]o constitute a legal nuisance, the annoyance or discomfort must be substantial and unreasonable" [page100] (emphasis added): see, also, St. Lawrence Cement v. Barrette, at para. 77. Murphy, at p. 420, explains that these elements of the test should not be viewed as mutually exclusive and that an interference that is unreasonable will also often necessarily be substantial.
Substantial interference
[81] Particularly as people live in closer proximity to each other, a certain amount, arguably an ever-increasing amount, of interference with each other's property must be tolerated. It makes sense, therefore, that only substantial interference constitutes nuisance.
[82] The requirement that the interference be substantial is a threshold aspect of the test. At this stage of the analysis, the court will exclude claims that disclose no actual interference as well as those in which the interference alleged is so trifling as to amount to no interference at all: Fleming, at p. 466; Linden and Feldthusen, at p. 581; Pun and Hall, at pp. 64 and 65; St. Lawrence Cement v. Barrette, at para. 77; Tock v. St. John's, at p. 1191 S.C.R.
Unreasonable Interference
[83] Whether there has been an unreasonable interference with the use and enjoyment of the plaintiff's land is a question of judgment based on all of the circumstances. The focus is on the gravity of the harm caused and the utility of the defendant's conduct. As identified by the Divisional Court, this assessment is undertaken through the consideration of four factors: (1) the severity of the interference; (2) the character of the neighbourhood; (3) the utility of the defendant's conduct; and (4) the sensitivity of the plaintiff.
[84] The first factor, the severity of the interference, recognizes that the greater the impact of the interference, the more likely it will be characterized as unreasonable. As indicated by Murphy, at p. 420, there is significant overlap between this factor of the reasonableness analysis and the first part of the test for nuisance -- whether the interference is substantial.
[85] The substance test and the severity factor ask essentially the same question -- how serious is the harm caused by the interference -- but do so for different purposes. In asking [page101] whether the interference is substantial, the court seeks to determine whether the actions of the defendant have caused any harm at all, and if so, whether it is sufficiently material to justify recognition, and possible intervention, by the courts. Where the interference is so trivial that it does not pass this stage of the test, there will be no need to consider whether the interference is unreasonable in the circumstances.
[86] The severity of the interference element of the reasonableness analysis again considers the significance of the harm caused by the interference in question. At this stage, however, the purpose of the inquiry is not to determine whether the interference alleged is of a sort that warrants the recognition of the courts (the threshold test), but rather whether the interference is sufficiently severe that, when viewed alongside the other elements of the reasonableness analysis, the plaintiff should not be expected to tolerate it in the circumstances. Murphy makes the point, at p. 420, that, in many cases, an interference that is unreasonable will also necessarily be substantial, raising a question as to the actual value of the substantial interference part of the test for nuisance. However, as the authorities indicate that to amount to nuisance the interference must be both substantial and unreasonable, in my view, distinct considerations of these elements are required.
[87] In assessing the severity of the interference, alongside the impact of the harm, Murphy, at pp. 432-34, also directs a consideration of the duration and nature of the interference.
[88] Consideration of the second factor, the character of the neighbourhood, recognizes that what is reasonable must be viewed with reference to where the interference takes place and what is typical of that location: see Murphy, at pp. 428-29; Linden and Feldthusen, at p. 574; Walker v. Pioneer Construction Co. (1975), 1975 481 (ON SC), 8 O.R. (2d) 35, [1975] O.J. No. 2254 (H.C.J.), at para. 12; and Mandrake Management, at paras. 27-35.
[89] The third factor, the utility of the defendant's conduct, involves an examination of the importance of the defendant's enterprise and its value to the community. Thus, a defendant may be treated less harshly if, as is the case here, the activity is of considerable public value in the particular locality.
[90] Nesbitt J., speaking for the Supreme Court in R. v. MacArthur (1904), 1904 64 (SCC), 34 S.C.R. 570, [1904] S.C.J. No. 17, at pp. 576-77 S.C.R., made the following general comments regarding public works affecting the value of neighbouring properties:
It was never intended that where the execution of works, authorized by Acts of Parliament, sentimentally affected values in the neighbourhood, all such property owners could have a claim for damages. In most of our large [page102] cities values are continually changing by reason of necessary public improvements made, and if, although no lands are taken, everybody owning lands in the locality could, by reason of the changed character of the neighbourhood or interference with certain convenient highways, claim compensation by reason of a supposed falling of the previous market value of property in the neighbourhood, it would render practically impossible the obtaining of such improvements.
[91] More recently, in Mandrake Management, at para. 50, this court endorsed the notion that the "utility of the defendant's conduct" takes on a special significance where the alleged nuisance is the result of an important public work:
[W]hile private rights cannot be trampled upon in the name of the public good, where an essential public service is involved the factor of the utility of the defendant's conduct must not be disregarded. Indeed, I think it must be given substantial weight. An indication of the kind of weight which should be given to this factor where a highway is involved appears in the reasons for judgment delivered by McIntyre J. on behalf of the Supreme Court of Canada in St. Pierre v. Ontario (Minister of Transportation & Communications) (1987), 1987 60 (SCC), 39 D.L.R. (4th) 10, at p. 18:
Highways are necessary: they cause disruption. In the balancing process inherent in the law of nuisance, their utility for the public good far outweighs the disruption and injury which is visited upon some adjoining lands.
While it has been argued that St. Pierre is distinguishable because it arises out of land compensation proceedings, the views of McIntyre J. support my opinion that the utility of essential public services is an important consideration in the balancing process inherent in a nuisance case. (Emphasis added) See, also, Susan Heyes Inc. v. Vancouver (City), at paras. 71-74; Mid Transportation Services Ltd. v. Windsor (1994), 53 L.C.R. 71 (O.M.B.), at paras. 29-30; Coady v. Port Hope (Town) (1987), 38 L.C.R. 66 (O.M.B.), at para. 22.
[92] Finally, where the interference is the product of the plaintiff's "abnormal sensitivity", there will be no actionable nuisance. A property owner cannot expose a neighbour to greater liability by adopting an unusual and especially sensitive use of his or her land: Murphy, at p. 428. The simple fact that a plaintiff is abnormally sensitive is not sufficient, however, to bar a claim in nuisance, as the claim may nevertheless succeed if the interference would have amounted to an actionable claim were the plaintiff a person with ordinary sensitivities: Linden and Feldthusen, at p. 588; Fleming, at p. 470; Pinewood Recording Studios Ltd. v. City Tower Development Corp., [1996] B.C.J. No. 2322, 31 C.L.R. (2d) 1 (S.C.), at para. 126. [page103]
Is there a balancing test within nuisance?
[93] The reference to "the balancing process inherent in the law of nuisance" in the above quotation takes me to the issue that Antrim raises in this case and that has been debated in the jurisprudence, of whether balancing the competing interests of landowners is an element of determining whether nuisance has been established where that nuisance is based on an interference with the use and enjoyment of the plaintiff's property and, if so, what factors must be balanced.
[94] On appeal, the parties disagreed about whether the determination of Antrim's claim requires a balancing of competing interests. Antrim's argument that it does not stems from its submission that its claim is grounded in injurious affection. It contends that given the test for injurious affection contained in the Expropriations Act makes no mention of balancing, none need be undertaken.
[95] In my view, this submission is flawed as it overlooks the fact that Antrim's claim for injurious affection is based on the tort of nuisance. The question is, therefore, whether the test for establishing the claim for nuisance advanced in this case involves a balancing of competing interests.
[96] An examination of the jurisprudence discloses disagreement on this issue.
[97] Two appellate court decisions, both involving claims made by property owners arising out of interference with access to their land caused by road changes, have held that there is no need to balance the competing interests of the landowners and the statutory authority. I refer to the decision of the British Columbia Court of Appeal in Jesperson's Brake and that of the Newfoundland Court of Appeal in Airport Realty.
[98] Jesperson's Brake involved a claim for compensation based on injurious affection by owners of an automotive repair shop. Their business was adversely affected when the municipality built an overpass, the effect of which was, among other things, to significantly impact access and visibility from the highway to the location of the business, substantially reducing the value of the land. The court, at para. 32, rejected the suggestion that an analysis of whether nuisance had been made out required a balancing process to determine if the defendant's conduct had been unreasonable:
I see nothing in either of those two judgments [Loiselle and Larson], nor do I see anything in the comments made by Mr. Justice McIntyre [in St. Pierre] about those two judgments, to suggest that in determining whether there has been a nuisance created, a balancing process must be gone through to determine whether the Minister's conduct or use of land has [page104] been "unreasonable." In both Loiselle and Larson there had been substantial or significant interference with access to the claimant's land. That was held sufficient to constitute a nuisance. Mr. Justice McIntyre distinguished those cases from that before him where there had been no interference with access, but rather simply interference with view, privacy, prospect, or other loss of amenity.
[99] The Newfoundland Court of Appeal, relying heavily on Jesperson's Brake, reached a similar conclusion in Airport Realty, a case that also involved a change in a highway configuration that adversely affected access, in this instance to a hotel. Roberts J.A. explained, at para. 39:
[W]hile reasonableness is a consideration in determining whether or not the tort of private nuisance has been committed, there is no requirement that substantial interference and reasonableness be balanced, one against the other, to determine which has the greater weight. It would be ludicrous, for example, to argue against the reasonableness of the St. Lawrence Seaway in Loiselle, the overpass over the rail line in Jesperson's Brake & Muffler or the highway realignment to an expanding airport in a growing city in Gerry's Food Mart.
[100] This view is in sharp contrast to that expressed by this court in Mandrake Management, a case involving vibrations and noise experienced by owners of a house as a result of a nearby subway. The court, at para. 47, held that balancing competing interests was essential and an inherent aspect of the four-part reasonableness analysis:
The law of nuisance has developed as a means of balancing interests of adjoining property owners in the legitimate use of their properties. That balancing can sometimes be delicate. In this case, each owner's use of its property is a legitimate one. In my view, the balancing of the parties' competing interests required a careful weighing together of the four factors which I have just reviewed.
[101] In my view, there is no reason for this court to revisit its position on the issue of balancing as set out in Mandrake Management.
[102] First, with respect, I am not convinced that the conclusion reached in Jesperson's Brake that balancing is not part of the test for nuisance, is supported by the cases on which the court relied, namely, Loiselle, Larson and St. Pierre.
[103] Nuisance is not mentioned in either Larson or Loiselle. While it is not unreasonable to assume that the basis for finding common law liability in those cases was nuisance, neither contains a consideration of nuisance principles. In Loiselle, the Supreme Court simply states that it "seems obvious" that the plaintiff "would have a valid claim in damages under the general law". In Larson, the Divisional Court considers whether the right [page105] interfered with is public or private, but beyond this never explains its basis for concluding that there is liability at common law.
[104] While the court in Jesperson's Brake is correct that there is no mention of balancing, at para. 11 of St. Pierre, in which Loiselle and Larson are discussed, para. 13 of St. Pierre (found at 1987 60 (SCC), [1987] 1 S.C.R. 906, [1987] S.C.J. No. 27) clearly indicates that nuisance inherently involves balancing competing interests:
Moreover, I am unable to say that there is anything unreasonable in the Minister's use of the land. The Minister is authorized -- indeed he is charged with the duty -- to construct highways. All highway construction will cause disruption. Sometimes it will damage property, sometimes it will enhance its value. To fix the Minister with liability for damages to every landowner whose property interest is damaged, by reason only of the construction of a highway on neighbouring lands, would place an intolerable burden on the public purse. Highways are necessary: they cause disruption. In the balancing process inherent in the law of nuisance, their utility for the public good far outweighs the disruption and injury which is visited upon some adjoining lands. The law of nuisance will not extend to allow for compensation in this case. (Emphasis added)
[105] The British Columbia Court of Appeal's recently released decision, Susan Heyes Inc. v. Vancouver (City), is a case that dealt with nuisance in the context of a claim for damages to a retail business arising out of the construction of a regional transportation system. Neilson J.A., at para. 39 of the decision, endorsed the view that a balancing process is an integral part of the test for nuisance:
In considering the factors relevant to nuisance, the court must recognize the inevitability of competing interests and the need for give and take. As Professor Klar observes in Tort Law, 4th ed. (Toronto: Carswell, 2008) at 715, nuisance "is principally concerned with regulating the conflicting uses of land which invariably arise in an increasingly urbanized and crowded society". A certain degree of inconvenience and interference is inevitable to ensure peaceful co-existence. The task is to determine at what point the process of give and take becomes sufficiently unbalanced to create unreasonable harm that is deserving of compensation. It is worth noting that the court, in its reasons in Susan Heyes Inc., made no mention of its contrary position in Jesperson's Brake.
[106] The Supreme Court has recognized the importance of balancing competing interests as part of the nuisance analysis not only in St. Pierre, as mentioned earlier, but also in Tock v. St. John's, at p. 1196 S.C.R., in the following passage:
[T]he fundamental issue before the court in a claim for nuisance is not whether the defendant has acted prudently. Rather, the issue for determination is whether, on a consideration of all the circumstances, it is reasonable or unreasonable to award compensation for the damage suffered. McIntyre J.A., as he then was, put the point well in Royal Anne Hotel Co. v. Ashcroft, supra, [page106] when after noting (at pp. 465-66) that the most carefully designed industrial plant operated with the greatest care could cause a nuisance, he added, at p. 467:
In my opinion the rationale for the law of nuisance in modern times, whatever its historical origins may have been, is the provision of a means of reconciling certain conflicting interests in connection with the use of land, even where the conflict does not result from the negligent conduct. It protects against the unreasonable invasion of interests in land.
[107] It is clear that the preponderance of authority supports the conclusion that in determining whether a claimant has successfully made out a case in nuisance based on interference with the use or enjoyment of the affected property, the court must balance the competing interests of the parties involved. As indicated in Mandrake Management, at para. 47, this balancing is carried out through a consideration of the four factors taken into account in the reasonableness analysis. [See Note 1 below]
[108] This conclusion is consistent with the primary function of the law of nuisance, namely, to strike an appropriate balance between the defendant's interest in using its property as it pleases and the plaintiff's interest in the unfettered use and enjoyment of her land. The Supreme Court expressed it this way in Tock, at p. 1191 S.C.R.: "the very existence of organized society [depends] on a generous application of the principle of 'give and take, live and let live' ".
[109] In my opinion, the important principles of tolerance and accommodation necessary to sustain harmony among neighbours in an increasingly dense and complex society require a balancing of the interests of both parties to determine whether it is appropriate for the court to intervene to preserve the right of either to use their property as they wish.
Relevance of proximity between harmful activity and interference
[110] Another question that has arisen in this case is whether, for the interference to be significant (or substantial), it must be "proximate". Both parties and the Divisional Court appear to be of the view that nuisance requires the source of the interference to be proximate to the defendant's property.
[111] I can find no support for this proposition. [page107]
[112] Aside from St. Pierre, which is addressed below, the only case cited by the MTO in support of the existence of a proximity element in the test for nuisance was Archibald v. Canada (1893), 1893 186 (CA EXC), 3 Ex. C.R. 251. It is not clear that Archibald is, in fact, a nuisance case, but if it is, the claim was not denied because the interference was too geographically distant from the property. The claim was rejected because the right in question, the ability to float logs down a river, was found to be a public right that was not sufficiently connected to the property, and, as such, the court concluded that there had been no interference with property at all.
[113] The Divisional Court, at para. 78 of its reasons, listed a number of authorities in support of its view that to amount to nuisance, interference must be "proximate" and substantial:
Canadian case law confirms that interference with access may satisfy the actionable rule in certain circumstances. The interference must be proximate and substantial, but there does not need to be a direct, physical interference with the plaintiff's property or a complete obstruction of access for a claim to be established: see Loiselle; Re City of Windsor and Larson et al. (1980), 1980 1573 (ON SC), 29 O.R. (2d) 669 (Div. Ct.); Jesperson's Brake & Muffler Ltd. v. Chilliwack (District) (1994), 1994 1662 (BC CA), 40 B.C.A.C. 279, leave to appeal to S.C.C. refused, [1994] S.C.C.A. No. 177; Airport Realty Ltd. v. Newfoundland (Minister of Works, Services & Transportation) (2001), 2001 NFCA 45, 205 Nfld. & P.E.I.R. 95 (Nfld. C.A.); Autographic Register Systems Ltd. v. Canadian National Railway Co., 1933 579 (CA EXC), [1933] Ex. C.R. 152 (Can. Ex. Ct.); and Empringham Catering Services Ltd. v. Regina (City) (2002), 2002 SKCA 16, 217 Sask. R. 138 (C.A.).
[114] With respect, I can find no indication in any of these cases, that to establish actionable nuisance, a plaintiff need prove that the land allegedly affected be proximate to the land from which the interference emanates. St. Pierre is the case upon which the Divisional Court appears to have relied in identifying "proximity" as being essential to the establishment of nuisance, where, at p. 915 S.C.R., McIntyre J. observes that the interferences in Loiselle and Larson were in close proximity to the land. I read this, however, merely as a description of the interference in question rather than as the expression of a requirement that the source of the interference be in close proximity to the affected land to amount to actionable nuisance.
[115] In addition to being unable to find any cases that stand for this proposition, none of the leading authorities on the law of nuisance suggest that proximity is part of the test for nuisance: see Fleming, at pp. 457-75; Murphy, at pp. 419-40; and Linden and Feldthusen, at pp. 578-92.
[116] Furthermore, as a practical matter, I do not see why proximity should be an element of the test for nuisance. I accept that for some types of activity that affect another's property, it [page108] may become more difficult to establish nuisance the farther the activity is from the affected land. The activity in this case, the alteration of road configuration, may be one such activity. However, this does not mean that one who has suffered an interference with the use and enjoyment of his or her land should be barred from seeking compensation for that interference simply because its source is geographically distant from the affected property. For example, one could hardly suggest that the owner of a smokestack bellowing chemicals into the air should be immune from an action in nuisance brought by the owner of a tourist resort who was able to demonstrate that its trees were dying as a result of the effluent, simply because the resort was hundreds of miles away from the polluter: see Smith v. Inco Ltd. [See Note 2 below]
[117] I am therefore of the view that proximity is not a valid consideration in the determination of whether nuisance has been made out.
Application of the law to the facts
[118] The OMB was required to consider the two elements of the test for nuisance: was the interference with Antrim's property (meaning access) substantial, and if so, in the circumstances, was the interference unreasonable?
Substantial interference
[119] The MTO argues that the board failed to adequately consider the nature of the access to the Antrim site from Highway 417 as it did not mention in its analysis the fact that the access was typical of that of other truck stops in the province.
[120] In my view, given that the board itself made this finding of fact, I see no merit in the submission that it somehow then immediately disregarded its own finding. Furthermore, it is well settled that what is important is that the board clearly explained how it reached its conclusion. It is not necessary for the board to make reference to every piece of evidence put forth by the parties on each issue.
[121] As can be seen from the following passage found on p. 14 of its decision, the board considered the nature of the access to [page109] and from Highway 417 and, in doing so, turned its mind to whether the interference was substantial [at para. 51]:
The evidence of Mr. Pawliuk was that prior to construction of Highway 417, Highway 17 was a Trans Canada Highway from Ottawa to North Bay. Vehicles passing on Highway 17, both east and west did so in front of the Claimant's property. Physical changes to Highway 17 were made. After the opening of Highway 417 on September 24, 2004, Highway 17 was closed east of the Claimant's property until October 28, 2004. The purpose of this was to merge Highway 17 with Grants Side Road. Grants Side Road is a dirt road. The Respondent argues no change in a Highway running east/west joining a dirt road running north/south. While it is possible to travel some distance on the dirt road to intersect with Donald Munro and then Panmure Drive which intersects with Highway 417 at an interchange, it is indeed a stretch to assert no significant change to Highway 17.
[122] In my view, therefore, the board satisfactorily explained how it reached its conclusion that the substantial interference threshold was met. This is a finding that is owed considerable deference. I see no basis, on a standard of reasonableness, to interfere with that finding.
[123] I would not give effect to this ground of appeal.
The reasonableness analysis
[124] While the MTO advances a number of arguments in which it challenges the board's nuisance finding and the Divisional Court's conclusion that this finding was reasonable, the basic proposition that underlies the MTO's submissions is that the board failed to consider two material factors relevant to the determination of the reasonableness of the interference. The Divisional Court, argues the MTO, did not recognize these deficiencies and therefore erred in concluding that the board's finding that nuisance had been made out, was reasonable.
[125] I agree with the MTO's submissions that the reasons of the Divisional Court provide no indication that the court reviewed the OMB's reasonableness analysis.
[126] It is true that the Divisional Court, quoting from St. Pierre and Airport Realty, at paras. 74 and 86 respectively, does make reference to the fact that actionable nuisance requires a finding that the interference was unreasonable. It also appropriately sets out the four factors relevant to the reasonableness analysis. However, the court's reasons contain no further mention of this aspect of the test for nuisance, aside from identifying it as an element to be considered in the balancing process it found to be part of that test. Rather, in concluding that the OMB's determination that nuisance had been made out was reasonable, the court focused almost exclusively on the board's findings that the interference was substantial and met what the court described [page110] as the test of proximity. At para. 94, the court, without reference to the reasonableness analysis, sets out the question before it as follows:
Loiselle and Larson confirm that the test is not whether access has been completely obstructed, but whether, as stated in St. Pierre at para. 11 and recognized by the Board at p. 11, "the construction of the public works in close proximity to the lands so changed their situation as to greatly reduce if not eliminate their value for the uses to which they had been put prior to the construction and could, therefore, be classed as nuisances."
[127] The Divisional Court's failure to evaluate the board's reasonableness analysis leaves it to this court to do so.
[128] In my view, while the board did consider reasonableness, its analysis, with respect, is flawed.
[129] While the board appropriately considered the first factor in the reasonableness analysis, the severity of the interference, concluding, at p. 15 of its reasons, that the interference with access amounted to a [at para. 54] "serious impairment in nuisance", its analysis fell short in two respects. First, the board failed to consider two of the other three factors it was obliged to take into account in assessing the reasonableness of the interference: the character of the neighbourhood and any abnormal sensitivity of Antrim. Secondly, the board failed to recognize the elevated importance of the utility of the defendant's conduct where the interference is the product of "an essential public service": Mandrake Management, at para. 50.
[130] Significantly, nowhere in the board's reasons is there any mention of the character of the neighbourhood. This is a highly relevant factor as the characteristics of the locale in which the alleged nuisance is said to take place inform the determination of the appropriate standard of tolerance against which to measure the interference.
[131] Canadian courts have repeatedly emphasized the importance of examining the character of the neighbourhood in question in determining the standard of comfort that may reasonably be claimed by an occupier of land when determining whether an activity constitutes a nuisance: Walker, at para. 12. See, also, Tock, at p. 1191 S.C.R.; Grace v. Fort Erie (Town), 2003 48456 (ON SC), [2003] O.J. No. 3475, 42 M.P.L.R. (3d) 180 (S.C.J.), at para. 68.
[132] Here, there was plenty of evidence available about the characteristics of the locale that were critical to the reasonableness assessment. Antrim operated its business in an area adjacent to a highway. That highway posed a significant safety risk to the general public. The Camerons knew, even when they purchased their property, that a new highway would eventually be built. They had no reason to believe that the new highway would [page111] be built along the same route as the old one and no guarantee that access to their property would not be affected.
[133] There is ample reason to believe that, had the board considered the character of the neighbourhood, it would have found this factor to support the reasonableness of the interference. A highway was already present in the area. It was universally accepted that the existing highway was inadequate for the level of traffic that used it. Accordingly, an upgrade was necessary. The new highway needed to be significantly different from the old to resolve the safety concerns. The MTO ultimately decided that this required a new route and changes to the surrounding road network. The interference, therefore, was not only reasonable, given the character of the neighbourhood, it was the product of a project, undertaken in the public interest, which was essential to the safety of the neighbourhood.
[134] The board also neglected to consider whether the interference was the product of any abnormal sensitivity on the part of Antrim. Given Antrim operated a facility dedicated predominantly to truck traffic, its particular dependence on easy access to the highway might have been raised as a relevant consideration in determining the reasonableness of the interference. However, in my view, the argument would have little if any impact given it would be difficult to categorize the interference as solely being based on Antrim's sensitivity. My reason for mentioning it is merely to emphasize the need to consider all four factors relevant to the determination of whether the interference was reasonable as set out in Tock v. St. John's.
[135] The other significant concern arising from the reasonableness analysis is the board's failure to adequately take the utility of the MTO's conduct into account. This utility is obvious. Highways are necessary: this one particularly so given the public safety issue. There is no debate that the actions of the MTO were not only socially beneficial, but also necessary.
[136] The comments of McIntyre J. in St. Pierre, at p. 916 S.C.R., are particularly relevant to the facts of this case. While set out earlier in these reasons, they bear repeating:
Moreover, I am unable to say that there is anything unreasonable in the Minister's use of the land. The Minister is authorized -- indeed he is charged with the duty -- to construct highways. All highway construction will cause disruption. Sometimes it will damage property, sometimes it will enhance its value. To fix the Minister with liability for damages to every landowner whose property interest is damaged, by reason only of the construction of a highway on neighbouring lands, would place an intolerable burden on the public purse. Highways are necessary: they cause disruption. In the balancing process inherent in the law of nuisance, their utility for the public good far outweighs [page112] the disruption and injury which is visited upon some adjoining lands. The law of nuisance will not extend to allow for compensation in this case.
[137] The board's consideration of the utility of the new highway, at p. 12 of its reasons, was, in my view, insufficient. In Mandrake Management, at para. 50, this court directed that "where an essential public service is involved the factor of the utility of the defendant's conduct must not be disregarded. Indeed, I think it must be given substantial weight" (emphasis added). The direction in Mandrake Management employs mandatory language. The board's failure to give effect to that direction constitutes, in my opinion, an error of law.
[138] Given the compelling argument that the actions of the MTO were not only in the public interest but also necessary for public safety, there is good reason to believe that had the board given the appropriate weight to this factor, the scales would have heavily tilted toward a finding that the interference was reasonable.
[139] The board's near-exclusive focus on its conclusion that the interference with access was substantial, its failure to take into account the characteristics of the location and its failure to give adequate weight to the utility of the new highway, require this court to perform the analysis itself: see Mandrake Management, at para. 49.
[140] When the board's factual findings are properly applied to the various elements of the reasonableness analysis, I would conclude, based on the observations made above, that the interference caused by the MTO's conduct was not unreasonable. As the board reasonably concluded, the interference amounted to a "serious impairment in nuisance". However, the interference was such that it fell within the boundaries of what the reasonable property owner in the area should be expected to tolerate and was the result of a project that served the public interest -- more, was actually essential to public safety. Simply put, the highway was built to save lives. In the light of the substantial weight to be given to this factor in the circumstances, it is difficult to see how this change in the access to the Antrim property, particularly given the fact that it actually brought the Antrim truck stop in line with the access typical of Ontario truck stops, can be viewed as unreasonable.
Balancing
[141] In failing to properly carry out the reasonableness analysis, the board failed to give effect to the fundamental purpose of the law of nuisance: balancing the competing rights of property owners to use their land as they wish. [page113]
[142] The board did acknowledge, at p. 11 of its reasons, that nuisance involves a "balancing of interests" [at para. 43]:
The Board does not interpret the St. Pierre reasoning as to the necessity of the highway construction as argued to be obiter, but rather a finding in that case on whether on its facts and with the necessary balancing of interests was the second test of being actionable at common law met.
[143] Unfortunately, it failed to balance. Instead, after identifying factors that had been advanced by the parties as to the reasonableness of the interference, the board proceeded directly to its conclusion that the interference was substantial on the basis that access to Highway 17 was not "as before". On this alone, without contrasting the public benefit with the private detriment and without explaining how one outweighed the other, the board concluded that there was a common law claim in nuisance. With respect, this was not enough. The board was required to consider whether the interference suffered by Antrim was reasonable when balanced against the public interest in the project causing that interference. That the interference was substantial is only one element of the equation.
[144] When the interference to Antrim's access, while significant but clearly far from complete, is measured against the reasonableness of the MTO's use of its land, in an area through which a highway already ran, for the purpose of protecting the public from danger, the conclusion must be that Antrim has not made out a case in nuisance.
3. The "construction not the use" test
[145] Given this conclusion, it is not necessary to address the third issue the MTO raises in this appeal -- that Antrim is not entitled to damages as it cannot satisfy the "construction not the use" test.
[146] However, for the sake of completeness, I will do so by briefly explaining why I would not give effect to this ground of appeal.
[147] The OMB and the Divisional Court both correctly articulated the "construction not the use" test. Coates and Waqué, at p. 10-154.27, clearly indicate that interference of the nature in question here should be considered the product of construction, not use. If the harm alleged was a loss of traffic flow (which does not appear to be compensable in law in any event: see Gross v. Saskatoon (City), 1970 589 (SK QB), [1970] S.J. No. 289, 73 W.W.R. 272 (Dist. Ct.), at para. 18), there would be a strong argument that the loss was the product of the use of Highway 417 as, had the highway not been opened, the traffic may have continued to use Highway 17. However, the interference alleged is the change in the access to [page114] the truck stop property. This is the product of the physical changes to Highway 17, which forces traffic travelling in one direction to take a detour to reach the property. It is these physical changes, the "completed fact of construction" (Coates and Waqué, at p. 10-74.13), which cause the interference.
[148] The MTO's arguments on this issue relate more closely to the significance of the interference than the nature of the interference. It argues that the test is unsatisfied because access was only impeded by the construction, not eliminated entirely. However, the degree of interference, while an important consideration in whether or not the claim would have been actionable at common law, at least where the common law claim is framed in nuisance, is not relevant to this stage of the injurious affection test. Even if the interference is only minimal, provided it is the product of the construction and not the use, it will satisfy the "construction not the use" rule.
[149] I would not give effect to this ground of appeal.
B. The cross-appeal
[150] I propose to deal briefly with the cross-appeal.
[151] Antrim contends that it is entitled to damages measured by the amount of money required to provide it with facilities comparable to what it had on the Highway 17 location, namely, the cost of acquiring the Arnprior property and replacing the buildings and facilities at that site, less the amount it received from the sale of the old site, and adjusting for a betterment factor.
[152] The Divisional Court concluded, as would I, that the Expropriations Act provides compensation for relocating a business only where land is taken. Where, as here, this is not the case, the entitlement to compensation is more restrictive. It is limited to the reduction in the market value of the land injuriously affected and personal and business damages.
[153] This limitation is clear upon a proper interpretation of s. 1(1) of the Expropriations Act and from the jurisprudence, including St. Pierre and Dell Holdings.
[154] It is also in keeping with policy: as the Supreme Court suggested in MacArthur, compensation for injurious affection where no land is taken must be limited to the terms of the Act to permit the authorities to carry out public works.
VIII. Conclusion
[155] In Tock, La Forest J., in concurring reasons, described the question simply as [at para. 16] "whether in the circumstances it is reasonable to deny compensation to the aggrieved [page115] party". As can be seen from this analysis, in my view, the answer in the circumstances of this case is yes.
IX. Disposition
[156] As set out in s. 134 of the Courts of Justice Act, R.S.O. 1990, c. C.43, this court has the power to make any order that could have been made by the court below:
134(1) Unless otherwise provided, a court to which an appeal is taken may, (a) make any order or decision that ought to or could have been made by the court or tribunal appealed from; (b) order a new trial; (c) make any other order or decision that is considered just.
[157] Accordingly, this court may make any order or decision that could have been made by the Divisional Court. The Divisional Court's powers on an appeal from the Municipal Board under s. 31 of the Expropriations Act, reproduced above at para. 59 of these reasons, are set out in that section.
[158] Read together, these provisions give this court the power to make any order or decision that could have been made by the board.
[159] I would therefore allow the appeal, set aside the decision of the Divisional Court and the decision of the OMB and dismiss Antrim's claim. I would also dismiss the cross- appeal.
[160] In the light of the agreement of counsel, I would dispose of costs as follows: I would award the MTO its costs of the appeal in the amount of $20,000 and of the cross-appeal in the amount of $20,000, both inclusive of disbursements and applicable taxes.
Appeal allowed; cross-appeal dismissed.
[page116] Schedule "A"
[QL:GRAPHIC NAME="106OR3d081-1.jpg"/]
Notes
[See Note 1 below]: The issue of the extent to which, if at all, balancing is required when the nuisance claim being advanced is based on actual damage to the plaintiff's property is currently before this court and is under reserve: see Smith v. Inco Ltd., 2010 ONSC 3790, [2010] O.J. No. 2864, 76 C.C.L.T (3d) 92 (S.C.J.), appeal as of right to the C.A.
[See Note 2 below]: At trial, Inco Ltd. was found liable in nuisance for emitting nickel particles into the air, affecting the value of the plaintiffs' land. Despite the considerable distance between some of the plaintiffs and the source of the alleged interference, the issue of proximity was raised neither at trial nor on appeal by Inco.