COURT FILE NO.: 384/08

DATE: 20090206

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

J. WILSON, BELLAMY and KARAKATSANIS JJ.

B E T W E E N:

TORONTO AND REGION CONSERVATION AUTHORITY (and tHE CITY OF TORONTO)

Appellants (Respondents )

• and -

A. EDWARD GADZALA, V& E GADZALA HOLDINGS LIMITED and 412264 ONTARIO LIMITED

Respondents (Claimants)

Paul R. Henry and Robert B. Lawson, for the Appellant/Respondent, TRCA

John S. Doherty, for the Appellant/Respondent City of Toronto

Stephen F. Waqué , Sean L. Gosnell and David Klacko, for the Respondents/ Claimants

HEARD at Toronto: December 3, 2008

KARAKATSANIS J.:

[1] This is an appeal by the Toronto and Region Conservation Authority (TRCA) and the City of Toronto of the decision of Member Stefanko of the Ontario Municipal Board (the Board) dated June 19, 2008. Under s. 31 of the Expropriations Act, R.S.O. 1990, c. E.26 (the Act) an appeal may be made on questions of law, fact or both.

[2] The appellants appeal the Board order that the TRCA pay to the claimants the sum of $1,859,999 plus interest, for injurious affection to the lands of the claimants municipally known as 2143 and 2147 Lakeshore Boulevard West, Toronto.

[3] The appellants seek an order setting aside the decision and a determination that the Respondents’ claim for injurious affection was settled by the Board’s consent order of January 26, 2004, which granted a 0.2249 hectare parkland dedication credit.

[4] In the alternative, they ask that either the value of the parkland credit be set off against the value of the claim for injurious affection and that damages be fixed at $760,000, or that the matter be remitted to the Board for a hearing.

Background

[5] This case has a lengthy and complicated history. The claimants sought compensation for their expropriated land. This matter was dealt with by the Ontario Municipal Board and appeals from that decision were taken. This appeal relates to the final phase determining the appropriate compensation for injurious affection with respect to two of the properties owned by the claimants.

[6] When land is expropriated, damages for injurious affection may be payable under s. 13(2)(c) of the Act. “Injurious affection” is defined in s. 1(1) as follows:

(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 statue…[emphasis added].

[7] The claimants owned four properties bordering on Lake Ontario in southeast Etobicoke known as the “motel strip”. In 1996, the TRCA expropriated a one metre strip along the lakeshore of the two house properties, and the underwater lots and a portion of the adjoining dry land of the two motel properties, to create a regional linear park and a shoreline drive. The rest of the two house properties were expropriated by the City of Toronto in 1997 for a local city park.

[8] Most issues relating to the expropriations were resolved by the 2004 decision of the Municipal Board (the First Board Decision) and the 2006 decision of the Divisional Court Toronto and Region Conservation Authority v. Gadzala (2006), 2006 12974 (ON SCDC), 266 D.L.R. (4th) 52 (Ont. Div. Ct.) (the Prior Divisional Court Decision). Leave to appeal the Prior Divisional Court Decision was denied by the Ontario Court of Appeal.

[9] The only outstanding issue after the conclusion of the Prior Divisional Court Decision was the quantum for the claim of injurious affection to the remaining land of the motel properties.

[10] The First Board Decision found entitlement to damages for injurious affection because, after the expropriation, no townhouses could be built on the remaining motel lands. This finding of entitlement was upheld by the Prior Divisional Court Decision. However, the First Board Decision did not quantify the damages for injurious affection to the motel properties, leaving it to the parties to come to an agreement, failing which the Board would decide. As it turned out, the parties could not agree on the issue of quantum of damages, and therefore applied to the Municipal Board for a determination of this issue.

[11] In June 2008, in a second Municipal Board decision, Member Stefanko fixed the quantum of damages for injurious affection for the two motel properties (the Second Board Decision).

[12] The issue in this appeal from the Second Board Decision is the appropriate quantum of the damages for injurious affection for the two motel properties.

[13] The matter becomes complicated because determination of the outstanding issue requires an interpretation of the First Board Decision and the Prior Divisional Court Decision. It also requires consideration of the effect of a consent order granted during the course of the first Board hearing in which the parties consented to an order providing a parkland dedication credit (against future development) for the expropriated land.

[14] The appellants raise the following questions:

1. Did the Board misinterpret the Amended Statement of Claim and err in failing to find that the order providing the parkland dedication credit settled the claim of injurious affection based upon the loss of opportunity to build townhouses?

2. Did the Board err in failing to reduce the quantum of damages for injurious affection by the value of the parkland dedication credit?

3. Did the Board err in its calculation in failing to consider the reduction in the number of units that had to be accommodated on the remaining lands?

Standard of Review

[15] The conclusion in the Prior Divisional Court Decision about the applicable standard of review at para. 53 also applies in this appeal:

In our view, there are no pure questions of law raised in this appeal. Rather, the issues raised are questions of fact or mixed fact and law. Given the Board's expertise in market valuation and expropriation, the appropriate standard of review on all the issues is reasonableness.

[16] The decision of the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 confirmed that a review for reasonableness requires deference to decisions of fact or mixed fact and law made by specialized tribunals (para. 53), as long as they fall “within a range of possible acceptable outcomes which are defensible in respect of the facts and law” (para. 47).

The First Board Decision

[17] On October 4, 2004, after 50 days of hearings, Board Member Beach ordered compensation to the claimants for the market value of the expropriated land and the loss of riparian rights for both the motel and house properties.

[18] Two aspects of Member Beach’s decision impact upon this appeal.

[19] First, Member Beach made an award for the loss of opportunity for parkland credit relating to the house properties as well as disturbance damages for delay. Second, he found that because compensation for the expropriated house properties included the value for 56 development units, those units should not be transferred to the remaining motel properties.

[20] In this appeal, one issue is the impact, if any, of the granting of the parkland dedication credit upon the right and quantum of damages for injurious affection. The second issue is the effect, if any, of the finding that the 56 development units from the house properties could not be transferred to the motel properties and whether the reduction in the remaining development units impacts on the quantification of damages for injurious affection for the motel properties.

The parkland credit

[21] During the course of the first Board hearing, the parties consented to a January 2004 order that the claimants, or a successor in title, be entitled to a parkland dedication credit of 0.2249 hectares relating to high and dry lands of the motel properties expropriated by the TRCA. The parkland dedication credit could be used to satisfy requirements for future development on the motel properties and was valued at 1.1 million dollars.

[22] The impact, if any, of this parkland dedication credit is a key issue in the appellants’ argument that there is no entitlement to damages for injurious affection with respect to the motel properties. The appellants argue that the claimants accepted the parkland dedication credit in the alternative to, and in satisfaction of, the damages for injurious affection with respect to the motel properties.

The 56 development units

[23] The Board considered several “before” and “after” development scenarios to determine the market value of the motel properties. The Board accepted the “Weston/Atlin” scenario presented by the claimants’ expert witnesses as the highest and best use of the land. The before and after scenarios were based upon the 293 development units permitted for the motel properties plus 56 units transferred from the house properties. The Board found that before expropriation, the land would have been developed with 88 townhouse units, and 261 high-rise apartment units, for a total of 349 units. In the scenario before the taking, 28 of the townhouse units would have been built on the expropriated lands, leaving 60 townhouses on the remaining land. After expropriation, 349 units would still be possible, but all of them would be high-rise apartments.

[24] With respect to the claim of injurious affection, Member Beach found that the claim for the remaining motel lands had been proven and stated at pp. 58 and 59:

In the Board’s view it is un-arguable that what could be built before the taking cannot now be built after the taking. The evidence indicates that after expropriation, a form of preferred development that included townhouses, because of the expropriation is replaced with less valuable high-rise units. This is a result of a reduction in landmass. That is, it is alleged that the claimants’ lands have been compromised by the taking. The acquisition, therefore, has led to a claim for injurious affection of the lands.

The Board finds that the remaining lands have been injuriously affected at least by the acquisition of part of the claimants’ lands. [emphasis in original]

[25] Member Beach considered whether the value of the public enhancements should be set off against the claim for injurious affection under s. 23 of the Act and concluded that it should not because it was not a special or distinct advantage but was a general benefit available to all the area landowners.

[26] Member Beach did not specify the quantum of the claim for injurious affection but ordered that it was:

To be recalculated without 56 units from parcels 18 and 20 [the house properties]. If there is no agreement with respect to the resulting value, the Board may be spoken to. Value is to be less than $1,860,000 [the amount claimed].

[27] It is clear elsewhere in the decision that Member Beach declined to include the 56 house properties’ units because their loss had already been compensated in the market value of the house properties.

The Prior Divisional Court Decision

[28] The Prior Divisional Court Decision affirmed the compensation for market value of the expropriated land and the claim for injurious affection for the remaining land in the motel properties, but set aside disturbance damages for the parkland credit relating to the house properties and the disturbance damages for delay.

[29] The Prior Divisional Court Decision addresses the issues raised by the appellants in this appeal.

[30] With respect to the claim for injurious affection to the remaining land of the motel properties, the TRCA had submitted to the Divisional Court that:

a) the Board erred in not determining the actual amount of compensation;

b) there was a lack of evidence connecting the reduction in market value in the remaining motel properties and the expropriation; and

c) the claim should have been set off against benefits inuring to the claimants as a result of the public investment in the expropriated lands.

[31] The court denied all grounds of appeal relating to the claim for injurious affection: Toronto and Region Conservation Authority v. Gadzala (2006), 2006 12974 (ON SCDC), 266 D.L.R. (4th) 52 at paras. 91-94 (Div. Ct.).

[32] First, the Prior Divisional Court Decision upheld the finding in the First Board Decision of entitlement to damages for injurious affection in an amount to be agreed upon of not more than $1,860,000.00. The court upheld the finding that, after the taking, the more valuable townhouses could no longer be built on the remaining land of the motel properties and the reduction in market value was linked or causally connected to the expropriation. The court found the Board did not err in leaving quantum to be fixed by the parties and agreed that the quantum should not include assessment of the 56 development units allocated to the house properties.

[33] Second, the Prior Divisional Court Decision upheld the First Board Decision that the set off for parkland credit claimed by the TRCA was not available because benefits must be specific and unique to the claimants to qualify for set off. The public infrastructure with respect to parkland credits was a general benefit to all landowners in the area. The court found the Board’s finding in that regard to be reasonable and well-supported by the evidence.

The Second Board Decision and this appeal

[34] The Prior Divisional Court Decision having confirmed the conclusion in the First Board Decision that the applicants were entitled to damages for injurious affection, the parties were left to settle upon an amount. They were unable to agree and applied to the Board. Member Beach was no longer sitting and the matter was heard by Member Stefanko.

[35] On June 19, 2008, Board Member Stefanko awarded $1,859,999 for injurious affection for the motel properties. Entitlement was based upon the finding that prior to the taking, the claimants could build 88 townhouses: 28 townhouses would have been located on the expropriated land and 60 townhouses on the remaining land. Member Stefanko proceeded on the basis of the findings of Member Beach that, after expropriation, the townhouses had to be replaced with apartment units, thus reducing the market value of the remaining land.

[36] The evidence of the expert Atlin valued the development on the remaining land before the expropriation as 60 townhouses at $75,000 each and 261 apartments at $30,000 each, for a total of $12,330,000. He excluded the 28 townhouses that would have been located on the expropriated land. He then valued the 349 units after expropriation at $10,470,000. The loss was the difference of $1,860,000. The difference remains the same whether 56 apartment units at $30,000 each are deducted from the development before the expropriation or after the expropriation.

[37] Member Stefanko therefore held that the exclusion of the 56 units did not change the amount of the award because the evidence of the expert was that it would not affect the outcome: “…the 56 apartment units transferred from the subject house lots are included in both the before and after calculations, thereby cancelling out their contribution to value” (p. 5). He appreciated that there should be no double recovery but held at p. 6 that “the basic consideration…is not the 56 units…but rather, the inability or loss of opportunity to build 88 townhouses and the value associated with them.”

[38] Further, the Board held it was bound by the preferred development scheme (the Weston/Atlin scenarios) as found in the First Board Decision and rejected the submission that the consent order providing the 0.2249 hectare parkland dedication credit for the expropriated dry lands of the motel property settled or reduced the claim for injurious affection.

1. Did Member Stefanko misinterpret the Amended Statement of Claim and err in failing to find that the order providing the parkland dedication credit settled the claim of injurious affection based upon the loss of opportunity to build townhouses?

[39] The appellants submit that the claim for injurious affection for the loss of the opportunity to build townhouses on the remaining land was an alternative claim to the claim for the loss of the opportunity to receive credit for dedicating the expropriated land as parkland. They rely upon the Amended Statement of Claim and a statement in the Prior Divisional Court Decision, and submit that the claim for injurious affection would result in double recovery.

[40] The appellants assert that the consent order awarding a parkland dedication credit of 0.2249 hectares (with a value of $1.1 million) settled the claim for injurious affection, including the claim for the loss of opportunity to build townhouses. The appellants make several arguments, which I do not accept.

a. Additional or alternative claims

[41] The appellants submit that Board Member Stefanko erred in misinterpreting the claims as additional claims rather than as alternative claims. While the claim for injurious affection and disturbance damages was “in addition to” compensation for loss of market value of the expropriated land, they submit the claim for injurious affection itself was advanced in two separate and mutually exclusive ways. Paragraph 50(d) of the Amended Statement of Claim pleaded that the construction of the waterfront park and road would result in reduced development potential for the remaining motel properties. Paragraph 50(A), added at the end of paragraph 50, stated:

In the alternative to the claim set out in paragraph 50(d)…the claimants claim that they have lost the opportunity to dedicate the dry lands expropriated for parkland dedication purposes…the claimant will be required to make additional payments of cash in lieu of the dedication of parkland. This claim is advanced as injurious affection to the remaining lands, in the alternative as a special difficulty in relocation under s 13(2)(d) of the Act, in the further alternative, under section 14(2) of the Act, and the final alternative, as a disturbance damages pursuant to s 13(2)(b).

[42] I would dismiss this ground of appeal for the following reasons.

[43] In the context of paragraphs 48, 49 and 50 of the Amended Statement of Claim, it is clear that the claim for injurious affection is an additional claim regarding loss relating to the remaining lands, and paragraph 50 sets out various non-exhaustive examples of the claim for injurious affection. Admittedly, the drafting of paragraph 50(A) is confusing as the claim for injurious affection must relate to the remaining lands. However, although the language of paragraph 50(A) is framed in the alternative to paragraph 50(d), paragraph 50(A) advances the claim for the loss of opportunity to dedicate the expropriated lands on a number of bases in addition to injurious affection.

[44] Furthermore, the amended pleadings and opening statement of the claimants were crafted before disclosure by the City of Toronto of the policy relating to the parkland dedication credit for the regional linear park. During the first Board hearing, after disclosure, the parties’ position changed. The consent order was made after the City’s expert testified that the credit was available whether the land was dedicated or expropriated, and that it was available notwithstanding compensation paid for expropriation. As a result, the premise underlying paragraph 50(A) that the claimants had lost the opportunity to parkland dedication credits proved to be wrong. The evidence was that the claimants were entitled to the parkland dedication credit for the dry lands expropriated for the regional park whether or not they also asserted a claim for injurious affection of the remaining lands. The consent order was made shortly after this expert’s evidence. It is evident from their closing submissions that the claimants continued to pursue the claim for injurious affection for the loss of townhouse development, notwithstanding the consent order. Member Beach was aware of the consent order for the parkland dedication credit when he found that the claimants were entitled to injurious affection. While the amended claim in paragraph 50(A) is confusing, the order for parkland dedication credit is not challenged in this appeal, nor were the pleadings impugned to suggest that they did not support the order. The claim under paragraph 50(d) is unambiguous.

b. “Findings” in the Prior Divisional Court Decision

[45] The appellants rely upon a comment in the reasons of the Prior Divisional Court Decision to suggest the consent order settled any claims for injurious affection for the motel properties. In dealing with the appeal relating to the parkland credit for the house properties (at paras. 153 and 154), the Prior Divisional Court Decision differentiated between the credit for the high and dry lands acquired by TCRA for the regional linear park, (whether by dedication or expropriation) as determined in accordance with a chart prepared for the City by the TRCA, and the discretionary credit for lands dedicated to Toronto for a public park outside the parameters of the chart.

[46] The Prior Divisional Court Decision held that the First Board Decision erred in awarding disturbance damages for the loss of opportunity to obtain a parkland credit for the house properties because it awarded market value for 56 units of density as the highest and best use of development. Alternative use of the same land for park dedication would result in double recovery for market value for the house lands expropriated, and the opportunity to receive a parkland credit was speculative because the City of Toronto had discretion not to grant credit. In determining that the First Board Decision misapprehended the discretionary nature of the City’s powers to grant parkland credits for the house properties, the court stated at para. 168: “The fact that the City exercised its discretion with respect to a parkland credit for the Motel Properties in settlement of the claim for injurious affection in the TRCA expropriation ought not to be converted into an entitlement to such a credit in the City expropriation of the House Properties.”

[47] This reference by the court to the consent order as settlement of the claim for injurious affection in the TRCA expropriation reflects language from the City of Toronto’s factum on appeal as it related to the claim for the house properties. It does not purport to be a finding. It illustrates the difference between the credit available in the chart for lands dedicated or expropriated for the regional park and the discretionary credit for lands dedicated for the city park. This descriptive reference in another portion of the reasons does not constitute res judicata on the specific issue before us on this appeal.

[48] I conclude that this argument is without merit as the Prior Divisional Court Decision explicitly upholds the First Board Decision’s finding that the claimants are entitled to compensation for injurious affection for the remaining motel properties.

c. Double recovery

[49] The appellants also submit that the same land cannot be both developed and dedicated for a park. They argue that to grant compensation for both claims based upon two mutually exclusive methods of calculating the injurious affection damages would result in double recovery.

[50] I conclude that there is no double recovery with respect to the claim for injurious affection because the loss of parkland dedication credit relates to the expropriated land and the loss of the opportunity to build townhouses relates to the remaining land. The claims do not relate to the same land. Furthermore, as noted, the TRCA parkland dedication credit program was available to all landowners whether the land was dedicated or expropriated regardless of compensation paid, and differed in this important respect from the City’s discretionary program for parkland dedication credit for city parks.

d. Res judicata

[51] In the Prior Divisional Court hearing, the TRCA argued that the parkland dedication credit was an alternate claim to the market value claim for the expropriated motel lands. At paragraph 149 of its factum, the TRCA submitted that the claimants sought either an award of $1,860,000 for the alleged reduction in market value of the remaining lands or an award of $1,650,000 for the loss of land for parkland dedication use. At paragraph 150, the TRCA referred to the consent order for the parkland dedication credit, which had a value of $1,100,000 when ordered and $1,554,000 at the date of hearing, and submitted that additional compensation for injurious affection constituted double recovery.

[52] In addressing these submissions, the Prior Divisional Court Decision expressly concluded at paragraph 71 that the Board did not err in assessing market value of the expropriated motel properties land without considering the parkland dedication credit agreed upon by the parties, noting that “[t]he agreement on a parkland dedication credit occurred during the hearing but it was not determinative of market value…” Although the Prior Divisional Court Decision did not directly address this argument in relation to the claim for injurious affection of the remaining motel lands, it nevertheless confirmed the Board Member’s finding that the claimants were entitled to compensation for injurious affection based upon the fact that they could no longer build townhouses after the taking.

[53] Therefore, entitlement to damages for injurious affection has already been determined in the First Board Decision and upheld in the Prior Divisional Court Decision. To attempt to advance the same argument again offends the principles of res judicata.

[54] The Board was reasonable in finding both that the pleadings did not preclude an award for injurious affection based upon the loss of opportunity to develop townhouses on the remaining land and that it was bound by the principles of res judicata. There is no merit to this ground of appeal.

2. Did the Board err in failing to reduce the quantum of damages for injurious affection by the value of the parkland dedication credit?

[55] The appellants submit that if the parkland dedication credit does not settle the claim for injurious affection, then it should offset the quantum of damages in order to avoid double recovery.

[56] Section 23 of the Act allows a set-off of benefits from the scheme against damages for injurious affection to the owner’s remaining lands:

The value of any advantage to the land or remaining land of an owner derived from any work for which land was expropriated or by which land was injuriously affected shall be set off only against the amount of the damages for injurious affection to the owner’s land or remaining lands.

[57] There is no merit to this ground of appeal. For the reasons given above, an award for a parkland dedication credit for the expropriated land does not duplicate an award for damages to the remaining lands arising as a result of the expropriation. Furthermore, the parkland dedication credit was not proposed as a set off against the claim for injurious affection in the previous proceedings and is not, in any event, a proper set off under s. 23.

[58] There is no indication in the First Board Decision that the consent order was a set off against the damages for the claim for injurious affection. Despite the fact that the consent order was made prior to the initial Board decision, Member Beach did not direct that quantum be set off by the parkland credit. Furthermore, the order was expressed as a measure of land rather than as a dollar amount.

[59] The appellants argued both before the Board in the original hearing and before the Divisional Court on the first appeal that the consent order should reduce the amount payable for the claim relating to the compensation for the market value of the expropriated lands. That argument was unsuccessful before the Board and on appeal. The Prior Divisional Court Decision found that the Board did not err in assessing market value of the expropriated lands without considering the parkland dedication credit for those dry lands (para. 71).

[60] The appellants argued unsuccessfully that public improvements constituted an appropriate set off under s. 23 from the claim for injurious affection. The First Board Decision and the Prior Divisional Court Decision confirmed that the set off for public improvements against the claim for injurious affection was not available. They did not deal specifically with a set off for the parkland dedication credit nor was this set off proposed by the appellants in those earlier proceedings.

[61] In the Second Board Decision, Member Stefanko found that the evidence of the city planner, Mr. Park, established that City policy was to provide a parkland credit to all property owners and their successors in title who contributed to the linear park, whether by dedication or expropriation and irrespective of market value amounts payable to the claimants on expropriation. There was evidence to support such a finding.

[62] This policy of issuing mandatory credit for the regional park constitutes a benefit generally available to all landowners, unlike the discretionary credit under the policy relating to city parks. A set off under s. 23 of the Act is not available for benefits generally available to all landowners.

[63] Accordingly, Board Member Stefanko’s decision not to reduce the damages by the value of the parkland dedication credit was reasonable, and indeed, correct.

3. Did the Board err in its calculation by failing to consider the reduction in the number of units that had to be accommodated on the remaining lands?

[64] The appellants argue that the Board erred in accepting the evidence of Weston/Atlin that townhouses could no longer be built after expropriation because the claimants did not lead any evidence of a development scenario that excluded the 56 units transferred from the house property. They submit that the court should draw an adverse inference from the failure to call such evidence. They further submit that because the claimants’ experts based their results on the full 349 units, there was no evidence about whether townhouses could be built in a smaller project. Logically, a project of less density on the same landmass might accommodate townhouses as well as apartments.

[65] The appellants submit that if Board Member Beach had been prepared to accept the Weston/Atlin evidence without adjustment he would simply have calculated the damages, and not left the parties to negotiate an amount.

[66] The appellants submit, in the alternative, that this court should accept the evidence of its expert Charles Gans, who provided the only evidence of a development scenario using the appropriate number of units. Mr. Gans testified that after expropriation 42 traditional townhouses and 250 condominiums could be built on the remaining lands. The appellants ask this court to assess reduced damages at $810,000, based upon a combination of the Weston/Atlin and the Gans’ scenario.

[67] Board Member Stefanko noted that the direction to exclude the 56 units was presumably made to avoid any double counting of value of the 56 units that had been attributable to the house properties and which had been valued as a component of the market value of the house properties. He considered the effect of removing the 56 units from the development proposal and held at p. 5:

Irrespective of the motive or intent behind the exclusion of 56 units from the calculation, it is abundantly clear and mathematically correct, that the exclusion of such 56 units does not change the amount of the award. The amount remains the same because, as Mr. Atlin noted in his initial report: “…the 56 apartment units transferred from the subject house lots are included in both the before and after calculations, thereby cancelling out their contribution to value”.

[68] He concluded, at p. 6, that “the basic consideration…is not the 56 units…but rather, the inability or loss of opportunity to build 88 townhouses and the value associated with them. This lost opportunity occurs regardless of whether the 56 units are included or excluded from the calculation.”

[69] Board Member Stefanko also held that Board Member Beach’s finding that the townhouses that could be built on the remaining land before expropriation could not be built after expropriation was res judicata.

[70] The appellants raise arguments that are similar to those advanced in the Prior Divisional Court Decision. The TRCA submitted in its factum in the first appeal (at paras. 152 and 153) that the Board’s acceptance of Weston’s options which assume the availability of 349 units conflicted with the Board’s rejection of the claimants’ entitlement to transfer 56 units from the house properties. The appellants submitted that there was no evidentiary basis for the Board’s conclusion that there had been injurious affection to the claimants’ remaining lands as Weston and Atlin never examined development scenarios for the claimant’s lands using 293 units. Having concluded the market value and injurious affection had to be calculated on the basis of 293 units, the Board made a significant error in disregarding the evidence of Charles Gans, an architect, that both before and after expropriation the claimants’ motel lands could be developed with 250 condominium apartment units and 42 townhouse units. The Prior Divisional Court Decision did not accept those submissions.

[71] In effect, the appellants are asking this court to substitute factual findings and accept the evidence of the Gans after-expropriation scenario.

[72] The First Board Decision rejected the Gans’ evidence, which was seriously challenged during this lengthy, complicated 50-day hearing. Development scenarios and market value were the subjects of evidence of numerous experts and extensive findings by a Board with considerable expertise in such areas. Clearly, the First Board Decision found that no townhouses could be built on the reduced landmass after the expropriation and this finding was upheld in the Prior Divisional Court Decision. The Board chose the Weston/Atlin scenario and was content to assess market value of the expropriated lands on a development scenario before the taking that was not based on 293 units. The subsequent calculation of damages did not entitle the appellants to once again challenge the findings that are the basis for the claim.

[73] Board Member Stefanko canvassed the issue of potential double recovery for the 56 units. He concluded that the calculation for the injurious affection would be the same with the exclusion of the 56 units in these circumstances and he had evidence before him upon which to make such a finding. His finding with respect to the 56 development units is within the range of reasonable decisions based upon the evidence. I would not disturb his finding.

CONCLUSION

[74] For the reasons outlined above, the appeal is dismissed.

[75] The respondents/claimants disputed the City of Toronto’s standing to bring an appeal as it was not a party to the order. It asks that the City’s appeal be quashed or alternatively dismissed with substantial indemnity costs.

[76] The City of Toronto was a party in a combined hearing of claims before the Board against both the TRCA and the City relating to the expropriation of the house properties and a part of the motel properties. This appeal involves only the claim against the TRCA for injurious affection with respect to the remaining land of the motel properties. However, the City is obliged to pay 50% of the award pursuant to the terms of an inter-governmental agreement and I am satisfied it is entitled to represent its interest in these proceedings. Given my disposition in this appeal, it is not necessary to address this issue except as it relates to the issue of costs.

[77] The claimants were responding to an appeal by two separate respondents. Given the nature of the issues and that this was an expropriation, it is appropriate that the claimants have their costs on a full indemnity basis. Costs are fixed in the amount of $62,800 for fees and disbursements of $6,648, plus GST.

KARAKATSANIS J.

I agree ______________________________

J. WILSON J.

I agree ______________________________

BELLAMY J.

DATE: February 2009