City of Owen Sound (Corporation of the) v. Naidal Incorporated, 2018 ONSC 6207
CITATION: City of Owen Sound (Corporation of the) v. Naidal Incorporated, 2018 ONSC 6207
DIVISIONAL COURT FILE NO.: DC-17-00103-00 DATE: 20181017
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SACHS, HORKINS, THORBURN JJ.
BETWEEN:
THE CORPORATION OF THE CITY OF OWEN SOUND Appellant
- and -
NAIDAL INCORPORATED Respondent
Erroll Treslan, for the Appellant Ondrej Sabo, for the Respondent
HEARD at Brampton: October 17, 2018
C. HORKINS J.
[1] This is an appeal from the decision of the Ontario Municipal Board ("the Board") dated October 5, 2017.
[2] The Respondent, Naidal Incorporated owns a property where it operates a gas station at the corner of 9^th^ Ave East and 15^th^ Street in Owen Sound.
[3] In mid-August 2011, during part of a road construction project, the Appellant, the Corporation of the City of Owen Sound (the "City") trespassed on a 436 square foot portion of the Respondent’s Property. This part of the Property is a linear strip that runs along the entire 9^th^ Ave East frontage.
[4] The trespass occurred because the City mistakenly believed that it owned this portion of the Respondent’s property. When the City learned that this was not the case, the Respondent gave the City permission to enter onto the Property to complete the road construction. This permission was provided on September 8, 2011.
[5] Between 2011 and 2015 there were some negotiations between the parties regarding the City’s interest in acquiring all or part of the Property.
[6] The negotiations came to an end and on June 15, 2015 the City expropriated the 436 square foot portion (“Expropriated Land”).
[7] The City obtained an appraisal of the Expropriated Land that estimated the fair market value at $25,000.
[8] On July 24, 2015, The City served the Respondent with a statutory offer of $25,200 under s. 25 of the Expropriations Act without prejudice to the Respondent’s right to seek a further assessment. The offer was accepted and the money was paid.
[9] On June 24, 2016 the Respondent served the City with a Notice of Arbitration claiming $100,000 for the Expropriated Land, $500,000 for injurious affection and $500,000 for disturbance damages.
[10] The City’s Reply denied the claims and stated that the Respondent had been fully compensated. The City also stated that the Respondent’s claims for damages for trespass and nuisance sustained before September 8, 2011 were statute barred. The City also disputed such damages after this date because the Respondent had given the City permission to access the land on this date.
[11] The parties agreed on the fair market value for the Expropriated Lands and the City paid the Respondent an additional $2,250.
[12] The hearing proceeded before the Ontario Municipal Board on the claims that were not settled.
[13] The Board awarded the Respondent the sum of $51,950 (less what the City had already paid) plus interest and costs. This award included the following amounts that are the subject of this appeal:
• $10,000 for disturbance damages for trespass
• $6,000 for “executive time”
• Costs from August 15, 2011 (the date of trespass) forward. The amount was to be agreed upon or assessed.
[14] The City raises the following grounds of appeal:
(1) The Board erred when it found that the Respondent was entitled to compensation under s. 18(1) of the Expropriations Act, R.S.O. 1990, c. E.26 for the trespass that occurred in August of 2011.
(2) The Board erred in fact and/or law by awarding the Respondent $6,000 for executive time.
(3) The Board erred in awarding the Respondent costs for a period of time prior to the expropriation.
(4) The Board erred in awarding costs to the Respondent for periods prior to the expropriation and in failing to provide a more detailed ruling on costs.
Analysis
[15] The parties agree that the standard of review is reasonableness.
The Trespass Claim
[16] Section 18 (1) of the Expropriations Act provides that, “The expropriating authority shall pay to an owner other than a tenant, in respect of disturbance, such reasonable costs as are the natural and reasonable consequences of the expropriation….”
[17] The City submits that the claims in relation to the trespass were not a natural and reasonable consequence of the expropriation. In making this submission, the City emphasized that the trespass occurred four years before the expropriation.
[18] At paragraphs 47 to 50 and 53 of its decision the Board addressed this issue as follows:
[47] The Claimant submits that pursuant to s. 13(2) of the Act where the land of an owner is expropriated compensation payable to the owner shall be based upon “(b) the damages attributable to the disturbance”. The Claimant submits that the Act is a remedial statute, should be given a broad and liberal interpretation consistent with its purpose, and that the overriding objective of the Act is to provide fair and proper indemnity for the owner of the expropriated land. The question arises as to whether the City should be responsible for damages which arose prior to Naidal’s permission to enter and prior to the actual expropriation.
[48] The Board was referred to the Supreme Court of Canada’s decision in Toronto Area Transit Operating Authority v. Dell Holdings Ltd. 1997 400 (SCC), [1997] 1 S.C.R. 32. There the Supreme Court stated:
The approach to damages flowing from expropriation should not be a temporal one; rather it should be based upon causation.
[49] It is not uncommon that damages which occurred before the expropriation can in fact be caused by that very expropriation.
[50] In this particular case, the basis for the expropriation is the fact that the City learned to its surprise in mid-August of 2011 that it did not own Part 1 on the R Plan. In order to complete its road work it needed to acquire some or all of Part 1 on the R Plan.
[53] The Board finds that the Act is a remedial statute to be read in a broad and purposive manner that is intended to provide fair indemnity to the expropriated owner, and that the approach to be followed for damages flowing from expropriation should be based upon causation. Thus the Board will address the issue of disturbance damages for the trespass.
[19] The Board thereby clearly found that there was a causal nexus between the trespass and the expropriation. As such, it was reasonable for the Board to conclude that the damages arising out of the trespass were a natural and reasonable consequence of the expropriation.
Damages for Executive Time
[20] There was no issue before us as to the existence of a discretion on the part of the Board to award damages for executive time.
[21] The City takes the position that the Board allowed damages for executive time solely on the basis of the record of correspondence to be found in exhibits one and two.
[22] According to the City, these records contain almost no correspondence that was authored by the principal of the Respondent, Mr. Basra.
[23] This is not accurate. In paragraph 186 of the decision the Board referred to Mr. Basra’s testimony that he had spent “hundreds of hours on this matter meeting and retaining counsel, engaging in communications with the City and attempts to resolve this matter.”
[24] In view of what the Board noted to be the unusual nature of this case (because it commenced with a trespass) and the many years it took for this matter to come to a hearing, it was reasonable for the Board to exercise its discretion to make an award for executive time damages.
Costs
[25] In view of our finding in respect of the trespass issue, it was reasonable for the Board to exercise its discretion by awarding costs dating from August 15, 2011, the date of the trespass.
[26] The City also made a number of arguments about the unreasonable nature of the costs incurred by the Respondent. These are arguments that can be raised before the Assessment Officer. The Board has the clear authority to refer the costs for an assessment pursuant to section 32(1) of the Expropriations Act.
Conclusion
[27] For these reasons, the Appeal is dismissed.
[28] “For reasons given orally by Horkins J. this appeal is dismissed. The Respondent submits that because this appeal related to an expropriation matter the ordinary rules regarding costs do not apply. On this basis it requests full indemnity costs fixed in the amount of $23,586.84. In our view because this is a court proceeding (not a proceeding in front of the Board) the ordinary rules of costs do apply. Therefore we fix the costs of the Respondent at $7,500 which is a fair and reasonable partial indemnity reflection of the amounts at issue and the complexity of the appeal.”
C. Horkins J.
I agree _______________________________
Sachs J.
I agree _______________________________
Thorburn J.
Date of Reasons for Judgment: October 17, 2018
Date of Release:
CITATION: City of Owen Sound (Corporation of the) v. Naidal Incorporated, 2018 ONSC 6207
DIVISIONAL COURT FILE NO.: DC-17-00103-00 DATE: 20181017
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, HORKINS, THORBURN JJ.
BETWEEN:
THE CORPORATION OF THE CITY OF OWEN SOUND Appellant
AND
NAIDAL INCORPORATED Respondent
ORAL REASONS FOR JUDGMENT
C. Horkins J.
Date of Reasons for Judgment: October 17, 2018
Date of Release: