The Corporation of the City of Windsor v. Paciorka Leasehold Limited, 2021 ONSC 2189

CITATION: The Corporation of the City of Windsor v. Paciorka Leasehold Limited, 2021 ONSC 2189

DIVISIONAL COURT FILE NO.: 142/20

DATE: 20210331

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Pattillo, Kristjanson and Favreau JJ.

BETWEEN:

The Corporation of the City of Windsor

Appellant

– and –

Paciorka Leasehold Limited, Bruce Paciorka, Gordon Paciorka and Elizabeth Frey

Respondents

Stephen Waqué, Frank Sperduti, Julie Lesage and Andrew Baker, for the Appellant

Jason Beitchman and Conner Harris, for the Respondents

HEARD by videoconference: September 3, 2021

Favreau J.:

Overview

[1] The Corporation of the City of Windsor appeals a decision of the Local Planning Appeal Tribunal (“LPAT”) that awarded approximately $2.8 million to the respondents as compensation for expropriation and injurious affection.

[2] This was the second decision dealing with the expropriation of the lands at issue. In Windsor (City) v. Paciorka Leaseholds Limited, 2012 ONCA 431, the Court of Appeal had found that the first decision failed to consider the impact in valuing the properties of Provincial Policy Statements, and specifically the restrictions in those statements on developing environmentally sensitive lands.

[3] The City now argues that the LPAT failed to follow the directions given by the Court of Appeal. The City also argues there was a breach of the rules of natural justice because the LPAT “copied” a significant portion of the respondents’ written submissions in the “Findings” portion of its decision.

[4] For the reasons below, the appeal is dismissed. I agree with the respondents that the City is essentially asking this Court to reweigh the extensive evidence before the LPAT. I see no errors of law or palpable and overriding errors of fact.

Statutory scheme

[5] Before reviewing the factual background, it is helpful to review the relevant provisions of the Expropriations Act, R.S.O. 1990, c. E.26, and the applicable Provincial Policy Statements under the Planning Act, R.S.O. 1990, c. P.13.

Expropriations Act

[6] The Expropriations Act governs the expropriation of private property in Ontario. Public authorities are required to compensate landowners in accordance with the provisions of the Act.

[7] Section 3(2) of the Expropriations Act provides that landowners are entitled to compensation for, amongst other things, the market value of the land, damages attributable to disturbance and damages for injurious affection.

[8] Section 14(1) of the Act defines “market value” as “the amount the land might be expected to realize if sold in the open market by a willing seller to a willing buyer”. When determining the market value of the lands, section 14(4)(b) of the Act prohibits accounting for “any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation”. This principle is typically referred to as “screening out” the expropriation scheme.

[9] Damages for injurious affection may be available where the public authority only acquires part of a landowner’s lands. Section 1(1) defines “injurious affection” as follows:

(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…

[10] Section 33(1) of the Expropriations Act provides that a 6% interest rate is payable on the market value of the expropriated property and the amount of damages for injurious affection “calculated from the date the owner ceases to reside on or make productive use of the lands”.

[11] Where the public authority and the landowner do not agree on the compensation for an expropriation, the LPAT has authority to determine the amount of compensation.[^1]

Provincial Policy Statements

[12] In this case, there are two relevant Provincial Policy Statements under the Planning Act.

[13] A new Provincial Policy Statementcame into effect on May 22, 1996 and was amended in 1997 (the “1997 PPS”). At that time, section 3(1) of the Planning Act provided that planning authorities and other public bodies were to “have regard” to the PPS “in exercising any authority that affects a planning matter”. The 1997 PPS permitted development in an Area of Natural and Scientific Interest (“ANSI”) if it could be demonstrated that there would be “no negative impacts on the natural features”. The 1997 PPS also prohibited development in significant wetlands and in “significant portions of the habitat of endangered and threatened species”.

[14] In 2005, the province issued a new Provincial Policy Statement (the “2005 PPS”) following amendments to the Planning Act that mandated that decisions “be consistent” with Provincial Policy Statements. The 2005 PPS absolutely prohibited development in a wider range of natural heritage areas, and continued to prohibit development in an ANSI unless it could be shown that there would be “no negative impacts on the natural features”. Like the 1997 PPS, the 2005 PPS prohibited development in significant habitat of endangered species and threatened species and in certain wetlands.

Background

Parties and the lands at issue

[15] The respondents, Paciorka Leasehold Limited, Bruce Paciorka, Gordon Paciorka and Elizabeth Frey, are the owners of the lands at issue.

[16] The lands are located in the Malden Planning Area, which is in the southwest section of the City of Windsor. The Malden Planning Area includes some environmentally sensitive areas, including an area known as the Spring Garden Complex.

[17] In the 1910s and 1920s, the Malden Planning Area was surveyed and subdivided into approximately 6,500 lots. The lots remained undeveloped for a long period of time. In 1978, the City enacted Official Plan Amendment 33 (“OPA 33”), which designated the lands as residential for the purpose of city planning. Starting in the 1970s, a number of subdivisions were built in the Malden Planning Area.

[18] Between 1988 and 1997, the respondents bought 355 lots in the Malden Planning Area with the aim of developing them for residential purposes.

Environmental designations in the Malden Planning Area

[19] Starting in the early 1980s, the City and the Province gave environmentally significant designations to the Spring Garden Complex.

[20] In 1983, the Essex Region Conservation Authority designated 115 acres in the Spring Garden Complex as an Environmentally Sensitive Area. In 1984, the Ontario Ministry of Natural Resources designated 248 acres in the Spring Garden Complex as an ANSI. The Ministry of Natural Resources expanded the ANSI in 1996.

[21] In 1996 and 1997, reports commissioned by the City recommended that the 420-acre Spring Garden Complex be restricted to conservation, wildlife and habitat management, and public space. In 2001, the City adopted this recommendation. This formed the basis of Official Plan Amendment 5 (“OPA 5”), which re-designated the Spring Garden Complex as natural heritage land and prohibited any development within that area.

[22] A number of landowners, including the respondents, appealed OPA 5 to the OMB. In 2002, the OMB approved OPA 5, but required the City to acquire some of the re-designated lands via expropriation.

Prior proceedings

[23] The City expropriated 187 of the lots owned by the respondents located in the Spring Garden Complex in three phases in 2004, 2005 and 2008. The respondents continue to own 168 lots within the Malden Planning Area.

[24] The respondents sought compensation for the expropriated lots and for the impact of the expropriation on their remaining lots. The City and the respondents were not able to agree on compensation. The matter went to the OMB.

[25] The OMB held a three-week hearing in the spring of 2009 to determine the compensation issue. The OMB found that the “expropriation scheme” began with the designation of the lands as environmentally significant in 1983, and included the subsequent designations and the 1997 PPS and 2005 PPS. The OMB awarded the respondents $3,771,384 for the market value of the expropriated lots and $767,000 in compensation for injurious affection for the remaining lots.

[26] The City appealed the OMB’s decision to the Divisional Court. One of the arguments made by the City in the Divisional Court was that the OMB improperly “screened out” the natural features of the lands and the 1997 PPS and 2005 PPS as being part of the expropriation scheme. In a decision release in 2011, reported at 2011 ONSC 2876, the Divisional Court dismissed the appeal, with dissenting reasons by Sachs J.

[27] The City appealed the Divisional Court’s decision to the Court of Appeal. The Court of Appeal allowed the appeal. The Court of Appeal agreed with the City that the OMB’s decision was unreasonable because it improperly considered the 1997 and 2005 PPS to form part of the expropriation scheme. At para. 14, the Court held that:

We are satisfied that the appeal must be allowed, substantially for the dissenting reasons of Sachs J. As we will explain below, the Board either ignored the PPS entirely in determining the market value of the expropriated lands or concluded that the PPS was immaterial to valuation, because it was part of the expropriation scheme or because it had no effect on the value of the lands. All three possible interpretations of the Board's decision demonstrate that the Board did not give reasonable consideration to the impact of the PPS on the market value of the expropriated lands. That failure renders the Board's ultimate determination of market value unreasonable. We also agree with Sachs J. that the Board failed in its assessment of injurious affection damages to properly limit those damages to any diminution in value of the lands caused by the City's acquisition of the respondents' other lands.

[28] The Court of Appeal went on to adopt Sachs J.’s reasoning regarding the impact of the PPS on the value of the lands:

. . . [W]ith or without the expropriation, the claimants would have had to deal with the fact that their land contained natural features that were the subject of a PPS that limited development on land with those features. Any properly advised purchaser would know of these limitations and would have taken them into account in assessing the price that they would have paid for the land. These were the market realities that faced the claimants absent the expropriation. However, by virtue of the award in question, these realities were disregarded and the claimants were able to receive compensation for their land as if the realities never existed. This is to be contrasted with other people in the province with land that contains natural heritage features who have had to develop their land taking into account the requirements of the PPS. This is an unjustifiable and therefore, unreasonable, result.

[29] The Court of Appeal also found that the OMB’s assessment of damages for injurious affection was tainted by its view that the PPS were part of the expropriation scheme.

[30] The Court of Appeal concluded by remitting the matter back for a new hearing before a differently constituted panel of the OMB.

LPAT decision under appeal

[31] By the time the matter was heard anew, it went before the LPAT. The hearing proceeded before Vice-Chair Richard G.M. Makuch. The hearing took place in November and December 2017, with closing submissions over two days in February 2018. The parties called a total of fifteen witnesses.

[32] The respondents’ position at the hearing was that neither the PPS nor the natural features of the land would have constituted a significant bar to development based on what was known at the time of the expropriations. The respondents sought damages of $2,335,000 for the market value of the expropriated lands, $308,000 for injurious affection to the remaining lands and $175,500 for disturbance damages, for a total of $2,818,000.

[33] The City argued that the PPS and the natural features of the lands constituted a significant barrier to development at the time of the expropriation. The City’s position was that the market value of the expropriated lands was $520,000 and that the respondents were not entitled to any compensation for injurious affection.

[34] The LPAT released its decision on February 7, 2020. The LPAT generally agreed with the respondents’ arguments and positions.

[35] With respect to the effects of the PPS, the LPAT concluded that the City’s planning processes did not materially change with the introduction of the 1997 PPS, and that “[t]he actions by the City to expressly preclude development within the [Spring Garden Complex] after May 1996 was the City’s sole decision alone and made in its absolute discretion”. The LPAT did not agree that the PPS precluded any development on the expropriated lands and that development would likely not have been allowed under the tests applicable to ANSI lands in the 1997 and 2005 PPS. On this point, the LPAT accepted the respondents’ position that the phrase “no negative impact” in the PPS had been interpreted to mean “no complete loss of the natural feature” at the relevant time to determine whether development was prohibited in ANSI lands.

[36] Having found that the PPS did not pose an absolute bar to development on the expropriated lands, the LPAT moved on to consider the scope of the City’s expropriation scheme, concluding that “the acquisition scheme adopted by the City had an impact on [the] value of the subject lands by taking away the ability of the respondents’ to make [an] application to develop their lands for residential use.” The LPAT accepted the Claimants’ evidence that the highest and best use of the expropriated lands, but for the expropriation, would have been for residential development. The LPAT also accepted the respondents’ evidence as to the value of the expropriated lands. The LPAT accepted the comparable properties relied on by the respondents’ expert and accepted his evidence on the value of the properties.

[37] The LPAT also allowed the claim for injurious affection damages. In particular, the LPAT found that the expropriated lands and remaining lands constituted a single holding, and that the expropriations reduced the respondents’ flexibility in terms of “development options”.

[38] The LPAT also awarded the respondents disturbance damages for interest on loans necessary to finance their claims for compensation, as well as to compensate for “executive time” spent pursuing the claims.

[39] Finally, the LPAT held that statutory interest of 6% should start to run from August 11, 1997, which was the date when the City received the second report that recommended that the Spring Garden Complex be designated as a conservation area.

[40] The LPAT ordered the City to pay the respondents $2,335,000 for the market value of the lands, $308,000 for injurious affection and $175,509.79 for disturbance damages, for a total of $2,818,509.79 in compensation. With statutory interest of 6% starting on August 11, 1997, the total amount owing to the respondents exceeded $6.2 million on the date of the decision.

Standard of review

[41] Section 31(1) of the Expropriations Act provides that an appeal lies from the LPAT to the Divisional Court on questions of law or fact or both.

[42] In accordance with Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, given that there is a statutory right of appeal from the LPAT, the appellate standards of review set out in Housen v. Nikolaisen, 2002 SCC 33, apply.

[43] Accordingly, the Court is to apply the correctness standard of review to questions of law, including questions of law that can be extricated from questions of mixed fact and law. Questions of fact and questions of mixed fact and law from which there are no extricable questions of law are reviewable on the standard of palpable and overriding error

Analysis

[44] The City challenges the LPAT’s order regarding the market value of the properties, the compensation for injurious affection and the start date of August 11, 1997, for the 6% statutory interest. The City does not challenge the LPAT’s award of disturbance damages.

[45] The arguments advanced by the City in support of its appeal are as follows:

a. The LPAT demonstrated a lack of independence by improperly copying a significant portion of the respondents’ written submissions into its decision;

b. Contrary to the directions of the Court of Appeal, the LPAT again erred by failing to consider the impact of the 1997 and 2005 PPS on the value of the properties;

c. The LPAT erred in its assessment of the market value of the lands by failing to take its evidence into consideration and by using as a comparison properties that were not subject to the PPS;

d. The LPAT erred in awarding damages for injurious affection; and

e. The LPAT failed to consider the effects of the PPS in awarding interest starting in 1997.

[46] As set out below, I find no errors in the LPAT’s decision and find that there was no breach of natural justice. For the most part, the City takes issues with the LPAT’s findings of fact. The LPAT’s findings were supported by the evidence, and it is not the role of this Court to reweigh or reassess the evidence.

Issue 1: There was no breach of the rules of natural justice

[47] The City argues that the LPAT failed to adjudicate the issues impartially. In support of this argument, the City argues that the LPAT copied significant portions of the respondents’ written submissions into the “Findings” portions of the decision. The City argues that this led the LPAT to ignore key evidence. The City suggests that its position that the LPAT failed to assess the evidence and issues independently is bolstered by the lengthy period of time between the end of the hearing and the release of the decision.

[48] The issue of whether the LPAT ignored key evidence is more properly analyzed when dealing with the City’s arguments on the merits of the decision. This section of the decision therefore addresses the issue of whether the LPAT’s copying of the respondents’ submissions amounts to a breach of the rules of natural justice.

[49] In Cojocaru v. British Columbia Women’s Hospital and Health Centre, 2013 SCC 30, the Supreme Court of Canada addressed the issue of “judicial copying”. The Court held that judicial copying raises issues of natural justice because it goes to the issue of whether the decision maker decided the matter independently.

[50] In Cojocaru, at para. 22, the Court emphasized that there is a presumption of judicial impartiality and that the onus is on the party challenging the decision to rebut the presumption:

There is a presumption of judicial integrity and impartiality. It is a high presumption, not easily displaced. The onus is on the person challenging the judgment to rebut the presumption with cogent evidence showing that a reasonable person apprised of all the relevant circumstances would conclude that the judge failed to come to grips with the issues and decide them impartially and independently.

[51] In Cojocaru, at paras. 35-36, the Court stated that “extensive” judicial copying is to be discouraged but that, on its own, it is not evidence of a lack of independence. The copying must be “of such a character that a reasonable person apprised of the circumstances would conclude that the judge did not put her mind to the evidence and the issues and did not render an impartial, independent decision”. The Court also held that, while it is expected that adjudicators will make their decisions independently, it is not improper for some copying from the parties’ submissions to take place. The issue is whether the reasoning and assessment of the evidence occurred independently.

[52] In this case, as a schedule to its factum, the City appended a marked-up copy of the “Findings” portions of the LPAT’s decision, showing the parts that were copied and the parts that were original. The City argues that this schedule demonstrates that 70% of the “Findings” portions of the decision were copied from the respondents’ submissions.

[53] While it is evident that the LPAT made significant use of the respondents’ written submissions, the “copying” is not sufficient to lead to the conclusion that LPAT did not arrive at the conclusions independently.

[54] First, the City’s argument focuses on the “Findings” sections of the decision. The decision as a whole is 309 paragraphs long. The “Findings” sections only comprise 72 paragraphs of the decision. After reviewing the background to the issues between the parties and listing each of the parties’ witnesses, the LPAT addressed each issue separately. For each issue, the decision sets out a lengthy description of both sides’ positions on the issue. The City’s argument that the LPAT improperly copied the respondents’ submissions into the “Findings” sections disregards this detailed review of the parties’ positions on each issue, including the City’s positions. While the LPAT did not refer to every argument or every piece of evidence advanced by the City in its “Findings”, the LPAT’s review of the City’s position on each issue was nevertheless comprehensive.

[55] Second, contrary to the City’s submissions, the “Findings” sections are not conclusory. In support of its argument that the LPAT did not decide the issues independently, the City argues that the LPAT did not weigh the competing evidence, but rather simply accepted the respondents’ evidence and arguments. On the contrary, the “Findings” sections contain a rationale for accepting the respondents’ evidence and arguments over the City’s evidence and arguments. The City may not agree with these findings, and the findings may be consistent with the respondents’ position, but the LPAT does provide a rationale in each case for preferring the evidence of the respondents’ witnesses and for the conclusions it reached.

[56] Third, while it is evident that the LPAT used the respondents’ submissions as a form of “template” for some of its “Findings” sections and copied parts of the respondents’ submissions into those sections, there is generally no copying of full paragraphs. In addition, the concluding paragraphs of the “Findings” section are generally original and the “Findings” section dealing with the interest rate issue is completely original and in fact did not accept the respondents’ primary position.

[57] There is no doubt that it would have been preferable for the LPAT to avoid copying so extensively from the respondents’ submissions, but I do not find that the City has met the high bar of demonstrating that the LPAT’s decision was not made independently.

[58] As a final comment, I would suggest that, given the high bar for demonstrating a lack of independence, including in the case of alleged “judicial copying”, the City’s approach in this case was misguided. I would discourage parties from going through a decision word by word for the purpose of assessing the percentage of a decision that has been copied from a party’s submissions. There may be cases where an adjudicator has copied a party’s submissions word for word, holus bolus, in a way that makes it evident that the decision maker did not exercise any independence in reviewing the evidence and coming to a conclusion on the law and the facts. But this was not the case here on the face of the decision. In cases such as this one, where the City essentially argues that the LPAT ignored some of its key evidence or arguments, the focus of the inquiry is best placed on the merits of the decision rather than a parsing of the words and sentences used in the decision for the purpose of comparing them with the words and sentences used in an opposing party’s submissions.

Issue 2: The LPAT did not err in its consideration of the PPS and natural features

[59] In accordance with the directions of the Court of Appeal, in assessing the value of the properties and “screening out the scheme”, the LPAT was required to disregard the 1997 and 2005 PPS as part of the scheme. In other words, any reduction of the market value due to the PPS could not be attributed to losses in value due to the City’s expropriation of the lots.

[60] The City argues that the LPAT failed to follow the Court of Appeal’s directions. The City argues that the LPAT’s error is reflected in the relatively small difference between the original award made by the OMB and the award made by the LPAT, which the City characterizes as a windfall. The City also asserts that the LPAT erred in its interpretation of the 1997 and 2005 PPS and in its findings regarding the presence of endangered species, arguing that the LPAT should have found that the respondents could not have developed the expropriated lots for residential purposes.

[61] The City’s argument that the respondents received a windfall is a red herring. The issue is not whether the amount awarded by the LPAT is the same or similar to the amount awarded by the OMB in the previous decision, but rather whether the LPAT followed the Court of Appeal’s directive to have regard to the impact of the PPS in deciding the market value of the properties.

[62] With respect to the City’s argument that the LPAT erred in its consideration of the PPS and the natural features of the properties, I see no errors. Unlike the OMB proceedings, the LPAT did consider the impact of the PPS and the natural features of the properties. Its conclusions were based on findings of fact or findings of mixed fact and law. The LPAT explained why it preferred the respondents’ evidence over the City’s evidence. I see no palpable and overriding error.

[63] Before reviewing the LPAT’s analysis of the impact of the PPS and natural features, it is worth noting that, at the outset of the decision, the LPAT correctly explained the Court of Appeal’s direction as follows:

In remitting the matter to this Tribunal for a re-hearing, the Court of Appeal directed the parties to focus the inquiry on the impact of the 1996 and 2005 Provincial Policy Statements (“1996 PPS” and “2005 PPS”), given that the expropriated lands were within an area that had been identified as an Environmentally Significant Area (“ESA”) by the Essex Region Conservation Authority (“ERCA”) and an Area of Natural and Scientific Interest (“ANSI”) by the Ministry of Natural Resources and Forestry (“MNRF”).

The Court of Appeal opined that because the Provincial Policy Statement (“PPS”) was not implemented with a view to the development for which the land was expropriated, it cannot be considered a part of the “scheme” pursuant to clause 14(4)(b) of the Act and therefore is not to be disregarded for the purpose of determining the market value of the Claimants [sic] land. Even without the scheme, those lands would still be subject to the PPS and the Tribunal is required to deal with what effect that has on the market value of those lands.

[64] Having correctly stated that the expropriation scheme does not include the PPS, the LPAT went on to describe what was to be screened out as part of the expropriation scheme:

The independent actions taken by the City at its own discretion with a view to the eventual acquisition of the Claimants’ lands and the impact of those actions on the market value of the lands acquired must be screened out. The Tribunal’s responsibility in this case is to assess what impact, if any, the requirements of the PPS would have on the market value of the Claimants’ lands if the impacts of the scheme are screened out. Carrying out that responsibility should result in a determination by the Tribunal of fair compensation pursuant to the Act and would place the owner in as close a position as possible to that in which they would have been without the expropriations.

[65] The LPAT went on to review the relative positions of the parties. With respect to the respondents, the LPAT described their position as being that it was the City’s passage of OPA 5 that prevented development. In contrast, the City’s position was that the designation of the lands as ANSI and the natural features of the lands would have prevented development regardless of OPA 5. Given these differing positions, the LPAT went on to consider whether development would have been precluded by the PPS’s “no negative impacts” requirement on ANSI designated lands and by the presence of endangered species and their habitat on the lands. The LPAT’s analysis of both these issues was based on findings of fact, including weighing the competing evidence of the parties’ experts.

No error in finding that the PPS’s “No negative impact” requirement did not preclude development

[66] As reviewed above, in concluding that the PPS would not have prevented the respondents from developing the expropriated properties for residential purposes, the LPAT found that the “no negative impact test” in the PPS was interpreted at the time to refer to the “complete loss” of a natural feature. In reaching this conclusion, the LPAT had regard to the wording of the PPS and to the evidence of how it was interpreted and applied at the time.

[67] At the outset of the section dealing with the application of the PPS, the LPAT described its task as follows:

The PPS requires that planning authorities must have regard to it or, after 2005, be consistent with, including ensuring that any development within an ANSI had “no negative impact” on natural features or their ecological function. The key questions for the purposes of this hearing are whether the presence of the ANSI represents a restriction or a limitation on the developability of the subject properties, and whether it had an independent impact on market value, separate and apart from the City’s scheme. The evidence before the Tribunal includes an extensive analysis of the PPS.

[68] The LPAT went on to review the positions and evidence of the parties on the meaning of the “no negative impact” test in the context of the respondents’ lands.

[69] The LPAT stated that the key provision of the PPS is section 2.3.1(b) that provides that development may occur in an ANSI where “it has been demonstrated that there will be no negative impacts on the natural features or the ecological functions for which the area is identified”.

[70] “Negative impacts” are defined in the PPS as:

“Negative impacts” means:

(a) in regard to fish habitat, the harmful alteration, disruption or destruction of fish habitat, except where it has been authorized under the Fisheries Act, using the guiding principle of no net loss of productive capacity.

(b) in regard to other natural heritage features and areas, the loss of the natural features or ecological functions for which an area is identified. (Emphasis in original.)

[71] The LPAT stated that the “key aspect” of the definition is the phrase “the loss of the natural features or ecological functions for which an area is identified”.

[72] The LPAT reviewed the parties’ evidence on how this phrase would have been interpreted at the relevant time.

[73] The LPAT accepted the respondents’ evidence on the interpretation of the “no negative impacts” test. The respondents’ primary witness on the issue was Dr. Coleman. During his career as an environmental planner, Dr. Coleman worked extensively with the 1997 and 2005 PPS. In that capacity, his position was consistently that “no negative impact” does not mean “no impact”. Rather, having regard to the definition of “negative impact” in the PPS, Dr. Coleman’s view was that the correct interpretation is that “you could cause an impact as long as the feature or function was not lost”. Dr. Coleman based his interpretation of “no negative impacts” on his many years of providing advice to developers and municipalities. He also relied on the OMB decision in St. John’s Road Development v. Aurora (Town), 2001 CarswellOnt 7113.

[74] Dr. Coleman also provided evidence that, if the respondents had sought the necessary approvals in this case, they would have received them relatively easily given that their lots only comprised a small portion of the Spring Garden Complex and an even smaller portion of the entire ANSI.

[75] For its part, the City relied on other OMB decisions where the “complete loss” test was rejected, and also argued that it was not reasonable to use a percentage-based approach to the whole ANSI to determine whether the “no negative impacts” test is met.

[76] The LPAT accepted Dr. Coleman’s evidence on the issue of how the “no negative impact” requirement would have been applied at the time and how that application would have impacted residential developments proposed by the respondents. In reaching this conclusion, the LPAT explained why it preferred the respondents’ evidence over the City’s evidence, including a finding that one of the City’s experts agreed with Dr. Coleman’s evidence on how “no negative impacts” would have been interpreted at the relevant time:

The Tribunal prefers the opinion evidence proffered by Dr. Coleman and Mr. Lehman on this issue over that of Ms. Mainguy and Mr. McDonald for the reasons that follow.

Ms. Mainguy admitted in cross-examination that she was not qualified to undertake any of the balancing exercise or interpretation required under the PPS. Instead, she stated that her role was to describe what was on the land, the significance of the features and the potential impacts. Her interpretation of the meaning of the “no negative impact” test was quite different from Dr. Coleman’s.

Mr. McDonald deferred to Ms. Mainguy on the question of whether there is a negative impact or not. His evidence suggested that it was up to an ecologist to determine and also contradicted Ms. Mainguy’s understanding of the no negative impact test, agreeing with counsel for the Claimants under cross-examination that “no impact” is not the correct standard.

Mr. McDonald agreed that “loss” with respect to a feature would mean the loss of the feature and that loss with respect to the ecological functions meant those that were initially identified had been lost. He agreed that loss means “you don’t have it any more”, which is very similar to a standard of “complete loss” as described in the St. John’s Road Development decision referred to above.

[77] The LPAT’s finding that “no negative impact” was interpreted as the “complete loss” of a feature at the relevant time led to the finding that the PPS would not preclude all development in the Spring Garden Complex, but rather that it imposed limitations that could be addressed with relevant studies:

The actions by the City to expressly preclude development within the [Spring Garden Complex] after May 1996 was the City’s sole decision and made in its absolute discretion. The Tribunal does not agree that the PPS imposed a prohibition on development within the [Spring Garden Complex] but rather imposed certain limitations, which could be addressed with relevant studies/reports in association with development applications.

[78] The City argues that the LPAT misinterpreted the “no negative impact” requirement in the PPS. However, the issue before the LPAT was not how it should interpret the “no negative impact” test, but rather how it would have been interpreted at the relevant time. In reaching the conclusion that the test meant a “complete loss” of the feature, the LPAT had regard to the expert evidence of both sides and a relevant decision at the time. These were findings of fact to which the palpable and overriding error test applies. The City has not identified any such errors.

No error in finding that endangered species would not have precluded development

[79] In its analysis, the LPAT accepted that, if there was evidence of endangered species in the area at issue during the relevant time period, no development would have been allowed. However, the LPAT made a factual finding that there was no evidence of endangered species at the time. The City argues that, in making this finding, the LPAT disregarded the evidence of its expert, Ms. Mainguy. However, a review of the decision demonstrates that the LPAT did not disregard her evidence. Rather, the LPAT discounted the significance of her evidence and provided an explanation for doing so. These are findings of fact and the City has not identified any palpable and overriding error.

[80] The City’s evidence regarding the presence of endangered species on the properties came primarily from Ms. Mainguy. Her evidence was that there were threatened species on the site and that the PPS would have prevented any development on the lands.

[81] The LPAT rejected Ms. Mainguy’s evidence, and provided several reasons for doing so, including the following:

a. Ms. Mainguy’s review of information about the endangered species on the lands did not focus on the expropriation date but rather primarily on the period between 2011 and 2016.

b. Substantial changes occurred in and around the Spring Garden Area as of 2004 due to the Detroit River International Crossing project, which included the relocations of snakes between 2012 and 2015, and the construction of a snake fence.

c. The City’s own appraiser did not rely on Ms. Mainguy’s evidence because he “agreed that relying on a biological study based on information collected after the dates of expropriation would not be confirmatory of pre-expropriation conditions for the purposes of determining value”.

d. There was no evidence that the Ministry of Natural Resources identified any endangered species on the properties at the relevant time.

[82] The City argues that the LPAT disregarded Ms. Mainguy’s evidence. However, as reviewed above, the LPAT did not disregard her evidence. Rather, the LPAT analyzed her evidence and explained why it was not relevant to the issue of whether there were endangered species present on the property at the relevant time.

[83] The City argues that the LPAT also disregarded evidence it brought forward, other than Ms. Mainguy’s evidence, regarding the presence of endangered species on the properties on the valuation dates. Specifically, the City refers to the evidence of a field biologist, Paul Pratt, who the City says gave evidence that he personally tracked and observed the Eastern Foxsnake in the area around the time of the valuation dates.

[84] The LPAT did not disregard Mr. Pratt’s evidence. It was referred to in the summary of the City’s evidence on this issue. However, the LPAT did not refer to Mr. Pratt’s evidence in its findings on this issue. It is trite law that an adjudicator is not required to address all evidence and explain why it was accepted or rejected. As pointed out by the respondents, Mr. Pratt’s evidence was not central to the City’s position that the Eastern Foxsnake was present on the properties on the valuation date nor does it support such a finding. Mr. Pratt admitted that the evidence was developed over lunch time on the day he testified based on a spreadsheet that had not been produced to the respondents. Mr. Pratt’s evidence at the hearing, based on the spreadsheet, was that Eastern Foxsnakes had been observed in the vicinity of the properties in 2004, 2005 and 2008. Even if the LPAT had specifically referred to this evidence in its analysis, it is hard to see how it would have affected the results. There are evident issues regarding the reliability of the evidence and it was not an error for the LPAT to find that there was no reliable evidence of Eastern Foxsnakes being present on the properties at the relevant time.

[85] Ultimately, the LPAT’s decision was based on its review and weighing of the available evidence. Unlike the OMB’s decision, the LPAT did not consider that the PPS were part of the expropriation scheme. Rather, the LPAT assessed whether the PPS would have prevented all development on the properties based on how the PPS would have been interpreted at the relevant time and the evidence available about endangered species and other natural features at the relevant time. I see no palpable and overriding error in the LPAT’s decision on this issue.

Issue 3 – The LPAT did not err in its valuation of the properties

[86] Following the LPAT’s determination that the PPS and natural features of the properties would not preclude development altogether, the LPAT went on to determine the market value of the properties.

[87] The City takes issue with several of the LPAT’s findings regarding valuation.

[88] The City argues that the LPAT erred in valuing the properties as though they were ready for residential development.

[89] However, it is evident from a review of the decision that the LPAT approached the valuation from the perspective that the properties had the potential for residential development, subject to environmental constraints. This is evident from the following paragraphs of the decision:

The Tribunal finds that the acquisition scheme adopted by the City had an impact on value of the subject lands by taking away the ability of the Claimants to make application to develop their lands for residential use. The Tribunal has already made a finding that the PPS would not have prohibited development on the subject lands but would have made it more difficult or challenging to do so, given the environmental constraints on the requirement for further studies to be provided in support of any development application.

The Claimants’ properties must be valued based on their residential designation in existence prior to the implementation of OPA 5. Absent the scheme, the highest and best use of those lands was for future residential development, subject to potential environmental constraints. [Emphasis added]

[90] The City also argues that the LPAT erred in accepting the respondents’ use of properties that were not affected by the PPS as comparable properties for the purpose of valuation. As part of this argument, the City takes the position that the LPAT should have accepted its experts’ evidence on appropriate comparators.

[91] The respondents’ valuation expert, David Atlin, relied on property sales in the nearby South Cameron and South Windsor areas as useful comparators for estimating the value of the expropriated lands. To account for the impact of the PPS on the expropriated lands, Mr. Atlin applied a 5% environmental risk discount to the lands expropriated in 2004 pursuant to the 1997 PPS, and discounts of 22.5% and 28.5% to the lands expropriated in 2005 and 2008, respectively, under the terms of the 2005 PPS. In accepting Mr. Atlin’s evidence, the LPAT rejected the City’s expert evidence that South Cameron was too different from the expropriated lands to serve as a useful comparator.

[92] The City had also argued that Mr. Atlin’s use of comparable sales in South Cameron and South Windsor, which were not subject to environmental restrictions in the PPS, was a roundabout way of screening out the effects of the PPS on the value of the Expropriated Properties. The LPAT agreed with the respondents that the areas were not so dissimilar as to render a comparison unreliable, and that the environmental risk discounts applied by Mr. Atlin were appropriate.

[93] While the LPAT explained why it accepted Mr. Atlin’s evidence, it also gave detailed reasons for rejecting the evidence of the City’s valuation expert, Ray Bower, including:

a. Mr. Bower relied on dated sales, in some cases as many as 10 years prior to the valuation date. The LPAT found that his “heavy reliance on dated sales undermines their reliability since significant time adjustments he uses are unlikely to capture current market conditions…”

b. The comparable sales Mr. Bower relied on were primarily located in the Malden Planning Area, which means that he did not account for the impact of the expropriation scheme on the value of those properties.

c. Mr. Bower relied on his own interpretation of the PPS, a matter over which he had no expertise.

d. Mr. Bower made numerous factual and other errors, identified during cross-examination.

[94] The LPAT also rejected the evidence of Ken Stroud, who was retained by the City to critique Mr. Atlin’s evidence. The LPAT provided detailed reasons for rejecting Mr. Stroud’s evidence, including a finding that Mr. Stroud himself refused to confirm that his evidence was objective and reasonable. In any event, the LPAT found that Mr. Stroud’s downward adjustment for the properties subject to the 2005 PPS was very similar to the respondents’ downward adjustment – 28.5% compared to 22.5%.

[95] Ultimately, the City’s disagreement with the LPAT’s findings on valuation is nothing more than an invitation to this Court to reweigh and re-evaluate the evidence. That is not the Court’s role on appeal. The LPAT explained its reasons for rejecting the City’s evidence and accepting the respondents’ evidence. The LPAT provided a clear rationale for preferring the respondents’ evidence over the City’s evidence. I see no palpable and overriding error.

Issue 4 – The LPAT did not err in awarding damages for injurious affection

[96] The LPAT awarded the damages claimed by the respondents for injurious affection in the amount of $308,000. In making this award, the LPAT accepted the respondents’ evidence that the expropriation reduced the value of the respondents’ remaining plots because it reduced the opportunity for assembling plots:

The Tribunal agrees with the Claimants’ contention that the remaining lots should be seen as a single holding because it has been the practice to trade/exchange lots and that taking away the flexibility that exists by reducing the holding almost in half, reduces the flexibility significantly. If the Claimants were developing a subdivision and needed 5% parkland dedication, they could have used the lots in the southeast or southwest, presumably as part of that dedication for example.

The Tribunal agrees with the appraisers who testified on behalf of the Claimants, who commented on the benefits of “plottage” or “assemblage” as described by Mr. Lehman. In an area with a land ownership such as the [Malden Planning Area], the more lands assembled in a continuous block allows for a more meaningful parcel of land for development purposes. It allows for a greater flexibility in terms of development options and, as Mr. Spencer, the civil engineer, described allows for servicing costs to be spread over a greater number of benefitting properties.

Furthermore, the Tribunal agrees that the loss of the benefits of plottage as a result of expropriation constitutes injurious affection that is compensable pursuant to the Act. The loss of development advantages associated with a larger holding, particularly a holding such as the Claimants’ which is one of the largest in a given area, by way of expropriation has had negative impact on the market value of the remainder lands.

[97] The City argues that in finding the value of the remaining plots would be negatively affected by inability to assemble a larger number of plots, the LPAT ignored the Court of Appeal’s direction to take the impact of the PPS into account when determining whether to award damages for injurious affection to the respondents. Specifically, the City argues that the LPAT’s reasoning ignores its evidence that no development would be allowed on the expropriated lands or that any development would be significantly constrained by the PPS and natural features of the properties. Given those circumstances, the loss of opportunity to assemble a larger number of plots would not in fact lead to a loss in value of the remaining lands.

[98] As reviewed above, I have found that the Board did not err in finding that the PPS would not prevent residential development altogether on the expropriated lands nor did it err in its approach on the limits and constraints on development. Therefore, the City’s argument with respect to injurious affection is based on a false premise. Having found that the PPS would not wholly limit development on the expropriated lands, it was not an error for the LPAT to accept the respondents’ evidence and award damages for injurious affection.

Issue 5 – The LPAT did not err in awarding interest starting on August 11, 1997

[99] As reviewed above, section 33(1) of the Expropriations Act provides that the owners of expropriated properties are entitled to 6% interest starting from the date on which the owner ceased being able to make productive use of the land. In this case, the LPAT found that interest should start running from August 11, 1997, on the basis that this was the date on which the properties ceased to be of productive use. The rationale for this date is that it is the date on which the City received a second report recommending that the Spring Garden Complex be re-designated from residential to natural heritage.

[100] The City argues that the LPAT made two errors in finding that interest should run from that date. First, the City argues that the LPAT failed to consider that the re-designation of the lands to natural heritage flowed from the PPS rather than from any actions taken by the City, and that the LPAT thereby failed to follow the Court of Appeal’s instructions to take account of the PPS in valuing the lands. Second, the City argues that the respondents were not making productive use of the property and therefore interest should only start running from the date it registered the expropriation plans.

[101] In my view, there is no merit to the first issue. The argument is essentially the same argument the City made with respect to the issue of whether the PPS prevented any development on the lands. Having made a finding that residential development would have been possible despite the PPS, the date on which it became evident that the City would likely designate the lands as natural heritage, and therefore that they would no longer be available for residential development, is a relevant date. The PPS may have played a role in the chain of events, but, based on the LPAT’s factual findings above that residential development may still be available, the natural heritage designation was not inevitable.

[102] There is also no merit to the second argument raised by the City. Given that the respondents intended to develop the lands at issue, as recognized by this Court in Erbsville Road Development Inc. v. Waterloo Region District School Board, 2015 ONSC 5216, at paras. 54-55, the appropriate date for interest to start to run was the date on which “the potential for expropriation prevented the use of the lands” or “it would not have been prudent” for the respondents to develop the lands. In this case, the LPAT made a factual finding that the potential for development ceased on August 11, 1997, the date on which the City received the second report recommending that the lands be re-designated as natural heritage. I see no palpable and overriding error in this factual finding.

[103] Accordingly, I find that the LPAT made no error in finding that interest on the amounts awarded for the fair market value of the expropriated lands and for the amounts awarded for injurious affection should start to run from August 11, 1997.

Conclusion

[104] For the reasons above, the appeal is dismissed.

[105] As agreed between the parties, the respondents are entitled to costs of the appeal in the amount of $169,082 all inclusive.

Favreau J.

I agree _______________________________

Pattillo J.

I agree _______________________________

Kristjanson J.

Released: March 31, 2021

CITATION: The Corporation of the City of Windsor v. Paciorka Leasehold Limited, 2021 ONSC 2189

DIVISIONAL COURT FILE NO.: 142/20

DATE: 20210331

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Pattillo, Kristjanson and Favreau JJ.

BETWEEN:

The Corporation of the City of Windsor

Appellant

– and –

Paciorka Leasehold Limited, Bruce Paciorka, Gordon Paciorka and Elizabeth Frey

Respondents

REASONS FOR JUDGMENT

FAVREAU J.

Released: March 31, 2021

[^1]: Prior to 2018, the Ontario Municipal Board (“OMB”) was responsible for determination compensation for expropriations.