CITATION: Eric Levin Holdings Inc. v. Ministry of Transportation, 2023 ONSC 3284
COURT FILE NO.: DC-22-2732
DATE: 2023/06/07
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
R.S.J. ELLIES, SACHS AND M. GIBSON JJ.
BETWEEN:
Martin Z. Black, for the Appellant
Brendan Haynes and Bhavini Lekhi, for the Respondent
HEARD: By videoconference in Ottawa on May 30, 2023
ERIC LEVIN HOLDINGS INC. (FORMERLY SECEMB INVESTMENTS LTD.)
Appellant
– and –
MINISTRY OF TRANSPORTATION
Respondent
The Court
[1] The Appellant appeals from the decision of Member Taylor of the Ontario Land Tribunal (the “Tribunal”) dated July 4, 2022. The decision was made pursuant to s. 31 of the Expropriations Act, R.S.O. 1990, c. E.26, as amended (the “Act”). Prior to the hearing before the Tribunal the parties had agreed upon the market value of the Appellant’s property that was expropriated by the Respondent and on the appropriate compensation for business losses suffered by the Appellant as a result of the expropriation. Thus, the only issues to be determined by the Tribunal were in relation to interest to be paid on the market value – in particular the date from which interest should run and at what rate.
[2] In its decision the Tribunal dismissed the Appellant’s claim that interest should run from a date prior to the formal date of expropriation and the Appellant’s claim that interest should be paid at an increased rate of 12% rather than the rate of 6%.
[3] Section 33(1) of the Act provides as follows:
Subject to subsection 25(4), the owner of lands expropriated is entitled to be paid interest on the portion of the market value of the owner’s interest in the land …to which the owner is entitled outstanding from time to time, at the rate of 6 per cent a year calculated from the date the owner ceases to reside on or make productive use of the land.
[4] In the case at bar, determining the date from which interest should run involved deciding two issues: (1) what was the productive use of the land and (2) when did that productive use cease.
[5] The Tribunal determined that the productive use of the land was as a rental building and that, until the formal date of expropriation, the Appellant was continuing to use the land as a rental building.
[6] The Appellant submits that the Tribunal erred in failing to recognize that the land had two productive uses – a rental building and redevelopment – and that the redevelopment use ceased on the date that it first became clear that the Respondent was going to expropriate the land. It also argues that the Tribunal erred in finding that if the productive use of the land was as a rental building, that that productive use only ceased when the Respondent formally expropriated the land. By the time of formal expropriation, the subject property was 62% vacant, with tenants having left because the property was due to be expropriated.
[7] With respect to the first aspect of the Appellant’s argument, the Appellant submits that the Tribunal erred in law in failing to recognize that a property could have two productive uses. According to the Appellant, the caselaw is clear that a property can have more than one productive use. There is no merit to this argument. The Tribunal recognized the possibility that the property could have a productive use as a redevelopment property. However, it found, based on the evidence before it, that such a productive use was not made out.
[8] The question of whether the Appellant had established a second productive use as a redevelopment property was a question of fact and the Tribunal’s decision on this issue is subject to review on the standard of palpable and overriding error. The Tribunal heard Mr. Levin’s testimony and found that there was no evidence that the Appellant’s desires to expand the development of the property were never initiated. This is in sharp contrast to the decision that the Appellant relied on, Nova Scotia (Attorney General) v. S&D Smith Central Supplies Limited, 2019 NSCA 22, where the landowner had extensive corroborating evidence in addition to his own evidence about his future business development plans. Further, unlike the case at bar, the Court in S&D Smith found that the landowner had not only a vision to keep growing, but a practice of reclaiming existing land when it needed room to expand. The decision of the Tribunal in this case was available to it on the evidence before it and the Appellant has failed to demonstrate that the Tribunal made any palpable and overriding error in its assessment of that evidence.
[9] The decision as to when the Appellant's productive use of the property ceased is also a question of fact. The Appellant attempted to suggest that the Tribunal erred in law in conflating the issue of business losses with the issue of interest. It did so because the Tribunal made repeated references to the fact that the Appellant had received a settlement for its business losses. None of these references are sufficient to support the conclusion that the Tribunal was conflating two separate issues. Instead, the Tribunal’s finding that the Appellant made productive use of the property until the formal date of expropriation is supported by the record before it, including the fact that the last three tenants did not vacate the building until that date. Further, its finding is supported by a line of authorities that it considered and followed. Those authorities hold that “profit or degrees of profit are not the test in determining productive use…If rental is at a loss, that does not constitute cessation of productive use.” (Jasper v. Ottawa (City), 2008 CarswellOnt 4028 at para. 50 (O.M.B.)).
[10] There was thus no palpable or overriding error, and no legal error, with respect to the Tribunal's decision as to when productive use of the property ceased.
[11] Regarding the rate of interest to be paid, s. 33(4) of the Act provides:
Where the Tribunal is of the opinion that any delay in determining compensation is attributable in whole or in part to the expropriating authority, the Tribunal may order the expropriating authority to pay to the owner interest under subsection (1) at a rate exceeding 6 per cent but not exceeding 12 per cent a year.
[12] The Appellant argued before the Tribunal that the Respondent was responsible for delay in determining the compensation eventually agreed upon by the parties and sought interest at the rate of 12 percent. The Tribunal dismissed the Appellant's claim. It held that it would be unfair to permit the Appellant to seek interest at a rate higher than 6 percent because such a claim had never been pleaded.
[13] The Tribunal's decision in this regard was a discretionary one. Section 13(4) of the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6, provides that, unless a Tribunal's failure to exercise its discretion causes a substantial wrong that affects the final disposition of a proceeding, the failure to exercise the discretion is not a ground for setting aside a decision of the Tribunal on an appeal. The Tribunal's refusal to permit the Appellant to pursue interest at a rate greater than 6 percent in this case caused no substantial wrong. As the Tribunal correctly pointed out, the Appellant had specified in three places in its claim that it was seeking interest "at 6 percent" and failed to take any steps to amend the claim in the process leading up to the hearing.
[14] Notwithstanding the Tribunal's refusal to allow the Appellant to pursue interest at 12 percent, the Tribunal went on to consider whether the Respondent was responsible for any delay. It held that both parties were responsible for the delay, as each approached the issue from a different perspective. The Tribunal's decision in this respect was a factual one and is subject to the palpable and overriding error standard of review. The Appellant has failed to establish any error, let alone an error of this nature. There was no error in concluding that both parties were responsible for the delay given that the amount of compensation eventually agreed upon represented a compromise between the parties' positions.
[15] Finally, the Appellant makes a claim for compound interest. The Appellant relies on this court's jurisdiction under s. 31(3) of the Act to make any order on an appeal that the Tribunal has the power to make to raise this claim for the first time on the appeal. Because it was raised for the first time before this court, the court did not have the benefit of the Tribunal’s view on the matter, which might well have been helpful since the Tribunal is an expert tribunal. This is important since compound interest is not mentioned in the Act and there is no Ontario authority that such a claim can be advanced. Arguments that were not advanced in the original hearing are not normally considered by an appellate court. In our view, this principle should be applied with respect to the Appellant’s claim for compound interest.
[16] For these reasons the appeal is dismissed. As agreed by the parties, as the successful party, the Respondent is entitled to its costs of this appeal, fixed in the amount of $20,000, all inclusive.
Ellies R.S.J.
Sachs J.
M. Gibson J.
Released: June 7, 2023
CITATION: Eric Levin Holdings Inc. v. Ministry of Transportation, 2023 ONSC 3284
COURT FILE NO.: DC-22-2732
DATE: 2023/06/07
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
ONTARIO
R.S.J. ELLIES, SACHS AND M. GIBSON JJ.
BETWEEN:
ERIC LEVIN HOLDINGS INC. (FORMERLY SECEMB INVESTMENTS LTD.)
Appellant
– and –
MINISTRY OF TRANSPORTATION
Respondent
REASONS FOR JUDGMENT
The Court
Released: June 7, 2023