0904 00672 61508 Alberta Ltd., Mary Dwernychuk v. William Dean Dwernychuk, 2011 ABQB 258

Court of Queen ’ s Bench of Alberta Citation: 61508 Alberta Ltd. v. Alberta (Transportation), 2011 ABQB 258 Date: 20110412 Docket: 0904 00672, 0904 00671 Registry: Grande Prairie Between: 0904 00672 61508 Alberta Ltd., Mary Dwernychuk and William Dean Dwernychuk Applicants - and - Her Majesty the Queen in Right of The Province of Alberta as Represented by the Minister of Transportation Respondent And Between: 0904 00671 Kenneth E. Edey and Jo Ann Edey Applicants - and - Her Majesty the Queen in Right of the Province of Alberta as Represented by the Minister of Transportation Respondent _______________________________________________________

Reasons for Judgment of the Honourable Mr. Justice R. J. Hall _______________________________________________________ [ 1 ] In these two matters the Provincial Government has expropriated strips of land within 3 quarter sections of property owned by the Dwernychuk Plaintiffs, and a further strip of land within 1 quarter

section of property owned by the Edey Plaintiffs. Agreements were entered into between the Plaintiffs and the Alberta Government pursuant to s. 30 of the Expropriation Act ; the Alberta Government paid $700 per acre to each of the Plaintiff groups but the Plaintiffs had leave to apply to the Alberta Land Compensation Board or the Court to have the value of the expropriated land determined and adjusted if necessary, such value to be determined as at an effective date of October 31, 2008. The sole issue being tried in the Dwernychuk action is the value of the expropriated land.

In the Edey action there is an additional issue as to whether further compensation should be paid to the Edeys, on the basis that they claim to have lost revenue from access rights they had granted in relation to producing a well on land they leased from the government. They allege that, after access issues arose between the oil company and the government, the oil company shut down the well. [ 2 ] These matters were heard consecutively, then argued together.

Accordingly these reasons apply with respect to both actions. [ 3 ] The Alberta government determined that it wished to realign Highway 727 and improve grades and crossings over Howard Creek and the Ksituan River. The alignment chosen would go through the Plaintiffs’ lands. [ 4 ] The Alberta Government expropriated strips of land from the Plaintiffs’ farm lands. The project was of considerable size. Mainly because of changes in grades, some 2.2 million cubic metres of overburden had to be permanently removed from the highway right of way.

Bidding contractors were told that the proper disposal of the overburden was their responsibility; that is, the contractor would have to move the overburden to a place of its choosing, and, of course, it would have to own or acquire the right to dispose the overburden upon the location selected. [ 5 ] Sureway Construction Management Ltd. determined that it would bid for the job. It determined that the best practice for it to follow was to purchase lands adjacent to the project, upon which it planned to spread the overburden and then replace the topsoil to reclaim those lands to their previous use as farm lands.

Many prospective contractors including Sureway, approached the Plaintiffs. Sureway entered into agreements to purchase the remainder of the Plaintiffs’ affected quarter sections at $2,500 per acre, such agreements being contingent upon the project contract being awarded to Sureway.

The project was so awarded, and Sureway completed the purchases, and used the land for the purposes described above. [ 6 ] The purchase contracts between Sureway and the Dwernychuk Plaintiffs provided an option to the Plaintiffs, to buy back the land once it had been reclaimed, at a price of $ 650.00 per acre, or alternatively at the market price applicable on November 30, 2010 less a discount of 10%. [ 7 ] Evidence was given by Mr. Brock Helm, who was the Land Manager for the Sureway Group of Companies in 2009. Mr.

Helm’s evidence is that, in making the bid for the project Sureway factored in the anticipated cost of purchase of the land less the anticipated resale price, passing that cost onto the Government of Alberta in its contract bid. After initial discussions with the Plaintiffs, Sureway had anticipated being able to purchase the land at $2,000 per acre, but in fact the eventual purchases were completed at $2,500. Mr.

Helm acknowledges that therefore, Sureway “ate” the extra $500 per acre, since it was not anticipated in Sureway’s bid. [ 8 ] After Sureway had approached the Dwernychuk Plaintiffs with a view to making these purchases, the Dwernychuks were approached by one Erickson who offered to pay $3,000 an acre for the same lands, without conditions; and if he did not complete the purchase he would forfeit a $10,000 deposit. The Dwernychuk Plaintiff’s accepted that offer. Erickson then approached Sureway, seeking to sell to Sureway at an even higher price.

Sureway, however, did not deal with Erickson; Erickson did not complete his purchase from the Dwernychuks; Erickson forfeited that deposit; and the agreements referred to above were entered into between the Dwernychuk

Plaintiffs and Sureway. [ 9 ] The Edey Plaintiffs were similarly approached by a number of contractors looking to purchase their quarter

section of land through which the highway would run. The Edey Plaintiffs eventually contracted with Sureway, to sell that property for $2,500 per acre, with an option to repurchase at $500 per acre once the land had been used for placement of the overburden and then restored/reclaimed by Sureway as farmland. [ 10 ] On May 15, 2007 the Dwernychuk Plaintiffs purchased a quarter

section of farmland nearby to their property from the Jarvis’, who were reportedly going through a divorce. The price per acre paid by Dwernychuks to the Jarvis’ approximated $650 per acre for the bare land. Expert Evidence [ 11 ] The Province called expert evidence from Mr. James Wall, whose expert qualifications as a land appraiser were admitted by Counsel for the Plaintiffs. [ 12 ] In respect to the Dwernychuk lands, Mr. Wall had prepared an appraisal of the expropriated land on SW 27-78-7 west of the 6 th meridian, dated July 2006.

He did not appraise the expropriated land on the other Dwernychuk quarter sections. Nor did he perform an appraisal of the expropriated lands effective on October 31, 2008, the date the s. 30 contracts identify as being the date at which value is to be determined. [ 13 ] In respect of the Edey lands, Mr. Wall prepared an appraisal of the expropriated parcel as at July 2006, using the same process that he followed for the Dwernychuk lands. [ 14 ] Mr. Wall gave evidence that he determined the highest and best use of the subject property to be agricultural lands.

He followed his understanding of the law of expropriation, which in these cases was to apply the Bonaventure Rule and the Kerr case, and determined the value of the quarter

section in which the expropriated land was located, on the basis that its highest and best use was agricultural. As he was able to find sales of comparable property in the general area, he determined to use the Direct Comparison Approach, analysing recent transactions in the marketplace, then adjusting them to fit the subject property. By this means he determined market value per acre for sales of a quarter

section or more of agricultural land in the area. He determined that, as at July 2006 the Dwernychuk quarter

section and hence the expropriated parcel in that quarter section, had a value of $700 per acre. Mr. Wall had not prepared an updated report regarding the Dwernychuk lands. He stated at trial however, that from July 2006 to 2008 he was of the opinion that the value of the Dwernychuk quarter section, and hence the expropriated parcel, had increased to be $800 per acre. [ 15 ] With respect to the Edey land, Mr. Wall determined a value per acre of the Edey quarter as being $600 per acre when he did his 2006 Appraisal. In May 2008 he performed an updated appraisal and adjusted the value of the Edey quarter

section to be $700 per acre, based upon new comparable sales which had occurred between the times of the two appraisals. [ 16 ] Mr. Wall was robustly cross examined on these opinions by Counsel for the Plaintiffs. It was established that Mr. Wall had not considered sales of any parcels similar in size to the expropriated parcels; that Mr. Wall had not used comparables such as properties subdivided for use as a site for a Country Residence; and that Mr. Wall had not performed an Income Approach assessment of the value of the Expropriated land. Mr.

Wall was criticized for following his understanding of the law, in applying what is known as the Bonaventure Rule , whereby he determined the highest and best use for the parent parcel, determined a market value for the parent parcel, then applied that market value on a pro rata basis to the expropriated property. [ 17 ] Mr. Wall conceded that, other than in an Expropriation setting, there would not likely be any “willing purchaser” of such narrow strips of lands; and that, in the Expropriation Process there was no “willing vendor”. Mr.

Wall also agreed that, in 2009 he had appraised a subdivided 14.74 acre parcel of bare land on the Dwernychuk quarter, S.W. 27-78-7- W6 as a “Country Residential” parcel at $3,300 per acre for the bare land. [ 18 ] Mr. Wall was criticized by Counsel for not applying or discussing in his report, the requirements of s. 42(2)(

c) of the

Expropriation Act; in particular for not evaluating the “value to the Owner”. [19] The Plaintiffs called no expert evidence in support of their claims. Position of the Parties Position of the Plaintiffs [20] The Plaintiffs maintain that their claim is “for the value of the land taken”. They urge the Court to place great emphasis onthe “Value to the Owner” in determining the appropriate compensation for the expropriated land. They challenge the practice followedby the expert Mr.

Wall in his appraisal, of following the approach to valuation set out by the Alberta Court of Appeal in The Queen v.Bonaventure Sales Ltd., (1980) 22 L.C.R. 164, and maintain that Mr. Wall has failed to consider, or properly consider section 42(2)(c)of the Expropriation Act, that is to determine the value to the owner of any elements of special economic advantage to the owner.

Theyargue that a value for the expropriated parcels has in fact been determined... the price which a willing seller and a willing buyer wouldstrike for the sale... by the sales by the Plaintiffs to Sureway, at $2,500 per acre. [21] They are further critical of Mr. Wall for not including in his appraisal, a consideration of the Income Approach to determiningvalue, that is to say, to determine the income the expropriated land would have produced.

However, the Plaintiffs have not provided anyof their own expert evidence as to value based upon the Income Approach, choosing instead to maintain that the value was set by thesales to Sureway, at $2,500 per acre, which, they say, makes expert opinion evidence unnecessary. [22] The Plaintiffs maintain that the fact that the Dwernychuks purchased the Jarvis land at $650 per acre, in 2007 is irrelevant tothis determination, on the basis that while it shows what the Dwernychuks were willing to pay for that land, it does not assist indetermining the price at which the Dwernychuks or the Edeys would have been willing to sell the expropriated parcels. [23] The Plaintiffs maintain that no buyer other than the expropriating authority would pay anything for such narrow strips of landas these, and therefore it is impossible to determine a price at which a willing buyer and willing seller would enter into such a transaction. [24] The Plaintiffs maintain that the decision of the Alberta Court of Appeal in Bonaventure, (supra) should not be considered tobe good law, arguing that subsequent cases have largely ignored it, and that it does not accord with the rationale applicable toexpropriation enunciated in Dell Holdings Ltd. v.

Toronto Area Transit Operating Authority, (1997) (SCC), 60 L.C.R.81 (S.C.C.). [25] The Edey Plaintiffs additionally claim that as a result of the expropriation of their lands and the building of the highway,Birchcliff Energy Ltd. lost access to the well site at NE 3-79-7-W6M. The Edey Plaintiffs maintain that Birchcliff could not negotiatesatisfactory alternate access to the site with the provincial government, and decided to shut down the well. The Edey Plaintiffs werereceiving $2,500 per year from Birchcliff for their consent to Birchcliff for access to the well site.

The Edey’s maintain they will losethese payments “for at least 10 years to come”. Position of the Province of Alberta [26] The Province references s.45 of the Expropriation Act, and argues that, but for the development of the highway, the landspurchased from the Plaintiffs by Sureway would not have been purchased by them, nor would they have fetched the amount of $2,500per acre, far in excess of what has been put forth as fair market value. The Province relies upon the wording of s.45 of the Act, and caselaw that discusses it.

Even if this particular circumstance is not specifically dealt with in the wording of s. 45 of the Act, the Provincemaintains that the same principle applies.

[27] As to the Plaintiff’s argument that valuation should not proceed on the basis of determining the highest and best use of theParent Parcel, but rather an evaluation of the strip of land expropriated, the Province relies upon the decision of the Alberta Court ofAppeal in Bonaventure (supra) and cases following it. [28] The Province argues that the evaluation performed by Mr.

James Wall should be accepted as having been properly performed,reasonable and accurate, and notes that the Plaintiffs have not provided any expert opinion evidence as to the value of the expropriatedlands. [29] With regard to the Edeys’ claim for compensation for lost revenue from the oil well being shut in, the Province argues thatBirchcliff had the right at any time to shut down operations and discontinue its payments to the Edeys; that the reason that Birchcliffdecided to shut down has not been proven to be the building of the highway; and that damages are speculative and unproven.

Findings and Reasons Issue # 1 - Valuation of the Expropriated Lands [30] The Supreme Court of Canada in Dell Holdings Ltd. v. Toronto Area Transit Operating Authority, supra, discussesexpropriation and the principles of

interpretation of expropriation legislation: (para. 20) The expropriation of property is one of the ultimate exercises of governmental authority. To take all or part of the person’sproperty constitutes a severe loss and a very significant interference with a citizen’s private property rights.

It follows that the power ofan expropriating authority should be strictly construed in favour of those whose rights have been affected. (para. 23) It follows that the Expropriation Act should be read in a broad and purposive manner in order to comply with the air of the Actto fully compensate a land owner whose property has been taken. [31] The facts in Dell are not comparable with those in this case; however the principle enunciated above is governing. In therecent case of Smith v.

Alliance Pipeline Ltd., 2011 SCC 7 , 2011 S.C.C. 7, Justice Fish referenced para. 23 of Dell, confirmingit to express the law in Canada. [32] The Expropriation Act, c. E-13, R.S.A. 2000 has not materially changed from the Expropriation Act 1974 (Alta.) c. 27, whichwas the Act under consideration by the Alberta Court of Appeal in Bonaventure (supra). The facts in Bonaventure bear great similarityto the facts in this case. Strips of land were expropriated from larger parcels.

At issue was whether the strips of land were to be valued bycomparison to similar sized sales of land, or whether the parent parcel was to be valued and the per acre value of the parent parcel beingthen applied to value the expropriated strips. Chief Justice McGillivary, writing for the Court stated, at pp 164 and 165 as follows: A strip of land was expropriated from the west boundary of two properties owned by the respondent. It was taken for road building.

Invaluing the strips the Land Compensation Board took the acreage involved in the two properties, 3.43 acres in one case and .30 acres inthe other, added them together and proceeded to value the resulting 3.73 acres as if they were a small holding that was being sold to awilling buyer by a willing seller. We are all of the opinion that under the provisions of the present Expropriation Act, 1974 (Alta.), c. 27, and on the facts of thisexpropriation that that treatment is not permissible. What was expropriated were two strips off the boundaries of the two parcels.

Theywere not, of course, willing buyers or willing sellers of those strips. It is not reasonable to convert those strips into a saleable area of landfor purposes of evaluation of that land per se. While the Board notes that the configuration is imposed by the Minister this does not meanthat the strips should be treated as something they are not. We are all of the opinion that the only method of arriving at the fair marketvalue was to take a fair market value of the whole of each parcel and then attribute the per acre value to the acreage taken.

The fact thatthe land is classified for light industrial use, and development is taking place, are factors to be weighed in valuing the acreage to get a peracre value which can be applied to the land taken. It does not enable the Board to convert the strips into saleable small parcels and thenput a value on to that parcel per se, as if it were something that could be sold as a small parcel. In the result, we are of the opinion thatthe Board proceeded on a wrong principle in two respects: (

a) in treating the land taken from two parcels as one; and (

b) in equating

strips taken with saleable acreage and treating it as saleable acreage to be valued by itself. As to the strip taken from the smaller parcel, it seems clear that the Board accepted the valuation placed on that parcel but reduced it byan arbitrary percentage when combining it with the strip taken from the larger parcel and arrived at $15,000 per acre for each of the total3.73 acres taken. As to the strip taken from the larger parcel, it is not clear to us from the Board's reasons as to how they arrived at the $75,000 per acre asa value of the acreage taken. We do not know whether they based it on Mr.

Jellis' value of $75,000 or whether, while not rejecting thevaluations of $40,000 and $42,000 per acre made by the other evaluators on a per acreage basis for the entire acreage, concluded that asonly 3.43 acres was being taken from that parcel those evaluators were wrong in applying the total area values to the strips. It is alsopointed out that the other evaluators did not have present to their minds certain factors that would undoubtedly increase the valuation peracre that they put on the entire large holding.

We, under the circumstances, direct that the matter go back to the Board to arrive at a valuation based on the fair market value of each ofthe two properties at the effective date of the expropriation and to attribute a per acre value arrived at to the land taken from each parcel. [33] The approach set out in Bonaventure has come to be known as the Bonaventure Rule for expropriation valuations. It is therule that Mr. Wall followed in performing his appraisal. [34] Nothing submitted to me by Plainitffs’ Counsel, in argument or authorities persuades me that Bonaventure does not continueto be good law in Alberta.

I do not consider that the Bonaventure Rule is in any way in conflict with the broad and purposive approachcalled for in Dell. [35] The Alberta Court of Appeal did distinguish Bonaventure in Kerr v. Minister of Transportation, (1981) 1981 ABCA 9, 22 L.C.R. 179, but only where the usages of the parcel from which land was being expropriated were not homogeneous. Thatcircumstance does not arise here. [36] In Patson Industries Ltd. v. City of Calgary (1983) 30 L.C.R. 190, the Alberta Court of Appeal stated at para. 19: “Undoubtedly, part of a tract of land is to be valued on the basis of the value of that

part if solid comparable sales are available. The key,however is that reliable comparable sales must be available; if not, the per acre approach is permissible.” [37] No mention was made of Bonaventure in that decision. In this case before me I note that no solid comparable sales in size orshape are in evidence; nor, according to Mr. Wall, were any available. While there is evidence of an appraised value of Dwernychuk’sCountry Residence parcel of 14.74 acres, it was a subdivided parcel prepared for use as a Country Residence and for those reasons it isnot a “solid comparable”. [38] In Cochen Pipe Lines Ltd. v.

Rattray, et al, (1980) 1980 ABCA 314 , 22 L.C.R. 198 the Alberta Court of Appealdiscusses its reasoning in Bonaventure and confirms that reasoning. [39] Cases cited by the Plaintiffs arising out of

interpretations of the Surface Rights Act, or the Railway Act dealt with legislationwhich is worded considerably differently from the Expropriation Act, and provide little assistance. [40] The Plaintiffs argue that the Alberta Court of Appeal in Moller, et al v. The Queen, (2004) 85 L.C.R. 81 ordered the LandCompensation Board to consider the sale of a potentially comparable parcel smaller than the parent parcel and closer to the size of theexpropriated parcel. From that decision, the Plaintiffs urge that the Alberta Court of Appeal has moved away from Bonaventure.

I do notread that decision in that way; rather I see the Court in that case requiring the Board to consider that sale before making its determination;

this might be seen as confirming Patson , ( supra ), requiring the Board to consider whether that sale is a “reliable, comparable sale.” I do not see it as abandoning Bonaventure . [ 41 ] In the result, and having particular regard for the homogeneous nature of the lands, and that the expropriation here is of strips of land, much as was the case in Bonaventure , I consider that the Bonaventure Rule is to be applied in order to determine fair market value. [ 42 ] I note that the Expropriation Act has not materially changed its wording over the years between the decision in Bonaventure and now.

I cannot but think that the Court of Appeal understood and applied a broad and purposive approach to directing full compensation in Bonaventure . [ 43 ] Mr. Wall has provided his opinion that, as at approximately May 2008 the value of the Dwernychuk quarter was $800.00 per acre; and the value of the Edey quarter was $700.00 per acre; each based upon his Direct Comparison appraisal approach.

While I do not have an appraisal as at October 1, 2008 on either property, and I have no appraisal of the other two quarters of the Dwernychuk lands, I am satisfied that, if one applies the Bonaventure Rule and the Direct Comparison Approach, these values as at May 2008 would also be appropriate values as at October 1, 2008. The Plaintiffs have offered no contrary evidence, other than the price at which they sold to Sureway, to which I shall return. [ 44 ] Mr.

Wall concedes that a different approach that he might have considered but did not is the Income Approach; under which the appraiser values the income stream from the appraised property and from that income stream he extrapolates a value. Mr. Wall was of the opinion that the income stream method is not employed by buyers and sellers of agricultural land and therefore did not seem appropriate to him. Counsel for the Plaintiffs was critical of the fact that no such appraisal was performed by Mr. Wall.

However, neither was such an Income Stream Appraisal performed for the Plaintiffs, nor did the Plaintiff offer any evidence as to income stream from the expropriated property. [ 45 ] As no income stream nor income stream appraisal has been presented to rebut Mr. Wall’s opinion, I accept the methodology utilized by Mr.

Wall and the conclusions as to value, set out above. [ 46 ] The Plaintiffs maintain that the whole appraisal process is a fiction, since in the expropriation scenario there is no willing seller, only a willing buyer; yet the appraiser purports to appraise based on the price at which a willing buyer and a willing seller would strike a bargain. [ 47 ] Indeed, the concept is notional. But to consider the price at which there would be a willing seller of expropriated strips of land would result in the expropriating authority being held to ransom.

The only means that can be employed, is the notional means developed and authorized by the Courts; in this case the Alberta Court of Appeal in Bonaventure where the Court noted, (p.164), “they were not of course, willing buyers and willing sellers of those strips.” That is to say, the Court recognized the argument urged upon me by Plaintiffs’ Counsel when reaching its decision. [ 48 ] The Plaintiffs maintain that the appraiser has failed to properly consider s. 42(2)(

c) of the Expropriation Act . S. 42(2) reads as follows: 42

(2) When land is expropriated, the compensation payable to the owner must be based on: (

a) the market value of the land, (

b) the damages attributable to disturbance, (

c) the value to the owner of any elements of special economic advantage to the owner arising out of or incidental to the owner’s occupation of the land to the extent that no other provision is made for its inclusion, and

(

d) damages for injurious affection. [49] No matters relating to 42(2)(

b) or (

d) are in issue in this case. Obviously 42(2)(

a) is in issue. The Plaintiffs maintain that s.42(2)(

c) needs to be considered when determining the value, to the owner, of the land expropriation. [50] Is there, in this case, “any element of special economic advantage to the owner” not otherwise compensated? None has beendemonstrated to me. Mr. Dwernychuk says he would have preferred not to be expropriated, nor to sell to Sureway. However hispreference, if accepted by the Court, would not amount to an element of special economic advantage.

Therefore the market value of theland expropriated is the appropriate measure in this case, pursuant to s. 42 of the Act. [51] The Plaintiff then argues that, using the “en bloc” or Bonaventure Rule approach, I should determine market value at$2,500.00 per acre, on the basis that it is the price at which a willing buyer (Sureway) agreed to purchase the parent parcels from willingsellers (the Plaintiffs). [52] The agreements with Sureway were entered into after the effective date of October 31, 2008.

I may take those sales intoconsideration even though they are subsequent to the valuation date, but I must take care in assigning weight: New Law of Expropriation, Coates & Waque, Carswell 1986, p. 15 - 55; The Law of Expropriation and Compensation in Canada (2nd) 1992 pp. 106 - 107. [53] The question that must be determined is whether theses sales to Sureway are representative of market value of the lands?Section 45 of the Expropriation Act provides , in part, as follows: 45 In determining the value of the land, no account may be taken of (

c) any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect ofwhich the expropriation is made or from any expropriation or imminent prospect of expropriation. [54] This

section was considered by the Alberta Court of Appeal in Thompson v. Alberta (Minister of Environment), 2007 ABCA411, at paras. 8 and 9: 8 Applying this principle [of statutory

interpretation], the object of the

section is to place the owner in the same economic position afterthe taking as he would have been had it not occurred. This is to ensure that neither the expropriating authority nor the owner receives awindfall, nor suffers an unfair loss. Interpreting the object that way would retain harmony with the overall context of the Act as well asserving legislative intent that s. 45 enacted the 'Pointe Gourde Rule' and its converse: Pointe Gourde Quarrying & Transport Co. v.Sub-Intendent of Crown Lands, [1947] A.C. 565 (Trinidad & Tobago P.C.) and Melwood Units Pty. v.

Commissioner of Main Roads (1978), [1979] A.C. 426 (Australia P.C.) at p. 434; E. Todd, The Law of Expropriation and Compensation in Canada, 2nd Ed., [Toronto:Carswell, 1992] at pp. 158 to 171; K.J. Boyd, Expropriation in Canada - a Practitioner's Guide, [Aurora: Canada Law Book, 1988] atpp. 27-28. 9 As for giving the wording its grammatical and ordinary sense consistent with the object, context and intent, each of the subsections ofs. 45, thus read, convey the idea that the expropriated land should not have its value changed by reason of new plans or developmentoccasioned by the fact of expropriation.

The parties agree that by virtue of s. 45 the value of the expropriated land is the highest and bestuse of the land as if the expropriation did not exist and thus had no effect on its value. The difference between the parties turns on theeffect of expropriation being disregarded in valuing the land. See also Runnymede Development Corp. v. Ontario (Minister of Housing) (1978) (ON SCDC), 14 L.C.R. 289;Schou v. Alberta (Environmental Protection) 2009 ABQB 51 at para. 125; Arychuk v. Calgary Power Ltd. (1978) 17 L.C.R. 200 atpara. 26.

[ 55 ] In this case the price at which the Plaintiffs were able to sell their property to Sureway was a direct result of the project for which lands were being expropriated. But for the development, the price obtained by the Plaintiffs would have been wholly unattainable. Sureway’s evidence is that it purchased the property at that price because of the economics of the highway development project. [ 56 ] If those sales were to be used for a Direct Comparison appraisal they would have to be drastically discounted to account for the motivation factor.

The great motivation to Sureway was the location of the lands directly proximate to the project, and the fact that the bidding process allowed Sureway to pass that cost on to the government of the Province in its contract price. See Rainbow Country Estates v.

Whistler (Resort Municipality ) 2010 BCSC 300 for a discussion of such motivational factor. [ 57 ] In the result I conclude that the sales of land by the Plaintiffs to Sureway are not permitted to be considered under s. 45 of the Act , because the sale price was the result of the particular nature of the Highway Project Development and contract terms; that in any event of s. 45, those sales are so influenced by the motivational factor discussed above as to be inappropriate comparisons; and that the value of the lands expropriated cannot be determined by reference to those sales. [ 58 ] I conclude that the expropriated Dwernychuk lands have a value, as at October 31, 2008, of $800 per acre and the expropriated Edey lands have a value, as at October 31, 2008, of $700 per acre.

That is the expert evidence before me. I am buttressed in this decision by the fact that the Dwernychuk Plaintiffs paid $650 per acre for their purchase of the Jarvis land in 2007; a figure close to, but lower than, the value determined by Mr. Wall for the subject parcels, and a far cry from the $2,500 per acre amount urged by the Plaintiffs. [ 59 ] I now turn to the Edeys’ claim for compensation for the loss of revenues from the Birchcliff well access payments.

The Court has no evidence from Birchcliff as to why it has decided to shut down the well; whether it was shut down because Birchcliff could no longer gain satisfactory access to it, or the cost of access was too great, or whether the well had become uneconomic, or any other reason. The agreement between Birchcliff and the Edeys was that Birchcliff would pay an annual fee to the Edeys for so long as Birchcliff wished to exercise access rights granted by the Edeys; there was no term certain, or commitment beyond year to year. Birchcliff apparently no longer wishes to exercise access rights.

The Edeys have failed to provide satisfactory evidence as to any causal connection between the expropriation and Birchcliff decision; any right to be paid for a term which has been abrogated by the expropriation; nor proper quantification of damages. The Edeys claim for compensation under this heading is dismissed. [ 60 ] Counsel may speak to me regarding costs and interest if agreement cannot be reached. Heard on the 22 nd day of March, 2011 to the 23 rd day of March, 2011. Dated at the City of Grande Prairie, Alberta this 12 th day of April, 2011. R. J. Hall J.C.Q.B.A.

Appearances: Darryl Carter, Q.C. for the Plaintiffs

Christopher D. Holmes for the Defendants