Sun Construction Company Limited Applicant And: Town of Conception Bay South Respondent, 2019 NLSC 102

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Sun Construction Company Limited v. Conception Bay South (Town) , 2019 NLSC 102 Date : May 15, 2019 Docket : 201801G1265 Between: Sun Construction Company Limited Applicant And: Town of Conception Bay South Respondent Before: Justice Deborah J. Paquette Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: December 12, 2018 Appearances: Daniel W. Bennett Appearing on behalf of the Applicant Amanda M. Buis Appearing on behalf of the Respondent Authorities Cited: CASES CONSIDERED: Lynch v. St. John’s (City) , 2016 NLCA 35 ; Attorney General v. De Keyser's Royal Hotel Ltd. , [1920] A.C. 508, [1920] All E.R. Rep. 80 (U.K. H.L.) ; Alberta (Minister of Public Works, Supply & Services) v. Nilsson , 2002 ABCA 283 ; Canadian

Pacific Railway v. Vancouver (City) , 2006 SCC 5 ; Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation) , 2013 SCC 13 ; Bartlett v. Corner Brook (City) , 2004 NLCA 50 . STATUTES CONSIDERED: Urban and Rural Planning Act, 2000 , SNL 2000, c. U-8 . TEXTS CONSIDERED: Eric C. E. Todd, The Law of Expropriation and Compensation in Canada, (Toronto: The Carswell Company Limited, 1976) at pages 331-332. REASONS FOR JUDGMENT Paquette, J. : INTRODUCTION [ 1 ] The applicant owns vacant lands on Perrins Road in Conception Bay South.

On a visit to its property in July 2015, the applicant discovered that a paved roadway and turnaround (“roadworks”) had been constructed on the land by the respondent, the Town of Conception Bay South (the “Town”) without its knowledge. [ 2 ] The timing of the roadworks remains a mystery. The Town’s current staff, not employed prior to July 2015, have no knowledge of the roadworks, and a search of Town records disclosed no information.

The Town said that it was possible that the roadworks were undertaken as part of a 2012 roads paving program, but there were no records available in relation to the program. [ 3 ] It is the applicant’s position that its private property has been constructively expropriated by the Town entitling it to seek compensation by a board of assessors established under the Urban and Rural Planning Act, 2000 , SNL 2000, c. U-8 (“ Act ”).

BACKGROUND [ 4 ] Ric-Car Investments Limited, which had been a party to a corporate amalgamation resulting in the formation of the applicant, purchased the vacant lands in 1997 from the Trustee in Bankruptcy for the estate of the then owners. Affidavits of possession revealed that they resided in a mobile home on the property from approximately 1976 to 1995 when the residential trailer was removed. The owner’s father had previously occupied the land from at least 1947.

The affidavits recite that the family “always visibly prevented all other persons from using any part of the Property for any purpose whatsoever unless those other persons first obtained their express permission”. It was also stated that the father and subsequently his son and wife “never granted any roadways, paths, easements, rights of way or leases affecting the Property”.

Tax records indicate that the applicant and its predecessor paid property taxes to the Town since acquisition. [ 5 ] An enlarged aerial photograph from 1986 revealed a white rectangular object on the lands, consistent with the placement of the prior owners’ mobile home. [ 6 ] The Town had initially adopted the position that it had a prescriptive easement over the property because it had been used as a roadway and turnaround by the public since 2005. The Town introduced aerial photographs taken in 2005, 2008, 2013 and 2015, reproduced in separate Town drawings and each dated 25 April 2018.

The photographs have been marked, but there is no key to explain the reason the plans were created or the relevance of the markings, other than to state that the underlying images illustrate a roadway and turnaround supporting its position that the area was publicly used since approximately 2005. The applicant refuted this statement, explaining the topography only evidences that a private gravel driveway and turnaround provided access to the mobile home.

The photographs do not advance the Town’s submission respecting a prescriptive easement, and in any event, the Town had abandoned this position by the time of the hearing. The photographs also fail to establish pavement on the lands in 2012 when the program was apparently in place. The 2013 photograph reveals a gravel driveway and turnaround. The best estimate for the timing of the roadworks is sometime between 2013 and July 2015 when the applicant discovered that its lands had been paved. [ 7 ] The Town was at all times aware that the lands were privately held by the applicant - (

i) it had been assessed for and paid its municipal taxes since 1997; and (ii) it had applied for a three lot residential building development permit in 2008 which had subsequently lapsed. [ 8 ] The applicant’s director, Mr. Richard Gosse, explained that while the permit to develop was not pursued prior to its expiry, the applicant nonetheless contemplated the possibility of development at a later date. Attached to Mr.

Gosse’s affidavit was an engineered drawing by MAE Design Limited showing the intended location of the initial three lot development and a comparison between the size of the paved turnaround created by the Town and that which had been proposed by the applicant. The applicant advances that the plan demonstrates that the Town’s paved turnaround materially exceeds the proposed cul-de-sac and diminishes the size of the intended building lots, thereby impacting upon the applicant’s ability to carry out the three lot development. [ 9 ] The applicant proposed a monetary settlement.

The Town did not agree with the amount claimed and countered that it would remove the asphalt. The Town acknowledged that it never specified how much asphalt would be removed, and there were no discussions with the applicant in relation to this. analysis

[10]

Section 50 of the Act governs expropriation by municipalities. Subsection 50(1) authorizes expropriation of private lands to beused for municipal purposes provided prior approval is received from the minister. Subsection 50(2) permits expropriation “essential tothe carrying out” of specified municipal plans, “together with (

a) remnants and portions of parcels of land that are necessary for carryingout that plan or regulation; or (

b) land that may be injuriously affected by that plan or regulation.” The Act sets out the formal noticerequirements which must be provided to land owners prior to any expropriation. [11] The Town did not rely upon this authority in the taking of the applicant’s lands to construct roadworks. At issue in theseproceedings is whether the applicant’s lands have been constructively expropriated. For the reasons which follow, I conclude that theyhave. [12] The Newfoundland and Labrador Court of Appeal decision in Lynch v. St. John’s (City), 2016 NLCA 35[1], explainsconstructive expropriation.

In Lynch, watershed protection regulations effectively precluded any development of the landowners’property beyond its natural state. The Court of Appeal referred to authoritative case law deciding that compensation is payable where thestate takes private lands for the benefit of the public at large. Compensation may relate to the value of the lands taken or damages forlands which have been injuriously affected. (See Attorney General v. De Keyser's Royal Hotel Ltd., [1920] A.C. 508, [1920] All E.R.Rep. 80 (U.K. H.L.) and Alberta (Minister of Public Works, Supply & Services) v.

Nilsson, 2002 ABCA 283.) [13] Lynch cites Canadian Pacific Railway v. Vancouver (City), 2006 SCC 5, at paragraph 30 for the two-part test for constructiveexpropriation also referred to in the law as “de facto” expropriation: 30 For a de facto taking requiring compensation at common law, two requirements must be met: (1) an acquisition of a beneficialinterest in the property or flowing from it, and (2) removal of all reasonable uses of the property (see Mariner Real Estate Ltd. v. NovaScotia (Attorney General) (1999), 1999 NSCA 98 , 177 D.L.R. (4th) 696 (N.S. C.A.), at p. 716; Manitoba Fisheries Ltd. v.

R.(1978), (SCC), [1979] 1 S.C.R. 101 (S.C.C.); and British Columbia v. Tener, (SCC), [1985] 1 S.C.R.533 (S.C.C.). [14] Constructive expropriation generally arises where land use regulation impacts upon the use of private lands. In such cases, therights of ownership have been taken as a result of restrictions which the state has put on the uses of those lands. The Court of Appealconcluded that the breadth of the land use restrictions imposed in Lynch amounted to constructive expropriation.

By contrast, here theprivate property was not taken in furtherance of land use regulation, but constituted an unauthorized taking for the creation ofroadworks. The Town’s explanation that this was inadvertent does not override its responsibility to private landowners. [15] Applying the principles in Lynch, I am satisfied that the private land was converted to a public road which has removed otherreasonable uses of this portion of the property. Indeed, the applicant or its invitees cannot walk upon or otherwise use the roadworkswithout fear of being struck by vehicular traffic.

The Town’s assertion that the applicant was not using its land for any designatedpurpose and therefore cannot demonstrate interference with any land use is not credible. If landowners choose to keep lands vacant, theyshould be entitled to do so without fear of state interference. [16] Compensation for the injurious affection of lands may also arise in the context of constructive expropriation. This is describedin Antrim Truck Centre Ltd. v.

Ontario (Ministry of Transportation), 2013 SCC 13, cited in Lynch, which involved a claim for injuriousaffection of land in the aftermath of highway construction, not on the lands (as is the case here), but in the vicinity of the subject landsand significantly interfering with access to the private property.

The Supreme Court of Canada considered whether the property ownershould bear the cost of this consequential interference and concluded that it should not assume “significant diminution of its marketvalue in order to serve the greater public good” (at paragraph 56). [17] The applicant submits that it may have a claim for injurious affection of the remaining lands.

It may seek to establish a threebuilding lot development or the vacant lands could be used for other purposes, not requiring an access road or turnaround. [18] In order to qualify for injurious affection the subject lands must be “held with” the expropriated lands and negatively impactedin value by the expropriation in a manner which is not “too remote”. (See Eric C. E.

Todd, The Law of Expropriation and Compensationin Canada, (Toronto: The Carswell Company Limited, 1976) at pages 331-332.) [19] Lynch instructs that on a finding of constructive expropriation, the legislative scheme for compensation may be triggered. Thisis explained at paragraph 66: … A de facto expropriation may be treated as a trigger for the expropriation process, without unduly straining the language of thestatute.

Compensation must then be paid as determined by arbitration if no agreement is reached on the amount. … [20] Sections 61 to 64 of the Act provide for the payment of compensation for lands expropriated or injuriously affected byexpropriation. Subsection 62(1) includes land owners “who are or may be entitled to claim compensation with respect to theexpropriation or injurious affection resulting from the expropriation”. [21]

Section 63 of the Act further provides that where the parties cannot agree on the amount and conditions of compensation “to bepaid for the expropriated land or injurious affection … the amount of compensation to be paid shall be fixed by a board.” Accordingly,the fact that the remaining lands may have been injuriously affected suffices to trigger the compensation process set out in

section 62 ofthe Act. Damages payable as a result of any injurious affection is a matter for the board of assessors to determine. The board ofassessors convenes a hearing (section 66 of the Act) and will determine whether there is a causal connection between the expropriationand the depreciation in the value of the remaining property (Bartlett v. Corner Brook (City), 2004 NLCA 50, at paragraph 9). [22] Having found that the applicant’s lands have been constructively expropriated by the installation of the roadworks, I concludethat the applicant is entitled to file a claim for compensation as if a notice of expropriation had been served upon it

pursuant to the expropriation provisions of the Act . Failing agreement with the Town concerning the amount of compensation to be paid, the applicant can proceed to a determination of compensation by a board of assessors. conclusion [ 23 ] That portion of 47-53 Perrins Road taken by the Town and paved as a roadway and turnaround constitutes constructive expropriation. [ 24 ] The procedure for compensation relating to expropriation and injurious affection is set out under

Part IX of the Act . The applicant has a right pursuant to

section 62 of the Act to initiate a claim for compensation with respect to the expropriation and any injurious affection which may result from the expropriation as though a notice of expropriation has been served under the Act to be determined by agreement or a board of assessors . costs [ 25 ] The applicant claims full indemnity in a cost award. It relies upon Bartlett. This involved an appeal from costs awarded by a board of assessors.

The claimant had been denied its costs before the board of assessors in relation to the expense of retaining appraisals and legal advice to establish the devaluation of his remaining property and business loss. The Newfoundland and Labrador Court of Appeal allowed the appeal finding the legal fees and appraisal fees appropriate compensation items. Bartlett did not grant indemnity solicitor/client costs on the appeal.

In Lynch , costs were awarded pursuant to Column 5 of the Scale of Costs. [ 26 ] In consideration of an appropriate costs award, I am not satisfied that the applicant has established a basis for full indemnity costs. An award of party and party costs shall follow.

Taking into consideration that this is an expropriation case and the fact that the Town had advanced a prescriptive easement in its favour, both in its affidavit evidence and pleadings, only to later abandon this at the hearing, I award party and party costs on the basis of Column 5. [ 27 ] The applicant shall have its costs in accordance with Rule 55, Column 5, of the Rules of the Supreme Court, 1986, SNL 1986, c. 42, Sch. D . _____________________________ Deborah J. Paquette Justice