Terrance v. Elizabeth Shute, 2023 NLSC 24
Opinion
court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Shute v. Paradise (Town) , 2023 NLSC 24 Date : February 20, 2023 Docket : 201901G2271 Between: Terrance and Elizabeth Shute appellants/ Respondents by Cross-appeal And: Town of Paradise respondent/ Appellant by Cross-Appeal Before: Justice Philip Osborne On Appeal From: A decision of a Board of Assessors pursuant to the Urban and Rural Planning Act, 2000 , dated February 20, 2019. Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: March 25 and April 5, 2021
Summary: This is an appeal and a cross-appeal from a decision of a Board of Assessors, established pursuant to the Urban and Rural Planning Act,
2000 to determine compensation owing in relation to a strip of land on Topsail Road that was expropriated by the Town of Paradise fromTerrance and Elizabeth Shute. The Court determined that 1) the Shutes’ Notice of Appeal was filed in time and 2) the Board did not err in
a) determining the value ofthe land expropriated from the Shutes;
b) rejecting the Shutes’ claim for severance damages; or
c) their treatment of the abandoned land.The Court found that the Board did err in awarding the Shutes non-pecuniary damages for disturbance; and in its determination that it didnot have authority to award solicitor and client costs. Appearances: Michael J. Crosbie, K.C. Appearing on behalf of the Appellants/ Respondents by Cross-Appeal Erin E. E. Best & Giles W. Ayers Appearing on behalf of the Respondent/ Appellant by Cross-Appeal Authorities Cited: CASES CONSIDERED: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65; Housen v. Nikolaisen, 2002 SCC33; Lynch v. St.
John’s (City), 2020 NLCA 31; His Majesty the King in Right of Newfoundland and Labrador v. O.D. Holdings Limitedand City Sand and Gravel Limited, 2022 NLCA 60; St. John’s (City) v. F.W. Woolworth Co. (1981), (NL CA), 38Nfld. & P.E.I.R. 202, 130 D.L.R. (3d) 171 (Nfld. C.A.); Lynch v. St. John’s (City), 2022 NLCA 29 STATUTES CONSIDERED: Urban and Rural Planning Act, 2000, S.N.L. 2000, c. U-8; Judicature Act, R.S.N.L. 1990, c. J-4;Expropriation Act, R.S.N.L. 1990, c. E-19; City of St. John’s Act, R.S.N.L. 1952, c.82; RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L., 1986, c. 42 Sch.
D TEXT CONSIDERED: Eric C.E. Todd, The Law of Expropriation and Compensation in Canada, 2nd ed, (Scarborough: Carswell,1992) REASONS FOR JUDGMENT Osborne, J.: INTRODUCTION [1] This is an appeal and a cross-appeal from a decision (the “Decision”) of a Board of Assessors, established pursuant to theUrban and Rural Planning Act, 2000, S.N.L. 2000, c.
U-8 (the “Act”) to determine compensation owing in relation to a strip of land onTopsail Road that was expropriated by the Town of Paradise (the “Town”) from Terrence and Elizabeth Shute (the “Shutes”). [2] In 2013, the Town expropriated a strip of land owned by the Shutes at the foot of their residential property fronting on TopsailRoad as part of a road-widening project. The expropriation was originally for 140.788 square metres of land, however, by Notice ofAbandonment, the Town reconveyed to the Shutes 139.4 square metres.
The Town retained an easement over the land it reconveyed tothe Shutes. [3] The parties could not agree on the compensation owed to the Shutes and the matter was referred to the Board of Assessors.The Board heard the matter over four days and gave an expropriation compensation award on February 20, 2019, ordering that the Townpay the Shutes a global sum of $65,000 for the value of the land and easement acquired, the disturbance caused to the Shutes, all legal
and professional costs incurred prior to the hearing, together with simple interest at a rate of 3.5%, and party and party costs for the hearing to be taxed by a taxing officer. [ 4 ] The Shutes’ appeal the Decision on compensation and costs. The Town cross-appeals the Decision awarding non-pecuniary damages for disturbance and the Board’s decision on costs. The Town also asserts that the Shutes’ appeal to this Court was not filed in time. [ 5 ] The Appeal was heard by Justice Deborah Paquette, who reserved her decision. Sadly, Justice Paquette passed away before she could render her decision.
Pursuant to the Judicature Act , R.S.N.L. 1990, c. J-4, s. 32 (1) (a) , it was ordered that the appeal be reheard by me. I am to rehear the matter by reviewing the materials filed, the written submissions, the record, the transcript of the hearing before the Board, and the audio recording of the appeal before Justice Paquette. [ 6 ] I found that the Shutes’ Notice of Appeal was filed in time and that the Board did not err in: determining the value of the land expropriated from the Shutes; in rejecting the Shutes’ claim for severance damages; or in its treatment of the abandoned land.
I found that the Board did err in awarding the Shutes non-pecuniary damages for disturbance and in its determination that they did not have authority to award solicitor and client costs. BACKGROUND [ 7 ] The Shutes own a home located at 1634 Topsail Road in the Town of Paradise. [ 8 ] The Town wished to widen Topsail Road. In order to accomplish this, a number of utility poles had to be moved.
Newfoundland Power required an easement for the entire length of Topsail Road before it would move any utility poles. [ 9 ] The Town received authority to expropriate a strip of land from the Shutes that ran along their property fronting on Topsail Road (the “Strip”). The Strip totaled 140.788 square metres and was entirely within the minimum setback area of the Town’s development regulations. Prior to the expropriation the Strip was not capable of development in any manner other than for landscaping due to the setback requirements.
While there were no utility poles on the Shutes’ land, overhead wires ran the length of the Strip. [ 10 ] Partly in response to a Statement of Claim that the Shutes served on the Town relating to the expropriated land, in 2018, the Town kept 1.43 square metres of the Strip and by Notice of Abandonment they returned 139.4 square meters of the Strip to the Shutes. The returned land was made subject to an easement in favour of the Town and Newfoundland Power. [ 11 ] Between 2013 and 2018 there was a lot of turmoil between the Town and the Shutes.
The disputes related to the amount of compensation the Shutes were entitled to receive and the remediation work necessitated by the expropriation. The Board noted that most of the dispute related to issues surrounding the reinstatement of the Shutes’ property. The Board found that the delay in the work being completed on a timely basis contributed significantly to the Shutes’ frustration and their claim for disturbance. [ 12 ] As part of the expropriation, an old retaining wall located on the Strip was removed. The Town was required to replace the wall.
The Board found that the Shutes chose a placement of the new wall parallel to the road. The placement of the new wall resulted in 47 square metres of the Shutes’ land being outside of the wall on the front of their property. The Shutes’ old retaining wall had a similar
section of land outside of the wall on the front of their property. The Shutes claim they are entitled to damage caused by the wall dividing a
section of their land. [ 13 ] At the hearing, the Board heard evidence from the Shutes, two representatives from the Town, and Todd Pickett, an accredited appraiser (the “Appraiser”). [ 14 ] At the request of the Town, in 2013, the Appraiser had valued the Strip at $12,206.32 using a per square metre value of $85. The Appraiser concluded that there was no measurable injurious affection to the remaining land. [ 15 ] After the 2018 Notice of Abandonment, using a unit price of $85 per square metre, the Appraiser valued the Strip at $8,417.
This value was calculated by adding a value of 70% for the 139.4 square metres subject to the easement ($85 x 139.4 m2 = $11,849 x 70% = $8,294.30. This was rounded to $8,295 ) to the value of the 1.43 square metres kept in fee simple ($85 x 1.43= $121.55.
This was rounded to $122). [ 16 ] The history of the protracted and unsuccessful negotiations prior to the hearing before the Board may be summarized as follows: • Before the Notice of Abandonment, the Town offered $12,206.32, the appraised value of the Strip, in addition to remediation infrastructure work that was required. • The Shutes counter-offered at $99,710.46 plus indemnification of professional fees and disbursements. • The Town offered $65,000 including professional fees and disbursements. • The Shutes counter-offered at $130,000 including professional fees and disbursements. • The Town offered $75,000 including professional fees and disbursements.
• The Shutes counter-offered with $110,000 including professional fees and disbursements. • The Town then executed the Notice of Abandonment and offered $35,900. • The Shutes counter-offered at $84,130 plus professional fees which were estimated to be $35,424. Standard of Review [ 17 ] Subsection 75(5) of the Act provides a statutory appeal mechanism to the parties against the findings of the Board on questions of law or fact in connection with the expropriation, or on the question of the amount of compensation awarded by the Board. [ 18 ] In Canada (Minister of Citizenship and Immigration) v.
Vavilov , 2019 SCC 65 , the Supreme Court of Canada set the framework for determining the standard of review for administrative tribunals. The direction is that the appellate standard of review contemplated by Housen v.
Nikolaisen , 2002 SCC 33 , is applicable to statutory appeals of administrative tribunal decisions. [ 19 ] I am satisfied that the appellate standard of review contemplated by Housen applies to this appeal, or more particularly: • For questions of law, correctness; • For questions of fact, palpable and overriding error; and, • For questions of mixed fact and law and inferences of fact, generally palpable and overriding error. [ 20 ] With respect to a similar appeal provision in the Expropriation Act , R.S.N.L. 1990, c. E-19 , the Court of Appeal in Lynch v . St.
John’s (City) , 2020 NLCA 31 at para. 73 (“ Lynch 2020 ”) and His Majesty the King in Right of Newfoundland and Labrador v. O.D. Holdings Limited and City Sand and Gravel Limited , 2022 NLCA 60 , at para. 29 , stated: For statutory appeals, unless the statutory appeal provision stipulates otherwise, this would seem to mean, amongst other things, that: • questions of law involving
interpretation of the tribunal’s home statute will now be reviewed on a correctness standard; … • the appellate court may interfere and set aside the tribunal decision whenever material error is found whereas, under the former Dunsmuir reasonableness standard, error was not the touchstone for interference provided the decision, viewed holistically and contextually, could nevertheless be said to be reasonable; and • if material error is found, the appellate court may, at its option but always in accordance with principle, proceed to decide the merits of the case in accordance with proper legal rules or remit the case to the tribunal for further adjudication in accordance with those rules, whereas on judicial review the power of the court was generally restricted to setting aside the decision and remitting it to the tribunal. [ 21 ] The appeal and cross-appeal before this Court challenge the Boards conclusions of law, mixed law, and fact.
ISSUES [ 22 ] The issues raised in this appeal are: Issue 1: Did the Shutes file their Notice of Appeal within the 30 day period as prescribed by the Act ? Issue 2: Did the Board err in determining the value of the land expropriated from the Shutes? Issue 3: Did the Board err in not awarding the Shutes severance damages for the 47 square metres of land that is between their new retaining wall and their front boundary?
Issue 4: Did the Board err in its consideration of the Notice of Abandonment or in determining the value of the easement taken overthe abandoned land? Issue 5: Did the Board err in awarding damages to the Shutes for disturbance? Issue 6: Did the Board err in its determination that it did not have authority to award solicitor and client costs? Issue 7: Did the Board err in not awarding the Town costs of the hearing?
Issue 1: Did the Shutes file their Notice of Appeal within the 30 day period as prescribed by the Act? [23] It is the Town’s position that the Notice of Appeal was not filed within the 30 day period as prescribed by the Act and that thematter must be dismissed as the Court lacks jurisdiction to hear the appeal. For the purposes of determining when the time for appealingbegan to run, I find that the date the Board’s award was made is February 22, 2019 and that the Notice of Appeal was filed in time. [24] The right to appeal a decision of the Board is prescribed by
section 75 of the Act. The relevant portions of
section 75 provide: 75.
(1) The board shall make its award in writing not more than 60 days after it has been appointed, unless the minister, council orregional authority, with the agreement of the parties to the arbitration, extends that period, and shall deliver a copy of it immediately tothe parties to the arbitration. . . .
(5) The minister, council or regional authority or an owner of land which has been expropriated may, not more than 30 days after thedate of an award, give to the other party notice of an appeal to the court against the findings of the board upon questions of law or fact inconnection with the expropriation or upon the question of the amount of compensation awarded by the board. [emphasis added] [25] The Decision is signed and dated February 20, 2019. The Decision was sent to the parties on February 22, 2019.
The Notice ofAppeal was filed on Monday, March 25, 2019. [26] The Town submits that the 30 day appeal period runs from the date the Decision was signed rather than the date the Decisionwas delivered to the parties. The Town submits that the Notice of Appeal was filed 33 days after the date of the Decision and is thereforeout of time. [27] The Shutes’ position is that subsection 75(1) of the Act requires the Board to make its award and “deliver a copy of itimmediately to the parties”. They argue that the appeal period runs from when the Decision has been communicated to the parties. Theyrely on
section 107 of the Act to support the proposition that the decision must be delivered.
Section 107 of the Act provides in part: 107.
(1) Unless otherwise stated in this Act, a notice, order or other document required to be given, delivered or served under this Act issufficiently given, delivered or served where delivered personally or sent by registered mail addressed to the person at the latest knownaddress of that person. [28] The Shutes submit that subsection 75(1) of the Act requires that the award be in writing and be delivered, and that subsection107(1) of the Act states how it may be delivered.
The Shutes’ position is that the “date of the award” is the date that the award isdelivered. [29] In support of their position that the appeal period runs from the date the award was signed and not from the date it wasdelivered, the Town notes the language difference between
section 46 and
section 75 of the Act.
Section 75 prescribes an appeal periodthat is “not more than 30 days after the date of an award.” While
section 46, which relates to appeal boards, specifies that an appealboard’s decision may be appealed not later than 10 days after a decision “has been received” by a party. [30] The Town’s
interpretation would mean that the right to appeal could be lost before a party affected by that decision becameaware of the decision through matters entirely beyond their control, for example through administrative error on the part of the Board, amail disturbance, or even a deliberate delay of notification. [31] In St. John’s (City) v. F.W. Woolworth Co. (1981), (NL CA), 38 Nfld. & P.E.I.R. 202, 130 D.L.R. (3d) 171(Nfld. C.A.), the Court of Appeal interpreted a provision of the City of St.
John’s Act, R.S.N.L. 1952, c.82, that required an appeal to befiled “within 10 days after the date of the decision.” In that case, the Court of Appeal reversed a decision of this Court that declared aNotice of Appeal was filed out of time based on the date on the decision rather than the date the decision was received by the impactedparty. The Court of Appeal found that “the date of a decision” is the date “when the decision is pronounced or delivered at the hearing,or if not so pronounced, when the parties have been made aware of the decision” (at paras. 14-15).
The Court of Appeal stated that a rightto apply for leave to appeal from a decision is illusory if it can be lost before a party knows what the decision is. [32] I conclude on the facts of this case that the Shutes were made aware of the Decision when it was delivered to them on February22, 2019 such that for the purposes of commencing an appeal, the date of the Board’s decision was February 22, 2019. Accordingly, theNotice of Appeal was required to be filed in this Court within 30 days of February 22, 2019.
Since the 30 days from February 22, 2019,was on a Sunday, and the appeal was filed on Monday, March 25, 2019, I conclude that the appeal was filed in time. Issue 2: Did the Board err in determining the value of the land expropriated from the Shutes?
[ 33 ] The Shutes appeal the Board’s determination of the value of the property interest expropriated. This is a question of mixed fact and law. [ 34 ] The Shutes’ position is that the Board erred in accepting the Appraiser’s evidence regarding the highest and best use relating to the land taken.
They assert that the Board should have determined that the highest and best use of the property was as a building lot on which structures can be built (a “structure building lot”) and not as a continuation of its current use. [ 35 ] In assessing the highest and best use of the property based on the evidence which had been presented, the Board outlined the obligation of assigning value to the expropriated land that appropriately reflects the loss suffered by the property owner as a result of the expropriation. They reviewed the factors from
section 70 of the Act that they were required to consider in assessing the value. The Board reviewed the evidence and the arguments that were made and they identified what they accepted, and why they accepted the evidence of the Appraiser.
I conclude that the Board identified and applied the proper test and that they made no error in deciding this question of mixed fact and law. [ 36 ] The Board considered the testimony of the Appraiser who gave evidence about highest and best use, the value of lots in the vicinity of the Shute property, the market value of the lands actually expropriated from the Shutes, the value of the lands abandoned back to the Shutes, injurious affection to the property, and utility easement value.
The Appraiser’s opinion was that the highest and best use of the property expropriated was a continuation of its current use as a residential dwelling, zoned mixed development. [ 37 ] The Board considered and rejected the Shutes’ arguments that the highest and best use of the property was for it to be considered subdivided into two residential lots.
The Board stated that there was no evidence before it to suggest that the lot could be subdivided or that a subdivided lot would have a different value than a large lot. [ 38 ] The Appraiser concluded that there was no measurable injurious affection to the remaining property of the Shutes as a result of the road widening, emphasizing that the road widening did not result in the road being any closer to the Shutes’ property than it was before.
The Appraiser gave evidence that small parcels of land such as the Strip are practically valueless but must be imputed with some value for expropriation purposes. [ 39 ] The Board accepted the Appraiser’s evidence that there was no appreciable difference in the value of the Shutes’ property before or after the expropriation and that accordingly it was not appropriate to use a “before and after” valuation approach, but rather it was appropriate to use a per square metre value approach in determining the value of the Strip.
The Appraiser valued the Shutes’ entire property, pre-expropriation, at $85 per square metre.
After considering a reduction in value caused by the easement over the abandoned land, the Appraiser valued the Strip to be $8417.00 based upon a unit price of $85.00 per square metre. [ 40 ] The Board considered and rejected the Shutes’ submissions that the unit rate was too low and that the unit rate should be $192.99 per square metre. [ 41 ] The Board noted that the Appraiser’s valuation was based on a determination of the square metre value of vacant land in residential neighbourhoods and that he differentiated the various square metre valuations to the few comparable sales in the area at the effective time of the valuation.
The Board accepted the method of valuation used by the Appraiser and the Board accepted the valuation rate of $85.00 per square metre based on the size and location of the property. [ 42 ] On appeal, the Shutes argue that the Appraiser correctly identified relevant sales and that he correctly explained the principle of highest and best use, but that the Appraiser incorrectly applied the highest and best use test to the facts regarding zoning and legally permissible use.
They now say that the Appraiser should have concluded that the highest and best use of the Strip is as a structure building lot and that the Board erred in accepting the Appraiser’s opinion. [ 43 ] The Town asserts that this is a new argument and that they did not have an opportunity to tender any evidence on the issue. The Town challenges the Shutes’ assertion that the highest and best use of the property as a structure building lot would be physically possible, legally permissible, probable, marketable, financially feasible and maximally productive.
The Town points to the Appraiser’s evidence before the Board that the Strip was not marketable as it had no real value. [ 44 ] In another context, the Board noted that prior to the expropriation the Strip was not capable of being developed in any manner other than for landscaping due to the setback requirements of the Town’s development regulations. [ 45 ] The highest and best use analysis requires consideration of potentialities for future use of the land if it had not been expropriated, even if the land was not used for that purpose at the time of expropriation, provided there is a reasonable probability that such use can be achieved in a manner that affects the present value of the property.
As noted by the Court of Appeal, “purely speculative or unrealistic expectations for future uses are not sufficient” ( Lynch v. St. John’s (City) , 2022 NLCA 29 (“ Lynch 2022 ”) at para. 49 ). [ 46 ] Aside from the proposition in the Shutes’ appeal submissions that a designation as a structured building lot is permissible and that it is the highest and best use of the land, it is not clear that such a designation would attract a higher valuation in this circumstance.
I am not satisfied that further evidence would not have been adduced by the Town had this argument been advanced before the Board. [ 47 ] I do not have the foundation to accept that the Board erred in this aspect of the Decision. While the Shutes may not have a burden of proving market value before the Board, they did not adduce evidence in support of their position on market value.
The Board noted that the Shutes did not provide any evidence contrary to the Appraiser’s. [ 48 ] The transcript demonstrates that the Board engaged the Appraiser on the valuation of the property, the valuation of comparable limited market properties, and the utility of applying the unit rate for the value as a whole to the part taken. [ 49 ] The Board’s decision states that it accepts the following taken from the evidence and argument: a. The valuation based upon the evidence of the Appraiser as to the property’s highest and best use.
b. That the Shutes ultimately benefitted from the work completed to their property. c. The expropriation and subsequent abandonment did not diminish the utility of the land taken and that the front of the property is as useful or as superfluous as it was before the expropriation, being governed by the same Town regulations with respect to setbacks and function. [ 50 ] The Board, in arriving at its own opinion of market value, considered the evidence of the Appraiser and concluded that it was fair and based on reasonable grounds.
It found that it could not see any reason why it should not accept the valuation of the land acquired and easement right taken as being $8417. I find no reason to disturb the Board’s conclusion in this regard. Issue 3: Did the Board err in not awarding the Shutes severance damages for the 47 square metres of land that is between their new retaining wall and their front boundary? [ 51 ] The Shutes argue that the Board erred in not awarding them severance damages for the 47 square metre
section of land that is between the outside of their new retaining wall and their front boundary.
This is a question of mixed fact and law. [ 52 ] The Shutes describe their severance claim in the following nature: • Loss of reasonable use and enjoyment of their land • Physical inconvenience and discomfort of having to deal with the retaining wall construction and repair to their property • Loss of general amenities and comfort of life because of the disturbance • Mental stress and anxiety caused by the Town’s behavior towards them. [ 53 ] For the severance of the 47 square metres of land outside of their retaining wall, the Shutes are claiming $9,212 (47m2 x $195/m2). [ 54 ] In his text, Eric C.E.
Todd, The Law of Expropriation and Compensation in Canada , 2 nd ed, (Scarborough: Carswell, 1992) (“Todd”), explains claims for severance as follows: Where part of an owner’s land is expropriated, the piece or pieces of land remaining may be rendered less valuable as a result of their severance from the expropriated portion. Here a claim may be made for “injurious affection by severance”. Examples are partial takings of a strip of land from a larger parcel for a highway, pipeline or railway.
The owner may claim compensation not only for the value of the expropriated strip but also for the resulting severance damage to the remaining portion or portions. … Statutory provisions do not refer to severance damage as such but usually, if at all, only to damage by injurious affection. This is because severance damage is regarded either as a type of injurious affection or as part of the value to the owner of the property actually expropriated. [footnotes omitted] [ 55 ] The Shutes’ land is not divided because of expropriated land.
Rather, the severance that the Shutes complain of is caused by a wall that they own on their property. [ 56 ] The Board considered that prior to the expropriation, the Shutes had an existing retaining wall running across the front of their property with a small parcel of land between the retaining wall and their front boundary. [ 57 ] The Board considered the claim for severance by the Shutes and determined that the value of the orphaned land was appropriately addressed by the value determined by the Appraiser. [ 58 ] At para. 85 of the Decision, the Board rejected the Shutes’ claim that the orphaned land was now rendered of no value.
The Board noted that the orphaned land can still be landscaped to add to the appeal of their property as it did prior to the expropriation. [ 59 ] I conclude that there is no error in this finding of the Board. Issue 4: Did the Board err in its consideration of the Notice of Abandonment or in determining the value of the easement taken over the abandoned land? [ 60 ] In 2018, by Notice of Abandonment the Town returned 139.4 square metres of the Strip to the Shutes. The Town kept 1.43 square metres of the Strip.
The returned land was subject to an easement in favour of the Town and Newfoundland Power. [ 61 ] The Shutes argue that the Board erred in law as it should have determined the amount payable as of the date of expropriation in 2013 and then factored in the value of the abandoned land as of 2018. The Shutes also argue that the Board erred in fact and law in assessing the value of the abandoned land.
I find no error in either regard. [ 62 ] To determine what compensation was owed as of July 2013, in light of the abandonment, the Board determined the value of the 1.43 square metres expropriated and added it to the loss in value caused by the easement over 139.4 square metres.
[ 63 ] The Shutes argue that the Board should have determined the value of the land abandoned as of October 31, 2018 and that they should have deducted that value from the amount that was payable for the 140.788 square metres as of the date of expropriation in July 2013. [ 64 ] The Board considered subsection 74(4) of the Act when it determined the effect of the abandonment in this case.
Subsection 74(4) provides that: 74(4) The event of the abandonment again vesting the land in the person from whom it was expropriated shall be taken into account in addition to the other circumstances of the case in estimating or assessing the amount to be paid to a person claiming compensation for the land expropriated and not abandoned. [ 65 ] Notwithstanding that prior to the expropriation, power lines ran over an area of the 139.4 square metres, the Board considered that the easement now reduced the value of the land by 70% and ordered compensation accordingly.
The Board also found that the front of the Shutes’ property remains as useful or as superfluous now as it was before the expropriation given the Town regulations with respect to setbacks and function. [ 66 ] With respect to valuation, the Shutes argue that the Board erred in finding that there was only a 70% loss in value of the easement lands. The Shutes argue that the lands abandoned back actually have no value. [ 67 ] The Board noted that they considered the evidence of the Appraiser regarding the valuation of the land expropriated and subsequently abandoned.
The Board stated that the Appraiser evaluated the land originally in 2012 and revisited the appraisal in 2013 and again in October 2018 in light of the abandonment. The Board noted that the Appraiser valued the partial acquisition to be $8,417 based on the 2013 unit price of $85 a square metre.
There was no evidence that the easement lands had decreased in value from the date of expropriation to the date it was returned to the Shutes under the Notice of Abandonment. [ 68 ] The Decision notes that the Appraiser’s evidence was that in Canada utility companies pay owners between 50% to 100% of a property’s fee simple value for an easement. The Appraiser testified that he is aware that quite often through negotiations property owners have settled for 50% of the fee simple value for an easement, and that in some cases owners have settled with Newfoundland Power for 35% of the fee simple value.
The Appraiser’s opinion was that in this case the value should be 70% of fee simple value (139.4m2 x $85 = $11,849 x 70% = $8,294.30. This was rounded to $8,295). The Board accepted this opinion. [ 69 ] Given the findings that the Board articulated in accepting the Appraiser’s valuation of the easement, and their findings of the circumstances of the utility of the land both before and after expropriation, I find that the Board complied with subsection 74(4) of the Act and that they did not make any error when considering the abandonment or in determining the value of the easement.
Issue 5: Did the Board err in awarding damages to the Shutes for disturbance? [ 70 ] The Board awarded the Shutes non-pecuniary damages based on disturbance, however, the Shutes do not agree with the amount of disturbance damages awarded and appeal that part of the Decision. The Town cross-appeals arguing that it is an error of law to award non-pecuniary damages for disturbance in this context. I agree with the Town. [ 71 ] Before the Board, the Shutes stated that they were not seeking compensation for injurious affection, rather, they sought damages for disturbance.
They argued that a disturbance claim can and should include a claim in general damages for distress, anxiety, loss of peaceful enjoyment of their property while the work was being carried out, and punitive and aggravated damages (Decision, para. 62). [ 72 ] As a result of the Shutes specifically stating that they were not claiming for injurious affection, the parties did not argue this issue before the Board (Town’s Supplemental Reply Brief, para. 33) and the Board did not consider what elements are required to establish injurious affection or if those elements were present in this case. [ 73 ] On appeal, the Shutes reframed their argument as they “came to the realization that their argument based in disturbance was more appropriately one that should be based upon injurious affection” (Shutes’ Brief, para. 65).
The Shutes go on at para. 65 of their Reply Brief to submit that “although the legal basis now being advanced for economic loss is new, that the argument is not entirely new, and the essential question about economic loss still falls under the umbrella of the original inquiry and original damages evidence.” [ 74 ] On appeal, the Shutes argue that the Board erred in not assessing disturbance damages through common law principles of injurious affection, trespass, nuisance and negligence, and the remedies concerning loss of use and enjoyment of land related to those torts (Shutes’ Brief, para. 130).
The Shutes did not advance arguments on injurious affection, or the elements of nuisance or substantial and unreasonable interference with the land before the Board. [ 75 ] The Shutes’ argument is that injurious affection principles can entitle a person to recover for economic loss based upon trespass, nuisance or negligence concerning the land of the owner affected by the expropriating authority’s tortious behavior.
They argue that injurious affection and the concepts of trespass, nuisance and negligence are applicable to this case and should be used to provide the Shutes with economic reinstatement for the hurt that they have suffered as a result of the Town’s actions (Shutes’ Reply Brief, para. 70). [ 76 ] On appeal, the Shutes are effectively asking the Court to find that the partial taking of land caused injurious affection that caused disturbance, and then to assess the damages for that disturbance through the analytical framework for determining tort damages.
That was not the question before the Board and while, if this court finds a material error in the Board’s decision, it may proceed to decide the merits of the case in accordance with proper legal rules, this is not a trial de novo . The fact is that the Board did not consider injurious affection because the Shutes specifically stated that they were not claiming for injurious affection. The Board’s decision on disturbance damages
[ 77 ] The Board noted that it did not accept the generality of the Shutes’ disturbance claim in para. 62 of the Decision, however, at para. 63 it accepted the notion that the Shutes were disturbed and aggravated by the infringement on their peaceful enjoyment of their property. [ 78 ] In explaining their award, the Board stated at paras. 110-114 of the Decision: 110. The date of expropriation of this property was July 2013. The work associated or arising from the expropriation was not completed until approximately December 2016.
This time frame of three and a half years is an incredibly long period to carry out what was essentially an uncomplicated and straightforward project. 111. In view of the foregoing the Board finds that there is ground for awarding Disturbance damages in this case. Despite the Town Building Inspectors [’s] reasonable and concerned efforts in his dealings with the Shutes, the Board is concerned that the overall action of the Town caused significant upset for the Shute family, summed up as follows: The Shutes not being advised of their rights under expropriation when served with the Notice of Expropriation.
Not being advised of what protocol they might follow, seeking independent professional advice, etc. Being confronted with a contractor with the threat of a lien. Issues with the wall and continuous back and forth regarding all the reinstated improvements. Making the Shutes feel as though Town were doing them a favour by reinstating the improvements. A series of delays that dragged out completion of all the works over a 3 ½ year period, especially given the anxiety affect on the Shutes who suffer from ill health. 112.
Bearing in mind the difficulty in assessing damages for the delay, the stress, anxiety, disturbance and interference the Shutes were put through, … and bearing in mind their status of health, a substantial compensation is warranted. 113. The real dilemma for the Board comes from the representations made with respect to the issues of disturbance and costs. 114. The arbitration concluded with only one aspect of the claim that the Board could properly analyze and make an objective assessment on. That issue dealt with the land valuation.
All other verbal evidence dealt with the remaining issues, particularly the disturbance, that are difficult for any Board to quantify. [ 79 ] Then at para. 115 the Board noted that it reviewed the history of the exchange of pre-hearing settlement offers between the parties and went on to state at paras. 116-118: 116. The Board has determined it is appropriate to review these various offers and determine if these should be the basis of its decision on the quantum of the award.
To rely only on the representations made by both parties as to the basis in making the award, would be precarious, as without sufficient evidence and/or proof for these elements of the claim, the Board’s award would be tantamount to ‘guessing’ what would be fair and reasonable. 117.
Accordingly, and after significant discussion and review, the Board has concluded that the offer made by the Town of $65,000.00 made on November 3, 2016 is a fair and reasonable award, which amount is inclusive of the claim for (1) the value of the land and easement acquired, (2) the disturbance caused to the Shutes, and (3) all legal and professional costs incurred prior to the hearing. 118.
The Board accordingly awards the Shutes the sum of $65,000.00, together with simple interest at a rate of 3.5% calculated from the date of vesting to the date of payment, and party and party costs for the hearing to be taxed by a Taxing Officer of the Supreme Court of Newfoundland and Labrador in accordance with the scale of costs.
[ 80 ] The Shutes argue that
section 70 , particularly the reference to compensation for disturbance and other injurious affection authorizes the Board to award damages for disturbance using tort concepts. [ 81 ] Subsection 70(2) of the Act states:
(2) Where, in the opinion of the board, it is appropriate to make an award with respect to the expropriation of land for the disturbance to the owner or occupier or for other injurious affection that is properly the subject of compensation, the board may, in addition to the amount awarded in accordance with subsection (1), make an award of a sum that it may fix. [ 82 ] As noted, before the Board, the Shutes were not seeking compensation for injurious affection, but for disturbance. [ 83 ] In the expropriation context, Todd states at page 129 of his text that disturbance damages “may be defined as compensation for the economic loss which would otherwise be suffered by an owner by reason of having to move from the expropriated property.” [ 84 ] Todd notes at page 277 that whether any particular item is compensable as disturbance damage depends on the statutory provisions and on the facts and evidence in the particular case.
He provides illustrations of typical disturbance items which have been allowed to include: “the cost of moving, acquiring new premises, temporary interim accommodation, and the depreciated value of redundant furnishings such as drapes and rugs which cannot reasonably be used in substitute premises.
Also, there may be miscellaneous expenses arising from personal inconvenience and effort and the general disruption of family life necessarily incidental to moving from one residence to another”. [ 85 ] The Board at para. 112 of the Decision described the disturbance and aggravation of the Shutes in terms of the conduct of Town officials, poor communication by Town officials, and delay in the construction of the wall.
The Board stated that bearing “in mind the difficulty in assessing damages for the delay, the stress, anxiety, disturbance and interference the Shutes were put through, … and bearing in mind their status of health, a substantial compensation is warranted”. [ 86 ] The Board noted the lack of evidence offered by the Shutes to quantify the disturbance claim and acknowledged that there was no objective basis in the evidence to assess a claim for disturbance. [ 87 ] What the Board said they were compensating for was not items of the type described by Todd as compensable claims for disturbance; rather, the Board compensated the Shutes for stress, anxiety, disturbance and interference that the Shutes went through.
These are not elements of economic loss as contemplated by subsection 70(2) of the Act . [ 88 ] Awarding disturbance damages for the reasons articulated by the Board is an error of law. Accordingly, t he component of the Board’s $65,000 award that relates to disturbance damages must be set aside. Issue 6: Did the Board err in its determination that it did not have authority to award solicitor and client costs? [ 89 ] The Shutes appeal stating that the Board erred in law by failing to award them solicitor and client costs to be taxed (full indemnity costs and expenses).
The Shutes’ position is that people who have had land expropriated by a public authority are to be made whole by being paid their full professional expenses subject only to reasonableness. [ 90 ] The Town’s position is that the Board has the authority to award reasonable pre-hearing costs and that the Act allows the Board to award costs for a hearing before it, subject to taxation.
They argue that there is no duty to award costs and that there is no duty to award solicitor and client costs. [ 91 ] While there is no duty to award solicitor and client costs, I conclude that the Board made an error of law in interpreting
section 77 of the Act to conclude that it did not have authority to award solicitor and client costs and that the Act required costs, if awarded, to be on a party and party basis. [ 92 ] The Board stated the issues as: • whether costs on a solicitor and client bases can be awarded by the Board; • whether, if costs are not awarded separately by the Board, these costs can be factored into an award to make the Shutes “whole”; and • could the Board consider the offers and counter-offers made prior to the commencement of the hearing between the parties’ respective counsel when determining an appropriate award. [ 93 ]
Section 77 of the Act states: 77.
(1) The board may award costs with respect to a hearing before it under this Act but the costs shall be taxed by a taxing officer of the Trial Division in accordance with the scale of costs in the Rules of the Supreme Court, 1986 .
(2) Where the compensation awarded by a board is greater than the sum which the minister, council or regional authority offered in writing for the land that was expropriated or injuriously affected, the minister, council or regional authority shall pay the costs and expenses of the hearing before the board and the fees of the board provided for in this Part but, where the compensation awarded does not exceed the sum offered, the person who refused the offer shall pay those costs, expenses and fees, and where, in respect of land
expropriated or injuriously affected, no sum was offered before expropriation, those costs, expenses and fees shall be paid by the party designated by the board. [ 94 ] The Board, at paras. 55 and 117 of the Decision determined that it has no authority to award solicitor and client costs within the framework of the Act , and subsection 77(1) of the Act requires costs, if awarded, to be taxed by a Taxing Officer of the Supreme Court of NL on a party and party basis. Part of the global award of $65,000 included the value of the land expropriated ($8,417) and both disturbance damages and pre-hearing costs. [ 95 ]
Section 77 does not require costs to be on a party and party basis nor does it preclude the award of solicitor and client costs. [ 96 ] In Lynch 2020 , our Court of Appeal has given guidance on the
interpretation of s. 34(1) of the Expropriation Act . That provision provides that: 34.
(1) The board may award costs in respect of a hearing before it under this Act but the costs shall be taxed by a taxing officer of the Supreme Court in accordance with the scale in the Appendix to Rule 55 of the Rules of the Supreme Court, 1986 . [ 97 ] The Court of Appeal noted that while s. 34(1) refers to taxation of costs “in accordance with” a specified scale relating to party and party costs, the task of assessment was to be informed by the factors listed in rule 55.15 of the Rules of the Supreme Court, 1986 , S.N.L., 1986, c. 42 Sch. D .
The Court of Appeal stated that this suggests that the possibility exists of awarding solicitor and own client costs in expropriation proceedings. Therefore, the same possibility exists under
section 77 of the Act . [ 98 ] Guided by the principle that, in determining an award that a claimant should be fully compensated for legal and appraisal expenses subject to a requirement of reasonableness, the Shutes are entitled to their reasonable prehearing legal costs. [ 99 ] The Court of Appeal recognized that a board can treat appraisal expenses and legal professional fees as a subheading to the question of costs of the hearing or as a separate basis of compensation ( Lynch 2020 , at para. 144).
Although the Board’s award was stated to include compensation for “all legal and professional costs incurred prior to the hearing”, it is not clear how much of the award the Board was allocating for legal costs or how much legal costs were actually reasonably incurred. [ 100 ] I conclude that the Shutes shall be entitled to their reasonable pre-hearing legal costs to be taxed by a taxing master on a solicitor and client basis. Issue 7: Did the Board err in not awarding the Town costs of the hearing? [ 101 ] The Board awarded the Shutes party and party costs for the hearing.
The Town argues that the Board erred in failing to award the costs of the hearing to the Town. The Town’s position is that they made an offer that was higher than the Board’s award and that accordingly, the Board should have awarded the costs of the hearing to the Town. [ 102 ] The Board’s authority to award costs under subsection 77(1) of the Act is guided by subsection 77(2) of the Act .
While subsection 77(1) states that the Board “may” award costs, that power is coupled with a duty in subsection 77(2). [ 103 ] In subsection 77(2) of the Act the legislature has directed that where compensation awarded by a board is greater than the sum the expropriating authority offered in writing that the expropriating authority shall pay “ the costs and expenses of the hearing before the board and the fees of the board”. On the other hand, where the compensation does not exceed the sum offered, the legislature has directed that the person who refused the offer shall pay those costs.
In a circumstance where no sum was offered, then the Board has discretion when ordering costs. [ 104 ] The Town’s position is anchored in the Board’s conclusion at para 117 that the Town’s offer of $65,000 was a fair and reasonable award. However, as referenced above in para. 16, prior to the hearing, the Town’s ultimately offered $35,900. [ 105 ] While we know that the Board accepted that $8,417 as a value of the land, we do not know how much the Board had incorrectly awarded for disturbance damages.
Nor do we know how much of the award allowed for the Shutes’ prehearing legal fees and expenses. [ 106 ] We do not know how much the Shutes will be awarded on taxation until their pre-hearing costs are taxed, however, we know from the Record that Mr. Crosbie’s legal fees as of October 20, 2017 were estimated to be $35,425 (Record, Tab 48). The Shutes’ pre- hearing fees together with the $8,417 plus interest awarded for the expropriation is greater than the Town’s offer of $35,900. [ 107 ] Accordingly, pursuant to subsection 77(2) of the Act , the Shutes are entitled to their costs and expenses before the Board.
As a result, the Board’s Decision awarding the hearing costs to the Shutes is upheld.
SUMMARY AND DISPOSITION [ 108 ] The Shutes’ Notice of Appeal was filed within the 30 day period as prescribed by the Act . [ 109 ] The Board did not err in determining the value of the land expropriated from the Shutes.
The Board did not err in rejecting the Shutes’ claim for severance damages or in their consideration of the Notice of Abandonment. [ 110 ] The Board did err in awarding the Shutes non-pecuniary damages for disturbance and in their determination that they did not have authority to award solicitor and client costs. [ 111 ] The Shutes are entitled to $8,417 for the land and easement expropriated by the Town together with simple interest at a rate of 3.5% calculated from the date of vesting to the date of payment. [ 112 ] The Shutes shall be entitled to have their reasonable pre-hearing costs, to be taxed, on a solicitor client basis, paid by the Town.
[ 113 ] The Shutes shall be entitled to their costs at the hearing before the Board, to be taxed, on Column 3 of the Scale of Costs. [ 114 ] Given the mixed results for the parties before this Court, the parties shall bear their own costs on the Appeal. _____________________________ Philip Osborne Justice
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