MARK SHAMON, PAUL SHAMON v. VERA SHAMON, 2003 SKQB 155

2003 SKQB 155 Q.B.G. A.D. 20 02 No. 1642 J.C. S. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: MARK SHAMON, PAUL SHAMON and VERA SHAMON APPLICANTS - and - RURAL MUNICIPALITY OF BIGGAR No. 347 RESPONDENT Terry G. Hymers for the applicants M. Kim Anderson for the respondent JUDGMENT KLEBUC J. April 1, 2003 [ 1 ] The applicants applied under s.7 of The Municipal Expropriation Act, R.S.S. 1978, c. M-27 (the “ Act ”) for a determination of the compensation they are entitled for the land and improvements expropriated from them by the respondent.

Subsequent to launching the within application, the parties resolved all compensation issues except for the following: (1) the value of the applicants’ crop destroyed as a consequence of the expropriation; (2) the value of trees forming part of the applicants’ shelter belt destroyed as a consequence of the expropriation and consequential damages caused thereby to the applicants’ remaining land; (3) the applicants’ claim for costs.

[ 2 ] The respondent agrees the applicants are entitled to compensation for the aforementioned but not for the amounts claimed. They further submitted that in light of their cooperation throughout, no costs ought to be awarded to the applicants. The Facts [ 3 ] The applicants own and operate a substantial farm that includes a modern house and farm buildings comprising a farm yard situated on the NW¼ 19-37-14 West of the Third Meridian. The applicants reside at the farm yard which is located several hundred yards immediately south of a public roadway known as “Monarch Grid Road”.

Photographs entered in evidence confirm the farm site was shielded from Monarch Grid Road by a shelter belt of mature native Aspen Trees of substantial height and width that extended along the common border between the N½ of

section 19 and Monarch Grid Road. The NE¼ of

section 19 is also owned and farmed by the applicants. It also is located immediately south of Monarch Grid Road. [ 4 ] In May 2002, the respondent expropriated the most northerly 7.8 metres (25.59 feet) of land throughout the N½ of

section 19 (“the expropriated land”) for the purpose of widening Monarch Grid Road to accommodate the passage of large grain trucks transporting grain from farms to terminal elevators located at Unity and Wilkie, both being towns in Saskatchewan. The widening necessitated the destruction of a dense growth of trees on the expropriated land that formed part of a shelter belt, which protected the applicants’ farm yard from wind and from dust and noise generated by vehicles using Monarch Grid Road. Some of the trees destroyed were on the respondent’s road allowance.

They do not form part of the applicants’ claim for compensation. [ 5 ] The respondent also appropriated a “borrow area” of 1.98 acres forming part of the N½ of 19 as a source of soil required to widen Monarch Grid Road. This appropriation resulted in the applicants losing a mixed oat and rye forage crop seeded within the borrowed area. [ 6 ] To avoid the cost of calling viva voce evidence at a hearing the parties presented their evidence by means of affidavits.

Although conflicts of limited significance exist between the affidavit evidence submitted by parties, neither party chose to examine any of the affiants. [ 7 ] Regarding the crop loss claim, Mark Shamon deposed in his affidavit of September 30, 2002, that the costs of re-seeding the forage crop destroyed, in combination with the loss of forage therefrom during the following year, created a loss of $150.00 per acre.

Adel McLeod, a councillor for the respondent, deposed in her supplementary affidavit of October 1, 2002 that the cost of seeds needed to re-seed the borrow area is $49.96 and that the cost of seeding the same, assuming a third party is hired for such purposes, would be $26.76. She also opined that the applicants’ total loss is only $76.72 but never provided a value for forage lost during the year following the required re-seeding. Ms.

McLeod arrived at her estimates based on quotations obtained from Early’s Farm & Garden Centre Inc. and by referencing the Custom and Rental Guide 2002 for farm operations published by Saskatchewan Agriculture and Food. [ 8 ] With respect to the value of the trees lost due to the subject expropriation, Mark Shamon deposed in his affidavit of October 18, 2002 that he measured the area previously covered by the destroyed trees on the 7.8 metres of land expropriated and determined that the treed area extended 168 metres (551 feet) along the southern boundary of Monarch Grid Road.

He then provided his measurement to Lakeshore Gardenscapes Ltd. and asked it to estimate the cost of reestablishing the lost shelter belt by replanting mature trees on the remaining part of the farm yard. [ 9 ] Lakeshore Gardenscapes Ltd. carries on the business of supplying and planting trees. Rob Krahn, an employee of Lakeshore Gardenscapes, deposed in his affidavit of October 15, 2002 that 92 hybrid Poplar Trees were required to replace the destroyed trees and that the cost thereof, including labour to plant the same, would be $27,508.00 plus applicable taxes.

The planting would have to take place in the fall of 2002. [ 10 ] Ms. McLeod in her affidavit sworn on November 4, 2002 deposed that she contacted Bob Hunt of Hardy Plant Nursery at North Battleford, Saskatchewan regarding the replanting proposed by the applicants and that he suggested that Northwest Poplar Trees of five to seven feet in height be planted because they have a better survival rate and would reach 15 feet in approximately three years.

She obtained a price quotation from Hardy Plant Nursery to supply 92 Northwest Poplar Trees of six to seven feet in height for $1,877.28, taxes included. [ 11 ] The respondent offered to supply and plant the aforementioned Northwest Poplars at locations staked by the applicants. The applicants rejected the offer.

[ 12 ] In support of their application the applicants placed in evidence an appraisal of agricultural land prepared by Kurt J. Sawatzky, AACI, P. App., Pag., wherein he opined the value of the N½ of 19 is $445.00 per acre based on agricultural purposes being its highest and best use. He did not appraise the value of the trees lost or any damage to the remaining portion of NW¼ of 19 caused by the expropriation. The Law [ 13 ] The right of municipalities to expropriate land and their obligation to pay compensation therefor is codified in the Act . Of particular relevance are the provisions of ss. 7 , 9 and 13 of the Act , which reads as follows: 7

(1) Where the amount of compensation is not agreed upon. . .the compensation shall,. . .be determined by a judge, upon application to him by either party. . . . 9 In estimating the amount to which the claimant is entitled, the judge. . .shall consider and find: (

a) the value of the land and all improvements thereon as of the date of the deposit of the plan under

section 4; and (

b) the damage, if any, to the remaining land of the claimant; and from the amount so found the judge. . .shall deduct any increased value to the remaining land of the claimant by virtue of work done or to be done on the land taken. . . . 13 The compensation or damages that may be agreed upon or awarded for land taken or injuriously affected shall stand in the stead of the land and shall be subject to the limitations and charges, if any, to which the land was subject; and any claim to or encumbrance upon the land or to or upon any portion thereof, shall, as against the municipality, be converted into a claim to the money so agreed upon or awarded, or to a like proportion thereof. [ 14 ] The provisions s. 51(1) of The Highways Act, R.S.S. 1965, c. 27 , read substantially the same: 51(1) In estimating the amount to which the claimant is entitled the arbitrator shall consider and find separately as to the following: (

a) the value of the land taken and all improvements thereon; (

b) damage, if any, to the remaining property of the claimant; (

c) the original cost only of extra fencing that may be necessary by reason of the taking of the land.

[15] The approach underpinning the assessment of compensation following an expropriation was succinctly stated by Rand J.in Diggon-Hibben Ltd. v. The King, (SCC), [1949] S.C.R. 712, 4 D.L.R. 785 at p. 715 [S.C.R.]: . . .the owner at the moment of expropriation is to be deemed as without title, but all else remaining the same, and the question is whatwould he, as a prudent man, at that moment, pay for the property rather than be ejected from it. . . . This approach has been consistently applied by Saskatchewan courts. See Re Mitchener v. The Queen (1969), (SKCA), 66 W.W.R. 171, 70 D.L.R (2d) 218 (Sask.

C.A.); Ilnicki v. Buckland (Rural Municipality) (1982), (SK KB), 19Sask. R. 99, 25 L.C.R. 219 (Q.B.), Peifer v. Saskatchewan (1984), (SK KB), 33 Sask. R. 131, 31 L.C.R. 31 (Q.B.). Ofparticular note are Ilnicki and Peifer where the court considered whether trees lost due to an expropriation ought to be taken into accountwhen assessing the value of the land expropriated or assessing damages to the claimant’s remaining land caused by the expropriation.

Inthe latter case, the learned trial judge dealt with the issue as follows at paras. 15 and 16 where he said: [15] . . .I have indicated I felt the loss of the sewage mound and the nuisance value of additional snow and water should be consideredin estimating damage to the remaining property under s. 51(1)(

b) of the Act. As for the trees lost, by themselves, the law does not allowme to consider them included in the category of “damage to remaining property”. In Re Mitchener and The Queen (1968), (SK CA), 70 D.L.R. (2d) 218, our Court of Appeal adopted the rule laid down in Re Hinder and Metropolitan Toronto (1964), (ON CA), 45 D.L.R. (2d) 325, where it was held, that having received compensation on the highest and best use of the landtaken, the owner could not recover damages for injurious affection resulting from the loss of a screen of trees. That damage was coveredin the award made for the land itself.

This principle has been adopted by a number of Saskatchewan arbitrators including Maher, D.C.J.(as he then was), in Lloyd v. R.M. of Connaught #457 (unreported December 30, 1971) and Grotsky, J., in Ilnicki v. R.M. of Buckland#491, [1982] L.C.R. 219; (SK KB), 19 Sask. R. 99 at p. 227. [16] Accordingly, there is no basis for awarding the claimant the “replacement cost” of his tree belt and I therefore reject his claim inthat regard.

Having said that, it does seem to me that the Department’s appraiser was somewhat less than generous in valuing the treebelt at $500.00 given the magnificent stand of trees it clearly was. I would be inclined to increase that figure to $1,500.00. [16] A similar conclusion was arrived at by the trial judge in Ilnicki where at paras. 29 and 30 he summarized the claimant’sloss and then explained why she was without a remedy for damages under s. 9(b): [29] I am in sympathy with the position taken by the applicant respecting the loss of her trees. Many of them are very old and asdescribed by Mr.

Perry range in height from 20 to 60 feet and in diameter from 3" to 12". They not only act as a shelter belt but add tothe beauty of the land and area. The difficulties and the years involved in growing large trees in the province are well known. Butunfortunately, I am of the view that I must follow the rule laid down in Re Hinder and Metropolitan Toronto (1964), (ON CA), 45 D.L.R. (2d) 325, and, on determination of the value of the land taken on the basis of highest and best use, I am notpermitted to award damages for injurious affection resulting to remaining land resulting from loss of trees.

This principle was quotedwith approval by the Saskatchewan Court of Appeal in Re. Mitchener and The Queen (1968), (SK CA), 70 D.L.R. (2d)218. [30] Counsel for the applicant in urging me to allow compensation for the loss of trees relied on Cooper v. Regional Municipality ofYork (1977), 11 L.C.R. 37, which is clearly distinguishable. Damages for injurious affection arising from loss of trees was awarded inthat case under the provisions of the Expropriations Act, R.S.O. 1970, c. 154, and particularly s. 13(2)(

c) which permits an award toinclude damages for injurious affection. No similar provision exists in our Act. [17] In neither of the aforementioned cases was the court called upon to consider whether Hinder (Re Hinder and MetropolitanToronto (1964), 45 D.L.R. (2d) 325 (Ont. C.A. or Re Mitchener, supra) are limited to circumstances where a claimant receivescompensation for land taken based on a highest and best use that by its very nature contemplates the loss or sacrifice of improvementsforming part thereof and acceptance of consequential injurious affection to his or her remaining lands.

Consideration therefore must begiven to the ratios in Hinder and Mitchener and how they apply in the instant case. [18] In Hinder, the subject land comprised a gentleman’s estate with obvious commercial development potential. A portion ofthe estate was expropriated to facilitate the widening of a main roadway, known as Bathhurst Street, which involved the destruction of140 pine trees situated thereon that had screened the respondent’s residence from Bathhurst Street. The respondent claimed damages forinjurious affection resulting to his remaining land as a consequence of the trees taken.

The issue of compensation went before anarbitrator who awarded $61,750.00 based on evidence that established “that the highest and best use for the Bathhurst St. frontageexpropriated herein was for commercial or high density multiple dwelling purposes, and that of the remaining lands for use as a

gentleman’s estate, the use to which it was then being put.” The arbitrator also allowed damages for injurious affection of $20,500.00 for the remaining lands because its value as a gentleman’s estate was diminished by the destruction of the trees. [ 19 ] The Ontario Court of Appeal set aside the award of damages for injurious affection based on the loss of the trees for the reasons delivered by Schroeder J.A. at p. 334: In assessing the damages flowing from the loss of the screening and ornamental trees by estimating and allowing the replacement cost of the trees the Arbitrator applied the principle or measure of full restitution.

Quite apart from my view as to the incorrectness of the application of such a measure of damages in the circumstances existing here, I do not consider that the plaintiff is entitled to any award of damages for injurious affection by reason of the loss of the trees. If the highest and best use of the frontage property is that found by the Arbitrator and the expropriated owners enjoy the advantage which accordingly accrues to them, then their right to damages arising from the loss of screening and ornamental trees is wholly dissipated.

If they are to receive as the value of the land taken the existing value at the date of expropriation with its potentialities for development and use as a commercial site, then notionally they are in the position of owners who have erected or have consented to the erection on their lands of commercial buildings or high density multiple dwellings and must be treated accordingly .

The presence of such structures upon the lands bordering Bathurst St. would detract from the quality of the remaining land as a gentleman's estate to such a degree that the removal of the trees would cease to have any significance as an element of severance damage.

To borrow the words of John Heywood's old English proverb, the respondents cannot "both eat their cake and have their cake". [Emphasis added] [ 20 ] In my view, the Ontario Court of Appeal in Hinder never concluded that if a claimant was compensated for the land taken based on its highest and best uses the claimant is automatically precluded from recovering compensation for improvements lost or damages to his or her remaining lands caused by the taking.

Rather, it directed that one must look at the specific uses permitted by the highest and best use for the land upon which compensation was paid and then determine whether such permitted uses by their very nature undermine compensation claims under ss. 9(

a) or (b). If they do not, the claimant is entitled to seek compensation for improvements lost and damages to his or her remaining property. Mr. Justice Hall articulated the ratio in Hinder in Mitchener at p. 177 [W.W.R.]: In Re Hinder and Toronto Metropolitan Board the market value was found to be the value to the owner in that no prudent man would pay more for the property rather than be ejected even though it meant the loss of the trees. . . .

It is only in this sense that Hinder limits the right to recover compensation and damages for lost trees due to an expropriation . [ 21 ] In Mitchener , the City of Saskatoon expropriated 18.83 acres out of a 780 acre tract of farm land pursuant to The Highways Act, 1961, R.S.S. 1961, c. 25, s. 50(1)(a). The taking severed the claimant’s remaining land into two parcels, one of 380 acres with urban development potential and one whose highest and best use remained for agricultural purposes.

An arbitrator awarded the claimant $650.00 per acre for the land expropriated based on its highest and best use for urban development and $1,400.00 for access disturbance to the parcel whose best use remained for agricultural purposes. He awarded no damages for access disturbance to the 380 acres with commercial potential because the highest and best use ascribed thereto by its very nature contemplated interference with access.

On appeal, the appellant submitted, inter alia , that the respondent was not entitled to damages flowing to his parcel of agricultural lands because the 18.83 acres were expropriated at their commercial value and cited Hinder in support of its submission.

The Saskatchewan Court of Appeal rejected the submission and dismissed the appeal because, unlike in Hinder, “ [n]o prudent person in his position would sell an 18.83-acre strip for $650 an acre which he could always get, and accept the added inconvenience of having to go around it to farm his outlying parcels.” It applied Hinder , but only to the parcel with commercial potential. [ 22 ] In my opinion the aforementioned courts of appeal decisions merely provided definitive instructions regarding how the test outlined in Diggon-Hibben should be applied when assessing compensation due a claimant where less than the whole of her or his interest in land is expropriated.

More specifically, they contemplate an analysis that may be undertaken employing the following steps: 1. Pursuant to s.9 (

a) of the Act , determine what a prudent person would pay rather than be ejected from the expropriated lands. In most cases this will equal the highest and best use of the land expropriated and the value of any improvements thereon, including trees: Mitchener and Peifer . An exception arises where the value assigned to the land expropriated is based on a highest and best use and that by its very nature contemplates the destruction of an improvement, e.g., trees.

In such case, no additional value is to be assigned to lost improvements or consequential damages to the remaining land if a prudent person would have accepted compensation payable based on the expropriated land’s highest and best use: Hinder and Mitchener .

2. Assuming that the exception in Hinder does not apply, determine what damages the claimant is entitled to under s. 9 (b), if any, for injury caused to the claimant’s remaining land even if the claimant received compensation for the land taken based at its highest and best use. The following further question might be considered: Would a prudent person have sold the lands taken for the consideration received and accept the damage resulting to the balance of his or her lands without further compensation therefor? If the answer is “yes,” then no damages need be awarded under s. 9 (b).

If the answer is “no,” then consequential damages must be assessed. This approach was applied in Mitchener . 3. Consider whether the expropriation increased the value of the claimant’s remaining lands. [ 23 ] As previously noted, the learned trial judge in Ilnicki held that a claimant is not entitled to compensation for injurious affection to his or her remaining land under s. 9 (

b) of the Act because the Act does not specifically provide a remedy therefor while other legislation, such as the Expropriations Act , R.S.O. 1970, c. 154 does. A different conclusion was arrived at in Peifer and Mitchener where the claims were advanced under The Highways Act, R.S.S. 1965, c. 27 . In Peifer , the court allowed the claimant compensation for the nuisance caused by snow and water accumulating on the claimants’ remaining lands following the loss of his trees. In Mitchener , the claimant received compensation for access interference caused by the expropriation.

In my opinion, the provisions of the Act and The Highway Act are very similar and are both intended to have the same operational effect. In the result, I conclude that compensation for injurious affection now is available under s. 9 (

b) and 13 of the Act . ANALYSIS [ 24 ] The submissions by the parties give rise to the following three issues:

(1) What compensation is due the applicants for crop damage caused during the removal of soil from the borrow area?

(2) Are the applicants entitled to compensation under either s. 9(

a) and/or s. 9(

b) for the trees lost due to any expropriation of part of their lands?

(3) Are the applicants entitled to their costs?

(1) Compensation for crop loss [ 25 ] The applicants claimed compensation of $150.00 per acre for actual crop loss, the cost of re-seeding the forage crop lost and the loss of the forage they would have harvested in the following year. As between the minimal evidence submitted by the applicants and more persuasive evidence submitted by the respondent, I preferred the evidence of the latter save and except for its evidence regarding the cost of re-seeding the two acres comprising the borrow area.

It is unrealistic to suggest that a contractor would move equipment to the borrow area and re-seed the same for fee of approximately $54.00. In my view, the cost of the third party re-seeding the borrow area would be substantially more and that it is unrealistic to believe that anyone other than the applicants would perform such task. In order to adequately compensate the applicants for the time and equipment involved in re-seeding the borrow area, I award compensation in the amount of $200.00 for all losses incurred concerning the borrow area.

(2) Compensation for the trees lost [ 26 ] While compensation payable under s. 9(

a) and damages payable under s. 9 (

b) of the Act are distinct and mutually exclusive, their determination involves an appraisal process based on numerous common and interrelated factors. For the purposes of s. 9(

a) compensation payable for expropriated lands is an amount equal to its fair market value at the time of expropriation, including any improvements thereon. Such calculation would include a determination of the value of trees and other improvements comprising part of the expropriated lands. Their value is not a sum equal to their replacement cost but an amount equal to the difference between the value of the expropriated land with the trees and other improvements and its value without the same. This approach was applied in Ilnicki and Peifer.

In the former, the trees lost were assigned a nominal value of $104.00 based solely on their commercial value as cord wood. In the latter, the learned trial judge rejected the appraiser’s assessment of the value of the trees lost at $500.00 and awarded $1,500.00 on the basis that the appraiser failed to take into account their value.

[ 27 ] The calculation of damages under s. 9(

b) involves a determination of injuries to the claimant’s remaining lands resulting from an expropriation, less any benefits flowing to such lands as a result of the expropriation. The exceptions outlined in Hinder and applied in Mitchener also apply . [ 28 ] The appraisal submitted in evidence by the applicants does not address the value of the expropriated lands with and without the subject trees, or what injury, if any, resulted to the applicants’ remaining lands following the expropriation. Therefore, the appraisal is of little value for the purposes of ss. 9 (

a) and (b). The parties recognized the appraisal’s shortcomings and that the cost of obtaining further appraisals would add substantially to their costs without resolving the issues at hand. As counsel perceptively and accurately noted, the cost of further appraisals would exceed any compensation payable under ss. 9(

a) and (b). Given the circumstances they attempted to quantify the value of the trees lost for the purposes of ss. 9 (

a) and (

b) by determining the costs of replanting replacement trees on the applicants’ remaining land for the purpose of replacing that portion of the applicants’ shelter belt lost due to the expropriation. [ 29 ] While an appraisal addressing the requirements of ss. 9 (

a) and (

b) would have been desirable, I appreciate the practical view taken by the parties and will make the necessary determinations based on evidence before me. In Peifer , the court awarded additional compensation for the trees lost without giving specific reasons. [ 30 ] The evidence led by the parties regarding the replacement cost of the trees is set out above.

In my opinion, the approach taken by the respondent regarding the replacement cost of corporate trees is more realistic than one proposed by the applicants but it also falls short because it does not take into account that not all of the trees planted would survive or that the applicants would have to water them and till the soil between them until the trees became well-established.

Given all these factors, I am well satisfied that a prudent person would have paid an additional $3,000.00 in recognition of the value of the trees lost rather than be evicted from the expropriated lands, particularly if the prudent person is using the trees as part of the shelter belt protecting his or her farmyard from prevailing winds, road noise and road dust. An additional factor is the aesthetic and practical benefits of trees, including the benefit of birds attracted thereto, which currently appears to attract greater value and appreciation than they did in the early 1980's.

I am also satisfied that Hinder does not apply as the highest and best use of the land taken was for agricultural purposes, being the use for the entire parcel immediately before the taking; and nothing before me suggests that any permitted usage associated therewith directly or implicitly contemplates a removal of the subject trees. Nor is the compensation payable on such highest and best use of a nature that a prudent person would accept even if it meant the loss of trees and damages to his or her remaining lands.

Accordingly, for the purposes of s. 9 (a), I assess the value of the trees at $3,000.00. [ 31 ] For the purposes of s. 9 (

b) I accept the applicants’ evidence that the loss of a portion of their shelter belt has adversely affected the value of their farmyard. No prudent person would sell a strip of his land used for a shelter belt at a price he could always get and accept the resulting inconvenience without additional compensation. However, I am also satisfied that a substantial portion of any compensation due under s. 9(

b) is covered by the value assigned to the trees for the purposes of s. 9(a). Given my conclusion and the absence of cogent evidence supporting specific damages to the applicants’ remaining land, I award damages of $300.00 in recognition that the trees lost upon the expropriation injuriously affected the applicants’ remaining land by increasing its exposure to wind, road dust and road noise and by depriving the applicant of the aesthetic benefits of the trees lost. [ 32 ] I further conclude that the applicants are entitled to their party and party costs based on Column 3 of the Tariff of Costs. J.