Russell Inns Ltd v Manitoba, 2016 MBCA 43

Citation: Russell Inns Ltd v Manitoba, 2016 MBCA 43 Date: 20160425 Docket: AI15-30-08434 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Marc M. Monnin Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner BETWEEN : RUSSELL INNS LTD. ) W. G. McFetridge and ) T. J. Bjornson (Owner) Respondent ) for the Appellant ) ) ) J. A. Mercury and ) D. A.

Barchyn - and - ) for the Respondent ) HER MAJESTY THE QUEEN IN RIGHT ) OF THE PROVINCE OF MANITOBA ) Appeal heard and ) Decision pronounced: (Authority) Appellant ) April 25, 2016 PFUETZNER JA (for the Court): [ 1 ] The Province of Manitoba appeals a decision of the Land Value Appraisal Commission (the Commission) certifying compensation for injurious affection caused to the respondent’s land as a result of a partial expropriation. [ 2 ] The appeal was dismissed with costs at the conclusion of the hearing with brief reasons to follow.

These are those reasons. [ 3 ] The respondent owns two adjacent lots of land in Russell, Manitoba (Lot 1 and Lot 2). The Province expropriated part of Lot 2 in accordance with The Expropriation Act , CCSM c E190, in order to make improvements to PTH 16. [ 4 ] The respondent continues to own Lot 1 and the remainder of Lot 2. Although contiguous, each of Lot 1 and Lot 2 is covered by a separate title at the Land Titles Office. [ 5 ] At the hearing before the Commission, the parties had agreed upon the value of the expropriated part of Lot 2.

The only task for the Commission was to determine the respondent’s claim for injurious affection to its remaining land in accordance with section 30(1) (

a) of The Expropriation Act which reads: Injurious affection in partial takings 30(1) Compensation for injurious affection where an authority expropriates part of the land of an owner shall consist of the amount of (

a) any reduction in market value of the remaining land of the owner caused by the expropriation of the part; [ 6 ] The issue for the Commission was whether the “remaining land” was the remainder of Lot 2, or whether the “remaining land” comprised both Lot 1 and the remainder of Lot 2. It was not contested that the remainder of Lot 2 in itself had little, if

any, market value. [ 7 ] At the hearing before the Commission, the Province called one witness, an appraiser, whose opinion was that the Commission should adopt a valuation methodology known as the “larger parcel theory” to determine the injurious affection to the respondent’s remaining land . Under this theory, the remainder of Lot 2 and Lot 1 would be viewed as one parcel. Using this methodology, the Province’s appraiser said there was no reduction in the market value of the remaining land as a result of the expropriation. [ 8 ] The Commission decided not to apply the larger parcel theory.

A review of the record and the reasons show that the Commission was not convinced that there was a sufficient evidentiary basis for its application in this case. In its reasons, the Commission commented that it would have expected “the Appraiser to provide more extensive evidence” and that “the case made for its use in this situation [was] inadequate”. The Commission concluded that the “remaining land” was the remainder of Lot 2, and that the expropriation had resulted in the remainder of Lot 2 having no residual value.

Compensation was awarded accordingly. [ 9 ] In reaching its conclusion, the Commission noted that the larger parcel theory was not in common use in Canada, and that the Province’s appraiser admitted this was the first time he had used this approach. It considered the jurisprudence provided by the Province, as well as an

article relied on by the Province’s appraiser. However, the Commission noted that there was ongoing debate regarding the weight to be given to the existing criteria for determining whether the use of the larger parcel theory is appropriate. At the hearing before the Commission, the parties disagreed on the approach to be taken to, and the importance to be placed on, the factor of “unity of use”.

The Province’s appraiser provided very little evidence regarding this factor, other than that Lot 2 and Lot 1 were subject to the same zoning by-law. [ 10 ] The essence of the Province’s position was that this Court should reweigh the evidence presented to the Commission, and choose the valuation methodology adopted by the Province’s appraiser in place of the methodology chosen by the Commission.

The Province also argued that the Commission did not adequately explain why it did not apply the larger parcel theory. [ 11 ] The parties agreed that the standard of review to be applied by this Court to decisions of the Commission is reasonableness; that is, whether the decision falls within “a range of possible, acceptable outcomes which are defensible in respect of the facts and law” ( Dunsmuir v New Brunswick , 2008 SCC 9 at para 47 , [2008] 1 SCR 190 ).

See also Kleysen v Manitoba , 2015 MBCA 54 , 319 ManR (2d) 171 ; Roeland v Manitoba , 2012 MBCA 37 , 280 ManR (2d) 86 ; Russell (Town) v Manitoba , 2011 MBCA 56 , 268 ManR (2d) 140 . [ 12 ] Methodology is a question of fact, and decisions as to methodology are directly within the expertise of the Commission. This Court will not intervene in decisions of methodology unless there has been a clear error in principle. See Russell at para 36. [ 13 ] When the decision of the Commission is read in the context of the record, the Commission adequately explained why it did not adopt the larger parcel theory.

After careful consideration of the facts and the law, it concluded that the Province had not provided sufficient evidence justifying the application of the larger parcel theory. [ 14 ] The decision of the Commission fell within the acceptable range. We are of the view that deference should be accorded to the Commission’s decision. [ 15 ] For the above reasons, the appeal was dismissed with costs in accordance with section 44(3) of The Expropriation Act . JA JA JA