The second decision in a trilogy of recent cases by xln10969


                        A CASE LAW UPDATE

The second decision in a trilogy of recent cases heard by the Ontario Municipal Board in
respect of compensation claims for injurious affection to lands trapped in the Parkway
Belt West Plan following Highway 407 takings has been handed down. In Base Ninety
Developments Limited v. Ontario, an unreported decision of the Ontario Municipal
Board released February 6, 2004, Board Member Makuch found for the claimants on all
issues in dispute, including a claim for injurious affection based on the reasoning
applied by Board Member Beccarea in Mikalda Farms Ltd. v. Ontario (2001), 75 L.C.R.
274 (“Mikalda Farms”). In both cases, the claimants were represented by Borden
Ladner Gervais LLP.

There were three issues in dispute in Base Ninety: the market value of the lands taken,
the extent of the injurious affection to those remaining lands to the south of the highway,
and the injurious affection (if any) to the north remaining lands. The Board accepted the
claimants’ position on all three issues.

With respect to the market value of the lands taken, the Board considered the value of
the lands without Highway 407 pursuant to section 14(4)(b) of the Expropriations Act.
The issue separating the parties was development timing. The respondent’s appraiser
relied on comparable sales east of Sixteen Mile Creek, while the subject property was
well west of the creek in the north-west extreme of the urban area. The Board accepted
the claimants’ position that, given the progression of municipal servicing from west to
east across North Oakville, and the demonstrated additional cost to extend services
across the Sixteen Mile Creek, the acreage rate for the subject property was higher than
the respondent’s appraised value. The Board awarded compensation based on the
claimants’ appraised value of $35,000.00/acre.

As for the injurious affection to the south lands, which were landlocked by the highway
taking, the claimants asserted a 2/3 reduction in value while the respondent conceded
only 50% reduction. After evidence from the claimants about the physical limitations
and increased costs to develop the south lands following the taking and the re-routing of
a creek tributary, the Board awarded a 2/3 reduction in value.

The main issue in the case, however, was the extent, if any, of injurious affection to the
north remaining lands, isolated from urban development in Oakville by Highway #407.
Prior to the decision of the Court of Appeal in Salvation Army, Canada East v. Ontario
(Minister of Government Services) (1986), 34 L.C.R. 193 (C.A.), the Board routinely
screened out the Parkway Belt West Plan in assessing compensation for injurious
affection to lands remaining within the Belt pursuant to section 14(4)(b) of the
Expropriations Act, R.S.O. 1990, c.E.26. With the Court of Appeal’s decision in
Salvation Army, the legal landscape changed. Referencing the wording of 14(4)(b) and
observing its application to the determination of “market value”, the Court of Appeal held
that section 14(4)(b) could not apply to claims for injurious affection. Based on the
stated multi-purpose rationale of the Parkway Belt West Plan as not only a
transportation/utility corridor, but also as an urban separator and green belt, the Court of
Appeal went on to indicate that the Parkway Belt West Plan was not the “development”
that would be appropriately screened out in any event pursuant to section 14(4)(b).

The claimants in Base Ninety relied heavily on the Board’s earlier decision in Mikalda
Farms. The claimants led evidence of extensive amendments and deletions of land
from the Parkway Belt West Plan which proved that, generally speaking in the east-west
links of the Belt, once the land requirements for the Highway (or other linear works)
became defined, land remaining within the Parkway Belt West Plan would regularly be
removed to permit development. Based on this historical review of the evolution of the
Parkway Belt West Plan, that was not available to the Court of Appeal in Salvation Army
seventeen years earlier, the Claimants submitted that a causal connection existed
between the Parkway Belt West Plan and the Highway acquisitions. The Board, based
on this information, agreed and found that a causal nexus did exist between the
Parkway Belt West Plan and the Highway 407 takings.

As in Mikalda Farms, the Board heard evidence that Highway 407 itself formed a “hard
edge” to development, limiting the urban boundary of the Town of Oakville. The
claimants led evidence that, in the absence of the physical barrier created by the
Highway, the urban boundary of Oakville would have extended northward to encompass
those remaining lands isolated from urban development north of the Highway. Rather
than screen out the Highway, the claimants asked the Board to assess the impact of the
Highway by considering the highest and best use of the lands “with” and “without” the

The impact of the Highway was dramatically demonstrated through the evidence of a
former planner from the Region of Halton, who testified that the urban boundary for
Oakville was in fact plotted to follow directly the proposed Highway 407 right-of-way.
The Board found that, as a fact, the north remaining lands were isolated from urban
development by the Highway and would, in the absence of Highway 407, have been
absorbed into the Oakville urban area. As for the Parkway Belt West Plan designation,
the Board accepted the claimants’ evidence that urban pressure would have caused the
lands to be released from the Parkway Belt West Plan without Highway 407.

The claimants were paid $128,000.00 pursuant to section 25 of the Expropriations Act.
Following two weeks of the hearing in 2002, the Board awarded total compensation in
the amount of $2,249,008.00, plus interest and costs.

By agreement, the time for appealing the decision in Base Ninety with respect to the
award of damages to the north parcel has been extended to April 30, 2004. As of the
date of writing, no appeal has been filed.

Frank J. Sperduti
Borden Ladner Gervais LLP

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