Supreme Court of Canada
Judson v. Governors of University of Toronto, [1972] S.C.R. 553
Date: 1971-12-20
Walter B. Judson and Marjorie E. Judson Appellants;
and
The Governors of the University of Toronto Respondent.
Edward Clair Dunn and Laura May Dunn Appellants;
and
The Governors of the University of Toronto Respondent.
1971: October 27, 28; 1971: December 20.
Present: Judson, Ritchie, Hall, Spence and Pigeon JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Expropriation—Compensation—Interest—Plan registered under old Act—New Act enacted before arbitration hearing—Applicability of certain provisions of new Act—The Expropriation Procedures Act, 1962-63 (Ont.), c. 43, ss. 8(3), 14(1)—The Expropriations Act, 1968-69 (Ont.), c. 36, ss. 13(2)(d), 15, 25(4), 34(1), 46(1).
The respondent expropriated the properties of the appellants at Scarborough by registration of a plan of expropriation on April 9, 1965. An arbitration hearing before the Ontario Municipal Board did not take place until March 1969 and, in the meantime, the appellants were permitted to remain in possession. At the time the plan was registered the provisions of The Expropriation Procedures Act, 1962-63 (Ont.), c. 43, governed expropriations in Ontario and before the date of the hearing, The Expropriations Act, 1968-69 (Ont.), c. 36, had been enacted. Section 46(1) of the new Act made certain sections of that Act applicable to the expropriations in question.
Section 13(2) (d) of the new Act provides that compensation payable to the owner shall be based upon any special difficulties in relocation. The view taken by the Board was that when this section is read in conjunction with s. 15 it should be taken as meaning that the owner is to be entitled to such additional compensation as would be necessary to enable him to obtain accommodation equivalent to that which he has given up and that this compensation should be determined as of the date of the
[Page 554]
hearing. The Court of Appeal was unanimously of opinion that the “additional amount of compensation” contemplated by s. 15 was to be determined as of the date of registration of the plan and that there was no justification for making an additional award based on the estimated increase in the value of comparable property between that date and the date of hearing.
A second question was raised by reason of the fact that the Board allowed interest on the sum awarded in respect of each property, apart from the amounts for additional compensation under s. 15, moving, legal and survey costs, at the rate of 6 per cent per annum from the date of registration of the plan and at the same rate in respect of the balance of the award as from the date of the Boards’ decision. The majority of the Court of Appeal set aside these interest awards and in so doing purported to apply the provisions of s. 34(1) of the new Act.
Held (Judson J. dissenting in part): The appeal should be allowed in part.
Per Ritchie, Hall, Spence and Pigeon JJ.: It was accepted that the effect of s. 13(2)(d) and s. 15 of the new Act is to provide for such additional compensation as is necessary to enable the owner to relocate in premises equivalent to the accommodation which has been expropriated, but that compensation was to be determined “as of the date of the registration of the plan”, which was the date of determining compensation as provided under s. 12 of the old Act. There was no evidence to support a grant of additional compensation as of such date. Accordingly, the Court of Appeal was correct in holding that the allowances made by the Board for additional compensation under s. 15 should be deleted.
However, the majority of the Court of Appeal erred in regard to the disallowance of interest. Section 34(1) of the new Act provides: “Subject to subsection 4 of section 25, the owner… is entitled to be paid interest …at the rate of 6 per cent a year calculated from the date the owner ceases to reside on …the lands.” In making s. 34(1) applicable to the present circumstances by the terms of s. 46(1), the Legislature adopted s. 25(4) in so far as the provisions of that section relate to the time for which interest is to be calculated, which is the same as that of s. 8(3) of the old Act. The purpose and effect of both the latter section and
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s. 25(4) of the new Act was to penalize an expropriating authority who has not served the offer of compensation within the required time (as was the case here) and the penalty enacted by both sections is payment of interest calculated from the date of registration of the plan.
The rate of interest should be fixed in accordance with the law as it existed when the expropriation was made. Therefore, the rate should be 5 per cent as provided under s. 14(1) of the old Act and not 6 per cent as provided under s. 34(1) of the new Act. The amounts of compensation for the cost of moving and the legal and survey costs should bear interest at 6 per cent from the date of the award.
Per Judson J., dissenting in part: On both issues involved—the disallowance of additional compensation and the disallowance of interest—the majority reasons delivered in the Court of Appeal were correct and, accordingly, the appeal should be dismissed.
APPEAL from a judgment of the Court of Appeal for Ontario[1], varying an order of the Ontario Municipal Board, whereby compensation was awarded to the appellants in respect of properties expropriated for purposes of the University of Toronto. Appeal allowed in part, Judson J. dissenting in part.
James A. Taylor, Q.C., and James Wallace, for the appellants.
Pierre Genest, Q.C., and William G. Scott, for the respondent.
JUDSON J. (dissenting in part)—I agree with and would adopt the majority reasons delivered in the Court of Appeal on both the issues involved in this appeal—the disallowance of additional compensation and the disallowance of interest.
I would dismiss the appeal.
The judgment of Ritchie, Hall, Spence and Pigeon JJ. was delivered by
RITCHIE J.—This is an appeal from a judgment of the Court of Appeal of Ontario (Laskin
[Page 556]
J.A., as he then was, dissenting in part), which varied an order of the Ontario Municipal Board (hereinafter referred to as the “Board”), made on May 29, 1969, whereby compensation was awarded to the appellants in respect of their properties at Scarborough which were expropriated for the purposes of the University of Toronto. The Judson property consisted of a three-acre rectangular lot, whereas the Dunn property, which was also rectangular in shape, contained approximately two acres. There were dwellings on both properties and on the Judson land there was also a barn.
At the request of counsel these applications were heard jointly by the Board whose award may be summarized as follows:
|
|
Mr. & Mrs. |
Mr. & Mrs. |
| Market value, house and lot................................. |
$ 9,500.00 |
$ 19,000.00 |
| Market value, surplus lands................................. |
20,100.00 |
12,500.00 |
| Special value to owner......................................... |
1,000.00 |
|
| 5 per cent of market value of residential portion................................................................................ |
975.00 |
950.00 |
| Improvements not reflected in market value...... |
1,000.00 |
|
|
|
$ 42,575.00 |
$ 32,450.00 |
| Additional compensation, Section 15................ |
9,200.00 |
9,000.00 |
| Moving costs......................................................... |
500.00 |
300.00 |
| Legal and survey costs and other non‑recoverable expenditures............................ |
475.00 |
450.00 |
|
|
$ 52,750.00 |
$ 42,200.00 |
The plan of expropriation was registered on April 9, 1965, but the hearing before the Board did not take place until March 1969. In the meantime, both the Dunns and the Judsons were permitted to remain in possession paying neither rent nor taxes and using and enjoying their prop-
[Page 557]
erty as fully and to the same extent as it had been used and enjoyed by them before expropriation.
The questions to be determined in this appeal arise out of the fact that when the plan was registered in April 1965, the provisions of The Expropriation Procedures Act, 1962-63 (Ont.), c. 43, governed expropriations in the Province of Ontario and that before the date of the arbitration hearing, The Expropriations Act, 1968-69 (Ont.), c. 36, had been enacted. Like Mr. Justice Schroeder, whose reasons for judgment were adopted by the majority of the Court of Appeal, I think it convenient to refer to the former statute as “the old Act” and to the latter as “the new Act”.
I think it desirable at the outset to consider the provisions of s. 46(1) of the new Act which read as follows:
46. (1) This Act applies in respect of expropriations for which a plan has not been registered under section 4 of The Expropriation Procedures Act, 1962-63 before this Act comes into force, and an expropriation for which a plan has been registered under section 4 of the said Act before this Act comes into force shall be continued in accordance with The Expropriation Procedures Act, 1962-63, except that where the compensation has not been agreed upon between the parties and no evidence has been heard by a tribunal under The Expropriation Procedures Act, 1962-63, other than the board of negotiation, sections 13 to 21, 23, 24, 29, 33, 34, 35 and 42 apply thereto.
In my view, the effect of this section in the circumstances here disclosed is that the expropriations are governed by the old Act save in so far as those sections may be inconsistent with the sections of the new Act enumerated at the end of s. 46(1). This means that sections 13 to 21, 23, 24, 29, 33, 34, 35 and 42 of the new Act apply to the expropriations here in question, but that in all other respects those expropriations are controlled by the provisions of the old Act.
The values fixed by the Board of $42,575 for the Judson property and $32,450 for the Dunn property, as at the date of expropriation were
[Page 558]
not questioned in the Court of Appeal or in this Court, but the Board awarded additional compensation in the form of an allowance which was designed to reflect the increase in property values between the date of the registration of the plan and the date of the hearing. This additional award was based on the assumption that the value of comparable property in Scarborough had increased at the rate of 1 per cent per month so that the increase of 47 per cent of the market value of the houses and lots formed the basis for determining the amount of additional compensation.
In making allowance for this increased valuation factor, the Board relied upon the interpretation which it placed on s. 15 of the new Act which reads as follows:
15. Upon application therefor, the Board shall, by order, after fixing the market value of lands used for residential purposes of the owner under subsection 1 of section 14, award such additional amount of compensation as, in the opinion of the Board, is necessary to enable the owner to relocate his residence in accommodation that is at least equivalent to the accommodation expropriated.
(The italics are my own.)
Section 13(2) (d) of the new Act provides that:
13. (2) Where the land of an owner is expropriated, the compensation payable to the owner shall be based upon,
(d) any special difficulties in relocation,.
and the view taken by the Board was that when this section is read in conjunction with s. 15 it should be taken as meaning that the owner is to be entitled to such additional compensation as would be necessary to enable him to obtain accommodation equivalent to that which he has given up and that this compensation should be determined as of the date of the hearing.
The Court of Appeal was unanimously of opinion that the “additional amount of compensation” contemplated by s. 15 was to be determined as of the date of the registration of the
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plan and that there was no justification for making an additional award based on the estimated increase in the value of comparable property between that date and the date of the hearing.
In the course of his reasons for judgment delivered on behalf of the Court of Appeal and reported in 11 D.L.R. (3d) 22, Mr. Justice Schroeder pointed out at p. 26:
It is well settled that unless the statute empowering the compulsory taking of lands makes specific provision for such a date, the property is to be valued as of the time of the taking ...
The provisions of the new Act relative to the determination of the date of fixing compensation (s. 10) are not made applicable to the present proceedings by s. 46 and it therefore appears to me that the governing legislation must be found in the old Act which provides, by s. 12, that, in circumstances such as the present, “the compensation… shall be determined as of the date of the registration of the plan...”.
I accept the fact that the effect of s. 13(2) (d) and s. 15 of the new Act is to provide for such additional compensation as is necessary to enable the owner to relocate in premises equivalent to the accommodation which has been expropriated, but in my view that compensation is to be determined “as of the date of the registration of the plan” and, as Mr. Justice Schroeder has said at p. 27:
There is no evidence whatever to support an application for or a grant of additional compensation as of April 9, 1965, in accordance with the provisions of s. 13(2) (d) and s. 15 of the new Act.
I would agree with the Court of Appeal for this reason alone that the allowances made by the Board for additional compensation under s. 15 of the new Act should be deleted, but I also agree with the other reasons given by Mr. Justice Schroeder for setting aside this part of the Board’s
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decision, and I would adopt the following passage from his reasons for judgment at pp. 27 and 28 of the report:
The matter may be stated in another way. Save as otherwise expressly provided, all the elements of compensation are determinable at one time, and in the present case as of the date of registration of the plan. Accordingly, any rise in market values as of the date of the hearing is not a relevant factor in determining the compensation payable to the owners. There is no occasion for an elaboration of the meaning of the words “any special difficulties in relocation” appearing in s. 13(2)(d) of the new Act, but it may be stated that these words do not comprehend a rise in market values after the date of which compensation is to be fixed. There is no evidence to support an additional allowance on any other ground, hence whether s. 13(2) (d) is read distributively or conjunctively, the result must be adverse to the claimants’ contention.
The second question raised by this appeal arises out of the fact that the Board. awarded interest on the sums of $42,575 and $32,450 at the rate of 6 per cent per annum from the date of the registration of the plan and at the same rate in respect of the balance of the award as from the date of the Board’s decision.
In setting aside these awards of interest, the majority of the Court of Appeal purported to apply the provisions of s. 34(1) of the new Act which read as follows:
34. (1) Subject to subsection 4 of section 25, the owner of lands expropriated is entitled to be paid interest on the portion of the market value of his interest in the land and on the portion of any allowance for injurious affection to which he is entitled, outstanding from time to time, at the rate of 6 per cent a year calculated from the date the owner ceases to reside on or make productive use of the lands.
In reliance on his interpretation of this section, Mr. Justice Schroeder concluded at p. 28 that:
It is made abundantly plain that an owner who continues to reside on or make productive use of the lands expropriated is not entitled to an allowance of
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interest on compensation during the period in which he resides upon or makes productive use of the land, but only from the time that he ceases to enjoy such use. Here both respondents were still in possession and enjoyment of the lands at the date of the hearing. It is manifest, therefore, that they can only be allowed interest from the date that they give up possession of the property down to the date of payment of the compensation awarded.
With the greatest respect, it appears to me that in applying s. 34(1) to the present circumstances, Mr. Justice Schroeder failed to give full effect to the opening words of that section which make those provisions subject to those of subs. 4 of s. 25 of the new Act which reads as follows:
25. (4) If any registered owner is not served with the offer required to be served on him under subsection 1 within the time limited by subsection 1 or by an order of a judge under subsection 3 or by agreement, the failure does not invalidate the expropriation but interest upon the unpaid portion of any compensation payable to such registered owner shall be calculated from the date of registration of the plan.
In making s. 34(1) applicable to the present circumstances by the terms of s. 46(1), the Legislature, in my view did no more than adopt s. 25(4) in so far as the provisions of that section relate to the time from which interest is to be calculated which is the same as that provided by s. 8(3) of the old Act, but I do not think that the provisions of s. 25(1), whereby the time limited for service of the offer is fixed at three months, or those of s. 25(3) which relate to the extension of that time, were intended to be incorporated in s. 34(1) as it is made to apply to these circumstances by s. 46(1).
By s. 8(1) of the old Act, which was in force at the time of the present expropriations, the time limited for the service of the offer was within six months after the date of the registration of the plan and I would not impute to the Legislature an intention to impose an interest penalty under s. 25(4) of the new Act for failure to serve the notice within three months (under s. 25(1)) in
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the case of an expropriation which was effected at a time when the period limited for service was fixed at six months. No issue arises in this regard in the present case because the offer was not served until seven months after the expropriation, but the circumstances which I have indicated serve to illustrate the fact that the penalty section applicable in the present case is s. 8 of the old Act, and specifically 8(3) which reads:
8. (3) If the offer required to be served under subsection 1 is not served within the time limited by subsection 1 or by an order of a judge under subsection 2, interest upon any compensation payable to the registered owner shall be calculated from the date of registration of the plan.
The purpose and effect both of this section and of s. 25(4) of the new Act is in my opinion to penalize an expropriating authority who has not served the offer within the required time and the penalty exacted by both sections is payment of interest calculated from the date of the registration of the plan. Unlike Mr. Justice Schroeder, I do not think that the use of the word “calculated” rather than the word “paid” in the last Une of these sections alters the penal character of the interest provision and I agree with Mr. Justice Laskin when he says, in the course of his dissenting opinion at p. 34:
…whether resort be had, because of the facts, to s. 8(3) of the old Act or s. 25(4) of the new, in either case the same impact is made on s. 34; its generality must yield to the particular provision so far as concerns the date from which interest is calculated.
I would also adopt the views expressed by Mr. Justice Laskin at pp. 33 and 34 where he says:
It is thus evident that an expropriated owner is entitled to interest on the relevant amount of compensation only from the time he surrenders possession, if a timely offer of compensation is made; and if a timely offer is not made, whether or not possession is surrendered, the statute itself fixes the date from which interest must be paid. Since it is left to the expropriating authority both to make the offer of compensation and to seek possession, its delay in either or both respects cannot reasonably be treated as irrelevant merely because it gives an advantage to the expropriated owner which would
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have been denied under principles derived from different legislation than that now in force. Both the old and the new Act are express on the consequences of failure to make a timely offer of compensation. The two Acts, as their legislative history plainly shows, were designed (the latter improving in this respect on the former) to bolster the position of an owner of land as against an expropriating authority. I do not find therefore any equity in the statute that would warrant avoidance of its terms in favour of a defaulting expropriating authority. It must be remembered too that the value of the land is frozen as of the date of taking, and this is a relevant factor to be weighed in favour of the claimant.
As I take the view that interest on the value awarded as of the date of expropriation should run from the date of the registration of the plan, I think also that the rate of interest should be fixed in accordance with the law as it existed when the expropriation was made, and in my view this is the rate which the tribunal determining compensation was authorized to allow under the provisions of s. 14(1) of the old Act which read as follows:
14. (1) Subject to subsection 3 of section 8, the tribunal determining compensation may allow interest on the amount of compensation at the rate of 5 per cent per annum from such date as is fixed by the tribunal.
I regard the charging of interest as being one of the elements of compensation and as all these elements are determinable at one time, I take the view that the award of compensation should bear interest at the rate which was effective at the date when the compensation was fixed, i.e. the date of the registration of the plan).
Having regard to all the above, I am of opinion that the award of $42,575 to the Judsons and $32,450 to the Dunns should be confirmed and should bear interest at the rate of 5 per cent from the date of registration of the plan. As I have indicated, I am in agreement with the Court of Appeal for Ontario that the awards of additional compensation made by the Board in purported compliance with s. 15 of the new Act, should be set aside. The small amounts which
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remain as compensation for the cost of moving and the legal and survey costs will bear interest at 6 per cent from the date of the award.
In the result the appeal is allowed in part. As the appellants have achieved substantial success, they should have their costs of this appeal.
Appeal allowed in part with costs, JUDSON J. dissenting in part.
Solicitor for the appellants: James A. Taylor, Toronto.
Solicitors for the respondent: Cassels, Brock, Toronto.