March 30 , 2005, E.C.B. No. 35/91/256

REASONS FOR DECISION

1.  INTRODUCTION

[1] This application involves a partial taking from two properties adjacent to the Trans Canada Highway (the "highway") at the intersection of the highway and Dallas Road, near Kamloops, British Columbia. At all relevant times, the claimant, Golden Valley Golf Course Ltd., was the registered owner of the lands described as:

PID: 010-557-521
Lot 2, Section 5, Township 20, Range 16, West of the Sixth Meridian,
Kamloops Division Yale District, Plan 4403 ("Lot 2")

PID: 009-429-026
Lot 4, Section 4, Township 20, Range 16, West of the Sixth Meridian,
Kamloops Division Yale District, Plan 4403 ("Lot 4")

(Collectively, the "property")

[2]  On January 4, 1990, the respondent Ministry of Transportation and Highways ("MoTH") informed the claimant of its intention to acquire a portion of the property for the purpose of widening the highway from two to four lanes.

[3]  Prior to the taking, the two properties were contiguous and contained 12.44 acres. The western portion of the lands, on Lot 2, was occupied by a Petro Canada gasoline station and convenience store ("Petro Canada"), with paved access driveway and parking area. The eastern portion was vacant land except for a single family residence used as revenue property.

[4]  On July 25, 1990, the parties finalized Section 3 Agreements for the transfer of 2.43 acres to the respondent. The respondent paid the claimant an advance payment of $127,000 plus an additional payment of $135,000, the characterization of which is an issue in dispute, as discussed below.

[5]  The claimant filed an Application for Determination of Compensation on July 15, 1991, and the respondent filed its Reply on August 19, 1991. The board set dates for the compensation hearing for July 22 through August 2, 1996. However, on November 22, 1995, the claimant filed a Notice of Discontinuance to which the respondent objected. The claimant's purpose in filing the Notice was to accept the total payment of $262,000 in satisfaction of the taking. This disputed Notice resulted in two decisions of the board: Golden Valley Golf Course Ltd. v. Minister of Transportation and Highways (1996), 59 LCR 67 and (1998), 65 LCR 151; and, a decision of the Court of Appeal: Golden Valley Golf Course Ltd. v. The Queen in right of British Columbia; Expropriation Compensation Board, Intervener (2001), 73 LCR 81, which determined that the claimant was not entitled to discontinue.

[6]  Accordingly, the board hearing was reconvened and proceeded on October 4, 2004 and was heard over seven days, completing on October 15, 2004. The witnesses for the claimant were Scott Bianco, a principal of the corporate claimant; Michael Flynn of Flynn Mirtle Moran, Accredited Appraisers, who was qualified to give expert opinion evidence in the area of property appraisal; and Brad Parker, engineer-in-training. The witnesses for the respondent were Danny Grant of Interwest Property Services (1991) Ltd., who was qualified to give expert opinion evidence in the area of property appraisal; Barry LeBlond, former MoTH project manager; Frederick Menu, former MoTH property agent; and Julian Malinsky, MoTH district manager. During the course of the hearing the panel took a view of the property and the surrounding area.

2.  BACKGROUND

[7]  The claimant corporation was incorporated in 1964 by Paul Bianco, who died in May 2003. Sometime in the 1960s the claimant acquired Lot 2 and operated a golf course until sometime in the 1970s. Mr. Bianco considered developing a shopping centre on the site and between 1973 and 1981, he received letters of intent from various businesses to lease space in the proposed shopping centre. In October 1980, the claimant obtained a report from Thomas Consultants Inc., Management and Development Consultants examining the feasibility of retail development in the Dallas area and recommending development of a shopping centre on the claimant's property.

[8]  In 1981 the claimant purchased the adjoining Lot 4, to the east, which also abutted the highway on the northern boundary. There was a residence on the southeast corner and the remainder of the lot was vacant. The topography of Lot 2 was fairly flat. However Lot 4 banked steeply at its eastern boundary.

[9]  The site, Lots 2 and 4, as a whole was bounded by the highway to the north, Dallas Road to the West and South, and Bogetti Road to the East. Access to the highway was at the Dallas intersection. Access to the site for local traffic was from Dallas Road and Bogetti Road.

[10]  In 1981 the dividing line between Lots 2 and 4 was marked by Juniper Creek. The claimant diverted this creek through an underground culvert which joined into a storm drainage system at the northern boundary of the property. The old creek bed was filled and the land over the culvert was compacted and leveled, so that the topographical boundary between the lots was indistinguishable.

[11]  On January 4, 1990, the respondent informed the claimant, through its primary shareholder Mr. Paul Bianco, ("Mr. Bianco") of its intention to acquire a portion of the property.

[12]  On April 25, 1990, the respondent's property agent, Frederick Menu ("Mr. Menu"), advised the claimant that the estimate of compensation from the appraiser Danny Grant ("Mr. Grant") was $262,000 and prepared agreements under s.3 of the Expropriation Act for the claimant's signature.

[13]  On April 27, 1990, Mr. Bianco signed the two Section 3 Agreements on behalf of the claimant. On May 1, 1990, at Mr. Bianco's request, Mr. Menu wrote a letter to Co-Operative Trust (a charge holder over Lot 2) stating that Mr. Bianco had agreed to transfer property to the Ministry and that the Ministry had agreed to pay him $262,000. On May 9, 1990, claimant's counsel forwarded plans and the Section 3 Agreements to Mr. Menu on the condition that the Ministry forward the sum of $262,000.

[14]  On June 25, 1990, Mr. Menu received an appraisal report from Mr. Grant (dated April 1990) which provided a final estimate of compensation of $127,000. On the same day, Mr. Menu advised Mr. Bianco of the discrepancy between the ini tial estimate and the completed appraisal.

[15]  On June 28, 1990, Mr. Menu wrote to the claimant's counsel indicating that two errors had come to light. First, Mr. Grant was wrong in his estimate of value for compensation payable being $262,000, and that he had revised his opinion in an appraisal report with a final estimate of compensation payable being $127,000. Second, Mr. Menu had erred in stating that an appraisal report had been completed when in fact it was an estimate of an appraisal. Mr. Menu suggested two options: either proceed with the expropriation process pursuant to s.6 of the Act or proceed by agreement to transfer pursuant to s.3 of the Act.

[16]  On July 10, 1990, Mr. Bianco met with MoTH representatives, including its solicitor, and came to an agreement concerning the acquisition. The terms of that agreement are set out in a "Without Prejudice" letter dated July 11, 1990, from the respondent's solicitor to the claimant's solicitor.

[17] Further to the agreement of July 11, 1990, on July 20, 1990, the claimant granted a mortgage to the respondent in the amount of $135,000 and on July 24, 1990, the mortgage was registered in the Land Title Office against Lot 4.

[18]  Further to the agreement of July 11, 1990, on July 25, 1990, the respondent wrote to the claimant's solicitors enclosing, among other things:

a) Notice of Advance Payment (Form 8);
b) Advance payment cheque in the amount of $127,000;
c) Advance payment cheque in the amount of $135,000, secured by the mortgage in favour of the respondent registered against Lot 4.

[19]  The mortgage provided as follows:

It is further agreed and understood between the Parties that the sum secured of One Hundred and Thirty-Five Thousand ($135,000.00) Dollars is security in respect of an advance payment made in accordance with the Expropriation Act, 1987, S.B.C. c. 23 sections 3 and 19 in the amount of $262,000.00. In the event that the Expropriation Compensation Board, subject to any subsequent appeals, awards compensation in excess of $262,000 this mortgage will be discharged. In the event compensation awarded, subject to any subsequent appeals is less than $262,000.00 and the Board, in accordance with the Act section 29(2) certifies the amount of the difference between $262,000.00 and the award, that amount is the debt due and payable to the mortgagee forthwith.

Although the mortgage was subsequently discharged against Lot 4 and a new mortgage registered against different lands, during the hearing the parties stipulated that the conditions of the original mortgage continued to apply to the payment of $135,000.

[20]  The Section 3 Agreements included the following term: "Compensation for the transfer for the said lands shall be determined by the Expropriation Compensation Board."

[21]  During the course of the parties negotiations, on June 30, 1990, the City of Kamloops (the "City") issued a Notice of Intent to Construct a Sanitary Sewer Collection System in the City of Kamloops. On August 21, 1990, the City adopted By-Law No. 14-1-111, "A By-Law to Construct a Sanitary Sewer Collection System in the City of Kamloops as a Local Improvement Pursuant to the Provisions of Part 16 of the Municipal Act, as Amended, and to Authorize the Borrowing of the Capital Cost Thereof."

[22]  Subsequent to the signing of the Section 3 Agreements, the respondent retained another appraiser, D. M. Flynn of Flynn Mirtle Moran, to provide an appraisal. In his report dated November 10, 1990, Mr. Flynn estimated the market value of the taking and the diminution in value to the remaining lands, as of April 27, 1990, at $286,000, which he amended in this hearing to $279,000.

[23]  Although there was initial disagreement over the appropriate valuation date, the parties agreed at the hearing to a valuation date of July 25, 1990.

[24]  The "project" which necessitated the taking was the widening of the Trans-Canada Highway from two lanes to four lanes. The project was commenced in July 1990 and included the alteration of traffic patterns to preclude left hand turning at the intersection of the highway and Dallas Road, construction of a new two lane road, Nina Place, with highway access and egress ramps for traffic travelling west, and construction of an overpass over Nina Place. The works involved elevating the highway by approximately 30 - 35 feet, on a gradual slope going east from the intersection of the highway and Dallas Road, along the northern boundaries of Lots 2 and 4. As the claimant's property was not visible to westbound traffic in advance of the exit ramp, highway signage was erected to advise the travelling public of the Petro-Canada location.

[25]  The works also involved construction of a new storm drainage mainline under Nina Place to catch surface drainage from Nina Place, the Dallas Road properties and the claimant's properties. The previous storm drainage system was capped off.

[26]  The respondent's "taking" consisted of a strip of land across the northern portions of Lots 2 and 4, adjacent to the highway, for the highway widening and a strip of land from the eastern portion of the property for Nina Place, running north to south on a slight diagonal, predominantly through Lot 4 but also cutting through the southeast corner of lot 2. The total taking consisted of 0.84 acres from Lot 2 and 1.60 acres from Lot 4.

[27]  Nina Place, which cuts through and divides the claimant's property, is a two lane road which goes under the overpass. In July 1993, the claimant entered into a Restrictive Covenant agreement with the City of Kamloops which prohibited any access to the lands lying to the east of Nina Place and granted right-in/right-out turning to the lands lying to the west of Nina Place. Access to the lands to the east is from Bogetti Road.

[28]  Prior to the taking, a storm sewer ditch ran along the northern boundaries of Lots 2 and 4, providing drainage to both lots. This storm drain was on part of the property taken by the respondent. The diverted creek bed had joined into the drainage system and had provided drainage from the middle of the property. The respondent's taking effectively shut down the northern drainage system by removing some of the existing drainage pipes and closing off others.

[29]  The property remained undeveloped until recently. The claimant sold the land lying east of Nina Place to a developer who moved the house and subdivided the land. Where the house was, there is now a neighbourhood pub. Currently, the claimant is developing a portion of the remainder of the property, lying to the west of Nina Place, into 44 townhouse units (22 duplexes).

3.  THE CLAIM AND REPLY

[30]  The July 15, 1991 Claim, as amended on June 17, 2004, is for the following:

At the hearing, the claimant abandoned the claims for the topsoil ($25,000) and the disturbance damages ($40,000).

[31]  The August 19, 1991 Reply, as amended on August 25, 2004, asserts that the advance payment of $262,000 was calculated based on an error, that the proper amount was $127,000, and that the balance of $135,000 was based on a mistake of fact. The respondent says that the full advance was paid to the claimant without prejudice to the right of the respondent to apply for an order that the sum of $135,000 be repaid, with interest.

[32]  The respondent submitted that the advance payments are equal to or greater than the compensation to which the claimant is entitled.

4.  THE ISSUES

[33]  The main issues to be determined are as follows:

1. What is the market value of the land taken?

2. Has there been a reduction in market value to the remaining property that, in accordance with section 40(1) of the Act, is directly attributable to the taking or that results from the construction or use of the works that comprise the project and, if so, what is the amount of the reduction?

3. What is the correct characterization of the $135,000 paid by the respondent to the claimant, and does that characterization affect entitlement either to costs or interest pursuant to sections 45 and 46 of the Act?

5.  LEGISLATIVE PROVISIONS

6.  HIGHEST AND BEST USE

[34]  Michael Flynn, a real estate appraiser with Flynn and Associates, was retained by the respondent at the time he prepared his report, which is dated November 10, 1990. The claimant is relying upon Mr. Flynn's report in support of their claim for compensation and he testified on the claimant's behalf at the hearing. In his report, under Highest and Best Use, he states: "…the best definition is one which states that highest and best use represents the most probable use of a given property at a particular moment in time."

[35]  Danny Grant, for the respondent, provided an appraisal report dated April 25, 1990 and an amendment report dated September 8, 2004 ("2004 amendment report"). In his 1990 report, Mr. Grant defined highest and best use as:

Highest and Best Use has been defined as that reasonable and probable use that will support the highest present value, as defined, as of the effective date of the appraisal. Alternatively, it is that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in the highest value.

[36]  Although they defined Highest and Best Use differently, we find that there was little distinction between the appraisers' approaches to determine highest and best use. Both considered a range of possible uses based upon zoning potential and market factors. However, the appraisers did vary in their conclusions of highest and best use.

[37]  Mr. Flynn concluded that the highest and best use of Lot 2, prior to the taking, was for shopping centre use. He concluded a combination of uses for Lot 4: a complementary commercial use for the land adjacent to Lot 2 and residential use for a 20,000 sq.ft. portion at the southeast corner of the property where a house was situated. He stated that the highest and best use of the property remained unchanged after the partial taking.

[38]  In his report dated April 25, 1990, Mr. Grant concluded that the northwest corner of the property, leased to Petro-Canada, was developed to its highest and best use. His opinion as to the highest and best use of the remainder of the land was not clearly stated. He discussed various possible commercial uses but did not conclude any particular use in his report. His comments on the sanitary sewer disposal issue provide some inference that the highest and best use was holding for future commercial use.

[39]  At the time his report was prepared, Mr. Grant was utilizing an effective date of April 23, 1990 for his appraisal and was unaware that a sanitary sewer system was under consideration for the subject area. However, as at the valuation date agreed upon at the compensation hearing, July 25, 1990, the sewer project had been approved by council and it was known that the system would be constructed within two years.

[40]  Mr. Grant acknowledged the sewer project in his 2004 amendment report and stated that the property was a holding property awaiting the installation of a sanitary sewer system and "…at that time a combination of commercial and single family residential development consistent with the surrounding areas is most likely."

[41]  However, later within his 2004 amendment report, he concluded that the value of the land for single family development was below the value as a holding property for commercial use and thus valued the property on the basis of commercial potential. The panel observes that this is a contradiction to his earlier statement on highest and best use within the 2004 amendment report. Accordingly, the panel finds Mr. Grant has not provided a clear statement on highest and best use.

[42]  As the determination of highest and best use is critical to the proper valuation of real estate, we have reviewed the background information that was available to the appraisers.

[43]  At the date of the taking, Lot 2, the westerly lot, was zoned C-5 (Shopping Centre) and Lot 4 was zoned GUR (General Urban Reserve). The property was largely vacant although the northwest corner of Lot 2 was developed as a Petro-Canada gas station with a convenience store and the southeast corner of Lot 4 contained a house.

[44]  The claimant had considered developing Lot 2 as a shopping centre in the 1970's. Over the period 1973 to 1981, the claimant received letters of intent to lease space in a proposed shopping centre on the site from a number of businesses including: I.G.A., Smitty's Pancake House, Kipps Pharmacy, Valleyview Hardware 1971 Ltd., the Royal Bank and others.

[45]  In October 1980, Mr. Paul Bianco, then the principal of the claimant, received a report from Thomas Consultants Inc. (the "Thomas Report") examining the feasibility of retail development in the Dallas area.

[46]  The Thomas Report noted that there was a population of 7,400 within the trade area applicable to the subject comprised of 4,900 in the primary area and 2,500 in the secondary zone. The report noted that although the population of the trade area had doubled in the previous decade, there had been no accompanying retail development in the area. The report recommended development of a shopping centre on the subject property with future expansion after an increase in local residential development.

[47]  In 1981 City Council had approved a development permit for Lot 2 to allow a shopping centre on the property. This permit lapsed and was re-issued in 1983 to allow the construction of the gas station/convenience store as Phase 1 of the shopping centre development.

[48]  In 1981 a moratorium on development was imposed in the Dallas area. In February 1985 City Council lifted the moratorium from the balance of Lot 2 although it remained in effect for all other properties.

[49]  The local real estate market had peaked in mid 1981 and then crashed. The ensuing recession lasted until 1986 at which point values began to rise. The market continued to appreciate up to the valuation date for the subject taking.

[50]  In 1990 the population of Dallas/Barnhartvale was substantially unchanged from the time of the Thomas Report however an increase in population was anticipated once the moratorium was lifted and new developments could proceed. Additionally, the subject site had exposure to and access from the Trans-Canada Highway upon which some 20,000 cars passed the subject property daily.

[51]  Lot 2 of the subject property appears to have been a feasible site for a shopping centre prior to the 1981 market crash and local development moratorium. At the time of the taking the local market was rebounding and the end to the moratorium was in sight.

[52] The panel finds that the factors that made the proposed shopping centre viable in 1980 were substantially the same in 1990. The sewer system for the area had been approved and it could be anticipated that local development would again proceed.

[53]  We further find that Mr. Flynn's highest and best use conclusion was predicated on appropriate information. As noted above, Mr. Grant's original report was based upon an incorrect assumption regarding sewer availability and his 2004 amendment report, while apparently considering the correct information, did not change his value estimate and was contradictory in the highest and best use conclusions. The panel finds Mr. Flynn's highest and best use conclusions to be correct, namely: shopping centre commercial for Lot 2; complementary commercial uses for the portion of Lot 4 adjacent Lot 2; and a single family residential homesite of 20,000 sq.ft. for the southeast corner of Lot 4.

7.  MARKET VALUATION

[54]  Mr. Flynn estimated that the value of the land taken was $273,365. He was of the opinion that the easterly end of the property would benefit from the changes resulting from the projectand the westerly end would be negatively impacted. He stated that the enhancement of the eastern portion would tend to be offset by the reduction at the western side. However, in his opinion, the Petro Canada portion would suffer an additional negative impact and he estimated a $6,000 reduction in value to the remainder to account for this change.

[55]  Mr. Flynn concluded that the market value of the lands taken plus the diminution in value to the remaining lands totaled $279,000 (rounded).

[56]  Mr. Grant, in his April 25, 1990 report, estimated the market value of the land taken at $127,000. In his 2004 amendment report, he estimated the market value of the land taken at $145,753. He was of the opinion that the remainder of the property benefited from the effects of the project and estimated these benefits at $67,059. He concluded the final value estimate for compensation purposes to be $79,000 (rounded).

[57]  The effective date in Mr. Grant's first appraisal report, April 23, 1990, was changed to April 27, 1990 in his 2004 amendment report. Mr. Flynn's report was based upon an effective date of April 27, 1990. However, the parties agreed at the hearing to a valuation date of July 25, 1990. Although there was some expert evidence that the market was in flux between April and July 1990, the parties did not provide any guidance on the possibility of an adjustment for time flowing from the change in valuation dates and thus we did not take a time adjustment into account.

7.1  The Claimant's Case

[58]  Mr. Flynn completed the Direct Comparison Approach to determine the value of the property. As he had concluded three different uses for the property, he included three data sets within his report.

[59]  The first data set contained five comparables which sold for shopping centre developments. These sales spanned a period from August 1976 to June 1989 and ranged in size from 1.25 acres to 10.28 acres. Unadjusted, these sales indicated a range of values from $183,200 to $286,965 per acre. The comparables all had access to sewer whereas the subject was two years from receiving sanitary sewer services. Mr. Flynn adjusted the comparables for time, location and services, including a 10% adjustment for services.

[60]  In adjusting for time, Mr. Flynn considered that the real estate market had been declining from 1974 to about 1977 at which point it began a recovery. The market then boomed from late 1979 until mid 1981. This period was followed by a recession lasting to the end of 1986. A recovery period lasted to 1989 and he stated that at the date of valuation both the residential and commercial markets had recovered.

[61]  After adjustment, Mr. Flynn's comparables ranged from $143,409 to $197,190 per acre. He estimated a value for Lot 2 in the middle of the range at $160,000 per acre.

[62]  The second data set contained nine comparables that Mr. Flynn analyzed for his valuation of the portion of Lot 4 which had the poten tial for commercial use. There were seven sales that spanned February 1982 to December 1989. There were also two listed properties. The properties ranged in size from 0.88 acres to 6.11 acres. Unadjusted per acre values were $132,692 to $435,600 with the high end represented by a listing. Mr. Flynn discounted the listed properties by 15% to reflect their unsold status. After adjusting for time, size, services and zoning the range of the nine comparables was $93,230 to $166,617 with a listing again at the high end.

[63]  The three comparables in Valleyview were the closest to the subject in location. They ranged from $99,618 to $117,196 per acre after adjustment. It was Mr. Flynn's opinion that the comparable at the low end of this range was the best one and he concluded $100,000 per acre for the commercial portion of Lot 4.

[64]  The third data set contained three residen tial comparables that Mr. Flynn analyzed for his valuation of the southeast portion of Lot 4 which contained a house. These sales transacted between May 1989 and January 1990 with unadjusted sale prices from $15,500 to $25,000. After adjusting for time, location and zoning, the adjusted value range was $18,500 to $20,400. Mr. Flynn concluded a value of $19,000 for the residen tial portion of Lot 4.

[65]  Mr. Flynn applied his estimates of the three unit values to calculate the value of the land taken. For the commercial Lot 2, of the total 0.84 acres taken, 0.12 acres was from the leased portion occupied by the Petro Canada gas station and convenience store. Accordingly, he provided two calculations for Lot 2.

[66]  For the value of the land taken from the unencumbered portion of Lot 2, he calculated $115,200 (0.72 acres @ $160,000 per acre). For the leased portion, he discounted the value of the land by two years at 10% per annum to take into account the two years remaining on the lease. His value then was $15,867 (0.12 acres @ $160,000 per acre x 0.82644).

[67]  For Lot 4, of the total 1.6 acres taken, 0.035 acres (1,525 sq. ft.) was from the residential portion. Accordingly, Mr. Flynn provided two calculations for Lot 4.

[68]  He valued the part taken from the commercial portion of Lot 4 at 1.565 acres @ $100,000 per acre ($156,500) but then discounted this amount by 10% to reflect the uncertainty affecting this portion of the property from the development moratorium still in effect for that property. Thus, he estimated the value of this portion of the taking at $140,850 ($156,500 x 0.90).

[69]  Mr. Flynn estimated the value of the part taken from the residential portion at the unit rate of the area ($19,000 divided by 20,000 sq.ft. site = $0.95 per sq.ft.) or $1,448 (1,525 sq. ft. x $0.95).

[70]  Mr. Flynn added the estimated values of the parts taken for an estimate of the total market value of the part taken at $273,365.

[71]  In considering the impact of the taking on the market value of the remaining lands, Mr. Flynn stated that the two main factors to consider were the changes in access and the traffic pattern. He stated that the re-routing of traffic would reduce the value of the northwest corner which was leased for the Petro Canada gas bar and convenience store.

[72]  Generally, his opinion was that the change in traffic patterns and access would enhance the value of the eastern portion of the property but this benefit would be offset by the reduction in value of the western portion. However, he concluded that overall there would be a minimal negative impact which he quantified at 5% of the land value of the area occupied by Petro Canada before the taking (0.75 acres @$160,000 x 5%) or, $6,000.

[73] Mr. Flynn's final estimate of the market value of the lands taken plus the diminution in value to the remaining lands totalled $279,000 ($273,365 + $6,000, rounded).

7.2  The Respondent's Case

[74]  Mr. Grant valued the property by the Direct Comparison Approach although he also completed an Income Approach for the Petro-Canada leased lands.

[75]  In his Direct Comparison Approach, Mr. Grant utilized a variety of commercial, residential and industrial comparables, none of which had a highest and best use for a shopping centre. As the panel disagrees with Mr. Grant's conclusion on highest and best use, other than for the Petro-Canada lands, we will only briefly discuss his report as much of the data and analysis is not relevant in our determination of compensation.

[76]  As the Petro-Canada portion of the subject property was leased, Mr. Grant completed an Income Approach on this area. The actual lease area is 0.75 acres (32,670 sq.ft.) and since the site benefited from two easements, for access and a septic field, Mr. Grant added the areas of the easements for a total of 55,068 sq. ft. (1.26 acres).

[77]  The Petro-Canada station was leased at the date of taking at an annual rent of $60,000, to be increased to $72,000 in 1992.

[78]  On the basis of the replacement cost of the improvements at $440,000 with the rental value of the improvements at 12%, Mr. Grant calculated the rent attributable to the land at $7,200. Capitalizing this figure at 12%, Mr. Grant calculated a land value of $60,000. Mr. Grant also completed the calculation on the basis of the increased rent for an indicated land value of $160,000, which he discounted for the two years remaining at the old rent.

[79]  Mr. Grant discussed his calculations in relation to the actual lease area as well as the area inclusive of the easements. He concluded that the present value of the Petro-Canada portion of the land was $140,000 with $45,000 applicable to the easement areas and $95,000 to the leased site. He noted that at some point in the future, the easement areas would also contribute value to the remaining development parcel.

[80]  In the Direct Comparison Approach, Mr. Grant concluded the land value of the Petro-Canada lease area to be $2.50 per square foot, as if vacant, or $81,675 for the 32,670 sq.ft. area.

[81]  Since the Petro-Canada site was leased, Mr. Grant based his conclusion of value on the Income Approach for the leased and easement areas: $2.90 per square foot for the leased area ($95,000 divided by 32,670 sq. ft.) and $2.00 for the easement areas ($45,000 divided by 22,398 sq. ft.).

[82]  As the leased site was paved, curbed and landscaped, Mr. Grant estimated the costs of these improvements. He used square foot rates of $1.50 for landscaping, $2.50 for pavement and $15.00 per lineal foot for the concrete curbs. Based upon his estimated areas, he calculated $64,100 for these improvements, which he added to the $95,000 estimate of land value for this portion, for a value conclusion of $159,000 for the total value of the land and site improvements in the leased area.

[83]  For the large, undeveloped portion of Lots 2 and 4, Mr. Grant analyzed his comparables in relation to undefined areas of the property and concluded different values for different "zones."

[84]  He stated that the west side of the site was more valuable than the east side, and concluded values for the "zones" from $2.50 down to $0.50 per square foot. He stated "No definitive zones of value can be demarcated, but the entire property will generate a value close to the average of $1.50 per square foot or $65,340 per acre." This rate formed the basis for his final conclusion of the value of the undeveloped portion of the site.

[85]  The par tial taking from the Petro-Canada portion of the site was 2,530 sq.ft. In calculating the value of the part taken, Mr. Grant applied $2.90 per sq. ft for the land, from his Income Approach, plus an estimated $1.50 per sq. ft. rate for the landscaping. This resulted in a value of $11,000 (rounded) for this part taken.

[86]  Mr. Grant relied upon a size of 2.372 acres for the part taken from the undeveloped portion. The taking was from two different legal parcels with different zonings and, in his view, "a variable highest and best use and utility."

[87]  Mr. Grant stated that the future land use would not be precisely at the lot or zoning line but would gradually reduce in intensity from west to east. He thus broke the part taken into two areas: that part west of the connector road ( Nina Place) at an average rate of $1.75 per square foot and the connector road and the part east of the road at $1.00 per square foot. Based upon these areas at 48,706 and 49,518 sq.ft. respectively, he estimated the value of this part of the taking at $134,753.

[88]  Combining his estimates for the parts taken indicated a total value of $145,753 ($11,000 + $134,753).

[89]  Mr. Grant considered the value of the part taken as an equal average of the whole parcel. On this basis, he calculated a value of the part taken at $168,309 using an average square foot rate of $1.59 and a size of 105,855. However, he stated that the predominant area taken is from an area of less than average value and thus relied upon his previous estimate of the value of the partial taking.

[90]  Mr. Grant considered benefits to the remainder of the property as a result of the project. In his view, the benefits to the westerly portion are increased exposure and customer accessibility and elimination of the lowest value area from the range of values that made up the before-taking estimate. He stated that this increased the average value of the western portion of the site by $0.15 per square foot or $51,487.

[91]  In his opinion, the east side parcel benefited from a smaller size with more road frontage and exposure. He also noted that other commercial sites in the area were eliminated as a result of the project. He concluded that the net value increase to this area was $0.25 per square foot or $15,572.

[92]  Mr. Grant concluded that the total benefits were $67,059 and subtracted this from the total value of the parts taken ($145,753) for an estimate of compensation of $78,694, rounded to $79,000.

7.3  Analysis and Findings

[93]  There was a small discrepancy in the property sizes utilized by the appraisers. At the hearing, the parties provided the panel with an agreed statement on the relevant property sizes which we have relied upon to determine compensation.

[94]  With respect to Mr. Grant's valuation of the Petro-Canada site, we disagree with his inclusion of the easement areas in his valuation. The access easement was designed to provide shared access for the proposed shopping centre thus Petro-Canada does not have the exclusive use of this access. Additionally, the easement for the septic disposal field would become unnecessary since, at the date of taking, the municipal sanitary sewer was to be extended to the property.

[95]  In his Direct Comparison Approach, Mr. Grant relied on three comparables in valuing the Petro-Canada portion, two of which were located north of the subject on Highway No. 5 in the Raleigh area. Mr. Grant testified that he did not make a location adjustment to these comparables despite their location on a less travelled highway. As traffic volumes are a critical component for a service station, we find that a location adjustment should have been made.

[96]  The other comparable that Mr. Grant relied upon was a property purchased by the Ministry of Transportation and Highways for this same highway improvements project. This property was next to an established service station and Mr. Grant stated in his report that this would normally preclude the development of a service station on the adjacent property. The panel agrees that makes it problematic as a comparable. Additionally, the panel does not accept this purchase by the respondent for the project as an appropriate indicator of marketvalue. As we find that Mr. Grant should have made a location adjustment to the other comparables, we can place no reliance on his conclusion in this analysis.

[97]  The panel disagrees with Mr. Grant's conclusions on highest and best use, with the exception of the Petro-Canada site. We therefore disagree with his valuation which was premised upon an incorrect highest and best use.

[98]  We also have difficulty with Mr. Grant's use of undefined zones of value. He did not provide market evidence or any compelling rationale on which to base his concept of "zones". Other than the raised homesite at the far southeast corner of the site, the site was level contiguous land and we find that his methodology was inappropriate in the circumstances.

[99]  We find that the use of artificial "zones" at rates which declined from west to east, resulted in a reduced estimate of the value of the partial taking for the new connector road as this road fell within the area of lower value "zones" according to Mr. Grant. This methodology also resulted in an unproven increase in the value of the western portion of the lands on the basis that a low value zone was removed and thus the average unit value of the remainder was higher. Thus, Mr. Grant's use of artificial zones has a doubly negative impact on his determination of the compensation payable to the claimant.

[100]  The panel generally finds Mr. Flynn's methodology and analysis to be compelling.

[101]  We agree that $160,000 per acre is the rate applicable to the Petro-Canada lands however, we do not understand Mr. Flynn's rationale for discounting the value for the two years remaining in the current lease term.

[102]  On the basis of the comments contained in his report, Mr. Flynn appears to suggest that as the land is encumbered by the lease and unavailable to the owner for two more years, it should be discounted to reflect that fact. He did not elaborate on his reason for discounting this portion of the property in his testimony at the hearing.

[103]  The Petro-Canada lease was renewable at the option of the tenant and thus the landlord did not have the right to use the land at the expiry of the current term. While we agree that it is relevant to consider the lease, we find no evidence to suggest that this would be a factor which would result in a discount of the land value since the property was developed to its highest and best use and there was no suggestion that the lease rate was below market value. Accordingly, we will use the undiscounted rate of $160,000 per acre to determine the value of the leased land.

[104]  The panel agrees with Mr. Flynn's conclusion that the rest of Lot 2 also has a per acre value of $160,000. We also accept his conclusions of $90,000 per acre for Lot 4 excluding the residential portion and $19,000 for the homesite on Lot 4.

8.  BENEFITS AND REDUCTION IN VALUE TO THE REMAINDER

[105]  The claimant asserted that the effects of the project resulted in a loss in value to the remainder of $6,000, whereas the respondent claimed that the property benefited. Mr. Grant asserted that the benefits were "specific" and, therefore, section 44 (1) of the Act applies and the amount of the benefit must be deducted from the amount of compensation payable. Mr. Grant estimated the benefits to the remainder of the property at $67,059.

[106]  Claimant's counsel argued that there were no special benefits and, further, since the respondent had not pled either special or general benefits in the Form B, it was not entitled to argue that benefits should be deducted from compensation. At the hearing, claimant's counsel advanced a novel argument based on Mr. Grant's estimate of the value of benefits. He submitted that as Mr. Flynn had stated that the negative impact to the western portion was offset by the positive impact to the eastern portion, ignoring the positive aspect on the argument that it could not be claimed, the negative impact must then be $67,000.

[107]  This claim is made pursuant to section 40 of the Act. Regardless of the respondent's pleadings, s. 40 is subject to s. 44 which requires the board to consider whether any benefits, special or general, apply. For this reason, we will consider the possibility of benefits arising, as well as reduction in value to the remainder.

[108]  One of the effects of the highway project was to change traffic patterns. Prior to the project, it was possible for westbound traffic to turn left off of the highway to access the western end of the property where the Petro-Canada gas station is located. Now left turns are not permitted. Additionally, prior to the project, the property was visible to westbound traffic. With the highway elevation, the property was no longer visible in advance and highway signage was erected to advise the travelling public of the Petro-Canada location and the exit ramp.

[109]  The traffic from the neighbourhoods to the south that previously was routed past the west side of the property now largely follows the new Nina Place connector road that bisects the property. This has the effect of reducing the traffic flow on the west side of the property but increasing it on the east side of the property.

[110]  The traffic from the neighbourhoods to the north of the freeway that previously had to cross the highway now has safe access under the overpass.

[111]  According to Mr. Grant, the westerly portion of the property benefited from increased exposure and accessibility and the elimination of lowest value area. He stated that this increased the average value of the western portion of the site by $0.15 per square foot or $51,487.

[112]  As we have found it inappropriate to rely upon Mr. Grant's undefined value zones, we reject his conclusion that the value of the western lands increased because the taking was from property falling in a lower value zone.

[113]  In Mr. Grant's opinion, the eastern lands benefited from being a smaller size with more road frontage and exposure. He also noted that other commercial sites in the area were eliminated. He concluded that the net value increase to this area is $0.25 per square foot or $15,572.

[114]  Mr. Grant's opinion that a smaller parcel size is a benefit merits consideration. Typically the unit rate of land rises as the parcel size decreases. However, Mr. Grant provided only a summary analysis on the value of this parcel in the after-taking condition and it is difficult for the panel to determine if Mr. Grant's conclusion is correct. The claimant alleged that Mr. Grant only considered benefits and failed to consider any negative impacts to the property.

[115]  Mr. Flynn also found that the eastern lands benefited from increased traffic which he concluded was, generally, offset by the negative effect to the western lands. However, he concluded that the Petro-Canada lands suffered an additional negative impact from the reduced accessibility and lower traffic volumes. He estimated this impact to be $6,000.

[116]  As neither appraiser included a comprehensive discussion of the changes affecting the property, it is difficult for the panel to accurately determine the impact of the taking, whether negative or positive. We accept the appraisers' opinions that the eastern portion benefited from the changes to the traffic patterns, and we agree with Mr. Grant that it likely benefited from the smaller parcel size. However, we do not accept Mr. Grant's conclusion that the value of the western lands rose due to the elimination of the lower value zone. We agree with Mr. Flynn that the western lands were negatively impacted by the change in traffic patterns.

[117]  While the re-direction of traffic is a significant drawback to the developed Petro-Canada gas station, we find that it also negatively affects the commercial potential of the undeveloped portion of Lot 2. As traffic access and exposure are positive attributes for commercial development sites, clearly the changes resulting from the project had a negative impact on the western portion of the site. On the evidence presented, the panel agrees with Mr. Flynn that although the east side benefited, the west side was negatively affected and these impacts, other than for the Petro-Canada site, are offsetting.

[118]  The claimant alleged that the remainder of the property was also impacted by increased development costs as a result of the partial taking. The costs claimed include:

[119]  The claimant characterizes these amounts, in both its pleadings and arguments, as a reduction in value to the remainder. In the course of the hearing, the respondent questioned whether these expenses might be more properly considered as disturbance damages. However, the respondent did not pursue this issue.

[120]  One of the difficulties noted by the respondent in accepting these costs as a reduction in value to the remainder is that neither appraiser included these items in his analysis. We assume that either the relevant technical information that would have allowed the appraisers to assess the impact of the increased development costs was not available or its relevance was overlooked.

[121]  Regardless of the characterization of these expenses, the fundamental duty of the board is to award appropriate compensation under the Act. We find that these amounts can be considered in either context however we will consider them as presented in evidence, as costs potentially resulting in a reduction in value to the remaining land.

8.1  Nina Place Road Curbs

[122]  The claimant is claiming $8,000 to construct curbs and gutters on the west side of Nina Place. The respondent argued that the 1983 development permit for the property required the developer to construct curbs and gutters along the road frontage as part of that planned development, and there had been no increase in the amount of curb and gutters required. The panel finds that the claimant did not produce compelling evidence to show that there has been an increase in this development cost and we decline to award this amount.

8.2  No Post Barriers

[123]  In conjunction with the townhouse development the claimant is currently undertaking, the claimant is required to install no post barriers along the Trans-Canada Highway. The claimant stated this expense as $35,385 plus $1,477 for engineer's design and claimed those amounts.

[124]  The panel heard evidence that installation of no post barriers is required along the Trans-Canada Highway adjacent the claimant's property for the safety of highway traffic. Julian Malinsky, a district manager with the Ministry of Transportation, advised the panel that no-post barriers are designed to enhance safety because they will prevent a vehicle from leaving the highway.

[125]  The claimant submitted that the need for the barriers results from the elevation of the highway. The respondent submitted that the need arises now due to the development in progress and the claimant's encroachment on the highway right of way.

[126]  The claimant is placing fill on the property to accommodate the townhouse development and the Ministry of Transportation has allowed encroachment of the slope of the fill onto the highway right of way. Mr. Malinsky testified thatit would be lethal for a car to leave the highway, go down the embankment, and hit the ditch created by the fill placed on the highway right of way. He testified that it was the placement of fill on the highway lands that created the safety hazard and thus the requirement for no post barriers. He also testified that if there were no structures in the "no-build" zone, there would be no requirement for the barriers.

[127]  The panel is persuaded that the need for no post barriers arises due to factors associated with the highway project. The evidence showed that the highway elevation was raised by as much as 35' at the Nina Place Road overpass. The highest and best use of the site prior to the highway project was for development and the evidence suggests that any development near the property line could create a problem vis-a-vis highway traffic safety. The panel did not receive solid evidence of how far removed structures would have to be from the highway right of way to completely alleviate the safety concerns of the Ministry of Transportation. In the panel's view, the alternative to erecting safety barriers would be to leave a vacant strip, which could be a significant loss of utility of that land for development.

[128]  The panel finds that the cost of erecting no post barriers results from the respondent's partial taking from the claimant's property. There was no evidence to suggest that the claimant's development prior to the taking would have encountered similar safety issues or incurred similar costs. We find that this is an extraordinary development cost that results in a corresponding reduction in value to the remainder of the property. Accordingly, we award the amount claimed for this expense, although we will discount it back to the date of the partial taking.

8.3  Storm Drainage and Fill costs

[129]  The highway project eliminated the storm drainage system that connected to the northern section of the property, which had provided drainage from the central and northern portions of the claimant's property. The Ministry installed a new storm drainage line along Nina Place, further east. With the current development, the claimant needs to raise the elevation of the lands to make a gravity connection into the storm drainage line at Nina Place. The claimant submitted total costs of $93,750, as damages to the remainder.

[130]  Ideally, the panel would have expert appraisal evidence to support all claims for the reduction in value to the remainder. Mr. Grant stated in testimony that he assumed that the storm drainage pipes contained in the part taken from the subject would be replaced. Mr. Flynn did not address the issue.

[131]  The respondent argued that the Ministry would have considered the needs of the claimant at the time of the taking, and that the claimant should have asked the Ministry to accommodate its servicing requirements then. The panel agrees this would have been the ideal situation but the failure of the claimant to attempt to resolve the issue earlier does not prevent the claimant from seeking compensation of those costs now.

[132]  The respondent pointed to the evidence that showed the storm sewer pipe which had been in place along the northern edge of the property prior to the taking was a 42" pipe which connected to the Ministry's 36" culvert that crossed the Trans-Canada Highway. The respondent claims that this shows that the Ministry's culvert was inadequate for the anticipated future development and the claimant would have had to install a new system in any event. There was no evidence to support this contention and the panel declines to make that assumption.

[133]  The panel finds that the claimant has been affected by increased development costs due to the changes made in the local storm drainage system, resulting from the respondent's partial taking from the claimant's property. The cost of servicing a development parcel is obviously a consideration for a developer, thus an increase in these costs is likely to correspond to a decrease in value.

[134]  The amounts claimed are $19,800 for a drainage pipe plus $1,950 for three manholes. The cost of the fill is claimed as $72,000.

[135]  The respondent argued that it was the current development, townhouses with basements, that gave rise to the need for placement of fill. As the highest and best use of this portion of the property at the time of the taking was for commercial use, the panel has considered this argument carefully.

[136]  The panel was provided with civil plans showing the elevation of the current connection point as well as the original connection level. The difference of 3.597 metres was not in dispute. Scott Bianco, the current principal of the claimant company, testified that the basements have resulted in lower costs being claimed since the developer had to excavate the soil and compact it prior to placing fill, and the amount of fill required was less than if it had been a development without basements.

[137]  The panel is satisfied on the evidence that it is the change in the elevation of the storm drainage connection point resulting from the respondent's par tial taking from the claimant's property, and not the current development, that resulted in the need for fill on the property. In the absence of appraisal analysis on this item, we are prepared to allow the amounts claimed, discounted to the date of the par tial taking.

[138]  In 2004 dollars, the increased costs resulting in a reduction in value to the remainder which the panel has awarded are:

[139]  These items total $130,612 excluding GST. The only evidence the panel has on the difference in costs between 1990 and 2004 is testimony from the former MoTH project manager that costs have risen approximately 30% since 1990. He stated that this estimate was on the high side. While a high estimate of the increase in costs since 1990 benefits the respondent, the claimant did not offer an alternative to this figure. Accordingly, the panel will rely upon that estimate to make the following calculation: $130,612 divided by 130, times 100, equals $100,471. We award this amount as a reduction in value to the remainder of the site due to increased development costs.

9. COMPENSATION AWARDED

[140]  The following summarizes the panel's determination of the claims for compensation, excluding interest and costs.

10.  ADVANCE PAYMENT

[141]  The respondent's July 25, 1990 transmittal letter to the claimant's solicitor enclosed a Notice of Advance Payment dated July 26, 1990 and two cheques. The first was in the amount of $127,000 and the parties do not dispute that this payment is an advance payment pursuant to section 20(1) of the Act. The second cheque in the amount of $135,000 was characterized by the respondent in its transmittal letter as an advance payment secured by a mortgage against Lot 4. The Notice of Advance Payment refers to the total amount paid of $262,000 as being "an amount the Expropriating Authority estimates is or will be payable as compensation in full satisfaction or in excess of any claim which you may have" excepting business losses.

[142]  Both parties addressed the issue of how to characterize the payment of $135,000, seeing that characterization as potentially affecting the claimant's entitlement to both interest and costs.

[143]  The claimant submitted that the $135,000 advanced by the respondent did not constitute an advance payment for the purposes of s. 20(1), rather it was only a loan secured by a mortgage. The claimant argued that to be an advance payment under section 20(1): the payment must be made without conditions; the owner must be free to accept the payment without being required to pursue a claim for compensation; and, the amount of the payment under section 20(1)(d) can only be for the amount of the authority's appraisal estimate which, in this case, was $127,000. Since the claimant was required to secure the $135,000 payment by a mortgage on its property and to proceed to a hearing before the board to determine the compensation payable, the claimant submitted the payment was not an advance payment under section 20(1) of the Act.

[144]  The respondent submitted that the mortgage provision identifying the sum secured of $135,000 as "security in respect of the advance payment" indicates the intention that the payment in that amount was to be part of the advance payment, not a loan.

[145]  The panel finds that it is not necessary to determine whether or not the $135,000 payment is an advance payment because sections 45 and 46 in dealing with entitlement to interest and costs refer to payments "under section 20 (1) and (12) or otherwise" (emphasis added). Certainly, the $135,000 payment is an unusual payment in that the claimant had to provide a mortgage for security in the event the board found that the compensation payable was less than $262,000. Additionally, the claimant was not at liberty to accept the payment in satisfaction of the claim. However, we find nothing in the legislation or in the parties' submissions to support a conclusion that a payment has to be free and clear to be a payment made under section 20(1) and (12) or otherwise. We find therefore that the payment of $135,000 whether it is an advance payment or not is a payment that must be taken into account in determining entitlement to both interest and costs.

11.  INTEREST

[146]  Section 46 (1) and (4) of the Act are relevant for the purposes of this decision:

Earlier decisions of the board have established that interest accruing under section 46(1) compounds annually while additional interest under section 46(4) is calculated as simple interest. See Richland Farms Ltd. v. British Columbia (Ministry of Transportation and Highways) (1991), 46 L.C. R. 66 (B.C.E.C.B.).

[147]  The claimant submitted that the board should calculate the award for interest based on the difference between the "advance payment" of $127,000 and the amount awarded. For reasons provided in the preceding section, the board is of the view that this is an incorrect interpretation of subsections 46(1) and (4). Even if the additional $135,000 paid is not considered an "advance payment" it would still be an "otherwise" payment.

[148]  The board has awarded total compensation in the amount of $382,059, all in relation to market value. The total payments made by the respondent "under section 20(1) or (12) or otherwise" total $262,000. The Section 3 Agreements with respect to the property fix July 1, 1990 as the date for possession. Pursuant to section 46(1)(a), we find that the claimant is entitled to interest calculated on the difference of $120,059 between the amount awarded and the total amount paid, from and including July 1, 1990.

[149]  Since the total amount paid is less than 90% of the compensation awarded, the claimant is also entitled to additional interest under section 46(4) at the annual rate of 5% on the sum of $120,059 from and including the date the payments of $127,000 and $135,000 were made to and including the date of this compensation decision.

12.  COSTS

[150]  Section 45 (3), (4) and (7) of the Act are relevant for the purposes of this decision:

Pursuant to section 45(7) of the Act, the government brought into force the Tariff of Costs Regulation, B.C. Reg. 189/99 (the "Tariff") on June 28, 1999. The Tariff governs legal and real estate appraisal costs incurred since that date. As this claim pre-dates the Tariff, legal and real estate appraisal costs incurred prior to June 28, 1999 and costs other than legal and real estate appraisal costs will fall under section 45(7)(a).

[151]  Section 3 of the Tariff provides that if costs are payable under section 45, the board may, when it makes an adjudication of compensation following a hearing, fix the scale, from Scale 1 to 3, under which the costs will be assessed. The board may also order that legal costs be assessed on a different scale from real estate appraisal costs and that one or more steps in the proceeding be assessed under a different scale from that fixed for other steps.

[152]  Under section 4(1) of the Tariff when fixing the scale of costs the board must have regard to the principles that Scale 1 is for matters of less than ordinary difficulty or importance, Scale 2 is for matters of ordinary difficulty or importance, and Scale 3 is for matters of more than ordinary difficulty or importance. Under section 4(2), when fixing the appropriate scale, the board may take into account, among other things, whether difficult issues of law, fact or construction or difficult appraisal issues are involved.

[153]  The award of compensation totaling $382,059 is greater than 115% of the total payments made by the respondent under section 20(1) and (12) or otherwise. Accordingly, the respondent must pay the claimant reasonable costs necessarily incurred pursuant to section 45(4) of the Act.

[154]  The claim was a reasonably straightforward one, involving the market value of the portion of the property taken and the impact of the partial taking on the market value of the remainder of the property. There were no legal issues of more than ordinary difficulty or importance and the scope of the appraisal assignment was consistent with that ordinarily requested in a partial taking. Insofar as the claimant's costs fall to be determined under the Tariff, we conclude that they should be fixed at Scale 2.

THEREFORE IT IS ORDERED THAT

APPENDIX A

1. Fourteen and three-quarters per cent (14.75%) from July 1, 1990 to December 31, 1990
2. Twelve and three-quarters per cent (12.75%) from January 1, 1991 to June 30, 1991
3. Nine and three-quarters per cent (9.75%) from July 1, 1991 to December 31, 1991
4. Eight per cent (8.00%) from January 1, 1992 to June 30, 1992
5. Seven per cent (7.00%) from July 1, 1992 to December 31, 1992
6. Seven and one-quarter per cent (7.25%) from January 1, 1993 and June 30, 1993
7. Six per cent (6.00%) from July 1, 1993 to December 31, 1993
8. Five and one-half per cent (5.5%) from January 1, 1994 to June 30, 1994
9. Eight per cent (8.00%) from July 1, 1994 to December 31, 1994
10. Eight per cent (8.00%) from January 1, 1995 to June 30, 1995
11. Eight and three-quarters per cent(8.75%) from July 1, 1995 to December 31, 1995
12. Seven and one-half per cent (7.5%) from January 1, 1996 to June 30, 1996
13. Six and one-half per cent (6.5%) from July 1, 1996 to December 31, 1996
14. Four and three-quarters per cent (4.75%) from January 1, 1997 to June 30, 1997
15. Four and three-quarters per cent (4.75%) from July 1, 1997 to December 31, 1997
16. Six per cent (6.00%) from January 1, 1998 to June 30, 1998
17. Six and one-half per cent (6.5%) from July 1, 1998 to December 31, 1998.
18. Six and three-quarters per cent (6.75%) from January 1, 1999 to June 30, 1999.
19. Six and one-quarter per cent (6.25%) from July 1, 1999 to December 31, 1999.
20. Six and one-half per cent (6.5%) from January 1, 2000 to June 30, 2000.
21. Seven and one-half per cent (7.5%) from July 1, 2000 to December 31, 2000.
22. Seven and one-half per cent (7.5%) from January 1, 2001 to June 30, 2001.
23. Six and one-quarter per cent (6.25%) from July 1, 2001 to December 31, 2001.
24. Four per cent (4.00%) from January 1, 2002 to June 30, 2002.
25. Four and one quarter per cent (4.25%) from July 1, 2002 to December 31, 2002.
26. Four and one half per cent (4.5%) from January 1, 2003 to June 30, 2003.
27. Five per cent (5.0%) from July 1, 2003 to December 31, 2003.
28. Four and one half per cent (4.5%) from January 1, 2004 to June 30, 2004.
29. Three and three-quarters per cent (3.75%) from July 1, 2004 to December 31, 2004.
30. Four and one quarter per cent (4.25%) from January 1, 2005 to June 30, 2005.