July 20, 1992,  E.C.B. 40/90/035 (47 L.C.R. 292)

INDEX

1.  INTRODUCTION

This is an application by Reimer Mobile Homes Ltd. (the "claimant") pursuant to s.40 of the Expropriation Act, S.B.C. 1987, c.23 (the "Act") and s.544(1) of the Municipal Act, R.S.B.C. 1979, c.290, as amended. The claimant is seeking compensation for injurious affection from the District of Chilliwack (the "District") which constructed a railway overpass adjacent to and abutting its land. Section 40 of the Act reads as follows:

40.	(1)	In this section, "injurious affection" means injurious affection caused by an expropriating authority in respect of a work or project for which the expropriating authority had the power to expropriate land.
	(2)	The repeal of the Expropriation Act, R.S.B.C. 1979, c.117, and the amendments and repeals in sections 56 to 128 shall be deemed not to change the law respecting injurious affection where no land of an owner is expropriated, and an owner whose land is not taken or acquired is, notwithstanding those amendments or repeals, entitled to compensation to the same extent, if any, had those enactments not been amended or repealed.
	(3)	An owner referred to in subsection (2) who wishes to make a claim for compensation for injurious affection shall make his claim by applying to the board, and the board shall hear the claim and determine
		(a)	whether the claimant is entitled to compensation, and
		(b)	if so entitled, the amount of the compensation.

Section 544(1) of the Municipal Act provides:

544.

(1)

The council shall make to owners, occupiers or other persons interested in real property entered on, taken, expropriated or used by the municipality in the exercise of any of its powers, or injuriously affected by the exercise of any of its powers, due compensation for any damages necessarily resulting from the exercise of those powers beyond any advantage which the claimant may derive from the contemplated work.

The land owned by the claimant is unimproved, is zoned service Commercial-Industrial ("CSM"), and is legally described as:

Parcel "D", District Lot 27,
Plan 1842A (Except Plan 60802),
New Westminster District (the "claimant's land").

The claimant alleges that the presence of the overpass has destroyed the property's amenities and view, reduced its exposure to passing traffic, and eliminated direct access to and egress from frontage on Yale Road. As a result, the claimant alleges that the impact of the overpass has substantially diminished the value of its land.

Yale Road is a major four-lane thoroughfare which connects the commercial and residential areas of Chilliwack, located to the north, and Sardis, to the south, of the Trans Canada Highway.

The District did not expropriate any interest in the claimant's land although it did acquire several parcels in the immediate area to accommodate construction of the overpass, the approaches, an access road on the north side and an access ring road on the south side. One of the parcels of land which was acquired by the District was south of and contiguous to the claimant's land.

The hearing was held in Chilliwack on March 23, 24, 25, 26 and 27, 1992. On the first day of the hearing the board, accompanied by counsel, viewed the claimant's land, the overpass and the neighboring area.

The date for the establishment of compensation for the reduction, if any, in market value of the land was agreed to be December 31, 1989, one week after the date on which the overpass was substantially completed and opened to traffic.

Pursuant to s.40(3) of the Act the board must determine if the claimant is entitled to compensation even though none of its land had been taken and if so entitled, the amount of that entitlement.

2.  BACKGROUND

The claimant's land is located on the southerly edge of the District's commercial centre, on the east side of Yale Road and north of the Trans Canada Highway, about one kilometre from its commercial core. To the north of the claimant's land, the Canadian National Railway's main line (the "CN rail line") bisected Yale Road by way of a grade level crossing before the overpass was built. Prior to completion of the overpass as many as 20 trains per day would interrupt traffic flowing to and from the commercial centre.

In 1986 a study was commissioned by the District to explore the most practical method in which to resolve the problem of traffic flow on Yale Road. The study concluded that the cost of relocation of the rail line was prohibitive and could not be economically justified. In addition, soil conditions, a high water table, and the potential for differential movement between the track and tunnel structure precluded either a grade separation of, or a road tunnel under, the rail line.

In April, 1988 the authors of the study recommended that an overpass over the rail line would be the only feasible method to eliminate traffic congestion and a potential safety problem. The District accepted the recommendation and construction began in March, 1989. The overpass was completed and officially opened to traffic on December 22nd in the same year.

Attached as Appendix "A" is an annotated photograph taken from a portion of an aerial photograph (Ex. 6 in this proceeding) showing the claimant's land (identified as the "subject"), the overpass, and the surrounding neighbourhood. Traffic routes have been highlighted by the board. Directional lines reflecting traffic patterns and the names of the streets have also been added.

3.  STATUS OF LAND

(1)  Before construction of overpass

The claimant's land is 86,249 square feet in area (1.98 acres). Its perimeter measurements are as follows: 191.57 feet of frontage on Yale Road, 436.42 feet along the south boundary, 477.23 feet along the north boundary, and 198.7 feet flanking the B.C. Hydro rail line on the east boundary. The civic address before construction of the overpass was 45780 Yale Road.

Prior to construction of the overpass the claimant's land had contiguous frontage on Yale Road which offered direct access to traffic moving in both directions. Northbound traffic could turn right directly onto its land. Southbound traffic could enter by turning left and crossing a painted double line on Yale Road. As well, egress in both directions was subject only to the usual traffic flows. Topography was relatively level and the claimant's land was reasonably compatible with existing grades. In 1987 the estimated traffic volume in both directions was in the order of 27,900 vehicles per day.

(2)  After construction of overpass

The claimant's land remains vacant and is unchanged in area and zoning. It has apparently retained its former civic address of 45780 Yale Road. Direct frontage on Yale Road has been eliminated. The overpass itself occupies the full width of the original roadway, and that portion of Yale Road which bordered the claimant's land now forms part of the overpass. The overpass begins its ascent approximately 100 feet to the south of the claimant's land and touches down to grade some 800 feet to the north. The front or westerly portion of its land is now partially screened by the overpass as Yale Road has been elevated in front of the claimant's land at its highest point about 30 feet above the former grade level. The traffic volume after completion of the overpass is now estimated to be in the order of 30,000 vehicles per day.

At the south end of the overpass, a new ring road has been constructed to facilitate access to those properties which previously had direct frontage on Yale Road.

Traffic approaching from the south now gains access to the claimant's land by turning right off Yale Road and proceeding along the new ring road. The new route is roughly parallel to Yale Road. The total distance now travelled to access the claimant's land when proceeding north on the ring road is approximately the same distance which would have otherwise been covered prior to construction of the overpass (see Appendix "A"- Scale 1" equals approximately 154').

Traffic approaching from the north destined for the claimant's land now turns right off the overpass and proceeds on the new ring road towards and then under the overpass. The claimant's land is then directly on the left. This route is circular in design and provides uninhibited and safe access. The additional distance now travelled by southbound traffic is 750 feet as indicated on Appendix "A".

4.  THE ISSUES

The central issue before the board is whether the degree of interference with access and exposure to the claimant's land resulting from the construction of the overpass would have given a right of action at common law in the absence of a statutory power authorizing its construction. If the answer is yes, then the issue becomes whether the interference with access and exposure has substantially diminished the market value of the claimant's land to a degree that ought to be compensable.

5.  THE LEGAL BASIS FOR COMPENSATION FOR INJURIOUS AFFECTION

(1)  The claimant's position

Counsel for the claimant, Mr. Cram, submits that the conditions required to support a claim for compensation for injurious affection where no land has been taken have been met. These conditions are set out by the Supreme Court of Canada in The Queen v. Loiselle [1962] S.C.R. 624, 627; 35 D.L.R. (2d) 274, 276. They are as follows:

(1)	the damage must result from an act rendered lawful by statutory powers of the person performing such act;
(2)	the damage must be such as would have been actionable under the common law, but for the statutory powers;
(3)	the damage must be an injury to the land itself and not a personal injury or an injury to business or trade; and
(4)	the damage must be occasioned by the construction of the public work, not by its user.

The claimant concedes that the District through its council had authority under its statutory powers to construct the overpass, and that it was in the overall public interest to do so. However, Mr. Cram submits that the exercise of those powers does not grant, as of right, immunity from a claim for compensation for injurious affection when the degree to which access has been interfered with has adversely impacted the claimant's land. He submits that "interference with access has always been actionable" and that the claimant would have had a valid claim under common law had any person without statutory authority eliminated direct access by elevating Yale Road 30 feet above its former grade level. As authority he cited Loiselle at p. 627.

As to the second of the four conditions, it seems obvious that had the Seaway Authority or any other person, without statutory authorization constructed a canal and blocked the main highway adjacent to respondent's property, the latter - aside from any other remedies which might have been open to him - would have had a valid claim in damages under the general law. The learned trial judge so found and in my respectful opinion he was right in so doing. The statutory authority given to construct the works in question was however expressly made subject to the obligation to pay compensation for damage to lands injuriously affected.

He therefore submits that the first and second of the four conditions have been met.

The claimant further submits that interference with access and the presence of the overpass in such close proximity to the claimant's land has caused injury to the land itself. He contends that the utility of the land has been destroyed for a viable retail commercial development as its highest and best potential is now limited to industrial or warehouse use. As authority that the third condition has been met, Mr. Cram again cited Loiselle at p. 627 where the court stated:

As to the third condition it seems clear to me that there was "a physical interference with a right which the owner was entitled to use in connection with his property"- Metropolitan Board of Works v. McCarthy (1874), L.R. 7 H.L., 243, 253; C.P.R. v. Albin (1919), 59 S.C.R. 151, 159; - and that on the evidence such interference substantially diminished its value as a commercial property. [Emphasis added.]

In Loiselle, the owner of a service station fronting a provincial highway lost direct access as a result of the construction of a public project. The highway was closed some 80 to 90 feet beyond the owner's property. Damages were awarded for injurious affection to the land itself as it was now located near the end of a cul-de-sac some 1500 feet from the intersection of the relocated highway. At p. 628 the court held that

[s]uch interference substantially diminished its value as a commercial property.

... The learned trial judge found that the construction of the canal and the diversion of the highway had adversely affected respondent's land as a commercial property and there is ample evidence to support that finding. [Emphasis added.]

Other authorities cited by the claimant in which compensation was awarded as a result of interference with access to lands abutting a public highway are: Yeomans v. The Corporation of the County of Wellington (1879), 4 O.A.R. 301 (Ont. C.A.); Canadian Pacific Railway Company v. Albin (1919), 49 D.L.R. 618 (S.C.C.); Reliance Petroleum Ltd. v. Hamilton (1951), 4 D.L.R. 760 (Ont. C.A.); LeBlanc v. The King (1917), 16 Ex. C.R. 219; City of Windsor v. Larson et al (1980), 20 L.C.R. 344, 114 D.L.R. (3d) 477.

In reference to the fourth condition, the claimant submits that it has similarly been met in that the claim for compensation subsists even if the overpass was not put to its intended use as its mere presence interferes with the enjoyment of its land and the benefit of direct access and exposure to a major thoroughfare.

(2)  The District's position

The submission by counsel for the District, Mr. Bauman, is identical in many respects to that which he advanced in Jesperson v. District of Chilliwack, E.C.B. 43/90/034, unreported. In Jesperson a claim for pure injurious affection was triggered by the construction of the same overpass which is the subject of this proceeding.

Mr. Bauman submits that the test in a claim for compensation for "pure injurious affection", that is, where no land has been taken, was decided by the Supreme Court of Canada in St. Pierre et al. v. Minister of Transportation and Communication [1987] 1 S.C.R. 906, 38 L.C.R. 1. In St. Pierre the parties agreed that the owner had suffered a loss in the amount of $35,000 caused by the construction of a highway on abutting property. The issue was whether the loss was actionable at common law. The court found that it was not and that the loss agreed to was non-compensable.

Mr. Bauman further submits that the board "must be vigilant and not adopt without critical analysis" decisions made by the Supreme Court of Canada prior to St. Pierre. He referred to the decisions of Loiselle, supra, and City of Windsor v. Larson (1980), 20 L.C.R. 344, 114 D.L.R. (3d) 477 both of which were addressed and distinguished by McIntyre J., who delivered the judgment of the court, from the circumstances with which the court was faced in St. Pierre. McIntyre J. said at p. 915:

The same is true of the cases cited by Houlden J.A. in the Court of Appeal and relied on by the Land Compensation Board as instances in which recovery for injurious affection has been allowed. For example, in Loiselle, supra, the claimant's service station was left at the dead end of a cul-de-sac as a result of a diversion in a highway in order to accommodate the construction of the St. Lawrence Seaway. Similarly, in Larson, supra, a concrete median was built in the middle of the highway running in front of the claimant's motel, thereby severely restricting access with a resultant loss of value of the property. In both cases, the construction of the public works in close proximity to the land so changed their situation as to greatly reduce if not eliminate their value for the uses to which they had been put prior to the construction and could, therefore, be classed as nuisances.

Counsel cited The Canadian Pacific Railway Company. v. Albin (1919), 59 S.C.R. 151, 159, 49 D.L.R. 618 in which Anglin J., adopting in substance the language of Lord Cairns in Metropolitan Board of Works v. McCarthy (1874) L.R. 7 H.L. 243, 253, said that in order to succeed the claimant must show that

[t]here was "a physical interference with a right which the owner was entitled to use in connection with his property" which substantially diminished its value. [Emphasis added.]

He then referred to Weatherston J.A. in St. Pierre, (1983), 28 L.C.R. 1, 5 (Ont. C.A.) who commented that

surely it is not sufficient for the claimants merely to show an indefinable loss in the enjoyment of their property.

He submits that there must be more than an "indefinable" loss; that the loss must be caused by a "physical interference which substantially diminishes the value."

The District contends that all property in the neighbourhood may be affected but for sentimental reasons which are "indefinable" and for which the courts have not awarded compensation. As authority, counsel cited The King v. MacArthur (1904), 34 S.C.R. 570, 576-77:

It was never intended that where the execution of the works, authorized by Acts of Parliament, sentimentally affected values in the neighbourhood, all such property owners could have a claim for damages. In most of our large cities values are continually changing by reason of necessary public improvements made, and if , although no lands are taken, everybody owning lands in the locality could, by reason of the changed character of the neighbourhood or interference with certain convenient highways, claim compensation by reason of a supposed falling of the previous market value of property in the neighbourhood, it would render practically impossible the obtaining of such improvements.

Counsel submits that the claim for loss of amenities, that is, exposure and view, to and from Yale Road, as was the case prior to construction of the overpass, is not compensable at common law, and as authority cited McIntyre J. in St. Pierre at p. 916:

From the very earliest times, the courts have consistently held that there can be no recovery for the loss of prospect, ... .

The District further contends that construction of the overpass was not an unreasonable use of publicly owned land. The overpass was critically needed in the public interest to eliminate an intolerable conflict between vehicular and rail traffic. The conduct of the District is in the public interest and the utility to which the land was put was reasonable. Mr. Bauman again cited St. Pierre where McIntyre J. stated at p.916:

Moreover, I am unable to say that there is anything unreasonable in the Minister's use of the land. The Minister is authorized - indeed he is charged with the duty - to construct highways. All highway construction will cause disruption. Sometimes it will damage property, sometimes it will enhance its value. To fix the Minister with liability for damages to every landowner whose property interest is damaged, by reason only of the construction of a highway on neighbouring lands, would place an intolerable burden on the public purse. Highways are necessary; they cause disruption. In the balancing process inherent in the law of nuisance, their utility for the public good far outweighs the disruption and injury which is visited upon some adjoining lands. [Emphasis added.]

Mr. Bauman submits that the test in St. Pierre is difficult for an owner to meet; that it requires the virtual elimination of a property's utility for the uses to which it was put prior to the construction of a public project; and that the Supreme Court of Canada made it strict because of the threat to the public purse. He submits that should the board order compensation without a critical analysis of the application of a very general principle, the "floodgates" will be opened and the resultant impact on the public purse will seriously impair the ability of local government to fulfill its mandate and obligation to carry out projects for the public good.

Counsel strongly urged in his submission that the claimant's land remains easily accessible when travelling north and it is equally and conveniently accessible when travelling south. This is visually evident upon an examination of the aerial photograph tendered as Exhibit 6 (see Appendix "A"). The new ring road was specifically designed to give safe and uninhibited access to the claimant's land from either direction. in support of this submission, the District filed a report, dated November 22, 1991, prepared by Mr. E. H. Dobson, P.Eng., a partner in Reid Crowther & Partners Ltd., consulting engineers. This report addressed traffic and access related issues relative to the claimant's land before and after construction of the overpass. Mr. Dobson testified at the hearing.

In his report, Mr. Dobson concluded that the "overall access to the property and exposure of the property to the public is no worse than it was prior to the construction of the overpass." He stated that the purpose of the overpass was to eliminate "the detrimental impacts of heavy vehicular traffic" on Yale Road which was constantly in conflict with CN trains. He stated in his report that the District opted for a larger and more expensive span structure to provide "an interchange loop road at the south end of the overpass. The road provides direct and safe access to all vehicles travelling in either a northbound or southbound direction on Yale Road ..." and that access to the claimant's land

has been accomplished without compromising safety and roadway capacity. The overpass and the interchange access road have improved both of these critical operational criteria. This should result in some positive benefit to a future commercial development on the property as potential customers will soon realize that they can quickly and safely access the development via the interchange access road.

In Mr. Dobson's opinion, access is no longer inhibited by heavy volumes of traffic, the absence of a deceleration lane, and the daily passage of up to 20 CNR trains.

A second report on the issue of accessibility, dated December 4, 1991, was prepared by Mr. Peter Hume, a real estate market analyst, who testified on behalf of the District. At p. 4-2 of his report, he concluded that from

a market perspective, the Reimer Mobile Homes site now enjoys exposure to increased traffic flows, enhanced visibility and improved access which is both more convenient and safe. Access, in particular, is among the safest and most convenient available on Yale Road. Businesses best able to take advantage of the dedicated access to the site will be attracted ... The Reimer site now enjoys a high level of identity as a potential end-user will likely use the adjacency to the overpass as a key feature in marketing and advertising. Further, the new dedicated access creates a business cul-de-sac which potentially provides a more attractive business image as compared to the indistinguishable commercial activity currently fronting Yale Road.

In Mr. Hume's opinion, the claimant's land benefited from the construction of the overpass from a market perspective.

Mr. Bauman submits that if access is "less convenient" or that a "view [has been] interfered with", these facts alone do not give rise at common law to a compensable claim. As authority, he cited the definition advanced by counsel for Owen McCarthy in McCarthy at p. 249 which was quoted with approval by the Supreme Court of Canada in The King v. MacArthur at p. 573.

The principle to be deduced from a consideration of all the cases is this, that where by the construction of works there is a physical interference with any right, public or private, which an owner is entitled to use in connection with his property, he is entitled to compensation if by reason of such interference, his own property is injured. The word "physical" is here used in order to distinguish the case from cases of that class where the interference is not of a physical but rather of a mental nature, or of an inferential kind, such as a road rendered less convenient or agreeable or a view interfered with, or the profits of a trade, by the creation of a new highway or street, diminished in the old one. [Emphasis added.]

In conclusion, Mr. Bauman contends that the appraisal evidence indicates, in any event, that the claimant's land has not been depreciated as a result of the construction of the overpass and therefore the claimant has not incurred any loss.

(3)  The board's findings

(a)  The "public purse" argument

Counsel for the District urged upon the board that if compensation is ordered to be paid on the basis of the facts in this case the "floodgates" will be opened and local government could not afford the drain upon the "public purse" that would inevitably result. In reply to this line of argument the statement by Seaton J.A. in Cominco Ltd. v. Westinghouse Canada Limited et al. (1979), 11 B.C.L.R. 142, 151 (B.C.C.A.) seems appropriate.

No area of fact is closed on the ground that to enter it would "open the floodgates".

The concern expressed by the District has been addressed by the courts which have placed restrictions on claims for injurious affection where no land has been taken but where there has been interference with access. As stated by Wilson J. in The Queen v. Tener et al (1985), 17 D.L.R. (4th) 1, 22 (S.C.C.) that in such cases "the right to compensation has been severely circumscribed by the courts (see The Queen v. Loiselle (1962), 35 D.L.R. (2d) 274, [1962] S.C.R. 624)".

The conditions cited with approval by the Supreme Court of Canada in Loiselle each have a foundation in common law. Further, s.40 of the Act states that "the law respecting injurious affection where no land of an owner is expropriated" shall remain unchanged. And in answer to the question "Where will you draw the line?" Chief Justice Denman in The Queen v. Eastern Counties Railway (1841) 2 Q.C. 347 stated that if

extreme cases should arise, we shall know how to deal with them ... .

To entertain the "public purse" argument is to disregard jurisprudence developed over the last century with respect to the issue of interference with access.

(b) The four conditions - " The Queen v. Loiselle"

The four conditions that must be met in order to maintain a claim for compensation for injurious affection to property where none of the owner's land has been taken are well established. These conditions are set out above and have been recently cited with approval by the Supreme Court of Canada in St. Pierre at p. 909. If these conditions are met compensation is provided as a substitute for damages. In Horn v. Sunderland Corporation [1941] 2 K.B. 26 Scott L.J. stated at pp. 42-43:

It is a remedy for injuries caused by the works authorized by the Act to the lands of an owner who has had none of his land taken in that locality. The remedy is given because Parliament by authorizing the works, has prevented damage caused by them from being actionable, and the compensation is given as a substitute for damages at law.

However, before these conditions can be advanced by the claimant there must exist a statutory right on which a claim for injurious affection can be maintained. As stated by the Privy Council in Sisters of Charity of Rockingham v. The King [1922] 2 A.C. 315, 322, 67 D.L.R. 209:

Compensation claims are statutory and depend on statutory provisions. No owner of lands expropriated by statute for public purposes is entitled to compensation, either for the value of land taken, or, for damage, on the ground that his land is "injuriously affected", unless he can establish a statutory right.

Section 544(1) of the Municipal Act clearly applies where land has been injuriously affected as a result of anything being done by the District pursuant to its powers. Compensation for injurious affection under s.544(1) does not require that there be a taking of land. The only limitation for a claim for injurious affection is that it must stem from the exercise of a power under the Municipal Act.

The first condition, referred to as the "statutory authority rule", states that the damage claimed must have been caused by an act (construction of the overpass) which was lawfully authorized by the statutory powers vested in the authority responsible for that act (the District).

The second condition, called the "actionable rule", provides that the damage caused would have otherwise been actionable at common law but for the statutory authority given to the District under the Municipal Act to construct the overpass. In his text, The Law of Expropriation in Canada (Carswell, 1976) at p.295, E.C.E. Todd comments

that for practical purposes the statutory authority rule adds nothing to the actionable rule. In every case it will necessarily follow that if the damage would have been actionable but for the enabling legislation the damage must have arisen from an act rendered lawful by enabling legislation. If it is not so authorized the injurious affection will be actionable at common law and no question of statutory compensation will arise.

In this case the District pursuant to its statutory powers had authority to construct the overpass on Yale Road. The issue is whether the claimant would have had a cause of action at common law, but for the statutory power given to the District, for interference with access to their land.

In our opinion, St. Pierre has no application to the issue of interference with access and its attendant impact on the value of the land itself. In St. Pierre the claim was for loss of amenities; specifically, the loss of prospect, privacy, view and the disruption of a pastoral setting in a rural environment. These losses were characterized by the court as being indefinable and therefore not compensable. The damages agreed to by the parties in St. Pierre were unrelated to interference with access. See Jesperson v. District of Chilliwack, supra.

Section 40(2) of the Act preserves the common law in British Columbia with respect to injurious affection where no land is taken. The board finds that the claimant would have had a valid claim in damages under the general law had any person, without statutory authority, constructed the overpass and eliminated frontage to a major highway adjacent to and abutting its land. Loiselle, p. 627. The Municipal Act, which empowered the District to construct the overpass, expressly provides pursuant to s.544(1) an obligation to pay compensation for damage to those lands that have been injuriously affected. The board, therefore, concludes that with respect to the issue of interference with access, the first and second of the four conditions set out above have been met.

However, the claim for loss of exposure is not actionable per se. In St. Pierre, McIntyre J. at p. 916, speaking on behalf of the Supreme Court of Canada, held that a claim for "the loss of prospect or the loss of view" is a

... field of damage which may not be considered.

From the very earliest times, the courts have consistently held that there can be no recovery for the loss of prospect ... The law of nuisance will not extend to allow for compensation in this case. (Emphasis added.)

(Also see McCarthy at p. 249 and MacArthur at p. 573). In Beierbach v. City of Medicine Hat (1980), 21 L.C.R. 133, the Alberta Land Compensation Board found as a fact that a pedestrian overpass interfered with and restricted the view of a motel to passing traffic. It based its dismissal of the claim on the ground that at common law interference with or obstruction of a view is not actionable.

Accordingly, the board finds that the loss of view and exposure both to and from Yale Road does not give rise to a cause of action in common law which could have been pursued but for the statutory power exercised by the District. As the second condition, that is, the "actionable rule", has not been met with respect to the claim for loss of view and exposure, this portion of the claim is dismissed.

The remaining issue before the board is whether the degree of interference with direct access, arising from the construction of the overpass, has reduced the value of the land itself so as to successfully meet the third condition. This must not be an indefinable or sentimental loss but a measurable loss. As Lord Cairns stated in McCarthy at p.253:

... that where by the construction of works there is a physical interference with any right, public or private, which the owners or occupiers of property are by law entitled to make use of, in connection with such property, and which right gives an additional market value to such property, apart from the uses to which any particular owner or occupier might put it, there is a title to compensation, if, by reason of such interference, the property, as a property, is lessened in value. [Emphasis added.]

The third condition, referred to as the "nature of the damage rule", stipulates that the damage must be an injury to the land itself and not a personal injury or an injury to business or trade. The onus of proving any reduction in value to the land itself rests upon the claimant. In City of Windsor v. Larson et al (1980), 20 L.C.R. 344, 349, the Ontario High Court of Justice, Divisional Court, stated:

Needless to say, in each case a claimant must prove damages as a result of the interference with a private right.

Also see Black v. County of Brant (1972), 1 L.C.R. 325, 328-30 (former Ontario Land Compensation Board).

If the board finds that the market value of the claimant's land has been reduced in the manner contemplated by the third condition, compensation will be fixed; but conversely, if the board finds that the market value has not been so reduced, the application for compensation will be dismissed. The answer to this issue is dependent upon appraisal evidence and is addressed below.

6.  EVIDENCE OF MARKET VALUE

Each case involving injurious affection where no land is taken must be critically examined on its own peculiar set of facts. Without doubt, each case presents the trier of fact with difficult issues. In Cypress Anvil Mining Corporation v. Dickson et al. (1986), 8 B.C.L.R. (2d) 145, 158 (B.C.A.A.) our Court of Appeal gave direction to those faced with issues that are fact driven and upon which judgment must be made:

The one true rule is to consider all the evidence that might be helpful, and to consider the particular factors in the particular case, and to exercise the best judgement that can be brought to bear on all the evidence and all the factors. I emphasize: it is a question of judgement. No apology need be offered for that, Parliament has decreed that fair value be determined by the courts and not by a formula that can be stated in the legislation.

The most reliable evidence of comparable land values is found in the immediate vicinity of the claimant's land. The data from market activity in this area and appraisal evidence of three properties in particular, and the claimant's land itself, provides a sound basis from which a conclusion as to market value, both before and after the overpass, can be reasonably drawn.

(1)  The Ricketts-Sewell property

The first comparable, known as the Ricketts-Sewell property (zoned CSM), consists of two contiguous legal parcels of equal size located on the west side of and fronting Yale Road just South of the claimant's land. Combined, they provide 200 feet of frontage on Yale Road with a depth in the range of 260 feet. These parcels have a superior frontage to depth ratio. This property is referred to in the October, 1988 Fortin-Towler appraisal report at pp. 13 and 17. At p. 17 it is reported that there was "an accepted conditional offer in the recent past of $140,000. This suggests a per sq. ft. rate of $3.51." These parcels were listed for sale in May, 1987 for $79,000 each. The offer collapsed and the listing had apparently expired. In December, 1988 both parcels were purchased by the District as they were required for construction of approaches at the south end of the overpass. The purchase price was $177,250 or $4.44 per square foot. The price paid is consistent with an arm's length transaction as the cost per square foot is corroborated by all of the market indicators. Mr. R. N. Arnett, AACI, who gave appraisal evidence on behalf of the claimant, yet was unaware of the history of this property, testified that the unit value of $4.44 per square foot should be reduced by 25% for size on the basis that this property contained 39,944 square feet (0.917 acres) whereas the claimant's land contained 86,249 square feet (1.98 acres). This adjustment would indicate a value of $3.33 per square foot for the claimant's land as at December, 1988. It is this comparable upon which the board applies the most weight even though it was acquired by the District which has the power to expropriate. In The Law of Expropriation in Canada, supra, E.C.E. Todd at pp. 159-60 states that

[t]he fact that the purchaser of an allegedly comparable property is an authority having the power to expropriate merely goes to the weight to be given to the terms of sale and not to its admissibility.

Professor Todd then refers to the observation of Chief Justice Holmes in O'Malley v. Commonwealth (1902), 65 N.E. 30, 31; 182 Mass. 196, 198:

We cannot say merely because of the name of the purchaser that the sale was not a fair transaction in the market rather than a compulsory settlement.

The claimant did not question, comment on, or object to the evidence of this transaction.

(2)  The Marks Motel property

The second comparable, known as the Marks Motel property (zoned CSM), was south of but contiguous to the claimant's land. This property was improved, contained 43,149 square feet, and prior to the overpass, fronted Yale Road. It was purchased by the District in January, 1989 for $370,000, Mr. D.R. Grant, P.Ag., SR/WA, who gave appraisal evidence on behalf of the District, testified that he had appraised this property in November, 1988 on behalf of Mr. Marks at $3.50 per square foot for land only.

An appraisal of this property was also conducted by Fortin-Towler Appraisals Ltd. on behalf of the District. In its report, a land value of $3.25 per square foot was indicated as of October, 1988. At page 10 of this report the authors stated that there was an "excessive amount of vacant commercial land in the immediate vicinity." This observation was borne out by the long-term listings of the Ricketts-Sewell property and the claimant's land both of which were first listed for sale in 1984. In the Fortin-Towler Appraisals Ltd. report the claimant's land was identified at p. 26 as having been vacant "for many years".

Counsel for the claimant urged upon the board that the Marks Motel property was an excellent comparable. He stated that the improvements were to be demolished and that the price paid by the District was based primarily on land value only. Mr. Arnett deducted the assessed value of the improvements ($58,750) from the purchase price of $370,000. This calculation produced a residual land value of $7.15 per square foot. However, as the evidence unfolded, it became clear that the price paid by the District was considerably higher than market value. According to the uncontroverted testimony of the Mayor of Chilliwack, John Les, the final amount paid by the District to acquire this property was influenced by extraneous elements. The Mayor's evidence was that the owner, Mr. Marks, knew that the District could not proceed with construction of the overpass without first securing ownership of his land. A portion of this property was urgently required to effect a land exchange with Pioneer Building Supplies which operates a successful retail business on the adjoining property. The remaining portion was required for the new ring road. If the Marks Motel property could not be acquired, the District would have been saddled with the cost of relocating this retail outlet. The Mayor testified that the cost of relocation would have been prohibitive. Mr. Marks had initially offered his property to the District for $320,000. The offer was withdrawn before either its acceptance or rejection could be considered by the District's council. Mr. Marks subsequently re-offered the property to the District at $370,000. The new offer was accepted, according to the Mayor's testimony, with considerable reluctance. The purchase price included all claims for damages, business loss and improvements.

This property was a project driven acquisition which displaced the ordinary market forces that exist between "a free vendor and a free purchaser". Gagetown Lumber Co. Ltd. v. The Queen and A.- G. N.B. (1956), 6 D.L.R. (2d) 657, 666, [1957] S.C.R. 44, 56 (S.C.C.). In Gagetown, Rand J. stated that

[t]he primary question is of freedom in the negotiation as a fact, and it is for the tribunal, in the light of the circumstances, to say whether the price was influenced by extraneous elements, or whether the parties were concerned only to reach agreement on a figure deemed to be the fair value of the property. (Emphasis added.)

The price paid was not related to market value but was in the nature of a lump sum settlement. It was this type of transaction which Holmes C.J. was contemplating when he stated at p. 31 in O'Malley that if the judge below had found that "the evidence related rather to a settlement of damages occasioned by a taking than a sale, and had excluded the evidence on that ground, very likely we could not have said that he was wrong." The issue of admissibility of this comparable is one of relevance, not admissibility per se.

The significance of the Marks Motel property was its indicated residual land value in the Fall of 1988 well before it was acquired by the District. Two appraisals were commissioned: one by the District, and the other, by Mr. Marks. The indicated land value was $3.25 and $3.50 per square foot respectively. This range in value as of October, 1988 was supported by Mr. Arnett in his testimony. After making adjustments for time and size this comparable provides direct evidence as to the value of the claimant's land prior to construction of the overpass.

(3)  The Pioneer Building Supplies property

The third comparable is a 2.9 acre parcel south of but contiguous to the Marks Motel property which is owned and occupied by Pioneer Building Supplies. This property is also zoned CSM and similarly fronted Yale Road prior to the overpass. When cross-examined by the District's counsel, Mr. Arnett testified that he had appraised this property at $3.50 per square foot as of October, 1988.

(4)  The claimant's property

(a)  Appraised value - 1987

In September, 1987, the claimant commissioned Mr. Gordon C. Mitchell, a qualified appraiser, to conduct an appraisal of its land for the purpose of establishing a listing price. He valued the claimant's land as of September, 1987 at $263,000 or $3.05 per square foot. On behalf of the claimant, Mr. Reimer signed a listing agreement in January, 1988 at $260,000 or $3.01 per square foot.

(b)  Appraised value - 1988

Counsel for the District filed an appraisal report of the claimant's land, effective October 15, 1988 which had been prepared by Mr. Arnett. He had been commissioned by the claimant to appraise the land being the subject of this proceeding. The cost of this report, by previous arrangement, was paid for by the District. Mr. Arnett had appraised the claimant's land at $3.25 per square foot as of this date. As noted above, he had appraised the adjoining Pioneer Building Supplies land at $3.50 per square foot at the same time. At p. 12 of this report Mr. Arnett stated:

Bearing in mind the Land Use Zoning designation, CSM, the surrounding properties, and the general location of the subject, [I am] ... of the opinion that any of the permitted allowable uses would represent the Highest and Best Use. [Emphasis added.]

This conclusion is at variance with his opinion of December 12, 1990, referred to below, where he stated that the best use of the claimant's land before the overpass would be a high profile automotive or retail business at a value of $7.00 per square foot.

(c)  Mr. Arnett's valuation as of December 31, 1989

In preparation for this proceeding, the claimant commissioned Mr. Arnett to appraise its land both before and after construction of the overpass. Two reports, both dated December 12, 1990, were filed. The first report concluded that the value of the claimant's land "before" construction of the overpass but as of December 31, 1989 was $604,000 or $7.00 per square foot. The second report concluded that the claimant's land "after" construction of the overpass but as of December 31, 1989 was $302,000 or $3.50 per square foot. The board has reviewed in considerable detail Mr. Arnett's evidence in an attempt to find the basis on which he arrived at his "before" conclusion of market value. This conclusion was primarily based on his sale Nos. 5 and 6. However, under cross-examination, Mr. Arnett admitted to being unaware of all of the circumstances surrounding the transaction involving sale No. 5, the Marks Motel property.

Subsequently, Mr. Arnett stated that his most reliable indicator of value would be his sale No. 6 (the "Farmers' Market"). This property is improved with frontage on the west side of Yale Road and is located contiguous to but on the south side of the Ricketts-Sewell property. It contains 23,087 square feet. When the value of improvements of $40,000 is deducted, as suggested by Mr. Arnett, the residual land value is equivalent to $6.72 per square foot based on the June, 1989 sale price of $195,000. This property is only 27% the size of that of the claimant's and has a superior frontage-to-depth ratio. Mr. Arnett made an upward adjustment for time at a rate of 4.5% per cent per month. This rate is not supported by the evidence. The appropriate rate for a time adjustment is in the order of 0.5% per month, which would produce a unit rate of $6.92 per square foot as of December 31, 1989.

At a hearing before this same tribunal held one month prior to this proceeding, Mr. Arnett testified that an adjustment for time during 1989 would be in the range of 0.5% per month. That hearing (Jesperson v. Chilliwack, supra) similarly dealt with a claim for pure injurious affection arising from the construction of the overpass which is the subject of this proceeding. Counsel for the District submitted in evidence an extract from the transcript in that proceeding. The questions and Mr. Arnett's answers relating to market conditions between October, 1988 and January 1990 are as follows:

Q.	Indeed the market conditions likely were different between October 1, 1988 and January 1, 1990. Is that fair?
A.	That's correct.
Q.	So. I am suggesting to you that you can't say, with any certainty, that the difference in value you arrive at is attributable solely to the overpass?
A.	Based on those two different dates, there might be a slight variation, however, we found that there was maybe a slight increase in time, you know, in the time factor, a slight increase in values. However, probably not terribly significant.

By comparison, in this proceeding he testified that an adjustment for time during the same period was in the range of 4.5% per month. His evidence in this regard is irreconcilable with his testimony in the Jesperson v. District of Chilliwack, supra, hearing.

A size adjustment to his sale No. 6 is also required. Mr. Arnett testified that a size adjustment of 25% should be applied to the Ricketts-Sewell property which is approximately one-half the size of the claimant's land and roughly twice the size of his sale No. 6. Applying his rationale, a downward adjustment to the unit rate of $6.92 per square foot in the order of 50% would of necessity have to be made. After making this adjustment for size, the indicated value of the claimant's land would be $3.46 per square foot. The risk inherent in making an adjustment of this magnitude is evident and serves to demonstrate why Mr. Arnett's sale No. 6, adjusted by him to $7.25 per square foot for the claimant's land, is not a comparable upon which the board can rely.

(d)  Mr. Grant's valuation as of December 31, 1989

Mr. Grant in his report of February 17, 1992, commissioned by the District, stated at p. 33 that

[i]t would appear that prior to the project, in 1988 or 1989, that the value of the subject property was less than $3.00 per square foot. After the project, in 1991 and early 1992, the value would appear to be between $3.00 and $4.00 per square foot.

He testified that his instructions were to estimate any change in market value arising from the overpass. After reviewing all relevant factors which, in his opinion, could affect land values, he concluded that the claimant's land had not suffered any loss in market value as of the agreed date of valuation, that is, December 31, 1989. Mr. Grant acknowledged that although the view of the claimant's land for "southbound traffic on Yale has been affected by the overpass that the convenience of the location has not been measurably impacted."

Counsel for the claimant urged upon the board that two comparables, sale Nos. 7 and 9, contained within Mr. Grant's report, support the range of value which should be attributed to the claimant's land prior to the overpass.

Sale No. 7, the Nissan property, consists of three contiguous parcels totalling 53,012 square feet with frontage on both Yale Road and School Street. It is two blocks closer to the District's town centre, and is smaller in size (61%). At the time of sale, December, 1989, a car dealership occupied the site. It is now a used car showroom and lot together with a transmission shop. The structure on this site is 5,368 square feet bearing an actual value assessment of $229,000 plus $5,000 for paving for a total improved assessment of $234,000. In Mr. Grant's analysis of sale No. 7, land value was arrived at by deducting the improvements assessed at $234,000 from the December, 1989 sale price of $500,000. This produced a residual land value rate of $5.00 per square foot. Reliance upon an assessor's opinion of the value of the improvements rather than that of the parties to the sale weakens by a considerable degree the conclusion made. Sale No. 7 is of little assistance due to the conflicting evidence regarding the contributory value of the improvements. Mr. Grant did not make any adjustments for either time or size to this evidence.

Sale No. 9 consists of seven adjoining lots just south of the Trans Canada Highway on the northeast corner of Vedder and Knight Roads. It contains 63,642 square feet, is zoned CSM and sold in April, 1990 for $565,000 or $8.88 per square foot. This property is located at a main intersection serving a major shopping centre south of the Trans Canada Highway. Its distance from the claimant's land alone questions the relevancy of this property as a comparable. Mr. Grant's testimony was that it was not of much help in establishing land values of those properties which fronted Yale Road in the vicinity of the claimant's land.

(e) Estimated market value based on capitalization of lease

In January, 1989, subsequent to the expiry of the January, 1988 listing at $260,000 or $3.01 per square foot, the claimant was approached by an agent for the District as it required the claimant's land on which to construct a detour road to handle traffic while the overpass was under construction. Mr. Reimer testified that he offered to sell the land to the District for $235,000 or $2.72 per square foot. He further testified that the drop in price was roughly equivalent to the commission which would have been otherwise payable if the listing at $260,000 had not expired. Since a price satisfactory to the District could not be concluded, the parties entered into a one year lease, commencing October 1, 1988, which included an option to renew. The lease called for an annual rental payment of $32,000 payable in advance. It was further agreed that the District would pay all real property taxes during the term of the lease. As the overpass was not completed, as expected, by September 30, 1989, the District exercised its option to renew the lease for a further three month term at a rental of $8,000 payable in advance plus real property taxes for the renewal period.

During the 15 months from October 1, 1988 to December 31, 1989, the claimant's land, though exposed to the market, was now encumbered and any potential sale, would, of necessity be subject to the terms of the lease.

The prime lending rate of the banker to the Province of British Columbia over this 15 month time frame ranged from 10.75% to 13.25% with an average of 12.00%. Since land remains in perpetuity, it typically attracts a lower rate of return. In the board's opinion, a rate of 11% per annum or 1% below the prime lending rate would be fair. The claimant suggested 10% but did not tender any evidence as to what the rate ought to be. The capitalized value of this care-free investment is $290,909 ($32,000 divided by .11) which is rounded to $291,000 or $3.37 per square foot. Although the land lease is silent as to the exact site area impressed, the area outlined in heavy black on the plan annexed as Schedule "B" to the lease, which includes that part formerly fronting Yale Road, is roughly equivalent to 80% of the total area of the claimant's land. Accordingly, the unit rate of $3.37 per square foot would be revised upwards, but nominally only, as that portion of the claimant's land not impressed by the lease was back land and which, prior to construction of the overpass, contained the area having the lowest unit value.

As the lease was for a very short term, its capitalized value does not provide an accurate indicator of market value. In addition, the rental paid by the District could have been influenced by extraneous elements as it was the only property on which a detour road could be located during construction of the overpass. In any event, a unit rate in the range of $3.37 per square foot is corroborative of that evidence indicating the value of the claimant's land to be in the order of $3.25 per square foot towards the end of 1988.

(f)  The board's conclusion of market value as of October, 1988

All exhibits filed and the testimony heard in this proceeding indicated that land values in the immediate vicinity of the claimant's land, including the claimant's land itself, ranged between $3.25 and $3.50 per square foot in the Fall of 1988. Mr. Arnett placed a value on the claimant's land of $3.25 per square foot as at October 15, 1988. Mr. Grant testified that the Marks Motel property had a residual land value of $3.50 per square foot and the Fortin-Towler report indicated a residual land value of the same property to be $3.25 per square foot. Mr. Arnett testified that he estimated the value of the Pioneer Building Supplies property, one lot removed and south of the claimant's land, at $3.50 per square foot. Mr. Arnett further testified that the unit value of the Ricketts-Sewell property, located on the west side of Yale Road and slightly to the south of the claimant's land, was in the range of $3.33 per square foot after making an adjustment for size. All indicators of market value of the claimant's land and that of its neighbours are consistent with one exception.

The one exception is Mr. Arnett's "before" report in which he valued the claimant's land at $7.00 per square foot. His conclusion as to value cannot be "squared" with his October 15, 1988 report, prepared 14 months earlier, at $3.25 per square foot. If the board were to accept his monthly rate of increase of 4.5%, which is contradicted by his own evidence, as set out above, his conclusion as to value of the claimant's land would have been $456,400 or $5.29 per square foot. Yet, Mr. Arnett abandoned this monthly rate and concluded that the claimant's land as of December 31, 1989, but before the overpass, was valued at $604,000 or $7.00 per square foot.

After analysing Mr. Arnett's "before" report and reviewing his testimony, the board must reject his findings on the basis that there was no foundation in either his research or his analysis to support the value conclusion reached. This conclusion is best expressed by adopting the words of Lord Dunedin in Cedar Rapids Mfg. and Power Co. v. Lacoste (1914), 16 D.L.R. 168 at p. 172:

It is difficult to conceive evidence more honeycombed by fallacy than this.

From reading the appraisal reports, reviewing in detail the exhibits filed, hearing the evidence and considering the submissions of counsel, the board finds that the value of the claimant's land as of October, 1988 was $3.25 per square foot.

7.  TIME ADJUSTMENT

(1)  Generally

An adjustment is required to span the interval between October 1, 1988 and the agreed upon date for valuation of the claimant's land, December 31, 1989. This is necessary for the purpose of placing evidence of land values on a common footing. It will also assist in determining whether the claimant's land was in step with the rest of the market, or whether the impact of the overpass had adversely affected value.

The claimant's land had been listed for sale since October, 1984, approximately three years before it was purchased by the claimant. It had therefore been well exposed to the market. The listing price had been reduced in stages and over time from $180,000 to $120,000. Mr. Reimer testified that he had received overtures from two potential tenants who were interested in locating retail outlets in the Chilliwack area. Apparently on the strength of this expression of interest, Mr. Reimer, on behalf of the claimant, signed an interim agreement of purchase and sale to acquire the land for $110,000 or $1.28 per square foot. The closing date for the purchase was October, 1987. On September 25, 1987, after reading an announcement in the local newspaper, Mr. Reimer became aware of the District's decision to build the overpass. He completed the purchase nonetheless. The market place would have taken into consideration that an overpass was going to be built sooner than later as it had been the subject of discussion, according to the evidence, in the community of Chilliwack for a considerable period of time. Perhaps this possibility was reflected in the price paid by the claimant when the purchase was made.

Since its purchase in 1987, the claimant's land, which has been continuously exposed for sale elicited only two expressions of interest. It was relisted in January, 1991 at $299,000 or $3.47 per square foot; however, it should be noted that the computer printout of the Multiple Listing Service indicated the listing price to be $349,000 or $4.05 per square foot. This printout was appended to Mr. Grant's appraisal report. The multiple listing price was confirmed by the testimony of Mr. Art Daher, the claimant's real estate agent. Mr. Daher is an experienced commercial realtor who resides in Chilliwack, and in whom Mr. Reimer placed considerable confidence. The listing service described the claimant's land as a "prime commercial industrial development site" having "good access" and "excellent exposure". When testifying, Mr. Daher stated that while exposure was affected as a result of the overpass, he did not retreat from this description.

(2)  Offers to purchase as basis for calculation

In January, 1989, the claimant was prepared to accept $235,000 or $2.72 per square foot from the District. In September, 1991, 32 months later, Mr. Reimer testified that the claimant accepted an offer, which subsequently collapsed, of $270,000 or $3.13 per square foot. This represents an increase of 15% over 32 months, or approximately 0.5% per month on a straight-line basis.

Mr. Reimer further testified that the claimant had received another offer to purchase in the Summer of 1991 in the amount of $290,000 or $3.36 per square foot. A copy of this offer was requested by the board but it was never tendered in evidence. This offer also collapsed, but accepting its validity, it would support a time adjustment of 23.4% over approximately 30 months from January, 1989, or 0.78% per month on a straight-line basis.

(3)  Listing prices as basis for calculation

A similar time adjustment can be extracted from the listing price history of the claimant's land. In January, 1988 it was listed for $260,000 and in January, 1991, just after construction of the overpass had been completed, it was listed for $299,000. This indicates a 15% increase over 36 months or 0.42% per month on a straight-line basis.

(4)  The board's conclusion

The market activity, including both listings and offers, on the claimant's land provides some evidence on which to calculate a time adjustment between October 1, 1988 and December 31, 1989. It is a given that listing prices tend to reflect the most optimistic view of an owner. In Lim v. The Queen et al (1977), 12 L.C.R. 326 the Federal Court of Canada, Trial Division, addressed this point.

There is a well-established principle that if an owner places a value on his property by listing it for sale at a certain price, this should be deemed to be the maximum which should be paid for it. This was applied in Roberts and Bagwell v. The Queen (1955), 1 D.L.R. (2d) 11, 73 C.R.T.C. 150 [affirmed 6 D.L.R. (2d) 305, (1957] S.C.R. 28, 75 C.R.T.C. 77].

The price escalation indicated by offers and listings are accepted by the board as being indicative of the time adjustment which could reasonably be applied during the interval period. Using this method, an escalation of 0.5% per month on a straight-line basis is appropriate for the 15 month period from October 1, 1988 to December 31, 1989.

Trends indicating monthly increases expressed as a percentage both before and after the overpass, prepared by Mr. Arnett, were tendered as evidence. Seven indicators were used and all, with the exception of two, were either anomalous or irrelevant. The board does not accept his testimony of 4.5% per month for the reasons set out above in section 6.(4)(c). Sale Nos. 2 and 3 are comparable in size, the one with the other, and located closely together on Railway Avenue. Sale No. 3 sold in January, 1988 at $4.40 per square foot and Sale No. 2 sold in October, 1990 at $5.05 per square foot, an increase in 34 months of 14.77% or 0.43% per month on a straight-line basis.

Mr. Grant prepared a report, dated March 18, 1992, which included a band graph on time adjustments in which he concluded at p. 10, after conducting a detailed analysis of comparables used by Mr. Arnett both in this and a previous proceeding (Jesperson v. Chilliwack, supra), that while "these rates are in a broad range, [they] indicate an average of about 0.2% per month" during the interval between January, 1989 and December, 1989. His report further concluded that after the overpass had been completed, "the predominant rates of increase ... are in a broad range but indicate an average of about 0.2% per month" up to and including December of 1990.

The board finds that the time adjustment for the 15 month period between October 1, 1988 and December 31, 1989 to be 7.5% which produces a unit value for the claimant's land of $3.49 ($3.25 x 1.075) per square foot before construction of the overpass. This is equivalent to $301,332 (86,249 square feet x $3.49 per square foot) which is rounded to $301,350.

Further, the board is satisfied from the evidence of rates of increase both before and after construction of the overpass that the claimant's land was in step with the market place and that the overpass did not adversely impact the value of the claimant's land. The appraisal evidence, moreover, does not support the claim that the value of the claimant's land has been substantially diminished as a result of the construction of the overpass.

The claimant has not established in the words of Lord Cairns at p. 253 in McCarthy that "by reason of such interference, the property, as a property is lessened in value." Accordingly, the board finds that the third condition, that is, the "nature of the damage rule", has not been met.

The fourth, and last condition, known as the "construction rule", provides that the damage to the claimants' land must be caused by the construction of a public work and not by its user. The application by the claimant for compensation was based on the structural presence and location of the overpass and its negative impact on the value of the land itself. The evidence did not bring into issue the use to which the overpass was being put, nor any resultant damage caused by its users. In any event, it would appear that the "construction rule" does not apply to a claim for injurious affection pursuant to s.544(1) of the Municipal Act as compensation under this section is not limited to injury caused by the construction of a public work. In Currie et al v. Village of Chase (1986), 35 L.C.R. 293, 297 (B.C.S.C.) Spencer J., relying upon City of Toronto v. J.F. Brown Co., stated that compensation is

payable and arbitrable for any injurious affection caused either by construction or use ....

8.  THE BOARD'S FINAL DISPOSITION

The board finds that the claimant is not entitled to compensation for injurious affection, as alleged, pursuant to s.40(3)(a) of the Act and s.544(1) of the Municipal Act and therefore the application for determination of compensation is dismissed.

9.  COSTS

The District asked that its costs be paid by the claimant should the board find that the claimant's land had not been reduced in value as a result of the construction of the overpass. While the claimant has not achieved success, the board is not prepared to exercise its discretion in favour of the District pursuant to s.44(6) of the Act and award costs against the claimant. Each party shall be responsible for its own costs.

EXPROPRIATION COMPENSATION BOARD

John H. Heinrich, Q.C.
Chairman

Michael R. Grover, AACI
Board Member

David J. Clark, AACI
Board Member

 

APPENDIX "A"