February 10, 2003, E.C.B. Control No. 57/01/232, 58/01/232, 59/01/232, 60/01/232, 61/01/232, 62/01/232, 63/01/232, 64/01/232, 65/01/232, 66/01/232

INDEX

REASONS FOR DECISION

1.  INTRODUCTION

[1]  The claimants are all owners of residential properties on Government Street, in Penticton British Columbia. There are a total of six residential properties in these proceedings. The claimants Arthur and Patricia Clements own 1014 Government Street as joint tenants. This is the only property of the six at issue in these proceedings that is not owner occupied but rented to tenants. The claimant Edith Ferguson owns 739 Government Street, the only property in these proceedings that is located on the west side of Government Street. The claimants Lorne and Irene James own 1438 Government Street as joint tenants. The claimants Rodney and Linda Penfold own 740 Government Street as joint tenants. The claimants Kenneth and Eleanor Potter own 756 Government Street as joint tenants. The claimant Neta Warner owns 732 Government Street.

[2]  On March 12, 2001 the respondent, the Corporation of the City of Penticton, pursuant to the Expropriation Act, R.S.B.C. 1996, c. 125 ("the Act"), took land from the front yards of these six residential properties in connection with a widening of Government Street. The five properties on the east side of Government Street had a strip taken from the front of the properties that was approximately 2.43 metres or eight feet in width. A sidewalk was constructed on part of the taking as well as the widening of Government Street. Edith Ferguson's property was the only property on the west side of Government Street. It was located on the corner of Government Street and Gahan Avenue. A narrower strip, that varied in width but averaged about 0.6 metres (two feet), was taken from the frontage as well as the corner of the property nearest Gahan Avenue. The construction work associated with the widening of the roadway and the creation of the sidewalk was carried out during 2001 and Government Street was reopened at the end of August 2001.

[3]  A preliminary issue in this case was the number of claims. Was it appropriate under the Act for husbands and wives as joint tenants of a property to have their interest valued separately? The primary issue that was emphasized by the claimants was the effect of section 33 of the Act on the valuation of the property. Section 33 requires the board to ignore any increase or decrease in value of the land resulting from the development for which the land was taken or from a bylaw made with a view to the development. Was the development that was to be ignored merely the construction work carried out in 2001, that widened Government Street? Or was the development more wide ranging requiring the board to ignore any consideration of Government Street as a busy arterial road, including the steps taken by the respondent over many years to facilitate the use of Government Street as an arterial road? As a result of the differing interpretations of the effect of section 33 the parties differed significantly in their opinions on the market valuation of each of the subject properties before and after the taking. Penticton denied that there had been any reduction in market value as a result of the project. Another issue was the valuation of landscaping and other improvements that were taken and the valuation of the benefit of replacement work carried out by Penticton under section 44 of the Act. Finally there were numerous claims for personal losses almost all of which Penticton disputed. We must consider whether they were directly attributable to the partial taking or resulted from the construction or use of the works for which the land was expropriated.

[4]  The hearing commenced in April 2002 and evidence was heard over eight days. The main argument was completed on May 3, 2002. At a case management held October 3, 2002 it was agreed to allow new evidence with respect to a particular white spruce tree on Ms. Ferguson's property by supplementary affidavits. Mr. Burke, counsel for the claimants, filed an affidavit from Mr. Ferguson on October 9, 2002. Mr. Yardley, counsel for Penticton, filed an affidavit and a written submission on January 28, 2003.

2.  BACKGROUND

2.1  Neighbourhood

[5]  Much of the background information that we found to be relevant in this section was provided by the claimants' appraiser, Danny Grant.

[6]  Penticton is located on the approximately five kilometre strip between two lakes; Okanagan Lake to the north and Skaha Lake to the south. Highway 97 is the primary north-south route carrying virtually all traffic from the south and north along the west side of the city. There is only local traffic on the east side of Skaha Lake to the south. On the east side of Okanagan Lake there is a road that ends a short distance past Naramata, a small community a few miles north of Penticton. The downtown centre of Penticton is located at the north end of the city near Okanagan Lake and is centred on Main Street. Main Street is a north-south arterial. There are other north-south arterial streets in the downtown core adjacent to Main Street. Government Street is also a north-south arterial approximately half a kilometre to the east of Main Street. Both Main Street and Government Street lead into arterial or collector roads for the road running along the east side of Okanagan Lake to Naramata. The north end of Government Street also leads into the downtown area and residential development on the east side of Penticton makes use of Government Street to access the downtown. The properties on the north end of Government Street including the six subject properties are residential. The properties adjacent to the southern part of Government Street on the far side of Ellis Creek are zoned industrial. According to the claimants' appraiser, Mr.Grant, industrial traffic heading to or from the south part of Government Street is likely to access Highway 97 by the most direct east-west district collector, Industrial Avenue, and not travel past the subject properties.

[7]  According to Mr. Grant most of the residences on the subject parcels are at least 50 years old. Edith Ferguson's house appeared to be the oldest but was being renovated by the Fergusons to emphasize its heritage character. Lorne and Irene James built their house at 1438 Government Street in the 1950's. Kenneth and Eleanor Potter purchased their property at 756 Government Street in 1965. Rodney and Linda Penfold bought their property at 740 Government Street in 1978. Neta Warner bought her property at 732 Government Street in 1988. Don Ferguson testified that he and his wife had bought the property at 739 Government Street that is now in his wife's name in 1989. Arthur and Patricia Clements bought their property at 1014 Government Street in 1993.

[8]  There was evidence that the population of Penticton increased at an average of 3% a year between 1986 and 1996 from approximately 23,500 to approximately 32,000. Since then the population has been relatively static with Statistics Canada showing a 0.0% change between 1996 and 2001.

[9]  At the end of 2000 Statistics Canada reported unemployment in the Thompson Okanagan region at 9.2% which was higher than in British Columbia overall (7.2%) or in Canada (6.8%). Construction activity in Penticton has declined since 1992 and the average price of a residential unit has been relatively stable since 1994 varying between a low of $128,442 (1999) and a high of $135,577 (1997), with $131,093 in 2000, the most recent reported year. The total number of residential sales had declined approximately 30% from highs of about 1,800 a year between 1989 and 1993 to about 1,200 between 1998 and 2000.

2.2  Urban Systems Ltd. Penticton Roadway Network Study

[10]  Urban Systems Ltd. a consulting engineer firm, provided a report to Penticton in November 1996 entitled Penticton Roadway Network Study. This report stated that its purpose was to develop a long-range plan for roadway network improvements over the next 20 years. It assessed the existing road network, reviewed anticipated demographic changes and identified problems and potential problems that could be improved. One of the four key objectives was to identify opportunities to incorporate bicycles into the existing road network system. The report went on to define the capital costs required to provide the recommended improvements. The Senior Transportation Planner with Urban Systems who signed the cover letter for this report, John Steiner, was called to give evidence.

[11]  Ian Stout, the public Works Manager for Penticton, stated that Penticton requested updates of these consulting engineering reports on the long-range plans for the road network and other utilities every five years or so. While every recommendation of Urban Systems was not necessarily accepted, the reports were an important resource in making public works decisions.

[12]  The 1996 Penticton Roadway Network Study identified the current problems in the road network system. Mr. Steiner explained that in urban areas intersections were usually the source of most delay. Government Street itself was under-utilized in 1994 at less than 60% of recommended traffic lane capacity for an arterial road, even with peak afternoon traffic in the summer. However, there were two four-way stop intersections on Government Street that had traffic volumes beyond the usual range for four-way stops. Preliminary analysis revealed that they would operate at an acceptable delay time per vehicle if they were signalized. One of these intersections near some of the subject properties was signalized along with other construction work in 1999.

[13]  The Study set out the current Road Design Standards in 1996 for pavement widths for various designations of roads. There were five categories for urban roads: Residential roads with pavement widths at 10 metres, Local Collectors with 12 metres, District Collector and Undivided Arterial with 14 metres and Divided Arterials with varying pavement widths. While Residential roads, Local and District Collectors had two lanes for traffic, both types of Arterials had four lanes for traffic. We were told that these design standards are in the Subdivision and Development bylaw.

[14]  One of the main components of the Penticton Roadway Network Study was how to make better provision for bicycles in the existing road network. One of the low cost options that was put forward was a shared roadway where the traffic lanes had a minimum width of 4.3 metres that could be shared with bicycles. Where there was on-street parking a minimum width of 2.5 metres was recommended. A cross section of a 14 metre road showed two parking lanes of 2.7 metres and two centre lanes for traffic of 4.3 metres with bicycles in between the parked cars and the traffic. This report appears to have been at least part of the reason for the two bicycle lanes on Government Street after the widening.

[15]  The Study also did some demographic analysis and considered future transportation requirements. The Study assumed an average annual growth in population of three percent and projected the population in 2002 and 2014 at 38,000 and almost 54,000 respectively. It projected how the assumed growth would be distributed in terms of new residential development and new employment opportunities. Average growth was expected on Government Street with some commercial but mainly multi-family residential development. Projected vehicular trips were estimated for different zones of the city based on the assumptions about population growth. The Study stated that four traffic lanes on Government Street would be necessary to meet traffic demand by 2014. It also discussed various options some of which would tend to facilitate greater use of Government Street and some of which would divert traffic from Government Street and back to the Highway.

2.3  Traffic Levels

[16]  Mr. Grant reports daily two way traffic counts south of the subject properties on Government Street at Duncan Avenue, a short distance south of the subject properties, as 9,140 in 1976; 7,142 in 1978; 8,164 in 1982; 10,041 in 1987 and 10,893 in 1994. The dates for these counts are not specified but for the indication that they are summer counts, except for 1994. There was evidence of somewhat higher 24 hour two way traffic counts on Government Street south of Eckhardt Avenue in the vicinity of the subject properties in May 1993, 14,614 vehicles and in April 1994, 13,712. Finally there was a 24 hour two way traffic count on Government Street north of Duncan Avenue after the project was complete on October 18, 2001 of 13,700. The 1996 Penticton Roadway Network Study reported peak afternoon hourly rates of vehicles on Government Street at Eckhart Avenue in the summer of 1994 at 490 in each direction. The Study reported that morning peak traffic was about 65% of the afternoon peak or 320 in each direction. The Study also reported that summer traffic could be as much as 25%, 30%, and 40% higher than traffic for the rest of the year depending on the location, although it seems that Government Street is not one that suffers the greatest impact from summer traffic. Finally, the Study projects an increase in the traffic based in part on the assumption of increases in population of 3% a year and other assumptions about particular journeys made to arrive at projected estimates of traffic levels on Government Street in 2002 and 2014 that are significantly higher than 1994.

2.4  The Project

[17]  Before the work in 2001 this portion of Government Street had a paved road width of 12.5 metres or 41 feet. We understand that this width dated from at least 1965 which was the approximate date of earlier major construction work on Government Street. Before 2001 there was no sidewalk on much of the east side of Government Street. Mr. Stout, the Public Works Manager for Penticton, testified that by the late 1990's the road structure on Government Street had failed. There were frequent potholes and although they were filled the road surface was cracked and uneven. It came to a point where repaving alone did not make economic sense without a rebuilding of the base structure. If the road base was to be rebuilt, the decision was made to incorporate the widening that would be needed when the population projections contained in the 1996 Penticton Roadway Network Study eventually materialised.

[18]  The taking from the five east side properties was a strip that was approximately 2.43 metres or eight feet wide. A 1.5 metre (four foot) sidewalk was constructed in the area taken together with a curb and a cable strip. The paved road width of Government Street after the project is now 14 metres or 45.9 feet. There continues to be two lanes for traffic at the present time with a parking lane on both sides of the street and two marked bicycle paths in between the traffic lanes and the parking lanes.

[19]  The claimants say that that although the work on widening Government Street occurred in 2001, the development of which it was a part had been ongoing for many years. The claimants have drawn our attention to the following bylaws and budget decisions made by Penticton in the last 20 years:

• In 1982 it appears that the first Official Community Plan ("OCP") was adopted by bylaw. It designated parts of Government Street as an arterial road which was described in the OCP as a road that "function[ed]  to connect main areas of development and provide links with the regional network". The description went on to provide that arterials may require, depending on location and future development, widening to provide for four travelling lanes.
• In 1988 a bylaw amending the OCP extended the length of Government Street that is arterial at the northern end. The description of arterial roads continues to say that they "connect main areas of development and provide links with the regional highway system".
• In 1990 a bylaw stated "no buildings … shall be constructed on land that is located within an existing or future right of way of any arterial highway".
• In 1991 a bylaw provided "a setback from a highway shall be measured from the parcel boundary contiguous to that highway, provided that where a highway is designated as … "Arterial" in the Penticton [OCP], the setback shall be measured from where the boundary of the … Arterial would meet the parcel if that highway was constructed".
• In 1993 a bylaw amending the OCP extended the length of Government Street that is arterial at the southern end. Arterial roads continued to be described as ones that "connect main areas of development and provide links with the regional highway system." Again these roads "depending on location and planned developments, may require a pavement width adequate to accommodate four travelling lanes." Parts of specified roads not including Government Street are recognized as Provincial Highway with the primary purpose to accommodate through regional traffic.
• In 1997 a bylaw authorized expenditures for storm drainage improvements on Government Street;
• In 1998 the five year general capital budget provided for expenditures of monies to upgrade Government Street;
• In 1999 the five year general capital budget provided for expenditures of monies to upgrade Government Street;
• In 1999 a section of Government Street to the north of the subject properties was widened;
• In 2000 there was a resolution to carry out the work on widening the section of Government Street in front of the subject properties in 2001; Penticton wrote the property owners on August 25, 2000 advising them of this upgrading work;
• In February 2001 a bylaw authorized the expropriation of the subject properties;
• In March 2001 the subject properties were expropriated;
• In March 2001 the recommendation of the Bicycle Advisory committee to allow parking on both sides of Government Street and painting of hybrid cycle lanes was adopted;
• In August 2001 the widening of the section of Government Street in front of the subject properties was declared complete.

3. NUMBER OF CLAIMS

[20]  The claimants say that the interests of the four spouses who own property as joint tenants should be valued separately. They concede that the reason for filing separate claims for each of the joint tenants is related to costs but state that this approach is sanctioned under sections 30 and 31 of the Act.

[21]  Penticton submits that the claims should not be valued separately. As joint tenants, the husbands and wives did not have separate interests. Filing separate claims only resulted in an artificial duplication of proceedings.

[22]  Subsections 30(1) and 31(3) of the Act provide:

[23]  The board has considered the issue of more than one claimant's interest in a property in several cases. A tenant's interest has been valued separately, as has a person with an easement or an option to purchase. See El & El Investments Ltd. v. School District No. 36 (Surrey) (1995), 56 L.C.R. 112 (B.C.E.C.B.); Maddocks v. Surrey (City) (2001), 73 L.C.R. 161 (B.C.E.C.B.); Captain's Square Holdings Ltd. v. British Columbia (Minister of Transportation and Highways) (1997), 61 L.C.R. 68 (B.C.E.C.B.); Glendale Trading Ltd v. British Columbia (Minister of Transportation and Highways) (2000), 70 L.C.R. 235 (B.C.E.C.B.). However, this board refused to value a purchaser's interest under an interim agreement separately from the vendor's interest despite submissions made under section [31(3)] to do so. Rather the vendor held the property in trust for the purchaser and the purchaser was entitled to claim the entire market valuation of the property subject to the vendor's charge for the unpaid purchase price. See Kliman v. School District No. 63 (Saanich) (1994), 54 L.C.R. 242 (B.C.E.C.B.); aff'd (1997), 60 L.C.R. 246 (B.C.C.A.). Similarly, this board refused to value a mortgage holder's interest in a property separately from the owner's interest. Despite specific legislative provisions for the valuation of a security interest by means of the market value of the security interest approach, the board held that it was impractical to value the mortgagee's interest in a property separately where there was no evidence of the market value of the mortgage. The owner of the property was entitled to the entire market value of the property subject to the charge of any mortgage. See Hawk Investors Ltd. v. British Columbia (Minister of Transportation and Highways) (1999), 66 L.C.R. 94 (B.C.E.C.B.).

[24]  Joint tenancy is defined in Black's Law Dictionary, 5th ed. (St. Paul, Minn.: West Publishing Co., 1979) as follows:

… Joint tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession …

If joint tenants have one and the same interest then neither joint tenant has a separate interest in the land that is to be established separately under section 31(3). We note that in Cejka v. Cariboo Regional District (1993), 51 L.C.R. 113 (B.C.E.C.B.); reversed on other grounds (1994), 53 L.C.R. 85 (B.C.C.A.) the majority of this board found that the respondent's issuance of a joint cheque to the claimants as joint tenants was not in breach of the procedural requirements under the Act.

[25]  The board has previously considered the issue of separate bills of costs being submitted on behalf of a husband and wife who together owned a property that had been partially expropriated. See Yue v. Surrey (City) (2000), 74 L.C.R. 64 (B.C.E.C.B.). In that case there had initially been one Form A filed in the names of both claimants. The Chair, Robert Shorthouse, stated at page 65:

… in my view, it is inappropriate in these circumstances to render separate bills of costs for each of two owners who have together asserted one application for determination of compensation in which the claims for compensation are not allocated as between owners. In fact, no issue appears to be different between them with respect to what is being asserted, and these bills are, in fact, duplications of each other and except for the matter of disbursements, at least if accepted in that format, would result in roughly double the amount of costs which they might otherwise be entitled to seek to recover from the respondent.

[26]  In the present case counsel for the claimants has brought separate applications for compensation on behalf of the four husbands and wives who own property together. Thus there are eight Form A's and eight claims for compensation for these four properties. However a review of the Form A's and the Statements of Claim indicates that the claims for the husbands and wives are in each case identical but for two claims for economic loss by Arthur Clements and Rod Penfold and what appears to be a typographical error in one of the James' Statements of Claim. The only evidence we have is on the market valuation of each property as a whole, with the assumption that each joint tenant is entitled to 50% of the whole. Similarly there is an assumption that each joint tenant is entitled to 50% of the disturbance damage invoices but for the two claims for economic loss indicated above.

[27]  We conclude that there is no basis for making separate claims for a husband and wife who own a property together in joint tenancy. Joint tenants are defined as having one interest, under one instrument and thus there are no separate interests as contemplated in section 31(3). Under section 32 of the Act the market value of an interest is defined as the amount that would have been paid for that interest if it had been sold at the date of expropriation in the open market to a willing buyer. We do not accept that the valuation of a joint interest is 50% of the market valuation of the entire property and we were given no evidence for it to be established separately. Further, the virtually identical pleadings for husband and wife indicates that there was no useful purpose for filing separate claims. We agree with the Chair, Robert Shorthouse, when he stated "… maximizing cost recovery under the Tariff [is] not a principle by which the board, in controlling its own procedures … [is] prepared to be governed". See Captain's Square Holdings Ltd v. British Columbia (Minister of Transportation and Highways) unreported oral decision, March 16, 2001.

[28]  As a result we will treat the eight Form A's and Statements of Claim as four: one joint claim in the names of both joint tenants for each of the four properties.

4.  CLAIMS

[29]  Several of the claims for compensation changed during the hearing but based on counsel's submissions during final argument the claims are summarized as follows together with the respondent Penticton's advance payments as stated in the Form 8 Notice of Advance Payments made pursuant to section 20:

Claimant	Market Value /Personal losses	Total Claim	Advance Payment Mar 9, 2001	Advance Payment Mar 20, 2002	Total Advance Payment
Clements	$23,630*/$4,195	$27,825*	$3,000	$550	$3,550
Ferguson	$24,392*/$16,219	$40,611*	$2,000	$2,500	$4,500
James	$27,674/$7,353	$35,027	$5,000	$4,400	$9,400
Penfold	$39,450/$10,426**	$49,876	$4,100	$4,500	$8,600
Potter	$36,797/$2,075	$38,872	$4,000	$4,800	$8,800
Warner	$33,392*/$4,154	$37,546*	$4,100	$1,000	$5,100
* as amended, see below ** including $3,500 for market value of landscaping that was settled during the hearing

5.  SECTION 33

5.1  Claimants' Position

[30]  The claimants say that the principal valuation question is the nature of the development for which the lands were expropriated. Under section 33 the board must determine the market value of the land without considering any decrease in the value resulting from the development (or prospect of development) in respect of which the expropriation is made. Further, account must not be taken of any decrease in value resulting from bylaws or an OCP that were made with a view to the development in respect of which the expropriation is made. The claimants construe the development widely as an ongoing project with various bylaws and steps over the last 10 or 20 years commencing with the designation of Government Street as an arterial road in the 1982 OCP. In this partial taking one of the approaches to measure the market value of the land taken and the reduction in the market value of the remainder under section 40(3) of the Act is the before and after approach. The claimants say that in the before scenario section 33 requires the board to value the subject properties ignoring these bylaws and steps over 10 or 20 years that have facilitated Government Street being an arterial road. They say that the increase in traffic on Government Street over this time frame has occurred because Government Street was designated an arterial road. Greater traffic flow has a negative effect on market value. The claimants say that in determining the market value in the before scenario we must not take account of any decrease in value that results from this increased traffic over the previous 20 years since the designation of Government Street as an arterial road. As a result they compare the subject properties in the before situation to similar properties on quiet Residential streets.

5.2  Respondent's Position

[31]  The respondent says that the claimants' section 33 arguments are a "red herring". The development that must be ignored under section 33 is the relatively minor work carried out on Government Street in 2001. The higher property values sought by the claimants in the before scenario are fictitious ones that ignore the reality of Government Street which has been a major through road for as long as people can remember. The character of Government Street has not changed during the claimants' tenure and the claimants would receive a windfall if their submissions as to the valuation of the property before the taking were accepted.

5.3  Analysis

[32]  The relevant parts of section 33 relied on by the claimants are:

[33]  The claimants referred us to numerous authorities that set out the principles about excluding the development from our consideration of valuation of the land that was taken. This principle of determining what should be included in the "valuation" of expropriated property was established at common law. For example, in Cunard v. The King (1910), 43 S.C.R. 88 (S.C.C.) Duff J. made the following observation at pp 99-100:

One principle by which the courts have always governed themselves in estimating the compensation to be awarded for property taken under compulsory powers is this: you are to apply yourself to the consideration of the circumstances as if the scheme under which the compulsory powers are exercised had no existence.

[34]  This principle has been codified in section 33. In Ferancik v. Langley (Township) (1996), 60 L.C.R. 123 (B.C.E.C.B.) this board concluded a higher density of development in the before scenario after ignoring the designation of an east-west recreational trail through the subject property as a result of section 33. In both Devick v. British Columbia (Minister of Transportation and Highways) (1998), 63 L.C.R. 193 (B.C.C.A.) and Gedalia Properties Ltd. v. Ministry of Government Services (1981), 22 L.C.R. 166 (Ont. Div. Ct) the claimants were able to establish that on the balance of probabilities the land would have had a higher and more valuable zoning before the taking, if under section 33 (or the equivalent of section 33) the development for which the property was expropriated was ignored. Similarly in Vision Homes Ltd. v. Nanaimo (City) (1994), 54 L.C.R. 103 (B.C.E.C.B.); aff'd (1996), 59 L.C.R. 106 (B.C.C.A.) and in 286684 B.C. Ltd. v. Colwood (City) (1999), 66 L.C.R. 148 (B.C.E.C.B.) this board held that those parts of the OCP and related bylaws that dealt with the road for which the land was taken should be ignored in determining the compensation to be paid. This meant that in the before scenario the land that was designated road in the OCP was valued as if it was available for development. In the Court of Appeal decision in Vision Homes Madam Justice Prowse, speaking for the Court, set out the test at p 110:

the critical issue in determining whether previous by-laws, plans or other enactments should be excluded in determining market value is whether those provisions were passed "with a view to the development in respect of which the expropriation is made". In other words, the issue is one of nexus or causation.

• Section 33(g) OCP and Bylaws made with a View to the Development

[35]  In this case the expropriation was made to widen a section of Government Street in 2001. There were bylaws passed to effect this work and they were clearly made with a view to the development in respect of which the expropriation was made. These included bylaws that provided for five year general capital budgets including monies for the present upgrading of Government Street. The issue is whether a number of earlier bylaws have sufficient nexus to the development in respect of which the expropriation was made that they should be excluded in determining market value. And, if so, has there been a reduction in market value resulting from these bylaws?

[36]  The first relevant bylaw is the OCP that was passed by bylaw in 1982 designating various categories of roads as part of a roadway network for Penticton including Government Street as an arterial road. We must keep in mind Government Street as it existed twenty years ago. The evidence is that there had been major construction work on Government Street in 1965. Government Street had a pavement width of 12.5 metres and there were two lanes for traffic and two lanes for parked cars. When we consider the five categories of urban roads that are defined in the OCP, Government Street since at least 1965 has been wider at 12.5 metres than a Residential road (with 10 metres of pavement) and a Local Collector (with 12 metres of pavement). We note that the traffic statistics for the number of vehicles on Government Street on an unspecified summer day in 1976, 1978 and 1982 fluctuated with the highest at 9,140 vehicles on the earliest date, 1976, six years before the designation of arterial. While the daily vehicle counts for Government Street in 1987 was higher at 10,041 it is only 10% higher than the 1976 level nine years later. In 1994 there was a further increase with two different counts of 10,893 and 13,712, and in 2001, after the project had been completed, the count was 13,700, although these last three counts are not for summer dates. Thus in 1982 the existing Government Street was already a relatively wide road with 8,000 to 9,000 vehicles a day in the summer. It was in effect being used as a de facto arterial road before the different categories of roads were formally designated in a city wide roadway network. Contrary to the claimants' characterization Government Street was not a quiet Residential street, especially not one that was a cul de sac or one that extended only a few blocks and therefore experienced little through traffic. We note that in cross examination Mr. Grant (who had grown up in Penticton) conceded that Government Street had not been a quiet Residential street in the last thirty years.

[37]  In order to consider the issue of nexus or causation between the OCP and the widening of Government Street 20 years later we must review the factors that resulted in the widening. The 1982 OCP designated various categories of roads as part of a roadway network for Penticton, including Government Street as an arterial road. The 1982 OCP did not create a brand new arterial road; it recognized the existing Government Street as a busy through road with up to 9,000 vehicles a day in the summer in the years prior to 1982. As the 1996 Urban Systems Penticton Roadway Network Study makes clear, recommendations for changes such as roadway widening depend on there being sufficient traffic levels to justify the work. Based on 1994 traffic volumes the main problem on Government Street was delay at intersections that would be remedied by signalization. Although the two traffic lanes on Government Street were under-utilized in 1994 at less than 60% capacity, the study projected an increase in traffic volumes over 20 years that would eventually support four traffic lanes on Government Street. These traffic projections were based on an assumed population growth of 3% per year from 1994, the last date for which population figures were available when the study was written.

[38]  Penticton's population has increased since 1982: we know that it increased from about 23,500 in 1986 to about 32,000 in 1996, with the smallest increases in 1995 and 1996. The increase from 1986 to 1996 is about 36%, averaging just over 3% a year. Contrary to the assumptions made in the 1996 Urban Systems Penticton Roadway Network Study, we were provided with evidence that showed there has been no increase in population between 1996 and 2001. Meanwhile the traffic figures we were given show an increase from 10,041 in 1987 to 13,700 in 1994, also an increase of 36%. However, there has been no increase in traffic levels between 1994 and 2001. Thus the evidence we were given demonstrates a very strong correlation between the increase in population and the increase in traffic levels. We note that this correlation between population and traffic was the basis of the traffic projections in the Urban Systems Penticton Roadway Network Study.

[39]  As a result we do not see the nexus between the OCP designation of arterial road and the widening of Government Street 20 years later. The bylaw designation recognized a de facto arterial road and the increases in traffic that have resulted since 1982 are strongly correlated to the increases in population. We are satisfied from the evidence that we were given that if Penticton had experienced no growth in population since 1982, Government Street, despite the designation of arterial, would have experienced little, if any, increase in traffic and there would have been no reason for the widening project in 2001. The triggering of the work was caused by an increase in traffic until 1994 and a projected increase in traffic over 20 years assuming that the average annual increase in population experienced in the years leading up until 1994 continued until 2014. The increases in population are an independent and intervening factor from the designation of arterial.

[40]  In the alternative, if there is a nexus between the OCP designation of arterial road (or any of the other bylaws specified by the claimants) and the widening of Government Street 20 years later, we find that little, if any, decrease in value of the subject properties results from the OCP designation or the bylaws that anticipate the eventual Government Street boundary. The claimants say that as a result of Government Street being designated an arterial road there has been an increase in traffic over the last 20 years and that this has caused a decrease in the market value of their properties. It is generally agreed that traffic has a negative influence on market value of single family residential property. But we have concluded that the increase in traffic that has occurred since 1982 is strongly correlated with the independent factor of population growth. When the population increased the traffic increased and when the population remained level the evidence showed that the traffic similarly stayed level. We do not find that the increase in traffic since 1982 has been caused by the formal designation in the OCP of a de facto arterial road. The increase in population is an intervening event and Penticton is not required to compensate the claimants for this independent factor. See Bayview Builders Supply (1972) Ltd. v. British Columbia (Minister of Transportation and Highways), (2001), 75 L.C.R. 95 (B.C.E.C.B.) where a similar situation is discussed at para 23 and para 60-64.

[41]  The circumstances in this case can be distinguished from those in Vision Homes and 286684 B.C. Ltd. v. Colwood (City). In these two cases the OCP or bylaws that were ignored under section 33 were for entirely new roads or new easements where none existed before. Once these bylaws were ignored the subject property without the presence of the new road or easement (or any costs to build a portion of the road) had a greater development potential and therefore greater value. In the present case an existing road that was already a de facto arterial road with 9,000 vehicles a day in the summer was designated an arterial road in the OCP. The expropriation was of a narrow strip to widen the existing pavement by 1.5 metres (as well as adding a sidewalk). The claimants are not asking us to ignore the bylaw that effected this widening; rather they are asking us to value the subject properties in the before scenario ignoring most of the traffic on Government Street on the basis that the bylaw designating Government Street as an arterial road was responsible for the level of traffic that now uses the street. We do not see the principle in Vision Homes and 286684 B.C. Ltd. v. Colwood (City) applying to this situation.

• Section 33(d) Extent of the Development

[42]  The claimants also relied on subsection 33(d) that requires us to ignore the decrease in value resulting from the development (or prospect of the development) in respect of which the expropriation is made. In trying to determine the extent of the development and its impact on market value we are assisted by the question set out by Esson J.A. in Devick at para 32:

The question which [section 33] requires to be answered is whether, had there been no prospect of highway development at the time of the taking or in the preceding 20 years, the land would have had a higher value than that which it actually had at that date.

[43]  The claimants say that in addition to the widening in respect of which the expropriation was made, various changes to Government Street since 1982 that facilitated it being an arterial road were also part of the development that must be ignored. This includes the extensions of Government Street that were designated arterial, the anticipation of the eventual boundary of Government Street in 1991 and such work as improved storm drainage, more signalization, or recent upgrading on other parts of Government Street. Again, the claimants attribute the reduction in market value from these changes (or the prospect of these changes) to the increase in traffic volumes.

[44]  Clearly the widening of Government Street in 2001 that was the reason for the taking was part of the development that must be ignored. We are not persuaded that any of the other various changes to Government Street enumerated by the claimants are part of this development. Even if we were persuaded, we conclude that the subject properties have not suffered any reduction in market value that results from these various changes to Government Street. Any reduction in market value over the last 20 years has been caused by the increase in traffic volume and we have found that the traffic level is strongly related to the intervening and independent factor of whether there is an increase in population. The changes such as extensions of Government Street that were designated arterial, improved storm drainage, more signalization, or recent upgrading on other parts of Government Street did not have a negative effect on the market value of the subject properties. As a result we conclude that there is no reduction in market value that results from the various changes to Government Street other than the widening in 2001 that might be characterized as part of the development in respect of which the expropriation is made.

[45]  As for the prospect of development and further changes arising from the widening, it appears that the increase to four traffic lanes is further in the future than 2014, the date suggested in the 1996 Penticton Roadway Network Study. We have already noted the strong correlation between changes in population and changes in traffic volumes. While the Study assumed 3% increase in population per year for each of the 20 years between 1994 and 2014, in fact, Statistics Canada reports 0.0% increase between 1996 and 2001. In addition the population only increased 1.0% and 0.4 % for each of the two years between 1994 and 1996. With an increase in population during 7 of the 20 years close to zero, rather than the 3% per year that was assumed in the Study, the time to reach the population that will generate the level of traffic necessary for four lanes will in all probablility be significantly extended.

[46]  This case can be distinguished from Gedalia Properties or Devick, where the courts found that if the highway development was ignored, there was a probability that the subject property would have obtained a higher and more valuable zoning. In this case, the designation of arterial road does not have a negative impact on the likelihood of a higher and more valuable zoning. In fact, a future rezoning of the subject properties from the existing RS-3 to multi-family is more likely on an arterial road. There are a number of properties on the same blocks of Government Street as the subject properties that have already been zoned multi-family and have apartment buildings on them. The Official Community Plan designates the subject properties as medium density Residential and Development Permit Area 1 Multiple Family - General. Multi-family zoning is a higher and more valuable zoning than RS 3. While the parties have agreed on a highest and best use for valuation purposes as single family residential, Mr. Grant, the claimants' appraiser, acknowledged the clear prospect of multi-family development some 10 to 15 years in the future and sooner for some of the subject properties.

5.4  Conclusion

[47]  We conclude that the reduction in market value of the subject properties over the past 20 years is from the increase in traffic on a road that was already a de facto arterial road. This increase in traffic is directly correlated to the independent factor of an increase in population, not the designation of arterial or the various changes that have been made to Government Street. If we ignore the increase in population, the designation of arterial and the other changes would not have had an effect on the market value of the subject properties.

6.  MARKET VALUE

6.1  Claimants' Position

[48]  Appraisal evidence for each of the claimants' properties was provided by Mr. Grant, of Interwest Property Services (1991) Ltd. Russell Hinter, a certified arborist with "treemd., a division of Brent Froehlich Tree Contracting Inc." also provided evidence for five of the claimants' properties (out of six). Finally the claimants called James Macleod, a real estate appraiser with British Columbia Assessment, to give evidence of the assessed values of the Ferguson property and his opinion as to the effect of increasing traffic on these assessed values.

[49]  As described above the parties have agreed on the highest and best use of each of the subject properties as the existing use as a single family residence.

[50]  Mr. Grant used both the cost approach and an approach he described as a comparison approach to determine the before value of each of the six subject properties. Having arrived at a before value he used both a before and after approach and a summation approach to attempt to measure the effect of the project on each of the six subject properties.

6.1.1  Before Value

[51]  Mr. Grant assumed that in the scenario before the taking, section 33 required him to value the subject properties as though they were not on a road that had been designated arterial. He estimated the value before the taking and before any project influence using two approaches: a cost approach and a form of comparison approach. With the cost approach he looked at the sale of ten lots and concluded a value of land of $10.00 per square foot to which he added the respective values for building and landscaping. The building values for each of the subject properties were derived from Marshall Swift. To obtain the landscaping values he relied on Mr. Hinter's estimates for costs to replace particular shrubs or trees that were removed as a result of the project, as well as applying a percentage adjustment to the land value for each of the subject properties for other landscaping features. For the comparison approach he wanted to compare the subject properties with properties which were on roads that were not designated arterial and that were relatively free from traffic. He looked at the sales of eight non-Government Street residential properties on nearby streets that were adjusted for time. Mr. Grant derived a land area rate for each of these non-Government Street properties as well as a building area rate (the sale price divided by the land area and the building area respectively). Using these rates for the non-Government Street properties he estimated a land area rate for each of the subject properties that was between $17 and $20 per square foot, and a building area rate that was between $120 and $150 per square foot. Finally he concluded a before value for each of the subject properties relying on a reconciliation of the cost approach, the land area rate and the building area rate. These before values ranged between $137,000 and $190,000.

6.1.2  Before and After Approach

[52]  Having obtained a before value for the six subject properties, Mr. Grant employed the same form of comparison approach to obtain the value of the remainders after the taking. However, this time the comparison approach was based on the sale of seven residential properties on Government Street adjusted for time. Using the land area rates and the building area rates from these Government Street properties he estimated land area rates for the remainders of the subject properties that were between $15 and $17 per square foot while the building area rates were between $95 and $110 per square foot. Again he concluded an after value for the remainder of each property by relying on the land area rate or the building rate or a reconciliation between these rates. These after values of the remainders ranged between $109,500 and $153,500. The differences between the before and the after scenario for each of the subject properties ranged between $25,000 and $40,000. These differences in value or losses vary between 17.5% to 23.7% of Mr. Grant's value for each of the subject properties before the taking.

6.1.3  Summation Approach

[53]  The summation approach consisted of valuing the land and improvements that had been taken and adding to this sum the reduction in value to the remainder. Mr. Grant's valuations of the land taken from each of the subject properties at $10 per square foot ranged between $2,360 and $5,920.

[54]  To these sums he added the market value of the improvements on the land taken, relying on the arborist, Mr. Hinter, for the costs of trees and shrubs that had been removed and making specific allowances for the value contribution of other features on each property such as fences, walls, lawns and pavement. Finally he added the reductions in value to the remainders as a result of the project. The before values of the remainders were obtained by deducting the values of the land and improvements that were taken from the before values of each of the subject properties. The after value of the remainder relied on the results of the before and after approach. The reductions in value to the remainders were the differences between the remainder values before the taking and after the taking. The totals for each of the subject properties were identical to those in the before and after approach and thus ranged between $25,000 and $40,000.

[55]  In support of these losses to the remainder, Mr. Grant referred us to three impact studies done by Interwest Property Services (1991) Ltd. that purported to measure the effect on the market value of residential properties of being adjacent to a busy highway. From these studies he estimated that the subject properties would experience reductions in value of between 15% and 20% of the remainder values before the taking as a result of the project.

6.1.4  Assessment Evidence

[56]  We also had expert evidence from James Macleod, the appraiser employed by British Columbia Assessment in Penticton between 1993 and 2001. He was called by the claimants who presented his evidence by affidavit since Mr. Macleod had moved to Courtenay on Vancouver Island by the date of the hearing. He was cross-examined by respondent's counsel via teleconference. Mr. Macleod prepared the annual assessments for the subject properties between 1994 and 2001 for assessments as of July 1, the previous year. We also had the assessment notices for each of the subject properties between 1996 and 2002.

[57]  Mr. Macleod stated in his affidavit that the assessments for the subject properties between 1995 and 1999 reflected the fact that Government Street had been designated as an arterial road and this designation had a negative effect on market value. He qualified this considerably in cross examination by saying that it was his perception on assuming responsibility for these neighbourhoods in 1994 that the assessments for Government Street properties were likely too high and needed to be reduced to reflect the increasing traffic on Government Street compared to the surrounding streets. However, there were no sales on Government Street to support this perception and after consulting with his superiors no changes were made to the assessments of Government Street land until some sales did occur. He believed the first sales of properties on Government Street in some time were in 1998. In particular Mr. Macleod stated that there were three sales on Government Street in 1999 and 2000 that were below the assessed value, something that was not seen on sales on neighbouring streets.

[58]  We note that the assessment notices show that the land assessment for each of the claimants' property but the James property (which decreased) was constant between 1996 and 1999. Mr. Macleod testified that in 1998 and 1999 every building on Government Street and the surrounding streets were physically inspected and amendments were made to the assessments of buildings to reflect this updated information. The assessment notices show that all of the assessments for buildings for the subject properties decreased between 1996 and 1999. He agreed that the 2000 and 2001 assessment notices were effective for dates in 1999 and 2000 respectively that were prior to the actual physical widening of Government Street.

[59]  The 2000 assessment notices show that the land assessments for the subject properties decreased between 10% and 21% over the previous year. On the 2001 notices the assessments for land decreased between 4% and 8%. When the two decreases in land assessments for each of the subject properties were added together the total decrease over two years ranged between 19% and 25%. The overall assessments for these properties ranged between $83,500 and $129,100 in 2000 and between $80,300 and $131,500 in 2001. Mr. Macleod told us that generally assessed values aimed to represent around 97% of average sales prices.

6.2  Respondent's Position

[60]  Penticton relied on expert appraisal evidence from Iain Hyslop of Inland Appraisers Ltd. Mr. Hyslop valued the land that was taken from the subject properties using the direct comparison approach. He used the sales of six lots that sold between May 1999 and October 2000. Two of these sales overlapped with Mr. Grant's. From these he concluded a unit value of $8.50 per square foot. He maintained that he was unable to discern any measurable loss to the remainder as a result of the project. Mr. Hyslop's valuations of the land taken from each of the subject properties ranged between $2,000 and $5,000.

[61]  Mr. Stout, Public Works Manager for the city of Penticton, testified about the project. Darryl Astofooroff, an engineering technician employed by Penticton and Contract Administrator for the contract for the widening of this section of Government Street gave evidence about the work that was done including some of the improvements that were replaced on the subject properties. Mr. Hyslop provided estimations of value contribution of these improvements that were replaced by Penticton on the subject properties.

6.3  Analysis

6.3.1  Introduction

[62]  With respect to the value of the land that was taken the two appraisers were relatively close at $10.00 per square foot (Mr. Grant) and $8.50 per square foot (Mr. Hyslop). However there is significant difference between the two appraisers with respect to the estimate of overall loss for each of the subject properties. This is largely due to two factors. First Mr. Grant valued the improvements on the land taken while Mr. Hyslop did not. However, Penticton's second advance payments for some of the subject properties allocated monies for loss of vegetation. Second, on the basis of section 33, Mr. Grant has estimated reduction in market value to the remainder using a before and after approach that compares the subject properties with non-Government Street properties before the taking and with Government Street properties after the taking. Mr. Hyslop says that he was simply unable to find any reduction in the market value of the remainder as a result of the project.

[63]  At the outset we wish to say that we agree with the comments by Kenneth J. Boyd in Expropriation in Canada -- A Practitioner's Guide, (Canada Law Book, Toronto: 1988) at p 27: "The primary purpose of compensation is to place the owner whose land has been taken in the same position financially as he was prior to the taking". The owner should not receive a windfall as a result of the taking, nor should he be required to shoulder an economic loss that arises from the taking for the general public benefit. Emphasis must be placed upon the word "economic" in weighing the purpose of compensation.

6.3.2  Statutory Framework

[64]  The relevant statutory provisions are as follows:

31	(2)	If not included in the market value of land determined in accordance with section 32, the following must be added to that market value: …
		(b)	the value of improvements made by an owner occupying a residence located on the land.
32	The market value of an estate or interest in land is the amount that would have been paid for it if it had been sold at the date of expropriation in the open market by a willing seller to a willing buyer
40	(1)	Subject to section 44, if part of the land of an owner is expropriated, he or she is entitled to compensation for
		(a)	the market value of the owner's estate or interest in the expropriated land, and
		(b)	the following if and to the extent they are directly attributable to the taking or result from the construction or use of the works for which the land is acquired:
			(i)	the reduction in the market value of the remaining land; …
	(3)	If part of the land is expropriated, the amount of compensation payable in respect of the matters referred to in subsection (1)(a) and (b)(i) may be established by determining the market value of the area of all of the land before the date of expropriation and subtracting from it the market value of the land remaining after the expropriation occurs, but in no case, subject to section 44, must compensation be less than the amount determined by multiplying the ratio of the area of the land taken to the area of all of the land before it was taken, times the value of the land before it was taken with the appropriate reduction if the interest expropriated is an easement, right of way or similar interest less than the fee simple interest.
	(5)	If, in the case of a partial taking, the character and use, or potential use, of the land before it was taken varies such that the land that was taken was, before the taking, more valuable or less valuable than the average value of the land that was not taken, the board may, after making a determination under subsection (3), make an adjustment to reflect that value accordingly.
44	(1)	If part of the land of an owner is expropriated, and the expropriation or the construction or use of works by the expropriating authority are of special benefit to that owner or to his or her remaining land beyond any general benefit to any other owner benefited by the expropriation or the construction or use, there must be deducted from the amount of compensation payable to that owner the estimated value of the benefit.
	(1.1)	If part of the land of an owner is expropriated, and the expropriation or the construction or use of the works for which the expropriated land was acquired are of any benefit to that owner, the estimated value of the benefit must be deducted from the amount of compensation otherwise payable to that owner, under section 40 (1) (b) (i), for the reduction in the market value of the remaining land, whether or not any other owner is benefited by the expropriation of the expropriated land or by the construction or use of the works.

[65]  All of these sections of the Act (as well as section 33) must be read together. In a partial taking claimants are entitled to the market value of the land that is actually taken (subject to the relevant exclusions in section 33) and any reduction in market value of the remaining land. Market value is measured by what a willing buyer will pay a willing seller for the land at the date of taking. Screening out factors under section 33 is generally done in valuing the land before the taking but not in valuing the remainder after the taking. See E.C.E. Todd in The Law of Expropriation and Compensation in Canada, 2nd ed. (Carswell, Toronto, 1992) at pp 170-171. Claimants who have made improvements that are not included in this market value are entitled to the value of those improvements. On the other hand both general and special benefits must be deducted. As this board indicated in Whitechapel Estates Ltd. v. British Columbia (Minister of Transportation and Highways) unreported, June 4, 2002, (B.C.E.C.B. #72/82/221; 48/96/221) at para 172 the fall-back provision in section 40(3) of the Act will come into play if, as a result of all the negative and positive effects arising from the partial taking, the difference in value between the before and after is less than the pro rata value of the taking.

6.3.3  Before and After Approach

[66]  Mr. Grant's model for measuring the difference in the value before and after the project used sales of eight non-Government Street sales in the before scenario and seven Government Street sales in the after scenario. This model is based on the claimants' theory that before the project, the subject properties should be compared to similar properties on Residential streets whereas after the taking they should be compared to properties on arterial roads with significant traffic. In other words, the primary source for reduction in market value after the project is the increase in traffic as a result of the ongoing nature of the project over 20 years. Only one of the Government Street sales occurred after the project was completed, but this does not matter to Mr. Grant as he assumes it is likely that the actual widening work itself did not further reduce the market value of the remainder.

[67]  We have reached a different conclusion on the effect of section 33 than what has been assumed by Mr. Grant. Government Street was a de facto arterial street when it was formally designated in 1982 and it was never a mere Residential street. We have found that the increase in traffic on Government Street over the last 20 years is strongly correlated to the increase in population. The increase in population is an independent and intervening factor and Penticton is not responsible to compensate the claimants for this factor. In order to estimate a value of the subject properties before the taking Mr. Grant used the land area rates and the building area rates from eight non-Government Street sales located on adjacent quiet streets. It appears that at least seven of the eight were on Residential streets. Four of these sales were on Killarney Street and Kilwinning Street which are two streets that are parallel to Government Street two to three blocks to the east (further from Main Street). Both of these streets are only four blocks long. Another sale was on East Wade Avenue that was only one block long beside Penticton Creek. We were given no evidence to suggest that any of these non-Government Street sales were located on streets that experienced 8,000 to 9,000 vehicles a day in the summer months, which were the traffic volumes experienced on Government Street in the years leading up to 1982. As a result we find Mr. Grant's model as a means for determining the market value of the subject properties before the taking fundamentally flawed.

[68]  In any event we found Mr. Grant's analysis in this approach sketchy and unpersuasive. He provided little information about any of the eight non-Government Street sales (and the seven Government Street sales). All we had was a photograph of the residence, the location, the sale price and date, the size of the lot and the size of the improvements. Mr. Grant adjusted the eight non-Government Street sales (and the seven Government Street sales) upwards for time at 0.5% per month throughout, although he states that there was a decline in sales prices between 1999 and 2000. The data he cited in support of this adjustment was weak. Further, for some reason he chose to adjust the 15 sales for time to the date of his latest sale in November 2001 rather than to the appropriate date, the date of taking in March 2001. A correct application of his time adjustment to March 2001 decreased the difference between the non-Government Street sales and the Government Street sales.

[69]  He made no other adjustments. He did not specifically comment on any of the subject properties in relation to any of the eight non-Government Street properties. Instead he merely lists the land area rates and the building area rates for the eight non-Government Street properties. He uses this information to derive a land area rate and a building area rate for each of the subject properties after commenting on only one factor in most cases, the relative site coverage. The land area rates for the subject properties ranged between $17 and $20 per square foot and the building area rates between $120 and $150 per square foot while those for the eight non-Government Street sales ranged between $17.15 and $28.86 per square foot and $121.96 and $134.33 per square foot after correcting Mr. Grant's time adjustment. Five of the building area rates for the subject properties (out of six) were higher than the rates for any of the eight non-Government Street sales. Similarly there was little reasoning to support his selection amongst the cost approach, the land area rate or the building area rate for the basis of the before value for each of the subject properties. The use of simple land area rates and building area rates fails to address the requirement in the direct comparison approach that each of the subject properties be compared individually with the market evidence of comparable sales appropriately adjusted for differences in various features.

[70]  Of greater importance is the fact that section 32 requires us to value the subject properties on the basis of what a willing purchaser and seller would pay on the valuation date. After reviewing the eight non-Government Street sales, even if it was appropriate to assume that the subject properties were located on such Residential streets as Killarney Street and Kilwinning Street (an assumption that we have rejected), we are not persuaded that all of the subject properties would sell at the values concluded by Mr. Grant in the before situation. In particular, we do not accept Mr. Grant's valuation of the Clements' property at $143,500 and the James' property at $148,500. Mr. Grant describes the residence on the Clements' property as "not a stylish structure" and of "modest quality" although in reasonable condition. This property also has the second smallest area and is long and narrow leading Mr. Grant to suggest that it is more likely to be converted to a higher (multi-family) use than properties in some other blocks of Government Street. The final valuation of $143,500 was higher than six of the eight non-Government Street sales prices after Mr. Grant's time adjustment was applied to the appropriate date. The residence on the James' property was very small at 826 square feet and Mr. Grant described it as "suffer[ing] from deferred maintenance". The back yard required "removal of all materials and outbuildings except for the garage [and] shop". Mr. Grant assumed renovations to the house and some maintenance to the house and yard to arrive at a higher valuation from which he deducted $33,000 for the costs of renovation. The final valuation of $148,500 for this property was also higher than six of the eight non-Government Street sales prices after Mr. Grant's time adjustment was applied to the appropriate date. In addition, both the Penfold property and the Potter property were valued at $190,000 which is almost $30,000 higher than any of the eight non-Government Street sales prices after Mr. Grant's time adjustment is applied to the appropriate date. Although these two subject properties are somewhat larger than the non-Government Street sales we are generally satisfied that the values before the taking have been overstated.

[71]  After the taking Mr. Grant valued the remainders of each of the subject properties using the revised and reduced land area rate or the building area rate derived from the seven Government Street sales. The selection of the land area rate or the building area rate as the basis for the final valuation of the remainder was sometimes consistent with the rate used before the taking and sometimes was not. Again the analysis was lacking in detail and our criticisms about the lack of adjustments and the use of these rates applies equally to these valuations.

[72]  Thus we conclude that Mr. Grant's model for determining the valuation of the subject properties before and after the project and the compensation that is to be paid for market value must be rejected.

6.3.4  Summation Approach

[73]  Mr. Grant also used the summation approach for the valuation of the subject properties. The market value of the land taken in each case was added to the market value of the improvements taken and the reduction in market value of the remainder. Mr. Hyslop, the appraiser for the respondent, also provided a valuation for the market value of the land taken. He did not make any valuation of the improvements that were taken and he did not find any loss to the remainder.

6.3.4.1  Market Value of the Land

[74]  In order to value the strip of land that was taken from each property the two appraisers used a total of 14 different sales of serviced lots that occurred between March 1998 and June 2001. Mr. Grant's ten sales ranged between $7.76 and $10.14 per square foot while Mr. Hyslop's six sales (with two overlapping) ranged between $6.45 and $8.54 per square foot. There was relatively little information provided about any of these sales and little analysis by either appraiser. It was not certain whether any of the lots offered a view. Only two of these lots were the same zoning as the subject properties at RS 3. All of the other 12 lots were zoned RS 2 (or RS 1) which zoning provides for less dense residential housing than RS 3 with larger minimum parcel sizes, less maximum coverage, and greater setbacks at the front and side. A number of the comparable lots were smaller than the subject properties and they were also located in the outer edges of Penticton where subdivision development was occurring.

[75]  There was also an earlier report prepared by Mr. Hyslop in August, 2000 that listed 17 RS2 and RS3 lot sales that had occurred in 1998 and 1999, including nine that were used by Mr. Hyslop or Mr. Grant in their later reports. (The report in fact listed 22 lot sales but a number of them were repeated.) These 17 sale prices ranged from $3.94 to $10.46 per square foot. Mr. Hyslop states that the median value of the sales was $8.48 per square foot. This was a general report for valuing the land that was to be taken from all the properties on Government Street. Again there was very little analysis. At this time, in August 2000, Mr. Hyslop concluded that the market value of the land that was taken from all the RS 2 and RS 3 properties on Government Street that were over 5,000 square feet was $8.50 per square foot. This was the same conclusion as he made in his later reports for the subject properties as of March 12, 2001. He did suggest an adjustment to provide a higher valuation of $11.00 per square foot for those Government Street properties that were very small at less than 5,000 square feet. The smallest subject property was the Ferguson property at 7,259 square feet so this adjustment did not apply to any of the subject properties.

[76]  In the reports prepared by the two appraisers for the subject properties as of March 12, 2001 there was a conflict about the size of one lot that was available for development and we accept Mr. Grant's evidence on that sale at $8.61 per square foot. However, we do not accept Mr. Grant's assertion that the lot on Power Street was the least similar to the subject properties when it was one of the two lots that had the same zoning and was similarly located on a relatively busy road, not far from downtown and the shops and workplaces located there as well as being close to schools. This sale provided a unit price of $7.76 per square foot. By contrast, as indicated above, 11 of the 14 lots in the later reports appeared to be in new suburban subdivisions, with six of them located on short cul de sacs. Mr. Grant conceded that a number of these lots were in a different type of neighbourhood than the subject properties.

[77]  It was also the case that eleven of the comparable lots, including all of Mr. Grant's comparables, were smaller than the subject properties. The unit prices from these sales would have been somewhat lower if the lots had been adjusted for size, since smaller lots usually sell at higher unit values than larger lots, a fact that Mr. Grant acknowledged. Mr. Hyslop's 17 sales in 1998 and 1999 generally confirm a reverse correlation of unit price and size and we reject the claimants' argument that size adjustments are unwarranted. Finally, we note that the lot sales were not adjusted for time and those sales that occurred in 2000 and 2001 and thus closest in time to the valuation date in March 2001 (rather than the earlier sales in 1998 and 1999) had unit sales prices of $8.56, $9.00 and $7.76. After reviewing all of this evidence we conclude a value of $9.00 per square foot for the land taken from the six subject properties. Each of the claimants' properties will be treated separately below.

[78]  Although Mr. Stout, Public Works Manager for the city of Penticton, was unable to confirm it, there was evidence that suggested that some of the other owners of properties on Government Street may have reached settlements with Penticton at a somewhat higher compensation per square foot of land taken than what we have concluded. The claimants, in argument, urged us to consider these apparent settlements. In Baines v British Columbia (Minister of Transportation and Highways) (1997), 61 L.C.R. 45 (B.C.E.C.B.) at pp 61-64 this board discussed the requirements that must be met before settlements with the authority can be considered in a determination of market value. Under the statute we must award compensation based of the market value of the property. Settlements are only relevant if they are reflective of an open and competitive market. In this case we received virtually no evidence with respect to these settlements. We do not know what, if any, improvements were on the land that was taken or on the remainder. We do not know any of the circumstances leading to the settlements, and, in fact, received no confirmation that the list of figures reflected agreed settlements. We have insufficient evidence to establish the settlements and whether they may have been indicative of an open and competitive market. As a result, we conclude that these settlements are irrelevant to our determination of the market value of the land that was taken.

6.3.4.2  Market Value of the Improvements on the Land Taken

[79]  The claimants have claimed for the market value of the improvements that were on the land that was taken from each property such as pavement, walls, fences, hedges, lawns, shrubs and trees. As indicated above Mr. Grant has used the arborist, Mr. Hinter's, estimate of the cost to replace the shrubs and trees that were lost where he had that information and provided valuation contributions for the other improvements that were present on the strips taken from each subject property. The market values for the improvements estimated by Mr. Grant ranged from $1,080 to $10,440 after adjusting for trees that were not in the end removed.

[80]  The respondent did not accept Mr. Grant's estimation for the value of the improvements, in particular his reliance on Mr. Hinter for the replacement costs for various trees and shrubs. Penticton has recognized some market value of the improvements on the land taken in advance payments made to four of the six claimants for lost vegetation. Penticton has also replaced many of the improvements. Some of the properties have new retaining walls, new hedges or fences and all had soil and sod replaced where lawns had been disturbed. Driveways have been paved or repaved in some instances. We were provided with cost estimates based on the prices Penticton paid contractors to have the work done on each property. These ranged from $2,606 to $8,385. Penticton says that under section 44 specific benefits from the project must be deducted.

[81]  The claimants submit that the owner is still entitled to compensation for improvements that were located on the land that was taken even where those improvements have been replaced by the respondent. Under section 40 the claimants are entitled to the market value of the land and improvements that have been taken. Some claimants rely on the specific provisions of section 31(2)(b).

[82]  Mr. Hinter, the arborist, provided replacement costs of trees and shrubs taken from five of the subject properties. Mr. Hinter had worked in providing various aspects of tree care for several years and had recently been certified as an arborist by the International Society of Arboriculture. He had also been certified as Wildlife/Danger tree assessor. At the time that he had done the reports on replacement costs he had not taken any courses in plant appraisal and had relied on the text book Guide for Plant Appraisal published by the International Society of Arboriculture. Although Mr. Hinter prepared five reports we were eventually left with only three claims for landscaping improvements covered by his reports. Two trees on one property were not in the end removed and the claim for their loss was abandoned. The claim for landscaping improvements on another property settled at the end of the hearing.

[83]  Mr. Hinter estimated the replacement costs of specific trees on the basis of an equivalent shrub or tree that was available locally, including transportation and planting. In a number of cases the replacement tree was smaller than the tree that was removed and Mr. Hinter estimated the time it might take to reach an equivalent size. With respect to the James property, Mr. Hinter carried out a more extensive cost approach of three trees and a cedar hedge. In answer to a question from a member of the board Mr. Hinter stated that there had been no consideration given to transplanting any of the trees or shrubs that were to be taken to the remainder of the property except for the Ferguson property.

[84]  With respect to Mr. Hinter's estimates of cost replacement for various trees and shrubs, an excerpt from the Guide for Plant Appraisal 9th ed. states at p 93 that "Cost does not necessarily create value. Although cost (less depreciation) can be a good estimate, it should not be the only source or consideration for determination of contributory value." This is consistent with the appraisal principle that costs incurred on improvements are often not reflected in the market value of what a hypothetical purchaser and seller would agree in an open market as the price to be paid. Mr. Hinter's estimates were presented as part of the market value assessment and not as disturbance damages or losses that the owners had incurred to replace what they had lost. Under the Act we must assess the market value of the land that is taken and the reduction in market value of the remaining land as measured by what a potential purchaser and seller would agree on as the sale price. In other words we must value the trees in relation to the land or as a contribution to the land and not the value of trees in isolation. In Husband v. Langley (Township) (1996), 59 L.C.R. 221 (B.C.E.C.B.) at p 234 this board found that the figures provided by an arborist for valuation of lost trees were not indicative of the reduction in market value of the remaining land to a potential purchaser and as a result it awarded nothing for the loss of the trees.

[85]  The more extensive cost approach that Mr. Hinter used for the trees on the James property involved a number of separate assessments and ratings for each tree as opposed to merely providing the replacement cost. We note that he had not done any courses in appraising of trees when he prepared these valuations, nor had he much, if any, experience in performing these valuations. He told us that he read the textbook and followed the guidelines and formulas that it contained. A number of the assessments about different aspects of each tree, including species, condition and location ratings, appeared quite subjective. In the circumstances we cannot give much weight to these valuations for the trees on the James property.

[86]  More importantly we do not agree with Mr. Grant's approach to valuation of the improvements that were taken. He has relied on Mr. Hinter's cost approach to value some of the improvements in the before situation but in the after situation says only that he considered the impression of the improvements that had been replaced by Penticton when he valued the remainder. And this consideration of the replaced improvements is in the context of his having valued the remainder using a very broad brush approach based on a land area rate or a building area rate only. This board has held that when parties make assumptions about the subject property in the before and after situation it is important to give optimum value to the property in both scenarios. We have to strive for a fair comparison between the before and after situation in order to estimate the true impact of the taking. For example, if an appraiser makes an assumption that unfairly decreases the value of the after situation then the effect of the taking will be overstated. See Sequoia Springs West Development Corp. v. British Columbia (Minister of Transportation and Highways) (2000), 69 L.C.R. 1 (B.C.E.C.B.) at para 89 and Whitechapel at para 92-95; aff'd 2003 BCCA 54. In this case Mr. Grant has maximized the valuation of some of the improvements that were lost in the before situation and minimized the valuation of Penticton's replacements of some of these improvements in the after situation. He not only overestimates the effect of the taking but in effect seeks double compensation; claiming the cost to replace or contribution to value for a number of specific improvements in the before situation, when at least some of them have been replaced at no cost to the claimants in the after situation, a fact that he largely discounts. We do not accept Mr. Grant's testimony that his manner of valuing the improvements in the before and after scenario avoided double compensation. In Ingham v. Creston (1996), 59 L.C.R. 113 (B.C.E.C.B.) reversed on other grounds (1999), 66 L.C.R. 161 (B.C.C.A.), the board agreed with the respondent's submission that the owner was not entitled to both damages for the loss of amenities on the strip of land taken and costs to put similar amenities on the remainder. They were alternative measures of the same loss. See also Patterson v. Ministry of Transportation and Highways (1994) 53 L.C.R. 88 (B.C.E.C.B.) at pp 109-117; aff'd (1997), 62 L.C.R. 89 (B.C.C.A.) and Morton Estate v. British Columbia (Minister of Transportation and Highways) (1999), 67 L.C.R. 278 (B.C.E.C.B.) at p 299.

[87]  Under sections 32 and 40 we must consider what contribution to market value a willing purchaser and vendor would have attributed to the lost improvements such as retaining walls, lawns and trees. Under sections 32 and 44(1.1) we must consider the improvements replaced by the city on the same basis. The costs to replace improvements provided by both Mr. Hinter and Penticton are largely irrelevant. Neither of these costs was based on the correct statutory test. Reading all of these sections together results in the claimants being entitled to compensation for improvements that have been taken where there has been a net loss in contribution to market value. For example, when a mature tree has been replaced with a very young tree that will take many years to reach an equivalent mature size, there may be a net loss in contribution to market value if a potential purchaser would view the mature tree as offering a greater contributory value to the purchase price because of screening or some other aesthetic enhancement of the property. Where what has been replaced is approximately equivalent to what has been lost in terms of contribution to market value in the eyes of the hypothetical purchaser and vendor, the claimants are not entitled to any compensation for loss of improvements. Again each of the subject properties will be treated separately below.

6.3.4.3  Reduction in Market Value of Remainder

[88]  Mr. Grant estimated the reduction in market value of the remainder by taking the value of each subject property before the taking and deducting the value of the land and improvements taken to obtain a valuation of the remainder before the taking. The difference between this valuation and the valuation of the remainder after the taking was his measure of the loss caused by the project for each of the subject properties. We have rejected Mr. Grant's model for valuation of the subject properties in the before and after scenarios. Since his estimate of the reduction in market values of the remainders is based on this same model, it follows that we must also reject these estimates of loss. We note that Mr. Grant acknowledged that the pretaking influence over the last 20 years was the primary thing that he attempted to measure and that the actual widening project in 2001 likely had relatively little effect. The sale at 1481 Government Street that occurred immediately following the project does not show any decline in market value when compared with the two or three most comparable sales on Government Street before the project, after correcting the adjustment for time.

[89]  As has been described above, after the taking Government Street consists of two lanes for vehicle traffic, two outside lanes for parked vehicles and two marked bicycle lanes in between the traffic lanes and the parking lanes. As a result of the taking the pavement on Government Street itself has been widened 1.5 metres (4.9 feet). Because the outside lanes are currently used for parking, the traffic lanes are not much closer to the residences than they were before the taking. Five of the subject properties have had a four foot wide sidewalk placed on the part of the 2.4 metre (8 foot) taking that is closest to the boundaries with their properties. In each case the residence on the subject property now has a smaller setback from the street after the taking. However, four of the six subject properties continue to have setbacks after the taking that are greater than the minimum set back of 6 metres (19.7 feet) for this zoning. Although there is a prospect of four traffic lanes in the future, it is probable that that date will be well after the estimation of 2014 in the Penticton Roadway Network Study. This is because the estimation was based on traffic projections assuming 3% increase in population per year and, in fact, there has been virtually nil population growth between 1994 and 2001. Although single family residential was the agreed highest and best use by counsel, we note Mr. Grant's acknowledgement of multi-family potential for the subject properties within 10 to 15 years and sooner than that for certain of the properties. He also confirmed that better traffic flow was a benefit if there was an eventual conversion to multi-family use.

[90]  The claimants report that the traffic appeared heavier after the project was completed but the traffic count in October 2001, following completion of the project, showed the same two way daily vehicle count as the previous one dating from April 1994. We cannot give much weight to the claimants' perceptions in the circumstances.

[91]  We also had evidence from the real estate assessor, Mr. Macleod, as to the reasons why he reduced the land assessments on Government Street in 2000 and 2001. Mr. Macleod conceded that his job as an assessor of properties had a different mandate than a real estate appraiser of a single property. Generally, however, the goal of assessments was to achieve 97% of market values as indicated by the average of actual sales prices in the neighbourhood. But this does not take into consideration individual variations in specific properties.

[92]  Mr. Macleod testified that the sales of three properties on Government Street (and of two properties just off Government Street) in 1999 and 2000 led him to reduce the assessment for land for properties on Government Street in 2000 and 2001. He reduced the land assessments for each of the claimants' properties between 18% and 25% in the 2001 assessment notices compared to the 1999 assessment notices. At the time of these reductions in the land assessments (that are applicable to the previous year) no work had occurred on the widening of this section of Government Street. Mr. Macleod testified in cross-examination that before these sales he had no market evidence to support his perception that traffic on Government Street had caused a reduction in market value of single family residential properties on this street when compared to similar properties on nearby Residential streets. There had been no sales of properties on Government Street for some time. While his affidavit stated that the reductions in land assessment in 2000 and 2001 were made as a result of the prospect of the widening project and the market sales on Government Street in 1999 and 2000, in cross examination he testified that the existing traffic levels in late 1999 supported his decrease in the land assessments. We give greater weight to Mr. Macleod's explanation in cross examination as to why he reduced the land assessments.

[93]  As we have already described there has been an increase in the two way summer traffic on Government Street from about 9,000 vehicles per day in the period 1976 to 1982, to about 10,000 vehicles per day in 1987 to almost 14,000 vehicles per day in 1994 and 2001. Thus the evidence with which we were provided suggests that the level of traffic in 1999, when the first sales on Government Street occurred, had existed for some time. We have found that this increase in traffic is strongly correlated with the increase in population and that this factor is independent of the project and the associated bylaws. As a result we find that Mr. Macleod's reductions in the land assessment for the subject properties between 1999 and 2001 are due to traffic increases that are independent of the project and the associated bylaws. We also note that the relevant assessments are based on averages derived from three to five sales that occurred on Government Street in 1999 and 2000 that were then applied uniformly to all the houses on Government Street. Thus they are of little assistance in our consideration of the market value of specific subject properties.

[94]  Another decision of this board, Ingham v. Creston (Town) (2000), 70 L.C.R. 126 (B.C.E.C.B.), has some similarities to the present case. The town of Creston had taken a strip from the front of each of the claimants' properties for a road widening. Similarly to the present case the existing level of traffic did not justify the new road width of 14 metres and after the project, the road had two traffic lanes and two lanes for parking. There was a prospect that the road would be changed to four traffic lanes at some indeterminate time in the future. Both the counsel and the appraiser that were retained by the claimants in Ingham were the same as in the present case. The width of the strip that was taken from the claimants' front yards in Ingham was 5.0 metres (16.5 feet). This wider taking meant that the paved roadway itself was also widened considerably more than in the present case; from approximately 7.5 metres (25 feet) to 14 metres (46 feet). A new sidewalk was also added in front of the claimants' residences. After the 5.0 metre (16.5 foot) taking, one of the claimant's residences still met the 6.1 metre (20 foot) setback to the right of way at 20.5 feet, a second residence had a setback of 18 feet and a third had one part of the L-shaped residence with only a 15 foot setback while the other part had a 33 foot setback. As in the present case, the right of way contained a new sidewalk and a lane for parked cars so the distance from the residences to the travelled portion of the street at the time of the hearing was greater than what was indicated by the setback distances. In the second decision of the board in Ingham, it awarded compensation to the two remaining claimants for injurious affection to their properties from the street widening project at 15% of the market value of their residential improvements. This compensation was based in part on impact studies of busy roads referred to by the claimants' appraiser that he stated supported a 35% reduction in value to the improvements where the setback had been reduced 50%.

[95]  In the current case the facts can be distinguished from those in Ingham. Here the taking from the claimants is only 2.4 metres (8 feet) wide for five of the subject properties, half of what it was in the Ingham case. For the sixth property owned by Edith Ferguson the width of the taking is only 0.6 metres or two feet, less than one eighth of the width of the strip in the Ingham case, although the corner of the Ferguson property is rounded as well. The road widening is only 1.5 metres (4.9 feet) rather than 6.5 metres (21 feet). Four out of six of the subject properties continue to meet the setback requirements after the taking by between 0.9 to 3.1 metres (3 to 10 feet). We conclude that the impact on the subject properties was significantly less than it was in the Ingham case.

[96]  In addition, the Ingham case relied on the results from impact studies referred to by Mr. Grant but which had not been entered into evidence. These studies done by other appraisers in Mr. Grant's office reported a negative effect on the value of single family residences when they are adjacent to busy highways. In the present case three studies were entered into evidence although none of the authors of the studies was called to testify. It appears that at least some of these studies were the same ones that had been referred to in Ingham. When we reviewed these three studies we did not find them of much assistance. First of all they involved proximity to busier roads than in the present case. Although one study was on the impact of an arterial road in Burnaby, it had four traffic lanes (when Government Street has two traffic lanes that continue to be under-utilized in 2001 at less than 60% capacity of an arterial traffic lane) and the other two studies were on the impact of four to six lane freeways; Highway 91, in Richmond, and the Lougheed Highway near the Cape Horn Interchange in Coquitlam. We note that the study reported that Lougheed Highway had about 67,000 vehicles a day in front of the residences that were impacted, a traffic level that is more than four times the highest recorded traffic level on Government Street.

[97]  Secondly, the three impact studies compared residential properties adjacent to these highways with other properties further back on Residential streets in the subdivision. Mr. Grant attempted to say that the estimates from the impact studies underestimate the effect of the road in the present case because Penticton Residential side streets are quieter than the streets in the subdivision that are near but not adjacent to Lougheed Highway. However, in fact, when the appropriate comparison is made the opposite is the case and the impact studies overestimate the effect. This is because we have concluded that Government Street was never a quiet Residential street like the adjacent side streets in Penticton or the subdivision streets near, but not adjacent to, Lougheed Highway. Even if we consider Government Street in 1982, the comparison is between the present day 14 metre wide, Government Street in March 2001, with two lanes for traffic and two lanes for parking plus two bicycle lanes (with a prospect for four lanes at some indeterminate point in the future) and a road that was 12.5 metres wide, with two lanes for traffic and two lanes for parking. Although the traffic has risen from 9,000 vehicles per day in the years leading up to 1982 to about 14,000 vehicles per day following the completion of the project in 2001 we have found that this increase is strongly correlated with an increase in population which is an intervening factor.

[98]  Thirdly, we had some problems from the data and the purported conclusions from these studies.

• The earliest study was dated 1989 and studied the impact of Boundary Road, an arterially designated road widened from two to four traffic lanes. A solid wood fence was constructed alongside the roadway. This study consisted of two parts:

  i	interviews with occupants of affected dwellings as well as assessors;
  ii	paired sales analysis.

  The interviews sought the perceptions of 12 impacted owners and tenants about the level of noise before and after the project to widen the road from two traffic lanes to four traffic lanes was completed. Only about half the occupants stated that it was noisier and the other half said that there was little or no effect. The occupants were also asked about their views on potential changes in value but we do not find these of any assistance.

  In the paired sales analysis, the sales of five impacted properties on Boundary Road were compared with the sales of nine properties that were further back. The authors attempted to isolate the effect of location by adjusting the comparable sales for other factors; namely lot size, date of sale, and value of the improvements although no details were provided as to how any of the adjustments were done. The differences between the adjusted sale price of the comparables and the sale price of the impacted property were expressed as a percentage of the assessed value of the improvements.

  This report differentiated between proximity impact or the siting of the improvement on the lot and locational obsolescence or the general detrimental effect of the project. The report says that there are no proximity damages if the improvement continues to meet minimum setback requirements (or if the site is vacant). In this study some of the impacted properties continued to have conforming set-backs, and thus any impact was attributed to locational obsolescence. The report concluded that the impacted properties on Boundary Road were 30% to 50% of the assessed value of the improvements of the inside street comparables or 7% to 23% of the overall values. These losses in value were for both proximity and locational impacts. Unfortunately, the analysis was confusing and the links between the reported data and the conclusion were not clearly set out in the report. As a result we are unable to give much weight to this study.

• The second study, dated July 1995, considered the effect of a new four to six lane freeway, Highway 91, on the market value of adjacent rural lands in Richmond that were in transition to urban single family use. Highway 91 had a posted speed of 80 kph and there were berms and wooden fences installed along the boundary of the highway. The study examined the impact of the highway on acreage sales that were sold for development, and on two sizes of subdivided lots when vacant and when improved with residences. None of the land had been taken for the freeway.

  The report found that the freeway had no adverse effect on the value of acreage land sold for development.

  In the subdivided lot analysis the study compared ten lots between 5,000 square feet and 6,000 square feet that backed onto the new highway with six lots further back. Seven lots over 6,000 square feet were compared with four lots further back. All of the lots were adjusted for time although the details of the market evidence on which this adjustment was based were not set out in the study. The study concluded an average loss of 8% to 9% for lots between 5,000 square feet and 6,000 square feet and an average loss of 1% to 3% for lots over 6,000 square feet. However, we note that there were differences in the lots under 6,000 square feet that were compared that may have affected the reported percentages. Those lots backing onto the freeway were long and narrow while those further back were corner lots or pie shaped cul de sac lots. The one pair that seemed reasonably similar differed by only 2% making the other comparisons suspect.

  In the lots that were improved with residences, for lots under 6,000 square feet, three lots that backed onto the highway were compared with three lots further back and the average loss was concluded to be 1%. For lots over 6,000 square feet only two lots that backed onto the highway were compared with one lot further back and the loss on this comparison was reported at 8%.

  Thus the overall results from this study showed that backing onto the four to six lane freeway had no effect on acreage sales, and only small effects on vacant lots and improved lots. While two of the comparisons suggested a loss in value of about 8%, other comparisons found losses of only 1% to 3 %. One of the comparisons that found 8% loss in value was based on only one sale and the other was based on comparison of lots that differed in shape, a factor that could have affected the sale price. The report concluded that the greatest effect of 8% loss in value was found where an elevated portion of the freeway was adjacent to the lots.

• The third study dated 1996 concerned the impact of the four to six lane Lougheed Highway near the Cape Horn Interchange in Coquitlam on the sales of improved lots. The Lougheed Highway had a posted speed of 70 kph and the average daily traffic in the summer of 1994 was reported at 66,900. A six foot wooden fence had been erected beside the highway.

  The study compared the sale of four improved lots that backed onto the Lougheed Highway with two lots set further back. Adjustments were made for time, size of lot and size of house. The study reported reductions in value as a result of the four to six lane highway ranging from 11.4% to 25.6% after adjustment, with an average impact of 19% to 24%. However, this study is based on a comparison of only four sales to two sales. We also note that in the consideration of the adjustments there was the use of a considerable number of assumptions and averages. We did not understand, for example, why two identical adjoining properties that had sold one month apart at a 2% differential in price showed a widened difference after adjustment for time of 7.5%.

[99]  In another decision of this board, Whitechapel, at para 181, the board set out the market evidence of the sales of vacant serviced lots that backed onto a completely new four lane highway, Nordel Way, compared with interior lots across the street. These 69 lot sales occurred between 1986 and 1989. There were earth berms along the back of the lots bordering the new highway that provided some protection from noise. While some of the lots backing onto the highway sold for an average price that was between 6% and 16% less than similar interior lots across the street, all of these affected lots had two easements running across the backyards: a B.C. Electric right of way as well as a GVRD trunk watermain. It is likely that these easements had some negative impact on the value of these lots and not all of the 10% to 16% reduction was due to proximity to the highway. Other lots backing onto the highway but without any easements sold for an average of only 2% and 3% less than similar interior lots.

[100]  In summary, the evidence of the effect of traffic and noise on the market value of residential land from the three studies and as reported in Whitechapel is far from convincing. While some studies have found about 10% to 20% reduction in market value of improved lots or vacant lots that were adjacent to four to six lane expressways, some of these studies were based on a very small number of sales and some of them had not been adjusted for other factors such as easements, or lot shape. Some market evidence suggested significantly smaller reductions. And none of the market evidence was relevant to the impact of a road that was widened by only 1.5 metres and where the traffic counts remained the same for some considerable time and the actual traffic lanes remained approximately the same distance from the residences.

[101]  Further there is the question of general benefits. Penticton drew our attention to the comments of Madam Justice Rowles at para 16 of Ingham v. Creston (Town) (1999), 66 L.C.R. 161 (B.C.C.A.):

That the road construction project may have conferred some general benefit on the appellants' lands as a result of the wider and better street, a sidewalk, and curbing cannot reasonably be disputed.

At the time of the appeal in Ingham general benefits were not to be considered in the after scenario. Since then the legislation has been amended so that the value of any general benefits, in addition to specific benefits, must be deducted from the claimant's compensation, if any, for reduction in market value. The only evidence that we have with respect to general benefits is that after the project Government Street is a better paved road than it was before and there is now a continuous sidewalk. With fewer potholes there should be less noise from the traffic. We do not have any specific evidence on the value of these general benefits to the claimants. But we note that, in principle, general benefits, such as described by Madam Justice Rowles, are now to be deducted from any compensation for reduction in market value.

[102]  Therefore, on the basis of all of these factors listed above, and in particular the fact that the road widening in this case is only 1.5 metres, the fact that Government Street was already a de facto arterial road before the OCP designation with about 9,000 vehicles a day in 1976 and the fact that the increase in traffic since then is correlated to an independent factor of population growth, we conclude that there is no reduction in market value to the remainders of the subject properties. It is important to bear this conclusion in mind as we examine the claims for the six properties, each of which includes a claim for diminution in value to the remainder.

7.  MARKET VALUE FOR INDIVIDUAL CLAIMANTS

• Arthur and Patricia Clements — Market Value

• Background and Claim

[103]  The Clements' property at 1014 Government Street was an investment property that they purchased in 1993. The residence was a one storey building of 1,014 square feet. It was on the east side of Government Street and the lot was long and narrow measuring 45 feet by 170 feet. A strip that was about 2.43 metres or eight feet was taken from the front yard of the property for the project. The total taking as indicated by surveyors was 355 square feet and we accept that figure.

[104]  According to Mr. Grant, the claimants' appraiser, the part of the residence that was closest to Government Street before the taking was set back 32 feet. The part that was closest to Government Street was a "bump out" in the living room. Most of the living room was set back several feet further. A kitchen area was set more than 10 feet further back. After the taking the setback was reduced to 24 feet, which continued to be in excess of the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[105]  We heard evidence from both Arthur and Patricia Clements. Their claim for market value and reduction in market value as a result of the project advanced during argument was as follows:

Market value of land taken without improvements	3,550
Market value of the improvements taken	1,080	*
Reduction in market value of the remainder	19,000
* mistakenly submitted at $3,825 based on improvements for whole front yard not including the two trees; claim amended to reflect the evidence for improvements on land taken only
Total	$23,630	as amended

• Value of the Land Taken

[106]  We have concluded that the market value of the land taken was $9.00 per square foot or $3,195 for the 355 square feet taken.

• Value of Improvements Taken

[107]  As a result of the taking the Clements lost a low concrete retaining wall of less than one foot in height, some lawn and a portion of the driveway. There was no loss of vegetation other than the lawn. Before the taking the driveway was two paved tracks for the wheels of the vehicle with grass in between. Although Mr. Hinter, the arborist, had estimated the cost to replace two maple trees located on the front lawn these two trees were some distance back from the taking and were not in the end removed. Mr. Hinter testified that in his opinion these two trees would likely survive. Mr. Clements told us that he had asked Penticton to remove the trees in any event but this had not been done. The claim for these trees was withdrawn in argument.

[108]  Mr. Grant estimated that the value contribution of the low concrete retaining wall, the lawn, and the driveway on the strip taken was $3.00 per square foot or $1,080 for all of the lost improvements.

[109]  Penticton has replaced the low retaining wall and extended it along the side of the driveway. It has also paved the whole driveway to the front of the house. Penticton has installed a black chain link fence on top of the wall and planted a yew hedge behind the fence. The yew trees at around three feet in height were somewhat shorter than the chain link fence at the time the photographs were taken. Topsoil and sod were added to areas that had been disturbed. Penticton's costs for this remedial work was $6,070.02. Mr. Hyslop estimated the contributory value of all of the improvements provided by the respondent at $2,000 to $3,000.

[110]  As we have indicated above the claimants are entitled to the net loss in market value of the improvements that were taken after considering the replacement benefits provided by Penticton. This market value is defined in relation to the price that would have been attributed to the improvements as part of the overall purchase price negotiated by a willing purchaser and a willing seller both before and after the taking. The cost of replacement provided by Mr. Hinter and the City of Penticton are largely irrelevant.

[111]  In this case the low concrete retaining wall was replaced by a low concrete retaining wall, a black chain link fence and a hedge of yew trees. The driveway consisting of two paved strips has been replaced by a driveway that is completely paved. Topsoil and lawn have been replaced. After reviewing the very large number of photographs of the property both before and after the taking, as well as the relevant testimony, it is our opinion that a hypothetical purchaser would attribute at least the same contributory market value to the retaining wall provided by Penticton as the retaining wall that was removed. Similarly the topsoil and lawn that were provided by Penticton supply the same contributory value as to the lawn that was removed. However, Penticton also provided a black chain link fence, a hedge of yew trees where none existed before and a fully paved driveway in place of one consisting of two paved strips. If we had concluded that there was any compensation payable for the reduction in market value we would have found it necessary under section 44(1.1) to make a deduction from that compensation for the contributory value of these special benefits where none existed before. However, we have concluded that there is no reduction in market value and in the circumstances we award nil for the contributory market value of improvements taken from the Clements' property. The claim to move the yew tree hedge is dealt with under personal losses below.

• Edith Ferguson -- Market Value

• Background and Claim

[112]  The Ferguson property at 739 Government Street was the only property on the west side of Government Street for which a claim was heard. It is a corner lot at the intersection of Government Street and Gahan Avenue measuring about 70 feet by 103 feet. A narrower strip than for the other subject properties was taken from the front yard (about 0.6 metres or two feet compared to 2.43 metres or eight feet). In addition the north east front corner (adjacent to the intersection) was rounded off for a total taking of 236 square feet. The taking from the Ferguson property was the smallest of the six subject properties.

[113]  The Ferguson residence was a one and a half storey building with 737 square feet on the ground floor and 290 square feet on the second floor for a total of 1,027 square feet. The Fergusons had moved into the residence in 1989. According to Mr. Grant, the setback of the residence from Government Street was 26 feet before the taking. After the taking the setback was 24 feet. This continued to be in excess of the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[114]  We heard evidence from Don Ferguson, Edith Ferguson's spouse. The claim advanced by Edith Ferguson for market value and reduction in market value was as follows:

Market value of land taken without improvements	2,360
Market value of the improvements taken	3,032	*
Reduction in market value of the remainder	19,000
* mistakenly submitted at $5,831 which includes the value of two trees lost instead of one
Total	$24,392	as amended

• Value of the Land Taken

[115]  We have concluded that the market value of the land taken is $9.00 per square foot and as a result the value for the 236 square feet taken from Edith Ferguson's property is $2,124.

• Value of Improvements Taken

[116]  As a result of the taking Ms. Ferguson lost one white spruce from the north east corner of the property at the corner with Gahan that Mr. Hinter estimated at 7.5 metres (24.6 feet). There were two other white spruces in the south east corner that were taller at 12 metres (39 feet) and 9 metres (29.5 feet) respectively that were not removed at the time of the hearing, although there was evidence that they were at risk. Following the hearing evidence was admitted as to the removal of the smaller of these two trees. We will consider this additional evidence separately below. There was also a large Douglas fir near the north east corner of the house that was not affected by the taking. The Ferguson property also lost wooden picket fencing along the 70 foot frontage, as well as a concrete and stone wall behind this fencing. The wall was about two feet tall with pillars and a cap on top. Since it was lower than the fence it appears to have been invisible from the front but could be seen from the house or the porch. There were also shrubbery and plants in a flower bed inside the stone wall that were lost. There was also evidence that some panel sections from each of the side fences had been removed during the work.

[117]  Mr. Hinter provided the replacement cost of a two metre white spruce at $412 including delivery and planting. Alternatively, a five metre Norway spruce would cost $2,031 including delivery and planting. Mr. Hinter estimated that the time for these replacement trees to attain the same height as the white spruce that was removed was 19 years for the shorter white spruce and 9 years for the taller Norway spruce.

[118]  Mr. Grant used Mr. Hinter's estimate for the replacement cost using a Norway spruce although he mistakenly allowed for one large and one small tree at $2,804. In addition, he estimated the cost and value of 100 square feet of shrubs and flower beds at $300 and the contributory value of 70 feet of wall and fence at $10 per lineal foot or $700. For this property alone he added an estimate for maintenance costs for the new tree to the market value of the improvement. He gave no reason why this factor was included for the Ferguson property but omitted on the other four properties. We do not see that maintenance costs for a tree that has not been replaced should be included in the market value of the tree that has been lost. In any event the claims for the market value of the trees that have been removed should be treated in a consistent way and as a result we have omitted this estimate from the Ferguson's claim. Thus the total loss of improvements as estimated by Mr. Grant after amending the replacement cost for one Norway spruce is $3,000 rounded.

[119]  Penticton constructed a capped 14 inch thick concrete wall that was again about two feet tall along the 70 foot frontage including a curved portion adjacent to the corner that had been taken. There were pillars flanking the two entryways and at the corners. This retaining wall cost Penticton $6,009 compared to the Clements' retaining wall at $1,912, the James' retaining wall at $2,433, the Penfolds' retaining wall at $6,537 or the Potter's retaining wall at $1,112. Penticton constructed a ramped sidewalk on the Ferguson's property at one entry and a step at the other entry. It also appears that some topsoil was supplied. Penticton paid $6,500 in total for these improvements. Mr. Hyslop estimated the contributory value of the replaced improvements at $1,000 to $2,000.

[120]  Mr. Ferguson testified that he was very dissatisfied with Penticton's work on the improvements and as a result he did some of the work on the improvements that Penticton had originally agreed to do. The claims for this work and other work done by Mr. Ferguson are discussed below under personal losses.

[121]  Mr. Hinter also indicated that he was surprised that two other white spruces in the opposite corner of the property had not been removed since they were located so close to the taking. Mr. Ferguson testified that the larger of these two trees (estimated to be 12 metres tall by Mr. Hinter) was only approximately 8 inches from Penticton's replacement wall while the smaller tree (estimated to be 9 metres tall by Mr. Hinter) was 21 inches from the new wall. There was evidence that during the work there had been excavation to some depth to create the forms for the new concrete wall. Mr. Hinter stated that if the root structure of large trees was disturbed it could affect their health and their stability. He had not inspected the trees during or after the construction of the wall.

[122]  The concrete and stone retaining wall with a cap and pillars has been replaced by a concrete retaining wall with some of the same features. The wooden picket fence in front of the retaining wall has been replaced by a wooden fence constructed by Mr. Ferguson on top of the new retaining wall. As we have indicated in the Clements' claim the claimants are entitled to the net change in the market value of the improvements in relation to the price that would have been attributed by a willing purchaser. After reviewing the very large number of photographs of the property both before and after the taking, as well as the relevant testimony, we conclude that a hypothetical purchaser would attribute about the same contributory market value to the retaining wall and fence provided by Penticton and Mr. Ferguson as the retaining wall and fence that were removed. Mr. Ferguson's costs are dealt with below. Similarly the topsoil that was provided by Penticton supplies the same contributory value as what was removed. However, there was no replacement for the white spruce that was removed at the time of the taking. We agree with Mr. Hinter that the white spruce that was removed by Penticton was well placed in framing the house as well as providing some privacy from Government Street. On the other hand it was the smallest of the three white spruce trees that were considered to be under some threat from the project. After reviewing all of the evidence and doing the best we can, we conclude that a hypothetical purchaser would attribute $1,500 of the purchase price for this property for the white spruce that was removed. Alternatively, a hypothetical purchaser would pay $1,500 less for the remainder as a result of the loss of this white spruce tree. (The other white spruce trees are dealt with below under personal losses.) A further $300 is awarded for the peonies, rhododendrons and roses that were lost.

• Lorne and Irene James — Market Value

• Background and Claim

[123]  The James had moved to their property at 1438 Government Street in the 1950's. They built the small one storey residence of 826 square feet with a partially finished basement. It was on the east side of Government Street and the lot measured 73.5 by 118.5 feet. A strip about 2.43 metres or eight feet was taken from the front yard of the property for the project. The total taking as indicated by surveyors was 592 square feet. This was the largest taking from the six subject properties because this property had the widest frontage.

[124]  According to Mr. Grant, the setback of the residence from Government Street was 32 feet before the taking. After the taking the setback was 24 feet. This continued to be in excess of the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[125]  We heard evidence from Larry James, the son of the claimants. He told us that his parents were 71 and 89 and had some health problems. He had handled the claim on behalf of his parents. He lived at 1438 Government Street when he spent time in Penticton. He had an office in Victoria. The claim advanced on behalf of Lorne and Irene James for market value and reduction in market value as a result of the project was as follows:

Market value of land taken without improvements	5,920
Market value of the improvements taken	12,254
Reduction in market value of the remainder	9,500
Total	$27,674

• Value of the Land Taken

[126]  We have concluded that the market value of the land taken is $9.00 per square foot and as a result the value for the 592 square feet taken from the James' property is $5,328.

• Value of the Improvements Taken

[127]  As a result of the taking the James lost three trees, a cedar hedge and a low concrete wall that appeared to be about six inches or eight inches tall. The cedar hedge was mature, about 2.5 metres (8.2 feet) in height, and ran along about two thirds of the front lawn frontage. The cedar hedge was dense enough and high enough to provide some privacy from the street although it only ran along part of the front lawn frontage. There was an alpine fir at the south end of the hedge that was approximately the same height as the hedge, about 2.5 metres. The photographs indicate that this alpine fir was squeezed between the cedar hedge and the retaining wall for the neighbour's driveway. There was a sugar maple at the north end of the cedar hedge with a trunk diameter of 61 centimetres (two feet) but a height of only 7.5 metres (24.6 feet). Because it grew very close to the front boundary all the original branches had been cut to a given height with the new sucker branches trimmed to keep them out of the Hydro lines. Mr. Hinter said that this practice had negatively affected the tree's appearance and health and that it did not provide much shade for the house. Finally there was a Douglas fir to the north of the maple that had a trunk diameter of 25 centimetres (10 inches) and height of 7.5 metres (24.6 feet). Again Mr. Hinter said that it offered little shade and would require trimming because of the hydro lines, which in turn would affect its appearance. There were two other evergreens further back on the front lawn and at either end of the residence which were not affected by the project.

[128]  Mr. Hinter valued the three trees and cedar hedge that were removed. For this property only he used a modified cost valuation. For two of the trees, the Douglas fir and the sugar maple, he estimated the replacement cost by the trunk formula method which took into account a species rating and the size of the trunk to estimate a modified replacement cost. He also carried out a condition rating and a location rating for each of the trees and using a formula involving the replacement cost (or the modified replacement cost) and these two further ratings he came up with a valuation by the cost approach for each tree. The valuations were as follows:

Douglas fir	2,288.56
Sugar maple	4,618.61
Cedar hedge	2,225.90
Alpine fir	375.00
Total	$9,525.00	rounded

[129]  Mr. Grant used Mr. Hinter's cost valuation plus the contributory value of the low concrete wall at $10 per foot or $620 and the contributory valuation of the lawn at $0.50 per square foot or $296. Thus the total costs for improvements that were lost was $10,441 as estimated by Mr. Grant. During final submissions the James amended their claim to include Penticton's costs to build a new concrete wall at $2,433 instead of the $620 contributory valuation for the old wall for a total claim of $12,254 for the cost of the improvements that were taken.

[130]  Penticton constructed a new concrete aggregate wall that was stepped along the frontage to provide for the rise in height across the front of the property. This wall was considerably taller than the concrete wall that had been removed, appearing close to two feet in certain spots and it curved into the driveway entrance. The new concrete aggregate wall was not a retaining wall. Behind the new wall Penticton planted 32 six foot cedar trees for a new hedge along the full frontage of the front yard to the driveway. The photographs indicated that these trees were planted close enough together to provide screening from the road. The hedge now extends across the entire front lawn frontage and curves into the driveway so that it offers more privacy along the whole length of the property than before the taking, although the hedge is not yet as tall as the hedge that was removed. Penticton also planted a new deciduous tree in the front yard. This was a young tree with a 2 inch trunk diameter. Finally Penticton replaced the topsoil and sod in disturbed areas. Penticton's costs for this remedial work was $5,669.48. Mr. Hyslop estimated the net contributory value of all of the improvements replaced by Penticton at $2,500 to $3,000.

[131]  Larry James, the son of the claimants testified that he was unhappy with this wall and hedge. He said that he had wanted both a taller wall and a taller hedge and claimed the cost to replace the wall. These claims will be dealt with under personal losses below.

[132]  The low concrete wall and partial hedge has been replaced by a higher stepped concrete aggregate wall and a cedar hedge across the full width of the front lawn. As we have indicated in the Clements' claim the claimants are entitled to the net change in the market value of the improvements in relation to the price that would have been attributed by a willing purchaser. In our opinion a hypothetical purchaser would attribute at least the same contributory market value to the concrete wall and the longer hedge provided by Penticton as to the shorter concrete wall and the partial hedge and the alpine fir that were lost. Similarly the topsoil and lawn that were provided by Penticton supply the same contributory market value. This leaves us with the net contributory value of a 7.5 metre Douglas fir and the 7.5 metre polled sugar maple in comparison to a small deciduous replacement. As indicated above we can give little weight to Mr. Hinter's estimations of value in the more extensive cost approach that he used for the trees on the James' property. His use of the trunk formula method for the sugar maple and Douglas fir maximized the valuation of these older trees, particularly the sugar maple, which had a relatively thick trunk but suffered negative impacts according to Mr. Hinter from having had its top cut off. In any event, we conclude that no purchaser would attribute almost $7,000 of the purchase price for this property to these two trees. After reviewing all of the relevant evidence we estimate that a hypothetical purchaser of this property would attribute $2,600 of the purchase price as the net contributory market value for these two trees that have been lost as a result of the project.

[133]  The James say that they are entitled to the value of the improvements not reflected in the market value under section 31(2)(b) of the Act. This statutory provision is to compensate residential owners for loss where they have invested in unmarketable improvements or in improvements where the money invested is only partially reflected in market value and then these improvements were lost as a result of the expropriation. Examples provided include a paraplegic who installed ramps or an owner who installed a bomb shelter. See Todd's The Law of Expropriation and Compensation in Canada at pp 286-288. The Supreme Court of Canada held that under a similar provision in the Ontario legislation, the residential owner was entitled to that portion of the cost incurred by the owner in constructing an addition to the residence three years before the expropriation that was not reflected in the market value. ($16,000 out of the $26,000 spent on constructing an addition where only $10,000 was included in the market value) Mr. Justice Spence speaking for the court in this case, Laidlaw v. Metropolitain Toronto (Municipality) (1978), 15 L.C.R. 24 (S.C.C.), stated at p. 31 "It is the rank injustice of depriving such persons of the value of their improvements by confining them to the market value of their improvements which the legislation seeks to avoid".

[134]  During argument Mr. Burke, counsel for the James, revised the claim based on Mr. Grant's estimate of $620 (as the contributory value of the existing wall) to $2,433 (for the city's cost to build the new higher concrete stepped wall). We accept that the James constructed the original six to eight inch concrete wall and planted the trees and hedge. This work was done some 40 years ago, in the 1960's (the hedge was replaced in the 1970's), by either Lorne James or his son. Lorne James had apparently worked in construction and his son had worked in a garden centre at one time. There was no evidence of any costs or time expended by the James for any of this work.

[135]  The statutory provision provides that the claimants are entitled to value of improvements made by an owner occupying a residence that are not included in the market value. We do not accept that Penticton's costs to its contractor to rebuild a higher wall in 2001 are any indication of the value of the original much shorter wall. In addition, we have already concluded that we can put little weight in Mr. Hinter's more extensive cost valuations for the trees on the James' property in 2001. There is no evidence of what the James invested nor any evidence that items have not been included in market value. Further, the facts in this case bear no resemblance to those in Laidlaw. The James have not suffered a loss similar to the Laidlaws from investing proven sums in improvements that have been taken that appraisal evidence now shows are not reflected in the market value. The James have enjoyed the relevant improvements for 30 to 40 years. In any event, a number of the lost improvements have been replaced and it would be double compensation to award the James Penticton's costs to rebuild a higher wall in 2001 and Mr. Hinter's valuation of the hedge at the same time that they have the benefit of a new replacement wall and hedge at no cost to themselves. We find that section 31(2)(b) does not apply and make no award under this section.

• Rod and Linda Penfold — Market Value

• Background and Claim

[136]  The Penfold's property at 740 Government Street was on the east side of Government Street. Linda Penfold estimated that the original part of the residence was about 60 years old and that they had moved there in 1978. The Penfolds had added an extension to the one storey residence in the 1980's so that it now totalled 1,590 square feet. The lot measured 60 by 158.5 feet. A strip about 2.43 metres or eight feet was taken from the front yard of the property for the project. The total taking was 485 square feet.

[137]  According to Mr. Grant, the setback of the residence from Government Street was 26 feet before the taking. After the taking the setback was 18 feet. This was less than the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[138]  We heard evidence from both Rod and Linda Penfold. Their claim for market value and reduction in market value was as follows:

Market value of land taken without improvements	4,850
Market value of the improvements taken	4,600	*
Reduction in market value of the remainder	30,000
* plus market value of landscaping taken agreed at	3,500
Total	$42,950

• Value of the Land Taken

[139]  We have concluded that the market value of the land taken is $9.00 per square foot and as a result the value for the 485 square feet taken from the Penfold's property is $4,365.

• Value of Improvements Taken

[140]  As a result of the taking the Penfold property lost two Siberian cedar shrubs, a concrete block wall, part of a privet hedge along the side of the driveway, some lawn, flowers and a portion of the driveway. Mr. Hinter estimated the height of the two Siberian cedars at 4 metres (13 feet). The two shrubs were in either corner of the lawn next to the concrete block wall on the front lawn boundary. Since the shrubs were quite dense and wide they provided some privacy from the street although they had outgrown their location and overhung the concrete block wall. There were also other shrubs on the inside of the concrete block wall. The concrete retaining wall extended along the front boundary of the lawn and had two layers of concrete screen blocks on top of the retaining wall made from textured concrete stone blocks.

[141]  Mr. Hinter provided the replacement cost of the two Siberian cedars. The same species of cedar only came in a 5 gallon pot at $106 each including transportation and planting. The replacement cost of a larger pyramid cedar was also provided at $1,764 each including delivery and planting. Mr. Hinter estimated that the small Siberian cedar would take 30 years to reach the size of the original shrubs while the pyramid cedar would take about 15 years.

[142]  Mr. Grant used Mr. Hinter's cost valuation of $3,528 for two of the more expensive cedars plus the contributory value of eight feet of hedging at $20 per linear foot or $160. He estimated the contributory value of the concrete retaining wall and concrete screen block fence wall at $20 per foot or $1,200. These three costs for improvements that were lost total $4,888 although Mr. Grant reported it at $5,090 which he rounded to $5,000.

[143]  During final submissions the Penfolds agreed to accept Penticton's offer for the value of lost vegetation at $3,500. They also amended their claim to include a contractor's estimate to replace the original retaining wall and concrete screen block fence at $4,600 instead of the $1,200 contributory valuation for the wall. Thus their total claim for improvements lost including the $3,500 settlement for lost vegetation was $8,100 instead of Grant's estimate of $5,000 rounded.

[144]  Penticton replaced the concrete block retaining wall with a poured concrete retaining wall and three rows of concrete screen blocks, or one more row than what was there before the taking. At the Penfolds' request they also removed all of the privet hedge and other shrubs and extended the concrete block fence along both sides of the front lawn to the front of the house. They replaced the topsoil and lawn that had been extensively disturbed as well as planting one small maple tree in the front lawn. Penticton repaved the driveway from the midpoint of the house to the street. There was evidence that the old driveway was dug out and removed, a compactor was employed on the base and then new paving applied. Penticton constructed a concrete inclined ramp (that is to form part of the sidewalk to the front door) from the driveway onto the front lawn which is now slightly higher than the driveway. Penticton's costs for this work was $8,384.95, including $6,536.95 for the new concrete fence. Mr. Hyslop estimated the contributory value of all of the improvements provided by the respondent at $1,500 to $2,000.

[145]  Mr. Penfold testified that he wanted a higher concrete block wall after the taking but Penticton refused to construct it higher than the three rows of concrete screen blocks on top of the retaining wall. There were also some problems with the driveway. These claims are dealt with under personal losses.

[146]  The concrete block retaining wall and concrete screen block fence have been replaced by a considerably longer poured concrete retaining wall and a higher concrete screen block fence. As we have indicated in the Clements' claim the claimants are entitled to the net change in the market value of the improvements in relation to the price that would have been attributed by a willing purchaser. In our opinion a hypothetical purchaser would attribute at least the same contributory market value to the replacement concrete wall and fence as he or she would to the one that has been lost. As a result the Penfolds are entitled to no award for the concrete wall and fence. They have $3,500 that they have agreed for lost vegetation.

[147]  The Penfolds say that they are entitled to the value of the improvements not reflected in the market value under section 31(2)(b). As we have indicated above in our analysis of the James' claim this statutory provision is to compensate residential owners for economic loss where they have invested in unmarketable improvements that have then been lost as a result of the expropriation.

[148]  During argument Mr. Burke, counsel for the Penfolds, revised the claim based on Mr. Grant's estimate of $1,200 for the contributory value of the existing wall to $4,600 based on a contractor's estimate to replace the existing concrete block retaining wall and concrete screen block fence. The Penfolds constructed the original low concrete block retaining wall and concrete screen block fence about 10 years ago. There was no evidence of any of the costs actually incurred by the Penfolds for this work. Nor was there any evidence that the value of the wall was not included in the market value. Again the facts are completely distinguishable from those in Laidlaw. Further, the concrete block wall has been replaced and it would be double compensation to award the Penfolds the contractor's costs to rebuild the original wall in 2001 at the same time that they have the benefit of a new longer and higher replacement wall at no cost to themselves. We find that section 31(2)(b) does not apply and make no award under this section.

• Loss of Conformity

[149]  The Penfold property now has a front yard setback that is slightly less than the 19.7 foot minimum. However, section 912 of the Local Government Act, RSBC 1996, c. 23 states:

912	(1)	If the use of land or the siting of existing buildings and structures on the land ceases, as a result of expropriation of land, to conform to a bylaw under this Division, the remainder of the property is deemed to conform.
	(2)	Subsection (1) does not apply if compensation was paid to the owner or occupant of the land in an amount that is directly attributable to the loss, if any, suffered by the owner or occupant as a result of the non-conformity.

We have not awarded any compensation for the front yard setback being less than the minimum specified. As a result the Penfold residence continues to enjoy deemed conformity under section 912. See Ingham (1996), 59 L.C.R. 113 (B.C.E.C.B.) at p 120; reversed on other grounds (1999), 66 L.C.R. 161 (B.C.C.A.).

• Kenneth and Eleanor Potter — Market Value

• Background and Claim

[150]  The Potters' property at 756 Government Street was on the east side of Government Street. The Potters had bought the property in the 1950's. It is a one storey residence of 1,193 square feet with a finished basement. The lot measured 60 by 158.5 feet. A strip about 2.43 metres or eight feet was taken from the front yard of the property for the project. The total taking was 485 square feet.

[151]  According to Mr. Grant, the Potter residence was set back 38 feet from Government Street before the taking. After the taking the setback was reduced to 30 feet. Both before and after the taking the Potter residence was set back the furthest of any of the residences on the subject properties and well in excess of the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[152]  We heard evidence from both Kenneth and Eleanor Potter. Their claim for market value and reduction in market value as a result of the project was as follows:

Market value of land taken without improvements	4,850
Market value of the improvements taken	6,347
Reduction in market value of the remainder	25,500
Total	$36,697

• Value of the Land Taken

[153]  We have concluded that the market value of the land taken is $9.00 per square foot and as a result the value for the 485 square feet taken from the Potters' property is $4,365.

• Value of Improvements Taken

[154]  As a result of the taking the Potter property lost two maple trees, a low concrete retaining wall of less than one foot at its highest, some lawn and a portion of the sidewalk and non-paved driveway. The two Norway maples were well spaced on either side of the lawn and just outside the eight foot taking. They were mature trees that had been cut back or polled every year with a current height of 4.5 metres (20 feet). Mr. Hinter described these trees as having been trimmed yearly to create a shorter denser crown structure. The two trees had a similar shape but it appears that one was red leafed and one was green leafed. Because of their height they did not provide shade to the house. There was a forsythia shrub beside the front porch that was some six to seven feet in height that was not affected by the taking.

[155]  Mr. Hinter provided the replacement cost of a 14 centimetre (5.5 inches) Norway maple tree. The replacement cost including transportation and planting was $2,939.75 per tree or $5,879 for both. The existing trees had calipers of 44 and 46 centimetres (17.3 and 18.1 inches) although their tops had been polled and Mr. Hinter estimated it might take 25 years for the replacement tree to reach the same trunk size of the existing trees.

[156]  Mr. Grant used Mr. Hinter's cost valuation plus the contributory value of the low concrete retaining wall and fence at $7 per foot or $350 and the contributory valuation of the lawn at what appeared to be $0.50 per square foot or $218. However, we note that Mr. Grant was mistaken in this estimate since there was no fence before the taking. In any event the total cost for improvements that were lost was $6,447 as estimated by Mr. Grant.

[157]  Penticton has replaced the low retaining wall with one that is somewhat higher than the one that it replaced. However, at its highest it is still about one foot in height sloping to only a few inches at the other side. Penticton has also planted a cedar hedge of 14 or 15 trees behind the wall. The cedar trees are 4 foot high and spaced too far apart to provide any screening from the street for a number of years. This hedge is both shorter and more widely spaced than the hedge of similar trees on the James property. A portion of the Potter's sidewalk was tied into the new city sidewalk. Topsoil and sod were added to areas that had been disturbed. Penticton's costs for this remedial work was $2,605.89. Mr. Hyslop estimated the contributory value of all of the improvements provided by the respondent at $2,000.

[158]  Mr. Potter testified that the retaining wall was constructed by Penticton's contractor using a number of short pours for the concrete footings from leftovers on other jobs. There are three cracks in the footings and at least two cracks in the retaining wall. There are also some ragged edges to the concrete retaining wall. Daryll Astofooroff, the engineering technician employed by Penticton that was in charge of organizing the remedial works, conceded that footings should not be made from several pours, although he had not observed that this had been done. There was vertical reinforcing rebar in the wall and it was not clear whether there was horizontal rebar.

[159]  The low retaining wall has been replaced by a slightly higher retaining wall. As we have indicated in the Clements' claim the claimants are entitled to the net change in the market value of the improvements in relation to the price that would have been attributed by a willing purchaser. In our opinion a hypothetical purchaser would attribute at least the same contributory market value to the retaining wall provided by Penticton as to the retaining wall that was replaced. Mr. Potter provided several photographs that showed the cracks in the wall as well as the rough edge along some of the wall. The defective work by Penticton's contractor in constructing this wall is unfortunate. However, we conclude that for this size retaining wall, a fully informed potential purchaser would not attribute less to the net contributory market value of the wall as a result of these very minor defects. Similarly the topsoil and lawn that were provided by Penticton supply the same contributory market value. This leaves us with the net contributory value of two 4.5 metre polled Norway maple trees after the contributory value of the cedar hedge of 15 short cedar trees planted well apart is deducted. We do not accept Mr. Hinter's cost to replace the Norway maples at $5,879 as the contributory value that would be attributed by a purchaser. After reviewing all of the photographs of this property and the relevant evidence we estimate that a hypothetical purchaser of this property might attribute $3,500 as the net contributory market value for these two trees.

• Neta Warner — Market Value

• Background and Claim

[160]  Mrs. Warner's property at 732 Government Street was on the east side of Government Street. She and her husband had bought the property in 1988. The one storey residence was 1,132 square feet. The lot measured 60 by 158.5 feet. A strip about 2.43 metres or eight feet was taken from the front yard of the property for the project. The total taking was 485 square feet.

[161]  Before the taking the Warner's residence was set back 26 feet from Government Street. After the taking the setback was 18 feet. This was less than the minimum setback for RS 3 zoning of 6 metres or 19.7 feet.

[162]  We heard evidence from Trevor Warner, Neta Warner's son. He told us that his mother was 93; a Power of Attorney appointing Trevor Warner as Neta Warner's Attorney was in evidence. He did not live at 732 Government Street. Her claim for market value and reduction in market value as advanced in argument was as follows:

Market value of land taken without improvements	$ 4,850
Market value of the improvements taken	$ 2,042	*
Reduction in market value of the remainder	$26,500
* mistakenly submitted at $6,782 based on improvements for whole front yard; claim amended to reflect the evidence for improvements on land taken
Total	$33,392	as amended

• Value of the Land Taken

[163]  We have concluded that the market value of the land taken is $9.00 per square foot and as a result the value for the 485 square feet taken from Neta Warner's property is $4,365.

• Value of Improvements Taken

[164]  As a result of the taking the Warner property lost a low concrete retaining wall, a chain link fence, a cedar hedge planted behind the fence, as well as some lawn and a portion of the sidewalk. There were two sizeable deciduous trees, one of them a birch tree, in the front yard neither of which was affected by the taking.

[165]  Mr. Hinter did not provide a cost replacement for the hedge that was lost. Mr. Grant estimated a contributory value of the hedge, lawn and sidewalk at $3.00 per square foot or $1,455 and a contributory value of the wall at $10.00 per linear foot or $600. Mr. Grant did not value the fence. The total contributory value for the improvements that were lost was $2,055 as estimated by Mr. Grant.

[166]  Penticton has replaced the concrete retaining wall that is about two feet in height and placed a chain link fence on top of the wall. It has also planted a cedar hedge of 14 or 15 trees behind the fence that are approximately the same height as the fence. The replacement cedar trees appear to be similar in size and shape to those that were planted on the Potter property and are similarly spaced at wide intervals. They do not provide any screening from the street at this time. A portion of the sidewalk was replaced and two steps tie it into the new city sidewalk. Topsoil and sod were added to areas that had been disturbed. Penticton's costs for this remedial work was $5,870.32. Mr. Hyslop did not estimate the contributory value of the replaced improvements.

[167]  The concrete retaining wall and fence have been replaced by a concrete retaining wall with a chain link fence on top. As we have indicated in the Clements' claim the claimants are entitled to the net change in the market value of the improvements in relation to the price that would have been attributed by a willing purchaser. In our opinion a hypothetical purchaser would attribute at least the same contributory market value to the retaining wall and chain link fence provided by Penticton as to those that were replaced. Similarly the topsoil and lawn that were provided by Penticton supply the same contributory market value. This leaves us with the net contributory value of a mature cedar hedge that provided privacy after the contributory value of the cedar hedge of 14 much shorter trees planted well apart is deducted. After reviewing all of the relevant evidence we estimate that a hypothetical purchaser of this property might attribute $800 as the net contributory market value for the mature cedar hedge.

• Loss of Conformity

[168]  As a result of the taking the Warner's residence is now set back slightly less than the minimum setback for RS 3 zoning of 6 metres or 19.7 feet. However, as we have described for the Penfold property section 912 of the Local Government Act, R.S.B.C. 1996, c. 23 provides that the property will be deemed to conform.

8. PERSONAL LOSSES

[169]  Each of the owners of the six subject properties has made a claim for personal losses under section 40 of the Act. These include expenses that have been incurred, expenses for work that the claimants say is now necessary and economic losses suffered as a result of time expended on the project. The individual claimants gave evidence as well as some contractors. These are described with respect to each property below.

[170]  Penticton disputed almost all of the personal losses. It claimed that the losses had not been proved or that they were not reasonable. In addition to Mr. Astofooroff, the engineering technician with Penticton, and Mr. Stout, the Public Works Manager, Penticton called specific rebuttal evidence to some of the claims for personal losses.

[171]  Under section 40 an owner is entitled to reasonable personal losses that are directly attributable to the taking or that result from the construction or use of the project. We have already said that we agree with Boyd's comments that the primary purpose of compensation is to place the owner whose land has been taken in the same position financially as he was prior to the taking. An owner should not be required to bear an economic loss that arises from the taking nor receive a windfall as a result of the taking. We appreciate that the claimants went through considerable disruption and inconvenience as a result of the project in which the street and the front of their property was dug up and under construction for some period. It is unfortunate that communication between Penticton and the claimants broke down at a very early stage. We heard several instances of Penticton refusing to meet with the claimants. Although there may very well have been some reasonable explanation for Penticton's actions, we wish to note our agreement with Mr. Burke, claimants' counsel, that it would have been in everyone's interest if Penticton had made every effort to facilitate communication with the property owners that were affected by this project, even after the Form A's were filed in June 2001. We also heard evidence about some poor quality workmanship on some of the improvements constructed on the claimants' properties. With the breakdown in communication most of these defects in workmanship were not brought to the attention of the city in order for it to order corrective action from the contractor who did the work. We understand that in the circumstances of an expropriation even minor defects in workmanship on a claimant's own property loom large. On the other hand even though the claimants suffered some inconvenience and some less than satisfactory conduct from Penticton or its employees or agents, they are only entitled to those losses that are reasonable economic losses that are directly attributable to the taking or that result from the construction or use of the project. The onus is on the claimant to establish these factors for each loss.

[172]  During argument there were several amendments to the claims for personal losses in light of the evidence that had been presented. Some of these amendments were to increase a particular claim, some were to reduce a particular claim, and some of the amendments were to add claims that had not been previously included. We appreciate that multiple claims for six properties each with claimants with different personal losses result in organizational and practical difficulties in presenting the evidence. Nonetheless, in our opinion, there should have been greater scrutiny of the claims for personal losses before the hearing so that fewer amendments to add claims or to amend claims during the hearing would have been required. Further, closer scrutiny should have eliminated some of the claims for personal losses in their entirety.

• Arthur and Patricia Clements — Personal Losses

[173]  The Clements made the following claims for personal losses:

Rental loss for April 1991	690
Personal losses associated with finding tenant	105
Personal losses to relocate hedge planted by Penticton	2,400
Personal losses to maintain new landscaping planted by Penticton	500
Art Clements economic loss	500
Total	$4,195

[174]  Patricia Clements testified that the existing tenant left 1014 Government Street at the end of March 2001. A hand written note signed by this tenant, Brenda Bryant, stated that she gave notice due to the noise and inconvenience from the construction "as well as needing more space". The monthly rent at this time was $690, reduced sometime in 1998 from $750 a month. One month's rent is claimed for April 2001 when the property was empty and efforts were being made to find a new tenant. Mrs. Clements said she paid $21 to readvertise the house and that she incurred mileage expenses at $.42 a kilometre to drive to the property to show it to prospective tenants. A total of $105 was claimed for losses related to finding another tenant.

[175]  Arthur Clement testified that the new yew hedge planted by Penticton blocked the view of Government Street for vehicles exiting the driveway. He stated he wanted to move these to the side of the front yard and replace them with 20 new evergreens which would be shorter. Estimates for these plants from a garden centre together with landscape cloth, mulch and fertilizer came to $1,375. He estimated that it would take him 41 hours to do this work and at $25 an hour he estimated $1,025 for labour for a total cost of $2,400. There was also a claim made for personal time to maintain the new landscaping at $500.

[176]  Mr. Clements testified that he had to take vacation time from his employment at Revenue Canada in order to meet with representatives from the city. Some of this time occurred early on in efforts to meet with the city to discuss the prospective expropriation. Other meetings occurred to discuss the construction or remedial works provided by Penticton including the driveway, the retaining wall, the black chain link fence and the yew hedge. A further meeting was to meet with Mr. Grant his appraiser. The claim of $500 for economic loss represent 26 hours at $19 an hour, which was his hourly rate of pay at Revenue Canada in 2001.

[177]  Penticton contested all of these claims for personal losses. The evidence did not establish that the project had caused the loss of rental income and the expenses to find a new tenant. The former tenant had not testified and the letter on its own was insufficient evidence. In the alternative, the letter said that the lack of space was one of the reasons for giving notice and therefore the tenant would have left 1014 Government Street in any event. The costs for the relocation of the yew hedge should be denied because it had been placed along the front of the property at Mr. Clements' request. Finally, the claim for economic loss should be denied, says Penticton, because Mr. Clements had not in fact lost any income.

[178]  It is unfortunate that the Clements now regret their choice of placement of the yew hedge along the front line of the property because of sight lines for vehicles exiting the property. We are not prepared to award the cost of moving the hedge in these circumstances. It is not a reasonable loss. The claim to buy and plant alternative plants is in our opinion even less reasonable. There were no plants removed from this property by the taking. In any event this loss has not yet been incurred and it is not clear to us that the planting of 20 new evergreens (in addition to the 12 yew trees supplied by Penticton) on this rental property would ever be done. The board has refused to award damages for personal losses that are speculative and may never be incurred. See Patterson v. British Columbia (Ministry of Transportation and Highways) (1994), 53 L.C.R. 88 (B.C.E.C.B.); aff'd 62 L.C.R. 89 (B.C.C.A.); Maddocks v. Surrey (City) (2001), 73 L.C.R. 161 (B.C.E.C.B.); Bayview Builders and Gorman Bros Lumber Ltd. v. British Columbia (Minister of Transportation and Highways), unreported (September 17, 2002), ECB #33/99/227. We deny the claim for landscaping costs. On the same basis we deny the claim for maintaining the new landscaping. We note that we heard no evidence of time spent on maintenance of the yew hedge immediately after it was planted. Mr. Clement talked about the ongoing pruning that would be required for this yew hedge. Trees and hedges require pruning (and some watering and other maintenance) both before and after the project. While there is a period when new trees and shrubs are more vulnerable to drought than more established plants, this time frame when extra watering and other care may be required is relatively short. Ongoing pruning and other maintenance is not a cost for which Penticton is responsible.

[179]  The loss of rental income and the costs to find a new tenant are recoverable if they are directly attributable to the taking or the construction of the project. We were provided with little evidence on this claim. We do not know how long this tenant had occupied the residence. We do not know when she gave notice. The tenant's letter provided two reasons for giving notice: the noise from construction and the need for more space. The fact that she needed more space means that in all probability she would have given notice within the short term in any event. The noise from construction may have brought the date for giving notice forward. The expenses associated with finding a tenant were not clearly established and they would have been expended in the near future regardless. Although the evidence falls short of establishing a direct link between the claims related to the tenant leaving and the taking or construction, we recognize that the construction did present additional challenges for finding tenants. In the circumstances we award $500 for the claims for loss of rental income and costs to find a new tenant.

[180]  The test for economic loss is whether as a result of the time expended by an individual with respect to the project, there is credible evidence of an economic loss by the claimant (or one may be reasonably inferred). See Pay Less Gas Co. (1972) Ltd. v. British Columbia (Minister of Transportation and Highways) (2001), 74 L.C.R. 81 (B.C.E.C.B.). Normally an owner's personal time spent in preparing the compensation claim, meeting with counsel, reviewing documents or in attending the hearing cannot be claimed but for out of pocket expenses put forward as costs. See Todd's The Law of Expropriation and Compensation in Canada at p 290.

[181]  Mr. Clements stated that he was required to take vacation time or time owing to deal with different aspects of the project and the claim. Mr. Clements agreed that he did not incur any financial loss. On the evidence that we were given we are not able to infer an economic loss to Mr. Clements. In any event the evidence in support of this claim was not strong. While Mr. Clements described several people with whom he had meetings he was vague about the time that this entailed. The claim is for $500 which is then said to represent 26 hours at $19 an hour. It appears that the claim was estimated in round numbers after the fact and not on the basis of the actual time logged or part days of vacation time that were claimed from his employer. This claim is denied.

• Edith Ferguson — Personal Losses

[182]  Ms. Ferguson made the following claims under section 40 for personal losses:

Costs to remove two spruce trees	6,000	*
Construction costs for patio	5,649	*
Construction costs for fence	2,670	*
Cost to remove and repair steps and ramp	900	**
Don Ferguson's economic loss	1,000
Total	$16,219
* amended during hearing ** added during hearing

[183]  First there was a claim for the future loss of the two white spruce trees that were only 8 inches and 21 inches from the new concrete retaining wall. Mr. Hinter had indicated that he was surprised that these two trees with a height of 12 metres and 9 metres respectively had not already been removed. Mr. Hinter had estimated $412 as the cost of a replacement 2 metre white spruce and $2,031 as the cost of a replacement 5 metre Norway spruce including delivery and planting. The claim for removing and replacing these two trees was presented at $3,000 each or $6,000.

[184]  Following the hearing we admitted new evidence that the smaller of the two white spruces in the south east corner of the property had been cut down by the Fergusons on August 16, 2002. In an affidavit Mr. Ferguson stated that there was a wind storm in Penticton reaching 90 kph on the evening of August 15 and in the early morning of August 16, 2002. On the morning of August 16, 2002 Mr. Ferguson states that this white spruce tree was leaning to the east towards Government Street and that the roots on three sides had pulled out of the ground up to two metres away. Mr. Ferguson states that he cut down the tree on the morning of August 16, 2002 with the assistance of a Tree Service contractor. He says that this action was taken because he perceived that the tree was unsafe.

[185]  Mr. Ferguson testified that he constructed the patio behind the house in 2000 in anticipation of the Government Street widening. This space he said was to replace the front veranda made unusable as a result of the anticipation of increased traffic after the widening. Mr. Ferguson said that they knew the work in front of their house would be done soon although it had not yet been announced. The claim for the patio was $5,649, with approximately $2,450 for materials and about $3,200 in labour for about 160 hours (4 weeks x 40 hours).

[186]  As we have indicated above, Mr. Ferguson was unhappy with Penticton's work on the improvements. The initial wall was not constructed as he thought had been agreed and he had to provide assistance to the workers as to what was wanted. He was also dissatisfied with the workmanship or the final product of both the step from the city sidewalk in front of his house and a short concrete sidewalk section that had been installed at the side entrance way to his property. The step from the sidewalk in front of the house was not level and the riser of the step was rough. The short section of sidewalk on the Ferguson property leading to the side gate had been constructed with a slight incline up to the street level. Mr. Ferguson wanted a step with a flat sidewalk rather than an inclined sidewalk. The claim was amended during the hearing to include $900 to take out the front steps and concrete ramp. This work had not yet been done but for removal of the concrete pad from the lawn at the base of the steps at the front entryway which Mr. Ferguson said he did not want.

[187]  As a result of his dissatisfaction with Penticton's contractors' work, Mr. Ferguson built the wooden picket fence on top of the concrete wall himself although the city had originally agreed to do this work. Mr. Ferguson also built two wooden gates to match the picket fence. Some section of the side fence had been knocked down during the construction of the concrete wall and Mr. Ferguson had replaced these sections. He stated that this was a temporary solution and that he intended to do more work on these side fences. The claim for fences was $2,670.

[188]  Finally Ms. Ferguson claimed $1,000 for Mr. Ferguson's economic loss for time he spent in dealing with aspects of the project and meeting with representatives from the city. Mr. Ferguson had worked in construction at an earlier time and now was developing a new occupation as a lutier or craftsperson making stringed musical instruments. Assuming an hourly rate of $20 his claim for economic loss represents about 50 hours.

[189]  Penticton opposed these claims. It said that the patio had been constructed before the project and was therefore not linked to the project. The other construction costs for the fence had not been adequately proved. Similarly the economic loss had not been adequately proved since Mr. Ferguon's work constructing stringed instruments was just beginning and had not developed to the point where he was earning a regular income.

[190]  With respect to the two remaining white spruce trees Penticton called Mike Kamann, a forestry technologist with Interior Reforestation Co. Ltd. Like Mr Hinter he had been certified as a Wildlife/Danger Tree assessor by the Ministry of Forests and Workers Compensation Board, following a two to three day course. Mr. Kamann stated that the taller tree that was closest to the concrete wall appeared to have less than 25% of the lateral roots damaged (based on visual inspection at ground level only) and exhibited a height/diameter ratio that was indicative of a very windfirm tree. At the time of his inspection it showed a lean of 10% to 15 % in the direction of the retaining wall and he concluded that the lack of root pull suggested that this leaning predated the construction. There were no visible signs of stress. In his opinion this tree would not fail because of the newly constructed retaining wall 8-10 inches away. However, he acknowledged he had not seen the root system during construction of the wall and did not know what had been done.

[191]  Penticton also filed a supplementary affidavit from Mr. Kamann with respect to the other white spruce that was cut down on August 16, 2002. Mr. Kamann attended the Ferguson property on October 8, 2002. He states that he saw a stump but no root pulling or disturbance to the earth in the vicinity of the stump but for a new evergreen sapling planted to the west of the stump. A photograph of the stump and surrounding ground was attached. Mr. Kamann states further that the stump did not lean and that if it had been leaning to the extent that there was root pull with the roots coming out of the ground as alleged by Mr. Ferguson in his affidavit that, in his experience, the stump would still be leaning. Mr. Kamann ends by saying that he has not seen any evidence that leaves him to conclude that the tree that was removed was in danger of falling.

[192]  We note that the 9 metre high white spruce that has been removed had a trunk that was 21 inches from the concrete while the larger 12 metre white spruce that remains had a trunk that was only 8-10 inches from the wall. The tree that has been removed was located in front of the residence while the larger 12 metre high white spruce was in the south east corner of the property. Clearly it is difficult to be definitive as to the risk posed by trees where digging has occurred in the vicinity of their root system. It is also difficult to be definitive as to what happened to the one tree that has been removed and whether its removal was directly attributable to the taking or resulted from the construction of the new retaining wall. While we received no expert evidence as to the windfirmness of the tree that was removed we would have expected the other tree that was 50% closer to the wall to have been more at risk. There were no photographs provided of the tree that was removed before it was cut down. While we are unable to find that the loss of the one white spruce tree is as a result of the project (or that the other white spruce tree will be lost as a result of the project), in the circumstances we conclude that some compensation for the risk of costs related to the two white spruce trees is appropriate. We award $2,000 for the risk of costs that are directly attributable to the taking or result from construction of the retaining wall with respect to the two white spruce trees.

[193]  Ms. Ferguson's next claim was for the patio constructed in 2000. This board has held that disturbance damages incurred before the taking may be recoverable. See Sequoia Springs West Development Corp. v. British Columbia (Minister of Transportation and Highways) (2000), 69 L.C.R. 1 (B.C.E.C.B.), at para 98-100; aff'd 2003 BCCA 8. However, the issue of causation remains. Is the loss directly attributable to the taking or the construction or use of the project? Installing patios and decks behind residences is common even on quiet streets. It presumably contributes to the market value of a property. The claimant referred us to Nan v. Black Pine Manufacturing Ltd., [1991] 5 W.W.R. 172 (B.C.C.A.) with respect to a claimant being entitled to any betterment. The facts in Nan are distinguishable from those in the present case and in any event we note that principles in tort law are not necessarily applicable to damages in expropriation cases. See Todd's The Law of Expropriation and Compensation in Canada at p 305 note 180 and Casamiro Resource Corp v. British Columbia (2000), 70 L.C.R. 81 (B.C.C.A.) at para 44. See also Bayview Builders at para 66. Government Street was already a busy street and the traffic counts show the same number of vehicles on Government Street in October 2001 following the project as in 1994. Thus the benefit of a patio behind the house existed in 1994 and even in 1982. We conclude that there is insufficient evidence to link the construction of the patio with the taking or the project. This claim is denied.

[194]  Mr. Ferguson constructed the picket fence on top of the concrete wall and two gates. This work was to replace what had been there before the taking and Penticton had originally agreed to do this work. Ms. Ferguson is entitled to compensation for this work done by her spouse as a personal loss. Mr. Ferguson estimated after the fact that it had taken him about a week to do this work. At $20 an hour this came to $800 for labour but this estimate is clearly less reliable than someone logging their hours in writing at the time that they were incurred. There was some confusion in the evidence and the labour costs were also represented as $720 and $500. The invoices labelled front fence came to just under $240.

[195]  Monies were also claimed for rebuilding the side fences. Photographs showed that some panel sections of each side fence had been removed during the construction at the front of the property. Mr. Ferguson had already reinstalled these sections although he also said he intended to do more work in the future. There was confusion in the evidence with respect to what costs, if any, had already been incurred that were related to reinstalling these side panel sections and what costs were covered in estimates for further materials and labour for future work. It was not clear to us precisely what work Mr. Ferguson proposed to do in the future and, particularly given that the existing panel sections have been reinstalled, we are uncertain whether any further work will in fact be done. In the circumstances we award a total of $1,500 for the claim for fence construction, including the new fence at the front of the property, two new gates and replacing the panel sections at the two sides of the property.

[196]  There was a $900 claim to remove and rebuild the front steps and the side ramp that Mr. Ferguson did not want. This claim was added during the hearing. Virtually none of this work has yet been done and again we are uncertain as to what will in fact be done. We understand that Mr. Ferguson was not satisfied with this work. At the time that this work was done communication between Penticton and Mr. Ferguson appears to have been particularly difficult. It is unfortunate that in addition to the work that he did not want that there were some relatively minor defects in the work done by Penticton's contractor on the front steps. However, we find that a claim for costs to smash out this concrete at some future time and then replace it is both speculative and in all the circumstances unreasonable. We note the comment at p 305 of Todd's The Law of Expropriation and Compensation in Canada that disturbance damages are not analogous to the law of damages in contract. We award nil for this claim.

[197]  Finally there was a claim for $1,000 for Mr. Ferguson's economic loss in dealing with the project. We have no doubt that Mr. Ferguson expended time in dealing with Penticton. However, we were not able to infer any economic loss and award nothing for this claim. We have awarded Mr. Ferguson's time in building the fence and gates.

• Lorne and Irene James — Personal Losses

[198]  At the beginning of the hearing the James claimed personal losses under section 40 as follows:

Cost of removing and replacing concrete wall	4,500
Invoice from Larry James	4,503
Total	$ 9,003

We heard evidence from Larry James, son of the claimants, with respect to this claim. He stated that the cost of replacing the wall was being claimed because he wanted a higher wall than the one that had been provided. When pressed by his counsel as to what was wrong with the wall he said there were some cracks where the wall stepped up. The following week, a piling, underpinning and mudjacking contractor, Steve Alexandra, of Even Steven Contracting, stated that he had attended at the property on the intervening Saturday. He testified that the cracking in the wall could be addressed by stabilizing the wall by driving three sets of two inch mini pipe piles to a maximum average depth of 30 feet. As a result the statement of claim was amended to reflect his estimate to do this work. The amended claim for personal losses advanced in argument by the James was as follows:

Stabilize concrete wall	2,568
Larry James invoice	4,785
Total	$ 7,353

[199]  Mr. Astofooroff, the Penticton employee who oversaw work on the project, said that the concrete wall was not a retaining wall and had been constructed with horizontal reinforcing rebar. We also had rebuttal evidence from Michael Weilmeier, a structural engineer with CWMM Consulting Engineers Ltd. He had inspected the wall and stated that the cracks in the James wall were mere shrinkage cracks that gave rise to no structural concerns. No work needed to be done to stabilize the concrete wall.

[200]  We accept Mr. Weilmeier's evidence that the stepped concrete wall has no structural problems. As a result the claim for stabilizing the wall with three sets of two inch mini pipe piles to a maximum average depth of 30 feet is denied.

[201]  We would add that although we saw photographs of the wall, we were provided with no photographic evidence of the cracks. We were not given any evidence in this case that linked the cracks in this wall to defective workmanship. Mr. Alexandra, the contractor who provided an estimate to stabilize the wall, did not know that the wall had been constructed with footings and rebar reinforcements. At the time of the hearing the owners had made no effort to either remove or rebuild the wall although they had initially claimed that this work was necessary. It was not clear to us that the changed proposal to stabilize the wall would ever be done. If we had not already found the work to stabilize the wall unnecessary, it would have been denied on the basis that it was speculative.

[202]  Larry James had submitted an account to his parent dated February 15, 2002 for $4,503.45. This account stated that it was for Larry James' time with respect to the claim including reviewing the documentation for the taking, meeting with Penticton representatives, taking photographs, driving his parents to meetings, corresponding with Mr. Burke and Mr. Grant and Penticton, getting quotes from contractors, and briefing his parents about all of the above. The total fees were $3,500 which he estimated at 175 hours at a nominal $20 an hour, although he stated that he had spent many more hours than 175. He was not able to provide any further information on the hours he had spent. Disbursements included mileage, postage, film, photocopies, and expense to have calls forwarded to Penticton. GST was charged. Mr. James stated that his account had been paid. The account also stated that the following expenditures would be incurred "soon": replacement cost for hose damaged by contractor $15.95; repair of fence damaged by contractor $65.58; installation of a watering system $200. These three expenses together with the fees, disbursements and GST total the $4,785 claimed for the son's invoice.

[203]  Larry James had been a lawyer although he was not presently in practice. His account was from Larry James Management Services in Victoria. He had taken courses in negotiation and arbitration and continued to act as an arbitrator on occasion. He also had some business interests. His office was in Victoria but he appears to have spent some time in Penticton as well.

[204]  Larry James' account has been presented as a claim for personal losses under section 40 rather than a cost claim under section 45. However, we will give the claimants the benefit of considering the claim under both sections. Larry James' evidence suggests that he was acting as agent for his parents, on his own initiative. While we appreciate that his parents may have had some health problems, Larry James testified that one of the reasons he was acting instead of his father was because his father was too agreeable to deal with the city. The evidence appeared to be that the claimants normally lived on their own and that Larry James was not required by his parents for assistance in their ordinary living activities on a daily basis. Under section 45 the board is to give the claimants their reasonable costs necessarily incurred for the purpose of asserting their claim for compensation. The board has been reluctant to impose the costs of additional consultants on authorities where their services were redundant with respect to those which were reasonably expected from counsel, and other experts such as an appraiser, a planner, a business valuator or an engineer. See 343146 B.C. Ltd. v. Minister of Transportation and Highways (1993), 50 L.C.R. 221 (B.C.E.C.B.) and Ingham v. Creston (Town) (2000), 69 L.C.R. 263 at para 50; reversed on other grounds 73 L.C.R.122 (B.C.S.C.). In 343146 B.C. Ltd. the board disallowed the fees for the services of an appraiser consultant when that person was in addition to a lawyer and an appraiser. In Ingham the fees of a spokesperson for a group of claimants in its dealings with the respondent and their professional advisors was disallowed as unnecessary, even though the claimants in that case testified that the spokesperson had done some work for them that they could not have done. We see this reasoning as applicable in the present case and do not find Larry James' work as an agent for his parents as necessary work for which Penticton should be held responsible.

[205]  There is then the issue of reasonableness, a requirement under both section 45 and section 40. We do not find that it was reasonable for Larry James to relocate to Penticton for a number of months to spend more than 175 hours on this claim. The claim for Larry James' fees is denied.

[206]  We have considered the disbursements in Larry James' account separately. Some of them were for various expenses incurred as a result of the project. Although these were not strictly proved we are prepared to award $95 for the plant supplies, ice and electrician bill. We are also prepared to award $16 for the damaged hose. Installation of a watering system is not directly attributable to the taking or the construction of the project. Other disbursements for photocopying and long distance calls to counsel are more properly characterized as costs under section 45 rather than personal losses under section 40. We leave them to be considered as cost items at a later stage. We award $111 in total for personal losses.

• Rod and Linda Penfold — Personal Losses

[207]  During argument Rod and Linda Penfold made the following claims under section 40 for personal losses:

Costs to maintain new landscaping	500
Costs for stone retaining walls	1,900	**
Costs to repair cracks	1,700
Costs to correct driveway	1,366	*
Cleaning costs	460
Rod Penfold's economic loss	1,000	*
Total	$6,926
* amended during hearing ** added during hearing

[208]  Mr. Penfold explained that the stone retaining walls were necessary to retain dirt on either side of the new inclined sidewalk at the side entrance to their property. Penticton had installed the new inclined ramp from the driveway to meet the level of the lawn, which was now somewhat higher than the driveway. Before the taking the sidewalk and the driveway had been level. Penticton had repaved the driveway but Mr. Penfold said it needed to be repaved to direct water flow away from the house.

[209]  With respect to the estimate to repair the cracks at $1,700 Mrs. Penfold told us that the cracks had appeared shortly before Christmas 2001 in the older part of the residence in two different rooms, the kitchen and the spare bedroom. The cracks were in a stucco ceiling. There was an estimate in January 2002 for $460 for the cleaning of carpets as well as cleaning of windows, walls, and ceilings. Only the carpets had been cleaned to date at a cost of $140.

[210]  There was a claim to maintain the new landscaping consisting of a new lawn and small maple tree. Finally Mr. Penfold claimed for his economic loss on spending time as a result of the taking and the project. In addition to part time work supplying janitorial services in the evenings several days a week, Mr. Penfold was starting a business as a free lance landscape photographer. It was interference with this work that he claimed had caused him to suffer an economic loss.

[211]  Penticton disputed all of these claims. It argued that there was insufficient evidence to support any of them.

[212]  The claim for $1,900 for the stone retaining walls was based on an estimate from Lyon Masonry. This work has not been done and the claim was added during the hearing. The length of the ramp is relatively short. Mr. Penfold said that they planned to put flower beds behind these stone walls. We are not certain this work will be done. Further, less expensive options would have been more reasonable. The claim is speculative and we do not find it a reasonable personal loss for which Penticton is responsible.

[213]  The estimate for $460 for cleaning included $140 for cleaning the carpets and the rest for the cleaning of windows and interior walls and ceilings. Only the carpet cleaning had been done at the date of the hearing. Mrs. Penfold told us that their usual practice was to have the carpets in the residence cleaned every six months. This would suggest that the costs for carpet cleaning would have been incurred in any event and thus, these costs are not directly attributable to the taking or the construction of the project. The same is likely the case for window washing and interior wall washing. On the other hand there was a good deal of dirt and dust created by the project for some months. In the circumstances we award the Penfolds $250 for additional cleaning costs.

[214]  The claim for $1,700 to fix cracks in the stucco ceilings was based on an estimate from Homewall Contracting. This claim was not included in the interrogatories dated December 18, 2001. Although we were provided with a large number of photographs of the property by the experts and the claimants we did not receive any photographs of the cracks. It is not clear to us what work is included in the estimate to repair the cracks. This work has not been done and we are uncertain that it will be done. There is insufficient evidence to support this claim and it is denied.

[215]  The claim for $1,366 to repave the driveway is based on an estimate from Jennic Paving dated the second day of the hearing. This complaint was not included in interrogatories dated December 18, 2001. Mr. Penfold says that following Penticton's paving of his driveway some water now flows towards the house on its way to the street. He had not told anyone at the city about this problem. Mr. Heinrich of Jennic Paving said that the present slope on the driveway resulted in water being directed both towards the street and towards the residence. He proposed to raise the driveway two or three inches near the house so that water flow would be directed towards the other side of the driveway. Mr. Heinrich had not tested the driveway with a hose and the evidence was unclear as to the relative amount of water flow that ended up near the house and for how long. This work has not been done. Although the evidence on this claim is less than complete we recognize that there is some risk that the Penfolds will incur some costs to fix a defect that did not exist before the hearing. In the circumstances we award $500 for this claim.

[216]  Mr. Penfold told us about a number of meetings he had attended as a result of the project. Many of these were in pursuit of his claim for compensation as opposed to dealing with the project. However, his evidence about an economic loss was not made out and the claim was reduced from $5,000 to $1,000 in argument. We do not find that the evidence was sufficient to support any inference of economic loss and as a result we deny this claim. We also deny the claim for time to maintain landscaping.

[217]  Although the claim was not put forward in argument there was evidence that Mr. Penfold had incurred costs of $103 for materials to construct a new gate since the opening was now a different width and the old gate would not fit. We award $150 for the cost of the new gate, including some time for labour.

• Kenneth and Eleanor Potter — Personal Losses

[218]  The Potters made the following claims for personal losses under section 40:

Cleaning costs including cleaning furnace	500
Costs to replace the water main	795
Costs to install sprinkler system	280
Costs to maintain landscaping	500
Total	$2,075

[219]  There were invoices for cleaning the furnace ducts in September 2001 for $202 and for cleaning carpets in October 2001 for $168. Mrs. Potter said that she wished to get the walls cleaned as well. During the construction of the project a representative from Penticton had advised them to have their galvanised water line connection replaced. They had done so at a cost to them of $795. Finally they had paid $200 for the installation of a sprinkler system.

[220]  Penticton objected to all of these claims.

[221]  As described above, although the evidence suggests that the cleaning costs would have been incurred in any event, there was a great deal of dirt and dust and we award $400 for cleaning including the cleaning of the furnace ducts.

[222]  According to Mrs. Potter their house was built in the 1950s and they had not replaced their galvanised water connection before. There was evidence that the Penfolds had replaced their water connection some five to six years ago and their house was very approximately the same age as the Potter house. This suggests that replacement of the water connection would have occurred in the near future in any event as normal maintenance. We award $200 for the cost of doing this work earlier.

[223]  The sprinkler system is not directly attributable to the project. We deny the cost of it and the claim for maintenance of landscaping.

• Neta Warner — Personal Losses

[224]  Neta Warner claimed the following personal losses under section 40:

Replace front gate	500
Replace hedge	200
Cost to maintain landscaping	200
Costs to clean up flooding damage in basement	2,548
Costs to replace carpet	706
Total	$4,154

[225]  Trevor Warner, son of the claimant Neta Warner provided evidence on these claims. The gate in the new chain link fence was not replaced and Mr. Warner had estimated $500 to construct a new one. There was a claim for replacing landscaping and maintaining it. A leak had occurred in the basement during construction. The wet carpets were eventually discovered by a care worker and no one knew when the leak had occurred. We also do not know what it was that leaked. The claims for replacing the carpet and wall board were based on two invoices paid by the insurers but for a $500 deductible paid by Neta Warner.

[226]  Penticton disputed these claims.

[227]  The cost for the gate has not yet been incurred. Nonetheless we allow it at $150, the same amount as awarded to the Penfolds.

[228]  The claim for new landscaping was based on Mr. Warner's efforts to claim for the difference between what landscaping was there before the project and what landscaping there is now. We have already awarded compensation for the net difference in contributory value of the landscaping above. There is no basis for any further compensation, which would be double compensation in any event. There is also no basis for the claim to maintain landscaping.

[229]  With respect to the claims related to the leak in the basement, Mr. Warner does not live in the house and had never spoken to the plumber who fixed whatever was leaking. Mr. Warner's memory was that at the time the leak was discovered Penticton had already removed the hedge and fence and part of the walkway in front of his mother's residence. However, when the leak was discovered the construction equipment was no longer near the Warner residence and was working at the south end of the site. In the circumstances there is insufficient evidence to tie this leak to the construction of the project and we deny these claims.

9.  SUMMARY

[230]  The claimants have been awarded the following compensation:

Arthur and Patricia Clements
	Market value of land taken without improvements	3,195
	Market value of the improvements taken	nil
	Reduction in market value of the remainder	nil
	Rental loss for April 1991 and expenses for re-renting	500
	Personal losses to relocate hedge planted by Penticton	nil
	Personal losses to maintain new landscaping planted by Penticton	nil
	Art Clements' economic loss	nil
	Total	$3,695

 

Edith Ferguson
	Market value of land taken without improvements	2,124
	Market value of the improvements taken	1,800
	Reduction in market value of the remainder	nil
	Risk of costs to remove and replace two spruce trees	2,000
	Construction costs for patio	nil
	Construction costs for front and side fences	1,500
	Cost to remove and repair steps and ramp	nil
	Don Ferguson's economic loss	nil
	Total	$7,424

 

Lorne and Irene James
	Market value of land taken without improvements	5,328
	Market value of the improvements taken	2,600
	Reduction in market value of the remainder	nil
	Stabilize concrete wall	nil
	Larry James' invoice	111
	Total	$8,039

 

Rod and Linda Penfold
	Market value of land taken without improvements	4,365
	Market value of the landscaping agreed	3,500
	Reduction in market value of the remainder	nil
	Costs to maintain new landscaping	nil
	Costs for stone retaining walls	nil
	Costs to repair cracks	nil
	Costs to correct driveway	500
	Cleaning costs	250
	Gate	150
	Rod Penfold's economic loss	nil
	Total	$8,765

 

Kenneth and Eleanor Potter
	Market value of land taken without improvements	4,365
	Market value of the improvements taken	3,500
	Reduction in market value of the remainder	nil
	Cleaning costs including cleaning furnace	400
	Costs to replace the water main	200
	Costs to install sprinkler system	nil
	Costs to maintain landscaping	nil
	Total	$8,465

 

Neta Warner
	Market value of land taken without improvements	4,365
	Market value of the improvements taken	800
	Reduction in market value of the remainder	nil
	Replace front gate	150
	Replace hedge	nil
	Cost to maintain landscaping	nil
	Costs to clean up flooding damage in basement	nil
	Costs to replace carpet	nil
	Total	$5,315

[231]  Since the total of the two advance payments to Lorne and Irene James at $9,400 is more than the compensation awarded, pursuant to section 30(2) of the Act we certify the difference of $1,361 as a debt due by the James to Penticton. This amount may be reduced or set off against the interest and the costs owing to the James.

[232]  Since the total of the two advance payments to Kenneth and Eleanor Potter at $8,800 is more than the compensation awarded, pursuant to section 30(2) of the Act we certify the difference of $335 as a debt due by the Potters to Penticton. This amount may be reduced or set off against the interest and the costs owing to the Potters.

10.  INTEREST

10.1  Section 46(1), Regular Interest

[233]  We have awarded the claimants for each of the six properties compensation as follows: $3,695 to Arthur and Patricia Clements; $7,424 to Edith Ferguson; $8,039 to Lorne and Irene James; $8,765 to Rod and Linda Penfold; $8,465 to Kenneth and Eleanor Potter; and $5,315 to Neta Warner. Penticton made advance payments to the claimants for each of the six properties in two installments on March 9, 2001 and March 20, 2002; it appears that the second installments did not include interest. These advance payments are set out at para 29. The claimants for each of the six properties are entitled to interest under section 46(1) of the Act on the compensation awarded that is in excess of the respective advance payments. The interest on the amount of compensation for market value of the land that was taken and the net market value of the improvements that were taken runs from March 12, 2001 until paid. Most of the personal losses were incurred during 2001 or in the spring of 2002. In order to facilitate calculations of interest on these relatively small sums, we also award interest on the compensation for the personal losses from March 12, 2001.

10.2  Section 46(4), Additional Interest

[234]  Under section 46(4) of the Act, any claimant whose total advance payment under section 20 is less than the compensation awarded is entitled to additional interest at an annual rate of five percent on the difference. All of the claimants received advance payments under section 20 that were more than 90% of the total compensation they have been awarded but for Ms. Ferguson. Ms Ferguson's advance payment was 61% of the total compensation awarded to her. Ms. Ferguson is entitled to additional interest, at an annual rate of five percent, on the principal amount outstanding at March 9, 2001 and on the new principal amount outstanding after the further advance payments on March 20, 2002 until the date of this decision. This board in Richland Farms Ltd. v. British Columbia (Ministry of Transportation and Highways) (1991), 46 L.C.R. 66 established the basis upon which an award for additional interest is to be made. First, while interest under section 46(1) compounds annually, additional interest under section 46(4) provides for simple interest only. Second, the calculation of additional interest runs on the outstanding difference from the date of each advance payment.

11.  COSTS

[235]  Under section 45(4) if the compensation awarded an owner is greater than 115% of the total advance payments made to them under section 20 then the authority must pay the owner his or her costs. All of the claimants received less than 115% of their total advance payments but for Ms. Ferguson. Ms. Ferguson is entitled to those costs under section 45(3) and the Tariff of Costs Regulation, B.C. Reg 189/99 (the Tariff) that were necessarily incurred by her for the purpose of asserting her claim for compensation or damages.

[236]  We have concluded above that there are only six valid claims before us -- one for each property, although ten Form A's were filed -- one for each spouse on title. These six claims were very similar and were heard together. The valuation of the land that was actually taken was valued identically by both appraisers. The alleged reductions in market value were similar and were affected by identical factors. There was some variation in the market value of the improvements that were taken and the personal losses. The same counsel represented all the claimants. The same appraiser was retained by all the claimants. The appraisal issues were almost identical but for the market value of the improvements taken. Although six appraisal reports were filed by Mr. Grant the bulk of these reports were identical. The number of units that may be claimed in each of the Bills of Costs for the six claims is an issue for the chair at a determination of costs under section 45(9). If such a review becomes necessary, this similarity of some parts of the claims and the work that was necessarily done by the claimants for the purpose of asserting their claim for compensation or damages may be a factor for consideration. See Ingham v. Creston (Town) (2001), 73 L.C.R. 129 (B.C.E.C.B.) para 39.

[237]  In our opinion this matter was of ordinary difficulty. With respect to Ms. Ferguson's costs we see no reason to depart from the presumption found in section 4(3) of the Tariff in favour of Scale 2.

[238]  Under section 45(5) the board has discretion to award costs to owners who receive 115% or less of the total advance payments made to them under section 20. Counsel agreed that costs should be adjourned if we had a discretion as to entitlement to costs and accordingly the claims for costs for all of the claimants but Ms. Ferguson are adjourned. Nonetheless we make a few observations that are relevant that may facilitate the parties in settling this issue in whole or in part without further submissions. To the extent that the issues do not resolve and a further hearing on entitlement to costs is necessary, these comments are not intended to be determinative.

[239]  In this case, except for Ms. Ferguson, the claimants for each of the subject properties have received close to the total advance payments, some receiving slightly less and some receiving slightly more. However, the second advance payment to each claimant was not made until shortly before the hearing. Thus the claimants had to proceed to the eve of the hearing to obtain approximately the amount that we have determined as compensation. We also recognize that claimants in expropriation cases should not necessarily be penalized for raising an argument that is ultimately rejected by the board. The decision in Ingham may have given the claimants some basis to think that they were entitled to compensation for reduction in market value. However, notwithstanding Ingham, in our opinion the circumstances in this case are quite different.

THEREFORE IT IS ORDERED THAT the respondent, the City of Penticton, shall pay:

1.  Compensation to Arthur and Patricia Clements

a)  in the amount of $3,195 for the market value of their fee simple interest in the expropriated property and the reduction in market value for 1014 Government Street;

b)  in the amount of $500 for personal losses

pursuant to section 40 of the Act.

2.  Compensation to Edith Ferguson

a)  in the amount of $3,924 for the market value of her fee simple interest in the expropriated property and the reduction in market value for 739 Government Street;

b)  in the amount of $3,500 for personal losses

pursuant to section 40 of the Act.

3.  Compensation to Lorne and Irene James

a)  in the amount of $7,928 for the market value of their fee simple interest in the expropriated property and the reduction in market value for 1438 Government Street;

b)  in the amount of $111 for personal losses

pursuant to section 40 of the Act. Pursuant to section 30(2) of the Act we certify that as a result of advance payments made by Penticton under section 20 of the Act the James have been overpaid by $1,361 and that sum is a debt due and payable by the James to Penticton, subject to set off against interest and costs owing to the James.

4.  Compensation to Rodney and Linda Penfold

a)  in the amount of $7,865 for the market value of their fee simple interest in the expropriated property and the reduction in market value for 740 Government Street;

b)  in the amount of $650 for personal losses

pursuant to section 40 of the Act.

5.  Compensation to Kenneth and Eleanor Potter

a)  in the amount of $7,865 for the market value of their fee simple interest in the expropriated property and the reduction in market value for 756 Government Street;

b)  in the amount of $600 for personal losses

pursuant to section 40 of the Act. Pursuant to section 30(2) of the Act we certify that as a result of advance payments made by Penticton under section 20 of the Act the Potters have been overpaid by $335 and that sum is a debt due and payable by the Potters to Penticton, subject to set off against interest and costs owing to the Potters.

6.  Compensation to Neta Warner

a)  in the amount of $5,165 for the market value of her fee simple interest in the expropriated property and the reduction in market value for 732 Government Street;

b)  in the amount of $150 for personal losses

pursuant to section 40 of the Act.

7.  Interest pursuant to section 46(1) of the Act on the monies awarded to the claimants who were owners of each of the subject properties from March 12, 2001 until paid, with adjustments to take into account moneys paid by the respondent to each of the claimants as compensation pursuant to section 20(1) and (12) of the Act on March 9, 2001 and March 20, 2002. Pursuant to section 46(2) of the Act, interest shall be calculated annually at the following rates:

a)  Seven and one-half per cent (7.5%) from January 1, 2001 to June 30, 2001.

b)  Six and one-quarter per cent (6.25%) from July 1, 2001 to December 31, 2001.

c)  Four per cent (4.00%) from January 1, 2002 to June 30, 2002.

d)  Four and one quarter per cent (4.25%) from July 1, 2002 to December 31, 2002.

e)  Four and one-half per cent (4.5%) from January 1, 2003 to June 30, 2003.

8.  Additional interest to Edith Ferguson on $5,424 pursuant to section 46(4) of the Act at the annual rate of five per cent (5.0%) from March 9, 2001 until the date of this decision, with adjustments to take into account further moneys paid by the respondent to this claimant as compensation on March 20, 2002 pursuant to section 20(12) of the Act.

9.  The costs to Arthur and Patricia Clements, to Lorne and Irene James, to Rodney and Linda Penfold, to Kenneth and Eleanor Potter, and to Neta Warner are adjourned.

10.  Those costs to Edith Ferguson at Scale 2 that were properly and reasonably necessary to conduct the proceeding pursuant to section 45 of the Act and the Tariff of Costs Regulation, B.C. Reg 189/99.