E.C.B. Number 74/92/221

Between:	Whitechapel Estates Ltd. Piccadilly Estates Ltd. Delsom Estates Ltd. and Norman Dennis Elsom Claimants
And:	The Ministry of Transportation and Highways Respondents
Before:	Sharon I. Walls, Vice Chair Martin A. Linsley, FCAA, FCIP, CBV Azim S.M. Jamal, AACI, P.App, FRICS, RI(BC)
Appearances:	David H. Goodwin, Counsel for the Corporate Claimants N. Dennis Elsom, In Person Alan V.W. Hincks, Counsel for the Respondent

[1] The four claimants owned 19 separate but contiguous parcels of developable property in Delta, British Columbia occupying approximately 60 hectares (147 acres). The claimant, Dennis Elsom, owned the majority of the lots. The claimant, Whitechapel Estates Ltd., owned one lot, the claimant, Piccadilly Estates Ltd., owned one lot, and the claimant, Delsom Estates Ltd., owned two lots. Mr. Elsom was the principal of the three corporate claimants. Thus there were four owners of the 19 legal lots but there was one controlling mind and the 19 lots could be said to have common ownership.

[2] The respondent, the Ministry of Transportation and Highways (the "Ministry") required approximately 4.5 hectares (11 acres) of the subject property for the construction of a connector route to the new Alex Fraser Bridge. The connector route was called Nordel Way and part of the taking was for an additional access road to Nordel Way called the 84th Avenue connector. The construction of Nordel Way and the 84th Avenue connector and other ancillary works by the Ministry is collectively termed the "Project". The date of taking was May 30, 1985. This date precedes the original enactment of the Expropriation Act, R.S.B.C. 1996, c. 125 ("the Act") in 1987. The land for the Project was taken from 11 of the total of 19 parcels of the subject property. The land was taken by Gazette Notices under the legislation preceding the Act.

[3] One of the claimants also owned three lots of ravine land that were separate from and to the east of the main body of development land. At the same time as the main taking the Ministry also took 1.32 hectares (3.27 acres) from two of these lots. The claim for compensation related to the ravine land is very small and will be dealt with separately below.

[4] The Ministry paid the claimants $1,018,936 on July 4, 1986 and $781,064 on April 21, 1988. The takings occurred prior to the Act coming into effect and no appraisals accompanied these payments. Some of this money was attributed by the Ministry to compensation for the land taken, some to injurious affection to the remainder, some to interest, and some to work done by the claimants on the property. However, since none of these issues has been settled, the board must decide how much should be awarded under each head of compensation. As a result we disregard the allocations that were made and treat both cheques as general advance payments.

[5] Prior to the taking, in June 1984, the claimants were consulted about possible options for the taking through the subject property. Mr. Elsom advised the Ministry of the route that he favoured and he was provided with detailed engineering plans. He met and corresponded with the Ministry on a number of occasions both before and after the taking about various details of the Project. Prior to the taking the claimants on their own initiative cleared and excavated the route of Nordel Way through the subject property. The material from the excavated route was used to construct berms in certain areas beside the right of way. It was hoped that these berms would mitigate the effect of the noise on the eventual subdivision development. The claimants have submitted a bill for the clearing and excavation work to the Ministry.

[6] In late August 1995 the Ministry took further land bordering Nordel Way to include the embankment created by the claimants at the time of the first taking. The narrow strips taken at this time went to the top of the embankments in certain areas and totalled approximately 0.6 hectares (1.4 acres). On October 11, 1995, the Ministry served the claimants with an appraisal report with respect to the second taking that stated that the 1.4 acres had no value. The Ministry also made an advance payment to the claimants of nil dollars on the same date for this second taking.

[7] The claimants commenced two applications to determine compensation. The first, 74/92, was to do with the first taking in 1985. The second, 48/96, was to do with the second taking in September 1995.

[8] The hearing occupied a total of 30 days including argument. There were over eighteen days of expert evidence including more than ten days of appraisal evidence and six days of engineering evidence. There were 130 exhibits, many of them voluminous. Since it was alleged that as a result of the Project, development was delayed for up to 20 years, there were many volumes of subdivision applications, minutes, reports and correspondence that had to be reviewed. Counsel for the claimants observed in his submissions: "The Board is left with the onerous task of reviewing a massive amount of evidence. Unfortunately, the task has not been simplified as it might have been by either of the appraisers [whose] task it was to assemble, analyze and provide opinions of value." Although the partial taking from such a large property raises a number of issues, we agree with the comments of this board in Casamiro Resource Corp v British Columbia (1993), 50 L.C.R. 99 (B.C.E.C.B.) at p. 105 "[b]y way of comment only the board is of the opinion that had [the claimants maintained] a better focus on the relevant issues and the compensation provisions of the Expropriation Act, more could have been achieved in substantially less time."

[9] Several of the claims for compensation changed during the hearing but counsel on behalf of the corporate claimants made the following claims during final argument:

(a)	Market value of the 11.27 acres taken in 1985 at $160,000/acre		$ 1,803,840
(b)	Injurious affection or disturbance damages:
	•	reduced lot yield for (87 lots x $40,000/lot) - $1,803,840	$ 1,676,150
	•	net increase in servicing costs as amended*
		with respect to site layouts and storm sewer	$ 110,000
		for extra items such as street lights on Nordel Way	$ 519,000
	•	noise	$ 1,257,600
	•	constructing overpass bridge /development cost charges	$ 1,400,000
	•	executive time	$ 500,000
	•	extra engineering costs	$ 220,000
(c)	Market value of the 3.2 acres of ravine lands taken in 1985		$ 15,000
(d)	Market value of the 1.4 acres taken in 1995		$ 411,000
(e)	Reduction in market value for sewer right of way		undetermined
(f)	Damages for delay		$5,500,000 to $69,000,000
(g)	Cost of holding the property		$ 622,095
Total		approximately $14,000,000 -$77,500,000
*as amended in argument with corrections as set out in the most recent amendment from the expert.

This claim was framed as a general claim on behalf of all the claimants with no allocation amongst particular claimants.

[10] Some of the above claims overlapped and some were made in the alternative. Not all of these claims were consistent with the opinions of the appraiser and the engineer who were called by the claimants. Claims for constructing the berms and miscellaneous expense invoices from the planner, surveyor etc. were adjourned at this time because it was hoped that these items could be agreed and in any event we did not have all of the evidence in relation to these claims. The claimants also sought an adjournment of the claim for any extra costs that might be imposed when development of the subject lands finally occurs as a result of the Corporation of Delta not approving the service connections under Nordel Way. While we do not wish to encourage a piecemeal approach to seeking compensation we adjourn these claims at this time.

[11] While counsel drafted the pleadings and provided an overall approach with respect to the evidence and argument, Mr. Elsom chose to represent himself as the owner of 15 lots in his personal capacity. He was provided with considerable latitude during the hearing. Counsel purported to represent the corporate claimants only. At the conclusion of the evidence Mr. Elsom made a somewhat different claim than counsel for the corporate claimants:

Mr. Elsom also provided interest calculations with respect to the dates of the advance payments. The issue of interest was adjourned by agreement. In the circumstances, we will not restrict Mr. Elsom's claim to what he put forward in argument and will assume counsel for the corporate claimants' submissions apply equally to Mr. Elsom's properties.

[12] The primary issues in this complex case, the specific details of which will be explained in the course of these reasons, were as follows:

Highest and Best Use
1.	What is the highest and best use of the property before and after the taking? (a) Should the subject property be valued as 19 separate lots or as a whole with one overall plan? (b) Should the subject property be valued on the basis of development for single family residential only or on the basis of mixed use, that is primarily single family residential but also including some multi-family and some commercial use?
*Market Value of the Subject Property Before* and After the Taking**
2.	What are the appropriate approaches to valuation of the impact of the taking on the market value of the subject property?
3.	With respect to the layouts for the subject property:
	(a)	should they include a park?
	(b)	should they include residential lots that are 60 feet wide or 66 feet wide?
	(c)	if they contain multi-family and commercial, how many acres of each should they contain?
	(d)	how many residential lots should they contain?
		• Should there be some allowance for Browning Drive in the before scenario?
		• Should a road exchange for the unopened 104th Avenue be assumed in the before scenario?
4.	How long should valuation of lots be deferred to provide for time to obtain approvals and what should the discount rate be?
5.	Should there be an adjustment for lot size?
6.	What type of adjustment should there be for easements? For size of the entire subject property?
7.	After the taking, is it appropriate that the layout incorporates a gas station commercial site at the intersection of Nordel Way and the 84th Avenue connector?
8.	After the taking, what type of adjustment should there be for noise? For servicing and other engineering works, including the overpass?
Market Value of other Takings
9.	What is the market value of the taking from the ravine property?
10.	What is the market value, if any, of the second taking from the subject property?
	• What is the effect of Nordel Way on market value?
	• What is the date of valuation for the second taking?
11.	What is the market value of the taking for the sewer easement from Lot 112?
Disturbance Damages
12.	Did the Project cause delay in the development of the subject property and, if so, to what damages are the claimants entitled?
13.	Are the claimants entitled to disturbance damages for extra engineering services incurred because of the Project?
14.	Is Mr. Elsom entitled to disturbance damages for the loss of executive time?

[13] We note that the subject property was valued as of the date of trial in a family law action that was heard in October and December 1984, some six months prior to the valuation date in this matter, May 30, 1985. See Elsom v. Elsom, [1985] W.D.F.L. 1578 (B.C.S.C.). The Court of Appeal allowed Mr. Elsom's appeal on the distribution of assets between the parties but dismissed his appeal on the valuation of the subject property. See (1987), 13 R.F.L. (3d) 231 (B.C.C.A.). The Supreme Court of Canada allowed Mrs. Elsom's appeal and restored the trial judge's division of property. See (1989), 20 R.F.L. (3d) 225 (S.C.C.). Locke J.'s valuation of the subject property was of the whole property, including the part that was proposed to be taken within the next year. Although some of the evidence from the appraisers in our hearing appeared to overlap with that of the appraisers in the family law trial, we received additional evidence that was not available to Locke J. In the circumstances, we do not regard Locke J.'s evaluation as binding on us but nonetheless we find some of the evidence reported in Locke J.'s decision of assistance.

[14] The property is located in North Delta. During the 1960's and 1970's Delta had grown faster than the Greater Vancouver Regional District as a whole. While the population continued to grow, the growth rate slowed down in the 1980's. This slowing of growth in Delta was attributed to four factors: less available land in Delta, land in Surrey being available, the transportation system being overloaded and the general slowdown in the economy. In 1985 the population of Delta was approximately 78,000 people, with North Delta being close to 45,000.

[15] North Delta was developed with primarily single-family homes (over 85% in 1985) at a density of 4 to 8 units per acre. There were smaller houses in the older 1960's subdivisions and larger houses in the more recent subdivisions. Immediately to the north of the subject property was the existing Sunbury neighbourhood while to the south was the Canterbury Heights subdivision. Almost 60% of the houses had been built between 1971 and 1981. There was commercial development along Scott Road three miles to the east of the property. The population was largely young families and participation in the work force was high.

[16] Prior to the taking, residents who needed to commute closer to the Vancouver area had two main options for crossing the Fraser River: the Pattullo Bridge just east of North Delta provided access to New Westminster, Burnaby and Port Coquitlam while the George Massey Tunnel to the west provided access to Richmond and Vancouver. However, to access the tunnel it was necessary to first drive south and west via Highway 10 to reach Highway 99. This Tunnel route to downtown Vancouver was overcrowded during rush hours by the early 1980's. In addition to these two routes, there was a third crossing by the Port Mann Bridge further to the east.

[17] A fourth crossing from North Delta via Annacis Island was projected for some years, at least from 1978. Access routes to what became the Alex Fraser Bridge and Highway 91 running south to Highway 10 remained uncertain in the early 1980's, but eventually in 1984 several accesses were approved. One of these accesses was what became Nordel Way and connected to 88th Avenue (and to 84th Avenue) through the subject property. There was evidence that supported an increase in absorption rates and lot prices following the completion of this new bridge link.

[18] Mr. Elsom bought the 19 parcels that make up the 147 acres of the subject property in the early 1950s. The parcels generally form a large triangle bounded by 108th Street on the east (which is not constructed throughout its length in the vicinity of the property), Dunlop Road on the north-west, the closed 82nd Avenue for much of the southern boundary and the Burlington Northern Railway for part of the western boundary. Before the taking this triangle was bisected by 84th Avenue running from 108th Street through to Dunlop Road. 84th Avenue was described by Mr. Blanchette, the appraiser for the claimants, as a "major traffic route" and "a truck route carrying high volumes of traffic" east and west through the subject property before the taking. Many of the individual parcels border either side of 84th Avenue. There were five parcels of land within the triangle that were owned by other owners than the claimants, including a 2.5 acre site on Dunlop Road owned by the Delta School Board. The engineer and planners included some of these parcels in the site layouts showing proposed development before and after the taking. This led to some difficulties in making comparisons, since the claimants included only three of these other-owned parcels while the respondent included all five. There were also problems with making comparisons for such items as the number of lots or the servicing costs, that had initially been calculated on the basis of different overall layouts with either three or five other properties, and the subject property, which was smaller than either of them.

[19] As indicated above the subject property was approximately 147 acres. However, the difficulties in reconciling the evidence began with establishing the size of the subject property, the size of the taking, and the size of the remainder. Mr. Buchan, the civil engineer retained by the claimants, reconciled three different survey plans and calculated the total area of the subject property as 146.971 acres. His areas were also used by Mr. Blanchette, the appraiser for the claimants, (at p 43 of his report, although at p 12 there is a typographical error leading to a greater total). Ms. Watson, the appraiser for the Ministry, reported areas by specified plan numbers and calculated the total area as 147.56 acres. The discrepancy is minor and we accept the rounded number of 147 acres. Mr. Kruger, the engineer for the Ministry, provided layouts based on plans originally obtained from Delta. His total size for the subject property is somewhat greater. Mr. Jorden, the planner for the respondent, used Mr. Kruger's size estimates.

[20] The property is relatively level bench land above an escarpment adjacent to the Fraser River to the north. Gravel was extracted from the centre of the site at one time and part of the old gravel pit is now a shallow man-made lake controlled by a drainage system. The property rises to the east with some views to the north and north-west.

[21] At the time of the taking there was a residence on the property, some storage sheds and some barns. There was also a small office building. Both appraisers valued the property for development as though vacant and unimproved, with the existing improvements contributing no value. The property was zoned "RS 3 single-family 5 acres" north of 84th Avenue and "I-3 Industrial extraction" south of 84th Avenue with a small area zoned RS 3 single-family in the south-west corner.

[22] The subject property was encumbered by four major rights of way at the time of taking. Again there are discrepancies in how these were described by Mr. Buchan, the engineer for the claimants and Ms. Watson, the appraiser for the respondent. (Mr. Blanchette, the appraiser for the claimants relied on Mr. Buchan's descriptions.) Neither party provided the source documents, but Ms. Watson described each right of way as it applied to each lot in considerably more detail than Mr. Buchan. In the circumstances we accept the following descriptions. The most prominent rights of way are those with overhead transmission lines. There is a British Columbia Electric Company (now B.C. Hydro) right of way that runs diagonally across two parcels in the north-east corner of the site with overhead transmission lines. This right of way occupies 1.63 hectares (4.03 acres) according to Ms. Watson. There is also an unused British Columbia Electric Company right of way that runs diagonally across four parcels in the north-east corner of the site and ties in to the first right of way. Ms. Watson states that this right of way occupies 2.0 hectares (4.94 acres) and that it was cancelled in 1988, after the date of valuation. Running parallel to 108th Street near the eastern boundary is a BC Hydro right of way for overhead transmission lines and two high-pressure gas pipelines. This right of way intersects with the second right of way in the vicinity of 84th Avenue. Ms. Watson says that 2.6 hectares (6.45 acres) are double encumbered with both transmission lines and gas pipelines. One of the high-pressure gas pipelines turns at the southern boundary of the subject property and extends west along the southern boundary. It crosses 10 parcels and occupies a further 0.6 hectares (1.43 acres) outside the area of the easement for electrical transmission lines. There is also a closed road allowance along the southern boundary of the property that was vested in Mr. Elsom and Delsom Estates subject to a right of way to BC Hydro for constructing and maintaining a gas pipeline and another right of way to Delta for the existing water mains, drainage sump and drainage ditch. The closed road added 33 feet along the southern boundary but resulted in a 50-foot wide right of way. According to Ms. Watson the vesting of the road allowance subject to the two rights of way was ordered by the British Columbia Court of Appeal in November 1983 but the rights of way were not formally registered until after the taking. She reports that these rights of way occupy 1.97 acres.

[23] Each of the rights of way had their own contract provisions, but essentially no buildings could be constructed on the rights of way and there was an ongoing right of access to the right of way. Shrubs or trees that would interfere with the overhead electrical lines could not be planted. The high-pressure gas pipelines did not permit sheds, playhouses, decks, patios, or even roof overhangs and there were additional specifications for roads and utilities that needed to cross these pipelines. [24] In addition to these rights of way there were three rights of way for other services. One of these was a right of way to the Greater Vancouver Regional District ("GVRD") for the trunk watermain along the western boundary of Lot 112 and inside the two British Columbia Electric Company rights of way described above. There was a second right of way to Greater Vancouver Sewerage & Drainage District ("GVS&DD") for a trunk sanitary sewer along the south-west boundary of Lots 112 and 666. Finally, there was a storm and sanitary sewer right of way to Delta on Lot 666.

[25] We were provided with evidence as to the economic climate in the period leading up to the date of valuation. The real estate market had peaked in early 1981 and then suffered a significant decline of over 30% in terms of the average price of residential housing through the remainder of 1981 and 1982. Average house prices in North Delta then stayed more or less constant at this new lower level during 1983, 1984, and 1985. With these lower prices, the number of sales in North Delta showed a marked increase in 1982, followed by more modest increases in 1983 and 1985, and a small decrease in 1984. The number of building permits for all residential housing in North Delta fell from 1980 through until 1985 when there was some limited recovery. More generally, 1984 was one of the lowest years for housing starts in the previous 20 years. In early 1985, both the number of house sales and the sale prices were down throughout the Vancouver area, although there was some increase in the number of sales by April. In March 1985, only 10% of builders reported that they were building on a speculative basis.

[26] In early 1985 British Columbia had a low rate of economic growth. The unemployment rate in Vancouver in January 1985 was 13.9%, up from 12.9% a year earlier in January 1984. This compared with a British Columbia rate of 15% and a national rate of 10.8%. The unemployment rate in Vancouver rose each month from January through April 1985 when it stood at 15%. Forecasters in May 1985 predicted that the unemployment rate in British Columbia would remain at 15% for the rest of the year. Net migration to the province remained low. In February 1985 the number of bankruptcies in British Columbia was greater than in early 1984.

[27] The Bank of Canada bank rate varied between 9.7% and 11.18% during the first four months of 1985. During early April the rate fell to 9.75% as of April 18, 1985, following which it rose slightly for the next two weeks. One year mortgage rates varied between 11.25% and 12% falling to 10.5% on April 20, 1985. The Canadian dollar fell from $0.75 to $0.71 during the first two months of 1985, rising in March, and falling again to almost $0.73 in May. Although a number of indicators remained low, there was optimism that the economy might improve somewhat.

[28] These economic factors had an impact on market valuation and the claim for damages for delay.

[29] Mr. Elsom developed a number of other properties in North Delta beginning in 1954. In more recent years he subdivided the lots and installed the services and sold the individual subdivided and serviced lots to one of a selected group of builders. Prior to any development on the subject property Mr. Elsom and his companies developed a subdivision known as Royal York. This was a 100 acre subdivision a few kilometres to the south of the subject property that was developed in phases beginning in 1968. We heard evidence from Eric Trygg, a realtor, who had worked with Mr. Elsom on a number of subdivisions. We were provided with statements of adjustments and portions of the interim agreements for the lot sales in the Royal York subdivision beginning in 1982. These interim agreements with builders stated as one of the terms that transfer of title to the purchaser will occur only when the purchaser has performed all the terms and conditions of the contract and went on to provide there were further terms and conditions on an Addendum A. However, we were not provided with Addendum A. Mr. Trygg testified that Mr. Elsom did not pay any commission on the sale of the lots, and Mr. Trygg obtained his commission on the eventual sale of the lot with the residence on it by the builder. We also heard that Mr. Elsom maintained control over the subdivision by inserting a term in the interim agreement (presumably in the Addendum A) whereby he had to approve the design of any house that was built. Many of these intermediary sales of lots to builders (before the sale of the lot with a residence to the ultimate purchaser) were not registered in the Land Title Office.

[30] By January 1980 there were 66 unsold lots remaining in Royal York. The decline in the real estate market in mid-1981 meant that no lots at all sold between August 1981 and May 1982. Thereafter, the sales in each of 1982, 1983 and 1984 were only between six and eight lots per year. The final eight lots were sold in 1985, with the last two not selling until December 1985.

[32] We heard evidence about the land use planning documents primarily from Michael Jorden, the planner for the Ministry, and Mr. Dhillon, the planner retained by the claimants. This evidence was relevant to the decision on highest and best use and the delay claim. On May 30, 1985, Delta had a draft Official Community Plan ("OCP") 1978/1979 that governed its planning decisions. Delta was also working on the 1986 OCP and issued a draft form for public feedback in May 1985. At the same time it was working on a North Delta Area Plan. The 1978-79 draft OCP showed primarily single-family residential on the subject property together with 15 acres of multi-family residential and a new neighbourhood shopping centre in the area of the existing gravel pit. There was also provision for both a new neighbourhood park and a new school site on Dunlop Road, although the latter was not on the subject property as the School Board already owned a 2.5 acre site on Dunlop Road.

[33] The new 1986 OCP was adopted in March 1986. The first draft of the OCP was mailed out to the public in 1985 prior to the taking. The draft OCP received first and second reading in September 1985, and third reading in January 1986, before it was finally passed in March 1986. The new OCP contemplated a range of housing types to provide for a variety of lifestyles. The first draft of the 1986 OCP issued before the taking showed a significant amount of medium density residential housing along 84th Avenue, including the subject property. However, as a result of neighbourhood opposition the amount of medium density multiple-family housing was scaled back considerably in the final OCP. Nonetheless there was still some medium density multi-family residential housing located on the subject. The May 1985 draft OCP identified a new neighbourhood commercial site at the intersection of Nordel Way and the 84th Avenue connector, and while this too was modified in the final plan, neighbourhood commercial remained a designated use in this vicinity. Both the draft and final OCP showed a community park in the middle of the subject property south of 84th Avenue centred on the existing lake. More generally, the OCP identified a desire for the development of pedestrian and bicycle trail systems. The 2.5 acre school site on Dunlop Road was one of three sites considered surplus and therefore available for sale.

[34] The preliminary draft of the North Delta Area Plan was issued in early 1986. There were several drafts including ones in 1987, 1988, and 1993, culminating in the final North Delta Area Plan that was passed and approved in 1995. The first draft in 1986 showed high density housing on the subject property at 75 units per hectare or 30 units per acre, centred on the existing lake. There was also a gas station site identified on the subject at the intersection of Nordel Way and the 84th Avenue connector. Later drafts in 1987 and 1988 continued to show primarily high density multi-family together with some commercial and institutional use centred on the lake. There was a stated need to provide a range of affordable housing and smaller units for retirees. The 1993 draft of the North Delta Area Plan emphasized the importance of a comprehensive development plan for the subject property in order to plan road connections, circulation on the subject and the provision of parks. A variety of housing densities continued to be suggested. The North Delta Area Plan was finally adopted in 1995; it showed multi-family on most of the subject property with single family residential only along the eastern and southern perimeters.

[35] The parks and recreation master plan in 1989 contained two goals affecting the subject property. One of these was the development of a pedestrian and bicycle trail system through the subject property along the B. C. Hydro right of way. The second was the acquisition of 9.7 acres of the subject property for new playing fields, next to the school property site, opposite the existing Sunbury Park on Dunlop Road.

[36] Mr. Elsom described his development work on the subject property and commented on the many documents that related to this issue. Dr. Robert Collier, Municipal Administrator for Delta from 1983 to 1995, was also called as a witness and provided evidence with respect to the circumstances surrounding the claimants' efforts to develop the subject property. In 1978 the claimants made an application for rezoning the whole subject property with a comprehensive development plan prepared by Hanson-Erb. This plan was a complex one with 415 single family lots around the perimeter, and a 35 to 40 acre "village centre" that included a number of uses such as commercial, public service, offices and multi-family, all centred on a lake. A report from the Delta Planning Department dated August 16, 1979, recommended refusal on two grounds: the application was premature because the proposed third river crossing raised a number of unknowns and the application did not reflect land uses in the Draft Delta Community Plan. On November 10, 1980 and again on March 1, 1982 Delta Council refused the application on the grounds that the reasons for refusal had not changed and the application was still premature. On November 4, 1982 the claimants requested that this application be cancelled.

[37] On April 7, 1983 the claimants made an application for rezoning and subdivision of a 10 acre portion of the subject property into 63 approximately 50-foot single family lots. In September, 1983 this Phase 1 subdivision received first and second reading and following a public hearing received third reading on October 3, 1983. There was an amendment at third reading to fewer larger lots (48 60-foot lots). In a letter to the claimants later the same month, Delta confirmed that it was looking for a park on the subject property immediately to the west of the proposed subdivision. Under the Municipal Act it wanted a 5% dedication at the south-west end of the subdivision that would be added to the proposed park. Mr. Elsom offered land at some distance from the subject property as an alternative. There was evidence that Delta continued to want a 10 acre park space on the subject property and did not accept these alternatives as a substitute for the subject property.

[38] On February 24, 1984 Delta advised the claimants that there would be a postponement of the application pending finalization of the access routes for the Annacis bridge. We heard evidence that Delta had been slow to decide on access routes because the residents of North Delta were opposed to negative impacts on their property from increased traffic. On March 6, 1985 the claimants asked that the application proceed since the routes for the Annacis bridge were now established. The taking occurred in May 1985 and in October 1985 the claimants confirmed that there were still some outstanding issues, one of which the claimants had just fulfilled. Another issue that remained was the 5% park requirement. Delta eventually decided to obtain the desired 10 acre park site in the next stage of development and recommended approval. At a Delta meeting Mr. Elsom stated that he was totally opposed to Delta's options for the park to the south-west of the subdivision application. In any event fourth reading and approval were finally given in November 1985 for what became known as the Doncaster subdivision.

[39] As indicated above, the claimants were provided with the detailed plans for Nordel Way prior to the actual taking and there was considerable discussion between the claimants and the respondent about various details of the Project that potentially affected the development of the subject lands. Some eight months prior to the taking, without consulting the Ministry, Mr. Elsom cut a trench up to 20 feet deep and 80 to 100 feet wide along the proposed right of way. He used the material from the cut to build up the embankment in certain areas. The embankments and berms were created by the claimants in order to mitigate the effect of noise on the future subdivisions that would border Nordel Way. Unfortunately, they were created outside the proposed rights of way.

[40] We heard testimony from Bruce McKeown who as Special Project Engineer was the person in the Ministry who had overall responsibility for the Project. In May 1985, the initial taking for Nordel Way and the associated access road, the 84th Avenue connector, took portions from 11 of the 19 parcels. This taking was reported to be 11.273 acres by the claimants, and 4.64 hectares (11.46 acres) by the respondent. Mr. Buchan, the engineer for the claimants, calculated the total size of the 1985 taking from his reconciliation of the plans. Ms. Watson, the appraiser for the respondent, based her size estimate on plans prepared by G.A. Hol, the land surveyor who did the survey for the taking that was registered in the Land Title Office. We accept 4.64 hectares (11.46 acres) as the size of the taking. The taking for Nordel Way runs parallel to Dunlop Road for most of its length, approximately 120 to 130 metres (400 feet) south of Dunlop Road. The taking for the 84th Avenue connector runs from 84th Avenue at approximately the mid-point of the east side of the property diagonally north-west across three parcels to Nordel Way.

[41] As a result of discussions between Mr. Elsom, his engineer Mr. Buchan, and the Ministry, the Ministry installed five pre-serviced sleeves or ducts under the highway for sanitary sewers, water, gas, hydro, telephone and cable, with manhole covers at either end for connection to subsequent development. The Ministry also installed a trunk storm sewer in Nordel Way with several connections on either side so that developments could hook into this trunk sewer in due course. This was again done in accordance with the claimants' specifications.

[42] In May 1986, before Nordel Way was opened, Mr. Elsom demanded that the embankments that were on his property should be taken by the Ministry. He did not want to maintain the embankments and he wanted the boundary to be at the top of the embankments. There were ongoing discussions between the claimants, the Ministry and Delta about the embankments but it was not until August 1995 that the Ministry effected a second taking of the narrow strips bordering a portion of Nordel Way and the 84th Avenue Connector to include the embankments. This taking was reported to be to the top of the cuts and gave legal ownership of the sloped embankment to the public. Mr. Buchan for the claimants estimated the taking at 0.58 hectares (1.436) acres and Ms. Watson reported it at 0.55 hectares (1.36 acres).

[43] After final approval for the Doncaster Phase 1 subdivision in November 1985, the first of the 48 lots in this subdivision were sold in May 1986. It took two years for the rest of the lots to sell with the final lots selling in April 1988.

[44] A second subdivision application, this time for 73 50-foot lots, was made for the 12 acre site adjacent to the Doncaster subdivision on April 23, 1986. On September 8, 1986 Delta gave first and second reading to this Phase 2 application and the application was amended to 63 60-foot lots. The application was held up for some time as a result of Delta's desire for an agreement on park dedication and a road network on the subject lands. Finally Delta agreed to take 5% of the land value instead and fourth reading and final approval of what became known as the Harrogate subdivision occurred on October 19, 1987. These lots sold from May 1988 through October 1989. The Harrogate subdivision contained some land that did not belong to the claimants. The claimants said that 57 lots were on the subject property, the respondent 55. We find 56 lots on the subject property.

[45] Delta requested an overall comprehensive plan for the property in part to address the issues of park dedication and traffic flow on the proposed road network. The claimants submitted two relatively general plans for the remainder of the subject property for comment by Delta staff: the Ducote plan in March 1987 and the Dhillon plan in February 1989. Both of these plans, like the earlier Hanson-Erb plan, showed a high density residential area centred on the lake, although the earlier Ducote plan also included office and commercial uses in this central section. No other park than the lake was identified. To the south of this central area both plans showed an overpass in the vicinity of Centre Street and a new access road to the overpass along 82nd Avenue. The corner of Nordel Way and the 84th Avenue connector was identified for service commercial for the proposed gas station and other commercial use such as a motel. Around the perimeter both plans showed single family residential housing. Neither of these plans was submitted to Delta in a formal application.

[46] In 1988 the claimants applied to Delta for a building permit and a temporary use permit for part of the subject property for a school site. In part to provide an education facility for his son, Mr. Elsom wished to establish a private school called Marlborough College on his property. Delta's resolution refusing this application until a park site on the subject lands was resolved was declared to be ultra vires by an order of the Supreme Court in September 1988. Delta reconsidered the application for a temporary use permit and objected to its design deficiencies since the proposed school was situated primarily in modular buildings. The documentation indicates that a relatively small school was proposed and while a future potential of up to 500 students was discussed, the application was eventually revised downwards for accommodation of only 100 students. The property was to be leased to Marlborough College by the claimants. First reading did not occur until April 8, 1991. It is unclear when the application received final approval. Notwithstanding the lack of approvals, we understand that the school commenced operation in September 1988, across the road from the proposed site in another part of the subject property.

[47] In January, 1989, the claimants cooperated with Chevron in applying for rezoning for a gas station and other commercial premises at the corner of Nordel Way and the 84th Avenue connector. Access was right in and right out and was located to meet the Ministry's requirements. This application was eventually defeated by Delta council in April 1991 at third reading because of public concern about potential nuisance factors such as lights and litter, as well as such factors as children's safety.

[48] In 1989 and 1990 the claimants made a total of five applications for single family residential subdivisions around the perimeter of the property. The evidence showed that Delta refused to process these applications until it had received a comprehensive plan with sufficient detail, together with a traffic analysis in conjunction with the plan. (In Delta's opinion, neither the Ducote plan nor the Dhillon plan provided adequate detail.) The park remained an issue and Delta stated that it wanted a nine acre site on Dunlop Road across from the existing Sunbury Park in order to increase its playing fields. Both Delta and BC Gas indicated that they wanted greater setbacks for those lots situated on the high-pressure gas pipe line that extended along two sides of the subject property. Mr. Elsom's response to most of these requests was that he did not agree with them.

[49] In 1991 the claimants sold Lot 112 which was an isolated lot in the south-west corner of the subject property to Whistler Mountain Investments Ltd., a company in which Tom Goode Sr., a former mayor of Delta, was principal. We were not provided with any documentation relating to the sale or the development of this property. We understand that a 30 lot subdivision with less than 60-foot lot widths was approved and built. Mr. Kruger, the engineer for the respondent, had worked on this subdivision and told us that some acoustic fencing was required by Delta for about half the boundary with Nordel Way.

[50] In 1996 the claimants sold Lot 666 that was one of the lots on the south-west perimeter of the subject property to Tom Goode Jr. operating as Wiltshire Developments. We were not provided with any documentation relating to the sale but were informed that the sale price originally negotiated in 1995 was $800,000 for 4.59 acres. A bonus of $50,000 was paid later to extend the closing until September 1996. We understand that the sale was subject to development approval. The original application for development was for 19 strata lots plus 1 fee simple lot, with 25% park. Strata lot development allowed the road to be narrower than if it was a city street with fee simple lots. This application was rejected by Delta at third reading on March 12, 1996 because of public opposition to the proposed density. The application was amended to 16 strata lots with an average area of 7,000 square feet. This amended application had a reduction in the amount of park, although it was still 20%, with 18% in open space. In May 1996, a Delta report recommended that this new application be further revised because the parks department did not support the reduced width of a trail corridor compared with the initial application. We are not certain as to the details of the development that was eventually successful in being approved in November 1996.

[51] In summary, most of the subject property remained undeveloped at the date of the hearing in 2001. There were two subdivisions for a total of 111 lots approved in 1985 and 1987. In 1988 the Marlborough School started operating and it eventually occupied two acres of the subject property, primarily in temporary modular buildings. With respect to the five subdivision applications for single family residential housing, Mr. Elsom continued to press for some resolution between 1989 and 1992 after which we have no evidence that he did anything. Lot 112 was sold in 1991, with the eventual development of 30 lots by the new owner, and lot 666 was sold in 1996, with the development of 16 strata lots, again by the new owner. No other part of the subject property was developed in the 15 years since the 1985 taking.

[52] During the hearing we were provided with a comprehensive plan for the subject property that has been submitted to Delta as part of an application for rezoning in 2001. We do not know if any part of this plan was ever approved. It showed single-family residential lots on most of the remaining subject. It also showed the existing Marlborough College school site north of 84th Avenue as well as the proposed service station commercial site on the corner of Nordel Way and the 84th Avenue Connector. A park was shown on the subject between the school board property and Nordel Way; we note that this site had problems with access after the taking in any event. While 360 of the proposed lots were 60 feet wide there were also 26 50-feet wide lots on an area to be developed north of Nordel Way, next to the school board site.

[53] C.D. Blanchette of Collingwood and Associates provided appraisal evidence for the claimants. John Buchan of Hub Engineering and Development Company Inc. was the engineering expert, who provided layouts and servicing estimates for the claimants. In addition to assisting the claimants with respect to their claim for compensation, Mr. Buchan has provided services to the claimants for actual subdivision applications on the subject property from time to time since 1984. He continued in that role at the date of hearing although there had been little work for a period of years as development activity had ceased. Planning advice was provided by Jag Dhillon, a former Deputy Director of Planning for the Municipality of Delta. He left Delta's employment in February 1988 and worked for the claimants for a brief period with respect to an overall plan for submission to Delta and some subdivision applications.

[54] Mr. Dhillon prepared a report as to the development potential of the subject property as of May 30, 1985. He reviewed the 1978 Overall Development Plan and the draft Delta Community Plan. He stated that, in his opinion, before the taking, the subject property had the potential for development as a single-family residential subdivision with the possibility of some multi-family use and an automobile service station use with neighbourhood commercial on the western side of the property, near the corner of Dunlop and 84th Avenue. While Mr. Dhillon emphasized a number of negative impacts of the taking on the subject property, the type of development potential remained similar: 400 single-family residential lots, 150 to 200 townhouse or apartment dwelling units and a neighbourhood shopping centre with a service station on a central site. In the alternative, the subject property could be developed as a conventional single-family residential subdivision. The layouts attached to Mr. Dhillon's report, both before and after the taking, were prepared by Mr. Buchan and showed only single-family residential. After the taking there were two options: one showed no overpass and one showed an overpass over Nordel Way linking an extension of 82nd Street and Centre Street.

[55] In Mr. Blanchette's opinion the most likely highest and best use of the property was development for single-family residential. He stated that there was a significant potential for multi-family and some, less certain, possibility for commercial development. However, again the only layouts that were provided to him were Mr. Buchan's layouts for single-family residential development, both before and after the taking. As a result he valued the property as single-family residential both before and after the taking.

[56] The evidence in this matter was lengthy and heard over the course of more than a year. Several months after all testimony from Mr. Blanchette had been completed, but before the remainder of the evidence had finished, the claimants repudiated Mr. Blanchette's evidence on a number of points. Although the claimant Mr. Elsom was not qualified as an expert, the board permitted him to testify in rebuttal as to his opinion of the highest and best use, and market value of the subject property in 1985, based on his experience as a developer.

[57] It was Mr. Elsom's opinion at this hearing that the highest and best use was single-family residential. He disputed that there was a demand for multi-family development in Delta in May 1985 and suggested that the neighbours would be opposed to this type of development in any event. Neither did he think that there was scope for commercial; in 1985 there was extensive commercial development along Scott Road and after the taking the application for a Chevron site at the corner of Nordel Way and 84th Avenue had been turned down because of objections from near-by residents. In rebuttal, he provided evidence about the subdivision of a large number of small 5 acre sites in different areas of Surrey between 1985 and 1988. Counsel for the claimants pointed out in argument that the 19 lots that made up the subject property all existed as independent legal lots and could have been sold and developed independently similarly to the 5 acre sites that were subdivided in Surrey.

[58] The Ministry relied on Candace C. Watson of Watson Clee and Associates for appraisal evidence. William Kruger of CitiWest Consulting Ltd. provided layouts and engineering servicing estimates. Michael Jorden of Davidson, Yuen, Simpson provided planning advice. There was evidence that layout options for the site were developed after discussions and consultation between the planner, the engineer, and the appraiser.

[59] Mr. Jorden reviewed the Delta land use plans and associated studies. These plans supported primarily single-family with a commercial centre and some medium density multi-family housing. His opinion of the reasonable and probable use of the subject property was all single-family or predominantly single-family with some townhouse and neighbourhood commercial. He stated that the property was big enough to shield the proposed multi-family in the centre of the property from anticipated opposition to the increased density from the existing single-family neighbourhood that surrounded the subject property.

[60] Mr. Jorden prepared six optional plans for development of the subject property: two before the taking and four after. Mr. Kruger prepared conceptual engineering layouts based on these six plans. All of the options centred on a lake that was near the existing man-made lake on the site of the former gravel pit. The main comparison was between a layout for single-family residential development only and a layout that provided for some town house units (83 units on approximately 8 acres) and some commercial use (approximately 1.4 acres) as well as single-family development. The single-family lots had 66-foot frontages and were approximately 6,600 square feet. There were options before and after the taking with single-family development only and options before and after the taking showing mixed use development. In addition, there were two more options after the taking with an overpass over Nordel Way, one for single-family and one for mixed use development. After consideration of the history of this issue from specified correspondence and interviews, Mr. Jorden concluded that there was a significant chance that an overpass would not be required. As a result the options containing an overpass were eliminated.

[61] Ms. Watson analysed the two options prepared by Mr. Jorden for before the taking to see whether single-family development or mixed use provided the higher value. She used the Subdivision Residual Approach on each of these two options to see which layout produced the greater profitability. She concluded that the highest and best use for the property was the mixed use development; predominantly single-family residential with some multi-family and some commercial. There were some differences between the before and after layouts. The location of the multi-family units shifted after the taking so that there were approximately four acres on the subject property prior to the taking and over five acres after the taking. Before the taking the commercial use was neighbourhood commercial at 84th Avenue and Dunlop while after the taking it was a gas station site at the south-east corner of Nordel Way and 84th Avenue.

[62] Both appraisers agreed that development after rezoning was the highest and best use and that the primary focus of the development would be single-family residential. The main issue is whether some commercial and townhouse use would be part of the development. In addition, the claimants in rebuttal, suggested that the property should have been valued as development property consisting of 19 separate legal parcels rather than as a common property.

Thus under the Act we must value the property on the basis of what a hypothetical purchaser and seller would agree was the market value on the valuation date.

[65] We agree with the comments of this board in Horsley v. British Columbia (Minister of Transportation and Highways) (2000), 70 L.C.R. 52 at para 42 that "[w]hile an appraiser may be assisted by the analysis of a planner or land use consultant, in the board's opinion, it is the responsibility of appraisers to determine the highest and best use on which to base their valuation." Planners generally provide evidence on what are the probable uses given the applicable land use plans; on the other hand it is appraisers who consider such factors as market demand and potential profit.

[66] With respect to Mr. Elsom's evidence about the highest and best use, we have two comments. First, the highest and best use (and market value) is being determined in the context of a hypothetical purchaser buying the subject property from a hypothetical seller. An owner's plans for the property, even where he is an experienced developer, are not necessarily determinative. Second, the highest and best use of the subject property (and its market value) are matters of opinion evidence. Mr. Elsom was never qualified as an expert to give opinion evidence. In earlier proceedings in this matter at (1996), 58 L.C.R. 290 a different panel of this board refused to qualify Mr. Elsom as an expert to give opinion evidence on highest and best use and market value. An application that this board decision showed a reasonable apprehension of bias by members of the board was dismissed by Mr. Justice Macdonald. See (1999), 66 L.C.R. 193 (B.C.S.C.). While we recognize Mr. Elsom's considerable knowledge and experience in land development issues, he is a party in these proceedings and accordingly is not a disinterested observer. Although he testified at the hearing that single family residential was the highest and best use, there were documents in evidence that Mr. Elsom had submitted plans to Delta with extensive multi-family units in the centre of the subject property in 1979, in 1987, in 1989, and as late as 1992. (The final plan submitted to Delta mid way through the hearing in 2001 did not have multi-family but we do not know if this application was ever approved or amended.) The 1987 and 1989 plans also contemplated extensive commercial on the subject. We also note that his evidence about the market value of the subject property in these proceedings differed substantially from the evidence that he gave at the family trial in October and December 1984, just five months prior to the valuation date in this claim. As a result we have not given any weight to his opinions on highest and best use and market value. Evidence from Mr. Elsom about factual matters as distinct from his opinions has been considered where relevant.

[67] The initial issue to be decided is the claimants' assertion that the highest and best use of the subject property is to be determined as 19 separate lots, rather than collectively as an overall development. As indicated above, we must value the land as to what a hypothetical purchaser and seller would agree as a sale price in an open market, assuming the highest and best use. The engineers retained by both sides only considered development of the subject property as a whole with an overall plan that assumed coordinated services and phased development. Both the claimants' and the respondent's appraisers valued the subject property on the same basis. The only reference to individual parcels was in the report of Mr. Kruger, the engineer for the respondent, which stated that separate ownership of parcels generally results in the properties developing one at a time depending on the topography and the location of existing services. Maximum efficiency of services and lot yield requires common ownership or co-operation amongst the various owners. A prudent developer assembles as many parcels as is financially feasible in order to maintain control over utilities and road access.

[68] It was not until Ms. Watson, the appraiser for the Ministry, was cross-examined near the end of the hearing that the possibility of valuing the property as 19 separate lots was first raised. In our opinion, the last minute position on valuing the property as 19 separate legal lots was an attempt by the claimants to minimize the effect of time when some of the development and cash flow from the sale of over 500 lots on the subject property is deferred. Ms. Watson understood that there were persuasive engineering reasons for a single layout with coordinated services starting at one point and was unable to comment on the engineering problems associated with developing the 19 lots separately. The question of providing services for the development of separate lots was not put to either engineer despite the fact that the claimants recalled their engineer, Mr. Buchan, to provide rebuttal evidence. Ms. Watson indicated that different parcels of the subject property had different ripeness for development, depending in part on proximity to services, and that in any event there was also a limitation on how many parcels might be developed simultaneously as a result of absorption rates.

[69] A quote from p 105 of Basics of Real Estate Appraising, 4th ed., 1995 The Appraisal Institute of Canada was put to Ms. Watson:

Ms. Watson refused to agree that an individual analysis of each lot that formed part of the subject property needed to be done. We are of the view that the 19 separate legal titles provide the hypothetical vendor with some flexibility and that both appraisers might have mentioned this. However, it appears to us that this passage does not contemplate a situation where 19 separate but contiguous legal lots under common ownership are already part of a major land assembly.

[70] In the family law decision where the subject property was valued, Mr. Justice Locke comments on how Mr. Williamson, the appraiser for Mr. Elsom, stated that the valuation of the 19 separate legal lots would be higher than the valuation of the 147 acre parcel taken as a whole. However, when Mr. Williamson derived valuations for both approaches they were similar and did not support his statement. Mr. Justice Locke went on to observe at pp 25-26 of the decision that he had the opposite expectation: he assumed that an overall plan for the subject would be the most profitable and the necessary coordination with other contiguous landholders over the overall plan might force down the values of individual parcels.

[71] It is true that many of the 19 lots before the taking had access and were adjacent to at least some services from 84th Avenue or one of the existing roads that bordered the subject property. (However, we note that 84th Avenue did not have sanitary sewers or storm sewers and, although there was a water main, Delta wanted it enlarged). At least theoretically, one or more of these 19 lots might have been developed independently. In fact, two lots, Lot 112 and Lot 666, in the south-west corner of the subject lands were sold separately to other developers in 1991 and 1996. In addition, the applications for the first two subdivisions on the subject property in 1986 and 1987, Doncaster and Harrogate, were independent applications for development in each case of the northern portions of three or four legal lots that had been isolated by the taking. However, we must value all 19 lots on May 30, 1985 and we accept that not all of these lots were imminently ready for development on that date. Some were closer to services and would be more valuable than others. Some were heavily encumbered with easements and would be less valuable if not sold with adjoining lots that allowed more flexibility for development. We also agree that a prudent purchaser would recognize that buying one or two of 19 contiguous legal lots for subdivision development when they were all being sold at the same time offered different prospects for absorption than if only one or two of the legal lots were being sold. As a result, we reject the claimants' position that valuing the property as 19 separate legal lots would completely eliminate the need for phasing and the effect of time on the valuation of a 147 acre parcel. In any event, as indicated above, all of the expert evidence was based on valuing the subject property as a whole with one overall plan.

[72] In summary, we accept both appraisers' opinions and conclude that the highest and best use of the subject property in May 1985 was the development of these 19 legal lots as a whole.

[73] The other issue is whether the highest and best use is development as single-family only or as mixed use with some multi-family and commercial. While we agree with the claimants that it might be easier to value the property on the basis of single-family residential only, under the Act we are required to value the property on its market value to a hypothetical purchaser. The market value must be determined on the basis of the highest and best use, which is dependent on the most probable use with the highest net return. Mr. Elsom's stated intentions for the property are not determinative as it is an objective test applied to the hypothetical purchaser. The fact that settlement negotiations in 1985 and 1986 were based on valuing the property as single-family residential is irrelevant. Since the settlement negotiations were unsuccessful, we must value the subject property as set out in the Act.

[74] As described above the draft OCP dating from 1978-79 as well as the 1985 draft showed some commercial development and some multi-family residential development on the subject. Both Mr. Dhillon and Mr. Blanchette, the planner and appraiser for the claimants, stated that there was potential for both multi-family and commercial at the relevant time. Despite Mr. Elsom's testimony at the hearing that only single family residential housing made sense, the overall plans for the entire property submitted by Mr. Elsom in 1978 (Hanson-Erb plan), in March 1987 (Ducote plan), and in February 1989 (Dhillon's plan) all provided for substantial multi-family and commercial. As late as 1992, there was evidence that the claimants intended to develop the centre of the subject property with stacked townhouses or apartment buildings. We note that the present application to Delta in 2001 leaves a "white area" location on Nordel Way to the east of the 84th Avenue connector where the Chevron gas station application had been made. This white area shows no single-family lots and Mr. Elsom agreed that it was being left for future possibilities such as a hotel or townhouses or a church. Although May 31, 1985 is the valuation date this evidence shows that the claimants have continued to make submissions from 1978 through to 2001 that showed development on some portions of the subject property that was more lucrative than single-family housing.

[75] Mr. Jorden, the planner for the Ministry, testified that on the basis of the Delta plans he included some townhouses and 1.4 acres of neighbourhood commercial. The townhouses were low density at 10 units/acre and the total number of 83 units (44 on the subject property) was approximately half that in Mr. Dhillon's report. Mr. Jorden stated that Mr. Cowie, the Planning Consultant for Delta at the time of the taking, strongly favoured more multi-family housing and more innovative housing. In cross-examination Mr. Jorden agreed that there were relatively few townhouses in Delta in 1985 but he also discussed some successful projects in other municipalities. It was his opinion that the sale of the townhouse site would be postponed to a later phase of the project. He also conceded that the site might be discounted because of slow markets. With respect to commercial, while there was some risk to obtaining zoning approval, there was a reasonable basis for considering a small site of neighbourhood commercial before the taking. After the taking, there was greater potential for commercial in a new location on Nordel Way that took advantage of the increased traffic on the new highway. Again there was a risk associated with obtaining zoning approval, as well as problems with limited access. However, we note that Chevron was interested in the site almost as soon as Nordel Way opened in 1986.

[76] We recognize that in the absence of an approved plan there is some uncertainty with respect to multi-family and commercial use. However, having reviewed the evidence that would be available to a prudent purchaser in 1985, we agree that in addition to the primary use of single-family residential, 8 acres of low density townhouses and 1.4 acres of commercial proposed by Mr. Jorden were reasonable and probable uses for the subject property.

[77] This leaves the issue of which probable uses drive the highest market value. In this case while Mr. Blanchette acknowledged that some multi-family and commercial were feasible he did not independently consider the market return on any other development but single-family residential. He chose to rely on the layouts already prepared by Mr. Buchan, the engineer for the claimants, that contained only single-family lots. On the other hand Ms. Watson, the appraiser for the respondent, decided between single-family residential development only and mixed-use development with 8 acres of low-density townhouses and 1.4 acres of commercial, by analyzing both developments using the Subdivision Residual Approach to see which produced the greater market return. In addition, her valuation of single family, multi-family and commercial comparables in the Direct Comparison Approach clearly yielded higher values for the multi-family and commercial sites. Counsel for the corporate claimants' submission that there was no evidence to support a higher value for multi-family use was clearly mistaken. We accept Ms. Watson's opinion that the highest and best use is mixed use development that is primarily single-family residential.

[78] In order to value the approximately 11 acres taken in 1985, Mr. Blanchette used the Direct Comparison Approach to determine the market value of the subject property in both the before and after situation. This method values the subject property by comparison to properties that are similar in size, location and development potential and that have sold at approximately the same time as the date of valuation. It was the only method that Mr. Blanchette employed. Using eight comparables Mr. Blanchette estimated the value of a raw lot, without servicing. On the basis of site layouts prepared by Mr. Buchan of Hub Engineering, he calculated the value of the subject property before the taking assuming 635 lots that were 60 feet wide. He did the same thing after the taking, assuming that the number of lots had decreased to 548. The estimated value of the partial taking was the difference between these two valuations which, after amendment, was $2,364,000. This market valuation for the partial taking was based solely on the difference in the number of lots. To this sum Mr. Blanchette added two additional amounts for injurious affection as a result of the taking: an allowance for noise for those lots affected by Nordel Way and the 84th Avenue connector ($1,195,000) and an allowance for net extra servicing costs ($790,000), based on servicing costs prepared by Mr. Buchan. This allowance for extra servicing costs was amended in argument to approximately $110,000 plus $519,000 for extra costs for such items as street lights.

[79] While Ms. Watson carried out a Direct Comparison approach before the taking, she stated that she used this method only as a check on the Subdivision Residual Approach, or Development Approach the approach on which she primarily relied. This approach assumes a model in which the estimated development costs, financing costs, and profits are deducted from the estimated selling price of the lots or units in a development to yield an estimation of the raw land value before development. This residual land value represents what a prospective purchaser would pay for the land. Ms. Watson used site layouts and phasing provided by the planner, Mr. Jorden of Davidson, Yuen, Simpson, and the engineer, Mr. Kruger of CitiWest. Engineering costs were also provided by Mr. Kruger. Before the taking there were 539 single-family lots (primarily 66 feet wide), 44 townhouses and 1.2 acres of neighbourhood commercial on the subject land and Ms. Watson assumed that the development would be phased over nine years. After the taking there were 490 single-family lots (the majority were still 66 feet wide), 57 townhouses and 1.4 acres of commercial. She adjusted each of the subject lots for size, views, topography, proximity to major arterial routes, including the Burlington Northern Railway, and for the presence of rights of way, although she did not provide us with any details of which lots were adjusted and how. In the after scenario, a number of the lots backing onto the highway were worth less as a result of the noise. In addition, there was an area of 1.15 acres of severed land that could not be accessed and therefore had no value.

[80] In spite of these factors that reduced the after value, the difference between the before and the after value of the land using the Subdivision Residual Approach was less than the pro rata market value set out as a minimum in section 40(3) of the Act. (The ratio of the land taken to the total land before the taking times the market value of the land before the taking) In other words, the difference between the before and after approach was only 3.9% of the before market value while the land area of the taking represented 7.8% of the total land area of the subject property. Ms. Watson attributed this to two factors: a decrease in engineering costs as a result of the project and a more valuable commercial site after the taking. As a consequence, Ms. Watson had to resort to the provisions for minimum compensation in section 40(3), (4) and (5) of the Act. She used what she called the Summation Approach to calculate the value of various single-family lots and townhouses that were located on the land taken and thus were lost as a result of the taking. She valued these lots that were lost differently depending on whether they were ripe for development or were deferred for three years and whether or not they were encumbered with an easement and what type of easement.

[81] The loss in market value estimations of each party, based on the appraisal evidence, may be summarized as follows:

	Claimants		Respondent
	Before	After	Before	After
Direct Comparison Approach	$17,273,000	$14,909,000	$9,200,000
Subdivision Residual Approach			$8,052,890	$7,741,776
Conclusion			$8,052,890	$7,741,776
Difference between Before and After		$2,364,000		$ 311,114
Value of land taken - Summation				$ 874,000
Injurious Affection - noise		$1,195,000
- extra servicing*		$ 110,000
		$ 519,000
Estimate of Compensation		$4,188,000		$ 874,000
* as amended in submissions

[82] As indicated above, Mr. Elsom in rebuttal, provided evidence on his opinion of market value. He testified that it was his opinion the subject property was worth $200,000 per acre and in submissions he adopted the more conservative estimate of $160,000 per acre for a value of the taking of $1,833,600.

[83] During the hearing there was much testimony about the relative merits of the Direct Comparison Approach and the Subdivision Residual Approach or Development Approach. Mr. Blanchette stated in his report that the Subdivision Residual Approach was not appropriate because there was not an approved lot layout with associated engineering costs. He also commented on the subjectivity and volatility of this approach. Mr. Elsom testified that the Subdivision Residual Approach was not one used by developers looking to purchase property; they did not have time to have such a complex valuation done. During submissions Mr. Elsom indicated that the Ministry was trying to devalue his property by using the Subdivision Residual Approach and spreading out the development which resulted in a discounting of the value.

[84] In the family law trial Mr. Elsom provided an opinion as to the market value of the subject property and contrary to what he has stated in this hearing he used a residual approach spread over a 20-year development. However, Mr. Justice Locke commented on p 24 of the decision that this evidence did not seem to provide much assistance since both counsel and both appraisers said that land residual approaches were not applicable.

[85] Ms. Watson stated that the problem with relying on the Direct Comparison Approach was that there were no good comparables for such a large property at the valuation date. The largest property that she could find to be used as a comparable in this approach was 10 acres which was not very comparable to the subject at 147 acres. (While Mr. Blanchette used seven of the same comparables, he did use one different comparable dating from July 1982 that was 16.5 acres.) She argued that the Subdivision Residual Approach was preferable because it was the only approach that properly considered the effect of time for absorption of lots on such a large property. She did use the Direct Comparison Approach as a check on the valuation she obtained from the Subdivision Residual Approach in the before scenario.

[86] In Sequoia Springs West Development Corp. v. British Columbia (Minister of Transportation and Highways) (2000), 69 L.C.R. 1 (B.C.E.C.B.), this board discussed some of the problems associated with the Development or Subdivision Residual Approach at para 49 through 55. One problem was the degree of uncertainty inherent in this approach unless a proposed subdivision has already been approved. In Sequoia Springs there was an approved subdivision plan for the after situation, and all of the evidence was based on this approved layout, although there was some difficulty in establishing an appropriate layout for the before situation. Another problem with the Development Approach was the volatility of the approach when a comparatively minor change in one of the large number of subjective factors can significantly affect the residual value for the raw land. In Premanco Industries Ltd. v. British Columbia (Ministry of Environment, Lands and Parks) (2000), 71 L.C.R. 6; leave to appeal to B.C.C.A. refused, (2001), 72 L.C.R. 1 (B.C.C.A.) this board noted at para 129 that the volatility associated with the "residual method" was magnified in an arbitration setting such as this, where the constraints provided by the real market place are lacking. The board in Premanco quoted a passage from a decision of the English Lands Tribunal, Clinker & Ash v. Southern Gas Board (1967), Digest of Cases, 1967 533, and went on to comment that the Lands Tribunal in the Clinker & Ash case suggested that valuers using this method in proceedings before the Tribunal "have a natural tendency to put forward opinions of value that are either undependably high or undependably low", depending on the party they represent. In Sequoia Springs the board commented at para 53 that because of the volatility inherent in the Development Approach, "the Direct Comparison Approach is to be preferred except where there is insufficient evidence to support a comparative approach". It reluctantly accepted the Development Approach in the after situation because of the lack of any other evidence.

[87] In this case we do not have any approved plan for the whole subject property. All we have are four actual subdivisions for a total of 157 lots (150 lots on the subject property) that occurred after the taking, with the last one occurring some ten years after the taking. Both parties utilized these approved lots to some degree in their after layouts, although there were some criticisms as to how this was done. But this leaves approximately a hundred acres of the subject property after the taking for which there is considerable uncertainty as to what will be approved. Although we have the claimants' plan that forms part of a new application for subdivision of the remainder of the subject property in 2001, reviewing the correspondence between Delta and the claimants over 15 years suggests to us that a number of changes will be required before it is approved. In any event, the plan in this application has been submitted some 16 years after the date of taking, and some aspects of it such as the private school, are clearly not applicable to a layout for a hypothetical purchaser. We do not know what size single family lots would have been approved for the remainder of the site nor how many. We have concluded that the highest and best use will include some modest amount of multi-family and commercial, but we do not know the number of multi-family units that would have been approved, nor the density. We do not know where the multi-family units would have been located. We do not know how much land would have been approved for commercial, nor what type of commercial would have been approved. We also do not know how much land for a park would have been required. We note that in the subdivision that was eventually built on Lot 666, for example, the evidence shows that Delta was requiring land for a trail system. Although we do not have the final approved plan, the total park and open space in the two applications for this subdivision that were in evidence were considerably more than 5%. Thus we are faced with much greater uncertainty than the board had in Sequoia Springs where an after plan for the entire remainder of the subject property had been approved within a few years of the taking.

[88] We note that the approved plans for these four small subdivisions appear to be the only relevant changes in the consideration of the Subdivision Residual Approach since the family law trial in December 1984 when Mr. Justice Locke accepted the evidence and submissions of counsel that this approach to determine the market value of the subject property was not applicable.

[89] In any event, as we indicated above, Ms. Watson does not in fact use the Subdivision Residual Approach to arrive at her final estimation of value. She used the Subdivision Residual Approach to derive a value both before and after the taking. But the value of the difference between these two values that she obtained was below the minimum set out in section 40(3) of the Act. In considering the value of the land that had been taken as required under section 40(3), she concluded that some of the land that was taken was more valuable (the land that was ripe for development) while other land was less valuable (the land that was encumbered by easements). As a result she valued each of the lost lots differently depending on whether or not they were ripe for development and whether or not they were encumbered with an easement. A close review of this valuation indicates that it was based on the discounting model and the adjustment for easements that she had used in the Direct Comparison Approach. Thus, although she did carry out the Subdivision Residual Approach, it was eliminated when the difference between the before and after value was too low and the basis for the final estimate of value was from information derived from the Direct Comparison Approach, rather than the Subdivision Residual Approach. This did not appear to be recognized during the hearing.

[90] While we agree with Ms. Watson that the comparables used by both appraisers in the Direct Comparison Approach are far from ideal, after consideration of all of the relevant factors, we are not necessarily convinced that the reasons for avoiding the Subdivision Residual Approach have been overcome in this case. In any event, the Subdivision Residual Approach analysis depends on a particular layout and all the costs that are used in the approach are based on that layout. When we reviewed the layout used by the respondent, in addition to the general uncertainties as to what might be approved, we have some difficulties with the before and after layouts adopted by the Ministry's experts that appear to diminish the value of the taking.

[91] One such difficulty was that the planner, Mr. Jorden, adopted 66-foot lots before the taking (except for the 48 60-foot lots in what became the Doncaster subdivision that had already been submitted to Delta prior to the taking) but after the taking he used the three other subdivisions that were subsequently approved. This included 63 60-foot lots for the Harrogate subdivision (55 on the subject property), 30 50-foot lots on Lot 112 and 13 60-foot lots on Lot 666 (Mr. Jorden appears to have put 13 lots on Lot 666 although the actual development was 16 strata lots). Omitting Lot 666, there were almost 100 out of a total of 490 lots that were smaller after the taking than before. In a valuation for the taking that depends on subtracting the after valuation from the before valuation, when both valuations are primarily based on the valuation of each of the lots, this would tend to minimize the impact of the taking. On a purely mathematical basis, the underestimation of the loss of lots for this particular factor is approximately 10 lots.

[92] In Sequoia Springs this board dealt with a similar issue of what differences were appropriate in before and after layouts. In that case the after plan had been approved by the municipality and the issue was the relative ratio of single and multi-family units in the before scenario. At para 89 the board said:

The board went on to alter the ratio of single-family lots and multi-family units in the before so that it was consistent with the ratio after the taking since that change would drive a higher value. This it said would result "in a more equitable comparison for measuring the value of the taking and the loss in value to the remainder".

[93] In this case we acknowledge that developing a before and after scenario with no comprehensive approved plan is a complex exercise. During the hearing each party was criticized by the other for inequities in their layouts for before and after the taking. Designing sequenced phases of approximately 500 lots for before and after layouts that take into account servicing requirements and at the same time consider such issues as keeping lot sizes and/or lot densities similar, and incorporating various aspects of the subdivision plans that have been approved, is not a simple task. However, we agree with the board in Sequoia Springs, that the layouts both before and after must be chosen in regard to the principle of providing optimum value in an equitable manner.

[94] In both the before and after layouts the hypothetical prudent purchaser is assumed to have the same information, but for the fact that there is a taking for the Project in the after layout. If hindsight is used after the taking to factor in the important consideration of what was in fact approved by the municipality, it should generally be applied before the taking as well, in order to be equitable. We do not see that the taking for Nordel Way in any way supports a position for many of the lot sizes becoming smaller after the taking. Although Ms. Watson did not directly compare the profitability of a layout with 66-foot lots to one with 60-foot lots, she did testify about the relative developer's profit for three of the comparable sales where the serviced lots had been sold. After making various assumptions about costs, the layout with more, but smaller, lots produced the most profit, while the layout with the largest lots produced the least. Ms. Watson stated in her report that she adjusted for the size of lot in the Subdivision Residual Approach on the basis of $1,000 per 1,000 square foot deviation from the base lot size of 6,458 square feet. There was no indication in the report as to which lots were adjusted or how many lots were adjusted. It is not clear to us whether there was a minimum difference in size before the adjustment was made. Even if an adjustment was made in accordance with Ms. Watson's formula, it does not begin to account for the underestimation of the loss of lots. We do not think that it was equitable for the Ministry to transform approximately 100 lots in the after scenario to smaller, and possibly more profitable lots, and in any event cause an unnecessary reduction in the number of lots that were lost.

[95] Another inequity with the before and after layouts is the Ministry's choice of the number of multi-family units. Before the taking there were 83 townhouse units in the overall layout but only 44 of them were on the subject property. The shifting of the location after the taking meant that although there was a slight decrease in the number of townhouse units in the overall layout from 83 to 77, there was an increase in the number of units on the subject property from 44 to 57 units. Since the multi-family use was more valuable, a greater number of townhouses in the after situation would decrease the effect of the taking. As the board stated in Sequoia Springs it is more equitable to attempt some consistency between the ratio of single-family lots and the number of multi-family units both before and after the taking unless there is a reasonable explanation that arises from the circumstances of the taking. It may be that the change in the location of the townhouses after the taking is appropriate but we were not convinced that efforts had been made to be more equitable in maintaining the ratio of single-family lots and multi-family units.

[96] Thus there are at least two aspects with the Ministry's before and after layouts that we do not accept, in particular the use of approximately 100 smaller lots in the after layout. The engineering costs prepared by Mr. Kruger depend on a particular layout. If we change the layout by changing such factors as the size of the lots, the number of lots and the number and location of the townhouse units, we do not have the necessary information to amend the engineering costs. As pointed out by E.C.E. Todd in The Law of Expropriation and Compensation in Canada, 2nd ed. (1992), at p. 221, the Subdivision Residual Approach depends on servicing costs that have a "solid factual basis" as one of the several factors that are fed into the model. While it is possible to rework the model for the Subdivision Residual Approach if certain factors are changed, in this case we were not provided with the evidence to recalculate the servicing costs if the number and location of lots and townhouse units are changed.

[97] In summary, we conclude that we are unable to use the Subdivision Residual Approach in this case. As we have indicated, the Subdivision Residual Approach was not in fact used by either appraiser to determine the final market value of the effect of the taking. More importantly, there are too many uncertainties with respect to the potential development in 1985 to use the Subdivision Residual Approach when this approach depends on a particular layout and detailed engineering costs associated with that layout. Having rejected certain aspects of the respondent's layouts, we simply do not have the necessary evidence. In these circumstances, a somewhat more general approach to the valuation is appropriate.

[98] Mr. Blanchette relied on layouts provided by Hub Engineering that showed 635 lots on the subject land before the taking that were all 60 feet wide. He used the sales of eight comparables, ranging from 0.73 hectares (1.8 acres) to 6.68 hectares (16.5 acres). These sales ranged from $62,762-$189,591 per acre or $22,500-$27,778 per raw lot. From this data he concluded a value per raw lot of $25,000. He made one adjustment for density. The layouts for the subject property had a lower density before the taking than the comparables. Since Mr. Blanchette estimated the comparables had 20% more lots per acre, he made a 20% upward adjustment to the raw lot value of $25,000 per lot to arrive at an adjusted raw lot value of $30,000.

[99] Mr. Blanchette amended his report to allow for a one year deferral in his valuation to allow time for approval of a comprehensive development plan. He considered data on bank and mortgage rates at various times and concluded a discount rate of 10% as appropriate. As indicated above, his value before the taking was $17,273,000 (635 lots x $30,000/lot discounted 10%).

[100] In rebuttal Mr. Elsom presented some evidence to support a higher valuation than Mr. Blanchette. With respect to lot value, he provided his opinion that specified properties that had been used as comparables by both Mr. Blanchette and Ms. Watson were not as valuable as the subject property because of such factors as lacking a view or being close to commercial development. Mr. Elsom was asked his opinion as to the market value of the subject property in May 1985 which he answered at $200,000 an acre or $50,000 per raw lot value. In argument, the claimants stated that they would adopt a "conservative" approach to this evidence and claim $160,000 per acre or $40,000 per raw lot. The claimants submitted that because the Project had frozen development applications for the subject property in 1979 and in 1983 that the entire property should be treated as imminently developable in 1985; there was no need for any discounting. We note that in the family law trial Mr. Elsom testified that the property value was only $45,000 per fully serviced lot on sale to a purchaser, including development costs, developer's profit and real estate commission.

[101] Ms. Watson carried out a valuation before the taking using the Direct Comparison Approach. As indicated above her highest and best use was mixed use and she relied on the mixed use layout prepared by the planner, Mr. Jorden, and the engineer, Mr. Kruger. On that part of the subject lands owned by the claimants, there were 539 single-family lots (491 lots were a minimum of 66 feet wide and 48 were a minimum of 60 feet), 44 townhouses and 1.2 acres of commercial space before the taking. With respect to the 57.61 hectares (142.34 acres) assumed to be single-family residential, she used eight comparables, seven of which were the same as those used by Mr. Blanchette. She also concluded a value of $25,000 per raw lot from the comparable sales, although her raw lots are larger than those of Mr. Blanchette. She divided the single-family residential portion of the property into three sections. In May 1985 development for Phase 1 or what became the Doncaster subdivision was imminent, and as a result she applied no discount for time for those 48 lots. Since she had assumed that Phase 2 or what became the Harrogate subdivision was in the planning stage she applied a discount of one year for approval to the 55 lots in that subdivision that were on the subject property. The remaining 436 lots on the subject property were discounted for three years to allow for time to obtain approval for a comprehensive development plan and for some of the services to go in. After considering a variety of financial information she determined that a discount rate of 11% was appropriate. The total value for the 539 single family raw lots was $10,428,721.

[102] For the 1.62 hectares (4.01 acres) multi-family area of the subject property Ms. Watson had four comparable sales that provided a range of values per estimated townhouse unit of $12,833 to $17,283. She concluded a value of $15,000 per unit for the lakeside units and $12,000 per unit for those that were not lakeside. The valuation for the 44 townhouse sites was discounted for three years at 11% for a final valuation of $425,553.

[103] Finally, Ms. Watson valued the 0.49 square hectares (1.2 acres) of the subject property on the commercial site using seven comparable sales. Ms. Watson concluded a value for the subject of $6.50 per square foot. This yielded a valuation of $223,743 after discounting for four years at 11%.

[104] The total valuation of the portions of the subject property used for single-family residential, multi-family and commercial was $11,058,017. Ms. Watson made two further adjustments to the sale prices. First, she made an adjustment for the four easements, after reviewing the restrictions for each easement. A total of 7.82 hectares (19.31 acres) was encumbered by various easements, with some of this land encumbered by more than one easement. She reduced the value of the actual land that was encumbered between 30% and 80%, depending on the type of easement and the restrictions on development. She also applied a general discount of 10% for a number of factors including the large size of the subject property, uncertainty, and the time for absorption for so many lots.

[105] After these adjustments, her overall valuation for the property before the taking was $9,199,899 or $9,200,000 rounded by this approach.

[106] Because the subject property was so much bigger than any of the comparables, 59.5 hectares (147 acres) compared to 3.8 hectares (9.48 acres) for the largest comparable for single-family development, Ms. Watson attempted to check her final valuation with two sales of large development property. One of these was the sale of British Columbia Penitentiary site in New Westminster that yielded a price of $70,383 per gross acre or $131,926 per net developable acre in April 1986. The second sale Ms. Watson used was Riverview Heights in Coquitlam. This sale price in June 1985 translated into $93,346 per acre for the single-family development at 4.75 lots per acre. In her report Ms. Watson stated that this value for the second sale supported her market value per acre for the subject of $62,348 after taking into account the lack of approvals for the subject.

[107] The two parties' estimations of market value for the subject property before the taking using the Direct Comparison Approach are very far apart: Mr. Blanchette estimates $17,273,000 and Ms. Watson $9,200,000. There are two main reasons for this significant difference. First Ms. Watson has assumed that most of the development on the subject property should be discounted for three years to permit time for a comprehensive development plan to be approved and for services to be installed. Mr. Blanchette, in contrast, initially valued the property without any discounting, and then in an amendment, assumed only a one year delay for a comprehensive development plan. Second, because his raw lots on the subject property were larger than the lots in the comparables, Mr. Blanchette made a 20% adjustment for density, while Ms. Watson, despite using larger raw lots on the subject than Mr. Blanchette, made no adjustment. Other differences are the presence of a park in the respondent's layout, the size of the single family lots, and the adjustments for easements and size of the property. Ms. Watson has used a few acres of multi-family and commercial which have a higher value than single family residential, but this has been off-set by the other factors listed above.

[108] In arriving at a valuation of the property before the taking we have to consider a number of factors including the layout that should be adopted, the number of years that the sale price should be discounted, the discount rate, the comparables that should be used, and the appropriate adjustments.

[109] Both appraisers provided us with detailed layouts. Since the Direct Comparison Approach depends primarily on the value for every single family lot (plus the value for each townhouse unit and the value for the designated commercial space) the layout that is adopted will have a significant effect on the value. There were a number of aspects of the layouts presented by the two parties that were in dispute and that need to be resolved. These were as follows:

[110] The claimants did not include any park in their layouts before and after the taking, despite Delta's demands that a park site be located on the subject property. Mr. Elsom strongly objected to providing a park on his property and he had attempted to avoid this requirement in various ways including the offer of other land and successive applications for small subdivisions. Mr. Buchan stated that since the location of the park was unknown he had simply omitted it. It would require more work to modify the layouts if you moved the park from one location to another, than if you simply inserted a park in the location where it was eventually required. The Ministry's layouts showed a park centred on a lake in the middle of the development. The portion of the park on the claimants' land both before and after the taking was approximately 5% of the total amount of the claimants' land in the development.

[111] In 1985 the Municipal Act required owners of land applying for subdivision to provide up to 5% of their land for park, or, in the alternative to pay 5% of the market value of their land instead of providing the land itself. The evidence made clear that Delta was determined to have a park located on the subject property. Although the OCP had not yet been passed identifying a park site on the subject property, the draft OCP showed a park site. A prudent hypothetical purchaser of the land would have known about Delta's requirements and would have taken the park requirement into account. We conclude that 5% of the overall subject property should be deducted for a park. Using 147 acres for the subject property this results in 7.35 acres being deducted.

[112] We note that in the family trial Mr. Elsom's report on the market valuation of the subject property deducted 5% for park dedication. Locke J.'s valuation of the property was based on a developable area after a 5% deduction had been made for a park.

[113] The claimants criticized Mr. Jorden's choice of a lake as part of the park site when Delta had indicated different things with respect to its plans for a park at different times. They were particularly critical that the lake in the layout was not in the same place as the existing lake. In our view the nature and location of the park is irrelevant, especially given the general nature of the layouts in the Direct Comparison Approach.

[114] The claimants used 60 feet wide lots in both the before and after scenarios. The Doncaster subdivision was developed with 60-foot lots, and the decision for this width of lot had been made in late 1983. Mr. Trygg, the realtor who had worked with selling the lots on Doncaster, and Mr. Buchan, both provided evidence that the initial subdivision application for Doncaster in 1983 used 50-foot lots but that for market reasons the decision was made to go with 60-foot lots.

[115] The Ministry generally used 66-foot lots in its before layout. Mr. Jorden gave evidence that this choice was made based on the Sunbury subdivision to the north and the Canterbury Heights subdivision to the south of the subject property. A number of the subdivisions with smaller frontages occurred after 1985. However, after the taking Mr. Kruger explained that the actual layouts for the four subdivisions that have actually been built were used and all of these were smaller at 60 or 50-foot. As we have already stated, we think that it was unfair of the Ministry to transform approximately 100 lots in the after scenario to smaller, and possibly more profitable lots, when that change causes an unnecessary reduction in the number of lots that were lost.

[116] The choice of size of lot in the market valuation in this case is not necessarily what the claimants decided to do in the Doncaster and Harrogate subdivisions, or what they say that they plan to do in future development. The claimants suggested that Delta's bylaws were changed at some point to allow smaller lots than those that had been built earlier in Sunbury and Canterbury Heights but we did not receive specific evidence on the details. Mr. Jorden stated that he was unaware that Delta approved smaller lots before 1985. However, we note that the initial subdivision application for Doncaster was for 50-foot lots and that in October 1983 at third reading the claimants changed the layout to 60-foot lots. Thus, we accept that 60-foot lots were approvable in 1985.

[117] Having reviewed all of the evidence, we conclude that a hypothetical purchaser would use 60-foot lots, both before and after the taking, as a basis for determining valuation.

[118] The Ministry's layout before the taking included a total of 8.2 acres of multi-family but only 4.01 acres on the subject property and 1.4 acres of commercial with 1.2 acres on the subject property. While the acreages of multi-family and commercial in the overall layout were much the same after the taking, as a result of shifting the locations for these uses, there were higher acreages of multi-family and commercial on the subject property. Both multi-family and commercial uses are more valuable than single family. If there are more of these uses on the subject property after the taking than before, the effect of the taking is minimized. As indicated above, we do not think that it was fair and equitable for the Ministry to place more of these uses on the subject property after the taking than before, unless there were compelling reasons to do so arising out of the taking. In our opinion, there was no reason why the limited amount of multi-family and commercial uses could not have been located entirely on the 147 acre subject property. As a result, we conclude that a hypothetical purchaser having concluded a highest and best use of 8 acres of low density townhouses and 1.4 acres of commercial was reasonable would expect that these more valuable uses would be located on the subject property.

[119] The claimants used layouts with 635 60-foot single family lots on 147 acres before the taking, while the respondent had 539 66-foot single family lots on approximately 135 acres. We have decided that the hypothetical purchaser would have relied on 60-foot single family lots on approximately 130 acres (147 acres - 7.35 acres for park - 8 acres for multi-family - 1.4 acres for commercial). Although we have selected an average lot size similar to what was used by the claimants, we reiterate that we do not know that the claimants' layout would have ever received approval.

[120] There were a number of disputes about both parties' lot layouts before the taking. One of these was to do with the Ministry's omission of lots on the south-western boundary of Lot 112 and Lot 666 next to the BNR railway. Prior to the taking Delta had acquired a road allowance on adjacent properties on either side of the subject property for a projected north-south route called Browning Drive. In fact there was evidence that rights of way had been acquired for much of the entire length of North Delta. There were references to the proposed Browning Drive in the 1978 comprehensive development plan for the subject property prepared by Hanson-Erb for Mr. Elsom. Mr. Jorden reported that the planners in Delta had told him that if the Alex Fraser bridge had not been built, then a road allowance for Browning Drive adjacent to the BNR railway would have been required as a condition of development of the subject property. We note that this requirement is by a different authority than the respondent and is independent of the Project. After the taking Browning Drive was no longer necessary because Highway 91 provided a north-south route. In argument the claimants suggested that Browning Drive was not being contemplated by Delta in 1979 but the evidence for this was far from clear and in any event, by 1979, the new bridge and Highway 91 were generally expected. In our opinion, the evidence supports the fact that there is a probability that a prudent purchaser before the taking, in the absence of the whole Project, would have taken the risk of this requirement into account when he or she was negotiating a purchase price.

[121] The area on which the claimants put lots, but the respondent did not as a result of the Browning Drive right of way, was approximately 3 acres. Portions of this area were steep and significantly encumbered with easements for high-pressure gas pipelines. Because these features limit the number of single family lots that can be located on this area, we find that it is reasonable to allow the equivalent of 2 acres for the Browning Drive right of way. Thus, the new total that is available for single family lots is 128 acres (130 acres - 2 acres).

[122] The Ministry pointed out that both appraisers' layouts before the taking showed lots on a unopened road allowance for 104th Avenue, when this land did not belong to the claimants. We heard some evidence that road exchanges could occur between a municipality and a developer but we have no evidence as to whether this was likely in this case. In our opinion a hypothetical purchaser would not necessarily count on such an exchange and therefore the total number of lots achieved before the taking may be somewhat overestimated.

[123] Another issue was the presence of easements and how the layouts accommodated them. The claimants left leave corridors on much of the B.C. Hydro electrical easements but placed lots on the high-pressure gas pipeline along the southern boundary. The respondent placed lots on all the easements with sufficiently large lots to provide a building envelope. The evidence showed that Delta and B.C. Gas had objected to the size of the lots that backed onto the high-pressure gas pipeline along 108th Street and the southern boundary as shown in the claimants' subdivision applications. Larger lots were required to accommodate sheds, decks, patios and overhangs. Although the present layouts prepared by Mr. Buchan for the claimants contain larger lots than the initial subdivision applications, we remain uncertain as to whether a number of lots in the before layouts prepared by the claimants would have been approved without further accommodation for the easements. Any further accommodation for the easements would decrease the number of lots.

[124] Before the taking the claimants' layout showed 4.32 lots per acre, while the respondent's mixed use layout lots (using somewhat larger lots) showed 4.1 lots per acre on the land that was used for single family. We have indicated that we are uncertain about the lots on the closed 104th Street road allowance as well as the number of lots on the high-pressure gas easement. As we no longer have an engineered layout and we do not know if either of the layouts would have been approved, we must be somewhat conservative in our estimated lot density. We conclude that a density of 4.2 is appropriate. Assuming 128 acres is available for single family lots, at a density of 4.2 we conclude that approximately 538 60-foot single family lots is reasonable.

[125] Mr. Blanchette initially had no discounting and arrived at his valuation based on the value of the total number of lots in his layout. He later amended his report to allow for a one year deferral for the whole property to obtain zoning and planning approval for a comprehensive development plan. Ms. Watson considered the claimants' work on subdivision applications at the time of taking. The Doncaster subdivision had received third reading in October 1983, but in February 1984 Delta notified the claimants that the application would be delayed pending the finalization of the access routes for the new bridge. Final approval occurred in November 1985. As a result of this application being so far advanced Ms.Watson stated that the 48 lots in this subdivision were ripe for development and thus needed no discount. The Harrogate subdivision application was submitted in April 1986 and was eventually approved in October 1987. Ms. Watson applied a 1 year deferral to these 63 lots. Ms. Watson deferred the remainder of the subject property three years to obtain a Comprehensive Development Plan.

[126] At the date of valuation the 48 lot subdivision application was relatively advanced and we agree that a hypothetical purchaser would treat these lots differently and expect them to be on stream shortly. However, we do not think that the lots in Harrogate would be accorded any special categorization by a hypothetical purchaser when no application had yet been made and inquiries to Delta would make it clear that a formal application with an overall plan including a traffic plan and some commitment on a park site was desired.

[127] Mr. Dhillon who had been Deputy Director of Planning for Delta in 1988 stated in his report that an overall plan for the subject property could have been approved in between one and three years depending on its complexity. There was evidence that several other large projects in Delta had taken two to four years to achieve an overall plan. In the family law decision Locke J. relied on the opinion of the appraiser for Mrs. Elsom, Mr. Squarey, that two years would be necessary before any lots would be approved, followed by one third of the unserviced raw lots being approved in each of the next three years. Thus the value of one third of the lots was deferred two years, the value of the next third was deferred three years and the value of the final third was deferred four years. This approach gave some recognition that while initial subdivision applications for part of the subject property might be made concurrently with an application for an overall plan that other parts of the property would achieve subdivision approval later.

[128] Because our valuation of the subject property is based on a hypothetical purchaser and seller in May 1985, Mr. Elsom's particular history with Delta and the difficulties he experienced in obtaining approvals is irrelevant. On the other hand, the subject property was very large and in 1985 there was some history of public opposition to increased traffic and perceived problems from development from residents in the adjacent neighbourhoods. We note that all of the comparables were for developments that were much further advanced in terms of land use approvals. We conclude that deferring all of the subject property, but for the 48 lots in Doncaster, for an average of three years to obtain both approval for an overall plan and subdivision approval is reasonable.

[129] Mr. Blanchette used a discount rate of 10% while Ms. Watson used 11%. Mr. Blanchette reported that the Bank of Canada rate fluctuated around 10% in January and February 1985, rising to 11.5% by the end of February. By mid April it had fallen to 9.75%. Mortgage interest rates ranged from 11% to 12.5% depending on the term and the time of year. Ms. Watson relied on data for May 30, 1985: the prime rate was 10.5% and the 5 year mortgage rate was 12.25%. Ms. Watson's analysis is more precisely related to the date of taking and we accept 11%.

[130] Seven of the comparables used by Mr. Blanchette and Ms. Watson for single family residential were common. Each appraiser used one comparable not used by the other. The range in values per projected lot was relatively tight, with the lowest being $22,159 and the highest being $27,778, after the exclusion of the one property used by Ms. Watson but not by Mr. Blanchette. Both appraisers concluded $25,000 per lot.

[131] We note that in the family law decision Locke J. details the comparables used by Mr. Squarey. From the description of these sales, it appears that several of them were the same as the total of nine comparables used by Mr. Blanchette and Ms. Watson. Mr. Squarey concluded $25,000 per lot as well, and he applied this lot value to a projected density of 6.0 lots per acre. Locke J. based his conclusion of $23,107 per lot by averaging six of Mr. Squarey's comparables.

[132] In our opinion three of the larger comparables used by both appraisers are of particular assistance. These are Mr. Blanchette's comparables 2, 5 and 8 (Ms. Watson's comparables 8, 3 and 6 respectively). All of these comparables were much further along in the approval process than the subject; two had reached third reading and the other had zoning in place with a subdivision application that had already been submitted a number of years prior to the sale. These three comparables yielded lot values on the number of lots achieved of $22,500, $27,778 and $22,675. While Ms. Watson relied on the number of lots contemplated at the time of purchase, rather than the number of lots achieved, the evidence as to what the purchaser had hoped to achieve at the time that he or she had negotiated the purchase price was far from clear, given that the research had been done some 10 to 15 years after the sale.

[133] Mr. Blanchette made a 20% adjustment to his lot value for density. Mr. Blanchette stated that the Hub layouts that he was using for the subject property had a density of 4.8 single family lots per acre before the taking. In comparison, the comparables had projected densities at the time of sale of 2.8 to 7.3 lots per acre, or 5.4 to 7.3 if the comparable with the lowest density is omitted. Since 4.8 lots per acre on the subject property is 20% less than an assumed density of 6.0 lots per acre for the comparables, Mr. Blanchette made a 20% upward adjustment to the raw lot value of $25,000 per lot to arrive at an adjusted raw lot value of $30,000.

[134] Although Ms. Watson's average lot size was larger than Mr. Blanchette's and her density was therefore lower, she did not make any adjustment for size. As we have described above, Ms. Watson did adjust for lot size in her Subdivision Residual Approach on the basis of $1,000 per 1,000 square foot deviation from the base lot size of 6,458 square feet. This adjustment was applied to fully serviced lots.

[135] Mr. Blanchette did not provide any market evidence for his 20% adjustment. As he pointed out, the density of the number of lots per acre is affected by the relative proportion of land that is necessary for roads, and on the smaller comparables this may be less than on the subject property. As a result we find the average lot size more useful than the density in making our comparisons. We also note that Ms. Watson's adjustment based on serviced lots has some basis in market value.

[136] Ms. Watson stated that the average lot size before the taking on Mr. Jorden's layout using 66-foot lots was 8,172 square feet, while the base lot size from which she made adjustments was 6,458 square feet. Neither Mr. Blanchette nor Mr. Buchan provided the average lot size on the claimants' layouts using 60-foot lots. We estimate that for our general layout with a minimum lot size of 6,000 square feet the average lot size is more than 7,000 square feet. While some of the comparables had much smaller lots than the subject property, two of the three comparables that we find of most assistance achieved lots that are closer in size to those on the subject property, although they are still somewhat smaller. Mr. Blanchette's comparable 5 (Ms. Watson's comparable 3) had lot sizes ranging from 4,725 to 6,857 square feet with an average of 5,600 square feet. This comparable provided a lot value of $25,000 based on the initial subdivision proposal and $27,778 based on the smaller number of lots achieved. This layout, like the subject property, had a 5% park. Mr. Blanchette's comparable 8 (Ms. Watson's comparable 6) had lot sizes ranging from 4,785 to 9,928 square feet with more than a third of the lots significantly over 6,000 square feet. This comparable provided a lot value of $22,159 based on the original subdivision proposal or $22,675 based on the final subdivision that was built. There was no park in this layout, but the developer would have paid 5% of the market value in lieu. Therefore the lot value needs to be adjusted upward to approximately $24,000. We are unable to use the third comparable in this analysis as it was never built and so we do not have the actual lot sizes.

[137] Based primarily on these two comparables and Ms. Watson's adjustment for lot size, together with an adjustment to Mr. Blanchette's comparable 8 for the lack of park, we conclude an adjusted raw lot value of $28,000 is reasonable.

[138] Mr. Elsom in rebuttal suggested that the subject property was superior to various of the comparable sales because the subject property had better views and was not near commercial development. Mr. Elsom conceded that one of the comparables that we are relying on did have a view (Mr. Blanchette's number 8, Ms. Watson's number 6) and in any event we accept the two appraisers' opinion that the lot values on these three sales were comparable.

[139] Ms. Watson provided the only evidence for the value of townhouse sites. She used four comparable sales for the 4.01 acres of the subject property to be used for townhouses. These sales ranged from 1.47 acres to 7.04 acres with a projected range in density of 8.8 to 13.1 units per acre. These sales provided a range of values per unit of $11,688 ($12,813 after correction) to $17,283. She concluded a value of $15,000 per unit for the lakeside units and $12,000 per unit for the others. The valuation for the 44 townhouses sites was $582,000 undiscounted or $145,137 per acre.

[140] We have concluded that the multi-family units in the before layout should be located on the subject property. We note that Ms. Watson's comparable sales were corrected during the hearing with the result that the lowest was $12,813 per unit. In our opinion the two lowest sales were less desirable than the multi-family sites on the subject property because they were at a higher density. We conclude a base value of $14,000 per unit. Assuming the same total area of 8 acres, with the same density of townhouses we conclude a total of 85 townhouses is reasonable. Because we are using a general layout, we are not including a lake and we value all the townhouses at $14,000. We conclude a total valuation of $1,190,000 undiscounted for all the multi-family unit sites or $148,750 per acre.

[141] Again the only evidence we have about the value of neighbourhood commercial is from Ms. Watson. She used seven comparable sales to value the 1.2 acres or 52,255 square feet of the subject property that was to be used as commercial. These sales yielded a range of $4.41 to $11.91 per square foot and after adjustment for location Ms. Watson concluded a value for the subject of $6.50 per square foot. This provided a value of $339,658 undiscounted or $283,048 per acre.

[142] We have decided to use 1.4 acres of commercial rather than the 1.2 acres used by Ms. Watson. At the same valuation per square foot this provides a valuation of $396,266 undiscounted or $283,048 per acre.

[143] Ms. Watson adjusted her total before valuation of $11,058,017 for the actual land that was occupied by the four easements. She assumed an average value per acre of $74,944 from this total before valuation. She reduced the value of the land that was encumbered with overhead transmission lines by 60%. (This was not a reduction to all the raw lots that were partially encumbered, but a reduction only to the land with the encumbrance.) The land with an unused easement for overhead transmission lines was reduced 30%. Land with underground water, gas, or sewer pipelines was reduced by 50%. An area encumbered by both overhead transmission lines and a gas pipe line was reduced by 80%. The total of 19.31 acres that were occupied by encumbrances were reduced in value from $1,447,326 to $611,419 for a reduction of $836,000.

[144] Mr. Blanchette made no adjustment for easements. While his report contained a useful map of the easements, there is no indication in the text as to the total area of each easement. Although Mr. Buchan provided us with many calculations of area including the area of the overall layout, the area of the subject property, the area of the first taking and the area of the second taking, he did not provide us with any area for the easements.

[145] The layouts of both parties had fewer lots as a result of the easements. Mr. Buchan's layouts left corridors on most of the electrical easements, with no lots placed on them. Mr. Buchan did place lots on portions of the underground high-pressure gas easement. The layouts developed by Mr. Jorden and Mr. Kruger, included most of the easement area in the lots and as a result a number of lots were larger than average. This approach also resulted in fewer lots.

[146] Ms. Watson stated that she obtained the percentage deductions for the actual land encumbered by various types of easements from the literature and cases rather than from market value analyses. Market value information provides a measurement of the impact of easements on individual serviced lots and she used this information in the Subdivision Residual Approach. Ms. Watson described the deductions that she used for each easement in the Subdivision Residual Approach. For the unused electrical easement she reduced a serviced lot 2%, for an underground gas easement she reduced a serviced lot 3% and for double easements of both electrical and gas she reduced the value of the serviced lot 10%. She did not provide the percentage deduction for electrical easements alone but it must be between the 3% for an underground gas easement and the 10% for both an underground gas easement and an electrical easement. We conclude 8% is appropriate. During cross-examination she went on to testify that because the cost of servicing is not effected by the easements the appropriate deduction for raw unserviced lots was approximately twice the deduction for serviced lots; namely, 4%, 6% and 20% (and 16% for the electrical easement).

[147] We note that the basis of the Direct Comparison Approach for both Ms. Watson and Mr. Blanchette is the market value per raw lot. We were able to determine the deductions for the four different types of easements by counting how many raw lots on Mr. Jorden's layouts had each type of easement and applying these deductions of 4%, 6%, 20%, and 16%. When we added up the total deductions for all the raw lots with different types of easements we obtained a deduction of less than $450,000 undiscounted. When we discounted the deduction, in accordance with Ms. Watson's allocation of lots to one of her three phases of development, the total deduction for different types of easement dropped to less than $350,000. These numbers are much lower than the $836,000 deducted by Ms. Watson using her various percentage deductions for acreage land with easements. In our opinion, these two models for measuring the impact of easements should yield somewhat similar results, although the percentage deduction for acreage land includes land that will be used for roads and sidewalks. Since the basis of the valuation in this Direct Comparison Approach is the market value per raw lot, rather than per acre, we conclude that the adjustment using 4%, 6%, 20% and 16% of the raw lot value is a better measure of the impact of easements.

[148] We are using a general layout with 60-foot lots rather than Mr. Jorden's layouts with 66-foot lots (although Mr. Jorden's before layout does use 60-foot lots in the Doncaster Phase 1 subdivision and 15 of these lots are affected by easements). We have reviewed Mr. Buchan's layouts that use 60-foot lots. We note that although Mr. Buchan did not place lots on some of the electrical easements, in our opinion, those lots that back onto the electrical easements with overhead transmission lines would be effected in a similar manner as Mr. Jorden's lots that actually included some of the electrical easement. We also note that our general layout already contains a downward adjustment for easements because the density takes into account that there are fewer lots as a result of the easements. However, in our opinion, this reduced density is not a sufficient measure of the impact of the easements. Taking all of the evidence into account, we conclude that a specific deduction for easements of $350,000 should be made in addition to the reduced density. This deduction assumes a discount for three years for all of the lots in our general layout except those in the Doncaster Phase 1 subdivision.

[149] Mr. Blanchette made no adjustment for size or risks or time but for the one year deferral to obtain a comprehensive development plan that he added in a supplementary report. Ms. Watson made a 10% adjustment to the overall value for the large size of the subject property, the greater uncertainty with respect to development, and the increased time frame to obtain necessary approvals, to install servicing and to obtain revenues from the sale of the lots.

[150] We have included one aspect of this, the time frame to obtain necessary approvals, in the deferral time of three years for most of the subject property that is discussed above. But, there must still be a consideration for the great difference in size of the subject property and the related problem of time to install servicing and time to obtain revenues from the sale of the lots. The comparables were for small developments where the time for absorption would be short. The size of the subject property also means that there was a greater risk associated with its development. In the circumstances, we agree with Ms. Watson that a 10% adjustment for these factors is reasonable.

[151] Thus our final valuation for the subject property before the taking using the Direct Comparison Approach is as follows:

48 single family lots at $28,000			=	$ 1,344,000
490 single family lots x $28,000	=	$13,720,000
85 townhouses at $14,000	=	$ 1,190,000
60,964 sq ft commercial at $6.50/sq ft	=	$ 396,266
Subtotal		$15,306,266

Deferred three years				$11,191,941

Subtotal				$12,535,941
Easement adjustment				– $ 350,000
Size adjustment				– $ 1,218,594

Total				$10,967,347

This valuation before the taking of $10,967,400 rounded yields a value of $74,608 per acre rounded for 147 acres.

[152] Ms. Watson compared her final value of $9,200,000 for the subject property before the taking ($62,348 per acre) to two other sales of large development sites in the Lower Mainland. One of these was the sale of the B.C. Penitentiary site in New Westminster, a 71 acre site, of which 37.9 acres was developable. The sale price of $5,000,000 in April 1986 was based on 820 multi-family units and 73 single family lots. This price yielded a value per net acre of $131,926 (or $70,383 per gross acre). Ms. Watson comments that this sale is difficult to compare with the subject property because it is more urban with higher density development.

[153] The other sale of a large development site was Riverview Heights, a 128 acre development site in Coquitlam. This sale, like the subject property, was for primarily single family residential development (571 single family lots and 94 townhouses). The sale price was $20,564,997 in June 1985. However, Ms. Watson reported that the sale terms provided for a phased development with the developer being required to pay for the land in each phase when it came on stream with no interest. When she discounted the price in accordance with the sales contract and adjusted for single family only, she stated that the adjusted value for each raw lot was $19,650 (at 4.75 lots per acre) or $93,346 per acre for the single family land. She pointed out that these provisions in the sales agreement significantly decreased the risk for the developer. There were also services worth $3,300,000 in place. Ms. Watson stated that her valuation of $62,348 per acre for the subject property, which included adjustments for the easements and the associated lower density, together with the lack of approvals, was supported by the adjusted price of $93,346 per acre for the single family portion of the Coquitlam property. We note that the unadjusted price for the whole Coquitlam property was $160,514 per acre.

[154] Ms. Watson's description indicates that the Coquitlam site has a number of features in common with the subject property, such as overall size, proposed density, proposed mix of single-family and townhouse, date of sale, projected servicing costs and projected sale price of the subdivided (somewhat smaller) lots. Differences include the fact that the subject property has significant easements and no approvals. We also have to assume a sale price for the subject property that is independent of financing and includes the various risks of development of a large parcel. However, given the number of similarities, we would have appreciated more details on this transaction. Ms. Watson adjusted the sale price of the Coquitlam property from $160,514 per acre to $93,346 per acre to take into account the financing terms in the sales contract and the multi-family component, but we were not provided with the details of that adjustment. Her valuation of $62,348 per acre for the subject property included the multi-family and commercial components and therefore the adjustment of the Coquitlam property to exclude the multi-family appears to be inappropriate. In the final analysis, we were not provided with sufficient evidence about the Coquitlam property and Ms. Watson's adjustment to provide any meaningful comparison with the valuation of the subject property.

[155] After the taking the claimants' layouts showed a drop in the number of 60-foot lots on the subject property from 635 to 552, assuming no overpass, or to 548 assuming an overpass would be built. Mr. Buchan testified that he had made efforts to be consistent with 60-foot lots both before and after the taking which meant that he modified the layouts that were actually achieved on Lot 112 and Lot 666 since they were developed with 50-foot lots. He used the actual layouts for Doncaster and Harrogate in the after scenario. In addition, Mr. Buchan increased the length of lots bordering Nordel Way and the 84th Avenue connector in the after layout so that they were at least 120 feet instead of the more general 100 feet. This was to partially mitigate the effect of noise from Nordel Way on these lots. Mr. Blanchette, relying on Mr. Buchan's layouts, concluded a value after the taking of $14,909,000 (548 lots x $30,000/lot discounted for one year at 10%).

[156] Mr. Blanchette deducted his after value of $14,909,000 from his before value of $17,273,000 for an opinion of value of the 4.6 hectares (11.46 acres) that was taken of $2,364,000. To this sum, representing only the value of the lots lost in the taking, Mr. Blanchette added two additional amounts for injurious affection to the remaining land. First, with respect to noise he made an 18% downward adjustment in the value of the 112 lots that backed onto Nordel Way or the 84th Avenue Connector as well as a lesser adjustment of 10% for the eight lots that backed onto the overpass. After estimating the effect of these adjustments on the raw lot values he calculated a net reduction in value for noise of $1,195,000 rounded.

[157] Second, relying on figures obtained from Hub Engineering he concluded an increase in net servicing costs. Although Mr. Buchan's estimation of the total servicing costs after the taking were lower than in the before scenario, the servicing costs per lot after the taking were somewhat more per lot than before. Mr. Blanchette used this extra cost per lot to calculate the total additional servicing costs after the taking. From this he subtracted Mr. Buchan's estimate of the benefit to the claimants as a result of the Ministry installing a storm sewer under Nordel Way with connections for any future development. The net increase in servicing costs was approximately $110,000.

[158] Finally, Mr. Buchan calculated the extra costs for a number of items that may be required as a result of the taking which was amended to $519,000 in argument.

[159] Thus Mr. Blanchette's total claim (as amended) for the market value of the land that was taken plus injurious affection for noise and a net increase in engineering costs and additional costs was $4,188,000.

[160] Mr. Elsom valued the 11.46 acres lost in the taking at $160,000 an acre for a total claim of $1,833,600 for the loss in market value as a result of the taking. He did not make any further claims for the impact of the taking on lot layout, noise, or engineering costs.

[161] Ms. Watson did not do a Direct Comparison Approach after the taking. However, aspects that she used in the Subdivision Residual Approach can be applied to her Direct Comparison Approach in the before situation. After the taking the Ministry's layouts showed 490 single-family lots, 57 townhouses, and 1.4 acres of commercial space on that part of the subject lands owned by the claimants. This was a decrease of 49 single-family lots. As described above, after the taking, the actual layouts for the four subdivisions that have actually been built were used and all of these were smaller at 60 or 50-foot. On the other hand, after the taking, most of the 79 lots in the Ministry's layouts that bordered Nordel Way and the 84th Avenue connector were larger as they had been lengthened in order to partially alleviate the noise factor.

[162] With respect to multi-family units, there was a shift in their location after the taking from an area near the lake to an area at the intersection of Nordel Way and the 84th Avenue connector near the new commercial site. Because of the shift in the location, the number of townhouses on the subject property increased from 44 before the taking to 57 after. Most of the townhouse units (38) continued to be valued at $12,000 while the 19 townhouses in the new location near the commercial site were valued at $11,000 per unit.

[163] As a result of the taking a new commercial site of 1.4 acres was created adjacent to Nordel Way, near the intersection with the 84th Avenue connector. Ms. Watson used six comparable sales of gas station sites that ranged in value from $9.43 to $15.09 per square foot. She concluded a higher value for the new commercial site in the range of $10.00 to $12.00 per square foot for the 61,000 square feet and used the low end of that range or $10.00 per square foot in her valuation.

[164] If these numbers are inserted into the Direct Comparison Approach model used by Ms. Watson in the before scenario, the total valuation after the taking was approximately $10,479,000 before any considerations for easements or noise or engineering costs.

[165] As we have already indicated, Ms. Watson initially used a before and after approach based on the Subdivision Residual Approach to measure the value of the taking. In her after valuation, she provided a 15% downwards adjustment for noise for the 79 fully serviced lots and 19 townhouse units that now backed onto Nordel Way or the 84th Avenue Connector. With respect to the servicing costs, Ms. Watson relied on Mr. Kruger's estimates that the taking would result in a decrease of $890,000 when adjusted for the subject property only. When she subtracted her after valuation from her before valuation she obtained a difference of only $311,114.

[166] Subsections 40(3) and (5) of the Act provide that the minimum valuation in a partial taking must be "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 adjustments to take into account land that is more or less valuable than the average value. Although Ms. Watson does not set out the calculation for this minimum valuation of the taking, based on her conclusion on the market value of the whole subject property before the taking, it would appear to be approximately $630,000 rounded. Ms. Watson's valuation of $311,114 for the taking using the before and after valuations was well below this minimum valuation. As a result of Ms. Watson's before and after valuation falling below the minimum valuation set out in section 40(3) she had to resort to section 40(3) and (5) for her final valuation. However, Ms. Watson did not use the straight percentage calculation found in section 40(3) because she was of the opinion that some of the land in the taking was more valuable and some was less valuable than the average land. She stated that the land taken closest to Phase 1 (Doncaster) and Phase 2 (Harrogate) of the development was more valuable than the average land value because, at the valuation date, development of these areas was more imminent. On the other hand, the land that was taken that was encumbered by various easements was less valuable than the average. She concluded a market valuation of $874,000 for the land taken based on the value of each lot and townhouse unit site that she said was lost in the taking, adjusted for the stage of development and for the different easements. Because she has resorted to section 40(3) and (5), there is no provision in this minimum market valuation of the taking for any injurious affection for such factors as noise.

[167] There is a huge difference in valuation for the land taken between the claimants at $4,188,000 and the respondent at $874,000. As we have described above, the two main reasons for this large difference are Ms. Watson's greater deferral for lack of approvals and Mr. Blanchette's adjustment for lot density. Because of these factors, Mr. Blanchette's valuation of the 11 acres of land taken alone is $2,364,000. Mr. Blanchette has added two sums to this market value for the effect of noise, $1,195,000, and the net extra engineering costs, $110,000 plus $519,000, as a result of the taking. While Ms. Watson also considered the effect of noise after the taking, it was more than offset by the more valuable commercial site in her valuation model and the $890,000 savings in engineering costs. As a result of resorting to the minimum provisions set out in section 40 of the Act, her final estimate of valuation omits the effect of noise and the engineering costs and depends only on market valuation of the single family lots and townhouse sites that she says were lost by the taking, adjusted for easements and discounting.

[168] Ms. Watson's final valuation of $874,000 was based on a summation approach in which she valued the units that she states were lost in the taking, adjusted for the presence of easements and ripeness for development. Although Ms. Watson's report was lengthy and detailed this final valuation was based on one small chart with little supporting narrative. A close review of the calculation reveals that it contained two significant mistakes. Her report clearly described that in the before and after layouts developed by Mr. Jorden and Mr. Kruger the number of townhouses on the subject property increased in the after layout from 44 units before the taking to 57 units after, a gain of 13 townhouse units. However, during the hearing one of the panel members pointed out that the chart, in which she calculates the final valuation of the taking, assumes 10 townhouse units have been lost in the after layout. After discounting, 10 lost units amounted to a mistake of $87,743 when, in fact, the gain of 13 units meant that $114,062 should have been deducted. These two together mean that the loss in market value was overestimated by $201,800 or almost 25%.

[169] A second mistake was that she applied the adjustments for land area affected by various easements ranging from 30% to 80% used in her Direct Comparison Approach to raw lots when only part of the raw lot was affected by the easement. As Ms. Watson explained in cross-examination the appropriate percentage adjustment for the different easements on serviced lots ranged from 2% to 10% and the appropriate percentage adjustment for raw lots ranged from 4% to 20%. This is much less than the 30% to 80% that she used in this final estimation of value. As a result the effect of the easement was significantly overstated and that part of the total valuation was understated by approximately $140,000. (It would have been greater but the discounting for time was not applied consistently.) This error for the effect of easements was in the opposite direction of the error concerning the alleged loss of townhouses, and as a result Ms. Watson's final valuation should have been approximately $60,000 lower or approximately $815,000 instead of just less than $875,000. This mistake was not identified at the hearing.

[170] We have already indicated that it is equitable if the more valuable uses of multi-family and commercial are not increased after the taking as they were by the respondent. But a taking of over 11 acres may decrease the amount of land for these uses. Before the taking we had 85 townhouse units on 8 acres. After the taking we conclude 78 townhouses on 7.4 acres is appropriate. Ms. Watson valued the 19 lots near the new commercial site at only $11,000 per unit because of proximity to the highway and the commercial site. This is less than any of her comparable sales for townhouses. Because the main factor in the proximity to the highway is noise, which we consider separately below, we apply the valuation of $14,000 to all of the townhouses. This provides a total of $1,092,000 undiscounted.

[171] The new commercial site after the taking is at the location of Nordel Way and the 84th Avenue connector. This location has a potential of being more valuable because of its proximity to the highway and the exposure to highway traffic, even though a potential purchaser would have some concerns about access and obtaining approvals. After reviewing the evidence, we are satisfied that a purchaser would allocate a higher value to this site.

[172] No statutory provisions that might have application to this issue were raised in the hearing. Nonetheless, we have considered the effect of sections 33, 40 and 44 in the context of a partial taking and the valuation of the remainder of the subject property after the taking. These sections provide:

In our view these sections must be read together. After the taking the intent of the legislation when read as a whole is to provide the owner with compensation for a reduction in the market valuation of the remaining land caused by the taking or the construction of the works for which the land was acquired. This would include such factors as a reduction in market valuation of the remaining land caused by noise from the highway for which the partial taking was made. Similarly, the legislation when read as a whole makes clear that any benefit the owner receives for the remaining land as a result of the taking or the construction of the works for which the land was acquired, is to be taken into account in the overall compensation. Although section 33 states that "an increase or decrease in the value of the land resulting from the development … in respect of which the expropriation is made" is to be ignored, we must construe "the land" in this section to mean something other than the remaining land after a partial taking. We conclude that the new commercial site as part of the remaining land with an increased value after the partial taking as a result of the Project, is to be taken into account when we are determining compensation. 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.

[173] We agree with Ms. Watson's valuation at the low end of her comparables of $10.00 per square foot for the 1.4 acre site which provides a total of $609,640 undiscounted.

[174] After the taking we have concluded that 7.4 acres of the subject property will be multi-family use and 1.4 acres will be commercial. The park area is slightly smaller at 6.8 acres since the subject property is now smaller. There also is an area near the school board property on Dunlop Road that is severed after the taking and cannot be developed. This severed area in the claimants' layout is somewhat larger at 1.6 acres than this area in the respondent's layout at 1.15 acres. We prefer the claimants' allocation because it did not depend on lots being placed on the school board property when we do not know if the hypothetical purchaser will be able to acquire it. Finally, we note that the allowance of 2 acres for the Browning Drive right of way is no longer necessary as Highway 91 has made this right of way unnecessary. This, like the more valuable commercial site discussed above, is a factor that is properly taken into account when determining the compensation to which the owner is entitled. As a result we conclude that there are 118 acres available for single family lots.

[175] Before the taking we used a density of 4.2 lots per acre. This density took into account the lack of either an engineered or an approved layout. After the taking, both appraisers lengthened between 79 and 112 lots to partially mitigate the effect of noise. This would result in a slightly lower density compared with before the taking. However, we no longer have an engineered layout and we conclude that it is more equitable if the density of the lots is the same after the taking as before and consider an adjustment for noise separately. As a result we conclude that a density after the taking of 4.2 is appropriate.

[176] With 118 acres at a density of 4.2 we estimate a total of 496 single family lots (rounded up) after the taking. At $28,000 per lot this provides a valuation of $13,888,000 undiscounted.

[177] Similar adjustments for easements need to be made in the after valuation as in the before. After reviewing the layouts and the percentage reduction for lots on each type of easement, we estimate that an adjustment of $300,000 is appropriate after the taking. Since the taking included portions of the electrical easements, fewer lots are effected by easements after the taking and the relative size of this adjustment is less than the adjustment for easements before the taking.

[178] After the taking an adjustment of 10% for size and the uncertainties and risks associated with size, including the increased time frame to obtain revenues from the lots, is again appropriate.

[179] Both appraisers adjusted the lots in their layouts that bordered Nordel Way and the 84th Avenue connector for noise. Mr. Blanchette purported to make an 18% adjustment to the value of each of 112 raw lots. In fact, his adjustment was close to 35% because he stated the effect on raw lots should be higher than the percentage based on serviced lots, because the costs of developing the raw lot would be unaffected by noise. Ms. Watson made a 15% adjustment to the 79 serviced lots and to 19 of the townhouse units that backed onto Nordel Way and the 84th Avenue connector in her Subdivision Residual Approach. She stated that she also made a 10% adjustment for those lots that bordered two other arterial routes, 84th Avenue (in the before scenario only) and Dunlop Avenue (in the before and after scenario). She did not provide us with the number of lots and townhouse units that were adjusted for noise with respect to these other arterial roads.

[180] Mr. Blanchette's total adjustment for noise on the raw lots was $1,195,000. One of the reasons for this number being so high is that although Mr. Blanchette eventually discounted his before and after valuation for one year, he did not discount the valuation for noise at all even though it was calculated on the basis of a percentage effect on the value of raw lots.

[181] Both appraisers based their adjustments for noise on the sales of lots in the Doncaster and/or Harrogate subdivisions. In 1987 Doncaster lots that backed onto Nordel Way sold for an average of 16% less than interior lots sold in that year but in the other two years the decrease was less than 10%. When the sale prices for the Harrogate subdivision were reviewed, the effect of noise was much diminished. Harrogate lots that backed onto Nordel Way sold for an average of only 2 and 3% less than interior lots in both 1988 and 1989. Dunlop Road also had an effect on lot sale prices although this too was diluted in the Phase 2 Harrogate subdivision. Mr. Blanchette used only the evidence from the Doncaster subdivision and ignored the more equivocal evidence from the Harrogate subdivision. We note that the Doncaster lots that back onto Nordel Way all contain an easement for the B.C. Electric right of way as well as a GVRD trunk watermain, both of which likely had a negative impact on the market value of these lots. These two rights of way were not present in the Harrogate subdivision. This evidence from the Doncaster and Harrogate subdivisions were for serviced lots, and although there is no data for raw lots we would expect the effect to be higher.

[182] We were also provided with two reports from acoustical engineers as to the effects of traffic on Nordel Way on the noise levels at various locations on the subject property. These reports indicated that the maximum acceptable noise level in a back yard was about 55dBA based on 24 hour noise levels. Before the construction of the Project in 1980, properties adjacent to the subject property recorded background noise levels in the range of 53 to 56 dBA. After the Project, noise levels beside Nordel Way or the 84th Avenue connector were between 70 and 75 dBA. However, noise levels in the backyards of Doncaster lots backing onto Nordel Way, but with a berm, were recorded at 55.8 and 56 dBA. Areas adjacent to the Project but without a barrier recorded noise levels of 60.9, 61, and 69 dBA at a distance that approximates the exposed face of a residence. Noise levels were higher on the pedestrian walkway. The barriers appeared to lower the noise level between 5 and 10 dBA. One of the reports concluded that barriers would effectively reduce the noise level and that further analyses would be necessary before development to consider setbacks and the relative elevations of the roadways and residences.

[183] This evidence shows that Mr. Elsom's work on creating berms has decreased the effect of noise. We also note that much of Nordel Way is below grade and in a cut, which also helps to reduce the effect of noise. We were not provided with any evidence as to how much of the subject property is protected by berms. Given the sketchy evidence on the extent of the berms, together with the minor impact of noise on the sale prices for Doncaster and Harrogate, and the contributory effect of the easements on the sale prices in Doncaster, we conclude an adjustment of 20% for raw lots that back onto Nordel Way and 10% for those raw lots that front onto arterial roads.

[184] Since we no longer have detailed layouts, it is more difficult to say how many lots would be impacted by the noise. However, because the commercial site would be located on Nordel Way and the 84th Avenue connector, as well as some of the townhouse units, the total number of single family lots that are effected would be closer to Ms. Watson's 79 than Mr. Blanchette's 112. Of course, these townhouse units adjacent to Nordel Way would also be affected by noise. We also agree that the impact of noise from Nordel Way and the 84th Avenue connector after the taking should be partially offset by the impact of noise on those lots and townhouses fronting onto 84th Avenue before the taking. (We assume that the number of single family lots fronting onto Dunlop Road is approximately the same before and after the taking.) Doing the best we can with the evidence available, we estimate that the net adjustment for noise, after appropriate discounting is $375,000. We note that this is a net adjustment that takes into account the effect of noise on those lots and townhouses on 84th Avenue before the taking.

7.4.3.5 Servicing costs and additional engineering costs, including an overpass

[185] The claimants say that the net servicing costs applicable to the subject property with respect to the site layouts are approximately $110,000 greater after the taking, then before, while the respondent claims that they are approximately $890,000 less. There were also claims for various extra items such as street lights on Nordel Way which are discussed below. The main difference in engineering costs was that in the after scenario, the Ministry had installed a storm sewer as part of its construction of Nordel Way with seven or eight connections for any future development on the subject lands. Mr. Buchan represented the claimants when this storm sewer was constructed and ensured that it would have sufficient capacity for any anticipated future development. There were also some sleeves or ducts installed under Nordel Way to accommodate future installation of such services as water mains and cables.

[186] Mr. Buchan provided the engineering evidence for the claimants. He calculated the engineering costs for his layouts before and after the taking using some of the actual costs for the Doncaster and Harrogate subdivisions constructed in 1986 and 1987. He estimated the expenses per metre for two different types of roads in the Doncaster and Harrogate subdivisions and then applied these estimates to the different types of roads in his site layouts. He assumed average pipe sizes in this exercise. While the total cost after the taking was less, when it was expressed per lot, the cost per lot after was more than three hundred dollars greater than before the taking (out of total costs of approximately $10,000 per lot). Mr. Blanchette calculated the additional servicing costs by multiplying this extra cost per lot after the taking by the number of Delsom lots after the taking for a claim of $218,592 (assuming no overpass).

[187] Mr. Buchan also attempted to allow for the benefit to the claimants as a result of the Ministry installing a storm sewer under Nordel Way with connections for any future development. Mr. Buchan calculated the cost for Mr. Elsom to install this storm sewer in both the before and after situation. He estimated Mr. Elsom's percentage use of this storm sewer after the taking and concluded a net benefit of storm sewer at $108,594. He deducted this benefit from the extra engineering costs that he thought the claimants would incur as a result of the taking. Restricting the extra engineering costs to the $218,592 incurred with respect to the site layouts, and deducting the benefit as a result of the storm sewer leaves a net engineering cost of $110,000.

[188] Mr. Kruger, the engineer for the Ministry, prepared conceptual servicing plans for the site layouts both before and after the taking. The total servicing costs after the taking decreased approximately one million dollars, or approximately $890,000 with respect to the share of the overall costs allocated to the subject property. The cost per lot was approximately $11,000 per lot with the cost after being approximately $700 per lot less than before. These costs were used by Ms. Watson in the Subdivision Residual Approach as part of the estimate of market value for the land. This savings in engineering costs after the taking was one of the reasons that Ms. Watson ended up discarding the before and after approach and resorting to the minimum valuation in section 40(3) of the Act.

[189] We recognize that having rejected portions of both appraisers' evidence, our valuation is not based on an engineered layout. Nonetheless, in our opinion it is possible to make some general findings on the engineering costs.

[190] We heard six days of engineering evidence. Both parties demonstrated some errors or omissions in the other side's engineering evidence, which is not surprising in an estimate of engineering costs for a hypothetical 150-acre subdivision. We agree with the Ministry that a model based on conceptual servicing plans showing all the services before and after the taking, including the storm sewer under Nordel Way provides a better estimate than a model that assumes average costs per metre of road for average sized pipes based on partial costs of the Doncaster and Harrogate subdivisions plus an estimate of the cost of a developer constructing the storm sewer and off-setting part of this cost. In the absence of an engineered layout we cannot rely on Mr. Kruger's estimate of the decreased engineering costs per lot after the taking. However, having accepted Mr. Kruger's conceptual servicing approach as preferable, and recognizing the presence of the storm sewer in Nordel Way we conclude that there would be some cost savings in the engineering costs per lot after the taking.

[191] Mr. Buchan provided evidence for four extra items that the claimants asserted would be required and should be included in the market valuation after the taking. These were as follows:

Street lighting on Nordel Way	$145,800	81 x $1,800
Acoustic fencing	$396,060	3,220m x $123/metre
L 200 improvements	$ 35,860
84th connector acceleration lane	$ 24,580

	$602,300
20 % engineering and contingency	$120,460

Total	$722,760	amended to $519,000

The claim for 81 street lights were for the entire length of Nordel Way and the 84th Avenue connector. Similarly the claim for 3,220 metres of acoustic fencing was the length to line both sides of Nordel Way and the 84th Avenue connector. During argument, however, the claimants conceded that there was some street lighting already installed on Nordel Way and that there were areas where acoustic fencing could not be required. As a result they amended their claim for street lighting to 55 lights and for acoustic fencing to 2,220 metres, which with adjusted contingency and engineering, (mistakenly omitted in the final submissions but included in earlier estimates of Mr. Buchan) comes to a total of $372,060. The third claim was for the cost of improvements to the existing access road to a large portion of the subject property known as the L-200, which was built by the Ministry at the time of the taking. Finally there was a claim for the cost for an acceleration/deceleration lane on the 84th Avenue connector which the claimants said would be required by Delta. When these four claims were added together as amended and the 20% engineering and contingency added, the total final claim was reduced to $519,000.

[192] The Ministry submitted that in 1985 no extra street lights and no acoustic fencing would have been required. None had been required when Doncaster and Harrogate were subdivided. Any extra costs for the L-200 should be included in the after engineering costs and should not be claimed as a separate extra cost. There was insufficient evidence to support a claim for an acceleration lane on the 84th Avenue connector. As a result it was the Ministry's position that no costs for any of these four items should be awarded.

[193] The evidence that street lights might be required is from the claimants' 1992 subdivision application to consolidate the portions of Lots 5 and 6 that were severed by the 84th Avenue connector and Nordel Way (in the vicinity of the Chevron gas site). We note that the relations at this time between Mr. Elsom and Delta were strained. Dr. Collier, the Municipal Administrator for Delta, testified that there was an ongoing debate on the issue of street lights and whether they could be requested for a road with limited access such as Nordel Way (except in the region of the intersection of Nordel Way and the 84th Avenue connector). During the hearing it was established that there were some street lights installed at the upper end of Nordel Way but no one was clear about who had installed them and when.

[194] There was no requirement for street lights on Nordel Way with respect to applications for subdivision for Doncaster, Harrogate, or for the subdivisions built on Lot 112 and 666. In our opinion, a hypothetical purchaser would not have considered there was any risk for the cost of installing street lights on Nordel Way in 1985. These items were claimed in the alternative as a disturbance damage or business loss under section 34 or 40. A review of the wording of these sections together with all of the evidence indicates that the likelihood of a developer of the subject lands being required to install street lights on a road with limited access is very uncertain. As this board stated at para 70 in Bayview Builders Supply (1972) Ltd. v. British Columbia (Minister of Transportation and Highways), (2001), 75 L.C.R. 95 (B.C.E.C.B.) awarding costs as disturbance damages for a possible event that may never occur is speculative.

[195] The claim for the cost for acoustic fencing is based on some fencing being required on Lot 112 when it was subdivided in 1991. We do not have the documentation between Delta and the subsequent owner of that property as to the details of precisely what was required, although we understand from Mr. Kruger's evidence that approximately half the border with Nordel Way or 100 to 110 metres now has acoustic fencing. No acoustic fencing was required on subdivision applications for Doncaster, Harrogate, or for the subdivision built on Lot 666. There is also no acoustic fencing adjacent to Marlborough College, whose grounds border Nordel Way.

[196] We do agree that a hypothetical purchaser would have had concerns about the effect of noise from Nordel Way on the project. However, we have adjusted the market value of those lots for the effect of noise in the after situation. There is a risk of double compensation if the cost of acoustic fencing, the purpose of which is to mitigate noise, is awarded when a decrease in market value for those same lots has been awarded assuming no acoustic fencing. See Patterson v. British Columbia (Ministry of Transportation and Highways) (1994), 53 L.C.R. 88 (B.C.E.C.B.); aff'd (1997), 62 L.C.R. 89 (B.C.C.A.) where a number of cases involving an overlap between reduction in market value and disturbance damages are reviewed. In most of the cases where the cost of landscaping to mitigate noise from a highway was awarded there was no award for reduction in market value. In one Ontario case, Adams v. Minister of Transportation and Communications (1978), 16 L.C.R. 183 (Ont. L.C.B.); var'd 20 L.C.R. 24 (Ont. Div. Ct.), the cost for the landscaping to mitigate the noise as a result of the taking was allowed by the board, but then that part of the reduction in market value due to the noise was deducted. In this case we have made an award for a reduction in market value as a result of noise, and this sum is greater than the claimants' entire claim for acoustic fencing (as amended). We note that we were provided with evidence that construction of barriers would be effective in reducing the noise levels, but we were not provided with the evidence as to the length of Nordel Way and the 84th Avenue connector that does not have berms and might benefit from acoustic fencing. In summary we conclude that making an award for acoustic fencing in these circumstances would be double compensation, although we recognize that a limited amount of acoustic fencing may be required.

[197] With respect to the costs for the acceleration lane on the 84th Avenue connector, the only evidence that this cost might be incurred was again from the 1992 application to consolidate portions of Lot 5 and 6 that had been severed by Nordel Way and the 84th Avenue connector. The Approving Officer enclosed a memo from the Development Engineer indicating that any access off the north side of the 84th Avenue connector might require an acceleration or deceleration lane. In our opinion there was no reason in 1985 for the hypothetical purchaser to consider the risk of this cost. Mr. Buchan has estimated the costs to provide the acceleration lane. However, none of the subdivision layouts, including the most recent layout that had been submitted as part of an application in 2001, showed any access road from the north side of the 84th Avenue connector. Accordingly it is unclear to us what purpose an acceleration/deceleration lane on the 84th Avenue connector would have.

[198] Finally, the cost to improve the L-200 is for the road that was a replacement access to the remainder of 84th Avenue that had been blocked off at 108th Street. When subdivision development occurred adjacent to L-200 or to 84th Avenue, our understanding was that the developer would face costs to upgrade both of these roads with such things as curbs and gutters, underground services, and new sewer pipes. It was not made obvious to us that any upgrading of the L-200 was in a different order of magnitude than the upgrading required on 84th Avenue. In any event it is an engineering cost that should be included in the layouts for the after scenario. As discussed above, Mr. Kruger has provided engineering costs based on a before and after scenario and the costs to upgrade L-200 or its equivalent were presumably incorporated in incorporated in the after scenario. We have accepted Mr. Kruger's general approach to engineering costs and concluded that the servicing costs per lot would be less after the taking. We see no reason to award any extra cost to improve the L-200.

[199] The claimants have claimed for the cost of constructing an overpass and have used layouts that offer an overpass as an alternative. The respondent has submitted that an overpass would not be required. Ms. Watson stated that she relied on Mr. Jorden's conclusion that an overpass would not be necessary.

[200] At the time of taking in May 1985, the evidence indicated that an overpass over Nordel Way was being discussed. As an alternative to an overpass, connection for local traffic was contemplated by an extension of the 84th Avenue connector through to Dunlop road. The Ministry was in favour of this option but it was opposed by local residents who preferred a four-way intersection further east at Brooke Road and 84th Avenue. As a result of public opposition Delta vetoed the extension of the 84th Avenue connector. At this time Delta was on record as supporting an overpass as a means to resolve local traffic issues. The overpass featured in the settlement negotiations between Mr. Elsom and the respondent, with the Ministry at one time agreeing that as part of a settlement they would fund the construction of an overpass but not the connecting roads. However, no settlement was ever reached and the Ministry withdrew its conditional offer to pay for an overpass. Traffic studies done a number of years later de- emphasized the need for an overpass and there was evidence that Delta staff would not now take any position on the overpass. The issue would be referred to Delta council and there was evidence that existing residents would likely oppose an overpass.

[201] In our opinion the significant date in this matter is the date of taking and what would be in the mind of a hypothetical purchaser of the subject property after the taking. Mr. Jorden's conclusion that an overpass would not be required was based on hindsight using evidence long after the taking and as a result we cannot rely on it when we are considering the effect of the risk of an overpass on the market valuation. (We note that his conclusion would be of assistance if we were considering the overpass as an item of disturbance damages under sections 34 or 40.) In 1985 we think that any purchaser would have considered that the requirement of an overpass was a possibility. On the other hand the opposition of the existing residents to the extension of the 84th Avenue connector, and to any increase in traffic in the Sunbury and Canterbury neighbourhoods was already known. This had been the main reason why Delta had delayed in establishing the connector route through to 84th and 88th Avenue for so long. A review of the documents shows that in 1985 Delta was open to various options for local traffic connections if the overpass did not get built by the Ministry. We conclude that a potential purchaser would recognize that there was a risk for some financial contribution to an overpass, but that there were other options being considered.

[202] The fact that the Ministry offered to pay for an overpass as part of a settlement negotiation when no settlement was ever achieved makes this offer irrelevant.

[203] We have found that the servicing costs for the hypothetical general layout after the taking would be less because of the storm sewer and connections under Nordel Way. Nonetheless, we conclude that the hypothetical purchaser after the taking would see the risks for the subject property with respect to the potential engineering costs, including the risk of some contribution to an overpass, as being on balance somewhat greater than before the taking. We estimate that a potential purchaser would allow $500,000 as a net risk factor for engineering and servicing costs, after taking into account the benefit of the storm sewer under Nordel Way.

[204] As in the before valuation everything but 48 single family lots should be deferred three years at 11%. Thus the valuation for after the taking is as follows:

48 single family lots at $28,000			=	$ 1,344,000 448
single family lots at $28,000	=	$12,544,000
78 townhouses at $14,000	=	$ 1,092,000
60,964 sq ft commercial at $10.00/sq ft	=	$ 609,640

Subtotal		$14,245,640
Deferred three years				$10,416,411
Subtotal				$11,760,411
Easement Adjustment				– $ 300,000
Size adjustment				– $ 1,146,041
Noise adjustment				– $ 375,000
Servicing and engineering adjustment				– $ 500,000

Total				$ 9,439,369

[205] This valuation after the taking of $9,439,400 rounded yields a value of $69,643 per acre rounded for 135.54 acres.

[206] When we deduct the after value that we have concluded from the before value the difference is $10,967,400 - $9,439,400 = $1,528,000 rounded. This is more than the minimum valuation set out in the equation found in section 40(3) of $855,000. We conclude $1,528,000 as the compensation payable to the claimants for the market value of the lands taken and the reduction in market value to the remainder. We note that the claim for reduced lot yield is included in this compensation amount and nothing additional is to be paid on account of this item.

[207] Both parties agreed that the 1.32 hectares (3.27 acres) of ravine land that was taken in 1985 had little or no development potential. Mr. Blanchette, the claimant's appraiser, used five sales of comparable properties most of which were not developable because they were heavily encumbered by rights of way. These sales ranged between $2,167 and $5,000 per acre and Mr. Blanchette estimated a market value for the ravine land of $4,500 per acre. Ms. Watson, the respondent's appraiser, relied on six sales of farm property and farm property acquired for parks that ranged in value from $6,632 to $10,744 per acre. She valued some of the land taken at $6,000 per acre and some of it that had no access or was both encumbered with rights of way and had steep topography at $3,000 per acre. Mr. Blanchette's total value of the ravine land taken was $15,000 rounded (3.27 acres x $4,500 /acre = $14,715). Ms. Watson's was $13,890.

[209] The second taking by the respondent of narrow strips bordering a portion of Nordel Way and the 84th Avenue Connector occurred in August 1995. Mr. Blanchette relied on Mr. Buchan, the engineer for the claimants, who calculated this taking at 0.58 hectares (1.436 acres). Mr. Blanchette used the Direct Comparison Approach and reviewed 10 sales of developable land in late 1994 and 1995. After adjustments for various factors Mr. Blanchette concluded a market value of $315,000 per acre, resulting in a market value of the land with the embankments at $411,000 after discounting for one year for re-zoning.

[210] The respondent's pleadings state that the second taking gave legal effect to a "de facto" expropriation caused by the claimants building berms outside the right of way that was taken in 1985. In the alternative the land that was the subject of the second taking had no value in 1995 and the respondent pleads section 40(5) of the Act.

[211] Ms. Watson stated that this further taking was 0.55 hectares (1.36 acres) to complete the taking to the top of the cut. Her figures were based on the plan by the land surveyor dated August 3, 1995 that provided the legal basis for the taking. This plan and two reports in which Ms. Watson valued different parts of this taking, were entered as exhibits only during cross-examination. In these reports Ms. Watson valued the lands taken in the second expropriation as of September 29, 1995. She found that the land had no market value in September 1995 because the claimants had effectively lost all rights and use of the land ten years earlier in May 1985 when the embankments were created. Ms. Watson confirmed that she had been instructed to assume that the lands had been effectively expropriated in 1985, at the time of the first taking.

[212] As described above, the claimants, without any consultation, constructed embankments on either side of the right of way some months before the first taking. The claimants had been provided with detailed plans and used these plans to dig a trench up to 20 feet deep for Nordel Way as an attempt to mitigate the impact of the roadway on future development. They later submitted a bill for this work to the respondent. The embankments bordered the proposed right of way but were located outside it. The first taking eventually occurred in accordance with the existing surveys and the Ministry commenced construction of the Project. As early as 1986 there was evidence that Mr. Elsom wanted the boundaries of the taking expanded as he had no wish to own the slopes of the embankment beside Nordel Way. These embankments were seeded and there was an issue as to who was going to cut the grass on the slopes. Although Mr. Elsom wanted the fence to be placed at the top of the slope the Ministry installed the fence near the boundary of the right of way at the base of the slope. The dispute about whose responsibility it was to maintain the grass on the sides of the embankments was ongoing. At some point Mr. Elsom moved the fence erected by the Ministry to the top of the embankment. There was evidence that Mr. Elsom offered to transfer the slope for $1.00. There was also evidence that as part of the settlement negotiations the Ministry took the position that the second taking should be valued as of the date of the first taking in 1985 when the property had effectively been lost or expropriated from the claimants. However, no settlement was reached on this matter and in September 1995 the narrow strips of land bordering Nordel Way that formed part of the embankment constructed in 1985 were expropriated by the Ministry.

[213] The first issue is the date of valuation. Counsel did not refer us to any statutory provisions or authorities to assist us in deciding this issue. Section 32 states that the land should be valued as if "it had been sold at the date of expropriation". The date of expropriation is defined in section 29 to mean "the date the vesting notice is filed in the land title office under section 23". We understand that the vesting notice was filed in August or September 1995.

[214] Although the formal taking occurred in 1995, the land's use was altered by the claimants' own actions, when, in anticipation of the first taking in 1985 and the construction of the Project, they constructed the cut for Nordel Way so that the embankments were located outside the first right of way. The correspondence indicates that both the Ministry and Mr. Elsom contemplated that there would be a further taking to include these embankments soon after 1985 but the matter failed to settle and for some reason the taking was delayed until September 1995.

[215] The issue is whether the date of the second taking was in May 1985 when the respondent alleges that the narrow strips were the subject of a de facto expropriation or, in the alternative, was in September 1995 when the vesting notice was filed. The facts in this case suggest that a valuation in May 1985 might be appropriate. However, given the unambiguous wording of sections 29 and 32 of the Act, we conclude that we must value the lands taken in the second taking as of the date that the vesting notice was filed in the land title office, not the date that the claimants created the embankments. We agree with the reasoning in Premanco Industries Ltd. v. British Columbia (Minister of Environment, Lands and Parks) (2000), 71 L.C.R. 6 (B.C.E.C.B.) at para 256 where this board refused to interpret section 46(4) in a way that required a rewriting of the statutory provision. Lacking specific evidence of the date when the vesting notice was filed, we deem the date to be September 1, 1995.

[216] The next issue is whether the land in the second taking was valueless in 1995 because it consisted of embankments and berms on either side of Nordel Way. Again counsel did not refer us to any statutory provisions with respect to this issue. We note that section 32 of the Act says that the "market value of an … interest in land is the amount that would have been paid for it if it had been sold at the date of expropriation". Section 33(f) of the Act provides that when "determining the market value of the land account must not be taken of an increase or decrease in the value of the land due to development of other land that forms part of the development for which the expropriated land is taken (emphasis added)."

[217] In 1995 the strips of land in the second taking were worth less as a result of development of other land, namely the land in the first taking, in the construction of Nordel Way and the 84th Avenue connector. As a result of section 33(f), we are to ignore this decrease in value to the land in the second taking as a result of the development of the Project and its proximity in the course of valuing this land. We are also to ignore the physical nature of the land taken. The embankments were created by the claimants in the course of making the cut for the development of Nordel Way. Before the construction work, the land was development land similar to the rest of the subject property. Section 33(f) requires us to reject the respondent's submission that this land that forms part of the embankments bordering Nordel Way and the 84th Avenue connector was valueless in 1995.

[218] There is again a discrepancy in the areas reported for this second taking. Ms. Watson's two reports on the second taking state that the total taking was 5,799 square metres (2,163 square metres plus 3,636 square metres) which is equivalent to 0.58 hectares or 1.43 acres, the approximate size of the second taking as estimated by Mr. Buchan. However, in Ms. Watson's main report she states that the second taking is 0.55 hectares (1.36 acres). While there was no discussion of this discrepancy in the evidence or submissions, an examination of the land surveyor's plan and one of Ms. Watson's reports on the second taking shows that one parcel of land (Lot A) was not part of the subject land in 1985. When the area for the second taking from this lot is deducted, the total taking from the claimants' land is 5,496 square metres which is equivalent to 0.55 hectares or 1.36 acres as stated in Ms. Watson's main report. But by 1995 when the land that was the subject of the second takings was actually expropriated, Lot A was occupied by the private school on land owned by the claimants, which is presumably why it was included in the land surveyor's plan. We have concluded that the effective date of the taking was in 1995 and as a result we conclude that the taking was 0.58 hectares or 1.43 acres.

[219] Mr. Blanchette provided the only evidence on market value in 1995. He provided details of 10 sales of residential development land in North Delta and Surrey ranging from $174,292 to $683,289 per acre. He made adjustments that he stated were primarily for location, but also for such factors as topography, shape, size and servicing. After adjustments his range in value per acre was between $217,865 and $341,644, and after elimination of the two sales at either end, the range was between $298,000 and $329,000. He concluded a value of $315,000 per acre, which for 1.436 acres provided a valuation of the second taking of $452,340 or $411,000 after discounting for one year.

[220] We found Mr. Blanchette's descriptions of these sales lacking in detail and he offered little justification for his adjustments. A 10% downward adjustment for size was made for one sale, for example, while nothing was said about adjusting five other even smaller parcels for size. A 50% downwards adjustment for servicing was made for one sale with no indication of the servicing requirements or their costs. Another sale was adjusted for location and physical features with no explanation about either factor. It is of interest that he made a 25% adjustment for a hydro easement for one of these comparables, when no adjustment had been made for easements on the subject property in his before valuation. Mr. Blanchette's adjustments result in a relatively tight range of estimates of value, but we were provided with little reasoning to support them. We also note that little, if anything, was said about the zoning or stage of subdivision approval that was in place for any of the comparables. At the time of the second taking, the subject property still did not have any approvals in place, (but for the Doncaster and Harrogate subdivisions, and Lot 112 that had been sold).

[221] One of the ten comparables discussed by Mr. Blanchette was the sale of Lot 666 that was part of the subject property. The original sale price negotiated in July 1995 was $800,000, but an inducement of $50,000 was later paid to extend the closing until September 1996. At 4.59 acres the initial sale at $800,000 represented $174,292 per acre. Mr. Blanchette made a 25% upwards adjustment because of the topography and the proximity of Nordel Way to several of the lots. After his adjustment this sale yielded a price of $217,865 per acre.

[222] This sale of Lot 666 was actually part of the subject property and the sale was negotiated at the relevant time. There was no need to make adjustments for proximity (or lack of proximity) to commercial services and recreational amenities that Mr. Blanchette stated were necessary for most of the comparables. We agree that this sale needs an adjustment for the steepness of the site and proximity of Nordel Way (which is to be ignored in the second takings). However, we note that even with this adjustment, the sale price per acre of $217,865 is lower than any of Mr. Blanchette's other 1995 comparables.

[223] Because the subject property still did not have any approvals in place in 1995, the price per acre for the subject property has to be discounted in a similar manner as for the first taking: a deferral for obtaining approvals and some adjustments for both size and easements, although the overall adjustments would be less for this somewhat smaller remainder in 1995. When we discount Mr. Blanchette's 1995 valuation of $315,000 per acre, based on comparables other than Lot 666, for time to obtain approvals as well as size and easements we obtain a price of approximately $205,000 per acre. This is within the range of the actual sale price of Lot 666 at $174,292 per acre and Mr. Blanchette's adjustment of this price for steepness and proximity to the Project (but not for approvals or size or easements) at $218,000 per acre rounded.

[224] We conclude an estimation of value for the subject property of $210,000 per acre which provides a value for the second taking of 1.43 acres on September 1, 1995 of $300,300.

[225] There is a claim for the value of a storm sewer easement with respect to Lot 112. The Ministry took a sewer easement in 1985. The claimant Whitechapel Estates Ltd. sold Lot 112 to Whistler Investments in August 1991. Mr. Elsom says that he reserved the right to claim compensation, although we were not provided with any documentation such as the interim agreement that confirmed this arrangement. The claimants did not provide us with a specific amount for this claim, but we assume that they would calculate it by multiplying the area of the easement times their valuation of the subject property in 1985 of $160,000 per acre.

[226] Counsel for the respondent conceded that compensation for this taking was payable. The statutory right of way plan showed the taking for the sewer easement to be 0.1061 hectares (0.26 acres or 11,421 square feet). After the hearing, counsel for the respondent made supplementary submissions in which he said that $25,012 for the storm sewer easement was appropriate compensation. This sum was based on Ms. Watson's evaluation per lot, the number of lots subsequently developed by the purchaser, times the ratio of the area of the storm sewer easement and the area of Lot 112 after the taking.

[227] We have valued the subject property at $28,000 per lot. Both Mr. Blanchette and Ms. Watson agreed that Lot 112 was 8.1 acres before the first taking for Nordel Way and that the first taking was 0.188 acres (760.8 square metres) leaving 7.9 acres after the taking. We note that the respondent's submission includes 100% of the land value for the easement. After considering our lot valuation, deferral for time to obtain approvals for Lot 112, and the revised size of Lot 112 after the taking for Nordel Way, we conclude that $25,000 is appropriate compensation for the storm sewer easement.

[228] Mr. Blanchette's calculation of the loss due to delay was made by determining the cash flow from the sales of 635 lots, with and without the taking, using a flat rate of $30,000 cash from each lot sold. He assumed that the 1979 application based on the Hanson-Erb report was refused because of the Project and that development of the Phase 1 Doncaster subdivision and the Phase 2 Harrogate subdivision were not able to proceed because of the Project until 1986, some six years later. In making his calculations Mr. Blanchette estimated that, if there had been no taking, 170 lots would have been sold before the taking and that the balance of 465 lots would have been sold between 1986 and 1993. He estimated that, with the taking, the same 635 lots could have been sold between 1986 and 1999. Both of these scenarios assume a before situation with no Project and 635 lots. He based his cash flow analyses on $30,000 as the price paid per raw lot without any consideration of development costs or developer profit. He added the cash flow that had accumulated by 1985 to the present value of the two streams of cash flow after 1985, as of the date of taking in May 1985, using a discount rate of 10% per annum, which he thought was appropriate for 1985. The $5,486,531 difference in the present values of the cash flows represented his estimate of the cost of delay.

[229] Counsel for the corporate claimants submitted in argument that Mr. Blanchette's estimate of the delay may be an underestimate since it did not take into account the lack of development from 1985 until the date of the hearing. As an alternative to the delay claim advanced by Mr. Blanchette, the claimants submitted that a delay claim could be based on Lofranco v. Metropolitan Toronto (1982), 25 L.C.R. 11 (Ont. L.C.B.), a case in which there was a partial taking and a temporary construction easement on the remainder. The Ontario Board accepted that as long as the temporary construction easement was in effect, development of the remainder was sterilized. Compensation for the temporary easement was awarded on the basis of the market value of the remainder invested at 10%, compounded monthly, for the length of the temporary easement. Counsel for the corporate claimants in the present case estimated the market value of the entire subject property after the taking at $21,712,000 (135.7 acres x $160,000 per acre). He assumed that this was invested at 10% for five years for an approximate value that he reported at $10,000,000, but which was, in fact, approximately $13,000,000 or for 10 years for an approximate value of $34,000,000, or for 15 years for an approximate value of $68,000,000.

[230] Mr. Elsom based his delay claim on the delay of the Doncaster Phase 1 and the Harrogate Phase 2 subdivisions only. He assumed that Doncaster was delayed for three years from June 1983 to June 1986 and that Harrogate was delayed for four years from June 1985 to July 1989. He assumed that the value of the subject property at $160,000 per acre was halved after the taking and using the principle in Lofranco he made a calculation using the market value of each subdivision after the taking that he purported to invest at 10% for the three and four year delays respectively that provided him with a total for both subdivisions of $7,094,400. He asserted that this sum was his claim for damages for the development freeze.

[231] The respondent presented a model with a number of assumptions provided by counsel to show the effect of delay on developer's return from the Project. Ms. Watson did the initial work on the model but it was subsequently modified by another appraiser with particular expertise in spread sheet computations, David Aberdeen of D.A. Aberdeen & Associates Ltd. The final model addressed the development of the Phase 1 Doncaster and Phase 2 Harrogate subdivisions only. It assumed a two year delay period in the development of these two subdivisions as a result of the Project: in the first scenario, the Doncaster subdivision started in 1983, with a one year deferral to obtain rezoning and development approvals (no delay) and in the second scenario, it did not start until 1985, with the same one year deferral (delay). In both cases, it is assumed that the Project is in place and there is the same number of lots in the Doncaster and Harrogate subdivisions that in fact were developed after the taking. It is further assumed that the developer owned the land with no debt, (as Mr. Elsom did) but that the servicing and subdivision costs would be 100% financed at actual interest rates for each year provided by Ms. Watson. The model used current dollars and assumed that the two subdivisions were developed, with year by year servicing costs, development cost charges, and municipal taxes provided by Ms. Watson. Absorption rates and lot sale prices were also provided by Ms. Watson. The model assumed that the net cash from the development and sale of these two phases would be used to repay bank loans taken out to finance the servicing costs and other expenses and that the excess would be invested in successive five year Guaranteed Investment Certificates until December 31, 2000. Ms. Watson provided the relevant interest rates for the GICs.

[232] Mr. Aberdeen calculated the total returns from these two phases to December 31 2000, including interest, to be $10,882,223 assuming no delay with development starting in 1984, and $10,307,861 assuming a two year delay with development starting in 1986. The respondent submitted that the damages for delay should not be any greater than the difference in these two sums of approximately $575,000.

[233] The claimants state that the development of the entire subject property was delayed by the Project commencing in 1979 when the application based on the Hanson-Erb report was rejected by Delta. According to the claimants, but for the development of Doncaster and Harrogate (and the sale of Lot 666 and 112), delay of the rest of the subject property was ongoing at the date of the hearing. The respondent states that the delay was restricted to a two year delay from 1984 until 1986 in the development of the Doncaster and Harrogate subdivisions only.

[234] In considering whether there was any delay we must review the evidence of what in fact happened with respect to development of the subject property. While market value is measured on an objective basis as the sale price reached between a hypothetical purchaser and a hypothetical seller, disturbance damages are based on what financial losses the claimants have actually suffered. As a result we use hindsight and the actual events that have occurred in assessing these claims. The onus is on the claimants to prove that there has been a delay that is directly attributable to the taking or that results from the construction or use of the Project. The Ministry is not responsible for other factors that may have caused delay in development of the subject property. See para 165 of Sequoia Springs.

[235] We have previously described the application based on the Hanson-Erb report as an ambitious development that included commercial development, a hotel, offices, public service buildings, and over 150 multi-family units in addition to single family development around the perimeter. Although one of the reasons Delta rejected the application was that there were too many unknowns because of the projected new bridge, Delta also stated that the application did not reflect the land uses identified in the Draft Delta Community Plan. This application was eventually withdrawn by the claimants.

[236] In April 1983 the claimants then applied to rezone and subdivide the 10 acre site that became the Phase 1 Doncaster subdivision. This application received first and second reading in September 1983 and, following a public hearing, received third reading on October 3, 1983. There was evidence of a dispute between Delta and Mr. Elsom as to locating a relatively large park space on the subject property adjacent to the proposed subdivision. Delta told the claimants in February 1984 that there would be a postponement until the access routes were finalized. In March 1985, the claimants requested that the application proceed since the access routes were now known. In October 1985 there was evidence of some outstanding issues, including the park, but in the end Delta decided to obtain the park in the next stage of development and recommend approval at fourth reading in November 1985. These 48 lots sold between May 1986 and April 1988.

[237] The claimants submitted a second application to rezone and subdivide what became known as the Phase 2 Harrogate subdivision in April 1986, at the same time as the 48 lots in Phase 1 were coming on stream. The application received first and second reading in September 1986 and then was delayed for some time because of Delta's request for an agreement on park dedication and an overall road network for the whole of the subject lands. Final reading and approval was eventually granted in October 1987. The 63 lots sold between May 1988 and October 1989.

[238] Between 1988 and 1990 there were other applications for the subject property with respect to the Marlborough College school site, the gas station site and five applications for single family residential subdivisions. The only one of these that was at least partially successful was the application to do with Marlborough College.

[239] The claimants had earlier developed the Royal York subdivision located close to the subject property. At December 31, 1978 the claimants had an inventory of 110 unsold lots in this subdivision. These lots were sold during the next seven years as follows: 43 lots in 1979, 24 lots in 1980, 15 lots early in 1981, 6 lots late in 1982, 8 lots in 1983, 6 lots in 1984, and 8 lots in 1985, with the last 2 sales not occurring until December 1985. Six of the lots that sold in 1984 and 1985 were sold on condition that the builder purchaser sold another lot in the subdivision (with the residence) to an ultimate purchaser by a specified date. This type of condition did not appear in interim agreements for other years. An analysis of the sales show that the market plummeted in 1981 with average prices falling from over $90,000 in the seven months to July 31 1981 to approximately $45,000 in the seven months ended December 31 1982.

[240] Mr. Elsom, in cross-examination, agreed that he had provided the following answer in the family law trial during December 1984 to a question from his counsel as to the state of the market in December 1984:

[241] First, dealing with the applications after 1988 for the school site, the gas station site and the unsuccessful applications for single family residential development, the evidence does not support that any failure of these applications was linked to the Project. The Chevron application was rejected as a result of the neighbours' opposition to a gas station in that location. While there was ongoing discussion about an overpass in the context of several of the applications, our review of the evidence leads us to conclude that these applications after 1988 were ultimately rejected because of the dispute between Delta and Mr. Elsom as to the location of a park on the subject property and the request for an overall plan. We conclude that the rejections of the claimants' various applications after the Harrogate subdivision were not caused by the Project.

[242] Second, from the evidence we received, the claimants made no further applications between 1991 and 2000, nor is there evidence of much time spent in attempting to move the earlier applications forward. It was not until 2001, after the hearing had already started, that we were told that a new overall plan had just been submitted as part of a rezoning application. We conclude that the claimants were not delayed in any development of the subject property after 1991 as a result of the Project.

[243] Third, with respect to the failure of the Hanson-Erb application submitted in 1979, we note that while one of the reasons given for rejecting this application was the uncertainty related to the Project, Delta made it clear that it had other concerns about this application. The application did not reflect uses in the draft Delta Community Plan including two locations on the subject property designated as open space or park. In our view, the Hanson-Erb application would have been refused or at a minimum, been extensively modified, in the absence of the Project. In any event, in December 1978 there were still 110 lots remaining unsold in Royal York and Mr. Elsom testified that he proceeded cautiously in the development of his land, investing in services only when there was a market for his serviced lots. We do not accept that the claimants were subjected to a delay as a result of the Project as long as they had a number of lots nearby that remained unsold.

[244] Fourth, with respect to the Doncaster and Harrogate subdivision, we do find that the Project caused some delay. Mr. Elsom estimated a three year delay for Doncaster from 1983, when the application was first submitted, until 1986, when the first lots were sold. However, this period covers the entire time that was spent in obtaining approvals and servicing of the lots. The application went through first and second reading, then third reading and a public hearing; there were negotiations with Delta about various issues including a park location, followed by fourth reading and approval. After final approval the services had to be installed. The approval process and installation of services would have taken some period of time in the absence of the Project and accordingly we do not accept Mr. Elsom's estimation of delay.

[245] The documents referred to earlier show that there was a gap of approximately one year between February 24, 1984 and March 6, 1985 when the Doncaster application was delayed because of the Project. The Project may well have had other effects on this application that lengthened the time for its approval. However, in the latter part of 1981 there was a serious fall in the market and the sale of the final lots remaining in Royal York slowed to a trickle. The last two lots in the Royal York subdivision did not sell until December 1985. The very low lot sales in Royal York between 1982 and 1985 suggest that there was no loss of sales due to the Project in this period. We note that there was only a five month gap between December 1985 when the last Royal York lots sold and May 1986 when the first Doncaster lots sold. Although the application process may have been delayed for one year, or longer, the development of Doncaster was also delayed by poor market conditions and the problems with the park (aspects that were not the Ministry's responsibility). As a result we find that the claimants were only in fact delayed in their development of Doncaster for some period less than a year as a result of the Project. Since the Harrogate application followed on the Doncaster application, we conclude that there was a delay for some period less than a year in that application as well.

[246] We have accepted that the Project caused a delay of less than one year in the Doncaster and Harrogate applications only.

[247] Since Mr. Blanchette's model assumed that the Project caused a six years delay in development of the whole property, we do not find it of assistance. In addition, we note that there were other flaws in Mr. Blanchette's model for estimating disturbance damages for delay including his use of constant 1985 dollars rather than current dollars and an overestimate of the number of lots by using the before layout in both scenarios.

[248] We also note that Mr. Elsom's delay claim calculation appears to be fundamentally flawed. The calculations in his submissions suggested that they were based on a delay of the receipt of $800,000 for 3 years for Doncaster, and of $960,000 for 4 years for Harrogate. However, his actual calculations were for $800,000 a year and $960,000 a year for 3 and 4 years respectively, together with interest at 10% compounded annually, rather than for the loss of interest on those sums compounded annually. This led to a value that was much too high.

[249] We did find Mr. Aberdeen's model useful in measuring the effect of a delay on the developer's return. Although Mr. Aberdeen's model yielded a loss in the developer's return when a two year delay in the development of the Doncaster and Harrogate subdivisions was assumed, we found a different result when we examined Mr. Aberdeen's cash flows of the developer's returns after deducting all development costs. They showed the following:

Thus, the delay of two years increased the net return from the property by $959,272. This is because the lot sale prices increased during the period of the delay and the various development costs did not increase to the same degree.

[250] Similarly, when we reviewed Ms. Watson's initial research for the entire period between 1985 and 2000, lot prices increased significantly. Between 1985 and 1994, lot prices increased from $49,000 to $170,000, then dropped to $138,000 in 1995, and were stable in the range of $147,500 and $155,000 between 1996 and 2000. The 347% increase in the nine years from 1985 and 1994 is equivalent to 14.82% a year compounded annually. The 310% increase in the fifteen years from $49,000 in 1985 to $152,000 in 2000 is equivalent to 7.84% a year compounded annually.

[251] Furthermore, when we examined the record of the actual sales of lots from Doncaster and Harrogate we found that prices increased from an average of $55,000 a lot in 1986 to $87,036 a lot in 1989. This increase is equivalent to 16.53% compounded annually.

[252] Mr. Aberdeen was instructed to assume the net proceeds of sale were invested in five year Guaranteed Investment Certificates. This means that the five year rate remained in place for the full five years and the funds would then be reinvested for further five year periods at the then prevailing rates. The use of a five year rate during a period when interest rates were falling has a significant impact on the final result. If we take Mr. Aberdeen's cash flow for each year and assume investment each year in five year GICs, at the five year rate in effect when each year's cash flow comes on stream, the amount on hand at December 31 1988 would be as follows:

	No delay	Delay
1985 cash flow	$1,475,907
Interest on 1985 cash flow to December 31 1988 compounded at 10.5% a year	$ 515,435
1986 cash flow	$1,719,076	$ 77,821
Interest on 1986 cash flow to December 31 1988 compounded at 9.56% a year	$ 344,398	$ 15,591
1987 cash flow		$2,886,749
Interest on 1987 cash flow to December 31 1988 at 9.42% a year		$ 271,932
1988 cash flow		$1,189,685

Total at December 31 1988	$4,054,816	$4,441,778

As can be seen, the total cash flow from lot sales plus interest to December 31 1988 is still greater by $386,962 with a two year delay in the development.

[253] When we reviewed Mr. Aberdeen's model we found that the only reason that there was a greater return from a development with no delay was the rates of interest applied to the investment and reinvestment of the cash flow from December 31 1988 to December 31 2000. The use of a five year rate in a period of generally falling interest has the effect of applying a higher rate of return to the cash flow with no delay. The 1985 cash flow earns 10.5% for five years and is then reinvested for a further five years at 10.98% [higher than in 1985 due to the fact that interest rates spiked up in 1989 and 1990 before returning to the downward pattern] and then for a further five years at 7.06% for an overall average rate of 9.51% during the fifteen year period. The 1987 cash flow which is received assuming a two year delay earns 9.42% for five years, then 7.33% for the next five years and 4.71% for the final period to December 31, 2000 for an overall average rate of 7.52% during the thirteen year period. If the cash flow had been invested and reinvested in one year Guaranteed Investment Certificates through to December 31, 2000 the total return with a two year delay would be greater than in the scenario with no delay.

[254] Mr. Aberdeen's estimation of a decrease of $575,000 in the total return to the developer assuming the two year delay flows entirely from the methodology used to calculate the interest on the investment of the cash flow. The increase in cash flow for Doncaster and Harrogate from $3,194,983 with no delay, to $4,154,255 with a two year delay, amounts to 30%. Since the assumed two year delay led to an increase in compensation and the only loss is related to an assumption in the term of the investment, we find that the model does not support any losses accruing for delay. This result would also apply to the shorter period of delay of less than one year that we have determined occurred in this case.

[255] We have to consider the claimants' alternative claim for delay based on Lofranco. This case valued the construction easement by treating the market value of the land as an investment at 10% as long as the easement was in effect. This compensation is based on the claimant having the interest on the market value of the land as "rent" for the period of the easement.

[256] A more directly relevant case is the approach to estimating damages for delay in the Ontario Municipal Board decision in Dell Holdings Ltd. v. Toronto Area Transit Operating Authority (1990), 43 L.C.R. 138. The Ontario board reviewed several measures of compensation for the period of the delay including extra holding costs, the increase in various development costs, the reduction in developer's profit and the deferral in receiving the developer's profit. The Ontario board found that these various measures ranged between $75,000 and $600,000, although it considered some measures in combination. We note that the holding costs were calculated in the same manner as the calculation was made in Lofranco, by assuming that the market value of the land had been financed at 10% for the period of delay. These holding costs appear to be mistakenly reported by the Ontario board as $86,000 when the calculation in fact produces $860,000. As this board commented at para 167 and 168 in Sequoia Springs, the Ontario board in Dell decided that the evidence that they had been given on the reduction in developers profit was speculative because it was based in part on one aspect of the development that had never been built and might never be built. As a result it chose $500,000 for the quantum of damages, as a round number within the range of the various calculations. Although the amount of damages was appealed by the owner, the Ontario Divisional Court denied the appeal of this issue saying that the board decision should not be overturned so long as it had exercised its discretion after reviewing the evidence. See (1991), 45 L.C.R. 250. Although this case was later considered by the Ontario Court of Appeal and the Supreme Court of Canada nothing further was said about the quantum of damages. See (1995), 55 L.C.R. 1 (Ont C.A.); (1997), 60 L.C.R. 81 (S.C.C.).

[257] Finally in Sequoia Springs, this board considered several alternative means of measuring damages for delay presented by the claimant's appraiser. At para 170 it accepted the model whereby the income and expenses were deferred by the delay and the compensation was measured as the market value of the remaining land valued at the discount rate for the period of the delay.

[258] When we consider Mr. Aberdeen's model in the present case with the measures of damage discussed in these three cases, we note that none of the previous cases considered the wider picture as to what losses the owner actually suffered when factors such as financing costs, changes in the market value of the lots, changes in development costs, and ongoing property taxes were considered as a whole. In each of the earlier cases only one aspect, such as the holding costs or interest paid on the financing of the property during the period of delay or an increase in a particular servicing cost, was dealt with in isolation. In this case, the model showed that the sale price of the developed lots increased by more than 22% as a result of the two year delay. However, servicing and development costs increased by only 7% so that the overall net cash return increased by 30%. Thus the two year delay period increased the return to the developer by a compound rate in excess of 14% a year. The model takes the financing costs, increases in servicing costs, and the ongoing payment of property taxes into account, but the rising market in this period, more than offsets any increase in costs. We are satisfied that a similar situation would have prevailed had the delay period been longer since Ms. Watson's research showed that lot prices increased by an annual compound rate of more than 14% from 1985 to 1994 with a much lower rate of increase in construction costs during the same period. These returns are higher than the 10% annual return used by the claimants in their estimates of loss due to delay. We accept the model in this case as offering a more accurate indication of the real effects of the delay and as a result we make no award under this heading.

[259] Finally, we note that the claimants' have made an additional claim for holding costs on top of their claim for delay. They have also made a claim for the increase in Development Cost Charges that will have to be paid as a result of the delay. As discussed above these are different aspects of the same claim. Given that the model supports no actual losses, these additional claims have no basis.

[260] The claimants have claimed $220,000 at this time for engineering expenses for Mr. Buchan's services through Hub Engineering which were incurred as a result of the taking and are in effect thrown away. This work was detailed in argument as follows and in fact totalled $154,400, rounded, not $220,000:

a	Ministry taking	$70,700
b	Phase 1 - 10% of account for Nordel Way issues	$ 3,468
c	Phase 2 - 10% of account for Nordel Way issues	$ 3,822
d	82nd Avenue, overpass and connecting road	$37,199
e	Sanitary sewer under Nordel Way	$ 7,690
f	Efforts to obtain agreement on overall plan	$14,275
g	Hester Creek ravine	$ 4,837
h	Nordel Way (112th to 120th)	$ 474
i	Nordel overpass and 82nd	$ 316
j	Phase 3	$ 2,584
k	108th subdivision	$ 5,867
l	108th subdivision north of 84th	$ 3,189

Total		$154,421

[261] Counsel for the respondent concedes that items a, b, c, g, and i were valid disturbance damages and are payable by the respondent. These five items total $83,143.

[262] We note that the largest item, item a, is for with work and meetings to do with various aspects of the alignment and construction of the Project. The Ministry has agreed that this engineering work would not have been necessary but for the expropriation. In addition to this item and the other four items detailed above that have been accepted by the respondent, we have reviewed the invoice for item h and find that the $474 on this invoice is related to the Project.

[263] We have found that the failures of the various subdivision applications after Phase 2 were unrelated to the Project. Work on attempting to have an overall plan approved is also unrelated to the taking or the construction of the highway. The respondent is not responsible for development work that would have been necessary in any event of the Project. See para 114-116 of Sequoia Springs. We reject the claims for items f, j, k, and l.

[264] Item d is described as being for the proposed overpass and connecting roads. However, the three invoices indicate that they were for work that was related to a residential subdivision along 82nd Avenue. Again we do not find that the engineering work for a potential subdivision is related to the Project. We deny the claim for item d.

[265] Our review of the evidence indicates that the invoices for items e, f, i, j, k, and l were not provided to us. We have already disallowed items f, j, k, and l. With respect to item e, the evidence was that it was for work running a sanitary sewer on Lot 112 in the existing rights of way to tie it into the trunk GVRD sewer. Mr. Buchan testified that the rationale for doing the work was that if the land was sold in a hurry, Mr. Elsom wanted the sanitary sewer in place. We find that this work was done in anticipation of future development and would have been done whether or not the Project was built. On the evidence provided the Ministry is not responsible for the work claimed for item e and we reject this claim.

[266] Thus, we allow a total of $83,617 for engineering services for work made necessary as a result of the Project.

[267] The claimants claimed $500,000 for executive time of Mr. Elsom. Mr. Elsom suggested that he had spent approximately 20% of his time since 1979 on the expropriation claim. We were provided with a list from his accountant of monies that had been paid to Mr. Elsom as personal remuneration between 1979 and 1999. This salary had been paid from one or more of his companies and varied significantly from year to year from a low of $20,000 to a high of $1,966,000. Mr. Elsom acknowledged that one factor that affected the amount was the revenue from development that had been received that year, but he indicated that there were other factors.

[268] The Ministry's position is that there should be no award for executive time. It referred us to the discussion of this issue in Sequoia Springs. Mr. Elsom was vague in providing evidence as to how his salary is determined. There was no evidence that any of the claimants had suffered a financial loss as a result of Mr. Elsom's time spent on the expropriation.

[269] In 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.), this board reviewed a number of cases to do with executive time. The premise is that as a result of the expropriation the claimant loses money because an executive officer has been required to deal with matters arising from the expropriation rather than his or her regular duties. At para 293 the test was stated to be whether there was credible evidence of a financial loss or expense to the claimant, or a reasonable inference of a consequential loss, as a result of the time expended by the individual. In Pay Less the claimant's manager of real estate and development spent time finding an alternative site for relocation of the claimant's business as a result of the expropriation. The board decided that it was reasonable to infer some loss to the claimant for this time spent by the manager of real estate and development and awarded $20,000.

[270] Claims for time spent in preparing a compensation claim or in attending a hearing to give evidence are not a compensable disturbance damage. This includes time spent meeting with counsel, meeting with expert witnesses, attending discoveries, and reviewing documents from the claimant's own files or the authority's files in preparation for the claim or the hearing. See E.C.E. Todd in The Law of Expropriation and Compensation in Canada, 2nd ed. (1992), p. 290.

[271] In this case, much of the time spent by Mr. Elsom was in negotiations with the Ministry about settlement, and later in pursuing the claim for compensation. This is not compensable as disturbance damages. In a decision of this board, Reon Management Services Inc. v. British Columbia (2001), 72 L.C.R. 257 (B.C.E.C.B.), an invoice from the claimant's principal for time spent in pursuing the expropriation claim was considered in a cost application and ultimately rejected. Mr. Elsom also spent significant time in dealings with Delta. The respondent is not responsible for what is the ordinary time spent by a developer in making applications to develop or sell land. Neither is it responsible for time that was spent working on subdivisions that have not yet been approved because of Mr. Elsom's long standing difficulties with Delta about such issues as park and an overall plan. While the expropriation did create some new issues of dispute, including a potential for an overpass and maintenance of the embankments, after reviewing all of the evidence, we are not satisfied that these issues occupied a significant portion of Mr. Elsom's time. It is our view that the main activities on which Mr. Elsom spent time that are properly attributable to the expropriation are the detailed negotiations that occurred with respect to the construction of Nordel Way in an effort to minimize the impact on his development of the remainder. This work involved his engineer, Mr. Buchan, and Mr. Buchan's expenses submitted as engineering invoices have been dealt with separately. We are satisfied that Mr. Elsom spent some limited time that is directly attributable to the expropriation, although we agree with the respondent that the claimants' evidence on this is weak.

[272] However, the measure of compensation is not how much time a claimant or a principal may have been spent on an expropriation, but rather whether the claimants have suffered a financial loss or can be inferred to have suffered a financial loss. We have no evidence that any of the claimants suffered a financial loss arising from Mr. Elsom's time spent on those aspects of the expropriation that are not associated with pursuing a claim for compensation. Neither do we have any evidence on which we can infer a financial loss to the claimants. While the Doncaster and Harrogate subdivisions might have occurred somewhat sooner if Mr. Elsom had not been spending time dealing with the construction of the Project, we have concluded that there was no financial loss as a result of any delay in the development of these two subdivisions. There was no evidence to support any further development income from the subject property if Mr. Elsom had had more time available. We note that much of the time that Mr. Elsom did spend on the subject property was unsuccessful and did not result in any development income, a failure that we have concluded is not attributable to the expropriation. While Mr. Elsom apparently had other companies, we were not provided with any evidence that supported a potential for more income to Mr. Elsom if he had had more time available (ie he had not had to spend the time that was directly attributable to the expropriation). As a result we make no award for this claim.

[273] We have awarded the following compensation with respect to the first expropriation:

[275] Mr. Goodwin, counsel for the corporate claimants, asked that all issues related to interest and costs be adjourned until after the release of this decision. The respondent agreed and accordingly interest and costs are adjourned at this time. Nonetheless we make a few observations that are relevant to these claims and may facilitate the parties in settling these issues in whole or in part without further submissions. To the extent that the issues do not resolve and a further hearing is necessary, none of these comments are intended to be determinative.

[276] The first taking predated the enactment of the Act in 1987. The respondent made two payments of $1,018,936 on July 4, 1986 and $781,064 on April 21, 1988, for a total of $1,800,000 with respect to the first expropriation. An advance payment of nil was made on October 11, 1995 with respect to the second expropriation. Because the first taking occurred prior to the Act coming into effect, the two payments made with respect to the first expropriation were not made under section [20] of the Act. There were no appraisals accompanying these two payments. An application for an order compelling delivery of an appraisal report under section [20] of the Act was made by the claimants in 1994 but this board decided that it did not have jurisdiction to make such an order for an expropriation that preceded the Act. See (1994), 54 L.C.R. 306.

[277] If the payments for the first expropriation were not made under section 20 of the Act, there is an issue as to applicability of section 46(1) and interest that is to be paid under that section. The advance payment with respect to the second expropriation was made in 1995 and was made under section 20.

[278] There is an outstanding order of a different panel of this board made September 15, 1995, with respect to interest. The board granted the claimants' adjournment of the compensation hearing that was scheduled for six weeks commencing September 25, 1995. The former Vice chair Fiona St. Clair, who chaired the panel, stated in an oral decision:

An application for judicial review of this decision (and another application heard on October 19, 1995 with oral reasons provided on October 27, 1995) was eventually filed on October 10, 1996, (over a year later) alleging bias of the panel who had heard the September 15, 1995 application. After various legal proceedings Mr. Justice Macdonald heard this application and in his decision reported at (1999), 66 L.C.R. 193 he refused to find bias by any member of the panel after specifically dealing with their participation in the application on September 15, 1995, granting the adjournment and denying any interest that might be payable.

[279] We note two cases in which this board was asked to reconsider an earlier panel's decision to deny the claimant's interest under section 47(a) from the date when the initial compensation hearing was scheduled to commence or adjourned and when the hearing recommenced. See Glendale Trading Ltd. v. British Columbia (Minister of Transportation and Highways), (2000) 70 L.C.R. 235 (B.C.E.C.B.) at para 58 and Premanco at para 262.

[280] We also note the recent decision of the British Columbia Court of Appeal in Daflos v. School District No. 42 (Maple Ridge-Pitt Meadows), unreported, 2002 BCCA 277 with respect to additional interest under section 46(4).

[281] The total compensation payable with respect to the first expropriation is less than 115% of the advance payments. However, this expropriation occurred before the Act came into force and as a result it is not certain whether the provisions of the Act with respect to costs apply. The total compensation with respect to the second expropriation is more than 115% of the advance payment and therefore the claimants appear to be entitled to their costs necessarily incurred to assert their claim for compensation with respect to the second taking. These are the actual reasonable legal, appraisal, and other costs to assert their claim for compensation with respect to the second taking until June 28, 1999 and to their costs as prescribed in the Tariff of Costs Regulation, B.C. Reg 189/99 after that date.

THEREFORE IT IS ORDERED THAT the Ministry of Transportation and Highways shall pay Whitechapel Estates Ltd., Piccadilly Estates Ltd., Delsom Estates Ltd., and Norman Dennis Elsom:

1. Compensation under section 40 of the Act for the market value of the land that was acquired in 1985 and the reduction in market value of the remaining land in the sum of $1,567,500.

2. Compensation under sections 34 and 40 of the Act for business losses for engineering expenses thrown away as a result of the taking in the amount of $83,617.

3. Compensation under section 40 of the Act for the market value of the land that was acquired in 1995 in the sum of $300,300.