As a property owner, you may be wondering what damages you are entitled to should your property become negatively impacted by the construction of a public work, such as road widening or highway repairs. If your property is located on the side of, or close to, a highway, this may be of particular concern.
In Ontario, the Expropriations Act allows claims for "injurious affection" where a property owner suffers certain losses resulting from the construction of public works carried out under statutory authority. Where no land is taken, injurious affection means reduction in the market value of land and personal and business damages resulting from the construction, but not the use, of the works by the statutory authority.
The right of a landowner to be awarded injurious affection damages has been the subject of recent consideration by the Ontario Municipal Board ("Board") and the courts. This decision, Antrim Truck Centre Ltd. v. Ontario (Minister of Transportation) 2011 ONCA 419, is of particular importance as it considers when a property owner is entitled to compensation if their business or property is negatively affected by a public works project, but their land is not expropriated.
For many years, Antrim Truck Centre Ltd. ("Antrim") owned and operated a successful truck stop on Highway 17 near Ottawa. Highway 17 long exceeded its design capacity and was known as the "killer highway". As a result, for public safety reasons, the Ministry of Transportation constructed a new highway. The new highway effectively rerouted traffic away from the Antrim truck stop.
The Decisions of the Board and the Divisional Court
While there was no taking of land, Antrim brought a claim to the Board for injurious affection under the Expropriations Act. Antrim argued that the new highway impaired access to its property, which now required motorists to take a two kilometre detour to arrive at Antrim's doors. The Board agreed that the construction of the new highway was a substantial interference for which Antrim deserved injurious affection damages. On appeal, the Divisional Court upheld the Board's decision.
The Decision of the Court of Appeal
The Ministry of Transportation appealed to the Court of Appeal. The Court of Appeal overturned the decision of the Divisional Court and dismissed the claim.
To succeed on a claim for injurious affection where no land has been taken, the Court of Appeal confirmed that the following legal tests must be satisfied:
a. The damage must result from an act rendered lawful by statutory powers;
b. The damage must be such as would be actionable under the common law, but for the statutory powers; and
c. The damage must be occasioned by the construction of the public work, not its use.
In this case, there was no dispute that the statutory authority rule had been met as the Ministry of Transportation was acting within its statutory authority in constructing the new highway.
On the second test, Antrim argued that, were it not for the Ministry of Transportation's statutory authority, Antrim would have had a common law claim in nuisance on the basis that the construction of the new Highway restricted its common law right of access to its property.
In assessing whether Antrim would have had a claim in nuisance, the Court of Appeal restated that to succeed on a claim in nuisance, a two-step test must be satisfied: 1) there must be "substantial interference"; and 2) the interference must be unreasonable.
On the first test, the Court of Appeal agreed with the Board that there was a substantial interference with Antrim's property. However, Antrim's claim failed on the second test, as the interference was found not to be unreasonable.
In making this finding, the Court of Appeal held that in reaching its decision, the Board failed to consider the character of the neighbourhood and any abnormal sensitivity of Antrim. In particular, Antrim was aware of the character of the neighbourhood when it purchased the land. Antrim was also aware that Highway 17 posed safety risks and that a new highway would be constructed. Had the Board considered the character of the neighbourhood, the Court of Appeal held that it would have found that the substantial interference with Antrim's property was reasonable.
The Court of Appeal also found that the interference with Antrim's property was for public safety purposes and therefore was within what a reasonable property owner should be expected to tolerate.
Appeal to Supreme Court of Canada
The decision of the Court of Appeal was heard by the Supreme Court of Canada ("Supreme Court") on November 14, 2012, and its decision remains pending. As part of its decision, the Supreme Court will have to determine what the proper balance is between Antrim's right to enjoy uninterrupted access to its property, including the right to be compensated for injurious affection damages, against the public's right to road safety and the obligation of a statutory authority to ensure the protection of the public.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.