February 28, 1997, E.C.B. Control No. 24/94/134 (60 L.C.R. 169)

 

Between: Marjorie Louise Herring
Claimant
And: Her Majesty The Queen in Right of the Province of British Columbia
as represented by the Minister of Transportation and Highways
Respondent
Before: Susan E. Ross, Presiding Member
Julian K. Greenwood, Board Member
Azim S.M. Jamal, AACI, FRICS, RI(BC), Board Member
Appearances: Robert S. Cosburn, for the Claimant
Sarah I. Macdonald, for the Respondent

 

1. INTRODUCTION

In 1994, the Ministry of Transportation and Highways (MoTH) was improving the "Pat Bay Highway", which takes traffic from Victoria, B.C. out the Saanich peninsula to the airport and the main ferry terminal. This involved the redesign of some intersections. The claimant owned and lived on a small acreage on Wain Road in North Saanich, several properties west of the intersection of that road with the highway. The redesign of this intersection involved building a new overpass over the highway which east-bound Wain Road traffic would use to get onto the highway going north. Wain Road was realigned slightly as it approached the redesigned intersection. This realignment began just in front of the claimant's property, and required an expropriation of a small triangle (140 sq.ft.) from the front of the subject property.

The claimant was affected to some degree by the loss of this triangle of land, but much of her aggravation was related to a perceived delay by MoTH in proceeding with its project and to the ramp which was built to connect Wain Road to the highway overpass. Although that ramp was not on her land, it was a large and visible construction where there had previously been a view of trees. Her property, which had once felt reasonably secluded from highway traffic, was now overlooked (admittedly at some distance) by traffic using the overpass, and from the back of the property one could now hear and see traffic using the ramp.

Both parties presented cases which assumed a right of compensation for loss in value to the remaining property caused by the interchange project in general, including harm caused by the ramp, and not simply harm caused by the small taking from the front of the subject property. This means that the parties did not argue the principle outlined in cases such as Edwards v. Minister of Transport, [1964] 1 All E.R. 483, that in partial taking situations, compensation can only be claimed for loss in value to the remaining property which arises from activities upon the expropriated land. It may be that those issues will arise on another occasion, and this decision cannot be taken as authority one way or the other in that regard.

 

2. BACKGROUND

2.1 The property and its relation to the interchange works

The subject property was a narrow rectangle 1.72 acres in size. It had a 120 ft. frontage on Wain Road, and was about 624 ft. deep. Pat Bay Highway is a busy four-lane highway, which crossed Wain Road some 1000 ft. to the east. There were several lots and substantial stands of trees between the subject property and the highway. Though a small part of the highway was visible from the claimant's property, it did not interfere greatly with the claimant's lifestyle prior to the redesign of the Wain Road interchange.

The claimant's house was a 790 sq. ft., one-story, part-basement home with a single garage. It was sited 45' from the front of the lot, or about 68.5 ft. from the pavement on Wain Road. The front yard was screened from Wain Road by trees along the north lot line. The claimant worked from home as an environmental consultant and antique furniture restorer. She had converted the garage into a workshop for her furniture business. In the deep rear yard she engaged in organic gardening, growing medicinal plants and vegetables.

Reconstruction of the Wain Road interchange began in 1994, and in preparation for that work, a small triangle of property, 2 m. or 6.56 ft. wide at its widest point, and 13 m. or 42.65 ft. long, was expropriated from the front of the property. This meant that the new road pavement now came within about 47 ft. of the house at its nearest point. This pavement was the beginning of a bend realigning Wain Road as it approached the highway and an upward ramp which would carry traffic to an overpass over the highway. The realignment continued in front of the two houses and lots to the east of the claimant, which were rather more significantly affected.

At its nearest point, the ramp was 310 ft. from the eastern boundary of the subject property. In spite of that distance, the claimant argued that her land and her activities on the land, were significantly affected by the overpass ramp. Not only did the visibility of the ramp eliminate the semi-pastoral feel of the property, she felt that the presence of the ramp would actually affect her gardening activities. Wind and frost patterns would change; highway maintenance would involve chemicals inimical to her organic gardening, some of which would find their way into the groundwater; it would be less likely that she could construct a well on the property; runoff from the highway would affect drainage on her property.

2.2 Advance payments

The expropriation notice was issued on May 20, 1994. On June 8, 1994, the claimant was paid an advance payment of $5,900 for the market value of the property taken ($500) and loss in value to the remainder ($5,400). These amounts were based on a valuation opinion of David Osland dated May 3, 1994.

The notice of advance payment was later amended to break it down between $5,051.64 for the claimant and $848.36 to be paid directly to the mortgagee. Since that $848.36 was used to pay down the mortgage balance, it also is treated as having been received by the claimant on the date it was paid to the mortgagee (June 30, 1994). The claimant was not required to pay back money she had earlier received.

The vesting notice was registered July 4, 1994.

Two years later, on July 2, 1996, MoTH made a further advance payment based on a revaluation of the claim at $13,100, and a valuation of disturbance damages at $1,352.48. (When this amount is added to the $848.36 used to pay down the mortgage, the total of these two amounts is $2,200.84, a figure used later in this decision in considering miscellaneous damages.) After consideration of payments already made, the further advance payment was calculated as $9,052.48, to which interest of $1,638.18 was added. The final result is that the claimant should be treated as having received the following amounts on or before July 4, 1994:

Initial payment $5,900.00
Payment to mortgagee $848.36
Further payment $9,052.48

Total $15,800.84

2.3 The project and how it progressed

A major complaint of the claimant was that the expropriation was poorly handled, resulting in unnecessary uncertainty and distress for the residents of the area. The fact that there would be alterations to the Wain Road intersection appears to have become public knowledge by December 1993, yet it was not until May 20, 1994 that the expropriation notice was served on the claimant. The first formal event was a North Saanich Council meeting on January 4, 1994 at which the new interchange was discussed, with some hostile reaction from residents. Subsequently, a neighbourhood liaison committee was struck through which residents were to communicate with MoTH. The claimant and other residents demanded to be told with some certainty whether they would be expropriated and to what extent. Alternative plans were suggested by residents, and it would appear that some part of MoTH's delay was associated with receiving and considering this input from the neighbourhood.

Expropriations of some neighbourhood properties took place early in the year, as work began on those properties. In late January, 1994, a house belonging to the Budesheims was demolished to make way for the ramp. Trees were being taken off the Budesheim property in March. The next major development was the creation of a large rock or gravel pile on what was referred to in the hearing as the McMillin property, two properties to the east of the subject, and just to the west of the Budesheim property. Much of this gravel was then used to build the ramp.

During this construction other neighbours, including the claimant and her neighbours immediately to the east of her (the Foxgords), continued to be uncertain as to how much of their properties would also be expropriated. On March 4, 1994, the claimant brought a petition in the Supreme Court asking for an order requiring MoTH to proceed with its expropriation of her property. In the end this petition did not proceed to hearing, but it displays the degree of anxiety the claimant felt at the time.

Once the expropriation decision was made on the claimant's own property, matters proceeded fairly quickly. As soon as the vesting order was registered (July 4), construction began on the realignment of Wain Road in front of the claimant's house. The balance of the work connecting Wain Road to the ramp seems to have been completed in July.

These events led the claimant to advance a claim for a loss of use and benefit of her property for the nine months between the beginning of January, 1994, and the approximate date the project was complete, which she treated as the end of September 1994.

2.4 Effect on claimant's business and personal uses of the property

Until early 1994, the claimant had been making a modest living on the property restoring antique furniture. She had adapted her garage into a workshop, where she had a substantial set of tools. She also did some environmental consulting work from time to time. Finally she had a keen interest in organic gardening, and grew vegetables on the property. She had occasionally taken produce for sale in the Moss St. market in Victoria. She had intentions to open a roadside stall in front of her property to sell produce more directly, but had not taken any active steps to do so.

The announcement of MoTH's plans for Wain Road coincided with a potentially suitable job opening at the District of Saanich, a nearby municipality. On January 13, 1994, the claimant went for a job interview. She was successful, and started work as an environmental planner shortly after. Around the same time she stopped taking in more furniture restoration work. Her workshop was in any event full with incomplete projects at the end of 1993, and she finished these off in the first three months of 1994, and treated income earned from those jobs as 1993 income.

The claimant did not pursue her gardening with any vigour in 1994. She decided as early as January that she was likely to sell the property if she was not fully expropriated. Even after it became clear that only a small amount would be expropriated, she maintained her intention to sell. She also decided that there was now insufficient room to place a produce stall by the road.

The result was that the claimant did not conduct her furniture restoration business or her gardening in 1994, except to a minor extent. She blamed this on the roadworks. The uncertainty before May 1994, the noise and dust of construction from April to July, and the certainty that there would now be a permanently greater level of highway noise after the changes were complete, rendered her traditional activities either unpleasant or impossible, in her view.

These observations were the basis for claims to the board for personal and business losses -- particularly loss of income from the business of furniture restoration.

2.5 Sale of the property

The claimant told the board that living on the property lost its appeal for her as a result of the highway project. She cited as reasons not only the loss of privacy in the rear yard, and the greater immediacy of the road in front of the property; an important factor was that her small community of close neighbours and friends had been broken up. She confirmed her decision to sell, and listed the property in September 1994 for $245,000. Her realtor, Jan Garnett, had in fact been consulted back in January, but the decision to sell had been put on hold during the construction period.

Jan Garnett testified that she held several open houses, including two right at the start for realtors only. She noted that the "average" opinion of likely sale price expressed by those realtors was just under $230,000, and that she should be able to sell it for as much as $240,000 to the right person.

In fact, Ms. Garnett found keen buyers within about a month, and an offer for $230,000 from the Bittens was accepted on October 20, 1994. This offer was, however, subject to the sale of the Bittens' existing home in Sidney. Ms. Garnett obtained that listing herself and then attempted to sell both properties. Unfortunately, the property market was declining in the second half of 1994 after rising steadily from January to July. The Bittens' property did not sell, and Ms. Garnett had to continue to try to find back-up buyers for the subject property.

Her notes show that this was not proving easy. A number of buyers commented negatively on the proximity to the highway. No doubt the souring market conditions were also a factor. The listing price on the subject property was reduced slightly in November; the same was done for the Bittens' house in December, but still the Bittens' house did not sell. Eventually the claimant accepted a new offer from the Shaws. The offer was for $215,000, and it was accepted in late February 1995. The Bittens were not prepared to waive their condition, so they lost the property, and it sold to the Shaws.

This evidence was produced in support of a claim that the respondent should pay for a loss realized on the sale. The claimant's appraiser had said that the property was worth $225,000 after the taking. Since it in fact sold for only $215,000, the claimant argued that she had suffered a further loss of $10,000 which was compensable.

 

3. CLAIMS

3.1 Market value of land taken (the 140 sq. ft. or 13 sq. m.).

There was no serious issue on this. The claimant valued the land taken at $350. MoTH valued it higher at $500, and included that amount in its advance payment.

3.2 Loss of value to remaining lands

The remaining property was said to be negatively affected by the taking, both because of the realignment of Wain Road towards the house, and because of the construction of the overpass ramp over the McMillin and Budesheim properties to the east. The realignment of Wain Road was said to have reduced the front yard, made road noise more significant at the house, reduced the area available in front of the house for turning or parking vehicles, or for establishing a produce stand, and made driving in and out more hazardous. The ramp contributed to a loss of privacy and sense of seclusion in the back of the property.

The claimant's expert valued the loss in value to the remainder at $29,650. MoTH's expert countered at $13,100. There was therefore a difference of opinion of $16,550.

3.3 Disturbance damages.

The claimant claimed a total of $22,740.25 under this general heading. This included items that might better have been called personal or business losses, but MoTH elected not to contest the categorization of these claims as between s. 33 (1) (a) and s. 39 (1) (b) of the Act. In this overall amount the claimant included the following heads of damage:

Loss on sale of property: $10,000.00
Loss of income from her home business of furniture refinishing: $6,000.00
Loss of use and benefit of the property from January to October 1994: $4,750.00
Miscellaneous expenses associated with the expropriation and construction: $1,990.25

MoTH's advance payments included $2,200.84 which could be identified generally as referable to disturbance damages or personal or business losses. The difference between the parties was therefore some $20,539.41.

3.4 Costs and interest

The claimant sought costs and interest under ss. 44 and 45 of the Act.

 

4. THE APPRAISALS

4.1 Claimant's appraisal evidence

Ms. Rita C. Thibault, AACI, of Thibault and Company Appraisals Inc., testified for the claimant. Her report, dated April 22, 1996, estimated the loss in value of the subject property due to the partial taking at $30,000.

Thibault found the value of the property before the taking to be $255,000. She used both a direct comparison approach and a cost approach. The land value she found for the cost approach was $180,000, or $2.40 per sq. ft. Applying this to the 140 sq. ft. actually taken, she concluded a rounded value of $350.

To determine loss of value to the remainder, Thibault used a "before and after" approach, which by its nature values both the land taken and the loss of value to the remainder. According to Thibault, no comparable evidence of "after" value was available in the subject's area. As an alternative, she looked for evidence of the percentage difference of value between properties that are sited on quiet streets and properties on busy streets in the Victoria area. Her analysis of sales obtained from the Multiple Listing Service (MLS) of the Victoria Real Estate Board resulted in a range for this difference from -2.74% to -29.88%. The average of this range was -22.20%, which Thibault felt was excessive for the subject, considering that it was some distance removed from the overpass. She contemplated a 50% reduction, reducing the indicated percentage difference to -11.10%, but she was not satisfied with this figure, and felt a smaller adjustment was required. She further refined this figure by taking the second lowest figure (-13.72%) from her set of comparisons, and averaging it with the figure of -11.10% to arrive at -12.4% as her estimate of the percentage difference of value between "before" and "after".

Using this finding, she concluded that the subject was in effect being changed from a home on a quiet street to one on a busy street, so that the loss of value would be 12.4% of $255,000, which she rounded down to $30,000.

Thibault was also asked to give an opinion on the loss associated with a temporary reduction in saleability of the property, or reduction in its rental value, in the months before and during the construction. She dealt with the period from January 6, 1994, when the Ministry first announced work on Wain Road, to the end of September, 1994, when the project was substantially complete. She was asked by Mr. Cosburn, claimant's counsel, to quantify the loss of use and benefit of the property for this 9 month period. She approached it two ways. First, she assumed that the property was sold at the beginning of the period, the proceeds invested, and the vendor rented a 2-bedroom apartment. She estimated the owner would accumulate $4,569 over the period as the excess of interest over rent. (The board questioned the validity of this calculation since it was based on the gross sale value rather than on the net amount after payment of the mortgage balance.) Secondly, Thibault estimated what the property would have rented for during the period, compared to a more normal period. She decided that the rental loss would be 50% of $450/month, and in addition there would be a two month vacancy. Over 9 months this would amount to $4,950. She picked a number in between these two estimates as her estimate of loss of use and benefit: $4,750.

4.2 Respondent's appraisal evidence

MoTH retained Mr. D.T. Osland, AACI, RI(BC), of Baker & Osland Appraisals Ltd. His report, dated May 30, 1996, gave the opinion that "the loss in market value due to the land taken" was $13,600. It was apparent that Osland, like Thibault, was measuring both the market value of the piece taken and also the loss in value to the remainder. His report, indeed, was superficially similar to that of Thibault in approach. He concluded a slightly lower value for the property before the taking ($252,000), although he thought the land component of this was higher ($189,000). His estimate of the value of the piece taken was $400, compared to Thibault's $350.

Like Thibault, Osland sought to measure the loss in value to the remainder by an indirect means. His method was somewhat different than that of Thibault, however. Instead of comparing average values of residential properties that sold in a certain period in different locations, Osland looked for pairs of sales of physically similar properties, one of which was affected by proximity to an undesirable neighbour, like a busy road, a sewage treatment plant, or a hotel with a pub. He used a number of such pairings drawn from six comparable properties or developments, which showed price reductions for the more affected property in each pair between 2.5% and 12.8% of the price of the unaffected property. He decided that the land values would be affected less than improvement values. The subject property, he said, would experience greater traffic impact from Wain Road and the ramp, would have the visual impact of the ramp, and some loss of privacy.

Osland narrowed his analysis to a couple of comparables for which the type of impact was most similar to the situation of the subject property, although the severity of the impact was still considerably greater than that experienced by the subject. He recognized that the improvements in these comparables were constructed with knowledge of the adjoining circumstances, which was not the case for the subject improvement. With the exception of one vacant land comparable, his examples reflected a loss of value to the improvements as well as to the land. He was unwilling to assume that the percentage impact would be the same on the improvement as on the land, and therefore further refined his earlier analysis to estimate separately the loss to the land and the loss to the improvement.

For the land component, Osland considered first the vacant land sale comparable, which indicated a range of value loss between 4.1% and 7.1%. He felt that the lower end of the range was most appropriate, since the loss in value for the subject was less severe than for the comparable. He also reviewed the two most comparable improved sale pairs, which he felt were more severely affected by roadways than the subject, and concluded that these confirmed the value impact on the land component of the subject should be less than 5%.

With respect to tbe building component, Osland went through the same exercise. Considering the two most comparable properties, he found a range of -15.9% to -20.0% for his pairs of comparables. Recognizing the different degree of severity of impact between the comparable pairings and the subject, he decided these percentages were too high and concluded 10% was appropriate.

In the result, Osland applied a 4% reduction to the land, and a 10% reduction to the improvement. This led him to conclude that the loss in value due to proximity to all the negative factors was $13,200. This he added to the $400 previously found for loss of land, to give a total loss estimate of $13,600.

 

5. DISCUSSION

51. The appraisals -- market value of land taken and loss in value to remainder.

The important difference between the appraisers is not in their initial ("before") value estimates, but in the percentage reductions they chose to determine loss in value to the remainder. Whether one starts with $255,000 or $252,000 is insignificant, and indeed both appraisers conceded in their testimony that their margin of error was large enough to include the value opinion of the other. The Board is content to use a number between the two: $253,500.

The main difficulty is with the methods chosen (by both appraisers) for determining loss in value. In spite of Thibault's assertions, she did not determine an "after" value. She and Osland both decided that the value loss to the remainder would be a percentage of the "before" value.

The evidence from which Thibault arrived at her percentage reduction was weak. The problem is that there is no easy way of comparing the neighbourhood disamenity in the subject case with the examples chosen. The board was not persuaded that a percentage reduction for living on Shelbourne St., Bay St. or McKenzie Ave. in Victoria, compared to other side streets, should result in a similar percentage deduction for the subject. The situations are very different. The chosen main streets are very busy thoroughfares, substantially less desirable for single family residences than they might have been in the past, when many of their remaining homes were built. By contrast, the subject site is affected more by a change of view or of the path of traffic than a change of traffic volume.

Secondly, Thibault simply averaged all residential sales in a certain period in certain Victoria neighbourhoods, separated only by whether they were on or off the chosen busy street. There were many other factors, such as size of lot, size, age or condition of improvement, that would be completely masked by this technique; yet there was not such a volume of sales that one could say the individual differences would become unimportant in the statistical conclusions. In fact, the evidence was to the contrary. There were only three sales on McKenzie Avenue in Thibault's sample, and they showed rather older, smaller lots and houses than was typical on the less busy side streets.

Overall, Thibault's examples presented too different a situation to the subject, and her statistical analysis was unconvincing. As a result, the board was unable to find her calculations probative.

The board was more impressed with Osland's evidence as a way of finding percentage reduction. Although it is hard to be sure that living next to a pub or a sewage plant presents the same kind or degree of disamenity as living next to an overpass ramp, this at least is a more promising approach, and Osland presented enough examples to convince the board of its potential validity. Unfortunately, he left the board with a range from 3 to 12 percent loss of value, but no particular figure which was clearly superior within that range. The appropriate percentage for this case was not resolved by his evidence.

The board has considered, therefore, whether there is direct evidence of the amount of loss in value to the remaining property in the collapsed sale of the subject property in October, 1994, and the actual sale of the subject property in February, 1995. We note that both appraisers had this sale evidence, but chose not to use it in developing their "after" value or their estimates of loss.

Thibault's comment on the February 1995 sale was that it supported her "after" value as otherwise determined, of $225,000. She said that the market had dropped generally by 4.53% between July 1994 and February 1995, and that if she applied that reduction to the $225,000 the result would be close to $215,000. Osland made much the same comment, but claimed that the sale supported his "after" value of $238,400. He thought that the property value would have declined some 5% to 6% from July 1994 to February 1995, which would indicate a value of $225,000 at the later date. The fact that there had been an earlier collapsed sale at $230,000, and certain comments made to him by others, led him to conclude that the $215,000 actual price was below market, and therefore should not be used directly.

The board observes that the statistics used by each appraiser to measure the drop in market over the months in question (July 1994 to February 1995) showed considerable variation, although from the same MLS source. Osland quoted figures for "all residential sales" in Greater Victoria, which showed a decline of 6.8% on a "smooth average" basis, or 9.3% on the pure monthly data. Thibault claimed that the figure for all residential sales (including residential acreages) was only 4.61%, while that for single family residences only was 4.1%. It also appeared that Osland's figures included data from lower priced areas outside Victoria proper, but which were listed with the Victoria Real Estate Board. None of this data was exclusive to residential acreages like the subject.

The board has estimated the "after" value from a consideration of both these sales. The February, 1995 sale at $215,000, combined with an assumption from all the above market data of a value decline of about 5.3% between July, 1994 and February, 1995, indicates a value in July 1994 of about $227,000. This is not inconsistent with the collapsed sale of $230,000 in October, 1994. The board therefore adopts $227,000 as its estimate of "after" value.

5.2 Loss of business income

The claimant testified that she had abandoned her woodworking or furniture refinishing activities in 1994, because of the interchange project. She said that she needed quiet surroundings to do this demanding work, and that construction noises nearby were dangerously disturbing. She noted that dust from construction made activities such as French polishing difficult. She also observed that the reduced front yard made it more difficult for vehicles to come and go with furniture items. She gave evidence that she had reported income from this activity of $5,106 for 1993, and $6,132 for 1992, and asked the board to conclude that she would have made approximately $6,000 in 1994 but for the road works.

The board accepts that the claimant's ability to continue her woodworking activity would have been impaired, or made more difficult, by the construction activity near her home, but is unable to accept the claim for a total loss of income from this activity, since it is not satisfied that the expropriation, construction or subsequent use of the road works actually caused her to cease the business. In fact she made a decision as early as January 1994 not to take any more furniture work, and she took a full-time job with Saanich that month. She may have been influenced to do this by her fears over what might happen, and her expectation that she might move, but her actual decision to abandon the work entirely, rather than attempt to continue it, is not in the circumstances of this case the responsibility of MoTH.

As a further observation, if the claimant had suffered a loss of business income caused by MoTH's activities, she would be under a duty to mitigate. In effect she did that by taking full-time employment with the District of Saanich, which must have produced an income which exceeded $6,000 in 1994. The claimant did testify that she intended to take this job and continue to do refinishing in her own time, but the evidence is that she made no attempt to do this. Indeed, since selling the property she has not tried to return to her woodworking, and instead has made plans to live on a boat.

A second element of personal or business loss was advanced at the hearing, but never quantified. This was the claim that the claimant's organic gardening activities were curtailed by the events of 1994, and that a plan to sell produce from a roadside stall were effectively dashed by the moving of Wain Road. There is very little evidence of any continuing income from this source, although the claimant did estimate orally that she might have earned about $1,000 in a previous year from sales through the Moss Street market. The board also notes that the claimant would have had to seek various approvals to operate a roadside stand, and without any evidence that such approvals had been sought and obtained or would have been forthcoming, the claim is speculative. The board finds this claim has not been established.

5.3 Loss of use and benefit of the property

The basis of this claim was that MoTH created uncertainty in the way it communicated its plans to the public from the beginning of 1994 until it actually completed the project. The board was urged to find that this gave rise to a claim for personal losses under s. 39 (1) (b) of the Act. Thibault was asked to quantify the claim, and the theory she advanced was that the claimant was unable or less able to sell or rent the property during the first 9 months of 1994.

Thibault therefore approached the problem in two ways. In her first approach, she assumed the property would have been saleable in January, 1994, except for the uncertainty surrounding the project, and that it was not again saleable until September or October. Thus she calculated the cost of this "deferral" of a sale opportunity on the basis of interest that could have been earned on the proceeds of a sale in January, less the cost of renting over the 9 months. The net earnings, she estimated, would have been $4,569. As noted earlier, the board had difficulty with this figure because it was based on a gross sale price, not on the owner's equity. A more serious objection, however, is that this calculation contained a built-in flaw, in that the property market had been climbing steadily during the first half of 1994. Thibault recognized this herself, in that she estimated (for the purpose of this calculation) that the value in January would have been $243,320, compared to a value in July of $255,000. Thus on her own expert's evidence, the claimant would have benefitted by holding the property rather than selling between January and July.

Thibault's alternate calculation was based on the assumption that the claimant would have tried to rent the property to a tenant during this period, but would have found it necessary to rent at considerably lower rents (50% of normal market), and that she would have suffered some two months of vacancy even at those low rents. However, because no evidentiary support was provided for Thibault's rent and vacancy assumptions, the board is not inclined to accept that they are applicable.

The result is that the claimant has not proven this claim. Indeed the main effect of the evidence is to convince the board that because the market rose in the first half of 1994, the claimant was unintentionally benefitted by MoTH if its conduct did restrain her from divesting herself of the property in January.

5.4 Loss on sale of property

The other substantial claim presented was for $10,000, being the difference between the property value after the taking as estimated by Thibault ($225,000), and the price eventually realized by the claimant in her sale of the property in February 1995 ($215,000).

The short answer to this claim is that it does not appear to have been caused by MoTH. Thibault testified that the reduction from $225,000 to $215,000 was completely explained by a decline in the general property market between July 1994 and February 1995. Osland gave similar evidence, and added that in his view the price was below market for other reasons peculiar to the claimant. It was suggested, but not proven to the board, that the claimant might have been less insistent on capturing full value if she felt the difference could be recovered in this proceeding. Certainly that would be a concern if the board was in the habit of making such awards, but the board has no evidence on which it could make such a finding in this case.

5.5 Miscellaneous disturbance damages

The claimant produced receipts for expenses of various kinds which totalled $1,990.25. One of the expenses claimed was for $435 in respect of cracking to walls of the house occasioned by the nearby construction. This claim was to have been dropped if the claim for loss of property value was allowed, but revived if (as has happened) the board declined the latter claim. It was only an estimate, and not an actual expense. The property was sold with the cracks.

Since the board has been unable to find that the claimant suffered any compensable loss on the sale of her property generally, it is inconsistent to allow the $435 claim. She has already been compensated for the loss of value to her property, which must be treated as being a value "complete with cracks".

In its second advance payment, MoTH allowed $2,200.84 for disturbance damages, but the board is unable to sort out precisely what amounts have been accepted by MoTH for payment and covered to date. The board therefore awards a rounded amount of $2,000 for all these miscellaneous claims.

 

6. CONCLUSIONS

6.1 Market value of land taken

The board has three figures to work with: $500 was the amount paid for this item in the advance payment. It had been based on an earlier appraisal by Osland. In his later appraisal presented to the board he chose $400. Thibault, proposed $350. The board finds the original amount of $500 to be sufficiently justified by evidence, and will not disturb it.

6.2 Loss in value to the remainder

The board has found that the "before" value is $253,500, and the "after" value is $227,000. The difference of $26,500 accounts for both the land taken and any loss of value to the remainder. Thus the loss of value to the remainder is $26,000.

6.3 Loss of use and benefit claim

The board denies this claim. It has not been established that the claimant suffered any financial loss by holding and living on the property in the first half of 1994, rather than selling or renting it in the same period.

6.4 Loss of business income claim

The board denies this claim on the ground that the claimant has not proven that she suffered any loss, or that her decision to discontinue her refinishing activities can be said to have been caused by the expropriation or the roadworks.

6.5 Loss on sale of property

The board denies this claim on the ground that any loss of value to the property from July 1994 to February 1995 is more likely to be associated with the general downturn in the market than to any other cause.

6.6 Miscellaneous disturbance damages

The board awards $2,000 for all the miscellaneous remaining expenses claimed.

6.7 Summary

The board awards the following amounts:

Market value of land taken $500.00
Loss in value to remainder $26,000.00
Miscellaneous disturbance damages $2,000.00
TOTAL $28,500.00
Advance payments totalled $15,800.84
Difference, as of July 4, 1994
  rounded to
$12,699.16
$12,700.00

 

7. INTEREST

Interest under s. 45 is awarded on the net amount of $12,700 from July 4, 1994 to the date of this decision. Since the advance payment is less than 90% of the amount found due by the board, additional interest at the rate of 5% is also payable pursuant to s. 45 (4). If the parties have difficulty agreeing on the precise amount of interest, the board will issue a further order.

 

8. COSTS

The award in this case being more than 115% of the advance payment, the claimant would normally be entitled under s. 44 (4) to her actual reasonable legal, appraisal and other costs. At the compensation hearing, however, MoTH requested that no order of costs be made without it first being given an opportunity to argue the effect of a so-called "Calderbank clause" in a settlement offer it made to the claimant. In these circumstances, MoTH will have 14 days from the issuance of this order to advise the board registrar whether it wishes to pursue the Calderbank issue, in which case the board will set a schedule for submissions from both parties.

 

 

Government of British Columbia