June 30, 1997, E.C.B. Control No.
02/92/143 (62 L.C.R. 3)
Majesty the Queen in Right of the Province of British
Columbia as Represented by the Minister of Transportation
E. Ross, Presiding Member
David J. Clark, AACI, Board Member
Suzanne K. Wiltshire, Board Member
Melville, for the Claimant
Alan V. W. Hincks, for the Respondent
REASONS FOR DECISION
In 1988 the Ministry of Transportation
and Highways (the "Ministry") commenced a project to
improve Highway 97, north of Summerland, British Columbia.
This case concerns a 30 square metre (0.0033 hectare)
estate in fee simple which the Ministry acquired as
part of that project. The acquisition was pursuant to
an agreement under s. 3 of the Expropriation Act,
R.S.B.C. 1996, c. 125 (the "Act")1signed
by the claimant, Marisa Hertel, on November 28, 1988.
The property acquired consisted of a wedge bordering
the north east corner of the intersection of Highway
97 and Steuart Street, some 1.5 kilometres north of
Summerland and was part of a larger parcel (Lot 7, District
Lot 472, Osoyoos Division Yale District, Plan 148, except
Plan 41218), also owned by the claimant, upon which
she and her husband, Ted Hertel, operated the Bonaterra
fruitstand and related operations (an orchard and orchard
tours). Lot 7 was rectangular and comprised 4.05 hectares
(10 acres) before being reduced by the Ministry's acquisition
of the wedge.
1 All references are to the 1996
consolidation of the Expropriation Act.
Before the Ministry acquired the
wedge, it was used as part of the direct highway access
to the fruitstand and patron parking, though Lot 7 was
also accessible off Steuart Road. Initially, the Ministry
did not believe that its project would change the elevation
of the highway and so agreed to continue to provide
highway access to the claimant's property. As the project
progressed, however, it became apparent in late 1990
or early 1991 that the highway elevation would be rising,
effectively leaving Lot 7 in a hole and making it impossible
for direct highway access to continue. As a result,
the parties entered into a second s. 3 agreement dated
July 22, 1991, which acknowledged that the Ministry
would not be able to reconstruct highway access to the
claimant's property, confirmed the original 1988 payment
of $723 for the wedge and the possession date of December
5, 1988, and provided for an additional payment of $115,000
in satisfaction of the Ministry's advance payment obligations
under s. 20 of the Act.
The compensation hearing took 10
days. The parties agree that the value of the 30 square
metre wedge was $723 and that this was paid under the
first s. 3 agreement. The compensation claims remaining
for determination are: $305,000 for loss of value to
the remaining property; $232,000 for disturbance damages
in the form of business and personal losses said to
be caused from the interruption and eventual cessation
of operations at the fruitstand; and, unquantified claims
for the value of owner's time spent dealing with the
Ministry over its acquisition and the loss of highway
access and for other miscellaneous losses.
The main witnesses for the claimant
were Mrs. Hertel and her husband and their experts,
Gordon D. Frampton (real estate appraisal), Lorne J.
Pellegrin (business valuation) and R. Bruce McTavish
(agricultural economics). The main witnesses for the
Ministry were experts, Danny Grant (real estate appraisal,
agricultural business management and agricultural practice),
Donald M. Spence (business valuation) and Daniel E.
Schroeter (agricultural economics).
The Hertels purchased Lot 7 in 1981
with Mrs. Hertel's parents. Mr. and Mrs. Hertel were
then 48 and 43 years of age, respectively. On the property
was an 8.5 acre (3.44 hectare) orchard with low density
fruit trees, a 1,280 square foot residence built in
1945, a 480 square foot picker's cabin built around
1935, a fruitstand built in 1973 (added to in 1982 and
1988 for a total size of 2,590 square feet), and a 450
square foot greenhouse.
Mr. Hertel, a petroleum engineer,
worked overseas for much of his professional life. The
Hertels' plan for Lot 7 was for her parents to live
on the property and operate and improve the fruitstand
business. Then, when Mr. Hertel retired from the petroleum
business, he and his wife would move into the residence
and together profitably operate the orchard/fruitstand
business until 1994 when they would settle into a secure
and comfortable retirement.
The Hertels did make some improvements
to the fruitstand after its purchase, and Mrs. Hertel's
parents did live on Lot 7 and operate the fruitstand
but only until 1984 when her father became seriously
ill. At that time, the Hertels were in Indonesia where
they had lived since 1983. They responded by arranging
to lease out the operation of the fruitstand. This went
on for three years with varying degrees of success until
Mr. Hertel retired from the petroleum business in late
1987. He and his wife then returned from overseas prepared
to implement their dream of continuing to improve the
fruitstand by adding to the fruitstand structure, by
selectively replanting the orchard to provide varied
fruit for sale at the stand, and by offering orchard
tours and an expanded product line, including higher
profit margin items such as fruit leathers and fruit
Though Lot 7 was 4.05 hectares (10
acres) in size, Mr. Hertel testified that only 3.44
hectares (8.5 acres) were plantable, and in fact planted
with fruit, when they purchased the property. The plantable
acreage was divided into an upper bench to the south
and west and a smaller, lower bench in the north east
corner of the property. The lower bench was less desirable
because it had been subject to frost in the past.
Neither of the Hertels had prior
training or experience as orchardists, in retail or
commercial fruit sales, or in what has come to be known
as agri-tourism. Nor was there evidence that they took
serious or in depth professional advice about their
strategies for the orchard and fruitstand. Nonetheless,
in 1988 and 1989, Mr. Hertel removed and replanted approximately
half of the orchard. Rather than selecting amounts and
types suitable for marketing to commercial fruit packing
houses, he planted varied tree fruits to sell at the
fruitstand and to attract tourists for orchard tours.
As a result, the replanted orchard on Lot 7 has plantings
that are not easily, or necessarily profitably, marketable
outside their intended orchard tour "full service" fruitstand
niche, a niche which the Hertels regarded as the leading
edge in agri-tourism. The removal process continued
after 1990, with Mr. Hertel taking out a further .88
acres (0.36 hectares) of Red Delicious, Golden Delicious
and Spartan winter apples from the upper bench, and
a further 2.75 acres (1.11 hectares) of winter and summer
apples and Anjou pears from the lower bench.
In the basic division of labour before
the fruitstand closed, Mrs. Hertel was responsible for
the fruitstand and Mr. Hertel was responsible for the
orchard. They also had full time staff working in the
fruitstand during the summer season, and casual assistance
in the orchard. After 1990, Mrs. Hertel had to redirect
her energies to help her husband in the orchard, yet
she also attempted to maintain a limited retail operation
at the fruitstand which, as she candidly stated in cross
examination, is now just "a very fancy building for
On the valuation date of July 22,
1991, the Hertels were living in the house on Lot 7
and operating the business. Indeed, at the time of the
compensation hearing, the Hertels continued to live
there and operate the orchard, and also continued to
rent out the picker's cabin to an individual who paid
modest rent and worked in the orchard from time to time.
The issues were defined by the general
positions of the parties.
The claimant maintains that the fruitstand
was a profitable operation the viability of which was
destroyed by the loss of highway access and visibility.
She also asserts that a termination allowance is payable
under s. 34 (4) of the Act because special characteristics
of the property and business (such as its unique mix
of tree fruit plantings to supply the fruitstand with
varied product and to accommodate orchard tours, the
proximity of the house to the fruitstand, and the Hertels'
ages and retirement plans) made it impossible to relocate
the business to an alternate location.
The Ministry, in contrast, says that
the fruitstand was never a success, in part because
of its location and less than top grade size and appearance,
and in part because of the Hertels' poor management
of sales, marketing and the plantings in the orchard.
The Ministry also says that the fruitstand was capable
of relocation and therefore the Ministry should not
be accountable for projected business losses associated
with the Hertels' refusal to relocate. According to
the Ministry, the Hertels purchased Lot 7 at the top
of the market in 1981, and their reluctance to sell
it at a loss was the real reason they did not relocate
their business, even after it became apparent that the
Ministry was not going to be able to restore highway
access. The Ministry maintains that the reduction in
value of the remaining land was only $115,000, the amount
of its s. 20 advance payment. It is also prepared to
acknowledge a small compensable business loss while
the fruitstand continued to operate in 1989 and 1990
($11,000), but stands firm that no terminal loss under
s. 34 (4) or other loss is recoverable.
At the outset of the compensation
hearing, it also appeared that the Ministry would argue
that because Mrs. Hertel alone was the registered owner
of the property, she alone was an "owner" under the
Act and she alone could advance a compensation claim.
This had implications for the disturbance damages claim
because though both husband and wife had operated the
business, its income and losses had been attributed
entirely to Mr. Hertel for tax purposes and he, according
to the Ministry, was not an "owner". It became unnecessary
to decide whether Mr. Hertel could be joined as co-claimant
with his wife, however, when the Ministry decided to
agree that as a matter of law any compensable loss or
injury to the business was recoverable by Mrs. Hertel
because it had been carried on as a partnership. The
board granted the claimant's application to amend her
compensation claim to describe the business as a partnership
of Mr. and Mrs. Hertel. Mrs. Hertel remains the sole
claimant, but she has capacity to claim full recovery
under all the heads of compensation advanced.
The following questions remain for
(a) What comparables and adjustments
apply to the determination of the before value of
the remaining land?
(b) Was high density replanting
a viable after use of the remaining land?
(c) What comparables and adjustments
apply to the determination of the after value of the
(d) Is compensation payable for
a terminal loss under s. 34 (4) of the Act?
(e) What compensation is payable
for losses under s. 34 (1) (a) or 40 (1) (b) of the
(f) Is compensation payable for
owners' time and other miscellaneous losses?
4. REDUCTION IN VALUE OF THE REMAINING
4.1 Highest and Best Use
The same property zoning and regulatory
designations have existed throughout. Lot 7 is located
in the Agricultural Land Reserve. It is zoned A2-Agriculture
and designated Farmland on the Official Community Plan.
A2-Agriculture zoning permits a variety of uses including
orchards, home occupation in a single dwelling, auxiliary
dwellings to accommodate farm help, and seasonal fruit
and vegetable stands.
The experts agree that the Hertels'
combined agricultural and residential use of Lot 7 conformed
with the allowable uses for its zoning and was also
its highest and best use before the taking. They also
agree that, while a combined agricultural and residential
use remains the highest and best use, Lot 7 is no longer
a viable location for a fruitstand because of the loss
of direct access and visibility to the highway.
Despite this agreement that the Hertels
were using the property in accordance with its highest
and best use, the parties disagree on a more precise
characterization of that use. The claimant characterizes
the before use as a "full service commercial fruitstand/orchard
tour operation ... with direct access to the highway".
These words are taken out of the report of the claimant's
real estate expert, Frampton, (pp. 19-20), but reference
to the report itself puts them in better context. The
report states that by 1990, "the property had been fully
developed as a full service commercial fruitstand/orchard
tour operation, but in fact had never operated as such,
due to the effects of the reconstruction of the highway."
The Ministry, on the other hand,
portrays the Hertels' operation as, at best, a cottage
industry style, small scale, retail operation. Because
of its zoning and location limitations, the Ministry
objects to any suggestion that Lot 7 was, or could have
become, a "full service" retail or commercial use site.
The parties' different visions of
the Hertels' capabilities and of Lot 7's viability for
a fruitstand business are reflected in their experts'
choices of comparables for the direct comparison approach
to determining value.
4.2 Before Value -- Evidence
Frampton uses only the direct comparison
approach in his valuation of Lot 7. He says he did not
use a cost approach because vacant land sales reflecting
the contributory commercial value of the property for
a retail fruitstand operation were not available. He
concludes that the before value was $385,000, consisting
of $240,000 for land and $145,000 for improvements.
Grant, the Ministry's real estate
expert, uses both the direct comparison and cost approaches.
He concludes that the before value was $265,000 ($266,000
by the cost approach and $250,000 by the direct comparison
approach). This value does not include any equipment
and is said to reflect the value of the property "as
a going concern".
Grant has considered some 15 other
properties and 4 lease comparables, including both of
the comparables that ended up being favoured by Frampton.
The two sales Grant has decided are most relevant, Redies
and Nunes, were residentially improved orchards of similar
size and identical zoning to Lot 7, and located in the
same immediate vicinity as Lot 7 north of Summerland
on the east side of the highway, with highway frontage
and sale dates before December, 1991. Neither the Redies
nor the Nunes properties had fruitstands, but Grant
concludes this could be adjusted for because the barriers
to constructing fruitstands on those properties were
The Redies property, together with
orchard equipment, was optioned in November, 1988 for
$200,000 when it was 9.46 acres, then the sale completed
in March, 1990 for $177,500 when it was 8.47 acres.
The reduced acreage arose because this property was
also affected by the Ministry's improvement of Highway
97. Grant considers the size, topography and soils of
the Redies and Hertel properties to be equal, and the
location and frost factors on the Redies property to
be superior. He has adjusted the $200,000 figure as
follows for a value estimate of $262,500: equipment
-- $15,000; house + $20,000; packing house and garage
versus fruitstand + $40,000; irrigation systems + $10,000;
pavement + $7,500.
The Nunes property was 8.81 acres
and sold in June 1991 for $200,000. It was also affected
by the improvement of Highway 97 in that the Nunes moved
their house further to the rear of the property and
remodeled it to accommodate the Ministry's acquisition
of a strip of land alongside the highway. Grant has
adjusted the $200,000 figure as follows for a value
estimate of $264,000: equipment -- $10,000; pavement
and buildings other than house + $60,000; size + $14,000.
Frampton rejects the comparables
chosen by Grant because they did not have fruitstands
on them. He restricts himself to investigating existing
fruitstand locations and decides that sales of the Trout
Creek and No. 1 fruitstands are the best comparables.
He ultimately chooses Trout Creek as the best indication
of value because it was located in the same municipality
as Lot 7, whereas No. 1 was not.
The Trout Creek fruitstand had the
same zoning as Lot 7, was located on a 4.4 acre lot
cultivated in 50% tree fruits and 50% ground crops,
and included a 1,700 square foot fruitstand, a 1,600
square foot house and two greenhouses. It was located
south of Summerland on the east side of the highway
and sold twice, first in February 1992 for $290,000,
then again in March 1994 for $315,000. The date for
the latter sale is contested by Grant who says that
the sale date was actually March 1993, with the transfer
not being executed until March 1994. Frampton has adjusted
the $290,000 sale figure as follows for a value estimate
of $384,570: time -- $7,250; size + $72,670; improvements
The No. 1 fruitstand sold in June
1993 for $271,000. It was on a 4.01 acre lot which was
split zoned 3.5 acres, A-R (Agricultural Residential)
and .51 acres, C-2 (Commercial - A.L.R.), and cultivated
in 70% tree fruits and 30% ground crops. It was located
on the east side of Highway 97 at Kaleden, and included
a 1,680 square foot fruitstand and a 968 square foot
double wide mobile home on a concrete basement. Frampton
has adjusted the $271,000 sale figure as follows for
a value estimate of $374,045: time -- $23,305; size
+ $77,740; improvements + $48,610.
Frampton makes his adjustments on
the following bases. He derives a time adjustment factor
of 4.3% per annum from the 8.6% increase in the Trout
Creek price between its February 1992 sale and its recorded
March 1994 sale. His size adjustment refers to the Redies
and Nunes sales. Frampton considers their residual land
values to be the best evidence of the value of the balance
of the Hertel acreage. To arrive at a residual land
value, Frampton deducts in each case his estimate of
the value of the improvements, and with respect to the
Redies sale also adjusts for time over 32 months utilizing
a 5% per annum factor. His resulting residual land values
are $10,300 and $13,000 per acre, respectively. Frampton
uses the latter, the Nunes sale, as more reliable since
no time adjustment was necessary. For the improvements,
Frampton uses a $30 per square foot depreciated value
for the residence and a $25 per square foot depreciated
value for the fruitstand, which he identifies as the
adjustments used by Grant in his appraisal of Lot 7.
The Ministry is critical of Frampton's
comparables because, unlike Lot 7, Trout Creek and No.
1 were "full service" fruitstands advertised as having
profitable earning records. Furthermore, Frampton makes
no adjustments for the following facts: the Trout Creek
fruitstand was almost brand new and its sale included
equipment and an additional greenhouse; the No. 1 fruitstand
was split zoned Commercial, which permitted a wider
range of development than was permissible for Lot 7;
and the residence on the No. 1 property had a panoramic
view of Skaha Lake.
The Ministry is also critical of
Frampton's adjustments for time and improvements. Both
the sale and the resale of the Trout Creek fruitstand
occurred long after July 22, 1991. Frampton's time adjustment
is incorrectly based on a resale date of March 1994,
given Grant's evidence that the sale transaction occurred
a year earlier in March 1993 but was not registered
until 1994. Frampton uses the per square foot improvement
values derived by Grant for Lot 7 without regard to
their applicability to his comparables; and, the $25
per square foot rate used for the fruitstand, while
stated by Frampton to be a depreciated rate, is not.
Frampton includes the storage area in his calculations
for the claimant's fruitstand, but not for his comparables,
and also fails to account in any way for functional
differences among the improvements.
Finally, while considering the $13,000
per acre value used by Frampton to adjust for size differences
between his comparables and Lot 7 to be a little high,
the Ministry is most critical of the overall result
of Frampton's approach. Taking his before value of $385,000
and adjusting it with his per square foot improvement
rates, yields an improvement value of $120,000 and thus
a $26,500 per acre residual land value for the Hertel
property. The Ministry argues that no comparable sale
at or near the valuation date commanded an amount close
to this price, and that even Frampton's preferred Trout
Creek comparable, after adjustments for location and
size but before adjustments for time, equipment included
and goodwill, indicated a comparative land residual
value of less than $16,000 per acre for Lot 7.
4.3 Before Value -- Analysis
It stands to reason, and is evident
from the photographs of various fruitstand operations
included in the expert reports, that not all fruitstands
are created equal in their physical attributes. But
this confronts the issue from the viewpoint of the improvements
and not the land itself. In terms of the value of the
land, Frampton's rejection of Grant's comparables because
they did not have fruitstands on them and his restriction
of his investigation to comparables with existing fruitstands,
is untenable. Provided the land could be developed as
a fruitstand/orchard tour business, its improvements
in this instance are not relevant to the determination
of land value. The board accepts Grant's undisputed
evidence that the barriers, if any, to constructing
fruitstands on his two preferred comparables (Nunes
and Redies) were minor and could be overcome.
This leaves us to determine which
comparables are best in relation to Lot 7. We have decided
that the Nunes and Redies comparables relied on by Grant
are the best. Our preference rests on three bases: both
have transaction dates close to the valuation date;
they are located close to the claimant's property; and,
they are comparable in size to it. The result is greater
reliability because minimal or no adjustment is required
for these factors. In contrast, both of Frampton's chosen
comparables, the Trout Creek and No. 1 fruitstands,
are approximately half the size of Lot 7 and therefore
require considerable size adjustment. We also find persuasive
the Ministry's criticisms of how Frampton made these
adjustments and the resulting per acre value. The evidence
at the compensation hearing as to the transaction date
for the Trout Creek comparable also casts considerable
doubt as to the accuracy of Frampton's time adjustment
for this transaction. Both appraisers use the same per
square foot values in adjusting for improvements: namely,
Grant's values for the Hertel improvements. However,
Frampton uses Grant's values without further adjustment
for the age and condition of Frampton's comparables,
raising further concerns.
The board finds that Grant's adjustments
to the Nunes and Redies sale values are reasonable,
and notes that the claimant did not challenge these
adjustments. The estimated value Grant derives from
these two comparables and their adjustments results
in a before value range for Lot 7 of between $262,500
and $264,000. Using the cost approach, Grant derives
a value of $266,000, based on a land value of $12,000
per acre and a total improvements value of $146,000.
He concludes that the value of the remainder Lot 7 as
a going concern (excluding equipment) prior to the taking
was $264,900. The board prefers this value to Frampton's
for the reasons noted above and accepts $264,900 as
the before value of the remaining Hertel property.
4.4 After Value -- Evidence
There are two main differences between
the experts' approaches to an after valuation. Firstly,
Frampton values Lot 7 as vacant orchard land without
attributing any value to the improvements (even though
the Hertels continued to live in the residence, make
back yard fruit sales and rent out the picker's cabin),
whereas Grant attributes residual value to the residence
and most of the outbuildings. Secondly, the Ministry
argues for the viability of a high density replant of
the orchard in varieties suitable for sale to commercial
packing houses, whereas the claimant says that the best
that could be hoped for would be direct roadside bulk
The result for Frampton is a rounded
after value of $80,000. This is based on a vacant agricultural
land calculation at a rate of $8,000 per acre which,
when subtracted from his before value of $385,000, gives
a loss in property value of $305,000, the amount claimed
by Mrs. Hertel. Frampton derives his $8,000 per acre
rate from an examination of three of his vacant agricultural
land comparables (Nos. 3, 4 and 5) which had per acre
sale rates of $9,465, $7,590 and $10,350, respectively.
In Frampton's view, No. 3 and No. 4 illustrate the upper
and lower limit of an excellent production orchard property
versus a marginal property with trees removed in favour
of alternative agricultural use, and the mixed plantings
on Lot 7 point to a mid-value between those two comparables
of $8,000 per acre.
Even though the Ministry argues that
a high density replant was feasible for Lot 7, Grant
adopts a vacant agricultural land after value rate of
only $9,000 per acre ($90,000). He derives this from
his $12,000 per acre before land value less 25%. To
this he adds values for improvements: $43,400 for the
residence based on a 30% discount from its before value,
and $19,000 for the greenhouse and outbuildings, other
than the fruitstand which Grant considers to have lost
all utility. The result for Grant is a rounded after
value of $150,000 which, when subtracted from his before
value, gives a loss in property value of $115,000, the
amount of the Ministry's advance payment under s. 20
of the Act.
4.5 High Density Replant --
There is no issue that Lot 7 was
no longer a viable fruitstand location after the Ministry's
acquisition of the wedge and the loss of direct access
to Highway 97. Where the experts differ is on whether
a high density replant was a viable alternative use
for the property.
McTavish, the claimant's expert in
agricultural economics, has reviewed the viability of
a high density apple replant at length and concludes
that such a conversion was not economically feasible.
His conclusion is based on a model incorporating: a
full time orchard manager for the first three years
at an annual salary of $45,000; a new tractor and sprayer
at a cost of $35,000; and, an orchard fan at a cost
of $42,000, to prevent losses from frost.
Schroeter, the Ministry's expert
in agricultural economics, challenges certain of McTavish's
cost and revenue assumptions and has run further models
to demonstrate the impact of various changes to McTavish's
assumptions. Schroeter concentrates on one model (Schroeter
Case 5) which he bases on McTavish's preferred model
(McTavish Scenario B) with the following changes: replant
grant of $3,000 per acre; Okanagan yields and costs
(as opposed to 80% of yields and full costs for the
Creston area); full replant in year one (as opposed
to replanting 50% in year one and 50% in year two);
purchase of an orchard fan in year three (as opposed
to year one); reduction in professional costs to $10,000
in year one and $5,000 in year two; and, utilization
of actual sale prices for years 1992 to 1994 inclusive
and a current estimate of the 1995 price.
Schroeter testified that he assumes
a replant grant of $3,000 per acre because it has been
available in the Okanagan since at least 1991. As data
is available on Okanagan yields and costs, he uses these
in preference to McTavish's Creston data. While a 100%
replant in year one increases year one costs, it results
in greater productivity in years two and following and
a better return. Schroeter reasons that since there
would have been little or no production to protect in
years one and two and there was provision for crop insurance
in the model, it is appropriate to move the orchard
fan investment to year three. He is also of the opinion
that McTavish's provision for an orchard manager at
$45,000 per year over and above all required labour
is not supportable given the availability of considerable
free advisory resources in the Okanagan. Schroeter considers
consulting advice only, at $15,000 spread over the first
two years, would be easily adequate. With respect to
pricing Schroeter testified that, while McTavish's preferred
model pricing assumption is conservative and reasonable,
comparison to actual prices proves it was too pessimistic.
Incorporating these adjusted assumptions,
Schroeter's preferred model results in the operation
breaking even in year 6 versus year 14 for McTavish's
preferred model. Assuming the purchase of a less costly
orchard fan and the netting of the cost of the tractor
and sprayer against the value of larger format equipment
no longer needed, Schroeter notes there would be a further
improvement in the internal rate of return. Schroeter
concludes that, while investment in high density replanting
might not have been a suitable choice for the Hertels
personally, it was a financially viable alternate use
for their property. And in his opinion, even had the
Hertels continued with their fruitstand, their existing
plantings would have needed modification.
Grant, the Ministry's other expert
witness, is an agrologist as well as a real estate appraiser.
He suggests in his report that consideration should
be given to replanting the Hertel orchard to more modern,
productive and marketable varieties, and that direct
sales of bulk fruit were still possible from Lot 7.
He testified that while certain Hertel varieties were
suitable for direct marketing, others required replanting,
the need for which in his view always existed and was
accelerated by the taking. According to Grant, many
of the pre-acquisition plantings on Lot 7 were old and
not in keeping with market tastes, and greater efficiencies
could have been achieved by high density planting. He
concludes that varieties not suitable for direct sales
could have been replanted to varieties suitable for
sale to commercial packing houses and pedlars.
4.6 After Value and High Density
Replant -- Analysis
Whether Lot 7 could have been viably
replanted as high density orchard (i.e. whether its
highest and best use after the taking was as commercial
orchard or alternative agricultural use) is critical
to the choice of after value comparables.
Grant considers the highest and best
after use to be orchard and homesite with fruit varieties
more conducive to a direct marketing operation than
to a commercial orchard. He recommends consideration
of replanting to more modern, productive and marketable
varieties and considers a high density replant to be
Frampton, on the other hand, concludes
that without the fruitstand, the remaining property
is marginal orchard land capable only of an alternative
agricultural use and, on the basis of the McTavish report,
not suitable for conversion to high density fruit trees
or other potentially profitable crops. For this reason,
he prefers his comparable No. 4 which had a marginal
alternative agricultural use, over his comparables Nos.
3 and 5, both of which had uniform production.
Weighing the evidence of McTavish,
Grant and Schroeter, the board prefers that of Grant
and Schroeter and concludes that high density replanting
was an agriculturally and economically viable after
use of the property. In particular, the board finds
Schroeter's model for replanting persuasive and also
agrees with him that, while he would not have recommended
such a course to the Hertels in view of their plans
to retire, a high density replant was not only viable,
but possibly the most viable, use of the remaining land.
Having concluded that a high density
replant was viable, the board cannot accept Frampton's
choice of his comparable No. 4 as the basis for an $8,000
per acre after land value. His comparable Nos. 3 and
5 are better choices, with values of $9,465 and $10,350
per acre respectively. Grant bases his after land value
on his before land value of $12,000 per acre, less 25%,
to arrive at an after land value of $9,000 per acre.
The board finds Grant's analysis reasonable. If the
same approach is applied to the $13,000 per acre before
value used by Frampton for size adjustments, the result
is an after value of $9,750 per acre. On balance, the
board considers Grant's after land value of $9,000 per
acre most appropriate.
The experts' estimated after values
for the residence (Frampton -- $0; Grant -- $43,400)
account for much of the divergence between their overall
after values. The claimant justifies its position on
the basis that before the Ministry's acquisition of
the 30 square metre wedge, there was an advantage in
having the house close to the fruitstand which made
up for its proximity to the highway. On that argument,
the loss of the fruitstand eliminated any benefit the
house had gained from being close to the highway and
turned it into a distinct disadvantage, since the house
is now in a hole next to the highway.
Does the fact that the house and
picker's cabin are not only still habitable, but have
been continuously lived in by the Hertels and their
tenants, reflect in the remaining property's value to
a potential purchaser, or is it merely a use peculiar
to the Hertels which does not affect property value?
Grant refers to a previous study
by his firm concerning the impact of proximity of highways
on residential properties, which indicated that the
impact was 25% to 30% in the most severe cases, where
buffering after the project was not possible or not
practical. In Grant's view, while the highway project
moved the travelled lanes closer to the Hertel home
and left it in a hole, a solid board fence and hedge
could provide considerable relief from these impacts.
According to Grant, a similar impact on the Nield property
across Highway 97 did not result in a reduction in rentals
for that property or a loss of occupancy. He estimates
the loss to the residential component of the Hertel
property at 30% of the before value of the house, landscaping
and septic of $62,000, to arrive at an after value for
these improvements of $43,400. Grant attributes no value
to the fruitstand, but continues to value the other
outbuildings, including the picker's cabin and greenhouse
The board finds Grant's approach
reasonable, particularly in view of the continued use
and therefore utility of the improvements he considers
to have ongoing value. The board rejects Frampton's
vacant land approach, accepts Grant's estimate and finds
the after value of the land and improvements to be $150,000.
Therefore, the reduction in market value to the remainder
of Lot 7 is, rounded, $115,000.
5. DISTURBANCE DAMAGES
The parties disagree on the inherent
potential of the Hertels' business. They disagree on
whether the Hertels had or demonstrated the ability
to operate it competently and profitably. They also
disagree on the feasibility of relocating the business.
The claimant believes that the business
was capable of development as a top grade fruitstand/orchard
tour enterprise, and that she and her husband were in
the process of doing that when access and visibility
were cut off by the Ministry's changes to Highway 97.
She also believes that their unique business and personal
circumstances made it impossible to relocate to another
site. Her counsel describes the claim for business interruption
and terminal loss as follows in written submissions:
Bonaterra Orchard clearly provided
a personal livelihood for Ted and Marisa Hertel; they
were occupied full time in its operation.
The impact of the taking had brought
about a personal loss of income which they would have
enjoyed but for the taking.
The loss should be calculated with
regard to the circumstances of the owner; here it
was a reasonable expectation that the owner would
operate Bonaterra Orchard and derive an income therefrom
until 1994 and that the loss of that opportunity could
not reasonably have been mitigated by seeking employment
elsewhere between 1991 and 1994.
The Ministry maintains that the Hertel's
operation was never in the best location or of the highest
grade for a fruitstand, and that these problems were
compounded by the Hertels' inexperience and mismanagement.
The Ministry portrays the business as one that never
generated a profit, had no goodwill, and was always
destined to be a marginal operation. It concedes a modest
business interruption loss of $11,000 in 1989 and 1990,
but no terminal loss because the Ministry says that
the business was capable of relocation.
5.2 Terminal Loss -- Evidence
Section 34 (4) provides that
where the board determines that it is not feasible for
an owner to relocate their business, there may be included
in the compensation that is otherwise payable, an additional
amount not exceeding the value of the goodwill of the
Features of the business relied upon
by the claimant to establish that relocation was not
feasible were that it would have created difficulties
in transporting fruit to the fruitstand, that relocation
was incompatible with their business plan which contemplated
retirement at the end of 1994, and that relocation would
have made it impossible to run orchard tours. Did characteristics
peculiar to the Hertels' business, combined with the
age of the claimant and her husband, make it not feasible
for them to relocate the fruitstand business, or did
the Hertels simply choose not to relocate for personal
The first of these arguments seems
to turn on the prospect of moving the fruitstand alone
onto a new property. We reject this in the face of the
evidence. The Redies property located just south of
Lot 7 was a suitable, if not superior, property for
an orchard/fruitstand. Similarly, the Nunes property
located nearby was also suitable for development of
an orchard/fruitstand business, and changed ownership
in June 1991. The board heard evidence that, even at
the time of the compensation hearing, the Kita fruitstand
was opening on leased land just south of Lot 7, at the
southwest corner of Jones Flat Road and Highway 97.
Rather than having direct highway access, the Kita fruitstand
will be accessed from a short street immediately off
the highway. Because Kita is the first fruitstand on
the south bound side of the highway after Peachland,
Grant considers that its location is actually superior
to the east side location of Lot 7. All of these properties
have access to Highway 97 and were developable as fruitstand
operations by building a fruitstand and applying to
the Ministry for a highway access permit. The board
concludes that relocation of the claimant's business
was feasible, given the existence of suitable nearby
properties, particularly the Redies and Nunes properties
which included orchards comparable in size to the orchard
on Lot 7.
As for interference with the Hertels'
"business plan", the board accepts that, before the
highway improvement project, the Hertels had intended
to live on Lot 7 and operate their orchard/fruitstand
business until their retirement, which they probably
hoped would be sooner rather than later. The board rejects
these intentions, however, as a basis for concluding
that it was not feasible for the claimant to relocate
the business within the meaning of s. 34 (4) of
the Act. A determination under s. 34 (4) that it
is not feasible to relocate a business is intended to
reflect business reality, and that the reason presented
by the claimant represents, more or less, her personal
preference and choice rather than business reality.
As for the Hertels' intention to
run orchard tours, the board is not satisfied that Mr.
Hertel's replanting of the Lot 7 orchard with varied
fruit types was so advanced or so unique a project that
it could not have been pursued on another site. While
Mr. Hertel clearly believed that his varied plantings
were critical to running orchard tours, other witnesses
(Grant and Spence) did not attach particular importance
to this feature for the success of the orchard tours.
The board concludes that Mr. Hertel's plantings on Lot
7 did not make it not feasible, that is impracticable
or impossible, for the claimant's business to be relocated.
The claimant's evidence on the issue
of relocation also tended to be somewhat vague, which
reinforced the board's impression that she did not seriously
or objectively consider relocating to nearby lands.
Thus, even though the claimant asserted that she and
her husband "considered all the options", the board
has been left with evidence from the Ministry of suitable
nearby properties, and no concrete evidence from the
claimant as to why those properties were not suitable
for relocation following Lot 7's dislocation in 1990.
The board concludes that the claimant's age and desire
to stay on Lot 7 until retirement did not make it not
feasible for the business to be relocated.
The question of partial relocation
of the claimant's business on or adjacent to Lot 7 was
also raised but was shown not to be feasible. While
the Ministry's project has left the south-eastern part
of Lot 7, the Hertels' home and fruitstand, in a hole
in relation to the grade of the highway, the north-eastern
corner of Lot 7 is not so affected and has simply ended
up bordering a surplus fill area which is actually the
old pre-improvement highway road allowance. There was
evidence that the claimant did inquire with the Ministry
about moving the fruitstand onto the old road allowance,
but was informed by a letter dated December 20, 1990,
and possibly earlier as well, that this was not a suitable
location. A number of reasons were given, including
concerns about the stability of the road allowance for
commercial purposes and the unavailability of safe left
turn access off the highway.
Having reached the conclusion that
it was feasible for the claimant to relocate her business,
a termination allowance under s. 33 (4) is not
available. It is therefore unnecessary for the board
to consider the applicability of Plouffe v. Ottawa
(City) (1973), 4 L.C.R. 37, a decision of the former
Ontario Land Compensation Board, cited by claimant's
counsel, dealing with a termination allowance where
relocation was determined not to be feasible.
5.3 Business, Financial and
Personal Losses -- Evidence
The claimant's business loss claim
of $188,324 is derived from the report of Pellegrin,
her business valuation expert. He bases his calculation
on the difference between what the Hertels earned through
the orchard from 1989 to 1994, and what they projected
they would have earned from the orchard over the same
period had there been no highway project.
In calculating projected earnings,
Pellegrin uses the Hertels' revenue figures, but has
adjusted their projected cost of sales and wages upward.
Pellegrin takes into account: prior years sales and
the expectation of increased sales from the expanded
fruitstand; traffic volume information indicating slowly
increasing volumes; and, discussions with people knowledgeable
in the fruitstand and orchard tour businesses. Pellegrin
concludes that the Hertels' key assumptions were reasonable:
maximum sales of $150,000 per year achievable by 1994;
maximum own produce sales of $60,000 per annum by 1993;
and orchard tour revenues ranging from $1,000 in 1989
to $20,000 in later years. Pellegrin's adjustments to
the Hertel projections are: to increase the cost of
purchased fruit and vegetables from 50% to 60%; to increase
the cost of self processed products from 20% to 33%;
to increase the cost of snackbar supplies from 25% to
33%; and to increase wages from $6,000 plus 5% of sales
over $50,000, to $6,000 plus 10% of sales over $50,000,
with a corresponding increase in the cost of employee
benefits at a factor of 12% of wages.
Spence, the Ministry's business valuation
expert, approaches the same analysis as Pellegrin, but
arrives at a loss of only $68,000. On the revenue side,
Spence has projected smaller percentage increases than
the Hertels for sales of both purchased produce and
own produce. With respect to revenue from orchard tours,
Spence has introduced probability factors to account
for various risks outlined in his report. These probability
factors reduce projected orchard tour revenues by one-quarter
in 1990 and one-half thereafter. Spence's adjustments
result in overall revenue reductions of $8,600 for years
1989 and 1990 and $70,200 for years 1991 through 1994.
The maximum revenue he projects is $126,000 in 1994.
Comparing the experts' projected
expenses, the board found it useful to look at the first
two years (1989 and 1990) as one unit and the following
4 years (1991 through 1994) as another unit. There is
little difference in total projected expenses for the
years 1989 and 1990, with Pellegrin's total projected
expenses being $370 higher than Spence's. The real difference
arises in the years 1991 through 1994, and is largely
attributable to only two items: Spence's inclusion of
a contingency adjustment aggregating $18,000 over the
four years; and a difference in projected advertising
costs, with Pellegrin projecting expenses of $10,800
over the four years and Spence projecting $23,000 over
the same period. These two items account for all but
$3,550 of the difference between the experts' expense
projections for 1991 through 1994. A difference in estimated
depreciation/amortization of $1,000 per year more than
accounts for that remaining $3,550.
Detailed review of the other expense
items shows that while Spence is higher in his estimates
for some items and Pellegrin lower, the reverse is also
true. Pellegrin is higher on costs of sales of processed
products, wages, packaging, and replanting; Spence is
higher on costs of sales of purchased fruit, orchard
tour wages, repairs and maintenance, fertilizers and
pesticides, contract pruning, and under the miscellaneous
The claimant says that Spence's adjustments
are overly conservative in their emphasis of the unproven
nature of some aspects of the Hertels' projections,
and that his approach unfairly penalizes the claimant
when it is the Ministry that is responsible for depriving
the claimant of an opportunity to realize on her investment
in her business.
5.4 Business, Financial and
Personal Losses -- Analysis
Section 34 (1) (a) of the Act provides
for the payment of disturbances damages consisting of:
(a) reasonable costs, expenses
and financial losses that are directly attributable
to the disturbance caused to the owner by the expropriation;
Section 40 (1) (b) of the Act, which
deals with partial takings, provides for compensation
(b) reasonable personal and business
losses that are directly attributable to the taking
or that result from the construction or use of the
works for which the land is acquired.
It was not until late 1990 or early
1991 that the Hertels learned that highway access would
not be restored, and it was therefore reasonable for
them to continue their business from the start of construction
in 1989 through the 1990 summer season. The board finds
the business losses arising in these two years are compensable
under section 40 (1) (b) of the Act. Pellegrin
projects these losses at $23,000 while Spence projects
them at $11,000. The bulk of the difference arises out
of the experts' estimates of projected revenues for
these two years.
Spence's revenue projections are
conservative, while Pellegrin's are more aggressive.
Pellegrin cites various factors to support his revenue
projections: the Hertels' facilities had been improved
in 1988; traffic volumes were steadily increasing; despite
construction in 1989, actual revenues increased to $54,800
in 1989 from $47,127 in 1988; in 1990, the period of
operation was extended into the months of May, June
and October; and, projected increases in subsequent
years were consistent with the experience of the Hertels'
competition and the industry in general. On the basis
of these factors, the board accepts that Pellegrin's
projection of maximum revenues of $150,000 in 1994 was
While estimates as to the mix of
own produce versus purchased produce and year over year
percentage increases are less certain, the board also
accepts Pellegrin's projections in these aspects as
Reviewing Spence's projections on
an overall basis, we think Spence layered conservatism
on conservatism. This is particularly evident in his
reduction of orchard tour revenues by factors of 20%
in 1989, 25% in 1990 and 50% thereafter, his lower other
revenue projections in all years, and then his subsequent
layering in of a 5% contingency on the expense side.
The board concludes that Pellegrin's projections are
more reasonable and, with one exception, accepts them
for the purpose of quantifying the businesses losses
suffered in 1989 and 1990. The exception is that the
board agrees with the adjustments made by Spence to
actual income, which restate income on a before interest
and taxes basis, and also deduct capital expenditures
and capital cost allowance in view of the depreciation
approach utilized by both experts. Using Pellegrin's
projected income before interest and taxes for 1989
of $4,246 and for 1990 of $15,780, and Spence's adjusted
actual income for those same years indicating a profit
of $1,000 in 1989 and a loss of $1,000 in 1990, the
business loss for those years aggregates $20,026. The
board finds the claimant is entitled to compensation
for this amount as a business loss under section 40 (1) (b)
of the Act attributable to the construction of the highway
during the years 1989 and 1990.
During 1991 to 1994, the fruitstand
operation was no longer feasible, but the Hertels switched
to back door direct sales rather than relocating their
business. Since the board has found that it was feasible
to relocate the business, their mitigation of losses
becomes relevant. The Hertels' options were to discontinue
all operations and seek alternate employment; to sell
the property and relocate their business, in which case
they would have been entitled to relocation costs under
section 34 (1) (b); or to scale back and sell
their orchard produce as best they could. However, an
open-ended claim for financial losses under s. 34 (1) (a)
or for personal and business losses under s. 40 (1) (b)
is not an option under the Act.
The Hertels chose to scale back and
sell their orchard produce as best they could, without
replanting high density varieties, and they continued
in this vein despite, according to their own calculations,
experiencing losses in every year or, according to Spence's
adjusted actual income calculations, only breaking even
over the four years.
The question put by the Ministry
is why it should be required to support the continuation
of a bad business. The claimant argues that it was the
only option open, given the Hertels' ages and plans
for their business. We have addressed the issue of relocation
above and have found that, while relocation might not
have been the personal choice of the Hertels, it was
feasible. The claimant argues that she and her husband
could not mitigate their loss of income by seeking employment
elsewhere. Utilizing Pellegrin's projections of income
before interest and taxes for the four years in question,
the average income from the fruitstand operation, had
there been no highway project, would have been in the
range of $40,500 per annum. While recognizing the age
of the Hertels and that neither of them was employed
outside Lot 7 after 1988, the board finds that seeking
outside employment to replace their fruitstand income
would have been a more reasonable course of action than
the path they chose. Considering their age, qualifications,
experience and abilities, the board finds that together,
Mr. and Mrs. Hertel could have obtained employment within
a year to replace the level of income Pellegrin projects
they would have achieved from Lot 7 in the absence of
the Ministry's highway improvement project.
The board agrees with the Ministry
that it should not have to support the continuation
of a business which is not successful. In our view,
the Hertels' choice to switch to back door direct sales
was not a reasonable attempt to mitigate their losses
given the other options open to them. All other things
being equal, the most reasonable course of mitigation
was for the Hertels to relocate their business. However,
given their personal preferences, in particular their
desire to retire after 1994, their decision not to relocate
was understandable. In this context, the most reasonable
course of mitigation open to them was to cease operations
and seek outside employment to replace their lost income.
The claimant says this would not have been reasonable
in view of the fixed costs of the Lot 7 operation. However,
no analysis of fixed costs was presented and the only
evidence on this point is that in Pellegrin's report
indicating the following annual fixed costs: mortgage
interest $5,837; property taxes and irrigation $603;
insurance $778 and electricity $1,122. Pellegrin acknowledges
that some of these costs would reduce if operations
ceased and that a portion of these costs (mortgage interest,
property taxes, insurance and electricity) were attributable
to the home, in any event. We are not persuaded that
there is sufficient evidence on this point to establish
losses related to ongoing fixed costs attributable to
the fruitstand operations, which could not otherwise
have been mitigated.
The board denies the claim for compensation
for business losses from 1991 to 1994. We do find, however,
that even if the Hertels had ceased operations and sought
alternative employment to mitigate the loss of their
business, they would have experienced a personal loss
equivalent to one year's average income of $40,500.
The claimant is therefore entitled to compensation for
this personal loss in the amount of $40,500 under section
40 (1)(b) of the Act.
5.5 Owners' Time and Other
Losses -- Evidence and Analysis
The claimant adduced evidence relating
to a number of possible other losses including claims
for expenses, for owners' time, for capital expenditures
wasted, and for unsold fruitstand inventory.
Claimant's counsel characterized
this part of the claim as follows in written submissions:
Evidence was led of executive time,
unsold inventory and out-of-pocket expenses related
to dealing with the respondent on this matter. Those
losses or expenses are either included in the business
loss calculation or they are costs eligible for recovery
under s. 44  of the Act. The evidence, however,
provides confirmation that business losses were suffered.
Evidence was also led of certain
capital investments made by the Hertels in the subject
property. If compensation is awarded for business
losses as claimed, then no further compensation would
be required in respect of that investment. However,
if such losses are not awarded, an award should be
made in respect of the portion of such investment
which was wasted due to premature termination of the
Schedules tendered by Mr. and Mrs.
Hertel contain a miscellany of expenses incurred, and
activities undertaken, by them from 1989 to 1994. Some
of the expenses and activities relate to their operation
of, or attempts to continue operating, the business
on Lot 7. Some relate to their dealings with lawyers,
experts and the Ministry concerning the taking or its
No award is warranted for owners'
time and other expenses in 1989 and 1990. The board
has already awarded the claimant $20,026 for business
losses in 1989 and 1990, and will also be making an
order for costs under s. 45 of the Act. The owners'
time claimed for that period is already included in
the business loss award. The other expenses, if they
are compensable, are costs incurred to advance the compensation
claim which fall to be claimed under s. 45 of the Act.
Some minor advertising commitments
made very early in 1991, while the Hertels were still
pursuing the issue of restored highway access, and mower
repairs due to highway construction disturbance, are
compensable. Based on the Hertels' testimony, and in
the absence of receipts, $700 is awarded for these items.
The remaining miscellaneous expenses
claimed for 1991 relate to dealings with lawyers, experts
and the Ministry concerning the taking or its impact,
and thus, if they are compensable, must be pursued under
s. 45 of the Act. The other expenses claimed for 1992
to 1994 also fall under this category.
Owners' time is also claimed for
1991 to 1994. The Ministry opposes this on the ground
that owners' time spent advancing the compensation claim
is not compensable. Claimant's counsel answers by saying
that the claim is for "executive time" lost
dealing with business difficulties, negotiations or
discussions arising out of the taking. The problem,
in the board's view, is that executive time loss is
not compensation for time spent per se. Rather,
it is a business loss which can only be made out by
showing an actual out-of-pocket loss to the claimant's
business. In this case, the board has found that in
1991 the Hertels ought to have either relocated their
business or, if they chose not to relocate it, mitigated
their damages by seeking alternative employment. The
Hertels did neither. Their time spent dealing with the
taking or its impact is not, in these circumstances,
an executive time business loss.
The claim for wasted capital investments
covers an extensive list of acquisitions by the Hertels
from 1981 to 1990. The board rejects this claim in its
entirety. It appears to include the original purchase
cost of Lot 7 and its improvements, costs for upgrading
the fruitstand and house, for replanting the orchard,
for paved parking and signage, and for orchard machinery
and fruitstand equipment still owned by the Hertels
after the taking. We accept the position of the Ministry,
which is based on the opinion of Pellegrin, the claimant's
business valuer, who wrote as follows to claimant's
counsel on April 13, 1995:
The majority of the fixed asset
value is included in the real property and in my opinion
reflected in the real estate appraisal. The applicable
fixed asset accounts that are likely part of the realty
are as follows:
House renovations and improvements
Other fixed asset accounts include
Machinery and automotive
Regarding fruitstand equipment,
by disposition of assets, the Hertel's [sic] have
recovered most of their initial investment.
Machinery and automotive includes
a 1987 Nissan pickup, a tractor and sprayer equipment
as well as miscellaneous items such as chainsaw. These
assets either are used personally or have residual
value which approximates their present depreciated
I believe the loss on diminution
of capital assets is either included in the appraisal
of the real property or is not a significant amount.
The claim for unsold inventory is
$3,258.68 and was apparently not advanced prior to the
commencement of the hearing. The Ministry takes the
position that, assuming this amount reflects wholesale
not retail costs and none of the items was later resold,
then the claimant should be compensated. It is concerned,
however, that because this claim was not made earlier,
it should not affect the adequacy of the advance payment
or attract any interest. We agree and award a rounded
$3,259, with no interest until the conclusion of the
evidence at the compensation hearing.
The board awards interest under s.
46 (1)(b) of the Act as follows:
(a) Reduction in value to the remainder
($115,000) -- The claimant submits that interest should
run from July 22, 1991, the parties' agreed valuation
date, and also the date of the agreement under s.
3 of the Act. Since the Ministry's advance payment
of $115,000 was not made until July 29, 1991, interest
on $115,000 will be payable for the seven day period
between the valuation date and the date of the advance
(b) Business losses ($20,026) --
This figure consists of $3,246 for 1989 business losses
and $16,780 for 1990 business losses. In accord with
the claimant's submission that interest on business
losses should run from the end of each year in which
they were suffered, interest will run from December
31, 1989, on $3,246 and from December 31, 1990, on
(c) Unsold fruitstand inventory
($3,259) -- Since the claimant did not particularize
these items until the compensation hearing, interest
will only run from the conclusion of the evidence
at the hearing on June 30, 1995.
(d) Personal losses ($40,500 and
$700) -- In accord with the claimant's submission
that interest on personal losses should run from the
end of each year in which they were suffered, interest
will run on these amounts from December 31, 1991.
Section 46 (4) of the Act is
applicable because the amount of the Ministry's advance
payment ($115,000) is less than 90% of the compensation
awarded excluding interest and business loss ($156,200).
The board has no discretion here. Additional interest
on $156,200 of the award will run at an annual rate
of 5% from July 29, 1991, the date of the advance payment,
to the date of this decision.
The claimant will have her costs
for asserting her claim. In the event that the parties
do not agree on the amount of costs to be paid, they
will be determined by the chair or vice chair in accordance
with s. 45(10) and (11) of the Act.
The board concludes that the claimant
is entitled to an award of $179,485, consisting of $115,000
for the reduction in the value of the land remaining
after the Ministry's taking, $20,026 for business losses
in 1989 and 1990, $3,259 for unsold fruitstand inventory,
and personal losses of $40,500 and $700.
THEREFORE IT IS ORDERED THAT
The Ministry shall pay the claimant:
1. Compensation under s. 40 (1) (a)
for reduction in market value to the remaining land
2. Compensation under s. 40 (1) (b)
for business losses of $23,285;
3. Compensation under s. 40 (1) (b)
for personal losses of $41,200;
4. Interest under s. 46 (1)
on $115,000 from July 22 to 29, 1991; on $3,246 from
December 31, 1989 until paid; on $16,780 from December
31, 1990 until paid; on $3,259 from June 30, 1995 until
paid; and, on $41,200 from December 31, 1991 until paid,
payable at the following rates:
(a) Thirteen and one-quarter per
cent (13.25%) from January 1, 1990 to June 30, 1990.
(b) Fourteen and three-quarters
per cent (14.75%) from July 1, 1990 to December 31,
(c) Twelve and three-quarters per
cent (12.75%) from January 1, 1991 to June 30, 1991.
(d) Nine and three-quarters per
cent (9.75%) from July 1, 1991 to December 31, 1991.
(e) Eight per cent (8.00%) from
January 1, 1992 to June 30, 1992.
(f) Seven per cent (7.00%) from
July 1, 1992 to December 31, 1992.
(g) Seven and one-quarter per cent
(7.25%) from January 1, 1993 to June 30, 1993.
(h) Six per cent (6.00%) from July
1, 1993 to December 31, 1993.
(i) Five and one-half per cent
(5.50%) from January 1, 1994 to June 30, 1994.
(j) Eight per cent (8.00%) from
July 1, 1994 to December 31, 1994.
(k) Eight per cent (8.00%) from
January 1, 1995 to June 30, 1995.
(l) Eight and three-quarters per
cent (8.75%) from July 1, 1995 to December 31, 1995.
(m) Seven and one-half per cent
(7.5%) from January 1, 1996 to June 30, 1996.
(n) Six and one-half per cent (6.5%)
from July 1, 1996 to December 31, 1996.
(o) Four and three-quarters per
cent (4.75%) from January 1, 1997 to June 30, 1997.
5. Additional simple interest under
s. 46 (4) on $156,200 at an annual rate of five
per cent (5.00%) from July 29, 1991, to the date of
6. The actual reasonable legal, appraisal
and other costs necessarily incurred by the claimant
for the purpose of asserting her claims in this proceeding
as agreed by the parties, or failing that, as determined
and allowed on an application to the board under s.