R. v. Gerencer (1979), 105 DLR (3d) 284, [1980] 1 SCR 403

Supreme Court of Canada

R. v. Gerencer, [1980] 1 S.C.R. 403

Date: 1979-10-02

Her Majesty The Queen Appellant;

and

Steve Gerencer Respondent.

1979: March 26; 1979: October 2.

Present: Ritchie, Pigeon, Dickson, Beetz and Estey JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Expropriation—Compensation—Residential property—Property including other buildings and benefits—Purposes of residence—Special value to owner—“Home for a home” provision—Amenities to be included in “residence”—Expropriation Act, R.S.C. 1970 (1st Supp.), c. 16, as amended, ss. 23, 24.

Respondent’s property (21.02 acres) was expropriated in connection with the proposed Toronto International Airport. The Notice of Confirmation was registered on January 30, 1973. On the property was a bungalow built in 1967 with a living area of 1,400 square feet. There was also an attached two-car garage, a barn of approx. 2,880 square feet, an implement shed and a workshop, a pond, cultivated garden (approx. 15,000 square feet) and a tree nursery area (approx. 36,000 square feet). Respondent and his family lived on the property. He worked as a carpenter for a Toronto firm but had an interest in farming, keeping some animals and poultry on the premises and growing corn and alfalfa as feed for them. The produce was for the family’s own use but he hoped to make a little money out of the sale of nursery stock and livestock.

The appeal raises only one issue: is the whole of the 21.02 acre holding comprised in the term “residence” in s. 24(6) of the Expropriation Act, R.S.C. 1970, c. E-16, so as to entitle the respondent to compensation for the entire parcel under the “home for a home” provision. The trial judge in awarding the respondent $200,000 found that the expropriated interest in its entirety was being used as a residence in terms of the section and that accordingly the minimum amount sufficient to enable him to relocate his residence in or on premises reasonably equivalent would relate to the entire expropriated interest. The trial judge noted further that there was no fundamental difference in principle between the facilities which respondent had on his property, to pursue his interests, and such things as a swimming

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pool, a putting green and a tennis court, any or all of which can clearly be included as being for “purposes of residence”.

The judgment at trial was affirmed by the Federal Court of Appeal.

Held: The appeal should be dismissed.

The finding of fact by the trial judge that the property was in its entirety a residence and that the additional amenities thereon were ancillary to its use as a residence, as a swimming pool, a putting green, or a tennis court might be, was made properly. There was no apparent error in the application of any principle of law and the finding accords with a common sense approach to the meaning of the term “residence” as it relates to the evidence. While appellant urged as a subsidiary point that the trial judge had erred in relying upon the evidence of replacement cost, this matter was correctly disposed of by the Federal Court of Appeal. It could not be said that the trial judge wrongly construed the evidence, or some of it, or failed to take into account a crucial portion of it, or that there was no evidence upon which he could have based his conclusions. The judge did not err in failing to accept the evidence of appellant’s appraisers and in failing to weigh that of respondent’s appraisers. It is implicit in his reasons that he found a differential to exist between market value determined at the time of taking and the cost of relocation at the time of relocation and therefore that an increase in compensation was payable under subs. (6). A precise mathematical formula or procedure need not be followed where as here it was obvious from the award that there was complete compliance with the statute.

APPEAL from a judgment of the Federal Court of Appeal affirming the judgment of Sweet D.J. at trial in the matter of compensation for expropriated lands and premises. Appeal dismissed.

Thomas Dunne, for the appellant.

Henry Pollit, for the respondent.

The judgment of the Court was delivered by

ESTEY J.—This appeal is by the expropriating authority in proceedings under the Expropriation Act, R.S.C. 1970 (1st Supp.), c. 16, as amended,

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from the judgment of the Federal Court of Appeal confirming the judgment of the Trial Division of the Federal Court wherein the respondent was awarded $200,000 in compensation for the expropriated lands and premises.

The property in question is described in the judgment of the Federal Court of Appeal:

The property comprises 21.02 acres, the whole of which was expropriated for the purpose of the proposed Toronto International Airport by Notice of Confirmation of Intention to Expropriate duly registered on January 30, 1973. On the property is a bungalow built in 1967, with an attached two-car garage, and having a living area of about 1400 square feet. There is also a barn on the property constructed of concrete block having an area of approximately 2880 square feet, a metal clad implement shed and a workshop, a spring-fed pond, a cultivated vegetable garden and strawberry patch together having an area of approximately 15,000 square feet and a tree nursery area having an area of about 36,000 square feet.

The Respondent is a carpenter by trade. He lives on the property with his family. In 1973, and at the time of trial he was employed in Toronto by a firm in the business of laying hardwood floors. He returned home each night. He had been born and brought up on a farm and, as a result, retained an interest in farming so that he kept some animals and poultry on the premises, the feed for which he grew corn and alfalfa. The produce from the vegetable garden was for the family’s own use but, he testified, he hoped to make a little money out of the sale of nursery stock and livestock. That he was correct in assuming he would make only a little money is illustrated by the fact that his gross sales in 1975 amounted to approximately $5,000 from which he derived a net profit of about $600.00.

The appeal raises only one issue: is the whole of the 21.02 acre holding comprised in the term “residence” in s. 24(6) of the Act so as to entitle the respondent to compensation for the entire parcel under s. 24(6) of the Act, being the so-called ‘home for a home’ provision? This issue involves an interpretation of the applicable provisions of the statute, and in fact raises only the simple question as to whether all of the respondent’s lands are to be taken into account in the application of s. 24(6) or only the buildings and the two or three acres surrounding them.

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This issue requires the interpretation of parts of ss. 23 and 24 of the Act which provide as follows:

23. (1) Compensation shall be paid by the Crown to each person who, immediately before the registration of a notice of confirmation, was the owner of a right, estate or interest in the land to which the notice relates, to the extent of his expropriated interest, the amount of which compensation shall be equal to the aggregate of

(a) the value of the expropriated interest at the time of its taking, and

…

24. (2) Subject to this section, the value of an expropriated interest is the market value thereof, that is to say, the amount that would have been paid for the interest if, at the time of its taking, it had been sold in the open market by a willing seller to a willing buyer.

…

(6) Where an expropriated interest was, immediately before the registration of a notice of confirmation, being used by the owner thereof for the purposes of his residence and the value of the interest otherwise determined under this section is less than the minimum amount sufficient to enable the owner, at the earlier of

(a) the time of payment to him of any compensation in respect of the interest, otherwise than pursuant to any offer made to him under section 14, or (b) the time when the Crown became entitled to take physical possession or make use of the land to the extent of the interest expropriated,

to relocate his residence in or on premises reasonably equivalent to the premises expropriated, there shall be added to the value of the interest otherwise determined under this section the amount by which that minimum amount exceeds such value.

Counsel agreed at trial that the time of taking under s. 23(1)(a) above was January 30, 1973; and that the time when the Crown became entitled to possession under s. 24(6)(b) was May 30, 1975. Counsel further agreed that the respondent-owner was entitled, to the extent that s. 24(6) is found to apply to the taken lands, to the greater of the amounts calculated under subss. (2) and (6) of s. 24.

The learned trial judge stated:

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For the reasons I give below I find that the expropriated interest in its entirety was, immediately before the registration of the notice of confirmation, being used by the plaintiff for the purposes of his residence within the meaning of section 24(6). Accordingly the minimum amount sufficient to enable him to relocate his residence in or on premises reasonably equivalent to the premises expropriated would relate to the entire expropriated interest.

It is my view that of paragraphs (a) and (b) in subsection (6) the one applicable here is paragraph (b). Accordingly the time as of which the amount is to be determined is, in this case, May 30, 1975.

The judgment returned to this aspect of the matter later by stating in part:

In my opinion residence in the context of subsection (6) is a place where one may indeed have those minimal benefits but where one may also enjoy amenities of pleasant living according to one’s taste, where one may find the companionship, solaces, comforts and joys of family and where one may, if facilities and purse permit, pursue hobbies and leisure time activities and do those things which he finds enjoyable but which are not available to him in his vocation. I think this view finds support by the use of the plural in “purposes” in the wording “purposes of his residence”.

If on this property there were a swimming pool, a putting green, a tennis court or even all three it would be clear enough that they would be included in residence. If a man’s inclination does not run to swimming or tennis or golf but rather to doing a little farming in the time which he has free from his job it would seem to me that there is no fundamental difference in principle.

This finding of fact has been made in circumstances which reveal no erroneous application of any principle of law and indeed, if I may properly add, the finding accords with a common sense approach to the meaning of the term “residence” as it relates to the evidence before the Court. I therefore, with respect, agree with Urie J.A. when he stated:

The conclusion which the Trial Judge reached, as he said, on the whole of the evidence, is supportable on that evidence and since he did not proceed on a wrong principle we would not be justified, in my opinion, in interfering with his decision on the ground argued by counsel, namely that in finding that the whole of the property constituted the Respondent’s residence he erred in the application of section 24(6).

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As a subsidiary point, the appellant urges that the trial judge was in error in relying upon the evidence of replacement cost as given by the appraisers testifying on behalf of the respondent. It is sufficient to say in disposing of this consideration that I am in complete agreement with the Court of Appeal who, in referring to this aspect of the judgment below, stated through Urie J.A.:

…it cannot be said that the Trial Judge wrongly construed the evidence, or some of it, or failed to take into account a crucial portion of it, or that there was no evidence upon which he could have based his conclusions. In my opinion, therefore, it cannot be said that he erred in failing to accept the evidence of the Appellant’s appraisers and in failing not to give any weight to evidence of the Respondent’s appraisers. Consequently, I can find no merit in this branch of the Appellant’s appeal.

The evidence analysed by the learned trial judge in this connection consisted of appraisal testimony by four expert appraisers, two called by the Crown and two by the owner. A variety of approaches ranging from a cost approach to a market data approach were employed by these witnesses in determining both the market value at May 30, 1973 (being the date of expropriation) and the cost of relocating the “residence” of the respondent in May 1975 (being the date upon which the taker was entitled to possession). The resulting quantities and values ranged from a low of $100,000 to a high of $135,000 for the 1973 market value. With respect to the relocation expense under ‘the home for a home’ provision in subs. (6), the amounts ranged from a low of $100,000 to a high of $225,000 with much of the spread being accounted for by the divergent views as to whether the term “residence” in subs. (6) included all 21 acres of the respondent’s lands or only the two or three acres immediately surrounding the residence and related buildings.

The learned trial judge, after a detailed scrutiny of this expert evidence, concluded:

The amount of compensation (not including interest) to be awarded in this case, in my opinion, is the minimum amount sufficient to enable the plaintiff to relocate, as of May 30, 1975, the entire expropriated prem-

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ises in or on premises reasonably equivalent to the premises expropriated.

This was stated immediately after a discussion of subs. (6):

The effect of subsection (6) under such circumstances is to increase the amount of compensation which would have been payable if subsection (6) were not in the Act to the minimum amount required for the relocation contemplated by subsection (6). Once it is established that such minimum amount does exceed a value otherwise determined under section 24 there is no necessity for any mathematical exercise involving addition to arrive at the amount of compensation and this notwithstanding the wording “there shall be added” employed in the quoted portion. The amount to be payable pursuant to subsection (6), that is the amount of compensation to be awarded, would already have been determined.

It is implicit in his reasons that the learned trial judge had found a differential to exist between market value determined at the time of taking and the cost of relocation of the owner’s residence at the time that the appellant was entitled to possession in favour of the latter, and that therefore an increase in compensation payable to the owner was required by reason of the application of subs. (6). The judgment at trial does not include a finding of market value pursuant to subs. (2), nor a finding precisely labelled as “the minimum amount sufficient to enable the owner… to relocate his residence in or on premises reasonably equivalent to the premises expropriated” pursuant to subs. (6), or in so many words, the difference, if any, between these two quantities. In my view, a precise mathematical formula or procedure need not be followed step by step by the compensation tribunal where it is obvious from the award that compliance with the statute is complete. What the learned trial judge clearly did was to find that the “minimum amount sufficient to enable the owner… to relocate his residence” exceeded the value determined under subs. (2), and accordingly awarded the amount determined under subs. (6) as the proper compensation to the respondent-owner.

In this instance, the learned trial judge concluded with reference to the actual compensation payable “as of May 30, 1975” that he did not “consid-

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er that the evidence of any of the appraisers is such that it should be accepted in its entirety”. He thereupon fixed the compensation “having regard to my interpretation of the statutory provisions…” at $200,000. I find no error in principle anywhere in the process culminating in the fixing of compensation and accordingly adopt the conclusion of Urie J.A. already quoted with reference to the application of the expert testimony by the learned trial judge.

In any case, error could only arise in such a circumstance where the trial judge, in fixing the final amount of compensation, failed to award the greater of the quantities determined under subss. (2) and (6). Here the error would only arise if the market value under subs. (2) exceeded the cost of relocation under subs. (6) thus entitling the respondent-owner to a greater sum than here awarded under subs. (6). This would only affect the respondent and he has not appealed.

I would therefore dismiss the appeal with costs throughout.

Appeal dismissed with costs throughout and in terms of the order granting leave.

Solicitor for the appellant: R. Tassé, Ottawa.

Solicitors for the respondent: Hyde, Pollit, Arnold & Kirshin, Toronto.