Supreme Court of Canada
Gray Coach Lines v. City of Hamilton, [1973] S.C. R. 108
Date: 1972-10-18
Gray Coach Lines Limited (Plaintiff) Appellant;
and
The Corporation of the City of Hamilton (Defendant) Respondent.
1972: June 21, 22; 1972: October 18.
Present: Judson, Hall, Spence, Pigeon and Laskin JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Expropriation—Compensation—Expropriation of appellant’s bus depot—Whether appellant entitled to compensation for “reasonable cost of equivalent reinstatement”—Whether lands “devoted to a purpose of such a nature that there is no general demand or market for land for that purpose”—Basic compensation—The Expropriations Act, 1968-69 (Ont.), c. 36, ss. 13, 14(1), (2).
[Page 109]
Certain lands owned by the appellant and used by it as a depot for inter-urban buses were expropriated by the respondent. The Ontario Municipal Board fixed the compensation at $89,377.08. The Court of Appeal for Ontario allowed both an appeal by the present appellant and a motion to vary by the present respondent and directed that the award made by the Ontario Municipal Board be varied to insert therein as the compensation allowed the sum of $85,652.53 plus the sum of $2,543.10 for costs making a total of $88,195.63.
Section 14(2) of The Expropriations Act, 1968-69 (Ont.), c. 36, now R.S.O. 1970, c. 154, provides: “Where the land expropriated is devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, and the owner intends in good faith to relocate in similar premises, the market value shall be deemed to be the reasonable cost of equivalent reinstatement.” It was the appellant’s submission that the expropriation was governed particularly by the provisions of the said s. 14(2) and that the appellant was therefore entitled to “the reasonable cost of equivalent reinstatement”. The Ontario Municipal Board gave effect to this submission although allowing considerably less than the appellant requested on appeal to this Court.
Upon the appeal to the Court of Appeal and the motion to vary made by the there respondent, the Court refused to allow the compensation upon any basis of reasonable cost of equivalent reinstatement but rather allowed the compensation under the provisions of s. 13(2) of the statute, that is, the market value of the land under para, (a) plus an amount for special difficulty in relocation under para. (d).
Held: The appeal should be dismissed.
Section 14(2) of The Expropriations Act did not apply to the particular circumstances of this case. The purpose to which the expropriated land was devoted was no more restricted than that of a motor vehicle garage in its broadest terms and this Court, like the Court of Appeal, did not consider that that purpose was of such a nature that there was no general demand or market for the land for that purpose. The Court agreed with the Court of Appeal that the compensation as provided for in s. 13 of The Expropriations Act rather than s. 14 should be adopted. The Court of Appeal did not proceed on any incorrect principle or overlook or misapprehend any
[Page 110]
material evidence in determining the compensation under s. 13.
APPEAL from a judgment of the Court of Appeal for Ontario, allowing both an appeal by the present appellant and a motion to vary by the present respondent. Appeal dismissed.
D.A. Elliott, Q.C., for the appellant.
G.J. Smith, for the respondent.
The judgment of the Court was delivered by
SPENCE J.—This is an appeal from the judgment of the Court of Appeal for Ontario pronounced first on March 15, 1971, and then after further submissions on April 5, 1971. By that judgment, the Court of Appeal for Ontario allowed both an appeal by the present appellant and a motion to vary by the present respondent and directed that the award made by the Ontario Municipal Board be varied to insert therein as the compensation allowed the sum of $85,652.53 plus the sum of $2,543.10 for costs making a total of $88,195.63.
The Ontario Municipal Board, by its decision pronounced on May 21, 1970, had fixed the compensation at $89,377.08.
It will be seen, therefore, that the decision of the Court of Appeal for Ontario reduced the compensation by only the sum of $1,181.45. In this appeal, the appellant asks that the judgment of the Court of Appeal be set aside and that there be awarded in place of the amount there awarded the sum of $108,821.63.
The City of Hamilton had, by By-law 68-91 of the Corporation enacted on March 12, 1968, expropriated the lands in question for urban renewal within the core of the city. The lands in question comprised 17,606 square feet of land in an irregular parcel running between York Street and Napier Street in the city. These two streets run generally in an east-west direction but they are not exactly parallel, the angle between the two streets produced until they met being about
[Page 111]
20 degrees. The block on Napier Street has a frontage of 66 feet 9½ inches by a depth of about 129 feet, and the block on York Street had a frontage of 37 feet 11 inches by a depth of about 200 feet. The latter block was subject to a right of way on its northerly 162 feet by a width of 8 feet 10 inches but it was said that the enjoyment of the premises was not interfered with by this right of way. In fact, the said northerly block, that is the one fronting on York Street, bore no building whatsoever. The southerly block, that is the one on Napier Street, was occupied completely by a one-storey brick building to which reference shall be made hereafter.
Due to the angle of the two streets, there was not a complete joinder of the two blocks across their rear limits but 25 feet 3½ inches at the rear limit of each of the said blocks did join and there was therefore complete access from one block to the other.
The appellant used these lands as the depot for its inter-urban buses on its Toronto-Hamilton run. The bus terminal was a short distance away at John Street and Rebecca Street and the lands were on the route over which the said buses passed when approaching and departing from the terminal on the said run. In addition, the appellant claimed that the lands were nearby a moderately-priced hotel at which the bus drivers were accustomed to stay overnight when the hours of their tour of duty so required.
The appellant has the licence or franchise from the provincial government necessary for carrying out its inter-urban service and upon the expropriation of its bus depot by the respondent sought a replacement. It was necessary to have a replacement within the immediate area and it was necessary to have one with access to two streets as the operation of the appellant called for its buses to be driven in off one street and proceed through its depot leaving on the other street. The appellant encountered very considerable difficulty in discovering a site which would comply with its requirements. In the first place, the very urban renewal which caused the expropriation also resulted in zoning regulations making it impossible
[Page 112]
to operate a bus garage in much of the surrounding territory. In the second place, the requirement that the premises have access from two streets much limited the sites available. Thirdly, what was required was a site having on it a garage type of building or, at any rate, one upon which such type of building could be erected without entailing the expensive purchase of a building then in existence and the demolition thereof.
The appellant finally found a site which fronted on two streets, Kelly and Cannon Streets, and which was said to be some little distance further away from the bus terminal than the expropriated site but whatever distance was entailed was inconsequential. This site was very considerably larger, having an area of 448,535 square feet and a third frontage on Ferguson Avenue. The site cost the appellant $163,000 but immediately after purchasing it the appellant sold to a Mr. Lockwood, who had been expropriated also, the Ferguson Avenue frontage. This sale was for $101,500. Thus, the appellant was left with a site of 25,165 square feet with frontage on the two streets, Kelly and Cannon, and a net cost of $61,500. The appellant paid a real estate commission of $5,075 on the sale to Lockwood.
The amount of compensation must be fixed under the provisions of The Expropriations Act, 1968-69 (Ont.), c. 36, which now appears in R.S.O. 1970, c. 154. Section 13 and s. 14(1) and (2) of that statute read as follows:
13. (1) Where land is expropriated, the expropriating authority shall pay the owner such compensation as is determined in accordance with this Act.
(2) Where the land of an owner is expropriated, the compensation payable to the owner shall be based upon,
(a) the market value of the land;
(b) the damages attributable to disturbance;
(c) damages for injurious affection; and
(d) any special difficulties in relocation,
but, where the market value is based upon a use of the land other than the existing use, no compensation shall be paid under clause b for damages attributable
[Page 113]
to disturbance that would have been incurred by the owner in using the land for such other use.
14. (1) The market value of land expropriated is the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer.
(2) Where the land expropriated is devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, and the owner intends in good faith to relocate in similar premises, the market value shall be deemed to be the reasonable cost of equivalent reinstatement.
......
It was the appellant’s submission to the Ontario Municipal Board that the expropriation was governed particularly by the provisions of s. 14(2) of the said statute and that the appellant was therefore entitled to “the reasonable cost of equivalent reinstatement”. The appellant has made the same submission to this Court and has outlined the reasonable cost of reinstatement as follows:
| Cost to Appellant of |
|
|
| Carter property |
$66,575.00 |
|
| Plus depreciated value of garage buildings |
|
|
| |
|
$104,226.00 |
| Plus legal fees and Disbursements |
2,543.10 |
|
| Plus damages attributable to disturbance |
|
|
| |
|
|
| |
|
$108,821.63 |
The Ontario Municipal Board gave effect to this submission although allowing considerably less than the appellant now requests.
Upon the appeal to the Court of Appeal and the motion to vary made by the there respondent, the Court of Appeal for Ontario refused to allow the compensation upon any basis of reasonable cost of equivalent reinstatement but rather allowed the compensation under the provisions of s. 13(2)
[Page 114]
of the statute, that is, the market value of the land under para, (a) plus an amount for special difficulty in relocation under para. (d). Therefore, the first problem which faces this Court is whether the appellant is entitled to compensation for the reasonable cost of equivalent reinstatement.
Under the provisions of s. 14(2) of The Expropriations Act, that type of compensation must be awarded when the land expropriated “is devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, and the owner intends in good faith to relocate in similar premises”. There can be no doubt of the appellant’s intention in good faith to relocate in similar premises. The appellant had already done so at the time of the hearing. Therefore, it must be determined whether the land expropriated was devoted to a purpose of such a nature that there was no general demand or market for land for that purpose and for this determination an examination must be made of the actual use to which the expropriated land had been put.
As I have said, the York Street block of those lands bore no building whatsoever and was simply used as a parking place or driveway for the appellant’s buses. It was said in evidence that at one time that York Street block had borne on it an ordinary private family residence and the usual garage. Both of these buildings had been demolished long since. The Napier Street block over substantially its whole area was covered by a one-storey brick garage facing Napier Street with two large steel sliding doors and facing the York Street block at the exit end of the building two large wooden swing doors.
Exhibit 16 before the Ontario Municipal Board is an appraisal report made by Marshall Lounsbury who testified before the Board. The building on the Napier Street block he describes as follows:
Exterior
This is a large one storey bus garage with pressed brick front and rug brick siding. The windows have
[Page 115]
metal frames and some brick and stone sills. It has a flat built up type roof. On the front of the building there are two large wooden sliding garage doors and on the back there are two large wooden swinging garage type doors. The exterior walls have been parged to a height of three feet up the wall due to deteriorating brick. Some sections have been replaced by new brick.
Interior
The interior is divided into a bus repair service area, an office and stores area and a boiler room area.
The service area has a cement floor, brick walls and a joist type ceiling. The height is 13 feet under the joists which are 2” X 8” on 16” centres resting on 6” X 15” steel “1” cross beams, which are resting on a 6” x 20” centre steel “1” beam, supported by three 8” X 8” steel “1” columns.
At the south west corner there is a grease pit.
The office and stores area has frame walls and wooden flooring and ceiling. There is a toilet and hand basin in this area.
The boiler room has cement block walls, cement floor, and joist-type ceiling. The building is heated by a Leonard & Son’s coal fired boiler providing live steam heat. The boiler is fed by a Livingston automatic stoker. There is also a 60 gallon electric hot water tank in this boiler room. The building is serviced by a 100 amp. electrical service. The building has a wet sprinkler system.
General.
The building is in very good condition and shows signs of maintenance and upkeep.
A sketch in the said ex. 16 illustrates that the grease pit is in the front left corner of the building closer to Napier Street, the three small rooms each 10’4” by about 8’ are at the front of the building on the right side, and the boiler room—30’ by 10’—is in the rear right corner. Other than that, the building is simply a large open area. The evidence before the Board showed that this building had existed for some considerable time
[Page 116]
and had been occupied by a series of enterprises of a garage nature.
With respect, I agree with Kelly J.A., when he said:
Having in mind that the purpose to which the land was devoted was no more restricted than that of a motor vehicle garage in its broadest terms, I do not consider that that purpose was of such a nature that there was no general demand or market for the land for that purpose.
The Napier Street block had been used for many years before for uses in connection with transport. Apart from its expropriation, it could have been so used in the future. It did have the advantage of access both from Napier Street and from the vacant lot also owned by the appellants on York Street and that feature would be an advantage to any garage type of use. Its use by the appellants was simply to drive into it at one end the buses which had arrived from Toronto at the terminal, discharge the passengers and then proceed to this depot to grease and wash those buses in the building and then store them in that building or in the vacant lot overnight and then drive them out onto York Street the next morning back to the terminal to pick up the passengers and depart for Toronto. As was Kelly J.A., I am quite unable to find that that kind of a use was the devotion to a purpose of such a nature that there was no general demand or market for the land for that purpose.
It is true that the appellant alone had the necessary franchises for this inter-urban transport between Toronto and Hamilton but private automobiles, trucks, buses on some other route, even taxi cabs could have been driven in that Napier Street building from the Napier Street entrance and out over the vacant lot to York Street and the fact that the appellant had used the premises as a bus depot for inter-urban transport of passengers did not in any way affect its availability for use for other storage garage purposes. Therefore, with respect, I am in accord with the view expressed by Kelly J.A. that s. 14(2) of The Expropriations Act does not apply to the particular circumstances.
[Page 117]
Kelly J.A., therefore, in his reasons for judgment, turned to consider the compensation to which the appellant was entitled under the provisions of s. 13 of the said statute. As I have pointed out, in his reasons, which were the unanimous decision of the Court of Appeal for Ontario, he awarded amounts under s. 13(2) (a), (b) and (d). The amount to be awarded under s. 13(2) (a), i.e., the market value of the land, was fixed by counsel for both parties by agreement at $77,500. Similarly, little difficulty was encountered in fixing the damages attributed to disturbance under s. 13(2) (b), those amounts being as follows:
| Moving costs |
$ 419.90 |
| Executive time |
707.63 |
| Survey costs |
225.00 |
| Cost of temporary facilities |
700.00 |
| Total |
|
Kelly J.A. determined that the appellant was entitled to compensation under the heading of s. 13(2) (d), “any special difficulties in relocation”, pointing out the three elements which made the finding of similar accommodation difficult and which therefore resulted in an increase in the cost of that similar location. As I have outlined, after the purchase of the block of land bounded by Kelly Street, Ferguson Avenue and Cannon Street, and the sale of the Ferguson Avenue frontage to Mr. Lockwood, the appellant was left with a block of land fronting on two streets but containing 25,165 square feet at a cost of $61,500 plus real estate commission rather than 17,606 square feet, the area of the lands expropriated.
The appellant did relocate at an increased cost but, as Kelly J.A. pointed out, the appellant’s witnesses agreed that the appellant had obtained a better site and that it was wise when relocating to make allowances for expansion. Therefore, it must be determined what part of the area in excess of the 17,606 square feet which were contained in the expropriated premises may be
[Page 118]
compensated for on the basis of difficulty of relocating and what part must be assigned to the appellant’s acquirement of better premises. Kelly J.A. pointed out that Cannon and Kelly Streets are 342 feet apart while Napier and York Streets were much closer together and if the new premises were reduced to only 17,606 square feet the result would be a long, narrow area unsuitable for the erection of a storage building and use as an adjoining storage area.
Kelly J.A., however, determined that a block of land 30 feet in frontage by 150 feet in depth, i.e., 4,500 square feet, could be sold off without affecting the efficiency of the remaining property which would then be 20,665 square feet in area, roughly approximate to the premises expropriated. Kelly J.A. found, therefore, that that lot of 4,500 square feet should be attributable to the acquirement of better premises and valued it at $2.77 per square foot which was the average per square foot cost of the new site and, therefore, determined that the additional cost to the appellant of the new premises should be reduced by an amount of $11,970, representing the value of those 4,500 square feet of better premises and Kelly J.A., therefore, worked out the amount which should be allowed under the provisions of s. 13(2) (d) as follows:
| Cost of acquiring new site |
$61,500.00 |
| Real estate commission (necessarily paid by appellant) in reducing the size of the new site by sale to Lockwood |
|
| Total |
$66,575.00 |
| Deduction for land not necessary for duplication of facilities |
11,970.00 |
| |
|
The market value of the site expropriated other than buildings thereon had been agreed upon between the parties at $48,500 and, therefore, Kelly J.A. found the compensation for the special
[Page 119]
difficulties in relocating was the difference of $6,150 which he rounded at $6,100 and he, therefore, allowed compensation as follows:
| Market value of the land (s. 13 (2) (a)) |
$77,500.00 |
| Damages attributable to disturbance (s. 13(2) (b)) |
2,052.53 |
| Special damages in relocation as outlined above (s. 13(2) (d) |
6,100.00 |
| The legal costs which were the subject of the supplementary reasons for judgment delivered on the 2nd of April 1971 to which I have referred— |
2,543.10 |
| Making a total compensation of |
|
I have already discussed in these reasons Kelly J.A.’s adoption of the compensation as provided for in s. 13 of The Expropriations Act rather than s. 14 and expressed agreement with the learned justice on appeal. I have now outlined the course which the learned justice on appeal took in fixing compensation under the said s. 13.
Since I am not of the opinion that the Court of Appeal has proceeded on any incorrect principle or has overlooked or has misapprehended any material evidence in determining the compensation under s. 13 in the fashion which I have outlined, I am of the view that the appeal should be dismissed with costs in this Court. The costs in the Court of Appeal and before the Ontario Municipal Board have been dealt with in the decisions of those tribunals.
Appeal dismissed with costs.
Solicitor for the appellant: D.A. Elliott, Toronto.
Solicitors for the respondent: Weir and Foulds, Toronto.
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