Marcus v. National Capital Commission, [1970] SCR 39

Supreme Court of Canada

Marcus v. National Capital Commission, [1970] S.C.R. 39

Date: 1969-10-07

Benjamin Marcus (in trust) (Defendant) Appellant;

and

National Capital Commission (Plaintiff) Respondent.

1969: June 4; 1969: October 7.

Present: Martland, Judson, Ritchie, Hall and Pigeon JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA

Expropriation—Green belt area—Market value—No immediate demand—Valuations by expert witnesses—Trial judge refusing to accept estimates.

For the purposes of the National Capital green belt, the respondent Commission expropriated 13.5 acres of vacant, unserviced, unimproved and generally flat land which the appellant had acquired in 1956 for $8,000. There was no evidence of any immediate demand for such a site. The two witnesses for the appellant estimated the market value at $67,500 and $54,000 respectively and the respondent’s witness, at $27,000. The trial judge did not adopt any of these estimates. He fixed the value at $30,000 as being the price that a speculator would have paid to acquire it and for which an owner would have sold it. The owner appealed to this Court.

Held: The appeal should be dismissed.

As a judge of fact, the trial judge was entitled to refuse to accept the estimates of the witnesses and their opinions as to the impact of the Green Belt plan on land values. The final estimate made by him was fully adequate in the light of the evidence.

APPEAL from a judgment of Jackett P. of the Exchequer Court of Canada[1], in an expropriation matter. Appeal dismissed.

Keith E. Eaton and Thomas A. McDougall, for the defendant, appellant.

[Page 40]

Eileen Mitchell Thomas, Q.C., for the plaintiff, respondent.

The judgment of the Court was delivered by

Martland J.—This is an appeal from a judgment of the Exchequer Court[2] fixing, at the sum of $30,000, the compensation to be paid by the respondent (hereinafter referred to as “the Commission”) to the appellant for property expropriated by it on June 14, 1961. The appellant’s contention is that the compensation should have been fixed at the sum of $54,000.

By agreement of the parties, the only question to be determined at the trial was the market value of the land at the time of the expropriation.

The land expropriated is located in the Township of Nepean, west of the Village of Bell’s Corners, on the south side of Highway No. 15, leading from Ottawa to Carleton Place. It has an area of 13.5 acres, with a frontage of 350 feet on that highway. Its rear boundary extends for 600 feet along the Canadian Pacific Railway Company line. At the time of expropriation the land was vacant, unserviced, unimproved and generally flat, and at grade with the highway, and with a road allowance on its westerly side. It was not subject to any zoning by‑law, but was subject to a subdivision control by-law passed by the Township of Nepean.

The land had been acquired by the appellant on November 9, 1956, for a consideration of $8,000, an average cost of approximately $593 per acre.

The expropriation was made by the Commission for the purposes of the National Capital Green Belt, the nature of which, it was agreed by the parties, was considered in National Capital Commission v. Munro[3]. The acreage of Green Belt land in Nepean Township is approximately 17,000 acres, of which the Commission acquired some 14,000 acres by purchase, and approximately 3,000 acres by expropriation, 1,400 acres in 1959 and 1,600 acres in 1961.

[Page 41]

Three witnesses gave evidence as to their opinions in respect of the market value of the land in question in this case, two of them, Whelan and Young, on behalf of the appellant, and the other one, Crawford, on behalf of the Commission. Their estimates were as follows:

The learned President of the Exchequer Court did not adopt any of these estimates, as appears from the following extract from his reasons:

In the case of each of these witnesses, after saying that he has considered certain matters (which are, generally speaking, proper matters to consider), the witness says that he has reached a certain conclusion as to market value of the subject property at the time of the expropriation. But when, for the purpose of assessing what weight, if any, to give to one of these opinions, one attempts to ascertain how the witness has allowed various factors mentioned by him to enter into the production of his ultimate conclusion, or why he had discarded certain of them as being of no importance in reaching a valid conclusion, one is faced with a lack of any such information in respect of many factors and, in respect of others, reasons for disregarding them that seem to lack validity. It follows that I must reach my own conclusion making the best use I can of the information and ideas that the witnesses and counsel have made available to me.

What I must do, as I understand it, is put myself in the position of a person owning the subject property just before the expropriation willing to sell, but under no compulsion to sell, and capable of appreciating all the factors bearing on what a reasonably prudent and competent person would take into account in the circumstances, and consider what amount he would insist on having before he would sell; and I must put myself in the position of a person desiring to buy a property such as the subject property just before the expropriation but under no necessity of obtaining that particular property, and capable of appreciating all the factors bearing on what a reasonably prudent and competent person would take into account in the circumstances, and consider what is the highest amount that he would be prepared to pay to acquire the property.

In making their estimates as to market value, the two witnesses called by the appellant, Whelan

[Page 42]

and Young, when making comparisons with other land sales in the area, clearly relied chiefly upon a sale made by Lobel to Hodgins Lumber Company in April, 1961. The land involved in that sale was within the boundaries of the Village of Bell’s Corners, and, in consequence, not within the Green Belt area. The learned President compares that property with the land involved in the present case, in the following passage from his judgment:

There would appear to be no doubt, on any appreciation that I can make of the matter on the material before me, that the sale that is of greatest assistance is the sale from Lobel to Hodgins Lumber just before the expropriation. The general characteristics of the two properties are comparable. Both properties have frontage on Highway 15 and on the Canadian Pacific Railway line. The expropriated property is only a few minutes further from Ottawa than the Hodgins Lumber property. While the expropriated property was 13½ acres, the Hodgins Lumber property was only 10 acres. The Hodgins Lumber parcel had more Highway 15 frontage than the subject property, about the same railway frontage as the subject property, no side road allowance frontage, and was subject to an easement that was a serious disability. The subject property had over 1,100 feet of side road allowance frontage, had 3½ acres more area, and was not subject to any Hydro or other easement.

The purchase price paid for the land involved in the sale to Hodgins was $50,000, or $5,000 an acre. Mr. Whelan’s estimate of the market value of the appellant’s land was at $5,000 an acre. Mr. Young’s oral evidence showed that he placed “greatest reliance” in reaching his valuation on the sale to Hodgins.

The evidence of Crawford as to the evidentiary value of the sale to Hodgins is dealt with by the learned President as follows:

He also gave evidence regarding the Hodgins Lumber Company purchase, on which the other two witnesses relied so strongly. He said that the Hydro Company, some years after Hodgins bought the land in question subject to the Hydro easement for $50,000, paid Hodgins $17,064 for the land over which the easement ran so that the net cost of the

[Page 43]

land to Hodgins was only about $33,000. There was, however, no evidence that Hodgins had any reason to anticipate any such windfall when it bought the property in 1961, and I am of opinion therefore that this approach must be rejected because, in considering the effect of a transaction as evidence of the market existing at the time it was entered into, it is the terms and circumstances of that transaction that must be considered and not the net cost of the land to the purchaser as a result of that transaction coupled with some subsequent transaction not foreseeable at the time.

The learned President gave very careful consideration to all the evidence which was before him, and had a view of the land in question. He reached certain conclusions following such consideration. One of these was that the entry of Government into the market for Green Belt lands did not reduce the value of such lands.

Dealing with the lack of evidence before him of a demand for properties of the type in question here, the learned President said this:

No witness put before the Court a factual picture of the supply of, and demand for, sites of the general character of the subject property in the Ottawa area immediately before the expropriation. There was some evidence to suggest that industrial sites that were available in 1961 on railway sidings in the City of Ottawa were very expensive, and there was evidence by one witness that, while he did not know of such sites on Highway 15 in Nepean Township, he did know of sites with highway and railway frontage of approximately the size of the subject property that were available elsewhere in Nepean Township. That was evidence that came out incidentally in the course of cross‑examination.

There is some slight evidence, as I have indicated, that there were other sites like the subject property in Nepean Township. I should have thought that others in the general Ottawa area would have competed with those in Nepean Township on or off of Highway 15, some being more sought after for one type of demand and others being more sought after for other types of demand. I have no evidence, however, as to whether there was any scarcity of such sites to meet any demand for them.

[Page 44]

I am struck, moreover, with the fact that there was no evidence at all of any immediate demand for sites such as the subject property either for industrial or commercial purposes, for government undertakings, or for any other purpose. In the absence of any evidence that there was, just before the expropriation, any such demand in the market, I must conclude, as I have already indicated, that the probable willing purchaser for a site such as the subject property at that time was a dealer or speculator buying to hold for re‑sale when such a demand did arise.

In the light of this lack of evidence, and taking into consideration the sale to Hodgins, he stated the following conclusion:

I am of the view that, in 1961, if it were not for the Green Belt, a person wanting a property for the sort of development that Hodgins Lumber had in mind would have paid $50,000 for the subject property just as willingly as Hodgins Lumber paid that amount for the property that it acquired at that time. That being so, on the basis that I have already laid down, that the subject property was equally valuable for government institutions or other Green Belt purposes, as it would have been for commercial or industrial purposes if it were not for the Green Belt, I am of the opinion that if such a property had been required at that time for such a purpose, the parties would have reached agreement on a price of about $50,000. As, however, there is no evidence of any such realized requirement at that time and it is a matter of valuing it on its potentiality for such a purpose, I am of opinion that, looking only at the Hodgins Lumber purchase, the proper price to put on it is $30,000, being the highest price that, I should have thought, a dealer or speculator would have paid to acquire it for resale to such a purchaser, if and when one appeared, and the price for which an owner of the property willing to sell it at that time, but under no pressure, would have sold it.

When I take into account the various considerations that I have enumerated in connection with other transactions, they do not cause me to change the conclusion that I have reached, based on the Hodgins Lumber transaction.

There is no principle of law in issue on this appeal. Counsel for the appellant contended that the launching of the Green Belt plan had reduced values of lands within it, and that, in determining values for expropriation, such diminution must be disregarded. However, the learned President

[Page 45]

found as a fact that such diminution in value had not occurred. Furthermore, he estimated the value of the land in question on the basis that it would be equivalent to the value of similar land not within the Green Belt, i.e., the subject-matter of the sale to Hodgins. In refusing to award an amount equal to the price in the Hodgins sale, he did so, not because the appellant’s land was within and the Hodgin’s land was not within the Green Belt, but because of lack of evidence of any immediate demand for such a site.

It is true that he refused to accept the estimates of the three witnesses and their opinions as to the impact of the Green Belt plan on land values, but he was entitled, as a judge of fact, to do this, and it is clear to me that he fully apprehended the evidence before him, and considered it in forming his opinion. He reached his own conclusion as to the question of fact which he was called upon to determine; i.e., the market value of the land at the time of expropriation. Without necessarily approving the test as to what a speculator would pay for the land as being the measure of its market value, I do not disagree with the final estimate which he made, which, in my view, was fully adequate in the light of the evidence.

I would dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitors for the defendant, appellant: Gowling, MacTavish, Osborne & Henderson, Ottawa.

Solicitor for the plaintiff, respondent: D.S. Maxwell, Ottawa.