SUPREME
COURT OF CANADA
Between:
Antrim
Truck Centre Ltd.
Appellant
and
Her
Majesty The Queen in Right of the Province of Ontario,
as
represented by the Minister of Transportation
Respondent
-
and -
Attorney
General of British Columbia,
City
of Toronto and Metrolinx
Interveners
Coram: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell,
Moldaver, Karakatsanis and Wagner JJ.
Reasons for
Judgment:
(paras. 1 to 57)
|
Cromwell J. (McLachlin C.J. and LeBel, Fish, Abella,
Rothstein, Moldaver, Karakatsanis and Wagner JJ. concurring)
|
Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013
SCC 13, [2013] 1 S.C.R. 594
Antrim Truck Centre Ltd. Appellant
v.
Her Majesty The Queen in Right of the
Province of Ontario,
as represented by the Minister
of Transportation Respondent
and
Attorney General of British Columbia,
City of Toronto and
Metrolinx Interveners
Indexed as: Antrim Truck Centre Ltd. v. Ontario
(Transportation)
2013 SCC 13
File No.: 34413.
2012: November 14; 2013: March 7.
Present: McLachlin C.J. and LeBel, Fish, Abella, Rothstein,
Cromwell, Moldaver, Karakatsanis and Wagner JJ.
on appeal from the court of appeal for ontario
Expropriation — Injurious affection — Nuisance —
Compensation — Construction of new highway diverting traffic away from
appellant’s truck stop business — Ontario Municipal Board awarding appellant
compensation for injurious affection for business loss and loss of market value
of property — Court of Appeal dismissing claim on basis that Board failed to
balance competing rights adequately — Whether interference with private
enjoyment of land was unreasonable when resulting from construction serving
important public purpose — Whether Court of Appeal erred in finding that Board’s
application of law of nuisance was unreasonable — Expropriation Act, R.S.O.
1990, c. E.26.
From
1978 until 2004, the appellant owned property on Highway 17 near the
hamlet of Antrim where it operated a truck stop complex that included a
restaurant and gas bar and enjoyed the patronage of drivers travelling along
the highway. In September 2004, the respondent opened a new section of
Highway 417 running parallel to Highway 17 near the appellant’s
property. Highway 17 was significantly altered by the construction of
Highway 417 and access to the appellant’s land was severely restricted.
Motorists travelling on the new highway did not have direct access to the
appellant’s truck stop and so it was effectively put out of business at that
location. The appellant brought a claim for damages for injurious affection
before the Ontario Municipal Board under the Expropriations Act and was
awarded $58,000 for business loss and $335,000 for loss in market value of the
land. This decision was upheld on appeal to the Divisional Court. The Court
of Appeal set aside the Board’s decision, however, finding that its application
of the law of private nuisance to the facts was unreasonable because it had
failed to consider two factors in its reasonableness analysis and because it
had failed to recognize the elevated importance of the utility of the
respondent’s conduct where the interference was the product of an essential
public service.
Held:
The appeal should be allowed.
The
main question is how to decide whether an interference with the private use and
enjoyment of land is unreasonable when it results from construction which
serves an important public purpose. The reasonableness of the interference
must be determined by balancing the competing interests, as it is in all other
cases of private nuisance. The balance is appropriately struck by answering
the question of whether, in all of the circumstances, the individual claimant
has shouldered a greater share of the burden of construction than it would be
reasonable to expect individuals to bear without compensation. Here, the
interference with the appellant’s land caused by the construction of the new
highway inflicted significant and permanent loss.
The
Expropriations Act provides a right to compensation for injurious
affection, which occurs when the defendant’s activities interfere with the
claimant’s occupation or enjoyment of land, if the claimant can meet three
requirements: (i) the damage must result from action taken under
statutory authority; (ii) the action would give rise to liability but for
that statutory authority; and (iii) the damage must result from the
construction and not the use of the works. In this case, the only unresolved
question is whether, if the highway construction had not been done under
statutory authority, the appellant could have successfully sued for damages
caused by the construction under the law of private nuisance.
Nuisance
consists of an interference with the claimant’s occupation or enjoyment of land
that is both substantial and unreasonable. A substantial interference is one
that is non‑trivial, amounting to more than a slight annoyance or
trifling interference. This threshold screens out weak claims and once met,
the next inquiry is whether the non‑trivial interference was also
unreasonable in all of the circumstances to justify compensation.
When
assessing unreasonableness where the activity causing the interference is
carried out by a public authority for the greater public good, courts and
tribunals are not limited by any specific list of factors. Rather, the focus
of the balancing exercise is on whether the interference is such that it would
be unreasonable in all of the circumstances to require the claimant to suffer
it without compensation. Generally, the focus in nuisance is on whether the
interference suffered by the claimant is unreasonable, not on whether the
nature of the defendant’s conduct is unreasonable. The nature of the defendant’s
conduct is not, however, an irrelevant consideration. Generally speaking, the
acts of a public authority will be of significant utility. If simply put in
the balance with the private interest, public utility will generally outweigh
even very significant interferences with the claimant’s land, undercutting the
purpose of providing compensation for injurious affection. The distinction is
thus between interferences that constitute the “give and take” expected of
everyone and interferences that impose a disproportionate burden on individuals.
The reasonableness analysis should favour the public authority where the harm
to property interests, considered in light of its severity, the nature of the
neighbourhood, its duration, the sensitivity of the plaintiff and other
relevant factors, is such that the harm cannot reasonably be viewed as more
than the claimant’s fair share of the costs associated with providing a public
benefit.
Further,
the reasonableness inquiry should not be short‑circuited on the basis
that the interference is physical or material as opposed to a loss of amenities
or is self‑evidently unreasonable. Once a claimant passes the threshold
test of showing harm that is substantial in the sense that it is non‑trivial,
there ought to be an inquiry into whether the interference is unreasonable,
regardless of the type of harm involved.
The
Court of Appeal erred in finding that the Board’s application of the law of
nuisance to the facts was unreasonable. Provided that the Board reasonably
carried out the analysis in substance, it was not required to specifically
enumerate and refer by name to every factor mentioned in the case law. It did
not fail to take account of the utility of the respondent’s activity or fail to
engage in the required balancing as the Court of Appeal concluded it had. It
was reasonable for the Board to conclude that in all of the circumstances, the
appellant should not be expected to endure permanent interference with the use
of its land that caused a significant diminution of its market value in order to
serve the greater public good.
Cases Cited
Applied:
St. Lawrence Cement Inc. v. Barrette, 2008 SCC 64, [2008] 3 S.C.R.
392; St. Pierre v. Ontario (Minister of Transportation and Communications),
[1987] 1 S.C.R. 906; Royal Anne Hotel Co. v. Village of Ashcroft (1979),
95 D.L.R. (3d) 756; Tock v. St. John’s Metropolitan Area Board, [1989] 2
S.C.R. 1181; Jesperson’s Brake & Muffler Ltd. v. Chilliwack (District)
(1994), 88 B.C.L.R. (2d) 230; Mandrake Management Consultants Ltd. v.
Toronto Transit Commission (1993), 62 O.A.C. 202; Schenck v. The Queen
(1981), 34 O.R. (2d) 595; considered: Andreae v. Selfridge & Co.,
[1938] 1 Ch. 1; referred to: Susan Heyes Inc. v. Vancouver
(City), 2011 BCCA 77, 329 D.L.R. (4th) 92, leave to appeal refused, [2011]
3 S.C.R. xi; City of Campbellton v. Gray’s Velvet Ice Cream Ltd. (1981),
127 D.L.R. (3d) 436; The Queen v. Loiselle, [1962] S.C.R. 624; Newfoundland
(Minister of Works, Services and Transportation) v. Airport Realty Ltd., 2001
NFCA 45, 205 Nfld. & P.E.I.R. 95; Wildtree Hotels Ltd. v. Harrow London
Borough Council, [2001] 2 A.C. 1; Allen v. Gulf Oil Refining Ltd.,
[1981] A.C. 1001; St. Helen’s Smelting Co. v. Tipping (1865), 11 H.L.C.
642, 11 E.R. 1483; Walker v. McKinnon Industries Ltd., [1949] 4 D.L.R.
739, varied by [1950] 3 D.L.R. 159, aff’d [1951] 3 D.L.R. 577; Smith v. Inco
Ltd., 2011 ONCA 628, 107 O.R. (3d) 321.
Statutes and Regulations Cited
Expropriations Act, R.S.O. 1990, c. E.26,
ss. 1(1), 21.
Authors Cited
Fleming, John G. Fleming’s The Law of Torts, 10th ed.,
by Carolyn Sappideen and Prue Vines, eds. Pyrmont, N.S.W.: Lawbook Co., 2011.
Klar, Lewis N. Tort Law, 5th ed. Toronto: Carswell, 2012.
Linden, Allen M., and Bruce Feldthusen. Canadian Tort Law,
9th ed. Markham, Ont.: LexisNexis, 2011.
McLaren, John P. S. “Nuisance in Canada”, in Allen M.
Linden, ed., Studies In Canadian Tort Law. Toronto: Butterworths, 1968,
320.
Murphy, John, and Christian Witting. Street on Torts, 13th
ed. Oxford: Oxford University Press, 2012.
Senzilet, Michael William. “Compensation for Injurious Affection
Where No Land Is Taken”, unpublished LL.M. thesis, University of Ottawa, 1987.
Todd, Eric C. E. The Law of Expropriation and
Compensation in Canada, 2nd ed. Scarborough, Ont.: Carswell, 1992.
APPEAL
from a judgment of the Ontario Court of Appeal (Doherty, Watt and Epstein JJ.A.),
2011 ONCA 419, 106 O.R. (3d) 81, 281 O.A.C. 150, 332 D.L.R. (4th) 641, 6 R.P.R.
(5th) 1, 104 L.C.R. 1, 85 C.C.L.T. (3d) 51, [2011] O.J. No. 2451 (QL),
2011 CarswellOnt 4064, setting aside a decision of Wilson, Hill and Lax JJ.,
2010 ONSC 304, 100 O.R. (3d) 425, 258 O.A.C. 1, 318 D.L.R. (4th) 229, 91 R.P.R.
(4th) 41, 100 L.C.R. 32, [2010] O.J. No. 156 (QL), 2010 CarswellOnt 162, affirming
a decision of the Ontario Municipal Board (2009), 96 L.C.R. 100, [2009]
O.M.B.D. No. 1 (QL), 2009 CarswellOnt 290. Appeal allowed.
Shane
Rayman and Greg Temelini, for the appellant.
Leonard F.
Marsello, Malliha Wilson, Shona L.
Compton and William R. MacLarkey, for the respondent.
Matthew
Taylor and Jonathan Eades, for the
intervener the Attorney General of British Columbia.
Graham J.
Rempe and Matthew G. Longo, for the
intervener the City of Toronto.
Kathryn I.
Chalmers and Patrick G. Duffy, for the
intervener Metrolinx.
The
judgment of the Court was delivered by
Cromwell J. —
I. Introduction
[1]
Highway construction by the Province of Ontario
significantly and permanently interfered with access to the appellant’s land.
The appellant claimed that this interference was unreasonable and sought an
order for compensation before the Ontario Municipal Board. The Board awarded
the appellant $393,000 as compensation for business loss and decline in market
value of the land resulting from the highway construction. The Board’s award,
however, was set aside by the Court of Appeal; it concluded that the
interference with the appellant’s land had not been unreasonable given the
important public purposes served by the highway’s construction. In effect, the
Court of Appeal found that it was reasonable for the appellant to suffer
permanent interference with the use of its land that caused significant
diminution of its market value in order to serve the greater public good. The
appellant asks this Court to reinstate the Board’s award.
[2]
The main question on appeal is this: How should
we decide whether an interference with the private use and enjoyment of land is
unreasonable when it results from construction which serves an important public
purpose? The answer, as I see it, is that the reasonableness of the
interference must be determined by balancing the competing interests, as it is
in all other cases of private nuisance. The balance is appropriately struck by
answering the question whether, in all of the circumstances, the individual claimant
has shouldered a greater share of the burden of construction than it would be
reasonable to expect individuals to bear without compensation. Here, the
interference with the appellant’s land caused by the construction of the new
highway inflicted significant and permanent loss on the appellant; in the
circumstances of this case, it was not unreasonable for the Board to conclude
that an individual should not be expected to bear such a loss for the greater
public good without compensation.
[3]
I would allow the appeal and restore the order
of the Ontario Municipal Board.
II. Legal Context and Issues
[4]
The legal framework for the appeal is found in
the law concerning injurious affection. Injurious affection occurs when the
defendant’s activities interfere with the claimant’s use or enjoyment of land.
Such interference may occur where a portion of an owner’s land is expropriated
with negative effects on the value of the remaining property. Alternatively, it
may arise where, although no land is expropriated, the lawful activities of a
statutory authority on one piece of land interfere with the use or enjoyment of
another property: E. C. E. Todd, The Law of Expropriation and Compensation
in Canada (2nd ed. 1992), at pp. 331-33. In this case, the appellant
claimed compensation for injurious affection where no land is taken because the
highway construction had significantly impeded access to its land.
[5]
The Ontario Expropriations Act, R.S.O.
1990, c. E.26, provides a right to compensation for injurious affection on certain
conditions: s. 21. Where none of the claimant’s land is expropriated, the Act
provides a right to compensation for “such reduction in the market value of the
land of the owner, and . . . such personal and business damages, resulting from
the construction and not the use of the works by the statutory authority, as
the statutory authority would be liable for if the construction were not under
the authority of a statute”: s. 1(1). Thus, in order to recover under the Act,
the claimant has to meet these three statutory requirements, which are often
referred to as the requirements of “statutory authority”, “actionability” and
“construction and not the use”. These requirements mean that (i) the damage
must result from action taken under statutory authority; (ii) the action would
give rise to liability but for that statutory authority; and (iii) the damage
must result from the construction and not the use of the works. Where these
conditions are present, the Act requires that the complainant be compensated for
the amount by which the affected land’s market value was reduced because of the
interference, and for personal and business damages: ss. 1(1) and 21.
[6]
The appellant satisfied the first and third
requirements. As for the first, there was never any dispute that the
construction of the new section of highway was carried out under statutory
authority. With respect to the third, the “construction and not the use”
requirement was contested in the earlier proceedings, but it is no longer in
issue in this Court. What remains is the question of whether the second
requirement is met. That is, whether, if the highway construction had not been
done under statutory authority, the appellant could have successfully sued for
damages caused by the construction.
[7]
The appellant’s primary position, which the
Board accepted, is that it meets this second requirement because it would be
entitled to damages for private nuisance. The Court of Appeal disagreed. While
finding no fault in the Board’s articulation of the law about private nuisance,
the Court of Appeal nonetheless found that the Board had not reasonably applied
that law to the facts before it: 2011 ONCA 419, 106 O.R. (3d) 81. Thus, the
reviewable error found by the Court of Appeal concerns the application of the
legal test for nuisance to the facts.
[8]
In this Court, the parties engaged in a
wide-ranging debate about how to define the elements of private nuisance and
how to assess the reasonableness of the interference. I will address the
questions that arose in that debate in the hope of providing further clarity
concerning the relevant legal principles. But the core issue on which the
appeal turns is whether, as the Court of Appeal decided, the Board was
unreasonable in its application of the law of private nuisance to the facts.
[9]
The issues I will address are these:
1. What are the elements of private nuisance?
2. How is reasonableness assessed in the context of
interference caused by projects that further the public good?
3. Does the unreasonableness of an interference need to be
considered when that interference is physical or material?
4. Did the Court of Appeal err in finding that the Board’s
application of the law of nuisance to the facts was unreasonable?
[10]
Before turning to these issues, I will set out a
brief summary of the facts and proceedings and address the applicable standard
of judicial review.
III. Facts, Proceedings and
Standard of Review
A. Overview of the Facts and
Proceedings
[11]
From 1978 until 2004, the appellant owned
property on Highway 17 near the hamlet of Antrim. On that property, the
appellant operated a truck stop that included a restaurant, bakery, gift shop,
gas and diesel bar, offices and a truck sales, leasing and service centre. The
business enjoyed the patronage of drivers travelling both east and west along
the highway, which formed part of the Trans-Canada Highway system.
[12]
In September 2004, the respondent opened a new
section of Highway 417 that runs parallel to Highway 17 at the point of the
appellant’s property. Highway 17 was significantly altered to allow for the
extension of Highway 417. Because of these changes, Highway 17 now effectively
turns into a dirt road just two kilometres east of the appellant’s truck stop.
Motorists heading east from the truck stop have to take a circuitous route
including a dirt road and two other side roads before they reach Highway 417.
Moreover, motorists travelling on the new stretch of Highway 417 do not have
direct access to the appellant’s truck stop; they have to turn onto a regional
road west of the property and drive about two kilometres to reach it.
According to the appellant, the construction of the new segment of Highway 417
resulted in the closure of Highway 17, effectively putting its truck stop out
of business at that location. It brought a claim before the Ontario Municipal
Board for compensation for injurious affection under the Expropriations Act.
The parties accept the Board’s assessment of compensation; only its finding
that the injurious affection claim was made out is in issue before this Court.
[13]
Having heard the claim, the Ontario Municipal
Board awarded the appellant $58,000 for business loss and $335,000 for loss in
market value of the land. The Board rejected the Province’s position that
construction of the new highway had not impeded or altered access to the truck
stop: (2009), 96 L.C.R. 100, at p. 114. According to the Board, the change in
access resulting from the construction constituted a “serious impairment in
nuisance”: p. 115. The Board found that the construction of the new highway had
changed Highway 17 in a manner that severely restricted access to the
appellant’s land; it had turned Highway 17 into a “shadow of what it was before
Highway 417”: p. 115. In all of the circumstances, this interference was
unreasonable and arose from the construction and not the use of the highway.
[14]
The Board’s decision was upheld on appeal to the
Divisional Court of the Ontario Superior Court of Justice: 2010 ONSC 304, 100
O.R. (3d) 425. The court found that the Board had correctly articulated the law
of private nuisance and had applied it reasonably. Specifically, the Divisional
Court found that the Board had balanced the public utility of the highway
construction against the appellant’s interests in deciding that the
interference caused by the Province was unreasonable.
[15]
On the Province’s further appeal to the Court of
Appeal, the Board’s decision was set aside and the appellant’s claim
dismissed. The Court of Appeal found that the Board’s application of the law
of private nuisance to the facts was unreasonable. In particular, the Court of
Appeal concluded that the Board had failed to balance the competing rights of
the Province and the appellant adequately in two respects. First, the Board
failed to consider two of the three factors it was “obliged to take into
account in assessing the reasonableness of the interference” with the
appellant’s use and enjoyment of its land, namely the character of the
neighbourhood and the sensitivity of the complainant. Second, the Board
“failed to recognize the elevated importance of the utility of the defendant’s
conduct where the interference is the product of ‘an essential public service’”:
para. 129.
B. Standard of Review
[16]
As I explained above, the Court of Appeal set
aside the Board’s decision because it unreasonably applied the law of private
nuisance to the facts before it. The focus of the case is, therefore, on
whether the Board appropriately carried out the balancing inherent in the law
of private nuisance. As the Court of Appeal put it, “Whether there has been an
unreasonable interference with the use and enjoyment of the plaintiff’s land is
a question of judgment based on all of the circumstances”: para. 83. I agree
with the Court of Appeal that the Board’s decision on this point should be
reviewed for reasonableness.
[17]
Before turning to the primary issue in this
case, however, I will address three broader questions relating to the law of
private nuisance.
C. First Question: What Are the
Elements of Private Nuisance?
[18]
The Court of Appeal concluded that a nuisance
consists of an interference with the claimant’s use or enjoyment of land that
is both substantial and unreasonable: paras. 79-80. In my view, this
conclusion is correct.
[19]
The elements of a claim in private nuisance have
often been expressed in terms of a two-part test of this nature: to support a
claim in private nuisance the interference with the owner’s use or enjoyment of
land must be both substantial and unreasonable. A substantial
interference with property is one that is non-trivial. Where this threshold is
met, the inquiry proceeds to the reasonableness analysis, which is concerned
with whether the non-trivial interference was also unreasonable in all of the
circumstances. This two-part approach found favour with this Court in its most
recent discussion of private nuisance and was adopted by the Court of Appeal in
this case, at para. 80: St. Lawrence Cement Inc. v. Barrette, 2008 SCC
64, [2008] 3 S.C.R. 392, at para. 77; see also St. Pierre v. Ontario
(Minister of Transportation and Communications), [1987] 1 S.C.R.
906, at pp. 914-15, quoting with approval H. Street, The Law of Torts (6th
ed. 1976), at p. 219; Susan Heyes Inc. v. Vancouver (City), 2011 BCCA
77, 329 D.L.R. (4th) 92, at para. 75, leave to appeal refused [2011] 3 S.C.R.
xi; City of Campbellton v. Gray’s Velvet Ice Cream Ltd. (1981), 127
D.L.R. (3d) 436 (N.B.C.A.), at p. 441; Royal Anne Hotel Co. v. Village of
Ashcroft (1979), 95 D.L.R. (3d) 756 (B.C.C.A.), at p. 760; Fleming’s The
Law of Torts (10th ed. 2011), at s. 21.80; J. Murphy and C. Witting, Street
on Torts (13th ed. 2012), at p. 443; L. N. Klar, Tort Law (5th ed.
2012), at p. 759.
[20]
The two-part approach, it must be conceded, is
open to criticism. It may sometimes introduce unnecessary complexity and
duplication into the analysis. When it is applied, the gravity of the harm is,
in a sense, considered twice: once in order to apply the substantial
interference threshold and again in deciding whether the interference was
unreasonable in all of the circumstances.
[21]
On balance, however, my view is that we ought to
retain the two-part approach with its threshold of a certain seriousness of the
interference. The two-part approach is consistent with the authorities from
this Court (as I noted above). It is also, in my view, analytically sound.
Retaining a substantial interference threshold underlines the important point
that not every interference, no matter how minor or transitory, is an
actionable nuisance; some interferences must be accepted as part of the normal
give and take of life. Finally, the threshold requirement of the two-part
approach has a practical advantage: it provides a means of screening out weak
claims before having to confront the more complex analysis of reasonableness.
[22]
What does this threshold require? In St.
Lawrence Cement, the Court noted that the requirement of substantial harm
“means that compensation will not be awarded for trivial annoyances”: para. 77.
In St. Pierre, while the Court was careful to say that the
categories of nuisance are not closed, it also noted that only interferences
that “substantially alte[r] the nature of the claimant’s property
itself” or interfere “to a significant extent with the actual use being
made of the property” are sufficient to ground a claim in nuisance: p. 915 (emphasis
added). One can ascertain from these authorities that a substantial injury to
the complainant’s property interest is one that amounts to more than a slight
annoyance or trifling interference. As La Forest J. put it in Tock v. St.
John’s Metropolitan Area Board, [1989] 2 S.C.R. 1181, actionable nuisances
include “only those inconveniences that materially interfere with ordinary
comfort as defined according to the standards held by those of plain and sober
tastes”, and not claims based “on the prompting of excessive ‘delicacy and
fastidiousness’”: p. 1191. Claims that are clearly of this latter nature do not
engage the reasonableness analysis.
[23]
In referring to these statements I do not mean
to suggest that there are firm categories of types of interference which
determine whether an interference is or is not actionable, a point I will
discuss in more detail later. Nuisance may take a variety of forms and may
include not only actual physical damage to land but also interference with the
health, comfort or convenience of the owner or occupier: Tock, at pp.
1190-91. The point is not that there is a typology of actionable
interferences; the point is rather that there is a threshold of seriousness
that must be met before an interference is actionable.
[24]
I therefore find that a private nuisance cannot
be established where the interference with property interests is not, at least,
substantial. To justify compensation, however, the interference must also be
unreasonable. This second part of the private nuisance test is the focus of the
next two issues to which I now turn.
D. Second Question: How Is
Reasonableness Assessed in the Context of Interference Caused by Projects That
Further the Public Good?
[25]
The main question here is how reasonableness
should be assessed when the activity causing the interference is carried out by
a public authority for the greater public good. As in other private nuisance
cases, the reasonableness of the interference must be assessed in light of all
of the relevant circumstances. The focus of that balancing exercise, however,
is on whether the interference is such that it would be unreasonable in all of
the circumstances to require the claimant to suffer it without compensation.
[26]
In the traditional law of private nuisance, the
courts assess, in broad terms, whether the interference is unreasonable by
balancing the gravity of the harm against the utility of the defendant’s
conduct in all of the circumstances: see, e.g., A. M. Linden and B. Feldthusen,
Canadian Tort Law (9th ed. 2011), at p. 580. The Divisional Court and
the Court of Appeal identified several factors that have often been referred to
in assessing whether a substantial interference is also unreasonable. In
relation to the gravity of the harm, the courts have considered factors such as
the severity of the interference, the character of the neighbourhood and the
sensitivity of the plaintiff: see, e.g., Tock, at p. 1191. The frequency
and duration of an interference may also be relevant in some cases: Royal
Anne Hotel, at pp. 760-61. A number of other factors, which I will turn to
shortly, are relevant to consideration of the utility of the defendant’s
conduct. The point for now is that these factors are not a checklist; they are
simply “[a]mong the criteria employed by the courts in delimiting the ambit of
the tort of nuisance”: Tock, at p. 1191; J. P. S. McLaren, “Nuisance in
Canada”, in A. M. Linden, ed., Studies In Canadian Tort Law (1968), 320,
at pp. 346-47. Courts and tribunals are not bound to, or limited by, any
specific list of factors. Rather, they should consider the substance of the
balancing exercise in light of the factors relevant in the particular case.
[27]
The way in which the utility of the defendant’s
conduct should be taken into account in the reasonableness analysis is
particularly important in this case and would benefit from some explanation.
[28]
The first point is that there is a distinction
between the utility of the conduct, which focuses on its purpose, such as
construction of a highway, and the nature of the defendant’s conduct, which
focuses on how that purpose is carried out. Generally, the focus in nuisance is
on whether the interference suffered by the claimant is unreasonable,
not on whether the nature of the defendant’s conduct is unreasonable.
This point was made by the court in Jesperson’s Brake & Muffler Ltd. v.
Chilliwack (District) (1994), 88 B.C.L.R. (2d) 230 (C.A.). In that case,
the construction of an overpass resulted in a 40 percent drop in the market
value of the claimant’s lands. The statutory authority argued that the claimant
had to establish (and had failed to do so) that the statutory authority
had used its land unreasonably. The Court of Appeal correctly rejected
that contention. The focus of the reasonableness analysis in private nuisance
is on the character and extent of the interference with the claimant’s land;
the burden on the claimant is to show that the interference is substantial and
unreasonable, not to show that the defendant’s use of its own land is
unreasonable.
[29]
The nature of the defendant’s conduct is not,
however, an irrelevant consideration. Where the conduct is either malicious or
careless, that will be a significant factor in the reasonableness analysis:
see, e.g., Linden and Feldthusen, at pp. 590-91; Fleming, at s. 21.110; Murphy
and Witting, at p. 439. Moreover, where the defendant can establish that his or
her conduct was reasonable, that can be a relevant consideration, particularly
in cases where a claim is brought against a public authority. A finding of
reasonable conduct will not, however, necessarily preclude a finding of
liability. The editors of Fleming’s The Law of Torts put this point well
at s. 21.120:
. . . unreasonableness in nuisance
relates primarily to the character and extent of the harm caused rather than
that threatened. . . . [T]he “duty” not to expose one’s neighbours to a
nuisance is not necessarily discharged by exercising reasonable care or even
all possible care. In that sense, therefore, liability is strict. At the same
time, evidence that the defendant has taken all possible precaution to
avoid harm is not immaterial, because it has a bearing on whether he subjected
the plaintiff to an unreasonable interference, and is decisive in those cases
where the offensive activity is carried on under statutory authority. . . .
[I]n nuisance it is up to the defendant to exculpate himself, once a prima
facie infringement has been established, for example, by proving that his own
use was “natural” and not unreasonable. [Emphasis added.]
[30]
The second point is that the utility of the
defendant’s conduct is especially significant in claims against public
authorities. Even where a public authority is involved, however, the utility of
its conduct is always considered in light of the other relevant factors in the
reasonableness analysis; it is not, by itself, an answer to the reasonableness
inquiry. Moreover, in the reasonableness analysis, the severity of the harm
and the public utility of the impugned activity are not equally weighted
considerations. If they were, an important public purpose would always override
even very significant harm caused by carrying it out. As the editors of Fleming’s
The Law of Torts put it, the utility consideration “must not be pushed too
far. . . . [A] defendant cannot simply justify his infliction of great harm
upon the plaintiff by urging that a greater benefit to the public at large has
accrued from his conduct”: s. 21.110. The words of McIntyre J.A. in Royal
Anne Hotel are apposite:
There is no reason why a
disproportionate share of the cost of such a beneficial service should be
visited upon one member of the community by leaving him uncompensated for
damage caused by the existence of that which benefits the community at large.
[p. 761]
[31]
The Queen v.
Loiselle, [1962] S.C.R. 624, demonstrates that even a very important public
purpose does not simply outweigh the individual harm to the claimant. Mr.
Loiselle operated a garage and service station on the main Montréal-Valleyfield
highway. His business ended up on a dead-end highway as a result of the
construction of the St. Lawrence Seaway. This Court upheld an award of
compensation for injurious affection, noting that the “statutory authority
given to construct the works in question was . . . expressly made subject to
the obligation to pay compensation for damage to lands injuriously affected”:
p. 627. In other words, the landowner was entitled to compensation even though
construction of the Seaway served an important public objective.
[32]
Other Canadian appellate authority has also
recognized this point.
[33]
In Newfoundland (Minister of Works, Services
and Transportation) v. Airport Realty Ltd., 2001 NFCA 45, 205 Nfld. &
P.E.I.R. 95, the Court of Appeal considered an award of $300,000 for
compensation for damage flowing from the reconstruction of the access road to
the St. John’s airport. The court correctly rejected the position that the
utility of a public work can simply be balanced against the severity of the
harm as if they were equal considerations: para. 39. If, as was argued before
the Court of Appeal, the two factors were simply compared, one against the
other, a high degree of public utility would always trump even very extensive
interference. Such an approach, as I will explain, defeats the purpose of
legislation that provides compensation for injurious affection.
[34]
Mandrake Management Consultants Ltd. v.
Toronto Transit Commission (1993), 62 O.A.C. 202,
concerned a claim in nuisance on the basis that subway lines caused noise and
vibrations affecting the plaintiffs’ enjoyment of their property. In allowing
the appeal from an award of damages, the Court of Appeal noted that “where an
essential public service is involved the factor of the utility of the
defendant’s conduct must not be disregarded. Indeed, I think it must be given
substantial weight”: para. 46. The court noted, however, that “private rights
cannot be trampled upon in the name of the public good”: para. 46. It also
underlined this point by quoting, at para. 19, the following passage with
approval: “Liability for damages is imposed in those cases in which the harm or
risk to one is greater than he ought to be required to bear under the
circumstances, at least without compensation”: Schenck v. The Queen
(1981), 34 O.R. (2d) 595 (H.C.J.), per Robins J. (as he then was), at
p. 603, citing Restatement of the Law, Second: Torts 2d (1979),
vol. 4, at §822 (emphasis added). In other words, the question is not simply
whether the broader public good outweighs the individual interference when the
two are assigned equal weight. Rather, the question is whether the interference
is greater than the individual should be expected to bear in the public
interest without compensation.
[35]
The court’s statement in Mandrake that
the utility of the defendant’s conduct should be given “substantial weight”
must be viewed in the context of this point. The court, in conducting its
analysis, did not simply conclude that the public benefit outweighed the
individual harm. Instead, it considered all of the circumstances, including:
the essentially commercial nature of the area, in which people operating
businesses are required to put up with a considerably greater intrusion on
their sensibilities than do people living in residential areas; the fact that
the presence of the subway had no negative effect on the profitability of the
plaintiffs’ business; the absence of material damage to the building; and the
fact that the noise and vibrations of which the claimants complained were the
inevitable result of the operation of the subway.
[36]
Mandrake, therefore,
does not support a simple trumping of the private interest by the public
utility of the defendant’s conduct, but rather a careful weighing of interests
taking into account all of the circumstances. The question asked and answered
by the court was not simply whether the public benefit outweighed the private
interference, but whether that interference, in light of all of the
circumstances, was more than the plaintiffs could reasonably be expected to
bear without compensation.
[37]
Similarly, the concluding comments in McIntyre
J.’s judgment in St. Pierre must be read in context. The case
concerned a claim for injurious affection arising out of highway construction.
The Court unanimously upheld the dismissal of the claim, agreeing with the
Court of Appeal that the claimants complained only of loss of amenities —
primarily view and privacy — resulting from the construction. In the context of
a claim of that nature, McIntyre J. noted:
Highways are necessary: they cause
disruption. In the balancing process inherent in the law of nuisance, their
utility for the public good far outweighs the disruption and injury which is
visited upon some adjoining lands. [p. 916]
These comments must be
understood in relation to the nature of the alleged injury in that case which,
as noted, was a simple loss of amenities. It is clear that these comments do
not stand for the broader proposition that great public good out-balances even
very significant interference. McIntyre J. quoted with approval the Court’s
earlier decision in Loiselle which I referred to earlier. In that case,
the significant public good resulting from the seaway construction did not
outweigh the significant interference with access to Mr. Loiselle’s property. Loiselle
and St. Pierre would obviously be in conflict if St. Pierre
were thought to stand for the broad proposition that great public good
outweighs even significant interference. Yet McIntyre J. saw no such
inconsistency. Moreover, such a broad reading of St. Pierre would
undermine the statutory purpose of providing a right of compensation for
injurious affection.
[38]
Generally speaking, the acts of a public
authority will be of significant utility. If simply put in the balance with the
private interest, public utility will generally outweigh even very significant
interferences with the claimant’s land. That sort of simple balancing of public
utility against private harm undercuts the purpose of providing compensation
for injurious affection. That purpose is to ensure that individual members of
the public do not have to bear a disproportionate share of the cost of
procuring the public benefit. This purpose is fulfilled, however, if the focus
of the reasonableness analysis is kept on whether it is reasonable for the
individual to bear the interference without compensation, not on whether it was
reasonable for the statutory authority to undertake the work. In short, the
question is whether the damage flowing from the interference should be properly
viewed as a cost of “running the system” and therefore borne by the public
generally, or as the type of interference that should properly be accepted by
an individual as part of the cost of living in organized society: Tock,
at p. 1200.
[39]
The point was well put by Robins J. in Schenck,
a decision approved by La Forest J. in Tock. In allowing the
plaintiffs’ action for nuisance resulting from damage to their orchards from
salt applied to a nearby highway, Robins J. said:
. . . their injury is a cost of highway
maintenance and the harm suffered by them is greater than they should be required
to bear in the circumstances, at least without compensation. Fairness
between the citizen and the state demands that the burden imposed be borne by
the public generally and not by the plaintiff fruit farmers alone. [Emphasis
added; pp. 604-5.]
The distinction is thus
between, on one hand, interferences that constitute the “give and take”
expected of everyone and, on the other, interferences that impose a
disproportionate burden on individuals. That in my view is at the heart of the
balancing exercise involved in assessing the reasonableness of an interference
in light of the utility of the public authority’s conduct.
[40]
Of course, not every substantial interference
arising from a public work will be unreasonable. The reasonableness analysis
should favour the public authority where the harm to property interests,
considered in light of its severity, the nature of the neighbourhood, its
duration, the sensitivity of the plaintiff and other relevant factors, is such
that the harm cannot reasonably be viewed as more than the claimant’s fair
share of the costs associated with providing a public benefit. This outcome is
particularly appropriate where the public authority has made all reasonable
efforts to reduce the impact of its works on neighbouring properties.
[41]
It is clear, for example, that everyone must put
up with a certain amount of temporary disruption caused by essential
construction. Although not a case involving a public authority, the judgment of
Sir Wilfrid Greene M.R. in Andreae v. Selfridge & Co., [1938] 1 Ch.
1, is instructive:
. . . when one is dealing with
temporary operations, such as demolition and re-building, everybody has to put
up with a certain amount of discomfort, because operations of that kind cannot
be carried on at all without a certain amount of noise and a certain amount of
dust. Therefore, the rule with regard to interference must be read subject to
this qualification . . . that in respect of operations of this character, such
as demolition and building, if they are reasonably carried on and all proper
and reasonable steps are taken to ensure that no undue inconvenience is caused
to the neighbours, whether from noise, dust, or other reasons, the neighbours
must put up with it. [pp. 5-6]
[42]
There are several important ideas in this quotation.
One is that the duration of the interference is a relevant consideration.
Admittedly, duration was not a relevant factor in this case because the injury
was permanent. In cases where it is relevant however, it is helpful to consider
that some sorts of temporary inconvenience are more obviously part of the
normal “give and take” than are more prolonged interferences. While temporary
interferences may certainly support a claim in nuisance in some circumstances,
interferences that persist for a prolonged period of time will be more likely
to attract a remedy: see, in the context of public nuisance, Wildtree Hotels
Ltd. v. Harrow London Borough Council, [2001] 2 A.C. 1 (H.L.).
[43]
Another important idea is that the traditional
consideration relating to the character of the neighbourhood may be highly
relevant in the overall balancing. This point is particularly relevant in cases
where a claim is brought against a public authority. As Michael Senzilet has
written,
With
the urban environments of today, people live much closer together and much
closer to public corridors than they did 100 years ago . . . . In
today’s urban fabric, buildings are closer together, closer to roads, building
lots are smaller, and there are far more public projects that are both possible
and required. Surely, the choice of living in the urban core, in a suburb, or
in the countryside exposes one to differences and one’s choice must be made
taking into account those differences.
(“Compensation for Injurious Affection Where No Land Is Taken”, unpublished
LL.M. thesis, University of Ottawa (1987), at p. 73)
[44]
A final point emerging from the Andreae
case, which I alluded to above, relates to the manner in which the work is
carried out. While nuisance focuses mainly on the harm and not on the
blameworthiness of the defendant’s conduct, the fact that a public work is
carried out with “all reasonable regard and care” for the affected citizens is
properly part of the reasonableness analysis: see, e.g., Allen v. Gulf Oil
Refining Ltd., [1981] A.C. 1001, per Lord Wilberforce, at p. 1011.
[45]
To sum up on this point, my view is that in
considering the reasonableness of an interference that arises from an activity
that furthers the public good, the question is whether, in light of all of the
circumstances, it is unreasonable to expect the claimant to bear the
interference without compensation.
E. Third Question: Does the
Unreasonableness of an Interference Need to Be Considered When That Interference
Is Physical or Material?
[46]
The appellant submits that reasonableness does
not need to be considered when the interference constitutes “material” or
“physical” damage to the land. Reasonableness only needs to be addressed, the
submission goes, with respect to other types of interference such as loss of
amenities. In this case, the appellant maintains that the damage to its land
was “material” and that therefore no reasonableness analysis was necessary. I
respectfully disagree and conclude that the Court of Appeal was correct to hold
that the question of reasonableness should be considered in all cases.
[47]
The distinction between material or physical
harms on the one hand and interferences such as loss of amenities on the other
has a long history and deep roots, going back at least to the House of Lords
decision in St. Helen’s Smelting Co. v. Tipping (1865), 11 H.L.C. 642,
11 E.R. 1483. In that case, the Lord Chancellor distinguished between nuisance
causing “material injury” to property and nuisance “productive of sensible
personal discomfort”, finding that only the latter category required an
assessment of whether an interference is reasonable taking into account all of
the surrounding circumstances: p. 650. This approach has since been adopted in
many Canadian decisions (see, e.g., Walker v. McKinnon Industries Ltd.,
[1949] 4 D.L.R. 739 (Ont. H.C.), at p. 763, injunction order varied by [1950] 3
D.L.R. 159 (Ont. C.A.), aff’d [1951] 3 D.L.R. 577 (P.C.)) including a few more
recent cases, such as, for example, Jesperson’s and Airport Realty.
A good deal of the jurisprudence is helpfully reviewed in Smith v. Inco Ltd.,
2011 ONCA 628, 107 O.R. (3d) 321, at paras. 45-50. At the same time, there
is appellate authority affirming the need to consider the reasonableness of the
interference in every case: Susan Heyes Inc.
[48]
My view is that the reasonableness inquiry
should not be short-circuited on the basis of certain categories of
interference that are considered self-evidently unreasonable. To the extent
that cases such as Jesperson’s and Airport Realty suggest that
balancing can simply be dispensed with in the face of material or physical
interference, I respectfully disagree. The sort of balancing inherent in the
reasonableness analysis is at the heart of the tort of private nuisance. As La
Forest J. put it in Tock, the law only intervenes “to shield persons
from interferences to their enjoyment of property that were unreasonable in the
light of all the circumstances”: p. 1191. The legal analysis in a nuisance
case is more likely to yield sound results if this essential balancing exercise
is carried out explicitly and transparently rather than implicitly by applying
a murky distinction.
[49]
There are obvious difficulties in making the
analysis turn on classifying interferences as constituting material or physical
damage. It will not always, or even generally, be a simple matter to
distinguish between damage that is “material or physical” and damage that is a
simple “loss of amenity”. The distinction proposed by the appellant is
particularly difficult to apply in cases like this one, where the nuisance is
an interference with access to land. The damage to the appellant here could be
considered material in the sense that it caused significant financial loss, but
it could perhaps also be considered in some sense to be a loss of amenity
because there was no harm to the property itself. The property declined in
value, but that is also the case in some loss of amenity situations.
[50]
While I am not convinced of the usefulness of
the distinction between material injury and loss of amenity, I acknowledge that
where there is significant and permanent harm caused by an interference, the
reasonableness analysis may be very brief. As the British Columbia Court of
Appeal noted in Royal Anne Hotel,
Where . . . actual physical damage
occurs it is not difficult to decide that the interference is in fact
unreasonable. Greater difficulty will be found where the interference results
in lesser or no physical injury but may give offence by reason of smells,
noise, vibration or other intangible causes. [p. 760]
Thus, even though the
reasonableness of the interference should be assessed in every case, the court
will sometimes quite readily conclude that some types of interferences are
unreasonable without having to engage in a lengthy balancing analysis. Jesperson’s,
for example, was a case in which the construction of the overpass
reduced the market value of the land by 40 percent. It is not surprising that
the Court of Appeal gave short shrift to the suggestion that it was reasonable
to impose a burden of that magnitude on the claimant. Similarly, in Airport
Realty, the damage flowing from the interference was assessed at
$300,000 thus making the assessment of unreasonableness straightforward: see
also on this point Schenck.
[51]
I therefore conclude that reasonableness is to
be assessed in all cases where private nuisance is alleged. Once a claimant
passes the threshold test of showing harm that is substantial in the sense that
it is non-trivial, there ought to be an inquiry into whether the interference
is unreasonable, regardless of the type of harm involved.
F. Fourth Question: Did the Court
of Appeal Err in Finding That the Board’s Application of the Law of Nuisance to
the Facts Was Unreasonable?
[52]
I respectfully disagree with the Court of
Appeal’s approach to the balancing exercise to determine whether the
interference was unreasonable. As I see it, there were two errors in its
approach.
[53]
Having identified the factors noted earlier that
are often referred to in carrying out the balancing exercise (i.e. the severity
of the interference, the character of the neighbourhood, the utility of the
defendant’s conduct and the sensitivity of the plaintiff), the Court of Appeal
treated them as a mandatory checklist for courts or tribunals considering this
issue. It faulted the Board for failing to consider two of the factors that “it
was obliged to take into account in assessing the reasonableness of the
interference”: para. 129. In my respectful view, the Court of Appeal erred in
intervening on this ground.
[54]
Provided that the Board reasonably carried out
the analysis in substance, it was not required to specifically enumerate and
refer by name to every factor mentioned in the case law. As La Forest J. made
clear in Tock, the factors he enumerated are simply examples of the sorts
of criteria that the courts have articulated as being potentially of assistance
in weighing the gravity of the harm with the utility of the defendant’s
conduct. They do not make up either an exhaustive or an essential list of
matters that must be expressly considered in every case. Failure to expressly
mention one or more of these factors is not, on its own, a reviewable error.
[55]
The Board’s task was to determine whether,
having regard to all of the circumstances, it was unreasonable to require the
appellant to suffer the interference without compensation. The Board
considered the evidence and the leading cases. Although it did not refer to
them by name, the Board took into account the relevant factors in this case. In
particular, it considered the extent of the changes to Highway 17, the fact
that those changes were considered necessary for public safety, the appellant’s
knowledge of — and involvement in — the plans to make changes to the highway,
and the extent to which the appellant’s concerns about the new highway were
taken into account by the respondent in its decision making. The Board
concluded that the interference resulting from the construction of the highway
was serious and would constitute nuisance but for the fact that the work was
constructed pursuant to statutory authority: pp. 110-15. There was no
reviewable error in this approach.
[56]
Similarly in my view, the Board did not fail to
take account of the utility of the respondent’s activity or fail to engage in
the required balancing as the Court of Appeal concluded it had. As we have
seen, the Board adverted to the importance of the highway construction. It did
not, however, allow that concern to swamp consideration of whether it was
reasonable to require the appellant to bear without compensation the burden
inflicted on it by the construction. The Board properly understood that the
purpose of the statutory compensation scheme for injurious affection was to
ensure that individuals do not have to bear a disproportionate burden of damage
flowing from interference with the use and enjoyment of land caused by the
construction of a public work. It was reasonable for the Board to conclude that
in all of the circumstances, the appellant should not be expected to endure
permanent interference with the use of its land that caused a significant
diminution of its market value in order to serve the greater public good.
IV. Disposition
[57]
I would allow the appeal, set aside the order of
the Court of Appeal and restore the order of the Ontario Municipal Board. I
would not disturb the orders for costs made by the Board or by the Divisional
Court. (We were advised that the costs before the Board have been fixed and
paid by the respondent.) I would award the appellant costs of the appeal in the
Court of Appeal in the agreed upon amount of $20,000 inclusive of disbursements
and I would not disturb the Court of Appeal’s disposition of the costs of the
cross-appeal before that court. In this matter arising under the Expropriations
Act, I would exercise discretion and award the appellant its costs in this
Court, including the application for leave to appeal, on a solicitor and client
basis.
Appeal
allowed with costs.
Solicitors for the
appellant: Rueter Scargall Bennett, Toronto.
Solicitor for the
respondent: Attorney General of Ontario, Toronto.
Solicitor for the
intervener the Attorney General of British Columbia: Attorney
General of British Columbia, Vancouver.
Solicitor for the
intervener the City of Toronto: City of Toronto, Toronto.
Solicitors for the
intervener Metrolinx: Stikeman Elliott, Toronto.