National Capital Commission v. Hobbs, [1970] SCR 337

Supreme Court of Canada

National Capital Commission v. Hobbs, [1970] S.C.R. 337

Date: 1970-01-27

National Capital Commission Appellant;

and

Lloyd Hobbs Respondent.

1969: December 11, 12; 1970: January 27.

Present: Cartwright C.J. and Abbott, Martland, Ritchie and Pigeon JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA

Expropriation—Amount of compensation—Market value—Special value to owner—Proof of that value.

The respondent’s property which was expropriated by the appellant commission contained1 approximately 90 acres. It was a wood lot, situated some two or three miles from the respondent’s farm and little used by him except for firewood until he and his son started building a road in 1962 with a view to selling cottage lots. Its only distinguishing and attractive feature was that part of the property fronting on Curley Lake. A plan of subdivision had been prepared which divided that part of the property fronting on the lake into ten lots. The Exchequer Court found that the market value of the property with all its attributes and potentialities and its advantages and disadvantages, was $12,500. The Court then went on to award an additional sum of $7,500 as “value to the owner”. On appeal to this Court, the Commission does not dispute the assessment of the market value, based on comparable sales both before and after the date of the expropriation, but submits that the Court erred both in fact and in law in awarding the additional sum of $7,500.

Held: The appeal should be allowed.

Where it is claimed that a property has a special value to the owner over and above its market value, the owner must adduce the facts necessary to prove this value, which must be such that it can be measured in terms of money. There must be proof that the land had special advantages that gave it a special economic value for the expropriated party, and no value should be attributed for sentimental attachment. There was no evidence justifying the award of an

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additional sum as “value to the owner”. Even assuming, as the Exchequer Court found, that the property was, for the respondent and his family, “a source of profit, recreation and outlet”, these are factors which enter into the calculation of the market value, and do not give to the property a special value to the owner beyond what it would have in similar use by somebody else.

APPEAL from a judgment of Jackett P. of the Exchequer Court of Canada, in an expropriation matter. Appeal allowed.

Paul Ollivier, Q.C., and Eileen Mitchell Thomas, Q.C., for the appellant.

Paul Martineau, Q.C., for the respondent.

The judgment of the Court was delivered by

ABBOTT J.—This is an appeal from a judgment of the President of the Exchequer Court, dated May 15, 1969, awarding the respondent the sum of $20,000 as compensation for the expropriation of a parcel of land in the Gatineau Park on February 10, 1965.

The expropriated property is described as Lot 16A, Range VIII, Township of Onslow, County of Pontiac, contains 90.718 acres and is about thirty-five miles northwest of Ottawa and about one mile north from a township road called Steele Line. Until 1962, the road, leading from the Steele Line to the property, was a bush or winter road. In 1962, the respondent and his son started building a road to allow trucks and cars to reach the property.

This property, which is described in the judgment below as a bush lot, is situated about two or three miles east and north of a 200-acre farm operated by the respondent on the south side of the Steele Line on Lot 13A, Range VI.

The respondent Lloyd Hobbs did not testify at the trial because of illness, but Mrs. Hobbs testified that this bush lot had been acquired in 1941 from Mr. Hobb’s father and that, prior to the expropriation, they were contemplating development of the property as cottage lots. A

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plan of subdivision had been prepared which divided that part of the property fronting on Curley Lake into ten lots. On October 22, 1964, four months prior to the expropriation, the respondent had advertised these lots for sale. One lot was sold to the respondent’s son, Garland Hobbs, for $500 and one was sold to Mrs. Hobbs’ sister for $1,000. No other sales were made.

After a careful review of all the evidence, the President found that the market value of the property expropriated from the respondent, containing approximately ninety acres, with all its attributes and potentialities and its advantages and disadvantages, was $12,500. He then went on to award an additional sum of $7,500 as “value to the owner” and fixed the compensation at $20,000.

On this appeal, appellant does not dispute the President’s assessment of the market value of the property at $12,500, based on comparable sales both before and after the date of the expropriation. It submits, however, that he erred both in fact and in law in awarding the respondent an additional sum of $7,500.

The rules for determining compensation in cases of this kind have been discussed in a series of decisions in this court: Diggon-Hibben, Limited v. The King[1]; Woods Manufacturing Company Limited v. The King[2]; Gagetown Lumber Co. Ltd. v. The King[3]. No useful purpose would be served by referring to them in detail. Generally speaking, an owner is entitled to the value of the property to him, calculated on the basis of its highest and best use. This value may be the market value, but it may be more in those cases where, for some reason, the land has a special value to the owner beyond what it would have in similar use by somebody else.

Where it is claimed that a property has a special value to the owner over and above its market value, the owner must adduce the facts necessary to prove this value, which must be such that it

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can be measured in terms of money. It is not sufficient for a claimant to say that he would pay a certain amount of money rather than be deprived of his property. There must be proof that the land had special advantages that gave it a special economic value for the expropriated party, and no value should be attributed for sentimental attachment.

In my opinion and with respect, those principles were not followed or applied in this case.

The property expropriated was a wood lot, situated some two or three miles from the respondent’s farm and little used by him except for firewood until he and his son started building a road in 1962 with a view to selling cottage lots. Its only distinguishing and attractive feature was that part of the property fronting on Curley Lake. The President noted that the average price of bush lots at the time of the expropriation was $100 an acre but, considering what the President described as “its very substantial cottage lot potential in relation to Curley Lake and its own small lake, and its proximity to Lac Lapêche”, he found that the expropriated property “had a value substantially in excess of the $100 per acre paid in the same year for mountain-side properties with no such characteristics” and fixed its value at $140 an acre or $12,500. The expenditures made by respondent for surveys and improvements to the access road are all reflected in this market value.

Having found this sum of $12,500 to be the market value of the property, in my opinion, there was no evidence justifying the award of an additional sum of $7,500 as “value to the owner”. Even assuming, as the President found, that the property was, for the respondent and his family, “a source of profit, recreation and outlet”, these are factors which enter into the calculation of the market value of the property, and do not give to the property a special value to the owner beyond what it would have in similar use by somebody else.

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I would allow the appeal and vary the judgment of the Exchequer Court so that paragraphs 2 and 3 thereof read as follows:

2. The amount of compensation payable for the aforesaid lands and for all damages resulting from the expropriation thereof is hereby fixed at $12,500.00.

3. The defendant, upon his delivering to the plaintiff a valid and sufficient release or releases of all or any claims, liens, charges or encumbrances of any kind or nature whatsoever that may have existed upon the said lands at the time of the said expropriation (other than such rights of way as existed for the benefit of adjoining properties) is entitled to be paid by the plaintiff the sum of $12,500.00 with interest at 5 per cent per annum from February 10, 1965.

At the hearing before us, counsel for the appellant stated that, in view of the circumstances of respondent, appellant was prepared to agree that respondent be awarded costs in this court as well as in the Exchequer Court.

Appeal allowed.

Solicitor for the appellant: D.S. Maxwell, Ottawa.

Solicitor for the respondent: P.A. Martineau, Hull.