Drew v. The Queen, [1961] SCR 614

Supreme Court of Canada

Drew v. The Queen, [1961] S.C.R. 614

Date: 1961-06-26

Aileen M. Drew (Suppliant) Appellant;

and

Her Majesty The Queen Respondent.

Aileen M. Drew (Defendant) Appellant;

and

Her Majesty The Queen on the information of the Deputy Attorney General of Canada (Plaintiff) Respondent.

1961: March 7, 8; 1961: June 26.

Present: Kerwin C.J. and Taschereau, Locke, Cartwright, Fauteux, Abbott, Martland, Judson and Ritchie JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.

Expropriation—Compensation—Alleged agreement with Crown not established—Principles respecting allowance for compulsory taking—Interest—Expropriation Act, RJS.C. 1952, c. 106.

Certain property belonging to the appellant was expropriated by the Crown on February 12, 1954. The appellant in an action by petition of right claimed the sum of $17,330 (and interest) as compensation for the land expropriated, to which she alleged she was entitled by virtue of an alleged agreement made between her and the Crown as a result of certain actions taken and statements made by P, who was a solicitor and a Member of Parliament. The petition of right was dismissed.

In an action commenced by information the Exchequer Court allowed $11,200 as the compensation to which the appellant was entitled, less $10,080 paid on account, together with interest on the difference between these two sums from the date of giving up possession. The appellant appealed from both judgments. In the proceedings commenced by information the points argued in this Court were the trial Judge's refusal to allow ten per cent for compulsory taking and the question of interest.

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Held: Both appeals should be dismissed.

Per Curiam: There was no such agreement as that claimed by the appellant that the Minister had authorized P to secure the services of a valuator and that the Minister and P had agreed that the amounts fixed by the valuator would be accepted by the several owners and by the Government The evidence failed to show any holding out by the Minister of P as an agent. P had no ostensible authority to enter into an agreement on behalf of the Crown.

There was no basis for the claim that the appellant should be granted interest on the difference between the value of her land over and above its value as a farm even while she was in possession.

Per Kerwin C.J. and Taschereau J.: No decision of this Court had established that mere difficulty in arriving at the value to the owner of property expropriated, because of difference of opinion among the experts, would be sufficient to grant an allowance for compulsory taking. The ordinary rule is that the allowance is not to be made and that in order to justify it there must be special circumstances. Here there were no special circumstances.

Per Locke J.: No support for the proposition that an allowance for compulsory taking is made in circumstances presenting difficulty or uncertainty in appraising values was to be found in any of the reported cases in either the Exchequer Court or this Court. The reason for the allowance of a percentage of the value of the land as part of the compensation was to provide for the expense and inconvenience to the owner in moving elsewhere, the loss of benefits enjoyed by the owner due to the location of the property taken and, where a business is carried on which the owner proposes to continue elsewhere, the loss due to the dislocation of the business, the loss of profit in the interval before it can be established elsewhere, moving costs and other unavoidable expenses. Here it appeared that expenditures necessitated for moving and establishing a home elsewhere had been taken into consideration in estimating the value of the property to the appellant.

Per Cartwright, Fauteux, Abbott, Martland, Judson and Ritchie JJ.: The problem of allowance for compulsory taking was open for a reconsideration It was possible to find at least three principles followed from time to time in this Court, (i) an allowance as a matter of course, (ii) no allowance where value to the owner had been ascertained and, (iii) an allowance in special circumstances.

There was no statutory basis for the allowance and no rule of law requiring it.

In fixing the amount of an award there are other factors, other than the market value of the property expropriated, which must be taken into account but which are not easily calculated. In such cases the tribunal of fact may decide that compensation for such factors can best be appraised in the form of a percentage of the market value. This is but a part of the process of determining value to the owner. Once that value has been assessed in accordance with .the rule in Woods Manufacturing Co. Ltd. v. R., [1951] S.C.R. 504, it represents full compensation and the owner is not entitled to an additional amount for compulsory taking.

Irving Oil Co. Ltd. v. R., [1946] S.C.R. 551; Diggon-Hibben Ltd. v. R., [1949] S.C.R. 713; R. v. Lavoie, unreported, considered; R. v. Hunting (1916), 32 D.L.R. 331; Dodge.v. R. (1906), 38 S.C.R. 149; R. v. Hearn

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(1917), 55 S.C.R. 562; R. v. Larivée (1918), 56 S.C.R. 376; St. Michael's College v. Toronto, [1926] S.C.R. 318; Canadian Provincial Power Co. Ltd. v. Nova Scotia Power Commission, [1928] S.C.R. 586; Re Watson and Toronto (1916), 32 D.L.R. 637; R. v. The Sisters of Charity of Providence, [1952] Ex. C.R. 113; Woods Manufacturing Co. Ltd. v. R., [1951] S.C.R. 504; Lake Erie and Northern Ry. Co. v. Brantford Golf and Country Club (1916), 32 D.L.R. 219, referred to.

APPEALS from two judgments of the President of the Exchequer Court of Canada in actions tried together. Appeals dismissed.

F. A. Brewin, Q.C., and Ian G. Scott, for the appellant.

D. S. Maxwell and P. M. Troop, for the respondent.

The judgment of the Chief Justice and of Taschereau J. was delivered by

The Chief Justice:—These are appeals by Mrs. Aileen M. Drew from two judgments of the President of the Exchequer Court dated May 19, 1959. One was rendered in an action commenced June 12, 1956, by way of information to have the compensation determined for certain land belonging to Mrs. Drew, which had been expropriated on February 12, 1954, by the filing of a plan and description under s. 9 of the Expropriation Act, R.S.C. 1952, c. 106. The other judgment was rendered upon a petition of right filed December 23, 1958, on behalf of Mrs. Drew in which she claimed the sum of $17,330 (and interest) as compensation for the land expropriated to which she alleged she was entitled by virtue of an alleged agreement made between her and the Crown as a result of certain actions taken and statements made by Mr. John Pallett. The two actions were tried together and reasons for judgment were handed down on the same day. The petition of right was dismissed with costs. In the action commenced by information the judgment of the Exchequer Court declared (1) that the lands in question became vested in Her Majesty on February 12, 1954; (2) that the amount of the compensation money to which Mrs. Drew was entitled and all damages resulting from the expropriation were $11,200, less the sum of $10,080 paid on account, together with interest on the difference between these two sums, $1,120 at the rate of five per cent per annum from December 1, 1958, to the date of judgment, May 19, 1959. It was further declared that upon Mrs. Drew giving a valid and sufficient release

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of all claims she was entitled to be paid the sum of $1,120 with interest as aforesaid. Mrs. Drew was given her costs of the action to be set off against the costs of the petition of right.

It will be convenient to deal first with the appeal in connection with the petition of right proceedings. The first point raised by counsel for the appellant relates to the following paragraph in the reasons for judgment of the President:—"Finally it must be kept in mind that the burden of proof of the alleged agreement lies on the suppliant. In my view of the evidence she has not discharged this burden and I so find". It is said that this finding is not justified. However, it must be read in conjunction with all of the President's reasons and particularly this immediately succeeding paragraph:—"And I am unable to find any support for the submission that the Minister clothed Mr. Pallett with authority to make an agreement that would be binding on both parties. He was never an agent of the Government and the Minister never held him out as such". Mr. Pallett was a solicitor and a Member of Parliament. He was acting as solicitor for Mrs. Drew and on September 14, 1956, his firm filed a defence to the Crown's information of June 12, 1956. A number of properties belonging to various owners had been expropriated, including that of Mrs. Drew, for the purpose of the Malton Airport in Ontario. Some of these owners had accepted the offers of the Government but there were about fifteen who were not satisfied. These latter, including Mrs. Drew, met at the home of Mrs. Murray, another claimant, in June or July 1957. In direct examination Mrs. Drew was asked: "Was there anyone there on that occasion representing the Government ?", to which the reply was: "Yes. We had called in John Pallett as our Member of Parliament". At the meeting at Mrs. Murray's home Mr. Pallett proposed a plan which Mrs. Drew describes as follows: "It was that they get an independent evaluator, one that was approved by the Department of Transport and by George Hees, but that we were not told who it was, and we signed an agreement ". (Mr. Hees was Minister of Transport). It is unnecessary to detail all the evidence, oral or written, as to what occurred between Mr. Pallett and Mr. Hees. It is contended that the Minister authorized Mr. Pallett to secure the

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services of a valuator and that the Minister and Mr. Pallett agreed that the amounts fixed by that person would be accepted by the several owners and by the Government. Reliance was placed upon a document dated October 1957 signed by Mrs. Drew and her husband, but that document is not an agreement, it is merely an offer, and, even if it were more, it does not purport to bind the Crown to pay whatever amounts the valuator should name. After a review of all the evidence and a consideration of the argument advanced by Mr. Brewin I find that there never was any such agreement. Certainly it was not accepted in writing and the record shows that it was not agreed to by the Minister. Even if the President had put the dismissal of the claim, so far as the question of fact is concerned, solely on the ground of onus, I find that the evidence goes much beyond that and that there was no such agreement as claimed.

The only other question raised on behalf of the appellant in connection with the petition of right is that in any event the Minister held out Mr. Pallett as an agent, i.e., that Mr. Pallett was clothed with ostensible authority by the Minister to enter into an agreement on behalf of the Crown and that the respondent is bound by an agreement which, it was argued, was made by Mr. Pallett. I agree with the last sentence in the second quotation from the reasons of the President that the evidence fails to show any such holding out. Some of the evidence is referred to by the President, but having considered all of it in the light of Mr. Brewin's submissions I have come to the conclusion that Mr. Pallett had no such ostensible authority. This conclusion renders it unnecessary to consider the various legal points raised by counsel on behalf of the Crown and referred to by the President. The appeal from the judgment as to the petition of right should therefore be dismissed.

In the proceedings commenced by information any objection to the allowance of $11,200 as the value of Mrs. Drew's land expropriated was abandoned and only two points were argued. The first is as to the President's refusal to allow ten per cent for compulsory taking. It is unnecessary to consider all the decisions in this Court and in the Exchequer Court dealing with this problem under the Expropriation

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Act. The allowance was made in Irving Oil Company Ltd. v. The King1. While I was the only one who, with the concurrence of Chief Justice Rinfret, stated that the appellant was entitled to the allowance "under the circumstances of this case", undoubtedly it was the view of the majority, if not all, of the members who took part in the judgment that there were special considerations. That is borne out by the fact that Rand J., who had been a Member of the Court in the Irving Oil case, said in Diggon-Hibben Limited v. The King2, with the concurrence of Taschereau J., at p. 713:

In the case of Irving Oil Company v. The King it was held that while an allowance of 10 per cent for compulsory taking is not a matter of right, in circumstances presenting difficulty or uncertainty in appraising values, such as were found there, the practice of making that allowance applied. Similar circumstances are present here; in fact in the general character of the two situations there is no difference whatever. For that reason, I think the allowance should be made.

While at p. 719 of the Diggon-Hibben case Estey J. who had also been a Member of the Court in the Irving Oil case, referred to "the long established practice in the Courts", he had already remarked at p. 717: "The decision in Irving Oil Company Ltd. v. The King determines the issues in this case" and later, at p. 720, after referring to three decisions, he stated: "There are cases where, having regard to the circumstances, no allowance should be made, but, with great respect, the circumstances in this case do not distinguish it from these cases in which an amount for compulsory taking was allowed". In The King v. Lavoie, unreported , but referred to in the reasons for judgment of the President in the present case, Taschereau J. delivering the unanimous judgment of the Court said that the allowance should not be made in all cases but only where it is difficult because of uncertainty in fixing the amount of the compensation pensation,—referring to the Irving Oil and Diggon-Hibben cases.

It was not laid down in the Lavoie decision or in any other decision of this Court that mere difficulty in arriving at the value to the owner of the property expropriated, because of difference of opinion among the experts, would be sufficient to grant the ten per cent. The fact that the

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witnesses for the Crown and the witnesses for the owner differ as to the value is not a valid reason. In my view it is now settled that the ordinary rule is that the allowance is not to be made and that in order to justify it there must be special circumstances. Undoubtedly the facts in one case will differ from those in another but it is impossible to lay down the rule in any more express terms. Here there are no special circumstances.

The only remaining question to be dealt with is that of interest. It has been noted that Mrs. Drew has been allowed interest on the difference between the value of her land fixed by the President, $11,200 and the sum of $10,080 paid on account, from the date she gave up possession. It is argued that Mrs. Drew should be granted interest on the difference between the value of her land over and above its value as a farm even while she was in possession. There is no basis for any such claim. In examination-in-chief Mrs. Drew was asked the following questions and made the replies indicated:

Q. I was going to ask you about the improvements on the rest of the property. For what purpose did you use the balance of the property? A. We had about an acre of raspberry canes and an asparagus patch, and we grew our own vegetables. There was about an acre of lawn, flower beds and shrubbery.

Q. Did you do most of that work yourself, or get anyone else to do that for you—you and your husband? A. We did it ourselves. We did hire a farmer to work the garden land.

Reliance was placed upon the decision of the Court of Appeal for Ontario in Re The Queen & Little3. In that case in proceedings under The Public Works Act, R.S.O. 1950, c. 30, the Ontario Municipal Board had allowed interest at the rate of five per cent on the difference between the sum fixed by it as the total value and the value of the land as farm lands. Apparently there was no cross-appeal by the respondent before the Court of Appeal on that issue, but in any event, in the present case Mrs. Drew was using the property in the usual manner and there is no reason why she should be entitled, as put in the appellant's factum, to interest "on the difference between the value of the land as farm land and its total value, including development value,

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from the date of expropriation". In coming to his conclusion as to the value as of the date of expropriation the President fixed what he deemed was a proper amount and no objection is now taken to it. The appeal in the proceedings commenced by information should be dismissed.

In the result, therefore, both appeals should be dismissed with costs, but counsel fees as of one appeal only should be allowed.

Locke J.:—I agree with the reasons of the Chief Justice in these appeals, other than in respect of the claim for an allowance for compulsory taking.

I have had the advantage of reading the judgment proposed to be given by my brother Judson and, subject to the following comments, I agree with what is said by him regarding claims of this nature.

The cases of Irving Oil Co. v. The King4, Diggon-Hibben Ltd. v. The King5, and The King v. Lavoie, decided on December 19, 1950, in this Court and unreported, require, in my opinion, some more extended consideration than has been given to them in previous cases.

As the statement by Rand J. in the Diggon-Hibben case, that in circumstances presenting difficulty or uncertainty in appraising values the practice of making the allowance applies, was said by that learned judge to have been decided in the Irving Oil case, I will first consider that decision.

The judgment at the trial in the Exchequer Court before O'Connor J. is reported in [1945] Ex. CR. 228. The property expropriated by the Crown was a lot in the City of St. John, N.B., .for which the owner had paid $3,000 and upon which it had erected a building used as a service station at a cost of $3,947.58. Evidence was given that the replacement cost, less depreciation of the building, would be about $5,000 and that the cost of moving the equipment elsewhere would be $120, that it would depreciate in value by reason of the move to the extent of $300 and the cost of reinstalling the equipment elsewhere was estimated at $313. No evidence was given as to the fair market value of the property. The owner alleged that, because of the existing oil regulations, it could not get a permit to erect a new

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Station elsewhere and claimed as part of its loss its estimated profits for a period of five years. O'Connor J. disallowed the claim for loss of profit and found that the owner was entitled to compensation in the sum of $6,000. No mention is made in the reasons delivered of any claim for compulsory taking and none was allowed.

The appeal to this Court was heard by Rinfret C.J. and Kerwin, Hudson, Rand and Estey JJ. The judgment of the Chief Justice and of Kerwin J. was delivered by the latter. He considered that the amount allowed at the trial should be increased to $8,697.88, this amount including a sum of $701.33 for compulsory taking. The amount awarded also included an amount for loss of profit. The amount upon which the ten per cent was computed would appear to have been the estimate of the value of the land and its improvements, and not upon the amount allowed in respect of loss of profit or moving the equipment.

Hudson J., in dealing with this aspect of the matter, said (p. 558):

I am not satisfied that a thorough examination of circumstances might not reduce this sum substantially but, on such evidence as there is, it would appear to be sufficient to provide a return which would justify a valuation of somewhat over $8,000, if there be included therewith the miscellaneous items such as costs of moving equipment, etc., and special allowance for compulsory taking included by the trial judge in his computation.

Rand J. agreed with the amount of the award, as shown at p. 564 of the report. In giving the details of the award, he included an item of $701.33 for forcible taking and did not refer otherwise to the matter. This was in addition to an amount of $500 which he considered should be allowed as "Damages through disturbance of business, etc."

Estey J., who agreed in the amount of the award, said that there should be an allowance for compulsory taking, without more, and agreed with the computation of the items of the judgment given in the judgment of Kerwin J.

As the above figures indicate, the property expropriated was of a comparatively small value and, unless it can be said that the question as to whether the amount allowed by Rand J. for the disturbance of the business should have been allowed as a loss of profit presented any difficulty, there was nothing in the case to distinguish it from countless other expropriations of small business properties which

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had been considered by the courts of this country during the previous seventy-five years. As pointed out, nothing was said by any of the members of the Court to the effect that the ten per cent was allowed for compulsory taking, due to "difficulty or uncertainty in appraising values", or that there were any special circumstances justifying the allowance.

In the Diggon-Hibben case, judgments were written by Rand J. with whom Taschereau J. agreed, by Estey J. and by myself, the Chief Justice agreeing with my reasons. The statement quoted from the judgment of Rand J. was not the judgment of the Court since Estey J., while agreeing that there should be a sum of $10,000 allowed for compulsory taking, did so for different reasons. The Chief Justice and I were of the opinion that, as the reasons for judgment of the President showed that he had made what we considered a full allowance for the value to the owner of the lands and premises taken and a sum of $20,000 to cover the losses attendant on the removal of the old established business operated by the owner in Victoria to other premises in that city—which losses would necessarily result from the temporary dislocation of the business—the award compensated the owner to the full extent to which it was entitled and that, accordingly, no addition to that amount could be justified.

In my opinion, it is not clear whether the judgments delivered by the majority of the Court proceeded on the basis that the allowance made for the property and for what may be described as the dislocation of the business were insufficient or whether, contrary to the view of the minority of the Court, it was considered that the percentage might be allowed in addition to the full value to which the owner was entitled. If it were the latter, the result is inconsistent with the unanimous judgment subsequently delivered in Woods Manufacturing Co. Ltd. v. The King6. It may be pointed out further that the right of owners of property to compensation from the Crown for properties taken for its use is purely statutory and that there is nothing either in the Expropriation Act of Canada,

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the Railway Act or any of the other statutes which authorize the expropriation of property which have been considered in this Court, which permit the award of compensation in excess of the value of the property to the owner, as that expression is interpreted in the Woods Manufacturing case at p. 508.

In Lavoie's case, the property expropriated by the Crown was situate within the limits of the City of Jonquiere in Quebec. The property in question had not theretofore been used other than for purposes of agriculture but the owner assigned a high value to it as building property and had planned to dispose of it as such and the learned trial judge had valued it on this basis. There was no claim that there was any loss by reason of the dislocation of any business being carried on upon the property, such as occurred in the Irving Oil and Diggon-Hibben cases. The Crown appealed from the award and the owner cross-appealed claiming an additional ten per cent. The reasons for judgment delivered in this Court disallowed the cross-appeal, saying:

Ce montant additionnel de 10 p. cent n'est pas accordé dans tous les cas d'expropriation, et ce n'est que dans les causes où il est difficile par suite de certaines incertitudes dans l'appréciation du montant de la compensation, qu'il y a lieu de l'ajouter à l'indemnité.

citing as authority Irving Oil Co. v. The King and Diggon-Hibben Ltd. v. The King. This, with great respect, appears to me to have been error since in neither of the cases referred to had this Court declared the law in these terms. I am further of the opinion that in the circumstances, in the absence of any claim for disturbance or loss through the dislocation of a business or any other activity of the owner, there could have been no basis for such a claim. I wish to add that the passage from this judgment did not purport to declare any new principle, simply referring to decisions which, it was taken, had declared the law in the terms referred to.

I have considered with care all of the reported cases in the Exchequer Court and in this Court in which the question of an allowance for compulsory taking has been considered and I am unable to discover in any of them any support for the proposition that such an allowance is made in circumstances presenting difficulty or uncertainty in appraising values. An examination of the authorities and

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the early works on compensation in England following the passing of the Lands Clauses Consolidation Act of 1845 does not make clear either the reason for the making of such an allowance or the value upon which the percentage is reckoned. I have searched and have been unable to find any cases prior to 1845 where any such allowance was made.

In the 2nd edition of Cripps on Compensation published in 1884 it is said at p. 98 that it was customary to add ten per cent to the value of lands taken under compulsory powers, but what value is not stated. In Lloyd on Compensation , 1895, p. 70, dealing with the practice under the Lands Clauses Consolidation Act and others of a like nature, the author says that when a leasehold is expropriated, ten per cent for compulsory sale is usually added to the total sum at which the value of the lease is assessed, and the ten per cent was considered sufficient compensation for compulsory sale, in addition to the assessed value of house property. In Browne and Allan on Compensation, 1903, p. 97, it is said that a percentage is regularly

added to the market price and this is usually right for the sum to be ascertained is not the market price but the value of the land to the owner.

In Dodge v. The King7, Idington J. at p. 156 said that there might be added to the market price a percentage to cover contingencies of many kinds.

In more recent years the practice where the allowance is made appears to have been to compute it on the value of the property to the owner, excluding therefrom any allowance made for disturbance, moving costs or loss of profits or business.

The principle applicable in determining compensation, stated in the Woods Manufacturing case, was not new. Thirty-four years earlier it had been stated in similar terms by Duff J. (as he then was) in Lake Erie and Northern Ry. Co. v. Brantford Golf and Country Club8. An element very often of great importance to be considered in determining what a prudent man would pay for the property rather than to be ejected from it is the expense and inconvenience of moving elsewhere, the loss of benefits enjoyed by the owner due to the location of the property taken and, where

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a business is carried on which the owner proposes to continue elsewhere, the loss due to the dislocation of the business , the loss of profit in the interval before it can be established elsewhere, moving costs and other unavoidable expenses. The allowance made in respect of the dislocation of any business carried on and the loss of profit in the interval before it can be established elsewhere is, of necessity, in the nature of unliquidated damages and, except in very rare circumstances, cannot be determined with complete accuracy.

In my opinion, and despite the expression of opinions to the contrary by individual judges in some of the decided cases, I think the reason for the allowance of a percentage of the value of the land as part of the compensation was to provide for damage and expense of this nature.

There was nothing of this nature to consider in Lavoie's case. Since such an allowance cannot be determined with complete accuracy, I think that, while the method is perhaps not the most desirable way of determining the damages , it is permissible to estimate them as some percentage of the value of the property to the owner, other than that part of it to be attributed to such loss or damage. It was in this manner that the allowance was computed in Diggon-Hibben Ltd. v. The King, Frei v. The Queen9, and in Gage-town Lumber Co. Ltd. v. The Queen10.

The property expropriated is 4.36 acres in extent upon which there had been built in the year 1948 by the appellant and her husband a one-storey frame house containing five rooms. The expropriation was in the year 1954 but the appellant did not give up possession until December 1, 1958, without payment of any rent in the interval. At that time it was necessary for the appellant to move elsewhere, which, no doubt, necessitated expenditures for moving and establishing a home elsewhere.

In my opinion, in estimating the value of the property to the appellant this should properly be taken into consideration and, upon the record, it appears to me that this was done. Various attempts were made on behalf of the Crown to arrive at an amicable settlement of the appellant's claim and, as pointed out by the learned President,

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the offer of $10,350 made on September 30, 1955, included an amount for forcible taking. This appears to have approximated. $900. There is nothing in the evidence to suggest that the expenses incidental to moving elsewhere would aggregate any such amount. As the reasons at the trial indicate, the learned President was of the opinion that $10,000 was the full value of the property to the appellant but that, as an offer of $11,200 had been made and had not been withdrawn, the award was in this amount. In these circumstances, there is no ground for any further claim for the forcible dispossession.

I would dismiss both of these appeals with costs but counsel fees as of one appeal only should, in my opinion, be allowed.

The judgment of Cartwright, Fauteux, Abbott, Martland, Judson and Ritchie JJ. was delivered by

Judson J.:—I agree with the reasons of the Chief Justice in these appeals except that I would reject the claim for the allowance of 10 per cent for compulsory taking on different grounds.

There appears to be little doubt that Diggon-Hibben Ltd. v. R.11, has been regarded as introducing a new principle as a basis for the award of 10 per cent for compulsory taking—"circumstances presenting difficulty or uncertainty in appraising values". This is far removed from the principle of the judgment of Fitzpatrick C.J. in R. v. Hunting12, where it was said that it had "become so thoroughly established a rule from the innumerable cases both here and in England in which it has been awarded almost as a matter of course that I certainly should not be prepared to countenance its being questioned in any ordinary case". I will postpone examination of the cases to test whether the award ever was a matter of course in the Canadian courts and proceed immediately to an examination of the cases subsequent to Diggon-Hibben to see what has been the effect of the application of a rule based on difficulty or uncertainty in appraising values.

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Almost immediately in R. v. Lavoie, December 18, 1950 (unreported), the uncertainty rule was restated in slightly different language but the allowance was refused. Since then in all cases in the Supreme Court of Canada the 10 per cent has been allowed with little or no discussion.

In Ontario in thirteen reported cases since 1951 the award has been made in every case(a) except two(b). In Quebec in all of the cases reported in the Court of Appeal since 1948 the allowance has been made in every case except in Belle-rose v. Talbot13. In three recent Nova Scotia decisions(c) the allowance has been made at 5 per cent. The Manitoba Court of Appeal in its most recent decision has made the allowance(d).

With respect, there appears to be reason to question whether a rule based upon difficulty or uncertainty in valuation is working satisfactorily when it is found that the award is made in nearly every case. This may mean that, notwithstanding the form in which the rule is stated, what is really happening is that the old matter of course rule is being applied. Difficulty and uncertainty can be found in almost every assessment of damages no matter what the cause of action may be. But this affords no logical basis for the addition of 10 per cent, when the tribunal of fact, whether judge, jury or arbitrator, has given full consideration to a claim and made every allowance for the constituent elements that enter into the assessment. The course taken by the decisions may also indicate that the rule is being used as a formula to review an award on a question of quantum.

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There is also reason to question whether the rule of difficulty or uncertainty followed as a consequence from the decision in Irving Oil Co. v. The King14, and also whether it was even the majority opinion in Diggon-Hibben. Locke J. with Rinfret C.J. concurring said that the 10 per cent, could only be justified as part of the valuation. I take this to mean that it was not to be given as a bonus after value to the owner had been assessed and loss caused by disturbance taken into account. Estey J., while he did say the allowance for compulsory taking was founded on long established practice, also said that it was "a factor in the compensation separate and apart from what would be included as disturbance allowance". Long established practice, whether or not it existed in fact, seems to be a reference to the rule enunciated by Fitzpatrick C.J. in Hunting but in the second part of the statement it is difficult to understand the emphasis on the 10 per cent allowance being part of the compensation when at the same time it is distinguished from a disturbance allowance.

I now return to the statement of Fitzpatrick C.J. that the award had become a matter of course both here and in England. The practice in England came into being as a result of judicial decision subsequent to the enactment of the Lands Clauses Consolidation Act, 1845, although there was nothing in the legislation which authorized the allowance. When the case of Hunting was decided in 1916, the practice had only three years to go in England for it was abolished in 1919. The position is stated briefly in 10 Halsbury, 3rd ed., p. 95, in these words:

It became customary under the Lands Clauses Acts to add to the value of the land a further ten per cent as compensation for the taking being compulsory. There has never been express statutory authority for this addition, but statutory recognition of the existence of the custom was given by its prohibition in cases to which the Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c. 57), applied. With the subsequent extension of the application of that Act the custom can rarely apply.

The question is whether any such practice ever grew up in this country to justify a statement that the allowance was a matter of course based upon long established practice. The matter was never considered in this Court until the year 1906. In the Queen v. Paradis15, which restored the

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award of the official arbitrators after it had been increased in the Exchequer Court16, there is no mention in either Court of the supposed practice notwithstanding a thorough review in the Exchequer Court of the cases up to 1887. The first mention of the subject in this Court is in Dodge v. R.17, where it was said by Idington J. very briefly "there may be added as usually is added a percentage to cover contingencies of many kinds".

The next case is R. v. Hunting18, where Fitzpatrick C.J. said that the 10 per cent, had become an established rule not to be questioned in ordinary cases. Idington J. said that the 10 per cent, should be added to the market value. He stated that there was no rule of law rendering it an invariable consequence of compulsory taking but that in the majority of cases it was no more than justice demanded. Duff J. gave no reasons for dismissing the appeal. Anglin J. stated that the 10 per cent allowance was "independent of and additional to any sum in excess of market value to which the owner may be entitled because of special adaptability of the expropriated premises to his purpose". This appears to be equivalent to saying that value to the owner is first ascertained and then 10 per cent, is added to that. Brodeur J. would have disallowed the 10 per cent, because the evidence disclosed no evidence to justify its allowance. He adopted the opinion expressed in Cripps on Compensation that it was given to cover various incidental costs and charges and that it was only justifiable as part of the valuation and not as an addition thereto. There is real conflict of opinion here on the principle of the 10 per cent, and I doubt whether any common ratio decidendi can be extracted from the conflict.

In Rex v. Hearn19, Idington and Anglin JJ. both approved an allowance of 10 per cent. for compulsory taking.

In Rex v. Larivée20, the 10 per cent, allowance made by the arbitrator was disallowed in this Court on the ground that the award was ample and that the 10 per cent, was not to be allowed as of right in all circumstances.

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In St. Michael's College v. City of Toronto21, fair compensation to the college was discussed in terms which indicate that the judgment clearly had in mind value to the owner of the lands taken and diminution in value of the property retained by reason of the severance. There was no mention of any 10 per cent, allowance in the unanimous judgment of the Court. Similarly, in Canadian Provincial Power Co. Ltd. v. Nova Scotia Power Commission22, where the Court clearly had in mind the principle stated in the Pastoral Finance23 case, there was no mention of any such allowance.

It is apparent that prior to Hunting there had been little consideration of this matter in this Court and that in Hunting itself the principles enunciated in the various judgments are shadowy in outline and difficult to reconcile one with another. Hearn and Larivée add nothing to the discussion to be found in Hunting. It does, however, seem significant that in the two cases where the Court clearly had in mind the concept of value to the owner—the St. Michael's College case and the Provincial Power case— there was no mention of the 10 per cent, and I cannot think that this was an oversight. It is therefore possible to find within the last fifty years that there have been at least three principles followed from time to time in this Court, first, an allowance as a matter of course, second, no allowance where value to the owner has been ascertained and, third, an allowance in special circumstances. It cannot be said that these principles have been satisfactory from the standpoint of logic, definition or application and in my opinion the door is wide open for a reconsideration of the whole problem, particularly when what was obviously the foundation of the rule—and a very insecure one—disappeared in the country of its origin over forty years ago.

The allowance of 10 per cent, has not escaped criticism. In Re Watson and City of Toronto24, Meredith C.J.C.P. said :

In regard to the adding of any arbitrary amount to any sum fixed by the arbitrator, it is impossible for me to think that any Judge has expressed the opinion that, after full compensation has been allowed, anything in the

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nature of a bonus addition is to be made to the sum of the full compensation When power to take lands is given, it is usual for some one to contend and urge that something more than full compensation should be paid to the land-owner, whether 10, 20, 30, 40, or 50 per cent. : but invariably the Legislature has refused to sanction any such addition or to allow to the land-owner anything but compensation: therefore for the Courts to do so would be legislation, not adjudication, and legislation of a most flagrant character. Even if it could be that any Court should so decree, I cannot see how any juror-arbitrator, having regard for his oath of office, could give effect to it, could do otherwise than obey the statute, and let the Court take the responsibility of giving the bonus addition.

In the case upon this point to which the Chief Justice has directed our attention, I find nothing to warrant a contention that anything more than compensation should be awarded. In that case the arbitrator had added 10 per cent, to a sum estimated by him, not, as I understand it, as a bonus, but as part of the compensation, and a part not included in the estimated sum; that is to say, that, having taken into account certain more easily calculated amounts of compensation, for other things not easily calculated and not included in the calculated amount, 10 per cent, was added as a reasonable valuation of these things. In principle that is not wrong: whether right or wrong in that particular case as a matter of fact is unimportant in this case, for in that respect that case has no authoritative effect upon any other.

In this case full compensation has been awarded by the arbitrator; and so there could be no justification for adding a farthing to the amount awarded, unless taken off first for the pleasure of adding it again.

This is the forerunner of a more sustained criticism in the Exchequer Court. The judgment in The Queen v. The Sisters of Charity of Providence25, contains a complete historical and critical survey of the application of the supposed rule of the allowance for compulsory taking both in England and Canada and I am content to adopt this survey as part of my reasons along with the criticism that there is no statutory basis for the allowance and no rule of law requiring it. With the restatement of the value to the owner rule in Woods Manufacturing Co. Ltd. v. The King26, it seems to me that the anomalies have become more strongly emphasized. The rule is that

…the owner at the moment of expropriation is to be deemed as without title, but all else remaining the same, and the question is what would he, as a prudent man, at that moment, pay for the property rather than be ejected from it.

In fixing the amount of an award there are often factors, other than the market value of the property expropriated, which must be taken into account but which are not easily

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calculated. In such cases the tribunal of fact may decide that compensation for such factors can best be appraised in the form of a percentage of the market value. This is but a part of the process of determining value to the owner. Once that value has been assessed in accordance with the rule in the Woods case it represents full compensation and the owner is not entitled to an additional amount for compulsory taking.

Appeals dismissed with costs.

Solicitors for the appellant: Cameron, Weldon, Brewin, McCallum & Shells, Toronto.

Solicitor for the respondent: W. R. Jackett, Deputy Attorney General of Canada, Ottawa.