Christie,
A.C.J.T.C.:—These
appeals
were
heard
together
by
agreement.
The
issue
is,
what
was
the
fair
market
value
on
December
31,
1971
(V-Day)
of
a
parcel
of
land
consisting
of
488.33
acres
legally
described
as:
The
South
Half
and
that
portion
of
the
NorthEast
Quarter
of
Section
17
in
Township
12,
Range
5
West
of
the
4th
Meridian
which
lies
to
the
southwest
of
the
Trans-Canada
Highway
and
to
the
West
of
the
Easterly
50
feet
of
the
said
Quarter
Section
and
portions
of
LSD’s
11,
13
and
14
of
the
Northwest
quarter
of
Section
17,
said
Township
and
Range.
In
these
reasons
it
will
be
referred
to
as
the
subject
property.
On
October
25,
1977
the
appellants,
each
of
whom
had
a
25
per
cent
interest
in
the
subject
property,
sold
it
to
Hat
Development
Ltd.
for
$2.6
million
or
$5,324
per
acre.
In
their
returns
of
income
for
1977
the
appellants
asserted
that
the
fair
market
value
as
of
V-Day
was
$2,000
per
acre
and
calculated
the
capital
gain
accordingly.
In
the
notifications
of
confirmation
of
his
reassessments
the
respondent
fixed
the
fair
market
value
at
not
more
than
$293,400
or
$600.82
per
acre.
As
of
V-Day
the
subject
property
was
approximately
one-quarter
of
a
mile
south
of
the
southern
boundary
of
the
City
of
Medicine
Hat.
It
was
designated
for
agricultural
use.
Its
northerly
boundary
line
is
contiguous
to
the
Trans-Canada
Highway
which
at
that
point
runs
in
a
southeasterly
direc-
tion.
At
one
time
it
was
part
of
a
much
larger
tract
of
land
known
as
the
F
&
M
Ranch
owned
by
the
appellants.
They
acquired
it
in
1951.
As
is
usual
in
cases
of
this
kind,
both
parties
tendered
expert
opinion
evidence
regarding
the
market
value
of
the
subject
property
at
the
relevant
date.
Each
relied
on
comparable
sales.
There
is
ample
authority
that
this
is
the
preferred
method
of
ascertaining
market
value
if
there
is
adequate
market
data
available:
see,
for
example,
Cotton
et
al.
v.
The
Queen,
10
L.C.R.
39
per
Mahoney
J.
at
44-5
(F.C.T.D.).
Mr.
Wayne
H.
Kipp
of
Bryce,
Kipp
&
Company
Ltd.,
appraisers
and
real
estate
counsellors,
Calgary,
testified
on
behalf
of
the
appellants.
His
conclusion
is
that
effective
V-Day
the
market
value
of
the
subject
property
was
$880,000
or
$1,802
per
acre.
This
is
said
to
be
based
on
reference
to
five
comparables.
The
first
involved
the
sale
and
purchase
of
a
203.99-acre
parcel
of
land
located
directly
across
the
Trans-Canada
Highway
from
the
subject
property.
In
relation
to
“Date
of
Sale”,
Kipp's
appraisal
report
states:
"Transfer
July
14,
1972
Purchaser
Caveat
March,
1972".
Neither
of
these
notations
fixes
the
precise
date
of
sale.
A
transfer
of
the
title
can
occur
long
after
the
making
of
an
agreement
for
sale.
The
caveat
could
be
dated
March
1972
or
it
could
have
been
filed
in
March
1972.
Presumably
it
pertains
to
an
agreement
for
sale.
The
agreement
would
predate
the
caveat
and,
in
the
ordinary
course,
be
dated
at
a
time
near
or
reasonably
near
the
date
of
the
caveat.
Ninety
per
cent
of
the
southern
boundary
of
this
comparable
borders
on
the
Trans-Canada
Highway.
Dunmore
Road,
another
important
thoroughfare,
runs
in
a
southeasterly
direction
along
about
90
per
cent
of
its
northern
border,
then
turns
south
and
continues
to
a
point
where
it
joins
the
Trans-Canada
Highway.
The
sale
price
was
$407,980
or
$2,000
per
acre.
The
only
adjustment
made
was
a
downward
one
of
$200
per
acre
because
of
the
location
of
the
property
on
the
north
side
of
the
Trans-Canada
Highway.
The
vendors
were
the
appellants
and
the
purchaser
was
Hat
Development
Ltd.,
a
company
controlled
by
Mr.
Thomas
F.
Sunderland,
a
former
banker
who
turned
to
land
development.
He
testified
on
behalf
of
the
appellants
and
said
that
the
agreement
for
sale
was
entered
at
the
end
of
January
or
the
first
week
of
February
1972.
After
having
been
subdivided
and
serviced,
20.80
acres
of
this
parcel
was
sold
for
the
purpose
of
a
shopping
centre
at
$25,000
per
acre
or
in
total
$520,000.
More
about
this
later.
The
second
comparable
consisted
of
the
sale
of
110.93
acres.
The
agreement
for
sale
was
made
on
October
16,
1973
with
effect
June
13,
1973.
In
my
opinion
for
present
purposes
the
key
date
is
October
16,1973
not
June
13,
1973
which
is
the
date
in
the
appraisal
report.
As
of
V-Day
the
northern
and
western
boundaries
bordered
on
the
city
of
Medicine
Hat.
The
southern
boundary
of
this
comparable
is
contiguous
to
comparable
no.
1,
consequently
it
lies
to
the
north
of
that
comparable.
Part
of
its
southwesterly
boundary
is
next
to
the
20.80
acres
sold
for
the
shopping
mall.
It
has
no
frontage
on
the
Trans-Canada
Highway.
Approximately
one-quarter
of
its
northeasterly
boundary
fronts
on
Dunmore
Road.
Again
the
vendors
were
the
appellants
and
the
purchaser
was
Sunderland.
The
sale
price
was
$232,953
or
$2,100
per
acre.
Downward
adjustments
totalling
$372
per
acre
were
made
for
location
and
date
of
sale.
The
third
comparable
is
a
sale
of
37.74
acres.
It
is
contiguous
to
and
immediately
east
of
comparable
no.
1.
Its
southern
boundary
fronts
entirely
on
the
Trans-Canada
Highway.
The
sale
price
was
$150,000
or
$3,974.56
per
acre.
The
purchaser
was
Ross
Creek
Developments
Ltd.,
another
Sunder
land
company.
It
was
subsequently
amalgamated
with
Hat
Development
Ltd.
In
respect
of
“Date
of
Sale”
the
appraisal
report
states:
‘‘Purchasers
Caveat:
January
14,
1974
Transfer:
June
10,
1976”.
Copy
of
the
agreement
for
sale
is
not
in
evidence.
Kipp
made
a
substantial
downward
adjustment
for
time
and
potential
use.
His
adjusted
price
is
$1,763
per
acre.
In
the
course
of
cross-examination
it
was
established
with
the
aid
of
documentary
evidence
that
on
July
13,
1973
the
land
comprising
this
comparable
was
transferred
by
Emil
Janke
to
Bert
and
Kathleen
Mahura,
husband
and
wife,
for
$42,000.
Form
39,
which
is
in
a
schedule
to
the
Land
Titles
Act
of
Alberta,
is
a
prescribed
affidavit
that
is
filed
in
respect
of
absolute
transfers
of
land.
Its
purpose
relates
to
registration
fees
and
payments
into
the
assurance
fund.
The
affiant
is
required
to
state
the
true
consideration
paid
and
his
opinion
of
the
value
of
the
land
at
the
date
the
affidavit
is
sworn.
The
Affidavit
of
Transferee
was
sworn
by
Bert
Mahura
on
July
13,
1973.
It
states
$42,000
to
be
the
true
consideration
and
his
opinion
of
the
value
of
the
land
as
of
this
date.
A
certificate
of
title
dated
August
9,1963
certifying
that
Emil
Janke
is
the
owner
of
this
property
has
endorsed
on
it
a
notice
of
caveat
filed
by
or
on
behalf
of
the
Mahuras.
It
is
dated
February
29,
1972
and
was
filed
on
the
21st
of
March
1972.
A
copy
of
the
caveat
was
not
introduced
in
evidence.
It
would
have
specified
the
estate
or
interest
claimed
by
the
Mahuras.
It
was
likely
the
existence
of
an
agreement
for
sale
which
as
previously
noted
would
in
the
ordinary
course
have
been
dated
near
February
29,
1972.
The
fourth
comparable
related
to
a
sale
of
707
acres
by
Associated
Investors
of
Canada
Ltd.
to
Fed
Rite
Beef
Ltd.
It
is
located
north
of
comparables
1,
2
and
3.
The
straight-line
distance
is
four
miles.
In
relation
to
“Date
of
Sale"
Kipp's
appraisal
report
states:
“All
land
was
transferred
in
December,
1975."
The
total
price
is
$1,513,910
broken
down
in
the
report
as
follows:
178
acres
at
$2,449
per
acre
($435,922);
260
acres
at
$2,000
per
acre
($520,000);
38
acres
at
$2,526
per
acre
($95,988)
and
231
acres
at
$2,000
per
acre
($462,000).
Documents
placed
in
evidence
during
cross-examination
show
that
these
four
parcels
of
land
plus
an
additional
158.67
acres
was
transferred
on
September
11,
1975
from
Associated
Investors
of
Canada
Ltd.
to
Fed
Rite
Beef
Ltd.
for
$180,000.
Copies
of
certificates
of
title
for
these
parcels
of
land
except
the
158.67
acres
were
placed
in
evidence
by
the
respondent.
Each
is
dated
December
31,
1975
and
certifies
Fed
Rite
Beef
Ltd.
to
be
the
owner.
The
Affidavit
of
Transferee
was
sworn
on
December
5,
1975
by
Mr.
Harold
W.
Annett,
President
of
Fed
Rite
Beef
Ltd.
The
figures
in
Kipp's
report
just
cited
are
what
Annett
swore
to
be
his
opinion
of
the
value
on
December
5,
1975
of
the
lands
included
in
comparable
no.
4.
The
only
differences
are
that
Annett's
figures
are
all
rounded,
i.e.
$436,000
for
Kipp's
$435,922
and
$96,000
for
Kipp's
$95,988.
The
figures
$520,000
and
$462,000
are
the
same
in
the
appraisal
report
and
the
affidavit.
Annett's
opinion
of
the
value
of
the
additional
158.67
acres
was
$318,000.
He
also
swore
that
the
true
consideration
for
all
the
property
included
in
comparable
no.
4
and
the
158.67
acres
was
$180,000.
The
evidence
did
not
establish
whether
prior
to
September
11,
1975
Fed
Rite
Beef
Ltd.
had
entered
into
an
agreement
for
sale
with
Associated
Investors
of
Canada
Ltd.
to
purchase
the
land
described
in
comparable
no.
4.
In
the
course
of
cross-examining
Mr.
J.R.
Owsley
of
J.R.
Owsley
Consultants
Ltd.,
Calgary,
who
gave
expert
opinion
evidence
on
behalf
of
the
respondent
regarding
the
market
value
of
the
subject
property
on
V-Day,
counsel
for
the
appellants
placed
in
evidence
documents
that
suggest
that
between
April
14,
1969
and
September
11,1975
Associated
Investors
of
Canada
Ltd.
could
have
entered
into
an
agreement
to
sell
the
land
described
in
this
comparable
to
Fed
Rite
Beef
Ltd.
for
$180,000.
First
is
a
copy
of
a
certificate
of
title
dated
May
31,
1961
certifying
that
S.
&
T.
Ranching
Co.
Ltd.
is
the
owner
of
the
38-acre
parcel
included
in
the
comparable.
There
is
a
notice
thereon
dated
May
31,
1961
of
the
existence
of
a
mortgage
dated
April
17,
1961
in
the
sum
of
$265,000
with
interest
at
six
and
one-half
per
cent
granted
by
S.
&
T.
Ranching
Co.
Ltd.
to
Associated
Investors
of
Canada
Ltd.
Presumably
the
mortgage
related
to
good
deal
more
land
than
the
38
acres.
It
was
said
in
evidence
that
the
mortgage
was
foreclosed.
The
second
is
a
copy
of
a
certificate
of
title
dated
April
14,
1969
certifying
Associated
Investors
of
Canada
Ltd.
to
be
the
owner
of
the
38
acres.
Comparable
no.
5
involved
the
sale
of
162
acres
by
Kenilworth
Farm
Ltd.
to
Harcourt
Development
Corporation
Ltd.
The
sale
price
in
the
appraisal
report
is
$600,000
or
$3,703.70
per
acre.
It
is
located
northwest
of
the
subject
property
and
the
straight-line
distance
between
them
was
estimated
to
be
five
miles.
In
relation
to
“Date
of
Sale”
the
appraisal
report
states:
“Transfer
June
9,
1977;
Purchaser
Caveat
registered
July
30,
1973;
Agreement
for
sale
registered
February
14,
1974”.
Documentary
evidence
introduced
by
counsel
for
the
respondent
established
that
the
transfer
is
dated
March
7,
1977;
July
30,
1973
is
the
date
of
an
option
to
purchase*
and
February
14,
1974
is
the
date
of
the
agreement
for
sale.
Kipp
treated
the
last
mentioned
date
as
the
relevant
one.
A
caveat
in
respect
of
the
agreement
for
sale
is
dated
February
26,
1974
and
was
filed
the
next
day.
The
instrument
of
transfer
shows
on
the
face
of
it
that
the
consideration
for
the
162
acres
was
$140,000.
The
affidavit
sworn
on
June
8,
1977
by
Mr.
William
R.
Blain,
lawyer
of
Calgary
and
agent
of
the
transferee,
states
that
the
true
consideration
was
$140,000.
It
also
states
that,
in
his
opinion,
as
of
that
date
the
land
was
worth
$600,000.
This
is
the
source
of
the
$600,000
figure
in
Kipp’s
appraisal
report.
Reliance
on
comparables
4
and
5
was
abandoned
at
the
hearing.
This
is
understandable.
They
are
worthless
to
the
appellants
as
comparables.
Minimally
they
taint
Kipp’s
competence
as
does
his
comparable
no.
3.
Kipp
regarded
comparable
no.
1
as
“very
important”.
About
90
per
cent
of
its
southern
boundary
fronts
on
the
Trans-Canada
Highway
and,
as
indicated,
approximately
90
per
cent
of
its
northern
boundary
fronts
on
Dunmore
Road
which,
near
the
easterly
end
of
the
comparable,
cuts
south
across
it
and
joins
the
Trans-Canada
Highway.
The
depth
of
this
comparable
is
very
much
less
than
that
of
the
subject
property.
Kipp
emphasized
the
significance
he
attached
to
“highway
commercial”
use
of
land.
He
placed
the
commercial
importance
of
this
use
in
the
Medicine
Hat
area
“very
near
the
top”.
He
ranked
it
after
land
in
the
downtown
area
of
the
city.
While
a
good
deal
of
the
land
referred
to
in
comparable
no.
1
lent
itself
to
commercial
highway
use,
by
Kipp's
estimate
only
40
or
50
acres
or
eight
or
ten
per
cent
of
the
subject
property
had
this
characteristic.
When
Hat
Development
Ltd.
bought
the
land
comprising
this
comparable
it,
through
Sunderland,
had
every
expectation
of
selling
a
portion
of
it
in
a
short
time
at
a
very
large
profit
for
the
purposes
of
the
Southview
Shopping
Mall,
which
it
did.
As
previously
stated
the
selling
price
was
$25,000
per
acre.
Counsel
for
the
respondent
asked
Kipp
that
if
Sunderland
knew
of
the
possibility
of
making
this
sale
would
that,
in
his
opinion,
have
an
effect
on
the
purchase
price
Sunderland
was
willing
to
pay
for
the
larger
parcel.
Kipp
replied:
“Of
course,
yes”,
an
answer
with
which
I
agree.
It
is
Kipp's
evidence
that
as
of
V-Day
the
westerly
and
northerly
boundaries
of
comparable
no.
2
were
adjacent
to
the
City
of
Medicine
Hat.
It
was
purchased
by
Sunderland
and
borders
on
the
land
he
sold
for
the
Southview
Shopping
Mall.
As
of
V-Day
the
potential
of
this
property
for
urban
development
was
far
in
excess
of
the
potential
of
the
subject
property.
Regarding
comparable
no.
3,
Kipp
testified
that
“it
was
essentially
all
highway/commercial
kind
of
land.”
Also
he
knew
of
the
existence
of
the
Janke
to
Bert
and
Kathleen
Mahura
sale,
but
he
chose
to
ignore
it
and
failed
to
give
an
acceptable
explanation
for
doing
so.
Before
being
confronted
with
the
documents
pertaining
to
this
sale
he
conceded
that
a
sale
made
closer
to
1971
than
the
date
of
sale
involved
in
his
comparable
no.
3
would
be
preferable.
A
third
witness
testified
on
behalf
of
the
appellants.
Mr.
Theodore
Felesky,
one
of
the
appellants
and
a
real
estate
agent,
said
that
about
the
time
when
Hat
Development
Ltd.
bought
the
property
referred
to
in
Kipp’s
comparable
no.
1
Sunderland
offered
to
buy
the
subject
property
for
$1
million.
This
is
$2,048
per
acre.
Sunderland
testified
to
the
same
effect.
Nothing
pertaining
to
this
was
reduced
to
writing.
Felesky
also
gave
some
not
very
clear
evidence
of
sales
to
North
Star
Oil,
Imperial
Oil
Ltd.
and
one
or
two
other
purchasers.
This
testimony
was
not
accompanied
by
a
shred
of
documentary
evidence.
I
do
not
find
it
to
be
of
assistance.
Counsel
for
the
appellants
made
no
reference
to
it
in
his
comprehensive
argument.
In
Coates
&
Waqué’s
New
Law
of
Expropriation
this
is
said
at
page
5-34:
It
has
been
held
in
a
number
of
authorities
that
offers
made
in
good
faith,
with
the
intention
and
ability
to
carry
out
the
transaction
if
accepted,
are
admissible
as
independent
evidence
of
value:
e.g.,
Re
Loblaw
Groceterias
Co.
of
Ontario
Ltd.
and
Minister
of
Highways,
[1964]
1
O.R.
271;
42
D.L.R.
(2d)
17;
Myway
Investments
Ltd.
v.
Burlington
(1973),
4
L.C.R.
3;
Frith
v.
Vancouver
(1973),
5
L.C.R.
206
at
211;
Kelner
v.
Toronto
(1974),
6
L.C.R.
200.
The
offer
may,
indeed,
be
accepted
by
the
tribunal
as
very
strong
evidence
of
value.
See
The
King
v.
Rekush,
[1948]
3
D.L.R.
160;
Borchers
v.
The
Queen
(1977),
13
L.C.R.
89
at
94;
Caldwell
v.
M.T.
&
C.
(1981),
23
L.C.R.
286
at
287;
The
King
v.
Macpherson
(1914),
20
D.L.R.
988;
Re
Burkay
Properties
Ltd.
and
Wascana
Centre
Authority
(1973),
4
L.C.R.
59
at
60
(S.C.C.);
Re
R.C.
Episcopal
Corp.
of
London
&
Sandwich,
[1930]
4
D.L.R.
955
(Ont.
C.A.).
On
the
other
hand,
it
must
be
recognized
that
offers
generally
are
not
highly
regarded
as
relevant
evidence,
and
normally
the
tribunal
will
be
inclined
to
reject
evidence
of
offers.
See
Re
Harnack
and
Hanover
(1925),
27
O.W.N.
383.
In
Federal
District
Commission
v.
Leahy,
[1940]
Ex.
C.R.
115,
the
Exchequer
Court
of
Canada
expressed
the
view
that
offers
to
purchase
are
always
open
to
suspicion,
easy
to
fabricate,
generally
unsatisfactory
and
probably
in
most
cases
should
be
rejected
entirely.
Conditional
offers,
particularly
offers
where
the
condition
cannot
be
fulfilled
and
the
offer
becomes
a
nullity
by
virtue
of
a
condition
precedent
not
being
satisfied,
will
be
ignored
by
the
arbitral
tribunal:
see
Carere
v.
Grand
River
Conservation
Authority
(1980),
22
L.C.R.
111
at
116.
Because
of
the
precendential
authority
of
the
Exchequer
Court*
in
relation
to
this
Court
I
will
cite
in
full
the
relevant
passage
from
the
reasons
for
judgment
delivered
by
Maclean,
P.
in
Leahy.
It
is
at
pages
121-2:
In
many
jurisdictions
evidence
of
offers
for
the
purchase
of
lands
is
not
permissible
in
expropriation
proceedings.
They
usually
cast
no
light
upon
the
question
of
value,
and
the
party
making
the
offer
might
be
incapable
of
having
any
knowledge
of
the
value
of
the
land,
for
the
purpose
which
he
or
she
had
in
mind,
or
for
any
other
purpose.
Evidence
of
offers
to
purchase
lands
which
have
been
expropriated
are
always
open
to
suspicion,
easy
of
fabrication
and
generally
unsatisfactory,
and
probably
in
most
cases
should
be
rejected
entirely.
It
has
been
held
in
some
jurisdictions
that
offers
to
purchase
the
lands
in
question,
made
in
good
faith,
within
a
reasonable
time,
and
with
the
intention
and
ability
to
carry
out
the
transaction
if
the
offer
were
accepted,
are
admissible
as
independent
evidence
of
value.
If
a
person
qualified
to
speak
about
land
values,
and
who
has
made
an
offer
to
purchase
the
lands
in
question,
appears
in
court
and
testifies
as
to
his
reasons
for
making
the
offer,
the
grounds
upon
which
he
reached
the
price
offered,
it
probably
would
be
another
thing.
While
offers
to
purchase
real
estate
can
be
accepted
as
evidence
of
market
value,
they
are
to
be
regarded
with
skepticism.
Their
bona
fides
must
be
established
by
cogent
evidence.
Further,
I
think
that
in
order
to
have
any
evidentiary
value
an
offer
when
made
must
have
been
enforceable
against
the
offeror
if
accepted.
The
offer
by
Sunderland
was
not.
It
failed
to
comply
with
section
4
of
the
Statute
of
Frauds**.
Among
other
things
it
provides
that:
“No
action
shall
be
brought
to
charge
any
person
upon
any
contract
or
sale
of
lands
unless
the
agreement
upon
which
such
action
shall
be
brought
or
some
memorandum
or
note
thereof
shall
be
in
writing
and
signed
by
the
party
to
be
charged
therewith
or
some
other
person
thereunto
by
him
lawfully
authorized?"
When
considered
as
a
whole,
Kipp’s
evidence
fails
to
satisfy
me
that
his
opinion
of
the
market
value
of
the
subject
property
as
of
V-Day
is
reliable.
This,
together
with
my
conclusion
that
the
alleged
oral
offer
by
Sunderland
is
without
evidentiary
value,
means
that
the
appellants
have
failed
to
discharge
the
onus
on
them
of
establishing
that
the
respondent
erred
in
reassessing
on
the
basis
that
the
market
value
of
the
subject
property
at
the
relevant
date
was
not
more
than
$600
per
acre.
This
is
sufficient
to
dispose
of
the
appeals
in
favour
of
the
respondent.
Nevertheless
I
wish
to
record
this.
It
is
Owsley's
expert
opinion
that
the
market
value
of
the
subject
property
at
V-Day
was
$340
per
acre.
In
view
of
the
result
already
arrived
at
it
is
unnecessary
to
analyze
his
evidence.
It
persuades
me
that
the
value
of
the
subject
property
at
that
time
was
less
than
$600
per
acre.
The
appeals
are
dismissed.
Appeals
dismissed.
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