Planting is around the corner

Planting is around the corner

Tuesday, May 19, 2015

Sask Court rules that no compensation payable on expropriation of road

A Saskatchewan municipality passed a by-law to expropriate a roughly 2-acre road parcel from a quarter section of privately-owned land.  The affected landowners applied unsuccessfully to the Court  of Queen's Bench to quash the by-law, following which the issue of compensation for the expropriation was set to be determined.  In a decision released last October, the Court ruled that, in the circumstances of this particular case, no compensation was payable for the taking.

The road had actually been constructed by the municipality in 1980 to provide access to nearby lands. The 2-acre roadway cut across an 8-acre triangular piece of the quarter section, which was cut off from the remainder of the lands by a railway line.  The landowners (and/or their predecessors-in-title) had acquiesced in the construction and continuing use of the road.  The municipality had continued to maintain the road since its construction.

In 2004, the landowners applied to subdivide the quarter section to turn the 8 acre parcel into a one-lot subdivision.  This prompted the municipality to raise a concern about the maintenance of the road access across the property.  Eventually, the one-lot subdivision proposal turned into a two-lot proposal.  Between 2004 and 2011, the municipality and the landowners attempted to negotiate a resolution.  The municipality offered to purchase the 2-acre parcel in December, 2010, but no agreement was reached.  In March, 2011, the municipality passed its expropriation by-law.

In determining compensation, the Court of Queen's Bench found that the highest and best use of the land being taken was not a two-lot subdivision as proposed by the landowners.  The Court found that a two-lot subdivision was not a "reasonably probable use of the eight acre parcel" and that "there was no reasonable expectation that such a subdivision would occur."  For one thing, the road access issue was holding up any approval of a two-lot subdivision.  There was also evidence that the subdivision would not meet setback requirements.

The Court then looked at the effect of the taking on the eight-acre parcel as a whole: "what, then, should the applicants be paid, taking account of the value of the road parcel? Based on the before and after method, the applicants should receive the difference between the value of the eight acre parcel that they owned prior to the expropriation, and the value of the approximately six acre site that they will have after the expropriation. That calculation accounts for the value of the road parcel, the damage to the remaining six acre parcel, and any increased value to the remaining land arising from the work to be done - that is, the maintenance of a public road - on the road parcel. "

On the basis that the highest and best use of the land affected was as an eight-acre one-lot subdivision, the Court concluded that no compensation was payable: "Given that the transfer of the road parcel without compensation was an unavoidable cost of a single lot subdivision, the value of the eight acre parcel for a single lot subdivision was the same before and after the expropriation of the road parcel. The applicants accordingly suffered no loss as a result of the expropriation. Indeed, and as noted by counsel for the respondent, the expropriation of the road parcel puts the applicants one step closer to having the legal access that is a requirement for any subdivision. As such, it is a special benefit to the applicants."

The Court would have reached the same conclusion had the highest and best use of the land been agricultural: "no compensation is payable - even if the highest and best use of the eight acre parcel was the existing agricultural use. The road parcel is already used for the road, and is not available for agricultural use. As such, loss of title to the road parcel would not affect the value of the quarter section for agricultural purposes. "

Read the decision at: Colhoun v Rural Municipality of Lumsden No. 189.

Friday, May 8, 2015

NS Court of Appeal overturns profit à prendre (right to take hay) decision

Back in February, 2014, the Nova Scotia Supreme Court upheld a neighbour's right to take hay or other crops off a portion of a 2.7 acre property that had been severed from the neighbour's farm in 1960 (see my post on that decision here).  The case has gone to the Court of Appeal and the lower court's decision has been overturned.

The Court of Appeal introduced the case as follows:

Rarely does a claim of the property right known as profits à prendre, which has existed since ancient times, come before the courts.  It arises here because a landowner conveyed part of his property subject to a reservation of a right in favour of himself, his heirs and assigns to enter on that property to remove hay.  Throughout the next fifty years, the landowner, his successors in title and their assigns continuously exercised that right, entered the conveyed lot and cut hay.
The current owners of that lot defended an application seeking to confirm the right to cut hay on their property.  They argued that the reservation was void or voidable.  In her decision dated January 29, 2014, Justice Margaret J. Stewart granted an order for a declaration in the nature of a profit à prendre (2014 NSSC 36 (CanLII)).  This is an appeal from her order which issued June 11, 2014.
After reviewing in detail the law relating to profits à prendre, the Court of Appeal concluded that the original grant of a right to take hay was a "profit in gross", which is a "right without limit and separate from any land owned by the profit holder".  Therefore, it was not necessary that the right to take hay benefit the neighbouring property specifically - it just had to benefit the original grantor and his successors.  

However, as noted the Court, that finding (which was not made by the lower court judge) was not of assistance to the neighbour: "Since a profit is an interest in land, to be valid in law it must be conveyed by deed to satisfy the Statute of Frauds.  But none of the 1972 and 1998 deeds in the chain of title of the C lands from GC to the respondent conveyed the right to enter upon and remove hay from the D lot.  The 1998 deed merely excluded that lot from the description of the C lands."  In other words, there was nothing in the chain of title to link the original profit à prendre to the current owner of the neighbouring land.

It was also possible for the right to take hay to continue to exist as a part of the estate of the original landowner.  However, there was no evidence of any disposition or transfer of the profit à prendre (an asset of sorts) by will or otherwise from the original grantor, GC, to the neighbour.  The neighbour's claim failed.

Read the decision at: Snyder v. Chisholm.

Tuesday, May 5, 2015

REMINDER: CAFA - Current & Connected Conference - June 4, 2015 - Woodstock, ON

The Canadian Association of Farm Advisors will be holding its annual Current & Connected Conference at the Quality Inn in Woodstock, ON on June 4, 2015.  Featured speakers include:

Brent Van Parys & Hali VanVliet, BDO SuccessCare Program:  Building & Transitioning Three types of Capital

Karl Volkmar, Southern Crop Protection and Food Research:  The Direction of Federal Research in the Science and Technology Branch

John Mill, Succession Tax Council:  Capital Gains Deductions and Rollovers for Farmers

Gary VanBolderen, Dutch Builders, VP Council of Ontario Construction & Chair, Canadian Farm Builders

Naomi Loewith, Lenczner Slaght:  Strategic Advice for Avoiding & Managing Legal Disputes

Click here for the agenda

Click here to register

Ontario Energy Board says landowners should have right to decide on removal of abandoned pipelines

In its decision last week approving (with conditions) Union Gas' Hamilton to Milton NPS 48 pipeline project, the Ontario Energy Board ("OEB") filled a number of gaping holes in Ontario's pipeline abandonment regime.  As noted by the Gas Pipeline Landowners of Ontario ("GAPLO") in its submissions to the OEB, Ontario has virtually no rules or regulations to deal with the abandonment of provincially-regulated pipelines.  Decisions about how a pipeline will be abandoned (mainly, whether it will be removed from the ground or abandoned in place) are left to the pipeline company, with no public approval process or public hearing process in place.

GAPLO requested that the OEB require Union Gas to offer affected landowners a form of easement agreement that includes a landowner option for removal of the pipeline upon abandonment.  As part of its project approval function under the Ontario Energy Board Act, the OEB must approve the form of easement agreement to be offered by a company to affected landowners.  In its recent decision, the OEB accepted GAPLO's position and ordered Union to offer an easement agreement that includes the landowner option for pipeline removal on abandonment.

The following are excerpts from the OEB's reasons related to this issue:

The overriding consideration for the OEB is the control the landowner should have with
respect to how the land is to be treated upon pipeline abandonment. The OEB heard
evidence from Union that leaving an abandoned pipeline in place would be less
disruptive to the land than removing it. The OEB also heard evidence from GAPLO that
this might be true over the short term, but that over the longer term impacts such as
subsidence could be more disruptive if the pipeline were not removed. GAPLO
witnesses testified that for agricultural land the condition of the land is fundamental.
Their testimony indicated that this is not just a question of a farmer’s passion for the
land; it is that the condition of the land is fundamental to the farmer’s livelihood.

The OEB finds that the landowner should have the right to decide whether an
abandoned pipeline should be physically removed from the ground or dealt with through
whatever other means of abandonment may be proposed by Union. Once construction of a pipeline on a piece of property is approved, the landowner is giving up certain rights to Union, as a distribution utility, in the public interest. However, should that pipeline no longer be needed, the landowner should be able to make the fundamental decision about how the land is to be restored.

This is not a debate about deciding in advance what should be done with a pipeline that
is abandoned at a point potentially decades from now. The issue is who should make
the decision at that time. [emphasis added]

Read the full decision at: Union Gas Dawn to Parkway.

Thursday, April 30, 2015

4640 John Deere case goes up to the Court of Appeal

I previously wrote about a small claims case in Saskatchewan where a man had bid $18,000 at auction to purchase a 4640 John Deere (with loader) but had mistakenly been allowed to pay only $1,800.  The cashier had entered the bid amount incorrectly, missing the last zero in the price.  The purchaser refused to pay any additional amount and claimed that $1,800 was the bid amount.  The Court did not allow the purchaser to take advantage of the mistake and ordered payment of the balance of the $18,000 on the basis of unjust enrichment.

Well, the decision was appealed by the purchaser (who referred to the trial as a "mockery of the judicial system) and has made its way up to the Court of Appeal for Saskatchewan.  I invite you to read the Court of Appeal's reasons for dismissing the purchaser's application for leave to appeal (leave to appeal a decision by the Court of Queen's Bench that dismissed an initial appeal), which set out the various interesting grounds of appeal, but here is the conclusion:
[The Purchaser] fails to come to grips with a very simple issue—he was found on the evidence to owe money to pay for farm equipment he purchased at an auction. He had the opportunity at trial to explain why he should not have to pay and passed on the opportunity. His arguments have nothing to do with the fundamental issue, i.e. he did not pay his bid price for equipment because of the mistake of fact and he owes the money. One can only surmise that his actions and his whole argument are simply an attempt to avoid payment.
He has raised no question of law and the appeal has no merit in any event.
The application for leave is dismissed with costs in the usual manner.

Thursday, April 23, 2015

Better Farming: Pipelines present new risks to farmers warns landowners group

Click here to read Better Farming's article on the National Energy Board's Administrative Monetary Penalty system that now applies to pipeline landowners.

Monday, April 13, 2015

NEB introduces Administrative Monetary Penalties to landowners

The National Energy Board ("NEB") has issued a new publication called "Administrative Monetary Penalties: Information for Landowners".  Among the information provided by the NEB is the following:
  • How did Administrative Monetary Penalties ("AMPs") come to be?  They were created in July, 2012 as part of the Government's omnibus budget bill;
  • If an AMP is issued to a landowner, the NEB may post the landowner's name on its website;
  • If an AMP is issued to a landowner by the NEB, the landowner may ask the NEB to review its own decision (but, although it is possible for a landowner to ask the Court for a judicial review of the NEB's decision, there is no appeal available where an AMP has been issued).
Landowners are now at risk of being charged AMPs for violations of the NEB Act, including carrying out certain farming activities without pipeline company approval.  Daily penalties range from $250 to a maximum of $25,000 per violation for individuals.  Daily penalties range from $1000 to a maximum of $100,000 per violation for corporations.

Monday, April 6, 2015

BC Appeal Court overturns decision that awarded farm to former worker

In a post from August, 2013 called "Equity ensures farm goes to intended beneficiary after codicil failed", I wrote about a decision of the British Columbia Supreme Court that granted ownership of a farm to a long-time farm worker on the basis of alleged promises made during the lifetimes of the farm owners.   The farm worker said that the owners, Kim and Dietrich, had assured him that the farm would go to him more or less in recognition of his uncompensated work on the farm.  Although their 1998 mutual wills left the farm to someone else, Kim and Dietrich had prepared handwritten codicils that would have left the farm to the worker.  However, with only one witness, the codicils were invalid.  Dietrich died in 2006.  When Kim died in 2011, the worker sued the estate for an equitable interest in the farm (which had been left to another beneficiary).  The trial judge concluded that the worker had made out his claim based on proprietary estoppel (i.e. you promised me and now you can't say that you didn't) and that equity required that the farm go to him.

This decision has now been overturned on appeal.  While the BC Court of Appeal concluded that the farm worker was assured and genuinely believed he would inherit the farm, the Court also found that his detrimental reliance on the assurance was far less than that assessed by the trial judge.  The award of ownership of the farm was far out of proportion to the detriment the worker actually suffered and, in all the circumstances, would not do justice between the parties (as equity is intended to do).

As the Court stated, "detriment forms the backbone of a claim of proprietary estoppel because it is detriment that gives rise to the unfairness which requires equity to intervene."  Reliance is not always detrimental, and it is necessary for the Court to look "at both the overall benefits gained and losses suffered by the claimant."  The Court in this case found that the worker did not suffer from choosing to work at a small accounting firm close to the farm, one of his alleged grounds of detrimental reliance.

But the Court was not able to say definitively that the worker's uncompensated efforts at the farm hadn't given rise to the need for equitable relief.  Therefore, the Court of Appeal set aside the trial judge's decision and sent the case back to the trial judge to assess claims of unjust enrichment and express or implied trust, as well as the issue of proportionality as it related to the claim of proprietary estoppel.

It should be noted that one of the three appellate justices would have dismissed the appeal, finding that it could not be said that the trial judge had improperly exercised his discretion in awarding the farm to the worker.

Read the decision at: Sabey v. Rommel.