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Sunday, August 7, 2011

OMB declines to discount pipeline easement payment from highway expansion expropriation compensation

On April 11, 1996, the Ontario government (the "Respondent") expropriated 8.391 acres (3.396 ha) out of lands owned by the Estate of Alexander Shypka and Julia Shypka (the "Claimants") to be incorporated into the right-of-way for the 407 highway near Milton. The effect of the expropriation was to divide the Claimants’ lands leaving a 23.392 acre (9.473 ha) parcel on the east side of the highway fronting onto the Ninth Line and a 7.532 acre (3.05 ha) landlocked parcel on the west side of the highway, which is also subject to Consumer Gas and Trans Canada Pipeline easements.  Both before and after the partial taking, the land had been used for agricultural purposes.

In its decision on compensation, the Ontario Municipal Board ("OMB") set out the following general principles of compensation:
The Expropriations Act is a remedial statute enacted for the specific purpose of adequately and fully compensating a land owner whose lands are taken to serve the public interest.
To take all or part of a person’s property constitutes a severe loss, and a significant interference with a citizen’s private property rights, and as such, the power of an expropriating authority should be strictly construed in favour of those whose rights have been affected.

The Expropriations Act, being a remedial statute, must be given a broad and liberal interpretation, and should not be interpreted to deprive one of common law rights unless there is a specific provision in the Act stating so.

This is a presumption that whenever land is expropriated, compensation will be paid, and the Expropriations Act should be read in a broad and purposive way.

Section 13 (2) of the Expropriations Act sets out that the compensation payable shall be based upon one or more of the four heads of damages, three of which for this matter are relevant ; the market value of the land (13(2)(a)), damages for disturbance (13(2)(b)), and damages for injurious affection (13(2)(d)).

The first step in any expropriation is to determine the highest and best use of the expropriated property and the second step is to fix the compensation to be awarded to a Claimant based on such use.
The OMB also discussed the relevance of the TransCanada pipeline easement to the compensation. The Claimants and Transcanada Pipeline Limited had entered into an agreement dated May 29, 1998 in which a total of $53,000.00 was paid to them in 1998. The OMB could find no reason why an adjustment should be made to the amount of the compensation it ordered to be paid to reflect this amount. The pipeline in question is located in the westerly landlocked portion of the Claimants’ lands that the Respondent chose not to take in 1996. The amount paid had no reference to a market value calculation being made then. The Claimants reserved their rights to be paid for the value of that pipeline easement before the National Energy Board. The OMB saw no issue that the Claimants have been doubly compensated by the OMB’s award in this matter. There is a right to arbitration in the agreement, should a party to it wish to pursue the matter.

Read the decision at: Shypka v. Ontario.