Alberta Court upholds denial of crop insurance on basis of false or misleading reporting

The Alberta Court of Queen's Bench recently dismissed an application for judicial review of a decision by the appeal committee related to Alberta's crop insurance program.  The regulations that govern crop insurance provide that the decision of the appeal committee is final and binding on the parties; only a challenge to the decision by way of judicial review is possible.

In this case, crop insurance denied claims by a farmer for its 2009 canola crop, its 2009 Canadian Prairie Spring wheat crop and its 2010 Canadian Prairie Spring wheat crop.  Crop insurance declined to pay the benefit to the farmer on the basis that the farmer's post harvest assessments were incomplete and inconsistent with actual crop production.  On the appeal of this denial of coverage, the appeal committee decided that credibility was an issue.  The committee found that where there was a conflict in the evidence between the farmer and the crop insurance witnesses, the evidence of the crop insurance witnesses was to be preferred.  The committee cited examples where the farmer under-reported grain sales or was not forthright about grain sales until confronted with third-party documentation obtained during the crop insurance investigation.  The committee, which consisted of five farmer members, was left with the impression that the farmer "had not been honest and forthcoming in his dealings with AFSC during the claims process and subsequent contact with Program Cross Compliance and Investigation, despite several opportunities to make full and honest disclosure of the production and sales of crops."

The Court ruled that the standard of review applicable to this judicial review was a standard of reasonableness: if the Court found that the appeal committee's decision was "reasonable", then the decision would stand.  On review of the record from the appeal process, the Court concluded that the appeal committee's decision was, in fact, reasonable, and denied the judicial review application on that basis.  In particular, the Court found that it was abundantly clear that the committee had found evidence of false or misleading reporting from the farmer.  The Court could find nothing unreasonable about that conclusion and the denial of the crop insurance claims.

Read the decision at: F Prins Potatoes Ltd v Agriculture Financial Services Corporation.

Divisional Court upholds OMB on question of reduction in market value for contamination

The City of Toronto appealed an OMB decision awarding more than $3.3 million for market value on the expropriation of a contaminated property.  The property in question was the former site of a soft drink manufacturing plant; the expropriation was required in order to install an underpass at Dufferin Street in Toronto beneath a rail corridor.  Through testing, a City consultant had identified various contaminants on the property, including vinyl chloride (VC) and tetracholorethylene (TCE).

Although there was no requirement to remediate the property, the City's expert witness at the OMB hearing suggested that remediation might be warranted based on a risk assessment and that the cost of remediation of the TCE would be $355,000.  To deal with the VC, a $40,000 upgrade to basement ventilation would be required.  As a consequence of these findings, the City's appraiser estimated that market value of the property should be subject to a reduction of $580,000.

The OMB accepted the evidence of the landowners that there was no risk to human health or to the environment from the presence of the contaminants and that no remediation was needed.  However, the OMB did deduct $20,000 from the market value for air sampling and $10,000 for the drilling of additional bore holes. 

The City appealed the market value award (as well as an award of business losses) arguing that the OMB should have deducted something for the contamination because the land was not "pristine" and that the OMB erred in relying on 2009 environmental standards when the valuation date for the expropriation was in 2005.  The Divisional Court ruled that it was reasonable for the OMB to reject the City's expert's evidence about a "potential 'ball park' worst case scenario" concerning the contamination.  There was no basis on which to find that the market value should be reduced on account of the contamination present.  Also, the Divisional Court found that the landowners' expert witness testified on the basis of standards that were available in 2005, even if he made reference to the 2009 standards as well.

The Divisional Court dismissed the City's appeal and awarded the landowners' costs of $25,000.

Read the decision at: City of Toronto v. Simone Group Properties Limited.

Saskatchewan Court allows recreational development in ranchland to go forward

A number of ranch land owners in the R.M. of Loon Lake, Saskatchewan asked the Court of Queen's Bench to quash or overturn by-laws that rezoned 44 acres owned by Kenneth and Patricia Prosser from agricultural to recreational use.  In order to allow for development proposed by the Prossers, the R.M. needed to change the Land Use Concept Map and Zoning District Map, which establish the general land use and development goals of the R.M. as set out in its Basic Planning Statement.

The landowners first challenged the by-laws on the basis that they were illegal due to a lack of substance.  They asserted that the bylaws were passed for an illegal purpose, that being solely for the economic consideration of allowing the recreational development.  The Court ruled that economic considerations were not the sole considerations of the R.M. council in passing the by-laws.

The second challenge was on the basis that the by-laws were not passed according to the proper process.  The Court disagreed.

The third challenge was that the by-laws were inconsistent with the general goal of the Basic Planning Statement, which is to maintain the agricultural character of the municipality by protecting prime agricultural land from being taking out of production, restricting lakeshore development to properties already zoned lakeshore development and not allowing lakeshore development within one mile of intensive livestock operations.  The R.M. acknowledged the importance of these points in the Basic Planning Statement, but argued that they should not be to the absolute exclusion of all other development contemplated within the Statement.  The Court agreed this was a reasonable interpretation of the Statement.

The fourth challenge by the landowners was based on minimum distance separation requirements related to intensive livestock operations.  The Court found that the requirements did not preclude development of a recreational subdivision and noted that the proposed development was to be on marginal grazing land rather than prime agricultural land.  The livestock facilities affected were not considered intensive by the R.M. council.  The Court reviewed this issue and found that this decision of the council was reasonable.

The fifth challenge to the by-laws was that they lacked landowner support.  The Court confirmed that it was for the R.M. council to decide what is in the best interests of the R.M. as a whole.  The public had been given an opportunity to be heard on the proposed development, but the decision was to be made by the councillors.

The sixth challenge by the landowners was that the site conditions were not suitable for the proposed development.  The Court found there was a lack of evidence to support this position.  The members of council viewed the site and the conditions of the site and reached a "constructive and reasonable decision" that the site was suitable for the development.

The seventh basis for challenging the by-laws was that there was insufficient demand for development of this sort to warrant a new development.  The Court found this was a "narrow and unrealistic approach" to what is in the best interest of the R.M. as a whole.  Members of council were aware of a "strong demand for lakeshore lots in this area of Saskatchewan".

The eighth and final basis for challenge by the landowners was an alleged failure by the council to have regard to concerns set out in section 10.1 of the Basic Planning Statement (development review criteria).  Based on affidavit evidence from the R.M., the Court found that those concerns were considered in the passing of the by-laws.

Justice Acton of the Queen's Bench concluded as follows:

Based upon the law in Saskatchewan as previously stated, the decision of council in amending the Land Use Concept Map and the Zoning Bylaw must be reasonable.

The decision of the council of the R.M. was reasonable, transparent and well thought out based on its jurisdiction and the reasons set out earlier in this judgment. Council has shown an understanding of the sometimes competing concerns respecting the maintaining of primary agricultural land, the encouragement of development of agricultural activities, and the need to develop lakeshore developments on marginal lands adjoining bodies of water for recreational purposes.

The applicants are unhappy with the proposed development. They have ranched for generations in the peaceful solitude and tranquillity of the area.

Their desire to maintain this lifestyle is understandable.

However, council has a responsibility to all inhabitants of the R.M. It must make decisions based on the best interests of all of the inhabitants of the R.M. As stated in s. 31 of the PDA, the Official Community Plan is to provide a comprehensive policy framework to guide the physical, environmental, economic, social and cultural development of the municipality. This is a broad and general policy which must guide the R.M.

Council has decided that the approval of this recreational development is in the long-term best interest for the advancement of the respondent municipality without preventing the continued use and development of the ranch lands in the area by local residents.

Council’s decision is in a range of reasonable, possible decisions.

Read the decision at: Morton v Loon Lake (Rural Municipality No 561).

Ontario Court of Appeal overturns Antrim Truck Stop expropriation compensation decision

In February, 2010, I wrote about a much anticipated decision of the Ontario Divisional Court on appeal from the Ontario Municipal Board: Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation).  The facts of the original OMB case were as follows:

• Antrim owned a truck stop in the Hamlet of Antrim on Highway 17, formerly part of the Trans-Canada Highway;
• In September, 2004, a new section of Highway 417 was finished and re-routed the former Trans-Canada Highway (away from the truck stop);
• The Antrim property comprised 13.66 acres and included 947 feet fronting on Highway 17;
• Antrim alleged that the closure of Highway 17 substantially interfered with its use and enjoyment of its property and made a claim for injurious affection - the change in the Highway basically put Antrim out of business (Antrim took steps to mitigate its loss and relocated);
• The business had been generating gross annual revenues of more than $15 million and had employed about 100 people;
• The claim for injurious affection was for over $8.2 million, including the cost of relocation and construction of new business premises;
• The OMB awarded Antrim $393,000 - the MTO appealed the decision - Antrim cross-appealed seeking the additional $7.6 million or so it had originally claimed.

No lands were taken from Antrim.  The Divisional Court agreed with the decision of the OMB and upheld the award of compensation on the basis that the diversion of the highway constituted an actionable nuisance in the form of interference with access. 

 

The Ontario Court of Appeal disagreed with both the OMB and the Divisional Court.  In its June, 2011 decision, the Court found errors in the Divisional Court's analysis of the tort of nuisance.  The Court of Appeal said that the OMB was required to consider two elements of the test for nuisance: was the interference with Antrim's property (access) substantial and, if so, was the interference unreasonable?  The Court of Appeal agreed with the OMB's finding (upheld by the Divisional Court) that the interference was substantial.  However, it found that the interference was also reasonable.  In its view, the Divisional Court had failed to analyze this issue.  The Court of Appeal concluded:

When the board’s factual findings are properly applied to the various elements of the reasonableness analysis, I would conclude, based on the observations made above, that the interference caused by the MTO’s conduct was not unreasonable. As the board reasonably concluded, the interference amounted to a “serious impairment in nuisance”. However, the interference was such that it fell within the boundaries of what the reasonable property owner in the area should be expected to tolerate and was the result of a project that served the public interest – more, was actually essential to public safety. Simply put, the highway was built to save lives. In the light of the substantial weight to be given to this factor in the circumstances, it is difficult to see how this change in the access to the Antrim property, particularly given the fact that it actually brought the Antrim truck stop in line with the access typical of Ontario truck stops, can be viewed as unreasonable.

In failing to properly carry out the reasonableness analysis, the board failed to give effect to the fundamental purpose of the law of nuisance: balancing the competing rights of property owners to use their land as they wish.

On this basis, the Court of Appeal found there was no nuisance and, therefore, no basis for an award of compensation.  Based on agreement between the parties, the Court awarded the MTO its costs of the appeal in the amount of $20,000 and its costs of the unsuccessful cross-appeal by Antrim (seeking higher compensation) in the amount of $20,000.

Read the decision at: Antrim Truck Centre Ltd. v. Ontario (Transportation).