Interest on expropriation damages awarded for time before land actually expropriated

The Ontario Divisional Court has dismissed an appeal from an Ontario Municipal Board ("OMB") decision that awarded interest to a landowner under the Expropriations Act for a period prior to the actual expropriation.  In this case, a local school board expropriated land for a school site.  The landowner had registered a subdivision plan on the lands in question and, in February, 2005, wrote to the school board to advise that, failing an agreement to sell the property to the school board, the landowner would be proceeding with the development of residential lots on the land.

Rather than attempting to negotiate an agreement (reportedly because of a change of control over the landowner company and uncertainty as to the identity of the controlling interest), the school board registered an expropriation plan on June 1, 2006.

The market value of the land taken was determined by the OMB to be a little over $2 million.  On the issue of interest payable on that amount under the Act, the OMB ruled that interest could accrue from a date preceding the date of expropriation.  The OMB determined that the productive use of the land actually ceased in December, 1999 when a "district plan" that governed land use in the area received draft approval.  That plan stated that the land in question was to be used as a school site.  The interest payable by the school board for the period between 1999 and 2006 amounted to between $600,000 and $700,000.

The Divisional Court upheld the OMB's ruling that interest was payable from the date of loss of the use of the expropriated asset and that, in this case, that date was December, 1999.  As the Divisional Court notes:

In my view, the board member applied the correct test by seeking to determine the earliest date at which the potential for expropriation prevented the use of the lands, either because the Municipality would not permit further development or because it would not have been prudent for Erbsville to spend money for that purpose.  In the present case, the distinction between these two potential triggering events is inconsequential.  The board member found that both events occurred on the date that Plan 30T-97017 received draft approval.  As I will explain, I believe that finding was reasonable.

Read the decision at: Erbsville Road Development Inc. v. Waterloo Region District School Board.

Gas supply easement binds any severed parcels

The Alberta Court of Appeal rejected an application for leave to appeal from a decision that found that a gas supply easement continued to apply after a lot was severed into three parts (creating two new lots).  The owners of the original parcel applied to the Alberta Utilities Commission for an order directing the Evergreen Gas Co-op to discharge its easement from the newly subdivided lots.  The Commission refused, and the owners sought leave to appeal the decision to the Court of Appeal.

The Court of Appeal confirmed that the easement, which was a general easement that applied to the entire original property (rather than a limited easement or ROW over a particular portion of the property), would continue to apply to any subdivided parts of the property.  The Court rejected the argument by the owners that the imposition of the easement on the new parcels was nevertheless "improper" within the meaning of the Gas Distribution Act.  The Court also rejected the argument that the easement "agreement" (the easement was created when the owners agreed to receive gas service from the Co-op, the terms of the contract being statutorily set) was "unconscionable" - how could the contract be unconscionable when the owners had applied for gas service and the terms of the contract were imposed by statute?

Read the decision at: Andre v Evergreen Gas Co-op Ltd.