[38] I have difficulty with the evidence of Mr. Moore on this issue. It appeared to be too much influenced by the subjective opinions and intentions of Mr. Higgins and it was, at times, evasive. On cross-examination he was asked if the low number of sales of residential lots on Route 755 in the eight years prior to expropriation was an indication that there is little demand. He replied:
Not necessarily. Not necessarily. It may still be a very clear indication that there was no lots there available for sale. Nobody wanted to sell any. I don’t know. I can’t answer your question really.
That appeared to me to be a very straightforward question that an expert witness should have been able to answer.
[39] Mr. Moore also stated in his report:
The most critical factor remains to be the fact that, at any point in time, the owner retains the opportunity to undertake any of these particular actions. This opportunity factor, therefore, must be seen to be of equal importance to highest and best use, as is any particular representation of immediate demand.
In my opinion that places too high a value on the subjective intentions of the property owner in determining the question of highest and best use. In my view that question should be based on an objective assessment of the market conditions rather than the subjective intentions of an owner. I therefore find that Mr. Moore’s conclusions with respect to the highest and best use of the property were based on assumptions which are not supported by an objective assessment of the market at the time of expropriation. In my opinion, while residential development was possible for the road frontage, as it is with any road frontage, there was little, if any, demand for it at the time of this expropriation. I therefore accept Mr. MacDonald’s conclusions as to highest and best use of the property, i.e. the continued use of the parent parcel as woodland.
I. Compensation for Lot 96-3
A. Market Value
[40] In measuring the value of the property lost in the expropriation of lot 96-3 Mr. MacDonald first valued the stumpage from the parcel taken and then determined the value of the underlying land which was expropriated. In order to determine stumpage value he retained the services of a professional forester who identified the various species and amounts of marketable wood on the land to be expropriated and determined the value of those amounts according to unit values for each species. Mr. MacDonald summarized those calculations as follows:
| Product | Quantity | Unit Value | Total Value |
| Spruce/Fir Pulpwood Spruce Studwood Fir Studwood Pine Logs Cedar Boltwood (6 ft.) Hemlock Pulpwood Tamarack Pulpwood Mixed Hardwood Pulp Poplar Wafer/Pulp | 43.7 cords 47.1 cords 19.4 cords 1.2 Mfbm. 80.1 cords 2.2 cords 141.0 cords 53.1 cords 4.8 cords | $25.00 $42.50 $42.50 $85.00 $17.50 $21.50 $21.50 $17.50 $17.50 | $1,092.50 $2,001.75 $ 824.50 $ 102.00 $1,401.75 $ 47.30 $3,031.50 $ 929.25 $ 84.00 |
| Totals |
|
| $9,514.55 |
[41] In my opinion this is a reasonable method of determining the value of the wood fiber which was expropriated on this lot.
[42] In determining the value of the underlying land Mr. MacDonald used the direct comparison approach. In the text Basics of Real Estate Appraising (3rd ed.) the authors state at p. 250:
The direct comparison approach is used to value vacant land or land that is considered vacant (homes ready for demolition). When sufficient comparables are found in the market, it is the most accepted and preferred method.
[43] In the text The Appraisal of Real Estate, 1992 (Canadian edition) the authors define the direct comparison approach as follows:
The direct comparison approach is the process in which a market value estimate is derived by analyzing the market for similar properties and comparing these properties to the subject property.
[44] Other sales revealed a range for cut-over woodland of $250 - $375.00 per hectare depending on the number of factors. Mr. MacDonald concluded:
The parent lands are accessible from and enjoy extensive frontage on Route # 755, an asphalt paved local highway. The lands are situated in close proximity to the community of Oak Bay. Given the foregoing, it was concluded that the upper end of the unit rate range developed should reflect those advantages possessed by the subject land.
After reviewing the sales data collected and further considering the bench mark unit rates obtained from the local woodland industry, it was concluded that a unit rate of $375.00 per hectare would be employed for valuing the underlying land.
[45] At 7.216 hectares Mr. MacDonald determined that the value of the underlying land, using this method, was $2,706.00. The total value of the land expropriated including stumpage and cut-over land as appraised by Mr. MacDonald was $12,200.00. In my opinion his approach was reasonable and I accept the appraisals of the market values of the expropriated lands as set out in Mr. MacDonald’s reports.
B. Business Loss (Injurious Affection)
[46] In dealing with the issue of injurious affection Mr. MacDonald states in his report:
In conclusion, the two remaining parcels of the parent land will both be accessible from Route 755, are of sufficient size and are capable of being utilized for continued woodland purposes. … It is therefore considered that the lands remaining will not suffer any diminution in value due to the proposed acquisition of the parcel of land identified as parcel 96-3 from the subject property.
[47] As indicated earlier in this decision, the effect of the expropriation combined with the stream which runs north-south through the property has left Mr. Higgins with four parcels of land. The two on the north side of Lot 96-3 are connected by a stream crossing which has been re-conveyed to Mr. Higgins by the province so I accept that there is no injurious affection to those two parcels of land except for the cost of a culvert to connect parcel A to Highway 755. In my opinion, however, the two lots on the south side of Lot 96-3 have suffered injurious affection by this expropriation. The lot which I referred to as parcel D has frontage on Route 755 but there is no access since there is no culvert. The lot which I referred to as parcel C is not accessible from parcel D because there is no stream crossing. Though he may be able to arrange access through an adjacent property, I infer that that would cost him something which would reduce/eliminate the value of the stumpage to him on that lot. Furthermore, though he is not in the business of harvesting wood, in my view Mr. Higgins has lost the stumpage value of parcel C as surely as he lost it from Lot 96-3.
[48] Mr. Moore calculated the stumpage value of parcel C at $6,192.00 using the same price per hectare as the forester hired by Mr. MacDonald to calculate the stumpage value on lot 96-3. I accept that number and award the sum of $6,192.00 for injurious affection to Mr. Higgins for parcel C.
C. Culverts
[49] There is no evidence before the Court as to the cost of installing culverts but Mr. Higgins claims $10,000.00. I don’t find that figure to be reasonable. In my view a more reasonable amount would be $4,000.00 to install two culverts, although admittedly there is no evidence before the Court to support either figure.
D. Property Damage
[50] Mr. Higgins also claimed the sum of $253.00 for property damage caused by the province but he was unable to prove that damage so I dismiss his claim for that amount.
II. Compensation for Lot 98-1
[51] This lot was expropriated for the use of the stream crossing. It was valued at $325.00 and that amount was paid to Mr. Higgins. It has since been re-conveyed to Mr. Higgins. While the province owned it the province rebuilt the stream crossing though Mr. Higgins submits that the crossing they installed was inferior. He led evidence to the effect that a properly constructed stream crossing would cost $43,600.00 but I give no weight to that evidence as it was hearsay and not supported with any particulars.
[52] The stream crossing has been in place and used by Mr. Higgins since 1998 and he hasn’t had to maintain it in those six years. I find that there is no need for him to construct a new stream crossing on lot 98-1 and that he has been fully compensated for that expropriation.
III. Fred Tuddenham’s Proportionate Share
[53] Pursuant to Section 42(7) of the Expropriation Act, supra., Mr. Tuddenham, as a security holder, is entitled to a proportionate share of the market value portion of the compensation and any damages for injurious affection. His share is calculated by determining the ratio of the balance of his mortgage at the time of expropriation to the market value of the entire parcel.
[54] Lot 96-3 has been valued at $12,200.00. It constitutes 7.216 hectares out of a 21.073 hectare parcel of land or 34.24 per cent of the total. Based on that valuation the parent parcel would have a value of $35,600.00. Mr. Tuddenham’s mortgage balance as of the date of the expropriation was $3,000.00 which is 8.42 per cent of the value of the parent parcel. The total of this award for market value and injurious affection is $22,717.00. Mr. Tuddenham’s share of that would be $1,913.00.
IV. Time and Expenses
[55] The authority for compensating an owner for his time and expenses incurred in resolving a claim for compensation under the Expropriation Act is found in s. 52(1) of the Act which states:
The Court shall award costs on the basis of the following rules, namely:
(a) where the compensation awarded by the Court exceeds the amount offered by the statutory authority, the statutory authority shall pay the legal, appraisal and other costs reasonably incurred by the owner in asserting his claim to compensation, and
(b) where the compensation awarded by the Court does not exceed the amount offered by the statutory authority, the costs shall be in the discretion of the Court on such basis as the Court considers just,
and the Court shall determine what are reasonable costs and shall fix the amount of costs to be paid by or to the statutory authority. (my underlining)
[56] The factors to be taken into account in making an award under this heading were considered by Garnett, J. in the case of Rankin and Rowan v. Province of New Brunswick, 2005 NBQB 106 (CanLII), 2005 NBQB 106 (CanLII), she stated at paragraph 72:
In this, and all the other cases to which I have been referred, the claimant was self-employed and lost time from his business/farming in order to pursue the expropriation claim. In these cases, the owner could not show a loss of wages because he did not receive wages; however, it is reasonable to assume that hours spent away from self-employed work will result in a real loss. As stated in Gulak v. Winnipeg (City) (1983) 29 L.C.R. 261, “The compensation payable for time spent dealing with an expropriation is not to compensate for the value of the time spent per se, but rather to compensate for a loss incurred…”
[57] In their post-trial brief the applicants advance a claim of $4,868.37 for Mr. Tuddenham’s expenses and compensation. The evidence indicates that he spent much of his time working on Mr. Higgins’ behalf but the Act specifically refers to other costs reasonably incurred by the owner so in my view he can only claim his own costs. Because Mr. Tuddenham is not the principal owner and because of the minimal balance owing on the mortgage ($3,000.00) his claim for time and expenses is disproportionate in my view. I will allow him $500.00 for his time and expenses.
[58] In the post-trial brief Mr. Higgins advances a claim of $12,465.00. This represents more than 400 hours of his time at rates varying from $25.58 to $35.23 per hour which were roughly the equivalent of his rates of pay at NB Power since the expropriation. I find an hourly rate of $30.00 per hour to be reasonable for Mr. Higgins.
[59] Mr. Higgins is employed as an engineer with New Brunswick Power. He also has real estate interests which he manages. The evidence is clear that he lost no time from his work at NB Power but it is reasonable to assume that he did take time away from his other business interests to work on this claim. That being said, I find that his claim is out of proportion to what he has achieved in this litigation so I will not award him for all of the hours he has claimed. I will award him 100 hours at his hourly rate or a total of $3,000.00 for his time and expenses.
[60] In summary, the applicants’ claims are allowed as follows:
a) Fair market value and injurious affection - $12,525.00
b) Business loss – injurious affection $ 6,192.00
c) Culverts - $ 4,000.00
Total - $22,717.00
Fred Tuddenham’s Share $ 1,913.00
Michael Higgins’ Share $20,804.00
d) Expenses – Fred Tuddenham $ 500.00
e) Expenses – Michael Higgins $ 3,000.00
[61] In total I approve the applicants’ claims in the sum of $26,217.00. The total of Mr. Higgins’ claim is $23,804.00; the province has already paid him $12,525.00 leaving a net balance of $11,279.00 owing to him by the province. The total of Mr. Tuddenham’s claim is $2,413.00 the full balance of which remains outstanding.
V. Interest, Costs and Accelerated Tax
[62] Section 50 of the Act provides for interest. If the parties cannot agree on an amount I will hear further arguments on that question. The respondent has also requested the opportunity to address the Court further with respect to costs and the applicants have requested the opportunity to make submissions on the issue of accelerated income tax, if any, on the award so I will withhold any decision on those issues pending further submissions.
_________________________________________
William T. Grant
A Judge of the Court of Queen’s Bench
the 2 part Look at this?
[19] The applicants claim a total of $64,168 for legal fees. In September, 2002 when the province made the offer which exceeded the judgment, the applicants’ outstanding legal fees were $33,665. While that is more than the value of the claim, I accept the applicants’ submission that there is an irreducible minimum amount of work that must be done to pursue any litigation, much of which is required to reach the stage of Discovery which is where this matter stood in September of 2002.
[20] Taking that into account as well as both the offer of September 2002 and Mr. Higgins’ rejection of the proposals made by the province before the expropriation of the stream crossing and taking a global view of the account, I allow the sum of $40,000 plus HST to the applicants for legal fees.
[21] With respect to the appraisal fees, the province submits that since Mr. Moore acted more as an advocate than an appraiser by adopting an approach to determining valuation that was clearly inappropriate and rejected by the Court, his account should not be allowed. In my view, however, that submission overlooks two important facts. First, I accepted Mr. Moore’s evidence in calculating a portion of Mr. Higgins’ loss. Second, and more important, it was necessary for the applicants to retain an appraiser independent of the expropriating authority to evaluate their claim and, provided the account is not unreasonable, they should not be penalized for doing so. I adopt the sentiment expressed by Rideout, J. in McLeod v. New Brunswick [2000] N.B.J. No.303 at paragraph 32:
The court is left with the difficult task of balancing what is reasonable without creating a situation which makes it impossible for citizens to counter a valuation prepared by an expropriating authority. If the latter were to occur only the rich could fight the government. The intention of section 52 of the Expropriation Act is to fully compensate a citizen for reasonable costs and the court should err on the side of the person whose land was expropriated.
[22] Mr. Moore submitted three accounts, two in 1997 for the valuation of lot 96-3 and the third in October, 2004 to cover his attendance at trial. The province did not dispute the reasonableness of the appraisal accounts per se so I will allow the two accounts submitted in 1997 which totaled $7,712.13 including disbursements and HST. I will not allow the third account for attendance at the trial as, in my opinion, the trial was not necessary in this case.
[23] The applicants also claim costs of this proceeding in the amount of $3,400 plus HST. While that is not excessive in my view given the preparation required, I will only allow it in roughly the same proportion as the other legal fees. I hereby approve $2,000 plus HST for this account.
DISPOSITION
[24] Pursuant to section 52(1)(b) of the Expropriation Act, supra., I hereby order the province of New Brunswick to pay to the applicants the following amounts for their costs of this expropriation:
a) legal fees $40,000.00
b) costs of this proceeding $ 2,000.00
c) HST $ 6,300.00
e) Appraisal fees $ 7,712.13
TOTAL $56,012.13
The Lawyers got $56,012.00 Dollars
The Property owner got$ 26,000.00 Dollars ? what do you think that is going on? how much did the Property owner pay out of there pocket? for a Goodwin?
__________________________________________
William T. Grant
A Judge of the Court of Queen’s Bench
of New Brunswick
TEXTAREA_ID
No comments:
Post a Comment