The Supreme Court of Canada has sided with an Ottawa-area truck-stop owner in his lengthy battle for compensation after the province built Highway 417, which forced him to move his business.
The dispute was seen as an important legal battle by lawyers who specialize in expropriation cases. Lawyers acting for the Ontario government in the case had warned it could have broad ramifications for governments trying to build major infrastructure projects such as roads, power lines and subways.
In a unanimous ruling, the Supreme Court overturned an Ontario Court of Appeal ruling and sided with Antrim Truck Centre, a former truck stop on Highway 17 that was forced to shut down when the province built the new four-lane Highway 417 in 2004.
The changes left the truck stop much farther from the new highway, and on a dirt road. Owner Jack Cameron defiantly kept the hamlet of Antrim in the name of his business when he moved it to nearby Arnprior, Ont., where it remains.
Under Ontario’s expropriation law, some landowners who have not actually had their own property expropriated, but have had their businesses or real-estate values affected, are entitled to compensation under a legal concept called “injurious affection.”
Mr. Cameron initially took his case against Ontario’s Ministry of Transportation before the Ontario Municipal Board, which awarded him $58,000 for business loss and $335,000 for the loss in market value of his land. But the decision was set aside by the Ontario Court of Appeal, which ruled that the compensation was “unreasonable” given the public interest in the construction of the new, safer, highway.
The Supreme Court restored the compensation. In its decision it said the question of when it is reasonable for a important public project to affect nearby landowners must be answered by a balancing of competing interests, keeping in mind how much trouble the project has caused.
“Here, the interference with the appellant’s land caused by the construction of the new highway inflicted significant and permanent loss,” the court’s decision reads.
Mr. Cameron’s lawyer, Shane Rayman of Rueter Scargall Bennett LLP, said the Supreme Court has restored the ground rules for this kind of case.
He said if that previous Court of Appeal ruling were allowed to stand, governments would have been able to deny many other landowners compensation. But he said the Supreme Court’s decision would not add much to the costs of public infrastructure projects, as the law has checks and balances for this kind of claim.
Mr. Rayman argued that if the test for compensation always depended on weighing the loss of the property owner against the public interest in a new road or subway line, property owners would always lose -- an unfair result.
“Ninety-nine times out of a hundred, a highway that saves lives and is good for society, is going to be more important than one poor guy’s business,” Mr. Rayman said.
Pitman Patterson, a Toronto lawyer with Borden Ladner Gervais LLP who works on expropriation cases, said the Supreme Court’s decision is balanced and clears up confusion from conflicting lower-court decisions.
He said that it should not add much, if any, to the costs of infrastructure projects, as compensation will only be paid out in this kind of case if there is “disproportionate” harm to a land owner, not in all cases. But governments had been watching it closely, he said, fearing that a different result could make things more expensive.
“I think that was a real area of concern for municipalities, that a possible out come off this decision would enable business owners along an urban street to claim damages readily from an infrastructure project where no land was taken, the St. Clair-type circumstance, for example,” he said, referring to the battle between shop owners and the city of Toronto over a streetcar line on St. Clair Avenue West.
“I think the Supreme Court certainly didn’t rule that possibility out, but we’ve got a pretty clear road map for the balancing exercise that has to take place.”
Before the Supreme Court, Ontario’s lawyers had argued that Mr. Cameron’s damages were not severe. They said the old Antrim truck stop, even after the construction of Highway 417, continued to operate successfully for a while and still enjoyed similar access to the highway to other existing truck stops, via a secondary road. The new location had also been very successful, they said.
Ontario also said Mr. Cameron declined an offer to put up highway signs that would direct customers to his business. And they pointed out that plans to expand the highway were already well-known when he bought the property in 1978. The changes, they argued, were needed to improve what had become known as a “killer highway” because of traffic accidents.