Vincorp Financial Ltd. v. Oxford (County)

Vincorp Financial Ltd. v. Oxford (County) Collection Decisions of the Court of Appeal Date 2014-12-08 Neutral citation 2014 ONCA 876 Docket numbers C58816, C58851 Judges Rouleau, Paul S.; van Rensburg, Katherine; Pardu, Gladys I. Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Vincorp Financial Ltd. v. Oxford (County), 2014 ONCA 876 DATE: 20141208 DOCKET: C58816 and C58851 Rouleau, van Rensburg and Pardu JJ.A. BETWEEN DOCKET: C58816 Vincorp Financial Ltd. Appellant and The Corporation of the County of Oxford and The Corporation of the City of Woodstock Respondents AND BETWEEN DOCKET: C58851 Blandford Square Developments Limited Appellant and The Corporation of the County of Oxford and The Corporation of the City of Woodstock Respondents Clifford Cole and Nicholas Kluge, for the appellants Vincorp Financial Ltd. and Blandford Square Developments Limited Steven Stieber and Murray Stieber, for the respondents Heard: November 17, 2014 On appeal from the judgment of Justice C. Horkins of the Superior Court of Justice dated April 30, 2014. ENDORSEMENT [1] The appellants submit that the trial judge erred in answering questions put to her that had the effect of dismissing their claim for damages resulting from the expropriation of their land (the mall lands), and the subsequent transfer of such lands to Toyota to facilitate its development of an auto plant in the County of Oxford. [2] The matter proceeded on the basis of an Agreed Statement of Facts and Chronology and a series of uncontested documents. There were three questions before the trial judge: Question 1: Could Oxford lawfully expropriate the mall lands for the purposes set out in Oxford By-law No. 4545-2005, including in order to transfer the mall lands to Toyota for the proposed development of the Toyota Plant? Question 2: Did the expropriation and later sale of the mall lands by Oxford, or any step in that transaction or series of transactions, confer a “bonus” on Toyota contrary to the provisions of s. 106(1) of the Municipal Act? Question 3: If a bonus was conferred and/or if the expropriation of the mall lands was unlawful, are the plaintiffs entitled to a remedy in damages against Oxford? [3] The trial judge answered questions 1 and 2 in the affirmative and found it unnecessary to answer the third question. [4] The appellants argue before this court that: 1. Oxford gave Toyota a bonus in violation of s. 106 of the Municipal Act, 2001, S.O. 2001 c. 25, by transferring the mall lands to Toyota at the fair value as defined by the Expropriations Act, R.S.O. 1990, c. E.26, which did not reflect any increase in value attributable to the proposed development. 2. The expropriation of the mall lands was illegal, because it was tainted by the concurrent agreement to sell the lands at the expropriation value. 3. Oxford is liable in trespass for damages for the differential, in addition to the payment for the market value as defined by the Expropriations Act, which the expropriation process will provide to them. [5] With respect to the value of the mall lands, while there was no evidence establishing the “fair market value” of such lands at the time of their transfer to Toyota by the Municipality, the parties agreed that if the development of the Toyota plant is taken into account in determining the fair market value of the mall lands, the fair market value would exceed the fair market value of the mall lands without taking into account the proposed development. [6] Sections 106(1) and 106(2)(c) of the Municipal Act provide: 106(1) Despite any Act, a municipality shall not assist directly or indirectly any manufacturing business or other industrial or commercial enterprise through the granting of bonuses for that purpose. (2) Without limiting subsection (1), the municipality shall not grant assistance by… (c) … selling any property of the municipality at below fair market value; [7] The appellants assert that the trial judge erred in viewing the expropriation of the mall lands by the respondent as constituting one transaction and the sale to Toyota at the expropriation price as a separate transaction. In the appellants’ submission, the two transactions should be viewed together as one single transaction. It would follow, according to the appellant, that a violation of s. 106 as part of that transaction would operate to invalidate the expropriation of the appellants’ lands ab initio. [8] There are a number of problems with this argument. First, although the expropriation decision may well have been motivated by the desire to acquire the mall lands for their transfer to Toyota, the expropriation and the rights of the appellants to receive compensation for their lands are governed by a specific statutory regime, under which the appellants have a statutory right to receive “fair value”. [9] The Expropriations Act provides that in calculating the fair value to be paid in compensation to an owner, no account shall be taken of “any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made.”: s. 14(4)(b). The claim by the appellants that they are entitled to damages in an amount that reflects an increase in value attributable to the proposed development cannot be reconciled with the provisions of the Expropriations Act limiting the compensation payable. [10] The trial judge rejected the submission that the expropriation and the subsequent sale to Toyota constituted one transaction. She found that they constituted two separate transactions and that they must be considered individually. As found by the trial judge “this is consistent with the legislative scheme that governs expropriation and provides for the expropriated party to be compensated.” [11] It was conceded on appeal that the expropriation proceeded on the basis that there was a proper municipal purpose for the expropriation. That purpose was to promote economic development in the area. It was also conceded that a municipality may have in mind a particular purpose, when deciding to expropriate. Even if the subsequent sale and transfer to Toyota had breached s. 106, this breach would not invalidate or vitiate the proper purpose for the expropriation and would not render the expropriation invalid. As explained by the trial judge, “a compelling valid purpose (promotion of economic development), drove Oxford’s decision to expropriate the mall lands and sell this land to Toyota for the expropriation price. The fact that the mall lands were transferred to Toyota for the expropriation price does not change the validity of the expropriation power that was exercised.” [12] In other words, the appellants have an interest in the legality and propriety of the expropriation process and are entitled to receive the fair value of the mall lands as determined under the Expropriations Act, but their interests are not at stake in reviewing the second transaction. There is no suggestion of bad faith or any procedural failure that would invalidate the expropriation process. [13] Even if we accept the submission of the appellants to the effect that the expropriation and sale should be considered together as a single transaction, and that there was a breach of s. 106, this would not invalidate the expropriation and give rise to an entitlement to damages calculated by the excess of the fair market value taking into account the proposed development over the expropriation value provided under the Expropriations Act. There is nothing in the legislative purpose underlying s. 106 of the Municipal Act, (to level the playing field between municipalities competing to attract development: Friends of Lansdowne Inc. v. City of Ottawa, 2012 ONCA 273, at para. 38), or in the language of s. 106 itself to suggest any intention to confer a right to damages upon land owners like the appellants. [14] In view of our conclusions that the appellants are not entitled to damages even if the sale to Toyota contravened s. 106(1) of the Municipal Act, we need not answer question 2. Similarly, we need not address the appellants’ argument that the trial judge erred by going outside the contractual arrangements between the Municipality and Toyota, and considering the community interest in the development in deciding whether a bonus had been provided. [15] In the result, the appeal is dismissed with costs to the respondents fixed at the agreed sum of $25,000. “Paul Rouleau J.A.” “K. van Rensburg J.A.” “G. Pardu J.A.”