Canada: SCC Rules On Antrim - Considerations For Public Authorities

In a unanimous decision released March 7, 2013, the Supreme Court of Canada (SCC) overturned the Ontario Court of Appeal's decision in Antrim Truck Centre Ltd. v. Her Majesty The Queen in Right of the Province of Ontario (MTO). The landowner, who operated a truck stop, brought a claim for injurious affection, where no land was taken, resulting from MTO highway construction which had significantly impeded access to its land and permanently impaired its business. The Court of Appeal had set aside the Ontario Municipal Board award for business loss and loss of market value on the basis that the Board had failed to consider two of three mandatory factors under the "reasonableness test", and that the Board had failed to recognize the utility of MTO's activity.

REQUIREMENTS TO CLAIM INJURIOUS AFFECTION, NO LAND TAKEN

To claim compensation under the Expropriations Act for injurious affection where no land is taken, a claimant must show that:

• The damage resulted from action taken under statutory authority;
• The action would give rise to liability but for that statutory authority; and
• The damage resulted from the construction and not the use of the works.

The only requirement at issue in Antrim was the second test, i.e. whether the claimant could have sued successfully for private nuisance had the construction not been under statutory authority.

THE PRIVATE NUISANCE TEST

Nuisance is an interference with the use or enjoyment of land that is both (1) substantial and (2) unreasonable. A substantial interference is one that is non-trivial. The question is not whether the action fits under a specific type of nuisance, but whether the nuisance meets a threshold of seriousness. If that test is met, the inquiry proceeds to the reasonableness analysis – which was the focus of the SCC's decision.

The SCC decision clarifies the balancing of private harm versus public utility under the reasonableness test:

• Some of the factors that may be relevant include the severity of the interference, the character of the neighbourhood, the sensitivity of the claimant, and the frequency and duration of the interference;
• These factors are not a checklist and may not be relevant in each case. Consideration of every one of these factors is not mandatory;
• The focus of the analysis is on whether the interference suffered by the claimant is unreasonable, not whether the nature of the authority's conduct is unreasonable;
• The nature of the authority's conduct, however, is relevant as one of the factors, although it must be considered in light of other relevant factors; and
• The severity of the harm and the public utility of the activity are not weighted equally, otherwise the latter would always prevail.

The SCC articulated the following question that must be addressed in such cases: whether in all of the circumstances the claimant has shouldered a greater share of the burden of construction than it would be reasonable to expect individuals to bear without compensation?

What does this Decision Mean for Public Authorities?

Antrim challenges authorities to conduct a strategic assessment of projects to identify risk of claims where no land is taken. This assignment should be built into every project plan. Some of the items that experience teaches us might be considered in that assessment are:

• Do not assume that the importance or utility of a public work will always outweigh harm to landowners to the effect that compensation will not be required;
• Do emphasize and develop evidence to prove betterment from public infrastructure investment;
• Avoid causing any specific landowner to disproportionately shoulder the burden of the construction of a public work. To the extent possible, treat landowners equally and consistently in terms of impact;
• Consider mitigation options where appropriate: for example, provision of replacement parking and alternative access;
• Put owners to their duty to mitigate early and often;
• Critically assess whether the alleged damages are both causally related and substantial;
• Make all reasonable efforts to reduce the impact of public works, and act fairly, openly and without carelessness or high-handedness;
• Duration is important – permanent impacts are far more likely to be considered unreasonable;
• Some interference must be accepted by landowners as part of the normal "give and take" of life; and
• Assess the other defences to injurious affection claims not presented in Antrim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.