452 EXCHEQUER •COURT REPORTS: [VOL. XVII. 1 HIS MAJESTY THE KING, ON THE INFORMATION April 22. OF THE ATTORNEY-GENERAL OF CANADA, PLAINTIFF, AND ARTHUR PICARD, HONORINE MORAUD, WIFE OF EDMUND R. ALLEYN, AND THE SAID ED- . MUND R. ALLEYN, TO AUTHORIZE HIS SAID WIFE AND DAME PHILLA LEE, DEFENDANTS. Expropriation—Bettie of compensation—Value of land—Speculative purchase--10% allowance. In assessing compensation for property taken under compulsory powers, it is not proper to treat the value to the owner of the land and rights, as a proportional part, the value of the realized undertaking proposed to be carried out. The proper basis of compensation is the amount for which the property could have been sold had the proposed undertaking by the Crown not been in existence, with the possibility that the Crown or some other person might obtain those powers. The price the property brought from purchasers speculating upon the expropriation affords no proper mode for arriving at its market value, and having been acquired for such speculative purposes the usual 10% allowance for the compulsory taking will be refused. I NFORMATION for the vesting of land and corn- , pensation therefor in an expropriation by the Crown. Tried before the Honourable Mr. Justice Audette, at Quebec, December 20, 21, 1915. Geo. F. Gibsone, K.C., and A. C. Dobeil, for plaintiff. Louis S. St. Laurent, K.C., and A. Baillargeon, for defendant Picard. Lucian Moraud, for other defendants.
t VOL. XVII.] EXCHEQUER COURT REPORTS. • 453 AUDETTE, J. (April 22, 1916) delivered judgment. 1,16. TIM MING This is an information exhibited by the Attorney- Plc ► RD. General of Canada, yvhereby it appears, inter alit, Reasons for that certain lands belonging to the defendant Picard, Jadgment. , were taken and expropriated, Under the authority of 3 Ed. VII., ch. 71, for the purposes of, the Na-, tional Transcontinental Railway, a public work of Canada, by depositing a plan and description of the same, on November 8th, 1913, with the Registrar of Deeds of the Registration, Division of 'Quebec. The Crown, by the information, offers the sum of $4,589.55 for the land so expropriated, and for all damages resulting from the said expropriation, and defendant Picard, by his plea, claims the sum of $28,200. The hypothecary-creditors, Moraud,, Alleyn and Lee, appeared by attorney and filed of record a declaration whereby they admit having been served t with the information and ,declare to leave the matter in the hands of the Court. The total area of the land expropriated is 5;367 feet. This property is situate on Champlain Street, in the City 'of Quebec, and extends at the back to, low water mark, as conceded by the, Crown's counsel. The Crown has expropriated from this property the right-of-way for the National Transcontinental Railway, taking * all the land, belonging to the defendant, on the river side from the north line of the said right-of-way,--thus leaving the defendant with , a certain piece 'of land on the northern side of the said right-of-way to Champlain Street, 'and upon . O the piece, of land so left to .the defendant, there is a' dwelling house with ,a small yard at the back. 1
454 EXCHEQUER COURT REPORTS. [VOL. XVII. 1916 Under a previous expropriation of the whole THE KING N. property herein,--including the dwelling house and P""RD. the land up to Champlain Street, of January 20th, Reasons for Judgment. 1911, as appears by a copy of the information filed herein as (Exhibit A),—the Crown had offered the sum of $16,411.48. By reference to that record, it appears the defendant Christie (Mrs. Howe) had accepted that amount by her plea of November 4th, 1911. However, that plea has been subsequently amended by substituting a new one filed on Novem-ber 29th, 1911, whereby the amount of $16,411.48 offered by the said information is refused and a claim for the sum of $36,324.50 made in respect of the same. That case was finally discontinued on March 20th, 1912. However, on December 13th, 1911, while the whole property was thus expropriated and before the Crown abandoned the said expropriation, under the provisions of sec. 23 of the Expropriation Act, and before the discontinuance, of the first case in respect thereto, the defendant in the first ease, Elizabeth Christie (Mrs.. Howe), sold her property and assigned all her rights to and interest in the compensation moneys to J. T. Donohue. The latter, heard as a witness, testified he paid as consideration for the said sale or assignment, the sum of $16,411.48 to Reverend Father Wood, acting on behalf of the St. Bridget Asylum, to whom the said Mrs. Howe had assigned her rights, in the manner mentioned in the evidence. And it is well to add that Reverend Father Wood, heard as a witness, recognizes having so received the said moneys. A conveyance of this • k ind, while the property was expropriated, did not pass the fee at that time, but the assignment to the compensation moneys was good and valid.
VOL. XVII.] EXCHEQUER .COURT REPORTS. , 455 Subsequently thereto the said . Donohue appears 1916 to have sold to the present defendant Picard, the THS K'NG whole of ,the said property for the sum of $18,000, PI~RD. Reasons for as appears by the deed filed herein as (Exibit B).' judgment, The defendant Picard frankly admits in his evi- dence that when he bought, it was. not with the . in- tention of occupying the property, but that it was absolutely a speculation, with''the . idea .of 'making - more later on. Witness Donohue also admits he bought to speculate, and it must be conceded there is nothing wrong in speculating; büt .the market price of property and its speculative price may be very" different. Be all this as it may, I cannot refrain mentioning • that while my opinion is that all the facts disclosed by -the evidence are true; -that . all the witnesses heard in respect of this transaction, told the truth, I am inclined to believe I have not_'the whole 'truth. In other words, I feel satisfied I have. not the whole, history of this transaction.. I have had some hesitation as, to whether or not I should not re=open the. case to hear further evidence, but after mature deliberation, I have come to the conclusion that perhaps with additional evidence, I would not then \ be in a better position than I am now to. do justice tween the parties, and I have abandoned the idea. It is, indeed, in a case -of this' kind, quite difficult' to arrive at a satisfactory amount as representing A . the market value of the `land in question herein,, view of the fact that at the date -, of the expropriation-_, there .was= practically no market for all these , water front properties, in the , neighbourhood;—notwithstanding these transactions by witnesses Donohue and Picard made with the object of speculating, up on the. expropriation.
456 EXCHEQUER COURT REPORTS. [VOL. XVII. 1816 The only revenue derived from the property was THE KING V from the dwelling houses which at the date of pur-. PICARD. chase by the defendant Picard had seven different Reasons for Judgment. tenants, honourable and respectable tenants, but of the labouring class, as a property in that locality would obviously call for and command, and calling for small rents. Notwithstanding the large claim made for the damages resulting from the expropriation, from the fact that the railway passes at the back Of the property,—the defendant Picard tells us that the revenue derived from the house has not varied in 1912, 1913, 1914 and 1915. There is a small wharf on the property, running practically to low water mark, but there is not a tittle of evidence showing that there was ever any revenue derived from the same, or whether or not, it was not only used as a yard, together with all rights attached to a riparian owner under similar circumstances. The property at the date of the expropriation was used as a residential proposition, and the house was occupied by tenants, and that was the only apparent revenue it did yield as such. There is, however, some evidence and much argument as to the future potentialities of this property, as forming part of the harbour of Quebec, in course of development. But in that respect, it is now clearly settled that in assessing compensation for property taken under compulsory powers, that it is not proper to treat the value to the owners of the land and rights, as a proportional part of the value of the realized undertaking proposed to be carried out; and the proper basis for compensation is the amount for which such land and rights could have been sold had the present scheme carried on by the Crown not been
VOL. XVII:] , EXCHEQUER COURT REPORTS. 457 existence,—but with the possibility . that the . 1916, I Crown or some company or pers i o g n h m t, obtain' TUE KING those or such powers. The Cedar Rapids Case.' PI"°' And is there any competition in a'case of ,this kinds Jud ntr Would these works be done by anybody else but the Crown 7 In approaching these considerations, it is well to bear in mind that I am not using the transactions made by Donohue and Picard as a proper. mode of arriving at the market value of this property; because they were obviously made . with the open purpose of speculating upon the .expropriation, to the detriment of the public interest. The matter be-tomes self-evident, when ie is considered that the • defendant is now claiming by his plea the sum of -$28,200, and that he openly and frankly admits in • his evidence that he bought for, the purpose of speculation, a purpose which is not in itself wrong, but a speculative price, boosted 'up upon imaginary schemes or reasons, does not always , establish the market value of a property. Then it is said the Crown, by the original informa-• tion under case No. 2152, offered ' the sum 'of $16,= 411.48 for the wholé property and has thus to a cep, tain extent established the; market price of the property. Accepting that view, the whole question of coin- pensation would then resume itself into finding what is the value of what remains of this, property after , the expropriation of 1913,—since we have the value agreed upon before the expropriation. Considering, therefore, that the whole of the dwelling house, • with a small yard, remains intact, and that the only revenue derived from this property at the date of 1 [1914] A.C. 569, 16 D.L.R. 168. i
458 EXCHEQUER COURT REPORTS. [VOL. XVII. 1916 the expropriation, was from the dwelling, it will TILE KING obviously appear that the sum of $28,200 claimed rif D- by the defendant is not only excessive, but is ex- Reasons for Tndgment. travagant. There can be no objection to the taking of the view to a certain extent and to consider that the valuations made by witnesses Giroux and Tanguay in 1911 was right and acceptable to the defendant. If these valuators are declared fair and just and properly enlightened in 1911 in fixing the value of this property,—why cannot their judgment be also accepted at the date of the 1913 valuation? Their competency would appear to be equally good in 1913 as it was in 1911. Is such competency divisible? If the valuation of 1911 is accepted, why not accept that of 1913, which is by them fixed at $7,207.317 That would have been the end of .the present controversy. On the other hand, is the optimistic valuation of $3 or $3.52 a foot to be accepted, bringing the value of this property up to over $40,000. Undoubtedly,, in taking this view, the witnesses must have been looking through a magnifying glass at Quebec, that will some day be, but at too far a distance, with too remote capabilities to be presently taken into consideration, and be coupled with the true market value of this property in 1913. And, indeed, why would the Crown be now charged with the enhanced value that the present work it is now carrying on in the harbour of Quebec would some day, in an uncertain distant future, give to these properties in the harbour. And as is so well said, by Rowlatt, J., in Sidney v. North Eastern Railway Co.': "Now, if and so. 1 (1914] 3 K.B. 629 at 637.
VOL. XVII.] EXCHEQUER COURT REPORTS. 45$' • "long as there are several competitors, including 1 916 "the actual taker, who may be regarded 'as, possibly Ta?v ING "in the market for purposes such as those of the PicAan. asons fo "scheme, the possibility of their offering for the Judgment. "land is an element of value in no respect differing "from that afforded by the possibilitÿ of offers for "it for other purposes. As such it is admissible as "truly market value to the owner and not merely "value to the taker. But when the price is reached "at which all. other competition must be taken to "fail, to what can any further value be attributed? "The point has been reached when the owner is ' "offered more than the land is worth to him for his "own purposes, and all that any one else would offer,. "him except one person, the promoter who is now, "though he was not before, freed from competi- "tion. Apart from compulsory powers, the 'owner • "need not sell to that one, and that one would need • "to make higher and yet higher offers. In respecte "of what would he make them? . There can be only "one answer, in respect to the value to him for his , "scheme. And he is only driven to make such offers "because of the unwillingness of the owner to sell "without obtaining . for himself a share in. that "value. Nothing representing this can be allowed." See also the observation of Lord Dunedin in the Cedar Rapids Case.' In the result the only question involved in this case is that of the quantum . of the compensation under the' circumstances. I have had . the advantage, ac- companied by counsel for the respective parties, to visit and view the premises in question, and giving due consideration to the evidence and tô all the cir- 'cumstances of the case, I have come to the conclusion 116 D.L.R. 168, [1914] A.C. 569 at 576.
460 EXCHEQUER COURT REPORTS. [VOL. XVII. 1916 to fix as a fair and liberal compensation the sum of THE K ING v $9,132.20—this amount to cover the value of the PICARD. land taken, the wharf, the damages to the balance Œud.gmén t r of the property remaining in the hands of the defendant, together with all riparian rights attached to such a property. This property having been ostensibly bought for speculative purposes when it was tied up under expropriation proceedings, and upon the expectation of a further and ultimate expropriation, the usual 10% allowed in some cases for the compulsory taking will be refused. While the 10% allowance may be in certain cases allowed when one is forced out of his own premises or some such condition, the present case does not offer any of the elements operating in favour of such allowance. The King v. Mac-Pherson,' Cripps on Compensation,' Browne and Al-lan on Compensation.' Therefore, there will be judgment as follows, viz.; 1st. The lands expropriated herein are declared vested in the Crown from November 8th, 1913. 2nd. The compensation for the lands so expropriated and for all damages whatsoever arising out of or resulting from the said expropriation is hereby fixed at the sum of $9,132.20, with interest thereon from November 8th, 1913, to the date hereof. 3rd. The defendant Picard is entitled to receive from and be paid by the plaintiff, the said sum of $9,132.20, with interest as above mentioned, upon giving to the Crown a good and sufficient title; free from all hypothecs, mortgages, charges and encum- 1 15 Can. Ex. 215, 232, 20 D.L.R. 988. 2 5th Ed. 111. 3 2nd Ed. 97.
VOL. XVII.] EXCHEQUER COURT trances whatsoever, the whole in full sâtisfaction for the land taken and for all damages whatsoever resulting from the said expropriation. 4th. The defendant Picard is also entitled to the costs of the action. Judgment accordingly. * Solicitors for plaintiff : Gibsone & Dobell. . Solicitors for defendant Picard: Laurent, Metayer & Boisvert. r Solicitors for other defendants: ard. * Affirmed on appeal to Supreme Court of Canada, March 26, 1917. ' REPORTS. ' 461 1916 . THZ K/NG v. Reasons for Judgment. Galipeault, St. Morciud & Bav-
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.