For 26 years, Antrim Truck Centre Ltd. (Antrim) operated a truck stop on Highway 17. Then in 2004, the Province constructed a new highway, and forever altered Highway 17. No longer could motorists access the truck stop – its business was lost and the market value of its land was permanently impacted. Antrim sought compensation from the Province based on the legal principle of "injurious affection." And the Supreme Court granted it.1 It upheld a decision of the Ontario Municipal Board, awarding Antrim $393,000.
The Supreme Court of Canada (Court) set out a legal framework for injurious affection and nuisance claims resulting from the activity of a public authority. The guidelines make one conclusion clear: whether damages are warranted is a factual question. On the upside, the decision confirms that not all interference will attract a claim for compensation; there is little threat of floodgates. On the downside, the principles are deliberately general so as to address whatever unique circumstances may arise in public projects. Other than in extreme cases – where there is, as the Court found here, "significant and permanent interference" – it may be hard to otherwise predict the implications of Antrim, and in particular when the costs of a public project will need to account for interference damages.
The Legal Framework
Under the Ontario Expropriations Act, R.S.O. 1990, c. E. 26, compensation is available where three criteria are made out:
- damages result from an action taken under statutory authority;
- the action would give rise to liability except for the fact that it was taken by a statutory authority; and
- the damage results from the construction rather than the ultimate use of the work.
The decision focuses on the second criterion.
The "actionability" of the public authority’s conduct is a matter of applying the law of private nuisance. A claim in private nuisance requires interference with the use or enjoyment of land that is both substantial and unreasonable. But what does that mean?
The Balance: "Give and Take" vs. a Disproportionate Burden
The Court refrained from identifying indicators or thresholds for substantial interference, which clearly are fact specific, and instead simply confirmed that the interference must be "non-trivial."
The criterion of unreasonableness, is a balancing act, namely, weighing the gravity of the interference against the utility of the public authority’s conduct. To be fair, however, the public utility of a project is not given any special or even equal weight. The Court recognized that to balance the public good as against individual harm, without looking at all relevant factors, would always tip the scales in favour of the public purpose. For that reason, the fact that there is public utility in the Province’s actions can not by itself answer the reasonableness inquiry. "Reasonableness" must ask whether a private citizen should bear the brunt of the interference, not whether it was reasonable for the work to be undertaken:
If [the acts of a public authority are] simply put in the balance with the private interest, public utility will generally outweigh even very significant interferences with the claimant’s land. That sort of simple balancing of public utility against private harm undercuts the purpose of providing compensation for injurious affection. That purpose is to ensure that individual members of the public do not have to bear a disproportionate share of the cost of procuring the public benefit. This purpose is fulfilled, however, if the focus of the reasonableness analysis is kept on whether it is reasonable for the individual to bear the interference without compensation, not on whether it was reasonable for the statutory authority to undertake the work. In short, the question is whether the damage flowing from the interference should be properly viewed as a cost of "running the system" and therefore borne by the public generally, or as the type of interference that should properly be accepted by an individual as part of the cost of living in organized society.2
The Court ultimately described the distinction as between "on one hand, interferences that constitute the "give and take" expected of everyone and, on the other, interferences that impose a disproportionate burden on individuals."3
Of course, not every interference, even if substantial, will automatically be unreasonable. The Court highlighted that one needs to look at the severity of the interference, nature of the neighbourhood, the duration, and sensitivity of the plaintiff – all of which may support the conclusion we are dealing with nothing more than the plaintiff’s "fair share" of the costs associated with providing a public benefit. Key too is the public authority’s reasonable efforts to reduce the impact of its works on its neighbours. Those efforts count in the balance, and should be undertaken.
In the instant case, the Court ordered compensation because the construction of the provincial highway effectively closed the route on which the claimant’s truck stop was located. The interference was clearly substantial and unreasonable because it permanently ended Antrim’s business and reduced the market value of its land. For less extreme types of interference, the guidelines will provide less certainty as to the right to compensation.