Compensation for Land
Who Decides the Final Value?
Published February 2, 2019
Associated Areas of law
In all jurisdictions in Canada, if the authority and the landowner cannot reach an agreement on compensation, the parties have a right to have the issue determined. In some Provinces (Nova Scotia, Manitoba and Ontario, for example) have specialized tribunals that hear expropriation cases. In other Provinces (New Brunswick, Newfoundland and Prince Edward Island, for example) the Superior Court hears the cases. The forum in which a case is heard is determined by the governing expropriation legislation of the specific Province.
The feature in common in all jurisdictions in Canada is that the issue of determining the amount of compensation is left completely to the Court or tribunal. That means that the Court or tribunal has the power to hear evidence in accordance with the particular rules of evidence that each has adopted. Evidence can be provided by way of oral testimony, documents, expert reports, hearsay, demonstrative evidence, etc. The Court or tribunal decides what evidence to accept, reject or what use it will make of it.
In all expropriation cases where the value of land is in issue, the parties retain a professional real estate appraiser to give an opinion on the value of the land taken and the value of the injurious affection to the remaining lands. As we have discussed in previous blog entries, the appraisers can use a variety of methods to reach their opinions of value. Their opinions are set into reports that are entered as evidence at the hearing. In assessing the value of each side’s appraisal report, the Court or tribunal will assess many factors, including: whether or not the appraiser’s highest and best use analysis is acceptable; whether or not the comparable sales used to determine value were appropriate, that is, were they truly comparable; the appraiser’s ability; whether or not the appraiser used the appropriate methodology in his or her report; among other factors.
In the vast majority of cases, the Court or tribunal chooses whichever appraisal report is the most appropriate and assigns that value as compensation. However, a Court or tribunal is not required to choose either appraisal report: it is completely within their jurisdiction to reject all expert evidence or any portion of the expert evidence, and assign its own value to for compensation. The Court or tribunal must base its own assessment on evidence that was before it at the hearing, but if that legal requirement is met, the decision will be a proper one and not easily overturned on appeal.
This discretion that a Court or tribunal can exercise requires expropriation lawyers presenting cases to be very familiar with the rules of evidence and the forms of evidence that establish the value of land or injurious affection. It is not enough to simply lead an appraisal report and be content with that. The evidence establishing comparable sales, legal permissibility, physical possibility and other elements of value must be placed before the Court or tribunal and preferably from independent sources outside of the landowner and the appraiser. These are pitfalls that can lead to disastrous results for their clients.
If you have questions or would like to discuss this topic further, please contact Robert H. Pineo.
Please note that this article is meant to provide information only and is not intended to confer legal advice or opinion. If you have any further questions please consult a lawyer. Please note as well that many of the statements are general principles which may vary on a case by case basis.