



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 Oxfords 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.


