A-76-76
Philip Karam and Norma Karam (Appellants)
(Plaintiffs)
v.
National Capital Commission (Respondent)
(Defendant)
Court of Appeal, Jackett C.J., Le Dain J. and
Kerr D.J.—Ottawa, June 13, 14 and 15, 1977.
Expropriation — Valuation — Appeal from Trial Judge's
determination — Effect of nearby land assembly not used to
gauge value Direct highway access to proposed satellite city
overlooked — "Highest and best use" determined but value
accepted by Court based on a different "highest and best use"
— Evidence re valuation reports in affidavits — Federal Court
Rule 482.
The expropriated owner appealed from the judgment of the
Trial Division on the grounds that the Trial Judge erred in
finding that the value of the expropriated property could not be
gauged by amounts paid by a public corporation for lands in a
defined land assembly project and slated for development as a
satellite city. Also, the Judge overlooked the effect of direct
highway access to this proposed city. Both the finding and the
oversight were challenged. Further, the Judge found that the
"highest and best use" of the land was as an estate lot housing
development, and yet accepted a valuation submitted by an
expert who considered the property's "highest and best use" to
be acquisition for speculation. The logic of this course was
disputed for this method could result in a lower valuation.
Held, the appeal is dismissed. There is no basis for interfer
ing with the Judge's conclusion about the effects of the land
assembly project, for it was publicly known that the subject
lands were not to be included. These lands, therefore, would be
affected in a peripheral manner only. The peripheral effect of
the highway on market values outside the proposed city is so
vague and remote as not to materially affect the Judge's
decision. The phrase "highest and best use" applies where the
property to be valued has two uses and the evidence shows,
depending upon the use for which it is appraised, two different
values for it. There is no evidentiary basis for application of the
so-called "highest and best use" rule in this case. The expert's
affidavit should contain sufficiently detailed information con
cerning the expert's reasoning and the party should not be
allowed to give verbal testimony without a supplementary
affidavit.
APPEAL.
COUNSEL:
Hyman Soloway, Q.C., and James L. Shields
for appellants.
Eileen Mitchell Thomas, Q.C., and M. Senzi-
let for respondent.
SOLICITORS:
Soloway, Wright, Houston, Greenberg,
O'Grady & Morin, Ottawa, for appellants.
Legal Adviser, National Capital Commission,
Ottawa, for respondent.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is an appeal by a former
owner from a judgment of the Trial Division in
respect of the value placed on property expropriat
ed under the Expropriation Act, R.S.C. 1970 (1st
Supp.), c. 16.
After giving the best consideration that I can to
the very able argument of counsel for the appel
lants, I have not been persuaded that, on the
evidence before the learned Trial Judge, he was
clearly wrong in not concluding, on a balance of
probability, that the expropriated property had a
value at the time of the expropriation that was
higher than the amount thereof as determined by
him.
With reference to the finding of the learned
Trial Judge that the value of the expropriated
property could not be "gauged" by amounts paid
by the Ontario Housing Corporation for properties
acquired in a defined adjoining area for a satellite
city to be built some 20 years in the future, I can
find no basis for interfering with his conclusion. It
having been made known, by public announce
ment, some 18 or 19 months before the expropria
tion, that the purchasing operation in question was
limited to an area that did not include the expro
priated property, it was, in my view, open to the
learned Trial Judge to find on the evidence that
the knowledge of such purchasing operation would
only affect the market in so far as the expropriated
property was concerned in the peripheral manner
found by him. Moreover, I can see no difference
between the impact of such Ontario Housing Cor-
poration purchases on the market at the time of
the expropriation for the expropriated property
whether such sales were made before the date of
the announcement or were made after the date of
the announcement; from the date of the announce
ment forward, it was known in the market that the
Ontario Housing Corporation was not seeking to
purchase property outside the area designated for
the projected satellite city, and the time as of
which the market had to be assessed was 18 or 19
months after that date.
With reference to the fact that the learned Trial
Judge
(a) found that the highest and best use for the
expropriated property at the time of the expro
priation was for an estate lot housing develop
ment, and
(b) then proceeded to use a valuation by an
expert whose view was that the highest and best
use was acquisition for speculative purposes as a
basis for building up his ultimate valuation,
I am not persuaded that this method was logically
wrong on the evidence that had been put before
him; in any event, as it seems to me, one cannot
conclude on that evidence that adopting this
method resulted in a valuation lower than that
that would have resulted from an approach more
directly related to what the learned Trial Judge
had found to be the highest and best use of the
expropriated property.
The significant fact in this connection is that
knowledge of the "comparable" sales on which the
experts based their opinions in this case appears to
have been, without any significant exception,
obtained from copies of conveyances or agree
ments with no accompanying information as to the
surrounding circumstances or the purposes for
which the properties were acquired. That being so,
it is impossible to say that the values established
were for agricultural, subdivision or speculative
purposes. It follows that it is impossible to say that
the value that the learned Trial Judge used as a
base was not for an estate lot subdivision purpose
or, in any event, was less than value for such
purpose.'
Other criticisms were made by counsel of the
learned Trial Judge's reasoning. Apart from one
error of fact on which the appellants and respond
ent agree, I have not been persuaded that the
appellants have done more than underline their
disagreement with the learned Trial Judge's over
all appraisal of the evidence or the weight that he
has given to certain facts or opinions. With refer
ence to his apparent oversight as to the direct
means of communication between the expropriated
property and the satellite city projected site by
way of an overpass over Highway 417, this causes
me concern, of course, but its importance in the
learned Trial Judge's reasoning—that is the
importance of the failure by defendant experts to
allow for the peripheral effect of the projected
satellite city on market values outside the proposed
area for such proposed city—is so vague and so
remote that I have concluded that it would not
have affected the result even if the learned Trial
Judge had not been guilty of this oversight in his
consideration of what the market would have pro
duced for the land at the time of the expropriation.
For the above reasons, I am of opinion that the
appeal should be dismissed with costs.
I wish to add that a perusal of some of the
affidavits of experts filed in this case leads me to
believe that Rule 482 is being followed by some
counsel, if at all, in the letter rather than the
' As it seems to me there is a tendency to overwork the
phrase "highest and best use" and to distort its significance. It
applies, as I understand it, where property to be valued has two
possible uses and the evidence shows, depending upon the use
for which it is appraised, two different values for it. For
example, the evidence may show that a farm on the edge of a
growing city has an agricultural value of $500 per acre but, by
reason of advancing urbanization, has acquired a value as a
housing development site of $1,000 per acre. In such a case
(leaving aside questions of improvements and disturbance), the
Court must place on the land its value for its "highest and best
use". In this case, as I understand the evidence, the expert
opinions are all based on evidence as to comparable sales of
unimproved or raw land with no information as to the purpose
of acquisition. There does not, therefore, seem to be an eviden-
tiary basis for application of the so-called "highest and best
use" rule.
spirit. 2 Indeed, in my view, the result is much less
satisfactory than in the old days of voluntary
exchange of valuation reports. I strongly suggest
that, when an expert's affidavit does not contain a
sufficiently detailed statement of the expert's rea
soning so that the Court could, in the absence of
attack, adopt that reasoning as its own and decide
the question that is the subject of his evidence on
the basis of it, the party should not be allowed to
supplement it by verbal testimony until a supple
mentary affidavit is filed containing such reason
ing and the other side and the Court have had an
opportunity to consider it. (If that involves
adjournments, costs thrown away should be
assessed against the party at fault.)
* * *
LE DAIN J. concurred.
* * *
KERR D.J. concurred.
2 Rule 482 reads in part:
Rule 482. (1) No evidence in chief of an expert witness
shall be received at the trial (unless the Court otherwise
orders in a particular case) in respect of any issue unless
(b) a full statement of the proposed evidence in chief of
the witness has been set out in an affidavit, the original of
which has been filed and a copy of which has been served
on the other party or parties not less than 10 days before
the commencement of trial, and
(2) Subject to compliance with paragraph (1), evidence in
chief of an expert witness may be tendered at the trial by
(a) the reading of the whole of the affidavit referred to in
paragraph (1), or such part thereof as the party decides to
use at the trial, into evidence by the witness (unless the
Court, with the consent of all parties, permits it to be
taken as read), and
(b) if the party so elects, verbal testimony by the witness
(i) explaining or demonstrating what is in the affidavit
or the part thereof that has been so put into evidence, as
the case may be, and
(ii) otherwise, by special leave of the Court subject to
such terms if any as seem just.
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.