T-1807-84
Frank F. Ramey, M.D. (Plaintiff)
v.
The Queen in right of Canada (Defendant)
INDEXED AS: RAMEY v. CANADA
Trial Division, McNair J.—Fredericton, May 27,
28, 29 and 30; Ottawa, October 27, 1986.
Air law — Action for compensation for injurious affection
caused by enactment of Fredericton Airport Zoning Regula
tions — Flightway easement reserved — Validity thereof —
Easement neither vague nor uncertain — Beyond doubt height
servitude restriction running for benefit of airport — Plaintiff
entitled, as incident of ownership, to use of subjacent property
re buildings and trees — Property value decreased — Com
pensation allowed — Aeronautics Act, R.S.C. 1970, c. A-3, s.
6(1)(j),(10) — Fredericton Airport Zoning Regulations,
SOR/81-452, ss. 4, 5, 6.
Expropriation — Injurious affection — Fredericton Airport
Zoning Regulations — Property value decreased due to enact
ment of Regulations — Appraisal evidence in conflict —
Compensation set at $22,600 — Fredericton Airport Zoning
Regulations, SOR/81-452, ss. 4, 5, 6.
Real property — Easements — For flightway and to enter
for removal of trees — Whether void for uncertainty —
Abandonment — Non-user not giving rise to presumption of
abandonment — Obtaining permission to cut trees and pay
ment of compensation not conclusive easement abandoned.
The plaintiff claims compensation for injurious affection to
his property occasioned by the enactment of the Fredericton
Airport Zoning Regulations. The plaintiff is the owner of a
54.3-acre property situated near the end of runway 27 of the
Fredericton Airport. The property was acquired in 1951 by the
plaintiffs brother from the City of Fredericton, owner of the
municipal airport, and subsequently conveyed to the plaintiff in
1962. The deed of sale reserved unto the grantor a flightway
easement and a right to enter upon the premises to remove
obstructive trees. It also prohibited the grantee from construct
ing any building that would interfere with use of the easement.
In 1962, the City conveyed the airport to the federal Crown.
The latter's servants entered the premises on a number of
occasions to do some tree topping. The operation was con
sidered necessary in order to comply with the 2% slope
approach which had been a policy requirement since the exten
sion of the runway in 1957.
The plaintiffs case is that subdivision development potential
of his land was sterilized by the enactment of the zoning
regulations and that the 2% slope approach policy was made
known neither to him nor to the general public until notice of
the zoning regulations was published in the newspaper in
October 1982. It was further argued that the flightway ease-
ment of 1951 was void for uncertainty or had been abandoned.
The defendant says that enactment of the zoning regulations
changed nothing. The value of the land was not decreased since
its highest and best use was for agricultural purposes. The
defendant further urges that plaintiff had no proprietory right
to the air space comprising the 2% approach slope over hisland,
citing in support Lacroix, Jean v. The Queen, [1954]
Ex.C.R. 69.
Held, the plaintiff should have judgment for compensation in
the amount of $22,600 plus costs.
It follows from Lacroix v. The Queen that while the plaintiff
cannot claim physical ownership of the air space, he would have
some proprietary right, as an incident of ownership, to the use
and enjoyment of his subjacent property with respect to the
buildings and trees thereon and the height to which these can
be extended or permitted to grow. The question of the validity
of the flightway easement thus assumes some importance.
The easement imposes a servitude not on the air space but on
the servient lands which were specifically described in the deed.
In the case of an express grant or reservation of easement the
nature and extent of the right conferred is a question of
construction. In the present case, the parties' intention was to
create a legal easement. The restrictive covenant identified the
subject-matter of the grant; it put beyond question that the
general height restriction servitude was to run for the benefit of
the Fredericton Airport lands. Given the context and consider
ing the operative words of the grant in their ordinary and
grammatical sense, it could not be said that the reservation of
the easement was void for uncertainty.
With respect to the question of abandonment, the principle is
clear: an easement created by express grant can only be lost by
non-user where such non-user raises a presumption of a release,
and the onus is on the person alleging abandonment to establish
such presumed non-user. There had been no abandonment by
defendant of the flightway easement.
The matter of compensation for injurious affection to prop
erty resulting from the enactment of airport zoning regulations
had been canvassed in several cases. Compensation was allowed
in all of them. As stated in Roberts and Bagwell v. The Queen,
[1957] S.C.R. 28, "Vertical regulation is necessary in the
vicinity of airports .... It becomes at once a burden on the land
and the resulting diminution in value is a proper subject for
compensation". The plaintiff's property had suffered a decrease
in value but the appraisal evidence was conflicting so that the
Court had to make a determination as to the quantum of
compensation to be awarded.
CASES JUDICIALLY CONSIDERED
APPLIED:
Roberts and Bagwell v. The Queen, [1957] S.Ç.R. 28;
Canada Steamship Lines Ltd. v. The Queen, [1956-1960]
Ex.C.R. 277; C.J.R.T. Developments Ltd. v. The Queen,
[1983] 2 F.C. 410; 145 D.L.R. (3d) 416 (T.D.).
CONSIDERED:
Lacroix, Jean v. The Queen, [1954] Ex.C.R. 69; Lis -
combe v. Maughan, [1928] 3 D.L.R. 397 (Ont. S.C.);
Vyricherla Narayana Gajapatiraju (Raja) v. Vizagapa-
tam, Revenue Divisional Officer, [1939] A.C. 302 (P.C.).
REFERRED To:
Ellenborough Park, In re. In re Davies, decd. Powell v.
Maddison, [1956] Ch. 131 (C.A.); Ward v. Ward (1852),
7 Ex. 838; 155 E.R. 1189; Crossley & Sons, Limited v.
Lightowler (1867), L.R. 2 Ch. 478; Lamb v. Manitoba
Hydro-Electric Board, [1966] S.C.R. 229; 55 D.L.R.
(2d) 654.
COUNSEL:
David R. Oley for plaintiff.
A. R. Pringle and Martin Ward for
defendant.
SOLICITORS:
Mockler, Allen & Dixon, Fredericton, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
McNAIR J.: This is an action brought under
subsection 6(10) of the Aeronautics Act, R.S.C.
1970, c. A-3, (the "Act") wherein the plaintiff
claims compensation for injurious affection to his
property occasioned by the operation of the Fred-
ericton Airport Zoning Regulations, SOR/81-452
dated June 8, 1981 (the "Regulations").
Subsection 6(10) of the Act reads:
6....
(10) Every person whose property is injuriously affected by
the operation of a zoning regulation is entitled to recover from
Her Majesty, as compensation, the amount, if any, by which
the property was decreased in value by the enactment of the
regulation, minus an amount equal to any increase in the value
of the property that occurred after the claimant became the
owner thereof and is attributable to the airport.
Plans and descriptions of the lands affected by
the zoning regulation and copies of the Regula
tions were filed in the Registry Offices for the
counties of York and Sunbury on September 20,
1982. It is common ground that this date can be
taken as the effective date of the Regulations for
purposes of the case.
The plaintiff, Dr. Frank Ramey, is the owner of
the Belmont property, so-called, containing
approximately 54.3 acres, situated in the Parish of
Lincoln in the County of Sunbury and Province of
New Brunswick, near the end of runway 27 of the
Fredericton Airport. The property comprises two
parcels of land fronting on either side of provincial
Highway 102. The larger parcel of some 48.2 acres
extends back from the highway in a northerly
direction to the Saint John River. The remaining
triangular parcel of some 6.07 acres lies on the
southerly side of the highway. An Irving service
station is located at the southeasterly corner of the
larger parcel, having been subdivided therefrom
some years previously. All of the buildings are
contained on the larger, northerly portion of the
Belmont property. These comprise a main house of
two storeys, designated as an historic site, ma
chinery shed, workshop, warehouse and small
dwelling house or cottage. There were apple
orchards on the Belmont property when the plain
tiff first acquired it. This agricultural use has been
continued and developed over the years and there
are presently four apple orchards under cultivation
in the northerly parcel, having a total area of
approximately 11.9 acres.
The lands for the municipal airport were assem
bled by the City of Fredericton by compulsory
acquisition over the period from 1948 to 1951. In
the spring of 1951, the City authorized the sale by
tender of the Belmont property, subject to a flight-
way easement. Pursuant to subsequent resolution
of council, Roy A. Ramey purchased the Belmont
property for himself and his brother, Frank F.
Ramey, at the tendered price of $9,000. Title was
taken in Roy's name alone. The two Belmont
parcels were described by metes and bounds in the
deed of conveyance, the larger parcel being
described as Lot No. 2 of Parcel E and the smaller
one as Parcel D, both as shown on a plan of
Fredericton Municipal Airport prepared by J.
Brown Maxwell, N.B.L.S., in March 1951. The
deed dated June 6, 1951 reserved the following
flightway easement:
RESERVING unto the Grantor, its Successors and Assigns for
ever an easement over the said lands and premises hereinbefore
described adequate and necessary for the operation of the said
Airport, together with the right to enter upon the lands and
premises hereinbefore conveyed and by its agents, servants,
workmen or contractors to remove from the said lands and
premises all trees and bushes which may interfere in any way
with the said easement.
The deed also contained the following restrictive
covenant on the part of the grantee, Roy A.
Ramey, viz.:
AND THE GRANTEE, for himself, his Heirs, Executors,
Administrators and Assigns, covenants and agrees that he will
not construct nor permit to be constructed upon the lands
hereinbefore described any buildings or erections of any kind
whatsoever or do any act or thing that will in any way interfere
with the enjoyment or use of the said easement hereinbefore
reserved.
The Fredericton Airport was in active operation
at the time of the Ramey deed. Runway 27 was
well under way, if not then in existence. An aerial
photograph of October 10, 1951 shows that
runway 27 was in actual existence at that time.
By deed of June 9, 1951 Roy A. Ramey con
veyed the Belmont property to his sister, Mary
Ramey, subject to the same reservation of flight-
way easement. The deed also exacted a warranty
covenant from the grantee to keep and observe the
restrictive covenant in the deed from the City of
Fredericton to Roy A. Ramey and to indemnify
the latter from any and all claims and demands
whatsoever in respect thereof.
Pursuant to an agreement of March 31, 1960
with the Department of Transport, the City of
Fredericton conveyed the municipal airport prop
erty to Her Majesty the Queen in right of Canada
by deed dated April 11, 1962. The Belmont prop
erty was excepted, inter alia, from the lands there
by conveyed.
Mary Ramey conveyed Belmont to her brother,
Dr. Frank F. Ramey, by deed dated July 15, 1963,
subject to the same reservation of flightway ease-
ment and the restrictive covenant contained in the
initial deed from the City of Fredericton to Roy A.
Ramey.
Dr. Ramey left private practice in 1952 to
accept an overseas medical posting with the
Department of Health and Welfare. He served
abroad for the next twenty years, mostly in Rome.
The plaintiff returned to Fredericton in 1972.
During the period of the plaintiff's absence
abroad, the dwelling house and small cottage on
the Belmont property were rented to various ten
ants. The apple orchard was rented for a few years
to a commercial grower and thereafter was
managed for the plaintiff. The rental and manage
ment arrangements were looked after in the main
by the plaintiff's family members, initially by his
sister, Mary Ramey, and afterwards for the most
part by the plaintiffs daughter, Nancy Findlay
and her husband, Dr. John A. Findlay. The small
cottage on the property was vacant on many occa
sions over the years because of the difficulty in
finding tenants who would tolerate the noise of
aircraft landing on and departing from runway 27.
The plaintiff sold the service station parcel in 1960
for $11,000 with a view to establishing an indica
tor of fair market value for the whole Belmont
property. The apple orchard earned a respectable
profit for most of the years.
The plaintiff purchased the Belmont property as
an investment but he took no active steps to de
velop it as a housing development or residential
subdivision. At one time he had some discussion
with his son-in-law, Dr. Findlay, about the possi
bility of contracting stone dwelling houses on the
property. This seems to have been primarily
dependent on the prospect of purchasing a nearby
stone quarry. Matters never got beyond the stage
of discussion. Any plans for ultimate residential
development remained in his mind. The reasons
given for this were his long period of overseas
service, the fact that his children were not interest
ed in pursuing developmental plans, and a marked
deterioration in his health beginning about 1976.
In 1957, the defendant's servants went on the
plaintiffs property without permission and cut
down some obstructive trees. These comprised a
row of ornamental cedars leading from the high
way to the main dwelling house and some large
elms on the property. The plaintiff was outraged.
The services of a solicitor were retained and the
claim was eventually settled. The defendant had
futher occasion in 1967, 1974, 1975 and 1984 to
cut or top trees on the plaintiffs property for
which it obtained permission and paid compensa
tion, at his insistence. This tree topping was con
sidered necessary by the defendant in order to
comply with the 2% slope approach, which had
been operative as a policy requirement since before
1957. Runway 27 was extended by some 1,150 feet
in 1957. This extension had the effect of lowering
the existing 2% slope by 26 feet over the plaintiffs
property.
The whole matter of the flightway easement and
the compensation payable to the plaintiff for entry
on his property and cutting of trees had been the
subject of discussion and negotiation between the
Department of Transport and the plaintiffs solici
tor, H. A. Hanson, Q.C., starting in 1957 and
extending over the next several years. In 1960, the
plaintiff's daughter, Shirley Rayes, was serving
articles with Mr. Hanson. At her principal's
request, she attended a meeting between him and
two officials from the Department of Transport,
Messrs. Cormier and MacLeod, who acknowl
edged at one stage of the discussions that the
flightway easement in the City of Fredericton deed
was void for uncertainty. In 1961 the Department
of Transport acquired from the plaintiff an
approach light easement near the small cottage on
the Belmont property. The plaintiff was fully
aware of the prior flightway easement over the
property from the time of the sale by the City to
his brother and himself in 1951.
The volume of air traffic at the Fredericton
Airport has steadily increased over the years, sub
ject to short-term fluctuations, and the aircraft
utilizing the same have become larger and noisier.
Jet aircraft have been landing and taking off at the
airport since about 1974. The largest aircraft using
the airport before that was the Viscount. The
plaintiffs lands and premises are immediately
adjacent to the Fredericton Airport and are within
and beneath the approach surface to runway 27.
In February 1983, Dr. Ramey gave permission
to the defendant to have an appraisal done of his
property with a view to establishing its fair market
value. There had been some suggestion that the
defendant might be interested in purchasing the
property as a means of assuring the safe operation
of the airport. David F. Hildebrand, A.A.C.I.,
inspected the larger parcel of the Belmont prop
erty on February 10, 1983 and shortly thereafter
submitted his appraisal to Public Works Canada.
The appraisal put the fair market value of this
parcel at $140,000, inclusive of buildings and a
separate valuation of $19,000 for the orchard.
Nothing came of this and at a meeting between
the parties on or about November 22, 1983 the
defendant advised that it was not interested in
purchasing the plaintiff's property.
Action was instituted by the plaintiff's solicitors
on August 28, 1984 claiming "damages" for
injurious affection to the plaintiff's property by the
enactment and operation of the Fredericton Air
port Zoning Regulations. Damages is obviously a
misnomer. The statutory right afforded is one to
compensation for injurious affection to property by
the operation of a zoning regulation where the
measure of compensation, leaving aside any
increase in value, is the amount by which the
injuriously affected property was decreased in
value by the enactment of the regulation.
In July 1985 Mr. Hildebrand was commissioned
by Public Works Canada to make a separate
valuation of the triangular parcel on the southerly
side of Highway 102 and also to provide a supple
mental report on the highest and best use of the
Ramey property from the standpoint of prospec
tive residential development. He submitted sepa
rate reports on these topics under date of August
29, 1985.
The plaintiff engaged the services of Clifford W.
Lawrence, A.A.C.I., of deStecher, Miller &
Associates Limited, for his appraisal. Mr. Law-
rence submitted an interim report dated August
23, 1984 which set the damages for injurious
affection to the subject property at the figure of
$36,000. The plaintiff and his family were insist
ent that the property had been undervalued. By
November 1984 Lawrence yielded to the extent of
recognizing minor deficiencies, particularly with
regard to misinformation about the purchase price
of the Breen property. He increased this compa
rable by 60% and revised his compensation figure
upward to $45,000. His final report of May 8,
1986 confirmed the figure for damages for injuri
ous affection at $45,000.
The empowering provision for the zoning regu
lation in this case is paragraph 6(1)(j) of the
Aeronautics Act, which reads substantially as
follows:
6. (1) Subject to the approval of the Governor in Council, the
Minister may make regulations ... with respect to
(j) the height, use and location of buildings, structures and
objects, including objects of natural growth, situated on lands
adjacent to or in the vicinity of airports, for purposes relating
to navigation of aircraft and use and operation of airports,
and including, for such purposes, regulations restricting,
regulating or prohibiting the doing of anything or the suffer
ing of anything to be done on any such lands, or the
construction or use of any such building, structure or object;
The provisions of the Fredericton Airport
Zoning Regulations that are germane to the issue
are as follows:
General
4. No person shall erect or construct on any land to which
these Regulations apply, any building, structure or object or
any addition to any existing building, structure or object, the
highest point of which will exceed in elevation at the location of
that point, any
(a) approach surface;
(b) outer surface; or
(c) transitional surface.
Natural Growth
5. Where an object of natural growth on any land to which
these Regulations apply exceeds in elevation any of the surfaces
referred to in section 4, the Minister may make a direction that
the owner or occupier of the land on which that object is
growing remove the excessive growth.
Disposal of Waste
6. No owner or occupier of any land to which these Regula
tions apply shall permit that land or any part of it to be used
for the disposal or accumulation of any waste, material or
substance edible by or attractive to birds.
The basic issue in the case is whether and to
what extent, if any, the plaintiff's lands have been
decreased in value by the enactment of the Fred-
ericton Airport Zoning Regulations.
The central theme of the plaintiff's argument is
that his land had a prospective advantage for
ultimate subdivision development in the foresee
able future which was completely sterilized by the
enactment of the zoning regulations. Counsel for
the plaintiff maintains that the 2% slope was never
made known to the plaintiff or the public generally
until the enactment of the zoning regulations and
the publication of notice thereof in the local news
paper on October 25, 1982. Until then its existence
was known only to the bureaucracy of the Depart
ment of Transport. The only zoning regulation
which prejudicially affected the subject lands was
the one enacted on June 8, 1981. In support of
this, plaintiff's counsel advances the corollary
argument that the flightway easement over the
plaintiff's land, going back to the deed of 1951,
was void for uncertainty or, failing that, was inef
fectual by reason of abandonment.
The defendant's case in a nutshell is that noth
ing was changed by the enactment of the zoning
regulations. The highest and best use of the plain
tiff's property immediately before their enactment
was the use to which it was being put, namely,
agricultural and the zoning regulations did nothing
to change that. Hence, there was no decrease in
value. Counsel for the defendant made the further
submission in the course of argument that the
plaintiff had no proprietary right to the air space
comprising the 2% approach slope over his prop
erty, citing in support Lacroix, Jean v. The Queen,
[1954] Ex.C.R. 69.
With respect, I consider that this submission is
irrelevant to the case at bar, save only in so far as
it may have some bearing on the highest and best
use of the plaintiff's property as determinative of
its market value at the material time. The plaintiff
never laid claim to the air space over his land.
What he complains of is the decrease in value of
his property by the enactment of the zoning
regulations.
Lacroix v. The Queen, supra, granted compen
sation for the expropriation of an approach light
easement to runway 24 of the Dorval Airport and
injurious affection to the suppliant's remaining
land but denied the suppliant's claim for damages
for a flightway easement through the air space
over his land. Mr. Justice Fournier implicitly
rejected the cujus est solum maxim of the Middle
Ages, which being literally translated means that
whoever owns the soil owns all that lies above it,
and went on to state the applicable principle at
page 76 as follows:
In my view, air and space are not susceptible of ownership
and fall in the category of res omnium communis, which does
not mean that the owner of the soil is deprived of the right of
using his land for plantations and constructions or in any way
which is not prohibited by law or against the public interest.
It seems to me that the owner of land has a limited right in
the air space over his property; it is limited by what he can
possess or occupy for the use and enjoyment of his land. By
putting up buildings or other constructions the owner does not
take possession of the air but unites or incorporates something
to the surface of his land. This which is annexed or incorpo
rated to his land becomes part and parcel of the property.
It follows that while the plaintiff cannot claim
physical ownership to the air space above his
property he would have some proprietary right, as
an incident of his ownership, to the use and enjoy
ment of his subjacent property with respect to the
buildings and the trees or other objects of natural
growth situate, lying and being thereon and the
height to which these can be extended or permitted
to grow. This is why the question of the validity of
the flightway easement of 1951 assumes some
importance.
It is said that the easement is void for uncertain
ty. Wherein lies the uncertainty? It is true that the
easement does not purport to specifically define a
column or segment of the air space lying over the
servient lands of the plaintiff in the same sense as
the 2% slope was defined or made ascertainable by
the zoning regulations enacted on June 8, 1981.
The easement imposes a servitude not on the air
space but rather on the servient lands and premises
themselves in terms of what was "adequate and
necessary for the operation of the said Airport".
The easement also gives a right of entry on the
said lands with the right to remove all trees and
bushes which might interfere in any way with the
easement. The restrictive covenant in the deed of
1951 enjoined against the construction of buildings
or the doing of anything that would "in any way
interfere with the enjoyment or use of the said
easement hereinbefore reserved". The servient
lands were specifically described in the deed.
Ellenborough Park, In re. In re Davies, decd.
Powell v. Maddison, [1956] Ch. 131 (C.A.) held
that the grant of "the full enjoyment of the pleas
ure ground" comprising a garden park was a right
known to law and a valid easement.
In the case of an express grant or reservation of
easement the nature and extent of the right there
by conferred becomes a question of construction. It
appears from the conveyance that the parties
intended at least to create a legal easement. The
right was described in terms as an easement.
Moreover, the restrictive covenant further identi
fies and buttresses the subject-matter of the grant
of easement and puts beyond question that the
general height restriction servitude was to run for
the benefit of the Fredericton Airport lands.
Taking the easement in its entire context and
construing the operative words of grant according
to their ordinary and grammatical sense, I find
nothing that would make the reservation of the
flightway easement void for uncertainty.
What of the question of abandonment?
There is no presumption of abandonment of
easement arising from the mere fact of non-user.
The principle is clear that an easement created by
express grant can only be lost by non-user where
such non-user raises a presumption of release, and
the onus is on the person alleging abandonment to
establish such presumed non-user; Ward v. Ward
(1852), 7 Ex. 838; 155 E.R. 1189; Crossley &
Sons, Limited v. Lightowler (1867), L.R. 2 Ch.
478, at page 482; and Liscombe v. Maughan,
[1928] 3 D.L.R. 397 (Ont. S.C.).
Grant J.A., stated the principle in Liscombe at
page 402:
The onus of establishing the loss of extinction of the right of
way by abandonment or non-user rests upon the defendants.
The authorities are reviewed in Goddard on the Law of Ease-
ments, 8th ed., pp. 520, et seq. The author sums up the effect of
the authorities in the following words (p. 520):—"From this it
is apparent that the only way in which an easement can be
extinguished by the act of the parties interested is by release,
actual or presumed; that non-user will not have that effect
unless a release can be implied from such non-user and the
surrounding circumstances; and that when an easement is
spoken of as having been lost by abandonment, it is intended
that the circumstances are such that a release is to be pre
sumed." Non-user may be explained by showing that the owner
of an easement had for the time no occasion to use it, he having
other and more convenient means of employing his land than
when the easement was of use:
On the basis of this authority, I find that there
was no abandonment of the flightway easement by
the defendant. The only scintilla of evidence to
suggest the contrary is the obtaining of permission
to cut and top the trees from the plaintiff's prop
erty and the payment of compensation therefor,
starting in 1957. In my opinion, that is not only
entirely inconclusive but rather is quite explicable
by the fact that the easement itself made no
provision for compensation.
There are several leading authorities dealing
with the matter of compensation for injurious
affection to property resulting from the enactment
of airport zoning regulations: see Roberts and
Bagwell v. The Queen, [1957] S.C.R. 28; Canada
Steamship Lines Ltd. v. The Queen, [1956-1960]
Ex.C.R. 277; and C.J.R.T. Developments Ltd. v.
The Queen, [1983] 2 F.C. 410; 145 D.L.R. (3d)
416 (T.D.). In all of them compensation for injuri
ous affection was allowed.
In the Roberts and Bagwell case, Nolan J., said
at page 38:
The purpose of the statute is clear. Vertical regulation is
necessary in the vicinity of airports and the vesting of the
powers mentioned operates with an immediate effect on the use
and value of the land. It becomes at once a burden on the land
and the resulting diminution in value is a proper subject for
compensation.
Thorson P., made this significant statement in
Canada Steamship Lines Ltd. v. The Queen,
supra, at pages 284-285:
It is for the decrease of such value by the enactment of a zoning
regulation that the owner of property injuriously affected by its
operation is entitled to compensation under section 4(8) of the
Act. Put in other terms, the decrease in value for which he is
entitled to compensation is the difference between the amount
which the prudent purchaser referred to would have been
willing to pay for the property after the enactment of the
regulation and that which he would have been willing to pay for
it before its enactment.
And it is axiomatic that the suppliant is entitled to have such
value and its decrease determined on the basis of the most
advantageous use, whether present or prospective, to which its
property could have been put immediately prior to the enact
ment of the Regulations. It is also clear that in determining
such most advantageous use the Court must not limit itself to
the actual use to which the owner has put his property. It is the
most advantageous use to which it could have been put that is
to be considered. In my opinion, the best statement of the
applicable principle was made in Nichols on Eminent Domain,
2nd Edition at page 665, where the author said:
In determining the market value of a piece of real estate
for the purpose of a taking by eminent domain, it is not
merely the value of the property for the use to which it has
been applied by the owner that should be taken into consider
ation, but the possibility of its use for all purposes present
and prospective, for which it is adapted and to which it might
in reason be applied, must be considered, and its value for the
use to which men of prudence and wisdom and having
adequate means would devote the property if owned by them
must be taken as the ultimate test.
While this statement was expressly applicable to the determina
tion of market value for the purpose of a taking by eminent
domain I consider it equally applicable to the determination of
the value and decrease of value referred to in section 4(8) of the
Act and I so find.
Lord Romer made a classic statement about
future potentiality in Vyricherla Narayana
Gajapatiraju (Raja) v. Vizagapatam, Revenue
Divisional Officer, [1939] A.C. 302 (P.C.), cited
with approval in Lamb v. Manitoba Hydro-Elec
tric Board, [ 1966] S.C.R. 229; 55 D.L.R. (2d)
654, when he said at page 313:
For it has been established by numerous authorities that the
land is not to be valued merely by reference to the use to which
it is being put at the time at which its value has to be
determined ... but also by reference to the uses to which it is
reasonably capable of being put in the future. No authority
indeed is required for this proposition. It is a self-evident one.
No one can suppose in the case of land which is certain, or even
likely, to be used in the immediate or reasonably near future for
building purposes, but which at the valuation date is waste land
or is being used for agricultural purposes, that the owner,
however willing a vendor, will be content to sell the land for its
value as waste or agricultural land as the case may be. It is
plain that, in ascertaining its value, the possibility of its being
used for building purposes would have to be taken into account.
It is equally plain, however, that the land must not be valued as
though it had already been built upon, ... sometimes expressed
by saying that it is the possibilities of the land and not its
realized possibilities that must be taken into consideration.
[Emphasis added.]
In C.J.R.T. Developments Ltd., supra, Marceau
J., summed up the effect of the statutory provision
in this way at pages 422 F.C.; 425-426 D.L.R.:
Subsection 6(10) of the Act gives the landowner a right to
recover as compensation the amount by which his property has
been decreased in value by the enactment of some airport
zoning regulations. The right created by this provision is obvi
ously meant to exist and be enforceable as soon as the regula
tions referred to are enacted ... .
The expert appraisers for the parties were in
substantial agreement on matters pertaining to the
nature and general location of the subject property
and the relevant zoning requirements in relation to
its present or prospective use. Interestingly
enough, each of them utilized the same sales com-
parables. Both were agreed that the value of the
property in its present agricultural use was in the
range of $45,000. They were in agreement as to
their definitions of highest and best use but their
criteria for determining the same differ markedly.
The plaintiff's expert, Mr. Lawrence, placed more
emphasis on the prospective use to which a prop
erty might be reasonably put in the foreseeable
future rather than its actual use at the time of
valuation. He viewed the matter more from the
standpoint of future use potentiality. The
defendant's expert, Mr. Hildebrand, was less ven
turesome in this regard. He considered that the use
must be within the realm of likely possibility and
not be one which was merely speculative or conjec
tural. In addition, the demand for such a use must
presently exist. Both experts were generally agreed
that the proximity of the subject property to the
Fredericton Airport would have something of a
detrimental effect on its subdivision potentiality.
Mr. Lawrence's favoured approach was to divide
the Belmont property into eleven residential build
ing lots of the requisite acreage and road frontage.
He then determined that these lots could yield a
net return of $88,000 or $8,000 per lot, after
development costs had been deducted. He based
this result in the main on his highest sales compa
rable equivalent of $1,621 per acre.
Taking his four sales comparables, Lawrence
estimated the after-value of the land at $800 per
acre on 54.3 acres, or $43,400. The deduction of
this value from the prospective residential value of
$88,000 gave the rounded figure of $45,000 as the
measure of compensation for injurious affection
attributable to the zoning regulations. Mr. Law-
rence admitted under cross-examination that the
nearby airport would diminish the value of the
property for residential purposes but nevertheless
he held to the view that the property still had some
residential potential. It was a basic premise of the
Lawrence appraisal that the flightway easement of
1951 was invalid. It came out on cross-examina
tion that he had been so instructed by the plain
tiff's solicitor.
Mr. Hildebrand's first report was submitted as .a
fair market valuation of the land, buildings and
orchards of the Belmont property, excluding the
triangular portion on the southerly side of the
highway. He subsequently valued this parcel at
$3,500. His second look at the Belmont parcel led
him to conclude that there was no foreseeable
subdivision potentiality because the supply of supe
rior residential building lots in the surrounding
area was amply sufficient to satisfy the current
housing demand. The highest and best use of
Belmont continued to be agricultural. In his opin
ion, nothing had changed. He amplified this in his
affidavit of opinion by averring that the presence
of the airport and the use of runway 27 for many
years, coupled with the availability of superior
land, "prevented the existence of any potential for
the residential development of the property". The
affidavit further opined that the enactment of the
zoning regulations did nothing to change what had
existed previously. Hildebrand admitted on cross-
examination that he had no reason to doubt the
efficacy of the Lawrence scheme of subdividing
the property into eleven building lots. He qualified
this by asserting that he did not believe that any
significant demand would exist for such subdivided
lots. He also admitted under cross-examination
that any subdivided lots could have a present value
of $12,000 per lot, absent the airport, but that a
very significant reduction factor would have to be
applied to backdate this value to the time of
enactment of the zoning regulations because of the
recessive economic conditions then pertaining.
Hildebrand was unshaken by cross-examination
from his adamant belief that with or without the
zoning regulations the highest and best use of the
subject property was agricultural use.
Mr. Lawrence did an analysis of the actual
impact of the zoning regulations in terms of height
restrictions. He noted that the airspace remaining
to the property owner ranged from 16 feet to 120
feet over the property area with the result that the
available building heights range from 17 feet to 47
feet over the southerly triangular portion and
from 16 feet to 70 feet over the front 24.2 acres of
the northerly tract of Belmont between the high
way and the river. He concluded from this that
while the actual building height limitations did not
preclude residential construction over more than a
relatively small portion of the property the pub
lished heights were so low as to discourage such
construction for the foreseeable future. This led
him to the conclusion that the highest and best use
of the property after enactment of the zoning
regulations was continuing agricultural use. I
accept his evidence in this regard.
As often happens with appraisals, we have the
case of two proficient expert witnesses arriving at
totally different conclusions. I must either accept
one or the other or endeavour to reconcile the
differences as best I can.
It seems to me that Mr. Hildebrand overempha
sized the factors of present demand and current
economic conditions in his appraisal of the prop
erty and ignored or glossed over the essential
element of advantageous prospective use in the
foreseeable future. Shortly stated, he viewed the
problem in terms of actuality rather than poten
tiality. With respect, I consider that he erred in his
approach of overplaying the actual and downplay
ing the potential. Undoubtedly, the proximity of
the property to the airport had to have a deleteri
ous effect which, together with the availability of
superior residential lots, would make the subdivi
sion potentiality far less attractive to a prospective
developer than would otherwise have been the
case. Nonetheless, it is my opinion that these
limiting factors were not so overpowering immedi
ately prior to the enactment of the zoning regula
tions as to lead men of prudence and wisdom and
having adequate means at their disposal to rule out
any possibility of prospective subdivision develop
ment in the foreseeable future. Consequently, I am
unable to accept Mr. Hildebrand's conclusion that
nothing was changed by the enactment of the
Fredericton Airport Zoning Regulations.
On the other hand, I cannot accept Mr. Law-
rence's compensation amount of $45,000 for sever
al reasons. Firstly, he premised his appraisal,
through no fault of his own, on the mistaken
assumption that the flightway easement of 1951
was invalid. I have found to the contrary so the
supporting foundation for this postulate is swept
away. I am sure that he would be the first to admit
that this would have to affect his appraisal figure.
Secondly, he chose his $8,000 per lot price from
the highest but one of the six sale prices for
residential building lots indicated in his report. A
comparable lot on the Nevers Road requiring fill
and a 200-foot well sold in September 1983 for
$6,000. This is closer to the subject property than
the lot in Lincoln Park Gardens, which sold in
May 1982 for $8,000 and fell within Mr. Hilde-
brand's category of a superior type building lot.
Finally, and perhaps least important, Mr. Law-
rence yielded to pressure from his client to
upgrade his valuations.
In the result, I find that the plaintiff's property
suffered a decrease in value by the enactment of
the Fredericton Airport Zoning Regulations and
that he is entitled to recover compensation for the
injurious affection thereto. I am unable to accept
the final conclusions of the two appraisers for the
reasons already stated. It therefore becomes my
task to determine, somewhere between the poles of
the two varying opinions, the just measure of
compensation to which the plaintiff is entitled for
the injurious affection sustained.
The simplest and best approach, in my opinion,
is to apply a discount factor to the Lawrence sale
price of $8,000 per subdivided lot. I consider that a
25% discount would be appropriate in the circum
stances, which reduces the price per residential lot
to $6,000. This is in line with the $6,000 sales
comparable on the Nevers Road. Multiplying this
by eleven gives $66,000 for the value of the Bel-
mont property immediately before the enactment
of the zoning regulations. Deduct the after valua
tion figure of $43,400 and you obtain the result of
$22,600. The application of the 25% discount to
the Lawrence valuation figure of $88,000 natural
ly equates to the same result. If any reconciliation
is needed it can be found in the evidence of Mr.
Hildebrand. Take his present subdivided lot value
of $12,000 without the airport and, assuming that
50% is the fair equivalent of his very significant
reduction factor, the adjusted result is $6,000 per
lot.
For the foregoing reasons, I assess $22,600 as
compensation to the plaintiff for the decrease in
value caused to his property by the enactment of
the Fredericton Airport Zoning Regulations. No
interest is allowable on the amount of compensa
tion by reason of the established rule that there
cannot be a valid claim for interest against the
Crown unless interest is payable under a contract
providing for it or as authorized by statute, which
is not the case here. There will therefore be judg
ment in favour of the plaintiff for compensation in
the amount of $22,600, with costs to be taxed.
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.