T-802-76
Willard James Leach and Verla Fern Leach
(Plaintiffs)
v.
The Queen (Defendant)
Trial Division, Grant D.J.—Toronto, May 4 and
October 19, 1981.
Expropriation — Judgment awarded to the plaintiffs pur
suant to subs. 24(6) of the Expropriation Act together with
interest at the basic rate pursuant to subs. 33(2) — Subsection
33(2) deals with a case where an offer has not been accepted —
Claimants had accepted offers and the monies were paid to
them — Crown's first offer was less than 90% of the plain
tiffs' expropriated interest, but when the two subsequent offers
are added, they amount to well above the 90% — Plaintiffs
claim that they are entitled to interest at 5% per annum
pursuant to para. 33(3)(b) on the whole compensation, alleging
that the first offer "sent" with the appraisal was the only offer
that should be considered in determining if the amount of the
offer is less than 90% because the subsequent offers were not
accompanied by a written appraisal — Whether a written
appraisal must accompany every increased offer — Whether
the plaintiffs are entitled to interest under para. 33(3)(b) -
Whether interest pursuant to para. 33(3)(a) should be cal
culated on the total compensation from the date of the offer
Plaintiffs are entitled to interest under para. 33(3)(a) —
Expropriation Act, R.S.C. 1970 (1st Supp.), c. 16, ss. 14(1),
24(2),(3),(6), 33(1),(2),(3).
Cotton v. The Queen (1976) 10 L.C.R. 350 (F.C.A.),
followed.
ACTION.
COUNSEL:
R. L. K. Smith, Q.C. for plaintiffs.
T. Dunne and E. J. Forster for defendant.
SOLICITORS:
Blaney, Pasternak, Smela & Watson,
Toronto, for plaintiffs.
McTaggart, Potts, Stone, Winters & Her-
ridge, Toronto, for defendant.
The following are the reasons for judgment
rendered in English by
GRANT D.J.: In this claim, I had delivered
reasons for judgment on August 26, 1981. Thereby
I found the plaintiffs entitled to the sum of $150,-
000 pursuant to the provisions of subsection 24(6)
of the Expropriation Act, R.S.C. 1970 (1st
Supp.), c. 16, together with interest at the basic
rate pursuant to subsection 33(2) of the Act to the
31st day of December 1976 only, less such
amounts as had previously been paid to the plain
tiffs or on their behalf. Since then I have heard
counsel in reference to the allowance of interest
and costs. I was in error in specifying that such
interest was payable pursuant to subsection 33(2)
as that section deals with a case "where an offer
has not been accepted" within the meaning given
to such phrase by the Act. Subsection 33(3) is the
proper provision for interest in this case as offers
had been accepted by the claimants and the
monies paid to them.
It reads:
33....
(3) Where an offer has been accepted, interest is payable by
the Crown from the date of the offer to the date judgment is
given,
(a) at the basic rate on the amount by which the compensa
tion exceeds the amount of the offer, and in addition
(b) at the rate of five per cent per annum on the compensa
tion, if the amount of the offer is less than ninety per cent of
the compensation;
and where an offer has been accepted after the date of posses
sion, interest is payable at the basic rate on the compensation,
from the date of possession to the date of the offer.
Subsection 33 (1) states that in this interest sec
tion the word "offer" means an offer under section
14 and that "date of the offer" means the date
upon which it was accepted.
Subsection 14(1) describes the notice to be sent
by the Minister to each person who is entitled to
compensation under this Part as "an offer in writ
ing of compensation, in an amount estimated by
the Minister to be equal to the compensation to
which that person is then entitled under this Part".
[Emphasis is mine.]
The plaintiffs claim that they are entitled to
interest at the rate of 5% per annum pursuant to
paragraph 33(3)(b) (supra) on the whole compen
sation alleging that the first offer "sent" in April
1973, with the appraisal amounted to less than
90% of the compensation awarded by this Court
and that only this offer should be taken into
consideration in determining if the amount of the
offer is less than ninety per cent of the compensa
tion. They submit that the additional amounts
offered thereafter cannot be considered as part of
the offer because no further written appraisal jus
tifying the increase accompanied the same and,
therefore, they cannot be treated as offers within
section 14 under the definition of the word "offer"
(supra). It is to be noted that the Crown's first
offer made in April of 1973 in the amount of
$63,465 was less than 90% of the plaintiffs' expro
priated interest of $100,289.57 but when the two
subsequent offers are added, they amount to
$93,090.43 and are well above such 90%.
In Cotton v. The Queen (1976) 10 L.C.R. 350
(F.C.A.) at page 358, Urie J. dealt with a similar
submission by treating such an additional offer as
an amendment to the original section 14 offer and
stated, "there is nothing in the section which pre
cludes the Minister from amending his offer, nor,
if he does so, anything which requires him to send
a new appraisal."
It would be impracticable to require the Minis
ter to forward a further written appraisal to the
claimants on each occasion that he increased the
offer of settlement. The first offer required by the
section to be sent within 90 days after the registra
tion of the notice of expropriation is only an
amount estimated by the Minister at the time. It
may well be that he has not received any further
appraisal and only increases the amount the
Crown is willing to pay because further consider
ation causes him to do so or he may do so to avoid
litigation.
The plaintiffs will not be able to estimate the
minimum amount sufficient to enable them to
relocate their residence in or on premises reason
ably equivalent to the premises expropriated until
the time has arrived for such purchase. This is
determined by the words of subsection 24(6) as:
24. (6) ... at the earlier of
(a) the time of payment to him of any compensation in
respect of the interest, otherwise than pursuant to any offer
made to him under section 14, or
(b) the time when the Crown became entitled to take physi
cal possession or make use of the land to the extent of the
interest expropriated,
In this case paragraph (b) is applicable and the
date is May 30, 1975. It appears clear, therefore,
that the compensation referred to in paragraph
33(3)(b) (supra) is that ascertained in determin
ing the value of the expropriated interest under
subsections 24(2) and (3) of the Act and has no
reference to the amount required to relocate the
plaintiffs in an equivalent residence under subsec
tion 24(6).
The Minister could not be expected to estimate
the cost of such a new residence for the plaintiffs
and base his first offer on such figure in his section
14 offer. This is also made clear by the use of the
word "then" in section 14 where it refers to the
estimate of the compensation to be made by the
Minister and sent to the plaintiffs as "to which
that person is then entitled". [Emphasis is mine.]
I am convinced, therefore, that the plaintiffs are
not entitled to any of the penalty interest provided
by paragraph 33(3)(b) of the Act.
It is submitted that the interest to which the
plaintiffs are entitled under paragraph 33(3)(a)
should be calculated on the total valuation of their
interest from the date of the offer even though
they have received payment of the amounts set
forth therein. It would be most unusual if a claim
ant were entitled to recover interest on that portion
of the compensation which he had already
received. The word "interest" is defined in The
Shorter Oxford English Dictionary as: "Money
paid for the use of money lent (the principal) or
for forbearance of a debt, according to a fixed
ratio ... ".
I think this subsection is quite clear that under it
interest at the basic rate is payable only from the
time the Crown's offer is accepted and on that
amount by which the total compensation found by
the Court exceeds the amount of the Crown's offer
to that date.
While the plaintiffs' original demands and those
set forth in the statement of claim were in my
opinion unreasonable, it was made clear at the
opening of trial that they were then only asking for
the amounts at which the same were valued by
their expert witnesses. The plaintiffs have already
been penalized by depriving them of interest subse
quent to December 31, 1976. In view of this, I
would allow them costs on a solicitor and client
basis.
In addition to the relief granted in my reasons
for judgment dated August 26 last, I direct that
the plaintiffs shall be entitled to interest under
paragraph 33(3)(a) of the Act calculated in the
manner indicated above which amounts to the sum
of $11,389.34, together with costs taxed on a
solicitor and client basis.
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.