Commercial Litigation and Dispute Resolution Blog

On March 7, 2013, the Supreme Court of Canada issued an important decision regarding the obligation of public authorities to compensate private landowners in circumstances where public infrastructure construction has interfered with the private use and enjoyment of land.  In doing so, the Court ruled that a court must weigh the overriding public good occasioned by the infrastructure project against the severity of the interference with the landowner’s property in deciding whether compensation is owed.

In Antrim Truck Centre Ltd. v. Ontario, 2013 SCC 13, the appellant had operated a truck stop on Highway 17 in Ontario for approximately 25 years.  In 2004, Ontario altered Highway 17 such that access to the truck stop was severely limited.  The restriction on access to the truck stop ultimately put the appellant out of business.

The Supreme Court of Canada found that Ontario could be held liable under the Expropriation Act (Ontario) for injurious affection if the appellant could have successfully sued for damages caused by the construction under the law of private nuisance.  A nuisance was determined to arise where there has been an interference with the landowner’s occupation or enjoyment of land that was both substantial and unreasonable.  This is a two part test with the first part being a determination of whether the interference is “substantial” meaning “non-trivial” and the second part being a weighing of the interference suffered by the landowner against the utility of the act of the public authority.  In this weighing process, the Court decided that the act of the public utility will generally outweigh even very significant interferences with a claimant’s land.  It wrote that a claimant must prove that he or she has suffered from an interference that is more than the “give and take” expected of everyone and that the interference must be a disproportionate burden on them.  The public authority is to be favoured where the landowner’s harm cannot be viewed as more than the claimant’s “fair share” of the costs associated with providing a public benefit.

In this appeal, the Court restored the original decision which held that the appellant’s permanent interference with its property and reduced market value was a disproportionate burden which was not outweighed by the greater public good occasioned by the highway construction.  In doing so, the Court made an important finding that the type of harm suffered here – lack of access to the property from Highway 17 – was sufficient to support the claim. 

With billions of dollars being invested on public infrastructure projects in Canada, this decision has deep implications for the public cost of such projects.  While the words used by the Court suggest deference is to be given to reasonable interferences by public authorities, the facts of the case may suggest a broader willingness to compensate landowners.