On March 7, 2013, the Supreme Court of Canada released its decision in Antrim Truck Centre Ltd. v. Ontario (Transportation), 2013 SCC 13. In Antrim, the Ontario government built a new highway which effectively put a truck stop located on the ‘old’ highway out of business. The Supreme Court held that individuals will be entitled to compensation when they bear more than their “fair share” of the costs of providing a public benefit.
The truck stop owner in Antrim had brought a claim for injurious affection and damages to the Ontario Municipal Board under the Expropriations Act.1 The Board awarded the truck stop $58,000 for business loss and $335,000 for loss in the market value of the land.
The Ontario Court of Appeal overturned the Board’s decision, finding that the interference had not been unreasonable given the important public purposes served by the highway’s construction.
The Supreme Court restored the Board’s damages award. It determined that, in all of the circumstances, the truck stop owner should not be expected to endure permanent interference with the use of its land without compensation in order to serve the greater public good.
In its reasons, the Supreme Court made a key pronouncement about the balance between private interests and works that are in the public good. The question is not whether the broader public good outweighs the individual interference when the two are assigned equal weight. If that were the case, then high public utility would always trump even extensive interference. The Supreme Court held that question to be asked is whether the interference is greater than the individual should be expected to bear in the public interest without compensation.
The Supreme Court took pains to state that not every interference will be actionable nuisance. Some interferences are minor or transitory, and part of the everyday “give and take of life”. To establish private nuisance, interference with property interests must be substantial and unreasonable. In the Supreme Court’s view, this two-part approach to nuisance “provides a means of screening out weak claims before having to confront the more complex analysis of reasonableness”.
Moreover, the Court made clear that not every substantial interference arising from a public work will be unreasonable. The balancing exercise in the reasonableness analysis should favour the public authority “where the harm to property interests, considered in light of its severity, the nature of the neighbourhood, its duration, the sensitivity of the plaintiff and other relevant factors, is such that the harm cannot reasonably be viewed as more than the claimant’s fair share of the costs associated with providing a public benefit.” The Court thought this balancing of interests in the public authority’s favour may be appropriate “where the public authority has made all reasonable efforts to reduce the impact of its work on neighbouring properties”.
However, even if a government agency undertakes a construction project in the interests of the public, and executes this project reasonably, it nonetheless may be required to compensate a private landowner when the project causes a substantial and unreasonable interference warranting compensation.
In its decision, the Supreme Court made several other important clarifications to the law of nuisance, including that: (1) in determining whether an interference is unreasonable, the factors to consider are not a mandatory checklist – but include consideration of all circumstances in a particular case; and (2) the reasonableness of the interference must be assessed in cases of unreasonable interference with the use and enjoyment of property and in cases of material physical damage to the property.
1 To meet the test for injurious affection, Antrim had to demonstrate that, if the highway construction had not been done under statutory authority, Antrim could have successfully sued in private nuisance for damages caused by the construction.