Davies Howe LLP successfully represented the Claimant in a complex expropriation matter before the Ontario Land Tribunal
On April 17, 2025, the Ontario Land Tribunal (the “Tribunal”) released its decision in 2090396 Ontario Limited v. Regional Municipality of York (OLT-23-000726), awarding compensation to 2090396 Ontario Limited (the “Claimant”) for the partial expropriation of a vacant property located at 1500 Centre Street in the City of Vaughan (the “Subject Property”). The Regional Municipality of York (the “Region”) expropriated a portion of the Subject Property in 2015 to facilitate road and intersection improvements associated with the vivaNEXT bus rapid transit (“BRT”) system. The expropriation consisted of a fee simple taking and a five-year temporary easement.
Davies Howe LLP represented the Claimant in the claim for compensation under the Expropriations Act (the “Act”). Mark Flowers and Andrew Valela acted as counsel. The hearing proceeded over ten days in January 2025.
The Tribunal ordered the Region to pay the Claimant approximately $2.37 million in compensation for the market value of the land taken, damages for injurious affection, and compensation for a temporary easement, subject to a deduction for a prior advance payment. Interest was awarded from June 5, 2015, being the date that was agreed upon by the parties prior to the hearing.
Determination of Highest and Best Use
The central issue in the proceeding was the determination of the highest and best use of the Subject Property in the pre-expropriation condition. The Claimant maintained that, absent the fee simple taking, the highest and best use of the Subject Property was a 12-storey mixed-use building comprising 121 residential units with commercial space at grade (the “Pre-Expropriation Development Concept”). Conversely, the Region contended that the highest and best use of the Subject Property before the expropriation was a low-rise commercial development.
The Tribunal assessed the highest and best use of the Subject Property against the four established criteria, namely: legal permissibility, physical possibility, financial feasibility, and maximum profitability. The Tribunal concluded that the Pre-Expropriation Development Concept satisfied all four criteria and represented a reasonably probable use of the Subject Property at the valuation date, being May 1, 2015.
Legal Permissibility
While the Tribunal recognized that the Subject Property was zoned for commercial uses at the valuation date, it found that it was reasonable probable that the necessary zoning and policy approvals for a mid-rise mixed-use development could have been obtained. The Tribunal accepted the Claimant’s evidence that the Pre-Expropriation Development Concept aligned with the Growth Plan for the Greater Golden Horseshoe, 2006, the Regional Official Plan, 2010, and the City of Vaughan Official Plan, 2010, all of which promoted intensification and transit-supportive development, as well as the emerging planning policy context.
The Tribunal also rejected the Region’s argument that the planning policy documents relied upon by the Claimant in support of the Pre-Expropriation Development Concept should be disregarded or “screened out” under section 14(4)(b) of the Act. It found that the relevant planning instruments were not enacted for the purpose of expropriation and that there was no established connection or direct relationship between these instruments and the BRT; therefore, they remained applicable in determining the highest and best use of the Subject Property.
Physical Possibility
The Region raised concerns about the constructability of the Pre-Expropriation Development Concept, citing size constraints and the need for land dedications for road widenings and a daylight triangle. However, the Tribunal concluded that the Region would not have been successful in obtaining such dedications and therefore no adjustments to the conceptual design were warranted. While the Claimant’s concept plan was preliminary, the Tribunal found that it was detailed enough for the experts to form an opinion and for the Tribunal to make factual determinations on the issue of physical possibility.
Financial Feasibility
The Tribunal found that the Pre-Expropriation Development Concept was financially viable and was likely to produce a positive financial benefit that was within the range for a suitable return on investment agreed to by the experts. The Tribunal preferred the evidence of the Claimant’s real estate analysis and development feasibility experts, noting that their assessments were consistent with prevailing market conditions and reflected a more realistic understanding of the local real estate market.
Maximum Profitability
Based on its conclusions on the previous three criteria, the Tribunal concluded that the maximally profitable use of the Subject Property in the pre-expropriation condition was a mid-rise mixed-use development.
Compensation Awarded
The Tribunal concluded that the Claimant’s Pre-Expropriation Development Concept represented the highest and best use of the Subject Property, prior to the expropriation. It therefore awarded compensation for the market value of the land consistent with that use in the amount of $857,493, based on a land rate of $182 per square foot (“psf”), in accordance with the opinion of value put forward by the Claimant’s appraiser.
The Tribunal awarded $1,502,067 for injurious affection, which reflects the difference in value between mid-rise mixed-use land and low-rise commercial land, which the parties agreed had a value of $80 psf at the valuation date. Additionally, the Tribunal directed the Region to provide compensation in the amount of $12,348 for the temporary easement, based on the fair market value of the expropriated interest.
As a result, the total compensation awarded to the Claimant amounted to approximately $2.37 million. Interest was awarded from June 5, 2015, and the Tribunal remains seized to address the issue of costs.
_____________________________________________
If you require assistance with an expropriation matter, please do not hesitate to contact one of the members of our expropriation group.
Ava Kanner (ava@davieshowe.com)
Mark Flowers (markf@davieshowe.com)
Robert Miller (bobm@davieshowe.com)
Samantha Lampert (samanthal@davieshowe.com)
Andrew Valela (andrewv@davieshowe.com)
Simone Stewart (simone@davieshowe.com)