Fraser v. The Queen

Fraser v. The Queen
Collection
Supreme Court Judgments
Date
1963-10-02
Report
[1963] SCR 455
Judges
Cartwright, John Robert; Fauteux, Joseph Honoré Gérald; Judson, Wilfred; Ritchie, Roland Almon; Hall, Emmett Matthew
On appeal from
Canada
Subjects
Expropriation
Decision Content
Supreme Court of Canada
Fraser v. The Queen, [1963] S.C.R. 455
Date: 1963-10-02
Alistair Fraser (Defendant) Appellant;
and
Her Majesty The Queen on the information of the Deputy Attorney General of Canada (Plaintiff) Respondent.
1963: February 20, 21, 22; 1963: October 2.
Present: Cartwright, Fauteux, Judson, Ritchie and Hall JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Expropriation—Land taken as source of rock for causeway—No market for rock apart from building of causeway—Compensation for special adaptability—Expropriation Act, R.S.C. 1927, c. 64.
Certain lands of the defendant, comprising 110.1 acres and having a "bare ground" value of about $50 per acre, were expropriated by the Crown for the purpose of opening up a stone quarry on the said lands to provide rock for the building of a causeway. These lands had no value for any purpose other than that for which they were expropriated and there was no prospect of any other commercial exploitation. The Crown later abandoned all the lands with the exception of 12.8 acres and the abandoned lands revested in the defendant. At the time of the expropriation the contract had been let for the construction of the causeway, under authorization of a prior order in council, and there were specific provisions in the contract relating to the rock on the defendant's lands which indicated that these lands were to be the source of the rock for the construction of the causeway and that it would be supplied free to the contractor. The contractor had the right to use rock from any other source that he might choose provided it was equal to or better than the rock contained in the defendant's lands and met with the approval of the engineer.
An action was brought to determine the compensation to be awarded to the defendant in respect of the expropriation of his lands. The defendant appealed and the Crown moved to vary the judgment of the trial judge.
Held (Judson J. dissenting): The appeal should be allowed and the cross-appeal dismissed.
Per Cartwright, Fauteux, Ritchie and Hall JJ.: The plaintiff's contention that the only potential value of the expropriated lands over and above their "bare ground" value was solely and exclusively related to the scheme of constructing the causeway and should accordingly have been excluded in fixing the value for the purposes of compensation failed. Cedars Rapids Manufacturing and Power Co. v. Lacoste, [1914] A.C. 569; Fraser v. City of Fraserville, [1917] A.C. 187; Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands, [1947] A.C. 565, considered. None of these cases was authority for the proposition that a hitherto undeveloped potentiality of expropriated property is to be entirely disregarded in fixing the value of that property for compensation purposes on the ground that the expropriating authority is the only present market for such potentiality and that it has developed a scheme which involves its use. These cases, however, made it plain that the amount fixed by way of compensation must not reflect in any way the value which the property will have to the acquiring authority after expropriation and as an integral part of the scheme devised by that authority.
The exclusion from the Court's consideration of increase in value consequent on the execution of the undertaking to build a causeway and of any value based on the Crown acting under compulsion as a necessitous purchaser did not mean that the value of the special adaptability to the owner at the date of expropriation was to be disregarded. Vyricherla Narayana Gajaptiraju (Raja) v. Revenue Divisional Officer, Vizagapatam, [1939] A.C. 302, followed.
The effective date for valuation of this property was the date of expropriation and the reality of the matter was that the Crown was expropriating tons of rock in the ground rather than acres of land in the rough so that the value of the special adaptability of these lands was to be determined on the basis of the value that a willing vendor might reasonably expect to obtain from a willing but not anxious purchaser for the rock in situ at the date of expropriation.
The value of the special adaptability was limited to the 12.8 acres which were retained by the Crown. The value of the 97.3 acres revested in the defendant did not enter into the calculation of the compensation except to the extent that the defendant was entitled to interest on the value of the whole 110.1 acres from the date of expropriation to the date of revesting.
No amount for compulsory taking was allowed. Drew v. R., [1961] S.C.R. 614, followed.
Per Cartwright and Fauteux JJ.: The statements found in numerous authorities, that the person whose property is taken for the public use shall receive no more than the value of that property to him, did not mean that he is to receive less than the market price where that is ascertainable. Lake Erie and Northern Railway. Co. v. Brantford Golf and Country Club (1917), 32 D.L.R. 219, referred to. In relation to a case such as the one at bar where what is expropriated is really building material rather than land, the principle underlying the decisions relied on by the plaintiff (other than in Vézina v. R.) was that the owner of property taken for the public use shall not receive a price inflated beyond its market value because of the necessities of the scheme for the carrying out of which it is required, not that the owner shall be compelled to take less than the market price which would be paid by any willing purchaser who wanted the material and to whom competitive sources of supply were available. Vyricherla Narayana Gajapatiraju (Raja) v. Revenue Divisional Officer, Vizagapatam, supra, referred to; Vézina v. R. (1889), 17 S.C.R. 1, disapproved.
Per Judson J., dissenting: Whatever value this property had, other than its value as waste land, it got from the scheme. These lands had no value for their special adaptability for the purpose of quarrying in general, but only for the purpose of quarrying for the needs of the causeway. The scheme and nothing else created the special adaptability and the expropriating authority was not to be charged for the value which it and it alone brought into being. There was only one possible source of value over and above the bare value of the property, and that must be based, not on value to the owner, but on value to the taker. Vézina v. R., supra; Cunard v. R. (1910), 43 S.C.R. 88; Cedars Rapids Manufacturing and Power Co. v. Lacoste, supra; Fraser v. City of Fraserville, supra; Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands, supra, referred to.
APPEAL and cross-appeal from a judgment of Cameron J. of the Exchequer Court of Canada1. Appeal allowed and cross-appeal dismissed, Judson J. dissenting.
J. J. Robinette, Q.C., for the defendant, appellant.
D. S. Maxwell, Q.C., and P. M. Troop, for the plaintiff, respondent.
Cartwright J.:—The facts out of which these proceedings arise are set out in the reasons for judgment of my brother Judson and in those of my brother Ritchie. It is unnecessary to repeat them in detail but I wish to summarize them briefly. On July 9, 1952, when the appellant's lands were expropriated for the use of Her Majesty in the right of Canada it was already known (i) that the causeway was to be built, (ii) that approximately 9,000,000 tons of rock, would be required as material to be used in its construction, (iii) that rock admirably suited to this purpose and in excess of the amount required was contained in the appellant's land, (iv) that its location was such that the costs of quarrying and transportation would be less than in the case of any rock in other locations belonging to other persons, and (v) that there were ample other possible sources of supply although because of their location none would be equally economical. The lands of the appellant were not required to form any part of the bed of the causeway or the approaches thereto; the purpose of the expropriation was simply to obtain a suitable supply of rock. Apart from the requirements for the causeway there was no probability of the appellant selling any substantial quantity of his rock in the forseeable future. The value of the expropriated land if all possibility of selling the rock contained in it was disregarded was about $50 per acre. A prudent contractor bidding on a contract the performance of which would require great quantities of rock to be supplied by him would have been willing to offer and pay from 5 cents to 7½ cents per ton for suitable rock in situ in a convenient location.
On these facts there are two sharply conflicting views as to what should be paid to the appellant for the 9,000,000 tons of rock taken from what had been his land and used in the building of the causeway. For the appellant it is said that he should get not less than the minimum market price, that is to say, the price which a willing but not necessitous or driven purchaser would pay to a willing seller, for the quantity of rock required. For the respondent it is said that there would have been no market for the rock apart from the building of the causeway and that the appellant is entitled only to the bare value of his land considered as waste land.
We must deal with the realities of the situation. What was compulsorily taken from the appellant was intended to be used not as land but as a source of building material for which there was an ascertainable market price. The statements found in numerous authorities, that the person whose property is taken for the public use shall receive no more than the value of that property to him, do not mean that he is to receive less than the market price where that is ascertainable. In Lake Erie and Northern Railway Co. v. Brantford Golf and Country Club2, Duff J., as he then was, said:
It does not follow, of course, that the owner whose land is compulsorily taken is entitled only to compensation measured by the scale of the selling price of the land in the open market. He is entitled to that in any event …
The words which I have italicized in this passage appear to me to be applicable to the case at bar. Why, it may be asked, should a citizen who happens to own material suitable for use in the building of a public work and in a most convenient location, but of which there are ample available supplies in the hands of other owners, be required to make a gift of his property? I would have thought it plain that the contention of the appellant is the right one were it not for the decision of this Court in Vézina v. The Queen3. The effect of that judgment, so far as it is relevant to the point before us, is accurately summarized in the first paragraph of the headnote as follows:
Where land is taken by a railway company for the purpose of using the gravel thereon as ballast, the owner is only entitled to compensation for the land so taken as farm land, where there is no market for the gravel.
I do not find it necessary to enter upon the question, which has sometimes been raised but not, I think, as yet decided, whether strictly speaking this Court is now bound under the principle stare decisis by an earlier judgment pronounced by it in a case which was appealable to the Judicial Committee of the Privy Council, for the Court has always been free to reconsider such a judgment if it is found to conflict with a subsequent pronouncement by the Judicial Committee on a point of law. The decision in Vézina v. The Queen appears to have been founded on the circumstance that the railway company was the only possible purchaser of the appellant's gravel and, in my opinion, it is inconsistent with the judgment of the Judicial Committee in Vyricherla Narayana Gajapatiraju (Raja) v. Revenue Divisional Officer, Vizagapatam4, which is discussed in the reasons of my brother Ritchie. In relation to a case such as the one before us where what is expropriated is really building material rather than land, the principle underlying the decisions relied on by the respondent (other than that in Vézina) appears to me to be that the owner of property taken for the public use shall not receive a price inflated beyond its market value because of the necessities of the scheme for the carrying out of which it is required, not that the owner shall be compelled to take less than the market price which would be paid by any willing purchaser who wanted the material and to whom competitive sources of supply were available.
I have reached the conclusion that the appellant is entitled to be paid the fair market price for the quantity of rock taken from his expropriated land. It may be said with some force that on the evidence this should be not less than 5 cents a ton, but for the reasons given by my brother Ritchie I agree with the figure fixed by him.
For the reasons given by my brother Ritchie and those briefly stated above I would dispose of the appeal and cross-appeal as proposed by my brother Ritchie.
Fauteux J.:—For the reasons given by my brothers Cartwright and Ritchie, I would dispose of the appeal and cross-appeal as proposed by my brother Ritchie.
Judson J. (dissenting):—On July 9, 1952, the Dominion Government expropriated 110.1 acres out of a tract of land comprising 392 acres owned by the appellant. The appellant had inherited this land in 1929. It had been owned by his family, one part since 1897 and the other since 1890.
The purpose of the expropriation was to open up a stone quarry on the lands expropriated to provide rock for the building of a causeway across the Strait of Canso from Auld Cove at Cape Porcupine on the south side of the Strait to Balache Point on the north shore of the Strait in Cape Breton Island.
There is a good description of the property in the reasons for judgment of the learned trial judge contained in the following quotation:
The lots so owned by the defendant are situated on the south shore of the Strait of Canso which divides Cape Breton from the mainland of Nova Scotia. To the south thereof is the main highway leading from Antigonish to Mulgrave. From that highway, which is about 250 ft. above sea level, the land rises to a height of some 650 ft. above sea level, and at the north dropped abruptly to the shore of the Strait of Canso. The property consisted almost entirely of solid rock with a very shallow overburden of soil in some places. It was and is totally unsuitable for agriculture and such small trees as grew thereon were of no value. The municipal assessment for tax purposes of the entire 392 acres varied over the years from a low of $100 to a high of $300.
So far as is known, the property was never put to any use whatever and no improvements of any sort were made, the only expenditure thereon being the municipal taxes. No effort was made to sell any portion of the land or any rock therefrom; and no offer to purchase was ever received. Up to the date of the expropriation, no plan had been formulated by the owner for the opening of a quarry or the development of the property in any way.
The reasons of the learned trial judge demonstrate that this land had no value for any purpose other than as a site for the stone quarry needed for the construction of the causeway at the time of the expropriation and that there was no prospect of any other commercial exploitation. We are therefore faced in this appeal with this simple situation: whatever value this property has, other than its value as waste land, it gets from the scheme. It is very difficult to think of an expropriation case where this condition and this condition alone prevails. Usually land has some commercial potential apart from the scheme.
An unusual feature of the case is that when the Government expropriated on July 9, 1952, the contract had been let for the construction of the causeway, under authorization of a prior order in council, and there were specific provisions in the contract relating to the rock on the appellant's land which indicated that this land was to be the source of the rock for the construction of the causeway and that it would be supplied free to the contractor who, of course, had to quarry and transport it. The contract estimated the amount of rock fill needed at 9,000,000 tons, for which the contractor was to be paid 59 cents per ton for all rock placed in the causeway.
The appellant's land was the most convenient site for the opening up of a quarry for the supply of rock for the causeway and in addition, as the specifications show, the rock was of a better quality than most of the rock in the immediate neighbourhood in that it was harder and contained less material which would be subject to attrition by weather. It could be quarried in large blocks suitable for protecting the sides of the causeway. The contractor had the right to use rock from any other source that he might choose provided it was equal to or better than the igneous rock of Cape Porcupine Hill and met with the approval of the engineer.
I have not the slightest doubt that the appellant's local knowledge, both geological and geographical, and his awareness of the economic necessity of a better crossing from the mainland to Cape Breton Island always enabled him to conclude that if the Government chose to build a causeway he would be near the site and that they would have to come to him for a supply of rock.
There had been much public discussion of the project going back at least to 1943 and probably earlier. In 1943 both the House of Assembly of the Province of Nova Scotia and the Maritime Board of Trade passed a resolution asking the Government of Canada to investigate the practicability of constructing a causeway. In 1944 the Dominion Steel and Coal Company Limited made a report on the project. In 1945 the Dominion Government made a geological map of the Strait. In 1949 a board of engineers appointed by the Dominion Government and the Province of Nova Scotia reported that three projects had been studied and recommended the construction of a low-level bridge. This report is known as the Pratley Report and is the first reference that I can find in the evidence to a low-level bridge. In 1950 the Minister of Transport reconvened the Pratley Commission. It had been decided by this time that the low-level bridge was not a practical solution to the problem. On December 8, 1950, the Province of Nova Scotia expropriated the lands of the appellant. In June of 1951 the Pratley Board reported that in view of the elimination of the bridge project and because of the high cost of improving the ferry, the causeway scheme was the only practical solution. The Board also recommended that the site of the causeway be the same as the site of the proposed low-level bridge, and referred to Porcupine Mountain (the appellant's land) as a source of supply for rock. On October 17, 1951, Cabinet approval was given to the construction of the causeway by the Government of Canada. Consulting engineers were then instructed to prepare plans for the design and supervision of the construction of the causeway. These were completed on March 31, 1952. Tenders were then invited and on June 18, 1952, the construction contract was signed, under authorization of an order in council of May 16, 1952. On July 9, 1952, the Province of Nova Scotia abandoned its expropriation and fifteen minutes later the Dominion Government expropriated 110.1 acres by filing the necessary plans and description in the registry office. The Crown indicated its willingness to pay $5,505 for the expropriated lands.
Therefore, at the time of the Dominion expropriation, the ownership of the property had been in the appellant for a period of fifteen minutes after an interval of eighteen months, and at this time the Dominion Government's scheme for a causeway was fully formulated. The Dominion filed its information on July 30, 1954, and offered $5,505 for compensation. In his defence, filed on March 21, 1955, the appellant claimed $5,000,000 plus 10 per cent for compulsory taking. On July 2, 1955, the Government amended its information and abandoned all the lands except 12.8 acres. The abandoned lands at that time revested in the defendant. The original offer of the Government of $5,505 remained as before. The defendant then amended his defence to reduce his claim to $1,000,000 plus 10 per cent. The task of the trial judge was therefore to determine the value to the owner of the 110.1 acres expropriated in 1952, taking into account, in accordance with s. 24 (4) of the Expropriation Act, the fact of abandonment and revesting in the appellant of a large part of the area.
Cameron J. made an assessment of $40,640. He first determined the market value of the 110.1 acres taken from the appellant on July 9, 1952, without any reference to its special adaptability for use for a quarry site for rock. Taking the evidence as a whole, he concluded that $50 per acre would reasonably represent the full market value of the 110.1 acres exclusive of the value of any special adaptability as a quarry site to be used for the supply of rock for the causeway. He then determined the value of the special potentiality. After reviewing the evidence concerning the history of the causeway and concluding that a willing purchaser, in the circumstances and not acting under compulsion, would, in view of his requirements, pay something in excess of the bare value of the land, and after considering the evidence of two Crown appraisers that the value of the potentiality was from $25,000 to $30,000 he reached the conclusion that the value of this potentiality was hot in excess of, $40,000. He then took into consideration the abandonment and concluded that the value of the 97.3 acres which revested in the appellant was the same as of the date of the expropriation, i.e. $50 per acre and, therefore, he deducted the sum of $4,865 leaving a net amount of $40,640. He rejected the appellant's claim for injurious affection for lack of any evidence as to the value of such loss. He also found that there was no advantage or benefit to the appellant arising out of the construction of the causeway that he should take into account under s. 49 of the Exchequer Court Act. He awarded the appellant an allowance of 10 per cent for compulsory taking together with interest.
The Crown submits that any increase in the value above the bare market value of $50 per acre as waste land was entirely attributable to the scheme and should be disregarded in assessing compensation. Cameron J. rejected this and held that he must ascertain the value of whatever potentialities there were and determine what would be paid by a willing purchaser to a willing vendor of the land with its potentialities in the same way that he would ascertain it in a case where there are several possible purchasers, and that he could not confine himself to an award based on the value of the land as waste land.
In doing this he followed Vyricherla Narayana Gajapatiraju (Raja) v. Revenue Divisional Officer, Vizagapatam5, which held that this must be done even where the expropriating authority was the only possible purchaser. The judgment in the Indian case was based upon disapproval of the dictum of Fletcher Moulton L.J. in Re Lucas & Chesterfield Gas & Water Board6 and adoption of the contrary opinion of Vaughan Williams L.J. in the same case.
Cameron J. then arrived at a figure of $40,000 for special adaptability: He said that before October 17, 1951, (the date of the order in council) there was always the chance that this land might be needed for a quarry for the causeway, and that before this date a contractor who might expect to tender for the construction contract if ever the causeway scheme were decided upon and tenders called for, might have risked an outlay of between $25,000 and $30,000 on the property and he had some evidence before him to this effect. He next held that after the date of the order in council any increase in the value of the special adaptability of the land to a causeway scheme resulted from the definite adoption of the scheme and was to be disregarded. On this point, in my respectful opinion, he was clearly right. He correctly instructed himself that he had to ascertain value to the owner, including any special adaptability as of the date of expropriation, but he also held, correctly, in my opinion, that there could be no increase in value between the date of the order in council and the date of expropriation. If Cameron J. was entitled to consider and value a special adaptability of this kind immediately before the date of the order in council, I would accept his valuation. To me he made the maximum possible award in favour of this claimant and the question is whether the claimant was entitled even to the $40,000.
Any increase in value over $50 per acre was entirely the result of the scheme no matter what date one chooses to look at the problem. The $40,000 that the trial judge awarded was just as clearly in this classification as the $1,000,000 which the appellant claimed in his defence. These lands had no value for their special adaptability for the purpose of quarrying in general, but only for the purpose of quarrying for the needs of the causeway. The scheme and nothing else created the special adaptability in this case and I do not think that the expropriating authority is to be charged for the value which it and it alone brought into being.
The appellant's case to me depends upon the unacceptable principle that there is a value to him for which he should be compensated because of the needs and purpose of the expropriating authority. These needs and the purpose are unique. No one else had these needs and no one else could have used the rock for that purpose. The Crown was expropriating some 12 acres of land for the purpose of opening up a quarry. It is the purpose and the use of the rock that creates value. Yet the appellant is claiming compensation as though the power of expropriation had not been exercised and he had been left to deal with a private undertaker upon whom he could have imposed his own terms, within the limits of competition. There is only one possible source of value in this case over and above the $50 per acre, and that must be based, not on value to the owner, but on value to the taker.
A similar problem came up in this Court as early as 1889 in the case of Vézina v. The Queen7. In that case the land was taken for railway purposes and for a gravel pit in connection with the construction of the railway. Patterson J. said:
The learned judge has allowed $807.70 for the land taken, being $100.00 per arpent. This valuation is not complained of so far as the five arpents taken for the track are concerned, and it is not asserted that the three arpents taken for the gravel pit were, as farm lands, of any greater value. But the claimant insists that it shall be valued with reference to the gravel, some 45,000 cubic yards, taken from it, as if he had sold the gravel at so much a yard. The learned judge considered that those three arpents were, to the owner, simply three arpents of his farm, not rendered any more valuable to him by the existence of a bed of gravel under the soil, as there was no market for gravel, and it became of value to the Government only because the railway required it for ballast.
In Cunard v. The King8, Duff J. said:
One principle by which the courts have always governed themselves in estimating the compensation to be awarded for property taken under compulsory powers is this: you are to apply yourself to the consideration of the circumstances as if the scheme under which the compulsory powers are exercised had no existence. The proper application of that principle to chapter 143, R.S.C., seems to me to be this—you are to estimate the value as if the property were not required for the public purpose to which the Minister, who is taking the proceedings, intends to devote it. The circumstance that it is so required is not to enter into the computation of value as either enhancing or diminishing it.
This was written in a dissenting judgment, but I am not aware that the principle so stated is open to any question.
Cedars Rapids Manufacturing and Power Co. v. Lacoste9 and Fraser v. City of Fraserville10 are illustrations of this principle. Both were cases of expropriation for the purpose of power development. The expropriated owner happened to be in a favourable situation on the site of the development and without the power of expropriation he was in a position to hold up the scheme and name his own price. In both cases the arbitrator awarded compensation based upon value to the taker and not to the owner. In each case it was held to be wrong to assess compensation on the basis that the expropriated owner had made a proportionate contribution to the development of the power. This is merely one aspect, as was pointed out in the Fraser case, of value to the buyer and not value to the owner. In reviewing the Cedars Rapids case, which had recently been before the Privy Council, Lord Buckmaster said:
The principles which regulate the fixing of compensation of lands compulsorily acquired have been the subject of many decisions, and among the most recent are those of In re Lucas and Chesterfield Gas and Water Board, Cedars Rapids Manufacturing & Power Co. v. Lacoste, and Sidney v. North Eastern Ry. Co. The principles of those cases are carefully and correctly considered in the judgments the subject of appeal, and the substance of them is this: that the value to be ascertained is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities, excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired, the question of what is the scheme being a question of fact for the arbitrator in each case. It is this that the Courts have found that the arbitrator has failed to do, and it follows that his award cannot be supported.
I cannot see that there is any question of these principles or that they are affected in any way by any possible misapprehension of the supposed unanimity of opinion between Vaughan Williams L.J. and Fletcher Moulton L.J. in Lucas and Chesterfield.
It is not a question here of a possibility of the Dominion Government acquiring powers of expropriation. It always had these powers and it was the only authority that could exercise them. In this situation it does not create the market and then have to pay for the value so created.
The task then is to test how an award of $40,000 plus $50 per acre fits in with the concept of value to the owner as developed in this Court through Irving Oil Co. Ltd. v. The King11, Diggon-Hibben Ltd. v. The King12, and finally in Woods Manufacturing Co. Ltd. v. The King13. What would the claimant, as a prudent man at the moment of expropriation, (he then being deemed as without title, but all else remaining the same) pay for the property rather than be ejected from it. Any readiness to pay anything above the value as waste land can only come from the fact that a causeway is to be built.
In my opinion, Pointe Gourde Quarrying and Transport Co., Ltd. v. Sub-Intendent of Crown Lands14, is directly in point. There an owner was expropriated in Trinidad by the Crown for the purpose of enabling the United States to construct a naval base. On part of the land expropriated there was an operating quarry. The owner was compensated on proper grounds for the quarry as an operating quarry. In addition to this the Court awarded the sum of $15,000 because this quarry was particularly useful to the United States for the construction of its naval base. On this aspect of the award the Privy Council said at p. 572:
It follows from this that the question as submitted to the Full Court should have been answered in the negative. But it does not follow that this part of the award can stand. It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As it was put by Eve J. in South Eastern Ry. Co. v. London County Council: 'Increase in value consequent on the execution of the undertaking for or in connexion with which the purchase is made must be disregarded.' This rule was recognized by the Full Court and, indeed, appears to be the basis of its main conclusion, for in the course of his judgment Blackall C.J., after a reference to Lord Buckmaster's statement of the principle in Fraser v. Fraserville, proceeds: 'In the present case, although a value as a quarry had admittedly been created prior to the acquisition, that value was increased by the fact that a base was being established in the vicinity for which a large quantity of stone in a readily accessible situation was required. In other words, the value was enhanced by the scheme of the party acquiring the land, and that is not a factor for which additional compensation may properly be awarded.'
My judgment therefore is that this claimant is entitled to nothing beyond $50 per acre plus interest. The appeal should be dismissed with costs. I would allow the cross-appeal with costs to the extent of eliminating the $40,000 award and the 10 per cent compulsory taking. The result is that the appellant is entitled to an award of $640 for 12.8 acres at $50 per acre plus interest. The appellant should pay the costs of the trial.
The judgment of Ritchie and Hall JJ. was delivered by
Ritchie J.:—The appellant has appealed and the Crown has moved to vary a judgment of Cameron J. of the Exchequer Court of Canada15 fixing the amount of compensation to be awarded to the appellant in respect of the expropriation of certain of his lands being a part of Porcupine Mountain, so called, at Cape Porcupine in the County of Guysborough, Nova Scotia, which lands were, at the time of the expropriation, known to be the source from which an estimated 9,000,000 tons of rock was to be obtained for use by the Crown in the construction of a causeway between Cape Breton Island and the mainland of Nova Scotia.
Ways and means of joining Cape Breton Island to the mainland had been widely discussed for many years before the Nova Scotia Legislature passed its resolution of April 12, 1943, in the following terms:
BE IT THEREFORE RESOLVED that the Government of Canada be asked by this Legislature to investigate the railroad ferry at the Strait of Canso with a view to the construction of a causeway, thereby eliminating this bottleneck in traffic which has been the greatest drawback to industrial production in Cape Breton Island.
Porcupine Mountain, at least 110.1 acres of which were owned by the appellant, abuts on the south shore of the Strait of Canso and it appears to have been recognized at an early date as a convenient source of suitable supply of rock if a causeway were to be adopted as a means of crossing the Strait so that the subject of the above resolution was not unrelated to the future value of the appellant's lands.
Between 1943 and 1950, the crossing of the Strait of Canso was made the subject of study and report by the Dominion Steel and Coal Company, the Maritime Board of Trade, the Dominion Government and others, and the alternative solutions of a causeway, a low-level bridge, and a tunnel were all considered. The Strait of Canso Board of Engineers had at first reported to the Dominion Government in favour of a low-level bridge but on September 28, 1950, the then Minister of Transport wrote to all the former members of that Board advising them that the engineers of the Canadian National Railways and of the Province of Nova Scotia "were of the opinion that a low-level bridge was not practicable" and the Board was accordingly reconvened to review its earlier findings and "to recommend the best method of improving the present rail and highway transportation facilities across the Strait …". On December 8, 1950, after the Board had been reconvened, but before its final report was issued, the Province of Nova Scotia acting under the authority of the Expropriation Act, R.S.N.S. 1954, c. 91, expropriated certain lands near the Strait including 110.1 acres of the appellant's lands on Porcupine Mountain which were subsequently expropriated by the Dominion Government, and in the following June the Board reported that the causeway scheme was the only practical solution to the problem and that recent borings had confirmed the long held view that Porcupine Mountain contained a suitable supply of rock for its construction.
On October 17, 1951, formal Cabinet approval was given to the construction of the causeway and on June 8 of the following year the Crown entered into a contract with Northern Construction Company and J. W. Stewart for the performance of the necessary work which contract contained a provision that
if the quarry is located south of Auld Cove between Highway No. 4 and the Strait of Canso, the Department will also provide the quarry site without cost to the contractor. If he chooses any other quarry site it shall be provided at his own expense.
The quarry site which was to be provided without cost is on the appellant's lands and the total amount of rock fill required was estimated at 9,000,000 tons. The specifications also provide that the contractor was to be paid 59 cents a ton for all rock placed in the causeway. This was presumably compensation for quarrying, transporting and placing the rock.
At the time when this contract was entered into title to the land formerly owned by the appellant at Porcupine Mountain was vested in the Province of Nova Scotia pursuant to the expropriation proceedings taken on December 8, 1950, but on July 9, 1952, for reasons which are not explained in the evidence, the Province filed a notice of abandonment which had the effect of revesting title in the appellant so that he was the owner when, 15 minutes after the notice had been filed by the Province, a plan and description of 110.1 acres of this land, signed by the Deputy Minister of Transport, was filed by the respondent thus causing it to be expropriated for the use of Her Majesty the Queen in the right of Canada in accordance with s. 9 of the Expropriation Act, R.S.C. 1927, c. 64.
The present proceedings were commenced on August 3, 1954, by the Deputy Attorney General of Canada filing an information seeking to have the compensation to be paid for the 110.1 acres expropriated as aforesaid determined by the Exchequer Court in accordance with s. 27 of the Expropriation Act. The Crown offered the appellant the sum of $5,505 in full satisfaction of all claims, and by way of defence the appellant claimed the sum of $5,500,000.
On May 9, 1955, all the lands of the appellant so taken, with the exception of 12.8 acres, were declared to be abandoned by Her Majesty under s. 24 of the Expropriation Act and thereby revested in the appellant, but when the Crown amended its information on June 2, 1955, to conform to this abandonment it is somewhat significant to observe that the same compensation ($5,505) was offered in respect of the remaining 12.8 acres as had originally been offered for the 110.1 acres.
In amending the information on June 2, 1955, and again on June 20, 1956, the Crown gave an undertaking pursuant to s. 31 of the Expropriation Act to grant to the appellant an easement for the purpose of a right of way from the public highway to the 97.3 acres which had been abandoned to the appellant and thus to enable the appellant to use the 12.8 acres expropriated except the portions thereof occupied by loose rock already quarried on behalf of Her Majesty, in order to re