Injurious Affection Damages: Claiming Business Damages Caused by Public Projects Where there is no Taking of Land
Read time: 4-5 minutes
As we all know, public projects often result in lengthy construction periods that can span months or even years. For business owners in the surrounding area, this could mean a significant loss in revenue and profit during the construction period or they could even be forced to close up shop permanently.
While many business owners are aware that they can claim business damages when all or a portion of their land is expropriated, many business owners do not know that they may be able to claim business damages caused by public projects when there is no expropriation of land. These damages are called injurious affection damages.
What is Injurious Affection
Injurious affection (“IA”) includes the following damages resulting from a public project where there is no taking of land as defined in the Expropriations Act (the “Act”):
- A reduction in the market value of the land of the owner, and
- Personal and business damages.
The statutory authority is obligated to compensate an owner for these damages pursuant to the Act.
The Legal Test
The Supreme Court of Canada, in its 2013 decision in Antrim Truck Center Ltd. v Ontario (Transportation), outlined the test for IA where there is no taking of land.
For IA where there is no taking to be successful under the Act, a claimant must prove the following requirements:
- The damage must result from action taken under statutory authority;
- The action must give rise to liability but for that statutory authority; and
- The damage must result from the construction and not the use of the works.
Part two of the test looks at the tort of nuisance, which requires a separate two-part test. First the Court will consider the threshold test, which is whether the harm suffered by the claimant is sufficiently serious. If the threshold test is met, the Court will consider the reasonableness of the interference suffered by the claimant in all of the circumstances.
The Court will consider factors such as:
- Severity of the interference
- Character of the neighbourhood
- Sensitivity of the plaintiff
- Frequency of the interference
- Duration of the interference
- The utility of the public project
Ultimately, the Court must determine whether the interference has imposed a disproportionate burden on the claimant, outside of the normal give and take that can be expected.
A Recent Application of the Test
In R. Jordan Greenhouses Ltd. v Grimsby (Town), 2015 CarswellOnt 2187, 114 L.C.R. 249 the Claimant was a small retail greenhouse business which had been operating in a residential area within Grimsby (the “Town”) for about 80 years. The Town planned and constructed a new sewer main and laterals on the street located in front of the Claimant’s business. This construction occurred in the Spring during the Claimant’s busy season, required several closures of the main road, caused unreasonable traffic delays, and effectively blocked vehicular traffic from getting to the Claimant’s business.
The Board applied the Antrim test and determined that it would be unreasonable to expect the Claimant to bear all of the interference that was caused to its business by careless construction planning, careless construction supervision and careless contract enforcement actions of the Town without compensation. The Claimant was awarded damages in the amount of $115,000.
Tips for Business Owners
- Talk to a lawyer who is experienced with public construction projects and expropriation law early in the process, even if you are not sure yet if the public project will cause business damages.
- Keep notes, photographs and/or videos about the construction that is going on near your business and any events that cause a disturbance to your business.
- Be aware of the 1-year limitation period to give notice of IA pursuant to Section 22 of the Act. In Willies Car & Van Wash Ltd. v Simcoe (County), the Court determined that the claim for IA was statue barred by section 22 of the Act. See our article “Pinning Down Section 22 of the Expropriations Act – Giving Notice of IA” for more information about giving notice.
Rodrigues Paiva LLP is experienced in public construction projects and expropriation law and can assist you in assessing your business damages and whether you have a strong claim for IA damages pursuant to the Act.
Please contact Michael Paiva for more information about injurious affection damages, or if you require assistance with an expropriation matter.