Injurious Affection and the Wave Theory
As a senior partner with Borden Ladner Gervais LLP and a founding director and past president of the Ontario Expropriation Association, Stephen Waqué has over 30 years of experience with Ontario’s expropriation legislation. Stephen is the author of the text New Law of Expropriation that deals comprehensively with government acquisitions of real estate and business interests.
The burden of adducing evidence in an injurious affection claim is significant enough. Often adjudicators require that not only does an expropriated owner have the burden of adducing evidence, but also has a burden of proof (i.e. the balance of probabilities).
Injurious affection impacts often mix market value issues with complex human response issues in a very profound manner. The aversion that an expropriated owner has to be required to live with a new public work, for example a hydro transmission tower and line, may be quite different from a market participant who chooses to purchase a property adjoining a line balancing other opportunities and attributes of properties in the market place. Additionally, when a new project is proposed, particularly in the context of a rigorous environmental assessment, all the issues respecting impacts on human health, loss of aesthetic value, and other negative impacts on persons in the community are highlighted.
The combination of public emphasis on these injurious impacts and personal aversion to the non-consensual relationship with the public work usually means that the highest degree of negative impact on market value exists early on in the development of a public work. Later, the market can select over a long period of time persons who are less sensitive to the public work. Similarly, over time the apprehended risks of the operation of the public work, while reasonably perceived at the project announcement, may not arise or may be managed effectively through construction techniques or operational effectiveness. The combination of these factors and others results in the negative market impact of a public project peaking at the time of the announcement and again at the start of construction and then declining over time. Thus market selection and risk reduction along with the loss of intense public focus on the negative aspects of the project lessen the perceived market impact over time. I refer to this as the “wave theory” or the “valve response wave theory”.
The question is not for the adjudicator to decide at which point should the impact be measured in order to properly compensate the expropriated owner. The adjudicator should usually measure the impact when it is most severe because the valuation date normally is associated with the commencement of the project as the land of the owner is undoubtedly essential to the undertaking. The problem for the adjudicator is to sort out which of the evidence, whether by paired sales analysis or otherwise, reflects which part of the wave of the value impacts.