A Maze in Corn Inc v Manitoba Emergency Measures Organization et al., 2023 MBCA 92
Written by Kyle Wilfer
Introduction
This case provides important information regarding the compensation owed to private property owners (including corporations) when an expropriation event damages property or causes economic loss. A Maze in Corn Inc v Manitoba Emergency Measures Organization et al.,[1], involves a judicial review of the Manitoba Disaster Assistance Appeal Board’s (DAAB) decision, which upheld the compensation notice issued by the Emergency Measures Organization (EMO). The Appellant (A Maze in Corn Inc), whose property was subjected to induced flooding by the City of Winnipeg, contested this decision. This case report will include the nuances of the Manitoba Court of Appeal’s decision and a concluding comment describing its impact.
The Court’s Decision
This case focuses on the Red River Compensation Program established by the Red River Floodway Act (RRFA),[2] and the Floodway Compensation Regulation (FCR).[3] This program aims to compensate eligible applicants who sustain property damages and economic loss due to artificial flooding from the Red River Floodway. This function is triggered when the Manitoba Department of Water Stewardship approves a diversion of water from the floodway to properties south of Winnipeg to prevent the damage of property within the city. In 2019, the flood waters’ diversion directly affected A Maze in Corn Inc, leading them to submit a claim for up to $1,161,789.05 in damages. This amount included claim categories such as legal and expert fees, brand damage, and loss of opportunity. Ultimately, the EMO rejected these claim categories, and determined the full compensation amount as $181,559.15.
The court focuses on the nature of constructive taking that is at the heart of the claim in the case to assess the Appellant’s eligibility for compensation. According to the Supreme Court of Canada in Annapolis Group Inc. v. Halifax Regional Municipality,[4] “constructive taking” is a preferable term for expropriation through the means of government regulation and essentially captures the nature of the state actions effect on private property owners. Moreover, “[a] ‘taking’ is a ‘forcible acquisition by the Crown of privately owned property . . . for public purposes’”.[5] In Annapolis, the majority (represented by the joint reasons of Justices Coté and Brown) found that when the state accrues a beneficial interest and removes the reasonable use of property, a constructive taking has occurred.[6] As there was a benefit to the state through the diversion of the flooding, and a loss of land use by the Appellant, it was clear to the Court that there was a constructive taking.[7]
The court disagrees with the EMO’s position and interprets the RRFA as broadly defining economic loss in determining the proper compensation scheme for A Maze in Corn Inc. Within this scope, the court emphasizes the importance of making the property owner “economically whole.”[8] As such, the court found that the claim categories, including future and anticipated economic losses, interest, and professional and legal costs, are compensable under the RRFA and FCR.[9]To remedy the dispute, the court referred the matter back to the EMO to reconsider these previously denied claim categories.[10]
Conclusion
This case provides a nuanced understanding regarding the impact of government actions on the private interests of businesses and property owners. This decision navigates the interplay between businesses’ property rights and the government’s obligations to expropriate property in extraordinary circumstances. The case’s holistic approach presents a scenario where administrative bodies need to consider the surrounding circumstances, consequences of property damage, and the impact of expropriation when deciding on the compensation afforded to the owner. The court’s interpretation of the RRFA and FCR lends itself to a compensation scheme that underscores the recognition of various tangible and intangible economic losses suffered by private property owners as a result of expropriation.
[1] 2023 MBCA 92, per Justice Beard, for the Court.
[2] Red River Floodway Act, CCSM c R32.
[3] Floodway Compensation Regulation, Man Reg 209/2009.
[4] Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36.
[5]Ibid, at para 18.
[6] Ibid at para 4.
[7] Supra note 1, at paras 60-61.
[8] Ibid at paras 64-71.
[9] Ibid, at paras 96-102.
[10] Ibid, at paras 106-113.
The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.