Court file no.

: 12023 /01

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: WILFRED ROBERT PEARSON Plaintiff - and -

INCO LIMITED, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, THE CORPORATION OF THE CITY OF PORT COLBORNE, THE REGIONAL MUNICIPALITY OF NIAGARA THE DISTRICT SCHOOL BOARD OF NIAGARA, and THE NIAGARA CATHOLIC DISTRICT SCHOOL BOARD

Defendants

AFFIDAVIT OF BILL BERKHOUT Sworn April , 2002

I, BILL BERKHOUT, of the City of Welland in the Regional Municipality of Niagara, MAKE OATH AND SAY:

1.

I am a licenced real estate broker, and as such I have knowledge of the matters to which I herein depose, save and except where I have been advised of the same, in which case I believe such information to be true.

Professional and Personal Background 2. For the past 27 years I have sold real estate in the Niagara Pennisula, first as a licenced sales person and then as a licenced real estate broker. I am currently the co-owner and co-principal broker of Re/Max Welland Realty Limited (Re/Max Welland).

3.

Re/Max Welland employs 29 sales persons/brokers, who work from our offices in Welland and Port Colborne, Ontario. Re/Max Welland currently leads all other realtors in property sales in both the Port Colborne and Welland markets.

4.

In addition to my professional background, I was born and raised in Port Colborne, and have lived in the Welland or Port Colborne area for most of my life. Consequently, both professionally and personally I am familiar with the Niagara Region in general, and the real estate market in Niagara in particular.

5.

In order to swear this affidavit, I have reviewed the draft affidavit of Rose Wallington, and I have consulted with various members of my staff in our Welland and Port Colborne offices. I now wish to provide the following comments.

The Niagara Area Real Estate Market 6. Based on my knowledge and experience in the Niagara Region real estate market, initially I would observe that when attempting to assess the Port Colborne market as a whole and compare it to other areas, the markets of Fort Erie and Welland would generally be

reasonably similar and comparable. These markets border on Port Colborne, are reasonably similar in size (approximately 1.5 and 2.5 times Port Colbornes population respectively) and have a mix of heavy industry, light industry, service businesses and tourism.

7.

At the same time, the Niagara Falls market is significantly different. It is much larger, with a population more than 4 times greater than Port Colborne. Geographically it is a considerable distance away, and is influenced by its location and by the Falls themselves, a very unique feature. Its commercial base and job market is heavily influenced by a fluctuating tourism industry, which is not the case in Port Colborne. Finally, in the past few years Niagara Falls economy and housing market have been heavily influenced by the opening of Casino Niagara, which also has no parallel in Port Colborne.

The Port Colborne Real Estate Market 8. Within Port Colborne itself, the real estate market is divided into various areas and districts.

9.

First, the splitting of the community by the Welland Canal into East and West Port Colborne has both symbolically and practically divided the market. Historically houses in West Port Colborne have always sold for higher prices. Even within East Port Colborne, where prices have traditionally been lower, the homes in the Rodney Street area (generally defined as the area between Rodney Street, Davis Street, Durham Street and Welland Street and also know by some as Lidsville) have historically been lower again.

10.

At the same time, independent of West and East Port Colborne and Rodney Street / Lidsville are the upper end properties, most of which are located along the shoreline of Lake Erie in both the West and East parts of the city. Historically, these properties have been a market unto themselves, with many U.S. vendors and purchasers, and prices in the range of $250,000 Cdn up to $800,000 Cdn (2002 dollar valuations). The volume of sales in this market is very low, but the dollar value of these sales is high in proportion to the rest of Port Colborne. However, because of the unique and exclusive nature of these types of properties, this market generally performs almost wholly independent from the balance of Port Colborne real estate.

Port Colbornes Contamination Issue 11. I have reviewed the draft affidavit of Rose Wallington and the charts that accompany it. As the charts show, since high levels of contamination were announced on Port Colbornes East side (and particularly in the Rodney Street area) in 2000, there has been a substantial decrease in the average house sale price within that area. Similarly, while not as dramatic, there has also been a decline in property values on the East side of the community as a whole. While the West has experienced a continued increase in average property prices, this increase has not kept pace with either Fort Erie or Welland property values. These findings are consistent with my own observations of the market, and those of my staff in our Port Colborne office who I have consulted with.

12.

To the best of my and my staffs knowledge, the only major event that has taken place in Port
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Colbornes real estate market since October of 1998 is the announcement of contamination in the Rodney Street area.

13.

Especially in the Rodney Street area, interest in properties has been very limited, offers and sales have been slow, and in some cases owners who wish to sell are not even listing properties in recognition of the fact that the likelihood of located a willing buyer for a reasonable price is low.

14.

Since the announcement of contamination I have also observed, as have our agents, that in addition to affecting property sales and prices, the ability to find suitable mortgage financing has been affected. More specifically, from my direct experience, particularly in the commercial real estate market Port Colborne has effectively been black listed by most major financial institutions. Consequently, prospective mortgagors are being forced to deal with secondary or private lenders (if financing can be located) and then must pay an increased rate of interest to deal with these sources of funding. I am advised by members of my staff that they have observed similar difficulties in the residential housing market.

15.

I am also aware that within the Rodney Street area in particular many properties are purchased as investments, with the owner then renting space to tenants to generate income. The sale of these properties has almost ceased, as investors are reluctant to put money into an area where contamination has already been established and financing is difficult to obtain. I am also aware from staff in our Port Colborne office that many rental units in the area have
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been vacated and remain unoccupied. I would also note that all of the sales in the Rodney Street area of single family homes in 2001 were pursuant to Power of Sale, which I would take to be another indication of a declining market, ie. there is no other market for these properties.

16.

I make this affidavit in support of the plaintiffs motion for certification and for no improper purpose.

SWORN BEFORE ME at the City th of Welland, this day of April, 2002

) ) ) ) ) BILL

BERKHOUT ) A commissioner etc. )