August 6, 2003, ECB Control No.: 11/03/239

REASONS FOR DECISION

1.  Introduction

[1]  The applicant, the District of North Vancouver, ("the District") has brought a Notice of Motion pursuant to section 11 of the Expropriation Act, R.S.B.C. 1996, c. 125 ("the Act"), for an Order that the Notice of Request for Inquiry filed by the respondent owner, 2725312 Canada Inc., ("the Owner") on May 28, 2003 is frivolous, vexatious, or not made in good faith or in the alternative is based solely on a claim for compensation and that accordingly the request for inquiry should be denied.

[2]  Two affidavits were filed which set out the background evidence. One of these was from Irwin Torry, a planner who is Manager of Community Planning for the District, and the other was from Sandra Franke, Asset Manager for Penreal Capital Management, a company that manages certain lands for the Owner including the subject lands.

[3]  The District is planning a new Lynn Valley Library and Town Centre Project to include a public library, a neighbourhood police office, a public square, and an office, retail and restaurant component ("the Project"). The development of the Project is a central part of the Lynn Valley Local Plan adopted by District Council on April 6, 1998.

[4]  The subject lands are located at 1239-1243 Ross Road in North Vancouver, British Columbia. The legal description is:

PID 013-347-446
Lot 1, Block 57,
District Lot 2022,
Plan 2881

There is a two storey building that used to be occupied by a meat market and a dry cleaning business on the subject lands. This building is currently vacant and boarded up.

[5]  The Owner also owns adjacent lands occupied by the Lynn Valley Shopping Centre. Penreal Capital Management manages the shopping centre for the Owner as well as the subject lands. The shopping centre is currently listed for sale.

[6]  The District was in correspondence with agents for the Owner since December 2001 with respect to the Project and various factors that might affect the shopping centre or the Project. In August 2002 the District indicated that they might want to purchase what I presume were the subject lands. In the fall of 2002 there were meetings between the District and Penreal Capital Management, on behalf of the Owner, with respect to the purchase of the subject lands and Penreal's concerns about the potential impacts of the Project on the shopping centre. There was correspondence between Sandra Franke, Asset Manager for Penreal Capital Management and the District that set out these concerns. The primary concern was the number of parking spots that would be provided by the Project and the orientation of the Project, including the location of entrances and windows, so that use of the shopping centre parking spots by visitors to the Project would be discouraged. Penreal stated that these concerns had to be addressed in order for them to recommend the District's purchase of the subject lands to the Owner. There were other issues about access to the shopping centre but these appear to have resolved. The District refused to agree to Penreal's specific requests about the parking spots and aspects of the orientation and eventually the District issued an Expropriation Notice dated April 29, 2003 in which it sets out its intention to expropriate the subject lands. The stated work or purpose for which the interest in the land is required is for the construction, development and operation of a new town centre as described above in paragraph 3. The Expropriation Notice was filed in the Vancouver/New Westminster Land Title Office on April 30, 2003.

[7]  The Owner filed a Notice of Request for Inquiry with the Expropriation Compensation Board on May 28, 2003. The reasons for requesting the inquiry are:

The Owner says that the Land is not necessary for the … District's Project given that they have indicated through their plans and discussions with the Owner that they do not need the Land as part of their Project.

On certain versions of the plan for the Project provided to the Owner, no portion of the proposed building [was] to be located on the Land.

The Land is not required for parking access or any other use for the Project.

The plans and correspondence relating to the Project indicate that the District wants the Land at best to justify a higher floor space ratio. Given that the District is the owner of the balance of the property on which the Project is to be built and the District establishes the floor space ratio, the District does not need the Land to justify a higher density on the balance of the Project site.

2.  Statutory Framework

[8]  The statutory framework for this application is as follows:

Request for inquiry

10 (1) In this section, "linear development" includes a highway, a railway, a hydro or other electric transmission or distribution line, a pipeline or a sewer, water or drainage line or main.

(2) An owner whose land is included in an expropriation notice, other than an expropriation notice in respect of an expropriation for the construction, extension or alteration of a linear development, may request an inquiry by serving the board with a notice of request for an inquiry.

(3) A notice of request for an inquiry must

(a) be in writing,

(b) contain the name and address of the person making the request, his or her interest in the land to be expropriated and his or her reasons for requesting an inquiry, and

(c) be served on the board and the expropriating authority within 30 days after the date the expropriation notice is served under section 6(1)(a).

Power to deny requests

11 (1) The board may order that a request for an inquiry under section 10 be denied if, on the application of the expropriating authority and after granting both parties the opportunity to be heard, the board considers that

(a) the request for an inquiry is

(i) frivolous, vexatious or not made in good faith, or

(ii) based solely on a claim for compensation, or

(b) the person who requested the inquiry has, at a previous hearing or otherwise, already had substantially the same opportunity to object to the expropriation that he or she would have at an inquiry under this Act.

(2) If an order is made to deny the request under subsection (1), the board must promptly serve a copy of the order, together with the reasons for making it, on the person who requested the inquiry and on the expropriating authority.

Inquiry

14 (1) The inquiry officer must hold a public hearing for the purpose of inquiring into whether the proposed expropriation of the land is necessary to achieve the objectives of the expropriating authority with respect to the proposed project or work, or whether those objectives could be better achieved by

(a) an alternative site, or

(b) varying the amount of land to be taken or the nature of the interest in the land to be taken.

(2) The necessity for the project or work for which the expropriation is sought must not be considered at the inquiry.

(3) The inquiry officer may combine 2 or more inquiries that are related and conduct them for all purposes as one inquiry.

(4) A participant in the inquiry may

(a) be represented by counsel or agent,

(b) present evidence and argument, and

(c) examine and cross examine witnesses and other participants in the inquiry.

Modification of expropriation

16 (1) Before the conclusion of the inquiry, the expropriating authority may alter the expropriation by adding or deleting land from it.

(2) If the expropriation is altered, the expropriating authority must file in the land title office an amended expropriation notice in accordance with section 6(4) and serve it on

(a) the inquiry officer,

(b) every participant in the inquiry,

(c) each owner of land added or deleted by the amendment, and

(d) the approving authority.

(3) A person served under subsection(2)(c) may become a participant in the inquiry, and the inquiry officer may adjourn the inquiry for a period not exceeding 30 days from the time the person was served.

Report of inquiry officer

17 Subject to an adjournment under section 16(3), unless the time is extended by the chair or a member of the board, an inquiry officer must, within 30 days after the first day of the inquiry, submit to the approving authority and every participant in the inquiry, a written report of the inquiry officer's findings of fact and recommendations with respect to the proposed expropriation.

Part 4 -- Expropriation

Decision of approving authority

18 (1) After considering the report submitted under section 17, the approving authority must approve, approve with modifications or reject the expropriation, but an expropriation must not be modified so as to affect land of a person who was not a participant in the inquiry.

3.  The District's Position

[9]  The District says that the Owner's concerns are set out in the correspondence attached as exhibits to the affidavits. These concerns are with respect to the impact of the Project on the owner's other lands occupied by the shopping centre. As indicated above, they focus primarily on aspects of the Project that would discourage visitors to the Project from using parking spots in the shopping centre. Section 11 of the Act sets out the basis whereby the board is to exercise its discretion in considering an application that the request for an inquiry be denied. Section 11 must be read with section 14 of the Act that sets out the purpose of the inquiry as to whether the proposed expropriation is necessary to achieve the objectives of the expropriating authority with respect to the proposed project or whether those objectives could be better achieved by an alternative site or varying the amount of land to be taken. The Owner in this case has never exhibited any concern to date about the fact that the subject lands were being taken. Nor has it exhibited any concern that less of its land be taken. The Owner's stated concerns about the number of parking stalls provided by the Project and the orientation of the Project cannot be addressed by the inquiry officer.

[10]  The District says that since the scope of the inquiry officer's authority bears no relationship to the Owner's stated concerns, the request for an inquiry is frivolous, vexatious or not made in good faith and should be denied under section 11(1)(a)(i). Alternatively, the Owner's request for an inquiry is based solely on compensation and should be denied on that basis.

[11]  In answer to the Owner's submissions, the District says that case law about the interpretation of frivolous and vexatious under Rule 19(24) of the Supreme Court Rules has no application to the interpretation of section 11 of the Act.

4.  Owner's Position

[12]  The Owner says that it never agreed to the District's acquisition of the lands. The right to an inquiry does not crystallize until the expropriation of the land. The District's submission suggests that an owner needed to specifically object to the acquisition of its lands while it was engaging in negotiations as to the sale of its property to the District. The Owner says that such a requirement would be absurd and nothing in the Act or case law supports such an interpretation.

[13]  The Owner has complied with the statutory provisions and filed a Notice of Request for Inquiry that states the subject lands are unnecessary to achieve the objectives of the District's proposed Project.

[14]  The Owner says that under the Act it has a prima facie right to request an inquiry. The Owner goes on to compare this right to request an inquiry to the right to bring an action in the Supreme Court. Under Rule 19(24) of the Supreme Court Rules the pleadings of an action can be struck out when they are unnecessary, scandalous, frivolous or vexatious. The test under section 11 to deny an inquiry, should be like the test under Rule 19(24) to strike pleadings: only where it is "plain and obvious" and "absolutely beyond doubt" that the request for an inquiry offends one or more of the criteria in section 11 of the Act.

[15]  In particular, the Owner denies that its request for an inquiry was frivolous, vexatious or not made in good faith. The cases interpreting the word frivolous in Rule 19(24) have used it to describe pleadings that are without substance, unsustainable, groundless, fanciful, trifling with the court or wasting time. See McLachlin and Taylor, British Columbia Practice (2nd ed.). Characteristics of vexatious pleadings have been said to include bringing an action:

a) to determine an issue that has already been determined by a court;

b) where it is obvious that the action cannot succeed, or if the action would lead to no possible good, or if no reasonable person can reasonably expect relief;

c) for an improper purpose including harassment by multifarious proceedings for purposes other than the assertion of legitimate rights;

d) in which grounds and issues have been rolled forward into a subsequent action;

e) in persistently taking unsuccessful appeals.

See Ebrahim v Ebrahim 2002 BCSC 466. Finally the Owner asserts that the request for an inquiry was made in good faith and was not based solely on compensation. The Owner submits that its request for an inquiry cannot be characterized in any of these ways.

[16]  As a result the Owner says that there is no merit in the District's application and it should be denied.

5.  Analysis and conclusion

[17]  As the statutory framework sets out, where an inquiry is held the inquiry officer appointed by the board must hold a public hearing for the purpose of inquiring into whether the proposed expropriation of the land is necessary to achieve the objectives of the expropriating authority with respect to the proposed project. The inquiry officer has the alternative of considering whether the objectives of the expropriating authority could be better achieved by an alternative site or by varying the amount of land to be taken or the nature of the interest in the land to be taken. After conducting the public hearing, the inquiry officer must submit a written report of his or her findings of fact and recommendations with respect to the proposed expropriation to the approving authority and the participants in the inquiry. Those recommendations are not binding on the approving authority, which after considering the report may approve, approve with modifications or reject the proposed expropriation.

[18]  In Walters v. Essex County Board of Education (1971), 20 D.L.R. (3d) 386 (Ont. H.C.) the purpose of an inquiry is set out as follows at 392:

The chief purpose of the inquiry of course seems to be to ensure that nothing has been overlooked and that the approving authority before it makes its final decision has placed before it all relevant information which may be of assistance to them.

However, it is the approving authority which has the final say as to whether the expropriation will proceed. The court stated that even when the inquiry officer had reported that the expropriation of certain land for a secondary school was in his opinion "indefensible" and "not fair or sound and should not be approved" the approving authority could nonetheless decide to expropriate. The Supreme Court of Canada, affirmed this decision at (1973), 5 L.C.R. 144; 38 D.L.R. (3d) 693.

[19]  This somewhat constrained ability to object to an expropriation can not be invoked by every owner. Where the expropriation is for a linear development an owner in British Columbia has no right to request an inquiry. The expropriating authority can also apply for the request to be denied on the grounds that it is frivolous, vexatious or not made in good faith, or in the alternative based solely on a claim for compensation. The request can also be denied where the owner has already had an opportunity at a previous hearing to object to the expropriation. In Re Calgary Power Ltd and Henkel (1976), 10 L.C.R. 136 the Alberta Court of Appeal in effect denied an inquiry when the owner had already had an opportunity to raise substantially similar objections to the expropriation in a previous hearing. The Court reviewed the written reasons in the earlier matter and determined that they were in large part a response to the owner's objections to the expropriation.

[20]  In this case the Owner has filed its request and the District has applied for an order that the request be denied under section 11(1) because it is frivolous, vexatious or not made in good faith, or in the alternative based solely on compensation. The District says that the Owner's concerns about parking as evidenced in the correspondence cannot be addressed by the Inquiry Officer under section 14.

[21]  I do not find it necessary to resort to a comparison with Rule 19(24) in order to consider how to interpret section 11 of the Act. Frivolous is defined in the Concise Oxford Dictionary, 6th ed., as paltry, trifling, and futile. Black's Law Dictionary, 5th ed., defines it as of little weight or importance. Frivolous pleadings are characterized as being clearly insufficient on their face and presumably interposed for mere purposes of delay or to embarrass the opponent. According to the Concise Oxford Dictionary vexatious is defined as causing or tending to cause vexation; not having sufficient grounds for action, seeking only to annoy. Black's Law Dictionary defines vexatious as without reasonable or probable cause or excuse. A vexatious proceeding is characterized as one where the party is not acting bona fide, and merely wishes to annoy or embarrass his opponent, or when it is not calculated to lead to any practical result.

[22]  In this case, it is true that the Owner has changed tack. While the Owner exhibited certain concerns during negotiations prior to the expropriation, now in its request for an inquiry it is expressing different concerns as to whether the expropriation is necessary. The difficulty with the District's position is that the reasons set out in the request for an inquiry fall squarely within the inquiry officer's role as set out under section 14. The request for an inquiry is neither clearly insufficient on its face nor without reasonable cause. On this ground alone I cannot find that the request is frivolous and vexatious. Further, I am not able to say that there could be no practical result from an inquiry even though the consequences from any inquiry are limited.

[23]  The District wants the board to infer from the fact that the Owner has set out new objections in the request for an inquiry that the Owner is not bona fide and is bringing the application to annoy or delay the District, or perhaps to better its tactical position in negotiations with the District. Even if I assume that these are the Owner's motives, there must be more than a mere inference or suspicion to establish that a request for an inquiry is frivolous and vexatious. There must be other indicia that the request for an inquiry has little basis, and is being brought only to annoy or for some purpose other than objecting to the expropriation as provided in section 14 of the Act. One such factor might be that the request for an inquiry was deficient on its face and could not succeed. Another might be that the claimant continued to bring forward objections that had already been considered in a previous application or hearing, even after a ruling that was contrary. It would also include any conduct that provided clearer evidence that the purpose for the request for an inquiry was something other than the inquiry officer determining whether the proposed expropriation was necessary to achieve the objectives of the expropriating authority.

[24]  Finally, I am unable to conclude that the request for the inquiry is based solely on compensation.

[25]  As a result, I must deny the District's application. The Owner's Notice of Request for Inquiry stands and an inquiry officer will be appointed by the board.