December 28, 2001, ECB Control No.: 12/00/216

REASONS FOR DECISION

1.  BACKGROUND

[1]  The claimants, Donna Marie Chivers and Gary Carnegie Chivers, are the registered owners in fee simple of a large parcel of property located some 50 km. north of Kamloops, British Columbia, and legally described as P.I.D. 004-487-427, District Lot 47, Kamloops Division, Yale District, except Plans A221, 17504, Parcel 55 on Plan A249, and H914 (the "property" or "D.L. 47"). The respondent, Her Majesty the Queen in Right of the Province of British Columbia, by the Minister of Transportation and Highways, expropriated a small portion of the property in June, 1999 for a highway widening project on the Yellowhead Highway No. 5 in the vicinity of Badger Creek.

[2]  The claimants filed with the board an application for determination of compensation (the "Form A") on March 6, 2000, and an Amended Form A on March 26, 2001. The respondent in turn filed its reply (the "Form B") on June 5, 2000, and an Amended Form B on May 8, 2001. The parties have been preparing their cases for hearing, including exchanging lists of documents, holding examinations for discovery, and retaining experts.

[3]  Initially, the compensation hearing was formally scheduled to take place in Kamloops over a ten day period beginning on June 4, 2001. By consent the parties agreed to adjourn the hearing and to have it scheduled instead for five successive days beginning on December 3, 2001. During the course of this interlocutory proceeding, the parties acknowledged that more than five days would be required to hear the compensation claims in this matter. With the consent of the board, they agreed to adjourn further the compensation hearing, which is now scheduled to take place in Kamloops for a ten day period beginning on February 11, 2002. Depending on the outcome of the present applications, I was advised, a further five day period may be required.

2.  APPLICATIONS

[4]  The respondent and the claimants respectively have applied to the board for various interlocutory orders and determinations in respect of the claimants' claims for compensation.

[5]  On October 4, 2001, the respondent filed with the board a notice of motion seeking an order that the claimants' claim set out in paragraph 2 of Schedule "A" (the "statement of claim") within the Amended Form A be dismissed.

[6]  On October 19, 2001, the claimants filed with the board a notice of motion seeking orders determining whether the board has jurisdiction summarily to dismiss a claim, granting leave to amend their Amended Form A, and scheduling two additional weeks for the hearing of their claim. On October 22, 2001, the claimants filed a further notice of motion for an order compelling the respondent to produce tender documents for its highway widening project.

[7]  I heard all of these motions together on November 1, 2001, in my capacity as chair of the board and in exercising the powers and jurisdiction of the board under section 26(5) of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Expropriation Act" or the "Act"). The hearing lasted for approximately three hours with written submissions and books of authorities also being provided.

3.  THE MOTION TO DISMISS

3.1  The Pleadings

[8]  Para. 2 of the statement of claim to the claimants' Amended Form A states:

"2.	The respondent expropriated 70,000 cubic metres of gravel for use in its highway construction project. That gravel had a royalty value to the claimants of $2.00 per cubic metre. The claimants claim 70,000 x $2.00;     $140,000"

Para. 2 asserts a new claim which had not been made in the claimants' original Form A. It is only one of several heads under which the claimants seek compensation in respect of the partial taking of their property.

[9]  At para. 9 of its Amended Form B the respondent denies that it extracted 70,000 cubic metres of gravel from the expropriated area and says, in effect, that the correct figure is approximately 25,042 cubic metres. Para. 9 then continues:

"The Respondent denies that the Claimant is entitled to any royalties for any amount of gravel which the Respondent extracted, since the Crown Grant with respect to the Lands expressly reserves rights in the Crown to take gravel from the Lands for the purpose of constructing a highway without compensation."

[10]  It is in reliance on the terms of the Crown grant that the respondent now seeks to have the claimants' claim for royalties on the extraction of gravel dismissed in advance of the compensation hearing. In support of its application, the respondent has provided two sworn affidavits: that of Hugh Trenchard, a legal assistant employed with the Legal Services Branch of the Ministry of Attorney General, and that of Roderick William Schoof, a professional engineeer and the project manager for the respondent's highway widening project.

3.2  Preliminary Matters

[11]  Several steps to which I should refer preceded the hearing of this motion. First, the claimants requested the board to issue a summons to witness to Mr. Schoof as well as a summons to one Logan Stewart who, until recently, was the director of properties for the Ministry of Transportation and Highways. Claimants' counsel, Reinhard Burke, in a letter to the board of October 19, 2001, explained that since the respondent was relying on the Crown grant as the basis for summarily dismissing the claimants' claim for compensation for gravel, the claimants wished to call Mr. Stewart to give evidence concerning whether or how the Ministry in the past had exercised its rights under such Crown grants. They wished to call Mr. Schoof to give evidence concerning, among other things, whether or in what way the Ministry had contracted to supply the highway contractor with the gravel on the claimants' lands. Having reviewed this explanation, I issued the two summonses to witness on October 19, 2001.

[12]  On October 24, 2001, the respondent filed with the board a notice of motion for an order setting aside or cancelling the summonses which had been issued. I heard this application on short notice by teleconference on October 25, 2001. Because respondent's counsel having conduct of this file, Carolyn Bouck, was unavailable on another hearing at the time, her colleague Alan Hincks appeared for the respondent on this application. He argued that the respondent's application was to "strike out" the claimants' gravel royalty claim in light of the Crown grant and that, since this application was interlocutory in nature, it was contrary to customary practice and inappropriate in the circumstances to require the attendance of witnesses.

[13]  Considerable discussion ensued as to the true nature of the respondent's application to dismiss, that is, whether it was intended to proceed with reference to Rule 19(24)(a) of the Rules of Court, B.C. Reg. 221/90, where a claim may be struck out as disclosing no reasonable cause of action, or with reference to Rule 18A, where a party may apply for judgment on an issue raised in the pleadings and which is in the nature of a summary trial. No evidence is admissible on an application under Rule 19(24)(a), whereas evidence may be adduced under Rule 18A including, in limited circumstances, viva voce evidence. Mr. Burke for the claimants acknowledged that, if the question to be decided was one of pure law pursuant to Rule 19(24)(a), then the summonses would be unnecessary and the affidavits irrelevant. He offered to have the claimants plead the Crown grant so that it would be before the board on an application to strike out the claim.

[14]  At the conclusion of the teleconference hearing on October 25, 2001, I ordered that the two summonses to witness be set aside, granted leave to the claimants to amend their pleadings to include the Crown grant, and requested Mr. Hincks to obtain clarification from his colleague, Ms. Bouck, as to how the respondent proposed to proceed on this application. The respondent in due course advised the claimants and the board that it intended the application to go forward as a Rule 18A-type summary hearing. The claimants did not amend their Amended Form A to plead the Crown grant.

3.3  The Respondent's Case

[15]  At the hearing of the motion to dismiss the claimants' gravel royalty claim on November 1, 2001, the respondent submitted that the board has jurisdiction to consider an application summarily to dismiss aspects of a claim and can rely on the procedure found in Rule 18A of the Supreme Court Rules. Ms. Bouck cited the board's decision in Okanagan Dairy Transport Ltd. v. Vernon (City) (1995), 57 L.C.R. 211, aff'd. (1997), 61 L.C.R. 90 (B.C.C.A.), in support of that proposition. The respondent also referred to the decision in Country Style Holdings Inc. v. British Columbia (Ministry of Transportation and Highways) (1993), 51 L.C.R. 1, in which the board found that it had jurisdiction to sever issues of liability and quantum. Alternatively, the respondent said, the board has found that it has jurisdiction to strike out pleadings pursuant to Rule 19(24)(a) where no reasonable claim is disclosed: Roadmaster Auto Centre Ltd. v. Burnaby (City) (1994), 53 L.C.R. 161.

[16]  In the respondent's submission, a summary determination of the claimant's gravel royalty claim is appropriate for several reasons:

• Dismissal of the claim will eliminate the time and expense required to prepare expert and other evidence for hearing;
• Elimination of this issue will significantly reduce the time required for the hearing of the entire claim;
• Even if the board finds in favour of the claimants, the determination of this issue will obviate the need to adduce evidence on and to argue the question of liability at the compensation hearing itself;
• The evidence necessary to determine the issue can be found in the Schoof affidavit, to which is annexed a copy of the Crown grant.

[17]  According to the respondent, a summary hearing on the claimants' gravel royalty claim meets the tests set out in Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), 36 B.C.L.R. (2d) 202 (C.A.), the leading case authority on the use of Rule 18A, in that the board is able "fairly and justly" to find the facts necessary to decide this one issue. With reference to the Country Style Holdings decision, the respondent says it is also both "beneficial and equitable" in this instance to determine the threshold issue of liability or entitlement.

[18]  Addressing the substantive basis for its application, the respondent recites the relevant provision of the Crown grant in question, which states:

"Provided also that it shall be at all times lawful for any person duly authorized in that behalf by Us, Our heirs and successors, to take from or upon any part of the hereditaments hereby granted, without compensation, any gravel, sand, stone, lime, timber, or other material which may be required in the construction, maintenance, or repair of any roads, ferries, bridges, or other public works."

[19]  In the respondent's submission, the Crown grant must be interpreted according to its plain meaning and the words of the grant in this instance are clear. In any case, where the words of a Crown grant are ambiguous, case authority shows that the general practice is to construe the grant in favour of the Crown: Lieding v. Ontario (1991), 15 R.P.R. (2d) 54 (Ont. C.A.) at pp. 62-63; Attorney-General for Alberta v. Majestic Mines Ltd., [1942] 4 D.L.R. 593 (S.C.C.) at p. 596; Canada (Attorney-General) v. Bonhomme (1917), 16 Ex. C.R. 437 (Ex. Ct.) at para. 11.

[20]  The respondent points out that, by the operation of section 50(1) of the Land Act, R.S.B.C. 1996, c. 245, the Crown's rights under the grant continue to apply through subsequent dispositions of the land. Section 50(1) provides in part:

50 (1)	A disposition of Crown land under this or another Act
	(a)	excepts and reserves the following interests, rights, privileges and titles:
		(iv)	a right in any person authorized by the government to take from any part of the land granted, without compensation, gravel, sand, stone, lime, timber or other material that may be required in the construction, maintenance or repair of a road, ferry, bridge or other public work.

[21]  According to the respondent, its extraction of gravel or other materials from the claimants' property does not constitute an expropriation and therefore the board has no jurisdiction to order the payment of compensation. The respondent refers to the operative definition of "expropriate" in section 1 of the Act:

"expropriate" means the taking of land by an expropriating authority under an enactment without the consent of the owner, but does not include the exercise by the government of any interest, right, privilege or title referred to in section 50 of the Land Act;

[22]  The respondent also argues that the board's jurisdiction to order the payment of compensation for any gravel or other materials extracted is, in effect, ousted by the operation of sections 12(2) and (4) of the Highway Act, R.S.B.C. 1996, c. 188. While section 12(2) provides that the Expropriation Act applies to proceedings under the Highway Act, section 12(4) gives an absolute discretion to the minister to decide whether to pay compensation in circumstances where a Crown grant permits gravel and other material to be taken without payment. The respondent says that the board may not override the minister's absolute discretion by making its own determination of compensation.

[23]  Finally, the respondent makes reference to para. 1 of the statement of claim in the Amended Form A, wherein the claimants' plead:

"l.	The respondent has made an advance payment of $11,201 for the land and improvements expropriated. The claimants accept that payment in satisfaction of the land and improvements taken."

The respondent says that gravel is included in the fee simple interest in the land and, accordingly, the claimants, in accepting the advance payment, also accept that they have been compensated in respect of any claim for gravel.

3.4  The Claimants' Case

[24]  The claimants submit that the respondent's application to dismiss their gravel royalty claim has no merit and must be dismissed for at least five reasons. Although Mr. Burke in his submissions addressed the questions of entitlement first, I prefer to set out the claimants' jurisdictional and evidentiary arguments, as I did with the respondent, before turning to what the claimants say are the substantive reasons why the motion must fail.

[25]  The claimants say, firstly, that there is no statutory authority to bring such a motion. Mr. Burke referred to section 7(1) of the Expropriation Compensation Board Practice and Procedure Regulation, B.C. Reg. 452/87 (the "Practice Regulation"), which states:

7. (1) Except as otherwise provided by the Act or regulations, proceedings before the board for any order, decision or determination, other than the determination of compensation pursuant to an application to determine compensation, shall be commenced by notice of motion in Form D. (Emphasis added)

[26]  Since the respondent is seeking from the board a determination as to whether the claimants can recover compensation for gravel on the expropriated property, Mr. Burke argues, this is a matter which cannot be decided through an interlocutory proceeding pursuant to section 7(1) of the Practice Regulation where viva voce evidence has been excluded. The respondent, he suggested, might have asked for an order that the impugned para. 2 of the statement of claim in the Amended Form A be severed from the balance of the claim and heard separately. Had such an order been made, the matter could then have proceeded as a compensation hearing on that severed portion only. All relevant evidence, including that of witnesses, would then have been available. However, the respondent did not make any such request.

[27]  Secondly, the claimants submit, the board has no jurisdiction summarily to dismiss the claim on the respondent's motion. In a letter to respondent's counsel dated October 1, 2001, a copy of which is annexed to Mr. Trenchard's affidavit, Mr. Burke made clear the claimants' position that the board has no such authority. His letter continued:

"It will also be my submission to the Board that it is compelled to hear the claim and allow parties to adduce evidence and argue the claim fully. In my view the Board has not yet been conferred with the type of jurisdiction that the Supreme Court has to summarily adjudicate and dismiss a claim."

[28]  In particular, according to the claimants, Rule 18A of the Supreme Court Rules upon which the respondent seeks to rely does not apply to these proceedings. Although the board had reference to Rule 18A in the Okanagan Dairy decision, the claimants argue that that case was a unique circumstance where most of the claims were summarily dismissed after weeks of evidence had already been heard and following a lengthy adjournment of the compensation hearing. Mr. Burke suggested that the Court of Appeal, although dismissing the appeal from that decision, was not persuaded that the board in general possessed such summary powers.

[29]  As Mr. Burke expressed it, what is remarkable about the respondent's motion in the present instance is that it seeks to have a claim dismissed on a summary hearing basis, even though no evidence has been heard, on the grounds that the claim is bound to fail and that to dismiss it now will result in saving costs. If saving costs is the test to be applied, he added, the same argument could be made in order to have every claim before the board subjected to a summary dismissal process.

[30]  The claimants say, thirdly, that there is no admissible evidence before the board to support a Rule 18A-type determination. Rule 18A, they contend, precludes evidence based on information and belief and hearsay. In that respect the Trenchard affidavit, which reiterates allegations of fact, claims and denials set out in the pleadings and relies on advice received from counsel for the respondent as to how the respondent proposes to address the gravel royalty claim, should be found to be inadmissible as it is all based on information and belief. Statements in the Schoof affidavit, the claimants argue, are also not based on personal knowledge and are inadmissible. In particular, the claimants dispute Mr. Schoof's sworn assertion that the Crown grant annexed to his affidavit is a true copy of the original, and that copies of excerpts from a "properties policy manual" of the Ministry of Transportation and Highways also annexed to the affidavit show what the respondent's policy is with respect to paying compensation for gravel removed. The claimants say that no evidence has been offered, or indeed allowed through the summoning of witnesses, either to support or disprove the indication in the policy manual that no compensation will be paid where gravel is reserved to the Crown unless the expropriation comes from an operating gravel pit. There is no evidence as to whether the claimants do or do not have an operating pit. Furthermore, there is nothing in evidence to show under which of two alternative statutes the respondent has exercised its expropriating power even though, according to the claimants, they deal quite differently with the question of compensation for gravel taken.

[31]  Turning to the substantive issue of entitlement, the claimants submit, fourthly, that the respondent's argument incorrectly presumes that the expropriation in this matter has proceeded pursuant to sections 5 and 12 of the Highway Act.

[32]  To grasp fully the claimants' argument in this respect, the relevant portions of those sections need to be recited at length.

[33]  Section 5(1) authorizes the minister in his or her absolute discretion to make public highways, vary and alter existing roads, and take, at any time, additional land beyond the width of a highway, if necessary for the use of or purpose of the ministry. Section 5(2) provides in part:

5 (2)	For the purposes of subsection (1), the minister, and the minister's agents and workers, without notice to and without the consent of a person owning or occupying the land, or having or claiming an estate, right, title or interest in it,
	(b)	with the same discretion, may enter land to erect, maintain and remove snow fences, or cut drains, or to take gravel, timber, stone and other materials for construction or maintenance of a highway.

[34]  Section 12 of the Highway Act deals with compensation for land taken under the statute, and provides:

12 (1)	Compensation must be paid for land entered and taken possession of under this Part for the following matters only:
	(a)	improvements on the land taken, which is everything constructed on or annexed to the soil by anyone, such as roads, buildings, structures and fences and improvements made by clearing, planting, grading or cultivating the soil;
	(b)	land which was originally granted to a person by the Crown, either in right of British Columbia or Canada, and by the taking of which the total area taken for highways from the land comprised in the original Crown grant exceeds 1/20 of the total area comprised in the Crown grant, and then only for the area in excess of 1/20 of that total area; but, if the land comprised in the Crown grant has been subdivided into parcels by a registered conveyance or plan of subdivision, the area of land that may be taken from a parcel without payment of compensation must not exceed 1/20 of the area of that parcel, and if land is being taken from 2 or more of the parcels at the same time the total area to be taken without the payment of compensation must be apportioned among those parcels on the basis of their respective areas.
(2)	The Expropriation Act applies to proceedings under this Act.
(3)	In determining compensation payable to any owner for land entered and taken possession of under this Part, there must be taken into consideration the increased value, beyond the increased value common to all land in the locality, that will be given to the remaining land of the owner through which the highway will pass, because of passage of the highway through it or because the construction of the highway or works incidental to it, and the increased value must be set off against the compensation otherwise payable to that owner under this section.
(4)	If for gravel, sand, stone, timber or other materials taken by the government for construction, maintenance or repair of a highway or bridge, an Act or the reservations in a Crown grant permit that material being taken without compensation and if they are from improved land the minister may, despite this Act or reservations, pay reasonable compensation, but the payment and amount of compensation are in the absolute discretion of the minister.

[35]  The claimants say that, even if the expropriation was under the Highway Act, the Expropriation Act takes precedence and supersedes those provisions some of which might otherwise have precluded them from recovering compensation for gravel on the lands taken.

[36]  The claimants refer to section 2(1) of the Act, which states:

2 (1)

If an expropriating authority proposes to expropriate land, this Act applies to the expropriation and, if there is an inconsistency between this Act and any other enactments respecting the expropriation, the provisions of this Act apply.

[37]  The claimants also cite section 30(3) of the Act, which states:

30 (3)

Nothing in this Part affects the limitation on compensation provided for by section 12(1) of the Highway Act or by section 121 of the Forest Act.

In the claimants' submission, the fact that section 30(3) specifically upholds the limitations on compensation found in section 12(1) of the Highway Act while remaining silent with respect to section 12(4) leads to the conclusion that there is an inconsistency between section 12(4) and the compensation provisions of the Act, the latter of which must prevail. As further evidence of inconsistency between the two statutes, the claimants point out that section 12(3) of the Highway Act, which takes into account "special benefits" accruing to an owner in determining the compensation payable for land entered and taken possession of, has recently been superseded by an amendment to section 44 of the Act which now requires that both "general benefits" and "special benefits" be taken into account.

[38]  In the claimants' submission, however, the expropriation in this matter proceeded, not under the Highway Act, but instead under sections 16 and 17 of the Ministry of Transportation and Highways Act, R.S.B.C. 1996, c. 311.

[39]  Under the heading "Power to expropriate land", section 16(1) provides in part:

16 (1)	The minister may acquire or expropriate any land, stream, water, watercourse, fence or wall, the appropriation of which the minister believes necessary for one or more of the following:
	(a)	use, construction or maintenance of a government building, highway or public work;

[40]  The relevant provisions of section 17, headed "Taking timber and gravel", provide:

17 (1)	The minister or an agent of the minister may do one or more of the following:
	(a)	enter any land and take from it timber, stones, gravel, sand, clay or other materials that the minister or the minister's agent finds necessary to construct, maintain and repair government buildings, highways and public works or other property under the ministry's control;
(2)	Compensation for the exercise of a power under subsection (1) must be determined by the Expropriation Compensation Board under the Expropriation Act.

The mandatory provision in section 17(2), say the claimants, requires the board in this instance to proceed with a determination of compensation payable for the gravel taken.

[41]  Finally, in determining compensation for lost gravel royalties, the claimants argue, the board must proceed on the principle that, to the extent the gravel enhances the market value of their property, they are entitled under the Act to be paid for it. They cite the judgment of the Ontario Court of Appeal in Agnew v. Minister of Highways for the Province of Ontario, [1961] O.R. 234, in support of that proposition. The headnote to the judgment reads in part:

"Where land containing gravel deposits is situated in the vicinity of a probable extension of a public highway for the construction of which gravel of that kind is used, the enhanced value of the land by reason of the nearby and ready market for its gravel is a proper element to be considered in fixing compensation for the land if it is subsequently expropriated."

[42]  In reaching its decision, the Court in Agnew accepted the view of the Privy Council in Raja Vyricherla Narayana Gajapatiraju v. The Revenue Divisional Officer, Vizagapatam, [1939] A.C. 302 (commonly referred to as the "Indian Case"), that where the land has unusual features or potentialities, the value of those potentialities must be ascertained. Where the Crown has let a contract to make the gravel available for construction, the claimants say, the potentiality will have become realized potential for which the Crown must pay. They cite the judgment of the Supreme Court of Canada in Fraser v. The Queen, [1963] S.C.R. 455, to support that further proposition.

[43]  The claimants further point out that this board has accepted the Indian Case, Fraser and Agnew as applicable law in British Columbia in its decision in McPhail's Equipment Co. v. Surrey (City) (1995), 57 L.C.R. 57. The board's decision with respect to compensation for losses incurred was upheld on appeal: (1997), 61 L.C.R. 104 (B.C.C.A.).

3.5 Analysis and Conclusion

[44]  The threshold questions which I must decide are whether the respondent's motion to dismiss the claimants' gravel royalty claim complies with the procedural requirements of the board and, if so, whether the board has jurisdiction summarily to dismiss the claim, in particular by reference to Rule 18A of the Supreme Court Rules. If it does, the next issue is whether the present motion is one which can and should appropriately be determined in that manner.

[45]  On the question of procedure, I am not persuaded by the claimants' argument that section 7(1) of the Practice Regulation precludes a determination on the motion which the respondent has brought. It seems to me that what the respondent is seeking is not a "determination of compensation" but rather a threshold determination of liability or entitlement. It is true that this might be accomplished by severance of the claim in the manner prescribed in Country Style Holdings. However, the board has frequently considered and determined motions for dismissal of a claim or part of a claim brought under section 7(1) on a variety of issues, for example, on the allegation that there was no expropriation (see Vancouver Marina (1971) Ltd. v. British Columbia (Minister of Transportation and Highways) (2000), 70 L.C.R. 137; (2001), 72 L.C.R. 245), or that pursuit of the claim was barred by the expiry of the limitation period set out in section 25 of the Act (see Haughton v. Heffley Creek (Waterworks District) (1999), 66 L.C.R. 1), or that no reasonable claim was disclosed within the meaning of Rule 19(24)(a) of the Supreme Court Rules (see Roadmaster, supra).

[46]  The underlying policy considerations which the board has taken into account when proceeding on such interlocutory applications are perhaps most comprehensively expressed in the Country Style Holdings decision, at p. 4 (51 L.C.R.):

The hearing of an application for the determination of compensation is preceded by a great deal of preparatory work involving both time and expense. The claimant and respondent must marshal their experts and both parties will normally wish to utilize fully the right to discovery. Owing to the highly detailed and technical nature of most claims, the hearings themselves tend to be of lengthy duration measured in weeks rather than days. It is also germane that in the vast majority of these cases, the reasonable costs associated with this very deliberate process, regardless of the success of either party, are borne by the public purse.

No less than with the courts, the board recognizes the obligation of endeavouring to achieve a just, speedy and inexpensive resolution of claims. There are instances where a preliminary determination as to liability separate from, and in advance of any determination of the quantum of compensation, may clearly have the effect of reducing the costs associated with the preparation of the full compensation claim, and the expense otherwise associated with the hearing of the claim.

[47]  Nearly from the time of its inception, the board as an administrative tribunal has often had to consider the scope of its jurisdiction and whether it has the power to determine its procedure where the Act and the Practice Regulation are silent on particular procedural matters (see, for example, Douglas Lake Cattle Co. v. British Columbia (Minister of Transportation and Highways) (1990), 44 L.C.R. 52). The thrust of the board's determinations in that regard is succinctly summarized in Country Style Holdings, at p. 11:

While the approval of the Lieutenant-Governor in Council is required when rules are to be legislated, the board is satisfied that it maintains jurisdiction to deal with procedural matters not raised in the rules on an individual case basis as long as the board makes such orders in accordance with the principles of fairness and natural justice. As determining the question of liability is integral to the substantive jurisdiction of the board, the procedures on how such decision should be made are within the jurisdiction of the board.

[48]  It is instructive to observe that, in Langdale Landing Properties Ltd. v. British Columbia (Minister of Transportation and Highways) (1996), 58 L.C.R. 252 (B.C.E.C.B.), an interlocutory application was brought by the expropriating authority under section 7(1) to strike out several of the owners' claims pursuant to Rule 19(24)(a). There, the owners' counsel, Mr. Burke, did not dispute the board's jurisdiction as such, but argued that it was inappropriate for the board to exercise that jurisdiction. He submitted that the board should not deny a claimant in an expropriation case, who is unlike a party to ordinary civil litigation, the opportunity to adduce evidence and present full argument on every aspect of the claim at a compensation hearing. Although declining to strike out the particular claims on that application, I said this at p. 260:

I disagree with the claimants' general position which amounts to saying that the board should never strike a claim in advance of a compensation hearing. Where the stringent test which the courts have established can be met, so that it is plain and obvious on an interlocutory application that a particular claim as pleaded cannot succeed, it serves no purpose to allow that claim to advance to hearing.

[49]  Whether the board can hear summary trial applications pursuant to Rule 18A was a question fully canvassed in the Okanagan Dairy decision in light of what the board described as its jurisdiction to govern its practice and procedure, the wording of Rule 18A, and the tests established in the Inspiration Management judgment. At pp. 231-232 of the reported decision (57 L.C.R.), the board agreed that Rule 18A offered "a practical procedure in appropriate circumstances" and was satisfied that it had jurisdiction to determine issues pursuant to this rule "where the requirements of the procedure can be met, including the opinion of the board that use of this procedure would not be unjust."

[50]  The Okanagan Dairy decision was an unusual one inasmuch as the board had already heard two weeks of evidence in a scheduled four week compensation hearing when claimants' counsel rose to advise that the claimants were withdrawing a number of their claims which he said had "no basis in fact" and that he was withdrawing as counsel. The hearing shortly thereafter adjourned. Fifteen months passed without further hearing until the respondent's counsel filed a notice of motion pursuant to section 7(1) of the Practice Regulation. The notice of motion asked for an order that the claimants' claims be dismissed in their entirety for failure to disclose relevant documents, a step which the board upon consideration declined to take. Alternatively, the respondent asked the board to dismiss those claims pursuant to Rule 18A on the evidence already heard on the basis that the claimants had received proper compensation from the respondent by way of advance payment for the land expropriated and that the remaining claims were "without merit or value". The board first determined that the earlier withdrawal of claims was binding on the claimants but, in the event that it was wrong in that respect, it went on to consider each of the withdrawn claims as well as those which were not withdrawn. The board was satisfied that the requirements for a Rule 18A determination were met with respect to all but one of the claims and dismissed most of them on the basis of the evidence already received.

[51]  Among the claimants' grounds of appeal from the board's decision in Okanagan Dairy to the British Columbia Court of Appeal were that the so-called 18A application was unauthorized by the Act or the rules, or alternatively, that the procedure undertaken by the board was so unfair that the Court should order a new hearing before a differently constituted panel.

[52]  The Court, in dismissing the appeal, found that the board had not erred in refusing to permit the claimants to withdraw the abandonment of some of their claims. The Court went on to find that the question of whether Rule 18A applies to hearings before the board was not determinative of the issues. The board had resolved the merits of what remained of the case "by reference to the viva voce and massive documentary evidence filed" at the compensation hearing. As to whether the board had breached any notion of fairness in resolving the claimants' claims without hearing further evidence, the Court observed that the claimants had not placed before the board or the Court any evidence touching upon the issues beyond those abandoned and that apparently there was no further evidence to place before the board. Ryan J.A. for the Court then concluded as follows, at p. 95 (61 L.C.R.):

I cannot endorse the procedure undertaken by the Board, but in the circumstances of this unusual case I cannot say that the result would have been any different had the Board called on the appellants for further evidence on the issues not abandoned.

[53]  The concluding comment by the Court of Appeal in Okanagan Dairy, although obiter dictum, casts something of a cloud over the appropriateness of the board's resort to a summary hearing procedure pursuant to Rule 18A, at least midway through a compensation hearing. Undoubtedly, the procedure should be used sparingly and only in clearly appropriate circumstances. The question, therefore, is whether this is such a case.

[54]  Rule 18A(8) provides in part:

(8)	On or before the hearing of an application under this rule, the court may
	(a)	dismiss the application on the ground that
		(i)	the issues raised by the notice of motion are not suitable for disposition under this rule, or
		(ii)	the application will not assist the efficient resolution of the proceeding.

[55]  The issue which is raised here - that is, the claimants' entitlement to compensation for gravel taken - is a reasonably discrete one, largely involving statutory interpretation and in respect of which little factual evidence is required. In my opinion it is suitable for disposition on a summary hearing basis. Moreover, I am satisfied that determination of the claimants' entitlement at this time will assist the efficient resolution of the proceeding, either by eliminating the issue altogether and so reducing the time and expense required to prepare expert and other evidence and to hear the entire claim, or by eliminating the need to adduce evidence on and to argue the question of liability or entitlement at the compensation hearing itself.

[56]  Rule 18A(11) provides in part:

(11)	On the hearing of the application, the court may
	(a)	grant judgment in favour of any party, either on an issue or generally, unless
		(i)	the court is unable, on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues of fact or law, or
		(ii)	the court is of the opinion that it would be unjust to decide the issues on the application, (. . .)

[57]  With respect to the first branch of the foregoing test, I am of the view that the evidence before the board on this application is sufficient to find the facts necessary to decide the issue of entitlement to compensation for gravel taken.

[58]  Although the respondent does not accept the characterization of what was taken as being "gravel", preferring to refer to it as "material", it is not disputed that a quantity of material (gravel or otherwise) was excavated from the expropriated portion of the claimants' property for highway construction purposes. Mr. Schoof, the project manager, deposes in his affidavit that the amount totalled 25,255 cubic metres, an amount only slightly greater than what the respondent has set out in its Amended Form B.

[59]  The starting point for consideration of the evidence on entitlement is, of course, the wording of the Crown grant itself, the fourth proviso of which reserves to the Crown and those authorized on the Crown's behalf the right to take gravel and other materials from the claimants' property for, among other things, the construction of roads, without payment of compensation. The evidence of the Crown grant is a copy annexed to Mr. Schoof's affidavit. I cannot take seriously the claimants' unsubstantiated suggestion that, because Mr. Schoof may not have personally visited the land title office and viewed the original, he is unable to depose to the copy annexed being a true copy. In any case, I was provided with no authority to support the claimants' submission that such evidence could not have been provided on information and belief on this application. It was open to the claimants to controvert that evidence through their own affidavit, but none was provided. I accept that the copy of the Crown grant before me is, in fact, the Crown grant in respect of the claimants' property.

[60]  The next step is to consider the legislation applicable to the reservation in the Crown grant insofar as it affects the claimants' entitlement to claim compensation before the board. In that respect it is clear that, by the operation of section 50(1) of the Land Act, the Crown's right to take gravel without payment of compensation under the grant continues to apply to the claimants' property. That being so, there cannot be said to have been an expropriation of the gravel or other material extracted by the respondent for highway construction purposes in this instance, since the definition of "expropriate" in section 1 of the Act expressly excludes "the exercise by the government of any interest, right, privilege or title referred to in section 50 of the Land Act". Since there has been no expropriation of the gravel, the claimants are disentitled from seeking compensation before the board. The board is without jurisdiction to hear the claim.

[61]  In reaching the foregoing conclusion, I acknowledge the claimants' point that there is no evidence before me as to whether the respondent's expropriation of a portion of the claimants' property proceeded under the Highway Act or the Ministry of Transportation and Highways Act. However, by my analysis, nothing turns on which of the two statutes applies. For the purpose of the determination which I have been asked to make, I do not accept the claimants' proposition that there are inconsistencies between these statutes and the Act so that, pursuant to section 2(1), the provisions of the Act must prevail.

[62]  There is a well-recognized general principle of statutory interpretation that legislation is to be construed, if at all possible, so that there is no repugnancy or inconsistency: see Pierre-Andre Cote, The Interpretation of Legislation in Canada, Second Edition (Cowansville, Que.: Les Editions Yvon Blais, Inc., 1991), p. 259.

[63]  If the applicable expropriating statute in this instance was the Highway Act, I find no inconsistency between the provisions in section 12(1), (2) and (4) of that statute dealing with compensation for land taken and the Expropriation Act. Section 12(2) of the Highway Act makes the Expropriation Act applicable, while section 30(3) of the Expropriation Act upholds the limitations on compensation found in section 12(1) of the Highway Act. The fact that the Expropriation Act is silent with respect to section 12(4) does not, in my view, create an inconsistency. Section 12(4) confers an absolute ministerial discretion to pay compensation for gravel and other materials taken in circumstances where, pursuant to the reservation in a Crown grant, no compensation would otherwise be payable. There was no need for the Expropriation Act to address section 12(4) expressly. The Act is not engaged with respect to section 12(4) except in a negative sense, that is, it already defines "expropriate" so as not to include the exercise by the government of its rights to take gravel under the reservations contained in a Crown grant.

[64]  If the applicable expropriating statute was instead the Ministry of Transportation and Highways Act, as the claimants assert, the relevant provisions of section 17 of that statute under the heading "[t]aking timber and gravel" can also be read so as to create no inconsistency. While section 17(2) states, in effect, that compensation for the taking of gravel and other materials for highway construction must be determined by the board under the Expropriation Act, that provision should be read together with the relevant restrictions contained in the Land Act and the Expropriation Act as earlier discussed. In my opinion, when the relevant statutory provisions as a whole are read together in a manner which seeks to avoid inconsistency, they lead to the conclusion that section 17(2) is intended to apply only to situations where the materials taken were not the subject of a reservation contained in a Crown grant of the land in question.

[65]  Since the gravel taken by the respondent from the claimants' property was taken pursuant to its rights under a Crown grant without payment of compensation, it follows in my view that the royalty value of the gravel cannot be the subject of a separate claim before the board over and above the market value of the land expropriated. In this respect, the various cases cited by the claimants, and accepted as applicable law in the board's decision in McPhail's Equipment, are clearly distinguishable from the present matter.

[66]  With respect to the second branch of the test under Rule 18A(11), I have weighed whether it would be unjust to decide the issue of entitlement to compensation for gravel taken without affording the claimants the opportunity to adduce evidence of the kind they indicated was relevant when they sought to have Mr. Schoof, the project manager, and Mr. Stewart, the former director of properties, summoned to appear. I have concluded that no injustice would result in these circumstances.

[67]  I might observe at this juncture that there was nothing in my order of October 25, 2001, setting aside the two summonses to witness, which would have precluded claimants' counsel from applying to have the summonses reissued, or to cross-examine Mr. Schoof on his affidavit, once it was determined in advance of this hearing that the respondent intended to proceed with its dismissal motion primarily as a Rule 18A-type summary hearing rather than an application to strike pleadings under Rule 19(24)(a). The claimants made no such application in the course of these proceedings. Neither did they place before the board other evidence by affidavit or otherwise, which leads me reasonably to infer that there was no other relevant evidence to put forward on this issue.

[68]  Moreover, I consider the evidence which the claimants indicated they wished to adduce from Mr. Stewart and Mr. Schoof to be basically irrelevant to my determination of the issue of entitlement. Mr. Stewart was to be examined on the question of whether or how the Ministry of Transportation and Highways had exercised its rights to gravel under Crown grants in the past, in other words as I construe it, what past policy has been. I fail to see how past policy, whatever it may have been, could sustain a statutory claim for compensation before the board in the present instance. Indeed, Mr. Burke at one point in his submissions made the point that, whether the minister has set a policy directive defining the circumstances in which compensation will or will not be paid where gravel is reserved to the Crown, is irrelevant to the issue before me. Mr. Schoof was to be examined on the question of whether or in what way the Ministry had contracted to supply the highway contractor with gravel from the claimants' expropriated land. While such evidence might perhaps assist to establish the realized potential of the gravel for which, in some circumstances, an expropriating authority might have to pay, it would not help to found a threshold claim to entitlement in this instance. This is not, of course, to say that Mr. Schoof's evidence as project manager might not be relevant to other issues which may arise at the compensation hearing itself.

[69]  I have therefore concluded that it is appropriate and not unjust to determine the respondent's motion to dismiss the claimants' gravel royalty claim pursuant to the Rule 18A-type application before me. On the basis of my consideration of the evidence, argument and applicable law on the hearing of this application as earlier described, I grant the respondent's motion to dismiss the claimants' claim set out in para. 2 of the statement of claim in the Amended Form A.

[70]  The respondent did not vigorously pursue its submission in the alternative that para. 2 be struck out pursuant to Rule 19(24)(a) as disclosing no reasonable claim. The technical difficulty with proceeding under that Rule in this instance was, as I have noted earlier, that no evidence is admissible on the application and, furthermore, the application must proceed on the basis that all of the allegations of fact pertaining to the claim set out in the pleading are correct and can be proven. Unless the Crown grant was pleaded so as to be before the board on such an application, there would appear to have been no proper foundation upon which to strike the claim.

[71]  Nevertheless, I consider it appropriate to observe on the basis of the foregoing analysis that, if the Crown grant had been pleaded, the same result would have flowed from a Rule 19(24)(a) application as from a Rule 18A-type summary hearing application. The relevant jurisprudence under Rule 19(24)(a) makes clear that a pleading may only be struck in exceptional circumstances, such as where the claim is "obviously unsustainable" or its likelihood of failure is "absolutely beyond doubt", the "clearest of cases" or "plain and obvious". In my view, the stringent tests which the courts have established would have been met in the present instance, and the claimants' gravel royalty claim in para. 2 would have been struck out.

4.  THE MOTION TO AMEND PLEADINGS

4.1  The Pleadings At Issue

[72]  The first four paragraphs of the statement of claim within the claimants' Amended Form A read as follows:

"1.	The respondent has made an advance payment of $11,201 for the land and improvements expropriated. The claimants accept that payment in satisfaction for the land and improvements taken.
2.	The respondent expropriated 70,000 cubic metres of gravel for use in its highway construction project. That gravel had a royalty value to the claimants of $2.00 per cubic metre. The claimants claim 70,000 x $2.00;	$ 140,000
3.	The respondent removed and sold timber located on the expropriated lands. The claimants claim the market value of the timber at;	$ 3,000
4.	The market value of the remainder of D.L. 47 has been diminished as a result of the construction or use of the works for which the lands were expropriated. The market value has been reduced by;	$ 73,000"

[73]  In their notice of motion filed on October 19, 2001, the claimants seek an order granting them leave to make further amendments to the statement of claim "as set out in the attached letter dated October 15, 2001". The letter from claimants' counsel, Mr. Burke, to respondent's counsel, Ms. Bouck, states that the proposed amendments are as follows:

"1.	Paragraph 1 will be amended by adding after the word taken "exclusive of the contribution to the market value made by the presence of 25,255 cubic metres of usable gravel."
2.	Paragraph 2 will be deleted and will be replaced with the following:
	"The respondent expropriated 25,255 cubic metres of gravel on the lands taken. The gravel contributed to the market value of the lands taken by the sum of $25,000."
3.	The respondent proposes to delete paragraph 3 of Schedule A. It will be replaced with the following:
	"The respondent's project has resulted in the loss of legal access to the southern portion of D.L. 47. Legal and physical access from Highway 5 to Badger Creek Road has been lost. No other legal access to the southern portion of D.L. 47 has been provided. The loss of legal access to the southern portion of D.L. 47 has resulted in a substantial diminution in the market value of the southern portion due, inter alia, to the loss of legal access to the gravel pit located there. The diminution in the market value of the southern portion due to the loss of the legal access to the gravel pit is valued at 200,000 cubic metres of gravel lost x $1.50 royalty per cubic metre, or $350,000."

4.2  Positions of the Parties

[74]  Although the claimants have brought a motion for leave to amend their statement of claim, they submit that the procedure for commencing a claim under section 2(1) of the Practice Regulation, by filing with the board a Form A which includes a statement of claim, carries with it the right to amend. They cite the leading case of McNaughton v. Baker, [1988] B.C.J. No. 515 (B.C.C.A.), for the proposition that the courts take a liberal approach to pleadings and do not require that evidence be adduced in support of an amended pleading before hearing. The pleading need only disclose a reasonable claim, that is, one which would not be struck out on an application under Rule 19(24): see also Federal Business Development Bank v. Edward Haight Malkin, unreported, July 27, 1984, B.C.S.C., No. C834881, Vancouver. The claimants point out that the board has never formalized any rule which would impose a limitation on the right to amend.

[75]  The claimants' proposed amendments, all of which relate to gravel, are now cast in the language of either contribution to or diminution in market value. Their argument reiterates the proposition that where the land has unusual features or potentialities which enhance the market value of an owner's land, the value of those potentialities must be ascertained and the owner is entitled by statute to be paid for them. With respect to the proposed new para. 3, the claimants assert that they had earlier proceeded on the view that highway widening and reconfiguration had resulted simply in making access to their ranch operations on the southerly portion of D.L. 47, located on the south side of the highway, more difficult, dangerous, and costly. They have now concluded, however, that legal access to the southerly portion of D.L. 47 has been lost altogether. One result, they plead, is a substantial diminution in market value of the southern portion due to loss of legal access to a gravel pit said to be situated on that portion of their property. According to the claimants, the proposed pleadings raise reasonable claims for which leave to amend should be granted.

[76]  The respondent opposes the granting of leave to the claimants to amend their statement of claim on several grounds. It objects to amended para. 1 on the grounds that the proposed additional wording amounts to the withdrawal of an admission by the claimants. The respondent refers to Rule 31(5) of the Supreme Court Rules which provides, in part, that a party is not entitled to withdraw an admission made in a pleading except by consent or with leave of the court. As to what constitutes an admission, the respondent cites the judgment of the Supreme Court of British Columbia in British Columbia Ferry Corp. v. T & N plc (1993), 31 C.P.C. (3d) 379 at p. 384:

The type of admission contemplated by the rule is an admission which would benefit the defendant in its defence of the case remaining after the amendment. Further, the admission contemplated by the rule must be a deliberate concession made by the plaintiff for the benefit of the defendant.

The respondent argues that para. 1 as it appears in the Amended Form A is just such a "deliberate concession" with respect to market value which accepts the amount of the advance payment in satisfaction for the lands and improvements expropriated. In now seeking to exclude the market value of 25,255 cubic metres of usable gravel, the claimants are attempting to withdraw an admission which was made for the benefit of the respondent and upon which the respondent is entitled to rely.

[77]  The respondent further objects to amended paras. 1 and 2 as well as the proposed insertion of the new para. 3 on the grounds that these three paragraphs fail to disclose any claim known to law. In particular, the respondent says, the board in Vision Homes Ltd. v. Nanaimo (City) (1994), 54 L.C.R. 103, at p. 126, has previously accepted the submission that "a fee simple interest normally includes any … gravel on the land." Therefore, recognizing a separate claim for gravel over and above the fee simple interest in the land could lead to an award of double compensation. In any case, according to the respondent, the claims under these three paragraphs are precluded by virtue of the Crown grant.

[78]  The respondent also refers to Rule 19(7) of the Supreme Court Rules which states that "[a] party shall not plead an allegation of fact or a new ground or claim inconsistent with the party's previous pleading." Amended paras. 1 and 2, the respondent says, are inconsistent with the admission made in para. 1 of the statement of claim in the Amended Form A, and the proposed new para. 3 is inconsistent with para. 4, which already pleads an amount in respect of the diminution in value of the remainder of D.L. 47.

[79]  Overall, the respondent argues that, when amendments are sought late in the proceeding, there is a presumption of prejudice to the opposing party and, accordingly, an onus on the party seeking the amendments to provide an explanation for the delay. The respondent cites the decisions of the British Columbia Court of Appeal in Med Finance Co. S.A. v. Bank of Montreal, [1993] B.C.J. No. 1277, and Teal Cedar Products (1977) Ltd. v. Dale Intermediaries Ltd., [1996] B.C.J. No. 234, (1996), 19 B.C.L.R. (3d) 282, in support of those propositions. The respondent says that it will be prejudiced if the amendments are allowed in that the proceeding will be lengthened, further discovery will be required, and the cost of the proceeding will be substantially increased. The lack of evidence in support of the claimants' application in this instance, it argues, provides no basis upon which the board can exercise its discretion judicially as to whether to allow the amendments.

4.3  Analysis and Conclusion

[80] Before turning to consider the substance of each of the three proposed amendments, I wish to comment first on the claimants' argument that there exists what might be characterized as an almost automatic right to amend pleadings before the board. Inasmuch as the Practice Regulation is silent with respect to amendment, and the board has issued no practice directive on point, I would agree that there is an absence of formal written procedure.

[81]  However, the board in my experience has consistently followed the practice of requiring a party who has already once amended its pleadings, and seeks to make further amendments without consent of all of the parties after a notice of hearing has been issued, to apply to the board for leave to amend. The board has found the authority for this practice within its jurisdiction generally as an administrative tribunal to govern its own procedure, subject to the Act and the regulations, in the interests of fairness and efficiency. The board has frequently looked to the Supreme Court Rules for guidance in such matters, and in this instance the board's practice regarding amendment of pleadings is consistent with Rule 24(1) of the Supreme Court Rules.

[82]  Past decisions of the board on applications to amend pleadings have applied the principles established in the Supreme Court which govern whether an amendment will be granted under Rule 24: see, for example, Whitechapel Estates Ltd. v. British Columbia (Ministry of Transportation and Highways, South Coast Region) (1998), 63 L.C.R. 121. In Reti v. Sicamous (District) (1999), 66 L.C.R. 57, the board observed at p. 68:

The purpose of the rule is not to prevent amendments but to attempt to achieve fairness to all parties when amendments are proposed after a trial or hearing date has already been scheduled. A party other than the one seeking the amendment can either consent to the amendment (on the grounds that the board will almost certainly grant the amendment in any event), or put its argument to the board as to how the proposed amendment or the proposed amendment at this time is particularly prejudicial.

[83]  While amendments to pleadings are liberally granted, it is immediately apparent that at least some of the proposed amendments to the claimants' statement of claim are directly affected by the determination which I have made dismissing the gravel royalty claim in para. 2 of the Amended Form A.

[84]  The proposed amendment to para. 2 substantially reduces the amount claimed for gravel said to have been expropriated from the lands taken, from $140,000 to $25,000. However, it continues to run afoul of my determination earlier in this decision that, as a consequence of the reservation contained in the Crown grant, the respondent had the right to take gravel without payment of compensation, there has been no expropriation of gravel, and the board is without jurisdiction to hear the claim. This determination is, in my view, unaffected by the fact that the claimants now plead that the gravel "contributed to the market value of the lands" rather than having "a royalty value to the claimants". Accordingly, I dismiss the claimants' application for leave to amend para. 2 in the manner indicated. The claim in para. 2 cannot stand either in its original or amended form.

[85]  In my opinion, there is considerable force to the respondent's argument that the proposed amendment to para. 1 is objectionable as constituting the withdrawal of an admission. In para. 1 the claimants accepted the advance payment of $11,201 "in satisfaction for the land and improvements taken", in other words, for the market value of the expropriated portion. Under Rule 31(5) of the Supreme Court Rules, a party may withdraw an admission made in a pleading with leave of the court. The proposed amendment to para. 1 clearly aims to harmonize with the pleading in para. 2 by adding to market value an amount which represents what the claimants say is the value of the 25,255 cubic metres of gravel excavated by the respondent from the expropriated portion of the claimants' property. If para. 2 of the statement of claim had been allowed to stand, the application for leave to amend para. 1 as indicated might have been compelling. However, because I have found that the claimants are not entitled to claim compensation before the board for the gravel extracted, it follows that they are also not entitled to enlarge their claim for compensation for market value of the property taken by now seeking to exclude the gravel from what they had earlier accepted in satisfaction of that claim. Accordingly, I also dismiss the claimants' application for leave to amend para. 1.

[86]  This leaves for determination the question of whether the claimants' application to amend para. 3 of the statement of claim should be granted. I note at the outset that claimants' counsel advised that the current para. 3, which makes a claim of $3,000 for the market value of timber located on the expropriated property and allegedly removed and sold by the respondent, has been abandoned. The proposal to amend para. 3 is really a proposal to insert an entirely new claim, under the head of diminution in market value to the remaining land, related to the alleged loss of legal access to the southerly portion of D.L. 47, and in particular to a gravel pit said to be located there.

[87]  The alleged diminution in market value is measured by the value of lost gravel. In Mr. Burke's letter of October 15, 2001, the proposed amendment calculates this value on the basis of 200,000 cubic metres of gravel lost at $1.50 royalty per cubic metre, which is incorrectly stated to amount to $350,000 rather than $300,000. On November 22, 2001, some weeks after this interlocutory hearing took place, Mr. Burke wrote a further letter addressed to the board, which was evidently also copied to respondent's counsel, Ms. Bouck. In this letter he stated in part:

"We have now received information that the deposit of gravel to which legal access has been lost is approximately 11 million to 13 million m3.

Our application to amend the statement of claim, therefore, should refer to this volume of gravel rather than the 200,000 m3 identified in our existing application." 

Mr. Burke did not indicate whether the claimants continue to place a royalty value of $1.50 per cubic metre on this much larger alleged deposit, but if this were the case, then the claim would be in the order of $16,500,000 to $22,500,000, rather than the $300,000 earlier asserted. Respondent's counsel has not written to the board in response to the claimants' revised assertion. In any case, for the purpose of determining whether leave to amend should be granted, nothing turns on the quantum of the alleged new claim.

[88]  Although the proposed new para. 3 also asserts a claim with respect to gravel, in my view it is on a quite different footing from the claim in para. 2 which claimed for the quantity of gravel extracted by the respondent from the expropriated property for highway construction purposes. I have held that the claimants are disentitled by the terms of the Crown grant from seeking compensation before the board for gravel extracted from the expropriated portion of their property. However, while the Crown grant blankets the entirety of D.L. 47, its terms do not extend so as necessarily to exclude a claim for compensation related to the value of gravel on that portion of D.L. 47 which has not been expropriated, which the respondent has not taken for highway construction purposes, and to which allegedly the respondent has closed off legal access. It seems to me that the claim for diminution in market value proposed under para. 3 is one to which the cases on enhanced value or special potential of the land, as cited with approval in the board's decision in McPhail's Equipment, may have some applicability. It is not a claim which I consider, for the purpose of determining whether an amendment should be allowed, is bound to fail.

[89]  It is true that the proposed new para. 3 sits uneasily with the existing para. 4 of the statement of claim, both of which claim amounts with respect to diminution in market value of the remainder of D.L. 47. However, I do not accept the respondent's submission that these two paragraphs are necessarily inconsistent. Para. 4, which is not particularized, could relate to other factors negatively impacting the market value of the remainder from those which are set out in para. 3. This is a matter which should not be left to conjecture and the time set for hearing the compensation claim is fast approaching. Rather than refusing leave to plead the proposed new para. 3 on the basis of inconsistent pleadings, I would be inclined instead to grant leave coupled with a requirement that the claimants' either particularize or abandon para. 4 of the statement of claim.

[90]  The respondent's expressed concern about prejudice resulting from the late amendment of pleadings would have had considerably greater force if the parties had not already agreed in the course of this interlocutory hearing to adjourn the compensation hearing from early December, 2001 to early February, 2002, and to provide an additional week for the hearing of the claim. Undoubtedly, allowing the new claim set out in the proposed para. 3 will involve the parties in additional preparation, including perhaps further discoveries and further instruction of experts. However, these factors alone are not sufficient to deny the claimants leave to plead a claim relating to loss of access the full significance of which, they indicate, they were unable to appreciate at an earlier date.

[91]  Accordingly, I grant leave to the claimants to amend their statement of claim by inserting therein the proposed new para. 3. I include in my order the following terms. The new para. 3 is to make clear the quantum of the claim being asserted since this matter was left in doubt by Mr. Burke's letter of November 22, 2001. At the same time, the existing para. 4 is also to be particularized so as to make clear in what other respects, if any, the market value of the remainder of D.L. 47 has been diminished as a result of the construction or use of the works for which part of the property was expropriated.

5.  THE MOTION FOR DOCUMENT PRODUCTION

[92]  In their notice of motion filed on October 22, 2001, the claimants seek an order compelling the respondent to produce tender documents for its highway widening project.

[93]  Mr. Burke explained that the claimants were seeking to discover the terms of the contract entered into between the respondent and the highway contractor for the supply of gravel from the expropriated property. This evidence, he indicated, would be relevant to the gravel royalty claim made in para. 2 of the statement of claim. Citing in support the judgment of the Supreme Court of Canada in the Fraser case, he submitted that, where the respondent has let a contract to a contractor to make the gravel available for construction, the potentiality of the gravel on the land will have become realized potential for which the respondent must pay. Mr. Burke suggested that the tender documents might also have relevance to the new gravel pit claim in para. 3 since, as he put it, "gravel will be available" from that source.

[94]  Since I have dismissed the claimants' gravel royalty claim in para. 2, it is clear that no basis exists under that head for ordering production of the tender documents. I am also not persuaded that any case has been made out under para. 3. The wide scope accorded to document discovery before the board is largely defined by the pleadings. Para. 3 pleads diminution in market value of the remainder of D.L. 47 as a consequence of loss of legal access to the gravel pit on the property. It makes no reference to the respondent's actual or potential use of the gravel so as to suggest that the tender documents are or might be relevant to that claim. No evidence was presented to support any such assertion.

[95]  Accordingly, the claimants' motion for an order compelling production of the tender documents is dismissed.

6.  SUMMARY

[96]  In summary, my disposition of the applications before me in respect of the claimants' claims for compensation is as follows:

• The respondent's motion for an order that the claimants' claim, as set out in para. 2 of the statement of claim in the claimants' Amended Form A, be summarily dismissed, is within the board's jurisdiction and is hereby granted.
• The claimants' motion for an order granting leave to amend the statement of claim in their Amended Form A is dismissed with respect to paras. 1 and 2, and is granted on terms with respect to para. 3.
• The claimants' motion for an order compelling the respondent to produce tender documents for its highway widening project is dismissed.
• The claimants' motion for an order scheduling an additional two weeks of time for the hearing of the compensation claim was settled during the hearing of these applications. By agreement of the parties and with the concurrence of the board, the compensation hearing scheduled to commence on December 3, 2001 for five successive days has been adjourned to February 11, 2002, and is scheduled for a period of two successive weeks. If in light of the foregoing orders the parties consider that additional time will be required for the hearing of the claim, they may so advise the board.

7.  COSTS

[97]  In written submissions, the respondent sought an order that the claimants be denied "the costs of this day". Respondent's counsel did not speak to the matter during the hearing of these applications, nor did the claimants raise the matter of costs. Success on the various applications was divided. In these circumstances, I make no order as to costs, pending a further application.