|
April 3, 2003, E.C.B. 18/02/236
| Between: |
Home
Oil Company Limited and
Anderson Exploration Ltd.
now known as Devon Canada Corporation
Claimant |
| And: |
Franz
Karl Schulte
Respondent |
| Before: |
Sharon
I. Walls, Vice Chair |
| Appearances: |
Robert
S. Cosburn, Counsel for the Claimants
Richard C. Secord, Counsel for the Respondent |
REASONS FOR DECISION
1. APPLICATION
[1] This is an application
by the claimants, Home Oil Company Limited and Anderson
Exploration Ltd., for an order determining the compensation
to which the respondent, Franz Schulte, is entitled
as a result of the expropriation of a 15 metre (50 foot)
statutory right of way for an existing gas pipeline
through the subject lands owned by Mr. Schulte.
[2] The jurisdiction of
the Expropriation Compensation Board is derived from
the Pipeline Act, R.S.B.C. 1996, c. 364 and the
Railway Act, R.S.B.C. 1996, c. 395. Relevant
sections of these Acts are set out below. Under section
16 of the Pipeline Act once the company has obtained
a certificate, if the owner of the land does not agree
to transfer the land for the pipeline then the company
can take and appropriate the land it requires and Part
7 of the Railway Act applies. Part 7 of the Railway
Act includes section 53 that provides for determination
of compensation by the Expropriation Compensation Board
under the Expropriation Act if the owner of the
land does not accept the money offered in the prescribed
Notice under section 50 of the Railway Act within
a certain time frame of it being served on the owner.
Other sections in Part 7 of the Railway Act provide
procedures for what the company is to do with the award
of compensation made by the Expropriation Compensation
Board. If the person to whom the compensation is payable
refuses to execute a proper conveyance, the award of
compensation is deemed to be the title of the company
to the land and can vest in a company the power to take
possession of the land. I note that in contrast to expropriation
procedures under the Expropriation Act, R.S.B.C.
1996, c. 125, the transfer of title to the expropriating
authority occurs after the compensation hearing and
is actually effected by the award of compensation by
the board. In addition, it is the expropriating company
which is generally styled as the "claimant"
and the expropriated owner who is styled as the "respondent".
[3] The respondent, Mr.
Schulte, is the registered owner of the subject lands
located to the north-west of Fort St. John, British
Columbia. The subject lands consist of three legal parcels
that total approximately 389 hectares (960 acres) of
farm land and rough range land. A residence, a feed
yard and a corral are located on the subject lands.
Mr. Schulte acquired options to purchase each of the
three parcels that make up the subject lands in 1980
and title for each of the three parcels was registered
in his name between April and July 1981. At the time
that he purchased the subject lands Mr. Schulte resided
in Germany although he visited the lands before he purchased
them. He now lives on the property with his family and
keeps about 400 head of cattle on the subject lands.
[4] Prior to Mr. Schulte's
purchase of the subject lands, the claimant, Home Oil
Company Limited, constructed an underground gas pipeline
in 1978 that ran approximately 14 kilometres (8.7 miles)
from a well to a tie in point on another pipeline that
formed part of a gas gathering system. This pipeline
runs underground through the three parcels that make
up the subject lands. It was constructed in compliance
with the requirements of the Pipe-lines Act,
R.S.B.C. 1960, c. 284 and in accordance with the standards
applicable for sour gas or gas containing hydrogen sulphide
(which require thicker pipe). However, the evidence
was that the gas that was carried in the pipeline in
2002 did not contain hydrogen sulphide. Fifteen metre
or fifty foot wide statutory rights of way were signed
by the private land owners through which the pipeline
passed. On November 20, 1978 the Minister of Transport
and Communications provided a Consent to Operate and
a Certificate of Inspection for the pipeline. The pipeline
has been in continuous operation since the fall of 1978.
[5] Unfortunately, the
statutory rights of way for the three legal lots that
constitute the subject lands ultimately purchased by
Mr. Schulte were never registered in the Prince George
Land Title Office. As a result when Mr. Schulte bought
the three parcels that constitute the subject lands
in April and July 1981 there was nothing registered
on the title of these lots that indicated the presence
of any right of way or a gas pipeline contained within
a right of way.
[6] In the meantime there were changes in
the corporate entity that owned the pipeline. In 1995,
the Form A says that the claimant Anderson Exploration
Ltd. acquired the undertakings of the claimant Home
Oil Company Limited. In October 2001 Devon Acquisition
Corporation amalgamated with Anderson Exploration Ltd.
and in November 2001 the British Columbia Registrar
of Companies issued a Certificate of a Change of Name
from Devon Acquisition Corporation to Devon Canada Corporation.
Home Oil, Anderson and Devon were all registered in
British Columbia as extraprovincial companies and it
appears that at least Anderson and Devon were companies
incorporated under the laws of Canada.
[7] At some point Mr. Schulte
became aware of the pipeline and the claimants became
aware that the statutory rights of way had never been
deposited in the Prince George Land Title Office. Mr.
Schulte asserts that if he had known that a sour gas
pipeline ran under the subject lands he would never
have bought the land. He wants the pipeline moved so
that it no longer runs beneath his property. The claimants
wish to carry out maintenance on the pipeline that runs
through the subject lands owned by Mr. Schulte but are
unable to do so because Mr. Schulte will not permit
them on his land and they do not have a legal statutory
right of way. As a result, the claimants commenced expropriation
proceedings and a hearing was held in Fort St. John
on September 4, 2002.
[8] Counsel for the respondent
made jurisdictional and procedural objections that were
clearly set out in the Form B and were amplified at
the hearing. At the request of the claimants the evidence
on compensation was completed and the hearing adjourned
pending written submissions on the jurisdictional and
procedural issues. The claimants filed written submissions
on October 3, 2002. The respondent filed their submissions
on November 1, 2002. The claimants filed their reply
on November 14, 2002.
2. BACKGROUND
2.1 Subject lands
[9] The subject lands are
described as:
1. Parcel A (P18403) of the North
1/2of Section 30, Township 84, Range 21, West of the
6th Meridian, Peace River District (P.I.D.014-729-679)
or ("Parcel A of North 1/2 of 30").
2. The West 1/2 of Section 19, Township
84, Range 21, West of the 6th Meridian, Peace River
District (P.I.D.014-791-684) or ("West 1/2 of
19")
3. The South 1/2 of Section 30,
Township 84, Range 21, West of the 6th Meridian, Peace
River District (P.I.D.014-791-722) or ("South
1/2 of 30")
2.2 The Land that is
Sought to be Expropriated
[10] An affidavit from
a British Columbia land surveyor, Richard Redfern, provided
evidence as to the amount of land sought by the claimants
for the statutory rights of way across the subject lands.
Attached to Mr. Redfern's affidavit was a Plan dated
April 9, 1981, showing the gas pipeline right of way
across two of the three parcels making up the subject
lands, the West 1/2of 19 and the South ½ of 30.
This Plan is shown in the name of Home Oil Company Limited.
Mr. Redfern states that he calculates that the total
land required for the rights of way shown in this Plan
at 3.0178 hectares (7.46 acres).
[11] Mr. Redfern also attached
an Explanatory Plan dated September 28, 2000 showing
the gas pipeline right of way across the parcel that
had been Crown land in 1978, Parcel A of the North ½
of 30. This Plan is shown in the name of Anderson Exploration
Ltd. Mr. Redfern states that the area required for the
statutory right of way in this Plan is 1.17 hectares
(2.89 acres).
2.3 Chronology of Events
- On May 19, 1978, the claimant, Home Oil Company
Limited, applied under the applicable Pipe-lines
Act to construct the pipeline.
- On September 7, 1978, the Lieutenant Governor in
Council granted approval to construct the pipeline
under Certificate number 2561.
- On November 20, 1978, the Minister of Transport
and Communications provided a Consent to Operate and
a Certificate of Inspection for the pipeline under
Certificate number 2561.
- In April and July 1981, Mr. Schulte acquired title
to the subject lands.
- On September 14, 1981, the Plan dated April 9, 1981
showing the gas pipeline right of way across two of
the three parcels making up the subject lands (the
West 1/2 of 19 and the South 1/2 of 30) together with
book of reference was deposited in the Prince George
Land Title Office under number 27616. The name on
the Plan was Home Oil Company Limited.
- In 1995, according to the Form A filed by the claimants,
the claimant Anderson Exploration Ltd. acquired the
undertakings of the claimant Home Oil Company Limited
and their respective operations were amalgamated.
The evidence was that Anderson Exploration Ltd. acquired
the shares of Home Oil Company Limited but Home Oil
continued as a corporate entity.
- On September 29, 2000, the Explanatory Plan dated
September 28, 2000 showing the gas pipeline right
of way across the parcel that had been Crown land
in 1978, Parcel A of the North 1/2 of 30 together
with book of reference was deposited in the Prince
George Land Title Office under number PGP 45976. The
name on the Plan was Anderson Exploration Ltd.
- On October 2, 2000, a Mr. Grainger of Anderson Exploration
Ltd. wrote Mr. Schulte and attempted to negotiate
with him about acquiring statutory rights of way for
the pipeline across his property. This letter refers
to an initial telephone conversation with Mr. Schulte
in April 1999.
- On February 8, 2001, the annual report of Home Oil
Company Limited was filed in the British Columbia
Corporate Registry.
- On October 18, 2001, a Certificate of Amalgamation
was issued pursuant to the Canada Business Corporations
Act naming Devon Acquisition Corporation as the
corporation resulting from the amalgamation of Anderson
Exploration Ltd. and Devon Acquisition Corporation.
- On October 23, 2001, an application was made to
the Minister of Transportation on behalf of the claimant
Anderson Exploration Ltd. for approval of the location
of the existing pipeline pursuant to Section 14 of
the Railway Act.
- On November 14, 2001, a Certificate of Registration
was issued by the British Columbia Registrar of Companies
certifying that Anderson Exploration Ltd. had amalgamated
with Devon Acquisition Corporation and that the amalgamated
company is registered under the name Devon Acquisition
Corporation.
- On the same date, November 14, 2001, a Certificate
of Change of Name was issued by the British Columbia
Registrar of Companies certifying that Devon Acquisition
Corporation had changed its name to Devon Canada Corporation.
- On November 27, 2001, the Minister of Transportation
declined to approve the location of the existing pipeline
on the grounds that Section 14 of the Railway Act
was not applicable and no approval of the location
of the pipeline was required.
- On February 21, 2002, the claimants Home Oil Company
Limited and Anderson Exploration Ltd. sent the Registrar
of the Prince George Land Title Office the profile
for the pipeline, dated January 9, 2001, to complete
the filing requirements under section 48 of the Railway
Act.
- On March 13, 2002, the claimants Home Oil Company
Limited and Anderson Exploration Ltd. published a
Notice in an unidentified newspaper pursuant to section
48 of the Railway Act.
- On April 9, 2002, the claimants Home Oil Company
Limited and Anderson Exploration Ltd. signed a Notice
pursuant to section 50 of the Railway Act.
- On May 23, 2002, this section 50 Notice was personally
served on the respondent, Mr. Schulte.
- On June 5, 2002, the claimants Home Oil Company
Limited and Anderson Exploration Ltd. filed their
Form A with the board seeking a written order determining
the compensation to which the respondent was entitled.
- On June 26, 2002, the respondent Mr. Schulte filed
his Form B with the board raising jurisdictional and
procedural issues.
3. ISSUE
[12] The first issue in
this hearing is whether the board has jurisdiction to
make an award for compensation if there have been defects
in the procedure prescribed in the relevant acts, as
alleged. If the board has jurisdiction the board has
to decide compensation.
4. POSITION OF THE PARTIES
4.1 Respondent's position
[13] Mr. Schulte says that
compensation for the statutory rights of way cannot
be determined pursuant to section 53 of the Railway
Act because of two procedural defects. One of these
is that the claimants never obtained Ministerial approval
for the location of the pipeline under section 14 of
the Railway Act. The second is that the wrong
corporate name was used in the Section 50 Railway
Act Notice. Mr. Schulte says that when there are
these procedural defects the board has jurisdiction
to decide its own jurisdiction. The board can decide
that it does not have jurisdiction and as a result refuse
to make a determination of compensation.
4.2 Claimants' position
[14] The claimants say
that the board's only jurisdiction is to determine compensation.
According to the claimants the board can not embark
on any scrutiny of the procedural steps under the Pipeline
Act or the Railway Act. It should award compensation
as required under section 53 of the Railway Act
without consideration of the two alleged procedural
defects. In the alternative, the claimants say that
a proper interpretation of the Pipeline Act and
the Railway Act in these circumstances results
in no Ministerial approval being needed under section
14 of the Railway Act. As to the use of the incorrect
name, the claimants say that section 186 of the Canada
Business Corporations Act R.S.C. 1985 c. C-44 answers
that issue. Under section 186 the property of an amalgamating
corporation continues to be the property of the amalgamated
corporation. Existing claims are unaffected and an order
in favour of an amalgamating corporation may be enforced
by the amalgamated corporation.
5. LEGISLATIVE FRAMEWORK
[15] The relevant parts
of the Pipeline Act are:
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1 |
(1) |
In this
Act: |
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"commission"
means the commission established under section 2
of the Oil and Gas Commission Act; |
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"company"
means a person or corporation having authority under
this Act or a special Act, having power to construct
or operate pipelines to transport oil, gas or solids; |
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"company
pipeline" or "line" means
a pipeline to transport oil, gas, solids or water
that a company under this Act is authorized to construct
or operate, and includes all branches, extensions,
tanks, reservoirs, pumps, racks and loading facilities;
interstation systems of communication by telephone,
telegraph or radio; property and works connected
with it; |
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"gas"
means a gaseous hydrocarbon; |
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"pipeline"
means a continuous conduit between 2 geographical
locations through which oil, gas or solids is transported
under pressure, and includes |
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(a) |
a company pipeline, |
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(b) |
all gathering and
flow lines used in oil and gas fields to transmit
oil and gas, |
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but does not include piping used in a gas distribution
main as defined in the Gas Safety Act;
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(2) |
Unless
otherwise provided or the context otherwise requires,
words and phrases in this Act have the same meaning
as in the Railway Act.
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Part 3 — Location of Line |
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Commission's
approval required |
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10 |
Except
as this Act otherwise provides, a company must not
begin to construct a section or part of a company
pipeline until |
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(a) |
the commission has issued a certificate
granting the company leave to construct the line,
and |
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(b) |
the plan, profile and book of reference
of the section or part of the proposed line have
been approved by the commission. |
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Plans,
profile and book of reference |
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12 |
(1) |
If the commission grants
a certificate to a company giving leave to construct
a pipeline, the company must prepare and submit
to the commission a plan, profile and book of reference
in duplicate, showing in detail all of the following: |
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(a) |
the points in British Columbia between
which and the route along which the pipeline is
to be constructed, and any highway structure, bridge
or work to be shown that is within 300 m of the
proposed right of way of the pipeline; |
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(b) |
the intended size and capacity of
the pipeline; |
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(c) |
the location and capacity of all
proposed company stations, gate valves, check valves,
tanks, surface reservoirs, pumps, racks, storage,
loading and other terminal facilities, and connections
of all kinds, on the line; |
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(d) |
in the book of reference, a description
of the portion of land proposed to be taken in each
parcel of land to be traversed, giving particulars
of the parcels, the area, length and width of the
portion of each parcel to be taken, and the names
of the owners and occupiers so far as they can be
determined. |
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(2) |
The plans and profiles
must be on a scale of 1:10,000 or another suitable
scale the commission directs. |
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(3) |
The applicant must also
forward all other plans and information related
to the pipeline and its construction that the commission
may require for the proper understanding of the
plan, or for any other purpose. |
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Approval
of alterations |
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15 |
(1) |
If a company requires
a diversion, change or alteration to be made in
its line or a portion of it, as already constructed
or as merely located and approved, a plan, profile
and book of reference of the portion proposed to
be changed, showing the deviation, change or alteration
proposed, must be submitted for the commission's
approval. |
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(2) |
If the plan, profile
and book of reference of the portion of the line
proposed to be changed have been approved by the
commission and copies have been deposited as provided
in this Act with respect to the original plan, profile
and book of reference, the company may make the
deviation, change or alteration, and all provisions
of this Act apply to the portion of the line at
any time changed or proposed to be changed, as they
apply to the original line. |
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(3) |
The commission may exempt
a company from submitting the plan, profile and
book of reference, as provided in this section,
if the deviation, change or alteration is made or
to be made |
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(a) |
to lessen a curve, |
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(b) |
reduce a gradient, |
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(c) |
otherwise benefit a company pipeline,
or |
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(d) |
for any other purpose of public advantage
the commission believes expedient, |
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if the deviation, change
or alteration does not exceed 90 m from the centre
line of the company pipeline located or constructed
in accordance with the plans, profiles and book
of reference approved by the commission under this
Act. |
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Part 4 -- Taking and Using of Land |
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Appropriation
of land |
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16 |
(1) |
On obtaining a certificate,
the company may take and appropriate for the purposes
of its undertaking as much of the land or interests
in it of any person as may be necessary for the
building, construction, laying or operation of the
pipeline. |
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(2) |
The manner in which and
terms on which the company may exercise the right
to take and appropriate land or interest in it must
be |
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(a) |
in accordance with the terms of any
agreement affected between the company and the owner
of the land, other than Crown land, or an interest
in it, or |
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(b) |
in the absence of agreement, as
set out in this Part. |
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(3) |
Part 7 of the Railway
Act applies to pipelines and necessary works
and undertakings connected with them.
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[16] The relevant parts
of the Railway Act are:
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Part 7 -- Acquisition of Land by Expropriation and
Purchase |
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Limitations
as to extent of land taken |
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34 |
(1) |
For a right of way, the
land that may be taken without the consent of the
owner must not exceed 100 feet in breadth, except
in places where the rail level is or is proposed
to be more than 5 feet above or below the surface
of the adjacent land, when additional width may
be taken sufficient to accommodate the slope and
side ditches.
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Premature
contracts |
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45 |
(1) |
Any contract or agreement
made by any person authorized by this Act to convey
land, either before the deposit of the plan, profile
and book of reference, or before the setting out
and ascertaining of the land required for the railway,
is, if registered under the Land Title Act,
binding at the price agreed on, if the land is afterwards
so set out and ascertained within one year from
the date of the contract or agreement, and although
the land has in the meantime become the property
of a third person after the registration or record. |
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(2) |
Possession of the land
may be taken and the agreement and price may be
dealt with as if the price had been set by an award
of arbitrators as provided in this Act, and the
agreement has the force of and is in the place of
an award.
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Compensation
or damages may be agreed on |
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48 |
(1) |
After the expiration
of 10 days from the deposit of the plan, profile
and book of reference in the proper land title office,
and after notice of it has been given in at least
one newspaper, if any is published, in each of the
districts and counties through which the railway
is intended to pass, a company may apply to the
owners of land, or to persons empowered to convey
land or interested in land which may be taken, or
which suffers damage from the taking of materials
or the exercise of any of the powers granted for
the railway, to make an agreement that seems expedient
to both parties about the land or the compensation
to be paid for it, or for the damages, or as to
the mode in which the compensation is to be ascertained. |
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(2) |
If the parties fail to
agree, all questions that arise between them must
be settled as provided in this Act. |
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General
notice |
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49 |
(1) |
The deposit of a plan,
profile and book of reference, and the notice of
the deposit, is deemed to be a general notice to
all parties of the land which will be required for
the railway and works. |
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(2) |
The date of the deposit
is the date with reference to which compensation
or damages must be ascertained, but if the company
does not actually acquire title to the land within
one year from the date of the deposit, then the
date of the acquisition is the date with reference
to which the compensation or damages must be ascertained. |
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Notice
to be served |
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50 |
The notice served on
the owners of land, or persons empowered to convey
land or interested in land, must contain |
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(a) |
a description of the land to be taken,
or of the powers intended to be exercised with regard
to any land described in it, and |
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(b) |
a declaration of readiness to pay
a certain sum or rent as compensation for the land
or for damages. |
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Certificate
of surveyor |
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51 |
The notice must be accompanied
by the affidavit of a British Columbia land surveyor,
who is a disinterested person, stating the following: |
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(a) |
that the land, if the notice relates
to the taking of land, is required for the railway
or is within the limit of deviation allowed by this
Act; |
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(b) |
that he or she knows the land or
the amount of damage likely to arise from the exercise
of the powers; |
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(c) |
that the sum offered is, in his or
her opinion, a fair compensation for the land and
the damages likely to arise.
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Arbitration
where sum offered not accepted |
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53 |
(1) |
If, within 10 days after
the service of the notice or within one month after
the first publication of it, the owner or party
referred to in section 50 does not give notice to
a company that the owner or party accepts the sum
offered by it, the amount of compensation must be
determined by the Expropriation Compensation Board
under the Expropriation Act. |
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(2) |
The Expropriation Act
applies to the determination of the amount of compensation. |
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Payment
of compensation into court |
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54 |
(1) |
A company may pay an
amount for compensation into court, with the interest
on it for 6 months, and may deliver to the registrar
of the court an authentic copy of a conveyance,
or of an award or agreement if there is no conveyance,
and register the conveyance, award or agreement
in the proper land title office in any of the following
circumstances: |
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(a) |
if the company has reason to fear
any claim, mortgage or encumbrance; |
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(b) |
if any person to whom the compensation
or annual rent or any part of it is payable refuses
to execute a proper conveyance and guarantee; |
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(c) |
if the person entitled to claim the
compensation or annual rent cannot be found, or
is unknown to the company; |
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(d) |
if for any other reason the company
considers it advisable. |
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(2) |
The conveyance, or the
award or agreement, is then deemed to be the title
of the company to the land mentioned in it. |
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Publication
of notice |
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55 |
(1) |
Notice of the payment
and delivery, in the form and for the time the court
appoints, must be published in the Gazette and in
a newspaper published in the county in which the
land is located, or, if there is no newspaper published
in the county, then in a newspaper published in
the nearest county to it in which a newspaper is
published. |
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(2) |
The notice must |
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(a) |
state that the conveyance, agreement
or award constituting the title of the company is
obtained under this Act, and |
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(b) |
call on all persons claiming an interest
in or entitled to the land or any part of it to
file their claims to the compensation or any part
of it. |
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Compensation
in place of land |
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56 |
(1) |
The compensation for
any land which may be taken without the consent
of the owner stands in the stead of that land. |
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(2) |
As against a company,
any claim to or encumbrance on the land or any portion
of it must be converted into a claim to the compensation,
or to that proportion of it. |
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(3) |
A company is responsible
when it has paid the compensation or any part of
it to a person not entitled to receive it, saving
always its recourse against that person. |
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Effect
of adjudication |
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57 |
(1) |
All the claims filed
must be received and adjudicated on by the court,
and the adjudication on them forever bars all claims
to the land or any part of it, including any dower,
mortgage or encumbrance. |
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(2) |
The court must make the
appropriate order for the distribution, payment
or investment of the compensation and for the security
of the rights of all persons interested. |
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(3) |
If the order for distribution,
payment or investment is obtained within 6 months
from the payment of the compensation into court,
the court must direct a proportionate part of the
interest to be returned to the company. |
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(4) |
If from any error, fault
or neglect of the company the order is not obtained
until after 6 months have expired, the court must
order the company to pay into court, as part of
the compensation, the interest for the further period
as is right. |
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(5) |
The court may order that
all or a part of the costs of the proceedings, including
the proper allowances to witnesses, be paid by the
company or by any other person. |
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Right
to take possession |
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58 |
On payment or legal tender
of the compensation or annual rent awarded or agreed
on to the person entitled to receive it, or on the
payment into court of the amount of the compensation,
in the manner mentioned, the award or agreement
vests in a company the power to promptly take possession
of the land, or to exercise the right, or to do
the thing for which the compensation or annual rent
has been awarded or agreed on. |
6. ANALYSIS ON JURISDICTION
AND PROCEDURAL ISSUES
6.1 Jurisdiction
[17] The first issue to
be decided is the board's jurisdiction.
[18] Mr. Schulte submits
that generally boards such as the Expropriation Compensation
Board have jurisdiction to decide upon their own jurisdiction.
Mr. Secord, counsel for Mr. Schulte, referred me to
a number of Supreme Court of Canada cases including
Reference Re Residential Tenancies Act, [1981]
1 S.C.R. 714; National Corn Grower's Association
v. Canada (Canadian Import Tribunal), [1990] 2 S.C.R.
1324; and Cooper v. Canada (Human Rights Commission),
[1996] 3 S.C.R. 854. He also cited a decision of this
board McKinnon v. Duncan (City) (1992), 47 L.C.R.
47 (B.C.E.C.B.) where the board found that Duncan's
expropriation by-law was void for uncertainty and as
a result the board decided that it had no jurisdiction
to determine compensation. Finally he referred me to
the CED Western volume on Administrative Law, 3rd ed.,
para 371 which states: "A tribunal may lack jurisdiction
because of the non-fulfilment of certain requirements
upon which its authority expressly depends".
[19] The claimants strongly
oppose the respondent's position. They state that the
board does not have the jurisdiction to do other than
what is specifically authorized under the relevant statute.
According to Mr. Cosburn, counsel for the claimants,
section 26 and section 51 of the Expropriation Act,
make it clear that the legislature contemplated that
any validity of an expropriation under the Expropriation
Act, was to be considered by the Supreme Court,
not the board. Mr. Cosburn states that section 53 of
the Railway Act is mandatory in its direction
that the Expropriation Compensation Board must determine
compensation. It does not confer jurisdiction on the
Expropriation Compensation Board to do anything further.
He submits that because the purpose of the Expropriation
Compensation Board is to determine compensation, then
the legislature could not have meant that the members
of this board, who are not appointed on the basis of
any expertise in the administration of railways or pipelines,
nor for that matter on the basis of any expertise in
interpreting statutes, can determine whether various
procedural steps set out in the Railway Act have
been followed. If Mr. Schulte wants to raise these issues
he should go to the Supreme Court.
[20] Mr. Cosburn referred
me to the leave to appeal decision in Vancouver Marina
(1971) Ltd. v. British Columbia (Minister of Transportation
and Highways) (2001), 75 L.C.R. 316 (B.C.C.A.) and
the standard of review to be applied when tribunals
such as the Expropriation Compensation Board are interpreting
legislation. He suggested that the Supreme Court of
Canada cases referred to by Mr. Secord were not on point.
However, Mr. Cosburn submitted that another case put
forward by the respondent, Whitechapel Estates Ltd.
v British Columbia (Ministry of Transportation and Highways)
(1994), 54 L.C.R. 306 (B.C.E.C.B.), supported the board's
not having jurisdiction to go beyond its statutory mandate.
As to the board decision in McKinnon v. Duncan,
Mr. Cosburn said that it was in his view wrongly decided
on the point of declining jurisdiction after deciding
that the expropriation bylaw was void for uncertainty.
[21] I cannot accept the
claimants' position. There is considerable authority
to the contrary, although I was not much assisted by
the authority provided by either counsel.
[22] Sara Blake, in her
book, Administrative Law in Canada, (Toronto:
Butterworths, 1992), states at p. 99:
A tribunal may determine the scope of its own powers
and must do so when its authority is questioned. It
may interpret its enabling legislation to ascertain
whether it has the power necessary to perform a specific
act.
[23] I note section 27(2)
of the Interpretation Act, R.S.BC. 1996, c. 238
that provides:
| |
27 |
(2) |
If in an enactment power is given
to a person to do or enforce the doing of an act
or thing, all the powers that are necessary to enable
the person to do or enforce the doing of the act
or thing are also deemed to be given. |
If the board has power to determine
compensation, then it is deemed to have the power to
decide whether it can proceed with an application to
determine compensation when various procedural requirements
may not have been fully met.
[24] This issue was thoroughly
canvassed in Matsqui Indian Band v. Canadian Pacific
Ltd. (1995), 122 D.L.R. (4th) 129 (S.C.C.). The
question was whether a strip of land (with a railway
track) that passed through an Indian reserve and registered
in the Land Title Office in the name of Canadian Pacific
was land that was "in the reserve" and subject
to taxation by the Indian band under the Indian Act.
Pursuant to the Indian Act the bands passed bylaws
that provided for an appeal from an assessment to either
an assessment review committee or a board of review
with a further appeal to the Federal Court. The parties
were at odds as to whether the appeal tribunals could
entertain questions going to jurisdiction. Canadian
Pacific had brought an application for judicial review
directly to the Federal Court requesting that the assessments
be set aside on the basis that the strip of land in
question was not "in the reserve". At this
time no hearing had occurred at the appeal tribunal.
The bands had objected and requested that Canadian Pacific's
application for judicial review be struck out on the
grounds that there was a right to appeal any ruling
of the appeal tribunals that might be made to the Federal
Court.
[25] Major J. in one of
the judgments for the majority made a distinction between
questions that are clearly within the board's
jurisdiction and questions that decide upon the board's
jurisdiction. Relying on Dayco (Canada) Ltd. v. C.A.W.-Canada
(1993), 102 D.L.R. (4th) 609 (S.C.C.) he stated that
if the matter is brought to the appeal tribunals it
will have jurisdiction to first consider the question
as to whether the land was within the reserve although
any decision on this issue is subject on appeal to the
standard of correctness. Lamer C.J.C., in another judgment
for the majority stated at para 23:
It is now settled that while the decisions of administrative
tribunals lack the force of res judicata, nevertheless,
tribunals may embark upon an examination of the boundaries
of their jurisdiction. Of course they must be correct
in any determination they make, and courts will generally
afford such determinations little deference.
Lamer C.J.C. went on to say at para
29:
I therefore conclude that the Federal Court and the
appeal tribunals established under section 83(3) of
the Indian Act have concurrent jurisdiction
to hear and decide the question of whether the respondent's
land is "in the reserve".
[26] Despite finding that
the appeal tribunals had jurisdiction to consider this
initial question that bore upon their jurisdiction,
both Major J. and Lamer C.J.C. ultimately dismissed
the appeal and allowed the application for judicial
review of the assessments by the Federal Court to proceed.
Major J. stated that when Canadian Pacific had brought
the matter to the Federal Court first, they should not
be required to go back and proceed through the appeals
tribunal when the only issue was a fundamental one of
lack of jurisdiction. Lamer C.J.C. found that there
was a reasonable apprehension of bias flowing from the
institutional structure of the appeal tribunals. However,
I note that in the present case, unlike Matsqui,
the preliminary questions about jurisdiction have been
brought to the board in the course of an application
to determine compensation.
[27] The question of jurisdiction
of this board under the same provisions in the Pipeline
Act and Railway Act has been considered in
a general way in BC Gas Inc. v. Lansdall (1992),
48 L.C.R. 209 (B.C.E.C.B.). This board reconciled the
requirement under the Expropriation Act that
owners whose land had been expropriated are entitled
to compensation with the unusual procedure under the
Pipeline Act and Railway Act, where title
to the land is not transferred until after the compensation
hearing. As in the present case, a pipeline had already
been laid on Dr. Lansdall's land, although under quite
different circumstances. The board described this as
a permanent encroachment on his land. At p. 218 they
concluded that "the entry on Dr. Lansdall's land
by the gas utility constituted an "expropriation"
of his interest
even though formal title thereto
will not vest until our award is registered in the Land
Title Office". As a result "we have
jurisdiction to award compensation pursuant to section
[31] of the Expropriation Act". I do not
necessarily agree that there would be no jurisdiction
where the claimant had not already "encroached"
on the property owner's land, but on the facts of the
present case I do not need to make any determination
of this issue.
[28] Other decisions of
this board have considered the issue of whether requirements
under various Acts had been met such that the board
could assume jurisdiction to determine compensation.
[29] In Tancredi v.
British Columbia (Minister of Transportation and Highways)
(1995), 57 L.C.R. 154 (B.C.E.C.B.) this board considered
whether it had jurisdiction to determine a damage claim
under section 18 of the Water Act, R.S.B.C. 1979,
c. 429 for the diversion of water from Wagg Creek by
the Ministry of Transportation and Highways as part
of the construction of an interchange. The board reviewed
different sections of the Water Act and Part
5 of the Water Regulation, B.C. Reg. 204/88,
and reached the conclusion at p. 166 that it had no
jurisdiction to determine compensation under section
18 of the Water Act. Jurisdiction to determine
compensation under this section presumably fell to the
Supreme Court of British Columbia.
[30] In McEachern v.
British Columbia Hydro and Power Authority (1997),
60 L.C.R. 186 (B.C.E.C.B.) this board again considered
the question of whether it had jurisdiction to determine
compensation for the presence of a hydro pole and lines
on the land of the claimant, Mr. McEachern, under section
16 of the Hydro and Power Authority Act, R.S.B.C.
1979, c. 188. After lengthy analysis of the facts, the
common law and the provisions of the Hydro and Power
Authority Act this board concluded that the requirements
under section 16 of that Act had not been met. Because
there had been no expropriation or exercise of a power
of interference under section 16 of the Hydro and
Power Authority Act, the board did not have jurisdiction
to hear a compensation claim. Mr McEachern's remedy
was to commence an action to recover damages and restrain
or remove Hydro's works.
[31] Another case in which
the board considered its jurisdiction to award compensation
was Frobeen v. Central Saanich (District) (1996),
58 L.C.R. 267 (B.C.E.C.B.). The preliminary issue in
Frobeen was whether there was a statutory basis for
compensation under the Municipal Act R.S.B.C.
1979, c. 290 as a result of a bylaw specifying a 30
metre set-back from the natural boundary of Sand Hill
Creek, a setback that affected 38% of the claimants'
property. After reviewing the facts and the legislation,
the board concluded that the statutory prerequisites
under sections 963 and 972 of the Municipal Act
had been met and therefore under section 972, compensation
was prohibited. As a result the board lacked jurisdiction
to proceed. I note that Mr. Cosburn was counsel for
the claimant in both Frobeen and McEachern.
[32] In Denault v. Barclay,
unreported, September 3, 2002, E.C.B. Control No. 41/00/226,
there was a submission similar to that in this case
that certain procedural steps under the Water Regulation
had not occurred and as a result the application by
the claimant, Denault, could not proceed. Denault, as
a licensee under section 27 of the Water Act,
sought to expropriate certain land from the Barclays
that he submitted were required for the construction,
maintenance, improvement or operation of works authorized
under his licence. Denault's application was for the
Expropriation Compensation Board to determine the legal
nature and location of what was required, the character
of the works to be constructed, and the governing terms
and conditions of use. (Compensation to the Barclays
for any such taking was to be determined at a subsequent
hearing.) The chair, Robert Shorthouse, described the
preliminary question at para 38:
The real issue, as I see it, is
not that the board has a duty to enforce compliance
with all procedural requirements under the relevant
enactments. Rather, the board must be satisfied that
it has the jurisdiction to proceed with an application
when those procedural requirements have not been,
or may not have been, fully met.
After an analysis of the statutory
requirements under the Water Act and the Water
Regulation and the facts of the case he went on
to find at para 39:
While there is no proof that
these amendments resulted in any refiling of documents
with the comptroller and the registrar, and in that
sense it has not been shown that the procedural requirements
have been perfected, I do not consider this defect
to be fatal to the claimant's application, to deprive
the board of jurisdiction already assumed, or to be
incapable of being remedied if necessary at a later
date but before an order of this board takes effect.
[33] I find the facts in
the Denault case more applicable than those in Whitechapel.
In Whitechapel the board first determined that
the statutory provisions requiring the respondent to
produce an appraisal report pursuant to section [20]
of the Expropriation Act did not apply when the
expropriation had occurred prior to the Expropriation
Act becoming law. The board then went on and found
that it did not have jurisdiction to grant the extraordinary
remedy of making a mandatory order for the creation
and delivery of an appraisal report under section [20]
when there was no statutory authority for it to do so.
This is to be distinguished from the circumstances in
the present case where the issue is whether the board
has jurisdiction to consider if the alleged procedural
defects prevent the board from embarking on the determination
of compensation.
[34] In summary, Matsqui
establishes that this board, like any other tribunal,
has jurisdiction to determine whether it has the jurisdiction
to embark on the issue to be decided. The standard of
review of correctness applies to many of the board's
determinations; the fact that the standard of review
is correctness does not deprive the board of jurisdiction.
Tancredi, McEachern, Frobeen and Denault
are all examples of cases where the board interpreted
the requirements under the Water Act, the Water
Regulation, the Hydro and Power Authority Act
or the Municipal Act, including preliminary procedural
requirements, in order to determine whether it had jurisdiction
to proceed and assess compensation. In a number of the
cases where the board has considered the issue of jurisdiction,
it concluded that it had none. The procedural provisions
under the Pipeline Act and the Railway Act
are no different in kind than the procedural requirements
under these other Acts. I conclude that the board has
jurisdiction to determine whether or not it has jurisdiction
to determine compensation.
6.2 Ministerial Approval
[35] I must now consider
the two procedural defects alleged by Mr. Schulte. The
first of these is whether Ministerial approval under
section 14 of the Railway Act is necessary for
the existing gas pipeline.
[36] The respondent, Mr.
Schulte, pointed out in his Form B that he was not aware
of any approval having been issued for the existing
pipeline. In his submissions he said that the approvals
issued in 1978 were for the construction and operation
of the pipeline for Home Oil Company Limited and not
for Anderson Exploration Ltd or Devon Canada Corporation.
The claimants had attempted to obtain approval for the
existing pipe line in 2001 and failed. The Railway
Act provides at section 15 that once the Minister
of Transportation has approved the location of the pipeline,
a plan, profile and book of reference must be provided
to the Minister for approval. In Part 7 of the Railway
Act, at section 49, this plan, profile and book
of reference are to be filed in the Land Title Office
and this deposit is deemed to be general notice to all
parties of the land which will be required. According
to the respondent, the overall legislative scheme makes
Ministerial approval a prerequisite for any determination
of compensation by this board and the failure to obtain
this Ministerial approval is fatal.
[37] The claimants say
that when the Oil & Gas Commission Act, the
Pipeline Act and the Railway Act are reviewed
together, the approval of the Minister under section
14 of the Railway Act is not necessary. They
had sought this approval out of an abundance of caution.
The existing pipeline was approved in 1978 and the failure
of the claimants to register the statutory rights of
way obtained in 1978 did not invalidate that approval.
[38] I agree with the claimants
(and the Minister of Transport) that the approval of
the Minister under section 14 of the Railway Act
is not necessary. When the Oil & Gas Commission
Act, the Pipeline Act and the Railway
Act are reviewed together, no approval under section
14 of the Railway Act is required. If the pipeline
was being approved and constructed now, the procedures
for certification and approval are found in the current
Pipeline Act, and it would be the Oil and Gas
Commission who approved any new pipeline. But in this
case, as indicated above, the location of the pipeline
has already been approved by the Lieutenant Governor
in Council in 1978. Furthermore, following construction,
the operation of this pipeline has already been certified,
inspected and approved by the Minister of Transport
and Communications, also in 1978. These approvals were
pursuant to the procedures that were in effect at that
time in the Pipe-lines Act. The subsequent changes
in corporate structure of the company that owned the
pipeline are irrelevant to the issue of approvals given
for the location, construction and operation of the
pipeline in 1978. There is nothing in the current legislation
that compels any further approvals on the facts in this
case. The only thing that remains to be done is to complete
the transfer of the statutory rights of way to the claimants.
Because the original statutory rights of way were not
registered in the Prince George Land Title Office in
1978 new ones have to be obtained from the present owner.
Under section 16(1) of the Pipeline Act, having
obtained a certificate, the company may take land for
the pipeline. If the owner does not agree to transfer
the land for the pipeline then under 16(2) and 16(3)
of the Pipeline Act, the company can expropriate
the land under Part 7 of the Railway Act. Mr.
Schulte is entitled to compensation for the land that
is taken.
[39] Part 7 of the Railway
Act includes section 53 that provides for determination
of compensation by the Expropriation Compensation Board
under the Expropriation Act if the owner of the
land does not accept the money offered in the prescribed
Notice under section 50 of the Railway Act within
a certain time frame of it being served on the owner.
Under section 54 of the Railway Act, if the person
to whom the compensation is payable refuses to execute
a proper conveyance, the award of compensation by the
Expropriation Compensation Board is deemed to be the
title of the company to the land mentioned in the award.
Under section 56 of the Railway Act, the compensation
for an interest in land taken without the consent of
the owner stands in the stead of that land and under
section 58 the award vests in a company the power to
take possession of the land on payment of the compensation
awarded to the person or into court. All of these sections
are included in Part 7 of the Railway Act that
is invoked under section 16 of the current Pipeline
Act. Section 14 of the Railway Act is not
found in Part 7.
[40] It is true that there
is reference in section 15 and 16 of the Railway
Act to preparing the plan, profile and book of reference
following approval of the minister under section 14
of the Act, when later on in sections 48 and 49 in Part
7 these documents are to be deposited in the proper
Land Title Office. However, as indicated above, the
Lieutenant Governor in Council and the Minister of Transport
and Communications provided approvals and consents in
1978. One of the Plans and books of reference for the
existing pipeline was filed in the Land Title Office
shortly after its construction in 1981, though the other
filings occurred more recently. The legislation does
not require new approvals before any of the outstanding
statutory procedural steps such as further filings and
notices for the existing pipeline are completed.
[41] I conclude that no
Ministerial approval under section 14 of the Railway
Act (or indeed any further approval) is necessary
for the existing pipeline.
6.3 Wrong Corporate
Name
[42] The second procedural
defect alleged by Mr. Schulte is the use of the wrong
corporate name in the Section 50 Railway Act
Notice.
[43] In 1995, according
to the Form A filed by the claimants, the claimant Anderson
Exploration Ltd. acquired the undertakings of the claimant
Home Oil Company Limited and their respective operations
were amalgamated although each retains assets in its
own name. In November 2001 according to the Form A filed
by the claimants, Devon Energy Corporation (sic) acquired
the claimant Anderson, although again the Form A says
that all three companies continue to hold assets and
to varying extents operate in their own names.
[44] The Form B filed by
Mr. Schulte stated that the wrong company gave the Section
50 Notice as required under the Railway Act.
He submits that after the date of the amalgamation in
the fall of 2001, followed by the name change, the only
proper entity was Devon Canada Corporation and not Anderson
Exploration Ltd. As a result when the section 50 Notice
under the Railway Act was signed on April 9,
2002 and served on the respondent on May 23, 2002, it
should have been in the name of Devon Canada Corporation.
Mr. Secord, counsel for the respondent, referred me
to section 181 of the Canada Business Corporations
Act, which provides that two or more corporations
may amalgamate and continue as one corporation
(emphasis added). He also relied on Regina v. Black
& Decker Manufacturing Co. Ltd. (1974), 43 D.L.R.
(3d) 393 (S.C.C.). In that decision, Dickson J., speaking
for the court, interpreted the word "amalgamate"
in section 137 of the Canada Corporations Act,
R.S.C. 1970, c. C-32, a provision similar to section
181. He stated at p 400:
the end result is to coalesce
to create a homogeneous whole. The analogies of a
river formed by the confluence of two streams, or
the creation of a single rope through the intertwining
of strands have been suggested by others.
As a result of the wrong name being
used the respondent says that compensation cannot be
determined until a new section 50 Railway Act
Notice in the correct corporate name is issued.
[45] The claimants dispute
this submission. First, they explain that the Plans
filed in the Prince George Land Title Office showing
the statutory rights of way were in the name of Home
Oil with respect to the West 1/2 of 19 and the South
1/2 of 30 (in September 1981) and in the name of Anderson
with respect to Parcel A of the North 1/2 of 30 (in
September 2000). These corporate names have been carried
through to the section 50 Notice and the Form A, as
the award that is eventually registered in the Prince
George Land Title Office must tie into these Plans.
[46] Next they say that
the amalgamating corporation's property, claims and
liabilities continue on in the amalgamated corporation.
They say that the decision of Dickson J. in Regina
v. Black & Decker supports this position. They
point to the following provisions found in section 186
of the Canada Business Corporations Act:
| |
186. |
On the date shown in a certificate
of amalgamation
|
| |
|
|
(b) |
the property of each amalgamating corporation
continues to be the property of the amalgamated
corporation; |
| |
|
|
(c) |
the amalgamated corporation continues to be liable
for the obligations of each amalgamating corporation; |
| |
|
|
(d) |
an existing cause of action, claim or liability
to prosecution is unaffected;
|
| |
|
|
(f) |
a conviction against, or ruling, order or judgment
in favour of or against, an amalgamating corporation
may be enforced by or against the amalgamated corporation;
|
[47] Finally, they submit
that there is no justifiable reason to require that
the Section 50 Notice under the Railway Act be
reissued in the name of Devon Canada Corporation rather
than Home Oil Company Limited and Anderson Exploration
Ltd. The respondent is unaffected by the amalgamation
and no one has been misled by the existing Section 50
Notice.
[48] On the evidence that
I received, Home Oil is still a legal entity that is
registered with the British Columbia Registrar of Companies
as an extraprovincial company. It had filed an annual
report with the British Columbia Registrar of Companies
on February 8, 2001. No objection is taken to Home Oil's
name as the company acquiring the statutory right of
way on West ½ of 19 and South ½ of 30
on the section 50 Railway Act Notice.
[49] At the hearing counsel
for the claimants applied to amend the pleadings to
add now known as Devon Canada Corporation after
Anderson Exploration Ltd. This application was unopposed
and was supported by the evidence. As a result this
amendment is allowed. The issue is then whether a section
50 Railway Act Notice using an earlier name for
one of the corporate claimants, Anderson Exploration
Ltd., is fatal to this application for compensation
proceeding.
[50] Both sides referred
me to the provisions of the Canada Business Corporations
Act. Section 186 does provide that the property
of an amalgamating corporation continues to be the property
of the amalgamated corporation and an existing action
or claim by an amalgamating corporation can be continued
by the amalgamated corporation. However, the opening
words of section 186 are "on the date shown in
a certificate of amalgamation". Anderson Exploration
Ltd. amalgamated with Devon Acquisition Corporation
and then changed its name to Devon Canada Corporation
on November 14, 2001. When negotiations began with Mr.
Schulte to acquire the statutory right of way in 1999
and 2000 Anderson Exploration Ltd. was the correct name
of the company. However, when the section 50 Railway
Act Notice was signed on April 9, 2002 and served
on Mr. Schulte on May 23, 2002 it should have been issued
in the name of Devon Canada Corporation as the proper
legal entity at that time. In this case it is not an
existing action by an amalgamating company at the date
shown in the certificate of amalgamation but actions
taken after the date of amalgamation in the name of
the earlier amalgamating company. While section 186
does not resolve the issue in this case, the wording
of section 186 and the case of Regina v. Black &
Decker, do support the ongoing nature of the old
amalgamating company and its property in the new amalgamated
company.
[51] I am assisted by a
number of cases that were not provided by counsel. Haughton
v. Heffley Creek (Waterworks District) (1997), 61
L.C.R. 265 (B.C.C.A.) is a case where there were also
alleged procedural defects in the expropriation process.
After passing a bylaw authorizing the expropriation
the District filed an expropriation notice and the explanatory
plan in the Land Title Office pursuant to the statutory
procedures set out in the Expropriation Act.
However, at the time that this was done the land sought
to be expropriated was not within the respondent District.
An application for judicial review by another person
in identical circumstances at this stage resulted in
the expropriating bylaw and the expropriation notice
being set aside. See Don-Bar Holdings Ltd. v. Heffley
Creek (Waterworks District) (1995), 55 L.C.R. 89
(B.C.S.C.). However, in Haughton, the District
was eventually successful in having the subject land
included within its boundaries and the District passed
a second bylaw authorizing the expropriation and rescinding
the first bylaw. Haughton brought a petition seeking
judicial review after the second bylaw; he sought an
order that the expropriation notice and the explanatory
plan that were filed in the Land Title Office before
there was any valid expropriation bylaw in place were
a nullity. Blair J. dismissed the petition and the Court
of Appeal dismissed the appeal. Relying on Erickson
v. Kamloops (City) (1993), 50 L.C.R. 81 (B.C.S.C.),
Blair J. held that the passing of a bylaw is not a condition
precedent to the District invoking the Expropriation
Act. The District can take the various steps in
any order provided all of the required steps are taken
before the expropriation is completed. The expropriation
notice and the explanatory plan were not a nullity even
though they were filed at a time when the District did
not include the land that was to be expropriated. The
Court of Appeal agreed with the trial judge's reasons.
[52] The case of Seaside
Acres Ltd. v. Pacific Coast Energy Corp. (1994),
52 L.C.R. 106 (B.C.C.A.) was also to do with alleged
procedural defects. The Minister as the approving authority
had approved the expropriation before the date of deemed
service of the notice of expropriation, according to
the procedural steps set out in the Expropriation
Act. The claimant had brought a petition seeking
judicial review to set aside the expropriation. The
Supreme Court dismissed the petition and the Court of
Appeal dismissed the appeal. Goldie J.A. speaking for
the court stated that when the expropriation was for
a linear development (and as a result the Minister's
approval was automatic), the statutory sequence of steps
did not apply. At p. 114 he made the following observation:
It is not material to the conclusion
I have reached on the true meaning of the Act but
I note Seaside was aware in October, 1989, that a
right of way for an underground pipeline was required
across its property and received actual notice of
the commencement of the expropriation process on August
31, 1990. It cannot be said that there was any actual
prejudice to Seaside in the Minister's approval being
granted that day.
[53] Finally, I note Denault
v. Barclay, referred to above. In that case there
was a submission that certain procedural steps with
respect to service of amended documents on the water
comptroller and the registrar under the Water Regulation
and the Expropriation Act had not occurred and
that as a result the application of the claimant, Mr.
Denault, for a determination by this board of various
aspects of the taking and the works to be constructed
could not proceed. As already described, the Chair,
Robert Shorthouse, stated that he did not find the alleged
procedural defects to be fatal to the claimant's application.
[54] In the present case
the use of the earlier name of the corporation in the
section 50 Railway Act Notice has been superseded
by an application to determine compensation under the
Expropriation Act. The Form A which is the initiating
pleading for this application includes much of the substance
of the section 50 Railway Act Notice, including
the two specified provisions: a description of the land
to be taken and a declaration of readiness to pay a
certain sum as compensation for the land or damages.
The Form A has been amended, to include the current
corporate name. The expropriation, in which title to
the statutory right of way is transferred to the claimants,
has not yet been completed. The project is a long standing
linear development. Relying particularly on Haughton
v. Heffley Creek I conclude that the use of the
earlier name of the corporation in the section 50 Railway
Act Notice is not fatal to this application for
a determination of compensation when all of the procedural
requirements will be in place by the time of the actual
vesting of title in the expropriating company. As the
court said in Seaside, although it is not material to
my decision I note that the respondent has had notice
of the claimants wanting to acquire a statutory right
of way across his property since at least April 1999.
It cannot be said that there is any actual prejudice
to the respondent as a result of the mistake in the
section 50 Notice.
6.4 Conclusion on Jurisdiction
and Procedural Defects
[55] To summarize, I have
decided that I have jurisdiction to consider the prior
question as to whether I have jurisdiction to determine
compensation in this matter. With respect to the two
alleged procedural defects I have concluded the following:
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i |
When the Oil & Gas Commission Act,
the Pipeline Act and the Railway Act
are reviewed together, no approval by the minister
under section 14 of the Railway Act is required,
nor are further approvals of any kind required. |
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ii |
The use of the earlier name of the corporation
in the section 50 Railway Act Notice is not
fatal to this application for a determination of
compensation when the Form A has been amended to
include the present legal name of the corporation.
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Because I have not found either of
the alleged procedural defects to be fatal I conclude
that I have jurisdiction to proceed with the application
to determine the compensation to be paid to Mr. Schulte
for the statutory right of way on the subject lands.
7. COMPENSATION
[56] As indicated above
the evidence on compensation was completed so that if
the board decided that it did have jurisdiction, the
determination of compensation could proceed without
having to reconvene any further hearing.
[57] Only one appraisal
report was presented at the hearing. This was a report
by W.W.G. McDonald of True North Realty Appraisals dated
March 22, 2002 prepared for the claimants. Mr. McDonald
was designated A.A.C.I. (Appraisal Institute of Canada),
as well as R.I.(B.C.) by the Real Estate Institute of
British Columbia as required by para 8 of the Expropriation
Act General Regulation, B.C. Reg. 451/87. Mr. McDonald
used the direct comparison approach relying on four
sales of comparable properties. His opinion of value
for the good cultured farm land on the subject lands
was between $616 and $626 per acre. However he applied
a bonus for Mr. Schulte's improvement of the soil through
long range soil practices of between 35% and 40%. This
led him to a final opinion of value for the good farm
land of $858 per acre. The value for the rough range
land was lower, at $382 to $385 per acre. After consideration
of the bonus for improvement of the soil his final opinion
of value for rough range land on the subject property
was $530 per acre. The opinions of value were as of
the date of his report, March 22, 2002. Mr. McDonald
did not describe the rights of way nor provide any estimate
of value for the rights of way.
[58] Section 50 of the
Railway Act provides that the Notice under this
section must contain a description of the land to be
taken as well as a declaration of readiness to pay a
certain sum as compensation for the land. The Notice
dated April 9, 2002 attaches the proposed Statutory
Right of Way documents for the subject lands. Under
section 51 of the Railway Act the Notice must
be accompanied by an affidavit from a British Columbia
land surveyor. The affidavit from Mr. Redfern states
that the statutory right of way in the Plan for Parcel
A of North 1/2 of 30 in the name of Anderson Exploration
Ltd. is 1.17 hectares (2.89 acres). Mr. Redfern goes
on to state that the statutory right of way in the Plan
for West 1/2 of 19 and South 1/2 of 30 in the name of
Home Oil Company Limited is 3.0178 hectares (7.46 acres).
[59] The section 50 Railway
Act Notice (and the Form A) also states that Anderson
Exploration Ltd. is prepared to pay $501.93 as compensation
for the statutory right of way on Parcel A of North
1/2 of 30. The Notice says that this sum is calculated
by taking 50% of the fee simple value as determined
by Mr. McDonald. The value as determined by Mr. McDonald
is stated to be reduced by 50% to take into account
the fact that the rights taken by Anderson in the statutory
right of way allow continued use of the surface by Mr.
Schulte, with only limited exceptions. Fifty per cent
of the value of good farm land as determined by Mr.
McDonald is stated to be $429 per hectare ($858 per
hectare x 50%). With the statutory right of way on Parcel
A of North 1/2 of 30 occupying 1.17 hectares the compensation
for the statutory right of way is $501.93 ($429 x 1.17).
[60] The Notice (and the
Form A) goes on to provide that Home Oil Company Limited
is prepared to pay $1,294.64 as compensation for the
statutory right of way on West 1/2 of 19 and South 1/2
of 30. Again the value as determined by Mr. McDonald
is stated to be reduced by 50% to take into account
the fact that the rights taken by Home Oil allow continued
use of the surface by Mr. Schulte. At the same 50% of
the value of good farm land as determined by Mr. McDonald
times the size of the statutory right of way on West
1/2 of 19 and South ½ of 30, compensation for
this statutory right of way is $1,294.64 ($858 x 50%
x 3.0178).
[61] The section 50 Railway
Act Notice also provided that each of the claimants
were willing to pay $500 for disturbance damages (for
a total of $1,000). The Form A denies that there is
any injurious affection to the remaining lands or any
disturbance damages when the pipeline is already in
the ground.
[62] Mr. McDonald did not
attend the hearing and his assessment of value was not
challenged at the hearing.
[63] One of the factors
to be determined is the date for assessment of damages.
There was no discussion of this factor at the hearing.
Section 49 of the Railway Act provides that the
date of the deposit of plans in the Land Title Office
(pursuant to section 48) is the date to which compensation
or damages must be ascertained, but if the company does
not actually acquire title to the land within one year
then the date of acquisition is the date to which the
compensation or damages must be ascertained. In this
case one of the plans was filed in the Prince George
Land Title Office on September 14, 1981 and the other
was filed on September 29, 2000. However, the filings
were not complete until the profile was filed in the
Land Title Office on February 21, 2002. Mr. McDonald's
report provides a valuation for good cultured farm land
and for rough range land based on four comparable sales
that occurred in 2001. Mr. McDonald's valuation is as
of March 22, 2002. Mr. McDonald's report does not provide
any reason to think that there is much volatility in
the value of this farm land. In BC Gas Inc. v. Lansdall
this board set out that under the same provisions the
parties should use the date of the first day of the
hearing as the date for assessment. Clearly there are
practical difficulties with providing evidence of valuation
at some date following a hearing when the company acquires
title. I find Mr. McDonald's valuation of the fee simple
value for good farm land applicable on February 21,
2002 and on the date of this decision. In any event
the fact that valuation of the land in the statutory
right of way has been enhanced in two different ways
means that the date of the assessment for compensation
for the market value of the statutory right of way is
of less consequence. (The two methods by which the valuation
has been enhanced are that all the land occupied by
the statutory right of way has been valued as good farm
land when some of it is rough range land and a bonus
of 38% has been added to the original valuation per
acre for soil improvement.)
[64] Next I must consider
the reduction of compensation by 50% because the proposed
taking is a statutory right of way for an underground
gas pipe line. The 50% reduction of the fee simple value
to be applied was not challenged at the hearing. E.C.E.
Todd in The Law of Expropriation and Compensation
in Canada, 2nd ed. (Carswell, Toronto, 1992) discusses
the determination of compensation for pipeline right
of way. At p. 431 Professor Todd states that there are
three elements to be considered: the value of the land
impressed with the right of way, the residual rights
to the owner and injurious affection to the remaining
land. He goes on to observe that pipelines buried under
agricultural land generally allow farming to continue
with little if any disruption and that therefore the
residual value to the farmer had to be taken into account.
The Ontario Court of Appeal in Re International Pipe
Line Co., [1955] O.W.N. 301 suggested consideration
of the following factors in determining residual value:
future maintenance of the pipeline, pipeline inspections,
possible construction of additional lines, restrictions
against building structures such as roadways or fences,
liability of the owner to pay property taxes with respect
to the land included in the right of way and the effect
upon servicing the remaining land.
[65] Counsel for the claimants
referred me to 286684 B.C. Ltd. v. Colwood (City)
(1999), 66 L.C.R. 148 (B.C.E.C.B.), in which this board
awarded 75% of the fee simple value for an underground
sewer pipe right of way that cut across the middle of
a 2.66 hectare development property and therefore curtailed
potential development of the parcel. There was evidence
in this case that Colwood had settled with other owners
for only 5% of the fee simple value. However, in those
cases the right of way ran along the boundary of the
property and because of setback provisions there was
no effect on the residual value. In two related cases
Cokato Dairy & Stock Farms Ltd. v. Fernie (City)
(1994), 54 L.C.R. 199 (B.C.E.C.B.) and Jones v. Fernie
(City) (1994), 54 L.C.R. 285 (B.C.E.C.B.), the board
compensated the two agricultural owners for a sewer
right-of-way at 50% of the fee simple value. In both
of these cases, the board noted that the surface could
still be used as it had been before the taking (horse
pasturing in one case and hay growing in the other).
The board also observed that given the minimum effect
on the owner's use of the land, a smaller percentage
than 50% might have been appropriate compensation if
the respondent, Fernie, had not conceded 50% of the
fee simple valuation. At the other extreme, in Mayfair
Resources Corp. v. Greater Vancouver Water District
(1997), 61 L.C.R. 183 (B.C.E.C.B.) the board awarded
100% of the fee simple value for a right of way for
an underground water pipe on the grounds that the development
potential of the property had been significantly diminished.
There was more evidence on the decrease in development
potential in Mayfair Resources then there was
in 286684 B.C. Ltd. v. Colwood (City).
[66] In the present case,
the terms of the statutory right of way attached to
the section 50 Railway Act Notice and the draft
awards, provide that the land owner, Mr. Schulte, covenants
that he will not do various things. These include refraining
from creating or increasing any hazard to the pipeline;
blasting on the subject lands without specific permission;
and doing anything which might endanger or injure the
pipeline or impair its operating efficiency. The covenants
also include refraining from constructing any building
or structure on the right of way, from placing pavement
on the right of way, from planting any tree or shrub
on the right of way, and from placing or operating any
equipment on the right of way. The owner also covenants
not to deposit any deleterious, or harmful, or polluting
substance on the right of way. The owner is to permit
access to the claimants, who are to pay compensation
to the owner for damages to any building, crops, livestock,
drains, culverts, corrals or fences on the right of
way that is damaged by the claimants. Mr. Schulte retains
the use of the surface of the statutory right of way
after consideration of these exclusions and others contained
in the statutory right of way. There was no discussion
of the particular terms of the statutory right of way
at the hearing.
[67] The pipeline runs
on a diagonal more or less through the middle of the
three parcels that make up the subject property. For
some time after acquiring the property Mr. Schulte was
not aware of the pipeline running through it. His son
discovered the pipeline when he was using an excavator
to try and dig a rock out of one of the fields. Mr.
Schulte told me his residence is located on the subject
property to the north west of the pipeline. He has a
stack yard where he stacks bales of hay that is located
on the right of way. He also has an area where his cows
calve and feed that has the right of way through the
middle of it. I assume that these areas are demarcated
with a fence. There was evidence that Mr. Schulte used
equipment, including a tractor on the subject property.
It would appear that the terms of the covenant restrict
any fences that may exist for the stack yard and for
the calving and feeding area as well as the operation
of equipment. I assume that the cattle can continue
to use the land contained in the right of way as range
land and as a calving and feeding area. I was not given
specific evidence on how Mr. Schulte's use of the property
as a ranch may be curtailed by the terms of the statutory
right of way. But on the face of the document it appears
that there is some restriction to the residual value
in the eyes of a willing purchaser, even though the
use as range land can continue. On the evidence that
I was given I conclude that 50% of the fee simple value
of the farmland is appropriate.
[68] Next I must consider
the amount of compensation for the land contained in
the statutory right of way. Although the amount of compensation
set out in the section 50 Railway Act Notice
and the Form A was not questioned, a review of the Notice
indicates that it contains an error in its calculation.
Mr. McDonald estimated the value of the subject lands
at $858 per acre not per hectare. When the calculations
are redone using $858 per acre and 50% of the fee simple
value the compensation for the statutory right of way
on Parcel A of North 1/2 of 30 is $1,240 and on West
1/2 of 19 and South 1/2 of 30, $3,199 ($858/0.4047 ha
x 50% x 1.17 ha) and ($858/0.4047 ha x 50% x 3.0178
ha).
[69] There was no evidence
to support any claim for disturbance damages or injurious
affection and so no award is made for these items.
[70] There remains the
issue of costs. Counsel for the claimants requested
that the issue of costs be adjourned. Counsel for the
respondent made no reference to costs. If I adjourn
costs then further submissions or a further hearing
will be required. In the absence of agreement on the
need for adjournment and given the circumstances of
this case I decline to adjourn costs. The board does
not want to encourage a multiplicity of proceedings,
especially where the amount of money involved is small.
[71] In BC Gas Inc.
v. Lansdall this board found that an owner under
the same provisions was entitled to costs. The board
observed that Part 6 of the Expropriation Act
is entitled "Basis for Compensation" and sections
[45] and [48] that provide for the awarding of costs
to an expropriated owner are contained in Part 6.
[72] There was no claim
for costs by the respondent in the pleadings but the
procedure of this claim is unusual with the claimants
being the companies seeking to expropriate the right
of way. The claimants may have submitted that Mr. Schulte's
costs should be curtailed because of the manner in which
he had dealt with the claimants and their application
or because of a settlement offer that had been made
that was greater than the eventual award. However, I
note that this application would not have been necessary
at all if the claimant Home Oil Company Limited had
ensured that the statutory rights of way had been deposited
in the Prince George Land Title Office in 1978 or 1979.
In any event, following BC Gas Inc. v. Lansdall
I find Mr. Schulte entitled to his costs pursuant to
section 45 and the Tariff of Costs Regulation,
B.C. Reg 189/99. Despite these somewhat lengthy reasons,
this matter as presented was of less than ordinary difficulty
and accordingly costs are awarded at Scale 1. Under
section 45 these costs are to be determined by the chair
if necessary.
[73] Because of the procedures
contained in the Railway Act the claimants provided
me with two Draft Awards, one with respect to Home Oil
Company Limited for the West 1/2 of 19 and South 1/2
of 30 and the other with respect to Anderson Exploration
Ltd. now known as Devon Canada Corporation for Parcel
A of North 1/2 of 30. Each of these awards consists
of a statement of the compensation awarded by the board
to the respondent, Mr. Schulte, a Statutory Right of
Way and a Land Title Act Form C. While these
documents have been included as part of the reasons
that are provided to the parties I have not attached
them to the reasons released to the public because they
are lengthy and of marginal relevance.
THEREFORE IT IS ORDERED THAT
- The claimant Home Oil Company Limited. shall pay
the respondent, Franz Schulte compensation in the
amount of $3,199 for the statutory right of way over
the West 1/2 of Section 19, Township 84, Range 21,
West of the 6th Meridian, Peace River District (P.I.D.014-791-684)
and the South 1/2 of Section 30, Township 84, Range
21, West of the 6th Meridian, Peace River District
(P.I.D.014-791-722) as set out on the Plan showing
Gas Pipe Line Right-of-Way deposited in the Land Title
Office in Prince George, British Columbia on September
14, 1981 under No. 27616 pursuant to section 16 of
the Pipeline Act and section 53 of the Railway
Act.
- The claimant Anderson Exploration Ltd. now known
as Devon Canada Corporation shall pay the respondent
Franz Schulte compensation in the amount of $1,240
for the statutory right of way over Parcel A (P18403)
of the North 1/2 of Section 30, Township 84, Range
21, West of the 6th Meridian, Peace River District
(P.I.D.014-729-679) as shown on Explanatory Plan of
Statutory Right of Way deposited in the Land Title
Office in Prince George, British Columbia on September
29, 2000 under No. PGP 45976 pursuant to section 16
of the Pipeline Act and section 53 of the Railway
Act.
- The claimants Home Oil Company Limited and Anderson
Exploration Ltd. now known as Devon Canada Corporation
shall pay the respondent Franz Schulte his reasonable
costs pursuant to section 45 of the Expropriation
Act and the Tariff of Costs Regulation, B.C. Reg
189/99 at Scale 1.
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