February 6, 2002, E.C.B. No. 31/98/217

REASONS FOR DECISION

1.  INTRODUCTION

[1] The claimants, Nicholas Neve Rawcliffe and Barbara Irene Rawcliffe, are the registered owners in fee simple of four contiguous parcels of land (the "lots") located at 11540 Currie Drive, Surrey, British Columbia, legally described as follows on New Westminster District Plan 2546:

PID 002 - 249 - 243, Lot 1, Block 40

PID 002 - 169 - 720, Lot 2, Block 40

PID 002 - 170 - 299, Lot 3, Block 40

PID 002 - 170 - 337, Lot 4, Block 40.

[2] The claimants' principal residence is located on Lot 2 and encroaches slightly onto Lot 1.

[3] The lots are bordered by a municipal park known as Invergarry Park on the north and east, Currie Road on the west, and Wellington Drive (unopened) on the south. The eastern or rear property line of the lots corresponds to a ravine which slopes sharply downward to an open watercourse known as Bon Accord Creek (the "Creek"). The Creek harbours resident trout and anadromous salmon populations and has been labelled as "fish habitat" under section 34(1) of the Fisheries Act, R.S., c. F - 14.

[4] The claimants assert a claim for compensation before the board for what they allege is a de facto expropriation by the respondent, the provincial Ministry of Environment, Lands and Parks, of an "approximate 15.0 metre horizontal setback (no touch zone) along the entire easterly portion of the Lands which represents approximately 1,034.25 m² or approximately 50% of the subject site."

[5] In their application for determination of compensation, dated August 28, 1998 (the "Form A"), the claimants allege that the authority for creating such so-called "leave strips" or "no touch zones" is the publication entitled "Land Development Guidelines for the Protection of Aquatic Habitat" (the "Guidelines") jointly issued by the federal Department of Fisheries and Oceans Canada ("the DFO") and the respondent.

[6] The claimants assert that the 15 metre leave strip deprives them of any use or enjoyment of the land within the leave strip and seriously impedes development on, and may render undevelopable, the remainder of the lots. The land within the leave strip has been effectively expropriated, the claimants say, leaving them with none of the attributes of ownership. The Form A claims the market value of the land within the leave strip, injurious affection with respect to the remainder of the lots, disturbance damages and costs.

[7] In its reply to the claimants' application, dated October 26, 1998 (the "Form B"), the respondent pleads that it did not expropriate any part of the lots and that the claimants are not entitled to compensation from the respondent. The respondent denies that the claimants have been left with "none of the attributes of ownership", and says they have not suffered any loss, or alternatively, they have failed to mitigate that loss. In any case, the Form B alleges that any loss to the claimants does not arise from the actions of the respondent. The respondent expressly pleads and relies upon section 35 of the federal Fisheries Act.

[8] By order of the board dated April 6, 1999, the question of whether there was a de facto expropriation by the respondent of all or parts of the lots was to be determined before any other questions of fact or law.

[9] The hearing on this threshold question took place in Victoria beginning on September 11, 2000. It continued for a total of eight days, during which nine witnesses testified and counsel made final submissions, concluding on October 19, 2000.

[10] Although at the outset of the hearing the claimants asserted that the publication of the Guidelines in 1992 was the "expropriating event", they modified their position during closing submissions. Claimants' counsel now argued that, in light of the way in which the evidence had unfolded during the hearing, the expropriating event should be considered to be the enactment of section 35 of the Fisheries Act in or about 1986. Notwithstanding that this is a federal statute, the claimants take the position that the respondent was in "partnership" with the federal Crown in imposing restrictions on the use of the lots, and must bear liability for all losses incurred through the expropriation of those portions of the lots affected by the leave strip. The claimants suggest that the respondent can, in turn, separately make its own case for contribution from the federal Crown in some other forum.

[11] In order for the board to have complete information with respect to the legislative history of section 35 of the Fisheries Act, which both parties ultimately relied on to advance their respective cases, respondent's counsel offered to provide supplementary written submissions addressing both the federal power and the specific legislative provision. Those submissions were received by the board on December 13, 2000.

2.   BACKGROUND

[12] The claimants were entered on title as joint owners in fee simple of the lots on March 24, 1997. They moved into the residence in early April of that year. There were no legal notations against title and the only registered charge was a mortgage. The claimants describe the four parcels as "legal lots of record", that is to say, although the lots are smaller than the minimum parcel size now required under the bylaws of the City of Surrey ("Surrey"), they were created long before the imposition of such requirements and are not subject to them. The Surrey Official Community Plan designates the land use of the four lots as "Urban", while the current zoning is "R.A. (One-Acre Residential)". Development of the lots for single family residential use requires the issuance of building permits. However, because it comprises legal lots of record, the site does not require rezoning or subdivision.

[13] Although the claimants have made use of the dwelling located principally on Lot 2 as their principal residence, the evidence supports their assertion that they purchased the four lots primarily for future development. Prior to purchase, they made initial inquiries about servicing. Several months after acquiring the lots, they obtained a detailed estimate of development costs. They also made inquiries directed to obtaining building permits. Mr. Rawcliffe, who holds qualifications as a real estate appraiser and is employed by Surrey as a property negotiator, testified that he did not make any inquiries either of the respondent or the DFO prior to the purchase of the lots. However, at least by late 1997 he was alerted to the possible impact of the Guidelines on the claimants' plans for development. He retained an environmental consultant, Ian W. Whyte, who was instructed to review with an appropriate representative of the respondent a proposal by the claimants for development of the lots which recognized a 2 metre rather than 15 metre setback from top of bank.

[14] When the respondent's representative indicated to Mr. Whyte that this development proposal was unacceptable, the claimants nevertheless proceeded to seek an "approval letter" from the respondent supporting the issuance of building permits. On February 25, 1998, Mr. Rawcliffe wrote to the respondent in this connection. The letter stated inter alia: 

"It is my understanding that at the building permit stage when a site is adjacent or in close proximity to a creek, the City of Surrey refers the building permit application to the Ministry of Environment, Lands and Parks/BC Environment for comments.

* * * 

While I understand that it is common practice for MoELP to request a 15 metre setback for single family residential development at the rezoning or subdivision stage, and that the local government generally enforces such a request, such is not generally the case for building permits where there are existing lots of record. The subject site comprises four (4) individually titled legal lots of record, which were subdivided more that 80 years ago. The reason that three of the four (4) lots were never built upon was because of a sanitary sewer servicing problem which has recently been resolved. Consequently, the site does not require rezoning or subdivision. Of relevance is the fact that the proposed fenceline, while only 2 metres from the top-of-ravine, would average over 30 metres from the edge of Bonaccord Creek. 

The Land Development Guidelines nor any other Act, right or policy in law apply to lots of record. Therefore, I trust you will remit an approval letter based on my attached proposal in a timely manner in order not to further cause my wife and I undue hardship. Please keep in mind that we are pro-actively volunteering no-touch and no-build zones in order to preserve the beauty of the embankment, and that we are not professional developers with deep pockets (the site is our principal residence)."

[15] Brian J. Clark, the regional director of fish, wildlife and habitat protection for the respondent, replied in a letter dated May 12, 1998, which stated, inter alia: 

"The mandate of the Ministry of Environment, Lands and Parks is to protect, conserve and enhance the integrity of the province's natural ecosystems. The watercourse bordering the above noted lots, Bon Accord Creek, is an urban stream that harbours populations of both resident trout and anadromous salmon, and as such must have its surrounding (riparian) corridor preserved and protected from disturbance.

Your contention that "no Act, right or policy in law" applies to lots of record is incorrect. The federal Fisheries Act applies to all fish habitat, including the surrounding riparian area, and provides for the protection of these areas. 

The schedule you submitted indicating the no-touch zone at the rear of the properties, along with the building envelopes and yard setbacks, is unacceptable, since a 2 meter leave strip from top of bank is inadequate to protect the fisheries values of Bon Accord Creek. 

I suggest that you look at other options to maximize the developable area of these lots, specifically, reductions in front and rear lot setbacks, as well as reductions in the size of the building envelopes. 

I appreciate your wish to preserve the attractive appearance of the embankment area, and that you wish to develop your property in an economical manner. In this regard, some variance in the required 15 meter setback will be considered by the ministry, but only after other avenues have been pursued."

[16] This exchange of correspondence is quoted at length since it forms the basis of the claimants' contention that the imposition of a leave strip, with all of its stringent restrictions and requirements for the protection of aquatic habitat, would be an inevitable consequence of any building permit application they might make. Indeed, in the Form A the claimants claim compensation for the market value of the land within the leave strip as of May 12, 1998, which suggests that they may have viewed Mr. Clark's letter of that date as effectively constituting the date of expropriation. The claimants, in fact, have not made a formal application to Surrey for building permits for their proposed development.

[17] It is useful at this juncture to review the nature of the restrictions which are set out in various documents entered in evidence during the hearing. The first is a standard letter (the "Standard Letter") which the claimants say it is "safe to assume" that Surrey would provide in response to their building permit application. The Standard Letter draws to the attention of landowners making a development application the conditions imposed by the respondent and the DFO for fish, wildlife and habitat protection which "must be strictly adhered to". It specifically disavows authorization for the harmful alteration, disruption or destruction of fish habitat or the deposit of a deleterious substance into water frequented by fish pursuant to sections 35 and 36 of the federal Fisheries Act.

[18] The Standard Letter first makes reference to a colour coded map described as the "City of Surrey Fisheries Watercourse Classification Map", pointing out that red and yellow coded streams are considered important as fish habitat and should have riparian setbacks applied accordingly. It cautions that the map has not been fully verified by on-site surveys and may have watercourses that are inaccurately classified or are not shown on the map. The Standard Letter continues:

"Where there is a question as to the value of a watercourse as fish habitat or where there are discrepancies between the map and ground features, the landowner is encouraged to contact MELP and DFO and, will be required to acquire the services of a qualified environmental consultant to provide support for their position."

[19] Under the heading "Riparian Setbacks/Leave Strip Areas", the Standard Letter next points out that, depending on the type of land use and density, certain setbacks apply to all watercourses and wetlands which are considered to be fish habitat as defined under section 34(1) of the federal Fisheries Act. Relevant to the claimants' development proposal is the following setback provision:

"For residential developments with density of 6.0 units or less per acre gross,...a 15.0 metre riparian leave strip will be required from top of bank." For the definition of "top of bank" as well as for certain other matters, developers are referred to the Guidelines.

[20] The Standard Letter also advises developers as follows:

• The usual minimum 15.0 metre setback requirement may be increased in some circumstances.
• In addition to the riparian leave strip, a 3.0 metre root protection zone must be established outside the riparian leave strip area.
• The boundary of the leave strip must be surveyed by a registered British Columbia land surveyor.
• At the owner's expense, a permanent fence having a minimum height of 1.2 metres (4 feet) must be constructed at the riparian leave strip boundary.
• One pedestrian gate through the fence is permitted per property, provided the gate is no more than 60 cm. (24 inches) in width.
• The fence should be posted with small metal signs indicating that the fence defines the boundary of sensitive fish and wildlife habitat.

[21] The mandatory tone of the Standard Letter is reiterated near its conclusion:

"Any deviation from the conditions listed in this letter will require approval from MELP and DFO. Any deviation from the conditions without approval may constitute contravention of the Federal: Fisheries Act and Canadian Environmental Protection Act; the Provincial: Waste Management Act, Land Titles Act; Water Act; Fish Protection Act; Wildlife Act or other legislation."

[22] A second document pertaining to the restrictions around habitat protection is in the form of a restrictive covenant over the lands affected. The Standard Letter states that, unless the setback or leave strip areas are transferred to the Crown or to Surrey, a restrictive covenant pursuant to section 219 of the Land Title Act, R.S.B.C. 1996, c. 250, must be registered against title. Developers are advised that they can obtain copies of a "generic restrictive covenant" instrument (the "Restrictive Covenant") from Surrey.

[23] The claimants filed in evidence a copy of one such registered instrument in which the covenantor was a numbered company located in Surrey and the covenantee was Her Majesty the Queen in Right of the Province of British Columbia as represented by the Regional Fish & Wildlife Manager, Ministry of Environment, Lands and Parks. The recitals to the registered instrument set out that an unnamed creek runs through a portion of the covenantor's lands and the covenantor has agreed to restrictions on the use of a portion of the lands adjacent to the creek which are identified on a survey plan and described as the "covenant area". The instrument provides in part:

"1.	The Covenantor covenants and agrees with the Covenantee that:
	(a)	no building or structure, or any part thereof, including any fixed equipment, mobile home or modular home shall be constructed, reconstructed, moved, extended or located nor shall any landfill, land clearing or other disturbance take place within the Covenant Area;
	(b)	the Covenantor shall not, without prior written consent of the Covenantee, which consent to be in the Covenantee's sole discretion, cut down, trim, prune, defoliate, alter, remove or in any way tamper with or work on any trees, shrubs, plants, bushes, ground cover, vegetation or any other form of plant life within the Covenant Area, so that the said trees, shrubs, plants, bushes, ground cover, vegetation and other forms of plant life remain in a naturally vegetated state in perpetuity.
	***
	(e)	the Covenantor shall not construct dwellings within five (5) metres of the covenant boundary as boldly outlined on Schedule "A".
	(f)	the Covenantor shall, at the expense of the Covenantor, construct a permanent fence at the covenant boundary between the development area and the covenant area prior to the start of the site development. This fence must be constructed of chainlink material 1.8 meters high in height and posted with visible metal signs indicating the area is protected by Section 219 covenant, for preservation of sensitive fish and wildlife habitat. Pedestrian gate access is permitted. The fence is to be maintained by the Covenantor."

[24] More detailed reference should also be made at this point to the Guidelines, jointly published by the respondent and the DFO. The Guidelines are a glossy 128 page publication setting out the purpose and scope of the document and, in the words of claimants' counsel, "the reach and control being exercised over private property." Respondent's counsel describes them as "primarily an educational tool for developers and land owners." Relevant portions from the introductory section of the Guidelines read:

"Purpose and Scope
The purpose of these guidelines is to protect fish populations and their habitat from the damaging effects of land development activities. The information contained in these guidelines pertains to the preservation of Pacific salmon populations, a federally- managed resource (DFO), and steelhead, trout, char and other freshwater species, which are managed by the provincial Ministry of Environment, Lands and Parks (MOELP).

* * *

Although the federal and provincial agencies work in close association, it is important that both be contacted whenever a problem arises regarding fisheries resources that cannot be resolved through reference to the land development guidelines. In some instances and locations, it may be necessary for personnel of the federal and provincial habitat management agencies to modify recommendations presented in these guidelines to reflect site specific conditions and in order to protect salmonid habitat.

Fish Habitat, Land Development and Fisheries Sensitive Zones
DFO is responsible, under the Fisheries Act (R.S.C., 1985, c. F- 14), to protect fish and fish habitat in "waters frequented by fish" (Appendix 1 provides a brief regulatory synopsis for land development purposes). This includes protection from any work in or near these waters. The provincial government (MOELP) is responsible for management of steelhead, trout, char and other non-salmonid freshwater species under the Fisheries Act.

* * *

All developments in or adjacent to waters containing fish or fish habitat, whether marine or freshwater, require the approval of DFO and MOELP. In order to better define the requirements for protection of aquatic habitat, Fisheries Sensitive Zones (FSZ) were developed. They are defined as the instream aquatic habitats, as well as the out-of-stream habitat features such as side channels, wetlands and riparian areas. Land developments have the potential to seriously degrade and destroy fish habitat and impact fish populations. Accordingly, DFO and MOELP carefully control work in and around the Fisheries Sensitive Zone.

Land Development Guideline Objectives
The primary goal of these guidelines is to ensure that the quantity and quality of fish habitat are preserved and maintained at the productive level that existed prior to land development activities. The Fisheries Act provides the legislative basis for DFO's Policy for the Management of Fish Habitat (DFO 1986) and the principle of no net loss of the productive capacity (i.e. the maximum natural capacity) of fish habitat. Each land development project, therefore, is subject to the following guideline objective

• Provision and protection of leave strips adjacent to watercourses.

* * *

Land development projects are referred by individuals, companies and other agencies to both DFO and MOELP....Generally, the potential impacts on fish and fish habitat will be determined by DFO and MOELP staff based on habitat function, productivity, uniqueness and sensitivity....If a potential impact exists, alternate siting, mitigation or compensation options are examined to determined if no net loss can be achieved. If no net loss can be achieved, the project will be approved under the Fisheries Act...If impacts are unacceptable and alternative siting, mitigation or compensation are not possible, or the required information has not been provided, the project will not be approved.

* * *

Regulation of Land Development -- Other Jurisdictions
While satisfying the requirements of the Fisheries Act is one step in the approval process, there are a number of other possible requirements. Other federal, provincial, municipal or local acts or by-laws may require applications, approvals and permits. These guidelines do not take precedence over statutory and other requirements imposed by other agencies. Approval by DFO in no way constitutes regional or local authority approval of the development of the project. On the other hand, no approval given or implicit, by any regional or local authority, relieves the proponent of responsibilities for the protection of the aquatic habitat as required by federal and provincial statutes. Where fish habitat is damaged or lost, the powers of the Fisheries Act through the court system, may be used to order the proponent to restore or compensate for that habitat and pay the associated expenses. Where other limits or conditions are specified by acts or by-laws, the more stringent or limiting requirement shall take precedence."

[25] Section 2 of the Guidelines describes in greater detail the objectives of leave strips and indicates how their boundaries and widths are to be determined. The following passage also indicates the manner in which leave strips are to be permanently protected:

"Permanent Protection of Leave Strips
The leave strip should be permanently protected under one of the following methods: dedication as park, by return of the land to the Crown in the name of the local government, re-zoned as a protected area or reserve status, or secured with restrictive covenants. The development of trails for public access and use may be considered, however they should not be designed or constructed so that they adversely affect the stream's aquatic habitat and should be included in the overall development plans for DFO/MOELP review."

3.  THE ISSUES

[26] The board considers that there are two principal issues for determination in this matter:

(1)

Does the board have jurisdiction to hear a claim for compensation arising from an alleged de facto expropriation by the respondent of part of the claimants' lots under the authority of the federal Fisheries Act?

(2)

If the board does have jurisdiction in this matter, then has there been a de facto expropriation by the respondent of part of the claimants' lots? Subsumed within this issue are questions as to whether the claim is premature and hypothetical, whether the necessary elements of de facto expropriation are present, and, if there has been a de facto taking, whether the respondent is liable to compensate.

4.   DOES THE BOARD HAVE JURISDICTION?

4.1  The Positions of the Parties

[27] The jurisdictional issue is one which the board has raised largely on its own motion. Neither party addressed the applicable provisions of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act") which confer upon the board the jurisdiction to hear and determine compensation claims.

[28] Curiously, the respondent did not directly challenge the board's jurisdictional authority in this matter other than to observe by way of conclusion that, since in the respondent's submission the impugned actions do not amount to an expropriation, the board has no jurisdiction to award costs to the claimants.

[29] The claimants, while acknowledging that they might alternatively have commenced an action against the DFO in the Federal Court of Canada, premised their decision to bring their claim against the respondent to the board on the assertion that a "partnership" exists between the federal and provincial levels of government.

[30] In his opening submissions, claimants' counsel, with emphasis upon the role and effect of the Guidelines as the expropriating event, put the matter this way:

"It would have been preferable to have joined the federal Crown as a party in this proceeding, but structurally that is not possible. This board has exclusive jurisdiction in expropriation in British Columbia, and the Federal Court of Canada has exclusive jurisdiction in takings by the federal Crown. The law allows an injured party to claim against one or both parties causing injury. In this case the Guidelines are published and enforced by both the Department of Fisheries and Ocean[s] and the Ministry of the Environment Lands and Parks. The Claimants had to choose proceedings in one forum or another and elected to bring [their] claim before this board. In neither forum could both parties be joined."

[31] In closing submissions, the claimants continued to dwell on the Guidelines but now asserted that the expropriating event itself was the enactment of section 35 of the Fisheries Act. They argued that, if the DFO enforced its own statutory enactment, this claim for compensation would clearly come under the jurisdiction of the Federal Court of Canada. The submissions then continued:

"That is not the situation, however. DFO for Canada and MELP for the province, have joined hands in a partnership to administer and to enforce very stringent provisions denigrating the rights of all property owners whose lands happen to encompass waters, or lie in close proximity to, waters 'frequented by fish'.

* * *

As the provincial government (MELP) is in partnership with the Government of Canada through DFO, it must bear equal liability for the expropriation of the Claimants' land. It is liable in law and must pay compensation."

[32] Presumably, in the claimants' view, the board's jurisdiction in this instance arises out of a legal theory of joint and several liability, or perhaps several liability, whereby the claimants may commence proceedings in the appropriate forum against whichever of the two senior levels of government they choose to pursue without joining the other. The DFO has not been joined as a respondent in the proceedings before the board and, it appears, could not be.

4.2  Analysis and Conclusion

[33] The board is, of course, a creature of statute, and it must be satisfied in the first instance that the Act authorizes the determinations which the parties seek. The parties cannot confer jurisdiction on the board where no statutory jurisdiction exists.

[34] Section 26(1) of the Act is the main jurisdictional provision governing the scope of the board's authority. Relevant to the initial issue which the board must decide in this instance is para. (b), requiring the board to determine compensation to be paid, inter alia, under sections 30 and 40, and para. (c), requiring the board to determine "compensation to be paid, or any other matter to be determined, if jurisdiction is given to it under any enactment". Section 30(1) provides that every owner of land that is expropriated is entitled to compensation, to be determined in accordance with the Act, while section 40 provides for compensation to owners whose lands have been partially taken.

[35] In the present instance none of the formalities of expropriation under the Act, such as the service of an expropriation notice and an approval of expropriation, the making of an advance payment, or the vesting of title in an expropriating authority, has occurred. Rather, the claimants' allegation is one of de facto expropriation. The concept of de facto expropriation is now well established in law. It is also recognized that the board has jurisdiction to determine claims arising out of a de facto expropriation. However, the de facto expropriation must be one which has taken place under provincial authority. This is apparent from the definition of expropriation in the Act when considered in conjunction with the applicable definitions in the Interpretation Act, R.S.B.C. 1996, c. 238.

[36] Section 1 of the Act defines an expropriation in the following terms:

"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. (emphasis added)

[37] Section 1 of the Interpretation Act contains the following relevant definitions:

"enactment" means an Act or a regulation or a portion of an Act or a regulation;
"Act" means an Act of the Legislature, whether referred to as a statute, code or by any other name....;
"regulation" means a regulation, order, rule, form, tariff of costs or fees, proclamation, letters patent, commission, warrant, bylaw or other instrument enacted
a)	in execution of a power conferred under an Act, or
b)	by or under the authority of the Lieutenant Governor in Council...;

Additionally, in section 27 of the Interpretation Act the following expressions are defined:

"Legislature" means the Lieutenant Governor acting by and with the consent of the Legislative Assembly;

"Legislative Assembly" means the Legislative Assembly of British Columbia constituted under the Constitution Act;

[38] The jurisdictional difficulty facing the claimants in their attempt to have their claims determined by the board is their exclusive reliance during final submissions on section 35 of the federal Fisheries Act. Section 35, they say, provides the statutory authority for the Guidelines under which which a leave strip or no touch zone would be imposed on their lots. The enactment of that section, they contend, constitutes the "expropriating event".

[39] Section 35 of the Fisheries Act states:

Harmful alteration, etc., of fish habitat
35.	(1)	No person shall carry on any work or undertaking that results in the harmful alteration disruption or destruction of fish habitat.
Alteration, etc., authorized
	(2)	No person contravenes subsection (1) by causing alteration, disruption or destruction of fish habit by any means or under any conditions authorized by the Minister or under regulations made by the Governor in Council under this Act.

[40] Although the claimants' focus is on section 35, certain portions of section 36 contain clearly related provisions:

Deposit of deleterious substances prohibited
36.	(3)	Subject to subsection (4), no person shall deposit or permit the deposit of a deleterious substance of any type in water frequented by fish or in any place under any conditions where the deleterious substance or any other deleterious substance that results from the deposit of the deleterious substance may enter any such water.
	(4)	No person contravenes subsection (3) by depositing or permitting the deposit in any water or place of
		(a)	waste or pollutant of a type, in a quantity and under conditions authorized by regulations applicable to that water or place made by the Governor in Council under any Act other than this Act; or
		(b)	a deleterious substance of a class, in a quantity or concentration and under conditions authorized by or pursuant to regulations applicable to that water or place or to any work or undertaking or class thereof, made by the Governor in Council under subsection (5).

[41] It is apparent that the federal Fisheries Act does not fall within the definition of an "enactment" since it is not an "Act" of the provincial Legislature. Neither do the Guidelines satisfy the definition of an "enactment". Indeed, it was common ground between the parties, consistent with the evidence on point, that the Guidelines have never been enacted as a regulation and do not have the force of law. Absent an "enactment" as referred to in the Act and as defined in the Interpretation Act, an essential element of expropriation is lacking to vest the board with jurisdiction to hear the claim.

[42] To found a claim against the respondent before the board for de facto expropriation, it would be necessary at the least to show some statutory or regulatory linkage between section 35 of the Fisheries Act and a provincial enactment under which the respondent has allegedly acted.

[43] In this regard the board has considered whether any of the provisions of the Water Act, R.S.B.C. 1996, c. 483, or the Water Regulation, B.C. Reg. 204/88, might suffice for this purpose. It was, after all, the claimants' position at the outset of the hearing that enactment of relevant sections of the federal Fisheries Act and the provincial Water Act, together with the publication of the Guidelines, "have removed from the owner's control a very significant portion of the owner's property." The claimants made only passing reference to the Water Act in closing submissions. They did not refer at all to the Water Regulation. Both the claimants and the respondent included copies of the Water Act in their books of authorities, but only the respondent also included a copy of the Water Regulation. The thrust of the respondent's submission in this regard, however, was that neither the Fisheries Act nor the Water Act authorized the expropriation of land for purposes of fish habitat.

[44] Section 9 of the Water Act concerns "changes in and about a stream" and authorizes the comptroller of water rights, a regional water manager or an engineer to grant approval authorizing, on the conditions he or she considers advisable, a person to make such changes. The term "changes in and about a stream" is defined to mean: (a) any modification to the nature of a stream including the land, vegetation, natural environment or flow of water within a stream, or (b) any activity or construction within the stream channel that has or may have an impact on a stream. The stream channel is defined to mean both the bed and the banks of a stream.

[45] While section 9 of the Water Act on its face would appear to have a rather tenuous connnection to the protection of fish habitat, Part 7 (sections 36 through 44) of the Water Regulation headed "Changes in and about a stream" is considerably more specific. Section 36 of the Water Regulation includes the following definitions:

"habitat" means the areas in and about a stream including
(a)	the quantity and quality of water on which fish or wildlife depend directly or indirectly in order to carry out their life processes, and
(b)	spawning grounds and the nursery, rearing, food supply and migration areas.
"habitat officer" means a public service employee designated in writing by the regional director for the regional office of the Ministry of Environment, Lands and Parks where the public service employee is employed.

[46] It is worthy of note that the definition of "habitat" under the Water Regulation, while encompassing wildlife as well as fish, is otherwise identical to the definition of "fish habitat" under section 34(1) of the federal Fisheries Act. In the federal statute "fish habitat" is defined to mean "spawning grounds and nursery, rearing, food supply and migration areas on which fish depend directly or indirectly in order to carry out their life processes."

[47] Section 40(1) of the Water Regulation is a notification provision and states as follows:

40	(1)	A person must not make a change in and about a stream unless that person
		(a)	notifies a habitat officer of the region of the Ministry of Environment, Lands and Parks in which the change in and about a stream will be located, by providing the information specified in the notification form available from the ministry, of the particulars of the proposed change at least 45 days prior to commencing to make the change, and
		(b)	obtains from a habitat officer the terms and conditions described in section 42 on which the change can proceed prior to commencing to make the change.

[48] Section 42 of the Water Regulation is headed "Protection of habitat", and requires a person making a change in and about a stream to make the change in accordance with terms and conditions specified by the habitat officer with respect to a number of matters. It is clear that one important object is the protection of fish and wildlife. It is also notable that the habitat officer can specify terms and conditions with respect to "(f) the protection of natural materials and vegetation that contribute to habitat or stream channel stability" and "(h) the requirement to obtain an approval from the federal Department of Fisheries and Oceans in connection with the change."

[49] It appears to the board that the matters addressed in section 42 relate primarily to direct changes being proposed to the stream itself, for example, reducing the flow of water in the stream, removing material from the stream, or adding debris or material to it. There is nothing to suggest that the terms and conditions extend so as to authorize habitat officers to impose leave strips or no touch zones on lands adjacent to such streams.

[50] In light of the foregoing discussion, the question of jurisdiction is not entirely free from doubt. However, the board is left to conclude from the claimants' submissions and, in particular, their ultimate reliance solely upon section 35 of the federal Fisheries Act, that their application before the board must fail. Even if the claimants were able to prove that there has been a de facto taking without their consent, the application must fail because they have not shown that the impugned action is taken "under an enactment", as defined, which would vest the board with jurisdiction to hear and determine their claim.

[51] In case the board is incorrect in its initial conclusion, and it does have jurisdiction in this matter, the board will proceed to consider the second issue of whether there has been a de facto expropriation by the respondent of part of the claimants' lots. It is, of course, to this second issue that most of the evidence at the hearing was directed.

5.  HAS THERE BEEN A de facto EXPROPRIATION?

5.1  The Claimants' Position

[52] The claimants assert that, while they have not made formal application to Surrey for building permits to develop the lots, it is clear from the evidence that a leave strip or no touch zone would be imposed were they to do so. The restrictions that apply to the potential leave strip are so severe, they submit, that they remove all reasonable private uses to which that portion of the lots might otherwise be put, and amount to a "taking" of the land within the leave strip.

[53] While the Guidelines define the objective for establishing leave strips, set out the required widths, and indicate the methods by which they are to be permanently protected, the publication of the Guidelines themselves, the claimants say, does not constitute the expropriating event. Neither is the filing of a Restrictive Covenant the event which triggers an expropriation. Rather, in the claimants' submission, the expropriating event is the enactment of section 35 of the Fisheries Act. The Fisheries Act effectively, if not prima facie, confiscates all reasonable private uses of land within a fisheries sensitive zone. Since according to the claimants the enactment of the provisions in section 35 amounts to a de facto expropriation, the precise area affected and the precise restrictions within that area need not be identified at this stage of the proceeding as they go only to the issue of compensation to be dealt with later at the compensation hearing. The fact that variances or relaxations might be obtained does not, they say, alter the confiscatory nature of the leave strips to the extent they are imposed.

[54] Central to the claimants' assertion that the respondent can be held liable for a de facto expropriation under the authority of the federal Fisheries Act is their theory that the respondent has joined hands with the DFO in a partnership to administer and enforce the very stringent provisions imposed on the rights of owners whose lands encompass fisheries sensitive zones.

[55] Notwithstanding the Standard Letter which they say Surrey would have provided to them, the claimants seek to distinguish the role of Surrey from that of the respondent in applying restrictions with respect to leave strips. Surrey, they submit, simply acts as an "agent" to the DFO and the respondent in enforcing the Guidelines pursuant to the Fisheries Act by granting or withholding building permits.

[56] In support of their claim based on de facto expropriation, the claimants refer to the principle enunciated by Lord Atkinson in the House of Lords' decision in Attorney General v. De Keyser's Royal Hotel, [1920] A.C. 508, at p. 542: "Unless the words of the statute clearly so demand, a statue is not to be construed so as to take away the property of a subject without compensation." Claimants' counsel evocatively described this principle as the one star that shines brightly in the great firmament of the law. Although the claimants acknowledge that in British Columbia there is a statute which clearly takes away property rights without compensation, namely the Local Government Act, R.S.B.C. 1996, c. 323 (formerly the Municipal Act), in respect of official community plans, municipal zoning or rural land use bylaws, they go on to say that no such statutory protection against the liability to compensate is afforded to the respondent.

[57] The claimants also submit that the fact they retain title to the lots is not fatal to their claim. The reality is, they say, that as a result of the restrictions applying within leave strips, all reasonable uses are extinguished. The claimants point to British Columbia v. Tener [1985], S.C.R. 533, 3 W.W.R. 673, 17 D.L.R. (4th ) 1, in which the Supreme Court of Canada concluded that, when the Crown refused to grant a permit for mineral exploration to the owner of Crown-granted mineral claims within a provincial park, the refusal amounted to an expropriation. The claimants also rely on the British Columbia Court of Appeal decision in Casamiro Resource Corp. v. British Columbia (Attorney General) (1991), 45 L.C.R. 161, 55 B.C.L.R.(2d) 346, 80 D.L.R. (4th) 1, a case involving denial of resource use permits for mineral exploration in a provincial park. In both such cases the owners retained title to the subsurface mineral claims after the government refusals, but those Crown grants had been reduced, in the words of Southin J.A. in Casamiro, to "meaningless pieces of paper".

[58] As in Tener and Casamiro, the formalities of expropriation have not been observed in the present case. Nevertheless, the claimants submit that all of the elements necessary to found an expropriation are present: there has been a "taking" in that government action has deprived them of virtually all use and enjoyment of the potential leave strip; the taking is under an enactment; and it is without their consent. The claimants acknowledge that the expropriation in this matter is a partial taking. The actual area of the leave strip or no touch zone is necessarily indeterminate at the present time. However, the claimants say, it is less than that of the entire lots and more than that encompassed within the two metre setback proposed by the claimants and rejected by Mr. Clark in his letter of May 12, 1998.

[59] The claimants called three expert witnesses, each of whom had produced a report, to establish their case. Oleg Verbenkov, principal of Planet Consulting Group Inc., was qualified as an expert to give testimony regarding planning matters in the City of Surrey and the effect of the Guidelines on planning and development. Ian W. Whyte, a principal with ECL Environwest Consultants Ltd., was accepted as an expert qualified to give opinions relating to land development impact on watercourses and fish habitats and habitat enhancement compensation. Slade E. Dyer, of Slade Dyer and Associates, was qualified as an expert in land use controls applicable to the subject property under the Local Government Act.

5.2  The Respondent's Position

[60] The respondent submits that the claimants' assertion of de facto expropriation must fail for three principal reasons. First, the claim is both premature and hypothetical. Second, it does not in any case satisfy the necessary requirements in law for finding a de facto expropriation. Third, the respondent's role in the process which the claimants assert amounts to de facto expropriation is not such as to make the respondent liable to compensate them.

[61] The respondent cites several factors in support of its submission that the claim is premature and hypothetical. It points out that the claimants have made no application to Surrey for the issuance of building permits. The respondent submits that, in the absence of such an application, it is impossible to ascertain all of the requirements that would be imposed at that stage.

[62] With respect to municipal concerns around habitat protection, the respondent says it is entirely speculative to suggest that the building permits would be refused or that the permit process would necessarily trigger the issuance of the Standard Letter or lead to referrals to both the DFO and the respondent resulting in the imposition of a leave strip or no touch zone on their lots pursuant to the Guidelines. Even if such were to be the result, the respondent says, the claimants have not, as Mr. Clark in his letter suggested they do, applied to Surrey for variances from zoning bylaw requirements or made any reasonable inquiries with respect to the process for granting variances from front and rear yard setback requirements.

[63] Neither have the claimants explored with Surrey the topographical limitations and, in particular, the geotechnical concerns around bank stability which, the respondent says, arise from the proximity of the lots to the Creek and the associated significant grade of the land toward the Creek. Indeed, the respondent argues, Surrey's own regulations may restrict or prohibit the claimants from developing the lots in other as yet undefined ways.

[64] As to what sort of restrictions on development of the lots the DFO and the respondent might require pursuant to the Guidelines, the respondent submits that the application of the Guidelines is determined on a case by case basis. The important point is that the opportunity exists for negotiating relaxations from these restrictions. Many considerations come into play, including the size and nature of the development, the landowner's flexibility in configuring the lots and the building envelopes and in locating services, and the landowner's willingness to perform compensatory works to ensure that any relaxation of the leave strips will result in no net loss to fish habitat.

[65] In the present instance, the respondent says, the claimants have not explored alternative building scenarios that would accommodate the imposition of a leave strip under the Guidelines, have not formally applied to the DFO and the respondent for possible relaxations of the leave strip, and have not made any habitat compensation proposal in exchange for any such relaxation. Accordingly, the respondent argues, in the absence of any decision from the DFO -- the government ministry which it says has the ultimate decision-making authority -- any consideration of the application of the Guidelines and the imposition of a leave strip to the lots is necessarily hypothetical.

[66] The respondent in its Form B reply alleged in relation to the foregoing that the claimants have failed to "mitigate" any loss they might have incurred. However, respondent's counsel in final submissions argued the matter in terms of the claimants' not having "perfected" the application process, so that there has not yet been any official "disapproval" or "refusal" of their plans, either by Surrey or by the DFO and the respondent.

[67] With respect to the second reason for saying the claimants' application must fail, the respondent submits that de facto expropriation requires both the taking of all reasonable private interests in the land and a corresponding benefit to the taker. For that proposition, the respondent relies in the first instance upon the decision of the Supreme Court of Canada in Tener. It also refers to the more recent decision of the Nova Scotia Court of Appeal in Mariner Real Estate Ltd. v. Nova Scotia (Attorney General) (1999), 68 L.C.R. 1, the findings of which, the respondent says, bear close scrutiny as the facts closely resemble those being considered by the board.

[68] According to the respondent, neither of the elements of de facto expropriation is found in the present instance. Neither the federal Fisheries Act nor the provincial Water Act authorizes an expropriation of land for the purposes of protecting fish habitat. To the extent that the Guidelines produced jointly by the federal and provincial levels of government with reference to the foregoing statutes impose enforceable restrictions on private property in fisheries sensitive zones, they are merely "regulatory" in nature and are open to relaxation. For regulation to amount to a de facto taking, the respondent says, it must be so severe as to eliminate completely the rights of ownership.

[69] The respondent submits that the potential leave strip does not eliminate the claimants' private rights to the use of the lots. With adequate relaxations and variances, it may still be possible for the claimants to develop their lots for single family residential use. Even if they cannot, the respondent argues, the claimants will still enjoy other private uses of the lots, including those portions which are within the leave strip. As such, there has been no regulation severe enough to amount to a taking.

[70] Not only has there been no complete denial of the rights of ownership, the respondent says, but there has also been no corresponding benefit conferred on the respondent. With reference to the principal ways in which land within a leave strip may be protected under the Guidelines, the respondent says that any benefits would flow to Surrey if the land were dedicated as park or returned to the Crown in the name of the local government. Even if the land were instead protected by a Restrictive Covenant, the benefits would be shared by the respondent and the DFO, but such an arrangement would be insufficient to constitute an acquisition of a benefit by the respondent.

[71] The respondent's third reason for saying the claimants' claim must fail relates to the role played by the various levels of government in the approval process for developments proposed in fisheries sensitive zones. The respondent contends that, while the three levels of government (Surrey, the respondent and the DFO) work closely and co-operatively together in considering applications for the relaxation of leave strip requirements under the Guidelines, the final decision with respect to such relaxations rests with the DFO. Even assuming that the imposition of leave strips amount to a de facto expropriation of the land affected, the respondent's subordinate role in the process, it says, does not in any event make it liable to the claimants for a claim for compensation.

[72] The respondent called five witnesses to establish its case. Jay Wollenberg, of Coriolis Consulting Corp., was qualified as an expert in land use planning and on the effect of the Guidelines to testify concerning a report he had prepared. The other witnesses were Bruce J. Reid, who heads land use within the habitat and enhancement branch of the DFO; John K. McKenzie, a manager employed by Surrey whose responsibilities include the issuance of building permits for properties zoned for single family residential use; Tim J. Arlt, project supervisor of engineering planning within the engineering department of Surrey; and Brian J. Clark, who as earlier described is the regional manager for fish, wildlife and habitat protection in the respondent's regional office located in Surrey. Additionally, over the objection of claimants' counsel, the respondent summoned the claimant, Nicholas N. Rawcliffe, to testify.

5.3  Analysis and Conclusions

[73] The board considers that discussion of the evidence and the law concerning the respondent's alleged de facto expropriation of part of the claimants' lots is most usefully approached by analyzing each of the three sub-issues raised by the respondent. That is to say, is the claimants' claim premature and hypothetical, does the claim satisfy the necessary requirements in law for finding a de facto expropriation, and assuming that it does, is the respondent's role in the process such as to make the respondent liable to compensate the claimants? These questions will be addressed in turn.

5.3.1  Is the Claim Premature and Hypothetical?

[74] The initial difficulty with the claimants' claim of de facto expropriation lies in the fact that none of the processes which might provide the evidentiary foundation for such a claim has yet been formally engaged. This comment applies with equal force to the processes involving Surrey and those involving the respondent and the DFO, which will be considered in turn.

[75] The claimants acknowledge that they have not applied to Surrey for building permits to develop the lots for single family residential use and, accordingly, there has been no refusal of such an application. Their assertion that to do so would automatically trigger the issuance of the Standard Letter and in that way lead to the imposition of a leave strip or no touch zone under the authority of the Guidelines is at variance with the evidence.

[76] Mr. McKenzie, the Surrey official whom the claimants would have to approach for building permits, gave evidence to the effect that the Standard Letter may not apply at all to the lots. The lots are legal lots of record, and as such do not require subdivision approval and rezoning. Mr. McKenzie testified that the Standard Letter was only sent out to developers making application for subdivision or rezoning. Surrey did not consider building permit applications to be "land development" even when no previous construction had occurred on the land in question. The building permit application process, he said, did not include reference to other agencies or government departments, and Surrey did not require fences or barriers along environmentally sensitive areas as a condition of issuing building permits.

[77] It seems from the evidence unlikely that a Standard Letter would have been provided in the present instance. That being so, it is unclear to the board how, if the claimants had not written to the respondent seeking an approval letter, the involvement of the respondent and the DFO would have been triggered and the Guidelines would have been brought into play. In any event, the claimants did write to the respondent for an approval letter, and Mr. Clark's letter response of May 12, 1998, leaves little doubt that the Guidelines would be applied.

[78] Nevertheless, the claimants have not followed up on Mr. Clark's advice to explore the option of applying to Surrey for variances from zoning bylaw requirements with respect to front and rear yard setbacks or reductions in the size of proposed building envelopes before formally applying to the respondent or the DFO for relaxation of the leave strip requirements under the Guidelines. Mr. Rawcliffe in his testimony confirmed that he had made no inquiries to Surrey in this regard, and the claimants' planning expert, Mr. Verbenkov, also testified that he had not taken any steps on behalf of the claimants to seek any such variances. Accordingly, whether variances might be obtained from Surrey remains at this point a matter of conjecture.

[79] Another area of uncertainty with respect to the approval process before Surrey is the matter of geotechnical concerns around bank stability. The claimants say there are no such concerns and, in any case, the issue is immaterial to the question of whether there has been a de facto expropriation. The respondent says the lots may pose specific geotechnical concerns arising from their proximity to the Creek bed and the steep slope of the embankment leading down to the Creek bed and thereby potentially preclude the claimants' intended development of the lots, irrespective of whatever restrictions are imposed under the Guidelines.

[80] During the hearing the claimants pointed to a letter response, dated June 24, 1998, which they had received from Mr. Arlt of the Surrey engineering department. Toward the conclusion of his letter, Mr. Arlt made reference to a report prepared by the firm of Thurber Engineering Ltd. for Surrey undertaking a hazard assessment of the Creek areas throughout the Bon Accord watershed. Mr. Arlt stated in his letter:

"This geotechnical assessment report...indicates that there are no immediate concerns along the creek in the vicinity of your property."

[81] Mr. Dyer, in his land use overview prepared for the claimants, cited a section of the Surrey building bylaw under which, if a geotechnical engineer determines that land may not be used safely for the use intended, the building inspector must refuse to issue a building permit. He then referred to Mr. Arlt's letter in support of his overall conclusion that there are no apparent provisions in the building bylaw that would prohibit or impede the ability to construct single family housing units on the lots.

[82] However, Mr. Arlt explained in his testimony before the board that the purpose of the Thurber report was to provide a general overview of the whole watershed in question and was not focused on the development potential or buildability of particular parcels of land within the watershed.

[83] With respect to the issuance of building permits for the lots, Mr. McKenzie testified that the steepness of the bank adjacent to the lots was such that an applicant would be required to provide some geotechnical back-up to satisfy Surrey that the proposed development was safe. The claimants would be required to provide at their expense a report from a qualified engineer dealing with the geotechnical aspects. Depending on the findings, recommendations could be made for municipal setbacks different from what would otherwise be required. If Surrey was not totally satisfied with the claimants' proposal, he stated, it would retain the services of an outside expert to evaluate the proposal.

[84] From its consideration of the evidence, the board accepts the respondent's submission that determination of the issue of bank stability could have an important impact on the claimants' ability to obtain building permits for their intended use of the lots. It is clear from the evidence of Mr. Rawcliffe that the claimants have not commissioned any geotechnical studies to ascertain what, if any, building limitations may result. Accordingly, the impact at this point is unknown.

[85] With respect, the board also does not find merit in the claimants' submission that this question is immaterial to the issue of de facto expropriation. In determining whether there has been an extinguishment of all reasonable private uses (which both parties agree is an essential component in determining whether there has been a de facto expropriation), any pre-existing limitations on use are surely relevant and pertinent.

[86] Turning to the approval processes under the Guidelines which engage the respondent and the DFO, the board observes at the outset that there has not been at this point any formal imposition of a leave strip or no touch zone on any portion of the claimants' lots. Nor has there been any indication how, if a leave strip is imposed, it will be permanently protected in the present case.

[87] The evidence concerning the severity of restrictions within any such leave strip will be considered in greater detail when the board later examines whether the elements of de facto expropriation are satisfied. However, at this juncture, the board accepts on the basis of all of the evidence presented that there is some measure of flexibility in the application of the Guidelines to properties located within fisheries sensitive zones. In particular, the evidence shows that there are opportunities for obtaining relaxation of the leave strip requirements with respect to width. In some cases the relaxation is linked to the landowner's willingness to undertake compensatory works or habitat enhancement elsewhere to ensure that any such relaxation will not result in a net loss to the habitat.

[88] Mr. Clark, for example, testified that generally in granting relaxations with respect to leave strips the environmental impact was an important consideration. However, he said, the respondent and the DFO recognized that there were cases where property lines and other factors may make it very difficult to develop an affected parcel if a 15 metre or greater leave strip were imposed. Where there is justification for relaxation, Mr. Clark said, "we do not put people out of business or make their lots undevelopable."

[89] Mr. Reid of the DFO testified that a decision to allow a relaxation was taken first, and then the matter would be referred to the DFO for a decision on habitat compensation. This was to ensure that an applicant did not incur expenses in connection with a proposal for habitat compensation, only to have the relaxation later denied.

[90] In the present instance the evidence is that the claimants have not formally applied to the respondent or the DFO for relaxation of the 15 metre leave strip requirement under the Guidelines which appears on its face to pertain to the lots. As both Mr. Rawcliffe and Mr. Whyte, the claimants' environmental consultant, testified, the claimants have also taken no steps to explore the possibility of performing or funding compensatory works in exchange for any such relaxation. Accordingly, in the absence of any official disapproval or refusal of the claimants' proposals, the board concludes that the way in which the Guidelines would be applied to the lots is necessarily hypothetical or conjectural.

[91] In so deciding, the board has considered whether Mr. Clark's letter to the claimants of May 12, 1998, quoted at length earlier in these reasons, could be construed as an official refusal sufficient, in itself, to constitute a de facto expropriation of a portion of the lots. When testifying concerning his letter, Mr. Clark characterized it as merely offering suggestions and advice. However, the board is of the opinion that it has a rather more directive quality. Nevertheless, the language of the letter -- however it may have been understood by the recipients -- falls far short of being an official refusal.

[92] The board draws assistance on this question from the Tener decision in the Supreme Court of Canada as well as the board's own decision in Premanco Industries Ltd. v. British Columbia (Ministry of Environment, Lands and Parks) (2000), 71 L.C.R. 6.

[93] As previously noted, the Tener case involved Crown-granted mineral claims in a provincial park. The park classification was upgraded, which had the effect of making it virtually impossible to obtain permission to continue mining or exploring for minerals in the park. For some four years after the reclassification took place, the claim owners continued to request park use permits but each application was refused. Finally, they received a letter from the director of the parks branch saying that "no new exploration or development work may be authorized within a Provincial Park." The Supreme Court of Canada decided that this final refusal had the effect of preventing the claim holders from exercising their rights to take the minerals and constituted a de facto expropriation. As to why the later letter rather than any of the earlier denials became the triggering event, the concurring minority decision of the Court makes clear that the expropriation arose from absolute and permanent action. The director's letter was an absolute denial of access which deprived the claim holders of their property interest. Thus, the expropriation took place once the government advised that it would no longer grant any permits, making further applications pointless.

[94] In Premanco, another case involving Crown-granted mineral claims in a provincial park, the owner sought from the local mine inspector a reclamation permit authorizing it to undertake a program of mine rehabilitation and surface exploration on its claims. The inspector declined to issue the permit at the time because, as he expressed it, "legislation dealing with park use is being passed soon." The owner construed this initial refusal to grant a permit as tantamount to the taking of its mineral rights by the Crown. However, applying similar logic from the Tener decision, the board found that the mine inspector's refusal was not sufficiently unequivocal or in any sense permanently binding so to constitute the expropriation. The board found that the de facto expropriation had occurred at a later point when the government enacted an order in council changing the classification of the park and thereby effectively prohibiting the owner from undertaking exploration and development of its mineral claims.

[95] In the present instance the board agrees with the respondent's submission that Mr. Clark's letter was merely an informal or preliminary indication that, if the claimants applied for building permits, and the typical process involving the respondent, the DFO and Surrey were engaged, the respondent would not be prepared to approve a 13 metre relaxation of the 15 metre leave strip as proposed by the claimants, or to consider other relaxations, without being satisfied that the claimants had first pursued other avenues to reach accommodation with Surrey.

[96] Of course, the foregoing considerations become less relevant if the board were to accept the claimants' main proposition that the "expropriating event" was simply the enactment of section 35 of the federal Fisheries Act. However, in the board's opinion, this proposition is fraught with difficulty.

[97] The legislative history of both sections 35 and 36 of the Fisheries Act, the relevant provisions of which are set out earlier in these reasons at paras. 39 and 40, is important in considering the claimants' proposition. Based on its review of the legislative history, the respondent has stated, and the board accepts, that sections 35 and 36 are the enforcement of a public right to fish through the protection of the waterways that fish inhabit and the habitat that supports fish. The respondent traces the public right to fish in the English common law to the signing of the Magna Carta in 1215, and notes the reception of English common law in this jurisdiction from 1858. The earliest Fisheries Act was enacted by the Dominion of Canada in 1868. In 1874, the Fisheries Act was extended to apply to the new provinces of British Columbia, Prince Edward Island, and Manitoba.

[98] The respondent, through a carefully detailed chronology of legislative amendments and revisions, has demonstrated that provisions similar in content and purpose to those of the current sections 35 and 36 have existed within the Fisheries Act since the late nineteenth century. The point that needs to be underscored is that restrictions of one sort or another have been in place for many decades.

[99] The historical section which most closely resembles the current section 35 was enacted in the 1976-1977 Statutes of Canada:

30.	No person shall destroy fish by any means other than fishing except as authorized by the Minister or under regulations made by the Governor in Council under this Act.
31.	(1)	No person shall carry on any work or undertaking that results in the harmful alteration, disruption or destruction of fish habitat.
	(2)	No person contravenes subsection (1) by causing the alteration, disruption or destruction of fish habitat by any means or under any conditions authorized by the Minister or under regulations made by the Governor in Council under this Act.
	(3) & (4)	[penalty and application]
	(5)	For the purposes of this section and sections 33, 33.1 and 33.2 "fish habitat" means spawning grounds and nursery, rearing, food supply and migration areas on which fish depend directly or indirectly in order to carry out their life processes.

[100] For the purposes only of this discussion the board has assumed that it has jurisdiction to hear and determine the claimants' claim. However, considering the close similarity of predecessor provisions in earlier enactments of the Fisheries Act, the board is unable to find any particular significance in the enactment of the current section 35 in 1985. Accordingly, if the claimants seek to rely on the enactment of those provisions now contained in section 35 as the expropriating event, it would seem clear that the claim should be against the federal Crown alone and heard in the Federal Court of Canada. This is because at the time of the enactment of the predecessor provisions to section 35, based on the evidence provided, there was no "partnership" with the respondent to administer the Fisheries Act.

[101] Moreover, if the claimants are correct about the effect of section 35 (or its predecessor provisions), then the de facto expropriation of the lots took place many years ago, under a different owner, and any compensation payable would presumably have to be calculated with reference to the situation as it existed at that time.

[102] The board does not agree that the enactment of section 35 is the expropriating event. It construes the term "expropriating event", which is not a defined term in the Act, to refer to the "date of expropriation" which is the defined term. Section 35 of the Fisheries Act first sets out a general prohibition and then goes on to permit certain activities under conditions authorized by the DFO or regulations made by the federal cabinet. It is the conditions imposed under the authority of the statute that need to be examined, not the conditions that could potentially be imposed. In this respect, the board is satisfied that the restrictions imposed or enforcement actions taken pursuant to the authority conferred by section 35 of the Fisheries Act are akin to a regulatory scheme. The enactment of section 35 allows for a regulatory regime and does not, in itself, constitute an expropriation.

[103] The restrictions on private property in fisheries sensitive zones imposed under the Guidelines are, in the board's view, part of that regulatory regime, however enforceable. That being the case, the comments of Cromwell J.A. in the Mariner judgment are clearly germane to the issue of whether the claimants' claim of de facto expropriation is premature and hypothetical. At pp. 22 and 23 (68 L.C.R.) of the judgment, the learned judge wrote:

In my opinion, where a regulatory regime is imposed on land, its actual application in the specific case must be examined, not the potential, but as yet unexploited, range of possible regulation which is authorized. This point is demonstrated by the Tener case. The Court was clear in that case that the taking occurred as a result of the denial of the permit, not by the designation under the Park Act which required the permit to be obtained.

The American constitutional cases have recognized the importance of looking at the actual application of the regulatory scheme as opposed simply to its potential for interference with the owner's activities. The U.S. Supreme Court requires in regulatory takings that there be a final decision regarding the application of the challenged regulations to the property: see Suitum v. Tahoe Regional Planning Agency (1997), 117 S. Ct. 1659 at 1664-5. This rule is based on the common sense proposition that a "...Court cannot determine whether a regulation has gone 'too far' unless it knows how far the regulation goes": see MacDonald, Sommer & Frates v. Yolo County (1986), 106 S. Ct. 2561. In my view, the same principle applies to claims of de facto expropriation in Canada.

[104] In light of the various factors discussed above, and the foregoing discussion of so-called "regulatory takings" in Mariner, the board concludes that the claimants' claim of de facto expropriation in this case is premature and hypothetical.

5.3.2  Have the Elements of de facto Expropriation Been Established?

[105] For the purpose of the ensuing discussion, the board has assumed that, although nothing formally has been decided at this point, there will be restrictions imposed upon the development and use of the claimants' lots pursuant to the Guidelines. The question then becomes whether those restrictions meet the test for de facto expropriation which the courts have enunciated.

5.3.2.1  The elements of de facto expropriation

[106] It is established law in Canada, already referenced in the Tener and Casamiro decisions, that an expropriation can occur where the procedures under expropriation legislation have not been invoked. It can also occur where the owner continues to hold title to the land affected. This latter point was addressed in the board's decision in McEachern v. British Columbia Hydro and Power Authority (1997), 60 L.C.R. 186, at pp. 204-205:

Our Court of Appeal described the concept of expropriation in the case of A.L.M. Investments Ltd. v. Strata Plan NW 2320 (Owners) (1989), 42 L.C.R. 269 (B.C.C.A.) at 271-2:

A fair, large and liberal interpretation of the term "expropriation" is any kind of compulsory taking of title to land authorized by law. The essential concept is compulsory transfer or vesting of title to land from one party to another. Such was the result of the court order made pursuant to the application of the developers under the Property Law Act. A lawfully sanctioned encroachment of a permanent nature amounts to a compulsory taking or expropriation of land in the same sense as a government expropriation.

While accepting the court's approach in A.L.M., we also agree with the board's conclusion in the B.C. Gas case that vesting of actual title in the taker is not an immutable aspect of the expropriation concept. In B.C. Gas, the board held that permanent encroachment on the claimant's land by the gas company under powers of expropriation in the Pipeline Act is an expropriation as defined in s. 1 of the [Expropriation] Act, even though procedures peculiar to the Pipeline Act prevented title from vesting in the gas company until after the determination of compensation. A similar approach appears to have been endorsed by the Supreme Court of Canada in Manitoba Fisheries v. The Queen, [1979] S.C.R. 101 (S.C.C.) and British Columbia v. Tener, [1985] 1 S.C.R. 533, 32 L.C.R. 340 (S.C.C.), where a "taking" was not precluded by the parties' retention of ownership of their physical assets.

[107] Having set out what is not required to found a de facto expropriation, it is next necessary to review the elements which must be present. On this question there is no real dispute between the parties.

[108] In a paper which analyzed the law relating to de facto expropriation, entitled "Exotic Expropriations: Government Action and Compensation" (1994), 52 Advocate 561, R.J. Bauman (as he then was) posed the question: "what is a taking?" He concluded from his review of the de facto expropriation cases that a taking occurs when "the legislation effectively, if not prima facie, confiscates all reasonable private uses of the land in question." This statement has been cited with approval by the Supreme Court of British Columbia in Timberwest Forest Ltd. v. British Columbia (1999), 69 L.C.R. 216 at p. 232, as well as by the Nova Scotia Court of Appeal in Mariner, at p. 21.

[109] A similar conclusion is reached in Alberta (Minister of Public Works, Supply and Services) v. Nilsson, [1999] A.J. No. 645 (Alta. Q.B.) at para. 52:

...a distinction may be made between mere limitations on the use of property and restrictions that are severe enough to amount to a taking on the scale of an expropriation. Although the analyses are fact driven, the case law is clear that virtually all of the rights held by the owner must be taken away or rendered worthless before one can succeed on a claim of de facto expropriation.

[110] There is, however, a further element involved beyond the extinguishment of all reasonable private uses in order to found a de facto expropriation. This is made clear in both of the concurring judgments in the Mariner case. With reference to the governing expropriation statute in Nova Scotia, Cromwell J.A. stated at p. 34:

...there must not only be a taking away of land from the owner but also the acquisition of land by the expropriating authority for there to be an expropriation within the meaning of the Act.

Hallett J.A. expressed the two-pronged test as follows at p. 40:

To prove a de facto expropriation, an owner of an interest in land as defined in the Expropriation Act, R.S.N.S. 1989, c. 156, must conclusively prove that there has been, in effect, a confiscation of all reasonable private uses of the interest in the land in question and an acquisition of same by the statutory authority. That is what occurred in The Queen in right of British Columbia v. Tener, [1985] 1 S.C.R. 533, 17 D.L.R. (4th) 1, 32 L.C.R. 340.

[111] In Steer Holdings Ltd. v. Manitoba (1992), 48 L.C.R. 241, the Manitoba Court of Appeal held that, while the impugned legislation had "taken away" the owner's right to construct a development that would span a creek on its property, there was no corresponding benefit to or acquisition by the province. The Court stated at p. 247:

To qualify for compensation there must be an expropriation, if not in name, then in effect. The limitation on usage must be balanced by some corresponding acquisition by the authority.

Consequently, the Court held that no compensation was payable.

[112] The board must now consider whether the evidence in this case satisfies each element of the two-pronged test for de facto expropriation as defined in the relevant case law: the extinguishment of all reasonable private uses within the area of the potential leave strip on the claimants' lots, and some corresponding acquisition of that interest by the taker.

5.3.2.2  Has there been an extinguishment of all reasonable private uses?

[113] Moving from the assertion that a leave strip or no touch zone will result from any attempt to develop the lots, the claimants' case rests on the proposition that they will lose virtually all control over any activity within the leave strip area, a loss so severe as to constitute a de facto taking of that portion of the lots. Furthermore, they say, the imposition of the leave strip will severely impact the prospect of development itself.

[114] The pivotal evidence for the claimants in this regard was that of Mr. Verbenkov, whose report, dated August 8, 2000, was entitled a "Development Impact Assessment". Mr. Verbenkov's report proceeded from the assumption that the full rigour of the Guidelines would be applied. It focused on the effect of a 15 metre leave strip boundary, an additional 3 metre root protection zone, and mandatory permanent fencing and signage. It further assumed that the limitations on use within the leave strip would be those imposed by way of the Restrictive Covenant. In his letter of transmittal, Mr. Verbenkov noted that, while the report referred to Mr. Clark's letter to the claimants of May 12, 1998, "we have not addressed the likelihood of approval for variances to the required City of Surrey building setbacks or to the reduced DFO/MELP leave strip boundary."

[115] Based on his assessment of the terms of the Restrictive Covenant, Mr. Verbenkov concluded that the restrictions "eliminate all reasonable private uses and activities on the leave strip lands that are normally available to a property owner." He added:

"From a land use planning perspective, the denial of all private uses within and access to the permanently protected area (from the subject property) is by de facto redefining and reducing the property's usable land boundaries."

[116] Mr. Verbenkov next considered the developability of the lots for single family residential use under two primary land use scenarios: a 5 metre undevelopable boundary imposed by Surrey, and the 15 metre leave strip zone imposed under the Guidelines.

[117] Surrey's zoning bylaws provide for a 5 metre "undevelopable area" in determining where building envelopes can be situated on parcels of land situated alongside environmentally sensitive areas. Zoning Bylaw 12000 defines "undevelopable area" as "ravine, swamps, river banks and similar features which make the said portion of the lot unsuitable for the placement of buildings and structures of which the boundary shall be determined by a line 5 metres [16 ft.] inland from the top-of-bank."

[118] Mr. Verbenkov's review of Surrey's classification map confirmed to him that the 5 metre requirement would apply to the claimants' lots. However, while the 5 metre line would encroach onto the lots, he concluded that it would not reduce the lots' building envelopes and thus their development potential since the undevelopable area lay, in any case, within the 7.5 metre rear yard setback ordinarily required under Surrey's zoning bylaws.

[119] By contrast, Mr. Verbenkov considered that the 15 metre leave strip under the Guidelines would dramatically reduce the usable lot areas and, hence, the building envelopes of the lots. He estimated that the lot area losses ranged from 35.6 per cent to 73.1 per cent. The 15 metre leave strip requirement, he opined, would render Lot 4 to be undevelopable since a building envelope could not be established. Although Lots 1 to 3 fulfilled Surrey's minimum ground floor area requirements, the peculiar shape of the building envelopes would not accommodate what he described as single family homes typical to the neighbourhood. Overall, the restricted size and shape of building footprints would dramatically decrease the development potential of the four lots, significantly affecting their marketable value.

[120] Mr. Verbenkov's finally expressed opinion was that, from a land use planning perspective, "the required Restrictive Covenant (and the resulting permanently protected area) extinguishes all reasonable private uses by the property owner with corresponding benefits gained by the Crown [DFO/MELP]."

[121] Mr. Whyte, the claimants' environmental consultant, produced a brief letter report dated October 27, 1999, on the subject of "stream setbacks from residential developments in Surrey." He made assumptions similar to those of Mr. Verbenkov with respect to riparian and other setbacks, noting that the intent of the form of protection imposed is "to allow the area to develop as a natural area, free of human disturbances." He concluded that the 15 metre "watercourse setback can substantially reduce the usable area available to the owner/developer." Although, he noted, some may argue that there is an increased value associated with lots backing onto greenspace, "most developers are of the opinion that lost land equates with reduced value."

[122] Mr. Whyte, unlike Mr. Verbenkov when forming his opinion, did look at the question of relaxation of leave strip requirements. He observed that the DFO and the respondent may give consideration to cases where the developer presents a compelling rationale for relaxation. However, he also expressed the view that such cases "are becoming increasingly rare" and, where relaxations are permitted, "they invariably come at a cost" in the form of other required habitat creation or enhancement. Mr. Whyte noted that such compensatory works must be paid for by the owner/developer and be guaranteed either by a letter of credit or a bond. From four single family residential development projects in which he said his firm had been involved been 1996 and 1999, Mr. Whyte cited relaxations from the 15 metre leave strip requirement in two such instances of between 5 metres and 10 metres, while in the other two instances the setback requirement was "variable" but nevertheless averaged 15 metres. In each of these four instances, some compensatory works were required either on-site or off-site, the setback area was protected by either park dedication or the Restrictive Covenant, and fences had to be erected at the leave strip boundary. In only one such instance cited was there provision for gates in the fences.

[123] The claimants also cited other evidence introduced at the hearing to support their argument as to the increasing severity of restrictions imposed. They focused, for example, on the question of whether owners might be able to gain access to the leave strip areas on their lands. Although both the Guidelines and the Restrictive Covenant call for permanent fencing, Mr. Clark for the respondent testified that the actual imposition of that requirement was a "gradual thing", dating from about 1996.

[124] The claimants drew attention to a memorandum received by Mr. Whyte, dated August 29, 2000, from one John Summers, a habitat protection officer of the respondent for fish, wildlife and habitat protection in the Lower Mainland region. Mr. Summers observed, in connection with another project with which Mr. Whyte's firm was involved, that "we no longer permit pedestrian gates in the RC [Restrictive Covenant] area." Both Mr. Reid of the DFO and Mr. Clark of the respondent denied that any such general policy was in place. Mr. Reid said, however, that the gate within the fence must be narrow enough to discourage wheelbarrow access, and Mr. Clark admitted that it was "more desirable for us not to have a gate."

[125] With respect to what activities an owner might be able to undertake within the leave strip area protected by the Restrictive Covenant, the claimants refer pointedly to some of Mr. Clark's evidence in support of their contention that the claimants would be denied the typical uses of a back yard. If there are structures such as a porch or even a basketball hoop protruding onto the protected area, the owner must remove them. Lawns or gardens are not approved within the leave strip, nor are swimming pools. The owner is prohibited from cutting down a tree within the leave strip, except perhaps a dangerous tree, but in such cases the respondent will require the owner first to obtain the report of a qualified arborist to ensure that the owner is not simply trying to improve his or her view. When pressed on cross-examination to say what uses owners might make of their property within a leave strip, Mr. Clark volunteered "bird-watching" as an acceptable activity.

[126] The respondent denies that the evidence shows that all private uses by the claimants of the land within the leave strip, assuming one is imposed, will be prohibited, or that the claimants effectively will have lost the opportunity to develop the lots. The respondent takes issue in particular with the evidence of Mr. Verbenkov, both as to the assumptions contained within his report and the impartiality of his conclusions.

[127] Mr. Wollenberg, the respondent's planning expert, in his rebuttal report questioned Mr. Verbenkov's operative assumption that the Guidelines will be applied in full to the claimants' lots. He stated that, based on his own review of actual land development applications for sites along watercourses in Surrey, various types of relaxations have been granted that have resulted in a reduction or modification of the leave strip. The Guidelines, he said, have not been applied rigidly to all sites; rather, there have been modifications to fit the specific circumstances. Since each case is evaluated on its own circumstances, in the absence of an actual application "one could not be certain of the specific requirements that would be imposed".

[128] Similarly, Mr. Wollenberg questioned the assumption that there would be no relaxation of any of Surrey's relevant development regulations. Surrey, he noted, has the legal authority to vary its bylaw requirements for setbacks and its board of variance must consider applications for relief. Hardship, he suggested, was an important consideration when deciding upon whether variances will be granted.

[129] Mr. Wollenberg faulted the Verbenkov report for considering only the "hypothetical worst case scenario" when other possibilities exist:

"including scenarios in which MELP and the City collaborate in an approach to modifying the front yard setback and the leave strip width to produce a building plan that achieves goals for habitat protection and does not impose severe impacts on the four subject lots."

He suggested there is also a "hypothetical best case scenario" in which sufficient relaxations are obtained "to result in no material impact on any of the lots" as well as other possibilities where some constraints on development exist but each lot can still accommodate a single detached dwelling. Mr. Wollenberg acknowledged, however, that he had not undertaken any site planning to demonstrate how these scenarios might operate.

[130] Mr. Wollenberg also challenged Mr. Verbenkov's conclusion that all reasonable private uses otherwise permitted by the applicable zoning regulations have been eliminated within the leave strip. To conclude that a limitation on building construction on a portion of the lots denies the use entitled by zoning is, in Mr. Wollenberg's opinion, an "error in interpetation of the word 'use' in the context of land use planning and regulation." Moreover, from a planning perspective, the notion that all private uses within the leave strip have been eliminated would be incorrect even if it turned out that the claimants had no physical access or severely limited access to that portion of the lots. As Mr. Wollenberg expressed it in his report:

"The owner has the 'use' of land in a leave strip as a contributor to lot area, which determines the allowable density of development on a site. The owner also has the benefit of a private green space that adds to the attractiveness of the neighbourhood and creates an impression of lower development density. These can be assumed to be benefits or the purchaser would presumably not have elected to buy in an area with these characteristics. The owner also has the use of the property as a natural outdoor space."

[131] While acknowledging that the owner "has less flexibility regarding activity on the leave strip", Mr. Wollenberg concluded that the limitations on the uses of the property in the protection area "are conceptually similar to the limitations imposed by zoning, tree cutting and other regulations that affect the use and development of private land."

[132] The respondent also refers to certain testimony of Mr. Clark as evidence that all uses within leave strips are not prohibited. Notwithstanding the many restrictions on use which Mr. Clark identified, as noted earlier, he also indicated that in some cases the planting of grass within the leave strip is possible, that pathways and trails will be considered under certain circumstances, and that passive recreational use continues to be available to the owner.

[133] In weighing the foregoing evidence, the board is assisted by decided cases which have had to consider whether the facts support an assertion that the rights of owners have been extinguished by specific government action.

[134] The Mariner case before the Nova Scotia Court of Appeal is especially germane. In Mariner, the owners' lots were located in an area designated as a "beach" under the Beaches Act, R.S.N.S. 1989, c. 32. The effect of the designation was to place control of the area for development purposes with the provincial minister of natural resources. The minister refused to grant permission to the owners to construct single family dwellings. The owners brought an action to declare that the Crown's actions amounted to an expropriation of their property interests. At first instance, the trial judge found that there had been an expropriation because the owners had lost "virtually all economic value" in their lands and their fee simple interest "had been stripped of its whole bundle of rights" as a result of the designation and subsequent refusal to grant permits. However, this finding was overturned in the Court of Appeal.

[135] The judgment of Cromwell J.A. found that the act of designation under the Beaches Act imposed on the owners' lands a regulatory scheme and that, as a result of the ministerial refusal to grant the requested permits, the owners had lost virtually all economic value of their lands. However, the majority held that loss of economic value did not equate with the loss of all interest in the land so as to constitute a de facto expropriation. Cromwell J.A. reviewed what he called the "long tradition of vigorous land use regulation" in Canada from which he concluded that the test for applying the concept of expropriation to land use restrictions is exacting. The learned judge observed at p. 21 (68 L.C.R.):

In each of the three Canadian cases which found compensation payable for de facto expropriations, the result of the governmental action went beyond drastically limiting use or reducing the value of the owner's property. In The Queen in right of British Columbia v. Tener, [1985] 1 S.C.R. 533, 17 D.L.R. (4th) 1, 32 L.C.R. 340, the denial of the permit meant that access to the respondents' mineral rights was completely negated, or as Wilson J. put it at p. 552, amounted to total denial of that interest. In Casamiro Resource Corp. v. British Columbia (1991), 80 D.L.R. (4th) 1, 45 L.C.R. 161 (B.C.C.A.), which closely parallels Tener, the private rights had become "meaningless". In Manitoba Fisheries v. The Queen, [1979] 1 S.C.R. 101, 88 D.L.R. (3d) 462, the legislation absolutely prohibited the claimant from carrying on its business.

[136] Hallett J.A., in his concurring judgment, took a somewhat more contextual view of the matter. He stated at p. 41:

If an owner of shore front property that is designated as a beach under the Beaches Act is refused permission to construct a type of dwelling that would be reasonable considering the nature of the land, then such refusal may well found a claim that the land has, in effect, been expropriated. The outcome of such a claim would turn on the evidence and, in particular, evidence respecting the nature of the land so designated, the reasonableness of the development proposed for the land and the reasonableness of the restrictions on use proposed by the Province to be incorporated into an agreement.

Nevertheless, in his opinion the evidence at trial did not support a finding that virtually all incidents of ownership had, in effect, been taken from the owners. The learned judge noted that under the legislation it was open for the owners to apply to the minister for permission to construct a type of dwelling that would be compatible with preservation of the beach and to enter into restrictive usage agreements with the Crown as contemplated by the statute. Permission to build might still be granted by the minister.

[137] The Court in Mariner emphasized that the owners had the onus of proving that virtually all incidents of ownership, having regard to the reasonable uses of the land absent the impugned restrictions, had been taken away. The owners had not met that onus because, on the evidence, two of the lots in question were not buildable in any event and there was no evidence that the owners had made application for other recreational uses on the two unbuildable lots and therefore no evidence that permission to use those lots had been refused. Furthermore, with respect to the other lots where an application to build had been refused, there was no evidence that other uses or activities had been applied for and refused, and no evidence that the owner had explored alternative building schemes to mitigate environmental concerns.

[138] In several other cases, this board has considered whether setbacks or strip designations can amount to a de facto expropriation or give rise to a claim for compensation for injurious affection without a taking: see Frobeen v. Central Saanich (District) (1996), 58 L.C.R. 267; Hampton Investments Ltd. v. British Columbia (Ministry of Transportation and Highways) (1997), 61 L.C.R. 224; and Reimer v. Surrey (City) (1997), 62 L.C.R. 222.

[139] In Frobeen, a municipal bylaw imposed a 30 metre setback from an environmentally sensitive creek. Within the setback area the owners could not use their land for the construction of buildings or structures and no existing structures therein could be altered, moved or extended. The owners did not allege a de facto expropriation but claimed compensation for injurious affection on the basis that the setback sterilized a significant portion of their property from private use and preserved it for public benefit. They stated that a close reading of the bylaw revealed that its purpose was for protection of stream and fish habitat or, alternatively, for the creation of a park. During the hearing they demonstrated that diagrams in the bylaw were very similar to those in pamphlets published by the federal Department of Fisheries and Oceans and the provincial Ministry of Environment, Lands and Parks on the protection of aquatic habitat and stream stewardship. They drew the board's attention to the provincial pamphlet's recommendation that municipalities could implement habitat protection around streams by enacting land zoning bylaws.

[140] The board found that the bylaw in question was a land use bylaw within section 972 of the Municipal Act and that, pursuant to that section, compensation for damage and loss arising from that bylaw was prohibited unless the use of land was wholly restricted to a public use. Section 972 stated in part:

972.	(1)	Compensation is not payable to any person for any reduction in the value of that person's interest in land, or for any loss or damages that result from the adoption of an official community plan, a rural land use bylaw, or a bylaw under this Division...
	(2)	Subsection (1) does not apply where the rural land use bylaw or bylaw under this Division restricts the use of land to a public use.

[141] The board in Frobeen then went on to find that, although there were a number of restrictions on the use of the land within the setback, private use was not completely foreclosed and thus subsection (2) did not apply. The bylaw did not alter the pre-existing private use of land within the setback. A corner of the residence and at least part of the outbuildings were located there. The unoccupied land within the setback, the board observed, was presumably used as a garden or yard for private recreational and/or aesthetic purposes as well as for parking.

[142] In Hampton Investments the City of Nanaimo amended its official community plan to designate all lands within 200 metres of a proposed provincial highway project known as the Nanaimo Parkway as a development permit area, and adopted certain guidelines which created, among other things, "character protection zones." The area in which the owner/developer's property lay was described by these guidelines as requiring a 20 metre character protection zone alongside the Parkway. Within the 20 metre strip no development would be permitted and certain landscaping requirements would apply. The owner sought compensation from Nanaimo on several alternative grounds, including the assertion that there had been a "constructive" or de facto expropriation.

[143] The board found no constructive or de facto expropriation in the circumstances of this case, in part because it considered that the character protection zone created an insufficiently severe interference with the owner's property interests. The board looked at the creation of the setback in the context of the whole of the property over which the character protection zone lay, and found that it had not eliminated but merely reduced the economic value of the parcel. Even on the evidence of the owner's appraiser, the parcel retained value and, indeed, the owner was in the process of creating a subdivision on it. The board contrasted the facts in this case with those in Tener where there had been a complete denial of the owner's right of access to its mineral claims, and therefore a complete loss of the economic value of the claims themselves.

[144] The board also commented as follows at p. 239:

It is significant, in the board's view, that there is not one case among the many cited to the board, in which a claim of this nature has been upheld. The weight of authority seems strongly against such claims, and the board has not been presented with any compelling basis for an unusual result in this case.

[145] In Reimer the City of Surrey, pursuant to a subdivision bylaw, had designated a 30 metre strip of the owners' property for a future arterial road. The owners maintained that, when they subsequently tried to market the property on the basis of its development potential in a growing municipality, they confronted concerns from potential purchasers reluctant to assume the risk of the uncertainties posed by the future road. When they eventually sold the property, they said they were unable to obtain any value for the 30 metre strip, and that Surrey's actions had rendered that portion of the property worthless. Prior to the owners' sale of the property, Surrey had not taken any formal steps to expropriate the strip for road right of way, and the issue before the board was whether the designation of the strip for a future road was nonetheless a de facto expropriation during the period when the owners had title to the property.

[146] The board again distinguished the facts in that matter from those in Tener to conclude, in effect, that the first test for de facto expropriation had not been met. At p. 231 the board stated:

Surrey's designation of the road did not restrict the Reimers' entire interest in the land. As long as they owned the property the 30-metre strip continued to be used as part of their hobby farm. They were eventually successful in selling the property for approximately the appraised market value. Until the property is subdivided or the road is built, the current owner can continue to use it as part of a hobby farm, or for other limited uses short of subdivision development. It is true that there were restrictions on subdivision development on the 30-metre strip, but this is a long way from rendering the property worthless.

[147] The foregoing cases make clear that the first test for de facto expropriation -- the extinguishment of all reasonable private uses -- is a stringent one and is very much fact-driven. In particular, the Mariner decision is authority for the proposition that governmental action must go beyond "drastically limiting use or reducing the value of the owner's property." It is also clear that the onus is on the owner to establish that all reasonable private uses have been extinguished.

[148] In the present case, the board is persuaded from its review of all of the evidence that restrictions likely to be imposed within the area of the leave strip itself under the Guidelines are severe. The consequences are potentially more drastic than in any of the factual situations described in Frobeen, Hampton Investments or Reimer. The situation is more akin to that in Mariner. The board is less persuaded, however, that the imposition of a leave strip on the claimants' lots would necessarily result in the extinguishment of all reasonable private uses on the area affected. An obvious difficulty in making the assessment is that the final extent of the leave strip, the restrictions which would actually apply within the leave strip, and the manner in which it would be permanently protected are all unknown. This, of course, simply underlines the board's earlier expressed view that the claimants' application to the board is premature.

[149] On the one hand, Mr. Wollenberg for the respondent has suggested the possibility that sufficient variances and relaxations could be obtained that would negate or minimize development impact. While the evidence in this respect, including that of Mr. Whyte, the claimants' environmental consultant, and Mr. Clark, the respondent's regional director, supports the view that some flexibility exists, it seems to the board that Mr. Wollenberg's hypothetical best case scenario is a remote possibility.

[150] The board also considers that for Mr. Wollenberg to say that limitations on use within the leave strip are conceptually similar to limitations imposed by zoning, tree cutting and other regulations affecting the use and development of private land overlooks a distinction created by the statutory protection afforded to municipalities. These land use regulations, to the extent that they are imposed by municipalities or regional districts, are, as claimants' counsel pointed out, protected from claims for compensation under what used to be section 972 of the Municipal Act, referred to in the Frobeen case as previously set out, and are now protected by section 914 of the Local Government Act.

[151] The board, however, finds convincing up to a point Mr. Wollenberg's opinion that the claimants would continue to have the "use" of land within the leave strip as a contributor to lot area for the purpose of determining the allowable density of development, as private green space adding to the attractiveness of the property and the neighbourhood, and as natural outdoor space. Added to this observation is Mr. Clark's evidence that pathways and trails might be permitted and that passive recreational use would continue to be available to the claimants.

[152] On the other hand, Mr. Verbenkov for the claimants has assumed the worst case scenario -- the full application of the Guidelines (with a 15 metre or wider setback) and the Restrictive Covenant (with the leave strip area totally fenced off from the rest of the claimants' lots and probably with no gate access to accommodate even passive recreational use). If that were indeed the reality of this case, it is not clear to the board that, viewed in context, there would be any "reasonable" private uses left to the claimants. After all, the benefit of total lot size for computation of density or as contribution to private green space, to which Mr. Wollenberg referred, would not be of any material use if the lots are undevelopable because of the most restrictive application of the Guidelines. Mr. Wollenberg himself conceded that the worst case scenario would result in a very dramatic negative impact on developability of the lots.

[153] Even assuming that gate or other access is provided to the leave strip area, "passive recreational use", which may be a reasonable use on beach property such as that discussed in the Mariner decision, may not amount to a "reasonable" private use where the land is prime developable land and 50 per cent or more of it falls within the leave strip.

[154] Nevertheless, Mr. Verbenkov's adherence to a scenario which allows for no variances, relaxations or habitat compensation proposals and which assumes the fullest application of the Restrictive Covenant, rests on assumptions which the board in light of all of the evidence is unable to accept. Equally, Mr. Dyer's opinion flowing from his land use overview report that, absent the intervention of "any other body of jurisdiction" (meaning, presumably, bodies such as the respondent and the DFO) , there would be no impediments to the issuance of building permits by Surrey and the claimants' ability to construct single family residential units on the lots, is contradicted by other evidence, including that of Mr. McKenzie and Mr. Arlt, which the board finds more persuasive.

[155] The onus is on the claimants to establish that all reasonable private uses would be extinguished in the leave strip and the board is not satisfied on the evidence that such is the case. There could be some relaxation of the leave strip, resulting in modified or reduced requirements. Surrey could grant development variance permits to shift development to another portion of the lots. An inter-agency approach might successfully be used to combine variances to municipal setbacks and relaxation to the leave strip to arrive at a "reasonable" result. In any case, topographical limitations might also result in severe limitations on development of the lots, independent of the considerations around protection of fish habitat.

[156] In the board's view, considerations such as those described above go to the essence of determining the likely extent of the leave strip area and whether all reasonable private uses are extinguished by the imposition of the leave strip. They are not simply factors to be considered at some future time in determining the quantum of compensation.

[157] Accordingly, on the basis of its assessment of all of the evidence in light of the relevant law, the board is unable to conclude that there would be an extinguishment of all reasonable private uses in consequence of the imposition of a leave strip on the claimants' lots.

5.3.2.3  Is there a corresponding acquisition by the respondent?

[158] Even if it had been proven that imposition of a leave strip on the claimants' lots would extinguish all reasonable private uses, the claimants would nevertheless have had to satisfy the second test for de facto expropriation as developed in the case law: the acquisition of a corresponding interest by the taker. Although the parties often referred to this second test in terms of a "corresponding benefit", the board prefers to stay with the language used in the decided cases and construes "benefit" to mean "interest".

[159] The Mariner decision undertakes an extensive and compelling analysis of the applicable test. There was no suggestion in that case that the Crown acquired legal title to the beach front properties or any part of them. The land remained private property although subject to the regulatory regime established by the Beaches Act. However, the owners argued that the effect of the regulatory regime was, for practical purposes, the acquisition by the Crown of an interest in land. They submitted that the Tener decision stood for the proposition that, where regulation enhances the value of public land, the regulation constitutes the acquisition of an interest in land. They also relied upon the decision of the Supreme Court of Canada in Manitoba Fisheries and the trial level decision of the Supreme Court of British Columbia in Casamiro in that regard.

[160] Cromwell J.A. rejected the owners' argument. The effect of the regulatory regime in Tener, he stated, was not only to extinguish the mineral rights of the owners in that case but also to re-vest them in the Crown. Statements by Estey J. in Tener, when read in context, did not support the owners' position in Mariner. Cromwell J.A. stated at p. 35:

I do not think, with respect, that his statements to the effect that the reacquisition enhanced the value of the park takes away from his holding that the Crown re-acquired in fact, though not in law, the mineral rights which constituted land under the applicable definition.

[161] Similarly, in Manitoba Fisheries, Cromwell J.A. observed that the legislative scheme which deprived the company of its goodwill also conferred a monopoly to conduct the same business on a Crown corporation, so that there had not only been a deprivation but also, in effect, a transfer of the goodwill to the Crown corporation. He rejected as "clearly wrong" the trial judge's statement in Casamiro that, whether or not the Crown acquired the mineral rights of which the owners in that case had been deprived, was irrelevant. For there to be an expropriation, Cromwell J.A. stated at p. 36, "there must be an acquisition as well as a deprivation". In the Mariner case, there was no evidence that the economic value of the Crown's land was enhanced, but even if its value had been enhanced in some other sense, such enhancement was not an "acquisition of land". The learned judge also observed at p. 38:

...the freezing of development and strict regulation of the designated lands did not, of itself, confer any interest in land on the Province or any other instrumentality of government.

[162] In the present instance, as previously cited at para. 25, the Guidelines state that the leave strip should be permanently protected under one of the following methods: dedication as a park, return of the land to the Crown in the name of the local government, re-zoned as a protected area or reserve status, or secured with restrictive covenants.

[163] Mr. Verbenkov for the claimants assumed in his analysis that the leave strip area of the lots would be permanently protected by way of the Restrictive Covenant. He ventured the opinion that the effect would be to extinguish all reasonable private uses by the claimants "with corresponding benefits gained by the Crown [DFO/MELP]."

[164] This opinion was set forth in Mr. Verbenkov's report, dated August 8, 2000, upon which the claimants relied, but as the evidence admitted at the hearing showed, it did not appear in an earlier draft of the report, dated October 25, 1999. The contents of his expert file, provided on request to the respondent, showed that the additional opinion was the culmination of communications with the claimants, and claimants' counsel, leading to a redrafting of the report which adopted the exact words suggested to him in the context of a memorandum of law that set out the requirements for de facto expropriation. It is on this basis that the respondent has alleged an absence of impartiality on the part of Mr. Verbenkov leading to its submission that his evidence should be accorded little weight.

[165] Whatever the merits of the respondent's submission concerning lack of impartiality, or the appearance thereof -- an allegation which the claimants strenuously denied -- the fact is that Mr. Verbenkov provided little in the way of evidence in his report to sustain the opinion he expressed concerning "corresponding benefit". The subject of his report, after all, was a "development impact assessment" on the entirety of the lots in question. Where he strayed into expressing opinions concerning the extinguishment of private uses through the imposition of the leave strip and the Restrictive Covenant, with corresponding benefits said to be gained by the Crown, Mr. Verbenkov went beyond the scope of his expertise. He entered into an area of legal analysis which was properly the role of claimants' counsel, and a legal conclusion which, although fact driven, was one for the board to reach. Accordingly, the board considers that no weight can be accorded to Mr. Verbenkov's final conclusion on the matter.

[166] Neither the claimants nor the respondent specifically addressed the question of what governmental body would acquire the interest if the area of the leave strip were to be rezoned by local government as a protected area or reserve status or were to be returned to the Crown in the name of the local government. While on its face the former option would appear to favour Surrey and the latter option the respondent, the board did not have the benefit of either evidence or argument to be able to decide the point in any conclusive way.

[167] For its part, the respondent submits that it would not acquire an interest in the potential leave strip however it might be permanently protected. If the leave strip were dedicated as park land, it says, any interest that accrued would be to Surrey in the nature of an expansion of Invergarry Park. The board finds merit in that submission, subject perhaps to the intended scope of the decision of Cromwell J.A. in Mariner, who held in that case that no interest in land had been conferred "on the Province or any other instrumentality of government." While Surrey is a separate legal entity, it could at least be argued that, in effect, Surrey is another instrumentality of government within the meaning of the term used in Mariner.

[168] If the Restrictive Covenant were registered on the leave strip, the respondent says in that instance that any interest acquired would be shared by the respondent and the DFO. While the protection of fish habitat, it argues, is ultimately a benefit to all Canadians (which encompasses both federal and provincial interests), the result is insufficient to constitute an acquisition of a benefit by the respondent.

[169] With respect, the board does not agree with this assertion. As covenantee under section 219 of the Land Title Act, the respondent does acquire a right of enforcement of the restrictions imposed through the charge registered against title even though the covenant is not annexed to land owned by the covenantee. In this sense, at least, the board fails to see how the Restrictive Covenant over the leave strip could not be regarded as conferring some corresponding interest on the respondent.

[170] Accordingly, in the board's view, there may be circumstances in which, assuming there has been a deprivation of the claimants' property interest amounting to a de facto taking, the respondent might be said to have correspondingly acquired the interest. However, in this instance, the method by which the leave strip is to be protected is simply unknown. Therefore, it is not possible to make such a determination.

5.3.3  Does the Respondent's Role Make It Liable to Compensate?

[171] Assuming that there may be some scenarios in which the imposition of a leave strip on the lots would satisfy the requirements for finding a de facto expropriation, the board now considers the responsibility of the three levels of government in the regulatory regime and, in particular, whether the respondent's role in the process renders it liable to compensate the claimants.

[172] The claimants, on the one hand, allege a "partnership" between the respondent and the DFO but construe Surrey's role as being merely that of an "agent" for the other two levels of government. The respondent, on the other hand, stresses that while the three levels of government work closely and co-operatively together, the final decisions on habitat protection including the imposition or relaxation of leave strips and the requirement for compensatory works rests with the DFO.

[173] In order to determine the potential liability of the respondent in these circumstances, it is necessary to consider the evidence concerning the development of the Guidelines, the respective responsibilities of the three levels of government, and the process of imposition and relaxation of leave strips within fisheries sensitive zones.

[174] It is clear to the board that the development of the Guidelines has been a co-operative effort between the DFO and the respondent over many years. The evidence, mostly of Mr. Reid of the DFO, was that a predecessor document to the current Guidelines was developed and published by the DFO and the respondent in 1978. The earlier document, he said, had the same purpose as the present one, that is, to provide guidelines for land development that would protect fish habitat and that would assist developers to avoid violations of the federal Fisheries Act.

[175] In 1989, a committee comprising representatives from the DFO and the respondent was formed with the objective of revising the 1978 document. An important reason for the review, Mr. Reid said, was to reflect more advanced scientific knowledge and studies with respect to fish habitat and its protection. The committee retained a consultant for this purpose. Funding for the project was provided by both the DFO and the respondent. The Guidelines were jointly published in 1992 by the DFO and the respondent.

[176] The role of local government in production of the Guidelines was evidently a minor one. Local government was not represented on the committee, although municipalities in the Lower Mainland region of British Columbia, including Surrey, were consulted during the development of the Guidelines in order to receive their feedback. Based on the correspondence from municipalities put in evidence at the hearing, their response was decidedly mixed.

[177] Be that as it may, Surrey's participation in the implementation of the Guidelines has been significant and its role in the process bears closer scrutiny. Reference has already been made to the Standard Letter which, on the evidence, Surrey provides to developers seeking approval of subdivision or rezoning of land within fisheries sensitive zones, although not necessarily to would-be applicants such as the claimants simply seeking building permits for their legal lots of record. There was conflicting evidence at the hearing as to how much independent input Surrey had into the creation of the Standard Letter in 1997. The board concludes that it was largely the product of the respondent and the DFO, in particular of Mr. Clark and Mr. Reid or their respective staff. Its object, as Mr. Clark put it, is to provide "one window shopping" for applicants proposing developments in Surrey that may affect a riparian corridor or fish habitat. If developers are prepared to abide by the terms of the Standard Letter, both Mr. Clark and Mr. Reid testified that there is no need for referral to their agencies. They indicated that, with increasing frequency, the matter remains with Surrey and they do not become involved.

[178] Surrey's development of a detailed fisheries watercourse classification map, through the use of a private consultant but with some input from staff in Mr. Clark's and Mr. Reid's offices, has evidently proven an invaluable reference tool in the identification of fisheries sensitive zones. In the present instance the map identified the area of the claimants' lots as falling within a zone adjacent to the Creek to which a riparian setback or leave strip should be applied. The map was referred to in a memorandum of agreement between Surrey, the respondent and the DFO concluded in August, 1997 which, however, did not relate to setbacks or variances under the Guidelines.

[179] According to the evidence of both Mr. Clark and Mr. Reid, planning and engineering staff from Surrey also participate together with staff from the DFO and the respondent in an environmental review committee which meets on a monthly basis to keep current on environmentally-related land use planning issues. The evidence was that applications for relaxation of leave strip requirements under the Guidelines or that pose other environmental concerns to the three levels of government are reviewed at such meetings.

[180] Notwithstanding Surrey's active part in the foregoing activities, the claimants characterize the municipality's role as being in the nature of an "agent". The thrust of that argument would appear to be directed at denying that the municipality itself could be raised to the level of a de facto taker. Surrey, the claimants say, merely enforces the Guidelines on behalf of the respondent and the DFO through issuance of the Standard Letter and by refusing building permits to those applicants not prepared to comply with "the expanding requirements of the two senior levels of government." They point, for example, to Mr. Reid's testimony that he was not aware of any circumstances where Surrey has "ignored our requirement", Mr. Clark's testimony that local government has no independent authority to enforce the Guidelines, and Mr. McKenzie's testimony that relaxations under the Guidelines are not within his authority as the issuer of building permits in Surrey. In light of such evidence, the claimants submit, the respondent's assertion that Surrey plays an independent role and exercises independent judgment on the issuance of building permits for construction within fisheries sensitive zones must be regarded as "simply false."

[181] On consideration of the evidence, the board does not find that the role of Surrey in the process is merely confined to that of an agent of the two senior levels of government. It plays, at the least, a consultative and advisory role. Furthermore, with respect to decisions regarding the issuance of building permits on lands in fisheries sensitive zones not requiring subdivision or rezoning, the board accepts that referrals under the Guidelines may not apply. However, it is also apparent to the board that the municipality's role is qualitatively different from the role of the respondent in the process relating to the application of the Guidelines.

[182] The real question before the board, of course, is whether the role of the respondent rises to that of a partnership with the DFO so as to render it liable if the imposition of a leave strip on the claimants' lots amounts to a de facto expropriation.

[183] The evidence on this question, resting largely on the testimony of both Mr. Clark and Mr. Reid, is that, on the one hand, there has been close co-operation between the two senior levels of government in setting the requirements for the protection of aquatic habitat and active involvement by the respondent in administering those requirements. Mr. Clark, as previously noted, testified as to the authority he exercises on behalf of the respondent over the terms and conditions which are imposed through the Restrictive Covenant on a leave strip. If the owner seeks a relaxation of, for example, the fencing requirements, the owner must apply to Mr. Clark's staff, who in turn will consider such requests. According to Mr. Clark, no other level of government is involved: "I am the only person who can approve a change in the covenant."

[184] On the other hand, the evidence is that the ultimate authority for nearly all decisions of consequence concerning the application of the Guidelines rests with the DFO. Mr. Reid was firm on the point. He testified that his staff review any application for a relaxation of the 15 metre setback. While the environmental review committee may discuss the application and the respondent may be consulted on the issue, Mr. Reid stated that the "variance setback is ultimately determined by DFO at the end of the day." Furthermore, where relaxations are permitted, mitigative measures and compensatory works will frequently be required. Although the forms of "habitat compensation" are typically negotiated between the owner, the respondent and the DFO, Mr. Reid pointed out that it is again the DFO which retains the final authority. The claimants did not challenge this evidence.

[185] Upon consideration of all of the evidence, the board concludes that, while the respondent's role in the process may come close to the line in some respects, in the final analysis it cannot be considered to rise to the level of a "partnership" with the DFO so as to render the respondent liable. The board has reached this conclusion primarily because of the undisputed fact that the final decision for relaxation of leave strips, mitigative measures and compensatory works rests with the DFO. The DFO essentially drives the process relating to the imposition of leave strips in fisheries sensitive zones.

[186] In so deciding, the board feels compelled to observe that owners of land in fisheries sensitive zones, caught up in what claimants' counsel called a "mishmash of guidelines, private agreements and policy directives", may be forgiven for questioning the fairness of the bureaucratic process or considering themselves arbitrarily deprived of important attributes of property ownership. The evidence received in this matter points to a lack of clear regulatory authority for many of the restrictions and controls put in place. The Guidelines, for example, do not have the status of a formal regulation or order in council, and the Standard Letter issued by Surrey, for all of its mandatory and directive features, rests on no municipal authorization that was put before the board. It was acknowledged by those witnesses who described the operation of the environmental review committee that there is no written agreement, no order in council, and no bylaw authorizing the creation of such a body or establishing its regulatory authority, if any. Similarly, no written agreement exists between the respondent, the DFO and Surrey establishing the criteria or procedure to be followed by Surrey in issuing or withholding building permits for lands situated within fisheries sensitive zones. In the board's view, these are matters which, in the interests of greater certainty and fairness, ought to be addressed by the three levels of government.

6.  SUMMARY

[187] The board has determined, in the first instance, that it lacks the jurisdiction to hear and determine the claimants' claim for compensation flowing from an alleged de facto expropriation under the sole authority of the federal Fisheries Act. However, if this initial determination is incorrrect and the board does have jurisdiction in the matter, the claimants' claim nevertheless must fail for three reasons.

[188] First, the board does not accept that the enactment of section 35 of the Fisheries Act is the "expropriating event". Section 35 allows for a regulatory regime and does not, in itself, constitute an expropriation. None of the processes under that regulatory regime or otherwise, which could provide the necessary evidentiary foundation for a claim of de facto expropriation, has yet been formally engaged and the claimants' claim is therefore premature and hypothetical.

[189] Second, even if it is assumed that restrictions will be imposed on the claimants' lots through the creation of a leave strip or no touch zone, the claimants have not proven that such restrictions would amount to a de facto expropriation. The board is unable to conclude that either of the two elements required in order to find a de facto expropriation would be present. The claimants have not met the onus of proof which they bear showing that the potential imposition of the leave strip on their lots would result in an extinguishment of all reasonable private uses of the affected land. Neither have they shown that, assuming there has been a deprivation of their property interest amounting to a de facto taking, the respondent would correspondingly acquire that property interest.

[190] Third, if under some scenario the imposition and protection of a leave strip on the claimants' lots could satisfy the requirements for de facto expropriation, the board nevertheless considers that the respondent's role in that regulatory process does not rise to the level of a "partnership" with the DFO so as to render the respondent liable to compensate the claimants for their loss.

[191] For all of the foregoing reasons, the claimants' claim before the board is dismissed.

7.  COSTS

[192] There remains the matter of costs. Since the board has found that it does not have jurisdiction over the claimants' claim, it follows that the board also does not have jurisdiction to award costs in the matter. Even if the board does have jurisdiction over the claim, it has determined that there has been no de facto expropriation. Therefore, section 45(3) of the Act, which entitles persons whose interest in land has been expropriated to their costs, has no application. There is no other statutory jurisdiction under which to base an award of costs, and accordingly, the board makes no such award.