March 28, 2001, ECB Control No.: 34/99/205 (72 L.C.R. 245)

* Susan Ross's appointment on the board expired in July 2000. She continued as a member of the panel and fully participated in the reasons for decision pursuant to section 53(7) of the Expropriation Act, R.S.B.C. 1996, c. 125.

REASONS FOR DECISION

1.  INTRODUCTION

[1] This is the second application in this matter as to whether the Claimant, Vancouver Marina (1971) Ltd., has had its interest in a waterlot expropriated. Our earlier decision in this matter, dated July 5, 2000, at 70 L.C.R. 137, dismissed both the Claimant's and the Respondent's applications on this issue, with leave to bring a second application upon further evidence. Further evidence has been filed and both parties have renewed their prior applications.

[2] The Claimant brings an application for:

i	a determination that a portion of its leasehold interest in waterlot 6822 has been expropriated or, alternatively, injuriously affected by the Respondent Her Majesty the Queen as represented by the Minister of Transportation and Highways ("MoTH");
ii	an order that the Claimant is entitled to compensation in accordance with the provisions of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act").

[3] The Respondent, MoTH, also brings an application. It seeks an order under Rule 19(24) of the Rules of Court that the Claimant's Form A be struck and dismissed as disclosing no claim under the Act or, alternatively, that the board make a determination that it lacks jurisdiction under the Act to consider the claims set out in the Form A.

[4] The Claimant sublets its interest in waterlot 6822 from Regent Holdings Ltd., which in turn sub-leases the waterlot from the North Fraser Harbour Commission ("NFHC"). NFHC holds the waterlot subject to a Head Lease between the Province of British Columbia and NFHC. In the earlier application we determined that NFHC's acquisition of the waterlot from the Claimant was pursuant to the NFHC/Regent Lease and was not an expropriation. However, we were unable to decide how MoTH had acquired the waterlot from NFHC because the Head Lease was not in evidence. The reader is directed to the earlier decision for background information on this claim.

[5] We now have the Head Lease between the Province of British Columbia and NFHC for the waterlot used by the Claimant for its marina business. It provides at paragraph 12:

12.

That should the Province from time to time require any Crown lands for Government purposes or for other purposes in the public interest, and upon the Province formally notifying the Corporation to that effect by registered mail, such areas shall thereafter be excluded from this Agreement and shall be dealt with by the Province in accordance with the provisions of the "Land Act" or other statutes of the Province;

There was also evidence that MoTH had decided that it needed the waterlot for the construction of a bridge and accordingly the Province, as represented by the Minister of Environment, Lands and Parks, (now Minister of Lands, Parks and Housing) provided notice to NFHC in accordance with the above provision on July 6, 1998.

[6] The issue in this application was how MoTH acquired the waterlot from NFHC. Depending on how MoTH acquired the waterlot, the Claimant, as a sub-lessee, may be entitled to compensation for the expropriation of its interest. If there was no expropriation of the Claimant's interest in the waterlot then the board has no jurisdiction since it previously decided that there is no statutory basis for a claim of injurious affection under section 41.

2.  LEGISLATIVE FRAMEWORK

[7] The relevant statutory provisions of the Act are:

1	"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;
2 (2)	This Act does not apply in respect of …
	(c)	a right exercisable, without payment of compensation, under an exception or reservation to which the title to land is subject,

Section 50(1) and (4) of the Land Act, R.S.B.C. 1996, c. 245 (formerly section 47(1) and (4) of the Land Act, R.S.B.C. 1979, c. 214.) provides:

50 (1)	A disposition of Crown land under this or another Act
	(a)	excepts and reserves the following interests, rights, privileges and titles:
		(i)	a right in the government, or any person acting for it, to resume any part of the land that is deemed to be necessary by the government for making roads, canals, bridges or other public works, but not more than 1/20 part of the whole of the land, and no resumption may be made of any land on which a building has been erected, or that may be in use as a garden or otherwise;
	…
(4)	A disposition of Crown land may, by express words, except or reserve to the government rights and privileges more extensive than those referred to in subsection (1).

Section 9 of the Ministry of Lands, Parks and Housing Act, R.S.B.C. 1996, c. 307 (formerly section 9 of the Ministry of Lands, Parks and Housing Act, R.S.B.C. 1979. c. 277) provides:

9 (1)	Despite the Land Act, but subject to section 50 (1) of that Act, the minister may do any of the following, on terms and conditions the minister considers appropriate:
	(a)	dispose of Crown land;
	(b)	establish procedures regulating the disposition of Crown land;
	(c)	provide in an agreement for the disposition of Crown land, and for payment of the purchase price and any other money in full or by installments secured to the satisfaction of the minister;
	(d)	direct to what extent a procedure established under this Act is to affect an application pending under the Land Act.

3.  CLAIMANT'S POSITION

[8] The Claimant's position is that, notwithstanding the evidence of the Head Lease, MoTH acquired the waterlot by expropriation. MoTH is an expropriating authority, and there has been a taking of the waterlot by MoTH. Although MoTH used the provisions of the Head Lease to acquire the waterlot it was nonetheless operating under the Highway Act, R.S.B.C. 1996, c. 188 and the Ministry of Transportation and Highways Act, R.S.B.C. 1996, c. 311. MoTH acknowledged in its pleadings that it was acting under the authority of these two Acts in the construction of the bridge. In Moser v. The Queen (1981), 24 L.C.R. 226 (B.C.S.C.) the court held that the Province's resumption of land for a roadway under the original Crown grant was nonetheless carried out pursuant to the Highway Act and the Crown's action was therefore reviewable under the Judicial Review Procedure Act, R.S.B.C. 1979, c. 209.

[9] Finally, the Claimant disputed that it had consented to the taking without appropriate compensation. Neither the Head Lease nor the NFHC/Regent lease expressly excluded full compensation. The Claimant drew our attention to section 50(1) and (4) of the Land Act and section 9 of the Ministry of Lands, Parks and Housing Act. The Claimant says that section 50(4) of the Land Act does not apply in the present case because it requires "express words" for the reservation of more extensive rights. The Claimant maintains that paragraph 12 of the Head Lease was too imprecise to qualify as "express words" under section 50(4). Reference was made again to Manitoba Fisheries Ltd. v. Her Majesty the Queen, [1979] 1 S.C.R. 101 as authority for the proposition that a statute should not be interpreted so as to take away property without compensation. In addition, the Claimant says that section 50(4) cannot be invoked because section 9 of the Ministry of Lands, Parks and Housing Act is specifically subject only to section 50(1) of the Land Act. The Claimant goes on to claim that the acquisition is not a valid taking under section 50(1) of the Land Act (or section 9 of the Ministry of Lands, Parks and Housing Act) because the portion of the waterlot that was acquired is greater than 1/20th and also because the waterlot was "in use" at the time of the acquisition.

4.  MoTH's POSITION

[10] MoTH says that the waterlot was acquired by the Province under the Head Lease and not by expropriation. The waterlot was acquired by resumption, which is to be distinguished from a taking that is an expropriation entitling the owner to compensation. The waterlot was acquired through the provisions of the Head Lease and not as a result of an enactment. In addition, the Claimant consented to the taking because it was bound by the terms of the Head Lease when it entered into its sub-lease with Regent.

[11] In its further submissions MoTH says that section 50(4) of the Land Act applies: paragraph 12 of the Head Lease expressly includes the right of the Province to exclude land from the Head Lease if it is needed for government purposes or purposes in the public interest. The acquisition is a resumption and not an expropriation so that no compensation is payable. It does not matter that the leases do not expressly exclude compensation. Section 50(4) and section 2(2)(c) of the Act read together exclude this acquisition from being an expropriation.

5.  DISCUSSION

5.1 Resumption

[12] In the previous decision we distinguished between a resumption of land by the Crown for which no compensation is payable and an expropriation. We now have clear evidence that the waterlot was acquired by MoTH under the provisions of the Head Lease. The Head Lease made a disposition of Crown land by the Province to NFHC. Under paragraph 12 of the Head Lease the Province clearly reserved the right to exclude "any Crown land" from the Head Lease from time to time, if the land was required "for Government purposes". The waterlot was required for the construction of a bridge, which is a government purpose. Formal notice was provided to NFHC that a certain portion of the waterlot was required and would henceforth be excluded from the Head Lease as prescribed in paragraph 12 of that lease.

[13] It is true that the word "resume" itself is not used in paragraph 12. However, in our opinion, paragraph 12 plainly fits within the concept of resumption, rather than expropriation. We refer again to E.C.E. Todd in The Law of Expropriation and Compensation in Canada, 2nd ed. (Carswell Co. Ltd, Toronto, 1992) where at p. 21 he distinguishes the concept of resumption from expropriation as follows:

In making an original grant of land the Crown may have reserved the right to take back or "resume" the land, or some part of it, for certain purposes, such as road making. … A public authority may acquire land subject to rights reserved in the grantor upon the land until such time as it is needed for public purposes. When the authority subsequently assumes the land for such purposes it is not "acquiring" land within the meaning of expropriation legislation so as to found a claim for compensation or damages. If anything is acquired it is with the consent of the owner by virtue of the terms of the reservation in the grant.

See also Roux v. County of Peel (1973), 5 L.C.R. 90 (Ont. C.A.). The characteristics of a resumption that are set out in this passage, such as the Crown disposing of Crown land and the document making that disposition containing a reservation of a right to take back or resume Crown land if it is later needed for public purposes, are present in the current case. The Claimant entered into a lease that was subject to this reservation in the Head Lease and therefore, in effect, consented to the Crown taking back or excluding any Crown land from the Head Lease that was required for government purposes at some later time.

[14] The fact that one or two elements of an expropriation may be present are not sufficient to turn it into an expropriation when other requirements are missing. The Claimant relies on Moser as authority that even if an acquisition occurs by resumption it nonetheless occurs under an enactment. In Moser the court held that a taking of land by resumption under the original Crown grant was also done pursuant to the Highway Act. Thus, the Crown's efforts to forestall a judicial review of the resumption (under the Judicial Review Procedure Act, R.S.B.C. 1979, c. 209) on the grounds that it did not concern an exercise of a statutory power was rejected. However, Hinds J stated at p 232 "I recognize that there is a distinction between a decision to resume and a decision to expropriate." Further, as this board has already noted in Armstrong v. British Columbia (Minister of Transportation and Highways) (1989), 42 L.C.R. 32 (B.C.E.C.B.), Hinds J went on to say at p 233 that for the land that was resumed (since it did not exceed the one twentieth of the total area that was expressly set out in the Crown grant), "no compensation is payable" (emphasis added). Therefore, the fact that the resumption of land in Moser was under an enactment did not make it an expropriation for which compensation is payable.

[15] Similarly, in the present case, the fact that MoTH is an expropriating authority and the Highway Act may have some application does not turn the acquisition into an expropriation. First, the acquisition of the waterlot was a taking back of Crown land effected under paragraph 12 of the Head Lease rather than under an expropriating power in the Highway Act or the Ministry of Transportation and Highways Act. Second, one of the requirements contained in the definition of expropriation in section 1 of the Act is that it is a taking of land "without the consent of the owner". In this case, as we have indicated, the Claimant has effectively consented to the Crown's taking back of Crown land through the reservation in the Head Lease and therefore that requirement is missing. When the taking back of the land is a resumption by the Crown rather than an expropriation, then it follows that no compensation is payable. This is entirely consistent with Moser.

5.2 Exclusion under section 50 of the Land Act

[16] The definition of expropriate in section 1 of the Act specifically excludes the exercise by the government of any right under section 50 of the Land Act. Therefore, where the Crown resumes up to 1/20th of the Crown land that was granted to another party under section 50(1) of the Land Act, it cannot be an expropriation. Similarly where the Crown has disposed of land and expressly reserved unto itself rights more extensive than taking back up to 1/20th of the Crown land, this taking back of land under section 50(4) of the Land Act cannot be an expropriation.

[17] We reject the Claimant's submission that section 50(4) of the Land Act does not apply in the present circumstances. The Head Lease is a disposition of Crown land that specifically or expressly reserves to the government the right to exclude any Crown land from the Head Lease if at some time it is required for government purposes (emphasis added). In our opinion this reservation is "express" in that it clearly and explicitly and unmistakably provides that any of the Crown land under the Head Lease that is required for government purposes may be excluded thenceforth from the Head Lease. This reservation is more extensive than the right in section 50(1) of the Land Act for the government to resume up to 1/20th of the Crown land that was granted to another party if at some subsequent time it is required for public works. We conclude that the acquisition of the waterlot under the Head Lease is an exercise of a right referred to in section 50(4) of the Land Act and that as a result this acquisition is not an expropriation by definition.

[18] The Claimant pointed out that the word "resume" is not present in section 50(4) of the Land Act, although it is in section 50(1). Nor is the right to compensation expressly excluded under section 50(4). The Claimant invoked Manitoba Fisheries as authority for the presumption of statutory intent to compensate where there has been a "taking" of property, even if the taking is indirect. However, as we indicated in our earlier decision, the facts in Manitoba Fisheries can be distinguished. In Manitoba Fisheries all the elements of an expropriation were present: a taking of property by the federal Crown, under an enactment (the Freshwater Fish Marketing Act), without the consent of the owner. There was also no agreement with the claimant that reserved a right to take back or resume the property for public purposes. We do not think that the reasoning in Manitoba Fisheries is applicable to this case.

 5.3 Section 9 of the Ministry of Lands, Parks and Housing Act

[19] The Claimant drew our attention to section 9 of the Ministry of Lands, Parks and Housing Act. The formal notice for the acquisition of the waterlot under paragraph 12 of the Head Lease was provided by what is now the Minister of Lands, Parks and Housing. Section 9 provides that the Minister of Lands, Parks and Housing may dispose of Crown land on terms and conditions the minister considers appropriate "[d]espite the Land Act, but subject to section 50(1) of that Act". In other words, the Minister of Lands, Parks and Housing may dispose of Crown land, such as the waterlot, on terms and conditions the minister considers appropriate, such as the Head Lease, despite any restrictive provisions on the disposition of Crown land in the Land Act. The only qualifier is that any such disposition is subject to the right of the government to resume up to 1/20th part of the land that is not being used, which right need not be expressed (along with other rights in section 50(1)). In Westwood Plateau Ptsp. v. WSP Construction (1997), 37 B.C.L.R. (3d) 82 (S.C.), for example, the court held that a disposition of land under section 9 of the Ministry of Lands, Parks and Housing Act need not follow the procedural requirements set out in section 14 of the Land Act, since section 9 expressly says "despite the Land Act". In our view, being subject to section 50(1) does not mean that the terms and conditions under which the Minister disposes of the Crown land cannot provide for more extensive rights of reservation, as long as it does so with "express words". We therefore reject the Claimant's argument that paragraph 12 of the Head Lease does not fit within section 9 of the Ministry of Lands, Parks and Housing Act. Similarly, we do not accept the Claimant's submissions that a reservation of a right in a disposition of Crown land in the Head Lease cannot be under section 50(4) of the Land Act because section 9 of the Ministry of Lands, Parks and Housing Act is specifically subject only to section 50(1) of the Land Act.

5.4 Exclusion under section 2(2)(c) of the Expropriation Act

[20] Section 2(2)(c) of the Act excludes the application of the Act in those cases where land is taken (or injuriously affected) by "a right exercisable, without payment of compensation, under an exception or reservation to which the title to land is subject". The Claimant says that this section does not apply because neither the Head Lease nor the NFHC/Regent lease specifically excludes a tenant's right to compensation if the waterlot is taken back or resumed under the terms of the lease. There is no question that the acquisition of the waterlot under paragraph 12 of the Head Lease is a right under a reservation to which the title to land is subject. Therefore, the only issue in the applicability of section 2(2)(c) to the present case is whether paragraph 12 of the Head Lease provides a right without payment of compensation. As we have indicated above, the fact that this acquisition is a resumption rather than an expropriation means that no compensation is payable. In addition, we have decided that the acquisition of the waterlot occurred as a result of the exercise of a right referred to in section 50 of the Land Act. It is therefore excluded from the definition of expropriation. If it is not an expropriation (nor an injurious affection) there is no ability to claim for compensation. The lack of express exclusion of compensation in either lease is irrelevant. We determine that, as a result of section 2(2)(c) of the Act, the Expropriation Act does not apply to the present circumstances.

6.  CONCLUSION

[21] We have concluded that the acquisition of the waterlot by MoTH from NFHC was a resumption under the reservation contained in paragraph 12 of the Head Lease. In our opinion, the terms of reservation in paragraph 12 of the Head Lease fit under section 50(4) of the Land Act and therefore the acquisition pursuant to these terms is not an expropriation by definition. Paragraph 12 also fits under section 9 of the Ministry of Lands, Parks and Housing Act. In any event, because the acquisition is a resumption rather than an expropriation, then under section 2(2)(c) of the Act, the Expropriation Act is excluded. In these circumstances, there has been no expropriation of the Claimant's interest as a sub-lessee in the waterlot. Thus, we grant MoTH's application for a declaration that we have no jurisdiction to consider the claims set out in the Form A. The Claimant's applications are dismissed.

[22] Both parties requested costs as part of their applications. Section 45 of the Act provides:

45 (3)	Subject to subsection (4) to (6), a person whose interest or estate in land is expropriated is entitled to be paid costs necessarily incurred by the person for the purpose of asserting his or her claim for compensation or damages.
	…
(6)	On a claim under section 41(3), the board may award, in its discretion, costs to the claimant or the expropriation authority.

Because there has been no expropriation, we do not have jurisdiction to award the Claimant its costs under section 45(3). See Reimer v Surrey (1997), 62 L.C.R. 222 and Mischek v British Columbia (Ministry of Transportation and Highways), unreported, ECB# 36/98/196 January 10, 2001. We have also dismissed the Claimant's application under section 41(3) with respect to its remaining interest in the waterlot being injuriously affected. Under this section we do have discretion to award costs on this claim. Although MoTH has been successful in its application on this issue, costs do not necessarily follow the event in expropriation matters. See El & El Investments Ltd. v. School District No. 36 (Surrey) (1996), 60 L.C.R. 41 at 52. We note that there were greater costs than there might have been when MoTH (and the Claimant) failed to provide the Head Lease and ancillary documents in the first application. However, the Head Lease was not relevant to the claim under section 41(3). In the circumstances each side is to bear its own costs.