July 5, 2000, E.C.B. No. 34/99/186 (70 L.C.R. 137)

Reasons for Decision

1. INTRODUCTION

[1] The Claimant, Vancouver Marina (1971) Ltd., has operated a marina at 8331 River Road, in Richmond, British Columbia since 1971. The Claimant operates its business on waterlots 6822 and 8698 that it sublets from Regent Holdings Ltd. ("Regent").

[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.

2. BACKGROUND

[4] The background facts are set out in the affidavit of John Norman Short, Vice-President and Operating Manager of the Claimant, filed on July 14, 1999 and the affidavit of David Twining filed by consent on October 28, 1999, after the hearing.

[5] The Claimant has conducted its marina business on waterlots that it leases from Regent pursuant to a series of renewable sub-leases. The current sub-lease (the "Regent/Claimant Lease") runs from February 1, 1990 to January 31, 2000 and is, at the Claimant's option, renewable for a further term of ten years to January 31, 2010. It should be noted that Regent is a part owner of the Claimant.

[6] Regent owns the lands and premises at 8331 River Road, Richmond, British Columbia and leases the waterlots which adjoin its land from the North Fraser Harbour Commission ("NFHC"), a body corporate established pursuant to the Harbour Commissions Act, R.S.C. 1999, c. H-1. The current waterlot lease between Regent and NFHC ("the NFHC/Regent Lease") runs from December 1, 1994 to November 30, 2004 and is, at Regent's option, renewable for a further term of five years to November 30, 2009.

[7] NFHC, in turn, leases the waterlots and other parcels of foreshore lands and lands covered by water from the Province of British Columbia, pursuant to a lease for a term of 30 years from January 1980 (the "Head Lease"). This Head Lease was not in evidence.

[8] The Province of British Columbia plans to build a new connector bridge to Sea Island in Richmond. In order to construct the new bridge, the Province requires a portion of waterlot 6822, which has been used by the Claimant's business (the "Waterlot"). On July 9, 1998 NFHC gave notice to Regent in the following terms:

The Province of British Columbia (the "Province") plans to construct a new connector bridge to Sea Island (the "Project"). … In order to proceed with the Project, the Province will require certain lands which are currently leased to you under the lease.

In accordance with section 7.01 of the lease, the North Fraser Harbour Commission (the "Commission") gives you notice that the lands identified by the bold black dash outline in the attached Schedule 1 (the "lands") are being resumed by the Commission.

In the notice NFHC required the Claimant to vacate the Waterlot by January 8, 1999. This was later extended to April 1, 1999. The Claimant did remove all of its trade goods and chattels from the designated area by April 1, 1999 in compliance with the notice.

[10] The Claimant's solicitor wrote a letter dated July 15, 1998 in reply to the notice. The Claimant filed its Form A on July 14, 1999.

[11] The Form A pleads that MoTH is responsible for the acquisition of the land for the bridge and is doing so as an "expropriating authority" in accordance with the statutory authority provided to it by the Highway Act, R.S.B.C. 1996, c. 188. The Claimant also pleads that the loss of the Waterlot will cause a loss in the annual income from the marina business of $70,000. The Claimant pleads that once construction of the new bridge commences sailboats will no longer have access to the marina and as a result the business must be converted to service motor boats. Furthermore, the marina needs to install some device or structure that will protect the marina from river-borne debris as construction of the bridge requires removal of one of the floats that is currently designed as a breakwater. In order to carry on business on the remainder of the waterlots, the Claimant pleads that the necessary reconfiguration will cost at least $500,000.

[12] In its Form B MoTH admits that it is responsible for assembling the land for the new bridge project, but pleads that there has been no expropriation. MoTH says that the Claimant is not an owner under the Act because the Regent/Claimant lease is not valid. In addition, MoTH denies that the Province has taken any actions under the Highway Act. Paragraphs 12 and 13 of the Form B say that the Province provided notice to NFHC with respect to the Waterlot pursuant to the Head Lease. MoTH also denies that there has been any injurious affection. As a result, MoTH pleads that the Claimant is not entitled to any compensation under the Act.

[13] NFHC was established pursuant to section 5 of the Harbour Commissions Act and sections 3 and 15 of the Harbour Commissions Act provide in part:

3 (1)	It is hereby declared that the objective of the national ports policy for Canada is to create a port system that
	(a)	is an effective instrument of support for the achievement of Canadian international trade objectives and of national, regional and local economic and social objectives;
	(b)	is efficient …
	(d)	provides harbour Commissions with a high degree of autonomy for the management and operation of the ports for which they are established, consistent with the responsibility of the Minister to ensure the integrity and efficiency of the national ports system and the optimum deployment of resources…

15 (1)

A Commission may administer and develop on behalf of Her Majesty in right of Canada or any province, or on behalf of any municipality adjoining the harbour, any property owned by Her Majesty in right of Canada or that province or owned by that municipality, as the case may be, within the limits of the harbour or in the immediate vicinity thereof.

Thus, NFHC is a Canada Crown corporation with statutory responsibility for managing the "port" and for administering and developing the harbour or any property in the immediate vicinity of the harbour on behalf of any one of the three levels of government.

3. ISSUES

[14] The issues in this hearing are as follows:

1)	Does the Claimant have a valid lease and is it therefore an owner under the Act?
2)	If the Regent/Claimant lease is valid, has there been an expropriation of the Claimant's interest in the Waterlot?
3)	If there has been no expropriation, does the Claimant satisfy the various tests for injurious affection with no land taken?

4. DISCUSSION

4.1 Is the Claimant an Owner?

[15] Section 1 of the Act defines owner as follows:

"owner", in relation to land, means
(a)	a person who has an estate, interest, right or title in or to the land including a person who holds a subsisting judgment or builders lien……or
(c)	a person who is in legal possession or occupation of land, other than a person who leases residential premises under an agreement that has a term of less than one year.

[16] MoTH submits that the Claimant is not an owner as it is not in legal possession of the Waterlot. Under the NFHC/Regent Lease, Regent is required to apply for NFHC's written consent prior to entering into a sub-lease. Regent entered into a sub-lease with the Claimant (the Regent/Claimant Lease) without written consent from NFHC. MoTH says that this breach renders the Regent/Claimant Lease invalid and as a result the Claimant is not a legal tenant of the Waterlot.

[17] MoTH points to paragraph 10.01 of the NFHC/Regent Lease which provides as follows:

10.01 The Tenant shall not assign this Lease or sublet the Lands in whole or in part or transfer or convey any of the privileges and rights hereby conferred, or any part thereof, or grant any right of occupancy, or charge or encumber any of the Improvements or its leasehold interest hereunder without the prior written consent of the Landlord, which consent may be arbitrarily withheld and which consent may if given, be subject to such terms and conditions as the Landlord may determine.

MoTH also points to paragraphs 8.02 and 12.01 of the NFHC/ Regent Lease which require, inter alia, compliance by Regent with the by-laws of the landlord. Paragraph 19(2) of the NFHC by-laws also stipulates that the holder of a lease from the Commission shall not assign, sublet or part with possession of land without the written consent of the Commissioners.

[18] The Claimant cites Mackusick v. Carmichael, [1917] 2 K.B. 581 in response to MoTH's submission. In Mackusick, the Court held that where a lessee, who has covenanted that he will not sub-let without the consent of the lessor, nonetheless does sublet, and if the sub-lessee further sub-lets without his consent, the landlord cannot complain of such further sub-letting as a breach of covenant by the sub-lessee. A sub-lessee is not, for that purpose, an assign. While the facts of Mackusick are not directly on point, the Court arrives at its conclusion on the basis that there is no privity of contract between the Head lessor and the sub-lessee.

[19] It is clear from the Short affidavit and the Twining affidavit that NFHC had actual notice of the Regent/Claimant Lease. It authorized aspects of the Claimant's operation and accepted rent payments required under the NFHC/Regent Lease directly from the Claimant.

[20] It is true that Regent failed to obtain NFHC's formal written consent to the sub-lease to the Claimant. This failure could give rise to a claim by NFHC against Regent for breach of contract or other remedy. However, NFHC may well be met with a successful defence of acquiescence or estoppel because it has had actual notice of the Regent/Claimant Lease and has apparently acquiesced in the arrangement for a period of twenty-eight years. The Province, which does not have privity of contract with either Regent or the Claimant, cannot be in a better position than NFHC with respect to the Claimant.

[21] In these circumstances, we cannot accept MoTH's submission that Regent's failure to obtain written consent from NFHC makes the Regent/Claimant Lease invalid. In our opinion, at a minimum, the Claimant is in legal possession of the land. We find that the Claimant is an owner under subsection (c) of the definition in the Act.

4.2 Has there been an expropriation of the waterlot interest?

4.2.1 Claimant's position

[22] Having determined that the Claimant is an owner of the Waterlot, the board must now consider whether it has been expropriated. The definition of "expropriate" in section 1 of the Act is:

"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;

[23] The Claimant says that the acquisition of the Waterlot for a bridge is a taking. It referred us to the definition of "taking" in Black's Law Dictionary, 6th Edition, p. 1454 which states:

There is a "taking" of property when government action directly interferes or substantially disturbs the owner's use and enjoyment of the property ….To constitute a taking, within constitutional limitation, it is not essential that there be physical seizure or appropriation, and any actual or material interference with private property rights constitutes taking…..

The Claimant says that at no time has it consented to the taking of the Waterlot by MoTH. It also submits that MoTH is an expropriating authority that could only have acquired the Waterlot for the bridge under the provisions of the Highway Act, which explicitly stipulates that the Expropriation Act applies. Finally, the Claimant relies on Skillion PLC v. Keltec Industrial Research Ltd., [1992] 1 E.G.L.R.123 (Ch.D.) and Manitoba Fisheries Ltd. v. Her Majesty the Queen, [1979] 1 S.C.R. 101.

4.2.2 MoTH's position

[24] MoTH, on the other hand, says that there has been no expropriation within the meaning of the Act. It points out that NFHC gave notice to Regent pursuant to paragraph 7.01 of the NFHC/Regent Lease which provides as follows:

7.01	If the Lands or any portion thereof shall in the opinion of the Landlord [defined as NFHC] be required for government or public purposes, possession of the same may at any time during the Term or any renewal thereof be resumed by the Landlord upon Ninety (90) days notice in writing by the Landlord to the Tenant [defined as Regent] in which event the Landlord shall pay to the Tenant the fair value of the Fixed Improvements on the portion of the Lands resumed as at the time of the giving of such notice. The fair value of those Fixed Improvements shall in no case exceed the initial cost thereof to the Tenant, depreciated for the period which shall have elapsed between the installation of those Fixed Improvements and the date of resumption of the Lands (or a portion thereof) by the Landlord, on the basis of an assumed rate of depreciation on a straight line basis to zero over the shortest of:
	(i)	the normal life of those Fixed Improvements;
	(ii)	the term of the Lease remaining unexpired at the date of installation of those Fixed Improvements; or
	(iii)	10 years;
	less any residual or salvage value to the Tenant and less any encumbrances on those Fixed Improvements. Any dispute regarding the designation of an Improvement as a Fixed Improvement or the value of a Fixed Improvement shall be resolved pursuant to the provisions of Section 20.01. (emphasis added)

[25] Although MoTH does not claim that this case involves an easement or a right of way, it also points to paragraph 15.05 of the NFHC/Regent Lease. This paragraph provides that NFHC and the Province reserve the right to grant easements or rights of way across any portion of the leased land and if this right of way unreasonably interferes with the tenant's rights or improvements, compensation shall be set at the sole discretion of NFHC whose decision as to compensation shall be final.

[26] MoTH relies on two Alberta decisions in support of its submission that there has been no expropriation: Minute Muffler Installations Ltd. et al. v. Minister of Housing and Public Works (No 3) (1984), 30 L.C.R. 125 (Alta. C. A.) and Re City of Calgary and Richmond Service Ltd. (1982), 27 L.C.R. 94, a decision of the Land Compensation Board of Alberta.

4.2.3 Analysis

[27] The facts which underlie this claim developed at two levels. We find it helpful to reflect this in our analysis of whether there has been an expropriation. Accordingly we will examine:

A	the acquisition of the Waterlot by the Province or MoTH from NFHC;
B	the acquisition of the Waterlot by NFHC from the Claimant.

[28] We will deal first with the acquisition of the Waterlot by MoTH from NFHC. The definition of expropriation requires a number of elements, whether the action has occurred under the formal procedures under the Act or whether it is an indirect taking.

  i  under an enactment

[29] One requirement is that a taking of property must be "under an enactment". Section 1 of the Interpretation Act, R.S.B.C. 1996, c. 238 defines "enactment" as an Act [of the Legislature] or a regulation or a portion of an Act or regulation. The Claimant has plead that MoTH must have taken the Waterlot from NFHC pursuant to its expropriating authority under the Highway Act. However, there was no evidence before us that this was the case. MoTH has plead that the Waterlot was acquired under the provisions of the Head Lease. We do not have that Head Lease in evidence. Nor do we have any evidence of the procedures by which MoTH acquired the Waterlot from NFHC. Therefore, we have no evidence at all as to how the Province acquired the Waterlot and cannot say whether or not the acquisition was under an enactment.

 ii  a taking of property

[30] Another requirement is that there be a taking of property. There is no question that MoTH has acquired the Waterlot. However, E.C.E. Todd in The Law of Expropriation and Compensation in Canada, 2nd ed. (Carswell Co. Ltd., Toronto, 1992) distinguishes the concept of taking of property in an expropriation from other legal concepts of taking. 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.

In this case, because we have no evidence, we do not know whether MoTH acquired the Waterlot from NFHC by a taking that is an expropriation or by a taking that may be a resumption.

iii  without the consent of the owner

[31] The Waterlot is part of the Fraser River and is owned by the Province which has a Head Lease with NFHC. NFHC has a statutory duty to administer the public land in and around the harbour for the different levels of government. It is not clear to us whether NFHC's relations with the Province with respect to the Waterlot are governed solely by the Head Lease or whether they are also governed by the Harbour Commissions Act. We do not have any evidence as to whether NFHC consented to the acquisition by MoTH.

[32] In summary, because there is no evidence on how the Province acquired the Waterlot from NFHC we are unable to find either that there has been an expropriation by MoTH or that an expropriation by MoTH has been excluded.

[33] We will now turn to the acquisition of the Waterlot by NFHC from the Claimant and consider again the requirements for an expropriation by MoTH.

  i  under an enactment

[34] There is no evidence that the acquisition of the Waterlot by NFHC from the Claimant was under any enactment.

 ii  a taking of property

[35] NFHC has acquired the Waterlot from the Claimant. However, as indicated at paragraph 30, property may be acquired by other means than expropriation. In this case, NFHC's letter of July 9, 1998 states that the Province required the land for a bridge and that in accordance with paragraph 7.01 of the NFHC/Regent Lease, NFHC gave notice that it was resuming the designated part of the land. Paragraph 7.01 of the NFHC/Regent Lease permitted NFHC to resume the waterlot at any time if in NFHC's opinion the land was "required for government or public purposes". The Province requiring the land for a bridge was a government or public purpose. The notice requirement in paragraph 7.01 appears to have been met. All the conditions for a resumption or a taking under the NFHC/Regent Lease appear to have been satisfied.

iii  without the consent of the owner

[36] The Claimant says it did not consent to this taking back of the Waterlot. However, the Claimant did enter into a sub-lease with Regent that is subject to Regent's lease with NFHC. As indicated above, the NFHC/Regent Lease permitted NFHC to resume the waterlot at any time if in NFHC's opinion the land was required for government or public purposes. Thus, the Claimant consented to the taking by NFHC as set out in the lease. Whether the Claimant consented to the Province's acquisition of the Waterlot from NFHC is a separate question.

[37] We find that NFHC's acquisition of the Waterlot from the Claimant was pursuant to the NFHC/Regent Lease and was not an expropriation. However, depending on the precise circumstances of the acquisition of the waterlot by MoTH from NFHC, a point on which there is a gap in the evidence before us, the Claimant's interest in the Waterlot may have been expropriated by MoTH and the Claimant may be entitled to compensation.

[38] MoTH's position was that if the acquisition of the Waterlot from the Claimant was under the NFHC/Regent Lease, then Minute Muffler and Re City of Calgary were authority for precluding the Claimant from any compensation for any expropriation. In Minute Muffler the government of Alberta expropriated the fee simple of certain lands. On the date of expropriation, Minute Muffler was a tenant of the lands and there was an unexpired term of the tenancy. A clause in the lease, however, provided:

In the event that the premises are expropriated, or sold, this lease shall be cancelled without further recourse by either party.

Kerans, J.A., delivering the judgment of the Court of Appeal, stated at p. 125:

The Land Compensation Board refused to take up the case, saying that there can be no expropriation unless the formalities in the Expropriation Act, R.S.A. 1980, c. E-16 are complied with. We hesitate to agree with this proposition. Those formalities are there for the benefit of the citizen, not a malefacting government.

However, we need not deal with the issue because, in view of the term of the lease, the appellant had already ceased to have any interest in the lands before the supposed de facto expropriation occurred, and any subsequent disruption came as a consequence of the termination of the lease, which in turn came as a consequence of the expropriation of the fee simple. We therefore agree with the dismissal of the claim by the Land Compensation Board, but on the ground that no loss was suffered.

[39] In our view this decision relies on the particular wording in the lease that provided for it to be cancelled in the event of an expropriation. This is to be distinguished from the present case where the lease provides for the right of the landlord to "resume" all or part of the land in certain circumstances. Furthermore, this decision is not binding upon the board and we do not believe that a full consideration of the conclusion of the Alberta Court of Appeal or its broader implications should be undertaken in the absence of evidence before us as to how MoTH acquired the Waterlot from NFHC.

[40] MoTH also relied on the case of Re City of Calgary. In this case, Calgary, instead of proceeding by way of expropriation, negotiated with the claimant's landlord for the purchase of the lands. The landlord notified the claimant that it would not renew the lease at the end of the term. The claimant was advised by the landlord that the reason for not renewing the lease was that the City required the land for road construction purposes. The Alberta Land Compensation Board relied on its own earlier decision in Minute Muffler which turned on the fact that the formal expropriation procedures had not been followed, and found that the City had not expropriated any interest of the claimant in the lands. This reasoning was rejected by the Alberta Court of Appeal in Minute Muffler and we do not find it of any assistance in this case.

[41] The Claimant urged us to find its situation similar to that of the appellant company in Manitoba Fisheries Ltd. v. Her Majesty the Queen. In that case a company had its business of exporting fish from Manitoba shut down when the Freshwater Fish Marketing Act, R.S.C. 1970, c. F-13 created a Crown corporation with a commercial monopoly for the export of fish from participating provinces. The Crown took the position that while the effect of the legislation was to extinguish the appellant's goodwill, nevertheless, the goodwill was not "taken away" by the Crown or the newly created Crown corporation. In delivering the judgment of the Court, Ritchie J. stated at p. 118:

It will be seen that in my opinion the Freshwater Fish Marketing Act and the Corporation created thereunder had the effect of depriving the appellant of its goodwill as a going concern and consequently rendering its physical assets virtually useless and that the goodwill so taken away constitutes property of the appellant for the loss of which no compensation whatever has been paid. There is nothing in the Act providing for the taking of such property by the Government without compensation and as I find that there was such a taking, it follows, in my view, that it was unauthorized having regard to the recognized rule that "unless the words of the statute clearly so demand a statute is not to be construed so as to take away the property of a subject without compensation" per Lord Atkinson in Attorney-General v. De Keyser's Royal Hotel.

This case supports the presumption of statutory intent to compensate where there has been a "taking" of property, even if the taking is indirect. However, 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), and without the consent of the owner. There was also no issue of the effect of an agreement with the claimant that contemplated a taking for public purposes. In our view, we do not have sufficient, or sufficiently similar facts before us at this time to apply the reasoning in Manitoba Fisheries.

[42] The Claimant also asked us to consider the case of Skillion PLC v. Keltec Industrial Research that involved the interpretation of the words "mechanical devices" in a lease. At p. 126, Knox J. said:

The contra proferentem rule does not mean that one has to decide the case, if one possibly can, against the landlord's interest in every particular circumstance. The contra proferentem rule is that in approaching the construction of a clause, in this case in a lease, one construes the clause in its context against the interest of the person who put it forward and had it included in the lease.

As a result, the interpretation of the words "mechanical devices" was given a wider rather than a narrower construction, so that the tenant's permitted activities under the lease were greater.

[43] In the present case, MoTH is not a party to the NFHC/Regent Lease. In such a situation the contra proferentem rule would not normally operate. However, there is a Head Lease to which the Province is a party. It is conceivable that the Province put forward some wording that appears in the NFHC/Regent Lease. The possibility that NFHC may have been administering the Waterlot for the different levels of government under the Harbour Commissions Act may also be relevant to the applicability of the contra proferentem rule to a clause of the NFHC/Regent Lease which the Claimant says is ambiguous. The board is unable to resolve the contra proferentum issue raised by the Claimant on the factual record that is before us on these applications.

4.2.4 Conclusion

[44] NFHC has exercised its rights under the NFHC/Regent Lease to resume the Waterlot required for government or public purposes. The Claimant agreed to this taking by NFHC when it entered into the Regent/Claimant Lease which contained this right of resumption. We find that NHFC's exercise of this right was not an expropriation. While the Claimant's lands have been resumed by NFHC pursuant to the NFHC/Regent Lease we have no evidence with respect to the Province's acquisition of the Waterlot from NFHC. We are therefore unable to find either an expropriation by MoTH or an exclusion of an expropriation by MoTH.

4.3 Has there been injurious affection with no land taken?

4.3.1 Statutory basis

[45] In the alternative, we were asked to find that the Claimant is entitled to compensation for "injurious affection" with no land taken within the meaning of section 41 of the Act:

Injurious affection if no land taken

41 (1)

In this section, "injurious affection" means injurious affection caused by an expropriating authority in respect of a work or project for which the expropriating authority had the power to expropriate land.

(2)

The repeal of the Expropriation Act, R.S.B.C. 1979, c. 117, and the amendments and repeals in sections 56 to 128 of the Expropriation Act, S.B.C. 1987, c. 23, are deemed not to change the law respecting injurious affection if no land of an owner is expropriated, and an owner whose land is not taken or acquired is, despite those amendments or repeals, entitled to compensation to the same extent, if any, that the owner would have been entitled to had those enactments not been amended or repealed.

[46] The first consideration is whether the circumstances in this case fit within the wording of the section. Section 41 sets out the prerequisites for an owner to claim compensation for injurious affection with no land taken. The Claimant alleges potential damages, some of which may be caused by NFHC in requiring the Claimant to vacate the Waterlot. But some of the Claimant's alleged damages may also be injurious affection caused by MoTH when it constructs the bridge. MoTH is an expropriating authority with the power to expropriate land. However, in subsection 41(2) it is only an owner "whose land is not taken or acquired" who is potentially entitled to compensation under this section. In this case the Claimant has had land taken back or resumed under a lease. While there may be disagreement as to how the word "taken" ought to be interpreted, in our view there is some difficulty with the Claimant making a claim for injurious affection under section 41 when it has incurred a taking under a lease.

[47] Be that as it may, this board has previously considered whether there was a statutory basis for a claim for injurious affection with no land taken when the project is for a road or bridge constructed by MoTH. See Warlow and Foste v. MoTH (1997), 60 L.C.R. 218 (B.C.E.C.B.). On the basis of the decision in Re Ministry of Transportation and Highways Act (1982), 38 B.C.L.R. 370 (S.C.), the board in Warlow concluded that there was no provision for compensation for injurious affection with no land taken under the legislation in effect when the present Act came into effect in 1987, namely, the Highway Act, R.S.B.C. 1979, c. 167 and the Ministry of Transportation and Highways Act, R.S.B.C. 1979, c. 280. In Tener v. The Queen in Right of British Columbia (1982), 24 L.C.R. 266 (B.C.C.A.), Lambert J.A., speaking for the majority, considered certain provisions of the Ministry of Highways and Public Works Act, R.S.B.C. 1960, c. 109 and concluded in obiter dicta, that the provisions contemplated compensation for injurious affection with no land taken. The Supreme Court of Canada decided Tener on different grounds (32 L.C.R. 340) but did not reject Lambert J.A.'s interpretation of the statutory provisions. In Re Ministry of Transportation and Highways Act (1982), Lambert J.A.'s interpretation of one of the equivalent statutory provisions was considered and specifically rejected. In view of the differing judicial interpretations of the statutory provisions, we consider the decision in Re Ministry of Transportation and Highways Act (1982) a troubling one, and believe a further appellate ruling on the issue would be desirable. However, we can identify no grounds for distinguishing the Re Ministry of Transportation and Highways Act (1982) decision from the present case. We believe the board in Warlow was required to follow the binding authority of this Supreme Court decision and we do the same.

[48] The board concludes that the Claimant does not have a statutory basis to advance a claim in respect of the new bridge project under section 41 of the Act.

4.3.2 Common Law tests for injurious affection

[49] As a result of our finding that the Claimant does not have a statutory basis for bringing a claim for injurious affection with no land taken, the board does not have to consider whether the Claimant meets the four common law tests for injurious affection set out by the Supreme Court of Canada in R. v. Loiselle, [1962] S.C. R. 624, at p. 627.

[50] However, we would note that in the board's opinion the Claimant would face the greatest difficulty in meeting the third test, the "Nature of the Damage Rule". It is established law that for a claimant to be entitled to compensation for injurious affection where no land has been taken, the damage must be an injury to the land itself and not a personal injury or an injury to business or trade. In the present case, the claims in the Form A relate in part to loss of business income that is not compensable under this Rule. The Claimant would be entitled to damages only to the extent that it could show a diminution in the market value of the remaining waterlot interest as a result of the construction of the new bridge.

5. SUMMARY

[51] The Claimant has applied for a determination that a portion of its leasehold interest in waterlot 6822 has been expropriated or alternatively injuriously affected. We have found that the Claimant is an owner, but it has not provided us with sufficient evidence to establish that there has been an expropriation. We have concluded that there is no statutory basis for a claim for injurious affection with no land taken. The Claimant's applications are therefore dismissed.

[52] MoTH has requested a determination that the board lacks jurisdiction to consider the claims set out in the Form A. MoTH has not provided us with sufficient evidence to exclude an expropriation and therefore we deny this application. MoTH has also applied for an order that the Claimant's Form A be struck under Rule 19(24) of the Rules of Court. The test for the applicability of this rule is to assume that the facts set out in the pleadings are true. On its face the Form A pleads that there has been an expropriation. If we assume that this can be proved there is no basis for striking the Form A under Rule 19(24). As a result this application is also denied.

[53] In summary, both parties' applications are denied and the Form A stands. The lack of evidence on how the Province acquired the Waterlot from NFHC was critical to this result. This matter may be set down, on further evidence, for a hearing on the issue of whether the Claimant's interest in the Waterlot was expropriated by MoTH or, in the alternative, whether an expropriation of the Claimant's interest has been excluded.