November 24, 2000, E.C.B. No. 41/00/191 (71 L.C.R. 185)

Between:Eugene Denault
Claimant
And:Winston Churchill Barclay
and Mary Dawson Barclay
Respondents
Before:Robert W. Shorthouse, Chair
Appearances: Appearances: E. Sigurd Ruud, Counsel For The Claimant
Thomas R. Humphries, Counsel For The Respondents

 

REASONS FOR DECISION

1.  APPLICATION

[1] The claimant, Eugene Deneault, is the registered owner in fee simple of a parcel of land located near Kaslo, British Columbia, the legal description of which is PID 014-216-701, Lot 1, District Lot 819, Kootenay District, Plan 6168 ("Lot 1"). The claimant is also the registered holder of two conditional water licences nos. 39288 and 39724 authorizing the diversion and use of water from a creek known as Curle Brook for domestic and irrigation purposes. The respondents, Winston Churchill Barclay and Mary Dawson Barclay, are the registered owners in fee simple of an adjacent parcel of land to the west of Lot 1, the legal description of which is PID 009-486-887, Lot A, District Lot 819, Kootenay District, Plan 15632 ("Lot A").

[2] In April, 2000, pursuant to section 27 of the Water Act, R.S.B.C. 1996, c. 483, and section 26 of the Water Regulation, B.C. Reg. 204/88, the claimant filed with the comptroller of water rights in Victoria and the registrar of land titles in Kamloops a notice of intent to acquire an interest in the respondents' land in the form of an easement, a plan showing the area to be acquired, a draft of the proposed instrument, and a statement of the amount of compensation offered. These documents were also served on the respondents.

[3] On July 18, 2000, pursuant to section 30 of the Water Regulation, the claimant filed an application for determination of compensation with the Expropriation Compensation Board, requesting that an order be made determining the following:

(a) the nature and terms of the conveyance or instrument required to give effect to the expropriating licensee's right under section 27 of the Water Act to expropriate the land reasonably required in accordance with that section; and

(b) the amount of compensation to be paid for the affected land.

[4] By notice of motion filed on November 2, 2000, the respondents have applied to the board for an order quashing the notice of intent to acquire an interest in land and the application for determination of compensation in this matter as being barred by the doctrine of res judicata. The respondents also seek an order for costs.

[5] The respondents' motion was heard by teleconference on the morning of November 8, 2000. I heard the application alone in my capacity as chair of the board and in exercising the powers and jurisdiction of the board under section 26(5) of the Expropriation Act, R.S.B.C. 1996, c. 125. The hearing lasted approximately two hours.

 

2.  THE ISSUE

[6] It is common ground that the claimant is a "licensee" for the purposes of the Water Act. Subsections 27(2) and (5) of the Water Act provide as follows:

27(2)A licensee has the right to expropriate any land reasonably required for the construction, maintenance, improvement or operation of works authorized under his or her licence.
(5)The owner of land expropriated under this section must be compensated for it by the licensee, and the procedure to be followed in expropriating land and the method of determining the compensation is the prescribed procedure and method.

It follows on its face that the claimant in this matter has the rights of an expropriating licensee, including the right to apply to the board for the order sought in his application for determination of compensation.

[7] The issue of res judicata arises out of the fact that there is already a registered water easement across Lot A in favour of Lot 1 and that the terms of that easement have been the subject of several court applications and judgments since 1994. The question is whether these prior judicial decisions have the effect, as the respondents contend, of already finally determining the fundamental issues which would otherwise be before the board so as to bar the claimant from bringing his application.

 

3.  BACKGROUND

[8] Since June 30, 1950, there has been registered on title to what is now Lot A under no. 35243 an easement in favour of Lot 1. The easement is stated to be "for a pipeline". It allows the owner of Lot 1, and his, her or their heirs or assigns in perpetuity, "to occupy and use a strip 10 feet wide for the purpose of constructing, reconstructing, operating and maintaining the aforesaid pipes, ditches, flumes or other water conduits". The easement, which is appurtenant to Lot 1, is a charge not only upon the respondents' land but also upon land adjacent to Lot A to the west, the current registered owner of which is one Vincent Kana. The claimant's water pipeline, which appears to pass nearly through the middle of the respondents' land but is buried to a depth of six feet, is connected to a water box situated on the Kana land.

[9] The easement was already in place when the claimant and the respondents purchased their respective lands. The claimant purchased Lot 1 in 1967 and the respondents purchased Lot A in 1985. Over the ensuing years after 1985, conflict arose between the parties over the frequency and manner of the claimant's entry onto the respondents' land for the ostensible purpose of inspecting and maintaining his water pipeline and accessing the water box on the Kana land. Eventually, this conflict, described in one legal decision as a "festering problem", led to litigation in the courts.

[10] Based on a review of the materials provided by the respondents on this application, I would summarize the chronology of proceedings relevant to my determination as follows:

  • On March 3, 1994, the respondents applied in the Supreme Court of British Columbia to modify easement no. 35243 to restrict, except for the purpose of actually repairing the water pipeline, the frequency with which the claimant could enter onto the respondents' land to inspect the pipeline area. The application was made pursuant to section 31 of the Property Law Act, R.S.B.C. 1979, c. 340.
     
  • On May 16, 1994, Cooper J. in written reasons modified the easement by limiting the claimant's access for the purpose of inspecting the water pipeline or the water box to one day per month. The claimant would continue to have access at any time for repairing or replacing the pipeline. Each entry was to be made without undue disturbance of the owners or occupiers of the land. See Winston Churchill Barclay and Mary Dawson Barclay v. Eugene Denault, unreported, May 16, 1994, No. 3883, Nelson (BCSC).
     
  • On June 8, 1994, the claimant filed a notice of appeal in the British Columbia Court of Appeal, seeking an order that the judgment of Cooper J. be set aside.
     
  • On October 10, 1995, the claimant's appeal from the judgment of Cooper J. was heard, and dismissed, by the Court of Appeal. See Winston Churchill Barclay and Mary Dawson Barclay v. Eugene Denault, unreported, October 10, 1995, No. CA018968, Vancouver (BCCA).
     
  • On August 26, 1999, the claimant filed a notice of motion in Supreme Court seeking an order that he be allowed to exercise his rights in accordance with the order of Cooper J. The respondents in turn filed a notice of motion for an order dismissing the claimant's application.
     
  • On October 12, 1999, the foregoing notices of motion were heard by Neilson J. In oral reasons for judgment pronounced at the conclusion of the hearing, Neilson J. dismissed the claimant's motion on the basis that it was unnecessary, pursuant to Rule 19(24)(b) of the Supreme Court Rules. See Winston Churchill Barclay and Mary Dawson Barclay, unreported, October 12, 1999, No. 3884, Nelson (BCSC).
  • [11] To complete the picture, I should also note that on two occasions the respondents brought applications in Supreme Court for an order that the claimant was in contempt of court for having disregarded the terms of the order of Cooper J. On June 12, 1995, the claimant was found to be in contempt. However, while the past conduct of the parties may become relevant if the board finds that it has jurisdiction to determine the nature and terms of the instrument under section 30 of the Water Act, it is not in my view relevant to the threshold issue of res judicata which is before me on this application.

    [12] In paragraphs (i) through (o) of the statement of claim forming part of the application for determination of compensation filed with the board, the claimant makes certain allegations of fact which I consider sufficiently relevant on this motion to set out fully here. They read as follows:

    "(i) The present easement, as modified, has proven over the past six years to be insufficient for the Claimant to effectively exercise his rights under the water licences to maintain and improve the water box and pipeline.

    (j) The water box is in serious need of repair and will require machinery to be brought to the location of the water box.

    (k) There are serious difficulties encountered in the Fall, Winter, and Summer months with debris such as leaves, sticks, rocks, and as well, with freezing, that require the Claimant to inspect the water box approximately every 2 to 3 days. The present easement does not allow for this.

    (l) The Claimant is nearly sixty years of age and suffers health problems which make it difficult to inspect the water box and pipeline and he requires the ability to carry out inspections and maintenance with the use of a motor vehicle. This will require an easement of 15 feet width in order to construct a road. A small bridge will have to be constructed on the easement at a point on the Respondent's property where Curle Brook intersects the easement.

    (m) The circumstances of the Claimant have changed over the past six years to the extent that the Claimant reasonably requires an easement of 15 feet width with motor vehicle to effectively construct, maintain, improve and operate the works under the water licenses.

    (n) Pursuant to s. 27 of the Water Act and s. 26 of the Water Regulation, the Claimant has served Notice of Intent to expropriate an expanded easement of 15 feet in width across the Respondent's land for the purpose of constructing, reconstructing, operating and maintaining pipes, ditches, flumes or other water works on the Respondent's land, and the water box on the property adjoining the Respondent's land and to include motor vehicle access and the right to build a road and bridge, and with such easement rights to be exercised reasonably and without undue disturbance to the Respondents.

    (o) The Claimant has offered the sum of $500.00 as compensation on the basis of the value of the additional five foot strip of land being expropriated beyond the current 10 foot wide easement. The Claimant is willing to pay for a legal survey of the expanded easement."

     

    4.  THE RESPONDENTS' POSITION

    [13] The respondents submit that, in an expropriation proceeding before the board under the Water Regulation, the fundamental issue to be determined would be the nature and terms of the instrument required by the claimant to give effect to his right to access his water pipeline and water box for the purpose of constructing, reconstructing, operating and maintaining them. This fundamental issue, the respondents say, is precisely the issue which has already been before the courts and which has been finally determined by them.

    [14] From the claimant's notice of intent and statement of claim the respondents identify the particular issues raised by the claimant as being his need to make water box repairs, his concern about crossing the adjacent Kana property to access the water box, his need for vehicular access, his health problems, and his concern generally that the easement as modified has proven insufficient to allow him effectively to exercise his rights. The respondents refer to the affidavit and factum material filed in various court proceedings concerning the existing easement as well as the judgments of the courts themselves, all of which were placed before me, as evidence that each of these issues has been frequently addressed and disposed of in the prior litigation. The respondents argue that the claimant, under the guise of an expropriation proceeding, is seeking to re-open those issues and, in effect, undo what the Supreme Court and the Court of Appeal have already decided.

    [15] Respondents' counsel summarized the principle of estoppel by res judicata as containing the following three constituent elements:

    (1) There has been a final judicial decision pronounced by a court of competent jurisdiction;

    (2) The judicial decision was, or involved, a determination of the same question as that sought to be controverted in the present litigation; and

    (3) The parties to the judicial decision were the same persons as the parties to the present proceeding.

    Mr. Humphries argues that all of these constituent elements have been met in the present instance and, accordingly, the claimant is barred from launching proceedings before the board which call into question issues which have already been decided between the parties. In support of those submissions, respondents' counsel referred to the judgment of the Supreme Court of British Columbia in Bank of B.C. v. Singh (1987), 17 B.C.L.R. (2d) 256, and the cases cited therein, as well as to the commentary on the principle of res judicata in J. Sopinka, S.N. Lederman & A.W. Bryant, The Law of Evidence in Canada, Second Edition (Toronto and Vancouver: Butterworths, 1999), at pp. 1068-1092.

     

    5.  THE CLAIMANT'S POSITION

    [16] The claimant submits that, in making application to the board, he is properly exercising his rights as an expropriating licensee under the provisions of the Water Act and the Water Regulation. The issues to be determined by the board are dictated by section 30 of the Water Regulation, namely, the nature and terms of the instrument required to give effect to the claimant's rights as an expropriating licensee and the amount of compensation to be paid. These issues, the claimant argues, are different from the issues which were before the courts. Those issues involved, in earlier proceedings, the frequency with which the claimant could exercise his right of access under an existing registered easement, and in later proceedings, whether the respondents were interfering with the claimant's right of access under the easement as modified by the court. None of these court proceedings considered the expropriation provisions of the Water Act and the Water Regulation and, consequently, there has been no final decision of any court or tribunal determining the claimant's rights or obligations under them. Indeed, the claimant says, his application before the board will be the first and only time that the rights of the parties under these enactments are to be determined.

    [17] The claimant says that, by relying upon the affidavit and other material filed by the parties in the earlier court proceedings, the respondents are confusing the determination of issues by the courts with the evidence heard in those proceedings. Those proceedings, he argues, clearly dealt with different issues. The claimant acknowledges that some of the evidence that was before the courts would also be before the board but this does not prevent the board from determining, for the first time, issues which fall to be decided under the Water Act and the Water Regulation.

    [18] Claimant's counsel, Mr. Ruud, therefore submits that the first two of the three constituent elements of estoppel by res judicata, as summarized by respondents' counsel, are not satisfied in the present instance and the tests set out in the Singh case have not been met.

     

    6.  DISCUSSION

    [19] The authors of The Law of Evidence, at p. 1078, point out that there are two principles subsumed under the heading res judicata. The first is that any action or issue which has been litigated and upon which a decision has been rendered cannot be retried in a subsequent suit between the same parties. This principle, they note, prevents the contradiction of that which was determined in the previous litigation by prohibiting the relitigation of issues already actually addressed. The second principle makes it mandatory that a plaintiff asserting a cause of action must claim all possible relief in the first instance and prevents a second attempt to invoke the aid of the courts in the same cause. It is the first of these principles which is engaged on this application.

    [20] The Singh case involved a foreclosure action wherein the bank applied for and obtained an order approving a sale of the foreclosed property at a specified price. The property resold less than a year later for a much higher price. The mortgagors, who had opposed the bank's application for approval of the sale, later brought an action against the bank and its appraisers alleging negligence and breach of fiduciary duty arising from the sale. Hardinge L.J.S.C. (as he then was) held that the fundamental issue in the previous proceedings was the fair value of the property and whether the sale was prudent. This was precisely the issue now raised by the mortgagors. The mortgagors were therefore barred by the doctrine of res judicata, and more particularly by issue estoppel and cause of action estoppel, from relitigating the issue.

    [21] Particularly germane to the application before me is the question of issue estoppel. Issue estoppel precludes a litigant from rearguing an issue that was before the courts previously. With reference to decisions from both the House of Lords and the Supreme Court of Canada, the Court in Singh pointed out at p. 261 that an issue, to give rise to an estoppel, must have been "fundamental to the decision arrived at" in the earlier proceeding. The Court quoted from the judgment of Huddart L.J.S.C. (as she then was) in Hamada v. Northguard Mtge. Corp. (1985), 67 B.C.L.R. 115, who said as follows at p. 119:

    As I understand it, issue estoppel requires that the 'issue' which 'has been decided', on which it is sought to found the estoppel, be so fundamental to the earlier substantive decision that the decision could not stand without it. If such is the case, then both parties are estopped from raising that issue in any subsequent proceedings whether the same cause or any other is raised.

    [22] At p. 1069 of the The Law of Evidence, the authors make the further point that, although the principle of res judicata is sometimes referred to as a rule of substantive law, the better view is that it is a rule of evidence. Accordingly, they say, at p. 1092:

    In order to determine the identity of the actions or issues, the court should consult the pleadings, judgments, reasons for judgments and other formal documents relating to the previous proceedings. These documents are admissible without formal proof.

    [23] A review of such documents in the court proceedings involving the claimant's registered easement reveals that they did not in any way address the issue of what rights or obligations the claimant may have as an expropriating licensee under the Water Act and the Water Regulation. The focus was entirely upon the existing easement which predated the claimant's acquisition of Lot 1 and his obtaining the conditional water licences.

    [24] The reasons for judgment of Cooper J. in May, 1994 note that the claimant is the holder of water rights under licence. However, the fundamental issue before the court was whether the registered easement should be modified pursuant to what was then section 31 of the Property Law Act to restrict the claimant's access to the easement area. The judgment is principally concerned with changes in the character of the neighbourhood and the properties in question since 1950 when the easement was registered which, in the learned judge's opinion, made the claimant's unrestricted right of access granted by the easement unreasonable and his exercise of that right excessive in the circumstances. The claimant's appeal from the judgment of Cooper J. was dismissed by the Court of Appeal in October, 1995 without reasons being provided.

    [25] The reasons for judgment of Neilson J. in October, 1999 flowed from the claimant's application for an order that he be allowed to exercise his rights pursuant to the earlier order of Cooper J., and the respondent's application that the claimant's motion be dismissed pursuant to Rule 19(24) of the Supreme Court Rules. The claimant alleged that the respondents were interfering with those rights by harassing and assaulting him when he entered their property to access his waterline and water box, erecting a satellite dish and growing trees on the easement area, preventing him from erecting a bridge across Curle Brook, and placing a no trespassing sign on the easement. Neilson J., without going into the merits of the claimant's allegations all of which the respondents denied, held that the claimant's application should be dismissed under Rule 19(24)(b) as "unnecessary" since there were "other remedies available to Mr. Denault, in particular under the Water Act", in view of the fact that the claimant also had a water licence as well as the easement. The remedies to which Neilson J. referred were those of contempt, an injunction, or both civil and criminal proceedings which are allowed by the Water Act. Again, there was no consideration of the claimant's "remedies" in the nature of expropriation proceedings.

    [26] Nevertheless, the question remains whether the issues which would be before the board in an expropriation proceeding are fundamentally those which the courts have already finally determined. To assist in answering this question, it is useful to refer to the decision of this board in Spur Valley Improvement District v. Checkman Holdings (Calgary) Ltd. (1999), 67 L.C.R. 106. This is the only case in which the board has thus far actually applied the provisions of section 30 of the Water Regulation. The board expressed the view that proceedings under section 30 logically require a two-stage hearing and went on to state at p. 108:

    In the first stage the board determines the nature and terms of the instrument, including the legal nature of the interest taken, the precise area of the taking, the character of the works to be constructed and maintained, and the governing terms and conditions. Once those matters have been decided, and the parties are then able to marshall appraisal and other evidence based upon them, the board in the second stage determines the amount of compensation to be paid.

    [27] The first issue for determination identified by the board is "the legal nature of the interest taken". In Spur Valley the board observed at p. 114 that the parties were in agreement that, to the extent required, the appropriate legal interest would be by way of statutory rights of way creating easement areas "rather than, for example, by way of mere licence or fee simple transfer". In the present instance, the claimant has given notice of intent to acquire an interest in the respondents' land in the form of an easement, a legal interest identical to that which he already possesses. However, it does not necessarily follow that this is the interest which the board, on hearing the claimant's application, would determine to be appropriate. The issue of legal interest, to the extent that it is or might become an actual issue, is not one which was canvassed in any of the prior court proceedings which simply dealt with the parties' rights under the existing registered easement.

    [28] The second issue for determination identified by the board is "the precise area of the taking". The existing easement is of a strip 10 feet wide, the precise location of which appears not to have been identified by metes and bounds description within the easement document or in any survey plan prepared and registered in connection with it. The claimant as expropriating licensee seeks an amended easement agreement which, for reasons set out in the statement of claim as noted above, expands the easement area from the present 10 feet to 15 feet in width. He proposes to have its precise location determined by legal survey.

    [29] The respondents concede that the proposed widening of the easement area is not an issue which was directly before the courts on any previous application. However, they also say that the claimant's stated need for vehicular access, which appears to be the primary reason for the proposed widening and also for a proposed bridge across Curle Brook, has been addressed frequently in the past litigation. The claimant's stated health problems which partly underlie his stated need for vehicular access, the respondents note, were also put in issue.

    [30] While I agree that these matters are raised in some of the affidavit material which was before the courts, in my view it is not accurate to say that they were addressed, much less disposed of, in any of the judgments rendered. It is perhaps open to question whether a circumstance personal to the claimant such as his stated health problems would be a relevant consideration by the board in fixing the dimensions of an easement area but, in any case, the matter of the precise area of the taking has not previously been the subject of a judicial decision.

    [31] The third issue for determination identified by the board is "the character of the works to be constructed and maintained". Insofar as the works comprise a water pipeline and a water box, there was no real issue before the courts as to their character except inasmuch as the claimant's replacement of the original steel pipeline with a 4 inch plastic pipeline buried to a depth of 6 feet in about 1984 led Cooper J. to conclude that this change in circumstance was a factor which rendered unnecessary the claimant's constant inspection of the pipeline. The proposed construction of a road on the easement was not an issue which was before the courts. The claimant deposed in an affidavit in support of his application before Neilson J. that a bridge was required on the easement to cross the creek, and the respondents through an affidavit produced documentation indicating that such a proposed structure had not met with the approval of the Ministry of Environment, Lands and Parks. However, neither this matter nor any other was decided on its merits in the judgment actually rendered.

    [32] The fourth issue for determination by the board concerns "the governing terms and conditions". Some of the foregoing issues would likely have a bearing on the terms and conditions in any conveyance or instrument which the board might determine as reasonable and appropriate in the circumstances. The judgment of Cooper J., the appeal from which was dismissed, dealt only with the issue of frequency of access by the claimant onto his easement on the respondents' land, with the added proviso that each entry was to be made without undue disturbance of the owners or occupiers of the land.

    [33] It is with respect to frequency of access that the principle of issue estoppel has some application to this matter. The board is being asked, in the context of an expropriation proceeding, to reconsider the issue of frequency of access to the water box for both inspection and maintenance and repair. The order of Cooper J. limited access across Lot A to both the pipeline and the water box for the purpose of inspection to one day per month. Although the order provided unrestricted access to the pipeline for the purposes of repairing or replacing it, the order was silent as to access to the water box for those same purposes. In his statement of claim the claimant asserts a need to inspect the water box approximately every 2 to 3 days during certain seasons of the year. He made very similar assertions in an affidavit which was before Cooper J., and it must be assumed that the learned judge, by the order made, was not persuaded by that evidence.

    [34] In these circumstances I am of the opinion that the board is foreclosed by the prior judicial decision from reconsidering that particular issue at least insofar as access across Lot A to inspect the water box is concerned. To find otherwise would be to open to possible contradiction that which has already been decided as between the parties. Although the claimant seeks a determination by the board of his rights as an expropriating licensee rather than as the owner of an existing easement, I consider the reasoning of Madam Justice Huddart in Hamada to apply and that "both parties are estopped from raising that issue in any subsequent proceedings whether the same cause or any other is raised." [Emphasis added].

    [35] The final issue for the board's determination, which as indicated above would be dealt with in the second stage of the hearing, is the amount of compensation to be paid by an expropriating licensee to the owner or owners whose land has been affected by the taking. It is obvious that no issue of compensation has arisen in any of the prior proceedings before the court which concerned an existing perpetual easement, registered on title prior to when the parties acquired their respective lands. Because the claimant already has a 10 foot wide easement registered in favour of Lot 1, he evidently takes the position that any compensation to be awarded to the owners of Lot A would only be in respect of the proposed 5 foot widening of the easement area. In that regard I would merely observe that section 31 of the Water Regulation makes applicable to this determination all of the provisions on compensation contained in sections 31 through 44 of the Expropriation Act.

     

    7.  CONCLUSION

    [36] Upon reviewing the evidence and submissions of the parties in light of the applicable law, I conclude that the claimant's notice of intent to acquire an interest in land and his application for determination of compensation before the board are not barred by the doctrine of res judicata. The parties to the previous judicial proceedings in question are the same as the parties to the present proceeding, and some of the evidence adduced in those proceedings will undoubtedly be germane here. However, except with respect to frequency of access for inspection purposes, the judicial decisions pronounced are not, in my view, a determination of all the fundamental issues which would be before the board, as I have described them, in respect of the claimant's rights and obligations as an expropriating licensee under the Water Act and the Water Regulation. Accordingly, the respondents' application for an order quashing the claimant's notice of intent and application for determination of compensation is dismissed.

    [37] Although unnecessary to the decision I have reached, I feel obliged to observe that the claimant's application to the board in its present form fails to address a central fact, which is that part of the claimant's water system, and in particular his water box, is not located on the respondents' Lot A but on the adjacent Kana land to the west. The claimant's stated concern about inspection and repair of the water box is clearly a major factor in his application to the board. In the past, as his own affidavit evidence attests, he has frequently accessed the water box by crossing the Kana land from a public roadway lying adjacent to it and with the permission of the owner. It is difficult to see how a proper determination of the claimant's rights and obligations as the holder of conditional water licences, entitled to expropriate land reasonably required for the works authorized under them, can be made without directly addressing that fact. The owner of the adjacent Kana land is not a party to these proceedings. If the claimant intends to proceed with his application, I would urge him to consider making amendments to overcome this potential difficulty accordingly.

    [38] The respondents were largely unsuccessful on this application and in the circumstances I make no award of costs. However, the parties will be at liberty to make submissions as to the costs of this application at the conclusion of these proceedings pursuant to section 32 of the Water Regulation.

     

    Government of British Columbia