June 15, 1995, E.C.B. No. 50/92/90 (56 L.C.R. 131)

Between: Bohumil Cejka and Margaret Cejka
Claimants
And: Cariboo Regional District
Respondent
Before: Fiona M. St. Clair, Vice Chair
Appearances: Jeffrey Frame for the Claimants
Guy E. McDannold for the Respondent

 

1. THE APPLICATION

This application came on for hearing on March 29, 1995. The claimants, Bohumil Cejka and Margareta Cejka ("the Cejkas") filed a Notice of Motion seeking an order "summarily determining paragraph 1 (b) of the amended application for determination of compensation." Paragraph 1 (b) seeks:

"a determination as to whether the Expropriation Compensation Board has jurisdiction to determine the compensation payable to the claimants resulting from a 1991 apparent expropriation of a statutory right-of-way."

Paragraph B of the Cejkas' Statement of Claim provides more detail as to why they have raised the issue of jurisdiction. It states:

"The claimants require a determination as to whether the Expropriation Compensation Board has jurisdiction to determine the compensation for the purported expropriation in 1991 of a statutory right-of-way. The claimants suggest that the Expropriation Compensation Board may not have jurisdiction to adjudicate compensation because:

1. The vesting notice filed at the Prince George Land Title Office on May 29, 1991 is void and is a nullity because the respondent failed to comply with s. 19 of the Expropriation Act and compliance with s. 19 is a statutory prerequisite to the filing of the vesting notice."

(Section 19 requires an expropriating authority, among other things, to make an advance payment to an owner in the amount it estimates is payable, other than for business loss.)

Paragraph B goes on to allege five ways in which the respondent, the Cariboo Regional District ("Cariboo") failed to comply with s. 19. Counsel for the Cejkas only relied on two of these at the application. These were that Cariboo "failed to make any form of payment to the claimant, Margareta Cejka" and that it "failed to pay to the claimant, Bohumil Cejka, the amount of its estimate as required by s. 19 (1) (d)".

The Statement of Claim also alleges that the Expropriation Compensation Board ("the board") may not have jurisdiction to adjudicate compensation in this case because "the statutory right-of-way which the respondent purported to expropriate appears uncertain …". Counsel for the Cejkas, however, did not rely on this allegation at the hearing, and I accordingly have not considered it here.

 

2. THE CLAIMANTS' POSITION

Mr. Frame, counsel for the Cejkas, made the unusual assertion that the Cejkas were not taking a position on their own application. He stated that they were not asking me to determine that there had not been an expropriation, and when I questioned him about this, he also stated that they were not asking me to find that there had been an expropriation.

Mr. Frame's written argument sets out the Cejkas' position (or purported lack of a position) as follows:

"The claimants do not take a position on this application. The claimants are concerned that the Board may decline jurisdiction in this case because of the respondent's failure to comply with the statutory prerequisites. If this Board eventually declines jurisdiction, the claimant's [sic] claim for compensation arising from the expropriation cannot proceed and the claimants will not be able to recover costs under s. 44. Therefore, the claimants ask that this Board's jurisdiction be determined before the claimants incur the considerable expenses of preparing for the hearing presently set for August 28, 1995."

Mr. Frame based his argument regarding Cariboo's failure to make the required payments under ss. 19 (1) (d) of the Expropriation Act, S.B.C. 1987, c. 23 ("the Act") on the reasons of the Court of Appeal in Cariboo's appeal from an earlier interlocutory decision of the board (reported as Cejka v. Cariboo Regional District (1994), 53 L.C.R. 85). Cariboo had brought an application before the board to determine whether or not the Cejkas' claim was statute-barred under s. 24 of the Act. Section 24 provides:

"Where no application is made to the board to determine compensation within one year after payment is made under section 19, the owner whose land was expropriated shall be deemed to have accepted the sum paid in full settlement of his claim for compensation, and no proceedings to determine compensation shall be brought by that owner."

Although Cariboo had tendered a cheque to Mr. Cejka in the sum of $100 on May 16, 1991, and at the same time had served Mrs. Cejka with a letter indicating that the cheque delivered to her husband was made payable jointly to both of them, the Cejkas never negotiated the cheque. Instead they returned it to Cariboo some time after the vesting notice was filed at the Land Title Office. The Cejkas commenced this expropriation action over a year after Cariboo tendered the $100 cheque.

The majority of the board decided that there had to be a reasonable period of time elapse before the limitation period set out in s. 24 would begin to run, after the tender of a cheque under s. 19, in order to enable the owner to negotiate the cheque. On the basis that the year stipulated in s. 24 ran from the end of this reasonable period of time rather than from the date of tender, and that it was still running when the compensation claim was commenced, the majority ruled that the claim was not out of time.

The Court of Appeal also found that the claim was not out of time, but for different reasons. Hinkson, J.A., at p. 87 of his reasons, held that:

"… the tendering of the cheque did not constitute payment until the cheque was negotiated and the proceeds paid to the owner … [P]ayment within the meaning of the section requires not merely the tendering of the cheque but receipt of the proceeds by the owners before the tendering of the cheque can be regarded as payment within the provisions of that section. Absent payment, of course, the provisions of s. 24 do not begin to operate."

Mr. Frame's written argument sets out submissions on whether, in light of Cariboo's failure to make a payment under s. 19 (as found by the Court of Appeal), there has been a valid expropriation. He contended that compliance with the advance payment requirement in s. 19 is so fundamental to the validity of an expropriation that non-compliance would render an expropriation void and a nullity. This then, he argued, would preclude s. 50 from applying, since the vesting of the property would not be effective where the necessary prerequisites to the vesting had not been complied with.

Subsection 50 (1) provides:

"No legal proceedings to challenge the validity of an expropriation shall be brought after land vests under section 22."

In this case, the land vested under s. 22 on May 29, 1991.

Mr. Frame relied on the decisions of the Court of Appeal of British Columbia in Hornby Island Trust Committee v. Stromwell (Kramer) and Dixon Lake Properties Ltd. (1988), 30 B.C.L.R. (2d) 383, and of the Supreme Court of Canada in Costello and Dickhoff v. City of Calgary, [1983] 1 S.C.R. 14, in support of his position.

 

3. THE RESPONDENT'S POSITION

Mr. McDannold, counsel for Cariboo, took the position that I ought either to dismiss the application and strike out paragraph 1 (b) of the amended claim or to find that the board has jurisdiction to determine the compensation payable for the expropriation.

Mr. McDannold relied on ss. 50 (1) of the Act, and on the board's decision in White v. Prince George (City) (1993), 50 L.C.R. 260. The White decision dealt with a very similar situation to this. In that case the widow/executrix of a property owner took the position, in the compensation proceedings, that no valid expropriation had occurred, and only sought compensation for an expropriation in the alternative. The claimant cited five reasons for concluding that no valid expropriation had taken place. Two of the reasons related to invalid service of the expropriation notice, the third was that the expropriation by-law was a nullity because its fourth reading took place after the vesting, the fourth was that the vesting was filed in non-compliance with the formalities of the Act, and the final reason was that one cannot expropriate from a dead person. In the White case, s. 50 was argued by the expropriating authority, as it is here.

The board in White concluded at page 273 of its reasons that:

"The board is not without concern for an owner who discovers, after the vesting notice has been filed, that irregularities exist in the procedures followed by an authority. They may or may not have remedies in other forums such as the Supreme Court, but it is the opinion of the board that the prohibition asserted by s. 50 is not avoided by attaching a validity challenge to a compensation claim before the board, as has been done in this case.

Accordingly, the board is precluded from making the determination the claimant seeks."

In light of the decision in White, Cariboo argued that s. 50 absolutely precludes the Cejkas from raising any challenge to the validity of the expropriation.

 

4. DISCUSSION

4.1 The Relief Sought

I find Mr. Frame's contention that the Cejkas have taken no position in this application an untenable one for the following reasons:

1. The Cejkas were the ones who set down this application, in the context of their claim for compensation arising from an expropriation.

2. Paragraph B of their Statement of Claim, cited above, suggests that the vesting notice is "void and is a nullity" due to Cariboo's failure to comply with s. 19.

3. In paragraph B, the Cejkas "suggest that the Expropriation Compensation Board may not have jurisdiction to adjudicate compensation" for this reason.

4. Mr. Frame referred me to case authorities which, if I were to accept them as standing for the principles for which he cited them, would support the proposition that failure to comply with statutory prerequisites in expropriation legislation results in an expropriation being void and a nullity.

In the White decision, the board summarized the claimant's position at p. 270:

"… the board is being asked by the claimant to find that there has been no expropriation despite the authority's assertion that this has been the sole purpose of its actions in relation to the subject lands and despite the fact that a vesting order has been filed with the land title office."

Later, at p. 271, the board commented on the claimant taking such a position within the context of a claim for compensation:

"What is of critical importance in a compensation claim, is the unconditional assertion by a claimant that there has been a taking and that compensation is to be determined by the board.

The board is of the opinion that the combined result of the pleadings and the argument now made by the claimant's counsel, is to challenge the validity of the expropriation by having this board declare that no valid expropriation occurred. In the opinion of the board, this is fundamentally inconsistent with the pursuit of compensation before the board."

I see no difference between the Cejkas' situation and that of Mrs. White. It is not possible for the Cejkas to resile from the position that they are actually taking simply by purporting not to be taking a position. Like the board in White, I find that putting forward the "suggestion" that the expropriation is void and a nullity is fundamentally inconsistent with the simultaneous pursuit of compensation before the board. The fact that Mrs. White was more overt about the position that she was taking than are the Cejkas does not negate the practical similarity between their situations.

I therefore view the Cejkas, through their filed pleadings and the arguments of their counsel, as effectively taking the position that there has not been a valid expropriation in this case.

4.2 The Effect of Non-compliance with s. 19 (1) (d)

Mr. Frame referred me to the only reported decision of the board that resulted in a compensation hearing not proceeding on the basis that there had been no expropriation to provide the board with jurisdiction to conduct such a hearing. That decision was handed down in McKinnon v. Duncan (City) (1992), 47 L.C.R. 47. The flaw in the expropriation process in that case was that the expropriation by-law promulgated by the City of Duncan, which purported to expropriate a right of way, was so unclear as to make it "impossible for the owner to identify which of his remaining lands [were] subject to the right of way." The board found that it had no jurisdiction to determine compensation, because it could not determine the precise nature of the interest in land taken for which the compensation was sought. As the board in White characterized it, "it was a matter of the substance of the by-law … that precluded the board from its determination of compensation." The McKinnon case did not, in other words, turn on whether a requirement of the Act had or had not been complied with, not on the effect of such non-compliance.

Mr. Frame referred me to the Hornby Island and Costello and Dickhoff decisions for the proposition that, where an authority has failed to comply with the provisions of the Act, there is no valid expropriation.

The Hornby Island case did not deal with an expropriation, but simply with the issue of the validity of a municipal by-law. In that case, the by-law at issue was adopted without the advertisement of a synopsis as required by a provision of the Municipal Act. The Court of Appeal held, at p. 388 of the reported decision, that:

"… a by-law that is adopted without observance of a necessary statutory precondition is wholly void from the outset, and not merely voidable."

They viewed the advertising requirement as being just such a necessary statutory precondition, and therefore declared the by-law to be void and a nullity from the time the municipality purported to adopt it.

Costello and Dickhoff was an expropriation case, dealing with whether the City of Calgary's failure to comply strictly with the statutory service requirements regarding notice of meeting prior to the promulgation of an expropriation by-law rendered that by-law void or merely voidable. The statute in question in this case was the Alberta Expropriation Procedure Act, which set out provisions governing expropriation by municipalities in Alberta. The Supreme Court of Canada, in arriving at the conclusion that the expropriation by-law was void, held at p. 22 of the reported decision:

"Where it is provided that a power is to be exercised in a certain manner or after a prescribed condition has been complied with, it becomes necessary to determine whether any of these limitations on the grant of authority may be disregarded without entailing a nullification of an act done otherwise than in the prescribed manner. If, in order to carry out the essential purpose of the legislature, strict compliance with the statutory provisions appears to be a condition precedent to the exercise of the power, non-observance thereof is fatal to the validity of the by-law." (Emphasis added.)

Unlike the present matter, both Hornby Island and Costello and Dickhoff deal with non-compliance with provisions in the statute that granted the original power to pass a by-law. In the Costello and Dickhoff case it was a by-law regarding an expropriation. The Act with which I am concerned does not contain any provisions granting expropriating powers. As Goldie, J.A. pointed out in Seaside Acres Ltd. v. Pacific Coast Energy Corp. (1994), 52 L.C.R. 106 at p. 113, with reference to the Act:

"The Act regulates expropriations. It does not confer a power of expropriation. This is apparent from the definition of expropriating authority in s. 1 and from ss. 4 (2) and 13 (2) which exclude challenges under the Act to the right to expropriate and to the necessity to expropriate respectively." (Emphasis added.)

There are, therefore, to my knowledge, no decisions of the board or of any higher authority reviewing the board's decisions, in which failure to comply with any provision of the Act has been held to invalidate an expropriation.

I do not view s. 50 as providing a complete answer to every challenge to the validity of an expropriation once vesting has taken place. As occurred in McKinnon and Costello and Dickhoff, there are situations in which the expropriating by-law itself may be so flawed as to be void, or in which the provisions of the statute granting the authority to expropriate in the first place may not have been complied with, thereby preventing a compensation board from having the requisite jurisdiction to determine compensation. (I should point out here that it is not necessary for me, in the context of this application, to decide the issue of the board's authority to make a determination that an expropriating authority has not properly exercised its statutory authority in the act of expropriation.)

In the case at hand, this type of invalidity is not alleged. The only failures of the expropriating authority that are alleged relate to s. 19 of the Act itself. This brings the case, in my view, in line with the White decision, and the application of ss. 50 (1). I agree with the reasoning and the conclusion of the board in White, and I find them to be applicable to this case. I therefore find that ss. 50 (1) does apply to this situation, and that for that reason it is not available to the Cejkas to challenge the validity of the expropriation through paragraph 1 (b) of their amended claim for compensation, as they have attempted to do. I therefore determine paragraph 1 (b) by finding that the board does have the jurisdiction to hear this compensation claim.

 

Government of British Columbia