September 29, 1995, E.C.B. No. 14/91/096 & 56/91/096 (57 L.C.R. 211)

 

Between: Okanagan Dairy Transport Ltd. (14/91) and
Kootenay Dairy Transport Ltd. (56/91)
Claimants
And: The City of Vernon
Respondent
Before: Robert W. Shorthouse, Chair
Lesley Eames, AACI, Board Member
Sharon I. Walls, Board Member
Appearances: Douglas D. Kermode, for the Claimants
William M. Burris and
James H. Goulden, for the Respondent

 

1. INTRODUCTION

For approximately 30 years, the claimant, Okanagan Dairy Transport Ltd. ("Okanagan"), has been in the business of transporting bulk milk from farmers in the Okanagan Valley for Dairyland Foods and its predecessors in Vernon and Armstrong. The claimant, Kootenay Dairy Transport Ltd. ("Kootenay"), was organized in 1971, to transport bulk milk from farmers in the Kootenay region. Both claimants share common principals, Lloyd and Arlene Duggan.

In the 1960s Okanagan bought a property ("Lot 1") adjacent to 25th Avenue in Vernon, in the immediate vicinity of the Dairyland Food plant. Lot 1 was approximately 7,560 square feet (0.17 acres) and unimproved but for two underground fuel tanks and two fuel pumps. Commencing in 1974, Okanagan also entered into an oral lease with Dairyland for property a short distance from Lot 1, including premises that it used for offices and a workshop. In 1985, Okanagan leased from Canadian Pacific Limited ("C.P.") a further 3,800 square feet (0.087 acres) of the C.P.R. right of way that adjoined Lot 1. Both Okanagan and Kootenay used all three of these properties.

In 1990, the respondent, the City of Vernon, embarked on a project to widen and upgrade 25th Avenue in Vernon. The project required the acquisition of Lot 1 and the land leased by Okanagan from C.P. In June 1990, the respondent wrote to Okanagan and gave notice that Okanagan's lease with C.P. would terminate in 30 days. On September 18, 1990, the claimant and the respondent entered into an agreement with respect to the respondent's acquisition of Lot 1 with compensation to be determined as of October 1, 1990. The respondent has paid $45,000 for the market value of Lot 1: $42,500 on September 28, 1990, and a further $2,500 on July 26, 1993.

In October 1990, Dairyland put its contract for bulk milk transport out to tender. Okanagan was not successful in its bid to have the longstanding contract with Dairyland renewed and Dairyland awarded the contract to another company. As a result, Dairyland terminated its unwritten lease with Okanagan for the premises used for a workshop and offices. Okanagan and Kootenay allege that the loss of the contract for bulk milk transport was the result of the expropriation of Lot 1. Both companies have made a number of claims totalling almost $1,300,000 for damages for expenses and business losses arising from the expropriation of Lot 1 and the cancellation of the bulk milk contract.

The claimants' hearing for compensation, which was scheduled for four successive weeks, ran from September 7 to 17, 1993. Apart from opening argument and a site visit, the whole of the time was occupied with the evidence of Lloyd Duggan. During the course of his cross examination on September 16, Mr. Duggan was shown documents relating to the claimants' contracts with Dairyland that had not previously been produced. On the morning of September 17, Mr. Burke, counsel for the two claimants, stated that on instructions from his clients he was withdrawing a number of the claims for compensation. Mr. Burke then indicated that he intended to withdraw as counsel. During an adjournment of a few hours, the claimants retained new counsel, Mr. Kermode, in order that the cross examination of Mr. Duggan on the remaining claims could be completed on the afternoon of September 17, 1993. Following the completion of Mr. Duggan's cross examination, the hearing was adjourned by agreement.

The compensation hearing has not been resumed and the respondent has now brought an application that all the remaining claims of both claimants be dismissed without further hearing, either on the basis that the claimants failed to disclose relevant documents or on the basis that the claims for further compensation are without merit or value. In response, the claimants applied for an order that the original compensation hearing be terminated and that a new hearing be set before a newly constituted panel. These applications were heard together on February 6 to 8, 1995, by the same panel that heard the incomplete compensation hearing. Several affidavits were filed as evidence and the affidavit of James Goulden, one of the counsel for the respondent, incorporated the nine volumes of transcripts of the unfinished compensation hearing.

 

2. BACKGROUND

The board makes further background findings based on its assessment of the evidence at the unfinished compensation hearing.

2.1 Okanagan Dairy Transport Ltd.

2.1.1 Overview of Okanagan's Business

Okanagan has had a long-standing relationship with Dairyland Foods and its predecessors. Lloyd Duggan began hauling milk at an early age by assisting his father in the transport of milk cans to various dairies. This work appears to have been part time in the beginning, as a supplement to other income. In 1961, Lloyd Duggan was successful in a bid to the North Okanagan Creamery Association ("NOCA") for a contract to bring milk to Armstrong and Vernon. Okanagan was incorporated and new equipment was bought to fulfill this larger contract. Okanagan purchased tanker trucks in 1963 and entered into its first contract with NOCA to transport milk in bulk in the tankers, as opposed to transport of milk in cans. This contract was renewed and renegotiated from time to time until 1981 when Dairyland Foods replaced NOCA and took over the contract. In addition to this contract for hauling bulk milk to Vernon and Armstrong for NOCA, Okanagan hauled bulk milk for other dairies in the area and for the Milk Marketing Board. It also hauled apple juice in the tankers and finished dairy products in refrigerated or reefer vans. In 1981, Okanagan lost a significant amount of work when Dairyland did not continue using Okanagan for some of its freight hauling shortly after Dairyland had taken over from NOCA. In 1984, one of Okanagan's contracts for hauling bulk milk to Vernon for Foremost Dairy was lost to a competitor, Vedder Transport. Okanagan continued to renegotiate its contract for hauling bulk milk with Dairyland until October 1990 when Dairyland put this contract out to tender. Okanagan's bid for this contract was lost to a bid from a subsidiary of Vedder Transport. As a result of the loss of this contract, the financial records show that Okanagan's income from hauling in 1991 was approximately half that of 1990. It has continued to do some bulk milk hauling to the Blackwell Dairy, for the Milk Marketing Board, and some bulk milk hauling to Dairyland for Kootenay Dairy Transport, which is unable to bring milk to Dairyland itself because it is non-unionized. Okanagan has also continued to haul finished product.

2.1.2 Lot 1

In the early 1960's Okanagan parked its trucks and trailers on a vacant lot adjacent to the NOCA plant. It decided that it should purchase some of this vacant land and as a result entered into a contract to purchase Lot 1 from the owner, with transfer of title eventually occurring in 1969.

Okanagan installed some improvements on Lot 1. Mr. Duggan's initial evidence at discovery was that two underground steel tanks for fuel had been installed sometime in the 1970's along with two pumps in a concrete island. He estimated the tanks were in the range of 10 to 12 years old. During his cross examination at the hearing Mr. Duggan agreed that the tanks may have been installed earlier than his initial recollection of between 1978 and 1980. The next morning he produced some documents he had found overnight in his files which he suggested showed an installation date of 1974. This date would make the tanks 16 years old at the time of the expropriation. However, a careful review of the documents showed an earlier installation date. There were two purchase orders dated September 28, 1968 which indicated that Home Oil Distributors was to deliver two fuel tanks and two pumps to Okanagan. A letter from Home Oil to Okanagan dated November 15, 1968 confirmed an agreement that the price for supply and installation of these items was $3,912, to be written off over five years from the date of installation, after which ownership would be transferred to Okanagan for $1.00, provided Okanagan had continued to use Home Oil fuel. Finally there was an invoice from Home Oil for these items dated March 28, 1974 which indicated that the price of $1.00 pursuant to the agreement dated November 15, 1968 had been paid. The terms of the agreement suggest that the tanks and pumps had been installed in the spring of 1969. Although Mr. Duggan stated that the tanks had been stored for some time before installation, the board is satisfied after reviewing these documents and listening to the evidence that the equipment was delivered and installed in or about 1969. Thus the pumps and tanks were approximately 21 years old at the time of the expropriation. Mr. Duggan had previously agreed with Mr. Burris, counsel for the respondent, that underground steel tanks had between a 15 and 20 year life span, after which the risk of pollution through leakage increased. He also agreed that he would not put a great value on the life span of any tank older than 20 years.

2.1.3 Workshop and Office Premises

In 1974 or 1975, Okanagan commenced leasing workshop and office premises from NOCA on property near Lot 1 on the north side of the main NOCA/Dairyland building. The office and workshop were in an old concrete building made available to Okanagan for a rent that was not increased by NOCA or Dairyland from 1975 until 1991. The board viewed these premises and is of the opinion that the most that could be said for them was that they were functional. Mr. Duggan admitted that one of the advantages of the premises being so primitive was that it created the impression among the dairy farmers from whom he picked up milk that Okanagan was not making a large profit on this work. There was also considerable space for parking in the yard around this building but no truck washing facilities. Okanagan and Kootenay used Dairyland's truck washing facilities when they were available.

2.1.4 Property Leased from Canadian Pacific

In 1985, Okanagan entered into a one year lease with C.P. to lease 3,800 square feet of the C.P.R. right of way adjacent to the northern boundary of Lot 1. The written lease provided that the landlord, C.P., could terminate the tenancy at any time on 30 days' written notice. The evidence at the hearing established that there were some improvements on this leased property including an old trailer used as a shed for oil storage, a power pole with a yard light and some electrical boxes for block heaters. The appraisers had assumed that most of these improvements were on Lot 1. In June 1990 the respondent notified Okanagan that it had purchased the C.P.R. right of way, including the unregistered lease to Okanagan. Pursuant to the lease the respondent gave Okanagan 30 days' notice of termination of the lease.

2.1.5 Section 3 Agreement with the Respondent

In September 1990, Okanagan entered into a s. 3 agreement with the respondent in which it was agreed that compensation would be payable as of October 1, 1990. In a collateral agreement made at the same time, Okanagan agreed to pay the respondent $311.96 per month to rent back, on a temporary basis, Lot 1 together with the land leased from C.P. and/or specified portions of the C.P.R. right of way between 34A and 37th Street now owned by the respondent. Mr. Duggan stated that for various reasons Okanagan did not in fact occupy Lot 1 or the C.P.R. right of way for more than a week of this time, but it is agreed that Okanagan nonetheless paid the monthly rent for four months ending January 31, 1991 for a total payment of $1,248.

2.1.6 New Arrangements for Fuel Purchase

With the loss of Lot 1, Okanagan and Kootenay had to make new arrangements for purchasing fuel. Mr. Duggan stated in evidence in chief that he had been dealing with Petro-Canada for some time before the expropriation and continued to deal with them after the expropriation, by making arrangements to use the Petro-Canada cardlock in north Vernon close to Highway 97, heading north. A cardlock is a self service pump which customers access with individual keys. The price for fuel at cardlocks is negotiated on an individual basis depending on the volume of fuel used by the particular customer. However, in cross examination respondent's counsel produced invoices from Shell Oil that showed the in-ground tanks had been fueled by Shell for a year or two prior to the expropriation and the claimants had, for a short period of time after the expropriation, filled their trucks from the Shell cardlock which was located a very short distance from Lot 1. Mr. Duggan initially suggested that after the expropriation the price of fuel that the claimants had to pay at the cardlocks was three cents per litre more than the price of fuel from their own pumps, although with fluctuations in price he could not say for sure that the cardlock was more expensive. However, the invoices showed that Shell charged the claimants the same price at the cardlock as from the pumps. Within a number of weeks following the taking, the claimants switched to the Petro-Canada cardlock which they continue to use. Mr. Duggan said that he did not intend to install in-ground tanks at a new location the claimant Kootenay acquired in 1991 on Pleasant Valley Road in north Vernon due to increased environmental concerns and higher costs. He confirmed that newer cardlock pumps are speedier and more cost efficient than the old pumps on Lot 1, although the drivers sometimes have to wait in line behind prior customers.

2.1.7 New Arrangements for Parking

Okanagan commenced leasing parking space from A1 Machine & Welding Ltd. on October 15, 1990. This was a large yard adjacent to the Petro-Canada cardlock. Four invoices to Okanagan were produced for rent from October 15, 1990 to January 31, 1991. The rent was $600 per month plus $42 for G.S.T. after January 1, 1991. Okanagan and Kootenay were continuing to rent this parking space at the date of the hearing because the new site they eventually acquired in February 1991 was on a slope and required fill and a drain field. Since the new site does not yet have sufficient level space for all the equipment, each of the claimants claim half the rent for three years, to October 15, 1993, for a total of $23,112.

2.1.8 Okanagan's Bid for the Dairyland Bulk Milk Contract

In October 1990, Dairyland put the Okanagan bulk milk hauling contract out to tender through its hauling committee. The price under the existing contract was $1.62 per hectolitre. This price had remained constant since 1985, when it had increased from $1.56 per hectolitre. Okanagan's bid in early November had a number of components, with rates for trips to certain specified destinations charged on an hourly basis or on a per trip basis. The basic bid for the main bulk milk contract was $1.68 per hectolitre, based on $.40 per litre fuel prices, with a half cent increase in the bid price per hectolitre for each one cent increase in fuel prices. On November 28, 1990, Dairyland advised Mr. Duggan that the contract had been awarded to a subsidiary of Vedder Transport which had previously under-bid Okanagan in 1984 on a bulk milk hauling contract in the Okanagan area for Foremost Dairy.

There was evidence about several different factors that had led to Okanagan's bid of $1.68 per hectolitre. Mr. Duggan stated that the two main factors were the increase in the unionized wages in 1991 and the extra time for the refueling at the cardlock rather than using the in-ground tanks on Lot 1. He attributed an extra three cents per hectolitre to each of these two factors for a total increase of six cents per hectolitre. Thus, the claimants' position was that if the expropriation had not occurred, Okanagan's bid would have only reflected the increase in the unionized wages and been three cents higher than the existing price, or $1.65 per hectolitre, which was reported to be the price of the successful competitor, Vedder Transport.

The first factor that Mr. Duggan attributed to be one of the two primary ones in the increased bid price was the scheduled increase in employees' wages in 1991. Okanagan was unionized and it was known that the 1990 rate for wages and benefits of $22.61 per hour would increase in the spring of 1991 to $23.51 per hour, an increase of 3.9%. An increase of almost the same percentage had occurred in the spring of 1990. Okanagan's financial statements showed that wages and benefits for all employees comprised 64% of gross haulage income in 1989 and 67% in 1990, up from 60% in 1985 and 1986, a situation which Mr. Duggan conceded caused him some concern.

The second primary factor in the bid calculations, according to Mr. Duggan, was the extra cost for drivers to go to the Petro-Canada cardlock. Mr. Duggan's evidence was that drivers needed to refuel on an almost daily basis but it was only the vehicles picking up milk from the south that needed to make a special trip to the cardlock because it was near the highway heading north. He stated that in calculating his bid he assumed half of the trips would need to make the special trip averaging an extra 20 minutes. On these assumptions and after deducting one cent per hectolitre which he expected to save with increased productivity, he calculated a figure of an extra cost of three cents per hectolitre attributable to special trips to the cardlock.

However, there was evidence that undermined this claim that three of the six cents increase in the bid price was due to the increase in time for the drivers to drive to the cardlock for refueling. First, although Mr. Duggan resisted admitting it, the truck records show that the trucks were not refueled on a daily basis but between 50 and 70% of the days that they were driven. When this is coupled with the fact that a majority of the routes (nine out of twelve) passed the cardlock as part of the route, and so did not need to make a special trip to the cardlock, then Mr. Duggan's calculation is inaccurate. In addition, Mr. Duggan explained that the 12 routes were done in pairs and, out of approximately 20 shifts per week, only three did not pass the cardlock at some point in their shift. This suggests that, by the most generous estimate, only approximately 8 to 11% of the shifts needed to make special trips (70% x 3/20 of the shifts). Even if an allowance was made for special trips for other routes when time constraints for milk delivery made a special trip necessary, it was only approximately 15% of the shifts which required special trips. In any event, there was evidence that union requirements resulted in drivers being paid for a minimum nine hour day and a note by the accountant in 1988 stated that drivers sometimes worked one hour less each shift than the minimum nine hours. Mr. Duggan agreed in cross examination that the accountant presumably received this information from him and that drivers sometimes did go home early. No evidence was offered about the collective agreement terms for overtime and the minimum amount that was to be paid, nor as to whether any overtime was in fact paid. With respect to the time actually spent refueling rather than the time to get to the new cardlock, although drivers might sometimes lose time if there was a queue of vehicles, they gained time because the pumps at the cardlock delivered the fuel two to three times more rapidly than the pumps on Lot 1.

The evidence indicated that a number of other factors affected the bid price. Although the price for fuel had apparently not gone up to any degree as a result of the loss of the fuel tanks, it had increased for other reasons since 1985 and the old contract had no provision for an increase in remuneration with an increase in fuel costs. Okanagan's financial statements showed that fuel costs amounted to approximately 15% of hauling revenues over the period 1985 to 1990. During the fall of 1990 fuel prices jumped dramatically from $.39 per litre on July 20, 1990 to $.48 on October 11, 1990 and $.50 in November 1990, in part in reaction to the impending Gulf war. Okanagan's bid contained a clause whereby the haulage rate varied with the price of fuel and, as a result of the significant increases in the fall of 1990, the true bid price on November 13, 1990 was $1.715 per litre rather than the $1.68 theoretical bid price made a few days earlier. This bid price is six and a half cents greater than the bid price attributed to the successful competitor. Okanagan confirmed this actual bid price to Dairyland's hauling committee in response to an inquiry on November 13, 1990.

There was also a change in the contract terms that were included as part of the bid compared to the contract terms under which Okanagan had been operating. During cross examination of Mr. Duggan, the respondent produced various documents from Dairyland's files not previously listed by Okanagan that showed the history of contract dealings between Okanagan and Dairyland prior to the contract being put out to bid. These included a contract for bulk milk hauling dated February 1983, and a modification of it dated July 1983, both of which had been signed by Lloyd Duggan. This bulk milk contract provided for negotiation of a new rate for the bulk milk hauling for each year of the five year term. Other documents showed that an increase in the bulk hauling rate had been negotiated from $1.46 per hectolitre in 1983 to $1.56 in January 1984 to $1.62 in January 1985. A letter to Okanagan dated January 1986, confirmed that, because Okanagan had experienced no wage increases and no major equipment purchases in 1985, the bulk milk hauling rate would continue at $1.62 per hectolitre. A letter to Okanagan in December 1988 enclosed two copies of a new contract which Okanagan was requested to sign. There is an unsigned contract dated in blank, 1989, and a second annotated version which bears the handwritten note, "draft Jan 26/1990". Although counsel did not draw the board's attention to the terms of the contracts, perhaps because they had just been produced from Dairyland files the day before, review of the initial unsigned contract dated in blank 1989 and the signed 1983 contract showed that the 1989 unsigned contract contained a number of new terms that were arguably disadvantageous to Okanagan, including inter alia the following:

1. Mr. Duggan required to act as a Guarantor of the contract;

2. Dairyland to have the ability to require the contractor to deliver the milk to sites other than Vernon or Armstrong;

3. Contractor to pick up milk every day as directed by Dairyland rather than every second day or as directed by Dairyland under the 1983 contract;

4. Dairyland not required to pay the contractor until the 25th of the month following, rather than the terms in the 1983 contract of advance payment of 35% on the 19th of the month in issue, followed by payment of the remaining 65% by the 10th of the month following — a 15 to 25 day delay in Dairyland's requirement to make payment;

5. If the parties could not agree on the price in future years, the ability of either party to submit the contract price to binding arbitration under the Commercial Arbitration Act with the contractor being required to continue delivery at the existing rate during this procedure, rather than the term in the 1983 contract whereby the contract would automatically terminate if the parties failed to agree on a price in future years;

6. Termination provisions

i. the Association to have the ability to terminate without notice if the contractor failed to perform its obligations, which included compliance with all relevant federal, provincial and municipal laws and rules;

ii. either party to have the ability to terminate on 12 months' written notice rather than the terms in the 1983 contract of reciprocal rights to terminate if there was a material default by the other party on 30 days written notice

7. Contractor to agree to waive any claim for compensation arising out of termination of the contract.

In the annotated version titled "draft, Jan 26/1990" the provisions concerning the guarantor, the ability to direct delivery to different locations, and the submission of the price to arbitration (items 1, 2 and 5) were all omitted. The contract that was included as part of the tender package, which was the only one of these documents which had previously been produced by Okanagan, closely resembled the second "draft, Jan 26/1990" version.

Thus compared to the contract that Okanagan had been operating under, the proposed contract that was part of the tender package had the following disadvantages:

1. Contractor obligated to pick up milk from farms every day as directed rather than every second day;

2. Dairyland not required to pay the contractor until 15 to 25 days after the dates it was required to pay under the 1983 contract;

3. Termination provisions more disadvantageous to contractor as detailed in items 5 and 6 above;

4. Contractor denied extra payments for drivers carrying out quality control tests on the milk. Under the previous contract contractor charged $11 per test for each of the approximately 80 tests performed per month.

Mr. Duggan gave evidence that he had resisted signing the blank contract with the notation "draft, Jan 26/1990" which closely resembled the copy of the contract in the tender package because he was hoping to negotiate better terms. The third new manager at Dairyland since 1981 had been appointed around this time and Mr. Duggan stated that he hoped a subsequent manager might be more sympathetic to Okanagan.

In reviewing the other factors bearing upon the bid price, the board notes that there was also an internal memo from Dairyland dated September 1988 which refers to a conversation between the writer of the memo and Mr. Duggan earlier on the day that the memo was written. The memo reports that Mr. Duggan had said that he was going for an increase in the bulk milk hauling rate for 1989 as he was not going to leave himself in a position where he would be losing money. Mr. Duggan could not recall this conversation, but agreed that the conversation could have occurred and that the memory of the writer of the memo would have likely been better on the day in question than Mr. Duggan's memory five years later. It is also to be noted that the financial records of Okanagan do not reflect a history of significant profitability in the years immediately preceding the fall of 1990, when Dairyland put the contract out to tender.

Okanagan's contract to haul the bulk milk was cancelled effective January 31, 1991. As a result of the loss of the contract, Dairyland terminated its oral lease with Okanagan for the workshop and office premises, effective March 31, 1991. Mr. Duggan agreed that he had never signed a lease with Dairyland and that once Okanagan had lost the contract, he expected the oral lease to be cancelled.

2.2 Kootenay Dairy Transport Ltd.

2.2.1 Overview of Kootenay's Business Hauling Milk

Kootenay was incorporated in 1971 to haul bulk milk in the Kootenay region to dairies in Nelson and Cranbrook. In addition some of this milk is brought to Vernon. Kootenay's employees, unlike Okanagan's, are not unionized and NOCA/Dairyland requires the milk to be delivered by unionized employees. Therefore an Okanagan truck meets the Kootenay vehicle that has collected the milk and the two trailers are switched in Salmo.

In 1987, a schedule of fixed assets showed that Kootenay owned four trailers for the hauling of milk, three other trailers, and three or four tractor units. One of the tractor trailer units that picks up the milk from the farmers in the Kootenays works out of Creston. Mr. Duggan stated at discovery that the other tractor trailer unit involved in the Salmo switch which was stationed in Vernon would park on Lot 1 only 40% of the time and on adjacent Dairyland property approximately 60% of the time.

2.2.2 Kootenay's Purchase of Lots Near Lot 1

Kootenay bought two lots on 34A Avenue in the vicinity of Lot 1 in 1988. These two lots total approximately 10,000 square feet and are about 500 feet from Lot 1. There was evidence that $4,700 was spent to level and gravel these lots. They do not appear to have been used very extensively by Okanagan or Kootenay before the expropriation, although sometimes employees' cars or trailers were parked there. Photographs taken prior to the expropriation show a number of pick up trucks and cars, presumably belonging to employees, on Lot 1 or adjacent land. The two lots on 34 A Avenue are zoned C1 -- Comprehensive Commercial Core which zoning does not permit a trucking operation or the parking of trailers and other trucking equipment. In correspondence dated July 13, 1990, in response to an inquiry from Mr. Duggan, the respondent reported that there was a very low probability of this property being rezoned from commercial to light industrial, the necessary zoning for a trucking operation. The claimants used these lots for parking trailers for several weeks after the expropriation but they have not been used since then. Kootenay claims the costs thrown away of acquiring, holding and improving these two lots in the vicinity of the expropriated land. Mr. Duggan stated that he would hope to recoup some of these expenses when he sells the lots.

2.2.3 Kootenay's Transport of Water

In 1988, Kootenay began transporting water for a supplier company known as Clearly Canadian. Two years later, in 1990, the water hauling contracts had increased hauling revenue from approximately $200,000 to $2,800,000 and earnings for the year, after taxes, from $57,000 to $172,000. Shareholders' salaries had increased from $3,000 to $112,000 over the same time period. In order to handle this continuing increase in water hauling, Mr. Duggan estimated that Kootenay had purchased at least 30 new water trailers by October 1990, most of them costing more than $40,000 each. The majority of these trailers had Clearly Canadian written on the sides in large letters. All of the drivers working out of Vernon for Kootenay hauled water, although much of the water hauling was done by independent operators who owned and serviced their own tractors.

Mr. Duggan stated that much of Kootenay's equipment would have parked on Lot 1 in 1990, although it was often only for brief periods. Kootenay also claimed that the loss of Lot 1 resulted in Kootenay losing the ability to sell equipment from this central location.

In October 1990, Kootenay's prospects for hauling more water were good and contracts for hauling water continued to increase between 1990 and 1992. By 1992 Kootenay's hauling revenue had increased to $11,000,000 and it had acquired approximately 60 trailers for hauling water, although many of these were used in the United States and had no contact with Vernon.

In cross examination Mr. Duggan agreed that, assuming Kootenay had a number of its trailers out on the road at any one time, it could not have parked as many as 16 trailers, for example, on Lot 1 nor would Dairyland have liked a number of trailers marked Clearly Canadian in such close proximity to their site. Mr. Duggan also agreed that by June 1990 Kootenay had acquired so many trailers that it had outgrown the Dairyland site.

2.2.4 Kootenay's Efforts to Purchase Other Property

In June 1990, after the respondent's letter giving notice of the cancellation of the lease of the land owned by C.P., Kootenay made an interim offer to purchase property from B.C. Marine Distributors. Mr. Duggan is not certain if he knew that Lot 1 was needed for the road widening at this stage. The offer was subject to rezoning by the Regional District of North Okanagan including permission for fuel tanks to be installed. The Regional District subsequently denied rezoning after a public hearing and the sale did not complete. Kootenay claims the costs thrown away on this attempt to purchase.

2.2.5 Kootenay's Purchase of Pleasant Valley Road Site

Eventually, in February 1991, Kootenay purchased land on Pleasant Valley Road. Mr. Duggan stated that the good features of this property were that it was already zoned appropriately, it was close to the Clearly Canadian well, and it was close to the highway. Kootenay is claiming the costs associated with purchasing this property and the costs to renovate the land and premises up until December, 1991, for a total of approximately $152,000. It is not claiming the cost of the property itself. These renovations included a major refit of the existing building and a significant extension. After the renovations were completed the new premises appeared modern, spacious, and well equipped. Mr. Duggan estimated the building area to be 20% larger than the building area that had been leased at Dairyland. The new site was approximately 87,000 square feet compared to 7,560 square feet for Lot 1.

2.2.6 Increased Costs from the New Site

Mr. Duggan suggested that the new site was less convenient in a number of ways than Lot 1 and the workshop and office rented from Dairyland. Before the expropriation, drivers were able to check in at both Okanagan and Dairyland offices at either end of their route. The proximity of Okanagan's premises to Dairyland, he said, minimized inconvenience when there were delays and generally made communication between the two offices easier. The proximity of the Dairyland site to downtown and to such facilities as the bank was also cited as an advantage, as was the ability to sell equipment from such a highly visible location.

After expropriation, Mr. Duggan indicated that there was no longer the convenience that came from the proximity to Dairyland and that extra trips to Dairyland from the new site were sometimes necessary. Both claimants have made claims for the extra costs of doing business from the new site.

During cross examination Mr. Duggan agreed that in fact no equipment had ever been sold from Lot 1.

 

3.  FAILURE TO DISCLOSE DOCUMENTS

During the hearing two sets of documents were produced for the first time. The respondent produced 66 pages of documents during the cross examination of Mr. Duggan which it had received in response to a subpoena served on Dairyland Foods. Although a few were internal Dairyland documents to which presumably the claimants would not have been privy, others concerned the claimants' contracts with Dairyland. Mr. Duggan admitted that he had received or signed several of these documents, although a significant number of the 66 pages had not previously been produced by the claimants. In addition, as already noted above, Mr. Duggan had earlier in his cross examination produced documents having to do with the installation of the fuel tanks on Lot 1 that he had found in his files overnight.

Both sets of documents were relevant. The first set from Dairyland related to the history of the contract between Okanagan and Dairyland for bulk milk hauling. The undisclosed documents included a contract for bulk milk hauling dated February 1983, a modification dated July 1983, and a contract for finished product hauling dated July 1983, all of which were signed by Lloyd Duggan. The bulk milk contract provided for the negotiation of a new rate for the bulk milk hauling for each year of the five year term. There were letters to Okanagan dated January 1984 and January 1985 which set out an increase in the bulk milk hauling rate from $1.46 per hectolitre to $1.56 and $1.62 per hectolitre respectively. A letter dated January 1986 confirmed that, because there had been no wage increases and no major equipment purchases in 1985, the bulk milk hauling rate would continue at $1.62 per hectolitre. A letter of December 1988 to Okanagan enclosed two copies of a new contract which Okanagan was requested to sign. There was also an unsigned contract dated in blank 1989 and a second annotated version which bears the handwritten note, "draft Jan 26/1990", both of which contained a number of provisions which were disadvantageous to the contractor, Okanagan. None of these letters or contracts had previously been disclosed, although they were addressed or copied to Okanagan or Mr. Duggan. Okanagan had produced a bulk milk contract dated 1963 and another dated 1968 together with the recent tender package provided by Dairyland and the correspondence relating to Okanagan's unsuccessful bid. During his evidence Mr. Duggan had denied that there were any further signed contracts for bulk milk and had also denied that Dairyland had entered into any written contracts after they had taken over from NOCA in 1981. Mr. Duggan had also stated that he could not remember Dairyland presenting him with any other bulk milk contracts for signature.

The second set of documents provided evidence as to the age of the fuel tanks on Lot 1, which suggested that they were 21 or 22 years old rather than the 10 to 12 years estimated by Mr. Duggan both at the discovery and during his initial testimony before the board. There were two purchase orders dated September 28, 1968 indicating delivery of two fuel tanks and two pumps to Okanagan, a letter from Home Oil to Okanagan dated November 15, 1968 confirming an agreement that the price for supply and installation of these items would be written off over five years' use of Home Oil fuel from the date of installation, after which ownership would be transferred to Okanagan for $1.00, and finally an invoice for these items dated March 28, 1974 which indicated that the price of $1.00 pursuant to the agreement dated November 15, 1968, had been paid.

Because of the claimants' failure to produce these documents, which Mr. Burke, claimants' counsel, himself characterized as "critical and very relevant", the respondent submits that the claims should be dismissed pursuant to R. 2 (5) of the Supreme Court Rules. This rule states:

(5) Where a person, contrary to these rules and without lawful excuse, …

(c) refuses or neglects to produce or permit to be inspected any document …

then

(f) where the person is the plaintiff, petitioner, or a present officer of a corporate plaintiff or petitioner, ... the court may dismiss the proceeding …

Section 12 of the board's Practice and Procedure Regulation, B.C. Reg. 452/87, (the "Practice Regulation"), specifically incorporates those Supreme Court Rules relating to discovery and inspection of documents to proceedings before the board. Rule 2 (5) is one of the rules relating to discovery of documents.

The board has previously considered R. 2 (5) in Re Bill's Frontier Restaurant Ltd. et al. and Province of British Columbia (1992), 47 L.C.R. 90. In that case the claimants had failed to produce a list of documents pursuant to the Rules or to provide copies of specified documents despite repeated requests and a fast approaching hearing date. This board held that the penalty under R. 2 (5) (f) was too severe a sanction in the circumstances of that case and instead ordered that the claimants produce a list of documents by a specified date and forego certain interest as a result of the delay that they had occasioned.

The evidence about the circumstances surrounding the failure of Okanagan and Kootenay to produce relevant documents in the present case was conflicting. The respondent decided not to pursue this conflict nor to cross examine on any of the affidavits that had been filed relevant to this issue. While the failure of the documents to be produced at an earlier stage is certainly very regrettable, the board notes that the penalty under R. 2 (5) (f) is discretionary. The board agrees with the reasoning in Bill's Frontier Restaurant, that the dismissal of the proceeding for failure to produce the documents is too severe in these circumstances. The application pursuant to R. 2 (5) is therefore dismissed.

 

4. APPLICATION TO STRIKE PLEADINGS

In the alternative, the respondent applies for some or all of the claims to be dismissed without further hearing pursuant to Rule 19 (24).

Rule 19 (24) provides:

(24) At any stage of a proceeding the court may order to be struck out or amended the whole or any part of an endorsement, pleading, petition or other document on the ground that

(a) it discloses no reasonable claim or defence as the case may be,

(b) it is unnecessary, scandalous, frivolous or vexatious,

(c) it may prejudice, embarrass or delay the fair trial or hearing or the proceeding, or

(d) it is otherwise an abuse of the process of the court,

and the court may grant judgment or order the proceeding to be stayed or dismissed and may order the costs of the application to be paid as special costs.

Rule 19 is not one of the Supreme Court Rules expressly adopted in the board's Practice Regulation. However, in several cases, the board has decided that where the existing rules are silent, it has the jurisdiction to govern its own practice and procedures subject to the rules of fairness and natural justice. See, for example, McPhail's Equipment Co. v. Surrey (District) (1989), 44 L.C.R. 173. This board previously considered its jurisdiction to strike pleadings pursuant to R. 19 (24) in Roadmaster Auto Centre Ltd. v. City of Burnaby (1994), 53 L.C.R. 161 and decided that it had the necessary authority.

The respondent submits that the remaining claims should be dismissed without further hearing as they are without merit or value. It is not clear upon what subrule of R. 19 (24) the respondents rely, although the most applicable subrule for a claim that has no merit or value is R. 19 (24) (a), a pleading that discloses no reasonable claim. Rule 19 (27) provides that no evidence is admissible on an application under subrule (24) (a) and the test for striking pleadings under R. 19 (24) (a) requires the court to assume that the facts set out in the pleadings can be proved. See Hunt v. Carey Can. Inc. (1990), 49 B.C.L.R. (2d) 273 (S.C.C.). If the allegations of fact set out in the claim are assumed to be true, then there is no basis for striking the claim under R. 19 (24) (a).

 

5. RULE 18A — SUMMARY TRIAL

The respondent also applies in the alternative for the claims to be dismissed by summary trial pursuant to R. 18A.

Rule 18A provides:

(1) In

(a) an action in which a defence has been filed, …

a party may apply to the court for judgment either upon an issue or generally.

5.1 Jurisdiction

Neither the Expropriation Act, S.B.C. 1987, c. 23 (the "Act") nor the Practice Regulation under the Act addresses the jurisdiction of the board to hear summary trial applications pursuant to Supreme Court Rule 18A. However, as stated above, where the existing rules are silent, the board has jurisdiction to govern its practice and procedure, with the proviso that it is in the interests of fairness and natural justice. In McPhail's Equipment Co. this board decided that it had the authority to make a preliminary legal determination as to whether the claim was statute-barred prior to the compensation hearing. It was not cost efficient to embark on a full compensation hearing if the answer to the preliminary question made the quantum of compensation redundant. Similarly, in Country Style Holdings Inc. v. British Columbia (Ministry of Transportation and Highways) (1993), 51 L.C.R. 1, this board considered the question of whether it had jurisdiction to order that the issues of liability and quantum be heard and determined in two stages. After a full canvassing of the issues, the board held that it did have jurisdiction and that liability and quantum should be heard and determined separately.

McEachern C.J.B.C. discussed the origin of the summary trial procedure in Rule 18A in Inspiration Management Ltd. v. McDermid St. Lawrence Limited (1989), 36 B.C.L.R. (2d) 202 at p. 211:

Rule 18A was added to the Rules of Court in 1983 in an attempt to expedite the early resolution of many cases by authorizing a judge in chambers to give judgment in any case where he can decide disputed questions of fact on affidavits ... unless it would be unjust to decide the issues in such a way.

And at p. 213:

In my judgment, it must be accepted that while every effort must be made to ensure a just result, the volumes of litigation presently before our courts, the urgency of some cases, and the cost of litigation do not always permit the luxury of a full trial with all the traditional safeguards in every case, particularly if a just result can be achieved by a less expensive and more expeditious procedure.

The board agrees that R. 18A offers a practical procedure in appropriate circumstances. It is satisfied that the board has jurisdiction to determine issues pursuant to this rule where the requirements of the procedure can be met, including the opinion of the board that use of this procedure would not be unjust.

The issue was raised whether an application pursuant to R. 18A can be made part way through a hearing on the substance. The wording of R. 18A stipulates that an application may only be brought after a statement of defence has been filed. It is true when the rule is read as a whole, the various provisions, not surprisingly, appear to contemplate the application being made prior to commencement of a trial or hearing. However, there is nothing in the rule which precludes an application being brought part way through a hearing, if the other requirements are met.

In this case the compensation hearing was adjourned after two weeks of hearing on September 17, 1993. Examination and cross examination of Mr. Duggan, the principal of both claimants, was completed before the adjournment (on the basis that Mr. Burke's withdrawal of various claims was binding), but evidence from at least four experts and other lay witnesses remained. The claimants submitted that it was unfair to consider a R. 18A application part of the way through a hearing when not all the evidence had been heard. The board was being asked, they said, to make findings of fact when the claimants' case was incomplete.

The comments of McEachern C.J.B.C. in Inspiration Management at p. 215 are of assistance:

In deciding whether the case is an appropriate one for judgment under rule 18A, the chambers judge will always give full consideration to all of the evidence which counsel place before him but he will also consider whether the evidence is sufficient for adjudication. But even then [in the absence of evidence from a principal player], as the process is adversarial, the judge may be able fairly and justly to find the facts necessary to decide the issue.

And at p. 214:

The procedure prescribed by R. 18A may not furnish perfect justice in every case, but that elusive and unattainable goal cannot always be assured even after a conventional trial and I believe the safeguards provided by the rule and the common sense of the chambers judge are sufficient for the attainment of justice in any case likely to be found suitable for this procedure.

The fact that the claimants' case is incomplete is a factor to be considered by the board in deciding whether it can find the necessary facts and whether it is just to do so but it is not a reason to veto the procedure outright.

As to the rationale for a R. 18A application at this stage, at the time of the adjournment, the compensation hearing was scheduled to run for a further two weeks. The compensation hearing had not been resumed or rescheduled prior to the hearing of this application on February 6 to 8, 1995. In the unusual circumstances of a lengthy and indeterminate adjournment in the middle of a lengthy compensation hearing, an application pursuant to R. 18A provides the same potential of an expeditious and less costly procedure as an application made prior to the commencement of a hearing.

In conclusion, the board is satisfied that it has jurisdiction to consider the application pursuant to R. 18A in this case.

5.2 Reliance on Withdrawal of Pleadings during Hearing

During the cross examination of Mr. Duggan at the compensation hearing, counsel for the claimants announced that he was withdrawing a number of the claims that related to Okanagan's loss of the bulk milk contract. Counsel indicated that he made these withdrawals on instructions from his client, an assertion that in the end was not disputed. However, the issue arises as to whether on an application to dismiss the remaining claims, the board is able to rely on counsel's withdrawal of specified claims.

The respondent submits that counsel's withdrawal of claims during the hearing amount to an admission and are binding on the client. The respondent relies on such authorities as Propp v. Fleming (1968), 67 D.L.R. (2d) 630 (B.C.C.A.); Rogers v. Rogers (1981), 26 B.C.L.R. 111 (S.C.); Adamoski v. Mercer (1984), 54 B.C.L.R. 117 (S.C.) and Cordery's Law Relating to Solicitors, 8th ed. (Butterworths, London, 1988). While the claimants ultimately agreed that instructions to withdraw the claims had been given, their position was that the withdrawal of the claims should not be binding on the claimants on the basis of natural justice. The claimants rely on Bank of Montreal v. Arvee (1978), 93 D.L.R. (3d) 58 (S.C.); Norlympia Seafoods Ltd. v. Dale & Co. Ltd. (1982), 41 B.C.L.R. 144 (C.A.); Hawitt v. Campbell (1983), 46 B.C.L.R. 260 (C.A.); McLachlan v. Somerton (1987), 10 B.C.L.R. (2d) 209 and Chavez v. Sundance Cruises Corp. (1993), 77 B.C.L.R. (2d) 328 (C.A.).

These cases involve a solicitor's authority to bind his client by making a formal admission or by making a compromise or settlement of the action. While a solicitor's admissions are binding on the client, withdrawal of an admission can be made in some circumstances. Withdrawal of admissions were permitted where the admission had been inadvertent or a mistake, or where there was a misapprehension of the facts and new evidence was obtained (See Hawitt and McLachlan) or where the party had never authorized the solicitor to make a settlement (See Bank of Montreal). Withdrawal of admissions was refused where it appeared the party had given instructions or at least not countermanded the admission, but subsequently simply changed his or her mind (See Rogers, Adamoski and Propp).

In Norlympia, the British Columbia Court of Appeal held that the test for withdrawal of admissions was when it is in the interests of justice to do so. McFarlane J.A. stated that the test for permitting an amendment to pleadings, which in effect withdrew an admission, is whether in all the circumstances the court is satisfied that it is in the interests of justice. It is not necessary to show the admission has been made hastily or by inadvertence or that there are now new facts which have come to light, although all of these factors should be considered by the judge in deciding whether it is in the interests of justice. This test was approved and followed in the more recent Court of Appeal decision in Chavez.

In the present case the board is satisfied from the evidence that instructions to make the admissions and withdraw the claims had been given. Mr. Burke, counsel for the claimants, stated:

It has become painfully obvious that counsel for the respondent was right when he told you at the commencement of this hearing that some of the claims have no basis in fact. Therefore, the claims of Okanagan, which I am instructed the claimant wishes to abandon or withdraw at this time, are those set out in paragraph three of the amended statement of claim where the claim is made for the loss of the claimant's business involving ... the transport of milk. Also paragraph five and seven of Okanagan's claim.

I have also sought and received instructions from Kootenay Dairy Transport Ltd. to discontinue and abandon paragraph five of Kootenay's amended statement of claim.

(Transcript, v. 9, p.2)

In this case, unlike the authorities cited above, the withdrawal of claims or admissions occurred during the hearing at least in part as a result of new documentary evidence that came out in the cross examination of Mr. Duggan. The basis of the claimants' position was that the admissions had been made in such close proximity to counsel's withdrawal as solicitor that it was not in the interest of justice to rely on them.

After consideration of the circumstances of this case and review of the evidence, the board is satisfied that the interests of justice do not support withdrawing the claimants' admissions or withdrawal of claims. Therefore the withdrawal of claims is binding on the claimant.

5.3 Test for Rule 18A Application

Rule 18A (5) provides

(5) On the hearing of the application, the court may grant judgment in favour of any party either upon an issue or generally, unless

(a) the court is unable on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues of fact or law, or

(b) the court is of the opinion that it would be unjust to decide the issues on the application,

and may impose terms respecting enforcement of the judgment, including a stay of execution, as it thinks just, and may award costs.

In Inspiration Management Ltd. McEachern C.J.B.C. set out the practice to be followed in R. 18A applications at p. 214:

[i] the chambers judge cannot give judgment unless he can find the facts necessary to decide issues of fact or law; …

[ii] the chambers judge, even if he can decide the necessary factual and legal issues, may nevertheless decline to give judgment if he thinks it would be unjust to do so.

He went on to comment that:

Chambers judges should be careful but not timid in using R. 18A for the purpose for which it was intended.

And at p. 215:

If the chambers judge can find the facts, then he must give judgment as he would upon a trial unless for any proper judicial reason he has the opinion that it would be unjust to do so.

Each of the remaining claims will be considered individually according to this test. In the event that the board is wrong and the withdrawal of the claims is not binding, the withdrawn claims will also be considered under R. 18A.

 

6. OKANAGAN'S CLAIMS

6.1 Okanagan's Claim for Market Value of Lot 1 and the Improvements

Okanagan's first claim was for the balance of compensation for the market value of Lot 1 over the $45,000 it had already been paid. Expert evidence on the market value of Lot 1 was not heard at the compensation hearing although the appraisers' reports were entered as exhibits. In a report dated June 14, 1990, and amended by a supplementary letter dated May 27, 1993, Mr. Rivard on behalf of the respondent estimated the market value of Lot 1 and its improvements on October 1, 1990 at $45,000. This sum was paid by the respondent to the claimant Okanagan in two installments on September 28, 1990 and July 26, 1993. The claimants filed two reports, one from Mr. Cavazzi dated May 14, 1993, which estimated the market value of Lot 1 and its improvements on October 1, 1990 at $51,200, and one from Mr. Grant dated July 19, 1993, which estimated the value at $84,000. Valuation of the improvements ranged from a nominal $5,000 estimated by Mr. Rivard and Mr. Grant to $11,545 estimated by Mr. Cavazzi.

Other evidence that came out during the compensation hearing relevant to market value included documents that suggested that some of the improvements associated with Lot 1 by the three appraisers, such as the power pole, the plugs and the shed, had actually been on adjoining land owned by C.P. and leased by Okanagan, rather than on Lot 1. In addition, documents produced by Mr. Duggan during his cross examination established that the underground steel tanks, the pumps and the power pole were approximately 21 years old rather than the 10 to 12 years estimated by Mr. Duggan, which estimation was expressly relied on by Mr. Cavazzi. There was also reference to evidence intended to be led by the respondent that would suggest that Lot 1 did not have direct legal access to 25th Avenue, but this allegation was not in fact established at the time of the adjournment.

Without the benefit of any further evidence or submissions on these valuations the board is of the opinion it does not have sufficient facts to make a determination of the market value of Lot 1 and the improvements and, accordingly, the R. 18A application is dismissed for this claim.

6.2 Okanagan's Claim For the Market Value of its Leasehold Interest

This claim had been abandoned at the beginning of the compensation hearing.

6.3 Okanagan's Claim for Loss of the Bulk Milk Contract

This claim is for $510,000 for business losses under s. 33 of the Act arising out of the loss of the bulk milk contract with Dairyland. It was one of the claims abandoned on the morning of September 17, 1993. In the event that the board is wrong in relying on Mr. Burke's withdrawal of this claim on behalf of Okanagan, the board will consider it under Rule 18A.

Okanagan's claim is that, if the expropriation of Lot 1 had not happened, it would not have faced the alleged extra costs of driving to the cardlock, as well as the extra costs for fuel and parking. If the expropriation had not occurred, it submits that its bid price would have been lower by three cents per hectolitre, and the resultant bid price of $1.65 per hectolitre would likely have meant that Okanagan would have retained the bulk milk contract, together with the other hauling business for Dairyland associated with this contract.

Section 33 (1) (a) of the Act provides for compensation for "reasonable costs, expenses and financial losses that are directly attributable to the disturbance caused ... by the expropriation". Therefore, it is only if the loss of the bulk milk contract is directly attributable to the expropriation that this claim can succeed.

First of all, the board observes that the tendering of this contract by Dairyland was a procedure not out of keeping with normal business practice of a large company seeking to control its costs and risks. Although Okanagan had held this particular contract for 29 years, there was a history of Dairyland awarding contracts to a number of companies. In 1984, for example, Dairyland had awarded another contract for hauling bulk milk previously held by Okanagan to the parent company of the competitor that won the 1990 tender. Mr. Duggan appears to have told Dairyland in September 1989, a year before the expropriation, that Okanagan's price for this contract would be increasing. Mr. Duggan had resisted signing new contracts with Dairyland in early 1989 and early 1990, which was not perhaps surprising, since the contracts contained new terms that were disadvantageous to Okanagan. Despite the lack of successful negotiations, Okanagan had been able to hold onto the bulk milk hauling work without a current contract being signed. However, the evidence showed that Dairyland was concerned about getting a contract signed. The tender package contained a draft contract very similar to the annotated contract from Dairyland files labelled with the handwritten note "draft Jan 26/1990" which Mr. Duggan had already refused to sign. The implication from the evidence is that, as soon as Dairyland knew Okanagan wanted an increase, it put the contract out to tender to increase the likelihood that within a few weeks it would have a binding contract signed on its terms and at the most competitive rate.

In addition, the evidence at the hearing did not support Okanagan's various claims for increased costs arising out of the expropriation. First, Okanagan's claim that three cents of the increase in bid price was due to an extra 20 minutes for 50% of the nine hour shifts to make special trips to the cardlock did not stand up. The evidence was that the number of shifts in which there were special trips to the cardlock was much lower than 50%, and more in the range of 15%. In any event, Mr. Duggan's acknowledgement that the union contract required a minimum shift of nine hours and that drivers sometimes went home early because their work was completed, undercut the claim for extra costs for any increased time to drive to the cardlock. Further, given that the fuel tanks were in fact 21 years old, rather than 10 to 12 years old, Okanagan could not count on their continued use for an extended period. Cardlocks might have become necessary in time in any event. Second, the documentary evidence from Shell contradicted any suggestion that the loss of the in-ground fuel tanks alone led to an increase in fuel price. Third, while the claimants did make payments for parking space after the expropriation, the evidence did not support this as a reason to increase the bid price as a direct result of the expropriation. Okanagan was paid $42,500 for the market value of Lot 1 in September 1990 and this money was available to it to purchase replacement property. The respondent also made some land near Dairyland available to Okanagan on a temporary basis, and although some dirt was dumped on part of this land, there was still considerably more space than on Lot 1 for parking. The board also notes that Lot 1 was only 7,560 square feet and it is the replacement of parking for this space only that is at issue, not replacement of any of the land owned by C.P. In these circumstances, Okanagan cannot logically claim that, as a result of the expropriation, it needed to increase the bid price to pay for extra costs for parking and, in fact, Mr. Duggan's explanation of how he calculated the bid did not include anything for extra costs for parking.

Further, the evidence revealed some other factors that appeared to contribute to Okanagan's increase in bid price other than the acknowledged increase in union wages. There were the new and disadvantageous contract terms such as the date by which Dairyland was required to make its payments to Okanagan being delayed by 15 to 25 days, the requirement for drivers to carry out quality control tests on the milk without extra payment, and a potential for Dairyland to terminate the contract without notice if Okanagan incurred so much as a parking ticket or a speeding ticket. One or more of these new terms would presumably have affected Okanagan's bid price to some degree. There was also Okanagan's recent financial history pointing to a failure to achieve significant profitability.

Finally, there had been a marked increase in fuel prices at the time of the bid and Okanagan's bid contained a clause that provided for a correlation between fuel prices and the basic bid price. Dairyland sought a clarification of this clause which resulted in a confirmation from Okanagan that the bid price was actually $1.715 on November 13, 1990 rather than the $1.68 figure submitted a few days earlier. Thus Okanagan's bid price was actually nine and a half cents higher than its existing price, and six and a half cents higher than that attributed to the successful competitor, with Dairyland bearing the risk for any future fluctuations in fuel prices.

In summary, a contract is put out to tender in circumstances which indicates that Dairyland wishes to obtain a signed contract that reduces its risks in various ways. Okanagan, which understandably does not want to be in a position where it is losing money, takes a number of factors into account in preparing its bid. There is the acknowledged greater than 3% increase in the unionized wages in both April, 1990 and April, 1991 which results in wages and benefits rising to 67% of haulage revenue in 1990, up from 60% in 1985 and 1986. The union contract also requires a minimum nine hour shift which appears to result in some inefficiencies. The fuel costs have risen from 40 cents per litre in July, 1990 to 50 cents per litre by November, 1990 when the bid is being made, which is an increase of 25%. Okanagan's bid formula puts the risk of further fluctuations in price on Dairyland, and the actual bid price turns out on clarification to be three and a half cents per hectolitre greater than the price that was used in the bid. The contract changes show a number of disadvantageous factors, one or more of which is presumably translated into the bid price. There is the loss of the land leased from C.P. Finally, there is the expropriation of Lot 1 and the loss of the use of the fuel tanks that were located on it. While the expropriation may have had a minor effect on the bid price, if Mr. Duggan's calculation of extra costs for time to make special trips to the cardlock is corrected by using 15% of the shifts instead of 50% of the shifts, the extra cost is less than one cent per hectolitre. Even this extra cost is undermined by the lack of evidence that any extra costs were actually incurred because the collective agreement required payment for a minimum shift of nine hours.

After reviewing all of the evidence, the board is of the view that the expropriation of Lot 1 had an inconsequential impact on Okanagan's bid for the bulk milk hauling contract and Okanagan's bid was doomed to failure whether or not the expropriation had occurred. The board is satisfied that it has sufficient facts to conclude that the loss of the bulk milk contract was not directly attributable to the expropriation. As a result, Okanagan's claim for the loss of business from the bulk milk contract is dismissed under R. 18A.

The board is also satisfied that it is not unjust to dismiss this claim at this stage. This was a R. 18A application brought with several months' notice and the parties had an obligation to put what evidence they thought was relevant for determination of the issues before the board. Mr. Duggan, as the principal of Okanagan, was in the unique position of being able to give the crucial evidence about the factors entering into Okanagan's bid for the bulk milk contract and the influence, if any, of the expropriation of Lot 1. It is true that, if the hearing on compensation were to be continued, further evidence from other non-expert witnesses such as employees or former employees of Okanagan, Kootenay, Dairyland, Shell, Petro-Canada, the successful competitor, or the respondent might possibly have served to support or undermine any one particular point. However, after reviewing Mr. Duggan's evidence as a whole and the various documents that have been produced, the board does not think that it is unjust at this stage to decide on a R. 18A application that the loss of the bulk milk contract was not attributable to the expropriation.

The board notes that almost all of the other claims by both claimants hinge on the essential point of whether the loss of the bulk milk contract was caused by the expropriation. If this claim falls, as it has, most of the other claims collapse like a house of cards.

6.4 A Okanagan's Claim for Costs to Move

Okanagan claims $4,000 for its costs to move the shop and office facilities. Section 33 (1) (b) provides for compensation for "reasonable costs of relocating on other land, including reasonable moving, legal and survey costs that are necessarily incurred in acquiring a similar interest or estate in other land" (emphasis added). The shop and office facilities were not on Lot 1 but on land leased from Dairyland on a long term but unwritten lease. Lot 1 was an empty lot but for the underground fuel tanks and pumps. Thus any costs to move were not incurred in acquiring a similar interest to Lot 1 as required under s. 33 (1) (b).

Further, any costs to move the offices and shop claimed under s. 33 (1) (a) must be directly attributable to the expropriation. The costs to move the shop and offices are not related to the expropriation of Lot 1 unless the expropriation caused Okanagan's loss of the bulk milk contract and the termination of the lease with Dairyland for the shop and office premises. Since the claimants have abandoned the claim for Okanagan's loss of the bulk milk contract and in any event the board has decided that the loss of the bulk milk contract was not directly attributable to the expropriation, the causal relation between the move of the shop and office premises after Dairyland's termination of the lease and the expropriation of Lot 1 by the respondent is not made out.

The board is satisfied that the requirements of R. 18A are met and it dismisses Okanagan's claim for moving expenses.

6.4 B&C Okanagan's Claim for Costs for Alternative Parking Space

Okanagan also claims the cost of renting two sets of parking spaces. First, it claims $1,248 or $311.96 per month that it paid to the respondent from October 1, 1990 to January 31, 1991 for the cost of renting back from the respondent Lot 1, the land leased from C.P., and other land that was located on the former C.P.R. right of way and subsequently acquired by the respondent. Second, it claims $11,556 for half of the cost to rent alternative parking premises from A1 Machine & Welding Ltd. for three years from October 15, 1990 to October 15, 1993.

The $1,248 paid to the respondent for renting back Lot 1 and land on the former C.P.R. right of way is not disputed. It is true that a portion of the $311.96 monthly rent was for the C.P.R. right of way adjacent to Lot 1 and this portion of the expense was not directly attributable to the disturbance caused by the expropriation of Lot 1. However, the portion of the expense related to the rental of Lot 1 is directly attributable to the expropriation. While Okanagan had the temporary use of a different parcel of the C.P.R. right of way negotiated with the respondent, as well as $42,500 compensation for the market value of Lot 1 which it could use to purchase replacement land for parking, the board agrees that the costs for renting back the expropriated land on a temporary basis is a reasonable expense under s. 33. The rent was not allocated between Lot 1 and the land formerly owned by C.P., but Lot 1 was roughly double the area of the land leased from C.P. by the claimants. Therefore, doing the best that it can, the board estimates that 2/3 of the rent can be attributed to the rental of Lot 1.

The board is satisfied that the claimant Okanagan is entitled to 2/3 of $1,248 or $832 for the costs paid to the respondent for renting back Lot 1 on a temporary basis.

Okanagan commenced renting a large tract of land adjacent to the Petro-Canada cardlock from A1 Machine & Welding Ltd. on October 15, 1990. The board notes that the space rented from A1 Machine is many times larger than the 7,560 square feet comprising Lot 1. Between the date of the expropriation and the date of purchase of the new property on Pleasant Valley Road, during which period Okanagan continued to do work for Dairyland, the claimants had the temporary use of the lots owned by Kootenay and the C.P.R. right of way negotiated with the respondent. Both sites were very close to Lot 1 and, while the two lots owned by Kootenay did not have the necessary zoning for a trucking operation, the evidence was that they were available for parking trucking equipment immediately after the expropriation on a temporary basis. By October 1990 Kootenay had acquired approximately 30 trailers for the hauling of water and it continued to acquire more trailers over the next three years. Mr. Duggan admitted that Kootenay had outgrown Lot 1 by 1990. Okanagan continued to rent the A1 Machine land after the new property on Pleasant Valley Road had been purchased in February 1991 because, although it had an area of 87,000 square feet, the new site did not have sufficient level ground to park all the necessary equipment. However, the comparison must only be with the 7,560 square feet comprising Lot 1 and not with land owned by Dairyland, the loss of which could only be claimed if the loss of the bulk milk contract and the consequent termination of the lease of land from Dairyland were directly attributable to the expropriation. The new site did have at least 7,500 square feet equivalent to Lot 1 available for parking.

After considering all the evidence, the board is satisfied that the requirements of R. 18A are met. The rental of parking space from A1 Machine & Welding Ltd. is not directly attributable to the expropriation of Lot 1, either on a temporary basis immediately after the expropriation, or on a long term basis after the purchase of the new property on Pleasant Valley Road. This claim for rental of parking space is therefore dismissed.

6.5 Okanagan's Claim for the Higher Costs of Operating at the New Location

Okanagan's claim for $135,000 for the higher cost of operating at the new location was one of the claims abandoned on September 17, 1993. It included loss of rental income from Kootenay, and increased costs for fuel and drivers' wages attributable to the expropriation of Lot 1, and the loss of the in-ground fuel facilities. In the event that the board is wrong in relying on Mr. Burke's withdrawal of this claim on behalf of Okanagan, the board will consider it under R. 18A.

Both the loss of rental income from Kootenay and any alleged increase in drivers' wages because of the new location, are related to the loss of the shop and office premises on Dairyland property rather than loss of Lot 1. The loss of the shop and office premises are not directly attributable to the expropriation of Lot 1 as required by s. 33 (1) (a) unless the expropriation caused Okanagan's loss of the bulk milk contract and the termination of the lease with Dairyland for the shop and office premises. Since the claimants have abandoned the claim for Okanagan's loss of the bulk milk contract and, in any event, the board has decided that the loss of the bulk milk contract was not directly attributable to the expropriation, the causal relation between these claims and the expropriation of Lot 1 is not made out.

As stated above, the documentary evidence from Shell contradicts any increase in costs for fuel as a result of the loss of the in-ground tanks.

Thus the board is satisfied that the requirements of R. 18A are met and it dismisses this claim.

6.6 Okanagan's Claim in the Alternative to 6.3 and 6.5

A claim was made in the alternative to the claims in 6.3 and 6.5 for the loss of special economic advantages to the claimant pursuant to s. 30 (2) arising out of Okanagan's use and occupation of the land. Section 30 (2) provides that:

Where the market value of land … does not include the value of

(a) a special economic advantage to the owner arising out of his occupation or use of the land …,

the value of the advantage … shall be added to the market value [of the land].

The alleged special economic advantages of Lot 1 include the fuel tanks, the high visibility of the site for advertising and selling equipment, the proximity to Dairyland, to the workshop and office facilities leased from Dairyland, to the two lots owned by Kootenay, to the C.P.R. right of way, to the centre of downtown Vernon, and to three bulk fuel facilities.

The 21 year old fuel tanks on Lot 1 may have been convenient but the evidence does not support that they provided a special economic advantage to the claimants. The proximity of Lot 1 to the Dairyland plant may also have been convenient while the contract for hauling bulk milk continued. However, the board has found that the loss of the bulk milk contract was not directly attributable to the expropriation of Lot 1, and therefore the consequent termination of the lease with Dairyland for the shop and offices is not causally related to the expropriation of Lot 1. There was not any evidence that the proximity of three bulk fuel tanks was an economic advantage. Mr. Duggan stated that there were usually arrangements to purchase fuel from only one facility at a time since the negotiated price was dependent on volume. There was no evidence that there was a special economic advantage to the proximity of Lot 1 to downtown or to the two Kootenay lots which were scarcely used because the zoning did not permit any trucking operations. The claimants' business did not benefit from advertising and neither company had ever sold equipment from Lot 1.

After reviewing the evidence and taking into account the finding that the loss of the bulk milk contract was not attributable to the expropriation, the board is satisfied that the claim for special economic advantages is not supported. The requirements for R. 18A are met and this claim is dismissed.

6.7 Okanagan's Claim for the Increased Risk of Losing Profits from the Loss of Kootenay's Bulk Milk Contract

Okanagan's claim for $40,000 for the increased risk of losing its profit from Kootenay's bulk milk contract as a result of the presence in Vernon of the successful bidder for Okanagan's bulk milk contract was abandoned on September 17, 1993. In the event that the board is wrong in relying on Mr. Burke's withdrawal of this claim on behalf of Okanagan, the board will consider it under Kootenay's claim.

6.8 Okanagan's Claim in the Alternative to Kootenay Claim for the Costs to Relocate

Kootenay has made a claim for costs to relocate to the new premises in the approximate sum of $152,000. If Kootenay is unsuccessful in its claim for these costs, Okanagan claims them in the alternative. The evidence and facts surrounding this claim will be considered under Kootenay's claim.

 

7. KOOTENAY'S CLAIMS

7.1 Kootenay's Claim For the Market Value of its License to Occupy the Land

This claim was abandoned at the beginning of the compensation hearing.

7.2 A Kootenay's Claim for Costs Thrown Away on Unsuccessful Attempt to Purchase Replacement Property

Kootenay is claiming $500 for the costs thrown away in attempting to purchase property from B.C. Marine Distributors in June 1990. This cost can be claimed under s. 33 if it is directly attributable to the expropriation of Lot 1 or is a reasonable cost incurred in acquiring a similar interest to Lot 1. At the time that Kootenay entered into an interim agreement for this property, the evidence was that Mr. Duggan was uncertain as to whether he knew that Lot 1 would be expropriated. In any event, Mr. Duggan agreed that Kootenay's acquisition of numerous trailers for the hauling of water meant that it had outgrown Lot 1 by 1990. Thus, the attempt by Kootenay to purchase this property was not attributable to the expropriation of Lot 1 nor was it to purchase a similar interest to Lot 1.

The board is satisfied that the test for R. 18A is met and it dismisses this claim.

7.2 B Kootenay's Claim for Costs for Alternative Parking Space

Kootenay is claiming $11,556 for half the cost of renting land from A1 Machine and Welding Ltd. for three years. This claim is dismissed on the same basis as Okanagan's claim for the other half of these costs.

7.2 C Kootenay's Claim for Costs Thrown Away on the Two Near-by Lots

Kootenay is claiming $2,500 for the costs thrown away in purchasing two lots in 1988 near Lot 1 that are now no longer useful. Although the evidence on the breakdown of this figure was somewhat vague, it includes the legal costs and taxes to acquire these two lots, the taxes paid since the purchase and some of the $4,700 costs to clear and gravel the two lots.

The zoning of these lots is Commercial with a very low probability for rezoning to light industrial, the zoning necessary for a truck operation. There was no evidence from Mr. Duggan that the likelihood of rezoning in 1988 was any different. These lots were used very little by the claimants before the expropriation and, if the expropriation had not occurred, the zoning did not permit any use related to trucking to have been developed. The zoning of these lots is independent of the expropriation.

In the circumstances, the board is satisfied pursuant to s. 33 (1) that the costs of acquiring and maintaining this property were not thrown away because of the expropriation of Lot 1. Therefore the board dismisses this claim pursuant to R. 18A.

7.2 D Kootenay's Claim for Costs to Move

Kootenay is claiming $4,000 for the costs of moving to the new location. This is a duplication of the claim made by Okanagan and the claim for costs is dismissed on the same basis.

7.3 A Kootenay's Claim for Costs of Purchasing Replacement Property

Kootenay claims $3,023 for legal fees and taxes for the purchase of the replacement property on Pleasant Valley Road. There is documentary evidence of legal fees and disbursements of $1,158.15, property purchase tax of $1,485, and building permit fees of $380.

Under s. 33 these costs can be claimed if they are directly attributable to the expropriation of Lot 1 or are reasonable costs in acquiring a similar interest to Lot 1. Lot 1 was only 7,560 square feet and did not have any improvements on it but for the pumps and underground fuel tanks. The new property had improvements on it to replace the office and workshop leased from Dairyland. Costs to replace the offices and shops can only be claimed if the loss of the bulk milk contract and the consequent termination of the lease with Dairyland had been directly attributable to the expropriation of Lot 1. Although there was evidence that Kootenay had outgrown Lot 1 and the new property was significantly larger than Lot 1 and had buildings on it, the board accepts that those costs attributable to purchasing a similar interest to Lot 1 are compensable.

It does not appear that the legal costs would have been significantly different for the property purchased or a smaller property similar to Lot 1. However, since Lot 1 did not have the offices and workshops, the costs of the building permit are not costs associated with acquiring a similar interest to Lot 1. The property purchase tax paid for the new property of $1,485 is correlated to the purchase price of $148,500. If the new property had not had a building on it the purchase price would have been less. Assuming that the market value of Lot 1 falls somewhere within the range offered by the appraisal experts, the property purchase tax for a similar interest to Lot 1 is between $450 and $840. Solely in order to determine a reasonable cost in the absence of a determination of the market value of Lot 1, the board concludes that using $650 as the midpoint of this range for the property purchase tax would be appropriate.

Therefore the board orders that the respondent pay $1,158.15 for legal fees and disbursements plus $650 for property purchase tax for a total of $1,808.15 to Kootenay for costs for purchasing replacement property.

7.3 B Kootenay's Claim for Costs of Renovations on Replacement Property

Kootenay claims approximately $149,000 for renovations to the buildings at the Pleasant Valley site up until December, 1991.

Under s. 33 these costs can be claimed if they are directly attributable to the loss of Lot 1 or are reasonable costs in acquiring a similar interest to Lot 1. Lot 1 did not have any buildings and the loss of the shop and office premises leased from Dairyland can only be claimed if the loss of the bulk milk contract and the consequent termination of the Dairyland lease are directly attributable to the expropriation of Lot 1. The board has decided otherwise and therefore this claim is dismissed.

7.4 Kootenay's Claim for the Higher Costs of Operating at the New Location

Kootenay claims $295,000 for business loss for higher costs of operating at the new location and for the loss of opportunity to market used equipment from Lot 1.

Kootenay made relatively little use of Lot 1. Claims for higher costs at the new location are related to the loss of the shop and office premises on Dairyland property rather than loss of Lot 1. The loss of the shop and office premises are not directly attributable to the expropriation of Lot 1 as required by s. 33 (1) (a) unless the expropriation had caused Okanagan's loss of the bulk milk contract and the termination of the lease with Dairyland for the shop and office premises. The causal relation between this claim and the expropriation of Lot 1 is not made out.

There was no evidence that any equipment had ever been marketed by Kootenay from Lot 1.

Thus the board is satisfied that the requirements of R. 18A are met and this claim is dismissed.

7.5 Kootenay's Claim for Increased Risk of Losing its Bulk Milk Contract

Kootenay's claim for $124,000 for increased risk of losing its bulk milk contract was one of the claims abandoned on September 17, 1993. Okanagan also claims $40,000 for the increased risk of losing its profit from Kootenay's bulk milk contract. In the event that the board is wrong in relying on Mr. Burke's withdrawal of these claims on behalf of Kootenay and Okanagan, the board will consider them under R. 18A.

These claims were based on the premise that the successful bidder for the former Okanagan contract to transport bulk milk might now underbid Kootenay for its bulk milk contract. Mr. Duggan was not able to provide any evidence for this claim. In any event, the board has decided that Okanagan's loss of the bulk milk contract was not directly attributable to the expropriation as required by s. 33 (1) and therefore the alleged increased risk of Kootenay losing its bulk milk contract is not attributable to the expropriation either. The board is satisfied that the requirements of R. 18A are met and it dismisses these claims.

7.6 Kootenay's Claim for Losses of Special Economic Advantage

Kootenay claims in the alternative for losses in 7.2, 7.3, 7.4, and 7.5 as loss of special economic advantages pursuant to s. 30 (2).

The alleged special economic advantages of Lot 1 for Kootenay are almost entirely the same as for Okanagan. Kootenay's claim is dismissed for the same reasons.

 

8. APPREHENSION OF BIAS

The claimants' application is for a termination of the incomplete hearing of this matter and the rescheduling of a new hearing before a different panel of the board. The claimants submit that the remarks of Mr. Burke, claimants' counsel at the hearing prior to his withdrawal on the morning of September 17, 1993, were so prejudicial to the claimants that they create an apprehension of bias in the panel members who heard these remarks.

The claimants relied on Douglas Lake Cattle Co. Ltd. v. Minister of Transportation and Highways (1991), 45 L.C.R. 30, where this board decided that there may be an apprehension of bias in the chair who hears an application for advance payment of costs and that therefore in those cases, the chair should not sit on the panel that subsequently determines compensation. They also referred to a number of criminal decisions including Re R. v. Jassman (1975), 27 C.C.C. (2d) 271 (B.C.S.C.); R.. v. Buchholz (1976), 32 C.C.C. (2d) 331 (Ont. C.A.); and R. v. A.P.P. (1990), 58 C.C.C. (3d) 287 (Man. C.A.). In some of these cases there was reference to prior convictions or other inadmissible evidence which caused the trial judge to withdraw and declare a mistrial. In R. v. A.P.P. the Manitoba Court of Appeal decided that, because of the manner in which two related trials had proceeded and because the trial judge had made a premature finding against the credibility of the accused in the first trial, there was a reasonable apprehension of bias and new trials were ordered.

However, in this case, unlike most of the authorities relied on, there was no inadmissible evidence put to the board which made it difficult for them to consider the issue in an impartial manner. This was a case in which substantial claims for business loss had been made, most of which were contingent on the premise that the bulk milk contract had been lost as a result of the expropriation. If that fact could not be proved on the evidence, then most of the other claims fell with it. After examination and cross examination of the principal witness for the claimants, it became evident, primarily on documentary evidence, that the loss of the bulk milk contract was not caused by the expropriation. Mr. Burke recognized this and on his clients' instructions withdrew various claims as a result. The board has reviewed all of the claims including those withdrawn by Mr. Burke, and relying principally on the documents has determined the claims under R. 18A. In the end result Mr. Duggan's credibility was not an important factor in the determination of these claims. The board is satisfied that this is not a case where the issue of apprehension of bias has any application.

The claimants also submitted that evidentiary rulings made in the course of the hearing about Mr. Duggan's discussions with members of Dairyland's hauling committee contributed to the apprehension of bias and ought to be considered by the board as part of the evidence on this application. This submission is without merit. The board does note that this issue arose in chief before the documents from Dairyland and Shell were introduced and the nature of this evidence, whatever it is, may no longer be relevant.

After due consideration of the evidence and the arguments of counsel on this issue, the board concludes that the claimants' application for an order that the current compensation hearing be abandoned and a new hearing be scheduled before a different panel of the board should be dismissed.

 

9. CONCLUSION

The board has accepted Mr. Burke's withdrawal of various claims on the final morning of the incomplete hearing. In the event that the board is wrong and it ought not to rely on Mr. Burke's withdrawal of claims, the board finds that the evidence does not support that the loss of the bulk milk contract is directly attributable to the expropriation of Lot 1. If the loss of the bulk milk contract is not attributable to the expropriation, then most of the remaining claims for business loss collapse. The exceptions are the claim for market value of Lot 1, the claim for costs to rent back Lot 1 on a temporary basis, and the costs associated with the purchase of replacement property. The application for a ruling pursuant to R. 18A for the market value of Lot 1 is dismissed and, if necessary, that issue can be determined at a continuation of the adjourned hearing. The respondent is liable to pay $832 to Okanagan for costs paid to it by Okanagan to rent back Lot 1 on a temporary basis and $1,808.15 to Kootenay for costs incurred in purchasing replacement property. All of the other outstanding claims brought by the claimants are dismissed under R. 18A except for the claims for interest and costs which are considered below. The claimants' application for a termination of the incomplete compensation hearing and a rescheduling of the hearing before a newly constituted panel of the board is dismissed.

 

10. INTEREST

The respondent shall pay interest pursuant to s. 45 on the $832 payable for the rental of alternative parking space from February 1, 1991 until the date of payment. Interest on the $1,808.15 shall be paid from March 1, 1991 until the date of payment.

 

11. COSTS

Counsel indicated that they wished to make submissions on costs once the board had provided reasons for decision on the application. Therefore the board makes no order as to costs at this time.

 

THEREFORE IT IS ORDERED THAT

(1) The application for a summary determination of the market value pursuant to Rule 18A is dismissed.

(2) The respondent shall pay $832 to Okanagan for costs paid to rent back Lot 1 on a temporary basis pursuant to s. 33 (1) of the Act.

(3) The respondent shall pay $1,808.15 to Kootenay for reasonable costs incurred in purchasing a replacement property similar to Lot 1 pursuant to s. 33 (1) of the Act.

(4) Pursuant to s. 45 (1) of the Act the respondent shall pay interest on the amount of $832 in item 2 from February 1, 1991 until paid, and interest on the amount of $1,808.15 in item 3 from March 1, 1991 until paid. Pursuant to s. 45 (2) of the Act interest shall be calculated at the following rates:

(i) Twelve and three-quarters per cent (12.75%)
from January 1, 1991 to June 30, 1991

(ii) Nine and three-quarters per cent (9.75%)
from July 1, 1991 to December 31, 1991

(iii) Eight per cent (8.00%)
from January 1, 1992 to June 30, 1992

(iv) Seven per cent (7.00%)
from July 1, 1992 to December 31, 1992

(v) Seven and one-quarter per cent (7.25%)
from January 1, 1993 to June 30, 1993

(vi) Six per cent (6.00%)
from July 1, 1993 to December 31, 1993

(vii) Five and one-half per cent (5.50%)
from January 1, 1994 to June 30, 1994

(viii) Eight per cent (8.00%)
from July 1, 1994 to December 31, 1994

(ix) Eight per cent (8.00%)
from January 1, 1995 to June 30, 1995

(x) Eight and three quarters (8.75%)
from July 1, 1995 to December 31, 1995

(5) All other claims advanced by the claimant with the exception of a claim for costs are dismissed pursuant to Rule 18A.

(6) The claimants' application for the termination of the incomplete compensation hearing and the rescheduling of a new compensation hearing in front of a different panel is dismissed.

 

 

Government of British Columbia