February 17, 1995, E.C.B. No. 38/94/83 (55 L.C.R. 128)

Between: Linear Construction Corp.
Claimant
And: Her Majesty The Queen in Right of the Province of British Columbia
and 459453 British Columbia Limited
Respondents
Before: Robert W. Shorthouse, Chair
Appearances: Ronald F. Hunter, for the Claimant
Sarah I. Macdonald, for the Respondent, Her Majesty The Queen
C. Edward Hanman, for the Respondent, 459453 B.C. Ltd.

 

1. BACKGROUND

On December 21, 1994, the claimant company filed with the board an application for determination of compensation in the prescribed form (the "Form A"). In the Form A the claimant alleges that it is a building contractor and that it was engaged under contract to construct a multi-family residential development on the subject lands located on Metchosin Road, near Victoria, B.C. The Form A further alleges that, after the claimant had already begun construction of the residential units, the respondent Her Majesty the Queen in Right of the Province of British Columbia, evidently as represented by the Minister of Transportation and Highways (the "Ministry") expropriated the subject lands. Shortly after the Ministry filed its expropriation notice in the Victoria Land Title Office, the claimant tried to register a claim of builders' lien against title to the subject lands for an amount alleged to be the unpaid balance of the contract price. Registration was refused. After that time, the claimant alleges, the expropriation notice was amended and refiled. In the Form A the claimant claims status as an "owner" and further claims to hold a "security interest" within the meaning of the Expropriation Act, S.B.C. 1987, c. 23 (the "Act") and as such to be entitled to compensation. The Ministry, in its reply to the application for determination of compensation, filed with the board on January 16, 1995, denies that the claimant holds any such status or that it is entitled to any compensation pursuant to the Act.

The claimant has applied to the board by way of notice of motion for a declaration that the claimant is an "owner" within the meaning of the Act, or, alternatively, a declaration that the claimant holds a secured interest within the meaning of the Act. The motion is presently scheduled to be heard by a panel of the board on February 27, 1995.

 

2. APPLICATION

Against this background, the Ministry, by this application filed with the board on January 20, 1995, now seeks to have the claimant's notice of motion dismissed, or, alternatively, to have the notice of motion adjourned generally and not brought on until the parties have completed all pre-hearing discovery procedures. This application was heard by the board in Victoria, B.C. on February 10, 1995.

 

3. ISSUES: DISCUSSION AND ANALYSIS

The Ministry essentially raises three objections and these may conveniently be dealt with in turn.

3.1 Motion to Dismiss: Board's Jurisdiction

First, in support of the motion to dismiss the claimant's application, the Ministry says that the board does not have the jurisdiction to determine by motion the question of whether the claimant is an owner or holder of a security interest within the meaning of the Act. The Ministry relies on the wording of s. 7 of the board's Practice and Procedure Regulation, B.C. Reg. 452/87 (the "Practice Regulation"). That is the section under which notices of motion are brought before the board for hearing.

Section 7 (1) of the Practice Regulation provides:

7. (1) Except as otherwise provided by the Act or regulations, proceedings before the board for any order, decision or determination, other than the determination of compensation pursuant to an application to determine compensation, shall be commenced by notice of motion in Form D.

The Ministry points out that the procedure under s. 7 (1) expressly excludes proceedings having to do with the determination of compensation. The Ministry says the determination of compensation is concerned with two fundamental issues: firstly, is a claimant an "owner" entitled to compensation, and secondly, what is the value of the owner's estate or interest? The Ministry characterizes these two issues as being those of liability or entitlement to compensation, on the one hand, and quantum of compensation, on the other. On the authority of Country Style Holdings Inc. v. British Columbia (Ministry of Transportation and Highways) (1993), 51 L.C.R. 1 (B.C.E.C.B.), the Ministry acknowledges that the board has the jurisdiction to hear an application to sever issues for separate hearing, and on proper grounds to hear the issues of liability and quantum separately. However, according to the Ministry, Country Style is not authority for the proposition that the board can determine, upon application by notice of motion, whether a particular claimant is an owner.

The board disagrees. The Country Style decision makes clear that a Form D application pursuant to s. 7 is one form of request available to seek a preliminary determination of some matter other than a determination of compensation even where the result may be that a substantive issue has been severed from what otherwise could form part of the compensation hearing. In the board's opinion, the question of whether a party falls within the statutory definition of owner is a different one from determining whether that party is entitled to compensation. Even as an owner, a particular claimant may for a variety of reasons not be entitled to any compensation. Counsel for the Ministry submitted that liability becomes a question of who is entitled to claim compensation. The board considers, however, that it is a question of who is entitled to receive compensation. The determination sought on this application is, as claimant's counsel suggested, really more in the nature of deciding upon who has standing. Accordingly, as an application to determine whether a particular party is an "owner" under the Act is not part of the determination of compensation, the board concludes that it has jurisdiction to hear the claimant's application brought by notice of motion pursuant to s. 7 of the Practice Regulation.

3.2 Motion to Dismiss: Appropriateness of Form of Request

The second objection brought by the Ministry in seeking to have the claimant's notice of motion dismissed is that, even if the board has jurisdiction to hear it, it is not appropriate to proceed with the issue of whether the claimant is an owner by way of notice of motion. In the Ministry's submission, proceeding by motion is in effect a form of summary judgment application comparable to an application pursuant to Rule 18 of the Supreme Court Rules. It avoids all of the pretrial discovery contemplated by the Act and the Practice Regulation. For such an application to succeed, the Ministry says, liability must be clear and there can be no triable issue which is not the case here. Moreover, the respondent argues that proceeding by motion to determine the issue of ownership precludes the board from considering whether a separation of issues is appropriate in the particular circumstances of the case.

In the board's view, what is being proposed here by way of the claimant's notice of motion is not a process analagous to Rule 18 but rather, as the claimant says, one more analogous to Rule 18A. Rule 18A, entitled "summary trial", offers a broad procedure for a summary, expedited determination on an issue. It makes provision for the reception of written and transcript evidence, and empowers a court to order oral evidence and discovery. This is a procedure which, to the board's mind, appears suited to a determination of the particular questions at issue in this matter which largely turn on whether the claimant fits the legal definition of "owner" or "security holder" in the statute.

The relevant portions of the definition of "owner" in s. 1 of the Act are as follows:

"owner", in relation to land, means

(a) a person having an estate, interest, right or title in or to the land including a person who holds a subsisting judgment or builder's lien,

. . .

(c) a person who is in legal possession or occupation of land, other than a person who leases residential premises under an agreement having a term of less than one year.

The term "security interest" is defined in the Act to mean "a charge on land, including a lien filed under the Builders Lien Act, that is owned or held by a person as security for the payment of money".

Given that the claimant alleges an attempt to register its claim of builders' lien after the filing of the expropriation notice, which was itself apparently later amended and refiled, the issue of whether the claimant is an owner or security holder seems to resolve itself largely into a point of law having to do with the interpretation of competing statutes. It does not appear to be a particularly fact-laden determination. The issue of whether the claimant was, alternatively, in legal possession or occupation of the land again may not require complex factual determinations as to the physical presence of the claimant on the subject lands so much as a determination of whether a contractor building a project on another's land may be said, as a matter of law and for the purposes of the Act, to be "in legal occupation or possession" of it.

Counsel for the respondent 459453 British Columbia Limited, the fee simple owner of the subject lands, made reference to the fact that the courts, when faced with a preliminary application on the issue, have routinely decided whether a particular claimant is an owner for the purposes of the Act able to assert a claim before the board. He cites the decisions in Casamiro Resources Corp. v. British Columbia (Attorney General) (1991), 47 L.C.R. 161 (B.C.C.A.) and Cream Silver Mines Ltd. v. British Columbia (1993), 49 L.C.R. 171 (B.C.CA.). These, as counsel asserts, have been summary determinations made without resort to a lengthy discovery process. Counsel for the claimant referred to a decision of the Ontario Land Compensation Board, Disposal Services Ltd. v. Municipality of Metropolitan Toronto (1973), 4 L.C.R. 242, which, on an application by way of notice of motion but on an agreed statement of facts, ruled on the question of which was the proper claimant or claimants in advance of the compensation hearing.

Having already decided that the determination of whether the claimant is an owner is not a determination of compensation, it follows that what is being sought here is not a severance of the compensation hearing. The considerations around severance set out in Country Style therefore do not really apply and a separate hearing before the board simply to determine whether the issue should be heard separately in these circumstances is time consuming, costly and unnecessary. Practically speaking, and in light of the preliminary observations made in Country Style, at pp. 3-4, it appears to the board desirable to determine at as early a stage as possible whether the claimant falls within the scope of the Act. This avoids having the claimant incur much time and expense otherwise required in preparation for a compensation hearing if the claimant in law enjoys no status as owner or security holder. It may also, incidentally, affect the timing of an advance payment pursuant to s. 19 of the Act and of advance payments of the claimant's costs pursuant to s. 47 if the claimant is determined to be an owner or security holder.

3.3 Alternative Motion: Adjournment of Application

This leads to the Ministry's third objection, which is argued in the alternative, that it is at the least premature to hear the claimant's notice of motion until the parties have completed all discovery processes they wish to undertake and that, accordingly, the hearing scheduled for February 27, 1995 should be adjourned generally. The Ministry asserts that it is entitled to full discovery of documents and examination for discovery, processes which it says are esssential to defend the claim.

The Ministry cites a very recent decision of the board in Sidney Animal Medical Centre Ltd. and Dr. Terry Huberts v. The Ministry of Transpsrtation and Highways and 459453 B.C. Ltd., unreported, E.C.B. No. 7/93, January 27, 1995. There an application was also made to the board for the determination of whether a particular claimant was an owner for the purposes of the Act. The board decided that the application was "essentially premature", noting that discovery steps were not completed and that both parties should be able to consider the materials that each produced and do whatever discoveries they saw fit. However, in the board's view, that decision turned upon the particular circumstances of the case, in which new affidavit material had been filed by the respondent on the very day of the application, particulars of the claim had been sought and not yet provided, and the matter appeared to involve a complex matrix of facts necessary for the board to consider.

In this instance the board does not question the parties' right under s. 12 of the Practice Regulation to full discovery in the preparation of its case for a compensation hearing, but does question whether that right extends to full discovery of the entire case before the board can make even a determination on a preliminary threshold issue. As of the date of this hearing the claimant had provided the Ministry with some documentation in support of its assertions but had not yet delivered a document list in response to the Ministry's demand for discovery, nor had the time prescribed for doing so expired.

As it would appear to the board that the issues for determination at the hearing scheduled for February 27, 1995 are largely legal rather than factual issues, they would not seem to require the full panoply of pre-hearing discovery suggested by the Ministry. If that should prove not to be the case, and at the hearing it turns out that additional evidence is required for the board to make its determination, then the board considers that it can at that time, as the claimant suggests, have reference to the process set out in subrule 3.3 of Rule 18A of the Supreme Court Rules. The board can, for example, pursuant to Rule 52 (8), order examinations and give directions required for the discovery, inspection or production of documents required for the purpose of making its determination and adjourn the hearing of the application in the meantime. However, to adjourn generally the claimant's notice of motion at this time appears to the board unnecessary and premature.

 

4. CONCLUSION

Accordingly, for the reasons set forth above, the Ministry's application to dismiss the claimant's notice of motion or, alternatively, to adjourn the hearing of that motion, is dismissed. The hearing set for February 27, 1995 may proceed as scheduled.

 

Government of British Columbia